BOARD'S REPORT To The members, 1.Your Directors present the "Twenty Eighth" Annual Report on the business and operations of the Company along with the audited standalone and consolidated financial statements for the year which ended on March 31, 2016. 2. Overview of Company's Financial Performance: The company's performance during the Financial Year 2015-16 on standalone and consolidated basis was as follows - A. On standalone basis: Revenue from operations for the Financial Year 2015-16 was at Rs.20823.17 Lacs (previous year Rs. 23999.78 Lacs). PBDIT from standalone activity of the company increased from Rs. 2167.66 Lacs from the previous year to Rs. 2588.20 Lacs this year. The Profit before tax is Rs. 1463.01 Lacs as against Rs. 956.47 Lacs in the previous year. Cash profit stood at Rs. 1770.51 against Rs. 1261.31 Lacs in the previous. B. Consolidated Revenue: The consolidated Revenue of company during the year was Rs. 28358.97 Lacs as compared to Rs. 27453.51 Lacs in the previous year. The consolidated Profit before tax increased to Rs. 2125.73 Lacs as against Rs. 489.54 Lacs in the previous year. The final profit after tax and minority interest stood at Rs. 1646.96 Lacs against Rs. 181.37 Lacs in previous year. There are no material changes and commitments affecting the financial position of your Company which have occurred between the end ofthe Financial Year 2015-16 and the date of this report. 3. Economic Scenario: India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). Amid global uncertainty, the Indian economy continued to restore its macroeconomic stability. India's GDP grew by 7.6% in 2015-16, making it one of the fastest growing major economies in the world. According to the Economic Survey 2015-16, the Indian economy will continue to grow more than 7 per cent in 2016-17, despite the uncertainties in the global market. The improvement in India's economic fundamentals has accelerated in the year 2015 with the combined impact of strong government reforms, RBI's inflation focus supported by benign global commodity prices. It has been forecasted that India will witness a GDP growth rate of 7.5 per cent in 2016, due to improved investor confidence, lower food prices and better policy reforms. The present Government is following the approach of 'Reform to Transform India' through far reaching structural reforms to foster strong and sustainable growth. Measures, inter alia, to enhance infrastructure investment, incorporation of Bankruptcy law, improve business climate and significant tax reforms such as GST are being pushed forward. Initiatives such as Make-in-India, Startup India - Standup India etc. are focused at encouraging innovations, entrepreneurshipand job creation. 4. Prospects and Outlook: At the beginning of Financial Year 2015-16, India was believed to bein with a strong political mandate and a favorable external environment. Expectations were running high on major reforms which were expected to push the Indian economy on an overdrive. While no major reforms got implemented during the year, incremental improvements have helped the economy. As we begin the Financial Year 2016-17, the overall outlook remains uncertain. Government's focus on infrastructure development, investment in highways, and implementation ofGST will give boost to the industry. Looking at the positive economic outlook for the current year, your company is making efforts to increase the sales. We are continuously working to strengthen relationship with customers in India, Thailand and other export destinations. The outlook of business in Thailand is positive because of major customer approvals and winning customer confidence. We are expecting a major improvement in Thailand business in the current year as well. 5. Dividend: Your Directors have recommended higher dividend as compared to last year, ofRs. 1.20 per equity share of Rs. 10/- each i.e. @12% for the financial year ended 31st March, 2016. The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting to be held on 26th July, 2016. The total dividend appropriation for the current year is Rs. 62.85 Lacs (inclusive of corporate dividend tax of Rs. 10.63 Lacs). 6. Transfer to Reserves: The Company proposes to transfer Rs. 700.00 Lacs to the General Reserve out of the amount available for appropriation and Rs. 3437.12 Lacs is proposed to be retained in the Profit and Loss Account. 7. Share Capital: There is no change in the share capital of the Company during the year ended on 31st March, 2016. 8. Subsidiary Companies: The company has two subsidiaries including one wholly owned subsidiary in Thailand. There is no associate company within the meaning of Section 2(6) of the Companies Act, 2013("Act"). There has been no change in the nature of the business of the subsidiaries. Pursuant to Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financial statements of the company. Pursuant to section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of the subsidiaries, are available on the website of the company (www.rajratan.co.in ). Performance of the subsidiaries during the year, was below – a) Rajratan Thai Wire Co. Limited, Thailand: The continued efforts of Rajratan Thailand Team, the operations resulted in substantial profits during the Financial Year 2015-16. For the first time since inception, Rajratan Thailand made net profit. Rajratan, Thailand has recorded the growth of 37% in sales volume i.e. 17110.11 MT this year as compared to 12452.44 MT in previous year, on account of continued efforts. The Net revenue of the company during the year increased by 31°% from Rs. 7313 Lacs in the previous year to Rs. 9568 Lacs in this year. There is Profit of Rs. 7.15 Crore as against Loss of Rs. 4.29 Crore in the previous year. The cash profit earned is Rs. 10.70 Crores as against cash loss of Rs.74 Lacs in the previous year. b) Swaraj Technocrafts Pvt. Limited, Indore: Financial Year 2015-16 remained tough for Swaraj. Though the total revenue increased to Rs. 710.18 Lacs, Swaraj recorded loss of Rs. 60.12 Lacs against loss of Rs. 30.47 Lacs in last year. 9. Directors' Responsibility Statement: Pursuant to Section 134(5) of the Companies Act, 2013, the board of directors, to the best oftheir knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 10. Deposits: The Company has not accepted any fixed deposit from the public during the financial year which ended on 31st March, 2016 within the meaning of section 73 and 74 of the Companies Act, 2013 read with the relevant rules. 11. Listing: The shares of the Company are listed on the Bombay Stock Exchange Limited, and the Company is regular in the payment of the listing fees. There was no suspension of trading during the year under review. The Company has made an application for listing in National Stock Exchange, Mumbai which is under consideration. The Securities and Exchange Board of India (SEBI) on September 2, 2015 issued SEBI (Listing Obligations and Disclosure Requirements) 2015 which were effective from December 1, 2015. Accordingly all listed companies were required to enter into Listing Agreement within six months from the effective date. The Company entered into Listing Agreement with BSE Limited during the specified period. 12. Conservation of Energy, Technology and Foreign Exchange Earnings and outgo: The particulars as prescribed under Section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts of Companies) Rules, 2014 are set out in an "Annexure-I" to this report. 13. Corporate Social Responsibility Your company is committed to the sustainable development, inclusive growth and bringing about a perceptible change in the lives of communities on the embedded tenets of trust, fairness and caring. The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in "Annexure- II" of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company. 14. Directors and key managerial personnel In accordance with the provisions of section 152 the Companies Act, 2013 and the Articles of Association of the company CA P.D. Nagar & CA Abhishek Dalmia shall retire by rotation at the ensuing AGM and being eligible offered themselves for re-appointment. The brief resume of the Directors and other related information has been detailed in the Notice convening the AGM of the Company. During the year, the nonexecutive directors of the Company had no pecuniary relationship or transactions with the Company. The Independent Directors of your Company shall hold office upto 25th August, 2019 and are not liable to retire by rotation. Mr. Sunil Chordia, Managing Director, who was re-appointed in the last AGM, and Mr. Shubham Jain, Company Secretary, are the Key Managerial Personnel of your Company in accordance with the provisions of Sections 2(51), 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force). However the Company has not appointed Chief Financial Officer ofthe Company. Mr. Deepesh Trivedi, who was appointed as Whole Time Director & COO of the company on January 21, 2008, had resigned from the Board w.e.f. October 30th, 2015. The Board of Directors recorded their appreciation for the services rendered by Mr. Deepesh Trivedi during his tenure. 15. Number of meetings of the board Four meetings of the board were held during the year. The details of the meetings of the Board of Directors and its committees, convened during the Financial Year 2015-16 are given in the corporate governance report, which forms part ofthis Annual Report. 16. Board evaluation In compliance with the Companies Act, 2013 and Regulation 17(10) of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the performance evaluation of the Independent Directors was carried out during the year under review. More details on the same are given in the Corporate Governance Report. The performance of the Board was evaluated after seeking inputs from all the directors on the basis of the criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The Board and the Nomination and Remuneration Committee ("NRC") reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of independent Directors, the performance of non- independent directors and the performance of the Board as a whole was evaluated. 17. Audit Committee: The details pertaining to composition of audit committee are included in the Corporate Governance Report, which forms part of this report. 18. Policy on directors' appointment and remuneration and other details: The Company's policy on directors' appointment and remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the corporate governance report, which forms part of the directors' report as "Annexure-III." 19. Managerial Remuneration and particulars of employees: Pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 a disclosure on remuneration related information of employees, Key Managerial Personnel and directors is annexed herewith and forming part of the report as "Annexure-IV." The Managing Director of your Company does not receive remuneration from any ofthe subsidiaries of your Company. 20. Transactions with related parties None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Information on transactions with related parties pursuant to Section 134(3)(h) ofthe Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are given in "Annexure-V" in Form AOC-2 and the same forms part ofthis report. 21. Extract of annual return As provided under Section 134(3)(a) of the Companies Act, 2013 read with Rule 12(1)of the Companies (Management and Administration) Rules, 2014, the extract of the annual return is given in Annexure VI in the prescribed Form MGT-9, which forms part ofthis report. 22. Loans, Guarantees and Investment: The company has given loans to or guarantees in favour of its Wholly-Owned Subsidiary Rajratan Thai Wire Limited, Thailand which is exempted under the provisions of section 186 of the Companies Act, 2013 read with Rule 11 of the Companies (Meetings of Board and its Powers) Rules, 2014. 23. Auditors: a) Statutory Auditors: Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s Fadnis & Gupte, Chartered Accountants, Indore were appointed as statutory auditors of the Company from the conclusion of the Twenty Sixth annual general meeting (AGM) of the Company held on 26th September, 2014 till the conclusion of the twenty ninth AGM to be held in the year 2017, subject to ratfication of their appointment at every AGM. Accordingly the appointment of M/s Fadnis & Gupte, Chartered Accountants, Indore (Firm Registration No.- 006600C), as Statutory Auditors of the Company, is placed for ratification by the shareholders. b) Secretarial Auditors: Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Manju Mundra, Company Secretary in Practice (CP No. 3454) to conduct the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure-VII." c) Cost Auditors: The Board of your Company has appointed M/s. Vineet Chopra & Associates (FRN No. 102670) as the Cost Auditor of the Company for Financial Year 2015-16 pursuant to provisions of Section 148 of the Companies Act 2013. The Cost Auditor shall submit the report along with their observations and suggestions, and Annexure to the Central Government within stipulated time period. The Cost Audit Report of the Company for the financial year ended 31st March, 2015, was filed with the Ministry of Corporate Affairs, New Delhi within the stipulated time. 24. Statutory Auditor's report and secretarial audit report: The Statutory Auditors report for the financial year ended 31st March, 2016 does not contain any qualification, reservation or adverse remark. The observations made by secretarial auditors are being taken care by the management. 25. Internal Control System and their Adequacy: Your Company's internal control system is commensurate with its scale of operations. roles and responsibilities are clearly defined and assigned. Standard operating procedures are in place and have been designed to provide a reasonable assurance. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The Company has well designed Standard Operating Procedures. Independent Internal Auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards. Planned periodic reviews are carried out by Internal Audit. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors. The Audit Committee reviews the adequacy and effectiveness of internal control systems and suggests ways of further strengthening them, from time to time. The Company has robust Management Information System which is an integral part of the internal control. The observations and good practices suggested are thoroughly reviewed by the Management and the Audit Committee and appropriately implemented for strengthening the controls of various business processes. The Management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary. 26. Risk management: The company has laid down a well defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor and non-business risks. The Audit Committee and the Board periodically review the risks and suggest steps to be taken to manage/ mitigate the same through a properly defined framework. During the year, a risk analysis and assessment was conducted and no major risks were noticed, which may threaten the existence of the company. 27. Disclosure requirements: a) Corporate Governance: Your Company is committed to maintain the highest standards of Corporate Governance. Your Directors adhere to the stipulations set out in the SEBI (Listing Obligations and Disclosure Requirements) 2015. A separate report of the Board of Directors of the Company on Corporate Governance including Management Discussion and Analysis Report is an integral part of the Annual Report and included as Annexure 'VIII' and the Certificate from M/s Fadnis & Gupte, Chartered Accountants, Statutory Auditors of the Company, confirming compliance with the requirements of Corporate Governance as stipulated in Regulation 34 read with Schedule V of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 is annexed as "Annexure-VIII." b) Familiarization Program for Independent Directors: Your Company has in place a Familiarization Program for independent Directors to provide insights into the Company's Business to enable them contribute significantly to its success. The Senior Management makes presentations periodically to familiarize the Independent Directors with the strategy operations and functions of the Company. Such program was conducted on 4th November, 2015. Details of the familiarization program of the independent directors are available on the website of the Company (URL: www.rajratan.co.in ). c) Dematerialisation of Shares: The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid. As on March 31, 2016, 97.73% of the share capital stands dematerialized. d) Policy on determining material subsidiary of the Company is available on the website of the Company (URL: www.rajratan.co.in ). e) Policy on dealing with related party transactions is available on the website of the Company (URL: www.rajratan.co.in ). f) The Company has formulated and published a Whistle Blower Policy to provide Vigil Mechanism for employees including directors of the Company to report genuine concerns. The provisions are in line with the provisions of the section 177(9) of the Companies Act, 2013 read with regulation 22 of the Listing Regulations. g) As required under section 134(q) there are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future. h) The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations ofthe company. i) The Company has adopted a Code of Conduct for Prevention of Insider Trading in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulation, 2015 with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code-4. The Insider Trading Policy of the Company covering code of practices and procedure for fair disclosure of unpublished price sensitive information and code of conduct for the prevention of insider trading is available on the website of the Company at www.rajratan.co.in. j) The provisions/requirement of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ('Act') and Rules made thereunder are being followed by the Company and the company has proper system for it. k) The details of the Committees of Board are provided in the Corporate Governance Report section of this Annual Report. 28. Cautionary Note: Certain statements in the "Management Discussion and Analysis" section may be forward looking and are stated as required by the applicable laws and regulations. Many factors may affect the actual results, which could be different from what the directors envisage in terms of future performance and outlook. Important factors that could influence the Company's operations include global and domestic supply and demand conditions affecting selling prices of finished goods, availability of inputs and their prices, changes in the Government policies, regulations, tax laws, economic developments within the country and outside and other factors such as litigation and industrial relations. The Company assumes no responsibility in respect of the forward-looking statements, which may undergo changes in future on the basis of subsequent developments, information or events. 29. ANNEXURES FORMING A PART OF DIRECTOR'S REPORT The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report: 30. Human Resources and Industrial Relations: Your Company has been able to operate efficiently because of a culture of professionalism, integrity, dedication, competence, commitments, high level of people engagement and continuous improvement shown by its employees in all functions and areas of business. Our basic objective is to ensure that a robust talent pipeline and a high-performance culture, centered around accountability is in place. We feel this is critical to enable us retain our competitive edge. During the year measures for training, development, safety of the employees and environmental awareness was the top priority of the Management. The Directors wish to place on record their appreciation for the efficient and loyal services rendered by all staff and work force of the Company, without whose wholehearted effort, the satisfactory performance would not have been possible. 31. Appreciation: Your Board of Directors would like to convey their sincere appreciation for the wholehearted support and contributions made by all the employees at all levels of the Company for their hard work, solidarity, cooperation and dedication during the year. Your Directors sincerely convey their appreciation to customers, shareholders, vendors, bankers, business associates, regulatory and government authorities for their continued support. For and on behalf of the Board Sunil Chordia Managing Director DIN- 00144786 Chandrashekhar Bobra Director DIN- 0209498 Place: Indore Dated: 11th May 2016 |