Dear Members,

The Director's take pleasure in presenting the 70^th Annual Report together with the Audited Financial Statements for the year ended on 31^st March, 2018.

FINANCIAL RESULTS

(Rs. in Lakh)

The company has adopted Indian Accounting Standards(Ind AS) with effect from 1^st April 2017 pursuant to Ministry of Corporate Affairs notification of the Companies (Indian Accounting Standard) Rules 2015 and the annual accounts for 2017-18 has been drawn in terms of provisions of the Ind AS.

DIVIDEND

In view of the profit accrued during the current year and the consequent fulfillment of the conditions prescribed in section 123(3) of the Companies Act, 2013 read with the Companies (Declaration and Payment of Dividend) Rules, 2014, the Board of Directors' announced an interim dividend @ Rs 5 per ordinary share of Rs 10 and Rs 12.50 per deferred share of Rs 25 in January, 2018. The interim dividend absorbed Rs 156.80 Lakh and Rs 31.92 Lakh as tax on dividend. Another interim dividend at the rate of Rs 80 per ordinary share and Rs 200 per deferred share was announced by the Directors after the close of financial year in April, 2018. This has absorbed Rs 2508.81 Lakh and Rs 515.69 Lakh as tax on dividend.

OPERATIONS REVIEW

The construction activity of the Group Housing Project is progressing satisfactorily despite facing State wide problems in supply of coarse sand in the preceding past. The availability of coarse sand became better after the 2^nd quarter of current financial year 2017-2018. The management is making all effort to complete its current project Tara Towers as per schedule and expects to offer the possession of flats to customers by the last quarter of 2018-2019. We have booked more than 75% of the flats and are very thankful for the trust and faith reposed by the customers in the company. At the same time in the context of plots we have executed sale deeds in favour of customers completing their payments. The company is also constructing 120 LIG/EWS flats for the weaker sections of society as per guidelines of the Govt. in this matter.

The company is also finalising the plans for the next phase of Group Housing Project in 'Shervani Legacy' and we expect that the proposal for the same would be submitted in next one or two months.

MANAGEMENT DISCUSSION AND ANALYSIS

A. Business Overview, Industry Structure and Development

Generally ,in a country like ours, we take the gowth mode of the real estate business for granted. There is no stopping the rising demand due to combination of factors such as migration of public in search of jobs, better life, and consequent increase in income and aspirations of the middle-income service group. But a few years ago urban housing prices fell. And over the last few years the sector experienced a fall or correction in prices, loss of consumer confidence and continues to be sluggish. But the worst seems to be over. While speculators are out of the market and cautious, prices have corrected and genuine buyers are getting better options. The company feels that its reputation backed by quality construction and value pricing will keep its performance ahead of competition.

The relaxation in banking regulations and interest rates has made a positive impact on demand for flats by the middle-income group and the market for this sector is growing. We expect this trend to continue for some time because the middle income group is largest in terms of quantity. Another factor that should have a positive influence on demand is the implementation of RERA which should inspire renewed faith and trust in the public.

B. Outlook on Opportunities, Threats, Risks and Concern

As already explained the real estate industry is showing sign of recovery. However the real estate industry is no exception to risks and threats of business. Among the major areas of risk before the real estate industry is related to supply of raw materials. This can sometimes stall projects and escalate costs wherein both buyers and sellers have to suffer. The shortage of sand for instance is a case in point. Another area is the introduction of RERA and its impact on the sector. This, we will know only in the next few years as it is implemented, understood and adopted. A third area of risk are macro economic factors related to money supply, and so on.

We at 'Shervani Legacy' have been cognizant to minimize the risks and concern of the buyers. We are working hard to win the trust of buyers by hiring respected professionals for guidance, adopting high construction standards, and maintaining our construction schedule and commitments as far as possible. We are continuously working to employ the most efficient systems for procurement and tests of raw materials as well as to optimize the operating efficiency of construction projects.

C. Subsidiary Company

M/s Farco Foods Pvt Limited, the wholly owned subsidiary of your Company manufactured 5052 MT as against the quantity of 5723 MT biscuits in previous year, of Priyagold Brand, on job work basis. The decrease in production is mainly because of adoption of new technical and efficiency methods which took 3 months to implement consequently lower quantity was produced. However we are very hopeful that the plant will yield higher productivity in coming months.

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 controls designed and adopted by the Company are in accordance with the guidelines issued by the Institute of Chartered Accountants of India. The interest of Company and other stake holders is well protected.

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 adheres to the Corporate Governance requirements which have been 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 along with a Certificate of Compliance from the Statutory Auditors is attached with the said separate report which forms integral part of this Director's Report.

EXTRACT OF ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Company (Management & Administration) Rules, 2014 the extract of the Annual Return of the Company in Form MGT-9 is annexed to this report as Annexure A.

BOARD MEETINGS

The calendar of Meetings is prepared and circulated in advance to the Directors. During the year four Board Meetings were convened and details of same are given in the Corporate Governance Report.

DIRECTOR'S 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 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.

BUY BACK OF EQUITY SHARES

In accordance with the provisions of section 68, 69 and 70 of the Companies Act, 2013 read with the Companies (Share Capital and Debenture) Rules, 2014 and the approval granted by SEBI, the company placed an offer before the shareholders to buy back the 2,47,400 Ordinary shares through' Tender Offer Route for Buy Back' mechanism for acquisition of shares through Stock Exchange. Upon close of said buy back offer and the approval granted by SEBI the Company extinguished 1,44,232 nos of Ordinary shares on 27.11.2017. Consequently the Issued, Subscribed and Paidup Equity Share Capital of the Company reduced from 32,60,250 to 31,16,018 shares.

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 Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A meeting of the independent Directors was held on 18^th January 2018.

NOMINATION & REMUNERATION

The Board on the recommendation of the Nomination & Remuneration Committee, considers and approves the appointment of Directors, senior management and decides upon 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. There are no changes among the Board of Directors and Key Managerial Personnel of the Company during the year under review.

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.

There were no related party transactions between the Company and the Promoters, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of Company. 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. 34 attached to the standalone balance sheet. None of the Director's has any pecuniary relationship or transaction vis-a-vis 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. Foreign exchange earning was Nil while outgo was Rs. 8.59 Lakh.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to provisions of section 135 of the Companies Act, 2013, a committee of Board of Directors has been formed and the member of the Committee are:

a. Mr. Mohammad Aslam Sayeed Chairman

b. Mr. Saleem Iqbal Shervani Member

c. Mr. Tahir Hasan Member During the year CSR committee meeting was held on 8^th January 2018, 18^th January 2018 and 20^th March 2018 and as prescribed in section 135(5) of the Companies Act, 2013 a budget of Rs. 10 Lakh was allocated for purpose of CSR and a report on the activities during the current year is attached as Annexure B to 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. Tahir Hasan (DIN:00074282) and Mr. Saeed Mustafa Shervani (DIN:00024390) Directors retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Brief resume of the Directors seeking re-appointment 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 convening the Annual General Meeting.

There are no changes among the Board of Directors and Key Managerial Personnel of the Company during the year under review except for directors re-appointed by rotation.

Pursuant to provisions of section 203 of the Companies Act, 2013 the Key Managerial Personnel of the Company are Mr. S. I. Shervani, Managing Director, Mr. T. Hasan, Chief Financial Officer and Mr. B. K. Misra, Company Secretary. The Directors recommend all the resolutions placed before the Members relating to Directors for their approval.

STATUTORY AUDITORS

In terms of provisions of section 139 and 142 and other applicable provisions, if any, of the Companies Act, 2013 read with The Companies (Audit and Auditors) Rules, 2014 the shareholders in the 69^th Annual General Meeting held on 28.09.2017 have approved the appointment of M/s Gupta Vaish & Co. Chartered Accountants, Kanpur (Firm Registration No. 005087C ) as Statutory Auditors of the Company for a period of 5 years from the conclusion of said Annual General Meeting. However, their appointment as Statutory Auditors of the Company shall be required to be ratified by the Members at the ensuing Annual General Meeting. The Company has received a confirmation from the said Auditors that they are not disqualified to act as the Auditors and are eligible to hold the office as Auditors of the Company. Necessary resolution for ratification of appointment of the said Auditors is included in the Notice of aGm for seeking approval of members.

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 2017-18 is annexed herewith as Annexure-C in Form MR-3 and forms integral part of this Report.

INTERNAL AUDITOR

The Board of Directors on the recommendation of the Audit Committee appointed M/s P. L. Tandon & Co., Chartered Accountants, to carry out the Internal Audit of the Company.

DEPOSITS

During the year under review the Company has not accepted or renewed any deposit falling within the ambit of Section 73 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014, hence 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 applicable accounting standard on consolidated financial statement(s) read with 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 Company Secretary in practice 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 has 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 Work Place (Prevention, Prohibition and Redressal) Act 2013. Till date the company has not received any complaint thereunder.

UNCLAIMED DIVIDEND

Pursuant to provisions of section 124(5) of the Companies Act, 2013 the company has transferred the unpaid or unclaimed dividends for the financial year upto 2009-2010 from time to time on due dates to the Investor Education and Protection Fund (the IEPF) established by the Central Govt.

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.

LISTING WITH 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.

GENERAL

There were no significant material orders passed by the regulators or courts which would impact the going concern status of the Company and its future operations.

There was no change in the nature of business of the company during the year.

ACKNOWLEDGEMENTS

Your Directors wish to convey their deep sense of appreciation for the continued support, and co-operation extended by bankers, Central and State Government 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.

For and on behalf of the Board

Mohd. Aslam Sayeed Saleem I. Shervani

Director Managing Director

DIN : 06652348 DIN : 00023909