To,
The Members Sunteck Realty Limited
Your Directors have pleasure in presenting the 41st 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, 2024.
FINANCIAL HIGHLIGHTS
The Company's performance during the financial year ended 31st March, 2024 as compared to the previous financial year is summarised below:
(Rs in Lakhs)
REVIEW OF OPERATIONS
During the year under review, the Company's consolidated total income amounted to ' 62,031.88/- Lakhs as compared to ' 39,087.31/- Lakhs in the previous year. The Profit/(Loss) before tax on consolidated basis stood at ' 9,497.37/- Lakhs as compared to ' 448.35 Lakhs during the previous year.
The Company's total standalone income amounted to ' 45,615.08/- Lakhs compared to ' 29,646.72/- Lakhs in the previous year. The Profit/(Loss) before tax on standalone basis stood at ' 7,451.89/- Lakhs as compared to ' 1,537.02 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 members for the financial year ended 31st March, 2024. The dividend shall be subject to the approval of the members at the ensuing Annual General Meeting. Total outflow on account of dividend shall amount to ' 219,729,629 (Rupees Twenty One Crores Ninety Seven Lakhs Twenty Nine Thousand Six Hundred Twenty Nine Only).
As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), top 1,000 listed companies based on market capitalisation are required to formulate a dividend distribution policy. Accordingly, the Company has adopted Dividend Distribution Policy which sets out the parameters and circumstances which are to be considered by the Board in determining the distribution of dividend to its members and/or retaining profits earned by the Company. The Company's Dividend Distribution Policy is available on the Company's website at https://www.sunteckindia.com/images/investor/code_Policy/1686134887_ dividend-distribution-policy.pdf
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to reserves out of the profits earned during the financial year 2023-24.
SHARE CAPITAL
During the year under review, your Company allotted 7,701 Equity Shares of face value of ' 1/- each to option grantees pursuant to exercise of options under the Company's Employee Stock Option Scheme 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 issued, subscribed and paid up capital of the Company has increased from ' 146,478,718/- divided into 146,478,718 Equity Shares of face value of ' 1/- each to ' 146,486,419/- divided into 146,486,419 Equity shares of face value of ' 1/- each.
DEPOSITS
The Company has neither invited nor accepted/renewed any deposits from the public within the meaning of Section 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. As such, no amount of principal or interest on public deposits was outstanding as on the date of this Report.
SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES
As on 31st March, 2024, the Company has 27 subsidiaries which includes 3 foreign companies and 2 Limited Liability Partnerships ('LLPs'). Additionally, the Company has 4 joint ventures/ associates which includes 1 foreign company and 2 LLPs.
During the year under review, 2 wholly owned subsidiaries of the Company were incorporated viz. Sunteck YM Realty Private Limited and Sundunes Real Estates Private Limited.
On 10th May, 2024, the National Company Law Tribunal, Mumbai Bench ('NCLT') approved the Scheme of Amalgamation of Skystar Buildcon Private Limited ('Skystar') and Advaith Infraprojects Private Limited ('Advaith') and Magnate Industries Private Limited ('Magnate') and Shivay Brokers Private Limited ('Shivay'), wholly owned subsidiaries (collectively known as the 'Transferor Companies') with Sunteck Realty Limited ('Sunteck' or 'The Transferee Company'). The certified copy of the scheme has been filed with the Registrar of Companies, Mumbai by the Transferor Companies on 16th May, 2024 and the Transferee Company on 17th May, 2024 respectively. Accordingly Skystar, Advaith, Magnate and Shivay have ceased to be subsidiaries/step down subsidiaries of the Company.
Post 31st March, 2024, Mithra Buildcon LLP, a wholly owned subsidiary of the Company has been converted into a private company limited by shares i.e. Mithra Buildcon Private Limited with effect from 9th May, 2024 and it continues to be a wholly owned subsidiary of the Company.
Further, the Board of Directors of the Company at its board meeting held on 30th May, 2024, has approved the Scheme of Amalgamation of its wholly owned subsidiaries viz. Starlight Systems Private Limited and Satguru Infocorp Services Private Limited ('Transferor Companies') with Sunteck Realty Limited ('Transferee Company') pursuant to the provisions of Section 230 to 232 and other applicable provisions of the Companies Act, 2013. The said Scheme of Amalgamation is subject to the requisite statutory and regulatory approvals.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the consolidated financial statements of the Company, its subsidiaries, associates and joint venture companies prepared in accordance with the 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, 2024 is attached to the financial statements hereto in Form AOC 1.
Pursuant to the provisions of Section 136 of the Companies Act, 2013, separate audited accounts in respect of each of the subsidiaries of the Company have been placed on the website of the Company. Further, the Company shall provide a copy of separate audited accounts in respect of each of its subsidiary to any member of the Company who asks for it and the said annual accounts are also kept open for inspection at the Registered Office of the Company.
Pursuant to the Listing Regulations, the Company has formulated a policy for determining 'material' subsidiaries and such policy is disclosed on Company's website at https://www.sunteckindia.com/images/investor/code_ Policy/1686135063_srl-policy-for-determining-material-subsidiaries.pdf.
MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL
In compliance with the provisions of Section 152(6) of the Companies Act, 2013, Mrs. Rachana Hingarajia (DIN: 07145358), Executive Director of the Company, is liable to retire by rotation and being eligible seeks re-appointment at the ensuing Annual General Meeting. Appropriate resolution for her re-appointment is placed for the approval of members at the ensuing Annual General Meeting. The Board recommends her re-appointment.
During the year under review, Mr. Atul Poopal resigned as the Executive Director and Key Managerial Personnel of the Company with effect from 31st March, 2024.
Further, Mrs. Sandhya Malhotra was re-appointed as an Independent Director of the Company for a second term of five years to hold office from 1st April, 2024 to 31st March, 2029.
The certificate under Regulation 34(3) of Listing Regulations forms part to this report.
DECLARATIONS BY INDEPENDENT DIRECTORS
In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. Based upon the declarations received from the independent Directors, the Board of Directors has confirmed that they meet the criteria of Independence as mentioned under Section 149(6) of the Companies Act, 2013 and Regulation 16 (1)(b) of the Listing Regulations and that they are Independent of the Management.
In the opinion of the Board, there has been no change in the circumstances affecting their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Companies Act, 2013 and applicable rules thereunder) of all Independent Directors on the Board. All those Independent Directors who are required to undertake the online proficiency self-assessment test as contemplated under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, have passed such test.
DISCLOSURES RELATED TO BOARD, COMMITTEES AND POLICIES Board Meetings
The Board of Directors met 4 times during the financial year ended 31st March, 2024 in accordance with the provisions of the Companies Act, 2013 and the 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. Additionally, on 26th March, 2024, the Independent Directors held a separate meeting in compliance with the requirements of Schedule IV of the Companies Act, 2013 and the provisions of Listing Regulations.
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, 2024, the Board of Directors hereby confirms that:
a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures, wherever applicable;
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 at 31st March, 2024 and of the profit 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 and the Listing Regulations. Kindly refer the section on Corporate Governance, under the head, 'Audit Committee' for matters relating to constitution, meetings and functions of this Committee.
b) Nomination and Remuneration Committee
A Nomination and Remuneration Committee is in existence in accordance with the provisions of Section 178(1) of the Companies Act, 2013 and the Listing Regulations. Kindly refer 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
A brief outline of the Corporate Social Responsibility ('CSR') Policy of the Company and the initiatives undertaken by the Company during the year under review are set out in Annexure I to this report as per the format prescribed under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended thereto.
The CSR Policy is available on the Company's website at https://www.sunteckindia.com/images/investor/code_ Policy/1686135209_Corporate%20Social%20Responsibility%20(CSR)%20Policy-new.pdf
d) Other Board Committees
For details of other Board Committees' kindly refer 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 the provisions of Section 177(9) and (10) of the Companies Act, 2013 read with Regulation 22 of the Listing Regulations, your Company has adopted a whistle blower policy for Directors and employees to report genuine concerns to the management of the Company. The whistle blower policy is available on the Company's website at https://www.sunteckindia.com/images/investor/code_Policy/1686135259_Suntek-Whistle-Blower-Policy. pdf.
Risk Management Policy
The Company's risk management is embedded in the business processes, integrated with all operations and functions, and monitored proactively. The Board has constituted Risk Management Committee ('RMC') to proactively oversight the risk management process to identify, assess and mitigate risks, in order to protect its business from existing and emerging risks, improve corporate governance and enhance stakeholders' value. The RMC lays down procedures for risk assessment and minimisation. It shall serve as the 'eyes and ears' for the Company which would ensure that the Company is insulated from risks both at the macro and micro level. The Board has formulated a risk management policy and ensures it implementation through different mechanism including internal audit. The RMC periodically reviews the various risks associated with the Company's business and recommends steps to be taken to control, monitor and mitigate the risk.
The members are requested to refer Management Discussion and Analysis Report forming part of this Report to know more about risk and concerns relating to industry.
Annual Evaluation of Directors, Committees 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 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in Annexure IV to this report.
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.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy is devised in accordance with Section 178 of the Companies Act, 2013 read with the Listing Regulations. The Nomination and Remuneration Policy includes matters related to appointment, remuneration, the criteria for determining qualifications, positive attributes, independence of a Director, performance evaluation and other related matters with respect to Senior Management, Directors and Key Managerial Personnel.
The Nomination and Remuneration Policy of the Company is aimed at inculcating a performance-driven culture. Through its comprehensive compensation program, the Company endeavors to attract, retain, develop and motivate a high-performance workforce. The said policy is available on the Company's website at https://www.sunteckindia. com/images/investor/code_Policy/Sunteck-Nomination-&-Remuneration-Policy.pdf
DISCLOSURE RELATING TO EMPLOYEE STOCK OPTION SCHEMES
In compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, as amended thereto, the details of Employees Stock Option Schemes of the Company as on 31st March, 2024 are furnished in Annexure II to this report and is also available on the website of the Company https://www.sunteckindia.com/investor-relations. The Employee Stock Option Schemes of the Company are in compliance with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
PARTICULARS OF LOANS, ADVANCES, GUARANTEES OR INVESTMENTS
Particulars of loans, guarantees and investments are detailed in Notes to the standalone financial statements. The Company is in the business of real estate development and accordingly is covered under the definition of 'infrastructure facilities' in terms of Section 186 read with Schedule VI of the Companies Act, 2013.
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. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company for the financial year 2023-24 and hence, does not form part of this report.
During the year under review, there were no materially significant related party transactions which may have a potential conflict with the interests of the Company at large.
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/images/investor/code_ Policy/1686135297_Related%20Party%20Transaction%20Policy.pdf
Disclosure on related party transactions is provided in the notes to financial statements.
DISCLOSURES WITH RESPECT TO MATERIAL CHANGES AND COMMITMENTS
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 the financial statements and are operating effectively. The Company's Internal Financial Controls framework is 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 the Companies (Accounts) Rules, 2014, the internal control systems are supplemented by an Internal Audit carried out by an independent firm of Chartered Accountants for periodical review by the management.
DISCLOSURE OF ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNAL
During the year under review, there were no significant and material orders passed by any Regulator or Court or Tribunal which would impact the going concern status and the Company's operations in future.
INSOLVENCY AND BANKRUPTCY CODE
There are no proceedings initiated/pending against the Company under the Insolvency and Bankruptcy Code, 2016.
VALUATION
During the year under review, there were no instances of onetime settlement with any Banks or Financial Institutions.
FRAUD REPORTING
No fraud has been reported during the audit conducted by Statutory Auditors, Secretarial Auditors and Cost Auditors of the Company.
AUDITORS AND THEIR REPORTS
The matters related to Auditors and their Reports are as under:
STATUTORY AUDITOR AND STATUTORY AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the 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.
Observations of statutory auditors on financial statements for the year ended 31st March, 2024:
There is no qualification, reservation or adverse remark or disclaimer or modified opinion 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, 2024.
SECRETARIAL AUDITOR AND SECRETARIAL AUDITOR'S REPORT
As required under the provisions of Section 204 of the Companies Act, 2013, the Report in respect of the Secretarial Audit of the Company carried out by Mr. Veeraraghavan N., Practicing Company Secretary (ACS No. 6911 and COP No. 4334) for the financial year 2023-24, in Form MR-3, forms part to this report.
Pursuant to Regulation 24A of the 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 for the financial year 2023-24, forms part to this report.
The said reports do not contain any qualification, reservation or adverse remark or disclaimer.
COST AUDIT
Pursuant to the provisions of 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 to the Company and has been complied by the Company. On the recommendation of the Audit Committee, the Board has appointed M/s. Kejriwal & Associates, Cost Accountants (Firm Registration No. 101363), to audit the cost records of the Company for the financial year 2024-25. 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 Annual General Meeting.
ANNUAL RETURN
Pursuant to the provisions of Section 92(3) and 134(3)(a) of the Companies Act, 2013, the Annual Return in Form MGT-7 for the financial year ended 31st March, 2024, is available on the website of the Company at https://www.sunteckindia.com/investor-relations.
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 are as under:
i) Foreign Exchange Earned: ' 14,245,486 (P.Y. ' 2,60,34,749)
ii) Foreign Exchange Outflow: ' 45,605,419 (P.Y. ' 84,322,128)
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has an anti-sexual harassment policy in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The policy lays down the 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 the provisions relating to the constitution of Internal Complaints Committee as required under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were received by the Company during the year under review.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to Section 118(10) 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 and approved by the Central Government.
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 and Sustainability Report
Pursuant to Regulation 34(2)(f) of the Listing Regulations read with SEBI circulars issued from time to time, the Business Responsibility and Sustainability Report of the Company for the financial year ended 31st March, 2024 is attached as Annexure III to this Report.
Unclaimed and Unpaid Dividends and transfer of shares to IEPF
Kindly refer the section on Corporate Governance, under the 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 members, 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.