You can view full text of the Director's Report for Ramsarup Industries Ltd.
We are presenting the 36th Annual Report together with the Audited
Statement of Accounts of the Company for the financial year ended 31st
1. PERFORMANCE OF THE COMPANY
the Highlights of the performance of the Company during the Financial
Year ended 31st March 2015 are appended below:- (Rs, in Cr.)
Particulars 2014-15 2013-14
total Revenue 4.46 10.53
profit/(loss) before Interest ,
Depreciation & tax (5.97) (1.86)
Add : Interest 123.64 455.72
: Depreciation 50.30 31.41
profit / (loss )Before tax (179.91) (489.00)
provision for tax -
profit (loss) after tax
carried to Balance Sheet (179.91) (489.00)
Highlights of performance during the financial year 2014-15 are:
total Revenue from operation of the Company is Rs.4.38 crores as
against Rs. 10.30 crores in the previous year.
operating profit / (loss) is Rs (5.97) crores as against Rs (1.86 )
crores in the previous year.
profit / (loss) before taxation is Rs (179.91) crores as against Rs
(489.00) crores in the previous year.
profit / (loss) after tax is Rs (179.91) crores as against Rs (489.00)
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.
Interest for the year on funds borrowed has been debited till June,
2014 and subsequently 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. 395.84 crores.
Due to change in the method of depreciation as required by the
Companies Act, 2013, the useful life of assets are recomputed on
01.04.2014 and the assets whose useful life has expired amounting of
Rs. 3,11,76,027/- has been transferred to the opening balance of
retained earnings. Also due to change in method of depreciation, the
depreciation for the year is higher by Rs. 20,00,92,023/- in the
Statement of profit & loss Account leading to higher losses to similar
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.
Further one of the wind mill was under break down for most part of the
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.
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
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
2015-16.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 organization. the Company has an
adequate system of internal control supported by an extensive
programmed of internal control and systems are established to ensure
that financial and other records are reliable for preparing financial
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
3. PARTICULARS FOR EMPLOYEES U/S 197 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
4. 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.
5. particulars of loans, guarantees 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.
- There was no change in the directorships of the company during the
- Board Evaluation:
pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the listing Agreement, the Board has carried out an evaluation of its
own performance, the directors individually as well as the evaluation
of the working of its Audit, nomination& Remuneration and Stakeholders
As directed by the Companies Act, 2013, the Board in its Meeting held
on 30th May 2015, adopted a policy for evaluation of itself along with
all its committees and all the Directors individually.
Based on such policy, the Board in its first Board Meeting held after
the end of Financial Year 2014-15, performed an evaluation, on a
comprehensive basis, of its own working, as well as working of all its
committees. the evaluation also included personal evaluation of
As a result of such evaluation some advises generated, which the entire
Board noted and adopted to follow in its future performance.
- 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.
Details of the various meetings held during the financial year 2014-15
have been given in the Corporate Governance Report. During the year
under review, 4(four) Board meetings were held on 21/05/2014,
08/08/2014, 01/11/2014 and 11/02/2015.
- In accordance with the provisions of Section 152 of the Companies
Act, 2013 Mr. Shambhunath Kairi retires by rotation and, being
eligible, offers himself for re-appointment.
- Independent Directors:
the Company doesn''t have Independent Directors thus, requirement of
Clause 49 (II A) of the listing agreement and Company Act, 2013 was not
the total strength of your Board of Directors as on 31st March, 2015 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.
7. 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 2015, 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
(iv) that the Directors have prepared the accounts for the financial
year ended 31st March 2015 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.
8. 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
- 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 2015-2016.
the observations / qualifications made by the Statutory Auditors in
their report for the year under review are self- explanatory and have
also been further amplified in the notes to financial statements.
- 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
- Reply to the observation of the Secretarial Audit Report is annexed
as "Annexure C.
10. MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION OF THE
there were no material changes affecting the financial position of the
company occurring between the date of Financial Statements and the
11. 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
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.
12. 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
ii) Reuse of waste oil in furnaces.
iii) Regular monitoring of leakages of compressed air and fuel oil to
iv) Controlling of idle running of equipment during stoppages to save
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
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
C. Foreign Exchange
Foreign exchange earnings and outgo were nIl during the year.
13. 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
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.
15. ratio of director remuneration To median of employees
the directors of the Company are not drawing any salary. so the point
of calculation of ration is not applicable. However, the median
remuneration of the employees of the company during the financial year
was Rs. 2.25 lacs.
16. 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 behavior or
wrongful conduct in the Company and to prohibit managerial personnel
from taking adverse personnel action against such employee.
17. 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.
19. PREVENTION OF INSIDER TRADING
the Code requires pre-clearance for dealing inthe 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.
20. RISK MANAGEMENT
pursuant to section 134 (3) (n) of the Companies Act, 2013, the company
has adopted a Risk Management policy. the Board identified some risks
that may affect the business of your Company and segregated them in
various categories. Based upon such categorization Board has directed
the Management to adopt and follow certain preventive steps. However
Committee for Risk Management has not been formed.
21. 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.
22. CEO CERTIFICATION
the Managing Director of the Company have submitted a certificate to
the Board as required under Clause 49 of the listing Agreement for the
year ended 31st March 2015.
23. compliance certificate
A Certificate from the Statutory Auditors of the Company regarding
compliance of conditions of Corporate Governance as stipulated under
Clause 49 of the listing Agreement is attached to this Report.
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.
Kolkata Aashish Jhunjhunwala
Dated : 30.05.2015 Managing Director