Sunteck Realty Limited
Your Directors have the pleasure in presenting the 34th Annual Report of the Company onthe business and operations of the Company together with the Audited Statement of Accountsfor the year ended 31st March 2017.
The Company's performance during the financial year ended 31st March 2017 as comparedto the previous financial year is summarised below:
| || || || |
(Rs. In Lacs except as stated)
| ||Standalone ||Consolidated |
|Particulars ||For the year ended on 31.03.2017 ||For the year ended on 31.03.2016 ||For the year ended on 31.03.2017 ||For the year ended on 31.03.2016 |
|Revenue from Operations ||19724.14 ||8697.52 ||95219.65 ||24336.86 |
|Other Income ||1843.72 ||408.47 ||816.38 ||1788.23 |
|Total Income ||21567.86 ||9105.98 ||96036.03 ||26125.08 |
|Total Expenditure ||5612.60 ||9353.63 ||65191.99 ||23855.26 |
|Earnings before Interest Tax ||17420.8 ||432.49 ||35623.45 ||4180.17 |
|Depreciation & Amortization || || || || |
|Expense || || || || |
|Finance Cost ||1371.85 ||582.02 ||4552.41 ||1687.75 |
|Depreciation & Amortization ||93.69 ||98.12 ||227.01 ||222.59 |
|Expense || || || || |
|Profit Before Tax ||15955.26 ||(247.65) ||30334.28 ||2100.41 |
|Current Tax ||35.91 ||222.44 ||8671.43 ||8148.20 |
|Taxation of Earlier Years ||0.25 ||(9.32) ||5.23 ||1.61 |
|Deferred Tax ||83.63 ||(747.15) ||81.20 ||(8781.69) |
|Profit After Tax ||15835.46 ||286.38 ||21614.02 ||2732.28 |
|Basic & Diluted EPS ||25.15 ||0.45 ||34.01 ||3.83 |
During the year under review the consolidated revenue for the current year amounted toRs. 96036.03/- Lacs against Rs. 26125.08/- Lacs compared to the previous year. The profitbefore tax on consolidated basis stands at Rs.30334.28/- Lacs as compared to Rs. 2100.41/-Lacs during the previous year.
The total revenue earned is Rs. 21567.86/- Lacs compared to previous year's revenue ofRs. 9105.98/- Lacs on standalone basis. The profit before tax on standalone basis standsat Rs. 15955.26/- Lacs as compared to a loss of Rs. 247.65/- Lacs during the previousyear.
The Ministry of Corporate Affairs (MCA) vide its notification in the Official Gazettedated February 16 2015 notified the Indian Accounting Standards (Ind AS) applicable tocertain classes of companies. Ind AS has replaced the existing Indian GAAP prescribedunder Section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts)Rules 2014. Ind AS is applicable to your Company from April 1 2016 with a transitiondate of April 1 2015 and IGAAP as the previous GAAP. The financial statements for theyear ended as on 31st March 2017 are the first that the Company has prepared inaccordance with Indian Accounting Standards as prescribed under Section 133 of theCompanies Act 2013 read with rule 3 of the Companies (Indian Accounting Standards)Amendment Rules 2016.
NATURE OF BUSINESS
The Company is engaged in the activities of developing residential and commercialprojects. During the year under review there was no change in the nature of business ofthe Company.
Your Directors are pleased to recommend a dividend of 150 % i.e. Rs. 1.5/- per Equityshare on 125985470 Equity Shares of face value Re. 1.00/- each out of the profits ofthe Company for the financial year 2016-17 subject to approval of shareholders at theensuing Annual General Meeting. Total outflow on account of dividend shall amount to Rs.188978205/- (Rupees Eighteen Crores Eighty Nine Lakhs Seventy Eight Thousand TwoHundred and Five Rupees Only) excluding dividend distribution tax.
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to reserves out of the profitsearned during financial year 2016-17.
Your Company allotted 26528 Equity Shares of Rs. 2/- per share to option grantees onApril 21 2017 who had exercised their options during the financial year 2016-2017 underthe Company's Employee Stock Option Scheme 2013 (ESOP 2013). The said shares shall rankpari-passu the existing shares of the Company in all respects.
The Equity Share capital of the Company stands increased to 62992735 Equity Sharesof Rs. 2/- each aggregating to Rs. 125985470/-. The Company has not issued shares withdifferential voting rights and sweat equity shares.
REDEMPTION OF NON-CONVERTIBLE DEBENTURES DURING THE YEAR
The Company has made timely interest and redemption amount payment to theDebentureholders of 2000 11.75% Secured Redeemable Non-Convertible Debentures Series A("NCD-A") of Rs. 100000/- each. The balance 3500 11.75% Secured RedeemableNon-Convertible Debentures is shown in its books as per the details provided below:
|Sr. No. ||Particulars ||Quantity ||ISIN |
|1 ||11.75 % Secured Redeemable Non-Convertible Debentures Series B ||500 ||INE805D07023 |
|2 ||11.75 % Secured Redeemable Non-Convertible Debentures Series C ||1000 ||INE805D07031 |
|3 ||11.75 % Secured Redeemable Non-Convertible Debentures Series D ||2000 ||INE805D07049 |
| ||TOTAL ||3500 || |
In terms of Sections 73 and 74 of the Companies Act 2013 read with the Companies(Acceptance of Deposit) Rules 2014 during the year financial year 2016-17 your Companyhas not accepted any deposits from public and as such no amount on account of principalor interest on public deposits was outstanding as on the date of the Balance Sheet.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
The Company has 17 subsidiaries including step down subsidiaries 3 LLPs where Companyexercises significant control and 4 Associates/Joint Ventures of which 1 Company is JointVenture entity in UAE.
The names of companies that have become or ceased to be subsidiaries Associates/JointVentures and the performance and financial position of each of the subsidiariesassociates and joint venture companies for the year ended March 31 2017 is attached tothe financial statements hereto in Form AOC 1.
As per Section 129(3) of the Companies Act 2013 the Company has prepared consolidatedfinancial statements of the Company and its subsidiaries its Associates and Joint Venturein accordance with applicable accounting standards issued by the Institute of CharteredAccountants of India forms part of this Annual Report. The performance and financialposition of each of the subsidiaries associates and joint venture companies for the yearended March 31 2017 is attached to the financial statements hereto in Form AOC 1.
In terms of Section 136 of the Companies Act 2013 (the Act') Financialstatements of the subsidiary companies are not required to be sent to the members of theCompany. The Company will provide a copy of separate annual accounts in respect of each ofits subsidiary to any shareholder of the Company if so desired and said annual accountswill also be kept open for inspection at the Registered Office of the Company.
The Company has formulated a policy for determining material' subsidiaries andsuch policy is disclosed on Company's website.
MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
In Compliance with provisions of Section 152 of the Companies Act 2013 Mr. AtulPoopal (DIN: 07295878) Director of the Company retires by rotation at the ensuing AnnualGeneral Meeting and being eligible offers himself for re-appointment. Appropriateresolution for his re-appointment is being placed for approval of the members at theensuing AGM.
Mr. Mahesh Sheregar (DIN: 02493456) was appointed as an Additional Director of theCompany and ceased to be the Director from 33rd Annual General Meeting of theCompany.
Mr. Sanjay Dutt (DIN: 05251670) Director of the Company was not proposed to bere-appointed for another term as an Independent Director of the Company who expressedunwillingness for being re-appointed due to relocation and other personal obligations.
The Board has received declarations from the Independent Directors as per therequirement of Section 149(7) of the Companies Act 2013 and the Board is satisfied thatthe Independent Directors meet the criteria of independence as mentioned in Section 149(6)of the Companies Act 2013.
DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES
The Board of Directors met 5 times during the financial year ended March 31 2017 inaccordance with the provisions of the Companies Act 2013 and rules made thereunder. TheDirectors actively participated in the meetings and contributed valuable inputs on thematters brought before the Board of Directors from time to time.
Additionally during the financial year ended March 31 2017 the Independent Directorsheld a separate meeting in compliance with the requirements of Schedule IV of theCompanies Act 2013 and Regulation 25(3) of the Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafter referredto as "Listing Regulations"). For further details of the meetings of the Boardplease refer to the Corporate Governance Report which forms part of this Annual Report.
Director's Responsibility Statement
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended March 31 2017 the Board ofDirectors hereby confirms that:
a. in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company as on March 31 2017 and of theprofits of the Company for the year ended on that date;
c. proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
Committees of the Board
a) Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordance with theprovisions of subsection (3) of Section 178 of the Companies Act 2013. Kindly refer tothe section on Corporate Governance under the head Nomination and RemunerationCommittee' for matters relating to constitution meetings functions of the Committee andthe remuneration policy formulated by this Committee.
b) Audit Committee
An Audit Committee is in existence in accordance with the provisions of Section 177 ofthe Companies Act 2013. Kindly refer to the section on Corporate Governance under thehead Audit Committee' for matters relating to constitution meetings and functionsof the Committee.
c) Corporate Social Responsibility Committee
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Companyand the initiatives undertaken by the Company during the year are set out in Annexure I ofthis report as per the format prescribed in Companies (Corporate Social ResponsibilityPolicy) Rules 2014.
The CSR Policy may be accessed on the Company's website at the linkhttp://www.sunteckindia.com/codes-policies.aspx.
The Company has undertaken projects in the areas of Health Education and EnvironmentSustainability as part of its initiatives under Corporate Social Responsibility (CSR).These projects are largely in accordance with Schedule VII of the Companies Act 2013.
d) Other Board Committees
For details of other Board committees' viz. Stakeholders Relationship Committee andothers kindly refer to the section Committees of the Board of Directors' whichforms part of the Corporate Governance Report.
Vigil Mechanism for the Directors and Employees
In compliance with provisions of section 177(9) and (10) of the Companies Act 2013read with Regulation 22 of the Listing Regulations your Company has adopted whistleblower policy for Directors and employees to report genuine concerns to the management ofthe Company. The whistle blower policy of the Company is posted on the website of theCompany and may be accessed at http://www.sunteckindia.com/codes-policies.aspx.
The Company's management systems organisational structures processes standards codeof conduct and behaviors together form the system that governs how the Group conducts thebusiness of the Company and manages associated risks.
The approach is based on identification evaluation and mitigation of operationalstrategic and environmental risks disciplined risk monitoring and measurement andcontinuous risk assessment and mitigation measures.
Annual Evaluation of Directors Committee and Board
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard is required to monitor and review the Board evaluation framework. The Evaluationprocess provides the manner in which the performance of Directors as a collective body inthe form of Board Committees and the Board functions and performs. The overall performanceof the Board was satisfactory.
Particulars of Remuneration
The information as required under the provisions of Section 197(12) of the CompaniesAct 2013 and Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are set out in Annexure V attached hereto.
During the financial year 2016-17 there were 3 persons employed for a part of thefinancial year who were in receipt of remuneration of not less than Rs. 8.50 lacs p.m. Ason 31st March 2017 there were total 206 permanent employees.
However in accordance with the provisions contained in the proviso to Section 136(1)of the Companies Act 2013 the particulars relating to other employees of the Company arenot being sent as a part of this Annual Report. The same is available for inspection byany Member at the registered office of the Company during working hours on working days ofthe Company up to the ensuing Annual General Meeting. Any Member interested in obtaining acopy of the same may write to the Company Secretary at the registered office of theCompany.
DISCLOSURE RELATING TO EMPLOYEE STOCK OPTION SCHEME
In compliance with the provisions of Rule 12(9) of the Companies (Share Capital andDebenture) Rules 2014 and SEBI (Share Based Employee Benefits) Regulations 2014 thedetails of Employees Stock Option Scheme as on March 31 2017 is furnished in Annexure IIattached herewith and forms part of this Report.
PARTICULARS OF LOANS ADVANCES GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Companies Act 2013 and Schedule V of the ListingRegulations details of Loans to subsidiaries are given at note no. 35 in the financialstatements. No Loans /guarantees have been provided to Related Parties other thanSubsidiaries Joint Ventures LLPs or Associate Companies referred to in note no. 35.Loans to other body corporate given by the Company are in the ordinary course of businessand on arms length basis.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All the transactions/contracts/arrangements of the nature as specified in Section188(1) of the Companies Act 2013 entered by the Company during the year under review withrelated party (ies) are in the ordinary course of business and on arms Length basis. Thereare no material significant related party transactions made by the Company with PromotersDirectors or Key Managerial Personnel which may have a potential conflict with theinterest of the Company at large and consequently no particulars in form AOC-2 have beenfurnished.
The Policy on related party transactions and procedures dealing with related partytransactions as approved by the Board may be accessed on the Company's website athttp://www.sunteckindia.com/codes-policies.aspx.
Disclosure on related party transactions is provided in notes to financial statementsas note no. 35.
DISCLOSURES UNDER SECTION 134(3) (L) OF THE COMPANIES ACT 2013
Except as disclosed elsewhere in this report no material changes and commitments whichcould affect the Company's financial position have occurred between the end of thefinancial year of the Company and the date of this report.
INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Controls in place with reference tofinancial statements and is operating effectively. These are continually reviewed by theCompany to strengthen the same wherever required. In compliance with the provisions ofsection 138 of the Companies Act 2013 read with Rule 13 of Companies (Accounts) Rules2014 the internal control systems are supplemented by Internal Audit carried out byindependent firm of Chartered Accountants M/s. Pricewaterhouse Coopers Private Limitedfor periodical review by management.
POSTAL BALLOT FOR OBTAINING APPROVAL OF MEMBERS
During the financial year 2016-17 the Company did not obtain the approval of themembers for any resolution by way of Postal Ballot.
The Company proposed to seek the approval of members by way of Postal Ballot for thebelow mentioned items as approved by the Board of Directors at their meeting held on 26thMay 2017.
|Sr. No. ||Particulars |
|1 ||Raising of funds by way of further issue of securities |
|2 ||Revision in remuneration of Executive Directors of the Company |
|3 ||Appointment of Mr. Desh Raj Dogra as an Independent Director of the Company |
DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
There are no significant material orders passed by the Regulators/ Courts which wouldimpact the going concern status of the Company and its future operations.
DISCLOSURES IN RESPECT OF VOTING RIGHTS NOT DIRECTLY EXERCISED BY EMPLOYEES
There are no shares held by trustees for the benefit of employees and hence nodisclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules 2014has been furnished.
STATUTORY AUDIT AND AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Lodha & Co. Chartered Accountants theStatutory Auditors of the Company hold office upto the conclusion of the 34th AnnualGeneral Meeting. However their appointment as Statutory Auditors of the Company issubject to ratification by the members at every Annual General Meeting. The Company hasreceived a certificate from the said Auditors that they are eligible to hold office as theAuditors of the Company and are not disqualified for being so appointed.
Necessary resolution for ratification of appointment of the said Auditors is includedin the Notice of Annual General Meeting for seeking approval of members.
Observations of statutory auditors on accounts for the year ended March 31 2017:
There are no qualifications reservations or adverse remarks made by M/s. Lodha &Co. Chartered Accountants Statutory Auditors of the Company in their report for thefinancial year ended March 31 2017.
Pursuant to provisions of section 143(12) of the Companies Act 2013 the StatutoryAuditors have not reported any incident of fraud to the Audit Committee during the yearunder review.
As required under provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment & Remuneration of Managerial Personnel) Rules 2014 the reportin respect of the Secretarial Audit carried out by Veeraraghavan N. Company Secretary inpractice in Form MR-3 for the financial year 2016-17 forms part to this report. In respectof the observation made by the Auditor in the report Directors would like to state thatthe Company is in process of appointing CFO of the Company.
In compliance with provisions of Section 148 of the Companies Act 2013 and the rulesmade thereunder and as amended from time to time the requirement of cost audit and themaintenance of the cost records are not applicable to the Company. However the prescribedaccounts and records have been maintained.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act 2013 Extract ofthe Annual Return for the financial year ended March 31 2017 made under the provisions ofSection 92(3) of the Act is attached as Form MGT 9 as Annexure III which forms part ofthis Report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering the nature of activities of the Company the Company is not required tofurnish information as required under the provisions of Section 134(3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy and technology absorption.
The details of foreign exchange earnings and outgo during the year under review is asbelow:
|i) Foreign Exchange Earned: ||Rs. 578.40 Lakhs |
|ii) Foreign Exchange Outflow: ||Rs. 13.46 Lakhs |
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2014
During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. YourCompany has a policy and framework for employees to report sexual harassment cases atworkplace and the process ensures complete anonymity and confidentiality of information.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Issue of equity shares with differential rights as to dividend voting or otherwise.
2. Neither the Managing Director nor the Whole-time Directors of the Company receiveany remuneration or commission from any of its subsidiaries.
Service of documents through electronic means
All documents including the Notice and Annual Report shall be sent through electronictransmission in respect of members whose email IDs are registered in their demat accountor are otherwise provided by the members. A member shall be entitled to request forphysical copy of any such documents.
The report on Corporate Governance and the certificate from the Statutory Auditorsregarding compliance with the conditions of Corporate Governance have been furnished inthe Annual Report and forms a part of the Annual Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis report has been separately furnished in theAnnual Report and forms a part of the Annual Report.
Business Responsibility Report
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Business Responsibility Report of the Company for thefinancial year ended March 31 2017 is attached as Annexure IV which forms part of thisReport.
Investor Education and Protection Fund (IEPF')
Pursuant to Section 124 of the Companies Act 2013 amounts lying unpaid or unclaimedin the Unpaid Dividend
Account of the Company for a period of seven years from the date of transfer of thedividend amount to the Unpaid Dividend Account shall be transferred by the Company to theInvestor Education and Protection Fund established by the Central Government. Hence theCompany urges all the shareholders to encash/claim their respective dividend during theprescribed period.
Accordingly the unclaimed and unpaid dividend amounts pertaining to the financial year2009-10 will be transferred to the IEPF Account during financial year 2017-18. Theshareholders whose dividend amounts will be transferred to the IEPF Account can now claimtheir dividends from the Authority by following the Refund Procedure as detailed on thewebsite of IEPF Authority http://iepf.gov.in/IEPFA/refund.html.
The details of the unclaimed dividend along with the names and addresses of theshareholders are mentioned on the website of the Company www.sunteckindia.com. Members whohave so far not encashed the dividend warrant are requested to encash the same.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors would like to express their sincere appreciation and gratitude for theco-operation and assistance from its shareholders bankers regulatory bodies and otherbusiness constituents during the year under review.
Your Directors also wish to place on record their deep sense of appreciation for thecontribution and commitment made by every member of the Sunteck Family.
| ||On behalf of the Board of Directors |
|Mumbai 26th May 2017 ||Kamal Khetan (DIN: 00017527) |
| ||Chairman & Managing Director |