Your Directors are pleased to present the 36th Annual Reportof your company along with the Audited Financial Statements of the Company for the yearended 31st March 2020.
1. FINANCIAL RESULTS AT A GLANCE
(' in Crores)
|Particulars || |
|2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations ||2583.14 ||2754.90 ||2583.14 ||2754.90 |
|Other Income ||61.84 ||41.23 ||61.84 ||41.23 |
|Total Income ||2644.98 ||2796.13 ||2644.98 ||2796.13 |
|Profit before Tax ||406.30 ||370.56 ||406.37 ||370.54 |
|Less: Income tax expenses ||98.80 ||117.63 ||98.82 ||117.63 |
|Profit After Tax ||307.50 ||252.93 ||307.55 ||252.91 |
2. OPERATIONAL REVIEW/STATE OF THE COMPANY'SAFFAIRS
During the year under review the Company has achieved turnover of Rs2583.14 Crores compared to the previous of Rs 2754.90 Crores. The total income onStandalone and Consolidated basis for the F.Y. 2019-20 at Rs 2644.98 Crores has beenlower by 5.40% compared to the total income of the previous year while the profit aftertax on standalone basis for the year was higer by 21.57% at Rs 307.50 Crores compared tothe previous year and profit after tax on consolidated basis for the year is Rs 307.55Crores which is also higher by 21.60% compared to the previous year.
There are no material changes or commitments affecting the financialposition of the Company which have occurred between the end of the financial year and thedate of this Report.
3. IMPACT OF COVID-19 PANDEMIC:
Due to outbreak of COVID-19 Pandemic globally and in India theCompany's management has made initial assessment of likely adverse impact on businessand financial risks. The saving of lives and protecting livelihood both are of utmostimportance to us. Ratnamani is continuously monitoring all aspects of the Covid-19situation evaluating all new developments and taking measures to protect our employees.The health and safety of our employees are always our highest priority in theorganisation.
We have taken several steps aimed at ensuring the safety of ouremployees which include work from home social distancing in the office premisessanitization of our office premises; plant locations and company vehicles thermalscreening for employees in the office premises working at plants providing sanitizersmasks gloves etc. to the employees.
Meanwhile we are also finding new ways of managing the business andhave been working of changes in the business operating model including the possibilitiesof using digital technology. Our focus on research and innovations remains intact and wepromise to live by our slogan of "Prosperity through performance".
The Company has also donated Rs 1.00 Crore to Chief Minister'sRelief Fund to fight the COVID-19 Pandemic and its fallout on poor sections of thesociety.
The Directors are pleased to inform you that the Board of Directors on5th March 2020 declared an interim dividend of Rs 12.00 per Equity Sharehaving face value of Rs 2.00 each (i.e. 600% on the paid-up share capital) for thefinancial year ended on 31 st March 2020. The total dividend pay out was Rs67.60 Crores for the F.Y. 201920 comprising dividend amount of Rs 56.07 Crores andDividend Distribution Tax amount of Rs 11.53 Crores. The Board has not recommended anyfurther dividend to the shareholders of the Company. Hence Interim Dividend declared bythe Board shall be treated as Final Dividend.
The Dividend Distribution Policy of the Company is available at the weblink https://www.ratnamani.com/ investorsrelations.html.
5. TRANSFER TO RESERVES
Your company does not propose to transfer any amount to any reserves ofthe Company for the year under review.
6. SHARE CAPITAL
The paid up Equity Share Capital of the Company as on 31st March 2020was Rs 934.56 Lakhs divided into 46728000 Equity Shares of Rs 2.00 each.
There was no change in the share capital of the Company during theyear.
The Company has long-term borrowings outstanding amounting to Rs17562.51 Lakhs as on 31st March 2020.
8. FIXED DEPOSITS
During the year under review your Company has not accepted any depositfrom the shareholders and public within the meaning of Sections 73 and 74 of the CompaniesAct 2013 read together with the Companies (Acceptance of Deposits) Rules 2014 (includingany statutory modification(s) or re-enactment(s) thereof for the time being in force).
9. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTSUNDER SECTION 186
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
10. DIRECTORS AND KEY MANAGERIAL PERSONNEL A)Directors
In accordance with the provisions of the Companies Act 2013 and theArticles of Association of the Company Shri Shanti M. Sanghvi Whole Time Director of theCompany will retire by rotation at the ensuing Annual General Meeting and being eligibleoffers himself for re-appointment.
The Company has also received declarations from all the IndependentDirectors of the Company confirming that they meet the criteria of independence as perSection 149(6) of the Companies Act 2013 and Regulation 16 of SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015.
In terms of regulation 25(8) of the Listing Regulations theIndependent Directors have confirmed that they are not aware of any circumstance orsituation which exists or may be reasonably anticipated that could impact or impair theirability to discharge their duties. Based on the declarations received from the IDs the
Board has confirmed that they meet the criteria of independence asmentioned under regulation 16(1)(b) of the Listing Regulations and that they areindependent of the management.
All the Directors of the Company have registered themselves with theIndian Institute of Corporate Affairs ("IICA"). Further Smt. Nidhi G. GadhechaIndependent Director had passed online proficiency test as per the requirement of the Rule6(4) of the MCA Notification dated October 22 2019.
a) Performance Evaluation of Directors
Pursuant to the provisions of the Companies Act 2013 and Regulation17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 theBoard has carried out annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. The way theevaluation has been carried out has been explained in the Corporate Governance Report.
b) Remuneration Policy
The Board has framed a policy for selection and appointment ofDirectors Senior Management and their remuneration as recommended by the Nomination &Remuneration Committee. The Remuneration Policy is incorporated in the CorporateGovernance Report.
c) The details of programmes for familiarisation of IndependentDirectors with the Company their roles rights responsibilities in the Company natureof the industry in which the Company operates business model of the Company and relatedmatters are put up on the website of the Company at the web link: http://www.ratnamani.com/investors_relations.html
B) Key Managerial Personnel
During the year there was no change amongst the Key ManagerialPersonnel. The following persons are the Key Managerial Personnel of the Company pursuantto Section 2(51) and Section 203 of the Companies Act 2013 read with the Rules framedthereunder.
1. Shri Prakash M. Sanghvi Managing Director
2. Shri Jayanti M. Sanghvi Joint Managing Director
3. Shri Shanti M. Sanghvi Whole Time Director
4. Shri Vimal Katta Chief Financial Officer
5. Shri Jigar Shah Company Secretary & Compliance officer
11. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act2013 the Board of Directors hereby states and confirms that:
a. in the preparation of the annual accounts the applicable accountingstandards had been followed along with proper explanations relating to materialdepartures.
b. the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31stMarch 2020 and of the profits of the Company for the financial year ended on 31stMarch 2020.
c. the Directors had 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.
d. the Directors had prepared the Annual Accounts on a goingconcern' basis.
e. the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
f. the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
12. BOARD MEETINGS
The Board of Directors met 6 (Six) times during the F.Y. 2019-20 andhaving gap of not more than 120 days between 2 Board Meetings. The details of the boardmeetings and the attendance of the Directors are provided in the Corporate GovernanceReport forming part of this Report.
13. AUDIT COMMITTEE
As provided in Section 177(8) of the Companies Act 2013 theinformation about Audit Committee and its details is given in the Corporate GovernanceReport. The Board has accepted the recommendations of the Audit Committee. Presently ShriDivyabhash C. Anjaria is the Chairman of the Committee and Dr. Vinodkumar M. Agrawal ShriJayanti M. Sanghvi and Smt. Nidhi G. Gadhecha are the members of the Committee.
14. STATUTORY AUDITORS
Pursuant to the provisions of Section 139 of the Companies Act 2013read with rules made thereunder M/s. S R B C & Co. LLP Chartered Accountants (ICAIFirm Registration No. 324982E/E300003) hold office as the Joint Statutory Auditors of theCompany till the conclusion of the 37th Annual General Meeting to be held inthe calendar year 2021 and M/s. Kantilal Patel & Co. Chartered Accountants (ICAIFirm Registration No. 104744W) as the Joint Statutory Auditors of the Company till theconclusion of the 39th Annual General Meeting to be held in the calendar year2023.
The Statutory Auditors of the Company have not reported any fraud asspecified under the second proviso of Section 143(12) of the Companies Act 2013(including any statutory modification(s) or re-enactment(s) for the time being in force).
The Notes on financial statement referred to in the Auditors'Report are self-explanatory and do not call for any further comments. The Auditors'Report does not contain any qualification reservation or adverse remark.
15. COST AUDITORS
Your company has received consent from M/s. N. D. Birla & Co. CostAccountants to act as the Cost Auditors for conducting audit of the cost records for thefinancial year 2020-21 along with a certificate confirming their independence andarm's length relationship.
Your Directors have on the recommendation of the Audit Committeeappointed M/s. N. D. Birla & Co. Cost Accountants as the Cost Auditors of theCompany to audit the Cost Accounts for the financial year 2020-21 at a remuneration of Rs120000/- plus taxes as applicable and out of pocket expenses subject to ratification ofthe said remuneration by the Members in ensuing 36th Annual General Meeting.Accordingly a resolution seeking Members' ratification for the remuneration payableto M/s. N. D. Birla & Co. Cost Accountants is included at Item No. 4 of the Noticeconvening the 36th Annual General Meeting. The Cost Auditors' Report forthe financial year 2019-20 does not contain any qualification reservation or adverseremark.
16. SECRETARIAL AUDITOR
In terms of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorshas appointed M/s. M. C. Gupta & Co. Company Secretaries in practice as theSecretarial Auditor of the Company to conduct an audit of the secretarial records for thefinancial year 2020-21. Your company has received consent from M/s. M. C. Gupta & Co.Company Secretaries in practice to act as the Secretarial Auditor for conducting audit ofthe secretarial records for the financial year ending 31st March 2021.
17. SECRETARIAL STANDARDS:
The Company is in compliance with Secretarial Standards on Meetings ofBoard of Directors and General Meetings issued by the Institute of Company Secretaries ofIndia.
18. CREDIT RATING
The Company enjoys a good reputation for its sound financial managementand its ability to meet financial obligations. CRISIL has reaffirmed "AA/stable"rating for the Company's long-term borrowings and A1+" for its short-termborrowings.
19. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The Internal Audit function is handled by anexternal firm of Chartered Accountants. The Internal Control Systems are regularly beingreviewed by the Company's Internal Auditors with a view to evaluate the efficacy andadequacy of Internal Control Systems in the Company its compliance with operatingsystems accounting procedures and policies at all locations of the Company and to ensurethat these are working properly and wherever required are modified/ tighten to meet thechanged business requirements.
All the Business Heads/Function Heads are certifying the compliance toall applicable rules regulations and laws every quarter to the Board and are responsibleto ensure
that internal controls over all the key business processes areoperative. The scope of the Internal Audit is defined and reviewed every year by the AuditCommittee and inputs wherever required are taken from the Statutory Auditors. Based onthe report of Internal Auditors major audit observations and corrective actions thereonare presented to the Audit Committee of the Board.
20. PARTICULARS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of energy and technology absorption
Information required under Section 134(3)(m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 as amended from time totime is given in Annexure-A" forming part of this report.
The Company has commissioned windmills at various places for"Green Energy Generation" thus continuing to contribute in a small waytowards a greener and cleaner earth.
21. RISK MANAGEMENT
Your company has an elaborate Risk Management procedure coveringBusiness Risk Operational Controls Assessment and Policy Compliance processes. Majorrisks identified by the businesses and functions are systematically addressed throughmitigating actions on a continuous basis within the risk appetite as approved from time totime by the Board of Directors. Your company has already set up a Risk ManagementCommittee in accordance with the requirements of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The key risks and mitigating actions are also placedbefore the Audit Committee and the Board of Directors of the Company.
As on the date of this report the Company does not foresee anycritical risk which threatens its existence.
The details of foreign exchange earnings and outgo as required underSection 134 and Rule 8(3) of Companies (Accounts) Rules 2014 are mentioned inAnnexure-A".
22. SUBSIDIARY IT'SPERFORMANCEAND CONSOLIDATED FINANCIAL STATEMENT
The Company has one Wholly Owned Subsidiary in the State of Texas USAin the name "Ratnamani Inc." During the year under review the performance ofthe subsidiary was not so good it was declined due to lower
crude prices and lower demand from Oil & Gas sector. As aconsequence the subsidiary recorded a profit of US $ 6816.31 (equivalent to Rs 4.72Lakhs) for the year ended on 31st March 2020 (previous year a loss of US $1890.62 (equivalent to Rs 1.31 Lakhs). A report on the performance and financial positionof the subsidiary is given in Annexure-"B". Your Directors have pleasure inattaching the Consolidated Financial Statements pursuant to Regulation 33 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 which have been prepared inaccordance with the applicable provisions of the Companies Act 2013 and Indian AccountingStandards ("Ind AS") for financial year ended 31st March 2020 andapproved by the Board. These Consolidated Financial Statements have been prepared on thebasis of the Audited Financial Statements of the Company and its Subsidiary Company asapproved by their respective Board of Directors.
The Financial Statements as stated above are also available on thewebsite of the Company and the same can be accessed at the web link: http://www.ratnamani.com/investors_relations.html
23. CORPORATE GOVERNANCE REPORT
Your company is committed to good Corporate Governance and has takenadequate steps to ensure that the requirements of Corporate Governance as laid down inRegulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015are complied with. The details are given in Annexure-"C".
The Board has framed Code of Conduct for all Board members and SeniorManagement of the Company and they have affirmed the compliance during the year underreview.
The Board has received CEO/CFO Certification under Regulation 17(8) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
As per SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 the Corporate Governance Report and the Secretarial Auditor'sCertificate regarding compliance of conditions of Corporate Governance are attached andforms part of the Annual Report.
24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Management Discussion and Analysis Report is set out in a separatesection included in this Annual Report and forms part of this Report.
25. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The CSR Policy may be accessed on the Company's website at the weblink: http://www. ratnamani.com/ investors_relations.html
The key philosophy of all CSR initiatives of the Company is guided bythe Company's philosophy of giving back to the society as a responsible corporatecitizen.
The Company has identified the following as focus areas of engagement:
|a. Education ||: Access to quality education training and skill enhancement. |
|b. Environment ||: Environmental sustainability ecological balance conservation of natural resources. |
|c. Rural |
|: Provision of drinking water sewage facilities sanitation Facilities and roads |
|d. Health ||: Affordable solutions for healthcare through improved access and awareness. |
e. The Company would also like to undertake need- based initiatives infuture.
During the year the Company has spent Rs 488.34 Lakhs on CSRactivities. The detail of CSR activities and expenses are given in Annexure-D".
25. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form No. MGT-9 of the Company for theFinancial Year ended on 31st March 2020 is annexed herewith as Annexure-E" to this Report.
26. PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 disclosures pertaining to remuneration and other details areprovided in Annexure - F" to this Report.
27. SECRETARIAL AUDIT REPORT
The Secretarial Audit Report for the financial year ended 31stMarch 2020 is annexed with the Directors' Report and forms part of the Annual Reportas given in Annexure-G". Further the Secretarial Audit Report does not containany qualification reservation adverse remark or disclaimer.
28. BUSINESS RESPONSIBILITY REPORT
Regulation 34(2)(f) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 mandates inclusion of the Business Responsibility Report("BRR") as a part of the Annual Report for top 500 listed entities based onmarket capitalisation. In compliance with this regulation the Business ResponsibilityReport provides a detailed overview of initiatives taken by your Company fromenvironmental social and governance perspectives. The same is out in a separate sectionincluded in this Annual Report and forms part of this Report.
A. Vigil Mechanism
The Vigil Mechanism of the Company which also incorporates a whistleblower policy in terms of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. Protected disclosures can be made by a whistleblower through an e-mail a letter to the Chairman of the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessedon the Company's website at the web link: http://www.ratnamani.com/investors_relations.html
B. Related Party Transactions
The Company has framed a Related Party Transactions Policy for thepurpose of identification and monitoring of such transactions. The policy on Related PartyTransactions as approved by the Board and was hosted on the Company's website at weblink: http://www.ratnamani.com/investors_ relations.html
All the related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course ofbusiness. There were no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personsthat may have a potential conflict with the interest of the Company as per the CompaniesAct 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
All the Related Party Transactions have been placed before the AuditCommittee and also before the Board for its approval.
Accordingly the disclosure of Related Party Transactions as requiredunder Section 134(3)(h) of the Companies Act 2013 with Section 188(2) of the CompaniesAct 2013 is mentioned in the form AOC - 2 which is given in Annexure - "H".
C. Sexual Harassment Of Women At Workplace (Prevention Prohibition AndRedressal) Act 2013
The Company is an equal opportunity Company and has zero tolerance forsexual harassment at workplace. It has adopted a policy against sexual harassment in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed thereunder.
During the financial year 2019-20 there was no complaint/case ofsexual harassment and hence no complaint remains pending as on 31st March2020.
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions/instances on these itemsduring the year under review:
a) There has been no material change in the nature of business duringthe year under review.
b) Issue of equity shares with differential rights as to dividendvoting or otherwise nor issued shares (including sweat equity shares) to the employees orDirectors of the Company under any Scheme.
c) There were no events to report that has happened subsequent to thedate of financial statements and the date of this report.
d) Neither the Managing Director Joint Managing Director nor the WholeTime Director of the Company receive any remuneration or commission from the SubsidiaryCompany.
e) No significant or material orders were passed by the Regulators orCourts or Tribunals which affect the going concern status and Company's operationsin future.
Your Directors wish to place on record their gratitude for the valuableguidance and support rendered by the Government of India various State Governmentdepartments Banks and various stakeholders such as shareholders customers andsuppliers among others. The Directors also commend the continuing commitment anddedication of the employees at all levels which has been critical for the Company'ssuccess.
The Directors regret for the loss of life due to COVID-19 Pandemic andare deeply greatful and have immense respect for every person who risked their life andsafety to fight this Pandemic. The Directors look forward to the continued support of allstakeholders in future also.
For and on behalf of the Board of Directors
| ||PRAKASH M. SANGHVI |
|Place : Ahmedabad ||Chairman and Managing Director |
|Date :16th June 2020 ||DIN:00006354 |