DIRECTORS' REPORT TO THE MEMBERS, Yours Directors take pleasure in presenting the Thirtieth Annual Report of your Company together with the Consolidated Audited Accounts for the year ended March 31, 2015. 2. OPERATIONS REVIEW AND THE STATE QF COMPANY'S AFFAIRS As you are aware that, your Company is engaged in the business of construction and development of Residential, Commercial, Hospitality projects and IT Parks. The Company, during the current financial year, would focus on Construction and Development of residential projects in addition to the pending ongoing IT and Commercial Projects. This would strengthen the generation and sustainability of revenues in the years to come. Your Company, during the year under review, had posted Standalone Net Profit after tax of Rs. 125.03 Crores as compared to Rs. 88.33 Crores during the previous year. Your Company, during the year under review, had posted Consolidated Net Profit after tax of Rs. 142.37 Crores as compared to Rs. 100.38 Crores during the previous year. Rental and Services Receipts The consolidated Rental and Services Receipts of your Company, during the year under review was Rs. 74.72 Crores as compared to Rs. 77.13 Crores during the previous year. Operations Residential: The Company is focusing on the development the Company's show case project Anant Raj Estate at Sector 63A, in Gurgaon, which is being developed over land admeasuring 160 acres, with total developable area approximately 6 million sq. ft. The project titled as Anant Raj Estate, comprises of construction & developtment of Luxury Villas, Plots, Residential Flats and Independent floors. The Company has received a good response for the projects. The Company has commenced construction and development of the project and the focus of the Company would be to complete the 1st Phase of the said project in the next two years. The Anant Raj Estate project alone is expected to add Rs. 5,000 Crores to the Company's total revenues over the next four-five years. The construction and development of your Company's prestigious residential projects namely "MACEO" at Sector-91, Gurgaon and "Madelia" at Manesar is in progress and the Company intends to complete the same in the current financial year. The Company has successfully completed its low cost housing project named as "Ashray" at Neemrana, Rajasthan and Possession of 2580 units is being handed over to Buyers. Commercial: The "Moments Mall" at Kirti Nagar, New Delhi, being managed by subsidiary of the Company, namely Anant Raj Projects Limited is operational and generating revenues. IT Parks Your Company had developed a IT SEZ with developable area of 0.6 mn. sq. ft. at Panchkula, Haryana, through a subsidiary of the Company, namely Rolling Construction Private Limited. The 2nd phase of the project in completed and has started generating revenues. The Company has already completed its IT Park situated at Manesar, which is operational and generating revenues. As you are aware that, your Company has already completed its 1st Phase of IT SEZ Project at Rai, Sonepat. The construction and development of 2nd Phase is in full swing and is expected to be complete in the next two years. Hospitality Your Company's Hotel Projects namely Hotel Mapple Emerald, Hotel Ocean pearl Retreat, Hotel Mapple Exotica Orana hotels and resorts are operational and generating revenues. Your Company is focusing on the development of a resort at Dhumaspur, Gurgaon with constructed area of 0.65 mn. sq. ft spread over an area of 10 acres with 400 rooms. The project will be developed in a phased manner. 3. MATERIAL CHANGE AND COMMITMENT There has been no material change affecting the financial position of your Company which has occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report. 4. CHANGE IN THE NATURE OF BUSINESS, IF ANY There has been no material change in the nature of business of your Company during the period under review. 5. DIVIDEND The Board of Directors of your Company, subject to approval of shareholders at the ensuing Annual General Meeting, has recommended a dividend @ 12% (Re. 0.24 per equity share of Rs. 2/- each) for the year ended March 31, 2015. The cash outflow on account of dividend if approved by the shareholder, will be Rs. 7.08 Crores and corporate dividend tax would be Rs. 1.42 Crores. 6. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to section Section 205 A read with section 205 C of the Companies Act, 1956 (Corresponding to Section 125 of the Companies Act, 2013), the Company has transferred a sum of Rs. 15,39,630 during the financial year 2014-15 to the Investor Education and Protection Fund established by the Central Government. The said amount represents unclaimed dividend for the year 2006-07 which was lying with the Company for a period of more than seven years from the due date of payment. 7. TRANSFER TO RESERVES Your Company has transferred a sum of Rs. 12.50 Crores to the General Reserves. 8. DEBENTURE REDEMPTION RESERVE In accordance with statutory provisions, Your Company has transferred a sum of Rs. 100 Crores to the Debenture Redemption Reserve. 9. OUTSTANDING NON CONVERTIBLE DEBENTURES (NCDs) Your Company had issued 2500 Secured Listed Redeemable Non- Convertible Debentures (NCDs) of Rs. 10,00,000/- each (Series A: 1000 NCDs of Rs. 10,00,000/- each & Series B: 1500 NCDs of Rs. 10,00,000/- each) aggregating to Rs. 250 Crores to YES Bank Limited on private placement basis. These NCDs are listed on NSE under the WDM Segment. The Company had on due date, i.e. August 11, 2014 redeemed 50% of face value of debentures aggregating to Rs. 50 Crores (Rupees Fifty Crores only) out of Series A: as per the redemption schedule specified in the "Information Memorandum". Further the Company has prematurely redeemed the outstanding Series A, 1000 NCDs of Rs. 5 Lacs each, at par, on October 07, 2014, that had been issued to Yes Bank Limited, on Private Placement basis. After the aforesaid payments, your Company has completed redemption of entire NCDs aggregating to Rs. 100 Crores under Series-A. The total outstanding NCDs in Series B now stands at Rs. 150 Crores (i.e. 1500 NCDs of Rs. 10,00,000 lacs each). The next due date of redemption of Series B will be on February 11, 2016. 10. CREDIT RATING During the year under review, the Credit rating agency Credit Analysis & Research Limited ("CARE") has reaffirmed the credit ratings of your Company as 'CARE BBB+ (Triple B Plus)' to your Company's debt and NCDs. 11. SHARE CAPITAL The paid-up share capital of your as on March 31, 2015 was Rs. 59,01,92,670 divided into 29,50,96,335 equity shares of Rs. 2/- each. During the year under review, your Company has neither issued shares with Differential Voting Rights nor granted Stock Options nor Sweat Equity. 12. LISTING OF SHARES Your Company's equity shares are listed at Bombay Stock Exchange & National Stock Exchange and GDRs are listed at Luxembourg Stock Exchange. The Listing fee, for the year under review, has been paid to the Stock Exchanges. 13. FIXED DEPOSITS Your Company has not invited or accepted any fixed deposits from the public in terms of provisions of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. 14. INSURANCE Your Company's properties including building, plant and machinery, stocks, stores, etc., have been adequately insured against major risks. 15. LOANS, GUARANTEES OR INVESTMENTS Details of Loans, Guarantees or Investments, if any covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meeting of the Board and its Power) Rules, 2014 are given in the Financial Statements of the Company (please refer to Note Nos. 14, 16 and 22 of the standalone financial Statements). 16. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS During the year under review, there have been no significant and material orders passed by any regulators/courts/ tribunals that could impact the going concern status and your Company's operations in future. 17. RELATED PARTY TRANSACTIONS AND POLICY ON RELATED PARTY TRANSACTIONS All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by your company which may have potential conflict with our interest of your Company at large and thus disclosure in Form AOC-2 is not required. The Board has formulated policy on Related Party Transactions and it may be accessed at the web-link <http://> www.nseprimeir.com/z_ANANTRAJ/files/policy%20 on%20related%20party%20transactions.pdf 18. RISK MANAGEMENT POLICY In Compliance with the requirement of the Companies Act, 2013 and the Clause 49 of the Listing Agreement, your Company has put in place Risk Minimization and Assessment Procedure. In order to effectively and efficiently manage risk and address challenges, your Company has formulated Risk Management Policy. The main objective of the policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decision on risk related issues. The Board has formulated policy on Risk Management and the same may be accessed at the web-link <http://> www.nseprimeir.com/z_ANANTRAJ/files/risk%20 management%20policy.pdf 19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY Your Company has established a "Vigil Mechanism" for its Employees and Directors, enabling them to report any concerns of unethical behaviour, suspected fraud or violation of the Company's code of conduct. To this effect the Board has adopted a "Whistle Blower Policy" (WBP), which is overseen by the Audit Committee. The policy provides safeguards against victimization of the whistle blower. Employees and other shareholders have direct access to the chairman of the Audit Committee for lodging concern if any, or review. The Board has formulated policy on Whistle Blower and the same may be accessed at the web-link <http://www>. nseprimeir.com/z_ANANTRAJ/files/Anantraj_whistle_ blower_policy.pdf. 20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO The Information relating to Conservation of energy, technology absorption, foreign Exchange Earning and outgo, pursuant to section 134(3)(m) of the Companies Act 2013, read with the Companies (Accounts) Rules, 2014 is enclosed as Annexure-I and forms part of this Report. 21. PARTICULARS OF EMPLOYEES In terms of the provision Section 197(12) of the Companies Act 2013 read with Rules 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is enclosed as 'Annexure - II' and forms part of this Report. 22. MANAGERIAL REMUNERATION The information required under Section 197(12) of the Companies Act, 2013 read with Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in 'Annexure-III', forming part of this Report. 23. COMMITTEES OF BOARD (i) Corporate Social Responsibility (CSR) Committee In terms of section 135 of the Companies Act, 2013 and rule framed thereunder, the Company has constituted a CSR Committee to recommend and monitor expenditure on CSR. The CSR Committeecomprises of Shri Brajindar Mohan Singh as Chairman and Shri Anil Sarin and Shri Amit Sarin as members. Based on the recommendations of the CSR Committee, your Company has laid down a CSR policy, which is displayed on the website of the Company. It can be accessed at the web-link at <http://www.nseprimeir>. com/z_ANANTRAJ/files/ANANTRAJ_CSR_ Policy_13082014.pdf Your Company is committed to Corporate Social Responsibility; Your Company during the year ended March 31, 2015, was required to spend average net profit of the Company for last three financial years. i.e. Rs. 2.64 Crores. During the year under review, your Company as part of its CSR initiative has spent total amount on the projects covered under the CSR Policy of the Company. The details of the CSR Activities are given as 'Annexure- IV' forming part of this Report. (ii) Nomination and Remuneration Committee In terms of Section 178 of the Companies Act, 2013 ('Act') read with Companies (Meeting of the Board and its Power) Rules, 2014 and Clause 49 of the Listing Agreement, your Company has duly constituted a Nomination and Remuneration Committee. The details of the composition of the committee along with other details are available in the Corporate Governance Report which is forming part of this Annual Report. The details of the Remuneration Policy are given as 'Annexure-V' forming part of this Report. It is hereby affirmed that the remuneration paid is as per the Remuneration Policy of the Company. (iii) Audit Committee Your Company has a duly constituted Audit Committee Comprising Sh. Ambarish Chatterjee as Chairman, Shri Ashok Sarin, Shri Brajindar Mohan Singh & Shri Maneesh Gupta as members. The terms of reference of Audit Committee are as per the requirements of Companies Act 2013 & Clause 49 of the Listing Agreement. The details of meetings with attendance thereof and terms of reference of Audit Committee have been provided in the Corporate Governance Report which forms part of this report. (iv) Stakeholder Relationship Committee & Share Transfer Committee Your Company has also formed Stakeholder's Relationship Committee and Share Transfer Committee in compliance with the Companies Act, 2013 & Listing Agreement. The details about the composition of the said committees of the Board of Directors alongwith attendance thereof has been provided in the Corporate Governance Report forming part of this report. 24. MANAGEMENT DISCUSSION & ANALYSIS REPORT Management Discussion & Analysis Report is to annexed forming part of this Annual Report. 25. CORPORATE GOVERNANCE REPORT As per the requirement of Clause-49 of the Listing Agreement executed with the Stock Exchanges, a report on Corporate Governance is annexed, which forms part of this report. A certificate from Auditors confirming compliance with the conditions of the Corporate Governance is also annexed hereto. 26. PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE Your Company has zero tolerance for sexual harassment at workplace and has formulated a policy on Prevention, Prohibition and Redressal of Sexual harassment at the workplace, in line with the provisions of the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. Your Company has also constituted an internal Complaints Committee, to inquire into complaints of sexual harassment and recommend appropriate action. There were no complaint received from any employee during the financial year 2014-15 and hence no complaint is outstanding as on March 31, 2015. 27. EXTRACT OF ANNUAL RETURN The extract of Annual Return required under section 134(3) (a) of the Companies Act, 2013, read with rules thereunder in form MGT-9 is annexed herewith as 'Annexure-VI'. 28. DIRECTORS' RESPONSIBILITY STATEMENT The Board of Directors hereby confirms and accepts the responsibility for the following in respect of the Audited Annual Accounts for the financial year ended March 31, 2015: (a) that in the preparation of the annual accounts for the financial year ending 31st March, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) that the directors 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 your Company at the end of the financial year and of the profit of your Company for that period; (c) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the annual accounts/financial statements have been prepared on a going concern basis; and (e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effetely; (f) t hat the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 29. SUBSIDIARIES AND GROUP COMPANIES During the year under review, two (2) Companies namely 'Anant Raj Estate Management Services Limited' and 'Romano Estate Management Services Limited' were incorporated as wholly owned subsidiaries of your Company. Two (2) Companies namely Greatway Estates Limited and Saffron Views Properties Private Limited, ceased to be subsidiaries of your company. A statement containing salient features of financial statements of subsidiaries pursuant to section 129 of the Companies Act, 2013 (Act) read with Rule 5 of the Companies (Accounts) Rules, 2014 in the prescribed form AOC-1 is attached and forms part of this Annual Report as 'Annexure-VII'. The annual accounts of the subsidiaries are also available for inspection for any member/investor, during business hours, at the Registered Office of the Company and the same can be accessed from the website of the Company i.e. www.anantrajlimited.com The Company has laid down policy on Material subsidiary and the same is placed on the website of the Company. The said policy may be accessed at the web-link <http://www.nseprimeir.com/z_ANANTRAJ/files/> POLICY%20FOR%20DETERMINING%20 MATERIAL%20SUBSIDIARIES.pdf None of the subsidiaries fall within the meaning of Material non listed Indian subsidiaries as defined in the policy adapted by the Company. 30. CONSOLIDATED FINANCIAL STATEMENTS In accordance with Accounting Standard 21 - Consolidated Financial Statements, prepared on the basis of audited financial statements received from subsidiary companies, as approved by their respective Boards, forms part of this report. 31. DIRECTORS & KEY MANAGERIAL PERSONNEL The Members of the Company at the 29th Annual General Meeting held on 30th September, 2014 had approved the appointment of Sh. Brajindar Mohan Singh, Sh. Ambarish Chatterjee and Sh. Maneesh Gupta as Independent Directors of the Company to hold office for five consecutive years with effect from the date of Annual General Meeting held on 30th September, 2014 upto 29th September, 2019. i) Retirement by Rotation In accordance with the provisions of Section 152 the Companies Act, 2013 and the Article of Association of the Company read with Companies (Appointment and Qualification of Directors) Rules, 2014 Sh. Amit Sarin (DIN: 00015837) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The details as required under Clause 49 of the Listing Agreement regarding Sh. Amit Sarin are provided in the Notice of the 30th Annual General Meeting. The Board recommends his re-appointment. ii) Appointment Ms. Priya Singh Aggarwal (DIN 00535042) had been appointed as an additional Independent woman director under section 161 of the Companies read with Companies (Appointment and Qualifications of Directors) Rules, 2014 and as per Clause 49 of the Listing Agreement. She holds office upto the date of forthcoming Annual General Meeting of the Company. The Company has received a notice under Section 160 of the Companies Act, 2013 along with a deposit of Rupees one Lac from a member proposing the appointment of Ms Priya Singh Aggarwal as an Independent woman Director of the Company, not liable to retire by rotation. Accordingly, a resolution is included in the Notice of the forthcoming 30th Annual General Meeting of the Company for seeking approval from members for her appointment as an Independent Director of the Company, not liable to retire by rotation. The details as required under Clause 49 of the Listing Agreement regarding Ms. Priya Singh Aggarwal are provided in the Notice of the 30th Annual General Meeting. The Board recommends her re-appointment. iii) Cessation of Chief Financial Officer (CFO) Your Company had appointed Mr. Yogesh Kumar Sharma as Chief Financial Officer (CFO) of the Company in compliance with Companies Act, 2013, but due to untimely demise of Sh. Yogesh Kumar Sharma who passed away on January 25, 2015, the office of Chief Financial Officer has remained vacant. Your Company is in process of appointing suitable candidate for the said vacancy. 32. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS All Independent Directors have given a declaration under section 149 (7) of Companies Act. 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Act and clause 49 of the Listing Agreement. 33. BOARD MEETINGS During the year, eleven Board meetings were held, with the gap between such Meetings not exceeding the period prescribed under Companies Act. Details of the Board and committee meetings held during the year are given in the Corporate Governance Report. The Board meeting dates were finalized in consultation with all directors and agenda papers, backed up by comprehensive notes and details background information, are circulated well in advance before the date of the meeting thereby enabling the Board to take informed decision. The Board is also apprised about the important developments in industry, segments, business operations, marketing, products etc. 34. INDEPENDENT DIRECTOR'S FAMILIARISATION PROGRAMME As per requirement under the provisions of Section 178 of the Companies Act, 2013 read with Companies (Meeting of the Board and its powers) Rules, 2014 and Listing Agreement, your Company had adopted a familiarisation programme for independent directors to familiarise them with the Company, their role, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model, management structure, industry overview, internal control system and processes, risk management framework, functioning of various divisions, HR Management, CSR activities etc. Your Company aims to provide its independent Directors, insight into the Company enabling them to contribute effectively. The details of familiarisation program may be accessed on the Company's website www.anantrajlimited.com At web link: <http://www.nseprimeir.com/z_ANANTRAJ/> files/FAMILIARISATION_PROGRAMME_FOR_ INDEPENDENT_DIRECTORS.pdf 35. EVALUATION OF BOARD, COMMITTEES AND DIRECTORS The performance evaluation of the Board, its Committees and individual directors was conducted and the same was based on questionnaire and feedback from all the directors on the Board as a whole, Committees and self -evaluation. The directors, who were designated, held separate discussions with each of the Directors of the Company and obtained their feedback on overall Board effectiveness as well as each of the other Directors. Based on questionnaire and feedback, the performance of every director was evaluated in the meeting of the Nomination and Remuneration Committee (NRC). The meeting of NRC also reviewed performance of the Chief Executive Officer (CEO) and Managing Director on goals (quantitative and qualitative) set at the beginning of the year in April 2015. A separate meeting of the independent directors ('Annual ID meeting) was convened, which reviewed the performance of the Board (as a whole), the non- independent directors and the chairman. Post of Annual ID meeting, the collective feedback of each of the independent directors was discussed by the Chairman of the NRC with the Board's Chairman covering performance of the Board as a whole performance of the non-independent directors and performance of the Board Chairman. Some of the Key criteria for performance evaluation are as follows- Performance evaluation of Directors: • Attendance at Board or Committees meetings • Contribution at Board or Committees meetings. • Guidance/support to management outside Board/Committee meetings. Performance evaluation of Board and Committees: • Degree of fulfilment of key responsibilities. • Board structure and composition. • Establishment and delineation of responsibilities to Committees. • Board culture and dynamics. • Effectives of Board process, information and functioning. • Quality of relationship between Board and Management. • Efficacy of communication with external stakeholders. 36. INTERNAL FINANCIAL CONTROL Your Company has in place an established internal control system to ensure proper recording of financial & operational information, compliance of various internal control and other regulatory/statutory compliances. All internal audit findings and control systems are periodically reviewed by the Audit Committee of the Board of Directors, which provides strategic guidance on internal control. 37. EXPLANATIONS OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS IN THEIR REPORTS There were no qualifications, reservations or adverse remarks made by the Auditors in their respective reports. 38. AUDITORS i) Statutory Auditors and their Report In compliance with the Companies (Audit and Auditors) Rules, 2014, M/s. B. Bhushan & Co, Chartered Accountants, have been appointed as Statutory Auditors of the Company till the conclusion of Annual General Meeting for the financial year 2016-17, as approved by the members at their 29th Annual General Meeting held on 30th September, 2014. Further, pursuant to the requirement of Section 139 of the Companies Act, 2013, the appointment of Statutory Auditors is to be ratified by the members at every Annual General Meeting. Members are requested to ratify their appointment for the financial year 2015-16. Your Company has received written consent and certificate from M/s. B. Bhushan & Co, Chartered Accountants, in keeping with the requirements of section 139 of Companies Act, 2013 and rules thereunder. The Notes on Financial Statements referred to in the Auditors' Report are self-explanatory and, therefore, do not call for further clarification. ii) Cost Auditors Pursuant to Section 148 of the Act, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its Construction Industry as per para no. (5) (a) as specified in Schedule VI of the Companies Act, 2013 are required to be audited by the Cost Auditors. The Board has on the recommendation of the Audit Committee, appointed M/s Kabra & Associates, Practising Cost Accountants (Firm Registration NO. 000075) to audit the cost accounts of the Company for the financial year 201516 on a remuneration of Rs. 75,000/- P.A subject to the ratification by members. iii) Secretarial Auditors Pursuant to the provisions of Section 204 of Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company has appointed Mr. Shambhu J. Bhikadia, Company Secretary in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure-VIII". There is no qualification, reservation or adverse remark in the report. iv) Internal Auditors The Board of Directors of your Company has re-appointed M/s G.K Choksi & Co. Chartered Accountants as the Internal Auditors of the Company pursuant to the provisions of Section 138 of the Companies Act, 2013 for Financial Year 2015-2016. ACKNOWLEDGEMENTS The Directors place on record their appreciation for the assistance, help and guidance provided to the Company by the Bankers and Authorities of State Government and Central Government from time to time. The Directors also place on record their gratitude to employees and shareholders of the Company for their continued support and confidence reposed in the management of the Company. By order of the Board of Directors For Anant Raj Limited Sd/- Ashok Sarin Chairman Date: August 12, 2015 Place: New Delhi |