BOARD'S REPORT Dear Shareholders, Your Directors have pleasure in presenting the 68th Annual Report of the Company for the financial year ended 31st March, 2015. THE STATE OF COMPANY'S AFFAIRS Total Revenue: The total income of the Company during the current financial year 2014-2015 was Rs. 2489.01 lacs (decline of 51.93%) as against the total income of Rs. 5178.59 lacs for the previous financial year 2013-2014. Total Expenditure: The total expenses of the Company decreased by 55.85% to Rs. 2446.18 lacs for the current financial year 2014-2015 from Rs. 5540.59 lacs for the previous financial year 2013-2014. Profits: The Profit before tax increased by 111.83% to Rs. 42.83 lacs for the current financial year 2014-2015 as compared to loss of Rs. 362 lacs for the previous financial year 2013-2014. The Net Profit of the Company during the current financial year 2014-2015 was Rs. 27.84 lacs as compared to Rs. 197.76 lacs for the previous financial year 2013-2014. During the year under review, there is no change in the nature of the business of the Company. THE YEAR GONE BY Indian Economy Post May, 2014 elections, the global outlook on Indian economy and business confidence improved significantly. Effective actions in speed and effectiveness of governance has kick started investments in certain sectors like coal, road and infrastructure. Falling global commodity prices including oil and fossil fuels have fortunately reduced the pressure on balance of payments. This coupled with better management of food supply chain and moderated minimum support prices has given headroom to Central Bank to moderate interest rate. Though, Reserve Bank of India has cautiously started moderating the rates, the benefits have not been passed to the users by the banks completely due to pressures on NPAs of the past lending. We expect this process to continue in the next fiscal. Benign inflation and larger disposable incomes have improved discretionary consumer spending as well as household savings. The GDP growth trajectory has shifted from the one witnessed in last five years. GDP growth estimates by experts like CSO, RBI, Crisil and other private organisations range from 6.8% to 7.4%.Political and legislative logjam remains a risk to major policy reforms like land and labour as well as GST. BUSINESS OVERVIEW The Company undertook a large mid-income residential development in the form of Casa Paradiso at Sanathnagar, Hyderabad. The project comprises of 2 BHK and 3 BHK air-conditioned apartments. The target profile of this project is the middle/upper middle income segment of the market. The project has been designed by Hafeez Contractor, one of the India's largest and most reputed architectural firms. RESERVES No amount is proposed to be transferred to reserves. DIVIDEND Due to accumulated losses, the Board of Directors did not recommend any dividend for the year under review. EXTRACT OF ANNUAL RETURN Pursuant to section 92(3) of the Companies Act, 2013 ('the Act') and rule 12(1) of the Companies (Management and Administration) Rules, 2014, extract of Annual Return is enclosed as Annexure 2. PARTICULARS OF LOANS GIVEN, GUARANTEES MADE AND SECURITIES PROVIDED As per the provisions of section 186 (11), Companies providing infrastructural facilities are exempted from providing details of Loans made, Guarantees given and Securities provided and therefore the Company being engaged in the business of providing infrastructural facilities, the details of Loans given, Guarantees made and Securities provided are not forming part of the Boards Report. PARTICULARS OF INVESTMENT MADE During the year under review, the Company has not made any investments. INFORMATION ON MATERIAL CHANGES AND COMMITMENTS There are no material changes or commitments affecting the financial position of the Company which has occurred between March 31, 2015 and August 12, 2015, being the date of this Report. RELATED PARTY TRANSACTIONS The Company has entered into contract / arrangements with the related parties in the ordinary course of business and on arm's length basis. Thus the provisions of Section 188(1) of the Companies Act, 2013 is not applicable. There are no material transactions entered with related parties during the year under review. Hence the relevant disclosure as required in Form AOC-2 is not applicable. VIGIL MECHANISM In line with the provisions of section 177 of the Companies Act, 2013, the Company has formed a Transparency and Ethics policy (TEP) to deal with instances of fraud and mismanagement, if any and to ensure a clean and transparent environment for conducting business. The TEP policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be shown towards any person for a genuinely raised concern. Any employee can report such incident of violation and context thereto to the Ombudsman or Director concerned in writing/by email/sms or by phone. Alternatively, the Ethics Helpline can be contacted to report any suspected or confirmed incident of fraud / misconduct. Further adequate safeguards against victimization of Director(s)/Employee(s) who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases. RISK MANAGEMENT POLICY Risk is regarded as the threat of some event, action or loss of opportunity if it occurs, will adversely affect the business i.e. value to stakeholders, ability to achieve its objective, ability to implement business strategies, manner of operation, reputation & Brand Image due to Internal and External factors. The Company has a Risk Management Policy, which lays down active process for identification and mitigation of risks. Risk Management Policy has been adopted by the Board of Directors of the Company. All concerned process owners of the Company are regularly identifying & mitigating key risks in their respective domain. The Board reviews the risk management and mitigation plan for key risks from time to time. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and verified by Internal Auditors. Appropriate actions are being taken by the responsible concerned. COMPANY'S POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION INCLUDING CRITERIA The Nomination and Remuneration Committee and the Board of Directors at its Meeting held on 9th May, 2014 had laid down criteria for determining director's qualification, positive attributes and independence of director's, remuneration of directors and key managerial personnel and also criteria for evaluation of performance of directors, chairperson, non-executive directors and Board as a whole and also the evaluation process of the same. Criteria for Performance Evaluation of Directors Performance of Executive Directors of the Company who are involved in day to day operations of the Company as per the policy is assessed on the basis of Key Performance Indicators (KPI), which would be identified based on a) their commitment to achieve Company's goals and alignment with the strategic direction, b) their decision making ability, and c) their ability and actions to safeguard the interest of shareholders of the Company and weights assigned for each measure of performance keeping in view the distinct roles of each Executive Director. Performance of Non-Executive and Independent Directors of the Company who are not involved in day to day operations of the Company is assessed on the basis of: a) individual's continuing commitment to the role, strategic thinking, b) commitment of time for Board the other Committee meetings, c) individual's continuing commitment to spend time and effort learning about the Company and its business. As per Section 149 of the Companies Act, 2013, a Company shall have at least One Women Director on the Board of the Company. The Company has Ms. Purnima Pavle as Director on the Board since 8th August, 2014. The Nomination and Remuneration Committee of the Board had prepared and sent, through its Chairman, feedback forms for evaluation of the Board as a whole, Committees of the Board, Independent Directors and individual Director including the Chairman. The Independent Directors at their Meeting considered and evaluated the Board's performance, performance of the Chairman and other Non-independent Directors. The Board subsequently evaluated performance of the Board as a whole, the Committees and Independent Directors; without participation of the concerned Director. The Company has devised a Policy for which includes criteria for performance evaluation of the non-executive directors and executive directors. The policy on Directors appointment and remuneration for Directors, Key Managerial Personnel, Senior Management Personnel including policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors is attached as Annexure 3. DECLARATION GIVEN BY INDEPENDENT DIRECTORS The Company has received and taken on record declarations received from all the Independent Directors of the Company in accordance to Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-vis the Company. REPORTING WITH RESPECT TO COMPLAINTS RELATING TO SEXUAL HARASSMENT The Company has not received any complaint of sexual harassment in terms of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the year under review. The Company has formulated the policy for the prevention of sexual harassment. All employees of the Company are covered under the same. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS There are no significant and material orders passed by the regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future. INTERNAL FINANCIAL CONTROLS The internal financial controls with reference to the Financial Statements are commensurate with the size and nature of its business. During the year under review, no material or serious observation were noted by the Internal Auditor of the Company for inefficiency or inadequacy of such controls. HOLDING AND SUBSIDIARY COMPANY The Company continues to be a subsidiary of Siddhnath Residential Paradise Private Limited. During the year, under review, the Company did not have any subsidiary, joint ventures or associate companies. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Babusingh Rajguru, Ms. Purnima Pavle, Mr. Deependra Gupta and Mr. Sagar Gawde constituted the Board of Directors of the Company during the year under review. Further Ms. Purnima Pavle was appointed as CFO of the Company w.e.f. 08 August, 2014 and Mr. Pankajkumar Jain ceased to be the Director of the Company w.e.f. 30th September, 2014. Mr. Himanshu Mumbaiwala was appointed as Company Secretary (CS) of the Company w.e.f. 09 May, 2014 and ceased to be the CS w.e.f. 18 November, 2014. Mr. Sharatkumar Shetty was appointed as Company Secretary of the Company w.e.f. 31 March, 2015. Mr. Babusingh Rajguru (DIN: 02696937) retires by rotation at this Annual General Meeting and being eligible, offers himself for re-appointment. DISCLOSURE UNDER SECTION 197(12) OF THE COMPANIES ACT, 2013 AND OTHER DISCLOSURES AS PER RULE 5 OF COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014: The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year under review along with other disclosures as per Rule 5 of Companies (Appointment & Remuneration) Rules, 2014 have been enclosed as Annexure 4. AUDITORS AND THEIR REPORT Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder, M/s Shanker and Kapani (Firm Registration No. 117761W), Chartered Accountants, were appointed as Statutory Auditors of the Company from the conclusion of the Annual General Meeting (AGM) of the Company held on 30th September, 2014 till the conclusion of the AGM to be held in the year 2019, subject to ratification of their appointment at every AGM. The Company has received a Certificate from M/s Shanker and Kapani (Firm Registration No. 117761W), Chartered Accountant, confirming their eligibility under Section 141 of the Companies Act, 2013. Accordingly, the appointment of M/s Shanker and Kapani, Chartered Accountants as the Statutory Auditors is placed for ratification by the shareholders at the ensuing Annual General Meeting. The report of the Auditors are self explanatory and do not call for any comments. SECRETARIAL AUDIT In terms of Section 204 of the Companies Act, 2013 and Rules made there under, Ms. Jinal Dawda (Membership Number: 20255, Certificate of Practice Number: 9830), Practicing Company Secretary had been appointed to conduct the Secretarial Audit of the Company. The report of the Secretarial Auditor does not contain any qualification, reservation or adverse remarks. The report of the Secretarial Auditors is enclosed as Annexure 5 to this report. DEPOSITS During the financial year under review, your Company has not accepted any deposits or deposits from member pursuant to provisions of Companies Act, 2013 and rules made there under and as such no amount on account of principal or interest on public deposits was outstanding, as on the Balance sheet date. CORPORATE GOVERNANCE REPORT As per clause 1(a) of SEBI Circular CIR/CFD/POLICY CELL/7/2014 dated 15th September, 2014, compliance of the provisions of the Clause 49 of the Listing Agreement shall not be mandatory to a Company having its paid up equity share capital not exceeding Rs. 10 crores and Net Worth not exceeding Rs. 25 crores as on last day of the previous financial year. Since the paid up Equity Share capital and Networth of the Company was not exceeding Rs. 10 crores and Rs. 25 crores respectively, the Company was not required to comply with the requirement of Clause 49 of the Listing Agreement post October 01, 2014 and hence a report on Corporate Governance and Management Discussion Analysis does not form part of this Board's Report. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirement clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, your Directors confirm that: (a) in the preparation of the annual accounts for the year ended March 31, 2015, read with the requirements set out under Schedule III to the Act, have been followed and there has been no material departures; (b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates 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 financial year and of the profit of the Company for that period; (c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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; (e) the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. ACKNOWLEDGEMENT Your Directors place on record their appreciation for employees at all levels, who have contributed to the growth and performance of your Company. Your Directors also thank the clients, vendors, bankers, shareholders and advisers of the Company for their continued support. Your Directors also thank the Central and State Governments, and other statutory authorities for their continued support. For and on behalf of the Board of Directors Sanathnagar Enterprises Limited Sd/- Purnima Pavle Director (DIN: 06705133) Sd/- Babusingh Rajguru Director (DIN: 02696937) Place: Mumbai Date: August 12,2015 |