Your Directors have the pleasure in presenting the Twenty Fifth Board's Report of theCompany ("the Company" or "Brigade") together with the AuditedFinancial Statements (Consolidated and Standalone) for the year ended March 31 2020.
|FINANCIAL HIGHLIGHTS || || || ||(Rs. in Lakhs) |
|Particulars || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Total Revenue ||199350 ||192861 ||268156 ||302726 |
|Operating Expenditure ||135853 ||132398 ||196893 ||218311 |
|Earnings before Interest Depreciation & Amortization ||63497 ||60463 ||71263 ||84415 |
|Depreciation & Amortization ||7560 ||6822 ||19204 ||14000 |
|Finance Costs ||20050 ||17784 ||34034 ||27850 |
|Profit before Tax from Continuing Operations ||35887 ||35857 ||18025 ||42565 |
|Exceptional Items ||1450 || ||2050 ||- |
|Profit before tax ||34437 ||35857 ||15975 ||42565 |
|Tax Expense || || || || |
|Current Tax ||6966 ||8179 ||7190 ||10287 |
|Deferred tax charge/(credit) ||1391 ||4256 ||(2455) ||4265 |
|Profit for the year ||26080 ||23422 ||11240 ||28013 |
|Share of profit from associate ||- ||- ||160 ||177 |
|Net Profit after taxes & Share of Profit of Associate ||26080 ||23422 ||11400 ||28190 |
|Other Comprehensive income (net of tax) ||(9) ||19 ||(153) ||67 |
|Total Comprehensive income for the year ||26071 ||23441 ||11247 ||28257 |
|Profit/(loss) attributable to: || ||- || || |
|Equity holders of the Parent || ||- ||12905 ||24058 |
|Non-Controlling Interests || || ||(1658) ||4199 |
Details of Appropriations:
(Rs. in Lakhs)
|Particulars ||Standalone || |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Surplus in the retained earnings as per last financial statements ||90100 ||92435 ||68095 ||80778 |
|Total Comprehensive income for the year (net of Noncontrolling interest) ||26071 ||23441 ||13027 ||24031 |
|Less: Cash dividends declared and paid || || || || |
|Final Dividend for FY 2018-19 ||2724 ||2722 ||2724 ||2722 |
|Interim Dividend for FY 2019-20 ||2044 ||- ||2044 ||- |
|Less: Tax on dividends paid on Final Dividend ||498 ||360 ||498 ||560 |
|Less: Tax on dividend paid on Interim Dividend ||369 ||- ||481 ||- |
|Less: Proft Reversal due to IND AS 115 (net of tax MI) ||- ||22694 ||- ||33005 |
|Add: Adjustment pursuant to Scheme of Amalgamation ||- ||- ||784 ||- |
|Less: Other adjustments (Net) ||- ||- ||456 ||427 |
|Net Surplus in the statement of profit and loss carried forward ||110536 ||90100 ||75703 ||68095 |
During the financial year 2019-20 the Company has on a standalone basis clocked atotal income of Rs.199350 Lakhs as compared to Rs.192861 Lakhs for the previous yearended March 31 2019 an increase of 3% on a year-on- year basis. Earnings beforeInterest Tax Depreciation and Amortization (EBITDA) has increased from Rs.60463 Lakhsto Rs.63497 Lakhs an increase of 5%. Total Comprehensive income was at Rs.26071 Lakhsfor the financial year ended March 31 2020 as compared to Rs.23441 Lakhs for theprevious year an increase by 11%.
The consolidated revenue for the Company for the financial year 2019-20 was Rs.268156Lakhs as compared to Rs.302726 Lakhs in the previous year a decrease of 11% onyear-on-year basis. Earnings before Depreciation Interest Tax and Amortization (EBITDA)decreased to Rs.71263 Lakhs in the previous year from Rs.84415 lakhs for the financialyear 2019-20. Total Comprehensive income was at Rs.11247 Lakhs for the financial yearended March 31 2020 as compared to Rs.28257 Lakhs for the previous year a decrease by60%.
SUBSIDIARIES/ JOINT VENTURES AND ASSOCIATES:
The Company had 13 direct subsidiaries 1 step down subsidiary 3 limited liabilitypartnerships and 1 associate company as at March 31 2020.
The Company doesn't have any material subsidiary as per the thresholds laid down underthe SEBI Listing Regulations as at March 31 2020.
The Board of Directors of the Company has approved a Policy for determining materialsubsidiaries in line with the SEBI Listing Regulations. The Policy has been uploaded onthe Company's website at: https://briqadeqroup.com/investor/corporate-qovernance/policies
FINANCIAL STATEMENTS OF SUBSIDIARIES AND ASSOCIATE COMPANIES
The Consolidated Financial Statements of the Company for the year 2019-20 are preparedin compliance with the applicable provisions of the Act including Indian AccountingStandards specified under Section 133 of the Act. The audited consolidated financialstatements together with the Auditors' Report thereon form part of the Annual Report.
Pursuant to Section 129(3) of the Act read with SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Statement containing salient features of thefinancial statements of each of the Subsidiaries Associates and Joint Venture Companiesin the prescribed Form AOC-1 is enclosed as Annexure-1 to this Report.
Audited financial statements together with the related information and other reports ofeach of the subsidiary Companies have also been placed on the website of the Company at: https://www.briqadeqroup.com/investor/financials-and-reports/financials-subsidiaries-and-associates
KEY FINANCIAL RATIOS FOR FINANCIAL YEAR 2019-20 COMPARED WITH FINANCIAL YEAR 2018-19:
|Particulars ||2019-20 ||2018-19 |
|Net Profit Margin ||(54%) ||36% |
|Return on Equity (RoE) ||(50%) ||54% |
|Dividend Payout ||278% ||(62%) |
Net profit/ROE is reduced due to capitalisation of Brigade Opus Brigade WTC KochiTower 2 Brigade Vantage Brigade Tech Gardens Phase 1 Orion Uptown Four Points-Sheratonat kochi and Grand Mercure at Gift City and Where Depreciation and interest cost postcompletion of the projects are charged to profit and loss for full year/part year from thedate of capitalisation in FY2019-20. In the FY2018-19 impact of the above capitalisationis only for January 2019 to March 2019.
TRANSFER TO RESERVES
The Company has not transferred any amount to General Reserves during the financialyear 2019-20.
The Board of Directors of the Company on March 16 2020 declared Interim Dividend ofRs.1 (Rupee One) per equity share of Rs.10/- each (i.e. 10%) out of the profits for thefinancial year 2019-20 and paid to the shareholders on March 27 2020. The total paymenton account of Interim Dividend (Including Interim Dividend Tax) was Rs.2412 Lakhs. TheBoard has not recommended any final dividend on the equity shares and the Interim Dividenddeclared by the Company is the final Dividend for the financial year 2019-20.
In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations') the Company hasformulated a Dividend Distribution Policy. The policy is given in Annexure-2 tothis Report. It is also accessible from the Company's website at https://briqadeqroup.com/investor/corporate-qovernance/policies/dividenddistributionpolicy.
The Company has not accepted any deposits from the public falling within the ambit ofSection 73 of the Companies Act
2013 read with Companies (Acceptance of Deposits) Rules
2014 and no amount of principal or interest was outstanding as on the Balance Sheetdate.
During the year under review the Company has not issued any Debentures. As on datethe Company does not have any outstanding Debentures.
Company's equity shares are tradable only in electronic form. As on March 31 2020nearly 100% of the Company's total paid up equity share capital representing 204380115shares are in dematerialised form.
TRANSFER TO INVESTOR PROTECTION FUND
Pursuant to applicable provisions of the Companies Act 2013 read with IEPF Authority(Accounting Audit Transfer and Refund) Rules 2016 (the Rules') all unpaid orunclaimed dividends are required to be transferred by the Company to the IEPF establishedby the Central Government after completion of seven years. Further according to theRules the shares in respect of which dividend has not been paid or claimed by the membersfor seven consecutive years or more shall also be transferred to the Demat account createdby IEPF Authority. Accordingly the Company has transferred Rs.273998/- to the InvestorEducation and Protection Fund the amount in unpaid Dividend Account opened in 2011-12which was due & payable and remained unclaimed & unpaid for a period of sevenyears. Further 3192 shares were transferred to the demat account of the InvestorEducation and Protection Fund Authority as mentioned above. Pursuant to Rule 6(8) of theRules under the bonus issue 8423 equity shares were allotted to the IEPF authoritybased on their shareholding as on the record date of August 29 2020 and an amount ofRs.20727.03 pertaining to sale proceeds of fractional bonus shares were transferred tothe IEPF.
The details of the above are provided in the website of the Company at: https://brigadegroup.com/investor/investor-information/unclaimed-shares.
EMPLOYEE STOCK OPTION SCHEME
The Employee Stock Option Scheme titled "Brigade Employee Stock Option Plan2011" was rolled out in the financial year 2014-15.
The Employee Stock Option Scheme titled "Brigade Employee Stock Option Plan2017" was rolled out in the financial year 2017-18. Statement giving detailedinformation on the plan in accordance with SEBI Regulations is contained in Annexure-3 tothis Report.
There are no material changes to the ESOP Schemes referred above and the Schemes are indue compliance of the SEBI (Share Based Employee Benefits) Regulations 2014. Messers S.R.Batliboi & Associates LLP Chartered Accountants (Firm Registration Number101049W/E00004) Statutory Auditors of the Company have certified that the aforesaidSchemes have been implemented in accordance with SEBI (Share Based Employee Benefits)Regulations 2014. Disclosures as required under SEBI (Share Based Employee Benefits)Regulations 2014 is uploaded in the Company's website and can be accessed at https://brigadegroup.com/investor/investor-information/investor-updates
ISSUE OF BONUS EQUITY SHARES
The Board of Directors at their meeting held on July 15 2019 recommended issue ofbonus equity shares in the proportion of 1:2 i.e. 1 (One) equity share of Rs.10/- each forevery 2 (Two) fully paid-up equity shares held. The said bonus issue was approved by theMembers of the Company through resolution passed through e-voting and instapoll in thetwenty fourth annual general meeting held on August 14 2019 68101581 bonus shareswere allotted to the members whose names appeared in the register of members on August 292019 being the record date fixed for this purpose.
As part of the aforesaid allotment 12222 bonus equity shares representing fractionalentitlement(s) of eligible Members were consolidated and allotted to M/s. SNACO ConsultingPrivate Limited an Independent Professional Company appointed by the Board. SubsequentlyM/s. SNACO Consulting Private Limited sold such equity shares at the prevailing marketprice and distributed the net sale proceeds after adjusting the costs and expenses inrespect thereof among the eligible Members in proportion to their respective fractionalentitlements.
ISSUE OF CONVERTIBLE WARRANTS ON PREFERENTIAL BASIS
The Board of Directors at their meeting held on July 15 2019 approved the preferentialissue of 4275000 Convertible Warrants at Rs.269 per Convertible Warrant to 3 PromoterGroup person(s)/ entity pursuant to SEBI (Issue of Capital and Disclosure Requirements)Regulations 2018. Each Convertible Warrant is convertible into or exchangeable for One(1) equity share of face value of Rs.10/- each ("the Equity Shares") at apremium of Rs.259/- per share within a period of 18 (Eighteen) months from the date ofallotment of equity warrants in one or more tranches as the case may be and on suchother terms and conditions as applicable. The Committee of Directors of the Company hadapproved the allotment of 4275000 Convertible Warrants to 3 Promoter Group person(s)/entity on August 28 2019 after receiving initial warrant subscription amount ofRs.287493750 (Rupees Twenty Eight Crores Seventy Four Lakhs Ninety Three Thousand andSeven Fifty only) equivalent to 25% of the warrant issue price as prescribed by the SEBI(Issue of Capital and Disclosure Requirements) Regulations 2018.
The record date for the bonus issue of equity shares was August 29 2019. TheSecurities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations
2018 enables making for appropriate adjustments to be made for convertible instrumentsin case of any corporate action viz. bonus issue. Accordingly the adjusted number ofConvertible Warrants after giving effect to on the bonus issue of equity shares is6412500 and the adjusted price of Convertible Warrants is Rs.179.33 per Warrant.
During the year the authorised share capital of the Company has increased fromRs.1500000000/- divided into 150000000 equity shares of Rs.10/- each toRs.2500000000/- divided into 250000000/- equity shares of Rs.10/- each which wasapproved by the Members through e-voting and instapoll in the twenty fourth Annual GeneralMeeting of the Company held on August 14 2019. The following allotment of equity shareshas been made during the year:
Allotment of 68198756 equity shares of the Company to Existing Members onAugust 30 2019 in the form of Bonus issue by capitalization of sums standing to thecredit of the free reserves and/or the securities premium account and/or the capitalredemption reserve account of the Company.
Allotment of an 21600 equity shares to eligible employees on exercise ofoptions granted under the Brigade Enterprises Limited Employee Stock Option Scheme 2011and
75575 equity shares under the Brigade Enterprises Limited Employee Stock OptionScheme 2017.
The issued subscribed and paid-up equity share capital of the Company has increasedfrom to 136181561 equity shares of Rs.10/- each to 204380317 equity shares ofRs.10/- each due to the aforesaid allotment of equity shares.
During the year under review the Company has not issued shares with differentialvoting rights and sweat equity shares.
Your Company is a leading real estate developer in South India based in Bengaluru andslowing expanding its area of operations in other parts of India. With a vast experienceof a decade in building landmark structures across residential commercial and hospitalitysectors the Company has garnered exceptional customer trust and brand equity in the realestate space. The operations of the Company can be classified into two main Segments:
1. Income from construction and development of Real Estate Projects
2. Lease Rental Income from Office and Retail Assets
A detailed information of ongoing projects as on March 31
2020 has been given in the Management Discussion and Analysis Report which is formingpart of the Annual Report.
The group proposes to launch 4.49 mn. sq.ft. in the Financial year 2020-21. This willcomprise of 2.65 mn. sq.ft. of residential space 1.84 mn. sq.ft. of commercial space.
During the financial year 2019-20 a total of 5.82 mn. sq. ft. has been constructed.
The Group is currently having ongoing real estate projects aggregating to 21.37 mn.sq.ft. of saleable area residential projects aggregating to 15.62 mn. sq.ft. commercialprojects aggregating to 5.55 mn. sq.ft. and hospitality projects aggregating to 285 Keys.
World Health Organisation (WHO) declared outbreak of Coronavirus Disease (COVID-19) aglobal pandemic on March 11 2020. Consequent to this Government of India declaredlockdown on March 23 2020 and the Company suspended the operations in all ongoingprojects of the Company in compliance with the lockdown instructions issued by the Centraland State Governments. COVID-19 has impacted the normal business operations by way ofinterruption in Project execution supply chain disruption unavailability of personneland closure of retail spaces during the lock-down period. The operations commenced afterthe lockdown was lifted. The details of the same are elaborated in the ManagementDiscussion & Analysis Report.
BOARD OF DIRECTORS
As at March 31 2020 the Board of the Company comprised 10 Directors of which 5 areExecutive Directors and 5 are Non-Executive Independent Directors. The composition of theBoard of Directors is in due compliance of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
APPOINTMENT/ RE-APPOINTMENT OF DIRECTORS:
In accordance with the Articles of Association of the Company and the provisions ofSection 152(6)(e) of the Companies Act 2013 Mr. Amar Mysore (DIN: 03218587) and Ms.Nirupa Shankar (DIN: 02750342) Executive Directors of the Company will retire by rotationat the ensuing Annual General Meeting and being eligible offer themselves forreappointment
Mr. Aroon Raman (DIN: 00201205) has been re-appointed as an Independent Director of theCompany for a further period of 5 years with effect from August 5 2019 and the Companyhas received his declaration of Independent Status and statement that he doesn't sufferfrom any disqualifications as per Section 149 of the Companies Act 2013 and as stipulatedunder SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Ms. Githa Shankar (DIN: 01612882) Director of the Company tendered her resignation fromthe position of Wholetime Director of the Company with effect from closing hours ofNovember 06 2019 as a part of succession planning.
The Board of Directors of the Company on November 06 2019 based on recommendation ofNomination & Remuneration Committee (NRC) appointed Mr. Roshin Mathew (DIN: 00673926)as an Additional Director and Wholetime Director designated as Executive Director of theCompany for a period of 5 (Five) years with effect from November 07 2019 subject toshareholder's approval in the ensuing general meeting.
Mr. Bijou Kurien (DIN: 01802995) has completed his first term as an IndependentDirector of the Company on January 31 2020. He has given his consent for re-appointmentand he has not been disq ualified for reappointment as an Ind epen den t Director for asecond term of five years subject to approval of the Members in the ensuing Annual generalMeeting by special resolution.
The Notice convening the twenty fifth Annual General Meeting includes the proposals forthe reappointment of the Directors. Brief resume of the Directors proposed to beappointed nature of their expertise in specific functional areas and names of theCompanies in which they hold directorship/ membership/ chairmanship of the Board orCommittees as stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 have been provided as an annexure to the Notice convening the TwentyFifth Annual General Meeting.
None of the Directors of the Company are disqualified under Section 164(2) of theCompanies Act 2013.
During the year under review the Board of Directors of the Company has met 6 times onthe following dates:
May 7 2019
July 15 2019
August 14 2019
November 6 2019
February 05 2020
March 16 2020
In accordance with the provisions of the Companies Act 2013 a separatemeetings of the Independent Directors and other Directors of the Company was held on March19 2020.
A detailed note on the composition of various Committees of the Board and theirmeetings including the terms of reference were given in the Corporate Governance Reportforming part of the Annual Report.
DECLARATION OF INDEPENDENT DIRECTORS
The Company's Independent Directors have submitted requisite declarations confirmingthat they continue to meet the criteria of independence as prescribed under Section 149(6)of the Act and Regulation 25 of Securities and Exchange Board of India (ListingObligations and Disclosure) Regulations 2015.
The Independent Directors have also given undertaking that they are not aware of anycircumstance/situation which exists or may be reasonably anticipated that could impairor impact their ability to discharge their duties with objective independent
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
Pursuant to Section 178(3) of the Companies Act 2013 the Nomination and RemunerationCommittee of the Board has formulated the criteria for identification and Board nominationof the suitable candidates as well as the policy on remuneration for Key ManagerialPersonnel and other senior employees of the Company. The Committee while evaluatingpotential candidates for Board membership considers a variety of personal attributesincluding experience intellect foresight judgment and transparency and match thesewith the requirements set out by the Board.
The Company's Remuneration policy provides the framework for remunerating the membersof the Board Key Managerial Personnel and other employees of the Company. This Policy isguided by the principles and objectives enumerated in Section 178(4) of the Companies Act2013. The Remuneration Policy for Directors Key Managerial Personnel and SeniorManagement Personnel is available on the website of the Company at https://briqadeqroup.com/investor/corporate-qovernance/policies.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Over the years the Company has developed a robust familiarisation process for thenewly appointed Directors with respect to their roles and responsibilities way ahead ofthe prescription of the regulatory provisions. The process has been aligned with therequirements under the Act and other related regulations. This process inter aliaincludes providing an overview of the Real Estate industry the Company's business modelthe risks and opportunities and quarterly updates on the important changes in theregulatory environment along with the nomination of directors for various trainingprogrammes. etc. Details of the familiarisation programme are explained in the Report onCorporate Governance Report and are also available on the Company's website at https://brigadegroup.com/investor/corporate-governance/policies/Directorsfamiliarisationprogramme-2019-20.
ANNUAL PERFORMANCE EVALUATION OF THE BOARD
The Board along with the Nomination and Remuneration Committee developed and adoptedthe criteria and framework for the evaluation of each of the Directors and of the Boardand its Committees pursuant to the provisions of the Companies Act 2013 and the CorporateGovernance requirements under Regulation 25 (4) of Securities and Exchange Board of India(Listing Obligations and Disclosure) Regulations 2015.
The Board evaluation was conducted through Structured assessment questionnaire designedwith qualitative parameters and feedback based ratings through an online portal Boardevaluation comprises of various aspects of the Board's functioning in terms of structureits roles & responsibilities competency quality quantity and timelines of flow ofinformation transparency in the discussions amongst the Board interest of shareholdersits meetings strategy corporate governance and other dynamics of its functioning besidesthe financial reporting process level of independence risk management successionplanning.
The evaluation of the Committees were based on their terms of reference fixed by theBoard besides the dynamics of their functioning in terms of meeting frequencyeffectiveness of contribution etc. Separate questionnaires were used to evaluate theperformance of individual Directors on parameters such as attendance familiarisation ofCompany values policies beliefs & code of conduct effective communication theirlevel of engagement and contribution objective judgement etc.
The Chairman and Managing Director's evaluation was based on the key aspects of hisrole leadership qualities commitment strategic & financial planning communicationengagement with the Board compliance etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanthe Board as whole and the Non-Independent Directors was carried out by the IndependentDirectors at their separate meeting held during the year.
The Independent Directors have expressed satisfaction at the robustness of theevaluation process through online the Board's freedom to express its views on matterstransacted at the Meetings and the openness and transparency with which the Managementdiscusses various subject matters specified on the agenda of meetings.
The consolidated Board evaluation report was provided to the Chairman of the Nominationand Remuneration Committee who will brief the Independent Directors on the same and BoardChairperson. The Board Chairperson discussed the results of evaluation of the individualDirectors separately with them in detail and also the action areas identified in theprocess are being implemented to ensure a better interface at the Board/Management level.
DIRECTORS' RESPONSIBILITY STATEMENT
The Board of Directors hereby confirms that:
a) in the preparation of the annual financial statements for the year ended March 312020 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
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 at the end of the financial year and ofthe profit of the Company for that period;
c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the annual financial statements have been prepared on a going concern basis;
e) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively;
f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and such systems are adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
Mr. M. R. Jaishankar Chairman & Managing Director Mr. Atul Goyal Chief FinancialOfficer and Mr. P. Om Prakash Company Secretary & Compliance Officer are the KeyManagerial Personnel in accordance with the provisions of Section 203 of the CompaniesAct 2013. There has been no change in the Key Managerial personnel during the year.
REMUNERATION DETAILS OF DIRECTORS KEY MANAGERIAL PERSONNEL AND EMPLOYEES:
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in the prescribed formatand annexed as Annexure-4 to this Directors' Report.
The details of employees who are in receipt of remuneration exceeding the limitsprescribed under Section 134 of the Companies Act 2013 read with Rule 5(2) & 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isappended as Annexure-5. In terms of Section 136(1) of the Companies Act 2013 andthe Rules made there under the Annual Report is being sent to the shareholders and othersentitled thereto excluding the aforesaid annexure. Any shareholder interested in obtainingthe same may write to the Company Secretary & Compliance Officer.
Messers S.R. Batliboi & Associates LLP Chartered Accountants (Firm RegistrationNumber 101049W/E00004) were reappointed at the Twenty Fourth Annual General Meeting heldon August 14 2019 as the Statutory Auditors of the Company for a period of 5 years tillthe conclusion of Twenty Ninth Annual General Meeting of the Company. They have confirmedtheir eligibility for the FY 2020-21 under Section 141 of the Companies Act 2013 and theRules framed there under.
There are no qualifications or adverse remarks in the Statutory Auditor's Report forthe financial statements for the year ended March 31 2020 which requires any explanationfrom the Board of Directors.
The Board of Directors affirms that the Company has complied with the applicableSecretarial Standards (SS) issued by the Institute of Companies Secretaries of India.
SECRETARIAL AUDIT REPORT
Pursuant to provisions of the Companies Act 2013 the Board of Directors of theCompany have appointed Mr. K Rajshekar Practicing Company Secretary (CP No.2468) toconduct the Secretarial Audit for the financial year 2019-20. The report of theSecretarial Auditor is annexed to and forms part of this Report as Annexure-6.There are no qualifications reservations adverse remarks or disclaimers given by theSecretarial Auditor in the Report.
Pursuant to Section 148 of the Companies Act 2013 read with Companies (Cost Recordsand Audit) Rules 2014 and amendments thereof the Company is required to maintain costaccounting records. Further the cost accounting records maintained by the Company arerequired to be audited. The Board of Directors of the Company have appointed Messrs Murthy& Co. LLP Cost Accountants (LLP ID No. AAB-1402) as Cost Auditors to audit the costaccounting records maintained by the Company under the said Rules for the financial year2019-20 at a fees of Rs.1.25 lakhs plus applicable taxes and out of pocket expensessubject to the ratification of the said fees by the Shareholders at the Annual GeneralMeeting. Accordingly a resolution seeking the shareholder's ratification of theremuneration payable to the Cost Auditor for the FY 2019-20 is included in the Noticeconvening the 25th Annual General Meeting.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management's Discussion and Analysis Report for the year under review asstipulated under SEBI (LODR) Regulations 2015 is forming part of the Annual Report.
CORPORATE GOVERNANCE REPORT
Your Company provides utmost importance to best Governance practices and are designedto act in the best interest of its stakeholders. The Fundamentals of Governance at Brigadeincludes transparency accountability integrity and Independence. In terms of Regulation34(3) read with Schedule V of the Listing Regulations a separate section on CorporateGovernance including a certificate from Ms. Aarthi G. Krishna Practicing CompanySecretary (CP No.5645) confirming compliance is annexed to and forms an integral part ofthis Report.
BUSINESS RESPONSIBILITY REPORT
A separate section on Business Responsibility Reporting forms part of this AnnualReport as required under Regulation 34(2)(f) of SEBI (LODR) Regulations 2015.
Sustainability Report for the financial year 2019-20 as per the Global ReportingInitiative (GRI) standards is annexed to this Annual Report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans given investments made securities provided and guaranteesgiven as required under Section 186 of the Companies Act 2013 read with the Companies(Meetings of the Board and its Powers) Rules 2014 are provided in note 6 and 7 formingpart of the standalone financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the Financial Year 2019-20 all the transactions with related parties wereentered into at arm's length basis and in the ordinary course of business. Alltransactions with Related Parties are placed before the Audit Committee for approval.Prior approval of the Committee is obtained on a quarterly basis for transactions whichare of foreseen and repetitive nature. Omnibus approvals in respect of transactions whichare not routine or which cannot be foreseen or envisaged are also obtained as permittedunder the applicable laws.
The details of transactions proposed to be entered into with Related Parties are placedbefore the Audit Committee for approval on an annual basis before the commencement of thefinancial year. Thereafter a statement containing the nature and value of thetransactions entered into by the Company with Related Parties is presented for quarterlyreview by the Committee.
There are no materially significant related party transactions made by the Company withits Promoters Directors Key Managerial Personnel or their relatives which may have apotential conflict with the interest of the Company at large. None of the Directors andthe Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis theCompany.
Transactions with related parties during the year are listed out in note 34 formingpart of the standalone financial statements.
The Company's policy on dealing with Related Parties as approved by the Board isavailable on the Company's website at the following link: https://www.briqadeqroup.com/investor/corporate-qovernance/policies.
INTERNAL FINANCIAL CONTROL SYSTEM
As per Section 134 of the Companies Act 2013 the term Internal FinancialControls' (IFC) means the policies and procedures adopted by the Company for ensuring:
(a) orderly and efficient conduct of its business including adherence to company'spolicies
(b) safeguarding of its assets
(c) prevention and detection of frauds and errors
(d) accuracy and completeness of the accounting records and
(e) timely preparation of reliable financial information.
The Company has adequate internal financial control systems in place with reference tothe financial statements.
The Company's internal financial controls are commensurate with the scale andcomplexity of its operations. The controls were tested during the year and no reportablematerial weaknesses identified either in their design or operations of the controls wereobserved.
COMMITTEES OF THE BOARD
As on March 31 2020 the Board had 5 Committees:
1. Audit Committee
2. Nomination and Remuneration Committee (NRC)
3. Corporate Social Responsibility Committee (CSR)
4. Stakeholders Relationship Committee (SRC)
5. Risk Management Committee (RMC)
The Audit Committee comprises four members. The Chairman of the Committee is anIndependent Director. The Committee met five times during the year. Details of the roleand responsibilities of the Audit Committee the particulars of meetings held andattendance of the Members at such Meetings are given in the Corporate Governance Report.
NOMINATION & REMUNERATION COMMITTEE
The NRC Committee comprises of three members all being Independent Directors. TheCommittee met five times during the year. Details of the role and functioning of theCommittee are given in the Corporate Governance Report.
STAKEHOLDERS RELATIONSHIP COMMITTEE
The Stakeholder's Relationship Committee comprises three Members. The Committee isgoverned by a Charter. The details of the constitution of the Committee scope andfunctions are listed out in the Corporate Governance Report annexed to this Report.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
A Corporate Social Responsibility (CSR) Committee has been constituted in accordancewith the provisions of Section 135 of the Companies Act 2013. The Committee comprisesfour members. The details of the constitution of the Committee scope and functions arelisted out in the Corporate Governance Report annexed to this Annual Report.
The disclosures as required under Section 135 of the Companies Act 2013 read with Rule8(1) of the Companies (Corporate Social Responsibility Policy) Rules 2014 is appended as Annexure-7to this Report.
RISK MANAGEMENT COMMITTEE
The Company has constituted a Risk Management Committee aligned with the requirementsof the Companies Act 2013 and Regulation 21 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 consisting of Executive Director Non-Executive Directorand Independent Directors to identify and assess business risks and opportunities. Thedetails of the Committee and its terms of reference are set out in the CorporateGovernance Report forming part of this Report.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has a well-established whistle blower policy as part of vigil mechanism forobserving the conduct of Directors and employees and report concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of conduct to theEthics Committee members or the Chairman of the Audit Committee. This mechanism alsoprovides for adequate safeguards against victimization of Director(s)/ employee(s) whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee in exceptional cases. The details of the Whistle Blower Policy and the Committeewhich oversees the compliance are explained in detail in the Corporate Governance Report.
EXTRACT OF ANNUAL RETURN:
In terms of Section 134(3)(a) and Section 92 (3) of the Companies Act 2013 read withthe Companies (Management and Administration) Rules 2014 the extract of the AnnualReturn of the Company for the financial year 2019-20 in Form No. MGT-9 is appended as Annexure-8to this Report.
CODE OF CONDUCT
Your Company has in place a Code of Conduct which helps to maintain high standards ofethics for the Company's employees. The Code lays down the standard of conduct which isexpected to be followed by the Directors and by the senior management employees in theirbusiness dealings and in particular on matters relating to integrity in the work place inbusiness practices and in dealing with stakeholders. The Company has adopted a Code ofConduct which applies to all its Directors and employees in terms of Regulation 17 of theSEBI (LODR) Regulations 2015. All the Board Members and the Senior Management Personnelof your Company have affirmed their compliance with the Code of Conduct for the currentyear.
A declaration signed by the Chairman and Managing Director and Chief Financial officeraffirming compliance of the Code of Conduct by the Directors and senior managementpersonnel of the Company for the financial year 2019-20 is annexed and forms part of theCorporate Governance Report.
PREVENTION OF INSIDER TRADING
The Company has adopted a Code of Conduct for Prevention of Insider Trading inaccordance with SEBI (Prohibition of Insider Trading) Regulations 2015 with a view toregulate trading in securities by the Directors and designated employees of the Company.The objective of this Code is to protect the interest of Shareholders at large to preventmisuse of any price sensitive information and to prevent any insider trading activity bydealing in shares of the Company by its Directors and Designated Persons.
The Code requires pre-clearance for dealing in the Company's shares for alltransactions by Directors and designated employees (together called Designated Persons)and prohibits the purchase or sale of Company's securities by Designated Persons while inpossession of unpublished price sensitive information in relation to the Company. Furthertrading in securities is also prohibited for Designated Persons during the period when theTrading Window is closed. The Company Secretary is responsible for implementation of theCode.
The Company also has in place a Code for practices and procedures for fair disclosureof unpublished price sensitive information which is available on the website of theCompany at: https://brigadegroup.com/investor/corporate-governance/policies/preventionofinsidertrading.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars in respect of conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3)(m) of the Companies Act2013 read with Companies (Accounts) Rules 2014 is appended as an Annexure-9 tothis report.
Your Company is determined to accelerate its growth story by corresponding to thechanging needs of diverse workgroup by fostering an engaging work environment toconstantly build the unique capabilities and skills of the people. Robust HR policies arein place which enables building a stronger performance culture and at the same timedeveloping current and future leaders.
The employee strength of the Company at the end of FY i.e. March 31 2020 was 770.
Your Company has in place Code of Ethics for all the employees which serves as a commonguide to employees and decision makers in the organisation. It specifies how theorganisation expects its employees to behave what kind of behavior it considersacceptable or unacceptable the kind of business practices it endorses the values that itholds in high regard. This enables a healthy corporate culture and makes it possible forindividuals to exercise their judgment confidently knowing the decisions they are makingare in sync with the organisation's point of view and systems of operation.
In order to provide women employees a safe working environment at workplace and also incompliance with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules framed thereunder the Company hasformulated a well defined policy on prevention prohibition and redressal of complaintsrelating to sexual harassment of women at the workplace. As an organization the Companyis committed to ensure that every employee is treated with dignity and respect and worksin a conducive work environment which promotes professional growth of employee andencourages equality of opportunity.
All women who are associated with the Company-either as permanent employees ortemporary employees or contractual persons including service providers at Company sitesare covered under the above policy. Further to provide an empowering and enablingatmosphere to women employees the Company has continuously endeavoured to build the workculture which promotes the respect and dignity of all women employees across theorganisation. The Company has formulated a comprehensive policy on prevention prohibitionand redressal against sexual harassment of women at workplace which is also in accordancewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The said policy has been made available on theinternal portal of the Company for information of all employees.
A "Complaints Redressal Committee'' (CRC) has been set up comprising of threefemale and two male employee. One of the female employees is the Chairperson of theCommittee. There is one external member on the Committee who is a specialist in dealingwith such matters.
No complaints pertaining to sexual harassment of women employees were received duringthe year ended March 31 2020.
The Company believes that only way it can excel is by empowering its people andconsistently providing opportunities to learn and grow. Our Learning & Developmentprocess for employees is focused on supporting high performance through various approachesdriven comprehensively by HR Business Excellence QA/QC Safety & Technical trainingteams. The Company aims to contribute to the overall development of its employees throughextensive training & motivational programs. The Board of Directors would like toexpress their appreciation to employees for their sincerity hard work dedication andcommitment.
AWARDS AND RECOGNITIONS
During the year under review your Company received numerous awards and accolades whichwere conferred by reputable organizations. Some of the awards and recognitions yourCompany received in 2019-20 are:
Best Developer of the year' Award at the Times Business Awards 2019.
Recognised as the' Best Place to Work in the Real Estate Category' for the 10thyear in a row by Great Place to Work Institute.
Brigade Hospitality Services Ltd has for the first time been certified by theGreat Place to Work Institute and ranked 15th amongst India's Great Mid-sizeworkplaces.
Orion Mall received the Most admired shopping centre of the year' Award atthe Times Business Awards 2019.
Nalapad Brigade Centre awarded the Best Commercial project-South Zone' atthe CNBC AWAAZ Awards 2019.
India Top Challengers' Award at the CWAB Awards 2019
Integrated Township Project of the Year Award for Brigade Cornerstone Utopia at11th Realty Plus Awards 2019.
Lifetime Achievement Award for Mr. M. R. Jaishankar at 11th RealtyPlus Awards 2019.
Excellence in Delivery Award for Brigade Panorama at 11th Realty PlusAwards 2019.
Ranked one among India's 75 Best Places to Work for Women.
Brigade International Financial Centre Gujarat- our flagship project in GIFTCity Ahmedabad received the Commercial Project of the Year Award' at the RealtyPlus Awards 2019
Brigade Mountain View won the award for Best Residential Dwellings above50 units in Mysuru' at the CARE Awards 2019.
Brigade Opus won the Best Commercial Complex Award at the CARE Awards 2019
Brigade Group was awarded the Best Developer of the Year South India at theCommon floor and India property Realty Awards 2020
ADDITIONAL INFORMATION TO SHAREHOLDERS
All important information such as financial results investor presentations pressreleases new launches and project updates are made available on the Company's website https://BrigadeGroup.com/investor on a regular basis.
There were no significant or material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year till the date of thisreport.
There is no change in the nature of the business of the Company.
There are no differential voting rights shares issued by the Company.
Neither the Managing Director nor the Whole-time Director have received anyremuneration or commission from any of the subsidiaries joint ventures or associates.
There were no sweat equity shares issued by the Company.
Your Directors would like to thank shareholders for reposing confidence and faith inthe Company and its management.
Your Directors would also like to take this opportunity to thank customers employeessuppliers contractors bankers business associates partners and statutory authoritiesfor their continuous support co-operation encouragement and patronage.
| ||By order of the Board |
| ||For Brigade Enterprises Limited |
|Place: Bangalore ||M.R. Jaishankar |
|Date: June 18 2020 ||Chairman and Managing Director |