DIRECTORS' REPORT To The Members, The Directors of your Company are pleased to present the 8th Annual Report together with the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2015. RESULTS OF OPERATIONS AND THE STATE OF COMPANY'S AFFAIRS Your Company's Yamuna Expressway was opened for public on 9th August, 2012 and commenced toll collection w.e.f. 16th August, 2012. Highlights of performance thereat is as under: The Average Annual Daily Traffic (AADT) for the year ended on 31st March, 2015 was 16,490 PCUs as compared to 13,477 PCUs for the previous year ended on 31st March, 2014, higher by 22.36%. The revenue from Toll Collection for the year ended 31st March, 2015 aggregated to Rs.168.65 Crores as compared to Rs.135.17 Crores for the previous year ended 31st March, 2014, higher by 24.77%. The Average Annual Daily Traffic (AADT) and Toll revenue has registered a Compound Annual Growth Rate (CAGR) of 29.16% and 33.88% respectively since commencement of the commercial operation on 16th August, 2012. Your Company is developing five integrated Townships over 25 million square meters of land for commercial, amusement, industrial, institutional & residential purposes etc. across five different locations along the Yamuna Expressway- one in Noida, two locations in District Gautam Budh Nagar (part of NCR) and one location in each of District Aligarh & District Agra, Uttar Pradesh. The Company has commenced development of its Land Parcel-1 at Noida, Land Parcel-3 at Mirzapur, U.P. and Land Parcel-5 at Agra. The Company has launched approx.113.06 million sq.ft area and has sold approx.107.10 million sq.feet area till 31st March, 2015 aggregating to sales value of Rs. 21943 Crores. The Financial Year has been a successful year for the Company since revenue from toll collection and real estate sale has shown an increasing trend. During the year, Jaypee Healthcare Limited, the wholly owned subsidiary of the Company also commenced operations at its 504 bedded super speciality hospital namely "Jaypee Hospital" located at Wish Town, Sector-128, Noida. DIVIDEND In order to conserve resources, the Board of Directors of your Company express their inability to recommend any dividend for the Financial Year 2014-15. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement entered into with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report. The developments in business operations/performance of the Company's subsidiary consolidated with the Company are as below: Jaypee Healthcare Limited Jaypee Healthcare Limited (JHCL) was incorporated on 30th October, 2012 as a wholly owned subsidiary of the Company for the establishment of "Jaypee Hospital" with the vision of promoting world-class healthcare amongst the masses by providing quality and affordable medical care with commitment. Jaypee Hospital", the flagship hospital of Jaypee Group, is located at Wish Town, Sector - 128, Noida, U.P It has been built across a sprawling 25 acre campus comprising of 504 Beds & is operational with various facilities like OPD operation for Internal Medicine, Radiology, Lab, and Executive Health Check up in the first phase from 1st April, 2014. This healthcare facility is Jaypee Group's noble intention to make its foray into the healthcare domain. CREDIT RATING The Company's financial discipline and prudence is reflected in the credit rating assigned by CARE Ratings Agency viz. Long Term Bank Facilities CARE BBB-. CONSOLIDATED FINANCIAL STATEMENT In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements, the audited consolidated financial statement is provided in this Annual Report. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES As on 31st March, 2015, the Company is having only one subsidiary. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013. During the year under report, the Board of Directors reviewed the affairs of its subsidiary. In accordance with Section 129 (3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and its subsidiary company, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiary in the prescribed format AOC-1 is annexed as Annexure-I of the Boards' report. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of subsidiary are available on the Company's website at www.jaypeeinfratech.com. These documents will also be available for inspection during business hours at our Registered office at Noida, Uttar Pradesh. During the year the Company has made investment in Jaypee Healthcare Limited by subscribing to 17,75,00,000 equity shares of Rs. 10/- each aggregating to Rs. 177.50 crores. DIRECTORS' RESPONSIBILITY STATEMENT In terms of the provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that: a) in the preparation of the annual accounts for the financial year ended 31st March, 2015, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2015 and of the profit and loss of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a 'going concern' basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. CORPORATE GOVERNANCE The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is annexed to the report on Corporate Governance. TRANSFER TO RESERVES During the Financial Year 2014-15, the Company is maintaning a balance of Rs. 23,615 Lacs in General Reserve. An amount of Rs. 45,244 Lacs is proposed to be retained in the surplus. CHANGES IN SHARE CAPITAL The Equity Shares of the Company are being traded on National Stock Exchange of India Limited and BSE Limited since 21st May, 2010. During the year under review, there is no change in Authorized and Paid-up Share capital of the Company. As at 31st March, 2015, the Authorised Share Capital was Rs.30,00,00,00,000 divided into 250,00,00,000 Equity Shares of Rs.10/- each and 5,00,00,000 Redeemable Preference Shares of Rs.100/- each. Paid-up Share Capital of the Company is Rs.1388,93,34,970 divided into 138,89,33,497 Equity Shares of Rs. 10/- each. REDEEMABLE NON-CONVERTIBLE DEBENTURES As on 31st March 2015, Secured Redeemable Non-Convertible Debentures of the Company stood at Rs. 1300 Crore. The same are listed on BSE Limited. Trustee for the said Debentures is Axis Trustee Service Limited, 2nd Floor, Red Fort Capital Parsvnath Tower, Bhai Veer Singh Marg, Gole Market, New Delhi-110001. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES All contracts/arrangements/transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company has not entered into any contract/arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.jaypeeinfratech.com. RISK MANAGEMENT The Company has put in place a mechanism to identify, assess, monitor and mitigate various risks associated with the business. Risks are analysed and corrective actions are taken for managing/ mitigating them. Major risks identified are systematically discussed at the meeting of the Audit Committee and Board of Directors of the Company. In line with the new regulatory requirement, the Company has formally framed the Risk Management Policy to identify and assess the key risk areas, monitor and report compliance and effectiveness of the policies and procedures. The Company has introduced several improvements to the Integrated Enterprise Risk Management, Internal Controls Management and Assurance Frameworks and processes to drive a common integrated view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities. This integration is enabled by all three being fully aligned across Jaypee Group wide Risk Management, Internal Control and Internal Audit methodologies and processes. INTERNAL FINANCIAL CONTROLS The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial disclosures. Hence, the Company has in place adequate internal financial controls with reference to financial statements. DIRECTORATE Changes in Directors and Key Managerial Personnel In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Rakesh Sharma, Smt. Rekha Dixit and Shri Manoj Gaur, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible have offered themselves for re-appointment. During the year under review, the following changes occurred on the Board of the Company: The Board places on record its appreciation for the valuable contribution made by Shri K.P. Nair, Shri M.J. Subbaiah, Shri T.R. Kakkar, Dr. B. Samal, Shri Har Prasad and Shri R.N. Bhardwaj during their tenure as Directors and Shri Sanjay Kumar Gupta, during his tenure as Company Secretary of the Company. Declarations by the Independent Directors The Company has received declarations under Section 149(7) of the Companies Act, 2013 from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Performance Evaluation Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual directors. Schedule IV of the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all the Directors, the Board as a whole and its various committees was conducted based on the criteria and framework adopted by the Board. The evaluation process has been explained in the Corporate Governance Report section of this Annual Report. The Board approved the evaluation results as collated by the Nomination and Remuneration Committee. Familiarization of Independent Directors The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at www.jaypeeinfratech.com. The Nomination and Remuneration Policy is annexed herewith as Annexure II segregated in two parts is as under: a) Policy for selection of Directors and determining Directors independence; and b) Remuneration Policy for Directors, Key Managerial Personnel and other employees. EMPLOYEE STOCK OPTION SCHEME During the year under review, the Company has not exercised Employee Stock option Scheme. AUDITORS AND AUDITORS' REPORT Statutory Auditors M/s R. Nagpal Associates, Chartered Accountants were appointed as Statutory Auditors at the 7th Annual General Meeting of the Company, for a term of three consecutive financial years i.e. for 2014-15, 2015-16 & 2016-17 and they shall hold office till the conclusion of the 10th Annual General Meeting of the Company to be held in the year 2017, subject to ratification by the Shareholders at every Annual General Meeting. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for re-appointment. The Auditors' Report contains the following observations: Point No. (V) of Annexure to the Auditors' Report which is self explanatory "In our opinion and according to the information and explanations given to us the Company has not accepted any deposit during the year. The Company has generally complied with the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013; however, there have been delays in repayment of matured fixed deposits which had matured for repayment on or before the balance sheet date and were outstanding as at 31st March 2015. The New Delhi Bench of the Hon'ble Company Law Board has vide its order dated 29.04.2015, granted thirty days time from 30.04.2015 to clear matured fixed deposits and six months time from 30.04.2015 to clear pre matured fixed deposits alongwith interest". Point No. (IX) of Annexure to Auditors' Report "Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to any financial institution, bank or debenture holder, except some instances of delay in payment of interest to financial institutions, banks and debenture holders ranging for a period from 1 day to 88 days, these have been subsequently made good, except over-due interest on borrowings amounting to Rs. 1,623,419,479/- which is outstanding as at 31st March 2015 for a period of 1 to 58 days and which is being reflected under Note No.8 -'Other Current Liabilities' in the financial statements". Company's Reply The Hon'ble National Green Tribunal (NGT) vide its order dated 28.10.2013 had directed that no completion certificate shall be issued by the Authority concerned for such buildings being constructed within 10 Km radius of Okhla Bird Sanctuary till the Ministry of Environment & Forests (MoEF) in consultation with National Wildlife Board issues Notification for declaring Eco Sensitive Zone area around Okhla Bird Sanctuary & the matter is Anally decided by the Supreme Court of India. The said order has restrained the New Okhla Industrial Development Authority (NOIDA) from issuing the completion certificate for the completed Units ready for handing over the possession to the customers. This also led to increase in the finished inventory and declining Real estate sales which adversely affected the cash flow of the Company. The stalemate continues at the time of adoption of accounts. Interest accured and due on borrowings aggregating to X 162,34,19,479/- mentioned in 'Other Current Liabilities' as at 31.03.2015 is the amount due on various loans for the period from January 2015 to March, 2015. On the day of adoption of accounts by the Board of Directors, the interest accrued and due amount to X 18,41,14,575/- The remaining notes to the financial statements are sell explanatory and do not call for any further comments. Secretarial Auditors The Board has appointed Ms. Sunita Mathur, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended 31st March, 2015 is annexed herewith as Annexure III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Cost Auditors The Board has appointed Shri Sanjay Mehra, Cost Accountants, as Cost Auditors of the Company for auditing the cost accounts of the Company for the Financial Year 2014-15. Based on the recommendations of the Audit Committee, the Board has further re-appointed Shri Sanjay Mehra, Cost Accountants, as Cost Auditors of the Company for auditing the cost accounts of the Company for the Financial Year 2015-16. The requisite approval of the shareholders will be sought to fix the remuneration of the Cost Auditors. COMMITTEES OF THE BOARD Currently, the Board has six committees, the Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility Committee, Finance Committee and Fund Raising Committee. The Board has a defined set of guidelines and an established framework for conducting the meetings of the said Committees. A detailed note on the Board and its committees, scope etc. is provided under the Corporate Governance Report section of this Annual Report. The composition of the committees and compliances are as per the applicable provisions of the Companies Act, 2013 read with Rules and Listing Agreement. Audit Committee The Audit Committee, constituted by the Board of Directors pursuant to Section 177 of the Companies Act, 2013 and Clause 49 of Listing Agreement consists of three Directors namely Shri Anand Bordia, Chairman, Shri B.K. Goswami and Shri Sachin Gaur, Members. Shri Anand Bordia and Shri B.K. Goswami are the Independent Directors. All the members of the committee have knowledge of financial and accounting matters. All the recommendations made by the Audit Committee were accepted by the Board. The Company has adopted the Whistle Blower (Vigil) Mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct and Ethics. The Policy on vigil mechanism and whistle blower policy may be accessed on the Company's website at www.jaypeeinfratech.com. Nomination And Remuneration Committee The Nomination and Remuneration Committee, constituted by the Board of Directors pursuant to Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement consists of three Directors namely Dr. R.C. Vaish, Chairman, Shri Anand Bordia and Shri Sunil Kumar Sharma, Members. Dr. R.C. Vaish and Shri Anand Bordia are Independent Directors. The Committee is responsible to identify persons who are qualified to become directors or senior management employees and recommend to the Board their appointment/removal, oversee and administer executive compensation etc. Stakeholders' Relationship Committee The Stakeholders' Relationship Committee of the Board of Directors consists of three Directors namely Shri Sunil Kumar Sharma, Chairman and Shri Sameer Gaur, Shri Sachin Gaur, Members. The Committee's function is to consider and resolve the grievances of security holders of the Company. Corporate Social Responsibility (CSR) Committee The CSR Committee, constituted by the Board of Directors pursuant to Section 135 of the Companies Act, 2013 read with Rules made thereunder, comprises of three Directors with Shri Sachin Gaur and Smt Rekha Dixit as Members under the Chairmanship of Shri Anand Bordia, an Independent Director. The CSR Policy, as recommended by the CSR Committee has been approved by the Board of Directors of the Company and is available on the Company's website at www.jaypeeinfratech.com. Further, the CSR activities as mentioned in the Company's CSR policy are carried out as per the instructions of the said Committee. During the year under report, the Company has spent over 2% of the Company's Average Net Profits for three immediately preceding financial years on CSR activities. The financial data pertaining to the Company's CSR activities for the financial year ended 31st March, 2015 is presented in the prescribed format annexed as Annexure IV to the Board's report. Finance Committee The Finance Committee consists of four Directors namely Shri B.K. Goswami, Shri B.B. Tandon, Shri Sameer Gaur and Shri Sachin Gaur. The Chairman of the Finance Committee is an Independent Director. Role of the Finance Committee, inter alia, includes to facilitate the availing of funds requirements from Banks/Financial Institutions/ Companies/ other persons/ Arms/ body corporate. Fund Raising Committee The Fund Raising Committee of the Board consists of three Directors namely, Shri Sachin Gaur, Chairman, Shri Gaurav Jain and Shri Pramod Kumar Aggarwal. Role of the Fund Raising Committee, inter alia, includes dealing with all matter connected with the raising of funds by issue of QIP, ECB, ADRs, GDRs, Public issue of Non-convertible Debentures and/or private placement of Non-convertible Debentures etc. MEETINGS OF BOARD OF DIRECTORS The Board met Ave times during the Financial Year, the details of which are given in the Corporate Governance report that forms part of this Annual Report. The intervening gap between the two Board meetings was within the period prescribed under the Companies Act, 2013 and the Listing Agreement. FIXED DEPOSITS Outstanding Fixed deposits received from the shareholders and the public as on 31st March, 2015 were Rs. 292.38 Crores which were required to be paid by 31st March, 2015. In view of the provisions of newly enforced Companies Act, 2013, the Company has, at present, decided not to accept fresh deposits/renew existing deposits but repay the same. On the Company's request, the Hon'ble Company Law Board (CLB) vide its Order dated 31st March, 2015 followed by Order dated 29th April, 2015, extended the time for payment in respect of, deposits matured upto 31st March, 2015, upto 30th April, 2015 and for deposits maturing after 31st March, 2015, extension was granted upto 31st October, 2015. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS Particulars of loans given, investments made, guarantees given and securities provided as per Section 186 of the Companies Act, 2013 along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement which forms part of this Annual report. (Please refer to Note 11, 12, 28 and 29 to the standalone financial statement). CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars relating to conservation of energy, terchnology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure V to this Report. EXTRACT OF THE ANNUAL RETURN Extract of Annual Return of the Company for the Financial Year ended 31st March, 2015 in Form No. MGT-9 is annexed herewith as Annexure VI to this Report. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules is annexed herewith as Annexure VIIA. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 is annexed herewith as Annexure VIIB. GENERAL Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Issue of equity shares with differential rights as to dividend, voting or otherwise. 2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme. 3. The Company has not purchased its own shares. 4. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from its subsidiary company. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which would impact the going concern status and Company's operations in future. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, no frauds were reported to the Audit Committee/ Board of Directors during the Financial Year 2014-2015. ACKNOWLEDGEMENT Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the Financial Institutions, Banks, Government authorities, Customers, Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. For and on behalf of the Board of Directors Manoj Gaur Chairman cum Managing Director Place: Noida Date: 28th May, 2015 |