DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the 7th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2015. DIVIDEND Since your Company has incurred loss this year, your Directors regret their inability to recommend any dividend for the year ended 31st March 2015. STATE OF COMPANY AFFAIRS Your Company is engaged in various projects through its subsidiaries and associates. The consolidated revenue of your Company for the year ended 31st March, 2015 is Rs. 72.95 Crores and Profit after Tax is Rs. 12.27 Crores which is higher than the consolidated revenue and Profit after Tax for the previous year, that is, Rs. 20.73 Crores and Rs. 7.55 Crores respectively. During the year under review, Emami Realty Limited, its wholly owned subsidiary has entered into two Joint Development Agreements for development of about 8.35 acres and about 6.17 acres at Chennai, Tamil Nadu. The construction schedule of our Project 'Emami City' is on time. SCHEME OF AMALGAMATION OF EMAMI REALTY LIMITED During the year under review, the Board of Directors has decided not to proceed further with the proposal of amalgamation of its wholly owned subsidiary "M/S Emami Realty Limited" with M/S Zandu Realty Limited and accordingly, all proceedings in connection therewith have been withdrawn. CHANGE IN NATURE OF BUSINESS, IF ANY During the year under review, there has been no change in the nature of business of the Company. MATERIAL CHANGES AND COMMITMENTS AFTER THE BALANCE SHEET DATE There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report. SUBSIDIARIES/ASSOCIATES/JOINT VENTURES As on 31st March 2015, the Company's subsidiaries, step down subsidiaries & associates are as follows: ? Emami Realty Limited (wholly-owned subsidiary) Its Subsidiaries: • Emami Constructions Private Limited (100%) • Sneha Ashiana Private Limited (100%) •Delta PV Private Limited (55%) •New Age Realty Private Limited (60%) Its Associates: • Roseview Developers Private Limited (50%) • Prajay Urban Private Limited (50%) • Bengal Emami Housing Limited (30%) ? Emami Rainbow Niketan Private Limited (wholly-owned subsidiary) Its Associate : • Zandu Realty Limited (35.51%) The Company does not have any joint venture. A Policy has been formulated for determining the Material Subsidiaries of the Company pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges. The said Policy has been posted on the Company's website at the weblink <http://www.emamirealty.com/code.php>. A statement containing the salient features of the financial statements of each of the subsidiaries & associates in the prescribed format AOC-1 is appended as "Annexure - 1" to this Report. The statement also provides details of performance and financial positions of the subsidiaries and associates. CONSOLIDATED FINANCIAL STATEMENTS In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared Consolidated Financial Statements of the Company and of all its subsidiary and associate companies, which is forming part of the Annual Report. As per the provisions of Section 136 of the Companies Act, 2013, separate audited financial statements of its subsidiaries are being placed on its website www. emamirealty.com and copy of separate audited financial statements of its subsidiaries will be provided to the shareholders on request. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The provisions of Section 186 of the Companies Act, 2013 in relation to loans or guarantee are not applicable to the Company, being an infrastructure company as defined under Schedule VI to the Act. No investment was made by the Company during the year under review. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES The Particulars of every contract or arrangements entered into by the Company with Related Parties referred to in Section 188(1) of the Companies Act, 2013 in Form AOC-2 prescribed under the Companies (Accounts) Rules, 2014 is appended as "Annexure - 2" hereto and forms part of this Report. A policy on 'Materiality of and dealing with Related Party Transactions' has been devised by the Board of Directors at its meeting held on 12th November 2014 for determining the materiality of transactions with related parties and dealings with them. The said policy may be referred to, at the Company's website at the weblink <http://www>. emamirealty.com/code.php. PUBLIC DEPOSITS The Company has not invited or accepted deposits from the public covered under Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014. AUDITORS & AUDITORS' REPORT At the Annual General Meeting held on 5th September 2014, M/S S. K. Agrawal & Co., Chartered Accountants (Firm Registration No. 306033E) were appointed as the Statutory Auditors of the Company to hold office till the conclusion of the 11th Annual General Meeting, subject to ratification by the members annually. Accordingly, appointment of M/S S. K. Agrawal & Co., Chartered Accountant, as Statutory Auditors of the Company is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. The Auditors' Report to the shareholders for the year under review does not contain any qualification. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/S MKB & Associates, Practising Company Secretaries as Secretarial Auditor of the Company. The Secretarial Audit Report for the financial year ended 31st March 2015 is annexed herewith as "Annexure - 3". The Report does not contain any qualification. DIRECTORS AND KEY MANAGERIAL PERSONNEL I. INDEPENDENT DIRECTORS (a) Appointment of Independent Directors : At the Annual General Meeting of the Company held on 5th September, 2014, the Members of the Company appointed Mr. Abhijit Datta (DIN: 00790029), Mr. Hari Mohan Marda (DIN: 00855466), Mr. Ram Gobind Ganeriwala (DIN: 00863042) and Mr. Amar Bhalotia (DIN: 00642662) as Independent Directors under the Act for a term of up to 31st March, 2019. b) Change in Directorship during the year : Mr. Amar Bhalotia resigned from the Directorship of the Company with effect from 13th February, 2015 due to personal reasons. The Board places on record their appreciation for the services and contribution made by him during his tenure. As per the provisions of Section 149(1) of the Companies Act, 2013 and revised Clause 49 of the Listing Agreement, the Company is required to have atleast one Woman Director on its Board. Keeping in view of this requirement, Mrs. Karabi Sengupta (DIN : 02534951), has been appointed as a Director of the Company with effect from 31st March, 2015 on recommendation of the Nomination and Remuneration Committee. (c) Statement on declaration given by Independent Directors under sub-section (6) of Section 149 : The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. (d) Familiarization programme undertaken for Independent Directors : The Independent Directors are familiarised with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company, etc. On appointment, the Independent Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. Each newly appointed Independent Director is taken through a formal induction program on the Company's operations, marketing, finance and other important aspects. The Company Secretary briefs the Director about their legal and regulatory responsibilities as a Director. The familiarization program is available on the Company's website under the weblink: htt p://www.emamirealty com/code.php. II. NON-INDEPENDENT DIRECTORS As per the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Girja Kumar Choudhary (DIN : 00821762) retires by rotation, and being eligible, offers himself for re-appointment. In view of his considerable experience and contribution to the Company, your Directors recommend his re-appointment. III. KEY MANAGERIAL PERSONNEL The Board of Directors at its meeting held on 30th May, 2014 approved the continuation of Mr. Girja Kumar Choudhary as the Whole-time Director & CFO and Ms. Payel Jain as the Company Secretary of the Company. MEETINGS OF BOARD OF DIRECTORS During the financial year ended 31st March, 2015, seven Board Meetings were held, details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. MEETINGS OF INDEPENDENT DIRECTORS During the year under review, a meeting of Independent Directors was held on 30th March 2015 wherein the performance of the Non-Independent Directors and the Board as a whole was reviewed. The Independent Directors at their meeting also assessed the quality, quantity and timeliness of flow of information between the Company's management and the Board of Directors of the Company. STATEMENT OF PARTICULARS OF APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL The Statement of particulars of Appointment and Remuneration of Managerial personnel as per Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as "Annexure - 4" to this Report. PARTICULARS OF EMPLOYEES None of the employees of the Company is in receipt of remuneration exceeding the limits prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Sections 134(3)(c) and 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors hereby confirm that:- (i) in the preparation of the annual accounts for the year ended 31st March, 2015, the applicable accounting standards, have been followed and there are no material departures from the same (ii) the 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 the end of the financial year and of the loss of the Company for that period; (iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and (iv) the Directors have prepared the annual accounts of the Company on a 'going concern' basis. (v) the Directors, 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) 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. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements as set out in Clause 49 of the Listing Agreement. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms an integral part of this Annual Report. MANAGEMENT DISCUSSION AND ANALYSIS Management Discussion and Analysis for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of this Annual Report. CEO/CFO CERTIFICATION As required by Clause 49 of the Listing Agreement, the CEO/ CFO certification has been submitted to the Board and a copy thereof is contained elsewhere in this Annual Report. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the nature of its business and the size and complexity of its operations. The Company's system of internal control has been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliance with regulations and for ensuring reliability of financial reporting. PERFORMANCE EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, that of its Committees and individual directors. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. The Nomination and Remuneration Committee at its meeting established the criteria based on which the Board will evaluate the performance of the Directors. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Non Independent Directors and Board as a whole was also carried out by the Independent Directors. The Directors expressed their satisfaction over the evaluation process and results thereof. AUDIT COMMITTEE The composition and terms of reference of the Audit Committee has been furnished in the Corporate Governance Report forming part of this Annual Report. There has been no instance where the Board has not accepted the recommendations of the Audit Committee. NOMINATION AND REMUNERATION COMMITTEE The composition and terms of reference of the Nomination and Remuneration Committee has been furnished in the Corporate Governance Report forming part of this Annual Report. STAKEHOLDERS' RELATIONSHIP COMMITTEE The composition and terms of reference of the Stakeholders' Relationship Committee has been furnished in the Corporate Governance Report forming part of this Annual Report. REMUNERATION POLICY The Policy of the Company on Directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Section 178(3) of Companies Act, 2013, is appended as "Annexure - 5" to this Report. WHISTLE BLOWER POLICY / VIGIL MECHANISM The Company has formed a Whistle Blower Policy / Vigil Mechanism as required under Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. A vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the Codes of conduct or policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. The said policy may be referred to, at the Company's website at the weblink: <http://www.emamirealty.com/code.php>. RISK MANAGEMENT POLICY The Company has a defined Risk Management framework to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Risk Management Policy provides for identification of risk, its assessment and procedures to minimize risk. The policy is periodically reviewed to ensure that the executive management controls the risk as per decided policy. POLICY ON PREVENTION OF SEXUAL HARASSMENT The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended 31st March, 2015, the Company has not received any complaints pertaining to Sexual Harassment. EXTRACT OF THE ANNUAL RETURN Extract of the Annual Return as on the financial year ended 31st March, 2015 in Form MGT 9 is annexed hereto as "Annexure - 6" and forms part of this report. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS There are no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. GREEN INITIATIVES IN CORPORATE GOVERNANCE Ministry of Corporate Affairs has permitted companies to send electronic copies of Annual Report, notices etc., to the e-mail IDs of shareholders. Your Company has accordingly arranged to send the soft copies of these documents to the e-mail IDs of shareholders wherever applicable. In case any shareholder would like to receive physical copies of these documents, the same shall be forwarded upon receipt of written request. PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO AS PER SECTION 134 (3)(m) OF THE COMPANIES ACT, 2013 Particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are given in the "Annexure - 7" hereto and forms part of this Report. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) As on 31st March 2015, the balance lying in Unclaimed Fractional Share Sale Proceeds Account is X 24,638.69/-which is due for transfer to the Investors Education and Protection Fund on 21st September 2017. Pursuant to the provisions of IEPF (Uploading of Information regarding Unpaid and Unclaimed Amounts lying with companies) Rules, 2012, the Company has uploaded the details of Unclaimed Fractional Share Sale Proceeds lying with the Company on its website (www.emamirealty.com), as also on the website of Ministry of Corporate Affairs. APPRECIATION Your Directors wish to extend their thanks and appreciation for the valuable and continued support received from the Shareholders, Company's Bankers, Central and State Government Authorities, Stock Exchange(s), CDSL, NSDL and all other Business Associates for the growth of the organization. Your Directors also wish to place on record their deep appreciation to all the employees for their commitment and continued contribution to the Company. For and on behalf of the Board of Directors Abhijit Datta Chairman Date : May 25, 2015 Place : Kolkata |