Rama Steel Tubes Ltd Directors Report.

To the Members,

The Directors submit annual report of the Rama Steel Tubes Limited (the "Company" or "RAMA") along with the audited financial statements for the financial year ended March 31, 2019.

FINANCIAL RESULTS
(Rs. in Lakhs)
Particulars Standalone Consolidated
2018-19 2017-18 2018-19 2017-18
Revenue from Operations 40,455.87 33,981.92 50,414.61 38,218.89
Other Income 326.92 389.03 264.05 461.96
Total Revenue 40,782.79 34,370.95 50,678.66 38,680.86
EBIDTA 1,993.20 2,450.81 2,152.96 2,727.60
Finance Costs 764.78 602.04 937.19 650.07
Depreciation and Amortisation 218.33 213.06 276.44 232.81
Expenses
Net Profit Before Tax 1,010.09 1,635.71 939.34 1,844.72
Tax Expenses 247.55 576.63 102.16 573.18
Net Profit After Tax 762.54 1,059.07 837.18 1,271.54
Other Comprehensive Income (0.34) 0.97 18.17 1.96
Total Comprehensive Income 762.20 1,060.04 855.35 1,273.50
Earing per equity share (Face Value of Rs. 5 each)
Basic 4.54 6.34 5.09 7.62
Diluted 4.54 6.34 5.09 7.62

COMPANYS PERFORMANCE

The Financial Year ("FY") 2018-19 was one of the significant years in the terms of growth and sustainability.

During the FY 2018-19, total consolidated revenue from operations was Rs. 50,414.61 Lakhs as compared to Rs. 38,218.89 Lakhs in FY 2017-18, registering an increase of 32%.

Consolidated profit before tax (PBT ) in FY 2018-19 was Rs. 939.34 Lakhs as compared to Rs. 1844.72 Lakhs in FY 2017-18, reflecting a decrease of 49%.

Consolidated profit after tax (PAT ) was Rs. 855.35 Lakhs as against Rs. 1273.50 Lakhs in FY 2017-18, a decrease of 33% over the previous year.

Earnings before Interest, Depreciation and Taxes (EBIDTA) stood at Rs. 2152.96 Lakhs in FY 2018-19, as compared to Rs. 2727.60 Lakhs in FY 2017-18.

Margins reduced significantly largely due to fluctuations in the raw material prices, presence in a highly competitive industry and initial stage of operations in Subsidiary company-Lepakshi Tubes Pvt.Ltd.

DIVIDEND

The Board does not recommend any dividend for the year under review.

ADOPTION OF INDIAN ACCOUNTING STANDARDS (IND AS)

The Company has adopted Indian Accounting Standards (Ind AS). Accordingly, the standalone financial statements of the Company and the consolidated financial statements of the Company with its subsidiary for the financial year ended March 31, 2019, have been prepared in accordance with Ind AS as prescribed under section 133 of the Companies Act, 2013(the "Act"), read with the relevant rules made there under and other accounting principles generally accepted in India.

EQUITY SHARE CAPITAL

The issued, subscribed and paid-up equity share capital of the Company is Rs. 8,39,70,000 divided into 1,67,94,000 Equity shares of Rs. 5/- each.

FULLY CONVERTIBLE WARRANTS

The Company has issued and allotted on preferential basis

15,00,000 Fully Convertible Warrants at a price of Rs. 122/- each to Persons belonging to Promoter Category on March 29, 2017 against which the 25% upfront money was received from them to the Company on or before 29.03.2017. Out of which 6,00,000 Fully Convertible Warrants and 1,60,000 Fully Convertible Warrants were converted into equivalent number of equity shares on 12.05.2017 and 27.05.2017 respectively on receipt of balance 75% money from the allottee(s) in respect of said warrants.

As per Regulation 75 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, the convertible securities of the issuer shall be converted within eighteen months from the date of their allotment. By virtue of this, the remaining 7,40,000 Fully Convertible Warrants must be converted on or before 28.09.2018.

The allottee has not made payment of balance 75% of money in respect of 7,40,000 Fully Convertible Warrants on or before 28.09.2018, therefore by virtue of Regulation 75 of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; 7,40,000 fully convertible warrants were cancelled and 25% upfront money of 7,40,000 warrants forfeited.

MANAGEMENTS DISCUSSION AND ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, is presented in a separate section forming part of this Annual Report.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Pursuant to Section 129 of the Companies Act, 2013 a statement in prescribed Form AOC-1, relating to subsidiaries and joint venture for the year ended on March 31, 2019 has been attached with the consolidated financial statements of the Company for the financial year ended March 31, 2019.

The policy for determining material subsidiaries as approved may be accessed on the Companys Website:http://www.ramasteel. com/app/webroot/img/uploads/ files/93/POLICY%20FOR%20 DETERMINING%20MATERIAL%20SUBSIDIARY.pdf

PUBLIC DEPOSITS

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Accordingly, there are no unclaimed or unpaid deposits lying with the Company for the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

There was no change in the composition of the Board during the financial year 2018-19.

As per the provisions of the Companies Act 2013 and the Articles of Association of the Company, Mr. Richi Bansal, Director of the Company will be retiring by rotation at the ensuing AGM and being eligible has offered himself for re-appointment.

The details pursuant to Regulation 36(3) of the SEBI (Listing Obligation and Disclosure Requirements) Regulation 2015 relating to appointment and re-appointment of directors at the AGM are provided in the Notice to the members.

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:

Mr. Naresh Kumar Bansal, Managing Director

Mr. Rajkumar Malik, Chief Financial Officer (Upto 31 st May 2018)

Mr. Kapil Datta, Company Secretary

Mr. st June 2018)

During the year, the Board of Directors in their meeting held on 28th May 2018 has appointed Mr. Rajeev Kumar Aggarwal as Chief

Financial Officer, as KMP of the Company in place of Mr. Rajkumar Malik who has resigned from the post of Chief Financial Officer of the Company w.e.f. 31st May 2018.

DIRECTORS RESPONSIBILTY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and there has been no material departure;

b) that the selected accounting policies were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the Company as at March 31, 2019 and of the loss of the Company for the year ended on that date;

c) the directors had taken pr oper 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 the annual accounts have been prepared on a going concern basis;

e) the directors had laid down internal financial controls to be followed by the Company and such internal financial control are adequate and were operating effectively; and f) the directors had devised proper systems to ensure compliancev with the provisions of all applicable laws and such systems are adequate and were operating effectively.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As on March 31, 2019, the Board consist of 6 members, three of whom are executive and three are independent directors. The Board periodically evaluates the need for change in its composition and size.

The policy of the Company on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters provided under Sub-section (3) of Section 178 of the Companies

Act, 2013, adopted by the Board. We affirm that the remuneration paid to the directors is as per the terms laid out in the nomination and remuneration policy of the Company.

DECLARATION BY INDEPENDENT DIRECTOR(S)

All the Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149 (6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

CORPORATE GOVERNANCE REPORT

The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The report on Corporate Governance as stipulated under the Listing Regulations forms an integral part of this Report. The requisite certificate from the Auditors of the Company confirming compliance with the conditions of corporate governance is attached to the report on Corporate Governance.

EXTRACT OF ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act, 2013, an extract of annual return is given in Annexure -I in the prescribed Form MGT-9, which forms part of this report.

NUMBER OF MEETINGS OF THE BOARD

Six meetings of the board were held during the year. For details of the meetings of the board, please refer to the corporate governance report, which forms part of this report.

CONTRACTS AND ARRANGEMENT WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Your Directors draw attention of the members to Note 45 to the Standalone financial statement which sets out related party disclosures. The particulars of contracts and arrangements entered into by the company with related parties referred to in Section 188 in Form AOC-2 is attached herewith as Annexure- II.

AUDITORS AND AUDITORS REPORT

Statutory Auditors

As per provisions of Section 139 of the Companies Act, 2013, the Company has appointed M/s Alok Mittal & Associates, Chartered Accountants (Firm Registration No. 005717N) as Statutory Auditors for a period of 5 (five) years in the AGM of the Company held on 29th September 2018.

The requirement to place the matter relating to appointment of auditors for rati_cation by Members at every AGM has been done away by the Companies (Amendment) Act, 2017 with effect from May 7, 2018. Accordingly, no resolution is being proposed for rati_cation of appointment of statutory auditor at the ensuing AGM.

The Auditors Report to the shareholders on the standalone and consolidated financial statement for the year ended March 31, 2019 does not contain any qualification, observation or adverse comment.

Secretarial Auditors

Pursuant to the provision of Section 204 of the Act, read with Rule 9 of the Companies (Appointment and Remunerartion of Managerial Personnel) Rules, 2014 the Board of Directors had appointed M/s Arun Kumar Gupta & Associates (CP No. 5086), Company Secretaries, to conduct Secretarial Audit for the financial year ended March 31, 2019. The Secretarial Audit Report for the financial year ended March 31, 2019 is annexed herewith marked as Annexure - III to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

Pursuant to Regulation 24(A) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, the Company has obtained annual secretarial compliance report from M/s Arun Kumar Gupta & Associates (CP No. 5086),

Company Secretaries, and same will be submitted to the stock exchange within the prescribed time limits. The Annual Secretarial Compliance Report does not contain any remarks or observations.

Cost Auditors

Pursuant to the provision of Section 148(3) of the Act, the Board of Directors had appointed M/s. S. Shekhar & Co., Cost Accountants, for conducting the audit of cost records of the Company for Steel pipe Segment for the financial year ended March 31, 2019. The audit is in progress and report will be filed with the Ministry of Corporate Affairs within the prescribed period.

The cost records as specified by the Central Government under sub-section (1) of Section 148 of the Act as required by the Company are maintained by 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.

LOANS, GUARANTEES AND INVESTMENTS

The particulars of loans, guarantees and investments given under Section 186 of the Companies Act, 2013 have been disclosed in the financial statements.

CORPORATE SOCIAL RESPONSIBILITY

We at RAMA aim to create economic value and to actively contribute toward the development of a sustainable society by taking up projects for the common good through responsible business practices and good governance. In line with the requirement of Section 135 of the Companies Act 2013 your Company having a Corporate Social Responsibility Committee. The details of Committee and the terms of reference are provided in corporate governance report. The CSR Policy of the Company is available on its website at the link: http://ramasteel.com/cms/ policy-and-code-of-conduct.

During the year the Company has spent Rs. 23.86 Lakhs on CSR activities for the financial year 2018-19 as annexed herewith Annexure- IV to this Report.

Aforesaid CSR money paid to Konfyans Charitable Public Trust for purpose of women empowerment and social development.

INTERNAL FINANCIAL CONTROL

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

Fraud-free and corruption free work culture has been the core of the Companys functioning. In view of the potential risk of fraud and corruption due to rapid growth and geographical spread of operations, the company has put even greater emphasis to address the risk.

To meet this objective, a Whistle Blower Policy has been laid down. The same policy is approved by the Board was uploaded on the Companys website (www.ramasteel.com).

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. No complaint has been received for sexual harassment of women at work place by the Company during the financial year 2018-19.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, Board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and Corporate Governance requirements as prescribed by SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015.

PARTICULARS OF EMPLOYEES RELATED DISCLOSURES

a. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below :

i. The ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Non-executive directors Ratio to median remuneration
Mr. Bharat Bhushan Sahny N.A.
Mr. Rajendra Prasad Khanna N.A.
Mrs. Anju Gupta N.A.
Executive directors
Mr. Naresh Kumar Bansal 32.00
Mr. Richi Bansal 27.00
Mr. Surender Kumar Sharma 3.00

ii. The percentage increase in remuneration of each director, chief executive officer, chief financial officer, company secretary in the financial year:

Directors, Chief Financial % increase in remuneration in the financial year
Officer and Company Secretary
Mr. Bharat Bhushan Sahny N.A.
Mr. Rajendra Prasad Khanna N.A.
Mrs. Anju Gupta N.A.
Mr. Naresh Kumar Bansal, 9.89%
Managing Director
Mr. Richi Bansal, Executive 11.84%
Director
Mr. Rajeev Kumar Agarwal, N.A.
Chief Financial Officer
Mr. Kapil Datta, Company 1.69%
Secretary

b. The percentage increase in median remuneration of employees in the financial year: NIL

c. The number of permanent employees on the rolls of Company : 130

d. Variations in the market capitalisation of the Company, price earning ratio as at the closing date of the current financial year and previous financial year : N.A.

e. Percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer: N.A.

f. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

The average annual increase was 6.5%.

Increase in the managerial remuneration for the year was 10.41%.

g. The Company affirms that the remuneration is as per remuneration policy of the Company.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there is no such employee drawing remuneration in excess of the limits set out in the said rules and are required to be disclosed.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 enclosed as Annexure V.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

A) CONSERVATION OF ENERGY :

a) The Company has always been particular to conservation of energy on continuous basis by closely monitoring energy consuming equipment involving use of energy generating diesel set and power purchased from Electricity Board e.g. size of the Equipments is optimum to save energy. The low-efficient Machinery and Equipments are identified and replaced.

b) Keeping in view the nature of the manufacturing process no additional investment is proposed and hence further consumption of energy is ruled out in the near future.

c) No specific studies regarding impact of the above measures of (a) and (b) have been carried out and the cost impact of energy cost and energy saving measures on cost of production of goods is not material, as it forms a very low percentage vis-a vis the cost of Companys product.

d) Total energy consumption and energy consumption per unit of production is given as per Form-A.

B) TECHNOLOGY ABSORPTION, ADOPTION AND INNOVATION :

I. RESEARCH AND DEVELOPMENT (R&D)

i. Specific area in which R & D carried out by the Company :

There is no specific area in which the Company has carried the R & D. However, the Company is continuously making efforts for improvements in its production process for better productivity and cost efficiency.

ii. Future plan of action

The Company plans to monitor continuously the plant efficiency thus reducing the shortage and reducing the cost of production.

iii. Expenditure on R & D

The company did not incur any Expenditure on R&D.

II. TECHNOLOGICAL, ABSORPTION, ADAPTATION & INNOVATION :

i. Efforts made towards Technology Absorption :

For the goods manufactured by the Company there is a simple process of ERW manufacturing technique and the Company has already adopted the same and no innovations have been carried by the company, as there is no other available alternative that would ensure further cost efficiency.

ii. Particulars relating to imported technology :

The Company has not imported any technology and the plant is working with completely Indigenous Technical know-how.

C) FOREIGN EXCHANGE EARNING AND OUTGO :

(Rs. In Lacs)
Current year Previous year
a) Total Foreign 1433.65 4240.37
Exchange Earning
b) Total Foreign 16.51 38.20
Exchange Outgo

FORM ‘A

POWER AND FUEL CONSUMPTION

Current Year Previous Year
1. Electricity
(a) Purchased Unit 4296602 3866952
Total amount (in Rs.) 2,52,21,764 2,39,78,501
Rate/unit 5.92 6.20
(b) Own generation
Through Diesel 129685 66789
Generator Unit
Unit per Litre of 4.67 4.68
Diesel Oil
Total Amount (in Rs.) 17,88,622 9,77,434
Cost/Unit 13.79 14.63
2. Furnace Oil 192144 160721
Quantity(litres)
Total Amount (in Rs.) 78,01,583 54,97,804
Average Rate Rs./litre 40.60 34.21

CONSUMPTION PER UNIT OF PRODUCTION

ELECTRICITY (UNIT) FURNACE OIL/GAS (LITRE/SQ. CUBIC MTR)
NAME OF PRODUCT UNIT CURRENT YEAR PREVIOUS YEAR CURRENT YEAR PREVIOUS YEAR
Black Steel Tubes/Pipes Per Ton 59.16 73.25 -- --
Galvd. Steel Tubes/Pipes Per Ton 63.16 77.65 10.13 26.60

ACKNOWLEDGEMENT

The Directors acknowledge the contributions made by the employees towards the success and growth of the company. Your Directors also take this opportunity to express sincere thanks to the Government Authorities, Financial Institutions and the Bankers for their co-operation and assistance to the Company. The Directors would also like to acknowledge the continued support of the Companys shareholders in all its endeavors.

Sd/-
Place: Ghaziabad, UP (Naresh Kumar Bansal)
Date: May 28, 2019 Chairman & Managing Director