Mar 31, 2023
Your Directors have pleasure in presenting the 17th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March, 2023.
Rs. In Lacs |
||||
Particulars |
Standalone |
Consolidated |
||
F.Y.2022-23 |
F.Y.2021-22 |
F.Y.2022-23 |
F.Y.2020-21 |
|
Revenue from Operations |
358.04 |
385.48 |
69,823.96 |
21,943.42 |
Other Income |
10,575.97 |
3,702.93 |
10,901.36 |
4,707.43 |
Total Income |
10,934.01 |
4,088.41 |
80,725.32 |
26,650.85 |
Expenses |
||||
Operating Expenses |
3,851.85 |
26,080.12 |
141615.17 |
29417.88 |
Depreciation and Amortization |
12.62 |
17.42 |
42.33 |
69.25 |
Total Expenses |
3,864.47 |
26,097.54 |
1,41,657.50 |
29,487.13 |
Profit / (Loss) Before Finance Cost and Tax |
7,069.54 |
(22,009.13) |
(60,932.18) |
(2,836.28) |
Finance Cost |
1,513.97 |
8,096.03 |
5,441.20 |
28,572.31 |
Profit/ (Loss) before extraordinary items and tax |
5,555.57 |
(30,105.16) |
(66,373.38) |
(31,408.58) |
Exceptional Items |
- |
27,390.33 |
57,500.00 |
50,792.64 |
Profit/ (Loss) after extraordinary items and tax |
5,555.57 |
(2,714.83) |
(8,873.38) |
19,384.06 |
Share of Profit/ (Loss) from associates and joint ventures |
- |
- |
2,820.06 |
(5,134.35) |
Profit/(Loss) before Tax ( PBT) |
5,555.57 |
(2,714.83) |
(6,053.32) |
14,249.71 |
Tax Expense |
(2,038.46) |
(4,799.51) |
(2,947.33) |
(12,071.57) |
Profit/(Loss) after Tax (PAT) |
3,517.11 |
(7,514.34) |
(9,000.65) |
2,178.14 |
Other Comprehensive Income |
(2,983.08) |
7,590.96 |
(2,897.58 |
8,904.72 |
Total Comprehensive Income/ Loss for the year |
534.03 |
76.62 |
(11,898.23) |
11,082.87 |
Allotment of Equity shares pursuant to conversion of Convertible Warrants issued on Preferential basis:
During the previous year, the Company issued and allotted total 25,75,00,000 nos. of Convertible Warrants (Warrants) to Promoter Group & Investors (Non Promoter Group) in the following two phases in compliance with applicable provisions of the Companies Act, 2013 read with rules made thereunder as well as SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018. The summary thereof alongwith the details of Warrants converted into equity shares is given hereinunder:
Sr No. |
No. of Warrants allotted |
Date of Allotment of Warrants |
Description of Allottees |
Price per Warrant |
Warrants converted into Equity share till 31.03.2023 |
Warrants pending conversion into Equity shares |
Round 1 |
13,05,00,000 |
03.02.2022 |
Promoter Group & Investor |
43.15/- |
8,76,00,000 |
4,29,00,000 |
Round 2 |
12,70,00,000 |
16.03.2022 |
Promoter Group & Investors |
77.25/- |
2,12,96,000 |
10,57,04,000 |
Consequent to the above allotment of equity shares, the issued, subscribed and paid-up share capital of your Company as on 31st March, 2023 stood at Rs. 4,23,91,05,220/- divided into 35,21,54,782 Equity Shares of Rs. 10/- each and 717,55,740 Redeemable Preference Shares of Rs. 10/- each.
Utilisation of Funds raised through issue of Warrants on preferential basis:
During the year under review the Company has made following allotment of equity shares (upon conversion of part of Warrants into Equity shares). The details of funds raised and the manner of utilisation as on 31st March, 2023 are as below:
Particulars |
Total Proceeds (Rs in crores) |
Utilized (Rs in crores) |
Unutilized (Rs in crores) |
Allotment of Equity Shares, consequent to the conversion of 3,00,00,000 share warrants issued on Preferential basis on 21st July, 2022 (out of Round 1) |
97.09 |
97.09 |
Nil |
Allotment of Equity Shares, consequent to the conversion of 3,30,00,000 share warrants issued on Preferential basis on 29th September, 2022 (out of Round 1) |
107 |
107 |
Nil |
Allotment of Equity Shares, consequent to the conversion of 2,00,00,000 share warrants issued on Preferential basis on 29th September, 2022 (out of Round 2) |
115.88 |
115.88 |
Nil |
Allotment of Equity Shares, consequent to the conversion of 12,96,000 share warrants issued on Preferential basis on 25th January, 2023 (out of Round 2) |
7.51 |
7.51 |
Nil |
Allotment of Equity Shares, consequent to the conversion of 88,00,000 share warrants issued on Preferential basis on 28th March, 2023. (out of Round 1) |
28.48 |
28.48 |
Nil |
Employee Stock Option Plan 2022 (âESOP Scheme 2022â):
During the previous year, the Board of Directors and the shareholders of the Company at their meetings held on 3rd February, 2022 and shareholders of the Company at their meetings held on 4th March, 2022, approved âD B Realty Limited - Employee Stock Option Plan - 2022â to create, issue, offer, grant, allot and/or transfer from time to time, in one or more tranches up to 32,25,000 (Thirty Two Lakh Twenty Five Thousand) Employee Stock Options (âESOPsâ) exercisable into 32,25,000 (Thirty Two Lakh Twenty Five Thousand) equity shares of face value Rs. 10/- (Rupee Ten) each. The scheme is being implemented directly by the Company for which the Company has also obtained the in-principle approval from both the stock exchanges viz., BSE Limited and the National Stock Exchange of India Limited.
The Scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
During the year under review, the Company has granted 32,25,000 (Thirty Two Lakh Twenty Five Thousand) Employee Stock Options (ESOPs) under âESOP 2022â. The Exercise price of each option is Rs. 41.45 which is more than the face value of equity shares of the Company and less than the prevailing Market Price as on the date of the grant.
Disclosures pursuant to Regulation 14 read along with Part F of Schedule-I of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are placed on the Company''s: website under the weblink: https://www.dbrealtv.co.in/pdf/ESQP%20Statement%202022-23.pdf
The registered office of the Company has been shifted from DB Central, Maulana Azad Road, Rangwala Compound, Jacob Circle, Mumbai-400011 to 7th Floor, Resham Bhavan, Veer Nariman Road, Churchgate, Mumbai - 400 020 within local limits w.e.f 01st March, 2023.
Status of Projects of the Company / its Subsidiaries / Associates:
âDB Ozoneâ at Dahisar is a large residential project comprising of 25 residential buildings. The company, Neelkamal Realtors Suburban Private Limited., a subsidiary of the Company, is executing the Project. The Company has handed over more than 2700 flats to various customers as per their requirements spread across all the 25 residential towers of the project and internal finishing/ fittings work is in process. The project is registered under RERA. The Company had applied and obtained extension of project completion timeline from Maha RERA to December, 2024.
âTen BKCâ spread across five acres in BKC is the idyllic flagship residential project which has thoughtfully designed spaces, elite urban aesthetics, and fluid natural expanses to create a living experience that rejuvenates, relaxes, and excites. In the roaring heart of the city, Ten BKC is one of the biggest luxury residential projects in BKC, with extensive open spaces, a commanding lobby and towering view of the Arabian Sea from the top. The project comprises 15 towers of 22 & 29 storeys divided into three zones. The project is registered with RERA and the expected possession is in June, 2024. The Company and its JV partner Adani Good Homes Pvt. Ltd. are jointly developing the project.
âPrestige Liberty Towerâ, strategically located at Mahalaxmi, across the Mahalaxmi Race course is located in the historic textile mills at the heart of the city. The project is commissioned by Bangalore-based Prestige Group, one of the largest office ventures in the city, with two staggered towers of 200 and 290 meters and a five-story retail podium of 36,000m2 with a wide range of programs. The project has been designed by international architect and consultants. All necessary approvals have been obtained to commence construction and work has commenced in full swing on the site. Subsequent to the year end, the Company had entered into a pact to sell its remaining 50% partnership interest to the Prestige.
âBKC 101â at Bandra Kurla Complex, Mumbai is a marquee commercial project to be developed by an associate entity of the Company viz., Prestige (BKC) Realtors Pvt. Ltd. (Formerly known as DB (BKC) Realtors Pvt. Ltd.). The project is being developed as a Grade A office space in BKC. During the year under review, all approvals have been obtained by the SPV and work has commenced on site. Subsequent to the year end, the Company had entered into a pact to sell its remaining shareholding to Prestige Estates subsidiary Prestige Falcon Realty Ventures Pvt. Ltd.
Horizontal Ventures Pvt. Ltd., a step-down subsidiary of the Company has granted development rights of its land along with other co-owners to Man Vastucon LLP. The Company is entitled to revenue share from sale of units forming part of the project being developed and constructed. The majority construction work of Phase I of its mega real estate project namely "Aaradhya High Park'''' at Mahajanwadi within the jurisdiction of Mira Bhayandar Municipal Corporation is being completed and Man Vastucon LLP has received Occupation Certificate in respect thereof. Man Vastucon LLP has launched Phase II in the name of âAaradhya Parkwoodâ and has received a very good response to the Project.
âLokhandwala DB Realty Prestige LLP, Your Company in partnership with Prestige Group is developing SRA project situated at Worli, Mumbai spread over 17 Acres. The SPV has received LOI for the project during the year. The project is not yet named. The process of rehabilitation and construction is expected to commence in FY 2023-24.
During the year, one of the subsidiaries of the Company has obtained all the necessary approvals to commence construction of the project for which it had received a favourable order from the Hon''ble Supreme Court of India pursuant to which the freehold vacant land admeasuring 5.4 Acres situated in Andheri (East), Mumbai is now available for development in the previous year. The Company intends to monetize/enter joint venture for this parcel of land in FY 2023-24.
Further, during the year, a wholly owned subsidiary of the Company has executed Deed of Conveyance in favour of Godrej Residency Pvt. Ltd. (GRPL) for sale of land/ project being all the piece and parcel of land admeasuring 19,434 sq. mtrs. situated at Byculla, Mumbai (Land) and it has also entered into joint venture with Godrej Properties Limited (GPL) for development of the said land. The project will be developed by GRPL, wherein the wholly owned subsidiary of the company holds 49.99% and balance 50.01% is held by GPL.
During the year, the Company has also obtained shareholders'' approval to disinvest/sale/exit its entire investment/partnership interest to the extent of 75% in ECC DB Joint Venture, which has been developing âDB Skyparkâ project located at Sahar, Mumbai. The Company is expected to receive cash consideration and an area equivalent to 24,250 sqft of carpet area across the project.
Other projects of the Company are awaiting certain approvals pursuant to which it shall monetize these large land parcels.
Status of Scheme of Arrangement:
The following updation on Scheme of Arrangement are provided herein below:
i) Real Gem Buildtech Private Limited (a wholly owned subsidiary Company of the Parent Company, hereinafter referred to as âWOSâ) has during the year ended March 31,2019 filed a Scheme with National Company Law Tribunal (NCLT) whereby it has proposed to transfer all of its assets and liabilities pertaining to Identified Project Undertaking, being "DB Crown" Project on going concern basis as a Slump Sale to Kingmaker Developers Private Limited (âKDPLâ). Pursuant to the above application, the NCLT passed certain directions vide order dated November 5, 2019. However, the Company could not comply with the said directions under the above order on account of various reasons including COVID-19. The management is proposing to file an application for reissuance of the above directions. The Company has obtained a legal opinion which confirms that the Company can make such an application for reissuance of the above directions. The management is hopeful that upon filing of new application, it will secure reissuance of the directions from NCLT and in due course of time, the Scheme filed by the Company shall be approved by the NCLT. The impact in the books of accounts of the Company on account of disposal of the Project Undertaking on a Slump Sale basis will be made in the year in which the approval is accorded to the Scheme by NCLT, including the gains, contingent gains and the income-tax thereon. Further, the said WOS has shown its assets and liabilities relating to project undertaking as assets held for sale and liabilities pertaining to disposal group in accordance with Ind AS 105 - "Non Current Assets Held for Sale".
ii) During the year under the review, the composite Scheme of Amalgamation and Arrangement ("Scheme") was entered into amongst Platinumcorp Affordable Builders Private limited ("Transferor Company") and Royal Netra Constructions Private Limited ("Transferee Company/ subsidiary companyâ) and their respective shareholders under Sections 230 to 232, Section 66 and other applicable provisions of the Companies Act, 2013 and the same has been filed with National Company Law Tribunal in June, 2022.
iii) The Composite Scheme of Merger (âSchemeâ) was entered into between DB Man Realty Limited and Spacecon Realty Private Limited (collectively referred to as âTransferor Companiesâ / WOS of the Company) with DB View Infracon Private Limited (âTransferee Companyâ / WOS of the Company) and their respective shareholders under Sections 230 to 232 and other relevant provisions of the Companies Act, 2013 and the same has been filed with National Company Law Tribunal, Mumbai in January, 2023.
Your Directors do not recommend dividend for the current year under review.
It is not proposed to transfer any amount to reserves out of the profits earned during FY 2022-23.
Subsidiaries, Associate companies and Joint ventures:
During the year under review, the Company has entered into Memorandum of Understanding(s) (MOU) on 4th April, 2022 with shareholders of 1) Shiva Buildcon Private Limited 2) Shiva Multitrade Private Limited and 3) Shiva Realtors Suburban Private Limited (hereinafter collectively referred as "Shiva Group Companies") to acquire entire equity shares of Shiva Group Companies from its existing shareholders in accordance with terms and conditions as contained in the aforesaid MOUs. Post acquisition, the shiva group companies shall become wholly owned subsidiary companies.
The Company has acquired entire equity shares of Great View Buildcon Pvt Ltd. (formerly known as Turf Estate Realty Private Limited) from Turf Estate Joint Venture LLP/ its nominees (a joint venture in which the Company already holds 50% stake) thus making it wholly owned subsidiary company.
The Company has acquired entire equity shares of Spacecon Realty Private Limited , a subsidiary company in which the Company already holds 74% stake, thus making it wholly owned subsidiary company.
The Company has acquired entire equity shares of DB Man Realty Limited, a subsidiary company which the Company already holds 91% stake, thus making it wholly owned subsidiary company.
Further, during the year, Neelkamal Realtors Tower Private Limited (NRTPL), a wholly owned subsidiary company has executed Deed of Conveyance in favour of Godrej Residency Pvt. Ltd. (GRPL) for sale of land/ project being all the piece and parcel of land admeasuring 19,434 sq. mtrs. or thereabouts bearing Cadastral Survey No. 1906 of Byculla Division, E-Ward, Mumbai- 400011 (Land). Further, NRTPL has also entered into a Share Purchase Agreement with Godrej Properties Limited (GPL) for development of the said Land. The project will be developed by GRPL, wherein NRTPL holds 49.99% and balance 50.01% is held by GPL.
Post 31st March, 2023, the Company/ its WOS has executed Securities Purchase Agreement on 29th May, 2023 for proposed transfer of its entire stake in Prestige (BKC) Realtors Pvt Ltd., joint venture between the Company and subsidiary of Prestige Group executing âBKC 01â Project at BKC. Post sale of aforesaid shares, the Company/ its WOS shall cease to hold shares in the said Joint Venture.
Post 31st March, 2023, the Company has executed Deed of Transfer of Partnership interest on 29th May, 2023 for proposed transfer of its entire 50% rights, interest and share in Turf Estate Joint Venture LLP, joint venture between the Company and subsidiary of Prestige group executing âTurf Projectâ at Dr. E. Moses Road, Mahalaxmi. Post transfer of partnership interest, the Company/ its WOS shall cease to hold stake in the said joint venture.
The Consolidated financial statements have been prepared in accordance with the provisions of the Companies Act, 2013, applicable Ind AS and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and include the financial information of its subsidiaries/associates and joint venture entities / partnership firms in which your Company holds stake. The audited financial statements of the subsidiary companies will be available for inspection by any member at the registered office of the Company and at the Company''s website www.dbrealtv.co.in. Copies of the audited financial statements of the subsidiaries can be sought by any member by making a written request in this regard.
In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company''s subsidiaries, associates and joint venture companies in Form AOC-1 is attached to the financial statements of the Company. The statement also provides the details of performance and financial positions of each of the subsidiaries, associates and joint venture companies.
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report for the year under review as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report (Annexure A).
Corporate Governance and Shareholders Information:
In compliance with the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Secretarial Auditors on its compliance, forms an integral part of this report. (Annexure B)
During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 including any statutory modification(s) or re-enactment(s) for the time being in force.
Directors and Key Managerial Personnel (KMPs):
1. Directors retiring by rotation
In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company. Mr. Vinod K. Goenka (DIN: 00029033) retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for reappointment.
2. Re- appointment of Managing Director
Mr. Vinod Goenka (DIN: 00029033) was re-appointed as an Executive Chairman cum Managing Director of the Company for a period of three (3) years with effect from 1st September, 2022 to 31st August, 2025.
3. Independent Directors Statement
All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and were placed at the Board Meeting.
In the opinion of the Board, the Independent Directors fulfill the conditions specified in these regulations and are independent of the management. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
The Board is also of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the field of finance, strategy, auditing, tax, risk advisory, financial services and infrastructure and real estate industry and they hold the highest standards of integrity.
In compliance with Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors have included their names in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.
Mr. Vinod Goenka, Chairman and Managing Director and Mr. Shahid Balwa, Vice Chairman and Managing Director, Mr. Atul Bhatnagar, Chief Financial Officer and Mr. Jignesh Shah, Company Secretary of the Company are Key Managerial Personnel as per the provisions of the Companies Act, 2013.
During the financial year ended 2022-23, Mr. Asif Balwa resigned as Chief Financial Officer and Key Managerial Personnel of the Company with effect from the closing of business hours on 5th January, 2023. Mr. Atul Bhatnagar who has been acting as Joint Chief Financial Officer and Key Managerial Personnel of the Company has been redesignated as Chief Financial Officer and Key Managerial Personnel of the Company by the Board of Directors with effect from 6th January, 2023.
Performance Evaluation of the Directors, Committee and Board:
The performance of the Directors is evaluated on the basis of their contributions at the meetings, strategic inputs for the performance and growth of the Company among others. The Directors have carried out performance evaluation on annual basis of Directors, Committees, and the Board. The Nomination and Remuneration Committee of the Board has laid down the performance evaluation framework under which performance of every Director is evaluated. The framework also provides the manner in which the Directors as a collective unit in the form of Board Committees and the Board function and perform.
Particulars of Loans, Guarantees or Investments:
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. However, the Company, being a company engaged in the business of providing infrastructural facilities is exempt from the applicability of the relevant provisions of the Companies Act, 2013.
Contracts or Arrangements with Related Parties:
All transactions entered into during the financial year 2022-23 with Related Parties as defined under the Companies Act, 2013 and SEBI LODR Regulations were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any transaction referred to in Section 188 of the Companies Act, with related parties which could be considered material under SEBI LODR Regulations. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) of the Companies Act in Form AOC-2 is not applicable. The necessary Related Party Transactions are periodically placed before the Audit Committee, Board as well as Shareholders for approval, whenever applicable. Attention of Members is drawn to the disclosures of transactions with related parties set out in Notes to the financial statements.
The policy on materiality of Related Party Transaction and also on dealing with Related Party Transaction as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is https://www.dbrealtv.co.in/pdf/Policv%20on%20Related%20Partv%20Transactions.pdf
The members, at the 15th Annual General Meeting held on 30th September, 2021, has appointed M/s. N. A. Shah Associates LLP, Chartered Accountants (Firm Registration No116560W/W100149) as the Statutory Auditors of the Company, to hold office for a term of five years from the conclusion of the this AGM until the conclusion of 20th AGM of the Company on such remuneration as may be determined by the Board of Directors.
Auditors'' Report and Audit Observation:
The Statutory Auditors have made observations under the heading ''Emphasis of matter'' and ''Other Matters'' in their reports on the Standalone Financial Statements and Consolidated Financial Statements respectively, which together with the relevant Notes are self-explanatory and do not call for further information/clarification.
Qualification by Auditors and our comments thereon:
The Statutory Auditors have qualified their report on certain matters and which are repetitive in nature. The details of such qualifications as mentioned in their Report with your Directors'' response thereon is as under:
1. Para 2(1) of the Audit Report on the Standalone Financial Statements (SFS) and Para 2(1) of the Consolidated Financial Statements (CFS read) with Note No. 43.2D(xiv) of SFS and 51.2(D)(xiii) of CFS with respect to measurement of financial guarantees at fair value under ''Indian Accounting Standard (Ind AS) 109 - Financial Instruments'' is not done:
a. During the year, one of the lenders has invoked the corporate guarantee given by the Company on behalf of a related party (principal borrower). As per the communication the total demand is Rs. 76,038.97 lacs, which has been contested by the Company vide its response to the said communication. The lender had confirmed / acknowledged the amount of Rs. 23,636 lacs vide its letter dated 8th March, 2021. The Company, in its response to the invocation of the corporate guarantee, has made an offer to pay Rs. 25,400 lacs as a part of its obligation as a guarantor which will also be reimbursed to the Company by such related party.
With regard to point no. a as above, the management based on the market value of the various other primary securities, corporate guarantee and undertaking by the holding company of the related party entity (for whom guarantee was provided) is confident of recovering the amount payable (if any) to the lenders from the said related party and its holding company and accordingly is of the view that provision is not required to be made.
b. Financial guarantees and securities given by the Company on behalf of certain entities (referred as principal borrowers) who have defaulted in their principal payment obligations to the lenders aggregating to Rs. 24,547.62 lacs as per SFS and Rs. 6,811.47 lacs as per CFS (excluding interest, penal interest and other charges). The loans taken by these entities have also been secured by charge on the underlying assets of the said entities and assets of other related parties. Valuation report of such primary / underlying assets provided as securities by the borrowing companies has not been obtained from an independent valuer. Further, out of Rs. 24,547.62 lacs as per SFS as above, during the year, one of the subsidiary companies (i.e. principal borrower), has entered into one time settlement with lender equivalent to loans of Rs. 17,736.15 lakhs. The principal borrower has requested for extension of time for the installment due on 31st March, 2023 from the lender which has been in principle agreed by the lender subject to execution of necessary addendum settlement agreement which is in the process of being executed.
With regard to point no. b, the management is of the view that the value of such primary / underlying assets provided as securities is greater than the outstanding loans and hence additional liability will not devolve on the Company/ Group inspite of the guarantee and securities provided by the Company/ Group. In the above amounts, interest and other charges are not included as the same cannot be quantified as the respective borrower/s had disputed the same and also since settlement proposal is in discussion by the respective borrowers with their lenders.
c. Further, financial guarantees and securities given by the Company on behalf of certain entities (related parties) who have defaulted in their principal payment obligations to the lenders aggregating to Rs. 35,240.50 lacs as per SFS and Rs. 36,280.50 lacs as per CFS (excluding interest, penal interest and other charges). The loans taken by these entities have also been secured by charge on the underlying assets of the said entities and assets of other related parties. The other details about one time settlement with lender entered into by the borrower entity subsequent to the year end as well as the SEBI matter has been mentioned in this point.
With regard to above point no. c, the value of primary / underlying assets provided as securities by the borrowing companies is greater than the outstanding loans and hence in view of the management no additional liability is expected to devolve on the Company/Group. In the above amounts, interest and other charges are not included as the same cannot be quantified as the respective borrower/s had disputed the same and also since settlement proposal is in discussion by the respective borrowers with their lenders. The other details about one time settlement with lender entered into by the borrower entity subsequent to the year end as well as the SEBI matter has been mentioned in this qualification point, which is self-explanatory.
2. Para 2(2) of the Audit Report on the SFS and Para 2(2) of CFS read with Note No.48 of SFS and 49A(2) of CFS refer to non-evaluation of impairment provision, towards expected credit losses in respect of the loans and advances / deposits and towards diminution in the value on the Company''s/ Group''s investments, that were invested in /advanced to certain subsidiaries and other parties which have incurred significant losses and/or have negative net worth as at 31st March, 2022 and/or have pending legal disputes with respect to the underlying projects/ properties of respective entities. In reply thereto, as already explained in detail in Note No.48 of SFS and 49A(2) of CFS, your Directors state that the underlying projects in such entities are in the early stages of real estate development and are expected to achieve adequate profitability on substantial completion and/ or have current market values of certain properties which are in excess of the carrying values. The Company considers its investments and loans in such entities as long term and strategic in nature. Accordingly, no provision is considered necessary towards diminution in the value of the Company''s investments in such entities and for expected credit losses in respect of loans and advances given to such entities, which are considered good and fully recoverable.
3. Para 2(3) of the Audit Report on the SFS and Para 2(3) of the CFS read with Note No. 25.6 of SFS and 29.3(iv) of CFS mention that consequent to the ongoing negotiations as regards one-time settlement the Company/ Group has not provided for interest on loan from financial institutions. Had this provision for interest on loan been made, standalone profit (excluding other comprehensive income) for the year end would have been lower by the amount as mentioned in the Audit Report and the balance in other equity would have been lower by cumulative unprovided interest. Had this provision for interest on loan been made, consolidated loss (excluding other comprehensive income) for the year end would have been higher by the amount as mentioned in the Audit Report and the balance in other equity would have been lower by cumulative unprovided interest. In reply thereto, as already explained in detail in Note No. 25.6 of SFS and 29.3(iv) of CFS, your Directors state that the Company has not provided for interest on loan from one of the financial institutions considering the ongoing discussions/ negotiations with lenders as regards to one time settlement. Further, the said WOS is under discussion with the lender and will recognize its interest liability at the time of settlement.
Secretarial Auditors and Secretarial Audit Report:
Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed Mr. Vicky M. Kundaliya of M/s. V. M. Kundaliya & Associates, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2022-23.The Company has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2022-23 is annexed to this report as Annexure C. The said report does not contain any adverse observation or qualification or modified opinion.
Also, the Secretarial Audit Reports for the FY 2022-23 of Neelkamal Realtors Suburban Private Limited (NRSPL), and MIG (Bandra) Realtors & Builders Private Limited (MIG), the material unlisted subsidiaries of the Company, form part of this report as Annexure C1 and Annexure C2 respectively.
The Secretarial Audit Report of the aforesaid material subsidiaries do not contain any qualifications or adverse marks except in case of NRSPL, there is requirement of appointment of an Independent Director and on account thereof, re-constitution of Audit Committee and re-constitution of Nomination and Remuneration Committee. The appointment of an Independent Director is in compliance with the requirements of SEBI LODR as well as Companies Act, 2013 are in process and accordingly Audit Committee and Nomination & Remuneration Committee will be reconstituted and necessary compliance will be made. Further, as informed to Stock Exchanges vide disclosure dated 5th April, 2022, the Company intends to buy the entire equity stake from shareholders entities holding NRSPL shares and upon making payment of full acquisition consideration, such entities shall become WOS of the Company and thus indirectly NRSPL shall also be a WOS of the Company.
Business Responsibility and Sustainability Reporting:
In compliance with the Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI circulars issued from time to time, the Business Responsibility and Sustainability Report for the financial year ended 31st March, 2023 is annexed to this report as Annexure D.
Maintenance of Cost Records under Section 148(1) of the Companies Act, 2013:
The maintenance of cost records as specified under Section 148(1) of the Companies Act, 2013 is not applicable to the Company as the Company does not fall under the criteria for which such records are required to be maintained.
Internal Financial Control Systems and their Adequacy:
The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposal of its assets. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. Your Directors have also appointed a professional firm to examine the adequacy of these controls and the work of designing controls, documenting risks control matrix for each area of business operation and implementation thereof.
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 and the Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate.
The Nomination and Remuneration Policy provides for appropriate composition of Executive, Non-Executive and Independent Directors on the Board of Directors of your Company along with criteria for appointment and remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of your Company.
Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The policy comprehensively provides an opportunity for any employee/Director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channel. The Vigil Mechanism Policy has been uploaded on the website of the Company at http://www.dbrealtv.co.in/pdf/Whistler Blower.pdf
During the year under review, no instances of fraud were reported by the Statutory Auditors and Secretarial Auditors of the Company.
The Board of Directors reviews the risk management policy from time to time and the said policy aims at enhancing shareholders'' value and providing an optimum risk-reward trade off. 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.
Corporate Social Responsibility Committee:
As per the provisions of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee constituted by the Board of Directors exists. The CSR Policy is available on the website of the Company at https://www.dbrealty.co.in/pdf/ DBRL Corporate Social Responsibility (CSR) Policy.pdf
However, during the financial year under review, in view of the average losses in the last three financial years, the provisions set out under Section 135 of the Companies Act, 2013 read with rules made thereunder were not attracted. Hence, the compliances to the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, are not required.
Annual Return:
Pursuant to the provisions of Section 134(3)(a) of the Companies Act, 2013, the Annual Return for the financial year ended 31st March, 2023 is available on the website of the Company at www.dbrealty.co.in under the section ''Investor''.
Number of Board Meetings during 2022-23:
The Board met seven (7) times during the financial year 2022-23 and the details are mentioned in the Corporate Governance Report which is annexed to the Directors Report. Additionally, on 14th February, 2023, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Directors'' Responsibility Statement:
In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:
a) In the preparation of the annual accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) they have 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 on 31st March, 2023 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis.
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Familiarization Programs for Independent Directors:
The various programs undertaken for familiarizing Independent Directors with the functions and procedures of the Company are disclosed in the Corporate Governance Report, which forms part of this Annual Report.
The Board has adopted a Dividend Distribution Policy, which is available on the website of the Company at https://www.dbrealtv. co.in/pdf/Divident%20Distribution%20Policv.pdf
The Company has Six (6) Committees of the Board which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Company has following Committees of the Board as on 31st March, 2023:
1. Audit Committee
2. Corporate Social Responsibility Committee
3. Nomination and Remuneration Committee
4. Finance and Investment Committee
5. Stakeholders Relationship Committee
6. Risk Management Committee
The composition of the committees of the Board of Directors is stated in the Corporate Governance Report annexed to this Report. Secretarial Standards
The Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India. Statutory Disclosures:
1. Conservation of Energy, Technological Absorption, Foreign Exchange Earnings and Outgo
Your Company is not covered by the schedule of industries which are required to furnish the information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule (8) of the Companies (Accounts) Rules, 2014.
The Company has not imported any technology or carried out any business of export or import and therefore the disclosure requirement against technology absorption are not applicable. The details of Foreign Exchange earnings and outgo are as under:
Particulars |
31.03.2023 (Rs. in lacs) |
31.03.2022 (Rs. In lacs) |
Earnings in Foreign Currency |
Nil |
Nil |
Expenditure in Foreign Currency |
Nil |
Nil |
Foreign Travel |
Nil |
Nil |
Business Promotion |
Nil |
Nil |
Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been appended as Annexure E to this Report. The information required pursuant to Section 197 of the Companies Act read with Rule 5(2)&(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is available for inspection by the Members at registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary, whereupon a copy would be sent.
Disclosure under the Insolvency and Bankruptcy Code, 2016, pursuant to Section 134 read with Rule 8 of Companies (Accounts) Amendment Rules, 2021:
Following are the details of applications filed under corporate insolvency proceedings against the Company:
Petitioner |
Respondent |
Section of IBC |
Date of Filing |
Status as on 31st March, 2023 |
Alfa Touch |
Gokuldham Real Estate Development Company Private Limited which has merged with D B Realty Limited |
9 |
06.02.2021 |
Dismissed on 19.09.2022 |
Reliance Commercial Finance Limited |
Company |
7 |
21.01.2020 |
Dismissed on 07.03.2023 |
Bank of India |
Company |
7 |
02.11.2022 |
Matter was sub-judice. |
During the year under review, there was Invocation of corporate guarantee given by the Company on behalf of a related entity to Bank of India (BOI) . BOI has filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Hon''ble National Company Law Tribunal, Mumbai (NCLT) against the Company as mentioned in the said table. The Company, based on the market value of various other primary securities, corporate guarantee and undertaking by the holding company of the related party is confident of recovering the amount to be paid to BOI from the said related party and its holding company.The matter is currently sub-judice before NCLT.
Disclosure on one-time settlement with Banks or Financial Institutions:
The Company and one of its Wholly Owned Subsidiary (WOS) has settled with the lender viz., Reliance Commercial Finance Limited (RCFL) during the year. The Company has agreed to pay Rs 185.60 Cr to the lender as full and final settlement and its WOS has agreed to pay Rs. 214.40 Cr as full and final settlement amount. The said One Time Settlement (OTS) amount has to be repaid in instalments as per the settlement deed on or before January, 2025 or repayment schedule as may be mutually extended and carries an interest agreed interest rate payable on quarterly basis till repayment of the OTS amount. During the FY 2022-23, Company and WOS has repaid an aggregate amount of Rs. 50 Cr. The Company & its WOS has not carried out any valuation at the time of settlement with the lender.
The Company has complied with the provisions relating to the constitution of Internal Complaint Committee (âICCâ) as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
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.
Neither were any complaints filed during FY 2022-23 under the provisions of the said Act, nor were any complaints outstanding as at the beginning and end of the year under review.
Other Disclosures:
Your Company has not issued any shares with differential voting rights.
Your Company has not issued any sweat equity shares.
There was no revision in the financial statements.
There were no material changes or commitments affecting the financial position of the Company between the financial year end and date of this report.
There were 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.
No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future. However, Members attention is drawn to the Statement on Contingent Liabilities and Notes forming part of the Financial Statement including ongoing matters of 2G Spectrum as provided in detail in Note no. 51 of SFS and Note no.49A(5) of CFS and SEBI matter as provided in detail in first qualification of Basis for Qualified Opinion section of Standalone Auditor''s Report and Consolidated Auditor''s Report.
Your Directors wish to place on record their appreciation to the Banks, Financial Institutions, Government Authorities, Customers and other business associates for their support and co-operation and wish to place on record their gratitude to the shareholders and the investors for their trust, support and confidence in the Company. The Board also places on record its appreciation for the dedication displayed by employees at all levels.
On behalf of the Board of Directors For D B Realty LimitedVinod K. Goenka Shahid Balwa
Mumbai Chairman & Managing Director Vice-Chairman& Managing Director
30th May, 2023 (DIN:00029033) (DIN:00016839)
Mar 31, 2018
DIRECTORSâ REPORT
To
The Members D B REALTY LIMITED
The Directors have pleasure in presenting the 12th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March, 2018.
Financial Highlights
(Rs. in lacs
Particulars |
Standalone |
Consolidated |
||
F.Y.2017-18 |
F.Y.2016-17 |
F.Y.2017-18 |
F.Y.2016-17 |
|
Revenue from Operations |
405.28 |
1,800.54 |
11,986.17 |
14,090.53 |
Other Income |
11,167.63 |
13,122.71 |
15,655.36 |
14,749.72 |
Total Income |
11,572.91 |
14,923.25 |
27,641.53 |
28,840.25 |
Expenses |
||||
Operating Expenses |
17,908.93 |
5,233.72 |
43,490.53 |
23,530.46 |
Depreciation and Amortization |
395.93 |
506.38 |
588.63 |
1,079.02 |
Total Expenses |
18,304.86 |
5,740.10 |
44,079.16 |
24,609.48 |
Profit Before Finance Cost and Tax |
(6,731.95) |
9,183.15 |
(16,437.64) |
4,230.77 |
Finance Cost |
4,428.69 |
5,285.37 |
12,468.61 |
9,560.10 |
Profit/ Loss before extraordinary items and tax |
(11,160.64) |
3,897.78 |
(28,906.23) |
(5,329.33) |
Exceptional |
- |
- |
- |
- |
Profit/ Loss after extraordinary items and tax |
(11,160.65) |
3,897.78 |
(28,906.23) |
(5,329.33) |
Share of Profit/ Loss from associates and joint ventures |
- |
- |
(1,667.40) |
588.96 |
Profit Before Tax ( PBT) |
(11,160.65) |
3,897.78 |
(30,573.63) |
(4,740.38) |
Tax Expense |
(2,448.99) |
3,529.77 |
(749.68) |
(2,698.02) |
Profit after Tax (PAT) |
(8,711.66) |
368.01 |
(31,323.33) |
(7,438.40) |
Other Comprehensive Income |
(191.05) |
(3,953.01) |
(1,605.87) |
(4,211.53) |
Total Comprehensive Income/ Loss for the year |
(8,902.71) |
(3,585.00) |
(32,929.21) |
(11,649.91) |
Status of Projects of the Company / its Subsidiaries
âDB Crownâ at Prabhadevi is a residential project offering luxury of ampleness of space and an endless view of the sea. It offers to its resident''s state of the art amenities and the added luxury of access to a multitude of prominent shopping areas in the vicinity. The company, Real Gem Buildtech Private Limited (a wholly owned subsidiary of the Company) which is executing the said Project has arrived at an arrangement with Kingmaker Developers Private Limited, a Group company of Rustomjee (a subsidiary of Keystone Realtors Private Limited ) for the development management of Real estate Project DB Crown.
âX BKCâ at Bandra, is having strategic location near Bandra Kurla Complex. It is an iconic residential project that offers variety of spacious residential apartments. The project is spread over 5 acres of land, one of largest integrated residential complex in upscale Bandra east in Mumbai Suburbs. The company, MIG (Bandra) Realtors and Builders Private Limited, a wholly owned subsidiary of the Company, executing the said Project has obtained revised plans and commencement certificates for the project. The construction work of the said project, which is being developed in a joint venture with Radius Group, is witnessing impressive progress as per plans.
âDB Ozoneâ at Dahisar is a large residential project. The company, Neelkamal Realtors Suburban Private Limited, a subsidiary of the Company, executing the Project, has initiated fit out handover process for the Phase I & Phase II of the project.
âOne Mahalaxmiâ at Mahalaxmi offering its elite residents the luxury of size and space along with an unmatched view of the Arabian Sea as well as the Golf Course. Spread over 4 acres of prime real estate, the project offers quick access to any part of the city .The company, Neelkamal Realtors Tower Private Limited (a subsidiary of the Company) has entered into a Development Management Agreement with Indo Global Soft solutions and Technologies Private Limited, a Radius Group company for the development of its One Mahalaxmi project.
âDB Skyparkâ near international airport, Andheri is being developed in through a joint venture on approx. 1.5 acres of land with 6 wings. The project site is at very strategic location and is well connected by way of Metro, road network and railways. The construction work is going on as per approved plans. The construction work of the said project is progressing as per plans.
The Turf View, Enclave II and Orchid Views projects in Mumbai are awaiting certain approvals, which will offer substantial revenue in future. The Project site at Bandra Reclamation, in which Company has substantial stake through a wholly owned subsidiary company which is a partner in the firm, Om Metal consortium received layout approval to carry out the project.
Further, Project in another company viz. Marine Drive Hospitality & Realty Private Limited, (MDHRPL) wherein Company has considerable investments has got its plans approved from competent statutory authority. MDHRPL is developing a residential tower in tie up with a reputed partner and work is reinstated on the site.
Status of 2G Spectrum Case
In the matter of 2G spectrum allocation case pertaining to grant of 2G License acquitting Mr. Vinod Goenka and Mr. Shahid Balwa, Managing Directors and Key Managerial Personnels of your Company from all allegations, the Order was passed by the Hon''ble CBI Special Court on 21st December, 2017. In other matter of complaint filed by Directorate of Enforcement before the same Hon''ble CBI Special Court in connection with Prevention of Money Laundering case relating to 2G Spectrum case against both the Managing Directors of the Company, Senior Official / a member of the Promoters Group and the Company, the Hon''ble CBI Special Court has passed the Order on 21st December, 2017 acquitting all the parties.
Further, in PMLA Case, the Special Court has also given Order for release of properties attached by the Directorate of Enforcement including of the Firm - âafter the period of appeal is overâ. Against the said Orders, CBI as well as the Directorate of Enforcement have filed Criminal Leave Petitions before the Hon'' Delhi High Court. Further, the Directorate of Enforcement has also filed petition for stay against Order of release of the attached properties for which âstatus-quoâ has been granted by Hon'' Delhi High Court vide Order dated 21st March, 2018 and the matter is sub-judice.
Audit Report:
The Auditors have qualified their report on certain matters. The details of such qualifications as mentioned in their Report with your Directors'' response thereon are as under:
1. Para 4(a) of the Audit Report on the Standalone Financial Statements (SFS) and Consolidated Financial Statements (CFS) read with Note Nos. 60 and 59 of SFS and CFS respectively, refer to Financial Guarantees issued by the Company to banks / financial institutions on behalf of various entities including Subsidiaries, Joint Ventures and other entities, which have not been re-measured, at fair value. Your Directors state that these financial guarantees were issued in terms of the sanction letters by banks/financial institutions which generally also prohibited the Company to charge any commission on giving such guarantees and hence in compliance with the terms of the sanction letters/loan documents, no commission was charged on such financial guarantees which were provided as collateral securities. The notes referred to in the Report are self-explanatory.
2. Para 4(b) and Para 4(d) of the Audit Report on the SFS and CFS read with Note Nos. 51 and 52 of SFS and CFS respectively refer to evaluation of provision for impairment for credit losses in the case of loans and advances to certain subsidiaries and associates, which have incurred losses and have negative net worth. Your Directors state that the Company has economic interests in these entities which are at different stages of execution of the Projects where revenue recognition has not started and the Company is confident of recovering the same. Such loans and advances are towards the costs to be incurred / being incurred by these entities for their projects and to facilitate proper execution and will be repaid in due course.
3. Para 4(c) of the Audit Report on the SFS and CFS read with Note No. 2(B)(i)(d) of SFS and CFS refer the Company has measured its investments in equity instruments of one of its subsidiary company at fair value through other comprehensive income which the Management has not considered as a subsidiary. Your Directors state that the said entity is not within its control, as it is managed by the independent Board of Directors comprising of a Director nominated by financial institution, which is shareholder in that company and hence, not required to be consolidated. Further, the investments by the Company in this entity are not just in equity shares but the same is in the form of different preference shares having maturity terms in future. The strategic investor is also having affirmative voting power and Super Majority rights over all material transaction and hence control does not vest in the Company through its investment or otherwise. Therefore, your Directors are of the opinion that the Company has rightly measured its investments in equity instruments of the said entity at fair value instead of measuring it at cost and has given accounting treatments accordingly.
4. Para 4(b) of the Audit Report on CFS read with Note No. 2(B)(i)(d) refer to non-consolidation by the Company of another company and its subsidiaries/associates etc, on the basis of control assumed to be exercised by your Company on the same under the applicable Ind AS 110. As mentioned in detail in above point no. 3, your Directors again state that the said company is not under the control of your Company and hence your Directors are of the opinion that this is not required to be consolidated. The same is also detailed in Note 2(B)(i)(d) in Significant Accounting Judgments, Estimates and Assumptions.
The Statutory Auditors have also drawn attention of the members in their Reports to certain Notes. While the said notes are self-explanatory, your Directors offer the following clarifications and further explanations on the same as under:
(a) Para 6(a) [Note No. 50(b)] of SFS and Para 6(i) [Note No. 50(b)] of CFS refer to no adjustment having been made by the Company in the value of inventory, pending outcome of the matter referred by the Company to Hon. Supreme Court. As detailed in the said Notes, this is in respect of a project under development having a value of Rs. 3,517.59 lacs (forming part of inventory). Pending outcome of the matter, no adjustments have been made in the accounts in this regard.
(b) Para 6(b) [Note No. 7.2] of SFS and Para 6(ii) [Note No. 8.2] of CFS: The Auditors have referred to certain investments made in the Preference Share Capital of an entity for an amount of Rs. 77,928.49 lacs. This relates to investments made by your Company in the Preference Share Capital of Marine Drive Hospitality & Realty Private Limited in the forms of Compulsorily Convertible Cumulative Preference Shares, Redeemable Optionally Convertible Cumulative Preference Shares and Cumulative Redeemable Convertible Preference Shares, which bear specified rates of dividend. This Company is proposing to implement the project in real estate including commercial and residential activities and hence this investment is considered as strategic and in the long term interests of your Company.
(c) Para 6(c) [Note No. 9.2] of SFS and Para 6(iii) [Note No. 10.2] of CFS: Attention has been drawn to payments made to several parties towards security deposits of Rs. 6476.33 lakhs for acquisition of development rights. As stated in the said notes, your Company is in the process of obtaining necessary approvals for the development of the said properties which have significantly higher current market values than the carrying costs and would reap adequate profitability on substantial completion of the respective projects.
(d) Para 6(d) [Note No. 13.1] of SFS and Para 6 (iv) [Note No. 14.1] of CFS: Auditors have referred to the costs incurred on various projects reflected in the financial statements under the head Inventories at lower of the actual costs incurred or the realizable value, as reported by the Management. All these projects are under initial stage of development and are capable of fetching higher net realizable value greater than the cost. The said notes are self-explanatory.
(e) Para 6(e) [Note Nos.47 to 49] of SFS and Para 6(v) [Notes Nos. 49, 51(B)(xiii) and 51(B)(viii)] of CFS refer to loans/advances and investments in subsidiary/associate company(ies) and there are ongoing litigation in respect of their projects and matters are sub-judice. These notes are self-explanatory.
(f) Para 6(f) [Note No. 52] of SFS and Para 6(vi) [Note No. 57] of CFS refer to the fact that the Company was in receipt of Summons from Special Court for Prevention of Money Laundering Act (PMLA), Mumbai as one of the accused in connection with a complaint filed by Enforcement Directorate. The Hon''ble Court has also summoned the two KMPs of the Company as the accused as per the said complaint. The matter in relation to the Company and the KMPs involves certain advances given by the Company in ordinary course of its business to another Company which was subsequently refunded upon cancellation of the undertaking. The matter is sub-judice and the Company does not expect any financial liability.
(g) Para 6(g) [Note No.54] of SFS and Para 6(vii) [Note No. 54] of the CFS: With regard to the provisional attachment upheld by the Enforcement Directorate (ED), involving bank balance, two flats belonging to the Company and loans given to a subsidiary company of Marine Drive Hospitality & Realty Private Limited (Formerly D B Hospitality Private Limited), these relates to the 2G case in which the Managing Directors/KMPs of the Company have been charged with commission of offences based on the investigation by CBI. The Adjudicating authority has taken over the bank balance of Rs. 68.93 Lakhs and has been given ROCCP shares Series A & C of Marine Drive Hospitality & Realty Private Limited, in the name of the Company for Rs. 2578.24 lacs. The attachment order is contested by the Company in the Appellate tribunal. The matter is sub-judice. The Company is confident that the outcome of the cases will have no adverse impact on the Company and its functioning.
(h) Para 6(h) [Note No. 55] of SFS: This note is self-explanatory. The AOPs in which your company is a member have projects for execution on which expenses have been incurred by the said AOPs. Pending the triggering of the threshold limits and recognition of income in the said projects, the expenses incurred on the projects have been carried to their balance sheets as losses and have not been apportioned to the members of the AOP. These projects would fetch adequate profits to wipe out the losses in the AOP and would be apportioned to the members of the AOP at a later date when incomes are recognized.
(i) Para 6(i) [Note Nos. 46(A)(i) to (iii)] of SFS and Para 6 (viii) [Note Nos. 51(A)(i to iii)] of CFS refer to disclosures in the audited financial statements of the firm M/s Dynamix Realty regarding outstanding receivables which is good for recovery and the allegations in the 2G Spectrum case which is sub-judice and matter towards liability of property tax of the Firm with MCGM/SRA is sub-judice, adjustment entries shall be passed once the outcome is finalized and regarding the Firm has not made provision for contested income tax liability since based on the interpretation of law being supported by decisions of the appellate authorities, the Management of the Firm is of the opinion that the demands shall be deleted.
(j) Para 6(j) [Note No.46 (B)(ii)] of SFS and Para 6 (ix) [Note No. 51(A)(ix)(b)] of CFS refer to Order dated 30.01.2018 passed by Hon''ble Delhi High Court in the matter of a firm in which Company is a partner and Airport Authority of India (AAI), directing the AAI to conduct Aeronautical Studies of the SRA Project without demolishing the structure and to grant further permissions based on Aeronautical Studies. Accordingly, the said firm is awaiting final report of Aeronautical Studies from AAI for grant of additional height clearance for SRA buildings and subsequent to which the firm can start the construction activity of the SRA project.
(k) Para 6(x) [Note no. 51(B)(iv)] of CFS refers to a writ petition filed against the Company and government authorities by Jijamata Nagar Sankalp Co-op. Housing Society and the matter is detailed in the said note. The Company is constantly observing the changes and progress to the Draft DP 2034 and is confident that the Final Plan would remove all the anomalies.
(l) Para 6(xi) [Note no. 14.5] of CFS refers to the mode deployed by a Subsidiary Company for completing the Project and the financial implications arising there from which inter-alia include claim of interest on the said subsidiary company, which has not been accepted. The said note is self-explanatory.
(m) Para 6(xii) [Note no.30.6(i)] of CFS refers to the classification of amount received by subsidiary company from Yes Bank Limited, as short term borrowing resulting on account of cancellation of units allotted to parties to whom in principle the loans were granted. The said note is self-explanatory.
(n) Para 6(xiii) [Note no.21.4 to 21.7] of CFS refers to interest free refundable security deposits were paid to the aggregators for acquiring land. The management is confident that the transaction shall materialize and if not, then the same shall be repaid back.
(o) Para 6(xiv) [Note no. 48(A)R, 51(B)(ii), 51(B)(xvii) and 51(B)(xviii] of CFS refers to cross securitization provided/loans granted. As mentioned in the said note, your Directors have again state that granting of cross securitization will not have any financial implications on the subsidiary company and loans granted are good for recovery.
(p) Para 6(xv) [Note no. 56] of CFS: Auditors have referred to status of various ongoing projects, recognition of expense and income and the realizable value of the cost incurred, are as per the judgment of management of the respective entity and certified by their technical personnel and being of technical nature, have been relied upon by Auditors. Your Directors have to state that the estimating costs of every project are reviewed periodically and revised whenever required. The consequential effect of such revision is considered in the year of revision and in the balance future period of the project.
(q) Para 6(xvi) [Note no. 19.6] of CFS refers to certain debts and all the right, title and interest in and to the said debts along with the underlying security interest acquired by one of the subsidiary companies by way of assignment from Yes Bank Limited by executing Deed of Assignments. Your Directors believe that the said debts are adequately secured with the underlying security interest (including certain immovable properties) and the same debts are good for recovery. The status on the matter is detailed in the said Note, which is self-explanatory.
(r) Para 6(xvii) [Notes no.30.5 and 31.2] of CFS refers to the status of amounts due to Housing Development Infrastructure Limited (HDIL), which is self-explanatory.
(s) Para 6(xviii) [Note no. 51(B)(xix)] of CFS refers to the status of the cluster development project as also the opinions/ judgments with respect to the amounts advanced in the preceding years in relation to the said project as detailed in the said Note, which is self-explanatory.
(t) Para 6(xix) [Note no. 51(B)(ix)] of CFS refers to the status of the case pending before the Hon''ble High Court of Bombay against the arbitrary cancellation of Tender by P.W. Department. The case is still pending for admission before the Hon''ble High Court. Since the matter was sub-judice and in the absence of clarity, the Company had written off the carrying value of Project Work In Progress in the preceding financial year. There is no change in the status of the case during the year.
(u) Para 6(xx) [Note no. 51(B)(xxiii)] of CFS refers to the status of land owned by the subsidiary company as well as the opinion of the holding company with respect to its value and other related matters. Your Directors have to state that one of the subsidiary companies owns land and is yet to conceptualize real estate project on the said land and in the opinion, the value of land is at least equal to its investment and loans granted to the subsidiary company.
(v) Para 6(xxi) [Note no. 51(B)(xxii)] of CFS refers to the implications, if any, of outstanding dues from a debtor to whom a unit was sold consequent to the arrangement entered into by a subsidiary company with the Holding Company. The said note is self-explanatory.
(w) Para 6(xxii) [Note no.21.8] of CFS refers to accrual of revenue in respect of a subsidiary company, on execution of Memorandum of Understanding for granting development rights of land and other consequential matters thereto. The said note is self-explanatory.
(x) Para 6(xxiii) [Note no. 35.2] of CFS refers to accrual of revenue in respect of a subsidiary company, on execution of Memorandum of Understanding for granting development rights of land and other consequential matters thereto. Your Directors have to state that based on the percentage of work completion and keeping in view the amount of profits/ losses recognized in the preceding years, the subsidiary company recognized loss from the project. Further, the project costs and saleable area are as certified by the subsidiary Company.
(y) Para 6(xxiv) [Note no. 51(B)(xv)] of CFS refers to financials of Turf Estate JV, an Association of Persons (AOP), where the Company is one of the two partners. Such financial statements of the AOP are yet to be approved by the other partner, as the proposal to change profit/loss arrangement to area sharing framework in the said AOP is under negotiation with the other partner.
(z) Para 6(xxv) [Note no. 19.5] of CFS refers to loans advanced by a subsidiary company to a related party which is stated to be good for recovery by them.
(aa) Para 6(xxvi) [Note no. 60(C)(II)4.4] of CFS refers to acquiring equity shares of Milan Theatres Private Limited by a step down subsidiary company and permanent diminution in value thereof. The said note is self-explanatory.
(ab) Para 6(xxvii) [Note no. 19.9] of CFS refers to granting of loans by step down subsidiary company, which includes loan to a third party subject to confirmation. The said Step down subsidiary company is hopeful that the said the loans are goods for recovery.
(ac) Para 6(xxviii & xxix) [Notes no. 48(A)B and 48(A)A, respectively] of CFS refers to non-provision of disputed service tax & income tax by a step down subsidiary company. The said step down subsidiary company is hopeful that positive outcome will come and therefore provisions are not made.
(ad) Para 6(xxx) [Note no. 48(A)S] of CFS refers to the associate company with regards to notice received from land owner in respect for cancellation of Development Agreement. Your Directors have to state that the associate company is in the process of taking legal opinion and replying to the said notice.
(ae) Para 6(xxxi) [Note no. 51(A)(v)] of CFS refers to advances granted by a Joint Venture for acquiring occupancy rights to various parties including associates amounting to Rs. 5,805.87 lacs in the consolidated financial statements. The said note is self-explanatory.
(af) Para 6(xxxii) [Note no. 51(A)(vii)] of CFS refers to compensation to occupants and accounting of compensation by one of the joint ventures of the Company, which are self-explanatory.
(ag) Para 6(xxxiii) [Note No. 51(A)(viii)] of CFS relates to project work in progress in an Associate company where such company is currently under process of resolving the internal disputes among the partners of the firm viz-a-viz the Development Agreement, for which appeals have been filed. The management of the associate company expects favorable outcome in the matter and accordingly, is of the opinion that the land shall be available to such company for development.
Dividend
In the absence of profits, your Directors do not recommend dividend for the current year under review.
Subsidiaries, Associate companies and Joint ventures:
During the year under review, Milan Theatres Private Limited (âMilanâ) has become an Associate company (32.75%) of Horizontal Realty & Aviation Private Limited, which is subsidiary (62.85%) of Nine Paradise Erectors Private Limited, which is a wholly owned subsidiary (100%) of the Company. In other words, Milan has become Associate company of the Company with effect from 06th September, 2017.
Further, the Company has increased its stake in DB (BKC) Realtors Private Limited (from 38.82% to 57.17% of total share capital of DB BKC) and acquired 265707 (i.e 18.35% to total share capital of DB BKC) nos. of Compulsory Convertible Preference Shares (CCPS) of DB (BKC) Realtors Private Limited
The details of Subsidiary/Associate companies are provided in extract of Annual Return (Form No. MGT 9), which forms part of this Directors'' Report (Annexure A).
The Consolidated financial statements have been prepared in accordance with the provisions of the Companies Act, 2013, applicable Ind AS and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and include the financial information of its subsidiaries/associates and joint venture entities / partnership firms in which your Company holds stake. The audited financial statements of the subsidiary companies will be available for inspection by any member at the registered office of the Company and at the Company''s website www.dbrealty.co.in. Copies of the audited financial statements of the subsidiaries can be sought by any member by making a written request in this regard.
In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company. The statement also provides the details of performance and financial positions of each of the subsidiaries
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report for the year under review as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report (Annexure B).
Corporate Governance and Shareholders Information:
In compliance with the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Secretarial Auditors on its compliance, forms an integral part of this report. (Annexure C)
Fixed Deposits
During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 including any statutory modification(s) or re-enactment(s) for the time being in force.
Directors and Key Managerial Personnel (KMPs) 1. Directors retiring by rotation
In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company. Mr. Vinod Goenka (DIN:00029033) and Mr. Shahid Balwa (DIN:00016839), retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.
2. Appointment/ Resignation of Independent Director
Mr. Janak Desai (DIN:03527571) vacated the office of Independent Director with effect from 14th September, 2017 pursuant to Section 167 (1)(b) of the Companies Act, 2013.
Mr. Devender Kumar Vasal (DIN: 06858991) was appointed as Additional Independent Director with effect from 14th February, 2018. He will hold office upto date of the forthcoming Annual General Meeting (AGM) but is eligible for the appointment as an Independent Director for a tenure upto five years.
As per the provisions of the Companies Act, 2013, Independent Directors have been appointed for a period of five years and shall not be liable to retire by rotation.
3. Independent Directors Statement:
All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and were placed at the Board Meeting.
4. Key Managerial Personnel
Mr. Anantharam Anil Kumar resigned as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 15th November, 2017 and Mr. S.A.K. Narayanan has resigned as Company Secretary (Key Managerial Personnel) with effect from 5th December, 2017.
In terms of Section 203 of Companies Act, 2013, the Board has appointed Mr. Jignesh Shah as Company Secretary (Key Managerial Personnel) of the Company with effect from 5th December, 2017 and Mr. Asif Balwa, who is a part of Promoter Group, as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 14th February, 2018.
Mr. Vinod Goenka, Chairman and Managing Director and Mr. Shahid Balwa, Vice Chairman and Managing Director, Mr. Asif Balwa, Chief Financial Officer and Mr. Jignesh Shah, Company Secretary of the Company are Key Managerial Personnels as per the provisions of the Companies Act, 2013
Performance Evaluation of the Directors, Committees and Board
The performance of the Directors is evaluated on the basis of their contributions at the meetings, strategic inputs for the performance and growth of the Company among others. The Directors have carried out performance evaluation on annual basis of Directors, Committee and the Board. The Nomination and Remuneration Committee of the Board has laid down the performance evaluation framework under which performance of every Director is evaluated. The framework also provides the manner in which the Directors as a collective unit in the form of Board Committees and the Board function and perform.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. However, the Company, being a company engaged in the business of providing infrastructural facilities is exempt from the applicability of the relevant provisions of the Companies Act, 2013.
Contracts or Arrangements with Related Parties
All related party contracts/arrangements/transactions as specified in Section 188 (1) of the Companies Act, 2013 entered during the financial year were in the ordinary course of the business of the Company and were on arm''s length basis. During the year, the Company has not entered into any material contracts/arrangements/transactions as specified in Section 188 (1) of the Companies Act, 2013. There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnelâs or other persons which may have a potential conflict with the interest of the Company.
All such Related Party Transactions are periodically placed before the Audit Committee for approval, whenever applicable. The details of the contracts or arrangements with related parties for the financial year under review are given in the notes to the financial statements.
The policy on materiality of Related Party Transaction and also on dealing with Related Party Transaction as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is http://www.dbrealty. co.in/pdfs/DBRL Policy%20of%20Related%20Party%20Transaction.pdf
Internal Financial Control Systems and their Adequacy
The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposal of its assets. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. Your Directors have also appointed a professional firm to examine the adequacy of these controls and the work of designing controls, documenting risks control matrix for each area of business operation and implementation thereof.
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 and the Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate.
Remuneration Policy
The Nomination and Remuneration Policy provides for appropriate composition of Executive, Non-Executive and Independent Directors on the Board of Directors of your Company along with criteria for appointment and remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of your Company.
Vigil mechanism:
Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The policy comprehensively provides an opportunity for any employee/Director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channel. The Vigil Mechanism Policy has been uploaded on the website of the Company at http:// www.dbrealty.co.in/pdfs/Whistler Blower.pdf
Fraud Reporting
During the year under review, no instances of fraud were reported by the Statutory Auditors and Secretarial Auditors of the Company.
Risk Management Policy
The Board of Directors reviews the risk management policy from time to time and the said policy aims at enhancing shareholders'' value and providing an optimum risk-reward trade off. 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.
Corporate Social Responsibility Committee
As per the provisions of Section 135 of the Companies Act, 2013, 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 D thereto, which forms part of this report.
Extracts of Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as at 31st March, 2018 is annexed and forms part of this report. (Annexure A)
Number of Board Meetings during 2017-18
The Board met Five (5) times during the financial year 2017-18 and the details are mentioned in the Corporate Governance Report which is annexed to the Directors Report.
Directorsâ Responsibility Statement
In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:
a) In the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) they have 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 on 31stMarch, 2018 and of the loss of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis.
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Familiarization Programs for Independent Directors
The various programs undertaken for familiarizing Independent Directors with the functions and procedures of the Company are disclosed in the Corporate Governance Report, which forms part of this Annual Report.
Committees of the Board
The Company has five (5) Committees of the Board which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Company has following Committees of the Board:
1. Audit Committee
2. Corporate Social Responsibility Committee
3. Nomination and Remuneration Committee
4. Finance and Investment Committee
5. Stakeholders Relationship Committee
The composition of the committees of the Board of Directors is stated in the Corporate Governance Report annexed to this Report. Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), the application money of Rs. 6132/- outstanding in the âRefund Account D B Realty Public Issueâ which remained unclaimed for seven consecutive years from the date of issue and due for refund was transferred to Investor Education and Protection Fund on 4th March, 2017.
Statutory Auditors
M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Firm Registration No. 103523W) were appointed as the Statutory Auditors of the Company in terms of Section 139 of the Companies Act, 2013 for second term of 5 (five) consecutive years commencing from conclusion of 10th Annual General Meeting upto the conclusion of the 15th Annual General Meeting of the Company to be held in the year 2021, subject to the ratification by shareholders of the Company at every Annual General Meeting. However, the Companies (Amendment) Act, 2017, has removed the requirement of the Annual ratification of appointment of Statutory Auditors of the Company by the shareholders. The Board hence recommends ratification of appointment of M/s Haribhakti & Co. LLP as Statutory Auditors of the Company for the remaining term of 3 (three) years from the Financial Year 2018-19 to 202021 at the ensuing Annual General Meeting.
Secretarial Standards
The Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India. Secretarial Auditors and Secretarial Audit Report
Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s Vicky Kundaliya & Associates, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2017-18.The Company has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2017-18 is annexed to this report (Annexure E).
The said report does not contain any qualifications or adverse remark except the following:
a) The Company appointed a new Independent Director beyond the prescribed period as per Section 149 of the Companies Act, 2013 read with relevant rules and Regulation 25 of SEBI (LODR) Regulations, 2015. As already mentioned in the report, your Directors have to state that the office of Mr. Janak Desai as an Independent Director, was automatically vacated pursuant to section 167(1)(b) of the Companies Act, 2013. The Company had immediately initiated the process of inducting new Independent Director on the Board. The Board subsequently appointed Mr. Devender Kumar Vasal as new Independent Director and re-constituted the Committees wherever required and thus, the Company complied the provisions of the said section 149 of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015.
b) The Board of Directors approved and thereafter the Company submitted the Financial Results for the Quarter and Year ended 31st March, 2017 beyond the prescribed period as per Regulation 33 of SEBI (LODR) Regulations, 2015, your Directors have to state that in compliance with Regulation 33 of SEBI (LODR) Regulations, 2015, the Company held the Board Meeting on 30th May, 2017 to consider and approve audited financial result for the Quarter and Year ended 31st March, 2017. However, in view of the requirement of compilation of requisite data for consolidation under new Ind AS requirements, which was introduced for the first time in financial year 2016-17 and number of entities to be consolidated, the Audit Committee and the Board in consultation with Statutory Auditors felt that few more days would be required to review the consolidated financial statements and complete the audit process. Thus, the said Board meeting was adjourned and held again on 9th June, 2017 for approving audited financial results for the Quarter and year ended 31st March, 2017 to ensure completeness of consolidated audit process based on the information compiled under new Ind AS requirements.
Statutory Disclosures 1. Conservation of Energy, Technological Absorption, Foreign Exchange Earnings and Outgo
Your Company is not covered by the schedule of industries which are required to furnish the information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule (8) of the Companies (Accounts) Rules, 2014.
The Company has not imported any technology or carried out any business of export or import and therefore the disclosure requirement against technology absorption are not applicable. The details of Foreign Exchange earnings and outgo are as under (Standalone Amounts):
Particulars |
31.03.2018 (Rs. in lacs) |
31.03.2017 (Rs. in lacs) |
Earnings in Foreign Currency |
Nil |
Nil |
Expenditure in Foreign Currency |
||
Foreign Travel |
18.16 |
5.58 |
Business Promotion |
5.90 |
Nil |
24.06 |
5.58 |
2. Particulars of Employees
In accordance with the provisions of Section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014, the names and other particulars of the employees are to be set out in the Directors'' Report as an addendum. However, in line with the provisions of Section 136 (1) of the Act, the Report and Accounts herein are being sent to all the members excluding the above information. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. Since no remuneration except sitting fees has been paid to any Director, the ratio of such remuneration to the median employees'' remuneration has not been stated. During the year no increase in remuneration of any Director or KMP or manager has been effected. The number of permanent employees at the end of the financial year was 61. The other remuneration details of Directors/KMPs/ employees are disclosed in Annexure F to this report.
Other Disclosures:
Your Company has not issued any shares with differential voting rights.
Your Company has not issued any sweat equity shares.
There was no revision in the financial statements.
There were no material changes or commitments affecting the financial position of the Company between the financial year end and date of this report.
There were 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.
The Company has not received any complaints under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future. However, during the year under review, the Reserve Bank of India has passed a Compounding Order dated 9th June, 2017 for delay in reporting / filing of some forms in terms of Paragraph 9(1)(A) and 9(1)(B) of Schedule I to FEMA, (Transfer of Issue of Security by a Person Resident Outside India) Regulation, 2000 during the period between 2007-2009 and therefore, the Company has paid the monetary penalty of Rs. 4,20,000/- to RBI pursuant to the said Order.
Acknowledgement
Your Directors wish to place on record their appreciation to the Banks, Financial Institutions, Government Authorities, customers and other business associates for their support and co-operation and wish to place on record their gratitude to the shareholders and the investors for their trust, support and confidence in the Company. The Board also places on record its appreciation for the dedication displayed by employees at all levels.
On behalf of the Board of Directors For D B Realty Limited
Shahid Balwa Jayvardhan Goenka
Mumbai, Vice-Chairman &
Managing Director Director
28th May, 2018 (DIN:00016839) (DIN:03546392)
Mar 31, 2017
To
The Members D B REALTY LIMITED
The Directors have pleasure in presenting the11th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March, 2017.
Financial Highlights
(Amount Rs,
Particulars |
Standalone |
Consolidated |
||
F.Y.2016-17 |
F.Y.2015-16 |
F.Y.2016-17 |
F.Y.2015-16 |
|
Revenue from Operations |
137,790,940 |
1,770,350,525 |
1,366,790,901 |
2,059,026,506 |
Other Income |
1,250,241,437 |
765,071,352 |
1,368,501,845 |
1,396,008,995 |
Total Income |
1,388,032,377 |
2,535,421,877 |
2,735,292,746 |
3,455,035,501 |
Expenses |
||||
Operating Expenses |
441,611,493 |
1,081,197,492 |
2,226,843,489 |
2,647,419,406 |
Depreciation and Amortization |
50,637,874 |
50,687,147 |
107,902,473 |
143,672,081 |
Total Expenses |
492,249,367 |
1,131,884,639 |
2,334,745,962 |
2,791,091,487 |
Profit Before Finance Cost and Tax |
895,783,010 |
1,403,537,238 |
400,546,784 |
663,944,014 |
Finance Cost |
528,536,621 |
501,219,550 |
956,009,803 |
861,452,461 |
Profit/ Loss before extraordinary items and tax |
367,246,389 |
902,317,688 |
(555,463,018) |
(197,508,448) |
Exceptional Items |
- |
75,000,000 |
- |
(75,000,000) |
Profit/ Loss after extraordinary items and tax |
367,246,389 |
827,317,688 |
(555,463,018) |
(272,508,448) |
Share of Profit/ Loss from associates and joint ventures |
- |
- |
58,895,561 |
80,242,890 |
Profit Before Tax ( PBT) |
367,246,389 |
827,317,688 |
(496,567,457) |
(192,265,558) |
Tax Expense |
352,977,253 |
299,702,273 |
(269,801,826) |
(37,307,240) |
Profit after Tax (PAT) |
14,269,135 |
527,615,415 |
(766,369,283) |
(229,572,798) |
Other Comprehensive Income |
(395,300,974) |
(129,640,569) |
(421,152,588) |
(133,911,662) |
Total Comprehensive Income/ Loss for the year |
(381,031,838) |
397,974,846 |
(1,187,521,871) |
(363,484,460) |
The financial statements for the year ended 31st March, 2017 are the first, the Company has prepared under Ind AS (Indian Accounting Standards). The financial statements for the year ended 31st March, 2016 have been restated in accordance with Ind AS for comparative information.
Status of Projects of the Company / its subsidiaries
âDB Crownâ at Prabhadevi is a residential project offering luxury of ampleness of space and an endless view of the sea. The construction work of the said project is progressing as per revised plans.
âProject Bandraâ (now known as âTen BKCâ) at Bandra, is having strategic location near Bandra Kurla Complex. It is an iconic residential project that offers variety of spacious residential apartments. The project is spread over 5 acres of land, one of largest integrated residential complex in upscale Bandra east in Mumbai Suburbs. The construction work of the said project, which is being developed in a joint venture with Radius Group, is witnessing impressive progress as per approved plans.
âDB Ozoneâ at Dahisar is a large residential project and the civil structure work for sale and rental Building has been completed and handing over of possession of the flats for fit outs has commenced.
âDB Heightsâ at Mahalaxmi is a residential tower offering the luxury of size and space along with an unmatched view of the Arabian Sea as well as the Golf Course. The construction work has commenced as per approved plans.
âDB Skyparkâ near international airport, Andheri is being developed in through a joint venture on approx. 1.5 acres of land with 6 wings. The project site is at very strategic location and is well connected by way of Metro, road network and railways. The construction work is going on as per approved plans.
The Turf Estate project in Mumbai is awaiting certain approvals and is one of the largest projects of the Company, which will offer substantial revenue potential in future. Project site at Bandra Reclamation, in which your Company has substantial stake through a wholly owned subsidiary company which is a parter in the firm, Om Metal Corporation has been awaiting certain approvals for launching. Further, Project site at Marine Lines being executed through another company viz. Marine Drive Hospitality & Realty Pvt. Ltd., (MDHRPL) in which your Company has considerable economic interest has got its plans approved from competent statutory authority. MDHRPL is developing a residential tower and its WOS developing a Convention Centre and Hotel project at Aerocity near New Delhi International Airport in tie up with a reputed partner.
Audit Report:
The Auditors have qualified their report on certain matters. The details of such qualifications as mentioned in their Report with your Directors'' response thereon are as under:
1. Para 4(a) of the Audit Report on the Standalone Financial Statements (SFS) and Consolidated Financial Statements (CFS) read with Note Nos. 62 and 60 of SFS and CFS respectively, refer to Financial Guarantees issued by the Company to banks / financial institutions on behalf of various entities including Subsidiaries, Joint Ventures and other entities, which have not been re-measured, at fair value. Your Directors state that these financial guarantees were issued in terms of the sanction letters by banks/financial institutions which generally also prohibited the Company to charge any commission on giving such guarantees and hence in compliance with the terms of the sanction letters/loan documents, no commission was charged on such financial guarantees which were provided as collateral securities. The notes referred to in the Report are self explanatory.
2. Para 4(b) of the Audit Report on both the SFS and CFS read with Note No. 54 and 49 of SFS and CFS respectively refer to evaluation of provision for impairment for credit losses in the case of loans and advances to certain subsidiaries and an associate, which have incurred losses and have negative net worth. Your Directors state that the Company has economic interests in these entities which are at different stages of execution of the Projects where revenue recognition has not started and the Company is confident of recovering the same. Such loans and advances are towards the costs to be incurred / being incurred by these entities for their projects and to facilitate proper execution and will be repaid in due course.
3. Para 4(c) and (d) of the Audit Report on CFS read with Note Nos. 48B(iv) and 62 of CFS refer to non accounting of the profit/ loss by the subsidiary of a firm in which it is partner since the financial statements of the said firm for the F Y 2016-17 have not been made available by the respective firm. Your Directors state these financial would not have any material or significant impact on the CFS of your Company. The said subsidiary company has taken steps with the said firm to get their financial statements for the year and account for its share and also consolidate in the statements for the subsequent period(s).
4. Para 4(e) of the Audit Report on CFS read with Note No. 47(c) refer to non consolidation by the Company of another company and its subsidiaries/associates etc, on the basis of control assumed to be exercised by your Company on the same under the applicable Ind AS 110. Your Directors state that the said Company is not under the control of your Company and is managed by its own independent Board of Directors with a nominee of a strategic investor/financial institution having affirmative and super majority voting on all material transactions and hence control does not vest with the Company through its investments or otherwise. The investments by your Company is also in equity as well as different categories of preference shares of different maturities. Hence, in the opinion of the Management, this is not required to be consolidated. The same is also detailed in Note 2(A)(1.1)(d) in Significant Accounting Judgments, Estimates and Assumptions.
The Statutory Auditors have also drawn attention of the members in their Reports to certain Notes. While the said notes are self explanatory, your Directors offer the following clarifications and further explanations on the same as under:
(a) Para 6(a) (Note No.53 (b)) of SFS and Para 6(i) [Note No. 47(b)] of CFS refer to no adjustment having been made by the Company in the value of inventory, pending outcome of the matter referred by the Company to Hon. Supreme Court. As detailed in the said Notes, this is in respect of a project under development having a value of Rs, 3,513.39 lacs (forming part of inventory). Pending outcome of the matter, no adjustments have been made in the accounts in this regard.
(b) Para 6(b) of SFS and Para 6((iv) of CFS (Note Nos.7.2 of SFS and 8.3 of CFS: The Auditors have referred to certain investments made in the Preference Share Capital of an entity for an amount of Rs, 561,38.58 lacs. This relates to investments made by your Company in the Preference Share Capital of Marine Drive Hospitality & Realty Pvt Ltd in the forms of Compulsorily Convertible Cumulative Preference Shares, Redeemable, Optionally Convertible Cumulative Preference Shares and Cumulative Redeemable Convertible Preference Shares, which bear specified rates of dividend. This Company is proposing to implement the project in real estate including commercial, and residential activities and hence this investment is considered as strategic and in the long term interests of your Company.
(c) Para 6(c) of SFS and Para 6(v) of CFS (Note Nos. 9.2 of SFS and Nos. 10.2 & 13.2 of CFS]: Attention has been drawn to payments made to several parties towards security deposits of Rs,11,381.70 lakhs for acquisition of development rights. As stated in the said note, your Company is in the process of obtaining necessary approvals for the development of the said properties which have significantly higher current market values than the carrying costs and would reap adequate profitability on substantial completion of the respective projects.
(d) Para 6(d) and (h) of SFS and Para 6 (vi) and (vii) of CFS [Note 13(i) and 63 of SFS and Note Nos. 14.1 and 57 of CFS: Auditors have referred to the costs incurred on various projects reflected in the financial statements under the head Inventories at lower of the actual costs incurred or the realizable value, as reported by the Management All these projects are under initial stage of development and are capable of fetching higher net realizable value greater than the cost. The said notes are self explanatory.
(e) Para 6(e) (Note Nos.49 to 53(a)) of SFS and Para 6(iii) [Notes Nos. 46 and 47(a)] of CFS refer to loans/advances and investments in subsidiary/associate company(ies) and there are ongoing litigation in respect of their projects and matters are sub-judice. These notes are self explanatory.
(f) Para 6(f) of SFS and Para 6 (ix) of CFS (Note No. 54 of SFS and Note No. 49 of CFS) : This relates to investments in the shares / capital of the subsidiaries / associates / firms etc and also project advances from time to time towards their projects for various activities. These entities are having negative net worth, since they are in the early stage of real estate development. These investments are strategic in nature and long term. Your Directors are of the firm view that these projects which are of medium to long term nature would fetch results in the future to justify the initial investments and also yield reasonable and adequate return on these investments and deployment of funds.
(g) Para 6(g) (Note No. 55) of SFS and Para 6(ii) (Note No. 58) of CFS refer to the fact that the Company was in receipt of Summons from Special Court for Prevention of Money Laundering Act (PMLA), Mumbai as one of the accused in connection with a complaint filed by Enforcement Directorate. The Hon''ble Court has also summoned one of the KMPs of the Company as one of the accused as per the said complaint. The matter in relation to the Company and the KMP involves certain advances given by the Company in ordinary course of its business to another Company which was subsequently refunded upon cancellation of the undertaking. The matter is sub-judice and the Company does not expect any financial liability.
(h) Para 6(i) (Note No.57) of SFS and Para 6(viii) (Note No. 54) of the CFS: With regard to the provisional attachment upheld by the Enforcement Directorate (ED), involving bank balance, two flats belonging to the Company and loans given to a subsidiary company of Marine Drive Hospitality & Realty Pvt. Ltd. (Formerly D B Hospitality Private Limited), these relates to the 2G case in which the Managing Directors of the Company and two of its Key Management Personnel have been charged with commission of offences based on the investigation by CBI. The Adjudicating authority has taken over the bank balance of Rs, 68.92 Lakhs and has been given ROCCP shares of Marine Drive Hospitality & Realty Pvt. Ltd., in the name of the Company for Rs, 73.67 crores. The attachment order is contested by the company in the Appellate tribunal. The matter is sub-judice. The Company is confident that the outcome of the cases will have no adverse impact on the Company and its functioning.
(i) Para 6(j) (Note No. 58) of SFS: This note is self explanatory. The AOPs in which your company is a member have projects for execution on which expenses have been incurred by the said AOPs. Pending the triggering of the threshold limits and recognition of income in the said projects, the expenses incurred on the projects have been carried to their balance sheets as losses and have not been apportioned to the members of the AOP. These projects would fetch adequate profits to wipe out the losses in the AOP and would be apportioned to the members of the AOP at a later date when incomes are recognized.
(j) Para 6(k)(i) and (ii) [Note Nos. 48(A)(iii)(1) and (iii)(2)] of SFS and Para 6 (xii)(a) and (b) [Note Nos. 48 (A)(i)(b) and 48(A)(iii)] of CFS refers to disclosures in the audited financial statements of the firm Dynamix Realty regarding outstanding receivables which is good for recovery and the allegations in the 2G Spectrum case which is sub-judice. These notes are self-explanatory.
(k) Para 6(l) [Note No.48 (B)(ii)] of SFS and Para 6 (xiii) [Note No. 48(A)(viii)] of CFS refer to an appeal filed by a firm in which Company is a partner against the Order of Airport Authority of India for demolishing certain floors. The said note is self explanatory.
(l) Para 6(xi) (Note No. 48(B)(xix) of CFS refers to financials of Turf Estate JV, an Association of Persons (AOP), where the Company is one of the two partners. Such financial statements of the AOP are yet to be approved by the other partner, as the proposal to change profit/loss arrangement to area sharing framework in the said AOP is under negotiation with the other partner.
(m) Para 6(x) of CFS [Note no. 48(B)(xiii) of CFS] refers to the litigation on salt pan land owned by the Company. The note is self explanatory. As stated, the Company will defend its title.
(n) Para 6(xx) [Note no. 48(A)(vii)] of CFS refer to compensation to occupants and accounting of compensation by one of the joint ventures of the Company, which are self explanatory.
(o) Para 6(xiv) of CFS [Note no. 48(B)(v)] of CFS] refers to a writ petition filed against the Company and government authorities by Jijamata Nagar Sankalp Co-op. Housing Society and the matter is detailed in the said note. The Company is constantly observing the changes and progress to the Draft DP 2034 and is confident that the Final Plan would remove all the anomalies.
(p) Para 6(xv) of CFS [Note no. 48(B)(i) of CFS] refers to loan of Rs, 8.14 crores granted by one of the subsidiary te a company, whose debts amount to Rs, 22.67 crores have been acquired from Yes Bank Ltd. Your Directors are of the opinion that the loan outstanding as of year end though subject to confirmation is good for recovery.
(q) Para 6(xvi) of CFS [Note no. 48(B)(ii) of CFS] refers to certain debts and all the right, title and interest in and to the said debts along with the underlying security interest acquired by one of the subsidiary companies by way of assignment from Yes Bank Ltd. by executing Deed of Assignments. Your Directors believe that the said debts are adequately secured with the underlying security interest (including certain immovable properties) and the same debts are good for recovery though the balances are subject to confirmation.
(r) Para (xvii) of the CFS [Note no. 48(B)(iii)] of CFS] refers to the status of amounts due to Housing Development Infrastructure Ltd. (HDIL), which is self explanatory.
(s) Para 6(xviii) of CFS [Note no. 48(A)(vi)] of CFS] refers to status of redemption / non conversion of the Preference Shares (ROCCPS) and Compulsorily Convertible Preference Shares issued by the jointly controlled entity. The matter is under discussion with the shareholders of the said shares and would be acted upon on reaching finality with them.
(t) Para 6(xix) of CFS [Note no. 48(A)(v) of CFS] refers to the classification of amount of Rs, 23.70 crores advanced by a jointly controlled entity (JCE) to few parties for acquisition of the occupancy rights on its behalf, which would be transferred to the JCE. The said note is self explanatory.
(u) Para 6(xxi) of the CFS (Note No.48(B)(xx) of CFS) relates to the loan given by a subsidiary company to a related party which the Board is confident of repayment by the said party.
(v) Para 6(xxii) of CFS (Note No. 48(B)(xxi) of CFS) relates to the advances given by subsidiary company to a related party which is in the process of obtaining approvals and commencing its project and hence as stated therein the subsidiary company will recover the same.
(w) Para 6(xxiii) of CFS (Note No. 48(B)(xxii) of CFS) relates to the substitution of a corporate guarantee given by a subsidiary company with a sale agreement for flats, the consideration of which would be recovered by the subsidiary company from the borrower on whose behalf, the subsidiary company gave the corporate guarantee to the lenders and subsequently sold the flats. The subsidiary company is confident of recovering the same from the borrowing company.
(x) Para 6(xxiv) of CFS (Note No. 48(B)(xxiii) of CFS) relates to guarantees and securities provided by a subsidiary company to banks and financial institution on behalf of group companies. As mentioned in the said Note, the management of the subsidiary company does not expect any financial liability arising therefrom, as the financial facilities are secured by sufficient primary securities of the group companies.
(y) Para 6(xxv) of CFS (Note No. 48(A)(ix) of CFS) relates to project work in progress in an Associate Company where such company is currently under process of resolving the interenal disputes among the partners of the firm viz-a-viz the Development Agreement, for which appeals have been filed. The management of the associate company expects favourable outcome in the matter and accordingly, is of the opinion that the land shall be available to such company for development.
(z) Para 6(xxvi) of CFS (Note No. 48(B)(xxiv) of CFS) relates to the advances by a subsidiary company for the purchase land and tenancy rights for which agreements would be entered into with the respective land owners / tenants in due course.
(aa) Para 6 (xxvii) of CFS (Note No. 48(B)(xxv) of CFS)relates to loans advanced by a subsidiary company to a related party which is stated to be good for recovery by them.
Indian Accounting Standards
The Ministry of Corporate Affairs (MCA) notified that the Indian Accounting Standards (Ind AS) are applicable to certain classes of Companies w.e.f April 1, 2016. Ind AS has replaced the existing Indian GAAP prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014. Ind AS is applicable to the Company from April 1, 2016, with a transition date of April 1, 2015 .
The reconciliation and description of the effect of the transition from previous GAAP to Ind AS has been set out in Notes to Accounts in the Standalone and Consolidated Financial Statements.
Dividend
In view of inadequate profits in the year under review and with a view to conserve resources to meet the fund requirements for Company''s projects, your Directors have not recommended any payment of dividend for the year 2016-17.
Subsidiaries, Associate Companies and Joint ventures:
During the year under review, the Company namely Horizontal Realty & Aviation Private Limited (HRAPL) has become a 63% subsidiary of Nine Paradise Erectors Private Limited which is a 100% subsidiary of the Company. In other words, HRAPL has become step down subsidiary of the Company with effect from 2nd January, 2017.
The details of Subsidiary/Associate companies are provided in extract of Annual Return (Form No. MGT 9), which forms part of this Directors'' Report (Annexure A).
The Consolidated financial statements have been prepared in accordance with the provisions of the Companies Act, 2013, applicable Ind AS and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and include the financial information of its subsidiaries/associates and joint venture entities / partnership firms in which your Company holds stake. The audited financial statements of the subsidiary companies will be available for inspection by any member at the registered office of the company and at the Company''s website www.dbrealty.co.in. Copies of the audited financial statements of the subsidiaries can be sought by any member by making a written request in this regard.
In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company The statement also provides the details of performance and financial positions of each of the subsidiaries.
Management Discussion and Analysis Report:
The Management Discussion and Analysis Report for the year under review as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report (Annexure B).
Corporate Governance and Shareholders Information:
In compliance with the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Secretarial Auditors on its compliance, forms an integral part of this report. ( Annexure C)
Fixed Deposits
During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 including any statutory modification(s) or re-enactment(s) for the time being in force.
Directors and Key Managerial Personnel (KMPs) 1. Directors retiring by rotation
In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company. Mr. Salim Balwa and Ms. Sunita Goenka, Directors who are liable to retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.
2. Appointment of Independent Director
Mr. Sundaram Vidyatheertha Rajagopal (DIN: 01951392) was appointed as Additional Independent Director with effect from 9th December, 2016. He will hold office till the date of the forthcoming Annual General Meeting (AGM) and a notice has been received from a Member proposing the candidature of Mr. Sundaram V Rajagopal for being appointed as an Independent Director of the Company.
As per the provisions of the Companies Act, 2013, Independent Directors have been appointed for a period of five years and shall not be liable to retire by rotation.
3. Independent Directors Statement:
All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and were placed at the Board Meeting held on May 30,2017.
4. Key Managerial Personnel
Mr. Nagamallesh Gattu resigned as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 31st August, 2016. In terms of Section 203 of Companies Act, 2013, the Board has appointed Mr. Anantharam Anil Kumar as the Chief Financial Officer (Key Managerial Personnel) of the Company on recommendation of Nomination and Remuneration Committee with effect from 1st September, 2016. Mr. Vipul Bansal has resigned as Chief Executive Officer with effect from 30th September, 2016. The Board places on record its appreciation for the valuable services rendered by Mr. Nagamallesh Gattu and Mr. Vipul Bansal during their tenure as CFO and CEO respectively of the Company
Mr. Vinod Goenka, Chairman and Managing Director and Mr. Shahid Balwa, Vice Chairman and Managing Director, Mr. Anantharam Anil Kumar, Chief Financial Officer and Mr. S.A.K. Narayanan, Company Secretary of the Company are Key Managerial Personnel''s as per the provisions of the Companies Act, 2013.
Performance Evaluation of the Directors, Committee and Board
The performance of the Directors is evaluated on the basis of their contributions at the meetings, strategic inputs for the performance and growth of the Company among others. The Directors have carried out performance evaluation on annual basis of Directors, Committee and the Board. The Nomination and Remuneration Committee of the Board has laid down the performance evaluation framework under which performance of every Director is evaluated. The framework also provides the manner in which the Directors as a collective unit in the form of Board Committees and the Board function and perform.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. However, the Company, being a company engaged in the business of providing infrastructural facilities is exempt from the applicability of the relevant provisions of the Companies Act, 2013.
Contracts or Arrangements with Related Parties
All related party contracts/arrangements/transactions as specified in Section 188 (1) of the Companies Act, 2013 entered during the financial year were in the ordinary course of the business of the Company and were on arm''s length basis. During the year, the Company has not entered into any material contracts/arrangements/transactions as specified in Section 188 (1) of the Companies Act, 2013. There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company.
All such Related Party Transaction are periodically placed before the Audit Committee for approval, whenever applicable. The details of the contracts or arrangements with related parties for the financial year under review are given in the notes to the financial statements.
The policy on materiality of Related Party Transaction and also on dealing with Related Party Transaction as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is http://www.dbrealty. co.in.investor.html#policy.
Internal Financial Control Systems and their Adequacy
The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposal of its assets. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. Your Directors have also appointed a professional firm to examine the adequacy of these controls and the work of designing controls, documenting risks control matrix for each area of business operation and implementation thereof.
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 and the Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate.
Committees of the Board:
The composition of the various committees of the Board of Directors is stated in the Corporate Governance Report annexed to this Report.
Remuneration Policy
The Nomination and Remuneration Policy provides for appropriate composition of Executive, Non-Executive and Independent Directors on the Board of Directors of your Company along with criteria for appointment and remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of your Company.
Vigil mechanism:
Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The policy comprehensively provides an opportunity for any employee/Director of the Bank to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channel. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.dbrealty.co.in.
Risk Management Policy
The Board of Directors reviews the risk management policy from time to time and the said policy aims at enhancing shareholders'' value and providing an optimum risk-reward trade off. 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.
Corporate Social Responsibility Committee
As per the provisions of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee constituted by the Board of Directors exits.
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 D thereto, which forms part of this report.
Extracts of Annual Return
Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as at March 31, 2017 is annexed and forms part of this report. (Annexure A)
Number of Board Meetings during 2016-17
The Board met four (4) times during the financial year 2016-17 and the details are mentioned in the Corporate Governance Report which is annexed to the Directors Report.
Directorsâ Responsibility Statement
In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:
a) In the preparation of the annual accounts for the year ended 31st March, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b) they have 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 on 31st March, 2017 and of the profit and loss of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) they have prepared the annual accounts on a going concern basis.
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Familiarization Programs for Independent Directors
The various programs undertaken for familiarizing Independent Directors with the functions and procedures of the Company are disclosed in the Corporate Governance Report, which forms part of this Annual Report
Committees of the Board
The company has five (5) Committees of the Board which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Bank has following Committees of the Board:
1. Audit Committee
2. Corporate Social Responsibility Committee
3. Nomination and Remuneration Committee
4. Finance and Investment Committee
5. Stakeholders Relationship Committee Investor Education and Protection Fund (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), the application money of '' 6132/- outstanding in the âRefund Account D B Realty Public Issueâ which remained unclaimed for seven consecutive years from the date of issue and due for refund was transferred to Investor Education and Protection Fund on March 4, 2017.
Statutory Auditors
The first year of second term of M/s Haribhakti & Co. LLP, Chartered Accountants consisting of 5 consecutive years as Statutory Auditors shall expire on the conclusion of the ensuing Annual General Meeting of the Company.
It is therefore necessary to re-appoint M/s Haribhakti & Co. LLP, Chartered Accountants (Firm Registration No.103523W), as Statutory Auditor for the second year commencing from the conclusion of the ensuing Annual General Meeting till the conclusion of the 12th AGM to be held in the year 2018. Their continuance of appointment for the financial year 2017-18 is to be ratified by the shareholders in the ensuing Annual General Meeting.
The Company has received a certificate from the above Auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed.
Secretarial Auditors and Secretarial Audit Report
Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 your Company had appointed M/s Vicky Kundaliya & Associates, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2016-17.The Company has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2016-17 is annexed to this report (Annexure E). With regard to observation made in the Secretarial Audit Report on delay in appointment of new Independent Director in place of resigning Independent Director, your Directors have to state that the delay was mainly due to evaluation and selection of a suitable person with adequate expertise in the related areas. With respect to observation on compliance with the provisions of Section 93 of the Companies Act, 2013, the Company shall comply with the same.
Statutory Disclosures 1. Conservation of Energy, Technological Absorption, Foreign Exchange Earnings and Outgo
Your Company is not covered by the schedule of industries which are required to furnish the information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule (8) of the Companies (Accounts) Rules, 2014
The Company has not imported any technology or carried out any business of export or import and therefore the disclosure requirement against technology absorption are not applicable. The details of Foreign Exchange outgo are as under:
Expenditure in Foreign Currency:
Stand alone Amounts.
PARTICULARS |
Fiscal 2017 ('') |
Fiscal 2016 ('') |
Professional Fees |
NIL |
NIL |
2. Particulars of Employees:
In accordance with the provisions of Section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014, the names and other particulars of the employees are to be set out in the Directors'' Report as an addendum. However, in line with the provisions of Section 136 (1) of the Act, the Report and Accounts herein are being sent to all the members excluding the above information. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. Since no remuneration except sitting fees has been paid to any Director , the ratio of such remuneration to the median employees remuneration has not been stated. During the year no increase in remuneration of any Director or KMP or manager has been effected. The number of permanent employees at the end of the financial year was 86. The remuneration of the KMPs has been commensurate with their performance for the group. The other remuneration details of Directors/KMPs/employees are disclosed in Annexure F to this report.
Other Disclosures:
Your Company has not issued any shares with differential voting rights.
Your Company has not issued any sweat equity shares.
There was no revision in the financial statements.
There were no material changes or commitments affecting the financial position of the Company between the financial year end and date of this report.
There were 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.
The Company has not received any complaints under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future.
Acknowledgement
Your Directors wish to place on record their appreciation to the Banks, Financial Institutions, Government Authorities, customers and other business associates for their support and co-operation and wish to place on record their gratitude to the shareholders and the investors for their trust, support and confidence in the Company. The Board also places on record its appreciation for the dedication displayed by employees at all levels.
On behalf of the Board of Directors
Mumbai, Vinod K. Goenka
9th June, 2017 Chairman
Mar 31, 2014
Dear members,
The Directors have pleasure in presenting the 8th Annual Report on the
business and operations of the Company along with the audited accounts
for the financial year ended 31st March, 2014.
Financial Highlights
Particulars Standalone
F.Y.2013-14 F.Y.2012-13
Gross sales and other receipts 195,670,762 524,317,816
EBIDTA 47,688,897 183,581,266
Interest and Finance Charges 343,083,344 180,833,853
Depreciation and amortization 41,609,556 34,290,149
Operating Profit (337,004,003) (31,542,736)
Prior year items (12,439,677) -
Provision for Tax 46,738,561 (28,561,344)
Prior period tax Adjustment 15,000,000 (6,000,000)
Less: Minority Interest - -
Add: Share of Profit/(Loss) in - -
Associates (Net)
Profit after taxation (398,742,564) 3,018,608
Balance brought forward 7,886,170,374 7,883,151,766
Adjustment of Associate converted - -
to subsidiary
Adjustment for Joint Venture profit - -
Amount available for appropriation 7,474,988,133 7,886,170,374
Balance carried to Balance Sheet 7,474,988,133 7,886,170,374
Net Worth 33,750,866,1451 34,162,048,386
Particulars Consolidated
F.Y.2013-14 F.Y.2012-13
Gross sales and other receipts 3,468,750,912 3,674,454,862
EBIDTA (239,948,295) 252,117,735
Interest and Finance Charges 378,343,037 181,282,103
Depreciation and amortization 82,516,180 139,792,371
Operating Profit 220,910,922 (68,956,739)
Prior year items  Â
Provision for Tax 58,926,104 (61,217,974)
Prior period tax Adjustment  Â
Less: Minority Interest (12,455,044) 56,433,968
Add: Share of Profit/(Loss) in (34,045,835) (15,225,772)
Associates (Net)
Profit after taxation 115,483,939 33,469,432
Balance brought forward 7,304,847,968 7,155,252,911
Adjustment of Associate converted  116,125,625
to subsidiary
Adjustment for Joint Venture profit (59,321) Â
Amount available for appropriation 7,420,272,586 7,304,847,968
Balance carried to Balance Sheet 7,420,272,586 7,304,847,968
Net Worth 34,109,650,958 33,994,225,980
Business Initiatives
The "Orchid Woods" project at Goregaon (East), is awaiting the
Occupation Certificate and in the meanwhile, handing over only for fit
out is in progress. Handing over of possession in the Project "Orchid
Suburbia" at Kandivali, Mumbai has been almost completed. The other
ongoing project viz. high end residential project, "Orchid Heights" at
Mahalakshmi, is being implemented in accordance with the revised plans
and is progressing satisfactorily. "DB Crown" at Prabhadevi is proposed
to be relaunched after approvals are received. "Orchid Ozone" at
Dahisar is progressing as per plans. The project "Orchid Centre" a
commercial venture and a residential project, at Pune is being executed
by a subsidiary of Marine Drive Hospitality & Realty Pvt Ltd, in which
your Company holds substantial stake. "Orchid Golf View" in Yerwada,
Pune.and DB Paradise in Mumbai are proposed to be launched in the
current year. The Turf Estate project in Mumbai is awaiting certain
approvals and will be launched thereafter.
Audit Report:
The Statutory Auditors in their Report on Consolidated Financial
Statements have expressed qualified opinion by referring to Note No. 46
with respect to a partnership firm which are approved by your Company
as one of the partners and are yet to be approved by the other two
partners which is under process. Your Directors do not expect any
material impact on the Financial Statements upon such approvals.
The Statutory Auditors in their Report while reporting their opinion
have drawn attention of the members to certain notes to the Financial
Statements, as a matter of emphasis. While the said notes are self
explanatory, your Directors offer the following clarifications and
further explanations on the same;
1. Para 1 (Note 11.4) of standalone financial statements and Para 1
(Note 12(iii)) of consolidated financial statements: The Auditors have
referred to certain investments made in the Preference Share Capital of
an entity for an amount of Rs. 1427.69
crores. This relates to investments made in the Preference Share
Capital of Marine Drive Hospitality & Realty Pvt Ltd (Previously known
as DB Hospitality Pvt. Ltd) both in the form of Redeemable Optionally
Convertible Preference Shares and Compulsorily Redeemable Preference
Shares, which bear specified rates of dividend. This Company is
proposing to implement the project in real estate including commercial,
and residential activities and also hospitality segment and hence this
investment is considered as strategic and in the long term interests of
your Company. Your Directors keep the overall economic interests of the
Company while making such investments.
2. Para 2 (Note 12.2) of standalone financial statements and Para 2
(Note 13.2) of consolidated financial statements: Attention has been
drawn to payments made to several related parties towards security
deposits for acquisition of development rights. As stated in the said
note, your Company is in the process of obtaining necessary approvals
for the development of the said properties which have significantly
higher current market values than the carrying costs and would reap
adequate profitability on substantial completion of the respective
projects.
3. Para 3 (Note 12.4) of the standalone financial statements and Para 3
(Note 13.4) of Consolidated Financial Statements refer to advances paid
to two Associate Companies, documentation of which is under process.
4. Para 4 (Note 15) of standalone financial statements and Para 4 (Note
16) of consolidated financial statements: Auditors have referred to the
costs incurred on various projects reflected in the financial
statements under the head Inventories at lower of the actual costs
incurred or the realizable value, as reported by the Management. All
these projects are under initial stage of development and are capable
of fetching higher net realizable value greater than the cost.
5. Para 5 (Note 21, 11 & 14) of standalone financial statements refers
to losses incurred by the firms and LLPs in which Company is a partner
and investments in the said firms and LLPs, which have been audited by
the respective Auditors and accounted in your company''s Statement of
Profit and Loss. The losses are mainly due to the said firms not
recognizing the revenue in their books and carrying the expenses
incurred on the projects as Inventories. As and when the said firms
recognize the revenues after triggering the threshold limits, the
company would account for the share of profit and also recover the
investments in the said firms.
6. Para 6 (Note 21.1) of standalone financial statements refers to loss
of the firm which has been accounted in the said financial statements
based on the approval of the same by the Company as partner and which
are yet to be approved by the other two partners. Your Directors do not
expect any material impact on the Financial Statements upon such
approvals.
7. Para 7 (Note 27) of standalone financial statements and Para 5 (Note
30) of consolidated financial statements refer to the guarantees and
Securities amounting to Rs. 2897.37 crores given / provided by the
Company for loans taken by promoter group companies and few other
entities while the Company was a private limited company and also
subsidiaries and associate companies. All these companies are honouring
the commitments in respect of servicing and/or repayments. The above
Guarantees are secured and supported by counter guarantees of the
promoters in favour of the Company and are adequately secured by the
promoters of the Company.
8. Para 8 (i) and (ii) (Note 28(A)(i) and (ii) of standalone financial
statements and para 7 and 8 (Note 33A (i) and (ii) of consolidated
financial statements refer to disclosures in the audited financial
statements of the firm Dynamix Realty regarding outstanding receivables
which is of good for recovery and the allegations in the 2G Spectrum
case which is sub-judice. These notes are self-explanatory.
9. Para 9 (Notes. 29 to 31) of standalone financial statements and Para
6 (Note 31 & 32, 33(B)(iv) & (v)) of consolidated financial statements:
These relate to (a) Acquisition of additional 1/3rd stake in a company
for which an advance of Rs. 40 cores has been paid, with the matter
pending litigation among the prior Stakeholder''s family, which
according to the legal opinion would result in a favourable settlement
to enable your Company to exploit the development of the property in a
profitable manner;
(b) Investment in a wholly owned subsidiary and advances made to it
both aggregating to Rs. 143.69 crores in relation to the project to be
undertaken by it which is pending development on account of certain
litigations, in which your Company has filed SLP before the Hon.
Supreme Court (c) Rs. 13.29 crores for acquisition of development rights
of a SRA redevelopment project with a litigation and (d) Rs. 7.66
crores expenses incurred towards a Project which was awarded to one of
the subsidiary companies which was cancelled by the government
subsequently and for which a petition has been filed and the matter is
subjudice. Your Directors believe that these investments are of long
term nature and would fetch adequate return in the long term, as The
status of the pending litigations continue to be the same through the
year and as on date of this report.
10. Para 10 (Note 32 (b)) of standalone financial statements and Para
14 (Note 40B) of consolidated financial statements: This relates the
MAT Credit entitlement of Rs. 3.76 crores which will be availed for set
off in the future years.
11. Para 11 (Note 33) of standalone financial statements : This relates
to investments in the shares / capital of the subsidiaries / associates
/ firms etc and also project advances from time to time towards their
projects for various activities. These entities are having negative net
worth, since they are in the early stage of real estate development.
These investments are strategic in nature and long term. Your Directors
are of the firm view that these projects which are of medium to long
term nature would fetch results in the future to justify the initial
investments and also yield reasonable and adequate return on these
investments and deployment of funds,
12. Para 12 (Note 40) of the standalone financial statements and Para 9
(Note 42) of consolidated financial statements : With regard to the
provisional attachment upheld by the Enforcement Directorate (ED),
involving bank balance, two flats belonging to the company and loans
given to a subsidiary company of D B Hospitality Private Limited, these
relate to the 2G case in which the Managing Directors of the Company
and two of its Key Management Personnel have been charged with
commission of offences based on the investigation by CBI. The
Adjudicating authority under PMLA has taken over the bank balance of
Rs. 68.92 Lakhs. The attachment order is contested by the company in the
tribunal. The matter is sub judice. The Company is confident that the
outcome of the cases will have no adverse impact on the company and its
functioning. The advances to the subsidiary company of D B Hospitality
Pvt Ltd have been converted into investment in Preference Capital in
the said D B Hospitality Pvt Ltd (Now known as Marine Drive Hospitality
& Realty Pvt Ltd).
13. Para 13 (Note 43) of the standalone financial statements: This note
is self explanatory. The AOPs in which your company is a member have
projects for execution on which expenses have been incurred by the said
AOPs. Pending the triggering the threshold limits and recognition of
income in the said projects, the expenses incurred on the projects have
been carried to their balance sheets as losses and have not been
apportioned to the members of the AOP. These projects would fetch
adequate profits to wipe out the losses in the AOP and would be
apportioned to the members of the AOP at a later date when incomes are
recognized.
14. Para 12 of the Audit Report on consolidated Financial Statements
(CFS) draws attention to Note 33(B)(xi) regarding the petitions filed
on the claim to salt pan land owned by the Company. The Note is self
explanatory. As stated therein, the Company will defend its title.
15. Para 13 (Note 33 C) of the Report on CFS is self explanatory. As
stated, the Company through its joint venture shall commence the
development/construction of the proposed project after the directions
to the Municipal Authorities for the deletion of wrong recording as
''Forest'' land.
16. Para 15 of the Report (Note 45) on CFS is on the Accounting Policy
of the Company with regard to recognition of income and expenses
incurred on the ongoing project, and is self explanatory.
17. Para 16 of the Report on CFS refers to project advances of Rs.
32.34 crores paid to an Associate Company which shall execute a real
estate project and hence the advances are good and would result in
earnings in excess of the costs which will be incurred.
18. Para 10 of the Audit Report [Note 33 A (iii) and 33 B(viii)] on
CFS: The trade receivables, trade payables, contractors retention money
etc., are good for realisation and/or payable, though not confirmed by
the respective parties.
19. Para 11 [Note 33(A)(iv)] to the CFS draws attention to the
classification of compensation paid for the occupancy rights of a
jointly controlled entity has no adverse impact as the compensation and
other incidental charges shall stand allocated to Project work in
progress.
CARO Report
In para (ii)(c) of the CARO Report, the Auditors have referred to thefs
requirement for strengthening the documentation with regard to the
tenancy payments; and in para (iv) to strengthening of internal
controls on documentation on project contracting. The Company is taking
necessary steps in this regard. In para (xv) Auditors have referred to
certain guarantees given by the company and in para
(xvii), to term loan. These are in the normal course of business.
Dividend
With a view to conserve the resources and to meet the fund requirements
for company''s projects and also its growth plans, your Directors have
not recommended any payment of dividend for the year 2013-14.
Subsidiaries
Your Company had the following subsidiaries as on 31st March, 2014:
Name of the Subsidiary of D B Realty Ltd. Shareholding (%)
1. Esteem Properties Private Limited 100.00
2. Gokuldham Real Estate Development Company
Private Limited 74.99
3. Neelkamal Realtors Suburban Private Limited 66.00
4. Neelkamal Shantinagar Properties Private
Limited 100.00
5. Real Gem Buildtech Private Limited 100.00
6. Saifee Bucket Factory Private Limited 100.00
7. D B Man Realty Limited 51.00
8. Priya Constructions Private Limited 100.00
9. Royal Netra Constructions Private Limited 50.40
10. D B View Infracon Private Limited 100.00
11. Spacecon Realty Private Ltd (Formerly
D B Spacecon Private Limited) 74.00
12. D B MIG Realtors & Builders Private Limited 100.00
13.Vanita Infrastructure Private Limited 100.00
14. N A Estates Private Limited 100.00
15.Nine Paradise Erectors Private Limited 100.00
16. D B Contractors & Builders Private Limited 100.00
17. Goregaon Hotel & Realty Pvt Limited 100.00
Neelkamal Realtors Tower Pvt Ltd, another erstwhile subsidiary Company,
executing Orchid Heights project has now ceased to be a subsidiary of
your Company after conversion of the Preference shares by IL&FS into
Equity shares.. This project is now being managed by IL & FS with
funding and other project management assistance. Your Company''s
overall economic interest in the said company continues to be the same.
Particulars under Section 212 of the Companies Act, 1956, the Audited
Statements of Accounts and the Auditor''s Report of the Subsidiary
Companies for the year ended 31st March, 2014 along with the Reports of
the Board of Directors have not been annexed in terms of the exemption
availed by the company as per the General Circular No.2/2011 issued by
the Ministry of Corporate Affairs, Government of India''s on
fulfillment of the conditions stated therein. Copies of the audited
accounts of the company''s subsidiaries can be sought by any member by
making a written request to the Company in this regard. The
Consolidated financial statements have been prepared pursuant to the
applicable Accounting Standards, the Listing Agreement and include the
financial information of its subsidiaries. The Annual Accounts of the
subsidiary companies will also be available for inspection by any
member at the registered office of the company and at the company''s
website www.dbrealty.co.in.
Your Company has invested in the Cumulative Redeemable Preference
Shares (CRPS) of Marine Drive Hospitality & Realty Private Limited (
Previously known as D B Hospitality Private Limited) and also in the
Equity and Redeemable Optionally Convertible Preference Shares as a
strategic investment. As stated elsewhere in this Report, one of the
subsidiaries of this company has started the execution of Yerawada,Pune
property as a residential development. Two major hotels at Mumbai and
Goa are in operation under this company''s subsidiaries and contribute
to the asset valuation of the Company. The development of property at
Charni Road is on hold and an appropriate decision would be taken by
them in due course.as a Real estate development and / or hospitality
project.
Cash Flow Statement
In Conformity with the provisions of clause 32 of the Listing Agreement
with the Stock Exchanges, the Cash Flow Statement for the year ended
31st March, 2014 is annexed hereto.
Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Shahid Balwa,and
Mr.Jayvardhan Goenka retire by rotation at the forthcoming Annual
General Meeting.
The Company has four Independent Non-Executive Directors, namely
Mr.Mahesh Gandhi, Mr. Janak Desai, Mr. N.M.Rafique and Mr. Jagat
Killawala, who are proposed to reappointed as Independent Non Executive
Directors for a period of one term of five years at the forthcoming
Annual General Meeting in terms of the applicable provisions of the
Companies Act, 2013 and the Rules made thereunder. Your approval is
sought for the appointment of the said Independent Directors in the
ensuing Annual General Meeting..
Fixed Deposits
The Company has not accepted any deposits from the public within the
meaning of Section 58A of the Companies Act, 1956, during the year
under review.
Directors'' Responsibility Statement
In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors confirm that:
a) In the preparation of the annual accounts for the year ended 31st
March, 2013, the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any;
b) they have 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 at the end of the financial year and of the loss of the
Company for the year;
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) They have prepared the annual accounts on a going concern basis.
Corporate Governance and Management Discussion and Analysis Report
The Report of Corporate Governance and Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement are
given separately and forms part of this Annual Report.
Auditors
M/s. Haribhakti & Co., Chartered Accountants, the Statutory Auditors of
the Company, hold office up to the conclusion of the forthcoming Annual
General Meeting and are eligible for re-appointment for a balance
period of two years in the first term and another term of five years
thereafter, subject to ratification by the members in each Annual
General Meeting. Your Company is proposing to appoint M/s. Haribhakti &
Co., Chartered Accountants, as the Statutory Auditors for the balance
period of two years of the first term in the ensuing Annual General
Meeting.
The Company has appointed a firm of Cost Auditors and is in process of
obtaining compliance report from them for maintenance of Cost records,
in compliance of the Companies (Cost Accounting Records) Rules, 2011
applicable to the company.
Investors'' Relation and Grievances
Investors'' relations have been cordial during the year. There were no
investors'' grievances pending as on 31st March, 2014. A confirmation
to this effect has been received from the company''s Registrar and
Share Transfer Agent.
Conservation of Energy, Research and Development, Technological
Absorption, Foreign Exchange Earnings and Outgo Your Company is not
covered by the schedule of industries which are required to furnish the
information required in Form A pursuant to Section 217(1) (e) read with
Rule 2 of the Companies (Disclosure of Particulars in the Report of
Board of Directors) Rules, 1988, The Company has not imported any
technology or carried out any business of export or import and
therefore the disclosure requirement against technology absorption are
not applicable. The details of Foreign Exchange outgo are as under:
Expenditure in Foreign Currency:
Stand alone Amounts.
PARTICULARS Fiscal 2014 (Rs. ) Fiscal 2013 ( Rs. )
Professional Fees 597,808 11,87,542
Information regarding Employees Relations/Particulars of Employees
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956, (the Act) read with the Companies (Particulars
of Employees) Amendment Rules, 2011, forms part of this report. However
as permitted under the Companies Act, 1956 this Report and Accounts are
being sent to all members and others entitled excluding the above
statement. Those interested in obtaining a copy of the said statement
may write to the Company Secretary at the Registered Office. The
statement is also available for inspection at the registered office
during working hours up to the date of the forthcoming Annual General
Meeting (AGM)
Relations between employees and the management continued to be cordial
during the year. The Company is proposing to implement ESOP Scheme for
its employees and your approval for the resolutions for the same is
sought in the ensuing Annual General Meeting.
Acknowledgement
Your Directors wish to place on record their appreciation to the Banks,
Financial Institutions, Government Authorities, customers and other
business associates for their support and co-operation and wish to
place on record their gratitude to the shareholders and the investors
for their trust, support and confidence in the Company. The Board also
places on record its appreciation for the dedication displayed by
employees at all levels.
On behalf of the Board of Directors
Mumbai Vinod K. Goenka
Date: 24th May, 2014 Chairman
Mar 31, 2013
To The Members of DB REALTY LIMITED
The Directors have pleasure in presenting the 7th Annual Report on the
business and operations of the Company along with the audited accounts
for the fi nancial year ended 31st March, 2013.
Financial Highlights
(Amount Rs.)
Particulars Standalone Consolidated
F.Y.2012-13 F.Y. 2011-12 F.Y.2012-13 F.Y.2011-12
Gross sales
and other
receipts 524,317,816 63,202,903 74,454,862 55,137,061
EBIDTA 184,474,181 730,645,604 252,117,735 228,969,125
Interest and
Finance Charges 180,833,853 72,129,377 181,282,103 71,334,332
Depreciation and
amortization 35,183,064 71,887,953 139,792,371 77,647,589
Operating Profit (31,542,736) 586,628,274 (68,956,739) 79,987,204
Provision for Tax (28,561,344) (38,821,441) (61,217,974) 159,695,117
Prior period tax
Adjustment (6,000,000) (6,500,000)
Less: Minority
Interest 56,433,968 (58,740,220)
Add: Share of
Profit/(Loss)
in Associates (Net) (15,225,772) 2,047,590
Profit after
taxation 3,018,608 631,949,715 33,469,432 863,599,457
Balance brought
forward 7,883,151,766 7,251,202,051 155,252,911 05,975,810
Loss of
amalgamated
subsidiary
taken over (14,322,356)
Adjustment of
subsidiary
converted to 116,125,625
Associate
Amount available
for appropriation 7,886,170,374 7,883,151,766 7,304,847,968 55,252,911
Balance carried
to Balance Sheet 7,886,170,374 7,883,151,766 7,304,847,968 155,252,911
Net Worth 34,162,048,386 159,029,778 994,225,980 844,630,923
Business Initiatives
The on-going project viz.DB Woods at Goregaon (East) is nearing
completion and the possession is expected to be handed over in the
current year. The project Orchid Suburbia at Kandivali (East) has been
completed and the handing over of possession is in progress. The other
on-going projects viz.DB Crown at Prabhadevi and DB Ozone at Dahisar
are progressing satisfactorily. The Project Orchid Heights at
Mahalakshmi is now being launched by IL&FS Group in a revised format.
Your company is also proposing to re-launch the Turf Estate Project in
a revised format during the festival period. The project Orchid Centre
in Pune will now be executed by one of the subsidiaries of D B
Hospitality Private Limited.
Your Company is also proposing to launch DB Golf Link project in
Yerawada, Pune and DB Paradise project, in Bandra (East), Mumbai in the
current year.
Audit Report:
The Statutory Auditors in their Report have drawn attention of the
members to certain notes to the Financial Statements, as a matter of
emphasis and also have expressed a qualifi ed opinion in their Report
on Consolidated Financial statements by drawing attention to a note
forming part of Consolidated Financial statements. While the said notes
are themselves self explanatory, your Directors offer the following
clarifi cations and further explanations on the same;
1. Para 1 relating to Note no. 37 on Managerial Remuneration is self
explanatory and is a matter of record.
2. Para 2 (Note 42): With regard to the provisional attachment upheld
by the Enforcement Directorate (ED), involving bank balance, two fl ats
belonging to the company and loans given to a subsidiary company of D B
Hospitality Private Limited, these relate to the 2G case in which the
Managing Directors of the Company and two of its Key Management
Personnel have been charged with commission of offences based on the
investigation by CBI. The matter is sub judice. The attachment order is
also contested by the company in the Tribunal. The Company is confi
dent that the outcome of the cases will have no adverse impact on the
company and its functioning. The advances to the subsidiary company of
D B Hospitality Pvt Ltd have been converted into investment in
Preference Capital in the said D B Hospitality Pvt Ltd prior to the
issue of the Notice which was brought to the notice of ED.
3. Para 3 (Note Nos.21,11 and 14) refers to losses incurred by the fi
rms and LLPs in which Company is a partner, which have been audited by
the respective Auditors and accounted in your Company''s Statement of
Profi t and Loss. The losses are mainly due to the said fi rms except
Dynamix Realty not recognizing the revenue in their books and carrying
the expenses incurred on the projects as Inventories. As and when the
said fi rms recognize the revenues after triggering the threshold
limits, the company would account for the share of profi t and also
recover the investments in the said fi rms. In the case of Dynamix
Realty, the loss in the current year was mainly due to fl uctuation in
the price of transferable development rights which the company acquired
from SRA on construction of buildings for them and carried as
inventory.
4. Para 4 (i) (Note 30(A)(i) (1) and (2) and Para 4 (ii)(Note
27(A)(III) refer to disclosures in the audited fi nancial statements of
the fi rm Dynamix Realty regarding outstanding receivables which is
good for recovery and the allegations in the 2G Spectrum case which is
sub-judice. These notes are self-explanatory.
5 Para 5 (Note 27) refer to the guarantees amounting to Rs. 2414.81
crores given by the Company for loans taken by promoter group companies
and few other entities while the Company was a private limited company
and also subsidiaries and associate companies. All these companies are
honouring the commitments in respect of servicing and/or repayments.
Besides the above Guarantees are secured and supported by counter
guarantees of the promoters in favour of the Company and are adequately
secured by the promoters of the Company.
6. Para 6 (Note 35) : The Company has made investments in the shares /
capital of the subsidiaries / associates / fi rms etc and also advanced
loans from time to time towards their projects for various activities.
These entities are having negative net worth, since they are in the
early stage of real estate development. These investments are strategic
in nature and long term. Your Directors are of the fi rm view that
these projects which are of medium to long term nature would fetch
results in the future not only to justify the initial investments but
also yield reasonable and adequate return on these investments and
deployment of funds,
7. Para 7 (Notes. 31 to 33): These relate to (a) Acquisition of
additional 1/3rd stake in a company for which an advance of Rs.40 cores
has been paid, with the matter pending litigation among the prior
stakeholder''s family, which according to the legal opinion would result
in a favourable settlement to enable your Company to exploit the
development of the property in a profi table manner; (b) Investment in
a wholly owned subsidiary and advances made to it both aggregating to
Rs.143.26 crores in relation to the project to be undertaken by it
which is pending development on account of certain litigations, in
which your Company has fi led SLP before the Hon. Supreme Court and (c)
15.58 crores for acquisition of development rights of a SRA
redevelopment project with a litigation. Your Directors believe that
these investments are of long term nature and would fetch adequate
return in the long term.
8. Para 8 (Note No.15) The realizable value of the Work-in-progress
valued at lower of the cost or net realizable value as stated in the fi
nancial statements is in our opinion more than adequately realizable
for similar reasons as stated in Para 6 above.
9. Para 9 (Note No.46) The loss in the Association of Persons(AOP),
not debited to the Members'' accounts in the Books of AOPs would be
offset against the income/profi t to be realized by the said AOPs when
the said AOPs recognize the revenues in their books on reaching the
threshold limits of the execution of the respective projects.
10. In Para (v) (b) of the CARO Report, the Auditors have referred to
certain transactions in respect of aircraft usage charges of Rs.100.49
Lakhs for which comparable quotations are not available. Your Directors
are of the view that the services as per specifi cations to be rendered
to the Company were of unique and specialized nature at competitive
prices and hence, in their best judgment these charges, in relation to
the services rendered and availed were reasonable.
Auditors Report on Consolidated Financial Statements:
11. The Auditors in the Report to Consolidated Accounts have expressed
a qualifi ed opinion by drawing attention to Note 45(a) of the
Consolidated Financial Statements which states that two partnership fi
rms'' accounts have not been considered for consolidation as these
statements were not available. The Company''s subsidiaries are partners
in these fi rms and these subsidiaries have not consolidated the
accounts of the said fi rms with their fi nancial statements. As stated
in the said note, the investments in the said fi rms are not signifi
cant and hence there is no material impact of these investments in the
fi nancial statements.
12. Para 1 of the Auditors Report to Consolidated Accounts on Emphasis
of Matter deals with Managerial Remuneration dealt with elsewhere in
this Report.
13. With regard to Para 2 of the Report to Consolidated Accounts, on
the subject of accounting of Brokerages your Directors would like to
state that the same would be accounted as and when the revenue is
recognized and in the event of changes in the project scope and the
possible cancellation of the bookings, the amount of brokerage paid
will have to be refunded by the broker(s) to the Company.
14. With regard to Paras 3 to 7 of the Report to Consolidated
Accounts, these matters have already been dealt with in the earlier
paragraphs and are references made by the Auditors as part of Report to
Consolidated Accounts.
Preferential Issue of Convertible Warrants and under ESOP Scheme:
Your Company has not implemented the Preferential issue as contemplated
since the necessary approvals for the same have not been received.
Dividend
With a view to conserve the resources and to meet the fund requirements
for Company''s projects and also its growth plans, your Directors have
not recommended any payment of dividend for the year 2012-13.
Subsidiaries
Your Company had the following subsidiaries as on 31st March, 2013:
Name of the Subsidiary of D B Realty Ltd. Shareholding (%)
1. Esteem Properties Private Limited 100.00
2. Gokuldham Real Estate Development Company Private Limited 74.99
3. Neelkamal Realtors Suburban Private Limited 66.00
4. Neelkamal Shantinagar Properties Private Limited 100.00
5. Real Gem Buildtech Private Limited 100.00
6. Saifee Bucket Factory Private Limited 100.00
7. D B Man Realty Limited 51.00
8. Priya Constructions Private Limited 100.00
9. Royal Netra Constructions Private Limited 50.40
10. D B View Infracon Private Limited 100.00
11. Spacecon Realty Private Ltd (Formerly D B Spacecon Private
Limited) 74.00
12. D B MIG Realtors & Builders Private Limited 100.00
13. Vanita Infrastructure Private Limited 100.00
14. N A Estates Private Limited 100.00
15. Nine Paradise Erectors Private Limited 100.00
16. D B Contractors & Builders Private Limited 100.00
Neelkamal Realtors Tower Pvt Ltd, another erstwhile subsidiary Company,
executing Orchid Heights project has now ceased to be a subsidiary of
your Company after conversion of the Preference shares by IL & FS into
Equity shares. This project is now being managed by IL & FS group who
has consented to provide the necessary funding and other project
management assistance. Your Company''s overall economic interest in the
said company continues to be the same.
Particulars under Section 212 of the Companies Act, 1956, the Audited
Statement of Account and the Auditor''s Report of the Subsidiary
Companies for the year ended 31st March, 2013 along with the Reports of
the Board of Directors have not been annexed in terms of the exemption
availed by the company as per the General Circular No.2/2011 issued by
the Ministry of Corporate Affairs, Government of India on fulfi llment
of the conditions stated therein. Copies of the audited accounts of the
Company''s subsidiaries can be sought by any member by making a written
request to the Company in this regard. The Consolidated fi nancial
statements have been prepared pursuant to the applicable Accounting
Standards, the Listing Agreement and include the fi nancial information
of its subsidiaries. The Annual Accounts of the subsidiary companies
will also be available for inspection by any member at the registered
offi ce of the company and at the Company''s website www.dbrealty.co.in.
Your Company has invested a sum of Rs. 94 crores in the Cumulative
Redeemable Preference Shares (CRPS) during the year, of D B Hospitality
Private Limited. Three hotels are already in operation at Ahmedabad,
Mumbai and Goa under this Company and contribute to the asset valuation
of the Company.
Cash Flow Statement
In Conformity with the provisions of clause 32 of the Listing Agreement
with the Stock Exchanges, the Cash Flow Statement for the year ended
31st March, 2013 is annexed hereto.
Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Mahesh Gandhi, Mr.Vinod
Goenka and Mr. N.M.Rafi que retire by rotation at the forthcoming
Annual General Meeting.
Mr. Vinod Goenka, one of the promoters and Managing Director of the
Company has been reappointed as Chairman and Managing Director of the
Company. The necessary resolutions have been included in the
accompanying Notice for approval of the members for his appointment.
Fixed Deposits
The Company has not accepted any deposits from the public within the
meaning of Section 58A of the Companies Act, 1956, during the year
under review.
Directors'' Responsibility Statement
In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors confi rm that:
a) in the preparation of the annual accounts for the year ended 31st
March, 2013, the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any;
b) they have 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 at the end of the fi nancial year and of the profi t of the
Company for the year;
c) they have taken proper and suffi cient care for the maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) they have prepared the annual accounts on a going concern basis.
Corporate Governance and Management Discussion and Analysis Report
The Report of Corporate Governance and Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement are
given separately and forms part of this Annual Report.
Auditors
M/s. Haribhakti & Co., Chartered Accountants, the Statutory Auditors of
the Company, hold offi ce up to the conclusion of the forthcoming
Annual General Meeting and are eligible for re-appointment.
The Company has appointed a fi rm of Cost Auditors and is in process of
obtaining compliance report from them for maintenance of Cost records,
in compliance of the Companies (Cost Accounting Records) Rules, 2011
applicable to the company.
Investors'' Relation and Grievances
Investors'' relations have been cordial during the year. There were no
investors'' grievances pending as on 31st March, 2013. A confi rmation
to this effect has been received from the Company''s Registrar and Share
Transfer Agent.
Conservation of Energy, Research and Development, Technological
Absorption, Foreign Exchange Earnings and Outgo
Your Company is not covered by the schedule of industries which are
required to furnish the information required in Form A pursuant to
Section 217(1) (e) read with Rule 2 of the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988. The
Company has not imported any technology or carried out any business of
export or import and therefore the disclosure requirement against
technology absorption are not applicable. The details of Foreign
Exchange outgo are as under: Value of imports of Capital Goods on
c.i.f. basis for the year is Rs Nil. (Previous year Rs. Nil )
Expenditure in Foreign Currency:
Stand alone Amounts.
PARTICULARS Fiscal 2013 (Rs) Fiscal 2012 ( Rs)
Professional FeeS 11,87,542
Interest
Other Expenses
Information regarding Employees Relations/Particulars of Employees
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956, (the Act) read with the Companies (Particulars
of Employees) Amendment Rules, 2011, forms part of this report. However
as permitted under the Companies Act, 1956 this Report and Accounts are
being sent to all members and others entitled excluding the above
statement. Those interested in obtaining a copy of the said statement
may write to the Company Secretary at the Registered Offi ce. The
statement is also available for inspection at the registered offi ce
during working hours up to the date of the forthcoming Annual General
Meeting (AGM)
Relations between employees and the management continued to be cordial
during the year.
Acknowledgement
Your Directors wish to place on record their appreciation to the Banks,
Financial Institutions, Government Authorities, customers and other
business associates for their support and co-operation and wish to
place on record their gratitude to the shareholders and the investors
for their trust, support and confi dence in the Company. The Board also
places on record its appreciation for the dedication displayed by
employees at all levels.
On behalf of the Board of Directors
Mumbai Vinod K. Goenka
Date: 18th May, 2013 Chairman
Mar 31, 2012
The Directors have pleasure in presenting the 6th Annual Report on the
business and operations of the Company along with the audited accounts
for the financial year ended 31st March, 2012.
Financial Highlights
(Amount Rs.)
Particulars Standalone
F.Y.2011-12 F.Y.2010-11
Gross sales and
other receipts 1,263,202,903 3,611,500,769
Profit before interest,
depreciation,
amortization and taxation 730,645,604 3,032,247,319
Interest and
Finance Charges 72,129,377 410,849,958
Depreciation and amortization 71,887,953 64,446,795
Operating Profit 586,628,274 2,556,950,566
Provision for Tax (500,000) -
Deferred Tax (44,821,441) -
Minority Interest - -
Share of Profit/(Loss)
in Associates (Net) - -
Profit after taxation 631,949,715 2,556,950,566
Balance brought forward 7,251,202,051 4,694,251,485
Loss of amalgamated
subsidiary taken over - -
Amount available for
appropriation 7,883,151,766 7,251,202,051
Appropriation towards
Capital Redemption
Reserve in Subsidiary - -
Balance carried to
Balance Sheet 7,883,151,766 7,251,202,051
Net Worth 34,159,029,778 33,527,080,063
Particulars Consolidated
F.Y.2011-12 F.Y.2010-11
Gross sales and other receipts 6,955,137,061 13,272,398,669
Profit before interest,
depreciation, amortization
and taxation 1,228,969,125 4,130,373,400
Interest and Finance Charges 71,334,332 654,264,214
Depreciation and amortization 77,647,589 69,797,453
Operating Profit 1,079,987,204 3,406,311,733
Provision for Tax 213,800,630 386,745,799
Deferred Tax (54,105,513) (1,368,453)
Minority Interest (58,740,220) 30,357,527
Share of Profit/(Loss) in
Associates (Net) 2,047,590 (3,565,589)
Profit after taxation 863,599,457 2,987,011,271
Balance brought forward 6,305,975,810 3,718,964,539
Loss of amalgamated
subsidiary taken over (14,322,356) -
Amount available for
appropriation 7,155,252,911 6,705,975,810
Appropriation towards
Capital Redemption
Reserve in Subsidiary - (400,000,000)
Balance carried to Balance Sheet 7,155,252,911 6,305,975,810
Net Worth 33,844,630,923 32,981,853,822
During the year under review, the consolidated total income of the
Company was Rs. 69,551.37 Lakhs (Previous year Rs. 1,32,723.98 Lakhs).
Profit before tax stood at Rs. 10,799.87 Lakhs for the year compared to Rs.
34,063.11 Lakhs for the previous year . The Stand alone total income
for the year was Rs. 12,632.03 Lakhs (previous year Rs. 36,115.01 Lakhs)
Profit before tax stood at Rs. 5,866.28 Lakhs for the year (Previous year
Rs. 25,569.51 Lakhs)
Business Initiatives
During the year, your Company through its SPV, Dynamix Realty
successfully completed the SRA Project at Mahul and delivered
possession of 17,495 dwelling units on schedule in accordance with the
highest levels of quality standards as was required in a project of its
size. The other ongoing project of the Company's subsidiary viz. DB
Woods at Goregaon (East), Mumbai, is nearing completion and the company
is expected to hand over possession by the end of the current financial
year. High end residential project viz. DB Crown, at Prabhadevi, is
progressing satisfactorily. The other projects in the implementation
schedule viz. Orchid Suburbia at Kandivli and DB Ozone at Dahisar are
also progressing well and are executed by two other SPVs in which your
Company has substantial stake. The real estate sector is undergoing
sluggish market conditions. This has affected the over-all growth of
the company in the year under review.
The project for the redevelopment of Sector J of Govt Colony, in Bandra
East, Mumbai is to be undertaken through a Subsidiary Company viz.
Spacecon Realty Pvt Ltd after approvals are received and financial tie
up is made.
As stated in the last Annual Report, the project which was proposed to
be undertaken in Pimpri Chinchwad, Pune by one of the subsidiary
Companies, viz. D B Man Realty Limited was abruptly cancelled by the
Pimpri Chinchwad New Town Development Authority after a lapse of almost
two years from the date of Letter of Allotment by the Pimpri Chinchwad
New Town Development Authority, although the SPV Company has complied
with all the terms of the Letter of Allotment. The Company has taken
suitable legal action in the matter, by filing a petition in the High
Court, Bombay.
2G Spectrum case
As stated in the last Annual Report, the Managing Directors and two key
Management Personnel who have been implicated in the 2G spectrum case,
are fighting the legal battle in their personal capacities and are on
bail, while the judicial processes are going on in appropriate courts.
The Company is in the meanwhile managed by the two Managing Directors
assisted by a team of professional managers under the overall control
of the Board of Directors.
Audit Report:
The Statutory Auditors in their Report have drawn attention of the
members to certain notes to the Financial Statements. While the said
notes are themselves self explanatory, your Directors offer the
following clarifications and further explanations on the same:
1. Para 3(a) and 3(c) of the Report are self explanatory and are
matters of record.
2. Para 3(b) (Note 38) and Para 3 (d)(ii) (Note 27 (A)(v): With regard
to the provisional attachment upheld by the Enforcement Directorate
(ED), involving bank balance, two flats belonging to the company and
loans given to a subsidiary company of D B Hospitality Private Limited,
these relate to the 2G case in which the Managing Directors of the
Company and two of its Key Management Personnel have been charged with
commission of offences based on the investigation by CBI. The matter is
sub judice and all the concerned are in the process of fighting the
legal cases. The attachment order is also contested by the company in
the Tribunal. The Company is confident that the outcome of the cases
will have no adverse impact on the company and its functioning. The
advances to the subsidiary company of D B Hospitality Pvt Ltd have been
converted into investment in Preference Capital in the said D B
Hospitality Pvt Ltd prior to the issue of the Notice which was brought
to the notice of ED.
3. Para 3 (d) (i) Ã (Note 27 (A)(i) (1) and (2): Notes referred to are
self explanatory and the receivables are good for recovery as stated in
the said notes and hence this observation is a matter of record.
4. Para 3 (e) (Note 26 to the Accounts) The guarantees referred to
amounting to Rs. 1558.96 crores were given by the Company for loans taken
by two promoter group companies while the Company was a private limited
company and both the companies are honouring the commitments in respect
of servicing and/or repayments. Besides the above Guarantees are
secured and supported by counter guarantees of the promoters in favour
of the Company and are adequately secured by the promoters of the
Company
5. Para 3 (f) (Note 32 to the Accounts) : The Company has made
investments in the shares / capital of the subsidiaries / associates /
firms etc and also advanced loans from time to time towards their
projects for various activities. These entities are having negative net
worth, since they have not yet commenced the execution of the projects.
The payments are in the nature of seed capital by the company. Hence
your Directors are of the firm view that these projects which are of
medium to long term nature would fetch results in the future not only
to justify the initial investments but also yield reasonable and
adequate return on these investments and deployment of funds, With
regard to the investment of Rs. 2.41 crores in the Joint Venture,
financial statements of which have not been received, your Directors
would like to state that the said investments are having no impairment
and the project will commence in due course.
6. Para 3 (g) (Notes. 28 to 30): These relate to (a) Acquisition of
additional 1/3rd stake in a company for which an advance of Rs. 40 cores
has been paid, with the matter pending litigation among the prior
stakeholder's family, which according to the legal opinion would result
in a favourable settlement to enable your Company to exploit the
development of the property in a profitable manner; (b) Investment in a
wholly owned subsidiary and advances made to it both aggregating to Rs.
141.8 crores in relation to the project to be undertaken by it which is
pending development on account of certain litigations, in which your
Company has filed SLP before the Hon. Supreme Court. Your Directors
believe that these investments are of long term nature and would fetch
adequate return in the long term.
7. With regard to Note 5 (b) of the Auditors Report to the Consolidated
Accounts, relating to accounting of brokerages, the Directors would
like to state that the same would be accounted for as and when the
revenue is recognized and in the event of changes in the project scope
and the possible cancellation of the bookings, the amount of brokerage
paid will have to be refunded by the broker(s) to the company.
8. With regard to the observation of the Auditors in Para (v) of the
CARO Report relating to the strengthening of the internal controls for
tenancy payments/compensation, and also Project contracting, it may be
noted that such payments are made in accordance with the decisions
taken in the competitive business environment and the payments are
continuously monitored and documented. The internal control systems
continuously evolve in a rapid business environment and implemented
with a view to achieve efficiency and cost effectiveness. As observed
by the Auditors, there is no continuing failure to correct major
weakness.
9. In Para (v) (b) of the CARO Report, the Auditors have referred to
certain transactions in respect of aircraft usage charges of Rs. 56.25
Lakhs for which comparative quotations are not available. Your
Directors are of the view that the services as per specifications to be
rendered to the Company were of unique and specialized nature at
competitive prices and hence, in their best judgment these charges, in
relation to the services rendered and availed were reasonable. As
regards the civil engineering contract awarded to an entity where
comparable quotations for additional scope of work were not available,
your Directors would like to state that the additional work entrusted
to the said entity entailed various jobs relating to clearances,
approvals etc., which are not undertaken by a civil contractor and by
awarding such a contract for such specialized activities, your Company
has been benefited by appointment of one agency with specialized skills
and expertise at economical costs, in the best business interests of
the Company. In their best judgment, your Directors would like to
reiterate that comparative quotations for carrying out all such
specialized activities would involve multiple agencies and hence not be
available with one agency.
10. With regard to observation of auditor as stated in Para (viii) of
the CARO Report about proper maintenance of cost records under clause
(d) of sub-section 1 of Section 209 of the Companies Act, 1956, your
directors have to state that the Company has already appointed a firm
of Cost Accountants for the same and the Company is in process of
obtaining compliance report from them for maintenance of Cost records.
11. With regard to observation as stated in para (ix)(b) about
non-depositing of service tax of Rs. 4,55,163/- on booking of flats /
premises, your directors have to state that already communications have
been sent to the customers to pay the service tax applicable for the
booking of their respective flats to the Company and the Company has
started depositing the same with the service tax authority upon receipt
of the same from customers.
Dividend
With a view to conserve the resources and to meet the fund requirements
for Company's projects and also its growth plans, your Directors have
not recommended any payment of dividend for the year 2011-12.
Subsidiaries Your Company had the following subsidiaries as on 31st
March, 2012:
Sr
No Name of the Subsidiaries Shareholding (%)
1 Esteem Properties Private Limited 100.00
2 Gokuldham Real Estate Development Company
Private Limited 74.99
3 Neelkamal Realtors Tower Private Limited 50.72
4 Neelkamal Realtors Suburban Private Limited 66.00
5 Neelkamal Shantinagar Properties Private Limited 100.00
6 Real Gem Buildtech Private Limited 100.00
7 Saifee Bucket Factory Private Limited 100.00
8 D B Man Realty Limited 51.00
9 Priya Constructions Private Limited 100.00
10 Royal Netra Constructions Private Limited 50.40
11 D B View Infracon Private Limited 100.00
12 Spacecon Realty Private Ltd (Formerly
D B Spacecon Private Limited) 74.00
13 D B MIG Realtors & Builders Private Limited 100.00
14 Vanita Infrastructure Private Limited 100.00
15 N A Estates Private Limited 100.00
16 Nine Paradise Erectors Private Limited 100.00
17 D B Contractors & Builders Private Limited 100.00
A G Infra constructions Private Limited, one of the erstwhile
subsidiaries, by virtue of being a wholly owned subsidiary Company of
Royal Netra Constructions Pvt Ltd has been merged with Royal Netra
Constructions Pvt Ltd by order of the Hon. High Court, Bombay dated
22nd March, 2012 w.e.f.1st April, 2011.
All the other Subsidiary Companies are engaged and/or proposing to
launch some of the Company's Projects, as Special purpose Vehicles. The
Company is also through other associates, joint Ventures, firms, AOPs
etc, acting as SPVs undertaking few other projects of development of
the properties for which it has acquired development rights. In the
last quarter of the year under review, the Company has disposed off its
shareholding in two of the associate companies viz.Crossway Realty Pvt
Ltd and Dynamix Building Materials Pvt Ltd to the other Joint Venture
partner, since the projects slated to be undertaken by the said
associates have not made progress.
Particulars under Section 212 of the Companies Act, 1956, the Audited
Statement of Account and the Auditors' Report of the Subsidiary
Companies for the year ended 31st March, 2012 along with the Reports of
the Board of Directors have not been annexed in terms of the exemption
availed by the company as per the General Circular No.2/2011 issued by
the Ministry of Corporate Affairs, Government of India on fulfillment
of the conditions stated therein. Copies of the audited accounts of the
Company's subsidiaries can be sought by any member by making a written
request to the Company in this regard. The Consolidated financial
statements have been prepared pursuant to the applicable Accounting
Standards, the Listing Agreement and include the financial information
of its subsidiaries. The Annual Accounts of the subsidiary companies
will also be available for inspection by any member at the registered
office of the company and at the Company's website www.dbrealty.co.in.
During the year, your Company has invested in the Equity Shares,
Cumulative Redeemable Preference Shares (CRPS) Compulsorily Convertible
Cumulative Preference Shares (CCCPS) and Redeemable Optionally
Convertible Cumulative Preference Shares (ROCCPS), of D B Hospitality
Private Limited by way of primary and secondary investments,
constituting 49% of its post diluted paid up capital, to the exclusion
of CRPS. Three hotels are already in operation at Ahmedabad, Mumbai and
Goa under this Company / its Subsidiaries and contribute to the asset
valuation of the Company.
Cash Flow Statement
In Conformity with the provisions of clause 32 of the Listing Agreement
with the Stock Exchanges, the Cash Flow Statement for the year ended
31st March, 2012 is annexed hereto.
Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Jagat Killawala and Mr.
Janak Desai retire by rotation at the forthcoming Annual General
Meeting.
Mr. Shahid Balwa, one of the promoters and Managing Director of the
Company who opted to resign from the position of Managing Director and
also as Director w.e.f. 9th February, 2011 after he was detained in the
alleged telecom 2G licence matters, has been reappointed as Additional
Director w.e.f.10th December, 2011 and has been designated as Vice
Chairman and Managing Director of the Company. The necessary
resolutions have been included in the accompanying Notice for approval
of the members for his appointment.
Mr. Vinod Goenka, Managing Director has been appointed as Executive
Chairman by the Board of Directors at the meeting held on 10th
December, 2011 and designated as Chairman and Managing Director. Mr. K
M Goenka and Mr. Usman Balwa were appointed as Additional Directors
w.e.f. 21st April, 2011 in order to take charge of the business of the
Company and to look after the day-to-day operations. Since the
promoters of the Company Mr. Vinod Goenka and
Mr. Shahid Balwa who were earlier detained in connection with the
investigation and subsequent Judicial proceedings in respect of the
ongoing 2G spectrum cases, were released and have taken over the
Management, both these Directors resigned from the Board w.e.f. 10th
December, 2011.
Mr. Salim Balwa and Mr. Jayvardhan Goenka have been appointed as
Additional Directors w.e.f.10th December, 2011. Both these Directors
hail from promoters' families and hence are non independent Directors
under Clause 49 of the listing agreement. All the Additional Directors
hold their respective offices up to the date of the ensuing Annual
General Meeting of the Company and the Company has received Notices
from the members proposing their appointments as Directors liable to
retire by rotation. The Board of Directors has also reconstituted
various committees in accordance with Clause 49 of the listing
agreement. Brief resume of the retiring Directors as well as Directors
whose appointments are to be made under Section 257 of the Companies
Act, 1956 and a brief profile as stipulated under Clause 49 of the
Listing Agreement with the stock exchanges form part of Notice.
Fixed Deposits
The Company has not accepted any deposits from the public within the
meaning of Section 58A of the Companies Act, 1956, during the year
under review.
Directors' Responsibility Statement
In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors confirm that:
a) in the preparation of the annual accounts for the year ended 31st
March, 2012, the applicable accounting standards have been followed
along with proper explanation relating to material departures, if any;
b) they have 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 at the end of the financial year and of the profit of the
Company for the year
c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) they have prepared the annual accounts on a going concern basis.
Corporate Governance and Management Discussion and Analysis Report
The Report of Corporate Governance and Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement are
given separately and form part of this Annual Report.
Auditors
M/s. Haribhakti & Co., Chartered Accountants, the Statutory Auditors of
the Company, hold office up to the conclusion of the forthcoming Annual
General Meeting and are eligible for re-appointment.
The Company has appointed a firm of Cost Accountants as Cost Auditors
and is in process of obtaining compliance report from them for
maintenance of Cost records, in compliance of the Companies (Cost
Accounting Records) Rules, 2011 applicable to the company.
Investors' Relation and Grievances
Investors' relation have been cordial during the year. There were no
investors' grievances pending as on 31st March, 2012. A confirmation to
this effect has been received from the Company's Registrar and Share
Transfer Agent.
Conservation of Energy, Research and Development, Technological
Absorption, Foreign Exchange Earnings and Outgo
Your Company is not covered by the schedule of industries which are
required to furnish the information required in Form A pursuant to
Section 217(1) (e) read with Rule 2 of the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988. The
Company has not imported any technology or carried out any business of
export or import and therefore the disclosure requirement against
technology absorption are not applicable. The details of Foreign
Exchange outgo are as under: Value of imports of Capital Goods on
c.i.f. basis for the year is Rs Nil. (Previous year Rs. 29,82,632 )
Information regarding Employees Relations/Particulars of Employees
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956, (the Act) read with the Companies (Particulars
of Employees) Amendment Rules, 2011, forms part of this report.
However, as permitted under the Act, this Report and Accounts are being
sent to all members and others entitled excluding the above statement.
Those interested in obtaining a copy of the said statement may write to
the Company Secretary at the Registered Office. The statement is also
available for inspection at the registered office during working hours
up to the date of the forthcoming Annual General Meeting (AGM).
Relations between employees and the management continued to be cordial
during the year.
Acknowledgement
Your Directors wish to place on record their appreciation to the Banks,
Financial Institutions, Government Authorities, customers and other
business associates for their support and co-operation and wish to
place on record their gratitude to the shareholders and the investors
for their trust, support and confidence in the Company. The Board also
places on record its appreciation for the dedication displayed by
employees at all levels.
On behalf of the Board of Directors
Place : Mumbai Vinod K. Goenka
Date: 26th May, 2012 Chairman
Mar 31, 2011
The Members
D B REALTY LIMITED
The Directors have pleasure in presenting the 5th Annual Report on the
business and operations of the Company along with the audited accounts
for the fnancial year ended 31st March, 2011.
Financial highlights
(Amount Rs.)
Particulars Standalone Consolidated
F.Y.2010-11 F.Y. 2009-10 F.Y.2010-11 F.Y.2009-10
Gross sales
and other
receipts 3,611,500,769 2,848,038,342 13,272,398,669 9,803,387,276
EBIDTA 3,032,247,319 2,691,099,639 4,130,373,400 3,946,597,276
Interest
and
Finance
Charges 410,849,958 356,540,385 654,264,214 726,113,259
Depreciation
and
amortization 64,446,795 54,159,213 69,797,453 95,535,595
operating
profit 2,556,950,566 2,280,400,041 3,406,311,733 3,124,948,422
Provision
for Tax - (6,500,000) 385,377,346 (413,258,359)
Less:
Minority
Interest - - 30,357,527 191,856,961
Add:
Share of
Profit/
(Loss) in
Associates
(Net) - - (3,565,589) (63,061)
profit
after
taxation 2,556,950,566 2,273,900,041 2,987,011,271 2,519,770,041
Balance
brought
forward 4,694,251,485 2,420,351,444 3,718,964,539 1,199,194,498
Amount
available
for
appropri
-ation 7,251,202,051 4,694,251,485 6,705,975,810 3,718,964,539
Appropri
-ation
towards
Capital
Redemption
Reserve - - (400,000,000) -
Balance
carried to
Balance
Sheet 7,251,202,051 4,694,251,485 6,305,975,810 3,718,964,539
net Worth 33,527,080,063 30,970,129,497 32,981,853,822 30,486,479,364
During the year under review, the consolidated total income of the
Company increased to Rs.13,272 million from Rs. 9,803 million in the
previous year, representing an increase of 35%. Profit before tax stood
at Rs. 3,406 million for the year compared to Rs.3,125 million for the
previous year representing an increase of 9%.
The Standalone total income for the year 2010-11 increased to Rs. 3,612
million from Rs. 2,848 million in the previous year representing an
increase of 26.82%. Profit before tax stood at Rs. 2,557 million for the
year compared to Rs. 2,280 million for the previous year representing
an increase of 12.15%.
Business Initiatives
During the year, your Company through its Subsidiaries, Associates and
Joint Ventures, wherein your Company holds substantial stake had
launched projects in Mumbai, namely, high end residential project
"Orchid Turf View" at Mahalakshmi and "Orchid Views" at Mumbai Central.
The Company has its other major ongoing projects, viz. "Orchid Woods"
at Goregaon (East), SRA project at Mahul, high end residential projects
viz. "Orchid Crown" at Prabhadevi, "Orchid Heights" at Mahalakshmi,
"Orchid Suburbia" at Kandivli and "Orchid Ozone" at Dahisar. The
ongoing projects also include "Orchid Centre" a commercial venture and
a residential project, "Orchid Golf View" in Yerwada, Pune. While the
real estate industry started showing sign of slowing down from the
second quarter of FY 2010- 11, the customers' response has been very
encouraging for all our projects and construction is also progressing
satisfactorily.
The project for the redevelopment of Sector J of Govt Colony, in Bandra
East, Mumbai is proposed to be undertaken through a Subsidiary Company
viz. DB Spacecon Pvt Ltd after approvals are received and fnancial tie
up is made.
The project which was proposed to be undertaken in Pimpri Chinchwad,
Pune by one of the subsidiary Companies, viz. D B Man Realty Limited
and which was pending for the execution of the development agreement
with the Pimpri Chinchwad New Town Development Authority has been
cancelled after a lapse of almost two years from the date of Letter of
Allotment by the Pimpri Chinchwad New Township Development Authority
although the SPV Company has complied with all the terms of the Letter
of Allotment. The Company has sought appropriate legal redressal in the
matter.
2G Spectrum case
With regard to the media reports alleging involvement of the Company
with the ongoing 2G spectrum case, your Company, by various Press
Releases, has already clarified that it is not connected with the same,
though the matter involves one of the telecom companies wherein
promoters of your Company hold stake. There are allegations against the
two Managing Directors based on charge sheet filed by CBI. In addition,
two Key Management Personnel of the Company have also been charged in
the same matter. The matter is sub- judice and all the concerned are in
the process of fghting the legal battle to establish their innocence.
Your Company reiterates that it has no involvement in the same and has
been extending the required co-operation and assistance to all the
agencies in this regard. The Company's functioning has not been
impacted by such reports and your Company continues to function under
the able guidance of the Chairman and senior directors with rich
business experience in the industry and other able professionals under
the guidance and supervison of the Board of Directors of the company.
our comments on the observations of the auditors:
The Auditors in their Report have drawn attention of the members to
certain notes to the Financial Statements. While the said notes
themselves are self explanatory, your Directors offer the following
clarifications and further explanations relating to some of the
significant observations, which in the Company's perspective are normal
transactions commensurate with the size and nature of its business
activities:
1. Para 3 (b) (i) of the Report: The frm Dynamix Realty in which your
Company is a partner with 99% stake in profits with regard to TDRs
generated by the said frm has advanced certain amounts to the other
partner including Rs. 150 crores as Security Deposit for the
Development Rights granted to the frm by the said other partner, and
the balance drawn by the other partner as advance to be adjusted
against the share of profit and Rs. 104.80 crores to another company in
which your Company has also business interests. All these advances are
fully recoverable and good for recovery.
2. Para 3 (b) (ii) of the Report: The matter relating to allegations
in 2G Spectrum case has been dealt with elsewhere in this report.
3. Para 3 (c) of the Report: (Note 2 to the Accounts) The guarantees
referred to amounting to Rs. 1469.17 crores were given by the Company
for loans taken by two other entities in the group relating to the
hospitality business while the Company was a private limited company
and much before the company went public in February, 2010. These two
companies are honouring the commitments in respect of servicing and/or
repayments of their debt obligations. Besides, the above Guarantees are
secured and supported by counter guarantees of the promoters in favour
of the Company, and are adequately secured by the promoters of the
Company.
4. Para 3 (d) of the Report: (Note 8 to the Accounts): The Company has
made investments in the shares / capital of the subsidiaries /
associates / frms etc. and also advanced loans. These entities are
having negative net worth, since thay have not yet commenced the
execution of the projects. The advances were given from time to time
towards these projects for various activities including the seed
capital by the Company towards these projects. Hence, your Directors
are of the frm view that these projects, which are of medium to long
term nature would fetch results, in the future, not only to justify the
initial investments but also to yield reasonable and adequate return on
these investments in line with the industry standards.
Dividend
Your Company is in a growth phase and it is imperative to conserve cash
for investing in implementation of the current projects as well as in
other investments, which have synergy to our business and the potential
to significantly add to the shareholder value. With a view to conserve
the resources and to meet the fund requirements for Company's projects
and also its growth plans, your Directors have not recommended any
payment of dividend for the year 2010-11. However, your Directors would
like to assure that reasonable dividends would be recommended by the
Board at an appropriate time to reward the shareholders.
Subsidiaries
Your Company had the following subsidiaries as on 31st March, 2011:
name of the Subsidiary of D B realty Ltd. Shareholding (%)
1. D B Properties Private Limited 100.00
2. Esteem Properties Private Limited 100.00
3. Gokuldham Real Estate Development Company Private
Limited 74.99
4. Neelkamal Realtors Tower Private Limited 50.72
5. Neelkamal Realtors Suburban Private Limited 66.00
6. Neelkamal Shantinagar Properties Private Limited 100.00
7. Real Gem Buildtech Private Limited 85.00
8. Saifee Bucket Factory Private Limited 100.00
9. D B Man Realty Limited 51.00
10. Priya Constructions Private Limited 100.00
11. D B Chandak Realtors Private Limited 70.00
12. Royal Netra Constructions Private Limited 50.40
13. A G Infraconstruction Private Limited
(Through Royal Netra Constructions Private Limited)
14. DB View Infracon Private Limited 100.00
15. DB Spacecon Private Limited 74.00
16. DB MIG Realtors & Builders Private Limited 100.00
17. Vanita Infrastructure Private Limited 100.00
18. N A Estates Private Limited 100.00
19. Nine Paradise Erectors Private Limited 100.00
20. D B Contractors & Builders Private Limited 100.00
All the Subsidiary Companies are engaged and/or proposing to launch
some of the Company's Projects, as Special Purpose Vehicles. The
Company is also through other associates, joint Ventures, frms, AOPs
etc, acting as SPVs undertaking few other projects of development of
the properties for which it has acquired Development rights.
As on date of this Report, your Company has disposed of its holdings in
D B Properties Pvt Ltd which was 100% subsidiary after transferring
certain business and economic interests of the said subsidiary company
in few partnership frms to another subsidiary, thus retaining its
construction activities in another SPV viz. DB View Infracon Private
Limited. The Company has also transferred its 70% shareholding in D B
Chandak Realtors Private Limited to the other partner/shareholder,
since this company has not been able to undertake the activity as
envisaged earlier.
Royal Netra Constructions Pvt Ltd which was a step-down subsidiary
through D B Man Realty Limited has become a direct subsidiary, during
the year, with the transfer of shares by D B Man Realty Limited to your
Company. A G Infraconstructions Private Limited has become a wholly
owned subsidiary Company of Royal Netra Constructions Pvt Ltd and hence
a step down subsidiary of your Company.
Particulars under Section 212 of the Companies Act, 1956, the Audited
Statement of Account and the Auditor's Report of the Subsidiary
Companies for the year ended 31st March, 2011 along with the Reports of
the Board of Directors have not been annexed in terms of the exemption
availed by the company as per the General Circular No.2/2011 issued by
the Ministry of Corporate Affairs, Government of India, on fulfillment
of the conditions stated therein. Copies of the audited accounts of the
Company's subsidiaries can be sought by any member by making a written
request to the Company in this regard. The Consolidated fnancial
statements have been prepared pursuant to the applicable Accounting
Standards, the Listing Agreement and include the fnancial information
of its subsidiaries. The Annual Accounts of the subsidiary companies
will also be available for inspection by any member at the registered
office of the company and at the Company's website www.dbrealty.co.in.
Investment in the hospitality Group:
Your Directors have taken a decision, in the overall interests of the
stakeholders as well to enhance overall value of the entity to invest
in the Shares of the Hospitality company of DB Group which has so far
remained a separate vertical. D B Hospitality Pvt Limited already owns
two operating hotels in Mumbai and Ahmedabad through its subsidiaries.
A third hotel had recently done a soft launch in Goa through a third
subsidiary. The fourth operating hotel in Mukundgarh is expected to go
on stream in October 2011. All these hotels are rated international
brands. This Company is also in the process of setting up star hotels
in Mumbai and New Delhi, at strategic locations. Your Directors are of
the frm view that these investments offer an opportunity to DB Realty
shareholders to participate in the positive growth scenario of luxury
segment of the growing hospitality business and enhance value to the
Company and its shareholders.
Cash flow Statement
In Conformity with the provisions of clause 32 of the Listing Agreement
with the Stock Exchanges, the Cash Flow Statement for the year ended
31st March, 2011 is annexed hereto.
Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Vinod Goenka retires by
rotation at the forthcoming Annual General Meeting. Mr. Vinod Goenka is
also Managing Director of the Company, whose tenure will expire by the
end of August, 2012.
Mr. Shahid Balwa, another promoter and Managing Director of the Company
has opted to resign from the position of Managing Director and also as
Director w.e.f. 9th February, 2011 after he was detained in the alleged
telecom 2G licence matters.
During the year, Mr. Shahzaad Dalal, Mr. Mahesh Gandhi and Mr. Sundaram
Rajagopal who were the nominees on the Board of the Company
representing the Private Equity Investors, ceased to be nominee
Directors. However w.e.f.1st November, 2010, all the three Directors
were reappointed by the Board of Directors as Additional Directors. Mr.
Shahzaad Dalal and Mr. Sundaram Rajagopal subsequently resigned as
Directors w.e.f. 1st February, 2011 and 21st March, 2011 respectively.
Mr. Chandan Bhattacharya, an Independent Director also resigned from
the Board w.e.f.18th March, 2011. Mr. Michael McCook resigned as
independent Director w.e.f. 21st April, 2011. Mr. Karunchandra
Srivastava has resigned as independent Director w.e.f. 21st May, 2011.
Mr. K. M. Goenka and Mr. Usman Balwa have been appointed as Additional
Directors in order to oversee and guide the business of the Company and
to monitor the operations. They hail from the Promoter families and
hence are non-independent Directors in terms of Clause 49 of the
Listing Agreement with the Stock Exchanges.
Mr. Jagat Killawala, Mr. Janak Desai and Mr. N. M. Rafque have been
appointed as Independent additional Directors w.e.f. 17th May, 2011.
Mr. K. M. Goenka has also been appointed as the Chairman of the Board
of Directors. All these Additional Directors hold their respective
offices up to the date of the ensuing Annual General Meeting of the
Company and the Company has received Notices from the members proposing
their appointments as Directors liable to retire by rotation.
The Board of Directors has also reconstituted various Committees in
accordance with Clause 49 of the listing agreement.
Brief resume of the retiring Director as well as Directors whose
appointments are to be made under Section 257 of the Companies Act,
1956 and a brief profile as stipulated under Clause 49 of the Listing
Agreement with the stock exchanges forms the part of Notice / Report on
Corporate Governance.
fixed Deposits
The Company has not accepted any deposits from the public within the
meaning of Section 58A of the Companies Act, 1956, during the year
under review.
Directors' responsibility Statement
In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors confrm that:
a) in the preparation of the annual accounts for the year ended 31st
March, 2011, the applicable accounting standards had been followed
along with proper explanation relating to material departures, if any;
b) they 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 at the end of the fnancial year and of the profit of the
Company for the year;
c) they had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) They had prepared the annual accounts on a going concern basis.
Corporate Governance and management Discussion and analysis report
The Report on Corporate Governance and Management Discussion and
Analysis as stipulated under Clause 49 of the Listing Agreement are
given separately and forms part of this Annual Report.
auditors
M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory
Auditors of the Company, hold office up to the conclusion of the
forthcoming Annual General Meeting. Members are requested to appoint
Auditors for the current year at the Annual General Meeting.
Investors' relation and Grievances
Investors' relations have been cordial during the year. There were no
investors' grievances pending as on 31st March, 2011. A confrmation to
this effect has been received from the Company's Registrar and Share
Transfer Agent.
Conservation of energy, research and Development, technological
absorption, foreign exchange earnings and outgo
Your Company is not covered by the schedule of industries which are
required to furnish the information required in Form A pursuant to
Section 217(1) (e) read with Rule 2 of the Companies (Disclosure of
Particulars in the Report of Board of Directors) Rules, 1988, The
Company has not imported any technology or carried out any business of
export or import and therefore the disclosure requirement against
technology absorption are not applicable. The details of Foreign
Exchange outgo are as under:
Value of imports of Capital Goods on c.i.f. basis for the year is Rs.
29, 82,632 (Previous year Rs. 31,07,476)
Expenditure in Foreign Currency:
Stand alone amounts
particulars fiscal 2011(rs) fiscal 2010 (rs.)
Professional Fees 9,38,242 92,77,917
Interest - 16,33,25,375
Other Expenses 35,30,034 1,13,19,392
Information regarding employees relations/particulars of employees
The statement of particulars required pursuant to Section 217(2A) of
the Companies Act, 1956, (the Act) read with the Companies (Particulars
of Employees) Amendment Rules, 2011, forms part of this report. However
as permitted under the Companies Act, 1956 this Report and Accounts are
being sent to all members and others entitled excluding the above
statement. Those interested in obtaining a copy of the said statement
may write to the Company Secretary at the Registered Office. The
statement is also available for inspection at the registered office
during working hours up to the date of the forthcoming Annual General
Meeting (AGM)
Relations between employees and the management continued to be cordial
during the year.
acknowledgement
Your Directors wish to place on record their appreciation to the Banks,
Financial Institutions, Government Authorities, customers and other
business associates for their support and co-operation and wish to
place on record their gratitude to the shareholders and the investors
for their trust, support and confdence in the Company. The Board also
places on record its appreciation for the dedication displayed by
employees at all levels.
on behalf of the Board of Directors
place : mumbai K. m. Goenka
Date : 12th august, 2011 Chairman
Mar 31, 2010
The Directors have pleasure in presenting the 4th Annual REPORT on the
BUSINESS and operations of the Company along with the audited accounts
for the financial year ended 31st March, 2010.
Financial Highlights
(amount Rs.)
Particulars Standalone
F.y. 2009-10 F y 2008-09
Gross sales and other receipts 2,848,038,342 2,906,281,427
Profit before interest and finance
charges, depreciation, amortization
and taxation 2,691,099,639 2,777,982,556
Interest and Finance Charges 356,540,385 193,135,918
Depreciation and amortization 54,159,213 28,361,960
Operational profit before tax 2,280,400,041 2,556,484,678
Provision for Tax (6,500,000) (1,970,051)
Less: Minority Interest - -
Add:Share of Profit/(Loss) in
Associates (Net) - -
Profit after taxation 2,273,900,041 2,554,514,627
Balance brought forward 2,420,351,444 (134,163,183)
Balance carried to Balance Sheet 4,694,251,485 2,420,351,444
Net Worth 30,970,129,497 9,094,403,551
Particulars Consolidated
F.Y.2009-10 F.Y.2008-09
Gross sales and other receipts 9,803,387,276 4,712,318,283
Profit before interest and finance
charges, depreciation, amortization
and taxation 3,946,597,276 2,325,851,234
Interest and Finance Charges 726,113,259 746,815,160
Depreciation and amortization 95,535,595 73,895,869
Operational profit before tax 3,124,948,422 1,505,140,205
Provision for Tax (413,258,359) (66,944,730)
Less: Minority Interest 191,856,961 21,544,948
Add:Share of Profit/(Loss) in
Associates (Net) (63,061) 113,074
Profit after taxation 2,519,770,041 1,416,763,601
Balance brought forward 1,199,194,498 (217,569,103)
Balance carried to Balance Sheet 3,718,964,539 1,199,194,498
Net Worth 30,486,479,364 8,108,576,872
major events
During the year under review, your Company has successfully launched
its Initial Public offer of 32,051,282 equity Shares of Rs. 10/- each
for cash at a price of Rs. 468/- per equity Share, through Book
Building process resulting in aggregate gross I P o proceeds of
Rs.15,000 million. the Issue constituted upto 13.18% of the post Issue
paid-up capital. the IPo opened on 29th January, 2010 and closed on 2nd
February, 2010 and was oversubscribed by 2.63 times. the equity Shares
of the Company were listed in Bombay Stock exchange Ltd. (BSE) and
National Stock exchange of India Ltd. (NSE) and the trading in the
shares of the Company commenced on 24th February, 2010 on both the
stock exchanges. Prior to IPo, the following pre-launch activities were
completed by the Company during the year under review:
(a) The Company was converted as a public Limited company and the name
was changed to D B Realty Limited, pursuant to the shareholders
resolution dated September 5, 2009 and a fresh certificate of
incorporation dated September 23, 2009 was received from Registrar of
Companies, Mumbai;
(b) The Company also increased its authorized share capital from Rs.
125,000,000 divided into 11,000,000 equity Shares and 1,500,000
convertible cumulative preference shares of Rs. 10 each to Rs.
3,000,000,000 divided into 298,500,000 equity Shares and 1,500,000
preference shares of Rs.10 each;
(c) The Company converted the outstanding 810,000 Compulsorily
convertible preference shares of Rs.10 each issued at a premium of Rs.
3,990 per share into 810,000 equity Shares of Rs.10 each and 9,37,500
compulsorily convertible debentures of Rs.5,600 each into 937,500
equity Shares of Rs.10 each at a premium of Rs.5,590 per Share which
were earlier held by different Private equity Investors/body corporate;
and
(d) The Company also issued and allotted bonus shares on 26.09.2009 in
the ratio of 20 new fully paid up equity shares for each equity share
held by the Shareholders by capitalizing part of the amount standing to
the credit of Security Premium Account.
Performance Review
Post global economic crisis in the 3rd quarter, 2008, the Real estate
Industry witnessed a turn around and in early March, 2009, on the back
of the Governments stimulus in the form of easing liquidity and
allowing real estate companies to restructure the debt, your Company
could position itself for better performance. Your Company is having
strong presence in and around Mumbai, which has a significant shortage
of developable open land and this underlines its strong fundamentals to
cater to the demands in real estate of all income groups/strata of
society.
During the year under review, your Company, in the consolidated
Financial Statements of the Group consisting of the Company, its
subsidiaries, Firms, AoPs, Joint Ventures and Associates could post a
robust growth as its total revenue increased from Rs. 471.23 crores in
the previous year to Rs. 980.34 crores (108.04% increase), and the
Companys Group Profit after tax (PAt) stands at Rs.251.98 crores as
compared to Rs. 141.68 crores (77.85% increase) in the corresponding
previous year.
BUSINESS initiatives
During the year, your Company through its Subsidiaries, Associates and
Joint Ventures, wherein your Company holds substantial stake had
launched (1) a high end residential project namely orchid Crown, at
Prabhadevi, Mumbai, (2) orchid Suburbia at Kandivli, Mumbai and (3)
orchid ozone at Dahisar, at the outskirts of Mumbai. the Company has
its ongoing project orchid Woods at Goregaon (east), Mumbai, and SRA
project at Mahul. the Company received a very encouraging response for
all the projects from various strata of society and has already
commenced the initial stage of the development, in the Projects
undertaken during the year.
The Company is also through one of subsidiaries slated to undertake one
of major township development in Pimpri Chinchwad area of Pune which is
expected to be launched shortly. the Company is also proposing to
launch its other upcoming projects as soon as the requisite approvals
are received.
The Company has received a Letter of Intent dated 26th July, 2010 from
Executive Engineer, Building Construction Division, Govt of Maharashtra
to develop Sector J of Government Colony at Bandra (east), Mumbai. the
Company expects to develop approximately 8 million sq ft of world class
enclave comprising of residential and commercial uses.
Over and above the ongoing and upcoming projects, your Company is
constantly on the look out for various avenues of growth by exploring
potential developments with a view to undertake both short term and
long term property developments.
dividend
With a view to Conserve the resources and to meet the fund requirements
for Companys growth plans, your Directors do Not recommend any payment
of Dividend for the year 2009-10.
Subsidiaries
Your Company has the following subsidiaries as on 31st March, 2010:
Name of the Subsidiary of D B Realty ltd. Sharehoding (%)
1. D B Properties Private Limited 100.00
2. Esteem Properties Private Limited 100.00
3. Gokuldham Real estate Development Company
Private Limted 74.99
4. Neelkamal Realtors tower Private Limited 50.72
5. Neelkamal Realtors Suburban Private Limited 66.00
6. Neelkamal Shantinagar Properties Private Limited 100.00
7. Real Gem Buildtech Private Limited 85.00
8. Saifee Bucket Factory Private Limited 100.00
9. D B Man Realty Limited 51.00
10. Priya Constructions Private Limited 100.00
11. D B Chandak Realtors Private Limited 70.00
12. Royal Netra Constructions Private Limited
(through D B Man Realty Limited) 50.40
The above Subsidiary Companies are engaged and/or proposing to launch
some of the Companys Projects, as SPECIALPurpose Vehicles. the Company
is also through other associates, joint Ventures, firms, AoPs etc,
acting as SPVs undertaking few other projects of development of the
Properties for which it has acquired Development rights.
Particulars under Section 212 of the Companies Act, 1956, the Audited
Statement of Account and the Auditors REPORT of the Subsidiary
Companies for the year ended 31st March, 2010 along with the Reports of
the Board of Directors have Not been annexed since, the Company has
been exempted by the Central Government vide their letter
No.F47/537/2010-CL-CL-III dated 21st June, 2010. Copies of the audited
accounts of the Companys subsidiaries can be sought by any member by
making a written request to the Company in this regard. the
Consolidated financial statements have been prepared pursuant to the
applicable Accounting Standards, the Listing Agreement and includes the
financial information of its subsidiaries.
Finance Raising arrangements
Your Company has adequate financial tie-ups with different Nationalised
Banks and Financial Institutions for timely funding for property
development.
Consolidated Financial Statements
In Compliance with the Accounting Standard 21 and the Listing Agreement
entered into with the Bombay Stock exchange Limited and the National
Stock exchange of India Limited, this Annual REPORT includes the
consolidated Financial statements of D B Realty Ltd. and its
subsidiaries, Associates, and Joint Ventures for the financial year
2009-10.
Cash Flow Statement
In Conformity with the provisions of clause 32 of the Listing Agreement
with the Stock exchanges, the Cash Flow Statement for the year ended
31st March, 2010 is annexed hereto.
Directors
On 14th September, 2009, the Company has reconstituted its Board prior
to raising capital through IPo in conformity with Clause 49 of the
Listing Agreement and as a part thereof, Mr. Karunchandra Srivastava
and Mr. Chandan Bhattacharya, Independent Directors, were inducted in
the Board. Further, Mr. Karunchandra Srivastava, Independent Director,
was appointed as the Chairman of the Board of Directors of the Company,
in place of Mr. ViNod Goenka, being the Promoter Chairman. the Company
has also constituted various committees in compliance with Clause 49 of
the listing agreement and also a Finance Committee to carry out
functions mandated in terms of reference given to it.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company Mr. Mahesh Gandhi, Mr. Sundaram
Rajagopal, and Mr. Michael McCook are retiring by rotation at the
forthcoming Annual General Meeting and being eligible have offered for
their re-appointment as the Directors of the Company at the ensuing
Annual General Meeting.
Brief resume of the retiring Directors proposed to be re-appointed,
nature of their experience in their functional areas, name of the
companies in which they hold directorship and membership/chairmanship
of the Board Committee, as stipulated under Clause 49 of the Listing
Agreement with the stock exchanges forms the part of Notice.
Fixed deposits
The Company has Not accepted any deposits from the public within the
meaning of Section 58A of the Companies Act, 1956, during the year
under review.
Directors Responsibility Statement
In terms of provisions of Section 217(2AA) of the Companies Act, 1956,
your Directors confirm that:
a) In the preparation of the annual accounts for the year ended 31st
March, 2010, the applicable accounting standards had been followed
along with proper explanation relating to material departures, if any;
b) They had selected such accounting policies and applied them
consistently and made judgements and estimates THAT are rea- sonable
and prudent so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the Profit of
the Company for the year;
c) They had taken proper and suffcient care for the maintenance of
adequate accounting records in accordance with provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
d) They had prepared the annual accounts on a going concern basis.
MANAGEMENT DISCUSSION and ANALYSIS REPORT
MANAGEMENT DISCUSSION and ANALYSIS is given separately and forms part
of this annual REPORT.
Corporate Governance
Your Company firmly believes in and always practices good corporate
governance. Your Companys objective is to create value in the market
THAT can be sustained over the long-term for customers, shareholders,
employees, BUSINESS partners and society as a whole. It is believed by
the Company THAT success of a corporate refects the professionalism,
conduct and ethical values of its managements and employees.
The REPORT of Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of Annual REPORT. the Managing Directors
declaration regarding compliance of Code of BUSINESS Conduct and Ethics
for board members and senior MANAGEMENT personnel forms part of REPORT
on Corporate Governance.
The requisite certificate from Practising Company Secretary confirming
the compliance with the conditions of Corporate Governance as
stipulated under the aforesaid Clause 49 of the Listing Agreement is
annexed to this REPORT.
listing Fees
The equity Shares of the Company are listed at the Bombay Stock
exchange Limited (BSE) and the National Stock exchange of India Limited
(NSE). the Company has paid the applicable listing fees to the above
stock exchanges for the financial year 2010-11. the Company has entered
into necessary agreements with the Central Depository Services (India)
Limited (CDSL) and National Securities Depository Limited (NSDL) for
availing the Depository services.
AUDITORS
M/s. Deloitte Haskins & Sells, Chartered Accountants, the Statutory
AUDITORS of the Company, hold office upto the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment.
Internal Control Systems and their adequacy
The Management continuously reviews the internal control systems and
procedures for the efficient conduct of the Companys BUSINESS. the
Company adheres to the prescribed guidelines with respect to the
transactions, financial reporting and ensures THAT all its assets are
safeguarded and protected against losses. the Internal Auditor of the
Company conducts the audit on regular basis and the Audit committee
reviews internal audit reports and effectiveness of internal control
systems.
Internal Control Systems are implemented to safeguard the Companys
assets from loss or damage, to keep constant check on the cost
structure, to prevent revenue leakages, to provide adequate financial
and accounting controls and implement accounting standards.
Investors Relation and Grievances
Investors relations have been cordial during the year. As a part of
compliance, the Company has formed Shareholders and Investor
Grievances Committee to deal with the issues relating to investors.
there was 1 (one) investors grievances pending as on 31st March, 2010.
A confirmation to this effect has been received from the Companys
Registrar and Share transfer Agent.
Conservation of energy, Research and development, Technological
absorption, Foreign exchange earnings and Outgo
Your Company is Not covered by the schedule of industries which are
required to furnish the information required in Form A pursuant to
Section 217(1) (e) read with Rule 2 of the Companies (Disclosure of
Particulars in the REPORT of Board of Directors) Rules, 1988, the
Company has Not imported any technology or carried out any BUSINESS of
export or import and therefore the disclosure requirement against
technology absorption are Not applicable. the details of Foreign
exchange outgo are as under:
Value of imports of Capital Goods on c.i.f. basis for the year is Rs.
31, 07,476
Expenditure in Foreign Currency:
Particulars amount (Rs)
Professional Fees 92,77,917
Interest 16,33,25,375
Other Expences 1,13,19,392
Information regarding employees Relations/Particulars of employees
Information as per Section 217(2A) of the Companies Act, 1956, (the
Act) read with the Companies (Particulars of employees) Rules, 1975, as
amended from time to time forms part of this REPORT.
Relations between employees and the MANAGEMENT continued to be cordial
during the year.
Acknowledgement
Your Directors sincerely appreciate the high degree of professionalism,
commitment and dedication displayed by employees at all levels and wish
to convey their appreciation to the Banks, Financial Institutions,
Government Authorities, customers and other BUSINESS associates for
their excellent assistance and co-operation and wish to place on record
their gratitude to the shareholders and the investors for their trust,
support and confidence in the Company
Annexure to Directors REPORT for the year ended 31st March, 2010.
Statement pursuant to Section 217(2A) of the Companies Act, 1956 and
the Companies (Particulars of employees) Rules, 1975
Note: Remuneration includes Basic Salary, HRA, Allowances, Bonus,
ex-Gratia and Companys Contribution to PF, LtA and Medical
Reimbursement, perquisite for Car, Variable Pay, Commission but does
Not include Leave encashment and Companys Contribution to Gratuity
Fund.
The monetary value of perquisites is calculated in accordance with the
provisions of the Income- tax Act, 1961 and Rules made thereunder.
*Employed for part of the Year.
On Behalf of the Board of directors
S/d
CHAIRMAN
MUMBAI,
DAte: 28-07-2010