TO THE MEMBERS
Your Directors have pleasure in presenting their Thirty-Third Annual Report togetherwith the Audited Statement of Accounts for the financial year ended 31st March2018.
Pursuant to the notification dated 16th February 2015 issued by theMinistry of Corporate Affairs the Company has adopted the Indian Accounting Standards(Ind AS'') notified under the Companies (Indian Accounting Standards) Rules2015 with effect from 1st April 2017. As such financial statements for theyear ended as at 31st March 2017 have been restated to conform to Ind AS.
The summarized financial results of the company for the year ended 31stMarch 2018 are presented below:
| || ||(Rs. in Lacs) |
|Particulars ||2017-2018 ||2016-2017 |
| || ||(Restated as per Ind AS) |
|Sales and other income ||6416.88 ||5421.39 |
|Profit before Depreciation Finance Cost and Tax ||1278.32 ||1009.54 |
|Less: Depreciation ||63.38 ||77.83 |
|Finance Cost ||25.05 ||28.26 |
|Profit before Tax ||1189.89 ||903.45 |
|Less: Provision for Tax (Including Income Tax Prior period tax and Deferred Tax) ||382.38 ||167.90 |
|Profit after Tax ||807.51 ||735.55 |
|Add: Other Comprehensive Income ||(4.92) ||6.90 |
|Total Comprehensive Income carried to Other Equity ||802.59 ||742.45 |
REVIEW OF OPERATIONS
Your Company's Sales turnover was Rs. 6071.71 lacs in the year under review as comparedto Rs. 4776.19 lacs in the previous year driven largely by an 52 % increase in sale offinished goods.
The Profit before tax (PBT) for the period under review has increased from Rs. 903.45lacs in the previous year to Rs. 1189.89 lacs in current year.
REDEMPTION OF PREFERENCE SHARES
As per terms of the Scheme of Amalgamation ("Scheme") with Rishiroop Rubber(International) Limited sanctioned by the Hon'ble High Court of Gujarat on 23rdJune 2015 and the Hon'ble High Court of Bombay on 8th May 2015 the Company made anapplication to BSE Limited for listing 2618447 Redeemable Preference shares (RPS) issuedby the Company in lieu of unconverted 1% Optionally Convertible Preference Shares (OCPS).Keeping in view certain regulatory approvals required BSE Ltd. referred the matter toSecurities Exchange Board of India (SEBI). Your Company awaited the RPS listing approvaland redeemed the RPS on the expiry of their tenure of 6 (six) months i.e. on 23rdAugust 2017 as per the Scheme terms at a price of Rs. 45.32 per RPS. Total outflow onaccount of RPS redemption was Rs. 11.87 crore.
EVENTS OCCURING AFTER THE BALANCE SHEET DATE
There are no material changes or commitments between the end of the financial year towhich the financial statements relate and the date of this report that affects thefinancial position of the Company.
DIVIDEND AND TRANSFER TO RESERVES
The Board of Directors of the Company recommend for consideration of shareholders atthe 33rd Annual General Meeting payment of dividend @ 12 % (Re. 1.20 pershare) on the Equity Shares of face value of Rs. 10/- each for the year ended 31stMarch 2018. The dividend paid during the previous year was 10% (i.e. Re. 1/- per share).The Board proposes to transfer an amount of Rs. 10 Lakhs (Rupees Ten Lakhs) to the GeneralReserve.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
In accordance with Section 124 and 125 of the Companies Act 2013 and InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 and amendments thereof the dividend amounts for the financial year 2009-10 whichremained unclaimed/unpaid for a period of seven years have been transferred to theInvestor Education and Protection Fund (IE&PF) during the year. The shares pertainingto such unclaimed/unpaid dividend have also been transferred to the IE&PF Authority asper the statutory provisions.
Mr. Atul Shah (DIN: 00004528) was appointed as a Non- Executive Director liable toretire by rotation at the 32nd Annual General Meeting held on 25thSeptember 2017.
In terms of the Articles of Association of the Company and the Companies Act 2013 Mr.Arvind M. Kapoor (DIN: 00002704) Director of the Company is liable to retire by rotationat the ensuing Annual General Meeting of the company and being eligible offers himselffor reappointment.
Mr. Kapoor is M.S. (Polymer Engg.) USA and B.Tech. IIT - Mumbai and has over 38 yearsof Industrial and Managerial experience.
The Board considers that his continued association would be of immense benefit to theCompany and it is desirable to continue to avail services of Mr. Kapoor as non-executiveDirector. Accordingly the Board of Directors recommends his reappointment as Director ofthe Company.
Mr. Nakul Kumar (DIN: 00262802) Independent Director vide his letter dated 24thMay 2017 submitted his resignation as Director from the Board. The Directors place onrecord their sincere appreciation of his contribution during his tenure.
All the appointments of Directors of the Company are in compliance with the provisionsof Section 164 of the Companies Act 2013.
All Independent directors have given the declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and clause16(b) of the SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015.
The relevant details of the above Directors are given in the Corporate GovernanceReport attached herewith.
ANNUAL EVALUATION OF THE BOARD
The Independent Directors during their separate meeting held on 8thFebruary 2018 and the Board in its meeting held on 12th February 2018 conducted aFormal Evaluation of the performance of the Chairman Managing Director Non-ExecutiveDirector Independent Directors the Board as a whole and also that of its Committees inaccordance with the requirements of Sec. 134(3)(p) of the Companies Act 2013 and as perSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The manner in which formal annual evaluation of the performance of the Board itsCommittees and of individual directors has been made is summarized below:
1. Nomination and Remuneration Committee of the Board had prepared and sent through itsChairman draft parameterized feedback forms for evaluation of the Board IndependentDirectors Managing Director Non-Executive Director and Chairman.
2. Independent Directors at a meeting without anyone from the non-independent directorsand management present considered/evaluated the Board's performance performance of theChairman and other nonindependent Directors.
3. The Board subsequently evaluated performance of the Board the Committees andIndependent Directors (without participation of the concerned director).
NO. OF MEETINGS OF THE BOARD
The details of the number of meetings of the Board held during the financial year2017-18 forms part of the Corporate Governance Report.
The details on the Audit Committee and its meetings during the financial year 2017-18forms part of the Corporate Governance Report.
CORPORATE GOVERNANCE REPORT
As per SEBI Listing Regulations 2015 the Corporate Governance Report with theAuditors' Certificate thereon are attached hereto and form part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Pursuant to the SEBI Listing Regulations 2015 the Management Discussion and Analysisis attached hereto and forms part of this Report.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the company and its future operations.
During the year the Company has not accepted deposits from the Shareholders andothers and has complied with the provisions of Section 73 of the Companies Act 2013 andthe Rules made thereunder.
DIRECTORS' RESPONSIBILITY STATEMENT U/S 134(5) OF THE COMPANIES ACT 2013
Pursuant to the provisions of Section 134(5) of Companies Act 2013 as amended withrespect to the Directors' Responsibility Statement it is hereby confirmed that:
1) In the preparation of the accounts for the financial year ended 31stMarch 2018 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;
2) The Directors have 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 as at 31st March 2018 and ofthe profit and loss of the Company for the year ended 31st March 2018;
3) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
4) The Directors have prepared the annual accounts for the financial year ended 31stMarch 2018 on a going concern basis.
5) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
6) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
REPORTING OF FRAUDS
Pursuant to the provisions of Section 134(3)(ca) of Companies Act 2013 it is herebyconfirmed that during the year 2017-18 there have been no frauds reported by the auditors.
M/s Jayesh Dadia & Associates LLP Chartered Accountants (Registration No.:121142W) were appointed as Statutory Auditors at the 32nd Annual GeneralMeeting till the conclusion of 37th Annual General Meeting of the Company(subject to ratification of the appointment by the members at every AGM).
As required under the provisions of Section 139(1) of the Act the Company has receiveda written consent from M/s. Jayesh Dadia & Associates LLP Chartered Accountants fortheir appointment and a Certificate to the effect that their re-appointment if madewould be in accordance with the Act and the Rules framed thereunder and that they satisfythe criteria provided in Section 141 of the Act. Your Board recommends ratification oftheir appointment as the Statutory Auditors at the Annual General Meeting.
The Auditors opinion given in the Audit report of M/s. Jayesh Dadia & AssociatesLLP is unmodified and there are no qualifications/reservations or adverse remarks in thereport. Further the observations and comments given in the Auditors Report read togetherwith the notes to the accounts are self-explanatory and hence do not call for any furtherexplanation.
SECRETARIAL AUDIT REPORT
As per requirement of the Companies Act 2013 and Companies (Appointment andremuneration of Managerial Personnel) Rules 2014 the Company had appointed Mr. DineshKumar Deora Practicing Company Secretary COP 4119) as the Secretarial Auditor for FY2017-2018 whose Secretarial Audit Report in Form MR-3 dated 15th May 2018 isattached separately to this report.
Pursuant to the allotment of OCPS/RPS to the Non-Resident shareholders of RishiroopRubber (International) Limited as per the Scheme terms the Company intimated RBI as perthe extant FEMA regulations. RBI advised that keeping in view Reg. 2(ii) and 7(2) ofForeign Exchange Management (Transfer or issue of Securities by Person resident outsideIndia) Regulations 2000 it would be necessary to make a compounding application to RBIin respect of the allotment of optionally convertible instrument(s) to non-residents. Asdirected by RBI a compounding application was made which was approved by RBI CompoundingAuthority on payment of the compounding fees.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013. The details of the investments made by Company aregiven in the Notes to the financial statements. PARTICULARS OF CONTRACTS OR ARRANGEMENTSWITH RELATED PARTIES
During the financial year your Company entered into related party transactions whichwere on arm's length basis and in the ordinary course of business. There are no materialtransactions with any related party as defined under Section 188 of the Act read with theCompanies (Meeting of Board and its Powers) Rules 2014. All related party transactionshave been approved by the Audit Committee of your Company.
Details of the related party disclosures and transactions are given in Note no. 35 tothe financial statements. Since the related party transactions are on arm's length andthere are no material contracts arrangement or transactions Form AOC-2 is not annexed tothis Report.
POLICY ON RELATED PARTY TRANSACTIONS OF THE COMPANY
The policy on Related Party Transactions as approved by the Board is accessible on theCompany website viz. http://www.rishiroop.in/investors/corporate-governance/policies/
The Company is exposed to inherent uncertainties owing to the sectors in which itoperates. The Company's Risk Management processes focus on ensuring that these risks areidentified on a timely basis and addressed.
The Company has a policy on Risk Management which is accessible on the Companywebsite:
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS
Your Company has an adequate system of internal control commensurate with the size andthe nature of its business which ensures that transactions are recorded authorized andreported correctly apart from safeguarding its assets against loss from wastageunauthorized use and removal.
The internal control system is supplemented by documented policies guidelines andprocedures. The Company's internal auditors continuously monitors the effectiveness of theinternal controls with a view to provide to the Audit Committee and the Board of Directorsan independent objective and reasonable assurance of the adequacy of the organization'sinternal controls and risk management procedures. The Internal Auditor submits detailedreports on quarterly basis to the Audit Committee and management. The Audit Committeereviews these reports with the executive management with a view to provide oversight ofthe internal control system.
Your Company in compliance with the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 has framed and put intoeffect several policies on important matters such as Nomination and Remuneration ofdirectors and KMP materiality of events/information preservation of documents/archivalpolicy etc. which provide robust guidance to the management in dealing with such mattersto support internal control. Your Company reviews its policies guidelines and proceduresof internal control on an ongoing basis in view of the ever-changing business environment.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMININGQUALIFICATIONS POSITIVE ATTRIBUTES INDEPENDENCE OF A DIRECTOR KEY MANAGERIAL PERSONNELAND OTHER EMPLOYEES
The Board shall have minimum 3 and maximum 15 directors unless otherwise approved. Noperson of age less than 21 years shall be appointed as a director on the Board. TheCompany shall have such persons on the Board who complies with the requirements of theCompanies Act 2013 Provisions of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Memorandum of Association and Articles of Association of the Companyand all other statutory provisions and guidelines as may be applicable from time to time.Composition of the Board shall be in compliance with the requirements of CompaniesAct/SEBI Regulations. At present except for the Managing Director no other directors arepaid remuneration but are paid only sitting fees. The Managing Director is paidremuneration as approved by the Shareholders but is not paid any sitting fees. ManagingDirector Company Secretary and Chief Financial Officer shall be the Key ManagerialPersonnel (KMP) of the Company. All persons who are Directors/KMPs members of SeniorManagement and all other employees shall abide by the
Code of Conduct. Directors/KMPs shall not acquire any disqualification and shall bepersons of sound integrity and honesty apart from knowledge experience etc. in theirrespective fields.
A copy of the policy for remuneration to non executive and independent directors isavailable on the website of the Company i.e www.rishiroop.in on the weblink :http://www.rishiroop.in/investors/corporate-governance/policies/
PARTICULARS OF EMPLOYEES
Pursuant to Section 197(12) of the Companies Act 2013 and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the relevant detailsare given below:
|a) The ratio of the remuneration of Managing Director to the median employee's remuneration for the financial year ||17.40 |
|b) The percentage increase in remuneration of Managing director Chief Financial Officer Company Secretary in the financial year ||MD - 7.63 % CFO - 11.80 % CS - 15.90 % |
|c) The percentage increase in the median remuneration of employees in the financial year ||10.91 % |
|d) The number of permanent employees on the rolls of Company ||40 |
|e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration ||Average increase in remuneration of all employees excluding KMP - 9.23 % Average increase in the remuneration of KMP's - 11.78 % |
|f) Affirmation that the remuneration is as per the remuneration policy of the Company ||Yes |
During the financial year no employee received remuneration in excess of theprescribed limits as per Section 197(12) of Companies Act 2013 read with Rule 5(2) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required under Section 134(3) (m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 the particulars relating to conservation of energytechnology absorption and foreign exchange earnings and outgo are given in Annexure A tothis Report.
ESTABLISHMENT OF VIGIL MECHANISM
The Company has in place a vigil mechanism pursuant to which a Whistle Blower Policyhas been in force. The policy was approved on 13th February 2015. This Policyinter alia provides a direct access to a Whistle Blower to the Chairman of Audit Committeeon his dedicated email-ID : firstname.lastname@example.org. The Whistle Blower Policycovering all employees and directors is hosted on the Company's website at URL -http://www.rishiroop.in/investors/corporate-governance/policies
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a Sexual Harassment Prevention 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 contractual temporary trainees) are covered under thispolicy. The following is a summary of sexual harassment complaints received and disposedoff during the year:
No. of complaints received : Nil
No. of complaints disposed : Nil
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Details of the familiarization program for Independent Directors is accessible on theCompany website at http://www.rishiroop.in/investors/corporate-governance/policies
CORPORATE SOCIAL RESONSIBILITY (CSR)
Pursuant to Section 135 of the Companies Act 2013 and the relevant Rules the Boardreconstituted the CSR Committee under the Chairmanship of Mr. Arvind Mahendra Kapoor. Theother members of the Committee are Mr. Aditya Arvind Kapoor and Mr. Hemant Vakil. Adetailed CSR policy has also been framed which is placed on the company's website:http://www.rishiroop.in/investors/corporate-governance/policies/
The report on CSR as required under Section 135 of the Companies Act 2013 is given inAnnexure B to this Report.
An extract of the Annual Return i.e. Form No. MGT-9 as of 31st March 2018pursuant to the sub-Section (3) of Section 92 of the Companies Act 2013 is given inAnnexure C to this Report. A copy of the Annual Return is also available on the website ofthe Company i.e www.rishiroop.in on the weblink - http://www.rishiroop.in/investors/corporate-governance/downloads/
The Board of Directors express their appreciation for the sincere co-operation andassistance of Government Authorities Bankers Customers Suppliers Business Associatesand the efforts put in by all the employees of the Company. The Board of Directorsexpresses their gratitude to all our valued shareholders for their confidence andcontinued support to the Company.
| ||For and on behalf of the Board of Directors |
| ||Arvind Mahendra Kapoor |
|Place: Mumbai ||Chairman |
|Date: 23.05.2018 ||DIN : 00002704 |
|Registered Office: || |
|W-75(A) & W-76(A) MIDC Industrial Area || |
|Satpur Nasik - 422007 || |