To The Members of RATHI BARS LIMITED
The Board of Directors present the Twenty Eighth Report on business andoperations along with financial statements of the Company for the financial year endedMarch 31 2021.
The Company's financial performance for the year ended 31st March 2021 is summarizedbelow:
(Rs. In Lakhs)
|Financial Year Ended ||2020-2021 ||2019-2020 |
|Total Income from Operations ||32374.52 ||38300.50 |
|Profit Before Interest Depreciation and Tax ||1221.80 ||1201.60 |
|Less: Interest ||348.98 ||352.27 |
|Less: Depreciation ||569.34 ||572.34 |
|Profit Before Tax ||303.48 ||287.37 |
|Less: Provision for Tax ||72.38 ||15.27 |
|Profit after Tax ||231.10 ||272.09 |
|Balance of Profit brought forward ||4817.82 ||4565.48 |
|Balance available for appropriation ||5073.90 ||4817.82 |
RESULTS OF OPERATIONS:
Due to the Covid19 Pendemic during the period Global economic activity faced severalchallenges in the year 2020-21 resulting in a slowdown which was worse than the globalfinancial crisis. Global crude steel production also went down and due to lack of demandand closure of industries due to pendamic steel prices remained under pressure due tocontinued and extensive destocking across global steel markets also coupled with aslowdown in overall consumption. The outbreak of Corona virus (COVID-19) pandemic globallyand in India impacted the Company's performance in the whole financial year of 2020-21.Despite of all the problems and issues your company has made a profit of Rs. 2 3110009/- (After Tax) during the year in comparison of Rs. 2 72 09969/- in previous yearand is hopeful of maintaining and improving its positions in the future.
IMPACT OF COVID-19:
The financial year 2020-21 was a highly disruptive and challenging year whereinoutbreak of Coronavirus Disease 2019 (COVID-19) had led to an unprecedented health crisisand has disrupted economic activities and global trade. COVID-19 has been declared as apandemic by the World Health Organization and subsequent lock down business shutdownsquarantines and restrictions were imposed by the Central and State Government(s) in Indiathe manufacturing facilities of the Company remained suspended from 25th March 2020 till6th May 2020. In compliance with the necessary instructions/guidelines the Companyresumed partial operations on 7th May 2020 in a phased manner while ensuring health andsafety of all the stakeholders. Further the recent second wave of COVID-19 has resultedin partial lockdown/restriction in various States. This situation resulted in temporarydisturbance in the economic activities through interruption in manufacturing processdisruption in supply chain disruption in domestic and international demand for stainlesssteel etc. for the Company during the financial year ended 31st March 2021.
Detailed information on the same has been included under the Management Discussion& Analysis report forming part of this Annual Report.
Your directors do not recommend any dividend at this stage as the Company requiresploughing back of the profits to the working capital of the Company and expects betterresults in the coming years.
The Authorized Capital of the Company is Rs. 180000000/- (Rupees Eighteen CroreOnly) and the Paid-up Capital of the Company is Rs. 163303570/- (Rupees Sixteen CroreThirty-Three Lakh Three Thousand Five Hundred Seventy only). There is no change in paid upcapital of the Company during the year under review.
MATERIAL CHANGES BETWEEN THE DATE OF THE BOARD REPORT AND END OF FINANCIAL YEAR:
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the Report.
CHANGE IN THE NATURE OF BUSINESS:
There is no change in the nature of the business of the Company during the financialyear 2020-2021. TRANSFER TO RESERVES:
The Board of Directors has decided to retain the entire amount of profit in the profitand loss account. Accordingly the Company has not transferred any amount to the'Reserves' for the year ended March 31 2021.
INVESTOR EDUCTION AND PROTECTION FUND (IEPF):
There is no such amount required to be transferred to the Investor Education andProtection Fund in accordance with the provisions of Section 125 of the Companies Act2013 and Rules made there under.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):
a) The Present Board Constitutes Mr. Anurag Rathi (Managing Director) Mr. Uddhav Rathi(WholeTime Director cum CFO) Mr. Chander Mohan (Non-Executive Director) Ms. ShikhaChakraborty Ms. Sonali V Chitalkar and Mr. Sampat Lal (Independent Directors) of theCompany.
b) Pursuant to Section 149 of the Companies Act 2013 Ms. Sonali V Chitalkar Ms.Shikha Chakraborty and Mr. Sampat Lal are Independent Directors of the Company.
c) Sh. Kamlesh Kumar Rathi (Managing Director) passed away on 28th December 2020after illness.
d) Mr. Ashok Kumar Garg (Independent Director) resigned from the position of Directorw.e.f 21st January 2021 and Mr. Binod Kumar Maheshwari (Independent Director)resigned from the position of Director w.e.f 01st March 2021
e) Mr. Chander Mohan who was appointed as an Additional Director w.e.f 30thJanuary2020 and was regularized in the Annual General Meeting held on 29thSeptember 2020.
f) Mr. Amit Kumar Mangla resigned from the position of Company Secretary &Compliance officer w.e.f 21st May 2020 and Mr. Satinder Singh has beenappointed as Company Secretary & Compliance officer w.e.f 21st January2021.
g) Mr. Sampat Lal was appointed as an Additional Independent Director w.e.f 02ndJune 2021.
h) Pursuant to the provisions of Section 196 197 203 and Schedule V of the CompaniesAct 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules andthe Articles of Association of the Company and recommendation of Nomination andRemuneration Committee Mr. Anurag Rathi has been appointed as Managing Director of theCompany and Mr. Uddhav Rathi as the Whole Time Director and Chief Financial Officer for aperiod of Five years with effect from 21st day of January 2021 subject to theapproval of shareholders.
SUBSIDIARIES IOINT VENTURES AND ASSOCIATE COMPANIES:
The Company has no Subsidiary Joint Venture or Associate Company.
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribed by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as the Board's composition and structureeffectiveness of Board's processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee Members on the basis of the criteria such as the composition of committeeseffectiveness of Committee Meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theindividual Directors on the basis of the criteria such as the contribution of theindividual Director to the Board and Committee Meetings like preparedness on the issues tobe discussed meaningful and constructive contribution and inputs in meetings etc. Inaddition the Chairman was also evaluated on the key aspects of his role.
DISCLOSURE OF RELATIONSHIPS BETWEEN DIRECTORS INTER-SE:
Mr. Anurag Rathi and Mr. Uddhav Rathi are related to each other in accordance withSection 2 (77) of the Companies Act 2013 and Rule 4 of the Companies (Specification ofDefinitions Details) Rules 2014 but Mr. Chander Mohan (Non-Executive Director) and Ms.Shikha Chakraborty Ms. Sonali V Chitalkar and Mr. Sampat Lal are the IndependentDirectors of the Company hence they are not related to the other Directors of theCompany.
NOMINATION & REMUNERATION POLICY:
The Board has on the recommendation of the Nomination & Remuneration Committee(NRC) framed a policy for selection and appointment of Directors Senior Management andtheir remuneration. The Remuneration Policy has been disclosed in the Corporate GovernanceReport.
REMUNERATION OF DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/SENIOR MANAGEMENT:
The remuneration paid to the Directors Key Managerial Personnel and Senior Managementis in accordance with the Nomination and Remuneration Policy formulated in accordance withSection 178 of the Act and Regulation 19 of the Listing Regulations.
The information required under Section 197 of the Act read with Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 in respect of Directors/ employeesof the Company is as follows:
|Name ||Designation ||Remuneration paid FY 20202021 (in Lakhs) ||Ratio/Times per Median of employee remuneration ||Percentage Increase/ Decrease in the Remuneration |
|1. Kamlesh Kumar Rathi (Upto 28.12.2020) ||Managing Director ||NIL ||NIL ||NIL |
|2. Anurag Rathi Upto 20.01.2020 w.e.f 21.01.2021 ||WTD/CFO Managing Director ||Rs 29.15 ||NIL ||NIL |
|3. Uddhav Rathi w.e.f 21.01.2021 ||WTD/ CFO ||NIL ||NIL ||NIL |
|3. Amit Kumar Mangla (Upto 21.05.2020) ||Company Secretary ||NIL (Due to Covid and Lockdown ||NIL ||NIL |
|4. Satinder Singh*(w.e.f 21.01.2021) ||Company Secretary ||1.10 ||NIL ||NIL |
1. The aforesaid details are calculated on the basis of remuneration for the financialyear 2020-21 and include sitting fees paid to Directors during the financial year.
2. The remuneration to Directors is within the overall limits approved by theshareholders of the Company
3. *The remuneration paid to Mr. Satinder Singh is for two months only. Accordinglythe percentage increase/ decrease in their remuneration and ratio of remuneration tomedian remuneration is not reported.
NUMBER OF BOARD MEETINGS HELD DURING THE YEAR UNDER REVIEW:
During the Financial Year 2020-2021 the Company held Six Board meetings of theBoard of Directors as per Section 173 of Companies Act 2013. The provisions of CompaniesAct 2013 were adhered to while considering the time gap between two meetings.
For details of the meetings of the Board please refer to the Corporate GovernanceReport which forms part of this Report.
During the year your Company had produced 76365.504 MT Steel Bars (Including tradingpurchase 25548.495 MT) and 3895.210 MT Ingots/Billets (Including trading purchase 3895.210MT) as against production of 101435.895 MT Steel Bars (including trading purchase of32939.740 MT) and 18882.475 MT Ingots/Billets (Including trading purchase 4147.995 MT)during the corresponding period of last year.
DECLARATION BY INDEPENDENT DIRECTORS:
Ms. Shikha Charkraborty Ms. Sonali V Chitalkar and Mr. Sampat Lal are the IndependentDirectors of the Company. The Company has received necessary declaration from eachIndependent Director under Section 149 (7) of the Companies Act 2013 that they meet thecriteria of independence laid down in Section 149(6) of the Companies Act 2013 andRegulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
CORPORATE SOCIAL RESPONSIBILITY:
The Companies Act 2013 introduced the concept of CSR pursuant to Section 135 while theeligibility criteria doesn't cover your Company however the CSR is an integral part ofthe Company's activities.
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013read with Rule 7 of the Companies (Meetings of the Board and its Powers)Rules 2014 andRegulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and in order to ensure that the activities of the Director(s) and employee(s) areconducted in a fair and transparent manner by adoption of highest standards ofprofessionalism honesty integrity and ethical behavior the Company has adopted a VigilMechanism policy. This policy has been prepared for directors and employees to reporttheir genuine concerns in the interest of the Company and its stakeholders.
AUDIT COMMITTEE AND ITS COMPOSITION:
As per Section 177(2) and Regulation 18 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the composition of Audit Committee as on 31stMarch 2021 is as follows:
|NAME ||DESIGNATION ||CATEGORY |
|Ms. Sonali V Chitalkar ||Chairman ||Independent Director |
|Ms. Shikha Chakraborty ||Member ||Independent Director |
|Mr. Anurag Rathi ||Member ||Managing Director |
M/s. Ravindra Jyoti Agarwal & Co. Chartered Accountants Delhi (FRN.:003569C) havetendered their resignation from the position of Statutory Auditors for the financial year2021-22 onwards due to their pre-occupation resulting into a casual vacancy in the officeof Statutory Auditors of the Company as envisaged by section 139(8) of the Companies Act2013 ("Act"). Casual vacancy caused by the resignation of auditor can be filledby the shareholders in General Meeting within three months from the date of recommendationof the Board of Directors of the Company. To fill the casual vacancy caused by theresignation of M/s. Ravindra Jyoti Agarwal & Co. Chartered Accountants the Board ofDirectors of the Company recommended that M/s. Gupta Jalan & Associates CharteredAccountants (FRN :00372IN) be appointed as the Statutory Auditors of the Company for aperiod of five years commencing from the conclusion of 28th AGM held onSeptember 29 2021 until the conclusion of 33rd AGM of the Company to be heldin the year 2026.
M/s. Gupta Jalan & Associates Chartered Accountants have conveyed their consent tobe appointed as the Statutory Auditors of the Company along with a confirmation thattheir appointment if made by the members would be within the limits prescribed under theCompanies Act 2013.
The Auditors' Report for financial year 2020-2021 does not contain any qualificationreservation or adverse remark and therefore do not call for any further comments. TheAuditors' Report is enclosed with the financial statements in this Annual Report.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and remuneration of Managerial Personnel) Rules 2014 the Company appointedM/s PWR Associates Company Secretaries Delhi to undertake the Secretarial Audit of theCompany.
SECRETARIAL AUDITORS' REPORT:
The Secretarial Auditors' Report for financial year 2020-2021 is annexed herewith as AnnexureA which is self-explanatory and doesn't require comments of the Directors on the same.
Mr. Jagdish Chugh Accounts Manager performs the duties of Internal Auditor of theCompany and his Report is reviewed by The Audit Committee from time to time.
Pursuant to Section 148(2) of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the Company is required to get its costaccounting records audited by a Cost Auditor. The Company has appointed M/s Avnesh Jain& Co. (Cost Accountants) to undertake the Cost Audit of the Company.
EXTRACT OF ANNUAL RETURN:
In compliance with Section 92(3) Section 134 (3) (A) and Rule 12(1) of the Companies(Management and Administration) Rules 2014 the extract of the Annual Return is placed onthe website of the company. The web address is rathisteel.com and web link ishttp://www.rathisteels.com/wp- content/uploads/2021/09/RBL MGT9 21.pdf
PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION 186:
During the year under review the Company has not advanced any loans or givenguarantees or made investments. However the details of investments already made by theCompany are as follow:
|Name of Party ||Particulars of Investments ||Nature ||Purpose for which it shall be used ||Amount fin Rs) |
|1. Hindustan Motors Ltd. ||Purchase of Shares ||Investment ||Revenue generation ||667110.41 |
|2. Jai Prakash Associates Ltd ||Purchase of Shares ||Investment ||Revenue generation ||1274836.89 |
|3. IDBI Limited ||Purchase of Shares ||Investment ||Revenue generation ||175066.21 |
|4. Reliance Industries Ltd ||Purchase of Shares ||Investment ||Revenue generation ||1962633.95 |
|5. Reliance Power Ltd ||Purchase of Shares ||Investment ||Revenue generation ||165082.80 |
|6. Mohan Finance Limited ||Purchase of Shares ||Investment ||Revenue generation ||16779.00 |
|7. Ushita Trading Limited ||Purchase of Shares ||Investment ||Revenue generation ||178965.00 |
|8. Nagesh Investment Limited ||Purchase of Shares ||Investment ||Revenue generation ||112408.00 |
|9. Limitex Investment Limited ||Purchase of Shares ||Investment ||Revenue generation ||43665.00 |
|10. Ecowave Infotech Limited ||Purchase of Shares ||Investment ||Revenue generation ||13974.00 |
|11. Twenty First Century (I) Ltd ||Purchase of Shares ||Investment ||Revenue generation ||39474.00 |
|12. Quest Finance Services Limited ||Purchase of Shares ||Investment ||Revenue generation ||12657.00 |
|13. Jindal Steel& Power Limited ||Purchase of Shares ||Investment ||Revenue generation ||6200.00 |
|14. Gordhan Das Rathi Steels Limited ||Purchase of Shares ||Investment ||Revenue generation ||766289.00 |
|15. National Saving Certificate (NSCs) ||Purchase of securities ||Investment ||Revenue generation ||6405.00 |
| || || ||TOTAL ||5441547 |
During the year your Company maintained harmonious and cordial industrial relations.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the year under review there have been no such significant and material orderspassed by the regulators or courts or tribunals impacting the going concern status andCorporation in future.
STATUS OF LISTING:
The Company's shares are listed at Bombay Stock Exchange Ltd. The Company has paid thelisting fees to the Stock Exchange Mumbai for the year 2020-2021.
Your Company has not invited or accepted any deposits from the Public during the yearand there were no unpaid and unclaimed deposits as on March 31 2021. Hence noinformation is required to be appended to this Report in terms of Non-Banking FinancialCompanies Acceptance of Public Deposits (Reserve Bank of India Directions 1998).
PARTICULARS OF EMPLOYEES:
None of the Employee was drawing remuneration in excess of the limits laid by theCompanies Act 2013 as specified under Rule 5(2) and Rule 5 (3) of Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The manufacturing unit of the Company has continued their efforts to reduce theirenergy consumption year on year. Some of the key measures taken by the Company are asfollows:
Information as required under Section 134(3) (m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 our Director furnish following information asrequired.
A) CONSERVATION OF ENERGY:
The Company is using best technology available for conservation of energy and had takenadequate steps to improve the conservation of energy and this is a continuous process andforms an integral part of responsibilities of departmental heads.
Some of the energy conservation steps taken are as follow:
i) Optimum Capacity utilization.
ii) Optimization of pump and motor operations through standard operating practices.
iii) Strict quality checks on inputs thus saving electricity consumption.
iv) Minimization of handling losses.
v) Total Energy Consumption and Energy Consumption per unit of production is optimum asper industry standards.
B) During the year under review the Company has consumed 4211.830 MT steam coal6169818 units of Electricity and 5400 litre of Diesel.
C) TECHNOLOGY ABSORPTION:
The Company is using technology which is best available in the Steel Industry (TMT)and always step forward to upgrade the same.
D) FOREIGN EXCHANGE EARNINGS AND OUTGO (IN Rs):
During the year under review:
Foreign Exchange Earned: NIL
Foreign Exchange Outgo: NIL (Previous Year INR 12 80365 /-)
A report on Corporate Governance a Certificate from the Statutory Auditors of theCompany M/s. Ravindra Jyoti Agarwal & Co. Chartered Accountants confirming thecompliance with the conditions of Corporate Governance Management Discussion and AnalysisReport and Managing Director's Report are made part of the Annual Report.
RELATED PARTY TRANSACTIONS:
Related party transactions that were entered during the financial year were on an arm'slength basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with the interests of theCompany. Transactions with related parties are exceeding the limits approved by theshareholders however transactions entered by the Company in the normal course of businessare periodically placed before the Audit Committee for its omnibus approval and theparticulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-B.
DIRECTOR'S RESPONSIBILITY STATEMENT:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your directors make the following statement in terms ofSection 134 (5) of the Companies Act 2013:
i) in the preparation of the annual accounts for the Financial Year 2020-2021 theapplicable accounting standards have been followed along with proper explanations relatingto material departures;
ii) the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the State of Affairs of the Company at the end of the financial year 31stMarch 2021 and of the Profit & Loss of the Company for that period;
iii) the Directors had taken proper 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;
iv) the Directors had prepared the annual accounts on a going concern basis;
v) the Directors have laid down Internal Financial Controls to be followed in theCompany and that such Internal Financial Controls are adequate and were operatingeffectively;
vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
BUSINESS RISK MANAGEMENT:
In accordance with the provisions of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board Members were informed about risk assessment andminimization procedures after which the Board formally adopted steps for framingimplementing and monitoring the Risk Management Policy for the Company.
The main objective of this policy is to ensure sustainable business growth withstability and to promote a pro-active approach in reporting evaluating and resolvingrisks associated with the business. In order to achieve the key objective the policyestablishes a structured and disciplined approach to Risk Management in order to guidedecisions on risk related issues.
In today's challenging and competitive environment strategies for mitigating inherentrisks in accomplishing the growth plans of the Company are imperative. The common risksinter alia are: Regulations competition Business risk Technology obsolescenceInvestments retention of talent and expansion of facilities.
Business risk inter-alia further includes financial risk political risk fidelityrisk legal risk etc.
As a matter of policy these risks are assessed and steps as appropriate are taken tomitigate the same. INTERNAL FINANCIAL CONTROL:
The Board has adequate system of internal control to safeguard and protect from lossunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting financial statements. The Internal Auditor of the Company checks and verifiesthe internal control and monitors them in accordance with policy adopted by the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITIONAND REDRESSAL) ACT 2013:
The Company has no female employee in the Company and therefore no separate committeehas been constituted as required under the Sexual Harassment of Women at the Workplace(Prevention Prohibition & Redressal) Act 2013. However the Board of Directors isvery vigilant on the same issue and complaint if any is strictly handled by the Board.The Company did not receive any complaint during the year 2020-2021.
The Board of Directors place on record sincere gratitude and appreciation for all theemployees at all levels for their hard work solidarity cooperation and dedication duringthe year. The Board conveys its appreciation for its customers shareholders suppliers aswell as vendors bankers business associates regulatory and government authorities fortheir continued support.