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NBCC (India)

BSE: 534309|NSE: NBCC|ISIN: INE095N01031|SECTOR: Infrastructure - General
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Mar 17
Notes to Accounts Year End : Mar '18

* Disclosure in pursuant to Guidance Note issued by the Institute of Chartered Accountants of India on Accounting for Real Estate Transactions (for entities to whom Ind AS is applicable) & Indian Accounting Standard (Ind AS) - 11 (Refer Note 22B & 22C respectively)

** Includes outstanding advance of Rs,1300.00 Lakhs (Previous Year Rs,1300.00 Lakhs) recoverable from Indian Drugs and Pharmaceuticals Limited (IDPL), a public sector undertaking (PSU). M/s IDPL was declared sick by Board for Industrial & Financial Reconstruction (BIFR). The company''s claim was admitted by IDPL during BIFR proceedings. However, BIFR has been wound up by Government of India via notification dated November 25, 2016. The company has filed its application before NCLT Chandigarh for recovery of the Claim. Since the amount had earlier been admitted by IDPL during BIFR proceedings, the company considers advance of Rs,1300.00 Lakhs recoverable from IDPL as good for recovery and no provision is required in respect of such advance.

The Company has only one class of Equity Shares having a par value of Rs, 2 per share. Each shareholders is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note -1

During the year 2011-12, 30000000 Equity Shares of Rs, 10/- each were issued as fully paid Bonus Shares with rights pari passu with existing Equity Shares.

During the year 2016-17, 300000000 Equity Shares of Rs, 2/- each were issued as fully paid Bonus Shares with rights pari passu with existing Equity Shares.

Note -2

Company has split face value of equity share from Rs, 10/- each to Rs, 2/- per share as approved by the shareholders of the Company through postal ballot on June 02, 2016

Note -3

Reserves and Surplus

Nature and purpose of Other Reserves

Retained Earnings

Retained Earning represent the undistributed profits of the Company.

General Reserve

General Reserve represents the statutory reserve, this is in accordance with Corporate law wherein a portion of profit is apportioned to General Reserve. Under Companies Act, 1956 it was mandatory to transfer amount before a company can declared dividend, however under Companies Act, 2013 transfer of any amount to General Reserve is at the discretion of the Company.

Other Comprehensive Income

Other Comprehensive Income represents balance arising on account of Gain/(Loss) booked on Re-measurement of Defined Benefit Plans.

Note - 4

The Company has adopted Indian Accounting Standard (Ind AS) - 19 on Employee Benefit as under :

Gratuity

The Company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity on superannuation, resignation, termination, disablement or on death in accordance with Gratuity Act 1972. In the year 2017-18, consequent upon the amendment in the Gratuity Act 1872, the maximum limit of Gratuity to be paid to any employee has been enhanced from Rs,10.00 Lakhs to Rs,20.00 Lakhs The scheme is funded by the Company and is managed by a separate trust formed during the financial year 2007-08. The liability for the same is recognized on the basis of actuarial valuation and accordingly transferred to Gratuity Trust. The provision for the year 2017-18 is Rs,4146.82 Lakhs {Previous Year Rs,436.36 Lakhs}. The gains/losses on the remeasurement of the assumptions on the Gratuity plan have been recognized in Other Comprehensive Income (OCI).

Earned Leave

The Company has a other long term benefit plan for Earned Leave Encashment. Provision for Encashment of Earned Leave equivalent to maximum of 300 days (basic pay plus dearness allowance) is provided at the year end and charged to Statement of Profit & Loss. The liability for the year 2017-18 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Earned Leave Encashment as on March 31, 2018 is Rs,2982.55 Lakhs {Previous Year Rs,3590.19 Lakhs}.

Sick Leave

The Company has a other long term benefit plan for Sick Leave Encashment. The encashment of half pay leave on superannuation will be allowed in addition to encashment of earned leave subject to overall limit of 300 days. The cash equivalent payable for Sick leave would be equal to leave salary as admissible for half pay plus DA and to make up the shortfall in earned leave. No commutation of Sick leave shall be allowed for this purpose. The liability for the year 2017-18 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Sick Leave Encashment as on March 31, 2018 is Rs,1240.06 lakhs {previous year Rs,1085.23 Lakhs}.

Travelling Allowance on Superannuation

The cumulative liability for Travelling Allowance to be paid to the employees on superannuation (exit) as on March 31, 2018 is Rs,47.21 lakhs {previous year Rs,45.75 Lakhs} based on actuarial valuation.

Post Retirement Medical Benefits

The Company is having a defined benefit plan for Post Retirement Medical Benefits payable to the employees and the retirees of the company. The liability for the year 2017-18 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Post Retirement Medical Benefits as on March 31, 2018 is Rs,3834.06 lakhs {Previous Year Rs,2370.43 Lakhs}.

Pension

The company has implemented pension scheme through NBCC Employees Defined Contribution Superannuation Pension trust under IDA pattern for those employees who have completed 15 years of service in the CPSE and on the regular rolls of the company as on November 26, 2008. The scheme is managed by a separate Trust formed in the year 2012-13 for the purpose. The contribution for pension amounting to Rs,922.18 Lakhs {Previous Year Rs,763.96 Lakhs} has been paid during the year 2017-18.

Long Service Awards

The Company has introduced a Scheme of Long Service Awards during the Financial Year 2016-17 covering all the Employees below Board Level who are on the regular roll as on September 3, 2016 onwards and completed (i) 30 Years of Service or more (ii) 35 Years of Service or more. The company has recognized a liability of Rs,147.36 Lakhs { Previous Year Rs,187.10 Lakhs } during the Financial Year 2017-18 on the basis of Actuarial Valuation

A) Proposed Dividend Rs,0.56 per share on face value of Rs,1.00 per share (previous year Rs,1.10 per share on face value of Rs,2 per share)

B) Proposed Dividend per share for the year is after considering sub division of the equity shares of the company to face value of Rs,1.00 per share by shareholders of the company through postal ballot on April 5, 2018.

C) Proposed Dividend is subject to approval of Shareholders in ensuing general meeting of the company.

Note -5 Related party transactions

Subsidiaries Joint Ventures Key Managerial Personnel (KMP)

NBCC Services Ltd. NBCC - MHG Dr. Anoop Kumar Mittal (Chairman-cum-Managing Director)

NBCC Engineering & Consultancy Ltd. NBCC - AB Mr. S. K. Pal, Director (Finance) (Ceased to be Director w.e.f January

NBCC Environment Engineering Ltd. NBCC - R.K. Millen 30, 2018)

NBCC International Ltd. Real Estate Development & Mr'' Rajendra Chaudhari, Director (Commercial)

NBCC Gulf L L C Construction Corporation of Mr. Neelesh Kumar Shah, Director (Projects) w.e.f. February 13, 2018

Hindustan Steelworks Construction Rajasthan Limited

Ltd. JBCC International (PTY) Mrs. Deepti Gambhir (Company Secretary)

Disclosures in respect of transactions with identified related parties are given only for such period during which such relationships existed.

Disclosures in respect of Key Managerial Personnel remuneration are given in Note No. - 28A

In accordance with para 25 of Indian Accounting Standard (Ind As - 24) Related Party Disclosure, no disclosure is required for Subsidiary Companies/ Joint Venture Entities which can be treated as state controlled enterprises( i.e ownership by Central/ State Government, directly or Indirectly, is more than 50% of voting rights )

Note 6

Operating Leases - Lessee

The Company''s significant leasing arrangements are in respect of operating leases relating to its leased office premises. These lease arrangements which are cancelable, are generally renewable by mutual consent.

Disclosure as per Indian Accounting Standard (Ind AS) 108 Operating Segments

a) Operating Segments

Management currently identifies the Company''s three service lines as its Operating Segments as follows:- Project Management Consultancy ( PMC )

- Real Estate

- Engineering, Procurement and Construction ( EPC )

b) Segment Revenue & Expenses

Revenue & Expenses directly attributable to the segment is considered as Segment Revenue & Segment Expenses

c) Segment Assets & Liabilities

Segment Assets & Liabilities include the respective directly identifiable to each of the segments.

These Operating Segments are monitored by the Company''s chief operating decision maker and strategic decisions are made on the basis of segment Operating Results. Segment performance is evaluated based on the profit of each segment.

The following tables present Revenue and Profit Information and certain Assets and Liability information regarding the Company''s reportable segments for the years ended March 31, 2018 and March 31, 2017-

Geographical Information

The operations of the Company are mainly carried out within the country and therefore, geographical segments are not disclosed.

Information about major customers

During the year ended March 31, 2018 revenue of approximately 23.53% (previous year : 22.44%) are derived from a single external customer in the Project Management Consultancy Segment)

The carrying amount of Trade Receivables, Trade Payables and Cash & Cash Equivalent are considered to be the same as their Fair Values due to their short term nature

The carrying amount of the Financial Assets and Liabilities carried Amortized Cost is considered a reasonable approximation of Fair Value.

The above table excludes Investment in Subsidiaries, Associate and Joint Venture, which are measured at cost in accordance with Ind AS 27, ''Separate Financial Statements''.

(i) Fair Value Hierarchy

Financial Assets and Financial Liabilities measured at fair value in the Balance Sheet are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:

- Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

- Level 2: The fair value of Financial Instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market data rely as little as possible on entity specific estimates.

- Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The following table shows the Levels within the hierarchy of Financial Assets and Liabilities measured at Fair Value on a recurring basis at March 31, 2018 and March 31, 2017:

(iii) Valuation Technique used to determine Fair Value

Specific valuation techniques used to value Financial Instruments includes the use of Net Asset Value for Mutual Funds on the basis of the statement received from investee party.

Financial Risk Management

The Company''s activities expose it to credit risk, liquidity risk and market risk. The Company''s board of directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the Financial Statements.

(A) Credit Risk

The Company is exposed to credit risk from its Operating Activities ( Primarily Trade Receivables ) and from its Financing Activities including Deposits with Banks, Mutual Funds and Financial Institutions and other Financial Instruments.

(i) Credit Risk Management

The Company assesses and manages credit risk of Financial Assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of Financial Assets.

A: Low Credit Risk on financial reporting date B: Moderate Credit Risk C: High Credit Risk

In respect of Trade Receivables, the company recognises a provision for lifetime Expected Credit Loss.

Based on business environment in which the Company operates, a default on a Financial Asset is considered when the counter party fails to make payments within the agreed time period as per contract or decided later based upon the factual circumstances on case to case basis. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions

Assets are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognized in Statement of Profit and Loss.

Concentration of Trade Receivables

The Company''s Major Exposure to Credit Risk for Trade Receivables are from various Government Departments/ Ministries

Credit Risk Exposure

Provision for Expected Credit Losses

The Company provides for Expected Credit Loss based on 12 month and lifetime Expected Credit Loss basis for following Financial Assets -

(B) Liquidity Risk

The Company''s principal sources of liquidity are Cash and Cash Equivalents which are generated from Cash Flow from Operations. The Company has no outstanding Bank Borrowings. The Company Consider that the Cash Flows from Operations are sufficient to meet its current liquidity requirements.

Maturities of Financial Liabilities

The tables below analyse the Company''s Financial Liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is insignificant.

(C) Market Risk

The Company''s exposure towards Price Risk arises from Investments held and classified in the Balance Sheet either as Fair Value through Other Comprehensive Income or at Fair Value through Profit & Loss. To manage the price risk arising from investments in equity securities, the Company diversifies its portfolio of assets.

The Company''s exposure to equity securities price risk arises from Investments held by the Company and classified in the Balance Sheet as Fair Value through Profit & Loss.

Note -7

Capital Management

The Company''s objectives when managing capital are to:

- Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

- Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt (net debt comprises of borrowings less cash and cash equivalents). Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio.

The Company has no outstanding debt as at the end of the respective years. Accordingly company has NIL Capital gearing ratio as at March 31, 2018 and March 31, 2017.

Note -8

Events After Balance Sheet Date

A. Company has split face value of equity share to Rs, 1.00 per share as approved by the shareholders of the Company through postal ballot on April 05, 2018.

B. Proposed Dividend Rs, 0.56 per share on face value of Rs,1.00 per share (previous year Rs, 1.10 per share on face value of Rs,2 per share)

Note -9

Previous year figures have been regrouped and/or reclassified, wherever, necessary to conform to those of the current year grouping and/or classification. Negative figures have been shown in brackets.

Source : Dion Global Solutions Limited
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