REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS FOR THE YEAR ENDED MARCH 31 2020.
Your Directors are pleased to present the Company's 36th Annual Report andthe Company's audited financial statements for the financial year ended March 31 2020.
The Company's financial performancefor the year ended March 31 2020 is summarizedbelow:
|Particulars ||STANDALONE |
| ||2019-20 ||2018-19 |
| ||Rs. in lakhs ||Rs. in lakhs |
|Revenue from operation ||4514.30 ||5774.36 |
|Other Income ||652.23 ||324.57 |
|Total Revenue ||5166.54 ||6098.93 |
|Profit before Depreciation and Tax ||- ||- |
|Depreciation and amortization expenses ||103.81 ||135.31 |
|Profit Before Extraordinary items and Tax ||100.25 ||118.93 |
|Extraordinary Items ||- ||- |
|Tax Expense ||- ||- |
|(Current Tax) ||(32.00) ||(30.00) |
|(Deferred Tax) ||16.97 ||(0.26) |
|Income Tax Related to Previous Year ||(2.46) ||30.26 |
|Profit After Tax ||82.76 ||58.41 |
|Other Comprehensive Income ||(6.90) ||- |
|Total Comprehensive Income for the Year ||75.86 ||58.41 |
OPERATIONS REVIEW AND ANALYSIS
The Sales Turnover for the year under review was Rs. 4514.30Rs. in lakhs as compared toRs. 5774.36Rs. in lakhs for the previous year. The company was ableto earn a profit aftertax for the year under review of Rs. 75.86Rs. in lakhs.
The Board of Directors of your Company has decided to Retain and Plough Back the Profitinto the Business of the Company thus no dividend is beingrecommended for this year.
TRANSFER TO RESERVES
During the financial year there was no amount proposed to be transferred to theReserves.
The Company paid-up Equity Share Capital continues to stand at 88561000 as on March31 2020. During the year the Company has not issued anyshares or convertible securities.The Company does nothave any Scheme for issue of shares including sweat equityshares tothe employees or directors of the Company.
MATERIAL CHANGES AFFECTING THECOMPANY
Except the impact of COVID-19 there have been no material changes and commitmentsaffecting the financial position of the Company between theend of the financial year andthe date of this report.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There has been no change in the nature of the business of the Company during the yearunderreview.
SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS
No significant material orders have been passed during the year under review by theregulators or courts or tribunals impacting the going concern status and Company'soperations in future.
CORPORATE GOVERNANCE ANDMANAGEMENT DISCUSSION & ANALYSIS REPORT
A separate section on corporate governance practices followed by the Company togetherwith a certificate from the auditors confirming its compliance forms a part of this AnnualReport as per SEBI Regulations. Further as per Regulation 34 read with Schedule V of theListing Regulations a Management Discussion and Analysis report is attached as AnnexureA & Annexure B.
SUBSIDIARIES JOINT VENTURES ANDASSOCIATE COMPANIES
There are no present subsidiaries joint ventures and associate companies.
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings'respectivelyhave been duly complied by the Company.
DIRECTORS RESPONSIBILITY STATEMENT
The Board acknowledges the responsibility for ensuring compliance with the provisionsof clause (c) of subsection (3) of Section 134 of the Companies Act 2013 and Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 and state that:
a) in the preparation of the annual accounts for the year ended March 31 2020 theapplicable accounting standards had been followed along with the proper explanationrelating to materialdepartures;
b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;
c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) the directors had prepared theannual accounts on a going concern basis;
e) the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequateand were operatingeffectively; and
f) the directors had devised the proper systems to ensure compliance with theprovisions of all the applicable laws and that such systems were adequate and operatingeffectively.
The Company is committed to maintain the highest standards of Corporate Governance andadhere to the Corporate Governance requirements set out by the Securities and ExchangeBoard of India (SEBI). The Company has also implemented several best governance practices.The report on Corporate Governance as stipulated under the Listing Regulations forms anintegral part of this Report. The requisite certificate from the Auditors of the Companyconfirming compliance with the conditions of Corporate Governance is attached to thereport on Corporate Governance.
DIRECTORS AND KEY MANAGERIALPERSONNEL
The Board of your Company is duly constituted in accordance with the requirements ofthe Companies Act 2013 read with SEBI Listing Regulations.
During the year under review Mrs. Priya Rungta (DIN: 00234715) ceased to be a Directorof the Company w.e.f October 11 2019. The Board places on record its appreciation towardsvaluable contribution made by Mrs. Priya Rungta during her tenure as a Director of theCompany.
During the year on the recommendation of Nomination and Remuneration Committee theBoard appointed Ms. Shruti Rungta (DIN: 00229045) as itsExecutive Director w.e.f October15 2019.
During the year Shri Sheo Kumar Poddar (DIN: 00992376) Non-Executive and IndependentDirectors of the Company has ceased from the office of Independent Director with effectfrom June 18 2019 due to his sad demise.
During the year Mr.Sanjiv Rao (DIN: 08452534) Independent Director ceased to beIndependent Director with effect from October 30 2019. The Board places on record deepsense of gratitude and appreciation for his immense contributions.
Further the Company has received declarations from all the Independent Directorsstating that they meet the criteria of independence as given under Section 149 of theCompanies Act 2013 and the relevant provisions of the SEBI Listing Regulations.
During the year under review Mr. Vikas Kumar Gupta Chief Financial Officer tenderedhis resignation from the position of CFO w.e.f May 3 2019. In his place Mr. AkhileshSaxena was appointed as the Chief Financial Officer of the Company w.e.f from May 6 2019.On July 24 2019 Mr. Akhilesh Saxena Chief FinancialOfficer stepped down from hisposition and Mr. Sachin was appointed as new Chief Financial Officer of the Company w.e.fAugust 13 2019.
In place of Ms. Pooja Juneja Company Secretary of the Company who resigned w.e.fNovember 18 2019 Mr. Prateek Sharma was appointed as the Company Secretary andCompliance Officer of the Company w.e.f February 7 2020.
DECLARATION BY INDEPENDENTDIRECTORS
In terms with Section 149 (7) of the Companies Act 2013 Independent Directors of theCompany have submitted declarations that they meet the criteria of Independence. TheIndependent Directors have also complied with the Code for Independent Directors as perSchedule IV of the Companies Act 2013. Out of all our Independent Directors twoIndependent Directors namely Mr. Devesh Poddar and Mr. Abdul Kalam are registered on theIndependent Directors Databank.
The Company has devised a Policy for performance evaluation of the Board Committeesand other individual Directors (including Independent Directors) which include criteriafor performance evaluation of Non-executive Directors and Executive Directors. Theevaluation process inter alia considers the attendanceof Directors at Board and committeemeetings acquaintance with business communicating inter-se board members effectiveparticipation domain knowledgecompliance with code of conduct vision and strategy.
The Board carried out an annual performance evaluation of the Board CommitteesIndividual Directors and the Chairperson. The Chairman of the respective Committees sharedthe report on evaluation with the respective Committee members. The performance of eachCommittee was evaluated by the Board based on the report on evaluation received fromrespective Committees. The report on performance evaluation of the Individual Directorswas reviewed by the Chairman of theBoard and feedback was given to Directors.
The Board has on the recommendation of the Nomination & Remuneration Committeelaiddown a Nomination & Remuneration Policy for selection and appointment of theDirectors Key Managerial Personnel and Senior Management and their remuneration. TheRemuneration Policy has been given in Corporate Governance Report forming part of AnnualReport and it is also available on the website of the Company and the web link ishttp://www.rungtairrigation.in/investor-information/download-info/remuneration-policy/.
During the year under review the Company did not accept any Deposits given underChapter V of Companies Act 2013.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
Your Company has in place a formal policy for the prevention of sexual harassment ofits employees at the workplace. The Company is in compliance with the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and has adopted apolicy on Sexual Harassment to prohibit prevent or deter any acts of sexual harassment atworkplace and to provide the procedure for the redressal of complaints pertaining tosexual harassment thereby providing a safe and healthy work environment. The Company hascomplied with provisions relating to the constitution of Internal Committee under theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.Further during the year under review there was no case filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year 2019-20 there is no materially significant related partytransaction with the Company's Promoters Directors the management or their relativeswhich may have potential conflict with the interest of the Company at large. The Companyhas also formulated a policy on dealing with the Related Party Transactions (includingmaterial related party transactions) and necessary approval of the Audit Committee andBoard of Directors were taken wherever required in accordance with the Policy.
The details of such policies for dealing with all related party transactions aredisseminated on the website of the Company www.rungtairrigation.in
In compliance with section 188(1) of the Companies Act 2013 AOC-2 enclosed asAnnexure-E. Further details of Related Party Transactions as required to be disclosed asper Indian Accounting Standard 24 Related Party Disclosures specified undersection 133 of the Companies Act 2013 are given in the Notes to the Financial Statements.
Justification for entering into relatedparty transactions
All Related Party Transactions were placed before the Audit Committee for review andapproval. Related Party Transactions were entered at Arm's Length basis. All Related PartyTransactions are subjected to independent review w.r.t compliance with the requirements ofRelated Party Transactions under the Companies Act 2013 and SEBI Listing Regulations.
Furtherance to this the remuneration paid to Mr. Mahabir Prasad Rungta Chairman cumManaging Director and his relatives and the sitting fee payment to non-executive directorsfor each Board/Committee meeting(s) attended was paid to Independent director shown underRelated party disclosures segment under Notes to the account of Balance Sheetin terms of Indian Accounting Standard 24 issued by The Institute of Chartered Accountantsof India.
Pursuant to provisions of Section 139 of the Companies Act 2013 read with theCompanies (Audit and Auditors) Rules 2014 M/s. Mamraj & Co. Chartered AccountantsNew Delhi were appointed as Statutory Auditors for a term of five years at the AnnualGeneral Meeting held on September 26 2017 to hold office from 33rd Annual GeneralMeeting up to the conclusionof the 38th Annual General Meeting of the Company.
The requirement of seeking ratification of the members for the continuance of theStatutory Auditor's appointment has been withdrawn consequent upon the changes made by theCompanies(Amendment) Act 2017 w.e.f. May 7 2018. Hence the resolution seekingratification of the members for their appointment is not being placed at the ensuingAnnual GeneralMeeting.
The Statutory Auditor has confirmed their eligibility and submitted the certificate inwriting that they are not disqualified to hold the office of thestatutory auditor. Furtherin terms of the SEBI ListingRegulations the Auditors have confirmed that they hold avalidcertificate issued by the Peer Review Board of the ICAI.
The Auditors' Report to the Memberson the accounts of the Company for the year endedMarch 31 2020 is a part of the Annual Report. The said Audit Report does not contain anyqualification reservation or adverse remark. During the year 2020 the Auditors had notreported any matter under Section 143(12) of the Act therefore no detail is required tobe disclosed under Section 134(3) (ca) of the Act.
M/s. S. Shekhar & Co. Cost Accountants was appointed as the Cost Auditors of theCompanyto carry out an audit of the cost records of the Company for the financial year2019-2020. They being eligible and willing to be reappointed as Cost Auditors wereappointed as the Cost Auditors of the Company for the financial year 2020-2021 by theBoard of Directors upon therecommendation of the Audit Committee.
The resolution seeking ratification of the remuneration to the said cost auditors forthe financial year 2020-21 is set out in the Notice calling the 36th AnnualGeneral Meeting of the Company.
Mr. Ajit Mishra Practising Company Secretary was appointed as the Secretarial Auditorof the Company to undertake the Secretarial Audit for the financial year 2019-2020. TheSecretarial Auditor's report to the members does not contain any qualificationreservation and adverse remarks and the same is annexed to this report as AnnexureG.
INTERNAL FINANCIAL CONTROLS
Internal Financial Controls are an integrated part of the risk management processaddressing financial and financial reporting risks. The internal financial controls havebeen documented digitized and embedded in the business processes.
An assurance of the effectiveness of internal financial controls is obtained throughmanagement reviews control self-assessment continuous monitoring by functional expertsas well as testing of the internal financial control systems by the internal auditorsduring the course of their audits. We believe that these systems provide reasonableassurance that our internal financial controls are designed effectively and are operatingas intended.
RISK MANAGEMENT POLICY
The Company does not have any Risk Management Policy as the elements of riskthreatening the Company's existence are very nominal.
CORPORATE SOCIAL RESPONSIBILITY
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable to yourcompany.
STOCK EXCHANGE LISTING
Presently the shares of the Companyare listed on the Bombay Stock Exchange (BSE).
Meetings of the Board
Six meetings of the Board of Directors were held during the year under review. Theparticulars of meetings held and attended by each Director aredetailed in the CorporateGovernance Report which formspart of this Report.
The Audit Committee comprises Directors (including Independent Directors) namely ShriDevesh Poddar (Chairman) and Shri Abdul Kalam and Shri Tarun Kumar Megotia. During theyear all the recommendations made by the Audit Committee were accepted by the Board.
Rungta Irrigation Limited has established a robust Vigil Mechanism and a Whistle-blowerpolicy in accordance with provisions of the Act and SEBI Listing Regulations. The VigilMechanism is supervised by an Ethics & Compliance Task Force' comprising amember of the Board as the Chairperson and senior executives asmembers.
Protected disclosures can be made by a whistle-blower through an e-mail or adedicatedtelephone line or a letter to the Task Force or to the Chairman of the AuditCommittee. The Vigil Mechanism and whistle-blower policy is put on the Company's websiteand can be accessed athttp://www.rungtairrigation.in/investor-information/download-info/whistle-blower-policy
Particulars of Loans given Investments made Guarantees given and Securities provided
Particulars of loans given Investments made guarantees given and securities providedalongwith the purpose for which the loan or guarantee or security is proposed to beutilized by the recipient are provided in the standalone financial statement (Please referto Note 3 and 4 to the standalone financial statement).
Conservation of Energy TechnologyAbsorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy technology absorption foreignexchangeearnings and outgo as required to be disclosed under the Act are provided inAnnexure H to this Report.
In terms of the Section 148 of the Companies Act 2013 read with Rule 8 of theCompanies(Accounts) Rules 2014 the cost audit is applicable for following businessessuch as PVC Pipes Drip and Sprinkler Irrigation systems. The accounts and records for theabove applicable businesses are made and maintained by the Company as specified by theCentral Government under sub-section (1) of Section 148 of the Companies Act 2013.
Extract of Annual Return
The Extracts of the annual return in Form MGT 9 as required under Section 92(3) of theAct 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014 hasbeen placed on the website of the Company and can be accessed at thelinkhttps://rungtairrigation.in.
Extract of Annual Return (MGT-9) of the Company is annexed herewith marked asAnnexureF to this Report.
Particulars of Employees and relateddisclosures
Pursuant to Section 197 (12) of the Companies Act 2013 read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2015 it isnecessary to disclose the ratio of remuneration of each director to the medianemployees'remuneration.
1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;
|S. No. Name ||Designation ||Ratio |
|1 Shri Mahabir Prasad Rungta ||Chairman Cum Managing Director ||5.64 |
|2 Shri Krishna Murthy Nagarur ||Joint Managing Director ||23.75 |
|3 Smt. Priya Rungta ||Executive Director ||4.26 |
|4 Shri Tarun Kumar Megotia ||Whole Time Director ||5.86 |
|5 Smt. Shruti Rungta ||Executive Director ||4.70 |
|5 Shri Devanand Mishra ||Independent Director ||NA |
|6 Shri Sheo Kumar Poddar ||Independent Director ||NA |
|7 Shri Abdul Kalam ||Independent Director ||NA |
|8 Shri Devesh Poddar ||Independent Director ||NA |
|9 Shri Vivek Agrawal ||Independent Director ||NA |
|10 Shri Sanjiv Rao ||Independent Director ||NA |
2. The percentage increase inremuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;
|S. No. Name of the Director/KMP ||Designation ||% increase in Remuneration |
|1. Mahabir Prasad Rungta ||Chairman Cum Managing Director ||(19.3%) |
|2. Krishna Murthy Nagarur ||Joint Managing Director ||3.4% |
|3. Priya Rungta ||Former Executive Director ||26.3% |
|4. Shruti Rungta ||Executive Director ||NA |
|5. Tarun Kumar Megotia ||Executive Director ||5.8% |
|6. Pooja Juneja ||Company Secretary ||NA |
|7. Prateek Sharma ||Chief Financial Officer ||NA |
|8. Vikas Kumar Gupta ||Chief Financial Officer ||NA |
|9. Akhilesh Saxena ||Chief Financial Officer ||NA |
|10. Sachin ||Chief Financial Officer ||NA |
1. The percentage increase in the median remuneration of employees in the financialyear is 7%.
2. The numbers of permanent employees on the rolls of the company were 60 as on March31 2020.
3. It is hereby affirmed that the remuneration paid during financial year 2019-2020asper the remuneration policy of the company.
Your Directors place on record their sincere thanks to bankers business associatesconsultants and various Government Authorities for their continued support extended toyour Company's activities during the year under review. The Board also places on recordtheir appreciation of the devoted services of the employees. Your Directors alsoacknowledges gratefully the shareholders for their support and confidence reposed on yourCompany.