Ansal Housing & Construction Ltd.
|BSE: 507828||Sector: Infrastructure|
|NSE: ANSALHSG||ISIN Code: INE880B01015|
|BSE 00:00 | 25 May||16.10||
|NSE 00:00 | 25 May||16.15||
|Mkt Cap.(Rs cr)||96|
|Mkt Cap.(Rs cr)||95.62|
Ansal Housing & Construction Ltd. (ANSALHSG) - Director Report
Company director report
The Directors of your Company have immense pleasure in presenting the 33rdBoard Report on the Company's business and operations together with the Audited Statementof Accounts for the Financial Year ended 31st March 2017. Consolidatedperformance of the Company and its subsidiaries has been referred to wherever required.
FINANCIAL RESULTS AND APPROPRIATIONS
In compliance with the provisions of Companies Act 2013 and SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 (Listing Regulations) the Company hasprepared its standalone and consolidated statements as per Indian Generally AcceptedAccounting Principles (IGAAP) for the FY 2016-2017. Your company's performance onstandalone basis during the year as compared with that of during the previous year issummarised as under:
(Figures in Rs. Lacs)
During the financial year 2016-17 the net revenue from operations for the standaloneentity decreased to Rs. 291.21 crores from Rs. 467.09 crores in the previous year showinga decline of around 37.65%. In line with decrease in revenues the operating profit beforeinterest tax depreciation and amortization (EBITDA) decreased from Rs. 88.37 crores toRs. 64.35 crores and there was a loss after tax of Rs. 5.49 crores for the year underreview as against a profit after tax of Rs. 15.00 crores for the last financial year. Thedecrease in the revenue and profits is due to general recession in the real estate sectorduring the financial year 2016-17. In line with the above the consolidated revenue fromoperations stood at Rs. 333.41 crores during the financial year 2016-17 against revenue ofRs. 503.79 crores in the previous year showing a downturn of 33.82%. Net loss afterminority interest for the group for the financial year 2016-17 was Rs. 2.57 crores againstthe net profit of Rs. 12.88 crores in the previous year.
TRANSFER TO RESERVES Considering the losses incurred during the financial year 2016-17the Company does not propose to transfer any amount to the General Reserve.
Based on Company's performance during the year the Directors do not propose payment ofany dividend for the financial year 2016-17.
Reflecting the downward trends of the overall economy the year 2016-17 has not been anencouraging and favourable year for the real estate sector. Scheme of Demonetisation ofGovernment has aggravated to this situation After this move transactions in real estatehave virtually dried up particularly in the land and capital raising business.Residential and Commercial sales' enquiries have witnessed a drop and prices in realestate markets are softening leading to over inventory of finished units. Considering thelow demand the Company has moderating the construction activities in some of the projectsand has not launched any new projects during the year under review.
The Company is currently developing/ building various projects at Gurugram MeerutAgra Alwar Ajmer Indore Karnal Yamunanagar Jhansi Jammu Muzaffarnagar RewariShahpur and Ghaziabad. Construction at all locations is progressing as per schedule andpossession of ready units in various projects shall be handed over to the customers as perthe agreed time schedule.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the periodunder review.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 125 of the Companies Act 2013 the relevantamount against the Final dividend for the Financial Year 2009-10 remaining unpaid orunclaimed for a period of seven years shall be transferred by the Company to the InvestorEducation and Protection Fund (IEPF) administered by the Central Government by 3rdday of November 2017. Members who have not yet encashed their dividend warrant(s)pertaining to the final dividend for the financial year 2009-10 are requested to lodgetheir claims with the company on or before 3rd day of November 2017 otherwisethe Company would have no other option but to transfer this amount to the IEPF by 3rdday of November 2017 which is the last date for transfer of the said amount. Noclaim shall lie further against the Company for the amounts so transferred.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed dividends lying with the Companyas on 31st March 2017 on the website of the Company (
The Company had been inviting/accepting and renewing deposits from the public and itsshareholders for past many years in accordance with the provisions of the Companies Act1956/2013 read with the Companies (Acceptance of Deposits) Rules 1975/2014. However theCompany stopped accepting/renewing public deposits with effect from 1st April2016 in view of nonavailability of deposit insurance which was a mandatory condition foracceptance/ renewal of deposits. The Company owed a principal amount of Rs. 99.50 crorestowards the public depositors when it stopped taking/renewing further deposits on 1stApril 2016.
Due to prolonged extreme and severe overall recession in the real estate sector sincefinancial year 2013-14 it (the sector) has become virtually deserted. As a result theturnover of the Company had been badly affected leading to repercussions on a much widerscale making it difficult for the Company to refund the whole amount of Rs. 99.50 croresat once after the closure of the fixed deposit scheme. In view of the above the Companyin the month of July 2016 had approached the Hon'ble National Company Law Tribunal (NCLT)New Delhi seeking its approval to repay public deposits in instalments. Vide its Orderdated 3rd October 2016 the NCLT had accepted and approved in principle therepayment proposal of the company for extension of time in respect of repayment of matureddeposits in a phased manner over a period of 24 months from the due date in view of thepast track record of the Company subject to quarterly review of the scheme. Thereafterquarterly review of the fixed deposit scheme has been done by Hon'ble NCLT in the month ofFebruary 2017 and April 2017 and the Company has been refunding the public deposits inaccordance with the orders of the Hon'ble NCLT.
The details relating to the deposits as required by Rule 8(5)(v) of the Companies(Accounts) Rules 2014 are given below:
* Upon an application filed by the Company the Hon'ble NCLT New Delhi vide its Orderdated 10th April 2017 had allowed time till 30th June 2017 forpayment of this amount.
During the year the Company has cancelled 172976 equity shares of Rs. 10 each whichwere forfeited way back in June 2005. As a result an amount of Rs. 931880 standing onaccount of Forfeited Shares has been transferred to the Capital Reserve of the Company.Consequently the issued subscribed and paid-up equity share capital of the Company as on31st March 2017 stood at Rs. 5938.58 lakhs.
SERVICE OF DOCUMENTS THROUGH ELECTRONIC MODE
In furtherance of the Green Initiative in Corporate Governance announced by theMinistry of Corporate Affairs the Company had in past requested the shareholders toregister their email addresses with the Registrar/Company for receiving the reportaccounts and notices etc. in electronic mode. However some of the shareholders have notyet registered their e-mail IDs with the Company. Shareholders who have not registeredtheir email addresses are once again requested to register the same with the Company bysending their requests to email@example.com .
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
As on 31st March 2017 your Company had 20 Subsidiaries and 1 Associate Companydetails whereof are set out at appropriate place in the Annual Report. No Company hasbecome or ceased to be a Subsidiary Joint Venture or Associate Company of your Companyduring the year under review.
Pursuant to provisions of section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company. In accordance with third proviso toSection 136(1) of the Companies Act 2013 the Annual Report of your Company containinginter alia the audited standalone and consolidated financial statements has been placedon the website of the Company at www.ansals.com . Further audited financialstatements together with related information and other reports of each of the subsidiarycompanies have also been
placed on the website of the Company at www.ansals.com .
Further highlights of performance of subsidiaries associates and joint venturecompanies and their contribution to the overall performance of the Company can be refferedin Form AOC-I as well as Consolidated Financial Statements which form part of this annualreport.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with other regulations of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented hereunder which forms part of theAnnual Report.
Industry Structure and Developments
The real estate sector has been witnessing a paradigm shift during the recent yearsthrough steady transformations to become a structured sector from an unorganized sector.It has a huge multiplier effect on the economy and therefore is a big driver of economicgrowth. It is the second-largest employment-generating sector after agriculture and isslated to grow at 30 per cent over the next decade. The Indian real estate market isexpected to touch US$ 180 billion by 2020. The Housing Sector alone contributes 5-6% toIndia's Gross Domestic Product (GDP). Not only does it generate a high level of directemployment but it also stimulates the demand in over 250 ancillary industries such ascement steel paint brick building materials consumer durables and so on.
The real estate sector comprises four sub sectors - housing retail hospitality andcommercial. The growth of this sector is well complemented by the growth of the corporateenvironment and the demand for office space as well as urban and semi-urbanaccommodations. The construction industry ranks third among the 14 major sectors in termsof direct indirect and induced effects in all sectors of the economy.
The government is focused on working to deliver on its promise of "Housing forAll" by 2022. The Real Estate (Regulation and Development) Act 2016 is a landmarkreform for the real estate sector which has the potential to address long standing issueswhich have plagued the growth of the sector. Further policy announcements and reforms torevive the real estate space including the relaxation of Foreign Direct Investment (FDI)norms enhanced focus on the "Make in India" initiative and creation of smartcities direct and indirect tax benefits for affordable housing projects Real EstateInvestment Trusts (REITs) etc. have helped in generating a positive outlook for the realestate market.
The Road ahead
Responding to an increasingly well- informed consumer base and bearing in mind theaspect of globalisation Indian real estate developers have shifted gears and acceptedfresh challenges. The most marked change has been the shift from family owned businessesto that of professionally managed ones. Real estate developers in meeting the growingneed for managing multiple projects across cities are also investing in centralisedprocesses to source material and organise manpower and hiring qualified professionals inareas like project management architecture and engineering.
India has huge potential to attract large foreign investments into real estate. Withreal estate reaching a point of saturation in developed countries and the demand andprices falling global real estate players are looking at emerging economies such as Indiafor tapping opportunities in real estate. Indian real estate will stay attractive due toits strong economic fundamentals and demographic factors. Moreover there is a high levelof global uncertainty looming over the developed and developing nations of the world.While developed economies are still struggling to regain their growth momentum developingcountries including India and China are expected to grow at a reasonably high rate.Investments in Indian real estate will fetch higher returns for investors as compared toother global markets. In the coming years the opportunities in the real estate sectorwill attract more global players to India and hence will help the industry to maturebecome more transparent improve management and adopt advanced construction techniques.
Opportunities and threats
With the passing of the Real Estate (Regulation & Development) Act 2016 and otherinitiatives taken by the Government such as recent Union Budget 2017 has proposed severalpositive measures to strengthen the edifice of the Indian real estate sector. For instancethe facilitation of capital gains taxation norms has triggered a wave of happiness inrealtors and property buyers alike. Below are some of the major Government Initiatives:
The Ministry of Housing and Urban Poverty Alleviation has sanctioned theconstruction of84460 more affordable houses for urban poor in five states namely WestBengal Jharkhand Punjab Kerala and Manipur under the Pradhan Mantri Awas Yojana (Urban)scheme with a total investment of Rs. 3073 crore (US$ 460 million).
The Cabinet Committee on Economic Affairs (CCEA) has approved various measuresto revive the construction sector putting in place a mechanism to release funds stuck inarbitration awards to revive stalled projects.
The Securities and Exchange Board of India (SEBI) has proposed easierregulations for real estate investment trusts (REITs) such as raising the cap ofinvestment of REITs' assets in underconstruction projects from 10 per cent to 20 per centin order to attract the interest of developers and also plans to relax the rules forforeign fund managers to relocate to India.
SEBI has allowed Foreign Portfolio Investors (FPIs) to invest in units of RealEstate Investment Trusts (REITs) Infrastructure Investment Trusts (InvITs) and categoryIII Alternative Investment Funds (AIFs) and also permitted them to acquire corporate bondsunder default.
The Real Estate (Regulation and Development) Act 2016 has been implementedwhich aims to protect consumer interest ensure efficiency in all property relatedtransactions improve accountability of real estate developers increase transparency andattract more investments into the realty sector in India.
India's Prime Minister Mr. Narendra Modi approved the launch of Housing for Allby 2022. Under the Sardar Patel Urban Housing Mission 30 million houses will be built inIndia by 2022 mostly for the economically weaker sections and low-income groups throughpublic-private-partnership (PPP) and interest subsidy.
The Securities and Exchange Board of India (SEBI) has notified final regulationsthat will govern real estate investment trusts (REITs) and infrastructure investmenttrusts (InvITs). This move will enable easier access to funds for cash-strapped developersand create a new investment avenue for institutions and high net worth individuals andeventually ordinary investors.
The Company strongly believes that the Real Estate Sector is bound to improve in longterm. Your Company has managed well even during turbulent times due to its inherentstrengths like a well-accepted brand well-designed projects and trust among memberscreditors and other financial institutions. Your Company is hopeful that the Real EstateSector will improve in near future and the Company is looking forward to grab newopportunities by launching new projects particularly through collaboration route andensure timely delivery of existing projects.
The recent past has been a little gloomy with unstable government policies ofdemonetization indecisiveness and inconsistencies in issues related to tax and otherinvolved arenas. Such situations tend to hamper the overall business landscape leading tosluggish growth directly impacting the real estate sector. In the current recessionarytimes the foremost challenge is to augment the sales and multiply the collections of thereadily available stock and projects under development. Consequently effectuating yourCompany to meet its financial commitments towards suppliers contractors governmentlenders and employees.
Review of Operations
1. Development Business & Retailing
Your Company's development business primarily focuses on the development and sale ofresidential real estate which include plotted developments houses villas and apartmentsof varying sizes and integrated townships with the focus on the high end luxuryresidential developments. The Development business also consists of certain commercial andshopping complexes including those that are integral to the residential developments theyare in vicinity of. Development business consists of three segments:
The Residential segment continues to strive for equilibrium amidst tepid response fromthe market and the changing landscape of the Sector. The residential segment has been incorrective phase which now seems to be headed towards a more stable position. Growingeconomy rapid urbanisation and enhanced policy support and lowering interest rates aresuggesting signs of recovery for the segment. Initiatives taken by the current regimewhich include the smart cities Housing for All Affordable Housing Scheme will providethe required stimulus to the residential segment. Developers have been focussing onproject completions instilling confidence in buyers.
Commercial Segment Commercial Segment has consolidated growth trajectory owingto improved business sentiments and rising growth prospects in the IT/ ITES sectorattributed to improving macro-economic dynamics and corporate expansion. The marketsentiments were further bolstered by key announcements such as removal of DividendDistribution tax for REITs paving way for appetite and willingness both from a developerand an investor perspective.
The retail segment in the country is witnessing an enormous transformation and isundergoing structural changes. The retail landscape has been growing to a more structuredsector owing to the evolving consumer spending patterns and increasing disposable incomelevels. Delhi NCR is a leading retail destination in India an area where your company hassignificant presence. The area is one of the largest population base in the country withmajority of the population is well travelled and well versed with all the brands. There isan emerging trend in the National Capital Region (NCR) of malls being perceived asentertainment destinations. Being located in proximity to prominent cities of Punjab andHaryana allows retailers to cater to a wider population. The presence of mall clusterstend to attract high footfalls as they allow consumers to access to a larger set of brandsas compared to visiting standalone development.
2. Hospitality Operations
The Hospitality Division (Restaurants only) engages 28 employees who are performingadmirably well exhibiting a turnover of Rs. 3.46 crores yielding adequate profits in thefinancial year 2016-17. Among the big names the Division has the Brand "The GreatKabab Factory" which has been franchised from U Mac Hospitality Pvt. Ltd.
Real Estate of India has seen many ups and downs since 2004-05. Now waves of changesare flowing more appreciably. The government has taken various steps to ensure that anatmosphere of growth and development is created for real estate sector. These includereduction in interest rates interest subsidy to home buyers increased loan portfoliosincreased and eased FDI in real estate & construction sector implementation andintroduction of real estate regulatory authority and GST Act etc. With sufficient boostfrom the government the realty market is expected to see gleaming days in coming future.
People looking for buying homes should take the benefit of the present scenario andinvest in properties as prices are stable at this point of time and interest rates arealso less. FDI norms will attract cash inflows which will be supportive for us as well asthe entire sector. We are hoping that Union Budget 2017 will bring big bang reforms tospur economic development. I mplementation of GST Act would boost transparency anduniformity in real estate sector it would also reduce the burden on taxpayersconsiderably. Western UP Region has been developing day by day and regions like NoidaGreater Noida Raj Nagar Extension & Greater Noida West have witnessed unsurpassedgrowth in past few years.
Internal Control systems and their adequacy
The Company has in place adequate internal control systems and procedures commensuratewith the size and nature of business. These procedures are designed to ensure that:
Effective & Adequate internal control environment is maintained across theCompany.
All assets and resources are acquired economically used efficiently and areadequately protected.
Significant financial managerial and operating information is accuratereliable and is provided timely; and
All internal policies and statutory guidelines are complied with.
The effective implementation and independent monitoring of internal controls andprocesses is done by the Internal Audit. The Audit Committee of the Board reviews theInternal Audit findings and provides guidance on internal controls. It ensures thatInternal Audit recommendations are effectively implemented. The Audit Committee of theCompany met four times during the Financial Year 2016-17. It reviewed inter-alia theadequacy and effectiveness of the Internal Control Systems and monitored implementation ofInternal Audit recommendations and overlooked other financial disclosures. During the yearunder review no material or serious observation has been received from the InternalAuditors of the Company for inefficiency or inadequacy of such controls.
Outlook on Risks and Concerns
The management of the company anticipates the major risks pertaining to the industry inwhich it operates such as economic regulatory taxation and environmental risks and alsothe investment outlook towards Indian Real estate sector. Some of the risks that may arisein normal course of its business and impact its potential for future developmentsinter-alia include liquidity risk counter-party risk commodity risk credit riskInflation risk and market risk etc.
The Company has broad based and strong in-house Legal Department to take care of Legaland Regulatory Risks. The requisite insurance covers are also taken by the Company forcovering the disasters etc. The Audit Committee and the Board of Directors of the Companyhave been implementing robust risk management policies and guidelines that set-out thetolerance for risk and your company's general risk management philosophy. Accordinglyyour Company has established a framework and process to monitor the exposures to implementappropriate measures in timely and effective manner. The same is constantly reviewed forimprovement.
Company's Human Resource pool is a key engine for its business and growth. Our focuscontinues to leverage and nurture our key talent working closely with our outsourcedpartners in various area of our operations and ensuring optimum utilization of manpoweraligned with our business strategy. The company conducts consultations dialoguesdeliberations negotiations and meetings in a congenial environment and arrives atamicable solutions to issues that crop from time to time. Our Reward & Recognition/incentive programme continues to strive to build culture of meritocracy and strengthenalignment of performance and reward.
As on 31st March 2017 the Company's "on rolls" talent pool comprised about467 employees.
Statements in this Management Discussion and Analysis contain certain forward lookingstatements within the meaning of applicable laws and regulations. Actual results maydiffer substantially or materially from those expressed or implied. Important developmentsthat could affect the Company's operations include a downward trend in the real estatedevelopment industry rise in input costs and significant changes in political andeconomic environment environment standards tax laws litigation and labour relationsetc. The shareholders and readers are cautioned that in the case of data and informationexternal to the company no representation is made on its accuracy or comprehensivenessthough the same are based on sources thought to be reliable.
AWARD OF ISO 9001: 2008
Your Company continues to enjoy the privilege of ISO 9001:2008 Certification granted toit on 16th April 2005 through well-known certification agency "DET NORSKEVERITAS". It will be the constant endeavour of the management to continuously stresson systems/quality for ultimate delivery of its products.
DECLARATION BY INDEPENDENT DIRECTORS
In the first Board Meeting held for the Financial Year 2016-17 all the IndependentDirectors of the Company furnished to the Company a declaration to the effect that theymeet the criteria of independence as provided in Sub-section 6 of Section 149 of CompaniesAct 2013 read with Schedule IV thereof.
POLICIES OF THE BOARD OF DIRECTORS/ COMPANY
I. Nomination and Remuneration Policy
The Company's policy on directors' appointment and remuneration is as under:-
Appointment criteria and qualifications:
a) The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his/her appointment.
b) A person should possess adequate qualification expertise and experience for theposition he/she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person issufficient/satisfactory for the concerned position.
c) The Company shall not appoint or continue the employment of any person as theManaging Director/Whole-time Director who has attained the age of seventy years. Providedthat the term of the person holding this position may be extended beyond the age ofseventy years with the approval of shareholders by passing a special resolution based onthe explanatory statement annexed to the notice for such motion indicating thejustification for extension of appointment beyond seventy years.
Remuneration to Whole-time/ Executive/Managing Director KMP and Senior ManagementPersonnel:
a) Fixed pay:
The Managing Director Wholetime Director KMP and Senior Management Personnel shall beeligible for a monthly remuneration as may be approved by the Board on the recommendationof the Nomination & Remuneration Committee. The breakup of the pay scale and quantumof perquisites including employer's contribution to provident fund pension schememedical expenses club fees etc. shall be decided and approved by the Board/ the personauthorized by the Board on the recommendation of the Committee and approved by theshareholders and Central Government wherever required.
b) Minimum Remuneration:
If in any Financial Year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing Director/Whole- time Director inaccordance with the provisions of Schedule V of the Companies Act 2013 and if it is notable to comply with such provisions with the previous approval of the Central Government.
c) Provisions for excess remuneration:
If any Managing Director/Whole- time Director draws or receives directly or indirectlyby way of remuneration any such sums in excess of the limits prescribed under the Act orwithout the prior sanction of the Central Government where required he/she shall refundsuch sums to the Company and until such sum is refunded hold it in trust for the Company.The Company shall not waive recovery of such sum refundable to it unless permitted by theCentral Government.
Remuneration to Non- Executive/
a) Remuneration/Commission: The remuneration/commission shall be fixed as per the slabsand conditions mentioned in the Articles of Association of the Company and the CompaniesAct 2013.
b) Sitting Fees:
The Non-Executive/Independ- ent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof provided that the amount of such feesshall not exceed Rs. 40000 per meeting of the Board or Committee or such amount as may beapproved by the board within the limits prescribed by the Central Government from time totime.
Commission may be paid within the monetary limit approved by shareholders subject tothe limit not exceeding 1% of the profits of the Company computed as per the applicableprovisions of the Companies Act 2013.
d) Stock Options:
An Independent Director shall not be entitled to any stock option of the Company.
II. Corporate Social Responsibility Policy
The details about the policy developed and implemented by the Company on CorporateSocial Responsibility and initiatives taken during the year 2016-17 are given in the"Annexure-I" forming part of this report as specified under the Companies(Corporate Social Responsibility Policy) Rules 2014. The Policy has been disclosed on thewebsite of the Company.
III. Statement concerning Development and Implementation of Risk Management Policy
The Company has its Risk Management Policy which is reviewed by the Board of Directorsof the Company and the Audit Committee of Directors from time to time so that managementcontrols the risk through a structured network. Head of Departments are responsible forimplementation of the risk management system as may be applicable to their respectiveareas of functioning and report to the Board and the Audit Committee about the events ofmaterial significance.
The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. In order to achieve the key objectives the policyestablishes a structured and methodical approach to risk management in order to guidedecisions on risk related issues.
In today's turbulent and competitive environment strategies for mitigating inherentrisks are imperative for triggering the growth graph of the Company. The common risksinter alia are: Hazard risk Regulatory risks Competition risk Business risk TechnologyObsolescence Investments Retention of talent and Expansion of facilities etc. Businessrisk inter-alia further includes financial risk political risk fidelity risk and legalrisk etc.
As a matter of policy these risks are assessed and appropriate steps are taken toallay the same so that the element of risk threatening the Company's existence is veryminimal.
IV. Whistle Blower Policy and Vigil Mechanism
Your Company being a Listed Company has established a Vigil (Whistle Blower) Mechanismand formulated policy to enable director/s or stakeholders including individual employeesand their representative bodies to freely communicate their concerns about illegal orunethical practices actual or suspected fraud or violation of the Code of Conduct orPolicy for the time being in force. The Whistle Blower Policy of the Company is availableon the Company's Website.
V. Related Party Transactions Policy
In accordance with the provisions of the Companies Act 2013 and Clause 49 of theerstwhile Listing Agreement the Company has framed a Related Party Transactions (RPT)Policy to ensure due and timely identification approval disclosure and reporting oftransactions between the Company and its Related Parties. The RPT Policy is also incompliance with the SEBI (Listing Obligations & Disclosure Requirements) Regulations2015. All Related Party Transactions are approved by the Audit Committee prior to enteringinto the transactions. Related Party Transactions of repetitive nature are approved by theAudit Committee on omnibus basis for one financial year at a time. All omnibus approvalsare reviewed by the Audit Committee on a quarterly basis. The Policy has been disclosed onthe website of the Company link for which is http://www.ansals .com/pdfs/policy-on-related-party- transaction.pdf.
VI. Financial Control Policy
The Company has a well-defined Financial Controls Policy which has been framed keepingin view the provisions of the Companies Act 2013 and the Listing Regulations. Theobjective of the Policy is to ensure the orderly and efficient conduct of business of theCompany including adherence to the Company's policies safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. ThePolicy has been disclosed on the website of the Company.
VII. Policy on Diversity of Board
Your Company believes that a diverse Board will enhance the quality of the decisionsmade by the Board by utilizing the different skills qualification professionalexperience and knowledge etc. of the members of the Board which is inevitable forachieving sustainable and balanced development. Keeping this in view the Company hasframed a "Policy on Board Diversity" in accordance with provisions of theCompanies Act 2013 and Listing Regulations. The Policy on Board Diversity shall help theNomination & Remuneration Committee of the Company while considering and recommendingappointment of persons on the Board of Directors of the Company.
VIII Policy on prevention of Sexual Harassment of women at workplace
The company has adopted the guidelines and procedures of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 to evolve a permanentmechanism for the prevention and redressal of sexual harassment cases and other acts ofviolence in the organisation and to create and maintain a sensitive and congenialdemocratic working environment in which every woman can work in a community free ofviolence harassment exploitation intimidation and stress.
COMMITTEES OF BOARD NUMBER OF MEETINGS OF THE BOARD AND BOARD COMMITTEES
The Board of Directors met six times during the financial year under review for whichnotices were served in accordance with Section 173(3) of the Companies Act 2013 at theiraddresses registered with the Company by the permitted mode of delivery. As on 31stMarch 2017 the Board had five committees namely the Audit Committee the CorporateSocial Responsibility ('CSR') Committee the Stakeholders' Relationship CommitteeCommittee of Directors and Nomination and Remuneration Committee. A detailed note oncomposition of the board committees meetings attendance thereat is provided in theCorporate Governance Report which forms part of the Annual Report.
AUDITORS AND AUDITORS' REPORT Statutory Auditors
Term of M/s. Khanna & Annadhanam Chartered Accountants who were appointed asStatutory Auditors of the Company for Financial Year 2016-17 would expire at theconclusion of forthcoming Annual General Meeting of the Company. The Company wishes toappoint M/s. Dewan P.N. Chopra & Co. Chartered Accountants as new Statutory Auditorsof the Company for five consecutive years starting with the financial year 2017-18 whohave consented and offered themselves for appointment as statutory auditors. Certificatedated 24th May 2017 has been received from the auditors to the effect thattheir appointment if made would be within the limits prescribed under section 141(3)(g)of the Companies Act 2013 and they are not disqualified for appointment and also thatthere is no proceeding pending against them or any of their partners with respect toprofessional matters of conduct. The Board recommends the same for approval byshareholders at the ensuing Annual General Meeting.
Comments of the outgoing Auditors viz. M/s. Khanna & Annadhanam in their report andthe notes forming part of the Accounts are self-explanatory and need no comments. TheBoard has duly examined the Statutory Auditors' Report to the accounts which isself-explanatory. Clarifications wherever necessary have been included in the Notes toAccounts section of the Annual Report. Further since no fraud has been reported by theAuditors under sub-section (12) of section 143 of the Companies Act 2013 no details arerequired to be given in the Directors' Report as required by Section 134(3)(ca) of theCompanies Act 2013.
M/s. Chandra Wadhwa & Co. Cost Accountants were appointed as the Cost Auditorsfor the financial year 2016-17 to conduct cost audit of the accounts maintained by theCompany in respect of the various projects prescribed under the applicable Cost AuditRules. The Cost Audit Report given by the Cost Auditors for the financial year 2016-17shall be filed as per the requirements of applicable laws. In accordance with theprovisions of Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 since the remuneration payable to the cost Auditors is required tobe ratified by the shareholders the Board recommends the same for the financial year2017-18 for approval by shareholders at the ensuing Annual General Meeting.
Secretarial A uditors
CS Vivek Arora Practicing Company Secretaries were appointed as the SecretarialAuditors of the Company for the Financial Year 2016-17 pursuant to Section 204 of theCompanies Act 2013. The Secretarial Audit Report submitted by them in the prescribed formMR-3 is attached as "Annexure-II" and forms part of this report. The SecretarialAudit Report is self-explanatory.
OTHER STATUTORY DISCLOSURES
Extracts of the Annual Return
In terms of provisions of Section 92 and 134(3)(a) of the Companies Act 2013 read withRule 12 of the Companies (Management and Administration) Rules 2014 the extracts ofAnnual Return of the Company in Form MGT-9 is annexed as "Annexure-III" to thisReport forming part hereof.
Particulars of Loans Guarantees or Investments under Section 186
Pursuant to section 186 of the Companies
Act 2013 and Schedule V of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the disclosure on particularsrelating to loans advances guarantees and investments made by the Company during theyear under review are provided hereunder:
Particulars of Contracts or Arrangements with Related Parties
As a part of its philosophy of adhering to highest ethical standards transparency andaccountability your Company has historically adopted the practice of undertaking relatedparty transactions only in the ordinary and normal course of business and at arm's length.In line with the provisions of the Companies Act 2013 and the Listing Regulations theBoard has approved a policy on related party transactions. The said policy on relatedparty transactions has been placed on the Company's Website. All Related PartyTransactions are placed on a quarterly basis before the Audit Committee for approval. Theparticulars of contracts or arrangements with related parties referred to in section188(1) and applicable rules of the Companies Act 2013 in Form AOC-2 are provided as"Annexure -IV" to this report forming part hereof.
Your Company has taken necessary approvals as required by Section 188 read with theCompanies (Meeting of Board and its Powers) Rules 2014 from time to time in respect ofthe related party transactions.
Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report No material changes orcommitments have occurred between the close of the Financial Year of the Company to whichthe balance sheet relates and the date of the report which may affect the financialposition of the Company.
Pursuant to applicable provisions of the Companies Act 2013 and Listing Regulationsthe Board in consultation with its Nomination & Remuneration Committee hadformulated a framework containing inter-alia the criteria for performance evaluation ofthe entire Board of the Company its Committees and individual directors includingindependent directors.
The performance of the board was evaluated by independent directors in their separatemeeting after seeking inputs from all the directors on the basis of the criteria such asthe adequacy and composition of the board and its structure effectiveness of boardprocesses information and functioning etc. The performance of the committees wasevaluated by the board after seeking inputs from the committee members on the basis of thecriteria such as the composition of committees effectiveness of committee meetingsfunctions etc. A structured separate exercise is carried out by the board and thenomination and remuneration committee reviews the performance of the individual directorson the basis of the criteria such as qualifications expertise attendance andparticipation in the meetings experience and competencies independent judgementobligations and regulatory compliances performance of specific duties and obligationsgovernance issues the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc. In addition the Chairman was also evaluated onthe key aspects of his role. Performance evaluation of independent directors was done bythe entire board excluding the independent director being evaluated.
The Board evaluation is conducted through questionnaire having qualitative parametersand feedback based on rating scale of 1-3. The directors expressed their satisfaction withthe evaluation process.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
With a deep dejection your Board of Directors would like to share air of melancholysurrounding the board on demise of Mr. Sham Lal Chopra on 1st September 2016.He acted as an independent non-executive director of the Company. The Board would like tothank him for his invaluable contribution to the Company during his tenure of service andexpresses the deepest condolences to his family.
In accordance with the provisions of section 152 of Companies Act 2013 Mr. KushagrAnsal (DIN: 01 21 6563) Director of the Company is liable to retire by rotation and beingeligible offers himself for re-appointment.
As on 31st March 2017 the composition of board was as given hereunder:
Further Mrs. Nisha Ahuja has resigned from the directorship of the Company with effectfrom 29th May 2017. Your Board of Directors places on record the invaluablecontribution made by her in the progress of the Company during her tenure as a director.
PARTICULARS OF EMPLOYEES
Information required pursuant to section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided as "Annexure-V" to this Report. Your Board of Directorsaffirms that the remuneration paid is as per the Remuneration Policy of the Company.
A statement containing inter alia particulars of top ten Employees in terms ofremuneration drawn and name of every employee if employed throughout the financial yearin receipt of remuneration of Rs. 102 lakhs or more or employees employed for part of theyear and in receipt of Rs. 8.5 lakhs or more per month pursuant to Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 formingpart of this Report is attached herewith in "Annexure-VI".
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy and Technology Absorption
Your Company is not engaged in any manufacturing activity; as such particulars relatingto Conservation of Energy and Technology Absorption as per section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are notapplicable.
B. Foreign Exchange Earnings and Outgo
Particulars of Foreign Exchange Earnings and Outgo -
a) Foreign Exchange
Earnings - through Rs. 136.56 Lakhs Credit Cards as per bank certificates/advices
b) Dividend Received in foreign currency (Net of CDT) Rs. Nil
c) Foreign Exchange Outgo
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE Nosignificant and material orders were passed by the regulators or courts or tribunalsduring the financial year 201617 which have an impact on the going concern status andcompany's operations in future.
Your Company believes in adopting best practices of corporate governance. Corporategovernance principles are enshrined in the spirit of Ansal Housing and Construction Ltd.which form the core values of the Company. These guiding principles are also articulatedthrough the Company's code of business conduct corporate governance guidelines charterof various sub-committees and disclosure policy. Pursuant to the Regulation 34 of theListing Regulations a separate section on corporate governance practices followed by yourCompany together with a certificate from M/s. Khanna & Annadhanam CharteredAccountants on compliance with corporate governance norms under the Listing Regulationshas been annexed as part of this Report
In order to comply with the provisions of Regulation 46 read with other regulations ofthe SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 theCompany has designated an e-mail ID - firstname.lastname@example.org which is exclusively for theclarifications/queries/ grievance redressal of the investors of the Company.
LISTING OF EQUITY SHARES
The Securities of the Company are listed and traded at BSE Limited and National StockExchange of India Ltd. The Company has paid listing fee to BSE Ltd. as well as NationalStock Exchange of India Ltd. for the financial year 2017-18.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2014
As a part of the policy for Prevention of Sexual Harassment in the organisation theCompany has in place an Internal Complaints Committee for prevention and redressal ofcomplaints of sexual harassment of Women at work place in accordance with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andrelevant rules thereunder. During the year under review no case was reported in thenature of sexual harassment at any workplace of the Company and any of itssubsidiaries/associates.
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the best oftheir knowledge and belief confirm:
i. that in the preparation of the annual accounts the applicable accounting standardshave been followed along with proper explanations relating to material departures;
ii. that the directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company for the financial yearended 31st March 2017 and of the profit of the Company for that period;
iii. that the directors had taken proper and sufficient care for maintenance ofadequate accounting records in accordance with the provision of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;and
iv. that the directors had prepared the annual accounts on a going concern basis; and
v. that the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
vi. that the directors had devised proper systems to ensure compliances with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
ACKNOWLEDGEMENTS AND APPRECIATION
The Board of Directors of your Company wishes to place on record its appreciation tothe Central and State Governments as well as their respective Departments and DevelopmentAuthorities connected with the business of the Company Government of Sri Lanka Company'sbankers and business associates for the assistance co-operation and encouragement theyextended to the Company.
The Directors also extend their appreciation to the employees for their continuingsupport and unstinting efforts in ensuring an excellent all-round operational performance.The Directors would like to thank shareholders and deposit holders for their support andcontribution. We look forward to their continued support in future.