A. Industry Structure and Developments
Your Company is a building construction company. It undertakes development projects of
residential and commercial multi-storied apartment complexes. The operations of the
Company are presently confined to localities in and around Chennai and its suburbs.
B. Performance
Your Company reported a total income of Rs.0.18 lakhs during the year ended 31st March
2020 as against Rs.25.98 lakhs during the previous year. The Loss after tax was
Rs.(103.54) lakhs for the year ended 31.3.2020 as against Loss after tax of Rs. (91.14)
lakhs achieved during the previous year.
The value of contract work-in-progress of projects at cost which are at various stages
of progress as on 31st March 2020 is Rs. 3201.26 lakhs as against Rs. 2925.26 lakhs during
the previous year and the same is disclosed as inventories in the Balance sheet as on 31st
March 2020.
Your Company has completed construction of multi-storied residential luxury apartments
at Woods road abutting Mount Road and General Patters road named Grand Melody. A limited
edition home of just 35 super spacious stately apartments, Grand Melody shall offer a
feeling of living in a villa, but with all the convenience, privacy and security of a
modern apartment campus. However, the Company could not sell any of these apartments which
are lying in stock ever since the construction was completed. The real estate market for
luxury apartments at Chennai was severely adversely affected due to declining growth
witnessed in the past few years. The company is taking active efforts to market these
apartments, including exploring alternatives avenues for realization of cash flows. Until
the stock is cleared, the company is constrained with cash flow availability to launch new
projects.
Your Company owns landed properties at Sholinganallur, Chennai and at Arcot Dist,
Tamilnadu, wherein it will be launching large scale construction projects for building
residential or commercial complexes at an opportune moment.
C. Segmentwise Performance
Your Company undertakes construction projects at Chennai and its suburb. The activities
of your Company falls under single segment namely Construction of Buildings (Residential
& Commercial).
D. Concerns
The primary concern is non-existent demand in the luxury market segment. Availability
of raw materials, especially sand, and their ever increasing cost also remains a concern.
The advent of COVID-19 has further adversely affected the demand in the real estate sector
which is experiencing supply glut and demand destruction due to falling incomes.
E. Outlook
Your Company will be concentrating in the execution of the existing projects on hand.
Launch of further projects depends upon liquidation of stocks of the premium luxury
apartments built by your company at the heart of the city.
F. Internal Control Systems
Your company has a proper and adequate system of internal controls to ensure that all
assets are safeguarded and protected against loss from un-authorised use or disposition.
G. Human resources and industrial relations
Your company has well qualified and experienced technical, financial and administrative
staff to cater to its business requirements. The relations with the employees of the
company remained cordial throughout the year.
CREDIT RATING
Your Company has not issued any financial instruments requiring to be rated by credit
rating agencies during the year.
SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES
Your Company does not have any subsidiary, joint venture or associate companies.
DIRECTORS RESPONSIBILITY STATEMENT
Your Directors state that: i. in the preparation of the annual accounts for the year
ended March 31, 2020, the applicable accounting standards read with requirements set out
under Schedule III to the Act, have been followed and there are no material departures
from the same; ii. the Directors have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at March 31, 2020 and
of the profit of the Company for the year ended on that date; iii. the Directors have
taken proper and sufficient care for the maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities; iv. the Directors have
prepared the annual accounts on a going concern basis; v. the Directors have laid down
internal financial controls to be followed by the Company and that such internal financial
controls are adequate and are operating effectively; and vi. the Directors have devised
proper systems to ensure compliance with the provisions of all applicable laws and that
such systems are adequate and operating effectively.
CORPORATE GOVERNANCE
Your Company has complied with all the material requirements of Corporate Governance
prescribed under Securities & Exchange Board of India (Listing Obligation and
Disclosure Requirements) Regulations, 2015. A report on Corporate Governance as required
under regulation 34(3) read along with Schedule V of the said regulation is annexed and it
forms part of this report.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
The Related Party Transactions which was considered material as per the policy adopted
by the Company and for which the Company has already obtained the members approval at the
previous AGM is disclosed in the Form AOC2 annexed to this report. Other than this, the
Company had not entered into any contract, arrangement or transaction with related parties
which could be considered material in accordance with the policy of the Company on
materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related party
transactions as approved by the Board was put up on the website of the Company at
www.narendraproperties.com Your Directors draw attention of the members to Note 24 : Notes
to the financial statements for the year ended March 31, 2020 to the financial statement
which sets out related party disclosures.
RISK MANAGEMENT
Your Directors have constituted a Risk Management Committee even though it is not
required under SEBI (LODR) Regulations which has been entrusted with the responsibility to
assist the Board in framing and overseeing risk management policy and its periodical
review, implementation and taking of pre-emptive corrective actions as may be deemed
necessary. Your Company has adequate risk management infrastructure in place capable of
addressing risks faced by the company both internal and external.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to
financial statements. During the year, no reportable material weakness has surfaced with
regard to those internal controls in place.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
The Board of Directors of the Company is duly constituted as per the requirements of
section 149 of the Companies Act, 2013, and SEBI (LODR) Regulations, 2015. During the
year, there has been no change in the overall composition of the Board of Directors of the
Company.
The Independent Directors Mr S Ramalingam, Mr Babubhai P Patel and Mr K S Subramanian
have been reappointed to hold office for a second term for a further period of five years,
from 1st April 2019 to 31st March 2024, by the members at their 23rd AGM held on 24th
September 2018.
Your Director Mr Nishank Sakariya and Mrs Preethi S Maher retires by rotation at the
ensuing Annual General meeting and being eligible is offering themselves for
re-appointment.
The Board of Directors have appointed Mr Mahendra K Maher as an Additional Director on
the Board with effect from 22nd November 2019 in order to broad-base the Board and to
avail of his expertise in the construction industry. As an Additional Director Mr Mahendra
K Maher shall be holding office only up to the ensuing 25th AGM. The Company has in place
all the KMPs required to be appointed u/s 203 of the Companies Act, 2013. Mr Chirag N
Maher is the Managing Director & Chief Executive Officer, Mr Jitesh D Maher is the
Chief Financial Officer. Mrs Madhuri Mundhra resigned as Company Secretary with effect
from 12th August 2019 and Mr Nishant Agarwal was appointed as Company Secretary with
effect from 12th August 2019.
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed both under the
Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
A familiarisation program was conducted on 11th February 2020 for the Independent
Directors wherein the roles, rights, responsibilities of the Independent Directors, the
business model of the company and the industry related developments was apprised and
presented to them. All the Directors attended the Familiarisation programme. The details
of the familiarization program conducted for Independent Directors has also been uploaded
at the website of the Company at www.narendraproperties.com.
The Company has formulated Policy for selection of Directors and determining Directors
independence, Remuneration Policy for Directors, Key Managerial Personnel and other
employees which has been put up on the website of the Company at
www.narendraproperties.com.
AUDITORS & AUDITORS REPORT Statutory Auditor
The report of the Statutory Auditors M/s A J Deora & Associates, Chartered
Accountants, Chennai, is annexed to this report. The Auditors have issued an un-modified
opinion on the Financial Statements audited by them for the year ended 31st March 2020.
As regards the remarks made by the Auditors in their report in the para on
‘Emphasis of Matter drawing attention to Note 8 and also with reference to point
2(g)(i) in the para ‘Report on other Legal & Regulatory Requirements, your
Directors wish to state that the Company has taken post dated cheque amounting to Rs.75
lakhs from M/s Karismaa Foundations Private Limited based on terms agreed upon in the
settlement agreement executed with them and bonafidely believing that the party would
honour the post dated cheque when presented for payment on due date. However, the cheque
was dishonoured. The Company has initiated appropriate legal action against the party for
recovery of the amount due. The Auditors have not modified their opinion in this regard.
Secretarial Auditor
The Board has appointed Mr Gopikrishnan Madanagopal, Practising Company Secretary, to
conduct Secretarial Audit for the financial year 2019-20. The Secretarial Audit Report for
the financial year ended March 31, 2020 is annexed to this report. The Secretarial Auditor
have issued an un-modified opinion in his report for the year ended 31st March 2020.
Internal Auditor
Mr R Mugunthan, Independent Practicing Chartered Accountant is the Internal Auditor of
the Company as required under section 138 of the Companies Act, 2013. The Internal Auditor
reports to the Audit Committee and the periodical reports submitted by him are reviewed by
the Audit Committee and the Board. No adverse findings were reported by the Internal
Auditor during the year.
DISCLOSURES
Corporate Social Responsibility
Your Company is not falling within the financial criteria laid down under section
135(1) of the Companies Act, 2013, and as such is not under obligation constitute
Corporate Social Responsibility committee and undertake CSR activities.
Audit committee
The Audit Committee constituted by the Board satisfies the requirements prescribed
under section 177 of the Companies Act, 2013 and the SEBI (LODR) Regulations. All the
recommendations made by the Audit Committee during the year have been accepted by the
Board.
Vigil Mechanism
The Company has put in place a vigil mechanism in order to facilitate Directors and
Employees to report on genuine concerns. The Whistle Blower policy adopted by the Company
and the Vigil Mechanism as a part of the said policy has been put up on the website of the
Company at www.narendraproperties.com
Meetings of Board
During the year seven meetings of the Board of Directors were held. The dates on which
the Board meetings were held and the attendance of the Directors therein is furnished in
the Corporate Governance Report.
Particulars of Loans given, Investments made, Guarantees given and securities provided.
The particulars of Investments made & Loans given Note 5 & 6 : Notes to
Financial Statements. The Company has not given any guarantees and has not provided any
security during the year.
Conservation of energy, technology absorption, foreign exchange earnings and outgo.
As the Company is basically a construction company, the Provisions of Sec. 134 (3) (m)
of the Companies Act, 2013, so far as the information relating to conservation of energy
and technology absorption is not applicable to the Company. The Company has not earned any
revenue in foreign exchange and it has also not incurred any expenditure in foreign
currency during the year.
Extract of Annual Return
The extract of Annual Return as on 31st March 2020 in the prescribed Form MGT9 is
annexed to this report.
Particulars of Employees and related disclosures
In terms of the requirements of Section 197(12) of the Companies Act, 2013, read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, your Directors wish to state that none of the employees are
drawing remuneration in excess of the limits set out in the said rules.
Disclosures pertaining to remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 annexed to this report.
Employees Stock Option Scheme
The Company has not formulated any Employees Stock Option scheme.
Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.
The Company has in place Anti Sexual Harassment Policy in line with the requirements of
the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013. All employees (permanent, contractual, temporary, trainees) are covered under this
policy. The Company has not received any complaints under the said Act during the year.
General
Your Directors do not have anything to report or disclose on the following items since
there were no transaction relating to them during the year: i. No deposits were accepted
attracting the provisions of section 73 - 76 of the Companies Act, 2013. ii. The Company
has not issued any equity shares during the year with differential rights as to dividend,
voting or otherwise. iii. The Company has not issued any shares (including sweat equity
shares) to any of its employees during the year. iv. The Company does not have any
subsidiary, Joint venture or associate companies and as such the Managing Director / Whole
time Directors receiving any remuneration from such companies does not arise. v. No
significant or material orders were passed by the Regulators or Courts or Tribunals which
impact the going concern status and Companys operations in future. vi. There were no
material changes and commitments affecting the financial position of the company which
have occurred between 31st March 2020 and the date of this report. vii. The Board has
reviewed the system in place to monitor compliance with all the applicable laws relating
to Companies domain of operation and it has not come across any material non-compliance
with such laws during the year.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the various Governmental authorities, the
Companys Bankers Bank of Baroda, HDFC Bank Limited, Kilpauk Branch, Tamilnad Mercantile
Bank Limited and all the customers, suppliers and contractors who have supported the
efforts of the Company at every critical stage.
Your Directors also wish to place on record the dedicated services rendered by the
employees of the Company at all levels.
ANNEXURES FORMING PART OF BOARDS REPORT:
Annexure I: Form AOC2 - Disclosure on Related Party transactions.
Annexure II: Corporate Governance Report (including Company Secretary Certificate &
other certificates annexed to CG Report).
Annexure III: Disclosure under Rule 5 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 Annexure IV: Extract of Annual return - Form MGT9.
Annexure V: Secretarial Audit Report.
Annexure VI: Independent Auditors Report on Financial Statements.
Annexure VII: Financial Statements as on and for the year ended 31st March 2020
together with notes thereto.
Corporate Governance Report and certificate issued by practicing company secretary
CERTIFICATE ON CORPORATE GOVERNANCE TO THE MEMBERS OF M/S NARENDRA PROPERTIES LIMITED
I have examined the compliance of the conditions of Corporate Governance by M/s
NARENDRA PROPERTIES LIMITED for the year ended 31st March 2020, as stipulated in Schedule
V to the Securities & Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
The compliance of the conditions of corporate governance is the responsibility of the
Management. My examination has been limited to a review of the procedures and
implementations thereof, adopted by the Company for ensuring compliance with the
conditions of the Corporate Governance. It is neither an audit nor an expression of
opinion on the financial statements of the Company.
In my opinion and to the best of my information and according to the explanations given
to me, I certify that the Company has, complied with the conditions of Corporate
Governance as stipulated in the above mentioned Regulations.
I further state that such compliance is neither an assurance as to the future viability
of the Company nor of the efficiency or effectiveness with which the management has
conducted the affairs of the Company.
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