As on: Sep 25, 2023 10:28 PM
BOARD'S REPORT AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
To
The Members,
FGP LIMITED
Your Directors are pleased to present their Sixty-First Board's Report together with Audited Financial Statements for the financial year ended March 31, 2023.
The summary of financial performance of the Company for the year under review is as given below:
(Rs. in lakhs)
Exceptional items – Income from Excise Duty Refund and interest on it.
Revenue:
The total income for FY 2022-23 at Rs. 25.83 lakhs was lower as compared to Rs. 54.76 lakhs in previous year, which is attributed to lower other income on account of no gain in fair value of investments and also decline in rental income.
Expenses:
The total expenses for FY 2022-23 at Rs. 87.61 lakhs were more as compared to expenses of Rs. 72.77 lakhs in previous year mainly due to increase in employee benefit expenses.
Profit After Tax:
The Company's profit after tax for FY 2022-23 stands at a loss of Rs. 80.04 lakhs as compared to profit of Rs.
94.58 lakhs in previous year. The reason for the same is due to decrease in other income and increase in employee benefit expenses.
Considering the losses incurred during the year, your Directors express their inability to recommend any dividend for the year under review.
The Company has not transferred any sum to any Reserves during the financial year ended March 31, 2023.
India's growth continues to be resilient despite some signs of moderation in growth, although significant challenges remain in the global environment, India was one of the fastest growing economies in the world. The commercial real estate market in India is expected to reach new heights in 2023 and beyond. This market is now amongst the most favoured when it comes to seeing some really positive growth both in rentals and commercial real estate. After 2 years of being affected by COVID, Tier 2 and Tier 3 cities have arisen as fresh major real estate trends in 2022, and the real estate market has set unprecedented benchmarks which continued its growth momentum from 2021 amid the global slowdown.
As India awaits policy reforms to pick up speed, your Company firmly believes that the demand for Real Estate in a country like India should remain strong in the medium to long term. The Company's Business Centre though is strategically located in South Mumbai, there is a limitation for expansion of the office space by the corporates in that area and large number of corporates now prefer to shift their base to suburbs or other CBD's where there is greater scope to have a larger area at cheaper rentals. This trend has adversely impacted the Company's business in the last several years. Nevertheless, some of them would prefer to maintain their establishments in the South Mumbai, which may prove to be an opportunity to the Company.
Further, the Company is exposed to a number of risks such as regulatory, counterparty risk, but it has implemented risk management policies and guidelines that set out the tolerance for Company's general risk philosophy. It has established a framework and process to monitor
the exposures to implement appropriate measures in a timely and effective manner.
Looking at the above-mentioned facts, the future prospects for the business centre activity remains to be steady but not very promising.
Risk management can be construed as the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.
The Company has a well-defined risk management framework in place that functions through its Audit Committee. The Company periodically places before the Audit Committee and the Board, the key risks and the risk assessment and mitigation procedures followed by the Company.
The Company has established a well-defined internal control system to monitor the occupancy rate and operating cost, which are very critical factors from Company's performance point of view. Any kind of adverse factors are immediately reported to Board for their analysis and necessary action.
The Company has by and large been able to maintain its operations.
Employee relations continued to remain cordial during the year under review. As on March 31, 2023, there were three (3) employees including Key Managerial Personnel of the Company.
Return on Net Worth for FY 2022-23: (19.83)% Return on Net Worth for FY 2021-22: 28.05%
% Change in Return on Net Worth: (170.69)%
Return on Net Worth is negative as compared to immediately preceding financial year due to decrease in profit.
As compared to previous year, change in Return on Equity Ratio (206.30%) was mainly due to decrease in income, change in Net Capital turnover ratio of 41.36 % was on account of decrease in revenue and change in Net Profit Ratio (279.41%) was on account of decrease in fair market value of investments and exceptional income earned in previous year.
Except these, there is no significant change (i.e. change of more than 25%) in any other key financial ratio during the current financial year as compared to immediately preceding financial year.
Statements in the Management Discussion and Analysis describing the Company's objectives, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual might differ materially from those either expressed or implied.
There are no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the financial year on March 31, 2023 to which the financial statements relate and the date of this report.
The Company does not have any subsidiary/joint venture/associate.
There were no companies which have become or ceased to be its subsidiaries, joint ventures or associate companies during the year.
As stated above, the Company has laid down a well- defined risk management mechanism covering the risk mapping and trend analysis of both business and non-business risks, risk exposure, potential impact and risk mitigation process. The Audit Committee of the Board of Directors is designated to review and monitor the risks associated with the Company. Accordingly, it periodically reviews the risks and suggests steps to be taken to manage/ mitigate the same through a properly defined framework.
The Company has formulated a Policy on Related Party Transactions for the identification and monitoring of such transactions. The said Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website under link. https://www. fgpltd.in/RelatedPartyTransactionsPolicy.pdf
The Company has not entered into any transaction with related parties during the year under review which requires reporting in Form AOC-2 in terms of the Section 134(3) and 188(1) of the Companies Act, 2013 ("the Act") read with Rule 8(1) of the Companies (Accounts) Rules, 2014. Suitable disclosure as required by the Indian Accounting Standard (Ind AS 24) has been made in the notes to the Financial Statements.
There is no relationship between the Directors inter- se or with the Key Managerial Personnel (KMP).
None of the Directors or KMP had any pecuniary relationships or transactions vis-a-vis the Company except the sitting fees paid to Directors and remuneration paid to KMPs.
The Annual Return as required under Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the Company's website under the link: https://www.fgpltd.in/MGT-7.pdf
The Company has not given any loan nor provided any guarantee under Section 186 of the Act.
Details of investments made during the year are stated in the notes to Financial Statements.
The Company has not accepted any deposits within the meaning of sub-section (31) of Section 2 and Section 73 of the Act and the rules framed thereunder. As on March 31, 2023, the Company has no deposits outstanding.
In accordance with the provisions of Section 152(6) of the Act and Articles of Association of the Company, Mr. Rohin Bomanji (DIN: 06971089), retires by rotation at the ensuing Sixty-First Annual General Meeting and being eligible has offered himself for re-appointment.
Accordingly, a proposal for re-appointment of Mr. Rohin Bomanji (DIN: 06971089) Non-Executive, Non- Independent Director, who is liable to retire by rotation, is being placed for approval of members at the ensuing AGM alongwith the necessary details in terms of Regulation 36(3) of the Listing Regulations and Secretarial Standard-2 (SS-2) on General Meetings.
Pursuant to Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company as on March 31, 2023 were:
The Company has received the necessary declaration from each Independent Director in accordance with Section 149(7) of the Companies Act, 2013 and other applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") that he/she meets the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulations 16(1)(b) and 25(8) of the Listing Regulations. There has been no change in the circumstances affecting their status as an Independent Director during the year.
In the opinion of the Board of Directors, the Independent Directors of the Company possess requisite qualifications, experience and expertise and they hold the highest standards of integrity.
The Independent Directors have confirmed that they have registered and renewed, if applicable, their names in the data bank maintained with the Indian Institute of Corporate Affairs (‘IICA'). In terms of Section 150 of the Act read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Rules, 2014, all the Independent Directors of the Company are exempted from undertaking the online proficiency self- assessment test. The Directors are in compliance with the provisions of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended and applicable.
Pursuant to the Code of Conduct for Independent Directors specified under the Act and Regulation 25(7) of the Listing Regulations, the Company familiarizes its Independent Directors on their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates and business model of the Company, etc. The note on this familiarisation programme is also published on the Company's website at: https://www.fgpltd.in/Detailsoffamiliarization programmesimpartedtoindependentdirectors. pdf
The Board of directors met four times during the year ended March 31, 2023. The details of the same are mentioned in the Corporate Governance Report, which forms part of this Report.
The Board Committees comprise of mandatory committees as per the Act and Listing Regulations viz., Audit Committee, Nomination and Remuneration Committee and the Stakeholders Relationship Committee. Details of composition of these committees alongwith number of meetings held during the year and other related details are set out in the Corporate Governance Report which forms part of this Report.
There have been no instances where the Board of Directors has not accepted any recommendations of any of its committee including the Audit Committee.
The Annual Evaluation as required under the Act and the Listing Regulations has been carried out by the Board of its own performance, the performance of each individual Director (including chairperson of Board)
and its Committees. For this purpose, an Evaluation Questionnaire was prepared considering the criteria for evaluation in accordance with the Company's "Nomination and Remuneration Policy", approved by the Board on recommendation of the Nomination and Remuneration Committee, taking into account the applicable provisions under the Act and the rules made thereunder, the Listing Regulations read with the Circulars issued by SEBI in this regard, which inter- alia covered various aspects such as participation in meetings, contribution to strategic decision making, core governance and compliance, etc. The aforesaid Evaluation Questionnaire was circulated to all the Directors and their responses were received in a sealed envelope addressed to the Chairman of the Board of Directors and results thereof were then discussed in the next meeting of the Board of Directors.
The Policy inter-alia covers the requirements specified under Section 178(3) of the Act comprising of criteria for determining qualifications, positive attributes and independence of a director, etc. The detailed Policy duly modified in terms of the Listing Regulations, is given as Annexure A and is also posted on the Company's website under the link: https://fgpltd.in/ Nomination&RemunerationPolicy.pdf
in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
Particulars of employees pursuant to Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached with this report as Annexure B.
The particulars of employees in compliance with the provisions of Section 134 (3) (q) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided to the members on request. Any member desirous of receiving the same may write to the Company Secretary at the Registered Office of the Company.
The information to be furnished under Section 134(3)
(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished below.
Conservation of Energy: The Company is engaged in the Business Centre activity under which its operations do not account for substantial energy consumption.
However, the Company has taken all necessary steps to conserve energy. The management has ensured that all these measures are complied with.
Technology Absorption: The provisions relating to technology absorption are not applicable to the Company.
Foreign exchange Earnings & Outgo: Nil
The provisions of Section 135 of the Act are not applicable to the Company as the Company does not fall into the criteria specified in sub-section (1) of Section 135 of the Act.
M/s. MVK Associates, Chartered Accountants (FRN: 120222W) were appointed as the Statutory Auditors of the Company, at the Fifty Seventh AGM of the Company held on September 25, 2019 for a period of five years from the conclusion of the Fifty Seventh AGM until the conclusion of the Sixty Second AGM to be held in the year 2024.
M/s MVK Associates, Chartered Accountants have confirmed that they are eligible to act as the Statutory Auditors of the Company for FY 2023-24.
As per section 138 of the Act, the Board of Directors had appointed M/s. Vivek M. Tamhane & Co., Chartered Accountants to carry out Internal Audit of the Company for FY 2022-23.
Based on the recommendations of the Audit Committee, the Board of Directors at their meeting held on May 11, 2023, re-appointed M/s. Vivek M. Tamhane & Co, Chartered Accountants as the Internal Auditors of the Company for FY 2023-24.
M/s. Parikh Parekh & Associates, Company Secretaries were appointed as the Secretarial Auditors for conducting the Secretarial Audit in accordance with Section 204 of the Act for the year ended March 31, 2023. The Secretarial Audit Report prepared in accordance with Section 204(1) of the Act in prescribed Form MR-3 by M/s. Parikh Parekh & Associates, Company Secretaries is attached as Annexure C to this Report.
There are no qualifications, reservations or adverse remark made either by the Statutory Auditor in Auditors Report or by the Company Secretary in
Practice (Secretarial Auditor) in Secretarial Audit Report.
Further, the Statutory Auditors have not reported any instances of fraud to the Central Government and Audit Committee as per the provisions of Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.
A report on Corporate Governance along with a certificate from the Auditors of the Company stipulated pursuant to Regulation 34 of the Listing Regulations is annexed as Annexure D to this Report.
There are no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and company's operations in future. During the year under review, there were no proceeding made nor were any pending under the Insolvency and Bankruptcy Code, 2016. Further, the Company had neither borrowed any amount nor were there any pending loans, from any bank, so the question of one time settlement or valuation in this regard, does not arise.
The Company had received eviction notices from the National Insurance Company Limited (NIC), owner of Commercial Union House, property occupied by the Company as its registered office. The status of the matter is dormant since February 2015.
The Company has been engaged in the business of providing Business Centre facilities. During the year under review, there was no change in the nature of the business.
During the year under review, there was no change in the Share capital of the Company.
The Company was not in the Top 1,000 companies as per Market Capitalisation as on March 31, 2023, at
the Stock Exchange where it is listed i.e, BSE Limited. Accordingly, the Company is not required to submit a Business Responsibility and Sustainability Report (which replaces the earlier requirement of a Business Responsibility report) in view of Regulation 34 read with Regulation 3(2) of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015.
The Company is not required to maintain cost records as required pursuant to section 148(1) of the Act.
As per section 6 of the Act, those organizations which have less than ten employees can refer the complaints to Local Complaints Committee instead of constituting Internal Complaints Committee. Since the Company having less than ten employees, Internal Complaints Committee is not constituted by the Company.
However, the Company has not received any complaint of sexual harassment during the financial year 2022-23.
The Institute of Company Secretaries of India has currently mandated compliance with the Secretarial Standards on board meetings and general meetings. The Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
The Board of Directors place on record its appreciation towards all its employees for their services rendered and the members for their constant support and for the faith reposed by them in the Company.
For and on behalf of the Board
Place: Mumbai H. N. Singh Rajpoot Date: May 11, 2023 Chairman
DIN: 00080836