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Rama Steel Tubes Ltd.

BSE: 539309 Sector: Metals & Mining
NSE: RAMASTEEL ISIN Code: INE230R01027
BSE 00:00 | 27 Jul 153.75 6.70
(4.56%)
OPEN

147.05

HIGH

154.40

LOW

146.20

NSE 00:00 | 27 Jul 155.90 6.65
(4.46%)
OPEN

156.00

HIGH

156.70

LOW

145.00

OPEN 147.05
PREVIOUS CLOSE 147.05
VOLUME 109241
52-Week high 159.15
52-Week low 25.30
P/E 48.05
Mkt Cap.(Rs cr) 258
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 147.05
CLOSE 147.05
VOLUME 109241
52-Week high 159.15
52-Week low 25.30
P/E 48.05
Mkt Cap.(Rs cr) 258
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rama Steel Tubes Ltd. (RAMASTEEL) - Director Report

Company director report

To the Members

The Directors submit annual report of the Rama Steel Tubes Limited (the"Company" or "RAMA") along with the audited financial statements forthe financial year ended March 31 2020

FINANCIAL RESULTS

Particulars Standalone Consolidated
2019-20 2018-19 2019-20 2018-19
Revenue from Operations 29176.13 40455.87 35280.90 50414.61
Other Income 472.34 326.92 365.06 264.05
Total Revenue 29648.47 40782.79 35645.96 50678.66
EBIDTA 1370.97 1993.20 1538.17 2152.96
Finance Costs 807.06 764.78 963.14 937.19
Depreciation and Amortisation Expenses 221.78 218.33 290.09 276.44
Net Profit Before Tax 342.13 1010.09 284.94 939.33
Tax Expenses 131.25 247.55 168.67 102.16
Net Profit After Tax 210.88 762.54 116.27 837.17
Other Comprehensive Income (0.84) (0.34) 39.24 18.17
Total Comprehensive Income 210.04 762.20 155.50 855.34
Earing per equity share (Face Value of ` 5 each)
Basic 1.25 4.54 0.93 5.09
Diluted 1.25 4.54 0.93 5.09

COMPANY'S PERFORMANCE

The Financial Year ("FY") 2019-20 was one of the significant years in theterms of growth and sustainability.

During the FY 2019-20 total consolidated revenue from operations was `35280.90 Lakhsas compared to `50414.61 Lakhs in FY 2018-19 registering a decrease of 30%.

Consolidated profit before tax (PBT) in FY 2019-20 was `284.94 Lakhs as compared to`939.33 Lakhs in FY 2018-19 reflecting a decrease of 70%.

Consolidated profit after tax (PAT) was `155.50 Lakhs as against `855.34 Lakhs in FY2019-20 a decrease of 82 % over the previous year.

Earnings before Interest Depreciation and Taxes (EBIDTA) stood at `1538.17 Lakhs in FY2019-20 as compared to `2152.96 Lakhs in FY 2018-19.

Sales turnover and Margins reduced significantly largely due to fluctuations in the rawmaterial prices presence in a highly competitive industry and initial stage of operationsin

Subsidiary company-Lepakshi Tubes Pvt. Ltd and Step down Subsidiary Company-RSTIndustries Limited-Nigeria.

BUSINESS IMPACT OF COVID-19

Coronavirus 2019 (COVID-19) an infectious disease with leads to acute respiratorysymptoms and can also lead to loss of life was first identified in December 2019. Sincethen the health hazard spread to most parts of the world with the World HealthOrganisation terming it as an ongoing pandemic.

The growing influence of the disease led to nationwide lockdowns across the globewhich in turn severely impacted economic activity.

Following the COVID-19 outbreak in India the government announced the first phase ofthe nationwide lockdown for 21 days from March 25 2020 to contain the spread of theinfection. Accordingly the Company had closed all its manufacturing plants and offices.

While extending the lockdown on May 4 Ministry of Home

Affairs (MHA) issued revised guidelines under which industries/industrialestablishments including continuous process ones and their supply chain components couldoperate in urban and rural areas. Inter-state transport of goods and materials were alsopermitted without any interruption. In keeping with these guidelines the Company has beencontinuing its operations and gradually ramping up the capacity.

While the lockdowns and restrictions imposed on various activities were necessary tocontain the spread it has significantly impacted the business operations at Rama SteelTubes Limited and its subsidiaries. Consequently revenues and profitability have beenadversely affected.

DIVIDEND

The Board does not recommend any dividend for the year under review.

ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

The Company has adopted Indian Accounting Standards

(Ind AS). Accordingly the standalone financial statements of the Company and theconsolidated financial statements of the Company with its subsidiary for the financialyear ended March 31 2020 have been prepared in accordance with Ind AS as prescribedunder section 133 of the Companies Act 2013 (the "Act") read with the relevantrules made there under and other accounting principles generally accepted in

India.

EQUITY SHARE CAPITAL

The issued subscribed and paid-up equity share capital of the Company is `83970000divided into 16794000 Equity shares of `5/- each.

MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year under review is presented ina separate section forming part of this Annual Report.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATES

During the year 2019-20 RST International Trading FZE

Dubai a wholly owned subsidiary of the Rama Steel Tubes Limited ("theCompany") has incorporated "RST Industries Limited" as subsidiary companyin the Federal Republic of

Nigeria. RST International Trading FZE holds 90% shares in RST Industries Limited.Consequently RST Industries Limited has become a step down subsidiary of the Company.

Pursuant to Section 129 of the Companies Act 2013 a statement in prescribed FormAOC-1 relating to subsidiaries and joint venture for the year ended on March 31 2020 hasbeen attached with the consolidated financial statements of the Company for the financialyear ended March 31 2020.

The policy for determining material subsidiaries as approved may be accessed on theCompany's Website:http:// www.ramasteel.

POLICY%20FOR%20DETERMINING%20MATERIAL%20 SUBSIDIARY.pdf

Lepakshi Tubes Private Limited a wholly owned subsidiary of Rama Steel Tubes Limitedis the material subsidiary of the

Company as per Listing regulations.

The provisions of Regulation 24(1) of the Listing Regulations appointment of one ofthe Independent Directors of the

Company on the Board of material subsidiaries are not applicable to Lepakshi TubesPrivate Limited.

The Company is in compliance with Regulation 24A of the Listing Regulations. TheCompany's unlisted material subsidiary Lepakshi Tubes Private Limited undergo SecretarialAudit. Copy of Secretarial Audit Report of is available on the website of the Company. TheSecretarial Audit report of Lepakshi Tubes Private Limited does not contain anyqualification reservation or adverse remark or disclaimer.

SECRETARIAL STANDARDS

The Company has followed applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto ‘Meetings of the Board of Directors' and ‘General Meetings' respectively.

PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.

Accordingly there are no unclaimed or unpaid deposits lying with the Company for theyear under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Bharat Bhushan Sahny was appointed as Non-Executive Independent Director onNovember 18 2014 for a term of 5 years which ends on November 17 2019. Mr. BharatBhushan Sahny has given his consent to continue as Non-executive Independent Director forsecond term of 5 years from November 18 2019 to November 17 2024. Shareholders in 45thAnnual General Meeting held on September 30 2019 have given their consent by SpecialResolution.

Mr. Rajendra Prasad Khanna was appointed as Non-Executive Independent Director onNovember 18 2014 for a term of 5 years which ends on November 17 2019. The Board placeson record its deepest gratitude and appreciation towards valuable contribution made by Mr.Rajendra Prasad Khanna

Mr. Charat Sharma was appointed as Additional Director (Non-executive IndependentDirector) by the Board of Directors of the Company w.e.f. November 17 2019 who holdsoffice up to the ensuing Annual General Meeting. The Board commends his appointment at theensuing Annual General Meeting.

As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Surender Kumar

Sharma Director of the Company will be retiring by rotation at the ensuing AGM andbeing eligible has offered himself for re-appointment.

The details pursuant to Regulation 36(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 relating to appointment and re-appointment ofdirectors at the AGM are provided in the Notice to the members.

Key Managerial Personnel:

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of theCompanies Act 2013 are as follows:

*Mr. Naresh Kumar Bansal Managing Director *Mr. Rajeev Kumar AggarwalChiefFinancialOfficer *Mr. Kapil Datta Company Secretary

DIRECTORS' RESPONSIBILTY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that:

a) that in the preparation of the annual accounts the applicable accounting standardshave been followed and there has been no material departure;

b) that the selected accounting policies were applied consistently. Reasonable andprudent judgments and estimates were made so as to give a true and fair view of the stateof affairs of the Company as at March 31 2020 and of the loss of the Company for the yearended on that date;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act

2013 for safeguarding the assets of the Company and for preventing and detecting fraudand other irregularities;

d) that the annual accounts have been prepared on a going concern basis;

e) the directors had laid down internal financial controls to be followed by theCompany and such internal financial control are adequate and were operating effectively;and

f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and such systems are adequate and were operating effectively.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The current policy is to have an appropriate mix of executive and independent directorsto maintain the independence of the Board and separate its functions of governance andmanagement. As on March 31 2020 the Board consist of 6 members three of whom areexecutive and three are independent directors. The Board periodically evaluates the needfor change in its composition and size.

The policy of the Company on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided under Sub-section (3) of Section 178 of the Companies Act2013 adopted by the Board. We affirm that the remuneration paid to the directors is asper the terms laid out in the nomination and remuneration policy of the Company.

DECLARATION BY INDEPENDENT DIRECTOR(S)

All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149 (6) of the Companies Act 2013so as to qualify themselves to be appointed as Independent Directors under the provisionsof the Companies Act 2013 and the relevant rules.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of corporate governance andadhere to the corporate governance requirements set out by SEBI. The Company has alsoimplemented several best corporate governance practices as prevalent globally. The reporton Corporate Governance as stipulated under the Listing Regulations forms an integral partof this Report. The requisite certificate from the Auditors of the Company confirmingcompliance with the conditions of corporate governance is attached to the report onCorporate Governance.

EXTRACT OF ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act 2013 an extract of annualreturn is given in Annexure -I in the prescribed Form MGT-9 which forms part of thisreport.

NUMBER OF MEETINGS OF THE BOARD

Eight meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport.

CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the

Company during the financial year with related parties were in the ordinary course ofbusiness and on an arm's length basis. During the year the Company had not entered intoany contract / arrangement / transaction with related parties which could be consideredmaterial in accordance with the policy of the Company on materiality of related partytransactions.

Your Directors draw attention of the members to Note 46 to the Standalone financialstatement which sets out related party disclosures. The particulars of contracts andarrangements entered into by the company with related parties referred to in Section 188in Form AOC-2 is attached herewith as Annexure- II.

AUDITORS AND AUDITORS' REPORT

Statutory Auditors

As per provisions of Section 139 of the Companies Act 2013 the Company has appointedM/s Alok Mittal & Associates Chartered Accountants (Firm Registration No. 005717N) asStatutory Auditors for a period of 5 (five) years in the AGM of the Company held on 29thSeptember 2018.

The requirement to place the matter relating to appointment of auditors forratification by Members at every AGM has been done away by the Companies (Amendment) Act2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditor at the ensuing AGM.

The Auditor's Report to the shareholders on the standalone and consolidated financialstatement for the year ended March 31 2020 does not contain any qualificationobservation or adverse comment.

Secretarial Auditors

Pursuant to the provision of Section 204 of the Act read with Rule 9 of the Companies(Appointment and Remunerartion of Managerial Personnel) Rules 2014 the Board of Directorshad appointed M/s Arun Kumar Gupta & Associates (CP No. 5086) Company Secretaries toconduct Secretarial Audit for the financial year ended March 31 2020. The SecretarialAudit Report for the financial year ended March 31 2020 is annexed herewith marked as Annexure- III to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.

Pursuant to Regulation 24(A) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 as amended the Company has obtained annual secretarial compliancereport from M/s Arun Kumar Gupta & Associates (CP No. 5086) Company Secretaries andsame will be submitted to the stock exchange within the prescribed time limits. The

Annual Secretarial Compliance Report does not contain any remarks or observations.

Cost Auditors

Pursuant to the provision of Section 148(3) of the Act the Board of Directors hadappointed M/s. Subodh Kumar & Co.

Cost Accountants for conducting the audit of cost records of the Company for Steelpipe Segment for the financial year ended March 31 2020. The audit is in progress andreport will be filed with the Ministry of Corporate Affairs within the prescribed period.

The cost records as specified by the Central Government under sub-section (1) ofSection 148 of the Act as required by the Company are maintained by the Company.

Details in respect of frauds reported by Auditors other than those which are reportableto the Central

Government

The Statutory Auditors Cost Auditors or Secretarial Auditors of the Company have notreported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Companies Act 2013 including rules made thereunder.

LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments given under Section 186 of theCompanies Act 2013 have been disclosed in the financial statements.

CORPORATE SOCIAL RESPONSIBILITY

We at RAMA aim to create economic value and to actively contribute toward thedevelopment of a sustainable society by taking up projects for the common good throughresponsible business practices and good governance. In line with the requirement ofSection 135 of the Companies Act 2013 your Company having a Corporate SocialResponsibility

Committee. The details of Committee and the terms of reference are provided incorporate governance report. The CSR Policy of the Company is available on its website atthe link: http://ramasteel.com/cms/policy-and-code-of-conduct.

During the year the Company has spent `25.50 Lakhs on CSR activities for the financialyear 2019-20 as annexed herewith Annexure- IV to this Report.

Aforesaid CSR money paid to Konfyans Charitable Public

Trust for purpose of women empowerment and social development.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

Fraud-free and corruption free work culture has been the core of the Company'sfunctioning. In view of the potential risk of fraud and corruption due to rapid growth andgeographical spread of operations the company has put even greater emphasis to addressthe risk.

To meet this objective a Whistle Blower Policy has been laid down. The same policy isapproved by the Board was uploaded on the Company's website (www.ramasteel.com).

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION ANDREDRESSAL) ACT 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted apolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed there under. No complaint has been receivedfor sexual harassment of women at work place by the Company during the financial year2019-20.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual directors pursuant to the provisions of the Companies Act2013 and Corporate Governance requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

PARTICULARS OF EMPLOYEES RELATED DISCLOSURES

a. Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 are given below :

i. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year:

Non-executive directors Ratio to median remuneration
Mr. Bharat Bhushan Sahny N.A.
Mr. Rajendra Prasad Khanna (upto 17.11.2019) N.A.
Mr. Charat Sharma (w.e.f. 17.11.2019) N.A.
Mrs. Anju Gupta N.A.
Executive directors
Mr. Naresh Kumar Bansal 26.00
Mr. Richi Bansal 23.00
Mr. Surender Kumar Sharma 2.00

ii. The percentage increase in remuneration of each director chief executive officerchief financialofficer company secretary in the financial year:

Directors Chief Financial Officer and Company Secretary % increase in remuneration in the financial year
Mr. Bharat Bhushan Sahny N.A.
Mr. Charat Sharma N.A.
Mrs. Anju Gupta N.A.
Mr. Naresh Kumar Bansal 20.00%
Managing Director
Mr. Richi Bansal Executive Director 23.53%
Mr. Rajeev Kumar Agarwal Chief Financial Officer 11.38%
Mr. Kapil Datta Company Secretary 11.21%

b. The percentage increase in median remuneration of employees in the financialyear: NIL

c. The number of permanent employees on the rolls of

Company : 97

d. Variations in the market capitalisation of the

Company price earning ratio as at the closing date of the current financial year andprevious financial year : N.A.

e. Percentage increase over decrease in the market quotations of the shares of theCompany in comparison to the rate at which the Company came out with the last publicoffer: N.A.

f. Average percentile increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was 7.00%.

Increase in the managerial remuneration for the year was 20.73%.

g. The Company affirms that the remuneration is as per remuneration policy of theCompany.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thereis no such employee drawing remuneration in excess of the limits set out in the said rulesand are required to be disclosed.

Disclosures pertaining to remuneration and other details as required under Section197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 enclosed as Annexure V.

CONSERVATION OF ENERGY RESEARCH AND DEVELOPMENT TECHNOLOGY ABSORPTION FOREIGNEXCHANGE EARNINGS AND OUTGO

A) CONSERVATION OF ENERGY :

a) The Company has always been particular to conservation of energy on continuous basisby closely monitoring energy consuming equipment involving use of energy generating dieselset and power purchased from Electricity Board e.g. size of the Equipments is optimum tosave energy. The low-efficient Machinery and Equipments are identified and replaced.

b) Keeping in view the nature of the manufacturing process no additional investment isproposed and hence further consumption of energy is ruled out in the near future.

c) No specific studies regarding impact of the above measures of (a) and (b) have beencarried out and the cost impact of energy cost and energy saving measures on cost ofproduction of goods is not material as it forms a very low percentage vis-a vis the costof Company's product.

d) Total energy consumption and energy consumption per unit of production is given asper Form-A.

B) TECHNOLOGY ABSORPTION ADOPTION AND INNOVATION :

I. RESEARCH AND DEVELOPMENT (R&D)

i. Specific area in which R & D carried out by the Company :

There is no specific area in which the Company has carried the R & D. However theCompany is continuously making efforts for improvements in its production process forbetter productivity and cost efficiency.

ii. Future plan of action

The Company plans to monitor continuously the plant efficiency thus reducing theshortage and reducing the cost of production.

iii. Expenditure on R & D

The company did not incur any Expenditure on R & D.

II. TECHNOLOGICAL ABSORPTION ADAPTATION & INNOVATION :

i. Efforts made towards Technology Absorption:

For the goods manufactured by the Company there is a simple process of ERWmanufacturing technique and the Company has already adopted the same and no innovationshave been carried by the company as there is no other available alternative that wouldensure further cost efficiency.

ii. Particulars relating to imported technology :

The Company has not imported any technology and the plant is working withcompletely Indigenous Technical knowhow.

C) FOREIGN EXCHANGE EARNING AND OUTGO:

( ` In Lacs)

Current year Previous year
a) Total Foreign Exchange Earning 4700.41 1433.65
b) Total Foreign Exchange Outgo 3010.26 16.51

FORM ‘A'

POWER AND FUEL CONSUMPTION

Current Year Previous Year
1. Electricity
(a) Purchased Unit 3666641 4296602
Total amount (in `) 22695286 25221764
Rate/unit 6.19 5.92
(b) Own generation
Through Diesel 114990 129685
Generator Unit
Unit per Litre of 4.78 4.67
Diesel Oil
Total Amount (in `) 1573659 1788622
Cost/Unit 13.69 13.79
2. Furnace Oil 140560 192144
Quantity(litres)
Total Amount (in `) 5964800 7801583
Average Rate `/litre 42.44 40.60

CONSUMPTION PER UNIT OF PRODUCTION

ELECTRICITY FURNACE OIL/GAS
(UNIT) (LITRE/SQ. CUBIC MTR)
NAME OF UNIT CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
PRODUCT
Black Steel Per Ton 60.96 59.16 -- --
Tubes/Pipes
Galvd. Steel Per Ton 59.11 63.16 12.66 10.13
Tubes/Pipes

ACKNOWLEDGEMENT

The Directors acknowledge the contributions made by the employees towards the successand growth of the company. Your Directors also take this opportunity to express sincerethanks to the Government Authorities Financial Institutions and the Bankers for theirco-operation and assistance to the Company. The Directors would also like to acknowledgethe continued support of the Company's shareholders in all its endeavors.

Sd/-
(Naresh Kumar Bansal)
Chairman & Managing Director
Place: New Delhi
Date: June 29 2020

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