Your Directors have pleasure in presenting the Twenty-Fifth Annual Report on thebusiness and operations of the Company together with the Audited Financial Accounts forthe year ended 31st March 2019.
The financial highlights of the current year in comparison to the previous year are asunder.
|A) STANDALONE: || ||(Rs. In Lakhs) |
|PARTICULARS ||2018-2019 ||2017-2018 |
|Total Revenue ||3424.08 ||4749.82 |
|Less: Operating Expenses ||5606.86 ||5481.77 |
|Gross Profit/(Loss) before Depreciation and Interest ||(2182.78) ||(731.95) |
|Less: Finance Costs ||454.71 ||365.49 |
|Depreciation and Amortization Expense ||4.50 ||17.62 |
|Profit/(Loss) before Tax Before exceptional and extra-ordinary items ||(2641.99) ||(1115.06) |
|Exceptional and Extra-ordinary Item ||0.00 ||0.00 |
|Profit/(Loss) before Tax after exceptional and extra-ordinary items ||(2641.99) ||(1115.06) |
|Less: Tax Expense (Net) ||(601.87) ||(278.67) |
|Profit/(Loss) After Tax ||(2040.11) ||(836.39) |
|Balance of Profit brought forward ||2625.89 ||3462.28 |
|Adjustment as per Ind AS 115 ||(816.95) ||0.00 |
|Profit available for appropriation ||(231.17) ||2625.89 |
|APPROPRIATIONS || || |
|Proposed Dividend ||- ||- |
|Tax on proposed dividend ||- ||- |
|Transfer to General Reserve ||- ||- |
|Balance carried to Balance Sheet ||(231.17) ||2625.89 |
| || ||(Rs. In Lakhs) |
|PARTICULARS ||2018-2019 ||2017-2018 |
|Total Revenue ||3529.35 ||5037.91 |
|Less: Operating Expenses ||5810.42 ||5819.06 |
|Gross Profit/(Loss) before Depreciation and Interest ||(2281.07) ||(781.15) |
|Less: Finance Costs ||505.17 ||429.98 |
|Depreciation and Amortisation Expense ||11.81 ||34.52 |
|Profit/(Loss) before Tax Before exceptional and extra-ordinary items ||(2798.05) ||(1245.65) |
|Exceptional and Extra-ordinary Item ||0.00 ||0.00 |
|Profit/(Loss) before Tax after exceptional and extra-ordinary items ||(2798.05) ||(1245.65) |
|Less: Tax Expense (Net) ||(601.87) ||(278.67) |
|Profit/(Loss) After Tax ||(2196.18) ||(966.98) |
STATE OF THE COMPANY'S AFFAIRS
The total revenue of your Company for the year under review is Rs. 3424.08 lakhs ascompared to Rs. 4749.82 lakhs for the previous year ended 31st March 2018. Profit/(Loss)after tax is Rs. (2040.11) lakhs as against Rs. (836.39) lakhs in the previous year.
The projects undertaken by the Company are under different stages of execution and theperformance of the Company during the current year i.e. 2019-20 is expected to be inaccordance with Company's plans.
PROPERTY DEVELOPMENT PROJECTS
Alpha City Project
The construction of 477000 sq. ft. IT Park has been completed in 2007 and softwaremajors like IBM were Tenants in this building. Company is yet to receive 20.20 crores fromAlpha City IT park. As the IT market pickup and expected revival in occupancy is seen weare hopeful to recover the amount during this financial year.
The construction of this 143000 sq. ft. IT Park is completed and the building hasbeen sold. During the year under review the registration is completed in the name of thebuyer.
Godrej SSPDL Azure Project is a residential apartments project situated at PadurKazhipattur Village in Old Mahabalipuram Road (IT Highway) Kancheepuram District.
Project is executed through M/s. Godrej SSPDL Green Acres LLP ("LLP"). M/s.SSPDL Limited Land owners and M/s. Godrej Properties Limited have entered into apartnership to develop the above said residential project on profit sharing model on27.03.2014.
After getting the final approval project is launched in July 2015. Total project areais 1044156 sq. ft. sold area till date 345218 sq. ft. and unsold area till date is698938 sq. ft.
Markets in Chennai slowed down substantially and not improved due to which executionof the project not progressed as estimated by the management.
SSPDL Lakewood Enclave
A Residential Villa (Lakewood) / Apartment (Mayfair) project on a 3.89 Acre plot ofland situated at Thalambur Village of Old Mahabalipuram (IT Express Highway) Chennai.The apartment project is completed and handed over.
Residential Villa project consists of 32 Villas. Layout sanction and planningpermissions are received. Buildings have been pre-certified GOLD by Indian Green BuildingCouncil (IGBS). We have already sold 13 Villas from our share of 18 villas in Lakewood.Construction of Villas is in progress and has unsold area of 11982 sq. ft. Markets inChennai slowed down substantially and not improved due to which execution of the projectnot progressed as estimated by the management.
The Retreat Hyderabad (BHEL Employees Cyber Colony) The Company has entered into aletter of Intent with one of the employees union of BHEL for developing 1155 homes inabout 90+ acres. We have entered into MOU with BHEL Employees Model Mutually AidedCo-operative House Building Society Ltd on 5th September 2012 for the total sale value ofRs. 317 Crores.
On our application with HMDA Company got the sanction for construction of 1265 homesand apartments under EWS and LIG scheme to the extent of 1.25 lakhs sq. feet besidescommercial and common amenities. We also received sanctions from the Village Panchayats ofKollur and Osman Nagar Villages.
Against the above Company finally concluded sale of 1155 plots to BHEL Employees ModelMutually Aided Co-operative House Building Society Ltd at a sale consideration of Rs.139.47 crores. And the Company entered into construction agreement with BHEL EmployeesModel Mutually Aided Co-operative House Building Society Ltd for construction of 1155homes for a consideration of Rs. 12.95 lakhs per house (cost is subject to escalation)excluding the taxes.
The construction work is done by six contractors. CB Richard Ellis (CBRE) has beenappointed as the Project Management Consultant for overseeing the project execution. 97%of the construction work is completed with regard to 1155 homes and delivery of the houseshas commenced. Expected to complete the balance construction and deliver the possession inDecember 2019.
Company has since sold 100% of the balance 110 homes. Expected to complete the balanceconstruction and deliver the possession in December 2019.
LIG 100% sold and 70% construction work completed and expected to deliver thepossession by March 2020.
EWS 40% booked and 50% construction work completed and expected to deliver thepossession by March 2020.
The project is not progressed as expected because of the delay in recovery fromclients. And due to uncertainty in the rate of GST for residential apartments the salesof EWS and LIG apartments impacted. Even the current financial crunch on account ofNBFCs the bank lending to home buyers was impacted and which in turn have impacted thesales. Only after the reduction of GST rate from the month of April/May sales have takenup.
SSPDL Ltd and Indiareit Fund Advisors Pvt. Ltd. through their SPVs have acquired 42acres in Gundla Pochampally village Hyderabad to develop a gated residential villacommunity "SSPDL Northwoods". Land conversion process is completed.
Since the micro market is not supporting for villa development doing a layoutdevelopment for selling the developed plots. The final layout approval is received fromthe HMDA. Plots bookings to the extent of 100% of the project have been taken. The unsoldcommercial area is about 900 sq. yds. out of 5154.30 sq. yds. The sale is expected to becompleted by December 2019.
Development of Residential Apartments Chennai:
Company signed a Joint Development Agreement for the development of premium residentialapartments in Prithvi Avenue Chennai. The total area of development is about 14500 sq.ft. wherein SSPDL's share is 25%. Building approvals have been received and work is inprogress. This project is expected to be completed in about 12 months.
The Chennai markets have crashed on account of high rate of GST and there have been notakers for high end city properties. Due to which SSPDL's share in the project has beensold at Rs. 6.00 crores and which is at break-even.
KERALA The Retreat
The Company has acquired about 300 acres through itself and its subsidiaries aCardamom plantation land at Kallar Valley Idukki District Kerala. The Company isplanning to use the SPV's for operating a) Villa Development b) Jungle Resort Developmentand c) Jungle and Plantation Development.
Plots have been demarcated for sale. Preliminary work with regard to roads has beencompleted. After receiving the necessary approvals from the authorities plots will beregistered in favour of the buyers. Applications are submitted for obtaining thepermission for construction of villas.
The Kerala budget had announced and recently Government has relaxed the conditions forhousing and resorts. However after the recent publication of Kasturi Rangan Committeereport there has been lot of confusion on the development of the project in the IddukkiDistrict. The Kerala Government has appealed to Government of India Ministry ofEnvironment to have a relook at the report. Unless that is settled we do not see any scopeof commencing the project.
Keeping the regulations in mind for construction in hill area management is evaluatingvarious options including doing a housing project and resort/hotel project on about 20acres of land.
Members are aware that Company has incorporated a Subsidiary Company i.e. SSPDLInfratech Private Limited ("SIPL") for carrying on the Construction Business.
During the year under review no contract has been taken in SIPL.
Your Directors do not recommend any dividend for the Financial Year ended March312019.
THE AMOUNTS PROPOSED TO CARRY TO ANY RESERVES
The Company does not propose to transfer any amount to the general reserve for thefinancial year ended March 31 2019. COMMITTEES OF THE BOARD
Pursuant to requirement under the Companies Act 2013 and the Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard of Directors has constituted Committees of the Board i.e. Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee and CorporateSocial Responsibility Committee.
Audit Committee: As on the date of this report the Audit Committee comprises Sri B.Lokanath (Chairman) Sri E. Bhaskar Rao (Member) Dr. T. Krishna Reddy (Member) and SriK.Akmaluddin Sheriff (Member). The Audit Committee was re-constituted on 09.05.2018 byinducting Sri K.Akmaluddin Sheriff as its member. During the period under review therewere no instances of non-acceptance of recommendations put forth by the Audit Committee tothe Board.
The details of composition number and dates of meetings held during the year underreview attendance of members and other details of the Board and above mentionedCommittees are provided in the Corporate Governance Report which is enclosed to thisreport. The details of the Corporate Social Responsibility Committee are also provided inAnnexure - 3 to this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) APPOINTMENT OR RESIGNATION
During the year under review in the Annual General Meeting (AGM) held on 29.09.2018Sri E.Bhaskar Rao (DIN 00003608) was reappointed as Director.
The Key Managerial Personnel of the Company: (i) Sri Prakash Challa Chairman andManaging Director (ii) Sri U.S.S. Ramanjaneyulu N. Chief Financial Officer and (iii)Sri A.Shailendra Babu Company Secretary. And during the year there was no change in theKMPs of the Company.
Section 152 of the Companies Act 2013 states that one-third of the board membersother than independent directors who are subject to retire by rotation shall do so everyyear and be eligible for re-appointment if approved by the shareholders. AccordinglySmt. Sridevi Challa (DIN: 01802477) retires by rotation at the ensuing AGM and beingeligible seeks reappointment.
Section 149(10) of the Companies Act 2013 provides that an independent director shallhold office up to five consecutive years on the board of a company and shall be eligiblefor re-appointment on passing of a special resolution by the shareholders.
Sri K.Akmaluddin Sheriff and Sri B.Lokanath Independent Directors were appointed asIndependent Directors by the shareholders in 20th annual general meeting held on30.09.2014 for a period of five years from 30th September 2014 up to 29th September2019. The tenure of Sri K.Akmaluddin Sheriff (DIN: 01121372) and Sri B.Lokanath (DIN:00037303) independent directors end at the conclusion of the ensuing AGM of the Company.Sri K.Akmaluddin Sheriff does not seek re-appointment hence he completes his term as anindependent director at the conclusion of the 25th AGM. The Board places onrecord its appreciation for the contribution of Sri K.Akmaluddin Sheriff during histenure.
Sri B.Lokanath is the member and Chairman of the Audit Committee StakeholdersRelationship Committee and Nomination and Remuneration Committee of the Company.Considering his experience and contributions it is proposed to re-appoint him
Sri Annam Dilip Kumar is an entrepreneur and considering his business experience it isproposed to appoint him as an independent director of the Company.
The Company has received necessary declarations under Section 149(7) of the CompaniesAct 2013 from the Independent Directors stating that they meet the prescribed criteriafor independence. The Board of Directors after undertaking assessment and on evaluationof the disclosures considered the appointment and re-appointment of independentdirectors.
Sri Prakash Challa was re-appointed as the Managing Director of the Company for aperiod of five years from 01.10.2014 to 30.09.2019 and he was designated as the Chairmanand Managing Director by passing a special resolution through Postal Ballot notice dated02.08.2014. As the term of appointment is ending on 30.09.2019 with the recommendation ofthe Nomination and Remuneration Committee the Board of Directors subject to approval ofthe members approved the re-appointment of Sri Prakash Challa as the Chairman andManaging Director and remuneration payable to him.
In pursuance of applicable provisions of the Companies Act2013 rules made there underand SEBI (LODR) Rules 2015 considering the recommendations of the Nomination andRemuneration Committee and the evaluation of their performance carried out by the Boardsubject to approval of the members your directors approved and recommend to the members(i) the re-appointment of Smt. Sridevi Challa as Director (ii) re-appointment of Sri SriB.Lokanath as independent directors under Section 149 of Companies Act 2013 for a term offive years (iii) appointment of Sri Annam Dilip Kumar as an independent director and(iv) re-appointment of Sri Prakash Challa as Chairman and Managing Director of the Companyand fixing the remuneration at the ensuing Annual General Meeting as mentiomed in Noticeof 25th AGM. The disclosures required pursuant to Secretarial Standard Companies Act2013 Regulation 36 and Schedule V of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are given respectively in the annexures to the Notice ofthe 25th AGM and in the Corporate Governance Report.
NUMBER OF MEETINGS OF THE BOARD
During the year 5 (five) meetings of the Board of Directors were held on 09.05.201830.05.2018 14.08.2018 13.11.2018 and 12.02.2019. The details of the meetings andattendance of directors are furnished in the Corporate Governance Report which is enclosedto this report.
STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OFSECTION 149
The Board hereby confirms that all the Independent Directors of your Company havegiven a declaration that they meet the criteria of Independence as provided in Section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015. Further the Independent Directorsconfirmed that the respective Independent Director is not aware of any circumstance orsituation which exist or may be reasonably anticipated that could impair or impact theirability to discharge their duties with an objective independent judgment and without anyexternal influence.
In pursuance of Regulation 25(9) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board of directors took on record of the declarationsand confirmations submitted by the independent directors under Regulation 25(8) afterundertaking due assessment of the veracity of the same.
AWARDS AND RECOGNITIONS
During the year under review the project 'SSPDL BHEL Employees Cyber Colony'Hyderabad has been awarded (i) "PMAY- Empowering India Awards 2019" i.e. aCertificate of Merit in appreciation for the accomplishments and contribution forAffordable Housing Development Under PMAY (Urban) (ii) "REAL ESTATE AWARD forAFFORDABLE HOUSING PROJECT (SOUTH)" presented by ET NOW and (iii) Indian GreenBuilding Council ('IGBC') issued 'SILVER' rating.
Also Indian Green Building Council issued 'Platinum' rating to 'Mayfair / LakewoodEnclave' Chennai project.
SHARES PLEDGED BY THE PROMOTERS/DIRECTORS
The number of shares pledged by promoter and directors of the company: NIL.
The properties and insurable interest of the Company wherever considered necessary andto the extent required have been adequately insured.
Names of companies which have become or ceased to be its subsidiaries joint venturesor associate companies during the year:
During the year under review no new company become or ceased as Subsidiary JointVenture or Associate of the company.
Report on highlights of performance financial position of each of the subsidiariesassociates and joint venture companies and their contribution to the overall performanceof the company during the period under report:
SSPDL Resorts Pvt. Ltd. a wholly owned subsidiary of the Company recorded totalrevenue of Rs. 0.55 lakhs and loss after tax of Rs. 14.66 lakhs for the year ended 31stMarch 2019 as compared to total revenue of Rs. 11.92 lakhs and loss after tax of Rs.11.46 lakhs in the previous year.
SSPDL Realty India Pvt. Ltd. a wholly owned subsidiary of the Company recorded totalrevenue of Rs. NIL lakhs and loss after tax of Rs. 66.66 lakhs for the year ended 31stMarch 2019 as compared to total revenue of Rs. 68.34 lakhs and loss after tax of Rs.28.50 lakhs in the previous year.
SSPDL Real Estates India Pvt. Ltd. a wholly owned subsidiary of the Company recordedtotal revenue of Rs. 52.79 lakhs and loss after tax of Rs. 89.62 lakhs for the year ended31st March 2019 as compared to total revenue of Rs. 94.44 lakhs and loss after tax of Rs.68.27 lakhs in the previous year.
SSPDL Infra Projects India Pvt. Ltd. a wholly owned subsidiary of the Companyrecorded total revenue of Rs. NIL lakhs and loss after tax of Rs. 33.09 lakhs for the yearended 31st March 2019 as compared to total revenue of Rs. 36.64 lakhs and loss after taxof Rs. 24.75 lakhs in the previous year.
SSPDL Infratech Pvt. Ltd. a wholly owned subsidiary of the Company recorded totalrevenue of Rs. 51.93 lakhs and profit after tax of Rs. 36.00 lakhs for the year ended 31stMarch 2019 as compared to total revenue of Rs. 80.68 lakhs and profit after tax of Rs.1.99 lakhs in the previous year.
Northwood Properties India Pvt. Ltd. an associate of the Company recorded totalrevenue of Rs. 163.61 lakhs and loss after tax of Rs. 34.64 lakhs for the year ended 31stMarch 2019 as compared to total revenue of Rs. 2116.41 and loss after tax of Rs. 387.02in the previous year. As on 31.03.2019 Paid-up Share Capital is Rs. 27.00 lakhs TotalLiabilities is Rs. 1651.54 lakhs and Total Assets are Rs. 1651.54 lakhs.
Company is not having joint ventures hence no information is provided. Financialposition of each of the subsidiaries companies are provided in Form AOC-1 attached to theconsolidated financial statements.
The above stated wholly owned subsidiaries in aggregate contributed a loss after taxof Rs. 168.03 lakhs to the consolidated profit of the Company. And Northwood PropertiesIndia Pvt. Ltd. an associate of the Company contributed a profit/(loss) after tax of Rs.NIL lakhs for the year ended 31st March 2019.
Statement containing salient features of financial statements of subsidiaries:
In pursuance of provisions of section 129(3) of the Companies Act 2013 and Rule 5 ofthe Companies (Accounts) Rules 2014 a Statement containing salient features of financialstatements of subsidiaries in the prescribed format - Form AOC-1 is attached to theconsolidated financial statement.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statement presented by the Company are prepared inaccordance with the Indian Accounting Standards (Ind AS) the Companies (Indian AccountingStandards) Rules 2015 notified under Section 133 of the Companies Act 2013 and otherrelevant provisions of the Companies Act 2013 Listing Regulations.
In pursuance of provisions of section 129(3) of the Companies Act 2013 theconsolidated financial statement are enclosed for laying before the annual general meetingof the company along with the laying with the financial statement of the Company.
Upon a request is received the annual accounts of the subsidiary companies will bemade available to shareholders of the company. The annual accounts of the subsidiarycompanies shall also be kept for inspection during business hours by any shareholder inthe registered office of the company and same will be kept on the company's website i.e.www.sspdl.com.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) a separate report onManagement Discussion and Analysis is enclosed as an ANNEXURE - 5 to the Director'sReport.
CORPORATE GOVERNANCE REPORT
A separate section on Corporate Governance is enclosed which forms part of the annualreport. The Auditor's Certificate regarding compliance of conditions of corporategovernance is enclosed as an ANNEXURE - 6 annexed with the directors' report.
During the year under review your Company has neither accepted nor renewed anydeposits from the public within the meaning of Section 73 of the Companies Act 2013 andthe Companies (Acceptance of Deposits) Rules 2014.
The details of money accepted and received from directors of the company have beendisclosed in the financial statements.
During the year under review your Company has not issued (i) equity shares withdifferential voting rights (ii) sweat equity shares (iii) employee stock options and(iv) not made any provision of money for purchase of its own shares by employees or bytrustees for the benefit of employees.
WHISTLE BLOWER POLICY
In pursuance of provisions of the Companies Act 2013 and the Listing RegulationsCompany has formulated Whistle Blower Policy (Vigil Mechanism) with a view to provide amechanism for (i) directors and employees of the Company to freely communicate/reportgenuine concerns or/and grievances about illegal or unethical practices unethicalbehavior actual or suspected fraud or violation of the Company's code of conduct orethics policy and (ii) the stakeholders of the company to freely communicate theirconcerns about illegal or unethical practices and to approach the WhistleOfficer/Chairman of the Audit Committee of the Company to inter-alia report the same tothe management. This Policy is an extension of the Company's Code of Conduct.
The Audit Committee oversee the vigil mechanism through the committee. This Policyinter-alia provides a direct access to the Chairman of the Audit Committee.
The Whistle Officer/Chairman of the Audit Committee shall submit a report to the AuditCommittee on a regular basis about all the complaints referred to him/her since the lastreport together with the results of investigations if any.
The Whistle Blower Policy may be accessed on the Company's website at the link: viz.www.sspdl.com/investors/policy/
EXTRACT OF ANNUAL RETURN
As provided under Section 92(3) of the Companies Act 2013 an extract of Annual Returnin Form MGT-9 as on March 31 2019 is attached as ANNEXURE - 1 to this Report.
The annual return of the Company is placed on the company's website at the linkwww.sspdl.com/investors/php
THE DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS.
The company has placed system of internal financial controls with reference to thefinancial statements. In our view these internal financial controls are adequate and areoperating effectively.
In pursuance of the applicable provisions of the Companies Act 2013 read withprovisions of the Companies (Audit and Auditors) Rules 2014 M/s. A.Madhusudana &Co. Chartered Accountants (ICAI Firm Registration No. 007405S) Hyderabad was appointedat the 23 rd Annual General Meeting (AGM) of the Company held on 28.09.2017 as theStatutory Auditors of the Company to hold office for a term of 5 (five) years from theconclusion of 23rd AGM until the conclusion of the 28th Annual General Meeting of theCompany to be held in the year 2022 (subject to ratification of their appointment by theMembers at every Annual General Meeting as may be applicable) at such remuneration plusapplicable taxes out of pocket expenses as may be incurred by them during the course ofthe Audit as may be mutually agreed between the Board of Directors of the Company and theAuditors.
The Members may note that consequent to the changes made in the Companies Act 2013 andthe Companies (Audit and Auditors) Rules 2014 by the Ministry of Corporate Affairs (MCA)vide notification dated May 7 2018 the proviso to Section 139(1) of the Companies Act2013 read with explanation to sub-rule 7 of Rule 3 of the Companies (Audit and Auditors)Rules 2014 the requirement of ratification of appointment of Auditors by the Members atevery AGM has been done away with. Therefore the Company is not seeking any ratificationof appointment of M/s. A.Madhusudana & Co. Chartered Accountants as the StatutoryAuditors of the Company by the Members at the ensuing AGM. However M/s. A.Madhusudana& Co. Chartered Accountants will continue as the auditors until the conclusion ofthe 28th Annual General Meeting of the Company to be held in the year 2022.
M/s. A.Madhusudana & Co. Chartered Accountants have given a written consent toact as Statutory Auditors of your Company and have also confirmed that the saidappointment would be in conformity with the provisions of sections 139 and 141 of theCompanies Act 2013 read with the Companies (Audit and Auditors) Rules 2014. They havealso confirmed that they hold a valid certificate issued by the Peer Review Board of theICAI as required under the provisions of Regulation 33 of the Listing Regulations.
The Auditors' Report to the shareholders does not contain any qualification or adverseremarks which require any clarification or explanation.
As required by the SEBI (LODR) Regulations 2015 the auditors' certificate oncorporate governance is enclosed to the Board's Report. The Auditors' certificate for theyear ended 31.03.2019 does not contain any qualification reservation or adverse remark.
COST RECORDS AND COST AUDIT
For the financial year 2018-19: (i) the maintenance of cost records as specified by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013 isrequired by the Company and accordingly such accounts and records are made and maintainedand (ii) as per the provisions of section 148 of the Companies Act 2013 and Rule 4 of theCompanies (Cost Records and Audit) Amendment Rules 2014 for the financial year 2018-19Cost audit is applicable to your Company.
For the financial year 2019-20: The provisions relating to maintenance of Cost Recordsas specified by the Central Government under Section 148 of the Companies Act 2013 is notapplicable to the Company for the financial year 2019-20. Also as per rule 4 of theCompanies (Cost Records and Audit) Rules 2014 cost audit is not applicable to yourcompany. Accordingly cost auditor is not appointed for the financial year 2019-20.
The Board of Directors of the Company appointed Neralla & Co. Cost AccountantsHyderabad as Internal Auditors to conduct Internal Audit of the Company for the FinancialYear ended March 31 2019.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read withcorresponding Rules framed there under the Board has appointed Smt. BanduvulaKrishnaveni Practicing Company Secretary Hyderabad as the Secretarial Auditors of theCompany to carry out the secretarial audit for the year ending 31st March 2019. ASecretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 is annexedwith this Report as ANNEXURE - 2.
EXPLANATION OR COMMENTS TO QUALIFICATION RESERVATION ADVERSE REMARK OR DISCLAIMERMADE IF ANY IN THE STATUTORY AUDITORS' REPORT AND THE SECRETARIAL AUDIT REPORT
The Statutory Auditors' Report and the Secretarial Audit Report to the members for theyear ended March 31 2019 does not contain any qualification reservation adverse remarkor disclaimer which require explanations or comments by the Board.
During the year there were no instances of frauds reported by auditors under section143(12) of the Companies Act 2013 to the Audit Committee.
DEMATERIALISATION OF SHARES:
Of the total shares 0.73% shares are held in physical form. Shareholders holdingshares in physical form are once again advised to dematerialize their shares to avoid therisk associated with the physical holding of share certificates and also for facilitatingeasy liquidity for shares.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company is committed to provide a protective environment at workplace for all itswomen employees. Also in terms of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules made there under Companyhas complied with constitution of Internal Complaints Committees to which employees canwrite their complaints and adopted a Policy on Prevention of Sexual Harassment of Women atWorkplace.
During the year ended 31 March 2019 there were no incidents of sexual harassmentreported in the Company i.e. Complaints pending at the beginning of the year: NILComplaints received during the year: NIL disposed of during the year: NIL pending at theend of the year: NIL.
DIRECTORS' RESPONSIBILITY STATEMENT
In accordance with the requirements of Section 134(3)(c) of the Companies Act 2013your directors hereby confirm that:
(a) in the preparation of the annual accounts for the financial year ended March 312019 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
(b) the Directors had 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 March 31 2019 and of the profitand loss of the company for the financial year ended March 31 2019;
(c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the Directors had prepared the annual accounts on a going concern basis; and
(e) the Directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
THE CHANGE IN THE NATURE OF BUSINESS
There is no change in the nature of business of the Company.
THE DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant and/or material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN THE FINANCIAL YEAR OF THE COMPANY AND DATE OF THIS REPORT
There are no material changes and commitments affecting the financial position of theCompany which have occurred between the financial year ended March 31 2019 of the Companyand the date of this Report.
CORPORATE SOCIAL RESPONSIBILITY
A Corporate Social Responsibility ("CSR") Committee has been constituted inaccordance with the provisions of Section 135 of the Companies Act 2013. The detailsrequired under the Companies Act 2013 and the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 are given in CSR Report appended as an ANNEXURE - 3 to this Report.The CSR Policy is available on the website of the Company athttp://sspdl.com/investors.php.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT2013
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013
All transactions entered by the Company with Related Parties were in the OrdinaryCourse of Business and at Arm's Length pricing basis. And during the year the Companyhad not entered into any contracts or arrangements or transactions with related partieswhich could be considered material in accordance with the policy on related partytransactions of the Company. Also there were no such transactions entered by the Companywhich were in conflict with the interest of the Company. Suitable disclosures as requiredby the applicable accounting standards have been made in the Notes to the financialstatements.
The Board had approved policies on Related Party Transactions and Material Subsidiary.Both the policies have been uploaded on the Company's website under the web link:http://sspdl.com/investors.php.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
In terms of Section 134(3)(m) of the Companies Act 2013 read with Rule 8(3) of theCompanies (Accounts) Rules 2014 the particulars of conservation of energy technologyabsorption foreign exchange earnings and outgo are provided below:
|(A) Conservation of energy- || |
|(i) the steps taken or impact of energy on conservation ||Even though the Company's activity is Real Estate Property Development and Civil Construction which are not power intensive the Company is making every effort to conserve the usage of power. |
|(ii) the steps taken by the company for utilising alternate sources of energy ||Not Applicable |
|(iii) the capital investment on energy conservation equipments ||nil |
|(B) Technology absorption- || |
|(i) the efforts made towards technology absorption ||nil |
|(ii) the benefits derived like product improvement cost reduction product development or import substitution ||nil |
|(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- ||No technology has been imported during the past 3 years. |
|(a) the details of technology imported ||nil |
|(b) the year of import; ||nil |
|(c) whether the technology been fully absorbed ||nil |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and ||nil |
|(iv) the expenditure incurred on Research and Development. ||nil |
(C) Foreign exchange earnings and Outgo-
|The Foreign Exchange earned in terms of actual inflows during the year and the Foreign Exchange outgo during the year in terms of actual outflows: || |
For the year ended
| ||31.03.2019 ||31.03.2018 |
|- Foreign Exchange Earnings ||nil ||nil |
|- Foreign exchange Outgo ||nil ||nil |
The Company has developed and implemented a risk management policy for the company. Inthe opinion of the Board there are no foreseeable risks which may threaten the existenceof the Company.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable provisions of Secretarial Standards issuedby the Institute of Company Secretaries of India.
NOMINATION AND REMUNERATION POLICY
The Nomination and Remuneration Policy containing (a) criteria for determiningqualifications positive attributes independence of a director etc. and (b) guidingprinciples for payment of remuneration to Directors Key Managerial Personnel and otheremployees is provided in the Corporate Governance Report.
ANNUAL EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The evaluation of Board Committee(s) and individual Directors was carried out based onstructured questionnaire encompassing parameters such as performing statutory dutieslevel of engagement and contribution independence of judgment etc. Further the detailson performance evaluation criteria are provided in the Corporate Governance Report.
MEETINGS OF INDEPENDENT DIRECTORS
The Company's Independent Directors meet at least once in every financial year withoutthe presence of non-independent directors and members of the management.
The independent director in their meeting (a) review the performance of non-independentdirectors and the Board as a whole (b) review the performance of the Chairperson of thecompany taking into account the views of executive directors and non-executive directorsand (c) assess the quality quantity and timeliness of flow of information between thecompany management and the Board that is necessary for the Board to effectively andreasonably perform their duties.
A meeting of the Independent Directors was held on 12th February 2019 and allindependent directors attended the meeting except Sri T. Krishna Reddy.
THE DISCLOSURE OF REMUNERATION DETAILS AND PARTICULARS OF EMPLOYEES
The disclosure pertaining to remuneration and other details as required under Section197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are provided in ANNEXURE - 4.
During the year under review no employee of your company drawn the remuneration inexcess of the prescribed limits as laid down in the rule 5(2) i.e. Employees who (i) wasemployed throughout the financial year and received remuneration in the aggregate notless than rupees one crore and two lakh (ii) employed for a part of the financial yearand received remuneration in the aggregate not less than rupees eight lakh and fiftythousand per month. Also during the year under review no employee of your company wasemployed throughout the financial year under review or part thereof and receivedremuneration which in the aggregate or as the case may be at a rate which in theaggregate is in excess of that drawn by the managing director and holds by himself oralong with his spouse and dependent children not less than two percent of the equityshares of the company.
Further a statement showing the names remuneration received and other particulars oftop ten employees as prescribed in Rules 5(2) and 5(3) of the aforesaid Rules forms partof this report. However in terms of first proviso to Section 136(1) of the Act theAnnual Report and Accounts are being sent to the members and others entitled theretoexcluding the aforesaid information. The said information is available for inspection bythe members at the Registered Office of the Company during business hours on working daysup to the date of the ensuing Annual General Meeting. Any member interested in obtainingsuch information may write to the Company Secretary and the same will be furnished onrequest. Further the details are also available on the Company's website: www.sspdl.com
Your Directors place on record their sincere appreciation to the ShareholdersInvestors Financial Institutions Banks Suppliers Government and Semi-Governmentagencies for their continued assistance and co-operation extended to the Company and alsowishes to place on record their appreciation of employees for their hard work dedicationand commitment.
For and on behalf of the Board of Directors of SSPDL LIMITED
| ||PRAKASH CHALLA ||E.BHASKAR RAO |
| ||chairman and ||DIRECTOR |
|Place : Hyderabad ||managing director ||(din 00003608) |
|Date : 14.08.2019 ||(din 02257638) || |