Directors' Report To The Members, Sunteck Realty Limited Your Directors have the pleasure of presenting the 32nd Annual Report of the Company on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March 2015 DIVIDEND Your Directors are pleased to recommend a final dividend of 50% i.e. Rs. 1.00/- per Equity share on 16,695,142 Equity Shares of Rs. 2/- each held by persons/entities other than Promoters amounting to Rs. 1,66,95,142/- (Rupees One Crore Sixty Six Lakhs Ninety Five Thousand One Hundred and Forty Two Only) out of the profits of the Company for the financial year 2014-15 for the approval of shareholders. The promoters of your Company have voluntarily and irrevocably waived their entitlement to receive the said Final Dividend on equity shares TRANSFER TO RESERVES Your Directors do not propose to transfer any amount to reserves out of the profits earned during FY 2014-15. 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, 2015 is attached to the financial statements hereto in form AOC-1. During the FY 2014-15 the Company acquired 100% stake in Starteck Lifestyle Pvt Ltd. Further the Company acquired 100% control in Advaith Infraprojects Pvt Ltd and its subsidiary Satguru Corporate Services Pvt Ltd which holds 16 acres land parcel in Goregaon (W). The Company through its subsidiary has entered in a 50:50 Joint Venture in UAE viz. GGICO Sunteck Limited. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL In compliance with provisions of section 149 of the Companies Act, 2013 read with revised clause 49 of the listing agreement, the Board of Directors of the Company has appointed existing Independent Directors viz. Mr. Sanjay Dutt, Mr. Ramakant Nayak, Mr. Kishore Vussonji and Mr. Mahadevan Kalahasthi as Independent Director each for a consecutive term of 2 years with effect from 22nd September, 2014. Mrs. Rachana Hingarajia, Company Secretary of the Company is appointed as Additional Director, during FY 2014-15. Your Director recommends her appointment as Director in the forthcoming AGM of the Company. The Board of Directors on recommendation of Nomination and remuneration Committee & Audit Committee has appointed Mr. Sumesh Mishra as Chief Operating Officer (COO) of the Company. Mr. Jignesh Sanghavi, Director of the Company retires by rotation at the ensuing Annual General Meeting. The board recommends his re-appointment. Declarations by Independent Directors All Independent Directors have given declarations 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. DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES Board Meetings The Board of Directors met 4 times during the financial year ended March 31, 2015 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. All the Directors actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time. Additionally, during the financial year ended March 31, 2015, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and Clause 49(II)(B)(6) of the Listing Agreement. 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, 2015, 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; 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 on March 31, 2015 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. Kindly refer section on Corporate Governance, under the head, 'Nomination and Remuneration 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 to the section on Corporate Governance, under the 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, the Board of Directors has constituted a Corporate Social Responsibility (CSR) Committee. The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Company's website at the link www.sunteckindia.com As part of its initiatives under "Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of Education, Livelihood, Health, Water and Sanitation. These projects are largely in accordance with Schedule VII of the Companies Act, 2013. For details of the composition of the Committee, the CSR policy and other relevant details that are required to be disclosed under the provisions Section 134(3)(o) of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, kindly refer to Annexure I hereto, which forms part of this report. Other Board Committees For details of other board committees viz. Stakeholders Relationship Committee and others, kindly refer to the section on Corporate Governance. Vigil Mechanism for the Directors and Employees In compliance with provisions of section 177(9) of the Companies Act, 2013 read with revised clause 49 of the listing agreement, your Company has adopted whistle blower policy for Directors and employees to report genuine concerns to the management of the Company. The whistle blower policy of the Company is posted on the website of the Company and may be accessed at www.sunteckindia.com . Risk Management The Company's management systems, organisational structures, processes, standards, code of conduct and behaviors together form the system that governs how the Group conducts the business of the Company and manages associated risks. The approach is based on a clear understanding of the variety of risks that the organisation faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures. Annual Evaluation of Directors, Committee and Board The Evaluation process provides the manner in which the performance of Directors, as a collective body in the form of Board Committees and the Board functions and perform. The overall performance of the Board was satisfactory. Particulars of 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 MGT 9 attached hereto, which forms part of this report. During the FY 14-15, there were 3 persons employed, for a part of the financial year who were in receipt of remuneration of not less than Rs. 5 lacs p.m. As on 31st March, 2015, there were total 191 permanent employees. However, in accordance with the provisions contained in the proviso to Section 136(1) of the Companies Act, 2013, the particulars relating to other employees of the Company are not being sent as a part of this Annual Report. Any Member interested in obtaining a copy of the same may write to the Company Secretary at the registered office of the Company. PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS Details of Loans to subsidiaries are given at note no 11 in the Financial Statements. No Loans /guarantees have been provided to Related Parties other than subsidiaries, Joint Ventures, LLPs or associate Companies referred to in note no. 11. Loans to other body corporate given by the Company is in the ordinary course of Business and on arms length basis. PARTICULARS OF CONTRACTS OR ARRANGEMENT 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 There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large and consequently no particulars in form AOC-2 have been furnished. The Policy on related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.sunteckindia.com 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 the date of this report. INTERNAL FINANCIAL CONTROLS The Company has adequate Internal Financial Controls in place with reference to financial statements. These are continually reviewed by the Company to strengthen the same wherever required. The internal control systems are supplemented by Internal Audit carried out by independent firm of Chartered Accountants and periodical review by management. In compliance with the provisions of section 138 of the Companies Act, 2013 read with Rule 13 Of Companies (Accounts) Rules, 2014, M/S KPMG is appointed as Internal Auditor of the Company. POSTAL BALLOT FOR OBTAINING APPROVAL OF MEMBERS The Company conducted a Postal Ballot during the period under review to seek approval of the Members by way of special resolutions under section 391 to 394 read with Sections 100 to 103 of Companies Act, 1956 for approval of Scheme of Arrangement between Sanchit Derivatives Private Limited and Sunteck Realty Limited and for further issue of capital under section 62(1)(c) of the Companies Act 2013, which were duly passed and approved by the members of the Company with requisite majority on 11th July, 2014. DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL The Company received High Court Order dated 19th December 2014 in connection with the Scheme of Arrangement of Sanchit Derivatives Private Limited with Sunteck Realty Limited and their respective shareholders. The scheme is effective from 14th February 2015. DISCLOSURE RELATING TO EMPLOYEE STOCK OPTION SCHEME 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 Employees Stock Option Scheme as on March 31, 2015 is furnished in Annexure II attached herewith and forms part of this Report. DISCLOSURES IN RESPECT OF VOTING RIGHTS NOT DIRECTLY EXERCISED BY EMPLOYEES 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. STATUTORY AUDIT AND AUDITORS' REPORT Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Lodha & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment for consecutive second terms of 5 years commencing from the conclusion of this AGM. 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 re-appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members. Observations of statutory auditors on accounts for the year ended March 31, 2015: The auditor's report does not contain any qualification, reservation or adverse remark or Disclaimer. SECRETARIAL AUDIT As required under provisions of Section 204 of the Companies Act, 2013, the report in respect of the Secretarial Audit carried out by Veeraraghavan N., Company Secretary in practice in Form MR-3 for the FY2014-15 forms part to this report. In respect of the observation made by the auditor in the report, Directors would like to state that the Company is in process of appointing CFO of the Company. COST AUDIT In compliance with provisions of section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2011, the Company being engaged in the business of construction and development, has duly maintained the cost records for the financial year 2014-15. However, requirement of cost audit under the said rules is not applicable to the Company. 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, 2015 made under the provisions of Section 92(3) of the Act is attached as form MGT -9 (Annexure III) which forms part of this Report. Conservation of energy, technology absorption and foreign exchange earnings and outgo: Considering the nature of activities the Company is engaged into the Company is not required to furnish information 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. The details of foreign exchange earnings and outgo during the year under review is as below: i) Foreign Exchange Earned: Rs. 9,06,84,560/- ii) Foreign Exchange Outflow: Rs.19,77,135/- Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to deposits covered under Chapter V of the Act. 2. Issue of equity shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals save and except referred to in this Report which impact the going concern status and Company's operations in future. Your Directors further state that 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. 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. 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 form 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. ACKNOWLEDGEMENT AND APPRECIATION: Your Directors would like to express their sincere appreciation and gratitude for the co-operation and assistance from its shareholders, bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the contribution and commitment made by every member of the Sunteck Family. On behalf of the Board of Directors Kamal Khetan Chairman & Managing Director Mumbai 26th May, 2015 |