AFFLUENCE

The Directors are pleased to present the Tenth Annual report together with the Audited Accounts for the year ended March 31, 2016.

1) Subsidiaries

As on March 31, 2016, the Company has 15 Subsidiaries including step down subsidiaries, out of which two Indian subsidiaries have applied for strike off under Fast Track Exit Scheme prescribed by the Ministry of Corporate Affairs.

In terms of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules 2014, a separate statement containing the salient features of the financial statement of the subsidiaries is enclosed as Annexure A.

a) Key Subsidiary updates:

• The Company through its wholly owned subsidiary, Bellona Estate Developers Ltd., is developing mall in Neotown, Bangalore. The mall structure is 76% completed. The gross leasable area is about 11.25 lacs sq.ft. and about 51% of the leasable area has already been leased out. During the year, there is no construction activity at the site due to non-availability of funds.

The Joint Lenders Forum (JLF) of the Bellona Estate Developers Ltd., wholly owned Subsidiary of Patel Realty (India) Ltd. (PRIL),have invoked Strategic Debt Restructuring (SDR) on October 29, 2015 in terms of the RBI Circular No. RBI/2014-15/627, dated June 8, 2015 and the Equity Shares of Bellona are allotted to the Lenders Viz. Union Bank of India, Vijaya Bank and Syndicate Bank in the proportion of their Loan oustanding as on October 29, 2015 being the reference date for SDR. The shareholding of PRIL in Bellona reduced by 49% and lenders acquired 51% stake in Bellona, w.e.f March 30, 2016.

Further the JLF has decided to sell the mall on as is where is basis and for the same, they have appointed Jones Lang LaSalle (JLL) as a Consultant to run the sale process.

• PBSR Developers Pvt. Ltd., 100% subsidiary of the Company, is developing residential Project at Gachibowli, Hyderabad named as Smondo-Gachibowli on 4 acres of land comprising of 2 residential towers and a service apartment. The project is meticulously crafted and offers a unique blend of smart design and superior quality. The Company has got all the approvals and commenced construction activity.

• The Company’s Mauritius subsidiary, Les Salines Development Ltd., has received termination notice from the government of Mauritius terminating the Land lease agreementfor developing integrated waterfront project namely Neotown Port Louis. In terms of this agreement, the Company is eligible for compensation for all improvement made on the land. The lease of landwas granted to the Mauritian subsidiary in the year 2009 and the Company has been carrying on the development of land as per the master plan approved by the Government. The details of compensation are being worked for submission.

2) Evaluation of Board’s performance:

In compliance with the Companies Act, 2013, the Company has a formal mechanism for evaluating its performance as well as that of its Committees and individual Director(s) of the Board. The evaluation of Independent Director was carried out by the Board and that of the Non-Independent Directors were carried out by the Independent Director.

3) Audit Committee:

The Audit committee consists of twoindependent directors and one Non-executive director. The present members of the Committee are:

1. Mr. Khizer Ahmed (Chairman)– Independent Director
2. Mr. K Ramasubramanian – Independent Director
3. Mr. Rupen Patel – Non Executive Director

The Committee’s composition meets with requirements of Section 177 of the Companies Act, 2013.The Committee’s role, terms of reference, the authority and the power of Chairman are in conformity with the requirements of the Companies Act, 2013.

The audit committee met periodically during the year.

4) Auditors:

i) Statutory Auditors:

The Auditors, M/s. Khimji Kunverji & Co., Chartered Accountants, Mumbai bearing ICAI Registration No.105146W, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment. However, M/s. Khimji Kunverji & Co. have expressed their unwillingness to be re-appointed. Members are requested to appoint M/s. R.S. Parekh & Co. (FRN:136400W) as Statutory Auditors for the financial year 2016-17 and authorize the Board of Directors to fix their remuneration.

As required under Section 139 of the Companies Act, 2013, the Company has obtained written consent from M/s. R.S. Parekh & Co. to the effect that their reappointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder, as may be applicable.

ii) Secretarial Auditor:
Pursuance to provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s.Makarand M Joshi & Co., Company Secretaries, Mumbai were appointed to conduct the Secretarial Audit of the Company for the financial year 2015-16.

The Secretarial Audit report for the financial year 2015-16 is annexed to this report as Annexure C. This report contains an observation on non-appointment of Managing Director or Chief Executive Officer or Manager and Chief Financial Officer as required under section 203 of the Companies Act, 2013.The Company is in the process of identifying suitable candidates for appointment for the post of CEO / CFO and comply with the provisions of the Act in the financial year 2016-17.
The report also contains an observation that the Company has made delay in filing APR by one day in one instance, which is noted by the Board.

iii) Cost Auditors
Pursuant to provisions of Section 148 of the Companies Act, 2013, read with the Companies (cost records and audit) Rules, 2014, M/s. Shailaja Balamurali & Co., Practicing Cost Accountants, Mumbai (Firm Registration No.01379) was appointed as Cost Auditors of the Company for the financial year 2015-16 by the Board of Directors of the company at a remuneration of Rs.60,000 (excluding service tax) as recommended by the Audit Committee and approved by the Board subject to ratification by the shareholders at the ensuring Annual General meeting of the company.

Auditors’ Report:

The Statutory Auditors of the Company have made qualifications with reference to the Non Appointment of Key Managerial Personnel and the company is taking steps towards appointing suitable persons for the positions. Another Qualification is with reference to the lack of confirmations from some of the Trade Payables/Advances/Deposits given. The company has got major confirmations and is making efforts to get confirmations from all of the creditors in the current financial year. The Auditors have laid emphasis on certain matters like SDR scheme of Subsidiary Bellona and the recoverability of the Loans given to subsidiary. Emphasis also has been made with reference to the Investment made in Waterfront and Termination of the Lease with the Mauritius Company. The points raised in the emphasis of matter have been noted by the Board.

5) Sexual harassment of Women at workplace

The Company has framed a Policy on Prevention of Sexual harassment at workplace. There were no cases reported during the year ended March 31, 2016 under this policy.

6) Vigil Mechanism:

The Company has established a system of Vigil Mechanism for the employees to report genuine concerns/grievances. The policy is uploaded on the Company’s website. Protected disclosures can be made by a Whistle blower through accepted modes of channel to the designated authority and the policy provides for adequate safeguards against victimization of the employees who use the vigil mechanism. The vigil mechanism is overseen by the Audit Committee.There are no complaints / grievances received from any Directors or employees of the Company under this policy.

7) Acknowledgement:

The Directors acknowledge and thank the Parent Company and its Shareholders, Bankers, Business Associates, Vendors, Suppliers, Government Authorities and Customers for their support and co-operation. The Directors also wish to place on record their appreciation for the valuable contribution made by the employees of the Company.

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company. However, Conservation of energy continues to be one of the important objectives of the Company and all possible efforts have been made to minimize its consumption. The Company has made all possible efforts to absorb the technology to its fullest capacity.

The provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company. However, Conservation of energy continues to be one of the important objectives of the Company and all possible efforts have been made to minimize its consumption. The Company has made all possible efforts to absorb the technology to its fullest capacity.