FOR THE FINANCIAL YEAR ENDED MARCH 31 2017
TO THE MEMBERS
The Directors have pleasure in presenting the Thirty-Second Directors' Report of yourCompany along with the financial statements for the financial year ended March 31 2017.
1. OPERATING RESULTS :
Certain key aspects of the Company's performance (on a standalone basis) during thefinancial year ended March 31 2017 as compared to the previous financial year aresummarised below:
|Particulars ||Financial Year 2016 - 2017 ||Financial Year 2015 - 2016 |
| ||(Rs. In Crores) ||(Rs. In Crores) |
|Revenue from Operations ||457.14 ||374.17 |
|Other Income ||248.14 ||222.12 |
|Total Income ||705.28 ||596.29 |
|Profit Before Tax ||113.69 ||31.75 |
|Profit After Tax ||124.25 ||22.73 |
|Other Comprehensive Income ||(0.31) ||(0.61) |
|Total Comprehensive Income ||123.94 ||22.12 |
The Company has adopted Indian Accounting Standards (Ind AS) with effect from April012016 prescribed under section 133 of the Companies Act 2013.
In terms of the Regulation 43A of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("SEBI LODRRegulations") the Dividend Distribution Policy of the Company is appended asAnnexureI to this Report and also available on the website of the Company athttps://www.aodreiproperties.com/investor/corporateaovernance.
Your Company has been growing rapidly over the last few years. Given the significantweakness in the real estate market over the period there have been significant businessdevelopment opportunities available for the Company. The upcoming implementation of theReal Estate Regulatory Act 2016 has given further impetus to consolidation in theindustry and your Company believes there is considerable opportunity for your Company toadd new projects at attractive valuations. With these kind of opportunities available andwith our ambition to considerably scale the business it is important for the Company toconserve cash. With this objective of investing strongly in new project opportunities theBoard of Directors have therefore not recommended any dividend for the financial yearended March 31 2017.
3. SHARE CAPITAL :
During the financial year ended March 31 2017 the Company had issued and allotted104326 equity shares of' 5/- each of the Company to its eligible employees on exercise ofoptions granted under the Godrej Properties Limited Employee Stock Grant Scheme 2011.Consequently the issued subscribed and paid-up equity share capital of the Company hasincreased to 216364692 equity shares of ' 5/- each. The Company has neither issuedshares with differential rights as to dividend voting or otherwise nor issued shares(including sweat equity shares) to the employees or Directors of the Company under anyScheme.
4. OVERVIEW OF OPERATIONS:
For the full financial year GPL's total income decreased by 24% and stood at ' 1733crore on a consolidated basis. However EBITDA increased by 42% to ' 401 crore and netprofit increased by 30% to ' 207 crore. An important contributor to the strong profitgrowth has been our flagship project The Trees' which attained revenue recognitionmuch ahead of schedule.
The Company managed to demonstrate strong value addition to its development portfoliodespite the current uncertainties and challenges in the real estate environment. GPL added7 new projects with saleable area of 18 million sq. ft. The new projects signed arelocated in Bangalore Pune National Capital Region and Mumbai. The projects added are allof substantial size and are in line with the Company's long term strategy of focusing onvalue accretive and risk efficient models.
From a sales perspective despite a weak year on the whole due to regulatory approvaldelays resulting in a low number of new residential project launches the projects whichwe were able to launch received an encouraging response. GPL registered booking volume of3.1 million sq. ft. and booking value of ' 2020 crore in an otherwise weak real estatemarket.
One project in particular that stood out in FY 2017 was Godrej Golf Links our firstproject in Noida. GPL launched Godrej Golf Links in Greater Noida in the first week ofNovember 2016 at a time when the NCR market was in the midst of a major slowdown. We soldover 6 lakh sq. ft. of villas with a booking value well in excess of ' 300 crore in asingle day. For FY17 we managed to sell more than a million sq. ft. in this project witha booking value of ' 563 crore. We are proud of this achievement given that this was ourfirst ever project in Noida and the launch was executed at a time when market conditionswere very unsupportive. Godrej Greens in Pune also witnessed an overwhelming customerresponse despite being launched immediately after the government's demonetizationannouncement. We sold 420088 sq. ft. with a booking value of' 187 crore inFY17at GodrejGreens.
On the operational front we successfully delivered 4.55 million sq. ft. across fourcities. We have now delivered over 15 million sq. ft. of real estate in the last fouryears which we believe demonstrates that our operational delivery is keeping pace with oursales acceleration over the past few years.
Sustainable development is an important part of our Company's vision and we havereceived several recognitions for our leadership in environmental sustainability in FY17.GPL was ranked as the 2nd best developer in Asia and 5th bestglobally for its leadership in sustainable development by Global Real EstateSustainability Benchmark Report (GRESB). Godrej One received LEED Platinum Rating for theoffice premises under the Commercial Interiors segment from the US Green Building Council(USGBC). This is one of the first such certifications in the country. GPL also receivedsignificant external recognition with a total of 60 awards being received in FY17.
5. FUTURE PROSPECTS AND OUTLOOK OF THE COMPANY:
A cyclical downturn combined with demonetization and the implementation of the RealEstate (Regulation and Development) Act 2016 has created short-term uncertainty in thesector. Howeverthesesamefactors will lead to consolidation and improved governance in thesector which in turn will drive improved consumer confidence. The combination of thisimproved consumer confidence with far improved affordability that is the result of risingincomes stagnant prices and reduced interest rates will propel the sector in a verypositive direction over the next several years. The infrastructure status accorded toaffordable housing is a game changing move that will open up more institutional sourcesfor developers to raise funds at a competitive price. This move will encourage leadingdevelopers to enter this segment. We expect 2017 to be a transition year but the yearsahead are likely to be very exciting ones for real estate development in India. Our brandnational presence demonstrated track record and capabilities put us in a strong positionto disproportionately benefit from any improvement in the environment and will allow us toremain on a high growth trajectory in the years ahead.
We will continue to pursue new projects through joint development agreements with landowners. In addition we have also diversified our execution model by undertaking projectsas a Project Development Manager on a fee basis. Our mission is to seek superior long-termgrowth in shareholder value by maximizing returns through optimal financing and fiscaldiscipline. The Company's primary growth focus shall be on 4 key markets of Mumbai NCRBengaluru and Pune while at the same time opportunistically pursuing other key markets.The residential investment platform will enable us to enter projects which require largeupfront capital investment.
On the operational front the company shall be focusing on quick launch turnaroundtimes and swift execution and delivery of projects. The company will continue to improveits project execution capabilities across regions strengthened through continuouslyimproving internal processes and internal capability building. In addition a customercentric approach to growth operational efficiency optimizing return on capital anddeveloping crisis and risk management capabilities will continue to remain the Company'sfocus areas.
6. DEPOSITORY SYSTEM:
Your Company's equity shares are available for dematerialisation through NationalSecurities Depository Limited and Central Depository Services (India) Limited. As on March31 2017 99.98 % of the equity shares of the Company were held in demaferialised form.
7. SCHEME OF AMALGAMATION OF HAPPY HIGHRISES LIMITED WITH THE COMPANY:
Happy Highrises Limited ("HHL") a wholly owned subsidiary of the Companywas amalgamated with the Company in terms of the Scheme of Amalgamation (Scheme')sanctioned by the National Company Law Tribunal vide its order dated March 29 2017. Thepetition for the Scheme was originally filed by HHL with Hon'ble High Court of Judicatureat Bombay for approval of the Scheme. Consequent to enforcement of provisions of Companies(Compromise Arrangements and Amalgamations) Rules 2016 relating to merger arrangementetc. with effect from December 15 2016 cases relating to merger/amalgamations pendingimmediately before such date before any High Court stood transferred to the NationalCompany Law Tribunal (Tribunal/NCLT).
Accordingly the order for approving the said Scheme was passed by the National CompanyLaw Tribunal Mumbai Bench. The appointed date of the Scheme was May 012016. The Schemehas came into effect from April 25 2017.
8. EXTRACT OF ANNUAL RETURN:
The Extract of Annual Return as provided under Section 92(3) of the Companies Act 2013(the "Companies Act") and as prescribed in Form No. MGT-9 of the Companies(Management and Administration) Rules 2014 as amended from time to time is appended asAnnexure II to this Report.
9. NUMBER OF MEETINGS OF THE BOARD:
The Board met 4 (four) times in the financial year ended March 31 2017 on May05 2016 August 09 2016 November 09 2016 and February 02 2017.
10. DIRECTORS' RESPONSIBILITY STATEMENT:
The Directors hereby confirm that:
i. In the preparation of the annual accounts for the financial year ended March 312017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
11. 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 at March 31 2017 and of the profit of theCompany for the year ended on March 31 2017.
iii. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act and rules madethereunder as amended for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
iv. They have prepared the annual accounts for financial year ended March 31 2017onagoing concern' basis.
v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and have been operating efficiently.
vi. They have devised proper systems to ensure compliance with provisions of allapplicable laws and that such systems were adequate and operating effectively.
11. DECLARATION BY INDEPENDENT DIRECTORS:
The Independent Directors of the Company have submitted 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 Regulation 16(1)(b)ofSEBI LODR Regulations.
12. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:
The policy of the Company on directors' appointment and remuneration including criteriafor determining qualifications positive attributes independence of a Director and othermatters provided under Section 178(3) of the Companies Act is appended as Annexure III tothis Report.
13. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The details of loans given investments made guarantees given and securities providedunder Section 186 of the Companies Act have been provided in the notes to the standalonefinancial statements.
14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All transactions entered into during the financial year 20162017 with Related Partiesas defined under the Companies Act and SEBI LODR Regulations were in the ordinary courseof business and on an arm's length basis. During the year the Company had not enteredinto any transaction referred to in Section 188 of the Companies Act with related partieswhich could be considered material under SEBI LODR Regulations. Accordingly thedisclosure of Related Party Transactions as required under Section 134(3) of the CompaniesAct in Form AOC-2 is not applicable. Attention of Members is drawn to the disclosures oftransactions with related parties set out in Notes to Accounts - Note No 48 forming partof the Standalone financial statements.
As required under Regulation 23 of SEBI LODR Regulations the Company has formulated aRelated Party Transactions Policy which is available on the website of the Company athttps://www.aodreiDroDerties.com/investor/corDorateaovernance.
15. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between March 31 2017 and the date of this Report otherthan those disclosed in this Report.
16. PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO:
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings and outgo as required under Section 134(3)(m) of the Companies Act readwith the Companies (Accounts) Rules 2014 is appended as Annexure IV to this Report.
17. BUSINESS RISK MANAGEMENT:
The Company has constituted a Risk Management Committee consisting of key executivesand an independent director to identify and assess business risks and opportunities. TheRisk Management Committee identifies the risks at both enterprise level and at projectlevel.
The business risks identified are reviewed by the Risk Management Committee and adetailed action plan to mitigate identified risks is drawn up and its implementation ismonitored. The key risks and mitigation actions are then placed before the Audit Committeeof the Company.
18. CORPORATE SOCIAL RESPONSIBILITY:
A Corporate Social Responsibility (CSR) Committee has been constituted in accordancewith Section 135 of the Companies Act. The details required under the Companies (CorporateSocial Responsibility Policy) Rules 2014 are given in CSR Report appended as Annexure Vto this Report. The CSR Policy is available on the website of the Company atwww.godreiproperties.com/investors.
19. VIGIL MECHANISM:
The Company has established a vigil mechanism for directors employees and otherstakeholders to report their genuine concerns details of which have been given in theCorporate Governance Report forming part of this Annual Report.
20. ANNUAL EVALUATION OF PERFORMANCE OF THE BOARD:
The Company conducted a formal Board Effectiveness Review as part of its efforts toevaluate identify improvements and thus enhance the effectiveness of the Board ofDirectors (Board) its Committees and individual directors. This was in line with therequirements mentioned in the Companies Act and SEBI LODR Regulations.
The Corporate HR team of Godrej Industries Limited and Associate Companies (GILAC)worked directly with the Chairman and the Nomination and Remuneration Committee of theBoard to design and execute this process which was adopted by the Board. Each BoardMember completed a confidential online questionnaire providing vital feedback on how theBoard currently operates and how it might improve its effectiveness.
The survey comprised of four sections and compiled feedback and suggestions on:
Board processes (including Board composition strategic orientation and teamdynamics);
Individual Board members; and
Chairman's Feedback Report
The following reports were created as part of the evaluation:
Board Feedback Report
Individual Board Member Feedback Report
Chairman's Feedback Report
The overall Board Feedback Report was facilitated by Mr. Keki Dadiseth along with theIndependent Directors. The Directors were vocal about the Board functioning effectivelybut also identified areas which show scope for improvement. The Individual Committees andBoard Members feedback was shared with the Chairman. Following his evaluation aChairman's Feedback Report was also compiled.
21. SUBSIDIARY COMPANIES:
During the financial year under review Godrej Vikhroli Properties India Limited(incorporated as a result of conversion of Godrej Vikhroli Properties LLP) Godrej SkylineDevelopers Private Limited Godrej Residency Private Limited Pearlite Real PropertiesPrivate Limited Godrej Real View Developers Private Limited were incorporated as whollyowned subsidiaries of the Company. Happy Highrises Limited wholly owned subsidiary of theCompany entered into a share purchase agreement with Citystar Infraprojects Limited andits shareholders and in terms of the said agreement acquired the entire share capital ofCitystar Infraprojects Limited. Consequent upon merger of Happy Highrises Limited with theCompany Godrej Properties Limited has become the member of Citystar InfraProjectsLimited.
As at March 31 2017 the Company had 20 subsidiaries under the Companies Act namelyGodrej Realty Private Limited Godrej Real Estate Private Limited Godrej Buildcon PrivateLimited Godrej Garden City Properties Private Limited Godrej Projects DevelopmentPrivate Limited Godrej Landmark Redevelopers Private Limited Godrej Redevelopers(Mumbai) Private Limited Godrej Green Homes Limited Godrej Home Developers PrivateLimited Godrej Hillside Properties Private Limited Godrej Investment Advisers PrivateLimited Godrej Prakriti Facilities Private Limited Godrej Highrises Properties PrivateLimited Godrej Fund Management Pte Ltd Godrej Genesis Facilities Management PrivateLimited Godrej Skyline Developers Private Limited Godrej Residency Private LimitedPrakritiplaza Facilities Management Private Limited Godrej Vikhroli Properties IndiaLimited and Citystar Infraprojects Limited.
The Company shall provide a copy of the financial statements of its subsidiarycompanies to the members of the Company on their request. The financial statements of itssubsidiary companies will also be kept open for inspection by any members at theregistered office of the Company during business hours and will also be available on thewebsite of the Company.
During the financial year under review GRIP II Pte. Ltd an investee company under theGodrej Residential Investment Program II had entered into Share Subscription SharePurchase and Shareholders' Agreements with the Company in respect of Godrej GreenviewHousing Private Limited (GGHPL) Wonder Projects Development Private Limited (WPDPL) andGodrej Real View Developers Private Limited (GRVDPL) pursuant to which the Company hassold 80% of the equity share capital of GGHPL WPDPL and GRVDPL to GRIP II Pte. Ltd.Likewise the Company also entered into a Share Subscription Share Purchase andShareholders' Agreement with GRIP II Pte. Ltd. pursuant to which the Company has sold 51%of the equity share capital of Pearlite Real Properties Private Limited (PRPPL') toGRIP II Pte. Ltd. Consequently GGHPL WPDPL GRVDPL and PRPPL have ceased to besubsidiary of the Company.
As at March 31 2017 Wonder Space Properties Private Limited Wonder City BuildconPrivate Limited Godrej Home Constructions Private Limited Godrej Greenview HousingPrivate Limited Wonder Projects Development Private Limited Godrej Real View DevelopersPrivate Limited Pearlite Real Properties Private Limited and Godrej One PremisesManagement Private Limited are associate companies of the Company.
B. Limited Liability Partnerships (LLPs)
Your Company is a partner in the following LLPs as of March 31 2017:
1. Godrej Property Developers LLP
2. Mosiac Landmarks LLP
3. Dream World Landmarks LLP
4. Oxford Realty LLP
5. Godrej SSPDL Green Acres LLP
6. MS Ramaiah Ventures LLP
7. Oasis Landmarks LLP
8. Caroa Properties LLP
9. Amitis Developers LLP
10. Godrej Construction Projects LLP
11. Godrej Housing Projects LLP
13. Godrej Developers & Properties LLP
15. Godrej Project Developers & Properties LLP
16. AR Landcraft LLP
20. Bavdhan Realty @ Pune21 LLP
22. Godrej Projects (Pune) LLP
C. Material Non-Listed Indian Subsidiary:
As at March 31 2017 Godrej Buildcon Private Limited a wholly owned subsidiary of theCompany was considered material non-listed Indian subsidiary under Regulation 24 of SEBILODR Regulations and accordingly one Independent Director of the Company was also on theBoard of Godrej Buildcon Private Limited.
22. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURECOMPANIES:
As required under SEBI LODR Regulations and Section 129 of the Companies Act theconsolidated financial statements have been prepared by the Company in accordance with theapplicable accounting standards and form part of the Annual Report. A statement containingthe salient features of the Financial Statements of the subsidiaries joint ventures andassociate companies of the Company in Form AOC-1 as required under Rule 5 of the Companies(Accounts) Rules 2014 form part of the notes to the financial statements.
23. DETAILS RELATING TO DEPOSITS COVERED UNDER CHAPTER V OF THE COMPANIES ACT 2013:
|Sr. No. ||Particulars ||Amount in Rupees |
|1 ||Accepted during the year ||0 |
|2 ||Remained unpaid or unclaimed as at the end of the year ||12883000 |
|3 ||Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved:- ||0 |
| ||(i) at the beginning of the year ||0 |
| ||(ii) maximum during the year ||0 |
| ||(iii) at the end of the year ||0 |
|4 ||Details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act ||0 |
The Company has not accepted any deposits from its
24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:
There are no significant and material orders passed by the regulafors/courts/tribunalswhich would impact the going concern status of the Company and its future operations.
25. INTERNAL FINANCIAL CONTROL SYSTEM:
The Company has an internal financial control system commensurate with the size scaleand complexity of its operations. The Company has in place a mechanism to identityassess monitor and mitigate various risks to key business objectives. Major risksidentified by the businesses and functions are systematically addressed through mitigatingaction on continuing basis. These are routinely tested and certified by Statutory as wellas Internal Auditors. The audit observations on internal financial controls areperiodically reported to the Audit Committee.
26. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Mr. Adi B. Godrej Chairman stepped down from the Board of the Company with effectfrom April 01 2017 with an intent to move away from active participation in the day today functioning of the Company. He will however continue to provide high level support inthe capacity of Chairman Emeritus. The Board placed on record its appreciation for thevaluable services rendered by Mr. Adi B. Godrej to the Company during his tenure asChairman. Consequent to the said change Mr. Pirojsha Godrej has been re-designated asExecutive Chairman of the Company with effect from April 012017 and Mr. Mohit Malhofrahas been re-designated as Managing Director & Chief Executive Officer of the Companywith effect from April 012017.
On October 10 2016 Ms. Parmeshwar A. Godrej NonExecutive Director of the Companypassed away. The Board while recording its heart-felt condolence at the demise of Ms.Parmeshwar A. Godrej appreciated the contributions made by her towards the growth of theCompany from its formative period.
In accordance with the Articles of Association of the Company and the provisions of theSection 152(6)(e) of the Companies Act Mr. Pirojsha Godrej (DIN: 00432983) will retire byrotation at the ensuing Annual General Meeting and being eligible offered himself forre-appointment.
Mr. Pirojsha Godrej (DIN: 00432983) - Executive Chairman Mr. Mohit Malhotra (DIN:07074531) - Managing Director and Chief Executive Officer Mr. Rajendra Khetawat - ChiefFinancial Officer and Mr. Surender Varma - Company Secretary & Chief Legal Officer arethe Key Managerial Personnel of the Company as at the date of this Report. Pursuant to theapproval of the members accorded at the Annual General Meeting held on August 092016 theCompany had made the applications to the Central Government for waiver of recovery ofexcess remuneration paid to Mr. Pirojsha Godrej and Mr. Mohit Malhotra for financial year2015-16 and to Mr. K T Jithendran for the period April 01 2015 to December 15 2015. TheCentral Government has granted approval for waiver for recovery of excess remunerationpaid to Mr. K T Jithendran and directed to recover ' 15.72 lakh out of excess remunerationof Rs. 2.68 crore paid to Mr. Pirojsha Godrej. The Company has taken necessary steps torecover the amount of Rs. 15.72 lakh from Mr. Pirojsha Godrej. The approval in respect ofapplication of Mr. Mohit Malhotra is awaited.
27. AUDITORS' APPOINTMENT:
The Members of the Company at the 29th Annual General Meeting had appointedKalyaniwalla & Mistry LLP Chartered Accountants (Firm Registrationno.:104607W/W100166) as the Statutory Auditors of the Company to hold office from theconclusion of 29th Annual General Meeting of the Company until the conclusionof the 32nd Annual General Meeting.
As per the provisions of the Companies Act no listed company shall appoint an auditfirm as auditors for more than two terms of five consecutive years. The Companies Act alsoprovided for additional transition period of three years from the commencement of the Acti.e. 1st April 2014. Accordingly the term of the present AuditorsKalyaniwalla & Mistry LLP expires at the conclusion of the forthcoming Annual GeneralMeeting. The Board has recommended BSR & Co. LLP Chartered Accountants FirmRegistration No. 101248W/W- 100022 Mumbai as the Company's new Statutory Auditors for aperiod of five years commencing from the conclusion of Thirty Second Annual GeneralMeeting till the conclusion of the Thirty Seventh Annual General Meeting. BSR & Co.LLP Chartered Accountants have confirmed that their appointment if made would be withinthe limits specified under Section 141(3)(g) of the Companies Act and that they are notdisqualified to be appointed as statutory auditor in terms of the provisions of Section139(1) Section 141(2) and Section 141(3) of the Companies Act and the provisions of theCompanies (Audit and Auditors) Rules 2014. The Board of Directors recommends to theMembers the appointment of BSR & Co. LLP Chartered Accountants as Statutory Auditorsof the Company.
There are no qualifications reservations or adverse remarks or disclaimers made byKalyaniwalla & Mistry Statutory Auditors in their report.
28. COST AUDITORS:
The Board of Directors of the Company on recommendation of Audit Committee appointedM/s. R Nanabhoy & Co Cost Accountants as Cost Auditors of the Company for thefinancial year 2017-18 at a fee of Rs. 105000 (Rupees One Lakh Five Thousand only) plusapplicable taxes and out of pocket expenses subject to the ratification of the said feesby the Members at the ensuing Annual General Meeting pursuant to Section 148 of theCompanies Act.
The cost audit report would be filed with the Central Government within prescribedtimelines.
29. SECRETARIAL AUDIT REPORT:
The Board of Directors of the Company have appointed A K Jain & Co. PractisingCompany Secretary to conduct the Secretarial Audit and his Report on Company'sSecretarial Audit is appended to this Report as Annexure VI.
There are no qualifications reservations or adverse remarks or disclaimers made by A.K. Jain & Co. Company Secretary in practice in their Secretarial Audit Report.
30. FRAUD REPORTING:
There have been no instances of fraud reported by the Auditors under Section 143(12) ofthe Companies Act and Rules framed thereunder either to the Company or to the CentralGovernment.
31. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34(2) of SEBI LODR Regulations is appended to this Report.
32. CORPORATE GOVERNANCE:
Your Company is committed to maintaining the highest standards of Corporate Governanceand adhering to the corporate governance requirements as set out by Securities andExchange Board of India. The Report on Corporate Governance as stipulated under SEBI LODRRegulations forms part of the Annual Report. The Certificate from the Auditors of theCompany confirming compliance with the conditions of Corporate Governance as stipulatedunder Schedule V to SEBI LODR Regulations and applicable provisions of the Companies Actforms part of the Corporate Governance Report.
33. AUDIT COMMITTEE OF THE COMPANY:
Your Company's Audit Committee comprises the following 7 (seven) Independent Directorsviz. Mr. Keki B. Dadiseth (Chairman) Mrs. Lalita D. Gupte Mr. Amit B. Choudhury Mr.Pranay D. Vakil Dr. Pritam Singh Mr. S. Narayan and Mr. Amitava Mukherjee.
The composition of the Audit Committee is in compliance with the requirements ofSection 177 of the Companies Act and Regulation 18 of SEBI LODR Regulations.
34. PARTICULARS OF EMPLOYEES:
Disclosures with respect to the remuneration of Directors and employees as requiredunder Section 197 of the Companies Act and Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been appended as Annexure VII tothis Report. The information required pursuant to Section 197 of the Companies Act readwith Rule 5(2)&(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company is available for inspectionby the Members at registered office of the Company during business hours on working daysup to the date of the ensuing Annual General Meeting. It any Member is interested inobtaining a copy thereof such Member may write to the Company Secretary whereupon a copywould be sent.
35. EMPLOYEES STOCK OPTION SCHEMES:
As required in terms of the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 the disclosure relating to Godrej Properties LimitedEmployee Stock Grant Scheme 2011 ("GPL ESGS") is appended as Annexure VIII tothis Report.
In view of the global meltdown and lower market prices of the shares of the Company andwith a view to protect the interest of the employees of the Company to whom options underGodrej Properties Limited Employee Stock Option Plan (GPL ESOP) have been vested theexercise period for the vested options was extended to December 27 2016 with the priorapproval of Members. However none of the employees had exercised their options tillDecember 27 2016 being the last date of exercise period. Accordingly the Boardterminated the GPL ESOP and all the unexercised 241400 options under the GPL ESOP wererendered lapsed. The lapsed and unappropriated equity shares held by the Trustees of GPLESOP Trust on the date of termination have been sold on the recognized stock exchanges.
36. BUSINESS RESPONSIBILITY REPORT:
The Business Responsibility Report for the financial year ended March 31 2017 asstipulated under Regulation 34(2) of SEBI LODR Regulations is attached as part of theAnnual Report.
37. AWARDS & RECOGNITIONS:
The Directors take pleasure in informing the Members that the Company its people andprojects were acknowledged with several awards and ratings during the financial year endedMarch 31 2017. The details of the award received are given at page no. 8 of this Report.
The Directors wish to place on record their appreciation and sincere thanks to thecustomers joint venture partners shareholders banks financial institutions fixeddeposit holders vendors and other associates who through their continued support andcooperation have helped as partners in the Company's progress. The Directors alsoacknowledge the hard work dedication and commitment of the employees.
| ||For and on behalf of the Board of Directors |
| ||of Godrej Properties Limited |
| ||Pirojsha Godrej |
|Place: Mumbai ||Executive Chairman |
|Date : May 04 2017 ||(DIN: 00432983) |
ANNEXURE I TO THE DIRECTOR'S REPORT
1. BACKGROUND AND APPLICABILITY:
The SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015("Regulations") require the top 500 listed companies (by market capitalisation)to disclose a Dividend Distribution Policy in the annual report and on the corporatewebsite.
The Board of Directors ("Board") of Godrej Properties Limited("Company") has adopted this Dividend Distribution Policy to comply with theserequirements.
The Company currently has only one class of shares viz. equity for which this policyis applicable. The policy is subject to review it and when the Company issues differentclasses of shares.
2. DIVIDEND DISTRIBUTION PHILOSOPHY:
The Company is committed to driving superior value creation for all its stakeholders.The focus will continue to be on sustainable returns through an appropriate capitalstrategy for both medium term and longer term value creation. Accordingly the Board wouldcontinue to adopt a progressive and dynamic dividend policy ensuring the immediate aswell as long term needs of the business.
Dividend represents the profit of the Company which is distributed to shareholders inproportion to the amount paid-up on shares they hold. Dividend includes Interim Dividend.
The Dividend for any financial year shall normally be paid out of the Company profitsfor that year. This will be arrived at after providing for depreciation in accordance withthe provisions of the Companies Act 2013. If circumstances require the Board may alsodeclare dividend out of accumulated profits of any previous financial year(s) inaccordance with provisions of the Act and Regulations as applicable.
4. CIRCUMSTANCES UNDER WHICH SHAREHOLDERS CANNOT EXPECT DIVIDEND:
The Board will assess the Company's financial requirements including present andfuture organic and inorganic growth opportunities and other relevant factors (as mentionedelsewhere in this policy) and declare Dividend in any financial year.
Notwithstanding the above the shareholders of the Company may not expect Dividendunder the following circumstances:
a. Whenever it undertakes or proposes to undertake a significant expansion projectrequiring higher allocation of capital
b. Significantly higher working capital requirements adversely impacting free cash flow
c. Whenever it undertakes any acquisitions or joint ventures requiring significantallocation of capital
d. In the event of inadequacy of profit or whenever the Company has incurred losses
5. INTERIM AND FINAL DIVIDEND:
The Board may declare one or more Interim Dividends during the year. Additionally theBoard may recommend Final Dividend for the approval of the shareholders at the AnnualGeneral Meeting. The date of the Board meeting in which the Dividend proposal will beconsidered will be provided to the stock exchanges as required by Listing Regulations.
6. FINANCIAL PARAMETERS AND OTHER INTERNAL AND EXTERNAL FACTORS THAT WOULD BECONSIDERED FOR DECLARATION OF DIVIDEND:
Distributable surplus available as per the Act and Regulations
The Company's liquidity position and future cash flow needs
Track record of Dividends distributed by the Company
Payout ratios of comparable companies
Prevailing Taxation Policy or any amendments expected thereof with respect toDividend distribution
Capital expenditure requirements considering the expansion and acquisitionopportunities
Cost and availability of alternative sources of financing
Stipulations/ Covenants of loan agreements
Macroeconomic and business conditions in general
Providing of unforeseen event and contingency with financial implications
Any other relevant factors that the Board may deem fit to consider beforedeclaring Dividend.
7. UTILISATION OF RETAINED EARNINGS:
Subject to applicable regulations the Company's retained earnings shall be appliedtor:
Funding inorganic and organic growth needs including working capital capitalexpenditure repayment of debt etc.
Buyback of shares subject to applicable limits
Payment of Dividend in future years
Issue of Bonus shares
Any other permissible purpose
8. MODIFICATION OF THE POLICY:
The Management Committee of the Board of Directors is authorised to change/amend thispolicy from time to time at its sole discretion and/or in pursuance of any amendments madein the Companies Act 2013 the Regulations etc.
This document does not solicit investments in the Company's securities. Nor is it anassurance of guaranteed returns (in any form) for investments in the Company's equityshares.