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Premier Chennai Properties Ltd.

BSE: 780007 Sector: Infrastructure
NSE: N.A. ISIN Code: INE245Q01019
BSE 05:30 | 01 Jan Premier Chennai Properties Ltd
NSE 05:30 | 01 Jan Premier Chennai Properties Ltd

Premier Chennai Properties Ltd. (PREMIERCHENNAI) - Director Report

Company director report

To The Members of Premier Chennai Properties Limited

Your Directors have pleasure in presenting for your consideration and approval theTwelfth

Annual Report with the Audited Financials of the Company for the year ended March 312019

FINANCIAL ACHIEVEMENTS AND DIVIDEND

Particulars For the year ended March 31 2019 For the year ended March 31 2018
(Rs.) (Rs.)
Total Income 144886452 134033375
Profit before Taxation 103964132 94035779
Provision for Taxation 30280000 (25797965)
Net Profit after Taxation 73684132 68237814
Appropriations :
Capital Redemption Reserve - 150000
Balance carried to Balance Sheet 73684132 68087814

No amount was transferred to the General Reserve Account

DIVIDEND

In order to conserve the resources the Directors have decided not to recommend anydividend on the equity shares of the Company for the year ended March 31 2019

REVIEW OF OPERATIONS

The Project located in OMR a southern suburb of Chennai was launched in March 2012and the formal sales launch was in December 2012. Phase I and II are under constructionfor residential apartments with a saleable area of 945000 sq. ft. and 834000 sq. ft.respectively. Phase III of the township development is under land stage admeasuring 65acres. Also the construction work for villas with saleable area 918687 sq. ft. and retaildevelopment (350000 sq. ft.) is under progress

As per the JDA arrangement with Pacifica Chennai Infrastructure Company Pvt. Ltd. yourCompany would get 14.58% of revenues from the sale of apartments and as per JDAarrangement with Sylvanus Builders & Developers Ltd. 12.07% of revenues from sale ofvillas

During the financial year the company generated sales revenue of INR 105.11mn comparedto INR 82.75 mn in the previous financial year. The Profit After Tax for the year is INR73.68 mn compared to INR 68.24 mn in the previous financial year

In terms of sales performance 76 apartments and 57 villas were booked in favour ofbuyers during the financial year compared to sale of 75 apartments and 38 villas in theprevious year

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred from the end of the financial year for the Company towhich the financial statement relates and till the date of the Directors' Report

PERFORMANCE OF THE PROJECT

Apartments: During the year 76 new bookings were made and there were 41 cancellations(including earlier bookings). As of March 2019 a total of 855 units have been booked outof total inventory of 1308 units. The current price of units sold is in the range of Rs.3920 per sq ft for economy units and Rs. 3970 per sq ft for deluxe units. In additionPhase 1 apartment towers are completed and the process of handover to customers is almostcompleted. Phase II apartments are expected to be completed in the next few years

Villas: During the year 57 new bookings were made and however 20 cancellations(including earlier bookings) were observed. As of March 2019 a total of 348 units havebeen booked out of total inventory of 374 units. The current sale price is in the range ofRs. 3995 per sq ft to Rs. 5030 per sq ft. The construction of villas is at varyingstages of completion and progress is in line with expectations. Phase wise handover ofvillas is underway

FUTURE OUTLOOK

The government has aggressively pushed a culture of transparency through measures suchas reduction of Goods and Services Tax (GST) for housing projects and the Real EstateRegulation & Development Act (RERA) that have helped shore up home-buyer confidence.This will encourage home buyers in India. With growing transparency and improvingpolicies the country's real estate sector is expected to become more institutionalisedand we expect that 2020 to be a year of consolidation and recovery for the property sector

The government's "Housing for All" scheme by 2022 and the granting ofinfrastructure status to the affordable housing sector have also been aimed at boostinghousing supply for the low and mid-income segments and improving affordability of thehome-buyer. Improved affordability will drive the impending housing market's recovery. Theinfrastructure status accorded to affordable housing is expected to open up moreinstitutional sources for developers to raise funds at competitive price.

In line with the government's reformist approach to boost the real estate and housingsectors that hold key to the GDP growth the budget has provided a big push to this sectorthrough a number of initiatives. The interest subvention scheme on home loans for buyersin the budget segment will encourage a lot of buyers who are looking to purchase theirfirst home. The implementation of RERA and GST coupled with lower home interest rateregime has improved sentiment which is critical for the revival of the sector

DIRECTORS & KEY MANAGERIAL PERSONNEL

Mr. Vinode Thomas Mr. Suresh Kootala Mr. Rajan Singh Mr. Shabbir Mangalorewala Ms.Shikha Singh forms the Board of Directors of the Company as on FY ending March 31 2019

Mr. Vinode Thomas Non-Executive Director of the Company shall retire by rotation inthe ensuing Annual General Meeting and being eligible offers himself for re-appointment

Ms. Ankita Bhagat was appointed as the Company Secretary of the Company with effectfrom April 16 2019 after the resignation of Ms. Essakiammal Raj on January 28 2019

BOARD INDEPENDENCE

The Company has received Declarations of Independence pursuant to Section 149(6) of theCompanies Act 2013 and Reg. 16(1)(b) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 from each of its two Independent Directors viz. Mr.Shabbir Mangalorewala and Mr. Rajan Singh

NUMBER OF MEETINGS OF THE BOARD

The Board of Directors met four (4) times during the Financial Year ended March 312019.

The meetings were held during the year on May 23 2018 August 27 2018 November 132018 and February 8 2019. The details of the Board/Committee Meetings and attendance ofthe Directors at the Board/Committee meetings are given in

Annexure I

The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. Rajan Singh (Chairman) Mr. VinodeThomas and Mr. Shabbir Mangalorewala. Mr. Anant Kulkarni resigned with effect fromSeptember 27 2018 and accordingly the Audit Committee was reconstituted to add Mr.Shabbir Mangalorewala by a Circular Resolution passed by the Board of Directors onFebruary 8 2019. The members of the Audit Committee met four times during the FinancialYear 2018-2019. All the recommendations of the Audit Committee were accepted by the Boardof Directors. Major terms of reference and other relevant details of the Audit Committeehave been furnished in Annexure I

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility (CSR) Committee of the Company comprises of Mr.Rajan Singh (Chairman) Mr. Shabbir Mangalorewala and Ms. Shikha Singh. Due to theresignation of Mr. Anant Kulkarni with effect from September 27 2018 the Composition ofthe Corporate Social Responsiblity Committee was reconstituted by a Circular Resolutionpassed by the Board of Directors on February 8 2019 due to paucity of time to add Mr.Shabbir Mangalorewala as the member of the CSR Committee. The members of the CSR committeemet once during the year under review on February 8 2019. Major terms of reference andother relevant details of the CSR Committee have been furnished in Annexure I

NOMINATION & REMUNERATION COMMITTEE

The Nomination & Remuneration Committee of the Company comprises of Mr. ShabbirMangalorewala (Chairman) Mr. Vinode Thomas and Mr. Rajan Singh. After the resignation ofMr. Anant Kulkarni with effect from September 27 2018 the Composition of the Nomination& Remuneration Committee was reconstituted by Circular Resolution passed by the Boardof Directors due to paucity of time to add Mr Shabbir Mangalorewala as a member of theNomination and Remuneration Committee. All the recommendations of the Nomination &Remuneration Committee were accepted by the Board of Directors. Major terms of referenceand other relevant details of the Nomination & Remuneration Committee have beenfurnished in Annexure I

STAKEHOLDERS RELATIONSHIP COMMITTEE

The Company had a Stakeholders Relationship Committee. However as per Section 178 ofthe Companies Act 2013 a Company having one thousand and more Shareholders need to havea Stakeholders Relationship Committee and also as per SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 Company listed on SME Exchange does notrequire to constitute a Stakeholders Relationship Committee. As we have less than onethousand Shareholders and our Company is listed on ITP SME Exchange it is not mandatoryto have such a Committee. Accordingly the Board at its meeting held on May 23 2018 hasdissolved Stakeholders Relationship Committee

SELECTION CRITERIA FOR APPOINTMENT OF DIRECTORS

The Board has framed a selection criteria for determining the necessary qualificationsand attributes for appointment of Directors and also to ensure Board diversity. Thedetails of the same has been posted on the website of the Company athttp://www.premierchennai.co.in

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of the Board. The manner in which the evaluation has beencarried out is mentioned below:

(a) The Chairperson met the Non-Executive Directors to discuss individual performanceand ideas for improvement

(b) The Board as a whole discussed and analyzed its own performance during the yearincluding suggestions for improvement

(c) The performance of the Executive Directors was also reviewed annually which shallin turn will reflect on their remuneration

(d) The Board reviewed the necessity of establishing any Committees and delegatingcertain of its responsibilities to the Committees

Schedule IV of the Companies Act 2013 prescribes the Code for Independent Directors(Code). The Company has adopted the Code by incorporating it in Company's Code of Conduct.Roles responsibilities appointment and evaluation of the Independent Directors will begoverned by the Code

The various parameters to be considered while conducting the assessment of Board ofDirectors Independent Directors and for Committees has been posted on the website of theCompany at http://www.premierchennai.co.in

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statements in terms ofSection 134(3)(c) and Section 134(5) of the Companies Act 2013 :

(a) in the preparation of the Annual Accounts for the year ended March 31 2019 theapplicable Accounting Standards have been followed along with proper explanations relatingto material departures if any;

(b) that such accounting policies to the Annual Accounts have been selected and appliedconsistently and judgments and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company at the end of theMarch 31 2019 and of the Profit of the Company for the year ended on that date;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) that the Annual Accounts are prepared on a going concern basis;

(e) that proper internal financial controls were in place and that the internalfinancial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively

RISK MANAGEMENT & INTERNAL CONTROL SYSTEMS

Risk Management forms an integral part of the business of the Company. The Company hasa Risk Management Framework which not only ensures timely identification of risksanalysis of the reasons for such risk assessment of its materiality assessment of itsimpact but also has adequate risk mitigation processes. The Risk Management Frameworkencompasses all areas of the Company's business. The Risk Management Framework ensuresthat all risks which could potentially threaten the existence of the Company areidentified and risk mitigation steps identified for them

The Company has an adequate system of internal controls commensurate with the nature ofits business and complexity of its operations to ensure accuracy of accounting recordscompliance with all laws and regulations and compliance with all rules processes andguidelines prescribed by the management

An extensive internal audit is carried out by an independent firm of CharteredAccountants. Post audit reviews are also carried out to ensure follow up on theobservations made. The scope of the internal audit is determined by the Audit Committeeand the Internal Audit Reports are reviewed by the Audit Committee

SHARE CAPITAL

During the year under review there was no change in the Share Capital of the CompanyTherefore as on March 31 2019 the total paid-up value of the Company is Rs. 2087060/-comprising of 208706 equity shares of Rs. 10/- each

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

The Board of Directors of the Company vide its Board meeting held on August 27 2018consented to renew the Inter-Corporate Deposits of Rs. 268.83 million (approximately)granted to G.K. Industrial Park Private Limited (Fellow Subsidiary) for a further periodof 12 months at 15% per annum

An entry in this regard has been recorded in the Register of Loans Guarantee Securityand Acquisition made by the Company maintained in Form MBP-2

Details of the Loans Guarantees and Investments covered under the provisions ofSection 186 of the Companies Act 2013 are given in the Note 2.10 of the FinancialStatements

RELATED PARTY TRANSACTIONS

During the Financial Year 2018-19 the Company extended Inter Corporate Deposits ofRs.268.83 million (approximately) to G.K. Industrial Park Private Limited which is itsfellow subsidiary for a period of one year bearing interest @15% per annum

According to the Board of Directors this transaction was at arm's length basis andalso in the ordinary course of the business of the Company and a complete disclosure ofthe transaction pursuant to Clause (h) of Sub section (3) of Section 134 of the CompaniesAct 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 is made in Form AOC-2which is attached herewith as Annexure II

There are no materially significant Related Party Transactions made by the Company withits Promoters Directors Key Managerial Personnel's or other designated persons which mayhave a potential conflict with the interest of the Company at large

All the Related Party Transactions are placed before the Audit Committee and also theBoard for approval. The disclosure of transactions with related parties is set out in NoteNo. 2.22 of the Financial Statements forming part of the Annual Report

None of the Directors has any pecuniary relationships or transactions vis--vis theCompany

DEPOSITS

Your Company has not accepted any deposits from the public for the financial year underconsideration

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Since the Company does not own any manufacturing facility the Energy Conservation andTechnology Absorption particulars in the Companies (Accounts) Rules 2014 are notapplicable

Also the Company has made no foreign earnings or any foreign expenditure for theFinancial Year ended March 31 2019

PARTICULARS OF EMPLOYEES

The particulars of the employees as required under Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) and Rule 5(2) of The Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 forms part of the Directors' Report for the yearended March 31 2019 and are annexed as Annexure III

REMUNERATION POLICY

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The remuneration paid to the Directors and the Senior Management is as perthe Managerial Remuneration Policy of the Company. The Policy is also uploaded on thewebsite of the Company at http://www.premierchennai.co.in

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) Policy focuses on addressing criticalsocial environmental and economic needs of the marginalized/underprivileged sections ofthe society. Through this policy the Company aligns its CSR strategy and adopts anapproach that benefit the communities at large and create social and environmental impact

The Company adhered to its CSR commitment by contributing to the Prime Minister'sNational Relief Fund in conformity with the Schedule VII of the Companies Act 2013. TheCSR policy is posted on the Company's website at http://www.premierchennai.co.in

The Annual Report on the CSR activities is annexed herewith as Annexure IV

WHISTLE BLOWER POLICY

Whistle Blower Policy aims to provide an avenue for employees and directors of theCompany to raise serious and sensitive concerns that could have an adverse impact on theoperations and performance of the Company. The Audit Committee is entrusted withimplementing and monitoring the Vigil mechanism of the Company. The Whistle Blower policygives in detail the procedure for inquiry and investigation of complaints provides foradequate safeguards for protection of the whistle blower against adverse personal actionand calls for disciplinary action against those who abuse the policy

The Company has adopted a Whistle Blower Policy for employees to report instances ofunethical behaviour actual or suspected fraud or violation of the Company's Code ofConduct. The details of the Policy is posted on Company's website athttp://www.premierchennai.co.in

STATUTORY AUDITORS

The Company's Statutory Auditors M/s. VDSR & Co. LLP Chartered Accountantshaving Registration Number 001626S/S200085 were appointed at the Annual General Meetingheld on September 22 2017 for a period of five years subject to the annual ratificationof the same by the shareholders

However as per the Companies (Amendment) Act 2017 to the extent notified therequirement of annual ratification of appointment of Statutory Auditor is withdrawn witheffect from May 7 2018 and hence ratification by the Shareholders is not proposed in theensuing Annual General Meeting and the term of appointment of Statutory Auditor will befor a period of five years till the conclusion of the 15th Annual GeneralMeeting of the Company

The VDSR & Co. the Statutory Auditor Firm of the Company has been reconstituted asa Limited Liability Partnership and name of the Firm has been changed from VSDR & Coto VDSR & Co LLP with Registration Number 001626S/S200085

SECRETARIAL AUDIT

The Company has appointed M/s. Kaushal Dalal & Associates a firm of CompanySecretaries in Practice to undertake the Secretarial Audit of the Company pursuant to theprovisions of Section 204 of the Companies Act 2013 and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The Secretarial Audit Report is annexedherewith as Annexure V

QUALIFICATIONS IN THE AUDITORS' REPORT

There are no qualifications reservations or any adverse remarks or disclaimers made byM/s. VDSR & Co LLP. Statutory Auditors of the Company in their report and by M/s.Kaushal Dalal & Associates Company Secretaries in Practice in their SecretarialAudit Report. The Statutory Auditors have not reported any incident of fraud to the AuditCommittee of the Company in the year under review

EXTRACT OF THE ANNUAL RETURN

The details forming part of the extract of the Annual Return pursuant to Section 92(1)of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 in Form MGT 9 are annexed herewith as Annexure VI

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards i.e SS-1 and SS-2 relatingto ‘Meetings of the Board of Directors' and ‘General Meetings' respectivelyhave been duly followed by the Company during the year under review

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

ACKNOWLEDGEMENT

The Board of Directors take this opportunity to thank the shareholders employeesbankers Reserve Bank of India Securities and Exchange Board of India other Regulatoryauthorities for their co-operation and continued support to the Company. We look forwardto their continued patronage and encouragement in all our future endeavours

For and on behalf of the Board of Directors
Premier Chennai Properties Limited
Suresh Kootala Vinod Thomas
MD & CFO Director
DIN: 03033581 DIN: 01893613
Place: Mumbai
Date: 24/05/2019