The Members of SUPREME HOLDINGS & HOSPITALITY (INDIA) LIMITED
Your Directors have pleasure in presenting Thirty Fifth Annual Report and AuditedAccounts of the Company for the year ended 31st March 2017.
1. FINANCIAL RESULTS:
| || ||(Rs. in Lacs) |
| ||2016-17 ||2015-16 |
|Total Income ||619.92 ||24.23 |
|Total Expenditure ||738.22 ||25.71 |
|Profit/(Loss) before depreciation ||(118.30) ||(1.48) |
|Depreciation ||0.21 ||0.15 |
|Profit / (Loss) before Tax ||(118.51) ||(1.62) |
|Tax Expenses || || |
|Current Tax ||- ||- |
|Deferred Tax Liabilities(Asset) ||(42.69) ||(2.91) |
|Earlier Year Taxes ||- ||1.86 |
|Net Profit/(Loss) for the year ||(75.82) ||(0.57) |
No dividend is recommended for the year under review.
For the financial year ended 31st March 2017 your Company has not transferred anyamount to Reserves.
As the Members are aware that the land Bank of the Company at Panvel Taluka has beenincluded in the Navi Mumbai Airport Influence Notified Area (NAINA) and the CIDCO wasappointed as the Special Planning Authority for the NAINA to prepare and publish thedevelopment proposals and development control regulations for the said NAINA and submitthe same to Government for sanction. Accordingly the CIDCO had published the draftfollowed by a modified Draft Development control and promotion regulations for the InterimDevelopment plan of NAINA and submitted the same to Government for its sanction. TheGovernment has sanctioned a part of the said draft Interim Development Plan on 27th April2017 and kept our land bank in excluded portion which will be sanctioned after dueprocedures. In the mean time the Company has started applying for various approvals fordevelopment.
The Company launched Phase 1 of its Premier Luxury residential project BelmacResidences in Pune in January 2016. The project Belmac Residences comprises of 3 phasesof 2 BHK/3BHK/4BHK beautiful apartments with huge central garden club house squashcourt five -aside football court Hydroponic farm Spa Business Centre GymnasiumBanquet Hall Children play area Concierge desk Games room Day care Centre and manymore facilities.
Considering the market response the Company has also initiated the construction ofPhase 2 and the Booking of Apartments have also started. The Project implementation is asper schedule and will be completed in time. The Company in the interim has repaid the fullconstruction finance loan and exploring other fund raising activities.
5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
(a) Industry Structure:
India continues to be one of the fastest growing large economies and is on a stronggrowth trajectory In line with the government's reformist approach to boost the realestate and housing sectors the government has adopted a number of measures. The sectorwill witness a transformation in the years to come on account of implementation of variousbold policy changes.
(b) Company's Performance:
The Company has launched its residential project in Pune in January 2016 and the saleof apartments has also been started. The Company recognizes the revenue from the sale ofapartments on the percentage completion methods as specified in guideline note of AS 7issued by ICAI and accordingly the income from operations during the year 2016-17 hasbeen reported at Rs. 597.54 lacs. The other Income during the year 2016- 17 consists ofinterest income Rs. 10.82 lacs and profit on redemption of mutual fund Rs. 11.57 lacs. Thetotal Income for the year 2016-17 was at Rs. 619.93 Lacs as compared to Rs. 24.23 Lacs inthe previous year.
During the year under review the construction cost was at Rs. 21.95 crores as againstRs. 19.29 crores in the previous year. The employees cost during the year 2016- 17 was atRs. 26.16 Lacs as compared to Rs. 14.99 Lacs in the previous year and the Administrative& Other Expenses were at Rs. 182.60 lacs as compared to Rs. 10.72 lacs in the previousyear.
The loss for the year 2016-17 before depreciation and taxation was at Rs. 118.30 Lacsas against loss of Rs. 1.48 Lacs in the previous year. The Depreciation was at Rs. 0.21Lacs as against Rs. 0.15 Lacs in the previous year. After providing for taxationincluding deferred tax the Company has reported Net Loss of Rs. 75.82 Lacs during theyear 2016-17 as against Net Loss Rs. 0.57 Lacs in the previous year.
(c) Segment -wise Performance:
Segment wise analysis of performance is not applicable to the Company under AccountingStandard 17 as issued by ICAI as Company had only one reportable segment during the year.
(d) Outlook for the Company:
The Pune project of the Company is progressing as per schedule. The Company iscommitted and has focus on quality and timely delivery of the project and to develop brandimage for the Company. Considering the market response to the Project the growth and longterm prospects of the Company are encouraging.
(e) Opportunities Threats Risk and Concerns:
The Real Estate (Regulation and Development) Act 2016 which has come into force is aboost for real estate sector. It will bring about the much needed transparency and orderto the real estate transactions by creating a systematic and a uniform regulatoryenvironment thereby protecting interest of property buyers making the proceedings in thesector more transparent and accountable and will give a sense of clarity to both buyersand sellers.
Several positive measures like Affordable Housing Long term capital gains concessionsthe interest subsidy scheme smart city project housing for all Simpler approvalprocedures relaxed FDI Norms and various other measures has made the environmentconducive for housing demand to revive and grow at rapid pace.
Various challenges are also there along with opportunities. The substantial proceduraldelays with regards to land acquisition land use project launches and constructionapprovals increase cost of manpower rising cost of constructions availability oftrained labour force availability of finance changes in government policies and theregulatory environment multifaceted tax levies on various transactions are the majorchallenges in the construction Industry. Sectoral Caps set by RBI for the total maximumexposure of banks to real estate including individual housing loans and lending todevelopers for construction finance which is very low and is curtailing the overall growthof Industry. Absence of long term funding from Banks is forcing developers to look atalternative sources of funds most of which do not offer affordable interest rates.Inflation still remains a threat which has adverse effect on the purchasing power of theconsumers. This Sector is sensitive to fluctuations in the economy and governmentpolicies.
(f) Internal Control Systems and their Adequacy:
The Company has proper and adequate systems of internal control. The internal controlsystems of the company are designed to ensure that the financial and other records arereliable for preparing the financial statements and other data and for accountability ofassets.
The company has an Audit Committee of the Board of Directors which meets regularly toreview the adequacy of internal controls.
(g) Human Resources:
As the project of the Company progressed new talent was inducted into organization.The Company enjoys cordial and harmonious relationship with its employees. The Company has18 number of employees as on 31st March 2017.
6. FIXED DEPOSITS:
During the year under review the company has not invited any Fixed Deposit from thepublic.
7. LOANS AND GUARANTEE AND INVESTMENTS:
Particulars of loans investments guarantees given and securities provided arereported in the financial statement (Please refer to Note. No. 11 19 and 25 to theStandalone Financial Statement).
8. INVESTOR EDUCATION AND PROTECTION FUND:
There has been no transfer to the said Investor Education and Protection Fund duringthe current year.
9. EXTRACT OF ANNUAL RETURN:
Pursuant to section 134 (3) (a) and Section 92(3) of Companies Ac 2013 read withrelevant Rules framed thereunder the extract of Annual Return as on 31st March 2017forms a part of this Report as "Annexure -A"
The information required under Section 197 of the Companies Act 2013 read with Rule 5of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 aregiven in "Annexure -B". In terms of Section 136(1) of the Companies Act 2013read with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Board's Report is being sent to all the shareholders of theCompany excluding the annexure containing names of the top ten employees in terms ofremuneration drawn. Any shareholder interested in obtaining a copy of the said annexuremay write to the Company Secretary at the Registered Office of the Company.
11. RELATED PARTY TRANSACTION:
The Company has not entered into any related party transactions u/s 188 of theCompanies Act 2013 during the financial year. The policy on Related Party Transactions ishosted on the website of the Company under the web link http://www .supremeholdings.net/company-policies.htm
12. SUBSIDIARY COMPANY:
Your Company has one Wholly Owned Subsidiary company namely Helmet Traders Limited ason 31st March 2017.
A Statement containing the salient features of the financial statement of subsidiariesas prescribed under the first proviso to sub-section (3) of section 129 of the CompaniesAct 2013 read with rule 5 of The Companies (Accounts) Rules 2014 is attached and formspart of the Annual Report.
The policy on determining Material Subsidiaries is hosted on the website of the Companyunder the web link http://www.supremeholdings.net/ company-policies.htm
13. NOMINATION AND REMUNERATION POLICY
The details of Nomination and Remuneration policy of the Company for Directors KMP'sand Senior Personnel of the Company is enclosed as "Annexure - C to this report.
14. ANNUAL EVALUATION BY THE BOARD:
In accordance with the provisions of the Companies Act 2013 and SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 the Nomination and RemunerationCommittee has laid down the criteria for evaluation of individual Directors and the Boardas a whole. Based on the criteria the exercise of evaluation was carried out throughstructured process covering various aspects of the Board functioning such as compositionof Board and Committees experience and expertise performance of specific duties andobligation governance and compliance issues attendance contribution at meeting etc.
The performance evaluation of the Non- Independent Directors was carried out by theIndependent Directors at a separately convened meeting where the performance of the Boardas a whole was evaluated and reviewed. The performance of the Independent Directors wascarried out by the entire Board (excluding the Director being evaluated).
15. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statements relate and the date of this report.
16. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a vigil mechanism to deal with instance of fraud and mismanagement. Thepolicy on Vigil Mechanism / Whistle Blower Policy is hosted on the website of the Companyunder the web link http://www.supremeholdings.net/ company-policies.htm
17. CORPORATE GOVERNANCE:
A separate report on Corporate Governance is furnished as a part of the Directors'Report as "Annexure - D" and a certificate from the Company's Auditors regardingthe compliance of conditions of Corporate Governance is annexed to the said Report.
18. RISK MANAGEMENT:
The Company has adequate risk assessment and mitigation policy commensurate with sizeand nature of business to ensure that all the current and future material risk exposuresof the Company are identified assessed quantified appropriately mitigated minimisedand managed.
During the year under review Mr. Prateek Jatia Executive Director & CFO resignedas Executive Director of the Company w.e.f December 19 2016 due to personal reasons.However he continues to serve as the Chief Financial Officer of the Company. Mr. R. G. NSwamy Chairman resigned from the post of Chairman & Independent Director w.e.f.February 01 2017 due to ill health. The Board of Directors ('Board') placed on recordtheir deep appreciation for the valuable contribution rendered by Mr. Prateek Jatia &Mr R. G. N. Swamy during their tenure as Directors of the Company.
The Board on March 10 2017 appointed Mr. Vinod Jatia as Chairman of the Boardconsequent to resignation of Mr. R. G. N. Swamy.
The Board appointed Mr. S. N. Atreya as Additional (Independent) Director for a term offive years and Mrs. Namita Jatia as Additional Director of the Company w.e.f. March 102017. Mrs. Shruti Jatia Director was also appointed as Independent Director for a term ofthree years w.e.f. March 10 2017. The members of the Company have confirmed the aboveappointments of Mr. S. N. Atreya Mrs. Shruti Jatia and Mrs. Namita Jatia throughresolutions passed by postal ballot on May 11 2017.
Mr. Vinod Jatia resigned as Chairman & Managing Director of the Company w.e.f April25 2017 due to personal reasons. The Board of Directors placed on record their deepappreciation for the valuable contribution rendered by Mr. Vinod Jatia to the Companyduring his tenure as Chairman & Managing Director of the Company. Board at theirmeeting held on May 13 2017 appointed Mr. Vidip Jatia Director as the Managing Directorof the Company for a term of 3 years w.e.f May 13 2017. The Board also appointed him asChairman of the Board at the same meeting.
As per the provisions of the Companies Act 2013 Mr. Vidip Jatia will retire at theensuing AGM and being eligible seek re-appointment.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under the Actand Regulation 16 of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015.
During the year Five Board Meetings and four Audit Committee meetings were convenedand held the details of which are given in the Corporate Governance Report. Theintervening gap between the meetings was within the period prescribed under the CompaniesAct 2013.
21. DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 134 (3) (c) of the Companies Act 2013 withrespect to Directors' responsibility statement it is hereby confirmed:
i) That in the preparation of the annual accounts for the financial year ended 31stMarch 2017 the applicable Accounting Standards have been followed along with properexplanations relating to material departures;
ii) That the directors have adopted such accounting policies and applied themconsistently and made judgments and estimates that were reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the loss of the company for the year under review;
iii) That 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) That the directors have prepared the accounts for the financial year ended 31stMarch 2017 on a going concern basis.
v) That the proper financial controls were in place and that the financial controlswere adequate and were operating effectively
vi) That systems to ensure compliance with the provisions of all applicable laws andthat such systems were adequate and operating effectively
22. LISTING STATUS:
The company's shares are presently listed on BSE Ltd.
23. AUDIT COMMITTEE:
During the year under review consequent to changes in the Board the Audit Committeewas reconstituted by the Board on March 10 2017 comprising of Mr. S. N. Atreya Mr.Rishabh Kalati Mrs. Shruti Jatia and Mr. Vidip Jatia. Mr. S. N. Atreya Mrs. Shruti Jatiaand Mr. Rishabh Kalati are Independent Directors. Mr. S. N. Atreya is the Chairman of theAudit Committee.
24. AUDITORS & AUDITORS REPORT:
Pursuant to provisions of Section 139(1) of the Companies Act 2013 M/s. KCPL AndAssociates Chartered Accountants were appointed as Statutory Auditors ofthe Company tohold the office till the conclusion of the Annual General Meeting to be held during theyear 2019 subject to ratification at every Annual General Meeting.
The Company has received letter from the Statutory Auditors to the effect that theirappointment if made would be within the prescribed limit under Section 141 (3) (g) ofthe Companies Act 2013 and that they are not disqualified from the appointment.
Your Board recommends the ratification of appointment of M/s. KCPL And AssociatesChartered Accountants Mumbai as Statutory Auditors of the Company for the financial year2017-18 and to hold the office till the conclusion of the next Annual General Meeting tobe held during the year 2018.
There is one observation in the Auditors Report which is read as " The Companyhas made provision for gratuity as per current employee and salary instead of recognizingliability as per the present value of defined benefit obligation at the balance sheet datecalculated on the basis of actuarial valuation in accordance with Accounting Standard 15"Employee Benefits". The Consequential impact of adjustment if any owing tothis non compliance on the financial statement is presently not ascertainable".
The explanation of the Board on the observation made in the Auditor Report is asfollows "The Company has made adequate provision for gratuity liability as per thepayment of Gratuity Act and as the Number of employees are less the Company has notobtained actuarial valuation. In the absence of actuarial valuation the impact cannot beascertained."
25. SECRETARIAL AUDITOR:
Pursuant to provision of Section 204 ofthe Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed M/s Shivlal Maurya & Co. a Practicing Company Secretary firm to undertakeSecretarial Audit of the Company.
Accordingly the Secretarial audit of the Company for the financial year 2016-17 wasconducted by M/s Shivlal Maurya & Co.
The Report of the Secretarial Audit of the Company is annexed herewith as"Annexure - E". There were no reservation and qualification marked inSecretarial Audit Report which requires any explanation by the Board of Directors.
26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR OTHERS:
There are no significant and material orders passed by the regulators or others whichimpacts the going concern status and Company operations in future.
27. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:
The particulars as required under the provisions of Section 134 (3) (m) of theCompanies Act 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy and technology absorption have not been furnished considering thenature of activities undertaken by the Company during the year under review.
Foreign Exchange Earnings and Outgo
|Earning: ||Nil |
|Outgo: ||Marketing Expenses Rs. 1480288 |
28. SEXUAL HARASSMENT
The Company has Policy on Prevention of Sexual Harassment of Employees at work place. AComplaint Redressal Committee has been set up to redress complaints received regardingsexual harassment. All employees are covered under the policy. The Company has notreceived any complaint during the financial year.
29. CORPORATE SOCIAL RESPONSIBILITY:
The Company has constituted a Corporate Social Responsibility (CSR) Committee incompliance with Section 135 of the Companies Act 2013.
The Company has not initiated any Corporate Social Responsibility activities as thesaid provisions are presently not applicable to the Company.
The Board of Directors wish to place on record their sincere appreciation andacknowledge with gratitude the support and co-operation extended by all the Governmentagencies shareholders and employees at all levels and look forward for their continuedsupport.
| ||For and on behalf of the Board |
|Place: Mumbai ||Vidip Jatia |
|Date: 30th May 2017 ||Chairman & Managing Director |
| ||(DIN 06720329) |