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National Buildings Construction Corporation Ltd. Notes to Accounts, National Buildings Construction Corporation Ltd. Company
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Notes to Accounts of National Buildings Construction Corporation Ltd.

Mar 31, 2015

Note 1

The Company has only one class of equity shares and the shareholders of the company are entitled to receive dividends as and when declared by the company and enjoy proportionate voting rights in case any resolution is put to vote. Further, the shareholders have all such rights, as may be available to a shareholder of a listed public company, under the Companies Act, the terms of the listing agreements executed with the Stock Exchanges, and Memorandum of Association and Articles of Association of the Company.

Note 2

The company has adopted Accounting Standard-15 on Employee Benefits as under:

Gratuity

The company has a defined contribution gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity on superannuation, resignation, termination, disablement or on death. The scheme is funded by the company and is managed by a separate trust formed during the financial year 2007-08. The liability for the same is recognised on the basis of actuarial valuation and accordingly transferred to Gratuity Trust. The contribution for the year 2014-15 is Rs. 328.22 Lacs { Prevous Year Rs. 757.70 Lacs }.

Leave Encashment

The company has a defined benefit plan for Earned Leave Encashment. Provision for Encashment of Earned Leave equivalent to maximum of 300 days (basic pay plus dearness allowance) is provided at the year end and charged to Statement of Profit & Loss. The liability for the year 2014-15 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Earned Leave Encashment as on 31.03.2015 is Rs.3904.60 lacs { Prevous Year Rs. 5301.34 Lacs }.

The company has a defined benefit plan for Half Pay Leave Encashment. The encashment of half pay leave on superannuation will be allowed in addition to encashment of earned leave subject to overall limit of 300 days. The cash equivalent payable for half pay leave would be equal to leave salary as admissible for half pay plus DA and to make up the shortfall in earned leave. No commutation of half pay leave shall be allowed for this purpose. The liability for the year 2014-15 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Half Pay Leave Encashment as on 31.03.2015 is Rs.924.06 lacs { Prevous Year Rs.531.97 Lacs }.

Travelling Allowance on Superannuation

The cumulative liability for Travelling Allowance to be paid to the employees on superannuation (exit) as on 31.03.2015 is Rs.41.16 lacs { Prevous Year Rs.40.50 Lacs } based on actuarial valuation.

Pension

The company has implemented pension scheme through NBCC Employees Defined Contribution Superannuation Pension trust under IDA pattern for those employees who have completed 15 years of service in the CPSE and on the regular rolls of the company as on 26.11.2008. The scheme is managed by a seperate Trust formed in the year 2012-13 for the purpose. The contribution for pension amounting to Rs. 711.06 lacs { Prevous Year Rs.696.59 Lacs } has been paid during the year 2014-15.

C) Acturial assumptions :-

The principal assumptions are the discount rate of 8.5% and salary growth rate of 5.5%. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities & the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis.

NOte 3 ( Rs. in Lakhs)

Contingent Liabilities and Commitments For the year ended (To the extent not provided for) on March 31, 2015

(a) contingent liabilities

Claims against the Company not acknowledged as debts. Counter claims of the Corporation against these claims amounting to Rs. 23,756.86 lakhs 29,863.01 (Previous year Rs. 23,706.36 lakhs) not accounted for in books.

Demand in respect of taxes not 619.62 accepted by company

a) Value Added Tax (VAT) 2,032.12 (Company is contesting demand)

b) Service Tax (Company is contesting demand)

c) Income Tax

i) Demand raised by Income 1,968.08 Tax Department but not accepted by the company.

ii) Appeals decided in favour 621.72 of company but department has filed further appeals

Bank Guarantees for performance, 40,713.50 Earnest Money Deposits and Security Deposits

The Govt. guarantee charges on 1,654.93 internal / external borrowings have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD).

Recovery at penal rate on account NOT ASCERTAINABLE of excess consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients.

B) Other Committments Nil

Contingent Liabilities and Commitments For the year ended (To the extent not provided for) on March 31, 2014

(a) contingent liabilities

Claims against the Company not 24,188.14 acknowledged as debts. Counter claims of the Corporation against these claims amounting to Rs. 23,756.86 lakhs (Previous year Rs. 23,706.36 lakhs) not accounted for in books.

Demand in respect of taxes not accepted by company

a) Value Added Tax (VAT) 227.12 (Company is contesting demand)

b) Service Tax (Company is 1,119.73 contesting demand)

c) Income Tax

i) Demand raised by Income 2,967.52 Tax Department but not accepted by the company.

ii) Appeals decided in favour 693.52 of company but department has filed further appeals

Bank Guarantees for performance, 42,885.77 Earnest Money Deposits and Security Deposits

The Govt. guarantee charges on 1,654.93 internal / external borrowings have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD).

Recovery at penal rate on account NOT ASCERTAINABLE of excess consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients.

B) Other Committments Nil

Note 4

As per Accounting Standard-18 on Related Party Disclosures:

List of the related parties-

Subsidiary of the Company Joint Ventures:-

(a) NBCC Services (a) Jamal NBCC International (PTY) Limited Limited (w.e.f. 16.10.2014) (b) nbcc - amc

(c) NBCC - R.K. Millen

(d) NBCC - MHG

(e) NBCC - AB

Key Managerial Personnel:-

(a) Dr. Anoop. K. Mittal, Chairman-cum-Managing Director

(b) Mr.S.K.Pal, Director(Finance)

(c) Mr. S.K. Chaudhary, Director (Projects)

(d) Mrs. Deepti Gambhir (Company Secretary) (with effect from 12.08.2014)

Note 5

In respect of closed units (Domestic or Foreign), the reconciliation of balances of such units is in progress. The effect, if any of such balances on the Profit/ Loss of the Company is not asscertainable.

Note 6

Balances of Trade Receivables/ Trade Payables and Loans & Advances are subject to reconciliation and confirmation.

Note 7

The Company''s significant leasing arrangement are in respect of operating leases relating to its leased office premises. These lease arrangements which are cancelable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No.26.

Note 8

Disclosure as per Accounting Standard - 17 on ''Segment Reporting''

a) Business segments

The Company''s principal business is providing Project Management Consultancy, development of Real Estate and Engineering, Procurement & Construction services.

b) Segment Revenue & Expenses

Revenue & Expenses directly attributable to the segment is considered as ''Segment Revenue'' & ''Segment Expenses''.

Note 9

Negative figures have been shown in brackets.

Note 10

Previous year figures have been regrouped/ recast/ rearranged wherever deemed necessary to conform to current year''s classification.


Mar 31, 2014

Note 1A

The Deptt. of Disinvestment through the Ministry of Urban Development decided 10% disinvestment of government equity in the company. Cabinet Committee on Economic Affairs accorded approval for disinvestment of 10% government shareholding under the book building process. The company issued fully paid bonus shares amounting to Rs. 30 crore to the existing equity shareholders in the ratio of 3:1. Out of total paid up equity capital of Rs.120 crores,an IPO for disinvestment of 10% equity held was by Government of India amounting to Rs. 12 crores comprising of 1.20 crores equity shares of face value of Rs. 10 each. Public issue in a price band of Rs. 90/- to Rs. 106/- per equity share of Rs. 10 each opened for public on 22.3.2012 and the issue closed on 27.3.2012. Overall, the issue was over subscribed by 4.93 times. In the Empowered Group of Ministers'' meeting (EGoM) held on 28.3.2012, the price of equity share ofRs. 10/- each was decided at Rs. 106/- for the purpose of allotment of shares in consultations with the BSE Ltd. (lead Stock Exchange). However, this IPO was for disinvestment of shares held by Government Of India so, Company''s Share Capital is not affected. The Company is now listed on BSE & NSE w.e.f. 12.4.2012.

Note 1C

The Company has only one class of equity shares and the shareholders of the company are entitled to receive dividends as and when declared by the company and enjoy proportionate voting rights in case any resolution is put to vote. Further, the shareholders have all such rights, as may be available to a shareholder of a listed public company, under the Companies Act, the terms of the listing agreements executed with the Stock Exchanges, and Memorandum of Association and Articles of Association of the Company.

Note 1D

Note 1E

During the year 2011-12, 30000000 equity shares of Rs. 10/- each issued as fully paid paid Bonus Shares with rights pari passu with existing equity shares.

The company had adopted Accounting Standard-15 (Revised 2005) Employee Benefits Scheme as under:

Gratuity

The company has a defined contribution gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity on superannuation, resignation, termination, disablement or on death. The scheme is funded by the company and is managed by a separate trust formed during the financial year 2007-08. The liability for the same is recognised on the basis of actuarial valuation and accordingly transferred to Gratuity Trust. The liability for the year 2013-14 isRs.757.70 Lacs.

Leave Encashment

The company has a defined benefit plan for Earned Leave Encashment. Provision for Encashment of Earned Leave equivalent to maximum of 300 days (basic pay plus dearness allowance) is provided at the year end and charged to Statement of Profit & Loss. The liability for the year 2013-14 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Earned Leave Encashment as on 31.03.2014 is Rs.5301.34 lacs.

The company has a defined benefit plan for Half Pay Leave Encashment. The encashment of half pay leave on superannuation will be allowed in addition to encashment of earned leave subject to overall limit of 300 days. The cash equivalent payable for half pay leave would be equal to leave salary as admissible for half pay plus DA and to make up the shortfall in earned leave. No commutation of half pay leave shall be allowed for this purpose. The liability for the year 2013-14 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Half Pay Leave Encashment as on 31.03.2014 is Rs. 531.97 lacs.

Travelling Allowance on Superannuation

The cumulative liability for Travelling Allowance to be paid to the employees on superannuation (exit) as on 31.03.2014 is Rs.40.50 lacs based on actuarial valuation.

Pension

NBCC has implemented pension scheme through NBCC Employees Defined Contribution Superannuation Pension trust under IDA pattern for those employees who have completed 15 years of service in the CPSE and on the regular rolls of the company as on 26.11.2008. The scheme is managed by a seperate Trust formed in the year 2012-13 for the purpose. The contribution for pension amounting to Rs. 696.59 lacs has been paid during the year 2013-14.

Other disclosures as required under AS-15 (Revised) on "Employees Benefits", in respect of defined benefit obligation are as under :

a) Principal Actuarial assumption at the Balance Sheet date (expressed as weighted averages)

C) Acturial assumptions :-

The principal assumptions are the discount rate of 8.5% and salary growth rate of 6%. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities & the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis.

Note 30 ( Rs. in Lakhs)

Contingent Liabilities and Commitments For the year ended For the year ended (To the extent not provided for) on March 31, 2014 on March 31, 2013

(a) CONTINGENT LIABILITIES

Claims against the Company not acknowledged as debts. Counter claims of the Corporation against these claims amounting to Rs. 23706.36 lakhs (Previous year Rs. 12386.89 lakhs) not accounted for in books. 24188.14 17042.34

Demand in respect of taxes not accepted by company 5007.89 4023.21

Bank Guarantees for performance, EMD and Security Deposit 42885.77 37350.99

The Govt. guarantee charges on internal / external borrowings have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD). 1654.93 1654.93

Recovery at penal rate on account of excess consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients. NOT ASCERTAINABLE NOT ASCERTAINABLE

(b) Other Committments Nil Nil

Note 31

As per Accounting Standard-18, the list of the related parties during the period is given below:- Joint Ventures:- (a) Jamal NBCC International (PTY) Limited

(b) NBCC - AMC

(c) NBCC - R.K. Millen

(d) NBCC - MHG

(e) NBCC - AB

(f) CPWD - NBCC JV

(g) NBCC- HUDCO (General) (h) NBCC- HUDCO KAUSHAMBI

Key Managerial Personnel:-

(a) Dr. Anoop.K.Mittal,Chairman-cum-Managing Director

(b) Mr. S.K.Pal, Director(Finance)

(c) Mr. S.K. Chaudhary, Director (Projects) - w.e.f. 13.11.2013

Note 32

In respect of closed units (Domestic or Foreign), the reconciliation of balances of such units is in progress. The effect, if any of such balances on the Profit/ Loss of the Company is not asscertainable.

Note 33

Balances of Trade Receivables/ Trade Payables and Loans & Advances are subject to reconciliation and confirmation.

Note 34

Office premises taken on lease

The Company''s significant leasing arrangement are in respect of operating leases relating to its leased office premises. These lease arrangements which are cancelable, are generally renewable by mutual consent. The aggregate lease rentals paid is disclosed under rent in Note No.26.

Note 38

Minus figures have been shown in brackets.

Note 39

Previous year figures have been regrouped/ recast/ rearranged wherever deemed necessary to conform to current year''s classification.


Mar 31, 2013

Note 1

As per According Standard -18 the disclosures of transactions with the related party as defined in the According standard are given below.

List of related parties with whom transactions have taken place and relationship.

Joint ventures

Jamal NBCC international (PTY) Limited

NBCC-AMC

NBCC - H.K. Millen

NBCC - WHG

NBCC - AB

Key Managerial Personnel Mr,V.P.Das Chairman-cum-Management Director up to 31.03.2013.

Mr.Anoop K.Mittal Chairman-cum-Managing Director w,e,f,01.04.2013

Mr,Anoop K.Mittal Director (projects) up to 31.03.2013

Mr,Ajay K.Garg Director (Finance) up to 18.04.2012

Mr,S.K.Pal Director (Finance) w,e,f, 01.02.2013

Note 2

In respect of closed units (Domestic or Foreign) the reconciliation of balances of such units is in progress The effect if any of such balances on the project/loss of the company is not ascertainable..

Note 3

Balances of Trade Receivables/Trade payable and Loans & Advances are subject to reconciliation and confirmation..

Note 4

Certain modifications changes have been made in accounting procedures policies during the financial year 2012-13 which do not have any financial impact on profit loss of the company..

Note 5

Other premises taken on lased

The company signification leasing arrangement are in respect of operating leases relating to its leased offices premises These lease arrangements which are cancelable are generally renewable by mutual consent The Aggregate lease rentals is disclosed under rent in Note No.28.

Note 6

Minus figures have been shown in brackets

Note 7

Previous year''s figures have been regrouped / recast / rearranged whenever deemed necessary to conform to current year''s classifications.


Mar 31, 2012

The Deptt. of Disinvestment through the Ministry of Urban Development decided 10% disinvestment of government equity in the company. Cabinet Committee on Economic Affairs accorded approval for disinvestment of 10% government shareholding under the book building process. The company issued fully paid bonus shares amounting to Rs. 30 crore to the existing equity shareholders in the ratio of 3:1. Out of total paid up equity capital of Rs.120 crores, an IPO for disinvestment of 10% equity was held by Government of India amounting to Rs. 12 crores comprising of 1.20 crores equity shares of face value of Rs.10 each. Public issue in a price band of Rs. 90/- to Rs. 106/- per equity share of Rs.10 each opened for public on 22.3.2012 and the issue closed on 27.3.2012. Overall, the issue was over subscribed by 4.93 times. In the Empowered Group of Ministers' meeting (EGoM) held on

28.3.2012, the price of equity share of Rs.10/- each was decided at Rs.106/- for the purpose of allotment of shares in consultations with the BSE Ltd. (lead Stock Exchange). However, this IPO was for disinvestment of shares held by Government Of India so, Company's Share Capital is not affected. The Company is now listed on BSE & NSE w.e.f. 12.4.2012.

The statutory dues are deposited regularly with the appropriate authorities as stipulated under the Statutory Act subject to an exception of :-

Undeposited amount of Labour Welfare Cess to the tune of Rs. 1996.27 lakhs disclosed in Note-6 of the Balance Sheet under the head Other Current Liabilities. This includes an amount of Rs.296.22 lacs on account of the difference of the levied rate of cess @ 0.3% and 1% in the case of the respective Law of the states and the rate applicable at the Centre. The Balance undeposited amount of Rs. 1700.05 lacs pertains to labour cess collected from contractors in respect of various states. However the amount will be deposited on receipt of demand from Labour Welfare Cess Board of the concerned states.

Service tax has been deposited by respective Units/Zones on accrual system. In few units/zones,service tax has not been deposited on accrual basis. Quantification of the same could not be ascertained. Amount will be deposited after ascertaining the exact liability.

Gratuity

The company has a defined benefit gratuity plan. Every employee who has rendered continuous service of five years or more is entitled to get gratuity on superannuation, resignation, termination, disablement or on death. The scheme is funded by the company and is managed by a separate trust formed during the financial year 2007-08. The liability for the same is recognized on the basis of actuarial valuation and accordingly transferred to Gratuity Trust. Actuarial valuation of liability for the year 2011-12 is Rs. 828.07 lakhs.

Leave Encashment

Provision for Encashment of Earned Leave equivalent to maximum of 300 days (basic plus dearness allowance) is provided at the year end and charged to profit & loss account. Actuarial valuation of liability as on 31.03.2012 is Rs. 4372.08 lakhs.

Provision for encashment of Half Pay Leave accruing to the employee on or after 01.04.2005 subject to an overall ceiling of 240 days (equal to 120 days on full pay) on superannuation / death is provided and charged to profit & loss account. Actuarial valuation of liability as on 31.03.2012 is Rs.1259.45 lakhs.

Travelling Allowance on Superannuation

The provision for Travelling Allowance to be paid to the employees on superannuation (exit) to the tune of Rs. 36.13 lakhs is provided based on actuarial valuation by taking into account the average cost of Rs. 2851.00 per employee.

Other disclosures as required under AS-15 (Revised) on "Employees Benefits", in respect of defined benefit obligation are as under:

Acturial assumptions:-

The physical assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities & the salary growth rate takes account of inflation, seniority,promotion and other relevant factors on long term basis.

Trade Receivables includes outstanding dues from Govt. / PSUs and other departments in respect of closed projects amounting to Rs. 5858.36 lakhs (previous year Rs. 4045.37 lakhs) which are outstanding for more than three years. Out of this sum, an amount of Rs. 1742.30 lakhs (previous year Rs. 1756.18 lakhs) is pending in arbitration / court proceedings. No provision has been considered against these amounts as the same are considered good for recovery.

(I) Item a, c, d,e,f & g are valued at lower of cost or net realizable value.

Item b. -The expenditure charged to Profit & Loss Account in respect of Real Estate Projects has been worked out on the basis of Standard Costing Method.

(II) Lease / Title Deeds for the following Land and Buildings are pending for execution in the name of Corporation:

Chairman-cum-Managing Director and full time Directors have used company's Car including for private journeys on payment of prescribed charges in accordance with the Government of India, Ministry of Finance BPE's circular No.2(28)/83-BPE(wc) dated 17.11.1983 read with the Government of India, Ministry of Finance BPE's circular No.4/(12)/82- BPE(wc) dated 01.04.1987 and DPE OM No.2(53).90-DEP (wc)-GIV dated 26.03.1999. Since recovery for personal use of car is being made, use of company's car is not considered as a perquisite.

NOTE-1 (Rs. in lakhs)

Contingent Liabilities For the year ended For the year ended 31 March 2012 31 March 2011

Claims against the Corporation not acknowledged as debts. 100,554.37 39,858.38

Counter claims of the Corporation against these claims amounting to Rs.52914.18 lakhs (Previous year Rs. 19986.04 lakhs) not accounted for in books.

Bank Guarantees for performance, EMD and Security Deposit 38,206.58 34,040.66

The Corporation had paid tax in earlier years in Libya on profits 2,696.04 2,482.43 based on accounts audited by local auditors. Additional demand for tax amounting to LD 6716079.430 equivalent to Rs. 2696.04 lakhs (previous year LD 6,716,079.430 equivalent to Rs. 2482.43 lakhs) based on turnover etc., for the years from 1977-78 to 1989-90 raised by the tax department of the said foreign country has not been accepted by the Corporation and not provided for. The Corporation has filed appeal / objections against the above demand under the local tax laws.

The Govt. guarantee charges on internal / external borrowings 1,654.93 1,654.93 have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD).

Recovery at penal rate on account of excess consumption of NOT NOT material over theoretical norms for the materials supplied by the ASCERTAINABLE ASCERTAINABLE clients at issue price and free of cost, pending final settlement with the clients.

NOTE 2

As per Accounting Standard-18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related party as defined in the Accounting Standard are given below:-

List of related parties with whom transactions have taken place and relationship:-

Joint Ventures:-

Jamal NBCC International (PTY) Limited

NBCC-AMC

NBCC - R.K. Millen

NBCC - MHG

NBCC-AB

Key Managerial Personnel:- Mr. Vishnu P. Das, Chairman-cum-Managing Director

Mr.Anoop K.Mittal,Director (Projects) w.e.f. 05.12.2011 Mr. Ajay K. Garg, Director (Finance) upto 18.04.2012

NOTE 3

In respect of closed units be it dometstic or foreign, the reconcilliation of balances of such units is in progress. The effect if any of such balances on the profit/ loss of the corporation is not ascertainable.

NOTE 4

Balances of Trade Receivables/ Trade Payables and Loans ans Advances are subject to reconcilliation and confirmation.

NOTE 5

Minus figures have been shown in brackets

NOTE 6

Previous years figures have been regrouped / recast / rearranged wherever deemed necessary to conform to current year's classifications.


Mar 31, 2008

1. (Rs. in lakhs)

2007-2008 2006-2007

1. CONTINGENT LIABILITIES:

(a) (i) Claims against the Corporation not acknowledged as 66955.24 20693.95 debts. Counter claims of the Corporation against these claims amounting to Rs.20530.10 lakhs (Previous year Rs.12828.55 lakhs) not accounted for in books.

(ii) Bank Guarantees for performance, EMD and Security 10441.22 7011.98 Deposit

(b) (i) The Corporation had paid tax in earlier years in Libya 2276.75 2280.78 on profits based on accounts audited by local auditors. Additional demand for tax amounting to LD 6,716,079.430 equivalent to Rs.2276.75 lakhs (previous year LD 6,716,079.430 equivalent to Rs.2280.78 lakhs) based on turnover etc., for the years from 1977-78 to 1989-90 raised by the tax department of the said foreign country has not been accepted by the Corporation and not provided for. The Corporation has filed appeal / objections against the above demand under the local tax laws.

(ii) The Govt. guarantee charges on internal/external 1654.93 1557.19 borrowings have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD)

(iii) Recovery at penal rate on account of excess NOT ASCERTAINABLE consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients.

(iv) Letters of credit opened but not utilized.

c) Old outstanding dues in respect of works executed in 3673.20 Libya and Iraq have been shown as Contingent Assets

2. Fixed Deposits / Deposits with scheduled / non-scheduled banks for Rs.7220.87 lakhs (previous year Rs.9074.03 lakhs) includes Rs.7151.00 lakhs (previous year Rs.8951.00 lakhs) for issuing of bank guarantees which are under lien with banks as per stipulation of the bank.

* The main lease is in favour of M/s BHEL and a separate agreement for entitlement of ownership has been made in favour of NBCC.

The above figures represent the land cost including provision for stamp duties payable on execution of lease / title deeds have been made in respect of (i) & (iii) to (vii).

4. Sundry Debtors includes outstanding dues from Govt. /PSUs and other departments in respect of closed projects (other than Foreign Projects) amounting to Rs. 4186.58 lakhs (previous year Rs. 3828.17 lakhs) which are outstanding for more than three years. Out of this sum, an amount of Rs. 1327.29 lakhs (previous year Rs. 1340.45 lakhs) is pending in arbitration / court proceedings. No provision has been considered against these amounts as the same are considered good for recovery.

5. In respect of closed units be it domestic or foreign the reconciliation of balances of such unit is in progress. The effect if any of such balances on the profit / loss of the Corporation is not ascertainable.

6. Debtors, Creditors and Loans & Advances are subject to confirmation and reconciliation.

7. Unclaimed liabilities and other credit balances outstanding since previous year amounting to Rs. 2517.82 lakhs (previous year Rs. 959.39 lakhs ) have been written-back in the books under the head "Unadjusted credit balances written- back" being not payable consequent to a review of such accounts during the year.

8. The statutory dues are deposited regularly with the appropriate authorities as stipulated under the Statutory Act.

9. The expenditure charged to Profit & Loss Account has been worked out on the basis of Standard Costing Method in respect of Real Estate Projects.

10. During the financial year 2007-08 the company has revised its accounting policy for income recognition in ascertaining the value of work done:-

The possible likely rejections were deducted upto financial year 2006-07. There is no financial impact of this change during the year.

11. The company has revised its accounting policy for basis of conversion of foreign currency in respect of Revenue items translated into Indian Currency during the financial year 2007-08

i) The basis for conversion of revenue items other than opening and closing inventories and depreciation in respect of foreign projects translated into Indian Currency at an average rate of opening and closing buying rates of the financial year till 2006-07 was changed to an average rate of the month of the transaction.

ii) Foreign currency in respect of Revenue items pertaining to Indian Projects are translated into Indian Currency at the conversion rate on the date of transaction.

There is no financial impact of this change during the financial year 2007-2008.

12. During the financial year 2007-08 the gratuity trust has been constituted and the amount of provision has been transferred to the gratuity trust accordingly.

13. Consequent upon the recommendations of 6th pay commission for employees under CDA Pattern and Pay Committee Report on IDA Pattern effective from January, 2006 and January, 2007 in respect of CDA & IDA Pattern respectively, the liability on account of revision of pay and perks of Rs. 2562.05 lakhs has been provided.

14. Govt. of India issued subscribed and fully paid up 7% non-cumulative Preference Shares redeemable in 10 years upto 31.03.2007 for Rs. 30.00 crores have been redeemed during the financial year 2007-08.

15. As per Accounting Standard-18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related party as defined in the Accounting Standard are given below:-

A) List of related parties with whom transactions have taken place and relationship:-

a) Joint Ventures:-

i) Jamal NBCC International (Proprietary) Limited

ii) IJM- NBCC - VRM

iii) AMC - NBCC

iv) R.K. Millen - NBCC

b) Key Managerial Personnel:-

i) Mr. Arup Roy Choudhury, CMD

ii) Mr. V.P. Das, Director (Projects)

iii) Mr. Ajay K Garg, Director(Finance)

* As a matter of prudence Deferred Tax Asset / (Liability) has been calculated at 30% of actual Deferred Tax Asset / (Liability)

Note: 1) The accounts for 2007-08 have not yet been finalized hence not incorporated except AMC- NBCC. Investment has been accounted for on payment basis.

2) The financial results of Joint Venture IJM - NBCC - VRM have not been received hence not incorporated.

16. Chairman-cum-Managing Director and full time Directors have used company's Car Including for private journeys on payment of prescribed charges in accordance with the Government of India, Ministry of Finance BPE's circular No.2(28)/83-BPE(wc) dated 17.11.1983 read with the Government of India, Ministry of Finance BPE's circular No.4/(12)/82-BPE(wc) dated 01.04.1987 and DPE OM No.2(53).90-DEP (wc)-GIV dated 26.03.1999. Since recovery for personal use of car is being made, use of company's car is not considered as a perquisite.

17. Minus figures have been shown in brackets.

18. Previous years figures have been regrouped/recast/rearranged wherever deemed necessary in order to make them comparable to the presentation adopted for the year under report.


Mar 31, 2006

1. (Rs. in lakhs) 2005-2006 2004-2005

1. CONTINGENT LIABILITIES:-

(a) (i) Claims against the Corporation not acknowledged as debts. Counter claims of the Corporation against these claims amounting to Rs.24783.53 lakhs (Previous year Rs.24075.02 lakhs) not accounted for in books. 28847.66 29875.19

(ii) Bank Guarantees for performance, EMD and Security Deposit 6357.68 6422.38

(b) (i) The Corporation had paid tax in earlier years in Libya on profits based on accounts audited by local auditors. Additional demand for tax amounting to LD 6,716,079.430 equivalent to Rs.5737.54 lakhs (previous year LD 6,716,079.430 equivalent to Rs.5737.54 lakhs) based on turnover etc., for the years from 1977-78 to 1989-90 raised by the tax department of the said foreign country has not been accepted by the Corporation and not provided for. The Corporation has filed appeal / objections against the above demand under the local tax laws. 5737.54 5737.54

(ii) The Govt. guarantee charges on internal/external borrowings have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD). 1531.19 2250.35

(iii) Recovery at penal rate on account of excess consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients. NOT ASCERTAINABLE

(iv) Letters of credit opened but not _ _ utilised.

2. Fixed Deposits / Deposits with scheduled/non-scheduled banks for Rs. 13038.57 lakhs (previous year Rs.5463.04 lakhs) includes Rs.12770.00 lakhs (previous year Rs.5200.00 lakhs) for issuing of bank guarantees which are under lien with banks as per stipulation of the bank.

3. An amount of Rs. 1128.60 lakhs (Previous year Rs.1128.60 lakhs) lying with Rasheed Bank, Iraq can not be repatriated to India. Balance confirmation for this amount is not available from the Bank.

4. Lease/Title Deeds for following Land and Buildings are pending for execution in the name of Corporation:

* The main lease is in favour of M/s BHEL and a separate agreement for entitlement of ownership has been made in favour of NBCC.

Provision for stamp duties payable on execution of lease/title deeds have been made in respect of (i) & (iii) under Fixed Assets and (i) to (v) under work in progress.

3. Sundry Debtors includes outstanding dues from Govt./PSUs and other departments in respect of closed projects(other than Foreign Projects) amounting to Rs.5601.01 lakhs (previous year Rs.6132.23 lakhs) which are outstanding for more than three years. Out of this sum, an amount of Rs.1969.80 lakhs (previous year Rs.2488.23 lakhs) is pending in arbitration/court proceedings. No provision has been considered against these amounts as the same are considered good for recovery.

4. Debtors include sum of Rs. 5234.41 lakhs (Previous year Rs. 7001.44 lakhs) outstanding in respect of Iraqi Projects.

5. Debtors include a sum of Rs.4836.41 lakhs (Net) (Previous year Rs.4836.41 lakhs - Net) outstanding in respect of Libyan projects which are recoverable from Libyan Government in respect of two projects which were completed prior to 1990 and dues against which are not forthcoming due to US sanctions. Efforts are being made to realise the dues through diplomatic channels.

6. Security Deposit amounting to Rs.875.99 lakhs (previous year Rs.875.99 lakhs) is outstanding in respect of Libyan projects which is recoverable from Libyan Government in respect of two projects which were completed prior to 1990 and amount thereof is not forthcoming due to US sanctions. Efforts are being made to realise the dues through diplomatic channels.

7. Current liabilities include Rs. 3426.84 lakhs (previous year Rs. 2663.76 lakhs) received from MOUD during the earlier years on account of outstanding dues in respect of Iraqi Projects covered under INDO-IRAQ Government to Government Deferred Payment Arrangement (DPA) and Cash Contract, the same are pending reconciliation/clearance.

8. In respect of closed units be it domestic or foreign the reconciliation of balances of such unit is in progress. The effect if any of such balances on the profit / loss of the Corporation is not ascertainable.

9. Debtors, Creditors and Loans & Advances are subject to confirmation and reconciliation.

10. No provision for Dividend on Preference Shares has been made in view of Section 205 of the Companies Act, 1956.

11. Income Tax (Overseas) paid amounting to Turkish Lira 13279220000.00 equivalent to Indian Rs. 4.33 lakhs (Previous year Turkish Lira 29885240000 equivalent to Indian Rs. 9.77 lakhs) pertains to projects in Turkey.

12. Unclaimed liabilities and other credit balances outstanding since previous years amounting to Rs. 430.40 lakhs (previous year Rs. 134.92 lakhs) have been written- back in the books under the head "Unadjusted credit balances written-back" being not payable consequent to a review of such accounts during the year.

13. The accounts of Libyan and Iraqi Projects have been converted into Indian Currency at the closing buying rates prevailing as on 31.03.2001 since the rates after this date were not available which is inconsistent with the provision of AS-11. Financial impact of the same is not ascertainable.

14. Arbitration awards are accounted for on the basis of Rule of Court.

15. Govt. of India issued subscribed and fully paid up 7% non-cumulative preference shares redeemable in 10 years upto 31.03.2007 for Rs. 30.00 crore. As per the guidelines issued by Govt. of India vide letter No.0-17031/38/94-PS dated 20.11.1998 the shares are redeemable in 10 years. Hence the provision for yearly redeemable shares not considered because the guidelines do not specify for yearly redemption of shares.

16. The statutory dues are deposited regularly with the appropriate authorities as stipulated under the Statutory Act.

17. The depreciation charged earlier in respect of lease hold land at MBP Ghitorni and Lodhi Road amounting to Rs.23.21 and Rs.2.44 lakhs respectively has been written-back.

18. The Corporation as a matter of policy executes some projects on no profit no loss basis as a social obligation.

19. As per Accounting Standard- 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related party as defined in the Accounting Standard are given below:-

A) List of related parties with whom transactions have taken place and relationships:-

a) Joint Ventures:-

i) Jamal NBCC International(Proprietary) Limited

ii) IJM - NBCC - VRM

b) Key Managerial Personnel:-

i) Mr. Arup Roy Choudhury, CMD

ii) Mr. B.L. Bajaj, Director(Finance)

Note: 1) Since Corporation is yet to pay its 49% ownership interest the information as per vi(a) to (f) of (1) above are not applicable.

2) The results of Joint Venture IJM - NBCC - VRM have not been received hence not accounted for.

Note:- i) Cash and Cash equivalents consist of cash in hand and balances with banks. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amount.

ii) Cash and cash equivalents at the end of 31.03.2006 include deposits with Banks amounting to Rs. 1128.60 lakhs which are not freely remissible to the Company.

iii) The above Cash Flow Statement has been prepared in accordance with the requirement of Accounting Standard-3 " Cash Flow Statement" issued by the Institute of Chartered Accountants of India.

iv) Figures in brackets indicate cash outgo.

20. Chairman-cum-Managing Director and full time Directors have used company's car Including for private journeys on payment of prescribed charges in accordance with the Government of India, Ministry of Finance BPE's circular No.2(28)/83-BPE(wc) dated 17.11.1983 read with the Government of India, Ministry of Finance BPE's circular No.4/(12)/82-BPE(wc) dated 01.04.1987 and DPE OM No.2(53).90-DEP (wc)-GIV dated 26.03.1999. Since recovery for personal use of car is being made, use of company's car is not considered as a perquisite.

21. Minus figures have been shown in brackets.

22. Previous years figures have been regrouped/recast/rearranged wherever deemed necessary in order to make them comparable to the presentation adopted for the year under report.


Mar 31, 2005

1. (Rs. in thousands) 2004-2005 2003-2004

1. CONTINGENT LIABILITIES:-

(a) (i) Claims against the Corporation not acknowledged as debts. Counter claims of the Corporation against these claims amounting to Rs.240,75,02 thousands (Previous year Rs.250,73,68 thousands) not accounted for in books. 298.75.19 342,14,80

(ii) Bank Guarantees for performance,

EMD and Security Deposit 64.22.38 59,91,27

(b) (i) The Corporation had paid tax in earlier years in Libya on profits based on accounts audited by local auditors.

Additional demand for tax amounting to LD 6,716,079.430 equivalent to Rs.57,37,54 thousands (previous year LD 6,716,079.430 equivalent to Rs.57,37,54 thousands) based on turnover etc., for the years from 1977-78 to 1989-90 raised by the tax department of the said foreign country has not been accepted by the Corporation and not provided for.

The Corporation has filed appeal / objections against the above demand under the local tax laws. 57.37.54 57,37,54

(ii) The Govt. guarantee charges on internal/external borrowings have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD). 22.50.35 21,23,18 (iii) Recovery at penal rate on account of excess consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients. NOT ASCERTAINABLE

(iv) Letters of credit opened but not -- -- utilized.

2. Fixed Deposits / Deposits with scheduled/non-scheduled banks for Rs.54,63,04 thousands (previous year Rs.92,51,95 thousands) includes Rs.52,00,00 thousands (previous year Rs.89,88,00 thousands) for issuing of bank guarantees, are under lien with banks as per stipulation.

3. An amount of Rs. 11,28,60 thousands (Previous year Rs. 11,28,60 thousands) lying with Rushed Bank, Iraq can not be repatriated to India. Balance confirmation for this amount is not available from the Bank.

4. The physical verification report of fixed assets as on 31st March,2005 is pending for reconciliation with balance as per books. Discrepancies, if any, will be accounted for on completion of reconciliation.

* The main lease is in favors of M/s BHEL and a separate agreement for entitlement of ownership has been made in favors of NBCC.

However provision for stamp duties payable on execution of lease/title deeds have been made in respect of (i) & (iii) under Fixed Assets and (i), (ii) & (iii) under work in progress.

5. Sundry Debtors includes outstanding dues from Govt./PSUs and other departments in respect of closed projects(other than Foreign Projects) amounting to Rs.61,32,23 thousands (previous year Rs.65,21,48 thousands) which are outstanding for more than three years. Out of this sum, an amount of Rs.24,88,23 thousands (previous year Rs.18,06,99 thousands) is pending in arbitration/court proceedings. No provision has been considered against these amounts as the same are considered good for recovery.

6. Debtors include sum of Rs. 70,01,44 thousands (Previous year Rs. 70,01,44 thousands) is outstanding in respect of Iraqi Projects represents:

i) An amount of Rs.38,03,81 thousands (previous year Rs.38,03,81 thousands) including interest of Rs. 24,86,52 thousands (Previous year of Rs.24,86,52 thousands) recoverable from Exam Bank of India, under Deferred Payment Agreement (DPA) between Government of Iraq and Government of India. The above amount includes Rs.14,44,36 thousands (Previous year Rs.14,44,36 thousands) due from Iraqi Projects for which DPA agreement is pending for renewal since January,1991.

ii) An amount of Rs.20,93,20 thousands (previous year Rs.20,93,20 thousands) on account of war claims pending for approval from clients in respect of projects covered under DPA.

iii) An amount of Rs.11,04,43 thousands (Previous year Rs.11,04,43 thousands) under cash contract is pending due to UN sanctions.

7. Debtors include a sum of Rs.62,43,19 thousands (Net) (Previous year Rs.62,43,19 thousands - Net) outstanding in respect of Libyan projects which represents:

i) An amount of Rs. 48,36,41 thousands (Previous year Rs.48,36,41 thousands) recoverable from Libyan Government in respect of two projects which were completed prior to 1990, for which dues are not forthcoming due to US sanctions. Efforts are being made to realise the dues through diplomatic channels.

ii) An amount of Rs. 14,06,78 thousands (Previous year Rs. 14,06,78 thousands) recoverable from Airport Authority of India (AAI), which was a subject matter for Arbitration. The Arbitration award in favour of NBCC has since been obtained. However, the award has not been implemented against AAI as AAI has asked for the release of Bank Guarantee which was executed by AAI to Libyan Custom Department for import of machinery by NBCC. The matter is under pursuance with Libyan authorities through diplomatic channels.

8. Security Deposit include a sum of Rs. 19,00,56 thousands (previous year Rs.19,00,56 thousands) is outstanding in respect of Libyan projects which represents:

i) An amount of Rs.8,75,99 thousands (Previous year Rs. 8,75,99 thousands) recoverable from Libyan Government in respect of two projects which were completed prior to 1990, for which amount is not forthcoming due to US sanctions. Efforts are being made to realize the dues through diplomatic channels.

ii) An amount of Rs. 10,24,57 thousands (Previous year Rs.10,24,57 thousands) recoverable from Airport Authority of India (AAI) which was a subject matter for Arbitration. The Arbitration award in favors of NBCC has since been obtained. However, the award has not been implemented against AAI as AAI has asked for the release of Bank Guarantee which was executed by AAI to Libyan Custom Department for import of machinery by NBCC. The matter is under pursuance with Libyan authorities through Diplomatic channels.

9. Ministry of Urban Development (MOUD) vide letter No.0-17031/22/80-PS dated 14.03.95 had conveyed decision that Ministry of Finance(MOF) has no objection in giving grant of Rs. 26,00,00 thousands for repayment of OIDB loan of Rs.13,00,00 thousands and interest thereon of Rs.13,00,00 thousands. Corporation had taken into account grant of Rs. 13,00,00 thousands in 1993-94 and Rs. 13,00,00 thousands in 1994-95. MOF has released Rs. 13,00,00 thousands as grant vide letter No.0-17031/22/80-PS (Vol. III) dated 10.01.1997. The matter for the release of the balance grant is under follow up with the Govt. and MOUD vide letter No.0-17031/ 22/80-PS dated 13.07.2005 confirmed that the settlement of interest due is under consideration of the Government.

10. Current liabilities include Rs. 26,63,76 thousands (previous year Rs. 26,63,76 thousands) and Rs. 17,67,03 thousands (Previous year Rs. 17,67,03 thousands) received from MOUD and ECGC during the earlier years on account of outstanding dues in respect of Iraqi Projects covered under INDO-IRAQ Government to Government Deferred Payment Arrangement (DPA) and Cash Contract, the same are pending reconciliation/clearance.

11. In closed units of domestic projects, foreign projects and some running units debit / credit balances of steel & cement, Suppliers, PRWs, Employees, Provident Fund, expenses payable to other parties and suppliers including huge and old balances are outstanding which are subject to reconciliation/clearance/set-off. Review/reconciliation/clearance of these balance is under progress. In some units VWD, Sundry Debtors, Security Deposits and other balances as per unit records and accounts maintained at Zonal Offices are pending reconciliation. The effect on Balance Sheet and Profit & Loss Account of the year of such review/reconciliation & clearance is not ascertainable now.

12. Debtors, Creditors and Loans & Advances are subject to confirmation and reconciliation.

13. The company has duly complied with the Accounting Standards referred to in clause 3(c) of Section 211 of the Companies Act,1956 except in respect of Accounting Standard-7 (Para 35), for the reasons mentioned hereunder:

Foreseeable losses not being provided, as these losses have got the essence of contingencies which are highly uncertain considering the nature of work and involvement of additional expenditure on initial mobilization of the work.

14. No provision for Dividend on Preference Shares has been made in view of Section 205 of the Companies Act, 1956.

15. Income Tax (Overseas) paid amounting to Turkish Lira 29885240000 equivalent to Indian Rs. 9,77 thousands (Previous year Turkish Lira 35831300000 equivalent to Indian Rs. 10,44 thousands) pertains to projects in Turkey.

16. Unclaimed liabilities and other credit balances outstanding since previous years amounting to Rs. 1,34,92 thousands (previous year Rs. 5,90,84 thousands) have been written-back in the books under the head "Unadjusted credit balances written- back" being not payable consequent to a review of such accounts during the year which is a regular process.

17. The accounts of Libyan and Iraqi Projects have been converted into Indian Currency at the closing buying rates prevailing as on 31.03.2001 since the rates after this date were not available which is inconsistent with the provision of AS-11. Financial impact of the same is not ascertainable.

18. MOUD vide letter No.0-17031/11/94-PS(VIII) dated 28.11.1997 has allowed NBCC to encase RBI Bonds amounting to Rs. 6,00,00 thousands to enable NBCC to meet the claims of M/s IRCON. Accordingly liability of MOUD amounting to Rs. 7,63,08 thousands including interest upto 31.03.2000 has been written-back during 2000- 2001 and has been shown under contingent liability.

19. Arbitration awards are accounted for on the basis of Rule of Court.

20. Govt. of India issued subscribed and fully paid up 7% non-cumulative preference shares redeemable in 10 years upto 31.03.2007 for Rs. 30.00 Crore. As per the guidelines issued by Govt. of India vide letter No.0-17031/38/94-PS dated 20.11.1998 the shares are redeemable in 10 years. Hence the provision for yearly redeemable shares not considered because the guidelines do not specify for yearly redemption of shares.

21. There is a special rupee loan from Syndicate Bank with a progressive liability for Rs.45,43,92 thousands (Principal amount Rs. 35,72,24 thousands and interest accrued Rs. 9,71,68 thousands) as on 31.03.2005. The one time settlement of Rs.31,32,00 thousands has been arrived at with Syndicate Bank as confirmed by them vide letter No.NP/9044/1071/2003 dated 23.07.2003 but the overall effect of one time settlement shall be made in the books of accounts when the payment is made to Syndicate Bank.

22. Upto the Financial Year 2003-2004 lease hold land was amortized over the period of lease. From the Financial Year 2004-2005 amortization of lease hold land is discontinued to comply with the provisions of Schedule-XIV of the Companies Act,1956. The Financial impact due to change of this policy is Rs.2,67 thousands which has not been charged in the books of accounts.

23. Till previous year the Sales Tax/Turnover Tax used to be adjusted in the books of accounts at the time of final assessment except where Composite Tax Scheme was adopted. From the financial year 2004-2005 the amount remained uncharged upto 31.03.2004 and the current year amount totaling to Rs.8,33,07 thousands has been charged in the books of accounts and at the time of final assessment refund if any of said taxes shall be reckoned as income.

24. The Corporation represented to the Govt. of India, Ministry of Urban Development vide letter No. NBCC/RE/MOUD/04/1017 dated 01.11.2004 for restricting the interest amount to the extent of principal amount i.e. Rs.8.02 crores of land allotted to NBCC at Pragmatic Vicar. During discussion NBCC was assured that the request of Corporation shall be considered favorably. However, the Govt. of India, MOUD vide their letter No.0-17031/10/96-PS(PT) dated 09.06.2005 communicated the approval for payment of interest of Rs.12.89 crores. The Corporation has again taken up with the Ministry vide letter No. NBCC/CMD/2005 dated 15.06.2005 with a request to reconsider the issue as per discussions held in the Ministry where NBCC's agreement was for one time settlement with the payment of Rs.8.02 crores. In line of the same provisions of Rs.8.02 crores has been made in the books of accounts and Rs.4.87 crores is shown as contingent liability.

25. The statutory dues are deposited regularly with the appropriate authority as stipulated under the Statutory Act.

26. The committee appointed for physical verification has ascertained, on the basis of technical evaluation, that there has been no impairment in the value of the assets at which they are appearing in the books of accounts.

27. The net block of Plant & Machinery and vehicles includes an amount of Rs.26,30 thousands and Rs.34 thousands respectively being the items retired from Active use. However no provision has been made considering that there will be no loss at the time of sale as the estimated realizable value of such assets will be more than their book value.

28. As per Accounting Standard- 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related party as defined in the Accounting Standard are given below:- ) List of related parties with whom transactions have taken place and relationships:- ) Joint Ventures:-

i) Jamal NBCC International(Proprietary) Limited

ii) IJM - NBCC - VRM ) Key Managerial Personnel:-

iii) Mr. Arup Roy Choudhury, CMD

iv) Mr. S.Shankar, Director(Projects)

v) Mr. B.L. Bajaj, Director(Finance)

Deferred Tax Assets / (Liabilities) of Rs.6,14,98 thousands as at 01.04.2004 includes Rs.31,16 thousands which was not considered in the previous year but has been accounted for in current year.

Note: 1) Since Corporation is yet to pay its 49% ownership interest the information as per vi(a) to (f) of (1) above are not applicable.

2) The results of Joint Venture IJM - NBCC - VRM have not been received hence not accounted for.

Note:- i) Cash and Cash equivalents consist of cash in hand and balances with banks. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amount.

ii) Cash and cash equivalents at the end of 31.03.2005 include deposits with Banks amounting to Rs. 11,28,60 thousands which are not freely remissible to the Company.

iii) The above Cash Flow Statement has been prepared in accordance with the requirement of Accounting Standard-3 " Cash Flow Statement" issued by the Institute of Chartered Accountants of India.

iv) Figures in brackets indicate cash outgo.

29. Chairman-cum-Managing Director and full time Directors have used company's car Including for private journeys on payment of prescribed charges in accordance with the Government of India, Ministry of Finance BPE's circular No.2(28)/83-BPE(we) dated 17.11.1983 read with the Government of India, Ministry of Finance BPE's circular No.4/(12)/82-BPE(we) dated 01.04.1987 and DPE OM No.2(53).90-DEP (wc)-GIV dated 26.03.1999. Since recovery for personal use of car is being made, use of company's car is not considered as a perquisite.

30. Minus figures have been shown in brackets.

31. Previous years figures have been regrouped/recast/rearranged wherever deemed necessary in order to make them comparable to the presentation adopted for the year under report.


Mar 31, 2004

1. (Rs. in thousands) 2003-2004 2002-2003

1. CONTINGENT LIABILITIES:-

(a) (i) Claims against the Corporation not acknowledged as debts. Counter claims of the Corporation against these claims amounting to Rs.250,73,68 thousands (Previous year Rs.247,32,39 thousands) not accounted for in books. 342,14,80 336,15,75

(ii) Bank Guarantees for performance, EMD and Security Deposit 59,91,27 60,97,66

(b) (i) The Corporation had paid tax in earlier years in Libya on profits based on accounts audited by local auditors. Additional demand for tax amounting to LD 6,716,079.430 equivalent to Rs.57,37,54 thousands (previous year LD 6,716,079.430 equivalent to Rs.57,37,54 thousands) based on turnover etc., for the years from 1977-78 to 1989-90 raised by the tax department of the said foreign country has not been accepted by the Corporation and not provided for. The Corporation has filed appeal / objections against the above demand under the local tax laws. 57,37,54 57,37,54

(ii) The Govt. guarantee charges on internal/external borrowings, except omnibus Government Guarantee of Rs.50,00,00 thousands, have not been accounted for as the matter regarding waiver of these charges has been taken up with the Govt. of India, Ministry of Urban Development (MOUD). 21,23,18 17,07,27

(iii) Recovery at penal rate on account of excess consumption of material over theoretical norms for the materials supplied by the clients at issue price and free of cost, pending final settlement with the clients. NOT ASCERTAINABLE

(iv) Letters of credit opened but not -- -- utilised.

2. Fixed Deposits / Deposits with scheduled/non-scheduled banks for Rs.92,51,95 thousands (previous year 44,89,61 thousands) including Rs.89,88,00 thousands (previous year Rs.42,00,00 thousands) for issuing of bank guarantees, are under lien with banks as per arrangements with them

3. Inventory valuing Rs.21,89 thousands (previous year Rs.22,05 thousands) and Plant & Machinery valuing Rs. 2,08 thousands (previous year Rs. 2,08 thousands) (written down value) in respect of Punjab Bridge Works, Vashi Railway Station and CCI Yerraguntala Works are impounded and under the custody of clients.

4. An amount of Rs. 11,28,60 thousands (Previous year Rs. 11,28,60 thousands) lying with Rasheed Bank, Iraq can not be repatriated to India. Balance confirmation for this amount is not available from the Bank.

5. The physical verification report of fixed assets as on 31st March,2004 is pending for reconciliation with books records. Discrepancies, if any, will be accounted for on completion of reconciliation.

However provision for stamp duties payable on execution of lease/title deeds have been made in respect of (i) & (iii) under Fixed Assets and (i) & (ii) under work in progress.

6. In respect of closed projects (other than foreign projects), there are outstanding dues amounting to Rs.65,21,48 thousands (Previous year Rs.60,70,94 thousands) on account of Sundry Debtors, which are for more than three years. Provision has not been considered for these amounts as Corporation considered these as good for recovery in view of dues outstanding from Govt./PSU's and other Departments.

7. Due to pending decision regarding grant of extension of time, provision for Rs.1,89,54 thousands (previous year Rs.1,86,37 thousands) in respect of amounts withheld by clients on account of delay in completion of the Inland projects has not been made.

8. A sum of Rs. 70,01,44 thousands (Previous year Rs. 70,01,44 thousands) is outstanding in respect of Iraqi Projects. This represents:

k) An amount of Rs.38,03,81 thousands (previous year Rs.38,03,81 thousands) including interest of Rs. 24,86,52 thousands (Previous year of Rs.24,86,52 thousands) recoverable from Exim Bank of India, under Deferred Payment Agreement (DPA) between Government of Iraq and Government of India. The above amount includes Rs.14,44,36 thousands (Previous year Rs.14,44,36 thousands) due from Iraqi Projects for which DPA agreement is pending for renewal since January,1991.

ii) An amount of Rs.20,93,20 thousands (previous year Rs.20,93,20 thousands) on account of war claims pending for approval from clients in respect of projects covered under DPA.

iii) An amount of Rs.11,04,43 thousands (Previous year Rs.11,04,43 thousands) under cash contract is pending due to UN sanctions.

9. A sum of Rs.62,43,19 thousands (Net) (Previous year Rs.62,43,19 thousands - Net) is outstanding in respect of Libyan projects. This represents:

i) An amount of Rs. 48,36,41 thousands (Previous year Rs.48,36,41 thousands) recoverable from Libyan Government in respect of two projects which were completed prior to 1990, for which dues are not forthcoming due to US sanctions. Efforts are being made to realise the dues through diplomatic channels.

ii) An amount of Rs. 14,06,78 thousands (Previous year Rs. 14,06,78 thousands) recoverable from Airport Authority of India (AAI), which was a subject matter for Arbitration. The Arbitration award in favour of NBCC has since been obtained. However, the award has not been implemented against AAI as AAI has asked for the release of Bank Guarantee which was executed by AAI to Libyan Custom Department for import of machinery by NBCC. The matter is under pursuance with Libyan authorities through diplomatic channels.

10. A sum of Rs. 19,00,56 thousands (previous year Rs. 19,00,56 thousands) is outstanding towards security deposit in respect of Libyan projects. This represents:

i) An amount of Rs.8,75,99 thousands (Previous year Rs. 8,75,99 thousands) recoverable from Libyan Government in respect of two projects which were completed prior to 1990, for which amount is not forthcoming due to US sanctions. Efforts are being made to realise the dues through diplomatic channels.

ii) An amount of Rs. 10,24,57 thousands (Previous year Rs.10,24,57 thousands) recoverable from Airport Authority of India (AAI) which was a subject matter for Arbitration. The Arbitration award in favour of NBCC has since been obtained. However, the award has not been implemented against AAI as AAI has asked for the release of Bank Guarantee which was executed by AAI to Libyan Custom Department for import of machinery by NBCC. The matter is under pursuance with Libyan authorities through Diplomatic channels.

11. Ministry of Urban Development (MOUD) vide letter No.0-17031/22/80-PS dated 14.03.95 had conveyed decision that Ministry of Finance(MOF) has no objection in giving grant of Rs. 26,00,00 thousands for repayment of OIDB loan and interest amounting to Rs. 13,00,00 thousands each. Corporation had taken into account grant of Rs. 13,00,00 thousands in 1993-94 and Rs. 13,00,00 thousands in 1994- 95. MOF has released Rs. 13,00,00 thousands as grant vide letter No.0- 17031/22/80-PS (Vol. III) dated 10.01.1997. The matter for the release of the balance grant is under follow up with the MOUD.

12. Current liabilities include Rs. 26,63,76 thousands (previous year Rs. 26,63,76 thousands) and Rs. 17,67,03 thousands (Previous year Rs. 17,67,03 thousands) received from MOUD and ECGC during the earlier years on account of outstanding dues in respect of Iraqi Projects covered under INDO-IRAQ Government to Government Deferred Payment Arrangement (DPA) and Cash Contract are pending for reconciliation/clearance.

13. In closed units of domestic projects, foreign projects and some running units debit and credit balances of steel & cement, Suppliers, PRWs, Employees, Provident Fund, expenses payable and other parties and suppliers including large and/or old balances are outstanding and are subject to reconciliation/clearance/set-off. Review/reconciliation/clearance of these balance is under progress. In some units VWD, Sundry Debtors, Security Deposits and other balances as per unit records and accounts maintained at Zonal Offices are pending reconciliation. The effect on Balance Sheet and Profit & Loss Account of the year of such review/reconciliation & clearance can not be ascertained now.

14. Debtors, Creditors and Loans & Advances in so far as these have not been subsequently realised or discharged are subject to confirmation and reconciliation.

15. The company has duly complied with the Accounting Standards referred to in clause 3(c) of Section 211 of the Companies Act,1956 except in respect of Accounting Standard-7 (Paras 35, 12 & 13), for the reasons mentioned hereunder:

- Foreseeable losses not being provided, as these losses are not ascertainable till completion of projects. Financial impact of the same is not ascertainable.

- Claims & variations arising under construction contracts are not accounted for strictly as per Accounting Standard. Claims as considered realisable by the Management are only taken into accounts. Financial impact of the same is not ascertainable.

16. No provision for Dividend on Preference Shares has been made in view of the unabsorbed depreciation under Section 205 of the Companies Act, 1956.

17. Income Tax paid amounting to Turkish Lira 35831300000 equivalent to India Rs. 10,44 thousands (Previous year Turkish Lira 87657720000 equivalent to Indian Rs. 24,54 thousands) pertains to projects in Turkey.

18. Unclaimed liabilities and other credit balances outstanding since previous years amounting to Rs. 5,90,84 thousands (previous year Rs. 1,93,20 thousands) have been written-back in the books under the head "Unadjusted credit balances written- back" being not payable consequent to a review of such accounts during the year which is a regular continuous process.

19. The accounts of Libyan and Iraqi Projects have been translated into Indian Currency at the closing buying rates prevailing as on 31.03.2001 since the rates after this date were not available, as these currencies are not frequently traded. Financial impact on the same is not ascertainable.

20. The Corporation has represented to the Ministry of Urban Development for waiver of interest on land cost at Pragati Vihar, New Delhi which could not be paid in terms of allotment letter No.J-13026/2/85-LD dated 27.03.1991 and for which provision of Rs.25,46,90 thousands was made in the accounts upto 31.03.2000. The representation has been made on the ground that out of the total space built in the Pragati Vihar Complex area measuring 3800 Sq.Mtr. has been sold to DMRC at concessional rates vide Ministry letter No.J-13026/6/97-LD dated 17.03.1997. Had the space been sold at the prevailing market rate, NBCC would have realised an additional sum of Rs. 25,64,00 thousands approximately. Keeping this in view the existing liability of Rs. 25,46,90 thousands alongwith provision of interest from 01.04.2000 to 31.03.2004 of Rs. 20,68,49 thousands (Previous year Rs.14,55,95 thousands) has been treated as Contingent Liability.

21. MOUD vide letter No.0-17031 /11 /94-PS(VIII) dated 28.11.1997 has allowed NBCC to encash RBI Bonds amounting to Rs. 6,00,00 thousands to enable NBCC to meet the claims of M/s IRCON. Accordingly liability of MOUD amounting to Rs. 7,63,08 thousands including interest upto 31.03.2000 has been written-back during 2000- 2001 and has been shown under contingent liability.

22. Arbitration awards are accounted for on the basis of Rule of Court.

23. Till previous year work executed at project upto 20% of the contract value except for cost plus/deposit/project management works was classified under work-in-progress (WIP). From the financial year 2003-2004 as per the revised Accounting Standard-7 (AS-7), the quantum of work executed at project irrespective of any percentage is classified under value of work done instead of work-in-progress(WIP) except expenditure incurred in preparatory works on Defence Housing Projects.

The provision for gratuity and leave encashment in respect of all the employees of the Corporation has been made on actuarial basis.

Financial impact due to above change in policies is not ascertainable.

24. Due to change in assumption of interest rates from 8.5% to 7.5% for actuarial valuation of Gratuity and Leave Encashment, Provision for Gratuity and Leave Encashment during the year is higher by Rs. 60,00 thousands and Rs. 40,00 thousands respectively.

25. Govt. of India issued subscribed and fully paid up 7% non-cumulative preference shares redeemable in 10 years upto 31.03.2007 for Rs. 30.00 crore. As per the guidelines issued by Govt. of India vide letter No.0-17031/38/94-PS dated 20.11.1998 the shares are redeemable in 10 years. Hence the provision for yearly redeemable shares not considered because the guidelines do not specify for yearly redemption of shares.

26. There is a special rupee loan from Syndicate Bank with a progressive liability for Rs.45,43,92 thousands (Principal amount Rs. 35,72,24 thousands and interest accrued Rs. 9,71,68 thousands) as on 31.03.2004. The one time settlement with Syndicate Bank is in the advance stage of completion. In view of this the amount appearing as unsecured loan is considered adequate.

27. As per Accounting Standard- 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related party as defined in the Accounting Standard are given below:- ) List of related parties with whom transactions have taken place and relationships:- ) Joint Ventures:-

h) Jamal NBCC International(Proprietary) Limited

ii) IJM - NBCC - VRM

) Key Managerial Personnel:-

h) Mr. Arup Roy Choudhury, CMD

ii) Mr. S.Shankar, Director(Projects)

iii) Mr. B.L. Bajaj, Director(Finance)

Note: Since Corporation is yet to pay its 49% ownership interest the information as per vi(a) to (f) of (1) above are not applicable.

Note:- i) Cash and Cash equivalents consist of cash in hand and balances with banks. Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amount.

i) Cash and cash equivalents at the end of 31.03.2004 include deposits with Banks amounting to Rs. 11,28,60 thousands which are not freely remissible to the Company.

i) The above Cash Flow Statement has been prepared in accordance with the requirement of Accounting Standard-3 " Cash Flow Statement" issued by the Institute of Chartered Accountants of India.

i) Figures in brackets indicate cash outgo.

28. Chairman-cum-Managing Director and full time Directors have used company's car Including for private journeys on payment of prescribed charges in accordance with the Government of India, Ministry of Finance BPE's circular No.2(28)/83-BPE(wc) dated 17.11.1983 read with the Government of India, Ministry of Finance BPE's circular No.4/(12)/82-BPE(wc) dated 01.04.1987 and DPE OM No.2(53).90-DEP (wc)-GIV dated 26.03.1999. Since recovery for personal use of car is being made, use of company's car is not considered as a perquisite.

29. Minus figures have been shown in brackets.

30. Previous year's figures have been recognised / recast / rearranged, wherever necessary in order to conform to this year's presentation.

 
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