The Directors of RCIL are pleased to present the 41st Annual Report on the affairs ofthe Company along with the Audited Financial Statements for the financial year ended on31st March 2019.
The Company's Financial Performance for the year ended 31st March 2019 issummarized below: (Rs in Lakh )
|Particular || |
FINANCIAL YEAR 2018-2019
FINANCIAL YEAR 2017-2018
|Revenue from operation includin g other income || ||32549.79 || ||28685.78 |
|Earning Before Deprecation Interest and Tax (EBIDTA) || ||2781.81 || ||2058.77 |
|Less : Depreciation ||670.97 || ||739.35 || |
|Less : Finance Cost ||1307.18 ||1978.15 ||1237.94 ||1977.29 |
|Profit Before Tax || ||803.66 || ||81.48 |
|Tax Expenses || ||394.52 || ||(178.29) |
|Profit After Tax || ||409.14 || ||259.77 |
|Other Comprehensive Income || ||(3.76) || ||21.15 |
|PAT after Other Comprehensive Income || ||405.38 || ||280.92 |
|Earning Per Shares Basic & Diluted || ||10.28 || ||6.53 |
INDUSTRIAL STRUCTURE AND DEVELOPMENTS Global Economy
As per the International Monetary Fund (IMF) in 2017 and in early 2018 global economicactivity registered strong growth but slowed notably in the second half of 2018reflecting a confluence of factors like trade tensions tight financial conditionsuncertainty surrounding Brexit and a slowdown in China (which affected economies aroundthe world). Global growth is now projected to be at 3.3 percent in 2019 as compared to 3.6percent in 2018 and to 3.8 percent in 2017. (Source: World Economic Outlook)
Europe's economy continued to expand in the first half of 2018 albeit at aslower-than-expected pace. The region continues to enjoy respectable growth fueled bydomestic demand. Growth in the Euro area is expected to moderate from 1.8 percent in 2018to 1.6 percent in 2019 and to 1.7 percent in 2020. Growth rates have been marked down formany economies: Germany (due to soft private consumption weak industrial production dueto stricter
auto emission norms and subdued foreign demand) France (due to negative impact ofstreet protests and industrial action) and Italy (due to weak domestic demand and higherborrowing costs). There is substantial uncertainty around the baseline projection of
1.5 percent growth in United Kingdom in 2019-20 on account of the high uncertainty withregard to the final shape of the Brexit deal. (Source: WEO update January 2019)
The growth forecast for the United States is expected to decline to
2.5 percent in 2019 and soften further to 1.8 percent in 2020 with th e u nw in d in go f t h e fiscal stimulus and as the federal funds rate temporarily overshoots the neutralrate of interest. Strong domestic demand growth will support rising imports and contributeto a widening of the US current account deficit. (Source: WEO update January 2019)
India being the sixth largest economy in the world and also the fastest growingtrillion dollar economy was expected to grow at 6.8 percent in 2018-19 however afterseeing growth rates of 8.2% and 7.1% in the first two quarters of the year under reviewthe growth rates fell to 6.6% in the third quarter and further to 5.8% in the lastquarter. The weaker sentiment in the second half of the year was on account of a majornon-banking financial company (NBFC) defaulting on its repayments to the financialinstitutions thereby effecting the credit expansion and consumer sentiments. Other majordevelopments in the year under review were a decline in national inflation an increase inper capita income and a steadying of interest rates. During the year the US dollarcrossed the level of Rs. 74 per dollar for the first time but eventually ended the year atRs. 69.44.
For the year gone by India was in a better position to absorb the geo-economic shocksdue to improving fundamentals and the Government's policy initiatives like insolvency andbankruptcy code amendments bank recapitalizations investment in infrastructure etc..Over the medium-term the domestic demand (which in near future looks subdued) will drivegrowth. According to International Monetary Fund (IMF) India's GDP for 2019-20 isexpected to grow by 7.3% and by 7.5% for 2020-21 on the back of recovery in privateinvestments post the formation of the new government and robust domestic consumptionfueled by easing of monetary and fiscal policy. The Direct Income Scheme programmeannounced in 2019-20 interim budget which is aimed at improving the condition of thefarmers is also expected to provide impetus to rural consumption.
https://www.livemint.com/politics/policy/imf-cuts-india-gdp-growth-forecast-to-7-3-for-2019-20-1554813422935.html World Bank Report - Global EconomicProspects January 2019 IMF Report - World Economic Outlook April 2019 SyntheticTextile Industry in India
The Indian textile industry is one of the largest in the world with a large rawmaterial base and manufacturing strength across the value chain. The textile industryaccounts for 7% of industry output in value terms 2% of India's GDP and 15% of theCountry's export earnings according to Ministry of Textiles. Technical Textiles is one ofthe fastest growing sectors globally and in India it is estimated to grow to Rs. 2 lakhcrores by 2020-21 (Ministry of Textile).
For the entire textile industry and particularly for synthetic spinning mills the year2018-19 was an extremely challenging year on account of the heavy fluctuations in the rawmaterial rates and weak domestic and export demand. The fluctuations in the raw materialrates were caused by volatility in crude oil prices and the Rupee-USD foreign currencyrates.
The GST Regime which was introduced from 1st July 2017 replaced the value-addedsales and excise taxes levied by 29 states and the federal government. The GST whichdisrupted the tax system is seeing signs of stabilization and its impact onmacroeconomic indicators is likely to be very positive in the medium-term.
The company's revenue from operations (including other income) stood at Rs. 32549.79Lakh compared to Rs. 28685.78 Lakh with a remarkable growth of 13% as compared to theprevious fiscal. Yarn production stood at 14936 MT in FY19 compared to 14170 MT in FY18with a favorable growth of 5.40%. During the year the Company has sold 14827 MT ascompared to 13732 MT in FY18. Earnings Before Interest Depreciation and Tax (EBITDA) forthe year was Rs. 2781.81 Lakhs as compared to Rs. 2058.77 lakhs in the previous fiscalshowing a remarkable growth of 35%. In this Financial Year the Profit after Tax and OtherComprehensive Income for the year has increased substantially by 44.30% to Rs. 405.38lakhs as compared to Rs. 280.92 lakhs in FY18. We were
extremely positive about our prospects in the domestic market in FY 18-19 and haveachieved a remarkable demand of our product from the domestic market. The domestic salesof the Company have grown by 37% and the export sale have also witness a growth of 5% fromRs. 169.05 crore to Rs. 177.09 crore.
The Company has constantly focused on improving its operational efficiencies. TheCompany is pleased to report that during the period the Rajasthan State IndustrialDevelopment & Investment Corporation (RIICO) has appraised our modernization andexpansion proposal and has sanctioned a term loan of Rs. 35.50 crores for this at veryfavorable terms. This loan also qualifies under Rajasthan Investment Promotion Scheme-2014(RIPS- 2014) for an interest subsidy of 7% for 5 years from the start of commercialproduction. In this project the Company will expand existing capacity replace oldermachinery and re-allocate certain machinery for research and development purposes. Thiswill result in significant savings on repair and power cost and allow us to further expandour product offerings and enhance our margins. Furthermore the Company is raising fundsthrough the Issuance of Equity Shares on the Right Basis for Rs. 24.81 Crore of which23.07 crore will be used for the Redemption of 10% cumulative redeemable Preference Sharesand remaining amount will be used for the General Corporate Purpose.
We have been constantly working towards our objective of sustainable growth and wecontinue to focus on improving our product mix and on strategic cost reduction. Moreoverwe envisage an increase in demand for our value-added portfolio in the coming years.
OPPORTUNITIES AND THREATS AND THREATS
Today India is one of the world's leading manufacturers of manmade textiles. Indianfabrics are known for their excellent workmanship colors and durability. Due to heavyinvestments in world- class manufacturing plants continuous innovation new product mixand strategic market expansion Indian man-made fibers (MMF) are set to take center stagein the global arena. India synthetic fiber industry is the new addendum to theever-growing Indian Textile Industry. India being one of the world's fastest growingeconomies it is expected that there would be significant rise in domestic as well asexport demand in the coming years The company does not foresee any threats in the normalcourse of business Company' continuous focus on reducing its operational costs improvingefficiencies and technology up gradation have helped us be ahead of the curve.
Moreover certain Macroeconomic factors such as recent trends of currency fluctuationsUS China trade tensions and upcoming parliamentary elections may have some impact in nearterm. Currency swings can also lead to India becoming less competitive in the globalmarket. However favorable government policies for the sector may provide boost to theindustry going ahead.
RISK & RISK MANAGEMENTRISK & R
The Audit Committee closely monitors all risks that could have a negative effect on theCompany. Our Enterprise Risk Management (ERM) framework encompasses practices relating tothe identification analysis evaluation treatment mitigation and monitoring of thestrategic operational and legal and compliance risks to achieving our key businessobjectives. Risks which were reviewed by the Audit Committee are Financial RiskCompliance Risk Hazardous Risk and Employee Related Risk Liquidity Risk Commodity Riskand Market risk. The focus of risk management is to assess risks and deploy mitigationmeasures. In accordance with SEBI( Listing Obligations and Disclosures Requirements)Regulation 2015 (herein after called Listing Regulation) the Board members were informedof risk assessment and minimization procedures after which the Board formally adoptedsteps for framing implementing and monitoring the risk management plan for the Company.In order to achieve the key objective the policy establishes a structured and disciplinedapproach to Risk Management in order to guide decisions on risk related issues. YourCompany is exposed to a number of factors which could potentially have an impact on theCompany's operations: cost of raw material prices cost of power fluctuation in foreignexchange rate changes in government regulation and availability of skilled labor amongstothers.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company recognizes the importance of Human Resource as a key asset instrumental inits growth. The Company believes in acquisition retention and betterment of talented teamplayers. With the philosophy of inclusive growth the Company has further redefined itsperformance management system. The new system focuses on progression of individualemployees together with organizational goals. Under the new system increased thrust willbe on job rotation and multi-skilling. HRD achieves are taken in the Company involvingpositive approach to develop employees to take care of productivity quality and customerneeds. The Company has to make constant efforts to deploy Manpower. To develop skilledlabour training facilities are provided to the employees in house or by deputing them tothe machinery suppliers and to training institutes for specific training. The Company haswell developed management information system giving daily monthly and periodicalinformation to the all levels of management. Such reports are being analyzed and effectivesteps are taken to control the efficiency Utilization productivity and quality ofproduct being produced in company.
The employee strength at the end of the financial year was 1508. This includes bothskilled and unskilled manpower.
DIVIDEND ON EQUITY SHARES
Your Directors are pleased to recommend a dividend of 10% (i.e. Rs. 1.00/- per Share)on Equity Shares of Rs. 10/- each for the Financial Year ended 31st March 2019 and anAdditional Special Dividend of 5% i.e. Rs. 0.5 per share on the completion of 40 years ofcommencement of commercial production. If the dividend as recommended above is approvedby the Members at the Annual General Meeting the total outflow towards dividend(including the special dividend) on Equity Shares for the year would be Rs. 71.87 Lakh(inclusive of dividend distribution tax).
DIVIDEND ON PREFERENCE SHARES
Your Directors are pleased to recommend a dividend of 10% (i.e. Rs. 10.00/- per Share)on 10% Cumulative Redeemable Preference shares of Rs. 100/- each for the Financial Yearended 31st March 2019. The dividend has to be paid as per the terms of the issue for theyear; the total dividend payout will be Rs. 277.73 Lakh (inclusive of dividenddistribution tax).
Your Company has been in strong financial health during the year under review. Duringthe year the Company has made repayments of term loans amounting to Rs. 10.70 crore tobanks and financial institution and the Company's bankers have readily provided yourCompany with need-based working capital. During the year RI ICO has approved a term loanof Rs. 35.50 Crores at very attractive terms for this modernization. This Loan alsoqualifies under Rajasthan Investment Promotion Scheme-2014 (RIPS- 2014) for Interestsubsidy of 7% for 5 years from start of commercial production. The exercise will becompleted in 2 phases and post the completion; we expect significant savings in powerconsumption and repairs & maintenance cost which will further enhance operatingprofits.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under review Mr. Rahul Shroff has been reappointed as Wholeti'meDirector designated as Executive Director w.e.f 26th September 2018 .
The term of contract of Mr. Ameya Shroff Executive Director of the Company is up to31st July 2019. The Board of Directors on recommendation of Nomination and RemunerationCommittee wishes to re-appoint him as Executive Director for a period of three years witheffect from 01st August 2019. The resolution seeking approval of shareholders for there-appointment of Mr. Ameya Shroff Executive Director has been incorporated in the noticeof Annual General Meeting along with brief detail about him.
In accordance with the provisions of Section 152 and other applicable provisions ifany of the Companies Act 2013 read with the Companies (Appointment and Qualification ofDirectors) Rules 2014 (including any statutory modificati'on(s) or re-
enactment(s) thereof for the time being in force) and the Articles of Association ofthe Company Mrs. Dipika Shroff (Non-Executive & Non-Independent Director) is liableto retire by rotation at the ensuing AGM and being eligible have offered herself forreappointment.
Mr. K.L. Sonthalia Mr. Ramadoss Srinivasan & Mr. Narayan Shroff the IndependentDirectors of the company whose first term of office will get completed on 31st March2019.The company has received the consent from them and has proposed to re-appoint themfor second term of office with effect from 01st April 2019 for 5 years. The terms andconditions of appointment of Independent Directors are as per Schedule IV of the Act andSEBI Listing Regulations.
The Board of Directors recommended the / aforementioned appointments re- appointmentsof Mr. Ameya Shroff Mrs. Dipika Shroff Mr. Narayan Shroff Mr. K.L. Sonthalia and Mr.Ramadoss Srinivasan.
The Company has received declarations from all the Independent Directors of the Companyconfirming that they continue to meet the criteria of independence as prescribed undersub- section (6) of Section 149 of the Companies Act 2013 and rules issued thereunder aswell as Regulation 16 of Listing Regulation including any statutory modification orre-enactment thereof for the time being in force.
Familiarization program has been conducted for Independent Director and the details areuploaded on the company website www.reliancechemotex.com.
Brief details of Directors proposed to be appointed/re-appointed as required underRegulation 36 of the SEBI Listing Regulations are provided in the Notice of Annual GeneralMeeting.
Pursuant to Provision of the Companies Act 2013 read with Rules issued there under andthe SEBI (Listing Regulati'on).The Board of Directors has carried out an annual evaluationof its own performance board committees and individual directors pursuant to theprovisions of the Act and SEBI Listing Regulations. The performance of the board wasevaluated by the board after seeking inputs from all the directors on the basis ofcriteria such as the board composition and structure effectiveness of board processesinformation and functioning etc. The performance of the committees was evaluated by theboard after seeking inputs from the committee members on the basis of criteria such as thecomposition of committees effectiveness of committee meetings etc. The above criteriaare based on the Guidance Note on Board Evaluation issued by the Securities and ExchangeBoard of India on January 5 2017. In a separate meeting of independent directorsperformance of non-independent directors the board as a whole and the Chairman of theCompany was evaluated
taking into account the views of executive directors and non executive directors. TheBoard and the Nomination and Remuneration Committee reviewed the performance of individualdirectors on the basis of criteria such as the contribution of the individual director tothe board and committee meetings like preparedness on the issues to be discussedmeaningful and constructive contribution and inputs in meetings etc. In the board meetingthat followed the meeting of the independent directors and meeting of Nomination andRemuneration Committee the performance of the board its committees and individualdirectors was also discussed. Performance evaluation of independent directors was done bythe entire board excluding the independent director being evaluated.
MEETINGS OF BOARD
The Board of Directors met five times during the year on 17.05.2018 28.06.201813.08.2018 02.11.2018 and 09.02.2019. The frequency of and the quorum at these meetingswere in conformity with the provisions of the Companies Act 2013 Secretarial Standard -1and the SEBI (Listing Regulations). Attendance and other details are given in CorporateGovernance Report. The intervening gap between any two meetings was within the periodprescribed by the Companies Act 2013 and SEBI (Listing Regulations) 2015 and SecretarialStandard-1.
The Company has appointed M/s. Jain Pramod Jain & Co Chartered Accountant NewDelhi (Firm Registration No. 016746N) as the statutory auditors of the Company for aterm of five succeeding years from the conclusion of the 39th Annual General Meeting ofthe Company held on 28th August 2017 till the conclusion of the 44th Annual GeneralMeeting to be held in the year 2022 and approval of shareholders of the Company based onthe recommendation of the Audit Committee was recorded for the same.
Pursuant to the amendments made to Section 139 of the Companies Act 2013 by theCompanies (Amendment) Act 2017 effective from May 7 2018 the requirement of seekingratification of the Members for the appointment of the Statutory Auditors has beenwithdrawn from the Statute. Hence the resolution seeking ratification of the Members forcontinuance of their appointment at this AG M is not being sought.
The Company has received a certificate from M/s. Jain Pramod Jain & Co CharteredAccountant New Delhi (Firm Registration No. 016746N) confirming that they are notdisqualified from continuing as Statutory Auditors of the Company AUDITOR'S REPORT
There is no reservation qualification or adverse remark contained in the Auditor'sReport attached to Financial Statements of
company as at 31st March 2019. The information referred in Auditor's Report ofFinancial Year 2018-19 is self-explanatory and do not call for any further comments.
REPORTING OF FRAUDS
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of the Act and the rules made there under.
In Board Meeting held on 13th August 2018 M/s N.N & Associates was appointed asCost Auditor to undertake the Cost Audit for the Financial Year 2018-19. The Cost Auditfor the Financial Year 2018-19 has been completed and the Cost Audit Report along withcost Accounts approved by the Board in its meeting held on 09th August 2019.
M/s. N.N & Associates Cost Accountants New Delhi (FRN: 002322) has beenre-appointed by the Board to conduct the Audit for the Financial Year 2019-20. As requiredunder the Companies Act 2013 the remuneration payable to the Cost Auditors is required tobe placed before the members in a general meeting for their ratification. Accordingly aresolution seeking member's ratification remuneration payable to M/s. N.N &Associates Cost Accountant New Delhi is included in the Notice of Annual GeneralMeeting.
The Company has maintained the cost accounts and records in accordance with Section 148of the Companies Act 2013 and Rule 8 of the Companies (Accounts) Rules 2014.
As required under the provisions of Section 139 of the Companies Act 2013 the Companyhas obtained a written certificate from the above mentioned Auditors to the effect thatthey conform with the limits specified in the said Section and that they are notdisqualified for appointment within the meaning of Section 141 of the said Act and rulesframed as under.
SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT Pursuant to Provision ofSection 204 of the Companies Act 2013 and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the Company appointed M/s. V.M & AssociatesPracticing Company Secretary (FRN: P1984RJ039200) Jaipur to undertake the SecretarialAudit of the Company for the financial year 2018-19. The Secretarial Audit Report in formM R-3 for the Financial Year 2018-19 is included as Annexure-2 and forms integral part ofthe Report.
The Secretarial Audit Report does not contain any qualification/ reservation&adverse remark.
The Board of Directors has re-appointed M/s. V.M & Associates Practicing CompanySecretary Jaipur to conduct the Secretarial Audit for the Financial Year 2019-20
As required under the provisions of Section 139 of the Companies Act 2013 the Companyhas obtained a written certificate from the above mentioned Auditors to the effect thatthey conform with the limits specified in the said Section and that they are notdisqualified for appointment within the meaning of Section 141 of the said Act and rulesframed as under.
Pursuant to Provision of Section 138 of the Companies Act2013 read with CompaniesAccounts Rules) 2014 the Company appointed M/s. Rajeev Amitabh & Co CharteredAccountant New Delhi to undertake the Internal Audit for the Financial Year 201819. TheScope of Internal Audit is closely monitored by the Audit Committee. The Internal Auditorsubmits their report on half yearly basis and same has been placed before the AuditCommittee along with Management response. Board of Directors in its meeting held on 4thMay 2019 has re- appointed M/s. Rajeev Amitabh & Co Chartered Accountant New Delhito conduct the Internal Audit of the Company for the Financial Year 2019-20.
During the Financial Year 2018-19 your Company has not invited accepted or renewedany deposits within the meaning of Secti'on73 74 and 76 of the Companies Act. 2013 readtogether with the Companies (Acceptance of Deposit) Rules 2014 as amended. The Borrowingtaken from the directors was stated in the financial statement note no. 16.
The paid up Equity Share Capital as at March 31 2019 stood at Rs. 399.69 Lakh. Duringthe year under review the Company has not issued shares or convertible securities orshares with differential voting rights nor has granted any stock options or sweat equityor warrants. As on March 31 2019 none of the Directors of the Company hold instrumentsconvertible into Equity Shares of the Company. The Board had proposed to raise the fundsby way of Right Issue from the existing shareholders of an amount not exceeding Rs. 30.00Cr. Accordingly the issue of shares to be issued on rights basis was opened on 08th July2019 and closed for subscription on 22nd July 2019. The total offer was for 3816818Shares @ Rs. 65.00 Per share (including a premium of Rs. 55.00 per share) amounting to Rs.2480.93 Lakhs. The company received valid applications for 3562713 shares amounting toRs. 2315.76 lacs.
The present capital structure of the company as on 31.03.2019 is as under:
|Equity Share Capital ||: 399.69 Lakh |
|Preference Share Capital ||: 2307.50 Lakh |
The Company does not propose to transfer any sum to the General Reserve out of theamount available for appropriation.
EXTRACT OF ANNUAL RETURN
The Extract of the Annual Return in Form MGT-9 containing details as on thefinancialyear ended 31st March 2019 as required under Section 92 (3) of the CompaniesAct2013 read with the Companies (Management and Administration) Rules 2014 is includedin the Report as an Annexure- 8.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY Duringthe year under review the Company has proposed to raise the funds by way of Right Issueto existing shareholders. The Company has allotted 3562713 Equity Shares to existingshareholders on 30th July 2019. As on the Date of Report the above share has been listedand traded on the stock exchange. SIGNIFICANT MATERIAL ORDER PASSED BY THE REGULATORSOR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS INFUTURE
There were no significant and material orders passed by the regulators courts ortribunals which would impact the going concern status of the company and also theCompany's future operations.
During the year the Company has no Subsidiaries/ associate companies / Joint Ventureas on 31st March 2019.
LOANS GUARANTEES & INVESTMENTS BY THE COMPANY
During the year under review your Company made loans given guarantees providedsecurities and made investments in compliance with Section 186 of the Companies Act 2013.The said details are given in the notes to the financial statements. INTERNAL FINANCIALCONTROL SYSTEM The Company has put in place an adequate system of internal controlcommensurate with its size and nature of business 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 system and monitors them in accordance with the policy adopted by theCompany. The Audit Committee of the Board of Directors Statutory Auditor and Departmenthead are appraised of the internal audit finding and corrective action are taken thereon.The audit observation/ management response is placed before the Audit Committee. We
believe that our internal financial control system provides reasonable assurance thatour internal financial control is designed effectively and is operating as intended.
REPORT ON CORPORATE GOVERNANCE A separate section on Corporate Governance and acertificate from Auditors of the Company regarding compliance with the conditions ofCorporate Governance as stipulated under Regulation 27 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 with Stock Exchange form a part of the AnnualReport are given in Annexure-9.
VIGIL MECHANISM /WHISTLE BLOWER POLICY Your Company is committed to higheststandard of ethical moral and legal business conduct. Accordingly the Board of Directorshas formulated a Whistle Blower Policy which is in compliance with the provisions ofSection 177(9) of the Companies Act 2013 and Listing Regulation. The Policy provides aframework and process whereby concerns can be raised by its employees against any kind ofdiscrimination harassment victimization or any other unfair practice being adoptedagainst them. The policy is to promote ethical behavior in all its business activities andto report concerns and unethical behavior actual or suspected fraud or violation of ourcode of conduct and ethics. Under the said Mechanism the employees are free to reportviolations of applicable laws and regulations and the Code of Conduct. It also providesfor adequate safeguards against the victimization of persons who use such mechanism. TheVigil Mechanism /Whistle Blower Policy have been posted on the Company's websitewww.reliancechemotex.com.
The functioning of the vigil mechanism is reviewed by the Audit Committee from time totime. Your Company affirms that no director/employee has been denied to access theChairman of the Audit Committee and that no compliant was received during the year. Briefdetails about the policy are given in the Corporate Governance Report.
NOMINATION & REMUNERATION POLICY
The Board of Directors has framed the policy on Nomination & Remuneration whichlays down the framework in relation to remuneration of Directors Key Managerial Personand Senior Management of the Company. This policy also lays down the criteria forselection and appointment of Board Members. The Nomination & Remuneration policy hasbeen posted on the Company's websitewww.reliancechemotex.com RELATED PARTY TRANSACTION
In line with the requirements of the Companies Act 2013 and Listing Regulations yourCompany has formulated a Policy on Related Party Transactions which is available on theCompany's website at www.reliancechemotex.com.The Policy intends to ensure that properreporting; approval and disclosure processes are in place for
all transactions between the Company and Related Parties.
All Related Party Transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is obtained for Related Party Transactions which are ofrepetitive nature and / or entered in the Ordinary Course of Business and are at Arm'sLength.
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and at Arm's Length basis. No Material Related Party Transactions i.e.transactions exceeding 10% of the annual consolidated turnover as per the last auditedfinancial statements were entered during the year by your Company. The disclosure ofparticulars of contracts/ arrangements entered into by the company with related partiesreferred to in sub-section (1) of section 188 of the Companies Act 2013 is given in AOC-2 as given in Annexure-3.
DISCLOSURE UNDER THE SEXUAL HARRASAMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment free workplace forevery individual through various interventions and practices. The Company always endeavorsto create and provide an environment that is free from discrimination and harassmentincluding sexual harassment.
The Company has in place an Anti'-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed offduring the year 2018-19:
|No. of complaints received ||No. of complaints disposed off |
|1 NIL ||NIL |
COMMITTEES OF THE BOARD
The Board of Directors has following committees:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. CSR Committee
5. Finance Committee
6. Executive Committee for Right's Issue
The details of committees along with their composition number
of meetings and attendance of the meetings and other details are provided in theCorporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY
In terms of requirements of Section 135 of the Companies Act 2013 and rules issuedthere under the Board of Directors of your company has constituted a CSR Committeecomprising of Shri K.L. Sonthalia Shri R.N. Sharma and Shri. Rahul Shroff as members ofthe committee. This committee is responsible for formulating implementing and monitoringthe CSR Policy of the company. The policy on CSR can be accessed on the Company website atwww.reliancechemotex.com.
During the year under review the company has spent Rs12.58 Lakh/- towards CSRactivities.
The Report on CSR Activities as required under the Companies Act 2013 are set out inthe Annexure -4.
PARTICULARS OF EMPLOYEES & THEIR DISCLOSURES:
The information required pursuant to Section 197 (12) read with rule 5 (1) of TheCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofmanagerial remuneration of the Company is set out in the Annexure-5.
A statement of the employees of the Company who were in receipt of the remunerationexceeding the limits prescribed u/s 197 (12) read with rule 5(2) of The Companies(Appointment and Remuneration of Managerial Personnel) of the Companies Act
2013 during the year under review a Statement of particular of top ten employees inaccordance with Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonal) Rules
2014 is appended as Annexure-6.
PARTICULARS REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNING AND OUTGO.
The statement pursuant to Section 134 (3)(m) of The Companies Act 2013 read with theRule 8(3) of The Companies (Accounts) Rules2014 regarding particulars relating toconservation of energy technology absorption foreign exchange earnings and outgo asrequired to be disclosed under the Act is given in Annexure no.1.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement Board of Directors hereby state andconfirm that:
(i) In the preparation of the annual accounts for the year ended March 31 2019 theapplicable accounting standards and schedule III of the Companies Act 2013 had beenfollowed and there are no material departure from the same;
(ii) Appropriate accounting policies have been selected and these have been appliedconsistently and that the
judgments and estimates that have been made are reasonable and prudent so as to providea true and fair view of the state of affairs of the Company at the end of the financialyear and of the profit or loss of the Company for that period;
(iii) Proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 tosafeguard the assets of the Company and to prevent or detect fraud and otherirregularities;
(iv) The annual accounts for the year ended 31st March 2019 have been prepared on agoing concern basis;
(v) Robust and detailed Internal Financial Controls to be followed by the Company havebeen laid down. These controls are adequate and were operating effectively; and
(vi) Appropriate system has been devised to ensure that your Company is compliant withall applicable provisions and statutory requirements. These systems were adequate andoperating effectively.
The company has complied with all applicable secretarial standard during the year.
KEY FINANCIAL RATIO
Pursuant to amendment made in Schedule V to the SEBI Listing Regulations details ofsignificant changes (i.e. change of 25% or more as compared to the immediately previousfinancial year) in Key Financial Ratios and any changes in Return on Net Worth of theCompany (on standalone basis) including explanations therefore are given below:
|Particular ||31.03.2019 ||31.03.2018 |
|Debtor Turnover Ratio (no. of days) ||19.78 ||22.08 |
|Inventory Turnover (no. of days) ||42.78 ||53.00 |
|Interest coverage Ratio ||1.61 ||1.07 |
|Current Ratio ||0.94 ||0.86 |
|Debt/Equity Ratio ||0.39 ||0.42 |
|Operating Profit margin ||1.77% ||-0.21% |
|Net Profit Margin ||2.47% ||0.28% |
|Return on Networth ||4.55% ||2.78% |
Certain statements in this Board's Report and Management Discussion and Analysisdescribing the Company's objectives projections estimates and expectations may be"forward-looking statements" within the meaning of applicable laws andregulations. Forward-looking statements are identified in this report by using words like"anticipates" "believes" "expects" "intends"and other similar expressions in such statements. Although we believe our expectations arebased on reasonable assumptions these forward-looking statements may be influenced bynumerous risks and uncertainties that could cause actual outcomes and results to bematerially different from those expressed or implied. Some of these risks anduncertainties have been discussed in the section on "Risk Management". TheCompany takes no responsibility for any consequence of decisions made based on suchstatements and holds no obligation to update these in the future. Market data andinformation are gathered from various published and unpublished reports. Their accuracyreliability and completeness cannot be assured. APPRECIATION & ACKNOWLEDGMENT TheDirectors thank the Company's employees customers vendors investors and academicpartners for their continuous support. The Directors also thank the Government of IndiaGovernments of various states in India Governments of various countries and concernedGovernment departments and agencies for their co-operation. The Directors appreciate andvalue the contribution made by every member of the RCIL family.
FOR RELIANCE CHEMOTEX INDUSTRIES LIMITED
|Place: Mumbai ||(Sanjiv Shroff) ||(Rahul Shroff) |
|Date: 9th August 2019 ||DIN:00296008 ||DIN:02301693 |