Your Directors are pleased to present the 35th Annual Report of yourcompany along with the Audited Financial Statements of the Company for the year ended 31stMarch 2019.
|1. FINANCIAL RESULTS AT A GLANCE || || || ||(र in Lacs) |
|Particulars ||Standalone ||Consolidated |
| ||2018-19 ||2017-18 ||2018-19 ||2017-18 |
|Revenue from Operations ||275490 ||178981 ||275490 ||178981 |
|Other Income ||4123 ||3242 ||4123 ||3242 |
|Total Income ||279613 ||182223 ||279613 ||182223 |
|Profit before Tax ||37056 ||22788 ||37055 ||22786 |
|Less: Tax Expenses ||11763 ||7609 ||11763 ||7609 |
|Profit After Tax ||25293 ||15179 ||25292 ||15177 |
2. OPERATIONAL REVIEW/STATE OF THE COMPANY'S AFFAIRS
In F.Y. 2018-19 Total Revenue including Other Income stood at lacs as against र 182223 lacs in F.Y. 2017-18 both at Standalone andConsolidated basis showing an increase of 53.44%.
On Standalone basis Profit Before Tax (PBT) stood at र 37056lacs as compared to र 22788 lacs in F.Y. 2017-18. The Profit After Tax (PAT) wasर 25293 lacs as compared to र 15179 lacs in F.Y. 2017-18. A favourabledemand scenario both in line pipes and project application pipes & tubes and acontinuous focus on cost optimisation across all business segments resulted into PATgrowing by 66.63%. While on Consolidated basis Profit Before Tax (PBT) stood at lacs as compared to र 22786 lacs in F.Y. 2017-18. The Profit After Tax (PAT)was र 25292 lacs as compared to र 15177 lacs in F.Y. 2017-18.
Domestic Revenues was र 213651 lacs up from र 128128lacs in F.Y. 2017-18 representing a growth of 66.75% owing to strong demand from domesticuser industries. A good order in flow from export markets also benefitted the companysignificantly. The Revenue from exports stood at र 56041 lacs compared to lacs last 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.
Based on your company's excellent performance the Board of Directorsis pleased to recommend a dividend of र 9.00 per Equity Share having face value ofर 2.00 each (i.e. 450% on the paid-up capital) for the financial year ended on 31stMarch 2019 as against र 6.00 per Equity Share in the previous year. The totaldividend payout for the F.Y. 2018-19 shall be र 5070 Lacs comprising of dividendamounting to र 4206 Lacs and dividend tax of र 864 lacs. The dividend payoutis in accordance with the Company's Dividend Distribution Policy. The DividendDistribution Policy of the Company is available at the web link http://www.ratnamani.com/investorsrelations.html.
4. TRANSFER TO RESERVES
Your company does not propose to transfer any amount to any reserves ofthe Company for the year under review.
5. SHARE CAPITAL
The paid up Equity Share Capital of the Company as on 31st March 2019was र 934.56 lacs divided into 46728000 Equity Shares of र 2.00 each.
The Company was not having any long-term borrowings as on 31st March2019.
7. 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 modi cation(s) or re-enactment(s) for the time being in force).
8. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION186
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.
9. DIRECTORS AND KEY MANAGERIAL PERSONNEL
a) As required under Regulation 36(3) of the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 particulars of Shri Jayanti M. Sanghvi(DIN: 00006178) Whole Time Director seeking re-appointment at ensuing Annual GeneralMeeting are annexed to the notice convening 35th Annual General Meeting. Further it isrecommended to re-designate him as Joint Managing Director at the ensuing Annual GeneralMeeting.
Further the first term of appointment of Smt. Nidhi G. Gadhecha (DIN:06847953) Independent Director will be expiring at the ensuing 35th Annual GeneralMeeting. Based on her skills experience knowledge performance evaluation andrecommendation of the Nomination and Remuneration Committee and Board of Directors it isproposed to re-appoint her for the second term of 5 (Five) consecutive years up to theconclusion of the 40th Annual General meeting to be held in the calendar year 2024 or upto8th August 2024 whichever is earlier.
The brief resume of Smt. Nidhi G. Gadhecha as required underRegulation 36 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations2015 forms a part of the Notice of the 35th Annual General Meeting of the Company.
The Company has received a declarations from all the IndependentDirectors of the Company con rming 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 and as per Regulation 25(8) of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 they have also conrmed by way of declarations that they are not aware of any circumstances or situationwhich exists or may be reasonably anticipated that could impair or impact their ability todischarge their duties with an objective independent judgment and without any external inuence.
b) Board Evaluation
The Nomination and Remuneration Committee and the Board of Directors ofthe Company had laid down the process and criteria for annual performance evaluation ofthe Board its Committees and Individual Directors. The evaluation process covered aspectssuch as Board structure and composition frequency of Board Meetings participate in thelong term strategic planning contribution to and monitoring of corporate governancepractices and the ful lment of Directors' obligation and duciary responsibilitiesincluding but not limited to active participation at the Board and Committee meetings.
The Board at its meeting reviewed the performance of the Board as awhole its Committees and individual Directors taking into account the recommendation ofthe Nomination and Remuneration Committee and the Independent Directors which includedthe evaluation of the Chairman and Non-Independent Directors of the Company.
c) Nomination and Remuneration Policy
The Board has framed the Nomination and Remuneration Policy. Thesalient features of the policy covers constitution of the Nomination and RemunerationCommittee criteria of appointment quali cation duties and retirement of all DirectorsKey Managerial Personnel and Senior Management Personnel and also their remunerationpayable as recommended by the Nomination & Remuneration Committee etc. TheRemuneration Policy is also incorporated in the Corporate Governance Report. The same canbe access from the website of the Company at the web link:http://www.ratnamani.com/investors_ relations.html d) The details of programmes forfamiliarisation of Independent Directors with the Company their roles rightsresponsibilities in the Company nature of the industry in which the Company operatesbusiness model of the Company and related matters are put up on the website of the Companyat 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 Whole Time Director
3. Shri Shanti M. Sanghvi Whole Time Director
4. Shri Vimal Katta Chief Financial Officer
5. Shri Jigar Shah Company Secretary & Compliance of cer
10. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act2013 the Board of Directors hereby states and con rms 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 31st March 2019and of the profits of the Company for the financial year ended on 31st March 2019.
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.
11. BOARD MEETINGS
The Board of Directors met 5 (Five) times during the F.Y. 2018-19. Thedetails of the board meetings and the attendance of the Directors is provided in theCorporate Governance Report forming part of this Report.
12. AUDIT COMMITTEE
As provided in Section 177(8) of the Companies Act 2013 theinformation about Audit Committee and its details are given in the Corporate GovernanceReport. The Board has accepted the recommendations of Audit Committee. Presently Shri
Divyabhash C. Anjaria is the Chairman of the Committee and Dr.Vinodkumar M. Agrawal Shri Jayanti M. Sanghvi and Smt. Nidhi G. Gadhecha are the membersof the Committee.
13. STATUTORY AUDITORS
The first term of appointment of M/s. S R B C & Co. LLP CharteredAccountants (ICAI Firm Registration No.324982E/ E300003) as the Joint Statutory Auditorwill be expiring at the ensuing 35th Annual General Meeting. Based upon the recommendationof the Audit Committee at its meeting held on 28th May 2019 the Board of Directors atits meeting held on 29th May 2019 have considered and recommended their appointment for afurther period of 2 (Two) consecutive years being their second term effective from theconclusion of the ensuing 35th Annual General Meeting till the conclusion of the 37thAnnual General Meeting of the Company to be held in the calendar year 2021 subject to thefurther approval of the Shareholders.
Further at the 34th Annual General Meeting held on 9th August 2018the Shareholders had approved the appointment of M/s. Kantilal Patel & Co. CharteredAccountants (ICAI Firm Registration No. 104744W) as the Joint Statutory Auditor for aperiod of 5 years commencing from the conclusion of the 34th Annual General Meeting tillthe conclusion of the 39th Annual General Meeting to be held in the calendar year 2023.
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 modi cation(s) or re-enactment(s) for the time being in force).
The Notes on financial statement referred to in the Auditors' Reportare self-explanatory and do not call for any further comments. The Auditors' Reportdoes not contain any quali cation reservation or adverse remark.
14. COST AUDITORS
Pursuant to Section 148 of the Companies Act 2013 ('the Act') readwith the Companies (Cost Records and Audit) Rules 2014 as amended from time to time theCompany is required to maintain cost records and have the audit of its cost recordsconducted by a Cost Accountant. Cost records are made and maintained by the Company asrequired under Section 148 (1) of the Act.
Your Directors have on the recommendation of the Audit Committeeappointed M/s. N. D. Birla & Co. Cost Accountants as the Cost Auditor of the Companyto audit the Cost accounts for the financial year 2019-20 at a remuneration of /- plus taxes as applicable and out of pocket expenses subject to rati cation ofthe said remuneration by the Members in ensuing Annual General Meeting. Accordingly aresolution seeking Members' rati cation for the remuneration payable to M/s. N. D.Birla & Co. Cost Accountants is included at Item No.5 of the Notice convening the35th Annual General Meeting. The Cost Auditors' Report for the financial year 2018-19does not contain any quali cation reservation or adverse remark.
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 2019-20 along with a certi cate con rming their independence and arm'slength relationship.
15. SECRETARIAL AUDITORS
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 Auditors of the Company to conduct an audit of the secretarial records forthe financial year 2019-20. Your company has received consent from M/s. M. C. Gupta &Co. Company Secretaries in practice to act as the Secretarial Auditors for conductingaudit of the secretarial records for the financial year ending 31st March 2020.
During the year 2018-19 the Company has complied with all theapplicable Secretarial Standards issued by the Institute of Company Secretaries of India"(ICSI)".
16. CREDIT RATING
The Company enjoys a good reputation for its sound financial managementand its ability to meet financial obligations. CRISIL has reaf rmed AA/stablerating for the Company's long-term borrowings and A1+ for its short-termborrowings.
17. 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 rm of Chartered Accountants. The Internal Control Systems are regularly beingreviewed by the Company's Internal Auditors with a view to evaluate the ef cacy 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 modi ed/ 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 are operative. Thescope of the Internal Audit is defined and reviewed every year by the Audit Committee andinputs wherever required are taken from the Statutory Auditors. Based on the report ofInternal Auditors major audit observations and corrective actions thereon are presentedto the Audit Committee of the Board.
Our management assessed the effectiveness of the Company's internalcontrol over financial reporting (as defined in Clause 17 of SEBI Regulations 2015) as ofMarch 31 2019. The Statutory Auditors of the Company have audited the financialstatements included in this annual report and have issued an attestation report on ourinternal control over financial reporting (as defined in Section 143 of Companies Act2013).
18. 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 forGreen Energy Generation thus continuing to contribute in a small waytowards a greener and cleaner earth.
19. 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.
20. SUBSIDIARY IT'S PERFORMANCE AND CONSOLIDATED FINANCIALSTATEMENT
The Company has one Wholly Owned Subsidiary in the State of DelawareUSA in the name Ratnamani Inc. During the year under review the performanceof the subsidiary was not so good it declined due to lower crude prices and lower demandfrom Oil & Gas sector. As a consequence the subsidiary recorded a loss of US $ 1891(equivalent to (र 130800) for the year ended on 31st March 2019 [Previous Year:Loss of US $ 3033 (equivalent to (र 194537). Pursuant to the provisions ofSection 129(3) of the Act a statement containing the salient features of financialstatements of the Company's subsidiary in Form AOC-1 is given in Annexure-B.Your Directors have pleasure in attaching the Consolidated Financial Statements pursuantto Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 which have been prepared in accordance with the applicable provisions of theCompanies Act 2013 and Indian Accounting Standards (Ind AS) for financialyear ended 31st March 2019 and approved by the Board. These Consolidated FinancialStatements have been prepared on the basis of the Audited Financial Statements of theCompany and its Subsidiary Company as approved by their respective Board of Directors.
Further pursuant to the provisions of Section 135 of the CompaniesAct 2013 the financial statements of the Company consolidated financial statements alongwith relevant documents and separate audited financial statements in respect ofsubsidiaries are available on the website of the companyhttp://www.ratnamani.com/investorsfirelations.html
21. 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 af rmed the compliance during the year underreview.
The Board has during the year amended the framed Code ofPractices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation. The Code casts obligations upon the Directors and Officers of theCompany to prevent / preserve Price Sensitive Informations which may likely to have abearing on the share price of the Company. Those who are in the knowledge of any suchinformation are prohibited to use such information for any personal purpose. Similarlythe Code also prescribes how such information needs to be handled disclosed or madeavailable to the Public through Stock Exchanges Company's website Press Media etc. TheCompany Secretary & Compliance Officer has been entrusted with the duties to ensurecompliance.
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's Certicate regarding compliance of conditions of Corporate Governance are attached and formspart of the Annual Report.
22. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As per Regulation 34(2)(e) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reportis set out in a separate section included in this Annual Report and forms part of thisReport.
23. CORPORATE SOCIAL RESPONSIBILITY (CSR)
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 corporate citizen.
The salient features of the CSR Policy covers objectives list ofactivities / projects amount to be spend for the CSR activities mode of itsimplementation procedural aspects and the role of the Committee etc. The CSR Policy canbe access on the Company's website at the web link: http://www.ratnamani.com/investors_relations.html
The Company has identified the following as focus areas of engagement:
a. Education: Access to quality education training and skillenhancement.
b. Environment: Environmental sustainability ecological balanceconservation of natural resources.
c. Rural Transformation: Provision of drinking water sewagefacilities sanitation facilities and roads
d. Health: Affordable solutions for healthcare through improved accessand awareness.
e. The Company would also like to undertake need-based initiatives infuture.
During the year the Company has spent र 432.66 Lacs on CSRactivities. The detail of CSR activities and expenses are given in Annexure-D.
24. EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form No. MGT-9 of the Company is annexedherewith as Annexure- E to this Report.
25. 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.
26. SECRETARIAL AUDIT REPORT
The Secretarial Audit Report for the financial year ended 31st March2019 is annexed with the Directors' Report and forms part of the Annual Report asgiven in Annexure-G. Further the Secretarial Audit Report does not containany quali cation reservation adverse remark or disclaimer.
27. BUSINESS RESPONSIBILITY REPORT
As per regulation 34(2)(f) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 mandates inclusion of the BusinessResponsibility Report (BRR) as part of the Annual Report for top 500 listedentities based on market capitalisation. In compliance with this regulation the BusinessResponsibility Report provides a detailed overview of initiatives taken by your companyfrom environmental social and governance perspectives. The same is out in a separatesection included 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/investorsfirelations.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 web link:http://www.ratnamani.com/ investorsfirelations.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 of business.There were no materially significant related party transactions made by the Company withPromoters Directors Key Managerial Personnel or other designated persons that may have apotential conflict with the interest of the Company as per the Companies Act 2013 andSEBI (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 ProhibitionAnd Redressal) Act 2013
The Company is an equal opportunity and has zero tolerance for sexualharassment at workplace. It has adopted a policy on prevention prohibition and redressalof sexual harassment at workplace in line with the provisions of the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and the Rulesthereunder.
Further the Company has Internal Complaint Committees for variouslocations of the Company in compliance with the above mentioned Act and Rules. During thefinancial year 2018-19 there was no complaint/case of sexual harassment and hence nocomplaint remains pending as on 31st March 2019.
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 nor the Whole Time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
e) No significant or material orders were passed by the Regulators orCourts or Tribunals which affect the going concern status and Company's operations infuture.
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 look forward to the continued support of all stakeholders in futurealso.
| ||For and on behalf of the Board of Directors |
| ||PRAKASH M. SANGHVI |
| ||Chairman and Managing Director |
|Place : Ahmedabad || |
|Date : 29th May 2019 ||DIN: 00006354 |