Your Directors have pleasure in presenting the 23rd Annual Report togetherwith Audited Accounts of the Company for the financial year ended on March 31st2018.
The financial performance of the Company for the financial year ended on March 31st2018 is summarized as below:
|Particulars ||Figures for Current Reporting Period ended March 31 2018 ||Figures for Current Reporting Period ended March 31 2017 |
| ||(Figures are in Rs. Lacs) ||(Figures are in Rs. Lacs) |
|Total Revenue ||20033.92 ||28539.35 |
|Total Expenses ||19917.47 ||28429.65 |
|Profit before tax ||116.45 ||109.78 |
|Tax expense: || || |
|Current tax ||24.09 ||23.15 |
|Previous Year Tax ||44.24 ||- |
|Deferred Tax Liability (Assets) ||(49.33) ||(1.47) |
|Profit/(Loss) for the period ||97.45 ||88.00 |
|Transfer to reserve ||97.45 ||46.18 |
The Company has adopted Indian Accounting Standard (referred to as Ind AS)with effect from 1 April 2017 and accordingly these financial results along with thecomparatives have been prepared in accordance with the recognition and measurementprinciples stated therein prescribed under Section 133 of the Companies Act 2013("Act") read with the relevant Rules framed thereunder and the other accountingprinciples generally accepted in India.
Your Company witnessed an overall 29.80 % fall in Sales during theFinancial Year 2017-18 with total sales of Rs. 20033.92 lacs as against Rs. 28539.35lacs during the previous financial year. The revenue from operation showed fall in revenueby Rs. 8508.11 Lacs.
During the year net profit increased by 10.71% with total Net profit of Rs. 97.45 lacsas against Rs. 88.02 lacs during the previous financial year. The Company is hopeful toachieve the desired results during coming financial years so that the cost of Finance canbe met and profit margin is increased.
Your company however looks forward to further strengthen its operations byconsistently focusing on embarking its profit for the coming years.
TRANSFER TO RESERVES
The Company has transferred Rs. 97.45 lacs from Profit and Loss Account to reservesduring the year under review.
CHANGE IN THE NATURE OF THE BUSINESS
There was no change in the nature of the business of the Company during the year underreview. There were no material changes and commitments affecting the financial position ofthe Company occurring between March 31 2018 and the date of this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on 31stMarch 2018 in Form MGT -9 in accordance with Section 92(3) of the Companies Act2013 read with Companies (Management and Administration) Rules 2014 are set out in Annexure-1 to this report.
SUBSIDIARY/ASSOCIATE/JOINT - VENTURE COMPANY
The Company does not have any subsidiary associate or joint - venture company. Furtherthere is no company which became or ceased to be its subsidiaries joint ventures orassociate companies during the year.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2017-18 the Company entered into transactions with relatedparties as defined under Section 2(76) of the Companies Act 2013 read with Companies(Specification of Definitions Details) Rules 2014 all of which were in the ordinarycourse of business and on arms length basis and in accordance with the provisions ofCompanies Act 2013 read with the Rules issued thereunder and Listing Regulations.
All transactions with related party were reviewed and approved by the Audit Committeeand are in accordance with the Policy on Related Party Transactions formulated inaccordance with the provisions of Companies Act 2013 read with Rules issued thereunderand the Listing Regulations.
Prior omnibus approvals are granted by the Audit Committee for related partytransactions which are of repetitive nature entered in the ordinary course of businessand are on arms length basis in accordance with the provisions of Companies Act2013 read with Rules issued thereunder and the Listing Regulations.
The details of the related party transactions as per Indian Accounting Standards (INDAS) - 24 are set out in Note 32 to Financial Statement of the Company.
The Form AOC -2 pursuant to Section 134 (3) (h) of the Companies Act 2013 readwith Rule 8(2) of the Companies (Accounts) Rules 2014 is set out in the Annexure -2 tothis report.
DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT 2013
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
ORDERS PASSED BY THE REGISTRARS OR COURTS OR TRIBUNALS
Company is in receipt of Order vide letter no L/SURV/OFL/AB/2017-18/SHELL/COMP/539691/1 dated August 10th 2017 Issued by Bombay Stock Exchange(BSE) directing Forensic Audit of the affairs of the Company.
There is no other significant and material order passed by the registrars or courts ortribunals impacting the going concern status and company's operation in future.
However the Securities and Exchange Board of India (SEBI) vide it letter no. SEBI/HO/ISD/OW/P/2017/18183 dated August 7th 2017 to Bombay Stock Exchange (BSE)have categorized the Company as Deemed Shell Company and has placed the listedsecurities in Stage VI of the Graded Surveillance Measures (GSM) with immediate effect.
Further the Company had received a letter from Bombay Stock Exchange wherein thesecurities of the Company are listed vide letter no L/SURV/OFL/KM/COMP/539691 dated August10th 2017 seeking clarification regarding the status of the Company w.r.tDeemed Shell Company and asking for certain documents along with auditorscertificate on the same.
BSE has appointed M/s PVRN & Co. Chartered Accountants appointed as ForensicAuditors of the Company.
Your Company is cooperating with Auditor and shall be able to get itself removed fromthe List of Deemed Shell Companies as documents along has already provided to ForensicAuditor for smooth Conduct of the Forensic Audit of the Company.
LOANS GUARANTEES OR INVESTMENTS
The company has given loan guarantee or made investment as prescribed under theprovisions of Section 186 of the Companies Act 2013 read with the Companies (Meeting ofBoard and its Powers) Rules 2014 during the period under review.
INTERNAL FINANCIAL CONTROLS
The Company has put in place adequate internal financial controls over financialreporting. These are reviewed periodically and made part of work instructions or processesin the Company. The Company continuously tries to automate these controls to increase itsreliability.
The Company has identified inherent reporting risks for each major element in financialstatements and put in place controls to mitigate the same. These risks and the mitigationcontrols are revisited periodically in the light of changes in business IT Systemsregulations and internal policies. Corporate Accounts function is involved in designinglarge process changes as well as validating changes to IT systems that have a bearing onthe books of account.
The Company periodically conducts physical verification of inventory fixed assets andcash on hand and matches them with the books of accounts. Explanations are sought for anyvariance noticed from the respective functional heads.
The Company in preparing its financial statements makes judgement and estimates basedon sound policies. The basis of such judgements and estimates are also approved by theAudit Committee of the Company in consultation with the Statutory Auditors of the Company.The management periodically compares the actual spends against the estimates and makesnecessary adjustments to the same based on changes noticed.
The Company gets its account audited every quarter by its Statutory Auditors as perrequirement of the SEBI (LODR) Regulations 2015 as amended from time to time.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
I. RETIREMENT BY ROTATION
Mr. Rajesh Goyal Director (DIN -01339614) is liable to retire by rotation at theensuing AGM pursuant to Section 152 and other applicable provisions if any of theCompanies Act 2013 read with the Companies (Appointment and Qualification of Directors)Rules 2014 (including any statutory modification(s) thereof for the time being in force)the Articles of Association of the Company and being eligible have offered himself forre-appointment. Appropriate matter for his re - appointment is being placed for theapproval of the shareholders of the Company at the ensuing AGM. The brief resume of theDirector and other related information has been detailed in the Notice convening the 23rdAGM of the Company. The Directors recommend his re - appointment as Director of theCompany.
In accordance with the provisions of Companies Act 2013 read with the Rules issuedthereunder and the Listing Regulations the Independent Directors of the Company shallhold office upto 29.03.2020 and are not liable to retire by rotation.
During the year under review Mr. Himanshu Garg (DIN:08055616) was appointed on theBoard as an Additional Director of the Company with effect from 18th January2018.
The Shareholders of the Company have confirmed the Appointment of Mr. Himanshu Garg(DIN:08055616) Director of the Company in their Extra Ordinary General Meeting held on14.08.2018 at Hotel Noormahal Noormahal X-ing Sector -32 Karnal 132001.
None of the Directors of the Company is disqualified under Section 164 of the CompaniesAct 2013.
During the year under review Mr. Rama Kant (DIN:00215998) Independent Director of theCompany resigned from the Board w.e.f. 21.10.2017 and Mr. Himesh Agrawal (DIN:07458923)Director of the Company resigned from the Board w.e.f. 31.01.2018.
AUDITORS AND AUDITORS REPORT
Statutory Auditor and Report
M/s Suri and Sudhir Chartered Accountants (Firm Registration No.: 000601N) New Delhiresigned as Statutory Auditors of the Company on 12.05.2018 due to pre-occupation due towhich Casual Vacancy has been created in the Company.
The Shareholders of the Company appointed M7s AD Gupta and Associates CharteredAccountants (Firm Registration No.: 018763N) at their Extra Ordinary General Meeting heldon 14.08.2018 as statutory auditors till the Conclusion of Ensuing Annual General Meetingof the Company. The Company has received a certificate from the appointee auditors to theeffect that their appointment if made would be in accordance with the provisions ofSection 141 of the Companies Act 2013.
There are no adverse qualifications in the report of the Auditor under review. Theobservation made in the Auditors' Report read with relevant notes thereon areself-explanatory and hence do not call for any further comments under Section 134 of theCompanies Act 2013 except in respect of the following points.
In respect of Point No. (7)(a) to the Annexure A to the Auditors report your boardexplained to the statutory auditors that the companys cash crunch therefore paymentof TDS VAT Service Tax and Dividend Distribution Tax is pending as on 31stMarch 2018 and will be paid shortly and the auditors satisfied.
In respect of Point No. (7)(b) to the Annexure A to the Auditors report your boardexplained to the statutory auditors that the companys cash crunch therefore paymentof Income Tax is pending as on 31st March 2018 and will be paid shortly and theauditors satisfied.
In terms of Section 204 of the Companies Act 2013 the Board of Directors at theirmeeting held on 5th September 2018 has appointed M7s Y.J. Basrar &Associates Company Secretaries (Certificate of Practice No - 3528) as the SecretarialAuditor of the Company to conduct an audit of the secretarial records for the financialyear 2018-19.
The Company has received consent from M/s Y.J. Basrar & Associates CompanySecretaries to act as auditor for conducting audit of the Secretarial records for thefinancial year ending 31st March 2019.
The Secretarial Audit Report for the financial year ended 31st March2018 is set out in Annexure 3 to this report. The Secretarial Audit Report does notcontain any qualification reservation or adverse remark.
None of the Auditors of the Company have reported any fraud as specified under thesecond proviso of Section 143 (12) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force).
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of Independence as prescribed under the provisions of theCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16 of Listing Regulations (including any statutory modification(s) orre-enactment(s) thereof for the time being in force).
NOMINATION AND REMUNERATION POLICY
The Company has formulated and adopted the Nomination and Remuneration Policy inaccordance with the provisions of Companies Act 2013 read with Rules issued thereunderand the Listing Regulations. The details of the Nomination and Remuneration Policy are setout in the Corporate Governance Report which forms part of this Report.
The Nomination and Remuneration Policy of the Company provides that the Nomination andRemuneration Committee shall formulate the criteria for appointment of Executive Non -Executive and Independent Directors on the Board of Directors of the Company and Personsin Senior Management of the Company their remuneration including determination ofqualifications positive attributes independence of Directors and other matters asprovided under Section 178 (3) of the Companies Act 2013 (including any statutorymodification(s) or re-enactment(s) thereof for the time being in force).
RISK MANAGEMENT POLICY
The Company has a well-defined process to ensure risks are identified and steps totreat them are put in right place at the right level in the management. The operatingmanagers are responsible for identifying and putting in place mitigation plan foroperational and process risks. Key Strategic and business risks are identified and managedby the senior leadership team in the organization.
The risks identified are updated along with the mitigation plans as part of the annualplanning cycle. The mitigation plans are then woven into the plans/ initiatives for eachfunction and are monitored accordingly. The senior leadership reviews the status of theinitiatives as part of business review meetings.
The Board of Directors has formulated a Whistle Blower Policy which is in thecompliance with the provisions of Section 177 (10) of the Companies Act 2013 andRegulation 22 of the Listing Regulations.
In line with the commitment of the Company to open communications the Policy providesprotection to the employees and business associates reporting unethical practices andirregularities and also encourages employees and business associates to report incidenceof fraud.
Any incidents that are reported are investigated and suitable actions is taken in linewith the whistle blower policy.
CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTIONS AND FOREIGNEXCHANGE EARNINGS AND OUTGO
Since the Company is engaged in the trading of steel and real estate business theCompany does not consume substantial energy. It is the policy of the management to keepabreast of technological developments in the field in which the Company is operating andto ensure that the Company uses the most suitable technology.
The information pertaining to conservation of energy research & developmenttechnology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of Companies (Accounts) Rules 2014 isgiven hereunder and forms part of the Board's Report.
(A) Conservation of Energy: Nil
(B) Technology Absorption Adoption and Innovation: Nil
(C) Foreign Exchange Earnings and Outgo: Nil
BOARD OF DIRECTORS PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act 2013 read with Rules issued underthereunder Regulation 17 (10) of the Listing Regulations and the circular issued by SEBIdated 05th January 2017 with respect to Guidance Note on Board Evaluation theevaluation of the Directors/ Board/ Committees was carried out for the financial year2017-18.
The details of the evaluation process are set out in the Corporate Governance Reportwhich forms part of this report.
HEALTH SAFETY AND ENVIRONMENTAL PROTECTION
Your Company has complied with all the applicable laws to the extent applicable.
Your Company had not issued shares with differential voting rights nor granted/issuedany employee stock option or sweat equity during the year under review.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place Sexual Harassment Policy in line with the requirement of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
The following is the summary of the complaints received and disposed - off during thefinancial year: 2017-18:
|No. of complaints received : ||NIL |
|No. of complaints disposed off : ||NIL |
In accordance with the Companies Act 2013 read and Rules made there under none of theemployee fall under the purview of the said provisions who is drawing remuneration inexcess of the limits as specified under the Act 2013.
LISTING AND CONFIRMATION OF FEE
The securities of your Company are listed on Bombay Stock Exchange. The Company haspaid the annual custody fee for the year 2017-18 to both the depositories namely NationalSecurities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL).
M/s Alankit Assignment Ltd having its office at 1E/13 Alankit House JhandewalanExtension New Delhi-110055 has worked as Registrar and Share Transfer Agent during theF.Y 2017-18 and the annual fees for the year 2017-18 has been duly paid to M/s AlankitAssignment Limited.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:
(a) In the preparation of the Annual Accounts for the financial year ended 31st March2018 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(b) Appropriate accounting policies have been selected and applied them consistentlyand made judgment and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company at the end of the financial year and ofthe profit of the Company for that financial year;
(c) Proper and sufficient care for the maintenance of adequate accounting records forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;
(d) The Annual Accounts on a 'going concern' basis; and
(e) Internal financial controls to be followed by the Company and that such internalfinance controls are adequate and were operating effectively.
"Internal financial controls" means the policies and procedures adopted bythe Company for ensuring the orderly and efficient conduct of its business includingadherence to Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information;
(f) Proper systems to ensure compliance with the provisions of all applicable laws andthat such system was adequate and operating effectively.
REPORTING OF FRAUDS BY AUDITORS
During the Year under review the Statutory Auditors have not reported under section143(12) of the Companies Act 2013 any instances of fraud committed against the Companyby its officers or employees the details of which need to be reported in the BoardsReport.
NUMBER OF MEETINGS OF THE BOARD
The details of the meetings of the Board of Directors and its Committees convenedduring the financial year 2017-18 are given in Corporate Governance report which forms apart of this report.
DISCLOSURES RELATED TO REMUNERATION OF DIRECTORS AND KMPs
The Company has not paid any remuneration to directors during the year. Remuneration ofCompany Secretary and Chief Financial Officer (KMP) is as per policy of the Company.
HUMAN RESOURCE DEVELOPMENT
Your Company's Human Resource Management focus continues to be in making available atalent pool for meeting challenges in the competitive market place which is increasinglybecoming tougher. Development plans have been drawn up for key managers to shoulder higherresponsibilities as well as to increase their job effectiveness. Your Company alwaysencourages young personnel with their ideas and views. Management is easily accessible tothe employees and their problems are attended to promptly. The employer - employeerelations remained cordial at all the plants of the Company and peaceful throughout theyear.
CORPORATE SOCIAL RESPONSIBILTY
The Provisions of Section 135 read with Schedule VII of the Companies Act 2013 w.r.tCorporate Social Responsibility is not applicable to the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis forms an integral part of this report in Annexure- 4 and gives details of the overall industry structure economic developmentsperformance and state of affairs of the Companys various businesses viz. the realestate and Steel trading internal controls and other material developments during thefinancial year 2017-18.
CORPORATE GOVERNANCE REPORT
In compliance with Regulation 34 of the Listing Regulations a separate Report onCorporate Governance along with a certificate from the Secretarial Auditors on itscompliance forms an integral part of this report Annexure -5
The company has shifted its registered office of the company during the year effectivefrom 09.03.2018 and new registered office of the company is as under:
1601 RG Trade Tower Plot No. B7
Netaji Subhash Place Pitampura New Delhi-110034
Your Directors wish to place on record their sincere thanks to investors clientsvendors regulatory authorities government authorities bankers and all other businessassociates for their continued co-operation and patronage and all the employees of theCompany for their excellent performance and teamwork.
By Order of the Board
For Real Growth Commercial Enterprises Limited
|Sd/- ||Sd/- |
|Rajesh Goyal ||Deepak Gupta |
|Director ||Whole Time Director |
|DIN - 01339614 ||DIN - 01890274 |
|Date - 05.09.2018 || |
|Place - New Delhi || |