Ramsarup Industries Ltd Directors Report.

Directors’ Report

Dear Members,

We are presenting the 37th Annual Report together with the Audited Statement of Accounts of the Company for the financial year ended 31st March 2016.

1. PERFORMANCE OF THE COMPANY

The Highlights of the Performance of the Company during the Financial Year ended 31st March 2016 are appended below:( Rs. in Cr.)

Particulars 2015-16 2014-15
Total Revenue 6.38 4.46
Profit/(Loss) before Interest, Depreciation & Tax 1.87 (5.97)
Add : Interest 0.06 123.64
: Depreciation 44.14 50.30
Profit / (Loss)Before Tax (42.33) (179.91)
Provision for Tax - -
Profit/(Loss) after Tax carried to Balance Sheet (42.33) (179.91)

Financial Performance

Highlights of performance during the financial year 2015-16 are:

Total Revenue of the Company is Rs. 6.38 crores as against Rs. 4.46 crores in the previous year. EBIDTA is Rs. 1.87 crores as against Rs. (5.97) crores in the previous year.

Profit / (Loss) before taxation is Rs. (42.33) crores as against Rs. (179.91) crores in the previous year. Profit / (Loss) after Tax is Rs. (42.33) crores as against Rs. (179.91) crores in the previous year.

The company has incurred substantial losses due to non operation of all the manufacturing units and day to day administrative expenses. The company has not debited interest on borrowed funds as accounts of the company had turned NPA in the earlier years. This has led to lower losses to the extent of Rs. 602.96 crores. Further as suspension of manufacturing activities has taken place in all the manufacturing units, no production has taken place (except generation of power in Wind Mills) there are indications which suggest impairment in the value of plant and machineries and other fixed assets of the company, for which the management is in process of getting the study carried out. During the year ended 31.03.2012 the net worth of the company had eroded and the company had become Sick Industrial Company as per the provisions of Sick Industrial Companies (Special Provision) Act 1985 (SICA) and the Company was required to make reference with the Board for Industrial and Financial Reconstruction (BIFR). Necessary compliances had been made in accordance with the provision of SICA and reference of the company registered with Hon’ble BIFR as Case No. 67/2012 was intimated vide letter No. 3(R-4)/BC/2012 dated 21st November 2012 by the Ld. Registrar of the Board for Industrial & Financial Reconstruction. Subsequently the matter was in AAIFR appeal No. 78 / 2014 dtd. 11.04.2014 and AAIFR set aside the impugned order and remand the matter back to BIFR with direction to consider the submission of all the parties and pass order afresh after giving specific finding through a reasoned order.

Dividend

In view of the losses incurred during the year under review your Directors do not recommend any dividend for the current financial year.

Reserve and Surplus

The Net worth of your company has eroded and the company has not transferred any amount to the reserves.

2. MANAGEMENT DISCUSSION AND ANALYSIS

Future of Indian steel industry looks encouraging due to reasonable GDP growth of India as we have a stable government at the Centre.

Major issues that have been affecting adversely the steel industry have been availability of Iron Ore & Coal. Iron ore availability has improved due to opening up of iron ore mines and drop in international prices.

International prices of both Coking coal and Steam coal has come down substantially which will help the bottom line of the steel industry.

The company is not expecting good performance during the year 2016-17.Once the revival and rehabilitation / settlement package of the company is submitted and approved by the appropriate authority/institutions the company has the knowledge, ability to get back to its glorious past in time to come.

A. Internal Control Systems

We have always believed in transparency, which is an important factor in the success and growth of any organisation. The Company has an adequate system of internal control supported by an extensive programme of internal control and systems are established to ensure that financial and other records are reliable for preparing financial statements. However, due to closer of the plant not much benefits have taken place during the year under review.

B. Human Resources

During the year under review employee/industrial relation continued to suffer a setback due to suspension of work at its manufacturing units.

C. Cautionary Statement

The Management Discussions and Analysis describe Company’s projections, expectation or predictions and are forward looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the company’s operations include economic conditions affecting demand and supply and price conditions in domestic and international market, changes in Government regulations, tax regimes, economic developments and other related and incidental factors.

3. PARTICULARS FOR EMPLOYEES U/S 197 OF COMPANIES ACT, 2013 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONANNEL) RULES, 2014

During the year under review, no employees of your company were in receipt of remuneration in excess of the limits prescribed under the above section.

4. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY

The Company has in place and established control system designed to ensure proper recording of financial and operational information and other regulatory and statutory compliance commensurate with size and scale of its operation. The Company has also a system for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and maintenance of accounting records and the timely preparation of reliable financial statement.

The Company has its Audit committee which evaluates the internal financial control system periodically. The observation and comments of the Audit committee are placed before the Board.

5. PUBLIC DEPOSIT

The Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

6. PARTICULARS OF LOANS, GURANTEES OR INVESTMENTS:

The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by the company are given in the notes to the financial statements.

7. DIRECTORS

• There was no change in the directorships of the company during the year

• Remuneration Policy

The Board has not adopted any remuneration policy due to non constitution of nomination and remuneration committee. However none of the Directors have drawn any salary during year in review and no fresh Key Managerial Personnel has been appointed. Further since the manufacturing plants of the company are under suspension with hardly any activity in the company there no other KMP’s too.

• Meetings:

Details of the various meetings held during the financial year 2015-16 have been given in the Corporate

Governance Report. During the year under review, 4(four) Board meetings were held on 30/05/2015, 08/08/2015, 09/11/2015 and 29/01/2016.

• In accordance with the provisions of Section 152 of the Companies Act, 2013 Mr. Pradip Kumar Das retires by rotation and, being eligible, offers himself for re-appointment.

• Independent Directors:

The Company doesn’t have Independent Directors thus, requirement of Clause 17(1) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 was not complied.

The total strength of your Board of Directors as on 31st March, 2016 is Three members consisting of one Managing Director and two executive directors leading to non-compliance of the clause which requires that at least 50% of the Board should comprise of Non-executive directors and 50% of the Board should also comprise of Independent Director, if Chairman is executive director. However, the Company had been registered with BIFR and subsequently the matter had been referred to AAIFR and AAIFR set aside the impugned order and remand the matter back to BIFR with direction to consider the submission of all the parties and pass order afresh after giving specific finding through a reasoned order. Due to the above situation company is facing difficulty in inducting Independent Directors on the Board. For the same reason Company has not been able to appoint a Woman Director.

8. DIRECTORS’ RESPONSIBILITY STATEMENT

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

(i) That in preparation of the accounts for the financial year ended 31st March 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) That the Directors have selected such accounting policies and applied them consistently and made judgment and estimates that were 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 or loss of the Company for the year under review; (iii) That the Directors 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; (iv) That the Directors have prepared the accounts for the financial year ended 31st March 2016 on a ‘going concern’ basis.

(v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

(vi) The directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

9. CORPORATE GOVERNANCE

Your Company recognizes the importance of good Corporate Governance in building stakeholders’ confidence, improving investor protection and enhancing long-term enterprise value. A report on Corporate Governance is annexed.

10. AUDITORS

• M/s P.K. Lilha & Co., Chartered Accountants, have communicated their willingness to act as the statutory auditors of the Company subject to necessary approval at the forthcoming Annual General Meeting under Section 139 and 140 of the Companies Act, 2013 and the Board recommended their appointment for the period 2016-2017.

Auditors Report

The observations / qualifications made by the Statutory Auditors in their report for the year under review are self-explanatory and the modified opinion is given in "Annexure B".

• Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed M/s. D. Raut & Associates, a Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure C".

• Reply to the observation of the Secretarial Audit Report is annexed as "Annexure D".

11. MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There were no material changes affecting the financial position of the company occurring between the date of Financial Statements and the Board Report.

However, Punjab National Bank has declared the company as a wilful defaulter without giving proper hearing to the company and for incorrect reasons. The matter has been taken up with the Bank to withdraw the same.

12. RELATED PARTY TRANSACTIONS :

There were no related party transactions made by the Company with its Promoters, Directors or Management, their subsidiaries or relatives etc. that may have potential conflict with the interests of the Company at large.

During the year loan payable by the Company to related party has increased / decreased with overall increase in the payable. Above loan is free of interest.

The details have been disclosed in the Notes to the Accounts.

13. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES: NIL 14. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE :

The Company believes in women empowerment and always encourage the recruitment of women at its workplace to the extent possible. The Company has zero tolerance against sexual harassment towards women at workplace. The women employees are always encouraged and have been advised to report any such harassment to the Board directly. The Company has a system for prevention, prohibition and redressal of sexual harassment at workplace in line with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the FY 2015-16, the Company has received no complaints of sexual harassment.

15. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE EARNING AND OUTGO:- A. Conservation of Energy:

All plants are shut down but in the past following energy conservation measures were taken:

i) Periodic checking and supervision of the Electrical Distribution Network and corrective and proactive measures helped to maximize energy usage, ensuring as effective and efficient system of energy distribution.

ii) Reuse of waste oil in furnaces.

iii) Regular monitoring of leakages of compressed air and fuel oil to save fuel.

iv) Controlling of idle running of equipment during stoppages to save energy.

v) Applying right voltage to the systems through transformers with automatic voltage regulator.

vi) Reduction in steam, lower power consumption during peak hour rate.

vii) The company’s technical cell continued to implement and find ways to conserve energy, avoiding any unnecessary operation and wasteful practice.

viii) Shutting down all electrical equipments and other appliances, when not in use, to avoid wastage of energy.

ix) Installing soft starter’s at all electrical control panels, to reduce power consumption.

B. Technology Absorption:

All plants are shut down but in the past following technology absorption measures were taken:

• Research & Development - There had been ongoing efforts to improve productivity levels and quality standards but no specific research and development was required.

• Technology absorption, Adaptation & Innovation - Indigenous development of technology had taken place continuously.

• Particulars of technologies imported during last 5 years - Not applicable.

C. Foreign Exchange

Foreign exchange earnings and outgo were NIL during the year.

16. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Companies (Corporate Social Responsibility Policy) Rule, 2014 is not applicable to the Company. However, your Company respects society value and makes endeavor to contribute for the societal cause as far as possible.

17. ENVIRONMENT

All the manufacturing units of the company are closed but necessary equipments have been installed in the manufacturing units in order to comply with all regulatory measures so that no harm is caused to the society and nature at large. Though the Company’s operations are not inherently polluting in nature, the Company continues to take adequate precautions to comply with all regulatory measures in this regard at all the educational premises and sites, so that no harm would cause to the society and the nature at a large.

18. RATIO OF DIRECTOR REMUNERATION TO MEDIAN OF EMPLOYEES

The directors of the Company are not drawing any salary so the point of calculation of ratio is not applicable. However, the median remuneration of the employees of the company during the financial year was Rs. 1.34 lacs.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company being a sick company and thus the requirement of vigil mechanism is not fulfilled by the company. This policy is formulated to provide opportunity to all the employees to access in good faith, to the Audit Committee of the Company in case they observe any unethical and improper practice or behaviour or wrongful conduct in the Company and to prohibit managerial personnel from taking adverse personnel action against such employee.

20. DECLARATION ON COMPLIANCE WITH CODE OF CONDUCTS

The Board has formulated a Code of Conducts for the Board Members and Senior Management of the Company, which has been posted on the website of the Company.

It is hereby affirmed that all the Directors and Senior Management Personnel have complied with the Code and a confirmation to that effect has been obtained from the Directors and the Senior Management.

21. PREVENTION OF INSIDER TRADING

The Code requires pre-clearance for dealing in the Company’s shares and prohibits the purchase or sale of Company’s shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

All Directors and the designated employees, who hold any shares in the Company, have confirmed compliance with the Code.

22. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure A".

23. CEO CERTIFICATION

The Managing Director of the Company have submitted a certificate to the Board as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for the year ended 31st March 2016.

24. COMPLIANCE CERTIFICATE

A Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 17(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this Report.

ACKNOWLEDGEMENTS

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from shareholders, customers, vendors, bankers, and other business constituents for their support during the year under review. Your Directors also wish to place on records their deep sense of appreciation for the commitment displayed by all employees during the year.

On behalf of the Board of Directors
For RAMSARUP INDUSTRIES LTD.
Aashish Jhunjhunwala
Kolkata Managing Director
Dated : 03.05.2016 DIN : 00351451