DIRECTORS' REPORT AND
Your Directors are pleased to present the Twenty-fourth Annual Report together with theAudited Accounts of your Company for the financial year ended 31st March, 2014. Thesummarised standalone and consolidated financial performance of your Company is as under:
(Rs. in Lacs)
|Particulars||Year Ended 31st March,||Year Ended 31st March, 2013||Year Ended 31st March, 2014||Year Ended 31st March, 2013|
|Earnings Before Interest, Depreciation, Tax and Amortization (EBIDTA)||1800||2274||5070||5287|
|Less : Finance Cost||1410||1884||4637||4967|
|Earnings Before Depreciation, Tax & Amortization (EBDTA)||390||390||433||320|
|Less: Depreciation & Amortization||21||29||66||70|
|Profit before Extra Ordinary Items and Tax||369||361||367||250|
|Less: Goodwill written off/extra ordinary items||-||-||-||-|
|Profit Before Tax (PBT)||369||361||367||250|
|Deferred Tax Liability||8||2||5||3|
|Profit After Tax (PAT)||241||242||269||122|
|Less : Minority Interest & Other Adjustment||-||-|
|Balance brought forward from previous year||316||140||369||310|
|Amount available for appropriation||557||382||638||432|
|Transfer to General Reserve||-||-||-||-|
|Earlier Year Adjustment||132||(1)||133||2|
|Balance carried to Balance Sheet (being amount transferred to Reserve & Surplus)||611||316||693||369|
In continued pursuit of distributing profits to shareholders, your Directors haverecommended equity dividend of Rs. 0.30 per share for the Financial Year 2013-14(Financial Year 2012-13 : Rs. 0.25). The dividend, if approved at the 24th Annual GeneralMeeting by the members, will be paid to all those equity shareholders whose names appearin the register of members as on September 13, 2014. The Dividend for the Financial Year2013-14 shall be subject to tax on dividend to be paid by your Company but will be taxfree in the hands of the shareholders.
Shristi Infrastructure Development Corporation Limited ('Shristi') is one of theleading construction and infrastructure development companies in India with a Pan-Indiapresence. Shristi along with its subsidiary companies is operating in three mainverticals, Infrastructure Construction, Infrastructure Development and InfrastructureConsultancy. The progress on various projects is satisfactory but a few projects are goingslow due to general slow down in the Economy.
Shristi continues to focus on developing green integrated townships, integratedindustrial parks & logistic hubs. Your Company has launched a new Integrated GreenTownship in Guwahati, the Gateway of the North East, with a built up area in excess of13.5 million sq. ft. It is spread across 250 acres of sprawling greenery and set againstthe backdrop of the magnificent Brahmaputra river and the majestic hills. It is going tobe the first integrated township with world class living & leisure options in a fullygated community in the North East. Shristi's one more Retail Mall of approximately 1 lacsquare feet at Agartala (Tripura) will be fully operational during the current year.
The year under review continued to be challenging for the Company because of increasedcosts, challenging business environment and sluggish industry volumes. On standalonebasis, your Company earned PBT of Rs. 369 lacs against previous year's figure of Rs. 361lacs and on consolidated basis your company has earned PBT of Rs. 367 lacs againstprevious year's figure of Rs. 250 lacs. Your Company has taken many measures to containcosts and has judiciously allocated its resources to improve its cashflows, which hasresulted in better profitability.
The Standalone and Consolidated Financial Statements have been prepared by your Companyin accordance with the requirements of the Accounting Standards notified by the CentralGovernment under the Companies (Accounting Standards) Rules, 2006. The Audited Standaloneand Consolidated Financial Statements together with Auditors Report thereon forms part ofthe Annual Report.
AWARDS AND ACCOLADES
Shristi won the following accolades during the year:
- Shristinagar Asansol awarded "Integrated Township of the Year" by ABP News
- Sentrum Mall at Asansol awarded "The Best Designed Retail Space" by CredaiBengal & Crisil
INDUSTRY STRUCTURE AND DEVELOPMENTS, OPPORTUNITIES, THREATS AND OUTLOOK
The Global economy seems to be finally stabilizing after five years of global financialcrisis. Global activity has broadly strengthened and is expected to improve further in2014-15, with much of the impetus coming from advanced economies. As per IMF global growthis projected to strengthen from 3 percent in 2013 to 3.6 percent in 2014 and 3.9 percentin 2015. In advanced economies, growth is expected to increase to about 2.5 percent in2014-15, an improvement of about 1 percentage point compared with 2013. Growth will bestrongest in the United States at about 2.75 percent. Growth is projected to be positivebut varied in the Euro area : stronger in the core, but weaker in countries with high debtand financial fragmentation, which will both weigh on domestic demand. In emerging marketand developing economies, growth is projected to pick up gradually from 4.7 percent in2013 to about 5 percent in 2014 and 5.25 percent in 2015. Growth will be helped bystronger external demand from advanced economies, but tighter financial conditions willdampen domestic demand growth. In China, growth is projected to remain at about 7.5percent in 2014 as the authorities seek to rein in credit and advance reforms whileensuring a gradual transition to a more balanced and sustainable growth path.
The year 2013-14 was one of the most challenging for the Indian economy, with India'sGDP growing below the psychological 5% level for the second successive year. After 4.5%growth in F.Y. 13, India's GDP grew by about 4.7% in F.Y. 14.
The increase in policy rates by Reserve Bank of India (RBI) in order to containinflationary pressure has slowed down industrial growth considerably. Reduction in privateconsumption has also contributed. Manufacturing sector has contracted and domesticinvestment sentiment remains weak. The construction sector remained flat- growing at amarginally higher 1.7 percent during 2013-14 as compared to 1.1 percent during 2012-13.The real estate sector came under significant pressure during 2013-14 due to this declinein the growth momentum, high interest rate on home loans as well as accompanying fall inconsumer sentiment. According to a research report by property consultants Knight FrankIndia Private Limited in March 2014, the sales volume of 15 listed real estate companiesout of the top-25 that they track, declined by 43 percent during the third quarter of2013-14, and almost halved over the past eight quarters. Besides, delays in approvals andhigh cost of funds have increased the project execution cost and logjammed constructionactivity across the Country.
Reversing this, bleak outlook for the infrastructure sector will depend on the pace ofprogress on several fronts. First, easier monetary conditions and a softer interest rateregime - which will make investment in property more affordable for the end user as wellas de-risk balance sheets of the sector and bring down project execution costs. Second,there is a need for a more responsive regulatory framework, faster approval cycles andremoving uncertainty resulting from impending legislations. Finally, it is essential torevitalise economic growth so as to restore business and consumer confidence.
However, there is a genuine reason for hope now. There has been a regime change at theCentre. The fact that the new government has come to power with a clear majority augurswell for the country as the elected government, with minimum coalition pressure, will bein a position to undertake long pending actions. The government has expressed itscommitment to revive infrastructure growth and is willing to collaborate with stategovernments to provide a major thrust to infrastructure. The new regime realises theimportance of unlocking the domestic growth potential and it has made it adequately clearthat infrastructure creation is its priority.
However, whether India will be able to take advantage of this situation depends a loton the policies and programmes that will be pursued by the new Union Government. Thus, thenew government's actions will essentially determine how the economy performs in F.Y. 15and in the coming years. For India to emerge as a favoured investment destination, thesteps taken to drive infrastructure creation will be crucial. World Bank has projectedIndia's GDP growth to be 6% in 2014-15. Asian Development Bank (ADB) has come up with amore conservative estimate and expects India's GDP to grow at 5.5% in F.Y. 15.
OPPORTUNITIES, THREATS & BUSINESS OUTLOOK
Infrastructure development has been identified as the key driver of long term economicgrowth in India over the years. India's Twelfth Five Year Plan (2012-17) envisagesinvestments worth USD 1 trillion for infrastructure. If even, three fourth of this plannedinvestment is actually realized, it can propel India's economic growth back to a highertrajectory and with it, significantly improve the fortunes of the infrastructureconstruction and development sector.
Key operational risks faced by the Company include longer gestation period forprocurement of land, time taken for approvals, inability to sell the project as per plan,inability to complete and deliver projects according to the schedule leading to additionalcost of construction and maintenance, erosion of brand value, appointment and retention ofquality contractors/ sub contractors, inability to attract and retain talent, poorcustomer satisfaction, fraud and unethical practices, failure to comply with laws andregulations leading to fines, penalties and lengthy litigations.
The Company addresses these issues within a well structured framework which identifiesthe desired controls and assigns ownership to monitor and mitigate the risks. The Companyhas also invested significant resources in an Enterprise Resource Planning (ERP) solutionand transparent customer friendly processes, which are expected to go a long way toaddress some of these risks. The Company also has a Code of Conduct for all its Employees.The Company's Corporate Governance policies ensure transparency in operations, timelydisclosures and adherence to regulatory compliances, leading to enhanced stakeholdervalue.
Even as the macro economic outlook for the immediate future is not very encouraging,the Company believes that the medium to longer term outlook for domestic growth remainspositive. Till such time, the Company is relying on its ability to innovate and execute totide over the impact of adverse economic and regulatory environment. However, given thatthere are still credible risks, the outlook for 2014-15 remains cautious.
Shristi is in a phase of consolidation and is focused on optimizing its strategy andoperations to overcome the present economic and financial challenges to emerge as an evenstronger entity that can best leverage opportunities once the external environment regainsits growth oriented trajectory.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS
Your Company recognizes Risk Management as an integrated, forward looking and processoriented approach for managing all key business risks and opportunities. Your Company'sbusiness exposure to the normal financial and market risks continue to be monitored,managed and strengthened from time to time by systems and processes commensurate with thevolume of business activities and the perceived risk mitigation requirements. Internalcontrol systems and process level checks and balances are reviewed and updated on acontinuous basis. The internal control is supplemented by an extensive program of internalaudit, reviewed by the Management, documented policies, guidelines and procedures. YourCompany has implemented the ERP systems for better internal controls. The top managementand Audit Committee of the Board review the findings evolved during checking of system andoperation and take steps accordingly.
Shristi firmly believes that its employees are one of the most valuable resources. Onlyhighly motivated employees can enable the Company to meet and exceed the expectations ofvarious stakeholders including customers and investors. Employees are encouraged todevelop their respective individual development plans and continuous learning processeshelp them do better. Your Company creates and maintains a supportive environment, toattract and cultivate the very best talent in this business. Employer Branding of Shristiis maintained and leveraged through a well-knit, winning embrace of talent Acquisition,Talent Management & Talent Engagement that provides the competitive edge to theCompany in adding agility and ability through continuous capability building mechanismthat imparts sustainable human capital advantage in today's dynamic, turbulent businesslandscape.
In pursuance of Clause 49 of the Listing Agreement entered into with the stockexchanges, a separate section on Corporate Governance has been incorporated in the AnnualReport for the information of the shareholders. A certificate from the Statutory Auditorsof the Company regarding compliance of the conditions of Corporate Governance asstipulated under the said Clause 49 also forms a part of this Annual Report.
Deposits amounting to Rs. 15,000/- matured and remained unclaimed by the depositors ason 31st March, 2014 and the said amount is lying in escrow account with HDFC Bank. TheCompany has not accepted any deposits from the public during the financial year endedMarch 31st, 2014.
TRANSFERTO INVESTOR EDUCATION & PROTECTION FUND
During the year under review, your Company has transferred a sum of Rs. 41,465/- to theInvestor Education & Protection Fund (IEPF), the amount which was due & payableand remained unclaimed and unpaid for a period of seven years, as provided in Section205A(5) of the Companies Act, 1956.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company prepared in accordance withAccounting Standards 21 and 27, issued by the Institute of Chartered Accountants of India,forms part of the Annual Report. The group recorded a consolidated profit before tax ofRs. 367 lacs for the financial year 2013-14 as compared toRs. 250 lacs during the F.Y.2012-13. The statement pursuant to Section 212 of the Companies Act, 1956 containingdetails of Company's subsidiaries form part of the Annual Report.
Ministry of Corporate Affairs, Government of India vide General Circular 2/2011 dated8th February, 2011 has granted general exemption by directing that the provisions ofSection 212(8) of the Companies Act, 1956 shall not apply in relation to subsidiaries andsub subsidiaries of those Companies which fulfill certain conditions mentioned in the saidCircular. Accordingly, by fulfilling the conditions mentioned in the said Circular theBalance Sheet, Statement of Profit and Loss and other documents of the said subsidiariesand sub subsidiaries are not attached with the Company's Accounts. As required by the saidCircular, the financial information of the said subsidiaries and sub subsidiaries arebeing disclosed in the Annual Report and the detailed accounts of the subsidiary and subsubsidiaries shall be put on the Company's website www.shristicorp.com. The Company willmake available the annual accounts of the said subsidiaries and sub subsidiaries and therelated detailed information to any member of the Company who may be interested inobtaining the same. The annual accounts of any subsidiaries will also be kept open forinspection by any shareholders at the Company's Registered Office and that of therespective subsidiaries. The Consolidated Financial Statements presented by the Companyinclude financial results of the said subsidiaries. A statement of holding Company'sinterest in subsidiaries and sub subsidiaries viz., Shristi Housing Development Limited,Shristi Urban Infrastructure Development Limited, Vivekananda Skyroad Limited, BorderTransport Infrastructure Development Limited, Shristi Udaipur Hotels & Resorts PrivateLimited, East Kolkata Infrastructure Development Private Limited, Kanchan Janga IntegratedInfrastructure Development Private Limited, World City Development Private Limited,Medi-Net Services Private Limited, Vitthal Hospitality Private Limited, FinetuneEngineering Services Private Limited and Vipani Hotels & Resorts Private Limited arealso furnished.
PARTICULARS OF EMPLOYEES
The information required under Section 217(2A) of the Companies Act, 1956 and the Rulesthere under, in respect of the employees of the Company, is provided in the Annexureforming part of this Report. In terms of Section 219 (1) (b) (iv) of the Act, the Reportand Accounts are being sent to the Members, excluding the aforesaid Annexure. The Annexureis available for inspection by Members at the Registered Office of the Company duringbusiness hours on working days up to the date of the ensuing AGM, and if any Member isinterested in obtaining a copy thereof such Member may write to the Company Secretary,whereupon a copy would be sent.
The website of your company, www.shristicorp.com carries a comprehensive database ofinformation of interest to the investors including the corporate profile and businessactivities of your Company and the various projects which are handled by your Company.
The Board of Directors of your Company had appointed Mr. Sunil Jha as an AdditionalDirector of the Company w.e.f. 12 February 2014, in terms of Section 161 of the CompaniesAct, 2013 and the Articles of Association of the Company and whose term of office expiresat the ensuing Annual General Meeting and is eligible for appointment as Director of theCompany. Mr. Sunil Jha was also appointed as Managing Director of the Company w.e.f. 4thMarch, 2014 for a period from 4th March, 2014 to 3rd March, 2017 subject to the approvalof shareholders.
Mr. Debi Prasad Sarawgi, resigned as Managing Director and from the Board of Directorsw.e.f. 3rd March, 2014. The Board wishes to place on record, its appreciation of thecontribution, advice and guidance extended by him during his tenure as Managing Directorof the Company.
In accordance with the provisions of Section 149 of the Companies Act, 2013 ('Act')read with Companies (Appointment and Qualification of Directors) Rules, 2014, recentlyamended Clause 49 of the Listing Agreement with Stock Exchanges ('Listing Agreement') andyour Company's Articles of Association, the Board of Directors of your Company is seekingappointment of Mr. Dipak Kumar Banerjee, Mr. Kailash Nath Bhandari, Mr. Sakti PrasadGhosh, Mr. Vinod Juneja, and Mr. Braja Behari Mahapatra as Independent Directors of theCompany for a period of 5 (five) consecutive years from the date of the forthcomingTwenty-Fourth Annual General Meeting (AGM) of the Company. All these Directors have filedwith your Company their consent and declaration of independence pursuant to provisions ofthe Act and the aforesaid Rules and the Listing Agreement with the Stock Exchanges.
The appropriate resolution(s) seeking your approval and brief resume/details forre-appointment/ appointment are furnished in the notice of the ensuing Annual GeneralMeeting.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of provisions of Section 217(2AA) of the Companies Act, 1956, your directorsconfirm:
(i) that in the preparation of the annual accounts for the financial year ended 31stMarch, 2014, the applicable accounting standards have been followed along with properexplanation relating to material departures;
(ii) that the directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for the year;
(iii) that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;and
(iv) that the directors have prepared the annual accounts for the financial year ended31st March, 2014 on a going concern basis.
M/s. S. S. Kothari & Co., Chartered Accountants having Firm Registration No.302034Eallotted by The Institute of Chartered Accountants of India (ICAI), retire as StatutoryAuditors of your Company at the conclusion of the ensuing Annual General Meeting (AGM) andhave confirmed their eligibility and willingness to accept the office of Auditors, ifre-appointed. Your Company has received a confirmation from M/s. S. S. Kothari & Co.,Chartered Accountants to the effect that their re-appointment, if made, would be withinthe limits prescribed under Section 139 of the Companies Act, 2013 and the rules framedthereunder. They have also confirmed that they hold a valid peer review certificate asprescribed under Clause 41(1) (h) of the Listing Agreement.
Pursuant to provisions of Section 139 of the Companies Act, 2013 and rules framedthereunder the Audit Committee and the Board of Directors of your Company recommend there-appointment of M/s. S. S. Kothari & Co., Chartered Accountants, as the StatutoryAuditors of your Company. Members are requested to consider their re-appointment asStatutory Auditors of your Company to hold office from conclusion of ensuing AGM until theconclusion of 27th AGM to be held in the year 2017, subject to annual ratification bymembers at Annual General Meeting on remuneration to be decided by the Board of Directorsbased on recommendation of the Audit Committee of your Company.
PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGSAND OUTFLOW
Information in accordance with the provisions of Section 217(1)(e) of the CompaniesAct, 1956, read with the Companies (Disclosure of Particulars in the Report of Board ofDirectors) Rules, 1988 regarding conservation of energy and technology absorption are notgiven as the Company has not undertaken any manufacturing activity.
During the year under review, the total foreign exchange expenditure of your Companywas Rs. 26.64 lacs/- (previous year Rs. 44.93 lacs).
Your Directors would like to acknowledge and place on record their sincere appreciationfor all Stakeholders, Customers, Financial Institutions, Banks, Government Authorities,Stock Exchanges, Suppliers, the Company's valued investors and other business partners fortheir continued co-operation and excellent support received during the year.
Your directors recognize and appreciate the efforts and hard work of all the employeesof the Company and their continued contribution to its progress.
|For and on behalf of the Board of Directors|
|Place : Kolkata||Dipak Kumar Banerjee|
|Date : 28th May, 2014||Chairman|
|28-Oct-10||Shristi Infrastructure to launch Kanchan Janga Integrated Park|
|15-Jul-10||Shristi Infra to launch integrated Park in Siliguri|
Dipak Kumar Banerjee , Chairman
Vinod Juneja , Director
KAILASH NATH BHANDARI , Non Executive Director
Sakti Prasad Ghosh , Director
Company Head Office / Quarters:
Plot No X-1 2 & 3 Block EP,
Sector-V Salt Lake City,
Phone : West Bengal-91-33-40202020/40154646 / West Bengal-
Fax : West Bengal-91-33-40202099 / West Bengal-
E-mail : email@example.com
Web : http://www.shristicorp.com
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