DIRECTORS REPORT TO THE MEMBERS, OBEROI REALTY LIMITED Your Directors have pleasure in presenting the Eighteenth Annual Report of the Company on the business and operations of the Company, together with the Audited Statement of Accounts for the year ended March 31, 2016. Nature of Business The Company is engaged in the activities of Real Estate Development and Hospitality. On the real estate development front, the Company develops residential, commercial, retail and social infrastructure projects. There was no change in nature of the business of the Company, during the year under review. Financial Performance Consolidated financials During the year under review, your Company's consolidated total revenue stood at Rs.1,44,429.60 Lakh as compared to Rs.94,015.27 Lakh for the previous year, representing an increase of 53.62%; profit before tax stood at Rs.65,450.20 Lakh for the year under review as compared to Rs.48,922.34 Lakh for the previous year representing an increase of 33.78% and profit after tax stood at Rs.42,591.20 Lakh as compared to C31,711.98 Lakh for the previous year representing an increase of 34.31%. Standalone financials During the year under review, the Total Revenue stood at C1,32,371.63 Lakh as compared to Rs.76,105.55 Lakh for the previous year representing an increase of 73.93%; profit before tax stood at Rs.65,827.55 Lakh for the year under review as compared to Rs.42,657.31 Lakh for the previous year representing an increase of 54.32% and profit after tax stood at Rs.47,546.61 Lakh as compared to Rs.30,476.99 Lakh for the previous year representing an increase of 56.01%. Report on performance and financial position of subsidiaries, associates and joint venture companies The performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended March 31, 2016 is attached to the financial statements hereto. No company has become or ceased as subsidiary, associates and joint ventures, during the year under review. Transfer to Reserves It is not proposed to transfer any amount to reserves out of the profits earned during FY2015-16. Despite macro-economic headwinds, sluggish industry volume numbers and increased costs, there is an overall improvement in business/ investment sentiment, and taking into consideration the stable performance of your Company and in recognition of the trust in the management by the members of the Company, your Directors had declared an interim dividend on the equity shares of Rs.10 each, fully paid-up, at the rate of Rs.2/- per share (i.e. 20%) for the FY2015-16. It is proposed to the members that the said interim dividend for the FY2015-16 as declared by the Board of Directors shall be confirmed as the final dividend for the said financial year. Deposits During the year under review, your Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as 'Deposits' in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable. Disclosures under Section 134(3)(l) of the Companies Act, 2013 Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position, have occurred between the end of the financial year of the Company and date of this report. Internal Financial Controls The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls. Internal Control Systems Adequate internal control systems commensurate with the nature of the company's business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected. Disclosure of orders passed by regulators or courts or tribunal No significant and material orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Company's operations in future. Particulars of contracts or arrangements with related parties All the transactions/contracts/arrangements of the nature as specified in Section 188(1) of the Companies Act, 2013 entered by the Company during the year under review with related party(ies) are in the ordinary course of business and on arms' length basis. Hence, Section 188(1) is not applicable and consequently no particulars in form AOC-2 are furnished. Particulars of loans, guarantees, investments under Section 186 The particulars of loans, guarantees and investments given/ made during the financial year under review and governed by the provisions of Section 186 of the Companies Act, 2013 has been furnished in Annexure I, which forms part of this report. Disclosure relating to equity shares with differential rights The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. Disclosure relating to sweat equity shares The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished. Disclosure relating to Employee Stock Option Scheme and Employee Stock Purchase Scheme During the year under review, the employee stock options vested in Option Grantees on May 4, 2012 expired on May 4, 2015 for non exercise within the Exercise Period. Further, during the year under review, certain Option Grantees have exercised 65,876 options vested in them. In compliance with the provisions of Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 and SEBI (Employee Share Based Employee Benefits) Regulations, 2014, the details of Employee Stock Option Scheme as on March 31, 2016 is furnished in Annexure II attached herewith and forms part of this Report. Preferential Allotment of Shares During the year under review, the Company made an allotment on preferential basis, of 1,10,00,000 equity shares of face value of Rs.10 each (the "Equity Shares"), at a price of Rs.295 per Equity Share aggregating up to Rs.324.50 Crore (Rupees Three Hundred Twenty Four Crores and Fifty Lakh only). As a conséquence of the ESOP and preferential allotments, the equity share capital has increased from Rs.3,28,23,79,690 to Rs.3,39,30,38,450. All the new Equity shares so allotted rank pari-passu in all respect with the existing Equity shares. Disclosures in respect of voting rights not directly exercised by employées There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished. Matters Related to Directors and Key Managerial Personnel Board of Directors and Key Managerial Personnel There was no change in the composition of Board of Directors and the Key Managerial Personnel during the year under review. Mr. Karamjit Singh Kalsi, who was appointed as an Additional Director in September 2014, was appointed as a Director of the Company in the last Annual General Meeting. Declarations by Independent Directors Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors confirming that they fulfill the criteria of independence as specified in Section 149(6) of the Companies Act, 2013. Disclosures Related to Board, Committees and Policies Board Meetings The Board of Directors met 6 times during the financial year ended March 31, 2016 in accordance with the provisions of the Companies Act, 2013 and rules made there under. All the Directors actively participated in the meetings and provided their valuable inputs on the matters brought before the Board of Directors from time to time. Additionally, during the financial year ended March 31, 2016 the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and the provisions of (erstwhile) Listing Agreement and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. Director's Responsibility Statement In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended March 31, 2016, the Board of Directors hereby confirms that: a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, wherever applicable; b. such accounting policies have been selected and applied consistently and the Directors 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 of the profits of the Company for the year ended on that date; c. proper and sufficient care was taken 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; d. the annual accounts of the Company have been prepared on a going concern basis; e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively; f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Nomination and Remuneration Committee A Nomination and Remuneration Committee is in existence in accordance with the provisions of subsection (3) of Section 178 of the Companies Act, 2013. Kindly refer section on Corporate Governance, under head 'Nomination, Remuneration, Compensation and Management Development Committee' for matters relating to constitution, meetings, functions of the Committee and the remuneration policy formulated by this Committee. Audit Committee An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer section on Corporate Governance, under head 'Audit Committee' for matters relating to constitution, meetings and functions of the Committee. Corporate Social Responsibility Committee As per the provisions of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee constituted by the Board of Directors exits. For details of the composition of the Committee, the CSR policy and other relevant details that are required to be disclosed under the provisions of Section 134(3)(o) of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, kindly refer Annexure III thereto, which forms part of this report. Other Board Committees For details of other board committees, kindly refer the section on Corporate Governance. Vigil Mechanism for the Directors and Employees In compliance with the provisions of Section 177(9) of the Companies Act, 2013, the Board of Directors of the Company has framed the "Whistle Blower Policy" as the vigil mechanism for Directors and employees of the Company. The Whistle Blower Policy is disclosed on the website of the Company at <http://www.oberoirealty.com/pdf/2015/> Whistle_Blower_Policy.pdf Fraud Reporting During the year under review, no instances of fraud were reported by the Statutory Auditors of the Company. Risk Management Policy The Board of Directors of the Company has in place a Risk Management Policy which aims at enhancing shareholders' value and providing an optimum risk-reward tradeoff. The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures. Annual Evaluation of Directors, Committee and Board The Nomination and Remuneration Committee of the Board has formulated a Performance Evaluation Framework, under which the Committee has identified criteria upon which every Director shall be evaluated. Similarly, the framework provides the manner in which the Directors as a collective unit in the form of Board Committees and the Board function and perform. Particulars of Employees and Remuneration The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure IV hereto which forms part of this report. Payment of remuneration / commission to Managerial personnel from holding or subsidiary companies: None of the managerial personnel i.e. Managing Director and Whole Time Director of the Company is in receipt of remuneration/commission from the holding or subsidiary company of the Company. Auditors and their Reports The matters related to Auditors and their Reports are as under: Observations of statutory auditors on accounts for the year ended March 31, 2016: The auditor's report does not contain any qualification, reservation or adverse remark or disclaimer. Secretarial Audit report for the year ended March 31, 2016: As required under provisions of Section 204 of the Companies Act, 2013, the report in respect of the Secretarial Audit carried out by M/s. Rathi and AssociatesCompany Secretaries in Form MR-3 for the FY2015-16 forms part to this report. The said report does not contain any adverse observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. Statutory Auditors appointment: Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. P. Raj & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office upto the conclusion of the Nineteenth (19th) Annual General Meeting. However, their appointment as Statutory Auditors of the Company is subject to ratification by the Members at every Annual General Meeting. The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members. Cost Auditors: Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with notifications/ circulars issued by the Ministry of Corporate Affairs from time to time and as per the recommendation of the Audit Committee, the Board of Directors at their meeting dated April 30, 2015, appointed M/s. Kishore Bhatia & Associates, Cost Accountants, as the Cost Auditors of the Company for FY2015-16. The Cost Audit Report will be filed within the period stipulated under the Companies Act, 2013. In respect of FY2016-17, the Board based on the recommendation of the Audit Committee has approved the appointment of M/s. Kishore Bhatia & Associates, Cost Accountants as the Cost Auditors of the Company. A resolution for ratification of the payment to be made for such appointment is included in the notice of the ensuing Annual General Meeting. Other Disclosures Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under: Extract of Annual Return: Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, Extract of the Annual Return for the financial year ended March 31, 2016 made under the provisions of Section 92(3) of the Act is attached as Annexure V which forms part of this Report. Conservation of energy, technology absorption and foreign exchange earnings and outgo: The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the Company during the year under review. Unclaimed Shares Out of the Equity Shares allotted to the successful applicants in the IPO concluded in the month of October 2010, 200 unclaimed Equity Shares are pending for credit to the demat accounts of the respective allottees, which shares stands transferred to the unclaimed shares demat suspense account in accordance with the requirements of (erstwhile) Listing Agreement and SEBI (Listing Obligations And Disclosure Requirements) Regulations, 2015. Unclaimed and Unpaid Dividends As on March 31, 2016, amounts of C15,239, C19,080, C39,536, C40,294 and C59,084 are lying in the unpaid equity dividend account of the Company in respect of the dividends for FY2010-11, FY2011-12, FY2012-13, FY2013-14 and FY2014-15 respectively. Members who have not yet received/ claimed their dividend entitlements are requested to contact the Company or the Registrar and Transfer Agents of the Company. Service of documents through electronic means All documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or are otherwise provided by the members. A member shall be entitled to request for physical copy of any such documents. Internal Complaint Committee The Internal Complaint Committee ('ICC') of the Company as required under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 was reconstituted during the year under review with Ms. Rochelle Chatterjee, Ms. Shilpa Chandorkar, Ms. Rakhee Desai and Mr. Ketan Raikar as the employee members. The Company is strongly opposed to sexual harassment and employees are made aware about the consequences of such acts and about the constitution of ICC. During the year under review, no complaints were filed with the Committee under the provisions of the said Act. Corporate Governance The report on Corporate Governance and the certificate from the Statutory Auditors regarding compliance with the conditions of Corporate Governance have been furnished in the Annual Report and forms a part of the Annual Report. Management Discussion and Analysis Report The Management Discussion and Analysis report has been separately furnished in the Annual Report and forms a part of the Annual Report. Acknowledgements and Appreciation: Your Directors take this opportunity to thank the employees, customers, suppliers, bankers, business partners/associates, financial institutions and various regulatory authorities for their consistent support/ encouragement to the Company. Your Directors would also like to thank the Members for reposing their confidence and faith in the Company and its Management. For and on behalf of the Board Vikas Oberoi Chairman & Managing Director DIN:00011701 Place : Mumbai, date : April 29, 2016 Registered Office Oberoi Realty Limited Commerz, 3rd Floor, International Business Park, Oberoi Garden City, Off Western Express Highway, Goregaon (East), Mumbai - 400 063 CIN:L45200MH1998PLC114818 Telephone No. : +91 22 6677 3333 Fax No. : +91 22 6677 3334 Mail : cs@oberoirealty.com Website : www.oberoirealty.com |