The Directors have pleasure in presenting their 18th Annual Report on
the business and operations of the Company together with the audited
results for the financial year ended 31st March, 2012.
(Rs. in Lacs)
Year ended Year ended
Particulars 31st March,
2012 31st March,
Standalone Consolidated Standalone Consolidated
Gross Turnover 7919.08 6920.30 8830.87 8645.55
Depreciation 741.90 413.25 1707.31 1511.75
Depreciation 385.54 391.18 432.03 437.64
Profit before Tax 80.60 (254.03) 466.06 264.88
taxation 658.26 658.28 451.75 451.75
Profit after tax (577.66) (911.69) 14.31 (193.99)
Transfer to General
Reserve -- -- -- --
Dividend -- -- -- --
Basic (0.83) (1.31) 0.02 (0.28)
Diluted (0.83) (1.31) 0.02 (0.28)
The year was characterized by sustained rise in inflation, as a result
of a sharp increase in the prices of commodities. This was further
exacerbated by the supply side constraints and increased borrowing
costs. Rising interest rates, heavy taxation and soaring costs of raw
materials and production cost has brought the real estate sector under
pressure in the last financial year. Despite of all these odds, your
company could achieve a gross turnover of Rs. 7919.08 lacs as against
Rs. 8830.87 lacs during the previous year.
For a detailed analysis of the performance of the company for the year
under review, please refer to Management''s Discussion and Analysis
section of the Annual Report.
The Board of Directors has not recommended any dividend for the
financial year ended 31st March, 2012. DEPOSITS
During the year under review, the company has accepted fresh deposits
to the tune of Rs. 6.65 lacs and repaid matured deposits to the tune of
Rs. 19.60 lacs. The amount outstanding at the end of the year at
31.3.2012 is Rs. 43.58 lacs (including fresh & renewed deposits). As on
31st March, 2012 an amount of Rs. 0.50 lacs were matured but not
claimed by the depositors. Interest is served regularly as per the
terms of the deposit scheme.
Mr. D.S. Chandra Mohan Reddy, Chairman & Managing Director had expired
on 24.1.2012 and Mr. D. Vijay Sen Reddy is appointed as new Chairman &
Managing Director of the company for 3 years at the board meeting held
Sri D. Chakradhar Reddy, and Sri Rudresh Veerabhadrappa, Directors
retire by rotation at the ensuing Annual General Meeting and being
eligible, offer themselves for reappointment. Your Directors recommend
their re- appointment at the ensuing Annual General Meeting.
Brief resume of the directors proposed to be appointed and
re-appointed, nature of their experience in specific functional areas
are provided in the Corporate Governance report.
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, your Directors
hereby confirm that:
(i) in the preparation of Annual Accounts the applicable accounting
standards have been followed and there has been no material departure;
(ii) the selected accounting policies were applied consistently and the
directors 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 31st March, 2012 and of the loss of the Company on that
(iii) proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956 for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a going concern basis;
PARTICULARS OF SUBSIDIARY COMPANIES - SEC. 212 OF THE COMPANIES ACT,
As on 31.3.2012 your company has 4 subsidiaries viz. Prajay Holdings
Private Limited, Prajay Developers Private Limited (step-down
subsidiary), Prajay Retail Properties Private Limited and Prajay Realty
Your company has decided to close the non-operative subsidiary company
namely Prajay Realty Private Limited. Accordingly, company has
submitted the necessary application as per Sec. 560 of the Companies
Act, 1956 under Fast Track Exit Mode for striking off the name of the
company from the Register of Companies.
As per Section 212 of the Companies Act, 1956, we are required to
attach the Directors'' Report, Balance Sheet, and Profit and Loss
account of our subsidiaries to our annual report. The Ministry of
Corporate Affairs, Government of India vide its circular no.2/2011
dated 8th February, 2011 granted general exemption to holding companies
from the provisions of Sec. 212 of the Companies Act, 1956 subject to
fulfillment of certain conditions mentioned therein. Accordingly the
company has decided not to attach the details of its subsidiaries.
However, a statement containing the financial data of the subsidiaries
has been furnished along with the Statement pursuant to Sec. 212(1)
(e) of the Companies Act, 1956 forming part of Annual Report.
The Annual Accounts of the subsidiaries and related detailed
information will be made available free of cost to any member of the
Company/ its subsidiaries seeking such information at any point of time
and are also available for inspection by any member of the Company/ its
subsidiaries at the registered office of the holding company and of the
subsidiary companies concerned.
CONSOLIDATED FINANCIAL STATEMENTS
The audited consolidated financial statements of the company are
prepared in accordance with the accounting standard AS-21 on
consolidate financial statements read with Accounting Standard AS-23 on
accounting for investments in associates, listing agreement as
prescribed by the Securities and Exchange Board of India.
The Statutory Auditor Mr. S.V. Rangan, Chartered Accountant holds
office until the conclusion of the ensuing Annual General Meeting and
being eligible, is recommended for re-appointment. A certificate from
the auditor has been obtained to the effect that the re-appointment, if
made, would be within the limits as specified under Sec. 224(1B) of the
Companies Act, 1956.
REPORT ON CORPORATE GOVERNANCE
A separate section on corporate governance with a detailed compliance
report thereon is annexed and forms a part of the annual report in
terms of Clause 49 (VI) of the Listing agreement with Stock Exchange.
The Auditors'' Certificate in respect of compliance with the
provisions concerning corporate governance, as required by clause 49 of
the listing agreement is also annexed.
MANAGEMENT DISCUSSION & ANALYSIS REPORT:
A report on management discussion and analysis is given in a separate
section in this Annual Report forming part of the Directors'' Report.
CEO''s DECLARATION AS REQUIRED UNDER CLAUSE 49 OF THE LISTING
Declaration as required under Clause 49(1) (D) (ii) of the listing
agreement with regard to compliance of code of conduct of the company
is annexed to this Report.
PARTICULARS OF EMPLOYEES:
No employee was in receipt of remuneration in excess of the limits
prescribed under Sec. 217(2A) of the Companies Act, 1956 read with the
Companies (Particulars of Employees) Rules, 1975 and hence the
prescribed information is not required to be given.
Employee relations were cordial during the year and the Board would
like to place on record its appreciation to all the employees of the
Company for their continued support and services.
CLARIFICATIONS TO THE OBSERVATIONS MADE IN AUDITORS'' REPORT:
PointNo.4 (a), (b) and (c):
i) Regarding Note 39(a) of the Financial Statements - As a result of
economic slowdown and recession in realty sector the realizations from
customers are slow.
ii) Regarding Note 39(b) of the Financial Statements - The Board has
considered these alterations at the request of the respective customers
and the formal documentation is being completed soon.
iii) Regarding Note 39(c) of the Financial Statements - Due to long
term involvement in such projects, no provision has been considered
Point no. vii of Annexure to Auditors Report:
The Audit Committee had elaborate discussions on the said point. The
company has initiated steps to see that the scope and coverage of
internal audit is increased to commensurate with the nature and size of
the business of the company.
Point No. 3(a), 3(b) and 3(c) of Auditors'' Report on Consolidated
i) Regarding Note 36(a) of the Consolidated Financial Statements - As a
result of economic slowdown and recession in realty sector the
realizations from customers are slow.
ii) Regarding Note 36(b) of the Consolidated Financial Statements - The
Board has considered these alterations at the request of the respective
customers and the formal documentation is being completed soon.
iii) Regarding Note 36(c) of the Consolidated Financial Statements -
Due to long term involvement in such projects, no provision has been
DISCLOSURE OF PARTICULARS:
Information as required under the Companies (Disclosure of Particulars
in the Report of Board of Directors) Rules, 1988, relating to
conservation of energy, technology absorption, foreign exchange
earnings and outgo is furnished below:
Conservation of Energy & Technology Absorption:
Even though the company''s nature of business is construction and
property development, which are not power intensive, the company is
putting every effort to conserve and reduce energy consumption.
Foreign Exchange Earnings and Outgo:
Foreign Exchange Earnings: Rs. Nil
Foreign Exchange Outgo: Rs. 9,34,898/- lacs
Yours directors take this opportunity to thank the financial
Institutions, Banks, Government and semi-Government agencies, suppliers
and regulatory authorities, stock exchanges and all stakeholders for
their continued co- operation and support to the company.
Your Directors also wish to place on record their appreciation for the
continued co-operation and support extended by the customers, vendors,
joint venture partners / associates.
For and on behalf of the Board
Place : Hyderabad D. Vijay Sen Reddy
Date : 31.08.2012 Chairman