To the Members
Your Directors have the pleasure to present the 23rd Annual Report of yourCompany along with the Audited Financial Statements for the year ended 31stMarch 2017.
The summarized financial results of the Company during the year under review are asunder:-
|PARTICULARS ||Year Ended 31.03.2017 ||Year Ended 31.03.2016 |
|Total Turnover ||7471.96 ||7014.49 |
|Gross Profit/ (Loss) ||1799.67 ||1747.30 |
|Add/ (Less) : Exceptional Items ||9.87 ||37.90 |
|Less : || || |
|(a) Depreciation ||1441.66 ||1504.66 |
|(b) Finance Cost ||3029.68 ||3050.14 |
|(c) Deferred Tax Charge ||237.65 ||313.35 |
|Net Profit/(Loss) ||-2899.45 ||-3082.95 |
|Appropriations : || || |
|General Reserve ||0 ||0 |
|Proposed Dividend ||0 ||0 |
|Tax on Dividend ||0 ||0 |
|Balance Brought Forward ||-13829.95 ||-10746.99 |
|Addition on Account of Amalgamation ||0 ||0 |
|Accumulated Profits ||-16729.40 ||-13829.94 |
PERFORMANCE REVIEW & OUTLOOK
The total income for the year under review was ' 7471.96 lakhs as against 7014.49 lakhsin the previous year.
The total turnover of the hotel unit of the Company Vivanta By Taj Gurgaon-NCR forthe financial year under review was ' 6946.66 lakhs as compared to ' 6747.45 lakhs duringthe previous year. During the financial Year 2016-2017 the Company has reported higherGross Profit amounting to ' 1799.67 lakhs compared to ' 1747.30 lakhs in the previousyear. However Net Loss (after deduction of exceptional items depreciation finance costand deferred tax charge) amounting to ' 2899.45 lakhs compared to ' 3082.95 lakhs in theprevious year has been reported.
The Industry Trends and outlook are summed up in the Management Discussion and Analysiswhich forms part of this report.
TRANSFER OF AMOUNT TO RESERVE
The Company does not propose to transfer any amount to reserves.
In view of the brought forward and current year losses your directors regret theirinability to recommend dividend for the year under review.
SCHEME OF ARRANGEMENT
The Board of Directors in their meeting held on 10th February 2016 had approved aComposite Scheme of Arrangement (the Scheme') between HB Estate Developers Limited(the Company') HB Stockholding Limited and HB Portfolio Limited and theirrespective members and creditors under Sections 391 to 394 read with Sections 100 to 104of the Companies Act 1956 or any corresponding provisions of the Companies Act 2013subject to various approvals as may be required. The Appointed Date(s) in the Scheme are01st April 2015 02nd April 2015 and 03rd April 2015as particularly defined in the Scheme of Arrangement.
The Company received NIL Observation Letter / No Objection Certificate dated 23rdJune 2016 from the Bombay Stock Exchange (BSE Limited) in terms of Regulation 37 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
In terms of the order dated 16th September 2016 passed by the Hon'ble HighCourt of Punjab & Haryana at Chandigarh the Court Convened Meeting (CCM) of theEquity Shareholders Unsecured Creditors and Secured Creditors of the Company was held on10th December 2016. The Equity Shareholders Unsecured Creditors and SecuredCreditors of the Company accorded their necessary approval to the Scheme with therequisite majority. The Company has also received requisite approval to the Scheme fromits Public Equity Shareholders by way of Postal Ballot including e-voting result of whichwas declared on 12th December 2016 pursuant to SEBI Circular bearing No.CIR/CFD/CMD/16/2015 dated 30th November 2015.
The Company Petition has been duly transferred from the Hon'ble High Court of Punjaband Haryana Chandigarh to the National Company Law Tribunal Chandigarh Bench atChandigarh as per the provisions of Sec 230 to 233 of the Companies Act 2013 read withthe Companies (Compromises Arrangements and Amalgamations) Rules 2016 and the Companies(Transfer of Pending Proceedings) Rules 2016 notified by the Ministry of CorporateAffairs vide its Notification Dated 07th December 2016 which came into forcewith effect from 15th December 2016.
The matter came up for hearing on 11th May 2017 before the National CompanyLaw Tribunal (NCLT) Chandigarh Bench at Chandigarh. The Hon'ble Bench of NCLT admittedthe Second Motion Application filed by the Company and passed an order for issuing Noticealong with copy of Petition and Scheme to various authorities. The next date of hearinghas been fixed for 20th July 2017.
The Copy of Scheme of Arrangement along with all other documents are available on thewebsite of the Bombay Stock Exchange (BSE Limited) http://www.bseindia.com and also onthe Company's website having following web link http://www.hbestate.com/Scheme ofArrangement.html
The paid up Share Capital of the Company as on March 312017 was Rs. 961382870consisting of 16138287 Equity shares of Rs. 10 each and 8000000 Preference Shares ofRs. 100 each. During the year under review the Company has not issued shares withdifferential rights for voting dividend or otherwise nor granted stock options or sweatequity.
The Shareholding of Directors of the Company (including Promoter Director) is given inthe Corporate Governance Report forming part of this report.
Equity Shares of your Company are listed on Bombay Stock Exchange and Preference Sharesof your Company are not listed on any Stock Exchange.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the Notes of the Financial Statements.
The Company has not accepted any Deposits from the Public under Section 73 of theCompanies Act 2013 read with the Companies (Acceptance of Deposits) Rules 2014.
CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
SIGNIFICANT AND OTHER MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant material orders passed by the Regulators or Courts or Tribunalduring the year under review which has an impact on the Going Concern status and Company'soperations in future.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to sub-section (3) (c) & (5) of Section134 of the Companies Act 2013 itis hereby stated that:
(a) in the preparation of the Annual Accounts for the year ended 31st March2017 the applicable accounting standards have been followed with proper explanationrelating to material departures if any;
(b) the accounting policies adopted in the preparation of the annual accounts have beenapplied consistently except as otherwise stated in the Notes to Financial Statements andreasonable and prudent judgments and estimates so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year 2016-2017 and of theprofit or loss for that period;
(c) proper and sufficient care has been taken 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 for the year ended 31st March 2017have been prepared on a going concern basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and operating effectively;
(f) that system to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary and no Company has become or ceased to beCompany's Subsidiary during the year under review.
The Board of Directors has approved a Policy for Determining Material Subsidiaries incompliance with the provisions of Regulation 16 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The said Policy has been uploaded on thewebsite of the Company www.hbestate.com having following web link www.hbestate.com/Investor Centre/Corporate Governance
(ii) Joint Ventures
The Company is not having any Joint Venture business and no Company has become itsJoint Venture during the year under review.
(iii) Associate Companies
In terms of Sec 2(6) of the Companies Act 2013 Parsvnath HB Projects Pvt. Ltd. is theAssociate Company. A separate statement containing the salient features of the FinancialStatement of the Company's Associates is being provided in Form AOC-1.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
(i) Appointment / Reappointment / Resignation of Directors and KMP
As per the provisions of Section 152 of the Companies Act 2013 and the Articles ofAssociation of your Company Mr. Anil Goyal Director shall retire by rotation at theensuing Annual General Meeting and being eligible offered himself for re-appointment. TheBoard of Directors recommends his re-appointment.
The information on the particulars of Director eligible for appointment in terms ofRegulation 36 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015has been provided in the notes to the notice convening the Annual General Meeting.
Mr. Rajesh Singh Chahar has resigned from the position of the Company Secretary witheffect from 31st January 2017. In pursuance to the provisions of Section 203read with Rule 8 of Companies (Appointment and Remuneration) Rules 2014 and otherapplicable provisions (including any modification or re-enactment thereof) if any of theCompanies Act 2013 the Board of Directors in the Board Meeting held on 29thMay 2017 has appointed Mrs. Radhika Khurana as the Company Secretary and ComplianceOfficer being designated as Key Managerial Personnel of the Company.
(ii) Independent Directors Declaration
Mr. Rajesh Jain Mrs. Asha Mehra and Mr. Luv Malhotra are Independent Directors on theBoard of the Company. The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprovided in sub-section (6) of Section 149 of the Companies Act 2013 and Regulations 16& 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
(iii) Number of meeting(s) of the Board
During the year under review there were Five (5) Board Meetings. The details of thenumber of meetings of the Board held during the fFinancial Year 2016-2017 forms part ofCorporate Governance Report. The intervening gap between the meetings was within theperiod prescribed under the Companies Act 2013.
(iv) Nomination and Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The said Policy is marked as "Annexure - III" which isannexed hereto and forms part of the Director's Report.
(v) Board Diversity
The Board of Directors on the recommendations of the Nomination and RemunerationCommittee has adopted a Policy on Diversity of Board of Directors in terms of Regulation19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
(vi) Board Evaluation
Pursuant to the provisions of the Companies Act 2013 and Regulation 17(10) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout an Annual performance evaluation of its own performance and of all the Directorsindividually as well as the evaluation of the working of Audit Nomination &Remuneration and other Compliance Committees. The manner in which the evaluation has beencarried out is explained in the Corporate Governance Report.
(vii) Remuneration of the Director / KMP and Particulars of Remuneration
The provisions of Rule 5(2) & 5(3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 are not applicable as there are no such employee whowere drawing / in receipt of remuneration of prescribed amount during the period underreview.
The information required pursuant to Section 197(12) of the Companies Act 2013 readwith Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 in respect of Directors / Key Managerial Personnel (KMP) and Employees of the Companyis furnished hereunder:
(a) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the Financial Year and
(b) The percentage increase in remuneration of each Director Chief Financial OfficerCompany Secretary or Manager if any in the financial year:
|SI. No. Name of the Director/KMP ||Designation ||Ratio of Remuneration of each Director /to median remuneration of employees ||% Increase in remuneration in the financial year 2016-17 |
|1. Mr. Lalit Bhasin ||Director (Non-executive) ||N.A. ||N.A. |
|2. Mr. Anil Goyal ||Director (Non-executive) ||N.A. ||N.A. |
|3. Mr. Jag Mohan Lal Suri ||Director (Non-executive) ||N.A. ||N.A. |
|4. Mr. Rajesh Jain ||Director (Non-executive) ||N.A. ||N.A. |
|5. Mrs. Asha Mehra ||Director (Non-executive) ||N.A. ||N.A. |
|6. Mr. Luv Malhotra ||Director (Non-executive) ||N.A. ||N.A. |
|7. Mr. Praveen Gupta ||Chief Financial Officer ||Nil |
|8. Mr. Rajesh Singh Chahar* ||Company Secretary and Compliance Officer ||Nil |
Note: No Director received any remuneration other than sitting fee during thefinancial year 2016-17
*Mr. Rajesh Singh Chahar resigned from the position of Company Secretary and ComplianceOfficer w.e.f. 31st January 2017.
(c) The percentage increase in the median remuneration of employees in the financialyear: Nil
(d) The number of permanent employees on the rolls of the Company:
17 (seventeen) employees on the Company rolls and 225 employees on the rolls of Vivantaby Taj Gurgaon (Hotel Unit of the Company) - operated by The Indian Hotels CompanyLimited as on 31st March 2017
(e) Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:
(f) The key parameters for any variable component of remuneration availed by thedirectors :
(g) It is hereby affirmed that the remuneration paid is as per the remuneration policyof the Company.
MANAGEMENT DISCUSSION & ANALYSIS REPORT
As required under Regulation 34(3) read with Schedule V of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Management Discussion& Analysis Report confirming compliance(s) forms an integral part of this report.
CORPORATE GOVERNANCE REPORT
A Separate report of the Board of Directors of the Company on Corporate Governance isincluded in the Annual Report and the Certificate from P. Bholusaria & Co. CharteredAccountants confirming compliance with the requirements of Corporate Governance asstipulated in Schedule V of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.
RELATED PARTY TRANSACTIONS
The Related Party Transactions that were entered during the financial year under reviewwere on arm's length basis and were in the ordinary course of business. There were nomaterially significant Related Party Transactions entered into by the Company during theyear under review. Accordingly the disclosure of Related Party Transactions as requiredunder Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable. Noneof the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
The Policy on Related Party Transactions as approved by the Board has been uploadedon the website of the Company www.hbestate.com having following web link www.hbestate.com/Investor centre/Corporate Governance.
PRESERVATION OF DOCUMENTS & ARCHIVAL POLICY
In terms of Regulation 9 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directors intheir meeting held on 14th February 2016 has adopted a Policy for Preservationof Documents & Archival thereof classifying them in two categories as follows:
(a) documents whose preservation shall be permanent in nature;
(b) documents with preservation period of not less than eight years after completion ofthe relevant transactions.
The said Policy is available on the website of the Company having following web link www.hbestate.com/Investor centre/Corporate Governance.
VIGIL MECHANISM - WHISTLE BLOWER POLICY
In terms of the provisions of Sec 177(9) & (10) of the Companies Act 2013 andpursuant to the provisions of Regulation 22 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a Vigil Mechanism for Stakeholders Employeesand Directors of the Company has been established. The Whistle Blower Policy duly approvedby the Board of Directors has been uploaded on the website of the Companywww.hbestate.com and the web link for the same is www.hbestate.com/Investorcentre/Corporate Governance.
DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Board of Directors has adopted the Risk Management Policy which sets out theframework for the management of risks faced by the Company in the conduct of its businessto ensure that all business risks are identified managed and monitored. The contents ofRisk Management Policy have been included in Management Discussion and Analysis formingpart of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars required under Section 134(3)(m) of the Companies Act 2013 read withRules 8 of the Companies (Accounts) Rules 2014 in respect of conservation of energy andtechnology absorption are not applicable to your Company.
During the year under review foreign exchange earnings were ' 2637.41 lakhs. Theforeign exchange outgo during the said period was ' 6.16 lakhs towards payment ofProfessional and Technical fees and ' 78.94 lakhs towards advertisement and otherexpenses.
DISCLOSURE AS PER THE SEXUAL PREVENTION OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has a policy on prohibition prevention and redressal of Sexual Harassmentof women at workplace and matters connected therewith incidental thereto covering all theaspects as contained under "The Sexual Harassment of Women at workspace and mattersconnected therewith or incidental thereto covering all aspects as contained under"The Sexual harassment of women at workplace (Prevention Prohibition and Redressal)Act 2013".
During the financial year 2016-17 no complaint was received under the policy. Thewomen employees were made aware about the provisions of the Sexual Harassment of women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and rules made there under andthe provision of Internal Complaint Policy of the Company.
CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING
The Board of Directors has adopted the Code of Conduct for regulating monitoring andreporting of trading by insiders and other connected persons in compliance withRegulation 9 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. The Code of Conduct lays down guidelines and procedures to be followed anddisclosures to be made while dealing with the Shares of the Company as well as theconsequences of violation. The Code of Conduct has been formulated for prevention ofInsider Trading and to maintain the highest standards of dealing in Company Securities.
INTERNAL CONTROL SYSTEMS
The Company has adequate internal control procedures commensurate with its size andnature of business. The objective of these procedures is to ensure efficient use andprotection of the Company's resources accuracy in financial reporting and due complianceof statutes and corporate policies and procedures. The adequacy of internal financialcontrol systems are reviewed by the Audit Committee of the Board in its periodicalmeetings.
INTERNAL FINANCIAL CONTROL SYSTEM
The Company has a comprehensive Internal Financial Control system commensurate with thesize and scale of its operations. The system ensures the reliability of financialreporting compliance with policies procedures laws and regulations safeguarding ofassets and economical and efficient use of resources.
The policies and procedures adopted by the company ensures the orderly and efficientconduct of its business and adherence to the company's policies prevention and detectionof frauds and errors and timely preparation of reliable financial information.
(i) Statutory Auditors
The term of M/s. P. Bholusaria & Co. Chartered Accountants New Delhi (FirmRegistration No.: 000468N) existing Statutory Auditors of the Company shall expire at theensuing Annual General Meeting as per the provisions of Section 139 of the Companies Act2013.
On the recommendations of the Audit Committee the Board of Directors in their meetingheld on 29th May 2017 considered and recommended for the appointment of M/sG.C. Agarwal & Associates Chartered Accountants (FRN: 017851N) as the new StatutoryAuditors of the Company for a term of five (5) consecutive years subject to the approvalof the Members to hold office from the conclusion of 23rd Annual GeneralMeeting until the conclusion of 28th Annual General Meeting of the Company. TheCompany has received a letter from them to the effect that their appointment if madewould be within the prescribed limits under Section 141(3)(g) of the Companies Act 2013and they are not disqualified for appointment.
M/s G.C. Agarwal & Associates Chartered Accountants Delhi (FRN 017851N) has beenassociated with the CA profession since last Thirty Three (33) years. The Firm is engagedin the Audit of Private and Public Limited Companies Societies and various otherentities. These audits include Statutory & Tax Audits Internal and Management andSystem Audits Stock Audits and other Special Assignments. The Firm is holding a PeerReview Certificate issued by The Institute of Chartered Accountants of India New Delhi.
Observations of the Statutory Auditors are explained wherever necessary by way ofNotes to the Financial Statements.
(ii) Internal Auditors
M/s. Marv & Associates LLP (Formely M.K. Choudhary & Co.) CharteredAccountants New Delhi are the Internal Auditors of the Company and the reports arereviewed by the Audit Committee periodically in its meetings.
(iii) Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. A.N. Kukreja of M/s. A. N. Kukreja & Co. to conduct the SecretarialAudit of the company for the financial year 2016-2017. The Report of the Secretarial Auditin Form MR-3 is annexed as "Annexure- I".
Observation(s) made by the Secretarial Auditor:
(a) The Company does not have a Managing Director or Chief Executive Officer or Managerand in their absence a Whole-time Director as required under Section 203 of theCompanies Act 2013.
Comment: The management is searching for a suitable candidate for the post of WholeTime Director/ Chief Executive Officer of the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board has constituted a Corporate Social Responsibility Committee pursuant toSection 135 of the Companies Act 2013. The Company has incurred average net loss forimmediately preceding three financial years hence the Company is not required to spendany amount towards CSR activities during financial year 2016-2017. The CSR Policy has beenuploaded on the website of the Company - www.hbestate.com Web link- www.hbestate.com/Investorcentre/Corporate Governance and is annexed as "Annexure - II" andforms part of the Director's Report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of Annual Return in Form MGT-9 as per Section92(3) of the Companies Act 2013 and Rule 12 of the companies (Management andAdministration) Rules 2014 is marked as "Annexure - IV" which isannexed hereto and forms part of the Director's Report.
Your Directors wish to thank and acknowledge the co-operation assistance and supportextended by the Company's associates Bankers. Your Directors also wish to thank all theemployees at all levels of the organization for the contribution and the trust andconfidence reposed by the shareholders in the management of the company.
| ||FOR AND ON BEHALF OF THE BOARD |
| ||HB ESTATE DEVELOPERS LIMITED |
| ||Sd/- |
| ||LALIT BHASIN |
|Place : Gurugram ||(Chairman) |
|Date : 29.05.2017 ||(DIN: 00002114) |