TO MEMBERS FOR THE YEAR ENDED 31ST MARCH 2017
Your Directors are pleased to present the 22nd Annual Report and the Company's auditedfinancial statement for the financial year ended March 31 2017.
The Company's financial performance for the year ended March 31 2017 is summarisedbelow:
|S.No ||Details ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
| || ||(Rs.) ||(Rs.) |
|1 ||Contract receipts ||- ||- |
|2 ||Sales ||- ||- |
|3 ||Other income ||5593987 ||11422511 |
| ||Total ||5593987 ||11422511 |
|4 ||Total expenditure ||9147806 ||7446791 |
|5 ||Interest & finance expenses ||- ||- |
|6 ||Depreciation ||268213 ||240647 |
|7 ||Profit before tax ||(3822033) ||3735073 |
|8 ||Provision for tax || || |
| ||- Current year ||- ||(537323) |
| ||- Deferred Tax (Asset) ||(180827) ||(19417) |
|9 ||Prior year depreciation adj. ||- ||- |
|10 ||Profit after tax ||(3641206) ||3178333 |
|11 ||Add: Surplus from previous year ||203879293 ||200700960 |
|12 ||Amount available for appropriations ||200238087 ||203879293 |
|13 ||Transfer to General Reserve ||NIL ||NIL |
|14 ||Proposed Dividend & Dividend Tax ||NIL ||NIL |
| || ||200238087 ||203879293 |
DIVIDEND AND TRANSFER TO RESERVES
The income earned by the Company during the financial year ended 31st March 2017comprises of financial income from mutual fund investments and interest on loans given.The Company has not earned any profit from operations since the development constructionprojects are under implementation. In view of the above and also
In order to conserve resources for use for acquisition of land and for working capitalyour Directors are not recommending any dividend for the year ended 31st March 2017(previous year dividend paid is nil).
Your Directors have not transferred any amount to any reserves during the year.
MANAGEMENTS DISCUSSION AND ANALYSIS
A. Industry Structure and Developments
Your Company is a building construction company. It undertakes development projects ofresidential and commercial multi-storied apartment complexes. The operations of theCompany are presently confined to localities in and around Chennai and its suburbs.
Your Company reported a total income of Rs.55.94 lakhs during the year ended 31st March2017 as against Rs.114.23 lakhs during the previous year. The Loss after tax wasRs.(36.41) lakhs for the year ended 31.3.2017 as against Profit after tax of Rs.31.78lakhs achieved during the previous year. Substantial part of total income has been earnedtowards interest and dividend from mutual fund units invested out of the surplus fundsavailable with the Company pending deployment in its construction operations.
The value of contract work-in-progress of projects at cost which are at various stagesof progress and on which profits are yet to be recognized as on 31st March 2017 isRs.1945.19 lakhs as against Rs.1455.56 lakhs during the previous year and the same isdisclosed as inventories in the Balance sheet as on 31st March 2017.
C. Segmentwise Performance
Your Company undertakes construction projects at Chennai and its suburb. The activitiesof your Company falls under single segment namely Construction of Buildings (Residential& Commercial).
Your Company is presently executing the development and construction of multi-storiedresidential luxury apartments at Woods road abutting mount road. The construction hasprogressed considerably. Your Company is in the process of marketing the apartments.However due to factors relating to demonetisation and other developments there has beena tepid response from the customers.
Your Company is also developing another property in the suburb of Chennai forconstruction of commercial and / or residential space.Your Company owns landed propertiesat Sholinganallur Chennai and at Arcot Dist Tamilnadu wherein it will be launchinglarge scale construction projects for building residential or commercial complexes at anopportune moment.
The growth in the residential construction sector was considerably impacted due touncertainties brought about by fast changing economic developments political instabilityand regulatory changes. Customers were taking time to come to grip with the changedreality with the result that marketing of the housing stock available with the company hasbeen affected. Materials availability and cost escalation have resulted in delayedexecution of projects.
Your Company will be concentrating in the execution of the existing projects on hand.The premium luxury apartments that are being built by your company at the heart of thecity is expected to be received well in the market.
F. Internal Control Systems
Your company has a proper and adequate system of internal controls to ensure that allassets are safeguarded and protected against loss from un-authorised use or disposition.
G. Human resources and industrial relations
Your company has well qualified and experienced technical financial and administrativestaff to cater to its business requirements. The relations with the employees of thecompany remained cordial throughout the year.
Your Company has not issued any financial instruments requiring to be rated by creditrating agencies during the year.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company does not have any subsidiary joint venture or associate companies.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors state that: i. in the preparation of the annual accounts for the yearended March 31 2017 the applicable accounting standards read with requirements set outunder Schedule III to the Act have been followed and there are no material departuresfrom the same; ii. the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at March 31 2017 andof the profit of the Company for the year ended on that date; iii. the Directors havetaken proper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting fraud and other irregularities; iv. the Directors haveprepared the annual accounts on a 'going concern' basis; v. the Directors have laid downinternal financial controls to be followed by the Company and that such internal financialcontrols are adequate and are operating effectively; and vi. the Directors have devisedproper systems to ensure compliance with the provisions of all applicable laws and thatsuch systems are adequate and operating effectively.
Your Company has complied with all the material requirements of Corporate Governanceprescribed under Securities & Exchange Board of India (Listing Obligation andDisclosure Requirements) Regulations 2015. A report on Corporate Governance as requiredunder regulation 34(3) read along with Schedule V of the said regulation is annexed and itforms part of this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
The Related Party Transactions which was considered material as per the policy adoptedby the Company and for which the Company has already obtained the members approval at theprevious AGM is disclosed in the Form AOC2 annexed to this report. Other than this theCompany had not entered into any contract arrangement or transaction with related partieswhich could be considered material in accordance with the policy of the Company onmateriality of related party transactions.
The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board was put up on the website of the Company atwww.narendraproperties.com Your Directors draw attention of the members to Note17 :Significant Accounting Policies and Explanatory Statement - No. (3) (1) to the financialstatement which sets out related party disclosures.
Your Directors have constituted a Risk Management Committee (even though it is notrequired under SEBI (LODR) Regulations) which has been entrusted with the responsibilityto assist the Board in framing and overseeing risk management policy and its periodicalreview implementation and taking of pre-emptive corrective actions as may be deemednecessary. Your Company has adequate risk management infrastructure in place capable ofaddressing risks faced by the company both internal and external.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference tofinancial statements. During the year no reportable material weakness has surfaced withregard to those internal controls in place.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Independent Directors Mr John K John and Mr R Subrahmanian and the Non-IndependentDirector Mr Mahendra Maher have resigned as Directors due to their other pre-occupationswith effect from 9th August 2016. Your Board wishes to thank them for their services andguidance to the company right from its inception. The Managing Director Mr Narendra CMaher has resigned as Managing Director in keeping with his desire to relinquish wholetimeresponsibilities. He will however continue as a Non-Independent Director on the Board ofthe Company. Your Board wishes to place on record the wholesome contribution made by MrNarendra C Maher in steering the Company to its present status right from the day ofincorporation of the Company.
The Wholetime Director & Chief Financial Officer (WD & CFO) Mr ChandrakantUdani has resigned as WD & CFO and also as a Director on the Board of the Company witheffect from 9th August 2016 due to his other personal pre-occupations. The Board wishes toplace on record its appreciation for the services rendered by him to the Company duringhis tenure.
The Director - Operations Mr Chirag N Maher was promoted and appointed by the Board ofDirectors on recommendation of the Nomination & Remuneration Committee as theManaging Director of the Company for a period of five years with effect from 9th August2016 to 8th August 2021. The appointment of Mr Chirag N Maher as Managing Director and theremuneration payable to him was duly approved by the members at the ensuing 21st AGM.
Your Directors have appointed Mr Jitesh D Maher as Chief Financial Officer of theCompany with effect from 9th August 2016. Mrs Maduri Mundhra is the Company Secretary andthe Compliance officer of the Company. Your Directors Mr Narendra C Maher and Mr NarendraSakariya retire by rotation at the ensuing Annual General meeting and being eligible areoffering themselves for re-appointment.
The Company has received declarations from each of the Independent Directors of theCompany u/s 149 (7) of the Companies Act 2013 confirming that they meet the criteria ofindependence as prescribed u/s 149 (9) of the Companies Act 2013.
A familiarisation program was conducted for the Independent Directors wherein theroles rights responsibilities of the Independent Directors the business model of thecompany and the industry related developments was apprised and presented to them. Thedetails of the familiarisation program conducted for Independent Directors Policy forselection of Directors and determining Directors independence Remuneration Policy forDirectors Key Managerial Personnel and other employees are also put up on the website ofthe Company at www.narendraproperties.com
AUDITORS & AUDITORS REPORT
The report of the Statutory Auditors M/s Sanjay Bhandari & Co. CharteredAccountants Chennai is annexed to this report. The Auditors Report does not contain anyqualification reservation or adverse remarks.
The members have at the 21st Annual General Meeting held on 27th September 2016appointed M/s SANJAY BHANDARI & CO. Chartered accountants as Statutory Auditors tohold office until the conclusion of the ensuing 22nd Annual General Meeting.
The Statutory Auditors M/s SANJAY BHANDARI & CO. Chartered accountants shall notbe eligible to re-appointed as Statutory Auditors of the Company u/s 139(2) Companies Act2013 since they had already completed two consecutive terms of five years as Auditors ofthe Company during the prescribed period.
The Company has received a Notice from a shareholder proposing the appointment of M/s AJ DEORA & ASSOCIATES (Registration No. FRN : 000711S) Chartered Accountants GoldenEnclave 2nd Floor 184 Poonamallee High Road Chennai - 600 010 as Statutory Auditorsof the Company u/s 139(1) of the Companies Act 2013 to hold office for a period of fiveyears from the conclusion of the ensuing 22nd AGM to the conclusion of the 27th AGMscheduled to be held during the calendar year 2022. If appointed as Statutory Auditors u/s139(1) of the Companies Act 2013 by the members of the company at the ensuing 22nd AGMM/s A J DEORA & ASSOCIATES (Registration No. FRN : 000711S) Chartered AccountantsGolden Enclave 2nd Floor 184 Poonamallee High Road Chennai - 600 010 shall beauditing the Financial Statements of the Company for all the financial years endingbetween the period 1st April 2017 to 31st March 2022.
The Board has appointed Mr A M Gopikrishnan Practising Company Secretary to conductSecretarial Audit for the financial year 2016-17. The Secretarial Audit Report for thefinancial year ended March 31 2017 is annexed to this report.
Mr R Mugunthan Independent Practicing Chartered Accountant is the Internal Auditor ofthe Company as required under section 138 of the Companies Act 2013. The Internal Auditorreports to the Audit Committee and the periodical reports submitted by him are reviewed bythe Audit Committee and the Board. No adverse findings were reported by the InternalAuditor during the year.
Corporate Social Responsibility
Your Company is not falling within the financial criteria laid down under section135(1) of the Companies Act 2013 and as such is not under obligation constituteCorporate Social Responsibility committee and undertake CSR activities.
The Audit Committee constituted by the Board satisfies the requirements prescribedunder section 177 of the Companies Act 2013 and the SEBI (LODR) Regulations. All therecommendations made by the Audit Committee during the year have been accepted by theBoard.
The Company has put in place a vigil mechanism in order to facilitate Directors andEmployees to report on genuine concerns. The Whistle Blower policy adopted by the Companyand the Vigil Mechanism as a part of the said policy has been put up on the website of theCompany at www.narendraproperties.com
Meetings of Board
During the year five meetings of the Board of Directors were held. The dates on whichthe Board meetings were held and the attendance of the Directors therein is furnished inthe Corporate Governance Report.
Particulars of Loans given Investments made Guarantees given and securities provided.
The particulars of Loans given investments made and the purpose for which the loangiven is proposed to be utilised by the recipient is furnished in Note 17 : SignificantAccounting Policies and Explanatory Statement - No. (3) (2) to the financial statements.
The Company has not given any guarantees and has not provided any security during theyear.
Conservation of energy technology absorption foreign exchange earnings and outgo.
As the Company is basically a construction company the Provisions of Sec. 134 (3) (m)of the Companies Act 2013 so far as the information relating to conservation of energyand technology absorption is not applicable to the Company. The Company has not earned anyrevenue in foreign exchange and it has also not incurred any expenditure in foreigncurrency during the year.
Extract of Annual Return
The extract of Annual Return as on 31st March 2017 in the prescribed Form MGT9 isannexed to this report.
Particulars of Employees and related disclosures
In terms of the requirements of Section 197(12) of the Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 your Directors wish to state that none of the employees aredrawing remuneration in excess of the limits set out in the said rules.
Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 annexed to this report.
Employees Stock Option Scheme
The Company has not formulated any Employees Stock Option scheme.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.
The Company has in place Anti Sexual Harassment Policy in line with the requirements ofthe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. All employees (permanent contractual temporary trainees) are covered under thispolicy. The Company has not received any complaints under the said Act during the year.
Your Directors do not have anything to report or disclose on the following items sincethere were no transaction relating to them during the year: i. No deposits were acceptedattracting the provisions of section 73 - 76 of the Companies Act 2013. ii. The Companyhas not issued any equity shares during the year with differential rights as to dividendvoting or otherwise. iii. The Company has not issued any shares (including sweat equityshares) to any of its employees during the year. iv. The Company does not have anysubsidiary Joint venture or associate companies and as such the Managing Director / Wholetime Directors receiving any remuneration from such companies does not arise. v. Nosignificant or material orders were passed by the Regulators or Courts or Tribunals whichimpact the going concern status and Company's operations in future. vi. There were nomaterial changes and commitments affecting the financial position of the company whichhave occurred between 31st March 2017 and the date of this report. vii. The Board hasreviewed the system in place to monitor compliance with all the applicable laws relatingto Companies domain of operation and it has not come across any material non-compliancewith such laws during the year.
The registered office of the Company has been shifted to the following premises witheffect from 11th July 2016:
Makanji House 2nd Floor No.49 (Old No.25) Barnaby road Kilpauk Chennai-600010 Ph :044-42696600 / 49586600 / 26446600 / 26476600 Email: email@example.com Website:www.narendraproperties.com
Your Directors take this opportunity to thank the various Governmental authorities theCompany's Bankers Bank of Baroda HDFC Bank Limited Kilpauk Branch Tamilnad MercantileBank Limited and all the customers suppliers and contractors who have supported theefforts of the Company at every critical stage.
Your Directors also wish to place on record the dedicated services rendered by theemployees of the Company at all levels.
| ||By Order of the Board |
| ||For and on behalf of the Board of Directors |
|PLACE : CHENNAI ||S RAMALINGAM |
|DATED: 16TH AUGUST 2017 ||CHAIRMAN |
ANNEXURES FORMING PART OF BOARDS REPORT:
Annexure I: Form AOC2 - Disclosure on Related Party transactions.
Annexure II: Corporate Governance Report (including Company Secretary Certificate &other certificates annexed to CG Report).
Annexure III: Disclosure under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014
Annexure IV: Extract of Annual return - Form MGT9.
Annexure V: Secretarial Audit Report.
Annexure VI: Independent Auditors' Report on Financial Statements.
Annexure VII: Financial Statements as on and for the year ended 31st March 2017together with notes thereto.
Directors' Report - Annexure I:
Form No. AOC-2
[Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)
Disclosure of particulars of contracts/arrangements entered into by the Company withrelated parties referred to in sub-section (1) of Section 188 of the Companies Act 2013including certain arms length transactions under third proviso thereto during the yearended 31st March 2017
|S.No. ||Required Particulars ||Details |
| ||I. Details of contracts or arrangements or transactions not at arm's length basis: || |
|a ||Name(s) of the related party and nature of relationship ||Mrs Jeevibai Sakaria (First Land Owner) |
| || ||Mr Jitesh D Maher (Second Land Owner) |
| || ||The First Land Owner is the mother of the Director Mr Narendra Sakariya |
| || ||The Second Land Owner is employed as Vice President - Operations in the Company. |
|b ||Nature of contracts / arrangements / transactions ||The contract or arrangement is for joint development by the Company M/s Narendra Properties Limited (NPL) of the property owned by the related party Mrs Jeevibai Sakaria for construction of residential apartments in the ordinary course of its business as property developers. |
|c. ||Duration of the contracts / arrangements / transactions ||From 10th August 2015 till the completion of the construction of apartment and its sale in the ordinary course of business a. Mrs. Jeevibhai Sakaria (First Land Owner) is the absolute owner of the landed property at the location mentioned above to the extent of 13080 sq.ft. |
|d ||Salient terms of the contracts or arrangements or transactions including the value if any ||b. Mr. Jitesh D Maher (Second Land Owner) is the absolute owner of the landed property at the location mentioned above to the extent of 12862 sq.ft. |
| || ||c. NPL to construct at their cost Residential Complex on the land belonging to the related parties (approx.25942 sq.ft.) at minimum of 1.5 FSI on a joint development basis. |
| || ||d. The related parties shall be entitled to 55% of the Super Builtup Area of the building to be constructed on the land belonging to them in the following manner: Mrs. Jeevi Bai Sakaria (First Land Owner): 27.5% Mr.Jitesh D. Maher (Second Land Owner): 27.5%. |
| || ||e. NPL shall be entitled to balance 45% of the Super Builtup Area of the building to be constructed on the land belonging to the related parties without any payment thereto. NPL could sell or otherwise dispose off the building area to which it is entitled. |
| || ||f. The related parties would sell transfer convey and assign 45% undivided share or interest over the land belonging to them in favour of the Developers (NPL) or its nominee(s) in consideration of the Developers constructing and delivering to the them 55% of the super built up area of the building to be constructed. |
|e. ||Justification for entering into such contracts or arrangements or transactions ||The proposal is in line with the prevalent trade practice in the development construction industry at Chennai. It presents a profitable business opportunity to the Company. |
|f. ||Date(s) of approval by the Board ||10.08.2015 |
|g. ||Amount paid as advances if any ||An amount of Rs. 569371 has been expended towards execution of the contract as on 31st March 2017. |
|h. ||Date on which the special resolution was passed in general meeting as required under first proviso to Section 188 ||Members have approved the contract vide Special Resolution passed at the 20th AGM held on 28.09.2015 |
| ||II. Details of material contracts or arrangement or transactions at arm's length basis: || |
|a. ||Name(s) of the related party and nature of relationship ||Not applicable |
|b. ||Nature of contracts / arrangements / transactions ||Not applicable |
|c. ||Duration of the contracts / arrangements / transactions ||Not applicable |
|d. ||Salient terms of the contracts or arrangements or transactions including the value if any ||Not applicable |
|e. ||Date(s) of approval by the Board ||Not applicable |
|f. ||Amount paid as advances if any ||Not applicable |
| ||By Order of the Board For and on behalf of the Board of Directors || |
|PLACE : CHENNAI ||S RAMALINGAM |
|DATED : 16TH AUGUST 2017 ||CHAIRMAN |