Constronics Infra Ltd Directors Report.

Your Directors take pleasure in presenting the Twenty Eighth Annual Report and that of the Auditors together with the audited Balance Sheet as at 31st March 2020 and the Profit/ Loss Account for the year ended on that date.

FINANCIAL HIGHLIGHTS:

(Amount in Lakhs)

Particulars 2019-2020 2018-2019
Sales and Operating Revenues 188.30 54.55
Other Income 0.05 -
Total Revenue 188.35 54.55
Profit /(Loss) before Tax 9.32 (2.24)
Less: Tax Expenses
1. Current Tax 1.72 -
2. MAT credit (1.72) -
Profit /(Loss) after Tax 9.32 (2.24)

OPERATIONAL OVERVIEW:

During the year, the Company has engaged in the business of trading in Construction and Building Materials such as Blue Metals, M-Sand, Crushed Stone and other allied products. the Company has achieved total operating revenue of Rs. 188.29 Lakhs against Rs.54.55 Lakhs in previous year which records a growth of 245.18% against 100% in previous year. The company records a net profit of Rs. 9.32 Lakhs against a net Loss of Rs. 2.24 Lakhs in previous year. The Board of Directors believes that the company will continue in the path of growth.

DIVIDEND:

Due to accumulated losses, the Directors do not recommend any dividend for the year 2019-20.

RESERVES:

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

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.

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

During previous year the Company has commenced the business of trading in Construction and Building Materials. And There was no change in the nature of business of the company during the financial year 2019-2020.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES & PERFORMANCE THEREOF:

Your Company does not have any subsidiary, joint venture, associate company as at March 31, 2020.

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

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.

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.

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.

DIRECTORS & KEY MANAGERIAL PERSONNEL:

During the year under review, Mr. K. Sureshkumaar (DIN: 08547720) has been appointed as an Additional Director, designated as Executive Director of the company with effect from 07.01.2020. in this regard, the Board of Director recommends the Ordinary Resolution as set out in Item No. 4 of the Notice for regularization of his appointment as Executive Director of the Company, for the approval of the shareholders.

During the year under review, Mr. P. Sathiamoorthy (DIN: 08110021), Director of the company has resigned from the Board of Directors with effect from 07.01.2020.

As per the provisions of section 152 of the Companies Act, 2013, Mrs. T. Sharmila (DIN: 08304609), Non-Executive Director of the company, retires by rotation at this annual general meeting. Being eligible, she offers herself for re-appointment. Your Directors recommend her re-appointment.

Mr. K. Chandraprakash, Director of the Company has resigned from the Board of Directors with effect from 03.07.2020.

Mr. P. Muthukumar, an associate member of Institute of Company Secretaries of India, has been appointed as company secretary and compliance officer of the company with effect from 03.07.2020 and Mr. A. Vinodkumar, has been appointed as Chief Financial Officer of the company with effect from 30.07.2020

On 30.07.2020, Mr. U. Kapilkumar (DIN: 08791250) and Mr. R. Purushothaman (DIN: 08791300), has been appointed as Additional Directors, designated as Non-Executive Independent Directors of the Company and the Board of Director recommends the Ordinary Resolutions as set out in Item No. 5 and 6 of the Notice for regularization of their appointment as Non-Executive Independent Director of the Company, the approval of the shareholders.

BOARD MEETINGS:

During the year under review the Board of Directors met seven times on 08.04.2019, 30.05.2019, 14.08.2019, 14.11.2019, 07.01.2020 and 14.02.2020.

No. of Board

No. of Directorship & Committee Membership in other Public Companies

Name of the Director Meetings Attended Directorship Committee Membership
Mr. R. Sundararaghavan 6 Nil Nil
Mr. K. Sureshkumaar ** 1 Nil Nil
Mr. K. Chandraprakash# 6 Nil Nil
Mrs. T. Shrmila 6 Nil Nil
Mr. P. Sathiamoorthy ^^ 6 Nil Nil
Mr. K. Muthukumarasamy * 6 Nil Nil
Mr. J. Vishnuvardhan ^ 0 Nil Nil

* Appointed w.e.f. 08.04.2019

** Appointed w.e.f. 07.01.2020

# Resgined w.e.f. 03.07.2020

^ Resigned w.e.f. 08.04.2019

^^ Resigned w.e.f. 07.01.2020

The gap between two Board meetings were not more than 120 days.

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 year, the Audit Committee was reconstituted due to resignation of Mr. P. Sathiamoorthy from the Board w.e.f 07.01.2020. Mrs. T. Sharmila Non-Executive Director inducted to the Committee as member w.e.f. 07.01.2020.

During the financial year ended 31st March 2020, Audit Committee Meetings were met four times on 30.05.2019, 14.08.2019, 14.11.2019 and 14.02.2020. Detailed disclosure on compositions and the details of meetings attended by the Members are as follows:

No. of Meetings

Name of Member Category Held Attended
Mr. K Chandraprakash# Chairman 4 4
Mr. R Sundararaghavan Member 4 4
Mr. P. Sathiamoorthy** Member 3 3
Mrs. T. Sharmila * Member 1 1

* Appointed w.e.f. 07.01.2020

# Resigned w.e.f 03.07.2020

** Resigned w.e.f. 07.01.2020

On 30th July, 2020, the Audit Committee was reconstituted and the present composition of the Committee are as follows:

Name of the Member Designation Category
Mr. U. Kapilkumar Non-Executive Independent Director Chairman
Mr. R. Purushothaman Non-Executive Independent Director Member
Mr. R. Sundararaghavan Managing Director Member

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.

During the financial year ended 31st March 2020, Nomination and Remuneration Committee Meetings were met three times on 08.04.2019, 30.05.2019 and 07.01.2020. Detailed disclosure on compositions and the details of meetings attended by the Members are as follows:

No. of Meetings

Name of Member Category Held Attended
Mr. P. Sathiamoorthy ^^ Chairman 2 2
Mr. K. Chandraprakash# Member 3 3
Mr. J. Vishnuvardhan^ Member 1 0
Mr. K. Muthukumarasamy * Chairman 2 2
Mrs. T. Sharmila ** Member 0 0

* Appointed w.e.f. 08.04.2019

** Appointed w.e.f. 07.01.2020

# Resigned w.e.f 03.07.2020

^ Resigned w.e.f. 08.04.2019

^^ Resigned w.e.f. 07.01.2020

On 30th July, 2020, the Nomination and Remuneration Committee was reconstituted and the present composition of the Committee are as follows:

Name of the Member Designation Category
Mr. A. Kapilkumar Non-Executive Independent Director Chairman
Mr. R. Purushothaman Non-Executive Independent Director Member
Mrs. T. Sharmila Non-Executive Director Member

The Board, on the recommendation of the Nomination and Remuneration Committee, had framed a policy for fixing and revising remuneration of Directors, key managerial personnel and senior management personnel of the company. The criteria for determining qualifications, positive attributes and independence of Directors and the Nomination and Remuneration policy of the Company has been attached as "Annexure A" with this report.

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. P. Sathiamoorthy** Member
Mr. K Chandraprakash# Member
Mrs. T. Sharmila * Member

* Appointed w.e.f. 07.01.2020

# Resigned w.e.f. 03.07.2020

* Resigned w.e.f. 07.01.2020

There was no Stakeholders relationship committee meeting held during the year.

No Complaints of any material nature were received during the year under review.

On 30th July, 2020, the Stakeholders Relationship Committee was reconstituted and the present composition of the Committee are as follows:

Designation Category
Mr. U. Kapilkumar Non-Executive Independent Director Chairman
Mr. R. Purushothaman Non-Executive Independent Director Member
Mr. R. Sundararaghavan Managing Director Member

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.

Comments on Auditors Report:

Reply to the qualifications made in Auditors report:

1. Qualification: 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.

Boards Reply: 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.

 

2. Qualification: The Company has not complied with the mandatory requirement under section 138 of the Companies Act 2013, regarding the appointment of Internal Auditors.

Boards Reply: The Board is taking necessary steps to appoint the Internal Auditor.

 

3. Qualification: The Company has not complied with the mandatory requirement of section 203 of the Companies Act 2013, regarding appointment of Chief Financial Officer.

Boards Reply: The Board has appointed Mr. A. Vinodkumar as CFO of the Company w.e.f. 30th July, 2020.

 

4. Qualification: The Company has not complied with the mandatory requirement of section 203 of the Companies Act 2013, regarding appointment of whole time Company secretary.

Boards Reply: The Board has appointed Mr. P. Muthukumar, a member of Institute of Company Secretaries of India, as Company Secretary of the Company w.e.f. 3rd July, 2020.

 

5. Qualification: 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.

Boards Reply: The Board of Directors is taking necessary steps to transfer to the amount to Investor Education and Protection Fund.

 

6. Qualification: There was no undisputed amounts payable in respect of Income tax, Sales tax Service tax, Customs duty, Value added tax, Cess, GST excepting Income Tax deducted at source Rs.50,674/- which was outstanding as at 31st March 2020 for a period of more than 6 months from the day they became payable.

Boards Reply: 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.

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.

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, 2020. The Secretarial Audit Report attached as "Annexure B" with this report.

Reply to the qualifications made in Secretarial Auditors report:

 

1. Qualification: 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.

Boards Reply: The Board of Directors has appointed 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.

 

2. Qualification: 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.

Boards Reply: The Audit Committee of the Board of Directors has been reconstituted on 30th July, 2020, with requisite numbers of Independent Directors as prescribed under Section 177 of the Companies Act, 2013.

 

3. Qualification: 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.

Boards Reply: The Nomination and Remuneration Committee of the Board of Directors has been reconstituted on 30th July, 2020, with requisite numbers of Independent Directors as prescribed under Section 178 of the Companies Act, 2013.

 

4. Qualification: 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 has subsequently appointed Company Secretary and Compliance Officer with effect from 03.07.2020.

Boards Reply: The Company has appointed Mr. P. Muthukumar, an Associate Member of Institute of Company Secretaries of India, as Company Secretary & Compliance officer of the Company w.e.f. 3rd July, 2020 and appointed Mr. A. Vinodkumar as Chief Financial Officer of the Company w.e.f. 30th July, 2020.

 

5. Qualification: 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 has subsequently appointed Company Secretary and Compliance Officer with effect from 03.07.2020.

Boards Reply: The Company has appointed Mr. P. Muthukumar, an Associate Member of Institute of Company Secretaries of India, as Company Secretary & Compliance officer of the Company w.e.f. 3rd July, 2020.

 

6. Qualification: The Company has belatedly filed the Shareholding pattern with the BSE Limited for the Quarter ended on 30th June, 2019 as prescribed under Regulation 31 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Boards Reply: The Board of Directors take necessary steps to avoid the delays in disseminating the information.

 

7. Qualification: The Company has granted loan to Mr. Sathish Kumar, Former Director of the Company during earlier period without obtaining prior approval from Central Government which is not in compliance with Section 295 of the Companies Act, 1956 (Section 185 of Companies Act, 2013). The outstanding loan amount as on 31.03.2020 is Rs. 70,54,171/-.

Boards Reply: 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.

 

8. Qualification: 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.

Boards Reply: The Stakeholders Relationship Committee of the Board of Directors has been reconstituted on 30th July, 2020. At present Mr. U. Kapilkumar, Non-Executive Independent Director of the Company was appointed as Chairman of the Committee, as prescribed under Section 178 of the Companies Act, 2013.

 

9. Qualification: The Company has not appointed Internal Auditor, which is not in compliance with Section 138 of the Companies Act, 2013.

Boards Reply: The Board is taking necessary steps to appoint the Internal Auditor.

 

10. Qualification: The Company has not filed e-form MGT-14 for the resolutions passed in the Board Meeting held on 30.05.2019, 14.08.2019 for approval of Audited Financial Statements and Directors Report and has not filed Audited Financial Statements in e-Form AOC-4 and Annual Return in e-Form MGT-7, with the Registrar of Companies, Chennai, for the financial year ended 31.03.2019.

Boards Reply: The Board is taking necessary steps to file the e-Forms with Registrar of Companies.

 

11. Qualification: The Company has not filed the report on Annual General Meeting of the Company held on 30.09.2019 in e-Form MGT-15 as prescribed under Section 121 of the Companies Act, 2013 read with Rule 31 of The Companies (Management and Administration) Rules, 2014.

Boards Reply: The Company has filed the e-Form MGT-15 with the Registrar of Companies, Chennai.

 

12. Qualification: The Company has not filed e-Form INC-22A Active Company Tagging Identities and Verification (ACTIVE) with the Registrar of Companies as prescribed under Rule 25A of Companies (Incorporation) Rules, 2014.

Boards Reply: The Company has filed the e-Form INC-22A, with the Registrar of Companies, Chennai.

 

13. Qualification: The Company has not filed e-Form DIR-12 for the changes took place in the composition of Board of Directors of the Company during the year under review.

Boards Reply: The Company has filed necessary e-Forms DIR-12 with the Registrar of Companies, Chennai, for the changes took place in the composition of Board of Directors of the Company during the year.

 

14. Qualification: The Company has not transferred Rs.56,618/- received towards preferential allotment to the Investor Education And Protection Fund.

Boards Reply: The Directors are taking necessary steps to transfer the required amount to the Investor Education and Protection Fund.

 

15. Qualification: 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 Final Approval for Change of Name from the Stock Exchange i.e., BSE Limited.

Boards Reply: The Company has taken all necessary steps to obtain in-principle approval from BSE Limited and expecting the same at the earliest.

 

16. Qualification: 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.

Boards Reply: The Company has developed the website: www.constronicsinfra.com as prescribed under Regulation 46 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

EXTRACTS OF THE ANNUAL RETURN:

Extracts of Annual Return of the Company in prescribed Form MGT 9 for the Financial Year Ended 31st March, 2020 is attached as "Annexure C" to this report.

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.

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.