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Ansal Housing & Construction Ltd.

BSE: 507828 Sector: Infrastructure
NSE: ANSALHSG ISIN Code: INE880B01015
BSE LIVE 15:24 | 17 Feb 23.25 0.15
(0.65%)
OPEN

23.05

HIGH

23.50

LOW

22.75

NSE LIVE 15:56 | 17 Feb 23.35 0.20
(0.86%)
OPEN

23.30

HIGH

23.75

LOW

22.30

OPEN 23.05
PREVIOUS CLOSE 23.10
VOLUME 7220
52-Week high 32.25
52-Week low 15.50
P/E 17.61
Mkt Cap.(Rs cr) 138.08
Buy Price 23.20
Buy Qty 600.00
Sell Price 23.50
Sell Qty 100.00
OPEN 23.05
CLOSE 23.10
VOLUME 7220
52-Week high 32.25
52-Week low 15.50
P/E 17.61
Mkt Cap.(Rs cr) 138.08
Buy Price 23.20
Buy Qty 600.00
Sell Price 23.50
Sell Qty 100.00

Ansal Housing & Construction Ltd. (ANSALHSG) - Director Report

Company director report

Dear Shareholders

The Directors of your Company have immense pleasure in presenting the 32nd AnnualReport of your Company together with the Audited Statement of Accounts of the Company forthe Financial Year ended 31st March 2016.

FINANCIAL RESULTS AND APPROPRIATIONS

Your Company’s performance on standalone basis during the year as compared withthat during the previous year is summarised as under:

(Figures In Rs. Lacs)

Particulars 2015-16 2014-15
1 Sales & Other Income 46708.86 78771.10
2 Gross Profit (Before Interest and Depreciation etc.) 8837.26 9396.09
Less:
-Interest & Finance Charges 6258.47 4129.17
-Depreciation 303.30 399.82
6561.77 4528.99
3 Net Profit before Tax 2275.49 4867.10
Less:
-Provision for Tax 774.59 1687.04
4 Net Profit After Tax but before prior period items 1500.90 3180.06
Less:
-Tax Provisions for earlier years 0.67 129.09
5 Net Profit after Tax and prior period items 1500.23 3050.97
Add:
Surplus Profit brought forward from previous year 9358.66 7853.53
6 Balance available for appropriation 10858.89 10904.50
Less Appropriations:
-Proposed Dividend @6% (Previous Year 8%) 356.31 475.09
-Dividend Tax thereon - 70.75
-Transfer to General Reserve 500.00 1000.00
-Transfer to Capital Redemption Reserve - -
-Dividend/Dividend Tax for earlier years 1.29 -
857.60 1545.84
7 Surplus Profit carried over to Balance Sheet 10001.29 9358.66

PERFORMANCE REVIEW AND STATE OF AFFAIRS OF THE COMPANY

Standalone & Consolidated Financial Results

During the Financial Year 2015-16 the net revenue from operations for the standaloneentity decreased to Rs.467.09 crores from Rs.787.71 crores in the previous year showing adecline of around 40.70%. In line with decrease in revenues the operating Profit beforeinterest tax depreciation and amortization (EBITDA) decreased from Rs.93.96 crores toRs.88.37 crores and the Profit after tax (PAT) for the year under review stood at Rs.15.00crores as against Rs.30.51 crores for the last Financial Year. The decrease in the revenueand Profits is due to general recession in the real estate sector during the FinancialYear 2015-16. In line with the above the consolidated revenue from operations stood atRs.503.79 crores during the Financial Year 2015-16 against revenue of Rs.818.95 croresshowing a downturn of more than 38%. Net Profit after minority interest for the group forthe Financial Year 2015-16 was Rs.12.88 crores against Rs.28.77 crores in the previousyear.

Business Review

REffecting the downward trends of the overall economy the year 2015-16 has not been anencouraging and favourable year for the real estate sector. Demand of commercial anddwelling units has been stagnated/reduced due to which there has been over inventory offinished units. Considering the low demand the Company has slowed down the constructionactivities in some of the projects and has not launched any new projects during the yearunder review.

The company is currently developing/ building various projects at Gurgaon MeerutAgra Alwar Ajmer Indore Karnal Yamunanagar Jhansi Jammu Muzaffiarnagar RewariShahpur Zirakpur and Ghaziabad. Construction at all locations is progressing as perschedule and possession of ready units in various projects shall be handed over to thecustomers as per the agreed time schedule.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the FinancialYear 2015-16.

TRANSFER TO RESERVES

The Company proposes to transfer a sum of Rs.5 crores (Previous Year Rs.10 crores) tothe General Reserve out of the amount available for appropriation. An amount of Rs.100.01crores is proposed to be retained in Statement of Profit and Loss.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 0.60 per Equity Share (@ 6%)on the paid up equity share capital of the Company for the financial year ended 31st March2016. The total payout of the proposed dividend is Rs.356.31 Lacs and the said dividendwill be paid to members whose names would appear in the Register of Members as on therecord date for the purpose of dividend for the Financial Year 2015-16. In respect ofshares held in dematerialized form it will be paid to the members whose names will befurnished by National Security Depository Ltd. and Central Depository Services (India)Ltd. on behalf of benefficial owners as on that date. A motion for confirmation of thedividend for the year is being placed before the shareholders at the Annual GeneralMeeting.

UNCLAIMED DIVIDEND

Transfer of Amount to Investor Education and Protection Fund

Pursuant to the provisions of Section 205A(5) of the Companies Act 1956 the relevantamount against the Final dividend for the Financial Year 2008-09 which remains unpaid orunclaimed for a period of seven years shall be transferred by the Company to the InvestorEducation and Protection Fund (IEPF) by 31st day of October 2016. Shareholders arerequested to please send their stale/ outdated final dividend warrants issued by theCompany for the financial year 2008-09 to the Company on or before 31st day of October2016 enabling it to issue pay orders/demand drafts as the case may be to theShareholders from whom the requisite requests shall be received otherwise the Companywould have no other option but to transfer this amount to the IEPF by 31st day of October2016 which is the last date for transfer of the said amount. No further correspondencewould be entertained after such unpaid\unclaimed dividend amount is transferred to theIEPF. Once unclaimed dividend is transferred to IEPF no claim shall lie further againstthe Company in respect thereof. Details of unpaid/unclaimed dividends are available at theCompany’s website viz. www.ansals.com.

FIXED DEPOSITS

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 has stopped accepting/renewing public deposits with Effect from 1st April 2016 inview of non availability of deposit insurance which is a mandatory condition foracceptance/renewal of deposits. The details relating to the deposits as required by Rule8(5)(v) of the Companies (Accounts) Rules 2014 are given below:

1. Deposits accepted during the year 2015-16 Rs. 7810.10 lakh
2. Deposits remained unpaid or unclaimed as at 31.03.2016 Rs. 162.59 lakh
3. Whether there has been any default in repayment of deposits or payment of interest thereon during the year 2015-16 and if so number of such cases and the total amount involved- No
(i) at the beginning of the year;
(ii) maximum during the year;
(iii) at the end of the year;
4. The details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act 2013 NA

Though the Company has been regular in repayment of deposits and interests thereon andthere has been no default as on date of this report considering the mismatch inanticipated cash inflows and outflows (particularly on account of refund of deposits) innear future the Company is likely to move an application to the Company LawBoard/National Company Law Tribunal seeking extension of time in repayment of deposits asapproved by the Board of Directors of your Company in its meeting held on 30th May 2016.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2016 was Rs.59.47 crores. During theyear under review the Company did not issue shares of any kind or any convertibleinstruments.

MATERIAL CHANGES & 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 or commitments have occurred between the close of the FinancialYear of the Company to which the balance sheet relates and the date of the report whichmay affiect the financial position of the Company.

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 sect@ansals.com.

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.

i) Industry Structure and Developments

Global and Indian Economy

According to the International Monetary Fund World Economic Outlook (Update–January 2016) the Global growth is projected at 3.4 percent in 2016 and 3.6 percentin 2017. The pickup in global activity is projected to be more gradual than in the 2015especially in emerging market and developing economies. In advanced economies a modestand uneven recovery is expected to continue with a gradual further narrowing of outputgaps. The picture for emerging market and developing economies is diverse but in manycases challenging. As per the IMF report Indian Economy is the world’s fastestgrowing economy. As per the economic survey report the GDP of the Indian economy isprojected to have increased to 7.6% in 2015-16 as compared to 7.2% in 2014-15.

Industry review

Witnessing a paradigm shift in the last decade the real estate sector has over theyears steadily transformed itself from an unorganized sector to become a more structuredone. It has forward and backward linkages with more than 250 different sectors and is thesecond largest employment generator in India after agriculture.

As per the Economic Survey 2015-16 real estate sector constituted 7.4% of India’sGDP in 2014-15. However the sector has been affected by domestic as well as globalslowdown with its growth decelerating from 4.4% in 2014-15 to 3.7% in 2015-16. The realestate market has been amongst the sectors worst hit by the economic downturn. Theresidential space continues to face headwinds in the form of muted sales and subduedconsumer demand. Furthermore the sector has been challenged by frequent delays in projectcompletion and a complex approval process. This has resulted in developers curtailing newproject launches and focusing on executing existing projects to deliver within thecommitted timeframe.

Beyond the short term demand factors there is immense potential for residential realestate in India. This growth is supported by robust underlying market drivers such asfavourable macroeconomic conditions increasing affordability and urbanization improvedaccess to credit and the gradual shift from unorganised real estate construction toorganised development. The government is focussed on working to deliver on its promise of"Housing for All’ by 2022. The Real Estate (Regulation and Development) Act2016 is a landmark reform for the real estate sector which has the potential to addresslong standing issues which have plagued the growth of the sector. Further policyannouncements and reforms to revive the real estate space including the relaxation ofForeign Direct Investment (FDI) norms introduction of 100 smart cities direct andindirect tax benefits for affiordable housing projects Real Estate Investment Trusts(REITs) etc. have helped in generating a positive outlook for the real estate market.

ii) Opportunities and threats

Opportunities

With the passing of the Real Estate (Regulation & Development) Act 2016 and otherinitiatives taken by the Government the Company strongly believes that the Real EstateSector is bound to improve in long term. Your Company has managed well even duringturbulent times due to its inherent strengths like a well-accepted brand well-designedprojects and trust among members creditors and other financial institutions. Your Companyis hopeful that the Real Estate Sector will improve in near future and the Company islooking forward to grab new opportunities by launching new projects particularly throughcollaboration route and ensure timely delivery of existing projects.

Challenges

Every business has to face various challenges and threats despite of how or where abusiness operates. No business can do away with the threats or challenges and your Companyis no different from others. Your Company also faces challenges/threats at times. In thecurrent recessionary times the foremost challenge is how to increase sales/ collectionsfrom the readily available stock and projects under development so that the Company isable to meet its financial commitments towards suppliers contractors government lendersand employees.

iii) Segment-wise analysis

Revenue of the Company is generated from two segments namely Development of Real Estateand Restaurants (Hospitality).

The Hospitality Division is performing well with a turnover of Rs.4.85 crores withreasonable Profits in the Financial Year 2015-16. Total 32 employees are engaged in thisDivision. The Division has the Brand mainly "The Great Kabab Factory" which hasbeen franchised from U Mac Hospitality Pvt. Ltd.

iv) Outlook

The Real Estate Sector is one of the major sector of an economy over the globe. TheIndian Economy is no different from the rest of the world. The Real Estate Sector isconsidered as the backbone of the Indian Economy. The unique and different approach ofreal estate sector has helped the Indian Economy to grow by improving the infrastructureof India with construction of complexes shopping malls and flats etc. The Real EstateSector is expected to grow at a good rate over the next decade.

The implementation of the Real Estate (Regulation & Development) Act 2016 shallhelp the real estate sector to gain the trust of its investors. The initiatives of thegovernment like Smart Cities and Housing for All have raised hope among the real estatesector as there is a lot of scope for development of the sector. According to IMFIndia’s GDP growth rate is estimated to be 7.5% for Financial Year 2016-17. YourCompany would try to develop and deliver high quality projects for its customers.

v) 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 accurate reliable andis 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 five times during the Financial Year 2015-16. 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.

vi) Risks and Concerns

The management of the company anticipates the following major risks pertaining to theindustry in which it operates:

Liquidity risk

The time required for liquidity of real estate property can vary depending on thequality and location of the property. At times it may also be impacted by the generalmarket sentiments and economic conditions in the country.

Regulatory risks

In terms of property ownership permission from the Reserve Bank of India is requiredfor foreign investors. For capital repatriation investors need to apply for approval fromthe RBI and Foreign Direct Investment is limited to a limited set of opportunities (e.g.townships).

Macroeconomic risks

Interest rates inflation and exchange rate risks are amongst the importantmacroeconomic indicators.

Ownership & Land Title Issue

Lack of information in the real estate segment in India coupled with the age oldproperty related issues discourages the investment of the large players in the semi urbanand rural areas thus slacking an overall growth of the real estate sector.

The sanctioning procedures and involvement of multiple agencies in sanctioning restrictthe growth of the Real Estate Industry. Average time taken to get clearance for a projectis increasing by every passing year thereby escalating costs for the Developers.

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 Company have been adoptingadequate and timely risk management measures to take care of the risks.

vii) Material Developments in Human Resources/Industrial Relations Front includingnumber of people employed

Employee relations continue to be cordial and harmonious at all levels and in alldivisions of the Company. The Board of Directors would like to express their sincereappreciation to all the employees for their continued hard work and steadfast dedication.

The company conducts consultations dialogues deliberations negotiations and meetingsin a congenial environment and arrives at amicable solutions to issues that crop from timeto time.

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. No complaints were received by the Committee during the periodunder review.

As on 31st March 2016 the Company had a workforce of 612 employees.

viii) Cautionary Statement

Statements in this Management Discussion and Analysis describing the Company’sobjectives projections estimates and expectations may be forward looking statementswithin the meaning of applicable laws and regulations. Actual results may difiersubstantially or materially from those expressed or implied. Important developments thatcould affiect 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.

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 continuouslystress on systems/quality for ultimate delivery of its products.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company furnished to the Company a declaration tothe Effect that they meet the criteria of independence as provided in Sub-Section 6 ofSection 149 of Companies Act 2013 read with Schedule IV thereof in the first BoardMeeting held for the Financial Year 2016-17.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

The Company has held five Board meetings during the Financial Year under review forwhich notices were served in accordance with Section 173(3) of the Companies Act 2013 attheir addresses registered with the Company by the permitted mode of delivery. The detailsof the Board Meetings are given in the Corporate Governance Report that forms part of theAnnual Report.

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 is sufficient/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 Whole-time Director KMP and Senior Management Personnel shallbe eligible for a monthly remuneration as may be approved by the Board on therecommendation of the Nomination & Remuneration Committee. The breakup of the payscale and quantum of perquisites including employer’s contribution to providentfund pension scheme medical expenses club fees etc. shall be decided and approved bythe Board/ the person authorized by the Board on the recommendation of the Committee andapproved by the shareholders 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/ Independent Director:

a) Remuneration/Commission:

The remuneration/commission shall be fixed as per the slabs and conditions mentioned inthe Articles of Association of the Company and the Companies Act 2013.

b) Sitting Fees:

The Non-Executive /Independent 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.

c) Commission:

Commission may be paid within the monetary limit approved by the shareholders subjectto the 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 are given in the "Annexure-I"forming part of this report as specified under the Companies (Corporate SocialResponsibility Policy) Rules 2014.

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 properly defined network. Head of Departments are responsiblefor implementation of the risk management system as may be applicable to their respectiveareas of functioning and report to the Board and the Audit Committee.

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 objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues.

In today’s challenging and competitive environment strategies for mitigatinginherent risks in accomplishing the growth plans of the Company are imperative. The commonrisks inter alia are: Regulations Competition Business risk Technology ObsolescenceInvestments Retention of talent and Expansion of facilities etc.

Business risk inter-alia further includes financial risk political risk fidelityrisk and legal risk etc.

As a matter of policy these risks are assessed and appropriate steps are taken tomitigate the same as 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.

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 the proper approval and reporting of transactions between the Company andits Related Parties. The RPT Policy is also in Compliance with the new SEBI (ListingObligations & Disclosure Requirements) Regulations 2015. All Related PartyTransactions are approved by the Audit Committee prior to entering into the transactions.Related Party Transactions of repetitive nature are approved by the Audit Committee onomnibus basis for one Financial Year at a time. All omnibus approvals are reviewed by theAudit Committee on a quarterly basis. The Policy has been disclosed on the website of theCompany 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 Clause 49 of the erstwhile ListingAgreement. The objective of the Policy is to ensure the orderly and efficient conduct ofbusiness of the Company including adherence to company’s policies safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation.

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 Clause 49 of the erstwhile Listing Agreement. The Policy on BoardDiversity shall help the Nomination & Remuneration Committee of the Company whileconsidering and recommending appointment of persons on the Board of Directors of theCompany.

COMMITTEES OF THE BOARD OF DIRECTORS

I. Disclousre of Composition of Audit Committee

The Company is having an Audit Committee comprising of the following Directors:

Name of the Director Status Category
Mr. Sham Lal Chopra Chairman Non-Executive & Independent Director
Mr. Ashok Khanna Member Non-Executive & Independent Director
Mr. Surrinder Lal Kapur Member Non-Executive & Independent Director
Mr. Kushagr Ansal Member Whole-time Director

II. Disclousre of Composition of Nomination and Remuneration Committee

Your Company being covered by Section 178(1) of the Companies Act 2013 read with Rule6 of the Companies (Meetings of Board and its Powers) Rules 2014 has constituted theNomination and Remuneration Committee w.e.f. 28th day of May 2014.

The composition of Nomination and Remuneration Committee is as given hereunder:

Name of the Director Status Category
Mr. Sham Lal Chopra Chairman Non-Executive & Independent Director
Mr. Deepak Ansal Member Chairman & Managing Director
Mr. Surrinder Lal Kapur Member Non-Executive & Independent Director
Mr. Maharaj Kishen Trisal Member Non-Executive & Independent Director

III. Disclosure of composition of Stakeholders’ Relationship Committee

The composition of Stakeholders’ Relationship Committee is as given hereunder:

Name of the Director Status Category
Mr. Sham Lal Chopra Chairman Non-Executive & Independent Director
Mr. Deepak Ansal Member Chairman & Managing Director
Mr. Ashok Khanna Member Non-Executive & Independent Director

IV. Disclosure of composition of Corporate Social Responsibility Committee

The composition of Corporate Social Responsibility Committee is as given hereunder:

Name of the Director Status Category
Mr. Ashok Khanna Chairman Non-Executive & Independent Director
Mr. Surrinder Lal Kapur Member Non-Executive & Independent Director
Mr. Maharaj Kishen Trisal Member Non-Executive & Independent Director
Mr. Kushagr Ansal Member Whole-time Director

An Annual Report on the CSR activities of the Company for the Financial Year 2015-16 isattached as " Annexure -I".

STATUTORY AUDITORS & THEIR REPORT

M/s. Khanna & Annadhanam Chartered Accountants Statutory Auditors of the Companywill retire at the conclusion of the ensuing Annual General Meeting and being eligiblehave consented and offered themselves for re-appointment as statutory auditors for theFinancial Year 2016-17. Pursuant to Section 141 of the Companies Act 2013 and relevantRules prescribed thereunder the Company has received certificate dated 26th May 2016from the Auditors to the Effect inter-alia that their re-appointment if made would bewithin the limits laid down by the Companies Act shall be as per the term provided underthe Companies Act that they are not disqualified for such re-appointment under theprovisions of the applicable laws and also that there is no proceeding pending againstthem or any of their partners with respect to professional matters of conduct. Comments ofthe Auditors in their report and the notes forming part of the Accounts areself-explanatory and need no comments.

COST AUDITORS AND THEIR REPORT

M/s. Chandra Wadhwa & Co. Cost Accountants were appointed as Cost Auditors forthe Financial Year 2015-16 to conduct cost audit of the accounts maintained by the Companyin respect of the various projects prescribed under the applicable Cost Audit Rules. TheCost Audit Report given by the Cost Auditors for the Financial Year 2015-16 shall be filedas per the requirements of applicable laws.

SECRETARIAL AUDITORS AND THEIR REPORT

M/s. Vivek Arora Company Secretaries were appointed as the Secretarial Auditors of theCompany for the Financial Year 2015-16 pursuant to Section 204 of the Companies Act 2013.The Secretarial Audit Report submitted by them in the prescribed Form MR-3 is attached as "Annexure-II"and forms part of this report. The Secretarial Audit Report is self-explanatory andneeds no comments.

EXTRACTS OF THE ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014are furnished in Form MGT-9 which is attached as "Annexure-III" to thisReport forming part hereof.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The particulars of Loans Guarantees and investments made by the Company during theyear under review under section 186 of the Companies Act 2013 are provided hereunder:-

Nature of Transaction Amount involved (in Rupees)
Corporate Guarantee provided in favour of Punjab National Bank for a loan sanctioned to M/s. Geo Connect Limited a wholly owned subsidiary of the Company. 114000000

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Details of contracts or arrangements entered into by the Company during the FinancialYear 2015-16 with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 and as required to be disclosed as per Section 134(3)(h) are furnishedin Form AOC-2 which is attached as "Annexure-IV" forming part of thisreport.

Your Company has taken necessary approvals as required by Section 188 read withCompanies (Meeting of Board and its Powers) Rules 2014 from time to time in respect ofthe related party transactions.

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

The Company conducts Familiarization Programme for the Independent Directors to providethem an opportunity to familiarize with the Company its management and its operations soas to gain a clear understanding of their roles and responsibilities and contributesignificantly towards the growth of the Company. They have full opportunity to interactwith senior management personnel and are provided all the documents required and sought bythem for enabling them to have a good understanding of the Company its various operationsand the industry of which it is a part.

The initiatives undertaken by the Company in this respect have been disclosed on thewebsite of the Company at www.ansals. com and weblink thereto is http://www.ansals.com/pdfs/Board-Familiarization-Programme.pdf

EVALUATION REPORT BY THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to applicable provisions of the Companies Act 2013 and the erstwhile ListingAgreement with Stock Exchanges the Board in consultation with its Nomination &Remuneration Committee had formulated a framework containing inter-alia the criteriafor performance evaluation of the entire Board of the Company its Committees andindividual directors including independent directors.

A structured questionnaire has been prepared covering various aspects of thefunctioning of the Board and its Committees such as adequac y and composition of theBoard and its Committees matters addressed in the Board and Committee meetings processesfollowed at the meeting Board’s focus regulatory compliances and corporategovernance etc. Similarly for evaluation of individual director’s performance thequestionnaire covers various aspects like his/her proffle contribution to Board andCommittee meetings execution and performance of specific duties obligations andregulatory compliances and governance.

Pursuant to the performance evaluation criteria framed as explained above during theFinancial Year 2015-16 the Board undertook an evaluation of itself and its committees.The Board excluding the independent director being evaluated also assessed theperformance and the potential of each of the independent directors with a view tomaximizing their contribution to the Board. As contemplated by the Act the independentdirectors at one of their meetings conducted a review of the performance of the Chairmanafter taking into account the views of the non-executive members of the Board.

The process put in place by the Board in accordance with the Companies Act 2013 andthe relevant provisions of the Listing Agreement/SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is aimed at improving the performance of the Board itsCommittees and its members.

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review Mrs. Nisha Ahuja (having DIN: 00001875) was regularizedas Director of the Company in the Annual General Meeting of the Company held on30.09.2015.

Mr. Sham Lal Chopra (having DIN: 00183194) Mr. Surrinder Lal Kapur (having DIN:00033312) Mr. Ashok Khanna (having DIN: 01510677) and Mr. Maharaj Kishen Trisal (havingDIN: 00059545) the Directors of the Company were appointed as Independent Directors notliable to retire by rotation on 30th Annual General Meeting held on 25th September 2014of the Company to hold office upto 31st March 2019.

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

In accordance with the provisions of Companies Act 2013 Mr. Deepak Ansal (DIN:00047971) Chairman & Managing Director of the Company is liable to retire by rotationand being eligible offers himself for re-appointment.

Mr. Kaushal Kumar Singhal who was already holding the designation of ExecutiveDirector of the Company was re-designated as the Executive Director and Chief ExecutiveOfficer of the Company w.e.f. 10.02.2016.

DISCLOSURE OF PARTICULARS OF EMPLOYEES’ RECEIVING REMUNERATION OF Rs.60.00LAKHS OR MORE PER ANNUM OR Rs.5.00 LAKHS OR MORE PER MONTH

In accordance with Rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a statement of particulars of Employees receiving aremuneration of Rs.60 lakhs or more per annum or Rs.5.00 lakhs or more per month (ifemployed only for a part of the year) forming part of this Report is attached herewith in "Annexure-V"

DISCLOUSRE OF DIRECTORS’ REMUNERATION

In accordance with Section 197(12) read with Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the disclosure related todirectors’ remuneration is as follow:-

Particulars Details
The ratio of the remuneration of each director to the median* remuneration of the employees for the Financial Year 2015-16 Mr. Kushagr Ansal Whole-time Director: 43.40 Times
Mr. Deepak Ansal Chairman & Managing Director: 79.45 Times
The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager in the Financial Year 2015-16 Increment percentage
CMD: (30.70%)#
WTD: (27.59%)
CEO: 3.82%
CFO: 25.60 %@
CS: (2.57%)
The percentage increase in the median remuneration of employees in the Financial Year 2015-16. 2%
The number of permanent employees of the Company as on 31.03.2016 612
The explanation on the relationship between average increase in remuneration and company performance; The average increase in remuneration of employees during the year 2015- 16 was 2%. During the period 2015-16 company’s revenue declined by more than 40% and the Profit before tax declined by 53.25% and Profit after tax declined by more than 50%.
Comparison of the remuneration of the CEO MD Manager CFO WTD or CS against the performance of the company; There has been a decline in the average remuneration of the KMPs during the Financial year 2015-16 in line with financial performance of the Company.
Variations in the market capitalisation of the company price earnings ratio as at the closing date of 2015-16 and 2014-15 and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer. The Market capitalisation of the Company has decreased by 30.73% as on 31.03.2016 as compared to 31.03.2015. P/E ratio has increased by 40.81% as on 31.03.16 as compared to P/E ratio on 31.03.2015. The closing price of the Company’s Share on NSE was Rupees 19.95 on 31.03.2016 decreased by 80.91% against the price of Rupees 104.50 on which Shares were issued on Rights basis during 2004-05. However the decrease in market price of the shares should be viewed in light of the 2:1 bonus shares issued by the Company on 12th April 2013.
Average percentile increase already made in the salaries of employees other than the managerial personnel in the Financial Year 2014-15 & 2015-16 and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; Percentage increase in the salaries of Employees other than KMP
2014-15: 10%
2015-16: 2%
Percentage increase in the salaries of KMP
2014-15: 7.00%
2015-16: (19.49%)
There were no exceptional circumstances for increase in the managerial remuneration. The Managerial remuneration was given as per Nomination and Remuneration policy of the Company.
Comparison of the each remuneration of the Key Managerial Personnel against the performance of the company; As per details given above.
The key parameters for any variable component of NA remuneration availed by the directors; NA
The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year. NA

* the expression "median" means the numerical value separating the higherhalf of a population from the lower half and the median of a finite list of numbers may befound by arranging all the observations from lowest value to highest value and picking upthe middle one.

# includes an amount of Rs. 11179011 paid in excess of prescribed limits for whichthe Company has already applied to the Central Government seeking its approval for paymentof remuneration to Mr. Deepak Ansal Chairman & Managing Director in excess of limitset out in Section 197 of the Companies Act 2013.

@ includes an amount of Rs. 1029581 paid to Mr. Sanjay Mehta CFO on account of LTAand Medical pertaining to earlier years.

Your Board of Directors affirms that the remuneration paid is as per the RemunerationPolicy of the Company.

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

a) Activities Relating to exports As the company operates in Real Estate & Hospitality segment the Company is not involved in any activity relating to export.
b) Initiatives taken to increase exports
c) Development of new export markets for products and services
d) Export plans

Particulars of Foreign Exchange Earnings and Outgo –

a) Foreign Exchange Earnings - through Credit Cards as per bank certificates/advices Rs. 159.64 Lacs
b) Dividend Received in foreign currency (Net of CDT) Rs. 51.54 Lacs
c) Foreign Exchange Outgo
Payment of Brokerage Rs. 10.87 Lacs
Travel Expenses Rs. 77.75 Lacs
Property Exhibition Rs. 58.17 Lacs
Professional Expenses Rs. 1.74 Lacs

DETAILS OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARY JOINTVENTURE OR ASSOCIATES COMPANIES DURING THE YEAR

No Company has become or ceased to be a Subsidiary Joint Venture or Associate Companyof your Company during the year under review.

MONITORING FRAMEWORK FOR SUBSIDIARY COMPANIES

The Company monitors performance of its subsidiary companies inter alia by thefollowing means:

(i) The Audit Committee periodically reviews financial statements of the subsidiarycompanies along with investments made by them;

(ii) The Board of Directors reviews the minutes of the board meetings and statements ofall significant transactions and arrangements if any of the subsidiary companies.

Your company does not have a material non-listed Indian subsidiary i.e. an unlistedsubsidiary incorporated in India whose income or net worth (i.e. paid up capital andfree reserves) exceeds 20% of the consolidated income or net worth respectively of thelisted holding company and its subsidiaries in the immediately preceding accounting year.The Company has formulated a policy for determining ‘material subsidiary’ andthe same is available on the website of the Company.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunalsduring the financial year 2015-16 which have an impact on the going concern status andcompany’s operations in future.

CORPORATE GOVERNANCE

Your Company attaches considerable significance to good Corporate Governance as animportant step towards building strong investors’ confidence improving investorprotection and maximising long-term stakeholders’ value. Pursuant to Clause 49 of theerstwhile Listing Agreements with the Stock Exchanges and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 a Compliance Report on CorporateGovernance as received from the auditors of the Company on compliance of mandatoryrequirements has 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 – sect@ansals.com 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 2016-17.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm thefollowing in respect of the Audited Annual Accounts for the Financial Year ended 31stMarch 2016:

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 2016 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.

APPRECIATION

Directors wish to place on record their deep thanks and gratitude to;

a) The Central and State Governments as well as their respective Departments andDevelopment Authorities connected with the business of the Company Bankers of theCompany Housing Finance as well as other Institutions for their co-operation andcontinued support;

b) The Shareholders Depositors Suppliers and Contractors for the trust and confidencereposed and to the Customers for their valued patronage;

c) The Board also takes this opportunity to express its sincere appreciation for theefforts put in by the Officers and employees at all levels in achieving the results andhopes that they would continue their sincere and dedicated endeavour towards attainment ofbetter working results during the current year.

Regd. Office: For and on behalf of the Board of Directors
15 UGF Indra Prakash
21 Barakhamba Road
New Delhi - 110 001 Sd/-
Place: New Delhi (Deepak Ansal)
Dated: 30th May 2016 Chairman & Managing Director
DIN: 00047971