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NBCC (India) Ltd.

Notes to Accounts

NSE: NBCCEQ BSE: 534309ISIN: INE095N01031INDUSTRY: Construction, Contracting & Engineering

BSE   Rs 119.05   Open: 114.75   Today's Range 114.50
119.15
 
NSE
Rs 118.90
+5.50 (+ 4.63 %)
+5.55 (+ 4.66 %) Prev Close: 113.50 52 Week Range 31.45
176.50
You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (Rs.) 21402.00 Cr. P/BV 11.01 Book Value (Rs.) 10.80
52 Week High/Low (Rs.) 177/31 FV/ML 1/1 P/E(X) 80.26
Bookclosure 01/09/2023 EPS (Rs.) 1.48 Div Yield (%) 0.45
Year End :2023-03 

(iv) Description of Valuation Techniques used and key inputs to Valuation on Investment Properties:

Valuation approach - Market Price Method.

The valuation of the investment property was carried out by a registered valuer as defined under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017. The Valuation Report is based upon the market Price method approach in which the market value is determined by comparing recent sales/quoted prices of assets located nearby and adjusting these comparable to the asset to be valued based on factors like size, condition, specifications, type of sale etc. Accordingly, the valuer has conducted market research & survey of nearby area and based on the discussion with various property consultants and local market enquiries.

(v) All resulting fair value estimates for Investment Properties are included in level 2 Fair Value

approval of Central Government. However in case the affiliate ceased to be an affiliate of the Company by any reasons, the shares so held by the affiliate shall be transferred back to the Company. Notwithstanding anything contained in the transfer agreement, the Company shall continue to have the beneficial ownership of the shares and shall be bound by all the obligation of transfer as a principal obligator.

** In case of HSCC (INDIA) Ltd the Company is not entitled directly or indirectly to sell or transfer, or create any encumbrance or transfer the legal or beneficial ownership of the shares, to any person without prior approval of Goverment of India for a period of three years from acquisition date i.e. December 26, 2018.

# Investment classsified as Current Investment in the Current Year, Refer Note No. 10.

The Company is holding NIL equity shares (Previous Year 600) in Domestic Subsidiary Companies in the name of nominees of the Company.

* The Company, in its Board Meeting dated September 23, 2019, has decided to close the Subsidiary Company NBCC Engineering & Consultancy Limited. The approval of its administrative Ministry i.e. Ministry of Housing and Urban Affairs was received on June 16, 2020 for the proposed closure. The Board of Directors of the Subsidiary Company passed a special resolution for the voluntary winding-up and appointment of liquidator at Extraordinary General Meeting of the Subsidiary Company held on February 19, 2021. The process of winding-up of the said Company by the Liquidator was completed and had remitted to Company ' 30.58 Lakh as against share capital of ' 100 Lakh in NBCC Engineering & Consultancy Limited (NECL). Final application for the dissolution of the Company was filed before the Hon'ble NCLT on February 10, 2022 and NCLT Pronounced the order on March 16, 2023. The Company has been dissolved w.e.f March 16,2023. In Continuation of liquidation process on receipt of dissolution order from NCLT on March 16, 2023, the Company, during the year has written off Investment of ' 69.42 lakh after adjustment of ' 30.58 lakh received against total investment of ' 100.00 lakh. Simultaneously, the provision of impairment on the above investments amounting to ' 100.00 lakh provided in the earlier year has been written back. (Refer Note 28 & 36).

# The Company in its Board meeting dated August 11, 2018 decided to close the subsidiary companies viz. NBCC International Limited and NBCC Environment Engineering Limited. The Company has received approval of its administrative Ministry i.e. Ministry of Housing and Urban Affairs and DIPAM on March 27, 2019 and May 09, 2019, respectively for the proposed closure by way of merger. Accordingly the Company filed a joint application of scheme of merger with the Ministry of Corporate Affairs on December 24, 2020. The Ministry of Corporate Affairs (MCA) heard the matter of merger on January 20, 2022. The Company in its Board Meeting dated July 14, 2022, decided to withdraw the application for scheme of Merger from MCA. Accordingly, the respective subsidiary companies in their Board Meeting dated August 01, 2022 decided to initiate the working for closure of the companies through voluntary liquidation. The Board of Directors of both Companies has declared solvency under section 59 of IBC, 2016 in the Board Meeting dated September 13, 2022. Further the Voluntary liquidation of both Companies has been commenced from date of Shareholders approval in AGM i.e. September 26, 2022 of respective subsidiary companies. The Liquidator were appointed for both Companies accordingly. Liquidator has remitted to parent NBCC ' 97.69 Lakh & ' 96.29 Lakh for NBCC International Limited & NBCC Environment Engineering Limited respectively against its share capital of ' 100 Lakh each in both the companies, hence, Impairment provision of ' 2.31 lakh & ' 3.71 lakh has been made for the shortfall amount against investment in respective subsidiaries during the year ended on March 31, 2023. The Accounting adjustments related to investment & Impairment provision shall be carried on receipt of dissolution order from the NCLT. Winding-up process by liquidator has been completed for both Companies and applications before Hon'ble NCLT has been filed on January 15, 2023 & January 16, 2023 for NBCC Environment Engineering Limited and NBCC International Limited respectively for final dissolution order. In case of NBCC Environment Engineering Limited NCLT has reserved the order on April 13, 2023 and the matter in respect of NBCC International Limited is under consideration of NCLT. The next date of hearing would be held on May 30, 2023.

Note - 18 D

The Company has only one class of Equity Shares having a par value of ' 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Note - 18 E

During the year 2016-17, 30,00,00,000 Equity Shares of ' 2/- each were issued as fully paid Bonus Shares with rights pari passu with existing Equity Shares.

Note -18 F

Company has split face value of equity share from ' 10/- each to ' 2/- per share as approved by the shareholders of the Company through postal ballot on June 02, 2016

Company has split face value of equity share from ' 2/- each to ' 1/- per share as approved by the shareholders of the Company through postal ballot on April 05, 2018.

Note -18 G

During the current year, Company has transferred 11246 (P.Y. 1130) & 3670 (P.Y. 60) number of shares in NSDL and CDSL respectively held by investors pursuant to section 124(6) of The Companies Act, 2013 and the rules notified thereunder whose dividend is unclaimed/unpaid for seven years to a demat account of the Investor Education and Protection Fund (IEPF) Authority.

Note -18 H

Reserves and Surplus

Nature and purpose of Other Reserves

Retained Earnings

Retained Earning represent the undistributed profits of the Company.

General Reserve

General Reserve represents the statutory reserve, this is in accordance with Corporate law wherein a portion of profit is apportioned to General Reserve. Under Companies Act, 1956 it was mandatory to transfer amount before a Company can declared dividend, however under Companies Act, 2013 transfer of any amount to General Reserve is at the discretion of the Company.

Other Comprehensive Income

Other Comprehensive Income represents balance arising on account of Gain/(Loss) booked on Re-measurement of Defined Benefit Plans and Exchange Difference on translation of foreign operation.

Note - 26 B

The Company has adopted Indian Accounting Standard (Ind AS) - 19 on Employee Benefit as under :

Gratuity

The Company has 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 in accordance with Gratuity Act 1972. In the year 2017-18, consequent upon the amendment in the Gratuity Act 1972, the maximum limit of Gratuity to be paid to any employee enhanced from ' 10.00 lakh to ' 20.00 lakh. The scheme is funded by the Company and is managed by a separate trust formed in the year 2007-08. The liability for the same is recognised on the basis of actuarial valuation and accordingly transferred to Gratuity Trust. The provision for the year 2022-23 is ' 498.76 lakh {Previous Year ' 491.13 lakh}. The gains/losses on the remeasurement of the assumptions on the Gratuity plan have been recognised in Other Comprehensive Income (OCI).

Earned Leave

The Company has other long term 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 2022-23 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Earned Leave Encashment as on March 31, 2023 is ' 3,655.40 lakh {Previous Year ' 3,579.16 lakh}.

Sick Leave

The Company has other long term benefit plan for Sick 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 Sick leave would be equal to leave salary as admissible for half basic pay plus dearness allowance and to make up the shortfall in earned leave. No commutation of Sick leave shall be allowed for this purpose. The liability for the year 2022-23 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Sick Leave Encashment as on March 31, 2023 is ' 1,432.66 lakh {previous year ' 1,158.01 lakh}.

Travelling Allowance on Superannuation

The cumulative liability for Travelling Allowance to be paid to the employees on superannuation (exit) as on March 31, 2023 is ' 38.16 lakh {previous year ' 39.90 lakh} based on actuarial valuation. The gains/losses on the remeasurement of the assumptions on the plan have been recognised in Other Comprehensive Income (OCI).

Post Retirement Medical Benefits (PRMB)

The Company is having a defined benefit plan for Post Retirement Medical Benefits payable to the employees and the retirees of the Company. The liability for the year 2022-23 is accounted for on the basis of Actuarial Valuation. The cumulative liability for Post Retirement Medical Benefits as on March 31, 2023 is ' 9,065.33 lakh {Previous Year ' 8,314.21 lakh}. The gains/losses on the remeasurement of the assumptions on the plan have been recognised in Other Comprehensive Income (OCI).

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 November 26, 2008. The scheme is managed by a separate Trust formed in the year 2012-13 for the purpose. Company has migrated from Existing NBCC EDCS Pension Scheme to NPS scheme w.e.f. 01st Dec, 2021 wherein minimum qualifying service of 15 years is no longer required in accordance with the guidelines of Pay Revision of Board level and below Board level Executives and Non-Unionised Supervisors of Central Public Sector Enterprises (CPSEs) w.e.f. 01.01.2017. The NPS scheme is applicable to all employees except those were superannuated on or before 31st March, 2022. Company is contributing 7.00% of the salary (Basic Pay D.A.) and the NPS is adopted as a defined contribution pension scheme. The contribution for pension amounting to ' 875.65 lakh {Previous Year ' 841.91 lakh} has been paid during the year 2022-23.

Long Service Awards

The Company has introduced a Scheme of Long Service Awards during the Financial Year 2016-17 covering all the Employees below Board Level who are on the regular roll as on September 3, 2016 onwards and completed (i) 30 Years of Service or more (ii) 35 Years of Service or more. The Company has recognised a liability of ' 191.38 lakh {Previous Year ' 144.99 lakh} during the Financial Year 2022-23 on the basis of Actuarial Valuation.

Note - 41

(' in Lakh)

Contingent Liabilities, Contingent Assets and Commitments (To the extent not provided for)

As at March 31, 2023

As at March 31, 2022

(A)

Contingent Liabilities

(a)

Claims against the Company not acknowledged as debts. Counter claims of the Corporation against these claims amounting to ' 4,229.85 lakh (March 31, 2022 ' 4,251.05 lakh) not accounted for in books. (It includes several claims received during the current year aggregating to ' 29,479.86 lakh from single contractor for different projects and the same are sub-judice at various legal forums).

1,24,042.12

1,03,337.58

(b)

Demand in respect of taxes not accepted by Company:

i) Value Added Tax Including Interest & Penalty as per demand notice order: During the current Financial Year, DVAT Demand of ' 40,480.01 lakh has been set aside by Hon'ble Appellate Tribunal vide order dt.10.11.2022, However the case has been remanded back to Ld. OHA for recalculation of Tax liability. Till the reporting date no further demand order has been received by Company from DVAT Department in this case.

AMOUNT NOT ASCERTAINABLE

40,480.01

ii) Other Value Added Tax Including Interest & Penalty as per demand notice order. Company is contesting these demands.

6,615.66

8,222.97

iii) Goods and Services Tax (as per ruling of Delhi Authority of Advance Ruling, The MoHUA, Govt. of India is not exempt from payment of GST on sale of Commercial built-up space, as it does not relate to any function entrusted to a municipality under article 243w of the Constitution and the Company is also liable to pay GST on sale of Commercial built-up area which is recoverable from customer as per terms of sale.)

3,046.35

3,046.35

iv) Service Tax (Company is contesting demands)

4,783.16

5,443.79

v) Income Tax Demands raised by Income Tax Department but not accepted by the Company.

413.96

380.20

vi) Income Tax Appeals decided in favour of Company but department has filed further appeals.

715.06

767.48

vii) Property Tax deposited under Protest

686.81

686.81

viii) Employee Provident Fund demand ( Company is contesting Demand )

154.74

154.74

ix) Penalty levied by the Stock Exchanges (NSE & BSE) for non-compliance of Regulation 17,18 & 19 of SEBI (LODR) Regulations, 2015. The Company has made request to the Stock Exchanges for waiver of Penalty as non-compliance are related to composition of Board and Committees due to awaited appointment of Independent Directors from the Government through Administrative Ministry as it is beyond the control of the Company)

134.13

100.15

(c)

Infrastructure Charges/Surcharge/Compensation demanded by various Authorities for Real Estate Inventory (Land & WIP) and PPE

5,147.87

5,396.25

(d)

In respect of developed real estate project at Sector 37D, Gurugram:-

Any liability that may become payable to homebuyers/allottees of the above project on account of interest and other compensation, in respect of which ongoing litigation pending at various legal forums.[Refer Note No. 53 (viii)]

AMOUNT NOT ASCERTAINABLE

AMOUNT NOT ASCERTAINABLE

(e)

Guarantees.

(i) Bank Guarantees for performance, Earnest Money Deposits and Security Deposits including foreign bank guarantee.

34,761.00

46,498.00

Contingent Liabilities, Contingent Assets and Commitments (To the extent not provided for)

As at March 31, 2023

As at March 31, 2022

(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 Housing & Urban Affairs.

1,654.93

1,654.93

(f)

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.

AMOUNT NOT ASCERTAINABLE

AMOUNT NOT ASCERTAINABLE

(B)

Contingent Assets

i) Value Added Tax Including Interest & Penalty (Refer Note 41 (A)(b)(i) above) is fully payable by the Client in the event of confirmation of demand.

AMOUNT NOT ASCERTAINABLE

40,480.18

ii) Goods and Service Tax (as per ruling of Delhi Authority of Advance Ruling, The MoHUA, Govt. of India is not exempt from payment of GST on sale of Commercial built-up space, as it does not relate to any function entrusted to a municipality under article 243w of the Constitution and the Company is also liable to pay GST on sale of Commercial built-up area which is recoverable from customer as per terms of sale). (Refer Note 41(A)(b)(iii) above).

2,205.36

2,205.36

(C) Commitments : Capital commitment for Construction & development of capital asset is ' 1,007.95 lakh (P.Y. NIL). (Refer Note 3 Capital Work in Progress)

A) Proposed Final Dividend ' 0.54 per share on face value of ' 1.00 per share (P.Y. ' 0.50 per share on face value of ' 1 per share).

B) Proposed Dividend is subject to approval of Shareholders in ensuing annual general meeting of the Company.

C) Company declared dividend during Financial Year 2018-19 and DDT liability was accordingly discharged. Subsequently Company received dividend from its subsidiary which was eligible for deduction u/s 115-O of Income Tax Act, 1961. Accordingly, Company claimed deduction for the same in the Income Tax Return for Financial Year 2018-19 and refund for the same has been received during Financial Year 2022-23.

3. Relationship with Entities Details of Subsidiaries

NBCC Services Limited (NSL)

NBCC Environment Engineering Limited (NEEL)

NBCC International Limited (NIL)

Hindustan Steelworks Construction Limited (HSCL)

HSCC (INDIA) Limited (HSCC)

NBCC DWC LLC- Dubai

The Company is a government Company under the aegis of Ministry of Housing and Urban Affairs. 61.75% of the share holding in the Company as at March 31, 2023 (March 31, 2022 61.75%) is held by President of India.

The Company is having Five fully owned subsidiaries and One partly owned subsidiary over which government exercise direct/ indirect control by holding more than 50% of the voting power.

In accordance with para 25 of Indian Accounting Standard (Ind As - 24) Related Party Disclosure, no disclosure is required for Subsidiary Companies/ Joint Venture Entities which can be treated as state controlled enterprises ( i.e ownership by Central/ State Government, directly or Indirectly, is more than 50% of voting rights )

The Company generally enter into transactions with the subsidiary companies at arm's length price in the normal course of business which includes the purchase and sale of properties, rendering of services, receipt of services and secondment of employees.

The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due

(ii) Practical Expedients Applied

In applying Ind-AS 116 for the first time, the Company has used the following practical expedients permitted by the standard:

a) The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.

b) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than or equal to 12 months of lease term on the date of initial application.

c) The use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease and excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.

d) Applied the practical expedient to grandfather the assessment of transactions lease. Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.

The Company has total commitment for short-term leases of ' 11.48 lakh as at 31st March, 2023 (' 35.86 lakh as at 31st March, 2022)

Note - 45

Disclosure as per Indian Accounting Standard (Ind AS) 108 "Operating Segments"

a) Operating Segments

Management currently identifies the Company's three service lines as its Operating Segments as follows:- Project Management Consultancy ( PMC )

- Real Estate

- Engineering, Procurement and Construction ( EPC )

b) Segment Revenue & Expenses

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

c) Segment Assets & Liabilities

Segment Assets & Liabilities include the respective directly identifiable to each of the segments.

These Operating Segments are monitored by the Company's chief operating decision maker and strategic decisions are made on the basis of segment Operating Results. Segment performance is evaluated based on the profit of each segment.

The following tables present Revenue and Profit Information and certain Assets and Liability information regarding the Company's reportable segments for the years ended March 31, 2023 and March 31, 2022:

The carrying amount of Trade Receivables, Trade Payables and Cash & Cash Equivalent are considered to be the same as their Fair Values due to their short term nature

The carrying amount of the Financial Assets and Liabilities carried Amortised Cost is considered a reasonable approximation of Fair Value.

The above table excludes Investment in Subsidiaries, Associate and Joint Venture, which are measured at cost in accordance with Ind AS 27, 'Separate Financial Statements'.

(i) Fair Value Hierarchy

Financial Assets and Financial Liabilities measured at fair value in the Balance Sheet are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: The fair value of Financial Instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates

• Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

The following table shows the Levels within the hierarchy of Financial Assets and Liabilities measured at Fair Value on a recurring basis at March 31, 2023 and March 31, 2022:

(iii) Valuation Technique used to determine Fair Value

Specific valuation techniques used to value Financial Instruments includes the use of Net Asset Value for Mutual Funds on the basis of the statement received from investee party.

Note -47

Financial Risk Management

The Company's activities expose it to credit risk, liquidity risk and market risk. The Company's Board of directors has overall responsibility for the establishment and oversight of the Company's risk management framework. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the Financial Statements.

(A) Credit Risk

The Company is exposed to credit risk from its Operating Activities (Primarily Trade Receivables) and from its Financing Activities including Deposits with Banks, Mutual Funds and Financial Institutions and other Financial Instruments.

(i) Credit Risk Management

The Company assesses and manages credit risk of Financial Assets based on following categories arrived on the basis of assumptions, inputs and factors specific to the class of Financial Assets.

A: Low Credit Risk on financial reporting date

B: Moderate Credit Risk

C: High Credit Risk

In respect of Trade Receivables, the Company recognises a provision for lifetime Expected Credit Loss.

Based on business environment in which the Company operates, a default on a Financial Asset is considered when the counter party fails to make payments within the agreed time period as per contract or decided later based upon the factual circumstances on case to case basis. Loss rates reflecting defaults are based on actual credit loss experience and considering differences between current and historical economic conditions.

During the current Financial Year, the Company has identified certain debtors where the management has assessed substantial increase in credit risk. Following the prudent accounting practices and as per the accounting policy, the Company has made a provision of ' 22,414.91 lakh upto March 31, 2023 (Upto March 31, 2022'22,820.33 lakh) on the net exposure of the trade receivables and corresponding trade payables where the Company has legally enforceable right to adjust the same.

Assets are written off when there is no reasonable expectation of recovery, such as a litigation decided against the Company. The Company continues to engage with parties whose balances are written off and attempts to enforce repayment. Recoveries made are recognised in Statement of Profit and Loss.

The Company's principal sources of liquidity are Cash and Cash Equivalents which are generated from Cash Flow from Operations. The Company has no fund based outstanding Bank Borrowings. The Company considers that the Cash Flows from Operations are sufficient to meet its current liquidity requirements.

Maturities of Financial Liabilities

The tables below analyse the Company's Financial Liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is insignificant.

The Company's exposure towards Price Risk arises from Investments held and classified in the Balance Sheet either as Fair Value through Other Comprehensive Income or at Fair Value through Profit & Loss. To manage the price risk arising from investments in equity securities, the Company diversifies its portfolio of assets.

Note - 48

Capital Management

The Company's objectives when managing capital are to:

(i) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and

(ii) Maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt (net debt comprises of borrowings less cash and cash equivalents). Consistent with others in the industry, the Company monitors capital on the basis of the following gearing ratio.

The Company has no outstanding fund based debt as at the end of the respective years. Accordingly Company has NIL Capital gearing ratio as at March 31, 2023 and March 31, 2022.

Note - 49

Revenue from Contracts with Customers :

Significant changes in contract Assets and Liabilities :

(a) Contract Liabilities - Deferred Income (Revenue Received in Advance):

Invoicing in excess of revenue recognised is classified as revenue received in advance. Any amount previously recognised as revenue received in advance is recognised to revenue on satisfaction of the performance obligation over the construction period.

(c) Contract Assets - Unbilled Revenue:

Invoicing to the clients is based on milestones as defined in the contract. This would result in the timing of revenue recognition being different from the timing of billing the customers. Revenue in excess of billing is recorded as unbilled revenue and is classified as a contract asset. Any amount previously recognised as a contract asset is reclassified to trade receivables on satisfaction of the condition attached i.e. future service which is necessary to achieve the billing milestone.

(e) Revenue Recognised in relation to Contract Liabilities :

Disclosure pursuant to para 116(b) & (c) of Ind AS 115 in respect of 'revenue recognised in the reporting period that was included in the contract liability balance at the beginning of the period' and 'revenue recognised in the reporting period from performance obligations satisfied (or partially satisfied) in previous periods are as below:

(g) Performance obligations and remaining performance obligations :

Applying the practical expedient as given in Ind AS 115, the Company has not disclosed the remaining performance obligation related disclosures for contracts as the revenue recognized corresponds directly with the value to the customer of the entity's performance completed to date. Remaining performance obligation estimates are subject to change and are affected by several factors, such as changes in the scope of contracts, periodic revalidations, terminations, adjustment for revenue that has not materialized as at the reporting date.

Inventory Disclosures

LAND BANK

The Company is carrying inventory of 15 Lands of ' 61,873.20 Lakh for over 8 years. These lands are purchased for Real Estate

Development. However, due to slowdown in real estate market, the Company has deferred its plans to develop some of the

lands. Further following lands are not registered in the name of the Company:

(i) Land at Naya Raipur, Chattisgarh

The Company has purchased a Group Housing Plot admeasuring 30,436 Sqm. in Naya Raipur from Naya Raipur Development Authority (NRDA) on lease for a total sum of ' 2,099.37 Lakh in the year 2014. As per the terms of allotment, the lease/conveyance deed shall be executed between the owners association/housing society and NRDA once all the units are sold and all obligations as per the development agreement signed between the Company and NRDA are fulfilled. However, the construction on the said land was kept in abeyance upto previous Financial Year. The Company has decided for development of land. Accordingly, the Building permission fees and security deposit for RWH has been deposited to the Authority to get the approval. The preliminary fire NOC has also been obtained. Further market survey to explore the market feasibility and demand at the location is being carried out for development of the plot. The development of plot may start in next Financial Year given the favorable conditions of the market.

(ii) Land at Faridabad

The Company purchased a freehold plot admeasuring 16,753.99 Sqm. for group housing in open auction from Municipal Corporation of Faridabad (MCF) for a total sum of ' 13,178.41 Lakh (Including provision of Stamp Duty) in the year 2013. The Company has paid full consideration and has taken the possession of land. The Company has been pursuing MCF for execution of lease deed but till date the same has not been executed for want of environment clearance. The Company has applied for environment clearance for which obtaining NOC from Forest Department is necessary. Accordingly, the Company applied for NOC from Forest department, however the same is denied on the ground that "the criteria for clarification of deemed forests is pending before the Hon'ble Supreme Court and Govt. of Haryana has not identified deemed forests". Whereas in Clause No. 24 of letter of allotment of land, the MCF stated that, "Deputy Conservator of Forests, Faridabad vide her office memo no. 569 dated August 28, 2012 has intimated that the area under Group Housing plots is notified under general section-4 of Punjab Land Preservation Act, 1900". Thus, denial of NOC by Forest Department is contrary to what is contained in Letter of Allotment. Company has taken up the matter with Government of Haryana to either issue necessary instructions to Forest Department for issuing of NOC as required for Environmental Clearance or refund the amount paid with interest to Company. The Company is exploring the possibility of early execution of lease deed from MCF or referring the matter to AMRCD for early resolution.

Work in progress and completed projects

(iii) NBCC Plaza at Pushp Vihar

The Company has undertaken a project for construction of "Additional Shopping cum Car Parking Blocks" in "NBCC Plaza" at Pushp Vihar, New Delhi and has paid a sum of ' 3,021.78 Lakh to Land & Development Office (L&DO), Ministry of Housing & Urban Affairs (MoHUA) in the year 2010 as additional premium for availing additional ground coverage (FAR). However, later Municipal Corporation of Delhi (MCD) erstwhile South Delhi Municipal Corporation (SDMC), vide its letter dated May 20, 2015, while approving the building plans subject to compliance of few conditions, demanded additional FAR charges amounting to ' 3,224.45 Lakh. The MCD also stayed the construction till the time, said amount is paid to them. Since the Company had already deposited the said amount with L&DO, it represented the matter to MCD as well as L&DO, at different forums. MoHUA also directed MCD to release the sanctioned building plan to Company at the earliest. However, the MCD is still insisting on payment of additional FAR of ' 3,224.45 lakh to sanction building plan. A Joint meeting was held on July 04, 2022 which was attended by all the stakeholders (L&DO, NBCC, DDA & MCD) to deliberate on the issue. It was concluded that MCD should entitled to such Additional FAR charges and the amount already paid towards additional FAR charges shall be returned by L&DO to the Company so that requisite amount demanded by MCD could be paid. Though, the Minutes of the said meeting are still awaited, Company has taken up the matter with L&DO to refund the said amount. However L&DO vide letter dated May 22, 2023 has refused to refund the amount paid by the Company. Company has again requested to L&DO vide letter dated May 26, 2023 to settle the matter as additional FAR charges already been deposited with L&DO and additional demand of MCD for ' 3,224.45 Lakh shall be dual charging of same component by two different authorities, accordingly MCD may be directed to withdraw its demand and release the sanction plan. The response of the same is awaited from L&DO.

In addition to the above, the Company has incurred a sum of ' 1,718.84 lakh on construction of the project till March 31, 2023. The net realisable value (NRV) of the constructed block is ' 1,075.00 lakh. The Company has already made a provision in the books for impairment in the value of assets amounting to ' 643.84 lakh.

(iv) Kochi, Kerala

The Company has constructed Group Housing Real Estate project at Kochi, Kerala comprising 3,20,216 Sq. ft. residential and 4,424 Sq. ft. commercial area. The Company has incurred a total cost amounting ' 8,719.13 lakh thereon upto March 31, 2023. The sale in the project is pending for want of environmental clearance (EC) and other necessary statutory approvals. However, RERA registration for the project has been received on the basis of available documents. The Company expect to receive environmental clearance (EC) soon as the process is in advance stage and Terms of Reference (TOR) was received on November 03, 2022 for submission of requisite information & reports to State Environment Impact Assessment Authority (SEIAA) for approval of plan. The damage assessment plan was submitted on November 23, 2022 and case was discussed in 137th State Expert Appraisal Committee (SEAC) meeting held on January 24, 2023 & January 25, 2023 for issuing the environmental clearance (EC). SEAC chairman and member also inspected the project site in respect of environmental clearance (EC) on March 31, 2023.

Based on said inspection, case of environmental clearance (EC) was discussed in 142nd State Expert Appraisal Committee (SEAC) meeting held on May 11, 2023. Based on the said meeting minutes issued on May 24, 2023 in which SEAC has asked to submit revised EIA along with damage assessment plan through Parivesh portal. The damage assessment plan is being prepared by considering 1% penalty on project cost. i.e. ' 87.90 lakh. The penalty amount may change based on decision of SEAC committee at the time of hearing. The bank guarantee for final penalty amount shall be submitted by Company on finalization of penalty by SEAC committee. It shall be utilized for in three consecutive years based on direction from SEAC and accounted for in accordance with accounting principles.

(v) Jackson Gate, Agartala

The Company executed a real estate project at Jackson Gate, Agartala in the year 2010 under Joint Operations with Agartala Municipal Council (AMC). As the Company was unable to sell the constructed area, the substantial portion of the constructed area has been let-out to various Government Organizations. Company is exploring the possibilities to sell the same in consultation with Joint Operator (AMC). The Company has incurred a sum of ' 916.96 lakh as on date. Joint Operator (AMC) is yet to issue OC/CC certificate post which RERA formalties will be done and sales will be opened/ launched.

(vi) Group Housing project in Alwar

The Company has executed Group Housing project in Alwar with a total expenditure of ' 5,766.21 Lakh upto March 31, 2023. The substantial portion of the project was completed in the year 2018. The Company initiated the sale of the project in the year 2014-15. No sale, however, could be effected. The Net Realisable Value of the project has deteriorated and the Company has made provision of ' 641.21 lakh towards impairment upto March 31, 2023. The completion certificate of the project has been obtained and accordingly RERA registration/exemption has been initiated by the Company. Sale in the project shall be opened after receipt of necessary clearances from RERA.

(vii) Sukheas Lane, Kolkata

Sukheas Lane, Kolkata property is Joint Venture Property with Kolkata Metro Rail Corporation Limited (KMRCL) located in the city centre of Kolkata. The construction on the property is not completed from long time due to pendency of writ Petition no. 833/2014 before Hon'ble High court of Calcutta since the year 2014 challenging the aforesaid land acquisition by KMRCL. The said writ petition filed by M/s Archana Properties was disposed off on January 09, 2020 due to default of non-appearance of petitioners by the Hon'ble High Court of Calcutta. In this regard an IA bearing GA No 3/2021 have been filed by M/s Archana Properties in the matter in March 2021 as per website of Hon'ble High Court

of Calcutta. However, the said IA has neither been served nor has any notice been received by Company as on date from the Hon'ble High Court of Calcutta. The Company has incurred a sum of ' 549.59 lakh on this project which are lying since 2014.

(viii) Sector - 37 D, Gurugram

The Company developed a residential real estate project at NBCC Green View, Sector - 37 D, Gurugram. The occupancy certificate (OC) of the project was received in the year 2017-18. The complex is partially sold-out and the physical possession of flats, shops and EWS unit were also given to the allottees after receipt of the Occupancy Certificate of the project.

Company has sold 392 units (255 flats, 126 EWS and 11 shops) out of 942 units and had received total amount of ' 21,012.80 lakh out of which ' 15,957.58 lakh were recognised as revenue in the previous years and ' 4,048.57 lakh were booked as advance from Allottees till March 31, 2022.

Subsequently, the buildings in the project exhibited structural cracks. Company received many complaints and representation from some of home buyers. Company appointed IIT Delhi to look into the matters. IIT Delhi vide its report dated October 06, 2021 inter-alia advised that the buildings must be vacated within two months in view of safety of the occupants and further advised to get the feasibility of repairs re-examined.

Thereafter a committee of experts from IIT Roorkee and CBRI Roorkee (Central Buildings Research Institute) was constituted for structural assessment of this project in furtherance to the report of IIT Delhi. This expert committee opined that "No repair/restoration method seems economically viable and safe in the long term. It is recommended to demolish the structure"

Further a review panel of two retired SDG's of CPWD was constituted which also concurred with recommendation given by the expert committee.

In view of the advice from the experts and considering safety of the residents, the buildings were evacuated completely with the help of the District Administration under Disaster Management Act.

The Company in its 513th Board meeting held on June 21, 2022, has accorded the approval to settle with all the homebuyers/allottees by way of buyback of their flats/units by paying the total amount received from the allottees against sale of flats/units amounting to ' 21,012.80 lakh and the cost of Stamp duty & registration charges paid by them amounting to ' 973.73 lakh. Accordingly, the offer letter for buyback of their flats/EWS units/shops was communicated to all homebuyers/allottees through post as well as through mail.

In view of the uninspiring response from the buyers against the first buyback offer of the Company, Board in its 522nd meeting held on January 27, 2023 decided to reconsider the same in order to arrive at an amicable settlement. Accordingly, the Board of Directors has accorded in principal approval to settle with all the homebuyers/allottees by way of buyback of their flats/units by paying settlement amount to ' 25,609.00 lakh (approx) including cost of Stamp duty & registration charges to homebuyers/allottees as per defined categories. In addition to this ' 1,354.00 lakh (approx.) estimated to be incurred towards cost of Stamp duty & registration charges for execution of title deed of flats/units in the favor of Company. Accordingly, the revised offer letter for buyback of their flats/EWS units/shops was communicated to all homebuyers/allottees through post as well as through mail.

In view of the above, and to comply with the provisions of Ind AS 37, the Company has made a provision for expected loss of ' 16,060.86 lakh against sale of flats/ units, towards cost of Stamp duty & registration charges for execution of title deed of flats/units in the favor of Company at the year ended on March 31, 2023.

Further, in addition to above, ' 119.84 lakh has been written off from Trade Receivables towards outstanding dues of Maintenance, water and electricity charges from the homebuyers/allottees of the said project for the year ended March 31, 2023 (Refer Note 37 Exceptional Item).

Futher, during the year Company has spent total amount of ' 812.86 lakh (' 562.00 lakh for buyback of flats/units & ' 250.86 lakh against refund of advance received from allottee). The proportionate Net Realizable Value (NRV) to the units/flats received against this payment is ' 184.98 lakh. Accordingly, inventory amounting to ' 377.02 Lakh has been written down in the year ended on March 31, 2023 (Refer Note 9 Inventories & Note 37 Exceptional Item).

Further, as per valuation report, the total Net Realizable Value (NRV) of the project is ' 27,475.00 lakh (on conservative basis) as at March 31, 2023. The proportionate NRV pertaining to the unsold portion of the project is ' 20,660.80 lakh. Since the carrying value of unsold inventory of above project was ' 20,336.62 lakh. Accordingly, the Company has made reversal of write down of inventory by ' 324.18 lakh in the year ended on March 31, 2023 (Refer Note 9 Inventories & Note 37 Exceptional Item).

A recovery suit has been filed in the Hon'ble High Court of Delhi, "NBCC (India) Ltd versus Ramacivil India Construction (P) ltd. and ors. Vide CS (Comm.) No. 153 of 2023" for recovery of ' 75,000.00 Lakh in the matter of NBCC Greenview Sec 37D, Gurugram, Haryana. The matter is sub judice. Company has deposited ' 732.15 lakh for court fees and the said amount has been recorded as expenses in the books of accounts. (Refer Note 37 Exceptional Items)

As on date, there are 21 ongoing litigations before various forums for refund of the amount paid by homebuyers/allottees along with interest and other compensations and also by contractor for various claims. However, since the matter is sub judice and is pending at various forums and the costs and liabilities (if any), that may possibly be incurred towards interest and other compensations are not ascertainable as on the date, hence, no provision for the same is provided in the year ended on March 31, 2023. (Refer Note No 41(A)(d)). However, claims of homebuyers/allottees and contractor which is sub judice and is pending at various forums amounting ' 6187.20 lakh has been included in Contingent liability (Refer Note No 41(A)(a)).

Note -54

Other Disclosures

(a) Additional Informations in pursuance to Schedule III Division II is disclosed as under:

(i) The Company has not been declared a Wilful Defaulters by any bank or financial institution or consortium thereof in accordance with the guidelines on Wilful defaulters issued by the RBI.

(ii) There are no proceedings initiated or pending against the Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

(iii) The Company has not traded or invested in Crypto currency or virtual curreny during the reporting periods.

(iv) The Company has neither advanced, loaned or invested fund nor received any fund to/from any person or entity for lending or investing or providing guarantee to/on behalf of the ultimate beneficiary during the reporting periods.

(v) During the Financial Year, there is no charge or satisfaction of charge which is yet to be registered with ROC beyond the statutory period.

(vi) The Board of Directors of the Company on July 06, 2020 approved a scheme of merger in terms of Section 230-232 of the Companies Act, 2013 in respect of two wholly owned Subsidiaries with Holding Company i.e. Merger of NBCC Environment Engineering Limited (Transferor Company No. 1) and NBCC International Limited (Transferor Company No. 2) with NBCC (India) Limited (Transferee Company). However, Company in its Board meeting dated July 14, 2022 had decided to withdraw the scheme of merger, and the Ministry of Corporate Affairs (MCA) had also closed the application of the aforesaid merger vide letter dated August 04, 2022. Accordingly, for the FY 2022-23 till March 31, 2023 the Company has not entered into any scheme of arrangement in terms of sections 230 to 237 of the Companies Act, 2013.

(vii) The Company does not have any transaction not recorded in the books of accounts that has been surrendered or not disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

(viii) Pursuant to Rule 2(2)(d) of the Companies (Restriction on number of Layers) Rules, 2017, the requirement of number of layers not applicable to the Company.

(ix) The Company has not taken any Fund based loan / limit from banks or financial institutions on the basis of security of current assets. Hence, the use of borrowing for specific purpose not applicable to the Company.

(b) The major clients of the Company are ministries, Government Departments, Government Authorities and Public Sector Undertakings. The balances of the clients in the nature of Trade Receivables, Loans and Advances, Earnest Money

Deposit, Security Deposit and Deposits in the nature of trade receivables classified under current and non current assets; and also the trade payables are subject to confirmation, reconciliation and consequent adjustments. The management does not expect any significant impact upon such reconciliation.

(c) Advance to Ghaziabad Development Authority (GDA) for Land at Koyal Enclave Ghaziabad:

The Company purchased a land admeasuring 16,225.05 Sq. Mtr. at Koyal Enclave from Ghaziabad Development Authority (GDA) in the year 2015. The Company has incurred a total cost of ' 5,503.13 Lakh (Including provision for stamp duty). The lease deed and the possession in respect of the above plot have not yet been executed. GDA has demanded a sum of ' 462.41 Lakh towards infrastructure Charges vide letter No. 2433 dated December 13, 2019. The said demand is not acceptable to the Company and in view of the same, the Company has requested GDA for cancellation of allotment & refund of entire amount with interest as per the terms of allotment etc. GDA has offered to refund the purchased amount after deduction of the cancellation charges. The Company has not accepted the offer of GDA and taken up the matter with higher authorities of Govt. of Uttar Pradesh.

Consequent to opinion taken from The Expert Advisory Committee of Institute of Chartered Accountants of India, the Company has transferred the amount paid to GDA from Land Inventory (Inventories) to advance paid for Land (Other Current Assets) and reversed the provision made for Stamp duty under taxes payable (Other Current Liabilities) in current year and previous year figures also regrouped accordingly.

(d) The Company has acquired a 100% stake in HSCC (India) Limited (HSCC) by paying ' 28,500.00 lakh to the Government of India during FY 2018-19. As of March 31, 2023, the Net Asset Value of HSCC is lower than the carrying amount of the Company's investment. The subsidiary has consistently generated profits, paid dividends to the Company, and experienced an increase in its Net Asset Value since the acquisition. Considering the revenue projections, existing order in hand, anticipated future profitability, and the liquidity position, the management is confident that the Net Asset Value of the subsidiary Company will improve and eventually match the carrying value of the investment.

(e) The spread of COVID - 19 pandemic has impacted businesses around the globe. In many countries, including India, there have been disruptions in regular business operations due to Lockdown. During the Previous year, the country was in partially in lockdown and the Company temporarily suspended its operations in all its offices, in compliance with the Lockdown advisory issued by Central / Respective State Government. As a result of Lockdown, the volumes for the previous year have been partially impacted.

Note -55

Events After Balance Sheet Date

Proposed Final Dividend of ' 0.54 per equity share on face value of ' 1.00 per equity share (Previous year ' 0.50 per equity

share on face value of ' 1.00 per equity share) for the Financial Year 2022-23 which is subject to approval of shareholders in

ensuing annual general meeting of the Company.

Note -56

Regrouping / Reclassified

Previous year figures have been regrouped and/or reclassified, wherever considered, necessary to conform to those of the

current year grouping and/or classification. Negative figures have been shown in brackets.

 
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