Sunteck Realty Limited
Your Directors have the pleasure in presenting the 37thAnnual Report of the Company on the business and operations of the Company together withthe Audited Statement of Accounts for the year ended 31st March 2020.
The Company's performance during the financial year ended 31stMarch 2020 as compared to the previous financial year is summarised below:
(Rs. In Lakhs)
| ||Standalone ||Consolidated |
|Particulars ||For the year ended on 31.03.2020 ||For the year ended on 31.03.2019 ||For the year ended on 31.03.2020 ||For the year ended on 31.03.2019 |
|Revenue from Operations ||29351.59 ||23793.45 ||60783.45 ||85679.21 |
|Other Income ||3910.20 ||7034.85 ||2371.62 ||3432.55 |
|Total Income ||33261.79 ||30828.30 ||63155.08 ||89111.76 |
|Total Expenditure ||22889.37 ||11290.93 ||49305.11 ||52181.40 |
|Profit for the period before tax and share of profit/ (loss) of Associates/ Joint ventures ||10372.42 ||19537.37 ||13849.97 ||36930.36 |
|Share of profit/(loss) of Associate/ Joint Ventures ||- ||- ||43.28 ||25.05 |
|Profit Before Tax ||10372.42 ||19537.37 ||13893.25 ||36955.41 |
|Current Tax ||1225.67 ||459.46 ||3457.42 ||12740.18 |
|Deferred Tax ||(1205.54) ||44.83 ||323.93 ||102.75 |
|Profit After Tax ||10352.29 ||19033.08 ||10111.90 ||24112.48 |
|Other Comprehensive Income ||(48.31) ||(8.85) ||1037.58 ||(92.68) |
|Total Comprehensive Income ||10303.98 ||19024.23 ||11149.48 ||24019.80 |
Note: Your Company has adopted Indian Accounting Standards (referred toas Ind AS) with effect from 1st April 2016 and accordingly thesefinancial statements along with the comparatives have been prepared in accordance with therecognition and measurement principles stated therein prescribed under Section 133 of theCompanies Act 2013 read with relevant rules framed thereunder and other accountingprinciples generally accepted in India.
REVIEW OF OPERATIONS
During the year under review the consolidated total income for thecurrent year amounted to Rs. 63155.08/- Lakhs compared to Rs. 89111.76/- Lakhs in theprevious year. The profit before tax on consolidated basis stands at Rs. 13893.25/- Lakhsas compared to Rs. 36955.41/- Lakhs during the previous year.
The total income earned is Rs. 33261.79/- Lakhs compared to previousyear's revenue of Rs. 30828.30/- Lakhs on standalone basis. The profit before tax onstandalone basis stands at Rs. 10372.42/- Lakhs compared to profit before tax of Rs.19537.37/- Lakhs during the previous year.
NATURE OF BUSINESS
The Company is engaged in the activities of real estate development ofresidential and commercial projects. During the year under review there was no change inthe nature of business of the Company.
Your Directors are pleased to recommend a dividend of 150 % i.e. Rs.1.5/- per equity share having face value of Rs. 1 each held by persons/entities other thanpromoter and promoter group and a dividend of 75% i.e. Rs. 0.75 per equity share havingface value of Rs. 1 each held by promoters and promoter group out of the profits of theCompany for the financial year 2019-20 subject to approval of shareholders at the ensuingAnnual General Meeting (AGM). Total outflow on account of dividend shall amount to Rs.145828247 (Rupees Fourteen Crores Fifty Eight Lakhs Twenty Eight Thousand Two Hundredand Forty Seven only).
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to reserves out ofthe profits earned during financial year 2019-20.
During the year under review your Company allotted 8222 and 27018Equity Shares of Face Value of Rs. 1/- each (Rupee One Only) on 1st April 2019and 23rd December 2019 respectively to option grantees pursuant to exercise ofoptions under Company's Employee Stock Option Scheme 2017 (ESOS 2017). All allottedshares rank pari-passu to the existing shares of the Company in all respects.
Pursuant to the above allotments the paid up capital of the Companyincreased to 146371879 Equity shares of Rs. 1/- each aggregating to Rs.146371879/- (Rupees Fourteen Crores Sixty Three Lakhs Seventy One Thousand EightHundred and Seventy Nine).
REDEMPTION OF NON-CONVERTIBLE DEBENTURES DURING THE YEAR
The Company has made timely payment of interest and redemption amountto the Debentureholders of 2000 11.75 % Secured Redeemable Non-Convertible Debentures(NCD) Series D.
The Company does not have any outstanding Non-Convertible Debentures ason 31st March 2020.
In terms of Sections 73 and 74 of the Companies Act 2013 read with theCompanies (Acceptance of Deposit) Rules 2014 during the year financial year 2019-20 yourCompany has not accepted any deposits from public and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the BalanceSheet.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
As on 31st March 2020 the Company had 18 subsidiarieswhich includes 3 foreign companies and 4 LLPs. Additionally the Company has 5 jointventure / associates which includes 1 foreign company and 3 LLPs. During the year theCompany constituted a joint venture viz. Yukti Infraprojects LLP and acquired a whollyowned subsidiary viz. Magnate Industries LLP.
Pursuant to the National Company Law Tribunal (NCLT) order dated 8thAugust 2019 the wholly owned subsidiaries of the Company viz. Amenity Software PrivateLimited Magenta Computer Software Private Limited and Sunteck Fashions and LifestylePrivate Limited were merged with the Company.
As per Section 129(3) of the Companies Act 2013 the consolidatedfinancial statements of the Company its subsidiaries associates and joint ventureentities in accordance with applicable Accounting Standards issued by The Institute ofChartered Accountants of India forms part of this Annual Report. The performance andfinancial position of each of the subsidiaries associates and Joint Venture companies forthe year ended 31st March 2020 is attached to the financial statements heretoin Form AOC 1.
In terms of Section 136 of the Companies Act 2013 separate auditedaccounts in respect of each of subsidiaries have been placed on the website of theCompany. Further the Company shall provide a copy of separate audited annual accounts inrespect of each of its subsidiary to any member of the company who asks for it and saidannual accounts will also be kept open for inspection at the Registered Office of theCompany.
The Company has formulated a policy for determiningmaterial' subsidiaries and such 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 Act2013 Ms. Rachana Hingarajia Director of the Company retires by rotation at the ensuingAGM and being eligible offers herself for re-appointment. Appropriate resolution foraforesaid re-appointment is being placed for approval of the members at the ensuing AGM.
Pursuant to Regulation 17(1A) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the shareholders of the Company at the AGMdated 27th September 2019 approved the continuance of directorship of Mr.Ramakant Nayak and Mr. Kishore Vussonji even after attaining the age of 75 yearsconsidering their valued association with the Company. Appointment of Ms. SandhyaMalhotra Independent Director was approved by the shareholders of the Company at the AGMdated 27th September 2019 for a term of up to 5 consecutive years from 1stApril 2019.
During the year under review Mr. Manoj Agarwal was appointed ChiefFinancial Officer and Key Managerial Personnel of the Company with effect from 14thJune 2019.
The Board has received declarations from the Independent Directors asper the requirement of Section 149(7) of the Companies Act 2013 and the Board issatisfied that the Independent Directors meet the criteria of independence as mentioned inSection 149(6) of the Companies Act 2013. Further the Board is of the opinion that theexisting and new Independent Directors of the Company appointed during the year possessrequisite qualities to act as Independent Directors including integrity relevantexpertise and experience. The Board further confirms that the Independent Directors whowere required to have duly passed the online proficiency self-assessment test conductedby the Indian Institute of Corporate Affairs.
The certificate under Regulation 34(3) of Listing Regulations formspart to this report.
DISCLOSURES RELATED TO BOARD COMMITTEES AND POLICIES Board Meetings
The Board of Directors met 5 times during the financial year ended 31stMarch 2020 in accordance with the provisions of the Companies Act 2013 and rules madethereunder. The Directors actively participated in the meetings and contributed valuableinputs on the matters brought before the Board of Directors from time to time.
The Independent Directors held a separate meeting in compliance withthe requirements of Schedule IV of the Companies Act 2013 and Regulation 25(3) of theListing Regulations. For further details of the meetings of the Board please refer to theCorporate 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 tothe audited financial statements of the Company for the year ended 31st March2020 the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanation relating to material departures;
b. such accounting policies have been selected and applied consistentlyand the Directors made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on 31st March2020 and of the profits of the Company for the year ended on that date;
c. proper and sufficient care was 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 accounts of the Company have been prepared on a goingconcern basis;
e. internal financial controls have been laid down to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively;
f. proper systems have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Committees of the Board a) Audit Committee
An Audit Committee is in existence in accordance with the provisions ofSection 177 of the Companies Act 2013. Kindly refer to the section on CorporateGovernance under the head Audit Committee' for matters relating toconstitution meetings and functions of the Committee.
b) Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordancewith the provisions of subsection (3) of Section 178 of the Companies Act 2013. Kindlyrefer to the section on Corporate Governance under the head Nomination andRemuneration Committee' for matters relating to constitution meetings functions ofthe Committee and the remuneration policy formulated by this Committee.
c) Corporate Social Responsibility Committee
The brief outline of the Corporate Social Responsibility (CSR) Policyof the Company and the initiatives undertaken by the Company during the year are set outin Annexure I of this report as per the format prescribed in Companies (Corporate SocialResponsibility Policy) Rules 2014.
The CSR Policy may be accessed on the Company's website at thelink https://www.sunteckindia.com/codes-policies.php
The Company has undertaken projects in the areas of Education andEnvironment Sustainability as part of its initiatives under Corporate SocialResponsibility (CSR) which are in accordance with Schedule VII of the Companies Act 2013.
d) Other Board Committees
For details of other Board Committees' viz. StakeholdersRelationship Committee and others kindly refer to the section Committees of theBoard of Directors' which forms part of the Corporate Governance Report.
Vigil Mechanism for the Directors and Employees
In compliance with provisions of section 177(9) and (10) of theCompanies Act 2013 read with Regulation 22 of the Listing Regulations your Company hasadopted whistle blower policy for Directors and employees to report genuine concerns tothe management of the Company. The whistle blower policy of the Company is posted on thewebsite of the Company and may be accessed athttps://www.sunteckindia.com/codes-policies.php
The Company's management systems organisational structuresprocesses standards code of conduct and behaviors together form the system that governshow the Group conducts the business of the Company and manages associated risks. The Boardhas constituted Risk Management Committee for monitoring and reviewing of the riskassessment mitigation and risk management plan from time to time.
The approach is based on identification evaluation and mitigation ofoperational strategic and environmental risks disciplined risk monitoring andmeasurement and continuous risk assessment and mitigation measures.
Annual Evaluation of Directors Committee and Board
A formal evaluation mechanism has been adopted for evaluating theperformance of the Board the Committees thereof individual Directors and the Chairman ofthe Board. The evaluation is based on criteria which include among others providingstrategic perspective integrity and maintenance of confidentiality and independence ofjudgment Chairmanship of Board and Committees attendance time devoted and preparednessfor the Meetings quality quantity and timeliness of the flow of information between theBoard Members and the Management contribution at the Meetings effective decision makingability monitoring the corporate governance practices role and effectiveness of theCommittees and effective management of relationship with stakeholders. Pursuant to theprovisions of the Companies Act 2013 and the Listing Regulations the Board has carriedout an annual evaluation of its own performance performance of its directors individuallyand the committees of the Board and the same is reviewed by the Nomination andRemuneration Committee.
Particulars of Remuneration
The information as required under the provisions of Section 197(12) ofthe Companies Act 2013 and Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are set out in Annexure V attached hereto.
The information required pursuant to Section 197 of the Companies Act2013 read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 in respect of employees of the Company is available forinspection by the members at registered office of the Company during business hours onworking days up to the date of the ensuing AGM. If any member is interested in obtaining acopy thereof such member may write to the Company Secretary whereupon a copy would besent.
DISCLOSURE RELATING TO EMPLOYEE STOCK OPTION SCHEMES
In compliance with the SEBI (Share Based Employee Benefits)Regulations 2014 as amended thereto the details of Employees Stock Option Schemes ofthe Company as on 31st March 2020 are furnished in Annexure II attachedherewith and forms part of this Report and is also available on the website of the Companyhttps://www.sunteckindia. com/financials.php. The ESOS Schemes of the Company are incompliance with the provisions of SEBI (Share Based Employee Benefits) Regulations 2014and a certificate from statutory auditors of the Company has been obtained for the same.
PARTICULARS OF LOANS ADVANCES GUARANTEES AND INVESTMENTS
Pursuant to Section 186 of the Companies Act 2013 and Schedule V ofthe Listing Regulations details of Loans guarantees and investments given/made duringthe financial year under review are part of the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES
All the transactions/contracts/arrangements of the nature as specifiedin Section 188(1) of the Companies Act 2013 entered by the Company during the year underreview with related party (ies) are in the ordinary course of business and on arm'slength basis. There are no material significant related party transactions made by theCompany with Promoters Directors or Key Managerial Personnel which may have a potentialconflict with the interest of the Company at large. In view of the above the requirementof giving particulars of contracts / arrangements / transactions made with relatedparties in Form AOC-2 are not applicable for the year under review.
The Policy on related party transactions and procedures dealing withrelated party transactions as approved by the Board may be accessed on the Company'swebsite at https://www.sunteckindia.com/codes-policies.php
Disclosure on related party transactions is provided in notes tofinancial statements.
DISCLOSURES UNDER SECTION 134(3)(I) OF THE COMPANIES ACT 2013
Except as disclosed elsewhere in this report no material changes andcommitments which could affect the Company's financial position have occurred betweenthe end of the financial year of the Company and the date of this report.
INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Controls in place withreference to financial statements and is operating effectively. The Company's IFCframework is commensurate with its size scale and complexity of operations. The controlsbased on the prevailing business conditions and processes have been 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. Price Waterhouse & Co. Bangalore LLPfor periodical review by management. The Audit committee reviews the reports submitted bythe Internal Auditors in its meeting.
DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its futureoperations.
STATUTORY AUDIT AND AUDITORS' REPORT
Pursuant to the provisions of 139(2) of the Act the term of M/s. Lodha& Co. (Firm Registration No. 301051E) Chartered Accountants will conclude at theupcoming AGM of the Company to be held in 2020. The Board has recommended the appointmentof Walker Chandiok & Co. LLP Chartered Accountants (Firm Registration No.001076N/N500013) as Statutory Auditors of the Company from the conclusion of the 37thAGM to the conclusion of the 42nd AGM of the Company to be held in the year2025. The Company has received a certificate from Walker Chandiok & Co. LLP that theyare eligible to hold office as the Auditors of the Company and are not disqualified forbeing so appointed.
Observations of statutory auditors on accounts for the year ended 31stMarch 2020:
There are no qualifications reservations or adverse remarks made byM/s. Lodha & Co. Chartered Accountants Statutory Auditors of the Company in theirreport for the financial year ended 31st March 2020.
Pursuant to provisions of section 143(12) of the Companies Act 2013the Statutory Auditors have not reported any incident of fraud to the Audit Committeeduring the year under review.
As required under provisions of Section 204 of the Companies Act 2013and the Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014the report in respect of the Secretarial Audit carried out by Mr. Veeraraghavan N.Company Secretary in practice in Form MR-3 for the financial year 2019-20 forms part tothis report. The said Secretarial Audit Report does not contain any qualificationreservation or adverse remark or disclaimer made by the Secretarial Auditor.
Pursuant to section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 maintenance of Cost records and Cost Auditis applicable and has been complied with by the Company. On the recommendation of theAudit Committee the Board has re-appointed M/s. Kejriwal & Associates CostAccountants (Firm Registration No. 101363) to audit the cost accounts of the Company forthe financial year ending on 31st March 2020. Remuneration payable to the CostAuditor needs to be ratified by the members of the Company and hence a resolution seekingmembers' ratification for the remuneration payable to the Cost Auditor is included inthe Notice convening the AGM.
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 134(3)(a) of the Companies Act2013 Extract of the Annual Return for the financial year ended 31st March2020 made under the provisions of Section 92(3) of the Act is attached as Form MGT9 as Annexure III which forms part of this Report and is also available on website athttps://www.sunteckindia. com/financials.php .
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The Company adopts good practices by using rainwater harvesting therebylowering fresh water intake and reducing run-offs. The Company uses Dual Fitting Tanks andLED lights which reduces the burden on energy usage in the construction area. The Companyuses steel products for rolling mills which saves considerable amount of natural resourcesand energy required to convert steel from ores. Fly ash and GGBS are the waste generatedfrom the thermal power plant and steel plants respectively used in concrete which consumeswaste generated by other industries and also produce more durable concrete. Sites arecovered with G1 sheets which reduces the equipment noise and prevents dust getting blownup in air in windy days. The use of STP water for flushing and gardening reduces theburden on natural water resources.
The details of foreign exchange earnings and outgo during the yearunder review is as below: i) Foreign Exchange Earned: Rs. 24419786 (P.Y. Rs.91741945) ii) Foreign Exchange Outflow: Rs. 24295334 (P.Y. Rs. 154095427)
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2014
During the year under review no case was 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.The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to the provisions of the Companies Act 2013 the Company hascomplied with the Secretarial Standard on the Meetings of the Board of Directors (SS-1)and Secretarial Standard on General Meetings (SS-2) issued by the Institute of CompanySecretaries of India (ICSI) and approved by the Central Government under Section 118(10)of the Companies Act 2013.
OTHER DISCLOSURES Corporate Governance
The report on Corporate Governance and the certificate from theStatutory Auditors regarding compliance with the conditions of Corporate Governance havebeen furnished in the Annual Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis report has been separatelyfurnished in the Annual Report.
Business Responsibility Report
Pursuant to Regulation 34(2) (f) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Business Responsibility Report of theCompany for the financial year ended 31st March 2020 is attached as AnnexureIV which forms part of this Report.
Investor Education and Protection Fund (IEPF')
Pursuant to the provisions of Sections 124 and 125 of the Act read withthe IEPF (Accounting Audit Transfer and Refund) Rules 2016 and amendments theretodividend / interest / refund of applications which remains unclaimed / unpaid for a periodof 7 years is required to be transferred to IEPF. Further the IEPF Rules mandate thecompanies to transfer all shares on which dividend remains unclaimed / unpaid for a periodof 7 consecutive years to the demat account of the IEPF Authority. Hence the Companyurges all the shareholders to encash/claim their respective dividend during the prescribedperiod.
Accordingly in case of instances where the dividend remains unpaid andunclaimed for 7 years and shares pertaining to which dividend remains unpaid / unclaimedfor 7 consecutive years shall be transferred by the Company to IEPF. The Members /claimants whose shares or unclaimed dividends get transferred to IEPF may claim the sharesor apply for refund from the IEPF Authority by following the refund procedure as detailedon the website of IEPF Authority at http://www.iepf.gov.in/IEPF/refund.html.
The details of the unclaimed dividend along with the names andaddresses of the shareholders are mentioned on the website of the Companywww.sunteckindia.com. Members who have so far not encashed the dividend warrant arerequested to encash the same.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors would like to express their sincere appreciation andgratitude for the co-operation and assistance from its shareholders bankers regulatorybodies and other business constituents during the year under review.
Your Directors also wish to place on record their deep sense ofappreciation for the contribution and commitment made by every member of the SunteckFamily.
| ||For and on behalf of Board of Directors |
| ||Kamal Khetan |
| ||Chairman & Managing Director |
|Mumbai 28th July 2020 ||DIN: 00017527 |