DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the Ninth Annual Report together with the audited statement of accounts of the Company for the financial year ended March 31, 2015. REVIEW OF OPERATIONS & BUSINESS UPDATE: Key Financial Highlights (Consolidated): • Total Revenues in FY '15 increased to Rs. 2,737 Crores as against the revenues of Rs. 1,800 Crores in FY '14. • Total Profit after Tax (PAT) in FY '15 increased to Rs. 273 Crores as against the PAT of Rs. 230 Crores in FY '14. • Earnings per share (EPS) in FY '15 increased to Rs. 5.84 as against the EPS of Rs. 5.28 in FY '14. Credit Rating: The Company's rating for long-term debt (Term loans and NCDs) has been upgraded to AA- (making it the highest rated company in the Indian real estate industry peer group), and for short term debt Company has retained A1+ (A One Plus) rating for its short-term debt, which is the highest rating that can be assigned for short-term debt. With this the Company enjoys ease and most favorable terms on the loans/facilities being availed from the Banks/Financial Institutions. The ratings are the manifestation of the Company's strong fundamentals, low gearing and execution track record and mirror its long term growth prospects. Land Bank: • As on 31st March 2015, total Land Bank is 1,017 acres, which is sufficient for proposed development over the next 7 years. In addition, the Company also possesses 2,588 acres of SEZ land in Nashik, Maharashtra, for which the Company has received the Environment Clearance from the Ministry of Environment, Forest and Climate Change. • More than 95% of the Land Bank is in high value super-metro cities - Mumbai Metro Region, National Capital Region (Delhi) and Chennai. Project development: In addition to the land bank of 1,017 acres and 2,588 acres of SEZ land in Nashik, the Company's ongoing projects have total estimated saleable area of 30.14 million sqft with gross development value of Rs. 22,803 Cr. Each project bears a stamp of thoughtful solutions and highest quality and an optimum mix of different categories and is a testimony of Company's diversified portfolio of super premium category, premium category & mid income category. Ongoing major projects are: • BLU, Worli, Mumbai - which has a total saleable area of 1.17 million sqft with gross development value of Rs. 6335 Cr. • Indiabulls Golf City, Savroli, MMR - which has a total saleable area of 5.22 million sqft with gross development value of Rs. 3139 Cr. • Indiabulls Greens, Panvel, MMR - which has a total saleable area of 8.66 million sqft with gross development value of Rs. 4446 Cr. • Indiabulls Greens, Chennai - which has a total saleable area of 2.07 million sqft with gross development value of Rs. 831 Cr. • Centrum Park, Gurgaon - which has a total saleable area of 2.16 million sqft with gross development value of Rs. 915 Cr. • Enigma, Gurgaon - which has a total saleable area of 1.76 million sqft with gross development value of Rs. 1124 Cr. • Indiabulls City, Sonepat, Haryana - which has a total saleable area of 1.76 million sqft with gross development value of Rs. 242 Cr. • One Indiabulls, Gurgaon - which has a total saleable area of 6.15 million sqft with gross development value of Rs. 4918 Cr. • Mega Mall, Vadodara - which has a total saleable area of 0.23 million sqft with gross development value of Rs. 85 Cr. • Indiabulls One 09, Gurgaon - which has total saleable area of 0.96 million sqft with gross development value of Rs. 768 Cr. New launches/ proposed launches The projects, including the following, with total estimated saleable area of 7.87 million sqft with gross development value of Rs. 12,157 Cr are launched / proposed to be launched : • Indiabulls Mint, Sector 104, Gurgaon - a commercial project located in Sector 104, Gurgaon on Dwarka Manesar expressway with net development area of 2.12 acres with estimated gross development value of approx. Rs. 310 Cr. • Indiabulls Imperial, Sector 106, Gurgaon - a mixed development of luxury residential and commercial project located in Sector 106, Gurgaon on Dwarka Manesar expressway with net development area of 35.2 acres with estimated gross development value of approx. Rs. 5,933 Cr. • Silverlake villas, Alibaug - a unique lifestyle project spread over 7 acres at Alibaug, MMR with estimated gross development value of approx. Rs. 164 Cr. • 22 Hanover Square, London, a unique luxury & residential project with total saleable area of 0.10 million sqft with gross development value of approx. Rs. 5,200 Cr. DIVIDEND In view of the requirements of funds for ongoing projects of the Company, the Board of Directors of the Company has not recommended any dividend for financial year 2014-15. DIRECTORS & KEY MANAGERIAL PERSONNEL To achieve the highest standards of Corporate Governance in its management, and to introduce a true sense of 6 professionalism in the Board of the Company, during the financial year, the Board of Directors of the Company (Board) was re-constituted with induction/appointments of Justice Bisheshwar Prasad Singh (Retd. Justice Supreme Court of India), Justice Surinder Singh Nijjar (Retd. Justice Supreme Court of India), Mrs. Rama Das (Ex-member, CAT), as Independent Directors of the Company, and the appointment of Mr. Vinesh Kumar Jairath (Ex-IAS Officer) and Mr. Gurbans Singh (Ex-IRS Officer) as Joint Managing Directors and Mr. Ashok Kacker (Ex-IRS Officer), as Non-Executive Director of the Company. Further, during the Financial Year, Mr. Karan Singh Khera and Mr. Prem Prakash Mirdha, Independent Directors, had resigned. The Board has placed on record its appreciation for the contributions made by these directors, during their respective tenures of office. All the present Independent Directors of the Company have given declaration that they meet the criteria of independence laid down under Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. In accordance with the provisions of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, Mr. Ashok Kacker (DIN: 01647408) and Mr. Gurbans Singh (DIN: 06667127), Directors of the Company, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible offer themselves for reappointment. Further, Mr. Vishal Damani (DIN: 00358082) was appointed by the Board of Directors as an Additional Director designated as Joint Managing Director and Key Managerial Personnel of the Company for a period of 5 years with effect from August 27, 2015, without any remuneration. The appointment of Mr. Vishal Damani as Joint Managing Director is in compliance with the applicable provisions of the Companies Act, 2013 and requires the approval of the shareholders at ensuing Annual General meeting. The Board recommends appointment/ re-appointment of aforesaid Directors. The present composition of the Board along with the brief resume of the Directors proposed to be appointed / reappointed, nature of their expertise in specific functional areas and names of companies in which they hold directorships and memberships / chairmanships of Board Committees, are provided in the Report on Corporate Governance forming part of this Annual Report. During the year under review, Mr. Anil Mittal was appointed as CFO - a key managerial person of the Company, in accordance with the provision of the Companies Act, 2013, with effect from April 23, 2014. SHARE CAPITAL / ESOPs The paid-up share capital of the Company as on March 31, 2015, was Rs. 84,99,55,478/- comprising of 42,49,77,739 equity shares of Rs. 2/- each. Subsequently, on July 22, 2015, pursuant to and in terms of shareholders authorization and applicable SEBI Regulations, the Company has issued and allotted an aggregate of 3,67,00,000 equity shares of face value of Rs. 2 each of the Company at the issue price of Rs. 67 per equity share and an aggregate of 4,36,00,000 Warrants, convertible into equivalent number of equity shares of face value of Rs. 2 each of the Company at an exercise price of Rs.67 per equity share to the Promoter Group entities. Consequent to the said allotment, the paid-up share capital of the Company stands increased to Rs. 92,33,55,478/- divided into 46,16,77,739 Equity shares of face value Rs. 2/- each. During the current financial year, consequent to the surrender of 1.05 crore options granted by the Company, during the year under review under its 'Indiabulls Real Estate Limited Employees Stock Options Plan 2010', the Company has re-granted 1,05,00,000 stock options to certain of its eligible employees at an exercise price of Rs. 54.50, being the latest available closing market price on NSE on June 25, 2015. The disclosures required to be made under Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, in respect of all existing ESOP Schemes of the Company are set out in the Annexure to this Report. PUBLIC DEPOSITS During the year under review, the Company has not accepted any deposits from the public, falling within the ambit of Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. LISTING WITH STOCK EXCHANGES The Equity Shares (ISIN No.: INE 069 I01010) of the Company, continue to remain listed at BSE Limited and National Stock Exchange of India Limited. The listing fees payable to both the exchanges for the financial year 2015-16 have been paid. The GDRs issued by the Company continue to remain listed on Luxembourg Stock Exchange. AUDITORS (a) Statutory Auditors M/s Walker Chandiok & Co. LLP (Firm Regn. No. 001076N), the statutory auditors of the Company were appointed by the members in their Eighth Annual General Meeting, held on 29th September 2014, for a period of five years. i.e. until the conclusion of the thirteenth Annual General Meeting of the Company. The Company has received a certificate from the Auditors to the effect that, their continuation as such from the conclusion of this Annual General Meeting until the conclusion of tenth annual general meeting is in accordance with the provisions of the Section 141(3)(g) of the Companies Act, 2013. The Board recommends the ratification of the appointment of M/s Walker Chandiok & Co. LLP, as statutory auditors of the Company till the conclusion of tenth annual general meeting of the Company. The Auditors' Report is self - explanatory and therefore do not call for any further explanation. (b) Secretarial Auditors & Secretarial Audit Report Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the rules made thereunder, the Company has appointed M/s S. Khandelwal & Co., a firm of Company Secretaries in practice as its Secretarial Auditors, to conduct the secretarial audit of the Company, for the Financial Year 2014-15. The Company has provided all assistance, facilities, documents, records and clarifications etc. to the Secretarial Auditors for conducting their audit. The Report of Secretarial Auditors for the Financial Year 2014-15, is annexed as Annexure 1 and forming part of this Report. The Report is self - explanatory and therefore do not call for any further explanation. CORPORATE SOCIAL RESPONSIBILITY As part of its initiatives under "Corporate Social Responsibility (CSR)", the Company has undertaken projects in the areas of Health, Education, Sanitation, Nutrition and Rural Development, as per its CSR Policy (available on your Company's website <http://www.realestate.indiabulls.com/>) and the details are contained in the Annual Report on CSR Activities given in Annexure 2, forming part of this Report. These projects are in accordance with Schedule VII of the Companies Act, 2013, read with the relevant Rules. MANAGEMENT DISCUSSION AND ANALYSIS REPORT Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management's Discussion and Analysis Report, for the year under review, is presented in a separate section forming part of this Annual Report. CORPORATE GOVERNANCE REPORT Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance Practices followed by the Company, together with a certificate from a practicing Company Secretary confirming compliance, is presented in a separate section forming part of this Annual Report. DIRECTORS' RESPONSIBILITY STATEMENT To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company, as at March 31, 2015 and the profit and loss of the company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that such financial controls were adequate and were operating effectively; and f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively. INFORMATION PURSUANT TO SECTION 134 AND SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH THE RELEVANT RULES AND LISTING AGREEMENT The information required to be disclosed pursuant to Section 134 and Section 197 of the Companies Act, 2013, read with the relevant rules (to the extent applicable) and Listing Agreement, not elsewhere mentioned in this Report, are given in Annexure A forming part of this Report. GREEN INITIATIVES Electronic copies of the Annual Report 2015 and Notice of the 9th AGM will be sent to all the members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2015 and Notice of the 9th AGM will be sent in the permitted mode. The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice of the 9th AGM. This is pursuant to section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014, as substituted by Companies (Management and Administration) Amendment Rules, 2015, and Clause 35B of the Listing Agreement. The instructions for e-voting are provided in the AGM Notice. ACKNOWLEDGEMENT Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functional areas and the efficient utilization of all its resources for sustainable and profitable growth. Your Directors wish to place on record their appreciation of the contributions made and committed services rendered by the employees of the Company at various levels. Your Directors also wish to express their gratitude for the continuous assistance and support received from the investors, clients, bankers, regulatory and government authorities, during the year. For and on behalf of the Board of Directors Sd/- Sameer Gehlaut Chairman (DIN: 00060783) Place: Mumbai Date: August 27, 2015 |