Your Directors are pleased to present their 56th Annual Report together withthe Audited Financial Statements Board's Report and Annexures for the year ended March31 2018.
STATE OF COMPANY'S AFFAIRS AND FINANCIAL SUMMARY:
Scenario - The demand for Company's Business Centre remained low and did not witnessmuch change during the FY 2017-18. It was evident that a few large developers with apan-India presence dominate the market due to which demand for commercial space is not ashigh as that of residential and retail space. The policy changes that the government isimplementing should help improve business confidence in India resulting in robust officeleasing demand in coming years.
Financial Summary - The income of the Company from its operations remained stable atRs. 12.60 lakhs as compared to that in FY 2016-17. Other income of the Company declinedduring the year to Rs. 30.30 lakhs as against Rs. 67.42 lakhs for FY 2016-17. However theincome for FY 2016-17 appears to be inflated because figures of FY 2016-17 have beenadjusted on account of taxes financial instruments and revenue recognition to make itcomparable with IndAS compliant statements for F.Y. 2017-18. Loss during the year stood atRs. 37.45 lakhs as against Rs. 31.76 lakhs in the previous year.
As notified by the Ministry of Corporate Affairs the Company adopted Indian AccountingStandards ('Ind AS') with effect from April 01 2017. Accordingly financial statements ofthe Company are prepared with comparative data for the year ended March 31 2017 incompliance with 'Ind AS'.
The Equity Shares of the Company are listed at the BSE Ltd. The Company has paid theAnnual Listing Fees to the Bombay Stock Exchange for the year 2018-19.
EXTRACT OF ANNUAL RETURN
Details forming part of the extract of the Annual Return in form MGT 9 is annexedhereto as "Annexure A".
MEETINGS OF THE BOARD
During the year under review 4 (Four) meetings of the Board of Directors were helddetails of which are set out in the Corporate Governance Report which forms a part of thisReport.
Detailed composition of the mandatory Board committees namely Audit CommitteeNomination and Remuneration Committee and Stakeholders Relationship Committee number ofmeetings held during the year under review and other related details are set out in theCorporate Governance Report which forms part of this Report.
There have been no situations where the Board has not accepted any recommendation ofthe Audit Committee.
DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134 OF THE COMPANIES ACT2013
The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of Section 134(3) (c) read with Section 134(5) of the Companies Act 2013. Asspecifically required under Section 134 of the Companies Act 2013 your Directors statethat:
a) in the preparation of the annual accounts for the financial year ended March 312018 the applicable accounting standards had been followed and there were no materialdepartures;
b) the directors had 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 at the end of the financial year as atMarch 31 2018 and of the loss of the company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS OF THE COMPANY UNDER SECTION 149(6)OF THE COMPANIES ACT 2013
The Company has received declarations as required under Section 149(7) of the CompaniesAct 2013 from all its independent directors stating that they meet the criteria ofindependence pursuant to Section 149(6) of the Companies Act 2013 ("the Act")viz;
a. Mr. H.C. Dalal
b. Ms. Shruti Joshi
c. Mr. Prem Kapil
d. Mr. Vimal Kejriwal
The Board has at its Meeting held on May 23 2018 confirmed that in its opinion theindependent directors of the Company possess the appropriate balance of skills experienceand knowledge as set out in Section 149(6) of the Act.
PECUNIARY RELATIONSHIP OR TRANSACTIONS OF THE NON-EXECUTIVE DIRECTORS AND DISCLOSURESON THE REMUNERATION OF THE DIRECTORS
All pecuniary relationship or transactions of the non- executive Directors vis-a-visthe Company along with criteria for such payments and disclosures on the remuneration ofthe Directors along with their shareholding are disclosed in Corporate Governance Reportand Form MGT-9 which forms part of this Report.
NOMINATION & REMUNERATION POLICY
The Board of Directors has on the recommendation of the Nomination and RemunerationCommittee formulated a policy on "Appointment Training Evaluation and Remunerationof Directors Key Managerial Personnel and Senior Management Personnel". This policyinteralia covers the requirements specified under Section 178(3) of the Act comprising ofcriteria for determining qualifications positive attributes and independence of adirector etc.
The Policy provisions covering the requirements under Section 178 of the Act are givenas Annexure B to this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not given any loans nor provided any guarantee under Section 186 ofCompanies Act 2013.
Details of investments made during the year are stated in the notes to FinancialStatements.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business.
The Company has formulated a Policy on related party transactions. This policy asapproved by the Board is uploaded on the Company's website on the below link:
The Company has not entered into any transaction with related parties during the yearunder review which requires reporting in Form AOC - 2 in terms of Companies Act 2013 readwith Companies (Accounts) Rules 2014.
TRANSFER TO RESERVES
The Company has not transferred any sum to General Reserve in view of loss incurredduring the year ended March 31 2018.
In view of the loss incurred by the Company the Directors regret their inability torecommend dividend.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the end of the financial year on March 31 2018 towhich the financial statements relate and the date of this report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information to be furnished under Section 134(3) (m) of the Companies Act 2013read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished below.
Conservation of Energy: The Company is engaged in the Business Centre activityunder which its operations do not account for substantial energy consumption. However theCompany has taken all necessary steps to conserve energy. The management has ensured thatall these measures are complied with.
Technology Absorption: The provisions relating to technology absorption are notapplicable to the Company.
|Foreign exchange: || |
|Foreign Exchange Earnings ||: NIL |
|Foreign Exchange Outgo ||: NIL |
The Company has laid down a well defined risk management mechanism covering the riskmapping and trend analysis of both business and non-business risks risk exposurepotential impact and risk mitigation process. The Audit Committee of the Board wasdesignated under the SEBI LODR to review and monitor the risks associated with the Companyand measures to mitigate the same. Accordingly it periodically reviews the risks andsuggests steps to be taken to manage/ mitigate the same through a properly definedframework.
CORPORATE SOCIAL RESPONSIBILITY
The Company doesn't fall under the categories of companies required to constitute theCorporate Social Responsibility (CSR) Committee as per section 135 of the Companies Act2013. Therefore the Company has neither constituted CSR Committee nor has it developed orimplemented any Policy on Corporate Social Responsibility.
CHANGES IN DIRECTOR AND KEY MANAGERIAL PERSONNEL
Mr. Kishore Shete Whole-time Director retires by rotation and being eligible offershimself for re-appointment at the ensuing Annual General Meeting.
Mr. Kishore Shete had resigned as Whole-time Director with effect from August 20 2017and continued to act as director from September 01 2017 upto February 07 2018. Furtherin meeting of the Board of Directors held on February 07 2018 he was re-appointed as theWhole-time director to hold office from February 07 2018 upto March 31 2019 upon therecommendation of the Nomination and Remuneration Committee.
Key Managerial Personnel:
Mr. Abhay Vasant Nerurkar resigned as the Chief Financial Officer with effect from July01 2017.
Mr. Rajesh Desai was appointed as the Chief Financial Officer of the Company witheffect from November 01 2017.
The Company does not have any subsidiary/joint venture/ associate.
Accordingly there were no companies which have become or ceased to be itssubsidiaries joint ventures or associate companies during the year.
The Company has not accepted any deposits during the year.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS
There are no significant and material orders passed by the Regulators or Courts orTribunals impacting the going concern status and company's operations.
The Company has received eviction notices from the National Insurance Company Limited(NIC) owner of Commercial Union House property occupied by the Company as its registeredoffice. The status of the matter is dormant since February 2015.
CHANGE IN THE NATURE OF BUSINESS
The Company is engaged in the business of providing Business Centre facilities. Duringthe year under review there was no change in the nature of the business.
INTERNAL FINANCIAL CONTROL
Details in respect of adequacy of internal financial controls with reference to theFinancial Statements are stated in Management Discussion and Analysis which forms part ofthis Report.
INFORMATION PURSUANT TO RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
|1 The ratio of the remuneration of each director to the median remuneration of the employees of the company excluding Managing Director for the financial year ||Mr. H.N. Singh Rajpoot(Chairman) - 0.009184:1 |
| ||Mr. H.C. Dalal - 0.012425:1 |
| ||Ms. Shruti Joshi - 0.010804:1 |
| ||Mr. Prem Kapil - 0.007023:1 |
| ||Mr. Vimal Kejriwal - 0.001080:1 |
| ||Mr. Kishore Shete(Whole-time Director) - 0.470223:1 |
|2 The percentage increase in remuneration of each director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the financial year; ||Mr. H.N. Singh Rajpoot(Chairman) - NIL |
| ||Mr. H.C. Dalal - NIL |
| ||Ms. Shruti Joshi -17.65% |
| ||Mr. Prem Kapil - 18.18% |
| ||Mr. Vimal Kejriwal - NIL |
| ||Mr. Kishore Shete (Whole-time Director) - 4.239% |
| ||Mr. Abhay Vasant Nerurkar (CFO upto June 30 2017) - Nil |
| ||Mr. Rajesh Desai (CFO w.e.f. 01.11.2017) - Not Applicable |
| ||Ms. Aayushi Mulasi (Company Secretary) - NIL |
|3 The percentage increase in the median remuneration of employees ||No increase. |
|4 The number of permanent employees on the rolls of company ||2 employees as on March 31 2018. |
|5 Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration ||Not applicable to the Company. |
|6 Affirmation that the remuneration is as per the remuneration policy of the company. ||The remuneration to employees of the Company is as per the remuneration policy of the Company. |
The Company does not have any employee whose particulars are required to be givenpursuant to the provisions of Section 197 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Audit Committee's terms of reference inter alia include vigil mechanism under whichwhistle blower policy has been formulated in terms of Section 177 (10) of the CompaniesAct 2013 and in compliance with Chapter II read with Schedule V of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Company has adopted thesaid Whistle Blower policy in the meeting of Board of Directors held on August 12 2014.The Whistle Blower mechanism provides for Directors and employees to report concerns aboutunethical behavior actual or suspected fraud or violation of Company's Code of Governanceand Ethics. The Policy is uploaded on the website of the Company on the link below:
FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Company familiarized its independent directors on their roles rightsresponsibilities in the Company nature of the industry in which company operatesbusiness model of the company changes in laws applicable to the Company etc. A note onthe familiarization program adopted by the Company has been uploaded on the Company'swebsite on the link below:
FORMAL ANNUAL PERFORMANCE EVALUATION
The Company has carried out the formal annual evaluation of the performance of theBoard committees of the Board i.e. Audit Committee Nomination and RemunerationCommittee and Stakeholders Relationship Committee the Chairman and of each of thedirectors individually.
The said evaluation was based on the following parameters stated in the Policy onAppointment Training Evaluation and Remuneration of the Directors Key ManagerialPersonnel and Senior Managerial Personnel laid down by the Nomination & RemunerationCommittee and adopted by the Company:
(a) attendance at meetings of the Board and Committees thereof
(b) participation in meetings of the Board or Committee thereof
(c) contribution to strategic decision making
(d) review of risk assessment and risk mitigation
(e) review of financial statements and business performance
(f) contribution to the enhancement of brand image of the Company.
INTER SE RELATIONSHIPS BETWEEN THE DIRECTORS
There are no relationships between the Directors inter se.
MANAGEMENT DISCUSSION AND ANALYSIS
a) Industry Structure and Developments:
Growth of Real estate and Infrastructure sector has been slow in the last few years.While the residential space continues to face headwinds in the form of muted sales andsubdued consumer demand commercial real estate market has recovered with improvements inboth demand and supply. Things are looking up now with changes in the economy and variousinitiatives announced by the Government but the sector still faces a challengingenvironment due to lackluster demand scenario various policy hurdles delay in approvalcycle continued high borrowing costs both for industry and the consumer.
In particular in case of commercial spaces operating model has shifted from sales toa lease and maintenance. Even though Mumbai NCR Bengaluru account for about 60 per centof the demand for office spaces in 2017-18 business activities are gradually shiftingfrom Central Business Districts to Special Business Districts in Tier 2 cities which isattributable to the upcoming Government initiatives.
The income of the Company from its operations remained the same at Rs. 12.60 lacs asthat for F.Y. 2016-17. Other income of the Company decreased to Rs. 30.30 lacs as againstRs. 67.42 lacs in FY2016-17. The Company strives to attract new tenantsto increase theoccupancy rate in its office properties and is exploring other related avenues.
b) Opportunities and Threats:
The Company's Business Centre is strategically located in Fort area of Mumbai. Howeverthere is a limitation for expansion of the office space by the corporate in this area aslarge number of corporates now prefer to shift their base to suburbs where there isgreater scope to have a larger area. This trend has adversely impacted the Company'sbusiness. Nevertheless some of them would prefer to maintain their establishments in theFort Area Mumbai which may prove to be an opportunity to our Company.
Further the Company is exposed to a number of risks such as regulatory counterpartyrisk but it has implemented robust risk management policies and guidelines that set outthe tolerance for Company's general risk philosophy. It has established a framework andprocess to monitor the exposures and to implement appropriate measures in a timely andeffective manner.
Looking at the above-mentioned facts the future prospects for the business centreactivity are not very promising. However the management is looking out for alternativesources of generating revenue of the Company by introducing new occupants in the existingbusiness centres and by planning increase in business center changes of existingoccupants.
d) Risks and Concerns:
Risk management can be construed as the identification assessment and prioritizationof risks followed by co- ordinated and economical application of resources to minimizemonitor and control the probability and/ or impact of unfortunate events or to maximizethe realization of opportunities.
The Company has a well defined risk management framework in place that functionsthrough its Audit Committee. The Company periodically places before the Audit Committeeand the Board the key risks and the risk assessment and mitigation procedures followed bythe Company.
e) Internal Control Systems and Adequacy
The Company has established a well-defined internal control system to monitor theoccupancy rate and operating cost which are very critical factors from Company'sperformance point of view. Any kind of adverse factors are immediately reported to Boardfor its analysis and necessary action.
f) Financial Performance with respect to Operational Performance:
The Company has by and large been able to maintain its operations.
g) Human Resources:
The Company recognizes the value of human resource which plays a vital role in overallperformance of the Company. The Company continues with the policy of outsourcing for allroutine jobs to reduce the fixed costs.
As stated in the beginning this Report to the Shareholders is in compliance with theCorporate Governance Standard incorporated in SEBI (Listing Obligations and disclosureRequirements) Regulations 2015 and as such cannot be construed as holding out for anyforecasts projections expectations invitations offers etc. within the meaning ofapplicable laws and regulations. Actual results might differ materially from those eitherexpressed or implied.
M/s. V.S.Somani & Co. Chartered Accountants were appointed as the StatutoryAuditors of the Company at the Fifty fourth AGM of the Company held on September 28 2016to hold office for a period of 3 (three) consecutive years from the conclusion of theFifty Fourth AGM till the conclusion of the Fifty Seventh AGM to be held in 2019 subjectto ratification by the members at every AGM of the company.
However in terms of MCA Notification S.O. 1833(E) dated May 07 2018 the provision ofannual ratification of the appointment of auditor has been done away with. AccordinglyM/s. V.S. Somani & Co. shall continue to act as Statutory Auditors upto 2019 withoutrequiring ratification at every AGM. They have confirmed that they are eligible to act asStatutory Auditors in accordance with Sections 139 and 141 of the Companies Act 2013 andRules made thereunder. The same therefore does not form part of the Notice conveningensuing AGM.
The Board has appointed M/s. Vivek M. Tamhane & Co. Chartered Accountants as theInternal Auditors for the financial year 2018-19 for a period of one (1) year underSection 138 of the Companies Act 2013 and they have completed the internal audit in linewith the scope laid down by the Audit Committee.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and remuneration of Managerial Personnel) Rules 2014 the Board hasappointed M/s. Parikh Parekh & Associates Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the year 2017- 18. The Report of theSecretarial Audit is annexed to this Report in form MR-3 as Annexure - C incompliance with the provisions of Section 134(3) of Companies Act 2013.
Explanation and Comments on Auditors and Secretarial Audit Report:
There are no qualification disclaimer reservation or adverse remark made either bythe Statutory Auditors in Auditors Report or by the Company Secretary in practice(Secretarial Auditor) in the Secretarial Audit Report except for reporting a delay infiling forms MGT-14. The delay was inadvertent and the Company has initiated the processof filing condonation of delay. The forms shall be duly filed.
The Statutory Auditors have not reported any instances of fraud to the CentralGovernment and Audit Committee as per the provisions of Section 143 (12) of the CompaniesAct 2013 read with Rule 13 of the Companies (Audit and Auditors) Rules 2014.
DISCLOSURE UNDER SECRETARIAL STANDARDS ON MEETING OF BOARD OF DIRECTORS (SS-1)
During the year under review the Company has complied with all the applicableSecretarial Standards.
A report on Corporate Governance along with a certificate from the Auditors of theCompany regarding the compliance of conditions of Corporate Governance as stipulated underthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 forms part of this Report.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) RULES 2014
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 ('Act') and Rules made thereunder the Company hasconstituted Internal Complaints Committee (ICC). The said Committee is guided by a Policyon Prevention of Sexual Harassment of Women at Workplace adopted by the company.
During the year 2017-18 the Company has not received any complaint with allegations ofsexual harassment.
The Board of Directors place on record its appreciation towards all its employees fortheir services rendered and the shareholders for their constant support and for the faithreposed by them in the Company.
| ||For and on behalf of the Board |
| ||H.N. Singh Rajpoot |
| ||Chairman |
| ||DIN :00080836 |
|Place: Mumbai || |
|Date: May 23 2018 || |