Your Director's take pleasure in presenting the 71st Annual Report together with theAudited Financial Statements for the year ended on 31st March 2019.
| ||(Rs. in Lakh) |
|Total Revenue ||7634 |
|Profit before Depreciation ||4544 |
|Depreciation ||55 |
|Profit after Depreciation before tax ||4489 |
|Exceptional Items ||(331) |
|Tax Expense (including earlier year) ||(827) |
|Other Comprehensive Income ||11 |
|Profit after tax ||3342 |
The Board of Directors have not recommended any dividend for the financial year underreview in the light of other impending fund requirement of the Company.
The Construction of Group Housing project namely 'TARA TOWERS' was completed in Feb'19and we have started execution of sale deed in favour of customers to hand over possessionof flats to them. Thus our commitment in respect of handing over of possession of flats tothe allottees of Tara Towers stands fulfilled well within the period committed by thecompany. We have also completed the EWS/ LIG Group Housing project and are waiting forfurther compliances as per the guidelines of the Govt. in this regard.
As already stated in our previous report the plans of next phase of Group Housingproject were finalised and sanctioned by the authorities during the year. We have namedthis project 'NAMAN HOMES'. The sanctioned plan comprises two towers of 13 storey eachhaving 207 Two BHK flats and 51 Three BHK flats. Naman homes will have basement parkinglarger carpet area and more amenities for each flat owner. The estimated period forcompletion of this project is about 48 months. The construction work on this project hasbegun and customer response towards the project 'Naman Homes' is good.
MANAGEMENT DISCUSSION AND ANALYSIS
A. Business Overview Industry Structure and Development
During the year under review the world economy continued to remain sluggish. It did notshow any sign of growth or positive mode. This affected our country too and resulted indecline of GDP The situation in our economy specially for the real estate sector is grimand was compounded by the loss of buyer's faith trust and liquidity issues. However thewelcoming feature is that the demand in residential housing sector of Class B cities hasremained constant because of the continued migration of public from villages to thecities. The management feels that the infrastructure facilities developed at 'ShervaniLegacy' together with high construction standards adopted by the company will yield goodresults.
The later part of year under review witnessed some changes in GST which gave realestate industry some relief. The implementation of Real Estate (Regulation andDevelopment) Act 2016 (RERA) effected the much awaited discipline in developers in termsof fund management and adherence to delivery period. The confidence of the buyers inmarket or sellers was restored and the signs of revival emerged.
The relaxation in banking regulations and interest rates has made a positive impact ondemand for flats by the middle-income group and the market for this sector is growing. Weexpect this trend to continue for some time because the middle income group is largest interms of quantity.
B. Outlook on Opportunities Threats Risks and Concern
As already explained the real estate industry is showing sign of recovery particularlyin B class cities. However the real estate industry is no exception to risks and threatsof business. Among them the major areas of risk before the real estate industry isrelated to supply of raw materials. This can sometimes stall projects and escalate costswherein both buyers and sellers have to suffer. Another factor of risk is macro economicfactors related to money supply bank loans and so on.
We at 'Shervani Legacy' have been cognizant to minimize the risks and concern of thebuyers. We are working hard to win the trust of buyers by hiring experienced professionalsfor guidance adopting high construction standards and maintaining our constructionschedule and commitments as far as possible. We are continuously working to employ themost efficient systems for procurement and tests of raw materials as well as to optimizethe operating efficiency of construction projects.
C. Subsidiary Company
M/s Farco Foods Pvt Limited the wholly owned subsidiary of your Company is engaged inmanufacturing of biscuits on job work basis for M/s Surya Foods and Agro Limited for their'Priya Gold' brand. During the year under review the Company produced 7005 MT of biscuitsand earned profit of Rs 50.54 lacs.
D. Internal Financial Controls
The Company has an adequate system of internal control to ensure compliance withpolicies and procedures commensurate with the size and scale of operations. The internalcontrols designed and adopted by the Company are in accordance with the guidelines issuedby the Institute of Chartered Accountants of India. The interest of Company and otherstake holders is well protected.
The internal audit work has been assigned to an independent firm of CharteredAccountant which evaluates the efficiency and adequacy of internal control systems. Theinternal audit reports and recommendations are reviewed by the Audit Committee of theBoard.
E. Development in Human Resource and Industrial Relations
The Company maintains a very cordial relationship with its employees. Theywhole-heartedly support the management in all its activities and endeavors.
F. Research and Development
In view of the nature of business activities of the Company there is little scope forresearch and development work. The company is making all efforts to reduce costs bymaintaining standards that benefit the consumers.
The Company is committed to maintain the highest standards of Corporate Governance andadheres to the Corporate Governance requirements set out by SEBI. The Company has compliedwith all mandatory requirements of Corporate Governance. A separate report on governancepractices followed by the Company in compliance of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 on Corporate Governance along with aCertificate of Compliance from the Statutory Auditors is attached with the said separatereport which forms integral part of this Director's Report.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act 2013 and Rule 12(1) of the Company(Management & Administration) Rules 2014 the extract of the Annual Return of theCompany in Form MGT-9 is annexed to this report as Annexure A and the same is alsoavailable on company's website www.shervaniind.com .
The calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year five Board Meetings were convened and details of same are given in the CorporateGovernance Report.
DIRECTOR'S RESPONSIBILITY STATEMENT Pursuant to the provisions of Section 134 (3) ofthe Companies Act 2013 the Directors state that;
(i) in the preparation of the Annual Accounts the applicable accounting standards havebeen followed;
(ii) the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at the end of the financial year andof the profit and loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care 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;
(iv) the Directors had prepared the Annual Accounts on a going concern basis:
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
BUY BACK OF EQUITY SHARES
In accordance with the provisions of section 68 69 and 70 of the Companies Act 2013read with the Companies (Share Capital and Debenture) Rules 2014 the Company applied forand has been granted approval by SEBI to Buyback 415000 no of fully paid up equityshares of face value of Rs 10 each at a price of Rs 500 each for aggregate value of Rs20.75 crores. Upon completion of said Buyback offer the Company has extinguished itscapital and the consequential results would become evident in the Annual Report for thenext financial year.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
A meeting of the independent Directors was held on 30th Jan 2019.
NOMINATION & REMUNERATION
The Board on the recommendation of the Nomination & Remuneration Committeeconsiders and approves the appointment of Directors senior management and decides upontheir remuneration. Key Management Personnel are appointed by the Board afterconsideration of their qualification and exposure to required fields. The details arestated in the Corporate Governance Report.
RELATED PARTY TRANSACTIONS
To provide transparency in management and ensure compliance with the provisions ofvarious laws the Audit Committee has provided guidelines to the Directors/Board. Theguidelines inter alia provide for identification manner of dealing conduct anddocumentation of such transactions as per the provisions of the Companies Act and otherapplicable rules and regulations.
There were no related party transactions between the Company and the Promoters KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of Company. All related party transactions that were entered in to during thefinancial year were in the ordinary course of business and are disclosed at Note No. 34attached to the standalone balance sheet. None of the Director's has any pecuniaryrelationship or transaction vis-a-vis the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
There is nothing to report about the conservation of energy and technology absorptionduring the year. The foreign exchange earning was nil and outgo was Rs. 6.88 lakh.
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to provisions of section 135 of the Companies Act 2013 a committee of Boardof Directors has been formed and the member of the Committee are:
|a. ||Mr. Mohammad Aslam Sayeed ||Chairman |
|b. ||Mr. Saleem Iqbal Shervani ||Member |
|c. ||Mr. Tahir Hasan ||Member |
During the year CSR committee meeting were held on 23rd April 2018 13th August 201814th November 2018 08th January 2019 30th January 2019 22nd February 2019 & 26thMarch 2019. As prescribed in section 135(5) of the Companies Act 2013 a budget of Rs 27lakh was allocated for purpose of CSR and a report on the activities during the currentyear is attached as Annexure-B to this Report.
The Board carries out annual evaluation of its own performance of the Directorsindividually as well of the working of its various Committees. The key areas forevaluation are the quality of deliberations and contribution towards performance andguidance to management. The Board of Directors expressed their satisfaction with theevaluation process.
The evaluation of all the Directors and the Board as a whole was conducted based on thecriteria and framework adopted by the Board and Nomination & Remuneration Committee.The Board approved the evaluation results as collated by the Nomination & RemunerationCommittee.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Brief resume of the Directors seeking re-appointment namely Dr. A.P. Singh (DIN :05354321) Mr. G.S. Chaturvedi (DIN : 00148434) Mr. M.A. Sayeed (DIN : 06652348) Mrs. S.Bansal (DIN : 07090579) along with other details as stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and in terms of Section 102(1)of the Companies Act 2013 are provided in the Notice for convening the Annual GeneralMeeting. Mr. T. Hasan (DIN : 00074282) is being re-appointed as Whole-time Director.
There are no changes among the Board of Directors and Key Managerial Personnel of theCompany during the year under review except for directors re-appointed by rotation.
Pursuant to provisions of section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company are Mr S I Shervani Managing Director Mr T Hasan Whole-timeDirector & Chief Financial Officer and Mr S. K. Shukla Company Secretary.
The Directors recommend all the resolutions placed before the Members relating toDirectors for their approval.
In terms of provisions of section 139 and 142 and other applicable provisions if anyof the Companies Act 2013 read with The Companies (Audit and Auditors) Rules 2014 theshareholders in the 69th Annual General Meeting held on 28.09.2017 have approved theappointment of M/s Gupta Vaish & Co. Chartered Accountants Kanpur (Firm RegistrationNo. 005087C) as Statutory Auditors of the Company for a period of 5 years from theconclusion of said Annual General Meeting. However their appointment as StatutoryAuditors of the Company shall be required to be ratified by the Members at the ensuingAnnual General Meeting. The Company has received a confirmation from the said Auditorsthat they are not disqualified to act as the Auditors and are eligible to hold the officeas Auditors of the Company. Necessary resolution for ratification of appointment of thesaid Auditors is included in the Notice of AGM for seeking approval of members.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Siddiqui & Associates Company Secretaries in Practice to undertake theSecretarial Audit of the Company. The Report of Secretarial Audit for the year 2018-19 isannexed herewith as Annexure- C and forms integral part of this Report.
Pursuant to the provisions of Section 139 142 and all other applicable provisions ifany of the Companies Act 2013 ("Act") and the Companies (Audit and Auditors)Rules 2014 (including any statutory modification(s) or re-enactment thereof for the timebeing in force) M/s Shishir Jaiswal & Co. Cost Accountants (Firm Registration No.102450) has been appointed as Cost Auditors and the company is maintaining cost records asper the provision of "Act".
The Board of Directors on the recommendation of the Audit Committee appointed M/s P L.Tandon & Co. Chartered Accountants to carry out the Internal Audit of the Company.
During the year under review the Company has not accepted or renewed any depositfalling within the ambit of Section 73 of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 hence no amount was outstanding as on the date ofBalance Sheet.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the section 129(3) of the Companies Act 2013 and the accountingstandard Ind AS-27 on consolidated financial statement(s) read with accounting standardInd AS-28 on accounting for investments in associates your Company has prepared theconsolidated financial statements and annexed to this report. A Statement in form AOC-1containing salient features of the financial statements of the subsidiary and associatecompanies are attached as Annexure-D.
The observations of the Statutory Auditors in their report are appropriately dealt within notes forming part of Financial Statement. No qualification or adverse remarks has beenmade by the Company Secretary in practice in his Secretarial Audit Report.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT & REMUNERATION ) RULES 2014.
None of the employee of the Company was in receipt of total remuneration of Rs. 60 lakhper annum or Rs. 5 lakh per month during the financial year under review.
Disclosure required under section 197 of the Companies Act 2013 read with Rule 5 ofthe Companies (Appointment & Remuneration) Rules 2014 have been annexed as AnnexureD.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place an anti sexual harassment policy in line with the requirementsof Sexual Harassment of Women at Work Place (Prevention Prohibition and Redressal) Act2013. Till date the company has not received any complaint thereunder.
Pursuant to provisions of section 124 (5) of the Companies Act 2013 the company hastransferred the unpaid or unclaimed dividends for the financial year up to 2010-11 fromtime to time on due dates to the Investor Education and Protection Fund (the IEPF)established by the Central Govt.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of loans guarantees and investments covered under the provisions ofsection 186 of the Companies Act 2013 are given in the notes to the financial statements.
The Company has an Audit Committee and details of constitution and terms of referenceare set out in the Corporate Governance Report.
Pursuant to the provisions of the section 177 of the Companies Act 2013 the Companyhas adopted Vigil Mechanism policy which also incorporates a whistle blower policy.Adequate safeguards are provided against victimization to those who avail the mechanismand access to the Chairman of the Audit Committee while reporting about unethicalpractices malpractice and non-compliance of policies.
LISTING WITH STOCK EXCHANGE
The Equity shares of the Company are listed on Bombay Stock Exchange Limited. Furtherdetails are set out in the Corporate Governance Report.
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud to Audit Committee asstipulated under second proviso of section 143(12) of the Companies Act 2013.
Industrial relations remained cordial during the period under review.
Your Directors wish to convey their deep sense of appreciation for the continuedsupport and co-operation extended by bankers Central and State Government and all otherstakeholders. The Directors also wish to place on record their sincere appreciation forthe commitment and enthusiasm of the employees for the Company.
For and on behalf of the Board
|Mohd. Aslam Sayeed ||Saleem I. Shervani |
|Director ||Managing Director |
|DIN :06652348 ||DIN : 00023909 |
|Place : Prayagraj || |
|Date : Aug 10 2019 || |