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Sunstar Realty Development Ltd.

BSE: 535141 Sector: Infrastructure
NSE: N.A. ISIN Code: INE338O01025
BSE 15:25 | 19 Jan 14.75 -0.75
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 14.75
PREVIOUS CLOSE 15.50
VOLUME 27083
52-Week high 63.00
52-Week low 11.30
P/E
Mkt Cap.(Rs cr) 348
Buy Price 0.00
Buy Qty 0.00
Sell Price 14.75
Sell Qty 1773355.00
OPEN 14.75
CLOSE 15.50
VOLUME 27083
52-Week high 63.00
52-Week low 11.30
P/E
Mkt Cap.(Rs cr) 348
Buy Price 0.00
Buy Qty 0.00
Sell Price 14.75
Sell Qty 1773355.00

Sunstar Realty Development Ltd. (SUNSTARREALTY) - Director Report

Company director report

TO THE MEMBERS

SUNSTAR REALTY DEVELOPMENT LIMITED

Your Directors are pleased to present the Ninth (9th) Annual Report together with theAudited Accounts of your Company for the Financial Year ended March 31 2017. TheFinancial performance of your Company during the Financial Year ended March 31 2017 ascompared to the previous financial year are summarised below:

(Rs. in Lakhs)
Particulars Year ended March 31 2017 Year ended March 31 2016
Total Income 430.05 748.49
Total Expenditure 417.05 733.15
Profit Before Taxation 13.00 15.34
Tax Expense 4.21 4.74
Profit for the period 8.79 10.60
Brought forward from previous year 164.78 154.18
Surplus carried to Balance Sheet 173.57 164.78

FINANCIAL PERFORMANCE

During the year under review your Company achieved Total Income of Rs. 430.05 Lakhs.Some of the key highlights of your Company's performance during the year under review are:

• Profit before taxation is Rs. 13.00 Lakhs as against Rs. 15.34 Lakhs in the lastyear.

• Net profit after taxation is Rs. 8.79 Lakhs as against Rs. 10.60 Lakhs in thelast year.

DIVIDEND

The Company has been growing over the last few years. Given the significant weakness inthe real estate market over the period there have been significant business developmentopportunities available for the Company. With these kinds of opportunities available andwith our ambition to considerably scale the business it is important for the Company toconserve cash. With this objective of investing strongly in new project opportunities theBoard of Directors have therefore not recommended any dividend for the Financial Yearended March 31 2017.

AMOUNTS PROPOSED TO CARRY TO THE RESERVES

The Company has not transferred any amount out of the profit earned to reserve accountduring the year under review. The entire profit earned during the year under review isbeing carried forward under Profit & Loss Account.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THEFINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments affecting the financial positionof the company which have occurred between the end of the financial year of the company towhich the financial year relate and the date of this report.

SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS

There are no significant material orders passed by the Regulators or Courts orTribunals impacting the going concern status of your Company and its operations in future.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company's Internal Control Systems are commensurate with the nature size andcomplexity of its business and ensure proper safeguarding of assets maintaining properaccounting record and providing reliable financial information.

The Directors have laid down internal financial controls to be followed by the Companyand such policies and procedures have been adopted by the Company for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting record and the timely preparation of reliablefinancial information.

An external independent firm carries out the internal audit of the Company operationsand reports its findings to the Audit Committee on a regular basis. Internal Risk andControl function also evaluates organisational risk along with controls required formitigating those risks. Internal Audit provides assurance on functioning and quality ofinternal controls along with adequacy and effectiveness through periodic reporting.

The Company has a Code of Business Conduct for all employees and a clearly articulatedand internalized delegation of financial authority. These authority levels areperiodically reviewed by management and modifications if any are submitted to the AuditCommittee and Board for approval. The Company also takes prompt action on any violationsof the Code of Business Conduct by its employees.

The Audit Committee reviews the effectiveness of the internal control system and alsoinvites senior management personnel to provide updates on operating effectiveness andcontrols from time to time. A CEO/CFO Certificate signed by the Whole Time Director of theCompany confirms the existence and effectiveness of internal controls and reiterates theirresponsibilities to report deficiencies to the Audit Committee. The Audit Committee alsoreviews the Risk management framework periodically and ensures it is updated and relevant.During the year under review the Internal Financial Control Audit was carried out by theStatutory Auditors the Report of which is forming part of this Annual Report.

DEPOSITS

During the year under review your Company has not accepted any deposit within themeaning of Sections 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.

AUDITORS

i. STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act 2013 and Rules framedthere under the term of M/s J V Modi & Co. Chartered Accountants (FirmRegistration No. 137951W) as the Statutory Auditors of the Company will conclude from theclose of the ensuing Annual General Meeting of the Company.

The Board places on record its appreciation to the services rendered by M/s J V Modi& Co as the Statutory Auditors of the Company.

Subject to the approval of the Members the Board of Directors of the Company hasrecommended the appointment of M/s SDA & Associates Chartered Accountants (FirmRegistration No. 120759W) as the Statutory Auditors of the Company pursuant to Section139 of the Companies Act 2013.

Accordingly the Board recommends the resolution in relation to appointment ofStatutory Auditors for the approval by the shareholders of the Company.

There is no audit qualification for the year under review.

ii. SECRETARIAL AUDITOR

In terms of Section 204 of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Ms. Kavita Raju Joshi Practicing Company Secretary (Certificate of Practice No.8893) as the Secretarial Auditor.

The Secretarial Audit Report for the financial year ended March 31 2017 is annexedherewith as [Annexure-A] to this report.

DETAILS OF SUBSIDIARY/ JOINT VENTURES/ASSOCIATE COMPANIES

The Company does not have any subsidiary/joint ventures/associate companies.

SHARE CAPITAL

The Authorised Share Capital of your Company stands at Rs. 250000000/- divided into250000000 Equity Shares of Re. 1/- each. At present the Issued Subscribed and Paid UpShare Capital of your Company is Rs. 236230000/- divided into 236230000 EquityShares of Re. 1/- each fully paid-up.

MIGRATION FROM BSE SME PLATFORM TO MAIN BOARD

The Company has been listed and traded on the SME Platform for more than four years andhence eligible to migrate on to the Main Board as per the guidelines specified by SEBI andas per the procedures laid down under Chapter XB of SEBI ICDR Regulations 2009. Alsolisting on the Main Board of BSE Limited will take the Company into a different leaguealtogether with enhanced recognition and increased participation by retail investors.Hence the Board of Directors considered the resolution which was duly passed byshareholders via Postal Ballot for the migration of the Company from BSE SME platform tothe Main Board of BSE Ltd.

Mr. Bhuwnesh Bansal Practicing Company Secretary was appointed as the Scrutinizer forcarrying out the Postal Ballot process in a fair and transparent manner. The process ofPostal Ballot was successfully completed and the approval of shareholders was taken. Theresult of Postal Ballot was announced on May 02 2017.

EXPANSION OF BUSINESS ACTIVITIES

The Company in its quest to expand its activities intends to build technologies aroundhealth care and education all of which relate to its core activities of real estate. Toaccomplish this the company has entered into a Memorandum of Understanding for thetakeover of 100% shares of

Quadrant 4 Solutions Private Limited Chennai (Q4) a company incorporated under Indianlaws. Q4 is into business of technology services in the area of health and education. TheBoard has considered this acquisition and will appoint required agencies to evaluate theoptions of acquisition and will close the acquisition.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return is prepared in Form MGT-9 as per the provisions of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 and the same is annexed herewith as [Annexure-B] to this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

a) Particulars of Conservation of Energy Technology Absorption The Provisions ofSection 134(m) of the Act relating to conservation of energy and technology absorption donot apply to this Company as the Company has not carried out any manufacturing activities.

b) Foreign Exchange Earnings and Outgo During the year under review there was noforeign exchange outgo nor was any foreign exchange earned.

DIRECTOR'S & KEY MANAGERIAL PERSONNEL

Your Company has a duly constituted Board of Directors which is in compliance with therequirements of the Companies Act 2013 schedules thereto and rules framed there underand provisions of the Articles of Association of the Company.

a) Declaration by Independent Directors All the Independent Directors have given adeclaration that they meet the criteria of Independence as laid down under Section 149(6)of the Companies Act 2013 read with the rules made there under and Regulation 16(1)(b) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015.

b) Familiarisation Programme undertaken for Independent Directors The IndependentDirectors are familiarised with the Company their roles rights responsibilities in theCompany nature of the industry in which the Company operates business model of theCompany etc. On appointment the Independent Director is issued a Letter of Appointmentsetting out in detail the terms of appointment duties responsibilities and expectedtime commitments. The Director is also informed and explained in detail the variouscompliances required from him/her as a Director under the various provisions of theCompanies Act 2013 & Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015. The details of familiarisation programme areavailable on the website of the Company viz. www.sunstarrealtors.com.

c) Non-Independent Director In accordance with the provisions of Section 152 of theCompanies Act 2013 Mr. Nitin Kishor Boricha (DIN: 05245737) Director is liable toretire by rotation and being eligible offers himself for re-appointment. The Boardrecommends his appointment with a view to avail his valuable advices and wise counsel.

A brief profile of the above Director seeking re-appointment required under Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 will be a part of Notice calling Annual General Meeting of the Company.

None of the Directors of the Company are disqualified for being appointed as Directorsas specified in Section 164 (2) of the Companies Act 2013 and rule 14(1) of the Companies(Appointment and Qualification of Directors) Rules 2014.

d) Changes in Directorship/Key Managerial Personnel during the year Mr. Nitin KishorBoricha (DIN: 05245737) was appointed as Whole Time Director of the Company by the Boardat their meeting held on December 31 2016 and further confirmed by the members of theCompany via Postal Ballot whose results were declared on May 02 2017.

Mr. Prashant Agarwal was appointed as Whole Time Secretary and Compliance Officer ofthe Company by the Board at their meeting held on March 31 2017.

Ms. Priyanka Sen resigned from the post of Whole Time Secretary and Compliance Officerof the Company with effect from November 14 2016. The Board places on record its sincereappreciation and gratitude for contributions made by her during her tenure as Whole TimeSecretary and Compliance Officer of the Company.

Mr. Manoj Mehrotra (DIN: 07224970) resigned from the post of Managing Director of theCompany with effect from December 31 2016. The Board places on record its sincereappreciation and gratitude for contributions made by him during his tenure as ManagingDirector of the Company.

The Board has appointed Mr. Vijay Raman K R (DIN: 07803287) & Ms. Lakshmi Chandra(DIN: 07436752) as Additional Directors at their meeting held on April 26 2017.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

A total of Nine (9) Meetings of the Board of Directors of your Company were held duringthe year under review. The maximum interval between two meetings did not exceed 120 daysas prescribed in the Companies Act 2013 and in the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015. Details of allBoard/ Committee Meetings are given in the Corporate Governance Report.

COMMITTEES OF THE BOARD

The Company has constituted/re-constituted various Board level committees in accordancewith the requirements of Companies Act 2013. Details of all the Committees along withcomposition and meetings held during the year under review are provided in the CorporateGovernance Report.

AUDIT COMMITTEE

The composition and terms of reference of the Audit Committee has been furnished in theCorporate Governance Report. There have been no instances where the Board has not acceptedthe recommendations of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

The composition and terms of reference of the Nomination and Remuneration Committee hasbeen furnished in the Corporate Governance Report.

STAKEHOLDERS RELATIONSHIP COMMITTEE

The composition and terms of reference of the Stakeholders Relationship Committee hasbeen furnished in the Corporate Governance Report.

DIRECTORS APPOINTMENT & REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy are explained and annexed herewith as [Annexure- C] to this Report.

WHISTLE BLOWER POLICY/VIGIL MECHANISM

The Board has adopted a Whistle Blower Policy to maintain highest standards ofprofessionalism honesty integrity ethical behaviour and to provide a vigil mechanismfor Directors/Employees to voice concern in a responsible and effective manner regardingunethical matters involving serious malpractice abuse or wrongdoing within theorganisation. The Company affirms that during the year no personnel have been deniedaccess to the Audit Committee. The said policy is available at the website of the Companyviz. www.sunstarrealtors.com.

PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company as an organization is committed to provide a healthy environment to allemployees and thus does not tolerate any discrimination and/or harassment in any form. TheCompany has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at work place (Prevention Prohibition andRedressal) Act 2013. The following is a summary of sexual harassments complaints receivedand disposed off during the financial year ended March 31 2017:

• No. of Complaints received : NIL
• No. of Complaints disposed off : Not Applicable

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The Company has complied with Section 186 of the Companies Act 2013.

The Company has not given any guarantee or provided security during the year underreview.

RELATED PARTY TRANSACTIONS

All transactions entered into during the financial year 2016-17 with Related Parties asdefined under the Companies Act and Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 were in the ordinary course ofbusiness and on an arm's length basis. During the year the Company had not entered intoany transaction referred to in Section 188 of the Companies Act 2013 with related partieswhich could be considered material under Securities and Exchange Board of India (ListingObligations and Disclosure Requirements)

Regulations 2015. Accordingly the disclosure of Related Party Transactions asrequired under Section 134(3) of the Companies Act 2013 in Form AOC-2 is not applicable.

Necessary disclosures required under the Accounting Standards (AS-18) have been made inthe Notes to Financial Statements.

As required under Regulation 23 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 the Company has formulated aRelated Party Transactions Policy which is available at the website of the Company viz.www.sunstarrealtors.com.

DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDEMPLOYEES :

A statement containing the details of the Remuneration of Directors Key ManagerialPersonnel (KMP) and Employees as required under Section 197(12) of the Companies Act 2013read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is annexed herewith as [Annexure-D] to this Report.

The Company have no employee drawing a remuneration of Rs. 6000000/- (Rupees SixtyLakhs) per annum or part thereof in terms of the provisions of Section 197(12) of theCompanies Act 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

CORPORATE GOVERNANCE REPORT

As per Regulation 34(3) read with Schedule V of the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 a separatesection on Corporate Governance practices followed by the Company together with acertificate confirming compliance is annexed herewith as [Annexure-E] to this Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company asrequired under Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 is annexed herewith as [Annexure-F] to this Report.

RISK MANAGEMENT

Risk management is embedded in your Company's operating framework. Your Companybelieves that managing risks helps in maximizing returns. The Company's approach toaddressing business risks is comprehensive and includes periodic review of such risks anda framework for mitigating controls and reporting mechanism of such risks. The RiskManagement framework is reviewed periodically by the Board and the Audit Committee. TheAudit Committee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continual basis.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) for the time being in force) the Directors of yourCompany confirm that:

i. in the preparation of the Annual Accounts for the financial year ended March 312017 the applicable Accounting Standards and Schedule III of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)have been followed and there are no material departures from the same;

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 March 31 2017 and of the profit& loss of the Company for the Financial Year March 31 2017;

iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force)for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. the annual accounts have been prepared on a 'going concern' basis;

v. proper internal financial controls laid down by the Directors were followed by yourCompany and that such internal financial controls are adequate and operating effectively;and

vi. proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.

CAUTIONARY STATEMENT

Statements in this Directors Report and Management Discussion and Analysis describingthe Company's objectives projections estimates expectations or predictions may be"forward-looking statements". Actual results could differ materially from thoseexpressed or implied. Important factors that could make difference to the Company'soperations include changes in market condition changes in Government regulations Taxregimes economic developments within India and other ancillary factors.

APPRECIATION

Your Directors wish to place on record their appreciation for the contribution made bythe employees at all levels but for whose hard work and support your Company'sachievements would not have been possible. Your Directors also wish to thank itscustomers dealers agents suppliers investors and bankers for their continued supportand faith reposed in the Company.

For & on behalf of the Board
Nitin Kishor Boricha
Place: Mumbai Chairman and Whole Time Director
Date: May 30 2017 DIN: 05245737

[Annexure-D]

Disclosure in Directors' Report pursuant to Section 197(12) of the Companies Act 2013read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014

(i) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Sl. No. Name of the Director Ratio of the remuneration to the median remuneration of the employees
1. Mr. Nitin Kishor Boricha
(Whole Time Director) 0.83
2. Mr. Manoj Mehrotra
(Managing Director) 4.17
3. Ms. Sonal Jayprakash Bhatt
(Independent Director) -
4. Mr.Yogesh Kumar Rawal
(Independent Director) -

Notes:

1. Mr. Nitin Kishor Boricha (DIN: 05245737) was appointed as Whole Time Director of theCompany by the Board with effect from December 31 2016.

2. Mr. Manoj Mehrotra (DIN: 07224970) resigned from the post of Managing Director ofthe Company with effect from December 31 2016.

(ii) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager in the financial year:

Sl. No. Name of the Director Ratio of the remuneration to the median remuneration of the employees
1. Mr. Nitin Kishor Boricha
(Whole Time Director) NA
2. Mr. Manoj Mehrotra
(Managing Director) NIL
3. Ms. Sonal Jayprakash Bhatt
(Independent Director) NA
4. Mr.Yogesh Kumar Rawal
(Independent Director) NA
5. Ms. Priyanka Sen
(Company Secretary) NIL
6. Mr. Prashant Agarwal
(Company Secretary) NA

Notes:

1. Mr. Nitin Kishor Boricha (DIN: 05245737) was appointed as Whole Time Director of theCompany by the Board with effect from December 31 2016.

2. Mr. Manoj Mehrotra (DIN: 07224970) resigned from the post of Managing Director ofthe Company with effect from December 31 2016.

3. Mr. Prashant Agarwal was appointed as Whole Time Secretary and Compliance Officer ofthe Company by the Board with effect from March 31 2017.

4. Ms. Priyanka Sen resigned from the post of Whole Time Secretary and ComplianceOfficer of the Company with effect from November 14 2016.

(iii) The percentage increase in the median remuneration of employees in the financialyear: During the FY 2016-17 there was no increase in the median remuneration ofemployees.

(iv) The number of permanent employees on the rolls of the Company: There are 9employees as on March 31 2017.

(v) Average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentageincrease in the managerial remuneration and justification thereof and point out if thereis any exceptional circumstances for increase in the managerial remuneration: None of theDirector's Remuneration was increased in the Financial Year 2016-17.

(vi) Affirmation that the remuneration is as per the remuneration policy of theCompany: Remuneration paid during the year ended March 31 2017 is as per the RemunerationPolicy of the Company.