Oberoi Realty Ltd Directors Report.
Oberoi Realty Limited
Your Directors have pleasure in presenting the Twenty First Annual Report of the Company on the business and operations of the Company, together with the Audited Financial Statements for the year ended March 31,2019.
The Companys performance during the financial year ended March 31, 2019 as compared to the previous financial year is summarized below:
(र: in Lakh)
|Revenue from operations||2,58,249.93||1,26,542.90||1,02,865.55||97,422.33|
|Profit before share of profit of joint ventures (net)||1,17,072.83||64,590.59||64,488.59||59,093.84|
|Share of Profit/(Loss) of joint ventures (net)||689.60||361.97||-||-|
|Profit before tax||1,17,762.43||64,952.56||64,488.59||59,093.84|
|Other comprehensive income (net of tax)||62.92||118.67||49.63||78.62|
|Total comprehensive income for the year||81,756.27||45,998.99||45,419.82||41,795.40|
NATURE OF BUSINESS
The Company is engaged in the activities of Real Estate Development and Hospitality. On the real estate development front, the Company develops residential, commercial, retail and social infrastructure projects. There was no change in nature of the business of the Company, during the year under review.
FINANCIAL PERFORMANCE Consolidated Financials
During the year under review, your Companys consolidated total revenue stood at र:2,66,124.69 lakh as compared to र:1,29,200.70 lakh for the previous year, representing an increase of 105.98%; profit before tax stood at र:1,17,762.43 lakh for the year under review as compared to र:64,952.56 lakh for the previous year representing an increase of 81.31%; and the total comprehensive income stood at र:81,756.27 lakh as compared to र:45,998.99 lakh for the previous year representing an increase of 77.73%.
During the year under review, the total revenue stood at र:1,15,828.07 lakh as compared to र:1,08,334.18 lakh for the previous year representing an increase of 6.92%; profit before tax stood at र:64,488.59 lakh for the year under review as compared to र:59,093.84 lakh for the previous year representing an increase of 9.13%; and the
total comprehensive income stood at र:45,419.82 lakh as compared to र:41,795.40 lakh for the previous year representing an increase of 8.67%.
REPORT ON PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
The performance and financial position of each of the subsidiaries, associates and joint venture companies for the year ended March 31, 2019 is attached to the financial statements hereto.
No company has become or ceased as subsidiary, associate and joint venture, during the year under review.
TRANSFER TO RESERVES
It is not proposed to transfer any amount to reserves out of the profits earned during FY 2018-19.
Taking into consideration the stable performance of your Company and in recognition of the trust in the management by the members of the Company, the Directors are pleased to recommend a dividend at the rate of र:2 per equity share, i.e. 20% of the paid up Equity Share Capital for the year ended March 31,2019 (previous year: र:2 per equity share, (i.e. 20%) of the paid up Equity Share Capital).
During the year under review, your Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as Deposits in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.
DISCLOSURES UNDER SECTION 134(3)(L) OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Companys financial position, have occurred between the end of the financial year of the Company and date of this report.
INTERNAL FINANCIAL CONTROLS
The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls.
INTERNAL CONTROL SYSTEMS
Adequate internal control systems commensurate with the nature of the Companys business and size and complexity of its operations are in place and have been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations. Internal control systems are designed to ensure that all assets and resources are acquired economically, used efficiently and adequately protected.
DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
No significant and material orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and the Companys operations in future.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions/ contracts/ arrangements of the nature as specified in Section 188(1) of the Companies Act, 2013 entered by the Company during the year under review with related party(ies) are in ordinary course of business and on arms length. Further none of such transactions/contracts/ arrangements are material (i.e., satisfying the criteria provided in first provisio of section 188(1) of the Companies Act, 2013)
in nature. Hence, no particulars in form AOC-2 are furnished. Kindly refer the financial statements for the transactions with related parties entered during the year under review.
PARTICULARS OF LOANS, GUARANTEES, INVESTMENTS UNDER SECTION 186
Kindly refer the financial statements for the loans, guarantees and investments given/ made by the Company as on March 31,2019.
QUALIFIED INSTITUTIONS PLACEMENT OF EQUITY SHARES OF THE COMPANY
Under the authority of the special resolution passed by the members of the Company at the Annual General Meeting held on June 5, 2018, your Company has issued and allotted 2,40,00,000 equity shares of face value of र:10 each through qualified institutions placement (QIP) at an issue price of र:500 (inclusive of premium of र:490) per share, aggregating to र:1200 crore. Accordingly, issued, subscribed & paid up share capital of the Company has increased from र:3,39,60,22,370 (33,96,02,237 equity shares of र:10 each) to र:3,63,60,22,370 (36,36,02,237 equity shares of र:10 each). There has been no deviation during the year ended March 31, 2019 in the use of QIP proceeds from the objects stated in the Placement Document dated June 19, 2018. Kindly refer the report on corporate governance for the utilization as on March 31,2019 of the QIP proceeds.
DISCLOSURE RELATING TO EQUITY SHARES WITH DIFFERENTIAL RIGHTS
The Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.
DISCLOSURE RELATING TO SWEAT EQUITY SHARES
The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.
DISCLOSURE RELATING TO EMPLOYEE STOCK OPTION SCHEME AND EMPLOYEE STOCK PURCHASE SCHEME
During the year under review there were no instances of grant, vest, exercise, or lapse/ cancellation of employee stock options under the Employee Stock Option Scheme of the Company. Also, as at the beginning of the year, there were no outstanding options granted. Hence, no disclosures in terms of Companies (Share Capital and Debenture) Rules, 2014 and SEBI (Employee Share Based Employee Benefits) Regulations, 2014 are required.
DISCLOSURES IN RESPECT OF VOTING RIGHTS NOT DIRECTLY EXERCISED BY EMPLOYEES
There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.
MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
Board of Directors and Key Managerial Personnel
There was no change in the composition of Board of Directors and the Key Managerial Personnel during the year under review.
The current term of Mr. Vikas Oberoi as Managing Director of the Company expires on December 3, 2019. The Board has approved his reappointment as the Managing Director of the Company for a further period of 5 years commencing from December 4, 2019 till December 3, 2024, subject to approval of the shareholders of the Company.
Also, the Board has approved the reappointment of Mr. Saumil Daru as Director - Finance for the period from May 10, 2019 till May 9, 2024, subject to approval of the shareholders at their ensuing meeting. Additionally, Mr. Saumil Daru is liable to retire by rotation at the 21st Annual General Meeting in terms of Section 152 read with Section 149(13) of the Companies Act, 2013, and the said Director has offered himself for reappointment.
Also, Ms. Tina Trikha has been appointed as an Independent (Additional) Director w.e.f. April 12, 2019 and in terms of Section 161(1) of the Companies Act, 2013 she shall hold the office of Additional Director upto the date of ensuing Annual General Meeting. The Board has received a notice from a member under Section 160(1) of the Companies Act, 2013 proposing her candidature for the office of Independent Director of the Company. The Nomination and Remuneration Committee, and the Board has recommended her appointment as an Independent Director of the Company.
Also, Mr. Anil Harish, an Independent Director, resigned from the directorship of the Company w.e.f. July 24, 2019. The Board places on record its appreciation for the guidance and support provided by Mr. Anil Harish during his association with the Company.
The first term of 5 years of Mr. T.P Ostwal and Mr. Venkatesh Mysore, the Independent Directors of the Company, shall expire on August 26, 2019, while that of Mr. Karamjit Singh Kalsi shall expire on June 30, 2020.
The said Independent Directors have expressed their willingness to be reappointed as Independent Directors of the Company for the second term of 5 years in succession of their first term. The Board has received notices from
member under Section 160(1) of the Companies Act, 2013 proposing the candidature of said Independent Directors for the office of Independent Directors of the Company. The Nomination and Remuneration Committee, and the Board has recommended their appointment as Independent Directors of the Company.
The resolutions for the above appointment/ reappointment of Directors, is incorporated in the Notice of the ensuing Annual General Meeting. The brief profile and other information as required under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") relating to the Directors proposed to be appointed/ reappointed forms part of the Notice of ensuing Annual General Meeting.
Declarations by Independent Directors
Pursuant to the provisions of sub-section (7) of Section 149 of the Companies Act, 2013, the Company has received individual declarations from all the Independent Directors confirming that they fulfill the criteria of independence as specified in Section 149(6) of the Companies Act, 2013.
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES
The Board of Directors met 5 times during the financial year ended March 31,2019 in accordance with the provisions of the Companies Act, 2013 and rules made there under. All the Directors actively participated in the meetings and provided their valuable inputs on the matters brought before the Board of Directors from time to time. Additionally, on October 22, 2018, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 201 3 and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Directors Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended March 31,2019, the Board of Directors hereby confirms that:
(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanations relating to material departures, wherever applicable;
(b) such accounting policies have been selected and applied consistently and the Directors made judgements 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 31,2019 and of the profits of the Company for the year ended on that date;
(c) proper and sufficient care was 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 of the Company have been prepared on a going concern basis;
(e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordance with the provisions of sub-section (1) of Section 178 of the Companies Act, 2013. Kindly refer section on Corporate Governance, under head Nomination, Remuneration, Compensation and Management Development Committee for matters relating to constitution, meetings, functions of the Committee; and the remuneration policy formulated by this Committee.
An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer section on Corporate Governance, under head Audit Committee for matters relating to constitution, meetings and functions of this Committee.
Corporate Social Responsibility Committee
As per the provisions of Section 135 of the Companies Act, 201 3, a Corporate Social Responsibility (CSR) Committee constituted by the Board of Directors exists.
For details of the composition of the Committee, the CSR policy and other relevant details that are required to be disclosed under the provisions of Section 134(3)(o) of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, kindly refer Annexure I attached herewith and which forms part of this report.
Other Board Committees
For details of other board committees, kindly refer the section on Corporate Governance.
Vigil Mechanism for the Directors and Employees
In compliance with the provisions of Section 177(9) of the Companies Act, 2013, the Board of Directors of the Company has framed the "Whistle Blower Policy" as the vigil mechanism for Directors and employees of the Company.
The Whistle Blower Policy is disclosed on the website of the Company at https://www.oberoirealty.com/pdf/Whistle_ Blower_Policy. pdf
During the year under review, no instances of fraud were reported by the Statutory Auditors of the Company.
Risk Management Policy
The Board of Directors of the Company has put in place a Risk Management Policy which aims at enhancing shareholders value and providing an optimum risk-reward tradeoff. The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.
Annual Evaluation of Directors, Committee and Board
The Nomination and Remuneration Committee of the Board has formulated a Performance Evaluation Framework, under which the Committee has identified criteria upon which every Director, every Committee, and the Board as a whole shall be evaluated. During the year under review the evaluation of every Director, every Committee, and the Board had been carried out.
Particulars of Employees and Remuneration
The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure II attached herewith and which forms part of this report.
Payment of remuneration / commission to executive directors from holding or subsidiary companies:
None of the Managing Director, and the Whole Time Director of the Company are in receipt of remuneration/ commission from any subsidiary company of the Company. The Company has no holding company.
AUDITORS AND THEIR REPORTS
The matters related to Auditors and their Reports are as under:
Observations of statutory auditors on financial statements for the year ended March 31,2019:
The auditors report does not contain any qualification, reservation or adverse remark or disclaimer or modified opinion.
Secretarial Audit report for the year ended March 31,2019:
As required under provisions of Section 204 of the Companies Act, 2013 and pursuant to Regulation 24A of Listing Regulations, the reports in respect of the Secretarial Audit for FY 2018-19 carried out by M/s. Rathi and Associates, Company Secretaries, in Form MR-3 forms part to this report. The report in Form MR-3 does not contain any adverse observation
or qualification or modified opinion requiring explanation or comments from the Board under Section 1 34(3) of the Companies Act, 2013.
Statutory Auditors appointment:
Pursuant to the provisions of Section 139 of Companies Act, 201 3 read with the Companies (Audit and Auditors) Rules, 2014, as amended, S R B C & Co LLP, Chartered Accountants, the Statutory Auditors of the Company, hold office upto the conclusion of Twenty Fourth (24th) Annual General Meeting.
Though not mandatory, as a good governance practice, a business for the ratification of the appointment of the said Statutory Auditors has been included in the notice of 21st Annual General Meeting.
In respect of FY 2018-19, your Company is required to maintain cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 for the Construction industry, and accordingly such accounts and records are made and maintained by your Company.
The said cost accounts and records are also required to be audited pursuant to the provisions of Section 1 48 of the Companies Act, 2013, read with notifications/ circulars issued by the Ministry of Corporate Affairs from time to time, and accordingly as per the recommendation of the Audit Committee, the Board of Directors at their meeting held on April 24, 2018, appointed M/s. Kishore Bhatia & Associates, Cost Accountants, as the Cost Auditors of the Company for FY 2018-19.
In respect of FY 2019-20, the Board based on the recommendation of the Audit Committee has approved the appointment of M/s. Kishore Bhatia & Associates, Cost Accountants, as the cost auditors of the Company. A resolution for ratification of the remuneration to be paid for such appointment is included in the notice of the ensuing Annual General Meeting.
Other disclosures as per provisions of Section 134 of the Act read with Companies (Accounts) Rules, 2014 are furnished as under:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the financial year ended March 31,2019 is available on the website of the Company at www.oberoirealty.com, under the section Investor Corner, Notices/ Others.
The extract of the Annual Return for the financial year ended March 31,2019 made under the provisions of Section 92(3) of the Act is attached as Annexure III hereto and forms part of this Report.
Conservation of energy, technology absorption and foreign exchange earnings and outgo:
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the Company during the year under review.
The details of foreign exchange earnings and outgo during the year under review is as under:
Value of Imports (on C. I. F. Basis)
(र: in Lakh)
Expenditure in Foreign currency (on payment basis)
(र: in Lakh)
Earnings in Foreign Currency (on receipts basis)
(र: in Lakh)
|Sale of residential units||2.53||110.77|
Compliance with Secretarial Standards
The Company is in compliance with the mandatory Secretarial Standards.
Out of the Equity Shares allotted to the successful applicants in the IPO concluded in the month of October 2010, 200 unclaimed Equity Shares were pending for credit to the demat accounts of the respective allottees, which shares were thereafter transferred to the unclaimed shares demat suspense account in accordance with the requirements of (erstwhile) Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Section 124 of the Companies Act, 2013 read with the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("Rules"), requires inter alia that all the shares in respect of which the dividend has not been claimed by the shareholders for seven consecutive years or more are required to be transferred to Investor Education Protection Fund ("IEPF"). Accordingly, the said shares have been transferred to Investor Education Protection Fund during the year under review.
The requisite disclosures under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of the unclaimed shares are as under:
|Particulars||NO. OF SHAREHOLDERS||NO. OF SHARES|
|Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year||2||200|
|Number of shares transferred to the suspense account during the year||Nil||Nil|
|Number of shareholders who approached the Company for transfer of shares from suspense account during the year||Nil||Nil|
|Number of shareholders to whom shares were transferred from suspense account during the year||Nil||Nil|
|Transfer of shares to IEPF Authority under the Rules||2||200|
|Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year||Nil||Nil|
The voting rights in respect of the above 200 equity shares were frozen while they were held in suspense account. No corporate benefits in the nature of bonus, split, rights had accrued on the aforesaid 200 equity shares.
Unclaimed and Unpaid Dividends, and transfer of shares to IEPF
As on March 31, 2019, amounts of र:21,176, र:38,736, र:39,792, र:54,996, र:43,114, र:56,062 and र:93,070 are lying in the unpaid equity dividend account of the Company in respect of the dividends for FY 2011-12, FY 2012-13, FY 2013-14, FY 2014-15, FY 2015-16, FY 2016-17, and FY 2017-18 respectively. Members who have not yet received/ claimed their dividend entitlements are requested to contact the Company or the Registrar and Transfer Agents of the Company.
Pursuant to Section 124 of the Companies Act, 2013 read with the Investor Education Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("Rules"), all dividends remaining unpaid or unclaimed for a period of seven years and also the shares in respect of which the dividend has not been claimed by the shareholders for seven consecutive years
or more are required to be transferred to Investor Education Protection Fund in accordance with the procedure prescribed in the Rules. Accordingly, during FY 2018-19, the Company has transferred to IEPF the unclaimed and unpaid dividend pertaining to FY 2010-11 of र:16,620. Further 377 shares (including the 200 shares earlier held in suspense account as stated earlier) were transferred to IEPF authority as dividend in respect of those shares had not been claimed by the shareholders for seven consecutive years. The details of the shares so transferred are available on the website of Company.
Members can claim from IEPF their dividend entitlements and/ or shares transferred to IEPF by following the required procedure.
Service of documents through electronic means
Subject to the applicable provisions of the Companies Act, 2013, all documents, including the Notice and Annual Report shall be sent through electronic transmission in respect of members whose email IDs are registered in their demat account or are otherwise provided by the members. A member shall be entitled to request for physical copy of any such documents.
Internal Complaint Committee
The Company has complied with the provisions relating to the constitution of Internal Complaint Committee ("ICC") as required under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].
Separate ICC exists for the real estate division as well as the hospitality division Westin Mumbai Garden City ("WMGC"). The Company is strongly opposed to sexual harassment and employees are made aware about the consequences of such acts and about the constitution of ICC.
During the year under review, two complaints was filed with the ICC of WMGC under the provisions of the said Act, which were investigated, deliberated and decided by the ICC. During FY 2018-19, the ICC of WMGC also investigated, deliberated and decided 2 complaints filed with it in FY 2017-18 and which were outstanding at the end of that financial year.
The report on Corporate Governance and also the report of the Statutory Auditors regarding compliance with the conditions of Corporate Governance have been furnished in the Annual Report and forms a part of the Annual Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis report has been separately furnished in the Annual Report and forms a part of the Annual Report.
Business Responsibility Reporting
In compliance with the Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI circular dated December 27, 2015, the Business Responsibility Report for the financial year ended March 31, 2019 has been separately furnished in the Annual Report and forms a part of the Annual Report.
Dividend Distribution Policy
In compliance with the Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy formulated by the Company is available on the website of the Company https://www. oberoirealty.com/pdf/Dividend-Distribution-Policy.pdf
ACKNOWLEDGEMENTS AND APPRECIATION:
Your Directors take this opportunity to thank the employees, customers, suppliers, bankers, business partners/associates, financial institutions and various regulatory authorities for their consistent support/ encouragement to the Company.
Your Directors would also like to thank the Members for reposing their confidence and faith in the Company and its Management.
For and on behalf of the Board of Directors
Chairman & Managing Director
Mumbai, July 24, 2019
Oberoi Realty Limited
Commerz, 3rd Floor, International Business Park,
Oberoi Garden City, Off Western Express Highway,
Goregaon (East), Mumbai 400 063
Telephone No.: (022) 6677 3333
Fax No.: (022) 6677 3334