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FGP Ltd.

BSE: 500142 Sector: Others
NSE: FGPIND ISIN Code: INE512A01016
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OPEN 1.72
CLOSE 1.72
VOLUME 100
52-Week high 1.87
52-Week low 0.75
P/E
Mkt Cap.(Rs cr) 2
Buy Price 1.75
Buy Qty 96.00
Sell Price 1.72
Sell Qty 9900.00

FGP Ltd. (FGPIND) - Director Report

Company director report

Dear Members

Your Directors are pleased to present their 57th AnnualReport together with the Audited Financial Statements Directors' Report and Annexures forthe year ended March 31 2019.

1. FINANCIAL HIGHLIGHTS:

The summary of financial performance of the Company for the year underreview is as given below:

Particulars March 31 2019 (Rs) March 31 2018 (Rs)
Total Income 16423175 4289970
Profit before Depreciation & Tax 2508180 (3672378)
(-) Depreciation 146605 73113
Profit/(Loss) before Tax 2361575 (3745491)
(-) Tax for Current Year (1794360) -
Profit/(Loss) after Tax 4155935 (3745491)

2. FINANCIAL PERFORMANCE:

Revenue:

The total revenue for FY 2018-19 was Rs 16423175/- ascompared to revenue of Rs 4289970/- in previous year. The increase in revenue ison account of Profit on Sale of Investments Interest on Income Tax Refund and on accountof write back of doubtful advance provision.

Expenses:

The total expenses for FY 2018-19 were Rs14061600/- ascompared to expenses of Rs 8035461/- in previous year mainly on account ofincrease in professional fees and repair & maintenance charges.

Profit After Tax:

Profit after Tax (PAT) for FY 2018-19 was Rs 4155935/- incomparison to loss of Rs 3745491/- during the previous year. The increase inprofit is on account of Profit on Sale of Investments Interest on Income Tax Refund andwrite back of doubtful advance provision.

3. DIVIDEND:

Due to inadequacy of distributable profits your Directors consider itprudent not to recommend any dividend for the year under review.

4. TRANSFER TO RESERVES

The Company has not transferred any sum to the General Reserve duringthe financial year ended March 31 2019.

5. MANAGEMENT DISCUSSION AND ANALYSIS a. Industry Structure andDevelopments:

The Indian Real estate sector has witnessed slowdown in last few years.Residential spaces were going through a bearish phase due to impact of policy disruptionssuch as RERA GST etc. These initiatives resulted in a decline in residential sales andlaunches across cities. In FY 2018-19 residential sector witnessed a turnaround due tonew launches of

projects increase in incentives for affordable housing coupled withlower GST rates.

Further the FY 2018-19 was a landmark year with office and commercialspace absorption across leading cities Bangalore and NCR continued to dominate Hyderabademerged as the third most preferred office destination overtaking Mumbai. However thispositive outlook is not expected to have increased the Company's business centre incomedue to the facts mentioned below under opportunities and threats.

The income of the Company from its operations remained the same at Rs1260000/- as that for FY 2017-18. Other income of the Company increased to Rs 15163175/-as against Rs 3029970/- in FY 2017

18. The Company strives to attract new tenants to 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 ofMumbai. However there is a limitation for expansion of the office space by the corporatein this area as large number of corporates now prefer to shift their base to suburbswhere there is greater scope to have a larger area. This trend has adversely impacted theCompany's business. Nevertheless some of them would prefer to maintain theirestablishments in the Fort Area Mumbai which may prove to be an opportunity to ourCompany.

Further the Company is exposed to a number of risks such asregulatory counterparty risk but it has implemented robust risk management policies andguidelines that set out the tolerance for Company's general risk philosophy. It hasestablished a framework and process to monitor the exposures to implement appropriatemeasures in a timely and effective manner.

c. Outlook:

Looking at the above-mentioned facts the future prospects for thebusiness centre activity are not very promising. However the management is looking outfor alternative sources of generating revenue of the Company and by introducing newoccupants in the existing business centres.

d. Risks and Concerns:

Risk management can be construed as the identification assessment andprioritization of risks followed by co-ordinated and economical application of resourcesto minimize monitor and control the probability and/or impact of unfortunate events orto maximize the realization of opportunities.

The Company has a well-defined risk management framework in place thatfunctions through its Audit Committee. The Company periodically places before the AuditCommittee and the Board the key risks and the risk assessment and mitigation procedures

followed by the Company.

e. Internal Control Systems and Adequacy

The Company has established a well-defined internal control system tomonitor the occupancy rate and operating cost which are very critical factors fromCompany's performance point of view. Any kind of adverse factors are immediately reportedto Board for their 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 vitalrole in overall performance of the Company. The Company continues with the policy ofoutsourcing for all routine jobs to reduce the fixed costs

h. Details of changes in Return on Networth in comparison to previousyear

Return on Net Worth for FY 2018-19: 9.87%

Return on Net Worth for FY 2017-18: (9.87%)

Change in return on Net Worth as compared to immediately preceedingprevious financial year: 19.74%.

i. Details of significant changes (i.e. change of 25% or more ascompared to immediately previous financial year) in Key Financial Ratios along withdetailed explanations thereof:

Particulars

As on

% Change
March 31 2019 March 31 2018
Debtors Turnover NIL NIL N.A.
Inventory Turnover NIL NIL N.A.
Interest Coverage Ratio* 32.06 NIL 100.00%
Current Ratio 23 30.04 -23.44%
Debt Equity Ratio NIL NIL N.A.
Operating Profit Margin (%) 7.67% 29.37% -21.06%
Net Profit Margin (%) 25.31% -87.31% 112.62%

*Since no interest payment made in previous year Interest CoverageRatio does not have comparative figure.

There is significant change in one ratio i.e. Net Profit Margin Ratiodue to implementation of IND-AS.

j. Cautionary statement:

Statements in the Management Discussion and Analysis describing theCompany's objectives projections estimates and expectations may constitute "forwardlooking statements'' within the meaning of applicable laws and regulations. Actual resultsmight differ materially from those either expressed or implied.

6. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY

There are no material changes and commitments

affecting the financial position of the Company which have occurredbetween the end of the financial year on March 31 2019 to which the financial statementsrelate and the date of this report.

7. SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES The Company doesnot have any subsidiary/joint venture/associate.

There were no companies which have become or ceased to be itsSubsidiaries joint ventures or associate companies during the year.

8. RISK MANAGEMENT

As stated above the Company has laid down a well- defined riskmanagement mechanism covering the risk mapping and trend analysis of both business andnon-business risks risk exposure potential impact and risk mitigation process. The AuditCommittee of the Board is designated to review and monitor the risks associated with theCompany. Accordingly it periodically reviews the risks and suggests steps to be taken tomanage/ mitigate the same through a properly defined framework.

9. RELATED PARTY TRANSACTIONS

The Company has formulated a Policy on related party transactions. Thispolicy as approved by the Board is uploaded on the Company's website The Company has notentered into any transaction with related parties during the year under review whichrequires reporting in Form AOC-2 in terms of the Section 134(3) and 188(1) of theCompanies Act 2013 ("the Act") read with Rule 8(1) of the Companies (Accounts)Rules 2014. Suitable disclosure as required by the Indian Accounting Standard (Ind AS 24)has been made in the notes to the Financial Statements.

There is no relationship between the Directors interse or with the KeyManagerial Personnels (KMP). None of the Directors or KMP had any pecuniary relationshipsor transactions vis-a-vis the Company except the sitting fees paid to Directors andremuneration paid to KMPs.

10. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in Form MGT- 9 as per provisions ofthe Act and Rules thereto is annexed to this report marked as Annexure A. The sameis available on the Company's website at www.fgpltd.in.

11. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Company has not given any loans neither provided any guaranteeunder Section 186 of the Act. Details of investments made during the year are stated inthe notes to Financial Statements.

12. PUBLIC DEPOSITS:

The Company has not accepted any deposits within the meaning ofsub-section (31) of Section 2 and Section 73 of the Act and the rules framed thereunder.As on March 31 2019 the Company has no deposits outstanding.

13. DIRECTOR AND KEY MANAGERIAL PERSONNEL

a. Directors:

Ms. Dhanshree Gandhi (DIN: 08451503) was appointed as an Additional andIndependent Director of the Company by the Board of Directors at its meeting held on May15 2019 for a period of five years subject to the approval of shareholders at theensuing Annual General Meeting (AGM).

Mr. Rajesh Shirambekar (DIN: 08436009) was appointed as an Additionaland Independent Director of the Company by the Board of Directors at its meeting held onAugust 2 2019 for a period of five years subject to the approval of shareholders at theensuing AGM.

Mr. H. C. Dalal (DIN: 00206232) and Mr. Prem Kapil (DIN: 06921601) wereappointed as Independent Directors of the Company at the 52nd (Fifty Second)AGM of the Company held on September 30 2014 for a period of five consecutive years fromthe said date. Accordingly their term as the Independent Directors of the Company expiresat the ensuing 57th (Fifty Seventh) AGM.

Further Mr. H. C. Dalal and Mr. Prem Kapil are qualified to beIndependent Director pursuant to Section 149 (6) of the Act and applicable provisionsunder Listing Regulations.

Accordingly based on the recommendations of the Nomination &Remuneration Committee and pursuant to the performance evaluation it is proposed tore-appoint Mr. H. C. Dalal and Mr. Prem Kapil as Independent Directors for a second termof five years with effect from September 30 2019 up to September 29 2024 and they shallnot be liable to retire by rotation.

Further considering Mr. H. C. Dalal and Mr. Kapil attain the age ofseventy-five years and pursuant to provisions of Regulation 17(1A) of the ListingRegulations Board recommends special resolution(s) for appointment / re-appointment ofaforesaid directors.

In accordance with the provisions of Section 152(6) of the Act andArticles of Association of the Company Mr. H. N. Singh Rajpoot Non-Executive Director(DIN: 00080836) retires by rotation and being eligible has offered himself forre-appointment.

Mr. Vimal Kejriwal Independent Director (DIN: 00026981) tendered hisresignation as Director of the Company w.e.f March 29 2019 due to his preoccupations. TheBoard record its appreciation for the services rendered by Mr. Kejriwal during his tenureas Director.

b. Key Managerial Personnel:

Pursuant to Section 203 of the Companies Act 2013 the Key ManagerialPersonnels of the Company as on March 31 2019 were:

i. Mr. Kishore Shete Whole-time Director

ii. Mr. Rajesh Desai Chief Financial Officer

iii. Ms. Jaya Verma Company Secretary

In accordance with the provisions of Sections 196 203 and otherapplicable provisions of the Companies Act 2013 and the rules framed thereunder read withSchedule V to the Companies Act 2013 Mr. Kishore Shete has been re-appointed as wholetime director of the Company for a term of two and half years from April 1 2019 toSeptember 21 2021.

During the year Ms. Aayushi Mulasi resigned as Company Secretary ofthe Company with effect from November 15 2018. Ms. Jaya Verma was appointed as CompanySecretary of the Company w.e.f. March 1 2019.

In view of the resignation of Ms. Jaya Verma as the Company Secretaryof the Company w.e.f. August 12 2019 and upon due recommendations of the Nomination andRemuneration Committee the Board at its meeting held on August 2 2019 appointed Mr.Manish Tiwary Assistant Manager-Secretarial as the Company Secretary of the Companyw.e.f. August 12 2019.

c. Declarations from Independent Directors:

The Company has received the necessary declaration from eachIndependent Director in accordance with Section 149(7) of the Companies Act 2013 andapplicable provisions of Listing Regulations that he/she meets the criteria ofindependence as laid out in Section 149(6) of the Companies Act 2013 and Regulations16(1)(b) and 25(8) of the Listing Regulations.

d. Familiarisation Programme for Independent Directors:

Pursuant to the Code of Conduct for Independent Directors specifiedunder the Act and Regulation 25(7) of the Listing Regulations the Company familiarisesits Independent Directors on their roles rights responsibilities in the Company natureof the industry in which the Company operates and business model of the Company etc.

14. MEETINGS OF THE BOARD OF DIRECTORS:

The Board of directors met five times during the year ended March 312019. The details of the same are mentioned under the Corporate Governance Report whichforms part of this Annual Report.

15. BOARD COMMITTEES

The Board Committees comprise of mandatory committees as per the Actand Listing Regulations viz. Audit Committee Nomination and Remuneration Committee andthe Stakeholders Relationship Committee. Details of composition of these committees alongwith number of meetings held during the year and other related details are set out in theCorporate Governance Report which forms part of this Report.

16. ANNUAL PERFORMANCE EVALUATION OF BOARD ITS COMMITTEES ANDDIRECTORS:

The Annual Evaluation as required under the Act and the ListingRegulations has been carried out by the Board of its own performance the performance

of each individual Director (including chairperson of Board) and itsCommittees. For this purpose an Evaluation Questionnaire was prepared considering thecriteria for evaluation in accordance with the Company's "Nomination and RemunerationPolicy" approved by the Board on recommendation of the Nomination and RemunerationCommittee taking into account the applicable provisions under the Act and the rules madethereunder the Listing Regulations read with the Circulars issued by SEBI in this regardwhich interalia covered various aspects such as participation in meetings contribution tostrategic decision making core governance and compliance etc. The aforesaid EvaluationQuestionnaire was circulated to all the Directors and their responses were received in asealed envelope addressed to the Chairman of the Board of Directors and results thereofwere then discussed in the next meeting of the Board of Directors.

17. NOMINATION AND REMUNERATION POLICY

The Board of Directors had on the recommendation of the Nomination andRemuneration Committee formulated "Nomination and Remuneration Policy". Thenomenclature of the Policy was changed from "Policy on Appointment TrainingEvaluation and Remuneration of Directors and Senior Management Personnel" to"Nomination and Remuneration Policy" and the policy was revised by the Board ofDirectors based on the recommendation of the Nomination and Remuneration Committee atits meeting held on February 6 2019 considering the provisions of Companies (Amendment)Act 2017 the SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment)Regulations 2018 and further to make it more concise. The Policy interalia covers therequirements specified under Section 178(3) of the Act comprising of criteria fordetermining qualifications positive attributes and independence of a director etc. Thedetailed Policy duly modified in terms of the Listing Regulations as amended during theyear is given as Annexure B and is also posted on the Company's website under the linkwww.fgpltd. in/files/Docs/ Corporate Governance/Policies and Codes adopted by theCompany/8. Nomination & Remuneration Policy.pdf

18. DIRECTORS' RESPONSIBILITY STATEMENT AS REQUIRED UNDER SECTION 134OF THE COMPANIES ACT 2013

Pursuant to Section 134(3)(c) of the Act your Directors to the best oftheir knowledge and belief confirm that:

a. in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any;

b. such accounting policies have been selected and applied consistentlyand such judgements and estimates have been made that are reasonable and prudent to give atrue and fair view of the

state of affairs of the Company in the Balance Sheet as at March 312019 and the Statement of Profit and Loss for the financial year ended March 31 2019;

c. proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

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

e. the proper internal financial controls were in place and that suchinternal financial controls were adequate and were operating effectively;

f. the systems to ensure compliance with the provisions of allapplicable laws were in place and that such systems were adequate and operatingeffectively.

19. WHISTLE BLOWER POLICY/ VIGIL MECHANISM

During the year under review based on the recommendations of the AuditCommittee the Board of Directors revised the Whistle Blower Policy considering therequirement under the Act and Listing Regulations as amended in 2018 and renamed theexisting Whistle Blower Policy to Whistle Blower Policy and Vigil Mechanism. The WhistleBlower Policy is uploaded on the Company's website www. fgpltd.in.

20. PARTICULARS OF EMPLOYEES

Particulars of employees pursuant to Section 197 read with Rule 5(1) ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached with this report as Annexure C.

The particulars of employees in compliance with the provisions ofSection 134 (3) (q) read with Rule 5 (2) and 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 will be provided to the shareholder uponrequest. The same shall be available for inspection by the shareholder of the Company atthe Registered Office of the Company during business hours on working days of the Companytill the date of Annual General Meeting of the Company.

21. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO

The information to be furnished under Section 134(3) (m) of the Actread with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished below.Conservation of Energy: The Company is engaged in the Business Centre activity under whichits operations do not account for substantial energy consumption. However the Company hastaken all necessary steps to conserve energy. The management has ensured that all thesemeasures are complied with. Technology Absorption: The provisions relating to

technology absorption are not applicable to the Company.

Foreign exchange earnings & outgo: NIL

22. CORPORATE SOCIAL RESPONSIBILITY

The provisions of Section 135 of the Act are not applicable to theCompany as the Company does not fall into the criteria specified in sub-section (1) ofSection 135 of the Act.

23. STATUTORY AUDITORS:

M/s. V.S.Somani & Co. Chartered Accountants (FRN: 117589W) wereappointed as the Statutory Auditors of the Company at the Fifty Fourth AGM of the Companyheld on September 28 2016 from the conclusion of the Fifty Fourth AGM till the conclusionof the Fifty Seventh AGM. Accordingly their term comes to an end at the conclusion ofensuing AGM. Based on the recommendation of the Audit Committee the Board recommends theappointment of M/s. MVK Associates Chartered Accountants (FRN: 120222W) as the StatutoryAuditors of the Company for a period of five years from the conclusion of the ensuingFifty Seventh AGM till the conclusion of the Sixty Second AGM to the Members for theirapproval at a remuneration and terms as per resolution set out in the Notice convening theFifty Seventh AGM of the Company.

24. INTERNAL AUDITORS:

The Board of Directors have appointed M/s. Vivek M. Tamhane & Co.Chartered Accountants to carry out Internal Audit of the Company as per section 138 of theAct for the FY 2019-20.

25. SECRETARIAL AUDITORS:

M/s. Parikh Parekh & Associates Company Secretaries were appointedas the Secretarial Auditors for conducting the Secretarial Audit in accordance withSection 204 of the Act for the year ended March 31 2019. The Secretarial Audit Reportprepared in accordance with Section 204(1) of the Act in prescribed Form MR-3 by M/s.Parikh Parekh & Associates Company Secretaries is attached as Annexure D to thisReport.

26. EXPLANATION AND COMMENTS ON AUDITORS' REPORT AND SECRETARIAL AUDITREPORT:

There are no qualification reservations or adverse remark made eitherby the Statutory Auditor in Auditors Report or by the Company Secretary in Practice(Secretarial Auditor) in Secretarial Audit Report. However the observations mentioned inSecretarial Audit Report are self-explanatory.

The Statutory Auditors have not reported any instances of fraud to theCentral Government and Audit Committee as per the provisions of Section 143(12) of the Actread with Rule 13 of the Companies (Audit and Auditors) Rules 2014.

27. CORPORATE GOVERNANCE

A report on Corporate Governance along with a certificate from theAuditors of the Company stipulated pursuant to Regulation 34 of the Listing Regulations isannexed as Annexure E to this Report.

28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNALS IMPACTING THE GOING CONCERN STATUS

There are no significant and material orders passed by the Regulatorsor Courts or Tribunals impacting the going concern status and Company's operations.

The Company has received eviction notices from the National InsuranceCompany Limited (NIC) owner of Commercial Union House property occupied by the Companyas its registered office. The status of the matter is dormant since February 2015.

29. CHANGE IN THE NATURE OF BUSINESS

The Company has been engaged in the business of providing BusinessCentre facilities. During the year under review there was no change in the nature of thebusiness.

30. COST RECORDS

The Company is not required to maintain cost records as requiredpursuant to section 148(1) of the Act.

31. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) RULES 2014

The Company has in place a policy on Prevention of Sexual Harassment ofWomen at Workplace in accordance with the provisions of the Sexual Harassment of Women atthe Workplace (Prevention Prohibition and Redressal) Act 2013. Internal ComplaintsCommittee ('ICC') had been set up to redress complaints. ICC has not received anycomplaints during the year under review.

32. SECRETARIAL STANDARDS:

The Company complies with the applicable Secretarial Standards issuedby the Institute of Company Secretaries of India.

34. APPRECIATION

The Board of Directors place on record its appreciation towards all itsemployees for their services rendered and the shareholders for their constant support andfor the faith reposed by them in the Company.

For and on behalf of the Board
H.N. Singh Rajpoot
Place : Mumbai Chairman
Date : August 2 2019 DIN: 00080836

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