As on: Sep 26, 2023 02:12 PM
To
The Members,
Sunteck Realty Limited
Your Directors have the pleasure in presenting the 39th Annual Report of the Company on the business and operations of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2022.
FINANCIAL HIGHLIGHTS
The Company's performance during the financial year ended 31st March, 2022 as compared to the previous financial year, is summarised below:
(Rs in Lakhs)
REVIEW OF OPERATIONS
During the year under review, the consolidated total income for the current year amounted to ' 53,402.28 Lakhs compared to ' 63,082.67/- Lakhs in the previous year. The profit before tax on consolidated basis stands at ' 3,254.50/- Lakhs as compared to ' 5,836.52/- Lakhs during the previous year.
The total income earned is ' 23,093.71/- Lakhs compared to previous year's revenue of ' 33,919.17/- Lakhs on standalone basis. The profit before tax on standalone basis stands at ' 1,444.34/- Lakhs compared to profit before tax of ' 4,467.96/- Lakhs during the previous year.
NATURE OF BUSINESS
The Company is engaged in the activities of real estate development of residential and commercial projects. During the year under review, there was no change in the nature of business of the Company.
DIVIDEND
Your Directors are pleased to recommend final dividend of 150% (i.e. ' 1.50/- per equity share of the face value of ' 1 each) to the shareholders for the financial year ended 31st March, 2022. The dividend shall be subject to the approval of the shareholders at the ensuing Annual General Meeting. Total outflow on account of dividend shall amount to ' 21,96,74,992.50/- (Rupees Twenty One Crore Ninety Six Lakh Seventy Four Thousand Nine Hundred Ninety Two and Fifty Paise Only).
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), Dividend Distribution Policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and / or retaining profits earned by the Company. The Board of the Company has adopted a Dividend Distribution Policy which is available on the website of the Company http://www.sunteckindia.com/codes-policies.php
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to reserves out of the profits earned during financial year 2021-22.
SHARE CAPITAL
During the year under review, your Company allotted 55,505 Equity Shares of face Value of ' 1/- each (Rupee One Only) to option grantees pursuant to exercise of options under Company's Employee Stock Option Scheme 2017 and 2018 (ESOS 2017 and 2018). All allotted shares rank pari-passu to the existing shares of the Company in all respects.
Pursuant to the above allotment, the paid up capital of the Company increased to 14,64,49,995 Equity shares of ' 1/- each aggregating to ' 14,64,49,995/- (Rupees Fourteen Crore Sixty Four Lakh Forty Nine Thousand Nine Hundred and Ninety Five Only).
DEPOSITS
In terms of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year financial year 2021-22, your Company has not accepted any deposits from public and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
As on 31st March, 2022, the Company had 24 subsidiaries which includes 3 foreign companies and 4 LLPs. Additionally, the Company has 4 joint venture / associates which includes 1 foreign company and 2 LLPs.
During the year, the Company through its wholly owned subsidiary, Mithra Buildcon LLP, acquired 100% equity shares and compulsorily convertible debentures, representing 100% on a fully diluted basis, of Industele Property Private Limited (Industele), pursuant to which Industele, became a step down subsidiary of the Company.
Further, during the year, Industele acquired 99% equity stake in Rammit Corporate Solutions Private Limited (Rammit) by conversion of 100 optionally convertible debentures into 10,00,000 equity shares of face value of ' 10 each. As a result of such conversion, Rammit and Prija Trading Private Limited (Prija), a wholly owned subsidiary of Rammit, have become step down subsidiaries of the Company.
Further, pursuant to an order dated 30th May, 2022 of the Regional Director, Western Region, Mumbai with respect to Scheme of amalgamation of Prija (Transferor Company) with Rammit (Transferee Company) in accordance with the provisions of Section 233 of the Companies Act, 2013 ('Scheme'), Prija has ceased to be a step down subsidiary of the Company.
During the year, Sunteck Lifespace Private Limited and Sunteck Infracon Private Limited have become the wholly owned subsidiaries of the Company.
Post 31st March, 2022, Sunteck Realtors Private Limited has become the wholly owned subsidiary of the Company. Further, Starlight Systems (I) LLP, a wholly owned subsidiary of the Company has been converted into a private company limited by shares i.e. Starlight Systems (I) Private Limited with effect from 29th April, 2022 and it continues to be the wholly owned subsidiary of the Holding Company. The Certificate of Incorporation in the name of Starlight Systems (I) Private Limited was issued by the Registrar of Companies, Central Registration Centre on 2nd May, 2022.
As per Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the Company, its subsidiaries, associates and joint venture entities in accordance with applicable Accounting Standards issued by The Institute of Chartered Accountants of India, forms part of this Annual Report. The performance and financial position of each of the subsidiaries, associates and Joint Venture companies for the year ended 31st March, 2022 is attached to the financial statements hereto in Form AOC 1.
In terms of Section 136 of the Companies Act, 2013, separate audited accounts in respect of each of subsidiaries have been placed on the website of the Company. Further, the Company shall provide a copy of separate audited annual accounts in respect of each of its subsidiary to any member of the Company who asks for it and said annual accounts will also be kept open for inspection at the Registered Office of the Company.
The Company has formulated a policy for determining 'material' subsidiaries and such policy is disclosed on Company's website www.sunteckindia.com
MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
The tenure of Mr. Kamal Khetan (DIN 00017527) as Chairman and Managing Director of the Company shall end on 29th May, 2023. In accordance with the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 11th August, 2022 re-appointed him as the Chairman and Managing Director of the Company for a further period of Five years with effect from 30th May, 2023 upto 29th May, 2028, subject to approval of the members of the Company at the ensuing Annual General Meeting (AGM) and such other consents as may be required. The resolution seeking your approval for his re-appointment is incorporated in the Notice of the ensuing AGM.
In compliance with provisions of Section 152 of the Companies Act, 2013, Mrs. Rachana Hingarajia, Director of the Company retires by rotation at the ensuing AGM and being eligible, offers herself for re-appointment. Appropriate resolution for aforesaid re-appointment is being placed for approval of the members at the ensuing AGM.
The Board of Directors, on recommendation of Nomination and Remuneration Committee, appointed Mr. Mukesh Jain, Mr. Chaitanya Dalal and Mr. V. P. Shetty as Independent Directors of the Company with effect from 18th September, 2021 and 11th November, 2021 respectively, subject to approval of members.
At the AGM held on 30th September, 2021, the Members have approved the appointment of Mr. Mukesh Jain and Mr. Chaitanya Dalal, as Independent Directors with effect from 18th September, 2021 for a term of five consecutive years.
During the year, the Board of Directors sought approval of the shareholders of the Company through Postal Ballot process for appointment of Mr. V. P. Shetty, as an Independent Director and continuance of his appointment beyond attaining the age of 75 years. The resolution was passed with requisite majority of the members on 24th March, 2022.
The term of office of Mr. Ramakant Nayak and Mr. Kishore Vussonji as an Independent Director came to an end on conclusion of the 38th AGM of the Company held on 30th September, 2021. Consequently, they ceased to be a Director and member of the Committees of the Company after the conclusion of 38th AGM of the Company.
The Board of Directors places on record its sincere appreciation for the valuable contribution made by Mr. Ramakant Nayak and Mr. Kishore Vussonji during their tenure as Directors of the Company.
The Board has received declarations from the Independent Directors as per the requirement of Section 149(7) of the Companies Act, 2013 and the Board is satisfied that the Independent Directors meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013. The Board confirms that the Independent Directors who were required to, have duly passed the online proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.
The certificate under Regulation 34(3) of Listing Regulations forms part to this report.
Mr. Manoj Agarwal shall ceased to act as Chief Financial Officer of the Company with effect from 1st September, 2022. Mr. Prashant Chaubey was appointed as Chief Financial Officer of the Company with effect from 2nd September, 2022.
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES Board Meetings
The Board of Directors met 6 times during the financial year ended 31st March, 2022 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. The Directors actively participated in the meetings and contributed valuable inputs on the matters brought before the Board of Directors from time to time.
Director's Responsibility Statement
In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended 31st March, 2022, the Board of Directors hereby confirms that:
a. i n the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;
b. such accounting policies have been selected and applied consistently and the Directors 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, 2022 and of the profits of the Company for the year ended on that date;
c. proper and sufficient care was 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. the annual accounts of the Company have been prepared on a going concern basis;
e. internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;
f. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Committees of the Board
a) Audit Committee
An Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. Kindly refer to the section on Corporate Governance, under the head, 'Audit Committee' for matters relating to constitution, meetings and functions of the Committee.
b) Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordance with the provisions of subsection (3) of Section 178 of the Companies Act, 2013. Kindly refer to the section on Corporate Governance, under the head, 'Nomination and Remuneration Committee' for matters relating to constitution, meetings, functions of the Committee and the remuneration policy formulated by this Committee.
c) Corporate Social Responsibility Committee
The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company during the year are set out in Annexure I of this report as per the format prescribed in Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended thereto.
The CSR Policy may be accessed on the Company's website at the link https://www.sunteckindia.com/codes- policies.php
d) Other Board Committees
For details of other Board Committees' viz. Stakeholders Relationship Committee and others, kindly refer to the section 'Committees of the Board of Directors' which forms part of the Corporate Governance Report.
Vigil Mechanism for the Directors and Employees
In compliance with provisions of section 177(9) and (10) of the Companies Act, 2013 read with Regulation 22 of the Listing Regulations, your Company has adopted whistle blower policy for Directors and employees to report genuine concerns to the management of the Company. The whistle blower policy of the Company is posted on the website of the Company and may be accessed at https://www.sunteckindia.com/codes-policies.php
Risk Management
The Company's management systems, organisational structures, processes, standards, code of conduct and behaviors together form the system that governs how the Group conducts the business of the Company and manages associated risks. The Board has constituted Risk Management Committee for monitoring and reviewing of the risk assessment, mitigation and risk management plan from time to time.
The approach is based on identification, evaluation, and mitigation of operational, strategic and environmental risks, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.
Annual Evaluation of Directors, Committee and Board
A formal evaluation mechanism has been adopted for evaluating the performance of the Board, the Committees thereof, individual Directors and the Chairman of the Board. The evaluation is based on criteria which include, among others, providing strategic perspective, integrity and maintenance of confidentiality and independence of judgment, Chairmanship of Board and Committees, attendance, time devoted and preparedness for the Meetings, quality, quantity and timeliness of the flow of information between the Board Members and the Management, contribution at the Meetings, effective decision making ability, monitoring the corporate governance practices, role and effectiveness of the Committees and effective management of relationship with stakeholders. Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of its directors individually and the committees of the Board and the same is reviewed by the Nomination and Remuneration Committee.
Particulars of Remuneration
The information as required under the provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure IV attached hereto.
The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) and (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 AGM. 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 RELATING TO EMPLOYEE STOCK OPTION SCHEMES
In compliance with the SEBI (Share Based Employee Benefits) Regulations, 2014, as amended thereto, the details of Employees Stock Option Schemes of the Company as on 31st March, 2022 are furnished in Annexure II attached herewith and forms part of this Report and is also available on the website of the Company https://www.sunteckindia. com/financials.php. The ESOS Schemes of the Company are in compliance with the provisions of SEBI (Share Based Employee Benefits) Regulations, 2014.
PARTICULARS OF LOANS, ADVANCES, GUARANTEES, OR INVESTMENTS
Pursuant to Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations, details of Loans, guarantees and investments given/made during the financial year under review are part of the financial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the transactions/contracts/arrangements of the nature as specified in Section 188(1) of the Companies Act, 2013 entered by the Company during the year under review with related party (ies) are in the ordinary course of business and on arm's length basis. There are no material significant related party transactions made by the Company with Promoters, Directors, or Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. In view of the above, the requirement of giving particulars of contracts / arrangements / transactions made with related parties, in Form AOC-2 are not applicable for the year under review.
The Policy on related party transactions and procedures dealing with related party transactions as approved by the Board may be accessed on the Company's website at https://www.sunteckindia.com/codes-policies.php
Disclosure on related party transactions is provided in notes to financial statements.
DISCLOSURES UNDER SECTION 134(3)(L) OF THE COMPANIES ACT, 2013
Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and the date of this report.
INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Controls in place with reference to financial statements and is operating effectively. The Company's IFC framework commensurate with its size, scale and complexity of operations. The controls, based on the prevailing Business conditions and processes have been reviewed by the Company to strengthen the same wherever required. In compliance with the provisions of section 138 of the Companies Act, 2013 read with Rule 13 of Companies (Accounts) Rules, 2014, the internal control systems are supplemented by Internal Audit carried out by independent firm of Chartered Accountants for periodical review by management. The Audit committee reviews the reports submitted by the Internal Auditors in its meeting.
DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
There are no significant material orders passed by the Regulators/ Courts which would impact the going concern status of the Company and its future operations.
STATUTORY AUDIT AND AUDITORS' REPORT
Pursuant to the provisions of Section 139 of Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, as amended, M/s. Walker Chandiok & Co LLP, Chartered Accountants, (Firm Registration number-001076N/ N500013) were appointed as the Statutory Auditors of the Company for a term of 5 years to hold office from the conclusion of the 37th Annual General Meeting held on 29th September, 2020 till the conclusion of 42nd Annual General Meeting to be held in the year 2025. The Company has received a certificate from Walker Chandiok & Co. LLP that they are eligible to hold office as the Auditors of the Company and are not disqualified for being so appointed.
Observations of statutory auditors on accounts for the year ended 31st March, 2022:
There are no qualifications, reservations or adverse remarks made by M/s. Walker Chandiok & Co LLP. Chartered Accountants, Statutory Auditors of the Company, in their report for the financial year ended 31st March, 2022.
SECRETARIAL AUDIT
As required under provisions of Section 204 of the Companies Act, 2013, the Secretarial Audit report of the Company carried out by Mr. Veeraraghavan N., Company Secretary in practice for 2021-22, in Form MR-3, forms part to this report. Pursuant to Regulation 24A of Listing Regulations, the Secretarial Audit Reports in respect of the material unlisted subsidiaries of your Company viz., Skystar Buildcon Private Limited and Satguru Corporate Services Private Limited 2021-22, forms part of this report. The said reports does not contain any qualification, reservation or adverse remark or disclaimer.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, Maintenance of Cost records and Cost Audit is applicable which has been complied with by the Company. On the recommendation of the Audit Committee, the Board has re-appointed M/s. Kejriwal & Associates, Cost Accountants (Firm Registration No. 101363), to audit the cost accounts of the Company for the financial year ending on 31st March, 2022. Remuneration payable to the Cost Auditor needs to be ratified by the members of the Company and hence, a resolution seeking members' ratification for the remuneration payable to the Cost Auditor is included in the Notice convening the AGM.
ANNUAL RETURN
The Annual Return in Form MGT-7 for the financial year ended 31st March, 2022, is available on the website of the Company at https://www.sunteckindia.com.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The Company adopts good practices by using rainwater harvesting thereby lowering fresh water intake and reducing run-offs. The Company uses Dual Fitting Tanks and LED lights which reduces the burden on energy usage in the construction area. The Company uses steel products for rolling mills which saves considerable amount of natural resources and energy required to convert steel from ores. Fly ash and GGBS are the waste generated from the thermal power plant and steel plants respectively used in concrete which consumes waste generated by other industries and also produce more durable concrete. Sites are covered with G1 sheets which reduces the equipment noise and prevents dust getting blown up in air in windy days. The use of STP water for flushing and gardening reduces the burden on natural water resources. Wherever possible solar PV panels for common area lighting are used which in turn reduces the carbon footprints.
The details of foreign exchange earnings and outgo during the year under review is as below:
INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2014
During the year under review, no case was filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Your Company has a policy and framework for employees to report sexual harassment cases at workplace and the process ensures complete anonymity and confidentiality of information. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to the provisions of the Companies Act, 2013, the Company has complied with the Secretarial Standard on the Meetings of the Board of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government under Section 118(10) of the Companies Act, 2013.
OTHER DISCLOSURES Corporate Governance
The report on Corporate Governance and the certificate from Company Secretary in Practice regarding compliance with the conditions of Corporate Governance have been furnished in the Annual Report and forms a part of the Annual Report.
Management Discussion and Analysis Report
The Management Discussion and Analysis report has been separately furnished in the Annual Report and forms a part of the Annual Report.
Business Responsibility Report
Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report of the Company for the financial year ended 31st March, 2022 is attached as Annexure III which forms part of this Report.
Fraud Reporting
No fraud has been reported during the audit conducted by Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
Unclaimed and Unpaid Dividends, and transfer of shares to IEPF
Kindly refer section on Corporate Governance, under head 'Unclaimed and Unpaid Dividends, and transfer of Shares to IEPF' for the amounts of unclaimed and unpaid dividends lying with the Company.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors would like to express their sincere appreciation and gratitude for the co-operation and assistance from its shareholders, bankers, regulatory bodies and other business constituents during the year under review.
Your Directors also wish to place on record their deep sense of appreciation for the contribution and commitment made by every member of the Sunteck Family.