Dear Members,
Your Directors take pleasure in presenting the 75th Annual Report
together with the Audited Financial Statements for the year ended on 31st March, 2023.
FINANCIAL RESULTS
| Particulars |
(Rs. in Lakh) |
| Total Revenue |
2282 |
| Profit before Depreciation |
438 |
| Depreciation |
74 |
| Profit after Depreciation before tax |
364 |
| Profit after Exceptional item |
364 |
| Tax Expense |
71 |
| Profit after Tax |
293 |
| Other Comprehensive Income |
5 |
| Total Comprehensive Income |
298 |
DIVIDEND
The Board of Directors have recommended Dividend of 25% on the Ordinary
and Deferred shares which respectively is Rs. 2.50/- and Rs. 6.25/- on each share of the
Company for the financial year ended on March 31, 2023.
OPERATION REVIEW
In a year marked by industry challenges, our company has consistently
delivered on promises, reinforced customer trust, and strategically capitalized on market
opportunities. The evident success in our housing projects and a keen pulse on industry
trends underline our vision for sustained growth.
During the year under review the group housing project Naman Homes
has been completed. The project was completed about 6 months before the date committed to
the customers. With execution of sale deeds, in progress, weve ensured a trouble free
possession of apartments to the customers. The construction work of the project The
Crescent is progressing satisfactorily as per schedule. We are very hopeful that this
project will also be completed before scheduled time.
We are pleased to inform that the Prayagraj Development Authority have
approved the plan for a new Group Housing project within "Shervani Legacy" at
Prayagraj. The Group Housing Project has been named as Victory Tower. It is 13 storey
two tower building having 520 units comprising 4BHK, 3BHK and 2BHK Apartments launched
towards close of Financial Year 2022-23.
We can say with pride that we are receiving a lot of enquiries about
the new project due to the trust and confidence we have earned. The management assures
that it shall make every effort to maintain the quality, delivery and commitment made to
customers.
MANAGEMENT DISCUSSION AND ANALYSIS
A. Business Overview, Industry Structure and Development
The downturn caused by the pandemic is witnessing an upswing, primarily
driven by robust government policies. The consequential migration and pent-up demand
post-pandemic are driving growth in our sector.
All are aware that real estate sector is the biggest employer of
unskilled labour and growth in this sector has a positive cascading effect on other
sectors like steel, cement, sanitary ware, ceramics etc. Consequent to the lifting of the
Corona pandemic curbs the migration of the public in search of jobs has increased leading
to better life and aspirations for stability, roof and a place of their dreams they may
call home. Thus on account of said factors the demand exists and remains unfulfilled, is
in growth mode and is expected to remain so for some time in future. Your company backed
by quality construction, pricing of its products and most importantly strict adherence to
delivery schedule has given a distinct advantage in sale of its products. We expect that
the rising trend in demand shall continue for more time because the supply in real estate
sector takes time to match the demand.
The factors having positive impact on the real estate industry are
several. The second factor being de-monetisation is pushing the speculators out of market
resulting in fall in prices and the genuine buyers getting a better deal. The Banks
emphasis on housing loan facility have eased availability but the marginal increase in
interest rate is having negative impact on customers The foregoing overview and status of
the real estate industry may not be so for the Metros, where income, costs, inventory have
important role, but is true for the Tier-1 and Tier-2 cities where the majority of
middle-income group resides and your company operates.
B. Outlook on Opportunities, Threats Risks and Concern
The real estate industry is no exception to risks and threats of
business. However the macro economic factors like opportunity, threat and risks are not in
control of a individual unit but its effect leaves a deep adverse impact on any unit. The
effect of factors like the Union and State Govt actions and initiatives, the RBI / banks
policy, statutory enactments etc. may reduce or increase the risk and concern for any
business unit to flourish. As already explained the opportunity are aplenty since the
trends of changes in society like migration, increase in disposable income, support and
enhance the demand side of this sector. The statutory enactment like RERA have boosted the
confidence in customers. They are now assured of putting their savings in the hands of
developers. Among the major areas of risk before the real estate industry is supply of raw
materials and inflationary trends in pricing. While the first risk delays/defers the
delivery schedule the second risk enhances the costs and the quality of work.
At the micro level the supply of raw material is a matter of concern.
Although the basic material like cement and steel are in organized sector and affected by
Govt. policies the other material like brick and sand are in unorganized sector. Any
mismatch can jeopardise the whole project by way of costs, and quality of work or delay /
defer the project. Your Company has worked hard on both these factors, its methodology of
working has been tried and tested in previous projects and the trust and goodwill earned
in our previous projects go long way in overcoming these adverse factors. We are
continuously working to employ the most efficient systems for procurement and testing of
raw material as well as to optimize the operating efficiency and consequently quality of
work.
C. Subsidiary Company
M/s Farco Foods Private Limited, the wholly owned subsidiary of your
company is engaged in manufacture of biscuits on job work basis for M/s Surya Foods and
Agro Limited for their "Priya Gold" brand. During the year under review the
Company produced 6016 MT of biscuits and earned a profit of Rs 20.65 lakh after tax.
During the year under review the profit has increased due to optimal use of the resources.
In the previous report we had informed that in the goat farming project the company was
facing problems in rearing of animals because the climatic conditions, at site, are not
conducive to growth of animals. To overcome the situation requires extensive investment
but due to uncertainty about returns/recovery on investment the Company is re-thinking
about same.
D. Internal Financial Controls
The Company has an adequate system of internal control to ensure
compliance with policies and procedures commensurate with the size and scale of
operations. The internal audit work has been assigned to an independent firm of Chartered
Accountant which evaluates the efficiency and adequacy of internal control systems. The
internal audit reports and recommendations are reviewed by the Audit Committee of the
Board.
E. Development in Human Resource and Industrial Relations
The Company maintains a very cordial relationship with its employees.
They whole-heartedly support the management in all its activities and endeavors.
F. Research and Development
In view of the nature of business activities of the Company there is
little scope for research and development work. The company is making all efforts to
reduce costs by maintaining standards that benefit the consumers.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to Corporate Governance requirements set out by SEBI. The Company
has complied with all mandatory requirements of Corporate Governance. A separate report on
governance practices followed by the Company in compliance of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 on Corporate Governance along with a
Certificate of Compliance from the Statutory Auditors is attached with the said separate
report which forms integral part of this Directors Report.
EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 read with Rules
thereunder and provisions of section 134(3)(a) of the Act, the Annual Return of the
Company is available on its website i.e. www.shervaniind.com
BOARD MEETINGS
The calendar of Meetings is prepared and circulated in advance to the
Directors. During the year four (4) Board Meetings were convened and details of same are
given in the Corporate Governance Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (3) of the Companies Act,
2013, the Directors state that;
(i) in the preparation of the Annual Accounts, the applicable Indian
accounting standards have been followed;
(ii) the directors have 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 as at the end of the
financial year and of the profit and loss of the Company for that period;
(iii) the Directors have taken proper and sufficient care 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) the Directors had prepared the Annual Accounts on a going concern
basis:
(v) 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
(vi) 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.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
NOMINATION & REMUNERATION
The Board on the recommendation of the Nomination & Remuneration
Committee, make the appointment of Directors, senior management and fix their
remuneration. Key Management Personnel are appointed by the Board after consideration of
their qualification and exposure to required fields. The details are stated in the
Corporate Governance Report.
RELATED PARTY TRANSACTIONS
To provide transparency in management and ensure compliance with the
provisions of various laws, the Audit Committee has provided guidelines to the
Directors/Board. The guidelines inter alia provide for identification, manner of dealing,
conduct and documentation of such transactions as per the provisions of the Companies Act
and other applicable rules and regulations.
All related party transactions that were entered in to during the
financial year were in the ordinary course of business and are disclosed at Note No. 35
attached to the standalone balance sheet and none of the transactions are of material
nature and have no potential conflict with the interest of the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS
AND OUTGO
There is nothing to report about the conservation of energy and
technology absorption during the year. There is no foreign exchange earning and outgo.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Pursuant to provisions of section 135 of the Companies Act, 2013, read
with Rule (9) of the Companies (Accounts) Rules 2014, a report on Companys CSR activities
is annexed herewith as Annexure-A and forms integral part of this report.
BOARD EVALUATION
The Board carries out annual evaluation of its own performance, of the
Directors individually as well of the working of its various Committees. The key areas for
evaluation are the quality of deliberations and contribution towards performance and
guidance to management. The Board of Directors expressed their satisfaction with the
evaluation process.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the section 152 of the Companies
Act, 2013, Mr. Raju Verghese (DIN-01086812), Director retire by rotation at the ensuing
Annual General Meeting and being eligible, offers himself for reappointment. Brief resume
of the Directors seeking reappointment along with other details as stipulated under SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 and in terms of
Section 102(1) of the Companies Act 2013 are provided in the Notice for convening the
Annual General Meeting.
Pursuant to provisions of section 203 of the Companies Act, 2013 the
Key Managerial Personnel of the Company are Mr. Mustafa Rashid Shervani, Managing
Director, Mr. Tahir Hasan, Chief Financial Officer and Mr. S. K. Shukla, Company
Secretary.
The Directors recommend all the resolutions placed before the Members
relating to Directors for their approval.
STATUTORY AUDITORS
The Auditors Report on the standalone financial statements of the
Company for the year ended March 31, 2023 forms part of this Annual Report. The Auditors
Report does not contain any qualifications, reservations, adverse remarks or disclaimer.
In terms of the provisions of Section 143(12) of the Act, no frauds have been reported by
the Statutory Auditors in their report for the year under review. Notes to the Financial
Statements are self-explanatory and do not call for any further comments.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the
Company has appointed M/s Siddiqui & Associates, Company Secretaries in Practice to
undertake the Secretarial Audit of the Company. The Report of Secretarial Audit for the
year 2022-23 is annexed herewith as Annexure -B and forms integral part of this Report.
CERTIFICATE OF NON-DISQUALIFICATION OF DIRECTORS
Pursuant to Regulation 34(3) and Schedule V. Para C clause (10)(i) of
the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Certificate
regarding Non-Disqualification of Director, issued by M/s Siddiqui & Associates,
Company Secretaries in Practice is annexed herewith as Annexure-C and forms integral part
of this Report.
INTERNAL AUDITOR
The Board of Directors on the recommendation of the Audit Committee
appointed M/s Rajeev Prem & Associates, Chartered Accountants, Kanpur to carry out the
Internal Audit of the Company.
COST AUDITORS
Pursuant to the provisions of section 148 and all other applicable
provisions, if any, of the Companies Act, 2013 ("Act") and the Companies (Audit
& Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment
thereof for the time being in force), M/s Shishir Jaiswal & Co., Cost Accountants
(Firm Registration No. 102450) has been appointed as Cost Auditors and the Company is
maintaining cost records as per the provision of "Act".
DEPOSITS
The Company has not accepted or renewed any deposit during the year
falling within the ambit of Section 73 of the Companies Act 2013 and the Companies
(Acceptance of Deposits) Rules 2014 accordingly no amount was outstanding as on the date
of Balance Sheet.
CONSOLIDATED FINANCIAL STATEMENT
In accordance with the section 129(3) of the Companies Act, 2013 and
the Indian Accounting Standard Ind AS-27 on consolidated financial statement(s) read with
Indian Accounting Standard Ind AS-28 on accounting for investments in associates your
Company has prepared the consolidated financial statements and annexed to this report. A
Statement in form AOC-1 containing salient features of the financial statements of the
subsidiary and associate companies are attached as Annexure-D.
AUDITORS REPORT
The observations of the Statutory Auditors in their report are
appropriately dealt with in notes forming part of Financial Statement. No qualification or
adverse remarks has been made by the Secretarial Auditor in his Secretarial Audit Report.
DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT &
REMUNERATION) RULES, 2014.
None of the employee of the Company was in receipt of total
remuneration of Rs. 60,00,000/- per annum or Rs. 5,00,000/- per month during the financial
year under review.
Disclosure required under section 197 of the Companies Act, 2013 read
with Rule 5 of the Companies (Appointment & Remuneration) Rules, 2014 have been
annexed as Annexure E.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place an anti sexual harassment policy in line with
the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act 2013. Till date the company has not received any complaint there under.
UNCLAIMED DIVIDEND
In compliance of section 124(5) of the Companies Act, 2013 there is no
unclaimed dividend for transfer to Investor Education and Protection Fund(IEPF) during the
year. However all the unclaimed dividend for the preceding years i.e. upto 2013-14 has
been transferred to IEPF.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The details of loans, guarantees and investments covered under the
provisions of section 186 of the Companies Act, 2013 are given in the notes to the
financial statements.
AUDIT COMMITTEE
The Company has an Audit Committee and details of constitution and
terms of reference are set out in the Corporate Governance Report.
VIGIL MECHANISM
Pursuant to the provisions of the section 177 of the Companies Act,
2013 the Company has adopted Vigil Mechanism policy which also incorporates a whistle
blower policy. Adequate safeguards are provided against victimization to those who avail
the mechanism and access to the Chairman of the Audit Committee while reporting about
unethical practices, malpractice and non-compliance of policies.
LISTINGWITH STOCK EXCHANGE
The Equity shares of the Company are listed on Bombay Stock Exchange
Limited. Further details are set out in the Corporate Governance Report.
REPORTING OF FRAUD
The Auditors of the Company have not reported any fraud to Audit
Committee as stipulated under second proviso of section 143(12) of the Companies Act,
2013.
INDUSTRIAL RELATIONS
Industrial relations remained cordial during the period under review.
ACKNOWLEDGEMENTS
Your Directors wish to convey their deep sense of appreciation for the
continued support, and co-operation extended by banks, Central and State Governments and
all other stakeholders. The Directors also wish to place on record their sincere
appreciation for the commitment and enthusiasm of the employees for the Company.
| Mustafa Rashid Shervani |
For and on behalf of the Board |
| Managing Director |
Saleem I. Shervani |
| DIN : 02379954 |
Executive Chairman |
| Place : Prayagraj |
DIN : 00023909 |
| Date : May 30, 2023 |
|
+91-9892691696
