Rajapalayam Mills Ltd Directors Report.
TO THE MEMBERS
Your Directors have pleasure in presenting their 83rd Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2019.
1. FINANCIAL RESULTS
The financial results for the year ended 31st March, 2019 after charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial Fund of र 40 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 र 7,994.33 Lakhs against र 7,572.15 Lakhs for the previous financial year 2017-18.
After deducting र 2,198.07 Lakhs towards finance cost and providing र 3,178.05 Lakhs towards Depreciation, the Net Profit and other comprehensive income before tax for the year is र 2,511.73 Lakhs, as compared to र 2,510.57 Lakhs for the previous financial year 2017-18.
Adding the surplus of र 2,000 Lakhs brought forward from the previous year, your Directors propose to appropriate the total sum of र 4,511.73 Lakhs as detailed below:
|(र in Lakhs)|
|Provision for Taxation - Current Tax||78.68|
|- MAT Credit||(78.68)|
|- Deferred Tax||(86.37)|
|- Income Tax related to earlier year||(77.58)|
|Dividend for FY 2017-18 र 4/- per share||295.05|
|Tax on Dividend @ 20.556%||60.65|
|Transfer to General Reserve and FVTOCI Reserve||1,319.97|
|Balance carried over to Balance sheet||3,000.00|
2. SHARE CAPITAL
The Paid-up Capital of the Company is र 737.62 Lakhs (Previous Year: र 737.62 Lakhs) consisting of 73,76,160 Shares of र 10/- each.
Your Directors have pleasure in recommending a Dividend of र 4/- per share (Previous Year: र 4/- per share). The Company will pay Dividend Distribution Tax under Income Tax Act, 1961.
The total amount of Dividend outgo for the year will be र 295.05 Lakhs. The amount of tax on dividends would be र 60.65 Lakhs.
An amount of र 78.68 Lakhs towards Current Tax has been provided and Deferred Tax of र 86.37 Lakhs has been withdrawn for the year 2018-19. An amount of र 77.58 Lakhs being excess Income Tax provision related to earlier years has been withdrawn during the year 2018-19. The Companys entitlement of MAT Credit of र 78.68 Lakhs has been recognized in the books during the year.
5. MANAGEMENT DISCUSSION AND ANALYSIS
In India, cotton production was estimated at 325 Lakhs bales during cotton season 2018-19 (October to September) as against 365 Lakhs bales during the previous year, a drop in production of 11% due to erratic monsoon in cotton growing area and reduced yield. The cotton production in India is continuously declining from the peak production of 400 Lakhs bales produced during the cotton season 2013-14. The current years cotton crop is the lowest production in the last 10 years. The Government of India has increased the Minimum Support Price (MSP) for cotton by more than 25% during the year under review. The lower production coupled with increased MSP has resulted in spike in cotton prices and Mills were forced to buy good quality cotton at higher prices.
The depreciation of Rupee against US-Dollar has made the import of cotton very expensive. The waste cotton prices (raw material for Open End Spinning) has prevailed at reasonable level. The Company has judiciously procured high quality cotton by closely monitoring the demand and supply situation and also the price movements in domestic and international cotton markets.
The Company is now focusing on production of customized, fine / super fine yarn to get better contribution. Some of the ring frames and open end frames have been stopped for few days for shifting of machines and modernization. Due to this, the production volume has decreased to 150.16 Lakhs Kgs during the financial year 2018-19 as against 151.92 Lakhs Kgs of last year.
SALE OF YARN
The sale volume has decreased in line with production and accumulation of stock during the financial year 2018-19 and it was 146.12 Lakhs Kgs as compared to 155.89 Lakhs Kgs of last year. The sale value of yarn has decreased to र 401.92 Crores during the FY 2018-19 as compared to र 417.60 Crores of last year.
The Company was able to attract more customers from overseas market and continues to have a good demand from International customers on account of supply of consistent and superior quality of yarn. Due to good demand for our cotton yarn in export markets, yarn prices in exports in dollar terms have improved during the financial year 2018-19. However, yarn prices in domestic yarn markets were stagnant inspite of higher cotton prices. Reduced consumption of yarn in India, due to import of fabric which was grown by 20% during the year 2018-19 coupled with excess spinning capacity has created over supply situation for yarn and hence the Mills were not able to pass on the increased cost of production in the yarn prices. The Companys focus on value added customized yarn counts viz. Mercerized Yarn, Melange Yarn, Core Yarn etc., has helped to mitigate the impact to some extent.
The Company has setup the preliminary production process for the above value added yarns successfully and commercial production has started. The sale volume of mercerized yarn has increased from 38 Tonnes to 122 Tonnes and the mlange yarn volume has increased from 2 Tonnes to 44 Tonnes. The full benefit of such value added production will start yielding results in the forthcoming years.
We have made export of Cotton Yarn (including merchant exports) for a value of र 127.96 Crores as against र 113.66 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. Mitsubishi 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 2018-19, the Company was able to consume power from its own wind farms to the extent of 64% of total power requirement as compared to 71% consumed during the last year. Because of lower power generation from wind mills, the Company was forced to consume power from other sources which are high cost and due to this, the power cost has been increased during the financial year 2018-19 to र 36.98 Crores as compared to र 30.94 Crores incurred during previous year.
The Finance cost during the financial year 2018-19 has increased to र 2,198.07 Lakhs, from र 1,752.58 Lakhs mainly for the additional borrowings for modernization of spinning machineries, automation and investments made in machineries to produce value added counts.
During the financial year 2018-19, the Company has received dividend income of र 20.86 Crores (PY: र 10.27 Crores) which includes an amount of र 10.59 Crores (PY: Nil), being dividend on Preference Shares declared and paid by M/s. Thanjavur Spinning Mill Limited. The dividend received on Preference Shares includes arrears of dividend related to previous financial years from 18-07-2014 to 31-03-2018 to the extent of र 8.34 Crores and dividend for the financial year 2018-19 of र 2.25 Crores. M/s. Thanjavur Spinning Mill Limited is taking steps for redemption of Preference Shares.
KEY FINANCIAL RATIOS
Pursuant to Schedule V(B) of SEBI (LODR) Regulations, 2015, the Key Financial Ratios for the year 2018-19 are given below:
|1 Debtors Turnover Ratio (Days)||50||40||365 Days / (Net Revenue / Average Trade Receivables)|
|2 Inventory Turnover Ratio (Days)||117||112||365 Days / (Net Revenue / Average Inventories)|
|3 Interest Coverage Ratio||1.91||2.44||(Profit Before Tax + Interest)/ (Interest + Interest Capitalised) Current Assets / (Total Current Liabilities - Other Financial|
|4 Current Ratio||1.03||1.08||Liabilities - Current maturities of Long Term Debt)|
|5 Debt - Equity Ratio||1.55||0.88||Total Debt / Total Equity|
|6 Operating Profit Margin||19%||18%||EBITDA / Net Revenue|
|7 Net Profit Margin||7%||7%||Net Profit / Net Revenue|
|8 Return on Networth||9%||11%||Total Comprehensive Income / Average Net worth|
|9 Total Debt / EBITDA||5.74||3.16||Total Debt / EBITDA|
|10 Return on Capital Employed||8%||9%||(TCI + Interest)/ (Average of Equity plus Total Debt)|
|11 Price Earning Ratio||22||28||Market Price per share as at 31 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) EBITDA denotes Profit Before Tax + Interest + Depreciation
6. MODERNISATION / EXPANSION
As a part of continuous thrust on modernization and expansion programme, the Company has invested about र 60 Crores in textile machinery & equipments like, fully automated Ring frames with link coners by replacing old ring frames, modernization of TFO machines, installation of modern and most effective contamination removal equipment at blowroom, investments in value added machineries like yarn mercerization, core yarn, melange yarn etc.
7. PROSPECTS FOR THE CURRENT YEAR
Indian cotton prices are likely to remain firm on account of a tight supply situation, less availability of good quality cotton, crop damages etc. The Company is focusing on sourcing the raw materials across the globe at a competitive price and production of more value added yarn with contamination free cotton. The Company has developed strong customer base and also strengthened its infrastructure to manufacture any kind of yarn demanded by the customers to mitigate the risk of fluctuating yarn and cotton prices. The consistent growth of import volume of fabric into India is a major concern for spinning mills in India as it reduces the domestic demand for yarn.
The Company is concentrating on modernizing the machineries to further improve quality and cost effective production. Efforts are being taken continuously to scale up the production of value added counts like Melange yarn, Mercerized yarn, core spun yarn etc., which will fetch higher margin and 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 increase the profitability.
8. TRANSFER OF ASSETS FROM ANDHRA PRADESH UNIT
The Company has decided to shift majority of the machines installed at Andhra Pradesh Unit to the parent unit at Rajapalayam due to better control over operation and costs. After shifting the majority of the machineries, the Company will initiate the process of selling the residual machines, land & building of AP Unit.
9. FABRIC PROJECT
As reported in the last years report, the Company has started implementing 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 र 250 Crores. The Company has received approval for a term loan for this project under Amended Technology Fund Scheme of Government of India.
The Company has signed a Memorandum of Understanding with Government of Tamil Nadu for getting necessary support and facilitation and a structured package of incentives from Government of Tamil Nadu as per Tamil Nadu Industrial Policy, 2014. All the major machineries have been ordered and arrivals of machineries have commenced from March, 2019. Installation of machines are under progress and it is expected to commence the commercial production during the 2nd quarter of financial year 2019-20.
The long term borrowings of the Company as on 31-03-2019 was र 258 Crores and an amount of र 134 Crores is yet to be availed from Banks as Term Loan for fabric and spinning modernization projects. After commencement of commercial production of fabric division, the Company has a plan of putting up a fabric processing unit / expansion of weaving capacity after evaluating the market condition for processed fabric, for which the existing borrowing power delegated by the Members to the Board of र 500 Crores may not be adequate. Hence approval of Members has been sought for enhancing the limit to र 750 Crores in the notice convening the Annual General Meeting.
10. WIND MILL
The Company has wind mills with installed capacity of 35.15 MW for its captive power consumption. The wind farm has generated 622 Lakhs Kwh as compared to 683 Lakhs Kwh of the previous year. The wind availability / velocity during the financial year 2018-19 was low as compared to the financial year 2017-18. 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
र 41.46 Crores as against र 45.52 Crores of previous year.
11. ASSOCIATE COMPANY
During the year under review, the following Companies have ceased to be an Associates consequent to review by the Board based on existence of voting power and significant influence in accordance with Ind AS - 28:
1. The Ramaraju Surgical Cotton Mills Limited
2. Sri Vishnu Shankar Mill Limited
3. Ramco Industrial and Technology Services Limited
4. Ramco Windfarms Limited
After the above reclassification, the Company now 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.
CONSOLIDATED FINANCIAL STATEMENTS
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 www.rajapalayammills.co.in.
The consolidated profit of the Company amounted to र 10,447.49 Lakhs for the year ended 31st March, 2019 as compared to र 11,543.55 Lakhs of the previous year.
The Consolidated Total Comprehensive Income for the year under review is र 10,369.96 Lakhs as compared to र 11,561.02 Lakhs of the previous year.
12. INTERNAL FINANCIAL CONTROLS
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.
13. VIGIL MECHANISM / WHISTLE BLOWER POLICY
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.
Smt. R. Sudarsanam, was reappointed as Managing Director of the Company for a period of three years starting from 01-04-2017 to 31-03-2020 at the AGM held on 10-08-2016. Based on the recommendation of the Nomination and Remuneration Committee made at its meeting held on 27-05-2019, the Board of Directors at their meeting held on 28-05-2019 have reappointed her as Managing Director for a further period of 3 years starting from 01-04-2020. Approval of the Members has been sought for her reappointment in the Notice convening the AGM.
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 S.S. Ramachandra Raja, (DIN: 00331491)
2. Shri P.R. Venketrama Raja, (DIN: 00331406)
The following Directors have been reappointed as Independent Directors for another term of 5 years at the Annual General Meeting held on 10th August, 2018:
1. Shri N.K.Ramasuwami Raja (DIN: 00432698) 01-04-2019 to 31-03-2024.
2. Justice Shri P.P.S. Janarthana Raja (DIN: 06702871) 01-04-2019 to 31-03-2024.
3. Shri V. Santhanaraman (DIN: 00212334) 01-04-2019 to 31-03-2024.
4. Shri K.B. Nagendra Murthy (DIN: 00359864) 04-08-2019 to 03-08-2024.
The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. No Independent Director has retired during the year.
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 compiled 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 10th August, 2018, a Special Resolution was passed for continuation of Shri S.S. Ramachandra Raja (DIN: 00331491) beyond 01-04-2019, who has attained the age of 75 years.
Smt. P.V. Nirmala Raju (DIN: 00474960) has been co-opted on 24-04-2019 as an Additional Director. She will hold the office till the date of the forthcoming Annual General Meeting. A Notice in writing has been received from a Member signifying his intention to propose the appointment of Smt. P.V. Nirmala Raju as Director at the Annual General Meeting.
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; and
(c) remuneration to directors, key managerial personnel and senior management shall be appropriate to the working of the Company and its goals.
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 http://www.rajapalayammills.co.in/pdf/nomination-and-remunerationpolicy.pdf.
15. EVALUATION OF BOARD
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(f)(2)(ii) 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 familiarise 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, five Board Meetings were held. The details of the Meetings of the Board and its various Committees are given in Corporate Governance Report.
17. SECRETARIAL STANDARD
As required under Clause 9 of Secretarial Standard 1, the Board of Directors confirms that the Company has complied with applicable Secretarial Standards.
18. PUBLIC DEPOSITS
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 31-03-2019 (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 र 179 Lakhs from Directors as deposit / loan during the financial year 2018-19. It has repaid an amount of र 106 Lakhs during the year 2018-19. The loans from Directors are not treated as deposits under Chapter V of the Companies Act, 2013.
19. ORDERS PASSED BY REGULATORS
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.
20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:
(a) the particulars of loans are provided under Note No.47 (xiv).
(b) the particulars of the guarantees and investments are provided under Note No.44 and Note No. 10 & 11 respectively of Notes forming part of financial statements. The guarantees are to secure the loans from Banks / Financial Institutions to the borrowers.
21. CORPORATE SOCIAL RESPONSIBILITY
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, protection of national heritage, livelihood enhancement projects, etc. largely in accordance with Schedule VII of the Companies Act, 2013.
Your Directors are pleased to inform that the Company has fulfilled its CSR obligations pursuant to Section 135(5) of the Companies Act, 2013. As against the requirement of र 66.26 Lakhs, the Company has spent र 72.66 Lakhs on CSR during the year 2018-19.
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, 2019 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, 2019 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 Act 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 2019-20, at a remuneration of र 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 2017-18 due to be filed with Ministry of Corporate Affairs by 30-09-2018 had been filed on 06-09-2018. The Cost Audit Report for the financial year 2018-19 is due to be filed within 180 days from the closure of the financial year and will be filed within the stipulated period.
23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
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.
24. EXTRACT OF ANNUAL RETURN
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 www.rajapalayammills.co.in.
25. CORPORATE GOVERNANCE
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 is also attached as Annexure - VII to this Report.
26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
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.
27. INDUSTRIAL RELATIONS AND PERSONNEL
The Company has 3,371 employees as on 31-03-2019. 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(xiii) of Corporate Governance Report.
28. RELATED PARTY TRANSACTION
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/wp-content/themes/ramco/pdf/related-party-transaction-policy.pdf.
29. RISK MANAGEMENT POLICY
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/risk-management-policy.pdf.
30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Dividend amount of र 15,68,100 remaining unclaimed / unpaid for a period of over 7 years was transferred to IEPF on 17-08-2018.
892 Shares corresponding to the said dividend were transferred to IEPF on 15-09-2018. The Company had transferred a dividend र 7,07,260 to IEPF for the 1,76,815 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 each र10/-||Amount of unclaimed / unpaid Dividend as on - 31-03-2019 र|
31. DIRECTORS RESPONSIBILITY STATEMENT
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, 2019;
(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, 2019 and of 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,|
|For RAJAPALAYAM MILLS LIMITED,|
|RAJAPALAIYAM,||P.R. VENKETRAMA RAJA|
|28th May, 2019.||CHAIRMAN|