FUTURE NCC Directors Report

To the Members,


The Directors take pleasure in presenting the 27th Annual Report together with the Audited Statement of Accounts for the Financial Year ended March 31, 2017.


Standalone Financial Results (As per Ind AS)


Rs, in million






















































































2016-17



2015-16



Revenue from Operations



78920.73



83251.55



Other Income



1400.76



2239.85



Total Income



80321.49



85491.40



Profit before Interest, Depreciation, Exceptional Items and Tax



8252.52



9616.29



Less: Finance Costs



3956.99



5088.58



Profit before Depreciation, Exceptional Items and Tax



4295.53



4527.71



Less: Depreciation and Amortization Expense



1120.63



1099.59



Profit before Exceptional Items & Tax



3174.90



3428.12



Exceptional Items (Net)



(503.37)



(203.23)



Profit Before Tax



2671.53



3224.89



Provision for Tax (Including earlier Year Taxation)



416.52



823.20



Profit After Tax



2255.01



2401.69



Other comprehensive income/(loss) for the year



(38.85)



(21.14)



Total comprehensive income for the year



2216.16



2380.55



Paid up Capital



1111.86



1111.86



Operational performance


A. Standalone


You will be glad to note that notwithstanding the difficult phase through which the Indian Construction Industry is passing your Company posted a turnover of Rs, 80321.49 million (inclusive of other income) for the year ended 31st March, 2017 as against Rs, 85491.40 million (inclusive of other income) in FY-2015-16. Your Company earned Gross Profit of Rs, 8252.52 million for the year 2016-17 as against Rs, 9616.29 million in FY-2015-16. After deducting financial charges of Rs, 3956.99 million, providing a sum of Rs, 1120.63 million towards depreciation and Rs, 416.52 million for income tax, the operations resulted in a net profit of Rs, 2255.01million as against Rs, 2401.69 million in FY-2015-16.


B. Consolidated


During the year under review, your Company achieved a consolidated turnover of Rs, 92,044.73 million (inclusive of other income) as against Rs, 96,595.06 million (inclusive of other income) in the previous fiscal. Your Company has earned a consolidated gross profit of Rs, 8736.21 Million before interest and depreciation as against Rs, 11289.77 million in the previous year. The operations resulted in a net profit attributable to share holders of Company of Rs, 316.84 million as against Rs, 1203.25 million in the previous year.


The demonetization announced by the Union Government in November, 2016 and the consequent slow down in the economy in the second half of the Financial Year have resulted in decrease in the turnover posted and the net profit earned by the Company as compared with the previous year. Your Board is optimistic that the Company will post improved performance in the coming years.


During the year the Company, on consolidated basis, bagged new orders valued around Rs, 92258 million and executed projects worth Rs, 87922 million. The Order Book position as on March 31, 2017 stood at Rs, 180885 million.


Proposed Dividend


Keeping in view the tight liquidity situation the Construction and Infrastructure Industry is passing through and the need to conserve and optimize the use of resources, your Board recommends Dividend of Rs, 0.40 per Equity Share of Rs, 2/- each (20%) for the consideration and approval of the members of the Company at the forthcoming Annual General Meeting.


Further information on the 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 that were entered into 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;


(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; and


(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/Associate Companies:


The Company has 52 subsidiaries (including step down subsidiaries) as of March 31, 2017. There was no material change in the nature of the business carried on by the subsidiaries.


As per the provisions of Section 129 of the Companies Act, 2013 read with 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, 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 the provisions of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 as amended from time to time the Financial Statements for the F.Y 2016-17 have been prepared in compliance with the 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 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, 2017, which forms part of the Annual Report.


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 Foreign exchange earnings - Nil Foreign exchange outgo


i. Towards travel '''' 2.88 million


ii. Towards import of capital goods & material supplies '''' 192.62 million


iii. Others '''' 9.80 million


D. 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 / furnished / made during the Financial Year ended 31st March, 2017 are given in Annexure - 1


Particulars of Directors


In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Sri N R Alluri (DIN-00026723), Director and Sri J V Ranga Raju, (DIN-00020547) 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 year under review Sri P. Abraham, Independent Director has resigned from the Board due to pre-occupation. Your Board places on record the valuable services rendered by Sri P.Abraham during his tenure as a Director of the Company.


During the year under review Dr A S Durga Prasad and Sri S Ravi joined the Board of NCC as Independent Directors pursuant to the approval accorded by the Members at the previous AGM held on August 24, 2016.


Other than as stated above, there has been no other change in the Directors or the Key Managerial Personnel during the year under review.


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, Sri A V N Raju, Wholetime Director(s), Sri N.R. Alluri, Director, Sri R S Raju, Associate Director (F&A) and Sri M V Srinivasa Murthy, Company Secretary & EVP (L) are Key Managerial Personnel of the Company in accordance with the provisions of Section(s) 2(51), 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.


The Board of Directors at its meeting held on February 9, 2017 subject to the approval of the Members of the Company at the ensuing Annual General Meeting considered and approved the reappointment of Sri A A V Ranga Raju, Managing Director, Sri A G K Raju, Executive Director, and Sri J V Ranga Raju, Whole time Director of the Company for a further period of Five (5) Years commencing from 01.04.2017 to 31.03.2022 and remuneration payable to them.


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) of the Companies Act 2013 is hosted on the Company''''s website and the we blink thereto is (http://ncclimited. com/Policies.html).


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. Nomination and Remuneration Committee has reviewed the performance evaluation of 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 Statutory


Committees are given in the report on Corporate Governance, which forms part of this Annual Report.


Meetings of Board of Directors


The Board Calendar is prepared and circulated in advance to the Directors. During the Financial Year under review, the Board has met six times i.e. on May 02, 2016, May 24, 2016, August 12,


2016, August 24, 2016, November 09, 2016 and February 09, 2017. The details with respect to Committee Meetings and attendance thereat as required under the Secretarial Standard-1 issued by the Institute of Company Secretaries of India have been provided in the Corporate Governance Report forming part of the Annual Report.


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


Constitution and Composition of Audit Committee


The Company has constituted the Audit Committee under the Chairmanship of Sri R V Shastri an Independent Director and Dr.A S Durga Prasad, Sri Hemant M Nerurkar, Smt. Renu Challu, Independent Directors and Sri Amit Dixit, Non-executive Director as other Members of the Committee.


During the year under review Sri. P.Abraham ceased to be a member of the Committee following his resignation from the Board 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 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.


Extract of Annual Return


The extract of the Annual Return of the Company in Form MGT- 9 for the Financial Year ended 31st March, 2017 is given in Annexure -2 and forms part of the Directors Report.


Joint Statutory Auditors and their report


The term of the existing Joint Statutory Auditors of the Company viz., M/s. M Bhaskara Rao & Co., Chartered Accountants, (Firm Registration No.000459S) and M/s. Deloitte Haskins and Sells, Chartered Accountants (Firm Registration No. 008072S) will conclude at the end of 27th Annual General Meeting being held on 24th August, 2017. Subject to the approval of the members of the Company at the forth coming Annual General Meeting, the Board of Directors of the Company on the recommendation of the Audit Committee of the Board proposed to appoint M/s.S R Batliboi & Associates LLP, Chartered Accountants (Firm Registration No 101049W/E300004) as the Statutory Auditors of the Company for a term of five years i.e. from the conclusion of the ensuing Annual General Meeting up to the conclusion of the 32nd Annual General Meeting of the Company to be held in the Year 2022 on such terms of remuneration as may be mutually discussed and agreed between the Statutory Auditors and the Board / Members of the Company. The appointment of the said Statutory Auditors for the F.Y 2018-19 to FY-2021-22 if approved by the members of the Company at the forthcoming AGM is subject to their ratification at the Annual General Meetings to be held for FY-2017-18 to 2020-21. The Company has received from the proposed Statutory Auditors the necessary declarations / disclosures u/s139, 141 of the Companies Act, 2013 read with the rules framed there under and also a confirmation that their firm has been subjected to Peer Review Process of the Institute of Chartered Accountants of India and holds a valid certificate issued by the Peer Review Board of the ICAI.


The Independent Auditors'''' Report to the Members of the Company on the Stand Alone Financial Statements for the Financial Year ended March 31, 2017 does not contain any qualification(s) or adverse observations.


The Board places on record its sincere appreciation of the services rendered by M/s. M Bhaskara Rao & Co., Chartered Accountants, and M/s. Deloitte Haskins and Sells, Chartered Accountants during their tenure as the Joint Statutory Auditors of the Company.


Secretarial Audit Report


In compliance with 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 2016-17. The Secretarial Audit Report for the Financial Year ended 31st March, 2017 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, 2017 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 24, 2016 had appointed M/s. Vajralingam & Co., Cost Accountants (Firm Registration No.101059) as Cost Auditors of the


Company for the FY 2016-17. 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 2016-17.


Corporate Governance


Pursuant to the provisions of 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, a Business Responsibility Report is attached and forms part of the Annual Report.


Transfer of Un-Claimed Dividend to the Investor Education and Protection Fund.


Your Company has during the year under review transferred the Unclaimed Dividend (final) pertaining to the Financial Year to the Investor Education and Protection Fund in compliance with the provisions of Section 125 of the Companies Act, 2013


Reporting of Frauds


There have been no instances of fraud reported by the Statutory Auditors 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 CSR Policy is available on the website of the Company. (http://ncclimited.com/Policies.html)


Particulars of Employees


The statement containing the names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this Report. Further, the Report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company and is also hosted on the website of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.


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.


Policy on Sexual Harassment


The Company has adopted 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, 2017, 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: 23rd May, 2017

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