DIRECTORS' REPORT DEAR SHAREHOLDERS, 1. Your Directors have pleasure in presenting their 144th Annual Report and the Audited Accounts for the Financial Year ended March 31, 2016 together with the Independent Auditor's Report thereon. 3. Operations of the Company On a Standalone basis the Total Income for the Financial Year ended March 31, 2016 stood at Rs.235.86 Crores as against Rs. 294.03 Crores for the corresponding Financial Year ended March 31, 2015. The Company incurred a loss from ordinary activities before tax of Rs. 44.85 Crores for the Financial Year ended March 31, 2016 as against loss of Rs. 18.47 Crore for the Financial Year ended March 31, 2015. The Company reported a net loss of Rs. 29.97 Crore for the Financial Year ended March 31, 2016 as against loss of Rs. 6.32 Crore for the Financial Year ended March 31, 2015. On a Consolidated basis the Total Income for the Financial Year ended March 31, 2016 was Rs. 382.32 Crores as against Rs. 302.92 Crores for the corresponding Financial Year ended March 31, 2015. The Company incurred a loss from ordinary activities before tax of Rs. 45.48 Crores for the Financial Year ended March 31, 2016 as against a loss of Rs. 22.86 Crores for the Financial Year ended March 31, 2015. The Company reported a net loss of Rs. 29.43 Crores for the Financial Year ended March 31, 2016 as against net loss of Rs. 8.55 Crores for the Financial Year ended March 31, 2015. 4. Share Capital The Paid-up Equity Share Capital of your Company as on March 31, 2016 was Rs. 55.90 Crores. During the Financial Year, the Company has neither issued any shares nor has granted stock options or sweat equity. During the Financial Year, 1000, 5% Cumulative Redeemable Preference Shares of Face Value of Rs. 10/- each, aggregating to Rs. 10,000/- were redeemed. 5. Debenture During the Financial Year, Non - Convertible Debentures aggregating to Rs. 22.00 Crores (Rupees Twenty Two Crore) were issued on a Private Placement Basis and the same were listed on BSE Limited. Non-Convertible Debentures aggregating to Rs. 138.73 Crores were redeemed, during the Financial Year. 6. Dividend The Board of Directors has recommended a dividend of Rs. 0.20/- per Equity Share of Rs. 2/- each for the Financial Year ended March 31, 2016. 7. Particulars of Loans, Guarantees or Investments Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the note no. 11 to the Standalone Financial Statements, forming part of this Report. 8. State of Company's Affairs and Business Review The details of the Company's affairs including its operations and projects are more specifically given in the Management Discussion and Analysis Report, which is appended to this Report. 9. Corporate Social Responsibility Corporate Social Responsibility has been an integral part of the way in which your Company does business. Your Company has made a conscious effort to involve communities in its development journey and has received appreciations from the stakeholders, which gives a sense of pride and an encouragement to continue this resolve, further and better. An amount of Rs. 1,65,63,750/- was allocated towards CSR activities as mandated by the provisions of the Companies Act, 2013. In accordance with the provisions of section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, an Annual Report on the CSR activities of the Company along with the CSR initiatives undertaken during the Financial Year 2015- 16 is appended to this Report as "Annexure-A." As mandated under section 135 of the Companies Act, 2013, the Composition of Corporate Social Responsibility Committee is given in the Report on Corporate Governance, forming part of this Report. Corporate Social Responsibility Policy of the Company is hosted on the website of the Company www.peninsula.co.in <http://www.peninsula.co.in>. 10. Business Risk Management The Company is exposed to inherent uncertainties owing to the sector in which it operates. A key factor in determining a Company's capacity to create sustainable value is the ability and willingness of the Company to take risks and manage them effectively and efficiently. Many types of risks exist in the Company's operating environment and emerge on a regular basis due to many factors such as changes in regulatory framework, economic fundamentals etc. In order to evaluate, identify and mitigate these business risks, the Company has a robust Risk Management framework. This framework seeks to create transparency, ensure effective risk mitigation process and thereby minimize adverse impact on the business objectives and enhance the Company's competitive advantage. Further, the Company has constituted a Risk Management Committee (RMC) in accordance with the provisions of the Companies Act, 2013. The details in this regards are more specifically given in the Corporate Governance Report which forms a part of this Report. 11. Internal Control Systems and their Adequacy The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope of the Internal Audit as defined in the Internal Audit Charter covers the evolution of Internal Control System. To maintain its objectivity and independence, the Internal Auditor Reports to the Chairperson of the Audit Committee. The Internal Auditor monitors and evaluates the efficacy and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the Report of Internal Auditor, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee. 12. Vigil Mechanism / Whistle-Blower Policy The Company has adopted a Whistle-Blower Policy for Directors and employees to report genuine concerns and to provide for adequate safeguards against victimization of persons who may use such mechanism. The functioning process of this mechanism has been more elaborately mentioned in the Corporate Governance Report annexed to this Report. The said policy is hosted on the website of the Company www.peninsula.co.in 13. Subsidiary Companies The Company has 27 (Twenty Seven) Subsidiaries (including direct and step-down subsidiaries), 3 (Three) Joint Ventures and 3 (Three) Associates as on March 31, 2016. The Company does not have any material Subsidiaries as on March 31, 2016. A policy on material Subsidiaries has been formulated by the Company and posted on the website of the Company www.peninsula.co.in A statement containing the salient features of the Financial Statements of Company's aforesaid Subsidiaries, Joint Ventures and Associates is annexed in the prescribed Form AOC-1 to this Report as "Annexure-B." The Company will make available the Financial Statements of the Subsidiaries / step-down Subsidiaries, Joint Ventures and Associates (collectively referred as "Subsidiaries") and the related information to any member of the Company who may be interested in obtaining the same. The Financial Statements of the Subsidiaries will also be kept open for inspection at the Registered Office of the Company and that of the respective Subsidiaries. The Consolidated Financial Statements of the Company forming part of this Annual Report, include the Financial Statements of its Subsidiaries. The Financial Statements of Subsidiaries are also hosted on the website of the Company www.peninsula.co.in This Annual Report will also be displayed on Company's website www.peninsula.co.in 14. Directors / Key Managerial Personnel During the Financial Year Mr. D. M. Popat retired by rotation at the 143rd Annual General Meeting held on August 28, 2015 and did not seek re-appointment. On December 22, 2015 Mr. D. M. Popat passed away. The Board records its heartfelt condolences on the sad demise of Mr. Popat. Dr. Ajay Dua ceased to be a Director of the Company w.e.f. October 26, 2015 owing to his resignation, due to personal reasons. The Board wishes to place on record its sincere appreciation and gratitude for the invaluable contribution made by them during their tenure with the Company. The Company has complied with the requirement of appointing Key Managerial Personnel as per the provisions of Section 203 of the Companies Act, 2013. Ms. Urvi A. Piramal (DIN: 00044954) who was appointed as an Executive Chairperson of the Company by the shareholders at the AGM of the Company held on August 5, 2010, had steped down from the post of the Executive Chairperson of the Company w.e.f. July 1, 2015 and continues to be the Non-Executive Chairperson effective that date. Further the office of Ms. Piramal shall not be liable to determination for retirement by rotation. Mr. Rajeev A. Piramal was re-appointed as Executive Vice-Chairman and Managing Director and Mr. Mahesh S. Gupta was re-appointed as Group Managing Director, for a further period of 5 (five) years each with effect from October 26, 2015 by the shareholders of the Company at the 143rd AGM of the Company, held on August 28, 2015. During the Financial Year, as recommended by the Nomination and Remuneration Committee, the Board at its Meeting held on October 26, 2015 recommended the appointment of Mr. Nandan A. Piramal as Whole-Time Director responsible for marketing operations, for a period of 5 (five) years with effect from that date, to the members of the Company on the remuneration and terms and conditions as contained in the Notice of the 144th AGM. Your Directors recommend the appointment of Mr. Nandan A. Piramal as Whole-Time Director of the Company. None of aforesaid executive Directors viz. Mr. Rajeev A. Piramal, Mr. Nandan A. Piramal and Mr. Mahesh S. Gupta has received any remuneration from any subsidiaries of the Company. In accordance with the provisions of Sub-Section (6) of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Rajeev A. Piramal (DIN: 00044983) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. Your Directors recommend re-appointment of Mr. Rajeev A. Piramal. All the Independent Directors have furnished declaration in accordance with the provisions of Section 149 (7) of the Companies Act, 2013 regarding Meeting the criteria of independence as provided under Section 149 (6). 15. Board Evaluation Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule IV and other applicable provisions of the Companies Act, 2013, mandates a formal evaluation to be done by the Board of its own performance and that of its Committees and individual Directors, and that the Independent Directors shall evaluate non-independent Directors and the Chairperson of the Board. The Company has, on the advice of the Directors, appointed hrcraft, a professional business consulting firm specialized in feedback exercises, to carry out the assignment in a fair and transparent manner. The performance evaluation Forms were circulated to all the Directors and they have provided their inputs on the same. A Report of the evaluation was then forwarded to the Chairperson and the respective Director to maintain the confidentiality of the Report. Based on the inputs provided by hrcraft, the Independent Directors at their Meeting held on March 22, 2016, evaluated performance of the Chairperson, non-independent Directors of the Company and the performance of the Board as a whole. Pursuant to provisions of Section 178 of the Companies Act, 2013, the Nomination and Remuneration Committee has also, carried out evaluation of every Director's performance and the Board has carried out formal annual evaluation of its own performance and that of its Committees and individual Directors. Further, the evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The Directors were satisfied with the evaluation results, which reflect the overall engagement of the Board and its Committees and on the basis of the Report of the said evaluation, the present term of appointment of Independent Directors shall be continued with the Company. 16. Remuneration Policy The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The details of the policy are more particularly mentioned in the Corporate Governance Report, which forms a part of this Report. 17. Meetings of the Board and its Committees During the Financial Year the Board met on four occasions, the Audit Committee met on five occasions, the Nomination and Remuneration Committee met on two occasions and the Corporate Social Responsibility Committee make on two ocassions. The gap between two consecutive Board Meetings and Audit Committee Meetings was within the limits prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of the Meetings are more specifically given in the Corporate Governance Report, which forms a part of this Report. 18. Directors' Responsibility Statement Pursuant to Section 134 (5) of the Companies Act, 2013 ("the Act"), we hereby state that: i) in the preparation of the annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii) your Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and its loss for the year The policy on Related Party Transactions as approved by the ended on that date; Board is hosted on the Company's website www.peninsula.co.in iii) your Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) your Directors have prepared the Annual Accounts for the year ended March 31, 2016 on a going concern basis; v) the Directors have laid down internal financial controls which are followed by the Company and that such internal financial controls are adequate and are operating effectively. vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 19. Related Party Transactions The Related Party Transactions that were entered into during the Financial Year were on an arm's length basis and in the ordinary course of business. There were no materially significant Related Party transactions entered into by the Company with Promoters, Directors or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. Details of the related party transactions are given in Form AOC-2 which is enclosed as "Annexure-C." The Related Party Transactions were placed before the Audit Committee and also the Board for its approval, wherever required. Prior omnibus approval of the Audit Committee was also obtained for the transactions that were of repetitive nature. The transactions entered into pursuant to the omnibus approval of the Audit Committee were placed before the Audit Committee for its review on a quarterly basis. The Company has framed a policy on Related Party Transactions for the purpose of identification and monitoring of such transactions. The details of Related Party Transactions entered into by the Company are more particularly given in the para 11 of note no 23 to the standalone Financial Statements. None of the Directors / KMPs or their relatives have any pecuniary relationships or transactions vis-a-vis the Company, other than their shareholding, if any, in the Company. 20. Deposits Your Company has not accepted or renewed any deposits under chapter V of the Companies Act, 2013, during the Financial Year 2015-16. 21. Auditors a) Statutory Auditors The Statutory Auditors, M/s. Haribhakti & Co LLP, Chartered Accountants, Mumbai (Firm Registration No. 103523W) retire at the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a confirmation letter from the Auditors to the effect that their re-appointment, if made, will be within the limits prescribed under the Companies Act, 2013 and that they are not disqualified for re-appointment as per the provisions of the said Act. As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI). The Board recommends their reappointment as Auditors to audit the accounts of the Company for the Financial Year 2016-17. The Auditor's Report on the Standalone Financial Statement of the Company for the Financial Year 201516, does not contain any qualification, reservation or adverse remark. The Auditors' remarks on the Consolidated Financial Statements of the Company are self-explanatory. The Directors of your Company confirm that no frauds or instances of mis-management were reported by the Statutory Auditor under Section 143(12) of the Companies Act, 2013. b) Secretarial Auditor Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time, the Company has appointed M/s. Dhrumil M. Shah & Co., Company Secretary in Practice, to undertake the Secretarial Audit of the Company. The report on the Secretarial Audit is annexed as "Annexure-D." The remarks of Auditor made in the Report are self-explanatory. 22. Corporate Governance Report and Management Discussion & Analysis The Corporate Governance Report together with the Certificate on Corporate Governance issued by Mr. Nilesh G. Shah, Practicing Company Secretary confirming compliance with the conditions of Corporate Governance as stipulated under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Management Discussion & Analysis Report given in this Annual Report form an integral part of this Report. 23. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT - 9 is annexed herewith as "Annexure-E" to this Report. 24. Particulars of Employees The information required pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company will be provided on request. In terms of Section 136 of the Act, the Reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars mentioned in Section 197 (12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the members at the Registered Office of the Company during business hour on working days of the Company up to the date of the ensuing Annual General Meeting. If any member is interested in inspecting the same, such member may write to the Company Secretary in advance. 25. Conservation of Energy and Technology Absorption In view of the nature of activities which are being carried on by the Company, provisions regarding conservation of Energy and Technology absorption read with Section 134 (3) (m) of the Companies Act, 2013 and Rule 8 (3) of the Companies (Accounts) Rules, 2014 are not applicable. 26. Foreign Exchange earnings and outgo There were no Foreign Exchange earnings during the Financial Year. In respect of the Foreign Exchange outgo, disclosure of information as required under section 134 (3) (m) of Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is given in Paras 17, 18 and 19 of Note 23 of the Standalone Financial Statements. 27. Significant and Material Orders There were no significant and material orders passed by any Regulators or Courts or Tribunals during the Financial Year ended March 31, 2016 impacting the going concern status and Company's operations in future. 28. Prevention of Sexual Harassment of Women at Workplace The Company has adopted an Anti - Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has constituted an Internal Complaints Committee (ICC) to redress the complaints received regarding sexual harassment. During the year under review, no complaints were received by the Committee for Redressal. 29. Prevention of Insider Trading Your Company has adopted a Code of Internal Procedure and Conduct for regulating, monitoring and reporting of trading by insiders and Code of Fair Disclosure of Unpublished Price Sensitive Information to ensure prevention of Insider Trading in the Organisation. 30. Acknowledgement The Directors express their deep gratitude and thank the Central and State Governments as well as their respective Departments and Development Authorities connected with the business of the Company, contractors and consultants and also Banks, Financial Institutions, Shareholders, Debenture-Holders and Employees of the Company for their continued support and encouragement. By Order of the Board For Peninsula Land Limited Sd/- Urvi A. Piramal Non-Executive Chairperson Place: Mumbai Date: May 11, 2016 |