DIRECTORS' REPORT Dear shareholder Your Directors have pleasure in presenting the 96th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2015. STATE OF COMPANY AFFAIRS In respect of Company's Project, "Zandu Sigma Estate" at Dadar, Mumbai, the Company has received Occupancy Certificate for Building 1A & 2. As on 31st March, 2015, your Company has been able to sell around 81% of its Units in the said Project. 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of "M/S Emami Realty Limited" with itself and accordingly, all proceedings in connection therewith have been withdrawn.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 this report. SUBSIDIARIES/ASSOCIATE/JOINT VENTURE Your Company does not have any subsidiary, associate or joint venture. 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. Details of investments covered under Section 186 of the Act form part of the Notes to the Financial Statements provided in this Annual Report. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES There are no contracts or arrangements entered into by the Company with Related Parties referred to in Section 188(1) of the Companies Act, 2013. 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/> policy_zandu.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 The Board, on recommendations of the Audit Committee, has proposed that M/S S. K. Agrawal & Co., Chartered Accountants (Firm Registration No. 306033E), who retires at the conclusion of ensuing Annual General Meeting ("AGM"), be reappointed as the Statutory Auditors of the Company, to hold office till the conclusion of fifth consecutive AGM, subject to ratification by members at every AGM held after the ensuing AGM. M/S S. K. Agrawal & Co. have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they satisfy the criteria provided in Section 141 of the Act. 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 and 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 1". The Secretarial Auditor, in his Report, has pointed out that (a) The Company has not appointed any Chief Financial Officer as required under Section 203(1) of the Act. (b) Mr. Sandeep Jhunjhunwala, Director & Manager and Mr. Anand Mundra, CEO (Commercial) & Company Secretary (upto 30th March 2015) also held office as employees in another company upto 31st December 2014 and 30th March 2015 respectively. Though not formally appointed as CFO, Mr. Sandeep Jhunjhunwala has been discharging the functions of CFO in the Company since his appointment as per his job profile finalized for him at the time of appointment. The Board in its meeting held on 25th May 2015 has appointed Mr. Jhunjhunwala as the Manager & CFO of the Company. In respect of holding of office of employee in another company, your Directors have to state that such holding of offices were existing contracts as on the commencement of Companies Act, 2013 and as observed by the Secretarial Auditor, they have relinquished such offices during the year. DIRECTORS, 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. Aditya Poddar (DIN: 00646898) and Mr. Amar Bhalotia (DIN: 00642662) as Independent Directors under the Act for a term 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 his 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 amended Clause 49 of the Listing Agreement, the Company is required to have atleast one Woman Director on its Board. Keeping in view this requirement, Mrs. Karabi Sengupta (DIN: 02534951), was appointed as Additional 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 with 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: <http://www.emamirealty>. com/policy_zandu.php NON-INDEPENDENT DIRECTORS As per the provisions of Section 152(6)(c) of the Companies Act, 2013, Mr. Sandeep Jhunjhunwala (DIN : 06433099) 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. KEY MANAGERIAL PERSONNEL During the year under review, Mr. Anand R. Mundra, CEO (Commercial) & Company Secretary resigned from his office with effect from 31st March 2015. The Board places on record their appreciation for the services rendered by him during his tenure. MEETINGS OF BOARD OF DIRECTORS During the financial year ended 31st March, 2015, six 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 According to Clause 49 of the Listing Agreement, a meeting of the Independent Directors is required to be held, inter alia, to review the performance of the Non-Independent Directors and the Board as a whole. Accordingly, 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 During the year under review, there was no employee receiving remuneration from the Company, other than one managerial personnel. Therefore, the Statement of Particulars of Appointment and Remuneration of Managerial personnel as per Section 197(12) of the Act read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable. 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. CORPORATE SOCIAL RESPONSIBILITY As per the Companies Act, 2013, all companies having net worth of Rs. 500 Crores or more, or turnover of Rs. 1,000 Crores or more, or a net profit of Rs. 5 Crores or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of the Board comprising of three or more directors, at least one of whom shall be an independent director and such Company shall spend at least 2% of the average net profit of the Company's three immediately preceding financial years in pursuance of its CSR Policy. Our CSR Committee comprises of Mr. Abhijit Datta as the Chairman, Mr. Aditya Poddar and Mr. Sandeep Jhunjhunwala as other members. The Committee is responsible for formulating and monitoring the CSR Policy of the Company. Due to loss in the financial year 2011-12, the average net profit for three preceding financial years has become negative. Therefore there is no statutory requirement to spend for CSR activities for the Company during the financial year 2014-15. The Company, though, has donated a sum of X 4.37 Crores towards Chairtable activities. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement of Section 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 profit 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 set out in Clause 49 of the Listing Agreement. The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the 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 the 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 a 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 a 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 a part of this Annual Report. REMUNERATION POLICY The Policy of the Company on appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Personnel 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 2" 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/policy_zandu.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. 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 3" and forms a 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 EARNINGS & 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 4" hereto and forms part of this Report. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND In terms of Section 205C of the Companies Act, 1956, unpaid dividend pertaining to financial year 2006-07 (One-time Special Dividend) and financial year 2007-08 (Interim Dividend) amounting to Rs. 13,52,205/- which was lying with the Company for a period of seven years were transferred to the Investors Education and Protection Fund ("IEPF") during the year under review. As on 31st March 2015, the balance lying in Unclaimed Dividend Account is Rs. 15,17,325/- which pertains to the Final Dividend for the year 2007-08 and it is due for transfer to the IEPF on 8th June 2015. Subsequent to 31st March 2015, the Company has paid an amount of Rs. 8,62,975/- to the shareholders who have claimed their unclaimed amount from the Company and the balance shall be transferred to IEPF on the due date. ACKNOWLEDGEMENTS 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 Stakeholders for the growth of the organization. For and on behalf of the Board of Directors Abhijit Datta Chairman Place : Kolkata date : May 25, 2015 |