DIRECTORS;' REPORT To the Members, The Directors submit annual report of the Rama Steel Tubes Limited (the "Company" or "RAMA") along with the audited financial statements for the financial year ended March 31, 2015. COMPANY'S PERFORMANCE Revenue from operations for the financial year 2014-15 at Rs.19482.55 lacs, was higher by 5.34% over last year (Rs. 18495.57 lacs in 2013-14). Earning before Interest, Tax and Depreciation was Rs. 840.35 lacs registering a decline of 4.28% over the Earning before Interest, Tax and Depreciation of Rs. 878.01 in 2013-14. The profit after tax (PAT) for the year was Rs.68.65 lacs with a decline of 67.80% over the PAT of Rs.213.16 in 2013-14. DIVIDEND The Board does not recommend any dividend for the year under review. EQUITY SHARE CAPITAL The Company had issued and allotted 12,44,500 equity shares of Rs.10/- each as Bonus shares. Consequently, the paid-up equity share capital has increased from Rs. 24,89,000/- as on March 31,2014 to Rs.1,49,34,000/- as on March 31,2015. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT Management's Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement, is presented in a separate section forming part of this Annual Report. SUBSIDIARY COMPANY During the financial year 2014-15, the company does not have any subsidiary company. PUBLIC DEPOSITS Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. The Company has accepted deposits pursuant to Section 58A of the Companies Act, 1956 read with the companies (Acceptance of Deposits) Rules, 1975 and all the principal amount along with interest thereon has been repaid. Accordingly, there are no unclaimed or unpaid deposits lying with the Company for the year under review. DIRECTORS AND KEY MANAGERIAL PERSONNEL Mr. Richi Bansal retires by rotation and being eligible has offered himself for re-appointment. Pursuant to provisions of Section 203 of the Act, Mr. Kapil Datta was appointed as Company Secretary of the Company with effect from 1st September 2014. Mr. Rajeev Kohli and Mr. Surender Kumar Sharma resigned from Board of the Company with effect from 18th November 2014. Pursuant to provisions of Section 203 of the Act, Mr. Rajkumar Malik was appointed as Chief Financial Officer of the Company with effect from 18th November 2014. Mr. Bharat Bhushan Sahny (DIN- 00014334) was appointed as Additional Director (Non-executive Independent) of the Company with effect from 18th November 2014 in accordance with the provisions under Sections 149 and 161 of the Companies Act, 2013. Mr. Rajendra Prasad Khanna (DIN- 07015844) was appointed as Additional Director (Non-executive Independent) of the Company with effect from 18th November 2014 in accordance with the provisions under Sections 149 and 161 of the Companies Act, 2013. Ms. Hannya Dhir (DIN-01325752) was appointed as Additional Director (Non-executive Independent) of the Company with effect from 30th March 2015 in accordance with the provisions under Sections 149 and 161 of the Companies Act, 2013. DIRECTORS' RESPONISIBILTY STATEMENT Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure; b) that the selected accounting policies were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Company as at March 31,2015 and of the loss of the Company for the year ended on that date; c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 and the Companies Act, 1956, to the extent applicable, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual accounts have been prepared on a going concern basis; e) the directors had laid down internal financial controls to be followed by the Company and such internal financial control are adequate and were operating effectively; and f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems are adequate and were operating effectively. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31,2015, the Board consist of 5 members, two of whom are executive and three are independent directors. The Board periodically evaluates the need for change in its composition and size. The policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies Act, 2013, adopted by the Board. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company. DECLARATION BY INDEPENDENT DIRECTOR(S) All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 (6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules. CORPORATE GOVERNANCE REPORT The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Agreement forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance. EXTRACT OF ANNUAL RETURN In accordance with Section 92(3) of the Companies Act, 2013, an extract of annual return is given in Annexure-l in the prescribed Form MGT-9, which forms part of this report. NUMBER OF MEETINGS OF THE BOARD Thirteen meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report. CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Your Directors draw attention of the members to Note 32 to the financial statement which sets out related party disclosures. The particulars of contracts and arrangements entered into by the company with related parties referred to in Section 188 in Form AOC-2 is attached herewith as Annexure- II. AUDIT COMMITTEE The details pertaining to composition off audit committee are included in the corporate governance report, which forms part of the directors' report. AUDITORS AND AUDITORS' REPORT Statutory Auditors M/s. VAPS & COMPANY, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. They have confirmed their eligibility to the effect that their re-appointment, if made, would be within prescribed limits under the Act and that they are not disqualified for re-appointment. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. Secretarial Auditors The Board has appointed M/s Arun Kumar Gupta & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed herewith marked as Annexure- III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Cost Auditors The Board has appointed M/s. S. Shekhar&Co., Cost Accountants, for conducting the audit of cost records of the Company for Steel pipe Segment for the financial year 2014-15. LOANS, GUARANTEES AND INVESTMENTS The particulars of loans, guarantees and investments given under Section 186 of the Companies Act, 2013 have been disclosed in the financial statements. INTERNAL FINANCIAL CONTROL The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures. VIGIL MECHANISM AND WHISTLE BLOWER POLICY Fraud-free and corruption free work culture has been the core of the Company's functioning. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the company has put even greater emphasis to address the risk. To meet this objective, a Whistle Blower Policy has been laid down. The same policy is approved by the Board was uploaded on the Company's website (www.fence-steeltubes.com >). DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. No complaint has been received for sexual harassment of women at work place by the Company during the financial year 2014-15. BOARD EVALUATION Pursuant to the Provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an Annual Performance Evaluation of its own performance and the Directors individually. The manner of evaluation of Non-independent Directors, Chairman and the Board as a whole was done at a separate meeting held by Independent Directors. The performance evaluation of Independent Directors was done by entire Board, excluding Directors being evaluated. PARTICULARS OF EMPLOYEES RELATED DISCLOSURES Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below: CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO A) CONSERVATION OF ENERGY: a) The Company has always been particular to conservation of energy on continuous basis by closely monitoring energy consuming equipment involving use of energy generating diesel set and power purchased from Electricity Board e.g. size of the Equipments is optimum to save energy. The low-efficient Machinery and Equipments are identified and replaced. b) Keeping in view the nature of the manufacturing process no additional investment is proposed and hence further consumption of energy is ruled out in the near future. c) No specific studies regarding impact of the above measures of (a) and (b) have been carried out and the cost impact of energy cost and energy saving measures on cost of production of goods is not material, as it forms a very low percentage vis-a vis the cost of Company's product. d) Total energy consumption and energy consumption per unit of production is given as per Form-A. B) TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION: I. RESEARCH AND DEVELOPMENT (R&D) i. Specific area in which R&D carried out by the Company: There is no specific area in which the Company has earned the R&D. However, the Company is continuously making efforts for improvements in its production process for better productivity and cost efficiency. ii. Future plan of action The Company plans to monitor continuously the plant efficiency thus reducing the shortage and reducing the cost of production. iii. Expenditure on R&D The company did not incur any Expenditure on R & D. II. TECHNOLOGICAL, ABSORPTION, ADAPTATION & INNOVATION : i. Efforts made towards Technology Absorption : For the goods manufactured by the Company there is a simple process of ERW manufacturing technique and the Company has already adopted the same and no innovations have been carried by the company, as there is no other available alternative that would ensure further cost efficiency. ii. Particulars relating to imported technology: The Company has not imported any technology and the plant is working with completely Indigenous Technical know-how. ACKNOWLEDGEMENT The Directors acknowledge the contributions made by the employees towards the success and growth of the company. Your Directors also take this opportunity to express sincere thanks to the Government Authorities, Financial Institutions and the Bankers for their cooperation and assistance to the Company. The Directors would also like to acknowledge the continued support of the Company's shareholders in all its endeavors. Sd/- (Naresh Kumar Bansal) Managing Director New Delhi September 4, 2015 |