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Imagicaaworld Entertainment Ltd.

BSE: 539056 Sector: Services
NSE: IMAGICAA ISIN Code: INE172N01012
BSE 15:30 | 08 Dec 11.86 0.56
(4.96%)
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11.79

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11.86

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11.55

NSE 15:29 | 08 Dec 11.60 0.55
(4.98%)
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11.60

HIGH

11.60

LOW

11.60

OPEN 11.79
PREVIOUS CLOSE 11.30
VOLUME 90075
52-Week high 14.29
52-Week low 4.74
P/E
Mkt Cap.(Rs cr) 104
Buy Price 11.86
Buy Qty 3374.00
Sell Price 0.00
Sell Qty 0.00
OPEN 11.79
CLOSE 11.30
VOLUME 90075
52-Week high 14.29
52-Week low 4.74
P/E
Mkt Cap.(Rs cr) 104
Buy Price 11.86
Buy Qty 3374.00
Sell Price 0.00
Sell Qty 0.00

Imagicaaworld Entertainment Ltd. (IMAGICAA) - Director Report

Company director report

Dear Members

Your Company's Directors hereby present the Tenth Annual Report of your Company along with Audited Financial Statements for the financial year ended March 31 2019 (year under review/ FY 2018-19).

SUMMARY OF FINANCIAL HIGHLIGHTS

The standalone performance of the Company for the financial year ended March 31 2019 is summarized below:

ParticularsFinancial Year ended March 31 2019Financial Year ended March 312018(1)
Revenue from Operations24037.8823628.77
Profit/ (Loss) before tax(18202.40)(15517.43)
Tax Expenses
- Current Tax--
- Deferred Tax(2)16540.55-
Profit/ (Loss) after tax(34742.95)(15517.43)

Note(s):-

(1) The figures for the previous year have been regrouped/ rearranged wherever necessary to confirm with current period's classification.

(2) The company had to write-off Deferred Tax Asset of ? 165 crore as opined by the statutory auditors and concurred by the management.

FINANCIAL PERFORMANCE

For FY 2018-19 at standalone level your Company reported a growth of 2% in Revenue vis-a-vis FY 2017-18. Revenue increased to ? 24037.88 Lakhs from ? 23628.77 Lakhs for the corresponding period. EBITDA reduced to ? 4729.72 Lakhs from ? 6267.44 Lakhs (which does not include other Income) mainly due to one-time expenses and write-offs higher sales & marketing expense and repairs & maintenance expenses in FY 2018-19.

During the year under review your Company has recorded 16.34 Lakhs visitors down from the previous year number of 17.22 Lakhs resulting in a drop of 5%.

The outstanding secured loan including interest over due as on March 312019 aggregates to ? 114459.44 Lakhs.

DIVIDEND & TRANSFER TO RESERVES

In view of the loss for FY 2018-19 no amount is proposed to be transferred to the reserves and your Directors have not recommended payment of any dividend for the year under review.

THE STATE OF COMPANY AFFAIRS

Your Company owns and operates an Integrated Entertainment Holiday Destination IMAGICA which is built to match global standards and includes a theme park a water park a snow park a hotel and other associated activities such as retail & merchandise food and beverages etc.

STATUS OF DEBT RESOLUTION PLAN

Your company has been diligently working towards reducing its debt to bring it to manageable levels. Your company is in constant discussions with consortium lenders to arrive at a sustainable resolution and ultimately reduce the debt levels. Since June 2018 when the company became Non Performing Asset (NPA) several consortium meetings of lenders have been conducted with this objective. Your Company has proposed that the sale of its non core assets which were announced hitherto now will form part of the overall resolution. Subsequently various financing and ARC discussions have been explored along with the lenders to address the indebtedness and ultimately ensure sustainability of cash flows as well as growth of core business.

UPDATE ON SALE OF INVESTMENT OF THE COMPANY IN WALKWATER PROPERTIES PRIVATE LIMITED WHOLLY OWNED SUBSIDIARY AND SURPLUS LAND OF APPROX. 65 ACRES OF THE COMPANY

In October 2017 the Company had entered into MOU with Shaan Agro and Realty India Pvt. Ltd. (SARPL) with respect to sale of Surplus Land for overall consideration of ? 200 Crore. The Company was successful in negotiating the following arrangement (a) ? 50 Crore to be paid towards purchase of equity shares of the Company on Preferential basis (b) ? 150 Crore to be paid towards the acquisition of surplus vacant Land admeasuring approx 204 acres of Land based at Khopoli. This helped Company to receive upfront cash for its interest payments. Both of the above had been approved by the Board of Directors and Shareholders of the Company.

Accordingly the first phase was completed by SARPL and necessary procedures related to preferential allotment of equity were completed in December 2017. However in the second phase of transfer of surplus land the Company had made respective applications to all the lenders. Unfortunately there was a delay in receipt of NOCs from lenders and in the interim the account slipped into NPA.

As per the terms of the MOU the Company had to complete the entire process within a period of 6 months from the date of signing of MOU. However due to non-consummation of the transaction despite several reminders SARPL has lodged a Commercial Suit for interim relief against the Company in the Mumbai High Court. After due consideration and considering the original objective of the Company to offload the Surplus land to achieve debt reduction; the Company has agreed to Consent Terms being filed in the High Court.

UPDATE ON HOTEL SALE

During FY 2017-18 The Company had availed approval of the shareholders of the Company through Postal Ballot to sell hotel business undertaking Novotel Imagica Khopoli with underlying land of 6.1 acres and additional surplus land of 8.9 acres together with all specified tangible and intangible assets to Bright Star Investments Pvt. Ltd. (BSIPL) and had entered into a Term Sheet with BSIPL for the said Sale. BSIPL had paid ? 15 Crore of earnest money towards the same. However there has been a delay in executing the said Sale due to non-receipt of NOCs from lenders of the Company as well as on account of an existing litigant who had prayed for an injunction on the said Sale transaction. While the request for injunction has been dismissed at the arbitration level the Company had been successful in High Court in obtaining relaxation of a covenant stipulated by the Hon. Arbitrator. The Company is making various efforts to convince BSIPL on the legal position.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31 2019 was ? 8806.21 Lakhs. There was no change in the share capital during the year under review. During FY 2018-19 the Company did not issue or allot any equity shares of the Company.

During the Financial Year 2017-18 Company had issued and allotted 5 (Five) Convertible Warrants of ? 23725000 /- (Rupees Two Crore Thirty Seven Lakhs Twenty Five Thousand Only) each on preferential basis to Bennett Coleman and Company Limited (BCCL) on June 20 2017 pursuant to receipt of 25% upfront payment consideration from BCCL.

The convertible warrants were to be converted in to such number of equity shares as per the terms and conditions agreed within 18 months from the date of their allotment i.e. on or before December 19 2018 by paying balance 75% of the consideration as per the terms and conditions agreed.

Since the company neither received any request for conversion of Share warrants into Equity Shares nor had received balance 75% of the sums payable on such conversion option being exercised by the warrant holder the consideration therefore paid by such warrant holders at the time of issuance of share warrants is forfeited.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act 2013 (the Act) read with Rules framed thereunder do not apply to the Company as it has never declared and paid dividend.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act your Directors confirm that:

a) in the preparation of the annual accounts the applicable accounting standards had been followed along with proper explanation relating to material departures if any;

b) accounting policies selected have been applied consistently and reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the company at the end of the year under review and the profit and loss of the Company for the year under review;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d) the annual accounts of your Company have been prepared on 'a going concern' basis;

e) internal financial controls were laid down & followed by your company and it was ensured that such internal financial controls are adequate and were operating effectively; and

f) proper systems were devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

A. BOARD OF DIRECTORS

a) Number of meetings

The Board of Directors met 4 (four) times during FY 2018-19 i.e. on May 17 2018 August 03 2018 November 01 2018 and February 05 2019. The maximum interval between any two meetings did not exceed maximum permissible limit prescribed under the applicable laws. Details of the meetings of the Board along with attendance of the Directors therein have been disclosed in the Corporate Governance Report forming part of this Annual Report.

Further the Board has also dealt with certain items through circular resolutions which were duly confirmed by the Directors at the subsequent Board meeting(s).

b) Appointments/ Resignations

Details of the Directors who were appointed or have resigned or re-appointed during the year under review are as under:

Name of the Director and DINDesignationAppointment/ Resignation
Mr. Manmohan Shetty(1) DIN: 00013961Executive ChairmanRe-appointed as Executive Chairman
Ms. Pooja Deora(2) DIN: 00013027Non-Executive DirectorResigned
Ms. Anjali Seth(2) DIN:05234352Independent DirectorResigned
Mr. Ghulam Mohammed(3) DIN: 00173420Independent DirectorRe-appointed as Independent Director
Mr. Steven Pinto(3) DIN: 00871062Independent DirectorRe-appointed as Independent Director
Mr. Ashutosh Kale(4) DIN:06844520Executive DirectorRe-appointed as Executive Director

Note(s):-

(1) Re-appointed as Executive Chairman of the Company for a period of five consecutive years starting from September 02 2018 to September 012023

(2) Resigned and ceased to be Director of the Company w.e.f. close of business hours of November 012018

(3) Re-appointed as Independent Directors of the Company for a second term consisting of three consecutive years starting from April 04 2019 to April 03 2022

(4) Proposed re-appointment for a period starting from May 24 2019 to January 31 2020 as Executive Director of the Company subject to approval of the Members of the Company at the ensuing Annual General Meeting of the Company

The aforesaid appointments were approved by the Board on recommendation of the Nomination and Remuneration Committee of Board of Directors.

The Board places its gratitude on record for the valuable contributions of Ms. Anjali Seth and Ms. Pooja Deora during their tenure as Directors of the Company.

Further pursuant to applicable provisions of the Act and Articles of Association of the Company Mr. Kapil Bagla Non-Executive Director of the Company retires by rotation at the ensuing Tenth Annual General Meeting and being eligible offers himself for re-appointment. Business with respect to his re-appointment also forms part of the notice of the ensuing Annual General Meeting of the Company.

c) Declaration of Independence

All the Independent Directors of the Company have given their respective confirmation that they meet the criteria of independence as prescribed in the provisions of Section 149(6) the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (Listing Regulations) and that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge duties with an objective independent judgment and without any external influence.

All the Independent Directors of your Company have also confirmed compliance and adherence to the Code for Independent Directors prescribed in Schedule IV of the Act.

d) Confirmation of compliance of Code of Conduct for Directors and Senior Management

The Company has formulated and adopted a Code of Conduct for Directors and employees at Senior Management level. All the Directors and employees at Senior Management level (SMPs) have confirmed adherence to the said Code of Conduct and compliance of the same.

e) Formal Annual Evaluation:

The Company has devised a policy for performance evaluation of its individual directors the Board and the Committees constituted by it which includes criteria for performance evaluation.

The Board has carried out an annual evaluation of its own performance working of its Committees and the Directors individually in line with the requirements of the Act and Listing Regulations.

The Directors were provided with structured questionnaire to record their views. The reports generated out of the evaluation process were placed before the Board at its meeting and noted by the Directors. The evaluation process was attentive on various aspects of the functioning of the Board and its Committees such as experience and competencies performance of specific duties and obligations of the Board & its Committees and governance issues etc. The Board also carried out the evaluation of the performance of individual directors based on criteria such as contribution of the director at the meetings strategic perspective or inputs regarding the performance of the Company etc.

The Nomination and Remuneration Committee has also reviewed the performance of the individual Directors based on their knowledge level of preparation effective participation in meetings and contribution towards positive growth of the Company etc.

A separate meeting of the Independent Directors was also held during the year for evaluation of the performance of the Non Independent Directors the Board as a whole and that of the Chairman.

f) Familiarisation programme for Independent Directors

All new Independent Directors (IDs) inducted into the Board are given an orientation. Presentations are made by Executive Directors (EDs) and Senior Management giving an overview of the Company's operations to familiarize the new IDs with the Company's business operations. The new IDs are given an orientation on our business group structure subsidiary company Board constitution and procedures matters reserved for the Board and the Company's major risks and risk management strategy. Details of Familiarisation Programmes imparted to Independent Directors can be viewed at https://www. adlabsimagica.com/investordocs/Familiarisation%20 Programme%20for%20Independent%20Directors.pdf

B. COMMITTEES OF THE BOARD

The Board of Directors have constituted various Committees which are constituted in compliance with the applicable provisions of the Act and Listing Regulations. Detailed composition of all the committees along with number of meetings of these committees held during the year under review is provided in Corporate Governance Report of the Company.

a) Audit Committee

The composition of the Audit Committee of the Board of Directors is as follows:

Name of the MemberCategory
Mr. Steven A. Pinto (Chairman)Independent Director
Mr. Ghulam MohammedIndependent Director
Ms. Meghna Ghai PuriIndependent Director
Mr. Kapil BaglaNon-Executive Director

During the FY 2018-19 the recommendation(s) made by Audit Committee to the Board from time to time have been accepted by the Board.

Vigil Mechanism

The Board has established and adopted a Vigil Mechanism/ Whistle Blower Mechanism that enables the Directors and Employees to report genuine concerns about unethical behaviour actual or suspected fraud or violation of the Code of Conduct of the Company and to report unprofessional misconduct without fear of reprisal. The Vigil Mechanism provides for (a) adequate safeguards against victimization of persons who use the Vigil Mechanism; and (b) direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Details of the Vigil Mechanism are made available on the Company's website at https://www.adlabsimagica. com/investor docs/Vigil%20Mechanism%20or%20 Whistle%20Blower%20Policy.pdf

b) Nomination and Remuneration Committee (NRC)

The Company has duly constituted NRC with its composition quorum terms of reference and scope & powers in line with the applicable provisions of the Act and Listing Regulations.

Nomination and Remuneration Policy

The Board has adopted a Policy on Nomination and Remuneration of Directors and Senior Managerial Personnel of the Company. The Nomination and Remuneration Policy prescribes roles and responsibilities of the NRC and is framed mainly to deal with the following matters falling within the scope of the Nomination and Remuneration Committee of the Board of Directors:

i. To provide processes which enable the identification of individuals who are qualified to become Directors Key Managerial Personnels (KMPs) and employees at Senior Management level (SMPs) and recommend their appointment to the Board;

ii. To devise a policy on Board diversity and succession plan for the Board KMPs and SMPs;

iii. To formulate the criteria for determining qualifications positive attributes and independence of Independent Directors;

iv. To frame evaluation criteria of the Board its Committees and individual Directors;

v. Remuneration programme designed to ensure that remuneration is reasonable to attract retain and reward executives of the Company who will contribute to the long-term success of the Company based on their performance; and

vi. Determine remuneration of members of the Board KMPs and SMPs of the Company and maintaining a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company.

The Board in its meeting held on February 05 2019 amended the said Nomination and Remuneration Policy to bring it in line with statutory amendments brought into the Act and Listing Regulations (statutory amendments). Brief of such amendments made in the said Policy are as follows:

i. Updation in the definition and meaning of Senior Management;

ii. Role of the Committee enhanced in line with statutory amendments w.r.t. its duties in relation to Nomination and remuneration of Directors KMPs and SMPs; and

iii. Quorum of the NRC meeting prescribed to include atleast two members or one third of the members of the committee whichever is greater including presence of at least one Independent Director.

The Nomination and Remuneration Policy of the Company can be accessed on the website of Company at - https://www.adlabsimagica.com/investor docs/ Nomination%20and%20Remuneration%20Policy.pdf

c) Risk Management Committee (RMC)

Board has constituted a Risk Management Committee of the Board to assist the Board with regard to the identification evaluation and mitigation of operational strategic and external risks. Risk Management Committee works towards identifying internal and external risks and implementing risk mitigation steps. Status updates are provided to the Board of Directors of the Company on quarterly basis. More information on risks and threats has been disclosed in the section Management Discussion and Analysis which forms part of this Report.

d) Corporate Social Responsibility Committee (CSR Committee)

CSR is Company's sense of responsibility towards the community and environment in which it operates. It is the continuing commitment by business to behave ethically and contribute to economic development of the society at large and building capacity for sustainable livelihoods. The Company believes in conducting its business responsibly fairly and in a most transparent manner. It continuously seeks ways to bring about an overall positive impact on the society and environment where it operates and as a part of its social objectives.

The Company has duly constituted CSR Committee comprising of Mr. Manmohan Shetty Executive Chairman (Chairperson); Mr. Steven A. Pinto Independent Director; Mr. Ashutosh Kale Executive Director.

The responsibilities of the CSR Committee include:

i. Formulating and recommending to the Board of Directors the CSR Policy and indicating CSR activities to be undertaken.

ii. Recommending the amount of expenditure on the CSR activities.

iii. Monitoring CSR activities from time to time.

CSR policy has been formally formulated and adopted in terms of Section 135 of the Act and Rules framed thereunder to undertake CSR activities. The Company has always made consistent efforts to maintain an active corporate social responsibility portfolio. CSR Policy is uploaded on the website of the Company and can be accessed from https://www.adlabsimagica. com/investor docs/Corporate%20Social%20 Responsiblitv%20Policv.pdf

In view of the losses for the year under review your Company was not required to spend any amount towards the CSR activities as per the applicable provisions of Section 135 of the Act. Accordingly the details of the CSR activities during the year under review are not provided in this Report.

e) Stakeholders' Relationship Committee (SRC)

The Company has duly constituted Stakeholders' Relationship Committee comprising of Ms. Meghna Ghai Puri Independent Director (Chairperson); Mr. Kapil Bagla Non-Executive Director and Mr. Manmohan Shetty Executive Chairman. The terms of reference scope and powers of SRC are in line with the applicable provisions of the Act and Listing Regulations.

C. KEY MANAGERIAL PERSONNEL

The key managerial personnel (KMP) of the Company as per Section 2(51) and 203 of the Act are as follows:

1. Mr. Ashutosh Kale: Executive Director & Joint Chief Executive Officer

2. Mr. Dhimant Bakshi: Joint Chief Executive Officer

3. Mr. Mayuresh Kore: Chief Financial Officer

4. Ms. Divyata Raval: Company Secretary

During the year under review Ms. Madhulika Rawat resigned as Company Secretary of the Company w.e.f. February 01 2019. The Board of Directors of the Company upon recommendation of Nomination and Remuneration Committee appointed Ms. Divyata Raval as Company Secretary of the Company w.e.f. February 012019.

The Board places on record its gratitude for valuable contributions of Ms. Madhulika Rawat during her tenure as a KMP of the Company.

D. REMUNERATION OF DIRECTORS & EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are provided separately as Annexure I to this Report.

Please note that the Company has not employed any employee(s) for whom details are required to be disclosed under provisions of Section 197(12) of the Act and Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

E. DISCLOSURES RELATING TO SUBSIDIARIES AND ASSOCIATE COMPANIES

The Company has two wholly owned subsidiaries as on March 31 2019 i.e. Walkwater Properties Private Limited and Blue Haven Entertainment Private Limited. During the year under review no company became/ ceased to be subsidiary/ associate/ joint venture of the Company.

Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules 2014 salient features of the Financial Statements of each of subsidiaries are set out in the prescribed form AOC - 1 which forms part of the Financial Statements section of the Annual Report.

Pursuant to the Section 136 of the Act The financial statements of the subsidiary companies are uploaded on the website of your Company i.e. www. adlabsimagica.com under About us/ Investors Relations tab and shall also be made available for inspection by any member at the registered office of your Company during business hours on all working days (Monday to Friday) during business hours up to the date of the Annual General Meeting. Any Member desirous of obtaining a copy of the said financial statements of subsidiary companies may write to the Company Secretary at the registered office address of your Company.

Your Company has approved a policy for determining material subsidiaries and the same is uploaded on the Company's website which can be accessed using the link - https://www.adlabsimagica.com/investor docs/ Material%20Subsidiarv%20Policv.pdf

F. DEPOSITS

During the year under review your Company has not accepted any fixed deposits from the public falling under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules 2014. Therefore as on March 31 2019 there were no deposits which were unpaid or unclaimed and due for repayment.

G. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

During the year under review there were no guarantees given under Section 186 of the Act. Particulars of loans and investments have been disclosed as part of the financial statements of your Company for the year under review in Note 12 and Note 5 respectively.

H. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUBSECTION (1) OF SECTION 188 OF THE ACT IN THE PRESCRIBED FORM

All contract(s)/ arrangement(s)/ transaction(s) entered into by your Company with its related parties during the year under review were:

- in ordinary course of business of the Company;

- on an arm's length basis; and

- not material

as per the provisions of Section 188(1) of the Act read with Companies (Meetings of Board and its Powers) Rules 2014. Accordingly Form AOC-2 prescribed under the provisions of Section 134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules 2014 for disclosure of details of related party transactions which are not at arm's length basis and also which are material & at arm's length basis is not provided as an annexure of the Directors' Report.

However details of the related party transactions entered into during the year under review and as on March 31 2019 are disclosed as part of the financial statements of your Company for the year under review as Note 40.

Further pursuant to the provisions of the Act and the Listing Regulations Board has approved and adopted a Policy on related party transactions. The said policy is available on your Company's website at https://www.adlabsimagica.com/investor docs/ Related%20Partv%20Transaction%20Policv-pdf

I. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Act do not apply as there was no dividend declared and paid by the Company.

J. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which the financial statements relate and the date of this report.

K. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS

During the year under review there were no such orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations.

L. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has adequate internal control procedures which commensurate with its size and nature of business. The business control procedures ensure efficient use and protection of Company's resources and compliance with policies procedures and statutory requirements. Further internal auditors are appointed to carry audit assignments and to periodically review the transactions across the divisions and evaluate effectiveness of internal control systems.

M. AUDITORS

a) Statutory Auditors

M/s. A. T. Jain & Co. Chartered Accountants were appointed as Statutory Auditors of your Company at the Eighth Annual General Meeting of the Company to hold office for a period of 2 (two) consecutive years i.e. from the conclusion of the Eighth Annual General Meeting until the conclusion of the Tenth Annual General Meeting of the Company i.e. for Financial Years 2017-18 and 2018-19. the two terms/ tenure of the Statutory Auditors viz. M/s. A. T. Jain & Co. Chartered Accountants shall expire at the conclusion of the ensuing Annual General Meeting in line with Section 139 of the Companies Act 2013 and Rules framed thereunder.

Upon recommendation of the Audit Committee the Board has in its meeting held on May 16 2019 has approved appointment of M/s. V. Sankar Aiyar & Co. Chartered Accountants (Firm Registration No.: 109208W) as the Statutory Auditors of the Company for a period of one year i.e. from the conclusion of ensuing Tenth Annual General Meeting until the conclusion of the Eleventh Annual General Meeting subject to the approval of the Shareholders at the ensuing Tenth Annual General Meeting of the Company (proposed appointment).

M/s. V. Sankar Aiyar & Co. Chartered Accountants have issued a certificate certifying that their proposed appointment if made would be in accordance with the provisions of the Act and that they satisfy the criteria as prescribed in Section 141 of the Act. The Experience and qualifications of M/s. V. Sankar Aiyar & Co. Chartered Accountants commensurate with the size and requirements of the company. Business with respect to the proposed appointment of M/s. V. Sankar Aiyar & Co. Chartered Accountants as the Statutory Auditors of the Company forms part of the notice of the ensuing Annual General Meeting of the Company.

The observations and comments given by Auditors in their report read together with notes to Accounts are self explanatory and hence do not call for any further comments under Section 134 of the Act. The Auditors' Report does not contain any qualification reservation or adverse remark.

b) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company had appointed M/s. Aabid & Co. Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Report of the Secretarial Audit issued by M/s. Aabid & Co. in Form MR 3 for the financial year 2018-19 is annexed as Annexure II to this Report. There are no qualifications reservations or adverse remarks made by Secretarial Auditor in his report. The Board has appointed M/s. Aabid & Co. Company Secretaries as Secretarial Auditors for the financial year 2019-20.

Further in compliance with Regulation 24A of the Listing Regulations M/s. Aabid & Co. Company Secretaries have conducted secretarial audit of Walkwater Properties Private Limited (WPPL) material subsidiary of the Company. There were no qualifications reservations or adverse remarks made by Secretarial Auditor in his report issued to WPPL.

N. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy technology absorption foreign exchange earnings and outgo as required to be disclosed under the Act are provided in Annexure III to this Report.

O. CORPORATE GOVERNANCE AND COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the corporate governance requirements under the Companies Act 2013 and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. A separate section on corporate governance under the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 along with the certificate from the Practicing Company Secretary confirming the compliance is annexed and forms part of this Annual Report.

The Company has complied with the Secretarial Standards issued by Institute of Company Secretaries of India on Meeting of the Board of Directors and General Meetings.

P. ANNUAL RETURN

Extract of annual return is enclosed as Annexure IV. Copy of the Annual Return prepared in accordance with Section 92 of the Act is also uploaded on the website of the Company i.e. www.adlabsimagica.com and can be accessed from https://www.adlabsimagica. com/investor docs/Form%20MGT-9-Extract%20 of%20Annual%20Return.pdf

Q. MANAGEMENT DISCUSSION & ANALYSIS

Management Discussion and Analysis is annexed as Annexure V.

R. HUMAN RESOURCES

The Company regards human resources as a valuable asset. The Company encourages a performance driven culture and enables the employees with focused training at regular intervals. Further the training needs at all divisions are periodically assessed and training programmes are conducted using internal resources and/or engaging external facilitators and trainers. The total number of permanent employees on the rolls of the Company as on the year end were 729.

S. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has always believed in providing a safe and harassment free workplace for every individual working in the Company's premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Policy on Prevention of Sexual Harassment at Workplace has been formulated by the Company. The policy aims to develop a harmonious and productive working environment free from sexual harassment. This policy is applicable to all employees (permanent contractual temporary trainees). The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at the Workplace (Prevention prohibition and Redressal) Act 2003. During the year under review the Company received 5 (five) complaints pertaining to sexual harassment. The Company ensured that all allegations of sexual harassment were investigated and dealt with appropriately in accordance with the procedures prescribed under the Policy on Prevention of Sexual Harassment at Workplace. All the Complaints received during the year under review have been duly resolved and there are no complaints pending as at the end of the year under review.

T. ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation for the continued co-operation and assistance received from shareholders customers vendors bankers financial institutions regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their sincere appreciation for the hard- work solidarity and commitment of each and every executives officers and staff of the Company during the financial year.

For and on behalf of the Board of Directors

Manmohan Shetty

Chairman

(DIN: 00013961)

Place: Mumbai

Date: May 16 2019

   

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