We have pleasure in presenting the Twenty First Annual Report on business andoperations of the Company together with the Audited Statement of Accounts for thefinancial year ended March 31 2016.
| || || |
(Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Total Revenue ||130133 ||100801 ||169967 ||133084 |
|Operating Expenditure ||84628 ||69276 ||117639 ||92779 |
|Earnings before Interest Depreciation and Amortisation ||45505 ||31525 ||52328 ||40305 |
|Depreciation and Amortisation ||9798 ||9199 ||10592 ||9918 |
|Finance Costs ||14682 ||11460 ||18644 ||13139 |
|Profit Before Tax ||21025 ||10866 ||23092 ||17248 |
|Tax Expenses || || || || |
|Current Tax ||6436 ||3512 ||8348 ||5398 |
|Adjustment of tax relating to earlier periods ||- ||205 ||- ||205 |
|Deferred tax charge/(credit) ||(47) ||149 ||172 ||177 |
|MAT credit entitlement ||- ||- ||(126) ||(27) |
|Profit after Tax ||14636 ||7000 ||14698 ||11495 |
|Share of profit from Associate ||- ||- ||129 ||147 |
|Profit for the year ||14636 ||7000 ||14827 ||11642 |
|Profit/(loss) attributable to: || || || || |
|Owners of the Company ||- ||- ||13013 ||9523 |
|Minority Interest ||- ||- ||1814 ||2119 |
Details of Appropriations:
| || || |
(Rs. in Lakhs)
|Particulars ||Standalone ||Consolidated |
| ||2015-16 ||2014-15 ||2015-16 ||2014-15 |
|Surplus in the statement of profit and loss as per last financial statements ||42818 ||39504 ||45278 ||39094 |
|Profit for the year (net of minority interest) ||14636 ||7000 ||13013 ||9523 |
|Less: || || || || |
|Interim Dividend ||2263 ||- ||2263 ||- |
|Proposed Dividend ||- ||2255 ||- ||2255 |
|Tax on Interim Dividend ||468 ||- ||468 ||- |
|Tax on Proposed Final Dividend ||- ||451 ||- ||451 |
|Dividend Tax Credit availed on || || || || |
|Proposed Final Dividend ||(451) ||- ||- ||- |
|Interim Dividend ||(95) ||- ||- ||- |
|Other adjustments (Net) ||819 ||980 ||1050 ||633 |
|Net Surplus in the statement of profit and loss carried forward ||54450 ||42818 ||54510 ||45278 |
During the financial year 2015-16 the Company has on a standalone basis clocked atotal income of Rs. 130133 Lakhs as compared to Rs. 100801 Lakhs for the previous yearended March 31 2015 an increase of 29% on a year-on-year basis. EBITDA has increasedfrom Rs. 31524 Lakhs to Rs. 45505 Lakhs an increase of 44%. Profit after tax was at Rs.14636 Lakhs for the financial year ended March 31 2016 as compared to Rs. 7000Lakhs for the previous year an increase by 109%.
The consolidated revenue for the Company for the financial year 2015-16 was Rs.169967 Lakhs as compared to Rs. 133084 Lakhs in the previous year a growth of 28% onyear-on-year basis. EBITDA increased from Rs. 40305 Lakhs in the previous year to Rs.52328 Lakhs for the financial year 2015-16 an increase of 30%. Profit after tax (beforeshare in profit from associate companies) was at Rs. 14698 Lakhs for the financial yearended March 31 2016 as compared to Rs. 11495 Lakhs for the previous year an increase by28%.
SUBSIDIARIES/ JOINT VENTURES AND ASSOCIATES:
The Company has a total of 11 subsidiaries 1 joint venture company and 1 associatecompany as at March 31 2016. During the year under review the Company entered into jointventure with Reco Caspia Private Limited an investment arm of GIC Singaporessovereign wealth fund for acquisition of 16 acre prime property in Chennai fromM/s. Kansai Nerolac Paints Limited. The acquisition was done through JV - M/sPerungudi Real Estates Private Limited.
FINANCIAL STATEMENTS OF SUBSIDIARIES AND ASSOCIATE COMPANIES:
In accordance with the provisions of Section 129 (3) of the Companies Act 2013 readwith SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015 theconsolidated financial statements have been prepared by the Company which forms part ofthis Annual Report. A statement containing the salient features of the financialstatements of subsidiaries/ associates as required in Form AOC 1 is enclosed as Annexure-1to this Report.
TRANSFER TO RESERVES:
An amount of Rs. 819 Lakhs has been transferred out of the current years profitsto General Reserves towards future capital expansion.
The Board of Directors of the Company on March 14 2016 declared Interim Dividend ofRs. 2.00 (Rupees Two Only) (20%) per Equity Share Capital of Rs. 10 each out of theprofits for the financial year 2015-16 and paid to the shareholders on March 292016. The Total payment on account of Interim Dividend (including Interim Dividend Tax)was Rs. 2731 Lakhs. The Board has not recommended any final dividend on the equity sharesand the Interim Dividend declared by the Company is the final Dividend for the financialyear 2015-16.
The Company has not accepted any deposits in terms of Chapter V of the Companies Act2013 read with the Companies (Acceptance of Deposit) Rules 2014 during the year underreview. Accordingly no amount is outstanding as on the balance sheet date.
During the year under review the Company has not issued any Debentures. As on datethe Company does not have any outstanding Debentures.
Companys equity shares are tradable only in electronic form. As on March 312016 97.22% of the Companys total paid up equity share capital representing110034295 shares are in dematerialised form.
TRANSFER TO INVESTOR PROTECTION FUND:
The Company and the Registrar & Transfer Agents of the Company have sent letters toall members whose dividend were unclaimed so as to ensure that they receive their rightfuldues. During the year the Company transferred Rs. 221844/- to the Investor Educationand Protection Fund the amount in unpaid Dividend Account opened in 2007-08 which was due& payable and remained unclaimed and unpaid for a period of seven years as providedunder Section 124(5) of the Companies Act 2013.
The authorised share capital of the Company is Rs. 1500000000/- divided into150000000 equity shares of Rs. 10/- each. During the year the Company had issued andallotted 434975 equity shares of the Company to the eligible employees on exercise ofoptions granted under the Brigade Enterprises Limited Employee Stock Option Scheme 2011.Consequently the issued subscribed and paidup equity share capital of the Companyhas increased from 112743640 equity shares of Rs. 10/- each to 113178615 equityshares of Rs. 10/- each.
EMPLOYEE STOCK OPTION SCHEME:
The Employee Stock Option Scheme titled "Brigade Employee Stock Option Plan2011" was rolled out in the financial year 2014-15. Statement giving detailedinformation on the plan in accordance with SEBI Regulations is contained in Annexure-2 tothis Report.
The operations of the Company can be classified into three main Segments:
1. Income from Construction and development of Real Estate Projects
2. Revenue from Hospitality Assets
3. Lease Rental Income from Commercial and Retail Assets
The Real Estate segment specialises in development of residential and commercial RealEstates projects on Sale basis. The revenues of this segment is recognised either onpercentage of completion method during construction or unit sale method after thecompletion of the projects.
The Hospitality segment develops hospitality assets and specialises in identifyingHotel operators and monitoring the operation of the hotel assets.
The Commercial and Retail segment concentrates on developing commercial and retailassets and identifying suitable tenants on long term lease for the Assets owned by theCompany.
The details of ongoing projects as on March 31 2016 has been given in the ManagementDiscussion and Analysis Report which is forming part of the Annual Report.
During the year under review the equivalent area constructed was 4.85 million sq. ft.(out of which the Companys share is 3.80 million sq. ft.).
The Group currently has 18 ongoing residential projects aggregating to 16.47 millionsq. ft. of saleable area (Out of which Companys share is about 12.00 million sq.ft.) 10 commercial/ retail projects aggregating to 3.33 million sq. ft. of developablearea (out of which Companys share is about 2.03 million sq. ft.) and 4 Hospitalityprojects of 0.58 million sq. ft. of developable area (Out of which Companys share isabout 0.43 million sq. ft.).
Brigade Group proposes to launch 6.85 million sq. ft. (out of which Companysshare is about 4.50 million sq. ft.) of new launches in the financial year 2016-17. Thiswill comprise of 3.21 million sq. ft. (out of which Companys share is about2.06 million sq. ft.) of Residential launches 3.31 million sq. ft. (out of whichCompanys share is about 2.11 million sq. ft.) of Commercial and retail projects and0.33 million sq. ft. (out of which Companys share is about 0.33 million sq. ft.) ofHospitality space.
BOARD OF DIRECTORS:
The Board of Directors of the Company comprises of 9 Directors of which 2 areExecutive Directors 5 Non-Executive Independent Directors and 2 Non-Executive Directors.The composition of the Board of Directors is in due compliance of the Companies Act 2013and SEBI (LODR) Regulations 2015.
During the year under review the Board of Directors of the Company met 5 times on thefollowing dates:
May 20 2015
August 5 2015
November 2 2015
February 1 2016
March 14 2016
In accordance with the provisions of the Companies Act 2013 a separate meeting of theIndependent Directors of the Company was held on March 14 2016.
A detailed note on the composition of various Committees of the Board and theirmeetings including the terms of reference were given in the Corporate Governance Reportforming part of the Annual Report.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Directors of the Company are appointed by the members at annual general meetings inaccordance with the provisions of the Companies Act 2013 and the rules made thereunder.
The Company has adopted the provisions of the Companies Act 2013 and SEBI (LODR)Regulations 2015 relating to the appointment and tenure of Independent Directors.
The Companys Remuneration Policy for Directors Key Managerial Personnel andSenior Management Personnel is contained in Annexure-3.
APPOINTMENT/ RE-APPOINTMENT OF DIRECTORS
In accordance with the Articles of Association of the Company and the provisions ofSection 152(6)(e) of the Companies Act 2013 Mr. M. R. Shivram (DIN: 00824560) and Mr.M. R. Gurumurthy (DIN 01367579) Directors of the Company will retire by rotation at theensuing Annual General Meeting and being eligible offer themselves for reappointment.
The Board of Directors at their meeting held on February 1 2016 have appointed Ms.Lakshmi Venkatachalam (DIN: 00758451) as an Additional Director of the Company. Ms.Lakshmi Venkatachalam holds office up to the date of ensuing Annual General Meeting. TheCompany has received a notice in writing under Section 160 of the Companies Act from aMember along with a cheque of Rs. 1 Lakh in favour of the Company proposing thecandidature of Ms. Lakshmi Venkatachalam as an Independent Director of the Company for aconsecutive term up to five years from the date of her induction on the Board.
The Notice convening the Annual General Meeting includes the proposals for there-appointment of the Directors. Brief resume of the Directors proposed to be appointed/re-appointed nature of their expertise in specific functional areas and names of theCompanies in which they hold directorship/ membership/ chairmanship of the Board orCommittees as stipulated under SEBI (LODR) Regulations 2015 have been provided as anannexure to the Notice convening the Twenty First Annual General Meeting.
None of the Directors of the Company are disqualified under Section 164(2) of theCompanies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS
The Independent Directors of the Company have provided the declaration of Independenceas required under Section 149(7) of the Companies Act confirming that they meet thecriteria of independence under Section 149(6) of the Companies Act and SEBI (LODR)Regulations 2015.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD:
The Board conducted an evaluation of itself & its Committees based on identifiedcriteria and framework pursuant to the provisions of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. The Board evaluatedand assessed the performance and potential of each Director.
In a separate meeting of independent directors performance of non-independentdirectors performance of the board as a whole and the performance of the Chairman wasevaluated taking into account the views of executive directors and non-executivedirectors. The same was discussed in the board meeting that followed the meeting ofindependent directors at which the performance of the board its committees andindividual directors was also discussed. Performance evaluation of the independentdirectors done by the entire board excluding the independent director being evaluated.
DIRECTORS RESPONSIBILITY STATEMENT:
The Board of Directors hereby confirms that:
a) in the preparation of the annual financial statements for the year ended March 312016 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
b) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;
c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the annual financial statements have been prepared on a going concern basis;
e) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively;
f) there are proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL:
Mr. M. R. Jaishankar Chairman & Managing Director Mr. Suresh K ChiefFinancial Officer and Mr. P. Om Prakash Company Secretary & Compliance Officer arethe Key Managerial Personnel in accordance with the provisions of Section 203 of theCompanies Act 2013. There has been no change in the key managerial personnel during theyear.
REMUNERATION DETAILS OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES:
The particulars as required under Section 197 of the Companies Act 2013 read with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is contained in Annexure-4.
The details of employees who are in receipt of remuneration exceeding the limitsprescribed under Section 134 of the Companies Act 2013 read with Rule 5(2) & 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as Annexure- 5. In terms of Section 136(1) of the Companies Act 2013 andthe Rules made thereunder the Annual Report is being sent to the shareholders and othersentitled thereto excluding the aforesaid annexure. Any shareholder interested in obtainingthe same may write to the company secretary.
The members of the Company at the Nineteenth Annual General Meeting held on August 52014 approved the appointment of Messers S. R. Batliboi & Associates LLP CharteredAccountants (Firm Registration Number 101049W) as the Statutory Auditors of the Companyfor a period of 5 years till the conclusion of Twenty Fourth Annual General Meeting whichis subject to annual ratification by the members of the Company in terms of Section 139 ofthe Companies Act 2013 read with the Companies (Audit and Auditors) Rules 2014.
The resolution relating to annual ratification of statutory auditors appointment ispart of the notice of the Twenty First Annual General Meeting. Members may ratify theappointment of Messers S. R. Batliboi & Associates LLP Chartered Accountants as theStatutory Auditors of the Company for the financial year 2016-17.
There are no qualifications or adverse remarks in the Statutory Auditors Reportfor the financial statements for the year ended March 31 2016 which require anyexplanation from the Board of Directors.
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India relating to Board Meetings and Annual General Meetings.
SECRETARIAL AUDIT REPORT:
Pursuant to provisions of the Companies Act 2013 the Board of Directors of theCompany have appointed Mr. K. Rajshekar Practicing Company Secretary (CP No.2468) toconduct the Secretarial Audit for the financial year 2015-16 and his Report onCompanys Secretarial Audit is appended as Annexure-6 to this Report.
There are no qualifications or adverse remarks in the Secretarial Audit Report whichrequire any explanation from the Board of Directors.
The Board of Directors of the Company have appointed M/s GNV & Associates CostAccountants (Firm Regn No. 000150) as Cost Auditors of the Company for the financial year201516 at a fee of Rs. 1.25 lakhs plus applicable taxes and out of pocket expensessubject to the ratification of the said fees by the Shareholders at the ensuing AnnualGeneral Meeting of the Company pursuant to provisions of Section 148 of the Companies Act2013.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Managements Discussion and Analysis Report for the year under review asstipulated under SEBI (LODR) Regulations 2015 is forming part of the Report.
CORPORATE GOVERNANCE REPORT:
The Company is committed to maintaining the highest standards of Corporate Governance.A detailed report on Corporate Governance pursuant to Schedule V(C) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
The certificate issued by Ms. Aarthi G. Krishna Practicing Company Secretary (CPNo.5645) affirming compliance with the various conditions of Corporate Governance isattached to the report on Corporate Governance.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The details of loans given investments made securities provided and guarantees givenare provided in note 14 and 15 forming part of the standalone financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into during the financial year 2015-2016 with related partieswere in the ordinary course of business and on arms length basis and with the priorapproval of the Audit Committee.
The Company has formulated a policy on Related Party Transactions which is available onthe website of the Company athhttp://www.brigadegroup.com/investor/images/policy-related-party-transactions.pdf.
During the year the Company has not entered in to any contract/ arrangement/transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions. Transactions withrelated parties during the year are listed out in note 37 forming part of the standalonefinancial statements
INTERNAL FINANCIAL CONTROL SYSTEM:
The Company has adequate internal financial control systems in place with reference tothe financial statements.
During the year under review these controls were evaluated and no significant weaknesswas identified either in the design or operation of the controls.
RISK MANAGEMENT COMMITTEE:
As required under Regulation 21 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Company has constituted a Risk Management Committeeconsisting of Executive Director Non-Executive Director and an Independent Directors toidentify and assess business risks and opportunities. The Risk Management Committeeidentifies the risks at both enterprise level as well as at the project level.
The business risks identified are reviewed by the Risk Management Committee and adetailed action plan to mitigate identified risks is drawn up and its implementationmonitored. The key risks and mitigation actions will also be placed before the AuditCommittee of the Company.
CORPORATE SOCIAL RESPONSIBILITY:
A Corporate Social Responsibility (CSR) Committee has been constituted in accordancewith the provisions of Section 135 of the Companies Act 2013. The details of theconstitution of the Committee scope and functions are listed out in the CorporateGovernance Report annexed to this Report.
The disclosures as required under Section 135 of the Companies Act 2013 read with Rule8(1) of the Companies (Corporate Social Responsibility Policy) Rules 2014 is appended as Annexure7 to this Report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM:
The Company has established a vigil mechanism for Directors and Employees to reporttheir genuine concerns illegal unethical behaviour suspected fraud or violation oflaws rules and regulation or conduct to the Ethics Committee members and the Chairman ofthe Audit Committee. The details of which have been given in the Corporate GovernanceReport forming part of this Annual Report.
EXTRACT OF ANNUAL RETURN:
In terms of Section 92 (3) of the Companies Act 2013 read with the Companies(Management and Administration) Rules 2014 the extract of the Annual Return of theCompany for the financial year 2015-16 in Form No. MGT-9 is appended as Annexure-8to this Report.
CODE OF CONDUCT:
Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015the declaration signed by the Chairman and Managing Director affirming compliance of theCode of Conduct by the Directors and senior management personnel of the Company for thefinancial year 2015-16 is annexed and forms part of the Corporate Governance Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3)(m) of the Companies Act2013 read with Companies (Accounts) Rules 2014 is appended as an Annexure-9 tothis report.
The company has a total workforce of 620 as on 31st March 2016. The company believesthat only way it can excel is by empowering its people and consistently providingopportunities to learn and grow. Our Learning & Development process for employees isfocused on supporting high performance through various approaches driven comprehensivelyby HR Business Excellence QA/QC Safety & Technical training teams. The Company aimsto contribute to the overall development of its employees through extensive training& motivational programmes. The Board of Directors would like to express theirappreciation to employees for their sincerity hard work dedication and commitment.
As part of the policy for Prevention of Sexual Harassment in the organization theCompany has in place a Committee called "Complaints Redressal Committeefor prevention and redressal of complaints on sexual harassment of women at work place inaccordance with the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 and relevant rules thereunder. During the period under review nocomplaints were received by the Committee.
AWARDS AND RECOGNITIONS:
Among the significant awards Brigade Group has received in 2015-16 are:
Brigade Exotica won the Luxury apartment project of the Year awardat the NDTV Property Awards 2015.
Brigade won the Developer of the year Commercial awardfor Brigade Magnum at the Global Real Estate Brand Awards 2016.
Mr. Om Ahuja CEO Residential Brigade Enterprises Limited won theMost Enterprising CEO of the Year Award at the Global Real Estate BrandAwards 2016.
Orion East Mall won "Retail Property of the Year- South" at the 5thIndian Retail & e-Retail Awards 2016.
Brigade Group won the Developer of the Year Commercial for Brigade IRV atthe 7th Realty Plus Excellence Awards (South) 2015.
Brigade Group won the Best CSR Initiative of the Year for rejuvenation ofthe Sitharampalya lake at the 7th Realty Plus Excellence Awards (South)2015 Brigade Group won both CREDAI National Awards for CSR at the CREDAIConclave 2015. The Environmental Impact Award for rejuvenating Sitharampalyalake in Whitefield and the redevelopement of the Sangolli Rayanna Park in Malleswaram andthe Social Infrastructure Award for the redevelopement of the Sri. NadaprabhuKempegowda Playground in Malleswaram and the Skywalk with escalator across Dr. RajkumarRoad in Rajajinagar.
Orion Mall @ Brigade Gateway won the "Shopping Mall of the Year" awardat the 13th Franchise Awards 2015.
Brigade Hospitality won the SME Business Excellence Award 2015 in theTravel Tourism and Hospitality sector.
Brigade Exotica won the ICI (KBC)-BIRLA Super Award for OutstandingConcrete Structure of Karnataka (Building Category) - 2015 from Indian ConcreteInstitute during the Concrete day Celebrations.
Mr. Suresh D was selected as one of the Innovative 100 CIOs in Indiaat the Innovative 100 CIO Awards 2015 Ceremony Brigade Group has been RankedNo.1 in the Real Estate Industry and No.28 across all Industries in India asIndias Great Companies to Work for 2015 by Great Place to Work Instituteand the Economic Times.
Brigade Caladium received the Best Ultra Luxury project of the year North Bangalore at the Silicon India Bangalore Real Estate Awards 2015. BrigadeGroup won the Hotel Owner of the Year Award at the HospitalityLeaders Industry Choice Awards 2015.
Mr. M. R. Jaishankar CMD-Brigade Group received the Significant AchievementAward at the vocational service Awards Night organised by Rotary Club Chikmagalur.
Mr. Vineet Verma was felicitated by the Bangalore Chamber of Industry &Commerce at their 38th AGM for his contribution during 2014-15 as Chairmanof the Tourism Media & Leisure Committee.
ADDITIONAL INFORMATION TO SHAREHOLDERS:
All important information such as financial results investor presentations pressreleases new launches and project updates are made available on the Companyswebsite www. BrigadeGroup.com on a regular basis.
There were no significant or material orders passed by the regulators or courts ortribunals impacting the going concern status and Companys operations in future.
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year till the date of thisreport.
There is no change in the nature of the business of the Company. There are nodifferential voting rights shares issued by the Company.
Neither the Managing Director nor the Wholetime Director have received any remunerationor commission from any of the subsidiaries joint ventures or associates.
There were no sweat equity shares issued by the Company.
The Directors wish to place on record their appreciation and sincere thanks to all thestakeholders for the continued support and patronage. We look forward to your continuedsupport and co-operation in the way forward.
| ||By order of the Board |
| ||For Brigade Enterprises Limited |
|Place: Bangalore ||M. R. Jaishankar |
|Date: May 16 2016 ||Chairman and Managing Director |