TO THE MEMBERS
Your Directors have pleasure in presenting their 83rd Annual Report and the AuditedAccounts of the Company for the year ended 31st March 2019.
1. FINANCIAL RESULTS
The financial results for the year ended 31st March 2019 after charging all expensesand contribution to P.A.C. Ramasamy Raja Memorial Fund of र 40 Lakhs (which is withinthe limits prescribed in the Articles of Association) but before deducting finance costand depreciation have resulted in operating profit (EBITDA) of र 7994.33 Lakhsagainst र 7572.15 Lakhs for the previous financial year 2017-18.
After deducting र 2198.07 Lakhs towards finance cost and providing र 3178.05Lakhs towards Depreciation the Net Profit and other comprehensive income before tax forthe year is र 2511.73 Lakhs as compared to र 2510.57 Lakhs for the previousfinancial year 2017-18.
Adding the surplus of र 2000 Lakhs brought forward from the previous year yourDirectors propose to appropriate the total sum of र 4511.73 Lakhs as detailed below:
| ||(र in Lakhs) |
|Provision for Taxation - Current Tax ||78.68 |
|- MAT Credit ||(78.68) |
|- Deferred Tax ||(86.37) |
|- Income Tax related to earlier year ||(77.58) |
|Dividend for FY 2017-18 र 4/- per share ||295.05 |
|Tax on Dividend @ 20.556% ||60.65 |
|Transfer to General Reserve and FVTOCI Reserve ||1319.97 |
|Balance carried over to Balance sheet ||3000.00 |
|TOTAL ||4511.73 |
2. SHARE CAPITAL
The Paid-up Capital of the Company is र 737.62 Lakhs (Previous Year: र 737.62Lakhs) consisting of 7376160 Shares of र 10/- each.
Your Directors have pleasure in recommending a Dividend of र 4/- per share(Previous Year: र 4/- per share). The Company will pay Dividend Distribution Tax underIncome Tax Act 1961.
The total amount of Dividend outgo for the year will be र 295.05 Lakhs. The amountof tax on dividends would be र 60.65 Lakhs.
An amount of र 78.68 Lakhs towards Current Tax has been provided and Deferred Taxof र 86.37 Lakhs has been withdrawn for the year 2018-19. An amount of र 77.58Lakhs being excess Income Tax provision related to earlier years has been withdrawn duringthe year 2018-19. The Company's entitlement of MAT Credit of र 78.68 Lakhs has beenrecognized in the books during the year.
5. MANAGEMENT DISCUSSION AND ANALYSIS
In India cotton production was estimated at 325 Lakhs bales during cotton season2018-19 (October to September) as against 365 Lakhs bales during the previous year a dropin production of 11% due to erratic monsoon in cotton growing area and reduced yield. Thecotton production in India is continuously declining from the peak production of 400 Lakhsbales produced during the cotton season 2013-14. The current year's cotton crop is thelowest production in the last 10 years. The Government of India has increased the MinimumSupport Price (MSP) for cotton by more than 25% during the year under review. The lowerproduction coupled with increased MSP has resulted in spike in cotton prices and Millswere forced to buy good quality cotton at higher prices.
The depreciation of Rupee against US-Dollar has made the import of cotton veryexpensive. The waste cotton prices (raw material for Open End Spinning) has prevailed atreasonable level. The Company has judiciously procured high quality cotton by closelymonitoring the demand and supply situation and also the price movements in domestic andinternational cotton markets.
The Company is now focusing on production of customized fine / super fine yarn to getbetter contribution. Some of the ring frames and open end frames have been stopped for fewdays for shifting of machines and modernization. Due to this the production volume hasdecreased to 150.16 Lakhs Kgs during the financial year 2018-19 as against 151.92 LakhsKgs of last year.
SALE OF YARN
The sale volume has decreased in line with production and accumulation of stock duringthe financial year 2018-19 and it was 146.12 Lakhs Kgs as compared to 155.89 Lakhs Kgs oflast year. The sale value of yarn has decreased to र 401.92 Crores during the FY2018-19 as compared to र 417.60 Crores of last year.
The Company was able to attract more customers from overseas market and continues tohave a good demand from International customers on account of supply of consistent andsuperior quality of yarn. Due to good demand for our cotton yarn in export markets yarnprices in exports in dollar terms have improved during the financial year 2018-19.However yarn prices in domestic yarn markets were stagnant inspite of higher cottonprices. Reduced consumption of yarn in India due to import of fabric which was grown by20% during the year 2018-19 coupled with excess spinning capacity has created over supplysituation for yarn and hence the Mills were not able to pass on the increased cost ofproduction in the yarn prices. The Company's focus on value added customized yarn countsviz. Mercerized Yarn Melange Yarn Core Yarn etc. has helped to mitigate the impact tosome extent.
The Company has setup the preliminary production process for the above value addedyarns successfully and commercial production has started. The sale volume of mercerizedyarn has increased from 38 Tonnes to 122 Tonnes and the mlange yarn volume has increasedfrom 2 Tonnes to 44 Tonnes. The full benefit of such value added production will startyielding results in the forthcoming years.
We have made export of Cotton Yarn (including merchant exports) for a value of र127.96 Crores as against र 113.66 Crores of the previous year. In addition to ourregular International Market our sales volume has grown considerably in new markets viz.Turkey Portugal etc. where our yarn quality is well accepted.
Your Directors are thankful to M/s. Mitsubishi Corporation M/s. Doko Spinning Co.Ltd. and M/s. Unitika Ltd. Japan for their continued support and efforts for promotionof exports to Japan.
During the financial year 2018-19 the Company was able to consume power from its ownwind farms to the extent of 64% of total power requirement as compared to 71% consumedduring the last year. Because of lower power generation from wind mills the Company wasforced to consume power from other sources which are high cost and due to this the powercost has been increased during the financial year 2018-19 to र 36.98 Crores ascompared to र 30.94 Crores incurred during previous year.
The Finance cost during the financial year 2018-19 has increased to र 2198.07Lakhs from र 1752.58 Lakhs mainly for the additional borrowings for modernization ofspinning machineries automation and investments made in machineries to produce valueadded counts.
During the financial year 2018-19 the Company has received dividend income of र20.86 Crores (PY: र 10.27 Crores) which includes an amount of र 10.59 Crores (PY:Nil) being dividend on Preference Shares declared and paid by M/s. Thanjavur SpinningMill Limited. The dividend received on Preference Shares includes arrears of dividendrelated to previous financial years from 18-07-2014 to 31-03-2018 to the extent of र8.34 Crores and dividend for the financial year 2018-19 of र 2.25 Crores. M/s.Thanjavur Spinning Mill Limited is taking steps for redemption of Preference Shares.
KEY FINANCIAL RATIOS
Pursuant to Schedule V(B) of SEBI (LODR) Regulations 2015 the Key Financial Ratiosfor the year 2018-19 are given below:
|Particulars ||31-03-2019 ||31-03-2018 ||Formula adopted |
|1 Debtors Turnover Ratio (Days) ||50 ||40 ||365 Days / (Net Revenue / Average Trade Receivables) |
|2 Inventory Turnover Ratio (Days) ||117 ||112 ||365 Days / (Net Revenue / Average Inventories) |
|3 Interest Coverage Ratio ||1.91 ||2.44 ||(Profit Before Tax + Interest)/ (Interest + Interest Capitalised) Current Assets / (Total Current Liabilities - Other Financial |
|4 Current Ratio ||1.03 ||1.08 ||Liabilities - Current maturities of Long Term Debt) |
|5 Debt - Equity Ratio ||1.55 ||0.88 ||Total Debt / Total Equity |
|6 Operating Profit Margin ||19% ||18% ||EBITDA / Net Revenue |
|7 Net Profit Margin ||7% ||7% ||Net Profit / Net Revenue |
|8 Return on Networth ||9% ||11% ||Total Comprehensive Income / Average Net worth |
|9 Total Debt / EBITDA ||5.74 ||3.16 ||Total Debt / EBITDA |
|10 Return on Capital Employed ||8% ||9% ||(TCI + Interest)/ (Average of Equity plus Total Debt) |
|11 Price Earning Ratio ||22 ||28 ||Market Price per share as at 31 March / Earning per share) |
Notes: a) For serial no. 5 and 9 there have been significant change (ie. 25% or more)in the ratios compared to previous year. The same is due to increase in debt for fabricprojects / modernisation of spinning mills.
b) EBITDA denotes Profit Before Tax + Interest + Depreciation
6. MODERNISATION / EXPANSION
As a part of continuous thrust on modernization and expansion programme the Companyhas invested about र 60 Crores in textile machinery & equipments like fullyautomated Ring frames with link coners by replacing old ring frames modernization of TFOmachines installation of modern and most effective contamination removal equipment atblowroom investments in value added machineries like yarn mercerization core yarnmelange yarn etc.
7. PROSPECTS FOR THE CURRENT YEAR
Indian cotton prices are likely to remain firm on account of a tight supply situationless availability of good quality cotton crop damages etc. The Company is focusing onsourcing the raw materials across the globe at a competitive price and production of morevalue added yarn with contamination free cotton. The Company has developed strong customerbase and also strengthened its infrastructure to manufacture any kind of yarn demanded bythe customers to mitigate the risk of fluctuating yarn and cotton prices. The consistentgrowth of import volume of fabric into India is a major concern for spinning mills inIndia as it reduces the domestic demand for yarn.
The Company is concentrating on modernizing the machineries to further improve qualityand cost effective production. Efforts are being taken continuously to scale up theproduction of value added counts like Melange yarn Mercerized yarn core spun yarn etc.which will fetch higher margin and will replace commodity counts in the forthcoming years.With the flexibility to produce value added super fine counts the Company will continueto make efforts in expanding the marketing activities across the globe to increase theprofitability.
8. TRANSFER OF ASSETS FROM ANDHRA PRADESH UNIT
The Company has decided to shift majority of the machines installed at Andhra PradeshUnit to the parent unit at Rajapalayam due to better control over operation and costs.After shifting the majority of the machineries the Company will initiate the process ofselling the residual machines land & building of AP Unit.
9. FABRIC PROJECT
As reported in the last year's report the Company has started implementing project forestablishing yarn dyed weaving unit at Rajapalayam with the capacity of 122 Looms toproduce 10 Million meters of fabrics per annum at a cost of र 250 Crores. The Companyhas received approval for a term loan for this project under Amended Technology FundScheme of Government of India.
The Company has signed a Memorandum of Understanding with Government of Tamil Nadu forgetting necessary support and facilitation and a structured package of incentives fromGovernment of Tamil Nadu as per Tamil Nadu Industrial Policy 2014. All the majormachineries have been ordered and arrivals of machineries have commenced from March 2019.Installation of machines are under progress and it is expected to commence the commercialproduction during the 2nd quarter of financial year 2019-20.
The long term borrowings of the Company as on 31-03-2019 was र 258 Crores and anamount of र 134 Crores is yet to be availed from Banks as Term Loan for fabric andspinning modernization projects. After commencement of commercial production of fabricdivision the Company has a plan of putting up a fabric processing unit / expansion ofweaving capacity after evaluating the market condition for processed fabric for which theexisting borrowing power delegated by the Members to the Board of र 500 Crores may notbe adequate. Hence approval of Members has been sought for enhancing the limit to र750 Crores in the notice convening the Annual General Meeting.
10. WIND MILL
The Company has wind mills with installed capacity of 35.15 MW for its captive powerconsumption. The wind farm has generated 622 Lakhs Kwh as compared to 683 Lakhs Kwh of theprevious year. The wind availability / velocity during the financial year 2018-19 was lowas compared to the financial year 2017-18. All the Units generated by wind mills wereadjusted for captive consumption at our Mills in Tamil Nadu. The income during the yearfrom the Wind Mill Division was
र 41.46 Crores as against र 45.52 Crores of previous year.
11. ASSOCIATE COMPANY
During the year under review the following Companies have ceased to be an Associatesconsequent to review by the Board based on existence of voting power and significantinfluence in accordance with Ind AS - 28:
1. The Ramaraju Surgical Cotton Mills Limited
2. Sri Vishnu Shankar Mill Limited
3. Ramco Industrial and Technology Services Limited
4. Ramco Windfarms Limited
After the above reclassification the Company now has three Associate Companies viz.M/s. The Ramco Cements Limited M/s. Ramco Industries Limited and M/s. Ramco SystemsLimited. In accordance with Rule 5 of Companies (Accounts) Rules 2014 a statementcontaining the salient features of the financial statements of the Company's Associates'is attached in Form AOC-1 as Annexure - I.
CONSOLIDATED FINANCIAL STATEMENTS
As per provisions of Section 129(3) of the Companies Act 2013 and Regulation 34 ofSEBI (LODR) Regulations 2015 Companies are required to prepare consolidated financialstatements of its Subsidiaries and Associates to be laid before the Annual General Meetingof the Company. Accordingly the consolidated financial statements incorporating theaccounts of Associate Companies viz. M/s. The Ramco Cements Limited M/s. RamcoIndustries Limited M/s. Ramco Systems Limited along with the Auditors' Report thereonforms part of this Annual Report. As per Section 136 (1) of the Companies Act 2013 theFinancial Statements including Consolidated Financial Statements are available at theCompany's website at the following link at www.rajapalayammills.co.in.
The consolidated profit of the Company amounted to र 10447.49 Lakhs for the yearended 31st March 2019 as compared to र 11543.55 Lakhs of the previous year.
The Consolidated Total Comprehensive Income for the year under review is र10369.96 Lakhs as compared to र 11561.02 Lakhs of the previous year.
12. INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act 2013 the Company hasInternal Financial Controls Policy by means of Policies and Procedures commensurate withthe size & nature of its operations and pertaining to financial reporting. Inaccordance with Rule 8(5)(viii) of Companies (Accounts) Rules 2014 it is herebyconfirmed that the Internal Financial Controls are adequate with reference to thefinancial statements. ERP System developed by Ramco Systems Limited has been installed foronline monitoring of all functions and management information reports are being used tohave better internal control system and to take decisions in time.
13. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act 2013 and Regulation 22of SEBI (LODR) Regulations 2015 the Company has established a Vigil Mechanism and has aWhistle Blower Policy. The policy is available at the Company's website. The Policyprovides the mechanism for the receipt retention and treatment of complaints and toprotect the confidentiality and anonymity of the stakeholder. The complaints can be madein writing to be dropped into Whistle Blower Drop Boxes or through E-mail to dedicatedmail IDs. The Corporate Ombudsman shall have the sole access to these. The Policy providesto the complainant access to the Chairman of the Audit Committee. The web link for theVigil Mechanism is disclosed in the Corporate Governance Report.
Smt. R. Sudarsanam was reappointed as Managing Director of the Company for a period ofthree years starting from 01-04-2017 to 31-03-2020 at the AGM held on 10-08-2016. Based onthe recommendation of the Nomination and Remuneration Committee made at its meeting heldon 27-05-2019 the Board of Directors at their meeting held on 28-05-2019 have reappointedher as Managing Director for a further period of 3 years starting from 01-04-2020.Approval of the Members has been sought for her reappointment in the Notice convening theAGM.
In accordance with the provision of the Companies Act 2013 and in terms of theMemorandum and Articles of Association of the Company the following Directors retire byrotation at the ensuing Annual General Meeting and they are eligible for re-appointment.
1. Shri S.S. Ramachandra Raja (DIN: 00331491)
2. Shri P.R. Venketrama Raja (DIN: 00331406)
The following Directors have been reappointed as Independent Directors for another termof 5 years at the Annual General Meeting held on 10th August 2018:
1. Shri N.K.Ramasuwami Raja (DIN: 00432698) 01-04-2019 to 31-03-2024.
2. Justice Shri P.P.S. Janarthana Raja (DIN: 06702871) 01-04-2019 to 31-03-2024.
3. Shri V. Santhanaraman (DIN: 00212334) 01-04-2019 to 31-03-2024.
4. Shri K.B. Nagendra Murthy (DIN: 00359864) 04-08-2019 to 03-08-2024.
The Independent Directors hold office for a fixed term of 5 years and are not liable toretire by rotation. No Independent Director has retired during the year.
The Company has received necessary declarations from all the Independent Directorsunder Section 149(7) of the Companies Act 2013 that they meet the criteria ofindependence as provided in Section 149(6) of the Companies Act 2013.
Independent Directors have compiled with the code for Independent Directors prescribedin Schedule IV of the Companies Act 2013.
The Company had formulated a code of conduct for the Directors and Senior ManagementPersonnel and the same has been complied with.
At the Annual General Meeting held on 10th August 2018 a Special Resolution waspassed for continuation of Shri S.S. Ramachandra Raja (DIN: 00331491) beyond 01-04-2019who has attained the age of 75 years.
Smt. P.V. Nirmala Raju (DIN: 00474960) has been co-opted on 24-04-2019 as an AdditionalDirector. She will hold the office till the date of the forthcoming Annual GeneralMeeting. A Notice in writing has been received from a Member signifying his intention topropose the appointment of Smt. P.V. Nirmala Raju as Director at the Annual GeneralMeeting.
Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules 2014 it is reported thatother than the above there have been no changes in the Directors or Key ManagerialPersonnel during the year. The Audit Committee has four members out of which three areIndependent Directors. Pursuant to Section 177(8) of the Companies Act 2013 it isreported that there has not been an occasion where the Board had not accepted anyrecommendation of the Audit Committee.
In accordance with Section 178(3) of the Companies Act 2013 and based upon therecommendation of the Nomination and Remuneration Committee the Board of Directors haveapproved a policy relating to appointment and remuneration of Directors Key ManagerialPersonnel and Other Employees.
As per Proviso to Section 178(4) the salient features of the Nomination andRemuneration Policy should be disclosed in the Board's Report. Accordingly the followingdisclosures are given: Salient Features of the Nomination and Remuneration Policy: Theobjective of the Policy is to ensure that:
(a) the level and composition of remuneration is reasonable and sufficient to attractretain and motivate directors of the quality required to run the company successfully;
(b) relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and
(c) remuneration to directors key managerial personnel and senior management shall beappropriate to the working of the Company and its goals.
The Nomination and Remuneration Committee and this Policy shall be in compliance withthe Companies Act 2013 and SEBI (LODR) Regulations 2015.
The web address of the Policy is at http://www.rajapalayammills.co.in/pdf/nomination-and-remunerationpolicy.pdf.
15. EVALUATION OF BOARD
Pursuant to Section 134(3)(p) of the Companies Act 2013 and Regulation 25(4) of SEBI(LODR) Regulations 2015 Independent Directors have evaluated the quality quantity andtimeliness of the flow of information between the Management and the Board Performance ofthe Board as a whole and its Members and other required matters.
Pursuant to Schedule II Part D of SEBI (LODR) Regulations 2015 the Nomination andRemuneration Committee has laid down evaluation criteria for performance evaluation ofIndependent Directors which will be based on attendance expertise and contributionbrought in by the Independent Director at the Board and Committee Meetings which shall betaken into account at the time of reappointment of Independent Director.
Pursuant to Regulation 17(10) of SEBI (LODR) Regulations 2015 the Board of Directorshave evaluated the performance of Independent Directors and observed the same to besatisfactory and their deliberations beneficial in Board / Committee meetings.
Pursuant to Regulation 4(f)(2)(ii) of SEBI (LODR) Regulations 2015 the Board ofDirectors have reviewed and observed that the evaluation frame work of the Board ofDirectors was adequate and effective.
The Board's observations on the evaluations for the year under review were similar totheir observations for the previous year. No specific actions have been warranted based oncurrent year observations. The Company would continue to familiarise its Directors on theindustry technological and statutory developments which have a bearing on the Companyand the industry so that Directors would be effective in discharging their expectedduties.
During the year five Board Meetings were held. The details of the Meetings of theBoard and its various Committees are given in Corporate Governance Report.
17. SECRETARIAL STANDARD
As required under Clause 9 of Secretarial Standard 1 the Board of Directors confirmsthat the Company has complied with applicable Secretarial Standards.
18. PUBLIC DEPOSITS
Pursuant to Rule 8(5)(v)& (vi) of Companies (Accounts) Rules 2014 it is reportedthat the Company has not accepted any deposit from public during the financial year underreview. There was no outstanding of deposits as on 31-03-2019 (Previous year: NIL). TheCompany has no deposit which is not in compliance with the Chapter V of the CompaniesAct 2013.
The Company has received a sum of र 179 Lakhs from Directors as deposit / loanduring the financial year 2018-19. It has repaid an amount of र 106 Lakhs during theyear 2018-19. The loans from Directors are not treated as deposits under Chapter V of theCompanies Act 2013.
19. ORDERS PASSED BY REGULATORS
Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules 2014 it is reported that nosignificant and material orders have been passed by the Regulators or Courts or Tribunalsimpacting the going concern status and Company's operations in future.
20. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS
Pursuant to Section 186(4) of the Companies Act 2013 it is reported that:
(a) the particulars of loans are provided under Note No.47 (xiv).
(b) the particulars of the guarantees and investments are provided under Note No.44 andNote No. 10 & 11 respectively of Notes forming part of financial statements. Theguarantees are to secure the loans from Banks / Financial Institutions to the borrowers.
21. CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors have constituted a Corporate Social Responsibility (CSR) Committee and adopted aCSR Policy which is based on the philosophy that "As the Organization grows theSociety and Community around it also grows."
The Company has undertaken various projects in the areas of education health ruraldevelopment water and sanitation promotion and development of traditional artsprotection of national heritage livelihood enhancement projects etc. largely inaccordance with Schedule VII of the Companies Act 2013.
Your Directors are pleased to inform that the Company has fulfilled its CSR obligationspursuant to Section 135(5) of the Companies Act 2013. As against the requirement of र66.26 Lakhs the Company has spent र 72.66 Lakhs on CSR during the year 2018-19.
The CSR policy is available at the Company's website at the following link at http://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/corporate-social-responsibility-policy.pdf.
The Annual Report on CSR activities as prescribed under Companies (Corporate SocialResponsibility Policy) Rules 2014 is attached as Annexure - II.
M/s. N.A. Jayaraman & Co. Chartered Accountants (FRN: 001310S) and M/s. SRSV &Associates Chartered Accountants (FRN:015041S) who have been appointed as the StatutoryAuditors of the Company at the 81st Annual General Meeting would be the Auditors of theCompany till the conclusion of the 86th Annual General Meeting to be held in the year2022.
As required under Regulation 33(1)(d) of SEBI (LODR) Regulations 2015 the Auditorshave also confirmed that they hold a valid certificate issued by the Peer Review Board ofthe Institute of Chartered Accountants of India.
The report of the Statutory Auditors for the year ended 31st March 2019 does notcontain any qualification reservation or adverse remark and no instance of fraud has beenreported by Auditors under Section 143(12) of Companies Act 2013.
Shri M.R.L. Narasimha a Practicing Company Secretary is the Secretarial Auditor of theCompany. Pursuant to Section 204(1) of the Companies Act 2013 the Secretarial AuditReport submitted by the Secretarial Auditor for the year ended 31st March 2019 isattached as Annexure - III. The report does not contain any qualification reservation oradverse remark.
The Company is required to maintain the accounts and records which have been specifiedby the Central Government under Section 148(1) of the Act as cost records and accordinglysuch accounts and records are made and maintained by the Company.
The Board of Directors had approved the appointment of Shri M. Kannan Cost Accountantas the Cost Auditor of the Company to audit the Company's Cost Records relating tomanufacture of textile products for the year 2019-20 at a remuneration of र 1.40lakhs plus applicable taxes and out-of-pocket expenses.
The remuneration of the cost auditor is required to be ratified by the members inaccordance with the provisions of Section 148(3) of the Companies Act 2013 and Rule 14 ofCompanies (Audit and Auditors) Rules 2014. Accordingly the matter is being placed beforethe Members for ratification at the ensuing Annual General Meeting.
The Cost Audit Report for the financial year 2017-18 due to be filed with Ministry ofCorporate Affairs by 30-09-2018 had been filed on 06-09-2018. The Cost Audit Report forthe financial year 2018-19 is due to be filed within 180 days from the closure of thefinancial year and will be filed within the stipulated period.
23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Pursuant to Section 134(3)(m) of the Companies Act 2013 and Rule 8(3) of Companies(Accounts) Rules 2014 the information relating to Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.
24. EXTRACT OF ANNUAL RETURN
In Accordance with Section 92(3) of the Companies Act 2013 read with Rule 12(1) ofCompanies (Management and Administration) Rules 2014 an extract of the Annual Return inForm MGT-9 is attached herewith as Annexure - V.
In accordance with Section 134(3)(a) of the Companies Act 2013 the Company placed acopy of the annual return on its website at www.rajapalayammills.co.in.
25. CORPORATE GOVERNANCE
The Company has complied with the requirements regarding Corporate Governance asstipulated in SEBI (LODR) Regulations 2015. As required under Schedule V(C) of SEBI(LODR) Regulations 2015 a Report on Corporate Governance being followed by the Companyis attached as Annexure - VI. As required under Schedule V(E) of SEBI (LODR) Regulations2015 a Certificate from the Auditors confirming compliance is also attached as Annexure -VII to this Report.
26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosures in terms of provisions of Section 197(12) of the Companies Act 2013read with Rule 5(1) (2) and (3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 relating to remuneration are provided in Annexure - VIII.
27. INDUSTRIAL RELATIONS AND PERSONNEL
The Company has 3371 employees as on 31-03-2019. Industrial relations with employeesremained cordial during the year. Human Resources Development activities receivedconsiderable focus. The emphasis was on imparting training and development of theskill-set of the employees to enable them to face the challenges in the work environment.
The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. The Statement and disclosures pertaining to theSexual Harassment of women at workplace (Prevention prohibition and Redressel) Act 2013are available at point no. 10(xiii) of Corporate Governance Report.
28. RELATED PARTY TRANSACTION
Prior approval / Omnibus approval is obtained from the Audit Committee for all relatedparty transactions and the transactions are periodically placed before the Audit Committeefor its approval. No transaction with the related party is material in nature inaccordance with Company's "Related
Party Transaction Policy" and Regulation 23 of SEBI (LODR) Regulations 2015. Inaccordance with Indian Accounting Standard - 24 (Related Party Disclosure) the details oftransactions with the related parties are set out in Note No. 47 of disclosures formingpart of Financial Statements. As required under Regulation 46(2)(g) of SEBI (LODR)Regulations 2015 The Company's Related Party Transaction Policy is disclosed in theCompany's website and its web link is http://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/related-party-transaction-policy.pdf.
29. RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act 2013 and Regulation 17(9) of SEBI(LODR) Regulations 2015 the Company has developed and implemented a Risk ManagementPolicy. The Policy envisages identification of risk and procedures for assessment andminimization of risk thereof. The Risk Management Policy of the Company is available atthe Company's website at the following weblink http://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/risk-management-policy.pdf.
30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Dividend amount of र 1568100 remaining unclaimed / unpaid for a period of over 7years was transferred to IEPF on 17-08-2018.
892 Shares corresponding to the said dividend were transferred to IEPF on 15-09-2018.The Company had transferred a dividend र 707260 to IEPF for the 176815 Sharesalready transferred to IEPF.
Year wise amount of unpaid / unclaimed dividend lying in the unpaid account andcorresponding shares which are liable to be transferred to IEPF and due dates for suchtransfer are tabled below:
|Year ||Type of Dividend ||Date of Declaration of Dividend ||Last date for claiming Unpaid Dividend ||Due date for transfer to IEP Fund ||No. of Shares of each र10/- ||Amount of unclaimed / unpaid Dividend as on - 31-03-2019 र |
|2011-2012 ||Dividend ||06-08-2012 ||05-08-2019 ||03-09-2019 ||242096 ||242096 |
|2012-2013 ||Interim Dividend ||22-02-2013 ||21-02-2020 ||21-03-2020 ||234427 ||1172135 |
| ||Final Dividend ||01-08-2013 ||31-07-2020 ||29-08-2020 ||228611 ||228611 |
|2013-2014 ||Interim Dividend ||03-02-2014 ||02-02-2021 ||03-03-2021 ||220128 ||1100640 |
| ||Final Dividend ||04-08-2014 ||03-08-2021 ||01-09-2021 ||211814 ||529535 |
|2014-2015 ||Dividend ||12-08-2015 ||11-08-2022 ||09-09-2022 ||261570 ||653925 |
|2015-2016 ||Interim Dividend ||16-03-2016 ||15-03-2023 ||13-04-2023 ||286174 ||858522 |
|2016-2017 ||Dividend ||10-08-2017 ||09-08-2024 ||07-09-2024 ||285109 ||1140436 |
|2017-2018 ||Dividend ||10-08-2018 ||09-08-2025 ||07-09-2025 ||135462 ||541848 |
31. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act 2013 the Directors confirm that:
(a) they had followed the applicable accounting standards along with proper explanationrelating to material departures if any in the preparation of the annual accounts for theyear ended 31st March 2019;
(b) they had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as on 31st March 2019 and of the profit of theCompany for the year ended on that date;
(c) they had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the Annual Accounts on a going concern basis;
(e) they had laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively; and
(f) they had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
The Directors are grateful to the various Departments and agencies of the Central andState Governments for their help and co-operation. They are thankful to the FinancialInstitutions and Banks for their continued help assistance and guidance. The Directorswish to place on record their appreciation of employees at all levels for their commitmentand their contribution.
| ||On behalf of the Board of Directors |
| ||For RAJAPALAYAM MILLS LIMITED |
|RAJAPALAIYAM ||P.R. VENKETRAMA RAJA |
|28th May 2019. ||CHAIRMAN |