Invicta Meditek Ltd Directors Report.

TO THE MEMBERS

Your Directors take pleasure in presenting the Twenty Seventh Annual Report and that of the Auditors together with the audited Balance Sheet as at 31st March, 2019 and the Profit/ Loss Account for the year ended on that date.

1. FINANCIAL HIGHLIGHTS:

In Rs.
Particulars 2018-2019 2017-2018
Sales and Operating 54,55,151 --
Revenues
Other Income - 17,34,166
Total Expenses 56,79,954 30,20,897
Profit /(Loss) before Tax (2,24,803) (12,86,731)
Less: Tax Expenses -- --
Profit /(Loss) after (2,24,803) (12,86,731)
Depreciation and Tax

2. OPERATIONAL OVERVIEW:

During the year, the Company has commenced business of trading in Construction and Building Materials such as Blue Metals, M-Sand, Crushed Stone and other allied products. The Company achieved total operating revenue of Rs.54,55,151/-. The net Loss for the year is Rs.2,24,803/-. The Board of Directors of the Company are exploring the additional business opportunities and to venture in to the business of contractors, Builders, Infrastructure developers, Real Estate developers in the near future.

3. DIVIDEND:

Due to accumulated losses, the Directors do not recommend any dividend for the year 2018-19.

4. RESERVES:

The Company has not transferred any amount to the General reserve account.

5. SHARE CAPITAL:

The Company during the year under review has not issued any Sweat Equity Shares or Shares with Differential Rights or under Employee Stock Option Scheme nor did it Buy Back any shares. The Authorised Capital and the Paid-Up Capital remained the same as previous year.

6. STATE OF COMPANYS AFFAIR & CHANGE IN THE NATURE OF BUSINESS:

Pursuant to resolution passed by the Shareholders in the 26th Annual General Meeting of the Company held on 05th September, 2018, the Company has commenced the business of trading in Construction and Building Materials. Accordingly, the Company has changed its Nature of Business as compared with the previous year.

7. SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES & PERFORMANCE THEREOF:

Your Company does not have any subsidiary, joint venture, associate company as at March 31, 2019. Hence, the details and performance thereof does not arise.

8. DEPOSITS:

The Company has not accepted any deposits during the period under review as envisaged under Section 73, 74 & 76 of the Companies Act, 2013

9. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS: 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 operation in future.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

No material changes and commitments were made, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

11. CORPORATE GOVERNANCE:

Regulation (15) of SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015, does not apply to our Company as our companys Equity capital and Net worth is below the Threshold limit prescribed under the said regulation and hence the report on Corporate Governance is not provided.

12. DIRECTORS & KEY MANAGERIAL PERSONNEL:

a) Appointment/ Reappointment:

Mr. Krishnakumar Chandraprakash (DIN: 03571464) and Mr. Palaniswamy Sathiamoorthy, (DIN: 08110021) Directors, retires by rotation at the forthcoming Annual General meeting and being eligible, offers themselves for re-appointment. The Board of Directors has appointed Ms. Sharmila Thirumalaisamy (DIN: 08304609) and Mr. Krishnasamy Muthukumarasamy (DIN: 08399505) as an Additional Directors designated as Non-Executive Directors of the Company with effect from 08th January, 2019 and 08th April, 2019 respectively, based on the recommendation of the Nomination and Remuneration Committee. The Board of Directors seeks your confirmation for appointment of Ms. Sharmila Thirumalaisamy and Mr. Krishnasamy Muthukumarasamy as Non-Executive Directors of the Company.

b) Resignation:

Ms. Chandraprakash Umamaheswari (DIN: 08110024), Mr. Jayaprakash Vishnuvardhan (DIN: 08110030) Directors of the Company, resigned from the Board with effect from 08th January, 2019 and 08th April, 2019 respectively. The board expresses its sincere appreciation for the contribution made by them during their tenure as Director of the Company.

c) Key Managerial Personnel:

According to Section 203 of the Companies Act, 2013, Mr. Rajamani Ragavachari Sundararaghavan , (DIN: 01197824) being a Managing Director is a Key Managerial Personnel of the Company.

13. BOARD MEETINGS:

Seven Board Meetings were held during the year under review on 30.05.2018, 18.06.2018, 28.07.2018, 14.08.2018, 14.11.2018, 08.01.2019 and 14.02.2019 and the gap between two Board meetings were not more than 120 days.

Name of the Director

No. of Board Meetings Attended

No. of Directorship & Committee Membership in other Public Companies

Directorship

Committee Membership

Mr. R. Sundararaghavan 7 Nil Nil
Mr .Sathish Kumar* 0 Nil Nil
Mr. Naveen Lakshmanan* 2 Nil Nil
Mr. Sekar Somasundaram* 2 Nil Nil
Mrs. Swapna Sundararaghavan* 2 Nil Nil
Mr. K Chandraprakash** 5 Nil Nil
Mr. Palaniswamy Sathiamoorthy** 5 Nil Nil
Ms. Chandraprakash 4 Nil Nil
Umamaheswari**(##)
Mr. Jayaprakash Vishnuvardhan** 5 Nil Nil
Ms. Sharmila Thirumalaisamy# 1 Nil Nil

*Resigned with effect from 18.06.2018;

**Appointed with effect from 18.06.2018 # Appointed with effect from 08.01.2019;

## Resigned with effect from 08.01.2019

14. COMMITTEES OF THE BOARD:

a) Audit Committee

Pursuant to provisions of Section 177 of the Companies Act, 2013, the terms of reference of Audit Committee of the Board was revised in accordance with terms of reference prescribed therein. During the financial year ended 31st March 2019, four Audit Committee Meetings were held on 30.05.2018, 14.08.2018, 14.11.2018 and 14.02.2019. Detailed disclosure on compositions and the details of meetings attended by the Members are as follows:

Name of Person Category

No. of Meetings

Held

Attended

Mr. Naveen Lakshmanan* Chairman 1 1
Mr. R Sundararaghavan Member 4 4
Mr. Sekar Somasundaram* Member 1 1
Mr. K Chandraprakash** Chairman 3 3
Mr. Palaniswamy Sathiamoorthy** Member 3 3

*Resigned w.e.f. 18.06.2018

** Appointed w.e.f. 18.06.2018

b) Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been empowered and authorized to exercise powers as entrusted under the provisions of Section 178 of the Companies Act, 2013. In compliance with Section 178 of the Companies Act, 2013 the Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration and including criteria for determining qualifications, positive attributes, independence of Directors and other matters. The Nomination and Remuneration Committee Comprises of the following Directors as on March 31, 2019:

Name of Person Category
Mr. Sekar Somasundaram* Chairman
Mr. Naveen Lakshmanan* Member
Mrs. Swapna Sundararaghavan* Member
Mr. Palaniswamy Sathiamoorthy** Chairman
Mr. K Chandraprakash** Member
Mr. Jayaprakash Vishnuvardhan** Member

*Upto 18.06.2018

** From 18.06.2018

The terms of reference of the Committee inter alia, include the following: Succession planning of the Board of Directors and Senior Management Employees; Identifying and selecting candidates for appointment as Directors / Independent Directors based on certain laid down criteria; Identifying potential individuals for appointment as Key Managerial Personnel and to other Senior Management positions; Formulate and review from time to time the policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Employees and their remuneration; Review the performance of the Board of Directors and Senior Management Employees based on certain criteria as approved by the Board. In reviewing the overall remuneration of the Board of Directors and Senior Management, the Committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talent, the relationship of remuneration to performance is clear and meets appropriate performance benchmarks and that the remuneration involves a balance between fixed and incentive pay reflecting short term and long term objectives of the Company. The Committee during the year under review met on 18.06.2018 & 08.01.2019. All the members were present in the said meeting.

c) Stake Holders Relationship Committee:

The Committee is to look after transfer of shares and the investors complaints, if any, and to redress the same expeditiously. The following are the Compositions of the members of Committee:

Name of Directors Status
Mr. R Sundararaghavan Chairman
Mr. Naveen Lakshmanan* Member
Mr. Sekar Somasundaram* Member
Mr. Palaniswamy Sathiamoorthy** Member
Mr. K Chandraprakash** Member

*Upto 18.06.2018

** From 18.06.2018

There was no Stakeholders relationship committee meeting held during the year. No Complaints of any material nature were received during the year under review.

15. AUDITORS:

M/s Chandran & Raman, Chartered Accountants, Chennai (FRN: 00571S), were appointed as Statutory Auditors of the company in the 25th Annual General Meeting of the Company held on 29.09.2017 until the conclusion of 30th Annual General Meeting, subject to ratification by shareholders in every consecutive Annual General Meeting.

Pursuant to notification of the Companies (Amendment) Act, 2017 on 7th May, 2018, the first proviso to Section 139 relating to the ratification of appointment of Statutory Auditors by the Members at every General Meeting was omitted. Consequently, the ratification of appointment of M/s Chandran & Raman, Chartered Accountants as Statutory Auditors is not required. The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and rules framed there under for their re-appointment as Statutory Auditors of the Company. The necessary resolution is being placed before the shareholders for approval.

16. COMMENTS ON AUDITORS REPORT:

Reply to the qualifications made in Auditors report:

Qualification Reply
Basis for Qualified Opinion: The Loan granted by the Company to its Director belongs to period prior to April, 2014. The Board of Directors is taking necessary steps to comply with the provisions of the Act. The Company has initiated necessary steps to recover the amount from the Former Director and hence the provision has not been made for the current financial.
The companys Non-Current Financial Assets includes an amount of Rs.70,54,171/ (Amount Sanctioned during the year -Rs. Nil) Being Outstanding of Non-current financial Assets given to one of the director without obtaining prior approval of central government as per section 185 of the companies act 2013. No provision for the said amount due has been made in the accounts. In our opinion, the said amount has to be fully provided for since the amount is outstanding for more than five years and the Company could not recover the said sum. Had the Company made provision for the said sum of Rs.70,54,171/- the loss for the current financial year would be higher by Rs.70,54,171/- with the corresponding reduction in current assets.
Point No.03 of Annexure-I of Auditors Report :
However, Non-Current Financial Assets includes an amount of Rs.70,54,171/- (Amount Sanctioned during the year -Rs. Nil) being Outstanding of loans given to one of the director without obtaining prior approval of central government as per section 185 of the Companies Act 2013.
Point No.04 of Annexure-I of Auditors Report:
A Sum of Rs.70,54,171/- is due from a former Director and included under Loans and Advances. The said sum has been carried forward from the earlier accounting years. The above amount of advance to a former director is in violation of provisions of Sec 185 and 186 of the Companies Act, 2013.
Point No.f(iii) of Auditors Report: The Board of Directors is taking necessary steps to transfer to the amount to Investor Education and Protection Fund.
An amount of Rs.56,618/- pending preferential allotment which were required to be transferred to the Investor Education and Protection Fund by the Company.
Point No.07 of Annexure-I of Auditors Report:
There was no undisputed amounts payable in respect of Income tax, Sales tax Service tax, Customs duty, Value added tax, Cess, GST excepting a sum of Rs.72,394/- and Income Tax deducted at source Rs.50,674/- which was outstanding as at 31st March 2019 for a period of more than 6 months from the day they became payable. The Board of Directors has taken necessary steps to remit the statutory dues and will ensure that all the statutory dues are remitted within the time prescribed.

17. INSTANCES OF FRAUD

The Auditors have not reported any frauds under sub-section (12) of section 143 of the Companies Act, 2013 during the year under review.

18. SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, your Company has appointed Shri. Balu Sridhar, Practicing Company Secretary as secretarial auditor to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2019. The Secretarial Audit Report attached with this report as Annexure – A.

Reply to the qualifications made in Secretarial Auditors report:

The composition of the Board of Directors did not comply with the requirements to have requisite numbers of Independent Directors as prescribed under Section 149 of the Companies Act, 2013 and Regulation 17 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Board of Directors is taking necessary steps to appoint Independent Directors and is in the process of identifying suitable candidates to be appointed as Independent Directors.
The composition of the Audit Committee does not comply with the requirement of requisite numbers of Independent Directors as prescribed under Section 177 of the Companies Act, 2013. The Board of Directors is taking necessary steps to appoint Independent Directors and upon their appointment the Audit Committee will be reconstituted.
The composition of the Nomination and Remuneration Committee does not comply with the requirement of requisite numbers of Independent Directors as prescribed under Section 178 of the Companies Act, 2013. The Board of Directors is taking necessary steps to appoint Independent Directors and upon their appointment the Nomination and Remuneration Committee will be reconstituted.
The Company has not appointed a Company Secretary and Chief Financial Officer as required under the first proviso of sub-section 1 of Section 203 of the Companies Act 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Company is in the process of identifying suitable candidate for the designation of Company Secretary and Chief Financial Officer and is taking necessary steps for the same.
In absence of Company Secretary the Company has not complied with Regulation 6 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, viz., appointment of Company Secretary as Compliance officer. The Company is in the process of identifying suitable candidate for the designation of Company Secretary and is taking necessary steps for the same.
The Company has granted loan to Mr. Sathish Kumar, Former Director of the Company under Section 295 of the Companies Act, 1956, without obtaining prior approval from Central Government. As per Section 185 of the Companies Act, 2013 the outstanding loan amount as on 31.03.2018 is Rs. 70,54,171/-. The Company is taking necessary steps to comply with the provisions of the Act.
Mr. R. Sundararaghavan, Managing Director of the Company is the Chairman of the Stakeholders Relationship Committee, which is not in compliance with Section 178 of the Companies Act, 2013. The Board noted the same and accordingly will take necessary steps to comply with the provisions of the Act.
The Company has not appointed Internal Auditor, which is not in compliance with Section 138 of the Companies Act, 2013. The Board is taking necessary steps to appoint the Internal Auditor.
The Company has not transferred Rs.56,618/- received towards preferential allotment to the Investor Education And Protection Fund. The Directors are taking necessary steps to transfer the required amount to the Investor Education and Protection Fund.
The Company has not complied with Regulation 45(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, in relation to Change of Name of the Company and is awaiting for In-principle Approval from the Stock Exchange i.e., BSE Limited. The Company has taken all necessary steps to obtain in-principle approval from BSE Limited and expecting the same at the earliest.
The Company does not maintain a functional website as prescribed under Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 The Company has taken necessary steps to develop a functional website and will be deployed at the earliest.

19. EXTRACTS OF THE ANNUAL RETURN:

Extracts of Annual Return of the Company in prescribed Form MGT 9 for the Financial Year Ended 31st March, 2019 is attached to the report by way of

‘Annexure – B.

20. RELATED PARTY TRANSACTIONS:

During the year under review, the Company has not entered into any contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013. Hence the reporting under this clause does not arise.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EARNINGS AND OUTGO:

The Company is taking utmost care of the Conservation of Energy. The Company has no activity in relation to Technology absorption. The company has no foreign exchange outgo or inflow.

22. MANAGEMENT DISCUSSION & ANALYSIS:

a) GLOBAL & INDIAN ECONOMIC OVERVIEW:

Global growth is estimated at 3.5% in 2019 and 3.6% in 2020 on account of a sustained weakening in advanced economies. The growth is constrained by sluggish investment and risks including rising trade barriers, renewed financial stress and sharper than expected slowdowns in several major economies. India emerged as the sixth-largest and retained its position as the fastest-growing trillion-dollar economy. The Indian GDP has grown by 6.9% in Financial Year 2019. The decline in GDP growth is on account of multiple factors like, fallout of NBFCs, low credit growth, tight liquidity conditions, dismal growth in wages and flat exports owing to a global slowdown. Indian manufacturing continued its downtrend growing at 3.1%. However, GDP growth rate is expected to bottom out in the coming quarters. India is expected to grow at 7.3% in FY2019-20, benefiting from ongoing structural reforms.

b) INDUSRTY OVERVIEW:

The business of the Company is influenced by the performance of the construction and building product sectors. The growth in construction sector was notable in first half of 2018 before easing in the latter part of the year. The Indian construction industry is fragmented and comprises a number of unorganized players. The nations construction sector is being catalysed by growth in the real estate and urban development sectors on the back of growing industrialization and commercialization on the one hand and increased homebuilding on the other. The real estate sector contributed 7% to the countrys GDP and its share is expected to double by 2040. The government rationalization of GST rates from 8% to 1% in the affordable housing criteria is seen as an immediate move towards getting the real estate sector the much-needed acceleration.

c) OUTLOOK:

The global construction and infrastructure industry is being influenced by automation, digitisation and use of advanced materials. The global construction industry is expected to expand by 3.6% till 2022. The residential segment growth rate is expected to increase to 18.3% by 2022 on account of the incremental demand coming in from the affordable housing segment.

d) STRENGTH, THREATS, RISKS, AND CONCERNS:

Robust demand from commercial and private sector housing, Increased governmental investment in national infrastructure are key strengths for the Companys growth. With increased trend of investing with tier 1 and 2 developers, there could be downward pressure on other small time developers. Rupee being weak in comparison to USD, labour cost, inflation has also been major concern for the growth of Company.

e) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place, adequate internal control systems and procedures commensurate with the size and nature of our business. These procedures are designed to ensure that

i) An effective and adequate internal control environment is maintained across the Company.

ii) All assets and resources are acquired economically, used efficiently and are adequately protected.

iii) All internal policies and statutory guidelines are complied with.

23. PARTICULARS OF EMPLOYEES:

None of the employees draws remuneration of Rs. 8,50,000/- or above per month and Rs. 1,02,00,000/- or above per year. Hence, details of the employees of the Company as required pursuant to 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not furnished. The Company has not paid any remuneration to the Managing Director under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Hence reporting under this provision does not arise.

24. MAINTENANCE OF COST RECORDS:

The Central Government has not prescribed the maintenance of Cost Records under Section 148(1) of the Companies Act, 2013 for the Company

25. ANNUAL EVALUATION BY THE BOARD:

The evaluation framework for assessing the performance of Directors comprises of the following key areas:

a) Attendance of Board Meetings and Board Committee Meetings;

b) Quality of contribution to Board deliberations;

c) Strategic perspectives or inputs regarding future growth of Company and its performance;

d) Providing perspectives and feedback going beyond information provided by the management;

e) Commitment to shareholder and other stakeholder interests. Pursuant to the provisions of the Companies Act, 2013, Independent Directors at their meeting without the participation of the Non-independent Directors and Management, considered/evaluated the Boards performance, performance of the Chairman and other Non-independent Directors. The evaluation involves Self-Evaluation by the Board Member and subsequently assessment by the Board of Directors. A member of the Board will not participate in the discussion of his / her evaluation.

26. RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROL:

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Audit Committee has also revisited the Risk Management Policy and has taken steps to strengthen the Risk Management process in keeping with the changes in the external environment and business needs. In addition to the Internal Control Systems, the Board has laid emphasis on adequate Internal Financial Controls to ensure that the financial affairs of the Company are carried out with due diligence.

27. LISTING WITH STOCK EXCHANGE

The Companys equity shares are listed in Bombay Stock Exchange. The Company has paid the Listing Fees upto the Financial year 2018 - 2019.

28. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The provisions of Section 135 of the Companies Act 2013 pertaining to Corporate Social Responsibility are not applicable to the Company.

29. VIGIL MECHANISM:

In Compliance of Section 177 of Companies Act, 2013, the Company has set up a Whistle Blower policy. In terms of the said policy the Directors and employees are given direct access to the Chairman of the Audit Committee to report genuine concerns or grievances. Adequate safeguards are in place against victimization of employees who availed the mechanism.

30. DIRECTORS RESPONSIBILITY STATEMENT:

To the best of their knowledge, belief and according to the information and explanations obtained by them, the Directors pursuant to Section 134 of the Companies Act, 2013 hereby state that:

1) In the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made for the same.

2) The directors had selected appropriate accounting policies and 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 2019 and of the Loss of the Company for the year ended 31st March 2019.

3) The directors had taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities,

4) The annual accounts have been prepared the annual accounts on a going concern basis.

5) The directors, had laid down proper and sufficient internal financial controls and policies and procedures of such internal financial controls are adequate and operating effectively.

6) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROBHITION AND REDRESSAL), ACT, 2013:

During the year under review no complaints have been received under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal), Act, 2013.

32. INVESTOR EDUCATION AND PROTECTION FUND:

An amount of Rs.56,618/- pending preferential allotment is required to be transferred, to the Investor Education And Protection Fund

33. ACKNOWLEDGEMENT:

Your Directors take this opportunity to express their thanks to the Shareholders, Customers, Suppliers, Banks and Government for their valuable assistance and support.

Your Directors wish to place on record their appreciation of the sincere efforts put in by the employees of the Company at all levels.

On Behalf of the Board
For CONSTRONICS INFRA LIMITED
Place: Chennai -SD- -SD-
Date: 14.08.2019 R.Sundararaghavan K Chandra Prakash
Managing Director Director
(DIN: 01197824) (DIN: 03571464)