Dear Members,
Your Directors take pleasure in presenting the 28th Annual
Report on the business and operations of RPP Infra Projects Limited together with the
Audited Statement of Accounts for the year ended 31st March 2023.
1. F inancial Highlights (Standalone and Consolidated)
During the year under review, performance of your Company's
standalone and consolidated results are as under:
(Rs in Crore)
|
|
Year ended |
|
|
Particulars |
31-Mar-23 |
31-Mar-22 |
31-Mar-23 |
31-Mar-22 |
|
Standalone |
|
Consolidated |
|
Turnover |
1,005.25 |
779.82 |
1,040.33 |
801.68 |
Profit/(Loss) before taxation |
38.76 |
14.19 |
41.73 |
11.19 |
Less: Tax expense |
12.76 |
5.83 |
12.76 |
5.83 |
Profit/(Loss) after tax |
25.99 |
8.36 |
28.96 |
5.36 |
Add: Balance B/F from the previous year |
195.63 |
187.08 |
198.48 |
189.54 |
Balance Profit / (Loss) C/F to the next year |
221.63 |
195.63 |
227.44 |
198.48 |
2. O perations and Performance Review
The Company achieved good results for the financial year 2022-23.
Company's revenue increased during the year 2022-23, as compared to the previous
financial year, with margin and profitability also witnessing expansion as compared to the
previous financial year 2021-22.
Company's performance improved during the 4th quarter
and it expects to maintain the same in the coming year. During the year, the Company was
awarded more contracts and has a strong work order of Rs 3200 crore.
The Company achieved a turnover of Rs 219.39 crores during first
quarter of 2022-23, with PBT of Rs 6.48 crore and PAT of Rs 3.60 crore. In the second
quarter, Company achieved a turnover of Rs 250.78 crore with PBT of Rs 5.19 crore and PAT
of Rs 3.27 crore. Third quarter witnessed a decline in turnover to Rs 231.86 crore, yet
PBT increased to Rs 10.62 crore and PAT to Rs 7.79 crore. The last quarter had much higher
turnover of Rs 298.27 crore, with higher PBT of Rs 16.46 crore and higher PAT of Rs 11.33
crore.
Standalone Results
During the year under review, revenue from operations increased to
Rs 1,005.25 crore from Rs 779.82 crore in the previous year, reflecting
an increase of 28.90% from the last financial year.
Profit after tax increased to Rs 25.99 crore during the financial year,
against Rs 8.36 crore in the previous financial year. The Company's net worth
increased to Rs 342. 59 crore as on 31st March 2023, as compared to Rs 317.61
crore as on 31st March 2022.
Consolidated Results
Consolidated revenues for the year under review was Rs 1,040.33 crore,
against Rs 801.68 crore in the previous financial year, recording an increase of 29.77% as
compared to the previous financial year.
Consolidated profit after tax increased to Rs 28.96 crore, against Rs
5.36 crore for the previous financial year. The Company's consolidated net worth
increased to Rs 362.19 crore as on 31st March 2023, up from
Rs 336.66 crore as on 31st March 2022. The increase in
networth was also owing to capital raising under preferential issue and conversion of
partly paid shares into fully paid shares by the Company.
In accordance with Accounting Standard AS-21 on consolidated financial
statements, the audited consolidated financial statements are also provided along with
standalone financial statement in the Annual Report.
3. C ompany's Affairs and Future Outlook
The Company performed well in the current year despite high inflation
and challenges due to the Russia-Ukraine war. The Company achieved increase in profit and
turnover during the year.
Your Company continues to have strong orderbook which at the end of the
financial year 2022-23 stood at Rs 3,200 crore.
Your Company is bound to have better performance in the future as
contracts and orders are from the government, who are safest customer and provides
stability to The Company even in challenging times. Your Company has received the
following major contracts during the year 2022-23 and till the date of this report, and
Company has continued its focus to small and mid-sized projects in segments of water and
infrastructure domains:
M ajor Upgradation of Lucknow Railway Station of and North
Eastern Railways on Engineering, Procurement and Construction (EPC) mode. (Upgradation of
Lucknow Railway Station) for Rs 399.00 Crore (Inclusive of GST).
W idening the East Coast Road (ECR) to six lane Department) for
Rs 104.79 crore (Inclusive of GST).
R ectification of black spot by constructing a 3 lane flyover
with vehicular underpass at different location in the project of Salem- Kumarapalyam
section of NH-544 in the state of Tamil Nadu on EPC mode (Infrastructure Department) for
Rs 125.85 Crore (Inclusive of GST).
R epair & Construction works of Old Buildings for Reopening
Old District Jail at Bareilly Uttar Pradesh, on EPC Basis (Building Department) for Rs
148.00 Crore (Inclusive of GST).
I mplementation of Ground Water Based Mini Piped Supply Schemes
within 08 Blocks in The District of Dakshin Dinajpur under Balurgat Division, PHE Dte.
RPP:51% & Infrastructures:49%. (Water Department West Bengal) for
Rs 104.54 Crore (Inclusive of GST).
I mprovement to Water Supply Services in Sheopurkalan Badoda
Nagar Parishads in Sheopur District in Madhya Pradesh. (Water Department) for Rs 170.88
Crore (Excluding GST).
The details of the affairs of the Company and future outlook has also
been provided at other places including Management Discussion and Analysis Report forming
part of this report.
4. C hange in Nature of the Business
There was no change in the nature of the business of the Company and
its subsidiaries during the year. The company has obtained shareholders approval for
change of company name from R.P.P Infra Projects Ltd to Sri R.P.P Infra Projects Ltd.
Lunkar Finance Pvt Ltd (subsidiary company) submitted the application of surrendering of
NBFC license to RBI and pending with RBI.
5. Dividend
Your Directors regret to inform that they have decided against the
recommendation of dividend for the financial year 2022-23 owing to lower profit
expectation during the financial year 2022-23 and with a view to conserve resources and
liquidity owing to requirement of funds for future projects of the Company.
6. T ransfer to Reserves
Company has not transferred any amount to the reserve during the year.
All profits are carried forward in the P&L Account.
7. S hare Capital
During the financial year, the paid-up capital of the Company increased
to Rs 37.46 crore from Rs 36.69 crore in the previous year. Company has issued 3,00,000
equity shares of face value Rs 10 per share and 1,15,00,000 convertible warrants issued at
a price of Rs 44.25 each to Non-Promoter Group.
During the year, partly paid rights issue also converted into fully
paid up rights issue.
Rights Issue:
Your Company has made rights issue of 1.60 crore equity shares at a
price of Rs 30 per share aggregating upto Rs 48 crore. The right basis was made to
existing equity shareholders in the ratio of three right equity shares for every five
fully paid equity shares held by shareholders.
Based on application, the Company has allotted 1,42,30,000 equity
shares on 26 of th October 2021 on receipt of Rs 18 (including premium of Rs
12). Further, Company has made first and final call of balance Rs 12 (including premium of
Rs 8) on 3rd February 2022.
During the financial year, 4,73,069 no. of partly paid converted into
fully paid shares and remaining outstanding partly paid shares is 7,21,220 and 6,941
partly paid shares was converted into fully paid up as on 06.03.2023 and the process was
completed after balance sheet date. and4,37,579 partly paid shares were converted into
fully paid shares as on 13th June 2023 and the remaining outstanding partly
paid shares is 2,76,700.
Preferential Issue:
Your company has made preferential issue of 3,00,000 equity shares and
1.15 crore warrants at Rs 44.25 per share/warrants. Company has made allotment of 3,00,000
equity shares of the face value of Rs 10 and 1.15 crore convertible warrants is issued at
Rs 44.25 warrants as on 6th March, 2023 and each warrant will be converted into
one equity share of face value of Rs 10 each within 18 months' time limit from the
date of allotment.
Authorized Share Capital:
During the year, there is no change in the authorised capital and
remained same as 50 crore authorised capital.
8. A nnual Return
The Annual Return in the e-form MGT - 7 for the financial year 2022-23
is provided on the Company's website at web-link http://www. rppipl.com/investor.php
and may be treated as part of Board Report.
9. B oard of Directors and Meetings of the
Board
The Board is properly constituted with an appropriate mix of executive,
non- executive and independent directors to maintain the independence of the Board and to
separate the Board functions of governance and management.
The Board is constituted in compliance with Section 149 of the
Companies Act, 2013 and Regulation 17 of SEBI (LODR) Regulations, 2015. The total strength
of the Board comprised of six directors during financial year 2022-23. Board comprised of
two executive promoter directors, one non-executive director and three independent
directors, with one woman director being part of Board. The composition of the Board was
proper throughout the financial year as per Companies Act, 2013 and SEBI (LODR)
Regulation, 2015.
Mr. K Rangasamy resigned as Independent Director from 21st
April 2023. Due to resignation of Independent Director, composition of Executive,
Non-Executive Director and Independent Director is not maintained as per Section 149 of
the Companies Act, 2013 and as per Regulation 17 of SEBI(LODR) Regulations, 2015, Mr.
Thangavel was appointed as Independent Director as on 21st July 2023 subject to
approval of shareholders in the upcoming AGM.
More details about the Board, including the profile of directors are
provided in the Corporate Governance Report forming a part of the Board Report.
During the financial year 2022-23, six board meetings were held on 30th
May 2022, 12th August 2022, 14th November 2022, 06th
January 2023, 11th February 2023, and 30th March, 2023.
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 |
6 |
6 |
6 |
Mrs. A. Nithya |
6 |
6 |
6 |
Mr. P. Muralidasan |
6 |
6 |
6 |
Mr. K. Rangasamy |
6 |
6 |
6 |
Mr. P. R Sundararajan |
6 |
6 |
6 |
Mr. R. Kalaimony |
6 |
6 |
3 |
10. L oan, Guarantees and Investments Section 186
During the financial year 2022-23, the Company has not made any
investment, granted any loan or extended any guarantee or provided any security in
connection with the loans to other companies.
Company has incorporated Five joint venture in form of partnership
namely RPP-HSEA JV, RPP-OPG JV, RPP-Infrastructure, RPP-P&C Vagmine JV and V
Satyamoorthy & Co RPP JV for bidding various project and the said partnership has also
been awarded with the contract.
The investment is within the limit of Section 186 of the Companies Act
2013. Further, Company has not made any loan or guarantee or security or investment in
subsidiaries including wholly owned subsidiaries or joint venture during the financial
year 2022-23.
Please refer to note no. 6 of Notes to Accounts for details of all
investments made by the Company.
11. C ontracts or Arrangements with Related Parties
The particulars of contracts or arrangements with related parties
referred to in Section 188(1) of the Companies Act, 2013, for the financial year 2022-23
in the prescribed format, AOC - 2 has been enclosed with this report as Annexure
1.
The Company enters into bidding agreement with various parties
includingrelatedpartiesformakingofbiddingtovariousGovernment Departments as per
qualification criteria. These agreements when made are made in ordinary course of business
and on arm's length basis as acceptable in this industry. Company ensures to have
similar/ same terms and conditions for all agreements, including with related party. These
are as per the bidding agreement, where formal agreement needs to be entered on award of
the work by the Government Department.
Company do obtain omnibus approval of the Audit Committee and wherever
it goes forward for contract and also obtains Board/ Members approval. Company will also
approach for omnibus approval to the shareholders to seek their prior approval as some of
these may be material related party transection as per SEBI LODR Regulation, 2015. These
will work as omnibus approval. Company will ensure that any contracts/ agreements as made,
are in ordinary course of business and at arm's length price.
12. M aterial Changes Affecting the Financial Position of the Company
There are no material changes affecting the financial position of the
Company which have occurred between the end of the financial year of the Company, i.e., 31st
March 2023 and till the date of the Directors' Report.
13. C onservation of Energy, Technology, Absorption, Foreign Exchange
Earnings and Outgo
Information as per Section 134 (3) (m) of the Companies Act, 2013, read
with Rule 8(3) of the Companies (Accounts) Rules, 2014 relating to Conservation of Energy,
Technology Absorption and Foreign Exchange Earnings and Outgo has been enclosed with this
report as Annexure 2.
14. S ubsidiaries, Joint Venture and Associate
The Company at the end of financial year has a total of six
subsidiaries out of which four are wholly owned subsidiaries (WOS), one is step-down
subsidiary and one company though subsidiary is in nature of joint venture. RPP-Annai (JV)
Private Limited has been incorporated as subsidiary as Company holds 51% in it, however,
it is a joint venture company. Company also has one joint venture outside India namely
R.P.P Infra Projects Myanmar Ltd, which has been incorporated in Myanmar under Myanmar
Companies Act, 2017 and Company holds 49% in same.
Company has incorporated Five joint ventures namely RPP-HSEA JV,
RPP-OPG JV, RPP-Infrastructure, RPP-P&C Vagmine JV and V Satyamoorthy & Co RPP JV
during the financial year 2022-23, which is joint venture partnership/ association for
bidding and taking up various contracts and to meet eligibility criteria in tenders.
Further, your Company from time to time enters into bid
arrangement/understanding for quoting for projects or undertaking projects under joint
venture and they 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.
A brief of the subsidiaries is provided below for your information.
R.P.P Infra Projects (Lanka) Limited, Sri Lanka
R.P.P Infra Projects (Lanka) Limited is a wholly owned subsidiary of
your Company based in Sri Lanka. The Company, during 2014-15, successfully completed a
housing project for the internally displaced people of Sri Lanka's Northern Province
for which Hindustan Prefab Limited were the Project consultant.
The Company has not taken up any new project during the year under
review and has no operating revenues during the financial year ended 31st March
2023. The Company recorded a net profit of Rs 3.25 crore for the year ended 31st
March 2023.
R.P.P Infra Overseas PLC, Mauritius
R.P.P Infra Overseas PLC is a wholly owned subsidiary of your Company
based in Mauritius. The principal activity of the Company is to provide infrastructure
project- related consultancy services and SPV for foreign investment.
The Company had no operating revenues during the financial year ended
31st March 2023. The company recorded a net loss of Rs 0.19 crore.
Sanskar Dealcom Private Limited, India
Sanskar Dealcom Private Limited, a wholly owned subsidiary of your
Company, is engaged in activities that includes being distributors, agents, traders,
merchants, contractors, brokers and otherwise deal in merchandise and articles of all
kinds including clearing agents, freight contractors, forwarding agents, licensing agents,
general brokers and to carry any kind of commercial business.
The Company had no operational revenues during the year ended 31st
March 2023 and had a very insignificant net loss for the year.
Greatful Mercantile Private Limited, India
Greatful Mercantile Private Limited, a wholly owned subsidiary of your
Company, is engaged in activities that include being distributors, agents, traders,
merchants, contractors, brokers and otherwise deal in merchandise and articles of all
kinds including clearing agents, freight contractors, forwarding agents, licensing agents,
general brokers and to carry any kind of commercial business.
The Company had no revenues from operations during the year ended 31st
March 2023 and had a very insignificant net loss for the year.
Lunkar Finance Private Limited
Lunkar Finance Private Limited is a step-down subsidiary of your
Company. Sanskar Dealcom Private Limited and Greatful Mercantile Private Limited holds the
entire paid- up capital of this company and hence step-down subsidiary of your Company. It
is a non-deposit taking NBFC.
The Company had no operational revenues during the year ended 31st
March 2023 and had a very insignificant net loss for the year.
Lunkar Finance Private Limited has started the process of surrendering
NBFC License.
RPP-ANNAI (JV) Private Limited
RPP- Annai (JV) Private Limited has been incorporated on 10th
July 2019 to execute a project in joint venture with Annai Infra Developers Limited. The
entire paid up capital of this company is held in ratio of 51% and 49 % respectively
between the company and joint venture partner.
The Company had operational revenues Rs 35.08 Crores during the year
ended 31st March 2023 and very insignificant net loss for the year.
R.P.P Infra Projects Myanmar Ltd
RPP Infra Projects Myanmar Ltd is an associate of your Company and has
been incorporated under Myanmar Companies Act, 2017 as a private limited by Shares. The
Company had no operational revenues during the year ended 31st March 2023.
The Company has kept the financial statements along with the audit
reports of all these subsidiaries open for inspection at the registered office of the
Company. Further, the Company will provide a copy of financial statements to any
shareholder, who asks for it. Further, pursuant to Section 136 of the Act, the financial
statement of the Company, consolidated financial statement along with the relevant
documents and separate audited financial statements in respect of subsidiaries are
available on the website of the Company.
As required under the Section 129(3) of Companies Act, 2013 and
Regulation 34(2) of SEBI (LODR) Regulation, 2015, a consolidated financial statement along
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 5
of Companies (Accounts) Rules, 2014 containing the brief financials of the subsidiaries in
form AOC-1 is attached with this report as
Annexure 3.
At present, none of the subsidiaries are material subsidiary. A copy of
the policy determining material' subsidiaries has been hosted on the website of
the Company at the weblinkhttp://www.rppipl.com/
15. C onsolidation of Accounts
Your Company has prepared Consolidated Financial Statements as per Ind
AS prescribed under Section 129 read along with Section 133 and prescribed rules of
Companies Act, 2013. The Consolidated Financial Statements reflect the financial position
of the Company and Associates. As required by Regulation 34 of the SEBI (LODR) Regulations
2015, the Audited Consolidated Financial Statements together with the Independent
Auditor's Report thereon are annexed and form part of this Annual Report.
16. Ri sk Management Policy
Risk management is an integral part of the business. The risk
management process, inter alia, provides for a review of the risk assessment and
mitigation procedures with timely reporting to the management and review of the identified
risks at periodic intervals to assess the progress of control measures.
The Audit committee of the Board also oversees and serves as Risk
Management Committee. The Board has also constituted a Risk Management Team. The Committee
had formulated a Risk Management policy that outlines the different kinds of risks and
risk mitigating measures. The major risks are reviewed for the change in their nature and
extent since the last assessment. It also provides control measures for risks and future
action plans. Your Board is satisfied that there are adequate systems and procedures in
place to identify, assess, monitor and manage risks. The Company believes that the overall
risk exposure of present and future risks remains within risk capacity.
The details about risk and its management is provided in details
appropriately in the report. The Risk Management Team works and makes report to Audit
Committee. The policy and terms of reference have been provided in Corporate Governance
Report forming part of the Directors Report.
17. D irectors and Key Managerial Personnel
During the financial year 2022-23, your Board had six directors and no
changes took place in composition of the Board during the year. Details including profile
of Directors are provided in the Corporate Governance Report, which forms a part of the
Board 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 regulation 17(1)(b) of
SEBI (Listing Obligations and Disclosure Obligations) Regulations 2015 and Section 149 of
the Companies Act, 2013.
In terms of Section 152(6)(d) of the Companies Act, 2013, Mr
Muralidasan Perumal (DIN 01771215) is liable to retire by rotation at the ensuing Annual
General Meeting and, being eligible, offers herself for re-appointment. The Board of
Directors, based on the recommendation of the Nomination and Remuneration Committee, has
recommended the re-appointment of Mr Muralidasan Perumal (DIN 01771215) at the ensuing
AGM.
Further, Mr. Thangavel would be appointed as independent director in
ensuing AGM. The same has been duly approved by the Board of Directors based on the
recommendation of the Nomination and Remuneration Committee.
Director has recommended the Mr Subramanian Neelakantan as independent
director but same was rejected in postal ballot passed on 26th July, 2023.
Brief resume of the Director proposed to be re-appointed has been
provided in the Notice convening the Annual General Meeting. Specific information about
the nature of his expertise in specific functional areas and the names of the companies in
which he held Directorship and membership/chairmanship of the Board Committees as per
regulation 26(4) of SEBI (Listing Obligations and Disclosure Obligations) Regulations,
2015 have also been provided.
Mr. A Karthiswaran has hold the position of Company Secretary from 28th
August, 2022 to 30th March, 2023. Mr. Shammi Prakash was appointed as Company
Secretary as on 30th March, 2023.
Significant and Material Orders Passed by the Regulators, Courts Or
Tribunals
There are no significant material orders passed by the Regulators /
Courts / Tribunals which impact the going concern status of the Company and its future
operations.
WRIT Petition is under process against the Income Tax Settlement
Commission Order which has been completed in the Financial Year 2019-20 and Tax due has
been paid as per ITSC order in three instalments. Two instalments paid in the financial
year 2019-20 and due to Covid 19 final instalment paid in financial year 2020-21.
18. Insurance
All insurable interest of the Company including, buildings, furniture
and fixtures and other insurable interest are adequately insured.
19. S tatement in Respect of adequacy of Internal Financial Control
with Reference to the Financial Statements
Internal Controls
A robust system of internal control, commensurate with the size and
nature of its business, forms an integral part of the Company's corporate governance
policies. Internal Audit has been conducted by qualified external and internal auditors.
Findings of the internal auditor are reviewed by the management and the report of internal
auditor is placed before the Audit Committee and proper follow-up action are ensured
wherever required. The Statutory Auditors have evaluated the system of internal controls
of the Company and have reported that the same are adequate and commensurate with the size
of the Company and nature of its business.
Internal Financial Controls
As per Section 134(5) (e) of the Companies Act, 2013, the Directors
have an overall responsibility for ensuring that the Company has implemented robust
systems and frameworks of internal financial controls.
These include those policies and procedures that:
i. P ertain to the maintenance of records which in detail, accurately
and fairly reflect the transactions and dispositions of the assets of the Company
ii. P rovide reasonable assurance that transactions are as necessary to
permit preparation of the financial statements in accordance with generally accepted
accounting principles and that the receipts and expenditures are being made only in
accordance with authorizations of the management and the Directors of the Company and
iii. P rovide reasonable assurance regarding prevention or detection of
unauthorized acquisition, use or disposition of
assetsthatcanhaveamaterialeffectonthefinancialstatements.
This provides the Directors reasonable assurance regarding the adequacy
and operating effectiveness of controls with regards to reporting, operational and
compliance risks to enable them to meet these responsibilities. The Company has devised
appropriate systems and frameworks including proper delegation of authority, policies and
procedures, effective IT systems aligned with business requirements, internal audit
framework, risk management frameworks and whistle blower mechanism.
The Audit committee regularly reviews the internal control system to
ensure that it remains effective and aligned with business requirements. Where weaknesses
are identified as a result of the reviews, new procedures are put in place to strengthen
controls and are in turn reviewed at regular intervals.
The Company has developed a framework for designing and assessing
effectiveness of internal controls over financial reporting and has already laid down
entity-level policies and process-level standard operating procedures.
The entity-level policies comprise anti-fraud policies (code of conduct
including conflict of interest, confidentiality and whistle blower policy) and other
policies (organization structure, roles and responsibilities, insider trading policy,
related party policy, prevention of sexual harassment policy, risk management policy,
policy 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 of
revenue to receive, procure to pay, hire to retire, finance and accounts, fixed assets,
treasury, inventory, operations and administrative expenses.
The management assessed the effectiveness of the internal financial
controls over financial reporting as of 31st March 2023 and the Board believes
that the controls are adequate.
20. Deposits
The Company has not accepted any deposits from members or the public in
terms of Section 73 or Section 76 of the Companies Act, 2013.
21. D eclaration by Independent Directors
The Independent Directors have submitted the declaration of
independence, stating that they meet the criteria of independence as provided under
Section 149(6) of the Companies Act, 2013 and SEBI LODR Regulations, 2015.
22. R eceipt of any Commission by Managing Director/ Whole Time
Director from the Company or Receipt of Commission/ Remuneration from Subsidiary
The Managing Director/Whole Time Director are not in receipt of any
commission from the Company or any commission/remuneration from any of subsidiaries.
23. I ndependent Auditor
Mr. Duraiswamy S N, Chartered Accountant bearing the membership No.
026599 was appointed as Statutory Auditors of the Company for the period of five years and
their term of office is till conclusion of the Financial year 2023-24.
Statutory Auditor, Mr. Duraiswamy S N, Chartered Accountant, have
confirmed their eligibility for continuing as Statutory Auditors of the Company.
24. C ost Auditor
As per the requirement of Section 148 of the Companies Act, 2013 the
Board of Directors, on the recommendation of Audit Committee, has appointed M/s S V M
& ASSOCIATES, (Firm Registration Number: 000536) Cost Accountant Firm, as Cost Auditor
to audit the cost accounts of the Company for the financial year 2022-23.
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 Auditor
has provided his report on the audit of cost records which has been duly filed with
Registrar of Companies.
Ms. Rajam Alwan, Cost Accountants (Registration No. 45812) be and are
hereby appointed as the Cost Auditors of the company to conduct audit of cost records made
and maintained by the company for financial year commencing on 1st April 2023
and ending on 31st March 2024
25. S ecretarial Audit Report
As per the provisions of Section 204 of the Companies Act, 2013, the
Board of Directors has appointed Lakshmmi Subramanian &
Associates, Company Secretaries firm, as Secretarial Auditor to conduct
the Secretarial Audit of the Company for the Financial year ended on 31st March
2023.
The Secretarial Audit report issued by Mr. P.S. Srinivasan, Partner,
Lakshmmi Subramanian & Associates, Company Secretaries firm in Form MR-3 pursuant to
Section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and
Remuneration Personnel) Rules, 2014, has been enclosed with this report as
Annexure 4.
No qualifications has been made by the Secretarial Auditor, however,
certain observation has been made, which is explained in sequence as provided in his
report as below:
1. T he first observation is self-explanatory and do not any
explanation.
2. T he second observation is also self-explanatory and has taken steps
to strictly comply with secretarial standards.
3. T hird observation is also self-explanatory and company taken steps
to address the lapse and delays in compliance with SEBI (LODR) Regulations, 2015.
4. F ourth observation is also self-explanatory and Company the process
of updating website.
5. T he fifth observation is also self-explanatory and company already
given reply.
6. T he Sixth observation is also self-explanatory. The submission of
intimation is inadvertent. Same has been submitted with small delay
7. T he Seven observation is also self- explanatory and is in the
process of appointment of Independent director in ensuing AGM
8. T he Eight observation is also self- explanatory and has implemented
an SDD so far and updated all records as per SEBI PIT Regulations, 2015
9. T he Nine observation is also self- explanatory and has taken steps
to address the gaps and non-compliance in maintenance of statutory register
26. A uditors' Report
The Statutory Auditor's Report for both standalone and
consolidated financial statements of the Company is provided along with the financial
statements.
One observation that there is a difference in paid-up share capital
between books of accounts and MCA portal. We have rectified it at the time of subsequent
allotment.
Further, the disclaimer made both in Standalone and Consolidated
Financials are self-explanatory. Your Board would like to clarify that the accounts of
both overseas subsidiaries Sri Lanka and Mauritius and branches in Sri Lanka and
Bangladesh have been audited and auditors report does not contain any
qualification/reservation. Due to some logistics problem, the same could not be provided
to the Statutory Auditors at the time of audit and hence financials have been provided and
audit has been done based on information but the auditor's report could not be
provided to them at relevant time. Board has taken note of same.
27. A udit Committee
The Company has Audit Committee in compliance to the Section 177 of
Companies Act, 2013 and SEBI (LODR) Regulations, 2013. The details about composition of
the Audit Committee, its terms of reference, meetings, etc. have been provided in the
Corporate Governance Report. has There were no such incidences where the Board has not
accepted the recommendations of the Audit committee during the year.
is28. C in orporate Social Responsibility (CSR)
The Company has Corporate Social Responsibility Committee in compliance
to the provisions of the Companies Act, 2013. The has Committee has adopted policy for
Corporate Social Responsibility. The Committee defines the parameters and observes them
for the effective discharge of social responsibility of the Company.
A report on Corporate Social Responsibility, including details as per
Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed with
this report as Annexure - 5.
29. N omination & Remuneration Committee
The Company has constituted Nomination and Remuneration Committee in
compliance to the Section 178 of Companies Act, 2013 and SEBI (LODR) Regulations, 2013.
The Company strongly believes that its human resource has infinite potential and
therefore, their development is the key to organizational effectiveness. We commit
ourselves to integrate human resources with organizational growth and development for
mutual benefit. The Nomination and Remuneration policy has been formulated in compliance
to the requirement of Companies Act, 2013 and SEBI (LODR) Regulations, 2013.
The details about composition of the Committee, Nomination and
Remuneration Policy and other terms and condition, including its terms of reference, have
been provided in the Corporate Governance Report.
30. P erformance 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 own
performance, the Directors individually, including Independent Directors, as well as the
evaluation of the working of its Committees, i.e., Audit and Nomination & Remuneration
committees.
A structured format was prepared to rate after taking into
consideration inputs received from Directors covering various aspects of the Board's
functioning such as adequacy of the composition of the Board and its Committees, Board
culture and execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of
Independent Directors. The performance evaluation of Independent Directors was carried out
by the entire Board. The performance evaluation of the Chairman and the Non Independent
Directors was carried out by the Independent Directors.
The mechanism for the evaluation of the Board is given in detail in the
Corporate Governance report.
31. H uman Resources
Your Company takes pride in the commitment, competence and dedication
shown by its employees in all areas of its business. It considers people as its biggest
assets. It has put concerted efforts in talent management and succession planning
practices, strong performance management and learning and training initiatives to ensure
that your Company consistently develops inspiring, strong and credible leadership. Your
Company facilitates proper induction and appropriate upgrade for the skills.
32. D isclosure on Establishment of a Vigil Mechanism
The Board of Directors has adopted a Whistle Blower policy. The policy
aims for conducting the affairs in a fair and transparent manner by adopting the highest
standards of professionalism, honesty, integrity and ethical behaviour. Directors and all
permanent employees of the Company are covered under the Whistle Blower Policy. A
mechanism has been established for Directors/ Employees to report concerns about unethical
behaviour, actual or suspected fraud or violation of code of conduct and ethics. It also
provides for adequate safeguards against the victimization of Directors/ Employees who
avail of the mechanism and allows direct access to the Chairperson of the Audit Committee
in exceptional cases. A copy of the Whistle Blower Policy is also hosted on the website of
the Company.
33. S ecretarial Standard
The company has complied with the Secretarial Standards, SS-1 and SS-2
issued by the Institute of Company Secretaries of India on Board Meetings and General
Meetings. Company also endeavour and ensure compliance of other secretarial standard.
34. M anagerial Remuneration
Disclosures pursuant to Rule 5 of Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 has been enclosed with this report as Annexure
6.
35. D isclosure 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 in Annexure
7 apart from those which are provided/ covered in Corporate Governance.
36. M anagement Discussion and Analysis report
As per Regulation 34(3) and Schedule V of SEBI (LODR) Regulation, 2015,
a separate section on Management Discussion and Analysis report forms an internal part of
Directors' Report as Annexure 8.
37. C orporate Governance
As per Schedule V of SEBI (LODR) Regulation, 2015, a separate section
on corporate governance practices followed by the Company, report on Corporate Governance
together with a certificate confirming compliance and CEO/CFO Certificate by the Managing
Director and Chief Financial Officer forms an integral part of this Directors' Report
as Annexure 9.
38. A pplication made or any proceeding pending under the Insolvency
and Bankruptcy Code, 2016
As per the information of the Company as on date of this report, no
proceeding is pending against the Company under the Insolvency and Bankruptcy Code, 2016.
39. C ompanies (Auditor's Report) Order, 2020
The report as provided is self- explanatory.
40. Di sclosures under Sexual Harassment of Women at Workplace
(Prevention, Prohibition &Redressal) Act, 2013
The Company has adopted a policy on prevention of sexual harassment of
women at workplace in accordance with the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and has also created an Internal
Complaints Committee headed by Mrs. A Nithya, Whole-time Director and Chief Financial
Officer of the Company who directly reports to the Chairman & Managing Director.
During the financial year ended
31st March 2023, the Company has not received any complaints
pertaining to sexual harassment. A copy of the policy on Sexual harassment is also hosted
on the website of the Company.
41. D irectors responsibility statement
In accordance with the provisions of Section 134(5) of the Companies
Act 2013, your directors confirm that:
a) I n the preparation of the annual accounts for the financial ended
31st March 2023, the applicable accounting standards had been followed along
with proper explanation relating to material departures;
b) T he Directors had selected such accounting policies applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as at 31st
March 2023 and of the profit /loss of the Company for that period;
c) T he Directors had taken proper and sufficient care for maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013, for safeguarding the assets of the Company and for preventing and detecting fraud
and other irregularities;
d) T he Directors had prepared the annual accounts on a concern basis;
e) T he Directors had devised proper systems to compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively; and
f) T he Directors had laid down internal financial controls followed by
the company and that such internal financial controls are adequate and were operating
effectively.
42. T ransfer to Investor Education and Protection Fund
The Company transferred the dividend remaining unclaimed by the members
of the company to Investor Education and Protection Fund. The detail pertaining to
transfer has been provided in corporate governance report.
43. Acknowledgment
year
Your Directors take this opportunity to offer their sincere thanks to
all stakeholders including the various departments of the central and state governments,
government agencies, banks, financial institutions, shareholders, customers and employees
who through their continued support and co-operation have helped in your and
Company's progress.
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For and on behalf of the Board of Directors |
the |
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P Arulsundaram |
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Chairman & Managing Director |
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DIN 00125403 |
Place: Erode |
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Date: 4th September, 2023 |
going |
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