IITL Projects Ltd.
|BSE: 531968||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE786E01018|
|BSE 00:00 | 06 Aug||23.00||
|NSE 05:30 | 01 Jan||IITL Projects Ltd|
IITL Projects Ltd. (IITLPROJ) - Director Report
Company director report
Your Directors are pleased to present the 24th Annual Report on the businessand operations of the Company and accounts for the Financial Year ended March 31 2018.
The standalone and consolidated financial statements for the financial year ended March31 2018 forming part of this Annual Report have been prepared in accordance with theIndian Accounting Standards (IND AS) as notified by the Ministry of Corporate Affairs.
The summarized standalone and consolidated financial results of your Company and itsassociates / joint ventures are provided below:
( Rs In lacs)
Note: Previous year figures have been regrouped/rearranged wherever necessary.
Results of operations and State of Company's affairs
The Company has adopted IND AS with effect from April 01 2017 pursuant to Ministry ofCorporate Affairs notification dated 16th February 2015 notifying the (IndianAccounting Standard) Rules 2015. The IND AS is also being implement in SPV's to ensureconsistent standards.
The Total Income of the Company for the year under review stood at Rs. 438.97 Lacs ascompared to Rs. 1299.48 Lacs in the previous year. During the year the Company enteredinto One Time Settlement (OTS) Agreement with Industrial Investment Trust
Limited (IITL)on May 18 2017. Vide said Agreement outstanding loan of Rs. 3648 Lacsgranted to the Company alongwith outstanding interest amount of Rs. 361.06 Lacsaggregating to Rs. 4009 Lacs is repaid by the Company to IITL Holding Company by way oftransfer of the Company's investment in 5000000 Zero % Non-Convertible RedeemablePreference Shares of World Resorts Limited and by transferring 10849120 Zero %Non-Convertible Redeemable Preference Shares of Capital Infraprojects Private Limited(CIPL) held by the Company. As a result the Company has occurred Loss on OTS amounting toRs. 599.72 Lacs during the financial year 2017-18 and same has been shown as anextra-ordinary item in the statement of Profit & Loss for the year ended March 312018. Loss before tax stood at Rs. 1169.89 Lacs for the year ended March 31 2018 ascompared to Rs. 335.23 Lacs in the previous year mainly due to a significant increase inthe share of loss from Joint Venture partnership firms as compared to previous year anddue to One Time Settlement loss. Total comprehensive income for the F.Y. 2017-18 isnegative Rs. 1166.47 Lacs as compared to negative Rs. 335.81 Lacs in the previous year.
On consolidation basis the income of the Company declined to Rs. 381.96 Lacs ascompared to Rs. 1288.24 Lacs in the previous year and loss accounted to Rs. 1180.22 in thecurrent year as compared to Rs. 413.14 Lacs in the previous year. Total comprehensiveincome for the F.Y. 2017-18 is negative Rs. 1179.61 loss as compared to negative Rs.412.27 lacs in the previous year.
Material changes and commitments that have occurred after the close of the financialyear till date of this report which affects the financial position of the Company(Pursuant to Section 134(31(11 of the Companies Act. 20131.
Except as disclosed elsewhere in this report there were no material changes andcommitments that have occurred afterthe close of the financial year till the date of thisreport which affects the financial position of the Company.
Extract of Annual Return
Pursuant to section 92(3) of the Companies Act 2013 (the Act') and rule 12(1) ofthe Companies (Management and Administration) Rules 2014 extract of annual return isappended as Annexure 1 in the prescribed Form MGT-9 which forms part of this report.
The Consolidated Financial Statements of your Company for the financial year 2017-18are prepared in accordance with the Indian Accounting Standards (IND AS) as notified bythe Ministry of Corporate Affairs and pursuant to applicable provisions of the CompaniesAct 2013 read with relevant Accounting Standards issued by the Institute of CharteredAccountants of India and the Listing Regulations. The Consolidated Financial Statementshave been prepared on the basis of audited financial statements of the Company itsassociate and joint ventures.
The Company is engaged in Real Estate business construction of residential complex inthe National Capital Region (NCR). It has acquired a plot of land on long term leaseunder Builders Residential Scheme (BRS) of the Greater Noida Industrial DevelopmentAuthority (GNIDA). The construction has been completed and the flats are handed over tothe purchasers.
Apart from constructing its own project the Company is also engaged in construction ofresidential flats through Special Purpose Vehicles (SPVs) and these SPVs have beenallotted plots of land on long term lease basis under Builders Residential Scheme (BRS)of the New Okhla Industrial Development Authority (NOIDA) Greater Noida IndustrialDevelopmentAuthority (GNIDA)
and Yamuna Expressway Industrial Development Authority (YEIDA). The total lease holdarea allotted to the Company alongwith SPVs is around 265000 sq. meters and the projectsare under various stages of construction.
Project developed by the Company:-
Express Park View I (EPV): The Company's Project Express Park View I' has beendeveloped and completed. The Project comprises of multi-stored towers/ buildings havingresidential flats along with other common services and facilities. The Project overallcomprises of 4 towers of total 334 residential flats of which 321 residential flats havebeen sold as on date and possession of 308 flats have been handed over and about 150families are already residing in the campus. Residents Welfare Association (RWA) wasformed and the complex is now completely handed over to the Residents Welfare Association.
Projects being developed by the Company through SPV's:
1) The Hyde Park
2) The Golden Palms
3) Express Park View-ll &
4) The Golden Palm Village
A separate note on the status of the projects developed through SPV's are highlightedin the Management Discussion Analysis (MDA) Report and forms an integral part of thisreport.
Statement containing salient features of Associate Companies/ Joint Ventures
Pursuant to sub-section 3 of Section 129 of the Companies Act 2013 read with Rule 5 ofthe Companies (Accounts) Rules 2014 a statement containing the salient features of thefinancial statements of Associate Company and Joint Ventures are given in FormAOC-1 andforms an integral part of this report as Annexure 2.
Transfer to Reserves:
During the year under review there is no transfer to reserves. Dividend
In view of the losses incurred by the Company no dividend has been proposed for theyear ended March 31 2018.
Management Discussion and Analysis
The Management Discussion and Analysis Report capturing your Company's performanceindustry trends and other material changes with respect to your Companies and itsjoint-ventures wherever applicable is provided in a separate section and forms anintegral part ofthis report as required under Regulation 34 of SEBI (Listing Obligations& Disclosures Requirements) Regulations 2015.
Change in Capital Structure
During the year under review there was no change in the Capital Structure of theCompany.
Internal Financial controls and their adequacy
As required by the Companies Act 2013 your Company has implemented an InternalFinancial Control (IFC) Framework. Section 134(5)(e) requires the Directors to make anassertion in the Directors Responsibility Statement that your company has laid downinternal financial controls which are in existence adequately designed and operateeffectively. Under Section 177(4) (vii) the Audit Committee evaluates the internalfinancial controls and makes a representation to the Board. The purpose of the IFC is toensure that policies and procedures adopted by your Company for ensuring the orderly andefficient conduct of its business are implemented including policies for safeguarding itsassets prevention and detection of frauds and errors accuracy and completeness ofaccounting records. The IFC framework implementation required all processes of yourCompany to be documented alongside the controls within the process. All processes weresatisfactorily tested for both design and effectiveness during the year.
M/s J.RJ Associates Chartered Accountants a consulting / audit firm were appointedfor determining the adequacy and operating effectiveness of the existing InternalFinancial Controls over Financial Reporting ofthe Company on behalf ofthe management.
Directors and Kev Managerial Personnel
Retiring bv Rotation
In accordance with the provisions of Section 152 and other applicable provisions ifany ofthe Companies Act 2013 read with Companies (Appointment and Qualification ofDirectors) Rules 2014 including any statutory modification(s) and re-enactment(s) thereoffor the time being in force) and the Company's Articles of Association Dr. B. Samalretires by rotation atthe ensuing Annual General Meeting ofthe Company and being eligibleoffers himself for re-appointment.
In accordance with the provisions of the Companies Act 2013 read with the Rules issuedthereunder the Listing Regulations and the Articles of Association of the Company theIndependent Directors and the Managing Director ofthe Company are not liable to retire byrotation.
Resignation & Appointment
During the period under review Mrs. Beroz Rumie Gazdar an Independent Director ceasedto be a Director of the Company effective from May 04 2017. The Board of Directors placeson record its appreciation towards Mrs. Beroz's contributions during her tenure as anIndependent Director of the Company.
The Board upon the recommendation of the Nomination and Remuneration Committeethrough separate resolution passed byway of Circulation appointed Mrs. SujataChattopadhyay (DIN :02336683) as an Additional Director (Independent) with effect fromSeptember 26 2017. The Board recommends the same for the approval by the Shareholdersofthe Company in the ensuing Annual General Meeting. The Company has received consent inwriting from Mrs. Sujata Chattopadhyay to act as a Director in Form DIR-2 and intimationin Form DIR-8 to the effect that she is not disqualified u/s 164 (2) to act as a Director.
Pursuant to the provisions of Section 152 ofthe Companies Act 2013 and the Articles ofAssociation ofthe Company Dr. B. Samal will retire by rotation atthe 24th AGMand being eligible has offered himself for re-appointment.
Kev Managerial Personnel
Pursuant to the provisions of Section 203 of the Companies Act 2013 the Key ManagerialPersonnel ofthe Company are - Mr. D.P Goyal Managing Director and Mr. Hemang LadaniChief Financial Officer and Ms. Shubhangi Lohia Company Secretary & ComplianceOfficer ofthe Company.
The Board in its meeting held on August 08 2017 accepted the resignation of Mr.Kaushik Desai from the post of Chief Financial Officer (KMP) of the Company from the closeof the business hours on August 08 2017.
The Board in its meeting held on April 19 2018 has appointed Mr. Hemang Ladani asChief Financial Officer cum Key Managerial Personnel of the Company in accordance with theprovisions of Section 203 ofthe Companies Act 2013.
Familiarization Programme for Independent Directors
The Company has formulated a Familiarization Programme for Independent Directors withan aim to familiarize the Independent Directors with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model ofthe Company etc. to provide them with better understanding ofthebusiness and operations ofthe Company and so as to enable them to contribute significantlyto the Company.
The details of programme for familiarization of Independent Directors with the Companyare put up on the website of the Company underthe web link
Evaluation of Board its Committees and Individual Directors
In compliance of Circular No. SEBI/HO/CFD/CMD/CIR/P/2017/004 dated January 05 2017titled as "Guidance Note on Board Evaluation" issued by SEBI Nomination andRemuneration Committee carried out certain revisions in the criteria and the assessmentquestionnaires designed for the performance evaluation ofthe Directors CommitteesChairman and the Board as a whole.
In terms of provisions of Companies Act 2013 and Schedule II - Part D of Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 the Board carried out the annual performance evaluation of its own including thevarious Committees and individual Directors with a detailed questionnaire covering variousaspects ofthe Boards functioning like composition of Board and its Committees Boardculture performance of specific duties and obligations.
Evaluation of Committees was based on criteria such as adequate independence of eachCommittee frequency of meetings and time allocated for discussions at meetingsfunctioning of Board Committees and effectiveness of its advice/recommendation to theBoard etc.
In a separate meeting of Independent Directors performance of Non-IndependentDirectors performance of the Board as a whole and performance of the Chairman wasevaluated. Based on the feedback received from the Independent Directors and taking intoaccount the views of Executive Directors and the Non-Executive Directors the Boardevaluated its performance on various parameters such as composition of Board and itscommittees experience and competencies performance of duties and obligationscontribution at the meetings and otherwise independent judgment governance issueseffectiveness of flow of information.
Meeting of the Board
During the year under review six meetings of the Board of Directors were held. Thedetails of the Meetings of the Board of Directors of the Company convened during thefinancial year 2017-18 are given in the Corporate Governance Report which forms partofthis Annual Report. The maximum interval between any two meetings did not exceed 120days as prescribed in the Companies Act 2013.
Directors' Responsibility Statement
Pursuant to Section 134(3) (c) of the Companies Act 2013 your Directors to the bestof their knowledge and belief make following statements that:
(a) in preparation of the annual accounts for the year ended March 312018 theapplicable accounting standards read with requirements set out under Schedule III of theCompanies Act 2013 have been followed and there are no material departures from thesame;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company as at March 312018 and loss of theCompany for the year ended on that date;
(c) proper and sufficient care has been taken forthe maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets 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) proper internal financial controls were in place and that such internal financialcontrols are adequate and were operating effectively;
(f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
Your Company has been practicing the principles of good Corporate Governance over theyears and it is a continuous and ongoing process. A detailed Report on CorporateGovernance practices followed by your Company in terms of Regulation 34(3) of SEBIListing Regulations 2015 together with a Certificate from the Auditors confirmingcompliance with the conditions of Corporate Governance are provided separately in thisAnnual Report.
Declaration bv Independent Directors
The Company has received the necessary declarations from all the Independent Directorsof the Company in accordance with Section 149(7) of the Companies Act 2013 that he/shemeets the criteria of independence as laid out in sub-section 6 of Section 149 of theCompanies Act 2013 confirming that they meet the criteria of independence as prescribedboth under the Act and in accordance with Regulation 16(b) of SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015.
Nomination and Remuneration Policy
The Board of the Directors have framed the policy which lays down a framework inrelation to Remuneration of Directors Key Managerial Personnel and Senior Management ofthe Company. This policy also lays down criteria for selection and appointment of BoardMembers. The Nomination and Remuneration Policy as approved by the Board is uploaded onthe Company's weblink viz. http://www.iitlprojects.com/AboutUs.aspx.
Particulars of Loans given. Investments made. Guarantees given and Securities provided
The details of loans given investments made guarantees given and securities providedunder the provision of Section 186 of the Companies Act 2013 are given in the Notes tothe Financial Statements.
The Board of Directors of the Company at their meeting held on Tuesday August 14 2018has given their approval to give Corporate Guarantee of Rs. 30 crores to PiramalCapital and Housing Finance Limited' for the credit facilities agreed to be granted toIITL Nimbus the Express Park View Joint Venture of the Company.
Conservation of energy technology absorption foreign exchange earnings and outgo:
The details of conservation of energy technology absorption foreign exchange earningsand outgo are as follows:
(A) Conservation of energy: Not Applicable
(B) Technology absorption: Not Applicable
(C) Foreign exchange earnings and Outgo: Not Applicable Risk Management
The Company has formulated a Risk Management Policy. The Company through the Committeefor Risk Management identifies evaluates analyses and prioritizes risks in order toaddress and minimize such risks. This facilitates identifying high level risks andimplement appropriate solutions for minimizing the impact of such risks on the business ofthe Company.
Related Party Transactions
The company has laid down a Related Party Transactions Policy for purpose ofidentification and monitoring of such transactions. The policy on Related PartyTransactions as approved by the Board is uploaded on the Company's weblink viz.
All Related Party Transactions are placed before the Audit Committee and also theMembers/Board for their approval wherever necessary.
However a NIL statement is annexed herewith as Annexure 3 to the Directors' Report inthe prescribed Form AOC-2.
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany.
Corporate Social Responsibility (CSR1
The Corporate Social Responsibility Committee has formulated and recommended to theBoard a Corporate Social Responsibility Policy (CSR Policy) indicating the activities tobe undertaken by the Company which has been approved by the Board.
The CSR Policy is disclosed on the Company's website http://
The report on CSR activities is attached as Annexure 4 to this Report.
Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism / Whistle Blower Policy to report to the managementinstances of unethical behavior actual or suspected fraud orviolation ofthe company'scode of conduct. The details ofthe Vigil Mechanism policy have been provided in theCorporate Governance Report and also disclosed on the website ofthe Company viz.http://www.iitlprojects.com/AboutUs.aspx .
Auditors and Auditors' Report
M/s. Maharaj NR Suresh and Co. Chartered Accountants (Firm Registration No. 001931S)were appointed as Statutory Auditors at the 23rd Annual General Meeting of theCompany till the conclusion of 28th Annual General Meeting to be held in the year 2022subject to ratification of their appointment by the Members at every annual generalMeeting However as per the amended provision of the Companies Act 2017 notified on07.05.2018 Company is not required to ratify the appointment of auditors at every annualgeneral meeting therefore it is not proposed to ratify the appointment of auditors atthe ensuing Annual General Meeting.
There are no qualifications reservations or adverse remarks made by M/s. Maharaj NRSuresh and Co. Statutory Auditors in their report for the financial year ended March 312018.
The statutory Auditor ofthe Company has stated that "although the company isincurring continuous losses and the net worth ofthe Company is negative as on 31stMarch 2018 since the company has through its joint ventures adequate unsold inventorieswhich on sale is expected to generate profits based on interalia Management's estimateof sale price and cost escalations and management evaluation of other funding options. Theconditions indicate the existence of a material uncertainty that may cast significantdoubt about the Company's ability to continue as a going concern."
M/s. J. R J. Associates Chartered Accountants Internal Auditors of the Company havetendered their resignation. Pursuant to provisions of Section 138 ofthe Companies Act2013 read with Companies (Accounts) Rules 2014 the company has appointed "M/s.Sheetal Patankar & Co." a firm of Chartered Accountants in practice as InternalAuditors of the Company for the Financial Year 2018-2019.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and rules madethereunder the Board of Directors of the Company has appointed M/s. Chandanbala Jain& Associates Practicing Company Secretary (CP No. 6400) to undertake the SecretarialAudit ofthe Company. The Secretarial Audit Report is included as Annexure 5 and forms anintegral part of this report.
The Secretarial Auditor in the report has made an observation that the Company hascomplied with the provisions of the Act Rules Regulations Guidelines Standards etc.except the appointment of Woman Director and CFO where there was a delay of 53 days andapproximately 3 months respectively.
With regard to the observations made by the Secretarial Auditor in their report yourDirectors wish to state that the Company continued its effort for filling the vacancy tillsuitable candidates were identified.
Significant and material orders passed bvthe regulators
There are no significant and material orders passed by the Regulators/Courts/Tribunalswhich would impact the going concern status of the Company and its future operations.
Particulars of Employees and related disclosures
A) Details pertaining to remuneration as required under Section 197(12) ofthe CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014
1) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2017-18 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2017-18 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:
A The remuneration of Mr. D.P.Goyal is considered after excluding theamount of reimbursement of expenses of Rs. 298151/- for the Financial Year 2017-18.
## Mrs. Beroz Rumie Gazdar resigned as Director w.e.f May 04 2017.
* Mrs.Sujata Chattopadhyay was appointed as an Additional Director w.e.f. September 262017.
1) The remuneration to Directors includes sitting fees paid to them for the financialyear 2017-2018.
2) The Median remuneration of employees of the Company during the financial year2017-2018 was Rs. 4.84 Lakhs.
3) Median remuneration of employees in the last financial year i.e. 2016-17 was Rs.411646/-whereas for current financial year i.e 2017-18 the same stood at Rs.484559/- signifying an increase of 17.71%.
4) There were Seven permanent employees on the rolls of Company as on March 31 2018;
5) Average remuneration made in the last financial year i.e 2016-17 was Rs. 718731/-whereas for current financial year i.e. 2017- 18 the same stood at Rs. 802281 /-signifying an increase of 12%.
*Only employees other than KMP i.e. WTD / CFO / CS
and who were employees in both the years i.e. 2017 and 2018 have been considered.
6) Pursuantto Rule 5(1)(xii) ofthe Companies (Appointment and Remuneration ofManagerial Personnel)Rules 2014 it is affirmed that the remuneration paid to theDirectors Key Managerial Personnel and Senior Management is as per the RemunerationPolicy ofthe Company.
B) Details of every employee of the Company as required pursuant to Rule 5(2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:
During the year under consideration none ofthe employees of the company was in receiptof remuneration in excess of limits prescribed under clause 5(2) ofthe Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. Hence particulars asrequired under 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 have not been provided.
The Company has not accepted any deposits in terms of Chapter V ofthe Companies Act2013 read with Companies (Acceptance of Deposit) Rules 2014 from the public during theyear under review.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention. Prohibitionand Redressah Act. 2013:
The Company has in place Sexual Harassment Policy in line with the requirements of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.An Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent temporary trainees) are coveredunder this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the year 2017-2018:
No. of complaints received - Nil
No. of complaints disposed off-Nil Acknowledgement
Your Directors place on record their appreciation for employees at all levels who havecontributed to the growth and performance of your Company.
Your Directors also thank the clients vendors bankers shareholders and advisers ofthe Company for their continued support.
Your Directors also thankthe Central and State Governments and other statutoryauthorities for their continued support.
For and on behalf of the Board IITL Projects Limited