DIRECTORS' REPORT Dear Members, Your Directors have pleasure in presenting the 79th Annual Report and the Audited Accounts of Prime Urban Development India, Limited ["Company"], for the financial year ended 31st March, 2016. BUSINESS OPERATIONS Your Company has; two reportable segments, the Realty and Textiles. Realty Segment In the Realty segment your Company has more than doubled revenues in 2015-16 to Rs. 31.74 cr. Thisgives us immense confidence of our real estate developments and acceptance of our brand. For 2015-16 your Company had sales in Prime Enclave Vistas (Apartments Project) and The Onyx (Villas Project). The remaining apartments in Prime Enclave Vistas shall be sold in the next financial year. Your Company has; sold 8 out 34 villas in the Onyx project tiil date. Your Company is targeting to complete the entire Onyx project in the next 24 months along with sale of balance villas. Your Company is also engaged in the sales of Developed lands. In Financial Years 2014-15 and 2015-16 your Company achieved sale of lands of over 1,40,000 sq ft. Your Company adopts an asset light and bottom line focused business model approach. Keeping in line with this strategy we are; exploring new development options in Tirupur and are keen to enter newer cities in South India viz. Coimbatore and Chennai. Textile Segment In the Textile segment, your Company is engaged in the business of export of cotton yarn under Merchant Trading. There are no material changes in this segment of your Company. CONSOLIDATED FINANCIAL STATEMENTS In accordance with the provisions of Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, applicable Accounting Standards prescribed by the Institute of Chartered Accountants of India and the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the audited Consolidated financial statements are provided in this Annual Report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES In accordance to the provisions of Section 136(1) of the Companies Act, 2013, the Annual Report of the Company, containing therein standalone and the Consolidated financial statements and the audited financial statements of each of the subsidiary companies have been placed on the website of the Company-www.ptlonline.com The audited financial statements in respect of each subsidiary companies shall also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of ensuing Annual General Meeting. The aforesaid documents relating to subsidiary companies can be made available to any Member interested in obtaining the same upon a request in that regards made to the Company. The policy for determining material subsidiaries as approved by the Board of Directors of the Company is made available on the website of the Company- www.ptlonline.com TRANSFER TO RESERVES Your Company proposes to transfer of Rs. 1,900 Lacs to the gênerai reserve during the financial year under review. DIVIDEND Your Directors have recommended a final dividend of Rs. 0.40 (Forty paise only) (20%) per equity share of Rs. 21- each for the year ended 31st March, 2016. The dividend distribution would resuit in a cash outgo of Rs. 1,28,27,044/- (including tax on dividend of Rs. 21.69.604/-). PUBLIC DEPOSITS Your Company has not been accepting any deposits from the public and hence there are no unpaid/unclaimed deposits nor there is any default in repayment thereof. BOARD MEETINGS The Board of Directors met 4 (Four) times during the financial year 2015-16. The details of Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Annual Report. COMMUTEES OF THE BOARD OF DIRECTORS During the year under review, ail recommendations made by the Audit Committee were accepted by the Board. There were no instances where the Board has not accepted any recommendation of the Audit Committee. Details of Committees of Board of Directors along with their terms of reference, composition and meetings held during the year, are provided separately in the Corporate Governance Report, which forms part of this Annual Report. PARTICULARS OF LOANS GRANTED, GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013 Details of loans granted, guarantees provided and investments made by the Company under the provisions of Section 186 of the Companies Act, 2013, are provided in the Note No. 6 under Notes forming part of standalone financial statements. PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE ON RESEARCH AND DEVELOPMENT & FOREIGN EXCHANGE EARNINGS AND OUTGO Considering the nature of activities in which the Company operâtes, energy consumption is in accordance to the normal business practices and does not require any specifie installations. In its regular course of business, the Company is always vigilant to conserve the resources and continuously implements measures required to save energy. The business activities of the Company is not specifie to any technology requirements. In the course of its operations, processes are formed and implemented to achieve operational efficiencies which provide maintaining product quality and cost control. The details in respect of Foreign Exchange earnings/outgo during the year under review, is provided in Note No. 16, (Point No. 3 & 4) under Notes forming part of standalone financial statements. EXTRACT OF ANNUAL RETURN In terms of provisions of Section 92(3) of the Companies Act, 2013, an extract of Annual Return in prescribed format is annexed to this Report as "Annexure I". CORPORATE GOVERNANCE REPORT A report on Corporate Governance together with Auditors' Certificate as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Annual Report. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year under review, Mr. Purusottamdas Patodia, Mr. Manoj Kumar Patodia and Mr. Anuj Patodia has been re-appointed as Chairman & Managing Director, Vice-Chairman & Managing Director and Managing Director respectively fora period ofthree years with effect from 1st April. 2016, pursuant to the approval accorded by the Shareholders of the Company at the 78th Annual General Meeting held on 13th August, 2015. During the year under review, Mr. Thirugnanam Paul Sugumaran, has been appointed as Whole-time Director of the Company for a period of three years with effect from 1st June, 2015, pursuant to the approval accorded by the Shareholders of the Company at the 78th Annual General Meeting held on 13th August, 2015. During the year under review, Dr. Vaijayanti Pandit has been appointed as an Independent and Woman director of the Company for a period of five years with effect from 14th August, 2014, pursuant to the approval accorded by the Shareholders of the Company at the 78th Annual General Meeting held on 13th August, 2015. The Company has received individual declaration from following Independent Director(s) of the Company stating that they meet the criteria of independence as provided under sub-section (6) of Section 149 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: a) Mr. N. K. Bafna b) Mr. Banwarilal Singhal c) Mr. Venkatchalam Ramaswamy d) Dr. Vaijayanti Pandit In terms of the provisions of the Companies Act, 2013, Mr. Thirugnanam Paul Sugumaran retires from the Board of Directors of the Company by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Notice convening forthcoming Annual General Meeting includes the proposai for appointment/ re-appointment of aforesaid Directors. A brief resume of the Directors seeking appointment/re-appointment at the forthcoming Annual General Meeting and other details as required to be disclosed in terms of Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the said Notice. None of the Directors are disqualified for appointment/re-appointment under Section 164 of the Companies Act, 2013. None of the Directors are related inter-se to each other save and except Mr. Purusottamdas Patodia, Mr, Manoj Kumar Patodia and Mr. Anuj Patodia. Mr. Purusottamdas Patodia is the father of Mr. Manoj Kumar Patodia and Mr. Anuj Patodia. During the year under review, Mr. Krunal Shah has been appointed as Company Secretary of the Company at the Meeting of the Board of Directors held on 13th August, 2015 DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement it is hereby confirmed! that: (a) in the preparation of the annual accounts for the financial year ended 31 st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimâtes that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31 st March, 2016 and of the profit and loss of the Company for that period; (c) the Directors have 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 irregularites; (d) the Directors have prepared the annual accounts for the financial year ended 31 st March, 2016 on a going concern basis; (e) the Directors have laid down internal financial centrais to be followed by the Company and that such internal financial contrais are adequate and were operating effectively; and (f) the Directors have devised proper Systems to ensure compliance with the provisions of ail applicable laws were in place and that such Systems were adequate and operating effectively, AUDITORS AND AUDITOR'S REPORT M/s. M. S. Jagannathan & Visvanathan (Firm Registration No. 001209S), Chartered Accountants, have been appointed as the Statutory Auditors of the Company for a period of three consecutive years at the 77th Annual General Meeting held on 14th August, 2014. In terms of the provisions of Section 139 of the Companies Act, 2013, their appointment will however need to be ratified by Shareholders at the forthcoming Annual General Meeting. Notice convening the forthcoming Annual General Meeting includes a proposai for ratification of appointment of Statutory Auditors by the Shareholders of the Company. The notes on financial statements referred to in the Auditors Report are self-explanatory and do not call for any further comments and explanations. The Auditors Report does not contain any qualification, reservation or adverse remark. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT: The Company has appointed Dr. S. K. Jain, Practicing Company Secretary and Proprietor of M/s. S. K. Jain & Co. to conduct Secretarial Audit of the Company for the financial year 2015-16 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report is annexed to this Report as "Annexure II". Secretarial Auditor's Observations in Secretarial Audit Report and Directors explanation thereto- The Company has appointed Mr. Krunal Shashiraj Shah an Associate Member of Institute of Company Secretaries of India (Membership No. A- 26087) under Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as Company Secretary at the Meeting of Board of Directors held on 13th August, 2015. Explanation: The Company was in search of suitable candidate for the appointment as Company Secretary in whole time employment. It took some time and the Company appointed Mr. Krunal Shah, an Associate Member of Institute of Company Secretaries of India (Membership No. A- 26087) as Company Secretary of the Company at the Meeting of Board of Directors held on 13th August, 2015. RELATED PART Y TRANSACTIONS Ail transactions entered into with related parties during the financial year under review were in the ordinary course of business and on arm's length basis. The particulars of contracts or arrangements with aforesaid related parties, in prescribed format is annexed to this Report as "Annexure III". The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on the website of the Company - www.ptlonline.com RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY Your Company has in place a mechanism 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. Your Company's internal control Systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested by Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee. VIGIL MECHANISM/WHISTLE BLOWER POLICY The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors for reporting to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted/framed from time to time. The details of said vigil mechanism is given in Corporate Governance Report, which forms part of this Annual Report. The Whistle Blower Policy has been uploaded on the Company's website i.e. www.ptlonline.com NOMINATION AND REMUNERATION POLICY In terms of requirements prescribed under Section 178(3) of the Companies Act, 2013, the Nomination and Remuneration Policy inter-alia providing the terms for appointment and payment of remuneration to Directors and Key Managerial Personnel is annexed to this Report as "Annexure IV". TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF) During the year under review, the Company has transferred a sum of Rs. 95,302/- to Investor Education and Protection Fund (IEPF) pursuant to Section 205C of the Companies Act, 1956 read with the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001. The said amount represents dividend for the year 2007-08 which remained unclaimed by the members of the Company for a period exceeding 7 years from its due date of payment. PARTICULARS OF EMPLOYEES Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided under "Annexure V", which is annexed to this Report. None of the employees of the Company were in receipt of monthly or yearly remuneration in excess of the limits specified under the Companies Act, 2013 and Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The full Annual Report including aforesaid information is being sent electronically to ail those Members who have registered their email addresses and is also available on the website of the Company. MANAGEMENT DISCUSSION AND ANALYSIS The Management Discussion & Analysis Report as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is annexed to this Report as "Annexure VI". INTERNAL FINANCIAL CONTROLS Your Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weaknesses were observed. PERFORMANCE EVALUATION The Company has devised a policy for evaluation of Performance of the Board of Directors, its Committees and individual Directors ('Policy"). The evaluation involves assessment of performance individually of each of the Board Members and of the entire Board of Directors and its Committees. The performance evaluation criteria of the entire Board of Directors inter alia comprised of the following key areas: i) the role of a Board Members is clearly defined and understood; ii) the Board has ensured that the organization's accomplishments and challenges are communicated to Members and Stakeholders; iii) the spread of talent within the Board reflect the Company's needs; iv) ail Board Members bring valuable skill and experience to the Company; v) the composition of the Board is sufficient to carry out the work required of it; vi) the matters relating to the Company are discussed in a structured manner; vii) the Board knov/s and understand the Company's mission, vision and strategy; the Board's Meeting agenda clearly reflects strategies plan or priorities; viii) the Board papers contain the correct amount and type of information; ix) ail Board Members participate in important Board discussions; x) the Board knows and keep abreast of trends and issues affecting the market in which the Company competes; xi) the Board understands the business it is governing; xii) the Board Members actively engage in networking for the benefit of the Company; xiii) the Board Members have sufficient financial skills to ensure that the Board can discharge its governance responsibilities; xiv) the Company have relevant internal reporting and compliance Systems; xv) the Board Members are aware of their risk assessment duties as Directors; xvi) there is a clear understanding of the Company's business risk; xvii) the Board encourages Directors to pursue opportunities for personal development; xviii) the Board have a succession plan in place for the Directors, KMP and Senior Management Personnel; xix) responsibilities have been effectively delegated amongst the Executive Directors, KMP and Senior Management Personnel; xx) there is good communication between the Board and KMP. The evaluation framework for assessing the performance of Committee(s) of Board of Directors inter-alia comprised of the following key areas: i) the Committees have been constituted in compliance with the requirement of Listing Regulations and the Companies Act, 2013 read with the Rules thereunder ii) the role/terms of reference of the Committee Members is clearly defined and understood; iii) the composition of the Committee is sufficient to carry out the work required of it; iv) the Committee knows and understands the Company's mission, vision and strategy; v) the Cornmittee's Meetings are properly conducted and agenda papers contain the correct amount and type of information; vi) ail Committee Members participate in discussion making; vii) the Committee Members have sufficient skills to ensure efficient discharge of responsibilities; viii) there is good communication between the Committees and the Board. ix) the Committee has relevant internal reporting and compliance Systems; The performance evaluation process of individual Directors inter alia comprised of the following key areas: i) uphold ethical standards of integrity and probity; ii) act objectively and constructively while exercising their duties; iii) exercise their responsibilities in a bona fide manner in the interest of the Company; iv) devote sufficient time and attention to their professional obligations for informed and balanced decision making: v) assist the Company in implementing the best corporate governance practices; vi) strive to attend ail Meetings of the Board of Directors and of the Board committees of which they are members; vii) moderate and arbitrate in the interest of the Company as a whole, in situations of conflict between Management and Shareholder's interest; viii) satisfy themselves on the integrity of financial information and that financial controls and the Systems of risk Management are robust and defensible; ix) strive to safeguard the interests of ail stakeholders, particularly the minority shareholders; x) balance the conflicting interest of the stakeholders; xi) seek appropriate clarification or amplification of information and. where necessary, take and follow appropriate professional advice and opinion of outside experts; xii) keep themselves well informed about the Company and the external environment in which it operates; xiii) participate constructively and actively in the committees of the Board in which they are chairpersons or members; xiv) strive to attend the general Meetings of the Company; xv) acting within their authority, assist in protecting the legitimate interests of the Company, shareholders and its employees; xvi) pay sufficient attention and ensure that adequate deliberations are held before approving related party transactions and assure themselves that the same are in the interest of the Company; xvii) ascertain and ensure that the Company has an adequate and functional vigil mechanism and ensure that the interests of a person who uses such mechanism are not prejudicially affected on account of such use; xviii) report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's code of conduct or ethics policy, if any; xix) maintain confidentiality of information such as commercial secrets, technologies, advertising and sales promotion plans, unpublished price sensitive information, unless such disclosure is expressly approved by the Board or required by law; xx) abide by Company's Memorandum and Articles of Association, Company's policies and procedures including code of conduct, insider trading guidelines etc; xxi) they express concerns about the running of the Company or a proposed action and ensure that these are addressed by the Board and, to the extent that they are not resolved, insist that the concerns are recorded in the Minutes of the Board Meeting; xxii) develop a good working relationship with other Board members and contribute to the Board's working relationship with the senior Management of the Company, xxiii) fairly contribute towards proper functioning of Board or Committees of the Board. The evaluation framework for assessing the performance of Independent Directors inter-alia comprised of the following key areas: i) satisfy the criteria for independence as prescribed under Section 149 of the Companies Act, 2013 and the Listing Regulations; ii) help in bringing an independent judgment to bear on the Board's deliberations especially on issues of strategy, performance, risk Management, resources, key appointments and standards of conduct; iii) bring an objective view in the evaluation of the performance of Board and Management; iv) actively scrutinise the performance of Management in Meeting agreed goals and objectives and monitor the reporting of performance; v) undertake appropriate induction and regularly update and refresh their skills, knowledge and familiarity with the Company; vi) contribute to determine appointment and remuneration of executive Directors, Key Managerial Personnel (KMP) and senior Management; vii) exercise objective independent judgment in the paramount interest of the Company as a whole, while concurring in or dissenting from the collective judgment of the Board in its decision making. In terms of the Policy, a process of evaluation was undertaken by the Board for its own performance and that of its Committees and individual Directors. The evaluation process focused on various aspects of the functioning of the Board and Committees. Separate exercise was carried out to evaluate the performance of individual Directors on specified parameters. The outcome of evaluation process was shared with the Board, Chairman of respective Committees and individual Directors. Based on the outcome of the evaluation, the Board and Committees have agreed on an action plan for the identified areas. The details of programme for familiarization of Independent Directors with the Company, industry in which it operates, their roles, rights, responsibilities is made available on the website of the Company -www.ptlonline.com INDEPENDENT DIRECTORS MEETING During the year under review, the Independent Directors of the Company met on February 3, 2016, inter-alia, to discuss: i) Evaluation of performance of Non-independent Directors and the Board of Directors of the Company as a whole. ii) Evaluation of performance of the Chairman of the Company, taking into view of Executive and Non-Executive Directors. iii) Evaluation of the quality, content and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties. GENERAL 1) The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise. 2) The Whole Time Director has not received any commission from the Company nor any remuneration or commission from any of its holding or subsidiary company. 3) There are no significant/material orders passed by the regulators/courts/tribunals during the year under review which would impact the going concern status of your Company and its future operations. 4) During the year under review, there were no reported instances of cases filed pursuant to Sexual Harass-ment of Women at Workplace (Prevention, Prohibition and Redressed) Act, 2013. ACKNOWLEDGEMENTS Your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its Shareholders, their employees, regulatory authorities and its bankers. Your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year. For and on behalf of the Board of Directors Purusottamdas Patodia Chairman and Managing Director Place : Mumbai Date : May 6, 2016 |