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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 the Twelfth Annual Report with the Audited Financials of the Company for the year ended March 31 2019

FINANCIAL ACHIEVEMENTS AND DIVIDEND

ParticularsFor the year ended March 31 2019For the year ended March 31 2018
(Rs.)(Rs.)
Total Income144886452134033375
Profit before Taxation10396413294035779
Provision for Taxation30280000(25797965)
Net Profit after Taxation7368413268237814
Appropriations :
Capital Redemption Reserve-150000
Balance carried to Balance Sheet7368413268087814

No amount was transferred to the General Reserve Account

DIVIDEND

In order to conserve the resources the Directors have decided not to recommend any dividend 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 2012 and the formal sales launch was in December 2012. Phase I and II are under construction for 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 65 acres. Also the construction work for villas with saleable area 918687 sq. ft. and retail development (350000 sq. ft.) is under progress

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

During the financial year the company generated sales revenue of INR 105.11mn compared to INR 82.75 mn in the previous financial year. The Profit After Tax for the year is INR 73.68 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 of buyers during the financial year compared to sale of 75 apartments and 38 villas in the previous year

There have been no material changes and commitments affecting the financial position of the Company which have occurred from the end of the financial year for the Company to which 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 out of 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 addition Phase 1 apartment towers are completed and the process of handover to customers is almost completed. 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 have been booked out of total inventory of 374 units. The current sale price is in the range of Rs. 3995 per sq ft to Rs. 5030 per sq ft. The construction of villas is at varying stages of completion and progress is in line with expectations. Phase wise handover of villas is underway

FUTURE OUTLOOK

The government has aggressively pushed a culture of transparency through measures such as reduction of Goods and Services Tax (GST) for housing projects and the Real Estate Regulation & Development Act (RERA) that have helped shore up home-buyer confidence. This will encourage home buyers in India. With growing transparency and improving policies the country's real estate sector is expected to become more institutionalised and 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 of infrastructure status to the affordable housing sector have also been aimed at boosting housing supply for the low and mid-income segments and improving affordability of the home-buyer. Improved affordability will drive the impending housing market's recovery. The infrastructure status accorded to affordable housing is expected to open up more institutional sources for developers to raise funds at competitive price.

In line with the government's reformist approach to boost the real estate and housing sectors that hold key to the GDP growth the budget has provided a big push to this sector through a number of initiatives. The interest subvention scheme on home loans for buyers in the budget segment will encourage a lot of buyers who are looking to purchase their first home. The implementation of RERA and GST coupled with lower home interest rate regime 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 in the 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 effect from 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 the Companies Act 2013 and Reg. 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) 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 31 2019.

The meetings were held during the year on May 23 2018 August 27 2018 November 13 2018 and February 8 2019. The details of the Board/Committee Meetings and attendance of the Directors at the Board/Committee meetings are given in Annexure I

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

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. Rajan Singh (Chairman) Mr. Vinode Thomas and Mr. Shabbir Mangalorewala. Mr. Anant Kulkarni resigned with effect from September 27 2018 and accordingly the Audit Committee was reconstituted to add Mr. Shabbir Mangalorewala by a Circular Resolution passed by the Board of Directors on February 8 2019. The members of the Audit Committee met four times during the Financial Year 2018-2019. All the recommendations of the Audit Committee were accepted by the Board of Directors. Major terms of reference and other relevant details of the Audit Committee have 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 the resignation of Mr. Anant Kulkarni with effect from September 27 2018 the Composition of the Corporate Social Responsiblity Committee was reconstituted by a Circular Resolution passed 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 committee met once during the year under review on February 8 2019. Major terms of reference and other 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. Shabbir Mangalorewala (Chairman) Mr. Vinode Thomas and Mr. Rajan Singh. After the resignation of Mr. Anant Kulkarni with effect from September 27 2018 the Composition of the Nomination & Remuneration Committee was reconstituted by Circular Resolution passed by the Board of Directors due to paucity of time to add Mr Shabbir Mangalorewala as a member of the Nomination and Remuneration Committee. All the recommendations of the Nomination & Remuneration Committee were accepted by the Board of Directors. Major terms of reference and other relevant details of the Nomination & Remuneration Committee have been furnished in Annexure I

STAKEHOLDERS RELATIONSHIP COMMITTEE

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

SELECTION CRITERIA FOR APPOINTMENT OF DIRECTORS

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

BOARD EVALUATION

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

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

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

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

(d) The Board reviewed the necessity of establishing any Committees and delegating certain 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 be governed by the Code

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

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DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them your Directors make the following statements in terms of Section 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 the applicable Accounting Standards have been followed along with proper explanations relating to material departures if any;

(b) that such accounting policies to the Annual Accounts have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the March 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 adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

(f) that systems to ensure compliance with the provisions of all applicable laws were in 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 has a Risk Management Framework which not only ensures timely identification of risks analysis of the reasons for such risk assessment of its materiality assessment of its impact but also has adequate risk mitigation processes. The Risk Management Framework encompasses all areas of the Company's business. The Risk Management Framework ensures that all risks which could potentially threaten the existence of the Company are identified and risk mitigation steps identified for them

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

An extensive internal audit is carried out by an independent firm of Chartered Accountants. Post audit reviews are also carried out to ensure follow up on the observations made. The scope of the internal audit is determined by the Audit Committee and 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 Company Therefore 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 2018 consented 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 period of 12 months at 15% per annum

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

Details of the Loans Guarantees and Investments covered under the provisions of Section 186 of the Companies Act 2013 are given in the Note 2.10 of the Financial Statements

RELATED PARTY TRANSACTIONS

During the Financial Year 2018-19 the Company extended Inter Corporate Deposits of Rs.268.83 million (approximately) to G.K. Industrial Park Private Limited which is its fellow 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 and also in the ordinary course of the business of the Company and a complete disclosure of the transaction pursuant to Clause (h) of Sub section (3) of Section 134 of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 is made in Form AOC-2 which is attached herewith as Annexure II

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

All the Related Party Transactions are placed before the Audit Committee and also the Board for approval. The disclosure of transactions with related parties is set out in Note No. 2.22 of the Financial Statements forming part of the Annual Report

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

DEPOSITS

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

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

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

PARTICULARS OF EMPLOYEES

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

REMUNERATION POLICY

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

CORPORATE SOCIAL RESPONSIBILITY

The Corporate Social Responsibility (CSR) Policy focuses on addressing critical social environmental and economic needs of the marginalized/underprivileged sections of the society. Through this policy the Company aligns its CSR strategy and adopts an approach 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's National Relief Fund in conformity with the Schedule VII of the Companies Act 2013. The CSR 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 the Company to raise serious and sensitive concerns that could have an adverse impact on the operations and performance of the Company. The Audit Committee is entrusted with implementing and monitoring the Vigil mechanism of the Company. The Whistle Blower policy gives in detail the procedure for inquiry and investigation of complaints provides for adequate safeguards for protection of the whistle blower against adverse personal action and calls for disciplinary action against those who abuse the policy

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

STATUTORY AUDITORS

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

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

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

SECRETARIAL AUDIT

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

QUALIFICATIONS IN THE AUDITORS' REPORT

There are no qualifications reservations or any adverse remarks or disclaimers made by M/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 Secretarial Audit Report. The Statutory Auditors have not reported any incident of fraud to the Audit Committee 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 and Administration) 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 relating to `Meetings of the Board of Directors' and `General Meetings' respectively have 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/Tribunals which 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 employees bankers Reserve Bank of India Securities and Exchange Board of India other Regulatory authorities for their co-operation and continued support to the Company. We look forward to their continued patronage and encouragement in all our future endeavours

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