Likhitha Infrastructure Ltd.
|BSE: 543240||Sector: Infrastructure|
|NSE: LIKHITHA||ISIN Code: INE060901019|
|BSE 00:00 | 20 May||273.55||
|NSE 00:00 | 20 May||274.30||
|Mkt Cap.(Rs cr)||540|
|Mkt Cap.(Rs cr)||539.71|
Likhitha Infrastructure Ltd. (LIKHITHA) - Director Report
Company director report
The Board of Directors ("Board") of Likitha InfrastructureLimited ("Company" or "LIL") with immense pleasure present the 22ndAnnual Report together with the audited financial statements of the Company for thefinancial year (FY) ended March 31 2021.
The audited financial statements of your Company as on March 31 2021prepared in accordance with the relevant applicable IND AS and Regulation 33 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 ("SEBI ListingRegulations") and provisions of the Companies Act 2013 forms part of this AnnualReport.
The summary of the audited financial results i.e. Statement of Profitand Loss for the year ended March 31 2021 of the Company is as follows:
(Amount in Lakhs)
RESULTS OF OPERATIONS AND STATE OF AFFAIRS OF THE COMPANY:
The key aspects of your Company's performance during the financialyear 2020-21 are as follows:
For FY 2020-21 Revenue from Operations increased by 18.22%Y-o-Y to H 190.62/- Crores vs H 161.23 Crores.
For FY 2020-21 operating EBITDA also increased by 32.91% Y-o-Yto H 41.50 Cr. vs H 31.22 Cr.
For FY 2020-21 PAT also increased by 43.63% Y-o-Y to H28.98 Crores vs H 20.18 Crores.
CHANGE IN NAME OF THE COMPANY
During the year under review there was no change in the name of theCompany.
DIVIDEND / APPROPRIATION TO RESERVES
Your directors recommended a dividend of 15% (Rs. 1.50/- per Equity Shareof Rs. 10/- each) out of the profits of the Company for the FY 2020-21. The said dividendif approved by the shareholders would involve a cash outflow of Rs. 2.96 Crores includingtax thereon.
The Dividend Distribution Policy of the Company is set out as Annexure-IX to this report and the same is uploaded on the Company's website athttp://likhitha.co.in/investors.html.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTIONFUND
The provision of Section 125 of Companies Act 2013 is not applicableas the Company did not declare any dividend.
During the year under review the Company has not accepted any fixeddeposits within the meaning of Section 73 of the Companies Act 2013 and the rules madethere under.
CHANGE IN THE NATURE OF BUSINESS
During the year under review there was no change in the nature ofbusiness of the Company.
SHIFTING OF REGISTERED OFFICE
The Registered Office of the Company has been shifted within the locallimits of the city from Flat No. 701 Plot No. 8-3-940 and 8-3-94/A to E Tirumala ShahResidency Yellareddy Guda Ameerpet Hyderabad Telangana- 500 073 to 8-3-323 9thFloor Vasavi's MPM Grand Ameerpet 'X' roads Yellareddy Guda HyderabadTelangana- 500073 w.e.f. October 31 2020.
As on March 31 2021 the Authorised Share Capital of the Company isRs. 200000000/- (Rupees Twenty Crores Only) divided into 20000000 (Two Crores Only)Equity Shares of Rs. 10/- (Rupees Ten Only) each. The paid-up share capital isRs.197250000/- (Rupees Nineteen Crore Seventy-Two Lakh Fifty Thousand Only) dividedinto 19725000/- (One Crore Ninety-Seven Lakh Twenty-Five Thousand Only) of Rs. 10/-(Rupees Ten Only) each.
Listing of Equity Shares
Pursuant to provisions of Companies Act 2013 SEBI (Issue of Capitaland Disclosure Requirements) Regulations 2018 and other rules and regulations asapplicable and upon receipt of regulatory approvals Company has allotted 5100000(Fifty-One Lakhs Only) Equity Shares issued through Initial Public Officer (IPO).
The securities of the Company are listed on the BSE Limited andNational Stock Exchange of India Limited on October 15 2020. Further the Company has noequity shares carrying differential voting rights.
The Company has utilised the proceeds of the Initial Public Offer (IPO)for the purpose for which funds have been raised. As on
March 31 2021 there was an unutilized amount of 42.65 Lakhs for thepayment of commissions and brokerages to ASBA brokers. There was no deviations in theutilization of proceeds of IPO.
MATERIAL CHANGES AFFECTING THE COMPANY (AFTER CLOSURE OF FINANCIALYEAR)
Due to outbreak of Covid-19 globally and in India the Company'smanagement has made initial assessment of likely adverse impact on business and financialrisks on account of Covid-19 and that the management does not see any medium to long termrisks in the Company's ability to continue as a going concern and meeting itsliabilities and compliance with the project timelines as applicable.
There was all-round lock-down imposed by the Government of India onpandemic situation due to COVID-19 which impacted the operations for the months of MarchApril and May 2020. Thereafter operations of the projects have started in slow phase dueto non-attendance of employees on various apprehensions of pandemic situation. Howeverduring the second quarter the Company could be abled to resume the operations at allsites.
The Company may not have any impact due to delay in execution ofcontracts as all the Contracees have extended the period of contracts as per thedirections of the Government of India. However due to this pandemic situation theexpenses are expected to increase as the Company needs to take-up various measures such asregular tests and providing medical facilities to the workmen.
Other than the above no material changes happened after the closure offinancial year which have any significant influence on the financial statements of theCompany.
Please see the changes in directors and auditors' sections belowfor the changes occurred subsequent to the closure of the financial year.
BUSINESS RESPONSIBILITY REPORT:
Pursuant to Clause 34(2)(f) of the SEBI (LODR) Regulations 2015Business Responsibility Report being applicable to the Company forms part of the BoardReport as Annexure-VII.
MANAGEMENT AND DISCUSSION ANALYSIS
The Management Discussion and Analysis Report for the year under reviewas stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015is presented in a separate section forming part of this annual report.
CONSOLIDATED FINANCIAL STATEMENTS
The Company is not statutorily required to be in compliance with therequirements of "Consolidated Financial Statements" disclosure.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
i. In preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures; ii. The directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year and of the profit and loss of the company for that period;
iii. The directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
iv. The directors have prepared the annual accounts on a going concernbasis;
v. The directors have laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and areoperating effectively; vi. The directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems are adequate andeffective.
Further there are no more qualifications reservations or adverseremarks made by the statutory auditor/secretarial auditor in their respective reports.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on March 31 2021 the Board consists of Seven (07) Directorsincluding three (03) Independent Directors three (03) Non-Independent Non-ExecutiveDirectors and One (01) Executive Director. None of the Directors on the Board aredisqualified under the provisions of the Companies Act 2013.
Further Ms. Jayashree Voruganty was co-opted as Additional Director(Independent Director) of the Company with effect from April 10 2021.
The following are the changes that occurred in the composition of theBoard and Key Managerial Personnel from April 1 2020 till the date of this report.
Retirement by Rotation
Mrs. Srilakshmi Gaddipati (DIN: 02250598) Non-Executive Director willretire by rotation at the ensuing Annual General Meeting. Being eligible she offersherself for re-appointment.
Key Managerial Personnel
Mr. Srinivasa Rao Gaddipati Managing Director Mr. Sambasiva RaoKetineni Chief Financial Officer Mr. Sudhanshu Shekhar Chief Executive Officer and Mr.Santhosh Kumar Gunemoni Company Secretary and Compliance Officer are Key Managerial
Personnel of the Company in accordance with the provisions ofSection(s) 2(51) and 203 of the Companies Act 2013 read with the Companies (Appointmentand Remuneration of Managing Personnel) Rules2014.
Meetings of the Board
During the year 12 (Twelve) Board Meetings were properly convenedconstituted and conducted as per the Standards as forth in the Secretarial Standard I. The maximum gap between two consecutive board meetings was within the periodof 120 days as prescribed under the provisions of the Companies Act 2013.
INDEPENDENT DIRECTORS' DECLARATION
Each of the Independent Directors of the Company have submitteddeclaration pursuant to Section 149(7) of the Companies Act 2013 ("the Act")stating that they meet the criteria of independence as laid down in Section 149(6) of theCompanies Act 2013.
COMMITTEES OF BOARD:
As on March 31 2021 the Board constituted the Audit CommitteeNomination and Remuneration Committee Corporate Social Responsibility (CSR) CommitteeStakeholder Relationship Committee and Initial Public Offer Committee. A detailed note onthe composition of the Board and its committees is provided in the Corporate GovernanceReport.
A Risk Management Committee has been constituted by the Board ofDirectors as per the terms of Regulation 21 of SEBI (LODR) Regulations 2015 to monitorand review the major risks faced by and the risk management plan of the Companyperiodically.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHERDETAILS
The Nomination and Remuneration Committee has adopted a policy as perSection 178(3) of the Companies Act2013 for determination of remuneration and the mannerof selection of the Board of Directors Managing Director Chief Executive Office ChiefFinancial Officer and Company Secretary and their remuneration.
Criteria for selection of Non-Executive Director
The Non-Executive Directors shall be of high integrity withrelevant expertise and experience in the fields of Service Industry ManufacturingMarketing Finance and Taxation Law Governance and General Management.
In case of appointment of independent directors the committeeshall satisfy itself with regard to the criteria of independence of the directorsvis--vis the company so as to enable the board to discharge its function and dutieseffectively.
The committee shall ensure that the candidate identified forappointment as a director is not disqualified for appointment under Section 164 of theCompanies Act2013.
The committee shall consider the following attributes whilstrecommending to the board the candidature for appointment as director:
Personal professional or business standing;
Diversity of the Board;
In case of re-appointment of Non-Executive Directors the Boardshall take into consideration the performance evaluation of the Directors and theirengagement level;
The Non-Executive Directors shall not be entitled to receiveremuneration except by way of sitting fees reimbursement of expenses for participation inthe board/committee meetings and commission if any as approved by the Board ofDirectors. The independent directors of the company shall not be entitled to participatein the Stock Option Scheme of the company. The aggregate commission payable if any to theNon-Executive Directors will be within the statutory limits.
Criteria for selection/appointment of Managing Director ExecutiveDirector (CEO CFO and CS)
For the purpose of selection of the Managing Director Chief ExecutiveOffice Chief Financial Officer and Company Secretary the Committee shall identify personsof integrity who possess relevant expertise experience and leadership qualities requiredfor the position.
The Committee will also ensure that the incumbent fulfils such othercriteria with regard to age and other qualifications as laid down under Companies Act2013 or other applicable laws.
Remuneration to Managing Director and Executive Director
At the time of appointment or re-appointment the ExecutiveDirector and Managing Director shall be paid such remuneration as may be mutually agreedbetween the Company (which includes the Committee and the Board of Directors) and theExecutive Director/ Managing Director within the overall limits prescribed under theCompanies Act 2013.
The remuneration shall be subject to the approval of the membersof the Company in General Meeting in compliance with the provisions of the Companies Act2013.
Remuneration Policy for the Senior Management Employees including CEOCFO & CS
In determining the remuneration of Senior Management Employees thecommittee shall ensure/consider the following:
The relationship between remuneration and performance benchmark;
The balance between fixed and variable pay reflecting short andlong-term performance appropriate to the working of the company and its goals as mutuallyagreed.
The policy relating to remuneration of Directors Key ManagerialPersonnel Senior Management and other employees is available on the website of theCompany http://likhitha.co.in/ img/content/policies/Nomination_and_Remuneration_Policy.pdf
BOARD EVALUATION AND ASSESSMENT
The Board of Directors has carried out an annual evaluation of its ownperformance Board committees and individual Directors pursuant to the provisions of theSections 134 178 and Schedule IV of the Companies Act 2013. Evaluation was done aftertaking into consideration inputs received from the Directors covering various aspects ofthe Board's functioning such as adequacy of the composition of the Board and itsCommittees performance of specific duties independence ethics and values attendanceand contribution at meetings etc.
The performance of the Independent Directors was evaluated individuallyby the Board after seeking inputs from all the directors on the effectiveness andcontribution of the Independent Directors.
The performance of the Committees was evaluated by the Board afterseeking inputs from the Committee members based on the criteria such as the composition ofCommittees effectiveness of Committee meetings etc.
The Board reviewed the performance of the individual Directors on thebasis of the contribution of the individual Director during Board and Committee meetings.
In a separate meeting of Independent Directors performance ofNon-Independent Directors and the performance of the Chairman was evaluated taking intoaccount the views of executive directors and non-executive directors. The IndependentDirectors also assessed the quality frequency and timeliness of flow of informationbetween the Board and the management that is necessary for effective performance.
Your company will continue to uphold the true spirit of CorporateGovernance and implement the best governance practices. A report on Corporate Governancepursuant to the provisions of Corporate Governance Code stipulated under SEBI (ListingObligations and Disclosure Requirements) Regulations2015 is enclosed as Annexure- VIII.Full details of the various board committees are also provided therein along withSecretarial Auditors' Certificate regarding compliance of conditions of corporategovernance.
AUDITORS AND AUDITORS' REPORT
M/s. NSVR & Associates LLP are appointed as the statutory Auditorsof the Company with effect from September 30 2019 till the conclusion of 25th AnnualGeneral Meeting of the Company. They have confirmed their eligibility for the financialyear 2021-22 under Section 141 of the Companies Act 2013 and the Rules framed thereunder.
M/s. Mukul Tyagi & Associates Chartered Accountants New Delhi wasappointed as Internal Auditor of the Company for the FY 2020-21. The Board hasre-appointed the firm as Internal Auditor for the FY 2021-22.
M/s. VCAN & Associates Partnership Firm Practising CompanySecretaries Hyderabad was appointed as Secretarial Auditors of the Company for the FY2020-21. The Board has re-appointed the firm as Secretarial Auditors for the FY 2021-22.
M/s. VCAN & Associates Practising Company Secretaries wereconducted the Secretarial Audit for FY 2020-21 and the Secretarial Audit Report in form MR-3forms part of this Report as Annexure-VI.
QUALIFICAIONS IN AUDITORS REPORT:
COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSEREMARK OR DISCLAIMERS:
As there is no qualification reservation or adverse remark in thereports given by the Internal Auditors and Statutory Auditors your directors need notprovide any clarification on the same.
Internal Audit Report:
There are no qualifications or adverse observations in the InternalAudit Report issued by the Internal Auditors for the financial year ended March 31 2021.
Secretarial Audit Report:
There are no qualifications or adverse observation in the SecretarialAudit Report issued by the Secretarial Auditors for the financial year ended March 312021.
The Company confirms compliance with the requirements of SecretarialStandard I and Secretarial Standard II.
Pursuant to Regulation 21(4) of SEBI (LODR) Regulations 2015 theBoard of Directors has formulated and implemented a
Risk Management Policy which identifies various elements of riskswhich in its opinion may threaten the existence of the Company and contains measures tomitigate the same. The Risk Management Policy of the Company is posted on theCompany's website: www.likhitha.co.in.
A Risk Management Committee has been constituted as per the terms ofRegulation 21 of SEBI (LODR) Regulations 2015 to monitor and review the major risks facedby and the risk management plan of the Company periodically.
In accordance with Section 134(3)(a) of the Companies Act 2013 anextract of the Annual Return of the company for the financial year ended 31st March2021is enclosed as "Annexure-I".
The extract of the Annual Return of the company is also hosted on thecompany's website at http://likhitha.co.in/investors.html.
HOLDING SUBSIDIARIES ASSOCIATE COMPANIES AND JOINT VENTURES
During the period under review Company has no subsidiaries orAssociate Companies or Joint ventures.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Companyduring the FY 2020-21 with related parties were in the ordinary course of business and onan arm's length basis. During the year the Company had not entered into any contract/ arrangement / transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactions.The details of the related party transactions entered into during the year are given inform AOC-2 as "Annexure II" to this report.
The Policy on related party transactions as approved by the Board maybe accessed on the Company's website: https://likhitha.co.in/.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Board of Directors constituted Corporate Social Responsibility(CSR) Committee in accordance with the provisions of section 135 of the Companies Act2013. The Board on the recommendation of CSR Committee and in compliance with the policyon Corporate Social Responsibility invested the CSR Fund by contributing to activitiesrelated to promoting education including special education and employment enhancingvocation skills especially among children women elderly and such other activities asspecified in Schedule VII of the Companies Act 2013. The Annual Report on CSR activitiesis enclosed as "Annexure III" to this Annual Report.
INTERNAL FINANCIAL CONTROL
The Company has laid down internal financial controls through Entitylevel controls inter-alia to ensure orderly and efficient conduct of business includingadherence to Company's policies and procedures accuracy and completeness ofaccounting records and timely preparation and reporting of reliable financialstatements/information safeguarding of assets prevention and detection of frauds anderrors.
The Board of Directors of the Company have adopted various policieslike Related Party Transactions policy Whistle Blower Policy code of conduct forregulating monitoring and reporting insider trading and such other procedures forensuring the orderly and efficient conduct of its business prevention and detection offrauds and errors accuracy and completeness of the accounting and timely preparation offinancial information.
Based on the requirements under SEBI (Prohibition of Insider Trading)Regulations 2015 the Board has approved the code of conduct for prohibition of insidertrading and the same is being implemented by the Company. The board has appointed Mr.Santhosh Kumar Gunemoni Company Secretary as the Compliance Officer under the code.
In pursuance to the Provisions of the Section 177(9) & (10) of theCompanies Act 2013 and Regulation 22 of SEBI (LODR) Regulations2015 a vigil mechanismnamed "LIL Whistle Blower Policy" for Directors and employees to report genuineconcerns has been established. The policy on whistle mechanism can be accessed at websiteof the Company: https://likhitha.co.in/.
The policy lays down a framework and process which provides a platformto disclose information confidentially and without fear of reprisal or victimizationwhere there is reason to believe that there has been serious malpractice fraudimpropriety abuse or wrongdoing grievances about leakage of unpublished price sensitiveinformation (UPSI) illegal and unethical behaviour within the Company to the Chairman ofthe Audit Committee.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
During the period under review the Company has not provided any loans/investments which come under the provisions of section 186 of the Companies Act 2013.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo stipulated under Section 134(3)(m) of the CompaniesAct 2013 read with Rule 8 of The Companies (Accounts)Rules 2014 is given in "Annexure-IV" to this report.
PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE POLICY
The Company has zero tolerance for sexual harassment at workplace andhas adopted a policy on prevention prohibition and Redressal of sexual harassment atworkplace in line with the provisions of Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the rules framed thereunder.
The Company has duly constituted an Internal Complaints Committee (ICC)as required under Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013.
The present composition of ICC is as under:
The disclosure pertaining to Complaints are given under:
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197(12) of the Companies Act2013 read with Rule 5 of The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 (including amendments thereto) is attached as "Annexure V"to this Report.
The Company considers its Human Resource as the key to achieve itsobjectives. HR and Project Department creates all strategies along with Senior Managementand Board of Directors to attract talent and build capabilities. The employees aresufficiently empowered and enabled to work in an environment that inspires them to achievehigher levels of performance. The unflinching commitment of the employees is the drivingforce behind fulfilling the Company's vision. Your Company appreciates thecontribution of its dedicated employees.
In this extraordinary year company continued to stay focused on thehealth and wellbeing of its employees through multiple measures such as distribution ofrapid test kits as when required setting up of quarantine facilities hospital admissionassistance and financial aid to the employees who has tested positive etc. The Companytook various initiatives to keep the employees productive and engaged with virtualmeetings with project managers and site engineers.
I. Your directors state that no disclosure or reporting is required inrespect of following items as there were no transactions on these items during the yearunder review:
a) Issue of equity shares with differential voting rights as todividend voting or otherwise.
b) Issue of shares (including sweat equity shares) to employees of theCompany under any scheme.
c) No significant or material orders passed by the Regulators or Courtsor Tribunals which impact the going concern status and Company's operations infuture.
d) No frauds were reported by the Auditors during the year underreview.
e) Maintenance of Cost Records as specified by the Central Governmentunder Section 148(1) of the Companies Act 2013 is not required by the Company.
Your directors thank the lenders banks financial institutionsbusiness associates customers Government of India State Governments in Indiaregulatory and statutory authorities shareholders and the society at large for theirvaluable support and co-operation.
Your directors also thank the employees of the Company for theircontinued contribution commitment and dedication.