DIRECTORS' REPORT Dear Members Your Directors have the pleasure in presenting the Thirtieth Annual Report of your Company together with the Audited Annual Accounts for the financial year ended 31st March, 2015. Year in Retrospect During the year under review, your Company recorded on Consolidated basis total revenue of Rs. 5948.76 lacs including other income of Rs. 525.52 lacs and share in profit of associate of Rs. 32.01 lacs as against total revenue of Rs. 7388.86 lacs including other income of Rs. 463.15 lacs and share in profit of associate of Rs. 149.85 lacs of the previous financial year ended 31st March, 2014.There is a downfall in the profit for the year ended 31st March, 2015 at Rs.614.81 lacs as compared to the previous financial year profit ended 31st March, 2014 at Rs.1284.9 lacs. Further, your Company recorded on Standalone basis total of Rs. 3354.89 lacs including other income of Rs. 329.92 lacs as against total revenue of Rs. 4909.78 lacs including other income of Rs. 168.73 lacs of the previous financial year ended 31st March, 2014. There is a downfall in the profit for the year ended 31st March, 2015 at Rs. 321.41 lacs as compared to the financial year profit ended 31st March, 2014 at Rs. 819.73 lacs. The operational performance of the Company has been comprehensively covered in the Management Discussion and Analysis Report. Material Changes etc. Save as mentioned elsewhere in this Report, no material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company 31st March, 2015 and the date of the Report. Dividend Your Directors have recommended a dividend of Rs. 2.00 per equity share (last year Rs. 2.00 per equity share) for the financial year ended March 31, 2015, amounting to Rs.39.33 Lac (exclusive of Dividend tax of Rs. 8 Lac). The dividend will be paid to members whose names appear in the Register of Members as on 18th September 2015; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. Transfer to Investors Education and Protection Fund Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from time to time on due dates, to the Investor Education and Protection Fund. Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on September 26, 2014 (date of last Annual General Meeting) on the Company's website (www.eldecogroup.com as also on the Ministry of Corporate Affairs website. Share Capital The paid-up equity share capital as on 31st March, 2015 was Rs.196.66 lacs. During the year under review, the Company has neither issued Shares with Differential Voting Rights nor granted Stock Options nor Sweat Equity. As on 31st March, 2015 none of the Directors of the Company held Shares or Convertible instruments of the Company except Mr. Pankaj Bajaj, Managing Director who held 1057000 equity shares. Public Deposits No fresh/renewal of deposits was accepted during the financial year 2014-2015 from the Public, Shareholders and Employees. There were unclaimed deposits for Rs. 1.40 lacs, as at 31st March, 2015 Directors' & Key Managerial Personnel a) Changes in Directors In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Arvind Bajaj, Director (DIN 00173367) of the Company retire by rotation and being eligible , offers himself for reappointment. Ms. Rupali Chopra (DIN 07168858) has also been appointed as an Additional Director on the Board of the Company w.e.f. 28th April, 2015. All the Independent Directors have given Declarations that they meet criteria of Independence as laid down u/s 149(6) of the Companies Act, 2013 and Clause No. 49 of the Listing Agreement. Brief resume of the Directors proposed to be reappointed, nature of their expertise in specific functional areas and names of the public companies in which they hold directorships and memberships/ chairmanships of Board/ Committees, are provided in the Report on Corporate Governance forming part of the Annual Report. b) Changes in Company Secretary On 4th day of December, 2014 Ms. Shruti Gupta, Company Secretary of the company had resigned from the Company. The Board vide Circular Resolution dated 15th December, 2014 appointed Mr. Anuj Ahluwalia as Company Secretary of the Company with effect from 8th December 2014. c) Appointment of Chief Financial Officer At a Board Meeting held on 30th May, 2014 the Board had appointed Mr. Sushil Dutt Mishra (who is in employment of the company as Head of the Accounts Department) as Chief Financial Officer and Key Managerial Personnel of the company with effect from 30th May, 2014. Directors' Responsibility Statement In terms of the provisions of Section 134(3) (c) of the Companies Act, 2013, and to the best of their knowledge and belief and according to the information and explanations obtained by them and save as mentioned elsewhere in this Report, the attached Annual Accounts and the Auditor's Report thereon, your Directors confirm that : a. in the preparation of the Annual Accounts for the year ended 31st March, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures; b. the directors had 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 31st March, 2015 and of the Profit of the Company for the year ended on that date; c. the directors had taken proper and sufficient care 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 directors had prepared the annual accounts on a going concern basis : and e. 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. f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. Auditors & Audit At the Annual General Meeting of the Company held on September 26, 2014, M/s Doogar and Associates, Chartered Accountants, New Delhi (Firm Registration No.000561N) were reappointed as the Statutory Auditors of the Company for a period of 3 years which is subject to annual ratification by the members of the Company in terms of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.The members may ratify the appointment of M/s Doogar and Associates, Chartered Accountants, New Delhi (Firm Registration No.000561N) as the Statutory Auditors of the Company for the financial year 2015-16. The observations of the Auditors and the relevant notes on the accounts are self-explanatory and therefore do not call for any further comments. Secretarial Auditors The Board had appointed M/s R.K. Tandon & Associates, Company Secretaries, Lucknow as Secretarial Auditor pursuant to the provisions of Section 204 of the Companies Act, 2013. Secretarial Audit Report is annexed herewith as Annexure 'A'. Internal Auditor M/s Seth & Associates, Chartered Accountants, Lucknow (Uttar Pradesh) represented by Mr. Dhruv Seth (Membership No. 404028) performs the duties of internal auditors of the Company and their report is reviewed by the Audit Committee from time to time. Subsidiary Companies As on date there are following subsidiaries of the Company: 1. Aadesh Constructions Private Limited 2. Bliss Constructions Private Limited 3. Carnation Realtors Private Limited 4. Deepjyoti Constructions Private Limited 5. Facility Constructions Private Limited 6. Fixity Constructions Private Limited 7. Garv Constructions Private Limited 8. Halwasiya Agro Industries Limited 9. Iris Realtors Private Limited 10. Khwahish Constructions Private Limited 11. Mahal Constructions Private Limited 12. Milaap Constructions Private Limited 13. Neo Realtors Private Limited 14. Neptune Infracon Private Limited 15. Numerous Constructions Private Limited 16. Perpetual Constructions Private Limited 17. Prasiddhi Constructions Private Limited 18. Primacy Constructions Private Limited 19. Samarpit Constructions Private Limited 20. Shivaye Constructions Private Limited 21. Suniyojit Constructions Private Limited 22. Sushobhit Constructions Private Limited 23. Swarg Constructions Private Limited 24. Swarnim Nirman Private Limited 25. Villa Constructions Private Limited 26. M.A.K. Sales Private Limited In accordance with the General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. However the financial information of the subsidiary companies is disclosed in the Annual Report in compliance with the said circular. The Company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiary companies & Associates Companies. Financial position of the each of the Subsidiaries is provided in a separate statement attached to the Financial Statement pursuant to first proviso to Section 129(3) of the Companies Act, 2013. Consolidated Financial Statements In accordance with the Accounting Standard-21, Consolidated Financial Statements read with Accounting Standard-27 on Financial Reporting of Interest in Joint Ventures and Accounting Standard-23 on 'Accounting for Investments in Associates' issued by the Institute of Chartered Accountants of India, your Directors have pleasure in attaching the consolidated financial statements, which form part of the Annual Report & Accounts. Corporate Social Responsibility With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications issued by the Ministry of Corporate Affairs, every Company having the net worth of Rs.500 crores or more or turnover of Rs.1000 crores or more or net profit of Rs.5 crore or more during any financial year have to spend at least 2% of the average net profit of the Company made during the three immediately preceding financial years. Accordingly, the Company has to do a CSR Activity for an amount of Rs.23.32 lacs based on the average profits of the three preceding financial years. The CSR activities carried/to be carried out by the Company is driven by the expertise of the management. Additionally, the Company gives preference to the local area(s) of its operations for CSR activities. The Company believes that the CSR should be in the field(s) which have substantial social impact and which co-relate with the philosophy of the Company to improve the quality of life. During the F/Y 2014-15, the Company did not come across any project, which reflected the above approach and hence the spending prescribed towards CSR could not be made during F/Y 2014-15. Corporate Governance Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as prescribed under the Listing Agreement with the Stock Exchanges. A separate Report on Corporate Governance along with Report on Management Discussion and Analysis is enclosed as part of the Annual Report. Disclosure under Companies Act, 2013 (i) Extracts of Annual Return The details forming Part of the Extracts of Annual Return is annexed as per Annexure 'B'. (ii) Meetings During the year, Four Board Meetings and Four Audit Committee Meetings were convened and held. The details of which are given in Corporate Governance Report. (iii) Composition of Audit Committee The Board has constituted a Audit Committee, which comprises Mr. Anil Tewari as the Chairman and Mr. Shiv Kumar Garg and Mr. Ranjit Khattar as the Members. Other details about the Committee are given in the Corporate Governance Report. (iv) Related Party Transactions During the year, the Company has not entered into any contracts/arrangement /transactions with its related parties which is material as per Section 188(1) of the Companies Act, 2013. However some transactions undertaken with its wholly owned subsidiaries in the ordinary course of business during the year are detailed in Notes to Accounts of the Financial Statement. None of the transactions with any of related parties were in conflict with the Company's interest. Suitable disclosure as required by the Accounting Standards (AS18) has been made in the notes to the Financial Statements. All related party transactions are negotiated on an arms-length basis and are in the ordinary course of business. Therefore, the Provisions of Section 188(1) of the Companies Act, 2013 are not applicable. The details of the transaction with Related Party are provided in the accompanying Financial Statements. (v) Particulars of Loans, Guarantees and Investments Details of Loans, Guarantees and Investments covered under the Provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements. Significant and Material Orders Passed By the Regulators or Courts There are no significant, material orders passed by the Regulators or Courts, which would impact the going concern status of the Company and its future operations. Internal Financial Control A detailed note is given under Management Discussion and Analysis Report. Vigil Mechanism Fraud-free and corruption-free work culture has been the core of the Company' functioning. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the company has put even greater emphasis to address this risk. To meet this objective, the Company has established sufficient Vigil Mechanism for the Directors and employees of the Company in compliance of the provisions of Section 177(9) of the Companies Act, 2013. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 Sexual Harassment Committee ("Committee") has been set up to redress the complaints regarding sexual harassment. There were no complaint received from any employee during the financial year 2014-2015 and hence no complaint is outstanding as on 31.03.2015 for redressal. Nomination & Remuneration policy ("NRC Policy") The Board has adopted a NRC Policy in its meeting held on 11th February, 2015 for the selection of and appointment of Directors, Key Managerial Personnel and Senior Management of the Company and their Remuneration. Particulars of employees During the financial year under review, none of the Company's employees was in receipt of remuneration as under section 134(3) (q) of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 and hence no particulars are required to be disclosed in this Report. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Information pursuant to Section 134(1 )(m) of the Companies Act, 2013 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are given as under: 1. Conservation of Energy: Your Company is conscious about energy consumption and environmental issues related with it. It is continuously making sincere efforts towards conservation of energy and optimizing its usage in all aspects of operations. 2. Technology Absorption: The Company is taking advantage of the latest developments and advancements in the Construction Industry. The Company is using indigenous technology which is well established in the Country and no foreign technology/ know how was purchased. The Company has not incurred any R & D Expenditure during the year. 3. Export Activities: There was no export activity in the Company during the year under review. The company is not planning any export in the near future, as well. 4. Foreign Exchange Earnings and Outgo: There was no Foreign Exchange Earning and Outgo during the year under review. Listing The Equity shares of the Company are presently listed at BSE Limited, Mumbai and Uttar Pradesh Stock Exchange Limited, Kanpur. The Company has already paid listing fees of Bombay Stock Exchange whereas Uttar Pradesh Stock Exchange has not raised the invoice for the financial year 2015-2016. Acknowledgement Your Directors take this opportunity to place on record their sincere appreciation for the co-operation and assistance the Company has received from the Bankers and various Government Departments. The Board also places on record its appreciation of the devoted services of the employees; support and co-operation extended by the valued business associates and the continuous patronage of the customers of the Company. For & On behalf of the Board Eldeco Housing and Industries Ltd S.K.Garg Chairman Place: New Delhi Date: 11th August, 2015 |