1 General Information:
NCC Limited, ("NCCL", / "the Company") was established as a Partnership firm in 1978, which was subsequently converted into a Limited Company in 1990. The shares of the Company were listed on the stock exchanges in India during 1992 pursuant to the Initial Public Offer of equity shares. The registered office of the Company is located at NCC House, Madhapur, Hyderabad - 500 081, Telangana, India. The Company is engaged in the infrastructure sector, primarily in the construction of industrial and commercial buildings, roads, bridges and flyovers, water supply and environment projects, housing, power transmission lines, irrigation and hydrothermal power projects, real estate development, etc.
2 Significant accounting policies:
2.1 Statement of compliance
These financial statements have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules,2015 and companies ( Indian Accounting Standards) Amendment Rules, 2016 as applicable.
Up to the year ended March 31,2016, the Company prepared its financial statements in accordance with the requirements of previous GAAP, which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the first Ind AS financial statements and the date of transition to Ind AS is April 1,2015. Reconciliations and description of the effect of the transition to Ind AS from Indian GAAP is given in Note 47.
2.2 Basis of preparation and presentation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 (''''Act'''') (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on such a basis, except leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as a net realizable value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
2.3 Interest in Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.
When a company undertakes its activities under joint operations, the company as a joint operator recognizes in relation to its interest in a joint operation:
1. its assets, including its share of any assets held jointly,
2. its liabilities, including its share of any liabilities incurred jointly,
3 its revenue from the sale of its share arising from the joint operation,
4. its share of the revenue from the joint operations, and
5. its expenses, including its share of any expenses incurred jointly.
The Company accounts for the assets, liabilities, revenues, and expenses relating to its interest in a joint operation in accordance with the Ind AS applicable to the particular assets, liabilities, revenues, and expenses.
2.4 Revenue Recognition
i) Project Division: Revenue from construction contracts is recognized by reference to the stage of completion of the contract activity. The stage of completion is determined by survey of work performed and / or on completion of a physical proportion of the contract work, as the case may be, and acknowledged by the contracted. Future expected loss, if any, is recognized as and when assessed.
ii) Property Development: Revenue is recognized when the Company enters into an agreement for sale with the buyer and all significant risks and rewards have been transferred to the buyer and there is no uncertainty regarding reliability of the sale consideration.
2.5 Other income:
a) Dividend Income : Dividend income from Investments is recognized when the shareholder''''s right to receive payment has been established.
b) Interest income : Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''''s net carrying amount on initial recognition.
c) Rental income : Rental income from operating leases is generally recognized over the term of the relevant lease.
2.6 Foreign exchange translation and foreign currency transactions:
The functional currency of the Company is the Indian rupee. These financial statements are presented in Indian rupees (rounded off to million).
Foreign currency transactions are accounted at the exchange rates prevailing on the date of transactions. Gains and losses resulting from settlement of such transactions are recognized in the Statement of Profit and Loss.
Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at year end rates. The difference in translation of monetary assets and liabilities and realized gains and losses on foreign exchange transactions are recognized in the Statement of Profit and Loss.
The exchange difference on restatement of long term receivables / payables from / to foreign operations that are considered as net investments in such operation are recognized in the statement of profit or loss in the separate financial statements of the reporting entity or the individual financial statements of the foreign operation, as appropriate.
Foreign branches functional currency is other than reporting currency of its parent and foreign branch financial statements are translated into reporting currency of its parent using the following procedures.
Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the year end. Income and expenses are translated at the monthly average rate at the end of the respective month. All resulting exchange differences are recognized in other comprehensive income till the disposal of the net investment.
2.7 Borrowing Costs:
Borrowing costs include interest and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are included in the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.
2.8 Employee Benefits:
2.8.1 Retirement benefit costs and termination benefits
Payment to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
The Company''''s contribution to Superannuation fund is considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
Contribution to Provident fund made to Regional Provident Fund Commissioner are recognized as expense.
For defined post employment benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
2.8.2 Compensated Absences
The employees are entitled to accumulate leave subject to certain limits, for future encashment and a ailment, as per the policy of the Company.
The liability towards such unutilized leave as at the end of each balance sheet date is determined based on independent actuarial valuation and recognized in the Statement of Profit and Loss.
In respect of employees of overseas branch, end of service benefit is accrued in accordance with the terms of employment. Employees entitlements to annual leave and gratuity are recognized on actual basis and charged to the Statement of Profit and Loss.
Income tax expense represents sum of the tax currently payable and deferred tax
2.9.1 Current Tax: Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws that have been enacted or substantively enacted by the end of the reporting period.
2.9.2 Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities are not recognized if the temporary differences arise from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognized if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
2.9.3 Current and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.
2.10 Property, plant and equipment:
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of Property, plant and equipment comprises of purchase price, applicable duties and taxes, any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets, up to the date the asset is ready for its intended use."The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is required to be included in the cost of the respective item of property plant and equipment" and "Cost of major inspections is recognized in the carrying amount of property, plant and equipment as a replacement, if recognition criteria are satisfied and any remaining carrying amount of the cost of previous inspection is derecognized
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognized in profit or loss.
2.11 Depreciation and Amortization:
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost less its estimated residual value.
Depreciation on Property, Plant and equipment has been provided on the straight line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of construction accessories (6 years), in whose case the life of the assets has been assessed based on technical assessment, taking into account the nature of asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, maintenance, etc.
Depreciation on Property, Plant and equipment in joint venture operations provided on Straight Line Method/Written Down Value Method based on useful life prescribed in Schedule II of the Companies Act, 2013.
Intangible Assets are amortized, on straight line method based on the useful life as assessed by the Management. The amortization period and the amortization method for an intangible asset is reviewed at least at each financial year end.
2.12 Investment property: Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with the Ind AS16''''s requirement for cost model.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no further economic benefits expected from disposal. Any gain or loss arising on derecognition of the property is included in profit or loss in the period in which the property is derecognized.
2.13 Intangible Assets:
Identifiable intangible assets are recognized when the Company controls the asset, it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured. At initial recognition, the separately acquired intangible assets are recognized at cost. Following initial recognition, the intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. The estimated useful life and amortization method reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
2.14 Inventories: Raw Materials:
Raw Materials, construction materials and stores & spares are valued at weighted average cost or under. Cost includes all charges in bringing the materials to the place of usage, excluding refundable duties and taxes.
Work in Progress:
Work-in-Progress is valued at the contracted rates less profit margin / estimates.
Properties Under Development:
Properties under development are valued at cost or under. Cost comprises all direct development expenditure, administrative expenses and borrowing costs.
2.15 Investments in Subsidiaries, Associates and Joint ventures: On initial recognition, these investments are recognized at fair value plus any directly attributable transaction cost. Subsequently, they are measured at cost.
2.16 Provisions, Contingent Liabilities and Contingent Assets :
The Company recognizes provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. A disclosure for Contingent liabilities is made in the notes on accounts when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Contingent assets are disclosed in the financial statements when flow of economic benefit is probable.
2.17 Financial instruments:
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
2.18 Financial assets
Financial asset is
1. Cash / Equity Instrument of another Entity,
2. Contractual right to -
a) receive Cash / another Financial Asset from another Entity, or
b) exchange Financial Assets or Financial Liabilities with another Entity under conditions that are potentially favorable to the Entity.
2.19 Subsequent measurement of the financial assets
(i) Financial assets carried at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Further, in case where the company has made an irrevocable selection based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(iii) Financial assets at fair value through profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
(iv) The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit or loss.
2.20 Financial liabilities
Financial liability is Contractual Obligation to
a) deliver Cash or another Financial Asset to another Entity, or
b) exchange Financial Assets or Financial Liabilities with another Entity under conditions that are potentially unfavorable to the Entity.
2.21 Subsequent measurement of the financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate the fair value due to the short maturity of these instruments.
2.22 Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Company''''s balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
2.23 Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may or may not be realized.
2.24 Impairment of Assets:
Intangible assets and property, plant and equipment: Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
2.25 Fair value measurement
The Company measures certain financial instruments at fair value at each reporting date. Fair value is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
a. In the principal market for the asset or liability, or
b. In the absence of principal market, in the most advantageous market for the asset or liability.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimizing the use of unobservable inputs.
2.26 Leases :
The Company''''s leasing arrangements are mainly in respect of operating leases for premises and construction equipment. The leasing arrangements range from 11 months to 10 years generally and are usually cancellable / renewable by mutual consent on agreed terms. Lease payments under operating leases are recognized as an expense on a straight line basis in the statement of profit and loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.
2.27 Earnings Per Share :
Basic earnings per equity share is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average number of the equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.
2.28 Cash Flow Statement:
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
2.29 Critical judgments in applying accounting policies:
The following are the critical judgments, apart from those involving estimations, that the directors have made in the process of applying the Company''''s accounting policies and that have the most significant effect on the amounts recognized in the financial statement.
(i) Revenue recognition: The company uses the stage of completion method using survey method and /or on completion of physical proportion of the contract work to measure progress towards completion in respect of construction contracts. This method is followed when reasonably dependable estimates of costs applicable to various elements of the contract can be made. Key factors that are reviewed in estimating the future costs to complete include estimates of future labor costs and productivity efficiencies. Because the financial reporting of these contracts depends on estimates that are assessed continually during the term of these contracts, recognized revenue and profit are subject to revisions as the contract progresses to completion. When estimates indicate that a loss will be incurred, the loss is provided for in the period in which the loss becomes probable.
(ii) Key sources of estimation uncertainty: The following are the key assumptions concerning the future , and other key sources of estimation uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.
2.30 Exceptional Items:
Exceptional Items represents the nature of transactions which are not in recurring nature during the ordinary course of business but lead to increase / decrease in profit / loss for the year.
2.31 Operating cycle:
The Company adopts operating cycle based on the project period and accordingly all project related assets and liabilities are classified into current and noncurrent. Other than project related assets and liabilities, 12 months period is considered as normal operating cycle.
2.32 New standards and interpretations not yet adopted
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''''Statement of cash flows'''' and Ind AS 102, ''''Share-based payment.'''' These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ''''Statement of cash flows'''' and IFRS 2, ''''Share-based payment,'''' respectively. The amendments are applicable to the group from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The Company is currently evaluating the requirements of the amendment and has not yet determined the impact on the financial statements.
4.3 Of these 212,318,091 (31.03.2016: 212,318,091 and 01.04.2015: 212,318,091) equity shares have been pledged with State Bank of India, Nil (31.03.2016: 58,240,000 and 01.04.2015: 79,040,000) equity shares have been pledged to Standard Chartered Securities (India) Limited and Nil (31.03.2016: 88,495,576 and 01.04.2015: Nil ) equity shares have been pledged to Gayatri Energy Ventures Private Limited.
4.4 Of these 61,500,000 (31.03.2016: 61,500,000 and 01.04.2015: 61,500,000) equity shares have been pledged with State Bank of India.
4.5 Of these Nil (31.03.2016: Nil and 01.04.2015: 3,849,368) and equity shares have been pledged with IDBI Trustee Ship Services Limited for the Redeemable Non convertible debentures issued by OB Infrastructure Limited.
4.6 Of these Nil ( 31.03.2016: 224,600 and 01.04.2015: 224,600) equity shares have been pledged to the consortium of bankers for the term loan availed by Western UP Tollway Limited.
4.7 Of these Nil (31.03.2016: Nil and 01.04.2015: 40,800) equity shares have been pledged to the consortium of bankers for the term loan availed by Bangalore Elevated Tollway Limited.
4.8 Of these Nil (31.03.2016 : 564,833 and 01.04.2015: 564,833) equity shares have been pledged to IDBI Trustee Ship Services Limited and Nil ( 31.03.2016: 137,831 and 01.04.2015: 137,831) equity shares have been pledged to Axis Bank for the term loan availed by Pondichery Tindivanam Tollway Limited.
4.9 Of these 2652 (31.03.2016 : 2,652 and 01.04.2015: 2,652) equity shares have been pledged with Axis Bank and 748 (31.03.2016 :748 and 01.04.2015: 748) equity shares have been pledged with IDBI Trustee Ship Services Limited for the term loan availed by Himachal Sorang Power Limited. The Company in the year 2012 -13, has entered into securities purchase agreement for disposal of these shares, subject to compliance with the various conditions mentioned in the agreement.
4.10 During the year the Company has sold its investment in these entities and the relationship is ceased with effect from below dates:
a) Western UP Tollway Limited - May 11, 2016
b) Pondichery Tindivanam Tollway Limited - September 1, 2016
c) Savitra Agri Industrial Park Private Limited (formerly known as NCC Power projects Sompeta Private Limited)
- November 30, 2016
d) Bangalore Elevated Tollway Limited - October 18, 2016
10.1 The credit period towards trade receivables generally ranges between 30 to 180 days.
10.2 In determining the allowance for trade receivables the company has used practical expedients based on financial condition of the customer, ageing of the customer receivables and overdoes, availability of collaterals and historical experience of collections from customers. The concentration of risk with respect to trade receivables is reasonably low as most of the customers are Government organizations though there may be normal delays in collections.
10.3 Movement in the allowance for doubtful receivables
10.4 Trade receivables includes retention money not fallen due of Rs, 1 1,857.17 million (31.03.2016: Rs, 11,218.23 million and 01.04.2015: Rs, 9,250.03 million).
16.5 Rights of the share holders
The equity shares of the company having par value of Rs, 2 per share, rank pari passu in all respects including voting rights (except GDRs) and entitlement to dividend. Repayment of the capital in the event of winding up of the Company will inter alia be subject to the provisions of Companies Act 2013, the Articles of Association of the Company and as may be determined by the Company in General Meeting prior to such winding up.
16.6 501,831 (31.03.2016:7,57,810 and 01.04.2015:18,700) equity shares represent the shares underlying outstanding GDRs. Each GDR represent one underlying equity share having par value of Rs, 2. The GDRs, rank pari passu in all respects with the equity shares issued by the Company, except in respect of voting rights.
17.2. a Securities premium represents the amount received in excess of the face value of the equity shares. The utilization of the securities premium reserve is governed by the Section 52 of the Act.
17.5. a The general reserve is used from time to time to transfer profits from retained earnings for appropriation purposes. As the general reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
17.6. a Retained earnings represents the Company''''s undistributed earnings after taxes.
17.6. b In respect of the year ended March 31, 2017, the directors propose that a dividend of Rs, 0.40 per share be paid on fully paid equity shares. This equity dividend is subject to approval by the shareholders at the Annual General Meeting and has not been included as a liability in these financial statements. The proposed equity dividend is payable to all holders of fully paid equity shares. The total estimated equity dividend to be paid is Rs, 222.37 million including dividend distribution tax of Rs, 45.27 million.
17.7. a It represents the actuarial gain/(loss) recognized on the defined benefit plan and will not be reclassified to retained earnings.
17.7. b It represents the exchange differences accumulated when the foreign operations financial statements are converted from their functional currency to presentation currency of the Company.
* Current maturities are included in Note 23 - Other Financial Liabilities
18.1 9.50 % Redeemable Non-Convertible Debentures
(i) Debentures numbering to 500 having face value of Rs, 4 million each comprising of four (4) Detachable and Separately Transferable Redeemable principal parts ("STRPPS") of face value of Rs, 1 million each aggregating to Rs, 2,000 million privately placed with ICICI Bank Limited.
(ii) These Debentures are to be redeemed at par in four equated installments commencing at the end of second year from the date of allotment i.e. August 11, 2012 onwards.
(iii) During the year 2015-16 the final installment has been repaid.
18.2 Term Loans from Banks
(i) Term loans from Andhra Bank, State Bank of Hyderabad, State Bank of India, Syndicate Bank, Indian Overseas Bank, Canara Bank and Standard Chartered Bank outstanding balance as at March 31, 2017 Rs, 319.45 million (31.03.2016: Rs, 1,512.00 million and 01.04.2015: Rs, 2,572.00 million)are secured, in terms of the sanction letter, by:
- first parri-passu charge on the properties owned by NCC Limited, NCC Urban Infrastructure Limited, Dhatri Developers and Properties Private Limited and the subsidiaries of NCC Urban Infrastructure Limited
- pledge of shares of NCC Urban Infrastructure Limited held by NCC Limited.
- personal guarantees of Sri AAV Ranga Raju, Sri AGK Raju, Sri ASN Raju, Sri AVN Raju, Sri AKHS Rama Raju, Sri NR Alluri and Sri JV Ranga Raju.
These loans are repayable in 8 quarterly installments (with a moratorium of 24 months) commencing from September 30, 2016 to June 30,2018 and carry interest rate of 13.50% per annum with monthly rests. Certain portion of loans have been prepaid during the year.
(ii) HDFC Bank
- Secured by hypothecation of specific assets purchased out of the loan, comprising Plant and Machinery
(iii) Axis Bank Limited
- Secured by hypothecation of specific assets purchased out of the loan
18.4 Vehicle Loans
Vehicle loans are secured by hypothecation of the vehicles financed through the loan arrangements. Such loans are repayable in equal monthly installments over a period of 3 to 5 years and carry interest rate ranging between 7.43 % to 11.93 % per annum.