Prozone Intu Properties Ltd.
|BSE: 534675||Sector: Infrastructure|
|NSE: PROZONINTU||ISIN Code: INE195N01013|
|BSE 10:03 | 19 Jan||61.90||
|NSE 09:48 | 19 Jan||61.65||
|Mkt Cap.(Rs cr)||945|
|Mkt Cap.(Rs cr)||944.59|
Prozone Intu Properties Ltd. (PROZONINTU) - Director Report
Company director report
To the Members
Prozone Intu Properties Limited
(Erstwhile "Prozone Capital Shopping Centres Limited")
Your Directors are delighted to present their report on the business and operations ofyour Company for the year ended March 312016.
FINANCIAL RESULTS & OPERATIONS
STATE OF COMPANY'S AFFAIRS/FINANCIAL PERFORMANCE
The Company's gross (total) income for the financial year ended 31st March2016 increased to ' 1552.06 lakhs against ' 1509.36 lakhs during the previous year. Theprofit before tax increased to ' 598.54 lakhs from ' 365.67 lakhs as recorded duringprevious year. The profit after tax increased to ' 448.22 lakhs from ' 254.56 lakhs in theprevious year.
The Company's gross (total) income for the financial year ended 31st March2016 increased to ' 9463.16 lakhs from ' 6193.62 lakhs during the previous year. Theprofit/(loss) before tax increased to ' 789.63 lakhs against loss of ' 1199.28 lakhs asrecorded during previous year. The profit/(loss) after tax after minority interestincreased to ' 738.02 lakhs against loss of ' 649.94 lakhs in the previous year.
Considering the cash requirement for business growth your Directors decided not topropose dividend for the year ended March 31 2016 and there is no appropriation of anyamount to General Reserve during the year under review.
The equity shares of the Company are listed on The BSE Limited (BSE) and The NationalStock Exchange of India Ltd. (NSE) and the listing fees for the year 2016-17 have beenalready paid.
The paid up Equity Share Capital as at 31st March 2016 stood at ' 3052.06lacs. During the year under review the Company has not issued shares with differentialvoting rights nor has granted any stock options or sweat equity. As on 31stMarch 2016 none of the Directors of the Company hold instruments convertible into equityshares of the Company.
SUBSIDIARY AND JOINT VENTURE COMPANIES
The Company has 10 subsidiary companies as on 31st March 2016 c includingstep-down subsidiaries and 2 Joint Venture Companies.
1. Alliance Mall Developers Co. Private Limited
2. Jaipur Festival City Private Limited.
3. Kruti Multitrade Private Limited
4. Royal Mall Private Limited
5. Prozone Liberty International Limited Singapore
6. Empire Mall Private Limited
7. Hagwood Commercial Developers Private Limited
8. Omni Infrastructure Private Limited
9. Prozone Overseas Pte. Limited Singapore
10. Prozone International Coimbatore Limited Singapore
Joint Venture Companies
1. Moontown Trading Company Private Limited
2. Emerald Buildhome Private Limited
The Board of Directors ('the Board') regularly reviews the affairs of the subsidiaries.In compliance with section 129 (3) of the Companies Act 2013 we have preparedconsolidated financial statements of the Company and all its subsidiaries which form partof the Annual Report. Further a statement containing the salient features of thefinancial statements of subsidiaries in the prescribed format AOC-1 is appended to thisReport. The Statement also provides the details of performance financial positions ofeach of the subsidiaries.
The annual accounts of the subsidiary companies and related detailed information aremade available to the members of the company and of the subsidiary companies seeking suchinformation. The annual accounts of the subsidiary companies are also made available forinspection by any member at the registered office of the company during business hours.
The copies of accounts of subsidiaries companies can be sought by the member of thecompany by making a written request address to the Company Secretary at the registeredoffice of the company.
As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate issued by PracticingCompany Secretary confirming compliance forms an integral part of this Report
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of operations performance and future outlook of the Company and itsbusiness as stipulated under Reg. 34 of the SEBI (LODR) Regulations 2015 is presentedin a separate section forming part of Annual Report under the head 'Management Discussionand Analysis'.
During the year under review the Company has neither invited nor accepted the depositfrom public within the meaning of Section 73 of the Companies Act 2013 read with theCompanies (Acceptance of Deposits) Rules 2014 amended from time to time
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year Company has appointed Mr. Dushyant Singh Sangar and Ms. Deep MisraHarris as an additional Non Executive Director and woman Independent Director respectivelyeffective from 8th February 2016.
Mr. John Abel Non Executive Director of the Company has resigned from the Board witheffect from 8th February 2016. The Board placed on record their sincere appreciation forthe valuable service rendered by Mr. John Able during his entire tenure and thanked himfor all dedication and expertise which was brought by him on the Board.
Mr. David Fischel Non Executive Director of the Company due to certainpre-commitments and other engagements requested the Company to appoint Mr. John Abel ashis Alternate Director accordingly the Board of Directors in its meeting held on 8thFebruary 2016 appointed Mr. John Abel as an Alternate Director to Mr. David Fischel.
Pursuant to the provisions of section 152 of the Companies Act 2013 the office of Mr.Salil Chaturvedi Director is liable to retire by rotation at the ensuing Annual GeneralMeeting and being eligible has offered himself for re-appointment. The Board recommendshis re-appointment for consideration of the Meeting of the Company at the forthcomingAnnual General Meeting.
A brief resume of directors seeking appointment/re- appointment consisting nature ofexpertise in specific functional areas and name of companies in which they holddirectorship and/or membership/ chairmanships of committees of the respective Boardsshareholding and relationship between directorship inter-se as stipulated under Reg. 36(3)of the SEBI (LODR) Regulations 2015 are given in the section of notice of AGM formingpart of the Annual Report
Appointment and Remuneration of Directors
The appointment and remuneration of Directors is governed by the Remuneration Policy ofthe Company which also contains the criteria for determining qualifications positiveattributes and independence of Directors. The Policy aims at attracting and retaining highcaliber personnel from diverse educational fields and with varied experience to serve onthe Board for guiding the Management team to enhanced organizational performance.
The Nomination & Remuneration Committee and Board of Directors in their respectivemeetings held on 8th February 2016 consented for the increment in remuneration of Mr.Nikhil Chaturvedi Managing Director upto Rs. 10 Lac per month effective from 1st February2016 and the said increment is within the pay scale already approved by the members of theCompany.
The Company has received necessary declarations from all Independent Directors pursuantto the requirement of section 149(7) of the Companies Act 2013 that they fulfill thecriteria of independence laid down in section 149(6) read with Schedule IV to CompaniesAct 2013 and Reg. 16 (1) (b) of the SEBI (LODR) Regulations 2015.
The details of programmes for familiarisation of Independent Directors with theCompany their roles rights responsibilities in the Company nature of the industry inwhich the Company operates business model of the Company and related matters are put upon the website of the Company at the following link:
Key Managerial Personnel
The following are the Key Managerial Personnel of the Company as on 31stMarch 2016
During the year Ms. Snehal Bansode Company Secretary and Key Managerial Personnel hadresigned from the office with effect from the end of business hours of Monday the 30thNovember 2015.
Consequently the Board had appointed Mr. Ajayendra Pratap Jain a member of theInstitute of Company Secretaries of India (ICSI) (Membership no. ACS- 20718) as CompanySecretary of the Company with effect from 1st December 2015 and subsequently inits Meeting held on 8th February 2016 designated him as Key ManagerialPersonnel of the Company.
Pursuant to the Companies Act 2013 a formal annual evaluation needs to be conducted bythe Board of its own performance and that of its committees and individual directors.Schedule IV to the Companies Act 2013 states that the performance evaluation ofIndependent Directors shall be done by the entire Board of Directors excluding theDirector being evaluated.
The Board based on evaluation criteria recommended by the 'Nomination and RemunerationCommittee' and 'Code for Independent Directors' and pursuant to applicable regulations ofChapter II and Chapter IV read with schedule IV to SEBI (LODR) Regulations 2015evaluated the performance of Board members.
The Board after due discussion and taking into consideration of the various aspectssuch as performance of specific duties obligations Board's functioning composition ofthe Board and its Committees and governance expressed their satisfaction with theevaluation process and performance of the Board.
The Remuneration Policy of the Company is designed to attract motivate improveproductivity and retain manpower by creating a congenial work environment encouraginginitiatives personal growth and team work and inculcating a sense of belonging andinvolvement besides offering appropriate remuneration packages and superannuationbenefits. This Remuneration Policy applies to Directors Senior Management Personnelincluding its Key Managerial Personnel (KMP) of the Company is attached to this report as'Annexure 1.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that:
a. in the preparation of the annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed alongwith proper explanation relating to material departures ifany;
b. the Directors have 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 March 312016 and of the profit ofthe Company for the year ended on that date;
c. the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the Directors have prepared the annual accounts on a 'going concern' basis;
e. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f. the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.
COMMITTEES OF THE BOARD
The Board of Directors of the Company has the following committees as on 31stMarch 2016;
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders Relationship Committee
The details of the Committees along with its composition number of meeting andattendance at the meeting are provided in the Corporate Governance Report. The Board hasaccepted all the recommendations of the Audit Committee during the period under review.
The members of the Company in their Annual General Meeting held on September 30 2014appointed M/s SGCO & Co. Chartered Accountants as Statutory Auditor of the Companyfor the period of three financial years from 2014-2015 to 2016-2017. In the term of firstproviso to section 139 of the Companies Act 2013 the appointment of the auditors shallbe placed for ratification at every Annual General Meeting. Accordingly the appointmentof M/s SGCO & Co. Chartered Accountants as statutory auditors of the Company isplaced for ratification by the shareholders to hold the office from the conclusion of 9thAnnual General Meeting upto the conclusion of 10th Annual General Meeting of the Company.
The Company had received a letter from the Statutory Auditors confirming theireligibility and that their re-appointment if made would be within the limits prescribedunder Section 141 of the Companies Act 2013.
The observations and comments given by the Auditors in their report read together withnotes to Accounts are self explanatory and hence do not require any further comments undersection 134 (3) (f) of the Companies Act 2013.
Pursuant to Section 204 of Companies Act 2013 the Board of Directors had appointedMr. Hemant Shetye Partner (COP. No 1483) of M/s. HS Associates Practising CompanySecretaries to undertake the Secretarial Audit of the Company. The Secretarial Auditor'sReport is attached to this report as 'Annexure 2'. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark and is self explanatory and thusdoes not require any further comments.
DISCLOSURES UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has been employing women employees in various cadres within its corporateoffice and in branch offices. The Company has in place a policy against Sexual Harassmentin line with the requirements of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaint Committees is set up to redresscomplaints if received and are monitored on regular basis.
During the year under review Company did not receive any complaint regarding sexualharassment
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information under Section 134 (3) (m) of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 for the year ended March 31 2016 is givenbelow and forms part of the Directors' Report
A. Conservation of Energy
i) The steps taken or impact on conservation of energy: Nil
ii) The steps taken by the Company for utilizing alternate sources of energy: Nil
iii) The capital investment on energy conservation equipments: Nil
Your Company is not engaged in manufacturing activity and thus its operations are notenergy intensive. However adequate measures are always taken to ensure optimumutilisation and maximum possible saving of energy.
B. Technology Absorption
i) The efforts made towards technology absorption : Nil
ii) The benefits derived like product improvement cost reduction product developmentor import substitution : Nil
iii) in case of imported technology (imported during the last three years reckoned fromthe beginning of the Financial Year): Not Applicable
(a) Details of Technology Imported;
(b) Year of Import;
(c) Whether the Technology has been fully absorbed;
(d) if not fully absorbed areas where absorption has not taken place and the reasonsthereof.
iv) Your Company has not incurred any expenditure on Research and Development duringthe year under review.
C. Foreign Exchange Earnings and Outgo
During the year under review there were no foreign exchange earnings & outgo.
DISCLOSURES UNDER COMPANIES ACT 2013
Extract of Annual Return
In accordance with section 134(3) of the Companies Act 2013 an extract of the annualreturn in the prescribed format is appended as 'Annexure 3i to the Boardsi Report.
Number of meetings of the Board
The Board met four 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 was within the period prescribed by the Companies Act 2013 andSEBI (LODR) Regulations 2015.
Committees of the Board
The Board has established committees as per the requirement of Companies Act 2013 andSEBI (LODR) Regulations 2015 including Audit Committee Nomination and RemunerationCommittee and Stakeholders Relationship Committee.
A detailed note on the Board and its committees is provided under the CorporateGovernance Report section in this Annual Report. The composition of the Committees as perthe applicable provisions of the Act Rules and SEBI (LODR) Regulations 2015 are asunder:
Vigil Mechanism/ Whistle Blower Policy
Your Company has established a Vigil Mechanism and implemented Whistle Blower Policythe mechanism to provide adequate safeguards against victimisation ofdirector(s)/employee(s) who use mechanism to report genuine issues and also provide directaccess to the Chairman of the Audit Committee in exceptional cases. The Audit Committee ofyour Company oversees the Vigil Mechanism on regular basis.
Your Company hereby affirms that no director/ employee have been denied access to theChairman of Audit Committee and that no complaints were received during the quarter.
The policy on Vigil Mechanism may be accessed on Company's website at the followinglink: http://www. prozoneintu.com/investor/Policies
Particulars of loans guarantees and investments
Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient under the provisions of Section 186 of the Companies Act 2013read with the Companies (Meetings of Board and its Powers) Rules 2014 amended from timeto time are form part of the notes to the financial statements provided in this AnnualReport.
Particulars of contracts or arrangements entered into with related parties
The particulars of contracts or arrangements made with related parties referred to insection 188(1) of the Companies Act 2013 in the prescribed form AOC-2 is appended as'Annexure 4' to the Boards' Report.
Particulars of employees
Details in terms of the provisions of Section 197 of the Companies Act 2013 read withRule 5(2) of the Companies (Appointment and Remuneration) Rules 2014 the names and otherparticulars of the employee is appended as 'Annexure 5' to the Boards' Report
The ratio of remuneration of each Director to the median employee's remuneration andother details in terms of Section 197(12) of the Companies Act 2013 read along with Rule5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed herewith as 'Annexure 6' and forms part of this Report.
Transfer to Reserves
During the year company has not transferred any amount to reserve.
Material changes and commitments
No material changes and commitments affecting the financial position of your Companyhave occurred between 31st March 2016 and the date of the report except acquisition of100% stake of Classique Creators Private Limited on 25th April 2016 at a consideration ofRs. 5 Lakh.
Corporate Social Responsibility
Reviewing the financial statements of the Company for the financial year ended 31stMarch 2016 the provisions of section 135 of the Companies Act 2013 pertaining toCorporate Social Responsibility (CSR) has become applicable on the Company from thefinancial year 2016-17. Thus the Company shall be complying with the necessary provisionof the Act relating thereto during the financial year 2016-17 and so on.
REMOTE E-VOTING FACILITY TO MEMBERS
In compliance with provisions of Section 108 of the Companies Act 2013 and Rule 20 ofthe Companies (Management and Administration) Rules 2014 and Reg. 44 of SEBI (LODR)Regulations 2015 the Company is pleased to provide members the facility to exercisetheir right to vote at the 9th Annual General Meeting (AGM) by electronic means and thebusiness may be transacted through remote E-Voting Services provided by Central DepositorySecurities (India) Limited (CDSL).
The Company periodically uploads the Annual Reports Financial Results ShareholdingPattern Corporate Governance Reports and others reports and intimations filed with StockExchanges etc. and other information on its website viz.
DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT
Pursuant to SEBI (LODR) Regulations 2015 the details of the shares lying with theCompany in Unclaimed Suspense Account as on March 312016 are as under:
During the financial year Company has not declared any corporate benefit on aboveshares however corporate benefits if any accrued on above numbered unclaimed shareswill be credited to the same account and the Voting rights on these shares shall remainfrozen till the rightful owner of such shares claims the shares.
Your Directors take this opportunity to express their gratitude and sincereappreciation for the dedicated efforts of all the employees of the Company. Your Directorsare also thankful to the esteemed share holders for their support and confidence reposedin the Company and to The Stock Exchanges Government Authorities Banks SolicitorsConsultants and other business partners.
For and on behalf of Board of Director
The Remuneration Policy of Prozone Intu Properties Limited (the "Company") isdesigned to attract motivate improve productivity and retain manpower by creating acongenial work environment encouraging initiatives personal growth and team work andinculcating a sense of belonging and involvement besides offering appropriateremuneration packages and superannuation benefits. The policy reflects the Company'sobjectives for good corporate governance as well as sustained long- term value creationfor shareholders.
This Remuneration Policy applies to directors senior management personnel includingits Key Managerial Personnel (KMP) of the Company.
PRINCIPLES GOVERNING THE REMUNERATION DECISIONS
1. Support for strategic objective: Remuneration and reward frameworks anddecisions shall be developed in a manner that is consistent with supports and reinforcesthe achievement of the Company's vision and strategy.
2. Transparency: The process of remuneration management shall be transparentconducted in good faith and in accordance with appropriate levels of confidentiality.
3. Flexibility: Remuneration and rewards offerings shall be sufficientlyflexible to meet both the needs of individuals and those of the Company whilst complyingwith relevant tax and other obligations.
4. Internal equity: The Company shall remunerate the Board members and theexecutives in terms of their roles within the organization. Positions shall be formallyevaluated to determine their relative weight in relation to other positions within theCompany.
5. External equity: the company shall endeavor to pay equitable remunerationcapable of attracting and retaining high quality personnel. Therefore the Company willremain logically mindful of the ongoing need to attract and retain high quality personneland the influence of external remuneration pressures.
6. Affordability and sustainability: the Company shall ensure that remunerationof affordable on a sustainable basis.
PROCEDURE FOR SELECTION AND APPOINTMENT
1. Criteria for Board Members:
The Nomination and Remuneration Committee ("the Committee') along with the Boardwill review on a annual basis appropriate skills characteristics and experience requiredby the Board as a whole and its individual member.
The objective is to have a Board with diverse background and experience in businessgovernment academics technology and in areas that are relevant for the company'soperations.
In evaluating the sustainability of individual Board Members the committees takes intoaccount many factors including general understanding of the Company's business socialperspective educational and professional background and personal achievements.
The Committee evaluates each individual with the objective of having a group that bestenables the success of the Company's business. The Committee shall also identify suitablecandidates in the event of a vacancy being created on the Board on account of retirementresignation or demise of an existing Board Member. Based on the recommendations of theCommittee the Board shall evaluate the candidates and decides on the selection theappropriate member.
Criteria for evaluation of performance of Independent Directors:
1. Knowledge and skills in accounting and finance business judgement generalmanagement practices crisis response and management industry knowledge strategicplanning etc.
2. Personal characteristics matching the Company's values such as integrityaccountability financial literacy and high performance standards
3. Commitment to attend a minimum of 75% of meetings which will include the attendancethrough audio/video conferencing.
4. Ability and willingness to represent the Stakeholders' long and short term interests
5. Awareness of the Company's responsibilities to its customers employees suppliersregulatory bodies and the communities in which it operates
6. Responsibility towards following objectives being an Independent Director
i. Maintenance of independence and abstain himself from availing of benefits directlyor indirectly from the Company
ii. Responsibilities of the Board as outlined in the Corporate Governance requirementsprescribed under Clause 49 of the Listing Agreement
iii. Accountability under the Directors' Responsibility Statement
iv. Overseeing the maintenance of Corporate Governance standards of the Company andethical conduct of business
2. Criteria for other executives:
a. The Committee shall actively liaise with the relevant departments of the company tounderstand the requirement of management personnel and produce a written document thereon.
b. The Committee may conduct a wide ranging search for candidates for the positions ofemployees.
c. The professional academic qualifications professional titles detailed workexperience and all concurrently held positions of the candidates shall be complied aswritten documents.
d. The committee may examine the qualifications of the candidates on the basis of theconditions for appointment of the employees.
e. The Committee may carry out other follow up tasks based on the decisions andfeedback from the Board of Directors if any.
a. Compensation to non-executive directors including Independent Directors
The non-executive directors shall be eligible for remuneration by way of payment ofsitting fees only for attending the meetings of the Board of Directors and its committees.The amount of sitting shall be decided by the Board of Directors of the Company subject tothe revisions from time to time within maximum permissible limit prescribed under therespective provisions of the Companies Act 2013. Taking into account the financialpositions of the Company the Board of Directors shall be entitled to decide whether toreduce or waive the payment of sitting for a meeting or for a period specific orpermanently until otherwise decided by the Board.
Besides sitting fees non-executive directors shall also be entitled to reimbursementof expenses incurred by them for attending the meeting of Board of Directors and itscommittees.
All compensation apart from sitting fees and reimbursement of expenses as statedabove if recommended by the Committee shall be fixed by the Board of Directors and shallrequire previous approval of the shareholders in general meeting subject to the maximumlimit and other compliances as prescribed under the Companies Act 2013 and rules madethere under.
The special resolution shall specify the limits for the maximum numbers of stockoptions that can be granted to non-executive directors in any financial year and inaggregate. However the independent directors shall not be entitled for any stock option.
b. Compensation to executive directors key managerial personnel and senior managementpersonnel
The remuneration determined for managing directors whole-time directors and keymanagement personnel are subjected to the approval of Board of Directors in due compliancewith the provisions of the Companies Act 2013. The remuneration of the KMP and SMP afterthe appointment shall be informed to the Board of Directors and subsequent increment shallbe decided by the Managing Director of the Company as per the HR policy of the Company.The executive directors shall not be eligible for payment of any sitting fees.
The Company shall formulate a credible and transparent framework in determining andaccounting for the remuneration of the MD/ WTD/ KMPs and SMPs. Their remuneration shall begoverned by the external competitive environment track record potential individualperformance and performance of the Company as well as industry standards.
DISCLOSURE OF INFORMATION
Information on the total remuneration of members of the Company's Board of DirectorsWhole Time Directors and KMP/ senior management personnel may be disclosed in theCompany's annual financial statements as per statutory requirements.
APPLICATION AND AMENDMENT TO THE POLICY
This Remuneration Policy shall continue to guide all future employment of DirectorsCompany's Senior Management including Key Managerial Personnel and other employees.
The Board of Directors as per the recommendations of the Committee can amend thisPolicy as and when deemed fit. Any or all provisions of this Policy would be subject torevision / amendment in accordance with the rules regulations notifications etc. on thesubject as may be issued by relevant statutory authorities from time to time.
In case of any amendment(s) clarification(s) circular(s) etc. issued by the relevantauthorities not being consistent with the provisions laid down under this Policy thensuch amendment(s) clarification(s) circular(s) etc. shall prevail upon the provisionshereunder and this Policy shall stand amended accordingly from the effective date as laiddown under such amendment(s) clarification(s) circular(s) etc.
The Company's Remuneration Policy is published on its website.