Your Directors take pleasure in presenting their 26th Annual Report onthe business and operations of the Company together with the Audited Statement ofAccounts for the year ended 31st March 2021.
1. Financial Highlights (Standalone and Consolidated)
During the year under review the performance of your Company'sstandalone and consolidated results are as under:
(Rs In Crores)
|Particulars ||Standalone ||Consolidated |
| ||For the year ended 31st March 2021 ||For the year ended 31st March 2020 ||For the year ended 31st March 2021 ||For the year ended 31st March 2020 |
|Turnover ||477.90 ||575.69 ||513.11 ||600.02 |
|Profit/(Loss) before taxation ||22.16 ||34.79 ||22.12 ||33.65 |
|Less: Tax expense ||6.62 ||15.49 ||6.62 ||15.50 |
|Profit/(Loss) after tax ||15.53 ||19.30 ||15.50 ||18.16 |
|Add: Balance B/F from the previous year ||171.54 ||151.09 ||180.89 ||158.99 |
|Balance Profit / (Loss) C/F to the next year ||187.08 ||171.54 ||189.54 ||180.89 |
2. Operations and Performance Review
Your Company's performance has been severely impacted in FY2020-21 dueto the impact of the Covid-19 pandemic which has resulted in the reduction of revenue andprofit as compared to FY2019-20.
The onset of the pandemic subsequent restrictions and stringentlockdowns from the beginning of April 2020 impacted the operations and performance for the1st and 2nd quarters of FY 2020-21. The operations of the Company started to get back ontrack in the 3rd and 4th quarters leading to growing normalisation of performance.However the operations of the Company was again effected due to the second wave whichhas adversely impacted revenue and profit in the 1st quarter of FY2021-22.
Your Company has taken many initiatives for relief in Covid-19 pandemicand also raised awareness and sensitisation. The Company has also taken steps forvaccination of the staff and workers. Further the Company has ensured that its projectsites and office establishments are working with the necessary safety and hygieneprotocols. Further your Company ensures compliance of instructions and guidelines oflocal authorities.
During the year under review revenue from operations decreased to Rs.477.90 crore from Rs. 575.69 crore in the previous year reflecting decrease of 16.99%.
Profit after tax stood at Rs. 15.53 crore as against Rs. 19.30 crore inthe previous year. The Company's net worth increased to Rs. 267.81 crore as on 31st March2021 as compared to Rs. 236.17 crore as on
31st March 2020. The increase in net worth is also owing to increase inthe equity capital and share premium received on allotment of equity shares.
Consolidated revenues for the year under review were Rs. 513.11 croreas against Rs. 600.02 crore in the previous year recording a decrease of 14.48% from thelast year. Consolidated profit after tax was Rs. 15.50 crore against Rs. 18.16 crore inthe previous year. The Company's consolidated net worth increased to Rs. 286.46 crore ason 31st March 2021 from Rs. 261.72 crore as on 31st March 2020. The increase in net worthis also because of increase in the equity capital and share premium received on allotmentof equity shares.
In accordance with the Accounting Standard AS-21 on consolidatedfinancial statements the audited consolidated financial statements are also providedalong with standalone financial statement in the Annual report.
3. Company's Affairs and Future Outlook
The operations and revenue of the Company at the end of the financialyear stood severely affected due to the Covid-19 pandemic. The Company was on the path ofachieving better performance as compared to the last financial year; however lockdownsand mobility restrictions during the period resulted in abrupt and unplanned stoppage ofwork at sites which substantially impacted the financial performance and profitabilityduring the first three quarters of FY 2020-21.
The coronavirus pandemic has deeply impacted the growth potential ofthe Indian economy which recorded a negative growth
The Company has kept it focus on the identified area to retain itsmomentum even during the challenging time. The Company continues to have an optimum mix ofprojects which imparts stability and growth both in terms of the revenue and margins.
During FY2020-21 your Company had order inflows of around Rs. 2147crore and the total order book size in hand as on 31st March 2021 was Rs. 3113.25 crore.
Your Company has received the following major contracts duringFY2020-21 and till the date of this report:
Improvements to Chalakudy-Anamala Road (SRs 21) BC overlay fromCh. 56/000 - 78/175 and providing BM & BC from Ch. 78/175 - 88/403 in ThrissurDistrict (Kerala Road Fund Board)
Construction of multi-storied office cum shopping complex and 36residential flats under self-financing scheme at EVN Road Periyar Nagar Erode (TamilNadu Housing Board)
Smart Road at Sakthi Theatre Road in Ward No-8 for a length of1.265 in Tiruppur Smart City Under Smart City Mission
Smart Road at Andipalayam Office Junction to Parapalayam MainRoad in Ward No-59 for a length of 1.150 km under Tiruppur Smart City Under Smart CityMission
Smart Road at Gandhiji Main Road in Ward No-60 for a length of0.530 KM Smart Road at Kumaran Main Road in Ward No-60 for a length of 0.620 KM SmartRoad at S.R. Nagar South 60ft Road in Ward No-60 for a length of 0.550 KM in TiruppurSmart City Under Smart City Limited
Smart Road at S.R. Nagar North Pillayar Kovil Street in Ward No-60 for a length of 0.450 KM Smart Road at Karuppa Goundanpalayam Road in Ward No- 52 fora length of 1.060 KM Tiruppur Smart City Under Smart City Mission
Smart Road at Kallangadu Road in Ward No-52 for a length of0.970 KM Smart Road at Subash School to Murugampalayam Main Road Junction in Ward No-58for a length of 0.235 KM in Tiruppur Smart City Under Smart City Limited
Development of sea port terminal at swaraj Dweep (HavelockIsland) in Andaman & Nicobar Islands (Ministry of Shipping Andaman Lakshadweep HarbourWorks Port Blair)
Construction of PEB structural sheds along with associated civilworks for construction of POL terminal at Dharmapuri VDPL Project (Hindustan PetroleumCorporation Limited)
Construction of multi-storied office cum commercial complex inS. No. 4/1 & 8/1 part of Urur Village Besant Nagar Velachery Taluk ChennaiDistrict and construction of office cum commercial complex in S.No. 72/1 2 (part) ofThiruvanmiyur Village Velachery Taluk Chennai District.( Tamil Nadu Housing Board)
Planting saplings along the Cooum River banks under IntegratedCooum River Eco-restoration Project for a length of 60 km (30 km on both banks from rivermouth to Paruthipattu) (Chennai Rivers Restoration Trust)
Upgrading Cuddalore-Madapattu Section of SRs 09 (Km 3+000 to Km41+910) from km 3+000 to 21+100 and Km 28+500 to 41+910 to two-lane with paved shouldersand construction of one bypass of 5.850 km from km 22+650 to 28+500 and maintenance ofentire project stretch of 37.36 km for 7 years (in Tamil Nadu on Engineering Procurementand Construction Mode) (Chennai-Kanyakumari Industrial Corridor Project)
Construction of integrated storm water drain in North Koratturlake watershed in Kosasthalaiyar basin in the extended areas of Greater ChennaiCorporation
Rehabilitation of irrigation infrastructures in G.A. Main CanalL.S. from 30.430 Km to 45.290 Km and G.A. No.4 Channel G.A. No.5 Channel G.A. No.5A RearChannel and Neivasal and Thenpathy Branch Channels with Feeding Tanks in Papanasam andOrathanadu Taluks of Thanjavur District (Water Resources Department)
Construction of a Protection Wall on the left bank of theKollidam River near Akkarai Jeyankondapattinam in Chidambaram Taluk in Cuddalore District(Water Resources Department)
Strengthening and Widening (Four Lane) of Tirunelveli -Sengottai - Kollam Road of SH-39 from Km 5+000 to Km 27+700 (Tamil Nadu Road SectorProject)
Extension Renovation and Modernisation of Lower Bhavani ProjectMain canal from Mile 18-1-375 to 39-0-000 in Erode District (Water Resources Department)
Construction of integrated storm water drain in Retteri SouthSurplus Watershed and Captain Cotton Canal Watershed of Kosasthalaiyar basin in theextended areas of Greater Chennai Corporation.
Construction of integrated storm water drain in Puzhal SurplusNorth Watershed of Kosasthalaiyar basin in the extended areas of Greater ChennaiCorporation.
Upgrading of Malliyakarai-Rasipuram-Tiruchengode - Erode Road(SRs 79) from km 83/350 to km 91/100 to Four lane with paved shoulders and Construction ofTwo Lane Elevated Corridor from Ch. 91/100 to Km 94/170 including Service road on eitherside and providing ramp to Sankagiri Pallipalayam Road from km 15/367 to km 15/700 (DesignChainage 0/000 to 0/333) and maintenance of entire project stretch of 11.153 km for aperiod of 7 years"(in the State of Tamil Nadu on Engineering Procurement andConstruction (EPC) Mode
Upgrading Kanchipuram - Arakkonam-Thiruthani Road section ofSH-58 from km 66.940 to km 86.345 km103.260 to km 108.719 and construction of Arakkonambypass from km 86.345 to km 103.260 (16.915km) to two (2) lane with paved shoulders for atotal length of 41.779 km and maintenance of entire project stretch of 41.779 km for 7years.
Upgradation of Mohanur-Namakkal-Senthamangalam - Rasipuram Road(SRs 95) from km 25/000 to km 54/000 (Design Ch. 25+065 to Ch. 56+565) to two lane withpaved shoulders including construction of new bypasses at 5 locations and maintenance ofentire project stretch of 31.500 km for 7 years.
Jal Jeevan Mission for 2020-2021: CWSS to 442 Habitations inModakurichi Union in Erode District.
Your Company has thus increased its order book and is looking forwardfor execution of the projects in hand. It is expected that FY 2021-22 will show improvedperformance.
The Government has continued its thrust on infrastructure developmentand spending. Of the total capital outlay provided in the budget estimates for FY2022 theinfrastructure segment occupies a share of 48.56%. The details of the affairs of theCompany and future outlook has also been provided at other places including ManagementDiscussion and Analysis Report forming part of this report.
4. Change in Nature of the Business
There was no change in the nature of the business of the Company andits subsidiaries during the year.
Your Directors regret to inform that owing to reduction of profitduring FY2020-21 and with a view to conserve resources and liquidity owing to requirementsof additional funds for the projects of the Company the Board has decided againstrecommendation of dividend for FY2020-21.
6. Transfer to Reserves
The Company has not transferred any amount to reserves during the year.All profit is carried forward in the P&L Account.
7. Share Capital
On July 14 2020 the Company allotted 4000000 warrants to promotersat a price of H90 each and each warrant is convertible into equity shares of the Companyof H10 each at premium of H80 per share. The Company had received 25% of the aggregateconsideration at the time of allotment and the remaining consideration is required to bepaid and the option of conversion needs to be exercised by warrant-holder within a periodof 18 months from the date of allotment. The Company on 4th March 2021 allotted1050000 fully paid-up equity shares of H10 each on conversion of 1050000 warrants onreceipt of full consideration towards these warrants and exercise of option of conversion.Accordingly 1050000 equity shares of H10 each would be deemed to have been allotted ata premium of H80 each. The allotted shares ranked pari-passu with the existing equityshares of our Company in all respects including dividend. As on date of report 2950000warrants are outstanding for conversion into equity.
Details of warrants are as below:
|Sl No Name of the Allottee ||No. of Warrants Allotted ||No. of Warrants Converted into Equity Shares ||No. of Warrant Outstanding |
|1. P. Arulsundaram ||2925000 ||725000 ||2200000 |
|2. A Nithya ||1075000 ||325000 ||750000 |
|Total ||4000000 ||1050000 ||2950000 |
Warrants were allotted in compliance to the provisions of CompaniesAct 2013 and SEBI (ICDR) Regulations 2018. Company has already received listing andtrading approval for 1050000 Equity Shares allotted on conversion of Warrants.
Your Company requires additional working capital to execute multipleprojects. Your Company has therefore decided to raise a sum not exceeding Rs. 48 croreby way of an issue of equity shares to equity shareholders on Rights basis in accordancewith the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2018. The Boardhas approved the same at its meeting dated 17th February 2021.
Authorized Share Capital:
Your Company has decided to increase the authorized capital to Rs. 50crore. The increase in authorized capital would require approval of members and theCompany shall convene an Extraordinary General Meeting on September 13 2021 to seekapproval of shareholders of the Company.
8. Annual Return
The Annual Return to the extent can be filled up in the e-form MGT - 7for FY2020-21 is provided on the Company's website at web-link http://www.rppipl.com/ andmay be treated as part of the Board Report.
9. Board of Directors and Meetings of the Board
The Board is properly constituted with an appropriate mix of executivenon- executive and independent directors to maintain the independence of the Board and toseparate the Board functions of governance and management.
The Board is constituted in compliance with Section 149 of theCompanies Act 2013 and Regulation 17 of SEBI (LODR) Regulations 2015. The total strengthof the Board comprised of six directors during financial year 2020-21. Board comprised oftwo executive promoter directors one non-executive director and three independentdirectors with one women director being part of during financial year 2020-21. Thecomposition of the Board was proper throughout the period as per Companies Act 2013 andSEBI (LODR) Regulation 2015. No changes took place in the Board during the financial year2020-21 and till the date of report.
More details about the Board including the profile of directors areprovided in the Corporate Governance Report forming a part of the Board Report.
During the financial year 2020-21 eight Board meetings were held on19th May 2020 30th June 2020 29th July 2020 15th September 2020 12th November 202030th January 2021 14th February 2021 and 17th February 2021.
The attendance of Directors in the Board meeting is provided below:
|Name of the Director ||Number of Meetings Held ||Number of Meetings Entitled To Attend ||Number of Meetings Attended |
|Mr. P Arulsundaram ||8 ||8 ||8 |
|Mrs. A Nithya ||8 ||8 ||8 |
|Mr. P Muralidasan ||8 ||8 ||8 |
|Mr. K Rangasamy ||8 ||8 ||8 |
|Mr. P R Sundararajan ||8 ||8 ||8 |
|Mr. R. Kalaimony ||8 ||8 ||1 |
10. Loan Guarantees and Investments under Section 186
During the financial year 2020-21 the Company has not made anyinvestment granted any loan or extended any guarantee or provided any security inconnection with the loans to other companies.
Company has incorporated following joint venture in form of partnershipfor bidding various project and has also been awarded with the contract:
1. RPP RK JV
2. RPP Renaatus JV
3. RPP Dhanya JV
4. RPP Sathyamoorthy JV
5. RPP SMC JV
6. Renaatus RPP JV
7. P&C RPP JV
The present investment along with earlier investment is within thelimit of Section 186 of the Companies Act 2013. Further Company has not made any loan orguarantee or security or investment in subsidiaries including wholly owned subsidiaries orjoint venture during FY2020-21.
Please refer to note no. 6 of Notes to Accounts for details of allinvestments made by the Company.
11. Contracts or Arrangements with Related Parties
The particulars of contracts or arrangements with related partiesreferred to in Section 188(1) of the Companies Act 2013 for the financial year 2020-21in the prescribed format AOC - 2 has been enclosed with this report as Annexure - 1.
The Company has entered into various bidding agreement during thefinancial year 2020-21 with few related party for making of bidding to various GovernmentDepartments. These all agreements have been in ordinary course of business and in arm'slength basis as acceptable in this domain. Further similar/ same terms and conditions hasalso been agreed in other agreement which are with non-related party. As per the biddingagreement formal agreement needs to be entered on award of the work by the GovernmentDepartment. These bidding are made with related party to meet out variouspre-qualification/ qualification and other requirement as stated in the tender includingtechno-financial or financial qualifications.
Various contract has been awarded to these JVs based on bidding madeand the Company has entered into agreement with these parties based on terms andconditions of the tender documents. Also these JVs in certain cases have agreed forsub-contract to related party. These are also in similar terms as in case with unrelatedparty. Company has duly obtained the approval of Audit Committee/ Board for theseagreement. Further Company would be seeking approval of members for material relatedparty transection as per SEBI LODR Regulation 2015. However all these contracts/agreements are in ordinary course of business and at arm's length price and exempted fromany approval under Companies Act 2013.
12. Material Changes Affecting the Financial Position of the Company
There are no material changes affecting the financial position of theCompany which have occurred between the end of the financial year of the Company i.e.31st March 2021 and till the date of the Directors' Report. However the effect of thepandemic caused by Covid-19 has not been considered as it affects the general economy asmuch to the Company and beyond the control of the Company. Further Covid-19 continues toaffect the operations and business of the Company as it is supposed to comply with termsand conditions imposed at all its site.
13. Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
Information as per Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8(3) of the Companies (Accounts) Rules 2014 relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo has been enclosed with thisreport as Annexure - 2.
14. Subsidiaries Joint Venture and Associate
The Company at the end of financial year has a total of sixsubsidiaries out of which four are wholly owned subsidiaries (WOS) one is step- downsubsidiary and one company though subsidiary is in nature of joint venture. RPP Annai JVPrivate Limited has been incorporated as subsidiary as Company holds 51% in it but it is ajoint venture company. Company also has one joint venture outside India namely R.PP InfraProjects Myanmar Ltd which has been incorporated in Myanmar under Myanmar Companies Act2017 and Company holds 49% in same.
Company has incorporated following joint venture partnership/association of during the financial year 2020-21 to bid and take up various contract tomeet the eligibility criteria in the tenders:
i. RPP Dhanya JV
ii. RPP Renaatus JV
iii. RPP Sathyamoorthy JV
iv. RPP SMC JV
v. RPP RK JV
vi. Renaatus -RPP JV
vii. P&C RPP JV
Further your Company from time to time enters into bid arrangement/understanding for quoting for projects or undertaking projects under joint venture andthey may be incorporated as company/ partnership/ association of persons in case of award/allotment of project or otherwise as may be decided by the Company.
During the financial year one of WOS namely R.PP Energy SystemsPrivate Limited was divested. The entire stake of the WOS was sold for a consideration ofRs. 3 Lakhs on 30th January 2021. The WOS from the date of its incorporation was anon-operative and was never material subsidiary of R.PP Infra Projects Limited.
A brief of the subsidiaries is provided below for your information.
R.P.P Infra Projects (Lanka) Limited Sri Lanka
R.PP Infra Projects (Lanka) Limited is a wholly owned subsidiary ofyour Company based in Sri Lanka. The Company during 2014-15 successfully completed ahousing project for the internally displaced people of Sri Lanka's Northern Province forwhich Hindustan Prefab Limited were the Project consultant.
The Company has not taken up any new project during the year underreview and has no operating revenues during the financial year ended 31st March 2021. TheCompany recorded a net Profit of Rs. 0.00 Crore for the year ended 31stMarch 2021.
R.P.P Infra Overseas PLC Mauritius
R.PP Infra Overseas PLC is a wholly owned subsidiary of your Companybased in Mauritius. The principal activity of the Company is to provide infrastructureproject- related consultancy services and SPV for foreign investment.
The Company had no operating revenues during the financial year ended31st March 2021. The company recorded a net loss of Rs.0.01 Crore.
Sanskar Dealcom Private Limited India
Sanskar Dealcom Private Limited a wholly owned subsidiary of yourCompany is engaged in activities that includes being distributors agents tradersmerchants contractors brokers and otherwise deal in merchandise and articles of allkinds including clearing agents freight contractors forwarding agents licensing agentsgeneral brokers and to carry any kind of commercial business.
The Company had no operational revenues during the year ended 31stMarch 2021 and had a very insignificant net loss for the year.
Greatful Mercantile Private Limited India
Greatful Mercantile Private Limited a wholly owned subsidiary ofyourCompany is engaged in activities that include being distributors agents tradersmerchants contractors brokers and otherwise deal in merchandise and articles of allkinds including clearing agents freight contractors forwarding agents licensing agentsgeneral brokers and to carry any kind of commercial business.
The Company had no revenues from operations during the year ended 31stMarch 2021 and had a very insignificant net loss for the year.
Lunkar Finance Private Limited
Lunkar Finance Private Limited is a step-down subsidiary of yourCompany. Sanskar Dealcom Private Limited and Greatful Mercantile Private Limited holds theentire paid- up capital of this company and hence step-down subsidiary of your Company. Itis a non-deposit
The Company had no operational revenues during the year ended 31stMarch 2021 and had a very insignificant net loss for the year.
The Board of Director at Meeting dated 1st June 2021 has decided tovoluntarily surrender the Certificate of Registration (CoR) issued by the Reserve Bank ofIndia (RBI) and same was intimated to RBI .
RPP-Annai (JV) Private Limited
RPP- Annai (JV) Private Limited has been incorporated on 10th July 2019to execute a project in joint venture with Annai Infra Developers Limited. The entire paidup capital of this company is held in ratio of 51% and 49 % respectively between thecompany and joint venture partner.
The Company had operational revenues Rs. 35.22 Crores during the yearended 31st March 2021 and had net loss Rs.1.9 Lakhs for the year.
R.P.P Infra Projects Myanmar Ltd
RPP Infra Projects Myanmar Ltd is an associate of your Company and hasbeen incorporated under Myanmar Companies Act 2017 as a private limited by Shares. TheCompany had no operational revenues during the year ended 31st March 2021. The Companyname has been changed to R.P.P Infra Projects Myanmar Ltd with effect from 21st February2020.
The Company has kept the financial statements along with the auditreports of all these subsidiaries open for inspection at the registered office of theCompany. Further the Company will provide a copy of financial statements to anyshareholder who asks for it. Further pursuant to Section 136 of the Act the financialstatement of the Company consolidated financial statement along with the relevantdocuments and separate audited financial statements in respect of subsidiaries areavailable on the website of the Company.
As required under the Section 129(3) of Companies Act 2013 andRegulation 34(2) of SEBI (LODR) Regulation 2015 a consolidated financial statementsalong with Audit Report thereon of the Auditors forms a part of the financial statement.Further statements pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5of Companies (Accounts) Rules 2014 containing the brief financials of the subsidiaries inform AOC-1 is attached with this report as Annexure - 3.
At present none of the subsidiaries are material subsidiary. A copy ofthe policy determining 'material' subsidiaries has been hosted on the website of theCompany at the weblink http://www.rppipl.com/
15. Consolidation of Accounts
Your Company has prepared Consolidated Financial Statements as per IndAS prescribed under Section 129 read along with Section 133 and prescribed rules ofCompanies Act 2013. The Consolidated Financial Statements reflect the financial positionof the Company and Associates. As required by Regulation 34 of the SEBI (LODR) Regulations2015 the Audited Consolidated Financial Statements together with the IndependentAuditor's Report thereon are annexed and form part of this Annual Report.
16. Risk Management Policy
Risk management is an integral part of the business. The riskmanagement process inter alia provides for a review of the risk assessment andmitigation procedures with timely reporting to the management and review of the identifiedrisks at periodic intervals to assess the progress of control measures.
The Audit committee of the Board also oversees and serves as RiskManagement Committee. The Board has also constituted a Risk Management Team. The Committeehad formulated a Risk Management policy that outlines the different kinds of risks andrisk mitigating measures. The major risks are reviewed for the change in their nature andextent since the last assessment. It also provides control measures for risks and futureaction plans. Your Board is satisfied that there are adequate systems and procedures inplace to identify assess monitor and manage risks. The Company believes that the overallrisk exposure of present and future risks remains within risk capacity.
The details about risk and its management is provided in detailappropriately in the report. The Risk Management Team works and makes report to AuditCommittee. The policy and terms of reference have been provided in Corporate GovernanceReport forming part of the Directors Report.
17. Directors and Key Managerial Personnel
During the financial year 2020-21 you Board had six directors and nochanges took place in composition of the Board during the year. Details including profileof Directors are provided in the Corporate Governance Report which forms a part of theBoard Report.
Half of the Board of the Company comprises of independent directors(ID) and the composition of the Board of Directors are in compliance with regulation17(1)(b) of SEBI (Listing Obligations and Disclosure Obligations) Regulations 2015 andSection 149 of the Companies Act 2013.
None of the directors are liable to retire by rotation at this AnnualGeneral Meeting.
As per the provisions of the Companies Act 2013 and SEBI LODRRegulation 2015 reappointment Mr K Rangasamy (DIN: 07103549) & Mr P RSundararajan(DIN: 07647740) as Independent Directors for 2nd term of five years would beplaced for approval of members by way of special resolution. The same has been dulyapproved by the Board of Directors based on the recommendation of Nomination andRemuneration Committee and being recommended for approval by Board. Brief resume and otherdetails of the director proposed to be re-appointed has been provided in Notice to theAnnual General Meeting.
Board of Directors of the Company at its Meeting held on 30th June 2020had appointed Mr. Pradeep Kumar Nath as a Company Secretary and Compliance Officer of theCompany w.e.f. 30th June 2020 due to resignation of Mr. A. Karthiswaran from his post ofCompany Secretary & Compliance Office w.e.f. 29st June 2020.
18. Significant and Material Orders Passed by the Regulators Courts orTribunals
There are no significant material orders passed by the Regulators /Courts / Tribunals which impact the going concern status of the Company and its futureoperations.
All insurable interest of the Company including buildings furnitureand fixtures and other insurable interest are adequately insured.
20. Statement in Respect of adequacy of Internal Financial Control withReference to the Financial Statements
A robust system of internal control commensurate with the size andnature of its business forms an integral part of the Company's corporate governancepolicies. Internal Audit has been conducted by qualified external internal auditors.Findings of the internal auditor are reviewed by the management and the report of internalauditor is placed before the Audit Committee and proper follow-up action are ensuredwherever required. The Statutory Auditors have evaluated the system of internal controlsof the Company and have reported that the same are adequate and commensurate with the sizeof the Company and nature of its business.
Internal Financial Controls
As per Section 134(5) (e) of the Companies Act 2013 the Directorshave an overall responsibility for ensuring that the Company has implemented robustsystems and frameworks of internal financial controls.
These include those policies and procedures that:
i. Pertain to the maintenance of records which in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany
ii. Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of the financial statements in accordance with generallyaccepted accounting principles and that the receipts and expenditures are being made onlyin accordance with authorizations of the management and the Directors of the Company and
iii. Provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of assets that can have amaterial effect on the financial statements.
This provides the Directors reasonable assurance regarding the adequacyand operating effectiveness of controls with regards to reporting operational andcompliance risks to enable them to meet these responsibilities. The Company has devisedappropriate systems and frameworks including proper delegation of authority policies andprocedures effective IT systems aligned with business requirements internal auditframework risk management frameworks and whistle blower mechanism.
The Audit committee regularly reviews the internal control system toensure that it remains effective and aligned with business requirements. Where weaknessesare identified as a result of the reviews new procedures are put in place to strengthencontrols and are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessingeffectiveness of internal controls over financial reporting and has already laid downentity-level policies and process-level standard operating procedures.
The entity-level policies comprise anti-fraud policies (code of conductincluding conflict of interest confidentiality and whistle blower policy) and otherpolicies (organization structure roles and responsibilities insider trading policyrelated party policy prevention of sexual harassment policy risk management policypolicy for materiality of information or events and policy for preservation of documents).The Company has also prepared standard operating Practices for each of its processes ofrevenue to receive procure to pay hire to retire finance and accounts fixed assetstreasury inventory operations and administrative expenses.
The management assessed the effectiveness of the internal financialcontrols over financial reporting as of 31st March 2021 and the Board believes that thecontrols are adequate.
The Company has not accepted any deposits from members or the public interms of Section 73 or Section 76 of the Companies Act 2013.
22. Declaration by Independent Directors
The Independent Directors have submitted the declaration ofindependence stating that they meet the criteria of independence as provided underSection 149(6) of the Companies Act 2013 and SEBI LODR Regulations 2015.
23. Receipt of any Commission by Managing Director/ Whole Time Directorfrom the Company or Receipt of Commission/ Remuneration from Subsidiary
The Managing Director/ Whole Time Director are not in receipt of anycommission from the Company or any commission/ remuneration from any of subsidiaries.
24. Independent Auditor
The shareholders of the Company at the Extraordinary General Meetingheld on 12th June 2020 has appointed of Mr. Duraiswamy S N Chartered Accountant bearingthe membership No.026599 as Statutory Auditors of the Company due to casual vacancy of theStatutory Auditor in compliance to Section 139(8) of the companies Act 2013.
Subsequently Audit committee had considered appointment Mr. DuraiswamyS N Chartered Accountant as statutory auditor for further four years to meet term of fiveyears and had recommended the same to the Board for the Financial Year 2020-21 to 2023-24.Same approved by shareholder at last Annual general Meeting held on 29th October 2020.
25. Cost Auditor
As per the requirement of Section 148 of the Companies Act 2013 theBoard of Directors on the recommendation of Audit Committee has appointed Mr. R GopalCost Accountant as Cost Auditor to audit the cost accounts of the Company for thefinancial year 202021. As required under the Companies Act 2013 a resolution seekingmember's approval for ratification of the remuneration payable to the Cost Auditor formspart of the Notice to the Annual General Meeting.
Cost records as specified by the Central Government under subsection(1) of section 148 of the Companies Act 2013 are maintained by the Company. Cost Auditorhas provided his report on the audit of cost records which has been duly filed withRegistrar of Companies. There were no qualifications reservations or adverse remarks madeby the Cost Auditor in the Audit report of last financial year.
Further the Board of Directors on the recommendation of AuditCommittee has appointed M/s S V M & ASSOCIATES (Firm Regn: 000536) Cost AccountantFirm as Cost Auditor to audit the cost accounts of the Company for the financial year2021-22.
26. Secretarial Audit Report
As per the provisions of Section 204 of the Companies Act 2013 theBoard of Directors has appointed BGSMISHRA & Associates Company Secretaries LLP asSecretarial Auditor to conduct the Secretarial Audit of the Company for the financial yearended on 31st March 2021.
The Secretarial Audit report issued by Mr. Gouri Shanker MishraPartner BGSMISHRA & Associates Company Secretaries LLP in form MR-3 pursuant toSection 204(1) of the Companies Act 2013 and Rule 9 of the Companies (Appointment andRemuneration Personnel) Rules 2014 has been enclosed with this report as
Annexure - 4.
No qualifications has been made by the Secretarial Auditor howevercertain observation has been made which is explained in sequence as provided in hisreport as below:
1. Due to the restriction of work from home and lock down owing to theCovid-19 and delay in getting the appropriate documents signed and finalized certaine-forms has not been filed within the prescribed period and Company is ensuring to fileall documents and will ensure compliance with in time limit in future.
2. Company regularly makes bid for various tenders which requireentering of pre-bid understanding to apply for tenders. In few cases the other party withwhom the tenders are applied may be related party and pre-bid agreements are required tobe immediately entered due to short time in quoting of tenders. On the allotment of thecontract agreement is entered by the party and Company is required to form joint venturepartnership/ AOP Since in certain cases time is very short the Company has to enterinto pre-bid understanding and subsequent agreement to meet the timeline. However allthese contract/ agreement/ understanding are in ordinary course of business and at arm'slength price. Further all such contracts are beneficial and in interest of the Company.All agreement are very much as per the standard industry practice in all respect and moreon techno of financial nature with defined obligation. However Company ensures approvalof all these related party transection with Audit Committee before agreement for executionand wherever required also from the shareholders. In most of the cases it is verydifficult to have the approval of pre-bid understanding.
3. In few cases acknowledgement of notice circulation of draftminutes and entry of minutes for Board and Committee Meetings could not be made incompliance with the Secretarial standard due to the restriction of work from home and lockdown owing to the Covid-19. However Company has duly obtained the acknowledgement forthese from all directors and obtained ratification. Company is materially in complianceand it will try to ensure no gap arises further.
4. Company during the last year had received an inquiry under theSection 206(4) of the Companies Act 1956 from Registrar of Companies Coimbatore. Thesame is in continuation and during the financial year ROC has asked only some additionalinformation/ documents which has been provided by the Company.
5. Due to the restriction of work from home and lock down owing to theCovid-19 Company has failed to file the form Annual Performance Reports for its twooverseas subsidiaries within the time as prescribed. However Company has filed FLA intime. During the period Company has not made any financial commitments to these overseassubsidiary nor there are any changes. Company is taking steps and will ensure to complywith same.
6. Due to the restriction of work from home and lock down owing to theCovid-19 Company could not publish notice in relation to board meeting and financialresult as approved by Board. However we would like to also inform that various relaxationwere granted from publication in newspaper during Covid-19 by MCA/ SEBI. Furtherrequirement of publication of notice of Board Meeting for financial result has beenremoved from SEBI LODR Regulation 2015 from April 2021. However Company has noted thesame and will ensure the compliance.
27. Auditors' Report
The Statutory Auditor's Report for both standalone and consolidatedfinancial statements of the Company is provided along with the financial statements.
There are no qualifications or reservation or remarks made by theStatutory Auditors in their Standalone Audit report apart from one observation that themobilisation advance received by the Company from certain departments and theproportionate amount which has to be classified as GST liability has been shown asmobilisation advance liability to the extent of Rs.1.99 Crore. Further there are noqualifications or reservations or remarks made by the Auditors in their Consolidated Auditreport other than same as done in Standalone Report.
Further the disclaimer made both in Standalone and ConsolidatedFinancials are self-explanatory. Your Board would like to clarify that the accounts ofboth overseas subsidiaries Sri Lanka and Mauritius and branches in Sri Lanka andBangladesh have been audited and auditors report does not contain any qualification/reservation. Due to some logistics problem the same could not be provided to theStatutory Auditors at the time of audit and hence financials have been provided and audithas been done based on information but the auditor's report could not be provided to themat relevant time. Board has taken note of same.
28. Audit Committee
The Company has Audit Committee in compliance to the Section 177 ofCompanies Act 2013 and SEBI (LODR) Regulations 2013. The details about composition ofthe Audit Committee its terms of reference meetings etc. have been provided in theCorporate Governance Report.
There were no such incidences where the Board has not accepted therecommendations of the Audit committee during the year.
29. Corporate Social Responsibility (CSR)
The Company has Corporate Social Responsibility Committee in complianceto the provisions of the Companies Act 2013. The Committee has adopted policy forCorporate Social Responsibility. The Committee defines the parameters and observes themfor the effective discharge of social responsibility of the Company.
A report on Corporate Social Responsibility including details as perRule 8 of Companies (Corporate Social Responsibility Policy) Rules 2014 is enclosed withthis report as Annexure - 5.
30. Nomination & Remuneration Committee
The Company has constituted Nomination and Remuneration Committee incompliance to the Section 177 of Companies Act 2013 and SEBI (LODR) Regulations 2013.The Company strongly believes that its human resource has infinite potential andtherefore their development is the key to organizational effectiveness. We commitourselves to integrate human resources with organizational growth and development formutual benefit. The Nomination and Remuneration policy has been formulated in complianceto the requirement of Companies Act 2013 and SEBI (LODR) Regulations 2013.
The details about composition of the Committee Nomination andRemuneration Policy and other terms and condition including its terms of reference havebeen provided in the Corporate Governance Report.
31. Performance Evaluation
Pursuant to provisions of the Companies Act 2013 and SEBI (LODR)Regulation 2015 the Board has carried out an annual performance evaluation of its ownperformance the Directors individually including Independent Directors as well as theevaluation of the working of its Committees i.e. Audit and Nomination & Remunerationcommittees.
A structured format was prepared to rate after taking intoconsideration inputs received from Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture and execution and performance of specific duties obligations and governance.
A separate exercise was carried out to evaluate the performance ofIndependent Directors. The performance evaluation of Independent Directors was carried outby the entire Board. The performance evaluation of the Chairman and the Non IndependentDirectors was carried out by the Independent Directors.
The mechanism for the evaluation of the Board is given in detail in theCorporate Governance report.
32. Human Resources
Your Company takes pride in the commitment competence and dedicationshown by its employees in all areas of its business. It considers people as its biggestassets. It has put concerted efforts in talent management and succession planningpractices strong performance management and learning and training initiatives to ensurethat your Company consistently develops inspiring strong and credible leadership. YourCompany facilitates proper induction and appropriate upgrade for the skills.
33. Disclosure on Establishment of a Vigil Mechanism
The Board of Directors has adopted a Whistle Blower policy. The policyaims for conducting the affairs in a fair and transparent manner by adopting the higheststandards of professionalism honesty integrity and ethical behavior. Directors and allpermanent employees of the Company are covered under the Whistle Blower Policy. Amechanism has been established for Directors/ Employees to report concerns about unethicalbehavior actual or suspected fraud or violation of code of conduct and ethics. It alsoprovides for adequate safeguards against the victimization of Directors/ Employees whoavail of the mechanism and allows direct access to the Chairperson of the Audit Committeein exceptional cases. A copy of the Whistle Blower Policy is also hosted on the website ofthe Company.
34. Secretarial Standard
The company has complied with the Secretarial Standards SS-1 and SS-2issued by the Institute of Company Secretaries of India on Board Meetings and GeneralMeetings. Company also endeavor and ensure compliance of other secretarial standard.
35. Managerial Remuneration
Disclosures pursuant to Rule 5 of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 has been enclosed with this report asAnnexure - 6.
36. Disclosure as per Listing Regulations
Disclosures pursuant to Regulation 34 read with Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015 has been provided inAnnexure - 7 apart from those which are provided/ covered in Corporate Governance.
37. Management Discussion and Analysis report
As per Regulation 34(3) and Schedule V of SEBI (LODR) Regulation 2015a separate section on Management Discussion and Analysis report forms an internal part ofDirectors' Report as Annexure - 8.
38. Corporate Governance
As per Schedule V of SEBI (LODR) Regulation 2015 a separate sectionon corporate governance practices followed by the Company report on Corporate Governancetogether with a certificate confirming compliance and CEO/CFO Certificate by the ManagingDirector and Chief Financial Officer forms an integral part of this Directors' Report
39. Application made or any proceeding pending under the Insolvency andBankruptcy Code 2016
As per the information of the Company as on date of this report noproceeding is pending against the Company under the Insolvency and Bankruptcy Code 2016.
40. Companies (Auditor's Report) Order 2020
The report as provided is self- explanatory.
41. Disclosures under Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal ) Act 2013
The Company has adopted a policy on prevention of sexual harassment ofwomen at workplace in accordance with the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and has also created an InternalComplaints Committee headed by Mrs. A Nithya Whole-time Director and Chief FinancialOfficer of the Company who directly reports to the Chairman & Managing Director.During the financial year ended 31st March 2021 the Company has not received anycomplaints pertaining to sexual harassment. A copy of the policy on Sexual harassment isalso hosted on the website of the Company.
42. Directors' responsibility statement
In accordance with the provisions of Section 134(5) of the CompaniesAct 2013 your directors confirm that:
a) In the preparation of the annual accounts for the financial yearended 31st March 2021 the applicable accounting standards had been followed along withproper explanation relating to material departures;
b) The Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2021 andof the profit /loss of the Company for that period;
c) The Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
d) The Directors had prepared the annual accounts on a going concernbasis;
e) The Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively; and
f) The Directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively.
43. Transfer to Investor Education and Protection Fund
The Company transferred the dividend remaining unclaimed by the membersof the company to Investor Education and Protection Fund. The detail pertaining totransfer has been provided in notice to Annual General Meeting as well as corporategovernance report.
Your Directors take this opportunity to offer their sincere thanks toall stakeholders including the various departments of the central and state governmentsgovernment agencies banks financial institutions shareholders customers and employeeswho through their continued support and co-operation have helped in your Company'sprogress.
| ||For and on behalf of the Board of Directors |
| ||P Arulsundaram |
|Place: Erode ||Chairman & Managing Director |
|Date: 19th August 2021 ||DIN 00125403 |