Dear Members,
Your Directors present the 76th Annual Report and the audited financial statements for the financial year ended 31st March 2024.
The financial performance of the Company for the financial year ended 31st March 2024 is summarized below: FINANCIAL RESULTS:
(Re. in Lakhs
Particulars |
2023-24 | 2022-23 |
Gross Income |
9,667.78 | 12656.02 |
Profit/(loss) before Interest and Depreciation |
80.10 | 60.23 |
Finance charges |
301.83 | 421.24 |
Gross Profit/(loss) |
(221.73) | (361.01) |
Depreciation and Amortization expenses |
161.37 | 222.82 |
Net Profit/(loss) before tax , after exceptional item |
(361.89) | (385.34) |
Provision for tax |
77.85 | 65.52 |
Net Profit/(loss) after tax |
(439.73) | (450.86) |
Other Comprehensive Income/(loss) |
- | (1.08) |
Total Comprehensive Income |
(439.73) | (451.94) |
Earnings per share |
(1.32) | (1.36) |
OPERATIONS AND PERFORMANCE
For the year under review, your Company achieved a gross income of Rs. 9,667.78 Lakhs and incurred a loss after tax of Rs.(439.73) Lakhs. Depreciation for the year was Rs.161.37 Lakhs.
Your Company has put in several systems and review processes and has adopted better planning and execution strategies. The order book is also at healthy levels.
There has been good improvement in ensuring timely collection from current projects and finance costs were kept under control.
CHANGE IN MANAGEMENT AND CONTROL
During the financial year 2023-2024, significant changes occurred in the ownership and control structure of the company. The company underwent an acquisition process through an open offer,
resulting in new entities acquiring substantial stakes. The acquirers include:
1. Sundeep Anand Jegath Rakshagan
2. JAM Hotels and Resorts Private Limited
3. Accord Distillers and Brewers Private Limited
4. Teyro Labs Private Limited
Details of which is given in the website link https:// www.coromandelengg.com/Inv SI OpenOffer.html.
Pursuant to Share Purchase Agreement ("SPA") dated 29th September, 2023, members forming part of the erstwhile Promoter/Promoter Group from of the Company (Murugappa Group), sold their entire shareholding in the Company (2,43,53,733 Shares forming 73.28% of the Paid-up share capital of the Company) to Accord Distillers & Brewers Private Limited, Teyro Labs Private Limited, Jam Hotels
and Resorts Private Limited and Mr. Sundeep Anand Jegath Rakshagan (collectively referred to as "Acquirers").Consequent to the Change in Management some of the Directors of the Company had resigned and Directors representing the Acquirers were appointed in the Company.
Pursuant to the Open Offer made under The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Acquirers purchased 16,613 shares from the public shareholders of the Company and the present shareholding of the Acquirers along with the share purchased pursuant to the SPA and open offer is 74.57% of Paid-up share capital of the Company.
Following the completion of the acquisition, there was a reclassification of the promoters of the company and the Company currently forms part of the Accord group. Overall, these changes signify a significant shift in the ownership and management landscape of the company, potentially bringing new perspectives and strategies to drive its growth and development in the future.
DIVIDEND AND GENERAL RESERVE
In view of the accumulated losses, no dividend is recommended for the financial year 2023-24. The Company has not transferred any amount to the general reserve.
SHARE CAPITAL
As on 31st March 2024, the Companys paid-up capital is Rs.3323.36 Lakhs.
The NCLT vide its order dated 9th of May 2023, has approved the said extinguishment of the entire obligation of the Company with respect to the Preference Share Capital of Rs.2835.63 lakhs.
As per the Board resolution of the Company, the extinguishment will come into effect from the date of approval of NCLT which is 9th May 2023.The terms of the order of NCLT in CP No. 42 (CHE) of 2022 dated May 9th, 2023, have been fully complied with and duly certified by the Company Secretary and Compliance Officer.
DETAILS OF DEPOSITS
The Company has not accepted any Deposits covered under Section 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
The Company has not extended any loans, guarantees nor made any investments covered under the provisions of Section 186 of the Companies Act, 2013.
RISK MANAGEMENT
With an insight to integrate risk management with the overall strategic and operational practices, the Board of Directors have established a robust review and monitoring process with the management to ensure that the risks pertaining to the business are identified, steps are taken to manage and mitigate the same and periodical updates are discussed. The Board of Directors ensure periodical discussion with the management team to enable proper risk oversight by the Board.
DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
In addition to the Internal Controls on operations, the Board has laid down standards, processes and structures to implement Internal Financial Controls to ensure that the financial affairs of the Company are carried out with due diligence. The effectiveness of the Internal Financial Controls is ensured by management reviews, continuous monitoring and self-assessment and review of all financial transactions and operating systems by the internal auditors.
The internal audit plan is also aligned to the business objectives of the Company, which is reviewed and approved by the Audit Committee. Further, the Audit Committee monitors the adequacy and effectiveness of the Companys internal control framework. Significant audit observations are followed-up and the actions taken are reported to the Audit Committee. The Company has also
COROMANDEL ENGINEERING COMPANY LIMITED ANNUAL REPORT 2023-24
in place, adequate Internal Financial Controls with reference to Financial Statements. The internal control system ensures compliance with all applicable laws and regulations and facilitates optimum utilisation of available resources and protects the interest of all stakeholders.
During the year, such controls were tested and no reportable material weaknesses or inefficacy or inadequacy in the design or operation were observed.
BOARD OF DIRECTORS & KEY MANAGERIAL PERSONNEL
As on 31st March 2024, the Board of Directors of the Company comprises of 6 Directors out of which 3 Directors are independent.
During the year under review, there is significant changes in the composition of board of directors which is given in the Corporate governance report attached with the Annual report.
In pursuance of Section 152 of the Companies Act, 2013 and the rules framed there under, Mr.Nallusamy Elangovan DIN:03293596, NonExecutive Director of the Company is liable to retire by rotation, at the ensuing Annual General Meeting and being eligible offered himself for reappointment. The resolution seeking members approval for the re-appointment of Mr.Nallusamy Elangovan as a Director of the Company is included in the Notice convening the 76th Annual General Meeting.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations. In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and they fulfil the conditions specified in the Act and the Rules made thereunder and are independent of the management.
The details of programme for familiarisation of Independent Directors with the Company, nature of the industry in which the Company operates and related matters are uploaded on the website of the
Company at the link https://www.coromandelengg. com/PDF/2023-24/Policies/Familiarization_ Programme.pdf
The Board of Directors has carried out an annual evaluation of its own performance, working of its Committees and Individual Directors of the Company pursuant to the provisions of the Companies Act, 2013 read with the Rules framed thereunder and SEBI (LODR) Regulations. The performance was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.
Pursuant to the provisions of Schedule IV of the Companies Act, 2013 and Regulation 25 of the Listing Regulations, the Independent Directors of the Company had a separate meeting during the financial year without the attendance of Non-Independent Directors and members of management. At its meeting held on 28th March 2024, the performance of the Non-Independent Directors, the Board as a whole was evaluated, taking into account the views of Directors.
Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are Mr. Ravichandran Perumal, Chief Financial Officer and Ms. Akila M Company Secretary & Compliance Officer. However, Ms.M.Akila have resigned from the company with effect 31st May 2024. The Board of directors of the company appointed Mr. Anto Abinash as the Company Secretary and Compliance Officer with effect from 01st June 2024 in its meeting held on 24th May 2024.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2024, 9 (Nine ) Board Meetings were held. Details of the meetings held and attendance of each Director are given in the Corporate Governance Report forming part of this Annual Report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge and ability confirm as under:
7
(a) in the preparation of the annual Financial Statements, the applicable accounting standards have been followed and no material departures have been made from the same;
(b) the accounting policies as mentioned in Note No. 3 of the Financial Statements have been selected and applied 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, 2024 and of the loss of the company for that period
(c) proper and sufficient care has been taken for the 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) the annual accounts of the company have been prepared on a going concern basis;
(e) the internal financial controls to be followed by the company have been laid down and that such internal financial controls are adequate and operating effectively;
(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
AUDIT COMMITTEE
The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 18 of the SEBI (LODR) Regulations. During the Financial year 2023-2024, the Audit Committee have been reconstituted with effect from 29th December 2023 due to change in control and changes in management of the company. Further, it has been reconstituted with effect from 28th March 2024 due to resignation of Ms.Jalaja.The Audit Committee comprises of two Independent Directors namely, Mr. Muthiah Nagalingam and Mr. Asir Raja Selvan M and one Non-Independent Director Mr. Nallusamy Elangovan as on 31st March 2024. Mr. Muthiah Nagalingam is the Chairperson of the Committee.
During the year, Six meetings of the Audit Committee were held, the details of which are given in the Corporate Governance Report.
The Board has accepted the recommendations of the Audit Committee and there were no incidences of deviation from such recommendations during the financial year under review.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company has a process in place to periodically review and monitor Related Party Transactions. All Related Party Transactions entered during the financial year were placed before the Audit Committee for approval and were in the ordinary course of the business of the Company and were on arms length basis. There were no related party transactions that had conflict with the interest of the Company. During the year, none of the transactions with related parties came under the purview of Section 188(1) of the Act. Accordingly, the NIL disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is enclosed. The Policy on Related Party Transactions, as approved by the Board, is available on the Companys website at https://www.coromandelengg.com/PDF/2023 -24/Policies/Policy_RelatedParty.pdf
VIGIL MECHANISM
In accordance with Section 177 of the Act and the Regulation 22 of SEBI (LODR) Regulations, the Company has formulated a Vigil Mechanism and has a whistle blower policy in place to address the genuine concerns or grievances, if any, of the directors and employees. The whistle blower policy is available on the website of the Company at https://www.coromandelengg.com/PDF/2023-24/ Policies/Policy_WhistleBlower_04Mar2024_new. pdf
NOMINATION AND REMUNERATION COMMITTEE
The Company has in place a Nomination and Remuneration Committee in terms of the requirements of the Companies Act, 2013 read with the rules made thereunder and Regulation 19 of the SEBI (LODR) Regulations. During the financial year 2023-2024, the committee have been
reconstituted with effect from 29th December 2023 due to change in control and changes in management of the company. Further it has been reconstituted with effect from 28th March 2024 due to resignation of Ms.Jalaja. The Nomination and Remuneration Committee as on 31st March 2024 comprises of two Independent Directors namely, Mr. Muthiah Nagalingam and Mr. Asir Raja Selvan and one Non-Independent Director Mr. Nallusamy Elangovan as on 31st March 2024 . Mr. Muthiah Nagalingam is the Chairperson of the Committee.
During the year, Four meeting of the Nomination and Remuneration Committee was held, the details of which are given in the Corporate Governance Report.
The Board has accepted the recommendations of the Nomination and Remuneration Committee and there were no incidences of deviation from such recommendations during the financial year under review.
REMUNERATION POLICY
The Board, based on the recommendations of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and other employees and their remuneration. This Policy is guided by the principles and objectives as enumerated in Section 178 of the Companies Act, 2013 and Regulation 19 read with Part D of Schedule II of the SEBI (LODR) Regulations, 2015, to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources , a clear relationship of remuneration to performance and a balance between rewarding short and longterm performance of the Company. The policy is uploaded on the website of the Company at the link https://www.coromandelengg.com/PDF/2023- 24/Policies/Policy NRC 04Mar2024.pdf.
CORPORATE SOCIAL RESPONSIBILITY
In view of the losses incurred by the Company during the previous financial year, the requirement on spending or constitution of the Corporate Social Responsibility Committee under the Corporate Social Responsibility Policy as per Section 135 of the Companies Act, 2013 is not applicable to the Company.
AUDIT
STATUTORY AUDIT
M/s.CNGSN & Associates LLP, Chartered
Accountants, (FR No. 004915S/S200036) Chennai were appointed as Statutory Auditors of the Company at the 74th Annual General Meeting of the Company held on 3rd August, 2022, to hold office for a term of 5 consecutive years until the conclusion of 79th Annual General Meeting of the Company.
The Company has received confirmation from M/s. CNGSN & Associates LLP, Chartered Accountants that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of ICAI and they are not disqualified from continuing as Auditors of the Company.
The Independent Auditors Report(s) to the Members of the Company in respect of the Financial Statements for the Financial Year ended 31st March 2024 form part of this Annual Report and contains qualification(s) in respect of the payment dues to the Statutory Authorities and Financial Institutions.
STATUTORY AUDITORS OPINION:
The statutory auditors have audited the financial results for the Financial Year ended 31st March 2024 and expressed qualified opinion in their report
1. The Company has unpaid overdue amounts to financial institutions to the tune of Rs. 2,06,97,295 including interest.
In relation non-payment of financial obligations, the company has obtained a Letter of Support from its group company to meet its obligations in the normal course of its business and accordingly, the financial statements of the Company have been prepared on a going concern basis.
2. The company has received a Show Cause Notice from Regional Provident Fund Commissioner-I, Regional Office, Chennai- North, Chennai on 30/08/2023 on the basis of the findings of Compliance Audit Inspections in various years and the violation of conditions governing the grant of Exemption. The Regional Provident Fund
Commissioner directed the company for recoupment of losses by establishment amounting to Rs. 1,06,60,151.
MANAGEMENT REPLY:
The Company acknowledges the outstanding amounts owed to financial institutions, which include accrued interest. We regret the delays in making statutory payments, but we assure stakeholders that all dues have been settled subsequent to their due dates. We are committed to maintaining timely financial obligations in the future.
In response to the non-payment of financial obligations, the Company has secured a Letter of Support from its group company, demonstrating confidence in our ability to meet business obligations. This reaffirms the Companys position as a going concern, and we remain focused on sustaining operations in line with our business objectives.
Regarding the Show Cause Notice from the Regional Provident Fund Commissioner, the Company is actively addressing the concerns raised. We are in communication with the authorities to rectify any identified discrepancies and ensure compliance with all regulatory requirements. Steps are being taken to reconcile the reported losses and fulfil the directives provided and to surrender the PF exemption granted to the trust,
DETAILS OF FRAUD:
There is no instances of Fraud reported by the Statutory Auditors during the Financial Year 20232024.
COST AUDIT
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, the Company is required to maintain cost accounting records in respect of products of the Company covered under CETA categories and appoint a cost
auditor to conduct the cost audit of the cost records of the Company.
On account of resignation of Cost Auditor, N.V. Thanigaimani, the Board based on the recommendation of the Audit Committee, had appointed Mr. Anjaneyulu Reddy Deva Cost Accountant (Membership No. 31213) of D A R & Co., Cost Accountants as the Cost Auditor of the Company for the Financial Year 2023-24 on a remuneration of Rs. 50,000/-. Further, the Board, based on the recommendations of the Audit Committee, has re-appointed Mr. Anjaneyulu Reddy Deva to conduct the audit of the cost records of the Company for the Financial Year 2024 - 25. The remuneration payable to the cost auditor is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking ratification for the remuneration payable to the Cost Auditor for the Financial Year 2023 -24 and 2024-25 is included in the Notice convening the 76th Annual General Meeting.
SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Srinidhi Sridharan & Associates, Company Secretaries, Chennai to undertake the Secretarial Audit of the Company for the Financial Year 2023-24. The Secretarial Audit Report is enclosed. There are no qualifications, reservations, adverse remarks or disclaimers given by the Secretarial Auditors in their report.
The Board of directors of the company in its meeting held on 24th May 2024 have appointed M/s. Vidhya & Associates, Company Secretaries as the Secretarial Auditors of the company for the Financial year 2024-2025.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis for the year under review as stipulated under Regulation 34(2) of the SEBI (LODR) Regulations, highlighting the business details, is attached and forms part of this report.
CORPORATE GOVERNANCE REPORT
In terms of Regulation 34 of the Securities and Exchange Board of India (LODR) Regulations, a report on Corporate Governance along with a Certificate from a Practicing Company Secretary confirming the compliance with the conditions of Corporate Governance is attached to this report.
COMPLIANCE WITH THE PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place a prevention of Sexual Harassment and Grievance Handling Policy in line with the requirements of The Sexual Harassment of Women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy. During the year ended 31st March, 2024, the Company has not received any complaints pertaining to Sexual Harassment.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, & FOREIGN EXCHANGE EARNINGS AND OUTGO
The Companys core activity is civil construction which is not power intensive. Hence, the Company does not have any commercial activity that calls for conservation of energy and/ or technology absorption, attracting disclosure in pursuance of Rule 8(3) of the Companies (Accounts) Rules, 2014.
However the Company have implemented the following for the conservation of energy,
Installation of LED street lights & LED light fittings in the projects;
Recycle & Reuse during construction concept i.e. Use of Wastage rubbish or sand filled Cement bags for earth stability;
Usage of broken bricks for weathering course.
Use of Scrap steel in construction activities like drain cover, drain, and embedded supporting arrangements;
Use of Wastage Granite in anti-skid resistant area, car parking zones, seating arrangements, planters;
Use of Wastage Kota stones in planters, seating arrangements to reduce national wastage of materials;
Conserving natural resources by minimizing waste generation along with environmental emission;
During the year, the Company did not have any foreign exchange earnings and outgo.
SUBSIDIARIES/ASSOCIATES/JOINT VENTURES
The Company does not have any Subsidiaries/ Associates/Joint Ventures.
ANNUAL RETURN
The details forming part of the annual return in the prescribed Form MGT-7 as per Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available at the website of Company:http://coromandelengg.com/ Inv_AnnualGeneralMeeting.html
SECRETARIAL STANDARDS
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2).
PARTICULARS OF EMPLOYEES
The ratio of remuneration of each Director to the median of employees remuneration as per Section 197(12) of the Companies Act, 2013 and information relating to employees to be disclosed under Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed to and forms part of this report.
GENERAL
The Company has not issued equity shares with differential voting rights or sweat equity shares, there is no reportable event with respect to one time settlement with any Bank or Financial Institution and no corporate insolvency resolution process was initiated under the Insolvency and
Bankruptcy Code, 2016, either by or against the Company, before National Company Law Tribunal.
CHANGE IN NATURE OF BUSINESS
There has been no change in the nature of business during the financial year under review.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT
The Company have shifted its registered office from "Parry House, 5th Floor, 43, Moore Street, Chennai - 600001" to "Bascon Futura, New No. 10/2, Old No. 56L, Venkatanarayana Road, T. Nagar, Chennai - 600 017", i.e. within the local limits of Chennai city with effect from 15th April 2024.
Except as mentioned above, there are no material changes or commitments affecting the financial position of the Company between the end of the Financial Year and the date of the report.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
The Honble National Company Law Tribunal, Chennai Bench, vide its Order dated 09th May, 2023 approved the Scheme of Reduction of entire Unlisted issued, subscribed and paid up 7% Cumulative Non-Participating Redeemable Preference Shares of the Company.
Except for the above, the Company has not received any significant and material orders passed
by the regulators or courts or tribunals impacting the going concern status and companys operations in future.
ACCREDITATION/ RECOGNITION
Your Company has been certified under ISO 9001:2015 for quality management system and ISO 45001:2018 for safety management system, in design and establishment of property development, construction of residential, commercial and industrial projects, supporting services like electrical, mechanical and plumbing works.
THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR: NIL.
THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF: NIL
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the Customers, Banks, the Government of India, the Government of Tamil Nadu, Stock Exchange and all other Stakeholders for their continued cooperation, support and assistance extended to the Company.
On behalf of the Board
Place: Chennai |
NALLUSAMY ELANGOVAN |
SABARETNAM SINGARAM |
Date: 24th May 2024 |
DIN:03293596 |
DIN:00042329 |
Non-executive Director |
Managing Director |
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