D B REALTY LIMITED
Your Directors have pleasure in presenting the11th Annual Report on thebusiness and operations of the Company along with the audited financial statements for thefinancial year ended 31st March 2017.
|Financial Highlights || || || || |
| || || || ||(Amount Rs.) |
|Particulars ||Standalone ||Consolidated |
| ||F.Y.2016-17 ||F.Y.2015-16 ||F.Y.2016-17 ||F.Y.2015-16 |
|Revenue from Operations ||137790940 ||1770350525 ||1366790901 ||2059026506 |
|Other Income ||1250241437 ||765071352 ||1368501845 ||1396008995 |
|Total Income ||1388032377 ||2535421877 ||2735292746 ||3455035501 |
|Expenses || || || || |
|Operating Expenses ||441611493 ||1081197492 ||2226843489 ||2647419406 |
|Depreciation and Amortization ||50637874 ||50687147 ||107902473 ||143672081 |
|Total Expenses ||492249367 ||1131884639 ||2334745962 ||2791091487 |
|Profit Before Finance Cost and Tax ||895783010 ||1403537238 ||400546784 ||663944014 |
|Finance Cost ||528536621 ||501219550 ||956009803 ||861452461 |
|Profit/ Loss before extraordinary items and tax ||367246389 ||902317688 ||(555463018) ||(197508448) |
|Exceptional Items ||- ||75000000 ||- ||(75000000) |
|Profit/ Loss after extraordinary items and tax ||367246389 ||827317688 ||(555463018) ||(272508448) |
|Share of Profit/ Loss from associates and joint ||- ||- ||58895561 ||80242890 |
|ventures || || || || |
|Profit Before Tax ( PBT) ||367246389 ||827317688 ||(496567457) ||(192265558) |
|Tax Expense ||352977253 ||299702273 ||(269801826) ||(37307240) |
|Profit after Tax (PAT) ||14269135 ||527615415 ||(766369283) ||(229572798) |
|Other Comprehensive Income ||(395300974) ||(129640569) ||(421152588) ||(133911662) |
|Total Comprehensive Income/ Loss for the year ||(381031838) ||397974846 ||(1187521871) ||(363484460) |
The financial statements for the year ended 31 st March 2017 are the first theCompany has prepared under Ind AS (Indian Accounting Standards). The financial statementsfor the year ended 31 st March 2016 have been restated in accordance with IndAS for comparative information.
Status of Projects of the Company / its subsidiaries
"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 as per revised plans.
"Project Bandra" (now known as "Ten BKC") at Bandra is havingstrategic location near Bandra Kurla Complex. It is an iconic residential project thatoffers variety of spacious residential apartments. The project is spread over 5 acres ofland one of largest integrated residential complex in upscale Bandra east in MumbaiSuburbs. The construction work of the said project which is being developed in a jointventure with Radius Group is witnessing impressive progress as per approved plans.
"DB Ozone" at Dahisar is a large residential project and the civil structurework for sale and rental Building has been completed and handing over of possession of theflats for fit outs has commenced.
"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. The construction work has commenced as per approvedplans.
"DB Skypark" near international airport Andheri is being developed inthrough a joint venture on approx. 1.5 acres of land with
6 wings. The project site is at very strategic location and is well connected by way ofMetro road network and railways. The construction work is going on as per approved plans.
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.Project site at Bandra Reclamation in which your Company has substantial stake through awholly owned subsidiary company which is a parter in the firm Om Metal Corporation hasbeen awaiting certain approvals for launching. Further Project site at Marine Lines beingexecuted through another company viz. Marine Drive Hospitality & Realty Pvt. Ltd.(MDHRPL) in which your Company has considerable economic interest has got its plansapproved from competent statutory authority. MDHRPL is developing a residential tower andits WOS developing a Convention Centre and Hotel project at
Aerocity near New Delhi International Airport in tie up with a reputed partner.
The Auditors have qualified their report on certain matters. The details of suchqualifications as mentioned in their Report with your
Directors' response thereon are as under:
1. Para 4(a) of the Audit Report on the Standalone Financial Statements (SFS) andConsolidated Financial Statements (CFS) read with Note Nos. 62 and 60 of SFS and CFSrespectively refer to Financial Guarantees issued by the Company to banks / financialinstitutions on behalf of various entities including Subsidiaries Joint Ventures andother entities which have not been re-measured at fair value.YourDirectorsstatethatthesefinancialguarantees were issued in terms of the sanctionletters by banks/financial institutions which generally also prohibited the Company tocharge any commission on giving such guarantees and hence in compliance with the terms ofthe sanction letters/loan documents no commission was charged on such financialguarantees which were provided as collateral securities. The notes referred to in theReport are self explanatory.
2. Para 4(b) of the Audit Report on both the SFS and CFS read with Note No. 54 and 49of SFS and CFS respectively refer to evaluation of provision for impairment for creditlosses in the case of loans and advances to certain subsidiaries and an associate whichhave incurred losses and have negative net worth. Your Directors state that the Companyhas economic interests in these entities which are at different stages of execution of theProjects where revenue recognition has not started and the Company is confident ofrecovering the same. Such loans and advances are towards the costs to be incurred / beingincurred by these entities for their projects and to facilitate proper execution and willbe repaid in due course.
3. Para 4(c) and (d) of the Audit Report on CFS read with Note Nos. 48B(iv) and 62 ofCFS refer to non accounting of the profit/ loss by the subsidiary of a firm in which it ispartner since the financial statements of the said firm for the F Y 2016-17 have not beenmade available by the respective firm. Your Directors state these financial would not haveany material or significant impact on the CFS of your Company. The said subsidiary companyhas taken steps with the said firm to get their financial statements for the year andaccount for its share and also consolidate in the statements for the subsequent period(s).
4. Para 4(e) of the Audit Report on CFS read with Note No. 47(c) refer to nonconsolidation by the Company of another company and its subsidiaries/associates etc onthe basis of control assumed to be exercised by your Company on the same under theapplicable Ind AS 110. Your Directors state that the said Company is not under the controlof your Company and is managed by its own independent Board of Directors with a nominee ofa strategic investor/financial institution having affirmative and super majority voting onall material transactions and hence control does not vest with the Company through itsinvestments or otherwise. The investments by your Company is also in equity as well asdifferent categories of preference shares of different maturities. Hence in the opinionof the Management this is not required to be consolidated. The same is also detailed inNote 2(A)(1.1)(d) in Significant Accounting Judgements Estimates and Assumptions.
The Statutory Auditors have also drawn attention of the members in their Reports tocertain Notes. While the said notes are self explanatory your Directors offer thefollowing clarifications and further explanations on the same as under:
(a) Para 6(a) (Note No.53 (b)) of SFS and Para 6(i) [Note No. 47(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). Pending outcome of the matter no adjustments have been madein the accounts in this regard. (b) Para 6(b) of SFS and Para 6((iv) of CFS (Note Nos.7.2of SFS and 8.3 of CFS: The Auditors have referred to certain investments made in thePreference Share Capital of an entity for an amount of Rs. 56138.58 lacs. This relates toinvestments made by your Company in the Preference Share Capital of Marine DriveHospitality & Realty Pvt Ltd in the forms of Compulsorily
Convertible Cumulative Preference Shares Redeemable Optionally Convertible CumulativePreference Shares and
Cumulative Redeemable Convertible Preference Shares which bear specified rates ofdividend. This to implement the project in real estate including commercial andresidential activities and hence this investment is considered as strategic and in thelong term interests of your Company. (c) Para 6(c) of SFS and Para 6(v) of CFS (Note Nos.9.2 of SFS and Nos. 10.2 & 13.2 of CFS]: Attention has been drawn to payments made toseveral parties towards security deposits of Rs.11381.70 lakhs for acquisition ofdevelopment rights. As stated in the said note your Company is in the process ofobtaining necessary approvals for the development of the said properties which havesignificantly higher current market values than the carrying costs and would reap adequateprofitability on substantial completion of the respective projects.
(d) Para 6(d) and (h) of SFS and Para 6 (vi) and (vii) of CFS [Note 13(i) and 63 of SFSand Note Nos. 14.1 and 57 of CFS: Auditors have referred to the costs incurred on variousprojects reflected in the financial 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. The saidnotes are self explanatory.
(e) Para 6(e) (Note Nos.49 to 53(a)) of SFS and Para 6(iii) [Notes Nos. 46 and 47(a)]of CFS refer to loans/advances and investments in subsidiary/associate company(ies) andthere are ongoing litigation in respect of their projects and matters are sub-judice.These notes are self explanatory. (f) Para 6(f) of SFS and Para 6 (ix) of CFS (Note No. 54of SFS and Note No. 49 of CFS) : This relates to investments in the shares / capital ofthe subsidiaries / associates / firms etc and also project advances from time to timetowards their projects for various activities. These entities are having negative networth since they are in the early stage of real estate development.
These investments are strategic in nature and long term. Your Directors are of the firmview that these projects which are of medium to long term nature would fetch results inthe future to justify the initial investments and also yield reasonable and adequatereturn on these investments and deployment of funds.
(g) Para 6(g) (Note No. 55) of SFS and Para 6(ii) (Note No. 58) of CFS refer to thefact that the Company was in receipt of
Summons from Special Court for Prevention of Money Laundering Act (PMLA) Mumbai as oneof the accused in connection with a complaint filed by Enforcement Directorate. TheHon'ble Court has also summoned one of the KMPs of the Company as one of the accused asper the said complaint. The matter in relation to the Company and the KMP involves certainadvances given by the Company in ordinary course of its business to another Company whichwas subsequently refunded upon cancellation of the undertaking. The matter is sub-judiceand the Company does not expect any financial liability
(h) Para 6(i) (Note No.57) of SFS and Para 6(viii) (Note No. 54) of the CFS: Withregard to the provisional attachment upheld by the Enforcement Directorate (ED)involving bank balance two flats belonging to the Company and loans given to a subsidiarycompany of Marine Drive Hospitality & Realty Pvt. Ltd. (Formerly D B HospitalityPrivate Limited) these relates to the 2G case in which the Managing Directors of theCompany and two of its Key Management Personnel have been charged with commission ofoffences based on the investigation by CBI. The Adjudicating authority has taken over thebank balance of
Rs. 68.92 Lakhs and has been given ROCCP shares of Marine Drive Hospitality &Realty Pvt. Ltd. in the name of the Company for Rs. 73.67 crores. The attachment order iscontested by the company in the Appellate tribunal. The matter is sub-judice. The
Company is confident that the outcome of the cases will have no adverse impact on theCompany and its functioning.
(i) Para 6(j) (Note No. 58) 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. (j)Para 6(k)(i) and (ii) [Note Nos. 48(A)(iii)(1) and (iii)(2)] of SFS and Para 6 (xii)(a)and (b) [Note Nos. 48 (A)(i)(b) and 48(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.
(k) Para 6(l) [Note No.48 (B)(ii)] of SFS and Para 6 (xiii) [Note No. 48(A)(viii)] ofCFS refer to an appeal filed by a firm in which Company is a partner against the Order ofAirport Authority of India for demolishing certain floors. The said note is selfexplanatory.
(l) Para 6(xi) (Note No. 48(B)(xix) 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.
(m) Para 6(x) of CFS [Note no. 48(B)(xiii) of CFS] refers to the litigation on salt panland owned by the Company. The note is self explanatory. As stated the Company willdefend its title. (n) Para 6(xx) [Note no. 48(A)(vii)] of CFS refer to compensation tooccupants and accounting of compensation by one of the joint ventures of the Companywhich are self explanatory.
(o) Para 6(xiv) of CFS [Note no. 48(B)(v)] of CFS] refers to a writ petition filedagainst the Company and government authorities by Jijamata Nagar Sankalp Co-op. HousingSociety and the matter is detailed in the said note. The Company is constantly observingthe changes and progress to the Draft DP 2034 and is confident that the Final Plan wouldremove all the anomalies.
(p) Para 6(xv) of CFS [Note no. 48(B)(i) of CFS] refers to loan of Rs. 8.14 croresgranted by one of the subsidiary to a company whose debts amount to Rs. 22.67 crores havebeen acquired from Yes Bank Ltd. Your Directors are of the opinion that the loanoutstanding as of year end though subject to confirmation is good for recovery.
(q) Para 6(xvi) of CFS [Note no. 48(B)(ii) of CFS] refers to certain debts and all theright title and interest in and to the said debts along with the underlying securityinterest acquired by one of the subsidiary companies by way of assignment from Yes BankLtd. by executing Deed of Assignments. Your Directors believe that the said debts areadequately secured with the underlying security interest (including certain immovableproperties) and the same debts are good for recovery though the balances are subject toconfirmation.
(r) Para (xvii) of the CFS [Note no. 48(B)(iii)] of CFS] refers to the status ofamounts due to Housing Development Infrastructure
Ltd. (HDIL) which is self explanatory.
(s) Para 6(xviii) of CFS [Note no. 48(A)(vi)] of CFS] refers to status of redemption /non conversion of the Preference Shares (ROCCPS) and Compulsorily Convertible PreferenceShares issued by the jointly controlled entity. The matter is under discussion with theshareholders of the said shares and would be acted upon on reaching finality with them.(t) Para 6(xix) of CFS [Note no. 48(A)(v) of CFS] refers to the classification of amountof Rs. 23.70 crores advanced by a jointly controlled entity (JCE) to few partiesfor acquisition of the occupancy rights on its behalf which would be transferred to the
JCE. The said note is self explanatory.
(u) Para 6(xxi) of the CFS (Note No.48(B)(xx) of CFS) relates to the loan given by asubsidiary company to a related party which the Board is confident of repayment by thesaid party.
(v) Para 6(xxii) of CFS (Note No. 48(B)(xxi) of CFS) relates to the advances given bysubsidiary company to a related party which is in the process of obtaining approvals andcommencing its project and hence as stated therein the subsidiary company will recover thesame. (w) Para 6(xxiii) of CFS (Note No. 48(B)(xxii) of CFS) relates to the substitutionof a corporate guarantee given by a subsidiary company with a sale agreement for flatsthe consideration of which would be recovered by the subsidiary company from the borroweron whose behalf the subsidiary company gave the corporate guarantee to the lenders andsubsequently sold the flats. The subsidiary company is confident of recovering the samefrom the borrowing company.
(x) Para 6(xxiv) of CFS (Note No. 48(B)(xxiii) of CFS) relates to guarantees andsecurities provided by a subsidiary company to banks and financial institution on behalfof group companies. As mentioned in the said Note the management of the subsidiarycompany does not expect any financial liability arising therefrom as the financialfacilities are secured by sufficient primary securities of the group companies.
(y) Para 6(xxv) of CFS (Note No. 48(A)(ix) of CFS) relates to project work in progressin an Associate Company where such company is currently under process of resolving theinterenal disputes among the partners of the firm viz-a-viz the Development Agreement forwhich appeals have been filed. The management of the associate company expects favourableoutcome in the matter and accordingly is of the opinion that the land shall be availableto such company for development.
(z) Para 6(xxvi) of CFS (Note No. 48(B)(xxiv) of CFS) relates to the advances by asubsidiary company for the purchase land and tenancy rights for which agreements would beentered into with the respective land owners / tenants in due course.
(aa) Para 6 (xxvii) of CFS (Note No. 48(B)(xxv) of CFS)relates to loans advanced by asubsidiary company to a related party which is stated to be good for recovery by them.
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) notified that the Indian Accounting Standards(Ind AS) are applicable to certain classes of Companies w.e.f April 1 2016. Ind AS hasreplaced the existing Indian GAAP prescribed under Section 133 of the Companies Act 2013read with Rule 7 of the Companies (Accounts) Rules 2014. Ind AS is applicable to theCompany from April 1 2016 with a transition date of April 1 2015 .
The reconciliation and description of the effect of the transition from previous GAAPto Ind AS has been set out in Notes to Accounts in the Standalone and ConsolidatedFinancial Statements.
In view of inadequate profits in the year under review and with a view to conserveresources to meet the fund requirements for Company's projects your Directors have notrecommended any payment of dividend for the year 2016-17.
Subsidiaries Associate Companies and Joint ventures:
During the year under review the Company namely Horizontal Realty & AviationPrivate Limited (HRAPL) has become a 63% subsidiary of Nine Paradise Erectors PrivateLimited which is a 100% subsidiary of the Company. In other words HRAPL has become stepdown subsidiary of the Company with effect from 2nd January 2017.
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 financialstatements have been prepared in accordance with theprovisions of the Companies Act 2013 applicable Ind AS and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 and include the financial information of itssubsidiaries/associates and joint venture entities / partnership firms in which yourCompany holds stake. The audited financial statements of the subsidiary companies will beavailable for inspection by any member at the registered office of the company and at theCompany's website www.dbrealty.co.in. Copies of the audited financial statements of thesubsidiaries can be sought 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 Company's subsidiaries in Form AOC-1 is attached to the financialstatements of the Company The statement also provides the details of performance andfinancial 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 separatereportonCorporateGovernancealongwith certificatefrom the Secretarial Auditors onits compliance forms an integral part of this 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 2014including any statutory modification(s) re-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. Salim Balwa and Ms. Sunita Goenka Directors who are liable to retire byrotation at the forthcoming Annual General Meeting and being eligible offer themselvesfor reappointment.
2. Appointment of Independent Director
Mr. Sundaram Vidyatheertha Rajagopal (DIN: 01951392) was appointed as AdditionalIndependent Director with effect from till the date of the forthcoming Annual GeneralMeeting (AGM) and a notice has been 9th December2016.Hewillholdoffice receivedfrom a Member proposing the candidature of Mr. Sundaram V Rajagopal for being appointed asan Independent Director of the Company.
As per the provisions of the Companies Act 2013 Independent Directors have beenappointed for a period of five years and shall not be liable to retire by rotation.
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 302017.
4. Key Managerial Personnel
Mr. Nagamallesh Gattu resigned as the Chief Financial Officer (Key ManagerialPersonnel) of the Company with effect from
31st August 2016. In terms of Section 203 of Companies Act 2013 the Board hasappointed Mr. Anantharam Anil Kumar as the Chief Financial Officer (Key ManagerialPersonnel) of the Company on recommendation of Nomination and Remuneration Committee witheffect from 1st September 2016.Mr.VipulBansalhasresignedasChiefExecutiveOfficerwitheffect from
30th September 2016. The Board places on record its appreciation for the valuableservices rendered by Mr. Nagamallesh Gattu and Mr. Vipul Bansal during their tenure as CFOand CEO respectively of the Company Mr. Vinod Goenka Chairman and Managing Director andMr. Shahid Balwa Vice Chairman and Managing Director
Mr. S.A.K. Narayanan Company Secretary of Mr.AnantharamAnilKumarChiefFinancialOfficerthe Company are Key and
Managerial Personnel's as per the provisions 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 Directors
Committee and the Board. The Nomination and Remuneration Committee of the Board haslaid down the performance evaluation framework under which performance of every Directoris evaluated. The framework also provides the manner in which the Directors as acollective unit 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 in Section 188 (1) of the CompaniesAct 2013 entered during Allrelatedparty contracts/arrangements/transactions as specifiedCompany and were on arm's length basis. During the year the the financial Company has notentered into any material contracts/arrangements/transactions as specified in Section 188(1) of the Companies party transactions entered by the Company with Promoters DirectorsKey Act2013.Therewerenomateriallysignificant Managerial Personnel or other persons whichmay have a potential conflict with the interest of the .
All such Related Party Transaction 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 Transaction and also on dealing with RelatedParty Transaction as approved by the Audit Committee and the Board of Directors isuploaded 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 andreportingfinancial. 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 observation has been received fromthe Statutory Auditors and the Internal Auditors of the Company on the inefficiency orinadequacy of such controls and the Internal Financial Controls with reference tofinancial statements as designed and implemented by the Company are adequate.
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 Section178 of the Companies Act 2013. The remunerationpaid to the Directors is as per the terms laid out in the Nomination and RemunerationPolicy of 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 employee/Directorof the Bank 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 atwww.dbrealty.co.in.
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 optimum risk-rewardtrade off. The risk management approach is based on a clear understanding of the varietyof risks that the organization faces disciplined risk monitoring and measurement andcontinuous 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 D 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 extract of the Annual Return as at March 31 2017 is annexed and formspart of this report. (Annexure A)
Number of Board Meetings during 2016-17
The Board met four (4) times during the financial year 2016-17 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 31stMarch 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures if any; b) they have selected such accountingpolicies and applied them consistently and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as on 31st March 2017 and of the profit and loss of the Company forthe year ended on that date; c) they have taken proper and sufficientcare for themaintenance of adequate accounting records in accordance with provisions of the CompaniesAct 2013 for safeguarding the assets of the Company and for preventing and detectingfraud and other irregularities; d) they have prepared the annual accounts on a goingconcern basis. e) they have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively f) they have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Familiarization Programs for Independent Directors
The various programs undertaken for familiarizing Independent Directors with thefunctions and procedures of the Company are disclosed in the Corporate Governance Reportwhich forms part of this Annual Report
Committees of the Board
The company has five (5) Committees of the Board which have been established as a partof the best corporate governance practices and are in compliance with the requirements ofthe relevant provisions of applicable laws and statutes.The Bank has following Committeesof the Board:
1. Audit Committee
2. Corporate Social Responsibility Committee
3. Nomination and Remuneration Committee
4. Finance and Investment Committee
5. Stakeholders Relationship Committee
Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 (the Rules') theapplication money of Rs. 6132/- outstanding in the "Refund Account D BRealty Public Issue" which remained unclaimed for seven consecutive years from thedate of issue and due for refund was transferred to Investor Education and Protection Fundon March 4 2017.
The first year of second term of M/s Haribhakti & Co. LLP Chartered Accountantsconsisting of 5 consecutive years as Statutory Auditors shall expire on the conclusion ofthe ensuing Annual General Meeting 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 yearcommencing from the conclusion of the ensuing Annual General Meeting till the conclusionof the 12th AGM to be held in the year 2018. Their continuance of appointmentforthefinancialyear2017-18istoberatifiedby the shareholders in the ensuing Annual GeneralMeeting.
The Company has received a certificate from the above Auditors to the effect that ifthey are re-appointed it would be in accordance with the provisions of Section 141 of theCompanies Act 2013.
The Company has received a certificate from the said Auditors that they are eligible tohold office as the Auditors of the Company and are not disqualified for being soappointed.
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 FY2016-17.The Company has provided all assistance and facilities to the Secretarial Auditorfor conducting their audit. The Report of Secretarial Auditor for the FY 2016-17 isannexed to this report (Annexure E). With regard to observation made in the SecretarialAudit Report on delay in appointment of new Independent Director in place of resigningIndependent Director your Directors have to state that the delay was mainly due toevaluation and selection of a suitable person with adequate expertise in the relatedareas. With respect to observation on compliance with the provisions of Section 93 of theCompanies Act 2013 the Company shall comply with the same.
1. Conservation of Energy Technological Absorption Foreign Exchange Earningsand Outgo
Your Company is not covered by the schedule of industries which are required tofurnish the information pursuant to Section 134(3)(m) of the Companies Act 2013 read withRule (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 2017 (Rs.) ||Fiscal 2016 (Rs.) |
|Professional Fees ||NIL ||NIL |
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 Directors'Report 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. Since no remuneration exceptsitting fees has been paid to any Director the ratio of such remuneration to the medianemployees remuneration has not been stated. During the year no increase in remuneration ofany Director or KMP or manager has been effected. The number of permanent employees at theend of the financial year was 86. The remuneration of the KMPs has been commensurate withtheir performance for the group. The other remuneration details ofDirectors/KMPs/employees are disclosed in Annexure F to this 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 thefinancial statements.
There were no material changes or commitments affecting the financial position of theCompany between the financial 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 2014 hasbeen 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 Company's 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 |
|Mumbai ||Vinod K. Goenka |
|9th June 2017 ||Chairman |
ANNEXURE F DISCLOSURE OF REMUNERATION DETAILS
1. Ratio of the remuneration of each director to the median remuneration of theemployees- Not Applicable since no remuneration except sitting fees has been paid toDirectors.
2. The percentage increase in remuneration of each Director Chief FinancialOfficer Chief Executive Officer Company Secretary or Manager if any in the financialyear:
As stated above no remuneration has been paid to Directors except sitting fees. Thedetails about the percentage increase in remuneration of KMPs are as under:
|Name of Key Managerial Personnel ||Designation ||% increase in remuneration |
|Mr. Vipul Bansal (upto 30.09.2016) ||Chief Executive Officer ||Nil |
|Mr. N.MGattu (upto 31.08.2016) ||Chief Financial Officer ||Nil |
|Mr. A. Anil Kumar (w.e.f.01.09.2016) ||Chief Financial Officer ||N.A. |
|Mr. S.A.K Narayanan ||Company Secretary ||Nil |
3. The percentage increase in the median remuneration of employees in the financialyear:Nil
4. Number of permanent employees on the rolls of the Company:
There were total 87 nos. of employees on the pay rolls of the Company as on 31stMarch 2017.
5. Explanation on the relationship between average increase in remuneration and theCompany's performance:
The base increment given to employees during FY 2016-17 wherever applicable were basedon the performance evaluation and appraisal of such employee which apart from variousindividual linked factors also takes into account the inflation adjustment.
6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company:
|Particulars ||Mr. Vipul Bansal (Chief Executive Officer) (upto 30.09.2016) ||Mr. N.M. Gattu (Chief Financial Officer) (upto 31.08.2016) ||Mr. A. Anil Kumar (Chief Financial Officer) (w.e.f. 01.09.2016) ||Mr. S.A.K. Narayanan (Company Secretary) |
|Remuneration in FY 2016-17 (Amount in Rs.) ||17289018 ||2777100 ||70 91545 ||4648252 |
|Revenues of Company (Amount in Rs.) || || |
|Remuneration as % of revenue ||1.25 ||0.20 ||0.51 ||0.33 |
|7. Stock price related information: || || |
|Particulars ||As on 31st March 2017 ||As on 31st March 2016 |
| ||(Current F.Y.) ||(Previous F.Y.) |
|Approx. Market Capitalization(as per NSE closing stock price) ||Rs. 1014.39 crores ||Rs. 1040.00 crores |
|Price Earnings Ratio (as per NSE closing stock price) ||0.014 ||0.51 |
|Percentage increase / (decrease) in the market quotations of the shares of the Company (closing stock price on NSE) as on March 31 2017 compared to last public offer. ||(91.09) ||(90.87) |
8. Average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and Percentage increase/decrease inthe managerial remuneration and Justification including any exceptional circumstancesfor increase in the managerial remuneration:
The average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last financial year was Nil. The percentage increase inthe managerial remuneration was Nil.
9. The key parameters for variable component of remuneration availed by thedirectors:
As stated earlier no remuneration has been paid to Directors except sitting fees andtherefore none of the Directors has drawn any variable component remuneration during theyear under review.
10. The details of the employees who are not a director but has receivedremuneration in excess of the highest paid director: As stated earlier noremuneration has been paid to Directors except sitting fees.
I Vinod Goenka Managing Director of D B Realty Limited hereby confirm that theremuneration paid during FY 2016-17 is as per the remuneration policy of the Company.
| ||On behalf of the Board of Directors |
| ||For D B Realty Limited |
|Date: 9th June 2017 ||Vinod K. Goenka |
|Place: Mumbai ||Chairman & Managing Director |