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Your Directors have the pleasure in presenting their 26th Annual Report and Audited Statement of Accounts (standalone and consolidated) for the financial year ended 31st March, 2018.
The summarised financial results of the Company for the Financial Year ended 31st March, 2018 are presented below:
(Rs In lakhs)
|Particulars||Financial Year ended 31st March, 2018||Financial Year ended 31st March, 2017|
|Sales and other Income||1,05,571.25||89,183.90|
|Profit before Interest, Depreciation & Tax (PBIDT)||6,566.95||5,265.56|
|Less: Finance Costs||1,401.09||1,092.59|
|Profit before Tax (PBT)||4,175.61||3,339.40|
|Profit for the Year||2,651.07||2,188.70|
|Basic EPS (Rs)||12.05||9.95|
Your Company has adopted Indian Accounting Standards (Ind AS) with effect from 1st April, 2017 (transition date being 1st April, 2016). Accordingly, the financial statements for the year ended 31st March, 2018 have been prepared in accordance with Ind AS in terms of the provisions of Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time. Previous year figures have been restated as per Ind AS to make them comparable. The performance of your Company is primarily attributable to higher sales, benefits arising out of structural cost reduction and capacity enhancement projects commissioned in the last couple of years along with improved business synergies and focus on various improvement initiatives.
As a result of these initiatives, the Company achieved a turnover of Rs 1,02,523.27 lakhs as compared to Rs 87,050.12 lakhs in the previous year thereby registering a growth of 17.78% over previous year. Profit before Tax were Rs 4,175.61 lakhs as against
Rs 3,339.40 lakhs in the previous year. The Profit after Tax stood at Rs 2,651.07 lakhs as compared to the profit of Rs 2,188.70 lakhs in the previous year. The operations and financial results of the Company are elaborated in the Management Discussion and Analysis Report.
After considering the Companys profitability, free cash flow and overall financial performance, the Board of Directors of the Company are pleased to recommend a Dividend of Rs 1.25 (previous year Rs 1.25) per equity share of face value Rs 5/- each (i.e. 25%) for the financial year ended on 31st March, 2018. The distribution of Dividend on equity shares, if approved by the Members at the ensuing Annual General Meeting, will result in payout of Rs 275 lakhs excluding Tax on Dividend and Surcharge/ Education Cess thereon.
The dividend pay-out is in accordance with the Companys efforts to pay sustainable dividend linked to long-term growth objectives of the Company and enhancing stakeholder value.
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to the general reserve.
Your Company enjoys a sound reputation for its prudent financial management and its ability to meet financial obligations. The long term credit rating of your Company was reaffirmed BBB+/Stable by CRISIL. The credit rating for short term facilities was revised to CRISIL BBB+/Stable/CRISIL A2 from CRISIL BBB/Positive/CRISIL A3+.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report, in compliance with Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), forms an integral part of this report.
SUBSIDIARIES AND JOINT VENTURE COMPANIES
During the year under review, the Company acquired 6,46,134 Equity Shares constituting 60% of paid up share capital in Global Copper Private Limited (GCPL). GCPL is into manufacturing of Level Wound Coil (LWC) Copper Tube and Pancake Copper Tubes. It operates a fully-automatic manufacturing facility equipped with a production capacity of 4,000 Metric Tonne / Annum. The Company has formulated a policy on the identification of material subsidiaries and the same is placed on the website at www.rrshramik.com. The Company currently does not have any material subsidiaries.
The Company has one Joint Venture Company RR Imperial Electricals Limited at Bangladesh.
Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Company has attached along with the Financial Statements, a separate statement containing the salient features of the Financial Statements of its subsidiary and joint venture company in Form AOC-1 vide note no. 33 of Consolidated Financial Statement in the manner prescribed under the Companies Act, 2013 and Rules made thereunder and hence not repeated here for the sake of brevity. Further, in accordance with Section 136 of the Companies Act, 2013, the Audited Financial Statements, including the Consolidated Financial Statements and related information of the Company and Audited Accounts of its subsidiary are available on Companys website at www.rrshramik.com. These documents are also available for inspection by the Members at the Registered Office of the Company during business hours on all working days, except Saturdays, Sundays and National Holidays up to the date of the 26th AGM.
Performance and Financial Position of subsidiary and joint venture companies:
1. Global Copper Private Limited
During the Financial Year ended 31st March, 2018, the Company achieved total revenue of Rs 11,235.13 lakhs and net profit was Rs 141.63 lakhs.
2. RR Imperial Electricals Limited
During the Financial Year ended 31st March, 2018, the Company achieved total revenue of Rs 13,925.51 lakhs and net profit/ (Loss) was Rs (160.31) lakhs.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report. There has been no change in the nature of business of the Company.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Consolidated Financial Statements of the Company and its subsidiary have been prepared in the same form and manner as mandated by Schedule III to the Companies Act, 2013 and are in accordance with relevant Accounting Standards issued by the Institute of Chartered Accountants of India.
Pursuant to Section 152(6) of the Companies Act, 2013, Shri Satyanarayan Loya, Director, retire by rotation and being eligible offers himself for re-appointment in accordance with the provisions of the Companies Act, 2013. The Directors recommend his re-appointment at the ensuing AGM.
During the year under review, Shri Hemant Kabra, CFO and Shri H. S. Upendra Kamath were appointed as Additional directors of the Company during the year under review with effect from 12th December 2017. Shri Hemant Kabra is designated as Executive Director and CFO of the Company based on his appointment by the Board of Directors made on the recommendation of the Nomination and Remuneration Committee for a period of 3 years with effect from 12th December 2017, subject to the approval of the shareholders at the ensuing Annual General Meeting. Shri H. S. Upendra Kamath is being recommended for appointment as an Independent Director of the Company for a period of 5 years with effect from 12th December 2017.
The Board of Directors on recommendation of the Nomination and Remuneration Committee has re-appointed Shri Mahendrakumar Kabra as Joint Managing Director of the Company for a period of 3 years with effect from 1st June, 2018 to 31st May, 2021, subject to approval of shareholders at the ensuing Annual General Meeting, as his current term of office is upto 30th May, 2018.
None of the Directors of the Company have resigned from the office of Director of the Company during the year under review. The Company has received necessary declaration from all the Independent Directors confirming that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and the Listing Regulations.
Shri Rameshwarlal Kabra, Chairman of the Company, was honoured by the Government of India with the Padma Shri award announced on the Republic Day of 2018 in recognition of his meritorious contribution in the field of industry and business at the national level. Your directors wish to join you with pride and happiness in congratulating him on his glorious achievement.
MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES
Four (4) meetings of the Board of Directors were held during the financial year under review. The details of the meetings of the Board and its Committees held during the year under review are stated in the Corporate Governance Report, which forms part of this report.
The Company has in place an Audit Committee in terms of the requirements of the Companies Act, 2013. The details relating to the same are given in the Corporate Governance report forming part of this Report. The Board has accepted all recommendations made by the Audit Committee during the year.
In compliance with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has put in place a familiarization program for Independent Directors to familiarize them with the working of the Company, nature of the industry in which the Company operates, business model of the Company, their roles, rights and responsibilities vis-a-vis the Company, etc. Details of the Familiarization Programme are explained in the Corporate Governance Report and is also available on the Companys website at www.rrshramik.com
PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual Directors, including Independent Directors. The framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee, based on need and new compliance requirements.
The annual performance evaluation of the Board, its Committees and each Director has been carried out for the financial year 2017-18 in accordance with the framework. The details of evaluation process of the Board, its Committees and individual Directors, including Independent Directors have been provided under the Corporate Governance Report which forms part of this Report.
APPOINTMENT OF DIRECTORS AND REMUNERATION POLICY
A Policy with well-defined criteria is in place for the selection of candidates for appointment as Directors, Key Managerial Personnel and senior leadership positions. The relevant information has been disclosed in the Corporate Governance report which forms part of this report.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors Responsibility Statement, the Directors confirm: a) That in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same; b) That they have selected such accounting policies and applied them consistently and made judgements 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 and loss of the Company for that period; c) That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) That they have prepared the annual accounts on a going concern basis; e) That they have 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) That they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows : Shri Tribhuvanprasad Kabra, Managing Director Shri Mahendrakumar Kabra, Joint Managing Director Shri Hemant Kabra, Executive Director and CFO
Shri Madan Vaishnawa, Company Secretary
During the year, there was no change (appointment or cessation) in the office of KMP excepting the change in designation of Shri Hemant Kabra from CFO to Executive Director and CFO.
Your Directors reaffirm their continued commitment to good corporate governance practices. The Annual Report contains a separate section on Companys Corporate Governance practices, together with a certificate from the Secretarial Auditor, a practicing company secretary confirming compliance, as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which forms part of this Report.
The Companys equity shares are listed on the Bombay Stock Exchange Limited (BSE). The Company has paid annual listing fees to Stock Exchange.
EXTRACT OF ANNUAL RETURN
The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form MGT-9 of the Companies (Management and Administration) Rules, 2014, is annexed herewith as Annexure-I to this Report.
Vigil Mechanism / WhistleBlower Policy
Your Company has adopted a Whistle Blower Policy as a part of its vigil mechanism.
The purpose of the policy is to enable employees to raise concerns regarding unacceptable improper practices and/ or any unethical practices in the organization without the knowledge of the management. All employees shall be protected from any adverse action for reporting any unacceptable or improper practice and/or any unethical practice, fraud, or violation of any law, rule, or regulation. This Policy is also applicable to the Directors of the Company.
Furthermore, employees are also free to communicate their complaints directly to the Chairman/Member of the Audit Committee, as stated in the Policy. On a quarterly basis, the Audit Committee reviews reports made under this policy and implements corrective actions, wherever necessary.
CORPORATE SOCIAL RESPONSIBILITY
In accordance with the requirements of the provisions of Section 135 of the Companies Act, 2013, the Company has constituted a CSR Committee. The Company has also formulated a CSR Policy which is available on Companys website. The Annual Report on Companys CSR activities of the Company as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-II and forms part of this report.
Your Company recognises that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment and incorporates risk mitigation plans in its strategy and business/operational plans.
Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Companys risk management. The Company has a robust structure for managing and reporting on risks.
Your Companys Audit Committee monitors and reviews the risk mitigation plan.
AUDIT AND AUDITORS (1) Statutory Auditors
At the AGM of the Company held last year, pursuant to the provisions of the Act and the Rules made there under, M/s. Bhagwagar Dalal & Doshi, Chartered Accountants (Firm Registration Number 128093W), were appointed as Statutory Auditors of the Company from the conclusion of the 25th AGM held on 16th September, 2017 till the conclusion of the 30th AGM to be held in the year 2022. M/s. Bhagwagar Dalal & Doshi, Chartered Accountants have submitted a certificate confirming that their appointment is in accordance with Section 139 read with Section 141 of the Companies Act, 2013.
The Audit Report of M/s. Bhagwagar Dalal & Doshi, Chartered Accountants on the Financial Statements of the Company for the Financial Year 2017-18 is a part of the Annual Report. The Report does not contain any qualification, reservation, adverse remark or disclaimer.
(2) Secretarial Auditors
P ursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board of Directors of the Company had appointed M/s. Khanna & Co., a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year ended 31st March, 2018. The Secretarial Audit Report for the Financial Year ended 31st March, 2018 is annexed as Annexure III and does not contain any qualification, reservation, adverse remark or disclaimer.
(3) Cost Auditors
M/s. Poddar & Co., Cost Accountants (Firm Registration No.101734) have been appointed to conduct Cost Audit of the Company for the year ending 31st March, 2019. Pursuant to the provisions of Section 148 of the Act read with The Companies (Audit and Auditors) Rules, 2014, members are requested to consider the ratification of the remuneration payable to M/s. Poddar & Co.
The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing Annual General Meeting. The Cost Auditors have confirmed that their appointment is within the limits of Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified from appointment within the meaning of the said Act.
(4) Internal Auditors
P ursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, the Board of Directors of the Company have appointed M/s DMKH and Co. to conduct internal audit reviews for the Company.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
The Statutory Auditors, Cost Auditors or Secretarial Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors under Section 143(12) of the Companies Act, 2013, including rules made thereunder.
INTERNAL FINANCIAL CONTROLS
The Company has in place adequate internal financial controls with reference to financial statements. The testing of key controls was also carried out independently by the Statutory Auditors of the Company as mandated under the provisions of the Companies Act, 2013. In the opinion of the Board, the existing internal financial controls framework is adequate and commensurate to the size and nature of the business of the Company.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIES ACT, 2013
With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered by the Company during the financial year, were in the ordinary course of business and on an arms length basis.
During the year, the Company had not entered into any contract or arrangement with related parties which could be considered material (i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements, entered into individually or taken together with previous transactions during the financial year) according to the policy of the Company on materiality of Related Party Transactions. Accordingly, the disclosure required u/s 134(3)(h) of the Act in Form AOC-2 is not applicable to your Company. The details of Related Party transactions may be referred at Note No. 34 of the Financial Statements.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure-IV to this report.
During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Notes to the Financial Statements, forming a part of this Annual Report.
COMPLIANCE OF SECRETARIAL STANDARDS OF ICSI
In terms of Section 118(10) of the Companies Act, 2013, the Company is complying with the Secretarial Standards issued by the Institute of Company Secretaries of India and approved by Central Government with respect to Meetings of the Board of Directors and General Meetings.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of The Companies (Accounts) Rules, 2014, is attached as Annexure-V to this report.
OBLIGATION OF COMPANY UNDER THE 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 the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal Act, 2013) and the Rules made thereunder for prevention and redressal of complaints of sexual harassment at workplace. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Companys office premises or women service providers are covered under this Policy.
During the year under review, there was no complaint received by the Committee constituted under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
DISCLOSURES IN RELATION TO THE COMPANIES (SHARE CAPITAL AND DEBENTURE) RULES, 2014
(a) the Company has not issued any equity shares with differential rights during the year under review and hence no information as per provisions of Rule 4(4) has been furnished; (b) the Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) has been furnished; and (c) the Company does not have any ESOP scheme for its employees/Directors and hence no information as per provisions of Rule 12(9) has been furnished.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and/or material orders, passed by any Court or Regulator or Tribunal, which may impact the going concern status or the Companys operations.
The Company maintained healthy, cordial and harmonious industrial relations at all levels. The enthusiasm and unstinting efforts of employees have enabled the Company to remain at the leadership position in the industry. It has taken various steps to improve productivity across organization.
The Company supports and pursues the Green Initiative of the Ministry of Corporate Affairs, Government of India. The Company has effected electronic delivery of Notice of Annual General Meeting and Annual Report to those Members whose e-mail IDs are registered with the Company / Depository Participants. The Companies Act, 2013 and the underlying rules as well as Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, permit the dissemination of financial statements and annual report in electronic mode to the Members. For members who have not registered their email addresses, physical copies are sent in the permitted mode. Your Directors are thankful to the Members for actively participating in the Green Initiative and seek your continued support for implementation of the green initiative.
Your Directors wish to convey their gratitude and appreciation to all of the Companys employees at all its locations for their tremendous personal efforts as well as their collective dedication and contribution to the Companys performance.
Your Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers, Government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.
|For and on behalf of the Board of Directors|
|Date: 14th August, 2018||DIN 00150875|