Your Directors have pleasure in presenting the Twenty First Annual Report and theaudited accounts of the Company for the year ended March 31 2016.
The highlights of the standalone financial results for the year ended March 31 2016are as under:
| ||Year ended March 31 2016 ||Year ended March 31 2015 |
| ||(Amount in Rs) ||(Amount in Rs) |
|Profit before Depreciation & Amortisation expenses and Tax ||286998928 ||1393284372 |
|Less: Depreciation & Amortisation expenses ||25677731 ||48046695 |
|Profit before Tax ||261321197 ||1345237677 |
|Less: Provision for Taxation & prior period tax adjustments ||92668834 ||162612038 |
|Profit after Tax and prior period tax adjustment ||168652363 ||1182625639 |
|Add: balance of profit brought forward ||864671275 ||656642890 |
|Amount available for appropriation ||1033323638 ||1839268529 |
|Appropriations || || |
|Interim Dividend on Equity Shares ||877132756 ||795900248 |
|Corporate Dividend Tax on Interim Dividend on Equity Shares ||148027120 ||100165948 |
|Depreciation on transition to Schedule II of Companies Act 2013 on || || |
|tangible fixed assets with nil remaining useful life (net of deferred tax) || ||78531058 |
|Balance of profit carried forward to Balance Sheet ||8163762 ||864671275 |
The Company is a corporate member of the capital market debt market and derivativesegment of the National Stock Exchange of India Limited (NSE) a corporate member of thecapital market and derivative segment of the BSE Limited (BSE) and Metropolitan StockExchange of India Limited and registered portfolio manager. The Company is in the businessof stock and share broking commodities trading depository service distribution ofMutual Funds/IPOs and other investments and tax planning products.
The Total Revenue of the Company during the year was Rs 104.52 crores with a net profitof Rs 16.87 crores. The consolidated revenue of the Company was Rs 409.63 crores and theconsolidated net profit was Rs 73.84 crores.
FUTURE BUSINESS OUTLOOK
The year witnessed high volatility and the equity markets were kept under pressure bythe Greece crisis China Currency devaluation falling commodity prices and US Fed Ratehike.
The Indian Economy currently stands at a strong footing with the interest rate rollingdownwards key macro variables like CAD and Fiscal deficit mostly under control and theGovernments continued push for reforms and ease of doing business. The CapitalMarkets are expected to perform better on improved corporate balance sheet and revival ofinvestment cycle. Full transmission of interest rates and lower commodity pricestranslating to lower input costs for corporate would help pick up the corporate earnings.Challenges would be in the form of global growth slowdown and any slowdown by thegovernment in pushing through critical reforms.
The fructification of the affordable housing push and Real Estate Bill will provide animpetus to sales and the Company is geared to take advantage of the same through itsrealty distribution business.
TRAINING AND HUMAN RESOURCE MANAGEMENT
Your Organisations vision is to create a cohesive work environment thatencourages the employees to pursue their professional and self-development goals inaddition to building operational excellence and a sense of belongingness. In an endeavourto augment the right talent the recruitment process was overhauled by buildingcapabilities of the talent acquisition team to identify the right talent. We are alsodeveloping functional and behavioural competencies to build a dedicated high performingteam that supports the significant growth. Our focus and belief lies in enabling andempowering our talent pool for the challenges of tomorrow by providing new avenues oflearning and development through behavioural and leadership interventions. In our constanteffort of rewarding talent ESOPs were allotted to the top performers with consistenttrack record. With our people working at their highest capabilities we are creating aworkforce thats engaged productive and committed towards the goals and objectivesof Indiabulls Ventures Limited.
In keeping with the Company's policy of rewarding its shareholders the Board ofDirectors of the Company had for the year 2015-16 declared four interim dividendsaggregating to Rs.3/- per share on shares of face value Rs. 2/-each. (First interimdividend of Re. 1/- was declared by the Board in its meeting held on April 24 2015Second interim dividend of Re. 1/- was declared by the Board in its meeting held on July21 2015 Third interim dividend of Re. 0.50 was declared by the Board in its meeting heldon October 21 2015 and Fourth interim dividend of Re. 0.50 was declared by the Board inits meeting held on January 20 2016) with the total outflow of Rs. 102.52 Cr. (inclusiveof Corporate Dividend Tax).
During the financial year 2015-16 the unclaimed dividend pertaining to the financialyear ended March 31 2008 got transferred to Investor Education and Protection Fundafter giving due notice to the members.
In accordance with the provisions of the Companies Act 2013 (the Act) and in terms ofthe Memorandum and Articles of Association of the Company Mr. Ashok Kumar Sharma (DIN:00010912) Director of the Company retires by rotation at the ensuing Annual GeneralMeeting of the Company and being eligible offers himself for reappointment. The Boardrecommends his re-appointment.
The present composition of the Board along with the brief resume of the Directorproposed to be reappointed nature of his expertise in specific functional areas and namesof companies in which he holds directorships and memberships/ chairmanships of BoardCommittees have been provided in the Report on Corporate Governance forming part of thisAnnual Report.
The paid up equity share capital of the Company as on March 31 2016 was Rs.585739084 comprising of 292869542 equity shares of Rs. 2/- each. Subsequently inorder to augment the long-term resources of the Company for meeting the fundingrequirements for its business purposes the Board at its meeting held on June 15 2016has approved the proposal to issue and allot to certain promoter group entities and toCEO & Whole-time director of the Company upto 58300000 (Five crore eighty threelakhs) warrants convertible into equivalent number of equity shares of face value of Rs. 2each at a conversion price of Rs. 19.75 in accordance with the applicable laws andguidelines. The same has also been approved by the shareholders inter alia in theirextra-ordinary general meeting held on July 15 2016. Consequent to the conversion ofthese Warrants into equity shares within a period of 18 months from the date ofallotment the paid-up share capital of the Company shall stand increased accordingly.
EMPLOYEE STOCK OPTIONS
During the current financial year on May 12 2016 the Company has re-granted underthe "Indiabulls Ventures Limited Employees Stock Option Scheme - 2009"9500000 (Ninety five lakhs) Stock Options to certain eligible employees at an exerciseprice of Rs. 16/- per option. Further on July 1 2016 the Company has re-granted underthe "Indiabulls Ventures Limited Employees Stock Option Scheme - 2008" and"Indiabulls Ventures Limited Employees Stock Option Scheme - 2009" 9700000(Ninety seven lakhs) Stock Options and 10000000 (One crore) Stock Options respectivelyto certain eligible employees at an exercise price of Rs. 24.15 per option.
The disclosures required to be made under the Securities and Exchange Board of India(Share Based Employee Benefits) Regulations 2014 and the Companies Act 2013 read withRule 12 of the Companies (Share Capital and Debentures) Rules 2014 in respect of allexisting ESOP Schemes of the Company are set out in the Annexure to this Report.
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 2016-17 have been paid. The GDRs issued by the Company continue to remainlisted on Luxembourg Stock Exchange.
(a) Statutory Auditors
M/s Deloitte Haskins & Sells LLP (Firm Regn. No. 117366W / W-100018) the statutoryauditors of the Company were appointed by the members in their nineteenth Annual GeneralMeeting held on September 29 2014 for a period of three years i.e. until the conclusionof the Twenty Second Annual General Meeting of the Company. The Company has received acertificate from the Auditors to the effect that their continuation as such from theconclusion of this Annual General Meeting until the conclusion of Twenty Second AnnualGeneral Meeting is in accordance with the provisions of the Section 141(3)(g) of theCompanies Act 2013. The Board recommends the ratification of the appointment of M/sDeloitte Haskins & Sells LLP as statutory auditors of the Company till the conclusionof Twenty Second Annual General Meeting of the Company.
The Notes to the Accounts referred to in the Auditors Report are self explanatory and 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 2015-16. 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 2015-16 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 Health Sanitation Animal Developmentand Development of Art & Culture as per its CSR Policy (available on yourCompanys website http://www.securities.indiabulls.com/) and the details arecontained in the Annual Report on CSR Activities given in Annexure 2 forming part of thisReport. These projects are in accordance with Schedule VII of the Companies Act 2013 readwith the relevant rules.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (SEBI LODR Regulations) Managements Discussion and AnalysisReport for the year under review is presented in a separate section forming part of thisAnnual 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 is presented in a separate sectionforming part of this Annual 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 accountsfor the year ended March 31 2016 the applicable accounting standards had been followedalong with proper explanation relating to material departures if any; b) that suchaccounting policies as mentioned in the Notes to the Financial Statements had beenselected and applied consistently and judgments and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2016 and the profit and loss of the company for the year ended onthat date; c) that proper and sufficient care had been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; d) that the annual accounts had been prepared on a going concernbasis; e) that proper internal financial controls were in place and that such financialcontrols were adequate and were operating effectively; and f) that proper systems toensure compliance with the provisions of all applicable laws were in place and wereadequate 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 partof this Report.
Electronic copies of the Annual Report 2016 and Notice of the 21st 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 2016 and Notice of the 21st AGM are sent in the permittedmode. The Company is providing e-voting facility to all members to enable them to casttheir votes electronically on all resolutions set forth in the Notice of the 21stAGM. 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.
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 || |
| ||Sd/- ||Sd/- |
| ||Divyesh B. Shah ||Ashok Kumar Sharma |
|Date: July 27 2016 ||Whole-time Director & ||Whole-time Director |
|Place: Mumbai ||Chief Executive Officer || |