DIRECTORS REPORT TO THE MEMBERS Your Directors have pleasure in presenting 24th Annual Report on the business and operations of the Company and the Financial Statement for the year ended 31 March 2015 2. Performance of the Company The highlights of the company's performance as under: Financial Overview (Consolidated Performance) Our revenues were lower by 9.00% at Rs.69,664 lakhs during the year compared to Rs.76,422 lakhs in the previous year. Expenses also reduced by 9.00% to Rs.50,233 lakhs from Rs.55,047 lakhs in the previous year. Earnings Before Interest Taxes and Depreciation was lower by 7% at Rs.20,437 lakhs as compared to Rs.22,082 lakhs. EBITDA margins expanded from 28.9% to 29.3% during the year. Profit After Tax (post minority interest) was lower by 29% at Rs.6,532 lakhs compared to Rs.9,204 lakhs in the previous year. Earnings Per Share stood at Rs.8.62 as compared to Rs.12.15 last year. Dividend of Rs.2.00 per share, amounting to a payout of 23.00% of the year's profits, has been recommended by the Board of Directors. We recorded new sales bookings of 2.9 million square feet during the year, higher by 38%, against 2.1 million square feet in the previous year. The value of area sold was Rs.1,67,796 lakhs, up 46% as compared to Rs.1,15,040 lakhs in the previous year. The average sales price realization stood at Rs.5,871 per square foot during the year as compared to Rs.5,412 per square foot in the previous year, higher by 8%. Financial Overview (Standalone Performance) Our revenues in 2014-15 were lower by 10% during the year at Rs.16,837 lakhs compared to Rs.18,723 lakhs in the previous year. Earnings Before Interest Taxes and Depreciation increased by 17% at Rs.4,289 lakhs as compared to Rs.3,664 lakhs in the previous year. EBITDA margins expanded from 19.6% to 25.5% during the year. Profit After Tax was lower by 6% at Rs.4,363 lakhs compared to Rs.4,638 lakhs in the previous year. Earnings Per Share stood at Rs.5.76 as compared to H6.12. 3. Dividend Your Directors have recommended a final dividend of Rs.2 per equity share on 7,57,74,909 equity shares of Rs.10 each. This dividend is subject to the approval of the members at the ensuing 24th Annual General Meeting. 4. Allotment of Non-Convertible Debentures During the year under review, the Company has allotted 700 Senior Secured Rated Listed Taxable Redeemable Non-Convertible Debentures of Rs.1,000,000 each fully paid through private placement. The Company has created Debenture Redemption Reserve of Rs.583 Lakhs. 5. Fixed Deposits During the year under review, the Company has not accepted any fixed deposits under the provisions of the Companies Act, 2013 ("the Act") and the Company has repaid all the fixed deposits accepted under the provisions of the Companies Act, 1956. There is no default in repayment of any deposits/interest thereon. 6. Internal financial controls The Company has adequate internal financial controls with reference to financial statements. 7. Details of Subsidiary/Joint Ventures/ Associate Companies The Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in Form AOC - 1 is annexed as Annexure I. 8. Directors and Key Managerial Personnel Pursuant to Section 152 of the Act, read with Article 167 of the Articles of Association of the Company, Mr. Naresh Patil -Vice Chairman (DIN 00881077) will retire by rotation and being eligible, offered himself for re-appointment at this ensuing Annual General Meeting. During the year under review, Mrs. Shraddha Jain was appointed as Chief Financial Officer of the Company by the Board of Directors in their meeting held on 18 October 2014. The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and Clause 49 of the Listing Agreement with the Stock Exchanges. The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of the non-executive directors and executive directors. The Board members are provided with necessary documents, reports and policies to enable them to familiarise with the Company's business. Periodic presentations are made at the Board and Committee Meetings, on business and performances. The details of such familiarization programmes for Independent Directors are posted on the website of the Company and can be accessed at <http://www.koltepatil.com/investors/corporate->governance. The Policy for selection of Directors and determining Directors independence and Remuneration Policy for Directors, Key Managerial Personnel and other employees is annexed as Annexure II. 9. Meetings of the Board of Directors Eight Board Meetings were held during the year and the gap between two meetings did not exceed four months. The dates on which the board meeting were held as follows: 20 May 2014, 28 June 2014, 13 August 2014, 18 October 2014, 11 December 2014, 16 January 2015, 23 January 2015 and 21 March 2015. 10. Statutory Auditors M/s. Deloitte Haskins & Sells LLP (LLP Registration No. AAB- 8737, FRN - 117366W/W-100018), Chartered Accountants, Pune hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Act, and that they are not disqualified for re-appointment. The Board of Directors recommend their appointment. 11. Contracts or arrangements with related parties During the year under review, all transactions/arrangements entered by the Company with related parties were in the ordinary course of business and on an arm's length basis. All Related Party Transactions are approved by the Audit Committee. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link: <http://www.koltepatil.com/investors/corporate-governance>. The details of all transactions/arrangement with related party are given in the Note No. 41 in Notes to Accounts forming part of the Audited Finance Statement. 12. Conservation of energy, technology absorption and foreign exchange earnings and outgo As the Company is not engaged in the manufacturing activities, the information related to Conservation of energy, technology absorption has not been provided. The details of Foreign Exchange earnings and outgo are given in Note No. 31 in Notes to accounts forming part of the Audited Financial Statements. 13. Particulars of loans, guarantees and investments The particulars of loans, guarantees and investments are given in Note No. 13 and 47 in Notes to accounts forming part of the Audited Financial Statements. 14. Extract of the annual return Pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules 2014, the extract of the annual return in Form No. MGT - 9 as provided in Annexure III. 15. Corporate Social Responsibility (CSR) In compliance with Section 135 of the Act, read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and Report on CSR Activities forms part of this Report as Annexure IV. 17. Vigil mechanism for directors and employees The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee. The Company seeks to maintain the highest ethical and business standards in the course of its business and has put in place mechanism of reporting illegal or unethical behavior. Directors, employees, vendors or customers may report violations of the laws, rules, regulations or unethical conducting by writing to the notified person. The report received from employees will be reviewed by Audit Committee. The Directors and Management Personnel are obligated to maintain confidentiality of such reporting and ensure that the whistle blowers are not subjected to any discriminatory practices. No person has been denied access to the Audit Committee. The said policy can be accessed at <http://www.koltepatil.com/> investors/corporate-governance 19. Managerial Remuneration The Details required as per Rule 5(1) and (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure V. 20. Employee Stock Option Scheme The Nomination and Remuneration Committee of the Board of Directors of the Company, inter alia, administers and monitors the Employees' Stock Option Scheme of the Company in accordance with the applicable SEBI Guidelines. The applicable disclosures as stipulated under the SEBI Guidelines as on 31 March 2015 (cumulative position) with regard to the Employees' Stock Option Scheme (ESOS) are provided in Annexure VI. 21. Secretarial Audit Report Pursuant to Section 204 of the Companies Act 2013, the Company had appointed M/s. SVD & Associates, a Firm of Practicing Company Secretaries, Pune as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2014-15. The Report of Secretarial Auditor for the FY 2014-15 is annexed to this report as Annexure VII. 22. Corporate Governance Certificate Report on Corporate Governance for the FY 2014-15, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report. The Company has obtained the Compliance certificate for the FY 2014-15 from the statutory auditors i.e. M/s. Deloitte Haskins & Sells LLP for the compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement. 23. Risk management policy The Company has constituted Risk Management Committee comprising 6 members, of which 3 members are Independent Directors. The Risk Management Committee has approved the Risk Management Policy. The Committee monitors the policy, ensures that the Company is acting appropriately to achieve prudent balance between the risk and reward and evaluates significant risk exposures and assesses the management's actions to mitigate the exposures. 24. Directors' Responsibility Statement Your Directors state that: a) in the preparation of the annual accounts for the year ended 31 March 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same, b) the Directors have selected such accounting policies and applied them consistently and 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 31 March 2015 and of the profit of the Company for the year ended on that date, c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, d) the Directors have prepared the annual accounts on a 'going concern' basis, e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively, and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 25. Management's Discussion And Analysis Report Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges, is presented in a separate section forming part of the Annual Report. 26. Acknowledgements Your Directors take this opportunity to thank customers, fixed deposit holders, vendors, stakeholders, Central and State Governments, business associates and bankers for their consistent support and co-operation to the Company. Your Directors take this opportunity to thank all the employees for consistently delivering quality to our customers. The employees have worked with the principles of honesty, integrity, fair play and helped ensure a sustained excellence in performance of the Company. Finally, the Directors would like to convey their gratitude to the members for reposing their confidence and faith in the Company and its management. For and on behalf of the Board of Directors, Rajesh Patil Chairman and Managing Director DIN 00381866 Date : 26 May 2015 Place ; Pune |