To the Members
Your Directors take pleasure in presenting the 31st Annual Report together with theAudited Statement of Accounts for the Financial Year ended March 31 2021.
Standalone Financial Results (Rs in crores)
|Particulars ||2020-21 ||2019-20 |
|Revenue from Operations ||7255.67 ||8218.80 |
|Other Income ||115.60 ||151.27 |
|Total Income ||7371.27 ||8370.07 |
|Profit before Interest Depreciation Exceptional Items and Tax (PBIDT) ||970.08 ||1181.42 |
|Less: Finance Costs ||457.78 ||517.87 |
|Profit before Depreciation Exceptional Items and Tax ||512.30 ||663.55 |
|Less: Depreciation and Amortisation Expenses ||174.09 ||177.52 |
|Profit before exceptional item & tax ||338.21 ||486.03 |
|Exceptional items (Net) ||- ||(32.67) |
|Profit before tax ||338.21 ||453.36 |
|Provision for Tax(Including earlier Year Taxation) ||77.08 ||71.32 |
|Profit after Tax ||261.13 ||382.04 |
|Other comprehensive income / (loss) for the year ||(11.67) ||(6.93) |
|Total comprehensive income for the year ||249.46 ||375.11 |
|Retained earnings- Opening Balance ||1435.82 ||1162.40 |
|Add: Profit for the Year ||261.13 ||382.04 |
|Less: Transferred to General Reserve ||200.00 ||- |
|Less: Dividend paid during the year (Including Dividend Tax) ||12.21 ||108.62 |
|Retained earnings - Closing Balance ||1484.74 ||1435.82 |
|Paid up Capital ||121.97 ||121.97 |
Operational performance A. Standalone
Your Board takes pleasure in reporting that the Revenue from Operations of the Companyfor the Financial Year ended 31st March 2021 amounted to Rs 7255.67 crores as against Rs8218.80 crores in FY 2019-20 and earned a Profit before Interest DepreciationExceptional Items and Tax (PBIDT) of Rs 970.08 crores for the F.Y 2020-21 asagainst Rs 1181.42 crores in the previous year. After deducting financial charges of Rs457.78 crores providing a sum of
Rs 174.09 crores towards depreciation Rs 77.08 crores for income tax the operationsof the Company resulted in a net profit of
Rs 261.13 crores for the F.Y 2020-21 as against Rs 382.04 crores in F.Y 2019-20.
During the year under review the Revenue from Operations of the Company on aconsolidated basis amounted to Rs 7949.42 crores as against Rs 8901.07 crores in theprevious fiscal. Your Company has earned a PBIDT of Rs 1034.99 crores for the F.Y 2020-21as against Rs 1200.23 crores in the previous Financial year. The operations resultedin a net profit attributable to the shareholders of the Company of Rs 268.31 crores asagainst Rs 336.53 crores in the previous financial year. During the year the Company onconsolidated basis bagged new orders valued around Rs 18943 crores (including change inscope of work) and after deducting the Orders executed the order Book of the company ason March 31 2021 stood at Rs 37911 crores. The operations of the Company during the F.Ywere impacted due to the COVID-19 Global Pandemic. The outbreak of Corona virus (COVID-19)pandemic globally and in India has been causing significant disturbance and slowdown ofeconomic activity. On 24th March 2020 the Government of India ordered a nationwidelockdown initially for 21 days and which was subsequently extended in phases till mid ofMay 2020 to prevent community spread of COVID-19 in India resulting in significantreduction in economic activities. Measures taken to contain the spread of the virusincluding travel bans quarantines social distancing and closure of non-essentialservices had triggered significant disruptions to businesses worldwide resulting in aneconomic slowdown.
COVID-19 is significantly impacting business operations of the companies by way ofinterruption in production supply chain disruption unavailability of personnel closure/ lock down of production facilities etc. Your Company has taken necessary measures tocontain the spread of virus in the project sites and in the various offices from where theemployees are functioning. In spite of the various safety measures taken by the Companysome of the employees workers were infected with the virus and few of them also succumbedto the infection. Further in view of the change in the priorities / plans of the newgovernment in the State of Andhra Pradesh some of the contracts awarded to the variousConstruction Companies including your Company by the Govt of A.P have been foreclosed /de-scoped.
Your Board while taking note of the challenges faced on account of the COVID-19pandemic and the need to conserve the resources recommends payment of Dividend of Rs 0.80per Equity Share of Rs 2/- each (40 %) for the consideration and approval of the membersof the Company at the forthcoming Annual General Meeting.
Transfer to Reserves
Out of the amount of Rs 1684.74 Crores available for appropriation your Directorsapproved transfer of Rs 200.00 crores to General Reserve and the remaining amount of Rs1484.74 crores in the retained earnings.
Management Discussion and Analysis
Business Overview and Outlook and the state of the affairs of the Company and theIndustry in which it operates is discussed in detail in the section relating toManagement Discussion & Analysis which forms part of this Report.
Change in nature of business
There has been no change in the nature of business carried on by the Company during theyear under 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. However the impact of 2nd wave of COVID-19pandemic which has struck India from the mid of March 2021 has impacted operations of theCompany. The economic impact of the 2nd wave on the operations of the Company isunascertainable as on the date of this report.
NCC Ltd and two of its Wholly Owned Subsidiary Companies (WOSs) viz. Aster Rail Pvt.Ltd. and Vaidehi Avenues Ltd. in their respective Board meetings held in December 2019subject to requisite approvals including that of NCLT approved the merger of said WOSswith NCC Limited (Holding Company) with the appointed date as 1st April 2019. The processof merger is delayed due to the restricted functioning of NCLT on account of COVID-19Pandemic.
During the financial year under review there has been no change in the Authorized& Paid up Share Capital of the Company.
Preferential Issue of Warrants to Promoters
Pursuant to the provisions of the Companies Act 2013 SEBI (Issue of Capital andDisclosure Requirements) Regulations 2018 (SEBI ICDR Regulations) and the approvalaccorded by the members of the Company the Company has issued 18000000 ConvertibleWarrants on Preferential basis to Promoters / Promoters Group of the Company at a price ofRs 59/- per warrant ( Including premium of Rs 57/- per warrant). The Company has received25% of the total consideration money amounting to Rs 26.55 crores as per the applicableSEBI (ICDR) Regulations and allotted partly paid warrants to the allottees on 12thFebruary 2021. These warrants are to be converted into equity shares of the Company on orbefore 11th August 2022 i.e. within 18 months from the date of Allotment andsubject to payment of balance 75% of the consideration amount by the allottees.
Particulars of Contracts or Arrangements with Related Parties
All related party transactions entered during the financial year were in the ordinarycourse of the business of the Company and were on an arm's length basis. There were nomaterially significant related party transactions entered by the Company during the yearwith the Promoters Directors Key Managerial Personnel or other persons which may have apotential conflict with the interest of the Company. The policy on Related PartyTransactions as approved by the Audit Committee and the Board of Directors is hosted onthe website of the Company and the link for the same is: http://ncclimited.com/Policies.html.
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 theannual accounts the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) We have selected such accounting policiesand applied them consistently and made judgments and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the Company as at31st March 2021 and of the profit of the Company for the financial year ended 31stMarch 2021; (c) We have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the said Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities; (d)The annual accounts have been prepared on a going concern basis; (e) The Company had laiddown internal financial controls to be followed by the Company and that such internalfinancial controls are adequate and were operating effectively; and (f) We have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems were adequate and operating effectively.
Subsidiary Companies/ Joint venture Companies:
The Company has 35 subsidiaries (including step down subsidiaries) as on 31st March2021. With due compliance with the provisions of the Companies Act 2013 and the Rulesframed there under
5 (five) step down subsidiaries (wholly owned subsidiaries of NCC UrbanInfrastructure Ltd) which were not having any operation were struck off by the Registrarof Companies Hyderabad w.e.f. 9th April 2021. The Ropeway Project at Patnitop awarded bythe Govt. of Jammu and Kashmir was cancelled and the SPV viz. Patnitop Ropeway &Resorts Ltd. (Wholly Owned Subsidiary of the Company) was liquidated through theVoluntary Winding Up process vide order dated 12th February 2021 of NCLT Hyderabad Bench.The merger process of NCC Urban Infrastructure Ltd with 9 (nine) of its wholly ownedsubsidiaries is slightly delayed due to the lockdown on account of COVID-19. There was nomaterial change in the nature of the business carried on by the subsidiaries. As per theprovisions of Section 129 of the Companies Act 2013 read with the Companies (Accounts)Rules 2014 a separate statement containing the salient features of the financialstatements of the Subsidiary Companies / Associate Companies/Joint Venture Companies 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 and the Rules framedthereunder the Balance Sheet Statement of Profit and Loss and other documents of thesubsidiary companies are being made available on the website of the Company and are notattached with the Financial Statements of the Company.
The Company will make available the Financial Statements of the subsidiary companiesand the related information to any member of the Company who may be interested inobtaining the same. In compliance with Section 134 of the Companies Act 2013 read withthe rules framed thereunder and the provisions of the SEBI (Listing Obligations andDisclosure Requirement) Regulations 2015 as amended from time to time the FinancialStatements for the F.Y 2020-21 have been prepared in compliance with the applicable IndianAccounting Standards.
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)and other applicable provisions of the Companies Act 2013 and the Indian AccountingStandards Ind AS-110 and other applicable Accounting Standards your Directors havepleasure in attaching the consolidated financial statements for the financial year endedMarch 31 2021 which forms part of the Annual Report.
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. TheCompany is making every effort to conserve the usage of power wherever possible.
B. R&D and technology absorption: Not applicable
C. Foreign exchange earnings and outgo during the F.Y 2020-21 Foreign exchange earnings- Rs 1.25 crores Foreign exchange outgo i. Towards travel Rs 0.09 crores ii. Towardsimport of capital goods & material supplies
Rs 85.95 crores
During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations in future.
Particulars of loans guarantees or investments under Section 186;
Details of Loans Guarantees Investments under the provisions of Section 186 of theCompanies Act 2013 read with Companies (Meetings of Board and its Powers) Rules 2014 asat 31st March 2021 form part of the Notes to the financial statements provided in thisAnnual Report.
During the Financial Year 2020-21 Sri S Ravi (DIN 00180746) an Independent Directorand Member of the Audit Committee and Stakeholders Relationship Committee retired from theBoard upon completion of his tenure of appointment w.e.f 9th November 2020. Your Boardplaces on record the valuable contribution of Sri S Ravi during his associationwith the Company as an Independent Director and as a Member of the Committees.
During the year under review and based on the recommendation of Nomination andRemuneration Committee and subject to the approval of the members of the Company theBoard of Directors at its meeting held on 30th December 2020 has appointed Sri OmPrakash Jagetiya (DIN 00546495) as an Independent Director of the Company w.e.f. 30thDecember 2020. Further the Members of the Company have approved the appointment of SriJagetiya vide resolution dated 6th February 2021 passed through Postal Ballot.
In pursuance of Section 152 of the Companies Act 2013 and the rules framed thereunder Sri A G K Raju (DIN-00019100) Executive Director and Sri A V N Raju(DIN-00018965) Whole time Director are liable to retire by rotation at theensuing Annual General Meeting and being eligible have offered themselves forreappointment. Based on the recommendation of the Nomination and Remuneration Committeeand subject to the approval of the members of the Company at the ensuing AGM the Board ofDirectors at its meeting held on 28th May 2021 have re-appointed Sri A V N Raju(DIN00018965) as a Whole-time Director of the Company for a period of five (5) yearsw.e.f. 30th May 2021. Other than as stated above there has been no other change in theDirectors 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 readwith sub rule (1) and (2) of Rule 6 of Companies (Appointment and Qualification ofDirectors) Rules 2014 as amended.
Key Managerial Personnel
As on 31st March 2021 Sri A A V Ranga Raju Managing Director Sri A G K RajuExecutive Director Sri A S N Raju Sri J V Ranga Raju and Sri A V N Raju WholetimeDirector(s) Sri K Krishna Rao EVP (F&A) and CFO and Sri M V Srinivasa MurthyCompany Secretary & EVP (Legal) are Key Managerial Personnel of the Company inaccordance with the provisions of Section(s) 2(51) 203 of the Companies Act 2013 readwith the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.During the year under review Sri R Subba Raju retired as Chief Financial Officer of theCompany w.e.f. 30th November 2020. The Board places on record the valuable contributionmade by Sri R Subba Raju to the Company during his long association with the company.Based on the recommendation of the Nomination and Remuneration Committee and theinprinciple approval accorded by the Audit Committee the Board of Directors at itsmeeting held on 10th November 2020 have appointed Sri K Krishna Rao as ChiefFinancial Officer (CFO) of the Company w.e.f. 1st December 2020.
Policy on Directors' Appointment and remuneration and other details
The Company's policy on Directors' appointment and remuneration and other matterspursuant to Section 178(3) of the Companies Act 2013 is hosted on the Company's websiteand the web link thereto is: http://ncclimited.com/Policies.html.
The requisite information pursuant to Section 178(4) of the Act is given in theCorporate Governance Report which forms part of the Annual Report.
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees the Individual Directors the Chairman of the Company etc pursuant tothe provisions of the Companies Act 2013 read with the Rules framed thereunder and SEBI(LODR) Regulations.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc. The performance of theCommittees was evaluated by the Board after seeking inputs from the Committee Members onthe basis of criteria such as the composition of committees effectiveness of committeemeetings etc.
In a separate meeting of Independent Directors performance of the Directors the Boardas a whole and the Chairman of the Company was evaluated taking into account the views ofexecutive directors and non-executive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the Board and Committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.
Meetings of Board of Directors
The Board Calendar is prepared and circulated in advance to the Directors. During theFinancial Year under review the Board has met ten times i.e. on May 29 2020 June 262020 August 12 2020 August 28 2020 September 24 2020 November 10 2020 December30 2020 January 25 2021 February 11 2021 and March 18 2021. The details with respectto Committee meetings and attendance there at as required under the Secretarial Standard-1issued by the Institute of Company Secretaries of India have been provided in theCorporate Governance Report forming part of this Annual Report.
The details of the familiarization programme formulated for Independent Directors ishosted on the Company's website and the web link thereto ishttp://ncclimited.com/corporate_ governance. html
The Company has in place an Audit Committee in terms of the requirements of theCompanies Act 2013 read with the Rules made thereunder and Regulation 18 of the SEBI(LODR) Regulations 2015. The details relating to the Audit Committee are given in thesection relating to Corporate Governance forming part of the Annual Report.
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
16 grievances to the appropriate authority. The Whistle Blower Policy which has beenapproved by the Board of Directors of the Company has been hosted on the website of theCompany http://ncclimited. com/Policies.html. During the year under review the Company hasnot received any complaint(s) under the said policy.
The Company has established Enterprise Risk Management process to manage risks with theobjective of maximizing shareholders value.
The Board of Directors of the Company has formed a Risk Management Committee toimplement and monitor the risk management Policy of the Company. The development andimplementation of the risk management policy has been covered in the Management Discussionand Analysis which forms part of this report.
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.
Compliance with Secretarial Standards
The Company has complied with applicable provisions of the Secretarial Standards issuedby the Institute of Company Secretaries of India and approved by the Government of Indiaunder Section 118(10) of the Companies Act 2013.
Pursuant to Section 92 (3) of the Companies Act 2013 a copy of the annual return forthe financial year ended 31st March 2021 has been placed on the website of the Company athttp://ncclimited. com/AGM_EGM_Info.html.
Statutory Auditors and their report
M/s. S R Batliboi & Associates LLP(Firm Registration No.101049W/ E300004)Chartered Accountants who were appointed as Statutory Auditors of the Company for a termof five years from the conclusion of the 27th Annual General Meeting till the conclusionof the 32nd Annual General Meeting conducted the Statutory Audit for the FY-2020-21.TheIndependent Auditors' Report(s) to the Members of the Company in respect of the StandaloneFinancial Statements and the Consolidated Financial Statements for the Financial Yearended March 31 2021 form part of this Annual Report and do not contain anyqualification(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 Practicing Company Secretaries toconduct Secretarial Audit of the records and documents of the Company for the FinancialYear 2020-21. The Secretarial Audit Report for the Financial Year ended 31st March 2021in Form MR-3 is annexed to and forms part of this Report - Annexure - I. TheSecretarial Auditors' Report to the Members of the Company for the Financial Year endedMarch 31 2021 does not contain any qualification(s) or adverse observations
In compliance with the provisions of Section 148 of the Companies Act 2013 and therules framed thereunder and based on the recommendation of the Audit Committee the Boardof Directors of the Company at its meeting held on 29th May 2020 had appointed M/s.Vajralingam & Co. Cost Accountants (Firm Registration No.101059) as the Cost Auditorsof the Company for the FY 2020-21 to conduct audit of the cost accounts and recordsmaintained by the Company to the extent applicable. In terms of the provisions of Section148(3) of the Companies Act 2013 read with Rule 14(a)(ii) of the Companies (Audit andAuditors) Rules 2014 the remuneration of the Cost Auditors has to be ratified by themembers. Accordingly necessary resolution is proposed at the ensuing AGM for ratificationof the remuneration payable to the Cost Auditors for FY-2020-21.
Pursuant to the provisions of Chapter IV read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 a separate section onCorporate Governance has been incorporated in the Annual Report for the information of theshareholders. A certificate from the Secretarial Auditors of the Company regardingcompliance with the conditions of Corporate Governance as stipulated under the saidSchedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015also forms part of this Annual Report.
Business Responsibility Report
As stipulated under Regulation 34 of the SEBI (LODR) Regulation 2015 BusinessResponsibility Report is attached and forms part of the Annual Report.
Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 (the Rules') allunpaid or unclaimed dividend are required to be transferred by the Company to the IEPFestablished by the Government of India after the completion of seven years. Furtheraccording to the said Rules the shares on which dividend has not been paid or claimed bythe shareholders for seven consecutive years or more shall also be transferred to thedemat account of the IEPF Authority. In compliance with the aforesaid provisions theCompany has transferred the unclaimed and unpaid dividends and corresponding shares toIEPF. The details of the unclaimed / un paid dividend during the last seven years and alsothe details of the unclaimed shares transferred to IEPF are given in the Report onCorporate Governance forming part of the Annual Report.
Reporting of Frauds
There have been no instances of fraud reported by the Auditors of the Company underSection 143(12) of the Companies Act 2013 and the Rules framed there under either to theCompany or to the Central Government
Corporate Social Responsibility
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year underreview are set out in Annexure-II of this Report in the format prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014 as amended. The CSR Policyis available on the website of the Company http://ncclimited.com/Policies.html. As per theprovisions of the Companies Act 2013 and the Rules framed thereunder during the F.Y2020-21 the Company was required to spend an amount of Rs 13.15 Crore (including Rs 2.19Crore unspent CSR amount carried forward from the Financial Year 2019-20) towards CSRactivities. During the F.Y 2020-21 the Company had spent an amount of Rs 4.40 crorestowards CSR expenditure upto 31st March 2021 as per details given in the saidAnnexure-II. The shortfall in the expenditure was mainly on account of inability of theCompany to proceed with the activities in the ongoing projects for which the Board and theCSR Committee had accorded approval due to COVID-19.The unspent CSR amount has beentransferred to a separate bank account to be utilised for completion of the ongoing CSRprojects.
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 from time to time formspart of this report. The Annual Report and accounts are being sent to the share-holdersexcluding the aforesaid exhibits. Shareholders interested in obtaining this informationmay access the same from the Company's website.
The ratio of the remuneration of each Director to the median employee's remunerationand other details in terms of Section 197(12) of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is given in Annexure III and forms part of this Report.
Protection of Women at Work Place
The Company has formulated a policy on Prevention of Sexual Harassment of Women atWorkplace in accordance with The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Company has an Internal Complaints Committee forproviding a redressal mechanism pertaining to sexual harassment of women employees atworkplace. During the financial year ended 31st March 2021 the Company has not receivedany complaints pertaining to Sexual Harassment.
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 Central and State Government Authorities Associates JV partnersclients consultants sub-contractors suppliers and Members of the Company and lookforward for the same in equal measure in the coming years.
| ||For and on behalf of the Board |
| ||Hemant M Nerurkar |
|Place: Hyderabad ||Chairman |
|Date:28th May 2021 ||(DIN No. 0265887) |