Your Directors have pleasure in presenting their 21st Annual Report on the business andoperations of the company together with the Audited Statement of Accounts for the yearended 31st March 2016.
1. Financial Highlights (Standalone and Consolidated)
During the year under review performance of your company standalone and consolidatedof the group is as under:
|Particulars ||Year Ended |
| || |
|31-Mar-15 || |
| || |
|Turnover ||314.69 ||263.14 ||314.69 ||265.94 |
|Profit/(Loss) before taxation ||27.81 ||21.63 ||26.34 ||21.11 |
|Less: Tax Expense ||7.15 ||4.37 ||7.15 ||4.53 |
|Profit/(Loss) after tax ||20.67 ||17.27 ||19.19 ||16.58 |
|Add: Balance B/F from the previous year ||113.25 ||97.37 ||148.08 ||132.58 |
|Balance Profit / (Loss) C/F to the next year ||128.40 ||113.25 ||164.30 ||148.07 |
Operation and Performance Review
During the year under review on standalone basis revenue from operations increased toRs. 315 crores from Rs. 263 crores in the previous year. The EBIDTA for the year was Rs.51.31 Crore as compared to Rs. 39.28 Crore in the previous year which showed a growth of30% and the EBIDTA margin increased from 14.94% in F.Y. 14-15 to 16.29% in the year underreview. The Profit after tax was Rs. 20.67 crore as against Rs. 17.27 Crore for theprevious year. The companys net worth touched Rs. 151 Crore as on 31st March 2016from Rs. 135.28 Crore as on 31st March 2015.
The consolidated revenues for the year under review were Rs. 315 Crore as against Rs.266 Crore in the previous year recording a growth or around 18%. For F.Y. 2015-16 theconsolidated EBIDTA was Rs. 50.49 Crore. The net profit after tax for consolidated companywas Rs. 19.19 Crore. The Companys consolidated net worth increased to Rs.186.90Crore as on March 31 2016 from Rs. 170.11 Crore as on March 31 2015.
In accordance with the Accounting standard AS - 21 on Consolidated FinancialStatements the audited Consolidated Financial statements are also provided along withStandalone Financial Statement in the Annual report.
2. Companys Affairs and Future Outlook
Your Directors are pleased to inform that during the year under report the company hassecured the following major contracts.
Construction of Police Quarters in Dharwad Mangalore Panambur in Karnataka forKarnataka State Police Housing Board & Infrastructure Development Corporation
Construction of Combined Administration Block Quarter Guard Master StoresBarracks Development Works at Kalkiri Chittoor for Engineering Projects India (GoIEnterprise) (Package I)
Construction of Quarters and other infrastructure works for the proposed ITBPcomplex at Kalkiri Chittoor for Engineering Projects India (GoI Enterprise) (Package III)
Construction of various types of residential quarters for NTPL Township atTuticorin (Phase II)
Warehouse Godown for Container Corporation of India
Road Widening & improvement works on NH 17 & NH 48 in identifiedstretches of New Mangalore Port Road Connectivity Project from National Highway Authorityof India
Strengthening of Amarpatan Rampur Road in Madhya Pradesh
Rehabilitation of Bhadrawathi Canal from KNNL
Orders relating to Gauge Conversion works Protective works and other works ofSouthern Railways in certain sections of Tiruvarur- Karaikudi Muthipet &Adirampattinam Stations and Muthipet & Pattukotai Stations.
The total value of works on hand as on March 31 2016 is Rs. 725 Crore.
The Company has a robust business model and is focused on widening its services byventuring in to niche areas/ new sectors/ geographies/ segments and expanding marketreach. The Company lays great significance on ensuring cost competitiveness soundexecution strategies managing volatility control over working capital and effcientcontract management thereby ensuring improved operational effciency.
The Company has already expanded its footprint to Madhya Pradesh and has also enteredin to a Consortium agreement with Siemens Ltd India for submitting a joint bid to PowerGrid Company of Bangladesh in respect of design supply erection testing andcommissioning of 400 KV 230 KV and 132 KV substations on turnkey basis.
Company keeps on looking out for strengthening its project portfolio by addition of newprojects. Company endeavors to encash all opportunity available both in domestic and/ orinternational markets. The progressive revival of economy is indicative that in short termbetter opportunities will be available. For the purpose to undertake new projects yourCompany may need to augment long term financial resources. Even the present projects mayrequire further long term resources for it execution.
Hence your Company may look forward to raise long term resources for strengthening itsproject portfolio further requirement for existing and ongoing projects any plannedcapital expenditure or general corporate requirements. Any such requirement will beassessed by Board of Directors and accordingly such decision including mode of raising ofthe money and nature of securities to be offered will be decided by Board. Furtherincrease of the capital base will also grant the company flexibility to raise additionaldebt.
3. Change in Nature of Business
There was no change in the nature of the business of the Company and its subsidiariesduring the year.
4. Dividend & Amounts Transfer to Reserves
Your Directors are pleased to recommend a dividend of 5% i.e. Re. 0.50 per Equity Shareof face value of Rs. 10/- for the Financial Year 2015-16 subject to the approval of themembers of the Company. The dividend on approval of the shareholder will be paid to theeligible members. The equity dividend outgo for the financial year 2015-16 would absorb asum of Rs. 1.13 Crore. The balance profits of Rs. 19.31 Crore after provision for dividendand dividend distribution tax is proposed to be retained in the Statement of Profit andLoss. Hence no amount is proposed to be transferred to reserves.
5. Extract of Annual Return
The extract of Annual Return in form MGT - 9 for the Financial Year 2015-16 has beenenclosed with this report as Annexure 1.
6. Board of Directors and Meetings of Board
The Board is properly constituted with appropriate mix of executive and independentdirectors to maintain the independence of the Board and to separate the Board functions ofgovernance and management.
Board is properly constituted in compliance to Section 149 of Companies Act 2013 andRegulation 17 of SEBI (LODR) Regulation. The total strength of the Board presently is SixDirectors comprising of Two Executive Promoter Directors One Non-Executive Director andThree Independent Directors with One Women Director on Board. More details about Boardincluding the profile of directors are provided in Corporate Governance Report formingpart of the Board Report.
During the Financial Year 2015-16 four Board meetings were held on 29th May 2015 14thAugust 2015 14th November 2015 and 13th February 2016.
The attendance of directors in the Board Meeting is provided below:
|Name of the Director ||No. of Meetings held ||No. of Meetings Atte nded |
|Mr. P Arulsundaram ||4 ||4 |
|Mrs. A Nithya ||4 ||4 |
|Mr. P Muralidasan ||4 ||4 |
|Mr. A P C Krisshnamoorthy ||4 ||4 |
|Mr. S Swaminathan ||4 ||4 |
|Mr. K Natarajan ||4 ||4 |
7. Loan Guarantees and Investments under Section 186
During the financial year 2015-16 the company has not granted any loan or extended anyguarantee or provided any security in connection with the loans to other companies or madeany investments under Section 186 of the Companies Act 2013 and hence no disclosure isrequired to be made.
Please refer to note no.12 to Notes on Accounts for details of all investments earliermade by the company.
8. Contracts or Arrangements with Related Parties
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 for the Financial Year 2015-16 in the prescribedformat AOC - 2 has been enclosed with this report as Annexure 2.
9. Material Changes Affecting the Financial Position of the Company
There are no material changes affecting the financial position of the Company whichhave occurred between the end of the financial year of the Company i.e. 31st March 2016and the date of the Directors Report.
10. Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo
Information as per the Section 134 (3) (m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts) Rules 2014 relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and outgo has been enclosed with thisreport as Annexure 3.
As required under the Section 129(3) of Companies Act 2013 and Regulation 34(2) ofSEBI (LODR) Regulation 2015 a consolidated financial statement duly audited by theStatutory Auditors forms part of this report.
The Company will provide a copy of financial statements in respect of each of itssubsidiary to any shareholder of the Company who asks for it and the said financialstatements will also be kept open for inspection at the registered offce of the Companyand that of the respective subsidiary companies.
Further as required a statements pursuant to Section 129(3) read with rule 5 ofCompanies (Accounts) Rules 2014 of the Companies Act 2013 in form AOC-1 is attached withthis report as Annexure 4.
As of 31st March 2016 the list of subsidiaries of your company is as follows:
1. R.P.P Infra Projects (Lanka) Limited
2. R.P.P Infra Overseas PLC
3. R.P.P Infra Projects Gabon SA
4. R.P.P Energy Systems Private Limited
5. Sanskar Dealcom Private Limited
6. Greatful Mercantile Private Limited
7. Lunkar Finance Private Limited
A detailed overview of the operations and financial performance of the Subsidiary isprovided in the Management Discussion and Analysis Report forming part of the BoardReport.
A copy of the Policy determining material subsidiaries has been hosted onthe website of the Company at the weblink http://www.rppipl.com/
The Company does not have any Associate or joint venture.
12. Risk Management Policy
In todays economic environment Risk Management is a very important part ofbusiness. The main aim of risk management is to identify monitor and take precautionarymeasures in respect of the events that may pose risks for the business. The Committee hadformulated a Risk Management Policy for dealing with different kinds of risks which itfaces in day to day operations of the Company. Risk Management Policy of the Companyoutlines different kinds of risks and risk mitigating measures. The risks are reviewed forthe change in the nature and extent of major risks identified since the last assessment.It also provides control measures for risks and future action plans. The Board issatisfied that there are adequate systems and procedures in place to identify assessmonitor and manage risks. The Company believes that the overall risk exposure of presentand future risks remains within risk capacity.
The details about composition of the Risk Management Committee Policy and its terms ofreference have been provided in the Corporate Governance Report.
13. Directors and Key Managerial Personnel
All the existing directors continue in the Board and no change has taken place in Boardduring the year. Mr. K Jayanthar has been appointed as Company Secretary w.e.f. 29th May2015. Mrs. A Nithya (DIN 00125357) Director of the Company retires by rotation and beingeligible offers herself for re-appointment and same will be for the consideration ofmembers in the Annual General Meeting of the Company.
Mr. P Arulsundaram (DIN 00125403) is Chairman and Managing Director of the Company andhas been appointed for a period of three years w.e.f. 1st April 2014. He is not liable toretire by rotation.
Mrs. A Nithya (DIN 00125357) is Whole-time Director and Chief Financial Officer of theCompany and has been appointed for a period of three years w.e.f. 1st April 2014. She isliable to retire by rotation.
Mr. P Muralidasan (DIN 02186774) Non-Executive Director of the Company liable to retireby rotation.
The shareholders of the Company have appointed Mr.
K Natarajan (DIN 03638450) Mr. S Swaminathan (DIN 02800432) and Mr. A P CKrisshnamoorthy (DIN 02181130) as Independent directors of the Company to hold offce forfive consecutive years from the conclusion of the 19th Annual General Meeting dated 8thSeptember 2014 of the Company.
Mr. K Jayanthar has been appointed as Company Secretary w.e.f. 29th May 2015 as perprovisions of Section 203 of the Companies Act 2013.
14. Significant and material orders passed by the regulators courts or tribunals
There are no significant material orders passed by the Regulators / Courts / tribunalswhich impact the going concern status of the Company and its future operations.
15. Statement in Respect of Adequacy of Internal Financial Control with Reference tothe Financial Statements
A robust system of internal control commensurate with the size and nature of itsbusiness forms an integral part of the Companys corporate governance policies.Internal Audit has been conducted by qualified outside Internal Auditors. Findings of theInternal Audit report are reviewed by the Management and by the Audit committee of theBoard and proper follow up action are ensured wherever required. The Statutory Auditorshave evaluated the system of internal controls of the Company and have reported that thesame are adequate and commensurate with the size of the company and nature of itsbusiness.
Internal Financial Controls
As per Section 134(5) (e) of the Companies Act 2013 the Directors have an overallresponsibility for ensuring that the Company has implemented robust systems and frameworkof internal financial controls.
These include those policies and procedures that: i. pertain to the maintenance ofrecords which in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company
ii. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of the financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures are being made only in accordance withauthorizations of the Management and the Directors of the Company and
iii. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the assets that can have a material effecton the financial statements.
This provides the Directors reasonable assurance regarding the adequacy and operatingeffectiveness of controls with regards to reporting operational and compliance risks toenable them to meet these responsibilities. The Company has devised appropriate systemsand framework including proper delegation of authority policies and procedures effectiveIT systems aligned to business requirements Internal audit framework risk managementframework and whistle blower mechanism.
The Audit committee regularly reviews the internal control system to ensure that itremains effective and aligned with the business requirements where weaknesses areidentified as a result of the reviews new procedures are put in place to strengthencontrols. These are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing effectiveness ofinternal controls over financial reporting and has already laid down entity level policiesand process level standard operating procedures.
The entity level policies comprise anti-fraud policies (code of conduct includingconflict of interest confidentiality and whistle blower policy) and other policies(organization structure roles and responsibilities insider trading policy related partypolicy prevention of sexual harassment policy risk management policy policy formateriality of information or events and policy for preservation of documents). TheCompany has also prepared Standard Operating Practices for each of its processes ofrevenue to receive procure to pay hire to retire finance and accounts fixed assetstreasury inventory operations and administrative expenses.
The Management assessed the effectiveness of the internal financial controls overfinancial reporting as of 31st March 2016 and the Board believes that the controls areadequate.
The Company has not accepted any deposits from members or public in terms of Section 73or Section 76 of the Companies Act 2013.
17. Declaration by Independent Director
The Independent Directors have submitted the declaration of Independence stating thatthey meet the criteria of independence as provided in Section 149(6) of the Companies Act2013.
18. Receipt of any commission by MD / WTD from Company or receipt of commission /remuneration from subsidiary
MD/WTD are not in receipt of any commission from Company or any commission/remunerationfrom subsidiary.
19. Auditors Remark
There are no qualifications or reservation or remarks made by the Auditors in theirStandalone Audit Report. Further there are no qualifications or reservation or remarksmade by the Auditors in their Consolidated Audit Report. However Auditor has made adisclaimer that out of five subsidiaries whose accounts have been consolidated one ofthe subsidiary Companies Auditors Report have not been provided to him. Board will like toclarify that financial account for subsidiary based at Mauritius namely R.P.P InfraOverseas PLC was duly audited before the date of audit report of the Company however dueto some logistic problem the same could not be provided to Statutory Auditor at the timeof Audit. The Auditors Report of R.P.P Infra Overseas PLC Mauritius does not contain anyqualification/ reservation.
20. Appointment of Independent Auditor
The Shareholders of the Company at the Annual General Meeting held on 14th September2015 have appointed M/s. Karthikeyan & Jayaram Chartered Accountants as StatutoryAuditors of the Company.
The term of M/s. Karthikeyan & Jayaram Chartered Accountants and StatutoryAuditors will expire on the date of 21st Annual General Meeting to be held on 9thSeptember 2016.
As per the requirement of Section 139(2) of the Companies Act 2013 and rules madethere under for the listed entity and with a view to provide rotation of IndependentAuditors
Company proposes to appoint M/s. Sundaram & Narayanan Chartered Accountants asStatutory Auditors in the ensuing Annual General Meeting for a period of five year i.e.until the conclusion of the next Annual General Meeting of the Company. The members arerequested to consider their appointment and authorize the Board of Directors to fix theirremuneration.
The Audit Committee recommended to the Board to appoint M/s. Sundaram & NarayananChartered Accountants as Statutory Auditors in the ensuing Annual General Meeting for aperiod of five years and authorize to fix their remuneration by the Board of Directors.
M/s. Sundaram & Narayanan Chartered Accountants (ICAI Firm Regn. No.004204S) haveconfirmed that their appointment if made shall be in accordance with the provisions ofSection 139 of the Companies Act 2013.
21. Cost Auditor
As per the requirement of Section 148 of the Companies Act 2013 the Board ofDirectors on the recommendation of Audit Committee has appointed Mr. S ChandrasekaranCost Accountant as Cost Auditor to audit the cost accounts of the Company for thefinancial year 2015-16 at a remuneration of Rs.350000/- (Rupees Three Lakh FiftyThousand) plus service tax applicable and reimbursement of out of pocket expenses. Asrequired under the Companies Act 2013 a resolution seeking members approval forthe remuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting.
22. Secretarial Audit Report
As per the provisions of Section 204 of the Companies Act 2013 the Board of Directorshave appointed Mr. Gouri Shanker Mishra Practicing Company Secretary (C.P. No: 13581) asSecretarial Auditor to conduct Secretarial Audit of the company for the Financial yearended on 31st March 2016.
Secretarial Audit Report issued by Mr. Gouri Shanker Mishra Practicing CompanySecretary in form MR-3 pursuant to Section 204(1) of the Companies Act 2013 and Rule No.9of the Companies (Appointment and Remuneration Personnel) Rules 2014 has been enclosedwith this report as Annexure 5.
Apart from one observation there were no qualifications reservations or adverseremarks made by the Secretarial Auditor in his Secretarial Audit Report. Due to oversightthe filing of the Cost Audit Report was missed and same will be filed without delay.
23. Audit Committee
As required under Section 177 of Companies Act 2013 and SEBI (LODR) Regulation 2015Company has constituted Audit Committee. The details about composition of the AuditCommittee and its terms of reference have been provided in the Corporate GovernanceReport.
There were no such incidences where Board has not accepted the recommendation of theAudit Committee during the year.
24. Corporate Social Responsibility (CSR) Policy
The Board of Directors of the Company have constituted Corporate Social ResponsibilityCommittee and adopted policy for Corporate Social Responsibility. The Committee definesthe parameters and would observe them for effective discharge of the social responsibilityof your company.
Report on Corporate Social Responsibility including details as Per Rule 8 of Companies(Corporate Social Responsibility Policy) Rules 2014 is enclosed with this report as Annexure- 6.
25. Nomination & Remuneration Committee
The Company strongly believes that human resources which manage the other resourceshave infinite potential and therefore their development is the key to organizationaleffectiveness. We commit ourselves to integrate human resources with Organizational growthand development for mutual benefit. The Nomination and Remuneration Policy has beenformulated in compliance with Section 178 and other applicable provisions of the CompaniesAct 2013 read with the applicable rules thereto and the provisions of SEBI (LODR)Regulation 2015.
The details about composition of the Nomination and Remuneration Committee Policy andits terms of reference have been provided in the Corporate Governance Report.
26. Performance Evaluation
Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulation 2015the Board has carried out an annual performance evaluation of its own performance thedirectors individually including independent directors as well as the evaluation of theworking of its Committees i.e. Audit and Nomination & Remuneration Committees.
A structured format was prepared to rate after taking into consideration inputsreceived from the Directors covering various aspects of the Boards functioning suchas adequacy of the composition of the Board and its Committees Board culture executionand performance of specific duties obligations and governance.
A separate exercise was carried out to evaluate the performance of independentDirectors. The performance evaluation of the Independent Directors was carried out by theentire Board. The performance evaluation of the Chairman and the Non Independent Directorswas carried out by the Independent Directors.
The mechanism for the evaluation of the Board is given in detail in the CorporateGovernance Report.
27. Disclosure on Establishment of a Vigil Mechanism
The Board of Directors have adopted Whistle Blower Policy. The Whistle Blower Policyaims for conducting the affairs in a fair and transparent manner by adopting higheststandards of professionalism honesty integrity and ethical behavior. Directors and allpermanent employees of the Company are covered under the Whistle Blower Policy. Amechanism has been established for directors/ employees to report concerns about unethicalbehavior actual or suspected fraud or violation of Code of Conduct and Ethics. It alsoprovides for adequate safeguards against the victimization of directors/ employees whoavail of the mechanism and allows direct access to the Chairperson of the audit committeein exceptional cases. A copy of the Whistle Blower Policy is also hosted on the website ofthe Company.
28. Corporate Governance
As per Schedule V of SEBI (LODR) Regulation 2015 a separate section on corporategovernance practices followed by the Company report on Corporate Governance together witha certificate confirming compliance and CEO/CFO certificate by Managing Director and ChiefFinancial Officer forms an integral part of this Directors Report.
29. Managerial Remuneration
Statistical Disclosures pursuant to Rule 5 of Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 has been enclosed with this report as Annexure 7.
30. Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013
The Company has adopted policy on Prevention of Sexual Harassment of Women at Workplacein accordance with The Sexual Harassment of Women at Workplace (Prevention
Prohibition and Redressal) Act 2013 and has also created an Internal ComplaintsCommittee headed by Mrs. A Nithya Whole-time Director of the Company who directly reportsto the Chairman & Managing Director. During the financial year ended 31st March 2016the Company has not received any complaints pertaining to sexual harassment. A copy of thePolicy on Sexual Harassment is also hosted on the website of the Company.
31. Management Discussion and Analysis Report
As per Regulation 34(3) & Schedule V of SEBI (LODR) Regulation 2015 a separatesection on Management Discussion and Analysis Report forms an internal part of thisDirectors Report.
32. Directors Responsibility Statement
In accordance with the provisions of Section 134(5) of the Companies Act 2013 yourdirectors confirm that:
a) in the preparation of the annual accounts for the financial year ended 31st March2016 the applicable accounting standards had been followed along with proper explanationrelating to material departures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2016 and of the profit/loss of the Company for that period;
c) the directors had taken proper and suffcient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities;
d) the directors had prepared the annual accounts on a going concern basis;
e) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
f) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
Transfer to Investor Education and Protection Fund
Company doesnt have dividend remaining unclaimed by the members of the companyfor a period exceeding 7 years hence no amount was transferrable to the InvestorEducation and Protection Fund.
Your Directors take this opportunity to offer their sincere thanks to the variousdepartments of the Central and State Governments Government agencies Banks FinancialInstitutions shareholders customers and employees who through their continued supportand co-operation have helped in your Companys progress.
| ||For and on behalf of the Board of Directors |
| ||P Arulsundaram |
| ||Chairman & Managing Director |
| ||DIN 00125403 |
|Place: Erode || |
|Date: May 27 2016 || |