Directors' Report Dear Members, Your Directors are pleased to present the 55th Annual Report and the Audited Financial Statements for the Financial Year ended March 31, 2015. OPERATIONS AND BUSINESS PERFORMANCE Consolidated During the year under review Company's total income from operations increased by 14.84 % i.e. to Rs. 4674.14 cr as compared to Rs 4070.10 cr previous year and Profit after Tax increased by 8.09 % i.e. to Rs. 278.28 cr against previous year PAT of Rs 257.45 Cr. Standalone During the year under review Company's total income from operations increased by 15.41% i.e. 4662.14 cr as compared to Rs. 4039.74 cr previous year. Net profit after tax also increased by 12.20% i.e. to Rs. 277.30 cr as compared to Rs. 247.14 cr previous year. DIVIDEND Your Directors have recommended equity dividend of Rs. 5.50 per paid-up equity share of face value Rs. 10/- each (i.e. @55%) for the financial year 2014-15, subject to the approval of the Members in the ensuing Annual General Meeting. The total dividend payable works out to Rs. 66 crore (excluding dividend distribution tax of Rs. 13.44 crores). The dividend payout has been recommended considering the deployment of Company's internal accruals for growth plans. MOU PERFORMANCE NBCC is signing MOU with the Ministry of Urban Development since 1992-93. The performance of NBCC has been rated "EXCELLENT" by the Department of Public Enterprises for all the years except 2012-13, in which we rated "Very Good". NBCC signed Memorandum of Understanding (MoU) for the FY 2014-15 with MoUD and the following targets had been laid down for the financial year 2014-15. ORDER BOOK At the beginning of the financial year 2014-15 opening work order in hand was Rs.15427.36 crore and New orders of Rs.7012.96 crore were procured and work of Rs. 4259.14 crore was executed, thus balance work order of Rs. 18181.18 crore remained at the close of the financial year 2014-15. PUBLIC WORK ORGANISATION Your Company has been notified as a Public Work Organisation (PWO) construction agency covered under revised Rule 126(2) of GFRs by virtue of which government department(s), PSUs and autonomous bodies award works on nomination basis. ISO CERTIFICATION Your Company is a certified ISO 9001:2008 in the field of Project Management & Consultancy. CORPORATE COMMUNICATION Corporate Communication (CC) Division accomplished number of activities during the period and major of these included: Extensive news coverage/interviews in print & electronic media by way of releasing Press Releases Organizing Interviews, Press Meets; Holding Press/Media Visits to our important projects in Real Estate & Redevelopment and other sectors. The division also organized footage shooting at NBCC's important project locations by various TV channels which were also aired by respective channels as a news stories/ features etc. The division brought out Coffee Table Book on Real Estate, Corporate Diary, event based publications, Corporate Brochures, Real Estate Brochures, Annual Report, Hoardings etc. and organized various Corporate Campaigns. Website contents writing; Service mementos procurement & distribution to employees; Membership with different Professional Bodies/Clubs for NBCC's business interests; NBCC Foundation Day celebration for employees; Celebration on NBCC's attaining Navratna Status; Participation at IITF Exhibition-2014 at Pragati Maidan, New Delhi; MoUDs participation at Pravasi Bhartiya Diwas, 2015 and Vibrant Gujarat Summit, 2015 at Gandhi Nagar, Gujarat were other activities also undertaken by the division. AWARD AND ACCOLADES During Financial Year 2014-15, in recognition of its performance and initiatives, NBCC received various awards, some of which are : • Dalal Street PSU Award 2015 - “Best Wealth Creator Amongst Listed PSEs Award” • The Swachh Bharat Ratna Award – 2015 • CIDC Vishwakarma Awards 2015 • The Best Stall Award at UCCI Expo -2015 • India Public Sector Enterprises Award • Construction World Global Awards 2014 • Real Estate Awards 2014 • SCOPE Felicitation for attaining Navratna Status • Dun & Bradstreet Infra Awards 2014 • Golden Peacock Award 2014 for Excellence in Corporate Governance • Golden Global Achievers Award 2014 • NAREDCO National Real Estate Awards 2014 • Arch of Excellence Award 2014 FIXED DEPOSITS During the year under review, your Company has not accepted any deposit and no principal or interest was outstanding as on March 31, 2015. LOAN, GUARANTEES AND INVESTMENTS Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements forming part of this Annual Report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES During the year under review, the wholly owned subsidiary of NBCC was incorporated namely "NBCC Services Ltd" with an objective to provide post construction maintenance services to clients. The Company is also in process to form a joint venture company with the Government of Rajasthan. A report on the performance of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is forming part of the consolidated financial statement. Further, a statement containing the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended to the financial statement. In accordance to section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of the subsidiary are available on our website www.nbccindia.gov.in . These documents will be available for inspection during business hours at our registered office at Delhi. The policy for determining material subsidiaries is available on company's website at the link <http://nbccindia.gov.in/> nbccindia/nroot/njsp/Policies.jsp HUMAN RESOURCE The company takes pride of its highly motivated and competent human resource which has been instrumental in taking the company to its present heights. Directive issued by the Govt. of India from time to time for filling up of vacancies for SC/ST/OBC/Ex-servicemen have been followed in the Corporation. Government instructions regarding reservation, relaxations, concessions & benefits as provided under Persons with disabilities (Equal Opportunities, Protection of Rights & full participations) Act. 1995 have been complied with. No. of regular employees /NMR/PRW/WE Employees at the close of the year. i) No. of regular employees : 2047 ii) No. of NMR : 1 iii) No. of WE/PRW : 0 HUMAN RESOURCE DEVELOPMENT Company adopted 'Fast Track Promotion Policy' to accelerate the growth of high performers of the Corporation and to sustain the moral of junior & middle level executives. Every year on 1st January, promotion list is issued. Against DPC, every year 1st October, promotion orders are issued. Employees are motivated to work in remote areas and in difficult conditions by providing additional financial as well as non financial benefits and facilities. Further Human Resource potential is maximized through training . Training To enhance the knowledge of employees in their respective fields to enable them to make better use of their expertise and creative potentiality in an appropriate manner to achieve Organizational goal, HRD Division of the Corporation conducts in-house training program/ lecture etc. depending upon Corporations needs with the help of outside experts and also nominates officials for external training program/ workshop/ lecture etc. conducted by various institutions/ training agencies etc. Employees trained on various subject during the year 2014-15 is given here under:- In-House Training: Training programs/ Workshops/Presentations/ Lectures etc. on the various topics such as Project Management in Construction Industry, Risk Management, High Rise Building Planning, Construction & Maintenance, Arbitration, Sustainable Building & Construction - A GRIHA Approach, M. S. Project, Orienting Personal Goals with Organizational Goals & Series of Residential Orientation Program for engineers from DPM to JE level, Service Tax for Finance Officials and series of workshops / programs on awareness / prevention of sexual harassment to the women at work place, Hindi Karyashala etc. were organized for officials. 893 officials were trained during the In-house Training Program and total training Mandays achieved for Group A & B officials = 2333 Nos. Training Division had also conducted In-house Multi up-skilling Program for Non-Executive Employees on Pan India basis and achieved 113 mandays. External Training: 168 Officials were nominated for various external training programs/ courses such as; General Management, Construction Management, Financial Management, Safety Management, Personnel Management, Vigilance Mechanism, Contract Management, HRM etc. organized by various reputed training institutions. 378 ( nos.) training mandays were achieved during FY 2014-15. INDUSTRIAL RELATIONS Harmonious industrial relations were maintained during the year resulting in no loss of mandays on account of strike or labour unrest. POLICY AGAINST SEXUAL AND WORKPLACE HARASSMENT The Company believes in providing opportunity and key positions to women professionals. It has been the Endeavour of the Group to encourage women professionals by creating proper policies to tackle issues relating to safe and proper working conditions for them and create and maintain a healthy and conducive work environment free of discrimination. During the year under review there were no case filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal ) Act, 2013. OFFICIAL LANGUAGE The Company has been implementing the provisions of Government's Official Language Policy. Employees are encouraged to use Hindi in their daily working. During the year 2014-15, quarterly meetings of Official Language Implementation Committee (OLIC) were held regularly to review the progressive use of official language Hindi in the Company and several workshops were organized to promote the official use of Hindi-use of Hindi Unicode,Hindi noting, letter writing etc in which number of participants from Corporate Office, RBG, SBG and Zonal Offices participated. Hindi Protsahan Mas was observed from 01 September to 30 September, 2014 in which various activities were organised and many employees took active part in it. Hindi Diwas and Hindi Sangoshthi were also organised by the Company. For the year 2014-15, Quarterly Hindi Vyavhar Pratiyogita (Use of Hindi in day to day official work) has been organised in which various participants took part and prizes were given to them. Hindi Inspections were conducted by the Rajbhasha Cell in the various Divisions at Corporate Office and Regional Business Groups (RBG)/Strategic Business Groups (SBG) /Zonal Offices to oversee use of official language Hindi in day to day working. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Management Discussion and Analysis Report as per section 49 of the Listing Agreement with the Stock Exchanges in India , forms part of this Annual Report as Annexure - I. DIRECTORS' RESPONSIBILITY STATEMENT Your Directors confirm that : a) in the preparation of annual accounts for the financial year ended March 31, 2015 , the applicable Accounting Standards have been followed ; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the profit of the Company for the period ended on that date ; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and such internal controls are adequate and are operating effectively and; f) the Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. CORPORATE GOVERNANCE REPORT The Company is committed to maintain the highest standards in Corporate Governance so as to ensure highest level of transparency to meet the stakeholders 's expectations. The Company complies with the revised clause 49 of the listing agreement and guidelines issued by DPE on Corporate Governance. The Corporate Governance Report for the year ended March 31, 2015 forms part of this report as Annexure- II. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES Particulars of contracts/ arrangements/ transactions referred to in section 188(1) of the Companies Act, 2013 in prescribed Form AOC-2 as enclosed to this Report as Annexure -III. During the year under review, the company had not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transaction. The policy on materiality of related party transactions as approved by the Board is available on the Company's website at the link <http://nbccindia.gov.in/nbccindia/nroot/njsp/Policies.jsp> CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR) & SUSTAINABILITY DEVELOPMENT The Company has Corporate Social Responsibility Committee which has formulated and recommended to the Board CSR Policy (CSR Policy) which can be accessed on the Company's website at the link <http://nbccindia.gov.in/nbccindia/> nroot/njsp/Policies.jsp The Company also have a Sustainability Policy to affirm its commitment in contributing towards a clean and sustainable environment and make it an integral part of the construction as well as business operations of the Company with a view to preserve the mother earth and environment and give our customers, stake holders, society at large and future generations good quality of life and a better place to live. The committee has also recommended the CSR activities in compliance to Schedule VII to the Act. The Annual Report on CSR activities forms part to this Annual Report as Annexure-IV. COMPLIANCE OF DPE GUIDELINES AND POLICIES The guidelines and policies issued by Department of Public Enterprises from time to time are duly complied with by the Company. MSME IMPLEMENTATION In line with the Public Procurement Policy for MSME's notified by Ministry of Small & Medium Enterprises, Govt. of India, during the current year procured about Rs. 8.90 lakh of goods from micro and small enterprises which is around 33% of total value of direct purchases for office consumption for its own use out of which, a sum of Rs. 3.84 lakhs remain unpaid to the suppliers at the end of the accounting year. RISK MANAGEMENT The Company has adopted Risk Management Policy to manage and monitor the principal risks and uncertainties that may affect the functioning of the Company. The Company's risk management policy is available on the website at the link. <http://nbccindia.gov.in/nbccindia/nroot/njsp/Policies.jsp> INTERNAL FINANCIAL CONTROL The Company has in place adequate internal financial controls for ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention of frauds, accuracy of accounting records and timely preparation of reliable financial disclosures. VIGILANCE ACTIVITIES The vigilance department is the nodal section for handling all vigilance matters of the NBCC. It believes that with best practices, adequate controls and transparency in place, decisions taken will be professionally, efficiently, effectively and consistently, leading to the corporate excellence. The Vigilance Division of Corporation is under the charge of Chief Vigilance Officer (of the rank of Joint Secretary). Complaints received from within the Corporation, Members of public, Central Bureau of Investigation, Central Vigilance Commission, Clients and Ministry of Urban Development are investigated in the Vigilance Division. After investigation of complaints, where lapses/ irregularities are established, the disciplinary proceedings are initiated against the delinquent employees. Further, with an ultimate aim of eradicating corruption in the Corporation, a four pronged strategy is followed which has also been appropriately incorporated in the Annual Action Plan relating to anti-corruption measures: • Preventive Vigilance • Detective Vigilance and Surveillance • Punitive Vigilance • Use of IT innovations to curb malpractices and ensure transparency. Vigilance Awareness Week was observed in NBCC from 27.10.2014 to 01.11.2014 as per the directives of CVC. VIGIL MECHANISM In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and clause 49 of the Listing Agreement a vigil mechanism for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation to the Companies Code of conduct has been established which includes the duly adopted Whistle Blower Policy uploaded on Company's website at the link. <http://nbccindia.gov.in/nbccindia/nroot/njsp/Policies.jsp> AUDITORS AND AUDITOR'S REPORT Statutory Auditors M/s Jagdish Chand & Co., Chartered Accountants, was appointed as Statutory Auditors for the financial year 2014-15 by the Comptroller & Auditor General of India (C&AG). The notes on financial statement referred in the Auditor's Report are self explanatory and do not call for any further comments. The Auditors'Report is attached and forms part of this Annual Report. Cost Auditors M/s Shome & Banerjee, Cost Accountants were appointed as Cost Auditor of the Company for the financial year 2014-15. Pursuant to the notification issued by the Ministry of Corporate Affairs (MCA) in respect of Cost Accounting Records Rules, 2011 your Company has made statutory compliances in respect of the financial year 2013-14. Secretarial Auditors The company has appointed M/s PC Jain & Company, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report is annexed and forms part of this Annual Report in Annexure-V. COMMENTS OF C&AG The "NIL" comments of Comptroller & Auditor General of India (C&AG) on the financial statements of the Company for the year 2014-15 are attached and forms part of this report. AUDIT COMMITTEE The Company had duly constituted Audit Committee. On the completion of tenure of Independent Directors the Committee was reconstituted with the members viz. Shri Durga Shanker Mishra, Chairman, Smt Jhanja Tripathy and Shri S K Chaudhary as members. The recommendations made by the Audit Committee are accepted by the Board. NUMBER OF MEETING OF BOARD OF DIRECTORS Pursuant to Companies Act, 2013 and the Rules framed there under, 11 Board Meetings were held in the financial year 2014-15. The details of the meeting are at Corporate Governance Report forming part of this Annual Report. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL Shri Durga Shanker Mishra, AS (UD), MoUD has been appointed as Nominee Director w.e.f. August 11, 2014 in place of Shri D Diptivilasa former AS(UD), MoUD. The tenure of five Independent Directors viz.: Shri Brijeshwar Singh, Shri K L Mehrotra, Shri S C Saraf, Prof. V K Gupta and Dr KC Iyer came to an end on December 4, 2014 . The Board places on record its deep appreciation for the valuable contribution made by them during their tenure as Director on the Board of the Company. Shri Rajendra Chaudhari, appointed as Director (Commercial) by the President of India assumed the charge w.e.f. June 10, 2015. Shri Durga Shanker Mishra and Shri Rajendra Chaudhari shall hold office till the Annual General Meeting and are eligible for appointment as Nominee Director and Whole-time Director respectively. The details of Directors seeking re-appointment is provided in the notice forming part of this report. For the performance evaluation of Board and other Directors separate meeting of the Independent Directors is to be held every year and performance evaluation of Independent Directors is done by the Board as a whole excluding the concerned Director. The criteria of evaluation will be decided in the meeting itself. Since the Company is Public Sector Undertaking all the appointment of Directors is made by President of India through Administrative Ministry and the appointment of new Independent Directors is awaited. As soon as the independent directors will join the board , the performance evaluation process will be carried out . The Key Managerial Personnel of the Company for the FY 2014-15 are: Dr. A K Mittal, Chairman-cum Managing Director Shri S K Pal, Director (Finance) Shri S K Chaudhary, Director (Projects) Smt. Deepti Gambhir, Company Secretary TRAINING OF DIRECTORS Company strongly believes in continuous learning. Training and development of Directors on their joining the NBCC is imparted to familiarize them with the functioning of the company. The presentation to the inductee directors are given by the senior managerial personnel about the Company's strategy, operations, organization structure, human resource, technology, risk management etc. They are updated on the development in Corporate Governance norms from various statutory bodies to understand their duties and responsibilities in a better way which helps in their efficient discharging of the same. Besides as a part of the continuous learning participation in seminars and conferences designed for Board level executives by renowned institutes is permissible. The company has a policy on Training of Directors available on its website at the link. <http://nbccindia.gov.in/nbccindia/> nroot/njsp/Policies.jsp EXTRACT OF ANNUAL RETURN Extract of the Annual Return in Form MGT 9 as provided under section 92 of the Companies Act, 2013 is forming part of the Annual Return as Annexure -VI. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO Conservation of Energy The stress is given to minimize the energy consumption in all new building projects in achieving higher Green Rating for Integrated Habitat Assessment (GRIHA) and green building rating by adopting the best available power saving technologies like Solar Panel based in house roof top power generation, switching over from LCDs to LED lightings in all NBCC offices. As most of the projects executed by NBCC are in line with the GRIHA norms, various measures taken for energy conservation involves Preservation of Top Soil; plantation of trees; use of fly ash bricks; rain water harvesting; recycled aggregate concrete for structural application; use of solar energy/ solar water heating; recycle, recharge and reuse of water; sewage treatment and reuse; energy management system; building management system; high performance system-wall, roof and glass; insulated green roof to avoid heat ingress; energy efficient lighting system and lux level is maintained as per ECBC norms; glass used for facade is heat reflective with excellent value; interiors are designed to use maximum day light; STP water is utilized for cooling towers and horticulture etc. Technologies Absorption: Continuous efforts are made towards new technology absorption which involves using modern methods of construction / steel structures etc. to reduce completion period, dependency on labour and improve quality of construction with faster speed. NBCC has taken up awarding projects on design and build (LSTK) basis, so that projects are completed with improved co-ordination and better quality. Many projects have been executed based on the concept of Pre Engineered Projects. Table Top shuttering has been adopted for reducing slabs cycle and thereby making construction faster. SAP based on-line monitoring systems for monitoring of high value/ critical projects to avoid time and cost over run is under development. Foreign exchange earnings and out-go During the period under review there was no foreign exchange earning or out go. RESEARCH & DEVELOPMENT Research and Development (R&D) Policy of NBCC provides a framework for the development of a research culture within NBCC, to improve research performance and to achieve high quality technology outputs. It promotes R&D activities as complimentary to construction activities so as to improve the quality of work and sustainability. Further, it contribute towards creation of wealth and well being of the company. Company's all new projects are conceived/ conceptualized in line with Bureau of Energy Efficiency (BEE) and GRIHA norms. NBCC has also set up a C&D waste recycling plant at the East Kidwai Nagar, redevelopment project, for manufacturing of bricks. Further NBCC has signed Memorandum of Understanding with Indian Institute of Technology Roorkee, for Joint Research & Development Centre at Greater Noida for sustainable Civil Infrastructure wherein mutually agreed research projects will be executed by the faculty of IIT Roorkee, and workshops, conferences and training programmes shall be conducted at the Joint R&D Centre. RIGHT TO INFORMATION Company has appropriate mechanism to provide information to citizens under the provisions of Right to Information (RTI) Act, 2005. SIGNIFICANT AND MATERIAL ORDERS There are no significant and material order passed by the regulator or court or tribunal impacting the going concern status and operations of the company. GENERAL: Directors hereby state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. There was no issue of shares under ESOS to the employees. 2. Neither the Chairman-cum -Managing Director nor the Whole Time Director received any remuneration or commission from the subsidiary company. 3. No material change and commitment affected the financial position of the company occurred after the end of the financial year to which this financial statement relate and upto the date of this report. 4. During the year under consideration no employee was in receipt of remuneration in excess of limits prescribed under the revised provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 5. The company is compliant of the Secretarial Standards issued by the ICSI from time to time. ACKNOWLEDGEMENTS We thank and sincerely acknowledge the co-operation received from the Government of India, particularly the Ministry of Urban Development, Ministry of Finance, Ministry of Home Affairs, Ministry of Defence, Ministry of Commerce, Ministry of External Affairs and various other government agencies. We also acknowledge the unstinct faith and confidence reposed by our shareholders, Financial Institutions etc. in the Company. The Board also appreciates the contribution of contractors, consultants etc in the implementation of various projects of the company. We place on record the last but not the least the efforts and contribution made by employees at all levels to ensure the continuous growth and excellence of the Company. Dr. Anoop Kumar Mittal Chairman-cum-Managing Director (DIN : 05177010) |