GREENACRE HOLDINGS LIMITED 28 REPORT OF THE BOARD OF DIRECTORS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2016 1. Your Directors submit their Report for the financial year ended 31st March, 2016. 2. PERFORMANCE OF THE COMPANY During the year, your Company earned revenue of ` 255.55 lakhs from its operations, with Total Revenue being ` 487.33 lakhs. The Company continues to manage and provide maintenance services for buildings. The Company is also exploring opportunities to grow the business further. The financial results of your Company, summarised, are as under: For the year ended For the year ended 31st March, 2016 31st March, 2015 (`) (`) a. Profit Before Tax 2,53,20,799 1,33,37,353 b. Less : Tax Expense 82,35,790 29,78,177 c. Profit After Tax 1,70,85,009 1,03,59,176 d. Add : Profit brought forward from previous years 13,11,09,147 12,07,56,263 e. Less : Adjustment pursuant to the Scheme of Amalgamation [Refer Note 21(vi) to the Financial Statements] 7,99,16,998 – f. Less : Depreciation on transition to Schedule II of the Companies Act, 2013 on Tangible Fixed Assets – 6,292 g. Balance carried forward 6,82,77,158 13,11,09,147 3. DIRECTORS AND KEY MANAGERIAL PERSONNEL (a) Changes in Directors and Key Managerial Personnel during the year During the year under review, Mr. A. Nayak stepped down as Non-Executive Director of your Company with effect from close of work on 31st December, 2015. Your Directors place on record their appreciation for the valuable contribution made by Mr. Nayak during his tenure. The Board of Directors of your Company (‘the Board’), on the recommendation of the Nomination and Remuneration Committee, appointed Mr. R. K. Singhi (DIN: 00009931) as Additional Director of the Company with effect from 9th March, 2016. In accordance with Section 161 of the Companies Act, 2013 (‘the Act’) and Article 130 of the Articles of Association of the Company, Mr. Singhi will vacate office at the ensuing Annual General Meeting (‘AGM’) and is eligible for appointment as a Director of the Company. Your Board at the meeting held on 2nd May, 2016, on the recommendation of the Nomination and Remuneration Committee, recommended for the approval of the Members, the appointment of Mr. Singhi as a Director of your Company, liable to retire by rotation. Notice under Section 160 of the Act has been received by the Company for appointment of Mr. Singhi, who has also filed his consent to act as Director of your Company, if appointed. Appropriate resolution seeking your approval to Mr. Singhi’s appointment is appearing in the Notice convening the ensuing AGM of the Company. Mr. Ravi Varma resigned as the Manager and Company Secretary of the Company with effect from close of work on 12th May, 2015. The Board, on the recommendation of the Nomination and Remuneration Committee, appointed Md. Jamshed Alam as the Manager of the Company from 1st September, 2015, in terms of the provisions of Sections 196 and 203 of the Act, subject to the approval of the Members of the Company. Appropriate resolution seeking your approval to Md. Alam’s appointment as Manager is appearing in the Notice convening the ensuing AGM of the Company. Md. Alam was also appointed as the Company Secretary of the Company with effect from the said date. (b) Retirement by rotation In accordance with the provisions of Section 152(6) of the Act, Mr. R. Tandon (DIN: 00042227), Director, will retire by rotation at the ensuing AGM of the Company and, being eligible, offers himself for re-election. Your Board has recommended his re-election. (c) Declaration of Independence by Independent Directors The Independent Directors of your Company have confirmed that they meet the criteria of Independence as prescribed under Section 149(6) of the Act read with Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014. (d) Attributes, qualifications and appointment of Directors As reported last year, the attributes and qualifications of the Independent Directors as provided in Section 149(6) of the Act and Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014 were adopted by the Nomination and Remuneration Committee. The said attributes and qualifications, as applicable, were also adopted in respect of the other Directors. The Directors of the Company, other than the Independent Directors, are executives of ITC Limited, the ultimate Holding Company, and fulfil the fit and proper criteria for appointment as Directors. Further, the Directors of the Company, other than the Independent Directors, are liable to retire by rotation and one-third of them retire every year and are eligible for re-election. (e) Board evaluation The Board carried out annual performance evaluation of its own performance and that of the individual Directors as also functioning of the Board Committees, as required under Section 134(3)(p) of the Act. The performance evaluation of the Board and individual Directors, as in the previous year, was based on criteria approved by the Nomination and Remuneration Committee. Reports of functioning of Board Committees were placed by the respective Committee Chairman before the Board. (f) Remuneration Policy The Remuneration Policy of the Company for the Directors, Key Managerial Personnel and other employees, as approved by the Board, is enclosed as Annexure 1 to this Report. 4. BOARD AND BOARD COMMITTEES The two Board Committees of the Company and their composition is as follows: Audit Committee Nomination and Remuneration Committee Mr. R. Tandon (Chairman) Mr. R. K. Singhi (Chairman) Mr. S. Banerjee Mr. S. Banerjee Ms. A. Guhamallick Ms. A. Guhamallick Mr. R. Tandon During the year ended 31st March, 2016, the following meetings of the Board and Board Committees were held: Board / Board Committee Number of meetings Date(s) of meeting(s) Board 5 28th April, 2015 16th July, 2015 25th August, 2015 14th December, 2015 8th March, 2016 Audit Committee 4 28th April, 2015 16th July, 2015 25th August, 2015 8th March, 2016 Nomination and 28th April, 2015 Remuneration Committee 3 25th August, 2015 8th March, 2016 The attendance of Directors of the Company at the Board and Board Committee meetings held during the year is given below: Sl. Name of the Director Number of meetings attended No. Board Audit Committee Nomination and Remuneration Committee 1. Mr. R. Tandon 5 4 3 2. Mr. S. Banerjee 4 3 3 3. Mr. Saradindu Dutta 4 N.A. N.A. 4. Ms. A. Guhamallick 5 4 3 5. Mr. A. Nayak * 3 N.A. 2 6. Mr. R. K. Singhi # N.A. N.A. N.A. * Ceased to be Director with effect from close of work on 31st December, 2015. # Appointed Director and Member & Chairman of the Nomination and Remuneration Committee with effect from 9th March, 2016. 5. DIRECTORS’ RESPONSIBILITY STATEMENT As required under Section 134(5) of the Act, your Directors confirm having: i) followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures, if any; ii) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; iii) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv) prepared the Annual Accounts on a going concern basis; and v) devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. 6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES During the year, the Company acquired the balance equity share capital of Classic Infrastructure & Development Limited (CIDL) comprising 1,11,00,020 equity shares of ` 10/- each (equivalent to 87.06% of CIDL’s paid-up capital), at fair value of ` 1,137.75 lakhs based on independent valuation. Consequently, CIDL became a wholly owned subsidiary of the Company with effect from 7th December, 2015. Presently, the Company does not have any subsidiary, associate or joint venture. 7. AMALGAMATION OF CLASSIC INFRASTRUCTURE & DEVELOPMENT LIMITED With a view to enable appropriate consolidation of the undertaking of companies and better and more efficient utilisation of the available resources of CIDL in the business of the Company, the Board proposed a Scheme of Amalgamation of CIDL with the Company under Sections 391 and 394 of the Companies Act, 1956. The said Scheme of Amalgamation was sanctioned by the Hon’ble High Court at Calcutta on 17th March, 2016 and upon completion of requisite formalities, such amalgamation became operative from 1st October, 2015. 8. PARTICULARS OF EMPLOYEES None of the employees of the Company is drawing remuneration exceeding that specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. 9. RISK MANAGEMENT The Company’s risk management framework, designed to bring robustness to the risk management processes in the Company, addresses risks intrinsic to operations, financials and compliances arising out of the overall strategy of the Company. Management of risks vests with the executive management which is responsible for the day-to-day conduct of the affairs of the Company. The Internal Audit Department of ITC Limited periodically carries out, at the request of the Company, risk focused audits with the objective of identifying areas where risk management processes could be strengthened. Annual update is provided to the Audit Committee on the effectiveness of the Company’s risk management systems and policies. 10. INTERNAL FINANCIAL CONTROLS Your Company has in place adequate internal financial controls with respect to the financial statements, commensurate with its size and scale of operations. The Internal Audit Department of ITC Limited periodically evaluates the adequacy and effectiveness of such internal financial controls. The Audit Committee which provides guidance on internal controls, also reviews internal audit findings and implementation of internal audit recommendations, if any. During the year, the internal financial controls in the Company with respect to the financial statements were tested and no material weakness in the design or operation of such controls was observed. Nonetheless your Company recognises that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis. 11. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS During the year ended 31st March, 2016, the Company has not given any loan or guarantee under Section 186 of the Act. The Company purchased 1,11,00,020 equity shares of ` 10/- each of CIDL at an aggregate consideration of ` 1,137.75 lakhs. 12. RELATED PARTY TRANSACTIONS The details of related party transactions of the Company in the prescribed Form No. AOC-2 are enclosed under Annexure 2 to this Report. 13. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS During the year under review, no significant or material orders were passed by the Regulators / Courts / Tribunals impacting the going concern status of the Company and its future operations. 14. EXTRACT OF ANNUAL RETURN The extract of Annual Return in the prescribed Form No. MGT-9 is enclosed as Annexure 3 to this Report. 15. AUDITORS The Company’s Auditors, Messrs. A. F. Ferguson & Co., Chartered Accountants (‘AFF’), were appointed with your approval at the Twenty-Eighth AGM to hold such office till the conclusion of the Thirty-Third AGM. Your Board, in terms of Section 139 of the Act, has recommended for the ratification of the Members the appointment of AFF from the conclusion of the ensuing AGM till the conclusion of the Thirty-First AGM. The Board, in terms of Section 142 of the Act, has also recommended for the approval of the Members the remuneration of AFF for the financial year 2016-17. Appropriate resolution in respect of the above is appearing in the Notice convening the ensuing AGM of the Company. 16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO Considering the nature of business of your Company, no comment is required on conservation of energy and technology absorption. There has been no foreign exchange earnings or outflow during the year under review. Dated : 2nd May, 2016 On behalf of the Board R. Tandon Chairman Saradindu Dutta Director
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GREENACRE HOLDINGS LIMITED
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REPORT OF THE BOARD OF DIRECTORS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 20161. YourDirectorssubmittheirReportforthefinancialyearended31stMarch,2016.2. PERFORMANCE OF THE COMPANY During the year, your Company earned revenue of ` 255.55 lakhs from its operations, with
3. DIRECTORS AND KEY MANAGERIAL PERSONNEL(a) Changes in Directors and Key Managerial Personnel during the year Duringtheyearunderreview,Mr.A.NayaksteppeddownasNon-ExecutiveDirectorofyour
The Board of Directors of your Company (‘the Board’), on the recommendation of theNomination and Remuneration Committee, appointedMr. R. K. Singhi (DIN: 00009931) asAdditional Director of the Companywith effect from 9thMarch, 2016. In accordancewithSection161oftheCompaniesAct,2013(‘theAct’)andArticle130oftheArticlesofAssociationoftheCompany,Mr.SinghiwillvacateofficeattheensuingAnnualGeneralMeeting(‘AGM’)andiseligibleforappointmentasaDirectoroftheCompany.YourBoardatthemeetingheldon2ndMay,2016,ontherecommendationoftheNominationandRemunerationCommittee,recommendedfortheapprovaloftheMembers,theappointmentofMr.SinghiasaDirectorofyourCompany,liabletoretirebyrotation.NoticeunderSection160oftheActhasbeenreceivedbytheCompanyforappointmentofMr.Singhi,whohasalsofiledhisconsenttoactasDirectorof yourCompany, if appointed.Appropriate resolution seekingyourapproval toMr.Singhi’sappointmentisappearingintheNoticeconveningtheensuingAGMoftheCompany.
The Directors of the Company, other than the Independent Directors, are executives ofITCLimited,theultimateHoldingCompany,andfulfilthefitandpropercriteriaforappointmentasDirectors.Further,theDirectorsoftheCompany,otherthantheIndependentDirectors,areliabletoretirebyrotationandone-thirdofthemretireeveryyearandareeligibleforre-election.
(e) Board evaluation The Board carried out annual performance evaluation of its own performance and that of
the individual Directors as also functioning of the Board Committees, as required underSection134(3)(p)oftheAct.TheperformanceevaluationoftheBoardandindividualDirectors,asinthepreviousyear,wasbasedoncriteriaapprovedbytheNominationandRemunerationCommittee. Reports of functioning of Board Committees were placed by the respectiveCommitteeChairmanbeforetheBoard.
* Ceased to be Director with effect from close of work on 31st December, 2015.# Appointed Director and Member & Chairman of the Nomination and Remuneration Committee with effect
from 9th March, 2016.5. DIRECTORS’ RESPONSIBILITY STATEMENT
iii) taken proper and sufficient care for the maintenance of adequate accounting records inaccordancewiththeprovisionsoftheActforsafeguardingtheassetsoftheCompanyandforpreventinganddetectingfraudandotherirregularities;
suchsystemsareadequateandoperatingeffectively.6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES During the year, the Company acquired the balance equity share capital of Classic Infrastructure
& Development Limited (CIDL) comprising 1,11,00,020 equity shares of ` 10/- each (equivalentto 87.06% of CIDL’s paid-up capital), at fair value of ` 1,137.75 lakhs based on independentvaluation.Consequently,CIDLbecameawhollyownedsubsidiaryoftheCompanywitheffectfrom7thDecember,2015.
Presently,theCompanydoesnothaveanysubsidiary,associateorjointventure.7. AMALGAMATION OF CLASSIC INFRASTRUCTURE & DEVELOPMENT LIMITED With a view to enable appropriate consolidation of the undertaking of companies and better and
The said Scheme of Amalgamation was sanctioned by the Hon’ble High Court at Calcutta on17thMarch,2016anduponcompletionofrequisiteformalities,suchamalgamationbecameoperativefrom1stOctober,2015.
8. PARTICULARS OF EMPLOYEES NoneoftheemployeesoftheCompanyisdrawingremunerationexceedingthatspecifiedinRule5(2)
Managementof risksvestswiththeexecutivemanagementwhich is responsible for theday-to-dayconduct of the affairs of theCompany. The Internal AuditDepartment of ITC Limited periodicallycarriesout,attherequestoftheCompany,riskfocusedauditswiththeobjectiveofidentifyingareaswhere riskmanagementprocesses couldbe strengthened.Annual update is provided to theAuditCommitteeontheeffectivenessoftheCompany’sriskmanagementsystemsandpolicies.
commensuratewith its size and scaleofoperations. The InternalAuditDepartmentof ITCLimitedperiodically evaluates the adequacy and effectiveness of such internal financial controls. The AuditCommitteewhich provides guidance on internal controls, also reviews internal audit findings andimplementationofinternalauditrecommendations,ifany.
Duringtheyear,theinternalfinancialcontrolsintheCompanywithrespecttothefinancialstatementswere tested and nomaterial weakness in the design or operation of such controls was observed.NonethelessyourCompanyrecognisesthatanyinternalfinancialcontrolframework,nomatterhowwelldesigned,hasinherentlimitationsandaccordingly,regularauditandreviewprocessesensurethatsuchsystemsarereinforcedonanongoingbasis.
11. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Duringtheyearended31stMarch,2016,theCompanyhasnotgivenanyloanorguaranteeunder
12. RELATED PARTY TRANSACTIONS The details of related party transactions of the Company in the prescribed Form No. AOC-2 are
enclosedunderAnnexure 2 to this Report. 13. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS Duringtheyearunderreview,nosignificantormaterialorderswerepassedbytheRegulators/Courts
/TribunalsimpactingthegoingconcernstatusoftheCompanyanditsfutureoperations.14. EXTRACT OF ANNUAL RETURN TheextractofAnnualReturnintheprescribedFormNo.MGT-9isenclosedasAnnexure 3 to this Report. 15. AUDITORS TheCompany’sAuditors,Messrs.A.F.Ferguson&Co.,CharteredAccountants(‘AFF’),wereappointed
oftheMemberstheappointmentofAFFfromtheconclusionoftheensuingAGMtilltheconclusionof theThirty-FirstAGM.TheBoard, in termsofSection142of theAct,hasalso recommended forthe approvalof theMembers the remunerationofAFF for thefinancial year2016-17.Appropriateresolution in respect of the above is appearing in theNotice convening the ensuing AGM of theCompany.
16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Considering thenature of business of yourCompany, no comment is requiredon conservationofenergyandtechnologyabsorption.
Annexure 1 to the Report of the Board of Directors for the financial year ended 31st March, 2016Remuneration Policy
(Aligned to the Remuneration Policy of ITC Limited, the ultimate Holding Company)TheCompany’sRemunerationStrategyisdesignedtoattractandretainqualitytalentthatgivesitsbusinessacompetitiveadvantageandenablestheCompanytoachieveitsobjectives.TheCompany’sRemunerationStrategy,whilstfocusingonremunerationandrelatedaspectsofperformancemanagement,isalignedwithandreinforcestheemployeevaluepropositionofasuperiorqualityofworklife,thatincludesanenablingworkenvironment,anempoweringandengagingworkcultureandopportunitiestolearnandgrow.TheCompensationapproachendeavourstoaligneachemployeewiththeCompany’sgoals.POLICYItistheCompany’sPolicy:1. ToensurethatitsRemunerationpracticessupportandencouragemeritocracy.2. ToensurethatRemunerationismarket-ledandtakesintoaccountthecompetitivecontextoftheCompany’sbusiness.3. ToleverageRemunerationasaneffectiveinstrumenttoenhanceperformanceandthereforetolinktheremunerationtobothindividualandcollectiveperformance
regulatoryrequirements.Remuneration of Key Managerial Personnel (KMP)1. RemunerationofKMPisdeterminedandrecommendedbytheNominationandRemunerationCommitteeandapprovedbytheBoard.Remunerationofthe
ManagingDirector/WholetimeDirector/Managerisalsosubjecttotheapprovaloftheshareholders.2. Remunerationisreviewedandrevisedperiodically,whensucharevisioniswarrantedbythemarket.3. Apart fromfixedelementsof remuneration andbenefits, theKMPare also eligible forVariable Pay / PerformanceBonuswhich is linked to their individual
theRemunerationPolicyofthatcompany.Remuneration of Independent Directors IndependentDirectorsareentitledtosittingfeesforattendingmeetingsoftheBoardandBoardCommittees,thequantumofwhichisdeterminedbytheBoardwithinthelimitsprescribedundertheCompaniesAct,2013andtheRulesthereunder.IndependentDirectorsarealsoentitledtoreimbursementofexpensesforattendingmeetingsoftheBoardandBoardCommitteesandGeneralMeetings.Remuneration of employees other than KMP1. RemunerationofemployeesotherthanKMPisapprovedbytheBoard.2. Remunerationisreviewedandrevisedperiodically,whensucharevisioniswarrantedbythemarket.Thequantumofrevisionis linkedtomarkettrends,the
Annexure 2 to the Report of the Board of Directors for the financial year ended 31st March, 2016FORM NO. AOC-2
[Pursuant to Section 134(3)(h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014] Form for disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub-section (1)
of Section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis
a) Name(s)oftherelatedpartyandnatureofrelationship ITCLimited(ITC),theultimateHoldingCompany
b) Natureofcontracts/arrangements/transactions Saleofland
c) Durationofthecontracts/arrangements/transactions N.A.
Tooptimisebenefitwithinthegroup.ThereisnopotentialconflictwiththeinterestsoftheCompanyanditsshareholdersarising out of such transaction, since the same is between the ultimate HoldingCompanyandwhollyownedsubsidiary.
f) Date(s)ofapprovalbytheBoard 16thJuly,2015
g) Amountpaidasadvances,ifany Nil
h) Date on which the special resolution was passed ingeneral meeting as required under first proviso toSection188
N.A.
2. Details of material contracts or arrangements or transactions at arm’s length basis
a) Name(s)oftherelatedparty ITCLimited(ITC),theultimateHoldingCompany RussellCreditLimited,theHoldingCompany andnatureofrelationship
b) Natureofcontracts/arrangements/ MaintenanceofITCCentre,Kolkataandother Purchaseof37,50,000equitysharesof transactions propertiesownedbyITC ClassicInfrastructure&DevelopmentLimited
c) Durationofthecontracts/arrangements MaintenanceofITCCentre– N.A. /transactions 1stAugust,2015to31stJuly,2016 Maintenanceofotherproperties– 1stApril,2015to31stMarch,2016
(iii) Change in Promoters’ Shareholding (please specify, if there is no change):
Sl. No. Shareholding at the beginning of the year Cumulative Shareholding during the year
No. of Shares % of total Shares No. of Shares % of total Shares of the Company of the Company
Atthebeginningoftheyear
DatewiseIncrease/Decreasein No change during the year PromotersShareholdingduringtheyear
Attheendoftheyear
(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): NOTAPPLICABLE
(v) Shareholding of Directors and Key Managerial Personnel: NoneoftheDirectorsandKeyManagerialPersonnelholdanyshareinthe Companyintheirindividualcapacity.
V. INDEBTEDNESS Indebtedness of the Company including interest outstanding / accrued but not due for payment :NIL
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Wholetime Directors and / or Manager:
(Amountin`)
Sl. No. Particulars of Remuneration Md. J. Alam (Manager & Company Secretary) (refer Note 1)
Total Amount (A) 4,32,133 CeilingaspertheCompaniesAct,2013 42,00,000perannum (refer Note 2)
Note 1: Md. J. Alam has been appointed as the Manager and Company Secretary of the Company with effect from 1st September, 2015. Note2:CeilingasperPartIIofScheduleVtotheCompaniesAct,2013hasbeendisclosed,consideringthattheprofitsoftheCompanyforthefinancialyear
ended 31st March, 2016 are inadequate.
GREENACRE HOLDINGS LIMITED
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B. Remuneration to other Directors: (Amountin`)
Sl. No. Name of the Directors Particulars of Remuneration Total Amount
Note:CeilingasperPartIIofScheduleVtotheCompaniesAct,2013hasbeendisclosed,consideringthattheprofitsoftheCompanyforthefinancialyearended31st March, 2016 are inadequate.
C. Remuneration to Key Managerial Personnel other than MD / Manager / WTD: (Amountin`)
Sl. No. Particulars of Remuneration M. Seth (Chief Financial Officer) (refer Note)
Note: Mr. M. Seth is on deputation from ITC Limited.
VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES against the Company, Directors and other Officers in Default under the Companies Act, 2013 :None
Dated:2ndMay,2016 OnbehalfoftheBoard
R.TandonChairman SaradinduDuttaDirector
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF GREENACRE HOLDINGS LIMITED
Report on the Financial Statements WehaveauditedtheaccompanyingfinancialstatementsofGREENACREHOLDINGSLIMITED(“theCompany”),whichcomprisetheBalanceSheetasat31stMarch,2016,theStatementofProfitandLossandtheCashFlowStatementfortheyearthenended,andasummaryofthesignificantaccountingpoliciesandotherexplanatoryinformation.
Management’s Responsibility for the Financial Statements TheCompany’sBoardofDirectors is responsible for thematters stated inSection134(5)oftheCompaniesAct,2013(“theAct”)withrespecttothepreparationofthesefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformanceandcashflowsoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedin India, includingtheAccountingStandardsprescribedunderSection133of theAct,asapplicable.
ThisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingtheassetsoftheCompanyandforpreventingand detecting frauds and other irregularities; selection and application of appropriateaccountingpolicies;makingjudgmentsandestimatesthatarereasonableandprudent;anddesign,implementationandmaintenanceofadequateinternalfinancialcontrols,thatwereoperatingeffectivelyforensuringtheaccuracyandcompletenessoftheaccountingrecords,relevanttothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.
Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsand the disclosures in the financial statements. Theprocedures selecteddependon theauditor’s judgment, including theassessmentof the risksofmaterialmisstatementof thefinancialstatements,whetherdueto fraudorerror. Inmakingthoseriskassessments, theauditor considers internal financial control relevant to the Company’s preparation of thefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances.AnauditalsoincludesevaluatingtheappropriatenessoftheaccountingpoliciesusedandthereasonablenessoftheaccountingestimatesmadebytheCompany’sDirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopiniononthefinancialstatements.
Opinion Inouropinionandtothebestofourinformationandaccordingtotheexplanationsgivento us, the aforesaid financial statements give the information required by the Act in themannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheCompanyasat31stMarch,2016,anditsprofitanditscashflowsfortheyearendedonthatdate.
Report on Other Legal and Regulatory Requirements 1. AsrequiredbySection143(3)oftheAct,wereportthat:
(d) In our opinion, the aforesaid financial statements complywith theAccountingStandardsprescribedunderSection133oftheAct,asapplicable.
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GREENACRE HOLDINGS LIMITED
(e) Onthebasisofthewrittenrepresentationsreceivedfromthedirectorsason31stMarch,2016 taken on record by the Board of Directors, none of thedirectors is disqualified as on31stMarch,2016 frombeingappointedasadirectorintermsofSection164(2)oftheAct.
(f) With respect to the adequacy of the internal financial controls over financialreportingoftheCompanyandtheoperatingeffectivenessofsuchcontrols,referto our separate Report in “Annexure A”. Our report expresses an unmodifiedopinionontheadequacyandoperatingeffectivenessoftheCompany’sinternalfinancialcontrolsoverfinancialreporting.
(g) With respect to the other matters to be included in the Auditor’s Report inaccordancewithRule11oftheCompanies(AuditandAuditors)Rules,2014,inouropinionandtothebestofourinformationandaccordingtotheexplanationsgiventous:
i. TheCompanyhasdisclosedtheimpactofpendinglitigationsonitsfinancialpositioninitsfinancialstatementsinaccordancewiththegenerallyaccepted
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
We have audited the internal financial controls over financial reporting of GREENACREHOLDINGSLIMITED(“theCompany”)asofMarch31,2016inconjunctionwithourauditofthestandalonefinancialstatementsoftheCompanyfortheyearendedonthatdate.
Management’s Responsibility for Internal Financial Controls
TheCompany’smanagementisresponsibleforestablishingandmaintaininginternalfinancialcontrols based on the internal control over financial reporting criteria established by theCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.Theseresponsibilitiesincludethedesign,implementationandmaintenanceofadequateinternalfinancialcontrolsthatwereoperatingeffectivelyforensuringtheorderlyandefficientconductofitsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,thepreventionanddetectionoffraudsanderrors,theaccuracyandcompletenessoftheaccountingrecords,andthetimelypreparationofreliablefinancialinformation,asrequiredundertheCompaniesAct,2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controlsoverfinancial reportingbasedonour audit.Weconductedour audit in accordancewiththeGuidanceNote on Audit of Internal Financial ControlsOver Financial Reporting (the“Guidance Note”) issued by the Institute of Chartered Accountants of India and theStandardsonAuditingprescribedunderSection143(10)of theCompaniesAct,2013, tothe extent applicable to an audit of internal financial controls. Those Standards and theGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequateinternalfinancialcontrolsoverfinancialreportingwasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.
Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaininganunderstandingofinternalfinancialcontrolsoverfinancialreporting,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovidea basis for our audit opinion on the Company’s internal financial controls system overfinancialreporting.
Meaning of Internal Financial Controls Over Financial Reporting
Acompany'sinternalfinancialcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposesinaccordancewithgenerallyacceptedaccountingprinciples. A company's internal financial control over financial reporting includes thosepoliciesandproceduresthat(1)pertaintothemaintenanceofrecordsthat,inreasonabledetail, accurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with generally acceptedaccountingprinciples,andthatreceiptsandexpendituresofthecompanyarebeingmadeonlyinaccordancewithauthorisationsofmanagementanddirectorsofthecompany;and(3)providereasonableassuranceregardingpreventionortimelydetectionofunauthorisedacquisition,use,ordispositionofthecompany'sassetsthatcouldhaveamaterialeffectonthefinancialstatements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting,includingthepossibilityofcollusionorimpropermanagementoverrideofcontrols,materialmisstatementsdue toerroror fraudmayoccurandnotbedetected.Also,projectionsofanyevaluationoftheinternalfinancialcontrolsoverfinancialreportingtofutureperiodsaresubject to the risk that the internalfinancialcontroloverfinancial reportingmaybecomeinadequatebecauseof changes inconditions,or that thedegreeof compliancewith thepoliciesorproceduresmaydeteriorate.
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT(Referred to inparagraph2under ‘ReportonOther Legal andRegulatoryRequirements’sectionofourreportofevendate)(i) (a) TheCompanyhasmaintainedproperrecordsshowingfullparticulars,
includingquantitativedetailsandsituationoffixedassets. (b) The fixed assets were physically verified during the year by theManagement
inaccordancewitharegularprogrammeofverificationwhich, inouropinion,provides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanations given to us, no materialdiscrepancieswerenoticedonsuchverification.
(c) With respect to immovable properties of acquired land and buildings that arefreehold, according to the information and explanations given to us and therecords examined by us and based on the examination of the registered saledeed / transferdeed / conveyancedeed / courtorders approving schemesofamalgamationsprovidedtous,wereportthat,thetitledeeds,ofsuchimmovableproperties,areheldinthenameoftheCompanyasatthebalancesheetdate.
(ii) TheCompanydoesnothaveanyinventoryandhencereportingunderclause(ii)oftheOrderisnotapplicable.
(iv) In our opinion and according to the information and explanations given to us, theCompanyhascompliedwiththeprovisionsofSections185and186oftheCompaniesAct,2013inrespectofgrantofloans,makinginvestmentsandprovidingguaranteesandsecurities,asapplicable.
(v) According to the information and explanations given to us, the Company has notaccepted any deposit during the year. There are no unclaimed deposits under theprovisionsofSections73to76oranyotherrelevantprovisionsoftheCompaniesAct,2013.
(vi) Having regard to thenatureof theCompany’sbusiness /activities, reportingunderclause(vi)oftheOrderisnotapplicable.
ProvidentFund,Employees’State Insurance, Income-tax,ServiceTax,Cessandothermaterial statutory dues applicable to it with the appropriate authorities.SalesTax,CustomsDuty,ExciseDutyandValueAddedTaxarenotapplicabletotheCompany.
(b) There are no dues of Income-tax and Service Tax as on March 31, 2016 onaccountofdisputes.
(xi) In our opinion and according to the information and explanations given to us, theCompany has paid / provided managerial remuneration in accordance with therequisiteapprovalsmandatedbytheprovisionsofSection197readwithScheduleVtotheCompaniesAct,2013.Inrespectofonemanager,remunerationof̀ 5,34,365paid/providedduringtheyear,issubjecttotheapprovaloftheMembersattheforthcomingAnnualGeneralMeeting.
(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliancewith Section177and188of theCompaniesAct, 2013,whereapplicable,foralltransactionswiththerelatedpartiesandthedetailsofrelatedpartytransactionshavebeendisclosedinthefinancialstatementsetc.asrequiredbytheapplicableaccountingstandards.
(xiv)During the year the Company has not made any preferential allotment or privateplacementofsharesorfullyorpartlyconvertibledebenturesandhencereportingunderclause(xiv)oftheOrderisnotapplicabletotheCompany.
(xv) Inouropinionandaccordingtotheinformationandexplanationsgiventous,duringtheyeartheCompanyhasnotenteredintoanynon-cashtransactionswithitsdirectorsor directors of its holding, subsidiary or associate company or person connectedwiththemandhenceprovisionsofSection192oftheCompaniesAct,2013arenotapplicable.
NET CASH (USED IN)/GENERATED FROM INVESTING ACTIVITIES 51,88,189 (51,60,699)
C. Cash flow from Financing Activities NET CASH USED IN FINANCING ACTIVITIES – –
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 5,55,231 2,12,507OPENING CASH AND CASH EQUIVALENTS 11,87,177 9,74,670CASH AND CASH EQUIVALENTS PURSUANT TO THE SCHEME OF AMALGAMATION [Refer Note 2 below] 8,24,483 – CLOSING CASH AND CASH EQUIVALENTS 25,66,891 11,87,177
1. Share capital Authorised EquitySharesof`10.00each 5,00,00,000 50,00,00,000 5,00,00,000 50,00,00,000 Issued and Subscribed EquitySharesof`10.00each,fullypaid 4,20,60,166 42,06,01,660 4,20,60,166 42,06,01,660 A) Reconciliation of number of Equity Shares outstanding Asatthebeginningandattheendoftheyear 4,20,60,166 42,06,01,660 4,20,60,166 42,06,01,660 B) Shareholders holding more than 5% of the Equity Shares in the Company As at As at Asat Asat
RussellCreditLimited-theHoldingCompany 4,20,60,166 100.00 4,20,60,166 100.00 C) Rights, preferences and restrictions attached to the Equity Shares TheEquitySharesoftheCompany,havingparvalueof` 10.00pershare,rankpari passuinallrespectsincludingvotingrightsandentitlementto
As at Asat 31st March, 2016 31stMarch,2015 (`) (`)
3. Other Long term liabilities Securitydeposits 90,11,000 2,80,11,000 [includesdepositsfromITCLimited,theUltimateHoldingCompany
` 34,00,000/-(2015-`2,24,00,000/-)] TOTAL 90,11,000 2,80,11,000
As at Asat 31st March, 2016 31stMarch,2015 (`) (`)
4. Long-term provisions Provisionforemployeebenefits Provisionforcompensatedabsences 13,00,816 12,99,664 TOTAL 13,00,816 12,99,664
As at Asat 31st March, 2016 31stMarch,2015 (`) (`)
5. Other current liabilities Other Payables Statutoryliabilities 1,53,154 99,146 Progresspaymentsandadvancereceivedagainstprojects 1,00,00,000 1,00,00,000 Liabilitiesforexpenses 1,51,525 1,22,358 TOTAL 1,03,04,679 1,02,21,504
As at Asat 31st March, 2016 31stMarch,2015 (`) (`)
Asat Asat Pursuant to As at Upto TransitionAdjustment Upto Pursuant to Upto As at Asat Asat 31stMarch, AdditionsWithdrawalsand 31stMarch, the Scheme of Addition Withdrawals 31st March, 31stMarch, recordedagainstsurplus Fortheyear 31stMarch, the Scheme of For the year 31st March, 31st March, 31stMarch 31stMarch 2014 adjustments 2015 Amalgamation and adjustments 2016 2014 balanceinStatementof 2015 Amalgamation 2016 2016 2015 2014 Profit&Loss
NOTES TO THE FINANCIAL STATEMENTS (Contd.) As at Asat 31st March, 2016 31stMarch,2015 (`) (`)8. Non-current investments (at cost unless stated otherwise) Long term TRADE INVESTMENTS (Unquoted) INVESTMENTS IN EQUITY INSTRUMENTS
ii. Segment Reporting The Company operates in a single business segment namely
propertymaintenance and in a single geographical segment inIndia.
iii. There are no Micro, Small and Medium Enterprises, to whomtheCompany owes dues,which are outstanding formore than45 days during the year and also as at 31stMarch, 2016. ThisinformationasrequiredtobedisclosedundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006hasbeendeterminedto the extent such parties have been identified on the basis ofinformationavailablewiththeCompany.
RELATED PARTY TRANSACTION SUMMARY Ultimate Holding Holding Fellow Employee Trusts Key Management Company Company Subsidiary Personnel Company
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GREENACRE HOLDINGS LIMITED
v. DefinedBenefitPlans/LongTermCompensatedAbsences-AsperActuarialValuationsasat31stMarch,2016andrecognisedinthefinancialstatementsinrespectofEmployeeBenefitSchemes:
VIII. Major Category of Plan Assets As at Asat as a % of the Total Plan Assets 31st March, 2016 31stMarch,2015
1. GovernmentSecurities/
SpecialDepositwithRBI – –
2. HighQualityCorporateBonds – –
3. InsuranceCompanies* 100% 100%
4.MutualFunds – –
5. CashandCashEquivalents – –
6. TermDeposits – –
* In the absence of detailed information regarding plan assetswhichisfundedwithInsuranceCompany,thecompositionofeachmajorcategoryofplanassets,thepercentageoramountforeachcategorytothefairvalueofplanassetshavenotbeendisclosed.
IX. Basis used to determine the Expected Rate of Return on Plan Assets
The expected rate of return on plan assets is based onexpectationoftheaveragelongtermrateofreturnexpectedto prevail over the estimated term of the obligation on thetypeoftheinvestmentsassumedtobeheldbyLifeInsuranceCorporationofIndia(LIC),sincethefundismanagedbyLIC.
For the year ended Fortheyearended 31st March, 2016 31stMarch,2015 (`) (`)
GREENACRE HOLDINGS LIMITED
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X. Net Asset/(Liability) recognised in Balance Sheet (including experience adjustment)
For the year ended Fortheyearended Fortheyearended Fortheyearended Fortheyearended 31st March, 2016 31stMarch,2015 31stMarch,2014 31stMarch,2013 31stMarch,2012 (`) (`) (`) (`) (`)
vi. AmalgamationoferstwhileClassicInfrastructure&DevelopmentLimited(‘CIDL’),awhollyownedsubsidiary,whichwasengagedinthebusinessofmanagingandprovidingmaintenanceservicesforbuildings,withtheCompany:
a) InaccordancewiththeSchemeofAmalgamationofCIDLunderSections391and394oftheCompaniesAct,1956withtheCompany(asagoingconcern),asapprovedbytheBoardofDirectorsoftheCompanyon14thDecember,2015,andsubsequentlysanctionedbytheHon’bleHighCourtatCalcuttaon17thMarch,2016,theassetsandliabilitiesofCIDLweretransferredtotheCompanywitheffectfrom1stOctober,2015,theAppointedDate.TheSchemebecameeffectiveon5thApril,2016uponfilingoftheOrderoftheHon’bleHighCourtwiththeRegistrarofCompanies,WestBengal.Consequenttosuchfiling,theSchemehasbeengiveneffecttointheseFinancialStatements.
b) TheAmalgamationhasbeenaccountedforunderthe‘poolingofinterests’methodasprescribedby“AccountingStandard-14-‘AccountingforAmalgamations’”specifiedunderSection133oftheCompaniesAct,2013,asapplicable.Accordingly,theassets,liabilitiesandreservesofCIDLasat1stOctober,2015havebeentakenoverinthebooksofaccountoftheCompanyattheirrespectivebookvalues.[RefertoNote–2(a)totheCashFlowStatement].
c) AspertheSchemeofAmalgamation,1,27,50,020EquitySharesof`10/-eachofCIDLheldbytheCompany(including1,11,00,020sharesacquiredbytheCompanyduringtheyear),standcancelled.
vii. Duringtheyear1999-2000,erstwhileCIDLacquiredassignableclaimsamountingto`9,20,59,032/-togetherwithanyinterestthatmayaccrueonthesaidamounttillthedateofactualrepayment,atanagreedconsiderationof`2,00,00,000/-.Thisamountisincludedin“Long-termloansandadvances”underNote10.
Convention To prepare financial statements in accordance with applicable
AccountingStandardsinIndia.Asummaryofimportantaccountingpolicies is set out below. The financial statements have also beenpreparedinaccordancewithrelevantpresentationalrequirementsoftheCompaniesAct,2013.
Basis of Accounting Topreparefinancialstatementsinaccordancewiththehistoricalcost
inthenatureofdefinedcontributionschemesandsuchpaid/payableamounts are charged against revenue. To administer such fundsthroughdulyconstitutedandapprovedindependenttrusts.
To determine the liabilities towards gratuity and employee leaveencashment by an independent actuarial valuation as per therequirementsofAccountingStandard–15on“EmployeeBenefits”.Todetermine actuarial gains or losses and to recognise such gains orlossesimmediatelyintheStatementofProfitandLossasincomeorexpense.
Taxes on Income ToprovideCurrent tax as the amountof taxpayable in respect of
taxable income for the period, measured using the applicable taxratesandtaxlaws.
To provide Deferred tax on timing differences between taxableincomeandaccountingincomesubjecttoconsiderationofprudence,measuredusingthetaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedbytheBalanceSheetdate.