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RKEC Projects Ltd.

BSE: 535017 Sector: Infrastructure
NSE: RKEC ISIN Code: INE786W01010
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RKEC Projects Ltd. (RKEC) - Director Report

Company director report

To

THE MEMBERS RKEC Projects Limited

Your Directors have pleasure in presenting before you the FifteenthAnnual Report of the Company along with audited Annual Financial Statements for the yearended 31st March 2020.

1. Financial Performance/Highlights (Standalone & Consolidated):

During the year under review the Company has earned net profit of Rs.278596444/-. There is notable increase in profit aftertax during the financial year2019-20 when compared to the net profit of the previous year. Your Directors are confidentthat the performance of the Company will be improved on all fronts in the currentFinancial Year.

The summarized Financial Results of the Company for the Year ended 31stMarch 2020 is as follows:

(Amt. in Lakh)

Particulars Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Revenue from orations 29793.41 24399.08 30398.24 22576.55
Other Income 258.29 146.59 294.71 133.27
Total Income 30051.71 24545.67 30692.96 22709.82
Less: Expenditure 26654.03 20187.34 23893.37 18545.44
Profit/(loss) before Interest Depreciation and Tax 5628.88 3948.32 5466.70 4031.11
Less: Finance Cost 1132.56 544.14 1132.56 584.16
Less: Depreciation & Amortization Cost 649.49 353.54 649.49 353.55
Prior Period Items - - - -
Less: Extraordinary items 1332.88 - 1332.88 -
Profit/(loss) Before Tax 3846.83 3460.64 3684.64 3226.67
Less: Tax Expenses 1060.86 1047.27 1130.18 992.55
Less: Deferred Tax -26.67 -9.14 -26.67 -9.13
Profit/(loss)after Tax 2785.96 2413.38 2518.13 2243.25

2. DIVIDEND:

Considering the effect of COVID-19 Pandemic and to conserve theresources of the Company Your Directors do not recommend any dividend for the FinancialYear 2019-20

3. Capital Structure

The paid up share capital of the Company is Rs.239906000/- (RupeesTwenty Three Crores Ninety Nine Lakhs Six Thousand only) divided into 23990600 (TwoCrore Thirty Nine Lakh Ninety Thousand and Six Hundred) equity shares of Rs.10/- each. Theaforesaid Equity Shares is listed on NSE-Emerge Platform.

Further the Company has not issued shares with differential votingrights nor has granted any stock options or sweat equity.

4. Consolidated Financial Statement

The Financial Statement of the Company for the Financial Year 2019-20are prepared in compliance with the applicable provisions of the Companies Act 2013Accounting Standards and as prescribed by Securities and Exchange Board of India (ListingObligations and Disclosure Requirement) Regulations 2015. The consolidated FinancialStatement has been prepared on the basis of the audited Financial Statements of theCompany RKEC Projects Limited and its JV Firms as approved by the respective Board ofDirectors/Management. Pursuant to the provisions of Section 136 of the Act applicablerules relating to Accounting Standards the Financial Statements of the Company and theConsolidated Financial Statements along with all relevant documents and Auditors Reportthereon form part of this Annual Report.

5. Transfer of Unclaimed Dividend to Investor Education and ProtectionFund

Since there was no unpaid/unclaimed dividend the provisions of Section125 of the Companies Act 2013 do not apply.

6. Change in the Nature of the Business of the Company

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

7. Deposits

The Company has not accepted or renewed any amount falling within thepurview of provisions of Section 73 of the Companies Act 2013 ("the Act") readwith the Companies (Acceptance of Deposit) Rules 2014 during the period under review.Hence the requirement for furnishing the details of deposits which are not in compliancewith Chapter V of the Act is not applicable.

8. Transfer to Reserves

The Directors have decided to retain the entire amount of Rs. 29793.41lakhs in the retained earnings.

9. Material Changes and Commitment if any Affecting the FinancialPosition of the Company occurred between the Ends of the Financial Year to which theseFinancial Statements relate and the Date of the Report.

There have been no material changes and commitments except Pandemicwhich affect the financial position of the Company that have occurred between the end ofthe Financial Year of the Company to which the Financial Statements relate and the date ofthis Report.

10. Statement on Formal Annual Evaluation of Board

Nomination and Remuneration Committee annually evaluates theperformance of individual Directors Committees and of the Board as a whole in accordancewith the formal system adopted by it. Further the Board also regularly in their meetingheld for various purposes evaluates the performance of all the Directors Committees andthe Board as a whole. The Board considers the recommendation made by Nomination andRemuneration Committee in regard to the evaluation of Board Members and also tries todischarge its duties more effectively. Each Board Members contribution theirparticipation was evaluated and the domain knowledge they bring. They also evaluate themanner in which the information flows between the Board and the Management and the mannerin which the board papers and other documents are prepared and furnished.

11. Disclosure of Orders Passed by Regulators or Courts or Tribunal

No orders have been passed by any Regulator or Court or Tribunal whichcan have impact on the going concern status and the Company's operations in future.

12. Statement Concerning Development and Implementation of RiskManagement Policy of the Company

The Company has developed and implemented risk management policy whichis displayed on the Company's website www.rkecprojects.com.

13. Particulars of Energy Conservation Technology Absorption andForeign Exchange Earning and Out-go:

A. Conservation of Energy:

Ours is not a Company with high energy consumptions. Further there areno permanent installationsthe work done at various projects at various conditions and forshorter period We however could achieve a saving of energy cost by various measuressuch as installation of LED lights air conditioners with high star ratings.

B. Technology Absorption:

We have been improving upon our designs input materials andmethodological upgradation on a consistent basis. Further we do not have any technologyimported..

C. Foreign Exchange Earning & Out-Go:

Foreign Exchange Earning: NIL Foreign Exchange Outgo: NIL

14. Corporate Social Responsibility

A detailed outline of the Corporate Social Responsibility (CSR) policyof the Company on CSR activities

during the Financial Year 2019-20 are set out in "Annexure -1A" of this report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014. The CSR Policy is available on the website of theCompany www.rkecprojects.com.

15. Particulars of Loans Guarantees or Investments Made under Section186 of the Companies Act 2013

During the year the Company has made no investment falling under theprovision of Section 186 of the Companies Act 2013 read with rules made there under. TheCompany has not given loan guarantee or provided security in connection with the loan toany other body corporate or person. The members are requested to refer the notes to theFinancial Statement which are forms the part of the Annual Report for detailedinformation.

16. Particulars of Contracts or Arrangements made with Related Parties

Particulars of Contracts or Arrangements made with related partiesreferred to in section 188 (1) of the Companies Act 2013 in the prescribed form (FormAOC-2) is appended as Annexure- IB" to the Board's Report.

17. Directors

As per the provisions of Companies Act 2013 Smt. G Parvathi Devi(DIN: 00094961) retires by rotation at the ensuing Annual General Meeting and beingeligible seeks reappointment. Based on the recommendation of the nomination andremuneration committee the Board recommends her reappointment.

The Independent Directors of the Company have submitted the declarationof independence pursuant to Section 149(7) of the Companies Act 2013 stating that theymeet the criteria of independence as provide in section 149 (6) of the Companies Act 2013and Regulation 25 of the Listing Regulations.

Lt Gen P R Kumar was appointed as an Additional director andindependent director considering his integrity expertise and experience effective July30 2020 for a period of five years subject to the approval of the shareholders at the15th AGM. The notice convening the meeting sets out the details of his appointment.

Mr G.V.Rammmohan was appointed as additional director of the company on29th May 2019 and board appointed him as whole time director with effect from 29thAugust 2019 and in the annual general meeting held on 26th September 2019 membersapproved such appointment.

18. Key Managerial Personnel

Shri. G Radhakrishna-Managing Director Brig G S Narayana VSM (Retd)-Chief Financial Officer and CS Deepika Rathi- Company Secretary & Compliance Officerare Key Managerial Personnel of the Company in accordance with the provisions of section 2(51) and Section 203 of the Companies Act 2013 read with Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014.

Mr. J. Vijay Kumar resigned as Company Secretary and in his place Mrs.Deepika Rathi was appointed as Company Secretary and Compliance Officer with effect from6th Dec 2019. Except this there are no other changes in the Key Managerial Personnel(KMP) during the year under review.

19. Meetings of the Board of Directors

The Board met 4 times in the Financial Year 2019-20 viz 29 May 201929 Aug 2019 14 Nov 2019 and 05 Mar 2020.

Details of Directors as on 31 Mar 2020 and their attendance at theBoard Meetings and Annual General Meeting (AGM) during the Financial Year 2019-20 aregiven below:

Name of Directors Designation No. of Board Meetings held No. of Board Meetings attended Attendance at the last AGM
Shri G Radhakrishna Chairman & Managing Director 4 4 Yes
Smt G Parvathi Devi Whole Time Director 4 4 Yes
Shri G V Rama Mohan Whole Time Director 4 3 Yes
Vice Admiral Satish Soni PVSM.AVSM NM (Retd) Independent Director 4 3 No
Shri T Lucas Peter IRS (Retd) Independent Director 4 4 No
Brig JK Rao Independent Director 4 4 Yes
Smt G Sita Ratnam Director 4 3 No

20. Meetings of the Committees Audit Committee

Name of Members No. of Committee Meeting entitled No. of Committee Meetings Attended
Shri T Lucas Peter IRS (Retd) 4 4
Vice Admiral Satish Soni PVSM.AVSM NM (Retd) 4 3
Shri G Radhakrishna 4 4

Nomination & Remuneration Committee

Name of Members No. of Committee Meeting entitled No. of Committee Meetings Attended
Shri T Lucas Peter IRS (Retd) 1 1
Vice Admiral Satish Soni PVSM.AVSM NM (Retd) 1 1
Shri G Radhakrishna 1 1

Corporate Social Responsibility (CSR) Committee

Name of Members No. of Committee Meeting entitled No. of Committee Meetings Attended
Shri T Lucas Peter IRS (Retd) 2 2
Vice Admiral Satish Soni PVSM.AVSM NM (Retd) 2 2
Shri G Radhakrishna 2 2

21. Directors Responsibility Statement

In terms of Section 134 (5) of the Companies Act 2013 the directorswould like to state that:

I. In the preparation of the annual accounts the applicable accountingstandards have been followed.

II. The directors had selected such accounting policies and appliedthem consistently and made judgments and estimates that were reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year on 31 March 2020 and of the profit of the Company for the year underreview.

III. The directors had 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 had prepared the annual accounts on a going concernbasis.

V. The directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.

VI. The directors had devised proper system to ensure compliance withthe provisions of all applicable laws and that such system were adequate and operatingeffectively.

22. Vigil Mechanism Policy for the Directors and Employees:

Pursuant to the provisions of Section 177(9) of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Board ofDirectors of the Company has established Vigil Mechanism/Whistle Blower Policy forDirectors and employees of the Company to report genuine concerns regarding unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conductand Ethics Policy. The said mechanism also provides for direct access to the Chairpersonof the Audit Committee in appropriate or exceptional cases. The Board of Directors of theCompany frequently reviews the Vigil Mechanism/Whistle Blower Policy in order to ensureadequate safeguards to employees and Directors against victimization. The said policy isalso available on the website of the Company at www.rkecprojects.com.

23. Details of Investor's Grievances/ Complaints:

The Company has not received any complaints during the year. Thepending complaints of the Shareholders/ Investors registered with SEBI at the end of thecurrent Financial Year ended on 31st March 2020 are NIL.

There were no pending requests for share transfer/dematerialization ofshares as of 31st March 2020.

24. Adequacy of Internal Financial Controls

The Company has placed an adequate Internal Financial Controls withreference to Financial Statements. The Board has inter alia reviewed the adequacy andeffectiveness of the Company's Internal Financial Controls relating to its FinancialStatements.

During the year such Controls were tested and no reportable materialweakness was observed.

25. Compliance with the Secretarial Standards

The company has complied with applicable provisions of Secretarialstandards issued by the Institute of Company Secretaries of India and approved byGovernment of India under section 118 (10) of the Companies Act 2013.

26. Protection of Women at Workplace

The company has formulated a policy on prevention of sexual harassmentof women at workplace in accordance with The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.

During the Financial Year ended 31st March 2020 the Company has notreceived any complaints pertaining to sexual harassment.

27. Subsidiaries Joint Ventures and Associate Companies

There are no subsidiary and associate companies which have become soand ceased as such during the financial year under review. The Company has entered intoJoint Venture with M/s Suryadevara

Engineers & Contractors Vijayawada M/s Qingdao ConstructionEngineering Group Co. Ltd M/s Rapid Net Sports System and M/s N.G. BHOIR & M/sSamudra Dredging Private Limited. The statement containing the salient feature of the JVsis given in "Annexure - 1C".

28. Auditors

Statutory Auditors

M/s. Brahmananda Reddy & Associates Chartered Accountants(FRN:016662S) Visakhapatnam the present Auditor of the Company has submitted theirresignation vide their letter dated 27th August 2020.

The Company has received a notice from a Member of the Companysignifying his intention to propose the appointment of M/s. SARC & AssociatesChartered Accountants (FRN: 006085N) as Statutory Auditors to hold office from theconclusion of the 15th Annual General Meeting up to the conclusion of the 20th AnnualGeneral Meeting.

M/s. SARC & Associates Chartered Accountants (FRN: 006085N)Visakhapatnam have conveyed their willingness to accept appointment as Statutory Auditorsof the Company at the fifteenth Annual General Meeting and have further confirmed theireligibility under section 139 of the Companies Act 2013 for the appointment.

M/s Brahmananda Reddy & Associates Chartered Accountants (FRN:016662S) Visakhapatnam has conveyed their no objection to the appointment of M/s. SARC& Associates Chartered Accountants (FRN: 006085N) Visakhapatnam and accordingly didnot want to make representations either in writing or in person.

The Board of directors of the company proposes to appoint M/s. SARC& Associates Chartered Accountants (FRN: 006085N) as the Statutory Auditors of thecompany at the ensuing annual general meeting for a period of five years till theconclusion of 20th Annual General Meeting pursuant to the provisions of section 139 of theCompanies Act 2013.

Secretarial Auditor

M/s P N Rao & Co. Practicing Company Secretaries Visakhapatnamwas appointed as Secretarial Auditors of the Company to conduct Secretarial Audit pursuantto the provisions of Section 204 of

the Companies Act 2013 for FY 2019-20. Secretarial Audit Report givenby M/s P N Rao & Co Company Secretaries Visakhapatnam forms part of this report andis marked as "Annexure-ID"

Board noted the observations/qualifications made in the report by theSecretarial auditor and desired to strictly adhere to the compliance requirements underthe Companies Act 2013 and filing of various documents within the stipulated time.

Cost Auditors

The Company has appointed M/s Uppaiapati & Associates Cost &Management Accountants as Cost Auditors as pursuant to Section 148 of the Companies Act2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014.

29. Reporting of frauds by Auditors:

There have been no instances of fraud reported by the Auditors underSection 143(12) of the Act.

30. Particulars of Employees

The information required under Section 197 of the Companies Act 2013read with rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is provided in the Report and marked as "Annexure - IE".No employee of the Company was in receipt of the remuneration exceeding the limitsprescribed in the rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.

31. Extract of the Annual Return

The extract of the annual return of the Company in Form MGT-9 for theFinancial Year ended 31st march 2020 is given in annexure-2 and forms part of the report.

Pursuant to the provisions in sub-section (3) of Section 134 of theCompanies Act 2013 the annual return referred to in sub-section (3) of section 92 hasbeen placed on the website of the Company. www.rkecprojects.com..

32. Corporate Governance

Your Company has been complying with the principals of CorporateGovernance over the years and is committed to the highest standards of compliance.Pursuant to regulation 15(2) of the SEBI (LODR) Regulations 2015 the compliance with thecorporate governance provisions as specified in regulations 17 to 27 and clauses (b) to(i) of Regulation 46 (2) and para C D and E of schedule V shall not apply to the listedentity which has listed its specified securities on the SME Exchange. Therefore theCorporate Governance Report is not applicable on the Company and therefore not provided bythe Board.

33. Event Based Disclosures

The Company has not issued any shares with differential Voting Rightsor Sweat Equity shares or shares under ESOP. The Company has not provided any money to itsemployees for purchase of its own shares. Hence the Company has nothing to report inrespect of Rule 4(4) Rule (13) Rule 12(9) and Rule 16 of the Companies (Share Capital& Debentures) Rules 2014.

34. Listing

The equity shares of the company are listed on SME platform of NSE(EMERGE) and the Company has paid annual listing fees for the year 2019-20.

35. Management's Discussion and Analysis Report

The Management Discussion and Analysis Report for the Financial Yearended 31 March 2020 under review as stipulated under Regulation 34(2)(e) of the ListingRegulations is given as an annexure to this report.

36. Acknowledgements

Your Directors place on record their sincere thanks to BankersBusiness Associates Consultants and various Government Authorities for their continuedsupport extended to your Companies activities during the year under review. Your Directorsalso acknowledges the shareholders for their support and confidence reposed on yourCompany.

However Your Directors have observed that the Bank of Baroda has notbeen rising to the occasion to support the Company with suitable credit limits despiteholding high securities. This has curtailed the growth of the Company.

By Order of the Board of Directors
For RKEC Projects Limited
Sd/-
G Radhakrishna
Date: 4th September 2020 Chairman & Managing Director
Place: Visakhapatnam DIN:00073080

.