To the Members
Your Directors are pleased to present the 22nd Annual Report together withthe Audited Statements of Accounts for the year ended 31st March 2016.
The summarized financial results of the Company during the year under review are asunder:-
| || ||(Rs. in Lakhs) |
|PARTICULARS ||Year Ended 31.03.2016 ||Year Ended 31.03.2015 |
|Total Turnover ||7014.49 ||6623.03 |
|Gross Profit/ (Loss) ||1747.30 ||1521.27 |
|Add/ (Less) : Exceptional Items ||37.90 ||-1023.60 |
|Less : || || |
|(a) Depreciation ||1504.66 ||1491.50 |
|(b) Finance Cost ||3050.14 ||3104.77 |
|(c) Deferred Tax Charge ||313.35 ||409.32 |
|Net Profit/(Loss) ||-3082.95 ||-4507.92 |
|Appropriations : || || |
|General Reserve ||0 ||0 |
|Proposed Dividend ||0 ||0 |
|Tax on Dividend ||0 ||0 |
|Balance Brought Forward ||-10746.99 ||-3050.00 |
|Addition on Account of Amalgamation ||0 ||-3189.07 |
|Accumulated Profits ||-13829.94 ||-10746.99 |
In view of the brought forward and current year losses your directors regret theirinability to recommend dividend for the year under review.
PERFORMANCE REVIEW & OUTLOOK
The total income for the year under review was Rs. 7014.49 lakhs as against Rs. 6623.03lakhs in the previous year.
The total turnover of the hotel unit of the Company Vivanta By Taj Gurgaon-NCR forthe financial year under review was Rs. 6747.45 lakhs as compared to Rs. 5774.97 lakhsduring the previous year.
During the financial Year 2015-2016 the Company has reported higher Gross Profitamounting to Rs. 1747.30 lakhs compared to Rs. 1521.27 lakhs in the previous year. HoweverNet Loss (after deduction of exceptional items depreciation finance cost and deferredtax charge) amounting to Rs. 3082.95 lakhs compared to Rs. 4507.92 lakhs in the previousyear has been reported.
The Industry Trends and outlook are summed up in the Management Discussion and Analysiswhich forms part of this report.
SCHEME OF ARRANGEMENT
The Board of Directors in their meeting held on 10th February 2016 have approved aComposite Scheme of Arrangement (the Scheme) between HB Estate DevelopersLimited (the Company) HB Stockholdings Limited and HB Portfolio Limited andtheir respective members and creditors under Sections 391 to 394 read with Sections 100 to104 of the Companies Act 1956 or any corresponding provisions of the Companies Act 2013subject to various approvals as may be required. The Appointed Date(s) in the Scheme are01st April 2015 to 03rd April 2015.
The Company has filed the Draft Scheme along with required documents / information withthe Bombay Stock Exchange Limited (BSE) Pursuant to Regulation 37 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 read with SEBI Circular No.CIR/CFD/CMD/16/2015 dated November 30 2015. Upon receipt of necessary observationletter from BSE the Company shall file the said Scheme with the Honble High Courtof Punjab & Haryana at Chandigarh / National Company Law Tribunal (NCLT) or such otherforum or authority as may be designated. The Draft Scheme and other documents have beenuploaded on the website of the Bombay Stock Exchange (BSE) www.bseindia.com and also onthe Companys website www.hbestate.com having following web linkwww.hbestate.com/Investor Centre/Scheme of Arrangement
(i) Share Capital
The paid up Share Capital of the Company as on March 31 2016 was Rs. 961382870consisting of 16138287 Equity shares of Rs. 10 each and 8000000 Preference Shares ofRs. 100 each. During the year under review the Company has not issued shares withdifferential rights for voting dividend or otherwise nor granted stock options or sweatequity.
The Shareholding of Directors of the Company (including Promoter Director) is given inthe Corporate Governance Report forming part of this report.
(ii) Number of meeting(s) of the Board
During the year under review there were Five (5) Board Meetings. The details of thenumber of meetings of the Board held during the financial year 2015-2016 forms part ofCorporate Governance Report. The intervening gap between the meetings was within theperiod prescribed under the Companies Act 2013.
(iii) Public Deposits
The Company has not accepted any Deposits from the Public under Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
(iv) Significant and other material orders passed by the regulators or courts
There are no significant material orders passed by the Regulators or Courts or Tribunalduring the year under review which has an impact on the Going Concern status andCompanys operations in future.
(v) 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.
(vi) Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
The particulars required under Section 134(3)(m) of the Companies Act 2013 read withRules 8 of the Companies (Accounts) Rules 2014 in respect of conservation of energy andtechnology absorption are not applicable to your Company.
During the year under review foreign exchange earnings were Rs. 2398.06 lakhs. Theforeign exchange outgo during the said period was Rs. 5.15 lakhs towards payment ofProfessional and Technical fees and Rs. 67.51 lakhs towards advertisement and otherexpenses.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to sub-section (3) (c) & (5) of Section134 of the Companies Act 2013 itis hereby stated that:
(a) in the preparation of the Annual Accounts for the year ended 31st March2016 the applicable accounting standards have been followed with proper explanationrelating to material departures if any;
(b) the accounting policies adopted in the preparation of the annual accounts have beenapplied consistently except as otherwise stated in the Notes to Financial Statements andreasonable and prudent judgments and estimates so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year 2015-2016 and of theprofit or loss for that period;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) the annual financial statements for the year ended 31st March 2016have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and operating effectively;
(f) that system to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary and no Company has become or ceased to beCompanys Subsidiary during the year under review.
The Board of Directors has approved a Policy for Determining Material Subsidiaries incompliance with the provisions of Regulation 16 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The said Policy has been uploaded on thewebsite of the Company www.hbestate.com having following web link www.hbestate.com/Investor Centre/Corporate Governance
(ii) Joint Ventures
The Company is not having any Joint Venture business and no Company has become itsJoint Venture during the year under review.
(iii) Associate Companies
In terms of Sec 2(6) of the Companies Act 2013 Parsvnath HB Projects Pvt. Ltd. is theAssociate Company. A separate statement containing the salient features of the FinancialStatement of the Companys Associates is being provided in Form AOC-1.
MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT
As required under Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion& Analysis Report; a Report on the Corporate Governance together with the ComplianceCertificate from the Companys Statutory Auditors confirming compliance(s)forms an integral part of this report.
VIGIL MECHANISM - WHISTLE BLOWER POLICY
In terms of the provisions of Sec 177(9) & (10) of the Companies Act 2013 andpursuant to the provisions of Regulation 22 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Vigil Mechanism for Stakeholders Employeesand Directors of the Company has been established. The Whistle Blower Policy duly approvedby the Board of Directors has been uploaded on the website of the Companywww.hbestate.com and the web link for the same is www.hbestate.com/Investorcentre/Corporate Governance.
RELATED PARTY TRANSACTIONS
The Related Party Transactions that were entered during the financial year under reviewwere on arms length basis and were in the ordinary course of business. There were nomaterially significant Related Party Transactions entered into by the Company during theyear under review. Accordingly the disclosure of Related Party Transactions as requiredunder Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable. Noneof the Directors has any pecuniary relationships or transactions vis--vis the Company.
The Board of Directors on the recommendation of the Audit Committee has approved aPolicy to regulate transactions between the Company and its Related Parties in compliancewith the applicable provisions of the Companies Act 2013 the Rules made there under andRegulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The
Policy on Related Party Transactions has been uploaded on the website of the Companywww.hbestate.com having following web link www.hbestate.com/Investorcentre/CorporateGovernance.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Code of Conduct for regulating monitoring andreporting of trading by insiders and other connected persons in compliance withRegulation 9 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Code of Conduct lays down guidelines and procedures to be followed anddisclosures to be made while dealing with the Shares of the Company as well as theconsequences of violation. The Code of Conduct has been formulated for prevention ofInsider Trading and to maintain the highest standards of dealing in Company Securities.
PRESERVATION OF DOCUMENTS & ARCHIVAL POLICY
In terms of Regulation 9 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors intheir meeting held on 10th February 2016 has adopted a Policy for Preservationof Documents & Archival thereof classifying them in two categories as follows:
(a) documents whose preservation shall be permanent in nature;
(b) documents with preservation period of not less than eight years after completion ofthe relevant transactions.
The said Policy has been uploaded on the website of the Company www.hbestate.comhaving following web link www.hbestate.com/InvestorCentre/Corporate Governance.
RISK MANAGEMENT POLICY
The Company has adopted the Risk Management Policy for Risk Assessment andminimization. These procedures are reviewed to ensure that the management controls riskthrough means of a properly defined framework. The Risk Management Policy is a part ofManagement Discussion and Analysis and forms a part of this report.
PREVENTION OF SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE
The Company has zero tolerance for sexual harassment at workplace. The Board ofDirectors in their meeting held on 12th August 2014 constituted the InternalComplaint Committee and adopted a Policy on prevention prohibition and redressal ofsexual harassment at workplace in line with the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules framedthereunder. The Internal Complaint Committee comprises of following members:
(i) Mrs. Banmala Jha Presiding Officer (Sr. V.P Legal HB Stockholding Ltd.)
(ii) Mrs. Madhu Suri Member (Working in the Delhi Legal Services Authority as aCounsellor)
(iii) Mr. Anil Goyal Member (Director)
(iv) Mr. Rajesh Singh Chahar Member (Company Secretary)
The Company has not received any complaints on sexual harassment during the year underreview.
INTERNAL CONTROL SYSTEMS
The Company has adequate internal control procedures commensurate with its size andnature of business. The objective of these procedures is to ensure efficient use andprotection of the Companys resources accuracy in financial reporting and duecompliance of statutes and corporate policies and procedures. The adequacy of internalfinancial control systems are reviewed by the Audit Committee of the Board in itsperiodical meetings.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a comprehensive Internal Financial Control system commensurate with thesize and scale of its operations. The system ensures the reliability of financialreporting compliance with policies procedures laws and regulations safeguarding ofassets and economical and efficient use of resources.
The policies and procedures adopted by the company ensures the orderly and efficientconduct of its business and adherence to the companys policies prevention anddetection of frauds and errors and timely preparation of reliable financial information.
(i) Statutory Auditors
M/s. P. Bholusaria & Co. Chartered Accountants New Delhi (Firm Registration No.:000468N) the Statutory Auditors of the Company shall hold office till the conclusion ofthe ensuing Annual General Meeting and being eligible offers themselves for reappointment.The Company has received a letter from them to the effect that their reappointment ifmade would be within the prescribed limits under Section 141(3)(g) of the Companies Act2013 and they are not disqualified for re-appointment. Observations of the StatutoryAuditors are explained wherever necessary by way of Notes to the Financial Statements.
(ii) Internal Auditors
M/s. M.K. Choudhary & Co. Chartered Accountants New Delhi are the InternalAuditors of the Company and M/s T.R. Chadha & Co. LLP Chartered Accountants are theInternal Auditors of the hotel project of the company Vivanta by Taj Gurgaon- NCR andtheir reports are reviewed by the Audit Committee periodically in its meetings.
(iii) Secretarial Auditor
Pursuant to the provisions of section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. A.N. Kukreja of M/s. A. N. Kukreja & Co. to conduct the SecretarialAudit of the company for the financial year 2015-2016. The Report of the Secretarial Auditin Form MR-3 is annexed as "Annexure- I".
Observation(s) made by the Secretarial Auditor:
(a) The Company does not have a Managing Director or Chief Executive Officer or Managerand in their absence a Whole-time Director as required under Section 203 of theCompanies Act 2013.
Comment: The management is searching for a suitable candidate for the post of WholeTime Director/ Chief Executive Officer of the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted a Corporate Social Responsibility Committee pursuant toSection 135 of the Companies Act 2013. The Company has incurred average net loss forimmediately preceding three financial years hence the Company is not required to spendany amount towards CSR activities during financial year 2015-2016. The CSR Policy has beenuploaded on the website of the Company - www.hbestate.com Web link- www.hbestate.com/Investorcentre/CSR and is annexed as "Annexure - II" and forms part ofthe Directors Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of Section 152 of the Companies Act 2013 Mr. Jagmohan Lal SuriDirector shall retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. The Board of Directors recommends hisre-appointment.
Mr. Rajesh Jain Mrs. Asha Mehra and Mr. Luv Malhotra are Independent Directors on theBoard of the Company. The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 and Regulations 16& 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Pursuant to the provisions of Section 203 of the Companies Act 2013 Mr. PraveenGupta Chief Financial Officer and Mr. Rajesh Singh Chahar Company Secretary aredesignated as the Key Managerial Personnel of the Company.
NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The said Policy is marked as "Annexure - III" which isannexed hereto and forms part of the Directors Report.
The Board of Directors on the recommendations of the Nomination and RemunerationCommittee has adopted a Policy on Diversity of Board of Directors in terms of Regulation19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Pursuant to the provisions of the Companies Act 2013 and applicable provisions of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board hascarried out an Annual performance evaluation of its own performance and of all theDirectors individually as well as the evaluation of the working of Audit Nomination &Remuneration and other Compliance Committees. The manner in which the evaluation has beencarried out is explained in the Corporate Governance Report.
PARTICULARS OF REMUNERATION
The provisions of Rule 5(2) & 5(3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are not applicable as there are no such employee whowere drawing / in receipt of remuneration of prescribed amount during the period underreview.
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of Directors / Key Managerial Personnel (KMP) and Employees of the Companyis furnished hereunder:
1. The ratio of the remuneration of each director to the median remuneration of theemployees of the for the financial year and
2. The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary or Manager if any in the financial year:
|Sl. No. ||Name of the Director/KMP ||Designation ||% Increase in remuneration in the financial year 2015-16 ||Ratio of Remuneration of each Director/ to median remuneration of employees |
|1. ||Mr. Lalit Bhasin ||Director (Non-executive) ||Nil ||Nil |
|2. ||Mr. Anil Goyal ||Director (Non-executive) ||Nil ||Nil |
|3. ||Mr. Jag Mohan Lal Suri ||Director (Non-executive) ||Nil ||Nil |
|4. ||Mr. Rajesh Jain ||Director (Non-executive) ||Nil ||Nil |
|5. ||Mrs. Asha Mehra ||Director (Non-executive) ||Nil ||Nil |
|6. ||Mr. Luv Malhotra ||Director (Non-executive) ||Nil ||Nil |
|7. ||Mr. Praveen Gupta ||Chief Financial Officer ||Nil || |
|8. ||Mr. Rajesh Singh Chahar ||Company Secretary ||Nil || |
Note: Non of the Directors has received any remuneration other than sitting feeduring the financial year 2015-16
3. The percentage increase in the median remuneration of employees in the financialyear:
4. The number of permanent employees on the rolls of the Company:
17 (seventeen) employees on the Company rolls and 223 employees on the rolls of Vivantaby Taj Gurgaon (Hotel Unit of the Company) operated by The Indian Hotels CompanyLimited.
5. The explanation on the relationship between average increase in remuneration andCompany performance:
6. Comparison of the remuneration of the Key Managerial Personnel against theperformance of the Company.
|Particulars ||Rs. (Lacs) |
|Remuneration of Key managerial Personnel during financial year 2014-15 ||33.19 |
|Revenue from Operations ||6800.18 |
|Remuneration (as % of revenue) ||0.49 |
|Profit before tax (PBT) ||(2769.61) |
|Remuneration(as % of PBT) ||(1.20) |
7. Variations in the market capitalization of the Company price earnings ratio as atthe closing date of the current FY and previous FY and percentage increase over decreasein the market quotations of the shares of the Company in comparison to the rate at whichthe Company came out with the last public offer:
|Particulars ||As at 31st March 2016 ||As at 31st March 2015 ||Variation |
|Closing rate of Share (BSE) (Rs.) ||7.30 ||9.51 ||(30.27)% |
|EPS (Rs.) ||(19.10) ||(27.93) ||(46.23)% |
|Market Capitalization (Rs./Lacs) ||1178.09 ||1534.75 ||(30.27)% |
|Price Earning ratio ||(0.38) ||(0.34) ||(10.53)% |
8. Average percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
9. Comparison of the each remuneration of the Key Managerial Personnel against theperformance of the Company:
| || ||Rs. In Lakhs |
|Particulars ||Chief Financial Officer ||Company Secretary |
|Remuneration ||29.79 ||3.40 |
|Revenue ||6800.18 ||6800.18 |
|Remuneration (as % of revenue) ||0.44 ||0.05 |
|Profit before tax (PBT) ||(2769.61) ||(2769.61) |
|Remuneration(as % of PBT) ||(1.08) ||(0.12) |
10. The key parameters for any variable component of remuneration availed by thedirectors:
11. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year:
12. It is hereby affirmed that the remuneration paid is as per the remuneration policyof the Company.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT-9 as requiredunder Section 92 of the Companies Act 2013 is marked as "Annexure - IV"which is annexed hereto and forms part of the Directors Report.
Your Directors wish to thank and acknowledge the co-operation assistance and supportextended by the Companys associates Bankers. Your Directors also wish to thank allthe employees at all levels of the organization for the contribution and the trust andconfidence reposed by the shareholders in the management of the company.
| ||For and on Behalf of The Board |
| ||HB ESTATE DEVLOPERS LIMITED |
| ||Sd/- |
| ||LALIT BHASIN |
|Place : Gurgaon ||(CHAIRMAN) |
|Date : 26.05.2016 ||(DIN : 00002114) |