Your Directors take pleasure in presenting the 69th Annual Report together withthe Audited Financial Statements for the year ended on 3151 March 2017.
| ||(Rs. in Lac) |
|Total Revenue ||3814 |
|Profit before Depreciation ||651 |
|Depreciation ||29 |
|Profit after Depreciation before tax ||622 |
|Exceptional Item-Income ||882 |
|MAT Credit ||1 |
|Profit after tax ||1505 |
Due to inadequacy of Profit and the provisions of the Companies Act 2013 yourDirectors are not in a position to propose any dividend for the year that ended on 3181March 2017.
In the previous report to the shareholders we had stated that the development ofinfrastructure facilities for the Shervani Legacy Project has been completedand the sale of plots has commenced and is progressing satisfactorily. During the currentyear the company also executed sale deeds in favour of customers who completed theirrespective payment schedules.
During the current year the company started the construction of Group Housingresidential apartments which is progressing in accordance with the plan approved by ADA.However the time schedule for Group Housing has been adversely affected due tonon-availability of coarse sand. The State Govt stopped mining of sand to facilitate thereview of policy on same. However we are pleased to report that despite slow down in realstate sector the company has during the current year been able to book more than 50% ofthe total flats under construction. We are very thankful forthe trust the public hasreposed in the Company.
MANAGEMENT DISCUSSION AND ANALYSIS
A. Business Overview Industry Structure and Development
During the year under review the real estate sector continued to suffer from economicslow-down. Hence the sale of plots did not reach the expected level. However the bookingof residential apartments is as per our expectations. During the period which follows theperiod under review the monsoon has been good the Seventh Pay Commission Report has beenimplemented which together with easy availability of housing loan and cheaper credit leadtowards recovery of economy and the real estate sector in particular specially in mediumterm.
B. Outlook on Opportunities Threats Risks and Concern
In search of opportunities for better life people migrate from villages to cities.This is bound to have a positive impact on the demand for housing in urban areasspecially in B - Class cities.. Thus over a period of time despite some intermittentperiods of slowdown the growth in the construction industry is expected to pick up. Theinfrastructure facilities developed at Shervani Legacy' promise a green and healthyenvironment which together with the high construction standards adopted by us hasuplifted the trust of public in our project. However the inflationary market trends canincrease input costs which are a matter of concern for both buyers and sellers. Increasesin input costs have negative impact on project costs and margins. Your company is planningbetter management of raw material and optimization of operating efficiency to overcomeexternal risks and continue to address issues concerning the buyers.
C. Subsidiary Company
M/s Farco Foods Pvt Limited the wholly owned subsidiary of your Company manufactured5723 MT biscuits of Priyagold Brand on job work basis. The work relating to firing offurnace by gas supplied through pipe-line has been completed. As a result the efficiencyof plant has improved considerably.
D. Internal Financial Controls
The Company has an adequate system of internal control to ensure compliance withpolicies and procedures commensurate with the size and scale of operations. The internalaudit work has been assigned to an independent firm of Chartered Accountant whichevaluates the efficiency and adequacy of internal control systems. The internal auditreports and recommendations are reviewed by the Audit Committee of the Board.
E. Development in Human Resource and Industrial Relations
The Company maintains a very cordial relationship with its employees. Theywhole-heartedly support the management in all its activities and endeavors.
F. Research and Development
In view of the nature of business activities of the Company there is little scope forresearch and development work. The company is making all efforts to reduce costs bymaintaining standards that benefit the consumers.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to Corporate Governance requirements set out by SEBI. The Company has complied withall mandatory requirements of Corporate Governance. A separate report on governancepractices followed by the Company in compliance of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 on Corporate Governance along with aCertificate of Compliance from the Statutory Auditors is attached with the said separatereport which forms integral part of this Directors Report.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Company(Management & Administration) Rules 2014 the extract of the Annual Return of theCompany in Form MGT-9 is annexed to this report as Annexure A.
The calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year four Board Meetings were convened and details of same are given in the CorporateGovernance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (3) of the Companies Act 2013 the Directorsstate that;
(i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed;
(ii) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the financial year andof the profit and loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) the Directors had prepared the Annual Accounts on a going concern basis:
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
NOMINATION & REMUNERATION
The Board on the recommendation of the Nomination & Remuneration Committee makethe appointment of Directors senior management and fix their remuneration. Key ManagementPersonnel are appointed by the Board after consideration of their qualification andexposure to required fields. The details are stated in the Corporate Governance Report.There are no changes among the Board of Directors and Key Managerial Personnel of theCompany during the year under review.
RELATED PARTY TRANSACTIONS
To provide transparency in management and ensure compliance with the provisions ofvarious laws the Audit Committee has provided guidelines to the Directors/Board. Theguidelines inter alia provide for identification manner of dealing conduct anddocumentation of such transactions as per the provisions of the Companies Act and otherapplicable rules and regulations.
There were no related party transactions between the Company and the Promoters KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of Company. All related party transactions that were entered in to during thefinancial year were in the ordinary course of business and are disclosed at Note No.31attached to the standalone balance sheet. None of the Directors has any pecuniaryrelationship or transaction vis-a-vis the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
There is nothing to report about the conservation of energy and technology absorptionduring the year. There is no foreign exchange earning and outgo. .
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to provisions of section 135 of the Companies Act 2013 a committee of Boardof Directors has been formed and the members of the Committee are Mr. S.l. ShervaniManaging Director Mr. T. Hasan Whole Time Director and Mr. M. A. Sayeed Director.
The Board carries out annual evaluation of its own performance of the Directorsindividually as well of the working of its various Committees. The key areas forevaluation are the quality of deliberations and contribution towards performance andguidance to management. The Board of Directors expressed their satisfaction with theevaluation process.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the section 152 of the Companies Act 2013 Mr.Raju Verghese (DIN:01086812) and Mrs Shefali Bansal (DIN:07090579) Directors retire byrotation at the ensuing Annual General Meeting and being eligible offer themselves forre-appointment. Brief resume of the Directors seeking re-appointment along with otherdetails as stipulated under SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and in terms of Section 102(1) of the Companies Act 2013 are provided inthe Notice for convening the Annual General Meeting.
There are no changes among the Board of Directors and Key Managerial Personnel of theCompany during the year under review except for directors re-appointed by rotation.
Pursuant to provisions of section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are Mr S I Shervani Managing Director Mr T Hasan ChiefFinancial Officer and Mr B K Misra Company Secretary.
The Directors recommend all the resolutions placed before the Members relating toDirectors fortheirapproval.
In terms of provisions of section 139 and 142 of the Companies Act 2013 and TheCompanies (Audit and Auditors) Rules 2014 the retiring auditors are not entitled forre-appointment. The Board of Directors after scrutiny by the Audit Committee haveapproved the appointment of M/s Gupta Vaish & Co. Chartered Accountants Kanpur as theauditors of the Company to audit the financial records of the Company for a period of 5years from 1sl April 2017 to 31st March 2022 from the conclusion of ensuing AnnualGeneral Meeting till the conclusion of the Annual General Meeting for the year 2022 onremuneration to be fixed by the Board of Directors. They have confirmed their eligibilityunder section 141 of the Companies Act 2013 and the rules framed thereunder forappointment as Auditors of the Company. The proposed appointment shall be subject toratification by the shareholders in the Annual General Meeting every year. Your Directorsrecommend their re-appointment up to the conclusion of the next Annual General Meeting
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Siddiqui & Associates Company Secretaries in Practice to undertake theSecretarial Audit of the Company. The Report of Secretarial Audit for the year 2016-17 isannexed herewith as Annexure-B. and forms integral part of this Report.
The Board of Directors on the recommendation of the Audit Committee appointed M/s RekhaAgarwal & Associates Chartered Accountants Allahabad to carry out the Internal Auditof the Company.
The Company has not accepted or renewed any deposit during the year falling within theambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits)Rules 2014 accordingly no amount was outstanding as on the date of Balance Sheet.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the section 129(3) of the Companies Act 2013 and the accountingstandard AS-21 on consolidated financial statement(s) read with accounting standard AS-23on accounting for investments in associates your Company has prepared the consolidatedfinancial statements and annexed to this report. A Statement in form AOC-1 containingsalient features of the financial statements of the subsidiary and associate companies areattached as Annexure-C.
The observations of the Statutory Auditors in their report are appropriately dealt within notes forming part of Financial Statement. No qualification or adverse remarks has beenmade by the Company Secretary in Practice in his Secretarial Audit Report.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION) RULES 2014.
None of the employee of the Company was in receipt of total remuneration ofRs.6000000/- per annum or Rs.500000/- per month during the financial year underreview.
Disclosure required under section 197 of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment & Remuneration) Rules 2014 have been annexed as AnnexureD.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an anti sexual harassment policy in line with the requirementsof Sexual Harassment of Women at Work Place (Prevention Prohibition and Redressal) Act2013. Till date the company has not received any complaint thereunder.
Pursuant to provisions of section 205A(5) and 205C of the Companies Act 1956 thecompany has transferred the unpaid or unclaimed dividends for the financial year upto2008-09 from time to time on due dates to the Investor Education and Protection Fund (theIEPF) established by the Central Govt.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of loans guarantees and investments covered under the provisions ofsection 186 of the Companies Act 2013 are given in the notes to the financial statements.
The Company has an Audit Committee and details of constitution and terms of referenceare set out in the Corporate Governance Report.
Pursuant to the provisions of the section 177 of the Companies Act 2013 the Companyhas adopted Vigil Mechanism policy which also incorporates a whistle blower policy.Adequate safeguards are provided against victimization to those who avail the mechanismand access to the Chairman of the Audit Committee while reporting about unethicalpractices malpractice and non-compliance of policies.
LISTING WITH STOCK EXCHANGE
The Equity shares of the Company are listed on BSE Limited. Further details are set outin the Corporate Governance Report.
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud to Audit Committee asstipulated under second proviso of section 143(12) of the Companies Act 2013.
Industrial relations remained cordial during the period under review.
Your Directors wish to convey their deep sense of appreciation for the continuedsupport and co-operation extended by bankers Central and State Government and all otherstakeholders. The Directors also wish to place on record their sincere appreciation forthe commitment and enthusiasm of the employees for the Company.
|For and on behalf of the Board || |
|Mohd. Aslam Sayeed ||S I Shervani |
|Director ||Managing Director |
|DIN :06652348 ||DIN :00023909 |
|Place : Allahabad || |
|Date : May302017 || |