We are presenting the 37th Annual Report together with the Audited Statementof Accounts of the Company for the financial year ended 31st March 2016.
1. PERFORMANCE OF THE COMPANY
The Highlights of the Performance of the Company during the Financial Year ended 31stMarch 2016 are appended below:( Rs. in Cr.)
|Particulars ||2015-16 ||2014-15 |
|Total Revenue ||6.38 ||4.46 |
|Profit/(Loss) before Interest Depreciation & Tax ||1.87 ||(5.97) |
|Add : Interest ||0.06 ||123.64 |
|: Depreciation ||44.14 ||50.30 |
|Profit / (Loss)Before Tax ||(42.33) ||(179.91) |
|Provision for Tax ||- ||- |
|Profit/(Loss) after Tax carried to Balance Sheet ||(42.33) ||(179.91) |
Highlights of performance during the financial year 2015-16 are:
Total Revenue of the Company is Rs. 6.38 crores as against Rs. 4.46 crores in theprevious year. EBIDTA is Rs. 1.87 crores as against Rs. (5.97) crores in the previousyear.
Profit / (Loss) before taxation is Rs. (42.33) crores as against Rs. (179.91) crores inthe previous year. Profit / (Loss) after Tax is Rs. (42.33) crores as against Rs. (179.91)crores in the previous year.
The company has incurred substantial losses due to non operation of all themanufacturing units and day to day administrative expenses. The company has not debitedinterest on borrowed funds as accounts of the company had turned NPA in the earlier years.This has led to lower losses to the extent of Rs. 602.96 crores. Further as suspension ofmanufacturing activities has taken place in all the manufacturing units no production hastaken place (except generation of power in Wind Mills) there are indications which suggestimpairment in the value of plant and machineries and other fixed assets of the companyfor which the management is in process of getting the study carried out. During the yearended 31.03.2012 the net worth of the company had eroded and the company had become SickIndustrial Company as per the provisions of Sick Industrial Companies (Special Provision)Act 1985 (SICA) and the Company was required to make reference with the Board forIndustrial and Financial Reconstruction (BIFR). Necessary compliances had been made inaccordance with the provision of SICA and reference of the company registered withHonble BIFR as Case No. 67/2012 was intimated vide letter No. 3(R-4)/BC/2012 dated21st November 2012 by the Ld. Registrar of the Board for Industrial & FinancialReconstruction. Subsequently the matter was in AAIFR appeal No. 78 / 2014 dtd. 11.04.2014and AAIFR set aside the impugned order and remand the matter back to BIFR with directionto consider the submission of all the parties and pass order afresh after giving specificfinding through a reasoned order.
In view of the losses incurred during the year under review your Directors do notrecommend any dividend for the current financial year.
Reserve and Surplus
The Net worth of your company has eroded and the company has not transferred any amountto the reserves.
2. MANAGEMENT DISCUSSION AND ANALYSIS
Future of Indian steel industry looks encouraging due to reasonable GDP growth of Indiaas we have a stable government at the Centre.
Major issues that have been affecting adversely the steel industry have beenavailability of Iron Ore & Coal. Iron ore availability has improved due to opening upof iron ore mines and drop in international prices.
International prices of both Coking coal and Steam coal has come down substantiallywhich will help the bottom line of the steel industry.
The company is not expecting good performance during the year 2016-17.Once the revivaland rehabilitation / settlement package of the company is submitted and approved by theappropriate authority/institutions the company has the knowledge ability to get back toits glorious past in time to come.
A. Internal Control Systems
We have always believed in transparency which is an important factor in the successand growth of any organisation. The Company has an adequate system of internal controlsupported by an extensive programme of internal control and systems are established toensure that financial and other records are reliable for preparing financial statements.However due to closer of the plant not much benefits have taken place during the yearunder review.
B. Human Resources
During the year under review employee/industrial relation continued to suffer a setbackdue to suspension of work at its manufacturing units.
C. Cautionary Statement
The Management Discussions and Analysis describe Companys projectionsexpectation or predictions and are forward looking statements within the meaning ofapplicable laws and regulations. Actual results could differ materially from thoseexpressed or implied. Important factors that could make a difference to the companysoperations include economic conditions affecting demand and supply and price conditions indomestic and international market changes in Government regulations tax regimeseconomic developments and other related and incidental factors.
3. PARTICULARS FOR EMPLOYEES U/S 197 OF COMPANIES ACT 2013 READ WITH RULE 5 OFTHE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONANNEL) RULES 2014
During the year under review no employees of your company were in receipt ofremuneration in excess of the limits prescribed under the above section.
4. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Company has in place and established control system designed to ensure properrecording of financial and operational information and other regulatory and statutorycompliance commensurate with size and scale of its operation. The Company has also asystem for safeguarding of its assets the prevention and detection of frauds and errorsthe accuracy and maintenance of accounting records and the timely preparation of reliablefinancial statement.
The Company has its Audit committee which evaluates the internal financial controlsystem periodically. The observation and comments of the Audit committee are placed beforethe Board.
5. PUBLIC DEPOSIT
The Company has not accepted any deposit within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014.
6. PARTICULARS OF LOANS GURANTEES OR INVESTMENTS:
The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013. The details of the investments made by the companyare given in the notes to the financial statements.
There was no change in the directorships of the company during the year
The Board has not adopted any remuneration policy due to non constitution of nominationand remuneration committee. However none of the Directors have drawn any salary duringyear in review and no fresh Key Managerial Personnel has been appointed. Further since themanufacturing plants of the company are under suspension with hardly any activity in thecompany there no other KMPs too.
Details of the various meetings held during the financial year 2015-16 have been givenin the Corporate
Governance Report. During the year under review 4(four) Board meetings were held on30/05/2015 08/08/2015 09/11/2015 and 29/01/2016.
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Pradip Kumar Das retires by rotation and being eligible offers himself forre-appointment.
The Company doesnt have Independent Directors thus requirement of Clause 17(1)of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 was notcomplied.
The total strength of your Board of Directors as on 31st March 2016 is Three membersconsisting of one Managing Director and two executive directors leading to non-complianceof the clause which requires that at least 50% of the Board should comprise ofNon-executive directors and 50% of the Board should also comprise of Independent Directorif Chairman is executive director. However the Company had been registered with BIFR andsubsequently the matter had been referred to AAIFR and AAIFR set aside the impugned orderand remand the matter back to BIFR with direction to consider the submission of all theparties and pass order afresh after giving specific finding through a reasoned order. Dueto the above situation company is facing difficulty in inducting Independent Directors onthe Board. For the same reason Company has not been able to appoint a Woman Director.
8. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (5) of the Companies Act 2013 theDirectors confirm:
(i) That in preparation of the accounts for the financial year ended 31st March 2016the applicable accounting standards have been followed along with proper explanationrelating to material departures; (ii) That the Directors have selected such accountingpolicies and applied them consistently and made judgment and estimates that werereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit or loss of the Company for theyear under review; (iii) That the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities; (iv) That the Directors have prepared theaccounts for the financial year ended 31st March 2016 on a going concernbasis.
(v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) The directors had devised proper system to ensure compliance with the provisionsof all applicable laws and that such system were adequate and operating effectively.
9. CORPORATE GOVERNANCE
Your Company recognizes the importance of good Corporate Governance in buildingstakeholders confidence improving investor protection and enhancing long-termenterprise value. A report on Corporate Governance is annexed.
M/s P.K. Lilha & Co. Chartered Accountants have communicated theirwillingness to act as the statutory auditors of the Company subject to necessary approvalat the forthcoming Annual General Meeting under Section 139 and 140 of the Companies Act2013 and the Board recommended their appointment for the period 2016-2017.
The observations / qualifications made by the Statutory Auditors in their report forthe year under review are self-explanatory and the modified opinion is given in "AnnexureB".
Pursuant to provisions of section 204 of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the companyhas appointed M/s. D. Raut & Associates a Company Secretary in Practice to undertakethe Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "AnnexureC".
Reply to the observation of the Secretarial Audit Report is annexed as"Annexure D".
11. MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY
There were no material changes affecting the financial position of the companyoccurring between the date of Financial Statements and the Board Report.
However Punjab National Bank has declared the company as a wilful defaulter withoutgiving proper hearing to the company and for incorrect reasons. The matter has been takenup with the Bank to withdraw the same.
12. RELATED PARTY TRANSACTIONS :
There were no related party transactions made by the Company with its PromotersDirectors or Management their subsidiaries or relatives etc. that may have potentialconflict with the interests of the Company at large.
During the year loan payable by the Company to related party has increased / decreasedwith overall increase in the payable. Above loan is free of interest.
The details have been disclosed in the Notes to the Accounts.
13. SUBSIDIARIES JOINT VENTURES OR ASSOCIATE COMPANIES: NIL 14. PREVENTION OFSEXUAL HARASSMENT AT WORKPLACE :
The Company believes in women empowerment and always encourage the recruitment of womenat its workplace to the extent possible. The Company has zero tolerance against sexualharassment towards women at workplace. The women employees are always encouraged and havebeen advised to report any such harassment to the Board directly. The Company has a systemfor prevention prohibition and redressal of sexual harassment at workplace in line withprovisions of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. During the FY 2015-16 the Company has received no complaints ofsexual harassment.
15. ENERGY TECHNOLOGY AND FOREIGN EXCHANGE EARNING AND OUTGO:- A. Conservation ofEnergy:
All plants are shut down but in the past following energy conservation measures weretaken:
i) Periodic checking and supervision of the Electrical Distribution Network andcorrective and proactive measures helped to maximize energy usage ensuring as effectiveand efficient system of energy distribution.
ii) Reuse of waste oil in furnaces.
iii) Regular monitoring of leakages of compressed air and fuel oil to save fuel.
iv) Controlling of idle running of equipment during stoppages to save energy.
v) Applying right voltage to the systems through transformers with automatic voltageregulator.
vi) Reduction in steam lower power consumption during peak hour rate.
vii) The companys technical cell continued to implement and find ways to conserveenergy avoiding any unnecessary operation and wasteful practice.
viii) Shutting down all electrical equipments and other appliances when not in use toavoid wastage of energy.
ix) Installing soft starters at all electrical control panels to reduce powerconsumption.
B. Technology Absorption:
All plants are shut down but in the past following technology absorption measures weretaken:
Research & Development - There had been ongoing efforts to improveproductivity levels and quality standards but no specific research and development wasrequired.
Technology absorption Adaptation & Innovation - Indigenous development oftechnology had taken place continuously.
Particulars of technologies imported during last 5 years - Not applicable.
C. Foreign Exchange
Foreign exchange earnings and outgo were NIL during the year.
16. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The Companies (Corporate Social Responsibility Policy) Rule 2014 is not applicable tothe Company. However your Company respects society value and makes endeavor to contributefor the societal cause as far as possible.
All the manufacturing units of the company are closed but necessary equipments havebeen installed in the manufacturing units in order to comply with all regulatory measuresso that no harm is caused to the society and nature at large. Though the Companysoperations are not inherently polluting in nature the Company continues to take adequateprecautions to comply with all regulatory measures in this regard at all the educationalpremises and sites so that no harm would cause to the society and the nature at a large.
18. RATIO OF DIRECTOR REMUNERATION TO MEDIAN OF EMPLOYEES
The directors of the Company are not drawing any salary so the point of calculation ofratio is not applicable. However the median remuneration of the employees of the companyduring the financial year was Rs. 1.34 lacs.
19. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company being a sick company and thus the requirement of vigil mechanism is notfulfilled by the company. This policy is formulated to provide opportunity to all theemployees to access in good faith to the Audit Committee of the Company in case theyobserve any unethical and improper practice or behaviour or wrongful conduct in theCompany and to prohibit managerial personnel from taking adverse personnel action againstsuch employee.
20. DECLARATION ON COMPLIANCE WITH CODE OF CONDUCTS
The Board has formulated a Code of Conducts for the Board Members and Senior Managementof the Company which has been posted on the website of the Company.
It is hereby affirmed that all the Directors and Senior Management Personnel havecomplied with the Code and a confirmation to that effect has been obtained from theDirectors and the Senior Management.
21. PREVENTION OF INSIDER TRADING
The Code requires pre-clearance for dealing in the Companys shares and prohibitsthe purchase or sale of Companys shares by the Directors and the designatedemployees while in possession of unpublished price sensitive information in relation tothe Company and during the period when the Trading Window is closed. The Board isresponsible for implementation of the Code.
All Directors and the designated employees who hold any shares in the Company haveconfirmed compliance with the Code.
22. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure A".
23. CEO CERTIFICATION
The Managing Director of the Company have submitted a certificate to the Board asrequired under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015for the year ended 31st March 2016.
24. COMPLIANCE CERTIFICATE
A Certificate from the Statutory Auditors of the Company regarding compliance ofconditions of Corporate Governance as stipulated under Clause 17(8) of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 is attached to this Report.
Your Directors would like to express their sincere appreciation of the co-operation andassistance received from shareholders customers vendors bankers and other businessconstituents for their support during the year under review. Your Directors also wish toplace on records their deep sense of appreciation for the commitment displayed by allemployees during the year.
| ||On behalf of the Board of Directors |
| ||For RAMSARUP INDUSTRIES LTD. |
| ||Aashish Jhunjhunwala |
|Kolkata ||Managing Director |
|Dated : 03.05.2016 ||DIN : 00351451 |