DIRECTORS' REPORT Dear Shareholders, Your Directors have pleasure in presenting the 31 st Annual Report of your company along with the Audited Financial Statements of the Company for the year ended 31 st March 2015, 2. Operational Review/State of the Company's affairs During the year under review, global economy continued to remain under pressure. The growth rates fell mainly in all the emerging economies, and the major economies such as China, Japan and Euro zone showed signs of slow down. USA was better placed amongst the developed economies. Within the country, there were signs of improvement post formation of the new Government in the Center and ours was one of the better performing economies growing by 7.2% compared to 6.9% in 2013-14. During the year under review, the Company has not changed any of its Business. Lower crude prices and the initial positive sentiments due to a new government being in the Center helped improving the general economic scene. Lower inflation and resultant moderate reduction in effective interest rates also helped to some extent. However, the major revival of the economy In general is yet to take place. Notwithstanding these not so positive economic conditions, your company was in a position to perform relatively better, mainly because of orders from infrastructure and Oil & Gas projects. During this year, your companys net revenues grew by 23.84% while Profit Before Tax grew by 21.71 %. The Profit After Tax was higher by 20.80%. 3. Dividend The Board is pleased to recommend a dividend of Rs. 5.50/- per Equity Share having face value of Rs. 2/-each (i.e. 275% on the paid-up capital) for the year ended 31s1 March 2015 for consideration of the Members at the ensuing Annual General Meeting. The total dividend payout for the financial year 2014-15 shall be Rs. 3093.24 lacs comprising of dividend amounting to Rs. 2570.04 lacs and dividend tax of Rs.523.20 lacs. 4. Transfer to General Reserve A sum of Rs.10,000 lacs has been transferred to the General Reserve of the Company for the financial year 2014-15. 5. Share Capital The paid up Equity Share Capital as on March 31,2015 was Rs. 934.56 Lacs. 6. Allotment of shares under employee stock options During the year under review, 44,550 equity shares were allotted on exercise of the options granted under ESOS, 2006. Total 5,22,000 options lapsed on expiration of the scheme on 31 st October, 2014, 7. Finances The Company has repaid the installments of Long Term ECB amounting to Rs. 818.00 Lacs during the current year. The outstanding amount of Long Term ECB as on 31 st March, 2015 was equivalent to Rs. 1681.60 Lacs. There were no material changes and commitments affecting the financial position of the Company which occurred between the end of the financial year to which these financial statements relate and the date of this Report, 8. Fixed Deposits Your Company has not invited or accepted any deposits from the shareholders and public during the year. There are no outstanding and overdue deposits as at 31 st March, 2015, 9. Particulars of loans, guarantees or investments under Section 186 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. 10. Directors and Key Managerial Personnel A) Directors a) Shri Jayanti. M. Sanghvi will retire at the forthcoming Annual General Meeting of the Company and being eligible, offers himself for reappointment. b) Pursuant to the Provisions of Sections 149,152 and other applicable provisions of the Companies Act, 2013 and the rules made thereunder, read with Schedule IV to the Companies Act,2013, your Directors appointed Smt. NiddhiG. Gadhecha as an Additional Director of the Company to hold office upto the ensuing Annual General Meeting, The Company has received notice together with requisite deposit of X1 Lac under Section 160 of the Companies Act, 2013, from a member of the Company proposing the candidature of Smt. Niddhi G. Gadhecha as an Independent Director, for a continuous term upto the conclusion of 35th Annual General Meeting to be held in the Year 2019, Her office as Independent Director shall not be subject to retirement by rotation. Details of the proposal for appointment of Smt. Niddhi G. Gadhecha are mentioned in the Explanatory Statement under Section 102 of the Companies Act, 2013 of the Notice of the ensuing Annual General Meeting. c) The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as per Section 149 (6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. d) Annual Evaluation of Directors Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of Its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report, e) Remuneration Policy The Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration as recommended by the Nomination & Remuneration Committee. The Remuneration Policy is stated in the Corporate Governance Report. f) The details of programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: <http://www>. ratnamani.com/investors_relations html B) Key Managerial Personnel Mr. Rajeev Mundra has been appointed as a Company Secretary and Compliance officer of the Company in the Board meeting held on 21 st May, 2014 and resigned in the Board meeting held on 7th August, 2015. Mr. Jigar Shah has been appointed as a Company Secretary and Compliance officer with effect from 20th August, 2015. 11. Statutory Auditors In compliance with the Companies (Audit and Auditors) Rules,2014, M/s. Mehta Lodha & Co., Chartered Accountants and M/s. S.R.B.C & Co. LLP Chartered Accountants, Statutory Auditors of the Company, have been appointed as Statutory Auditors of the Company to hold office till the conclusion of the 33rd and 35th Annual General Meeting respectively, as approved by the members at their 30th Annual General Meeting held on 11 th September, 2014. Further, pursuant to the reauirement of Section 139 of the Companies Act, 2013, the appointment of Statutory Auditors is to be ratified by the members at every Annual General Meeting. Members are reauested to ratify their appointment for the F.Y. 2015-16, The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark. 12. Cost Auditors Your Directors have, on the recommendation of the Audit Committee, appointed M/s N. D. Birla & Co., Cost Accountants to audit the Cost accounts of the Company for the financial year 2015-16 on a remuneration of Rs. 1,00,000/- plus taxes as applicable and out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is reauired to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Members' ratification for the remuneration payable to M/s N.D. Birla & Co., Cost Accountants is included at item No. 6 of the Notice convening the Annual General Meeting. The Cost Auditors' Report does not contain any qualification, reservation or adverse remark, 13. Secretarial Audit Report In line with the requirements of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with other applicable provisions, if any; the Board of Directors of the Company had appointed M/s M. C. Gupta & Co. Company Secretaries to conduct Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report for the financial year ended March 31, 2015 is annexed with the Directors' Report and forms part of the Annual Report as given inAnnexure-"H", 14. Credit Rating CRISIL has upgraded the rating for the Companys long-term borrowings to "AA" from "AA(-)" and reaffirmed "Al +" (Al plus) for its short-term borrowings. 15. Subsidiaries and Consolidated Financial Statement During the year under review, the Company has setup a Wholly Owned Subsidiary in the State of Delaware, USA in the name "Ratnamani Inc". A report on the performance and financial position of the subsidiary is given in Annexure-"B". Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 read with Clause 41 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with Accounting Standard 21 (Consolidated Financial Statements) of the Institute of Chartered Accountants of India, for financial year ended March 31, 2015. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary company 16. Particulars of Employees The information reauired pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is set out in Annexure-"F" forming part of this report, 17. Risk Management Your company has an elaborate Risk Management procedure covering Business Risk, Operational Controls Assessment and its Policy and Compliance processes. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Some of the identified risks relate to currency exchange and raw material cost volatility. Your company has set up a new Risk Management Committee in accordance with the reauirements of Listing Agreement to monitor the risks and their mitigating actions. The key risks and mitigating actions are also placed before the Audit Committee of the Company. Foreign Exchange transactions are fully covered with strict limits placed on the amount of uncovered exposure, if any, at any point in time. There are no materially significant uncovered exchange rate risks in the context of companys imports and exports. The Company accounts for mark-to-market gains or losses every quarter end, in line with the requirements of Accounting Standard 11. The details of foreign exchange earnings and outgo as required under Section 134 and Rule 8(3) of the Companies (Accounts) Rules, 2014 are mentioned in Annexure-'A", 18. Internal Control Systems and Their Adequacy The Company has Internal Control Systems, commensurate with the size, scale and complexity of its operations. The Internal Audit function is handled by an external firm namely M/s. G. K. Choksi & Co. Chartered Accountants. The internal control systems are regularly being reviewed by the Companys Internal Auditors with a view of ensure that these are working properly and wherever required, are modified / tighten to meet the changed business requirements, All the process owners are certifying the compliance to all applicable rules, regulations and laws every quarter to the Board and are responsible to ensure that internal controls over all the key business processes are operative. The scope of the Internal Audit is defined and reviewed every year by the Audit Committee and inputs, wherever required, are taken from the Statutory Auditors, The Internal Auditors look into and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Auditors, major audit observations and corrective actions thereon are presented to the Audit Committee of the Board. 19. Directors' Responsibility Statement Pursuant to Section 134 (5) of the Companies Act, 2013, the Board of Directors hereby states and confirms that: a. in the preparation of the annual accounts, the applicable Accounting Standards had been followed, along with proper explanations relating to material departures. b. the Directors 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 at the end of the financial year and of the profits of the Company for that period, c. the Directors had 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. the Directors had prepared the Annual Accounts on a 'going concern' basis. e. the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adeauate and were operating effectively. f. the Director had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. 20. Corporate Governance Report and Management's Discussion and Analysis Report Your company is committed to the tenets of good Corporate Governance and has taken adequate steps to ensure that the reauirements of Corporate Governance as laid down in Clause 49 of the Listing Agreement are complied with. The details are given in Annexure-"C". The Board has framed Code of Conduct for all Board members and Senior Management of the Company and they have affirmed the compliance during the year under review, The Board has also framed "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information". The Code casts obligations upon the Directors and Officers of the Company to preserve Price Sensitive Information, which may likely to have a bearing on the share price of the Company. Those In the knowledge of any such information are prohibited to use such Information for any personal purpose, Similarly, the Code also prescribes how such information needs to be handled, disclosed or made available to the Public through Stock Exchanges, Companys web site. Press, Media, etc. The Company Secretary has been entrusted with the duties to ensure compliance. The Board has received CEO/CFO Certification under sub-clause V of the Clause 49 of the Listing Agreement. As per Clause 49 of the Listing Agreement with the Stock Exchanges, the Corporate Governance Report, Management Discussion and Analysis and the Secretarial Auditor's Certificate regarding compliance of conditions of Corporate Governance are attached and form part of the Annual Report. 21. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo Information reauired under Section 134 (3) (m) of the Companies Act, 2013, read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, as amended from time to time is given in Annexure-"A" forming part of this report. The Company has commissioned windmills at various places for "Green Energy Generation", thus continuing to contribute, in a small way, towards a greener and cleaner earth, 22. Corporate Social Responsibility (CSR) The Corporate Social Responsibility Committee (CSR Committee) has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, which has been approved by the Board. The CSR Policy may be accessed on the Companys website at the link: <http://www.ratnamani.com> / corporate_social_responsibility. html The key philosophy of all CSR initiatives of the Company is guided by the Companys philosophy of giving backto the society as a responsible corporate citizen, The Company has identified the following as focus areas of engagement: a. Education: Access to quality education, training and skill enhancement, b. Environment: Environmental sustainability, ecological balance, conservation of natural resources. c. Rural Transformation: Provision of drinking water, sewage facilities, sanitation facilities and roads. d. Health: Affordable solutions for healthcare through improved access and awareness. e. The Company would also like to undertake other need-based initiatives in future. During the year, the Company has spent Rs. 157.46 lacs out of Rs. 362.20 lacs (2% of the average net profits of last three financial years) on CSR activities. The Annual Report on CSR activities is annexed herewith marked as Annexure-"D". The reasons for not spending total amount are mention therein, 23. DISCLOSURES: Vigil Mechanism The vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, Protected disclosures can be made by a whistle blower through an e-mail, or a letter to the Chairman of the Audit Committee, The Policy on vigil mechanism and whistle blower policy may be accessed on the Companys website at the link: <http://www.ratnamani.com> / downloads / investorsjnformation / VIGIL%20MECHANISM-POLICY.pdf Related Party Transactions All the related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company, All Related Party Transactions have been placed before the Audit Committee and also the Board for approval. The Company has framed a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at link <http://ratnamani.com> / downloads / investors_information/RELATED_PARTY_TRA_POLICY. pdf. Since all related party transactions entered into by the Company were in ordinary course of business and were on an arm's length basis, form AOC - 2 is not applicable to the Company. Meetings of the Board Five meetings of the Board of Directors were held during the year. For further details, please refer report on Corporate Governance on page no. 24 of this Annual Report. Extract of Annual Return Extract of Annual Return in Form No. MGT-9 of the Company is annexed herewith as Annexure-"E" to this Report. Sexual Harassment Of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 The Company is an equal opportunity company and has zero tolerance for sexual harassment at workplace, It has adopted a policy against sexual harassment in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed thereunder, During the financial year 2014-15, there was no complaint/case of sexual harassment and hence no complaint remains pending as of 31 March, 2015, General Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions / instances on these items during the year under review: a. Issue of equity shares with differential rights as to dividend, voting or otherwise, b. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report, c. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries, d. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and companys operations in future. Appreciation Your Directors wish to place on record their gratitude for the valuable guidance and support rendered by the Government of India, various State Government departments, Financial Institutions, Banks and various stakeholders, such as, shareholders, customers and suppliers, among others, The Directors also commend the continuing commitment and dedication of the employees at all levels, which has been critical for the Companys success. The Directors look forward to continued support of all stakeholders in future also. For and on behalf of the Board of Directors Prakash M. Sanghvi Chairman and Managing Director DIN :00006354 Place: Ahmedabad Date : August 7, 2015 |