THE PHOENIX MILLS LIMITED
Your Directors are pleased to present their Report together with theAudited Financial Statements of the Company for the Financial Year ended March 31 2020("FY 2019-20"). The consolidated performance of the Company and its Subsidiariesand Associates has been referred to wherever required.
|Particulars || |
| || |
For the year ended March 31
For the year ended March 31
| ||2020 ||2019 ||2020 ||2019 |
|1 Revenue from Operations ||4444.27 ||4403.31 ||19411.37 ||19815.60 |
|2 Other Income ||424.83 ||626.06 ||585.00 ||851.34 |
|3 Total Revenue ||4869.10 ||5029.37 ||19996.37 ||20666.94 |
|4 Profit before Depreciation Interest & Finance Charges Exceptional Items and Tax ||3016.50 ||3312.43 ||10256.45 ||10782.74 |
|5 Less: Depreciation ||463.11 ||441.97 ||2076.21 ||2042.32 |
|6 Less: Interest & Finance Charges ||757.77 ||77749 ||3478.17 ||3505.79 |
|7 Profit Before Tax and Exceptional Items ||1795.62 ||2092.97 ||4702.07 ||5234.63 |
|8 Add / (Less): Exceptional Items ||(12.52) ||- ||7766 ||480.99 |
|9 Profit Before Tax ||1783.10 ||2092.97 ||4779.73 ||5715.62 |
|10 Less: Provision for Taxation: || || || || |
|11 Current Tax ||216.74 ||436.96 ||419.20 ||109706 |
|12 Deferred Tax (including MAT credit entitlement) ||90.75 ||(74.90) ||801.72 ||1.67 |
|13 Share of Profit / (loss) of associates / joint ventures (net) || || ||326.17 ||353.07 |
|14 Profit after Tax ||1475.61 ||1730.91 ||3884.98 ||4969.96 |
|15 Other comprehensive income/ (expenses) ||(18.31) ||339.05 ||(521.22) ||16755 |
|16 Total Comprehensive Income for the year ||145730 ||2069.96 ||3363.76 ||513751 |
OPERATING PERFORMANCE & KEY BUSINESS DEVELOPMENTS
The Company today is one of the largest retail-led real estate Companyin India. We have 9 operational retail assets with a leasable area of 6.94 Million squarefeet ('MSF') in Mumbai Bengaluru Chennai Pune Lucknow and Bareilly. Apart from retailwe have 1.31 MSF of rent generating office portfolio in Mumbai and Pune and two hotels -The St. Regis Mumbai and Courtyard by Marriott Agra.
With a portfolio comprising of over 19 MSF of Retail ResidentialCommercial and Hospitality assets spread over more than 100 acres of land the Company isbest positioned in the industry to serve the people of India one of the fastest growingeconomy in the world. Our mixed-used model of development gives us a 5-6 years head startin building top quality assets in the key gateway cities of India.
The Company is a proxy to the great Indian Consumption story. Ourconsumption has grown at a CAGR of 12% between FY 2013-14 and FY 2019-20 while rentalincome has shown a CAGR of 12% during the same period. During FY 2019-20 we clocked totalretail consumption of ' 69.3 billion across our retail properties with a total rentalincome of ' 10.2 billion.
We have a residential portfolio of approximately 4 MSF of which wehave completed approximately 3.01 million square in the cities of Bengaluru and Chennai.The yet to be launched area pertains to Towers 8-9 at One Bangalore West Bangalore whichthe Company intends to launch at an opportune time.
The St. Regis Mumbai continues its robust performance and has emergedas one of Mumbai's most preferred Hotels. Total Income for the year was ' 3088 millionan increase of 3% over the previous year. With a total of 395 rooms the hotel clocked anaverage occupancy of 78% with an ARR of ' 12241 showing strong growth in Room F&Band Banquet revenues. Courtyard by Marriott continues to perform well and did revenues of' 376 million with 65% occupancy and ARR of ' 4352. We were able to achieve this growthdespite the enforced nationwide lockdown. The occupancy had reached decade high in monthof Jan & Feb 2020 however due to several travel restrictions imposed from March2020 the occupancy was severely impacted.
During the year we completed the construction of our mall in Lucknow.Phoenix Palassio Lucknow was opened on July 8 2020. The land parcel acquired previouslyin Hebbal (Bengaluru) Ahmadabad (Thaltej) Wakad (Pune) and the acquisition of under-construction mall in Indore take our under-development retail portfolio to about 4.0 MSF.The rest of the portfolio will become operational part by part till FY 2022-24.
The rising aspirations and increase in per capita income of Indianpeople continues to inspire us. We remain optimistic about the retail market in thecountry and look forward to continue to create shopping dining & entertainmentdestinations in different cities to cater to the rising aspirations of urban consumers.
Management Discussion & Analysis (MDA) which forms a part of thisreport deals comprehensively with our current operations and projects in the pipeline. Italso deals with the current & future outlook of the Company.
During the year under review the Company has issued and allotted172639 equity shares having face value of ' 2/- each pursuant to exercise of EmployeeStock Options which have been listed on National Stock Exchange of India Limited ('NSE')and The BSE Limited ('BSE').
Consequently the paid up equity share capital of the Company as atMarch 31 2020 stood at ' 306924880 comprising of 153462440 equity shares having facevalue of ' 2/- each.
Dividend Distribution Policy
The Dividend Distribution Policy containing the requirements mentionedin Regulation 43A of the Listing Regulations is attached as Annexure I and forms part ofthis Annual Report and can also be accessed on the website of the Company athttps://www.thephoenixmills.com/investors.
During the financial year under review there were no amendments in theDividend Distribution Policy of the Company.
With a view to conserve financial resources in an environment ofheightened uncertainty caused by COVID-19 Pandemic the Board of Directors of the Companyhas not proposed any dividend for the year ended 31st March 2020. Your Company has notpaid any Interim Dividend during the financial year under review.
Transfer to Reserves
The Board of Directors has not recommended to transfer any amount toGeneral Reserves out of the amount available for appropriation and an amount of ' 970.33million is proposed to be carried forward to the Statement of Profit and Loss.
Consolidated Financial Statements
The Consolidated Financial Statements of the Company pursuant toSection 129(3) of the Companies Act 2013 and Regulation 34 of the Listing Regulations andprepared in accordance with the provisions of the Companies Act 2013 and the IndianAccounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)Rules 2015 and amendments thereof issued by the Ministry of Corporate Affairs in exerciseof the powers conferred by Section 133 of the Companies Act 2013 form part of this AnnualReport.
Further pursuant to the provisions of Section 136 of the Act thefinancial statements of the Company consolidated financial statements along with relevantdocuments and separate audited financial statements in respect of subsidiaries areavailable on the website of the Company and can be accessed athttps://www.thephoenixmills.com/ investors.
Investor Relations (IR')
Your Company continuously strives for excellence in its IR engagementwith International and Domestic investors. Structured conference calls and periodicinvestor/analyst interactions including one-on-one meetings participation in investorconferences quarterly earnings call analyst meetings and non-deal road shows (Domestic +International) is undertaken by the Company. Your Company interacted with around 251Indian and overseas investors and analysts during the year and participated in 13 domesticInvestor conferences and 3 international road shows during the year. Your Company alwaysbelieves in leading from the front with emerging best practices in IR and building arelationship of mutual understanding with investors/analysts. As on March 31 2020 theCompany was covered by analysts from 21 reputed domestic and international broking housesand continues to engage with other analysts to update them on the new developments of theCompany.
In continuation with this thought the Company proactively sharesinformation with investors/analysts and ensures that critical information about theCompany is available to all the investors by uploading all such information on theCompany's website and on the website of the Stock Exchanges where equity shares of theCompany are listed. The collaterals that are used by the Company include quarterly resultspresentation press release and investor calls. The company communicates on the quarterlyresults and key developments through social media posts. The management of your companyuses the communication medium of Business Channels to update Investors about keydevelopments when required. The Company also uploads print transcripts of investorconference-calls on the website of the Company which has a repository of all publishedinformation such as Annual reports press release presentations and other such statutorycommunications. In this way we endeavour to keep all stakeholders of the company updatedon company performance and new developments.
The Company has not accepted or renewed any amount falling within thepurview of provisions of Section 73 of the Companies Act 2013 read with the Companies(Acceptance of Deposits) Rules 2014 during the year under review.
Pursuant to the Ministry of Corporate Affairs notification datedJanuary 22 2019 amending the Companies (Acceptance of Deposits) Rules 2014 the Companyis required to file with the Registrar of Companies ('ROC') requisite returns in FormDPT-3 for outstanding receipt of money/loan by the Company which is not considered asdeposits. The Company shall comply with this requirement within the prescribed timelines.
The particulars of loans/advances etc. required to be disclosed inthe Annual Accounts of the Company pursuant to Para A of Schedule V of the ListingRegulations are furnished in Note 38 of the Notes to Accounts annexed to StandaloneFinancial Statements which forms part of this Annual Report.
Management Discussion and Analysis Report
Management's Discussion and Analysis Report for the year under reviewas stipulated under Regulation 34 of Listing Regulations is presented in a separatesection forming part of the Annual Report.
Performance of Subsidiary Companies Associates and Joint VentureCompanies
As on March 31 2020 the Company has 18 direct subsidiaries 11indirect subsidiaries and 2 Associate Companies. During the year under review theCompany's Board reviewed the affairs and performance of its subsidiaries on a quarterlybasis.
The Board has adopted a Policy for determining Material Subsidiaries inaccordance with the requirements of Regulation 16(1)(c) of the Listing Regulations. ThePolicy as approved by the Board is uploaded on the Company's website and can be accessedat https://www.thephoenixmills.com/investors. In terms of the criteria laid down in thePolicy and as per the definition of material subsidiary provided in Regulation 16(1)(c) ofthe Listing Regulations 5
subsidiaries have been identified as 'Material' based on the Company'sConsolidated Financial Statements for FY 2019-20.
The Material Subsidiaries of the Company as identified are (1) IslandStar Mall Developers Private Limited (2) Palladium Constructions Private Limited (3)Pallazzio Hotels & Leisure Limited (4) Vamona Developers Private Limited and; (5)Offbeat Developers Private Limited.
As on March 31 2020 the Company has 2 associate companies inaccordance with the provisions of Section 2(6) of the Companies Act 2013. Further inaccordance with the applicable Accounting Standards 3 more companies are classified asassociate companies for the purpose of consolidation of Financial Statements since thesecompanies are associate companies of subsidiaries of the Company.
A Report on the performance and financial position of each of thesubsidiary and associate companies included in the Company's Consolidated FinancialStatements and their contribution to the overall performance of the Company is providedin Form AOC-1 and forms part of this Annual Report.
Corporate Actions and Restructuring During FY 2019-20
The particulars of corporate actions and restructuring amongstsubsidiaries and associate companies during FY 2019-20 is as mentioned below:
Rentcierge Developers Private Limited was incorporated on August 52019 as a wholly-owned subsidiary of Offbeat Developers Private Limited.
Mindstone Mall Developers Private Limited ceased to be a wholly-ownedsubsidiary of the Company and became a direct wholly owned subsidiary of OffbeatDevelopers Private Limited and an indirect wholly owned subsidiary of the Company witheffect from February 26 2020.
Scheme of Amalgamation of Phoenix Hospitality Company Private Limiteda Subsidiary of the Company with the Company
The Board of Directors of your Company at their meeting held on August7 2019 considered and approved a scheme of amalgamation ('Scheme') pursuant to Sections230 to 232 and other relevant provisions of the Companies Act 2013 providing for themerger of its subsidiary company Phoenix Hospitality Company Private Limited ('PHCPL')with the Company and their respective shareholders. Subsequently your Company filedapplications dated August 30 2019 with the Stock Exchanges (along with the Scheme) forobtaining their no-objection/observation letters in accordance with Regulation 37 of theSEBI Listing Regulations. In response to the same the Stock Exchanges provided theirno-objection vide letters each dated November 4 2019. Thereafter your Company filed theScheme before the National Company Law Tribunal Mumbai Bench ("NCLT") onDecember 17 2019. The NCLT vide its order dated May 4 2020 admitted the Scheme anddirected that the Shareholders' meeting be held on July 17 2020 for the purpose ofapproving the Scheme. However due to constraints caused by Covid-19 Pandemic in holdingthe Members meeting the Company filed an application dated July 8 2020 with the NCLTseeking extension of time for holding the Shareholders' meeting.
As mentioned in the last Annual Report of your Company the proposedamalgamation will lead to a simplified corporate structure since it will result in thecombined businesses of PHCPL and the Company being carried on more economicallyefficiently and beneficially and the arrangement would be in the interest of both theCompanies and their shareholders as the businesses carried on by both the Companies areunder common management/ shareholders. The proposed amalgamation would strengthen theManagement of the Company effectively because of avoidance and elimination of unnecessaryduplication of time costs and expenses incurred for administration and operations ofboth the Companies separately and would result in better utilization of resources andassets and synergies of operations with integration of management and other expertise.
The Scheme is subject to necessary statutory regulatory andshareholders approvals including approval of the National Company Law Tribunal.
Internal Financial Controls
The Company has in place adequate internal financial controls withreference to the Financial Statements commensurate with the size scale and complexity ofits operations. Such controls have been assessed during the year. Based on the results ofsuch assessments carried out by the Management no reportable material weakness orsignificant deficiencies in the design or operation of internal financial controls wasobserved.
Pursuant to Rule 8(5)(viii) of the Companies (Accounts) Rules 2014and based on the representation received and after due enquiry your Directors confirmthat they have laid down internal financial controls with reference to the FinancialStatements and these controls are adequate. The Company has also adopted policies andprocedures for ensuring the orderly and efficient conduct of its business thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
Particulars of Contracts or Arrangements with Related Parties
The Company has formulated a policy on materiality of related partytransactions and manner of dealing with related party transactions which is available onthe Company's website at https://www.thephoenixmills.com/investors.
All related party transactions entered into during FY 2019-20 were onarm's length basis and in the ordinary course of business. The Audit Committee hasapproved all related party transactions for the FY 2019-20 and estimated transactions forFY 2020-21.
No material related party transactions were entered during thefinancial year by the Company. Accordingly the disclosure of related party transactionsas required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2 is notapplicable to the Company.
Details of transactions contracts and arrangements entered into withrelated parties by the Company during FY 2019-20 is given under Note 33 of the Notes toAccounts annexed to Standalone Financial Statements which forms part of this AnnualReport.
Transaction with person or entity belonging to the promoter/ promotergroup which hold(s) 10% or more shareholding in the Company if any have also beendisclosed in the accompanying financial statements.
Business Responsibility Report
Pursuant to Regulation 34(2)(f) of the Listing Regulations theBusiness Responsibility Report in the prescribed format forms part as a separate sectionof this Annual Report.
Your Company enjoys a strong credit rating which denotes a high degreeof safety regarding timely servicing of financial obligations. During the year underreview the Company took rating from two credit rating agencies for its Term Loan of '1150 Crores from:-
1. CRISIL Limited ('CRISIL') which assigned a long-term rating of"CRISIL A+/Credit Watch Negative" for ' 400 Crores and;
2. India Ratings and Research Private Limited ('India Ratings') whichreaffirmed the long-term rating of "IND A+/ Credit Watch Negative" for ' 750Crores
Both the said rating agencies have for evaluation purposes consideredthe total debt of the Company. The Company also enjoys the highest credit rating of"IND A1+" for Commercial Paper issuance of ' 100 Crores.
Subsequent to the year end the Board of Directors of your Company atits meeting held on June 29 2020 approved raising of funds not exceeding ' 1200 crorethrough Rights Issue Preferential Issue Qualified Institutions Placement ('QIP')Follow-on Public Offer etc. or through a combination thereof by issue of securities inone or more tranches
(equity shares preference shares debentures or any other convertibleinstruments or through combination of any of such securities) subject to requisiteshareholders'/regulatory/statutory approvals under applicable SEBI Regulations. Furtherthe Capital Raising Committee duly authorized by the Board at its meeting held on July 132020 accorded its approval to raise said amount of ' 1200 crore by way of PreferentialIssue and QIP Your Company proposes to utilize the proceeds of capital issue towardsfunding growth opportunities including investing in existing and proposed businessventures proposed acquisitions debt service obligations including but not limited toservicing debt interest obligations capital expenditure and working capital requirementsoperations and general corporate purposes and for such other purposes as may be permittedby applicable laws.
AUDITORS Statutory Auditors
Pursuant to the provisions of Section 139 of the Companies Act 2013and the Companies (Audit and Auditors) Rules 2014 M/s. DTS & Associates LLPChartered Accountants (Firm Registration No. 142412W) had been appointed as the StatutoryAuditors of the Company to hold office for a period of five years from the conclusion ofthe 112th AGM held on September 25 2017 till the conclusion of the Company's 117th AnnualGeneral Meeting subject to ratification at each AGM upto the 117th AGM. The requirementto place the matter relating to ratification of auditors' appointment by Members at everyAGM has been done away by the Companies (Amendment) Act 2017 with effect from May 7 2018as the first proviso to Section 139(1) of the Companies Act 2013 has been deleted.Accordingly no resolution is being proposed for ratification of appointment of StatutoryAuditors at the ensuing AGM.
M/s. DTS & Associates LLP has furnished a certificate of theireligibility and consent under section 139 and 141 of the Act and the Companies (Audit andAuditors) Rules 2014 for their continuance as the Auditors of the Company for the FY 2020- 21. In terms of the Listing Regulations the Auditors have confirmed that they hold avalid certificate issued by the Peer Review Board of the ICAI.
The Audit Committee reviews the independence and objectivity of theAuditors and the effectiveness of the Audit process. The Auditors attend the AGM of theCompany.
Report of Statutory Auditors'
The report of the Statutory Auditors' on the Financial Statements ofthe Company for FY 2019-20 is unmodified i.e. it does not contain any qualification(s)reservation(s) or adverse remark(s) and forms part of this Annual Report.
Pursuant to the provisions of Section 204 of Companies Act 2013 andthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard of Directors has appointed M/s. Rathi & Associates Practicing CompanySecretaries to undertake the Secretarial Audit of the Company.
The Secretarial Auditor has conducted an audit as per the applicableprovisions of the Companies Act 2013 and Regulation 24A of the Listing Regulations.
The Secretarial Audit Report given by the Secretarial Auditor in FormNo. MR-3 as per the provisions of Section 204 of the Companies Act 2013 read with Rulesframed thereunder for the financial year ended March 31 2020 has been annexed to thisBoard Report as Annexure II and forms part of the Annual Report.
Annual Secretarial Compliance Report
In compliance with the Regulation 24A of the Listing Regulations andthe SEBI circular CIR/CFD/CMD1/27/2019 dated February 8 2019 the Company has undertakenan audit for the Financial Year 2019-20 for all applicable compliances as per Securitiesand Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. TheAnnual Secretarial Compliance Report duly issued by M/s. Rathi & Associates has beensubmitted to the Stock Exchanges within the prescribed timelines and is annexed atAnnexure III to this Board's Report.
The report of Secretarial Auditor and Annual Secretarial ComplianceReport do not contain any qualification reservation or adverse remark or disclaimer ormodified opinion.
BOARD'S REPORT Internal Auditors
For FY 2019-20 the Board of Directors had on May 15 2019 appointedM/s. M.A. Parikh & Co Chartered Accountants as Internal Auditors of the Company.
However M/s. M.A. Parikh & Co. stepped down as Internal Auditorsof the Company effective from September 30 2019 and thereafter the Board of Directorsappointed M/s. Khandwala & Shah Chartered Accountants as Internal Auditors of theCompany for the remainder of FY 2019-20. The Internal Auditors have been periodicallyreporting to the Audit Committee with regards to their audit process and key auditfindings during the year.
Further the Board of Directors at their meeting held on June 29 2020have re-appointed M/s. Khandwala & Shah Chartered Accountants as its InternalAuditors to carry out the Internal Audit for FY 2020-21.
Cost records and cost audit
Maintenance of cost records and requirement of cost audit as prescribedunder the provisions of Section 148(1) of the Companies Act 2013 are not applicable forthe business activities carried out by the Company.
During the year under review Statutory Auditors and SecretarialAuditors have not reported any instances of frauds committed in the Company by itsOfficers or Employees as specified under Section 143(12) of the Companies Act 2013.
Particulars of Loans Guarantees Investments and Securities
Particulars of loans given investments made or guarantees orsecurities provided and the purpose for which the loan or guarantee or security isproposed to be utilised by the recipient of loan or guarantee or security pursuant toSection 186 of the Companies Act 2013 are given under Note 38 of the Notes to Accountsannexed to Standalone Financial Statements for the year ended March 31 2020 and the sameforms part of this Report.
Board Committees of the Board & Key Managerial Personnel
The members of the Company's Board of Directors are eminent persons ofproven competence and integrity. Besides experience strong financial acumen andleadership qualities they have a significant degree of commitment towards the Company anddevote adequate time to the meetings and preparation. In terms of requirement of ListingRegulations the Board has identified core skills expertise and competencies of theDirectors in the context of the Company's businesses for effective functioning which aredetailed in the Corporate Governance Report.
The Board of Directors comprises of 8 Directors out of which one-halfof the Board consists of Independent Directors. The composition of the Board complies withthe requirements prescribed in the Listing Regulations.
Particulars of changes to the Board
As per the requirement of Regulation 17 (1B) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations')effective from April 01 2022 the top 500 listed entities are required to ensure that theChairperson of the board of such listed entity shall be a Non-executive Director and notrelated to the Managing Director or the Chief Executive Officer of the Company.
In compliance with the above requirement and in consonance with thespirit of separating the role of the Chairman from the executive function Mr. Atul RuiaChairman and Managing Director of the Company (DIN: 00087396) had conveyed his decisionto the Board to step down from his executive responsibilities and retire from the officeof the Managing Director of the Company with effect from the close of business hours onDecember 10 2019.
The Board of Directors at their meeting held on December 11 2019acknowledged and placed on record that he has during his tenure as Managing Directorplayed a leading role in the Company's rise to its pre-eminent position includingcorporate strategy business development M&A etc. The Board expressed its immensegratitude to Mr. Atul Ruia for his valuable contribution throughout his tenure and alsofor the many achievements and the profitable and sustainable growth of the Company overthe past two decades.
The Nomination and Remuneration Committee after taking into account theneed for guidance and mentorship of the Company's executive Management especiallyconsidering the complexity of the Company's business recommended the continuation of Mr.Atul Ruia as the Non-Executive Chairman of the Company.
Consequently Mr. Atul Ruia on the recommendation of Nomination andRemuneration Committee was at the Board meeting held on December 11 2019 re-designatedas the Chairman and Non-Executive Director of the Company.
Further Mr. Shishir Shrivastava who was earlier the Joint ManagingDirector was elevated as the Managing Director and Key Managerial Person with effect fromDecember 11 2019.
During the year Mr. Rajendra Kalkar (DIN: 03269314) who was appointedas an Additional Director of the Company with effect from December 10 2018 in accordancewith Articles of Association and Section 161(1) of the Act was appointed and designatedas the Whole-time Director of the Company liable to retire by rotation for a period of 5years with effect from December 10 2018 by the Members at the previous AGM held onSeptember 24 2019.
The Nomination and Remuneration Committee on the basis of performanceevaluation of Independent Director and taking into account the external businessenvironment the business knowledge acumen experience and the substantial contributionmade by Ms. Shweta Vyas during her tenure has recommended to the Board that continuedassociation of Ms. Shweta Vyas as Independent Director of the Company would be beneficialto the Company. Based on the above and the performance evaluation of Independent Directorthe Board of Directors have appointed Ms. Shweta Vyas as an Additional and Non-ExecutiveIndependent Director not being liable to retire by rotation for a second term of 5 yearscommencing from October 14 2019 to October 13 2024 subject to the approval of themembers through Special Resolution at the ensuing AGM. The necessary resolutions forapproval of the appointment will form a part of the Notice of the ensuing AGM along withthe necessary disclosures required under the Companies Act 2013 and the ListingRegulations for approval of Members. The Company has received the requisite Notice from aMember in writing proposing her appointment as Independent Director.
The Board hereby recommends her appointment to the Members at theensuing AGM of the Company.
Apart from the above no other person was appointed or had ceased to bethe Director or key managerial person of the Company during FY 2019 - 20.
Directors liable to retirement by rotation
In terms of Section 152 of the Companies Act 2013 Mr. ShishirShrivastava retires by rotation and being eligible offers himself for re-appointment atthe ensuing AGM.
Brief particulars and expertise of directors seekingappointment/re-appointment together with their other directorships and committeememberships have been given in the annexure to the Notice of the AGM in accordance withthe requirements of the Listing Regulations and Secretarial Standards.
Declaration by Independent Directors
Pursuant to Section 149(7) of the Companies Act 2013 and Regulation25(8) of the Listing Regulations the Independent Directors have provided a declaration tothe Board of Directors that they meet the criteria of Independence as prescribed in theCompanies Act 2013 and the Listing Regulations and are not aware of any situation whichexists or may be reasonably anticipated that could impair or impact their ability todischarge duties as an Independent Director with an objective independent judgement andwithout any external influence. Further veracity of the above declarations has beenassessed by the Board in accordance with Regulation 25(9) of the Listing Regulations.
Further declaration on compliance with Rule 6(3) of the Companies(Appointment and Qualification of Directors) Rules 2014 as amended by Ministry ofCorporate Affairs ("MCA") Notification dated October 22 2019 regarding therequirement relating to enrollment in the Data Bank created by MCA for IndependentDirectors has been received from all the Independent Directors.
Based on the confirmation / disclosures received from the Directorsthe following Non-Executive Directors are Independent as on March 31 2020:
1. Mr. Amit Dabriwala
2. Mr. Amit Dalal
3. Mr. Sivaramakrishnan Iyer
4. Ms. Shweta Vyas
The terms and conditions of appointment of Independent Directors aredisclosed on the website of the Company at https://www.thephoenixmills.com/investors.
Number of Meetings of the Board of Directors
During FY 2019-20 the Board of Directors of the Company met 5 timesfor which due notices and notes to agenda were provided to the Directors in accordancewith the Secretarial Standard on Meetings of the Board. The agenda for the Board andCommittee meetings includes detailed notes on the items to be discussed to enable theDirectors to take an informed decision. Further the meetings have complied with therequirements of quorum as prescribed in the Companies Act 2013 and the ListingRegulations and the intervening gap between the meetings was within the period prescribedunder the Companies Act 2013 and the Listing Regulations.
Annual General Meeting
The 114th AGM of the Company was held on September 24 2019.
The details of the Board meetings and AGM are mentioned in theCorporate Governance Report which forms a part of this Report.
Separate Meeting of Independent Directors
As stipulated in the Code of Conduct for Independent Directors underthe Companies Act 2013 and the Listing Regulations a separate Meeting of the IndependentDirectors of the Company was held on February 10 2020 to review the performance ofNon-Independent Directors (including the Chairman) and the Board as a whole. TheIndependent Directors also assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Boards which is necessary toeffectively and reasonably perform and discharge their duties.
Committees of the Board
The Board of Directors have constituted the following Committees of theBoard in accordance with the requirements of the Companies Act 2013 Listing Regulationsand SEBI (Share Based Employee Benefits) Regulations 2014:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility ('CSR') Committee
5. Risk Management Committee
6. Compensation Committee
7 Finance and Investment Committee
The details pertaining to constitution composition key terms ofreference number of meetings held during FY 201920 etc. are mentioned in the CorporateGovernance Report which is a part of this Report.
The Company has in place an Audit Committee in terms of therequirements of the Companies Act 2013 read with the rules made thereunder and Regulation18 of the Listing Regulations. The Audit Committee comprises of Mr. Amit Dabriwala as theChairman of the Committee and Mr. Atul Ruia and Ms. Shweta Vyas as members of theCommittee. The composition scope and terms of reference of the Audit Committee aredetailed in the Corporate Governance Report appended hereto.
Performance Evaluation of the Board its Committees Directors andChairman
In terms of provisions of Section 134(3)(p) of the Companies Act 2013and pursuant to Regulation 17(10) of the Listing Regulations the Board on therecommendation of NRC has formulated an Annual Evaluation Policy ('Evaluation Policy')which specifies the criteria for evaluation of Independent Directors and the Board ofDirectors.
The Board has carried out an annual evaluation of its own performanceand that of its Committees as well as reviewed the performance of the Directorsindividually. During FY 2018-19 the questionnaire for performance evaluation was furtherelaborated and made comprehensive in alignment with the Guidance Note on Board Evaluationissued by the Securities and Exchange Board of India vide its circular dated January 52017 Feedback was sought by way of a structured questionnaire covering various aspects ofthe Board's functioning such as adequacy of the composition of the Board and itsCommittees Board culture execution and performance of specific duties obligations andgovernance and the evaluation was carried out based on responses received from theDirectors.
In a separate meeting the performance evaluation of theNon-Independent Directors and the Board as a whole was carried out by the IndependentDirectors. The performance evaluation of the Chairman of the Company was also carried outby the Independent Directors taking into account the views of the other Non-ExecutiveDirectors.
The outcome of the performance evaluation of the Board for the yearunder review was discussed by the Nomination & Remuneration Committee and the Board attheir respective meetings. All Directors expressed satisfaction with the evaluationprocess.
Familiarization Program for Independent Directors
Upon appointment of an Independent Director the appointee is given aformal Letter of Appointment which inter alia explains the role function duties andresponsibilities expected as a Director of the Company. The Director is also explained indetail the compliance required from him under Companies Act 2013 and the ListingRegulations. Further on an ongoing basis as a part of Agenda of Board / CommitteeMeetings presentations are regularly made to the Independent Directors on various mattersinter-alia covering the business strategies management structure management developmentquarterly and annual results budgets review of Internal Audit risk managementframework operations of subsidiaries and associates. The details of the familiarisationprogramme for Directors are available on the Company's website and can be accessed athttps://www.thephoenixmills.com/investors.
The Company recognizes and embraces the importance of a diverse boardin its success. The Company believes that a truly diverse board will leverage differencesin thought perspective knowledge skill regional and industry experience ageethnicity race and gender which will help the Company to retain its competitiveadvantage. The Board has adopted the Board Diversity Policy which sets out the approach todiversity of the Board of Directors.
Key Managerial Personnel
Pursuant to Section 203 of the Companies Act 2013 read with Rule 8 ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board ofDirectors have appointed the requisite Key Managerial Personnel.
Changes to the Key Managerial Personnel during FY 2019-20 are asmentioned below:
- Mr. Atul Ruia retired as Managing Director of the Company with effectfrom December 10 2019 and was re-designated as Chairman and Non-Executive Director witheffect from December 11 2019;
- Mr. Shishir Shrivastava re-designated as Managing Director and KeyManagerial Person with effect from December 11 2019;
Employee Stock Option Scheme (ESOP')
The Board of Directors have constituted an Employee Stock Option Scheme("ESOP") as a way of rewarding its high performing employees. The Company hadgranted stock options to eligible employees under The Phoenix Mills Employees Stock OptionPlan ('PML ESOP PLAN 2007'). The PML ESOP PLAN 2007 had expired on January 30 2018.Subsequently the Company had formulated "The Phoenix Mills Limited Employee StockOption Plan 2018"
(PML ESOP PLAN 2018) in accordance with Securities and Exchange Boardof India (Share Based Employee Benefits) Regulations 2014 which was approved by theshareholders on May 11 2018. As on date of this Report the Company has not made anygrant under the PML ESOP PLAN 2018.
There are no material changes made to the above Schemes and theseSchemes are in compliance with the SEBI (Share Based Employee Benefits) Regulations 2014('SBEB Regulations'). The Statutory Auditors' of the Company M/s DTS & AssociatesLLP have certified that the Company's above-mentioned Schemes have been implemented inaccordance with the SBEB Regulations and the Resolutions passed by the Members for theSchemes.
Details pertaining to equity shares issued under The PML ESOP PLAN 2007during FY2019-20 as required under SBEB Regulations and as per the provisions of Section62(1)(b) of the Companies Act 2013 read with Rule 12(9) of the Companies (Share Capitaland Debentures) Rules 2014 and other applicable Regulations is annexed as Annexure IV tothis report.
The information as required to be disclosed under Clause 14 of the SBEBRegulations read with SEBI Circular CIR/ CFD/POLICY CELL/2/2015 dated June 16 2015 hasbeen uploaded on the website of the Company and can be accessed athttps://www.thephoenixmills.com/investors.
Particulars of Employees and related disclosures
Disclosure with respect to the percentage increase in remunerationratio of remuneration of each director and key managerial personnel (KMP) to the median ofemployees' remuneration as required under Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are given in Annexure V to this Report.
The details of employee remuneration as required under provisions ofSection 197(12) of the Companies Act 2013 read with Rule 5(2) & 5(3) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are available at theRegistered Office of the Company during working hours 21 days before the Annual GeneralMeeting and shall be made available to any Shareholder on request. Such details are alsoavailable on the Company's website and can be accessed athttps://www.thephoenixmills.com/investors.
Remuneration Policy and criteria for determining attributesqualification independence and appointment of Directors
The NRC has formulated a policy on Directors' appointment andremuneration including recommendation of remuneration of the key managerial personnel andother employees ('Nomination and Remuneration Policy'). The said policy inter aliaincludes criteria for determining qualifications positive attributes and independence ofDirectors.
Nomination and Remuneration Policy is provided as Annexure VI formingpart of this Board Report and can be accessed athttps://www.thephoenixmills.com/investors.
Directors' Responsibility Statement
In terms of Section 134(5) of the Companies Act 2013 in relation tothe audited financial statements of the Company for the year ended March 31 2020 yourDirectors hereby confirm that:
a. In the preparation of the annual accounts for the Financial Yearended March 31 2020 the applicable accounting standards have been followed and nomaterial departures have been made from the same;
b. They had in consultation with Statutory Auditors selectedaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31 2020 and of the profit of the Company for the year ended onthat date;
c. They have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andirregularities;
d. They have prepared the annual accounts on a going concern basis;
e. They have laid down adequate Internal Financial Controls to befollowed by the Company and such Internal Financial Controls were operating effectivelyduring the financial year ended March 31 2020;
f. They had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively throughout the financial year ended March 31 2020.
The Company is committed to uphold the highest standards of CorporateGovernance and adheres to the requirements set out by the Companies Act 2013 and theListing Regulations. A detailed Report on Corporate Governance in terms of Schedule V ofthe Listing Regulations is presented separately and forms part of the Annual Report.
Further a Certificate from M/s. Rathi & Associates PracticingCompany Secretaries confirming compliance of conditions of Corporate Governance asstipulated under Regulation 34(3) read with Para E of Schedule V of the ListingRegulations is appended as Annexure VII to this Report.
Code of Conduct
The Board of Directors have approved a Code of Conduct which isapplicable to the Members of the Board and all employees in the course of day to daybusiness operations of the Company. The Company believes in "Zero Tolerance"against bribery corruption and unethical dealings/behaviours of any form. The Code hasbeen posted on the Company's website. The Code lays down the standard procedure ofbusiness conduct which is expected to be followed by the Directors and the employees intheir business dealings and in particular on matters relating to integrity at the workplace in business practices and in dealing with stakeholders. All the Board members andthe Senior Management personnel have confirmed compliance with the Code.
As per the provisions of Section 177(9) of the Companies Act 2013 theCompany is required to establish an effective Vigil Mechanism for directors and employeesto report genuine concerns. The Company has a Whistle-blower Policy to encourage andfacilitate employees to report concerns about unethical behaviour actual/ suspectedfrauds and violation of Company's Code of Conduct. The policy also provides for adequatesafeguards against victimisation of persons who avail the same and provides for directaccess to the Chairperson of the Audit Committee.
The Whistle Blower Policy also enables the employees to report concernsrelating to leak or suspected leak of Unpublished Price Sensitive Information. The AuditCommittee of the Company oversees the implementation of the Whistle-Blower Policy. TheWhistle Blower Policy can be accessed at the Company's website athttps://www.thephoenixmills.com/investors.
Prevention of Sexual Harassment of Women at Workplace
The Company has adopted a policy on prevention prohibition andredressal of sexual harassment at workplace and has also established an InternalComplaints Committee as stipulated by The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and rules thereunder.
The Company has complied with provisions relating to the constitutionof Internal Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
During the year under review no complaints in relation to sexualharassment at workplace have been reported.
Awareness workshops and training programs are conducted across theCompany to sensitize employees to uphold the dignity of their colleagues at workplaceespecially with respect to prevention of sexual harassment.
Risk Management Policy
The Board of Directors of the Company has framed a Risk ManagementPolicy and Guidelines to avoid events situations or circumstances which may lead tonegative consequences on the Company's businesses and defined a structured approach tomanage uncertainty and to make use of these in their decision-making pertaining to
all business divisions and corporate functions. Key business risks andtheir mitigation are considered in periodic management reviews.
Further pursuant to Regulation 21 of the amended Listing Regulationsthe Board of Directors have also constituted the Risk Management Committee of the Boarddetails of which are mentioned in the Corporate Governance Report. The composition of theCommittee is in conformity with the Listing Regulations with all members being Directorsof the Company. The Risk Management Committee is inter alia authorized to monitor andreview the risk assessment mitigation and risk management plans for the Company from timeto time and report the existence adequacy and effectiveness of the above process to theBoard on a periodic basis.
The details of composition of the Risk Management Committee and itsterms of reference is provided in the section titled 'Report on Corporate Governance'which forms part of this Annual Report.
Corporate Social Responsibility
In terms of Section 135 of the Companies Act 2013 read with theCompanies (Corporate Social Responsibility Policy) Rules 2014 the Board of Directorshave constituted a Corporate Social Responsibility ('CSR') Committee which comprises ofMr. Atul Ruia as the Chairman of the Committee and Mr. Pradumna Kanodia and Ms. ShwetaVyas as members of the Committee. The role of the Committee includes formulation andrecommending to the Board a CSR Policy which shall indicate the activities to beundertaken by the Company as specified in Schedule VII of the Companies Act 2013 and anyamendments thereto recommendation of the amount of expenditure to be incurred on the CSRactivities as enumerated in Schedule VII of the Companies Act 2013 and referred to in theCSR Policy of the Company as also to monitor the CSR Policy from time to time
The Board of Directors of the Company has also approved and adopted aCSR Policy based on the recommendation of the CSR Committee which is being implemented bythe Company. The CSR Policy of the Company is available on the Company's website and canbe accessed at https://www.thephoenixmills.com/investors.
Annual Report on CSR
The Annual Report on Corporate Social Responsibility activities for theFY 2019-20 in accordance with Section 135 of the Companies Act 2013 and the Companies(Corporate Social Responsibility Policy) Rules 2014 giving details of the composition ofthe CSR Committee CSR Policy and projects undertaken by the Company during financial year2019-20 is annexed in Annexure VIII of this report.
Conservation of Energy Technology Absorption and Foreign ExchangeEarnings & Outgo
In view of the nature of activities which are being carried on by theCompany the particulars as prescribed under Section 134(3) (m) of the Companies Act 2013read with Rule 8(3)(A) and 8(3)(B) of Companies (Accounts) Rules 2014 regardingConservation of Energy and Technology Absorption are not applicable to the Company.
However the Company has taken appropriate measures to cut down wastageof energy materials and consumption in all phases of its operations. The installation ofa Sewage Treatment Plant (STP) has decreased water requirements at the sites while theusage of LED lights has reduced energy consumption. Domestic waste water generated at ourmalls and commercial complexes is 100% recycled through Sewage Treatment Plants. Used oilis the only hazardous waste being generated in our business of development and managementof malls and commercial complexes. This is being sold to recyclers authorized by theCentral Pollution Control Board (CPCB) whereas the non-hazardous waste is sold torecyclers.
The details of Foreign Exchange earnings and outgo are as mentionedbelow:
Total Foreign Exchange Earnings - ' 828534/- Total Foreign ExchangeOutgo - ' 21159242/-
Extract of Annual Return
Pursuant to Sections 134(3)(a) and 92(3) of the Companies Act 2013 andRule 12(1) of the Companies (Management and Administration) Rules 2014 an extract of theAnnual Return as on March 31 2020 in form MGT-9 is annexed as Annexure IX and forms partof this report. The Annual Return of the Company will also be available on its website athttps://www.thephoenixmills.com/investors.
Compliance with Secretarial Standards
The applicable Secretarial Standards i.e. SS-1 and SS-2 relating to'Meetings of the Board of Directors' and 'General Meetings' respectively have been dulycomplied by the Company
Disclosure of Orders Passed by Regulators or Courts or Tribunal
During FY 2019-20 no orders have been passed by any Regulator or Courtor Tribunal which could have an impact on the Company's going concern status and theCompany's operations in future.
Material Changes and Commitments affecting Financial Position betweenthe End of The Financial Year and Date of The Report
Except as disclosed elsewhere in this Report no material changes andcommitments which could affect the Company's financial position have occurred between theend of the Financial Year of the Company and date of this Report.
Statements in this Report particularly those which relate toManagement Discussion & Analysis describing the Company's objectives estimates andexpectations may constitute "forward looking statements" within the meaning ofthe applicable laws and regulations. Actual results might differ materially from thoseexpressed or implied in the statements depending on the circumstances.
In compliance with provisions of Section 108 of the Companies Act2013 read with the Companies (Management and Administration) Rules 2014 and GeneralCircular Nos.14/2020 17/2020 and 20/2020 dated 8th April 2020 13th April 2020 and 5thMay 2020 respectively issued by the Ministry of Corporate Affairs ("MCACirculars") read with Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12 2020issued by the Securities and Exchange Board of India your Company is registered with LinkIntime India Private Limited for providing E-Voting services to set up an electronicplatform to facilitate shareholders to cast votes through remote e-voting and also throughe-voting system at the ensuing Annual General Meeting (scheduled to be held through VideoConferencing/ Other Audio Visual Means) on the business to be transacted at the said AGM.Detailed procedure is provided in the Notice convening the Annual General Meeting sent tothe Shareholders.
Your Directors state that no disclosures or reporting(s) are requiredin respect of the following items as there were no transactions/events related to theseitems during the year under review:
i. Change in nature of business of the Company
ii. Issue of equity shares with differential rights as to dividendvoting or otherwise
iii. Issue of sweat equity shares to employees of the Company under anyscheme
iv. Voting rights not exercised directly by the employees and for thepurchase of which or subscription to which loan was given by the Company
The Board of Directors place on record their appreciation of theassistance guidance and support extended by all the Regulatory authorities includingSEBI Stock Exchanges Ministry of Corporate Affairs Registrar of Companies Reserve Bankof India the Depositories Bankers and Financial Institutions the Government at theCentre and States
as well as their respective Departments and Development Authorities inIndia and abroad connected with the business of the Company for their co-operation andcontinued support. The Company expresses its gratitude to the Customers for their trustand confidence in the Company
The Directors regret the loss of life due to COVID-19 pandemic and aredeeply grateful and have immense respect for every person who risked their life and safetyto fight this pandemic. The Directors pray to God that we all emerge out of the currentsituation stronger and with good health.
In addition your Directors also place on record their sincereappreciation of the commitment and hard work put in by the Registrar & Share TransferAgents all the suppliers subcontractors consultants clients and employees of theCompany.
| || ||On behalf of the Board of Directors |
| || ||For The Phoenix Mills Limited |
| || ||Atul Ruia |
|Date ||: July 29 2020 ||Chairman |
|Place ||: Mumbai ||DIN: 00087396 |