DIRECTORS' REPORT TO, THE MEMBERS OF M/s. COUNTRY CONDO'S LIMITED The Directors have pleasure in presenting the 28th Annual Report of the Company together with the Audited Accounts for the year ended 31st March, 2015. FINANCIAL PERFORMANCE OF THE COMPANY The Board would like to inform that the development of the Company's real estate & construction activities and Hospitality Income has grown and has achieved a Turnover of Rs.3293.16 Lakhs comparing Last years Rs.803.24 Lakhs only and has achieved a Profit of Rs.166.89 Lakhs, Further, other income of Rs.3.99 Lakhs has been arrived in addition to the real estate & hospitality income. During this year the Company had a Net Profit of Rs.166.89 Lakhs. Amount of Rs.322.41 has been transferred to Retained Earnings in pursuant to Schedule II of the Companies Act, 2013 to write down the Fictitious Assets of the Company. The Balance of Rs.83.31 has been transferred to General Reserves to strengthen the Reserves of the Company. Currently the accumulated P&L Account Surplus is Rs.83.31 Lakhs. The Board of Directors noted and took on record the report of the business review and analyzed the various options available and suitable in the present circumstances to the Company. The Board decided that it was no longer cost effective to manufacture and produce the goods in the present un-remunerative market conditions with the help of present undertaking. Hence, the Board, after due discussions and deliberations, decided to diversify / proposed to diversify its activities into the area of Hotel & Hospitality, Entertainment, Tourism industry etc. NUMBER OF MEETINGS OF THE BOARD: 6 Board Meetings held during the Financial Year 2014-15. SHARE CAPITAL The Paid-up Share Capital of the Company stands at Rs.7,75,97,300/- (Rupees Seven Crore Seventy Five Lakh Ninety Seven Thousand Three Hundred Only) as on 31st March, 2015. The entire Paid-up Share Capital of your Company is listed with both the Stock Exchange(s) namely, M/s. Bombay Stock Exchange Limited (BSE) and M/s. National Stock Exchange of India Limited (NSE). MANAGEMENT DISCUSSION AND ANALYSIS: Pursuant to Clause 49 of the Listing Agreement, a report on the management discussion and analysis is enclosed herewith. CONSERVATION OF ENERGY, TECHNICAL ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO: Additional information as required u/s 134 of the Companies Act, 2013: Information as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 forming part of Directors Report for the year ended 31st March, 2015 1. The Median Remuneration of the employees of the Company during the financial year was Rs.12,000/- 2.In the financial year, there was an increase of 5% in the median remuneration employees. 3.There are 89 permanent Employees on the Rolls of the Company as on 31st March, 2015. 4.Variations in the market capitalization of the Company: a) The Market Capitalisation of the Company as on 31st March, 2015 was Rs.9.93 Crores as compared to Rs.18.93 Crores as on 31.03.2014 b) The price earning ratio of the Company was 5.8 as at 31st March, 2015 and was 34.85 as at 31st March, 2014 c) The closing share price of the Company at BSE Limited on 31st March, 2015 being Rs.1.28/- per equity share of face value of Re.1/- each has grown 1.28 times since the last offer for sale made in the year 1996 (Offer Price was Rs.10/- per equity share of face value of Rs.10/- each). 5. The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee. 6. The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - N.A. and 7. It is hereby confirmed that the remuneration is as per the remuneration policy of the Company. The Directors are to report that no employee was in receipt of remuneration of Rs.60,00,000/- or more per annum or Rs.5,00,000/ - or more per month where employed for a part of the year. BOARD OF DIRECTORS In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Sri. Y. Varun Reddy, Vice-Chairman & Director of the Company who retire by rotation at the 28th Annual General Meeting and being eligible, offer himself for re-appointment. During the Financial Year 2014-15, Smt. Y. Manjula Reddy was appointed as a Director of the Company whose office is liable to retire by rotation and the Provisions of Section 149(1) and Rule 3 of Companies (Appointment and Qualification of Directors) Rules, 2014 of the Companies Act, 2013 has been complied, with respect to the Appointment of a Women Director on the Board. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013: The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in Sub-Section (6) of section 149 of Companies Act, 2013. Details of Directors or key Managerial Personnel who were appointed or have resigned during the year. Mr. U. Gandhi, was appointed as Chief Financial Officer of the Company on 30.06.2014. DIRECTORS' RESPONSIBILITY STATEMENT: Pursuant to the requirements under Section 134 of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, the Board of Directors of the Company hereby confirms: (a) that in the preparation of the annual accounts for the Financial year ended 31st March, 2015, the applicable accounting standards have been followed; (b) that the directors have selected such accounting policies and applied them consistently and 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, 2015, and Profit and Loss Statement of the Company for that period; (c) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) that the directors have prepared the annual accounts for the financial year ended 31st March, 2015, on a going concern basis; (e) that the directors have laid down internal controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; (f) that the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively; RELATED PARTY TRANSACTIONS: All the related party transactions are entered on arms length basis and are in compliance with the applicable provisions of the Act and the listing agreement. There are no materially significant related party transactions made by the Company during the Financial Year 2014-15 which may have the potential conflict with the interest of the company at large. Thus disclosure in Form AOC-2 is not required. Further in accordance with the requirements of the listing agreement, the company has formulated policies on related party transactions. The policy is available on the website of the Company: www.countrycondos.co.in AUDITORS: M/s. P. Murali & Co., Chartered Accountants, the statutory Auditors of the Company, who holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment as per section 139 of Companies Act, 2013. M/s. P. Murali & Co., have expressed their willingness to get re-appointed as the statutory auditors of the Company and furnished their certificate of eligibility and consent for their re-appointment under section 141 of the Companies Act, 2013 and the rules framed there under. The Board based upon the recommendations of the Audit committee recommends the appointment of M/s. P. Murali & Co., as the statutory auditors of the Company. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report. TYPES OF COMMITTEES: The Company has 3 different Committees, they are: a. Audit Committee Composition of the Audit Committee: The Audit Committee for the year was constituted of the following members: Name of the Member Category 1. Sri P.V.V. Prasad, Chairman I Independent, 2. Sri G. Venkateshwar Rao, Member I Non- Executive Directors 3. Sri S. Bal Reddy, Member Mr. J. Laxmikanth, Company Secretary has acted as the Secretary to the Committee. b. Nomination & Remuneration Committee The Nomination and Remuneration Committee for the year was constituted of the following members: Name of the Member Category 1. Sri P.V.V. Prasad, Chairman I Independent, 2. Sri G. Venkateshwar Rao, Member I Non- Executive Directors 3. Sri S. Bal Reddy, Member The Company follows a policy on remuneration of directors and other senior managerial personel. The Policy is recommended by the Nomination and Remuneration Committee and approved by the Board. More details of the same is given in the Corporate Governance Report. STATEMENT PURSUANT TO LISTING AGREEMENT: The Company's Equity shares are listed at 1. Bombay Stock Exchange Limited, Mumbai. 2. National Stock Exchange of India Limited, Mumbai. The Company has paid the Annual Listing Fees to the above Stock Exchanges for the year 2015-16. CORPORATE GOVERNANCE: As required by Clause 49 of the Listing Agreement, a separate section containing the Report on Corporate Governance together with the Certificate on the compliance with the conditions of Corporate Governance issued by the Auditors of the Company is appended hereto and they form part of this Annual Report. SECRETARIAL AUDIT REPORT: The Board of Directors have appointed Gopal Dhanaji, Practising Company Secretary, as the Secretarial Auditor to conduct Secretarial Audit of the Company for the Financial year ended 31st March, 2015 in compliance with the provisions of Section 204 of the Companies Act, 2013. The report of the Secretarial Audit Report by Gopal Dhanaji, Practising Company Secretary, in Form MR-3 is enclosed as Annexure - II to this Report. The report on secretarial audit does not contain any qualification or adverse remark. VIGIL MECHANISM/WHISTLE BLOWER POLICY: The Board of Directors of the Company has adopted Whistle Blower Policy. This policy is formulated to provide an opportunity to employees and an avenue to raise concerns and to access in good faith the Audit Committee, to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, in case they observe unethical and improper practices or any other wrongful conduct in the Company, to provide necessary safeguards for protection of employees from reprisals or victimization and to prohibit managerial personnel from taking any adverse personal action against those employees. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS: The company has in place adequate internal financial controls with reference to financial statements. In addition, the Company has also appointed M/s. Sankar & Raja, Chartered Accountants as the Internal Auditors of the Company to conduct the regular Internal Audit and place its Report before the Audit Committee. During the year, such controls were tested and no reportable material weakness in the design or operation was observed. CHANGE IN THE NATURE OF BUSINESS: There has been no change in the nature of business of the Company during the financial year under review. The details of significant material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future: No significant or material orders were passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future during the year under review. FIXED DEPOSITS: The Company has not accepted any public deposits and, as such, no amount on account of principal or interest on public deposits was outstanding on the date of the Balance sheet. MATERIAL CHANGES AND COMMITMENTS: There were no material changes and commitments in the business operations of the Company from the Financial Year ended 31st March, 2015 to the date of signing of the Director's Report. RISK MANAGEMENT POLICY: The Company has policy for identifying risk and established controls to effectively manage the risk. Further the company has laid down various steps to mitigate the identified risk. MECHANISM FOR BOARD EVALUATION: Clause 49 of the Listing Agreement states 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 the independent directors shall be done by the entire Board of Directors, excluding the director being evaluated. The Directors evaluation was broadly based on the parameters such as understanding of the Company's vision and objective, skills, knowledge and experience, participation and attendance in Board/ Committee meetings; governance and contribution to strategy; interpersonal skills etc. The Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Board Committees. A structure questionnaire was prepared covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, obligations and governance. A meeting of the Independent Directors was also held which reviewed the performance of Non-Independent Directors, Chairman and the quality, quantity and timelines of flow of information between the Company management and Board. DISCLOSURE PERTAINING TO SEXUAL HARASSMENT OF WOMEN AT WORKPLACE: During the Financial year ended 31st March, 2015 the Company has neither received any complaints nor there are any pending complaints pertaining to sexual harassment. SUBSIDIARY COMPANIES: Pursuant to Section 129(3) of the Companies Act, 2013, Company does not have Subsidiary Company. Thus disclosure in Form AOC-1 is not required. ACKNOWLEDGEMENTS: Your Directors thank the Company's customers, vendors, investors, business associates, bankers and other agencies for their support to the Company. We wish to place on record our appreciation for the untiring efforts and contributions made by the employees at all levels to ensure that the Company continues to grow and excel. Finally your Directors record their deep sense of gratitude to all the shareholders for the abundant confidence reposed in the Board of Directors. For and on behalf of the Board For COUNTRY CONDO'S LIMITED Y. RAJEEV REEDY CHAIRMAN & MANAGING DIRECTOR DIN:00115430 D. KRISHNA KUMAR RAJU VICE-CHAIRMAN & CEO DIN: 00115553 PLACE: HYDERABAD |