To The Members of
RATHI BARS LIMITED
The Board of Directors present the Twenty Seventh Report on business andoperations along with financial statements of the Company for the financial year endedMarch 31 2020.
The Company's financial performance for the year ended 31st March 2020 is summarizedbelow:
| || ||(Rs. In Lakhs) |
|Financial Year Ended ||2019-2020 ||2018-2019 |
|Total Income from Operations ||38300.50 ||40953.24 |
|Profit Before Interest Depreciation and T ax ||1201.60 ||878.14 |
|Less:Interest ||352.27 ||153.82 |
|Less: Depreciation ||572.34 ||451.82 |
|Profit Before Tax ||287.37 ||273.30 |
|Less: Provision for Tax ||15.27 ||85.90 |
|Profit after Tax ||272.09 ||187.38 |
|Balance of Profit brought forward ||4565.48 ||4336.21 |
|Balance available for appropriation ||4817.82 ||4565.48 |
RESULTS OF OPERATIONS:
Global economic activity faced several challenges in the year 2019-20 resulting in aslowdown which was worse than the global financial crisis. Global crude steel productiongrew to 1869.9 MnT in the year 2019 from 1808.4 MnT in the year 2018 largely driven bygrowth in Asia and the Middle East. However steel prices remained under pressure due tocontinued and extensive destocking across global steel markets coupled with a slowdown inoverall consumption. The outbreak of Corona virus (COVID-19) pandemic globally and inIndia impacted the Company's performance in the fourth quarter of FY 2019-20.
The Company has made a profit of Rs. 2 72 09969/- (After Tax) during the year incomparison of Rs. 18738649/- in previous year and is hopeful of maintaining andimproving its positions in the future.
IMPACT OF COVID-19
The country witnessed lockdown being implemented in India in the beginning from 24thMarch 2020. This impacted the business operations of the Company significantly. Since 26thApril 2020 the Company started resuming operations in its manufacturing plants andwarehouses after taking requisite permissions from Government authorities and the safetynorms as prescribed by WHO and the Government.
Detailed information on the same has been included under the Management Discussion& Analysis report forming part of this Annual Report.
Your Directors does 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 2019-2020.
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 2020.
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. Kamlesh Kumar Rathi (Managing Director) Mr.Anurag Rathi (Whole-Time Director cum CFO) Mr. Uddhav Rathi (Non-Executive Director) Mr.Chander Mohan (Non-Executive Director) Ms. Shikha Chakraborty Ashok Kumar Garg BinodKumar Maheshwari and Ms. Sonali V Chitalkar (Independent Directors) of the Company.
b) Pursuant to Section 149 of the Companies Act 2013 Mr. Ashok Kumar Garg Mr. BinodKumar Maheshwari Ms. Sonali V Chitalkar and Ms. Shikha Chakraborty are the IndependentDirectors of the Company.
c) Mr. Manoj Kumar resigned from the position of Director w.e.f 27th July2019.
d) Mr. Rajesh Kumar Sharma who was appointed as an Additional Director w.e.f 27thJuly 2019 was not regularized in the Annual General Meeting held on 30thSeptember 2019.
e) Ms. Sonali Arora resigned from the position of Company Secretary & Complianceofficer w.e.f 25th June 2019 and Mr. Amit Kumar Mangla was appointed asCompany Secretary & Compliance officer w.e.f 27th July 2019.
f) Mr. Chander Mohan was appointed as Additional Director w.e.f 30thJanuary 2020.
g) In accordance with the provisions of Section 152 of the Companies Act 2013 and interms of Company's Articles of Association Mr. Kamlesh Kumar Rathi ManagingDirector of the Company retires by rotation at the forthcoming Annual General Meeting andbeing eligible for re-appointment offers himself for re-appointment as Director. He hasconfirmed that he is not disqualified under Section 164 of the Companies Act 2013 and iseligible to be re-appointed as Director of the Company.
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. Kamlesh Kumar Rathi Mr. Anurag Rathi and Mr. Uddhav Rathi are related to eachother in accordance with Section 2 (77) of the Companies Act 2013 and Rule 4 of theCompanies (Specification of Definitions Details) Rules 2014 but Mr. Chander Mohan(Non-Executive Director) and Mr. Ashok Kumar Garg Mr. Binod Kumar Maheshwari Ms. ShikhaCharkraborty and Ms. Sonali V Chitalkar are the Independent Directors of the Companyhence they are not related to the other Directors of the Company.
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:
|S. No. ||Name ||Designation ||Remuneration paid FY 20192020 (in Lakhs) ||Ratio/Times per Median of employee remuneration ||Percentage Increase/ Decrease in the Remuneration |
|1. ||Kamlesh Kumar Rathi ||Managing Director ||NIL ||NIL ||NIL |
|2. ||Anurag Rathi ||WTD/CFO ||NIL ||NIL ||NIL |
|3. ||Sonali Arora* (Upto 25.06.2019) ||Company Secretary ||0.565 ||NIL ||NIL |
|4. ||Amit Kumar Mangla** (w.e.f 27.07.2019) ||Company Secretary ||2.758 ||NIL ||NIL |
1. The aforesaid details are calculated on the basis of remuneration for the financialyear 2019-20 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. *Percentage increase/decrease in remuneration is not reported as she was appointedwith effect from 24th April 2019
4. ** The remuneration paid to Mr. Amit Kumar Mangla is for part of the year.Accordingly the percentage increase/ decrease in their remuneration and ratio ofremuneration to median remuneration is not reported.
NUMBER OF BOARD MEETINGS HELD DURING THE YEAR UNDER REVIEW:
During the Financial Year 2019-2020 the Company held Ten 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 101435.985 MT Steel Bars (Including tradingpurchase 32939.740 MT) and 18882.475 MT Ingots/Billets (Including trading purchase4147.995 MT) as against production of 94643.430 MT Steel Bars (including trading purchaseof 15485.21 MT) and 58131.270 MT Ingots/Billets (Including trading purchase 1886.470 MT)during the corresponding period of last year.
DECLARATION BY INDEPENDENT DIRECTORS:
Mr. Binod Kumar Maheshwari Mr. Ashok Kumar Garg Ms. Shikha Charkraborty and Ms.Sonali V Chitalkar are the Independent Directors of the Company. The Company has receivednecessary declaration from each Independent Director under Section 149 (7) of theCompanies Act 2013 that they meet the criteria
of independence laid down in Section 149(6) of the Companies Act 2013 and Regulation25 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 2020 is as follows:
|NAME ||DESIGNATION ||CATEGORY |
|Mr. Ashok Kumar Garg ||Chairman ||Independent Director |
|Mr. Binod Kumar Maheshwari ||Member ||Independent Director |
|Mr. Anurag Rathi ||Member ||Whole-Time Director/CFO |
Members of the Company at the 25th AGM of the Company held on 29thSeptember 2018 approved the appointment of M/s Ravindra Jyoti Agarwal & Co.Chartered Accountants Delhi (FRN.:003569C) as Statutory Auditors of the Company for aperiod of five years commencing from the conclusion of 25th AGM held onSeptember 29 2018 until the conclusion of 30th AGM of the Company to be heldin the year 2023.
The Auditors' Report for financial year 2019-2020 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 Gouransh Chawla & Co. Company Secretaries (CP-16972 ACS-45390) CompanySecretaries Noida to undertake the Secretarial Audit of the Company.
SECRETARIAL AUDITORS' REPORT:
The Secretarial Auditors' Report for financial year 2019-2020 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/2019/ 09/RBL MGT-9 2019-20.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:
|S.No. ||Name of Party ||Particulars of Investments ||Nature ||Purpose for which it shall be used ||Amount (in 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 Shares Limited ||Purchase of ||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. ||National Saving Certificate (NSCs) ||Purchase of securities ||Investment ||Revenue generation ||6405.00 |
| || ||TOTAI || || ||4674897.26 |
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 2019-2020.
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 2020. 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.
During the year under review the Company has consumed 4112.57 MT steam coal 1 8293 257 units of Electricity and 17400 litre of Diesel.
B) TECHNOLOGY ABSORPTION:
The Company is using technology which is best available in the Steel Industry (TMT)and always step forward to upgrade the same.
C) FOREIGN EXCHANGE EARNINGS AND OUTGO (IN Rs):
During the year under review:
|Foreign Exchange Earned: ||NIL |
|Foreign Exchange Outgo: ||INR 12 80365 /-(Previous Year INR 29 05 247/-) |
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 2019-2020 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 2020 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 and reporting financial statements. The Internal Auditor of theCompany checks and verifies the internal control and monitors them in accordance withpolicy adopted by the Company.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITIONAND REDRESSAL) ACT. 2013:
The Company has only one female employee in the Company and therefore no separatecommittee has been constituted as required under the Sexual Harassment of Women at theWorkplace (Prevention Prohibition & Redressal) Act 2013. However the Board ofDirectors is very vigilant on the same issue and any complaint is strictly handled by theBoard. The Company did not receive any complaint during the year 2019-2020.
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.