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Ramco Industries Ltd.

BSE: 532369 Sector: Industrials
NSE: RAMCOIND ISIN Code: INE614A01028
BSE 11:07 | 25 Feb 256.55 2.70
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OPEN 254.50
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VOLUME 2057
52-Week high 272.70
52-Week low 104.00
P/E 23.30
Mkt Cap.(Rs cr) 2,224
Buy Price 256.10
Buy Qty 60.00
Sell Price 256.90
Sell Qty 32.00
OPEN 254.50
CLOSE 253.85
VOLUME 2057
52-Week high 272.70
52-Week low 104.00
P/E 23.30
Mkt Cap.(Rs cr) 2,224
Buy Price 256.10
Buy Qty 60.00
Sell Price 256.90
Sell Qty 32.00

Ramco Industries Ltd. (RAMCOIND) - Director Report

Company director report

Your Directors have pleasure in presenting their 55th AnnualReport and the Audited Accounts of the Company for the year ended 31st March2020.

FINANCIAL RESULTS

For the Year ended For the Year ended
31.03.2020 31.03.2019
Rs in lakhs Rs in lakhs
Separate Separate
Total Revenue 87973 93198
Operating Profit : Profit before Interest Depreciation and Tax (PBIDT) 12665 13770
Less : Interest 1460 1506
Profit before Depreciation and Tax (PBDT) 11195 12264
Less : Depreciation 2577 2461
Add : Exceptional items 506 -
Net Profit/ Loss before Tax (PBT) 9124 9803
Less: Provision for Taxation - Current 1490 1934
- Deferred 874 2060
MAT Credit Entitlement 208 (1510)
Net Profit / Loss after Tax (PAT) 6552 7319
Other Comprehensive Income for the year (Net of Tax) (640) 214
Total Comprehensive Income for the year (TCI) 5912 7533
Movement of Retained earnings
Opening balance of Retained earning 22059 16334
Add: Profit for the year 6552 7319
Less: Dividend paid during the year (867) (433)
Less: Transfer to General Reserve (900) (1100)
Less: Transfer as per Ind AS 116 (92) -
Add : Transfer from FVTOCI Reserve (78) (61)
Closing balance of Retained earnings 26674 22059

SHARE CAPITAL

The paid-up capital of the Company is Rs 86663060/- consisting of86663060 shares of Rs 1/- each . There has been no change in the capital structure ofthe Company during the year under review. The Company does not have any scheme for issueof sweat equity to the employees or Directors of the Company.

DIVIDEND

Your Directors at the Board Meeting held on 03-03-2020 have approvedpayment of Interim Dividend of Rs 0.50/- per share on the Equity Capital of the Company.Your Directors recommend this to be the total dividend for the year.

For the previous year the Company had paid a dividend of Rs 0.50 pershare which amounts to Rs 433.32 lacs. The above recommendation of the dividend by theDirectors is in accordance with the “Dividend Distribution Policy” of thecompany. The Policy is available on the website of the Company under the weblink -http://www.ramcoindltd.com/policies.html

The Dividend Distribution Policy forms part of this report.

TAXATION

An amount of Rs 14.90 crore (P.Y Rs 19.34 crore) towards Current TaxRs 8.74 crore (P.Y Rs 20.60 crore) crore towards Deferred tax and Rs 2.08 crore (P.Y Rs(15.10) crore) towards MAT credit entitlement has been provided for the year under review.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Global Economy

The global economy grew by 2.9% in Calendar Year (CY) 2019 as comparedto 3.6% in CY 2018. Rising trade barriers weak manufacturing activity and a slowdownamong major EMDEs (Emerging Markets and Developing Economies) especially India contributedto the moderation in growth. The EMDEs grew by 3.7% (4.5% in CY 2018) and advancedeconomies by 1.7% (2.2% in CY 2018). Moving into CY 2020 with world faced by anunprecedented crisis COVID-19 pandemic economies of all countries are likely to degrowleading to 4.9% decline in global economy. The impact would be stronger in countriesstruggling to contain the infection rate. Beyond the pandemic global cooperation will beimportant to resolve trade and technology tensions to ensure faster recovery.1

Indian Economy

The Indian economy grew by 4.2% in FY 2019-20 as against 6.1% in FY2018-19. The year started with weakness in financial sector low investment andconsumption confidence and eventually culminated with one of the deadliest pandemics whoseimpact was greater than anticipated.

Industrial and services sector reported slower growth at 0.9% and 5.5%respectively as compared to 4.9% and 7.7% respectively in the previous year. Theautomobile sector continued its contraction while bank credit remained tepid confirmingthe weakness of demand.

A sharp decline in oil prices did benefit the economy however itsimpact was short lived with prices gradually firming up as oil producing countries agreedto cut production. Also with the Government hiking duties and VAT the benefit was notpassed to consumers.

The only silver lining has been the agriculture and allied sector whichgrew by 4% as compared to 2.4% in FY2018-19 led by a 3.7% increase in food grainsproduction. The forecast of a normal monsoon by the India Meteorological Department (IMD)for 2020 sowing season augurs well for agriculture output and farm incomes.

Going into FY 2020-21 the macro economic scenario will continue to bechallenging. With uncertainty about the pandemic and extended lockdown the downside risksto domestic growth remain significant. However positive measures like rollout of stimuluspackage and structural reforms by the Government and proactive liquidity management andeasing of monetary policy by RBI will provide some support. The economic activity isexpected to recover gradually from the second half of the year 2020-21. The IMF expectsthe country's GDP to contract by 4.5% in 2020 and eventually pick up momentum andgrow by 6% in 2021.2

Review of Operations and Current Trends

A. BUILDING PRODUCTS DIVISION:

PRODUCT

PRODUCTION Qty. in M.T.

SALES Qty. in M.T.

TURNOVER 'in Lakhs

31.03.20 31.03.19 31.03.20 31.03.19 31.03.20 31.03.19
Fibre Cement Sheets 566436 599970 544414 607632 54097 60950
Fibre Cement Boards 69468 63275 72770 62511 13774 11714

a) Fibre Cement (FC) Sheets:

During the year under review the Sales quantity of FC Sheets droppedby around 10% compared to previous year; industry level drop was 13% for the year. Themarket remained flat in North low off take in south. New geographical markets for salesare being explored amid stiff competition. Realisation remained flat compared to last yeardue to stiff pricing policies by competitors. Depreciation of Rupee also affected the rawmaterial's cost. Consistent and Judicious usage of raw materials and suppliernegotiations helped to partially mitigate the impact.

Union Government's initiatives on Rural development good monsoonand Prime Minister's Swachh Bharat Abhiyan scheme and Awaz Yojana for providingfinancial support for housing for the poor Better minimum support prices to agriculturecrop by the Government resolving farmers issue firming up of steel and iron prices willbe boost for fibre cement products and reverse the trend. Promotional efforts arevigorously taken to explore new potential areas with more customized products.

Greencor Non-Asbestos roofing sheets have been well accepted in themarket and sales has been in encouraging state.

b) Fibre Cement Boards :

Efforts are taken to increase Production and Sales during the yearunder review. New variants with superior features were well received in the Market. Newvertical created for penetration into plywood counters. Marketing initiatives such asMeets and TV Commercials done to create awareness of the various product range. There hasbeen increase in production compared to last year Sales also have been increased comparedto last year.

Sales of Boards has increased by 16% both in Volume & by 18% inValue terms. 5 New Export markets have been added and Export Sales has been very positiveduring the last financial Year. Further growth is expected in the coming quarters as newmarkets are being added.

Smart Build Operations offering complete solutions in Green DryConstruction to customers was started in September 2017 and turnkey projects with anapproximate value of Rs 7 Crores are under execution which is promising venture andapproximately Rs 15 - 20 Crores of business is expected in the year 2020-2021.

New products like G I Frames and Accessories used in Dry wall Partitionand False Ceiling Sandwich Panels Mineral Fibre Tiles & Shingles are planned to besourced and launched in the RAMCO brand adding to the basket of offerings to thecustomers.

c) Fibre Cement Pressure Pipes:

Operations of Pressure Pipes continued to be under pressure owing tothe sluggish market. The Union Government's infrastructure initiatives are expectedto increase the sale of this product.

B. WIND MILLS:

During the Financial Year 2019-20 the Wind energy was moderate withdecrease of 3% compared to last year from the existing 15 Wind Mills.

Position regarding Wind Mills was as follows: -

Total Capacity Installed : 16.73 MW
Total Units generated : 257 Lakh Units (P.Y: 264 Lakh Units)
Income earned (by generation/sale of power) : Rs 1559 Lakhs (P.Y: Rs 1630 Lakhs)

C. COTTON YARN DIVISION - SRI RAMCO SPINNERS :

Production and Sales :

During the year 2019-20 the Unit had produced 24.49 Lakh Kgs. ofCotton Yarn as compared to 29.42 Lakh Kgs. produced during the previous year. The Unit hadsold Yarn at 30.31 Lakh Kgs. (including traded yarn) during the year under review asagainst 36.18 Lakh Kgs. during 2018-19.

During the year under review the performance of the Cotton yarndivision decreased when compared to previous year. The reduction in yarn selling priceincrease in raw material cost and in operating cost affected the performance of thecompany during the year 2019-20.

With the moderation in cotton prices & stability in yarn pricesyour Directors are hopeful in achieving good results during the year 2020-21.

D. OVERSEAS OPERATIONS OF SUBSIDIARIES - SRI RAMCO LANKA (PRIVATE)LIMITED AND SRI RAMCO ROOFINGS LANKA (PRIVATE) LIMITED SRI LANKA:

There was a drop in volume due to political unrest during last year.

At a Consolidated level of both the Companies the Net Sales were SLR41533 lakhs (INR 16414 lakhs) as against SLR 37099 lakhs (INR 15414 lakhs) during thecorresponding previous year.

In accordance with Rule 5 of Companies (Accounts) Rules 2014 astatement containing the salient features of the Financial Statements of the subsidiariesis attached in Form AOC-1 as Annexure -1 to the Board's Report.

The Company proposes to transfer an amount of Rs 900 lakhs to theGeneral Reserves. An amount of Rs 26674 lakhs is proposed to be retained in the statementof Profit and Loss.

The Company has no material subsidiaries.

CONSOLIDATED FINANCIAL STATEMENTS :

The Company has 6 Associate Companies viz. The Ramco Cements LimitedRajapalayam Mills Limited Ramco Systems Limited Ramco Industrial and Technology ServicesLimited Madurai Trans Carrier Limited and Lynks Logistics Limited.

As per prov'sions of Section 129(3) of the Companies Act 2013 andRegulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015[SEBI(LODR)] Companies are required to prepare Consolidated Financial Statements of itssubsidiaries and Associates to be laid before the Annual General Meeting of the Company.Accordingly the Consolidated financial Statements incorporating the accounts ofSubsidiary Companies and Associate Companies along with Auditors' Report thereonforms part of this Annual Report.

As per Section 136(1) of the Companies Act2013 the financialstatements including consolidated financial statements are available at the Company'swebsite at the following link at http://www.ramcoindltd.com/financial-performance.html

Separate audited accounts in respect of the subsidiary companies arealso made available at the Company's website. The Company shall provide a copy ofseparate audited financial statements in respect of its subsidiary companies to anyshareholder of the Company who asks for it.

The consolidated net profit after tax of the Company amounted to Rs68.93 crores for the year ended 31st March 2020 as compared to Rs 74.51 croresof the previous year.

The Consolidated Total Comprehensive Income for the year under reviewis Rs 165.92 crores as against Rs 175.43 crores of the previous year.

Key Financial Ratios

Pursuant to Schedule V (B) of LODR the Key Financial Ratios for theyear 2019-20 are given below :

SI. No. Particulars

Ratios

Formula adopted

31-03-2020 31-03-2019
1. Debtors turnover ratio (days) 38 37 365 days/(Net Revenue/ Average Trade Receivables)
2. Inventory turnover ratio (days) 125 98 365 days/(Net Revenue/ Average Inventories)
3. Interest coverage ratio 6.90 7.51 (Operating Profit Before Tax+Interest)/ (Interest+ Interest Capitalised)
4. Current ratio 1.18 1.23 Total Current Assets/ Total Current Liabilities
5. Debt-equity ratio 0.30 0.25 Total Debt/Total Equity
6. Operating Profit margin 10% 11% Operating Profit Before Tax/Net Revenue
7. Net Profit margin 8% 8% Net Profit/Net Revenue
8. Return on Networth 10% 14% Total Comprehensive Income + Interest/ Average Networth
9. Total Debt/EBITDA 1.88 1.36 Total Debt/EBITDA
10. Return on Capital Employed 8% 10% Total Comprehensive Income + Interest/ (Average of Equity plus Total Debt)
11. Price Earnings Ratio 15.11 25.23 Market Price per share as at 31st March/ Earning per share

EBITDA denotes Operating Profit Before Tax + Interest + DepreciationDIRECTORS:

Pursuant to Rule 8 (5) (iii) of Companies (Accounts) Rules 2014 it isreported that there have been no changes in the Directors and Key Managerial Personnelduring the year under review.

In accordance with the provisions of the Companies Act 2013 and theCompany's Articles of Association Shri P.R.Venketrama Raja (DIN 00331406) Directorretires at the ensuing Annual General Meeting and being eligible has offered himself forre-appointment.

The Independent Directors hold office for a fixed term of 5 years andare not liable to retire by rotation. Shri V. Santhanaraman and Smt. Justice ChitraVenkataraman (retd.) Independent Directors had been re-appointed for another period of 5years from 1.10.2019 to 30.09.2024 and 24.03.2020 to 23.03.2025 respectively.

The Company has received necessary declarations from all theIndependent Directors of the Company under Section 149(7) of the Companies Act 2013 thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013.

Independent Directors have complied with the code for IndependentDirectors prescribed in Schedule IV to the Act.

The Company had formulated a code of conduct for the Directors andSenior Management Personnel and the same has been complied with.

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 basedupon the recommendation of the Nomination and Remuneration Committee the Board ofDirectors has approved a policy relating to appointment and remuneration of Directors KeyManagerial Personnel and Other Employees.

As per Provision to Section 178(4) the salient features of theNomination and Remuneration Policy should be disclosed in the Board's Report.Accordingly the following disclosures are given:

Salient Features of the Nomination and Remuneration Policy:

The objective of the Policy is to ensure that -

(a) the level and composition of remuneration is reasonable andsufficient to attract retain and motivate directors of the quality required to run thecompany successfully;

(b) relationship of remuneration to performance is clear and meetsappropriate performance benchmarks;

(c) remuneration to directors key managerial personnel and seniormanagement shall be appropriate to the working of the company and its goals and

(d) To carry out any other function as is mandated by the Board fromtime to time and / or enforced by any statutory notification amendment or modificationas may be applicable.

The Nomination and Remuneration Committee and this Policy shall be incompliance with the Companies Act 2013 and LODR. During the year under review there hasbeen no change in the policy.

The web address of the Policy is - http://www.ramcoindltd.com/files/Nomination_and_Remuneration_Policy.pdf

As required under Regulation 25(7) of SEBI (LODR) Regulations theCompany has programmes for Familiarisation for the Independent Directors about the natureof the Industry Business model roles rights and responsibilities of IndependentDirectors and other relevant information. As required under Regulation 46(2)(i) of SEBI(LODR) Regulations the details of the Familiarisation Programme for Independent Directorsare available at the Company's website at the following link athttp://www.ramcoindltd.com/files/ DIRECTORS_FAMILIARISATION_PROGRAMME.pdf

The details of the familiarization programme are explained in theCorporate Governance Report also.

BOARD EVALUATION

Pursuant to Section 134(3)(p) of the Companies Act 2013 andRegulation 25(4) of SEBI (LODR) Regulations Independent Directors have evaluated thequality quantity and timeliness of the flow of information between the Management and theBoard Performance of the Board as a whole and its Members and other required matters.

Pursuant to Schedule II Part D of SEBI (LODR) Regulations theNomination and Remuneration Committee has laid down evaluation criteria for performanceevaluation of Independent Directors which will be based on attendance expertise andcontribution brought in by the Independent Director at the Board and Committee Meetingswhich shall be taken into account at the time of reappointment of Independent Director.

Pursuant to Regulation 17(10) of LODR the Board of Directors haveevaluated the performance of Independent Directors and observed the same to besatisfactory and their deliberations beneficial in Board / Committee meetings.

Pursuant to Regulation 4(2)(f)(ii)(9) of LODR the Board of Directorshave reviewed and observed that the evaluation framework of the Board of Directors wasadequate and effective.

The Board's observations on the evaluations for the year underreview were similar to their observations for the previous year. No specific actions havebeen warranted based on current year observations. The Company would continue tofamiliarise its Directors on the industry technological and statutory developments whichhave a bearing on the Company and the industry so that Directors would be effective indischarging their expected duties.

MEETINGS

During the year five Board meetings were held. In accordance withClause 9 of Secretarial Standard 1 the details of number and dates of Meetings of theBoard and Committees held during the financial year indicating the number of meetingsattended by each Director are given in the Corporate Governance Report.

SECRETARIAL STANDARDS

As required under Clause 9 of Secretarial Standard 1 the Board ofDirectors confirm that the company has complied with both mandatory as well asnon-mandatory Secretarial Standards.

PUBLIC DEPOSITS

The Company had no fixed deposits. The Company has decided not toaccept fresh deposits from 01.04.2014 and to avail the option provided under Section 74 ofthe Companies Act 2013 and repaid all the existing deposits together with the accruedinterest thereon by complying with the formalities required in this regard.

ORDERS PASSED BY THE REGULATORS

Pursuant to Rule 8 (5) (vii) of Companies (Accounts) Rules 2014 it isreported that no significant and material orders have been passed by the Regulators orCourts or Tribunals impacting the going concern status and Company's operations infuture.

INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act 2013 theCompany has Internal Financial Controls Policy by means of Policies and Procedurescommensurate with the size & nature of its operations and pertaining to financialreporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules 2014 it ishereby confirmed that the Internal Financial Controls are adequate with reference to thefinancial statements.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

Pursuant to Section 186(4) of the Companies Act 2013 the details ofLoans Guarantees and Investments along with the purposes are provided under Notes No.0809 40 and 44 of Notes to the separate Financial Statements.

AUDITS

STATUTORY AUDIT

M/s.Ramakrishna Raja And Co. Chartered Accountants (FRN:005333S) andM/s.SRSV & Associates Chartered Accountants (FRN:015041S) who have been appointedas the Statutory Auditors of the company at the 52nd Annual General Meetingwould be the Auditors of the Company till the conclusion of the 57th AnnualGeneral Meeting of the Company to be held in the year 2022.

The report of the Statutory Auditors for the year ended 31stMarch 2020 does not contain any qualification reservation or adverse remark. No fraudhas been reported by the Company's Auditors.

COST AUDIT

As per Rule 3 of Companies (Cost Records and Audit) Rules 2014 thecompany is required to maintain cost records and accordingly such records and accounts aremade and maintained.

The Board of Directors at their meeting held on 19.06.2020 asrecommended by Audit Committee had approved the appointment of M/s N.Sivashankaran &Co Cost Accountants as the Cost Auditors of the Company to audit the Company's CostRecords relating to manufacture of Fibre Cement Products (FCP & CSB) and Cotton Yarnfor the year 2020-21 at a remuneration of Rs 250000 (Rupees Two lakh fifty thousandonly) exclusive of GST and out of pocket expenses. The Board place on record for theservices rendered by M/s.Geeyes & Co. Cost Accountants as Cost Auditors upto thefinancial year 2019-20.

The remuneration of the cost auditor is required to be ratified by themembers in accordance with the provisions of Section 148(3) of the Companies Act 2013 andRule 14 of Companies (Audit and Auditors) Rules 2014. Accordingly the matter relating totheir remuneration had been included in the Notice convening the 55th AnnualGeneral Meeting scheduled to be held on 7th September 2020 for ratificationby the Members.

The Cost Audit Report for the financial year 2018-19 due to be filedwith Ministry of Corporate Affairs by 30.09.2019 had been filed on 03.09.2019. The CostAudit Report for the financial year 2019-20 is due to be filed within 180 days from theclosure of the financial year and will be filed within the stipulated period.

SECRETARIAL AUDIT

M/s S. Krishnamurthy & Co. Company Secretaries has been appointedto conduct the Secretarial Audit of the Company. Pursuant to the provisions of Section 204(1) of the Companies Act 2013 the Secretarial Audit Report submitted by the SecretarialAuditors for the year ended 31st March 2020 is attached as Annexure - 2. Thereport does not contain any qualification reservation or adverse remark.

EXTRACT OF ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act 2013 read withRule 12(1) of Companies (Management and Administration) Rules 2014 an extract of theAnnual Return in Form MGT - 9 for the year ended 31st March 2020 is attachedherewith as Annexure - 3

In accordance with Clause 22 of Secretarial Standard on Report of theBoard of Directors (SS 4) a copy of the Annual Return for the year ended 31stMarch 2019 has been placed on the website of the Company and the web link of such AnnualReturn is - http://www. ramcoindltd.com/files/Investors/AnnualReturns/Annual Return201920.pdf

CORPORATE GOVERNANCE

The Company has complied with the requirements regarding CorporateGovernance as stipulated in LODR. As required under Schedule V (C) of LODR a report onCorporate Governance being followed by the Company is attached as Annexure - 4.

No complaints had been received pertaining to sexual harassment duringthe year under review. The relevant statutory disclosures pertaining to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 areavailable at Point No: 10(l) of Corporate Governance Report.

As required under Schedule V (E) of LODR a Certificate from theStatutory Auditors of the Company confirming the compliance of conditions of CorporateGovernance is attached as Annexure - 5.

As required under Regulation 34(3) read with Schedule V Para C (10)(i)of LODR Certificate from the Secretarial Auditor that none of the Company'sDirectors have been debarred or disqualified from being appointed or continuing asdirectors of Companies is enclosed as Annexure - 5A.

CORPORATE SOCIAL RESPONSIBILITY POLICY:

In terms of Section 135 and Schedule VII of the Companies Act 2013the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committeeand adopted a CSR Policy which is based on the philosophy that “As the Organisationgrows the Society and Community around it also grows.”

The Company has undertaken various projects in the areas of educationhealth rural development water and sanitation promotion and development of traditionalarts protection of national heritage livelihood enhancement projects etc. largely inaccordance with Schedule VII of the Companies Act 2013.

The CSR obligation pursuant to Section 135(5) of the Companies Act2013 for the year 2019-20 is Rs 152.15 lakhs. As against this the Company has spent Rs69.67 lakhs on CSR leaving a shortfall of Rs 82.48 lakhs. The COVID-19 situation that hadarisen in the month of March 2020 had caused a shortfall in the money to be spent on CSRfor the year under review. Further the Company had spent a sum of Rs 101.91 lakhs onother social causes which do not qualify under the classifications listed out in ScheduleVII of the Companies Act 2013.

The Annual Report on CSR activities as prescribed under Companies(Corporate Social Responsibility Policy) Rules 2014 is attached as Annexure - 6.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

In accordance with Section 177(9) and (10) of the Companies Act 2013and Regulation 22 of LODR the Company has established a Vigil mechanism and has a WhistleBlower Policy. The Policy provides the mechanism for the receipt retention and treatmentof complaints and to protect the confidentiality and anonymity of the stakeholders. Thecomplaints can be made in writing to be dropped into the Whistle Blower Drop Boxes orthrough E-Mail to dedicated mail IDs. The Corporate Ombudsman shall have the sole accessto these. The Policy provides to the complainant access to the Chairman of the AuditCommittee. The web link for the Vigil Mechanism is disclosed in the Corporate GovernanceReport.

RISK MANAGEMENT POLICY

Pursuant to Section 134 (3) (n) of the Companies Act 2013 andRegulation 17(9) of LODR the Company has developed and implemented the Risk ManagementPolicy. The policy envisages identification of risk and procedures for assessment andstrategies to mitigate/ minimisation of risk thereof. The Risk Management Policy of theCompany is available at the Company's website at the following weblinkhttp://www.ramcoindltd.com/files/ RISK_MANAGEMENT_POLICY_RIL.pdf

RELATED PARTY TRANSACTIONS

Prior approval / omnibus approval is obtained from the Audit Committeefor all Related Party transactions and the transactions are also periodically placedbefore the Audit Committee for its approval. The particulars of contracts entered into bythe Company during the year as per Form AOC 2 is enclosed as Annexure - 7.

No transaction with the related party is material in nature excepttransaction with Raja Charity Trust which was approved by Shareholders at 51stAnnual General Meeting held on 04.08.2016 in accordance with Company's “RelatedParty Transaction Policy” and Regulation 23 of LODR. In accordance with Ind AS-24the details of transactions with the related parties are set out in the Disclosuresforming part of Financial Statements.

As required under Regulation 46 (2) (g) of LODR the Related PartyTransaction Policy is disclosed in the Company's Website and its weblink is-http://www.ramcoindltd.com/files/RELATED_PARTY_TRANSACTION_POLICY_ RIL.pdf

As required under 46(2)(h) of LODR the Company's MaterialSubsidiary Policy is disclosed in the Company's website and its weblink is -http://www.ramcoindltd.com/files/MATERIAL SUBSIDIARY POLICY 2015.pdf

MATERIAL CHANGES SINCE 1ST APRIL 2020

The outbreak of COVID-19 had an adverse impact with regard toCompany's production and sales during the year 2019-2020. Subsequent to therelaxations announced by the Statutory Authorities in 2020-2021 the company's plantshave started operations. With the expected revival of demand the capacity utilisationlevels are also expected to increase.

There have been no other material changes affecting the financialposition of the company between the end of the financial year and till the date of thisreport.

FUTURE OUTLOOK

Construction activity had been completely halted in April and May 2020and all projects were put on hold lead to collapse of cash flow in the business.Returning of Migrant Labours to home town will create labour scarcity and affect progressof work and completion of projects. All Dealer counters are closed and little demand forgoods from them during April 2020. Government has started relaxing the restrictions.Wherever such relaxations are in economic activities have started resuming.

New construction activity is minimal and is primarily seen in the ruralmarkets. Since we had good monsoons last year the rural markets look more promisingcompared to urban markets. As we are well positioned in the rural markets we expect toreap the benefit of demand growth there. The Union Budget for the year 2020-21 focused onuplifting of the rural economy strengthening of the agriculture sector annual cashincentive for small farmers infrastructure creation and MSME Sector which would augurwell for the industry.

Goods and Services Tax (GST) a single tax to replace the erstwhileCentral and State multi taxes and levies is stabilized and moderated.

Your Company is prepared to meet the demand of the products and istaking initiatives to increase the market especially in Boards business. USD-INRvolatility could be a dampener for the profitable growth.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3) (m) of the Companies Act2013 and Rule 8(3)of Companies (Accounts) Rules 2014 the information relating to Conservation of EnergyTechnology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure -8

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The disclosures in terms of provisions of Section 197(12) of theCompanies Act 2013 read with Rule 5(1) (2) & (3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 relating to remuneration are providedin Annexure - 9.

INDUSTRIAL RELATIONS a PERSONNEL

Industrial relations continue to be cordial and harmonious at all theUnits. Employees at all levels are extending their fullest cooperation for the variouscost reduction measures of the Company. There is a special thrust on Human ResourcesDevelopment with a view to promoting creative and group effort.

CREDIT RATING

The ratings for the Company's borrowing are available in CorporateGovernance Report.

SHARES

The Company's shares are listed in BSE Limited and National StockExchange of India Limited and the Annual Listing Fees have been paid for the F.Y. 2020-21respectively.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Dividend amount remaining unclaimed/unpaid for a period of over 7 yearswas transferred to IEPF as detailed below:

Dividend Details Amount Transferred - ' Date of Transfer to IEPF
Interim Dividend for the year 2011-2012 296115 16-04-2019
Final Dividend for the year 2011-2012 82692 27-08-2019
Interim Dividend for the year 2012-2013 325359 05-03-2020

Shares corresponding to the said dividend were transferred to IEPF asdetailed below:

No. of Shares Date of Transfer to IEPF
61608 Oct./Nov. 2019
6539 March 2020

Year wise amount of unpaid /unclaimed dividend lying in the unpaidaccount and corresponding shares which are liable to be transferred to IEPF and due datesfor such transfer 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 Rs 1/- each Amount of unclaimed / unpaid Dividend as on 31-03-2020
2012-13 Final Dividend 29-07-2013 28-07-2020 26-08-2020 407208 81441.60
2013-14 Dividend 28-07-2014 27-07-2021 25-08-2021 516522 129130.50
2014-15 Dividend 23-09-2015 22-09-2022 20-10-2022 489097 146729.10
2015-16 Dividend 11-03-2016 10-03-2023 08-04-2023 478644 239322.00
2016-17 Dividend 04-08-2017 03-08-2024 01-09-2024 433843 216921.50
2017-18 Dividend 03-08-2018 02-08-2025 31-08-2025 312649 156324.50
2018-19 Dividend 08-08-2019 07-08-2026 06-09-2026 272769 136384.50
2019-20 Interim Dividend 03-03-2020 02-03-2027 01-04-2027 103400 51700

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Directorsconfirm that

a) They had followed the applicable accounting standards along withproper explanation relating to material departures if any in the preparation of theannual accounts for the year ended 31st March 2020;

b) They had selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as on 31stMarch 2020 and of the profit of Company for the year ended on that date;

c) They had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets 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 theCompany and that such financial controls are adequate and were operating effectively; and

f) They had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

RESEARCH AND DEVELOPMENT EFFORTS

During the year the company continued with research and developmentefforts in respect of economical mix and non-conventional fibres in production technologyfor manufacture of fibre cement sheets calcium silicate boards fibre cement boards andnon-asbestos roofing sheets.

ACKNOWLEDGEMENT

The Directors are grateful to the various Departments and agencies ofthe Central and State Governments for their help and co-operation. They are thankful tothe Financial Institutions and Banks for their continued help assistance and guidance.The Directors wish to place on record their appreciation of employees at all levels fortheir commitment and their contribution.

On behalf of the Board of Directors
For RAMCO INDUSTRIES LIMITED
Place : Chennai P.R. VENKETRAMA RAJA
Date : 19th June 2020 CHAIRMAN

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