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 2019.
|FINANCIAL RESULTS || || || || |
| || || || ||(Rs. in Lakhs) |
|Particulars ||Standalone ||Consolidated |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||40455.87 ||33981.92 ||50414.61 ||38218.89 |
|Other Income ||326.92 ||389.03 ||264.05 ||461.96 |
|Total Revenue ||40782.79 ||34370.95 ||50678.66 ||38680.86 |
|EBIDTA ||1993.20 ||2450.81 ||2152.96 ||2727.60 |
|Finance Costs ||764.78 ||602.04 ||937.19 ||650.07 |
|Depreciation and Amortisation ||218.33 ||213.06 ||276.44 ||232.81 |
|Expenses || || || || |
|Net Profit Before Tax ||1010.09 ||1635.71 ||939.34 ||1844.72 |
|Tax Expenses ||247.55 ||576.63 ||102.16 ||573.18 |
|Net Profit After Tax ||762.54 ||1059.07 ||837.18 ||1271.54 |
|Other Comprehensive Income ||(0.34) ||0.97 ||18.17 ||1.96 |
|Total Comprehensive Income ||762.20 ||1060.04 ||855.35 ||1273.50 |
|Earing per equity share (Face Value of Rs. 5 each) || || || || |
|Basic ||4.54 ||6.34 ||5.09 ||7.62 |
|Diluted ||4.54 ||6.34 ||5.09 ||7.62 |
The Financial Year ("FY") 2018-19 was one of the significant years in theterms of growth and sustainability.
During the FY 2018-19 total consolidated revenue from operations was Rs. 50414.61Lakhs as compared to Rs. 38218.89 Lakhs in FY 2017-18 registering an increase of 32%.
Consolidated profit before tax (PBT ) in FY 2018-19 was Rs. 939.34 Lakhs as compared toRs. 1844.72 Lakhs in FY 2017-18 reflecting a decrease of 49%.
Consolidated profit after tax (PAT ) was Rs. 855.35 Lakhs as against Rs. 1273.50 Lakhsin FY 2017-18 a decrease of 33% over the previous year.
Earnings before Interest Depreciation and Taxes (EBIDTA) stood at Rs. 2152.96 Lakhs inFY 2018-19 as compared to Rs. 2727.60 Lakhs in FY 2017-18.
Margins reduced significantly largely due to fluctuations in the raw material pricespresence in a highly competitive industry and initial stage of operations in Subsidiarycompany-Lepakshi Tubes Pvt.Ltd.
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 thestandalone financial statements of the Company and the consolidated financial statementsof the Company with its subsidiary for the financial year ended March 31 2019 have beenprepared in accordance with Ind AS as prescribed under section 133 of the Companies Act2013(the "Act") read with the relevant rules made there under and otheraccounting principles generally accepted in India.
EQUITY SHARE CAPITAL
The issued subscribed and paid-up equity share capital of the Company is Rs.83970000 divided into 16794000 Equity shares of Rs. 5/- each.
FULLY CONVERTIBLE WARRANTS
The Company has issued and allotted on preferential basis
1500000 Fully Convertible Warrants at a price of Rs. 122/- each to Persons belongingto Promoter Category on March 29 2017 against which the 25% upfront money was receivedfrom them to the Company on or before 29.03.2017. Out of which 600000 Fully ConvertibleWarrants and 160000 Fully Convertible Warrants were converted into equivalent number ofequity shares on 12.05.2017 and 27.05.2017 respectively on receipt of balance 75% moneyfrom the allottee(s) in respect of said warrants.
As per Regulation 75 of Securities and Exchange Board of India (Issue of Capital andDisclosure Requirements) Regulations 2009 the convertible securities of the issuer shallbe converted within eighteen months from the date of their allotment. By virtue of thisthe remaining 740000 Fully Convertible Warrants must be converted on or before28.09.2018.
The allottee has not made payment of balance 75% of money in respect of 740000 FullyConvertible Warrants on or before 28.09.2018 therefore by virtue of Regulation 75 ofSecurities and Exchange Board of India (Issue of Capital and Disclosure Requirements)Regulations 2009; 740000 fully convertible warrants were cancelled and 25% upfrontmoney of 740000 warrants forfeited.
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
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 2019 hasbeen attached with the consolidated financial statements of the Company for the financialyear ended March 31 2019.
The policy for determining material subsidiaries as approved may be accessed on theCompany's Website:http://www.ramasteel. com/app/webroot/img/uploads/files/93/POLICY%20FOR%20 DETERMINING%20MATERIAL%20SUBSIDIARY.pdf
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. Accordinglythere are no unclaimed or unpaid deposits lying with the Company for the year underreview.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
There was no change in the composition of the Board during the financial year 2018-19.
As per the provisions of the Companies Act 2013 and the Articles of Association of theCompany Mr. Richi Bansal Director of the Company will be retiring by rotation at theensuing AGM and being eligible has offered himself for re-appointment.
The details pursuant to Regulation 36(3) of the SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 relating to appointment and re-appointment of directors atthe 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. Rajkumar Malik Chief Financial Officer (Upto 31 st May 2018)
Mr. Kapil Datta Company Secretary
Mr. st June 2018)
During the year the Board of Directors in their meeting held on 28th May 2018 hasappointed Mr. Rajeev Kumar Aggarwal as Chief
Financial Officer as KMP of the Company in place of Mr. Rajkumar Malik who hasresigned from the post of Chief Financial Officer of the Company w.e.f. 31st May 2018.
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 2019 and of the loss of the Company for the yearended on that date;
c) the directors had taken pr oper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
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 compliancev with the provisionsof all 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 2019 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
Act 2013 adopted by the Board. We affirm that the remuneration paid to the directorsis as per 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
Six meetings of the board were held during the year. For details of the meetings of theboard please refer to the corporate governance report which forms part of this report.
CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of the Company on materiality of related party transactions.
Your Directors draw attention of the members to Note 45 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
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 for rati_cationby Members at every AGM has been done away by the Companies (Amendment) Act 2017 witheffect from May 7 2018. Accordingly no resolution is being proposed for rati_cation ofappointment 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 2019 does not contain any qualificationobservation or adverse comment.
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 2019. The SecretarialAudit Report for the financial year ended March 31 2019 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 and same will be submitted to the stock exchange within theprescribed time limits. The Annual Secretarial Compliance Report does not contain anyremarks or observations.
Pursuant to the provision of Section 148(3) of the Act the Board of Directors hadappointed M/s. S. Shekhar & Co. Cost Accountants for conducting the audit of costrecords of the Company for Steel pipe Segment for the financial year ended March 31 2019.The audit is in progress and report will be filed with the Ministry of Corporate Affairswithin 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 providedin corporate governance report. The CSR Policy of the Company is available on its websiteat the link: http://ramasteel.com/cms/ policy-and-code-of-conduct.
During the year the Company has spent Rs. 23.86 Lakhs on CSR activities for thefinancial year 2018-19 as annexed herewith Annexure- IV to this Report.
Aforesaid CSR money paid to Konfyans Charitable Public Trust for purpose of womenempowerment 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 year2018-19.
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 ||N.A. |
|Mrs. Anju Gupta ||N.A. |
|Executive directors || |
|Mr. Naresh Kumar Bansal ||32.00 |
|Mr. Richi Bansal ||27.00 |
|Mr. Surender Kumar Sharma ||3.00 |
ii. The percentage increase in remuneration of each director chief executive officerchief financial officer company secretary in the financial year:
|Directors Chief Financial ||% increase in remuneration in the financial year |
|Officer and Company Secretary || |
|Mr. Bharat Bhushan Sahny ||N.A. |
|Mr. Rajendra Prasad Khanna ||N.A. |
|Mrs. Anju Gupta ||N.A. |
|Mr. Naresh Kumar Bansal ||9.89% |
|Managing Director || |
|Mr. Richi Bansal Executive ||11.84% |
|Director || |
|Mr. Rajeev Kumar Agarwal ||N.A. |
|Chief Financial Officer || |
|Mr. Kapil Datta Company ||1.69% |
|Secretary || |
b. The percentage increase in median remuneration of employees in the financial year:NIL
c. The number of permanent employees on the rolls of Company : 130
d. Variations in the market capitalisation of the Company price earning ratio as atthe closing date of the current financial year and previous 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 than themanagerial 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 6.5%.
Increase in the managerial remuneration for the year was 10.41%.
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 know-how.
C) FOREIGN EXCHANGE EARNING AND OUTGO :
| || ||(Rs. In Lacs) |
| ||Current year ||Previous year |
|a) Total Foreign ||1433.65 ||4240.37 |
|Exchange Earning || || |
|b) Total Foreign ||16.51 ||38.20 |
|Exchange Outgo || || |
POWER AND FUEL CONSUMPTION
| ||Current Year ||Previous Year |
|1. Electricity || || |
|(a) Purchased Unit ||4296602 ||3866952 |
|Total amount (in Rs.) ||25221764 ||23978501 |
|Rate/unit ||5.92 ||6.20 |
|(b) Own generation || || |
|Through Diesel ||129685 ||66789 |
|Generator Unit || || |
|Unit per Litre of ||4.67 ||4.68 |
|Diesel Oil || || |
|Total Amount (in Rs.) ||1788622 ||977434 |
|Cost/Unit ||13.79 ||14.63 |
|2. Furnace Oil ||192144 ||160721 |
|Quantity(litres) || || |
|Total Amount (in Rs.) ||7801583 ||5497804 |
|Average Rate Rs./litre ||40.60 ||34.21 |
CONSUMPTION PER UNIT OF PRODUCTION
| || ||ELECTRICITY (UNIT) ||FURNACE OIL/GAS (LITRE/SQ. CUBIC MTR) |
|NAME OF PRODUCT ||UNIT ||CURRENT YEAR ||PREVIOUS YEAR ||CURRENT YEAR ||PREVIOUS YEAR |
|Black Steel Tubes/Pipes ||Per Ton ||59.16 ||73.25 ||-- ||-- |
|Galvd. Steel Tubes/Pipes ||Per Ton ||63.16 ||77.65 ||10.13 ||26.60 |
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/- |
|Place: Ghaziabad UP ||(Naresh Kumar Bansal) |
|Date: May 28 2019 ||Chairman & Managing Director |