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DB Realty Ltd.

BSE: 533160 | NSE: DBREALTY |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE879I01012 | SECTOR: Construction & Contracting - Real Estate

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Annual Report

For Year :
2018 2017 2016 2015 2014 2013 2012 2011 2010

Director’s Report




The Directors have pleasure in presenting the 12th Annual Report on the business and operations of the Company along with the audited financial statements for the financial year ended 31st March, 2018.

Financial Highlights

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Revenue from Operations





Other Income





Total Income






Operating Expenses





Depreciation and Amortization





Total Expenses





Profit Before Finance Cost and Tax





Finance Cost





Profit/ Loss before extraordinary items and tax










Profit/ Loss after extraordinary items and tax





Share of Profit/ Loss from associates and joint ventures





Profit Before Tax ( PBT)





Tax Expense





Profit after Tax (PAT)





Other Comprehensive Income





Total Comprehensive Income/ Loss for the year





Status of Projects of the Company / its Subsidiaries

“DB Crown” at Prabhadevi is a residential project offering luxury of ampleness of space and an endless view of the sea. It offers to its resident''s state of the art amenities and the added luxury of access to a multitude of prominent shopping areas in the vicinity. The company, Real Gem Buildtech Private Limited (a wholly owned subsidiary of the Company) which is executing the said Project has arrived at an arrangement with Kingmaker Developers Private Limited, a Group company of Rustomjee (a subsidiary of Keystone Realtors Private Limited ) for the development management of Real estate Project DB Crown.

“X BKC” at Bandra, is having strategic location near Bandra Kurla Complex. It is an iconic residential project that offers variety of spacious residential apartments. The project is spread over 5 acres of land, one of largest integrated residential complex in upscale Bandra east in Mumbai Suburbs. The company, MIG (Bandra) Realtors and Builders Private Limited, a wholly owned subsidiary of the Company, executing the said Project has obtained revised plans and commencement certificates for the project. The construction work of the said project, which is being developed in a joint venture with Radius Group, is witnessing impressive progress as per plans.

“DB Ozone” at Dahisar is a large residential project. The company, Neelkamal Realtors Suburban Private Limited, a subsidiary of the Company, executing the Project, has initiated fit out handover process for the Phase I & Phase II of the project.

“One Mahalaxmi” at Mahalaxmi offering its elite residents the luxury of size and space along with an unmatched view of the Arabian Sea as well as the Golf Course. Spread over 4 acres of prime real estate, the project offers quick access to any part of the city .The company, Neelkamal Realtors Tower Private Limited (a subsidiary of the Company) has entered into a Development Management Agreement with Indo Global Soft solutions and Technologies Private Limited, a Radius Group company for the development of its One Mahalaxmi project.

“DB Skypark” near international airport, Andheri is being developed in through a joint venture on approx. 1.5 acres of land with 6 wings. The project site is at very strategic location and is well connected by way of Metro, road network and railways. The construction work is going on as per approved plans. The construction work of the said project is progressing as per plans.

The Turf View, Enclave II and Orchid Views projects in Mumbai are awaiting certain approvals, which will offer substantial revenue in future. The Project site at Bandra Reclamation, in which Company has substantial stake through a wholly owned subsidiary company which is a partner in the firm, Om Metal consortium received layout approval to carry out the project.

Further, Project in another company viz. Marine Drive Hospitality & Realty Private Limited, (MDHRPL) wherein Company has considerable investments has got its plans approved from competent statutory authority. MDHRPL is developing a residential tower in tie up with a reputed partner and work is reinstated on the site.

Status of 2G Spectrum Case

In the matter of 2G spectrum allocation case pertaining to grant of 2G License acquitting Mr. Vinod Goenka and Mr. Shahid Balwa, Managing Directors and Key Managerial Personnels of your Company from all allegations, the Order was passed by the Hon''ble CBI Special Court on 21st December, 2017. In other matter of complaint filed by Directorate of Enforcement before the same Hon''ble CBI Special Court in connection with Prevention of Money Laundering case relating to 2G Spectrum case against both the Managing Directors of the Company, Senior Official / a member of the Promoters Group and the Company, the Hon''ble CBI Special Court has passed the Order on 21st December, 2017 acquitting all the parties.

Further, in PMLA Case, the Special Court has also given Order for release of properties attached by the Directorate of Enforcement including of the Firm - “after the period of appeal is over”. Against the said Orders, CBI as well as the Directorate of Enforcement have filed Criminal Leave Petitions before the Hon'' Delhi High Court. Further, the Directorate of Enforcement has also filed petition for stay against Order of release of the attached properties for which “status-quo” has been granted by Hon'' Delhi High Court vide Order dated 21st March, 2018 and the matter is sub-judice.

Audit Report:

The Auditors have qualified their report on certain matters. The details of such qualifications as mentioned in their Report with your Directors'' response thereon are as under:

1. Para 4(a) of the Audit Report on the Standalone Financial Statements (SFS) and Consolidated Financial Statements (CFS) read with Note Nos. 60 and 59 of SFS and CFS respectively, refer to Financial Guarantees issued by the Company to banks / financial institutions on behalf of various entities including Subsidiaries, Joint Ventures and other entities, which have not been re-measured, at fair value. Your Directors state that these financial guarantees were issued in terms of the sanction letters by banks/financial institutions which generally also prohibited the Company to charge any commission on giving such guarantees and hence in compliance with the terms of the sanction letters/loan documents, no commission was charged on such financial guarantees which were provided as collateral securities. The notes referred to in the Report are self-explanatory.

2. Para 4(b) and Para 4(d) of the Audit Report on the SFS and CFS read with Note Nos. 51 and 52 of SFS and CFS respectively refer to evaluation of provision for impairment for credit losses in the case of loans and advances to certain subsidiaries and associates, which have incurred losses and have negative net worth. Your Directors state that the Company has economic interests in these entities which are at different stages of execution of the Projects where revenue recognition has not started and the Company is confident of recovering the same. Such loans and advances are towards the costs to be incurred / being incurred by these entities for their projects and to facilitate proper execution and will be repaid in due course.

3. Para 4(c) of the Audit Report on the SFS and CFS read with Note No. 2(B)(i)(d) of SFS and CFS refer the Company has measured its investments in equity instruments of one of its subsidiary company at fair value through other comprehensive income which the Management has not considered as a subsidiary. Your Directors state that the said entity is not within its control, as it is managed by the independent Board of Directors comprising of a Director nominated by financial institution, which is shareholder in that company and hence, not required to be consolidated. Further, the investments by the Company in this entity are not just in equity shares but the same is in the form of different preference shares having maturity terms in future. The strategic investor is also having affirmative voting power and Super Majority rights over all material transaction and hence control does not vest in the Company through its investment or otherwise. Therefore, your Directors are of the opinion that the Company has rightly measured its investments in equity instruments of the said entity at fair value instead of measuring it at cost and has given accounting treatments accordingly.

4. Para 4(b) of the Audit Report on CFS read with Note No. 2(B)(i)(d) refer to non-consolidation by the Company of another company and its subsidiaries/associates etc, on the basis of control assumed to be exercised by your Company on the same under the applicable Ind AS 110. As mentioned in detail in above point no. 3, your Directors again state that the said company is not under the control of your Company and hence your Directors are of the opinion that this is not required to be consolidated. The same is also detailed in Note 2(B)(i)(d) in Significant Accounting Judgments, Estimates and Assumptions.

The Statutory Auditors have also drawn attention of the members in their Reports to certain Notes. While the said notes are self-explanatory, your Directors offer the following clarifications and further explanations on the same as under:

(a) Para 6(a) [Note No. 50(b)] of SFS and Para 6(i) [Note No. 50(b)] of CFS refer to no adjustment having been made by the Company in the value of inventory, pending outcome of the matter referred by the Company to Hon. Supreme Court. As detailed in the said Notes, this is in respect of a project under development having a value of Rs. 3,517.59 lacs (forming part of inventory). Pending outcome of the matter, no adjustments have been made in the accounts in this regard.

(b) Para 6(b) [Note No. 7.2] of SFS and Para 6(ii) [Note No. 8.2] of CFS: The Auditors have referred to certain investments made in the Preference Share Capital of an entity for an amount of Rs. 77,928.49 lacs. This relates to investments made by your Company in the Preference Share Capital of Marine Drive Hospitality & Realty Private Limited in the forms of Compulsorily Convertible Cumulative Preference Shares, Redeemable Optionally Convertible Cumulative Preference Shares and Cumulative Redeemable Convertible Preference Shares, which bear specified rates of dividend. This Company is proposing to implement the project in real estate including commercial and residential activities and hence this investment is considered as strategic and in the long term interests of your Company.

(c) Para 6(c) [Note No. 9.2] of SFS and Para 6(iii) [Note No. 10.2] of CFS: Attention has been drawn to payments made to several parties towards security deposits of Rs. 6476.33 lakhs for acquisition of development rights. As stated in the said notes, your Company is in the process of obtaining necessary approvals for the development of the said properties which have significantly higher current market values than the carrying costs and would reap adequate profitability on substantial completion of the respective projects.

(d) Para 6(d) [Note No. 13.1] of SFS and Para 6 (iv) [Note No. 14.1] of CFS: Auditors have referred to the costs incurred on various projects reflected in the financial statements under the head Inventories at lower of the actual costs incurred or the realizable value, as reported by the Management. All these projects are under initial stage of development and are capable of fetching higher net realizable value greater than the cost. The said notes are self-explanatory.

(e) Para 6(e) [Note Nos.47 to 49] of SFS and Para 6(v) [Notes Nos. 49, 51(B)(xiii) and 51(B)(viii)] of CFS refer to loans/advances and investments in subsidiary/associate company(ies) and there are ongoing litigation in respect of their projects and matters are sub-judice. These notes are self-explanatory.

(f) Para 6(f) [Note No. 52] of SFS and Para 6(vi) [Note No. 57] of CFS refer to the fact that the Company was in receipt of Summons from Special Court for Prevention of Money Laundering Act (PMLA), Mumbai as one of the accused in connection with a complaint filed by Enforcement Directorate. The Hon''ble Court has also summoned the two KMPs of the Company as the accused as per the said complaint. The matter in relation to the Company and the KMPs involves certain advances given by the Company in ordinary course of its business to another Company which was subsequently refunded upon cancellation of the undertaking. The matter is sub-judice and the Company does not expect any financial liability.

(g) Para 6(g) [Note No.54] of SFS and Para 6(vii) [Note No. 54] of the CFS: With regard to the provisional attachment upheld by the Enforcement Directorate (ED), involving bank balance, two flats belonging to the Company and loans given to a subsidiary company of Marine Drive Hospitality & Realty Private Limited (Formerly D B Hospitality Private Limited), these relates to the 2G case in which the Managing Directors/KMPs of the Company have been charged with commission of offences based on the investigation by CBI. The Adjudicating authority has taken over the bank balance of Rs. 68.93 Lakhs and has been given ROCCP shares Series A & C of Marine Drive Hospitality & Realty Private Limited, in the name of the Company for Rs. 2578.24 lacs. The attachment order is contested by the Company in the Appellate tribunal. The matter is sub-judice. The Company is confident that the outcome of the cases will have no adverse impact on the Company and its functioning.

(h) Para 6(h) [Note No. 55] of SFS: This note is self-explanatory. The AOPs in which your company is a member have projects for execution on which expenses have been incurred by the said AOPs. Pending the triggering of the threshold limits and recognition of income in the said projects, the expenses incurred on the projects have been carried to their balance sheets as losses and have not been apportioned to the members of the AOP. These projects would fetch adequate profits to wipe out the losses in the AOP and would be apportioned to the members of the AOP at a later date when incomes are recognized.

(i) Para 6(i) [Note Nos. 46(A)(i) to (iii)] of SFS and Para 6 (viii) [Note Nos. 51(A)(i to iii)] of CFS refer to disclosures in the audited financial statements of the firm M/s Dynamix Realty regarding outstanding receivables which is good for recovery and the allegations in the 2G Spectrum case which is sub-judice and matter towards liability of property tax of the Firm with MCGM/SRA is sub-judice, adjustment entries shall be passed once the outcome is finalized and regarding the Firm has not made provision for contested income tax liability since based on the interpretation of law being supported by decisions of the appellate authorities, the Management of the Firm is of the opinion that the demands shall be deleted.

(j) Para 6(j) [Note No.46 (B)(ii)] of SFS and Para 6 (ix) [Note No. 51(A)(ix)(b)] of CFS refer to Order dated 30.01.2018 passed by Hon''ble Delhi High Court in the matter of a firm in which Company is a partner and Airport Authority of India (AAI), directing the AAI to conduct Aeronautical Studies of the SRA Project without demolishing the structure and to grant further permissions based on Aeronautical Studies. Accordingly, the said firm is awaiting final report of Aeronautical Studies from AAI for grant of additional height clearance for SRA buildings and subsequent to which the firm can start the construction activity of the SRA project.

(k) Para 6(x) [Note no. 51(B)(iv)] of CFS refers to a writ petition filed against the Company and government authorities by Jijamata Nagar Sankalp Co-op. Housing Society and the matter is detailed in the said note. The Company is constantly observing the changes and progress to the Draft DP 2034 and is confident that the Final Plan would remove all the anomalies.

(l) Para 6(xi) [Note no. 14.5] of CFS refers to the mode deployed by a Subsidiary Company for completing the Project and the financial implications arising there from which inter-alia include claim of interest on the said subsidiary company, which has not been accepted. The said note is self-explanatory.

(m) Para 6(xii) [Note no.30.6(i)] of CFS refers to the classification of amount received by subsidiary company from Yes Bank Limited, as short term borrowing resulting on account of cancellation of units allotted to parties to whom in principle the loans were granted. The said note is self-explanatory.

(n) Para 6(xiii) [Note no.21.4 to 21.7] of CFS refers to interest free refundable security deposits were paid to the aggregators for acquiring land. The management is confident that the transaction shall materialize and if not, then the same shall be repaid back.

(o) Para 6(xiv) [Note no. 48(A)R, 51(B)(ii), 51(B)(xvii) and 51(B)(xviii] of CFS refers to cross securitization provided/loans granted. As mentioned in the said note, your Directors have again state that granting of cross securitization will not have any financial implications on the subsidiary company and loans granted are good for recovery.

(p) Para 6(xv) [Note no. 56] of CFS: Auditors have referred to status of various ongoing projects, recognition of expense and income and the realizable value of the cost incurred, are as per the judgment of management of the respective entity and certified by their technical personnel and being of technical nature, have been relied upon by Auditors. Your Directors have to state that the estimating costs of every project are reviewed periodically and revised whenever required. The consequential effect of such revision is considered in the year of revision and in the balance future period of the project.

(q) Para 6(xvi) [Note no. 19.6] of CFS refers to certain debts and all the right, title and interest in and to the said debts along with the underlying security interest acquired by one of the subsidiary companies by way of assignment from Yes Bank Limited by executing Deed of Assignments. Your Directors believe that the said debts are adequately secured with the underlying security interest (including certain immovable properties) and the same debts are good for recovery. The status on the matter is detailed in the said Note, which is self-explanatory.

(r) Para 6(xvii) [Notes no.30.5 and 31.2] of CFS refers to the status of amounts due to Housing Development Infrastructure Limited (HDIL), which is self-explanatory.

(s) Para 6(xviii) [Note no. 51(B)(xix)] of CFS refers to the status of the cluster development project as also the opinions/ judgments with respect to the amounts advanced in the preceding years in relation to the said project as detailed in the said Note, which is self-explanatory.

(t) Para 6(xix) [Note no. 51(B)(ix)] of CFS refers to the status of the case pending before the Hon''ble High Court of Bombay against the arbitrary cancellation of Tender by P.W. Department. The case is still pending for admission before the Hon''ble High Court. Since the matter was sub-judice and in the absence of clarity, the Company had written off the carrying value of Project Work In Progress in the preceding financial year. There is no change in the status of the case during the year.

(u) Para 6(xx) [Note no. 51(B)(xxiii)] of CFS refers to the status of land owned by the subsidiary company as well as the opinion of the holding company with respect to its value and other related matters. Your Directors have to state that one of the subsidiary companies owns land and is yet to conceptualize real estate project on the said land and in the opinion, the value of land is at least equal to its investment and loans granted to the subsidiary company.

(v) Para 6(xxi) [Note no. 51(B)(xxii)] of CFS refers to the implications, if any, of outstanding dues from a debtor to whom a unit was sold consequent to the arrangement entered into by a subsidiary company with the Holding Company. The said note is self-explanatory.

(w) Para 6(xxii) [Note no.21.8] of CFS refers to accrual of revenue in respect of a subsidiary company, on execution of Memorandum of Understanding for granting development rights of land and other consequential matters thereto. The said note is self-explanatory.

(x) Para 6(xxiii) [Note no. 35.2] of CFS refers to accrual of revenue in respect of a subsidiary company, on execution of Memorandum of Understanding for granting development rights of land and other consequential matters thereto. Your Directors have to state that based on the percentage of work completion and keeping in view the amount of profits/ losses recognized in the preceding years, the subsidiary company recognized loss from the project. Further, the project costs and saleable area are as certified by the subsidiary Company.

(y) Para 6(xxiv) [Note no. 51(B)(xv)] of CFS refers to financials of Turf Estate JV, an Association of Persons (AOP), where the Company is one of the two partners. Such financial statements of the AOP are yet to be approved by the other partner, as the proposal to change profit/loss arrangement to area sharing framework in the said AOP is under negotiation with the other partner.

(z) Para 6(xxv) [Note no. 19.5] of CFS refers to loans advanced by a subsidiary company to a related party which is stated to be good for recovery by them.

(aa) Para 6(xxvi) [Note no. 60(C)(II)4.4] of CFS refers to acquiring equity shares of Milan Theatres Private Limited by a step down subsidiary company and permanent diminution in value thereof. The said note is self-explanatory.

(ab) Para 6(xxvii) [Note no. 19.9] of CFS refers to granting of loans by step down subsidiary company, which includes loan to a third party subject to confirmation. The said Step down subsidiary company is hopeful that the said the loans are goods for recovery.

(ac) Para 6(xxviii & xxix) [Notes no. 48(A)B and 48(A)A, respectively] of CFS refers to non-provision of disputed service tax & income tax by a step down subsidiary company. The said step down subsidiary company is hopeful that positive outcome will come and therefore provisions are not made.

(ad) Para 6(xxx) [Note no. 48(A)S] of CFS refers to the associate company with regards to notice received from land owner in respect for cancellation of Development Agreement. Your Directors have to state that the associate company is in the process of taking legal opinion and replying to the said notice.

(ae) Para 6(xxxi) [Note no. 51(A)(v)] of CFS refers to advances granted by a Joint Venture for acquiring occupancy rights to various parties including associates amounting to Rs. 5,805.87 lacs in the consolidated financial statements. The said note is self-explanatory.

(af) Para 6(xxxii) [Note no. 51(A)(vii)] of CFS refers to compensation to occupants and accounting of compensation by one of the joint ventures of the Company, which are self-explanatory.

(ag) Para 6(xxxiii) [Note No. 51(A)(viii)] of CFS relates to project work in progress in an Associate company where such company is currently under process of resolving the internal disputes among the partners of the firm viz-a-viz the Development Agreement, for which appeals have been filed. The management of the associate company expects favorable outcome in the matter and accordingly, is of the opinion that the land shall be available to such company for development.


In the absence of profits, your Directors do not recommend dividend for the current year under review.

Subsidiaries, Associate companies and Joint ventures:

During the year under review, Milan Theatres Private Limited (“Milan”) has become an Associate company (32.75%) of Horizontal Realty & Aviation Private Limited, which is subsidiary (62.85%) of Nine Paradise Erectors Private Limited, which is a wholly owned subsidiary (100%) of the Company. In other words, Milan has become Associate company of the Company with effect from 06th September, 2017.

Further, the Company has increased its stake in DB (BKC) Realtors Private Limited (from 38.82% to 57.17% of total share capital of DB BKC) and acquired 265707 (i.e 18.35% to total share capital of DB BKC) nos. of Compulsory Convertible Preference Shares (CCPS) of DB (BKC) Realtors Private Limited

The details of Subsidiary/Associate companies are provided in extract of Annual Return (Form No. MGT 9), which forms part of this Directors'' Report (Annexure A).

The Consolidated financial statements have been prepared in accordance with the provisions of the Companies Act, 2013, applicable Ind AS and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 and include the financial information of its subsidiaries/associates and joint venture entities / partnership firms in which your Company holds stake. The audited financial statements of the subsidiary companies will be available for inspection by any member at the registered office of the Company and at the Company''s website Copies of the audited financial statements of the subsidiaries can be sought by any member by making a written request in this regard.

In accordance with the provisions of Section 129(3) of the Act read with the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company. The statement also provides the details of performance and financial positions of each of the subsidiaries

Management Discussion and Analysis Report:

The Management Discussion and Analysis Report for the year under review as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section forming part of this Annual Report (Annexure B).

Corporate Governance and Shareholders Information:

In compliance with the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Secretarial Auditors on its compliance, forms an integral part of this report. (Annexure C)

Fixed Deposits

During the year under review, your Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 including any statutory modification(s) or re-enactment(s) for the time being in force.

Directors and Key Managerial Personnel (KMPs) 1. Directors retiring by rotation

In terms of Section 152 of the Companies Act, 2013 and the Articles of Association of the Company. Mr. Vinod Goenka (DIN:00029033) and Mr. Shahid Balwa (DIN:00016839), retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment.

2. Appointment/ Resignation of Independent Director

Mr. Janak Desai (DIN:03527571) vacated the office of Independent Director with effect from 14th September, 2017 pursuant to Section 167 (1)(b) of the Companies Act, 2013.

Mr. Devender Kumar Vasal (DIN: 06858991) was appointed as Additional Independent Director with effect from 14th February, 2018. He will hold office upto date of the forthcoming Annual General Meeting (AGM) but is eligible for the appointment as an Independent Director for a tenure upto five years.

As per the provisions of the Companies Act, 2013, Independent Directors have been appointed for a period of five years and shall not be liable to retire by rotation.

3. Independent Directors Statement:

All independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and were placed at the Board Meeting.

4. Key Managerial Personnel

Mr. Anantharam Anil Kumar resigned as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 15th November, 2017 and Mr. S.A.K. Narayanan has resigned as Company Secretary (Key Managerial Personnel) with effect from 5th December, 2017.

In terms of Section 203 of Companies Act, 2013, the Board has appointed Mr. Jignesh Shah as Company Secretary (Key Managerial Personnel) of the Company with effect from 5th December, 2017 and Mr. Asif Balwa, who is a part of Promoter Group, as the Chief Financial Officer (Key Managerial Personnel) of the Company with effect from 14th February, 2018.

Mr. Vinod Goenka, Chairman and Managing Director and Mr. Shahid Balwa, Vice Chairman and Managing Director, Mr. Asif Balwa, Chief Financial Officer and Mr. Jignesh Shah, Company Secretary of the Company are Key Managerial Personnels as per the provisions of the Companies Act, 2013

Performance Evaluation of the Directors, Committees and Board

The performance of the Directors is evaluated on the basis of their contributions at the meetings, strategic inputs for the performance and growth of the Company among others. The Directors have carried out performance evaluation on annual basis of Directors, Committee and the Board. The Nomination and Remuneration Committee of the Board has laid down the performance evaluation framework under which performance of every Director is evaluated. The framework also provides the manner in which the Directors as a collective unit in the form of Board Committees and the Board function and perform.

Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. However, the Company, being a company engaged in the business of providing infrastructural facilities is exempt from the applicability of the relevant provisions of the Companies Act, 2013.

Contracts or Arrangements with Related Parties

All related party contracts/arrangements/transactions as specified in Section 188 (1) of the Companies Act, 2013 entered during the financial year were in the ordinary course of the business of the Company and were on arm''s length basis. During the year, the Company has not entered into any material contracts/arrangements/transactions as specified in Section 188 (1) of the Companies Act, 2013. There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel’s or other persons which may have a potential conflict with the interest of the Company.

All such Related Party Transactions are periodically placed before the Audit Committee for approval, whenever applicable. The details of the contracts or arrangements with related parties for the financial year under review are given in the notes to the financial statements.

The policy on materiality of Related Party Transaction and also on dealing with Related Party Transaction as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company and the link for the same is http://www.dbrealty. Policy%20of%20Related%20Party%20Transaction.pdf

Internal Financial Control Systems and their Adequacy

The Company has adequate system of internal control to safeguard and protect from loss, unauthorized use or disposal of its assets. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business. Your Directors have also appointed a professional firm to examine the adequacy of these controls and the work of designing controls, documenting risks control matrix for each area of business operation and implementation thereof.

During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls and the Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate.

Remuneration Policy

The Nomination and Remuneration Policy provides for appropriate composition of Executive, Non-Executive and Independent Directors on the Board of Directors of your Company along with criteria for appointment and remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under sub-section (3) of Section 178 of the Companies Act, 2013. The remuneration paid to the Directors is as per the terms laid out in the Nomination and Remuneration Policy of your Company.

Vigil mechanism:

Pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The policy comprehensively provides an opportunity for any employee/Director of the Company to raise any issue concerning breaches of law, accounting policies or any act resulting in financial or reputation loss and misuse of office or suspected or actual fraud. The policy provides for a mechanism to report such concerns to the Audit Committee through specified channel. The Vigil Mechanism Policy has been uploaded on the website of the Company at http:// Blower.pdf

Fraud Reporting

During the year under review, no instances of fraud were reported by the Statutory Auditors and Secretarial Auditors of the Company.

Risk Management Policy

The Board of Directors reviews the risk management policy from time to time and the said policy aims at enhancing shareholders'' value and providing an optimum risk-reward trade off. The risk management approach is based on a clear understanding of the variety of risks that the organization faces, disciplined risk monitoring and measurement and continuous risk assessment and mitigation measures.

Corporate Social Responsibility Committee

As per the provisions of Section 135 of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee constituted by the Board of Directors exists.

For details of the composition of the Committee, the CSR policy and other relevant details that are required to be disclosed under the provisions of Section 134(3)(o) of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, kindly refer Annexure D thereto, which forms part of this report.

Extracts of Annual Return

Pursuant to sub-section 3(a) of Section 134 and sub-section (3) of Section 92 of the Companies Act 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014 the extract of the Annual Return as at 31st March, 2018 is annexed and forms part of this report. (Annexure A)

Number of Board Meetings during 2017-18

The Board met Five (5) times during the financial year 2017-18 and the details are mentioned in the Corporate Governance Report which is annexed to the Directors Report.

Directors’ Responsibility Statement

In terms of provisions of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

a) In the preparation of the annual accounts for the year ended 31st March, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) they 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 on 31stMarch, 2018 and of the loss of the Company for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) they have prepared the annual accounts on a going concern basis.

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Familiarization Programs for Independent Directors

The various programs undertaken for familiarizing Independent Directors with the functions and procedures of the Company are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

Committees of the Board

The Company has five (5) Committees of the Board which have been established as a part of the best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Company has following Committees of the Board:

1. Audit Committee

2. Corporate Social Responsibility Committee

3. Nomination and Remuneration Committee

4. Finance and Investment Committee

5. Stakeholders Relationship Committee

The composition of the committees of the Board of Directors is stated in the Corporate Governance Report annexed to this Report. Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''the Rules''), the application money of Rs. 6132/- outstanding in the “Refund Account D B Realty Public Issue” which remained unclaimed for seven consecutive years from the date of issue and due for refund was transferred to Investor Education and Protection Fund on 4th March, 2017.

Statutory Auditors

M/s Haribhakti & Co. LLP, Chartered Accountants, Mumbai (Firm Registration No. 103523W) were appointed as the Statutory Auditors of the Company in terms of Section 139 of the Companies Act, 2013 for second term of 5 (five) consecutive years commencing from conclusion of 10th Annual General Meeting upto the conclusion of the 15th Annual General Meeting of the Company to be held in the year 2021, subject to the ratification by shareholders of the Company at every Annual General Meeting. However, the Companies (Amendment) Act, 2017, has removed the requirement of the Annual ratification of appointment of Statutory Auditors of the Company by the shareholders. The Board hence recommends ratification of appointment of M/s Haribhakti & Co. LLP as Statutory Auditors of the Company for the remaining term of 3 (three) years from the Financial Year 2018-19 to 202021 at the ensuing Annual General Meeting.

Secretarial Standards

The Company has complied with the applicable Secretarial Standards notified by the Institute of Company Secretaries of India. Secretarial Auditors and Secretarial Audit Report

Pursuant to Section 204 of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Company had appointed M/s Vicky Kundaliya & Associates, Practicing Company Secretaries, Mumbai as its Secretarial Auditors to conduct the secretarial audit of the Company for the FY 2017-18.The Company has provided all assistance and facilities to the Secretarial Auditor for conducting their audit. The Report of Secretarial Auditor for the FY 2017-18 is annexed to this report (Annexure E).

The said report does not contain any qualifications or adverse remark except the following:

a) The Company appointed a new Independent Director beyond the prescribed period as per Section 149 of the Companies Act, 2013 read with relevant rules and Regulation 25 of SEBI (LODR) Regulations, 2015. As already mentioned in the report, your Directors have to state that the office of Mr. Janak Desai as an Independent Director, was automatically vacated pursuant to section 167(1)(b) of the Companies Act, 2013. The Company had immediately initiated the process of inducting new Independent Director on the Board. The Board subsequently appointed Mr. Devender Kumar Vasal as new Independent Director and re-constituted the Committees wherever required and thus, the Company complied the provisions of the said section 149 of the Companies Act, 2013 and Regulation 25 of SEBI (LODR) Regulations, 2015.

b) The Board of Directors approved and thereafter the Company submitted the Financial Results for the Quarter and Year ended 31st March, 2017 beyond the prescribed period as per Regulation 33 of SEBI (LODR) Regulations, 2015, your Directors have to state that in compliance with Regulation 33 of SEBI (LODR) Regulations, 2015, the Company held the Board Meeting on 30th May, 2017 to consider and approve audited financial result for the Quarter and Year ended 31st March, 2017. However, in view of the requirement of compilation of requisite data for consolidation under new Ind AS requirements, which was introduced for the first time in financial year 2016-17 and number of entities to be consolidated, the Audit Committee and the Board in consultation with Statutory Auditors felt that few more days would be required to review the consolidated financial statements and complete the audit process. Thus, the said Board meeting was adjourned and held again on 9th June, 2017 for approving audited financial results for the Quarter and year ended 31st March, 2017 to ensure completeness of consolidated audit process based on the information compiled under new Ind AS requirements.

Statutory Disclosures 1. Conservation of Energy, Technological Absorption, Foreign Exchange Earnings and Outgo

Your Company is not covered by the schedule of industries which are required to furnish the information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule (8) of the Companies (Accounts) Rules, 2014.

The Company has not imported any technology or carried out any business of export or import and therefore the disclosure requirement against technology absorption are not applicable. The details of Foreign Exchange earnings and outgo are as under (Standalone Amounts):



(Rs. in lacs)


(Rs. in lacs)

Earnings in Foreign Currency



Expenditure in Foreign Currency

Foreign Travel



Business Promotion





2. Particulars of Employees

In accordance with the provisions of Section 197 (12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of the Managerial Personnel) Rules, 2014, the names and other particulars of the employees are to be set out in the Directors'' Report as an addendum. However, in line with the provisions of Section 136 (1) of the Act, the Report and Accounts herein are being sent to all the members excluding the above information. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. Since no remuneration except sitting fees has been paid to any Director, the ratio of such remuneration to the median employees'' remuneration has not been stated. During the year no increase in remuneration of any Director or KMP or manager has been effected. The number of permanent employees at the end of the financial year was 61. The other remuneration details of Directors/KMPs/ employees are disclosed in Annexure F to this report.

Other Disclosures:

Your Company has not issued any shares with differential voting rights.

Your Company has not issued any sweat equity shares.

There was no revision in the financial statements.

There were no material changes or commitments affecting the financial position of the Company between the financial year end and date of this report.

There were no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

The Company has not received any complaints under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Company''s operations in future. However, during the year under review, the Reserve Bank of India has passed a Compounding Order dated 9th June, 2017 for delay in reporting / filing of some forms in terms of Paragraph 9(1)(A) and 9(1)(B) of Schedule I to FEMA, (Transfer of Issue of Security by a Person Resident Outside India) Regulation, 2000 during the period between 2007-2009 and therefore, the Company has paid the monetary penalty of Rs. 4,20,000/- to RBI pursuant to the said Order.


Your Directors wish to place on record their appreciation to the Banks, Financial Institutions, Government Authorities, customers and other business associates for their support and co-operation and wish to place on record their gratitude to the shareholders and the investors for their trust, support and confidence in the Company. The Board also places on record its appreciation for the dedication displayed by employees at all levels.

On behalf of the Board of Directors For D B Realty Limited

Shahid Balwa Jayvardhan Goenka

Mumbai, Vice-Chairman &

Managing Director Director

28th May, 2018 (DIN:00016839) (DIN:03546392)

Director’s Report