C & C Constructions Ltd
Chairman Speech
Dear Shareholders,
Greetings from C&C Constructions Ltd.
Over the last few years, the infrastructure sector has been passing through a very
unstable phase inter to bad phase of economy where problems from all aspects have
multiplied and our Company is no exception.
The Banks were very conservative and cautious while extending financing facilities. For
companies already in debt stress, a turnaround or improvement in this situation is
extremely challenging and calls for an urgent re-look of current scenario in the interest
of stakeholders.
Project progress remains tardy. Major projects are hit due to liquidity issues. This
has shaken the confidence of the industry players.
Due to all this and primarily due to constrained banking facilities, currently we are
working at around 60% of our expected execution capacity.
Your Company is currently focused on and concentrating its efforts to control and
reduce the elongated working capital cycle and bring about the profitable growth on the
back of the robust order book and encouraging the potentials of the Indian economy and the
infrastructure sector.
The Indian economy has demonstrated a high order of resilience and remains an island of
stability amidst global volatility. Meanwhile, setting its sights on the future, the
Government has initiated a number of structural reforms whose positive outcomes should be
tangible in long term growth.
The global scenario is being colored by protectionist policies in various hues adopted
by a few developed countries. While such populist measures tend to impede trade and
discourage revival of the investment cycle, it is up to international industry to address
these challenges by reconfiguring its offerings and recasting its operations.
I believe that the medium to long term prospects in India are favorable and that the
structural reform process will continue over the next few years, culminating in an uptick
in the investment momentum.
The Government's increased emphasis on infrastructure development through a number of
flagship programmes has been widely welcomed. Infrastructure spends have a multiplier
effect, enabling pan-industry growth, while contributing to an enhanced quality of life.
Your Company
is uniquely positioned to respond to these initiatives of the Government. Our
capabilities in turnkey execution of large scale infrastructure are virtually unmatched,
and we look forward to the speedy transition of these publicly- announced proposals into
implementation mode.
India has the second largest road network across the world at 5.4 million km. This road
network transports more than 60 per cent of all goods in the country and 85 per cent of
India's total passenger traffic. Road transportation has gradually increased over the
years with the improvement in connectivity between cities, towns and villages in the
country.
The construction of highways reached 122,432 km during FY2017-18 which was constructed
at an average of 28 km per day. Total length of roads constructed under Prime Minister's
Gram Sadak Yojana (PMGSY) was 47,447 km in 2017-18. The Government of India is targeting
construction of highways at an average of 40 km. per day, offering a great opportunity for
the industry.
One of the major strength of your Company is its unflinching focus on timely and
quality execution of projects. Having executed many projects in India and overseas over
the years, it has established a reputation of a dependable contractor of top choice among
its growing list of customers. The Company cautiously bids for the new projects with a
greater focus on projects with shorter duration, client credentials, funding and
profitability, leveraging its versatility and diverse multisector skills and expertise, it
has created a strong business model of diversified projects in multiple sectors,
insulating itself from down cycle in any one sector or location.
At C & C, we recruit the bright young minds from across the Country and their
knowledge and skills are refined by imparting practical training as well as on job and on
site training. In addition, the Company has extensively trained the unskilled labor and
enhanced their skills and earnings. The Company accords utmost importance to R & D to
facilitate innovation in development of products and processes for enhanced operational
efficiencies in construction, which immensely benefits the Company, its clients and the
society at large.
The Government is focusing on speeding up the Country's infrastructure development by
raising public investment in areas such as roads, railways, ports, mass and affordable
housing, urban infrastructure, rural electrification and infrastructure, water &
sewerage and power transmission. The Government of India has recognised the need to fill
the gap in urban housing. With announcements of various housing schemes like ‘housing
for all by 2020, ‘Pradhan Mantri Awas Yojana, housing industry of India is one of the
fastest growing sectors. With so much in store, the sector is on threshold of seeing
tremendous opportunities for the years to come in foreseeable future.
Year under review
Your Company's turnover on a standalone basis stood at INR 943.29 crore for the
financial year ended on 31st March, 2018 as compared to the turnover of INR 948.62 crore
for the previous financial year ended on 31st March, 2017. The Company posted a
Net Profit of INR 41.50 for the period under review as against the Net Profit of INR 36.21
crore for the previous year. The order book in hand of the Company as on March 31,2018 was
INR.3,235 crore.
Further, on the request of the Company to address banking overdues issues, the State
Bank of India (SBI) vide its letter no. SAMB/CL IV/373 dated 14th June, 2018,
has agreed towards full and final settlement of all the dues of the Company to the Bank
for a total sum of INR .280.00 Crores, payable in stages over next one year.
As a process of de-risking the Company, we continue to focus on international market as
well, whereby 40% of the current order book is from overseas business. Going forward, the
Company also intends to work on similar lines only.
Way Forward
The government, through a series of initiatives, is working on policies to attract
significant investor interest. The Indian government plans to develop a total of 66,117 km
of roads under different programmes such as National Highways Development Project (NHDP),
Special Accelerated Road Development Programme in North East (SARDP-NE) and Left Wing
Extremism (LWE). The government has identified development of 2,000 km of coastal roads to
improve the connectivity between ports and remote villages.
The National Highways Authority of India (NHAI) plans to build 50,000 km of roads worth
US$ 250 billion by 2022 as part of a long-term goal of doubling the length of the national
highway network to 200,000 km.
The Government of India will spend around INR 1 lakh crore (US$ 15.26 billion) during
FY 18-20 to build roads in the country under Pradhan Mantri Gram Sadak Yojana (PMGSY).
The Government of India has decided to invest INR 7 trillion (US$ 107.82 billion) for
construction of new roads and highways over the next five years.
The Government is committed to introducing structural reforms to revive the investment
cycle, boosting tax revenues through widening of the tax base, strengthening indigenous
manufacturing and bringing about infrastructure development in rural and urban areas.
Implementation of GST is expected to have far reaching effects by inducting large parts of
the informal economy into the formal system. Ultimately leading to increased tax revenues.
Introduction of GST is considered progressive and a step in the right direction. Your
Company does not see any adverse impact due to GST implementation.
The domestic economy is expected to steadily improve in the current year on the back of
structural reforms and supportive monetary policy. The Government has reiterated its
emphasis on infrastructure build-out in the areas of transportation, augmentation of water
resources, power, affordable housing and smart cities. Increased private sector
participation in the Defence business affords strong business opportunities for your
Company. Various upcoming projects provide the Company with a broad perspective of the
opportunity basket opening.
The Government has kick-started major road projects and has committed significant
budgetary allocations for roads and highways development. The Company expects this impetus
to gain aided by increased investments in specialized bridges and tunnels.
We are streamlining our business processes, reinforcing our project management skills,
trimming our structure costs, disposing our non-core assets, improving our operational
efficiencies and working capital cycle.
Efforts of the Company will be towards capacity building of various stakeholders
including employees and contractors for effective delivery. Going forward, we want to be a
very lean and thin organization and want to utilize our resources in an optimum manner.
Before I conclude, I would like to acknowledge the contributions made by team C & C
and thank our customers, vendors and other stakeholders who made it possible for the
Company to maintain its growth momentum and improve financial performance. I also take
this opportunity to thank steadfast support and the confidence they have reposed in our
pursuit of delivering high quality, sustainable growth.
Thank you,
Gurjeet Singh Johar
Chairman
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C & C Constructions Ltd
Directors Reports
Dear Shareholders,
The Board of Directors hereby submit the 22nd annual report along with the
audited financial statements of your Company for the financial year ended 31st
March, 2018.
STATEMENT OF COMPANY AFFAIRS FINANCIAL RESULTS
Your Company's financial performance during the financial year 2017-2018 is summarized
below:-
|
2017-18 |
2016-17 |
| Revenue from Operations |
943.29 |
948.62 |
| Total Income |
950.20 |
994.02 |
| Profit before exceptional items |
-34.32 |
48.56 |
| Exceptional items |
76.00 |
-0.72 |
| Profit after exceptional items but before Tax |
41.68 |
47.84 |
| Tax Expenses |
0.18 |
11.62 |
| Profit after Tax |
41.50 |
36.22 |
| Total Comprehensive Income for the year |
41.50 |
36.44 |
| Earnings per share (face value of ' 10/- each) (EPS) |
|
|
| - Basic |
16.31 |
14.23 |
| - Diluted |
16.31 |
14.23 |
TRANSFER TO RESERVES
The Company has not transferred any amount to reserves of the Company
DIVIDEND
In view of the accumulated losses the Board regrets its inability to declare any
dividend for the financial year ended 31st March, 2018.
OPERATIONAL PERFORMANCE
The total income of the Company on a Standalone basis stood at INR 950.20 crores for
the financial year ended on 31st March, 2018 as compared to the total income of
INR 994.02 crores for the previous financial year ended on 31st March, 2017.
The Company posted a Net Profit of INR 41.50 crores for the financial year under review as
against the Net Profit of INR 36.22 crores for the previous financial year ended on 31st
March, 2017 .
The past year has continued to be challenging for the Company. The progress with regard
to construction has been slow. This is on account of lingering issues related to global
and domestic slowdown, problems with land acquisition, environmental clearances, and also
the stressed financial position of the Company.
Corporate Debt Restructuring (CDR) has been scrapped since Feb 12, 2018. Though we are
working towards steering the Company out of cash flow stress, restrained banking
facilities and issues related thereto, order intake remains sluggish, since many of the
stalled projects are yet to be kick-started. Projects already awarded are generally
progressing slow 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, selective settlement of past debts with its bankers,
cost optimization, monetization of SPV assets and carefully bidding for new jobs offering
good margins and better synergy apart from focusing on streamlining the internal
organization and processes with emphasis on leveraging the Company's existing core
competencies.
The company has undergone debt restructuring in the year 2013 under the framework of
Corporate Debt Restructuring (CDR) of Reserve Bank of India which has since been scrapped
by RBI in February 2018. The liquidity position of the Company is bound to turn around in
view of steps undertaken by the Government and the Company. The Company is optimistic to
regularize its banking facilities soon.
MATERIAL CHANGES AND COMMITMENTS
On the request of the Company, the State Bank of India (SBI) has agreed towards full
and final settlement of all the dues of the Company to the Bank for a total sum of INR
280.00 Crores, payable in stages over next one year.
Further, C & C Myanmar Road Constructions Company Ltd. was incorporated as 100%
Subsidiary of the Company as per the laws of Myanmar on 21.09.2017.
The BLPL-C & C, JV has been awarded a project by Govt. of Bihar for execution of
Restoration and Lining work of Sone western Link canal for the contract price of INR
145,12,56,613.00 (Rupees One Hundred forty five crores twelve lakhs fifty six thousands
six hundred thirteen only) on EPC Mode. The share of C & C in this JV is 72.50%.
FRAUDS REPORTED BY THE AUDITORS, IF ANY
There are no frauds reported by the Auditors under sub-section (12) of Section 143 of
the Companies Act, 2013, other than those which are reportable to the Central Government
and no fraud has been reported to the Central Government.
SUBSIDIARIES, JOINT VENTURES, ASSOCIATE COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Company has seven 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 Ind AS 110 on Consolidated Financial Statements read with Ind AS
28 for Investments in associates and in Joint ventures, the audited Consolidated Financial
Statements for financial year ended 31st March, 2018 form part of the Annual
Report and Financial Statements.
Pursuant to Proviso to Section 129(3) of the Act, a statement as per Form AOC-1,
containing the salient features and brief details of performance and financials of the
Subsidiary, Associate Companies and Joint Venture, for the financial year ended 31st
March, 2018 is attached to Financial Statements of the Company.
The contribution of the Subsidiaries to overall performance of the Company are as
under:
| Subsidiary |
C&C share profit consider in Balance sheet |
| C&C Projects Ltd. |
-12365843 |
| C&C - Tower Ltd. |
-77544406 |
| C&C - Tolls Ltd. |
0 |
| C&C - Western UP Expressway Ltd. |
-50860625 |
| C&C Realtors Ltd. |
-103600 |
| C&C - Oman LLC |
29397457 |
| C&C Myanmar Road Constructions Ltd. |
0 |
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 Company's
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 financial year ended 31st
March, 2018 is included in the Financial Statement.
SHARE CAPITAL
No changes have occurred in the Share Capital Structure of the Company during the
period under review.
DIRECTORS AND KEY MANGERIAL PERSONNEL
Pursuant to provisions of Section 152 of the companies Act, 2013 Mr. Rajbir Singh (DIN
00186632) retire by rotation at the ensuing Annual General Meeting and being eligible,
offers himself 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 resume of Director proposed to be re-appointed and other relevant information
have been furnished in the Notice convening the Annual General Meeting. Appropriate
resolution for his re-appointment is proposed for approval of the members at the Annual
General Meeting.
Further during the period under review Gen. N.C. Vij, independent director had resigned
from the directorship of the Company w.e.f. 05.04.2018.
The Board places on record its appreciation for the valuable guidance and services
rendered by him during his association with the Company.
Further, the Company has to appoint two Independent Directors and one Woman independent
director 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.
The Company is making necessary efforts to fill the vacancies.
MEETINGS OF THE BOARD
The Board of directors duly met five (5) times during the period under review, the
details of which are given in Corporate Governance Report annexed to this report.
The details of the familiarization Programmes for Independent Directors are hosted on
Company's 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 are 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 Ind AS 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 financial year ;
(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;
(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
BOARD EVALUATION
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 were evaluated as per the Guidance Note issued by SEBI
and also 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 Company's 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. The Independent Directors have also reviewed the quality, quantity and
timelines 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 21st Annual General Meeting held on September 18, 2017, M/s Bedi
Saxena & Co., Chartered Accountants (FRN: 000776C), was appointed as statutory
auditors of the Company to hold office till the conclusion of 26th AGM to be
held in the year 2022.
The Notes on Accounts referred to in the Auditors' Report are self explanatory and
therefore do not call for any further comments.
SECRETARIAL AUDITOR
M/s. Santosh Kumar Pradhan, Practicing Company Secretaries (C.P No.: 7647), was
appointed to conduct the secretarial audit of the Company for the financial year ended 31st
March, 2018, 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 Board's 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.
Further, as per observation in the report, the Company is in search of Woman Director,
requisite no. of Independent Directors and CFO and hope these persons will be appointed
very shortly.
COST AUDITOR
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 financial year 2017-18.
DEPOSITS
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 Board's 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 Company's 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 EXCHAMGE EARNING AND OUTGO
The Company's 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 expenditures and earnings in foreign currency are as under:
Expenditures in foreign currency including CIF value of Imports = Rs.1,11,82,060/-
Earnings in foreign currency including Export Turnover =Rs.373,90,82,062/-
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) Regulation, 2015, forms a part
of the annual report.
CORPORATE GOVERNANCE
In pursuance of Regulation 34 and Schedule V of SEBI (Listing Obligations and
Disclosure Requirements) Regulation, 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 Companies Act, 2013, 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 as per section 198 of the Companies Act, 2013, 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 2017-18.
PARTICULARS OF EMPLOYEESS
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, forms part of the Board's report as Annexure 3.
PARTICULARS OF LOANS, INVESTMENTS AND GURANTEES
The details of Loans, guarantees and investments covered under Section 186 of the
Companies Act, 2013 are available and form part of the Notes to the financial statements.
RELATED PARTY TRANSACTIONS
As per the provisions of the Companies Act, 2013 and Regulation 23 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 RPT Policy is also available at Company's
website at the link http://www.candcinfrastructure.com/images/
policies/Related%20partv%20transaction%20policv.pdf. There has been no change in the
Related Party policy of the Company.
All Related Party Transactions entered by the Company during the financial year under
review were in ordinary course of business and on Arm's length basis.
RISK MANAGEMENT
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
Company's 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 Company's website at
the link http:// www.candcinfrastructure.com/images/policies/
Whistle%20Blower%20Policy.pdf.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
The Company has, during the period under review, transferred a sum of ' 1,20,070/- 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 2009-10.
CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has constituted a Internal Complaints Committee under the Sexual Harassment
of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 for redressing the
complaints of Women.
ACKNOWLEDGEMENTS
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 |
| Date: 14.08.2018 |
Gurjeet Singh Johar |
| Place: Gurugram |
Chairman |
|
DIN: 00070530 |
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