DIRECTORS’ REPORT To the Members, Prozone Intu Properties Limited (Erstwhile "Prozone Capital Shopping Centres Limited") Your Directors are delighted to present their report on the business and operations of your Company for the year ended March 31, 2015. PERFORMANCE REVIEW Standalone The Company's gross (total) income for the inancial year ended 31st March, 2015 decreased to Rs. 1,509.36 lakhs against Rs. 1,885.57 lakhs during the previous year. The profit before tax decreased to Rs. 365.66 lakhs from Rs. 635.98 lakhs as recorded during previous year. The profit after tax decreased to Rs. 254.55 lakhs from Rs. 480.80 lakhs in the previous year. Consolidated The Company's gross (total) income for the inancial year ended 31st March, 2015 increased to Rs. 6,801.59 lakhs from Rs. 5,883.50 lakhs during the previous year. The profit/(loss) before tax decreased to Rs. (1,199.29) lakhs from Rs. (1,633.83) lakhs as recorded during previous year. The proit/(loss) after tax after minority interest decreased to Rs. (649.95) lakhs from Rs. (916.21) lakhs in the previous year. CHANGE OF NAME OF THE COMPANY The Members of the Company vide passing a Special resolution through Postal Ballot approved the change of name of the Company from "Prozone Capital Shopping Centres Limited" to "Prozone Intu Properties Limited". Subsequently upon application made by the Company, the office of Registrar of Companies, Mumbai approved the new name of the Company and issued a fresh certificate pursuant to Change of name dated 24th July, 2014 to the Company. Accordingly, the new name of the company became effective from 24th July, 2014. LISTING The equity shares of the Company are listed on The BSE Limited (BSE) and The National Stock Exchange of India Ltd. (NSE) and the listing fee for the year 2015-16 has been already paid. SUBSIDIARY AND JOINT VENTURE COMPANIES The Company has 10 subsidiary companies as on 31st March, 2015 including step-down subsidiaries and 2 Joint Venture Companies. Direct Subsidiaries: 1. Alliance Mall Developers Co. Private Limited 2. Jaipur Festival City Private Limited. 3. Kruti Multitrade Private Limited 4. Royal Mall Private Limited 5. Prozone Liberty International Limited, Singapore Step-down subsidiaries: 6. Empire Mall Private Limited 7. Hagwood Commercial Developers Private Limited 8. Omni Infrastructure Private Limited 9. Prozone Overseas Pte. Limited, Singapore 10. Prozone International Coimbatore Limited, Singapore Joint Venture Companies 1. Moontown Trading Company Private Limited 2. Emerald Buildhome Private Limited The Board of Directors ('the Board') regularly reviews the affairs of the subsidiaries. In compliance with section 129 (3) of the Companies Act 2013, we have prepared consolidated inancial statements of the Company and all its subsidiaries, which form part of the Annual Report. Further, a statement containing the salient features of the inancial statements of subsidiaries in the prescribed format AOC-1 is appended to this Report. The Statement also provides the details of performance, inancial positions of each of the subsidiaries. The annual accounts of the subsidiary companies and related detailed information are made available to the members of the company and of the subsidiary companies seeking such information. The annual accounts of the subsidiary companies are also made available for inspection by any member at the registered ofice of the company during business hours. The copies of accounts of subsidiaries companies can be sought by the member of the company by making a written request address to the Company Secretary at the registered ofice of the company. 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 Company has also implemented several corporate governance practices. The report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms an integral part of this Report. The requisite certificate from a company secretary in whole-time practice confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. The report is self explanatory and does not require any further comments/explanation on matters contained therein. MANAGEMENT DISCUSSION AND ANALYSIS A detailed review of operations, performance and future outlook of the Company and its business, as stipulated under clause 49 of the Listing Agreement, is presented in a separate section forming part of Annual Report under the head 'Management Discussion and Analysis'. FIXED DEPOSITS Company has not accepted any fixed deposits and, as such, no amount of principle or interest was outstanding as of the Balance sheet date. DIRECTORS AND KEY MANAGERIAL PERSONNEL • Director retire by rotation Pursuant to the provisions of section 152 of the Companies Act, 2013, the office of Mr. David Fischel, Director is liable to retire by rotation at the ensuing Annual General Meeting, and being eligible, has offered himself for re-appointment. The Board recommends his re-appointment. A brief resume of Mr. David Fischel consisting nature of expertise in specific functional areas and name of companies in which he holds directorship and/or membership/ chairmanships of committees of the respective Boards, shareholding and relationship between directorship inter-se as stipulated under clause 49 of the Listing Agreement, is given in the section of notice of AGM forming part of the Annual Report. • Payment of remuneration to executive Directors for a further period of 2 years of appointment The Nomination & Remuneration Committee and Board of Directors in their respective meetings held on 5th February 2015 subject to the approval of members of the Company at ensuing annual general meeting approved the payment of remuneration to Mr. Nikhil Chaturvedi, Managing Director and Mr. Salil Chaturvedi, Dy. Managing Director of the Company for a further period of two years with effect from 27th February 2015. More details on the matter are given in explanatory statement of notice of this AGM, forming part of this report. A brief resume of Mr. Nikhil Chaturvedi and Mr. Salil Chaturvedi consisting nature of expertise in speciic functional areas and name of companies in which they hold directorship and/or membership/ chairmanships of committees of the respective Boards, shareholding and relationship between directorship inter-se as stipulated under clause 49 of the Listing Agreement, is given in the section of notice of AGM forming part of the Annual Report. • Independent Directors The Company has received necessary declarations from all independent directors as per the requirement of section 149(7) of the Companies Act 2013 that they fulill the criteria of independence laid down in section 149(6) of the Companies Act 2013 and clause 49 of the Listing Agreement. The details of programmes for familiarisation 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 the following link: <http://www.prozoneintu.com/investor/Policies> • Key Managerial Personnel Pursuant to section 203 of the Companies Act, 2013, Company has appointed/ nominated its Key Managerial Personnel viz; Mr. Salil Chaturvedi as the Dy. Managing Director, Mr. Anurag Garg as the Chief Financial Officer and Ms. Snehal Bansode as the Company Secretary of the company. • Board evaluation Clause 49 of the Listing Agreement directed that the Board shall monitor and review the Board evaluation framework. The Companies Act 2013 states that a formal annual evaluation needs to be conduct 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 Board based on evaluation criteria recommended by the 'Nomination and Remuneration Committee' and 'Code for Independent Directors' prescribed under schedule IV of the Companies Act, 2013 evaluated the performance of Board members one by one. The Board after due discussion and executing evaluation methodology noted a satisfactory performance and contribution by all members of the Board. • Remuneration Policy The Remuneration Policy of the Company is designed to attract, motivate, improve productivity and retain manpower, by creating a congenial work environment, encouraging initiatives, personal growth and team work, and inculcating a sense of belonging and involvement, besides offering appropriate remuneration packages and superannuation benefits. This Remuneration Policy applies to directors, senior management personnel including its Key Managerial Personnel (KMP) of the Company, is attached to this report as 'Annexure 1'. DIRECTORS RESPONSIBILITY STATEMENT Your Directors state that: a. in the preparation of the annual accounts for the year ended March 31, 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 March 31, 2015 and of the profit 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. AUDITORS Statutory Auditors The members of the Company in their Annual General Meeting held on September 30, 2014, appointed M/s SGCO & Co., Statutory Auditors of the Company for the period of three financial years from 2014-2015 to 20162017 subject to the ratification of their appointment at every subsequent Annual General Meetings (AGMs). Hence, the appointment of statutory auditors is required to be ratified by the members in ensuing Annual General Meeting for second financial year i.e. 2015-16 pursuant to provisions of section 139(1) of the Companies Act 2013. The Company had received a letter from the Statutory Auditors confirming that their re-appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013. As recommended by the Audit Committee in its meeting held on 20th May, 2015 the Board recommends the ratification of appointment of Statutory Auditors for approval of members for the financial year 2015-16 to hold the office from conclusion of 8th Annual General Meeting to the conclusion of 9th Annual General Meeting. The observations and comments given by the Auditors in their report read together with notes to Accounts are self explanatory and hence do not require for any further comments under section 134 of the Companies Act, 2013. Secretarial Auditor Pursuant to Section 204 of Companies Act, 2013, the Board of Directors had appointed M/s. HS Associates, Practicing Company Secretaries (C. P. No 1483) to undertake the Secretarial Audit of the Company. The Secretarial Auditor's Report is attached to this report as 'Annexure 2'. Secretarial Auditors' in their report observed that the Company had not appointed Woman Director on Board of the Company pursuant to section 149 of the Companies Act 2013 and Clause 49(II)A of the Listing Agreement Management Response: The Company is in process of appointment of a Woman Director, over a period of time, management of the Company has interviewed several professionals to freeze this appointment, but could not find a suitable person having required experience and expertise considering nature of the Industry. However, management is making all its best efforts and we hope that the appointment shall be frozen shortly. DISCLOSURES UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND RLDRLSSAL) ACT, 2013 The Company has been employing women employees in various cadres within its ofice and factory premises. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committees are set up at shop floor level to redress any complaints received and are monitored on regular basis. There was no complaint received from any employees during the Financial Year 2014-15 and hence no complaint is outstanding as on 31st March, 2015 for redressal. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO The particulars in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under sub-section (3) (m) of Section 134 of the Companies Act, 2013 read with Rule (8)(3) of the Companies (Accounts) Rules, 2014 are given as under: A. Conservation of Energy i) The steps taken or impact on conservation of energy: The operations of your Company are not energy intensive. ii) The steps taken by the Company for utilizing alternate sources of energy: Nil iii) The capital investment on energy conservation equipments: Nil B. Technology Absorption i) The efforts made towards technology absorption : Nil ii) The beneits derived like product improvement, cost reduction, product development or import substitution : Nil iii) in case of imported technology (imported during the last three years reckoned from the beginning of the Financial Year): Not Applicable (a) Details of Technology Imported; (b) Year of Import; (c) Whether the Technology has been fully absorbed; (d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof. iv) Your Company has not incurred any expenditure on Research and Development during the year under review. C. Foreign Exchange Earnings and Outgo During the year under review there were no actual foreign exchange earnings and outgo. DISCLOSURES UNDER COMPANIES ACT 2013 • Extract of Annual Return In accordance with section 134(3) of the Companies Act 2013, an extract of the annual return in the prescribed format is appended as 'Annexure 3' to the Boards' Report. • Number of meetings of the Board The Board met four 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 any two meetings was within the period prescribed by the Companies Act 2013 and Listing Agreement. • Committees of the Board The Board has established committees as per the requirement of Companies Act 2013 and Listing Agreement including Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. • Vigil Mechanism/ Whistle Blower Policy Your Company has established a Vigil Mechanism Policy for its Directors and employees to safeguard against victimization of persons who use vigil mechanism and report genuine. The Audit Committee of your Company oversees the Vigil Mechanism on regular basis. Your Company hereby a firms that no director/ employee has been denied access to the Chairman of Audit Committee and that no complaints were received during the quarter. The policy on Vigil Mechanism may be accessed on Company's website at the following link: <http://www.prozoneintu.com/investor/Policies> • Particulars of loans, guarantees and investments The details of Loans, guarantees and investments are as per the requirement of section 186 of the Companies Act 2013 form part of the notes to the financial statements provided in this Annual Report. • Particulars of contracts or arrangements made with related parties The particulars of contracts or arrangements made with related parties referred to in section 188(1) of the Companies Act 2013, in the prescribed form AOC-2 is appended as 'Annexure 4' to the Boards' Report. • Particulars of employees Details in terms of the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration) Rules 2014 the names and other particulars of the employee is appended as 'Annexure 5' to the Boards' Report The ratio of remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read along with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as 'Annexure 6' and forms part of this Report. • Transfer to Reserves During the year, company has not transferred any amount to reserve. • Material changes and commitments No material changes and commitments affecting the inancial position of your Company have occurred between 31st March, 2015 and the date of the report. • Risk Management Pursuant to clauses 49(I) and 49(VI) of the Listing Agreement and section 134 of the Companies Act 2013 the Board of Directors of the Company in its meeting held on 5th February 2015 noted the Risk Management Plan for the company and Succession Plan for Board members and senior management personnel • Corporate Social Responsibility The provisions of Section 135 of the Companies Act, 2013 as to Corporate Social Responsibility are not applicable to your Company. In compliance with provisions of Section 108 of the Companies Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014 and clause 35B of the Listing Agreement, the Company is pleased to provide members the facility to exercise their right to vote at the 8th Annual General Meeting (AGM) by electronic means and the business may be transacted through e-Voting Services provided by Central Depository Securities (India) Limited (CDSL). The company has also sent Polling Paper to the members to enable those who do not have access to e-Voting facility to cast their vote on the shareholders resolution to be passed at the ensuing Annual General Meeting, by sending their assent or dissent in writing. CLAUSE 5A OF THE LISTING AGREEMENT Pursuant to 'Composite Scheme of Arrangement and Amalgamation' ('The Scheme') between Provogue (India) Limited ('Provogue' or 'Demerged Company'), Prozone Enterprises Private Limited ('PEPL' or 'Transferor Company') and the Company ('Transferee Company') approved by Hon'ble High Court of Bombay on 10th February, 2012, the Company on 12th March, 2012 made allotment to shareholders of 'Provogue' in exchange ratio of 1:1. Prior to the said allotment by the Company, 3400 shares of 'Provogue' were lying in suspense account as unclaimed by shareholders of Provogue. The Company, in pursuance of the Scheme, allotted same number of shares to the same shareholders, and treated the same as unclaimed shares. As per the Clause 5A of the Listing Agreement, any corporate beneits in terms of securities accruing on such shares viz. bonus shares, split etc., shall also be credited to such demat suspense account hence the Company has transferred said 3400 shares to 'Provogue Demat Suspense Account'. ELECTRONIC FILING The Company periodically uploads the Annual Reports, Financial Results, Shareholding Pattern, Corporate Governance Reports etc. and other information on its website viz. www.prozoneintu.com . APPRECIATION Your Directors take this opportunity to express their gratitude and sincere appreciation for the dedicated efforts of all the employees of the Company. Your Directors are also thankful to the esteemed share holders for their support and confidence reposed in the Company and to The Stock Exchanges, Government Authorities, Banks, Solicitors, Consultants and other business partners. For and on behalf of Board of Director Nikhil Chaturvedi Managing Director Salil Chaturvedi Dy. Managing Director Place: Mumbai Date: 11.08.2015 |