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The Board of Directors hereby submits the 20th annual report along with the audited financial statements of your Company for the period ended 31st March, 2016. In order to comply with the provisions of Section 2(41) of the Companies Act, 2013, the Company has ended its financial year 2015-16 in 9 months on 31st March, 2016 and the Company will follow the April to March financial year afterwards.
STATEMENT OF COMPANY AFFAIRS
Your Companys financial performance during the financial year 2015-2016 is summarized below:-
|(Rs in Crore)|
|2015-16 (9 Months)||2014-15|
|Profit before interest, depreciation and taxation||138.42||51.90|
|Profit/(loss) before depreciation and taxation||17.53||(110.87)|
|Net Profit/ (loss) before taxation||(22.89)||(183.07)|
|Profit/(loss) brought forward from last year||(305.18)||(115.24)|
|Profit available for appropriations||(324.47)||(305.19)|
|Dividend on Equity shares||0.00||0.00|
|Corporate dividend tax||0.00||0.00|
|Balance carried to balance sheet||(331.68)||(305.19)|
TRANSFER TO RESERVES
The Company has not transferred any amount to reserve of the Company.
In view of the loss incurred during the period the Board regrets its inability to declare any dividend for the period ended 31st March, 2016.
The Turnover of the Company on a Standalone basis stood at Rs 767.33 crore for the 9 months ended on 31st March, 2016 as compared to the Turnover of Rs 1013.43 crore for the previous year of 12 months. The Company posted a Net Loss of Rs 19.29 crore for the period under review as against a Net Loss of Rs 189.95 crore for the previous year.
The past year has continued to be challenging for the Company. The progress with regard to award and construction has been slow. This is on account of lingering issues related to a global and domestic slowdown, problems with land acquisition, environmental clearances, and also the stressed financial position of the Company.
The Company is under Corporate Debt Restructuring. Though we are working towards steering the Company out of the framework of CDR, order intake remains sluggish, since many of the stalled projects are yet to be kick-started. Projects already awarded are generally progressing slowly due to various continuing problems on ground, which remain unresolved over a period of time leading to cost escalations which remain unpaid. All these factors combined, have led to a vicious cycle culminating in a pile up of debt and high consequential costs.
To overcome the challenging business environment, the Company is rigorously undertaking the steps to realization of claims, cost optimization, monetization assets and carefully bidding for new jobs apart from focusing on streamlining the internal organization and processes with emphasis on leveraging the Companys existing core competencies. Though the company has undergone debt restructuring in the year 2013 under the framework of Corporate Debt Restructuring (CDR) of Reserve Bank of India, the liquidity position of the Company is bound to turn around in view of steps undertaken and the Company is optimistic to regularize its banking accounts.
Your Company has secured the following new orders in its own name and the in Joint Ventures with other entities during the year ended on 31st March, 2016:
Design, Construction installation and commissioning of Civil Works for package-1 of Phase-II, Engineer 3 Project, in Sultanate of Oman. From Engineering Projects (India) Ltd.
Contract value Rs 920 crore
Supply and service contract for Tower Package-P620-TW01: Towers including Earthwire, OPGW, hardware, and Accessories for Conductor & Earth wire for 400 Kv D/C (Quad) Jigmeling- Alipuduar Line (Indian portion-NER) (Approx 126 km) under Transmission System Strengthening in Indian System for transfer of power from Mangdechhu Hydroelectric project in Bhutan from Power Grid Corporation of India Ltd.
Contract value Rs 204 crore
The total balance value of works on hand as on March 31, 2016 is Rs 2798 crore.
SUBSIDIARIES, JOINT VENTURES, ASSOCIATE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company has six Subsidiaries and two Associate companies within the meaning of Section 2(87) and 2(6) of the Companies Act, 2013 respectively. There has been no material change in nature of business of the Subsidiaries and Associates.
In accordance with the Accounting Standard AS-21 on Consolidated Financial Statements read with Accounting Standard AS-23 on Accounting for Investments in associates and Accounting Standard (AS) 27 on Financial Reporting of Interest in Joint ventures, the audited Consolidated Financial Statements for period ended 31st March, 2016 form part of the Annual Report and Financial Statements.
Pursuant to Proviso to Section 129(3) of the Act, a statement containing the salient features and brief details of performance and financials of the Subsidiary, Associate Companies and Joint Venture, for the period ended 31st March, 2016 is attached to Financial Statements of the Company. The statement contains the contribution of the associates and joint ventures to overall performance of the Company.
The contribution of the Subsidiaries to overall performance of the Company is as under:
|(Amt in Rs)|
|Subsidiary||Share of Profit Considered in Profit and Loss account of C&C|
|C and C Projects Ltd.||(15,015,326.00)|
|C&C Towers Ltd.||(42,805.00)|
|C&C Tolls Ltd.||(35,182.00)|
|C&C Western UP Expressway Ltd.||(25,274.00)|
|C&C Realters Ltd.||(80,036.00)|
|C&C Oman LLC.||48,854,600.30|
The Board has adopted a policy for determining material subsidiaries of the Company, as per the provisions of corporate governance regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The said policy is hosted at the Companys website at the link http:// www.candcinfrastructure.com/images/policies/Policv%20 on%20Material%20Subsidiaries.pdf
CASH FLOW ANALYSIS
In conformity with the provisions of the SEBI (Listing Obligations and Disclosure requirements) Regulation, 2015, the cash flow statement for the period ended 31st March, 2016 is included in the Financial Statement.
No changes have been occurred in the Share Capital Structure of the Company during the period under review.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the period under the review, Mr. Joganando Ganguly (DIN: 00054686) and Mr. Kanwal Monga (DIN: 00153473), Independent Directors of the Company ceased to be directors of the Company with effect from 20th August, 2015 and 28th August, 2015 respectively. The Board places on record its appreciation for the valuable guidance and services rendered by them during their association with the Company.
Pursuant to provisions of Section 152 of the companies Act, 2013 Mr. Sanjay Gupta (DIN 00221247) and Mr. Rajendra Mohan Aggarwal (DIN 00064423) retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.
Pursuant to provisions of Section 149 of the Act, all the Independent Directors of the Company gave declarations to the Company that they meet the criteria of independence as specified under Section 149(6) of the Act and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Brief resumes of Directors proposed to be re-appointed and other relevant information have been furnished in the Notice convening the Annual General Meeting. Appropriate resolutions for their re-appointment are proposed for approval of the members at the Annual General Meeting.
Further during the period under review Mr. Rajeev Dhingra has been appointed as Chief Financial Officer (CFO) of the Company with effect from 16th September, 2015 and subsequently resigned from the post of Chief Financial Officer of the Company w.e.f 8th June, 2016.
Mr. Anand Bordia, Independent Director of the Company resigned from the directorship of the Company with effect from 23rd July, 2016.
The Company has to appoint Four Independent Directors in order to comply with the provisions regarding Composition of Board of Directors under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Further the Company also has to appoint Chief Financial Officer in pursuance of provisions of Section 203 of the Companies Act, 2013.
MEETINGS OF THE BOARD
As the period under review was of nine months, the Board of directors met Three (3) times during the period, the details of which are given in the Corporate Governance Report annexed to this report.
The details of the familiarization Programmes for Independent Directors are hosted on Companys website at the link http:// www.candcinfrastructure.com/images/termsofAppoinment/ Familiarisation%20Programme.pdf.
COMMITTEES OF THE BOARD
Currently, the Board has six Committees viz., Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility (CSR) Committee, Risk Management Committee and Finance Committee. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report section of the Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Act, the Board of Directors hereby state that:
(a) in preparation of annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the directors had 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 and loss of the Company for that period;
(c) the directors had 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 directors had prepared the annual accounts on a going concern basis; and
(e) the directors 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) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Company has an adequate system of internal control to ensure that the resources of the Company are used efficiently and effectively. The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company
Pursuant to provisions of Companies Act, 2013 and Provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee laid down the criteria for performance evaluation of the Individual Directors, the Board and its Committees.
Accordingly, the performance of the Board, its Committees and individual Directors was evaluated by considering the contribution of the individual directors to the Board and Committee meetings, preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, relationship with fellow board members, willing to devote time and effort to understand the Company and its business etc.
Details of Companys policy on Directors appointment and remuneration including criteria for determining qualifications etc. have been given under Corporate Governance Section.
As per Schedule IV of the Act, Independent Directors of the Company at a separate meeting, evaluated the performance of non-independent directors, the Board as a whole and the Chairman of the Company taking into account the views of executive and non-executive directors. Independent Directors also reviewed the quality, quantity and timeliness of flow of information between management of the Company and the Board, for the effective performance of the board.
AUDITORS AND AUDITORS REPORT STATUTORY AUDITORS
At the 18th Annual General Meeting held on December 23, 2014, M/s ASG & Associates, Chartered Accountants (FRN: 000389N), New Delhi, were re-appointed as statutory auditors of the Company to hold office till the conclusion of the 21st Annual General Meeting to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s ASG & Associates, Chartered Accountants (FrN: 000389N), as statutory auditors of the Company, is placed for ratification by the shareholders for the financial year 2016-17 in the ensuing Annual General Meeting of the Company.
The Company has received a letter from the Statutory Auditors that their appointment, if made, would be within the limits prescribed under the provisions of the Companies Act, 2013 and that they are not disqualified.
The Notes on Accounts referred to in the Auditors Report are self explanatory and therefore do not call for any further comments.
M/s. Santosh Kumar Pradhan, Practicing Company Secretaries (C.P. No.: 7647), was appointed to conduct the secretarial audit of the Company for the period ended 31st March, 2016, as required under Section 204 of the Companies Act, 2013 and Rules thereunder.
The secretarial audit report i.e. MR-3 forms part of the Annual Report as Annexure 1 to the Boards report. On the observations made in the Secretarial Audit Report, the proper steps are being taken by the Management so as to comply with the provisions.
As per provisions of Section 148 of the Act read with Rules made there under, M/s. Pradeep Sud & Co., Practicing Cost
Accountants (FRN. 100626) had been appointed as Cost Auditor for the purpose of auditing the Cost accounting records maintained by the Company for the year 2015-16 vide resolution dated 14th November, 2015.
During the year, the Company did not accept any public deposits.
EXTRACT OF ANNUAL RETURN
An extract of the annual return in the prescribed format is appended as Annexure 2 to the Boards report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS
There are no significant and material orders passed by the regulators or tribunals impacting the going concern status and Companys operations in future.
No cases were filed pursuant to the Sexual Harassment of Women at work Place (Prevention, Prohibition and Redressal) Act, 2013, during the period under review.
CONSERVATION OF ENERGY, TECHNOLOGY, ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO
The Companys core activity is civil construction, which is not energy intensive. However, your Company takes every effort to conserve the usage of power at its sites and offices.
There is no information to be furnished regarding Technology Absorption as your Company has not undertaken any research and development activity in any manufacturing activity nor any specific technology is obtained from any external sources which needs to be absorbed or adapted.
The particulars of expenditure and earnings in foreign currency are furnished in item Nos. 34 and 36 to Notes to Financial Statements.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A separate report on the Management discussion and analysis, pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015, forms a part of the annual report.
In pursuance of Regulation 34 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 Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under the said regulation also forms a part of the annual report.
CORPORATE SOCIAL RESPONSIBILITY
As per the provisions of Section 135 of the Act, the Company has constituted the CSR committee to formulate, implement and monitor the CSR Policy of the Company. However as the Company does not have average net profits for the three immediately preceding financial years, the Section 135(5) of the Act pertaining to spending of 2% of average net profits of the Company for immediately preceding three financial years and disclosure required to be given under Section 135(5) of the Act and Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014, are not applicable, to the Company, for the financial year 2015-16.
PARTICULARS OF EMPLOYEES
A statement containing the information required under Section 197(12) of the Companies Act, 2013, and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended vide notification dated 30th June, 2016 forms part of the Boards report as Annexure 3.
PARTICULARS OF LOANS, INVESTMENTS AND GURANTEES
Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the Notes to the financial statements provided in this Annual Report.
RELATED PARTY TRANSACTIONS
As per the provisions of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing obligations and Disclosure requirement) Regulation, 2015, the Company has formulated a policy on Related Party Transactions to ensure the transparency in transactions between the Company and related parties. The said RTP Policy is also available at Companys website at the link http://www.candcinfrastructure.com/images/ policies/Related%20party%20transaction%20policy.pdf. There been no change in the Related Party policy of the Company.
All Related Party Transactions entered by the Company during the period under review were in ordinary course of business and on Arms length basis. There was one material related party transaction entered by the Company during year under review details of which are mentioned in Form AOC-2 appended as Annexure 4. The shareholders approval for this transaction was taken at the Annual General Meeting held on December 23, 2015 as required under Section 188 of the Companies Act, 2013.
The Company has established Risk Management process to manage risks with the objective of maximizing shareholders value. The details of various risks that are being faced by the Company are provided in Management Discussion and Analysis Report, which forms part of this Report.
WHISTLE BLOWER POLICY
The Company has adopted a whistle blower policy containing the mechanism as required under Section 177(9) of the Act and Regulation 22 of the SEBI (Listing obligations and Disclosure requirement) Regulation, 2015 for directors and employees to report the genuine concerns about unethical behaviour, actual or suspected fraud, or violation of the Companys code of conduct and ethics. Protected disclosures can be made by the employees of the Company and can also have access to the Chairman of Audit Committee.
The Whistle Blower Policy adopted by the Board has been hosted on Companys website at the link http:// www.candcinfrastructure.com/images/policies/Whistle%20 Blower%20Policy.pdf.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The Company has, during the period under review, transferred a sum of Rs 1,32,707/- to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013. The said amount represents the unpaid/ unclaimed dividend for the financial year 2007-08.
Your Directors take this opportunity to place on record their appreciation towards bankers, clients and all the business associates for their continuous support to the Company and to the shareholders for the confidence reposed in the Company management and look forward for the same in greater measure in the coming years. The Directors also convey their appreciation to the employees at all levels for their enormous personal efforts as well as collective contribution.
By order of the Board
For C&C Constructions Limited
Gurjeet Singh Johar