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Rithwik Facility Management Services Ltd.

BSE: 540843 Sector: Others
NSE: N.A. ISIN Code: INE819Y01015
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NSE 05:30 | 01 Jan Rithwik Facility Management Services Ltd
OPEN 48.50
PREVIOUS CLOSE 48.50
VOLUME 3000
52-Week high 52.25
52-Week low 38.00
P/E 9.12
Mkt Cap.(Rs cr) 15
Buy Price 48.00
Buy Qty 3000.00
Sell Price 52.30
Sell Qty 3000.00
OPEN 48.50
CLOSE 48.50
VOLUME 3000
52-Week high 52.25
52-Week low 38.00
P/E 9.12
Mkt Cap.(Rs cr) 15
Buy Price 48.00
Buy Qty 3000.00
Sell Price 52.30
Sell Qty 3000.00

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

Company director report

Dear Members

The Board presents its 9th Annual Report together with the Audited Accounts of theCompany for the year ended March 31 2019.

31st March2019 31st March2018
Particulars (Rs. in Lakhs) Rs. in Lakhs)
Revenue from Operation 2728.22 2096.18
Profit/(Loss) before Finance Cost 213.51 129.11
Depreciation Exceptional items and Taxes
Less: Finance Cost 13.11 6.18
Less: Depreciation 30.79 23.91
Profit/(Loss) before exceptional and extraordinary items 169.61 99.02
Less: Exceptional items - -
Profit / (Loss) before tax 169.61 99.02
Less: Provision for Tax 49.75 36.46
Profit / (Loss) After tax 119.86 62.56

OPERATIONS

During the year under review The turnover of the Company was Rs.2798.22 lakhs ascompared to Rs.2096.18 lakhs in the previous year.The growth of 30% of the operations ascompared to previous year.

CHANGE IN THE NATURE OF THE BUSINESS

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

DIVIDEND

Though your Company has made profits your Directors decided to retain the profits forfuture expansion and have not recommended any dividend for the year ended 31st March2019.

FUTURE PROSPECTS

The Indian facility management market accounts for 3.2% of the GDP of the country andis at present an INR 5 lakh crore market and is expected to grow at a rate of 20-25%annually. The market is highly fragmented with relatively few organized players. Howeverwith the growing formalization of the economy the proportion of organized players issteadily increasing. The government's ambitious plan to develop 100 smart cities(attracting an investment of $216 Billion into infrastructure) will result in a surge ininfrastructure creation driven by sustained population growth. This will create asustained need for professional holistic facilities maintenance services.

Your Company continues to explore the possibilities of expansion into new markets. Themain business for the company is to enter in to contracts (on turnkey basis or otherwise)for the transfer hire or lease takeover operate and maintain and provide servicesrelating to all types of designing and executing interiors and fit outs of IT/ITES andcommercial space on turnkey basis. In essence bare shell floor in a commercial complex canbe transformed into fully functional plug and play office in shorter time. There is alarge gap in qualified turnkey vendors exist in the market and your company has devisedmarketing strategy to make this gap as an opportunity where the company can grow inmultifold in short period of time. Your Company is proposed to enter into contract forleasing of equipments for Commercial/IT parks which has good potential for business growththereby increasing the revenue.

INDUSTRY OUTLOOK

Facility Management (FM)

Facility Management (FM) refers to the use of a third-party service providers tomaintain a part or entire building facility in a professional manner. It is increasinglygaining popularity amongst commercial as well as residential clients driven bymodernization rapid urban development and a growing awareness of advantages arising fromoutsourcing non-core business activities.

At present the organized FM services industry in India is valued at INR 50 thousandcrore constituting 10% of the total market. This is expected to grow to INR 1.25 lakhcrore by 2022. In India FM services companies have only tapped 25% of the addressablemarket with 75% of this work still being undertaken in-house a stark contrast to 49% atthe global level.

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 areas such as Delhi /NCR Mumbai Hyderabad Pune Chennai and Bengaluru andTier II and III cities like Coimbatore Visakhapatnam

Surat Nagpur Lucknow etc.

SHARE CAPITAL

The Authorised capital of the company is 400 Lakhs as on 31st March 2019. The paid upcapital of the Company as on 31st March 2019 stands at Rs. 306 Lakhs.

TRANSFER TO RESERVES

Your Company has not proposed any sum to the general reserve of the Company.

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) of sub-regulation (2) of regulation 46and para C D and E of Schedule V shall not apply in respect of a) the Listed entityhaving paid up Equity share capital not exceeding Rs. 10 Crore and Net-worth notexceeding of 25 Crore as on the last day of the Previous financial year: b)the Listedentity which has listed its specified securities on the SME Exchange.

Your Company is listed in BSE SME platform. Thus the compliance with provisions ofCorporate Governance in accordance with Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is not applicable to yourCompany.

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 IV 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 V to theBoard's Report:

• Disclosure under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014- Annexure VI

COMPOSITION & CATEGORY OF DIRECTORS:

The board comprises of 5 Directors; out of which 2 are Executive Director and 3 areNon-Executive and Independent Directors. All the Directors bring a wide range of skillsand experience to the board. The Independent Directors have confirmed that they satisfythe criteria prescribed for an Independent Director as stipulated under the provisions ofSection 149(6) of the Companies Act 2013. All directors are appointed by the members ofthe 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.

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. V Niranjan Rao Whole-Time Director Executive Director
Mr.Sudhakar P Director Independent Director
Mrs.Shama Prasanna Tipparaju Director Independent Director
Ms.Jayaraman Director Independent Director

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

During the FY 2018-2019 Six (6) meetings of the Board of Directors of the Company wereheld which is listed in the table. There is no gap between two meetings that exceed 120days.

Quarter I (April-June) Quarter II (July- September) Quarter III (October to December) Quarter IV (January March)
07-05-2018 10-08-2018 12-11-2018 02-01-2019
27-08-2018 18-03-2019

 

Name

Category

Number of Directorship in other public Ltd Companies

No. of Board Meetings attended during period ended 31/03/2019

No. of Committee Membership in other Public Limited Companies

Attend- ance Last AGM on

No. of Shares held

Mr.Rithwik Rajshekar Raman Executive Non- Independent Chairman Promoter cum Managing Director Executive Nil 5 Nil Yes 1102500
Mr.Niranjan Vyakarna Rao Non- Independent Whole-Time Director Nil 6 Nil Yes 13500
Mr.PSudhakar Non- Executive Independent Director 01 5 1 Yes Nil
Mrs.Shama Prasanna Tipparaju Non- Executive Independent Director Nil 1 Nil Yes. Nil
Mr.Jayaraman Non- Executive Independent Director Nil 5 Nil Yes Nil

In accordance with Regulation 26 (1) (b) of SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 Membership/Chairpersonship of only the Audit

Committees and Stakeholders' Relationship Committee in all Public Limited

Companies has been considered.

(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 2019 the Board consist of 5Members 1 of whom is a Managing Director 1 of whom is an Whole-time Director and the3others are Independent Directors. The Board periodically evaluates the need for change inits composition and size.The Policy of the Company on Director's

Appointment and Remuneration including criteria for determining qualificationspositive attributes independence of director and other matters provided under Section178(3) of the Companies Act 2013 adopted by the Board is appended as Annexure Vto this report. We affirm that the Remuneration paid to the director is as per the termslaid out in the said policy.

(D) Declaration by Independent Directors

The Company has received necessary declarations from all the Independent Directorsunder Section 149(7) of the Companies Act 2013 that they meet the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 notification issued bythe Ministry of Corporate affairs and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and the Board is satisfied that the Independent Directorsmeet the criteria of Independence as stipulated under statutory laws.

The Declaration by Independent Director is annexed as Annexure I Annexure II &Annexure III to this Report.

BOARD'S COMMITTEES:

Currently the Board has three Committees: the Audit Committee the Nomination and

Remuneration Committee and the Stakeholder's Relationship Committee. All

Committees are appropriately constituted

(i) The details of the composition of the Committees as 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.Sudhakar Peravali Member- Independent Director
Mr.Jayaraman Chairman-Independent Director
Nomination & Remuneration Committee Mrs.Shama Prasanna Tiparaju Member- Independent Director
Mr.Sudhakar Peravali Member- Independent Director
Mrs.Shama Prasanna Tiparaju Chairman-Independent Director
Stakeholders Relationship Committee Mr. Niranjan Vyakarna Rao Member- Whole time Director
Mr.Sudhakar Peravali Member- Independent Director

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

During the financial year under review Audit Committee Meetings were held on10-08-201812-11-2018 and 18-03-2019.The attendance of the members at the Audit Committeemeetings were as follows:

Attendance particulars
Name of the Member Meeting Held during their tenure Meeting Attended during their tenure
Mr.Jayaraman 3 3
Mr. P Sudhakar (Member) 3 3
Mrs.Shama Prasana Tiparaju (Member) 3 1

(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 27-08-2018 and 18-03-2019.The attendance of the members at the Nomination andRemuneration Committee meeting was as follows:

Attendance particulars
Name of the Member Meeting Held during their tenure Meeting Attended during their tenure
Mr.Jayaraman 2 2
Mrs.Shama Prasanna Tiparaju 2 Nil
Mr.P.Sudhakar 2 2

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

During the financial year under review Stakeholder Relationship Committee Meetingswere held on 07-05-2018 12-11-2018 and 18-03-2019 and the attendance of the members atthe Stakeholder 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 3 1
Mr. Niranjan Vyakarna Rao 3 3
Mr.P.Sudhakar 3 3

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.

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 2018- 19.

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 Mr.S.Vasudevan Company Secretaries in practiceChennai to conduct the Secretarial Audit of the Company for the period ended on 31stMarch 2019. The Secretarial Audit Report (in Form MR-3) is annexed as Annexure-VII tothis Report.

SECRETARIAL AUDITORS' OBSERVATIONS IN SECRETARIAL AUDIT 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 27th September 2018.The termof the present Auditor will conclude at the ensuing Annual General meeting of the Companyand 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 for theFinancial year 2019 -20.

STATUTORY AUDITORS' OBSERVATIONS IN AUDIT REPORT

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 2019 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.

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 or spent anyforeign exchange during the year under review.

(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 accounting standards havebeenfollowed and that no material departures have been made from the same;

(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand 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; and

(e) they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively.

Explanation. For the purposes of this clause the term "internal financialcontrols" means the policies and procedures adopted by the company for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information;

(f) they have devised proper systems to ensure compliance with the provisions of allapplicable 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 suggests stepsto be taken to control and mitigate the same.

EXTRACT OF ANNUAL RETURN

The details forming part of extract of Annual Return as on the financial year endedMarch 31 2019 pursuant to Section 92 (3) of the Companies Act 2013 in form MGT-9 aregiven in Annexure VIII forming part of this Report and is also available at thewebsite of the Company at www.rithwik.co.in

RELATED PARTY TRANSACTIONS

There were no any materially significant related parties' transaction with promotersand directors which were in conflict with the interest of the Company attracting theprovision of Section 188 of the Companies Act 2013 during the financial year.

Thus disclosure in Form AOC-2 is not required.

However Form AOC 2 related with particulars of contract or arrangements with relatedparties are annexed herewith as Annexure IX.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURT

There are no significant and material orders passed by the Regulators or Court thatwould impact the going concern status of the company.

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.

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

No material changes and commitments affecting the financial position of the companyoccurred.

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.

DEPOSITS

Your Company has not accepted any public deposits during the year under review.

APPRECIATIONS

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 Banks Stock Exchanges NSDL and CDSL. The Board wishesto express its grateful appreciation for the assistance and co-operation received fromVendors Customers Consultants Banks Financial Institutions and other BusinessAssociates. The Board deeply acknowledges the trust and confidence placed by the customersof the Company and above all the shareholders.

For and on behalf of the Board of Directors
Rithwik Facility Management Services Limited
Place: Chennai
Date: 26.08.2019 Sd/- Sd/-
Rithwik Rajshekar Raman Niranjan Vyakarna Rao
Managing Director Whole Time Director
DIN: 07836658 DIN: 02918882

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