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Perfect Infraengineers Ltd.

BSE: 532595 Sector: Engineering
NSE: PERFECT ISIN Code: INE925S01012
BSE 05:30 | 01 Jan Perfect Infraengineers Ltd
NSE 05:30 | 01 Jan Perfect Infraengineers Ltd

Perfect Infraengineers Ltd. (PERFECT) - Director Report

Company director report

Your Directors take pleasure in presenting the 25th AnnualReport together with the Audited Financial Statements for the Financial Year ended March31 2021. The consolidated performance of the Company and its subsidiaries has beenreferred to wherever required however the report is based on standalone financialstatements only.

1. FINANCIAL RESULTS

Particulars Standalone Consolidated
March 31 2021 March 31 2020 March 31 2021 March 31 2020
Total Income (I) 35616446 55049792 37299207 51079701
Less: Expenditure 29966065 49950130 30863927 43954457
Less: Depreciation 4570136 4801822 5030120 5339657
Total Expenditure (II) 34536201 54751952 35894047 49294114
Profit Before Tax (PBT) (I-II) 1080245 297840 1405160 1785587
Less: Tax expenses 2757370 -57050 3132424 -182863
Profit After Tax (PAT) (1677125) 354890 (1727264) 1968450

On a Standalone basis:

During the financial year under review on a standalone basis theCompany recorded revenue of Rs. 3.5 Cr as against Rs. 5.5 Cr in the previous year. TheCompany incurred a loss of Rs. 1677125 as compared to 3.54 Lacs profit in the previousyear.

On a consolidated basis:

The company's revenue is at Rs. 3.72 Cr as against Rs. 5.10 Cr inthe previous year and net loss amounted to Rs. 17.27 lakhs as compared to profit of Rs.19.68 lakhs in the previous year.

2. NATURE OF BUSINESS

The Company is into Manufacturing and MEP contracting and there hasbeen no change in the nature of business during the year under review.

3. TRANSFER TO RESERVE

Considering the loss incurred in the financial year under review theBoard has not recommended any amount to transfer to General Reserve.

4. DIVIDEND

The Board of Directors does not recommend any dividend as the Companycould not make any profits in the financial year.

5. SHARE CAPITAL

The paid-up share capital of the Company is Rs. 110637780/- dividedinto 11063778 equity shares of Rs. 10/- each as on March 31 2021. Your Company hascome out with Preferential issue of 1000000 equity shares of face value of Rs. 10 eachfully paid at a price of Rs. 26.79 to SunTrac Solar Manufacturing LLC USA during theyear.

6. SUBSIDIARIES JOINT VENTURES AND ASSOCIATES:

In accordance with the provisions of Companies Act 2013 ("theAct") SEBI (LODR) Regulations 2015 and Accounting Standard (AS) - 21 onConsolidated Financial Statements the audited consolidated financial statements form partof the Annual Report.

The Audited Financial Statements of the subsidiary is also available onthe website of the Company www.perfectinfra.com. As on 31st March 2021the Company has 1 subsidiary. The Company does not have any Associate Company pursuant tothe provisions of the Companies Act 2013.

Pursuant to the provisions of Section 129(3) of the Companies Act 2013and Rules 5 and 8(1) of the Companies (Accounts) Rules 2014 the salient features offinancial position of subsidiary is given in Form AOC-1 annexed as "Annexure 1"to this Report. The Company has framed a policy for determining material transaction withsubsidiary.

7. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

The Company has not granted any loan or guarantee in connection withthe loan during the year under review. The details of non-current investment are providedin Note No. 13 of the Standalone Financial Statements.

8. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All related party transactions entered during the financial year underreview were on an arm's length basis and in the ordinary course of business. Therewere no transactions for which consent of the Board of Directors were required to betaken. As prescribed by Section 134(3)(h) of the Companies Act 2013 and Rule 8(2) of theCompanies (Accounts) Rules 2014 particulars of contracts/arrangements with RelatedParties are given in Form AOC-2 annexed as "Annexure 2" to this Report.

As required under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 related party transactions were approved by the AuditCommittee and the same have been disclosed under significant accounting policies and notesforming part of the Financial Statements in accordance with the relevant accountingstandards.

The policy on Related Party Transactions has been uploaded on theCompany's website.

9. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS & OUTGO:

A) CONSERVATION OF ENERGY

i. Steps taken or impact on Conservation of Energy

• Ensuring optimum utilization of energy and maximum possiblesavings of energy.

• Avoiding any known wastages of energy by monitoring andreviewing energy usage.

ii. Steps taken by the Company for utilising alternate sources ofenergy

• Similar to last year your Company has continued with maximum useof natural light in the factory and conserving electrical energy.

iii. Capital Investments on energy conservation equipment

• The Company has installed in its factory adjacent trainingcentre and office with inhouse Solar Thermal Climate System. It saves 50% of AirConditioning electricity bill.

B) RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION

Your Company is committed to introducing new products and improvingexisting products to have better performance levels. Your Company and its collaboratorSuntrac Solar Manufacturing LLC USA have tied hands to take forward the innovativetechnology product in Air conditioning further across the globe.

The second-generation advanced innovative hybrid panel is tested atvarious benchmark sites. This second generation panel comes with IoT compatibility whichwill enable the panel to send real-time information on electrical savings.

Improved technical productivity through new methodologies andtechnologies is being continuously pursued to reduce the costs associated with newproduct development and customer support.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO:

Payments in foreign currency towards Imports:

Imports at CIF Value 2020-21 2019-20
Raw Materials and Traded goods - -
Capital Goods - -

Payments in foreign currency towards Expenditure:

Imports at CIF Value 2020-21 2019-20
Technical know-how fees (WIP) - 35676345
Capital Goods - -
Travelling Expenses - 544694

Earnings in foreign currency on Accrual basis:

Earnings in foreign currency 2020-21 2019-20
Exports - Products - 1982405
Exports - Services - -

Net Gain or Loss on Foreign Currency Translation

Description 2020-21 2019-20
Profit on Foreign Currency Translation - -

10. ANNUAL RETURN:

Pursuant to Section 92(3) and Section I34(3)(a) of the Companies Act2013 the Company has placed a copy of the 96 Annual Return as at March 31 2021 on itswebsite at .http://www.perfectinfra.com. By virtue of amendment to Section 92(3) ofthe Companies Act 2013 the Company is not required to provide extract of Annual Return(Form MGT-9) as part of the Board's report.

11. RISK MANAGEMENT:

Business Risk Evaluation and Management is an ongoing process withinthe Organization. The Company has a robust risk management framework to identify monitorand minimize risks as also identify business opportunities. As a process the risksassociated with the business are identified and prioritized based on severity likelihoodand effectiveness of current detection. Such risks are reviewed by the senior managementon a regular basis.

12. INTERNAL FINANCIAL CONTROLS WITH RESPECT TO THE FINANCIALSTATEMENTS:

The Company maintains adequate internal control system and procedurescommensurate with its size and nature of operations. The internal control systems aredesigned to provide a reasonable assurance over reliability in financial reporting ensureappropriate authorization of transactions safeguarding the assets of the Company andprevent misuse/ losses and legal compliances. The Internal Audit reports are periodicallyreviewed by the management and necessary improvements are undertaken if required.

13. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has a ‘Vigil Mechanism Policy' which inter aliaprovides adequate safeguards against victimization of persons who may blow the whistle.Vigil Mechanism Policy may be accessed on the Company's website www.perfectinfra.com.

14. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) of the Companies Act 2013 yourDirectors to the best of their knowledge and belief and according to the information andexplanations obtained by them state that:

• In the preparation of the annual financial statements for theyear ended March 31 2021 the applicable accounting standards have been followed alongwith proper explanation relating to material departures if any;

• Such accounting policies as mentioned in the notes to theFinancial Statements for the year ended March 31 2021 have been selected and appliedconsistently and judgments and estimates have been made that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company as at March 312021;

• Proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

• The annual financial statements for the year ended March 312021 have been prepared on a going concern basis;

• Internal financial controls to be followed by the Company havebeen laid down and that the said financial controls were adequate and were operatingeffectively;

• Proper systems to ensure compliance with the provisions of allapplicable laws have been devised and such systems were adequate and are operatingeffectively.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Composition of the Board of Directors:

Appointment and Re-appointment

During the year Mr. Rakesh Chauhan was appointed as an AdditionalIndependent Director and Mr. Krishna Mehta was appointed as an Additional ExecutiveDirector in the Board Meeting held respectively on November 14 2020 and March 12 2021.Further the appointment of Mr. Arun Kumar Singh Ms. Gurinderkaur Tapindersingh MultaniMr. Rakesh Chauhan and Mr. Bhanu Pratap Singh was regularised in the AGM held on December21 2020.

Cessation of the Directors

During the year Mr. Bhanu Pratap Singh (DIN: 07182170) resigned asDirector with effect from February 01 2021.

Appointment of Key Managerial Personnel

During the year Mr. Pravesh Palod resigned as the Company Secretary ofthe Company w.e.f. October 17 2020 and Ms. Zainab Chanki (ACS: 63675) was appointed asWhole-Time Company Secretary in the Board Meeting held on November 14 2020.

b. Committees of the Board:

The Board of Directors have constituted following Committees in orderto effectively cater its duties towards diversified role under the Companies Act 2013 andthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015: -

• Audit Committee;

• Stakeholders Relationship Committee;

• Nomination and Remuneration Committee;

c. Policy on Directors' Appointment and Remuneration:

The Policy of the Company on Director's Appointment andRemuneration including criteria for determining qualifications positive attributesindependence of the directors and other matters provided under Section 178(3) of theCompanies Act 2013 adopted by the Board is available on www.perfectinfra.com. Theremuneration paid to the Directors is as per the terms laid down in the Nomination andRemuneration Policy of the Company.

d. Board Performance Evaluation Mechanism:

Pursuant to the provisions and based on the criteria specified in theCompanies Act 2013 and Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has carried out the annual performanceevaluation of individual Directors Chairman of the Board the Board as a whole and itsstatutory Committees. Details of the evaluation mechanism is as follows:

A meeting of the Independent Directors was held wherein performance ofNon-Independent Directors Chairman of the Board and of the entire Board was evaluated.

The entire Board met to discuss the findings of the evaluation with theIndependent Directors. The Board then evaluated the performance of the IndividualDirectors the Board as a whole and the Committees of the Board.

On completion of the above process individual feedback was shared witheach Director.

The Directors were satisfied with the outcome of the Boardeffectiveness and have expressed their satisfaction with the assessment process.

e. Familiarization Programme for Independent Directors:

During the year the Management had a one-to-one discussion with thenewly appointed Independent Directors to have a better insight of the Company. The CEO andCFO has given details of initiatives for the Director to understand the Company itsbusiness and the regulatory framework in which the Company operates and equip him/ her toeffectively fulfil his/ her role as a Director of the Company.

f. Declarations from Independent Directors:

The Company has received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence asprescribed under the Companies Act 2013 and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Pursuant to the provisions of Section 149 of the Companies Act 2013the Independent Directors have submitted declarations that each of them meets the criteriaof independence as provided in Section 149(6) of the Companies Act 2013 along with Rulesframed there under and Regulation 16 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and adherence to Schedule IV of the Companies Act 2013.There has been no change in the circumstances affecting their status as IndependentDirectors of the Company.

16. NUMBER OF BOARD MEETINGS:

During the year under review 4 (four) Meetings of the Board ofDirectors of the Company were held viz on August 07 2020 September 19 2020 November14 2020 & March 12 2021.

17. PARTICULARS OF EMPLOYEES:

The details in accordance with the provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 for the year ended 31stMarch 2021 are given in "Annexure 3" to this Report.

18. AUDITORS:

STATUTORY AUDITORS:

At the 23rd Annual General Meeting of the Company held onSeptember 27 2018. M/s. JCR and Co. Chartered Accountants (Firm Registration No.105270W) were appointed as Statutory Auditors of the Company to hold office till theconclusion of Sixth Annual General Meeting. In terms of Section 139(1) of the CompaniesAct 2013 the appointment of statutory auditors does not require ratification by theshareholders in Annual General Meeting.

AUDITORS' REPORT:

The Auditors' Report on standalone and consolidated financialstatements forms part of the Annual Report. The following are the qualificationsreservations adverse remarks mentioned in the Auditors' Report and management replyagainst the same:

Sr. No. Auditors Qualification /reservation /adverse remark /disclaimer Managements Reply
Qualifications
1. NA NA
Other Comments
1. Company has many slow-moving items in inventory Company is redesigning and remodelling its product hence there are slow moving items.
2. Internal Audit reports for year ended were not available till our reporting The report was delayed due to lockdown restriction and limited staff at the Auditors place.
However we have received the report now and there were no qualifications or adverse remark in the same.
3. Negotiation of existing facility with Technology Development Board (TDB) The Company has received part amount of the sanctioned facility from TDB..
Considering the circumstances and completion of issue of shares to its foreign collaborator the Company does not require further facility from TDB and is thus in discussion for revising the repayment terms
This will impact the liquidity of the Company however the management is positive in making the repayments on time.
4. Reversal of Professional Tax Liability Excess provision written off
5. Asset tagging needs to be done as part of improvement and demarcation The management will try to implement the asset tagging.
Auditors Comment on Internal Financial Control
1. The control mechanism in respect of recording of transactions needs improvement. The management is looking out for ways in which the recording of transactions can be improved.

The Statutory Auditors of the Company have not reported any fraud asspecified under the second proviso of Section 143(12) of the Companies Act 2013(including any statutory modification(s) or re-enactment for the time being in force)

SECRETARIAL AUDITOR:

M/s. Nilesh A. Pradhan & Co. LLP Practising Company Secretarieswas appointed to conduct the Secretarial Audit of the Company for the Financial Year2020-2021 as required under Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014. The Secretarial AuditReport in Form MR-3 for the F.Y. 2020-21 is appended as "Annexure 4" to thisReport. The following are the qualifications reservations adverse remarks mentioned inthe Secretarial Audit Report and management reply against the same:

Sr. No. Secretarial Auditors Qualification /reservation /adverse remark /disclaimer Managements Reply
1. There was delay in filing many forms as required to be filed under Companies Act 2013 with MCA The delay was mainly due to Covid Situation and nationwide lockdown wherein we were trying to adopt the work from home structure.
We will try to file the forms on time from this year
2. Delay in submission of financial results as required under Regulation 33(3)(d) of the Securities and Exchange Board of India (LODR) Regulations 2015 for the year ended 31st March 2020 Due to Nationwide lockdown considering the grave Covid situation the preparation of financials and its audit was delayed by the Company.
Further due to heavy rains in August 2020 the Company's server crashed resulting in loss of entire data which further made it difficult to comply with the timelines.

19. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCEREPORT:

The Management Discussion and Analysis Report which forms part of thisReport and is appended as "Annexure 5".

20. SECRETARIAL STANDARDS:

The Company is in compliance with the Secretarial Standards on Meetingsof the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2)issued by the Institute of Company Secretaries of India.

21. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:

In order to prevent sexual harassment of women at workplace theCompany has adopted a policy for prevention of Sexual Harassment of Women at workplace andhas set up an Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 to look into complaintsrelating to sexual harassment at workplace of any woman employee. During the year underreview the Company has not received any complaint under the said policy.

22. MATERIAL CHANGES AND COMMITMENTS OCCURRED DURING APRIL 01 2021TILL THE DATE OF THIS REPORT WHICH WOULD AFFECT THE FINANCIAL POSITION OF YOUR COMPANY:

Except for the impact on operations of the Company due to strictrestrictions imposed by the State Government considering the rise in COVID cases whichresulted in halt of manufacturing facilities of the Company there were no material changesand commitments occurred during April 01 2021 till the date of this report which wouldaffect the financial position of your company

23. SIGNIFICANT OR MATERIAL ORDERS WERE PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS WHICH IMPACT THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS.

No significant or material orders were passed by the regulators orcourts or tribunals which impact the going concern status and company's operations.However your Company was penalized for non-compliance/delay in compliance with certainprovisions of the of SEBI (Listing Obligation and Disclosure Requirements) Regulation2015.

24. DEPOSITS:

There were no outstanding deposits within the meaning of Sections 73and 74 of the Act read together with the Companies (Acceptance of Deposits) Rules 2014at the end of the financial year 2020-21. Your Company did not accept any deposits duringFY2020-21.

The following are the details of loan given by the Directors of theCompany:

Sr. No. Name of the Director from who has given loan Amount (Rs.)
1. Ms. Manisha Mehta 1202982
Total 1202982

25. COST RECORDS:

The provisions with respect to maintenance of cost records as specifiedby the Central Government under sub-section (1) of section 148 of the Companies Act 2013is not applicable to the Company.

26. CORPORATE SOCIAL RESPONSIBILITY:

Provision of Section 135 of the Companies Act 2013 are not applicableto your Company thus constitution of CSR Committee development of policy andcontribution towards CSR is not required.

27. GENERAL DISCLOSURE:

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on these items during theyear under review:

a. Issue of equity shares with differential rights as to dividendvoting or otherwise;

b. Issue of sweat equity shares by the Company to its employees;

c. Issue of shares under scheme of ESOP and ESPS to its employees.

28. ACKNOWLEDGEMENT:

Your directors would like to express their sincere appreciation for theassistance and co-operation received from the financial institutions banks governmentauthorities customers vendors and members during the year under review. Your directorsalso wish to place on record their deep sense of appreciation for the committed servicesby the Company's executives staff and associates.

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