Oswal Greentech Limited
The Board of Directors presents the Company's 35th Annual Report togetherwith the Audited Financial Statements for the Financial Year ended March 31st 2017.
We share with you our 35th Annual Report together with the statement ofAudited Financial statements for the year ended March 31st 2017. The Company'sperformance grouped in accordance with the new accounting standards Ind-AS (IndianAccounting Standards) is summarized below: The summary of operating results for the yearis given below:-
|Particulars ||2016-17 ||2015-16 |
|Gross Profit before Depreciation and Tax ||3040.78 ||5107.42 |
|Depreciation ||234.98 ||239.03 |
|Profit before Tax ||2805.80 ||4868.39 |
|Tax ||(1866.11) ||1301.77 |
|Profit/loss after taxation ||4671.91 ||3566.62 |
|Add : Balance brought forward of retained earnings ||4654.80 ||1088.18 |
|Balance in Profit & Loss Account ||9326.71 ||4654.80 |
REVIEW OF OPERATIONS & FUTURE OUTLOOK
During the year the company carried on the activities of development of real estatesecurities trading and investments. The company earned a profit before tax of Rs.28.06Crores and profit after tax of Rs. 46.72 Crores as against a profit before tax of Rs.48.68 Crores and profit after tax of Rs. 35.67 Crores in the previous year. The increasein the Profits after tax is due to credit of defered tax and MAT entitlement.
The company Project of residential complex at Ludhiana is nearing completion and weexpect to hand it over to the buyers in first half of year 2018. This residential projecthas been completed as per schedule and after the handover the company will take up otherprojects for development. During the year the Company has received income from intereston investments. The future outlook remains positive and encouraging.
SUBSIDIARY COMPANY AND ASSOCIATES
The company has one subsidiary namely Oswal Engineering Limited at UAE. The Board ofDirectors of the Company has decided in its meeting to voluntary wind up this SubsidiaryCompany in the interest of the business. The necessary step has already been taken andmatter is under process.
During the year the company has one associate namely M/s News Nation Network PrivateLimited. The Company has disposed off all the investments made in its associate during theperiod under reference. As on year end date M/s News Nation Network Private Limited wasnot an associate of the Company.
The Accounting of Subsidiary Company is done in consolidated financial statements inaccordance with the relevant accounting standards.
The Company has not accepted or renewed any deposits within the meaning of Section 73to 76 of Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
As a prudent economic measure and in-order to conserve the scarce liquid resources ofthe Company the Directors do not recommend any dividend for the period under review.
Due to sudden demise of Shri Abhey Kumar Oswal his holdings in the Company comprising11.11% Equity Shares were transmitted to Smt. Aruna Oswal as per his nomination.
STATUTORY AUDITORS AND THEIR REPORT
Pursuant to the provisions of Section 139 of the Companies Act 2013 the tenure ofcurrent auditors - M/s T R Chadha & Co LLP (A Limited Liability Partnership with LLPIdentification No. AAF-3926) shall come to an end at the conclusion of forthcoming AGM.Accordingly M/s Agarwal & Dhandhania Chartered Accountants (Firm Registration No.125756W) have been recommended by the Audit Committee and by the Board to be appointed asStatutory Auditors of the Company for a term of five consecutive years to hold officefrom the conclusion of the ensuing 35th Annual General Meeting until theconclusion of 40th Annual General Meeting of the Company to be held in thecalendar year 2022 subject to annual ratification by members at every Annual GeneralMeeting on such remuneration as may be decided by the Board. They being eligible haveconsented and offered themselves for appointment as Statutory Auditors for conductingaudit of accounts for five consecutive financial years starting from 2017-18.
Your Company has received necessary certificate from the Statutory Auditor to thiseffect that their appointment if made will be in accordance with the provisions ofSection 139 of the Companies Act 2013 and that they are not disqualified for suchappointment within the meaning of Section 141 of the Companies Act 2013.
As per the recommendation of the Audit Committee the Board of Directors proposes theappointment of M/s Agarwal & Dhandhania Chartered Accountants as Statutory Auditorsof the Company.
Further there are no observations (including any qualification reservation adverseremark or disclaimer) of the existing Auditors in their Audit Report that may call for anyexplanation from the Directors. Further the notes to accounts referred to in the AuditorRs s Report are self-explanatory.
SECRETARIAL AUDITORS AND THEIR REPORT
Pursuant to provisions of Section 204 of the Companies Act 2013 read with rules M/sCT & Company Company Secretaries New Delhi were appointed as the SecretarialAuditors of the Company for the Financial Year 2016-17. The copy of Secretarial AuditReport is annexed to the Board Report as an Annexure-I.
There are no qualifications or observations or adverse remarks or disclaimer of theSecretarial Auditors in the Report issued by them for the financial year 2016-17 whichcall for any explanation from the Board of Directors.
EXTRACTS OF ANNUAL RETURN AND OTHER DISCLOSURES UNDER COMPANIES (APPOINTMENT &REMUNERATION) RULES 2014
The extract of Annual Return pursuant to the provisions of Section 92 read with rule 12of the Companies (Management & Administration) Rules 2014 is furnished in Annexure-IIand is attached to this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As per the provisions of the Companies Act 2013 and Articles of Association of theCompany Smt. Aruna Oswal (DIN: 00988524) director of the Company who retires byrotation and being eligible offers herself for re-appointment. The Board of Directorsrecommends her re-appointment.
As required under Regulation 36 of Listing Regulations the requisite information ofSmt. Aruna Oswal inter alia in the nature of brief resume nature of expertise companiesin which she holds Directorship/memberships of Board Committees shareholding in allCompanies forms part of the Notice of the Annual General Meeting.
Pursuant to provision of section 196197 203 read with Schedule V of the CompaniesAct 2013 the Nomination Committee of Board and Board of Directors has approved theincrease in Remuneration of Smt. Aruna Oswal Whole Time Director w.e.f. 1stJanuary 2017 for her remaining tenure subject to the approval of members by way ofspecial resolution in the ensuing Annual General Meeting of the Company.
Pursuant to provision of section 196197 203 read with Schedule V of the CompaniesAct 2013 the Nomination Committee of Board and Board of Directors has approved theincrease in Remuneration of Shri Anil Bhalla CEO & Managing Director w.e.f. 1stJanuary 2017 for his remaining tenure subject to the approval of members by way ofspecial resolution in the ensuing Annual General Meeting of the Company.
Details of the proposal for the above Directors are mentioned in the ExplanatoryStatement under section 102 of the Companies Act 2013 of the Notice of the ensuing AnnualGeneral Meeting of the Company.
DECLARATION ON INDEPENDENT DIRECTORS
The Company has received necessary declaration from each Independent Director u/s149(7) of the Companies Act 2013 that he/she meets the criteria of independence laiddown in Section 149(6) of the Companies Act 2013 and Regulation 16(1)(b)of ListingRegulations.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 sub-section 3 (c) and subsection(5) of the Companies Act 2013 with respect to the Directors' Responsibility Statement itis hereby stated and confirmed that:
i. in preparation of the annual accounts the applicable accounting standards had beenfollowed along with proper explanation relating to material departures;
ii. that Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the financial year andof the profit of the Company for that period;
iii. that Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. that the Directors had prepared the annual accounts on a going concern basis and;
v. that the Directors had laid down the internal financial controls to be followed bythe company and that such internal financial controls are adequate and were operatingeffectively.
vi. that Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory andsecretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the Statutory Auditors and the reviews performed bymanagement and the relevant board committees including the audit committee the board isof the opinion that the Company's internal financial controls were adequate and effectiveduring FY 2016-17.
The Composition of the Audit Committee is in compliance with the provisions of Section177 of the Act and Regulation 18 of the Listing Regulations. The audit Committee has met 4times and reviewed the financial statements for each quarter/ financial year ended31.03.2017 and has not given any adverse observations.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 of Listing Regulations is presented in a separate section forming partof the Annual Report.
Your Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The Company has a strong legacy of fair transparent and ethicalgovernance practices. The Company is in compliance with the requirements stipulated underRegulations 17 to 27 read with Schedule V and clauses (b) to (i) of sub-regulation (2) ofregulation 46 of Listing Regulations as applicable with regard to Corporate Governance.
As per Listing Regulations the requisite certificate from the Company's auditorconfirming compliance with the conditions of Corporate Governance is attached to theCorporate Governance Report.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013'
The Company has zero tolerance for sexual harassment at workplace. It has adopted apolicy on prevention prohibition and Redressal of sexual harassment at workplace in linewith the provisions of the The Sexual Harassment Of Women At Work Place (PreventionProhibition And Redressal) Act 2013' and the Rules made thereunder for prevention andRedressal of complaints of sexual harassment at work place.
The Company believes in providing equal opportunities and key positions to womenprofessionals. The Company has endeavored to encourage women professionals by creatingproper policies to tackle issues relating to safe and proper working conditions andcreate and maintain a healthy and conducive work environment that is free fromdiscrimination. An Internal Complaints Committee has been set up to redress complaintsreceived regarding sexual harassment. The Company affirms that during the year underreview no cases were filed under the said Act by any of its woman employee before theInternal Complaints Committee.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 a statement showing the names and other particulars of the top 10employees in terms of remuneration drawn and the name of every employee of the companydrawing remuneration in excess of the limits set out in the said rules is furnished inAnnexure-III and is attached to this report.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are provided in the Annual Report.
NUMBER OF MEETINGS OF THE BOARD
The Board met six times during the Financial Year the details of which are given inthe Corporate Governance Report that forms part of this Annual Report. The intervening gapbetween any two meetings is within the period prescribed by the Companies Act 2013.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDEDU/S 186
Particulars of loans given are provided under Note No. 46 to the financial statement.Particulars of investment made are provided under Note No. 5 6 and 13 to the financialstatement provided in this Annual Report. The Company has not given any guarantee orsecurity in connection with a loan to any other body corporate or person.
PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY REFERRED TO IN SUB-SECTION 1OF SECTION 188
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a policy on Related Party Transaction. The policy intends to ensurethat proper reporting approval and disclosure processes are in place for all transactionsbetween the Company and related parties.
With reference to Section 134(3)(h) of the Companies Act 2013 all contracts andarrangements with related parties under section 188(1) of the Act entered by the Companyduring the financial year were in the ordinary course of business and on an arm's lengthbasis.
During the year the company has not entered into any contract or arrangement withrelated parties which could be considered material' (i.e. transactions exceeding tenpercent of the annual consolidated turnover as per the last audited financial statementsentered into individually or taken together with previous transactions during thefinancial year) according to the policy of the Company on materiality of Related PartyTransactions. Accordingly transactions that are required to be reported in Form AOC-2 areenclosed as Annexure - IV.
A detailed report on contract & arrangement made during the financial year 2016-17being arm's length transaction have been reported and annexed as Note No. 44 to theStandalone Financial Statement.
PARTICULARS OF ENERGY CONSERVATION/TECHNOLOGY ABSORPTION/FOREIGN EXCHANGE EARNING ANDOUT GO
Information in accordance with the provision of Section 134 (m) of the Companies Act2013 read with rule 8(3) of the Companies (Accounts) Rules 2014 regarding conservationof energy and technology absorption are not applicable to the Company. During the yearunder review the foreign exchange earnings were Nil (previous year Nil) and foreignexchange outgo was Rs.2.52 Lacs (previous year Rs. 28.00 Lacs).
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT
The Statutory Auditors or Secretarial Auditors of the Company have not reported anyfrauds to the Audit Committee or to the Board of Directors under Section 143(12) of theCompanies Act 2013 including rules made there under.
POLICY ON DIRECTORS' APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act 2013 the policyon appointment of Board members including criteria for determining qualificationspositive attributes independence of a Director and the policy on remuneration ofDirectors KMP and other employees is attached as Annexure - V respectively which formspart of this report.
DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT
The Company has in place comprehensive risk assessment and minimization procedureswhich are reviewed by the Board periodically.
Our risk management framework is designed to be simple consistent and clear formanaging and reporting risks from the Group's businesses to the Board. Our managementsystems organizational structures processes standards and code of conduct together formthe system of internal controls that govern how we conduct business and manage associatedrisks. We have a multi-layered risk management framework to effectively mitigate thevarious risks which our businesses are exposed to in the course of their operations.
Major risks identified by businesses and functions are systematically addressed throughmitigating actions. Risk officers have also been formally nominated at operatingbusinesses as well as at Group level to develop the risk-management culture within thebusinesses.
Our Risk Management Framework is designed to help the organization meet its objectivesthrough alignment of operating controls with the Company's mission and vision.
In the opinion of the Board there has been no identification of elements of risk thatmay threaten the existence of the Company.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED ON CORPORATE SOCIAL RESPONSIBILITIES (CSR)INITIATIVES
The Company is committed to conduct its business in a socially responsible ethical andenvironment friendly manner and to continuously work towards improving quality of life ofthe communities in its operational areas.
The Company complies with Section 135 of the Act and the approach is focused onlong-term programmes aligned with community needs.
The Company has in place a CSR policy in line with Schedule VII of the Companies Act2013. As per the policy the CSR activities are focused not just around the offices of theCompany but also in other geographies based on the needs of the communities. Themain-focus areas where CSR programmes of Oswal's run are:
1. Eradicating hunger poverty and malnutrition.
2. To support the medical treatment of cancer patients through Mohan Dai Oswal CancerHospital.
3. To provide residential houses to the weaker section of society.
4. To promote education among children and livelihood enhancement projects.
In view of absence of average net profits of the Company calculated as per statutoryrequirements no expenditure was incurred on CSR activities by the Company during theyear.
A brief overview of CSR initiatives forms part of the Directors' Report and is annexedhereto as Annexure VI.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS/ COURTS/TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no orders passed by any authority impacting the going concern status andcompany Rs s operations in future.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations the Board in consultation with its Nomination & Remuneration Committeehas formulated a framework containing inter-alia the criteria for performance evaluationof the entire Board of the Company its Committees and individual Directors includingIndependent Directors. A structured questionnaire covering various aspects of thefunctioning of the Board and its Committee such as adequacy of the constitution andcomposition of the Board and its Committees matters addressed in the Board and Committeemeetings processes followed at the meeting Board`s focus regulatory compliances andCorporate Governance etc. is in place. Similarly for evaluation of individualDirector's performance the questionnaire covering various aspects like his/ her profilecontribution in Board and Committee meetings execution and performance of specificduties obligations regulatory compliances and governance etc. is also in place. Boardmembers had submitted their response for evaluating the entire Board respectiveCommittees of which they are members and of their peer Board members includingChairperson of the Board.
A separate meeting of Independent Directors was held on August 6th 2016without the presence of Non-Independent Directors and the members of management anddiscussed inter-alia the performance of Non-Independent Directors and Board as a wholeand the performance of the Chairperson of the Company after taking into consideration theviews of Executive and Non- Executive Directors. The Nomination and Remuneration Committeehas also carried out evaluation of every Director Rs s performance. The performanceevaluation of all the Independent
Directors have been done by the entire Board excluding the Director being evaluated.On the basis of performance evaluation done by the Board it shall be determined whetherto extend or continue their term of appointment whenever the respective term expires. TheDirectors expressed their satisfaction with the evaluation process.
INTERNAL FINANCIAL CONTROL SYSTEM
According to Section 134(5)(e) of the Companies Act 2013 the term Internal FinancialControl (IFC) means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
The Company has a well placed proper and adequate IFC system which ensures that allassets are safeguarded and protected and that the transactions are authorized recordedand reported correctly. The Internal Auditors independently evaluate the adequacy ofinternal controls and concurrently audit the majority of the transactions in value terms.Independence of the audit and compliance is ensured by direct reporting of InternalAuditors to the Audit Committee of the Board. During the year the consultants were engagedfor providing assistance in improvising IFC framework including preparation of ManagementRisk Control Matrix for various processes and deployment of Self Assessment Tool.
OGL has aligned its current systems of internal financial control with the requirementof Companies Act 2013 on lines of globally accepted risk based framework as issued by thecommittee of sponsoring organisations (COSO) of the treadway commission. The InternalControl Integrated Framework (the 2013 framework) is intended to increasetransparency and accountability in an organisation's process of designing and implementinga system of internal control. The framework requires a company to identify and analyserisks and manage appropriate responses. The Company has successfully laid down theframework and ensured its effectiveness.
OGL's internal controls are commensurate with its size and the nature of itsoperations. These have been designed to provide reasonable assurance with regard torecording and providing reliable financial and operational information complying withapplicable statutes safeguarding assets from unauthorised use executing transactionswith proper authorisation and ensuring compliance of corporate policies. OGL has awell-defined delegation of power with authority limits for approving revenue as well asexpenditure.
Processes for formulating and reviewing annual and long term business plans have beenlaid down.
Our management assessed the effectiveness of the Company's internal control overfinancial reporting (as defined in Regulation 17 of Listing Regulations) as of March 31st2017. The assessment involved self review peer review and external audit.
T R Chadha & Co LLP the statutory auditors of OGL has audited the financialstatements included in this annual report and has issued an attestation report on ourinternal control over financial reporting (as defined in section 143 of Companies Act2013).
OGL has appointed R Arora & Associates to oversee and carry out internal audit ofits activities. The audit is based on an internal audit plan which is reviewed each yearin consultation with the statutory auditors (T R Chadha & Co LLP) and the auditcommittee. In line with international practice the conduct of internal audit is orientedtowards the review of internal controls and risks in its operations such as accounting andfinance procurement employee engagement travel insurance IT processes etc.
Suggestions for improvement are considered and the audit committee follows up oncorrective action. The audit committee also meets OGL statutory auditors to ascertaininter alia their views on the adequacy of internal control systems and keeps the board ofdirectors informed of its major observations periodically.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl System in the Company which should be adequate and shall operate effectively. Rule8(5)(viii) of Companies (Accounts) Rules 2014 requires the information regarding adequacyof Internal Financial Controls with reference to the financial statements to be disclosedin the Board Rs s report.
The internal financial controls were in operation during the reporting period fromApril 1st 2016 to March 31st 2017. Our management assessed theeffectiveness of the Company's internal control over financial reporting as of March 31st2017.
TR Chadha & Co LLP Chartered Accountants the Statutory Auditors has audited thefinancial statements. They assess the internal financial controls including the EntityLevel Controls Process Application and Transaction Controls and Information TechnologyGeneral Controls. The audit Committee reviews reports submitted by the management andaudit reports submitted by internal auditors and statutory auditors. Suggestions forimprovement are considered and the audit Committee follows up on corrective action. Theaudit Committee also meets statutory auditors to ascertain inter alia their views on theadequacy of internal control systems and keeps the Board of Directors informed of itsmajor observations periodically.
The Company has a comprehensive risk management framework. The Company has in place awell-defined Whistle Blower Policy/ Vigil Mechanism. Compliance of secretarial functionsis ensured by way of secretarial audit.
Based on its evaluation as defined in Section 177 of Companies Act 2013 and Regulation18 of Listing Regulations our audit Committee has concluded that as of March 31st2017 our internal financial controls were adequate and operating effectively.
CODE OF CONDUCT
The members of the Board and senior management personnel have affirmed the compliancewith Code applicable to them during the year ended March 31st 2017. The annualreport of the Company contains a certificate by the CEO and Managing Director in terms ofListing Regulations on the compliance declarations received from Independent DirectorsNon-executive Directors and Senior Management.
Human resources play a significant role in your Company's growth strategy. Your Companyemphasized on talent nurturing retention and engaging in a constructive relationship withemployees with a focus on productivity and efficiency and underlining safe workingpractices. The Board of Directors would like to take this opportunity to place on recordits appreciation for the committed services and contributions made by the employees of theCompany during the year.
LISTING/DELISTING OF SHARES
Presently the Company's equity shares are listed on the following Stock Exchanges:
The National Stock Exchange of India Ltd. Mumbai
The Bombay Stock Exchange Mumbai
The Calcutta Stock Exchange Association Ltd. Kolkata
The Ahmedabad Stock Exchange. Ahmedabad
The Applications for delisting of shares are pending with Calcutta Stock Exchange andAhmedabad Stock Exchange.
The equity shares of the Company listed with National Stock Exchange of India Ltd. andBombay Stock Exchange Mumbai.
Listing Fee for the year 2017-18 has been paid to the National Stock Exchange of IndiaLtd. and Bombay Stock Exchange Mumbai.
Annual Custody Fees for the year 2017-18 has been paid to the National SecuritiesDepository Limited Mumbai and Central Depository Services Limited Mumbai.
Your Directors place on record their sincere gratitude and appreciation for thecontinuous support and efforts of the shareholders customers suppliers businessassociates employees and Company's Bankers for the assistance co-operation andencouragement they extended to the Company at all levels for steering the growth oforganization.
| ||For & on behalf of the Board |
| ||Oswal Greentech Limited |
| ||Aruna Oswal |
|Place : New Delhi ||Chairperson |
|Date : 09.08.2017 ||DIN: 00988524 |