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Directors Report of Rajeswari Infrastructure Ltd.

Mar 31, 2015

Dear Members,

Your Directors are pleased to present the 22nd Annual Report together with the Audited Financial Statements for the financial year ended March 31,2015.

FINANCIAL HIGHLIGHTS

The financial highlights of the Company for the year ended March 31,2015 are presented below:-

(Amount in lakhs.)

Particulars 2014-2015 2013-2014

Income from Operations 409.31 1048.96

Other Income 49.15 7.28

Total Expenditure 484.65 919.87

Interest 15.03 171.48

Gross Profit (after Interest but before (41.22) (35.12) depreciation and taxation)

Depreciation 109.89 46.88

Profit before tax (151.11) (81.99)

Provision for Current Taxes 0 0

Provision for Deferred Taxes 6.62 20.20

Profit after Tax (166.45) (65.75)

Balance brought forward from last year 60.65 126.41

DIVIDEND

As the Company did not have profits during the financial year, the Board is not in a position to declare dividend this year.

OPERATIONAL PERFORMANCE

The turnover of the Company has been decreased to Rs. 409.31 from Rs. 1048.96 during the year 2014-15 and the company has incurred a Gross Loss of Rs.41.22 lakhs before depreciation as against Gross Loss of Rs.35.12 lakhs in the previous year. After deducting depreciation of Rs.109.89 Lakhs the operations resulted in a net loss of Rs. 151.11 lakhs as against 81.99 lakhs loss in the previous year. Though the company has developed excellent engineering, planning and project execution skills, due to the prevailing market uncertainties and challenges, such as poor economic conditions, high financial costs and rising construction costs in the real estate environment, has resulted in a loss during this year. The company has not undertaken any new real estate activity during the year. The company has also started its own printing activity during the year on account of diversification and expecting a reasonable business growth in the future.

DIRECTORS

The Board of Directors comprises of 5 Directors, out of which one Director is a Woman Director and 3 Directors are Independent Directors.

COMPANY SECRETARY

The Company Secretary, Mr.I Chandramohan has resigned from the services wef 10.01.2015 and Mr P Krishnaswamy has been appointed as new Company Secretary wef 02.03.2015

DISCLOSURES OF PARTICULARS OF CONSTITUTING "GROUP" AS DEFINED IN SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009.

Pursuant to information received from the promoters, the name of the promoters and entities comprising group (Promoter Group) as defined under Securities and Exchange Board of India (Issue of Capital and Disclosure requirements), Regulations, 2009.

PROMOTERS

G. RAMAMURTHY & Family

(Family for this purpose includes spouse, dependent children and parents.)

PUBLIC DEPOSITS

Your Company has not accepted any deposits and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

AUDITORS & AUDITORS REPORT

The Auditors N Sankaran & Co, Chartered Accocutant, Chennai, was appointed to hold office till the conclusion of Annual general meeting to be held for the financial year 2016-17. The Members are required to ratify appointment and Board recommends for the same.

M/s. N.Sankaran & Co, Chartered Accountants, Chennai, has submitted their audit report according to CARO 2015. The observations of auditors in their reports are self explanatory and therefore do not call for any further comments.

SECRETARIALAUDIT

According to the provisions of the Section 204 of the Companies Act, 2013, read with rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the secretarial audit report submitted by M. Damodaran Associates Practicing Company Secretaries is enclosed as a part of this report marked Annexure A

STATUTORY COMPLIANCES

Delays caused in remitting the statutory dues towards TDS, Service Tax, Provident Fund to the concerned authorities due to liquidity issues with the company.

During the year, on account of non-payment of Service tax dues, the department has attached the bank accounts of the company and recovered an amount of Rs.18.25 lacs upto 31.03.15.The company is yet to initiate the process to settle the issues.

During the year, the company had delayed repayment of principal and interest to various banks/financial institutions and in turn the accounts became NPA. The delays were caused mainly due to liquidity issues in the company.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act,20l3, the Directors, to the best of their knowledge and belief, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii. the selected accounting policies were applied consistently and the directors 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 March 31,2015 and of the profit of the Company for the year ended on that date;

iii. 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;

iv. the annual accounts have been prepared on a going concern basis.

v. they have laid down internal financial controls that are adequate and were operating effectively.

vi. they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively

INVESTOR EDUCATION & PROTECTION FUND

As at March 31, 2015 dividends amounting to Rs.13,60,948/- have not been claimed by shareholders of the Company. The Company has been intimating the shareholders to lodge their claim for dividend from time to time.

As per the provisions of Section 125 of the Companies Act, 2013, dividends that have not been claimed by the shareholders for a period of seven years from the date of transfer to the unpaid dividend account will be transferred to the Investor Education and Protection Fund in accordance with the current regulations.

LISTING

The securities of the Company are listed on BSE Limited. The Company has duly paid the listing fees to the aforesaid Stock Exchange for the financial year 2015-2016.

DEPOSITORY SYSTEM

Trading in Equity shares of the Company is permitted only in dematerialized form. All requests for dematerialization of shares are processed and the confirmation is given to the respective depositories i.e. NSDL and CDSL within the stipulated time. Upto 31 " March 2015, 89.57% Equity Shares of the Company have been dematerialized.

Number of Board Meetings held

The Board of Directors duly met 5 times during the financial year from 1 "April, 2014 to 31" March, 2015. The dates on which the meetings were held are as follows: 26.05.2014; 13.08.2014; 13.11.2014; 20.11.2014 & 11.02.2015

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the listing agreement with Stock Exchanges, the cash flow statement for the year 2014-15 is annexed hereto.

DISCLOSURES

INFORMATION AS PER SECTION I34(3)(M) OF THE COMPANIES ACT, 2013 READ WITH RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 -CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Company's core activity at present is civil construction which is not power intensive. The Company is making every effort to reduce the consumption of power.

FOREIGN EXCHANGE EARNINGSAND OUTGO

Foreign Exchange Earnings Rs. Nil (Previous Year Rs. Nil/-)

Year ended 31.03.2015 Year ended 31.03.2014

Particulars INR In foreign INR In foreign Currency Currency

Foreign Exchange outgo

Imports -NIL- -NIL- 4,68,60,820 US$258000 & Euro 364110.

Foreign Travel 46,820/- 500 Pounds 2,73,109/- US$ 3000; GBP 420;

Euro 200&Yan 2500

VIGIL MECHANISM

In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.rflindia.org.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure-B.

RELATED PARTY TRANSACTIONS

Related party transactions that were entered during the financial year were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-C.

The Board of Directors of the Company has, on the recommendation of the Audit Committee, adopted a policy to regulate transactions between the Company and its Related Parties, in compliance with the applicable provisions of the Companies Act 2013, the Rules thereunder and the Listing Agreement. This Policy was considered and approved by the Board has been uploaded on the website of the Company at www.rflindia.org.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate social responsibility provisions are not applicable to your company as your company did not qualify the rules provided in Section 135 of the Companies Act 2013.

CORPORATE GOVERNANCE

As per SEBI Circular No CIR/CFD/POLICYCELL/7/2014 dt 15.09.2014, the company is exempted from complying with the provisions of Clause 49 of the Listing Agreement, since the paid up equity share capital does not exceed Rs.10 crores and net worth does not exceed Rs.25 crore.

REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

S. No Name Designation Remuneration Remuneration paid FY paid FY 2014-15 2013-14

Rs.in Lakhs Rs.in Lakhs

1. G Ramamurthy Managing Director 3.60 30.00

Whole Time

2. R Usha Director 3.60 21.00

S. No Name Increase in Ratio/Times remuneration per Median from previous of employee year remuneration Rs.in Lakhs

1. G Ramamurthy (26.40) 3 Times

2. R Usha (17.40) 3 Times



PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the Company and the policy of the Company on risk management is provided elsewhere in this Annual Report in Management Discussion and Analysis.

ACKNOWLEDGEMENTS

The Board places on record its appreciation for the assistance and co-operation received from the Banks and Government Authorities.

The Board also places on record its gratitude to the employees at all levels for their commitment and dedicated efforts. The Directors are also thankful to the shareholders for their continued support to the Company.

Place: Chennai By order of the Board Dated: 29.05.2015 Guruswamy Ramamurthy Chairman & Managing Director (DIN :00060323)




Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the Annual Report together with the Audited Financial Statements for the financial year ended March 31,2014.

FINANCIAL HIGHLIGHTS

The financial highlights of the Company for the year ended March 31,2014 are presented below:-

(Amount in lakhs.)

Particulars 2013-2014 2012-2013

Income from Operations 1048.96 1259.85

Other Income 7.28 3.18

Total Expenditure 919.87 911.35

Interest 171.48 164.80

Gross Profit (after Interest bu t (35.12) 179.65 before depreciation and taxation)

Depreciation 46.88 35.68 Profit before tax (81.99) 143.97

Provision for Current Taxes - 37.12

Provision for Deferred Taxes (20.2 0) (9.67)

Profit after Tax (65.75) 116.52

Balance brought forward from last 126.41 74.17 year

DIVIDEND

As the Company did not have profits during the financial year, the Board is not in a position to declare dividend this year.

OPERATIONAL PERFORMANCE

The turnover of the Company has been decreased to 1048.96 from 1259.85 during the year 2013-14 and the company earned a Gross Loss of Rs.35.12 lakhs before depreciation as against Gross Profit of Rs.179.65 lakhs in the previous year.After deducting depreciation of Rs.46.88 Lakhs the operations resulted in a net loss of Rs. 65.75 lakhs as against 116.52 lakhs profits in the previous year.Though the company has developed excellent engineering, planning and project execution skills, due to the prevailing market uncertainties and challenges such as poor economic conditions, high financial costs and rising construction costs in the real estate environment has been resulted a loss during this year.

BUSINESS OUTLOOK

Real Estate

The Indian real estate sector has come a long way and is today one of the fastest growing market in the world. It comprises four sub-sectors - housing, retail, hospitality, and commercial. While housing contributes to five-six percent of India''s gross domestic product (GDP), the remaining three sub-sectors are also increasing at a fast pace.The total realty market in the country is expected to touch US$ 180 billion by 2020.

Real estate in India is being recognised as an infrastructure service that is driving the economic growth engine of the country. Growing infrastructure requirement in diverse

sectors such as tourism, education, healthcare, etc., are offering several investment opportunities for both domestic as well as foreign investors. Total investment by private equity (PE) funds in the real estate sector from January-March 2014 was approximately Rs 28 billion (US$ 465.19 million).This is a substantial increase of 28 per cent compared to the previous quarter and close to 2.5 times the investments during January-March 2013.

The construction development sector, including townships, housing, built-up infrastructure and construction-development projects garnered total foreign direct investment (FDI) worth US$ 23,131.64 million in the period April 2000-February 2014. Construction (infrastructure) activities during the period received FDI worth US$ 2,462.60 million, according to the Department of Industrial Policy and Promotion (DIPP).

Government Initiatives

The Government of India has allowed FDI up to 100 per cent in development projects for townships and settlements. Hundred per cent FDI is also permitted in the Hotel and Tourism sector through the automatic route.

A committee on Streamlining Approval Procedure for Real Estate Projects (SAPREP) was constituted by the Ministry of Housing & Urban Poverty Alleviation (MHUPA) to streamline the process of seeking clearances for real estate projects.

The Real Estate (Regulation and Development) Bill, 2013, as approved by the Union Cabinet is a pioneering initiative aimed at delivering a uniform regulatory environment to protect the consumer, help in quick verdicts of disputes and ensure systematic growth of the sector.

Road Ahead

The Indian construction and real estate sector continues to be a favoured destination for global investors. Several large global investors, including a number of sovereign funds, have taken the first move by partnering with successful local investors and developers for investing in the Indian real estate market. This is expected to result in high transaction activity, especially in income yielding commercial office assets during 2014.

The residential asset class looks to have great potential for growth. "With housing requirements growing across cities and funds investing in the asset class primarily in the form of NCDs providing fixed returns, investments in the right project have the potential to yield healthy returns," said Mr Sanjay Dutt, Executive Managing Director - South Asia, Cushman &Wakefield.

Further, demand for space from sectors such as education and healthcare has opened up ample opportunities in the real estate sector. The country still needs to add three million hospital beds to meet the global average of three for every 1,000 people.

Printing

Segmentation of the self adhesive label industry is a very important part of its growth and evolution.The industry may be facing momentary slowdown due to circumstance, but on a year on year basis, the label industry continues to register nearly double digit growth. The slowdown in the manufacturing sector is expected to end and the economy is slated to look up once a new stable government takes charge after general elections. India has no dearth of investors who drive growth in an industry that registers automatic growth consistently. Not all growing industrial segments experience the entry of new entrepreneurs besides expansion moves from existing companies.

The Indian Label industry would have ended the year on a very positive note and registered higher investments and growth rate but for the exchange rates having played the spoil sport. Before Label Expo Europe, last year all looked very good but when the rupee fell by almost 15% making equipment costlier, label printers put purchases on hold and also many of them put off their trip to Brussels. Another factor that has been responsible for slower growth is the political instability of the central government facing the nuances of coalition politics. Also FDI going on hold is the anticipation of stability after the general elections impacted the economy adversely. However the Indian Label industry is still moving ahead with caution to achieve growth and cater to a Market that still has a lot of potential.

DIRECTORS

In compliance with the provisions of the Section 152 of the Companies Act, 2013 read with Articles of Association of the Company, Mrs. Usha and Mr. Guruswamy Ramamurthy are retiring at this Annual General Meeting and being eligible, offer themselves for re- appointment.

Brief resume of the Directors, seeking appointment/ re-appointment, nature of their expertise as stipulated under clause 49 of the listing agreement with the Stock Exchanges, is appended to the notice convening the Annual General Meeting.

Company Secretary

The Company Secretary, Mr.Amrit Lal Bisani, passed away in the month of November, 2013. The Board deeply regrets his untimely demise, and wishes to take on record the unparalleled service rendered by him during his tenure.

DISCLOSURES OF PARTICULARS OF CONSTITUTING "GROUP" AS DEFINED IN SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009.

Pursuant to an information from the promoters, the name of the promoters and entities comprising group (Promoter Group) as defined under Securities and Exchange Board of India (Issue of Capital and Disclosure requirements), Regulations, 2009.

PROMOTERS

G. RAMAMURTHY & Family

(Family for this purpose includes spouse, dependent children and parents.)

PUBLIC DEPOSITS

Your Company has not accepted any deposits and as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

AUDITORSAND AUDITORS REPORT

The Statutory Auditors of the Company shall be retiring at the ensuing Annual General Meeting of the Company. The Company has received notice from the Statutory Auditors of their intention of not seeking re-appointment at the ensuing Annual General Meeting of the Company.

Your Company has received a special notice from a member of the Company, in terms of the applicable provisions of the Companies Act, 2013, signifying his intention to propose the appointment of M/s. N. Sankaran & Co., Chartered Accountants, Chennai, (Firm registration number :003590S) as Statutory Auditors till the expiry of the next Annual General Meeting. M/s. N. Sankaran & Co., Chartered Accountants, Chennai expressed their

willingness to act as Statutory Auditors of the Company, if appointed, and have further confirmed that the said appointment would be in conformity with the provisions of the Companies Act, 2013, read with the rules made thereunder.

The Audit Committee and the Board of Directors recommend the appointment of M/s. N.Sankaran & Co, Chartered Accountants, Chennai, as Auditors for a further period of three years subject to the ratification by the members at every annual general meeting and to fix their remuneration.

With regard to the remarks of the Auditors in their report to the members, the Directors have to state that the note no.2, and referred to by the Auditors are self explanatory and no further comments are called for.

Your Directors have to comment as under on the point regarding confirmation of balances. The Company had sent circulars to most of the suppliers but the confirmation from them were not received except in a few cases. However, from the current year the Company will be writing for confirmation of all debit and credit balances. The Report of the Auditors being self-explanatory needs no further comments.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii. the selected accounting policies were applied consistently and the directors 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 March 31,2014 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on a going concern basis.

INVESTOR EDUCATION & PROTECTION FUND

As at March 31,2014 dividends amounting to Rs.17,18,739/- have not been claimed by shareholders of the Company. The Company has been intimating the shareholders to lodge their claim for dividend from time to time.

As per the provisions of Section 205A of the Companies Act, 1956, dividends that have not been claimed by the shareholders for a period of seven years from the date of transfer to the unpaid dividend account will be transferred to the Investor Education and Protection Fund in accordance with the current regulations.

LISTING

The securities of the Company are listed on BSE Limited and Madras Stock Exchange Limited. The Company has duly paid the listing fees to all the aforesaid Stock Exchanges for the financial year 2013-2014.

CORPORATE GOVERNANCE

The Company has complied with the mandatory provisions of Corporate Governance as prescribed under the Listing Agreement entered into with the Stock Exchanges, with which the Company''s shares have been listed. A separate Report on Corporate Governance is enclosed as a part of this Annual Report. A certificate as to Compliance of the conditions of Corporate Governance as stipulated under Clause-49 of the Listing Agreement is annexed to the Report on Corporate Governance.

COMPLIANCE CERTIFICATE

A certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

DEPOSITORY SYSTEM

Trading in Equity shares of the Company is permitted only in dematerialized form. All requests for dematerialization of shares are processed and the confirmation is given to the respective depositories i.e. NSDL and CDSL within the stipulated time. Upto 31st March 2014, 89.41% Equity Shares of the Company have been dematerialized.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the listing agreement with Stock Exchanges, the cash flow statement for the year 2013-14 is annexed hereto.

DISCLOSURES

INFORMATION AS PER SECTION 217 (1) (E) OF THE COMPANIES ACT, 1956 -CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO:

The Company''s core activity at present is civil construction which is not power intensive. The Company is making every effort to reduce the consumption of power.

FOREIGN EXCHANGE EARNINGS AND OUTGO

Foreign Exchange Earnings Rs. Nil (Previous Year Rs. Nil/-)

Year ended 31.03.2014 Year ended 31.03.2013 Particulars INR In foreign INR In fo reign Currency Currency Foreign Exchange outgo

Imports 4,68,60,820 US$258000 & -NIL- -NIL- Euro 364110 3,95,248/- *******

Foreign 2,73,109 US$ 3000; GBP 420;

Travel Euro 200 & Yan 2500

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration in excess of monetary ceiling prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 during the financial year 2013-14.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial and contributed significantly to the record results achieved during the year.

ACKNOWLEDGEMENTS

The Board placed on record its appreciation for the assistance and co-operation received from the Banks and GovernmentAuthorities.

The Board also places on record its gratitude to the employees at all levels for their commitment and dedicated efforts. The Directors are also thankful to the shareholders for their continued support to the Company.

Place: Chennai By order of the Board Dated: 26.05.2014 G. Ramamurthy Chairman & Managing Director (DIN : 00060323)


Mar 31, 2013

To The Members of Rajeswari Infrastructure Limited

The Directors are pleased to present the 20th Annual Report together with the Audited statement of Accounts for the year ended 31st March 2013

FINANCIAL RESULTS

The financial results of Company for the year ended March 31,2013 are presented below: -

(Amount in lakhs.)

Particulars 2012-2013 2011 -2012

Income from Operations 1259.85 1153.23

Other Income 3.18 1.34

Total Expenditure 954.26 915.20

Interest 164.8 94.42

Gross Prof it (after Interest but before depreciation and 179.65 170.81 taxation)

Depreciation 35.68 25.86

Profit before tax 143.97 144.95

Provision for Current Taxes 37.12 45.06

Provision for Deferred Taxes (9.67) 1.75

Profit after Tax 116.52 98.13

Balance brought forward from last year 74.17 8.18

DIVIDEND

Your Directors take pleasure on recommending equity dividend of 10% (Re. 1.00 per share of Rs. 10/- face value) on the paid-up equity share capital for the approval of members. The dividend, if approved, at the 20th Annual General Meeting by the members, will be paid to all those equity shareholders whose names appear in the register of members as on 18.09.2013 and also to those, whose names as beneficial owners are furnished by the National Securities Depository Limited and the Central Depository Services (India) Limited.

OPERATIONAL PERFORMANCE

The turnover of the Company has been increased from Rs I 153.23 lakhs to 1259.85 during the year 2012-2013 and the company earned a gross profit of Rs. 179.65 lakhs before depreciation as against 170.81 in the previous year. After deducting depreciation of Rs.35.68 lakhs and income tax provision 27.45 lakhs the operations resulted in a net profit of aRs 116.52 Lakhs as against Rs 98.13 lakhs in the previous year. The Company has developed excellent engineering, planning and project execution skills during this period. It is well recognized for quality consciousness and timely completion of the projects without cost over-run.

BUSINESS OUTLOOK

CONSTRUCTION & INFRASTRUCTURE

At the constant prices (2004-05) the construction sector showed a growth of 5.9 percent in 2012-13 compared to 5.6 percent growth in 2011-12. Opportunities for the constructions sector arise from investments in the infrastructure sector comprising transportation (development of roads, airports, ports and railways), energy (thermal and hydroelectric power), irrigation telecom, urban infrastructure and industrial capex (from sectors such as autos/auto-ancillaries, textiles, steel, cement and hydrocarbon).

Based on current announcements infrastructure spending in the Xllth five year plan (April 2013-18) is expected to be to the tune of USD I trillion assuming a construction intensity of 50-55% this theoretically translates into an opportunity of USD 500 billion for the construction industry over 2012-17.

The large planned investment in infrastructure would require significant capital mobilization and banks the dominant source of debt funding for infrastructure projects, would not be able to meet the sectors increasing requirements given their limitations related to sector/group exposure norms and asset -liability mismatches. Recent policy initiatives such as creation of infrastructure Dept Funds (IDFs) and the role of India Infrastructure Finance company Limited (IIFCL) are steps in the right direction to channelise long-term debt funds to the infrastructure sector.

Companies have suffered increased working capital cycles due to delays in realizing payments from clients, piling work- in-progress due to delayed certification by clients. Labour shortages and government welfare schemes such as the National Rural Employment Guarantee Scheme have resulted in higher labour costs. Slower pace of execution and higher input and labour costs affected the operating profits of construction companies while high interest costs clubbed with higher debt eroded their net profits.

Due to the intense competition and pressure on margins in the core construction business coupled with focus towards executing infrastructure development projects such as toll roads, power projects on a PPP mode, most construction companies have undertaken forward integration into the infrastructure asset ownership space by bidding for projects such as toll roads, power projects etc. on a build -operate-transfer (BOT) basis. Many Construction companies have actively sought to dilute stakes in SPVs to private equity commitments in their under construction projects. However given the current macroeconomic environment companies may find it challenging to attract external investments into their projects at mutually agreeable terms.

Buildings and housing & Real Estate

The real estate sector in India is being recognized as an infrastructure service that is driving the economic growth of the country.

Foreign direct investment (FDI) in the sector is expected to increase to US$ 25 billion in the next 10 years,from present US$ 4 billion, according to a latest industry body report.

As per a report released by the Mckinsey Global Institute (MGI)- on April 2010, the country''s urban population will soar to 590 million by 2030, from 340 million in 2008. India''s cities could generate 70 percent of the net new jobs created by 2030,produce more than 70 per cent of the country''s gross domestic product (GDP),and stimulate a near four-fold increase in per capita income it also says that India needs to invest US$ 1.2 trillion over next 20 years to modernize urban infrastructure and keep pace with the growing urbanization.

Amount of FDI inflows for the financial year 2012-13 for the month of December 2012 was US$ I. I billion. Amount of total FDI equity inflows into India (equity inflows re-invested earnings other capital) for the financial year 2012-13 (from April 2012 to December, 2012) was estimated at US$ 27.19 billion. Out of which 12% was in the Housing & Real Estate segment.

Housing and real estate sector including Cineplex, multiplex, integrated townships and commercial complexes etc, attached a cumulative foreign direct investment (FDI) worth US$ I 1, 168 million from April 2000 to April 2012.

DIRECTORS

In compliance with the provisions of the Companies Act, 1956 in accordance with the Company''sArticles of Association, Mr. K.V. Sambavadass, Mr. D. Sekaran and Mr M S Elangovan are retiring at this Annual General Meeting and being eligible, offer themselves for re-appointment.

Brief resume of the Directors, seeking appointment/ re-appointment, nature of their expertise as stipulated under clause 49 of the listing agreement with the Stock Exchanges, is appended to the notice convening the Annual General Meeting.

DISCLOSURES OF PARTICULARS OF CONSTITUTING "GROUP" PURSUANT TO REGULATION 3(I)(E) OF THE SEBI(SUBSTANTIAL ACQUISITION OF SHARES & TAKEOVERS) REGULATIONS, 1997.

Pursuant to an information from the promoters, the name of the promoters and entities comprising group as defined under Monopolies and Restrictive Trade Practice (MRTP)Act, 1969,are as under for the purpose of the SEBI(Substantial Acquisition of Shares &Takeovers) Regulations, 1997.

PROMOTERS

G. RAMAMURTHY & Family

(Family for this purpose includes spouse, dependent children and parents.)

PUBLIC DEPOSITS

Your Company has not accepted any deposits and, as such, no amount of principal or interest was outstanding on the date of the Balance Sheet.

AUDITORS AND AUDITORS REPORT

The retiring auditor, Mr. R. Sundararajan, FCA Chartered Accountant, Chennai has expressed his inability to continue in office. In the place of retiring Auditor, M/S. N Sankaran & Co., Chartered Accountants, Chennai are being considered for appointment as Statutory Auditors till the expiry of the next Annual General Meeting.The Audit Committee and the Board of Directors recommend the appointment of M/S. N Sankaran & Co., Chartered Accountants, Chennai as Auditors for a further period of one year and to fix their remuneration.

With regard to the remarks of the Auditors in their report to the members, the Directors have to state that the note no.35,and referred to by the Auditors are self explanatory and no further comments are called for.

Your Directors have to comment as under on the point regarding confirmation of balances. The Company had sent circulars to most of the suppliers but the confirmation from them were not received except in a few cases. However, from the current year the Company will be writing for confirmation of all debit and credit balances. The Report of the Auditors being self-explanatory needs no further comments.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 217 (2AA) of the Companies Act, 1956, the Directors, to the best of their knowledge and belief, confirm that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure.

ii. the selected accounting policies were applied consistently and the directors 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 March 31,2013 and of the profit of the Company for the year ended on that date;

iii. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the annual accounts have been prepared on agoing concern basis.

INVESTOR EDUCATION & PROTECTION FUND

As at March 31,2013 dividends amounting to Rs. 14,77,729/- have not been claimed by shareholders of the Company. The Company has been intimating the shareholders to lodge their claim for dividend from time to time.

As per the provisions of Section 205Aof the Companies Act, 1956, dividends that have not been claimed by the shareholders for a period of seven years from the date of transfer to the unpaid dividend account will be transferred to the Investor Education and Protection Fund in accordance with the current regulations.

LISTING

The securities of the Company are listed on the Bombay Stock Exchange Limited and Madras Stock Exchange Limited. The Company has duly paid the listing fees to all the aforesaid Stock Exchanges for the year 2012-2013.

CORPORATE GOVERNANCE

The Company has complied with the mandatory provisions of Corporate Governance as prescribed under the Listing Agreement of the Stock Exchanges, with which the Company''s shares have been enlisted. A separate Report on Corporate Governance is enclosed as a part of this Annual Report. A certificate as to Compliance of the conditions of Corporate Governance as stipulated under Clause-49 of the Listing Agreement is annexed to the Report on Corporate Governance.

COMPLIANCE CERTIFICATE

A certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report.

DEPOSITORY SYSTEM

Trading in Equity shares of the Company is permitted only in dematerialized form. All requests for dematerialization of shares are processed and the confirmation is given to the respective depositories i.e. NSDL and CDSL within the stipulated time. Upto 31st March 2013, 89.10% Equity Shares of the Company have been dematerialized.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the listing agreement with Stock Exchanges, the cash flow statement for the year 2012-13 is annexed hereto.

DISCLOSURES

INFORMATION AS PER SECTION 217 (I) (E) OF THE COMPANIES ACT, 1956 -CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO:

The Company''s core activity at present is civil construction which is not power intensive. The Company is making every effort to reduce the consumption of power.

PARTICULARS OF EMPLOYEES

There are no employees drawing remuneration in excess of monetary ceiling prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 during the financial year 2012-13.

INDUSTRIAL RELATIONS

Industrial relations continued to be cordial and contributed significantly to the record results achieved during the year.

ACKNOWLEDGEMENTS

The Board placed on record its appreciation for the assistance and co-operation received from the Banks and Government Authorities.

The Board also places on record its gratitude to the employees at all levels for their commitment and dedicated efforts. The Directors are also thankful to the shareholders for their continued support to the Company.

Place: Chennai By order of the Board Date : 29.05.2013 -Sd/-

G Ramamurthy

Chairman & Managing Director

Registered Office

18/23, 2nd Cross Street, EastCITNagar

Nandanam, Chennai - 600 035

 
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