Rajapalayam Mills Ltd Directors Report.


Your Directors have pleasure in presenting their 84th Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2020.


The financial results for the year ended 31st March, 2020 after charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial Fund of Rs. 5 Lakhs (which is within the limits prescribed in the Articles of Association) but before deducting finance cost and depreciation have resulted in operating profit (EBITDA) of Rs. 6,103.79 Lakhs against Rs. 7,994.33 Lakhs for the previous financial year 2018-19. Summary of Separate Financial Results of the Company is furnished below:

(Rs. in Lakhs)
Separate Financials
Financial Results Year ended 31-03-2020 Year ended 31-03-2019
Revenue 38,406.41 44,066.25
Operating Profit : Profit before Interest,
Depreciation and Tax (PBIDT) 6,103.79 7,994.33
Less: Interest 2,586.57 2,198.07
Profit before Depreciation and Tax (PBDT) 3,517.22 5,796.26
Less: Depreciation 3,384.65 3,178.05
Profit before Tax 132.57 2,618.21
Less: Tax Expenses
Current Tax 102.47
Excess Income Tax provision related to
Earlier Years withdrawn (77.58)
Deferred Tax (withdrawal) (508.67) (188.84)
Profit after Tax 641.24 2,782.16
Other Comprehensive Income for the Year (Net of Tax) (31.04) (106.48)
Total Comprehensive Income for the Year (TCI) 610.20 2,675.68


The Paid-up Capital of the Company is Rs. 737.62 Lakhs (Previous Year: Rs. 737.62 Lakhs) consisting of 73,76,160 Shares of Rs. 10/- each.


Your Directors have pleasure in recommending a Dividend of Rs. 1/- per share (Previous Year:

Rs. 4/- per share). The total amount of Dividend outgo for the year will be Rs. 73.76 Lakhs.

The Finance Act, 2020 has amended the provisions related to Tax on Dividend and accordingly the dividend will be taxable in the hands of the Shareholders.


The Company has not provided any amount towards Current Tax since total income under regular computation and deemed total income under Section 115JB of the Income Tax Act, 1961 are negative. Deferred Tax of Rs. 508.67 Lakhs has been withdrawn for the financial year 2019-20.




In India, the acreage for cultivation of cotton during the current cotton season 2019-20 (October to September) has increased at 128 Lakh hectares, which is about 6% higher than 121 Lakh hectares reported in last year due to good rainfall in cotton growing areas. There was a sluggish market condition for cotton yarn across the globe, which resulted in reduction of world cotton prices. However, the cotton prices in India during beginning of the cotton season has not come down due to the following reasons:

(i) The Government of India has increased the Minimum Support Price (MSP) for cotton by 2%,

(ii) The Cotton Corporation of India (CCI) has commenced the MSP operations across all centers of cotton growing area and covered majority of good quality cotton arrived in the market during the peak cotton season from November, 2019 to March, 2020,

(iii) CCI, having purchased large volume of cotton under MSP operation, has decided not to sell the cotton below its cost, which created tight supply situation for cotton even during peak arrivals of cotton bales in the market.

As a result, the cotton price in India was not driven by market demand but supported by MSP operations of CCI. The Spinning mills in India were forced to purchase cotton at comparatively higher prices when international prices were falling down, which has affected Indias cost competitiveness in the global market. This has not only resulted in de-growth of export volume of yarn, but also paved ways for import of cheaper fabric and garments into India from other countries.

The outbreak of COVID-19 pandemic in India during the latter part of the cotton season has changed the sentiments in the cotton market from April, 2020 onwards and the prices of major varieties of cotton have dropped by more than 20%.

The Companys focus is to produce more value added count and in order to meet the quality requirement of value added counts, more volume of high quality imported cotton has been procured whenever the prices are cheaper. This strategy has helped the Company to procure diversified varieties of cotton across the global rather than depending only upon the domestic cotton.


The production volume has decreased to 122 Lakhs Kgs during the financial year 2019-20 as against 150 Lakhs Kgs of last year, due to the reduction of production capacity and production of value added fine counts of yarn. In Andhra Pradesh Unit, ring frames with a capacity of 4,800 Spindles have been sold and the overall production capacity of the Company has come down by about 3%.


The sale volume has decreased in line with production and accumulation of stock at the end of the financial year 2019-20. The sale volume for the FY 2019-20 stood at 119 Lakh Kgs as compared to 146 Lakh Kgs of last year. The sale value of yarn has decreased to

Rs. 347.19 Crores during the FY 2019-20 as compared to Rs. 401.92 Crores of last year.

The Textile Industry, especially spinning sector is in the midst of slowdown. The excess spinning capacity in India coupled with poor demand for yarn from overseas markets has led to accumulation of stock and affected the profitability of spinning mills. The cotton yarn export from India during the financial year 2019-20 has been substantially reduced by 30% as compared to financial year 2018-19.

During the past few years, China has been a major importer of cotton yarn from India and during the financial year 2019-20, it has cut down imports of yarn by 50%. During the FY 2019-20, China had imported 2,283 Lakhs Kgs. of cotton yarn from India as against 4,641 Lakhs Kgs during the last FY 2018-19. The reduction was partly due to general sluggishness prevailed in the textile industry and also partly due to outbreak of corona virus (COVID-19) in China during December, 2019. Though the Company is not having any direct exposure to Chinese market, the sudden drop in export volume has created oversupply situation for yarn, which has affected domestic yarn market and yarn price has started falling down very steeply.

The outbreak of COVID-19 in India during January, 2020 has affected production and sales of the Company during the month of March, 2020. Various restrictions have been imposed by both Government of India and State Governments on movement of goods and people and the Company was forced to shut down its operations with effect from 25-03-2020 to 05-05-2020.

The Company is taking steps to attract more customers from overseas market and there is a good demand for our yarn from International customers on account of supply of consistent and superior quality of yarn. The Companys focus on value added customized yarn counts viz. Mercerized Yarn, Melange Yarn, Core Yarn etc., will be helpful to mitigate the impact to some extent.

The sale volume of mercerized yarn has increased to 154 Tonnes during the FY 2019-20 (PY: 122 Tonnes) and the mlange yarn volume has increased to 146 Tonnes during the FY 2019-20 (PY: 44 Tonnes). The Company is taking various steps to expand its market presence both in domestic and international markets and hope to achieve higher volume of sales in value added yarns in the forthcoming years.


We have made export of Cotton Yarn (including merchant exports) for a value of

Rs. 104.36 Crores as against Rs. 127.96 Crores of the previous year. In addition to our regular International Market, our sales volume has grown considerably in new markets viz. Turkey, Portugal etc. where our yarn quality is well accepted.

Your Directors are thankful to M/s. Asahi Kasei Advance Corporation, M/s. Doko Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued support and efforts for promotion of exports to Japan.


During the financial year 2019-20, the Company was able to consume power from its own wind farms to the extent of 64% of total power requirement. Because of lower power generation from wind mills, the Company was forced to consume power from other sources which are high cost. In spite of this, the power cost has been decreased during the financial year 2019-20 to Rs. 27.87 Crores as compared to Rs. 36.98 Crores incurred during previous year, due to reduced production capacity and also because of various energy conservation measures taken by the Company.


The Finance cost has increased to Rs. 25.87 Crores during the financial year 2019-20 from

Rs. 21.98 Crores of previous financial year mainly due to the additional borrowings for modernization of spinning machineries, automation and investments made in machineries to produce value added counts.


During the financial year 2019-20, the Company has received dividend income of

Rs. 21.28 Crores (PY: Rs. 20.86 Crores), and the particulars of dividend received are provided under Note No.46(a) (viii).


Pursuant to Schedule V(B) of SEBI (LODR) Regulations, 2015, the Key Financial Ratios for the year 2019-20 are given below:

S.No. Particulars 31-03-2020 31-03-2019 Formula adopted
1 Debtors Turnover Ratio (Days) 57 50 365 Days / (Net Revenue / Average
Trade Receivables)
2 Inventory Turnover Ratio (Days) 151 117 365 Days / (Net Revenue / Average
3 Interest Coverage Ratio 1.01 1.91 (Profit Before Tax + Interest)/
(Interest + Interest Capitalised)
Current Assets / (Total Current
Liabilities - Other Financial
4 Current Ratio 1.03 1.03
Liabilities - Current maturities of
Long Term Debt)
5 Debt - Equity Ratio 1.96 1.55 Total Debt / Total Equity
6 Operating Profit Margin 17% 19% EBITDA / Net Revenue
7 Net Profit Margin 2% 7% Net Profit / Net Revenue
8 Return on Networth 2% 9%

Total Comprehensive Income /

Average Net worth
9 Total Debt / EBITDA 9.55 5.74 Total Debt / EBITDA
10 Return on Capital Employed 4% 8%

(TCI + Interest) / (Average of Equity

plus Total Debt)
11 Price Earning Ratio 57 22

Market Price per share as at

31st March / Earning per share)

Notes: a) For serial no. 5 and 9 there have been significant change (ie., 25% or more) in the ratios compared to previous year. The same is due to increase in debt for fabric projects / modernisation of spinning mills. b) For Serial no. 2,3,7,8,10 and 11, there have been significant change (i.e. 25% or more) in the ratios compared to previous year. The same is due to reduced operating margin on account of general slowdown in the textile industry especially in yarn segment, disparity between yarn and cotton prices and reduced demand in overseas market for yarn, as explained in para 5 above. c) EBITDA denotes Profit Before Tax + Interest + Depreciation


As a part of continuous thrust on modernization and expansion programme, the Company has invested about Rs. 46 Crores in textile machinery & equipments like, fully automated Ring frames with link coners by replacing old ring frames, contamination picking machines, new waste collection system etc.


The outbreak of deadly pandemic Covid-19 is creating worst ever historical crisis all over the world. All the major economies are getting affected due to this pandemic. Majority of the Governments across the globe have announced lockdown of manufacturing facilities / malls / retail out-lets, which has resulted in grinding halt of demand for various products including textile products. Cotton Association of India has revised its estimate of cotton crop for the season 2019-20 to 330 Lakhs bales, 24.50 Lakhs bales lower than its previous forecast, as most ginning mills were shut down following nationwide lockdown to curb COVID-19 and lack of labour. In order to mitigate the crisis, the Government of India & other government agencies have announced various steps including granting moratorium of principal repayment of term loan and interest payment on term loan / working capital loans. These measures, though will be helpful in managing the short-term cash flow of the Company, more measures & support from the Governments are needed to cope up with the current situation.

The Companys long term strategy on the following areas would definitely be helpful in managing this unprecedented tough situation:

(a) The Company is having sufficient stock of good quality cotton of both imported & indigenous varieties, which will be helpful in un-interrupted production & supply of yarn to our customers.

(b) The Company has developed strong customer base and also strengthened its infrastructure to manufacture any kind of yarn demanded by the customers.

(c) Due to good work practices and cordial relationship with workers for the last 8 decades, we are able to attract all our employees from nearby locations of our Mills. Once the Governments announced the lifting of lockdown order, the Company has immediately resumed the production and sales activity.

(d) Employees at all levels are trained in Japanese management practices viz., 5S and Total Productive Maintenance (TPM) and their training in these areas will be helpful in implementing various cost cutting measures to mitigate the crisis.

(e) The Company is already implementing various measures to reduce the power consumption in all departments and is poised to excel as best spinning mills on power consumption standards.

(f) The Companys decision to make rapid investments in automation and optimization of various production parameters will further improve quality of yarn and cost effective production.

Efforts are being taken continuously to scale up the production & sale of value added counts like Mlange yarn, Mercerized yarn, core spun yarn etc., which will replace commodity counts in the forthcoming years. With the flexibility to produce value added super fine counts, the Company will continue to make efforts in expanding the marketing activities across the globe to sustain its operations.


The Company has shifted majority of the machines installed at Andhra Pradesh Unit to the parent unit at Rajapalayam and all the machines have been installed, and the machines are running with better efficiency. The Company has sold all residual machines of AP Unit and has initiated the process of selling the land & building.


As reported in the last years report, the Company has implemented a project for establishing yarn dyed weaving unit at Rajapalayam with the capacity of 122 Looms to produce 10 Million meters of fabrics per annum at a cost of Rs. 276 Crores.

Installation of machines have been completed in various phases and the commercial production of the fabric unit has been commenced on 22-03-2020. The sample fabrics produced from the fabric unit has been well accepted by our customers and they have started to place bulk orders. The full economic benefit of the Fabric unit will accrue from the FY 2020-21.


The Company has wind mills with installed capacity of 35.15 MW for its captive power consumption.

The wind farm has generated 596 Lakhs Kwh as compared to 622 Lakhs Kwh of the previous year. The wind availability / velocity during the financial year 2019-20 was low as compared to the financial year 2018-19. All the Units generated by wind mills were adjusted for captive consumption at our Mills in Tamil Nadu. The income during the year from the Wind Mill Division was

Rs. 39.76 Crores as against Rs. 41.46 Crores of previous year.


The Company has three Associate Companies viz., M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited and M/s. Ramco Systems Limited.

In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companys Associates is attached in Form AOC-1 as Annexure - I.


As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (LODR) Regulations, 2015, Companies are required to prepare consolidated financial statements of its Subsidiaries and Associates to be laid before the Annual General Meeting of the Company.

Accordingly, the consolidated financial statements incorporating the accounts of Associate Companies, viz. M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, along with the Auditors Report thereon, forms part of this Annual Report. As per Section 136 (1) of the Companies Act, 2013, the Financial Statements including Consolidated Financial Statements are available at the Companys website at the following link at http://www.rajapalayammills.co.in.

The consolidated profit of the Company amounted to Rs. 9,206.79 Lakhs for the year ended 31st March, 2020 as compared to Rs. 10,447.49 Lakhs of the previous year.

The Consolidated Total Comprehensive Income for the year under review is Rs. 9,113.07 Lakhs as compared to Rs. 10,369.96 Lakhs of the previous year.


In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. ERP System developed by Ramco Systems Limited has been installed for online monitoring of all functions and management information reports are being used to have better internal control system and to take decisions in time.


In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015 the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy is available at the Companys website. The Policy provides the mechanism for the receipt, retention and treatment of complaints and to protect the confidentiality and anonymity of the stakeholder. The complaints can be made in writing to be dropped into Whistle Blower Drop Boxes or through E-mail to dedicated mail IDs. The Corporate Ombudsman shall have the sole access to these. The Policy provides to the complainant access to the Chairman of the Audit Committee. The web link for the Vigil Mechanism is disclosed in the Corporate Governance Report.


The Board of Directors at their meeting held on 28-05-2019, based on the recommendation of the Nomination and Remuneration Committee, have re-appointed Smt. R.Sudarsanam as Managing Director for a further period of 3 years starting from 01-04-2020. The Shareholders of the Company have approved her re-appointment at the AGM held on 14-08-2019, by passing a Special Resolution.

In accordance with the provision of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, the following Directors retire by rotation at the ensuing Annual General Meeting and they are eligible for re-appointment.

1. Shri A.V. Dharmakrishnan, (DIN: 00693181)

2. Shri P.V. Abinav Ramasubramaniam Raja, (DIN: 07273249)

The Independent directors hold office for a fixed term of 5 years and are not liable to retire by rotation.

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

Independent Directors have complied with the code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.

The Company had formulated a Code of Conduct for the Directors and Senior Management Personnel and the same has been complied with.

At the Annual General Meeting held on 10-08-2016, Smt. Soundara Kumar was appointed as an Independent Director for a period of 5 consecutive years commencing 27-08-2015 to 26-08-2020. She is eligible for re-appointment for another period of 5 years as an Independent Director from 27-08-2020 to 26-08-2025. In accordance with Section 149(10) of the Companies Act, 2013, her re-appointment has been proposed in the notice convening the Annual General Meeting as Special Resolution. Her profile and rationale for re-appointment have been provided in the statement pursuant to Section 102 of the Companies Act, 2013 attached to the notice convening the Annual General Meeting.

Smt. P.V. Nirmala Raju (DIN: 00474960) has been co-opted on 24-04-2019 as an Additional Director. She has been appointed as a Director at the AGM held on 14-08-2019.

Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules, 2014, it is reported that, other than the above, there have been no changes in the Directors or Key Managerial Personnel during the year.

The Audit Committee has four members, out of which three are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.

In accordance with Section 178(3) of the Companies Act, 2013 and based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors have approved a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Other Employees.

As per Proviso to Section 178(4), the salient features of the Nomination and Remuneration Policy should be disclosed in the Boards Report. Accordingly, the following disclosures are given:

Salient Features of the Nomination and Remuneration Policy:

The objective of the Policy is to ensure that:

(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks;

(c) remuneration to directors, key managerial personnel and senior management shall be appropriate to the working of the company and its goals; and

(d) to carry out any other function as is mandated by the Board from time to time and / or enforced by any statutory notifications, amendment or modification as may be applicable.

The Nomination and Remuneration Committee and this Policy shall be in compliance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The web address of the Policy is at www.rajapalayammills.co.in/pdf/nomination-and-remunerationpolicy.pdf.


Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, Performance of the Board as a whole and its Members and other required matters.

Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria for performance evaluation of Independent Directors, which will be based on attendance, expertise and contribution brought in by the Independent Director at the Board and Committee Meetings, which shall be taken into account at the time of reappointment of Independent Director.

Pursuant to Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board of Directors have evaluated the performance of Independent Directors and observed the same to be satisfactory and their deliberations beneficial in Board / Committee meetings.

Pursuant to Regulation 4(2)(f)(ii)(9) of SEBI (LODR) Regulations, 2015, the Board of Directors have reviewed and observed that the evaluation frame work of the Board of Directors was adequate and effective.

The Boards observations on the evaluations for the year under review were similar to their observations for the previous year. No specific actions have been warranted based on current year observations. The Company would continue to familiarize its Directors on the industry, technological and statutory developments, which have a bearing on the Company and the industry, so that Directors would be effective in discharging their expected duties.


During the year, four Board Meetings were held. The details of the Meetings of the Board and its various Committees are given in Corporate Governance Report.


As required under Clause 9 of Secretarial Standard 1, the Board of Directors confirms that the company has complied with applicable Secretarial Standards.


Pursuant to Rule 8(5)(v) & (vi) of Companies (Accounts) Rules, 2014, it is reported that the Company has not accepted any deposit from public during the financial year under review. There was no outstanding of deposits as on 31-03-2020 (Previous year: NIL). The Company has no deposit, which is not in compliance with the Chapter V of the Companies Act, 2013.

The Company has received a sum of Rs. 170 Lakhs from Directors as deposit / loan during the financial year 2019-20. It has repaid an amount of Rs. 500 Lakhs during the year 2019-20. The loans from Directors are not treated as deposits under Chapter V of the Companies Act, 2013.


Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Companys operations in future.


Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:

(a) the particulars of loans are provided under Note No.46 (a) (xiv) of Separate Financial Statements.

(b) the particulars of the guarantees and investments are provided under Note No.43 and Note No.9 & 10 respectively of Notes forming part of Separate Financial Statements.

The guarantees are to secure the loans from Banks / Financial Institutions to the borrowers.


In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and adopted a CSR Policy which is based on the philosophy that "As the Organization grows, the Society and Community around it also grows."

The Company has undertaken various projects in the areas of education, health, rural development, water and sanitation, promotion and development of traditional arts, livelihood enhancement projects, etc. largely in accordance with Schedule VII of the Companies Act, 2013.

The CSR obligations pursuant to Section 135(5) of the Companies Act, 2013, for the year 2019-20 is Rs. 57.23 Lakhs. As against this, the Company has spent an amount of Rs. 57.30 Lakhs on CSR. The Company had also spent a sum of Rs. 1.74 Lakhs on other social causes and projects, which do not qualify as CSR expenditure under the classifications listed out in Schedule VII of the Companies Act, 2013.

The CSR policy is available at the Companys website at the following link at http://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/corporate-social-responsibility-policy.pdf.

The Annual Report on CSR activities as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - II.



M/s. N.A. Jayaraman & Co. Chartered Accountants (FRN: 001310S) and M/s. SRSV & Associates, Chartered Accountants (FRN:015041S), who have been appointed as the Statutory Auditors of the Company at the 81st Annual General Meeting, would be the Auditors of the Company till the conclusion of the 86th Annual General Meeting to be held in the year 2022.

As required under Regulation 33(1)(d) of SEBI (LODR) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The report of the Statutory Auditors for the year ended 31st March, 2020 does not contain any qualification, reservation or adverse remark and no instance of fraud has been reported by Auditors under Section 143(12) of Companies Act, 2013.


Shri M.R.L. Narasimha, a Practicing Company Secretary is the Secretarial Auditor of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditor for the year ended 31st March, 2020 is attached as Annexure - III. The report does not contain any qualification, reservation or adverse remark.


The Company is required to maintain the accounts and records which have been specified by the Central Government under Section 148(1) of the Companies Act, 2013 as cost records and accordingly such accounts and records are made and maintained by the Company.

The Board of Directors had approved the appointment of Shri M. Kannan, Cost Accountant as the Cost Auditor of the Company to audit the Companys Cost Records relating to manufacture of textile products for the year 2020-21 at a remuneration of Rs. 1.40 Lakhs plus applicable taxes and out-of-pocket expenses.

The remuneration of the cost auditor is required to be ratified by the members in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter is being placed before the Members for ratification at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2018-19 due to be filed with Ministry of Corporate Affairs by 30-09-2019 had been filed on 09-09-2019. The Cost Audit Report for the financial year 2019-20 is due to be filed within 180 days from the closure of the financial year and will be filed within the stipulated period.



Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.


In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is attached herewith as Annexure - V.

In accordance with Section 134(3)(a) of the Companies Act, 2013, the company placed a copy of the annual return on its website at http://www.rajapalayammills.co.in.


The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V(C) of SEBI (LODR) Regulations, 2015, a Report on Corporate Governance being followed by the Company is attached as Annexure - VI. As required under Schedule V(E) of SEBI (LODR) Regulations 2015, a Certificate from the Auditors confirming compliance of conditions of Corporate Governance is also attached as Annexure - VII to this Report.

As required under Regulation 34(3) read with Schedule V para C(10)(i) of SEBI (LODR) Regulations, 2015, Certificate from the Secretarial auditor that none of the Companys Directors have been debarred or disqualified from being appointed or continuing as Directors of Companies, is enclosed as Annexure - VII A.


The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) and (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure - VIII.


The Company has 3,320 employees as on 31-03-2020. Industrial relations with employees remained cordial during the year. Human Resources Development activities received considerable focus. The emphasis was on imparting training and development of the skill-set of the employees to enable them to face the challenges in the work environment.

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Statement and disclosures pertaining to the Sexual Harassment of women at workplace (Prevention, prohibition and Redressel) Act, 2013, are available at point no.10 (xii) of Corporate Governance Report.


Prior approval / Omnibus approval is obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. No transaction with the related party is material in nature, in accordance with Companys "Related Party Transaction Policy" and Regulation 23 of SEBI (LODR) Regulations, 2015. In accordance with Indian Accounting Standard - 24 (Related Party Disclosure), the details of transactions with the related parties are set out in Note No. 47 of disclosures forming part of Financial Statements.

As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, The Companys Related Party Transaction Policy is disclosed in the Companys website and its web link is http://www.rajapalayammills.co.in/pdf/related-party-transaction-policy.pdf.


Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and minimization of risk thereof. The Risk Management Policy of the Company is available at the Companys website, at the following weblink http://www.rajapalayammills.co.in/wp-content/themes/ramco/pdf/ riskmanagement-policy.pdf.


Dividend amount of Rs. 2,42,316/- related to the year 2011-12 and Rs. 11,75,155/- related to the year 2012-13 (Interim Dividend) remaining unclaimed / unpaid for a period of over 7 years was transferred to IEPF on 31-08-2019 and 11-03-2020 respectively.

2,086 Nos. of shares corresponding to the above said Dividends were transferred to IEPF.

The Company had transferred a Dividend of Rs. 7,10,828/- to IEPF for 1,77,707 Nos. of shares already transferred to IEPF.

Year wise amount of unpaid / unclaimed dividend lying in the unpaid account and corresponding shares, which are liable to be transferred to IEPF and due dates for such transfer are tabled below:

Year Type of Dividend Date of Declaration of Dividend Last date for claiming Unpaid Dividend Due date for transfer to IEP Fund No. of Shares of Rs.10/- each Amount of unclaimed / unpaid Dividend as on 31-03-2020 - Rs.
2012-2013 Final Dividend 01-08-2013 31-07-2020 29-08-2020 2,28,391 2,28,391
2013-2014 Interim Dividend 03-02-2014 02-02-2021 03-03-2021 2,20,128 11,00,640
Final Dividend 04-08-2014 03-08-2021 01-09-2021 2,11,814 5,29,535
2014-2015 Dividend 12-08-2015 11-08-2022 09-09-2022 2,61,570 6,53,925
2015-2016 Interim Dividend 16-03-2016 15-03-2023 13-04-2023 2,85,954 8,57,862
2016-2017 Dividend 10-08-2017 09-08-2024 07-09-2024 2,84,409 11,37,636
2017-2018 Dividend 10-08-2018 09-08-2025 07-09-2025 1,19,447 4,77,788
2018-2019 Dividend 14-08-2019 13-08-2026 11-09-2026 1,26,700 5,06,800


Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:

(a) they had followed the applicable accounting standards along with proper explanation relating to material departures, if any, in the preparation of the annual accounts for the year ended 31st March, 2020;

(b) they had 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 as on 31st March, 2020 and the profit of the Company for the year ended on that date;

(c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they had prepared the Annual Accounts on a going concern basis;

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


The Directors are grateful to the various Departments and agencies of the Central and State Governments for their help and co-operation. They are thankful to the Financial Institutions and Banks for their continued help, assistance and guidance. The Directors wish to place on record their appreciation of employees at all levels for their commitment and their contribution.

On behalf of the Board of Directors,




CHENNAI, 24th June, 2020.

Form AOC-1

[Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014]

Statement containing salient features of the financial statement of Associate Companies


The Company has no Subsidiary Company.


Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies

Particulars 2019-20
Name of the Associate Company The Ramco Cements Limited Ramco Industries Limited Ramco Systems Limited
Last Audited Balance Sheet date 31-03-2020 31-03-2020 31-03-2020
Date on which the Associate was associated / acquired 01-04-2016 01-04-2016 01-04-2016
No. of Shares held as on 31st March, 2020 3,30,65,000 84,01,680 7,33,531
Amount of Investment in Associate as on
31-03-2020 (Rs. in Lakhs) 4,864.91 1,100.81 1,141.55
Extent of Shareholding % as on 31-03-2020 14.04 9.69 2.40
Description of how there is significant influence Note (1)
Reason why Associate is not consolidated Not applicable
Net worth attributable to Shareholding (Rs. in Lakhs) 5,00,699.00 3,20,941.00 60,790.10
Profit / Loss for the Year (Consolidated) (Rs. in Lakhs) 60,012.00 16,592.00 2,806.80
a) Considered in Consolidation (Rs. in Lakhs) 9,477.42 731.67 64.86
b) Not considered in Consolidation (Rs. in Lakhs) 50,534.58 15,860.33 2,741.31

Note: 1) Significant influence exists based on combined voting rights.

2) Names of associates or joint ventures which are yet to commence operations - NIL

3) Names of associates or joint ventures which have been liquidated or sold during the year - NIL

On behalf of the Board of Directors,




CHENNAI, 24th June, 2020.