Board of Directors as on March 31 2016
D B REALTY LIMITED
Your Directors have pleasure in presenting the10th Annual Report on thebusiness and operations of the Company along with the audited financial statements for thefinancial year ended 31st March 2016.
| || || |
|Particulars ||Standalone ||Consolidated |
| ||F.Y.2015-16 ||F.Y.2014-15 ||F.Y.2015-16 ||F.Y.2014-15 |
|Gross sales and other receipts ||1677457986 ||359819826 ||2341699533 ||2860987958 |
|EBIDTA ||604423525 ||142890062 ||325413455 ||391805981 |
|Interest and Finance Charges ||480951296 ||411252026 ||525991951 ||528273678 |
|Depreciation and amortization ||50687147 ||54839043 ||85324982 ||143194757 |
|Operating Profit ||72785082 ||(323201007) ||(285903478) ||(279662454) |
|Exceptional Items ||75000000 ||(47679636) ||75000000 ||(70515083) |
|Prior year items ||(3057934) ||(4318432) ||3368201 ||(4317780) |
|Provision for Tax ||(18021627) ||(5263486) ||(62250135) ||(238669867) |
|Prior period tax Adjustment ||11971293 ||(30200000) ||555476 ||- |
|Less: Minority Interest ||- ||- ||46754897 ||(69281707) |
|Add: Share of Profit/(Loss) in Associates (Net) ||- ||- ||108971 ||49756527 |
|Profit after taxation ||3835416 ||(240057885) ||(248976750) ||5679536 |
|Surplus brought forward || || || || |
|Balance brought forward ||7230611817 ||7474988133 ||7425952122 ||7420272586 |
|Adjustment due to Merger ||767355012 ||- ||(315460279) ||- |
|Net Profit/ (Loss) ||777482 ||(244376317) ||(248976750) ||5679536 |
|Amount available for appropriation ||7998744311 ||7230611817 ||6861515093 ||7425952122 |
|Net Worth ||35496811168 ||33506489830 ||34373081950 ||34115330134 |
Amalgamation of a Subsidiary Company with the Company and Accounting Treatment
During the year under review pursuant to the Scheme of Amalgamation between theCompanys subsidiary namely Gokuldham Real Estate Development Company Pvt. Ltd.(Transferor Company) and Company approved by Hon. Bombay High Court on 16th October2015 and 27th October 2015 the Transferor Company have been amalgamated withthe Company with effect from April 1 2013 (the Appointed Date). The High Court order wasfiled with the Registrar of Companies who had taken the same on record on 23rdDecember 2015 (the Effective Date). As per the approved Scheme of Amalgamation theCompany issued and allotted 71755740 8% Redeemable Preference shares of Rs. 10/- eachfully paid up in the ratio of 574 Preference shares for every one equity share of Rs.100/- each held by the three shareholders (other than Company the holding Company) in theAmalgamating Company.
Further as per the Scheme of Amalgamation approved by the Hon. Bombay High Court thenew Preference Shares are to be listed on both BSE Limited and National Stock Exchange ofIndia Limited. In this context the Company has received in principle approvals forlisting of the said Preference Shares from BSE Limited and National Stock Exchange ofIndia Limited and is awaiting final approval from SEBI.
The aforesaid amalgamation was accounted as amalgamation in the nature ofmerger in accordance with the approved Scheme and consequently the pooling ofinterest method was used as per AS 14 accounting of amalgamation. The Company has createda Capital Reserve of Rs. 504631445/- on account of the aforesaid amalgamation. Theappointed date of the amalgamation being April 1 2013 the net profit from the TransferorCompany during the financial year 2013-14 and 2014-15 aggregating Rs. 767355012/- hasbeen transferred to the Surplus in the statement of Profit and Loss in the Books of theCompany upon amalgamation. The details of Capital Reserve created consequent to theamalgamation are appearing in Note no.37 of the Standalone Financial Statements.
Status of Projects of the Company / its subsidiaries
Pursuant to full Occupation Certificate received last year for "DB Woods"thework of handing over of possession to flat buyers in respect of Tower AB and C has beensubstantially completed. Out of total 630 flats in the said Project 554 flats have beenhanded over to flat buyers and the balance 76 flats are under process of handing over tothem. This project was undertaken by the Companys subsidiary namely Gokuldham RealEstate Development Company Pvt. Ltd. which has been amalgamated with the Company pursuantto Hon. Bombay High Court Order passed during the year.
"DB Crown" at Prabhadevi is a residential project offering luxury ofampleness of space and an endless view of the sea. The construction work of the saidproject is progressing with an impressive pace as per revised plans.
"X BKC" at Bandra near Bandra Kurla Complexis attracting the attention ofmany potential flat buyers due to its strategic location. It is an iconic residentialproject that offers variety of spacious residential apartments ranging from 1 BHK to 6 BHK(Duplex). The project is spread over 5 acres of land one of largest integratedresidential complex in upscale Bandra east in Mumbai Suburbs. The construction work of thesaid project which is being developed in a joint venture with Vishwaroop Estates andDevelopers Private Limited (Radius Group) is witnessing good progress as per approvedplans.
"DB Ozone" at Dahisar is a large residential project and the civil structurework for sale and rental Building has been completed and finishing work in the Project isin progress.
"DB Heights" at Mahalaxmi is a residential tower offering the luxury of sizeand space along with an unmatched view of the Arabian Sea as well as the Golf Course. Withrespect to approvals the Commencement Certificate (CC) has been issued by MCGM in respectof Sale Towers (upto 15th Floor) of A Wing and upto plinth level of B Wing in the saidproject.
"DB Skypark"near international airport Andheri is being developed in througha joint venture on approx. 1.5 acres of land with 6 wings. The project site is at verystrategic location and is well connected by way of Metro road network and railways. Theconstruction work is ongoing at an accelerated pace as per approved plans.
Another residential housing project is on the verge of implementation at Dahisarrevenue village Mahajanwadi Dist. Thane on the outskirts of Mumbai with the inductionof an entity in which Man Infraconstructions Ltd. has substantial stake in Conwood DB JVof which your Company is a member. The JV will share revenue with the said entity whichhas undertaken the development of the said project.
"Solitaire Business Hub" in Yerwada Pune- The construction on this project isfast paced with the completion of the RCC structure and the ongoing progress of theproject is satisfactory.
The Turf Estate project in Mumbai is awaiting certain approvals and is one of thelargest projects of the Company which will offer substantial revenue potential in future.Two project sites at (i) Bandra Reclamation in which your Company has substantial stakethrough a wholly owned subsidiary company which is a partner in the firm Om MetalCorporation and (ii) Marine Lines through another company viz. Marine Drive Hospitality& Realty Pvt. Ltd. in which your Company has considerable economic interest have beenawaiting certain approvals for launching. The Project "Orchid Centre" acommercial venture and a residential project at Pune is being executed by a subsidiary ofthe said Marine Drive Hospitality & Realty Pvt. Ltd.
Marine Drive Hospitality & Realty Pvt. Ltd. a Company in which your Company hasconsiderable economic interest has through one of its WOS is developing a ConventionCentre and Hotel project at Aerocity near New Delhi International Airport.
The Auditors have qualified their report on certain matters. The details of suchqualifications as mentioned in their Report with your Directors response thereon areas under:
(i) Para 4 in the Standalone Financial Statements (SFS) and Para 4(b) (Note No.28(c)(i) in the Consolidated Financial Statements (CFS) refers to share of profit of Rs.1.92 Lacs from an investment in a Limited Liability Partnership (LLP) and theunaudited financial results of such LLP approved by only three partners representing theCompany out of the total six partners of the LLP. Your Directors have to state that theCompany has been taking steps to complete the process and its impact on the Companysfinancial statements are not significant or material.
(ii) Para 4(a) of CFS(Note No. 28(a)(i) to the CFS) refers to unaudited financialresults of a subsidiary included in the financial results of the Company but which areunapproved by its Board of a subsidiary company your Directors are of the view that therewould not be any material impact on the financial statements arising out of its adoptionat a later point in time and the process of adoption shall be completed in due course.
(iii) Para 4(c) of CFS [Note No. 33(B)(iv)] and Para 4(d) of CFS (Note No. 52) refersto one of the subsidiaries not having accounted for its share of profit/loss in aPartnership Firm for FY 2015-16 and hence the CFS of the Company have not taken intoconsideration these results of the said Firm in the consolidation. Your Directors have tostate that the said subsidiary is taking steps to obtain the final statement of accountsof the said firm and the impact thereof on the Companys CFS is not material in theopinion of the Directors.
The Statutory Auditors in their Report have drawn attention of the members to certainnotes to the Financial Statements as a matter of emphasis. While the said notes are selfexplanatory your Directors offer the following clarifications and further explanations onthe same;
1. Para (i) (Note No. 11.3) of SFS and Para (i) (Note No. 11.3) of CFS refers to costincurred on the beautification of the Bandra Worli Sea Link project and is selfexplanatory.
2. Para (ii) (Note No. 12.4) of SFS and Para (ii) (Note No. 12.2) of CFS: The Auditorshave referred to certain investments made in the Preference Share Capital of an entity foran amount of Rs. 142769.61 lacs and Rs. 146212.88 lacs respectively appearing in the SFSand CFS. This relates to investments made in the Preference Share Capital of Marine DriveHospitality & Realty Pvt. Ltd. both in the form of Redeemable Compulsorily ConvertiblePreference Share Optionally Convertible Cumulative Preference Shares and CompulsorilyRedeemable Convertible Preference Shares which bear specified rates of dividend by yourCompany. This Company is proposing to implement the project in real estate includingcommercial and residential activities and also hospitality segment and hence theseinvestment is considered as strategic and in the long term interests of your Company. YourDirectors keep the overall economic interests of the Company while making suchinvestments.
3. Para (iii) (Note 14.2) of SFS and Para (iii) [Note No. 13.2] of CFS: Attention hasbeen drawn to payments made to several related parties towards security deposits of Rs.35755.16 lacs for acquisition of development rights. As stated in the said note yourCompany is in the process of obtaining necessary approvals for the development of the saidproperties which have significantly higher current market values than the carrying costsand would reap adequate profitability on substantial completion of the respectiveprojects.
4. Para (iv) [Note 17(1)] of SFS and Para (iv) [Note No. 16(1)] of CFS: Auditors havereferred to the costs incurred on various projects reflected in the financial statementsunder the head Inventories at lower of the actual costs incurred or the realizable valueas reported by the Management. All these projects are under initial stage of developmentand are capable of fetching higher net realizable value greater than the cost.
5. Para (v) [Note No. 30(B)] of SFS and Para (viii) [Note No. 30(B)] of CFS refers tothe guarantees and Securities amounting to Rs. 3894.43 crores and Rs. 2406.79 crores given/ provided by the Company/ Group respectively for loans taken by the subsidiary andassociate companies and also promoter group companies and few other entities while theCompany was a private limited company. All these companies are honouring the commitmentsin respect of servicing and/or repayments and the outstanding exposure has substantiallybeen reduced on account of repayments by these entities. The above Guarantees aresubstantially secured and supported by counter guarantees of the promoters in favour ofthe Company and are adequately secured by the promoters of the Company and these are notexpected to result into any financial liability on the Company.
6. Para (vi)(a) and (b) [Note Nos. 31(A)(iii)(1) and (iii)(2)] of SFS and Para (xi)(a)and (b) [Note Nos. 33 (A)(i)(b) and 33(A)(iii)] of CFS refers to disclosures in theaudited financial statements of the firm Dynamix Realty regarding outstanding receivableswhich is good for recovery and the allegations in the 2G Spectrum case which issub-judice. These notes are self-explanatory.
7. Para (vii) (Note Nos. 32 to 36A) of SFS and Para (ix) [Notes Nos. 3132(a)33(B)(viii) (ix) and (x)] of CFS refer to loans/ advances and investments insubsidiary/associate company and there are ongoing litigation in respect of their projectsand matters are sub-judice. These notes are self explanatory.
8. Para (viii) (Note No. 36b) of SFS and Para (x) [Note No. 32(b)] of CFS refer to noadjustment having been made by the Company in the value of inventory pending outcome ofthe matter referred by the Company to Hon. Supreme Court. As detailed in the said Notesthis is in respect of a project under development having a value of Rs. 3513.39 lacs(forming part of inventory). The Bombay High Court has ordered payment of money under theaward as and by way of compensation of Rs. 728.88 lacs towards land acquisition. TheCompany has moved Supreme Court against such order of the High Court seeking furthercompensation of Rs.2168.13 lacs. Your Directors also expect to recover amounts paid toother parties towards the project. Pending outcome of the matter no adjustments have beenmade in the accounts in this regard.
9. Para (ix) (Note No 38) of SFS and Para (xxii) (Note no. 40B) of CFS refer to MATcredit entitlement of Rs. 358 Lacs which is based on future performance of the Companyand will be availed for set off in future years.
10. Para (x) of SFS (Note No. 39) and Para (xxi) (Note No. 34) of CFS: This relates toinvestments in the shares / capital of the subsidiaries / associates / firms etc and alsoproject advances from time to time towards their projects for various activities. Theseentities are having negative net worth since they are in the early stage of real estatedevelopment. These investments are strategic in nature and long term. Your Directors areof the firm view that these projects which are of medium to long term nature would fetchresults in the future to justify the initial investments and also yield reasonable andadequate return on these investments and deployment of funds.
11. Para (xi) (Note No. 40) of SFS and Para (xxv) (Note No. 47) of CFS refer to thefact that the Company was in receipt of Summons from Special Court for Prevention of MoneyLaundering Act (PMLA) Mumbai as one of the accused in connection with a complaint filedby Enforcement Directorate. The Honble Court has also summnoned one of the KMPs ofthe Company as one of the accused as per the said complaint. The matter in relation to theCompany and the KMP involves certain advances given by the Company in ordinary course ofits business to another Company which was subsequently refunded upon cancellation of theundertaking. The matter is sub-judice and the Company does not expect any financialliability.
12. Para (xii) (Note No. 43) of SFS and Para (xxiii) (Note No. 42) of the CFS: Withregard to the provisional attachment upheld by the Enforcement Directorate (ED) involvingbank balance two flats belonging to the Company and loans given to a subsidiary companyof Marine Drive Hospitality & Realty Pvt. Ltd. (Formerly D B Hospitality PrivateLimited) these relates to the 2G case in which the Managing Directors of the Company andtwo of its Key Management Personnel have been charged with commission of offences based onthe investigation by CBI. The Adjudicating authority has taken over the bank balance ofRs. 68.92 Lakhs and has been given ROCCP shares of Marine Drive Hospitality & RealtyPvt. Ltd. in the name of the Company for Rs. 50.40 crores. The attachment order iscontested by the company in the Appellate tribunal. The matter is sub-judice. The Companyis confident that the outcome of the cases will have no adverse impact on the Company andits functioning.
13. Para (xiii) (Note No. 49) of SFS: This note is self explanatory. The AOPs in whichyour company is a member have projects for execution on which expenses have been incurredby the said AOPs. Pending the triggering of the threshold limits and recognition of incomein the said projects the expenses incurred on the projects have been carried to theirbalance sheets as losses and have not been apportioned to the members of the AOP. Theseprojects would fetch adequate profits to wipe out the losses in the AOP and would beapportioned to the members of the AOP at a later date when incomes are recognized.
14. Para (v) (Note No. 19.3) of CFS refers to the loans and advances by one of thesubsidiaries to a contractor which has been confirmed by them and is good for recovery asstated in its financial statements.
15. Para (vi) (Note No. 28(b)(i) of CFS refers to financials of Turf Estate JV anAssociation of Persons (AOP) where the Company is one of the two partners. Such financialstatements of the AOP are yet to be approved by the other partner as the proposal tochange profit/loss arrangement to area sharing framework in the said AOP is undernegotiation with the other partner.
16. Para (vii) [Note No. 29(i)] of CFS refers to the notice received by the associatecompany from one of the land owners for cancellation of Development Agreement and the saidcompany is in process of taking legal opinion and replying to the said notice. The amountwhich can be forfeited is Rs. 185367/-.
17. Para (xii) [Note no. 33(A)(v)] of CFS refers to the classification of amount of Rs.23.70 crores advanced by a jointly controlled entity (JCE) to few parties for acquisitionof the occupancy rights on its behalf which would be transferred to the JCE. The saidnote is self explanatory.
18. Para (xiii) [Note no. 33(A)(vi)] of CFS refers to status of redemption / nonconversion of the Preference Shares (ROCCPS) issued by the jointly controlled entity. Thematter is under discussion with the shareholders of the said shares and would be actedupon on reaching finality with them.
19. Para (xiv) [Note no. 33(A)(vii)] of CFS and Para (xv) [Note no. 33(A)(viii)] of CFSrefer to compensation to occupants and accounting of compensation by one of the jointventures of the Company which are self explanatory.
20. Para (xvi) [Note no. 33(B)(i)] of CFS refers to loan of Rs. 8.14 crores granted byone of the subsidiary to a company whose debts amount to Rs. 22.81 crores have beenacquired from Yes Bank Ltd. Your Directors are of the opinion that the loan outstanding asof year end though subject to confirmation is good for recovery.
21. Para (xvii) [Note no. 33(B)(ii)] of CFS refers to certain debts and all the righttitle and interest in and to the said debts along with the underlying security interestacquired by one of the subsidiary companies by way of assignment from Yes Bank Ltd. byexecuting Deed of Assignments. Your Directors believe that the said debts are adequatelysecured with the underlying security interest (including certain immovable properties) andthe same debts are good for recovery though the balances are subject to confirmation andcreation of underlying security interest in favour of the said subsidiary company is inprocess.
22. Para (xviii) [Note no. 33(B)(iii)] of CFS refers to the status of amounts due toHousing Development Infrastructure Ltd. (HDIL) which is self explanatory.
23. Para (xix) [Note no. 33(B)(v)] of CFS refers to a writ petition filed against theCompany and government authorities by Jijamata Nagar Sankalp Co-Op. Housing Society andthe matter is detailed in the said note. The Company is constantly observing the changesand progress to the Draft DP 2034 and is confident that the Final Plan would remove allthe anomalies.
24. Para (xx) [Note no. 33(B)(xiii)] of CFS refers to the litigation on salt pan landowned by the Company. The note is self explanatory. As stated the Company will defend itstitle.
Transfer to Reserve
It is not proposed to transfer any amount to reserves out of the profits earned duringFY 2015-16.
With a view to conserve resources to meet the fund requirements for Companysprojects your Directors have not recommended any dividend for the year 2015-16.
Change in Share Capital of the Company
Pursuant to the Scheme of Amalgamation between Gokuldham Real Estate DevelopmentCompany Pvt. Ltd. and Company as mentioned in para of amalgamation above the followingchanges have happened in the capital structure of the Company during the year underreview:
(i) the Authorised Capital of the Company has been increased from Rs. 3000000000/-divided into 298500000 equity Shares of Rs. 10/- each and 1500000 Preference Shares ofRs. 10/- each to Rs. 3450000000/- divided into 270000000 Equity Shares of Rs. 10/-each and 75000000 Redeemable Preference Shares of Rs 10/- each.
(ii) the issued subscribed and paid-up equity share capital has been increased fromRs. 2432587820/- divided into 243258782 equity shares of Rs. 10/- each to Rs.3150145220/- divided into 243258782 equity shares of Rs. 10/- each and 71755740Preference Shares of Rs. 10/- each.
Subsidiaries Associate Companies and Joint ventures:
During the year under review your Company has ceased to be Partner (with 50% share inprofit/loss) in 6 Limited Liability Partnerships namely Daund Warehousing Developers &Builders LLP Saswad Warehousing Developers & Builders LLP Ahmednagar WarehousingDevelopers & Builders LLP Solapur Warehousing Developers & Builders LLP LaturWarehousing Developers & Builders LLP and Aurangabad Warehousing Developers &Builders LLP with effect from 30th June 2015 as there was no businessactivity undertaken/to be undertaken in near future by the said LLPs. Furtheras mentionedabove Gokuldham Real Estate Development Company Private Limited an erstwhile subsidiarycompany has ceased to be Subsidiary of the Company by virtue of its amalgamation with theCompany.
The details of Subsidiary/Associate companies are provided in extract of Annual Return(Form No. MGT 9) which forms part of this Directors Report (Annexure A).
The Consolidated financial statements have been prepared pursuant to the applicableAccounting Standards SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 and includes the financial information of its subsidiaries/associates and jointventure entities / partnership firms in which your Company holds stake. The financialstatements of the subsidiary companies will also be available for inspection by any memberat the registered office of the company and at the Companys websitewww.dbrealty.co.in. Copies of the audited financial statements of the subsidiaries can besought by any member by making a written request in this regard.
In accordance with the provisions of Section 129(3) of the Act read with the Companies(Accounts) Rules 2014 a statement containing salient features of the financialstatements of the Companys subsidiaries associates and joint ventures in Form AOC-1is attached to the consolidated financial statements of the Company. The statement alsoprovides the details of performance and financial positions of each of the subsidiaries.
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report for the year under review as stipulatedin SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is presentedin a separate section forming part of this Annual Report (Annexure B).
Corporate Governance and Shareholders Information:
In compliance with the Listing Regulations a separate report on Corporate Governancealong with a certificate from the Auditors on its compliance forms an integral part ofthis report.(Annexure C)
During the year under review your Company has not accepted any deposit within themeaning of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 (including any statutory modification(s) orre-enactment(s) for the time being in force).
Directors and Key Managerial Personnel (KMPs)
1. Directors retiring by rotation
In terms of Section 152 of the Companies Act 2013 and the Articles of Association ofthe Company Mr. Shahid Balwa and Mr. Jayvardhan GoenkaDirectors who are liable to retireby rotation at the forthcoming Annual General Meeting andbeing eligible offer themselvesfor reappointment.
2. Cessation of Independent Director
Mr. Omprakash Agrawal Independent Director of the Company has resigned from the officeof the Director with effect from the closing of business hours on 27th May2016 due to his other pre-occupations.
The Board places on record its appreciation for the valuable services rendered by Mr.Omprakash Agrawal during his tenure as Independent Director of the Company.
3. Independent Directors Statement:
All independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149 of the Companies Act 2013 and Regulation 16of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and were placed at the Board Meeting held on May 27 2016.
4. Key Managerial Personnel
Mr. Vinod Goenka Chairman and Managing Director and Mr. Shahid Balwa Vice Chairmanand Managing Director Mr. Vipul Bansal Chief Executive officer; Mr. Nagamallesh GattuChief Financial Officer and Mr. S.A.K. Narayanan Company Secretary of the Company are KeyManagerial Personnel as per the provisions of the Companies Act 2013 and were already inoffice before the commencement of the Companies Act 2013.
Performance Evaluation of the Directors Committee and Board
The performance of the Directors is evaluated on the basis of their contributions atthe meetings strategic inputs for the performance and growth of the Company among others.The Directors have carried out performance evaluation on annual basis of DirectorsCommittee and the Board. The Nomination and Remuneration Committee of the Board has laiddown the performance evaluation framework under which performance of every Director isevaluated. The framework also provides the manner in which the Directors as a collectiveunit in the form of Board Committees and the Board function and perform.
Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.However the Company being a company engaged in the business of providing infrastructuralfacilities is exempt from the applicability of the relevant provisions of the CompaniesAct 2013.
Contracts or Arrangements with Related Parties
All related party contracts/arrangements/transaction of the nature as specified in Sec188(1) of the Companies Act 2013 entered during the financial year were in the ordinarycourse of the business of the Company and were on arms length basis. There were nomaterially significant related party transactions entered by the Company with PromotersDirectors Key Managerial Personnel or other persons which may have a potential conflictwith the interest of the Company. In accordance with Section 134(3)(h) of the CompaniesAct 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 the particulars ofcontract or arrangement entered into by the Company with related parties (for which thecompany has obtained shareholders approval by passing resolution(s) through postalballot) referred to in Section 188(1) is provided in Form AOC-2 (Annexure D).
All such Related Party Transactions are periodically placed before the Audit Committeefor approval whenever applicable. The details of the contracts or arrangements withrelated parties for the financial year under review are given in the notes to thefinancial statements.
The policy on materiality of Related Party Transactions and also on dealing withRelated Party Transactions as approved by the Audit Committee and the Board of Directorsis uploaded on the website of the Company and the link for the same is http://www.dbrealty.co.in.investor.html#policy.
Internal Financial Control Systems and their Adequacy
The Company has adequate system of internal control to safeguard and protect from lossunauthorized use or disposal of its assets. The Company is following all the applicableAccounting Standards for properly maintaining the books of accounts and reportingfinancial statements. The Company continues to ensure proper and adequate systems andprocedures commensurate with its size and nature of its business. Your Directors have alsoappointed a professional firm to examine the adequacy of these controls and the work ofdesigning controls documenting risks control matrix for each area of business operationand implementation thereof.
During the year under review no material or serious observations has been received fromStatutory and Internal Auditors of the Company on the inefficiency or inadequacy of suchcontrols. The Internal Financial Control with reference to financial statements asdesigned and implemented by the Company are adequate and the Auditors Report on theInternal Financial Control over financial reporting under clause (i) of sub section 3 ofsection 143 of the Companies Act 2013 is given in Annexure 2 to the AuditorsReport.
Committees of the Board:
The composition of the various committees of the Board of Directors is stated in theCorporate Governance Report annexed to this Report.
The Nomination and Remuneration Policy provides for appropriate composition ofExecutive Non-Executive and Independent Directors on the Board of Directors of yourCompany along with criteria for appointment and remuneration including determination ofqualifications positive attributes independence of Directors and other matters asprovided under sub-section (3) of Section 178 of the Companies Act 2013. The remunerationpaid by the Company is as per the terms laid out in the Nomination and Remuneration Policyof your Company.
Pursuant to the provisions of section 177(9) & (10) of the Companies Act 2013 aVigil Mechanism for directors and employees to report genuine concerns has beenestablished. The policy comprehensively provides an opportunity for any employees andDirectors to raise any issue concerning breaches of law accounting policies or any actresulting in financial or reputation loss and misuse of office or suspected or actualfraud. The policy provides for a mechanism to report such concerns to the Audit Committeethrough specified channel. The Vigil Mechanism Policy has been uploaded on the website ofthe Company at www.dbrealty.co.in. invetor.html#policy
Risk Management Policy
The Board of Directors reviews the risk management policy from time to time and thesaid policy aims at enhancing shareholders value and providing an optimumrisk-reward trade off. The risk management approach is based on a clear understanding ofthe variety of risks that the organization faces disciplined risk monitoring andmeasurement and continuous risk assessment and mitigation measures.
Corporate Social Responsibility Committee
As per the provisions of Section 135 of the Companies Act 2013 a Corporate SocialResponsibility (CSR) Committee constituted by the Board of Directors exits.
For details of the composition of the Committee the CSR policy and other relevantdetails that are required to be disclosed under the provisions of Section 134(3)(o) of theCompanies Act 2013 and the Companies (Corporate Social Responsibility Policy) Rules2014 kindly refer Annexure E thereto which forms part of this report.
Extracts of Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 the extracts of the Annual Return as at March 31 2016 is annexed and formspart of this report. (Annexure A)
Number of Board Meetings during 2015-16
The Board met five times during the financial year 2015-16 and the details arementioned in the Corporate Governance Report which is annexed to the Directors Report.
Directors Responsibility Statement
In terms of provisions of Section 134(5) of the Companies Act 2013 your Directorsconfirm that:
a) In the preparation of the annual accounts for the year ended 31st March2016 the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;
b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2016 and of the lossof the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) they have prepared the annual accounts on a going concern basis.
e) they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively
f) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The first term of M/s Haribhakti & Co LLP Chartered Accountants consisting of 5consecutive years (including 3 years prior to implementation of the new Companies Act2013) as Statutory Auditors shall expire on the conclusion of the ensuing Annual GeneralMeeting of the Company.
It is therefore necessary to re-appoint M/s Haribhakti & Co LLP CharteredAccountants (Firm Registration No.103523W) as Statutory Auditor for the second term of 5consecutive years commencing from the conclusion of the ensuing Annual General Meetingtill the conclusion of the 15th AGM to be held in the year 2021. However theirappointment as Statutory Auditors of the Company shall be subject to ratification by themembers at every AGM. The Company has received a certificate from the said Auditors thatthey are eligible to hold office as the Auditors of the Company and are not disqualifiedfor being so appointed.
The Board of Directors of your Company on the recommendations made by the AuditCommittee at its meeting held on 27th May 2016 has approved the appointment ofM/s. Joshi Apte & Associates Cost Accountants (Firm Registration No. 00240) as theCost Auditor of your Company to conduct the audit of cost records for the financial year2016-17. The necessary resolution for such appointment is included in the notice of theensuing Annual General Meeting.
Secretarial Auditors and Secretarial Audit Report
Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 your Company hadappointed M/s Vicky Kundaliya & Associates Practicing Company Secretaries Mumbai asits Secretarial Auditors to conduct the secretarial audit of the Company for the FY2015-16 The Company has provided all assistance and facilities to the Secretarial Auditorfor conducting their audit. The Report of Secretarial Auditor for the FY 2015-16 isannexed to this report. (Annexure F).
The said report does not contain any qualification or adverse remark except thefollowing:
i) The Company has passed circular resolution on 10.03.2016 after slight delay beyondspecified days from the date of circulation as per the Secretarial Standards. As alreadymentioned in the report your Directors have to state that though the resolution wasapproved by majority of Directors within stipulated time as a matter of good corporategovernance the Company passed the resolution after tendering the necessary clarificationsought by one of the independent Director and after receipt of approval by the saidIndependent Director.
ii) The Company has complied with the provisions regarding closure of trading window asper SEBI (Prohibition of Insider Trading Regulation) 2015 in all Board Meetings excepti.e. one Board meeting wherein the Company has closed the Trading window and dulyintimated to all the insiders but inadvertently missed the intimation to the StockExchange. In this regard your Directors have to state that this was only an inadvertentlapse on account of human error and the Company will take extra care for all futurefilings in this connection.
iii) The Company has nominal unspent amount of Rs. 2.45 lacs during the year towardscorporate Social Responsibility for which the Company has considered certain expendituresbeing incurred an proposed to be incurred but the accounting effects thereof are yet to begiven in the financial statements in the coming years which is self explanatory.
1. Conservation of Energy Technological Absorption Foreign Exchange Earnings andOutgo
Your Company is not covered by the schedule of industries which are required to furnishthe information pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule(8) of the Companies (Accounts) Rules 2014
The Company has not imported any technology or carried out any business of export orimport and therefore the disclosure requirement against technology absorption are notapplicable. The details of Foreign Exchange outgo are as under:
Expenditure in Foreign Currency:
Stand alone Amounts.
|PARTICULARS ||Fiscal 2016 (Rs.) ||Fiscal 2015 (Rs.) |
|Professional Fees ||NIL ||271589 |
2. Particulars of Employees:
In accordance with the provisions of Section 197 (12) of the Companies Act 2013 readwith the Companies (Appointment and Remuneration of the Managerial Personnel) Rules 2014the names and other particulars of the employees are to be set out in the DirectorsReport as an addendum. However in line with the provisions of Section 136 (1) of the Actthe Report and Accounts herein are being sent to all the members excluding the aboveinformation. Those interested in obtaining a copy of the said statement may write to theCompany Secretary at the Registered Office of the Company. The other remuneration detailsof Directors / KMPs / Employees are disclosed in Annexure G attached with thisDirectors Report.
Your Company has not issued any shares with differential voting rights.
Your Company has not issued any sweat equity shares.
There was no revision in the financial statements.
There were no material changes or commitments affecting the financial position of theCompany between the financial year end and date of this report.
There were no shares held by trustees for the benefit of employees and hence nodisclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules 2014has been furnished.
The Company has not received any complaints under Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
No significant and material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and Companys operations in future.
Your Directors wish to place on record their appreciation to the Banks FinancialInstitutions Government Authorities customers and other business associates for theirsupport and co-operation and wish to place on record their gratitude to the shareholdersand the investors for their trust support and confidence in the Company. The Board alsoplaces on record its appreciation for the dedication displayed by employees at all levels.
| ||On behalf of the Board of Directors |
| ||For D B Realty Limited |
|Mumbai ||Vinod K. Goenka |
|27th May 2016 ||Chairman & Managing Director |