98 Th ANNUAL REPORT 2010-2011 - Simplex-group

SIMPLEX REALTY LIMITEDEXPLANATORY STATEMENT UNDER SECTION 173(2) OF THE COMPANIES ACT, 1956 AND FORMING PARTOF THE NOTICE DATED MAY 14, 2011Item No. 5As per the provisions of Section 224A of the Companies Act, 1956, if not less than twenty five percent of the subscribedshare capital of any company is held by any public financial institution or a government company or a nationalisedbank or an insurance company carrying on general insurance business, the appointment or re-appointment ofStatutory Auditors of the Company shall be made by passing a Special Resolution.Since more than 25% of the subscribed share capital of your Company is held by public financial institutions, it isnecessary to pass a Special Resolution for re-appointment of retiring Auditors M/s. Dayal and Lohia, CharteredAccountants as Statutory Auditors of the Company.The Directors commend the Special Resolution as set at Item No. 5 of the accompanying Notice for your approval.None of the Directors is concerned or interested in the said resolution.Item No. 6The Remuneration Committee and Board of Directors at their meetings held on 14th May, 2011, re-appointed ShriNandan Damani as Managing Director of the Company for a period of three years with effect from 29th June, 2011.As per the provisions of Section 198 and 309 (3) of the Companies Act, 1956, the Managing Director of the Company isentitled to get total remuneration upto 5% (including commission) of the net profit of the Company as computed inaccordance with the provisions of section 349 and 350 of the Companies Act, 1956. However in case the Companyhas no profits or its profits are inadequate, the Managing Director of the Company is entitled to get remuneration asprescribed in Schedule XIII of the Companies Act, 1956 subject to the fulfillment of certain conditions .Shri Nandan Damani's present five years term of office as Managing Director of the Company expires on28th June, 2011. During the tenure of Shri Nandan Damani as the Managing Director, the Company has madeconsiderable progress in all the spheres and has since acquired good name and reputation in business.The Board of Directors, based on the recommendations of Remuneration Committee had approved an increase intotal remuneration payable to Shri Nandan Damani from the present Rs. 24,50,000/- per annum to Rs.42,00,000/- perannum as per the following details:(I)Remuneration:(i)Salary:The Proposed remuneration is Rs.3,50,000/- per month, payable as under:(a) Basic Salary: Rs.2,18,750/- per month.(b) House Rent Allowance: Rs 1,09,375/- per month.(c) Perquisite as shown below upto Rs 21,875/- per month.(ii)Perquisites: Monetary value of the perquisites shall be restricted to the aforesaid amount or such otheramount as may be permissible according to law from time to time in force, and as may be determined by theBoard of Directors.A.In addition to salary, Shri Nandan Damani will be entitled to perquisites and allowances likereimbursement of expenses in respect of gas, electricity and water, furnishing and repairs, medicalreimbursement and leave travel concession for self and his family, club fees, personal accidentinsurance and such other payments in nature of perquisites and allowances as may be decided by theBoard of Directors from time to time.B.Shri Nandan Damani shall also be eligible to the following perquisites which shall not be included in thecomputation of the ceiling on remuneration specified above.4

a) contribution to provident fund, superannuation fund or annuity fund to the extent these eithersingly or put together are not taxable under the Income-Tax Act, 1961,b) gratuity payable at a rate not exceeding half a month's salary for each completed year of service,andc) Leave: One month on full pay and allowances as per Rules of the Company but not exceeding onemonth's leave for every 11 months of service. The leave accumulated but not availed of will beallowed to be encashed at the end of the tenure.C.The Company shall provide a car for use on Company's business and telephone at the residence ofShri Nandan Damani. Shri Nandan Damani will be billed by the Company for personal long distancecalls on telephone and use of car for personal purposes.D.The Managing Director shall not be paid any sitting fees for attending the meetings of the Board ofDirectors or Committees thereof.(iii). Commission: The amount of Commission will be decided by the Board of Directors and payable after theadoption of Annual Accounts by the members of the Company.(II) Other Terms and Conditions:(a) The Tenure of the Managing Director shall be for a period of three years commencing from 29th June, 2011.(b) The Managing Director shall be vested with substantial powers of the Management for day to day affairs ofthe company subject to the supervision and direction of the Board of Directors of the company.(c) The Managing Director will devote his time and efforts for the business of the company.(d) The following disclosures are being made in this Explanatory Statement in compliance with Paragraph 1(B)of Section II in Part II of Schedule XIII to the Companies Act, 1956.(i)General information:(a) The Company is engaged in real estate business.(b) Operational Performance of the company for the financial years 2008-09 and 2009-10 is as follows:Rs. in CroresParticulars2008-092009-10Sales and other Income175.3030.97Profit Before Tax108.5923.4982.6814.53Paid up Equity Capital2.992.99Reserves and Surplus94.21106.13276.4148.60Profit After TaxBasic Earning per Share(c)The Company has not earned any foreign exchange during the financial years 2008- 09 and 2009 -10.(ii) Information about appointee:Shri Nandan Damani is a Bachelor of Science from University of Mumbai. He is working as ManagingDirector of the Company since 29th June, 1993. He looks after the management and administration of theCompany under the overall supervision, control and direction of the Board of Directors. He has wide and richexperience in Real Estate business. He has been associated with the Company for more than 30 years. TheDirectors confidently feel that the Company should continue to avail the services of Shri Nandan Damani5

SIMPLEX REALTY LIMITEDbeing an able, experienced and competent person. Hence the Board of Directors at its meeting held on14th May, 2011 considered it necessary to re-appoint Shri Nandan Damani as Managing Director of theCompany for a further period of three years with effect from 29th June, 2011 subject to the approval ofmembers of the Company.Taking into account the financial position of the Company, trend in the industry and his experience, the termsof his re-appointment and remuneration as set out in the resolution are considered to be just, fair andreasonable. He is key promoter of the Company and owns 6.67% Equity stake in the company as of date.The total remuneration drawn by Shri Nandan Damani for the financial years 2008-09 and 2009-10 wasRs.54,55,000/- each year. Besides his remuneration, he does not have any other pecuniary relationshipwith the company. He is the son of Late Shri S.R.Damani, Ex-Chairman of the Company.(iii) Other information:(a) The nature of the real estate business is such that revenue increase in the year in which there are morebookings. However, in the event of unforeseen circumstances and conditions beyond the control of thecompany, the profitability of the company may also be affected.(b) The Company is looking at new business opportunities in both residential and commercial segment ofthe real estate industry.(c) The Company is expected to perform well in future.(iv) Disclosures:(a) The shareholders are being informed of the remuneration package by way of explanatory statement asgiven above.(b) The Company has only one Executive Director. None of the other Directors draws remuneration otherthan sitting fees and commission, if any.(c) The Board of Directors and the Managing Director have agreed on the terms of employment. Afterobtaining approval from shareholders, the Board will formally execute the agreement with theManaging Director reflecting the terms.The aforesaid Paragraph 1(B) of Section II in Part II of Schedule XIII to the Companies Act, 1956 requires a Companyto obtain consent of the shareholders by way of Special Resolution. The Board of Directors, therefore, recommendpassing of the relevant Special Resolution mentioned at Item No. 6 of the Notice for your approval.Except Shri Nandan Damani, Managing Director and Shri S.K.Somany, Director, none of the Directors is interestedin the said re-appointment and remuneration payable to Shri Nandan Damani as Managing Director.The said Draft Agreement is open for inspection of Members of the Company on all working days prior to the date ofthe Meeting between 10.00 A.M. to 12 Noon at the Registered Office of the Company.The Explanatory Statement together with the accompanying Notice may also be regarded as an abstract of theAgreement and Memorandum of interest u/s 302 of the Companies Act, 1956.By Order of the Board of DirectorsAsish NarayanCompany SecretaryMumbai, May 14, 2011Registered Office:30, Keshavrao Khadye Marg,Sant Gadge Maharaj Chowk,Mumbai 400 0116

NINETY EIGHTH REPORT OF THE BOARD OF DIRECTORSToThe Members,Your Directors are pleased to present the Annual Report, together with the Audited Accounts for the year ended31st March, 2011.FINANCIAL RESULTSTotal IncomeProfit before Interest, Depreciation,Taxation,Prior Period andExtraordinary ItemsLess: InterestLess: DepreciationProfit before Tax, Prior Period and Extraordinary ItemsAdd: Prior Period AdjustmentsLess: Extraordinary ItemsProfit before TaxLess: Provision for Tax (Incl. Wealth Tax)Tax for earlier yearsProvision for Deferred TaxNet Profit after TaxBalance brought forward from previous yearAmount available for AppropriationAppropriationsProposed Dividend on Equity SharesTax on DividendTransfer to General ReserveBalance carried forwardCurrent Yearended31.03.2011Rs.901.01545.31(Rs.in lacs)Previous 537.26800.003,609.60DIVIDENDThe Directors are pleased to recommend for approval of the Members the payment of dividend of Rs.2.50/- per share(i.e.25%) on 29,91,382 Equity Shares of Rs.10/- each of the Company for the year ended 31st March, 2011. The totalcash outflow on account of equity dividend payment, including dividend distribution tax would be Rs.87.20 lacs for thefinancial year 2010-11.OPERATIONSYour Company has reported total income of Rs.901.01 lacs and the net profit of Rs.341.42 lacs during the year ended31st March, 2011.SUBSIDIARY COMPANYDuring the year under review, the Company has acquired 100% shares of Simplex Renewable Resources PrivateLimited (SRRPL) and hence SRRPL became wholly owned subsidiary of the Company. Simplex RenewableResources Private Limited was incorporated on 13th April, 2010, and engaged in renewable energy business.A Statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Company is attached tothe accounts.7

SIMPLEX REALTY LIMITEDIn terms of General Exemption under Section 212(8) of the Companies Act, 1956 granted by Ministry of CorporateAffairs vide Circular No.02/2011 dated 8th February, 2011 and in compliance with the conditions enlisted therein, theAudited Statement of Accounts and the Auditors’ Report thereon for the financial year ended 31st March, 2011 alongwith the Report of the Board of Directors of the Company’s Subsidiary have not been annexed. The Annual Accountsand related documents of the Subsidiary Company shall be kept open for inspection at the Registered Office of theCompany. The Company shall also make available these documents upon request by any member of the Companyinterested in obtaining the same. However, as directed by the said Circular, the financial data of the subsidiary havebeen furnished under ‘Subsidiary Company’s Particulars’ forming part of the Annual Report. Further, pursuant toAccounting Standard AS-21 issued by The Institute of Chartered Accountants of India, Consolidated FinancialStatements presented by the Company in this Annual Report includes the financial information of its subsidiary.NEW PROJECTThe Company is undertaking development of a Residential cum Commercial Complex in western suburb of Mumbaijointly with the land owner on a revenue sharing basis. The Company has obtained Intimation of Disapproval (IOD) forthe project from the concerned authority. Plans have been approved by Municipal Corporation of Greater Mumbai andCommencement Certificate is awaited.FIXED DEPOSITSThe Company has not accepted or renewed any fixed deposits during the year.DIRECTORSAt the Board Meeting held on 14th May, 2011, Shri Nandan Damani was re-appointed as Managing Director of theCompany for a period of 3 years with effect from 29th June, 2011 on the terms and conditions in conformity with theprovisions of Section 198, 309 and Schedule XIII of the Companies Act, 1956 and subject to the approval of themembers in the ensuing Annual General Meeting.Shri M. P. Jatia and Shri V. B. Haribhakti, Directors of the Company who retire by rotation at the ensuing AnnualGeneral Meeting and being eligible, offer themselves for re-appointment.None of the Director is disqualified under section 274 (1) (g) of the Companies Act, 1956.The details of the Directors being recommended for re-appointment are contained in the accompanying notice of theensuing Annual General Meeting.PARTICULARS OF EMPLOYEESInformation in accordance with the provisions of Section 217(2A) of the Companies Act, 1956 read with Companies(Particulars of Employees) Rules, 1975 are annexed hereto.AUDITORSM/s. Dayal and Lohia, Chartered Accountants, hold office as Statutory Auditors of the Company upto the conclusion ofensuing Annual General Meeting of the Company and are eligible for re-appointment. The Company has received aletter from M/s. Dayal and Lohia, Chartered Accountants expressing their willingness and eligibility to act as StatutoryAuditors of the Company under Section 224 (1B) of the Companies Act, 1956, if appointed.CORPORATE GOVERNANCEThe Company has complied with the mandatory provisions of Corporate Governance as stipulated in the ListingAgreement with the Stock Exchange. A separate report on Corporate Governance alongwith the requisite Auditors'Certificate is annexed and forms part of this Annual Report.DIRECTORS' RESPONSIBILITY STATEMENTPursuant to Section 217 (2AA) of the Companies Act, 1956, on the basis of information placed before them, theDirectors state that:(i)in the preparation of the annual accounts, the applicable accounting standards have been followed along withproper explanation relating to material departures, if any;8

(ii)appropriate accounting policies have been selected and applied consistently, and the judgments and estimatesthat have been made are reasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at 31st March, 2011 and of the profit of the Company for the said period;(iii) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventingand detecting fraud and other irregularities;(iv) the annual accounts have been prepared on a going concern basis.STOCK EXCHANGEThe Company's equity shares are listed at Bombay Stock Exchange Ltd. (BSE) and the Annual Listing Fees for theyear 2011-12 has been paid.PARTICULARS OF CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION, FOREIGN EXCHANGEEARNING AND OUTGOConsidering the Company's business activities, the Directors have nothing to report u/s 217 (1)(e) of the CompaniesAct, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 withreference to Conservation of Energy & Technology Absorption.Foreign Exchange Transactions:Foreign Exchange Earnings (Rs.)Foreign Exchange Outgo GEMENTYour Directors place on record their appreciation for the assistance and support extended by all governmentauthorities, financial institutions, banks, consultants, solicitors and shareholders of the company. The Directorsexpress their appreciation for the dedicated and sincere services rendered by the employees of the company.For and on Behalf of the Board of DirectorsNandan DamaniChairman & Managing DirectorMumbai, May 14, 2011Annexure to the Directors' ReportStatement pursuant to the Section 217(2A) of the Companies Act, 1956 read with Companies(Particulars of Employees) Rules, 1975NameShri NandanDamani#Age Designation Qualification# GrossTotalDate of(Years)Remuneration Experience Commencement(Rs.)(Years)of 8.1977Last EmploymentHeldNew Textiles LimitedExcludes provision for gratuity and compensated absences, which is determined on the basis of actuarialvaluation done on overall basis for the company.9

SIMPLEX REALTY LIMITEDMANAGEMENT DISCUSSION AND ANALYSIS REPORT1.INDUSTRY STRUCTURE AND DEVELOPMENTSThe Indian economy has reverted to its pre-crisis growth trajectory and India is expected to be the second fastestgrowing economy in the Asia Pacific Region. The productivity growth rate of Indian economy is estimated to bearound 9-10 % as compared to 8.5% in the fiscal year 2009-10. The real estate development has been thebackbone of such sustained growth and is playing a pivotal role in strengthening the economy of India. It isexpected that Indian economy will continue to remain resilient, stay strong and demand for real estate projectswill gain greater momentum during the fiscal year 2011-2012. Foreign direct investment (FDI) inflows into India inthe real estate sector are estimated to be over Rs.5,100 Crores for the fiscal year 2010-11.The ambit of the Indian real estate sector broadly covers residential, commercial and retail segments. Constantlyupcoming new projects in all segments of real estate have taken the real estate market in India to its new heights.The growth witnessed by the real estate sector is mainly influenced by the GDP growth, increased urbanization,an expanding middle class as well as growth across various sectors such as IT/ITES, retail, consumer durables,automobiles, telecom, banking, insurance, tourism, hospitality and logistics. These trends have reinforcedsubstantial growth in the Indian economy which has stimulated the demand in the real estate space acrossvarious verticals.Residential segmentAlmost 80% of the real estate developed in India is residential in nature. The population boom, rapid urbanizationand rising per capita disposable incomes are just some of the factors that have ensured the continued growth ofthis segment in the country. The year also saw an increased number of launches in the premium segment, mostlyin Mumbai market. However, sale velocities of houses have dropped by end of the year and further hardening ofinterest rates along with high inflationary pre

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