DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 55th Annual Report on the business and operations of the Company, together with the audited financial accounts for the financial year ended March 31, 2016. OPERATIONS The gross total earnings of your Company for the year ended March 31, 2016 amounted to Rs. 4723.06 lacs as against Rs. 4153.37 lacs during the previous year. It includes lease rental of Rs. 4583.33 lacs received from Apollo Tyres Ltd. (ATL), in accordance with the terms of the Lease Agreement executed with ATL. After providing for depreciation and tax, net profit amounted to Rs. 2423.83 lacs as against Rs. 1504.73 lacs in the previous year. During the year under review, the gross revenue of the step down subsidiary company Artemis Medicare Services Ltd. increased to Rs. 47717.81 lacs as compared to Rs. 37085.80 lacs in the previous year. Consolidated Turnover grew by 10.49% to Rs. 45812.47 lacs as compared to Rs. 41464.11 lacs in the previous year. Net Profit after Tax for the year is Rs. 4550.31 lacs which is higher by 35.73% as compared to Rs. 3352.56 lacs in the previous year. MATERIAL CHANGES AND COMMITMENTS No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report. REVALUATION OF ASSETS During the year, the Management determined that the market value of the property was significantly higher than what was being reflected in the books. Therefore, Directors felt that it would be appropriate that the Company considers revaluation of its land parcels to reflect their current values in its books of accounts. This is also in line with applicable accounting standard (AS10 on Accounting of Fixed Assets). Accordingly, revaluation of the immovable property of the tyre undertaking of PTL Enterprises Limited at Kalamassery was undertaken by a reputed valuer M/s Vincy Thomas. The valuer has assessed the value of Land & Building of PTL Enterprises Limited as on 31st December, 2015 (as against 31st March, 2015) as follows:- SUBSIDIARIES During the year under review, name of the Subsidiary Company- "PTL Projects Limited" has been changed to "Artemis Global Life Sciences Limited" consequent to change in its object clause from Projects management to Medical & Healthcare Business. The authorised share capital of the aforesaid subsidiary was increased from Rs. 0.05 crores to Rs. 20 crores and also the face value of its share of Rs. 10/- each was splitted into face value of Rs. 2/- each. Further, Your Directors approved sale of 30, 25,000 Equity Shares held in Artemis Medicare Services Limited (AMSL) to Artemis Health Sciences Limited (AHSL) in order to make AMSL a 100% subsidiary of AHSL. The sale /transfer of 30, 25,000 Equity Shares for a consideration of Rs. 42.35 Cr has been made. Consequently AMSL is now 100% subsidiary of AHSL, w.e.f. 31.12.2015. During the year 2015-16, your company has increased its investment in its wholly owned subsidiary company, Artemis Health Sciences Limited (AHSL), by subscribing 79.90 lacs shares of Rs.10/- each at a premium of Rs. 45 (Total value of Rs. 43.94 Crore) in Right issue of equity by AHSL. Your company's holding in AHSL would remain 100%. Pursuant to Section 129 (3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the financial statements of its subsidiaries. Further, a separate statement containing the salient features of the financial statements of subsidiary company in the prescribed form AOC-1 has been disclosed in the Consolidated Financial Statements. In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the subsidiary companies on its website at www.ptlenterprise.com The Company will make available physical copies of these documents upon request by any shareholder of the Company/ subsidiary interested in obtaining the same. These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing Annual General Meeting. Report on the performance and financial position of Subsidiary Companies.. Pursuant to Section 134 of the Companies Act, 2013 and Rule 8(1) of the Companies (Accounts) Rules, 2014 the report on performance and financial position of the subsidiary companies included in the consolidated financial statement is presented as under SCHEME OF ARRANGEMENT/DEMERGER OF SUBSIDIARY With a view to unlock value for the shareholders of the Company in the Medicare and Healthcare Business as well as to enable improved focus on the growth of the Tyre Undertaking and Medicare and Healthcare Undertaking, your Board of Directors have approved to demerge the whole of Medicare and Healthcare Undertaking of PTL Enterprises Limited into its wholly owned subsidiary Artemis Global Life Sciences Limited- AGLSL (Formerly- PTL Projects Limited, name changed w.e.f 29th December, 2015) on a going concern basis. In this behalf a scheme of arrangement between PTL Enterprises Limited and AGLSL under section 391 to section 394 and other applicable provisions of the Companies Act, 1956 and other applicable provisions of Companies Act, 2013 has been approved by your Directors in the Board meeting held on 02.02.2016. This would be subject to the approval from the Hon'ble High Courts of Kerala and Delhi and other regulatory authorities. The proposed demerger would be compliant with Section 2(19AA) of the Income-tax Act, 1961. The company has made necessary application to both BSE (designated stock exchange) and NSE for approval of the scheme of Arrangement. In consideration of the demerger of the Medicare and Healthcare Undertaking, AGLSL would issue and allot equity shares to the shareholders of PTL Enterprises Ltd. in the proposed share entitlement ratio of 1:1 i.e. one (1) equity share of Rs. 2/-(Indian Rupees Two only) each in AGLSL for every one (1) equity share of Rs. 2/- (Indian Rupees Two only) each in PTL Enterprises Ltd, held by each shareholder. Consequent to the demerger, the existing share capital of AGLSL (held by PTL Enterprises Ltd) would be cancelled; and hence the post demerger shareholding pattern of AGLSL would be a mirror image of the shareholding pattern of PTL Enterprises Limited. The equity shares of AGLSL would also be consequently listed on BSE and NSE (on which the shares of PTL Enterprises Ltd are listed). DIVIDEND Your Directors recommend payment of dividend of Re. 1/- (one rupee) per equity share for the FY 2015-16, for your approval. Your Company will have to pay dividend distribution tax amounting to Rs. 134.74 lacs, inclusive of surcharge. The dividend, if approved, shall be payable to the shareholders registered in the books of the Company and the beneficial owners as per details furnished by the depositories, determined with reference to the book closure. CORPORATE GOVERNANCE As per the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Certificate on Corporate Governance dated 11.05.2016 received from the statutory auditors, M/s. H. N. Mehta Associates, is enclosed as Annexure- 1. The Corporate Governance Report forms part of this Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS REPORT As required under Regulation 34 (3) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 with the Stock Exchanges, a detailed Management Discussion and Analysis Report has been given separately forming part of the Annual Report. DIRECTORS During the year, Mr. Akshay Chudasama, (DIN- 00010630), Ms. Shivi Mohan Rastogi (DIN- 01619307) and Mr. BK Singh (DIN- 05329739) were appointed as the Independent Directors w.e.f. 10.08.2015 for a period of 5 years i.e., up to 09.08.2020. Pursuant to Sections 149, 152 and other applicable provisions, if any, of the Companies Act, 2013, Mr.Neeraj Kanwar, Director will retire by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment in accordance with the provisions of the Companies Act, 2013. Pursuant to the requirement under Section 134(3) (d) of the Companies Act, 2013, with respect to statement on declaration given by independent directors under section 149(6) of the Act, the Board hereby confirms that all the independent directors of the Company have given a declaration and have confirmed that they meet the criteria of independence as provided in the said section 149(6). PARTICULARS W.R.T. RATIO OF REMUNERATION OF DIRECTORS AND KMP In terms of the provisions of Section 197 of the Companies Act, 2013 including Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the required information with respect to ratio of remuneration of directors, key managerial personnel and employees is set out as Annexure - II which forms part of this report. There were no employees during the year under review, drawing remuneration specified under Section 197 of the Companies Act, 2013 read with applicable rules. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors confirm: i) That in the preparation of the annual accounts, for the year ended 31st March, 2016, the applicable accounting standards have been followed and no material departures have been made from the same; ii) That they had selected such accounting policies and applied them consistently, and made judgements 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 31.03.2016 and of the profit and loss of the Company for that period; iii) That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) That they had prepared the annual accounts on a going concern basis; and v) That they had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. vi) That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. COMMITTEES OF BOARD Pursuant to requirement under Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors has constituted various committees of Board such as Audit Committee, Nomination & Remuneration Committee, Stake Holders Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee. The details of composition and terms of reference of these committees are mentioned in the Corporate Governance Report. DISCLOSURE ON COMPOSITION OF AUDIT COMMITTEE & NON ACCEPTANCE OF ITS RECOMMENDATION Pursuant to Section 177(8) of the Companies Act, 2013 the composition of Audit Committee of the Company as on 31.03.2016 is as under: NUMBER OF MEETINGS OF THE BOARD During the Financial Year 2015-16, 4 (four) Board meetings were held. For details thereof, refer to the section "Board of Directors"- Number of Board Meetings, in Corporate Governance Report. STATUTORY AUDITORS M/s. H. N. Mehta Associates, Chartered Accountants, Statutory Auditors of your Company, will retire at the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for reappointment as Statutory Auditors for the FY 2016-2017. Pursuant to Section 141 of the Companies Act, 2013 and relevant Rules prescribed there under, the Company has received certificate dated 25th April, 2016 from the Auditors to the effect, inter-alia, that their re-appointment, if made, would be within the limits laid down by the Act, shall be as per the term provided under the Act, that they are not disqualified for such re-appointment under the provisions of applicable laws and also that there is no proceeding against them or any of their partners pending with respect to professional matter of conduct. Based on the recommendations of the Audit Committee and as per the provisions of Section 139 (1), the Board of Directors of your Company proposes to appoint M/s H. N. Mehta Associates, Chartered Accountants, Statutory Auditors of your Company for FY16-17. AUDITORS' REPORT The Audit Report does not contain any qualification, reservation or adverse remarks requiring any comment or explanation from the company. SECRETARIAL AUDITORS AND THEIR REPORT M/s RSMV & Co., Practising Company Secretaries, were appointed as Secretarial Auditors of the Company for the Financial year 2015-16 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR- 3 is attached as Annexure - III and forms part of this report. There are no qualifications or observations or other remarks of the Secretarial Auditors in the Report issued by them for the financial year 2015-16 which call for any explanation from the Board of Directors. FIXED DEPOSITS During the year under review, your Company has neither accepted nor renewed any deposits during the Financial Year 201516 in terms of Chapter V of the Companies Act, 2013 and no amount of principal or interest was outstanding in respect of deposits from the public as on the date of balance sheet. COSTAUDIT Your Company does not have its own production and its facility has been leased out to Apollo Tyres Ltd. Under the Companies (Cost Records and Audit) Rules, as prescribed under the new Companies Act, 2013, company's lease income is not classified under the aforesaid Rules; hence Cost Audit is not applicable in respect of your company. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO As the Company's facility has been leased out to Apollo Tyres Ltd. and the Company is not carrying out any manufacturing activity of its own, no information is required to be furnished under section 134 (3) (m) of the Companies Act, 2013. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS The policies and procedures adopted by the company ensures orderly and efficient conduct of the business, including adherence to company's policies, safeguarding the assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information. EXTRACT OF ANNUAL RETURN The extract of Annual Return as on 31.03.2016 in the prescribed form MGT.9, pursuant to section 92(3) of the Companies Act, 2013 and Rule 12 (1) of the Companies (Management and Administration) Rules, 2014 is attached herewith as Annexure - IV and forms part of this Report. POLICY ON DIRECTORS' APPOINTMENT AND POLICY ON REMUNERATION Pursuant to the requirement under Section 134(3) (e) and 178 (3) of the Companies Act, 2013, the policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and the policy on remuneration of directors, KMP and other employees is attached as Annexure - V which forms part of this report. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 Pursuant to the requirement under Section 134(3) (g) of the Companies Act, 2013 the particulars of loans, guarantees or investments under Section 186 as on 31.03.2016 is attached as Annexure - VI which forms part of this report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013 Pursuant to the requirement under Section 134(3) (h) of the Companies Act, 2013, the particulars of contracts or arrangements with related parties referred to in section 188(1) of the Act, is attached as Annexure - VII which forms part of this report. DISCLOSURE ON VIGIL MECHANISM The Company has established a vigil mechanism through which Directors, employees and business associates may report unethical behavior, malpractices, wrongful conduct, fraud, violation of Company's code of conduct without fear of reprisal. Further information on the subject can be referred to in section "Disclosures" - Whistle-Blower Policy / Vigil Mechanism of the Corporate Governance Report. MANNER IN WHICH FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS Pursuant to applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter alia, the criteria for performance evaluation of the entire Board of the Company, its committees and individual directors, including independent Directors. A structured questionnaire has been prepared, covering various aspects of the functioning of the board and its Committees, such as adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board"s focus, regulatory compliances and corporate governance,etc. Similarly, for evaluation of individual director's performance, the questionnaire covers various aspects like his/her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc. Board members had submitted their response on a scale of 5 (Exceptionally Good) - 1 (Unacceptable) for evaluating the entire Board, respective committees of which they are members and of their peer Board members, including Chairman of the Board. The independent directors had met separately without the presence of Non-Independent directors and the members of management and discussed, inter alia, the performance of Non-Independent directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non-Executive Directors. The Nomination and Remuneration committee has also carried out evaluation of every director"s performance. The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the director being evaluated. On the basis of the performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires. The Directors expressed their satisfaction with the evaluation process. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATIONS IN FUTURE The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall impact the going concern status and company"s operations in future. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED ON CORPORATE SOCIAL RESPONSIBILITIES (CSR) INITIATIVES The Company has in place a CSR policy in line with schedule VII of the Companies Act, 2013. The CSR Policy may be accessed on the company's website at the link- www.ptlenterprise.com The annual report on CSR activities is furnished in Annexure - VIII which forms part of this report. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY The Company has in place comprehensive risk assessment and minimization procedures, which are reviewed by the Audit Committee/ Board periodically. As per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the stock exchanges, a Risk Management Committee has been maintained by the Board of Directors with responsibility of preparation of Risk Management Plan along with their mitigation plans and, reviewing and monitoring the same on regular basis, to identify and review critical risks on regular basis, to update Risk Register on quarterly basis, to report key changes in critical risks to the Board on ongoing basis, to report critical risks to Audit Committee in detail on yearly basis and such other functions as may be prescribed by the Board. LEGAL COMPLIANCE REPORTING The Board of directors reviews in detail, on a quarterly basis, the reports of compliance to all applicable laws and regulations. Any non-compliance is seriously taken up by the Board, with fixation of accountability and reporting of steps taken for rectification of non-compliance. In the opinion of the Board, there has been no identification of elements of risk that may threaten the existence of the company. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Company has in place a formal policy for prevention of sexual harassment of its women employees in line with "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. ACKNOWLEDGEMENTS Your Directors wish to place on record their appreciation for cooperation received from the Central Government, State Governments of Kerala and Haryana. We also thank our bankers, consumers, business partners and stakeholders for their valuable support during the year under review. The Board further wishes to extend its appreciation for the contributions made by employees towards growth of the company. For and on behalf of the Board of Directors CHAIRMAN (ONKAR S KANWAR) Dated: 11th May, 2016 Place : Gurgaon |