Your Directors have pleasure in presenting the Twenty Second Annual Report and theaudited statement of accounts of the Company for the financial year ended March 31 2017.
The highlights of the standalone financial results for the financial year ended March31 2017 are as under:
| ||Year ended ||Year ended |
| ||31-Mar-17 ||31-Mar-16 |
| ||(Amount in Rs.) ||(Amount in Rs.) |
|Profit before Depreciation & Amortisation expenses and Tax ||609004115 ||286998928 |
|Less: Depreciation & Amortisation expenses ||16226995 ||25677731 |
|Profit before Tax ||592777120 ||261321197 |
|Less: Provision for Taxation & prior period tax adjustments ||121847591 ||92668834 |
|Profit after Tax and prior period tax adjustment ||470929529 ||168652363 |
|Add: balance of profit brought forward ||8163762 ||864671275 |
|Amount available for appropriation ||479093291 ||1033323638 |
|Appropriations || || |
|Interim Dividend on Equity Shares ||320206920 ||877132756 |
|Corporate Dividend Tax on Interim Dividend on Equity Shares ||15269644 ||148027120 |
|Transfer to General Reserves || || |
|Balance of profit carried forward to Balance Sheet ||143616727 ||8163762 |
The Total Revenue of the Company during the financial year ended March 31 2017 was Rs.151.42 crores with a net profit of Rs. 47.09 crores. The Company proposes to retain theentire amount of Rs. 143616727 in the statement of profit & loss. The consolidatedrevenue of the Company was Rs. 509.11 crores and the consolidated net profit was Rs.102.25 crores.
In keeping with the Company's policy of rewarding its shareholders the Board ofDirectors of the Company had for the financial year 2016-17 declared interim dividendof Re. 1/- per share on shares of face value Rs. 2/- each in its meeting held on March17 2017.
During the financial year 2016-17 the unclaimed dividend pertaining to the financialyear ended March 31 2009 got transferred to Investor Education and Protection Fundafter giving due notice to the members. Those members who have not so far claimed theirdividend for the subsequent financial years are also advised to claim it from the Companyor Karvy Computershare Private Limited.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
To achieve the highest standards of Corporate Governance in its management and tointroduce a true sense of professionalism in the Board of the Company (the Board) thefollowing individuals have been appointed as the Additional Directors on the Board witheffect from August 28 2017:
(a) Mr. Sameer Gehlaut (DIN: 00060783) as Non - Executive Chairman of the Company.
(b) Mr. Gagan Banga (DIN: 00010894) as Non-Executive Director of the Company.
(c) Mr. Ajit Kumar Mittal (DIN: 02698115) as Non-Executive Director of the Company.
(d) Mr. Pinank Jayant Shah (DIN: 07859798) as Whole-Time Director and Key ManagerialPersonnel of the Company designated as its Executive Director.
(e) Mrs. Vijayalakshmi Rajaram Iyer (DIN: 05242960) Ex-Member Finance &Investment and Enforcement Insurance Regulatory and Development Authority of India andEx-Chairman & Managing Director of Bank of India as Independent Director of theCompany.
(f) Mr. Shyam Lal Bansal (DIN: 02910086) Ex-Chairman & Managing Director ofOriental Bank of Commerce as Independent Director of the Company.
(g) Mr. Alok Kumar Misra (DIN: 00163959) Ex-Chairman & Managing Director of Bankof India as Independent Director of the Company.
Being Additional Directors the respective appointments of all the above mentionedindividuals on the Board is upto the date of ensuing Annual General Meeting. Keeping inview of their leadership and guidance abilities wide and rich professional knowledge andexperience in diverse fields viz. finance banking regulatory and public policy etc.the Board recommends the appointment of all these Directors at the ensuing Annual GeneralMeeting of the Company. During the year Mr. Ashok Kumar Sharma (DIN: 00010912) hadresigned from the Board w.e.f. August 26 2016. Mr. Amiteshwar Choudhary (DIN: 01679090)(who was appointed on the Board on September 28 2016) and Ms. Pia Johnson (DIN: 00722403)have resigned from the Board w.e.f. August 28 2017. The Board has placed on record itsappreciation for the contribution made by Mr. Sharma Mr. Choudhary and Ms. Johnsonduring their tenure of office.
All the Independent Directors of the Company have given declaration that they meet thecriteria of independence laid down under Section 149 (6) of the Companies Act 2013 (theAct).
In accordance with the provisions of Section 152 of the Act and in terms of theMemorandum and Articles of Association of the Company Mr. Divyesh B. Shah (DIN:00010933) Whole-time Director and CEO of the Company retires by rotation at the ensuingAnnual General Meeting of the Company and being eligible offers himself for reappointment.The Board recommends his re-appointment.
Present composition of the Board is provided in the Report on Corporate Governancepresented in a separate section forming part of this Annual Report. The brief resume ofthe Directors proposed to be appointed/reappointed nature of their expertise in specificfunctional areas terms of appointment and names of companies in which they holddirectorships and memberships/chairmanships of Board Committees are provided in theNotice convening the 22nd Annual General Meeting of the Company.
The paid up equity share capital of the Company as on March 31 2017 was Rs.640413840 comprising of 320206920 equity shares of face value of Rs. 2/- each.
Subsequently during the current financial year till the date of this report theCompany has issued and allotted the following securities:
(i) Pursuant to and in terms of shareholders' approval dated July 15 2016 and in termsof Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations2009 as amended (ICDR Regulations) the Company on April 10 2017 had allotted33650000 fully Paidup equity shares of face value of Rs. 2/- each against conversion of33650000 convertible warrants earlier issued on preferential basis to certain promotergroup entities and Whole-time Director and CEO of the Company.
(ii) Pursuant to and in terms of shareholders' approval dated April 25 2017 and interms of Chapter VII of ICDR Regulations the Company on April 28 2017 has issued andallotted an aggregate of 33800000 warrants convertible into equivalent number of equityshares of face value of Rs. 2 each at a conversion price of Rs. 43.75 (including a premiumof Rs. 41.75) per equity share to certain promoter group entities of the Company.
(iii) Pursuant to and in terms of shareholders' approval dated May 6 2017 and in termsof Chapter VII of ICDR Regulations the Company on May 10 2017 has issued and allottedan aggregate of 38865582 fully paid up equity shares of face value of Rs. 2/- each ofthe Company at an issue price of Rs. 58.40 (including a premium of Rs. 56.40) per equityshare to Cinnamon Capital Limited a Category III foreign portfolio investor registeredwith the Securities and Exchange Board of India.
(iv) The Company on May 15 2017 has issued and allotted 519900 fully paid up equityshares of face value Rs. 2/ - each of the Company to eligible employees upon exercise ofoptions vested in their favour under -'Indiabulls Ventures Limited Employees Stock OptionScheme - 2008' and 'Indiabulls Ventures Limited Employees Stock Option Scheme - 2009'.
(v) Pursuant to and in terms of shareholders' approval dated May 22 2017 and in termsof Chapter VII of ICDR Regulations the Company on June 6 2017 has issued and allottedan aggregate of 47390000 fully paid up equity shares of face value of Rs. 2/- each ofthe Company at an issue price of Rs. 94.70 (including a premium of Rs. 92.70) per equityshare to Tamarind Capital Pte Ltd a company incorporated in Singapore.
(vi) The Company on June 20 2017 has issued and allotted 1758600 fully paid upequity shares of face value Rs. 2/- each of the Company to eligible employees uponexercise of options vested in their favour under - 'Indiabulls Ventures Limited EmployeesStock Option Scheme - 2008' and 'Indiabulls Ventures Limited Employees Stock Option Scheme- 2009'.
As a result of the aforesaid allotments of equity shares the paid up share capital ofthe Company stands increased to Rs. 884782004 comprising of 442391002 equity shares ofRs. 2/- each.
EMPLOYEE STOCK OPTIONS
During the year under review on May 12 2016 the Company had granted 9500000 StockOptions under "Indiabulls Ventures Limited Employees Stock Option Scheme -2009" to certain eligible employees at an exercise price of Rs. 16/- per option.Further on July 1 2016 the Company had granted an aggregate of 19700000 StockOptions (9700000 Stock Options under "Indiabulls Ventures Limited Employees StockOption Scheme - 2008" and 10000000 Stock Options under "Indiabulls VenturesLimited Employees Stock Option Scheme - 2009") to certain eligible employees at anexercise price of Rs. 24.15 per option. All these schemes are in compliance with SEBI(Share Based Employee Benefits) Regulation 2014.
The disclosures required to be made in compliance with the applicable regulations areset out in the Annexure to this Report and have been placed on the website of the Company http://www.indiabullsventures.com/.
During the year under review the Company has not accepted any deposits from thepublic falling within the ambit of Chapter V of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014.
LISTING WITH STOCK EXCHANGES
The Equity Shares of the Company continue to remain listed at BSE Limited and NationalStock Exchange of India Limited. The listing fees payable to both the exchanges for thefinancial year 2017-18 have been paid. The GDRs issued by the Company continue to remainlisted on Luxembourg Stock Exchange.
(a) Statutory Auditors
In compliance with the applicable provisions of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 the existing term of M/s Deloitte Haskins& Sells LLP (Firm Regn. No. 117366W / W- 100018) Chartered Accountants as theStatutory Auditors of the Company shall come to an end at the conclusion of the ensuingAnnual General Meeting of the Company and are not eligible for re-appointment as theStatutory Auditors of the Company. The Board places on record its appreciation for theservices rendered by M/s. Deloitte Haskins & Sells LLP as the Statutory Auditors ofthe Company.
The Board on the proposal of the Audit Committee have recommended for the appointmentof M/s Walker Chandiok & Co LLP Chartered Accountants (ICAI Registration No.:001076N/N500013) (a member of Grant Thornton International) as the Statutory Auditors ofthe Company for a term of 5 years subject to ratification of their appointment by theMembers at every intervening Annual General Meeting held after this Annual GeneralMeeting. Consent and certificate u/s 139 of the Companies Act 2013 have been obtainedfrom M/s Walker Chandiok & Co LLP Chartered Accountants to the effect that theirappointment if made shall be in
accordance with the applicable provisions of the Act and the Rules issued thereunder.As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 M/s Walker Chandiok & Co LLP Chartered Accountants has confirmed that theyhold a valid certificate issued by the Peer Review Board of ICAI.
The Notes to the Accounts referred to in the Auditors' Report are self - explanatoryand therefore do not call for any further explanation.
(b) Secretarial Auditors & Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with therules made thereunder the Company has appointed M/s A. K. Kuchhal & Co. a firm ofCompany Secretaries in practice as its Secretarial Auditors to conduct the secretarialaudit of the Company for the Financial Year 2016-17. The Company has provided allassistance facilities documents records and clarifications etc. to the SecretarialAuditors for conducting their audit. The Report of Secretarial Auditors for the FinancialYear 2016-17 is annexed as "Annexure 1" and forming part of this Report. TheReport is self - explanatory and therefore do not call for any further explanation.
CORPORATE SOCIAL RESPONSIBILITY
As part of its initiatives under "Corporate Social Responsibility (CSR)" theCompany has undertaken projects in the areas of Education Animal Welfare/Development andHealth as per its CSR Policy (available on your Company's website http://www.indiabullsventures.com/)and the details are contained in the Annual Report on CSR Activities given in"Annexure 2" forming part of this Report. These projects are in accordance withSchedule VII of the Companies Act 2013 read with the relevant rules.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (SEBI LODR Regulations) Management's Discussion and Analysis Report(MDA) for the year under review is presented in a separate section forming part of thisAnnual Report. The disclosures made under MDA is to be read together with this Report.
CORPORATE GOVERNANCE REPORT
Pursuant to Regulation 24 of SEBI LODR Regulations a separate section on CorporateGovernance Practices followed by the Company together with a certificate from apracticing Company Secretary confirming compliance form part of this Annual Report whichis to be read together with this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Companies Act 2013:
a) that in the preparation of the annual accounts for the year ended March 31 2017the applicable accounting standards had been followed along with proper explanationrelating to material departures if any;
b) that such accounting policies as mentioned in the Notes to the Financial Statementshad been selected and applied consistently and judgments and estimates have been made thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2017 and the profit and loss of the Company for the yearended on that date;
c) that proper and sufficient care had 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) that the annual accounts had been prepared on a going concern basis;
e) that proper internal financial controls were in place and that such financialcontrols were adequate and were operating effectively; and
f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and were adequate and operating effectively.
INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT 2013 READWITH THE RELEVANT RULES AND SEBI LODR REGULATIONS
The information required to be disclosed pursuant to Section 134 and Section 197 of theCompanies Act 2013 read with the relevant rules (to the extent applicable) and SEBI LODRRegulations not elsewhere mentioned in this Report are given in "Annexure A"forming part of this Report.
The Company's Environmental Management System (EMS) focuses on assessing theenvironmental cost of the Company's services and activities and seeks to reduce oreliminate the negative impact and increase their positive effects. Environmentalsustainability is important to the Company and is one of the reasons behind the Company'spush to digitize its processes.
Electronic copies of the Annual Report 2017 and Notice of the 22nd AGM aresent to all the members whose email addresses are registered with the Company/DepositoryParticipant(s). For members who have not registered their email addresses physical copiesof the Annual Report 2017 and Notice of the 22nd AGM are sent in the permittedmode.
The Company is providing e-voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice of the 22ndAGM. This is pursuant to Section 108 of the Companies Act 2013 and Rule 20 of theCompanies (Management and Administration) Rules 2014 as substituted by Companies(Management and Administration) Amendment Rules 2015 and Regulation 44 of SEBI LODRRegulations. The instructions for remote e-voting are provided in the Notice convening the22nd AGM.
Your Company has been able to operate efficiently because of the culture ofprofessionalism creativity integrity and continuous improvement in all functional areasand the efficient utilization of all its resources for sustainable and profitable growth.Your Directors wish to place on record their appreciation of the contributions made andcommitted services rendered by the employees of the Company at various levels. YourDirectors also wish to express their gratitude for the continuous assistance and supportreceived from the investors clients bankers regulatory and government authoritiesduring the year.
| ||For and on behalf of the Board of Directors |
| ||Divyesh B. Shah ||Pinank Jayant Shah |
|Date: August 28 2017 ||Whole-time Director & CEO ||Executive Director |
|Place: Mumbai ||DIN: 00010933 ||DIN: 07859798 |