as simple as a, b, c, d!

As simple as A, B, C, D!

Annual Report 2008-09Nagarjuna Construction Company Limited

An ISO-9001-2000 Companywww.ncclimited.com

Insidethe report…

Disclaimer In this Annual Report we have disclosed forward-looking

information to enable investors to comprehend our prospects

and take informed investment decisions. This report and

other statements – written and oral – that we periodically

make contain forward-looking statements that set out

anticipated results based on the management’s plans and

assumptions. We have tried wherever possible to identify

such statements by using words such as ‘anticipates’,

‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’

and words of similar substance in connection with any

discussion of future performance.

We cannot guarantee that these forward-looking statements

will be realised, although we believe we have been prudent

in assumptions. The achievement of results is subject to

risks, uncertainties and even inaccurate assumptions.

Should known or unknown risks or uncertainties materialise,

or should underlying assumptions prove inaccurate, actual

results could vary materially from those anticipated,

estimated or projected.

We undertake no obligation to publicly update any forward-

looking statements, whether as a result of new information,

future events or otherwise.Corporate Information 1Corporate Ethos 4From strength to strength 6From the desk of Chairman Emeritus 8Strength in our numbers 10Q&A with the Managing Director 18Business segment review 22Directors’ Report 38Management Discussion 48and Analysis

Corporate Governance Report 57Standalone Financial Statements

Auditors’ Report 72Financial Statements 76Accounting Policies and 90Notes on Accounts

Balance Sheet Abstract 106Consolidated Financial Statements


A PRODUCT

[email protected]

www.kalajyothi.com

Regional OfficesAhmedabad

211-212, Sarthik – II

Opp. Rajpath Club

Sarkhej Gandhi Nagar Highway

Ahmedabad- 380 054

Tel.: 91-079-26871478/79

Email: [email protected]

Bangalore301 Batavia Chambers,

8 Kumara Krupa Road,

Kumara Park East,

Bangalore – 560 001

Tel.: 91-80-22258991


BhopalPlot No-25, Deepak Housing Society

Kolar Road , Chuna Bhatti,

Bhopal – 462 016

Tel.: 91-0755-2428784


Bhubaneswar3rd Floor

98, Keshari Complex

Kharavela Nagar,

Bhubaneswar - 751001

Tel.: 0674-2393059


ChennaiNo.190 A, 7th & 8th Floors,

Pettukola Towers,

Poonamalle High Road,

Kilpauk, Chennai – 600 010

Tel.: 91-44-25323030


Delhi9th Floor, JMD Regent Square,

DLF Qutub Enclave Phase - II,

Mehrauli-Gurgaon Road,

Gurgaon – 122 022, Haryana

Tel.: 91-124-2357 493/494/59


KolkataB-F-10, Sector-1, Salt Lake,

Kolkata – 700 064

Tel.: 91-33-23348213


KochiG-183, Panampally Nagar,

Kochi – 682 036 , Kerala

Tel.: 91-0484-2324721


LucknowA 3/171, Vishal Khand,

Gomthi Nagar,

Lucknow – 226 010

Tel.: 91-0522-2394418


MumbaiB-402 Dipti Classic

Off. M. V. Road, Suren Lane,

Andheri (E), Mumbai – 400 093

Tel.: 91-022-26826790 Ext.110


Ranchi351-A, Road No.5

Ashok Nagar, Ranchi – 834 002

Tel.: 91-0651–2241818


Overseas OfficesDubai

Nagarjuna Contracting Company LLC

Al-Attar Tower Sheikh Zayad Road

Post No-117333

Dubai-(UAE)

Tel.: 00971-4-3250052

MuscatNagarjuna Construction Company

International LLC

P O Box 3678, PC 112

RUWI, Sultanate of Oman

Tel.: 0096824600329

Board of DirectorsSri P. Abraham, IAS (Retd.)Director

Sri P. C. LahaDirector

Sri S. VenkatachalamDirector

Sri R. V. ShastriDirector

Sri A. J. JaganathanAdditional Director

Sri Rakesh JhunjhunwalaDirector

Sri Akhil GuptaNominee DirectorM/s. Blackstone

Sri Amit DixitAlternate Director to Sri AkhilGupta

Sri N. R. AlluriDirector

Sri J. V. Ranga RajuWholetime Director

Dr. A V S Raju, Chairman Emeritus

Registered office41, Nagarjuna hills,Punjagutta,Hyderabad-500 082Tel: +91 40 2335 1753Fax: +91 40 2335 0214www.ncclimited.com e-mail: [email protected]

Registrar and ShareTransfer AgentsM/s. Sathguru ManagementConsultants Pvt. LtdPlot No.15, Hindi Nagar,Punjagutta,Hyderabad-500 034Tel: 040 – 23356507Fax: 040 – 40040554e-mail: [email protected]

Joint Statutory Auditors1) M/s. M. BhaskaraRao & CoChartered Accountants,6-3-652, 5-D, Fifth Floor‘KAUTILYA’, Amrutha Estates,Somajiguda,Hyderabad-500 082

2) M/s. Deloitte Haskins& SellsChartered Accountants,Gowra Grand3rd Floor, 1-8-384 & 385,S.P Road, Begumpet,Secunderabad-500 003

BankersState Bank of IndiaCanara BankAndhra BankState Bank of HyderabadSyndicate BankIndian Overseas Bank Allahabad BankICICI BankStandard Chartered Bank

19th Annual GeneralMeeting on Thursday, 30th July, 2009

at 3.00 pm at Bharatiya

Vidya Bhavan,

5-9-1105, Basheerbagh,

King Koti,

Hyderabad-500029

Sri R. N. RajuWholetime Director

Sri A. V. N. RajuWholetime Director

Sri A. S. N. RajuWholetime Director

Sri A. G. K. RajuExecutive Director

Sri A. A. V. Ranga RajuManaging Director

Company Secretary andVice President (Legal)Sri M. V. Srinivasa Murthy

Corporate Information

2 Nagarjuna Construction Company Ltd.

Over the last year,a number of ourshareholders haveasked: Do we possess themettle to counterthe economicslowdown?

3Annual Report 2008-09

Our answer is assimple as A, B, C, D.Ability to Beat theCurrent Downturn.

40%Compounded

annual growth rate(CAGR) over thefive-year period

leading to 2008-09

45%Compounded


leading to 2008-09

41%Compounded


leading to 2008-09

37%Compounded


leading to 2008-09

21%Compounded

annual growth rate(CAGR) over thefive-years period

leading to 2008-09

38%Compounded


leading to 2008-09

Revenue (gross)

EBIDTA Profit before tax

Profit after tax

Book value per share

Order inflow


A position ofstrength

Strong pillars of our philosophy

To be a world-class construction and

infrastructure enterprise committed to

quality, timely completion, customer

satisfaction, continuous learning and

enhancement of stakeholders’ value.

Values Openness and trust

Integrity and reliability

Team work and collaboration

Commitment

Creativity

Quality policyNagarjuna Construction Company

strives to achieve enhanced customer

satisfaction by delivering the quality

products through timely completion

with safe working environments.

We dedicate ourselves for continual

improvement in all fields of our

business.

Vision

To build a strong future ensuring increased returns to

shareholders and enhanced support to associates

To adopt the latest technologies in the field of

engineering, construction, operation and maintenance

of infrastructure projects

To encourage innovation, professional integrity,

upgradation of knowledge and skills of employees and

a safe working environment

To be a responsible corporate citizen committed to

the social cause

Mission

To consistently deliver quality products by adhering to the set specifications,

contractual, regulatory and statutory requirements

To achieve enhanced customer satisfaction through cost-effective and timely

completion

To motivate and train the staff for continual improvement of quality standards

To update and implement the procedures complying with international standards

Quality objectives

Strong numerical growth


54,250 Rs.

million

New projectsbagged

3,895As on

31st March 2009

Teamstrength

41,556 For the financial

year 2008-09

Rs.

million

Revenue(gross)

1,539 For the financial

year 2008-09

Rs.

million

Post-tax profit

121,970 As on

31st March 2009

Rs.

million

Order bookvalue

1.10

For the financialyear 2008-09

Rs.

(on face value of

Rs. 2 per equity share)

Dividend pershare*

Strong sense of identity Three decades-rich track record in asset and nation

building

Diversified business portfolio; present across 10 industry

sectors comprising buildings and housing, transportation,

water and environment, irrigation, electrical, oil and gas,

metals, power, mining and international

Focused division for capitalising on international

construction opportunities

Enjoys a strong, experienced and dedicated management

team, backed by a skilled workforce

Strong client portfolio National Highways Authority of India (NHAI)

State Public Works Departments (across various Indian states)

Karnataka Road Development Corporation

Irrigation and CAD departments (various Indian states)

Hyderabad Metropolitan Water Supply and Sewerage Board

Gujarat Water Supply and Sewerage Board

Chennai Metropolitan Water Supply and Sewerage Board

State Electricity Board (across various Indian states)

Government of West Bengal, PHE Office

Sahara India Commercial Corporation Limited

Hindustan Aeronautics Limited

Bharat Heavy Electricals Limited

National Thermal Power Corporation Limited

Reliance Industries Limited

Karnataka Housing Board

Andhra Pradesh Housing Board

Sports Authority of Andhra Pradesh

Zuari Cements

Bennett, Coleman & Company Limited

Patni Computers

Delhi Metro Rail Corporation Limited

Sriram Properties Private Limited

Reserve Bank of India

Muscat Municipality, Sultanate of Oman

Steel Authority of India Limited

Wipro Limited

Armed Forces Medical College

The Singareni Colleries Company Limited

National Institute of Technology

Volks Wagen (I) Pvt. Limited

Strong industry presence Headquartered at Hyderabad, Andhra Pradesh

Extensive regional presence with offices in Delhi,

Ahmedabad, Bhubaneswar, Kolkata, Mumbai, Bhopal,

Lucknow, Chennai and Bangalore

International footprint with offices in Dubai (United Arab

Emirates) and Muscat (Sultanate of Oman)

Listed on the National Stock Exchange (NSE) and Bombay

Stock Exchange (BSE) in India

Listing of the Company’s GDRs on the Luxembourg Stock

Exchange

During 1st April, 2008 to31st March 2009


1999National Aluminium

Company (NALCO)

awarded Nagarjuna a

safety certificate for

maintaining the highest

safety standards, while

constructing a factory in

Damanjodi, Orissa.

2002Award for ‘Outstanding

concrete structure of the

year’ conferred by the

Indian Concrete Institute in

2002 for Shilpakala Vedika,

state-of-the-art auditorium

at Hyderabad.

2003Award for ‘Outstanding

concrete structure of the

year’ for the main athletic

stadium at Gachibowli,

Hyderabad, awarded by

the Indian Concrete

Institute.

Fromstrengthtostrength


2004Award for ‘Excellent

aesthetics matching with

environment’ given by the

Indian Institute of Bridge

Engineers for the

Company’s project in Latur

(Maharashtra) comprising a

flyover, bridge, pedestrian

subway and allied

structures.

2005The only Indian construction

company to figure in Forbes

Asia’s 200 ‘Best Under A

Billion’ list in the Asia-Pacific,

2005.

2006Fastest growing

construction company in

India according to

Construction World-

NICMAR.

2007Declared the ‘Second

largest construction

company in India’ by

Construction World-

NICMAR.

Investment of USD 100

million in our equity capital

by the Blackstone Group,

a leading private equity

investment firm based in

New York.

2008Declared as one of the

most admired companies

in India by Construction

World-NICMAR

Commenced the mining

division

2009Order book crossed

Rs.12,000 crores

I derive a deep sense of pride in stating that Nagarjuna

Construction Company Limited serves India’s critical need for

quality infrastructure.

Today, we are present in 120 project locations across India –

one of the largest by any company in our space – helping

catalyse the national growth engine. This strong country-

company linkage has reinforced our ability to counter the

downturn, reflected in the following numbers in a challenging

year:

Built to surviveWe have created a business model relevant for all market

cycles through the following initiatives:

Retained our industry pre-eminence through quality services

supported by robust technical capabilities, rich project

management skills and large, complex project execution

Improved the consistency and discipline of our commercial

practices across our business groups; fostered a sense of

healthy competition among them to augment return on capital

employed

Increased our capacity to execute contracts through the

addition of engineers and technical members on the one

hand and the expansion of low-cost fabrication facilities,

engineering and design centre on the other

Strengthened our balance sheet through debt optimisation

and net worth accretion

Reduced overhead expenses as a percent of revenues

through organisational leanness

Pursued continuous improvement in everything we did

Redefining our opportunity landscape We serve the following downstream sectors with robust

prospects that should translate into sustainable growth:

In a May 2007 report, the U.S. Energy Information Agency

(EIA) estimated that the world’s net electricity generation is

expected to grow 85 percent from 2004 (16 billion kilowatt

hours) to 2030 (30 billion kilowatt hours).

In 2008, the world’s urban population outstripped the rural

population for the first time ever. According to a recent report

by the UN Habitat, more than 70 percent of the world’s

population would live in cities by 2050. In India, half the

population is expected to live in cities by 2041 (current urban

population around 30%), according to the World Bank.


From the desk of Chairman Emeritus

Peak order book of

Rs. 12,197 cr as on 31 March 2009, a 7.2 percentgrowth over the same date in 2008.

Increase in EBIDTA (consolidated) by

26.8 percentin 2008-09 through technically advanced services for clients.

Record gross income of

Rs. 4,156 crin 2008-09, a respectable 19 percent

growth over the previous year; aconsolidated turnover of USD 1 billion.


India suffers from a housing deficit of over 25 million units,

which is growing. A massive investment of Rs 361,318 cr is

required to cover this deficit.

The country’s water supply and sanitation market will report

better-than-ever returns supported by two emerging realities:

one, the need to provide access to water and sanitation to

the rural population; two, most of the urban water and

sanitation systems are over a century old and require

replacement with an investment of over Rs 1,38,000 cr over

the decade.

India’s realty market will reach a mind-boggling 40 percent

compounded annual growth rate (CAGR) with a market

potential of Rs 276,000 cr by 2010. A deep hospitality under-

penetration is reflected in the fact that India has 1.1 lakh hotel

rooms, while Shanghai alone has 1.5 lakh hotel rooms.

Way to the future We deliver excellence by enriching a culture where over 4,000

talented and committed Nagarjuna Construction Company

employees enjoy their work and can focus on superior

performance for our clients. In pursuit of this strategy, we will

continue to:

Grow all our business groups organically through the

addition of men and machines

Build capabilities and capacities in our new businesses of

mining and metals and venture into new synergic verticals

Leverage our established position in key technologies; form

alliances with global leaders who can dedicate superior

capabilities in the execution of large and technically

challenging projects, especially at our oil and gas, metals and

mining divisions

Enhance cost-competitiveness across all operations

A sense of optimism I have never been more optimistic about the future of

Nagarjuna Construction. With reinforced strength in our key

markets, defined strategies and continuous improvement in

our capabilities, your Company is poised to post a turnover of

Rs 4,800 cr (standalone) in 2009-10 and retain its position as

one of the top performers in our sector.

In closing, I wish to thank the employees of Nagarjuna

Construction for their skill and dedication. They have worked

hard to deliver value to clients, shareholders and other

stakeholders.

Sincerely,

Dr. A.V.S. Raju

Chairman Emeritus


2004

-05

Rev

enue

s (g

ross

) (R

s. in

mill

ion)

2005

-06

2006

-07

2007

-08

2008

-09

11,9

1218

,425

29,0

0234

,785

41,5

56

2004

-05

EB

IDTA

(Rs.

in m

illio

n)

2005

-06

2006

-07

2007

-08

2008

-09

907

1,64

12,

698

3,59

83,

737

2004

-05

Pos

t-ta

x p

rofit

(Rs.

in m

illio

n)

2005

-06

2006

-07

2007

-08

2008

-09

573

1,03

91,

519

1,64

11,

539

2004

-05

Cas

h p

rofit

(Rs.

in m

illio

n)

2005

-06

2006

-07

2007

-08

2008

-09

682

1,22

11,

818

2,12

32,

072

2004

-05

EB

IDTA

mar

gin

(per

cent

)

2005

-06

2006

-07

2007

-08

2008

-09

7.6

8.9 9.

410

.49.

0

2004

-05

Pos

t-ta

x p

rofit

mar

gin

(per

cent

)

2005

-06

2006

-07

2007

-08

2008

-09

4.8

5.6

5.2

4.6

3.7

Sustainable business model.Strength in our numbers.


2004

-05

Gro

ss b

lock

(Rs.

in m

illio

n)

2005

-06

2006

-07

2007

-08

2008

-09

1,66

52,

569

5,00

76,

620

6,23

3

2004

-05

Deb

t-eq

uity

rat

io

2005

-06

2006

-07

2007

-08

2008

-09

0.2:

10.

2:1

0.6:

10.

56:1

0.73

:1

2004

-05

Boo

k va

lue

per

sha

re (R

s.)

2005

-06

2006

-07

2007

-08

2008

-09

40.9

4 45.6

4 49.7

168

.71 73

.65

2004

-05

Ear

ning

s p

er s

hare

(b

asic

) (R

s.)

2005

-06

2006

-07

2007

-08

2008

-09

4.58

6.04

7.35 7.

516.

72

2004

-05

Div

iden

d (

perc

ent)

* D

ivid

end

on e

nlar

ged

capi

tal a

fter t

he 1

:1 b

onus

.

2005

-06

2006

-07

2007

-08

2008

-09

6080

60*

6555

2004

-05

Ord

er b

ook

(Rs.

in m

illio

n)

2005

-06

2006

-07

2007

-08

2008

-09

35,9

2254

,282

73,0

2111

3,80

0 121,

970


Entrenchingour presence inthe right placeand space.


40

&

percent CAGR growth

in topline over the past

five years leading to 2008-09.

ability agilityA combination of the two – ability and agility – translated into

our growing presence in the regions and sectors at the centre

of growth.

For instance, within a year of starting our mining division, we

received an order worth Rs 360 cr. Within two years of starting

our international projects division, we enjoyed the highest

order book accretion translating into 27 percent of our

organisational order book.

Our alliances with partners possessing manufacturing and

service capabilities helped us scale our presence in key

markets and verticals. We expect to grow rapidly in growing

markets like the Middle East and Gulf Cooperation Council

(GCC), among others, de-risking us in terms of vertical

presence and geography.

The result is that one of our divisions now possesses an order

book of over Rs 3,000 cr; two divisions possess orders worth

over Rs 2,000 cr; two other divisions possess orders worth

over Rs 1,000 cr and two more divisions possess orders worth

over Rs 600 cr.


Deploying newtechnologiesfor customerbenefit.


35

&

percent CAGR growth in

gross block over the past


inventiveness ingenuityA combination of the two – inventiveness and ingenuity –

helped extend our business reach and diversify revenues.

For instance, we created a robust Engineering Design and

Technology Development Centre (EDTD) to reinforce our

competitive edge from the design stage onwards, translating

into efficient and economical project execution. The upcoming

formwork and shuttering facility in Visakhapatnam, being

developed by us in collaboration with a German company, will

enhance product quality.

Besides, our ability to transfer technology learnings – in the

laboratory or on-site – has extended us into new industries.

Our ability to enter into win-win joint ventures with established

technology and equipment owners has catalysed project

quality, strengthening customer relationships.


Helping ourcustomersenhance theircompetitiveness.


37

&

percent CAGR growth in

post-tax profit over the past


reliability relationshipsNagarjuna Construction’s relationship management

commences from on-site collaboration leading to a rich insight

in customer processes and requirements. The result is project

solutions that enhance the customer’s bottomline and grow

customer partnerships. This diversifies our revenues and

enhances our resource utilisation.

The Company has responded to business challenges through

enhanced technology and service capabilities leading to

customer benefit in weak and strong markets. We now enjoy

a track record of helping customers become more profitable.

This has translated into a wider sectoral extension and rapid

business growth.

Q. Some of the world’s major economicregions are experiencing a marked slowdown,which could persist. How is the Companyaffected?

Even as the global economy faced unpredictable

challenges in living memory, India was largely insulated due to

a regulated financial system and a large consumption-driven

economy. However, India is experiencing credit mobilisation

challenges, a general stagger in major capital expansion and

lower consumer spending, affecting the country’s infrastructure

and construction segments. Besides, financial and regulatory

issues have affected land acquisition and utility clearances,

delaying the award of large projects. The result was that

despite targeting a 30 percent turnover growth for 2008-09, we

achieved 20 percent.

P A R T O N E

“Infrastructure creationdrives economicgrowth. Thisrecognition is morerelevant now than everbefore, benefiting NCCover the foreseeablefuture.”


A. A. V. Ranga Raju, Managing Director


Having said this, let me indicate that our operating profit

margin and net profit margin moderated 140 basis points and

90 basis points respectively on account of high debt cost as

well as turnover shortfall. With the new government’s

emphasis on gross capital formation, we expect interest rates

to decline at least 50-100 basis points, optimising our average

debt cost and improving our bottomline.

Q. What were some of the big achievementsin 2008-09?

We focused on cost control, order completion, selective

bidding and commencing activity in new synergic divisions.

Cost containment: We strengthened the bulk acquisition of

raw materials and optimised procurement costs. We

minimised asset idling and reduced equipment lease/hire.

Project completion: We focused on completing existing

orders and preparing ourselves for the upcoming revival.

Overall, we completed and handed over Rs 4,607 cr worth of

projects in 2008-09 with maximum contribution coming from

the buildings segment (28 percent) followed by water and

environment (21 percent) and roads and international projects

(17 percent each).

Order inflow: We built capacities and capabilities to procure

Rs 6,300 cr worth of fresh projects, more than half our order

book. While all divisions will contribute to this growth, the

maximum will come out of buildings, water and environment

and international divisions, enhancing our EBIDTA margin by

at least 50 basis points.

New business: We commenced activity in our mining division

and within the first year of operations, bagged a Rs. 360-cr

order for overburden removal from Singareni Coalfields.

A number of opportunities exist in this space in view of the

government opening private sector participation in mining.

Q. What is the basis for a sense of optimism?

In the Eleventh Five-Year Plan, infrastructure investments

are being pegged at around USD 490 billion, which will

translate into enhanced investments in the sectors where we

are already present. For instance, the energy, road

infrastructure and water management spaces will attract

nearly USD 300 billion investments. With a renewed optimism

of building India, new policy-level initiatives are also expected

to be rolled out in terms of enhanced public–private

partnership projects (PPP).

The Company is attractively placed to capitalize on this

potential. Its net worth of Rs 1,686 cr as on 31 March 2009

strengthens our pre-qualification for large, complex and

margins-accretive projects. With these attractive opportunities

unfolding in our space, we expect to grow our turnover 15

percent to Rs 4,800 cr on a standalone basis and Rs. 5,500

crores on a consolidated basis in 2009-10, enhancing wealth

for all our stakeholders.

Q. What were some of the reportabledevelopments in the major divisions?

It is imperative for me to mention that our roads divisions

did not perform well owing to circumstances beyond our

control. The pre-election phase, economic slowdown and

uncertainties combined to create financial challenges, land

acquisition issues and regulatory hurdles. Besides, skewed

prequalification and bidding norms favoured the award of

projects to players whose bidding raised doubts about project

viability. In such a scenario, it was prudent to abstain from

bidding and focus on project completion instead.

I am happy to state that our buildings, water and environment

and international projects divisions proved to be robust growth

drivers, contributing 93 percent to the overall order book growth

as on 31 March 2009. This was followed by contributions from

the electricals, metals and mining verticals, while the power

vertical is expected to report a sharp upturn over the next few

years.

P A R T T W O

“NagarjunaConstructionstrengthened its orderbook to Rs 12,197 cr,providing a turnovervisibility for two-and-a-half years.”


Q&A with A. A. V. Ranga Raju, Managing Director

Q. How do you expect to strengthen theCompany’s business divisions?

We expect to climb the value chain through established

niche engineering skills and emerge as a turnkey engineering-

procurement-construction player especially in metals, power

and mining spaces.

and expanding in select geographies, leveraging customer

knowledge to create new areas of growth within our traditional

markets and transferring technologies to emerging

applications in new industries. Combining these actions with

efficient cost management will enable us to emerge from this

downturn stronger and nimbler.

Q. How will the Company enhanceshareholder value?

Even in a challenging 2008-09, we rewarded our

shareholders by proposing a dividend of Rs 1.10 per equity

share of Rs 2 face value. We will engage in prudent project

bidding that protects our margins; we will enhance our

operational efficiency to lower our interest burden; we will

conserve payout to reinvest and enhance business

sustainability. In line with these initiatives, we will provide our

shareholders with a number of reasons to stay invested in our

Company.

Q. What are some of the developments atNagarjuna Construction?

Governments worldwide are now convinced that the

most potent way of initiating economic revival is through

enhanced liquidity. This augurs well for our industry as large

infrastructure projects that were relegated to the backburner

for want of funds are now being revived.

At Nagarjuna Construction, we are embarking on a number of

initiatives to capitalize on this reality. Our meaningful solutions

continue to enhance customer competitiveness while

strengthening relationships. Moreover, we are also building

P A R T T H R E E

“In 2009-10, we willreport a consolidatedturnover of Rs 5,500 cr,leading to enhancedvalue in the hands ofour stakeholders.”


Even in a challenging 2008-09,we rewarded our shareholders

by proposing a dividend of

Rs. 1.10 per equity share of Rs 2 face value.Going forward, we will provide our

shareholders with a number of reasons to stay invested in our Company.

Segment status within CompanyLargest

PortfolioIndustrial buildings Commercial buildings

Housing projects IT parks Shopping malls

Sports complexes Hospitals

Revenue, 2008-09 Rs 12,930 million

Proportion of Company’s total revenue,2008-0928 percent

Revenue growth 39.6 percent

Order book as on 31 March 2009Rs 25,570 million


BUSINESS SEGMENT REVIEW - 1

Order book position Divisional order book as a percentage of 21 percent

total order book, 31 March 2009

Total order book 100 percent

Segment strategy Build value and goodwill through prestigious brand-enhancing

projects

Optimise the utilisation of resources

Overview This division (the oldest of the Company) was launched in 1978. It

has progressively addressed larger projects and executed turnkey

projects. The division invested in state-of-the-art equipment

comprising batch mixers, concrete batching plants and crawler tower

cranes to reconcile implementation speed with execution quality. The

division possesses a team of diploma and graduate engineers as

well as a specialised Engineering Design & Technology Development

(EDTD) team comprising over 50 talented engineers. The result is a

graduation from mere construction to comprehensive single-point

solutions.

Highlights, 2008-09Added projects worth Rs. 16.82 billion to its order book

Executed projects worth Rs. 12.93 billion

Accelerated the implementation of the Vishakapatnam fabrication

and shuttering facility (projected completion in July 2009) that will

enhance captive production, quality and project completion speed

Segment financial snapshot (Rs. in million)

2004-05 2005-06 2006-07 2007-08 2008-09

Order book status 8,363 8,976 15,976 21,680 25,570

(as on March 31)

Turnover 4,699 5,256 7,246 9,260 12,930

Buildings andhousing


Principal orders received, 2008-09 (Rs. in million)

Particulars Client Value

1. Development of sports facilities and associated infrastructure Engineers India Limited 2,518.30

works for Commonwealth Games, Delhi – New Delhi

2. Construction of 304 type-VI houses and 99 type-I houses for National Buildings 1,615.50

NMDC at Netaji Nagar, Delhi Construction Corporation

Limited – New Delhi

3. Design and construction of elevated structures (Viaduct) Bangalore Metro Rail 1,506.35

excluding station portions in reach–4 Bangalore Corporation Ltd. – Bangalore

4. Construction of five-star deluxe hotels at Shilpakalavedika, Golden Jubilee Hotels Ltd,

Madhapur, Hyderabad Progressive Towers – Hyderabad 1,210.00

5. Construction of traffic and transit management center (TTMC) The Executive Engineer, 1,139.90

under JNNURM scheme - Pkg. 3, Bangalore Bangalore Metropolitan Transport

Corporation, Central Offices,

Civil Engineering Department.

Major projects completed, 2008-09 (Rs. in million)


1. Construction of paint and body shop at Pune Volkswagen (I) Pvt. Ltd, Pune 1,171.72

2. Construction of Times Print City at Airoli, Mumbai Bennett, Coleman & Co. Ltd, 1,087.93

The Times of India Group, Mumbai

3. Construction of Cabinet Secretariat building CPWD, Cabinet Secretariat Building, 860.40

New Delhi

4. Construction of cricket stadium at Raipur Government of Chhattisgarh 828.20

5. Construction of residence hall for 1,000 students and kitchen- National Institute of Technology, 652.43

cum-dining hall Warangal

Road aheadEnhance the proportion of government contracts

Invest in the latest equipment


Segment status within CompanySecond largest

PortfolioWater supply projects for drinking water

comprising transmission pipelines Water

treatment plants Distribution networks

Reservoirs Pumping stations River intake

works Electro-mechanical works Water

treatment plants Underground drainage

networks Sewage pumping stations Sewage

treatment plants



Revenue growth 14.3 percent



Order book position Divisional order book as a percentage 20 percent of total order book, 31 March 2009


Segment strategy Complete existing projects faster

Bag more projects under the Jawaharlal Nehru National UrbanRenewal Mission (JNNURM) and Urban Infrastructure DevelopmentScheme for Small and Medium Towns (UIDSSMT) schemes

Commission a casting unit for RCC pipes and manholes to addressgrowing in-house demand

Bag large projects (above Rs. 5 billion)

Bid for BOT water projects to drive annuity incomes

Optimise existing resources

Bag margin-accretive EPC contracts

Overview Started in 1999, this division is now a robust profit centre. The divisionhas emerged as a complete solutions provider from project design toengineering for water and environment projects. The division is equippedwith steel pipe fabrication units, imported modular formwork for structures,excavators, rock chiselling equipment and vertical cast concrete pipe andmanhole fabrication units catering to changing business needs.

The division’s in-house design team is equipped to design drinking waterfacilities and irrigation and sewerage projects. The software to generatethe design is at par with international Auto CAD standards. The divisionenjoys 90 percent of its project accretion from existing clients.

Highlights, 2008-09Added projects worth Rs. 14.91 billion from southern India and Rs.

2.20 billion from northern India

Executed projects worth Rs.7.82 billion from southern India andRs.1.84 billion from northern India, among the highest ever completedin a single year

Achieved the highest share (31 percent) of the Company’s new ordersreceived in 2008-09

Completed a 330-MSD sewage treatment plant in Hyderabad, thelargest such plant in Asia under USD technology

Competed a 1,300 km underground pipeline project in the arsenic-affected Nadia district in West Bengal


2004-05 2005-06 2006-07 2007-08 2008-09

Order book status 5,007 13,840 16,500 18,070 25,530(as on March 31)

Turnover 2,888 5,746 9,195 8,450 9,660

Water andenvironment


Road aheadCommission a vertical casting plant in Indore for RCC pipes and manholes equipped with machinery from Collee, Italy;

this backward integration will generate a larger volume across the widest range (300 mm to 2,000 mm)

Set up a factory to manufacture forming structures for water treatment at Vizag (capacity 2 lacs sq. metres a year) in

collaboration with Paschall, Germany

Bag international projects from Asian countries

Projected revenue of Rs.12 billion and fresh orders of Rs. 20 billion in 2009-10

Focus on operation and maintenance of projects, graduating it to a revenue source



1. J. Chokka Rao Devadula Lift Irrigation Scheme: Phase-III, Irrigation & Command Area 4,707.20

Package No.IV Development Authority,

Andhra Pradesh

2. Transmission of Godavari water from Yellampally Barrage for Hyderabad Metropolitan Water 4,070

drinking water needs of Hyderabad Urban Agglomeration (HUA) Supply & Sewage Board

3 Direct water pipeline from Pawana Dam to the WTP at Pimpri-Chinchwad Municipal 1591.70

Sector-23, Nigdi Corporation

4 Erection and commissioning of ground water based piped W/S Public Health Engineering 653.90

schemes in arsenic affected areas of different blocks in Nadia district Directorate, West Bengal

5 Coimbatore Corporation, providing clear water main (of size Coimbatore City Municipal 571.70

1,100 mm to 1,500 mm MS pipes) from clear water tunnel exit at Corporation

Kattan Hills to the proposed MSR at Ramakrishnapuram



1. Construction, erection, testing and commissioning of 339-MLD Hyderabad Metropolitan Water 1,187.13

sewage treatment plant with UASB process and its pumping Supply & Sewage Board

station at Amberpet, Hyderabad

2. Supplying, laying, jointing, testing and commissioning of 2,000 mm Chennai Metropolitan Water 324.3

(ND) spirally welded mild steel pipes from Poonamallee bypass Supply & Sewage Board

Junction up to Vanagaram Junction and laying 1,900 mm spirally

welded mild steel pipes from Vanagaram Junction up to

Koyambedu Junction (Package-II)

3. Providing water supply transmission and distribution system for Nanded Waghala City 249.1

south Nanded Municipal Corporation

4. Design, construction, commissioning, operation and maintenance Indore Municipal Corporation 226.1

of 900-MLD raw water intake and pumping station

5. Bhilai Water Supply Scheme Public Health Engineering 174.6

Department, Chhattisgarh


Segment status within CompanyThird largest

PortfolioRoads Highways Bridges Flyovers



Revenue growth 7 percent



Transportation

Order book position Divisional order book as a percentage 8 percent

of total order book, 31 March 2009


Segment strategy Bid for large projects, enhancing volumes and margins

Strengthen intellectual capital through prudent recruitment

Optimise the use of equipment, people, materials and funds

Balance annuity and toll incomes

Overview Incorporated in 1998, the transportation division worked on various NHAI

and NHDP programmes announced by the Government of India. The

division invested in equipment like advanced sensor pavers, tandem

rollers, pneumatic tyred rollers, hotmix plants, three-stage crushers and

piling rigs from renowned international vendors to accelerate workflow.

The division enjoys an association with brands like LG Engineering (South

Korea), Daelim International Corporation (South Korea), SMJ (Indonesia)

and major Indian construction companies. These have strengthened the

division’s project management capability, catering to large projects.

Highlights, 2008-09Added projects worth Rs. 560 million to the order book

Executed projects worth Rs. 7.81 billion.

Completed more than 70 percent projects through the optimal use of

equipment, materials, people and funds, creating a capacity to enter

into fresh projects


2004-05 2005-06 2006-07 2007-08 2008-09


(as on March 31)

Turnover 2,541 4,011 6,461 7,310 7,810


Road aheadAround 60 projects worth Rs. 480 billion are expected to be announced and awarded by NHAI in 2009-10. The division is

prepared for these through the following initiatives:

Complete all projects by July 2010

Strengthen project evaluation capabilities to bid selectively for new BOT projects above Rs 10 billion with minimal legal

traffic issues in addition to bidding for item rate contracts in Hyderabad and Bangalore

Achieve Rs. 20-25 billion fresh projects in 2009-10

Develop a team for the operation and maintenance of highways developed by the Company and others; invest in

specialised equipment like a milling machine in 2009-10

Enter toll collection projects through partnerships with toll equipment manufacturing companies; extend to highway traffic

management systems in 2009-10

Major ongoing projects, 2008-09 (Rs. in million)


1. Rehabilitation and upgradation of Garamore- Gagodhar road National Highways Authority of India 3,390.10

section of NH-8A and NH-15 from km 254.00 to km 308.00 and

from km 281.30 to km 245.00 in Gujarat – Package-IV

2. Construction of elevated highway from Silk Board Junction to National Highways Authority of India 2,130

Electronic City Junction from km 12/477 to km 15/359 of NH-7 in

Bangalore, Karnataka

3. Strengthening and widening to four-lane divided carriageway from National Highways Authority of India 1,405

km 105 to km 131 of Meerut-Muzaffarnagar section of NH-58 in

Uttar Pradesh

4. Construction of km 220 to km 255 on Orai-Bhognipur section on National Highways Authority of India 3,189.60

National Highway No. 25 and Km 421.20 to Km 429 of National

Highway No.2 on Bhognipur-Barah section on NH-2 in Uttar Pradesh

5. Strengthening of existing carriageway from km 0.000 to km National Highways Authority of India 2,736.20

37.920 on Pondicherry-Tindivanam section of National Highway

No. 66 in Tamil Nadu



1. Four-laning and strengthening the existing two-lane section National Highways Authority of India 2,649.33

between km 110 and km 140 on NH-2 in Bihar – Package IV C

2. Rehabilitation and upgradation of Radhanpur-Deesa road section National Highways Authority of India 4,258.95

of NH-14 from km 458.00 to km 372.60 in Gujarat – Package I


Segment status within CompanyFourth largest

PortfolioProjects executed outside India, including

roads, buildings and water pipelines






International




Segment strategy Bid for new projects in existing geographies

Emerge as EPC contractor of roads, buildings and water pipelines

Grow the international business through an entry into new

geographies

Focus on the speedy completion of existing projects

Generate repeat business from existing clients

Overview The division commenced operations in 2006-07 to explore international

opportunities and now operates in the area of roads, buildings and water

pipelines in Oman and UAE.

Highlights, 2008-09Added projects worth Rs. 16.49 billion


Engaged in five international projects of a total size of Rs. 35.75 billion

Accelerated project rollout in Oman, Mauritius, Dubai and Muscat

through a wholly-owned subsidiary

Touched the highest annual order book accretion of 31 percent

Acquired Al Mubarakia (Dubai) with an unlimited construction license

through our wholly-owned Mauritius subsidiary

Generated three repeat orders from Muscat Municipality, testifying

credibility


2007-08 2008-09

Order book status (as on March 31) 24,250 33,030

Turnover 2,910 7,710


Road aheadOptimising costs in 2009-10

Bidding for road projects to drive volumes and margins

Bidding for 140 km road project for Muscat Municipality worth Rs. 40 billion

Strengthening presence in Abu Dhabi

Investing proactively to strengthen the return on capital employed



1. Laying of around 100 kms water pipeline in Dubai city for Dubai Electricity & Water Authority 6,708

DEWA (UAE) in two packages

2. Construction of 718 villas at around Quriyat City, Muscat Muscat Municipality (Oman) 8,944

Projects completed, 2008-09 (Rs. in million)


1. Water pipeline project in Sohar City, Oman Muscat Municipality (Oman) 773

2. Water pipeline project in Dubai (DEWA) Dubai Electricity and Water Authority 346

3. Earth works at Al Khairan Muscat Municipality (Oman) 60


Segment status within CompanyFifth largest

PortfolioDam projects Lift irrigation projects Gravity

irrigation projects Hydroelectric power projects









Segment strategy Focus on diversified geographic presence in India, especially states

with bulk irrigation development projects

Increase the proportion of margin-accretive projects

Diversify the project portfolio into a new variety of projects (hydro

power)

Overview The division came into existence in April 2004 in response to the

increased investments by the Government of Andhra Pradesh in irrigation

infrastructure. The division is now a complete solutions provider: from

construction work to design, conceptualisation and project management.



Employed minimal capital, signifying prudent working capital

management

Focused on canal, dam and water tunnel projects

Completed a Rs. 2.14 billion water tunnel project in a single year

Added over 20 technical professionals to the team


2004-05 2005-06 2006-07 2007-08 2008-09


(as on March 31)

Turnover 123 1,383 1,681 2,660 2,880

Irrigation


Road aheadCompletion of over 60 percent of existing projects in 2009-10

Expected order book accretion by over Rs. 10 billion in 2009-10

Focus on dam projects in Rajasthan, tunnel projects in northeastern India (Sikkim and Assam) and a railway tunnel project

in Meghalaya

Focus on projects coming out of Bihar, Rajasthan, Madhya Pradesh and Gujarat. In Bihar alone, Rs. 300 billion worth of

projects are expected to be announced in the irrigation sector

Major orders received, 2008-09 (Rs. in million)


1. Detailed investigation and preparation of designs, drawings, The Superintending Engineer, 1,077.30

estimates, land plan schedules and excavation of gravity canal I & CADD, Medium Irrigation Project

on River Pranahita near Tummidi Hetti (V), Koutala (M), Circle Bellampally, Adilabad

Adilabad district


Segment status within CompanySixth largest

PortfolioDesign, engineering, erection, testing

Commissioning of transmission lines and

substations Project electrification System

improvement projects



Revenue growth -23 percent



Electrical




Segment strategy Focus on 100 percent Central Government-funded projects under the

Accelerated Power Development and Reform Programme (APDRP) and

funded by the World Bank and the Japan Bank for International

Cooperation, among others

Enhance geographic presence by bidding in various states

Provide comprehensive turnkey solutions

Enter into EPC contracts to enhance volumes and margins

Shrink project execution time and deliver on schedule

Overview Started in 1999, the division executed several turnkey projects funded by

the Central Government and has now emerged as a profit generator. The

division invested in the latest equipment and is manned by a pool of

talented engineers and designers. The result is that the projects are well

designed, well engineered and of superior quality.


Executed and handed over projects worth Rs. 2.51 billion

Accelerated receivables and reduced outstanding amount by

Rs. 1 billion

Increased the proportion of turnkey projects

Recruited qualified engineers, enhancing employee strength to 245

(135 engineers and 110 non-technical staff)


2004-05 2005-06 2006-07 2007-08 2008-09


(as on March 31)

Turnover 1,003 1,473 2,538 3,280 2,510


Road aheadDiversify the business portfolio into sub-station (upto 400 KV) projects, underground cabling and transmission projects in

2009-10

Target around Rs. 10 billion in fresh order accretion and a turnover of over Rs. 5 billion in 2009-10

Enter into a joint venture with a Korean company (Taihan Electricals) for cable supply for 220 KV and 400 KV projects in

2009-10

Identify joint venture partners for 220 KV and 400 KV cables – low competition and high margins – which are expected to

enjoy replacement demand surge owing to over-ground cables being moved underground



1. Supply of material, survey, erection, installation, testing and M.P Paschim Kshetra Vidyut Vitaran 338.72

commissioning of new 33/11 KV sub-stations in Indore, Dhar, Company Ltd, Indore

Jhabus, Khandwa, Burhanpur, Khargone and Barwani districts of

Indore region on a turnkey basis

2. Supply of materials, survey, erection, installation, testing and M.P Paschim Kshetra Vidyut Vitaran 340.27

commissioning of new 11 KV line, 11 KV bays with VCB and Metering Company Ltd, Indore

3. Supply, test, transport, construction, erection, testing and The Chief Engineer, Maha Vitaran, 2,288.87

commissioning of sub-transmission lines, distribution lines, power Maharastra State Electricity

transformers, new sub-stations, augmentation of existing Distribution Co. Ltd, Mumbai

sub-stations and other allied works on a turnkey basis for works in

Osmanabad Division

4. Supply and erection portion for construction of 11 KV and LT lines, Assam State Electricity Board 355.62

installation of distribution transformers and providing service

connections to BPL beneficiaries in Khairabari, Kolaigaon, Dolgaon,

Sialmari, Pub-Mangaldoi and Sipajhar Block within Darrang District

of Assam on turnkey basis

5. Supply, test, transport, construction, erection, testing and Mahavitaran - MSEDCL, Mumbai 1,193.33

commissioning of sub-transmission lines, distribution lines, power

transformers and new sub-stations



1. Design, shop test, supply, transport, construction, erection, testing Maharashtra State Electricity 1,017.62

and commissioning of sub-transmission, distribution lines and Distribution Co. Ltd, Mumbai

distribution transformers for Latur Zone

2. Design, shop test, supply, transport, construction, erection, testing Maharashtra State Electricity 794.87

and commissioning of sub-transmission, distribution lines and Distribution Co. Ltd, Mumbai

distribution transformers for Solapur Circle


Segment status within CompanySeventh largest

PortfolioEPC contracts in the iron and steel, aluminium,

zinc, copper and lead sectors



Revenue growth NA


Order book position Divisional order book as a percentage 9 percent of total order book, 31 March 2009



Segment strategy Focus on the early completion of projects

Build capabilities to address opportunities from the non-ferrous metal

sector

Overview This division was started in 2007 to capitalise on the growing opportunities

in the metal sector through collaborations with global steel leaders for

growing the division’s presence through EPC contracts. The division

possesses strong engineering capabilities (civil and structural) and a

skilled design team. The division signed an MoU with POSCO E&C of

South Korea, the fourth largest steel producer in the world and intends to

leverage the proven capabilities of POSCO E&C to bid for EPC contracts

of various steel plant expansion projects and grass-root steel plants in India.



Started work for the Burnpur ISP blast furnace projects worth Rs. 7.25

billion

Around 100 professionals were added at the site and head office

Undertook several competence enhancement trainings from POSCO

E&C


2007-08 2008-09

Order book status (as on 31March) 7,420 10,560

Turnover N/A 1,680



1. Structural works for basic SAIL - IISCO Steel 2,846.40

oxygen furnace, continuous Plant, Burnpur,

casting plant and lime and West Bengal

dolomite plant

2. Structural works for RE heating SAIL - IISCO Steel 1,971.90

furnace (RHF) and rolling mills Plant, Burnpur,

package no. 48B–2 West Bengal

Road aheadProjected completion of 40,000 tonnes of structural work for the blast

furnace of the integrated steel plant in Burnpur in 2009-10, among the

fastest such tenures in the industry

Expects to bag two projects worth Rs. 10 billion in 2009-10

Metals


Segment status within CompanyEighth largest

PortfolioOil refinery modernisation projects Oil and

gas pipeline Projects

Revenue, 2008-09 Rs 450 million


Revenue growth -58 percent

Order book as on 31 March 2009Rs 170 million


Order book position Divisional order book as a percentage Less than 1 percent



Segment strategy Reinforce the division’s position in the oil and gas segment

Embark on big projects for large refinery and oil pipeline companies

Enter into joint ventures with large companies to bag big projects

Build strong execution capabilities in civil, mechanical and electrical

divisions

Overview Established in 2007-08, with the objective to cater to the infrastructure

needs of the various refineries expansion projects that are coming up in the

country.

Highlights, 2008-09Executed projects worth Rs. 450 million

The division is in the process of creating a team of experienced

professionals


2007-08 2008-09

Order book status (as on 31March) 12,880 170

Turnover 1,090 450

Road aheadEngaged in discussions to enter several oil and gas joint ventures

Building pre-qualification capabilities for projects

Recruitment of experienced senior management professionals

Association with experienced engineering consultants to enhance

competence

Seek acquisition opportunities to strengthen equipment, expertise and

execution capabilities

Proposed consortium partnership with foreign companies intending to

enter India

Oil and gas


Segment status within CompanyNinth largest

PortfolioEPC contracts in the power sector comprising

BOP works

Hydropower projects

Revenue, 2008-09 Rs 440 million








Segment strategy Complete large power projects

Enhance manpower and engineering capabilities to execute large

orders

Embark on tunneling work for hydroelectric power projects

Overview The division was established in 2007-08 to cater to the EPC opportunity

arising out of thermal and hydro power projects. The division possesses

strong capabilities in the execution of large power projects owing to core

competence in civil, mechanical, structural engineering and designing.

The Company is concentrating on Balance of Plant (BOP) works pertaining

to various thermal and hydro-power projects in India.

Highlights, 2008-09Added projects worth Rs. 480 million

Executed projects worth Rs. 440 million

Embarked on business development to acquire large contracts

Enhanced human resource development through training


2007-08 2008-09

Order book status (as on 31March) 1,060 1,090

Turnover 280 440

Road aheadTargeted order book of Rs 20 billion in 2009-10

Diversification into the renewable energy (solar and wind) vertical

Power


Segment status within CompanySmallest

PortfolioFerrous and non-ferrous mining projects in

public as well as private sector

Revenue, 2008-09 NA

Proportion of Company’s total revenue,2008-09NA

Revenue growth NA






Segment strategy Seek mining opportunities in India and abroad

Invest in equipment and people to strengthen competencies

Bid for government and private sector ferrous and non-ferrous mining

projects

Overview Established in 2008, this division caters to the coal needs of the Group

company’s power generating assets as well as rising demand. It also

seeks to enter the ferrous and non-ferrous metal segments.


Bagged a contract with a consortium partner for overburden removal

at Singareni Coalfields for six years

Recruited eight technical professionals and four technical consultants


2008-09

Order book status (as on 31March) 3,600

Turnover NA



1. Blast hole drilling, controlled blasting Singareni 3,599.77

with shock tube initiation, excavation, Collieries

loading, transport and dumping, among

others, of overburden at Medapalli Ocp,

RG - 1 Area

Road aheadBid for overburden removal projects

Target order accretion of over Rs. 5 billion in 2009-10

Recruit senior management professionals

Seek bauxite and limestone mines in India

Mining


Directors’ Report

To the members,

Your Directors take pleasure in presenting the 19th Annual Report together with the audited

statement of accounts for the year ended March 31, 2009.

Financial results(Rs in million)

2008-09 2007-08

Gross income 41,555.71 34,784.94

Profit before interest and depreciation 3,778.34 3,653.44

Less: Interest and financial charges 963.59 719.44

Profit before depreciation 2,814.75 2,934.00

Less: Depreciation 533.02 482.06

Profit before tax 2,281.73 2,451.94

Provision for tax 743.14 832.47

Profit after tax 1,538.59 1,619.47

Profit brought forward 1,311.65 860.23

Profit available for appropriation 2,850.24 2,479.70

Appropriations

Dividend at Rs.1.10 per share ( 55% ) 251.74 297.49

Dividend tax 42.78 50.56

Transfer to General Reserve 550.00 800.00

Transfer to Debenture Redemption Reserve 250.00 --

Transfer to Contingency Reserve 20.00 20.00

Balance carried forward 1,735.72 1,311.65

Paid up Capital 457.70 457.68

Reserves and Surplus 16,397.81 15,209.18


Operational performanceA. Standalone

You will be glad to note that your

Company registered a growth of 19% in

turnover from Rs. 34,784.94 million in

2007-08 to Rs. 41,555.71 million in

2008-09. Gross Profit increased from

Rs. 3,653.44 in 2007-08 to Rs. 3,778.34

million in 2008-09 before interest and

depreciation. After deducting interest of

Rs. 963.59 million, providing a sum of

Rs. 533.02 million towards depreciation

and income tax provision of Rs. 743.14

million, the operations resulted in a net

profit of Rs. 1,538.59 million as against

Rs. 1,619.47 million.

B. Consolidated

During the year under the review your

Company joined the ‘One Billion Dollar

Club’ with a consolidated turnover of

Rs. 48,023 million as against Rs. 36,590

million in the previous fiscal registering

a growth of 31.73%. Your Company has

earned a consolidated gross profit of

Rs. 5,202.50 million before interest and

depreciation as against Rs. 4,212.47

million in the previous year. After

deducting interest of Rs. 1,736.70

million, providing for depreciation of

Rs. 822.89 million and provision for tax

of Rs. 792.65 million, the operations

resulted in a net profit of Rs. 1,850.26

million as against Rs. 1,688.64 million

in the previous year.

During the year the Company, on

consolidated basis, bagged new orders

valued around Rs. 54,300 million and

executed projects worth Rs.46,100

million. The order book position as on

March 31, 2009 stood at Rs. 1,22,000

million.

DividendYour Directors take pleasure in

recommending equity dividend of

Rs. 1.10 per share of Rs. 2 face value

(55% on the paid-up equity share

capital) for the approval of the

members for the year 2008-09. The

dividend, if approved, at the 19th

Annual General Meeting by the

members, will be paid to all those

equity shareholders whose names

appear in the register of members as

on July 21, 2009 , and also to those,

whose names, as beneficial owners,

are furnished by the National Securities

Depository Limited and the Central

Depository Services (India) Limited.

Issue of securedredeemable non-convertible debenturesDuring the year the Company raised

Rs. 1000 million through issue of

secured redeemable non-convertible

debentures on private placement basis

to LIC of India. You will note that CRISIL

accorded a rating of AA-/ Stable for the

long-term borrowings of the Company

up to Rs. 2000 million. The secured

redeemable non-convertible debentures

issued to LIC of India are listed on the

‘Wholesale Debt Market Segment’

(WDM) of the National Stock Exchange

of India.

Directors’ responsibilitystatementPursuant to the provisions of Section

217 (2AA) of the Companies Act, 1956,

the Directors’ responsibility statement

is given in Annexure - A which forms a

part of this report.

DisclosuresDepositsDuring the year the Company did not

accept any public deposits.

Conservation of energy,technology absorption andforeign exchange earnings andoutgo

A. Conservation of energy

The Company’s core activity at present

is civil construction which is not power

intensive. The Company is making

every effort to conserve the usage of

power.

B. R&D and technology absorption:

Not applicable

C. Foreign exchange earnings and

outgo

Foreign exchange earnings - Nil

Foreign exchange outgo

a. Towards travel - Rs. 2.43 million

b.Towards import of capital goods -

Rs. 124.83 million

c. Towards material purchases -

Rs. 378.70 million

Particulars of employeesDetails in respect of remuneration paid

to employees as required under

Section 217 (2A) of the Companies Act,

1956, read with the Companies

(Particulars of Employees’) Rules, 1975,

as amended forms part of this report.

However, in pursuance of the

provisions of Section 219(1) (b) (iv) of

the Companies Act, 1956, this Report is

being sent to all the members of the

Company excluding the aforesaid

information and the said details are

made available at the registered office

of the Company. The members

interested in obtaining such details may

write to the Company Secretary at the

registered office of the Company.

DirectorsDr. A. V. S. Raju, Founder Chairman

and Director on the Board of the

Company resigned from the Board on

July 31, 2008. As you are aware that

under the able leadership of Dr. A. V. S.

Raju, the Company achieved several

important milestones and in the year

2008, the construction world - NICMAR

has declared your Company as the

second largest construction company

in the country. Your Board reluctantly

accepted the resignation of Dr. A. V. S.

Raju and placed on record the valuable

services rendered by him during his

long association spanning nearly 20

years with the Company. Keeping in

view, the valuable services rendered by

Dr. A. V. S. Raju, the Board

unanimously approved the proposal of

appointing him as the ‘Chairman –

Emeritus’ of the Company.

Smt. Bala Deshpande, Nominee

Director of ICICI Venture Funds

Management Co. Ltd, and Prof. V. S.

Raju, resigned from the Board of the

Company during the year. The Board of

Directors placed on record their

appreciation of the valuable services

rendered by Smt. Bala Deshpande and

Prof. V. S. Raju during their tenure as

Directors on the Board of the Company.

Sri Amit Dixit, Alternate Director to

Sri Akhil Gupta, Nominee Director of

Blackstone, ceased to be an Alternate

Director pursuant to the provisions of

Section 313 of the Companies Act,

1956 and was reappointed as an

Alternate Director to Sri Akhil Gupta

w.e.f May 28, 2009.

Sri J. V. Ranga Raju, Sri N. R. Alluri and

Sri R. V. Shastri, Directors, are liable to

retire by rotation at the ensuing Annual

General Meeting and are eligible for

being reappointed as the Directors of

the Company.

The HR & Remuneration Committee of

the Board and the Board of Directors of

the Company have subject to the

approval of the members of the

Company, accorded their approval for

reappointment of Sri A. S. N. Raju and

Sri R. N. Raju, as Wholetime Directors

of the Company for a further period of

five years w.e.f May 1, 2009, on the

terms and conditions contained in the

Notice of the 19th Annual General

Meeting.

The Board of Directors appointed

Sri A. J. Jaganathan as an Additional

Director on the Board of the Company

w.e.f May 28, 2009. Sri A. J.

Jaganathan will hold the office upto the

date of the ensuing Annual General

Meeting of the Company. Due notice,

under the provisions of Section 257 of

the Companies Act, 1956, has been

received from a member of the

Company proposing his candidature

for the office of Director of the

Company, liable to retire by rotation.

The resolutions for the above

appointments and reappointments of

the Directors are included in the notice

of the Annual General Meeting and a

brief profile of the proposed appointees

together with other disclosures in terms

of Clause 49 of the Listing Agreement

are part of the Annexure to the Notice

of the Annual General Meeting.

NCC ESOP 2004Pursuant to the provisions of Guideline

12 of the Securities Exchange Board of

India (Employee Stock Option Scheme

and Employee Stock Purchase

Scheme), Guidelines, 1999, as

amended, the necessary disclosures of

stock options as on March 31, 2009

under the “NCC Employee Stock

Option Plan, 2004” form a part as

Annexure B to this report.

Joint statutory auditorsand their reportThe joint statutory auditors of the

Company viz., M/s. M Bhaskara Rao &

Co., Chartered Accountants, and

M/s. Deloitte Haskins and Sells,

Chartered Accountants retire at the

conclusion of the 19th Annual General

Meeting and have confirmed their

eligibility and willingness to accept


the office of joint statutory auditors,

if reappointed. Your Board of Directors

have recommended their

reappointment, based on the

recommendations of the Audit

Committee to the shareholders for their

approval at the 19th Annual General

Meeting of the Company for

reappointment to hold office from the

conclusion of the 19th Annual General

Meeting upto the conclusion of the 20th

Annual General Meeting.

The joint statutory auditors report to the

shareholders of the Company does not

contain any qualification(s) or adverse

observations.

Subsidiary companiesA. The Company has 38 subsidiaries

(including step down subsidiaries)

as on March 31, 2009. During the

year, three new companies viz.

a) Al Mubarikia Contracting Co. LLC

b) NCC Power Projects Limited and

c) NCC International Convention Centre

Limited were formed as

subsidiaries/step down subsidiaries of

the Company. The first financial year of

NCC International Convention Centre

Limited will close on March 31, 2010

and therefore no accounts of this

Company were prepared.

B. There was no material change in the

nature of the business of the

subsidiaries. A statement pursuant to

Section 212(1) (e) and (3) of the

Companies Act, 1956, containing

the details of the subsidiaries of

the Company, is appended as

Annexure - C to this Report.

C. The Ministry of Corporate Affairs,

Government of India, vide its letter

bearing No. 47/190/2009-CL-III, dated

March 20, 2009, accorded the approval

under the provisions of Section 212(8)

of the Companies Act, 1956, exempting

the Company from attaching the annual

accounts of the Subsidiary Companies

for the year ended March 31, 2009 with

that of your Company.

A statement, disclosing the details

pertaining to the subsidiaries of the

Company as on March 31, 2009,

pursuant to Section 212 is appended

as Annexure – D to this Report.

Consolidated financialstatementsIn compliance with Accounting

Standards AS-21 and AS-27 on

consolidated financial statements, read

with the Accounting Standard AS-23 on

Accounting for Investments in

Associates, your Directors have

pleasure in attaching the consolidated

financial statements for the financial

year ended March 31, 2009, which form

a part of this Annual Report. The

Auditors’ Report to the Board of

Directors does not contain any

qualification(s) or adverse observations.

The Company will make available the

Annual Reports of the aforesaid

subsidiaries upon request by any

member/investor of the Company /

subsidiary company(s). Further, the

Annual Reports of the subsidiary

companies will also be kept open for

inspection by any member/investor at

the Company’s registered office and

that of the subsidiaries concerned.

Corporate GovernanceIn pursuance of Clause 49 of the Listing

Agreement entered into with the stock

exchanges, a separate section on

Corporate Governance has been

incorporated in the Annual Report for

the information of the shareholders.

A certificate from the Auditors of the

Company regarding compliance of the

conditions of Corporate Governance as

stipulated under the said Clause 49

also forms a part of this Annual Report.

A separate report on Management

Discussion and Analysis forms part of

this Annual Report.

AcknowledgementsYour Directors wish to place on record

their sincere appreciation and thanks

for the valuable cooperation and

support received from the employees

of the Company at all levels,

Company’s Bankers, Financial

Institutions, Central and State

Government Authorities, J. V. partners,

clients, consultants, suppliers, and

Members of the Company and look

forward for the same in greater

measure in the coming years.

For and on behalf of the Board

Place: Hyderabad P. Abraham A. A. V. Ranga Raju

Date: May 28, 2009 Director Managing Director


Directors’ ResponsibilityStatementPursuant to the provisions of Section217(2AA) of the Companies Act, 1956,the Board of Directors hereby state that

a) In the preparation of the annualaccounts for the year ended March31, 2009, the applicable accountingstandards have been followed alongwith proper explanations relating tomaterial departures

b) We selected such accountingpolicies and applied themconsistently and made judgmentsand estimates that are reasonableand prudent so as to give a true andfair view of the state of affairs of theCompany as at March 31, 2009 andof the profit for the year ended onthat date

c) We have taken proper and sufficientcare for the maintenance of

adequate accounting records inaccordance with the provisions ofthe Companies Act, 1956, forsafeguarding the assets of theCompany and for preventing anddetecting fraud and otherirregularities and

d) The accounts for the year endedMarch 31, 2009 have been preparedon ‘a going’ concern basis.


Annexure - A

Annexure - B

(a) Number of options granted During the year 2008-09 – Nil1,343,600 options granted on 31-01-2005 – I grant100,560 options granted on 28-01-2006 – II grant94,110 options granted on 31-01-2007 – III grant

(b) The pricing formula Options granted exercisable at a price of Rs. 22 per share

(c) Options vested during the year Nil

(d) Options exercised during the year 12,190 Options

(e) The total number of shares arising as a result 12,190 Equity Shares of Rs.2/- eachof exercise of options

(f) Options lapsed during the year 3,610 options of Rs. 2 each lapsed during the year 2008-09

(g) Variation of terms of options during the year Nil

(h) Money realised by exercise of options during the year Rs. 159,720/-

(i) Total number of options in force as on March 31, 2009 NilNCC-ESOP-2004 came to an end on 15-11-2007

(j) Employee-wise details of options granted to

(1) Senior Management personnel Nil

(2) Any other employee who receives a grant in any Nilone year of options amounting to 5% or more ofoptions granted during the year

(3) Identified employees who were granted options, Nilduring any one year, equal to or exceeding 1% ofthe issued capital (excluding outstanding warrantsand conversions) of the Company at the time of grant

(k) Diluted earnings per share (EPS) pursuant to issue of Rs. 6.72shares on exercise of option calculated in accordancewith Accounting Standard (AS 20) “earning per share”

NCC Employees Stock Option Plan, 2004 (ESOP) as on 31-03-2009The details of ESOP are given below


Place: Hyderabad A. A. V. Ranga RajuDate: May 28, 2009 Managing Director


Annexure - CStatement pursuant to Section 212 of the Companies Act, 1956 relating to subsidiarycompaniesSl. Name of the Financial Date on Number of shares held Extent of The net aggregate amount of No. subsidiary year of the which they at the end of the interest of the subsidiary companies’

company subsidiary became financial year of the holding profit/(loss) so far as it concernscompany subsidiary subsidiary companies company at the members of the holding company2

ended on company the end of i) Dealt with (ii) Not dealt withthe financial holding in the holding year of the company’s company’s accountssubsidiary accountscompany

(a) for the (a) for thefinancial financialyear ended year endedMarch 31, 2009 March 31, 2009

(b) for previous (b) for previous financial years of financial years ofthe subsidiary the subsidiarycompany since it company since it became holding became holdingcompany’s company’ssubsidiary subsidiary

1. NCC Infrastructure 31.03.2009 27.05.2005 7,82,08,970 equity 100% – a) Rs. 5.41 million Holdings Ltd shares of Rs. 10 each b) Rs. 4.61 million

2. Patnitop Ropeway 31.03.2009 13.02.2007 19,13,000 equity shares 100% – –& Resorts Ltd of Rs. 10 each

3. Naftogaz Engineering 31.03.2009 28.08.2007 50,000 equity shares 100% – –Pvt Ltd of Rs. 10 each

4. NCC Urban 31.03.2009 08.12.2005 12,00,00,000 equity shares 80% – a) Rs. 57.98 millionInfrastructure Ltd of Rs. 10 each b) Rs. 14.66 million

5. NCC Vizag Urban 31.03.2009 25.01.2006 4,98,75,000 equity shares 95% – a) Rs. (2.48) millionInfrastructure Ltd of Rs. 10 each b) Rs. (0.37) million

6. O B Infrastructure Ltd 31.03.2009 17.10.2006 62,51,281 equity shares 55.43% – –of Rs. 10 each

7. Dhatri Developers 31.03.2009 13.02.2006 -(1) 100%(3) – a) Rs. (0.008) million Projects Pvt Ltd b) Rs. (0.025) million

8. Sushanti Avenues Pvt Ltd 31.03.2009 13.02.2006 -(1) 100%(3) – a) Rs. (0.008) millionb) Rs. (0.049) million

9. Sushruta Real Estates 31.03.2009 13.02.2006 -(1) 100%(3) – a) Rs. (0.005) millionPvt Ltd b) Rs. (0.049) million

10. PRG Estates Pvt. Ltd., 31.03.2009 19.12.2006 -(1) 100%(3) – a) Rs. (0.001) millionb) Rs. (0.037) million

11. Thrilekya Real Estates 31.03.2009 1.12.2006 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.066) million

12. Varma Infrastructures 31.03.2009 1.12.2006 -(1) 100%(3) – a) Rs. (0.002) millionPvt. Ltd b) Rs. (0.029) million

13. Nandyala Real Estates 31.03.2009 1.12.2006 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.035) million

14. Kedarnath Real Estates 31.03.2009 28.12.2006 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.108) million

15. AKHS Homes Pvt. Ltd 31.03.2009 12.02.2007 -(1) 100%(3) – a) Rs. (0.003) millionb) Rs. (0.042) million

(1) (2) (3) (4) (5) (6) (7)


Sl. Name of the Financial Date on Number of shares held Extent of The net aggregate amount of No. subsidiary year of the which they at the end of the interest of the subsidiary companies’





16. JIC Homes Pvt. Ltd 31.03.2009 12.02.2007 -(1) 100%(3) – a) Rs. (0.001) millionb) Rs. (0.041) million

17. Sushanti Housing Pvt. Ltd 31.03.2009 12.02.2007 -(1) 100%(3) – a) Rs. (0.001) millionb) Rs. (0.041) million

18. CSVS Property Developers 31.03.2009 13.02.2007 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.041) million

19. Vera Avenues Pvt. Ltd 31.03.2009 13.02.2007 -(1) 100%(3) – a) Rs. (0.001) millionb) Rs. (0.041) million

20. Sri Raga Nivas Property 31.03.2009 17.02.2007 -(1) 100%(3) – a) Rs. (0.001) millionDevelopers Pvt. Ltd b) Rs. (0.042) million

21. VSN Property Developers 31.03.2009 17.02.2007 -(1) 100%(3) – –Pvt. Ltd

22. M. A. Property Developers 31.03.2009 17.02.2007 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.041) million

23. Sri Raga Nivas Ventures 31.03.2009 07.03.2007 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.037) million

24. Vara Infrastructure Pvt. Ltd 31.03.2009 09.03.2007 -(1) 100%(3) – a) Rs. (0.001) millionb) Rs. (0.036) million

25. Mallelavanam Property 31.03.2009 15.03.2007 -(1) 100%(3) – a) Rs. (0.001) millionDevelopers Pvt. Ltd b) Rs. (0.037) million

26. Sradha Real Estates 31.03.2009 16.03.2007 -(1) 100%(3) – a) Rs. (0.001) millionPvt. Ltd b) Rs. (0.037) million

27. Siripada Homes Pvt. Ltd 31.03.2009 03.04.2007 -(1) 100%(3) – a) Rs. (0.001) millionb) Rs. (0.037) million

28. NJC Avenues Pvt. Ltd 31.03.2009 09.04.2007 -(1) 100%(3) – a) Rs. (0.005) millionb) Rs. (0.053) million

29. Himachal Sorang Power 31.03.2009 01.11.2007 -(1) 90%(3) – –Pvt.Ltd

30. Nagarjuna Construction 31.03.2009 17.01.2007 1,000,000 Shares of 100% – a) Rs. 132.39 millionCompany International LLC Omani Rials 1 each b) Rs. 67.32 million

31. NCC Infrastructure Holdings 31.03.2009 27.04.2006 2,136,514 shares of 100% – a) Rs. 37.24 million Mauritius PTE Ltd USD 10 each b) Rs. 118.74 million

(1) (2) (3) (4) (5) (6) (7)


Sl. Name of the Financial Date on Number of shares held Extent of The net aggregate amount of No. subsidiary year of the which they at the end of the interest of the subsidiary companies’





(1) Step down subsidiary company (2) The amounts shown in column number (6 and 7) represent the net aggregate amount of profits/(losses) of the subsidiaryattributable to the direct holding of the Company (3) Percentage of holding referred in the column number 5 is held through the subsidiary companies

(1) (2) (3) (4) (5) (6) (7)


M. V. Srinivasa Murthy A. A. V. RangaRajuCompany Secretary & VP (legal) Managing Director

Place: Hyderabad R. S. Raju A. G. K. RajuDate: May 28, 2009 Vice President (F&A) Executive Director

32. Nagarjuna Construction 31.03.2009 11.05.2005 1,50,000 Shares of 100% – a) Rs. (48.45) million Company Limited & Omani Rials 1 each b) Rs. (90.17) millionPartners – LLC

33. Nagarjuna Contracting 31.03.2009 01.02.2008 300 Shares of 100% – a) Rs. 121.53 millionCo. LLC AED 1000 each b) Rs. 1.18 million

34. Liquidity Limited 31.03.2009 20.06.2006 -(1) 100%(3) – a) Rs. (0.52) million b) Rs. 0.03 million

35. NCC Urban Lanka (P) Ltd 31.03.2009 22.03.2007 -(1) 100%(3) – –

36. Al Mubarikia Contracting 31.03.2009 02.04.2008 -(1) 100%(3) – a) Rs. 6.56 millionCo. LLC b) –

37. NCC Power Projects Ltd 31.03.2009 12..06.2008 50,000 Equity Shares of 100% – –Rs. 10 each

38. NCC International – 05.12.2008 10,00,000 equity shares 100% – –Convention Centre Ltd of Rs.10 each


Annexure - DStatement disclosing the details in aggregate pertaining to subsidiaries/step downsubsidiaries of Nagarjuna Construction Company Ltd as on 31.03.2009

(Rs. in million)

1. NCC Infrastructure Holdings Ltd 782.09 987.91 1,876.40 105.25 1,098.27 32.38 8.40 2.98 5.41 –

2. Patnitop Ropeway & Resorts Ltd 19.13 – 19.13 – – – – – – –

3. Naftogaz Engineering Pvt Ltd 0.50 – 0.52 0.02 – – – – – –

4. NCC Urban Infrastructure Ltd 1,500.00 71..29 5,269.99 3,692.57 744.93 1,400.69 98.73 40.75 57.98 –

5. NCC Vizag Urban 525.00 5.25 1,151.13 625.36 – – – – – –Infrastructure Ltd

6. O B Infrastructure Ltd 112.77 1,001.41 4,195.91 3081.79 – – – – – –

7. Dhatri Developers & Projects 1.00 – 63.89 62.98 – – – – – –Pvt Ltd

8. Sushanti Avenues Pvt Ltd 1.00 – 46.62 45.67 – – – – – –

9. Sushruta Real Estates Pvt Ltd 1.00 – 17.73 16.78 – – – – – –

10. PRG Estates Pvt. Ltd 0.10 34.00 54.95 20.85 – – – – – –

11. Thrilekya Real Estates Pvt. Ltd 1.15 26.40 44.47 17.07 – – – – – –

12. Varma Infrastructures Pvt. Ltd 0.5 – 0.48 0.017 – – – – – –

13. Nandyala Real Estates Pvt. Ltd 1.16 26.36 57.14 29.90 – – – – – –

14. Kedarnath Real Estates Pvt. Ltd 1.71 31.74 48.91 15.65 – – – – – –

15. AKHS Homes Pvt. Ltd .50 – 31.05 30.60 – – – – – –

16. JIC Homes Pvt. Ltd .50 – 18.24 17.79 – – – – – –

17. Sushanti Housing Pvt. Ltd .50 – 17.36 16.90 – – – – – –

18. CSVS Property Developers Pvt. Ltd .50 – 18.3 17.84 – – – – – –

19. Vera Avenues Pvt. Ltd .50 – 14.03 13.57 – – – – – –

20. Sri Raga Nivas Property .50 – 33.50 33.04 – – – – – –Developers Pvt. Ltd

21. VSN Property Developers Pvt. Ltd .50 – 33.54 33.08 – – – – – –

22. M. A. Property Developers Pvt. Ltd .50 – 17.36 16.91 – – – – – –

23. Sri Raga Nivas Ventures Pvt. Ltd .50 – 4.79 .017 – – – – – –

24. Vara Infrastructure Pvt. Ltd .10 49.60 67.27 17.57 – – – – – –

25. Mallelavanam Property .50 – 98.39 93.77 – – – – – –Developers Pvt. Ltd

26. Sradha Real Estates Pvt. Ltd .50 – 4.79 .018 – – – – – –

Sl. Name of the Capital Reserves Total Total Details of Turnover Profit Provision Profit ProposedNo. Subsidiary Assets Liabilities investment before for after dividend

(except in case taxation taxation taxationof investment

in subsidiaries)


(Rs. in million)

27. Siripada Homes Pvt. Ltd .50 – 4.79 .017 – – – – – –

28. NJC Avenues Pvt. Ltd .50 – 1,209.17 1,208.74 – – – – – –

29. Himachal Sorang Power Pvt. Ltd 17.63 157.84 1,728.35 1,728.35 – – – – – –

30. Nagarjuna Construction 132.16 230.31 5,925.65 5,563.18 – 2,731.83 132.39 – 132.39 –Company International LLC,

31. NCC Infrastructure Holdings 1,087.06 186.83 2,061.93 788.04 1,000.24 75.45 38.53 1.29 37.24 –Mauritius PTE Ltd

32. Nagarjuna Construction 19.82 (174.80) 274.85 429.83 – 103.64 (48.45) – (48.45) –Company Limited &Partners – LLC

33. Nagarjuna Contracting Co. LLC 4.16 111.72 5,423.02 5,307.14 – 2,727.68 121.53 – 121.53 –

34. Liquidity Limited 6.46 (1.63) 6.11 1.28 6.08 – (0.52) – (0.52) –

35. NCC Urban Lanka (P) Ltd .000002 – – – – – – – – –

36. Al Mubarikia Contracting Co. LLC 13.85 4.55 524.57 506.17 – 293.20 6.56 – 6.56 –

37. NCC Power Projects Ltd 0.50 – 21.92 20.86 – – – – – –

38. NCC International ConventionCentre Ltd 10.00 – – – – – – – – –

Sl. Name of the Capital Reserves Total Total Details of Turnover Profit Provision Profit ProposedNo. Subsidiary Assets Liabilities investment before for after dividend

(except in case taxation taxation taxationof investment

in subsidiaries)

Note: 1) Exchange rate as on 31.03.2009: * Rial Omani = Rs. 132.158, AED = Rs. 13.85, US$ = Rs. 50.88

2) The above statement has been prepared and furnished in compliance of the stipulation contained in letter bearing no. No. 47/190/2009-CL-III, dated 20th March, 2009vide which Ministry of Corporate Affairs, Government of India, accorded approval under Section 212(8) of the Companies Act, 1956 for the year ended on 31.03.2009.


M. V. Srinivasa Murthy A. A. V. RangaRajuCompany Secretary & VP (legal) Managing Director

Place: Hyderabad R. S. Raju A. G. K. RajuDate: May 28, 2009 Vice President (F&A) Executive Director


ManagementDiscussion and Analysis

India’s GDP grew by 6.7% in 2008-09, the growth rate is lower than the 9% in the preceding fiscal

but is far better than growth rates of USA, European Countries and other Asian countries which have

slipped into recession. The growth rate makes India the fastest growing economy after China. The

current GDP growth rate is commendable in face of such severe downturn. The per capita income,

a measure of average income of a citizen, went up 12.2% to Rs. 37,490 per annum during 2008-09

from Rs.33,283 per annum in 2007-08.Though to sustain the momentum of growth in 2008-09 in face

of such severe economic downturn, Government of India (GOI) had to intervene and announce

stimulus package which has resulted in ballooning of the fiscal deficit to 6.2% of the GDP in 2008-

09 from 3.1% in 2007-08.

The Indian construction industry grew by 7.2 % in the last fiscal against 10.1% growth in 2007-08.

The construction industry is an integral part of the Indian economy. The share of construction in

GDP has increased from 6.1% in 2002–03 to 6.9% in 2006–07. This has primarily been on account

of increased government spending on physical infrastructure in the last few years, with programmes

such as National Highway Development Programme (NHDP) and PMGSY/Bharat Nirman

Programme receiving a major fillip of late. The construction industry is experiencing a great upsurge

in the quantum of the work load, and has grown at the rate of over 10% annually during the last five

years.

On the basis of an analysis of the forward and backward linkages of construction, the multiplier

effect for construction on the economy is estimated to be significant. With around 27,770 enterprises

involved directly in the activity of construction in 2005, the industry is one of the largest employers

in the country and is characterized by a mix of both organized and unorganized entities. The

employment figures have shown a steady rise from 14.6 million in 1995 to 31.46 million personnel

in 2005.

Accordingly, the financing of infrastructure development has largely shifted to the private sector,

primarily through the use of Public Private Partnership (PPP), which are based on a partnership

between the public and the private sectors for the purpose of delivering a project or service

traditionally provided by the public sector.

A. Industry overviewRoadsIndia has one of the largest road networks in the world, of 33.14 lakh km, consisting of (i) National

highways (NHs), (ii) State highways (SHs), (iii) Major district roads (MDRs), and (iv) RRs that include

other district roads and village roads. NHs with a length of 66,590 km comprise only 2% of the road

network but carry 40% of the road-

based traffic. SHs with a length of about

1,37,000 km and MDRs with a length of

3,00,000 km together constitute the

secondary system of road

transportation which contributes

significantly to the development of the

rural economy and industrial growth of

the country. The secondary system also

carries about 40% of the total road

traffic, although it constitutes about

13% of the total road length. Despite its

importance to the national economy,

the road network is grossly inadequate

in various respects. It is unable to

handle high traffic density and high

speeds at many places and has poor

riding quality. The Eleventh Plan

budgetary support for central sector

roads is Rs. 72,530 crore (Rs. 82,032.97

crore at current price). In addition, the

sector is expected to generate Internal

& Extra Budgetary resources (IEBR)

amounting to Rs. 34,829 crore and

private sector investment of Rs. 86,792

crore during this period.

Building and housing overviewUrbanization is a key indicator of

economic development and should be

seen as a positive factor for overall

development. For instance, the

contribution of urban sector to India’s

GDP has increased from 29% in

1950–51 to 47% in 1980–81. The urban

sector presently contributes about

62%–63% of the GDP and this is

expected to increase to 75% by 2021.

The Central sector outlay for Urban

Infrastructure may be stepped up from

the present Rs. 50,000 crore to around

Rs. 70,000 crore under the ongoing

Central programme of JNNURM in the

Eleventh Five Year plan so that great

thrust could be given to water supply

and sanitation sector in the urban

areas. Likewise, the State sector outlay

which stood at Rs. 18,749 crore during

the Tenth Plan may be stepped up to

around Rs. 35,000 crore.

The Government of India introduced

policies aiding public-private

participation (PPPs) to bridge the gap

between demand and supply of urban

infrastructure.

Water and environmentAs per 54th round of NSS, 70% of urban

households reported being served by

tap and 21% by tubewell or hand pump,

66% of urban households reported

having their principal source of water

within their premises while 32% had it

within 0.2 km. Also, 26% of households

have no latrines, 35% using septic tank,

and 22% using sewerage system. In

urban areas sewerage connections

varied from 48% to 70%. According to

Central Pollution Control Board, the

waste water generated in 300 Class I

cities is about 15,800 million litres per

day while the treatment facilities exist

for hardly 3,750 million litres per day.

It is estimated that about 1,15,000

metric tonnes of municipal solid waste

is generated daily in the country. Out of

total waste generated in the million plus

cities, hardly 30% is treated before

disposal.

The Eleventh Plan aims to cover 100%

of the urban population for drinking

water, sanitation and waste

management. The Planning

Commission estimates total

investments of Rs. 2,343 billion in water

supply and sanitation sector over five

years. Of this, around Rs. 1,438 billion

has been earmarked for water supply

and the rest for the sanitation sector.

This job will require an active

participation from the private sector

players, which is already underway and

is expected to continue.

IrrigationThe gross irrigated area in the country

is only 87.23 MH. With an average

irrigation intensity of 140%, the actual

net irrigated area is likely to be around

62.31 MH, which is only 43% of the net

sown area of the country (142 MH).

Although plan expenditure on irrigation

has increased from Rs. 441.8 crore in

the First Plan to Rs. 95,743.42 crore

(outlay) in the Tenth Plan, the share in

total plan expenditure has decreased

from 23% in the First Plan to 6.3% in the

Tenth Plan.

The GoI launched Bharat Nirman

Programme in 2005–06. The irrigation

component of the programme

envisages creation of an additional 6.2

MH of irrigation potential. This target will

be achieved through major, medium,

and minor projects for surface water

and ERM schemes.

The total projected GBS for the

Eleventh Plan for MoWR is Rs. 2,870

crore (2006–07 price) and Rs. 3,246

crore (current price). As per the

constitution, irrigation is a State subject;

hence, the substantial investment will

be contributed by the State



Governments in this sector. The details

of the recommended outlays for the

Eleventh Five Year Plan and physical

targets are indicated in Table below:

(Rs in crores)

State Plan 1,82,050

State Sector Schemes, 47,015

i.e AIBP & Others

Central Plan 3,246

Total 2,32,311

ElectricalAvailability and access to energy are

considered as catalysts for economic

growth. The envisaged growth of the

economy at 9% in the Eleventh Plan

cannot be achieved without a

commensurate increase in the

availability of energy. Over half of the

country’s population does not have

access to electricity or any other form

of commercial energy.

India is both a major energy producer

and a consumer. India currently ranks

as the world’s seventh largest energy

producer, accounting for about 2.49%

of the world’s total annual energy

production. It is also the world’s fifth

largest energy consumer, accounting

for about 3.45% of the world’s total

annual energy consumption in 2004.

The main challenge before the energy

sector for fuelling the proposed growth

in the Eleventh Plan is to enhance

energy supply in cost-effective ways.

India currently has 145 gigawatts of

installed electricity generation

capacities and it plans to add another

78,000 MW during the Eleventh Plan.

Ministry of Power’s (MoP) proposal of

78,577 MW during the Eleventh Plan

includes addition of 16,553 MW of

hydro capacity and 3,380 MW from

nuclear reactors. To support GDP

growth of around 7% per annum, the

rate of growth of power supply needs to

be over 15% per year.

A public sector tentative outlay for the

Eleventh Plan is Rs. 5,54,766 crore at

constant price. This consists of

Rs. 3,43,387 crore for the Central sector

and Rs. 2,11,379 crore for the State

sector.

Real estateThe Indian real estate sector plays a

significant role in the country's

economy. Almost 5% of the country's

GDP is contributed to by the housing

sector. In the next five years, this

contribution to the GDP is expected to

rise to 6%. According to industry

players, housing accounts for 4.5% of

gross domestic product (GDP) with

urban housing accounting for 3.13%. It

has also been suggested that India's

property sector could begin to improve

from late 2009 and may attract up to

US$ 12.11 billion in real estate

investment over a five-year period.

The Indian real estate market is worth

around US$ 40-45 billion and can be

segregated into residential, commercial

and the retail and hospitality segments.

The residential sector forms 90-95% of

the Indian reality space, while

commercial segment forms 4–5% and

organised retail around 1%. The IT and

ITES sector alone is estimated to

require 150 million sq ft of office space

across urban India by 2010. The

organised retail industry is likely to

require an additional 220 million sq ft by

2010. Moreover, growth is not restricted

to a few towns and cities but is pan-

India, covering nearly all tier-I and tier-II

cities Investments in commercial real

estate are likely to increase three-fold in

five years over the previous five years.

According to the Tenth Five-Year-Plan,

there is a shortage of 22.4 million

dwelling units. Thus, over the next 10 to

15 years, 80 to 90 million housing

dwelling units will have to be

constructed with a majority of them

catering to middle and lower-income

groups. Urban housing is expected to

grow at a CAGR of 14% and is

expected to reach US$ 97.5 billion by

2010.

B. Opportunities andstrengthsThe company at present has ten

verticals comprising the following:

1. Buildings and Housing

2. Transportation

3. Water and Environment

4. Electrical

5. Irrigation

6. Oil & Gas

7. Metals

8. Power

9. International

10. Mining

We have one of the most diversified

business portfolio which will help us in

mitigating the risk of slow down in any

one particular segment. With the

starting of the four new verticals

comprising of oil and gas, metals,

power and mining, the business mix of

the company has undergone a

substantial modification. During the last

30 years, we executed various

construction projects all over the

country. The client list of the Company

includes reputed organisations in both

public and private sectors. The

Company has developed excellent

engineering, planning and project

execution skills during this period. It is

well recognised for quality

consciousness and timely completion

of the projects without cost over-run.

The track record of the Company and

proven skills of its employees at various

levels will be useful in further improving

the performance of the Company in the

years to come.

During the year under review, the

Company has bagged new orders

valued at Rs. 54.25 billion and executed

projects worth Rs. 41.55 billion. The

order book of the Company as on

March 31, 2009 stood at Rs. 121.90

billion.


Major orders received in the year 2008-09

(Rs. in million)

S. No. Particulars Value

Buildings

1. Bangalore Development Authority, T.Chowdaiah Road, Kumar Park East – Bangalore 939.40

Construction of Grade Separator (2 Nos) Along outer Ring road one at Agra Jn.

And the other at Iblur Jn.

2. The Exec. Engineer, Bangalore Metropolitan Transport Corpn. Central Offices, Civil Engg. Dept. 1,139.90

Constn.of traffic and transit management center (TTMC) under JNNURM scheme - Pkg. 3

3. Nizam's Institute of Medical Sciences – Hyderabad 931.90

Constn.of Nizam's Institute of Medical Sciences, University campus Heart Institute,

4. Executive Engineer, KSRTC, Civil Engineering Division - Mysore 1,085.90

Development of Transport Infrastructure facilities for Mysore under JNNURM

5. Engineers India Limited - New Delhi 2,518.30

Development of Sports facilities & Associated Infrastructure Development works for Common

Wealth Games

6. Golden Jubilee Hotels Ltd., Progressive Towers - Hyderabad 1,210.00

Constn.of 5 star deluxe hotels at Shilpakalavedika, Madhapur - Hyderabad

7. NIT - Agartala 990.00

Constn.of Boys & Girls hostel dining, common rooms, electrical sub-stations, drainage & Electrical

8. Bangalore Metro Rail Corporation Ltd. - Bangalore 1,506.35

Design and Constn.of elevated structures (Viaduct) excluding station portions in reach - 4

9. National Buildings Construction Corporation Limited - Delhi 1,615.50

Construction of 304 type-VI houses & 99 type - 1 house for NMDC at Netaji Nagar - Delhi

Water and Environment

1. Office of the Chief Engineer, Project, PHED - Jodhpur 2,190.84

Execution of works related to RWSS Umed Dhawa Samdari Khandap Part-III Pkg. No. 3

2. The Executive Engineer, Water supply and drainage Dept. Pimpri chinchwad Corpn. - Pimpri 1,591.70

Direct Pipeline for supply of water from Pawana Dam to the water treatment plan at sector - 23 Nigdi

3. The Engineer in Chief, Public Health - A.C Guards - Hyderabad 728.30

Investigation, Survey, Design and execution of Eluru water Supply scheme under UIDSSMT -

Constn.of off take chamber, Raw water collection wells, Pump houses, Summer storage tank

and mechanical equipments


(Rs. in million)

S. No. Particulars Value

4. HMWSSB - Hyderabad - Yellampally Reservoir 4,009.80

HMWSSB - GDWSS - Transmission of Godavari water from Yellampally Barrage for drinking

water needs of Hyd. Urban Agglomeration by lifting 775 mld of raw water through intake

structure from fore shore of yellampally.

5. Supentg. Engineer, Irrigation & CAD Dept., J.Chokka Rao DLI Scheme - Warangal 4,707.20

J.Chokkarao Devadula Lift Irrigation Scheme Phase II Package No.IV, Investigation, Design &

Execution of Tunnel of minimum Internal diameter 4.0 m ‘D’ shaped/modified horse shoe with carrying

capacity of 15.30 cusecs water

6. The Superintending Engineer, Directorate of Public Health Engineering, Eastern Circle, Kolkatta 653.99

Errection and Commissioning of ground water based piped W/s-scheme in arsenic affected

areas of different Blocks in the District of Nadia (Group-A)

Electrical

1. The Chief Engineer, Mahavitaran, Maharastra State Electricity Disbtn.Co.Ltd. - Mumbai 2,288.9

Supply,test, Transport, Construction, Errection, Testing and Commissioning of Sub transmission lines

in Osmanabad Division under Osmanbad Circle & Lathur Division under Lathur circle of Lathur Zone

2. Mahavitaran - MSEDCL - Mumbai 1,193.30

Turnkey contract infrastructure plan phase II Achalapur Division under Amaravathi

Irrigation

1. The superintending Engineer, I & CADD, Medium Irrigation Project Circle Bellampally - Adilabad 1,077.35

Pkg.No.2, Pranahitha - Chevella Lift Irrigation Scheme - detailed investigastion and preparation of

designs, drawings estimates land plan schedules and excavation of gravity canal including formation

of Embankments. (Karjalli to Suragapally) across the river Pranahitha near Tummidi Hetti Adilabad Dist.

Metal

1. SAIL - IISCO Steel Plant, Burnpur, West Bengal 2,846.40

Structural works for Basic Oxyzen furnace, continious Casting plant & Lime & Dolomite Plant.

2. SAIL - IISCO Steel Plant, Burnpur, West Bengal 1,971.90

Structural works for RE Heating Furnace (RHF) and rolling mills Pkg. No. 48B – 2

Mining

1. The Singareni Collieries Company Limited 3,599.77

Blast Hole Drilling, Controlled Blasting with Shock Tube Initiation , Excavation, Loading,

Transport and Dumping etc. of overburden at Medapalli Ocp, RG - 1 Area


Major projects completed during the year 2008-09

(Rs. in million)

S. No. Particulars Value including

Escalation

Buildings

1. Cricket Stadium - Raipur 828.26

Construction of Cricket Stadium - Raipur

2. National Institute of Technology - Warangal 652.43

Constn.of Residence hall for 1000 students and Kitchen cum Dining hall

3. Bennet Coleman & Co.Ltd. - The Times of India Group - Mumbai 1,087.93

Constn.of Times Print City - Airoli - Mumbai

4. Volks Wagen (I) Pvt.Ltd. - Pune 1,171.72

Constn.of Paint Shop and Body shop at Pune

5. Karnataka Road Development Corpn.Ltd. - Bangalore 593.30

Constn.of Bridges in Karnataka (Pkg. III) near Bangalore

6. CPWD, Cabinet Secretariat Building - Delhi 860.40

Constn.of Cabinet Secretariat Building

7. Army College of Medical Seiences - New Delhi 672.10

Permanent Accomodation for Medical Sciences

Water & Environment

8. Govt. of Andhra Pradesh, Irrigation & CAD Dept. 502.59

Pushkar Lift Irrigation Scheme - East Godavari District

9. Hyderabad Metropolitan Water Supply and Sewerage Board 1,187.13

Constn & Comig. of 339 MLD Capacity Pumping Station at Amberpet, Hyderabad

Electrical

10. Maharastra State Electricity Distribution Co.Ltd.- Mumbai 1,812.49

Turnkey Project of Transmission on lines at Lathur & Sholapur

Transportation

11. National Highways Authority of India - Palanpur 4,258.95

East West Corridor Project - Pkg. VI - Under Joint Venture - DIC NCC (JV)

12. National Highway Authority of India - New Delhi 2,649.33

Four laning and Strenthening of Existing 2 lane system on NH2 - Bihar SDB-NCC JV

13. Gujarat State Highway - Rajkot 1,026.86

Road work at Morvi section SDB - NCC JV

C. Risks and ConcernsNCC follows a process of risk

management that comprises risk

identification, risk analysis and

measurement followed by the design of

suitable risk mitigation or management

frame work covering control activities /

procedures. At the enterprise level, the

risk identification and mitigation

procedures employed include the

following:

Industry riskRisk impact

Growth and demand is dependent on

general economic conditions and a

deceleration can adversely affect the

Company’s business and its earnings.

Risk mitigation

Buoyant macroeconomic conditions in

India have been encouraging

Governments to continue economic

reforms, encourage large investments

in infrastructure and construction

industries (The Industry is the second

largest contributor to GDP growth). In

addition, a targeted double digit growth

by the end of the Eleventh Plan period

(2007-2012) only suggests an

increased spending by the Government

on infrastructure, which bodes well for

the Company. Besides, NCC has

diversified across several verticals

within the construction industry,

reducing its excessive dependence on

any single sector.

Strategy riskRisk impact

Skewed business strategy may result in

lost opportunities.

Risk mitigation

An average top line growth of 40% over

the past 5 years depicts company’s

clear vision and mission. Annual

business plans and the long-term

business strategy are discussed

thoroughly before vetting by the Board

of Directors. In addition, mid-term

reviews of the business strategy and

the annual plans ensure that the

Company initiates a mid-course

correction should the situation so

warrant. The long-term business

strategy comprises:

a. Fortifying the Company’s presence

in the select verticals;

b. Focusing on the quality of the

Company’s products;

c. Diversifying presence in different

sectors and in different countries to

reduce cyclical risk;

d. Expansion in international

markets that fit the Company’s

strategic vision;

e. Increasing focus on BOT and BOOT

projects in Transportation and

Hydropower;

All the above measures resulted in a

top line growth of 40% y-o-y over the

last five years.

Competition riskRisk impact

Increasing Competition from domestic

and international construction

companies affecting market share and

profitability

Risk mitigation

To overcome the hurdle of increasing

competition, NCC has and will continue

to:

I. Use newer technologies, methods

and providing better services to the

clients.

II. Forge alliances with large domestic

and international players in bidding for

large national and international

projects;

III. Shift business strategy from bidding

for small projects where risk of larger

reduction in price exists, to larger

projects befitting the size and scale of

NCC

Liquidity RiskRisk impact

To a large extent the Cash flow is

dependent on the credit terms

extended to the clients and effective

recovery of dues from them. Delays in

recovery of dues has a direct impact on

the liquidity position which will affect the

operations and earning of the

company.

Risk mitigation

a) The company takes effective

measures to collect the old dues from

clients and effective follow up for

collection of dues from them.

b) A close follow-up with government

departments (the major debtors) and

with others to ensure smooth flow of

funds. Short term gaps are bridged by

additional working capital facilities from

banks

Government policy riskRisk impact

Uncertainties with government policies

can significantly affect operations

Risk mitigation

The Government has been giving a

significant priority to infrastructure

investments, limiting the inherent policy

risk. The residual risk is managed by

seeking opportunities to control costs

to limit the adverse policy changes and

taking proactive actions to the needs

and priorities of the governments to

adapt and insulate the company’s

business from adverse policy changes.


Assets & Inventory RiskRisk impact

Risk of accidents, fire, theft etc., to

Company’s properties & stocks will

affect the company’s operations

affecting profitability. Similarly the

breakdowns to the company’s

machinery will affect operations and

profitability.

Risk mitigation

The company undertakes the required

steps which provide security to its

assets and inventory by taking

appropriate insurance policies etc., to

avoid or mitigate the above risks. The

company also undertakes preventive

maintenance for all its equipments

according to a predefined schedule to

avoid breakdowns.

Operational riskRisk impact

a) Competence gaps, affecting

Company’s operations

b) Equipment Breakdowns

c) Health and safety risks

Risk mitigation

(a) i) NCC provides adequate training

to all of its staff on operating

procedures and policies as well as

honing of project management skills

ii)In addition, the staff is encouraged to

upgrade their skill sets and multi-

tasking through job rotation.

(b) NCCs operating procedures for

maintenance include (a) preventive

maintenance of all equipments

according to a predefined schedules

and (b) adequate training for

maintenance staff for compliance with

operating procedures.

(c) i) Projects are executed using

standard quality certified equipment

and materials benchmarked against

global standards.

ii) Crisis management teams have been

established at all project sites to

manage any eventuality.

iii) The project operating procedures

institute the most effective accident

prevention measures across all stages

of construction activity.

Price Inflation RiskRisk impact

a) Volatility in prices of inputs and / or

changes in assumptions may cause

cost overruns affecting the profitability

b) Delay in completion of project could

result in liquidated damages and / or

additional costs affecting profitability

Risk mitigation

a) Many of the contracts have inbuilt

escalation clauses, which ensure to

compensate these increases in input

cost. In case of non escalation

contracts, the bid estimate process is

being carried out in such a way, to

insulate the possible increase in the

inputs of the contracts. Further, the

Company implemented adequate

procurement procedures that include

long-term contracts to cover price

volatilities, regular augmentation of

storage facilities for stocking of

materials and a careful review and

monitoring of the carrying cost of raw

materials. In addition, NCC has a

system of proper price estimate of

contracts, which will minimize the

impact of cost overrun.

b) NCC undertake adequate controls

on daily management of project

process and adequate monitoring

controls of project execution for

achieving set milestones and alerting

the clients for delays. Sophisticated

project management tools are

extensively used to control schedules.

D. Internal ControlSystemsThe Company has adequate system of

internal controls to ensure that all the

assets are safeguarded and are

productive. Checks and balances are in

place and are reviewed at regular

intervals to ensure that transactions are

properly authorized and reported

correctly. The internal control systems

are reviewed at regular intervals and

corrective action(s) are initiated,

wherever deemed necessary.

The Company’s net worth increased

from Rs.15.72 billion to Rs.16.85 billion,

primarily because of internal generation

of profits.

E. Financial Performance(NCCL Stand alone)1) Turnover: During the year under

review, the Company has achieved a

turnover of Rs.41.55 billion, registering

a growth of 19% over last year’s

turnover of Rs.34.78 billion. The

turnover comprises Rs.41.25 billion

from project division, Rs.195 million

from the real estate division, while small

miscellaneous jobs contributed the

remaining Rs.70 million.

2) Share capital: The Company has

allotted 12,190 equity shares during the

year under NCC-ESOP Plan-2004

resulting in the paid up share capital of

22,88,50,910 equity shares of Rs. 2

each.

3) Reserves and surplus: The

reserves and surplus of the Company

has gone up from Rs.15.21 billion to

Rs.16.40 billion in 2008-09 and the

increase on account of profits made in

2008-09.


4) Net worth: The Company’s net

worth increased from Rs.15.72 billion to

Rs.16.86 billion mainly on account of

internal generation of profits.

5) Secured/Unsecured loans:There was an increase in loans from

Rs.8.94 billion to Rs.12.44 billion. The

increase was partly due to term-loan

borrowings for procurement of

machinery and partly due to working

capital needs and partly for investment

in SPVs.

6) Fixed assets: The Company’s

fixed assets (gross block) decreased

by Rs.0.39 billion in 2008-09 – from

Rs.6.62 billion to Rs.6.23 billion. During

the year there is a sale of asset to the

extent of Rs.1.86 billion and purchase

of assets to the extent of Rs.1.47 billion

and net result is decrease in assets by

Rs.0.39 billion.

7) Investments: The investments

increased by Rs.1.75 billion. from

Rs. 5.65 billion to Rs. 7.40 billion in

2008-09 on account of investments

made in subsidiaries and Associate

Cos during the year 2008-09

8) Current assets

a) Inventories: The Company’s

inventories have gone up from Rs.5.49

billion to Rs.7.40 billion, the increase is

a little over than the proportionate

increase in the volume of activity.

b) Sundry debtors: There has been an

increase in sundry debtors, translating

into a rise in the outstandings from

Rs.8.68 billion to Rs.10.26 billion and

the collection period decreased from 91

to 90 days.

c) Loans and advances: Loans and

advances increased from Rs.13.72

billion to Rs. 14.48 billion during the

year under review. The increase

represents the advances made to

subsidiaries besides increase in

retention money and advance taxes

which, in turn, were due to increase in

the volume of activity.

F. OperationalPerformancea) Income: There has been an

increase in the gross income of the

Company from Rs.34.78 billion to

Rs.41.55 billion, registering a growth of

19% over the previous year.

b) Direct cost: The direct cost for the

year under review works out to 84.13%

of the turnover as against 83.23% last

year.

c) Overheads: Overheads, comprising

salaries and administrative expenses,

work out to Rs.2.82 billion for the year

under review as against Rs.2.18 billion

in the previous year. The increase was

partly due to a rise in salary cost per

employee and partly due to increase in

volume of business.

d) Interest cost: The interest cost is

stated after adjusting interest income.

During the year under review, there was

an increase in the interest cost from

Rs.719 million to Rs.964 million. The

interest cost has gone up from 2.07%

to 2.32% and the increase was partly

due to increase in interest rates and

partly on account of increase in the

quantum of loans.

e) Depreciation: The Company’s

depreciation for the year was Rs.533

million, up from Rs.482 million of

previous year. Compared with the

business activity, depreciation cost has

decreased from 1.39% to 1.28%.

f) Provision for tax: The Company

has provided for a sum of Rs.708

million as current tax and Rs.21 million

as deferred tax liability for the year. The

Company has also provided Rs.14

million as fringe benefit tax for the year.

g) Net profit: The Company’s

operations during the year under review

have resulted in a net profit of Rs.1.54

billion as against Rs.1.62 billion in the

previous year.

h) Dividend: The Board of Directors

have recommended a dividend of

Rs.1.10 per share (55%) and the total

payout works out to Rs.295 million as

against Rs.348 million in the previous

year.

G. Human Resources &Industrial RelationsHuman resources continued to be one

of the biggest assets of the Company.

The Management has been paying

special attention to various aspects like

training, welfare and safety and thereby

further strengthening the human

resources. Relations with the

employees remained cordial

throughout the year. The total employee

strength as of March 31, 2009 stood at

3,895.



CorporateGovernance Report

In compliance with Clause 49 of the Listing Agreement entered into with the stock exchanges, the

Company hereby submits the report on the matters as mentioned in the said Clause and practices

followed by the Company.

1. Philosophy of the Company on the Code of GovernanceThe Company aims at achieving transparency, accountability and equity in all facets of its operations

on a continuous basis and in all interactions with the stakeholders, including the shareholders,

employees, government, lenders and other constituents while fulfilling the role of a responsible

corporate representative committed to good corporate practices. The Company is committed to

achieve the good standards of Corporate Governance on a continuous basis by laying emphasis

on ethical corporate citizenship and establishment of good corporate cultures which aim at true

Corporate Governance. The Corporate Governance process and systems have gradually

strengthened over the years.

The Company believes, all its operations and actions must result in enhancing the overall

shareholder value in terms of maximisation of shareholder’s benefits, among others, over a sustained

period of time.

2. Board of DirectorsAs on March 31, 2009 the Company’s Board of Directors comprised 13 Directors, consisting of six

Executive Directors, three Non-Executive Directors and four Independent Directors as defined under

the Listing Agreement with Indian stock exchanges. The below table gives the composition of the

Company’s Board, category, number of Board Meetings held during the year, attendance of each

Director at the Board Meetings and the last Annual General Meeting and other Directorships and

memberships of Committees held by each of the Director during the financial year.


* Ceased to be the Director of theCompany w.e.f July 31, 2008

** Ceased to be the Director of theCompany w.e.f. October 27, 2008

*** Ceased to be the Director of theCompany w.e.f January 19, 2009

****Ceased to be an Alternate Director to

Nominee Director Sri Akhil Gupta w.e.fMarch 23, 2009 and was reappointedon May 28, 2009.

# Other Directorships(directorships otherthan NCC) are those on the Boards ofpublic limited companies in terms ofSection 275 of the Companies Act,1956.

## Membership/ Chairmanship in Auditand Investor / Shareholder GrievanceCommittees of public limitedcompanies (including NCC) only

$ Nominee Director of Blackstone Group

$$ Alternate Director to Sri Akhil Gupta

Name Category Designation No. of Board No. of Board Other Committee Chairman- Attendancemeetings held meetings Director- Member- ship in of each during the attended ships# ships## Commi- Director atfinancial year ttees## last AGM

Dr. A. V. S. Raju* Promoter/ Chairman 5 2 NA NA NA YesNon-ExecutiveDirector

Sri S. Venkatachalam Non-Executive Director 5 5 2 2 1 Yesand IndependentDirector

Sri P. C. Laha Non-Executive Director 5 5 _ 2 _ Yesand IndependentDirector

Sri Rakesh R. Non-Executive and Director 5 _ 11 1 _ NoJhunjhunwala Non-Independent

DirectorSri R. N. Raju Promoter/ Wholetime 5 5 _ _ _ No

Executive Director DirectorSri A. S. N. Raju Promoter/ Wholetime 5 5 2 2 _ Yes

Executive Director DirectorSri N. R. Alluri Promoter/ Director 5 4 4 _ _ No

Non-ExecutiveDirector

Sri J. V. Ranga Raju Promoter/ Wholetime 5 _ 1 _ _ NoExecutive Director Director

Sri A. V. N. Raju Promoter/ Wholetime 5 _ 2 _ _ No Executive Director Director

Sri A. G. K. Raju Promoter/ Executive 5 4 4 4 1 NoExecutive Director Director

Sri A. A. V. Promoter/ Managing 5 5 4 2 _ Yes Ranga Raju Executive Director DirectorSmt Bala Non-Executive Nominee 5 _ NA NA NA NoDeshpande** and Independent Director

DirectorProf V. S. Raju*** Non-Executive Director 5 2 NA NA NA Yes

and IndependentDirector

Sri P. Abraham Non-Executive Director 5 5 11 5 _ Yesand IndependentDirector

Sri R. V. Shastri Non-Executive Director 5 5 1 3 1 Yesand IndependentDirector

Sri Akhil Gupta Non-Executive/ Nominee 5 4 3 3 _ NoNon Independent Director$Director

Sri Amit Dixit **** Non-Executive/ Alternate 5 1 _ _ _ NoNon Independent Director$$Director


The Company’s Board met five times

with the maximum time gap of four

months between any two Board

Meetings on May 30, 2008, July 31,

2008, October 27, 2008, January 27,

2009 and March 23, 2009. The

Company convened one Board

Meeting in each quarter as required

under the Companies Act, 1956.

As mandated by the revised Clause 49,

the Independent Directors on the

Company’s Board

Apart from receiving sitting fee for

attending meetings, did not have any

material or pecuniary relationships or

transactions with the Company, its

promoters, Directors, senior

management or its holding company,

subsidiaries and associates which may

affect the independence of the Director

Are not related to the promoters or

persons occupying management

positions at the Board level or at one

level below the Board.

Have not been executives of the

Company in the immediate preceding

three financial years

Are not partners or executives or were

not so during the preceding three years

of

• Statutory audit firm or the internal

audit firm associated with the Company

• Legal firm (s) and consulting firm (s)

having material association with the

Company

Are not material suppliers, service

providers or customers or lessors or

lessees of the Company, affecting their

independence

Are not substantial shareholders of

the Company i.e. do not own 2% or

more of the block of voting shares

Independent Directors are not related

to each other and to the other Directors

of the Company in terms of Section 6

read with Schedule IA of the

Companies Act, 1956

The Promoter Directors namely

Dr. A. V. S. Raju, Sri A. A. V. Ranga

Raju, Sri A. S. N. Raju, Sri A. G. K. Raju,

Sri N. R. Alluri, Sri A. V. N. Raju and

Sri J. V. Ranga Raju are related to each

other in terms of the definition ‘relative’

under Section 6 read with Schedule IA

of the Companies Act, 1956.

Dr. A. V. S. Raju is the father of

Sri A. A. V. Ranga Raju, Sri A. S. N.

Raju, Sri A. G. K. Raju, Sri N. R. Alluri

and Sri A. V. N. Raju and father in law of

Sri J. V. Ranga Raju. The

aforementioned Promoter Directors are

not related to the other Board

members.

Prof V. S. Raju, Independent Director,

resigned and ceased to be a Director

of the Company effective January 19,

2009. Sri A. J. Jaganathan, was

appointed by the Board as an

Additional Director of the Company

(Non-Executive and Independent

Director) effective May 28, 2009.

Information supplied to theBoardAs a policy measure, all the major

decisions which involve new

investments and capital expenditure, in

addition to the matters which statutorily

require Board approval, are put up for

consideration of the Board. Inter-alia,

the following information is regularly

provided to the Board as part of the

agenda papers well in advance of the

Board meetings or is tabled at the

Board Meeting.

Annual operating plans, budgets and

any updates

Capital budgets and any updates

Quarterly, half-yearly and annual

results of the Company and its

operating divisions and

minutes/financial statements of the un-

listed subsidiary companies

Minutes of the meetings of the Audit

Committee and other Committees of

the Board

Show cause, demand, prosecution

notices and penalty notices which are

materially important

Fatal or serious accidents, dangerous

occurrences, any material effluent or

pollution problems

Any material default in financial

obligations to and by the Company, or

substantial non-payment by clients

Any issue, which involves possible

public or product liability claims of

substantial nature, including any

judgment or order which may have

passed strictures on the conduct of the

Company or taken an adverse view

regarding another enterprise that can

have negative implications on the

Company

Details of any joint venture or

collaboration agreement.

Non-compliance with any regulatory,

statutory or listing requirement and

shareholders service such as non-

payment of dividend, delay in share

transfer, among others.

Code of ConductThe Board of Directors of the Company

laid a Code of Conduct for Directors

and senior management personnel.

The Code of Conduct is posted

on the Company’s web-site

www.ncclimited.com. All Directors and

designated personnel in the senior


management affirmed compliance with

the Code for the year under review. The

declaration to this effect, signed by Sri

A. A. V. Ranga Raju, Managing Director,

is annexed to this report.

Board CommitteesThe Company has five Board level

Committees, namely the Audit

Committee, the HR and the

Compensation Committee, the

Shareholders’/Investors’ Grievance

Committee, the Executive Committee

and the Allotment Committee.

3. Audit Committee of theBoardThe Audit Committee presently

comprises three Non-Executive

Directors, of which two are Independent

Directors viz., Sri R. V. Shastri,

(Chairman of the Committee),

Sri P. Abraham and Sri Akhil Gupta,

Nominee Director of M/s. Blackstone

who is a Non-Executive and Non-

Independent Director. The members of

the Committee are financially literate

and bring in expertise in the fields of

finance, strategy, banking, energy and

management. Sri R. V. Sastri,

Independent Director has accounting or

related financial management

expertise.

Smt Bala Deshpande, Nominee of ICICI

Venture Funds, ceased to be the

member of the Audit Committee by

virtue of her resignation effective

October 27, 2008 and Prof V. S. Raju

ceased to be the member of the

Committee by virtue of his resignation

effective January 19, 2009.

The Audit Committee met four times

during the year on May 30, 2008, July

31, 2008, October 27, 2008 and

January 27, 2009. The Company is in

compliance with the requirements of

Clause 49 in terms of time gap between

any two Audit Committee Meetings.

Sri R. V. Sastri, Chairman of the

Committee, was present at the last

Annual General Meeting of the

Company held on July 31, 2008.

Sri R. V. Shastri and Sri P. Abraham

were present for all the meetings held

on May 30, 2008, July 31, 2008,

October 27, 2008 and January 27,

2009. Sri Akhil Gupta was present for

the meetings held on July 31, 2008,


2009. Prof V. S. Raju was present for

the meetings held on July 31, 2008 and

October 27, 2008.

The terms of reference as stipulated by

the Board to the Audit Committee

include

a. Oversight of the Company’s financial

reporting process and the disclosure of

its financial information

b. Recommending the appointment

and removal of external auditors,

fixation of audit fee and also approval

for payment for any other services

c. Reviewing with the management, the

annual financial statements before

submission to the Board, focusing

primarily on

Any changes in accounting policies

and practices

Major accounting entries based on

exercise on judgment by management

Qualifications in the draft audit report

Significant adjustments arising out of

audit

The going concern assumption

Compliance with accounting

standards

Compliance with stock exchange and

legal requirements concerning financial

statements

Disclosure of any related party

transactions

d. Reviewing with the management,

external and internal auditors, and the

adequacy of internal control systems

e. Reviewing, with the management, the

quarterly financial statements before

submission to the Board for approval

f. Discussion with internal auditors

regarding any significant findings and

follow up there on

g. Reviewing the findings of any internal

investigations by the internal auditors

into matters where there is suspected

fraud or irregularity or failure of internal

control systems of a material nature

and reporting the matter to the Board

h. Discussion with statutory auditors

before the audit commences, about the

nature and scope of audit as well as

post-audit discussion to ascertain any

area of concern

i. Carrying out any other function as

mentioned in the terms of reference of

the Audit Committee

The Company Secretary is the

Secretary to the Audit Committee.

4. HR and CompensationCommitteeThe HR and Compensation Committee

of the Board comprises of four Non-

Executive Directors, of which

three are Independent Directors Viz.,

Sri P. C. Laha (Chairman of the

Committee), Sri S. Venkatachalam and

Sri P. Abraham and Sri Akhil Gupta,

Nominee Director of M/s. Blackstone

who is a Non-Executive and Non-

Independent Director.


Besides the above remuneration, the Managing Director, Executive Director and the Wholetime Directors are also eligible for

gratuity and encashment of leave at the end of their respective tenures as per the rules of the Company.

The Independent and Non-Executive Directors of the Company receive sitting fee for attending the Board and Committee

Meetings at the rate of Rs.10,000 per Board and Committee Meeting attended.

Prof V. S. Raju, Independent Director,

ceased to be the Chairman as well as

Member of the HR and Compensation

Committee by virtue of his resignation


Sri P. C. Laha was appointed as

Chairman of the said Committee


The HR and Compensation Committee

reviews the remuneration of the

managerial personnel like Managing

Director and Wholetime Directors apart

from administering and implementing

the stock option plans to the

Company’s employees. The

remuneration policy is directed towards

rewarding performance, based on

review of achievements on a periodical

basis. The remuneration policy is to be

in consonance with the existing industry

practices. The Committee also

considers and approves issues relating

to manpower planning, attrition, training

and review of appraisal norms in

relation to the employees, among

others.

The Committee met two times during

the year i.e. on May 30, 2008 and

October 27, 2008. Prof V. S. Raju was

present for the meeting held on

October 27, 2008, Sri Venkatachalam

was present for the meetings held on

May 30, 2008 and October 27, 2008.

Sri P. Abraham was present for two

meetings held on May 30, 2008 and

October 27, 2008. Sri Akhil Gupta,

Nominee Director of M/s. Blackstone,

who was appointed as a Nominee

Director and Member of the HR and

Compensation Committee, was present

for the meeting held on October 27,

2008.

Details of remuneration/sittingfee paid to the Directors for theyearThe details of remuneration covering

salary and other benefits paid for the

year ended March 31, 2009 to the

Chairman, Managing Director,

Executive Director and the Wholetime

Directors of the Company including the

commission and the details of the

sitting fee paid to the Non-Executive

Directors are as follows-(Amount in Rs.)

Name of the Director Salary Other benefits Commission Sitting Total

(including fee

perquisites,

allowances)

Dr. A. V. S. Raju – – 82,16,000 – 82,16,000

Sri A. A. V. Ranga Raju 96,00,000 1,13,28,277 2,46,47,000 – 4,55,75,277

Sri A. G. K. Raju 48,00,000 58,41,784 1,23,24,000 – 2,29,65,784

Sri A. S. N. Raju 48,00,000 59,41,497 1,23,24,000 – 2,30,65,497

Sri R. N. Raju 48,00,000 57,75,806 – – 1,05,75,806

Sri J. V. Ranga Raju 48,00,000 57,47,508 – – 1,05,47,508

Sri A. V. N. Raju 48,00,000 49,92,276 1,23,24,000 – 2,21,16,276

Sri P. C. Laha – – – 1,10,000 1,10,000

Sri S. Venkatachalam – – – 1,10,000 1,10,000

Smt Bala Deshpande – – – – –

Prof V. S. Raju – – – 50,000 50,000

Sri P. Abraham – – – 1,10,000 1,10,000

Sri R. V. Shastri – – – 1,30,000 1,30,000

Sri Akhil Gupta/Sri Amit Dixit – – – 1,50,000 1,50,000

5. Shareholders’/Investors’Grievance CommitteeThe constitution of the Shareholders’/

Investors’ Grievance Committee of the

Board comprises five Directors viz.,

Sri S. Venkatachalam, (Chairman of

the Committee), Sri P. C. Laha,

Sri R. V. Shastri, Sri Akhil Gupta and

Sri A. G. K. Raju as its members.

The Committee primarily focuses on

shareholder grievances, inter-alia,

approves the issue of duplicate share

certificates and oversees and reviews

all matters connected with servicing of

investors. The Committee oversees the

performance of the Registrar and

Transfer Agents and recommends

measures for overall quality

improvement of investor services. The

Chairman of the Committee is an

Independent Director and the Company

Secretary is the Secretary of the

Committee. Sri M. V. Srinivasa Murthy,

Company Secretary and Vice-President

(legal) was designated as the

Compliance Officer.

The Committee met four times during

the year i.e. on May 30, 2008, July 31,

2008, October 27, 2008 and January

27, 2009. Sri S. Venkatachalam,

Sri P. C. Laha and Sri R. V. Shastri were

present for all the meetings held as

above. Sri A. G. K. Raju was present for

the meetings held on May 30, 2008,


2009. Sri Akhil Gupta, Nominee Director

of M/s. Blackstone, was present for the

meetings held on July 31, 2008,


2009.

During 2008-09, the Company received

37 complaints from the shareholders/

investors and the complaints were

promptly attended to and outstanding

complaints as on March 31, 2009 were

nil. The Company received 26 requests

for share transfer and 140 requests for

shares’ dematerialization during the

year. All the requests were approved

and dealt with and there were no

pending requests as on March 31,

2009. The Company designated a

separate email id for investor

grievances reachable at

[email protected].

6. Initiatives on preventionof insider trading practicesIn compliance with the SEBI regulations

on prevention of insider trading, the

Company framed a comprehensive

Code of Conduct for its Directors and

designated employees. The Code lays

down guidelines, which advises the

Directors and the designated

employees on the procedures to be

followed and disclosures to be made,

while dealing with shares of the

Company, and cautions them on

consequences of violations.

7. Subsidiaries All the subsidiary companies of the

Company are Board managed with

their Board having the rights and

obligations to manage such companies

in the best interest of their stakeholders.

There are no material non-listed Indian

subsidiary companies under the

Company to nominate its Directors on

such subsidiaries. As a majority

shareholder, the Company has its

representatives on the Boards of the

subsidiary companies and monitors the

performance of such companies, inter-

alia, by the following means

a) Financial statements and particulars

of investments made by the unlisted

subsidiary companies are reviewed

quarterly by the Audit Committee of the

Company

b) Minutes of the meetings of the

unlisted subsidiary companies are

placed before the Company’s Board

regularly

c) A statement containing all significant

transactions and arrangements entered

into by the unlisted subsidiary

companies is placed before the

Company’s Board


Shares held by Non-Executive Directors as on March 31, 2009

Name of the Director Number of shares held % of the paid-up capital of the Company

Sri S. Venkatachalam 11,160 0.005

Sri Rakesh Jhunjhunwala 50,00,000 2.185

Sri N. R. Alluri 40,88,680 1.787


The above resolutions were passed on

show of hands with requisite majority.

There were no postal ballot resolutions

passed during the year and there is no

proposal to conduct postal ballot for

any matter in the ensuing Annual

General Meeting.

9. Disclosuresa. During 2008-09, certain transactions

were entered into with related parties.

The details thereof are given under note

number 14 forming a part of notes on

accounts.

b. There were no occasions of non-

compliance by the Company and no

penalties or strictures were imposed on

the Company by the stock exchanges

or the SEBI or any statutory authority,

on any matter related to capital

markets, during the last three years.

c. The Company has no written whistle

blower policy.

d. During the year, there was no

treatment of any transaction different

from that of prescribed in the

Accounting Standards as required

under Section 211(3C) of the

Companies Act, 1956.

e. A report on risk management forms a

part of the Management Discussion

and Analysis in this Annual Report.

f. During the year, the Company did not

raise any equity by way of

public/rights/preferential issues.

g. This Annual Report has a detailed

section on Management Discussion

and Analysis.

h. The information on appointment /

reappointment of Directors and their

brief profiles are disclosed in the Notice

of the ensuing Annual General Meeting

for the information of shareholders.

Year Type of Location Date Time Special resolutions passed

meeting

2005-06 AGM Sri Satya Sai Nigamagamam 31-08-2006 3.00 pm Amendment of Capital Clause

8-3-987/2, Srinagar Colony, in Articles

Hyderabad - 500073 Increase of FII-investment limit

Appointment of Sri A. V. N. Raju

as the Wholetime Director

2006-07 AGM Sri Satya Sai Nigamagamam 30-07-2007 4.00 pm Reappointment of Sri A. A. V. Ranga

8-3-987/2, Srinagar Colony, Raju as the Managing Director

Hyderabad - 500073 Reappointment of Sri A. G. K. Raju

as the Executive Director

Reappointment of Sri J. V. Ranga

Raju as the Wholetime Director

Revision in the remuneration payable

to Sri R. N. Raju, Wholetime Director


to Sri A. S. N. Raju, Wholetime Director


to Sri A. V. N. Raju, Wholetime Director

Amendment of Articles of Association

Payment of commission to Sri A. V.

S. Raju, Chairman

Approval of ESOP 2007 plan and

ESOPs to employees of subsidiary

companies

2007-08 AGM Sri Satya Sai Nigamagamam 31-07-2008 3.00 pm No special resolution was passed

8-3-987/2, Srinagar Colony,

Hyderabad - 500073

8. General Body Meetings

Market price dataThe monthly high and low stock quotations during the last financial year and performance in comparison to BSE and NSE are

given below

High, low and number of shares traded during each month on BSE and NSE in the last financial year


Month BSE NSE

High price Low price No. of shares High price Low price No. of shares

Rs. Rs. traded Rs. Rs. traded

April 2008 221.00 181.00 5,948,575 219.95 180.70 18,802,227

May 2008 233.90 183.10 4,216,856 233.45 183.65 14,999,410

June 2008 199.95 130.10 2,920,075 198.95 131.05 12,179,933

July 2008 159.00 107.15 12,109,238 158.90 108.10 35,691,493

10. Means ofcommunicationThe Company established communication

system primarily through its corporate

website viz. www.ncclimited.com. The

quarterly, half-yearly, annual financial

results, press releases and

presentations made to analysts are

posted on the Company’s website for

the shareholders’ information.

Quarterly resultsThe quarterly results of the Company

are published in leading newspapers

such as The Economic Times,

Eenadu/Andhra Prabha (regional

language), along with the official press

releases.

Dates of publication of quarterly

results

1st quarter ended June 30, 2008:

August 1, 2008

2nd quarter ended September 30, 2008:

October 28, 2008

3rd quarter ended December 31, 2008:

January 28, 2009

4th quarter ended March 31, 2009:

May 29, 2009

11. General shareholders’information

19th Annual General Meeting

Day, date and time:

Thursday, July 30, 2009 at 3.00 pm

Venue:

Bharatiya Vidya Bhavan, 5-9-1105,

Basheerbagh, King Koti, Hyderabad -

500029

Financial calendarThe tentative calendar of events for the

year 2009-2010 is given below

Results for quarter ending June 30,

2009: July 30, 2009

Results for quarter ending September

30, 2009: October 31, 2009

Results for quarter ending December

31, 2009: January 29, 2010

Results for year ending March 31, 2010:

May 31, 2010

Annual General Meeting for the financial

year 2010: July 30, 2010

Book closure dateJuly 16, 2009 to July 21, 2009 (both

days inclusive) for payment of dividend.

Dividend payment dateAugust 4, 2009(subject to approval of

shareholders at AGM)

Listing on stock exchanges andstock codes

Equity shares

Bombay Stock Exchange Limited

(BSE): 500294

National Stock Exchange of India

Limited (NSE): NAGARCONST

Listing fee for the financial year(s) 2008-

09 and 2009-10 has been paid to the

Indian stock exchanges.

Global depositary receipts (GDR)The Company’s GDRs are listed on the

Luxembourg Stock Exchange and

traded on the London Stock Exchange

and on portal platform of NASDAQ as

permitted securities.

International SecuritiesIdentification Number (ISIN)The Company’s ISIN for equity shares

is INE868B01028 (to be quoted on all

transactions related to dematerialised

equity shares of the Company).

During the year the company issued

1,000 rated taxable secured

redeemable non-convertible debentures

(rated as AA-/ Stable by CRISIL) of face

value of Rs. 10 lakh each aggregating

to Rs. 100 crore to Life Insurance

Corporation of India on a private

placement basis and the ISIN for the

non-convertible debentures issued by

the Company is INE868B07017.


Performance in comparison to broad based indices such as Index Nifty (NSE) and Index Sensex (BSE)

Notes: 1. All values are indexed to 100 as on April 1, 20082. S & P CNX Nifty is a well diversified 50 stock index accounting for 22 sectors of the economy

4739.55

Index NCC

Index Nifty

207.45

3020.95

61.80

120.00

100.00

80.00

60.00

40.00

20.00

0.00Apr

2008May2008

Jun2008

Jul2008

Aug2008

Sep2008

Oct2008

Nov2008

Dec2008

Jan2009

Feb2009

Mar2009

Mar 312009

Notes: 1. All values are indexed to 100 as on April 1, 20082. Sensex involves dividing the free-float market capitalisation of 30 companies in the Index by the Index Divisor.

Index NCC

Index Sensex

15626.62

207.95

9708.50

61.90

120.00

100.00

80.00

60.00

40.00

20.00

0.00Apr

2008May2008

Jun2008

Jul2008

Aug2008

Sep2008

Oct2008

Nov2008

Dec2008

Jan2009

Feb2009

Mar2009

Mar 312009

Month BSE NSE

High price Low price No. of shares High price Low price No. of shares

Rs. Rs. traded Rs. Rs. traded

August 2008 146.90 116.40 11,938,754 147.20 117.60 35,609,427

September 2008 136.20 88.10 4,902,357 136.10 88.00 20,098,021

October 2008 100.40 40.50 11,711,775 100.40 40.10 43,312,127

November 2008 84.30 50.15 9,874,171 84.55 50.35 35,951,452

December 2008 80.05 54.95 6,911,279 79.95 54.20 24,486,341

January 2009 95.45 45.75 14,587,782 95.65 45.05 49,907,518

February 2009 54.75 41.50 5,844,561 54.60 41.10 22,574,860

March 2009 64.10 34.25 6,996,506 63.90 34.30 22,758,167

Movement of NCC share price in 2008-09 on NSE

Movement of NCC share price in 2008-09 on BSE

Share transfer system The share transfers which are received

in physical form are processed and the

share certificates are returned within a

period of 10 to 15 days from the date of

receipt, subject to the documents being

found valid and complete in all

respects. The Company appointed

M/s. Sathguru Management and

Consultants Pvt. Ltd. w.e.f. April 1, 2003

as the Registrar and Transfer Agents for

dealing with all the activities connected

with both physical and demat

segments pertaining to the share

transactions of the Company.

Registrar and Transfer AgentsSathguru Management Consultants

Pvt. Ltd.,

Plot No 15, Hindi Nagar, Punjagutta,

Hyderabad - 500034

Phone : 40-23356507

Fax : 040-40040554

E-Mail : [email protected]


Distribution of shareholding as on March 31, 2009 No. of shares held Shareholders Details of shareholding

From To No. % No. of shares %

1 5000 56,742 97.36 12,019,901 5.25

5,001 10,000 835 1.43 3,031,820 1.33

10,001 20,000 323 0.55 2,475,397 1.08

20,001 30,000 92 0.16 1,182,507 0.52

30,001 40,000 44 0.08 792,483 0.35

40,001 50,000 23 0.04 529,443 0.23

50,001 1,00,000 60 0.10 2,224,469 0.97

1,00,001 and above 164 0.28 206,594,890 90.27

Total 58,283 100 228,850,910 100.00

Shareholding pattern as on March 31, 2009

Category No of shareholders % of shareholding

Promoter’s holding

Indian promoters(including persons acting in concert) 55,788,227 24.38

Foreign promoters – –

Sub total 55,788,227 24.38

Non-promoter’s holding

Institutional investors

Mutual funds 50,499,304 22.07

Banks, financial institutions and

insurance companies 470,820 0.21

Central government/State government 107,554 0.05

Foreign institutional investors 61,857,755 27.03

Sub total 112,935,433 49.35

Others

Private corporate bodies 20,043,729 8.76

Indian public 37,820,209 16.53

NRIs / OCBs 2,119,412 0.92

GDRs (shares held by depositary against GDRs) 143,900 0.06

Sub total 60,127,250 26.27

Total 228,850,910 100.00


Dematerialisation of shares andliquidityOver 99.08% of the outstanding shares

were dematerialised up to March 31,

2009. Trading in equity shares of the

Company is permitted only in

dematerialised form w.e.f. January 29,

2001 as per notification issued by the

Securities and Exchange Board of India

(SEBI). The Company’s shares are

liquid and actively traded. The monthly

volume of the Company’s shares

traded on the Indian stock exchanges

is a part of this report.

Outstanding GDRs and theirimpact on equity sharesAs on March 31, 2009, there were

approximately 143,900 GDRs pending

for conversion. The overseas

depositary is Deutsche Bank Trust

Company Americas at 60 Wall Street

New York NY 10005, USA and the

custodian is ICICI Bank Ltd, securities

processing division, North Tower, II

floor, ICICI towers, Bandra Kurla

Complex, Mumbai - 400051, India.

Dividend history since 2000-01

Unclaimed dividendIn terms of Sections 205A and 205C of

the Companies Act, 1956, the

Company is required to transfer the

amount of dividend remaining

unclaimed for a period of seven years

from the date of transfer to the

unclaimed dividend account to the

Investor Education and Protection Fund

(IEPF). Shareholders are requested to

ensure that they claim the dividend(s)

from the Company before transfer to

the Investor Education and Protection

Fund. In compliance with Section

205A(6) & (7) of the Companies Act,

1956, the Company transferred on

November 27, 2008 the unclaimed

dividend amounting to Rs. 2,75,658

pertaining to the year 2000-2001 to the

IEPF.

Due dates for transfer of dividend unclaimed to IEPF

Financial year Type of dividend Date of declaration Amount of unclaimed Due date for transfer

dividend outstanding to IEPF

as on 31.3.2009 (Rs.)

2001-2002 Final 27.09.2002 4,06,105 01.12.2009

2002-2003 Final 26.09.2003 4,35,006 30.11.2010

2003-2004 Final 25.09.2004 3,81,996 30.11.2011

2004-2005 Final 30.07.2005 4,00,154 03.10.2012

2005-2006 Final 31.08.2006 6,12,269 05.11.2013

2006-2007 Interim 21.03.2007 7,54,816 25.05.2014

2006-2007 Final 30.07.2007 4,24,761 03.10.2014

2007-2008 Final 31.07.2008 11,46,089 03.10.2015

10

00-0

116

22

30

40

60

80

60

65

55

4020

01-0

2

02-0

3

03-0

4

04-0

5

05-0

6

06-0

7

07-0

8

08-0

9

20

30

40

50

60

70

80

90


Top ten shareholders of the Company as on March 31, 2009

Sl. No. Name of the shareholder Number of shares % of shareholding

1. Blackstone GPV Capital Partners Mauritius V-A Ltd 21,375,135 9.34

2. A V S R Holdings Private Limited 18,167,167 7.94

3. HDFC Trustee Company Limited A/c HDFC Growth Fund 11,467,218 5.01

4. SBIMF Magnum Sector Fund Umbrella Contra 11,309,402 4.94

5. Bajaj Allianz Life Insurance Company Ltd 10,247,622 4.48

6. HSBC Global Investment Funds A/c HSBC Global 10,088,000 4.41Investment Funds Mauritius Limited

7. Mrs. Rekha Jhunjhunwala 9,200,000 4.02

8. Citigroup Global Markets Mauritius Private Ltd 8,488,594 3.71

9. ICICI Prudential Balance Fund 6,860,525 3.00

10. Mr. Alluri Ananta Venkata Ranga Raju 5,931,740 2.59

Corporate benefits to investorsBonus issue of fully paid-up equity

shares in the 2006-07 in the ratio of 1:1

Investor’s correspondencePhysical/Electronic mode

Sathguru Management Consultants

Pvt. Ltd.,

Plot No 15, Hindi Nagar, Punjagutta,

Hyderabad 500034

Phone : 040-23356507

Fax : 040-40040554


Shareholders generalcorrespondenceSecretarial Department,

41, Nagarjuna Hills, Punjagutta,

Hyderabad-500082,

Phone : 040-23255200

Fax : 040-30589455


Compliance with Clause 49

Mandatory requirements

The Company complied with all the

applicable mandatory requirements of

Clause 49.

Non-mandatory requirements

The Company constituted the HR and

Compensation Committee of the Board

of Directors. Necessary details are

provided under the section “HR and

Compensation Committee of the

Board.”

The Company did not adopt other

non-mandatory requirements.

Declaration of compliance with theCode of Conduct

I hereby confirm that the Company has obtained from all the members of the Board and senior management personnel,

affirmation that they have complied with the Code of Conduct for Board members and senior management personnel in respect

of the financial year ended March 31, 2009.

For Nagarjuna Construction Company Limited

Place: Hyderabad A. A. V. Ranga Raju

Date: May 28, 2009 Managing Director


In relation to the Audited Financial Accounts of the Company as at 31st March , 2009, we hereby certify that

a) We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge and

belief:

i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might

be misleading;

ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing

accounting standards, applicable laws and regulations.

b) There are to the best of our knowledge and belief, no transactions entered into by the company during the year which are

fraudulent, illegal or violative of the Company’s Code of Conduct.

c) We accept responsibility for establishing and maintaining internal controls for financial reporting and we have evaluated the

effectiveness of internal control systems of the Company pertaining to financial reporting and we have disclosed to the

auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware

and the steps we have taken or propose to take to rectify these deficiencies.

d) We have indicated to the auditors and the Audit Committee:

i) significant changes in internal control over financial reporting during the year;

ii) significant changes in accounting policies during the year and that the same have been disclosed in the notes to the

financial statements; and

iii) instances of significant fraud of which we have become aware and the involvement therein, if any, of the management

or an employee having a significant role in the Company’s internal control system over financial reporting.

Place: Hyderabad A.A.V. Ranga Raju R. S. Raju

Date: May 28, 2009 Managing Director Vice President (F&A)

(Chief Executive Officer) (Chief Financial Officer)

Chief Executive Officer andChief Financial Officer CertificationUnder Clause 49 Of The Listing Agreement With The Stock Exchanges


M. Bhaskara Rao & Co. Deloitte Haskins & Sells

Chartered Accountants Chartered Accountants

5D, Fifth Floor 1-8-384 & 385, 3rd Floor

6-3-352, Somajiguda Gowra Grand, S.P.Road

Hyderabad – 500 082 Secunderabad – 500 003

To the members of

Nagarjuna Construction Company Limited

We have examined the compliance of conditions of Corporate Governance by Nagarjuna Construction Company Limited, for

the year ended on March 31, 2009, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock

exchanges.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination has been

limited to a review of the procedures and implementations thereof adopted by the Company for ensuring compliance with the

conditions of Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the

financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representation made

by the Directors and the management, we certify that the Company has complied with the conditions of the Corporate

Governance as stipulated in Clause 49 of the above mentioned Listing Agreement.

We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or

effectiveness with which the management has conducted the affairs of the Company.

For M. Bhaskara Rao & Co. For Deloitte Haskins & Sells


M. Bhaskara Rao P.R. Ramesh

Partner Partner

Membership No.5176 Membership No.70928

Place: Hyderabad Mumbai

Date: May 28, 2009 May 28, 2009

Auditors Certificate on Corporate Governance


Financialsection


Auditors’ Report

1. We have audited the attached Balance Sheet ofNagarjuna Construction Company Limited as at March31, 2009, the Profit and Loss Account for the year endedon that date and the Cash Flow Statement for the yearended on that date both annexed thereto in which areincorporated the returns from Oman and Nepal branchesand certain Joint Ventures (“the Branches”) audited byother auditors. These financial statements are theresponsibility of the Company’s management. Ourresponsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accountingprinciples used and significant estimates made by themanagement, as well as evaluating the overall financialstatement presentation. We believe that our audit providesa reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order,2003 (CARO) issued by the Central Government of Indiain terms of sub-section (4A) of section 227 of theCompanies Act, 1956, we enclose in the Annexure astatement on the matters specified in paragraphs 4 and 5of the said Order.

4. Further to our comments in the Annexure referred to inparagraph 3 above, we report that:

a) we have obtained all the information and explanations,which to the best of our knowledge and belief werenecessary for the purposes of our audit;

b) in our opinion, proper books of account as required

by law have been kept by the Company so far as itappears from our examination of those books andproper returns adequate for the purposes of our audithave been received from the Branches not visited byus. The Branch Auditors Reports have been forwardedto us and appropriately dealt with;

c) the Balance Sheet, Profit and Loss Account and CashFlow Statement dealt with by this report are inagreement with the books of account and with theaudited returns from the Branches;

d) in our opinion, the Balance Sheet, Profit and LossAccount and Cash Flow Statement dealt with by thisreport comply with the Accounting Standards referredto in sub-section (3C) of section 211 of the CompaniesAct, 1956;

e) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state ofaffairs of the Company as at March 31, 2009;

ii) in the case of the Profit and Loss Account, of theprofit for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of thecash flows for the year ended on that date.

5. On the basis of written representations received from thedirectors, as on March 31, 2009 and taken on record bythe Board of Directors, we report that none of the directorsis disqualified as on March 31, 2009 from being appointedas a director in terms of clause (g) of sub-section (1) ofsection 274 of the Companies Act, 1956.

for M. Bhaskara Rao & Co. for Deloitte Haskins & SellsChartered Accountants Chartered Accountants

M. Bhaskara Rao P. R. RameshPartner PartnerMembership No. 5176 Membership No. 70928Hyderabad, May 28, 2009 Mumbai, May 28, 2009

THE MEMBERS OFNAGARJUNA CONSTRUCTION COMPANY LIMITED


Annexure to the Auditors’ Report

i) In respect of its fixed assets:a) The Company has maintained proper records

showing full particulars, including quantitative detailsand situation of its fixed assets.

b) A major portion of the fixed assets have beenphysically verified during the year by themanagement in accordance with a programme ofverification, which, in our opinion, provides forphysical verification of all the fixed assets atreasonable intervals having regard to the size of theCompany and the nature of its assets. According tothe information and explanations given to us, thediscrepancies noticed on such verification were notmaterial and have been properly dealt with in thebooks of account.

c) The fixed assets disposed off during the year, in ouropinion, do not constitute substantial part of the fixedassets of the Company and such disposal has, inour opinion, not affected the going concern status ofthe Company.

ii) In respect of its inventories:a) According to the information and explanations given

to us, the Management has physically verified theinventory during the year. In our opinion, havingregard to the nature of business and location ofstocks, the frequency of verification is reasonable.

b) In our opinion and according to the information andexplanations given to us, the procedures of physicalverification of inventories followed by themanagement are reasonable and adequate inrelation to the size of the Company and the natureof its business.

c) In our opinion and according to the information andexplanations given to us, the Company hasmaintained proper records of its inventories. Thediscrepancies noticed on verification between thephysical stocks and the book records were notmaterial and have been properly dealt in the booksof account.

iii) a) According to the information and explanations givento us, the Company has granted secured orunsecured loans repayable as per the terms, toseven parties covered in the Register maintainedunder Section 301 of the Companies Act, 1956. Themaximum amount involved during the year was

Rs. 3,120.71 million and the year end balance of theloans granted to such parties was Rs. 3,096.45million.

b) In our opinion and according to the information givento us, the terms and conditions of such loans areprima facie not prejudicial to the interests of theCompany.

c) The receipts of principal amounts and interest havebeen regular during the year.

d) There is no overdue amount in respect of intercorporate loans.

e) According to the information and explanations givento us, the Company has taken loans, secured orunsecured from Companies, firms or other partiescovered in the Register maintained under section301 of the Companies Act, 1956. The maximumamount involved during the year was Rs. 3 millionand the year end balance of the loans taken fromsuch parties was Rs. NIL.

f) In our opinion and according to the information givento us, the terms and conditions of such loans areprima facie not prejudicial to the interest of theCompany.

g) The payment of principal amounts and interest havebeen regular during the year.

iv) In our opinion and according to the information andexplanations given to us, there are adequate internalcontrol systems commensurate with the size of theCompany and the nature of its business for the purchaseof inventory and fixed assets and for services and wehave not observed any continuing failure to correct majorweaknesses in such internal controls.

v) In respect of contracts or arrangements entered in theregister maintained in pursuance of section 301 of theCompanies Act, 1956 to the best of our knowledge andbelief and according to the information and explanationsgiven to us:

a) The particulars of contracts or arrangements referredto in section 301 that need to be entered in to theregister, maintained under the said section havebeen so entered.

b) In our opinion, the transactions (excluding loansreported under paragraph (iii) above) exceeding the

(Referred to in paragraph 3 of our report of even date)


Annexure to the Auditors’ Report (Contd.)

value of Rs. 5 lakhs in respect of any party during theyear have been made at prices which are prima faciereasonable having regard to the prevailing marketprices at the relevant time, where such market pricesare available.

vi) In our opinion and according to the information andexplanations given to us, the Company has not acceptedany deposits from the public. Accordingly, the provisionsof para 4(vi) of CARO are not applicable to the Company.

vii) In our opinion, the internal audit functions carried outduring the year by firms of Chartered Accountantsappointed by the management have beencommensurate with the size of the company and thenature of its business.

viii) In our opinion and according to the information andexplanations given to us, the Central Government has notprescribed the maintenance of cost records for any of the

products or activity of the company.

ix) In respect of statutory dues:a) According to the information and explanations given

to us, the Company has been generally regular indepositing undisputed statutory dues includingProvident Fund, Investor Education and ProtectionFund, Employees’ State Insurance, Income Tax,Wealth Tax, Sales Tax, Service Tax, Custom Duty,Excise Duty, Cess and any other material statutorydues applicable to it with the appropriate authoritiesduring the year.

b) According to the information and explanations given to us, details of disputed sales tax, income tax, customs duty, service tax, excise duty and cess which have not been deposited as on March 31, 2009 on account of any dispute are givenbelow:

Name of statute Nature of dues Rupees Period to which the Forum where

in Million amount relates dispute is pending

APGST Act, 1957 Sales Tax 3.25 1994-95 Hon’ble High Court of

Andhra Pradesh

Sales Tax 17.32 1998-99 Sales Tax Appellate Tribunal






Uttar Pradesh Sales tax 0.52 2001-02 Joint Commissioner (Appeals)

Trade Tax Act, 1948

Tamil Nadu General Sales Tax 0.26 1994-96 Sales Tax Appellate Tribunal

Sales Tax Act, 1959

Delhi Sales Tax on VAT Sales Tax 1.49 2005-07 Additional Commissioner of

Sales Tax (Appeals)

The Central Excise Act, 1944 Excise Duty 28.23 2000-01 CESTAT, Bangalore

Finance Act, 1994 Service Tax 34.62 2005-06 Hon’ble High Court of

Andhra Pradesh

Finance Act, 1994 Service Tax 151.50 2005-07 CESTAT, Bangalore

Indian Income Act, 1961 Income Tax 10.85 2004-05 Commissioner of Income Tax

(Appeals)

Income Tax 58.92 2005-06 Commissioner of Income Tax

(Appeals)


Annexure to the Auditors’ Report (Contd.)

x) The Company does not have accumulated losses andhas not incurred cash losses during the financial yearcovered by our audit and the immediately precedingfinancial year.

xi) In our opinion and according to the information andexplanations given to us, the Company has notdefaulted in repayment of dues to financial institutionsand banks.

xii) In our opinion and according to the information andexplanations given to us, the Company has not grantedany loans and advances on the basis of security by wayof pledge of shares and debentures and other securities.Accordingly, the provisions of para 4(xii) of the CAROare not applicable to the Company.

xiii) In our opinion, the Company is not a Chit Fund or a Nidhior Mutual Benefit Fund/Society. Accordingly, theprovisions of para 4(xiii) of the CARO are not applicableto the Company.

xiv) In our opinion and according to the information andexplanations given to us, the Company does not deal ortrade in shares, securities, debentures and otherinvestments. Accordingly, the provisions of para 4(xiv)of the CARO are not applicable to the Company.

xv) In our opinion and according to the information andexplanations given to us, the terms and conditions of theguarantees given by the Company for loans taken by

others from banks and financial institutions are not primafacie prejudicial to the interests of the Company.

xvi) To the best of our knowledge and belief and according tothe information and explanations given to us, in ouropinion, term loans availed by the Company were, primafacie, applied by the Company during the year for thepurposes for which the loans were obtained.

xvii) According to the information and explanations given tous, and on an overall examination of the balance sheetof the Company, funds raised on short-term basis have,prima facie, not been used for long-term investment.

xviii)According to the information and explanations given tous, the Company has not made preferential allotment ofshare during the year to parties and companies coveredin the register maintained under Section 301 of theCompanies Act, 1956.

xix) According to the information and explanations given tous, and records examined by us, securities/ chargeshave been created in respect of debentures issued.

xx) During the year covered by our audit report, the companyhas not raised any money by public issues.

xxi) To the best of our knowledge and belief and according tothe information and explanations given to us, no fraudon or by the Company was noticed or reported duringthe year.




Balance Sheet as at March 31, 2009(Rs. in million)

Schedule As at As at March 31, 2009 March 31, 2008

SOURCES OF FUNDSShareholders’ FundsShare Capital I 457.70 457.68 Employees Stock Options Outstanding II – 2.66 Share Warrants (Refer Note 3 (b) of II of Schedule X) – 54.25 Reserves and Surplus III 16,397.81 15,209.18

16,855.51 15,723.77 Loan FundsSecured Loans IV 8,863.83 7,188.27 Unsecured Loans V 3,575.00 1,750.00

12,438.83 8,938.27Deferred Tax Liability (Net) 187.84 167.01 (Refer note 13 of II of Schedule X)Total 29,482.18 24,829.05 APPLICATION OF FUNDSFixed AssetsGross Block VI 6,232.78 6,620.37 Less : Depreciation / Amortization 1,640.62 1,423.47 Net Block 4,592.16 5,196.90 Capital Work in Progress 281.15 142.59

4,873.31 5,339.49 Investments VII 7,402.49 5,648.01 Current Assets, Loans and Advances VIIIInventories 7,495.46 5,492.74 Sundry Debtors 10,260.34 8,677.41 Cash and Bank Balances 1,345.05 2,329.84 Other Current Assets 29.80 60.95 Loans and Advances 14,484.05 13,724.76

33,614.70 30,285.70Less : Current Liabilities and Provisions IX

Liabilities 15,541.47 15,564.15 Provisions 866.85 880.00

16,408.32 16,444.15 Net Current Assets 17,206.38 13,841.55 Total 29,482.18 24,829.05 Accounting Policies and Notes on Accounts X

Schedules referred to above form an integral part of the accounts

As per our report of even date attached

For M. BHASKARA RAO & CO. For DELOITTE HASKINS & SELLS For and on behalf of the Board


M. Bhaskara Rao P. R. Ramesh M. V. Srinivasa Murthy A. A. V. Ranga Raju

Partner Partner Company Secretary & Managing Director

V.P ( Legal)

Place: Hyderabad Mumbai R. S. Raju A. G. K. Raju

Date: May 28, 2009 May 28, 2009 Vice President (F&A) Executive Director


Profit and Loss Account for the year ended March 31, 2009(Rs. in million)

Schedule Year ended Year endedMarch 31, 2009 March 31, 2008

INCOME

Turnover A 41,514.08 34,729.38

Other Income B 41.63 55.56

41,555.71 34,784.94

EXPENDITURE

Construction and Other Expenses C 34,971.93 28,952.45

Establishment Expenses D 2,805.44 2,179.05

Interest and Financial Charges E 963.59 719.44

Depreciation / Amortization VI 533.02 482.06

39,273.98 32,333.00

Profit Before Tax 2,281.73 2,451.94

Provision for Taxation – Current Tax 707.90 761.71

– Deferred Tax 20.83 51.78

– Fringe Benefit Tax 14.41 18.98

743.14 832.47

Profit After Tax 1,538.59 1,619.47

Balance in Profit and Loss Account brought forward 1,311.65 860.23

Balance Available for Appropriation 2,850.24 2,479.70

Appropriations

Debenture Redemption Reserve 250.00 –

Proposed Dividend 251.74 297.49

Dividend Tax 42.78 50.56

Transfer to General Reserve 550.00 800.00

Transfer to Contingency Reserve 20.00 20.00

1,114.52 1,168.05

Balance carried to Balance Sheet 1,735.72 1,311.65

Earnings per share of face value of Rs. 2/- each.

Basic 6.72 7.51

Diluted 6.72 7.50

Accounting Policies And Notes On Accounts X







V.P ( Legal)




Cash Flow Statement for the year ended March 31, 2009(Rs. in million)

Year ended Year ended

March 31, 2009 March 31, 2008

A) CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 2,281.73 2,451.94

Adjustments for

Depreciation / Amortisation 533.02 482.06

Miscellaneous expenditure written off – 9.90

Loss on Sale of Fixed Assets 10.76 3.41

Profit on Sale of Fixed Assets (2.82) (8.07)

Interest and financial charges 963.59 719.44

Income from current investments – (0.29)

Employee Compensation Expense (0.66) 11.30

Operating Profit before Working Capital Changes 3,785.62 3,669.69

Adjustments for changes in

Trade and Other Receivables (1,915.09) (5,416.66)

Inventories (2,002.72) (1,452.20)

Trade Payables and Other Liabilities (36.89) 3,827.84

Cash used in Operations (169.08) 628.67

Taxes paid (1,319.14) (1,120.75)

Net Cash used in operating activities (1,488.22) (492.08)

B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets and other capital expenditure (1,613.14) (1,693.40)

Proceeds from sale of Fixed Assets 1,538.36 105.36

Investment in subsidiaries (1,107.35) (32.26)

Investment in other companies (182.75) (2,071.94)

Refund of share application money 524.29 –

Loans to subsidiaries, associates and other body corporates (818.84) (1,627.40)

Foreign Exchange Translation adjustment (111.89) 1.42

(arising on translation of Foreign branch transactions)

Interest received 689.05 428.41

Income from current investments – 0.29

Net Cash used in Investing Activities (1082.27) (4889.52)


Cash Flow Statement (Contd.) for the year ended March 31, 2009






V.P ( Legal)



(Rs. in million)Year ended Year ended

March 31, 2009 March 31, 2008

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Shares 0.22 4,049.29

Proceeds from Issue of Debentures 1,000.00 –

Long Term Funds borrowed 675.56 3,368.70

Unsecured Loans - Banks borrowed / (repaid) (Net) 1,825.00 (800.00)

Interest paid (1,567.34) (1,112.26)

Dividend and Dividend Tax paid (347.74) (228.29)

Net Cash from Financing Activities 1,585.70 5,277.44

Net change in cash and cash equivalents (A+B+C) (984.79) (104.16)

Cash and Cash Equivalents as at April 1 (Opening Balance) 2,329.84 2,434.00

Cash and Cash Equivalents as at March 31 (Closing Balance) 1,345.05 2,329.84

Note:1) The Cash Flow Statement is prepared in accordance with the indirect Method stated in Accounting Standard 3 on Cash Flow

Statements and presents the cash flows by operating, investing and financing activities.

2) Cash and Cash Equivalents consist of cash and bank balances which include Rs. 266.94 million (31-3-2008 : Rs. 322.34million) in Margin money Deposits lodged with Banks against letters of guarantee issued and Rs. 4.56 Million (31.03.08 Rs. 4.25 Million) in Unclaimed Dividend Account.

3) Figures in brackets represent cash outflows.

4) Notes on accounts stated in Schedule X form an integral part of the Cash Flow Statement.


Schedules forming part of the Balance Sheet as at March 31, 2009(Rs. in million)

As at As at March 31, 2009 March 31, 2008

Authorised Capital300,000,000 Equity Shares of Rs. 2/- each 600.00 600.00

(31.03.2008 : 300,000,000 shares of Rs. 2/- each)Issued Capital

22,91,00,910 Equity Shares of Rs. 2/- each 458.20 458.18 (31.03.2008 : 22,90,88,720 Equity Shares of Rs. 2/- each)

Subscribed and Paid up22,88,50,910 Equity Shares of Rs. 2/- each fully paid up 457.70 457.68

(31.03.2008 : 22,88,38,720 Equity Shares of Rs. 2/- each)(Refer note 3 (a) of II of Schedule X)

Of above:a) 10,00,000 Equity Shares of Rs. 2/- each were alloted

in 1990-91 as fully paid Equity Shares pursuant to a contract without payment being received in cash

b) 10,33,68,530 Equity Shares of Rs. 2 each were alloted in 2006-07 as fully paid up Bonus shares in the ratio of 1:1 by way of capitalisation of Rs. 206.74 million from General Reserve

Total 457.70 457.68

Schedule – I Share Capital

Employee Stock Options Outstanding – 2.66

Schedule – II Employee Stock Options Outstanding




Capital ReserveAs per Last Balance Sheet 0.08 0.08 Add : Forfeiture of Share Warrants (Refer Note 3 (b) of II of Schedule X) 54.25 –

54.33 0.08 Securities Premium As per last Balance Sheet 11,098.23 7,076.20 Add : Premium on shares alloted 2.20 4,074.34 Less : Share Issue Expenses – 52.31

11,100.43 11,098.23 Debenture Redemption ReserveTransfer from Profit and Loss Account 250.00 –(Refer Note 5 (a) of II of Schedule X)Contingency ReserveAs per last Balance Sheet 160.00 140.00 Add : Transfer from Profit and Loss Account 20.00 20.00

180.00 160.00 Foreign Currency Translation Reserve (137.26) (25.37)General ReserveAs per last Balance Sheet 2,664.59 1,864.59 Add : Transfer from Profit and Loss Account 550.00 800.00

3,214.59 2,664.59 Profit and Loss Account - Balance 1,735.72 1,311.65 Total 16,397.81 15,209.18

Schedule – III Reserves and Surplus

11.95% Redeemable, Non-convertible Debentures 1,000.00 – (Refer Note 5 (a) of II of Schedule X)From Banks :Term Loan - Rupee Loan 743.86 649.71

– Foreign Currency Loan (Refer Note 5 (b) of II of Schedule X) – 685.38 Working Capital Demand Loan - Rupee Loan 4,003.00 3,715.00

– Foreign Currency Loan 469.16 494.64 Cash Credit (Refer Note 5 (c) of II of Schedule X) 2,267.23 1,403.49

7,483.25 6,948.22 From Others :Term Loan (Refer Note 5 (b) of II of Schedule X) 332.30 188.71 Vehicle Loans (Refer Note 5 (d) of II of Schedule X) 48.28 51.34

380.58 240.05 Total 8,863.83 7,188.27 Installments falling due within next 12 months 460.94 837.21

Schedule – IV Secured Loans

Short Term LoansFrom Banks 3,575.00 1,750.00 Total 3,575.00 1,750.00

Schedule – V Unsecured Loans


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Nos. Rs. in Million Nos. Rs. in Million

Long Term (At Cost)In Trade Investments (Unquoted)In SubsidiariesIn Equity Shares of Rs. 10/- each, fully paid upNCC Infrastructure Holdings Limited 78208970 1,758.87 58673300 586.73(Purchased during the year 19535670 shares)NCC Urban Infrastructure Limited1 120000000 1,200.00 120000000 1,200.00 NCC Vizag Urban Infrastructure Limited 49875000 498.75 49875000 498.75 OB Infrastructure Limited 2 (Purchased during the year 1482191 shares) 6251281 616.08 4769090 467.87 Patnitop Ropeway & Resorts Limited 1913000 19.13 1050000 10.50 (Purchased during the year 863000 shares)Naftogaz Engineering Private Limited 50000 0.50 50000 0.50 Himachal Sorang Power Private Limited3 3400 0.03 3400 0.03 NCC Power Projects Limited (Purchased during the year 50000 shares) 50000 0.50 – – NCC International Convention Centre Limited 1000000 10.00 – – (Purchased during the year 1000000 shares)In Shares of Omani Rials one each fully paid upNagarjuna Construction Company Limited and Partners LLC, Oman4 150000 17.01 150000 17.01 Nagarjuna Construction Company International LLC, Oman 1000000 112.00 1000000 112.00 In Shares of US $ 10 each, fully paid upNCC Infrastructure Holdings Mauritius PTE. Ltd. 2136514 943.33 1911514 853.19(Purchased during the year 225000 shares)In Shares of 'AED' 1000 each fully paid upNagarjuna Contracting Company Limited, LLC, Dubai5 300 3.44 300 3.44 IN OTHER COMPANIESIn Equity Shares of Rs. 10/- each, fully paid up (Unquoted)Gautami Power Limited (Purchased during the year 10871367 shares)6 52196367 521.97 41325000 413.26 Brindavan Infrastructure Company Limited7 9999725 100.00 9999725 100.00 SNP Real Estates Private Limited 809950 8.10 809950 8.10 SNP Infrastructures Private Limited 2290000 22.90 2290000 22.90 SNP Developers and Projects Private Limited 567451 5.67 567451 5.67 SNP Realtors Private Limited 792331 7.92 792331 7.92 SNP Ventures Private Limited 340000 3.40 340000 3.40 SNP Property Developers Private Limited 340000 3.40 340000 3.40 NAC Infrastructure Equipment Limited 1499900 15.00 1499900 15.00 Western UP Tollway Limited8 225000 2.25 225000 2.25 Jubilee Hills Land Mark Projects Limited 2500000 25.00 2500000 25.00 Bangalore Elevated Tollway Limited9 80400 0.80 80400 0.80 Tellapur Techno City Private Limited 14702600 147.03 14702600 147.00Pondichery Tindivanam Tollway Limited10 624105 53.41 287641 19.76(Purchased during the year 336464 shares)Tellapur Town Centre Private Limited 2600 0.03 2600 0.03 Tellapur Tech. Park Private Limited 2600 0.03 2600 0.03 Paschal Form Work (I) Private Limited (Purchased during the year 1624725 shares) 1624725 16.25 – –

Schedule – VII Investments


Schedules forming part of the Balance Sheet as at March 31, 2009

Note:1) Of these 36,600,000 (31.03.2008: 36,600,000) equity shares aggregating Rs. 366 million (31.03.2008: Rs. 366 million) have been pledged

to Bank of India for the term loan availed by NCC Urban Infrastructure Limited. Further shares to the extent of 83,400,000 (31.03.2008:83,400,000) aggregating in value to Rs. 834 million (31.03.2008: Rs. 834 million) are subject to non-disposal undertaking furnished andunder lien with the bank.

2) The shares are subject to non-disposal undertaking furnished in favour of consortium of bankers for term loans availed by OB InfrastructureLimited

3) Of these 1,734 (31.03.2008: 1,734) equity shares aggregating in value to Rs. 0.02 million(31.03.2008: Rs. 0.02 million) have been pledgedto Axis Bank for the term loan availed by Himachal Sorang Power Private Limited.

4) Of these 45,000 (31.03.2008: 45,000) equity shares are held by the joint venture partner under trust for Nagarjuna Construction CompanyLimited.

5) Of these 153 (31.03.2008: 153) equity shares are held by the joint venture partner under trust for Nagarjuna construction CompanyLimited.

6) Of these 26,212,652 (31.03.2008: 26,212,652) equity shares aggregating Rs. 262.12 million (31.03.2008: Rs. 262.12 million) have beenpledged to Power Finance Corporation for the term loan availed by Gautami Power Limited.

7) The shares have been pledged in favour of Infrastructure Development Finance Company Limited and Corporation Bank for the term loanavailed by Brindavan Infrastructure Company Limited

8) Of these 224,600 (31.03.2008: 224,600) equity shares aggregating in value to Rs. 2.25 million (31.03.2008:Rs. 2.25 million) have beenpledged to the consortium of bankers for the term loan availed by Western UP Tollway Limited

9) Of these 40,800 (31.03.2008: 40,800) equity shares aggregating in value to Rs. 0.4 million (31.03.2008:Rs. 0.41 million) have been pledgedto the consortium of bankers for the term loan availed by Bangalore Elevated Tollway Limited

10) Of these 95,696 (31.03.2008: 54,415) equity shares aggregating in value to Rs. 9.57 million (31.03.2008:Rs. 5.44 million) have beenpledged to Axis Bank for the term loan availed by Pondichery Tindivanam Tollway Limited

(Rs. in million)As at As at

March 31, 2009 March 31, 2008


Paschal Technology (I) Private Limited (Purchased during the year 27473 shares) 27473 0.27 – – In Equity Shares of Rs. 25/- each, fully paid up (Unquoted)Akola Urban Co-operative Bank Limited 4040 0.10 4040 0.10 In Shares of 'AED' 1000 each fully paid upNagarjuna Facilities Management Services, LLC, Dubai 147 1.72 147 1.72 In 9% Redeemable cumulative PreferenceShares of Rs. 100/- each fully paidupBrindavan Infrastructure Company Limited7 500000 50.00 500000 50.00 In 2% Redeemable Preference Shares of Rs. 100/- each fully paidupJubilee Hills Land Mark Projects Limited 4274999 427.50 4274999 427.50 In Debentures of Rs. 100/-, fully paid up (Unquoted)Jubilee Hills Land Mark Projects Limited (Purchased during the year 710520 shares) 1323832 132.38 613312 61.33 In Debentures of Rs. 1/-, fully paid up (Unquoted)Tellapur Techno City Private Limited (Purchased during the year 94900000 shares) 677716524 677.72 582816524 582.82 OTHER INVESTMENTS (Quoted)In Equity Shares of Rs. 10/- each, fully paid upNCC Finance Limited (Value Rs.90) 9 – 9 – Total 7,402.49 5,648.01 Aggregate amount of Quoted Investments – – Aggregate amount of Unquoted Investments 7,402.49 5,648.01 Aggregate market value of Quoted Investments – –

Schedule – VII Investments (Contd.)




A. Current Assets

i) Inventories

Materials 2,607.84 2,006.55

Finished Goods 1.29 0.05

Work-in-progress 4,553.64 3,171.56

Property Development Cost 332.69 314.58

(Refer Note 7 of II of Schedule X)

a) 7,495.46 5,492.74

ii) Sundry Debtors (Unsecured)

Over Six months

Considered Good 1,867.82 1,322.84

Considered Doubtful 30.00 12.02

1,897.82 1,334.86

Less : Provision for doubtful debts 30.00 12.02

Others, Considered Good 8,392.52 7,354.57

b) 10,260.34 8,677.41

iii) Cash and Bank Balances

(Refer Note 8 of II of Schedule X)

Cash on hand 23.86 21.01

Bank Balance :

In Current Accounts

With Scheduled Banks 1,017.97 1,799.02

With Others 9.10 148.78

In Deposit Accounts

With Scheduled Banks

Margin Money Deposits (Lodged with Banks against 266.94 322.34

Guarantees / letters of credit issued)

Fixed Deposits 10.70 34.63

With Others 16.48 4.06

c) 1,345.05 2,329.84

Other Current Assets

Interest Accrued on Deposits d) 29.80 60.95

Schedule – VIII Current Assets, Loans and Advances




B. Loans And Advances

(Unsecured and Considered good unless otherwise stated)

Advances to (Refer Note 9 of II of Schedule X)

subsidiaries 2,803.52 1,981.03

Associates 232.00 236.31

Other Body Corporates 80.93 80.27

(Includes Rs. 60.93 million secured by equitable mortgage

of immovable properties of a body Corporate)

3,116.45 2,297.61

Advances to Suppliers, Sub-contractors and Others

(Refer Note 10 of II of Schedule X


Considered Doubtful 39.00 16.41

4,375.45 4,912.30

Less : Provision for doubtful advances 39.00 16.41

4,336.45 4,895.89

Advances recoverable in cash or in kind or

for value to be received 461.30 646.57

Advance towards Share Application Money 360.03 1,348.70

Retention Money


Considered Doubtful – 0.59

4,247.34 3,044.58

Less : Provision for doubtful retention money – 0.59

4,247.34 3,043.99

Deposits with Clients and Others 254.70 375.30

Prepaid Expenses 78.06 83.94

Advance Taxes and Tax Deducted at Source (Net of Provisions) 1,629.72 1,032.76

e) 14,484.05 13,724.76

Total (a + b + c + d + e) 33,614.70 30,285.70

Schedule – VIII Current Assets, Loans and Advances (Contd.)


Schedules forming part of the Balance Sheet as at March 31, 2009


March 31, 2009 March 31, 2008

a) Current LiabilitiesSundry creditorsDues to Micro, Small & Medium Enterprises 2.76 – (Refer Note 11 of II of Schedule X)Dues to Others 6,357.12 6,025.25 Mobilisation Advance 4,661.86 4,828.65 Material Advance 561.54 901.17 Advances from Customers/Others 1044.84 1,312.02 Liability towards Investor Education and Protection Fund 4.56 4.25 (Represents unclaimed dividend required to be transferred to the said fund on completion of seven years. No such amount is due as on the Balance Sheet date)Other Liabilities 2,841.61 2,479.78 Interest Accrued but not due on loans 67.18 13.03

15,541.47 15,564.15b) Provisions

Taxation (Net of Advance Taxes) 408.68 408.68 Proposed Dividend 251.74 297.49 Dividend Tax 42.78 50.56 Employee Benefits 162.52 122.27 Fringe Benefit Tax 1.13 1.00

866.85 880.00 Total 16,408.32 16,444.15

Schedule – IX Current Liabilities and Provisions


Schedules forming part of the Profit and Loss Account for the year ended March 31, 2009

Material ConsumptionCement 1,561.09 1,314.99 Steel 5,134.74 4,405.62 Bitumen 918.02 844.32 Other Construction Material 6,661.84 5,064.31 Stores and Spares 144.67 107.42

14,420.36 11,736.66 Power and Fuel 57.84 58.12 Sub-contractors Work Bills 14,027.69 11,339.28 Labour Charges 3,922.75 3,228.06 Transport Charges 472.15 455.49 Rates and Taxes Value Added Tax 885.92 727.98 Service Tax 147.22 165.28

1,033.14 893.26 Repairs and MaintenanceMachinery 764.13 652.83 Others 77.79 85.61

841.92 738.44 Hire Charges for Machinery and others 831.10 628.26 Technical Consultation 88.41 165.08 Royalties, Seigniorage and Cess 140.66 86.15 Watch and Ward 71.65 53.12 Property Development Cost 32.51 3.25 Other Expenses 410.00 341.08

1,574.33 1,276.94 (Increase) in Work-in-Progress / Finished GoodsOpening Balance 3,176.68 2,402.88 Closing Balance 4,554.93 3,176.68

(1,378.25) (773.80)Total 34,971.93 28,952.45

Schedule – C Construction and other expenses


March 31, 2009 March 31, 2008

Project Division 41,249.27 34,323.09 Other Divisions 264.81 406.29 Total 41,514.08 34,729.38

Schedule – A Turnover

Profit on Sale of Investment – 0.27 Dividend from Current Investments – 0.02 Profit on Sale of Fixed Assets 2.82 8.07 Miscellaneous Income 38.81 47.20 Total 41.63 55.56

Schedule – B Other Income


Schedules forming part of the Profit and Loss Account(Rs. in million)

Year ended Year endedMarch 31, 2009 March 31, 2008

a) Employees Remuneration and BenefitsSalaries and Other Benefits 1,705.91 1,238.02 Contribution to Provident Fund and Other Funds 113.53 89.87 Staff Welfare Expenses 67.16 62.53 Employee Compensation Expense - stock options (0.66) 11.30 Total (a) 1,885.94 1,401.72

b) Administrative ExpensesRent, Rates and Taxes 207.77 161.67 Office Maintenance 84.24 73.31 Electricity Charges 39.62 33.74 Postage, Telegrams and Telephones 46.45 43.61 Travelling and Conveyance 196.22 185.01 Printing and Stationery 30.90 28.65 Insurance 39.65 57.19 Advertisement 9.87 12.42 Tender Documents 22.18 14.41 Legal and Professional Charges 58.34 36.09 Miscellaneous Expenses 69.28 56.30 Auditors' Remuneration (Refer note 18 of II of schedule X) 9.46 13.61 Directors' Sitting Fees 0.66 0.48 Bad Debts / Advances Written off 1.25 – Provision for Doubtful Debts / Advances 40.57 14.00 Consultation Charges 46.35 28.14 Donations 5.93 5.39 Loss on Assets sold/discarded/written off 10.76 3.41 Miscellaneous Expenditure written offShare Issue Expenses – 0.24 Project and Other Amenities – 9.66 Total (b) 919.50 777.33 Total (a + b) 2,805.44 2,179.05

Schedule – D Establishment Expenses

Interest onTerm Loans 525.06 409.50 Working Capital Demand Loans and Cash Credit 709.46 337.37 Mobilisation Advance 167.50 134.93 Vehicle Loans 5.71 4.72 Others 37.81 67.20

1445.54 953.72 Less: Interest capitalised 1.25 –Less: Interest Income - from Bank and other Accounts 657.90 396.38 (Gross: Tax Deducted at Source Rs. 118.36 million (2007-08 :Rs. 59.87 million))

786.39 557.34 Financial ChargesCommission on – Bank Guarantees 108.55 103.11

– Letters of Credit 49.21 44.01 Bank charges 19.44 14.98

177.20 162.10 Total 963.59 719.44

Schedule – E Interest and Financial Charges


Schedules forming part of the Accounts

Schedule – X Accounting Policies and Notes on Accounts

I. SIGNIFICANT ACCOUNTING POLICIESa) The Accounts have been prepared on accrual basis under historical cost convention in accordance with the Generally

Accepted Accounting Principles in India and the provisions of the Companies Act, 1956.

b) Fixed Assets and DepreciationFixed Assets are stated at cost of acquisition, less accumulated depreciation thereon. Depreciation is provided onstraight line method at the rates prescribed in Schedule XIV of the Companies Act, 1956 except for constructionaccessories which are depreciated at 20% p.a. based on useful life determined by the Management. Leaseholdimprovements are amortised over the period of lease. Intangible assets are amortised over a period of five years.

Fixed assets in joint venture operations, which are accounted to the extent of the Company’s interest in the venture,are depreciated on Straight Line Method / Written Down Value Method at the rates prescribed in Schedule XIV of theCompanies Act, 1956 or at higher rates as stated below:

c) Borrowing CostsBorrowing Costs that are attributable to acquisition, construction or production of a qualifying asset are capitalised aspart of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time i.e., more than12 months to get ready for its intended use. All other borrowing costs are charged to revenue.

d) Impairment of AssetsThe carrying amount of assets, other than inventories is reviewed at each balance sheet date to determine whether thereis any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated. Therecoverable amount is the greater of the asset’s net selling price and value in use which is determined based on theestimated future cash flow discounted to their present values. An impairment loss is recognised whenever the carryingamount of an asset or its cash generating unit exceeds its recoverable amount. Impairment loss is reversed if therehas been a change in the estimates used to determine the recoverable amount.

e) InvestmentsInvestments are classified as long term and current investments. Long Term Investments are carried at cost lessprovision for permanent diminution, if any, in value of such investments. Current investments are carried at lower of costand fair value.

f) InventoriesRaw MaterialsRaw Materials, construction materials and stores & spares are valued at weighted average cost. Cost excludesrefundable duties and taxes.

Work in Progressi) Project Division: Work-in-Progress is valued at the contract rates less profit margin / estimates.

ii) Light Engineering Division: Work-in-Progress is valued at lower of cost and net realisable value.

iii) Property Development: Properties under development are valued at cost. Cost comprises all direct developmentexpenditure, administrative expenses and borrowing costs. Land held for resale is valued at lower of cost and netrealisable value.

Description Straight Line Method Written Down Value Method

1) Plant and Machinery 4.75% 15% - 25%2) Furniture and Fixtures 6.33% 10% - 15%3) Office Equipments 4.75% 15% - 25%4) Computers 16.21% 60%5) Tools and Equipments 4.75% 15% - 25%6) Construction Vehicles – 15% - 25%7) Construction Accessories 20% 15% - 25%8) Office Vehicles 9.50% 15% - 25%



Schedule – X Accounting Policies and Notes on Accounts (Contd.)

Finished GoodsFinished goods of Light Engineering Division are valued at lower of cost and net realisable value.

g) Employee BenefitsLiability for employee benefits, both short and long term, for present and past services which are due as per the termsof employment are recorded in accordance with Accounting Standard (AS) 15 “Employee Benefits” notified by theCompanies (Accounting Standard) Rules, 2006

i) GratuityIn accordance with the Payment of Gratuity Act, 1972 the Company provides for gratuity covering eligibleemployees.

Liability on account of gratuity is:– covered partially through a recognised Gratuity Fund managed by Life Insurance Corporation of India andcontributions are charged to revenue; and

– balance is provided on the basis of valuation of the liability by an independent actuary as at the year end.

ii) SuperannuationThe Company makes annual contribution to an approved superannuation fund covered by a policy with BirlaSunlife Insurance Company Limited. The Company has no further obligation beyond the annual contribution.

iii) Provident FundContribution to Provident fund (a defined contribution plan) made to Regional Provident Fund Commissioner arerecognised as expense.

iv) Compensated AbsencesLiability for compensated absence is treated as a long term liability and is provided on the basis of valuation byan independent actuary as at the year end.

In respect of Oman branch employees, end of service benefit is accrued in accordance with terms of employment.Employee entitlements to annual leave and gratuity are recognized on actual basis and charged to profit and lossaccount

h) Revenue Recognitioni) Project Division: Revenue from construction contracts is recognised by reference to the percentage of completion

of the contract activity. The stage of completion is determined by survey of work performed and / or on completionof a physical proportion of the contract work, as the case may be, and acknowledged by the contractee. Futureexpected loss, if any, is recognised as expenditure.

ii) Property Development: Revenue is recognised when the Company enters into an agreement for sale with the buyerand all significant risks and rewards have been transferred to the buyer and there is no uncertainty regardingrealisability of the sale consideration.

iii) Light Engineering Division: Revenue is recognised on despatch of goods to customers.

i) Joint Venture Projectsi) In respect of Joint Venture Contracts in the nature of jointly controlled operations, the assets controlled, liabilities

incurred, the share of income and expenses incurred are recognized in the agreed proportions under respectiveheads in the financial statements.

ii) Assets, Liabilities and Expenditure arising out of contracts executed wholly by the Company pursuant to a joint venturecontract are recognised under respective heads in the financial statements. Income from the contract is accountednet of joint venturer’s share under turnover in these financial statements.

iii) Share of turnover attributable to the Company in respect of contracts executed by the other joint venture partnerspursuant to Joint Venture Agreement, is accounted under Turnover in these financial statements.

j) Foreign exchange translation and foreign currency transactionsMonetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year aretranslated at year end rates. The difference in translation of monetary assets and liabilities and realised gains and losses



on foreign exchange transactions are recognised in the Profit and Loss Account.

Foreign branches are classified as non-integral foreign operations. Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the year end. Income and expenses are translated at the monthly averagerate at the end of the respective month. All resulting exchange differences are accumulated in a separate account ‘ForeignCurrency Translation Reserve’ till the disposal of the net investments.

k) LeasesThe Company’s leasing arrangements are mainly in respect of operating leases for premises and construction equipment.The leasing arrangements range from 11 months to 5 years generally and are usually cancellable /renewable by mutualconsent on agreed terms. The aggregate lease rents payable are charged as rent in the Profit and Loss Account.

l) Taxesi) Current Tax: Provision for Current Tax is made based on taxable income computed for the year under the Income

Tax Act, 1961.

ii) Deferred Taxes: Deferred Tax is accounted for by computing the tax effect of timing differences which arise duringthe year and reverse in subsequent periods. Deferred tax assets are recognized and carried forward only to the extentthat there is a certainty that sufficient future taxable income will be available against which such Deferred Tax Assetscan be realized.

m) Contingency ReserveThe Company transfers to Contingency Reserve out of the Profit and Loss Appropriation Account such amounts as theManagement considers appropriate based on their assessment to meet any contingencies relating to substantialexpenditure incurred during the maintenance period of a contract, non-realisation of contract bills earlier recognised asincome and claims, if any, lodged by the contractees or by sub-contractors or by any third party against the Company inrespect of completed projects for which no specific provision has been made.

n) Earnings per ShareThe Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20, EarningsPer Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equity share is computedby dividing the net profit for the year attributable to the Equity Shareholders by the weighted average number of equityshares outstanding during the year. Diluted earnings per share is computed by dividing the net profit for the year, adjustedfor the effects of dilutive potential equity shares, attributable to the Equity Shareholders by the weighted average numberof the equity shares and dilutive potential equity shares outstanding during the year except where the results are antidilutive.

o) Provisions, Contingent Liabilities and Contingent AssetsThe Company recognises provisions when there is present obligation as a result of past event and it is probable that therewill be an outflow of resources and reliable estimate can be made of the amount of the obligation. A disclosure forContingent liabilities is made in the notes on accounts when there is a possible obligation or a present obligation that may,but probably will not, require an outflow of resources. Contingent assets are neither recognised nor disclosed in thefinancial statements.

II. NOTES ON ACCOUNTS

1. Contingent liabilities not provided for:a) Letters of credit - Rs. 367.21 million (31-03-2008: Rs.1781.07 million).

b) Counter Guarantees given to the Bankers – Rs. 15269.51 million (31-03-2008: Rs. 13051.35 million).

c) Performance guarantees, given on behalf of Subsidiaries and Associates Rs. 95.76 million (31-03-2008: Rs. 330.89 million).

d) Corporate Guarantees given to Banks and Financial institutions for financial assistance extended to Subsidiaries,Associates and Joint Ventures Rs. 16731.69 million (31-03-2008: Rs. 4580.66 million).

e) Disputed income tax liability for which the Company preferred appeal Rs. 69.77 million (31-03-2008: Nil).





f) Disputed sales tax liability for which the Company preferred appeal Rs. 49.11 million (31-03-2008: Rs. 63.75 million).

g) Disputed central excise duty relating to cement plant, which was sold in earlier year, for which the Company has filedan appeal to CESTAT, Bangalore Rs. 28.23 million (31-03-2008: Rs. 28.23 million)

h) Disputed service tax liability for which the Company preferred appeal Rs. 186.12 million (31-03-2008: Rs. 23.88 million)

i) Disputed sole arbitrator award of Rs. 30.00 million in case of counter claim by Bhartiya Reserve Bank Note MudranPrivate Limited, against which the Company has filed appeal before City Civil Court, Bangalore. (31-03-2008: Rs. 30.00 million)

j) Claims against the Company not acknowledged as debts Rs. 519.51 million (31-03-2008: Rs. 390.51 million).

k) Joint and several liability in respect of joint venture projects and liquidated damages in respect of delays in completionof projects – amount not ascertainable.

l) Levy of labour cess @ 1% (w.e.f. July 2007) on the construction contracts executed by the Company in the State ofAndhra Pradesh contested before the Hon’ble High Court of Andhra Pradesh - amount not ascertainable.

m) Future Export commitments on account of import of machinery and equipments at concessional rate of duty underEPCG scheme is Rs. 483.04 million (31-3-2008: Rs. Nil).

2. Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for [net of advances Rs. 60.62 million (31-3-2008: Rs. 46.05 million)] – Rs. 88.06 million (31-3-2008: Rs. 99.83 million). Commitment towardsinvestment in companies [net of advances Rs. 10907.38 million (31-3-2008: Rs. 7012.13 million)] Rs. 5699.62 million (31-3-2008: Rs. 5260.45 million).

3. Share Capitala) During the year, vested Options were exercised and the Company has allotted 2,000 equity shares in Grant 1 of

Rs. 2/- each at a premium of Rs. 9/- per share and 10,190 equity shares in Grant 3 of Rs. 2/- each at a premium ofRs. 20/- per share aggregating to Rs. 0.25 million (includes share premium Rs. 0.22 million). Consequent to the saidallotment, Rs. 1.98 million representing the intrinsic value of Rs. 30.905 per option for Grant 1 and Rs. 188.00 per optionfor Grant 3 exercised has been transferred to securities premium account from Employees Stock Options OutstandingAccount

b) Share WarrantsThe Company had allotted 25,00,000 Share warrants on preferential basis to M/s.AVSR Holdings Private Limited , thepromoter of the Company, at a price of Rs. 217/- per warrant with a right to apply and be allotted Equity Shares of theCompany of Rs. 2/- each at a premium of Rs. 215/- per share within a period not exceeding 18 months from the dateof allotment and the Company was in the receipt of Rs. 54.25 million as 10% advance against the said share warrantsallotted. The promoter Company has not exercised their right to subscribe within the stipulated time period.Consequently, the advance received has been forfeited and transferred to Capital Reserve account.

4. NCC Employees Stock Options Plan, 2004a) The Company follows the intrinsic value method in which the intrinsic value represents the excess of Market price over

the exercise price of the option. The accounting value is computed by aggregating the intrinsic value of all theemployee options granted during the accounting period. This accounting value is recognized as the Deferredemployee compensation expense with a corresponding obligation to the stock option holders. The deferred employeecompensation expense is amortized over the period of vesting on a straight-line basis. Upon exercise of option, theproceeds received are credited to Share Capital and Securities Premium Account. Deferred employee cost, obligationand amortised amount are derecognised upon lapse of options as per the terms of the scheme.



b) Movement in the options under ESOP, 2004

Options Weighted average exercise price per

Stock Option(Rupees)

Options outstanding at the beginning of year 15800 20.61Granted during the year – –Lapsed during the year Grant 3 3610 22.00Exercised during the year Grant 1 2000 11.00Exercised during the year Grant 3 10190 22.00Allotted during the year Grant 1 2000 11.00Allotted during the year Grant 3 10190 22.00Options outstanding at the end of year – –Options exercisable at the end of year – –


5. Loan FundsSecured Loansa) 11.95% Redeemable Non Convertible Debenture:

i) 11.95% Redeemable Non Convertible Debentures numbering to1000 having a face value of Rs. 10 lakhs eachaggregating to Rs. 100 crores privately placed with Life Insurance Corporation of India are secured by firstcharge in favour of IDBI Trusteeship services Limited, trustees to the debenture holders:(a) by way of hypothecation of the Company’s movable property specified in Schedule 2 of Memorandum

of Hypothecation dated 25th April, 2009; (b) first charge by way of hypothecation of the Company’s immovable property situated at Gujarat as

specified in first Schedule to the Debenture Trust Deed dated 23rd April, 2009; (c) Equitable mortgage by deposit of title deeds of Company’s immovable properties situated at Hyderabad,

Bangalore, Mumbai and New Delhi as specified in Schedule-A of Declaration and undertaking dated25th April 2009.

ii) These debentures numbering to 1000 having a face value of Rs 10 lakhs each aggregating to Rs 100 croresare to be redeemed in three installments in the ratio of 25:25:50 commencing at the end of 3rd year from thedate of allotment i.e., 4th February 2012 onwards.

iii) The Company has created Rs 250 million as Debenture Redemption Reserve in accordance with theprovisions of Company’s Act, 1956.

b) Term LoansTerm Loans availed from banks and others are secured by hypothecation of specific assets, comprising plantand machinery and construction equipment, acquired out of the said loans and personal guarantee of a Director.

c) Working Capital Facilities: Cash Credit facilities and Working Capital Demand Loans from consortium of banksare secured by:i) Hypothecation against first charge on stocks, book debts and other current assets of the Project and Light

Engineering Division of the Company, both present and future, ranking parri passu with consortium banks

ii) Hypothecation against first charge on all unencumbered fixed assets of the Project Division of the Companyboth present and future ranking parri passu with consortium banks.

iii) Equitable mortgage of six properties (Land & Buildings).

iv) Personal guarantee of certain Directors.

v) Working Capital Demand Loan in foreign currency is secured either/and or as:

Exclusive First hypothecation charge of project assets pertaining to the Al Amerat Quriyat road project.

* As there is no charge to profit and loss account fair value disclosure is not given.




d) Vehicle Loans: Vehicle loans availed are secured by hypothecation of vehicles acquired out of the said loans.

6. Fixed AssetsFixed assets include Rs. 418.32 million (31.03.2008: Rs. 557.53 million) (written down value) representing assets of aJoint Venture on which a second charge has been created in favour of M/s.3i Infotech Trustyship Services Limited.(a subsidiary of ICICI Bank Limited) for short term loan of USD 20 million and Working Capital Demand Loan USD 15 million sanctioned by ICICI Bank Limited, Bahrain to Nagarjuna Contracting Company LLC, Dubai, a whollyowned subsidiary of the Company.

7. InventoriesProperty Development Cost : Property Development Cost includes Rs. 16.55 million (31-3-2008: Rs. 16.55 million)representing the cost of acquisition of land from a land owner, for which the Company holds General Power of Attorneyto deal with such land including registration of the sale in the name of the Company.

8. Cash and Bank balancesa) Cash on hand includes Rs. 0.33 million (31.03.2008: Rs. 1.23 million) held in foreign currency.

b) Balance with banks in current account & deposit account includes balance with non- scheduled banks as follows:

9. Particulars of Loans and Advances in the nature of loans as required by clause 32 of the Listing Agreement

Maximum Balance any time Bank Balance as at Balance as at during the year

31.03.2009 31.03.2008 2008-09 2007-08

In Current accountStandard Chartered Bank, Oman 3.88 143.22 1636.67 263.67Bank Muscat, Oman 2.78 0.68 126.93 23.05Nepal SBI Ltd. 0.89 4.49 45.51 7.60Urban Co-operative Bank – 0.39 0.39 1.78Akola Urban Co–operative Bank 1.55 – 17.40 –Total 9.10 148.78 – –In Deposit account – Margin MoneyBank Muscat, Oman 16.48 4.06 16.48 4.06Total 16.48 4.06 – –

Name of the Company Balance as on Maximum outstanding

31.03.2009 31.03.2008 2008-09 2007-08

A. SubsidiariesNCC Urban Infrastructure Limited 2103.80 1458.35 2103.80 1458.35NCC Vizag Urban Infrastructure Limited 603.74 522.68 603.74 522.68NCC Power Projects Limited 95.98 – 95.98 –

B. AssociatesJubilee Hills Landmark Projects Limited 222.00 202.05 222.00 488.37Himalayan Green Energy Private Limited. 10.00 10.00 10.00 10.00Brindavan Infrastructure Co. Ltd. – 24.26 24.26 24.26

C. Advances in the nature of loans where there is no repayment schedule 60.93 60.27 60.93 60.27

D. Advances in the nature of loans where no interest is charged or interest is below section 372A of Companies Act, 1956 60.93 60.27 60.93 60.27

E. Advances in the nature of loans to firms / companies in which directors are interested:NCC Blue Water Products Limited 60.93 60.27 60.93 60.27

(Rs. in million)

(Rs. in million)




10. Loans and Advances Advances to Suppliers, Sub–contractors and others, include Rs. 459.67 million (31-3-2008: Rs. 312.30 million)representing amounts withheld by contractees.

11. There are no dues payable to Micro, Small and Medium Enterprises exceeding the time limit specified in the Micro,Small and Medium Enterprises Development Act, 2006.The information regarding Micro, Small and Medium Enterpriseshas been compiled by the Company based on the information received from such parties.

12. Employee Benefitsa) Liability for retiring gratuity as on March 31, 2009 is Rs. 37.82 million (31-3-2008: Rs. 33.30 million) of which

Rs. 10.98 million (31-3-2008: Rs. 5.91 million) is funded with the Life Insurance Corporation of India. The balanceof Rs. 26.84 million (31-3-2008: Rs. 27.39 million) is included in Provision for Gratuity. The Liability for Gratuity andCost of Compensated absences has been actuarially determined and provided for in the books.

b) Details of the company’s post-retirement gratuity plans for its employees including whole-time directors are givenbelow, which is certified by the actuary and relied upon by the auditors

I Net Assets/(Liability) recognised in the balance Sheet 2008-09 2007-08

Present value of Obligation 37.82 33.30Fair value of Plan Assets 10.98 5.91 (Liability) / Assets (26.84) (27.39)Un-recognised Past Service Cost – –(Liability) / Assets recognized in the Balance Sheet (26.84) (27.39)Component of Employer’s ExpenseCurrent Service Cost 9.12 6.01Interest Cost 2.00 2.09Expected Return on Plan Assets – –Net Actuarial Gain / (Loss) recognized in the year (10.00) (6.49)Expenses Recognised in the Profit And Loss Account 1.12 1.61Movement in the Net Liability recognized in the Balance sheetOpening Net Liability 27.39 26.15Expenses Recognised in the Profit and Loss Account 1.12 1.61Payment made to employee on Retirement (1.67) (0.37)Closing Net Liability 26.84 27.39

(Rs. in million)

Opening Defined Benefit Obligation 27.39 26.15Current Service Cost 9.12 6.01Interest Cost 2.00 2.09Actuarial Losses / (Gain ) (10.00) (6.49)Benefits Paid (1.67) (0.37)Closing Defined Benefit Obligation 26.84 27.39

II Change in Defined Benefit Obligation




a) Discount Rate:

The discount rate is based on the prevailing market yields of Indian government securities as at the balance sheet

date for the estimated term of the obligations.

b) Expected Rate of Return on Plan Assets:

This is based on our expectation of the average long term rate of return expected on investments of the Fund

during the estimated term of the obligations.

c) Salary Escalation Rate:

The estimates of future salary increases considered takes into account the inflation, seniority, promotion and other

relevant factors.

Note: In accordance with the payment of Gratuity Act, 1972 the company provides for gratuity covering eligibleemployees. The liability on account of gratuity is covered partially through a recognized Gratuity Fund managedby Life Insurance Corporation of India and balance is provided on the basis of valuation of the liability by anindependent actuary as at the year end. The management understands that LIC’s overall portfolio of assets iswell diversified and as such, the long term return on the policy is expected to be higher than the rate of return onCentral Government bonds.

Note: Previous year figures have been regrouped and reclassified

13. Deferred TaxDeferred Tax Liability as at March 31, 2009 comprises of the following:

31.03.2009 31.03.2008A) Deferred Tax Assets on timing differences due to:

a) Provision for Gratuity and Leave Encashment 42.38 38.35b) Provision for Doubtful Debts/Advances 31.10 9.86Total 73.48 48.21

B) Deferred Tax Liabilities on timing difference due to:Depreciation 261.32 215.22Total 261.32 215.22Net Deferred Tax Liability (A-B) 187.84 167.01

(Rs. in million)

2008-09 2007-08

Discount Rate (p.a) 6% 8%Expected Rate of Return on assets (p.a) 9.25% 8%Salary Escalation Rate (p.a) 5% 10%Attrition Rate 20% 20%

III. Financial Assumptions at the valuation date: (Rs. in million)

Category of Assets Insurer Managed Funds - Life Insurance Corporation of India 100% 100%Amount Rs. in million 10.97 5.91

IV. ASSET INFORMATION: 31.03.2009 31.03.2008




14. Related Party Transactions

Following is the list of related parties and relationships:

S. No. Particulars S. No. Particulars

A) Subsidiaries 46) NCC – PNC1) NCC.Infrastructure Holdings Limited 47) NCC – SJRIPL2) NCC Urban Infrastructure Limited 48) Himachal JV3) NCC Vizag Urban Infrastructure Limited 49) NCC – KNR4) Nagarjuna Construction Co.Ltd and Partners LLC 50) NCC – NEC – Maytas5) OB Infrastructure Limited 51) NCC – VEE6) NCC.Infrastructure Holdings Mauritius Pte. Limited 52) NCC – MSKEL7) Nagarjuna Construction Co. International LLC D) Associates8) Nagarjuna Contracting Co.LLC 53) Nagarjuna Facilities Management Services LLC9) Patnitop Ropeway and Resorts Limited 54) Himalayan Green Energy Private Limited

10) Naftogaz Engineering Private Limited 55) Jubilee Hills Landmark Projects Limited 11) NCC Power Projects Ltd. 56) Varaprada Real Estates Private Limited12) NCC International Convention Centre Ltd. 57) Machilipatnam Seaport Limited

B) Step–down Subsidiaries 58) Tellapur Technocity Private Limited13) Liquidity Ltd. 59) Tellapur Town Centre Private Limited14) Dhatri Developers & Projects Private Limited 60) Tellapur Tech Park Private Limited15) Sushanti Avenues Private Limited 61) Gulbarga Airport Developers Private Limited16) Sushruta Real Estates Private Limited 62) Shimoga Airport Developers Private Limited17) PRG Estates Private Limited E) Key Management Personnel18) Thrilekya Real Estates Private Limited 63) Sri AVS Raju19) Varma Infrastructure Private Limited 64) Sri AAV Ranga Raju20) Nandyala Real Estates Private Limited 65) Sri NR Alluri21) Kedarnath Real Estates Private Limited 66) Sri JV Ranga Raju22) AKHS Homes Private Limited 67) Sri AGK Raju23) JIC Homes Private Limited 68) Sri ASN Raju24) Sushanthi Housing Private Limited 69) Sri RN Raju25) CSVS Property Developers Private Limited 70) Sri AVN Raju26) Vera Avenues Private Limited F) Relatives of Key Management Personnel27) Sri Raga Nivas Property Developers Private Limited 71) Smt. A.Neelavathi28) VSN Property Developers Private Limited 72) Smt. A.Bharathi29) M A Property Developers Private Limited 73) Smt.B.Kausalya30) Vara Infrastructure Private Limited 74) Smt.A.Satyanarayanamma31) Sri Raga Nivas Ventures Private Limited 75) Smt.J.Sridevi32) Mallelavanam Property Developers Private Limited 76) Smt. Sowjanya33) Sradha Real Estates Private Limited G) Enterprises owned or significantly influenced34) Siripada Homes Private Limited by key management personnel or their relatives35) NJC Avenues Private Limited 77) NCC Blue Water Products Limited36) NCC Urban Lanka (Private) Limited. 78) Swetha Estates37) Himachal Sorang Power Private Limited 79) R.R.V. Constructions Private Limited38) Al Mubarakia Contracting Company LLC 80) NCC Finance Limited

C) Joint Ventures 81) Swetha Capital Private Limited 39) Brindavan Infrastructure Company Limited 82) Sirisha Memorial Charitable Trust40) Western UP Tollway Limited 83) Shyamala Agro Farms Private Limited41) Bangalore Elevated Tollway Limited 84) Ranga Agri Impex Private Limited42) Pondicherry Tindivanam Tollway Limited 85) NCC Foundation43) Premco – NCC 86) Suryakumari Abraham Memorial 44) NCC – MAYTAS Foundation 45) SDB – NCC – NEC




Related Party transactions during the year ended March 31, 2009 are as follows:S.L. Particulars Subsidiaries Associates Joint Key Enterprises No. Ventures Management owned or significantly

Personnel Influenced and by Key Management

relatives Personnelor their Relatives

1) Share Application Money pending allotment 1078.40 (453.24) 35.00 – –

425.49 769.27 – – –

2) Investments 10.00 – – – –

1.67 171.88 19.76 – –

3) Loans granted 892.04 25.65 – – –

1419.19 – 24.26 – 1.75

4) Loan Repayment Received 69.55 15.70 24.26 – –

– 286.33 – – –

5) Deposits Received – – – – 3.00

– – – – –

6) Advances granted / (received) (128.27) (1.71) – 1.00 28.11

(198.55) – (1.27) – 0.31

7) Sale of Fixed Assets 1630.03 – – – –

– – – – –

8) Share of Profit – – 143.64 – –

– – 35.44 – –

9) Works Contract Receipt – – 199.03 – –

1575.46 – 1081.62 – –

10) Hire Income 128.08 – – – –

219.32 – – – –

11) Other Operating Income 71.02 – – – –

97.55 – – – –

12) Other Income 358.94 26.04 75.23 – –

229.99 34.05 65.23 – –

13) Sub–Contract Jobs – – – – 309.78

– – – – 103.50

14) Remuneration – – – 143.06 –

– – – 160.80 –

15) Rent paid/ (received) (0.35) – – 2.10 7.14

– – – 0.92 6.30

16) Interest paid – – – – 0.17

– – – – –

17) Donations – – – – 3.91

– – – – –

(Rs. in million)



Related Party transactions during the year ended March 31, 2009 are as follows:S.L. Particulars Subsidiaries Associates Joint Key Enterprises No. Ventures Management owned or significantly

Personnel Influenced and by Key Management

relatives Personnelor their Relatives

18) Debit Balances outstanding as on 31.03.2009

NCC Urban Infrastructure Limited 2103.80 – – – –

1458.35 – – – –

NCC Vizag Urban Infrastructure Limited 603.74 – – –

522.68 – – – –

NCC Infrastructure Holdings Mauritius Pte.Limited 14.84 – – – –

0.62 – – – –

Nagarjuna Contracting Company LLC 8.52 – – –

109.73 – – – –

Nagarjuna Construction Company & Partners LLC 2.86 – – –

93.52 – – – –

Himalayan Green Energy Private Limited – 13.23 – – –

– 10.00 – – –

NCC Power Projects Limited 95.99 – – – –

– – – – –

Brindavan Infrastructure Company Limited – – – – –

– – 24.26 – –

Himachal Sorang Power Private Limited 3.07 – – – –

2.49 – – – –

Jubilee Hills Landmark Projects Limited – 222.00 – – –

– 202.05 – – –

RRV Constructions – – – – 28.41

– – – – –

NCC Blue Water Products Limited – – – – 60.93

– – – – 60.27

NCC International Conventional Centre Limited 0.30 – – – –

– – – – –

Smt. Sowjanya – – – 1.00 –

– – – – –

19) Credit Balances outstanding as on 31.03.2009

Nagarjuna Construction Company International LLC 141.82 – – – –

190.93 – – – –

(Rs. in million)


Figures in italics represent previous year’s figures




Disclosure in respect of transactionswhich are more than10% of the total transactions of the sametypewith related parties during the year.

Particulars 2008–09 2007–08

Share Application Money pending allotment

– OB Infrastructure Limited 123.35 –

– NCC Infrastructure Holdings Limited 848.02 410.39

– Tellapur Technocity Private Limited (524.29) 619.21

– Jubilee Hills Landmark Project Limited 71.05 –

– Pondicherry Tindivanam Tollway Limited 35.00 –

Investments

– NCC International Convention Centre Limited 9.84 –

– Jubilee Hills Landmark Project Limited – 61.33

Loans Granted

– NCC Vizag Urban Infrastructure Limited 99.16 256.64

– NCC Urban Infrastructure Limited 696.11 1162.55

– Jubilee Hills Landmark Project Limited 25.65 –

– NCC Power Projects Limited 96.57 –

Loan Repayment Received

– Jubilee Hills Landmark Project Limited 5.69 286.33

– NCC Vizag Urban Infrastructure Limited 18.10 –

– NCC Urban Infrastructure Limited 50.67 –

– Brindavan Infrastructure Company Limited 24.26 –

Deposits Received

– NCC Finance Limited 3.00 –

Advances granted / (Received)

– Nagarjuna Construction Company & Partners LLC – 54.75

– Nagarjuna Contracting Company LLC – (43.63)

– Nagarjuna Construction Company International LLC (143.76) (190.93)

– RRV Constructions Private Limited 28.41 –

– NCC Foundation (0.31) –

– NCC. Infrastructure Holdings Mauritius Pte. Limited 14.22 –

– Himalayan Green Energy Private Limited 1.26 –

– Machilipatnam Port Limited (2.97) –

Sale of Fixed Assets

– Nagarjuna Construction Company International LLC 1630.03 –

Share of Profit

– MAYTAS–NCC JV 39.49 –

– SDB-NCC-NEC JV – 10.29

– NG-NCC JV 70.34 –

– NCC-VEE JV 19.45 17.94

– NCC-MSKEL – 5.38

Work Contract Receipt

– Brindavan Infrastructure Company Limited 199.03 –

– NCC Urban Infrastructure Limited – 650.58

– OB Infrastructure Limited – 924.88

– Bangalore Elevated Tollway Limited – 823.81

– Western UP Tollway Limited – 255.96

Hire Income

– Nagarjuna Construction Company International LLC 118.13 219.32

Other Operating Income

– Nagarjuna Construction Company International LLC 71.02 97.55

(Rs. in million)



16. Segment ReportingThe Company’s operations predominantly consist of construction / project activities. Hence there are no reportablesegments under Accounting Standard – 17. During the year under report, substantial part of the Company’s businesshas been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosuresare considered necessary. The Company’s operations outside India do not qualify as reportable segments as theoperations are not material.



Other Income

– NG-NCC JV 73.67 –

– Jubilee Hills Landmark Project Limited 25.14 33.14

– NCC Urban Infrastructure Limited 260.42 134.19

– NCC Vizag Urban Infrastructure Limited 79.86 59.71

– OB Infrastructure Limited – 33.05

Sub Contract Bills

– RRV Constructions Private Limited 309.78 103.50

Rent paid/ (Received)

– Swetha Estates 5.47 4.78

– Shyamala Agro Farms Private Limited 1.45 1.32

– Smt. Sowjanya 1.18 –

– Mr. A.G.K. Raju 0.48 –

– NCC Urban Infrastructure Limited (0.35) –

Interest Paid

– NCC Finance Limited 0.17 –

Name of the NCCL Subsidiary Assets Liabilities Contingent Capital Income Expenditure

Company % Company Liabilities Commit-

% ment

Western UP

Tollway Ltd. 2.75% 27.25% 1262.04 1262.04 10.89 501.39 – –

Bangalore

Elevated

Tollway Ltd. 0.45% 34.99% 2545.80 2545.80 27.47 292.20 – –

Brindavan

Infrastructure

Co.Ltd. 33.33% – 684.31 684.31 49.69 – 199.03 164.03

Pondicherry

Tindivanam

Tollway Ltd. 9.44% 39.56% 556.90 556.90 41.90 793.62 – –

(Rs. in million)


15. The Company’s interest in Jointly Controlled Entities as on March 31 2009 and its proportionate share in the Assets,Liabilities, Income and Expenditure of the Jointly Controlled Entities as on March 31 2009 are given below:

(Rs. in million)




Sl. No. Particulars 31.03.2009 31.03.2008

a) Net Profit after tax available for equity shareholders 1538.59 1619.47Nos. Nos.

b) Weighted Average number of equity shares for Basic EPS 228844116 218568626Add: Adjustment for outstanding share options and share warrants* 5691 152694

c) Weighted Average number of equity shares for Diluted EPS 228849807 218721320d) Face value per share Rs. 2 Rs. 2e) Basic EPS Rs. 6.72 Rs. 7.51f) Diluted EPS Rs. 6.72 Rs. 7.50

17. Earning Per Share(Rs. in million)

Sl. No. Particulars 2008-09 2007-08

a) Statutory Audit fee 9.00 9.09b) Tax Audit fee 0.33 0.31c) Certification fee 0.13 0.21d) Other Services – 4.00

Total 9.46 13.61

18. Auditors’ Remuneration (Rs. in million)

Net of service tax and education cess thereon.

* No share warrants during the year

Particulars 2008-09 2007-08

Salaries 57.12 57.12Perquisites 7.75 3.66Commission 69.84 91.66Sub-total 134.71 152.44Sitting Fee 0.66 0.48Contribution to Provident Fund & Superannuation Fund 8.35 8.35Total 143.72 161.27

19. Managerial Remuneration: Remuneration to Chairman, Managing Director, Executive Director, Whole-time Directors and Non-Executive Directors.

(Rs. in million)

2008-09 2007-08

Profit before Taxation 2281.73 2451.95Add: Managerial Remuneration 143.06 160.80

Provision for Doubtful Debts / Advances 40.57 14.00Loss on Sale of Fixed Assets / Written off Assets – 3.41

2465.36 2630.16Less: Profit on Sale of Shares – 0.29

Profit on Sale of Fixed Assets – 8.07Adjustments / Bad debts written off against the provision created earlier 0.59 2.84

Profit for the year as per Section 349 2464.77 2618.96Commission to Non-executive Directors @1% * 8.22 26.19Commission to Managing Director @1% 24.65 26.19Commission to Directors @1.5% 36.97 39.28Total 69.84 91.66

Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956 (Rs. in million)

* For the period 1st April 2008 to 31st July 2008.

Note: The above figures does not include provision for gratuity and compensated absences liability actuarially valued as separate figures arenot available.





On account of Travel 2.43 3.04On account of Technical Consultation Fees – 2.56On account of Material Purchases 378.70 –On account of Capital Goods 124.83 65.35

20. Expenditure / Remittance in Foreign Currency(Rs. in million)

Sl. No. Particulars 2008-09 2007-08

1) Amount of contract revenue recognised as revenue in the period 37,949.95 30,481.232) Aggregate amount of costs incurred and recognised profits

(less recognised losses) up to the reporting date 37,877.95 30,455.233) Amount of advances received 3,735.39 5,190.074) Amount of retention 3,724.89 2,989.53

21. Disclosure pursuant to Accounting Standard – 7 “Construction Contracts” (Rs. in million)

22. Additional information pursuant to provisions of Para 3, 4C and 4D of Part - II of Schedule VI of Companies Act, 1956in respect of Light Engineering Division

31.03.2009 31.03.2008Qty. Nos. Value Qty. Nos. Value

CAPACITY PRODUCTION SALES & STOCKS1. Capacity

a) Licensed Capacity NA NAb) Installed Capacity 376,000 376,000

(as certified by Management and relied upon by Auditors, being a technical matter)

2. ProductionCylinders – – – –

3. SalesCylinders – – – –

4. Opening StockCylinders 360 0.05 360 0.05

5. Closing StockCylinders 360 0.05 360 0.05

6. Particulars of Raw Material ConsumedSteel (MT) – – – –LPG Components – – – –

7. Value of Imported and Indigenous material Consumed and % of each to total consumptiona) Raw Materials

Imported – – –Indigenous – – –

b) Stores & SparesImported – – –Indigenous – – –

(Rs. in million)




Signatures to Schedules I to X and A to E For and on behalf of the Board

M. V. Srinivasa Murthy R.S. Raju A.A.V. Ranga Raju A. G. K. Raju

Company Secretary & VP (Legal) Vice President (F&A) Managing Director Executive Director

24. Figures of previous year have been regrouped / rearranged / reclassified wherever necessary to conform to the currentyear presentation.

23. Consumption of Materials – Projects division

31.03.2009 31.03.2008Qty. Nos. Value Qty. Nos. Value

Value of Imported and Indigenous material Consumed

and % of each to total consumption

a) Raw Materials

Imported 2.65% 378.70 – –

Indigenous 97.35% 13,896.99 100% 11,615.19

b) Stores & Spares

Imported – – – –

Indigenous 100% 144.67 100% 107.42

(Rs. in million)


Balance Sheet Abstract and Company’s General Business Profile

II. Capital Raised during the year (Amount in Rs. Thousands)

I. Registration Details

III. Position of Mobilisation and Deployment of Funds (Amount in Rs. Thousands)

Sources of Funds

V. Generic Names of TWO Principal Products / Services of Company (As per monetary terms)

Registration No.

Balance Sheet Date

ITC Code No. (ITC Code) Not Alloted

Total Liabilities

State Code : 0 1

Construction ActivityCylinders Manufacturing Activity

CIN No.: L72200AP1990PLC011146

0 3Month

2 0 0 9Year

3 1Date

2 9 4 8 2 1 8 0

Product description

Total Assets

2 9 4 8 2 1 8 0

Paid Up Capital

4 5 7 7 0 0

Reserves and Surplus

1 6 3 9 7 8 1 0

Share Application Money:

N I L

Secured Loans:

8 8 6 3 8 3 0

ESOP Outstanding

N I L

Unsecured Loans

3 5 7 5 0 0 0

Deferred Tax Liability

1 8 7 8 4 0

Application of FundsNet Fixed Assets

4 8 7 3 3 1 0

Investments

7 4 0 2 4 9 0

Net Current Assets

1 7 2 0 6 3 8 0

Misc. Expenditure

N I L

Accumulated Losses

N I LIV Performance of the Company (Amount in Rs. Thousands)

Turnover

4 1 5 5 5 7 1 0

Total Expenditure

3 9 2 7 3 9 8 0

Profit / (Loss) before Tax

2 2 8 1 7 3 0

Profit / (Loss) after Tax

1 5 3 8 5 9 0

Earning per Share (Rs.)

6 . 7 2

Dividend Rate (%)

5 5

Public Issue

N I L

Right Issue

N I L

Bonus Issue

N I L

Private Placement/ Others

2 4


Auditors’ ReportThe Board of DirectorsNagarjuna Construction Company Limited.

1. We have audited the attached Consolidated BalanceSheet of Nagarjuna Construction Company Limited (‘theCompany’) and its Subsidiaries, Joint Ventures andAssociates (collectively referred as ‘the Group’) as atMarch 31, 2009 and also the Consolidated Profit and LossAccount and the Consolidated Cash Flow Statement forthe year ended on that date both annexed thereto in whichare incorporated the returns from the Oman and Nepalbranches and certain Joint Ventures, audited by otherauditors. These consolidated financial statements are theresponsibility of the Company’s Management and havebeen prepared by the management on the basis ofseparate financial statements and other financialinformation regarding components. Our responsibility isto express an opinion on these consolidated financialstatements based on our audit.

2. We conducted our audit in accordance with the auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. An auditincludes examining, on a test basis, evidence supportingthe amounts and disclosures in the financial statements.An audit also includes assessing the accounting principlesused and significant estimates made by management, aswell as evaluating the overall financial statementpresentation. We believe that our audit provides areasonable basis for our opinion.

3. (a) As stated in Note 2 (a) of II of Schedule XI, the financialstatements of certain subsidiaries have not beenconsidered in the preparation of consolidated financialstatements, for reasons stated therein.

(b) We did not audit the financial statements of certainsubsidiaries, jointly controlled entities and associates,whose financial statement reflect Group’s share oftotal assets of Rs. 8,804.12 million as at March 31,2009, Group’s share of total revenue of Rs. 6,208.22 million, net cash flows of Rs. 2.61 millionand Group’s share of profit Rs. 285.57 million for theyear then ended. These financial statements and otherfinancial information have been audited by otherauditors whose reports have been furnished to us andour opinion in so far as it relates to the amounts

included in respect of these Subsidiaries, JointVentures, Associates is based solely on the report ofother auditors.

(c) As stated in Note 2 (b) of II of Schedule XI, the financialstatements of certain associates, jointly controlledentities whose financial statement include Group’s share of total assets of Rs. Nil million as atMarch 31, 2009, Group’s share of total revenue of Rs. Nil million, net cash flows of Rs. Nil million andGroup’s share of profit (net) of Rs. (26.34) million forthe year then ended have been considered on thebasis of unaudited financial statements prepared bythe management.

4. We report that:(a) the Consolidated Financial Statements have been

prepared by the Company’s management inaccordance with the requirements of AccountingStandard-21: Consolidated Financial Statements,Accounting Standard-23: Accounting for Investmentsin Associates in Consolidated Financial Statementsand Accounting Standard-27: Financial Reporting ofInterests in Joint Ventures notified by the Companies(Accounting Standards) Rules, 2006 ;

(b) Based on our audit and on consideration of reports ofthe other auditors on separate financial statementsand on the other financial information of thecomponents, subject to paragraph 3(a) and 3(c)above and note 17 of II of schedule XI, in our opinionand to the best of our information and according tothe explanations given to us, the attachedConsolidated Financial Statements give a true and fairview in conformity with the accounting principlesgenerally accepted in India:

(i) in the case of the Consolidated Balance Sheet, ofthe state of affairs of the Group as at March 31,2009;

(ii) in the case of the Consolidated Profit and LossAccount, of the profit of the Group for the yearended on that date; and

(iii) in the case of the Consolidated Cash FlowStatement, of the cash flows of the Group for theyear ended on that date.




Consolidated Balance Sheet as at March 31, 2009(Rs. in million)

Schedule As at As at March 31, 2009 March 31, 2008

SOURCES OF FUNDSShareholders’ FundsShare Capital I 457.70 457.68 Employees Stock Options Outstanding II – 2.66 Share Warrants (Refer Note 5 (b) of II of Schedule XI) – 54.25 Reserves and Surplus III 16,801.69 14,968.76

17,259.39 15,483.35Minority Interest 716.47 629.91 Loans FundsSecured Loans IV 22,432.61 13,263.98 Unsecured Loans V 4,360.57 2,217.00

26,793.18 15,480.98 Deferred Tax Liability (Net) (Refer Note 16 of II of Schedule XI) 195.68 169.66 Total 44,964.72 31,763.90 APPLICATION OF FUNDSFixed AssetsGross Block VI 11,406.40 8,340.81 Less : Depreciation / Amortization 2,163.11 1,635.62 Net Block 9,243.29 6,705.19 Capital Work in Progress 9,739.47 6,230.32

18,982.76 12,935.51Goodwill on Consolidation 252.49 125.45Investments VII 3,069.58 1,857.60 Deferred Tax Assets (Net) (Refer Note 16 of II of Schedule XI) 0.11 0.10Current Assets, Loans and Advances VIIIInventories 13,754.62 10,158.98 Sundry Debtors 12,511.58 9,710.84 Cash and Bank Balances 1,670.49 3,177.41 Other Current Assets 38.96 60.95 Loans and Advances 17,641.34 14,576.27

45,616.99 37,684.45 Less : Current Liabilities and Provisions IX

Liabilities 21,958.50 19,925.43 Provisions 998.98 914.06

22,957.48 20,839.49 Net Current Assets 22,659.51 16,844.96 Miscellaneous Expenditure X 0.27 0.28 (To the extent not written off or adjusted)Total 44,964.72 31,763.90 Accounting Policies and Notes on Accounts XI



For M. BHASKARA RAO & CO. For DELOITTE HASKINS & SELLS For and on behalf of the BoardChartered Accountants Chartered Accountants

M. Bhaskara Rao P. R. Ramesh M. V. Srinivasa Murthy A. A. V. Ranga RajuPartner Partner Company Secretary & Managing Director

V.P ( Legal)

Place: Hyderabad Mumbai R. S. Raju A. G. K. RajuDate: May 28, 2009 May 28, 2009 Vice President (F&A) Executive Director






V.P ( Legal)


Consolidated Profit and Loss Account for the year ended March 31, 2009(Rs. in million)

Schedule Year ended Year endedMarch 31, 2009 March 31, 2008

INCOMETurnover A 47,864.59 36,353.92 Other Income B 158.41 235.77

48,023.00 36,589.69EXPENDITUREConstruction and Other Expenses C 38,817.41 29,769.39 Establishment Expenses D 4,003.09 2,607.83 Interest and Financial Charges E 1,736.70 1,062.91 Depreciation / Amortization VI 822.89 606.65

45,380.09 34,046.78 Profit Before Tax 2,642.91 2,542.91 Provision for Taxation – Current Tax 753.01 780.72

– Deferred Tax 24.32 54.30 – Fringe Benefit Tax 15.32 19.25

792.65 854.27 Profit After Tax 1,850.26 1,688.64Minority Interest 11.57 2.56 Share of Loss from Associate Companies (Net of Tax) 25.28 36.85 11.30 13.86 Net Consolidated Profit 1,813.41 1,674.78 Balance in Profit and Loss Account brought forward 1,160.37 660.31 Less: Adjustment (Refer Note 17 of II of Schedule XI) 15.17 1,145.20 – 660.31 Balance Available for Appropriation 2,958.61 2,335.09 AppropriationsDebenture Redemption Reserve 250.00 – Proposed Dividend 251.74 297.49 Dividend Tax 42.78 50.56 Transfer to General Reserve 550.85 800.70 Transfer to Legal Reserve 19.39 5.97 Transfer to Contingency Reserve 20.00 20.00

1,134.76 1,174.72 Balance carried to Balance Sheet 1,823.85 1,160.37Earnings per share of face value of Rs. 2/- each.Basic 7.92 7.77 Diluted 7.92 7.68 Accounting Policies and Notes on Accounts XI


Consolidated Cash Flow Statement for the year ended March 31, 2009(Rs. in million)

Year ended Year ended

March 31, 2009 March 31, 2008

A) CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 2,642.91 2,542.91

Adjustments for

Depreciation / Amortisation 822.89 606.65

Miscellaneous expenditure written off 8.61 15.09

Loss on Sale of Fixed Assets 11.03 3.41

Profit on Sale of Fixed Assets (2.82) (8.07)

Interest and financial charges 1,736.70 1,062.91

Income from current investments – (0.29)

Employee Compensation Expense (0.66) 11.30

Operating Profit before Working Capital Changes 5,218.66 4,233.91

Adjustments for changes in

Trade and Other Receivables (5,788.06) (8,658.19)

Inventories (3,595.64) (3,854.59)

Trade Payables and other Liabilities 2,085.26 7,704.61

Cash used in Operations (2,079.78) (574.26)

Taxes paid (1,350.25) (1,138.46)

Net Cash used in operating activities (3,430.03) (1,712.72)

B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of Fixed Assets and other capital expenditure (7,051.76) (6,585.05)

Proceeds from sale of Fixed Assets 48.07 121.94

Investment in other companies including share application money (650.19) (1,667.72)

Advances to associates and other body corporates (38.36) 366.80

Incorporation expenses (8.60) (5.02)

Share of loss from Associates (25.28) (11.30)

Foreign Exchange Translation adjustment (arising on consolidation) 151.19 (69.02)

Interest received 365.15 245.74

Income from current investments – 0.29

Net Cash used in Investing Activities (7,209.78) (7,603.34)


Consolidated Cash Flow Statement (Contd.) for the year ended March 31, 2009




V.P ( Legal)



March 31, 2009 March 31, 2008

C) CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from Issue of Shares 80.18 4,099.05

Proceeds from Issue of Debentures 1,000.00 –

Capital Grant received 112.32 –

Long Term Funds borrowed 8,168.63 7,293.43

Unsecured Loans - Banks borrowed/ (Repaid) (Net) 2,143.57 (333.67)

Interest paid (2,024.07) (1,270.34)

Dividend and Dividend Tax paid (347.74) (228.29)

Net Cash from Financing Activities 9,132.89 9,560.18

Net change in cash and cash equivalents (A+B+C) (1,506.92) 244.12

Cash and Cash Equivalents as at April 1 (Opening Balance) 3,177.41 2,933.29

Cash and Cash Equivalents as at March 31 (Closing Balance) 1,670.49 3,177.41

Note:

1) The Cash Flow Statement is prepared in accordance with the indirect Method stated in Accounting Standard 3 on Cash Flow

Statements and presents the cash flows by operating,investing and financing activities.

2) Cash and Cash Equivalents consist of cash and bank balances which include Rs. 324.12 million (31.03.2008; Rs. 322.34

million) in Margin money Deposits lodged with Banks against letters of guarantee issued and Rs. 4.56 million (31.03.2008;

Rs. 4.25 million) in Unclaimed Dividend account.

3) Figures in brackets represent cash outflows.

4) Notes on accounts stated in Schedule XI form an integral part of the Cash Flow Statement.


Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009(Rs. in million)


Authorised Capital300,000,000 Equity Shares of Rs. 2/– each 600.00 600.00

(31.03.2008: 300,000,000 shares of Rs. 2/- each)Issued Capital

229,100,910 Equity Shares of Rs. 2/- each 458.20 458.18 (31.03.2008 : 229,088,720 Equity Shares of Rs. 2/- each)

Subscribed and Paid up228,850,910 Equity Shares of Rs. 2/- each fully paid up 457.70 457.68

(31.03.2008 : 228,838,720 Equity Shares of Rs. 2/- each)(Refer note 5 (a) of II of Schedule XI)

Of the above:(a) 1,000,000 Equity Shares of Rs. 2/- each were alloted

in 1990-91 as fully paid Equity Shares pursuant to a contract without payment being received in cash

(b) 103,368,530 Equity Shares of Rs. 2 each were alloted in 2006-07 as fully paid up Bonus shares in the ratio of 1:1 by way of capitalisation of Rs. 206.74 million from General Reserve

Total 457.70 457.68

Schedule – I Share Capital

Employee Stock Options Outstanding – 2.66

Schedule – II Employee Stock Options Outstanding




Capital ReserveAs per Last Balance Sheet 0.08 0.08 Add: Forfeiture of share warrants 54.25 –Add: Share from Jointly Controlled Entities 112.32 –(Refer Note 3 (o) of I and 5 (b) of II of Schedule XI) 166.65 0.08Securities Premium As per last Balance Sheet 11,098.23 7,076.20 Add : Premium on shares alloted 2.20 4,074.34 Less : Share Issue Expenses – 52.31

11,100.43 11,098.23 Debenture Redemption ReserveTransfer from Profit and Loss Account 250.00 –(Refer Note 8 (a) of II of Schedule XI) Legal ReserveAs per last Balance Sheet 7.95 2.13 Add : Transfer from Profit and Loss Account 19.39 5.97 Add/(Less) : On Account of Foreign Currency Fluctuation 2.14 (0.15) (Refer Note 7 of II of Schedule XI)

29.48 7.95 Contingency ReserveAs per last Balance Sheet 160.00 140.00 Add : Transfer from Profit and Loss Account 20.00 20.00

180.00 160.00 Foreign Currency Translation Reserve 29.85 (123.47)General ReserveAs per last Balance Sheet 2,665.60 1,864.90 Add : Transfer from Profit and Loss Account 550.85 800.70 Add : Transfer from Minority Interest 4.98 –

3,221.43 2,665.60Profit and Loss Account – Balance 1,823.85 1,160.37 Total 16,801.69 14,968.76

Schedule – III Reserves and Surplus


Schedules forming part of the Consolidated Balance Sheet as at March 31, 2009


11.95% Redeemable, Non-convertible Debentures 1,000.00 –(Refer Note 8 (a) of II of Schedule XI)From Banks :Term Loan – Rupee Loan 5,349.79 2,752.11

– Foreign Currency Loan 2,757.77 716.62 (Refer Note 8 (b) of II of Schedule XI)

Working Capital Demand Loan – In Rupees 4,472.16 4,209.66 – In Foreign Currency 1,433.17 1,023.09

Cash Credit (Refer Note 8 (c) & (e) of II of Schedule XI) 2,792.15 1,403.49 16,805.04 10,104.97

From Others :Term Loan (Refer Note 8 (b) of II of Schedule XI) 949.74 632.41 Vehicle Loans – In Rupees 52.40 83.67

– In Foreign Currency 47.24 8.10 (Refer Note 8 (d) of II of Schedule XI)

1,049.38 724.18 Share from Jointly Controlled Entities 3,578.19 2,434.83 Total 22,432.61 13,263.98

Schedule – IV Secured Loans

Short Term LoansFrom Banks 4,341.40 2,200.00 Share from Jointly Controlled Entities 19.17 17.00 Total 4,360.57 2,217.00

Schedule – V Unsecured Loans

(Rs. in million)


(Rs.

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Long Term (At Cost)In Trade Investments (Unquoted)In Subsidiaries(Refer note 2 (a) of II of schedule XI)In Equity Shares of Rs. 10/- each, fully paid upNCC International Convention Centre Limited (Purchased during the year 1000000 shares) 1000000 10.00 – – In Equity Shares of “LKR” 10/- each fully paid up (unquoted)NCC Urban Lanka Private Limited (value in Rs. 7) 2 – 2 –In Other CompaniesIn Equity Shares of Rs. 10/- each, fully paid upGautami Power Limited 1 (Purchased during the year 10871367 shares) 52196367 521.96 41325000 413.25 SNP Real Estates Private Limited 809950 8.10 809950 8.10 SNP Infrastructures Private Limited 2290000 22.90 2290000 22.90 SNP Developers and Projects Private Limited 567451 5.67 567451 5.67 SNP Realtors Private Limited 792331 7.92 792331 7.92 SNP Ventures Private Limited 340000 3.40 340000 3.40 SNP Property Developers Private Limited 340000 3.40 340000 3.40 NAC Infrastructure Equipment Limited 1499900 15.00 1499900 15.00 Himalayan Green Energy Private Limited 1000000 134.24 1000000 113.77 Jubilee Hills Land Mark Projects Limited 2500000 24.68 2500000 24.83 Tellapur Techno City Private Limited 14702600 108.14 14702600 134.81 Tellapur Town Centre Private Limited 2600 0.01 2600 0.03 Tellapur Tech. Park Private Limited 2600 0.01 2600 0.03 Paschal Formwork (I) Private Limited (Purchased during the year 1624725 shares) 1624725 16.25 – – Paschal Technology (I) Private Limited(Purchased during the year 27473 shares) 27473 0.27 – – Machilipatnam Port Limited(Purchased during the year 30000 shares) 30000 0.30 – – Gulbarga Airport Developers Private Limited(Purchased during the year 3700 shares) 3700 0.04 – – Shimoga Airport Developers Private Limited(Purchased during the year 3700 shares) 3700 0.04 – – In Equity Shares of Rs. 25/- each, fully paid up (Unquoted)Akola Urban Co-operative Bank Limited 4040 0.10 4040 0.10 In Shares of 'AED' 1000 each fully paid upNagarjuna Facilities Management Services LLC, Dubai 147 4.09 147 2.27 In Shares of US $ one each fully paid upTellapur Technocity (Mauritius)(Purchased during the year 17128310 shares) 17140129 871.87 11819 0.47 In 2% Redeemable Preference Shares of Rs. 100/- each fully paidupJubilee Hills Land Mark Projects Limited 4274999 427.50 4274999 427.50




March 31, 2009 March 31, 2008

A. Current Assetsi) Inventories

Materials 3,305.51 2,160.91 Finished Goods 1.29 0.05 Work-in-progress 7,060.15 4,903.14 Property Development Cost (Refer Note 10 of II of Schedule XI) 3,343.32 3,094.88 Share from Jointly Controlled Entities 44.35 –

a) 13,754.62 10,158.98ii) Sundry Debtors (Unsecured)

(Refer Note 11 of II of Schedule XI)Over Six monthsConsidered Good 2,820.23 1,322.85 Considered Doubtful 30.00 12.02

2,850.23 1,334.87 Less : Provision for doubtful debts 30.00 12.02 Others, Considered Good 9,596.66 8,233.07

12,416.89 9,555.92 Share from Jointly Controlled Entities 94.69 154.92

b) 12,511.58 9,710.84

Schedule – VIII Current Assets, Loans and Advances



March 31, 2009 March 31, 2008


Other Investments (Quoted)In Equity Shares of Rs. 10/- each, fully paid upNCC Finance Limited (value in Rs. 90) 9 – 9 – In Debentures of Rs. 100/- each fully paid up (Unquoted)Jubilee Hills Land Mark Projects Limited (Purchased during the year 710520 debentures) 1323832 132.38 613312 61.33 In Debentures of Rs. 1/-, fully paid up (Unquoted)Tellapur Techno City Private Limited(Purchased during the year 94900000 debentures) 677716524 677.72 582816524 582.82 In Mutual Funds Reliance Liquid Plus – – – 30.00 Share from Jointly Controlled Entities 73.59 – Total 3,069.58 1,857.60 Aggregate amount of Quoted Investments – – Aggregate amount of Unquoted Investments 3,069.58 1,857.60 Aggregate market value of Quoted Investments – –

Note:1) The shares are subject to Non-Disposal undertaking furnished in favour of the Power Finance Corporation. Further, shares

to the extent of 26,212,652 (31.03.2008: 26,212,652) aggregating Rs. 262.12 million (31.03.2008: Rs. 262.12 million) havebeen pledged to the said Corporation for the term loan availed by Gautami Power Limited.





iii) Cash and Bank Balances :(Refer Note 12 of II of Schedule XI)Cash on hand 35.60 187.47 Bank Balance :In Current AccountsWith Scheduled Banks 973.43 2,249.70 With Others 137.17 193.26 In Deposit AccountsWith Scheduled BanksMargin Money Deposits 269.56 322.34 (Lodged with Banks against guarantees / letters of credit issued)Fixed Deposits 10.79 34.63 With Others 54.56 4.06


c) 1,670.49 3,177.41Other Current Assets

Interest Accrued on Deposits 29.80 60.95 Share from Jointly Controlled Entities 9.16 –

d) 38.96 60.95B. Loans And Advances

(Unsecured and Considered good unless otherwise stated) Advances toAssociates 274.01 236.31 Other Body Corporates 80.93 80.27 (Includes Rs. 60.93 million secured by equitable mortgage of immovable properties of a body Corporate)

354.94 316.58 Advances to Suppliers, Sub-contractors and OthersConsidered Good 8,453.02 7,508.28 Considered Doubtful 39.00 16.41

8,492.02 7,524.69 Less : Provision for doubtful advances 39.00 16.41

8,453.02 7,508.28 Advances recoverable in cash or in kind orfor value to be received 537.96 745.47 Advance towards Share Application Money 372.75 934.54 Retention MoneyConsidered Good 4,904.72 3,234.13 Considered Doubtful – 0.59

4,904.72 3,234.72 Less : Provision for doubtful retention money – 0.59

4,904.72 3,234.13 Deposits with Clients and Others 756.14 659.84 Prepaid Expenses 488.75 100.00 Advance Taxes and Tax Deducted at Source (Net of Provision for Tax) 1,664.77 1,052.69Share from Jointly Controlled Entities 108.29 24.74

e) 17,641.34 14,576.27 Total (a + b + c + d + e) 45,616.99 37,684.45

Schedule – VIII Current Assets, Loans and Advances (Contd.)




March 31, 2009 March 31, 2008

a) Current LiabilitiesSundry creditorsDues to Micro, Small & Medium Enterprises 2.76 – (Refer Note 14 of II of Schedule XI)Dues to Others 8,915.10 7,794.36 Mobilisation Advance 6,971.84 6,079.30 Material Advance 883.26 786.36 Advances from Customers/Others 1,044.92 1,931.42 Liability towards Investor Education and Protection Fund 4.56 4.25 (Represents unclaimed dividend required to be transferred to the said fund on completion of seven years. No such amount is due as on the Balance Sheet date)Other Liabilities 4,044.83 3,100.16 Interest Accrued but not due on loans 78.30 22.51


21,958.50 19,925.43 b) Provisions

Taxation (Net of advance Tax) 458.93 427.14Proposed Dividend 251.74 297.49 Dividend Tax 42.78 50.56 Employee Benefits 233.46 125.17 Fringe Benefit Tax 2.51 1.18

989.42 901.54Share from Jointly Controlled Entities 9.56 12.52

998.98 914.06 Total 22,957.48 20,839.49

Schedule – IX Current Liabilities and Provisions

(To the extent not written off or adjusted)i) Preliminary Expenses 0.16 0.42

Add : Incurred during the year – 0.07 0.16 0.49

Less : Written off / Adjusted during the year – 0.33 0.16 0.16

ii) Share Issue Expenses – 0.24 Less : Amortized during the year – 0.24

– –iii) Project and Other Amenities – 9.65

Add : Incurred during the year 0.03 – 0.03 9.65

Less : Amortized / Adjusted during the year – 9.65 0.03 –

Share from Jointly Controlled Entities 0.08 0.12 0.11 0.12

Total 0.27 0.28

Schedule – X MISCELLANEOUS EXPENDITURE (Rs. in million)


Schedules forming part of the Consolidated Profit and Loss Account for the year ended March 31, 2009

Material ConsumptionCement 2,792.56 1,562.52 Steel 5,528.88 4,518.36 Bitumen 918.39 844.69 Other Construction Material 6,783.60 5,404.05 Stores and Spares 182.17 121.42

16,205.60 12,451.04Power and Fuel 68.54 61.18 Sub-contractors Work Bills 15,846.40 12,494.46 Labour Charges 4,208.52 3,315.92 Transport Charges 495.36 462.41 Rates and Taxes Value Added Tax 885.92 734.31 Service Tax 147.22 174.61

1,033.14 908.92 Repairs and MaintenanceMachinery 1,045.89 678.49 Others 117.31 99.24

1,163.20 777.73 Hire Charges for Machinery and others 1,201.87 649.47 Technical Consultation 110.61 179.47 Royalties, Seigniorage and Cess 143.70 88.40 Watch and Ward 75.91 54.37 Property Development Cost 32.51 3.24 Other Expenses 465.76 422.17

2,030.36 1,397.12 (Increase) in Work-in-Progress / Finished GoodsOpening Balance 4,977.39 2,878.00 Closing Balance 7,211.10 4,977.39

(2,233.71) (2,099.39)Total 38,817.41 29,769.39

Schedule – C Construction and other expenses


March 31, 2009 March 31, 2008

Project Division 46,000.06 35,688.68 Others 1,665.51 466.72 Share from Jointly Controlled Entities 199.02 198.52 Total 47,864.59 36,353.92

Schedule – A Turnover

Profit on Sale of Investment – 0.27 Dividend from Current Investments – 0.02 Profit on Sale of Fixed Assets 2.82 8.07 Miscellaneous Receipts 155.59 227.41 Total 158.41 235.77

Schedule – B Other Income


Schedules forming part of the Consolidated Profit and Loss Account for the year ended March 31, 2009


March 31, 2009 March 31, 2008

a) Employees Remuneration and BenefitsSalaries and Other Benefits 2,307.16 1,448.80 Contribution to Provident Fund and Other Funds 139.43 96.84 Staff Welfare Expenses 144.60 86.30 Employee Compensation Expense - stock options (0.66) 11.30 Total (a) 2,590.53 1,643.24

b) Administrative ExpensesRent, Rates and Taxes 384.02 217.26 Office Maintenance 94.28 93.16 Electricity Charges 46.43 35.89 Postage, Telegrams and Telephones 61.17 50.86 Travelling and Conveyance 223.37 204.73 Printing and Stationery 38.52 33.16 Insurance 79.29 67.78 Advertisement 33.95 28.51 Tender Documents 26.07 21.89 Legal and Professional Charges 72.64 43.12 Miscellaneous Expenses 133.54 77.25 Auditors' Remuneration 11.46 14.99Directors' Sitting Fees 0.73 0.48 Bad Debts / Advances Written off 1.25 – Provision for Doubtful Debts / Advances 40.57 14.00 Consultation Charges 139.58 37.41 Donations 6.05 5.60 Loss on Assets sold/discarded/written off 11.03 3.41 Miscellaneous Expenditure written offPreliminary Expenses – 0.33 Share Issue Expenses – 0.24 Project and Other Amenities – 9.65 Share from Jointly Controlled Entities 8.61 4.87 Total (b) 1,412.56 964.59 Total (a + b) 4,003.09 2,607.83

Schedule – D Establishment Expenses

InterestTerm Loans 707.30 410.31 Working Capital Demand Loans and Cash Credit 772.84 415.62 Mobilisation Advance 167.50 134.93 Vehicle Loans 10.82 6.93 Others 77.49 65.88

1,735.95 1,033.67 Less: Interest capitalised 1.25 –Less: Interest Income - from Bank and other Accounts 339.51 213.50 Less: Share from Jointly Controlled Entities 3.65 0.17

1,391.54 820.00 Financial ChargesCommission on - Bank Guarantees 134.32 121.62

- Letters of Credit 62.09 48.32 Bank charges 97.13 21.30 Share from Jointly Controlled Entities 51.62 51.67

345.16 242.91 Total 1,736.70 1,062.91

Schedule – E Interest and Financial Charges

Schedules forming part of the Consolidated Accounts

Schedule – XI Accounting Policies and Notes on Accounts


I. SIGNIFICANT ACCOUNTING POLICIES

1. Principles of ConsolidationThe consolidated financial statements relates to Nagarjuna Construction Company Limited (“the Company”), itssubsidiary companies, jointly controlled entities and associates (the “Group”). The consolidated financial statementshave been prepared on the following basis:

a) The financial statements of the Company and its subsidiary companies have been consolidated on a line-by-linebasis by adding together the book values of like items of assets, liabilities, income and expenses, after fullyeliminating intra-group balances and unrealised profits or losses on intra-group transactions as per AccountingStandard 21 - “Consolidated Financial Statements” notified by the Companies (Accounting Standard) Rules, 2006.

b) Interest in jointly controlled entities have been consolidated by using the ‘proportionate consolidation’ method asper Accounting Standard 27 - ‘Financial Reporting of Interests in Joint Ventures’ notified by the Companies(Accounting Standard) Rules, 2006.

c) In case of associates where the Company directly or indirectly through its subsidiaries holds more than 20% ofequity, Investments in associates are accounted under the equity method as per Accounting Standard 23 -“Accounting for Investments in Associates in Consolidated Financial Statements” notified by the Companies(Accounting Standard) Rules, 2006.

d) The financial statements of the subsidiaries, the jointly controlled entities and the associates used in theconsolidation are drawn up to the same reporting date as that of the Company, i.e. March 31, 2009 except oneAssociate.

e) The excess of cost to the Company, of its investment in the subsidiaries and the jointly controlled entities over theCompany’s share of equity is recognised in the financial statements as Goodwill.

f) The excess of the Company’s share of equity of the subsidiaries and jointly controlled entities on the acquisitiondate, over its cost of investment is treated as Capital Reserve.

g) Minority interest in the net assets of the consolidated subsidiaries is identified and presented in consolidatedbalance sheet separately from current liabilities and equity of the company.

Minority Interest in the net assets of consolidated subsidiaries consists of:

i) The amount of equity attributable to minorities at the date on which investment in a subsidiary is made; and

ii) The minorities’ share of movements in the equity since the date the parent subsidiary relationship came intoexistence.

h) Minority interest in the net profit for the year of consolidated subsidiaries is identified and adjusted against the profitafter tax of the group.

i) Intra-group balances and intra-group transactions and resulting unrealised profits/loss has been eliminated.

j) In case of foreign subsidiaries being non integral foreign operations, revenue items are consolidated at monthlyaverage of exchange rate prevailing during the year. All assets and liabilities are converted at the rates prevailingat the end of the year. Any exchange difference arising on consolidation is recognised in “Foreign CurrencyTranslation Reserve”.

k) The consolidated financial statements are prepared to the extent possible using uniform accounting policies forlike transactions and other events in similar circumstances and are presented to the extend possible, in the samemanner as the Company’s separate financial statements.

2. Investments in subsidiaries not considered for consolidation, jointly controlled entities and associates have been


Schedule – XI Accounting Policies and Notes on Accounts (Contd.)

accounted as per Accounting Standard 13 - “Accounting for Investments” notified by the Companies (AccountingStandard) Rules, 2006.

3. Other significant accounting policies:

a) The Consolidated Accounts have been prepared on accrual basis under historical cost convention in accordancewith the Generally Accepted Accounting Principles in India and accounting standards prescribed in Companies(Accounting Standard) Rules, 2006 to the extent applicable.

b) Fixed Assets and Depreciation:Fixed Assets are stated at cost of acquisition, less accumulated depreciation thereon. Depreciation is providedon straight line method / written down value method (in respect of one subsidiary) at the rates prescribed inSchedule XIV of the Companies Act, 1956 except for construction accessories which are depreciated at 20% p.a.based on useful life determined by the Management. Leasehold improvements are amortised over the period oflease. Intangible assets are amortised over a period of five years.

Fixed assets in joint venture operations, which are accounted to the extent of the Company’s interest in the venture,are depreciated on Straight Line Method / Written Down Value Method at the rates prescribed in Schedule XIV ofthe Companies Act, 1956 or at higher rates as stated below:

The Cost of Concessionaire Asset of a jointly controlled entity is amortised over the period of 8 years as per theconcession agreement entered into with the Public Works Department, Government of Karnataka and KarnatakaRoad Development Corporation Limited.

Capital Work in Progress: In respect of “Concessionaire Assets” all costs incurred towards construction areaccumulated under capital work in progress till the completion of construction.

c) Borrowing Costs:Borrowing Costs that are directly attributable to acquisition, construction or production of a qualifying asset arecapitalised as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period oftime i.e., more than 12 months to get ready for its intended use. All other borrowing costs are charged to revenue.

d) Impairment of Assets: The carrying amount of assets, other than inventories is reviewed at each balance sheet date to determine whetherthere is any indication of impairment. If any such indication exists, the recoverable amount of the assets isestimated. The recoverable amount is the greater of the asset’s net selling price and value in use which isdetermined based on the estimated future cash flow discounted to their present values. An impairment loss isrecognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount.Impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount.

e) Investments:Investments are classified as long term and current investments. Long Term Investments are carried at cost lessprovision for permanent diminution, if any, in value of such investments. Current investments are carried at lowerof cost and fair value.

Description Straight Line Method Written Down Value Method

1) Plant and Machinery 4.75% 15% - 25%2) Furniture and Fixtures 6.33% 10% - 15%3) Office Equipments 4.75% 15% - 25%4) Computers 16.21% 60%5) Tools and Equipments 4.75% 15% - 25%6) Construction Vehicles – 15% - 25%7) Construction Accessories 20% 15% - 25%8) Office Vehicles 9.50% 15% - 25%




f) InventoriesRaw Materials:Raw Materials, construction materials and stores & spares are valued at weighted average cost. Cost excludesrefundable duties and taxes.

Work in Progress:i) Project Division: Work-in-Progress is valued at the contract rates less profit margin / estimates.

ii) Light Engineering Division: Work-in-Progress is valued at lower of cost and net realisable value.

iii) Property Development: Properties under development are valued at cost. Cost comprises all directdevelopment expenditure, administrative expenses and borrowing costs. Land held for resale is valued atlower of cost and net realisable value.

iv) Real Estate Projects:

i) Completed properties held for sale are stated at the actual cost or net realizable value, whichever is lower.ii) Construction Work-in-progress is valued at cost. Cost is sale value less profit margin.

Finished Goods:Finished goods of Light Engineering Division are valued at lower of cost and net realisable value.

g) Employee BenefitsLiability for employee benefits, both short and long term, for present and past services which are due as per theterms of employment are recorded in accordance with Accounting Standard (AS) 15 “Employee Benefits” notifiedby the Companies (Accounting Standard) Rules, 2006.

i) GratuityIn accordance with the Payment of Gratuity Act, 1972 the Company provides for gratuity covering eligibleemployees.

Liability on account of gratuity is:

• covered partially through a recognised Gratuity Fund managed by Life Insurance Corporation of India andcontributions are charged to revenue; and

• balance is provided on the basis of valuation of the liability by an independent actuary as at the year end.

ii) SuperannuationThe Company makes annual contribution to an approved superannuation fund covered by a policy with BirlaSunlife Insurance Company Limited. The Company has no further obligation beyond the annual contribution.

iii) Provident FundContribution to Provident fund (a defined contribution plan) made to Regional Provident Fund Commissionerare recognised as expense.

iv) Compensated AbsencesLiability for compensated absence is treated as a long term liability and is provided on the basis of valuationby an independent actuary as at the year end.

In respect of certain Overseas branch and subsidiaries employees, end of service benefit is accrued inaccordance with terms of employment. Employee entitlements to annual leave and gratuity are recognisedon actual basis and charged to profit and loss account.

h) Deferred Revenue Expenditure: Projects and Other amenities expenditure incurred upto March 31, 2005, the benefit of which is spread over morethan one year is grouped under Miscellaneous Expenditure and is amortised over the period in which benefitswould be derived.





i) Share Issue Expenses: Share issue expenses are written off over a period of 10 years.

j) Revenue Recognitioni) Project Division:

Revenue from construction contracts is recognised by reference to the percentage of completion of thecontract activity. The stage of completion is determined by survey of work performed and / or on completionof a physical proportion of the contract work, as the case may be, and acknowledged by the contractee.Future expected loss, if any, is recognised as expenditure.

ii) Property Development: Revenue is recognised when the Company enters into an agreement for sale with the buyer and all significantrisks and rewards have been transferred to the buyer and there is no uncertainty regarding realisability of thesale consideration.

iii) Light Engineering Division: Revenue is recognised on despatch of goods to customers.

iv) Annuity Income:Annuity is recognised on accrual basis in accordance with the provisions of the concession agreements.

v) Real Estate Project: Revenue from the sale of properties is recognised on transfer of all significant risks and rewards of ownershipto the buyers, which coincides with the entering into a legally binding agreement and it is not unreasonableto expect ultimate collection and no significant uncertainty exists regarding the amount of consideration.However, if at the time of transfer substantial acts are yet to be performed under the contract, revenue isreconsigned on the basis of percentage completion method, measured on the basis of percentage of actualcost incurred including proportionate land cost bears to the total estimated cost of the project under execution.Revenue comprises the aggregate amount of sale price as per the terms of the agreement entered into withthe customers. The recognition is subject to reaching 25% of physical progress measured in terms ofestimated cost. The estimate of cost and saleable areas is reviewed periodically by the management andany effect of changes in estimates is recognised in the period of changes. Further, on periodical review if anyproject is expected to incur loss, the entire loss is recognised immediately.

Cost in relation to the above includes cost of land, development cost, project over heads, borrowing costand all cost incurred for bringing the property to marketable condition or its intended use.

vi) Management fees: Management fee is accounted on accrual basis in accordance with the terms of the agreement.

k) Joint Venture Projects: i) In respect of Joint Venture Contracts in the nature of jointly controlled operations, the assets controlled,

liabilities incurred, the share of income and expenses incurred are recognised in the agreed proportions underrespective heads in the financial statements.

ii) Assets, Liabilities and Expenditure arising out of contracts executed wholly by the Company pursuant to a jointventure agreement are recognised under respective heads in the financial statements. Income from thecontract is accounted net of joint venturer’s share under turnover in these financial statements.

iii) Share of turnover attributable to the Company in respect of contracts executed by the other joint venturepartners pursuant to Joint Venture Agreement, is accounted under Turnover in these financial statements.

l) Foreign exchange translation and foreign currency transactionsMonetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the yearare translated at year end rates. The difference in translation of monetary assets and liabilities and realised gains



and losses on foreign exchange transactions are recognised in the Profit and Loss Account.

Foreign branches are classified as non-integral foreign operations. Assets and Liabilities (both monetary and non-monetary) are translated at the closing rate at the year end. Income and expenses are translated at the monthlyaverage rate at the end of the respective month. All resulting exchange differences are accumulated in a separateaccount ‘Foreign Currency Translation Reserve’ till the disposal of the net investments.

m) LeasesThe Company’s leasing arrangements are mainly in respect of operating leases for premises and constructionequipment. The leasing arrangements range from 11 months to 5 years generally and are usually cancellable/renewable by mutual consent on agreed terms. The aggregate lease rents payable are charged as rent in the Profitand Loss Account.

n) Taxesi) Current Tax: Provision for Current Tax is made based on taxable income computed for the year under the

applicable tax laws.

ii) Deferred Taxes: Deferred Tax is accounted for by computing the tax effect of timing differences which ariseduring the year and reverse in subsequent periods. Deferred tax assets are recognised and carried forwardonly to the extent that there is a reasonable certainty that sufficient future taxable income will be availableagainst which such Deferred Tax Assets can be realised.

o) GrantsEquity support received from National Highways Authority of India for meeting capital cost of the project is treatedas Capital Reserve.

p) Contingency ReserveThe Company transfers to Contingency Reserve out of the Profit and Loss Appropriation Account such amountsas the Management considers appropriate based on their assessment to meet any contingencies relating tosubstantial expenditure incurred during the maintenance period of a contract, non-realisation of contract billsearlier recognised as income and claims, if any, lodged by the contractees or by sub-contractors or by any thirdparty against the Company in respect of completed projects for which no specific provision has been made.

q) Earnings per ShareThe Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS) 20,Earnings Per Share notified by the Companies (Accounting Standards) Rules, 2006. Basic earnings per equityshare is computed by dividing the net profit for the year attributable to the Equity Shareholders by the weightedaverage number of equity shares outstanding during the year. Diluted earnings per share is computed by dividingthe net profit for the year, adjusted for the effects of dilutive potential equity shares, attributable to the EquityShareholders by the weighted average number of the equity shares and dilutive potential equity shares outstandingduring the year except where the results are anti dilutive

r) Provisions, Contingent Liabilities and Contingent AssetsThe Company recognises provisions when there is present obligation as a result of past event and it is probablethat there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. Adisclosure for Contingent liabilities is made in the notes on accounts when there is a possible obligation or apresent obligation that may, but probably will not, require an outflow of resources. Contingent assets are neitherrecognised nor disclosed in the financial statements.





II. Notes on Accounts

1. The Subsidiaries, Jointly Controlled Entities and Associate companies considered in the consolidated financialstatements are:

Country of Proportion of Ownership

Name of the Entity incorporation Interest

Subsidiaries of NCCL Current Year Previous Year

NCC Urban Infrastructure Limited India 80% 80%

NCC Infrastructure Holdings Limited India 100% 100%

NCC Vizag Urban Infrastructure Limited India 95% 95%

OB Infrastructure Limited India 67.85% 64%

Nagarjuna Construction Co. Ltd & Partners LLC Sultanate of Oman 100% 100%

Nagarjuna Construction Co. International LLC Sultanate of Oman 100% 100%

NCC Infrastructure Holdings Mauritius Pte.Limited Mauritius 100% 100%

Patnitop Ropeway & Resorts Limited India 100% 100%

Nagarjuna Contracting Company LLC Dubai 100% 100%

Naftogaz Engineering Private Limited India 100% 100%

NCC Power Projects Ltd. India 100% NA

Subsidiary of NCC Urban Infrastructure Limited

Dhatri Developers & Projects Private Limited India 100% 100%

Sushanti Avenues Private Limited India 100% 100%

Sushruta Real Estates Private Limited India 100% 100%

PRG Estates Private Limited India 100% 100%

Thrilekya Real Estates Private Limited. India 100% 100%

Varma Infrastructure Private Limited India 100% 100%

Nandyala Real Estates Private Limited India 100% 100%

Kedarnath Real Estates Private Limited India 100% 100%

AKHS Homes Private Limited India 100% 100%

JIC Homes Private Limited India 100% 100%

Sushanthi Housing Private Limited India 100% 100%

CSVS Property Developers Private Limited India 100% 100%

Vera Avenues Private Limited India 100% 100%

Sri Raga Nivas Property Developers Private Limited India 100% 100%

VSN Property Developers Private Limited India 100% 100%

M A Property Developers Private Limited India 100% 100%

Vara Infrastructure Private Limited India 100% 100%

Sri Raga Nivas Ventures Private Limited India 100% 100%

Mallelavanam Property Developers Private Limited India 100% 100%

Sradha Real Estates Private Limited India 100% 100%

Siripada Homes Private Limited India 100% 100%

NJC Avenues Private Limited India 100% 100%




Country of Proportion of Ownership

Name of the Entity incorporation Interest

Current Year Previous Year

Jointly Controlled Entity of NCC Urban Infrastructure Limited

Varaprada Real Estates Private Limited India 40% 40%

NCCUIL – Prayash Joint Venture India 50% 50%

Partnership Firm

NR Avenues India 100% NA

Subsidiary of NCC Infrastructure Holdings Limited

Himachal Sorang Power Private Limited India 90% 90%

Subsidiary of NCC Infrastructure Holdings Mauritius Pte.Limited

Liquidity Limited Mauritius 100% 100%

Al Mubarakia Contracting Co.LLC Dubai 100% NA

Jointly Controlled Entities of NCCL

Brindavan Infrastructure Company Limited India 33.33% 33.33%

Western UP Tollway Limited India 30% 30%

Bangalore Elevated Tollway Limited India 35.44% 33.5%

Pondicherry Tindivanam Tollway Limited India 49% 49%

Associates of NCCL

Jubilee Hills Landmark Projects Limited India 25% 25%

Himalayan Green Energy Private Limited India 50% 50%

Nagarjuna Facilities Management Services LLC Dubai 49% 49%

Machilipatnam Seaport Limited India 50% 26%

Tellapur Technocity Private Limited India 26% 26%

Tellapur Town Centre Private Limited India 26% 26%

Tellapur Tech Park Private Limited India 26% 26%

2. a) In respect of subsidiary Companies, NCC Urban Lanka (Private) Limited, where there are no transactions during

the year and NCC International Convention Centre Limited, the accounts of which have not been closed for the

year ended 31.03.2009, are not considered for consolidation.

b) In respect of the following Associate Companies, the consolidation has been made on the basis of accounts

compiled by the management:

• Jubilee Hills Landmark Projects Limited

• Tellapur Town Centre Private Limited

• Tellapur Techno City Private Limited

• Tellapur Tech Park Private Limited

• Varaprada Real Estates Private Limited

• NR Avenues

3. Contingent liabilities not provided for:

a) Letters of credit - Rs.1565.41 million (31-03-2008: Rs. 2029.91 million).

b) Counter Guarantees given to the Bankers – Rs. 37143.18 million (31-03-2008: Rs. 31271.02 million).




c) Corporate Guarantees given to Banks and Financial institutions for financial assistance extended to Associates

and Joint Ventures Rs. 8.82 million (31-03-2008: Rs. 50.91 million).

d) Disputed Seigniorage Charges levied by Director (Mines & Geology) Government of Andhra Pradesh, in respect

of which the Company has obtained a stay from the Hon’ble Supreme Court of India – Rs. 61.59 million

(31.03.2008: Rs. 61.59 million).

e) Disputed income tax liability for which the Company preferred appeal Rs. 69.77 million (31-03-2008: Rs. Nil).

f) Disputed Sales Tax Liability for which the Company preferred appeal Rs. 49.11 million (31.03.2008:

Rs. 63.75 million).

g) Disputed central excise duty relating to cement plant, which was sold in earlier year, for which the Company has

filed an appeal to CESTAT, Bangalore Rs. 28.23 million (31.03.2008: Rs. 28.23 million).

h) Disputed service tax liability for which the Company preferred appeal Rs. 186.12 million

(31-03-2008: Rs. 23.88 million )

i) Disputed Sole arbitrator award of Rs. 30.00 million in case of counter claim by Bhartiya Reserve Bank Note

Mudran Private Limited, against which the Company has filed an appeal before City Civil Court, Bangalore

(31-03-2008: Rs. 30.00 million)

j) Joint and several liability in respect of joint venture projects and liquidated damages in respect of delays in

completion of projects – amount not ascertainable.

k) Claims against the Company not acknowledged as debts Rs. 530.40 million(31-03-2008: Rs. 401.40 million).

l) Levy of labour cess @ 1% (w.e.f. July 2007) on the construction contracts executed by the Company in the

State of Andhra Pradesh contested before the Honourable High Court of Andhra Pradesh - amount not

ascertainable.

m) Future Export commitments on account of import of machinery and equipments at concessional rate of duty

under EPCG scheme is Rs. 483.04 million (31-3-2008: Rs. Nil).

4. Estimated amount of contracts remaining to be executed on Capital Account and not provided for (net of advances

Rs. 1013.83 million (31.03.2008: Rs. 1331.25 million) – Rs. 3113.38 million (31.03.2008: Rs. 5707.07 million).

Commitment towards investment in companies [net of advances Rs.10907.38 million (31.03.2008: Rs. 7012.13

million)] Rs. 5699.62 million (31.03.2008:Rs. 5260.45 million).

5. Share Capital

a) During the year, vested Options were exercised and the Company has allotted 2,000 equity shares in Grant 1

of Rs. 2/- each at a premium of Rs. 9/- per share and 10,190 equity shares in Grant 3 of Rs. 2/- each at a

premium of Rs. 20/- per share aggregating to Rs. 0.25 million (includes share premium Rs. 0.22 million).

Consequent to the said allotment, Rs. 1.98 million representing the intrinsic value of Rs. 30.905 per option for

Grant 1 and Rs. 188.00 per option for Grant 3 exercised has been transferred to securities premium account

from Employees Stock Options Outstanding Account

b) Share Warrants:

The Company had allotted 25,00,000 Share warrants on preferential basis to M/s.AVSR Holdings Private

Limited, the promoter of the Company, at a price of Rs. 217/- per warrant with a right to apply and be allotted

Equity Shares of the Company of Rs. 2/- each at a premium of Rs. 215/- per share within a period not

exceeding 18 months from the date of allotment and the Company was in the receipt of Rs. 54.25 million as

10% advance against the said share warrants allotted. The promoter Company has not exercised their right to

subscribe within the stipulated time period. Consequently, the advance received has been forfeited and

transferred to Capital Reserve account.



b) Movement in the options under ESOP, 2004

*As there is no charge to profit and loss account fair value disclosure is not given.

6. NCC Employees Stock Options Plan, 2004

a) The Company follows the intrinsic value method in which the intrinsic value represents the excess of Market

price over the exercise price of the option. The accounting value is computed by aggregating the intrinsic value

of all the employee options granted during the accounting period. This accounting value is recognised as the

Deferred employee compensation expense with a corresponding obligation to the stock option holders. The

deferred employee compensation expense is amortized over the period of vesting on a straight-line basis.

Upon exercise of option, the proceeds received are credited to Share Capital and Securities Premium Account.

Deferred employee cost, obligation and amortised amount are derecognised upon lapse of options as per the

terms of the scheme.

Options Weighted average exercise price per

Stock Option(Rupees)

Options outstanding at the beginning of year 15800 20.61Granted during the year – –Lapsed during the year Grant 3 3610 22.00Exercised during the year Grant 1 2000 11.00Exercised during the year Grant 3 10190 22.00Allotted during the year Grant 1 2000 11.00Allotted during the year Grant 3 10190 22.00Options outstanding at the end of year – –Options exercisable at the end of year – –


7. Legal Reserve

As per Article 106 of the Commercial law of 1974 in the Sultanate of Oman, 10% of a Company’s Net Profit required

to be transferred to a non-distributable legal reserve until the amount of the legal reserve equals one-third of the

Company’s issued share capital. Accordingly, Rs. 16.87 million has been appropriated to legal reserve by a subsidiary

Company. Similarly, as per the provisions of the UAE Commercial Companies Act, 10% of a Company’s Net Profit

required to be transferred to a non-distributable statutory reserve until the amount of the statutory reserve equals 50%

of the Company’s paid up share capital. Accordingly, Rs. 2.52 million has been appropriated to legal reserve by

subsidiary Companies.

8. Loan Funds

Secured Loans

a) 11.95% Redeemable Non Convertible Debentures:

i) 11.95% Redeemable Non Convertible Debentures numbering to 1000 having a face value of Rs.10 lakhs each

aggregating to Rs. 100 crores privately placed with Life Insurance Corporation of India are secured by first

charge in favour of IDBI Trusteeship Services Limited, trustees to the debenture holders:

a) by way of hypothecation of the Company’s movable properties specified in the Schedule-2 of

Memorandum of Hypothecation dated 25th April, 2009;

b) first charge by way of hypothecation of the Company’s immovable property situated at Gujarat as

specified in first schedule to the Debenture Trust Deed dated 23rd April, 2009;

c) equitable mortgage by deposit of title deeds of Company’s immovable properties situated at Hyderabad,




Bangalore, Mumbai and New Delhi as specified in schedule-A of Declaration and Undertaking dated 25th

April, 2009.

ii) These debentures numbering to 1000 having a face value of Rs. 10 lakhs each aggregating to Rs. 100 crores

are to be redeemed in 3 instalments in the ratio of 25:25:50 commencing at the end of 3rd year from the date

of allotment i.e., 4th February 2012 onwards.

iii) The Company has created Rs. 250 million as Debenture Redemption Reserve in accordance with the

provisions of the Company’s Act.

b) Term Loans

Term Loans availed from banks and others are secured by hypothecation of specific assets, comprising plant and

machinery and construction equipment, acquired out of the said loans and personal guarantee of a Director.

c) Working Capital Facilities: Cash Credit facilities and Working Capital Demand Loans from consortium of banks

are secured by:

i) Hypothecation against first charge on stocks, book debts and other current assets of the Project and Light

Engineering Division of the Company both present and future ranking parri passu with consortium banks

ii) Hypothecation against first charge on all unencumbered fixed assets of the Project Division of the Company

both present and future ranking parri passu with consortium banks.

iii) Equitable mortgage of seven properties (Land & Buildings).

iv) Mortgage of development rights to the extent of 9,86,266 Square feet comprising of Company’s share of 322

flats (8,23,740 Square Feet) and 337 car parking slots (162526 Square Feet)

v) Personal guarantee of certain Directors.

vi) Working Capital Demand Loan in foreign currency is secured either/and or as:

- Exclusive First hypothecation charge of project assets pertaining to the Al Amerat Quriyat road project.

d) Vehicle Loans: Vehicle loans availed are secured by hypothecation of vehicles acquired out of the said loans.

e) Foreign currency loan to the extent of USD 20 million equivalent to Rs.1017.60 million (31.03.2008: USD 20 million

equivalent to Rs.801.80 million) and foreign currency Working Capital Demand Loan USD 15 million equivalent to

Rs. 763.20 million (31.03.2008: USD 15 million equivalent to Rs. 601.35 million) are secured by a second charge

created in favour of M/s.3i Infotech Trustyship Services Limited (a subsidiary of ICICI Bank Limited) on fixed assets

Rs. 418.32 million (31.03.2008:Rs. 557.53 million) (written down value) of a Joint Venture for loans sanctioned by

ICICI Bank Limited Bahrain.

9. Debenture Application Money: Debenture application money received for the Unsecured fully convertible zero coupon

rate debentures of Rs. 100/- each have been shown under Sundry Creditors.

10. Property Development Cost:

Property Development Cost includes Rs. 286.55 million (31-3-2008: Rs. 286.55 million) representing the cost of

acquisition of land from different land owners, for which the Company holds General Power of Attorney to deal with such

land including registration of the sale in the name of the Company.

11. Sundry debtors include Rs. 4.08 million (Previous Year Nil) debts due from directors of a subsidiary company and

maximum outstanding during the year is Rs. 4.08 million.

12. Cash and Bank Balances

a) Cash on hand includes Rs. 8.55 million (31.03.2008:Rs .0.80 million) held in foreign currency




Maximum Balance any time Bank Balance as at Balance as at during the year

31.03.2009 31.03.2008 2008-09 2007-08

In Current accountStandard Chartered Bank, Oman 5.68 149.59 1944.04 933.42Bank Muscat, Oman 10.79 23.25 1500.38 222.07SBI Oman 0.06 1.75 1.75 5.66SBI International (Mauritius) Limited- USD 7.68 0.07 127.66 0.54SBI International (Mauritius) Limited- Euro 0.05 0.02 0.87 0.30Oman Arab Bank 0.51 3.04 23.64 9.42Emirates Bank 20.58 10.52 674.57 828.44Barclays Bank PLC, Dubai 0.15 0.14 163.83 7.73Nepal SBI Ltd. 0.89 4.49 45.51 7.60Urban Co-operative Bank – 0.39 0.39 1.78Akola Urban Co-operative Bank 1.56 – 17.40 –HSBC Bank,Dubai 14.51 – 373.05 –First Gulf Bank,Dubai 72.16 – 372.75 –Standard Chartered Bank, Dubai 2.24 – 747.53 –Badr Al Islami 0.31 – 157.94Total 137.17 193.26 – –In Deposit account -Margin MoneyBank Muscat, Oman 54.56 4.06 54.56 4.06Total 54.56 4.06 – –

(Rs. in million)

13. Loans and Advances – Advances to Suppliers, Sub–contractors and others: Include Rs.459.67 million (31- 3-2008:Rs. 312.30 million) representing amounts withheld by contractees and Rs. 754.41 million (31-3-2008:Rs. 800.22 million)paid towards outright purchase of land and / or joint development. The acquisition proceedings of land includingregistration in favour of the Company are at various stages of completion. However, the Company is having custodyof title deeds and is in possession of land in many cases. In respect of Joint Developments, the Company is assessingthe present market scenario and accordingly execute the project/s at an appropriate time.

14. There are no dues payable to Micro, Small and Medium Enterprises exceeding the time limit specified in the Micro,Small and Medium Enterprises Development Act, 2006. The information regarding Micro, Small and MediumEnterprises has been compiled by the Company based on the information received from such parties.

15. Employee Benefits

i) Liability for retiring gratuity as on March 31, 2009 is Rs. 37.82 million (31-3-2008: Rs. 33.30 million) of which Rs. 10.98 million (31-3-2008: Rs. 5.91 million) is funded with the Life Insurance Corporation of India. The balanceof Rs. 22.32 million (31-3-2008: Rs. 27.39 million) is included in Provision for Gratuity. The Liability for Gratuity andCost of Compensated absences has been actuarially determined and provided for in the books.

b) Balance with banks in current account & deposit account includes balance with non-scheduled banks as follows:




a) Discount Rate:The discount rate is based on the prevailing market yields of Indian government securities as at the balancesheet date for the estimated term of the obligations.

b) Expected Rate of Return on Plan Assets:This is based on our expectation of the average long term rate of return expected on investments of the Fundduring the estimated term of the obligations.

c) Salary Escalation Rate: The estimates of future salary increases considered takes into account the inflation, seniority, promotion andother relevant factors.

I Net Assets/(Liability) recognised in the balance Sheet 2008-09 2007-08

Present value of Obligation 37.82 33.30Fair value of Plan Assets 10.98 5.91(Liability) / Assets (26.84) (27.39)Un-recognised Past Service Cost – –(Liability) / Assets recognised in the Balance Sheet (26.84) (27.39)Component of Employer’s ExpenseCurrent Service Cost 9.12 6.01Interest Cost 2.00 2.09Expected Return on Plan Assets – –Net Actuarial Gain / (Loss) recognised in the year (10.00) (6.49)Expenses Recognised in the Profit and Loss Account 1.12 1.61Movement in the Net Liability recognised in the Balance sheetOpening Net Liability 27.39 26.15Expenses Recognised in the Profit and Loss Account 1.12 1.61Payment made to employee on Retirement (1.67) (0.37)Closing Net Liability 26.84 27.39

ii) Details of the company’s post-retirement benefit plans for its employees including whole-time directors are givenbelow, which is certified by the actuary and relied upon by the auditors. (Rs. in million)

Opening Defined Benefit Obligation 27.39 26.15Current Service Cost 9.12 6.01Interest Cost 2.00 2.09Actuarial Losses / (Gain) (10.00) (6.49)Benefits Paid (1.67) (0.37)Closing Defined Benefit Obligation 26.84 27.39

II Change in Defined Benefit Obligation

Discount Rate (p.a) 6% 8%Expected Rate of Return on Assets (p.a) 9.25% 8%Salary Escalation Rate (p.a) 5% 10%Attrition Rate 20% 20%

III Financial assumptions at the valuation date

Note: Previous year figures have been regrouped and reclassified.

Category of Assets 31.03.2009 31.03.2008

Insurer Managed Funds –Life Insurance Corporation of of India 100% 100%Amount – Rs. in million 10.97 5.91

IV. Asset information



Note: In accordance with the payment of Gratuity Act, 1972 the company provides for gratuity covering eligibleemployees. The liability on account of gratuity is covered partially through a recognised Gratuity Fund managed by LifeInsurance Corporation of India and balance is provided on the basis of valuation of the liability by an independentactuary as at the year end. The management understands that LIC’s overall portfolio of assets is well diversified andas such, the long term return on the policy is expected to be higher than the rate of return on Central Governmentbonds.

iii) In respect of two subsidiary companies NCC Infrastructure Holdings Limited and NCC Urban InfrastructureHoldings Limited the liability for retiring gratuity as on March 31, 2009 is Rs.0.48 million (31-3-2008: Rs. 0.14million) and Rs. 2.13 million (31-3-2008: Rs. 1.69 million) respectively.

16. Deferred TaxDeferred Tax Liability as at March 31, 2009 comprises of the following:


17. Adjustment represents the difference in the net profit after tax between the management accounts and the auditedaccounts in respect of a JCE to the extent of Rs. 15.17 million relating to the previous year. Had this amount beenaccounted as current year expenditure the profit after tax would have been less by Rs. 15.17 million andcorrespondingly EPS (both basic and diluted) would have been Rs. 7.86 as against Rs. 7.92.

(Rs. in million)

31.03.2009 31.03.2008

(A) Deferred Tax Assets on timing differences due to:a) Provision for Gratuity and Leave Encashment 43.21 38.61b) Provision for Doubtful Debts/Advances 31.10 9.86c) Miscellaneous expenses to the extent not written off 0.09 0.03

Total 74.40 48.50(B) Deferred Tax Liabilities on timing difference due to:

a) Depreciation 267.93 217.57b) Reversal Deferred Tax Assets created on unabsorbed business loss 0.39 0.39c) Deferred Tax Liability on depreciation (opening balance) – 0.10

Total 268.32 218.06Net Deferred Tax Liability (A-B) 193.92 169.56Share of JCE 1.65 –Total Deferred Tax Liability* 195.57 169.56

*Includes Rs. 0.11 million (31.03.2008: Rs. 0.10 million) of deferred tax asset relating to NCC Infrastructure Holdings Limited.




18. Related Party Transactions

Following is the list of related parties and relationships:

S. No. Particulars S. No. Particulars

A) Subsidiaries D) Key Management Personnel

1) NCC International Convention Centre Limited 34) Sri AVS Raju

2) NCC Urban Lanka Private Limited 35) Sri AAV Ranga Raju

B) Jointly Controlled Entities / Joint Ventures 36) Sri NR Alluri

3) Brindavan Infrastructure Company Limited 37) Sri JV Ranga Raju

4) Western UP Tollway Limited 38) Sri AGK Raju

5) Bangalore Elevated Tollway Limited 39) Sri ASN Raju

6) Pondicherry Tindivanam Tollway Limited 40) Sri RN Raju

7) Premco – NCC 41) Sri AVN Raju

8) NCC – MAYTAS E) Relatives of Key Management Personnel

9) SDB – NCC – NEC 42) Smt. A.Neelavathi

10) NCC – PNC 43) Smt. A.Bharathi

11) NCC – SJRIPL 44) Smt.B.Kausalya

12) Himachal JV 45) Smt.A.Satyanarayanamma

13) NCC – KNR 46) Smt.J.Sridevi

14) NCC – NEC – Maytas 47) Smt. J. Sudha

15) NCC – VEE 48) Smt. M. Swetha

16) NCC – MSKEL 49) Miss. A. Deepthi

17) Maytas Infra Limited 50) Miss A. Nikita

18) Soma Enterprises Limited 51) Smt. J. Sowjanya

19) KMC Construction Limited 52) Sri. J. Krishna Chaitanya

20) Maytas-NCC-SSJV Consortium F) Enterprises owned or significantly

21) Gayatri Projects Limited influenced by key management

22) Gayatri Infra Ventures Limited personnel or their relatives

C) Associates 53) NCC Blue Water Products Limited

23) Nagarjuna Facilities Management Services LLC 54) Swetha Estates

24) Himalayan Green Energy Private Limited 55) R.R.V. Constructions Private Limited

25) Jubilee Hills Landmark Projects Limited 56) NCC Finance Limited

26) Varaprada Real Estates Private Limited 57) Swetha Capital Private Limited

27) Machilipatnam Port Limited 58) Sirisha Memorial Charitable Trust

28) Gulbarga Airport Developers Private Limited 59) Shyamala Agro Farms Private Limited

29) Shimoga Airport Developers Private Limited 60) Ranga Agri Impex Private Limited

30) Tellapur Technocity Private Limited 61) NCC Foundation

31) Tellapur Town Centre Private Limited 62) AVSR Holding Private Limited

32) Tellapur Tech Park Private Limited 63) Suryakumari Abraham Memorial Foundation

33) SSJV Projects Private Limited 64) NCC Urban Infrastructure Company

Limited - Dubai




Related Party transactions during the year ended March 31, 2009 are as follows:S.L. Particulars Subsidiaries Associates Jointly Key Enterprises No. Controlled Management owned or significantly

entities/ Personnel Influenced Joint and by Key Management

Ventures relatives Personnelor their Relatives

1) Share Application Money pending allotment – (453.24) – – –

– 769.27 14.93 – –

2) Investments 10.00 – – – –

– 171.88 19.76 – –

3) Loans granted – 25.65 – – –

– – 24.26 – (108.25)

4) Loan Repayment Received/ (Made) – 15.70 24.26 – (110.00)

– 286.33 – – –

5) Deposits Received – – – – 3.00

– – – – –

6) Advances granted / (received) 0.30 (1.71) – 1.00 28.11

– – 669.89 – 0.31

7) Share of Profit – – 143.64 – –

– – 35.44 – –

8) Works Contract Receipt – – 1944.95 – 524.86

– – 2220.36 – 275.09

9) Real Estate Sales – – – 15.28 –

– – – – –

10) Other Income – 26.04 78.15 – –

– 34.05 65.23 – –

11) Sub–Contract Jobs – – – – 309.78

– – – – 103.50

12) Remuneration – – – 194.70 –

– – – 160.80 –

13) Rent paid – – – 2.10 7.14

– – – 0.92 6.30

14) Interest paid – – – – 17.31

– – – – –

15) Reimbursement of Expenses – – – – 3.11

– – 6.92 – –

16) Management Fees – – 21.40 – –

– – 7.21 – –

17) Donations – – – – 3.91

– – – – –

(Rs. in million)




Related Party transactions during the year ended March 31, 2009 are as follows:S.L. Particulars Subsidiaries Associates Jointly Key Enterprises No. Controlled Management owned or significantly

entities/ Personnel Influenced Joint and by Key Management

Ventures relatives Personnelor their Relatives

18) Debit Balances outstanding as on 31.03.2009

Himalayan Green Energy Private Limited – 13.23 – – –

– 10.00 – – –

Brindavan Infrastructure Company Limited – – – – –

– – 24.26 – –

Jubilee Hills Landmark Projects Limited – 222.00 – – –

– 202.05 – – –

RRV Constructions – – – – 28.41

– – – – –

NCC Blue Water Products Limited – – – – 60.93

– – – – 60.27

NCC International Convention Centre Limited 0.30 – – – –

– – – – –

Pondicherry Tindivanam Tollway Limited – – 16.78 – –

– – – – –

Soma Enterprises Limited – – 2.47 – –

– – (29.63) – –

Maytas Infra Limited – – 29.76 – –

– – (26.82) – –

Key Management Personnel& their relatives – – – 27.09 –

– – – – –

NCC Urban Infrastructure Limited – Dubai – – – – 2305.56

– – – – 1392.78

19) Credit Balances outstanding as on 31.03.2009

KMC Construction Limited – – 105.43 – –

– – 155.69 – –

Western UP Tollway Limited – – 147.10 – –

– – – – –

Gayatri Projects Limited – – – – –

– – 6.97 – –

Nagarjuna Facilities Management Services LLC – 21.94 – – –

– 4.12 – – –

Key management Personnel & their relatives – – – 1.35 –

– – – 25.93 –

(Rs. in million)

Figures in italics represent previous year’s figures






Share Application Money pending allotment– Tellapur Technocity Private Limited (524.29) 619.21– Jubilee Hills Landmark Project Limited 71.05 –Investments– NCC International Convention Centre Limited 10.00 –– Jubilee Hills Landmark Project Limited – 61.33Loans granted– Jubilee Hills Landmark Project Limited 25.65 –Loan Repayment Received / (Made)– Brindavan Infrastructure Company Limited 24.26 –– Jubilee Hills Landmark Project Limited 5.70 286.33– Himalayan Green Energy Private Limited 10.00 –– AVSR Holding Private Limited (110.00) –Advances granted / (received)– KMC Construction Limited – 260.39Deposits Received– NCC Finance Limited 3.00 –Advances granted / (Received)– RRV Constructions Private Limited 29.11 –– NCC Foundation (0.31) –– Himalayan Green Energy Private Limited 1.26 –– Machilipatnam Port Limited (2.97) –Share of Profit – MAYTAS–NCC JV 39.49 –– SDB-NCC-NEC JV – 10.29– NG-NCC JV 70.34 –– NCC-VEE JV 19.45 17.94– NCC-MSKEL – 5.38Work Contract Receipt– Brindavan Infrastructure Company Limited 199.03 –– Bangalore Elevated Tollway Limited 530.75 823.81– Western UP Tollway Limited 549.26 255.96– Pondicherry Tindivanam Tollway Limited 665.91 –– NCC Urban Infrastructure Limited – Dubai 524.86 275.09Other Income– NG-NCC JV 73.67 –– Jubilee Hills Landmark Project Limited – 33.14Sub Contract Bills– RRV Constructions Private Limited 309.78 103.50Rent paid/ (Received)– Swetha Estates 5.47 4.78– Shyamala Agro Farms Private Limited 1.45 1.32– Smt. Sowjanya 1.18 –– Mr. A.G.K. Raju 0.48 –Interest Paid– AVSR Holding Private Limited 17.14 –

(Rs. in million)




19. Segmental ReportingThe Company’s operations predominantly consist of construction / project activities. Hence there are no reportablesegments under Accounting Standard – 17. During the year under report, substantial part of the Company’s businesshas been carried out in India. The conditions prevailing in India being uniform, no separate geographical disclosuresare considered necessary. The Company’s operations outside India do not qualify as reportable segments as theoperations are not material.

Sl. No. Particulars 31.03.2009 31.03.2008

a) Net Profit after tax 1850.26 1688.64Minority Interest (11.57) (2.56)Profit from Associate Companies (25.28) (11.30)

b) Profit after tax attributable to Equity Shareholders 1813.41 1674.78Nos. Nos.

c) Weighted Average number of equity shares for Basic EPS 228844116 218568626Add: Adjustment for outstanding options and warrants 5691 152694

d) Weighted Average number of equity shares for Diluted EPS 228849807 218721320e) Face value per share Rs. 2 Rs.2f) Basic EPS Rs. 7.92 Rs.7.77g) Diluted EPS Rs. 7.92 Rs.7.68

20. Earning Per Share(Rs. in million)


Salaries 106.69 57.12Perquisites 9.39 3.66Commission 69.84 91.66Sub-total 185.92 152.44Sitting Fee 0.73 0.48Contribution to Provident Fund & Superannuation Fund 8.78 8.35Total 195.43 161.27

21. Managerial Remuneration: Remuneration to Chairman, Managing Director, Executive Director, Whole-time Directors and Non-Executive Directors.

(Rs. in million)


M. V. Srinivasa Murthy R.S. Raju A.A.V.Ranga Raju A. G. K. Raju

Company Secretary & VP (Legal) Vice President (F&A) Managing Director Executive Director

Note: The above figures does not include provision for gratuity and compensated absences liability actuarially valued as separate figures arenot available.

* No share warrants during the year

22. Figures of previous year have been regrouped / rearranged / reclassified wherever necessary to conform to the currentyear presentation.


NOTES

Insidethe report…

Disclaimer In this Annual Report we have disclosed forward-looking

information to enable investors to comprehend our prospects

and take informed investment decisions. This report and

other statements – written and oral – that we periodically

make contain forward-looking statements that set out

anticipated results based on the management’s plans and

assumptions. We have tried wherever possible to identify

such statements by using words such as ‘anticipates’,

‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’

and words of similar substance in connection with any

discussion of future performance.

We cannot guarantee that these forward-looking statements

will be realised, although we believe we have been prudent

in assumptions. The achievement of results is subject to

risks, uncertainties and even inaccurate assumptions.

Should known or unknown risks or uncertainties materialise,

or should underlying assumptions prove inaccurate, actual

results could vary materially from those anticipated,

estimated or projected.

We undertake no obligation to publicly update any forward-

looking statements, whether as a result of new information,

future events or otherwise.Corporate Information 1Corporate Ethos 4From strength to strength 6From the desk of Chairman Emeritus 8Strength in our numbers 10Q&A with the Managing Director 18Business segment review 22Directors’ Report 38Management Discussion 48and Analysis

Corporate Governance Report 57Standalone Financial Statements


Balance Sheet Abstract 106Consolidated Financial Statements


A PRODUCT

[email protected]

www.kalajyothi.com

Regional OfficesAhmedabad

211-212, Sarthik – II

Opp. Rajpath Club

Sarkhej Gandhi Nagar Highway

Ahmedabad- 380 054

Tel.: 91-079-26871478/79


Bangalore301 Batavia Chambers,

8 Kumara Krupa Road,

Kumara Park East,

Bangalore – 560 001

Tel.: 91-80-22258991


BhopalPlot No-25, Deepak Housing Society

Kolar Road , Chuna Bhatti,

Bhopal – 462 016

Tel.: 91-0755-2428784


Bhubaneswar3rd Floor

98, Keshari Complex

Kharavela Nagar,

Bhubaneswar - 751001

Tel.: 0674-2393059


ChennaiNo.190 A, 7th & 8th Floors,

Pettukola Towers,

Poonamalle High Road,

Kilpauk, Chennai – 600 010

Tel.: 91-44-25323030


Delhi9th Floor, JMD Regent Square,

DLF Qutub Enclave Phase - II,

Mehrauli-Gurgaon Road,

Gurgaon – 122 022, Haryana

Tel.: 91-124-2357 493/494/59


KolkataB-F-10, Sector-1, Salt Lake,

Kolkata – 700 064

Tel.: 91-33-23348213


KochiG-183, Panampally Nagar,

Kochi – 682 036 , Kerala

Tel.: 91-0484-2324721


LucknowA 3/171, Vishal Khand,

Gomthi Nagar,

Lucknow – 226 010

Tel.: 91-0522-2394418


MumbaiB-402 Dipti Classic

Off. M. V. Road, Suren Lane,

Andheri (E), Mumbai – 400 093

Tel.: 91-022-26826790 Ext.110


Ranchi351-A, Road No.5

Ashok Nagar, Ranchi – 834 002

Tel.: 91-0651–2241818


Overseas OfficesDubai

Nagarjuna Contracting Company LLC

Al-Attar Tower Sheikh Zayad Road

Post No-117333

Dubai-(UAE)

Tel.: 00971-4-3250052

MuscatNagarjuna Construction Company

International LLC

P O Box 3678, PC 112

RUWI, Sultanate of Oman

Tel.: 0096824600329

As simple as A, B, C, D!

Annual Report 2008-09Nagarjuna Construction Company Limited

An ISO-9001-2000 Companywww.ncclimited.com