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NCC

BSE: 500294|NSE: NCC|ISIN: INE868B01028|SECTOR: Construction & Contracting - Civil
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Directors Report Year End : Mar '18    Mar 17

Directors'' Report

To the Members,

The Directors take pleasure in presenting the 28th Annual Report together with the Audited Statement of Accounts for the Financial Year ended March 31, 2018.

Standalone Financial Results

Rs, in Million

2017-18

2016-17

Revenue from Operations

75593.23

78920.73

Other Income

1158.33

1400.76

Total Income

76751.56

80321.49

Profit before Interest, Depreciation, Exceptional Items and Tax

9707.16

8252.52

Less: Finance Costs

3789.40

3956.99

Profit before Depreciation, Exceptional Items and Tax

5917.76

4295.53

Less: Depreciation and Amortisation Expenses

1174.71

1120.63

Profit before exceptional item & tax

4743.05

3174.90

Exceptional item

(1065.64)

(503.37)

Profit before tax

3677.41

2671.53

Provision for Tax(Including earlier Year Taxation)

809.37

416.52

Profit after Tax

2868.04

2255.01

Other comprehensive income / (loss) for the year

(19.70)

(38.85)

Total comprehensive income for the year

2848.34

2216.16

Retained earnings- Opening Balance

4103.64

2250.09

Add: Profit for the Year

2868.04

2255.01

Less: Dividend paid during the year (Including Dividend Tax)

267.65

401.46

Retained earnings - Closing Balance

6704.03

4103.64

Paid up Capital

1201.29

1111.86

Operational performance

A. Standalone

You will note that your Company posted a turnover of Rs, 76751.56 million for the year ended 31st March, 2018 as against Rs, 80321.49 million in FY-2016-17 and earned a PBIDT of Rs, 9707.16million for the F.Y 2017-18 as against Rs, 8252.52 million for the F.Y 2016-17. After deducting financial charges of Rs, 3789.40 million, providing a sum of Rs, 1174.71 million towards depreciation Rs, 809.37 million for income tax and after exceptional items of Rs, 1065.64 million, the operations resulted in a net profit of Rs, 2868.04 million as against Rs, 2255.01 million in FY-2016-17.

B. Consolidated

During the year under review, your Company achieved a consolidated turnover of Rs, 84919.98 million as against Rs, 92044.73 million in the previous fiscal. Your Company has earned a PBIDT of Rs, 9807.49 million as against Rs, 8736.21 million in the previous year. The operations resulted in a net profit attributable to the shareholders of the Company of Rs, 1686.34 million as against Rs, 316.84 million in the previous year.

During the year the Company, on consolidated basis, bagged new orders valued around Rs, 238750.00 million (net of GST) and the order Book of the company as on March 31, 2018 stood at Rs, 325320.00 million.

QIP ISSUE

The QIP Issue made by the Company in January, 2018 received very good response from the Institutional Investors and the Company had successfully raised an amount of Rs, 5500 million. Post the QIP Issue the Paid-Up Capital of the Company had increased from Rs, 1111.86 million to Rs, 1201.29 million.

Proposed Dividend

Your Board takes pleasure in recommending Dividend of Rs, 1/- per Equity Share of Rs, 2/- each (50%) as against Rs, 0.40 (20%) per Equity Share in the Previous Year for the consideration and approval of the members of the Company at the forthcoming Annual General Meeting.

Transfer to Reserves

The Directors have decided to retain the entire amount of Rs, 6704.03 million in the retained earnings.

Management Discussion and Analysis

Business Overview and Outlook and the state of the affairs of the Company and the Industry in which it operates, is discussed in detail in the section relating to Management Discussion & Analysis.

Change in nature of business:

There is no change in the nature of business carried on by the Company during the year 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 the Company which occurred between the end of the financial year to which the financial statements relate and the date of this Report.

Particulars of Contracts or Arrangements with Related Parties

All related party transactions entered during the financial year were in the ordinary course of the business of the Company and were on an arm''s length basis. There were no materially significant related party transactions entered by the Company during the year with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company.

The policy on Related Party Transactions as approved by the Audit Committee and the Board 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 ordinary course of business and were on an arm''s length basis, the requirement of furnishing the requisite details in Form AOC-2 is not applicable to the Company.

Directors'' responsibility statement

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

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

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

(c) We have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company 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 Company and that such internal financial controls are adequate and were operating effectively.

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

Subsidiary Companies/ Joint venture Companies / Associate Companies:

The Company has 51 subsidiaries (including step down subsidiaries) as of March 31, 2018. There was no material change in the nature of the business carried on by the subsidiaries. During the year under review the Company has floated a new subsidiary viz., Talaipalli Coal Mining Private Ltd under a Joint Venture with another Company.

As per the provisions of Section 129 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary Companies/ Associate Companies/Joint Ventures is prepared 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 framed thereunder, the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies are being made available on the website of the Company and are not attached with the Annual Accounts of the Company. The Company will make available the Annual Accounts of the subsidiary companies and the related information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection by any member at the Registered office of the Company and that of the respective subsidiary companies.

In compliance with Section 134 of the Companies Act, 2013 read with the rules framed there under and Provisions of SEBI ( Listing Obligations and Disclosure Requirement) Regulations, 2015 as amended from time to time the Financial Statements for the F.Y 2017-18 have been prepared in compliance with the applicable Indian Accounting Standards.

Consolidated financial statements

In compliance with Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in compliance with the provisions of Section 129(3) and other applicable provisions of the Companies Act, 2013 and the Indian Accounting Standards Ind AS-110 and other applicable Accounting Standards, your Directors have pleasure in attaching the consolidated financial statements for the financial year ended March 31, 2018, which forms part of the Annual Report.

Preferential Issue of Warrants to Promoters

The Board of Directors of the Company at its meeting held on 24th May, 2018 subject to the approval of the members of the Company and other requisite approvals had accorded in principle approval for raising an amount up to Rs,1100 million by issue of convertible warrants to M/s. AVSR Holdings Private Limited one of the promoters of the Company.

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 during the F.Y 2017-18 Foreign exchange earnings - Nil

Foreign exchange outgo

i. Towards travel Rs, 1.12 million

ii. Towards import of capital goods & material supplies Rs, 887.11 million

iii. Others Rs, 1.04 million

During the year under review no significant and material orders were passed by the regulators or courts or tribunals 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 with Companies (Meetings of Board and its Powers) Rules, 2014, the details of Loans, Guarantees, Investments given / made during the Financial Year ended 31st March, 2018 are given in Annexure- 1

Directors :

In pursuance of Section 152 of the Companies Act, 2013 and the Rules framed there under, Sri A G K Raju (DIN-00019100), Executive Director and Sri A S N Raju (DIN-00017416) Whole-time Director are liable to retire by rotation, at the ensuing Annual General Meeting and being eligible have offered themselves for reappointment.

During the period under review Sri N R Alluri and Sri Amit Dixit Directors have resigned from the Board due to pre-occupation. Sri Neeraj Mohan, Director had resigned from the Board on 7th May, 2018 due to pre-occupation. Your Board places on record the valuable services rendered by Sri N R Alluri, Sri Amit Dixit and Sri Neeraj Mohan during their tenure as Directors of the Company.

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

Key Managerial Personnel

Sri A A V Ranga Raju, Managing Director, Sri A G K Raju, Executive Director, Sri A S N Raju, Sri J V Ranga Raju and Sri A V N Raju, Whole time Director(s), Sri R S Raju, Associate Director (F&A) & CFO and Sri M V Srinivasa Murthy, Company Secretary & EVP (Legal) are Key Managerial Personnel of the Company in accordance with the provisions of Section(s) 2(51), and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. There has been no change in the Key Managerial Personnel during the Financial Year under review.

Policy on Directors'' Appointment and remuneration and other details

The Company''s policy on Directors'' appointment and remuneration and other matters provided in Section 178(3) o the Companies Act, 2013 is hosted on the Company''s website and the weblink thereto is (http://ncclimited.com/Policies.html).

Meetings of Board of Directors

During the Financial Year seven (7) meetings of the Board of Directors were held . The details of the meetings of the Board are given under the Section Corporate Governance Report which forms part of this Report.

The details of the familiarization programme formulated for Independent Directors is hosted on the Company''s website and the web link thereto is http://ncclimited.com/corporate governance. html.

Audit Committee

The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the Rules made there under and Regulation 18 of the SEBI (LODR) Regulations, 2015. The details relating to the Audit Committee are given in the section relating to Corporate Governance forming part of the Board Report.

During the year under review Sri Amit Dixit Non-executive Director ceased to be a member of the Audit Committee consequent to his resignation as a Director of the Company.

Whistle Blower Policy/Vigil Mechanism

Pursuant to Section 177 of the Companies Act, 2013 and the Rules framed there under and pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations,2015 the Company has established a mechanism through which all the stakeholders can report the suspected frauds and genuine grievances to the appropriate authority. The Whistle Blower Policy which has been approved by the Board of Directors of the 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 any complaint(s) under the said policy.

Risk Management

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

Internal Financial Controls and their adequacy

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

Compliance with Secretarial Standards

The Company has complied with applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Government of India under Section 118(10) of the Companies Act, 2013.

Extract of Annual Return

The extract of the Annual Return of the Company in Form MGT-9 for the Financial Year ended 31st March, 2018 is given in Annexure- 2 and forms part of the Directors'' Report.

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 term of Five years from the conclusion of the 27th Annual General Meeting till conclusion of 32nd Annual General Meeting conducted the Statutory Audit for the FY-2017-

18.The Independent Auditors'' Report(s) to the Members of the Company in respect of the Stand alone Financial Statements and the Consolidated Financial Statements for the Financial Year ended March 31, 2018 form part of this Annual Report and do 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 has appointed M/s. BS & Company, Company Secretaries LLP, Practicing Company Secretaries to conduct Secretarial Audit of the records and documents of the Company for the Financial Year 2017-18. The Secretarial Audit Report for the Financial Year ended 31st March, 2018 in Form MR-3 is annexed to the Directors Report - Annexure - 3 and forms part of this Report. The Secretarial Auditors'' Report to the Members of the Company for the Financial Year ended March 31, 2018 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 Board of Directors of the Company at its meeting held on May 23, 2017 had appointed M/s. Vajralingam & Co., Cost Accountants (Firm Registration No. 101059) as the Cost Auditors of the Company for the FY 2017-18. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a)(ii) of the Companies (Audit and Auditors) Rules, 2014, 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 the remuneration payable to the Cost Auditors for FY 2017-18.

Corporate Governance

Pursuant to the provisions of Chapter IV read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance has been incorporated in the Annual Report for the information of the shareholders. A certificate from the Statutory Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under the said Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also forms part of this Annual Report.

Business Responsibility Report

As stipulated under Regulation 34 of the SEBI (LODR) Regulation 2015, Business Responsibility 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 IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), all unpaid or unclaimed dividend are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of seven (7) years. Further, according to the Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. In compliance with the aforesaid provisions the Company has transferred the unclaimed and unpaid dividends and corresponding shares to IEPF. The details of the unclaimed / un paid dividend during the last seven (7) years and also the details of the unclaimed shares transferred to IEPF are given in the Report on Corporate Governance forming part of the Annual Report.

Reporting of Frauds

There have been no instances of fraud reported by the Auditors including the Statutory of the Company under Section 143(12) of the Companies Act,2013 and the Rules framed there under either to the Company or to the Central Government

Corporate Social Responsibility

The brief outline of the Corporate Social Responsibility (CSR)Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-4 of this Report in the format prescribed in the Companies(Corporate Social Responsibility Policy)Rules, 2014.The policy is available on the website of the Company. (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 (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time forms part of this report. In terms of Section 136 of the Companies Act, 2013 the same is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members 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''s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure - 5 and forms part of this Report.

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

The Nomination and Remuneration Committee has laid down criteria for performance evaluation of Directors, Chairperson, Board Level Committees and the Board as a whole and also the evaluation process for the same. The Nomination and Remuneration Committee has reviewed the performance evaluation of the Directors, Chairperson, Nomination and Remuneration Committee, Audit Committee and Stakeholders Relationship Committee and the Board as a whole.

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

Protection of Women at Work Place

The Company has formulated a policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31st March, 2018, the Company has not received any complaints pertaining to Sexual Harassment.

Acknowledgements

Your Directors place on record their sincere appreciation and thanks for the valuable cooperation and support received from the employees of the Company at all levels, Company''s Bankers, Financial Institutions, Central and State Government Authorities, Associates, JV partners, clients, consultants, sub-contractors, suppliers and Members of the 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, 2018

Source : Dion Global Solutions Limited
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