BOARDS' REPORT TO THE MEMBERS
Your Directors have pleasure in submitting their Ninety-First Annual Report togetherwith the Audited Statement of
Accounts for the year ended 31st March 2017.
The financial results of the Company (Standalone) are summarized as under :
| || ||Rs. Rs.in Lacs |
| ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|Gross Profit / (Loss) before Depreciation || || |
|Interest Taxation and Extra Ordinary Items ||(704.04) ||(572.31) |
|Interest ||225.47 ||124.16 |
|Profit / (Loss) before Depreciation ||(929.51) ||(696.47) |
|Taxation & Extra Ordinary Items || || |
|Depreciation ||11.69 ||11.93 |
|Profit / (Loss) before Taxation ||(941.20) ||(708.40) |
|Provision for Taxation || || |
|Current Tax (MAT) ||-- ||-- |
|Deferred Tax ||(1.83) ||(14.65) |
|Profit / (Loss) after Tax ||(939.37) ||(693.75) |
STATE OF COMPANY'S AFFAIRS
Your Directors are pleased to state that Phase-I consisting of three "Wings A B& C" of the Company's prestigious Residential project "PittieKourtyard" was completed during the year under report. The possession of the flats isbeing given to the buyers. Further after obtaining necessary approvals of the concernedAuthorities construction of Phase-II consisting of "Wing D" has commenced andthe same is expected to be completed by year 2022.
MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and date of the report.
DIVIDEND & RESERVES
During the year under review in view of loss your Directors do not recommend anydividend for the Financial Year 2016-17 and also no amount was transferred to GeneralReserve.
MANAGEMENT DISCUSSION AND ANALYSIS
Your Company is one of the reputed real estate Company in Pune. In the short span ofits Real Estate development activities the Company has earned a reputation for qualityconstruction of high-end projects.
i. Industry Structure Developments and Outlook
During the F.Y. 2016-17 the demand situation in the residential segment remainedsubdued. The luxury segment was most hit with very low absorption levels across markets.However there have been many significant developments that can change the course of ourcountry's long term growth trajectory. The scenario in India is encouraging in view ofgovernment's policies which will promote employment and growth of real estate sector. TheGovernment is undertaking various steps to energies this sector and provide it with themuch needed push to accelerate growth.
ii. Opportunities and Threats
The outlook for real estate sector for short term remains uncertain. High interestrates continue to impact the business of real estate. Banks/Financial Institutions havebecome cautious towards issuing fresh loans or rescheduling debt to real estate companies.Thus liquidity is a major factor for determining overall project execution. In view ofgovernment's policies it seems that the long-term factors are likely to work in favour ofthe real estate developers.
iii. Segment Wise Performance
Your Company has only single segment i.e. Construction and Real Estate Development.Revenue and expenses have been identified on the basis of accounting standard and guidancenote issued by Institute of Chartered Accountant of India for this sector.
iv. Risks and Concerns
The Company can be exposed to various risks if not identified and addressed in time.Your Company has taken steps for identification and assessment of risks and measures tomitigate them.
v. Internal Control Systems and their Adequacy
The Company has a well defined organization structure documented policy guidelinespredefined authority levels and an extensive system of internal controls system. Anindependent internal audit firm appointed by the Company conducts audits to ensureadequacy of internal control systems adherence to management policies and compliance withthe laws and regulations.
vi. Financial Performance
During the year under review Company's operational income is 3090.33 lakhs (previousyear 1111.90 lakhs) and other income is 6.95 lakhs (previous year 5.28 lakhs). Company hasincurred loss of 939.37 lakhs (previous year 693.75 lakhs).
vii. Material development in Human Resources
Your Company firmly believes that success of a company comes from good Human Resources.Employees are considered an important asset and key to its success. The employees relationcontinued to be satisfactory.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Manoharlal M. Pittie (holding DIN: 00760307) Director retires by rotation at theensuing Annual General Meeting and is eligible for re-appointment. Mr. Mohan V. Tanksale(holding DIN: 02971181) was appointed as an Additional Director of the Company with effectfrom 11th August 2017. He holds office upto the date of ensuing Annual General Meeting.The company has received a Notice in writing under Section 160(1) of the Act from aMember proposing his candidature for the office of Director. Mr. Mohan V. Tanksale hasalso submitted a declaration that he meets the criteria of independence as provided inSection 149(6) of the Act as an Independent Director of the Company. Members arerequested to refer to Item No. 4 of the Notice of the AGM and the Explanatory Statementfor the terms of appointment of Mr. Mohan V. Tanksale.
Mr. Shridhar Pittie (holding DIN: 00562400) has been re-appointed as Managing Directorof the Company by the Board of Directors for a period of three years with effect from 30thJune 2017. Members are requested to refer to Item No. 5 of the Notice of the AGM and theExplanatory Statement for the terms of re-appointment and remuneration of Mr. ShridharPittie.
There has been no change in the Key Managerial Personnel during the financial year.
DECLARATION FROM INDEPENDENT DIRECTORS
Mr. Madhav L. Apte (holding DIN: 00003656) and Mr. Nayankumar C. Mirani (holding DIN:00045197) Independent Directors of the Company had submitted declarations that each ofthem meet the criteria of independence as provided in sub Section (6) of Section 149 ofthe Act and there has been no change in the circumstances which may affect their status asindependent director during the year. In the opinion of the Board the independentdirectors possess appropriate balance of skills experience and knowledge as required.
NUMBERS OF MEETINGS OF THE BOARD
During the year five Board meetings were convened and held. The maximum intervalbetween the meetings did not exceed the period prescribed under Companies Act 2013.
COMMITTEE OF BOARD OF DIRECTORS
During the year the Board has constituted/ reconstituted the Committee in accordancewith the provisions of the Companies Act 2013. Currently the Board has the followingCommittees: Audit Committee Nomination & Remuneration Committee and Share TransferCommittee.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company has a Whistle Blower Policy to report genuine concern or grievances. Thewhistle blower policy has been posted on the Company's website at (www.rajabahadur.com).During the year no such incidence was reported.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND CRITERIA FOR
The Remuneration Policy for directors and senior management and the Criteria forselection of candidates for appointment as directors independent directors seniormanagement as adopted by the Board of Directors are placed on the Company's website at(www.rajabahadur.com). There has been no change in the policies since the last fiscalyear. We affirm that the remuneration paid to the directors is as per the terms laid outin the remuneration policy of the Company.
EVALUATION OF BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
An annual evaluation of the Board's own performance Board committees and individualdirectors was carried out pursuant to the provisions of the Act in the following manner:
|Sr. No. ||Performance evaluation of ||Performance evaluation performed by ||Criteria |
|1. ||Each Individual directors ||Nomination and Remuneration Committee ||Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided key performance aspects in case of executive directors etc. |
|2. ||Independent directors ||Entire Board of Directors excluding the director who is being evaluated ||Attendance Contribution to the Board and committee meetings like preparedness on the issues to be discussed meaningful and constructive contribution and guidance provided etc. |
|3. ||Board and its committees ||All directors ||Board composition and structure effectiveness of Board processes Evaluation of risk look into governance and compliance review grievance of investor check availability of sufficient funds information and functioning fulfilment of key responsibilities performance of specific duties and obligations timely flow of information contribution to the discussionetc. |
| || || ||The assessment of committees based on the terms of reference of the committees and effectiveness of the meetings. |
RISK MANAGEMENT POLICY
The Board of Directors of the Company has framed a risk management policy and isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the businesses and functions are systematically addressedthrough mitigating actions on a continuing basis. More details on risk management arecovered in the Management Discussion and Analysis forming a part of the Annual Report.
DIRECTORS RESPONSIBILTY STATEMENT
To the best of their knowledge and belief and according to the information andexplanation obtained your Directors make the following statements in terms of Section134(3)(c) of the Companies Act 2013
i. that in the preparation of the annual accounts for year ended 31st March 2017 theapplicable accounting standards have been followed along with proper explanation relatingto material departures if any;
ii. that such accounting policies have been selected and applied them consistently andmade judgments and estimates that are reasonable & prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year on 31stMarch 2017 and of the loss of the Company for the year ended on that date;
iii. that proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv. that the annual accounts have been prepared on a 'going concern' basis;
v. that proper internal financial controls were in place and that such internalfinancial controls are adequate and were operating effectively;
vi. that systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to thefinancial statement. Internal control systems comprising of policies and procedures aredesigned to ensure sound management of your Company's operations safekeeping of itsassets optimal utilization of resources reliability of its financial information andcompliance. The Audit Committee of the Board periodically reviews the internal controlsystems with the Management Internal Auditors and Statutory Auditors and the adequacy ofinternal audit function significant internal audit findings and follow-ups thereon.
DETAILS OF SUBSIDIARIES/ JOINT VENTURES / ASSOCIATES
Raja Bahadurs Realty Limited (Formerly known as Raja Bahadur Motilal Export ImportLimited) has become a wholly owned subsidiary of the Company effective from 20.10.2016 interms of section 2(87) of the Companies Act 2013. Raja Bahadurs Realty Limited is engagedin the business of real estate and property development activities. The salient featuresof the financial summary statement in Form AOC - 1 is enclosed as "Annexure -E." The Company does not have any Joint Ventures / Associates.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements have been prepared in accordance with theprovisions of the Act read with the Companies (Accounts) Rules 2014 applicableAccounting Standards and the provisions of the Listing Regulations and forms part of theAnnual Report.
The Company has not accepted any public deposits in terms of Section 73 of the Act.
EXTRACT OF ANNUAL RETURN
In accordance with the requirements of Section 92 (3) of the Companies Act 2013 andrule 12 (1) of the Companies (Management and Administration) Rules 2014 an abstract ofAnnual Return in Form MGT-9 is enclosed as
AUDITORS AUDIT REPORT AND THEIR OBSERVATIONS
As per Section 139 of the Companies Act 2013 read with the Companies (Audit andAuditors) Rules 2014 the term of M/s. J. K. Doshi & Co. Chartered Accountants (ICAIRegistration No. 102720W) Mumbai as the Statutory Auditors of the Company expires at theconclusion of the ensuing Annual General Meeting of the Company.
The Board of Directors has based on the recommendation of the Audit Committee at itsmeeting held on 11th August 2017 proposed the appointment of M/s. Jain P.C. &Associates Chartered Accountants (FRN No. 126313W) as the Statutory Auditors of theCompany by the Members at the 91st Annual General Meeting of the Company for an initialterm of 5 years. Accordingly a resolution proposing appointment of M/s. Jain P.C. &Associates Chartered Accountants as the Statutory Auditors of the Company for a term offive consecutive years i.e. from the conclusion of 91st Annual General Meeting till theconclusion of 96th Annual General Meeting of the Company pursuant to Section 139 of theCompanies Act 2013 forms part of the Notice of the 91st Annual General Meeting of theCompany. The Company has received their written consent and a certificate that theysatisfy the criteria provided under Section 141 of the Act and that the appointment ifmade shall be in accordance with the applicable provisions of the Act and rules framedthereunder.
During the year under review the Auditors had not reported any matter under Section143 (12) of the Act therefore no detail is required to be disclosed under Section 134(3)(f) of the Act.
The Board place on record its appreciation for the services rendered by M/s. J. K.Doshi & Co. as the Statutory Auditors of the Company.
You are requested to appoint Auditors and to fix their remuneration.
As regards disclaimer in the Audit Report your directors have to state that theCompany is having adequate system of Internal Financial Controls. The Company is in theprocess of establishing effective system as per Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India on 14th September 2015.
Pursuant to the provisions of Section 204 and other applicable provisions if any ofthe Companies Act 2013 M/s. Jigyasa Singhi & Associates Practicing CompanySecretaries were appointed as the Secretarial Auditor for auditing the secretarial recordsof the Company for the financial year 2016-17 and the Secretarial Auditors' Report issuedby them is attached hereto as "Annexure-B".
As regards observations of Secretarial Auditors in their report your directors have tostate that necessary steps have been taken for ensuring the compliances of the same.
PARTICULARS OF REMUNERATION TO EMPLOYEES
Disclosures with respect to the remuneration of Directors KMPs and employees asrequired under Section 197(12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given in "Annexure-C"to this Report. Details of employee remuneration as required under provisions of Section197(12) of the Companies Act 2013 read with Rule 5(2) & 5(3) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are available on yoursCompany's website at (www.rajabahadur.com).
RELATED PARTY TRANSACTIONS
The Board has framed a policy for related party transactions. Particulars oftransactions with related parties pursuant to Section 134(3)(h) of the Act read with rule8(2) of the Companies (Accounts) Rules 2014 are given in Form AOC-2 and the same formspart of this report as "Annexure-D".
During the financial year your Company entered into related party transactions whichwere on an arm's length basis and in the ordinary course of business. All related partytransactions were approved by the Audit Committee of your Company.
The details of contracts and arrangement with related parties of your Company for thefinancial year ended 31st March 2017 is given in Notes to the financial statements ofyour Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The provisions of Section 135 of the Companies Act 2013 ("the Act") readwith Companies (Corporate Social Responsibility Policy) Rules 2014 is not applicable toyour Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The company has in place an Anti-Sexual Harassment Policy in line with the requirementsof The Sexual Harassment of women at Workplace (Prevention Prohibition and Redressal)Act 2013 and rules made thereunder. All employees (permanent contractual temporarytrainees) are covered under this policy.
The Company has not received any complaint of sexual harassment during the financialyear 2016-2017.
The Company has paid the listing fees to BSE Limited for the year 2017-2018.
INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE
The Board of Directors has adopted the Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information and Code of Internal Procedures andConduct for Regulating Monitoring and Reporting of Trading by Insiders in accordance withthe requirements of the SEBI (Prohibition of Insider Trading) Regulation 2015 and isavailable on your Company's website at (www.rajabahadur.com).
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
The Company has made investment by way of purchase of balance 4080 equity shares forRs. 204000/- of Raja Bahadurs Realty Limited (Formerly known as Raja Bahadur MotilalExport Import Limited) and by virtue of section 2(87) of the Companies Act 2013 RajaBahadurs Realty Limited becomes wholly owned subsidiary. Details of Loan Guarantee andInvestment covered under the provisions of Section 186 of the Act read with the Companies(Meetings of Board and its Powers) Rules 2014 are given in Notes to the financialstatements.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE
EARNINGS AND OUTGO
In view of nature of business of the Company particulars regarding conservation ofenergy and technology absorption are not given. However the Company has taken variousmeasures to conserve energy at all levels. There was no foreign exchange earnings andoutgo during the year under report.
CORPORATE GOVERNANCE REPORT
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Corporate Governance is not applicable to the Company.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
No significant or material orders were passed by any regulator or court that wouldimpact the going concern status of the Company and its future operations.
The Board of Directors are thankful to its Bankers and Institutions for the support andfinancial assistance from time to time.
Your Directors are pleased to place on record their sincere appreciation to all theemployees of the Company whose untiring efforts have made achieving its goal possible.Your Directors wish to thank the Central and State Governments customers suppliersbusiness associates shareholders for their continued support and for the faith reposed inyour Company.
| ||For and on behalf of the Board |
| ||M. M. PITTIE |
|Place : Mumbai ||(DIN: 00760307) |
|Date : August 11 2017 ||CHAIRMAN |