Industrial Investment Trust Ltd.
|BSE: 501295||Sector: Financials|
|NSE: IITL||ISIN Code: INE886A01014|
|BSE 00:00 | 08 Feb||89.00||
|NSE 00:00 | 08 Feb||89.40||
|Mkt Cap.(Rs cr)||201|
|Mkt Cap.(Rs cr)||200.69|
Industrial Investment Trust Ltd. (IITL) - Director Report
Company director report
Your Directors are pleased to present the Eighty Ninth Annual Report ofthe Company together with the Audited Statements of Accounts for the year ended March 312022.
The summarized standalone and consolidated results of your Company andits subsidiaries are given in the table below.
* includes impact on new Indian Accounting Standard application.
Previous year figures have been regrouped / rearranged wherevernecessary.
Indian Accounting Standards
The Company has adopted Indian Accounting Standards (IND AS) from theFY 2018-19 and has replaced the existing Indian GAAP prescribed under Section 133 of theCompanies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014.
Results of operations and state of Company's affairs
During the year the Company has incurred pre-tax Loss of Rs 9960.46lakhs as compared to pre-tax loss of Rs 95.56 lakhs in the previous year. TheRevenue from operations during the year was Rs 940.47 lakhs as compared to Rs 970.58lakhs in the previous year. During the year the Company sold equity investment ofFGILICL incurring a loss of Rs 10395.00 lakhs.
The income on preference shares amortization is Rs 617.03 lakhscompared to previous year of Rs 571.49 lakhs in line with guidelines on Ind ASimplementation. The Company has provided loss on fair value changes during the yearamounting to Rs 262.69 lakhs as compared to Rs 586.37 lakhs in the previousyear. The interest income is of Rs 318.24 lakhs (which comprises of interest onloans of Rs 179.67 lakhs and interest on deposits with banks of Rs 138.57lakhs) as compared to previous year interest income of Rs 398.30 lakhs (whichcomprises of interest on loans of Rs 259.94 lakhs and interest on deposits withbanks of Rs 138.36 lakhs).
The Reserve Bank of India (RBI) vide its Letter dated June 25 2018 hasprohibited the Company from expanding its credit / investment portfolio other thaninvestment in Government Securities till Net NPAs are brought down to below 5%. TheCompany submits the action plan to RBI on the status of NPAs and recoveries from time totime.
The management is exploring options to monetize Non PerformingInvestment / Assets of the Company. Every effort is taken to reduce the NPAs.
The Company is registered with Reserve Bank of India (RBI) as aNon-Deposit taking Non- Banking Financial Company (NBFC). It is a 'Systemically ImportantNon-Deposit taking NBFC'. It is primarily a Holding Company holding investments in itssubsidiaries and other group Companies and joint ventures. The activities of the Companycomprises of Investment in equity shares quoted as well as unquoted units of mutualfunds Fixed deposits with renowned Banks Inter-Corporate Deposits and Loans to its GroupCompanies / entities. The Committee of Investments / Loans and Risk Management isentrusted with the power to make investments and grant loans and the Board of Directors isapprised of the investments of the Company and monitors the deployment of resources onregular basis.
The details of the Company's investments and analysis of securitiesheld are given in Note 7 to the Balance Sheet as on March 31 2022. The loans tosubsidiaries and other entities within the group and interest income are disclosed in Note6 and Note 20 to the Balance Sheet and Statement of Profit and Loss respectively as onMarch 31 2022.
During the first half of the Financial Year 2021-2022 COVID-19 Pandemiccontinued to spread globally including India resulting in significant volatility infinancial markets and decrease in activities. Real Estate and hospitality business werethe most hard hit.
Major portion of the loans granted to the group companies are in thebusiness of real estate. However the sector has been facing trouble from last few yearsbut the impact of Coronavirus on the Indian real estate sector brought propertytransactions to a near-halt.
The Company derives major source of revenue from the interest income onthe loans granted to various group companies and joint ventures of the subsidiarycompanies. Some of these loans have become NPAs on account of non-repayment of loan aswell as default in servicing their interest obligations. In compliance with RBIguidelines the Company is also required to make provisions on said loans which havefurther impacted the financials of the company its performance and profitability.
Your management has assessed the potential impact of the COVID-19global pandemic on the Company and based on the current assessment they consider thatthere will be no foreseeable material impact on the operations of the Company and thecarrying value of assets and liabilities.
Material changes and commitments occurred after the close of thefinancial year till date of this report which affects the financial position of theCompany
a) One Time Settlement of Loan with IITL-Nimbus The Express Park View(EPV II): The Company had granted an unsecured loan amounting to Rs 23.19 crores for itsbusiness purpose to EPV II in various branches between 2013 - 2016. EPV II was regular inservicing its interest obligation upto September 30 2015.
The Shareholders of the Company at their Annual General Meeting heldon September 23 2017 had accorded their consent by an Ordinary Resolution to the Boardof Directors for Restructuring of Unsecured Loan of Rs 231987365/- granted to EPV IIalong with interest thereon by grant of Moratorium of four years.
The total outstanding loan (including funded interest term loan of Rs15764090/-) as on date is Rs 247751455/-.
Due to sluggish project sales unsold inventory and paucity of fundsthe Firm has not been able to repay the loan and interest and have proposed the followingterms for one time settlement of the outstanding loan (including FITL) totaling to INR24.77 crores:
1. To waive the total outstanding interest amount of Rs 141157242/-as on June 30 2022 and all future interest amount thereafter upto December 312022.
2. The Firm will repay the outstanding loan on or before December 312022.
3. The Firm reiterates their commitment to remit the outstanding loanamount.
4. In the unlikely scenario of the amount not being remitted byDecember 312022 the Firm will without any further request or extension transfer theflats of equivalent of outstanding loan amount with completion certificates obtained andfacilitate registration of the same. In such eventuality no maintenance charges will belevied on the flats until the time they are sold or for a period of 12 months endingDecember 31 2023 whichever is earlier.
The said proposal is being placed at the ensuing Annual General Meetingfor the approval of the shareholders.
b) One Time Settlement of Loan with IITL Nimbus The Hyde Park Noida:IITL Nimbus The Hyde Park Noida had availed a total loan of Rs.36.50 crores in varioustranches between 2013 - 2017. The total outstanding loan as on date is '162794964/-
Due to sluggish project sales unsold inventory and paucity of fundsthe Firm has not been able to repay the loan and interest and have proposed the followingterms for one time settlement of the outstanding loan of '162794964:
1. To waive the total outstanding interest amount of Rs 26371000/-as on June 30 2022 and all future interest amount thereafter upto December 31 2022.
2. The Firm will repay the outstanding loan on or before December 312022.
3. The Firm reiterates their commitment to remit the outstanding loanamount.
4. In the unlikely scenario of the amount not being remitted byDecember 31 2022 the Firm will without any further request or extension transfer theflats of equivalent of outstanding loan amount with completion certificates obtained andfacilitate registration of the same. In such eventuality no maintenance charges will belevied on the flats until the time they are sold or for a period of 12 months endingDecember 312023 whichever is earlier.
The said proposal is being placed at the ensuing Annual General Meetingfor the approval of the shareholders.
In view of losses incurred by the Company your Directors have notrecommended any dividend for the financial year 2021-2022.
Management Discussion and Analysis
Management Discussion and Analysis comprising an overview of thefinancial results operations / performance and the future prospects of the Company formspart of this Annual Report.
Change in Capital Structure
During the year the Company has not issued any shares or convertiblesecurities. The Company does not have any Scheme for issue of shares including sweatequity to the employees or Directors of the Company.
As on March 31 2022 the issued subscribed and paid up share capitalof your Company stood at Rs 225475500/- comprising 22547550 Equity Shares of Rs10/- each.
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act theAnnual Return as on March 31 2022 is available on the Company's website onhttp://www.iitlgroup.com/newStatic/Reports/ Annual_Return-2021-2022.pdf
Compliance with Secretarial Standards
The Board of Directors affirm that the Company has complied with theapplicable Secretarial Standards issued by the Institute of Company Secretaries of India(SS1 and SS2 respectively) relating to Meetings of the Board and its Committees which havemandatory application.
The Consolidated Financial Statements of your Company for the financialyear 2021-22 are prepared in compliance with applicable provisions of the Companies Act2013 Accounting Standards and the Listing Regulations. The Consolidated FinancialStatements have been prepared on the basis of audited financial statements of the Companyits subsidiaries associate and joint venture companies as approved by their respectiveBoard of Directors.
Subsidiary Associate and Joint Venture Companies
Pursuant to sub-section (3) of Section 129 of the Act the statementcontaining the salient features of the financial statement of company's subsidiariesassociate and joint venture Companies is given as Annexure 1.
Brief particulars about the business of each of the Subsidiaries andJoint Venture / Associate Companies is given hereunder:-
a. IIT Investrust Limited (IITIL)
The subsidiary company IITIL was into Stock Broking and Depositorybusiness. In June 2019 IITIL had applied for Surrender of membership of Stock Brokingbusiness and Depository Participant. BSE and SEBI granted approvals for surrender. UponSurrender of Stock Broking License and License as Depository Participant the subsidiarycompany ceased to be the Stock Broker as well as Depository Participant. Besides thatIITIL also provides Advisory and Consultancy services to various Body Corporates ifrequired from time to time.
The total income of the Company for the year ended on March 312022 is Rs115.23 lakhs as compared to Rs 101.94 lakhs in the previous year. The pre-taxprofit for the year ended March 31 2022 is Rs 16.23 lakhs as against the pre-taxprofit of Rs 27.17 lakhs for the preceding year.
b. IITL Projects Limited - (IITLPL)
IITLPL is listed on BSE Limited.
IITLPL is engaged in Real Estate business construction of residentialcomplex in the National Capital Region (NCR). It has acquired a plot of land on long termlease under Builders Residential Scheme (BRS) of the Greater Noida Industrial DevelopmentAuthority (GNIDA).
Apart from constructing its own project IITLPL is also engaged inconstruction of residential flats through Special Purpose Vehicles (SPVs) and these SPVshave been allotted plots of land on long term lease under Builders Residential Scheme(BRS) of the New Okhala Industrial Development Authority (NOIDA) and Yamuna ExpresswayAuthority (YEA). The total lease hold area allotted to the Company alongwith SPVs isaround 265000 sq. meters and the projects are under various stages of construction.
Projects developed by the Company:
Express Park View I: This project is completed and most of the flatshave been allotted to the buyers.
Projects being developed by the Company jointly with SPVs:
1) The Hyde Park
2) The Golden Palms
3) Express Park View-II:
The firm has obtained completion certificate for 7 of the 10 towersunder construction in Phase I.
It is also constructing a commercial complex containing of 39 units inPhase II.
The Firm has presently undertaken construction of low rise apartmentsas Phase III under the name and style of THE EXPRESS PARK VIEW-II LOW RISEAPARTMENTS". It is proposed to construct 310 flats in 16 towers (G+4). The RERAregistration is complete and the construction work has just begun.
4) The Golden Palm Village:
Yamuna Expressway Industrial Development Authority ("YEIDA")vide letter no. Patrank-Y.E.I/Builders/628/2021 dated July 28 2021 directed the Firm todeposit a lease rent of INR 48220627.06 (INR Four Crore Eighty Two Lakhs TwentyThousand Six Hundred Twenty Seven and Paise Six only) on or before 31.07.2021 in order toinitiate the process of execution of surrender deed.
On July 30 2021 Firm deposited the lease rent demanded by YEIDA andon 30.11.2021 executed surrender deed for partial surrender of land and fresh allotment of55152 Sq. Mtrs land (out of 102995.70 sq.mtrs. land held by the firm) under ProjectSettlement Policy which was in proportion to payment made by the firm.
The total Income of IITL Projects for the year ended on March 31 2022is Rs 1971.10 lakhs as compared to Rs 43.96 lakhs in the previous year.Increase in income is on account of share of profit of Rs 1848.15 lakhs due toreversal of land cost for partial surrender of project land of the Joint Venture IITLNimbus The Palm Village. On consolidation basis the income of the Company increased to Rs122.95 lakhs as compared to Rs 43.96 lakhs in the previous year and profitaccounted to Rs 1065.75 lakhs in the current year as compared to previous yearloss Rs 1677.42 lakhs
c. IITL Management and Consultancy Private Limited (formerly known asIIT Insurance Broking and Risk Management Private Limited)
The subsidiary company IIT Insurance Broking and Risk ManagementPrivate Limited (IIT Insurance) was in the business of Direct Insurance Broking (Life andNon-Life). During the year 2019-20 IIT Insurance had made an application to InsuranceRegulatory and Development Authority of India (IRDAI) for voluntary surrender of theBroking License (Life and Non-Life).
IRDAI vide its letter dated June 17 2021 granted approval forvoluntary surrender of Certificate of Registration and advised the Company to submit copyof certificate issued by Registrar of Companies (ROC) after making required changes fordeletion of Main Object of Memorandum of Association and change of name of the Company.
Subsequently IIT Insurance changed its name to IITL Management andConsultancy Private Limited and also changed its Object Clause. The same were approved byMinistry of Corporate Affairs. The said Certificates received from Ministry of CorporateAffairs were sent to IRDAI. IRDAI granted approval to the application of Surrender ofCertificate of Registration (COR) of Broking License of the company. Consequent to thisIIT Insurance ceased to be an Insurance Broker.
The Company's revenue of operations for the financial year ended March31 2022 is Rs 8.48 lakhs comprising Interest on Bank Deposits of Rs 811710/-and Brokerage Income of Rs.35930/- as compared to the revenue of Rs 9.49 lakhsduring the previous year. The pre-tax profit for the year ended March 31 2022 is Rs 4.61lakhs as against the pre-tax profit of Rs 1.30 lakhs for the preceding year.
d. IITL Corporate Insurance Services Private Limited (IITL CorporateInsurance)
IITL Corporate Insurance Services Private Limited (IITL CorporateInsurance) had withdrawn the application for undertaking the business of Corporate Agency.Subsequent to that it did not commence any business. In January 2020 IITL CorporateInsurance had filed application under section 248 of Companies Act 2013 with Ministry ofCorporate Affairs for removal of its name from the Register of Members. The subsidiaryCompany received an Intimation letter from Ministry of Corporate Affairs that the name ofIITL Corporate Insurance Services Private Limited has been struck off from the Register ofCompanies w.e.f. August 23 2021 and the Company stands dissolved.
Joint Venture / Associate Companies:
a. Future Generali India Life Insurance Company Limited (FGILICL) aJoint Venture:
In the year 2013 the Company had made an investment of Rs 340Crores in Future Generali India Life Insurance Company Limited to acquire 22.5% of itsequity capital. Subsequent to the acquisition FGILICL became a joint venture of theCompany.
FGILICL made several Rights Issues. The Company did not participate inany of the Rights Issue due to which the company's stake reduced to 16.62%. Since coupleof years the Company had been exploring to divest its stake in FGILICL. In December 2021the Company received offer from Generali Participations Netherlands N.V (Generali) one ofthe Joint Venture partners of FGILICL to acquire Equity holding of 16.62% (equivalent to326700000 equity shares) at a total consideration of Rs 225 crores. On December18 2021 the Company entered into Share Purchase Agreement with Generali. The saidtransaction was subject to the approval of Insurance Regulatory and Development Authorityof India (IRDAI) Registrar of Companies Competition Commission of India (CCI) ReserveBank of India Shareholders of the Company in general meeting / postal ballot and allother Statutory / Regulatory authorities as may be required.
Upon receiving approval from all authorities and shareholders thetransaction was consummated on March 28 2022.
b. World Resorts Limited (WRL) an Associate Company:
WRL is into the business of hospitality and owns and operates a DeluxeFive Star Resort by the name "Golden Palms Hotel & Spa" Off. Tumkur RoadBangalore.
The hospitality industry has perhaps been most hard-hit by COVID-19.The lockdown to contain spread of COVID-19 in the country has had disastrous impact on thehospitality sector particularly for hotels and hoteliers. The hotels are businesses thatare very capital intensive and even have very high fixed costs. The associate company hasincurred immense losses during last two years on account of COVID-19.
Internal financial controls and their adequacy
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of fraud error reportingmechanisms the accuracy and completeness of the accounting records and the timelypreparation of reliable financial disclosures.
M/s Sheetal Patankar & Co. Chartered Accountants a consulting /audit firm were appointed for determining the adequacy and operating effectiveness of theexisting Internal Financial Controls over Financial Reporting of the Company on behalf ofthe management.
They have observed that there are no material weaknesses in thefinancial controls of the Company. Based on the above management believes that adequateinternal financial controls exist in relation to its Financial Statements. The operatingstaff are complying with the requirements.
Directors and Key Managerial Personnel
There was no change in Directorship during the year under review.
As on date Dr. B. Samal Mr. Bipin Agarwal Mr. Venkatesan NarayananMr. Milind Desai Ms. Sujata Chattopadhyay and Mr. Shankar Narayan Mokashi are theDirectors of the Company.
In terms of the provisions of the Act Dr. B. Samal Director retiresby rotation at the ensuing Annual General Meeting and being eligible seeksre-appointment.
The necessary resolution for re-appointment of Dr. B. Samal forms partof the Notice convening the Annual General Meeting scheduled to be held on September 242022. The profile and particulars of experience that qualify Dr. Samal for Boardmembership are disclosed in the said Notice.
Key Managerial Personnel
In terms of Section 203 of the Act the Key Managerial Personnel of theCompany are Dr. B. Samal Executive Chairman Mrs. Cumi Banerjee Chief Executive Officerand Company Secretary and Mr. Kamlesh Kumar Agrawal Group Chief Financial Officer.
The Company conducts suitable familiarisation programme for IndependentDirectors so as to associate themselves with the nature of the industry in which theCompany operates and business model of the Company in addition to regular presentations onfinancial statements and other relevant data. In addition to the above Directors areperiodically advised about the changes effected in the Corporate Law Listing regulationsand RBI regulations with regard to their roles rights and responsibilities as Directorsof the Company.
The details of the familiarisation programme have been disclosed andupdated from time to time on the Company's website and its weblink ishttp://www.iitlgroup.com/newStatic/AboutUs.aspx.
Meetings of the Board
Seven meetings of the Board of Directors were held during the year. Forfurther details please refer Report on Corporate Governance.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 yourDirectors to the best of their knowledge and belief make following statements that:
(a) In preparation of the annual accounts for the year ended March312022 the applicable accounting standards read with requirements set out under ScheduleIII to the Act have been followed and there are no material departures from the same;
(b) Such accounting policies have been selected and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company as at March 31 2022 andloss of the Company for the year ended on that date;
(c) Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 are 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.
Your Company has been practicing the principles of good CorporateGovernance over the years and it is a continuous and ongoing process. A detailed Report onCorporate Governance practices followed by your Company as prescribed by SEBI in ChapterIV read with Schedule V of Listing Regulations together with a Certificate from M/sChandanbala Jain & Associates Practicing Company Secretaries confirming compliancewith the conditions of Corporate Governance are provided separately in this Annual Report.
Declaration by Independent Directors
The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed both under Section 149(7) of the Companies Act 2013 and Regulation 16(b) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. Further the Independent Directors of the Company have registeredthemselves with Indian Institute of Corporate Affairs for empanelment in the databank ofIndependent Directors.
Policy on appointment and remuneration for Directors Key ManagerialPersonnel and senior management employees
The Board of the Directors has framed the policy which lays down aframework in relation to Remuneration of Directors Key Managerial Personnel and SeniorManagement of the Company. This policy also lays down criteria for selection andappointment of Board Members. The Nomination and Remuneration Policy is uploaded on theCompany's weblink viz. http://www.iitlgroup.com/newStatic/Nomination_Remuneration_Policy.pdf.
Related Party Transactions
The Company has laid down a Related Party Transaction (RPT) Policy forpurpose of identification and monitoring of such transactions. The policy on Related PartyTransaction as approved by the Board is uploaded on the Company's weblink viz. http://www.iitlgroup.com/newStatic/Related_Party_Transaction_Policy.pdf
All Related Party Transactions are placed before the Audit Committeeand also the Members / Board for their approval wherever necessary.
The details of the related party transactions as per Indian AccountingStandard 24 are set out in Note 36 to the Standalone Financial Statements forming part ofthis report.
All RPTs entered during the financial year by the Company are inordinary course of business and on an arms' length basis. Particulars of materialcontracts or arrangements made with related parties referred to in Section 188(1) of theCompanies Act 2013
in the prescribed Form AOC-2 is appended as Annexure 2 to theDirectors' Report.
Corporate Social Responsibility (CSR)
The Corporate Social Responsibility Committee has formulated andrecommended to the Board a Corporate Social Responsibility Policy (CSR Policy) indicatingthe activities to be undertaken by the Company which has been approved by the Board.
The CSR Policy is disclosed on the Company's website
The provisions relating to CSR enumerated under Section 135 of theCompanies Act 2013 are not applicable to the Company during the year under review. Hencethe Annual Report on CSR is not attached to this Report.
Pursuant to provisions of Section 204 of the Companies Act 2013 andrules made thereunder the Company has appointed M/s. Chandanbala Jain & AssociatesPracticing Company Secretaries (CP No. 6400) to undertake the Secretarial Audit of theCompany. The Secretarial Audit Report is included as Annexure 3 and forms anintegral part of this report. The Secretarial Audit Report does not contain anyqualifications or reservations. The observations made in the report are self-explanatory.
Annual Secretarial Compliance Report
M/s. Chandanbala Jain & Associates Practicing Company Secretaries(CP No. 6400) have submitted Annual Secretarial Compliance Report for the financial year2021-22 for all applicable compliances as per Securities and Exchange Board of IndiaRegulations and Circulars / Guidelines issued thereunder and the same was submitted tostock exchanges within the permissible time limit.
Particulars of Loans given Investments made Guarantees given andSecurities provided
The provisions of Section 186 of the Act pertaining to investment andlending activities is not applicable to the Company since the Company is a Non-BankingFinancial Company whose principal business is acquisition of securities.
Details of guarantees and/or security in connection with loans to otherbodies corporates or persons as covered under the provisions of Section 186 of the Actare given in the Notes to the Financial Statements.
Capital Adequacy Ratio
Your Company's Capital to Risk Assets Ratio (CRAR) calculated in linewith Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms(Reserve Bank) Directions 2007 ("RBI Directions") stood at 716.02% above theregulatory minimum of 15%. Your Company's asset size is Rs 322.03 crores. TheCompany has received a certificate from the Auditors of the Company Chaturvedi & ShahLLP Chartered Accountants pursuant to Non-Banking Financial Companies Auditors' Report
(Reserve Bank of India) Directions 2008 confirming compliance of theconditions with respect to Systemically Important Non-Deposit taking Non-Banking FinancialCompanies.
Conservation of energy technology absorption foreign exchangeearnings and outgo:
The details of conservation of energy technology absorption foreignexchange earnings and outgo are as follows:
(A) Conservation of energy: Not Applicable
(B) Technology absorption: Not Applicable
(C) Foreign exchange earnings and Outgo: During the year underreview the Company did not earn income in foreign exchange as well as did not incur anyexpenditure in foreign exchange.
The Company has formulated a Risk Management Policy. The Companythrough the Committee for Investments / Loans and Risk Management identifies evaluatesanalyses and prioritise risks in order to address and minimize such risks. Thisfacilitates identifying high level risks and implement appropriate solutions forminimizing the impact of such risks on the business of the Company. The Committee submitsits recommendations and comments for Board's review and necessary action.
Vigil Mechanism / Whistle Blower Policy
The Company has a Vigil Mechanism / Whistle Blower Policy to report tothe management instances of unethical behavior actual or suspected fraud or violation ofthe Company's code of conduct. The details of the Vigil Mechanism policy have beenprovided in the Corporate Governance Report and also disclosed on the website of theCompany viz http://www.iitlgroup.com/newStatic/ Vigil_Mechanism_Whistle_Blower_Policy.pdf
Evaluation of the Board its Committees and individual Directors
The Nomination and Remuneration Policy of the Company empowers theNomination and Remuneration Committee to formulate a process for evaluating theperformance of Directors Committees of the Board and the Board as a whole.
The process for evaluation of the performance of the Director(s) /Board / Committees of the Board for the financial year 2021-2022 was initiated by theNomination and Remuneration Committee by sending out questionnaires designed for theperformance evaluation of the Directors Committees Chairman and the Board as a whole.The Committee also forwarded their inputs to the Board for carrying out the PerformanceEvaluation process effectively.
In terms of provisions of Companies Act 2013 and Schedule II - Part Dof Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board carried out the annual performance evaluationof its own including the various Committees and individual Directors with a detailedquestionnaire covering various aspects of the Boards functioning like composition ofBoard and its Committees Board culture performance of specific duties and obligations.
In a separate meeting of Independent Directors performance ofNon-Independent Directors performance of the Board as a whole and performance of theChairman was evaluated. Based on the feedback received from the Independent Directors andtaking into account the views of Executive Directors and the Non-Executive Directors theBoard evaluated 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.
Auditors and Auditors' Report
The Statutory Auditors of the Company Chaturvedi & Shah LLP holdsoffice till the conclusion of the ensuing Annual General Meeting.
Accordingly on the basis of the recommendation of the Audit Committeethe Board of Directors in their meeting held on August 13 2022 proposed to appointMaharaj N R Suresh and Co LLP Chartered Accountants registered with the Institute ofChartered Accountants of India under firm registration number (ICAI FRN No. 001931S /S000020) as Statutory Auditors of the Company in place of the retiring AuditorsChaturvedi & Shah LLP Chartered Accountants who shall hold office from theconclusion of this 89th Annual General Meeting (AGM) till the conclusion of the94th Annual General Meeting of the Company to be held in the year 2027.
Maharaj N R Suresh and Co LLP Chartered Accountants have confirmedtheir eligibility under Section 141 of the Companies Act 2013 and the Rules framedthereunder to the effect that their appointment if made would be within the prescribedlimits under the Act and that they are not disqualified for appointment. As required underRegulation 33(1)(d) of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 the Auditors have also confirmed that they hold a valid certificate issued by PeerReview Board of the Institute of Chartered Accountants of India.
Chaturvedi & Shah LLP Chartered Accountants have carried outStatutory Audit and the Notes on financial statement referred to in the Auditors' Reportissued by them are self-explanatory and hence do not call for any further comments underSection 134 of the Act. The Auditors' Report on the Audited Financial Results (Standalone)does not contain any qualification reservation or adverse remark.
However the Auditors' Report on the Audited Financial Results(Consolidated) contains audit qualifications as detailed hereunder:
Details of Audit Qualification:
1) IITL - Nimbus The Express Park View (the firm) joint venture hasnot provided interest of Rs 297.03 lakhs on unsecured loans. The auditors of thefirm and subsidiary company namely IITL Projects Limited have given qualified opinion onthis matter in their report on the financial statements as at 31st March 2022.
As a result the Company's share of loss are understated by Rs 28.75lakhs and consequently the profit for the year is overstated and retained earnings at theyear end is overstated by an equal amount.
2) IITL - Nimbus The Hyde Park Noida (the firm) joint venture has notprovided interest of Rs 95.79 lakhs for the period from 01.10.2021 to 31.03.2022 onunsecured loans. The auditors of the firm and subsidiary company namely IITL ProjectsLimited have given qualified opinion on this matter in their report on the financialstatements as at 31st March 2022.
As a result the Company's share of loss are understated by Rs 34.36lakhs and consequently the profit for the year is overstated and retained earnings at theyear end is overstated by an equal amount.
The two projects IITL-Nimbus The Express Park View and IITL Nimbus -The Hyde Park are in NCR Region. As per the NCR region real estate scenario apparentlyhas over 1 lakh units of unsold inventory as of March 31 2022.
Due to COVID-19 and also increase in raw material cost coupled withslow sales in these projects the cash flows of these two firms have been adverselyaffected.
Given the unsold stock in hand the cost of individual flats are notbeing realized as the market realizable value is lesser than the holding cost.
In the light of the above due to liquidity issue the firms have notbeen able to provide the interest due on the loan. They have approached the company forOne Time Settlement.
The firms are pursuing settlement with the company and is hopeful thematter shall be resolved during the current financial year.
Significant and material orders passed by the regulators
During the period under review there were no significant and materialorders passed by the regulators/ courts or tribunals that would impact going concernstatus of the Company and its future operations.
Transfer of Dividend amounts to Investor Education and Protection Fund
In terms of Rule 5(4) of the Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 a sum of Rs 736351/-lying with the Company as unclaimed dividend for the year 2013 - 2014 i.e. for a period ofseven years from the date they became due for payment were transferred during the periodunder review to the Investor Education and Protection Fund.
Pursuant to Rule 5(8) of the Investor Education and Protection FundAuthority (Accounting Audit Transfer and Refund) Rules 2016 the Company has filed thedetails of unpaid and unclaimed amounts lying with the Company as on March 31 2021 withthe Ministry of Corporate Affairs and have uploaded the said details on the website of theCompany viz.www.iitlgroup.com and the website of the Ministry of Corporate Affairs(www.mca.gov.in).
Transfer of Equity Shares to Investor Education and Protection Fund(IEPF) Account on which dividend has not been paid or claimed by the shareholders forseven consecutive years or more
According to the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 ('IEPF Rules') the shares on whichdividend has not been paid or claimed by the shareholders for seven consecutive years ormore shall be transferred to the demat account of the IEPF Authority.
Accordingly the Company has transferred 31692 Equity shares to IEPFaccount as per the requirements of the IEPF rules. The details are available on ourwebsite at
Particulars of Employees and related disclosures
A) Details of the ratio of the remuneration of each Director to themedian employee's remuneration and other details as required pursuant to Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014:
* Remuneration not comparable since Mr. Shankar Narayan Mokashi (LICNominee) was appointed as an Additional Director w.e.f.
November 12 2020 and hence his remuneration is for part of the year2020-21 $ Remuneration not comparable since Mr. Kamlesh Kumar Agrawal was appointed asGroup Chief Financial Officer by Board w.e.f.
September 11 2020 and hence his remuneration is for part of the year2020-21 A(i) On account of financial position of the Company the ExecutiveChairman voluntarily relinquished 50% of his salary w.e.f. October 01 2021. Hence thereis a decrease in remuneration of Executive Chairman for the year ended March 31 2022.
(ii) The remuneration of the Non-Executive Directors consists ofsitting fees only and Increase in remuneration is based on various factors such asDirector's participation in Board and Committee Meetings during the year otherresponsibilities undertaken such as Membership or Chairmanship of Committees etc.
(iii) During the period April - September 2020 the Company deductedthe salaries of KMPs on account of COVID-19. However w.e.f. October 01 2020 the salarieswere once again regularized. Hence the difference.
Note: The remuneration to Directors includes sitting fees paid to themfor the financial year 2021-22.
Note: The remuneration to Directors includes sitting fees paid to themfor the financial year 2020-21.
i) Median remuneration of employees of the Company during the financialyear 2021-2022 was Rs 718128./-.
ii) Median remuneration of employees of the Company during thefinancial year 2020-2021 was Rs 433092/-. In the financial year there was an increaseof 65.81% in the median remuneration of employees.
iii) There were 12 confirmed employees on the rolls of the Company ason March 31 2022.
iv) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year i.e. 2021-22 was27.14% whereas the decrease in the managerial remuneration for the same financial year was20.05%. (This excludes the salaries of the newly joined and resigned employees during thesame financial year).
v) It is hereby affirmed that the remuneration paid is as per theRemuneration Policy for Directors Key Managerial Personnel and other employees.
B) Details of every employee of the Company as required pursuant torule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014:
During the year under consideration none of the employees of thecompany was in receipt of remuneration in excess of limits prescribed under clause 5(2) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Henceparticulars as required under 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 have not been provided.
Your Directors state that no disclosure or reporting is required inrespect of the following matters as there were no transactions on these items during theyear under review:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise.
2. Issue of shares (including sweat equity shares) to employees of theCompany under any scheme
3. Details relating to deposits covered under Chapter V of the Act.
4. The provisions of Section 148 of the Act are not applicable to theCompany. Accordingly there is no requirement of maintenance of cost records as specifiedunder Section 148(1) of the Act.
5. No fraud has been reported by the Auditors to the Audit Committee orthe Board.
6. There is no Corporate Insolvency Resolution Process initiated underthe Insolvency and Bankruptcy Code 2016.
During the year under review the Company has not accepted any depositsfrom the public.
Disclosures under Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013
In accordance with the provisions of the Sexual Harassment of Women atthe Workplace (Prevention Prohibition and Redressal) Act 2013 Internal ComplaintsCommittee (ICC) has been set up to redress complaints. ICC has not received any complaintsduring the financial year 2021-2022.
Your Directors place on record their appreciation for employees whohave contributed to the growth and performance of your Company.
Your Directors thank the bankers shareholders and advisers of theCompany for their continued support.
Your Directors also thank the Central and State Governments and otherstatutory authorities / regulators for their continued support.