REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS FOR THE YEAR ENDED MARCH 31 2019.
Your Directors are pleased to present the Company's 35th Annual Report andthe Company's audited financial statements for the financial year ended March 31 2019.
The Company's financial performance for the year ended March 31 2019 is summarizedbelow:
| ||STANDALONE |
| ||2018-19 ||2017-18 |
| ||lacs ||lacs |
|Revenue from operation ||5774.36 ||5757.00 |
|Other Income ||324.57 ||468.46 |
|Total Revenue ||5844.70 ||5704.01 |
|Profit before Depreciation and Tax ||- ||- |
|Depreciation and amortization expenses ||135.31 ||166.19 |
|Profit Before Extraordinary items and Tax ||118.93 ||355.25 |
|Extraordinary Items ||- ||88.25 |
|Tax Expense ||- ||- |
|(Current Tax) ||30.00 ||54.00 |
|(Deferred Tax) ||0.26 ||9.06 |
|Income Tax Related to Previous Year ||30.26 || |
|Profit After Tax ||58.41 ||203.94 |
|Other Comprehensive Income ||- ||2.36 |
|Total Comprehensive Income for the Year ||58.41 ||206.3 |
Financial Performance Review and Analysis
The Sales Turnover for the year under review was Rs. 5774.36 Lacs as compared to Rs.5757.00 Lacs for the previous year. The company was able to earn a profit after tax forthe year under review of Rs. 58.44 Lacs
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 being recommended for this year.
The Company paid-up Equity Share Capital continues to stand at 88561000 as on March 312019.
During the year the Company has not issued any shares or convertible securities. TheCompany does not have any Scheme for issue of shares including sweat equity shares to theemployees or directors of the Company.
Material changes affecting the Company
There have been no material changes and commitments affecting the financial position ofthe Company between the end of the financial year and the date of this report. There hasbeen no change in the nature of the business of the Company.
CORPORATE GOVERNANCE AND MANAGEMENT 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
Subsidiaries Joint Ventures and Associate Companies.
|S.no || |
% of Shareholding
|1. ||NIL ||- |
|2. ||NIL ||- |
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 followed 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 31st March2019 the applicable accounting standards had been followed along with the properexplanation relating to material departures;
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 the annual 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 adequate and 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 Managerial Personnel
The Board of your Company is duly constituted in accordance with the requirements ofthe Companies Act 2013 Read with the Listing Regulations.
Pursuant to Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) (Amendment) Regulations 2018 consent of the Members by way of SpecialResolution is required for continuation of a Non-Executive and Independent Directorsbeyond the age of 75 years w.e.f. April 1 2019.
Accordingly pursuant to the provisions of the Listing Regulations and based on therecommendation of the Nomination and Remuneration Committee the continuation ofdirectorship Mr. ABDUL KALAM (DIN :01869712) Director of the Company to continue to holdoffice of Independent Director after attaining the age of 75 years which Starts onFebruary 7 2019 up to the conclusion of the Annual General Meeting to be held in calendaryear 2024 is placed for the approval of the Members through a Special Resolution at the35th Annual General Meeting.
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 Listing Regulations.
Further in accordance with the provisions of Companies Act 2013 and the Articles ofAssociation of the Company Ms. Priya Rungta (DIN: 00234715) Director of the Companyretires by rotation at the ensuing Annual General Meeting and being eligible has offeredhimself for re-election. The Board of Directors on the recommendation of the HumanResources Nomination and Remuneration Committee has recommended their re-appointment.
Shri Ramesh Behari Mathur has ceased to be a Director of the Company w.e.f. September13 2018. The Board places on record its appreciation towards valuable contribution madeby Shri Ramesh Behari Mathur during his tenure as a Director of the Company
During the year under review Mr. Nitin Dhawan the Chief Financial Officer tendered hisresignation from the position of CFO w.e.f. 20th August 2018.
Thereafter the Board of Directors in their meeting held on 20th August 2018has appointed Mr. Vikas Kumar Gupta as Chief financial officer of the Company.
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 attendance of Directors at Board and committeemeetings acquaintance with business communicating inter-se board members effectiveparticipation domain knowledge compliance 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 the Board and feedback was given to Directors.
Disclosure as Per Sexual Harassment OF Women at Workplace (Prevention Prohibition andRedressal) Act 2013
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. Further duringthe year under review there was no case filed pursuant to the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013.
Contracts or Arrangements with Related Parties
RELATED PARTY TRANSACTIONS
During the financial year 2018-19 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 (including formaterial 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-I. 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 related party 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 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.
Auditors and Auditors' Report
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 conclusion of 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 General Meeting.
The Statutory Auditor has confirmed their eligibility and submitted the certificate inwriting that they are not disqualified to hold the office of the statutory auditor.Further in terms of the Listing Regulations the Auditors have confirmed that they hold avalid certificate issued by the Peer Review Board of the ICAI.
The Auditors' Report to the Members on the Accounts of the Company for the year endedMarch 31 2019 is a part of the Annual Report. The said Audit Report does not contain anyqualification reservation or adverse remark. During the year 2019 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 theCompany to carry out an audit of the cost records of the Company for the financial year2018-2019. They being eligible and willing to be re-appointed as Cost Auditors wereappointed as the Cost Auditors of the Company for the financial year 2019-2020 by theBoard of Directors upon the recommendation of the Audit Committee.
The resolution seeking ratification of the remuneration to the said cost auditors forthe financial year 2019-2020 is set out in the Notice calling the 35th Annual GeneralMeeting 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 2018-2019. TheSecretarial Auditor's report to the members does not contain any qualificationreservation and adverse remarks and the same is annexed to this report as AnnexureB.
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 theeffectiveness of internal financial controls is obtained through management reviewscontrol self-assessment continuous monitoring by functional experts as well as testing ofthe internal financial control systems by the internal auditors during the course of theiraudits. We believe that these systems provide reasonable assurance that our internalfinancial controls are designed effectively and are operating as 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 your company.
STOCK EXCHANGE LISTING
Presently the shares of the Company are listed on the Bombay Stock Exchange (BSE).
Disclosures Meetings of the Board
Seven meetings of the Board of Directors were held during the year. The particulars ofmeetings held and attended by each Director are detailed in the Corporate GovernanceReport which forms part of this Report.
The Audit Committee comprises Independent Directors namely Shri Sheo Kumar Poddar(Chairman) Shri Devesh Poddar and Shri Devanand Mishra and Shri Tarun Kumar Megotia.During the year all the recommendations made by the Audit Committee were accepted by theBoard.
Rungta Irrigation Limited has established a robust Vigil Mechanism and a Whistle-blowerpolicy in accordance with provisions of the Act and Listing Regulations. The VigilMechanism is supervised by an Ethics & Compliance Task Force' comprising amember of the Board as the Chairperson and senior executives as members. Protecteddisclosures can be made by a whistle-blower through an e-mail or a dedicated telephoneline or a letter to the Task Force or to the Chairman of the Audit Committee. The VigilMechanism and whistle-blower policy is put on the Company's website and 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 providedalong with 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 4 and 5 to the standalone financial statement).
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy technology absorption foreignexchange earnings and outgo as required to be disclosed under the Act are provided inAnnexure H to this Report.
Extract of Annual Return
The Extracts of the annual return in Form MGT 9 as required under Section 92(3) of theCompanies Act 2013 and Rule 12 of the Companies (Management and Administration) Rules2014 has been placed on the website of the Company and can be accessed at the linkhttps://rungtairrigation.com/mgt-9/
Extract of Annual Return (MGT-9) of the Company is annexed herewith marked asAnnexure F to this Report.
Particulars of Employees and related disclosures
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 median employees'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 || |
|1 ||Shri Mahabir Prasad Rungta ||Chairman Cum Managing Director ||6.50 |
|2 ||Shri Krishna Murthy Nagarur ||Joint Managing Director ||20.75 |
|3 ||Smt. Priya Rungta ||Executive Director ||7.43 |
|4 ||Shri Tarun Kumar Megotia ||Whole Time Director ||4.71 |
|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 |
2. The percentage increase in remuneration 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 ||NA |
|2. ||Krishna Murthy Nagarur ||Joint Managing Director ||NA |
|3. ||Priya Rungta ||Executive Director ||11.11% |
|4. ||Tarun Kumar Megotia ||Executive Director ||NA |
|5. ||Pooja Juneja ||Company Secretary ||NA |
1. The percentage increase in the median remuneration of employees in the financialyear is 8.04%.
2. The number of permanent employees on the rolls of the company were 168 as on 31stMarch 2019.
3. It is hereby affirmed that the remuneration paid during financial year 2018-19 asper the remuneration policy of the company.
Your Directors state that no disclosure or reporting is required in respect of thefollowing matters as there were no transactions on these items during the year underreview: Details relating to deposits covered under Chapter V of the Act. No significantand material orders have been passed by the Regulators or Courts or Tribunals impactingthe going concern status of the Company and its operations in the future.
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.
For and on behalf of the Board of Directors
Mahabir Prasad Rungta
Chairman Cum Managing Director
Delhi August 26 2019