BOARDS’ REPORT TO THE MEMBERS Your Directors have pleasure in submitting their Ninetieth Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2016. STATE OF COMPANY’S AFFAIRS: Your Directors are pleased to state that three wings of the Company’s prestigious Residential project “Pittie Kourtyard” are nearing completion. The possession of the flats is expected to be handed over to the buyers shortly. Construction of the fourth wing will commence after obtaining necessary approvals of the concerned Authorities. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of the report. DIVIDEND & RESERVES During the year under review, in view of loss your Directors do not recommend any dividend for the Financial Year 2015-16 and also no amount was transferred to General Reserve. MANAGEMENT DISCUSSION AND ANALYSIS Your Company is one of the leading real estate Company in Pune. In the short span of its Real Estate development activities, the Company has earned a reputation for quality construction of high-end projects. i. Industry Structure, Developments and Outlook The scenario in India is encouraging in view of government’s policies which will promote employment and growth of real estate sector. The Government is undertaking various steps to energies this sector and provide it with the much needed push to accelerate growth. ii. Opportunities and Threats The outlook for real estate sector for short term remains uncertain. High interest rates continue to impact the business of real estate. Banks/Financial Institutions have become cautious towards issuing fresh loans or rescheduling debt to real estate companies. Thus, liquidity is a major factor for determining overall project execution. In view of government’s policies the long-term factors are likely to work in favour of the real estate developers. iii. Segment Wise Performance Your Company has only single segment i.e. Construction and Real Estate Development. Revenue and expenses have been identified on the basis of accounting standard and guidance note issued by Institute of Charted Accountant of India for this sector. iv. Risks and Concerns: The Company can be exposed to various risks if not identified and addressed in time. Your Company has taken steps for identification and assessment of risks and measures to mitigate them. v. Internal Control Systems and their Adequacy The Company has a well defined organization structure, documented policy guidelines, predefined authority levels, and an extensive system of internal controls system. An independent internal audit firm appointed by the Company conducts audits to ensure adequacy of internal control systems, adherence to management policies and compliance with the laws and regulations. vi. Financial Performance During the year under review Company’s operational income is Rs. 1,111.90 lacs (previous year Rs. 3,846.48 lacs)and other income is Rs.5.28 lacs (previous year Rs.5.59 lacs). Company has incurred loss of Rs. 693.75 lacs. In the previous year the Company has reported a profit of Rs. 235.05 lacs. vii. Material development in Human Resources Your Company firmly believes that success of a company comes from good Human Resources. Employees are considered an important asset and key to its success. The employee relations continued to be satisfactory. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mrs. Malvika S. Pittie (DIN: 00730352), Director, retires by rotation at the ensuing Annual General Meeting and is eligible for re-appointment. Mr. Milind Korde, Independent Director resigned as Director of the Company effective from the close of business hours on 31st March, 2016 due to limitation of time in other professional commitments. The Board places on record its appreciation for the contribution made by him during his tenure as Director of the Company. The following are the Key Managerial Personnel: 1. Mr. Shridhar Pittie, Managing Director 2. Mr. S.K. Jhunjhunwala, Chief Financial Officer 3. Mr. Rohit Taparia, Company Secretary (w.e.f 17.08.2015). DECLARATION FROM INDEPENDENT DIRECTORS Mr. Madhav L. Apte (DIN: 00003656) and Mr. Nayan Mirani (DIN: 00045197), Independent directors of the Company had submitted declarations that each of them meet the criteria of independence as provided in sub Section (6) of Section 149 of the Act and there has been no change in the circumstances which may affect their status as independent director during the year. In the opinion of the Board, the independent directors possess appropriate balance of skills, experience and knowledge, as required. NUMBERS OF MEETINGS OF THE BOARD During the year, four Board meetings were convened and held. The maximum interval between the meetings did not exceed the period prescribed under Companies Act, 2013. COMPOSITION OF AUDIT COMMITTEES The Audit Committee of the Board of Directors comprised of Mr. Nayankumar Mirani, Mr. Milind Korde and Mr. Shridhar Pittie. Since Mr. Milind Korde resigned as Director from the Board of the Company, Mr. Madhav L. Apte was appointed as member of the Audit Committee. All members of the Audit Committee possess strong knowledge of accounting and financial management. Four meetings of the Committee were held during the financial year. WHISTLE BLOWER POLICY / VIGIL MECHANISM The Company has a Whistle Blower Policy to report genuine concern or grievances. The whistle blower policy has been posted on the website of the Company (www.rajabahadur.com). During the year no such incidence was reported. NOMINATION AND REMUNERATION POLICY The Board of Directors has framed a policy for appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company in compliance with Section 178 of the Companies Act, 2013. As per the policy, the Nomination and Remuneration Committee recommend to the Board appointment, re-appointment of Directors and Key Managerial Personnel and determination, fixation and revision of their remuneration and is approved by the Board of Directors, subject to the approval of shareholders, wherever necessary. The objective and broad framework of the Company’s Remuneration Policy is to consider and determine the remuneration, based on the performance and growth of the company, the current trends in the industry, the experience of the appointee, their past performances and other relevant factors. The Board of Directors has framed a policy which lays down a framework in relation to appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy also lays down the criteria for selection and appointment of Board members including Independent Directors.We affirm that the remuneration paid to the Directors, Key Managerial Personnel and Senior Management is as per the terms laid out in the remuneration policy of the Company. RISK MANAGEMENT POLICY The Board of Directors of the Company has framed a risk management policy and is responsible for reviewing the risk management plan and ensuring its effectiveness. The audit committee has additional oversight in the area of financial risks and controls. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. DIRECTORS RESPONSIBILTY STATEMENT To the best of their knowledge and belief and according to the information and explanation obtained, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013 i. that in the preparation of the annual accounts for year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; ii. that such accounting policies have been selected 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 on 31stMarch, 2016 and of the loss of the Company for the year ended on that date; iii. that proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. that the annual accounts have been prepared on a ‘going concern’ basis; v. that proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively; vi. that systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. INTERNAL FINANCIAL CONTROLS: The Company has in place adequate internal financial controls with reference to the financial statement. The Audit Committee of the Board periodically reviews the internal control systems with the management, Internal Auditors and Statutory Auditors and the adequacy of internal audit function, significant internal audit findings and follow-ups thereon. DETAILS OF SUBSIDIARIES/ JOINT VENTURES / ASSOCIATES: The Company does not have any Subsidiaries/ Joint Ventures / Associates. DEPOSITS: The Company has not accepted any public deposits in terms of Section 73 of the Act. EXTRACT OF ANNUAL RETURN In accordance with the requirements of Section 92 (3) of the Companies Act, 2013 and rule 12 (1) of the Companies (Management and Administration) Rules, 2014, an abstract of Annual Return in Form MGT-9 is enclosed as “Annexure- A.” AUDITORS, AUDIT REPORT AND AUDITED ACCOUNTS M/s. J.K. Doshi& Co., Chartered Accountants, (Firm Registration No.102720W), Auditors of the Company would retire at the conclusion of the ensuing Annual General Meeting. They have expressed their willingness to act as Auditors of the Company and given the confirmation that their appointment, if made, would be in conformity with the provision of Section 139 & 141 of the Companies Act, 2013. You are requested to appoint Auditors and fix their remuneration. As regards disclaimer in the Audit Report, your directors have to state that the Company is having adequate system of Internal Financial Controls. The Company is in the process of establishing effective system as per Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India on 14th September, 2015. SECRETARIAL AUDIT Pursuant to the provisions of Section 204 and other applicable provisions, if any, of the Companies Act, 2013, M/s. Jigyasa Singhi & Associates, Practicing Company Secretaries were appointed as the Secretarial Auditor for auditing the secretarial records of the Company for the financial year 2015-16 and the Secretarial Auditors’ Report issued by them is attached hereto as “Annexure-B”. As regards observations of Secretarial Auditors in their report, your directors have to state that necessary steps have been taken for ensuring the compliances of the same. PARTICULARS OF REMUNERATION TO EMPLOYEES The particulars of remuneration to directors and employees and other related information required to be disclosed under Section 197(12) of the Companies Act, 2013 and the Rules made there-under are given in “Annexure-C” to this Report. RELATED PARTY TRANSACTIONS The Board has framed a policy for related party transactions. Particulars of transactions with related parties pursuant to Section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form AOC-2 and the same forms part of this report as “Annexure-D”. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaint of sexual harassment during the financial year 2015-2016. LISTING AGREEMENT AND LISTING FEES The Company entered into Listing Agreement with BSE Limited in terms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 issued on September 2, 2015 effective from December 1, 2015. The Company has paid the listing fees to BSE Limited for the year 2016-2017. INSIDER TRADING REGULATIONS AND CODE OF DISCLOSURE The Board of Directors has adopted the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 and is available on our website (www.rajabahadur.com). PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS The Company has not given any loans or guarantees or made investments in contravention of the provisions of the Section 186 of the Companies Act, 2013. The details of the loans and guarantees given and investments made by the Company are provided in the notes to the financial statements. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO In view of nature of business of the Company, particulars regarding conservation of energy and technology absorption are not given. However, the Company has taken various measures to conserve energy at all levels. There was no foreign exchange earning whereas outgo was Rs. 3.80 lacs during the year under report. CODE OF CONDUCT The Board has laid down a code of conduct for Board members and senior management personnel of the Company. The code incorporates the duties of independent directors as laid down in the Companies Act, 2013. The Board members and senior management personnel have affirmed compliance with the said code of conduct. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS No significant or material orders were passed by any regulator or court that would impact the going concern status of the Company and its future operations. APPRECIATION The Board of Directors are thankful to its Bankers and Institutions for the support and financial assistance from time to time. Your Directors are pleased to place on record their sincere appreciation to all the employees of the Company whose untiring efforts have made achieving its goal possible. Your Directors wish to thank the Central and State Governments, customers, suppliers, business associates, shareholders for their continued support and for the faith reposed in your Company. For and on behalf of the Board M.M. PITTIE (DIN: 00760307) CHAIRMAN Place: Mumbai Date: May 30, 2016 |