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Country Condos Ltd.

BSE: 531624 Sector: Infrastructure
BSE 00:00 | 24 Feb 2.62 -0.13






NSE 00:00 | 24 Feb 2.75 -0.10






OPEN 2.75
VOLUME 53315
52-Week high 4.79
52-Week low 0.95
P/E 43.67
Mkt Cap.(Rs cr) 20
Buy Price 2.62
Buy Qty 73.00
Sell Price 2.62
Sell Qty 15.00
OPEN 2.75
CLOSE 2.75
VOLUME 53315
52-Week high 4.79
52-Week low 0.95
P/E 43.67
Mkt Cap.(Rs cr) 20
Buy Price 2.62
Buy Qty 73.00
Sell Price 2.62
Sell Qty 15.00

Country Condos Ltd. (COUNCODOS) - Director Report

Company director report


The Members of


The Directors have pleasure in presenting the 32 Annual Report of the Company togetherwith the Audited Accounts for the year ended 31 March 2019.

Financial Results

(Rs in Lakhs)
Particulars Year ended 31.03.2019 Year ended 31.03.2018
(12 Months) (12 Months)
Turnover 2033.09 2381.91
Profit / (Loss) 52.27 65.65
Balance brought forward 289.13 223.48
Balance carried forward 341.40 289.13

Financial Performance of the Company:

The Board would like to inform that the development of the Company's real estate &construction activities Income has been stable and has achieved a Turnover of Rs 2033.09Lakhs and has achieved a Profit of Rs 52.27 Lakhs.

During this year the Company had a Net Profit of Rs 52.27 Lakhs. The Net Profits of Rs52.27 has been transferred to General Reserves to strengthen the Reserves of the Company.Currently the accumulated P&L Account Surplus is Rs 341.40 Lakhs.

The Board of Directors noted and took on record the report of the business review andanalyzed the various options available and suitable in the present circumstances to theCompany. The Board decided that it was no longer cost effective to manufacture and producethe goods in the present un-remunerative market conditions with the help of presentundertaking. Hence the Board after due discussions and deliberations decided todiversify / proposed to diversify its activities into the area of Hotel & HospitalityEntertainment Tourism industry etc.

Number of meetings of the board:

4 (Four) Board Meetings held during the Financial Year 2018-19.

Share Capital:

The Paid-up Share Capital of the Company stands at Rs 77597300/- (Rupees Seven CroreSeventy Five Lakh Ninety Seven Thousand Three Hundred Only) as on 31 March 2019.

The entire Paid-up Share Capital of your Company is listed with both the StockExchange(s) namely M/s. BSE Limited (BSE) and M/s. National Stock Exchange of IndiaLimited (NSE).

Management Discussion and Analysis:

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 areport on the management discussion and analysis is enclosed herewith.


Additional information as required u/s 134 of the Companies Act 2013:

Information as required under section 134(3)(m) of the Companies Act 2013 read withRule 8 of the Companies (Accounts) Rules 2014 forming part of Directors Report for theyear ended 31 March 2019.

The information as per Section 134 of the Companies Act 2013 has to be presented:

A. Conservation of energy

(I) The steps taken or impact on conservation of Energy: The Company iscontinuously monitoring the consumption of energy and implements wherever necessary therequired measures for conserving it. (ii) The Steps taken by the Company for utilisingalternate sources of Energy: NIL

(iii) The Capital Investment on energy conservation equipments: NIL

B. Technology absorption:
(i) The efforts made towards technology absorption : No technology indigenous or foreign is involved.
(ii) The benefits derived like product Improvement cost reduction product Development or import substitution: : Not applicable
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the Financial year) : No technology has been imported during the year.
(a) The details of technology imported : Nil
(b) The year of import : Not applicable
(c) Whether the technology been fully Absorbed : Not applicable
(d) If not fully absorbed areas where absorption has not taken place and the reasons thereof; : Not applicable
(iv) the expenditure incurred on Research and Development. : Nil

C. Foreign exchange earnings and outgo:

2018-19 2017-18
Foreign Currency Earnings/Inflow NIL NIL
Foreign Currency Expenditure / Outflow NIL NIL

Extracts of Annual Return and other disclosures under Companies (Appointment &Remuneration) Rules 2014

The Extracts of Annual Return in Form No. MGT-9 as per Section 134 (3) (a) of theCompanies Act 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 ofCompanies (Management & Administration) Rules 2014 is enclosed as Annexure-I andforms part of this report.

Particulars of Employees:

Information as per Rule 5(1) of Chapter XIII Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014

Name of Director Designation Remuneration FY 19-18 Remuneration FY 17-18 % of remune- ration in 2019 as compared to 2018 Ration of remuneration to MRE
D. Krishna Kumar Raju Vice-Chairman & CEO 3600000 3600000 0% 16.67 times
Key Managerial Personnel other than Directors:
U. Gandhi Chief Financial Officer 2700000 2700000 0% 12.05 Times
J. Laxmikanth Company Secretary 718000 594000 20.88% 3.32 Times

1. The Median Remuneration of the employees of the Company during the financial yearwas Rs. 216000/- Per Annum.

2. In the financial year there was no increase in the median remuneration employees.

3. There are 54 permanent Employees on the Rolls of the Company as on 31 March 2019.

4. The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee.

5. The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year N.A. and

6. It is hereby confirmed that the remuneration is as per the remuneration policy ofthe Company.

The remuneration paid to the Key Managerial Personnel of the Company is as perremuneration policy Particulars of Employees receiving remuneration of Rs.10200000 ormore per annum or Rs.850000/- or more per month are given below:

Information as per Rule 5(2) of Chapter XIII Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. The Directors are to report that none of theemployees were in receipt of remuneration of Rs.10200000 or more per annum orRs.850000 or more per month.

Board of Directors:

In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Sri Y. Varun Reddy (DIN: 01905757) Vice-Chairman &Director of the Company who retire by rotation at the 32 Annual General Meeting and beingeligible offer himself for re-appointment.

Further Sri Y. Rajeev Reddy (DIN: 00115430) Chairman & Director of the Companywhose office terminates at this 32 Annual General Meeting has been re-appointed asNon-Executive Chairman of the Company for further period of 5 Years commencing from30.09.2019 up to 30.09.2024.

Further Sri G. Venkateshwar Rao (DIN: 02712599) Independent Director whose officeterminates at this 32 Annual General Meeting has been re-appointed for a second term asIndependent Director of the Company for further period of 5 Years commencing from30.09.2019 up to 30.09.2024 whose office is not liable to retire by rotation.

Further Sri S. Bal Reddy (DIN: 02712623) Independent Director whose office terminatesat this 32 Annual General Meeting has been re-appointed for a second term as IndependentDirector of the Company for further period of 5 Years commencing from 30.09.2019 up to30.09.2024 whose office is not liable to retire by rotation.

Further Sri A. VSB Laxmipathi Rao (DIN: 02733596) Independent Director whose officeterminates at this 32 Annual General Meeting has been re-appointed for a second term asIndependent Director of the Company for further period of 5 Years commencing from30.09.2019 up to 30.09.2024 whose office is not liable to retire by rotation.

Further Sri V K Ramudu (DIN: 02712577) Independent Director whose office terminates atthis 32 Annual General Meeting has been re-appointed for a second term as IndependentDirector of the Company for further period of 5 Years commencing from 30.09.2019 up to30.09.2024 whose office is not liable to retire by rotation.

Statement on Declaration given by Independent Directors under Sub-Section (6) ofSection 149 of the Companies Act 2013:

The Independent Directors have submitted the Declaration of Independence as requiredpursuant to Section 149 (7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in Sub-Section (6) of section 149 of Companies Act 2013.

Directors' Responsibility Statement:

Pursuant to the requirements under Section 134 of the Companies Act 2013 with respectto the Directors' Responsibility Statement the Board of Directors of the Company herebyconfirms:

(a) that in the preparation of the annual accounts for the Financial year ended 31March 2019 the applicable accounting standards have been followed;

(b) that the directors have selected such accounting policies and applied themconsistently and made judgments 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 31 March 2019 andProfit and Loss Statement of the Company for that period;

(c) that the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) that the directors have prepared the annual accounts for the financial year ended31 March 2019 on a going concern basis;

(e) that the directors have laid down internal controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectively;

(f) that the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively;

Related Party Transactions :

All the related party transactions are entered on arms length basis and are incompliance with the applicable provisions of the Act and the listing agreement. There areno materially significant related party transactions made by the Company during theFinancial Year 2018-19 which may have the potential conflict with the interest of thecompany at large.

Thus disclosure in Form AOC-2 is not required.


M/s. P C N & Associates Chartered Accountants were appointed as Statutory Auditorof the Company in 30th Annual General Meeting for Five Consecutive years and shall holdthe office until the conclusion of the 35th Annual General Meeting as per section 139 ofCompanies Act 2013.

The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.

Types of Committees:

The Company has 3 different Committees they are: a) Audit Committee Composition ofthe Audit Committee:

The Audit Committee for the year was constituted of the following members

Name of the Member Category
1.Sri G. Venkateshwar Rao Chairman
2.Sri S. Bal Reddy Member Independent Non- Executive
3.Sri A. VSB Laxmipathi Rao Member Directors

Mr. J. Laxmikanth Company Secretary has acted as the Secretary to the Committee.

b) Nomination & Remuneration Committee

The Nomination and Remuneration Committee for the year was constituted of the followingmembers:

Name of the Member Category
1.Sri G. Venkateshwar Rao Chairman
2.Sri S. Bal Reddy Member Independent Non- Executive
3.Sri A. VSB Laxmipathi Rao Member Directors

The Company follows a policy on remuneration of directors and other senior managerialpersonnel's. The Policy is recommended by the Nomination and Remuneration Committee andapproved by the Board. More details of the same are given in the Corporate GovernanceReport.

c) Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted of the following Directors:

Name of the Member Category
1.Sri G. Venkateshwar Rao Chairman
2.Sri S. Bal Reddy Member Independent Non-
3.Sri A. VSB Laxmipathi Rao Member Executive Directors

Mr. J. Laxmikanth Company Secretary has acted as the Secretary to the Committee.

Statement pursuant to the Listing Agreement:

The Company's Equity shares are listed at

1. BSE Limited Mumbai.

2. National Stock Exchange of India Limited Mumbai.

The Company has paid the Annual Listing Fees to the above Stock Exchanges for the year2019-20.

Corporate Governance:

As required by Regulation 27 of SEBI Listing Regulations a separate sectioncontaining the Report on Corporate Governance together with the Certificate on thecompliance with the conditions of Corporate Governance issued by the Auditors of theCompany is appended hereto and they form part of this Annual Report.

Secretarial Audit Report

The Board of Directors has appointed M/s. Gopal Dhanaji & Associates CompanySecretaries represented by Mr. Gopal Biradar Dhanaji (Membership No. FCS 7676) PracticingCompany Secretary as the Secretarial Auditor to conduct Secretarial Audit of the Companyfor the Financial year ended 31 March 2019 incompliance with the provisions of Section204 of the Companies Act 2013.

The report of the Secretarial Audit Report by M/s. Gopal Dhanaji & AssociatesCompany Secretaries represented by Mr. Gopal Biradar Dhanaji Practicing CompanySecretary in Form MR-3 is enclosed as Annexure II to this Report.

The report on secretarial audit does not contain any qualification or adverse remark.

Vigil Mechanism/Whistle Blower Policy:

The Board of Directors of the Company has adopted Whistle Blower Policy. This policy isformulated to provide an opportunity to employees and an avenue to raise concerns and toaccess in good faith the Audit Committee to the highest possible standards of ethicalmoral and legal business conduct and its commitment to open communication in case theyobserve unethical and improper practices or any other wrongful conduct in the Company toprovide necessary safeguards for protection of employees from reprisals or victimizationand to prohibit managerial personnel from taking any adverse personnel action againstthose employees.

Details of adequacy of internal financial controls

The company has in place adequate internal financial controls with reference tofinancial statements. In addition the Company has also Re-appointed M/s. Sankar &Raja Chartered Accountants as the Internal Auditors of the Company to conduct the regularInternal Audit and place its Report before the Audit Committee. During the year suchcontrols were tested and no reportable material weakness in the design or operation wasobserved.

Change in the Nature of Business:

There has been no change in the nature of business of the Company during the financialyear under review except that the Company has discontinued the Hospitality activity from 1October 2018 and has leased out theassets of the division. The Company is presentlycarrying on only real estate activity.

The details of significant material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future:

No significant or material orders were passed by the regulators or courts or tribunalsimpacting the going concern status and company's operations in future during the yearunder review.

Fixed Deposits:

The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding on the date of the Balance sheet.

Material changes and Commitments:

There were no material changes and commitments in the business operations of theCompany from the Financial Year ended 31 March 2019 to the date of signing of theDirector's Report.

Risk Management Policy :

The Company has policy for identifying risk and established controls to effectivelymanage the risk. Further the company has laid down various steps to mitigate theidentified risk.

Mechanism for Board Evaluation:

Regulations 27 of the SEBI Listing Regulations states that the board shall monitor andreview the board evaluation framework. The Companies Act 2013 states that a formal annualevaluation needs to be made by the Board of its own performance and that of its committeesand individual directors. Schedule IV of the Companies act 2013 states that theperformance evaluation of the independent directors shall be done by the entire Board ofDirectors excluding the director being evaluated.

The Directors evaluation was broadly based on the parameters such as understanding ofthe Company's vision and objective skills knowledge and experience participation andattendance in Board/ Committee meetings; governance and contribution to strategy;interpersonal skills etc.

The Board has carried out the annual performance evaluation of its own performance theDirectors individually as well as evaluation of the working of its Board Committees. Astructures questionnaire was prepared covering various aspects of the Board's functioningsuch as adequacy of the composition of the Board and its Committees Board Cultureexecution and performance of specific duties obligations and governance.

A meeting of the Independent Directors was also held which reviewed the performance ofNon-Independent Directors Chairman and the quality quantity and timelines of flow ofinformation between the Company management and Board.

Disclosure pertaining to sexual harassment of women at workplace:

During the Financial year ended 31 March 2019 the Company has neither received anycomplaints nor there are any pending complaints pertaining to sexual harassment.

Subsidiary Companies:

Pursuant to Section 129(3) of the Companies Act 2013 Company does not have SubsidiaryCompany. Thus disclosure in Form AOC-1 is not required.

Management and Discussion Analysis Report


The Real Estate Sector is one of the most globally recognized sectors. Its impact onthe overall economy has been deepening over the past few years mainly because of therising population on the demand side and enhanced government initiatives as an enabler.The growth of this sector is well complemented by the growth of the corporate environmentand the demand for office space as well as urban and semi-urban accommodations. Theconstruction industry ranks third among 14 major sectors in terms of direct indirect andinduced effects in all sectors of the economy.

The Indian economy continued to exhibit steady growth and remained among the fastestgrowing emerging economies with a focus on the continued implementation of structural andfinancial sector reforms and efforts to reduce public debt.

The Central Bank continuously eased the monetary policy following recent cuts ininterest rates. However full benefits are yet to be transmitted to the industry whichmay lead to increased investments. Strong measures are being implemented to strengthen thecountry's financial sector (especially banks) through the accelerated resolution ofnon-performing assets under a simplified bankruptcy framework.

The benefits of recent structural reforms like demonetization GST and ongoing bankrecapitalization would enhance economic stability.

In India real estate is the second largest employer after agriculture and is slated togrow at 30 percent over the next decade. It is also expected that this sector will incurmore non-resident Indian (NRI) investments in both the short term and the long term.Bengaluru is expected to be the most favored property investment destination for NRIsfollowed by Ahmedabad Pune Hyderabad Chennai Goa Mumbai Delhi and Dehradun.

Turning to the domestic economy GDP growth for 2018-19 has been estimated at 6.8%.Gross fixed capital formation growth has declined sharply to 3.6% after having beenpreviously in the double- digits. Private consumption growth moderated. However theoverall slowdown in growth was cushioned by a large increase in the government's finalconsumption expenditure.

Reserve Bank of India has estimated GDP growth for 2019-20 at 7% - in the range of6.4-6.7% in the first half of the fiscal and 7.2-7.5% in the second half of the fiscal.


The global real estate market is expected to generate a revenue of USD 4263.7 billionby 2025 according to a new report by Grand View Research Inc. due to the increasingdemand for housing real estate space rapid urbanization through migration in search forbetter amenities etc. Rapid economic development in the developing regions and countrieslike India China and many African countries have enhanced income levels and helped inthe real estate market.

According to United Nations approximately 50% of the population lives in urban areasand this figure is set to reach up to 65% in the forecast period owing to the migrationinto cities which turn into megacities with bustling urban amenities and lifestyle.

Global economic activity lost pace in FY'19 reflecting a further slowdown in globaltrade and manufacturing activity. While economic activity in the US initiallystrengthened factory activity and retail sales moderated. Economic activity in the Euroarea remained weak due to muted industrial activity and subdued business confidence.Economic activity slowed in a number of emerging market economies as well including inChina.

The strengthening of the US dollar led to weakening gold prices; however gold pricespicked up in May 2019 on escalating trade tensions reviving its demand as a safe havenasset. Inflation remained below the target in several economies.


The Indian real estate sector witnessed a slew of structural transformations led byReal Estate (Regulation and Development) Act 2016 (RERA) Demonetization and GST. In thenear-term these measures generated sectoral tailwinds which are expected to increasetransparency and confidence in the sector.

According to reports India's real estate sector is expected to grow to US$ 1 trillionby 2030 accounting for nearly 13% of the country's GDP. The catalysts for this growth canbe attributed to rapid urbanization increasing emergence of nuclear families and risinghousehold incomes.

The country's commercial realty segment however continues to enjoy increased capitalflows. The sector also witnessed the advent of new niche markets comprising co-workingspaces warehousing student housing and senior living.

The launch of Real Estate Investment Trusts (REITs) in India has helpedinstitutionalize the commercial sector empowering developers to mobilize patientlong-term capital to catalyze growth across the coming decade. According to a JLL reportinstitutional investments during the 2014-2018 period doubled from US$ 9.4 billion toalmost US$ 20.3 billion compared to the 2009-2013 period.

India's real estate sector is projected to reach $180 billion by 2020 from $126 billionin 2015 according to a joint report by CREDAI and JLL. Housing sector is expected tocontribute around 11 per cent to India's GDP by 2020. Investment inflows in the housingsector since 2014 have been Rs 590 billion about 47 per cent of the total invested moneyin real estate it said.

India is expected to witness an upward rise in the number of real estate deals in 2019on the back of policy changes that have made the market more transparent.

Residential Segment

During the last few years government decisions like demonetization GST RERA and theBenami Transactions (Prohibition) Amendment strengthened the end user market moderatingspeculation in physical markets.

The Government remains committed to enhance the role of affordable housingstrengthening its Housing for All commitment. In the recent past this industry segmentwas encouraged through infrastructure status refinancing options and tax incentives.

The year under review was marked by stability right-sizing and right pricing of newproducts. Increased transparency and confidence due to recent measures strengthened thehome buyer's sentiment. According to reports this segment grew 76% YOY in terms of unitslaunched in calendar year 2019 and a modest 6% YOY growth in sales.

Market traction could have been better but was impacted by the recent turmoil in theNBFC sector which caused some stress to cash starved developers. Whilst the launches andsales there was limited upward movement in realizations and pricing. Stronger traction waswitnessed for completed projects owing to lower risk and non-applicability of GST oncompleted inventory enhancing attractiveness.

Office Segment

The country's Commercial realty segment reported strong growth. Capital inflowsvalidated confidence in the country's growth story. As per reports India's grade A officespace offering stood at a substantial 49.26 million square meter (msm) [530 msf] andlikely to surpass the previous benchmark of 65.06 msm (700 msf).

India's office space absorption is expected to rise gradually across the near-to-mediumterm owing to robust economic fundamentals and a positive investor sentiment.

The Commercial Office space is marked by evolving occupier trends mostly driven by arise in co-working demand. Co-working spaces no longer address only start-ups and SMEsrather a substantial demand emanating from large mainstream Corporates. The principaldrivers of co-working spaces comprise savings in upfront operational costs and aflexibility in scaling or downsizing requirements. This trend is also helping developersin launching small office spaces and widening the tenant mix. Besides quality standardsin commercial offices are rising marked by increased safety sustainability and wellnessas demanded by multinational tenants and space owners.

Retail Segment

India's retail industry continues to get progressively organised moving towardsexperiential retail where the key to success will be increasingly influenced by competentmall management and a healthy tenant mix.

As per recent JLL reports the Grade A retail stock is expected to grow to nearly 9.57msm (103 msf). Delhi-NCR leads commercial realty stock creation accounting forapproximately 32% of the total retail space in India.

Besides quality-driven malls have been consistently reporting superior occupancylevels and steady growth in trading densities. The changing landscape of the retailsegment has prompted the adoption of consumer analytics to decode consumer preferences andenhance the shopping experience.


The Government of India along with the governments of the respective states has takenseveral initiatives to encourage the development in the sector. The Smart City Projectwhere there is a plan to build 100 smart cities is a prime opportunity for the realestate companies. Below are some of the other major Government Initiatives:

1. Pradhan Mantri Awas Yojana

Some of the recent reforms and policies taken by the Government of India related toreal estate sector include the Pradhan Mantri Awas Yojana (PMAY) with the governmentsanctioning over 3.1 million houses for the affordable housing segment in urban regionstill November 2017. Of this about 1.6 million houses have been grounded and are atvarious stages of construction and about 0.4 million houses have been built under themission.

2. PPP policy for affordable housing

PPP policy for affordable housing was also announced on 21 September 2017 foraffordable housing segment to provide further impetus to the ambitious ‘Housing forall by 2022' mission.

3. Real Estate (Regulation & Development) Act 2016

With the enactment of Real Estate (Regulation & Development) Act 2016 it isanticipated that accountability would lead to higher growth across the real estate valuechain while compulsory disclosures and registrations would ensure transparency.

4. Goods And Service Tax

New norms stipulated a one-time option to continue with existing slabs (effective rateof 12% for regular and 8% for affordable housing) with input tax credit or switch to newslabs (5% for regular and 1% for affordable housing) without input tax credit forunder-construction or ongoing realty projects.

New projects mandatorily have to be in 5% slab for regular segment and 1% slab foraffordable segment without any input tax credit. New norms are applicable for residentialproperties only while there has been no change for commercial properties.


The year 2019 as we all know has set a new benchmark for the Indian real estate sector.The implementation of demonetisation in November 2016 had the entire economy reeling untilthe first quarter of 2017 and the realty segment was not pardoned either with land salesreaching stagnation due to more involvement of cash transactions. However this eventuallyhelped reduce land prices thereby making the end products more affordable to theconsumers. By April 2017 when the markets were looking to stabilise RERA and GST wereannounced in succession which again caused some inertia due to confusion among buyers anddevelopers alike with both awaiting the final set of RERA notifications/legislation fromtheir respective state regulatory bodies.


1. Different Tax Incentives:

New norms stipulated a one-time option to continue with existing slabs (effective rateof 12% for regular and 8% for affordable housing) with input tax credit or switch to newslabs (5% for regular and 1% for affordable housing) without input tax credit forunder-construction or ongoing realty projects.

New projects mandatorily have to be in 5% slab for regular segment and 1% slab foraffordable segment without any input tax credit. New norms are applicable for residentialproperties only while there has been no change for commercial properties.

2. Past year changes to shape what's to come:

There have been many changes set by the legislature including RERA and GST which willinfluence the market in 2019 as well. For both home buyers and builders these changeswill create a different outlook on how business is done. There were some unavoidableissues for home buyers when it came to investing in under-developed projects but now withfull transparency home buyers and designers can have a simple business.

3. PMAY to take care of housing for all:

The yearning design of the Prime Minister to construct homes for all by 2022 willdefinitely get a noteworthy change financially with $1.3 trillion. This will make 60million new houses and 2 million occupations throughout the following 4-5 years. Each taskis presently getting enrolled under PMAY conspire; the urban real estate segment will seea significant lift in 2019. Affordable housing could rise as the characterizing pattern in2019.

4. Clean Capital:

Because of the absence of transparency in the area it was hard to get a spotlesscapital from monetary foundations. In any case circumstances are different since RERA andDemonetization have had an impact as there has been an entire change in the process ofpurchasing and offering of a home. Investors and monetary foundations have opened up theroad for clean capital. This unquestionably demonstrates the positive picture in 2019.


1. Job loss in other sectors affect the Indian real estate sector majorly:

People earning in the bracket of Rs. 2 million and Rs. 8 million per annum are themajor investors in the Indian real estate sector. They thus make up for a huge portion ofthe factors responsible in the sector's growth. Most people in this category are employeesin IT and other service sector companies. According to IIFL (2017) India's IT and BPOsector employs over 4 million people. However recently according to many reportsemployees working in the middle management of these industries are at a higher risk of jobloss due to increased automation and artificial intelligence tools (Money Control 2019).This affects their ability to purchase a premium or mid-premium house. Thus the issue ofjob loss has hit the sector directly and demand for housing will continue to drop(particularly in cities) as a result.

2. Inventory pile-up in the Indian real estate sector:

The pile up has been caused due to a number of reasons like fall in demand litigationissues failure to deliver projects on time poor planning etc. This has resulted into250000 units of unsold residential houses in Delhi-NCR alone. Most of the buildersconsider unsold flats as work in progress but until the property is sold they have to payhigh interest rate. This also delays launch of new projects.

3. Low rental yield from the Indian real estate sector

Rental yields in India is among the lowest in the world at 2.2% (Equity master 2016).This makes buyers looking for property only as investment somewhat skeptical ofpurchasing. Also gross rental income in the major cities Mumbai New Delhi and Bangaloreare quite poor despite a consistent rise in property prices (Shanu 2016; Singh 2017).This indicates that real estate in India is overpriced in some locations making it a dullinvestment option. Thus low rental yield is a major challenge for real estate.

4. High interest rate :

While compared to countries such as USA and the UK India's banks are found to giveloans at 7-8% higher rates. Currently the rate of interest hovers around 10% which is 3-4times higher than the interest rate charged by US banks for purchasing a property (IBEF2008). The higher the interest rate the lower the demand for property causing a rippleeffect.

5. Difficulty in getting bank loans and delay in possession:

Home loan seekers commonly face difficulties in procuring a loan from banks andnon-banking financial institutions (NBFCs). The top reason is facing rejection ofapplication due to lack of knowledge about documentation and lack of required creditscore. Another reason is lack of required sum for down payment on the loan. Furthermoredilemma in choosing the interest rate time taken for property evaluation and the lengthyloan disbursement process (Financial Express 2016). In most cases banks approve loansquickly they take much longer to disburse the loan. During this period customers arefaced with increased costs and waning interest on the property. Despite the launch offriendly mobile applications and instant customer service this issue remains grave in thefinancial sector.


1. Changing demographics:

Aging and urbanizing populations are changing competitive dynamics and creating newmarkets in real estate.

2. Pricing uncertainty:

With few transactions taking place in the real estate market valuations are a problemfor existing owners as well as buyers and sellers.

3. Global economic and market fluctuations:

Due to capital flows and business expansion the real estate industry has become atruly global industry and as such is increasingly susceptible to global marketfluctuations.

4. Economic vulnerability and regulatory risks in developing markets: developingmarkets are a key focus for global real estate firms but regulatory risk in these marketsis constantly changing as authorities seek to jump start economies.


2019 is expected to be a year of consolidation of products and services in the sector -with the impacts of all policy initiatives taken in 2019-20 beginning to take shape in thecoming year. More joint ventures/joint developments will be the order of the day withfinancially distressed developers being taken over by larger players and presenting theindustry with a fresh line up of competitors. Completion of existing projects will beprioritized over launching new ones hence 2019 looks promising for a good supply ofhouses across major Indian markets. In order to achieve this developers will beremodeling their business processes to streamline delivery and allied services withoutstretching themselves too much in terms of debt or scope of work.

The Government's efforts to boost "affordable housing" by conferring"infrastructure status" to this segment and announcing various tax incentiveswill continue to attract more prominent developers to realign their products to compete inthis category. The Union Cabinet's decision to increase the carpet area of affordableunits to 120 sq.m and 150 sq.m for MIG-I (income category 6-12 Lakhs per annum) and MIG-II(income category of 12-18 Lakhs per annum) segments respectively coupled with an interestsubsidy of upto 4% will benefit both buyers and sellers as options increase for theformer and inventories are cleared for the latter. Affordable housing will thereforebecome an important segment in every developer's portfolio in 2019. Developers could alsobe focusing on their niche expertise in the new year specializing in the various segmentsof real estate e.g. plotted developments residential projects townships andcommercial spaces; and hence specialist service providers could be emerging in each ofthese categories.


The Company has an adequate internal control system corresponding with the size andnature of its business. The system of internal control is supported by documentedpolicies guidelines and procedures to monitor business and operational performance whichare aimed at ensuring business integrity and promoting operational efficiency.

The Company has an Internal Auditor who oversees the entire internal audit function.However given the size of its operations in terms of nature of its business it also usesservices of independent audit firms to conduct periodic internal audits in line with anaudit plan that is drawn at the beginning of the year. This audit plan prepared by theInternal Auditor is approved by the Audit Committee and the Board of Directors.

Internal audit reports are placed periodically before the Audit Committee of the Boardof Directors which reviews the adequacy and effectiveness of the internal control systemsand suggests improvements for strengthening them.


The Company is primarily engaged only in the business of sale of Plots under RealEstate Segment and the Hospitality Services to its Mysore Road Club located at Bengaluruin India has been stop with effect from 1 October 2018. As such the Company operatesonly in a single segment namely Real Estate Segment and Hospitality Segment has beendiscontinued and was carried out till half year only.

As per the Indian Accounting Standard 108 on Segment Reporting the Board would like toinform that under the real estate segment total Revenue was Rs. 1915.82 Lakhs only &Hospitality segment total Revenue was Rs. 117.27 Lakhs only. The Total Profit Before Taxfor the Company was Rs. 75.51 Lakhs only & Total Profit After Tax for the Company wasRs. 52.27 Lakhs only.


The Company achieved a turnover of Rs. 2033.09 Lakhs only and The Total Profit BeforeTax for the Company was Rs. 75.51 Lakhs only & Total Profit After Tax for the Companywas Rs. 52.27 Lakhs only.

Given the highly specialized nature of the Company's business and the large number oflocations where it operates attracting and nurturing the right talent is at the core ofyour Company's strategy for success and growth. Accordingly the HR function is organisedinto three key areas: customer acquisition resort operations and corporate functions.During the year focus was on building capabilities through a structured approach to drivethe Company's performance. This encompassed implementing changes across all components ofthe HR function: recruitment employee engagement reward and recognition skillupgrading talent management organisational culture and employee relations. The Companyorganizes a TOP GUN training program where promising young employees are trained to becomenext level managers. There are 54 permanent Employees on the Rolls of the Company as on 31March 2019.


Presently the Company enjoys cordial relations with employees and believes that humanresources are invaluable asset. The Board wishes to place on record its appreciation toall employees for their efforts and cooperation for the performance and growth of businessduring the year.


There were no fresh loans guarantees or investments made by the Company under Section186 of the Companies Act 2013 during the year under review.

The details of the existing Guarantees are given below: a) The Company has given theCorporate Guaranty to Vijaya Bank Bank of India and Union Bank of India in respect ofTerm Loan availed by M/s. Country Club Hospitality & Holidays Limited.

The details of the Property given as Collateral securities are as follows. Company'sImmovable property situated at No.20/1-524 Sy No: 20/1 Geddanahalli Attibele HobliAnekal Taluk Bangalore District Pin-562107. b) The Company has given the CorporateGuaranty to Central Bank Of India in respect of Term Loan availed by M/s. Country ClubHospitality & Holidays Limited.

The details of the Property given as Collateral securities are as follows.

Company's Immovable Property Situated at Sy No:101/3102/3103/1103/2 & 103/17Kumbalgodu Kengeri Hobli beside Mc.dowell Unit near Mysore Road under BBMP Bangalore.


Your Directors thank the Company's customers vendors investors business associatesbankers and other agencies for their support to the Company.

We wish to place on record our appreciation for the untiring efforts and contributionsmade by the employees at all levels to ensure that the Company continues to grow andexcel.

Finally your Directors record their deep sense of gratitude to all the shareholders forthe abundant confidence reposed in the Board of Directors.

For and on behalf of the Board
Date : 13 th August 2019 DIN: 01905757 DIN: 00115553