The Directors of your Company have immense pleasure in presenting the 35th Board Reporton the Company's business and operations together with the Audited Statement of Accountsfor the financial year ended 31st March 2019. Consolidated performance of the Company andits subsidiaries has been referred to wherever required.
FINANCIAL RESULTS AND APPROPRIATIONS
In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) theCompany has prepared its standalone and consolidated statements as per IND-AS for thefinancial year 2018-19. Your company's performance on standalone basis during the year ascompared with that of during the previous year is summarised as under:
| || ||(Figures in Rs. Lacs) |
|Particulars ||2018-19 ||2017-18 |
|1 Total Revenue ||17737.32 ||22496.75 |
|Less: || || |
|Total expenses excluding depreciation and finance cost ||11750.26 ||17333.75 |
|Depreciation ||169.10 ||157.44 |
|Finance Cost ||7754.61 ||8111.50 |
| ||19673.97 ||25602.63 |
|2 Net Profit/(Loss) before Tax ||(1936.65) ||(3105.94) |
|Less: || || |
|-Provision for Tax ||(1133.34) ||(973.56) |
|3 Net Profit/(Loss) After Tax but before prior period items ||(803.31) ||(2132.38) |
|Less: || || |
|-Tax Provisions for earlier years ||- || |
|4 Net Profit/(Loss) after Tax and prior period items ||(803.31) ||(2132.38) |
|Add : || || |
|Other Comprehensive Income ||25.47 ||49.97 |
|5 Net Profit/(Loss) after Comprehensive Income ||(777.84) ||(2082.41) |
|Add: || || |
|Surplus profit brought forward from previous year ||7315.50 ||9397.91 |
|6 Balance available for appropriation ||6537.66 ||7315.50 |
|Less: Appropriations || || |
|-Proposed Dividend Nil (Previous Year Nil) ||- ||- |
|-Dividend Tax thereon ||- ||- |
|-Transfer to General Reserve/CRR ||- ||- |
|-Dividend/Dividend Tax for earlier years ||- ||- |
|7 Surplus profit carried over to Balance Sheet ||6537.6 ||7315.50 |
|8 EPS (Basic & Diluted) ||(1.35) ||(3.59) |
FINANCIAL AND OPERATIONAL REVIEW
During the financial year 2018-19 the net revenue from operations for the standaloneentity decreased to Rs.177.37 Crores from Rs.224.97 Crores in the previous year showing adecline of around 21.16%. However operating profit before interest tax depreciation andamortization (EBITDA) increased from Rs.51.63 Crores to Rs.59.87 crores due to profit onsale of fixed assets and there was a loss after tax of Rs.8.03 crores for the year underreview as against a loss after tax of Rs.21.32 crores for the last financial year. Thedecrease in the revenue during the financial year 2018-19 is due to general recession inthe real estate sector. In line with the above the consolidated total revenuestood at Rs.225.89 crores during the financial year 2018-19 against revenue of Rs.275.39crores in the previous year showing a downturn of 17.98%. Net consolidated loss fromordinary activities after tax for the financial year 2018-19 was Rs.3.95 crores againstthe net loss of Rs.19.09 crores in the previous year.
The Company is currently developing/ building various projects at Gurugram MeerutAgra Alwar Ajmer Indore Karnal Yamunanagar Jhansi Jammu Muzaffarnagar RewariShahpur and Ghaziabad. Though construction at various project sites was slowed down duringthe financial year 2018-19 due to financial constraints your Company plans to speed upthe same during the current financial year. While business cycles have been affected thisyear due to buyers holding back purchases in anticipation of regulatory changes and salesare still witnessing a slowdown we are observing signs of recovery as the triple effectsof demonetisation RERA and GST have begun to shape up the sector with new standards ofdelivery accountability and transparency.
CHANGE IN THE NATURE OF BUSINESS
There has been no change in the nature of business of the Company during the periodunder review.
CHANGE IN THE NAME OF THE COMPANY
During the year under review the Company with prior approval of the Shareholders intheir Annual General Meeting held on 28th September 2018 had made an application to theRegistrar of Companies NCT of Delhi for Change of name of the Company from Ansal Housingand Construction Limited to Ansal Housing Limited. The application was approved and thenew name was taken on record by the Registrar of Companies and a Fresh Certificate ofIncorporation dated 18th December 2018 duly signed by the Registrar of Companies NCT ofDelhi was issued in favour of the Company.
TRANSFER TO RESERVES
Considering the losses incurred during the financial year 2018-19 the Company does notpropose to transfer any amount to the General Reserve.
Based on Company's performance during the year the Directors do not propose payment ofany dividend for the financial year 2018-19.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 125 of the Companies Act 2013 the relevantamount against the final dividend for the financial year 2011-12 remaining unpaid orunclaimed for a period of seven years shall be transferred by the Company to the InvestorEducation and Protection Fund (IEPF) administered by the Central Government by 3rdNovember 2019. Members who have not yet encashed their dividend warrant(s) pertaining tothe final dividend for the financial year 2011-12 are requested to lodge their claims withthe company on or before 25th October 2019 otherwise the Company would have no otheroption but to transfer this amount to the IEPF by 3rd November 2019 which is the lastdate for transfer of the said amount. No claim shall lie thereafter against the Companyfor the amounts so transferred. Pursuant to the provisions of Investor Education andProtection Fund (Uploading of information regarding unpaid and unclaimed amounts lyingwith companies) Rules 2012 the Company has uploaded the details of unpaid and unclaimeddividends lying with the Company as on 31st March 2019 on the website of the Company(www. ansals.com).
The Company had been inviting/accepting and renewing deposits from the public and itsshareholders for past many years in accordance with the provisions of the Companies Act1956/2013 read with the Companies (Acceptance of Deposits) Rules 1975/2014. However theCompany stopped accepting/renewing public deposits with effect from 1st April 2016 inview of non-availability of deposit insurance which was a mandatory condition foracceptance/ renewal of deposits. The Company owed a principal amount of Rs. 99.50 crorestowards the public depositors when it stopped taking/renewing further deposits on 1stApril 2016.
Due to prolonged extreme and severe overall recession in the real estate sector sincefinancial year 2013-14 it (the sector) had become virtually deserted. As a result theturnover of the Company had been badly affected leading to repercussions on a much widerscale making it difficult for the Company to refund the whole amount of Rs. 99.50 croresat once after the closure of the fixed deposit scheme. In view of the above the Companyin the month of July 2016 had approached the Hon'ble National Company Law Tribunal (NCLT)New Delhi seeking its approval to repay public deposits in instalments. Vide its Orderdated 3rd October 2016 the NCLT had accepted and approved in principle the repaymentproposal of the company for extension of time in respect of repayment of matured depositsin a phased manner over a period of 24 months from their respective maturity dates in viewof the past track record of the Company subject to periodical review of the scheme.Thereafter regular review of the fixed deposit scheme has been done by Hon'ble NCLT andthe Company has been refunding the public deposits in accordance with the orders of theHon'ble NCLT.
The details relating to the deposits as required by Rule 8(5)(v) of the Companies(Accounts) Rules 2014 are given below:
|1. Deposits accepted during the year 2018-19 ||Nil |
|2. Deposits remained unpaid or unclaimed as at 31.03.2019 ||Rs.1784.54 lakhs |
|3. Whether there has been any default in repayment of deposits or payment of interest thereon during the year 2018- 19 and if so number of such cases and the total amount involved- || |
|(i) at the beginning of the year; ||Nil* |
|(ii) maximum during the year; ||Nil* |
|(iii) at the end of the year; ||Nil* |
|4. The details of deposits which are not in compliance with the requirements of Chapter V of the Companies Act 2013 ||NA |
* The payments are being released to the depositors in accordance with the orders madeby the Hon'ble NCLT New Delhi from time to time.
The issued subscribed and paid-up equity share capital of the Company as on 31stMarch 2019 stood at Rs.5938.58 lakhs.
SERVICE OF DOCUMENTS THROUGH ELECTRONIC MODE
In furtherance of the Green Initiative in Corporate Governance announced by theMinistry of Corporate Affairs the Company had in past requested the shareholders toregister their email addresses with the Registrar/Company for receiving the reportaccounts and notices etc. in electronic mode. However some of the shareholders have notyet registered their e-mail IDs with the Company. Shareholders who have not registeredtheir email addresses are once again requested to register the same with the Company bysending their requests to firstname.lastname@example.org.
SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANIES
As on 31st March 2019 your Company had 18 Subsidiaries and 1 Associate Company thedetails whereof are set out at appropriate place in the Annual Report.
During the year under review two of the Wholly-owned Subsidiary Companies of yourcompany ceased to be so consequent upon transfer of 100% shareholding by your Company inthose Companies the details of which are as under:
|. Name of Wholly- owned Subsidiary ceased to be so ||Effective date of cessation |
|1. Rishu Buildtech Private Limited ||05/12/2018 |
|2. Sonu Buildwell Private Limited ||28/01/2019 |
M/s Geo Connect Limited Wholly-owned Subsidiary of the Company was categorized as theUnlisted Material Subsidiary of the Company in terms of Regulation 16(1)(c) of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended form time to time and consequent upon which Mr. MaharajKishen Trisal Non-Executive Independent Director of the Company was appointed as anAdditional Director on the Board of Directors of Geo Connect Limited with effect from 06thOctober 2018 as per the requirements of Regulation 24 of the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 asamended form time to time.
Pursuant to provisions of section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isattached to the financial statements of the Company. In accordance with third proviso toSection 136(1) of the Companies
Act 2013 the Annual Report of your Company containing inter alia the auditedstandalone and consolidated financial statements has been placed on the website of theCompany at www.ansals.com. Further audited financial statements together with relatedinformation and other reports of each of the subsidiary companies have also been placed onthe website of the Company at www.ansals.com.
Further highlights of performance of subsidiaries associates and joint venturecompanies and their contribution to the overall performance of the Company can be referredin Form AOC-1 as well as Consolidated Financial Statements which form part of this AnnualReport.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report for the year under review as stipulatedunder Regulation 34 read with other regulations of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is presented hereunder which forms part of theAnnual Report.
Industry Structure and Developments
The real estate sector is one of the most globally recognized sectors. The real estatesector comprises four sub sectors - housing retail hospitality and commercial. Thegrowth of this sector is well complemented by the growth of the corporate environment andthe demand for office space as well as urban and semi-urban accommodations. Thedemonetization exercise in November 2016 put brakes on the growth of the real estatemarket as it made the rampant use of cash in real estate transactions (prevalent earlier)more difficult. Further the Real Estate Regulation Act 2016 (RERA) that was passed bythe Centre in 2016 and most states in 2017 put a lot of onus on builders which furtherhalted new offerings in the residential space. The government is focused on working todeliver on its promise of "Housing for All" by 2022. The Real Estate (Regulationand Development) Act is a landmark reform for the real estate sector which has thepotential to address long standing issues which have plagued the growth of the sector.Further policy announcements and reforms to revive the real estate space including therelaxation of Foreign Direct Investment (FDI) norms enhanced focus on the "Make inIndia" initiative and creation of smart cities direct and indirect tax benefits foraRs.ordable housing projects Real Estate Investment Trusts (REITs) etc. have helped ingenerating a positive outlook for the real estate market. Real estate sector in India isexpected to reach a market size of US$ 1 trillion by 2030 from US$ 120 billion in 2017 andcontribute 13 per cent of the country's GDP by 2025. Retail hospitality and commercialreal estate are also growing significantly providing the much-needed infrastructure forIndia's growing needs. The Housing Sector alone contributes 5-6% to India's Gross DomesticProduct (GDP). Not only does it generate a high level of direct employment but it alsostimulates the demand in over 250 ancillary industries such as cement steel paintbrick building materials consumer durables and so on.
The Road ahead
Responding to an increasingly well-informed consumer base and bearing in mind theaspect of globalization Indian real estate developers have shifted gears and acceptedfresh challenges. The most marked change has been the shift from family owned businessesto that of professionally managed ones. Real estate developers in meeting the growingneed for managing multiple projects across cities are also investing in centralizedprocesses to source material and organize manpower and hiring qualified professionals inareas like project management architecture and engineering. Th the Real Estate (Regulation and Development) Act 2016 is one of the significant reforms implemented in theReal Estate Sector. The core objective of this legislation is to ensure regulation andpromote real estate sector in an efficient and transparent manner. Your company is makingevery endeavor to get all of its under construction projects registered with theAuthorities constituted as per the norms of the aforementioned legislation so as to giveto the home buyers a transparent view of the progress of work being carried on at theproject sites.
Opportunities and threats
The Indian real estate market is expected to touch US$ 180 billion by 2020. Housingsector is expected to contribute around 11 per cent to India's GDP by 2020. Retailhospitality and commercial real estate are also growing significantly providing themuch-needed infrastructure for India's growing needs. The Securities and Exchange Board ofIndia (SEBI) has already notified final regulations that will govern Real EstateInvestment Trusts (REITs) and Infrastructure Investment Trusts (InvITs). This move willenable easier access to funds for cash-strapped developers and create a new investmentavenue for institutions and high net worth individuals and eventually ordinary investors.
With the passing of the Real Estate (Regulation & Development) Act 2016 and otherinitiatives taken by the Government such as recent Union Budget 2019 has proposed severalpositive measures to strengthen the edifice of the Indian real estate sector.
Affordable home buyers and Real Estate Developers will stand to benefit from the UnionBudget. While tax benefits will encourage more people to buy homes developers willbenefit as the liquidity problem is being addressed through recapitalization of PSU Banksand support to securitization for NBFC assets. This will help in providing liquidity andcredit flow to cash-strapped developers.
The Government announced major tax benefits that will help stimulate demand foraRs.ordable housing. Interest deduction up to Rs.2 lakh for affordable housing will beavailable until March 31 2020. Further as per the Finance Bill 2019 dated 01stFebruary 2019 as introduced in Lok Sabha it is proposed that the benefit of rollover ofcapital gains under section 54 of the Income Tax Act should be increased from investmentin one residential house to two residential houses for a tax payer having capital gains upto Rs.2 crore.
The recent rate cuts under the GST regime on under construction properties and no GSTon completed projects may result in increased sales volume as the final price to be paidfor purchase of property would go cheaper. The Company strongly believes that the RealEstate Sector is bound to improve in long term. Your Company has managed well even duringturbulent times due to its inherent strengths like a well-accepted brand well-designedprojects and trust among members creditors and other financial institutions. Your Companyis hopeful that the Real Estate Sector will improve in near future and the Company islooking forward to grab new opportunities by launching new projects particularly throughcollaboration route and ensure timely delivery of existing projects. Threats The futureseems to be fruitful for the Real Estate Sector but at the same time there are somefactors which may prove to be a threat for the industry. Some of the major issues areenumerated below: Apart from demonetization and RERA there are two other factors spookingthe real estate sector. The first pertains to the implementation of GST (Goods andServices Tax) Act in July 2017. Prior to GST implementation there was a service tax of4.5% that was payable in case of under-construction property. Post GST that rate has goneup sharply to 12%. However with effect from 01st April 2019 the rates of GST have beenrevised by the GST council and reduced to 5% with no Input Tax Credit as against theearlier rate of 12% and 1% without Input Tax Credit for ARs.ordable Housing. In case ofRealty Sector GST is not the only tax payable by the customer but there are several otherduties and charges that may vary from State to State such as Stamp Duty and RegistrationCharges which eventually adds up to the cost to be borne by the customer since stamp dutyhas not been subsumed within GST.
Due to the concept of decentralized registration under GST every Real Estate Developerhas to obtain registration in every state where the construction projects have beenundertaken. It will be an arduous and a tedious task for the companies to execute with thecompliance requirements such as returns maintenance of separate records etc. for eachstate. Higher interest rate is also a major threat to the real estate sector. Whilecompared to countries such as USA and the UK India's banks are found to give loans at7-8% higher rates. Currently the rate of interest hovers around 15% which is 4-5 timeshigher than the interest rate charged by US banks for purchasing a property. The higherthe interest rate the lower the demand for property causing a ripple effect. Thusinterest rate on home loans is also considered a challenge to developers of the realestate sector. Challenges The real estate market in India is currently in the midst offairly challenging times. In the last few years there have been a few noticeable macroshifts that have challenged the realty sector. The demand-supply gap has been an issuewith most of the key real estate markets such as Mumbai Bengaluru and Gurugram facing aserious oversupply of properties. The bigger challenge is that Real Estate as an AssetClass is not showing the kind of 20-30% annual price appreciation that was seen betweenthe years 2001 and 2008. Between 2013 and 2017 the property prices in some major citieshave increased by just about 5%-7% which is even lower than the return on the SavingsBank Account. During the said 4-year period Delhi actually witnessed negative pricegrowth of (-0.70%).
Such situations tend to hamper the overall business landscape leading to sluggishgrowth directly impacting the real estate sector. In the current recessionary times theforemost challenge is to augment the sales and multiply the collections of the readilyavailable stock and projects under development. Consequently effectuating your Company tomeet its financial commitments towards suppliers contractors government lenders andemployees.
Review of Operations
1. Development Business & Retailing
Your Company's development business primarily focuses on the development and sale ofresidential real estate which include plotted developments houses villas and apartmentsof varying sizes and integrated townships with the focus on the high end luxuryresidential developments. The Development business also consists of certain commercial andshopping complexes including those that are integral to the residential developments theyare in vicinity of. Development business consists of three segments:
The Residential segment continues to strive for equilibrium amidst tepid response fromthe market and the changing landscape of the Sector. The residential segment has been incorrective phase which now seems to be headed towards a more stable position.
Growing economy rapid urbanisation and enhanced policy support and lowering interestrates are suggesting signs of recovery for the segment. Initiatives taken by the currentregime which include the smart cities Housing for All ARs.ordable Housing Scheme willprovide the required stimulus to the residential segment. Developers have been focussingon project completions instilling confidence in buyers.
Commercial Segment has consolidated growth trajectory owing to improved businesssentiments and rising growth prospects in the IT/ITES sector attributed to improvingmacro-economic dynamics and corporate expansion. The market sentiments were furtherbolstered by key announcements such as removal of Dividend Distribution tax for REITspaving way for appetite and willingness both from a developer and an investor perspective.
The retail segment in the country is witnessing an enormous transformation and isundergoing structural changes. The retail landscape has been growing to a more structuredsector owing to the evolving consumer spending patterns and increasing disposable incomelevels. Delhi NCR is a leading retail destination in India an area where your company hassignificant presence. The area is one of the largest population base in the country withmajority of the population is well travelled and well versed with all the brands. There isan emerging trend in the National Capital Region (NCR) of malls being perceived asentertainment destinations. Being located in proximity to prominent cities of Punjab andHaryana allows retailers to cater to a wider population. The presence of mall clusterstend to attract high footfalls as they allow consumers to access to a larger set of brandsas compared to visiting standalone development.
2. Hospitality Operations
The Hospitality Division (Restaurants only) engages 22 employees who are performingadmirably well exhibiting a turnover of Rs.2.99 crores yielding adequate profits in thefinancial year 2018-19. Among the big names the Division has the Brand "The GreatKabab Factory" which has been franchised from U Mac Hospitality Pvt. Ltd.
The Real Estate Sector is witnessing a major change with the introduction of the majorreforms like RERA and GST and the announcements made through the Union
Budget 2019 which are driving consolidation and proving well for the industry in thelong run. People looking for buying homes should take the benefit of the present scenarioand invest in properties as prices are stable at this point of time and interest rates arealso less. FDI norms will attract cash inflows which will be supportive for us as well asthe entire sector. Recent reforms in the GST Act would boost transparency and uniformityin real estate sector it would also reduce the burden on taxpayers considerably. WesternUP Region has been developing day by day and regions like Noida Greater Noida Raj NagarExtension & Greater Noida West have witnessed unsurpassed growth in past few years.
Internal Control systems and their adequacy
The Company has in place adequate internal control systems and procedures commensuratewith the size and nature of business. These procedures are designed to ensure that:
Effective & adequate internal control environment is maintainedacross the Company.
All assets and resources are acquired economically used efficientlyand are adequately protected.
Significant financial managerial and operating information isaccurate reliable and is provided timely; and
All internal policies and statutory guidelines are complied with.
The effective implementation and independent monitoring of internal controls andprocesses is done by the Internal Audit. The Audit Committee of the Board reviews theInternal Audit findings and provides guidance on internal controls. It ensures thatInternal Audit recommendations are effectively implemented. The Audit Committee of theCompany met four times during the financial year 2018-19. It reviewed inter-alia theadequacy and effectiveness of the Internal Control Systems and monitored implementation ofInternal Audit recommendations and overlooked other financial disclosures. During the yearunder review no material or serious observation has been received from the InternalAuditors of the Company for inefficiency or inadequacy of such controls.
Outlook on Risks and ConcernsRs.
The management of the company anticipates the major risks pertaining to the industry inwhich it operates such as economic regulatory taxation and environmental risks and alsothe investment outlook towards Indian Real estate sector. Some of the risks that may arisein normal course of its business and impact its potential for future developmentsinter-alia include liquidity risk counter-party risk commodity risk credit riskInfiation risk and market risk etc.
The Company has broad based and strong in-house Legal Department to take care of Legaland Regulatory Risks. The requisite insurance covers are also taken by the Company forcovering the disasters etc. The
Audit Committee and the Board of Directors of the Company have been implementing robustrisk management policies and guidelines that set-out the tolerance for risk and yourcompany's general risk management philosophy. Accordingly your Company has established aframework and process to monitor the exposures to implement appropriate measures in timelyand effective manner. The same is constantly reviewed for improvement.
Company's Human Resource pool is a key engine for its business and growth. Our focuscontinues to leverage and nurture our key talent working closely with our outsourcedpartners in various areas of our operations and ensuring optimum utilization of manpoweraligned with our business strategy. The company conducts consultations dialoguesdeliberations negotiations and meetings in a congenial environment and arrives atamicable solutions to issues that crop from time to time. Our Reward & Recognition/incentive programme continues to strive to build culture of meritocracy and strengthenalignment of performance and reward. As on 31st March 2019 the Company's "onrolls" talent pool comprised 298 employees.
Details of Significant Changes in the Key Financial Ratios in comparison with theprevious financial year alongwith detailed explanations for such changes:
|Ratio ||FY 2018-19 ||FY 2017-18 ||PercentageVariance ||Explanation for Significant Change |
|Debtor Turnover Ratio ||2.31 ||2.18 ||5.9% ||No explanation required |
|InventoryTurnover Ratio ||0.08 ||0.09 ||-10.2% ||No explanation required |
|Interest Coverage Ratio ||0.54 ||0.58 ||-7.3% ||No explanation required |
|Current Ratio ||1.14 ||1.34 ||-14.9% ||No explanation required |
|Debt Equity Ratio ||2.31 ||2.20 ||5.1% ||No explanation required |
|Operating Profit Margin ||44.45% ||37.95 ||17.1% ||No explanation required |
|Net Profit Margin ||-5.41 ||-7.51% ||27.99% ||The Net Loss (after tax) is reduced due to increase in operating margin reduction in administrative overheads and recognition of tax expense at changed income tax rate i.e. 27.82% from the existing 34.61%. |
|Return on Net Worth ||-2.05 ||-1.82% ||-12.7% ||No explanation required |
Statements in this Management Discussion and Analysis contain certain forward lookingstatements within the meaning of applicable laws and regulations. Actual results maydiffer substantially or materially from those expressed or implied. Important developmentsthat could affect the Company's operations include a downward trend in the real estatedevelopment industry rise in input costs and significant changes in political andeconomic environment environment standards tax laws litigation and labour relationsetc. The shareholders and readers are cautioned that in the case of data and informationexternal to the company no representation is made on its accuracy or comprehensivenessthough the same are based on sources thought to be reliable.
AWARD OF ISO 9001: 2015
Your Company continues to enjoy the privilege of ISO 9001:2015 Certification granted toit on 16th April 2017 through well-known certification agency "DNV GL- BusinessAssurance". The Management System Certificate is valid till 15th April 2020. It willbe the constant endeavour of the management to continuously stress on systems/quality forultimate delivery of its products.
DECLARATION BY INDEPENDENT DIRECTORS
In the first Board Meeting held for the financial year 2018-19 all the IndependentDirectors of the Company furnished to the Company a declaration to the effect that theymeet the criteria of independence as provided in Subsection 6 of Section 149 of CompaniesAct 2013 read with Schedule IV thereof.
POLICIES OF THE BOARD OF DIRECTORS/ COMPANY
I. Nomination and Remuneration Policy
The Company's policy on directors' appointment and remuneration is as under:-
Appointment criteria and qualifications: a) The Committee shall identify andascertain the integrity qualification expertise and experience of the person forappointment as Director KMP or at Senior Management level and recommend to the Board his/her appointment. b) A person should possess adequate qualification exper tise andexperience for the position he/she is considered for appointment. The Committee hasdiscretion to decide whether qualification expertise and experience possessed by a personis sufficient/satisfactory for the concerned position. c) The Company shall not appoint orcontinue the employment of any person as the Managing Director/Whole-time Director who hasattained the age of seventy years. Provided that the term of the person holding thisposition may be extended beyond the age of seventy years with the approval of shareholdersby passing a special resolution based on the explanatory statement annexed to the noticefor such motion indicating the justification for extension of appointment beyond seventyyears.
Remuneration to Whole -time/ Executive/Managing Director KMP and Senior ManagementPersonnel:
a) Fixed pay:
The Managing Director Whole-time Director KMP and Senior Management Personnel shallbe eligible for a monthly remuneration as may be approved by the Board on therecommendation of the Nomination & Remuneration Committee. The breakup of the payscale and quantum of perquisites including employer's contribution to provident fundpension scheme medical expenses club fees etc. shall be decided and approved by theBoard/ the person authorized by the Board on the recommendation of the Committee andapproved by the shareholders and Central Government wherever required.
b) Minimum Remuneration:
If in any Financial Year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managing Director/Whole-time Director inaccordance with the provisions of Schedule V of the Companies Act 2013 and if it is notable to comply with such provisions with the previous approval of the Central Government.
c) Provisions for excess remuneration:
If any Managing Director/Whole-time Director draws or receives directly or indirectlyby way of remuneration any such sums in excess of the limits prescribed under the Act orwithout the prior sanction of the Central Government where required he/she shall refundsuch sums to the Company and until such sum is refunded hold it in trust for the Company.The Company shall not waive recovery of such sum refundable to it unless permitted by theCentral Government.
Remuneration to Non- Executive/ Independent Directors:
The remuneration/commission shall be fixed as per the slabs and conditions mentioned inthe Articles of Association of the Company and the Companies Act 2013.
b) Sitting Fees:
The Non-Executive/Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof provided that the amount of such feesshall not exceed Rs.40000 per meeting of the Board or Committee or such amount as may beapproved by the board within the limits prescribed by the Central Government from time totime.
Commission may be paid within the monetary limit approved by shareholders subject tothe limit not exceeding 1% of the profits of the Company computed as per the applicableprovisions of the Companies Act 2013.
d) Stock Options:
An Independent Director shall not be entitled to any stock option of the Company.
II. Corporate Social Responsibility Policy
During the year 2018-19 no expenditure was made by the Company towards CorporateSocial Responsibility initiatives as the Company is continuously incurring losses sincethe financial year 2016-17 due to prevailing downfall in the Real Estate Sector as aconsequence of which the average net profits calculated in accordance with the provisionsof Section 135 of the Companies Act 2013 came out to be negative i.e. average net lossesof Rs.44960799/-.
The details about the policy developed and implemented by the Company on CorporateSocial Responsibility are given in the "Annexure-I" forming part of thisreport as specified under the Companies (Corporate Social Responsibility Policy) Rules2014. The Policy has been disclosed on the website of the Company.
III. Statement concerning Development and Implementation of Risk Management Policy
The Company has its Risk Management Policy which is reviewed by the Board ofDirectors of the Company and the Audit Committee of Directors from time to time so thatmanagement controls the risk through a structured network. Head of Departments areresponsible for implementation of the risk management system as may be applicable to theirrespective areas of functioning and report to the Board and the Audit Committee about theevents of material significance.
The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. In order to achieve the key objectives the policyestablishes a structured and methodical approach to risk management in order to guidedecisions on risk related issues.
In today's turbulent and competitive environment strategies for mitigating inherentrisks are imperative for triggering the growth graph of the Company. The common risksinter alia are: Hazard risk Regulatory risks Competition Business risk TechnologyObsolescence Investments Retention of talent and Expansion of facilities etc. Businessrisk inter-alia further includes financial risk political risk Rs.delity risk andlegal risk etc.
As a matter of policy these risks are assessed and appropriate steps are taken toallay the same so that the element of risk threatening the Company's existence is veryminimal.
IV. Whistle Blower Policy and Vigil Mechanism
Your Company being a Listed Company has established a Vigil (Whistle Blower)Mechanism and formulated policy to enable director/s or stakeholders including individualemployees and their representative bodies to freely communicate their concerns aboutillegal or unethical practices actual or suspected fraud or violation of the Code ofConduct or Policy for the time being in force. The Whistle Blower Policy of the Company isavailable on the Company's Website.
V. Related Party Transactions Policy
In accordance with the provisions of the Companies Act 2013 and the SEBI (ListingObligations & Disclosure Requirements) Regulations 2015 the Company has in place aRelated Party Transactions (RPT) Policy to ensure due and timely identification approvaldisclosure and reporting of transactions between the Company and its Related Parties. AllRelated Party Transactions are approved by the Audit Committee prior to entering into thetransactions. Related Party Transactions of repetitive nature are approved by the AuditCommittee on omnibus basis for one financial year at a time. All omnibus approvals arereviewed by the Audit Committee on a quarterly basis. The Policy has been disclosed on thewebsite of the Company link for which is http://www.ansals.com/pdfs/policy-on-related-party-transaction.pdf.
VI. Financial Control Policy
The Company has a well-defined Financial Controls Policy which has been framedkeeping in view the provisions of the Companies Act 2013 and the Listing Regulations. Theobjective of the Policy is to ensure the orderly and efficient conduct of business of theCompany including adherence to the Company's policies safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information. ThePolicy has been disclosed on the website of the Company.
VII. Policy on Diversity of Board
Your Company believes that a diverse Board will enhance the quality of thedecisions made by the Board by utilizing the different skills qualification professionalexperience and knowledge etc. of the members of the Board which is inevitable forachieving sustainable and balanced development. Keeping this in view the Company hasframed a "Policy on Board Diversity" in accordance with provisions of theCompanies Act 2013 and Listing Regulations. The Policy on Board Diversity shall help theNomination & Remuneration Committee of the Company while considering and recommendingappointment of persons on the Board of Directors of the Company.
VIII Policy on prevention of Sexual Harassment of Women at workplace.
The company has adopted the guidelines and procedures of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 to evolve a permanentmechanism for the prevention and redressal of sexual harassment cases and other acts ofviolence in the organisation and to create and maintain a sensitive and congenialdemocratic working environment in which every woman can work in a community free ofviolence harassment exploitation intimidation and stress.
COMMITTEES OF BOARD NUMBER OF MEETINGS OF THE BOARD AND BOARD COMMITTEES
The Board of Directors met four times during the financial year under review for whichnotices were served in accordance with Section 173(3) of the Companies Act 2013 at theiraddresses registered with the Company by the permitted mode of delivery. As on 31st March2019 the Board had five committees namely the Audit Committee the Corporate SocialResponsibility (CSR') Committee the Stakeholders' Relationship Committee Committeeof Directors and Nomination and Remuneration Committee. A detailed note on composition ofthe board committees meetings attendance thereat is provided in the CorporateGovernance Report which forms part of the Annual Report.
AUDITORS AND AUDITORS' REPORT
M/s. Dewan P.N. Chopra & Co. Chartered Accountants are the Statutory Auditors ofthe Company who were appointed by the shareholders in their annual general meeting held on28th August 2017 for five consecutive years starting with the financial year 2017-18.Comments of the Statutory Auditors in their report and the notes forming part of theAccounts are self-explanatory and need no comments. The Board has duly examined theStatutory Auditors' Report to the accounts which is self-explanatory. Clarificationswherever necessary have been included in the Notes to Accounts section of the AnnualReport. Further since no fraud has been reported by the Auditors under sub-section (12)of section 143 of the Companies Act 2013 no details are required to be given in theDirectors' Report as required by Section 134(3) (ca) of the Companies Act 2013.
M/s. Chandra Wadhwa & Co. Cost Accountants were appointed as the Cost Auditorsfor the financial year 2018-19 to conduct cost audit of the accounts maintained by theCompany in respect of the various projects prescribed under the applicable Cost AuditRules. The Cost Audit Report given by the Cost Auditors for the financial year 2018-19shall be filed as per the requirements of applicable laws. In accordance with theprovisions of Section 148 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 since the remuneration payable to the cost Auditors is required tobe ratiRs.ed by the shareholders the Board recommends the same for the financial year2019-20 for approval by shareholders at the ensuing Annual General Meeting.
In terms of Section 204 of the Companies Act 2013 and the Regulation 24A of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 as amended from timeto time CS Vivek Arora and M/s Anjani Kumar & Associates Practicing CompanySecretaries were appointed as the Secretarial Auditors of the Company and its MaterialSubsidiary viz. M/s Geo Connect Limited respectively for the financial year 2018-19. TheSecretarial Audit Reports submitted by them in the prescribed form MR-3 are attached as"Annexure-IIA and IIB" respectively and form part of this report. TheSecretarial Audit Reports are self-explanatory.
OTHER STATUTORY DISCLOSURES
Extracts of the Annual Return
In terms of the provisions of Section 92(2) of the Companies Act 2013 read with Rule12 of the Companies (Management and Administration) Rules 2014 the extracts of AnnualReturn of the Company in Form MGT-9 is annexed as "Annexure-III" to thisReport forming part thereof. The same is also placed on the website of the Company asrequired under Section 134(3) (a) of the Companies Act 2013. The weblink therefor ishttp://www.ansals.com/pdfs/ ExtractofAnnualReturn2018-19.pdf.
Particulars of Loans Guarantees or Investments under Section 186
No loans advances guarantees and investments has been made by the Company during theyear under review. Hence details pursuant to section 186 of the Companies Act 2013 andSchedule V of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 may be treated as Nil
Particulars of Contracts or Arrangements with Related Parties
As a part of its philosophy of adhering to highest ethical standards transparency andaccountability your Company has historically adopted the practice of undertaking relatedparty transactions only in the ordinary and normal course of business and at arm's length.In line with the provisions of the Companies Act 2013 and the Listing Regulations theBoard has approved a policy on related party transactions. The said policy on relatedparty transactions has been placed on the Company's Website. All Related PartyTransactions are placed on a quarterly basis before the Audit Committee for its reveiw.The particulars of contracts or arrangements with related parties referred to in section188(1) and applicable rules of the Companies Act 2013 in Form AOC-2 are provided as "Annexure-IV" to this report forming part hereof. Your Company has taken necessaryapprovals as required by Section 188 read with the Companies (Meeting of Board and itsPowers) Rules 2014 from time to time in respect of the related party transactions
Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
No material changes or commitments have occurred between the close of the financialyear of the Company to which the balance sheet relates and the date of the report whichmay affect the financial position of the Company.
Pursuant to applicable provisions of the Companies Act 2013 and Listing Regulationsthe Board in consultation with its Nomination & Remuneration Committee hadformulated a framework containing inter-alia the criteria for performance evaluation ofthe entire Board of the Company its Committees and individual directors includingindependent directors. The performance of the board was evaluated by independent directorsin their separate meeting after seeking inputs from all the directors on the basis of thecriteria such as the adequacy and composition of the board and its structureeffectiveness of board processes information and functioning etc. The performance of thecommittees was evaluated by the board after seeking inputs from the committee members onthe basis of the criteria such as the composition of committees effectiveness ofcommittee meetings functions etc. A structured separate exercise is carried out by theboard and the nomination and remuneration committee reviews the performance of theindividual directors on the basis of the criteria such as qualifications expertiseattendance and participation in the meetings experience and competencies independentjudgement obligations and regulatory compliances performance of specific duties andobligations governance issues the contribution of the individual director to the boardand committee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc. In addition the Chairman was alsoevaluated on the key aspects of his role. Performance evaluation of independent directorswas done by the entire board excluding the independent director being evaluated.
The Board evaluation is conducted through questionnaire having qualitative parametersand feedback based on rating scale of 1-3. The directors expressed their satisfaction withthe evaluation process.
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
The shareholders of the Company at their 34th Annual General Meeting held on 28thSeptember 2018 had re-appointed Mr. Deepak Ansal as the Chairman & Managing Directorof the Company for a period of 3 years with effect from 01st April 2018 at a remunerationwhich shall not exceed 5% of the Net Profits of the Company (payable for the financialyear in which Company earns adequate profits) as prescribed under the Companies Act 2013subject to minimum remuneration in accordance with the provisions of Section II of Part IIof Schedule V of the Companies Act 2013 in case of no profits or inadequacy of profitsin the financial year based on the effective capital of the Company as per the provisionsof the Companies Act 2013 and other applicable laws for the time being in force.
Furthermore the shareholders of the Company at their 34th Annual General Meeting heldon 28th September 2018 had re-appointed Mr. Surrinder Lal Kapur Mr. Ashok Khanna and Mr.Maharaj Kishen Trisal as Non-Executive Independent Directors not liable to retire byrotation for a second term of 5 consecutive years on the Board of the Company effectivefrom 01st April 2019 to 31st March 2024. In accordance with the provisions of section152 of Companies Act 2013 Mr. Kushagr Ansal Whole-time Director & CEO of theCompany is liable to retire by rotation and being eligible offers himself forreappointment.
As on 31st March 2019 the composition of board was as given hereunder:
Name DIN Designation
|Name ||DIN ||Designation ||Date of Appointment |
|Mr. Deepak Ansal ||00047971 ||Chairman & Managing Director ||01.04.1990 |
|Mr. Surrinder Lal Kapur ||00033312 ||Independent Director ||15.07.2006 |
|Mr. Ashok Khanna ||01510677 ||Independent Director ||31.07.2000 |
|Mr. Maharaj Kishen Trisal ||00059545 ||Independent Director ||14.02.2013 |
|Mrs. Divya Ansal* ||02615427 ||Non- Executive Director ||14.09.2017 |
|Mr. Kushagr Ansal ||01216563 ||Whole time Director & CEO ||26.08.2006 |
*Mrs. Divya Ansal had resigned from the position of Non-Independent Non-ExecutiveDirector with effect from 9th April 2019.
PARTICULARS OF EMPLOYEES
Information required pursuant to section 197(12) of the Companies Act 2013 read withRule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is provided as "Annexure-V" to this Report. Your Board of Directorsafirms that the remuneration paid is as per the Remuneration Policy of the Company. Astatement containing inter alia particulars of top ten Employees in terms ofremuneration drawn and name of every employee if employed throughout the financial yearin receipt of remuneration of Rs.102 lakhs or more or employees employed for part of theyear and in receipt of Rs.8.5 lakhs or more per month pursuant to Rule 5(2) and 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 formingpart of this Report is attached herewith in "Annexure-VI".
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of Energy and Technology
Your Company is not engaged in any manufacturing activity; as such particulars relatingto Conservation of Energy and Technology Absorption as per section 134(3)(m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 are notapplicable
B. Foreign Exchange Earnings and Outgo
|a) Activities Relating to exports ||As the com- pany operates in Real Estate & Hospitality segment the Company is not involved in any activity relating to export. |
|b) Initiatives taken to increase exports || |
|c) Development of new export markets for products and services || |
d) Export plans
Particulars of Foreign Exchange Earnings
|a) Foreign Exchange Earnings - through Credit Cards as per bank certificates/advices ||Rs.23.93 Lakhs |
|b) Dividend Received in foreign currency (Net of CDT) ||Rs.Nil |
|c) Foreign Exchange Outgo Payment of Brokerage ||Rs.Nil |
|Travel Expenses ||Rs.47.05 Lakhs |
|Property Exhibition ||Rs.Nil |
|Professional Expenses ||Rs.Nil |
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
No significant and material orders were passed by the regulators or courts or tribunalsduring the financial year 2018-19 which have an impact on the going concern status andcompany's operations in future.
Your Company believes in adopting best practices of corporate governance. Corporategovernance principles are enshrined in the spirit of Ansal Housing Ltd. which form thecore values of the Company. These guiding principles are also articulated through theCompany's code of business conduct corporate governance guidelines charter of varioussub-committees and disclosure policy. Pursuant to the Regulation 34 of the ListingRegulations a separate section on corporate governance practices followed by yourCompany together with a certificate from M/s. Anjani Kumar & Associates CompanySecretaries on compliance with corporate governance norms under the Listing Regulationshas been annexed as part of this Report
In order to comply with the provisions of Regulation 46 read with other regulations ofthe SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 theCompany has designated an e-mail ID email@example.com which is exclusively for theclarifications/queries/grievance redressal of the investors of the Company.
LISTING OF EQUITY SHARES
The Securities of the Company are listed and traded at BSE Limited and National StockExchange of India Ltd. The Company has paid listing fee to BSE Ltd. as well as NationalStock Exchange of India Ltd. for the financial year 2018-19.
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2014
As a part of the policy for Prevention of Sexual Harassment in the organisation theCompany has in place an Internal Complaints Committee for prevention and redressal ofcomplaints of sexual harassment of Women at work place in accordance with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andrelevant rules thereunder. During the year under review no case was reported in thenature of sexual harassment at any workplace of the Company and any of itssubsidiaries/associates.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors to the best oftheir knowledge and belief confirm; i. that in the preparation of the annual accountsthe applicable accounting standards have been followed along with proper explanationsrelating to material departures; ii. that the directors have selected such accountingpolicies and applied them consistently and made judgements and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany for the financial year ended 31st March 2019 and of the profit of the Company forthat period; iii. that the directors had taken proper and sufficient care for maintenanceof adequate accounting records in accordance with the provision of the Act forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities; and iv. that the directors had prepared the annual accounts on a goingconcern basis; and v. that the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively. vi. that the directors had devised proper systems to ensurecompliances with the provisions of all applicable laws and that such systems were adequateand operating effectively.
The Board of Directors of your Company hereby confirms that all the provisions ofapplicable Secretarial Standards issued by the Institute of Company Secretaries of India(ICSI) i.e. Secretarial Standard-1 and Secretarial Standard-2 pertaining toMeetings of the Board of Directors' and General Meetings' respectively havebeen duly complied with by the Company during the year under review.
ACKNOWLEDGEMENTS AND APPRECIATION
The Board of Directors of your Company wishes to place on record its appreciation tothe Central and State Governments as well as their respective Departments and DevelopmentAuthorities connected with the business of the Company Company's bankers and businessassociates for the assistance co-operation and encouragement they extended to theCompany.
The Directors also extend their appreciation to the employees for their continuingsupport and unstinting efforts in ensuring an excellent all-round operational performance.The Directors would like to thank shareholders and deposit holders for their support andcontribution. We look forward to their continued support in future.
|Regd. Office : || |
|606 6th Floor Indra Prakash ||For and on behalf of the Board of Directors |
|21 Barakhamba Road || |
|New Delhi - 110 001 ||Sd/- |
|Place : New Delhi ||(Deepak Ansal) |
|Dated : 29th May 2019 ||Chairman and Managing Director |
| ||DIN: 00047971 |