DIRECTORS' REPORT Dear Shareholders Your Directors have pleasure in presenting the 21st Annual Report of the Company together with the Audited Accounts for the year ended March 31, 2015. Results of operations and state of Company's affairs The total income of the Company for the year ended as on March 31, 2015 is Rs. 2233.15 lacs which is higher by about 6.90 % over that for the previous year which was Rs. 2089.07 lacs, on account of considerable progress in various projects and due recognition of the accrued income in accordance with the accounting standard in force, resulting in pre-tax profit of Rs. 512.73 lacs for the year as against the pre-tax loss of Rs. 317.22 lacs for the preceding year. No material changes and commitments have occurred after the close of the year till date of this report which affects the financial position of the Company. Business The Company is engaged in Real Estate business, construction of residential complexes in the National Capital Region (NCR). It has acquired plots of land on long term lease, under Builders Residential Scheme (BRS) of the Greater Noida Industrial Development Authority (GNIDA). Apart from constructing its own project, the Company is also engaged in construction of residential flats through Special Purpose Vehicles (SPVs) and these SPVs have been allotted plots of land on long term lease, under Builders Residential Scheme (BRS) of the New Okhala Industrial Development Authority (NOIDA) and Yamuna Expressway Authority (YEA). The total lease hold area allotted to the Company alongwith SPVs is around 2,65,000 sq. meters and the projects are under various stages of construction. Project developed by the Company: Express Park View I (EPV): The Project Express Park View, developed by the Company, was completed and the final closure and revenue recognition was concluded in the first quarter of the current financial year. The towers built, were offered for possession, as soon as they were ready, and we are happy to state that a number of buyers have taken possession and some of them have started residing in the flats. Projects being developed by the Company alongwith SPVs: 1) The Hyde Park 2) The Golden Palms 3) Express Park View-II & 4) The Golden Palm Village Transfer to Reserves: During the year under review, there is no transfer to reserves. Dividend In view of the losses incurred by the Company, no dividend has been proposed for the year ended March 31, 2015. Management Discussion and Analysis The Management Discussion and Analysis Report, forming part of this report, as required under Clause 49(VIII)(D) of the Listing Agreement with the Stock Exchange, is attached separately in this Annual Report. Statement containing salient features of Joint Venture/ Associate Companies Pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient features of the financial statement of a company's associate and joint ventures is given as Annexure 2. Internal financial controls The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year, such controls and tested and no reportable material weakness in the design or operation were observed. Directors and Key Managerial Personnel The Board of Directors on the recommendation of the Nomination and Remuneration Committee in its meeting held on March 30, 2015 had appointed Mrs. Beroz Rumie Gazdar as an Additional Director in the category of Independent Woman Director with effect from March 30, 2015. We seek your confirmation for appointment of Mrs. Beroz Rumie Gazdar as an Independent Director for a term upto five consecutive years with effect from September 16, 2015 up to the 26th Annual General Meeting of the Company to be held in 2020 for the year ended March 31, 2020. The Company has received Notice in writing from a Member alongwith the deposit of the requisite amount under Section 160 of the Companies Act, 2013 proposing the candidature of Mrs. Beroz Rumie Gazdar for the office of Independent Director of the Company. Mr. D.P.Goyal was appointed as Managing Director of the Company for a period of 2 years w.e.f. July 05, 2014 to July 04, 2016. The Nomination and Remuneration Committee in its meeting held on August 04, 2015 has recommended his appointment for a further period upto September 30, 2017 w.e.f. July 05, 2016. The Board in its meeting held on even date has granted its approval for the re-appointment of Mr. D.P.Goyal as Managing Director of the Company for a further upto September 30, 2017 subject to the approval of the members at the ensuing Annual General Meeting and subject to any other approval as required by Law. Mr. Bipin Agarwal, Director retires by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. At the Board Meeting held on May 19, 2014, Mr. D.P. Goyal, Managing Director, Ms. Reena Shah, Company Secretary & Compliance Officer were designated as "Key Managerial Personnel" of the Company, pursuant to Sections 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Familarisation Programme The Company has formulated a Familiarisation Programme for Independent Directors with an aim to familiarize the Independent Directors 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., to provide them with better understanding of the business and operations of the Company and so as to enable them to contribute significantly to the Company The details of programmes for familiarization of Independent Directors with the Company are put up on the website of the Company under the web link <http://www.iitlprojects.com/AboutUs>. aspx Meetings of the Board During the year, five meetings of the Board of Directors were held. For further details, please refer Report on Corporate Governance. Directors' Responsibility Statement Pursuant to Section 134(3)(C) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief, make following statements that: (a) In preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; (b) Such accounting policies have been selected 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 March 31, 2015 and profit of the Company for the year ended on that date; (c) Proper and sufficient care has been 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 have been prepared on a going concern basis; (e) The proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively; (f) The systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. Corporate Governance Your Company has been practising the principles of good Corporate Governance over the years and it is a continuous and ongoing process. A details Report on Corporate Governance practices followed by your Company, in terms of Clause 49 of the Listing Agreement together with a Certificate from the Auditors confirming compliance with the conditions of Corporate Governance are provided separately in this Annual Report. Declaration by Independent Directors The Company has received declarations from all the Independent Directors of the Company, confirming that, they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchange. Nomination and Remuneration policy The Board of the Directors has framed the policy which lays down a framework in relation to Remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The Nomination and Remuneration Policy is annexed at the end of the Corporate Governance Report. Secretarial Audit Pursuant to Provision of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed M/s. Chandanbala Jain & Associates, Practicing Company Secretary (CP No. 6400), to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is included as Annexure 5 and forms an integral part of 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. Particulars of Loans given, Investments made, Guarantees given and Securities provided The details of loans given, investments made, guarantees given and securities provided are given in the Notes to the Financial Statements. Conservation of energy, technology absorption, foreign exchange earnings and outgo: The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows: (A) Conservation of energy: Not Applicable (B) Technology absorption: Not Applicable (C) Foreign exchange earnings and Outgo: Not Applicable Risk Management The Company has formulated a Risk Management Policy. The Company through the Committee for Risk Management identifies, evaluates, analyses and prioritise risks in order to address and minimize such risks. This exercise facilitates identifying high level risks and implement appropriate solutions for minimizing the impact of such risks on the business of the Company. The Committee submits its recommendations and comments for Board's review and necessary action. Corporate Social Responsibility (CSR) The Corporate Social Responsibility 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 is disclosed on the Company's website <http://> www.iitlprojects.com/AboutUs.aspx The report on CSR activities is attached as Annexure 4 to this Report. Vigil Mechanism / Whistle Blower Policy The Company has a Vigil Mechanism / Whistle Blower Policy to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the company's code of conduct. The details of the Vigil Mechanism policy have been provided in the Corporate Governance Report and also disclosed on the website of the Company viz . Board Evaluation: Pursuant to the provision of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Company has devised the policy for performance evaluation of the Independent Directors, Board, Committees and other individual Directors, which includes criteria for performance evaluation of non-executive directors and executive directors. The evaluation of all the directors and Board as a whole was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in Corporate Governance Report section in this Annual Report. The Board approved the evaluation results as collated by the nomination and remuneration committee. Extract of Annual Return Pursuant to section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of annual return is Annexed as Annexure 1. Audit At the Annual General Meeting held on August 30, 2014, M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No.117365W), were appointed as statutory auditors of the Company to hold office till the conclusion of 24th Annual General Meeting. However, their appointment as Statutory Auditors of the Company is subject to ratification by the Members at every Annual General Meeting. Accordingly, the appointment of M/s. Deloitte Haskins & Sells, Chartered Accountants, as statutory auditors of the Company, is place for ratification by the Members. In this regard, the Company has received a certificate from the auditors to the effect that, if they are appointed, it would be in accordance with the provision of section 141 of the Companies Act, 2013. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of Annual General Meeting for seeking approval of members. There are no qualifications or adverse remarks in the Auditors' Report which require any clarification or explanation. Related Party Transactions The company has laid down a Related Party Transactions Policy for purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's weblink viz. <http://www.iitlprojects>. com/AboutUs.aspx. All Related Party Transactions are placed before the Audit Committee and also the Members/Board for their approval, wherever necessary. During the year there were no new Related Party Transactions. However, a NIL statement is annexed herewith as Annexure 3 in the prescribed form AOC-2. None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company. Significant and material orders passed by the regulators During the period under review, there were no significant and material orders passed by the regulators/ courts or tribunals that would impact going concern status of the Company and its future operations. Particulars of Employees and related disclosures A) Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 1) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2014-15, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2014-15 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under Notes: 2) The remuneration to Directors includes sitting fees paid to them for the financial year 2014-15. The sitting fees were increased from Rs. 15, 000 to Rs. 20,000 for attending each Meeting of the Board and Committee. 3) The Median remuneration of employees of the Company during the financial year 2014-15 was Rs. 4.66 lakh 4) In the financial year, there was an increase of 1% in the median remuneration of employees; 5) There were 11 permanent employees on the rolls of Company as on March 31, 2015; 6) Relationship between average increase in remuneration and Company performance: - The Profit before tax for the financial year ended March 31, 2015 increased by 261.64% whereas the increase in median remuneration was 1%. 7) Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company: The total remuneration of Key Managerial Personnel increased by 2.8 % from Rs. 30.81 lakh to Rs. 31.66 lakh in 201415 whereas the Profit before Tax increased by 261.64% to Rs. 512.73 lakh in 2014-15 (Loss of Rs. 317.22 lakh in 2013-14). 8) a) Variation in market capitalization of the Company : The market capitalization as on March 31, 2015 was Rs. 1023.13 lakh (Rs. 531.53 lakh as on March 31, 2014) b) Price Earnings ratio of the Company was 2.90 as at March 31, 2015 and was (1.29) as at March 31, 2014 c) Percentage increase over/decrease in market quotations of the shares of the Company as compared to rate at which the Company came out with the last public offer in the year - The closing price of the Company's equity shares on the BSE as on March 31, 2015 was Rs. 20.5, representing a 105% increase over the IPO price. 9*) Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year i.e 2014-15 was 2.9% whereas the increase in managerial remuneration for the same financial year was 2.8%. *Only employees other than KMP i.e. WTD / CFO / CS and who were employees in both the years i.e. 2014 and 2015 have been considered. 10) The key parameters for the variable components of remuneration availed by the directors are considered by the Board of Directors based on the recommendation of the Nomination and Remuneration Committee as per the Remuneration Policy for Directors, key Managerial Personnel and Senior Management. 11) The ratio of the remuneration of the highest paid director to that of the employees who are not director but receive remuneration in excess of the highest paid director during the year - Not Applicable; and 12) Pursuant to Rule 5(1)(xii) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014, it is affirmed that the remuneration paid to the Directors, Key Managerial Personnel and senior management is as per the Remuneration Policy of the Company. B) Details of every employee of the Company as required pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014: During the year under consideration, none of the employees of the company was in receipt of remuneration in excess of limits prescribed under clause 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence particulars as required under 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 have not been provided. Public Deposits During the year under review, the Company has not accepted any deposits from the public. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013: The Company has in place Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2014-2015: • No. of complaints received- Nil • No. of complaints disposed off - Nil Acknowledgement Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company. Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support. Your Directors also thank the Central and State Governments, and other statutory authorities for their continued support. For and on behalf of the Board IITL Projects Limited D.P.Goyal Managing Director (DIN: 03132505) Date : August 04, 2015 Place : Mumbai, |