DIRECTORS' REPORT Dear Shareholders, Your Directors are pleased to present the Twenty Second Annual Report of the Company together with the Audited Statements of Account for the year ended March 31, 2015. Review of Operations and Business During the financial year under review, the total revenue of the Company amounted to Rs. 2246.13 Lakhs as against the previous year's revenue of Rs. 1926.58 Lakhs. Your Company has registered the net profit after tax of Rs. 201.53 Lakhs as compared to previous year's net profit of Rs. 260.51 Lakhs. The year under review was a better year for the real estate sector compared to the previous year, when the industry faced several challenges like sluggish demand, lower industry volumes and delays in regulatory approvals. During the year, the regulatory hurdles with respect to the approval for on-going and new projects were removed to a considerable extent. Realty projects, which were at a standstill due to the regulatory impasse, received approvals for carrying on further development and construction. X'Czar is the Company's premium residential project at Juhu Scheme with a ten storied structure with stilt and podium and will provide the latest state of the art facilities, amenities and accessories including infinity swimming pool on the terrace for its owners. The work on site is complete; the Company has applied for occupation certificate, which is expected to be herein within a short span of time. The site is completely operational i.e., car lifts, passenger lifts, water connection, electricity meters, elegant furnished lobby etc. Your Company is poised to commence the development work shortly on its Residential cum Commercial project "X'Point" at Kandivali, Mumbai for which the initial approvals for its redevelopment from the MCGM was received in March 5, 2013 further approval for complete 2.70 FSI is also obtained by the Company on February 18, 2015. The Company had issued notice to the existing members to vacate and hand over peaceful possession of their flats for demolition. The demolition work had commenced from May 2015. As per the current estimates, the Company shall complete the construction and handover the possession in 2017-18. The Company also proposes to launch one more Residential cum Commercial Project in Matunga (Central), Mumbai during the current financial year and the development plans for the said project will be put up for approval shortly. Apart from Mumbai, your Company is continuously looking out for opportune land parcels in and around Mumbai. Management Discussion and Analysis Report The Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming part of this Report. Dividend Your Directors have pleasure in recommending the equity dividend of 8% aggregating to Rs. 25.98 Lakhs for the Financial Year 2014-15. Your Directors have also recommended dividend of 9% on the Cumulative Redeemable Preference Shares for the Financial Year 2014-15 aggregating to Rs. 63 Lakhs. These dividends, together with the dividend distribution tax, education cess and sucharge thereon, will involve an outgo of Rs. 107.09 Lakhs. The dividend is subject to the approval of the members at the ensuing Annual General Meeting and will be paid to shareholders whose names appear in the Register of Members as on September 19, 2015; in respect of shares held in dematerialized form, it will be paid to shareholders whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date. Share Capital The Company has two classes of shares, viz. Equity Shares and Preference Shares. The Authorized Share Capital is Rs. 13.00 Crore, divided into 6,000,000 (Sixty Lakhs) equity shares of Rs.10/- each and 7,000,000 (Seventy Lakhs) Cumulative Redeemable Preference Shares of Rs.10/- each. The Issued, Subscribed and Paid up capital as at March 31, 2015 was Rs. 10.44 Crore, (Rupees Ten Crore Forty Four Lakhs), divided into 3,247,900 (Thirty Two Lakhs Forty Seven Thousand Nine Hundred) equity shares of Rs. 10/- each, fully paid up, and 7,000,000 (Seventy Lakhs) Cumulative Redeemable Preference Shares of Rs.10/- each, fully paid up. The Company had forfeited shares amounting to Rs.1,970,750/- (Rupees Nineteen Lakhs Seventy Thousand Seven Hundred Fifty). Internal Control and Internal Audit The Company has an Internal Control System, commensurate with the size, scale and complexity of the operations. The Company has in place well-defined internal control mechanisms and comprehensive internal audit programs which, are reviewed and approved by the Audit Committee at the beginning of each financial year and progress reports are placed before the Committee on a quarterly basis. M/s. Ashar & Co., Chartered Accountants (Firm Registration No. 129159W) are responsible to carry out the internal audit of the Company and are being re-appointed as Internal Auditors continuing for the financial year 2015-16. Statutory Audit M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122W), are the Statutory Auditors of the Company who hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for a term of 5 years from the Financial Year 2015-16 till the Financial Year 2019-20, subject to ratification by members at every Annual General Meeting. As required under the provisions of Sections 139 and 141 of the Companies Act, 2013 and the Rules framed thereunder for re-appointment as Auditors, the Company has obtained written confirmation from M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122W) that their appointment, if made, would be in conformity with the limits specified in under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment. As required under the Clause 49 of the Listing Agreement, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. The Board of Directors, upon the recommendation of the Audit Committee, proposes the re-appointment of M/s. M. M. Nissim & Co., Chartered Accountants (Firm Registration No. 107122W) as the Statutory Auditors of the Company. Members are informed that there has been no adverse remark by the Auditors on the Auditors Report for the Financial Year 2014-15. Secretarial Audit Pursuant to provisions of Section 204 of Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. B. Desai and Associates (CP No. 7711) a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The report of Secretarial Audit is annexed as Annexure "A". Directors As on date, the Board of Directors of the Company comprise of eight Directors, of which four are Independent Directors. The Board of Directors of the Company comprises of eminent, experienced and reputed professionals from different fields. 1) Appointment of Directors The Board of Directors has appointed Ms. Tejal Daftary as a Woman Director w.e.f. August 13, 2014 in the casual vacancy caused by the resignation of Mr. Nilesh Vikamsey. 2) Retire by rotation In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Rohit Dedhia, Director retires by rotation at the forthcoming Annual General Meeting and being eligible has offered himself for re-appointment. The Notice convening the Annual General Meeting includes the proposals for re- appointment of the Directors. In compliance with Clause 49 IV (G) of the Listing Agreement, brief resumes of the Directors proposed to be re-appointed have been provided in the Explanatory Statement annexed to the Notice convening the Annual General Meeting. Specific information about the nature of their expertise in specific functional areas and the names of the companies in which they hold directorship and membership/ chairmanship of the Board Committees has been included in the Report on Corporate Governance, as stipulated under Clause 49 of the Listing Agreement. 3) Independent Directors All Independent Directors have given the declarations that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Board Meetings During the year under review, Board of Directors met 4 times i.e., May 29, 2014, August 13, 2014, November 14, 2014 and February 13, 2015. Board Committees During the year under review, the Board of Directors have in their meeting held on May 29, 2014, modified the terms of reference of the Audit Committee in line with the requirements of Section 177 of the Companies Act, 2013. The Board also rechristened the Shareholders'/ Investors' Grievance Committee as the Stakeholders' Relationship Committee and Remuneration Committee as the Nomination and Remuneration Committee with effect from May 29, 2014. In August 13 2014 Board Meeting, the Board modified the terms of reference of Nomination and Remuneration Committee. Independent Directors' Meeting A meeting of the Independent Directors was conducted on February 13, 2015 during the year under review. Nomination and Remuneration Policy The Board has on the recommendation of Nomination and Remuneration Committee framed a policy for selection and appointment of Directors and Key managerial Personnel and their Remuneration. The Nomination and Remuneration Committee policy is annexed herewith as Annexure "B". Directors' Responsibility Statement To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a. That in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b. That such accounting policies as mentioned in Note 2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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, 2015 and of the profit of the Company for the year ended on that date; c. That proper and sufficient care has 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; d. That the annual financial statements have been prepared on a going concern basis; e. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. Disclosures given by the Directors The Company has received various disclosures from the Directors as specified below: Form MBP-1 : The Company received disclosure of interest from all its Directors pursuant to Section 184 of the Companies Act, 2013 in Form MBP-1. Declaration under Section 164 : The Company has received declaration from all the Directors informing that they are not disqualified from being appointed/ re-appointed or continuing as Directors pursuant to Section 164 of the Companies Act, 2013. Disclosure under Section 149(6) : The Company has received declaration under Section 149(6) of Companies Act, 2013 from all the Independent Directors of the Company confirming their independence to the Company. Particulars of Loans provided, Guarantees given and Investments 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. Deposits The Company does not have any amount falling under the definition of deposits as under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014, as amended from time to time. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of Listing Agreement, the Nomination and Remuneration Committee has carried out an annual performance review. The Committee has evaluated Chairman & Managing Director's and all the Whole-Time Directors on the basis of their performance and role in accordance to the remuneration paid to them while all Independent Directors were evaluated based on their inputs, comments, suggestions for the efficient functioning of the Board and Company's management. Corporate Governance As per the eligibility criteria provided in the SEBI Circular dated September 15, 2014, the new Clause 49 of the Listing Agreement is not applicable to the Company. In light of the same the Company has informed BSE Limited regarding the non applicability of the new Clause 49 of Listing Agreement. Our Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by the Securities and Exchange Board of India (SEBI) and hence we have complied with some of the criteria specified in revised Clause 49 of Listing Agreement voluntarily, to the extent possible. Related Party Transactions All Related Party Transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Further all Related Party Transactions are placed before the Audit Committee and also the Board for information. Dematerialization Your Company's equity shares are available for dematerialization through National Securities Depository Limited and Central Depository Services (India) Limited. As on March 31, 2015, 3,194,445 Equity Shares, constituting 98.35% of the equity shares of your Company, were held in dematerialized form. Listing The Company's equity shares are presently listed with the BSE Limited under Scrip Code - 531822, Scrip ID - RODIUM. Subsidiary Company Your Company has one Wholly Owned Subsidiary Company, "Rodium Housing Shahapur Private Limited" (CIN-U45400MH2013PTC241820). However, there have been no significant operations in the Subsidiary during the year. In accordance with the General Circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, Statement of Profit and Loss and other documents of the Subsidiary Company are not being attached with the Balance Sheet of the Company. However, the financial information of the Subsidiary Company is disclosed in the Annual Report in compliance with the said circular. The Company will provide a copy of the Audited annual accounts in respect of its Subsidiary to any shareholder of the Company who requests for it and the said Audited annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the Subsidiary Company. Consolidated Financial Statements In accordance with the Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the Audited Consolidated Financial Statements are provided in the Annual Report. Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earnings and Outgo The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of The Companies (Accounts) Rules, 2014 is annexed herewith as Annexure "C". Extract of Annual Return The details forming part of the extract of the Annual Return in Form MGT-9 is annexed as Annexure "D". Cautionary Statement Statements in this Directors' Report and Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factor that could make a difference to the Company's operations include raw material availability and its prices, regulatory hurdles in project approvals, changes in Government regulations, tax structure, economic development of the country and other incidental factors. Acknowledgments Your Directors express and place on record their gratitude for the faith reposed in, and co-operation extended to, and interest shown in the operations of the Company by the Financial Institutions, Banks, Government Authorities, Customers, Business Associates and Shareholders. Your Directors also wish to place on record their sincere appreciation of the employees at all levels for their hard work, dedication and commitment throughout the year. By order of the Board of Directors For Rodium Realty Limited Sd/- Deepak Chheda Chairman and Managing Director (DIN : 00419447) Sd/- Harish Nisar Whole-Time Director (DIN : 02716666) Date: May 25, 2015 Place: Mumbai |