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Your Directors have pleasure in presenting the 23rd Annual Report together with Audited Accounts of the Company for the financial year ended on March 31st, 2018.
The financial performance of the Company for the financial year ended on March 31st, 2018 is summarized as below:
|Particulars||Figures for Current Reporting Period ended March 31, 2018||Figures for Current Reporting Period ended March 31, 2017|
|(Figures are in Rs. Lacs)||(Figures are in Rs. Lacs)|
|Profit before tax||116.45||109.78|
|Previous Year Tax||44.24||-|
|Deferred Tax Liability (Assets)||(49.33)||(1.47)|
|Profit/(Loss) for the period||97.45||88.00|
|Transfer to reserve||97.45||46.18|
The Company has adopted Indian Accounting Standard (referred to as Ind AS) with effect from 1 April 2017 and accordingly these financial results along with the comparatives have been prepared in accordance with the recognition and measurement principles stated therein, prescribed under Section 133 of the Companies Act, 2013 ("Act") read with the relevant Rules framed thereunder and the other accounting principles generally accepted in India.
Your Company witnessed an overall 29.80 % fall in Sales during the Financial Year 2017-18 with total sales of Rs. 20,033.92 lacs as against Rs. 28,539.35 lacs during the previous financial year. The revenue from operation showed fall in revenue by Rs. 8,508.11 Lacs.
During the year net profit increased by 10.71% with total Net profit of Rs. 97.45 lacs as against Rs. 88.02 lacs during the previous financial year. The Company is hopeful to achieve the desired results during coming financial years so that the cost of Finance can be met and profit margin is increased.
Your company, however, looks forward to further strengthen its operations by consistently focusing on embarking its profit for the coming years.
TRANSFER TO RESERVES
The Company has transferred Rs. 97.45 lacs from Profit and Loss Account to reserves during the year under review.
CHANGE IN THE NATURE OF THE BUSINESS
There was no change in the nature of the business of the Company during the year under review. There were no material changes and commitments affecting the financial position of the Company occurring between March 31, 2018 and the date of this report.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return as on 31st March 2018 in Form MGT -9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out in Annexure -1 to this report.
SUBSIDIARY/ASSOCIATE/JOINT - VENTURE COMPANY
The Company does not have any subsidiary, associate or joint - venture company. Further there is no company which became or ceased to be its subsidiaries, joint ventures or associate companies during the year.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2017-18, the Company entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which were in the ordinary course of business and on arms length basis and in accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and Listing Regulations.
All transactions with related party were reviewed and approved by the Audit Committee and are in accordance with the Policy on Related Party Transactions formulated in accordance with the provisions of Companies Act, 2013 read with Rules issued thereunder and the Listing Regulations.
Prior omnibus approvals are granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arms length basis in accordance with the provisions of Companies Act, 2013 read with Rules issued thereunder and the Listing Regulations.
The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note 32 to Financial Statement of the Company.
The Form AOC -2 pursuant to Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in the Annexure -2 to this report.
DETAILS OF DEPOSIT AS PROVIDED UNDER CHAPTER V OF THE COMPANIES ACT, 2013
Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
ORDERS PASSED BY THE REGISTRARS OR COURTS OR TRIBUNALS
Company is in receipt of Order vide letter no L/SURV/OFL/AB/2017- 18/SHELL/COMP/539691/1 dated August 10th, 2017 Issued by Bombay Stock Exchange (BSE) directing Forensic Audit of the affairs of the Company.
There is no other significant and material order passed by the registrars or courts or tribunals impacting the going concern status and companys operation in future.
However, the Securities and Exchange Board of India (SEBI) vide it letter no. SEBI /HO/ISD/OW/P/2017/18183 dated August 7th, 2017 to Bombay Stock Exchange (BSE) have categorized the Company as Deemed Shell Company and has placed the listed securities in Stage VI of the Graded Surveillance Measures (GSM) with immediate effect.
Further the Company had received a letter from Bombay Stock Exchange wherein the securities of the Company are listed vide letter no L/SURV/OFL/KM/COMP/539691 dated August 10th, 2017 seeking clarification regarding the status of the Company w.r.t Deemed Shell Company and asking for certain documents along with auditors certificate on the same.
BSE has appointed M/s PVRN & Co., Chartered Accountants appointed as Forensic Auditors of the Company.
Your Company is cooperating with Auditor and shall be able to get itself removed from the List of Deemed Shell Companies as documents along has already provided to Forensic Auditor for smooth Conduct of the Forensic Audit of the Company.
LOANS, GUARANTEES OR INVESTMENTS
The company has given loan, guarantee or made investment as prescribed under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meeting of Board and its Powers) Rules 2014 during the period under review.
INTERNAL FINANCIAL CONTROLS
The Company has put in place adequate internal financial controls over financial reporting. These are reviewed periodically and made part of work instructions or processes in the Company. The Company continuously tries to automate these controls to increase its reliability.
The Company has identified inherent reporting risks for each major element in financial statements and put in place controls to mitigate the same. These risks and the mitigation controls are revisited periodically in the light of changes in business, IT Systems, regulations and internal policies. Corporate Accounts function is involved in designing large process changes as well as validating changes to IT systems that have a bearing on the books of account.
The Company periodically conducts physical verification of inventory, fixed assets and cash on hand and matches them with the books of accounts. Explanations are sought for any variance noticed from the respective functional heads.
The Company in preparing its financial statements makes judgement and estimates based on sound policies. The basis of such judgements and estimates are also approved by the Audit Committee of the Company in consultation with the Statutory Auditors of the Company. The management periodically compares the actual spends against the estimates and makes necessary adjustments to the same based on changes noticed.
The Company gets its account audited every quarter by its Statutory Auditors as per requirement of the SEBI (LODR) Regulations, 2015 as amended from time to time.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
I. RETIREMENT BY ROTATION
Mr. Rajesh Goyal, Director (DIN -01339614) is liable to retire by rotation at the ensuing AGM, pursuant to Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) thereof for the time being in force), the Articles of Association of the Company and being eligible have offered himself for re-appointment. Appropriate matter for his re - appointment is being placed for the approval of the shareholders of the Company at the ensuing AGM. The brief resume of the Director and other related information has been detailed in the Notice convening the 23rd AGM of the Company. The Directors recommend his re - appointment as Director of the Company.
In accordance with the provisions of Companies Act, 2013 read with the Rules issued thereunder and the Listing Regulations, the Independent Directors of the Company shall hold office upto 29.03.2020 and are not liable to retire by rotation.
During the year under review, Mr. Himanshu Garg, (DIN:08055616) was appointed on the Board as an Additional Director of the Company with effect from 18th January 2018.
The Shareholders of the Company have confirmed the Appointment of Mr. Himanshu Garg (DIN:08055616) Director of the Company in their Extra Ordinary General Meeting held on 14.08.2018 at Hotel Noormahal, Noormahal X-ing, Sector -32, Karnal 132001.
None of the Directors of the Company is disqualified under Section 164 of the Companies Act, 2013.
During the year under review, Mr. Rama Kant, (DIN:00215998) Independent Director of the Company, resigned from the Board w.e.f. 21.10.2017 and Mr. Himesh Agrawal, (DIN:07458923) Director of the Company, resigned from the Board w.e.f. 31.01.2018.
AUDITORS AND AUDITORS REPORT
Statutory Auditor and Report
M/s Suri and Sudhir, Chartered Accountants (Firm Registration No.: 000601N), New Delhi, resigned as Statutory Auditors of the Company on 12.05.2018 due to pre-occupation due to which Casual Vacancy has been created in the Company.
The Shareholders of the Company appointed M7s AD Gupta and Associates, Chartered Accountants (Firm Registration No.: 018763N) at their Extra Ordinary General Meeting held on 14.08.2018, as statutory auditors till the Conclusion of Ensuing Annual General Meeting of the Company. The Company has received a certificate from the appointee auditors to the effect that their appointment if made, would be in accordance with the provisions of Section 141 of the Companies Act, 2013.
There are no adverse qualifications in the report of the Auditor under review. The observation made in the Auditors Report read with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013 except in respect of the following points.
In respect of Point No. (7)(a) to the Annexure A to the Auditors report, your board explained to the statutory auditors that the companys cash crunch therefore, payment of TDS, VAT, Service Tax and Dividend Distribution Tax is pending as on 31st March 2018 and will be paid shortly and the auditors satisfied.
In respect of Point No. (7)(b) to the Annexure A to the Auditors report, your board explained to the statutory auditors that the companys cash crunch therefore, payment of Income Tax is pending as on 31st March 2018 and will be paid shortly and the auditors satisfied.
In terms of Section 204 of the Companies Act, 2013, the Board of Directors at their meeting held on 5th September 2018 has appointed M7s Y.J. Basrar & Associates, Company Secretaries, (Certificate of Practice No - 3528), as the Secretarial Auditor of the Company to conduct an audit of the secretarial records, for the financial year 2018-19.
The Company has received consent from M/s Y.J. Basrar & Associates, Company Secretaries, to act as auditor for conducting audit of the Secretarial records for the financial year ending 31st March 2019.
The Secretarial Audit Report for the financial year ended 31st March 2018 is set out in Annexure 3 to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
None of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
DECLARATION GIVEN BY INDEPENDENT DIRECTORS
The Company has received declarations from all the Independent Directors confirming that they meet the criteria of Independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16 of Listing Regulations (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
NOMINATION AND REMUNERATION POLICY
The Company has formulated and adopted the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 read with Rules issued thereunder and the Listing Regulations. The details of the Nomination and Remuneration Policy are set out in the Corporate Governance Report which forms part of this Report.
The Nomination and Remuneration Policy of the Company provides that the Nomination and Remuneration Committee, shall formulate the criteria for appointment of Executive, Non - Executive and Independent Directors on the Board of Directors of the Company and Persons in Senior Management of the Company, their remuneration including determination of qualifications, positive attributes, independence of Directors and other matters as provided under Section 178 (3) of the Companies Act, 2013 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).
RISK MANAGEMENT POLICY
The Company has a well-defined process to ensure risks are identified and steps to treat them are put in right place at the right level in the management. The operating managers are responsible for identifying and putting in place mitigation plan for operational and process risks. Key Strategic and business risks are identified and managed by the senior leadership team in the organization.
The risks identified are updated along with the mitigation plans as part of the annual planning cycle. The mitigation plans are then woven into the plans/ initiatives for each function and are monitored accordingly. The senior leadership reviews the status of the initiatives as part of business review meetings.
The Board of Directors has formulated a Whistle Blower Policy which is in the compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations.
In line with the commitment of the Company to open communications, the Policy provides protection to the employees and business associates reporting unethical practices and irregularities and also encourages employees and business associates to report incidence of fraud.
Any incidents that are reported are investigated and suitable actions is taken in line with the whistle blower policy.
CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTIONS AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Since the Company is engaged in the trading of steel and real estate business, the Company does not consume substantial energy. It is the policy of the management to keep abreast of technological developments in the field in which the Company is operating and to ensure that the Company uses the most suitable technology.
The information pertaining to conservation of energy, research & development, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 is given hereunder and forms part of the Boards Report.
(A) Conservation of Energy: Nil
(B) Technology Absorption, Adoption and Innovation: Nil
(C) Foreign Exchange Earnings and Outgo: Nil
BOARD OF DIRECTORS PERFORMANCE EVALUATION
Pursuant to the provisions of the Companies Act, 2013 read with Rules issued under thereunder, Regulation 17 (10) of the Listing Regulations and the circular issued by SEBI dated 05th January 2017 with respect to Guidance Note on Board Evaluation, the evaluation of the Directors/ Board/ Committees was carried out for the financial year 2017-18.
The details of the evaluation process are set out in the Corporate Governance Report which forms part of this report.
HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION
Your Company has complied with all the applicable laws to the extent applicable.
Your Company had not issued shares with differential voting rights nor granted/issued any employee stock option or sweat equity during the year under review.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
The following is the summary of the complaints received and disposed - off during the financial year: 2017-18:
|No. of complaints received :||NIL|
|No. of complaints disposed off :||NIL|
In accordance with the Companies Act, 2013 read and Rules made there under, none of the employee fall under the purview of the said provisions who is drawing remuneration in excess of the limits as specified under the Act, 2013.
LISTING AND CONFIRMATION OF FEE
The securities of your Company are listed on Bombay Stock Exchange. The Company has paid the annual custody fee for the year 2017-18 to both the depositories namely National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL).
M/s Alankit Assignment Ltd having its office at 1E/13, Alankit House, Jhandewalan Extension, New Delhi-110055 has worked as Registrar and Share Transfer Agent during the F.Y 2017-18 and the annual fees for the year 2017-18 has been duly paid to M/s Alankit Assignment Limited.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors confirm that:
(a) In the preparation of the Annual Accounts for the financial year ended 31st March 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) Appropriate accounting policies have been selected and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company at the end of the financial year and of the profit of the Company for that financial year;
(c) Proper and sufficient care for the maintenance of adequate accounting records for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;
(d) The Annual Accounts on a going concern basis; and
(e) Internal financial controls to be followed by the Company and that such internal finance controls are adequate and were operating effectively.
"Internal financial controls" means the policies and procedures adopted by the Company for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information;
(f) Proper systems to ensure compliance with the provisions of all applicable laws and that such system was adequate and operating effectively.
REPORTING OF FRAUDS BY AUDITORS
During the Year under review, the Statutory Auditors have not reported under section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which need to be reported in the Boards Report.
NUMBER OF MEETINGS OF THE BOARD
The details of the meetings of the Board of Directors and its Committees, convened during the financial year 2017-18 are given in Corporate Governance report which forms a part of this report.
DISCLOSURES RELATED TO REMUNERATION OF DIRECTORS AND KMPs
The Company has not paid any remuneration to directors during the year. Remuneration of Company Secretary and Chief Financial Officer (KMP) is as per policy of the Company.
HUMAN RESOURCE DEVELOPMENT
Your Companys Human Resource Management focus continues to be in making available a talent pool, for meeting challenges in the competitive market place, which is increasingly becoming tougher. Development plans have been drawn up for key managers to shoulder higher responsibilities as well as to increase their job effectiveness. Your Company always encourages young personnel with their ideas and views. Management is easily accessible to the employees and their problems are attended to promptly. The employer - employee relations remained cordial at all the plants of the Company and peaceful throughout the year.
CORPORATE SOCIAL RESPONSIBILTY
The Provisions of Section 135 read with Schedule VII of the Companies Act, 2013 w.r.t Corporate Social Responsibility is not applicable to the Company.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis forms an integral part of this report in Annexure - 4 and gives details of the overall industry structure, economic developments, performance and state of affairs of the Companys various businesses viz., the real estate and Steel trading internal controls and other material developments during the financial year 2017-18.
CORPORATE GOVERNANCE REPORT
In compliance with Regulation 34 of the Listing Regulations, a separate Report on Corporate Governance along with a certificate from the Secretarial Auditors on its compliance, forms an integral part of this report Annexure -5
The company has shifted its registered office of the company during the year effective from 09.03.2018 and new registered office of the company is as under:
1601, RG Trade Tower, Plot No. B7,
Netaji Subhash Place, Pitampura New Delhi-110034
Your Directors wish to place on record their sincere thanks to investors, clients, vendors, regulatory authorities, government authorities, bankers and all other business associates for their continued co-operation and patronage and all the employees of the Company for their excellent performance and teamwork.
By Order of the Board
For Real Growth Commercial Enterprises Limited
|Rajesh Goyal||Deepak Gupta|
|Director||Whole Time Director|
|DIN - 01339614||DIN - 01890274|
|Date - 05.09.2018|
|Place - New Delhi|