rpp infra projects ltd Directors report


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 Companys 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. Companys 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.

Companys 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 Companys 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 Companys 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 ompanys 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 Companys 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 arms 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 arms 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 Lankas 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 Auditors 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 Companys 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 Auditors 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 auditors 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 Boards 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 (Auditors 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 Companys progress.

For and on behalf of the Board of Directors
the

P Arulsundaram

Chairman & Managing Director
DIN 00125403
Place: Erode

Date: 4th September, 2023

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