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Rithwik Facility Management Services Ltd.

BSE: 540843 Sector: Others
NSE: N.A. ISIN Code: INE819Y01015
BSE 00:00 | 01 Jun Rithwik Facility Management Services Ltd
NSE 05:30 | 01 Jan Rithwik Facility Management Services Ltd
OPEN 55.10
PREVIOUS CLOSE 55.10
VOLUME 3000
52-Week high 55.20
52-Week low 55.00
P/E 19.00
Mkt Cap.(Rs cr) 17
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 55.10
CLOSE 55.10
VOLUME 3000
52-Week high 55.20
52-Week low 55.00
P/E 19.00
Mkt Cap.(Rs cr) 17
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rithwik Facility Management Services Ltd. (RITHWIKFACILITY) - Director Report

Company director report

Dear Members

Your Directors present their 11thReport together with the audited financialstatements along with Auditors report of your Company for the year ended March 31 2021.

OPERATIONS AND FINANCIAL OVERVIEW

During the year under review the turnover of the Company was Rs.2159.13 lakhs ascompared to Rs. 2625.96 lakhs in the previous year. This year profits are from the coreactivities of the business. Due to Covid Pandemic the revenue from operation has come downto 2159.13 lakhs.

FINANCIAL HIGHLIGHTS

Particulars 31st March2021 31st March2020
(Rs. in Lakhs) (Rs. in Lakhs)
Revenue from Operation 2159.13 2625.96
Profit/(Loss) before Finance Cost Depreciation Exceptional items and Taxes 147.96 261.91
Less: Finance Cost 8.84 8.48
Less: Depreciation 26.78 33.31
Profit/(Loss) before exceptional and extraordinary items 112.34 220.12
Less: Exceptional items - -
Profit / (Loss) before tax 112.34 220.12
Less: Tax Expenses 25.95 57.19
Profit / (Loss) After tax 86.39 162.93

CHANGE IN THE NATURE OF THE BUSINESS

During the year there is no change in the nature of the business of the Company.

DIVIDEND

Although your Company has made profit after Tax of Rs.86.39 lakhs your Directorsdecided to retain the profits for further expansion and have not recommended any dividendfor the year ended 31st March 2021.

ECONOMIC OVERVIEW-INDIA

India has emerged as the fastest growing major economy in the world and is expected tobe one of the top three economic powers in the world over the next 10-15 years backed byits robust democracy and strong partnerships. India's real gross domestic product (GDP) atcurrent prices stood at Rs. 195.86 lakh crore (US$ 2.71 trillion) in FY21 as per thesecond advance estimates (SAE) for 2020-21.

Market size

The facility management services market size in India in the environmental &facilities services industry is expected to grow by USD 13.43 billion progressing at aCAGR of almost 14% during 2021-2025 as per the new report from Technavio.

The Indian facility management market reached a value of USD 150 billion in 2020. Theindustry is expected to grow at a rapid pace in the forecast period of 2021-2026 growingat a CAGR of 20% to reach a value of around USD 406 billion by 2026.

This industry in India is dominated by in-house segment; however these services areincreasingly being outsourced. The growing demand for integrated facility management isalso propelling the industry growth. The integrated sector in the industry is expected tofurther grow with the industry increasingly shifting to the organised sector. Whilecurrently the industry is highly fragmented and is dominated by unorganised smalloperators with larger players increasingly acquiring smaller players the industry isexpected to become more organised in the coming years. The commercial sector is theleading end-use industry in the market in India followed by industrial and other sectors.Corporate offices like IT BPO and BFSI sectors are rapidly shifting towards outsourcingtheir services thus driving the industry growth in India. The industry is primarilyconcentrated in Tier 1 and metro cities.

Recent Developments

The Indian Facilities Management (FM) industry is in the midst of rapid developments inend-user industries which has led to the considerable growth of commercial activities inmetropolitan cities such as Delhi /NCR Mumbai Hyderabad Pune Chennai and Bengaluru.The forecasted CAGR over the next 3 years in the FM Industry is estimated to be 17.19% bya Technavio Report. The majority of the Indian market today is still comprised of theunorganised sector however due to the growing influence of urban development post themodernisation and the RERA act; the market is now moving towards a moreorganisedapproach. In effect FM services are steadily gaining popularity among commercial as wellas residential clients.

The recently announced plan by the government to develop 100 smart cities is a clearindication of the growth opportunities in the FM space in the country as it now goesbeyond just the Tier I cities. This plan is expected to see a surge in investments (nearly$200 Billion) into the infrastructure sector which would inevitably create a need forprofessional FM services with the majority of the newly formed market is expected to bestructured keeping in mind the concept of the smart cities. The growth in real estate inthe country is expected to increase with the people’s preferences now leaning towardsa safer cleaner and more secure environment. Also with the IT boom in the country pairedwith the E-commerce investments by companies such as Amazon and Alibaba the overall needfor infrastructure and organised spaces is only going to increase which makes the futurefor FM quite bright.

Government Initiatives

The government safety regulations and emphasis on green practices over environmentalconcerns across the country is driving the market. The Occupational Safety Health andWorking Conditions Code 2019 which was introduced in LokSabha by the Ministry of Labourand Employment is expected to drive the organizations to adopt facility managementservices to focus more on their core operations

Road Ahead

The outlook of FM services in India is shaping up to be highly optimistic mainly due tothe growing maturity of end users and the need for improved safety comfort andprofessional maintenance of assets. Presence of Global and Indian MNCs across variousend-user sectors is mainly driving the market for FM services in India as they are thepotential customers due to their increased awareness levels exposure to facilities andwillingness to invest. The IT sectors are more concerned about personalized andspecialized services utilizing both hard and soft services due to the recent boom andincrease in investments in the Indian IT/ITeS/BPO and finance/banking sectors. Increase ininvestments from emerging sectors such as health-care retail and infrastructure sectorare expected to further push this market to a higher growth curve in the life cycle.

The public sector namely government offices industrial and educational segments offervery minimal opportunity as the market is currently in the early stages of developmentwith limited penetration of the outsourcing concept. They majorly outsource only the softservices to the local FM companies. Expansion of business activities in tier 2 and tier 3cities by the end-user segments are considered to be an increasing regional growth trendsfor FM services market in India. FM companies should be able to overcome competitionfactors and capitalize on the vast opportunities in store. Simultaneously the FM marketin India is moving towards involving an organized approach in order to achieve highermarket penetration and maturity. Many companies have adopted inorganic growth models topenetrate the market by acquiring well established firms to capture a considerable marketshare. Companies are constantly looking for growth options and modifying their businessmodels to suit market trends. Some of recent / major acquisition are India based A2Z Groupacquired IPMSL and CNCS Facility Solutions. Secondly UK based compass group acquiredIndia’s Vipul Facilities Management and Ultimate Hospitality Services and ThirdlyTenon Property Services who have expanded its portfolio by acquiring companies PeregrineGuardine Roto Power and Mortice Group.

IMPACT OF COVID – 19 in Leasing of office spaces in India

The COVID-19 pandemic continues to transform the growth of various industriesand hasimpacted on the facility management services market in India. As per Technavio'spandemic-focused market research market growth is likely to increase in 2021 as comparedto 2020.

The facility management services market size in India in the environmental &facilities services industry is expected to grow by USD 13.43 billion progressing at aCAGR of almost 14% during 2021-2025 as per the new report from Technavio. The reportoffers an up-to-date analysis regarding the current market scenario the latest trends anddrivers and the overall market environment

REVIEW OF OPERATIONS

During the year under review your company has recorded 86.39 Lakhs in profit asagainst162.93 Lakhs as on 31st March 2021. The COVID-19 pandemic continues tohinder the growth of various industries and has impacted the facility management market inIndia. We expect our business to grow to the pre Covid levels during FY 2022-23.

FACILITIES UNDER O&M

Particulars 31st March 2020 31st March 2021
Total Area of Maintenance in Sq.ft. 777497 469000
Total No. of clients under maintenance 73 62

FUTURE PROSPECTS

The outlook of FM services in India is shaping up to be highly optimistic mainly due tothe growing maturity of end users and the need for improved safety comfort andprofessional maintenance of assets. Presence of Global and Indian MNCs across variousend-user sectors is mainly driving the market for FM services in India as they are thepotential customers due to their increased awareness levels exposure to facilities andwillingness to invest. The IT sectors are more concerned about personalized andspecialized services utilizing both hard and soft services due to the recent boom andincrease in investments in the Indian IT/ITeS/BPO and finance/banking sectors. Increase ininvestments from emerging sectors such as health-care retail and infrastructure sectorare expected to further push this market to a higher growth curve in the life cycle.

The public sector namely government offices industrial and educational segments offervery minimal opportunity as the market is currently in the early stages of developmentwith limited penetration of the outsourcing concept. They majorly outsource only the softservices to the local FM companies. Expansion of business activities in tier 2 and tier 3cities by the end-user segments are considered to be an increasing regional growth trendsfor FM services market in India. FM companies should be able to overcome competitionfactors and capitalize on the vast opportunities in store. Simultaneously the FM marketin India is moving towards involving an organized approach in order to achieve highermarket penetration and maturity. Many companies have adopted inorganic growth models topenetrate the market by acquiring well established firms to capture a considerable marketshare. Companies are constantly looking for growth options and modifying their businessmodels to suit market trends.

The Covid-19 pandemic has forced companies to reset the ongoing soft services tosupport the workplace environment. There is a growing need for automating FM businessprocesses everything from move-ins service requests and maintenance to energymanagement or workspace customization. Facilities managers must leverage data for betterdecision making capital planning and improving the workplace experience for employees andcustomers alike.

In the post Covid times smart technologies will add greater significance given thatfacilities will be occupied in a gradual manner and better control and intelligence willbe needed to operate buildings in a very dynamic environment with varied occupancypattern. Quick changes remote monitoring and operations and data analytics are expectedto bring efficiency in this dynamically changing occupancy.

The concept of smart buildings is pushing facility managers to rediscover the use andintegrations of buildings into one single eco-system. Every asset or device within thebuilding such as lights sensors windows HVAC units doors and CCTV having a uniqueidentity and all fully integrated into a network. Artificial Intelligence andIoTtechnologies can increase operational efficiency and improve building management byallowing distantly monitoring and controlling facilities.

Your company continues to explore all the possibilities in exploring new methodologiesand technologies with regard to the facility management services with a holistic approachof providing end to end solutions for the clients. Your company is also exploring thepossibilities of entering into contract to lease equipments for IT/ ITEs companies whichwill in turn contribute to the growth of the Company.

Although there is a shift from Work from office to Work from home the industry is notcomfortable with this practice on a permanent basis. As they have found that it is notpractically workable for multiple purposes. We expect our business will get the positivegrowth during the Second Quarter of the Financial Year 2022-23.

SHARE CAPITAL

The Authorised capital of the company is 400 Lakhs as on 31st March 2021.The paid up capital of the Company as on 31st March 2021 stands at Rs. 306Lakhs.

During the year under review your Company did not issueshares with differential votingrights / sweat equity. Detailsof the Directors’ shareholding as on March 31 2021which formspart of this Annual Report.

TRANSFER TO RESERVES

Your Company do not propose to transfer any amount to the reserves.

CORPORATE GOVERNANCE

Corporate governance is an ethically driven business process that is committed tovalues aimed at enhancing an organization's brand and reputation. This is ensured bytaking ethical business decisions and conducting business with a firm commitment tovalues while meeting stakeholders expectations. At Rithwik Facility Management ServicesLimited it is imperative that our company affairs are managed in a fair and transparentmanner. This is vital to gain and retain the trust of our stakeholders. The Company iscommitted to maintain the highest standards of corporate governance and adhere to thecorporate governance requirements set out by SEBI.

As per the Regulation 15(2)(a) of Chapter IV of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015; The compliance withthe Corporate Governance provisions as specified in regulations 1717A 18 19 20 212223 2424A25 26 27 and clauses (b) to (i) and (t)of sub- regulation (2) of regulation46 and para C D and E of Schedule V shall not apply in respect of

a) the Listed entity having paid up Equity share capital not exceeding Rs. 10 Crore andNet- worth not exceeding of 25 Crore as on the last day of the Previous financial year:

b)the Listed entity which has listed its specified securities on the SME Exchange.

Since your Company is listed in BSE SME platform the compliance with regard toprovisions of Corporate Governance in accordance with Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirements) Regulations 2015 is notapplicable to your Company.

All the periodical and event based filings were filed and due to pandemic andnon-movement of people there were two late filings with BSE which was considered andwaived -offthe penalty by theBSE-"Committee for Reviewing Representations forWaiver of Fines Levied under Standard Operating Procedure (SOP)".

MANAGEMENT DISCUSSION AND ANALYSIS:

In terms of provisions of Regulation 34 of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (hereinafterreferred to as Listing Regulations) the Management Discussion and Analysis Report isappended as Annexure-I to this report.

PARTICULARS OF EMPLOYEES:

Your Company has no employee who is in receipt of remuneration of Rs.850000/- permonth or Rs.10200000/- per annum and hence the Company is not required to giveinformation under Sub Rule 2 and 3 of the Rule 5 of the Companies (Appointment andRemuneration of Managerial Personnel) Rules2014.

Further the Nomination and remuneration policy forms part of Annexure-II to theBoard’s Report:

x Disclosure under Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014-Annexure-III

COMPOSITION & CATEGORY OF DIRECTORS:

The board comprises of 5 Directors; out of which 2 are Executive Director and 3 areNon-Executive Independent Directors of whom one is woman Non-executive IndependentDirector. All the Directors bring a wide range of skills and experience to the board. TheIndependent Directors have confirmed that they satisfy the criteria prescribed for anIndependent Director as stipulated under the provisions of Section 149(6) of the CompaniesAct 2013. All directors are appointed by the members of the Company.

The composition of the Board is in conformity with Listing Regulations. No director canbe a member in more than 10 committees or act as chairman of more than 5 committees acrossall public companies in which he is a director.

S.No Names of Director DIN/PAN Designation Date of Appointment
1. Rithwik Rajshekar Raman 07836658 Managing Director 01.06.2017
2. Vyakarna Niranjan Rao 02918882 Wholetime Director 15.09.2010
3. P Sudhakar 02483116 Director 21.09.2017
4. Shama Prasanna Tipparaju 07922496 Director 30.08.2017
5. Jayaraman 08112010 Director 07.05.2018

x In accordance with the provisions of Section 152 of the Companies Act 2013MrVyakarnaNiranjanRao being longest in office retires and is eligible for reappointmentand the board recommends his appointment as Director of your Company.

x No directors are inter-se related to each other.

A) Details with regards to meeting of Board of Directors and attendance during the yearof the Company

(i) Composition of the Board of Directors as on the date of this Report is mentionedbelow;

Name of the Director Designation Category
Mr. Rithwik Rajshekar Raman Managing Director Executive Director
Mr. Vyakarna Niranjan Rao Whole-Time Director Executive Director
Mr. Sudhakar P Director Independent Director
Mrs.Shama Prasanna Tipparaju Director Independent Director
Mr.Jayaraman Director Independent Director

(ii) Meeting of Board of Directors and Attendance during the Year: -

During the FY 2020 2021 Four (4) meetings of the Board of Directors of the Companywere held which is listed in the table. Due to Covid pandemic there is a gap between twomeetings that exceed 120 days.

During the financial year 2020-21 the relaxation of maximum time gap between twoboard/Audit Committee meetings as provided by circular No. SEBI/HO/CFD/ CMD1/CIR/P/2020/38 dated March 19 2020is extended till July 31 2020. Except during thequarter I (April-June) no such board meeting of the Company was held due to relaxationgiven by SEBI.

The Board meetings were held on 13.07.2020 21.08.2020 13.11.2020 and 04.03.2021.

Name Category Number of Directorshi p in other public Ltd Companies No. of Board Meetings attended during period ended 31/03/2021 No. of Committee Membershi p in other Public Limited Companies Atte nd- ance Last AGM on No. of Shares held
Mr. Rithwik Rajshekar Raman Executive Non-Independent Chairman Promoter cum Managing Director Nil 4 Nil Yes 1102500
Mr Vyakarna Niranjan Rao Executive Non-Independent Whole-Time Director Nil 4 Nil Yes 13500
Mr. P Sudhakar Non-Executive Independent Director Nil 3 NIl Yes Nil
Mrs.Shama Prasanna Tipparaju Non-Executive Independent Director Nil 4 Nil Yes. Nil
Mr. Jayaraman Non-Executive Independent Director 1 4 1 Yes Nil

In accordance with Regulation 26 (1) (b) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 Membership/Chairpersonship of only the Audit Committeesand Stakeholders’ Relationship Committee in all Public Limited Companies has beenconsidered.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

(C) Policy on Directors’ Appointment and Remuneration

The current policy is to have an appropriate mix of executive non-executive andindependent directors to maintain the independence of the Board and separate itsfunctions of governance and management. As on 31st March 2021 the Board consists of 5Members 1 of whom is a Managing Director 1 of whom is a Whole-time Director and the 2/3rdare Independent Directors including 1 woman non-executive Independent Director. The Boardperiodically evaluates the need for change in its composition and size. The Policy of theCompany on Director’s Appointment and Remuneration including criteria fordetermining qualifications positive attributes independence of director and othermatters provided under Section 178(3) of the Companies Act 2013 adopted by the Board isappended as Annexure-II to this report. We affirm that the Remuneration paid to thedirector is as per the terms laid out in the said policy.

(D) Declaration on Independent Directors

All the Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Act. In the opinion of the Boardthey fulfill the conditions of independence as specified in the Act and the Rules madethere under and are independent of the management.

BOARD’S COMMITTEES:

Currently the Board has three Committees: the Audit Committee the Nomination andRemuneration Committee and the Stakeholder’s Relationship Committee. All Committeesare appropriately constituted.

(i) The details of the composition of the Committeesas on the date of this Report ismentioned below:

Name of the Committee Name of the Member Position Held
Mr. Jayaraman Chairman-Independent Director
Audit Committee Mrs. Shama Prasanna Tiparaju Member- Independent Director
Mr. P. Sudhakar Member- Independent Director
Nomination & Remuneration Committee Mr. Jayaraman Chairman-Independent Director
Mrs. Shama Prasanna Tiparaju Member- Independent Director
Mr. P. Sudhakar Member- Independent Director
Mrs. Shama Prasanna Tiparaju Chairman-Independent Director
Stakeholders Relationship Committee Mr. Vyakarna Niranjan Rao Member- Wholetime Director
Mr. P. Sudhakar Member- Independent Director

(ii) Meetings of Audit Committee and Attendance during the Year:

During the financial year under review Audit Committee Meetings were held on13-07-2020 21-08-2020 13-11-2020 and 04-03-2021.The attendance of the members at theAudit Committee meetings were as follows:

Attendance particulars
Name of the Member Meeting Held during their tenure Meeting Attended during their tenure
Mr. Jayaraman(Chairman) 4 4
Mr. P Sudhakar (Member) 4 3
Mrs. Shama Prasana Tiparaju (Member) 4 4

(iii) Meetings of Nomination and Remuneration Committee and Attendance during the Year:

During the financial year under review Nomination and Remuneration Committee Meetingswere held on 04-03-202.The attendance of the members at the Nomination and RemunerationCommittee meeting was as follows:

Attendance particulars

Name of the Member Meeting Held during their tenure Meeting Attended during their tenure
Mr. Jayaraman 1 1
Mrs. Shama Prasanna Tiparaju 1 1
Mr. P. Sudhakar 1 1

(iv) Meetings of stakeholder relationship committee and attendance during the year:

During the financial year under review Stakeholder Relationship Committee Meetingswere held on 13-07-2020 and 13-11-2020 and the attendance of the members at theStakeholder Relationship Committee meeting was as follows:

Attendance particulars

Name of the Member Meeting Held during their tenure Meeting Attended during their tenure
Mrs. Shama Prasanna Tiparaju 2 2
Mr. Vyakarna Niranjan Rao 2 2
Mr. P. Sudhakar 2 2

(v) Separate Meetings of Independent Directors:

During the year separate meetings of independent directors were held on March 4 2021in which all independent directors were present.

(vi) (i) General Body Meetings held in last three years:

Year Date Time Venue
2017-18 27-9-2018 11.00 a.m RR Tower III TVK Industrial Estate Guindy Chennai-600032.
2018-19 27-9-2019 11.00 a.m -do-
2019-20 25-9-2020 12.00 Noon -do-

(ii) Special Resolution passed in previous three AGMs:

AGM Date Special Resolutions passed
27-9-2018 Change in Object Clause of the Company and the resolution was passed unanimously as a Special Resolution.
27-9-2019 Change in Object Clause of the Company and the resolution was passed unanimously as a Special Resolution.
25-9-2020 NIL

(iii) Whether Special Resolution were put through postal ballot last year: No

(iv) Any special resolution proposed to be conducted through postal ballot thisyear:No

CORPORATE SOCIAL RESPONSIBILITY

As per the provision of Section 135 of theCompanies Act 2013 all companies having anet worth of Rs.500 crore or more or a turnover of Rs.1000 crore or more or a net profitof Rs.5 crore or more during the immediately preceding financial year are required toconstitute a CSR committee.

Your Company do not fall in the criteria to constitute a CSR Committee as per theprovisions of Section 135 of the Companies Act 2013 and accordingly the CSR provisionsare not applicable to the Company.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013

Your Company gives utmost importance towards maintain and upholding the dignity of eachand every woman working in the Company. The Company has a policy on prevention of sexualHarassment at workplace which provides for adequate safeguards and protection for womenemployees working in the organization.

No Complaints were received in this regard during the year 2020- 21 and No pendingcomplaints as at 31st March 2021.

VIGIL MECHANISM

The Company has established a vigil mechanism to provide adequate safeguards againstvictimization and to provide direct access to the Chairman of the Audit Committee inappropriate cases. This mechanism is available on the website of the Company.

SECRETARIAL AUDIT

Pursuant to provisions of section 204 of the Companies Act 2013 read with Rule 9 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 yourCompany has engaged the services of M/s.KhandelwalArun& associates (ICSI FirmRegistration Number: S2017TN553800) Company Secretaries Chennai to conduct theSecretarial Audit of the Company for the period ended on 31st March 2021. The SecretarialAudit Report (in Form MR-3) is annexed as Annexure-IVto this Report.

There is no qualification reservation or adverse remarks or disclaimer made by theSecretarial Auditor in their report and do not call for any further explanation/commentfrom the board.

AUDITORS

M/s. Kalyanasundaram & Associates Chartered Accountants Chennai was appointed asStatutory Auditors of the Company in the previous AGM held on 25th September2020.The term of the present Auditor will conclude at the ensuing Annual General meetingof the Company and being eligible has offered themselves for re-appointment.

Consent has been received from the Present auditors for their re-appointment to theeffect that they are not disqualified to be appointed as Statutory Auditors of the Companyin terms of the Companies Act 2013 & the rules made there under. The Members arerequested to consider and approve their appointment as Statutory Auditors of the Companyto hold office from the conclusion of the 11th Annual General Meeting until the conclusionof the 16th Annual General Meeting of the Company.

There are no qualifications reservations or adverse remarks made by M/s.Kalyanasundaram& Associates. Chartered Accountants the Statutory Auditors of theCompany in their report. The observations made by the Statutory Auditors in their reportfor the financial period ended 31st March 2021 read with the explanatory notes thereinare self-explanatory and therefore do not call for any further explanation or commentsfrom the Board under Section 134(3) of the Companies Act 2013.

INTERNAL FINANCIAL CONTROLS

The Company has a well-placed proper and adequate internal control system whichensures that all assets are safeguarded and protected and that the transactions areauthorized recorded and reported correctly. The Internal Financial Controls withreference to financial statements as designed and implemented by the Company are adequate.

During the year under review no material or serious observation has been received fromthe Internal Auditors of the Company for inefficiency or inadequacy of such controls. TheBoard of Directors has appointed M/s.V Suresh & Associates Chartered Accountants asthe Internal Auditor of the Company. The Internal Auditors independently evaluate theadequacy of internal controls and concurrently audit the majority of the transactions invalue terms.

PARTICULARS ON CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTIONAND FOREIGN EXCHANGE EARNINGS AND OUTGO

(i) Energy Conservation: Conservation of energy continues to receive increased emphasisand steps are being taken to reduce the consumption of energy at all levels. The Companyhas taken steps to conserve energy in its office use consequent to which energyconsumption had been minimized. No additional Proposals/ Investments were made to conserveenergy. Since the Company has not carried on industrial activities disclosures regardingimpact of measures on cost of production of goods total energy consumption etc are notapplicable.

(ii) Foreign Exchange Earnings and Outgo: The Company has not earned any foreignexchange during the year under review. However Company has expended Rs.9 86145 duringthe year towards educational expenses of Managing Director.

(iii) Research and Development & Technology Absorption: The Company has not adoptedany technology for its business and hence no reporting is required to be furnished underthis heading. The Company will adopt necessary technology as and when required in thefurtherance of the business.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors confirm that:-

(a) in the preparation of the annual accounts the applicable accountingstandards have been followed and that no material departures have been made from the same;

(b) they have 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 at the end of the financial year and ofthe profit and loss of the company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the annual accounts on a going concern basis;

(e) they have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

(f) they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

DETAILS IN RESPECT OF FRAUD REPORTED BY THE AUDITORS

There were no instances of fraud reported by the Auditors.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

During the year under review there are no transactions covered under the Provisions ofSection 186 of the Companies Act 2013.

RISK MANAGEMENT

The Company has developed and implemented a risk management policy includingidentification therein of elements of risk if any which in the opinion of the Board maythreaten the existence of the Company. The Board and the Audit Committee periodicallyundertake a review of the major risks affecting the Company’s business and suggestssteps to be taken to control and mitigate the same.

EXTRACT OF ANNUAL RETURN

Pursuant to the Notification issued by MCA with effect fromAugust 28 2020 themandatory requirement of attaching annexure of the Annual Return in the prescribed formMGT-9 hasbeen omitted.

Accordingly as per the provisions of the amended Section 92(3)of the Act read withRule 12 of the Companies (Managementand Administration) Rules 2014 the Annual Return asof March31 2021 has been placed on the website of the Companyand can be accessedatwww.rithwik.co.in.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO INSUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT 2013

Your Company has not entered into any contracts /arrangements / transactions withrelated parties which could be considered material in accordance with the policy of theCompany i.e. Policy on Materiality of and Dealing with Related Party Transactions("RPT Policy"). Accordingly AOC-2 is not applicable to the Company. Furthertransactions entered by the Company with related parties in the normal course of businesswere placed before the Audit Committee of the Board.

There were no materially significant related party transactions with the PromotersDirectors and Key Managerial Personnel which may have a potential conflict with theinterest of the Company at large.

Your Directors draw attention of the Members to Note No. 24 to the Standalone FinancialStatements which sets out related party disclosure.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT OR TRIBUNAL

There are no significant and material orders passed by the Regulators or Court orTribunal which would impact the going concern status of the company and its operations inthe future. But the Company has preferred an appeal in CIT (A) against the demand ofRs.11 09052 and Rs.481589 raised by the Assessing officer in the AY 2017-18 and2018-19 respectively for which the hearing is still pending.

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

1. Impact of COVID-19 on the business:-

The COVID-19 pandemic continues to transform the growth of various industries and hasimpacted on the facility management services market in India. We expect our business willcome normal once the Pandemic gets eased.

2. Ability to maintain operations:-

The Company has taken conscious decision through balance uninterrupted operations andensuring a safe working environment. To ensure this 50 % of the staff have been asked toreport to work at their locations during the lockdown. The Company has also made necessaryarrangements to ensure that they are safe and comfortable at work.

3. Steps taken to ensure smooth functioning:-

The Company has put in place strict standard operating procedures for COVID-19 ensuringthe following:-

• Thermal Screening of all Employees;

• Sanitizing the premises and vehicles on regular basis;

• Distribution of masks and gloves to our workers;

• Maintenance of social distancing at all work places;

• Enforcing wearing of masks and regular cleaning of hands;

• Regular update of the health of all the Employees and their Families;

• Asking all Employees to have AarogyaSetu App.

• Sanitizers with foot operated machines placed at strategic locations

In addition to above the Company has implemented the Standard Operating Procedureswhich is strictly being followed across all the Units and Workplaces and we have alsodesignated officials responsible for ensuring the compliances to the Guidelines Rules andRegulations issued by Central as well as State Government on COVID-19 from time to time:

The Company has been regularly conducting awareness programs and vaccination camps forall its Employees.

All Customers and Vendors of the Company have been communicated about the measurestaken by the Company through mails.

4. Estimation of the future impact of COVID-1 9 on operations:-

As explained above Covid-19 pandemic have impacted our Company's performance for thefinancial year 2020-21.We expect a decline of revenue about 10 to 15% for the financialyear 2021-22.

5. Details of impact of COVID-19 based on certain performance parameters:

x Capital and financial resources and other assets - As per the current assessmentthere is no significant impact on the Company's capital and financial resources and otherassets of the Company.

x Profitability-We expect a reduction in profits by 10 to 15% for the financial year2021-22.

x Liquidity - The Company has a strong balance sheet and liquidity position.

x Ability to service debt - The Company has adequate financial resources to meet itsworking capital requirement. The Company has never in the past defaulted on any interestor loan payment and does not see any issue meeting future obligations too.

x Assets - None of the assets of the Company have been impacted or impaired by theCOVID-19.

x Internal Financial Controls -The Company has system in place at office locations arewell networked. Accordingly all Internal Financial Controls and reporting systems areworking seamlessly without disruption.

x Supply Chain - There has been no impact because we have sufficient labour force.

x Demand - The commercial real estate industry is likely to see fall in occupancy ofabout 15 to20 %.Our Business is directly related to the IT/IIES/Commercial leasing as aresult we expect a reduction in demand.

6. Impact on Contracts/ Agreements:-

The Company expects to see a 10 to 15% reduction in respect of its existing Contractsand Agreements because of the above mentioned reasons.

7. Other relevant material updates: - None

LISTING

Your Company is listed on SME platform of BSE Ltd. from 11th January 2018. TheCompany’s code is RITHWIKFMS (540843)and ISIN is INE819Y01015.The following tabledepicts the price movement for the year 2020-21.

DEPOSITS

Your Company has not accepted any deposits from public orits employees and as such noamount on account of principal or interests on deposit were outstanding as on the BalanceSheet date.

ACKNOWLEDGEMENTS

Your Directors place on record their sincere appreciation for significant contributionmade by employees of the Company at each level through their dedication hard work andcommitment.

The Board places on record its appreciation for the continued co-operation and supportextended to the Company by various stakeholders Banks Stock Exchanges NSDL and CDSL.The Board wishes to express its grateful appreciation for the assistance and co-operationreceived from Vendors Customers Consultants Banks Financial Institutions and otherBusiness Associates. The Board deeply acknowledges the trust and confidence placed by thecustomers of the Company and above all the shareholders.

For and on behalf of the Board of Directors
Rithwik Facility Management Services Limited
Place: Chennai Rithwik Rajshekar Raman Niranjan Vyakarna Rao
Date:27-08-2021 Managing Director Whole Time Director
DIN: 07836658 DIN: 02918882

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