Mar 31, 2018
DIRECTORS'' REPORT
TO THE MEMBERS
Your Directors have pleasure in presenting their 82nd Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2018.
1. FINANCIAL RESULTS
The financial results for the year ended 31st March, 2018 after charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial Fund of Rs. 50 Lakhs (which is less than the limits laid in the Articles of Association) but before deducting finance cost and depreciation have resulted in operating profit (EBITDA) of Rs. 7,572.15 Lakhs against Rs. 8,100.23 Lakhs for the previous financial year 2016-17.
After deducting Rs. 1,752.58 Lakhs towards finance cost and providing Rs. 3,285.47 Lakhs towards Depreciation, the Net Profit and other comprehensive income before tax for the year is Rs. 2,510.57 Lakhs, as compared to Rs. 3,759.24 Lakhs for the previous financial year 2016-17. Adding the surplus of Rs. 1,000 Lakhs brought forward from the previous year, your Directors propose to appropriate the total sum of Rs. 3,510.57 Lakhs as detailed below:
(Rs. in Lakhs) |
|
Provision for Taxation - Current Tax |
295.29 |
- Deferred Tax (including MAT Credit Entitlement of Rs. 295.29 Lakhs) |
(686.67) |
Dividend distributed to Shareholders and Dividend distribution tax paid (FY 2016-17) |
355.11 |
Transfer to General Reserve and FVTOCI Reserve |
1,546.84 |
Balance carried over to Balance sheet |
2,000.00 |
TOTAL |
3,510.57 |
2. SHARE CAPITAL
The Paid-up Capital of the Company is Rs. 737.62 Lakhs (Previous Year: Rs. 737.62 Lakhs) consisting of 73,76,160 Shares of Rs. 10/- each.
3. DIVIDEND
Your Directors have pleasure in recommending a Dividend of Rs. 4/- per share (Previous Year: Rs. 4/- per share). The Company will pay Dividend Distribution Tax under Income Tax Act, 1961. The total amount of Dividend outgo for the year will be Rs. 295.05 Lakhs. The amount of tax on dividends would be Rs. 60.65 Lakhs.
4. TAXATION
An amount of Rs. 295.29 Lakhs towards Current Tax has been provided and Deferred Tax of Rs. 391.38 Lakhs has been withdrawn for the year 2017-18. The Company''s entitlement of MAT Credit of Rs. 295.29 Lakhs has been recognized in the books during the year.
5. MANAGEMENT DISCUSSION AND ANALYSIS TRADE CONDITIONS
⢠COTTON
In India, the plantation of cotton crop has increased to 123 Lakh hectares in the cotton year 2017-18 (October to September) as against 103 Lakh hectares in the same period of last year. In spite of increase in acreage, the cotton prices have not come down due to pest attack and erratic monsoon rains. The quality of the cotton was also not good during the initial cotton season. Most of the area in Maharashtra and Gujarat have been hit badly by the pink bollworm attack and the cotton arrivals had been slowed down during peak cotton arrival season. The imported cotton provided no respite as the international cotton prices of all the varieties have continued to move upward. The increase in raw material prices has heavily impacted the manufacturing competitiveness of Indian Spinning Mills in the global market.
The price of comber noils, which is the raw material for Open End Spinning has also increased steeply due to more exports of noils from India. Because of this, the cost of cotton consumption has increased during the financial year 2017-18.
⢠YARN PRODUCTION
The Company is now focusing on production of customized, fine / super fine yarn to get better contribution as compared coarser/ medium fine counts produced during the last financial year 2016-17. Due to this, the production volume has decreased to 151.92 Lakhs Kgs. during the financial year 2017-18 as against 157.39 Lakhs Kgs. of the last financial year.
⢠SALE OF YARN
The sale volume has decreased in line with production during the financial year 2017-18 and it was 155.89 Lakh Kgs. as compared to 159.04 Lakh Kgs. of last financial year. However, the sale value of yarn has increased from Rs. 398.14 Crores (FY 2016-17) to Rs. 417.60 Crores (FY 2017-18).
India''s spinning sector had witnessed challenges on multiple fronts during the FY 2017-18. The implementation of GST in India with effect from 01-07-2017 had affected offtake of yarn during the first quarter of the financial year as many of the customers focused on inventory clearance prior to GST. Post implementation of GST, the Government has reduced the export incentives to yarn as well as fabric and garments. On the other hand, imports of textiles and clothing from other Countries into India have consistently increased by 20%. This has negatively affected the domestic yarn manufacturers as the consumption of yarn by fabric / garment manufacturers has come down sharply. This apart, cotton yarn exports have been under pressure on account of decline in demand from China. Out of total yarn exports from India, China accounted for more than 40% till last year, which has been reduced to 17% during FY 2017-18.
Due to subdued export demand and sluggishness in domestic market for yarn, the Company was not able to increase the yarn prices in line with the increase in raw material cost. These factors have affected the profitability of the Company for the financial year 2017-18. The Company''s focus on value addition, procuring superior quality of cotton, reducing the production of commodity counts and replacing the same with customized yarn counts has helped to mitigate the impact to some extent. The Company is able to attract more customers from overseas market and continues to have a good demand from export market on account of supply of superior and consistent quality of yarn. The investments made in value added machineries during the past years have given the ability to the Company to customize its products in line with the requirements of its customers.
⢠POWER COST
During the financial year 2017-18, the Company was able to consume electricity from its own wind power to the extent of 71% of total power requirement as compared to 68% consumed from wind mills during the last year. Because of this, the power cost has reduced to Rs. 3,093.93 Lakhs during the financial year 2017-18 from Rs. 3,192.05 Lakhs of last financial year 2016-17.
⢠FINANCE COST
The Finance cost during the financial year 2017-18 has reduced to Rs. 1,752.58 Lakhs from Rs. 2,142.79 Lakhs a decline of 18% mainly due to initiatives taken by the Company to reduce the cost of borrowings and repayment of Term Loans.
In spite of increased cotton cost and labour costs, the strategic decision taken by the Company to make investments in value added machines has helped to sustain the volume of sales in export / corporate customers and protected the margin.
6. EXPORTS
On the export front, the Company has made export of Cotton Yarn (including merchant exports) for a value of Rs. 113.66 Crores during the financial year as against Rs. 121.93 Crores of the previous year. In addition to our regular International Market, we have established our presence in Turkey / Portugal also where our quality is well appreciated and started to get regular orders from these segments.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued support and efforts for promotion of exports to Japan.
7. MODERNISATION / EXPANSION
As a part of continuous thrust on modernization and expansion programme, the Company has invested about Rs. 21.82 Crores for investment in textile machinery & equipments like, latest Auto Coners, Quality Control Equipments, Ring Frames etc.,
8. PROSPECTS FOR THE CURRENT YEAR
The BT cotton, which brought white gold revolution to India, has been recently witnessing the incidents of bollworm attack. Due to uncertainty between US and China over trade tariffs, China may import more Indian cotton during the next cotton season. Hence the cotton prices are likely to remain firm on account of a tight supply situation and robust export demand. The Company has well defined system for monitoring demand and supply of required quality of cotton and also the price movements in domestic and international markets. With the Company''s expertise in judicial purchase of cotton, it will be able to procure high quality cotton with reasonable price.
The rising of textile imports due to the removal of countervailing duty and special additional duty post implementation of Goods and Services Tax (GST) is a matter of concern for Indian Textile Industry. Although these duties have been replaced by Integrated Tax under GST regime, the importer can take credit of Integrated Tax which made the textile imports cheaper and posing a threat to domestic manufacturers.
The Company''s efforts to increase the customer base across the globe for supply of value added super fine counts has started yielding the results. The Company is concentrating on modernizing the machineries to further improve quality and cost effective production. Thrust is being given for producing value added counts like Melange yarn, Mercerized yarn, Core Spun yarn etc, which is expected to fetch higher margin in the forthcoming years. With the flexibility to produce value added super fine counts, the Company will continue to make efforts in expanding the marketing activities across the globe to increase the profitability.
9. FABRIC PROJECT
The Company is selling premium yarn qualities to leading woven fabric manufacturers in India and abroad. Most of the customers are outsourcing their fabric requirements beyond their in-house capacity. Such customers are ready to buy yarn dyed greige fabric from our Company if it establishes a weaving unit. Hence it is proposed to establish a ''Yarn Dyed Weaving Unit'' at a cost of Rs, 265 Crores which will have the capacity of 120 Looms to produce 10 Million meters of fabrics per annum. The Company has applied a term loan for this project under Amended Technology Fund Scheme of Government of India. It is expected to commence the commercial production during the 1st quarter of financial year 2019-20.
10. WIND MILL
The Company has wind mills with installed capacity of 35.15 MW for its captive power consumption. The wind farm has generated 682.74 Lakhs Kwh as compared to 683.56 Lakhs Kwh of the previous year. There was a good wind velocity supported by good evacuation by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) during the financial year 2017-18. All the Units generated by wind mills were adjusted for captive consumption at our Mills in Tamil Nadu. The income during the year from the Wind Mill Division was Rs. 45.52 Crores as against Rs. 45.62 Crores of previous year.
11. ASSOCIATE COMPANY
During the year 2017-18, the Company has acquired Shares of M/s. Ramco Windfarms Limited and as per Ind AS - 28, the Board has considered M/s. Ramco Windfarms Limited as its Associate Company.
The Company has 7 Associate Companies, viz., M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, M/s. The Ramaraju Surgical Cotton Mills Limited, M/s. Sri Vishnu Shankar Mill Limited, M/s. Ontime Industrial Services Limited and M/s. Ramco Windfarms Limited.
In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company''s Associates is attached in Form AOC-1 as Annexure - I.
CONSOLIDATED FINANCIAL STATEMENTS
As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (LODR) Regulations, 2015, Companies are required to prepare consolidated financial statements of its Subsidiaries and Associates to be laid before the Annual General Meeting of the Company.
Accordingly, the consolidated financial statements incorporating the accounts of Associate Companies, along with the Auditors'' Report thereon, forms part of this Annual Report. As per Section 136 (1) of the Companies Act, 2013, the Financial Statements including Consolidated Financial Statements are available at the Company''s website at the following link at http://www.rajapalayammills.co.in
The Consolidated net profit of the Company amounted to Rs. 11,543.55 Lakhs for the year ended 31st March, 2018 as compared to Rs. 14,519.45 Lakhs of the previous year.
The Consolidated Total Comprehensive Income for the year under review is Rs. 11,561.02 Lakhs as compared to Rs. 14,507.07 Lakhs of the previous year.
12. INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. ERP System developed by Ramco Systems Limited has been installed for online monitoring of all functions and management information reports are being used to have better internal control system and to take decisions in time.
13. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015 the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy is available at the Company''s website.
14. DIRECTORS
In accordance with the provision of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, the following Directors retire by rotation at the ensuing Annual General Meeting and they are eligible for re-appointment.
1. Shri A.V. Dharmakrishnan, (DIN: 00693181)
2. Shri P.V. Abinav Ramasubramaniam Raja, (DIN: 07273249)
Shri P.V. Abinav Ramasubramaniam Raja (DIN: 07273249) has been appointed as Director liable to retire by rotation at the Annual General Meeting held on 10th August, 2017.
Shri P.A.S. Alaghar Raja (DIN: 00487312) has been appointed as Independent Director for a period of five years with effect from 11-02-2017 at the Annual General Meeting held on 10th August, 2017.
Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules, 2014, it is reported that, other than the above, there have been no changes in the Directors or Key Managerial Personnel during the year under review.
The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. No Independent Director has retired during the year.
The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.
At the Annual General Meeting held on 04-08-2014, the following Directors were appointed as an Independent Directors for a period of 5 consecutive years from 01-04-2014 to 31-03-2019:
1. Shri N.K. Ramasuwami Raja
2. Justice Shri RRS. Janarthana Raja
3. Shri V. Santhanaraman
At the Annual General Meeting held on 12-08-2015, Shri K.B. Nagendra Murthy was appointed as an Independent Director for a period of 5 consecutive years from 04-08-2014 to 03-08-2019.
They are eligible for reappointment for another period of 5 years as Independent Directors. In accordance with Section 149(10) of the Companies Act, 2013, their reappointment has been proposed in the Notice convening the Annual General Meeting as Special Resolutions.
Board of Directors at the Meetings held on 31-01-2018 have evaluated the performance of the Independent Directors and based on the contribution of the Directors, the Nomination and Remuneration Committee have recommended their re-appointment.
The Audit Committee has four members, out of which three are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.
In accordance with Section 178(3) of the Companies Act, 2013 and based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors have approved a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Other Employees.
As per Provision to Section 178(4), the salient features of the Nomination and Remuneration Policy should be disclosed in the Board''s Report. Accordingly the following disclosures are given:
Salient Features of the Nomination and Remuneration Policy: The objective of the Policy is to ensure that:
(a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully;
(b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and
(c) remuneration to directors, key managerial personnel and senior management shall be appropriate to the working of the company and its goals.
The Nomination and Remuneration Committee and this Policy shall be in compliance with the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.
The web address of the Policy is at www.rajapalayammills.co.in/pdf/nomination-and-remuneration-policy.pdf
15. EVALUATION OF BOARD
Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, Performance of the Board as a whole and its Members and other required matters.
Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria for performance evaluation of Independent Directors, which will be based on attendance, expertise and contribution brought in by the Independent Director at the Board Meeting, which shall be taken into account at the time of reappointment of Independent Director.
Pursuant to Regulation 17(10) of SEBI (LODR) Regulations, 2015, the Board of Directors have evaluated the performance of Independent Directors and observed the same to be satisfactory and their deliberations beneficial in Board / Committee meetings.
Pursuant to Regulation 4(f)(2)(ii) of SEBI (LODR) Regulations, 2015, the Board of Directors have reviewed and observed that the evaluation frame work of the Board of Directors was adequate and effective.
The Board''s observations on the evaluations for the previous year were similar to their observations for the year under review. No specific actions have been warranted based on current year observations. The Company would continue to familiarise its Directors on the industry, technological and statutory developments, which have a bearing on the Company and the industry, so that Directors would be effective in discharging their expected duties.
16. MEETINGS
During the year, five Board Meetings were held. The details of the date and number of meetings of the Board and Committees held during the financial year indicating the number of meetings attended by each Director are given in the Corporate Governance Report.
17. SECRETARIAL STANDARD
As required under Clause 9 of Secretarial Standard 1, the Board of Directors confirms that the company has complied with applicable Secretarial Standards.
18. PUBLIC DEPOSITS
Pursuant to Rule 8(5)(v) & (vi) of Companies (Accounts) Rules, 2014, it is reported that the Company has not accepted any deposit from public during the financial year under review. There has been no default in the repayment of deposits / payment of interest thereon during the financial year. The Company has no deposit, which is not in compliance with the Chapter V of the Companies Act, 2013.
The Company has received a sum of Rs. 1,075 Lakhs from Directors as deposit / loan during the financial year 2017-18. It has repaid an amount of Rs. 1,940.94 Lakhs during the financial year 2017-18.
19. ORDERS PASSED BY REGULATORS
Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Company''s operations in future.
20. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:
(a) the particulars of loans are provided under Note No.46 (xiv).
(b) the particulars of the guarantees and investments are provided under Note No.43 and Note No.8 & 9 respectively of Notes forming part of financial statements. The guarantees are to secure the loans from Banks / Financial Institutions to the borrowers.
21. CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and adopted a CSR Policy which is based on the philosophy that "As the Organization grows, the Society and Community around it also grows."
The Company has undertaken various projects in the areas of education, health, rural development, water and sanitation, promotion and development of traditional arts, livelihood enhancement projects, etc. largely in accordance with Schedule VII of the Companies Act, 2013.
Your Directors are pleased to inform that the Company has fulfilled its CSR obligations pursuant to Section 135(5) of the Companies Act, 2013. As against the requirement of Rs. 58.26 Lakhs, the Company has spent Rs. 62.50 Lakhs on CSR during the year 2017-18.
The CSR policy is available at the Company''s website at the following link at http://www.rajapalayammills.co.in
The Annual Report on CSR activities as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - II.
22. AUDITS
STATUTORY AUDIT
The Companies Amendment Act, 2017, had removed the necessity for ratification of the appointment of Statutory Auditors, by Members at every Annual General Meeting during their tenure of appointment. Accordingly, the practice of seeking yearly ratification for the appointment of Statutory Auditors at the Annual General Meeting is dispensed with.
M/s. N.A. Jayaraman & Co., Chartered Accountants and M/s. SRSV & Associates, Chartered Accountants are the Statutory Auditors of the Company.
At the 81st Annual General Meeting, the above Auditors have been appointed as statutory auditors for a period of 5 consecutive years financial years commencing from the financial year 2017-18 and to hold office from the conclusion of 81st Annual General Meeting till the conclusion of 86th Annual General Meeting to be held in the year 2022.
As required under Regulation 33(1)(d) of SEBI (LODR) Regulations, 2015, the Auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The report of the Statutory Auditors for the year ended 31st March, 2018 does not contain any qualification, reservation or adverse remark and no instance of fraud has been reported by Auditors under Section 143(12) of Companies Act, 2013.
SECRETARIAL AUDIT
Shri M.R.L. Narasimha, a Practicing Company Secretary has been appointed to conduct the Secretarial Audit of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditor for the year ended 31st March, 2018 is attached as Annexure - III. The report does not contain any qualification, reservation or adverse remark.
COST AUDIT
The Board of Directors had approved the appointment of Shri M. Kannan, Cost Accountant as the Cost Auditor of the Company to audit the Company''s Cost Records relating to manufacture of textile products for the year 2018-19.
The remuneration of the cost auditor is required to be ratified by the members in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter is being placed before the Members for ratification at the ensuing Annual General Meeting.
The Cost Audit Report for the financial year 2016-17 due to be filed with Ministry of Corporate Affairs by 30-09-2017 had been filed on 06-09-2017. The Cost Audit Report for the financial year 2017-18 is due to be filed within 180 days from the closure of the financial year and will be filed within the stipulated period.
23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.
24. EXTRACT OF ANNUAL RETURN
In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is attached herewith as Annexure - V.
25. CORPORATE GOVERNANCE
The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V(C) of SEBI (LODR) Regulations, 2015 a Report on Corporate Governance being followed by the Company is attached as Annexure - VI. As required under Schedule V(E) of SEBI (LODR) Regulations, 2015 a Certificate from the Auditors confirming compliance is also attached as Annexure - VII to this Report.
26. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) and (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure- VIII.
27. INDUSTRIAL RELATIONS AND PERSONNEL
The Company has 3,028 employees as on 31-03-2018. Industrial relations with employees remained cordial during the year. Human Resources Development activities received considerable focus. The emphasis was on imparting training and development of the skill-set of the employees to enable them to face the challenges in the work environment.
28. RELATED PARTY TRANSACTION
Prior approval / Omnibus approval is obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. No transaction with the related party is material in nature, in accordance with Company''s "Related Party Transaction Policy" and Regulation 23 of SEBI (LODR) Regulations, 2015. In accordance with Indian Accounting Standard - 24 (Related Party Disclosure), the details of transactions with the related parties are set out in Note No:46 of disclosures forming part of Financial Statements.
As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, The Company''s Related Party Transaction Policy is disclosed in the Company''s website and its web link is http://www.rajapalayammills.co.in/pdf/related-party-transaction-policy.pdf
29. RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and minimization of risk thereof.
30. DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
(a) they had followed the applicable accounting standards along with proper explanation relating to material departures, if any, in the preparation of the annual accounts for the year ended 31st March, 2018;
(b) they 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 as on 31st March, 2018 and of the profit of the Company for the year ended on that date;
(c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the Annual Accounts on a going concern basis;
(e) they had 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of the Central and State Governments for their help and co-operation. They are thankful to the Financial Institutions and Banks for their continued help, assistance and guidance. The Directors wish to place on record their appreciation of employees at all levels for their commitment and their contribution.
On behalf of the Board of Directors, |
|
For RAJAPALAYAM MILLS LIMITED, |
|
RAJAPALAIYAM, |
P.R. VENKETRAMA RAJA |
29th May, 2018. |
CHAIRMAN |
ANNEXURE I TO DIRECTORS'' REPORT
Form AOC-1
[Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014]
Statement containing salient features of the financial statement of Associate Companies
PART A - SUBSIDIARY COMPANY
The Company has no Subsidiary Company.
PART B - ASSOCIATE COMPANY
Statement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies
Particulars |
2017-18 |
||||||
Name of the Associate Company |
The Ramco Cements Limited |
Ramco Industries Limited |
Ramco Systems Limited |
The Ramaraju Surgical Cotton Mills Limited |
Sri Vishnu Shankar Mill Limited |
Ontime Industrial Services Limited |
Ramco Windfarms Limited |
Last Audited Balance Sheet date |
31-03-2018 |
31-03-2018 |
31-03-2018 |
31-03-2018 |
31-03-2018 |
31-03-2018 |
31-03-2018 |
Date on which the Associate was associated / acquired |
01-04-2016 |
01-04-2016 |
01-04-2016 |
01-04-2016 |
01-04-2016 |
01-04-2016 |
27-05-2017 |
No. of Shares held as on 31st March 2018 |
3,29,05,000 |
79,20,680 |
7,33,531 |
4,000 |
38,400 |
50,000 |
8,32,000 |
Amount of Investment in Associate as on 31-03-2018 (Rs. in Lakhs) |
3,779.94 |
92.40 |
1,141.55 |
0.05 |
87.65 |
5.00 |
8.32 |
Extent of Shareholding % as on 31-03-2018 |
13.97 |
9.14 |
2.41 |
0.10 |
2.56 |
17.77 |
8.32 |
Description of how there is significant influence |
Note (1) |
||||||
Reason why Associate is not consolidated |
Not applicable |
||||||
Net worth attributable to Shareholding (Rs. in Lakhs) |
4,10,828.00 |
2,88,549.00 |
54,073.80 |
21,725.82 |
16,105.74 |
833.94 |
1,131.91 |
Profit / Loss for the Year (Consolidated) (Rs. in Lakhs) |
56,286.00 |
18,213.00 |
1,048.50 |
912.47 |
882.99 |
48.84 |
454.29 |
a) Considered in Consolidation (Rs. in Lakhs) |
8,768.27 |
976.28 |
24.47 |
0.81 |
(1.87) |
8.68 |
7.31 |
b) Not considered in Consolidation (Rs. in Lakhs) |
47,517.72 |
17,236.72 |
1,024.03 |
911.66 |
884.86 |
40.16 |
446.98 |
Note: 1) There is significant influence, because of shareholding / common directors.
2) Names of associates or joint ventures which are yet to commence operations - NIL
3) Names of associates or joint ventures which have been liquidated or sold during the year - NIL
On behalf of the Board of Directors, |
|
For RAJAPALAYAM MILLS LIMITED, |
|
RAJAPALAIYAM, |
P.R. VENKETRAMA RAJA |
29th May, 2018. |
CHAIRMAN |
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES
1. A brief outline of the Company''s CSR policy.
The objective of the CSR Policy is:
a. to ensure an increased commitment at all levels in the organization, to operate its business in an economically, socially & environmentally sustainable manner, while recognising the interests of all its stakeholders.
b. to directly or indirectly take up programmes that benefit the communities in & around its work locations and results, over a period of time, in enhancing the quality of life & economic well being of the local populace.
c. to generate, through its CSR initiatives, a community goodwill for the Company and help reinforce a positive & socially responsible image of the Company as a corporate entity.
Web link to the CSR Policy: http://www.rajapalayammills.co.in/pdf/corporate-social-responsibility-policy.pdf
2. The Composition of the CSR Committee:
a. Shri P.R. Venketrama Raja, Chairman of the Committee
b. Justice Shri P.P.S. Janarthana Raja, Member
c. Shri P.V. Abinav Ramasubramaniam Raja, Member
3. Average Net Profit of the Company for last three financial years Rs. 2,912.95 Lakhs.
4. Prescribed CSR Expenditure (two percent of the amount as in item 3 above): Rs. 58.26 Lakhs.
5. Details of CSR spent during the financial year:
a. Total amount spent for the financial year: Rs. 62.50 Lakhs.
b. Amount unspent, if any: Nil
c. Manner in which the amount spent during the financial year is detailed below: (Rs. in lakhs)
SI. No. |
CSR Project (or) Activity Identified |
Sector in which the project is covered |
Projects or programmes (1) Local area or other (2) Specify the State and district where projects or Programs was undertaken |
Amount Outlay (Budget) Project or Program wise |
Amount Spent on the project or Programs Sub-heads: (1) Direct Expenditure on projects or programs (2) Overheads: |
Cumulative Expenditure upto reporting Period |
Amount Spent Direct or through implementing Agency. |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
1 |
Eradicating Hunger, Poverty and Malnutrition, promoting health care including preventive health care and Sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available Safe Drinking Water. [Clause (i)] |
Eradication of Hunger and Promotion of Healthcare including Preventive Healthcare |
Chennai, Coimbatore, Dindigul, Madurai, Tirunelveli & Virudhunagar district (Tamil Nadu) |
8.75 |
8.75 |
8.75 |
8.75 |
(Rs. in lakhs] |
|||||||
SI. No. |
CSR Project (or) Activity Identified |
Sector in which the project is covered |
Projects or programmes (1) Local area or other (2) Specify the State and district where projects or Programs was undertaken |
Amount Outlay (Budget) Project or Program wise |
Amount Spent on the project or Programs Sub-heads: (1) Direct Expenditure on projects or programs (2) Overheads: |
Cumulative Expenditure upto reporting Period |
Amount Spent Direct or through implementing Agency. |
2. |
Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects [Clause (ii)l |
Promotion of Education including Special Education |
Virudhunagar & Tirunelveli district (Tamil Nadu) |
51.37 |
51.37 |
51.37 |
51.37 |
3. |
Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga [Clause (iv)] |
Ensuring Environmental Sustainability |
Virudhunagar (Tamil Nadu) |
2.38 |
2.38 |
2.38 |
2.38 |
TOTAL |
62.50 |
62.50 |
62.50 |
62.50 |
Note:
1. As per Articles of Association of the Company, every year, a provision has been made for an amount not exceeding 3% of the net profit towards P.A.C. Ramasamy Raja Memorial Fund. During the year the Company has spent an amount of Rs 50 Lakhs out of accumulated balance of the above said fund and the same has been included in the above sum of Rs. 62.50 Lakhs.
2. The Company has made a provision of Rs. 50 Lakhs towards the above said Fund for the FY 2017-18. This amount has not been included in the above statement and will be considered when the amount is actually spent from the Fund.
The CSR Committee confirms that the implementation and monitoring of CSR Policy is in Compliance with CSR objectives and Policy of the Company.
SHRI P.R. VENKETRAMA RAJA |
SMT. R. SUDARSANAM |
CHAIRMAN |
MANAGING DIRECTOR |
RAJAPALAIYAM, |
|
29th May, 2018. |
ANNEXURE III TO DIRECTORS'' REPORT
Form MR - 3
SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2018
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No.9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
To
The Members,
Rajapalayam Mills Limited, [CIN: L17111TN1936PLC002298]
Rajapalayam Mills Premises,
P.A.C. Ramasamy Raja Salai,
Post Box No.1, Rajapalaiyam - 626117.
I have conducted a Secretarial Audit of the compliance of applicable statutory provisions and adherence to good corporate practices by RAJAPALAYAM MILLS LIMITED (hereinafter called "the Company") during the financial year from 1st April, 2017 to 31st March, 2018 ("the year"/ "audit period" / "period under review"). I conducted the Secretarial Audit in a manner that provided me a reasonable basis for evaluating the Company''s corporate conducts / statutory compliances and expressing my opinion thereon.
I am issuing this report based on my verification of the books, papers, minute books and other records maintained by the Company, forms and returns filed, compliance related action taken by the Company during the year as well as after 31st March, 2018 but before the issue of this audit report and the information provided by the Company, its officers, agents and authorised representatives during my conduct of the Secretarial Audit.
1. I hereby report that:
1.1. In my opinion, during the audit period covering the financial year ended on 31st March, 2018, the Company has complied with the statutory provisions listed hereunder and also has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter. The Members are requested to read this report along with my letter of even date annexed to this report as Annexure - A.
1.2. I have examined the books, papers, minute books and other records maintained by the Company and the forms, returns, reports, disclosures and information filed or disseminated during the year according to the applicable provisions of :
(i) The Companies Act, 2013 and the rules made thereunder (the Act).
(ii) Securities Contracts (Regulation) Act, 1956 and the rules made thereunder.
(iii) The Depositories Act, 1996 and the regulations and bye-laws framed thereunder.
(iv) The following Regulations prescribed under the Securities and Exchange Board of India Act, 1992 (SEBI Regulations):-
(a) Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
(b) Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
(c) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015
(v) The following laws, that are specifically applicable to the Company:
(a) Essential Commodities Act 1955, with reference to "Hank Yarn Packing Notification 2003" (No..2/TDRO/8/2003 dated 17th April, 2003); and
(b) The Electricity Act, 2003.
1.3 I have also examined compliance with the applicable clauses of the following:
(i) Secretarial Standards (SS-1) on "Meetings of the Board of Directors" and Secretarial Standards (SS-2) on "General Meetings" issued by The Institute of Company Secretaries of India and
(ii) The Listing agreement entered into by the Company with BSE Limited.
1.4. During the period under review, and also considering the compliance related action taken by the Company after 31st March, 2018 but before the issue of this report, the Company has, to the best of my knowledge and belief and based on the records, information and explanations furnished to me, complied with the applicable provisions / Clauses of the Acts, Rules, Regulations, Agreements and Standards mentioned under paragraphs 1.2 and 1.3 above.
1.5. I am informed that, during / in respect of the year:
(i) Due to non-occurrence of certain events, the Company was not required to comply with the following laws / guidelines / regulations and consequently was not required to maintain any books, papers, minute books or other records or file any forms / returns under:
(a) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(b) Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;
(c) Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998;
(d) Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;
(e) Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act, 2013 and dealing with client.
(f) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; and
(g) Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;
(ii) There was no law, other than those specified in paragraph 1.2(v) above, that was specifically applicable to the Company, considering the nature of its business. Hence the requirement to report on compliance with specific laws did not arise.
2. I further report that:
2.1 The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The Board also have two Woman Directors. The change in composition of the Board of Directors that took place during the period under review was carried out in compliance with the provisions of the Act.
2.2 Adequate notice is given to all directors to schedule the Board Meetings. Notice of Board meetings were sent at least seven days in advance. Agenda and detailed notes on agenda were sent atleast seven days before the Board meetings with the exception of the following items, which were either circulated separately or at the meetings:
(i) Supplementary agenda notes and annexures in respect of unpublished price sensitive information such as audited accounts / results, unaudited financial results and connected papers; and
(ii) Additional subjects / information / presentations and supplementary notes.
Consent of the Board for circulating them separately or at the meeting was duly obtained as required under the Secretarial Standards.
2.3 A system exists for directors to seek and obtain further information and clarifications on the agenda items before the meetings and for their meaningful participation at the meetings. Majority decision is carried through. I am informed that there were no dissenting members'' views on any of the matters discussed during the year that were required to be captured and recorded as part of the minutes.
3. I further report that:
3.1 There are adequate systems and processes in the Company commensurate with its size and operations to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
M.R.L. Narasimha |
|
Practising Company Secretary |
|
Membership No: 2851 |
|
Certificate of Practice: 799 |
|
Rajapalaiyam, |
34-C, 3rd Cross, R.L.Nagar |
29th May, 2018. |
K.K. Pudur, Coimbatore - 641 038. |
Annexure - A to Secretarial Audit Report of even date
To,
The Members,
Rajapalayam Mills Limited, [CIN: L17111TN1936PLC002298]
Rajapalayam Mills Premises,
P.A.C. Ramasamy Raja Salai,
Post Box No.1, Rajapalaiyam - 626117.
My Secretarial Audit Report (Form MR-3) of even date for the financial year ended 31st March, 2018 is to be read along with this letter.
1. The Company''s management is responsible for maintenance of secretarial records and compliance with the provisions of corporate and other applicable laws, rules, regulations and standards. My responsibility is to express an opinion on the secretarial records produced for my audit.
2. I have followed such audit practices and processes as I considered appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records.
3. While forming an opinion on compliance and issuing this report, I have also considered compliance related action taken by the Company after 31st March, 2018 but before the issue of this report.
4. I have verified the secretarial records furnished to me on a test basis to see whether the correct facts are reflected therein. I also examined the compliance procedures followed by the Company on a test basis. I believe that the processes and practices I followed provide a reasonable basis for my opinion.
5. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
6. I have obtained the Management''s representation about compliance of laws, rules and regulations and happening of events, wherever required.
7. My Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
M.R.L. Narasimha |
|
Practising Company Secretary |
|
Membership No: 2851 |
|
Certificate of Practice: 799 |
|
Rajapalaiyam, |
34-C, 3rd Cross, R.L.Nagar |
29th May, 2018. |
K.K.Pudur, Coimbatore - 641 038. |
ANNEXURE IV TO DIRECTORS'' REPORT
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
[Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules 2014]
A. CONSERVATION OF ENERGY
The Company pays attention at all levels to reduce energy consumption, by continuous monitoring maintenances and improvements.
(i) the steps taken on conservation : of energy |
: Installation of IE3 Energy efficiency motors in Spinning Short frames by replacing old motors |
Installation of Inverter Drives in Autocone winding machines with closed Loop control system. |
|
Impact on conservation of energy |
: Installation of Inverter Drives in Autocone winding machines with closed Loop control system resulted in Power saving of around 51,000 Units per annum. |
(ii) the steps taken by the Company for : utilising alternate sources of energy |
: NIL |
(iii) the capital investment on energy : conservation equipments |
: NIL |
B. TECHNOLOGY ABSORPTION (i) the efforts made towards technology : absorption (ii) the benefits derived like product improvement, cost reduction, product development or import substitution |
1. Modification of OE Spinning lifting mechanism to avoid mis-piecing and to increase productivity. 2. Up-gradation of Auto Coner Drums to increase productivity. 3. Installation of Auto doffer Ring frames. |
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year) |
|
(a) the details of technology imported : |
: NIL |
(b) the year of import : |
: NIL |
(c) whether the technology been : fully absorbed |
: Not Applicable |
(d) if not fully absorbed, areas where absorption has not taken place : and the reasons thereof |
: Not Applicable |
(iv) the expenditure incurred on : Research and Development |
Not Applicable |
C. FOREIGN EXCHANGE EARNINGS AND OUTGO |
|
The Foreign Exchange earned in terms of : actual inflows during the year and |
Rs. 8,004.68 Lakhs |
The Foreign Exchange outgo during the: year in terms of actual outflows. |
Rs. 11,081.56 Lakhs |
On behalf of the Board of Directors, |
|
For RAJAPALAYAM MILLS LIMITED |
|
RAJAPALAIYAM, |
P.R. VENKETRAMA RAJA |
29th May, 2018. |
CHAIRMAN |
ANNEXURE V TO DIRECTORS'' REPORT
Form MGT - 9
EXTRACT OF ANNUAL RETURN
As on the financial year ended on 31st March, 2018
[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]
I. REGISTRATION AND OTHER DETAILS:
CIN |
L17111TN1936PLC002298 |
Registration Date |
24-02-1936 |
Name of the Company |
RAJAPALAYAM MILLS LIMITED |
Category / Sub-Category of the Company |
Public Limited Company |
Address of the Registered Office and Contact details |
Rajapalayam Mills Premises, P.A.C.Ramasamy Raja Salai, Post Box No.1, Rajapalaiyam, Tamil Nadu, Pin: 626 117. |
Whether listed company |
Yes |
Name, Address and Contact details of Registrar and Transfer Agent, if any |
Share Transfer is being carried out in-house. |
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY
Business activities contributing 10% or more of the total turnover of the Company:
Name and Description of main products / services |
NIC Code of the Product / service |
% to total turnover of the Company |
Yarn |
13111 |
99.43% |
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
Name and address of the Company |
CIN / GLN |
Holding / Subsidiary / Associate |
% of Shares held |
Applicable Section |
1 . The Ramco Cements Limited "Ramamandiram", Rajapalayam -626 117. Tamil Nadu. |
L26941TN1957 PLC003566 |
Associate |
13.97% |
2(6) |
2. Ramco Industries Limited 47, P.S.K. Nagar, Rajapalayam -626 108. Tamil Nadu. |
L26943TN1965 PLC005297 |
Associate |
9.14% |
2(6) |
Name and address of the Company |
CIN / GLN |
Holding / Subsidiary / Associate |
% of Shares held |
Applicable Section |
3. Ramco Systems Limited 47, P.S.K. Nagar, Rajapalayam -626 108. Tamil Nadu. |
L72300TN1997 PLC037550 |
Associate |
2.41% |
2(6) |
4. The Ramaraju Surgical Cotton Mills Limited The Ramaraju Surgical Cotton Mills Premises Post Box No. 2, 119, P.A.C. Ramasamy Raja Salai, Rajapalaiyam -626 117. Tamil Nadu |
U17111TN1939 PLC002302 |
Associate |
0.10% |
2(6) |
5. Sri Vishnu Shankar Mill Limited Post Box No.109, P.A.C. Ramasamy Raja Salai, Rajapalaiyam -626 117. Tamil Nadu |
U17301TN1981 PLC008677 |
Associate |
2.56% |
2(6) |
6. Ontime Industrial Services Limited 47, P.S.K. Nagar Rajapalayam -626 108. Tamil Nadu |
U74999TN2002 PLC048773 |
Associate |
17.77% |
2(6) |
7. Ramco Windfarms Limited Auras Corporae Centre, 5th Floor, 98-A Dr Radhakrishnan Road, Mylapore Chennai - 600 004 |
U40109TN2013 PLC093905 |
Associate |
8.32% |
2(6) |
IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-Wise Share Holding
Category of Shareholder |
No. of Shares held at the beginning of the year |
No. of Shares held at the end of the year |
% Change during the year |
|||||||
Demat |
Physical |
Total |
% of Total Shares |
Demat |
Physical |
Total |
% of Total Shares |
|||
A. (1) |
Promoters Indian |
|||||||||
a) |
Individuals/ Hindu Undivided Family |
36,01,380 |
36,01,380 |
48.82 |
36,01,380 |
36,01,380 |
48.82 |
|||
b) |
Central Government |
|||||||||
c) |
State Government(s) |
|||||||||
d) |
Bodies Corporate |
3,20,440 |
3,20,440 |
4.35 |
3,20,440 |
3,20,440 |
4.35 |
|||
e) |
Financial Institutions/ Banks |
|||||||||
f) |
Any Others... |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Sub Total(A)(1) |
39,21,820 |
- |
39,21,820 |
53.17 |
39,21,820 |
- |
39,21,820 |
53.17 |
- |
|
(2) a) |
Foreign NRIs-Individuals |
|||||||||
b) |
Other Individuals |
_ |
. |
_ |
_ |
. |
_ |
_ |
. |
_ |
c) |
Bodies Corporate |
_ |
. |
_ |
_ |
. |
_ |
_ |
. |
_ |
d) |
Financial Institutions/ Banks |
|||||||||
e) |
Any Others |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Sub Total(A)(2) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
|
Total Shareholding of Promoter (A)= (A)(1) (A)(2) |
39,21,820 |
_ |
39,21,820 |
53.17 |
39,21,820 |
_ |
39,21,820 |
53.17 |
_ |
Category of Shareholder |
No. of Shares held at the beginning of the year |
No. of Shares held at the end of the year |
% Change during the year |
|||||||
Demat |
Physical |
Total |
% of Total Shares |
Demat |
Physical |
Total |
% of Total Shares |
|||
B. (1) |
Public shareholding Institutions |
|||||||||
a) |
Mutual Funds |
- |
- |
- |
- |
1,05,266 |
- |
1,05,266 |
1.43 |
1.43 |
b) |
Financial Institutions / Banks |
200 |
1,860 |
2,060 |
0.03 |
200 |
1,860 |
2,060 |
0.03 |
|
c) |
Central Government |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
d) |
State Government(s) |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
e) |
Venture Capital Funds |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
f) |
Insurance Companies |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
_ |
g) |
Foreign Institutional Investors |
|||||||||
h) |
Foreign Venture Capital Funds |
|||||||||
i) |
Others (specify) |
- |
- |
- |
- |
- |
- |
- |
- |
- |
Sub-Total (B)(1) |
200 |
1,860 |
2,060 |
0.03 |
1,05,466 |
1,860 |
1,07,326 |
1.46 |
1.43 |
|
(2) a) |
Non-institutions Bodies Corporate |
|||||||||
i) |
Indian * |
3,66,094 |
900 |
3,66,994 |
4.97 |
3,83,472 |
900 |
3,84,372 |
5.21 |
0.24 |
ii) |
Overseas |
- |
- |
- |
- |
- |
- |
- |
- |
- |
b) |
Individuals |
|||||||||
i) |
Individual shareholders holding nominal share capital up to Rs. 1 lakh |
13,60,506 |
4,19,089 |
17,79,595 |
24.13 |
12,51,563 |
3,83,490 |
16,35,053 |
22.16 |
(1.97) |
ii) |
Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. |
9,53,871 |
3,51,820 |
13,05,691 |
17.70 |
9,75,769 |
3,51,820 |
13,27,589 |
18.00 |
0.30 |
c) |
Others (specify) |
|||||||||
Sub-Total (B)(2) |
26,80,471 |
7,71,809 |
34,52,280 |
46.80 |
26,10,804 |
7,36,210 |
33,47,014 |
45.37 |
(1.43) |
|
B |
Total Public Shareholding (B)= (B)(1) (B)(2) |
26,80,671 |
7,73,669 |
34,54,340 |
46.83 |
27,16,270 |
7,38,070 |
34,54,340 |
46.83 |
|
C |
Shares held by Custodians for GDRs & ADRs |
|||||||||
GRAND TOTAL (A) (B) (C) |
66,02,491 |
7,73,669 |
73,76,160 |
100.00 |
66,38,090 |
7,38,070 |
73,76,160 |
100.00 |
_ |
* Note : Includes Shares in Unclaimed Shares Suspense Account (opening - 1,75,716 Shares; Closing - 8,280) and Shares in Investor Education and Protection Fund Account (Opening - Nil: Closing 1,76,815)
(ii) Shareholding of Promoters
SI. No. |
Shareholder''s Name |
Shareholding at the beginning of the year |
Shareholding at the end of the year |
% Change in Shareholding during the year |
||||
No. of Shares |
% of Total Shares of the Company |
% of Shares Pledged / encumbered to total Shares |
No. of Shares |
% of Total Shares of the Company |
% of Shares Pledged / encumbered to total Shares |
|||
1. |
Shri P.R. Ramasubrahmaneya Rajha |
9,88,792 |
13.40 |
_ |
_ |
_ |
_ |
_ |
2. |
Shri P.R. Venketrama Raja |
14,66,080 |
19.88 |
14.91 |
14,66,080 |
19.88 |
- |
- |
3. |
Shri P.V. Abinav Ramasubramaniam Raja |
9,63,160 |
13.06 |
_ |
19,51,952 |
26.46 |
_ |
13.40 |
4. |
Smt. Ramachandra Raja Chittammal |
82,628 |
1.12 |
- |
82,628 |
1.12 |
_ |
- |
5. |
Smt. P.V. Nirmala |
2,720 |
0.04 |
- |
2,720 |
0.04 |
- |
- |
6. |
Smt. Nalina Ramalakshmi |
6,720 |
0.09 |
- |
6,720 |
0.09 |
- |
- |
7. |
Smt. Saradha Deepa |
10,960 |
0.15 |
- |
10,960 |
0.15 |
- |
- |
8. |
Smt. P.V. Sri Sandhya |
16,560 |
0.22 |
- |
16,560 |
0.22 |
- |
- |
9. |
Smt. R. Sudarsanam |
63,760 |
0.86 |
- |
63,760 |
0.86 |
- |
- |
10. |
M/s. Ramco Industries Limited |
1,27,360 |
1.73 |
- |
1,27,360 |
1.73 |
- |
- |
11. |
M/s. The Ramaraju Surgical Cotton Mills Limited |
1,35,200 |
1.83 |
- |
1,35,200 |
1.83 |
- |
- |
12. |
M/s. Sri Vishnu Shankar Mill Limited |
29,740 |
0.40 |
- |
29,740 |
0.40 |
- |
- |
13. |
M/s. Ramco Management Private Limited |
2,040 |
0.03 |
_ |
2,040 |
0.03 |
_ |
_ |
14. |
M/s. Sandhya Spinning Mill Limited |
500 |
0.01 |
- |
500 |
0.01 |
_ |
- |
15. |
M/s. The Ramco Cements Limited |
25,600 |
0.35 |
- |
25,600 |
0.35 |
_ |
- |
TOTAL |
39,21,820 |
53.17 |
14.91 |
39,21,820 |
53.17 |
- |
13.40 |
(iii) Change in Promoters'' Shareholding
SI |
Shareholding |
Increase / (Decrease) in shareholding |
Cumulative Shareholding during the year (01-04-2017 to 31-03-2018) |
||||
No. |
No. of Shares at the beginning (01-04-2017) / end of the year (31-03-2018) |
% of total shares of the Company |
Date |
Reason |
No. of Shares |
% of total shares of the Company |
|
1. |
39,21,820 |
53.17 |
01-04-2017 |
NIL |
NIL |
NIL |
NIL |
39,21,820 |
53.17 |
31-03-2018 |
(iv) Shareholding Pattern of top ten Shareholders (other than Directors and Promoters):
SI. No. |
Name |
Shareholding |
Date |
Increase / (Decrease) in shareholding |
Reason |
Cumulative Shareholding during the year (01-04-2017 to 31-03-2018) |
||
No. of Shares at the beginning (01-04-2017) / end of the year (31-03-2018) |
% of total shares of the Company |
No. of Shares |
% of total shares of the Company |
|||||
1 |
Shri Govindlal M Praikh Joint Holder: Chinmay.G.Parikh |
1,73,932 |
2.36 |
01-04-2017 |
_ |
_ |
1,73,932 |
2.36 |
2 |
Sri-La-Sri Shanmukadesika Gnanasambanda Paramarcharya Swamigal |
1,02,400 |
1.39 |
01-04-2017 |
1,02,400 |
1.39 |
||
3 |
Shri Govindlal M Parikh |
63,200 |
0.86 |
01-04-2017 |
- |
- |
63,200 |
0.86 |
4 |
Smt. Chinmay G Parikh Joint Holder: Shri Govindlal M Parikh |
61,876 |
0.84 |
01-04-2017 |
61,876 |
0.84 |
||
5 |
Rajapalayam Palayapalayam Rajus Common Mahimai Fund |
51,200 |
0.69 |
01-04-2017 |
_ |
_ |
51,200 |
0.69 |
6 |
IP. Sokkalal Ramsait Factory Pvt. Ltd. |
52,200 |
0.71 |
01-04-2017 |
_ |
_ |
52,200 |
0.71 |
- |
- |
02-02-2018 |
(110) |
Transfer |
52,090 |
0.71 |
||
- |
- |
09-02-2018 |
(1,286) |
Transfer |
50,804 |
0.69 |
||
- |
- |
16-02-2018 |
(250) |
Transfer |
50,554 |
0.69 |
||
- |
- |
23-02-2018 |
(497) |
Transfer |
50,057 |
0.68 |
||
- |
- |
02-03-2018 |
(493) |
Transfer |
49,564 |
0.67 |
||
- |
- |
09-03-2018 |
(272) |
Transfer |
49,292 |
0.67 |
||
- |
- |
16-03-2018 |
(50) |
Transfer |
49,242 |
0.67 |
||
7 |
Smt. DH Dharshini Raaja |
48,981 |
0.66 |
01-04-2017 |
- |
- |
48,981 |
0.66 |
8 |
Shri V. Ganesa Ramasubramanian |
46,880 |
0.64 |
01-04-2017 |
- |
- |
46,880 |
0.64 |
9 |
Smt. Poosapadi Sankera Raja Ramani Devi |
45,580 |
0.62 |
01-04-2017 |
_ |
_ |
45,580 |
0.62 |
10 |
Shri Ettappanaickerayyen J.V.R.M.K.V |
40,960 |
0.56 |
01-04-2017 |
- |
- |
40,960 |
0.56 |
(v) Shareholding of Directors and Key Managerial Personnel:
SI. No. |
Name |
Shareholding |
Date |
Increase / (Decrease) in shareholding |
Reason |
Cumulative Shareholding during the year (01-04-2017 to 31-03-2018) |
||
No. of Shares at the beginning (01-04-2017) / end of the year (31-03-2018) |
% of total shares of the Company |
No. of Shares |
% of total shares of the Company |
|||||
1. |
Shri P.R. Ramasubrahmaneya Rajha |
9,88,792 |
13.41 |
N.A. |
(9,88,792) |
Transmission of Shares |
_ |
_ |
NIL |
NIL |
N.A. |
NIL |
NIL |
||||
2. |
Shri P.R. Venketrama Raja |
14,66,080 |
19.88 |
N.A. |
N.A. |
N.A. |
- |
- |
14,66,080 |
19.88 |
N.A. |
N.A. |
N.A. |
14,66,080 |
19.88 |
||
3. |
Smt. R. Sudarsanam |
63,760 |
0.86 |
N.A. |
N.A. |
N.A. |
_ |
_ |
63,760 |
0.86 |
N.A. |
N.A. |
N.A. |
63,760 |
0.86 |
||
4. |
Shri S.S. Ramachandra Raja |
24,480 |
0.33 |
N.A. |
N.A. |
N.A. |
_ |
_ |
24,480 |
0.33 |
N.A. |
N.A. |
N.A. |
24,480 |
0.33 |
||
5. |
Shri N.K. Ramasuwami Raja |
15,400 |
0.21 |
N.A. |
N.A. |
N.A. |
_ |
_ |
15,400 |
0.21 |
N.A. |
N.A. |
N.A. |
15,400 |
0.21 |
||
6. |
Shri A.V. Dharmakrishnan |
1,100 |
0.01 |
N.A. |
N.A. |
N.A. |
_ |
_ |
1,100 |
0.01 |
N.A. |
N.A. |
N.A. |
1,100 |
0.01 |
||
7. |
Justice Shri P.P.S. Janarthana Raja |
NIL |
NIL |
N.A. |
N.A. |
N.A. |
NIL |
NIL |
8. |
Shri V. Santhanaraman |
NIL |
NIL |
N.A. |
N.A. |
N.A. |
NIL |
NIL |
9. |
Shri K.B. Nagendra Murthy |
NIL |
NIL |
N.A. |
N.A. |
N.A. |
NIL |
NIL |
10. |
Smt. Soundara Kumar |
NIL |
NIL |
N.A. |
N.A. |
N.A. |
NIL |
NIL |
11. |
Shri P.V. Abinav Ramasubramaniam Raja |
9,63,160 |
13.06 |
N.A. |
N.A. |
N.A. |
_ |
_ |
19,51,952 |
26.46 |
04-06-2017 |
9,88,792 |
Transmission of Shares |
19,51,952 |
26.46 |
||
12. |
Shri P.A.S. Alaghar Raja |
6,520 |
0.09 |
N.A. |
N.A. |
N.A. |
_ |
_ |
6,520 |
0.09 |
N.A. |
N.A. |
N.A. |
6,520 |
0.09 |
||
13. |
Shri B. Gnanagurusamy |
NIL |
NIL |
N.A. |
N.A. |
N.A. |
NIL |
NIL |
14. |
Shri A. Amlpranavam |
NIL |
NIL |
N.A. |
N.A. |
N.A. |
NIL |
NIL |
V. INDEBTEDNESS
Indebtedness of the Company includinq interest outstandinq / accrued but not due for payment
Particulars |
Secured Loans excluding deposits |
Unsecured Loans |
Deposits |
Total Indebtedness |
Indebtedness at the beginning of the financial year |
||||
i) Principal Amount |
16,023.29 |
12,135.56 |
- |
28,158.85 |
ii) Interest due but not paid |
- |
- |
- |
- |
iii) Interest accrued but not due |
63.58 |
33.21 |
- |
96.79 |
Total (i ii iii) |
16,086.87 |
12,168.77 |
- |
28,255.64 |
Change in Indebtedness during the financial year |
||||
Addition |
1,190.07 |
691.37 |
- |
1,881.44 |
Reduction |
(6,124.83) |
- |
- |
(6,124.83) |
Net Change |
(4,934.76) |
691.37 |
- |
(4,243.39) |
Indebtedness at the end of the financial year |
||||
i) Principal Amount |
11,114.56 |
12,814.26 |
- |
23,928.82 |
ii) Interest due but not paid |
- |
- |
- |
- |
iii) Interest accrued but not due |
37.55 |
45.88 |
- |
83.43 |
Total (i ii iii) |
11,152.11 |
12,860.14 |
- |
24,012.25 |
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and / or Manager:
SI. No. |
Particulars of Remuneration |
Smt. R. Sudarsanam Managing Director |
Total Amount |
1 |
Gross Salary |
||
a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 |
240.00 |
240.00 |
|
b) Value of perquisites u/s 17(2) Income-tax Act, 1961 |
- |
- |
|
c) Profits in lieu of salary under Section17(3) Income-tax Act, 1961 |
- |
- |
|
2 |
Stock Option |
- |
- |
3 |
Sweat Equity |
- |
- |
4 |
Commission as % of profit |
- |
- |
5 |
Sitting Fees |
1.50 |
1.50 |
6 |
Contribution to Provident Fund |
28.80 |
28.80 |
7 |
Contribution to Superannuation Fund |
1.50 |
1.50 |
Total (A) |
271.80 |
271.80 |
|
Ceiling as per Act |
Managing Director remuneration is fixed at 5% of net profits of the Company and in case, no profits or inadequacy of profits, the Managing Director shall be paid the maximum remuneration as per Section II, Part II of Schedule V of the Companies Act, 2013 which works out to Rs. 270.30 Lakhs plus applicable sitting fees. |
B. REMUNERATION TO OTHER DIRECTORS: 1. Independent Directors
Name of the Directors |
Total Amount |
||||||
Particulars of Remuneration |
Shri N.K. Ramasuwami Raja |
Justice Shri P.P.S.Janarthana Raja |
Shri V. Santhanaraman |
Shri K.B. Nagendra Murthy |
Smt Soundara Kumar |
Shri P.A.S. Alaghar Raja |
|
Fee for attending board / committee meetings |
3.30 |
3.90 |
1.80 |
3.00 |
1.80 |
1.80 |
15.60 |
Commission |
- |
- |
- |
- |
- |
- |
- |
Others |
- |
- |
- |
- |
- |
- |
- |
Total (1) |
3.30 |
3.90 |
1.80 |
3.00 |
1.80 |
1.80 |
15.60 |
2. Other Non Executive Director
Particulars of Remuneration |
Name of the Directors |
Total Amount |
|||
Shri P.R. Venketrama Raja |
Shri A.V. Dharmakrishnan |
Shri S.S. Ramachandra Raja |
Shri P.V. Abinav Ramasubramaniam Raja |
||
Fee for attending board / committee meetings |
2.10 |
3.00 |
1.80 |
1.50 |
8.40 |
Commission |
- |
- |
- |
- |
- |
Others |
- |
- |
- |
- |
- |
Total (2) |
2.10 |
3.00 |
1.80 |
1.50 |
8.40 |
Total B (1) (2) |
24.00 |
||||
Overall Ceiling as per the Act |
Rs. 28.05 Lakhs being 1% of the Net Profits of the Company, calculated as per Section 198 of the Companies Act, 2013. |
||||
Total Managerial Remuneration (A B) |
295.80 |
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/ MANAGER/ WTD
SI. No. |
Key Managerial Personnel |
Total Amount |
||
Particulars of Remuneration |
Shri B. Gnanagurusamy Chief Financial Officer |
Shri A. Arulpranavam Company Secretary |
||
1 |
Gross Salary |
|||
a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 |
30.38 |
9.17 |
39.55 |
|
b) Value of perquisites u/s 17(2) Income-tax Act, 1961 |
0.35 |
_ |
0.35 |
|
c) Profits in lieu of salary under Section17(3) Income-tax Act, 1961 |
â |
â |
â |
|
2 |
Stock Option |
- |
- |
- |
3 |
Sweat Equity |
- |
- |
- |
4 |
Commission |
- |
- |
- |
as % of profit |
- |
- |
- |
|
Others, specify |
- |
- |
- |
|
5 |
Others, please specify |
- |
- |
- |
Total |
30.73 |
9.17 |
39.90 |
VII. PENALTIES/ PUNISHMENT/ COMPOUNDING OF OFFENCES:
Type |
Section of the Companies Act |
Brief Description |
Details of Penalty / Punishment / Compounding fees imposed |
Authority (RD/NCLT / COURT) |
Appeal made, if any (give Details) |
A. COMPANY |
|||||
Penalty Punishment |
Nil |
||||
Compounding |
|||||
B. DIRECTORS |
|||||
Penalty Punishment |
Nil |
||||
Compounding |
|||||
C.OTHER OFFICERS IN DEFAULT |
|||||
Penalty Punishment |
Nil |
||||
Compounding |
On behalf of the Board of Directors, |
|
For RAJAPALAYAM MILLS LIMITED, |
|
RAJAPALAIYAM, |
PR. VENKETRAMA RAJA |
29th May, 2018. |
CHAIRMAN |
Mar 31, 2017
TO THE MEMBERS
Before reporting the working results of the year, your Directors with deep regret inform the sad and sudden demise of Shri P.R. Ramasubrahmaneya Rajha, Chairman of the Company on 11-05-2017. When Shri P.R. Ramasubrahmaneya Rajha assumed charge of Rajapalayam Mills Limited, the capacity of the Company was 40,000 Spindles. Under his leadership the Company grew to aggregate spindle capacity of 1,37,552 Spindles and Open End capacity of 4,616 Rotors. Shri P.R. Ramasubrahmaneya Rajha was appointed as a Director of the Company in the year 1956 and served the Company for more than 60 years. The Mill was developed financially and operationally very strong during his tenure because of prudent and transparent management. The achievements made by the legendary Chairman not only to the Company but also to the Textile Industry as a whole will be appreciated by many generations to come. He was also known for his business ethics, value systems and philanthropic activities. He not only led the Rajapalayam Mills Limited but was also the guiding force for the entire Ramco Group of Companies, which has made the Group, one of the most respected industrial houses in the country. Under his leadership, the Company has made consistent profits and handsomely rewarded all the stakeholders of the Company.
The Directors place on record the immense contribution, Shri P.R. Ramasubrahmaneya Rajha had made to the Company in its growth progress. The Directors are committed to take forward the future growth of the Company, in line with his vision and values.
The Directors are presenting their 81st Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2017.
1. FINANCIAL RESULTS
The financial results for the year ended 31st March, 2017 after charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial Fund of Rs.70 Lakhs (which is less than the limits laid in the Articles of Association) but before deducting finance cost and depreciation have resulted in operating profit (EBITDA) of Rs. 8,286.00 Lakhs against Rs. 7,938.50 Lakhs for the previous financial year 2015-16.
After deducting Rs. 2,328.56 Lakhs towards finance cost and providing Rs. 2,114.44 Lakhs towards Depreciation, the Net Profit and other comprehensive income before tax for the year is Rs. 3,759.24 Lakhs, as compared to Rs.3,038.54 Lakhs for the previous financial year 2015-16. Adding the surplus of Rs.1,112.17 Lakhs brought forward from the previous year, your Directors propose to appropriate the total sum of Rs. 4,871.41 Lakhs as detailed below:
(Rs. in Lakhs) |
|
Provision for Taxation - Current Tax |
775.13 |
- Deferred Tax (including MAT Credit |
(553.86) |
Entitlement of Rs.374.59 Lakhs) |
|
Transfer to General Reserve and FVTOCI Reserve |
3,650.14 |
Balance carried over to Balance sheet |
1,000.00 |
TOTAL |
4,871.41 |
2. SHARE CAPITAL
The Paid-up Capital of the Company is Rs.737.62 Lakhs (Previous Year: Rs.737.62 Lakhs) consisting of 73,76,160 Shares of Rs.10/- each.
3. DIVIDEND
Your Directors have pleasure in recommending a Dividend of Rs. 4/- per share (Previous Year: Rs.3/- per share). The Company will pay Dividend Distribution Tax under Income Tax Act, 1961. The total amount of Dividend outgo for the year will be Rs.295.05 Lakhs. The amount of tax on dividends would be Rs.60.07 Lakhs.
4. TAXATION
An amount of Rs. 775.13 Lakhs towards Current Tax has been provided and Deferred Tax of Rs.179.27 Lakhs has been withdrawn for the year 2016-17. The Companyâs entitlement of MAT Credit of Rs. 374.59 Lakhs has been recognized in the books during the year.
5. EXPORTS
On the export front during the year, we have made export of Cotton Yarn (including merchant exports) for a value of Rs.121.93 Crores as against Rs.114.97 Crores of the previous year.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued support and efforts for promotion of exports to Japan.
6. MODERNISATION / EXPANSION
As a part of continuous thrust on modernization and expansion programme, the Company has invested about Rs. 5.45 Crores for investment in textile machinery & equipments like, Compact conversion, Contamination detecting machine etc.,
7. PROSPECTS FOR THE CURRENT YEAR
The cotton prices are showing increasing trend due to reduced acreage of cotton plantation during the cotton season 2016-17. There is a huge volatility in the demand of cotton and yarn in domestic as well as international markets, which is reflecting in their prices also. There is an expectation that the USâs exit from the Trans-Pacific partnership is likely to realign textile trade towards India, which will boost the consumption of Indian yarn. Cotton Yarn is now enjoying the excise duty exemption through optional route since 2004. The Government is planning to implement GST in India with effect from 01-07-2017 and it is expected to yield long-term benefits.
The Company is always focusing on maintaining highest standards of yarn quality and also concentrating on cost effective production. It is always our endeavor to minimize the waste and to focus more on automation with a view to utilize the skilled manpower more efficiently. With the flexibility to produce value added super fine counts and by using more imported contamination free cotton, the Company will continue to make efforts in expanding the marketing activities across the globe to increase its customer base.
8. WIND MILL
The Company has wind mills with installed capacity of 35.15 MW for its captive power consumption. The wind farm has generated 683 Lakhs Kwh as compared to 394 Lakhs Kwh of the previous year. There was a good wind velocity supported by good evacuation by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) during the financial year 2016-17. All the Units generated by wind mills were adjusted for captive consumption at our Mills in Tamil Nadu. The income during the year from the Wind Mill Division was Rs. 45.62 Crores as against Rs. 26.26 Crores of previous year.
9. INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS
The Ministry of Corporate Affairs vide its notification dated 16th February, 2015 has notified the Companies (Indian Accounting Standard) Rules, 2015. In pursuance of this notification, our Group Companies M/s. The Ramco Cements Limited and M/s. Ramco Industries Limited has adopted Ind AS in first phase i.e. with effect from 01-04-2016 and they have considered M/s. Rajapalayam Mills Limited as their Associate Company. As per the above said notification, if a listed Company adopts Ind AS in first phase, their Associate Company should also adopt Ind AS in first phase. Hence, the Company and its Associate Companies have adopted Ind AS with effect from 01-04-2016. The Companyâs financial results for the previous year ended 31-03-2016 had also been recast in accordance with Ind AS.
10. ASSOCIATE COMPANY
The Company holds investments in the Group Companies viz., M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, M/s. The Ramaraju Surgical Cotton Mills Limited, M/s. Sri Vishnu Shankar Mill Limited and M/s. Ontime Industrial Services Limited.
During the year 2016-17, as per Ind AS - 28 the Board has considered the above Group Companies as its Associate Companies.
In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companyâs Associatesâ is attached in Form AOC-1 as Annexure - I.
CONSOLIDATED FINANCIAL STATEMENTS
As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies are required to prepare consolidated financial statements of its Subsidiaries and Associates to be laid before the Annual General Meeting of the Company.
Accordingly, the consolidated financial statements incorporating the accounts of Associate Companies, viz. M/s.The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, M/s. The Ramaraju Surgical Cotton Mills Limited, M/s. Sri Vishnu Shankar Mill Limited and M/s. Ontime Industrial Services Limited along with the Auditorsâ Report thereon, forms part of this Annual Report. As per Section 136(1) of the Companies Act, 2013 the Financial Statements including Consolidated Financial Statements are available at the Companyâs website at the following link at http://www.rajapalayammills.co.in. The Annual Report containing the Statement of Accounts for Associate Companies are available at the Companyâs website.
The Consolidated Net Profit after tax of the Company amounted to Rs. 14,519.45 Lakhs for the year ended 31st March, 2017 as compared to Rs. 10,252.35 Lakhs of the previous year.
The Consolidated Total Comprehensive Income for the year under review is Rs. 14,507.07 Lakhs as compared to Rs. 10,124.76 Lakhs of the previous year.
11. INTERNAL FINANCIAL CONTROLS
In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. ERP System developed by Ramco Systems Limited has been installed for online monitoring of all functions and management information reports are being used to have better internal control system and to take decisions in time.
12. VIGIL MECHANISM / WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy is available at the Companyâs website.
13. DIRECTORS
Smt. R. Sudarsanam, was reappointed as Managing Director of the Company for a period of three years starting from 01-04-2014 to 31-03-2017 at the Annual General Meeting held on 04-08-2014. Based on the recommendation of the Nomination and Remuneration Committee made at its meeting held on 27-05-2016, the Board of Directors at their meeting held on 28-05-2016 and the Shareholders at the 80th Annual General Meeting held on 10th August, 2016 have approved appointment of Smt. R. Sudarsanam as Managing Director for a further period of 3 years starting from 01-04-2017.
In accordance with the provision of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, the following Directors retire by rotation at the ensuing Annual General Meeting and they are eligible for re-appointment:
1) Shri S. S. Ramachandra Raja, (DIN: 00331491)
2) Shri P. R. Venketrama Raja, (DIN: 00331406)
Smt. Soundara Kumar (DIN: 01974515) has been appointed as Independent Director for a period of five years with effect from 27-08-2015 at the Annual General Meeting held on 10th August, 2016.
Shri P. V. Abinav Ramasubramaniam Raja (DIN: 07273249) has been co-opted on 11th February, 2017 as an Additional Director. He will hold the office till the date of the forthcoming Annual General Meeting. A Notice in writing has been received from a Member signifying his intention to propose the appointment of Shri P. V. Abinav Ramasubramaniam Raja as a Director at the Annual General Meeting.
Shri P.A.S. Alaghar Raja (DIN: 00487312) has been co-opted on 11th February, 2017 as an Additional Director under Independent Director category. He will hold the office till the date of the forthcoming Annual General Meeting. A Notice in writing has been received from a Member signifying his intention to propose the appointment of Shri P.A.S. Alaghar Raja as a Director under Independent Director category at the Annual General Meeting to hold office for 5 consecutive years with effect from 11th February, 2017, without being subject to retirement by rotation.
Shri P.R. Venketrama Raja has been appointed as Chairman at the Board meeting held on 04-06-2017.
The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. No Independent Director has retired during the year.
Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules, 2014, it is reported that, other than the above, there have been no changes in the Directors or Key Managerial Personnel during the year under review.
The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.
The Audit Committee has four members, out of which three are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.
In accordance with Section 178(3) of the Companies Act, 2013 and based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors have approved a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Other Employees.
The objective of the Nomination and Remuneration Policy is to ensure that the level and composition of remuneration is reasonable, the relationship of remuneration to performance is clear and appropriate to the long term goals of the Company.
As required under Regulation 25(7) of SEBI (LODR) Regulations, 2015, the Company has programmes for familiarization for the Independent Directors about the nature of the industry, business model, roles, rights and responsibilities of Independent Directors and other relevant information. As required under Regulation 46(2) of SEBI (LODR) Regulations, 2015, the details of the Familiarization Programme for Independent Directors are available at the Companyâs website, at the following link at http://www.rajapalayammills.co.in/pdf/familiarisation-programme-for-independent-directors-31-03-2017.pdf
The details of the familiarization programme are explained in the Corporate Governance Report also.
14. EVALUATION OF BOARD
Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, performance of the Board as a whole, its committee and its Members and other required matters in accordance with the guidance note issued by SEBI on 05-01-2017. Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria based on the above guidance note issued by SEBI for performance evaluation of Independent Directors, which will be based on attendance, independence, expertise and contribution brought by the Independent Director at the Board Meeting, which shall be taken into account at the time of reappointment of Independent Director.
15. MEETINGS
During the year, four Board Meetings were held. In accordance with Clause 9 of Secretarial Standard - 1 the details of the number and dates of meetings of the Board and Committees held during the Financial year indicating the number of meetings attended by each Director are given in the Corporate Governance Report.
16. PUBLIC DEPOSITS
Pursuant to Rule 8(5)(v)& (vi) of Companies (Accounts) Rules, 2014, it is reported that the Company has not accepted any deposit from public during the financial year under review. There has been no default in the repayment of deposits / payment of interest thereon during the year. The Company has no deposit, which is not in compliance with the Chapter V of the Companies Act, 2013.
The Company has received a sum of Rs.1,100 Lakhs from Directors as deposit / loan during the financial year 2016-17. It has repaid an amount of Rs.1,100 Lakhs during the year 2016-17.
17. ORDERS PASSED BY REGULATORS
Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Companyâs operations in future.
18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:
(a) the Company has not given any loans during the year 2016-17 under Section 186 of the Companies Act, 2013.
(b) the particulars of the guarantees and investments are provided under Note No.40 and Note No. 8 respectively of Notes forming part of financial statements. The guarantees are extended to secure the loans from Banks / Financial Institutions to the borrowers.
19. CORPORATE SOCIAL RESPONSIBILITY
In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and adopted a CSR Policy which is based on the philosophy that âAs the Organization grows, the Society and Community around it also grows.â
The Company has undertaken various projects in the areas of education, health, rural development, water and sanitation, promotion and development of traditional arts, livelihood enhancement projects, etc., largely in accordance with Schedule VII of the Companies Act, 2013.
Your Directors are pleased to inform that the Company has fulfilled its CSR obligations pursuant to Section 135(5) of the Companies Act, 2013. As against the requirement of Rs. 60.56 Lakhs, the Company has spent Rs. 68.55 Lakhs on CSR during the year 2016-17.
The Annual Report on CSR activities as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - II.
20. AUDITS STATUTORY AUDIT
As per the provisions of Section 139 of the Companies Act, 2013, the term of Office of M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja and Co., Chartered Accountants, come to an end at the close of the 81st Annual General Meeting of the Company.
M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, were the Auditors of the Company since incorporation and M/s. Ramakrishna Raja and Co., Chartered Accountants, were the Auditors of the Company since 1967-68. The Board of Directors wish to place on record their sincere appreciation for the services rendered by M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja and Co., Chartered Accountants, as Statutory Auditors of the Company, during their long association with the Company.
Subject to the approval of the Members of the Company at the ensuing 81st Annual General Meeting, the Board of Directors have recommended the appointment of M/s. N.A. Jayaraman & Co. Chartered Accountants and M/s. SRSV Associates, Chartered Accountants as Statutory Auditors of the Company, pursuant to Section 139 of the Companies Act, 2013. The Audit Committee at its meeting held on 24-05-2017 had recommended their appointment as Statutory Auditors, pursuant to Section 139 (11) of the Companies Act, 2013. Written consents from the incoming Auditors have been obtained, confirming that they satisfy the legal requirements for their appointment. The proposal relating to their appointment has been included in the notice convening the 81st Annual General Meeting of the Company. They shall hold office from the conclusion of 81st Annual General Meeting to the conclusion of 86th Annual General Meeting and the matter relating to the Auditorsâ appointment will be placed before the Members for their ratification at every intervening Annual General Meeting.
The report of Statutory Auditors viz., M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja and Co., Chartered Accountants, for the year ended 31st March, 2017 does not contain any qualification, reservation or adverse remark and no instance of fraud has been reported by Auditors under Section 143(12) of Companies Act, 2013.
SECRETARIAL AUDIT
Shri M.R.L. Narasimha, a Practicing Company Secretary has been appointed to conduct the Secretarial Audit of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditor for the year ended 31st March, 2017 is attached as Annexure - III. The report does not contain any qualification, reservation or adverse remark.
COST AUDIT
As per notification dated 31-12-2014 issued by MCA under the Companies (Cost Records and Audit) Rules, 2014, Textile Mills are required to file cost audit report with effect from the financial year 2015-16.
The Board of Directors had approved the appointment of Shri M. Kannan, Cost Accountant as the Cost Auditors of the Company to audit the Companyâs Cost Records relating to manufacture of textile products for the year 2017-18.
The remuneration of the cost auditor is required to be ratified by the Shareholders in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter related to his remuneration is being placed before the Members for ratification at the ensuing Annual General Meeting.
The Cost Audit Report for the financial year 2015-16 due to be filed with Ministry of Corporate Affairs by 30-09-2016 had been filed on 02-09-2016.
The Cost Audit Report for the financial year 2016-17 is due to be filed within 180 days from the closure of the financial year and will be filed within the stipulated period.
21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.
22. EXTRACT OF ANNUAL RETURN
In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is attached herewith as Annexure - V.
23. CORPORATE GOVERNANCE
The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V(C) of SEBI (LODR) Regulations, 2015, a Report on Corporate Governance being followed by the Company is attached as Annexure - VI. As required under Schedule V(E) of SEBI (LODR) Regulations, 2015 a Certificate from the Auditors confirming compliance is also attached as Annexure - VII to this Report.
24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) and (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure- VIII.
25. INDUSTRIAL RELATIONS AND PERSONNEL
The Company has 2,898 employees as on 31-03-2017. Industrial relations with employees remained cordial during the year. Human Resources Development activities received considerable focus. The emphasis was on imparting training and development of the skill-set of the employees to enable them to face the challenges in the work environment.
26. RELATED PARTY TRANSACTION
Prior approval / Omnibus approval is obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. No transaction with the related party is material in nature, in accordance with Companyâs âRelated Party Transaction Policyâ and Regulation 23 of SEBI (LODR) Regulations, 2015. In accordance with Ind AS 24 (Related Party Disclosure), the details of transactions with the related parties are set out in Note No: 43 of disclosures forming part of Financial Statements.
As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, The Companyâs Related Party Transaction Policy is disclosed in the Companyâs website and its web link is http://www.rajapalayammills.co.in/pdf/related-party-transaction-policy.pdf
27. RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and minimization of risk thereof.
28. DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:
(a) they had followed the applicable accounting standards along with proper explanation relating to material departures, if any, in the preparation of the annual accounts for the year ended 31st March, 2017;
(b) they 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 as on 31st March, 2017 and of the profit of the Company for the year ended on that date;
(c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) they had prepared the Annual Accounts on a going concern basis;
(e) they had 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of the Central and State Governments for their help and co-operation. They are thankful to the Financial Institutions and Banks for their continued help, assistance and guidance. The Directors wish to place on record their appreciation of employees at all levels for their commitment and their contribution.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LIMITED,
RAJAPALAIYAM, P.R. VENKETRAMA RAJA
04th June, 2017. CHAIRMAN
Mar 31, 2015
DEAR MEMBERS
The Directors have pleasure in presenting their 79th Annual Report and
the Audited Accounts of the Company for the year ended 31st March 2015.
FINANCIAL RESULTS
The financial results for the year ended 31st March, 2015 after
charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial
Fund of Rs.50 Lakhs (which is within the limits laid in the Articles of
Association) but before deducting finance cost and depreciation have
resulted in operating profit of Rs. 5,315.38 Lakhs against Rs.9,795.88
Lakhs for the previous financial year 2013-14.
After deducting Rs.2,765.78 Lakhs towards finance cost and providing
Rs.1,655.12 Lakhs towards Depreciation and considering Rs.1,019.11
Lakhs being Profit on Sale of Assets related to Rajapalayam Mills -
Subramaniapuram Unit, the Net Profit for the year is Rs. 1,913.59
Lakhs, against Rs.4,125.67 Lakhs for the previous financial year
2013-14. Adding the surplus of Rs.950.13 Lakhs brought forward from the
previous year, your Directors propose to appropriate the total sum of
Rs.2,863.72 Lakhs as detailed below:
Rs. in Lakhs
Provision for Taxation Current Tax - MAT 328.71
MAT credit entitlement (328.71)
MAT credit entitlement related
to earlier years withdrawn 10.83
Deferred Tax 698.45
Dividend Rs.2.50 per share
(PY: Rs.7.50 per share) 184.40
Tax on Dividend @20.358% 37.54
Transfer to General
Reserve 1,000.00
Balance carried over
to Balance Sheet 932.50
TOTAL 2,863.72
SHARE CAPITAL
The Paid-up Capital of the Company is Rs.737.62 Lakhs (Previous Year:
Rs.737.62 Lakhs) consisting of 73,76,160 Shares of Rs.10/- each.
DIVIDEND
Your Directors have pleasure in recommending a Dividend of Rs. 2.50 per
share (Previous Year: Rs.7.50 per share). The dividend will be tax free
income in the hands of Shareholders as the Company will pay Dividend
Distribution Tax under Income Tax Act, 1961. The total amount of
Dividend outgo for the year will be Rs.184.40 Lakhs. The amount of tax
on dividends would be Rs.37.54 Lakhs.
TAXATION
The Company is not liable to pay income tax under regular Income-Tax
provisions. An amount of Rs. 328.71 Lakhs towards Current Tax (MAT) and
Rs. 698.45 Lakhs towards Deferred Tax has been provided for the year.
The tax paid under MAT will be available for set off in the year of
regular income tax liability.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
Pursuant to Rule 8(3) of Companies (Accounts) Rules, 2014, the
information relating to Conservation of Energy, Technology Absorption
and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.
EXTRACT OF ANNUAL RETURN
In Accordance with Section 92(3) of the Companies Act, 2013, read with
Rule 12(1) of Companies (Management and Administration) Rules, 2014, an
extract of the Annual Return in Form MGT-9 is attached herewith as
Annexure - V.
CORPORATE GOVERNANCE
The Company has complied with the requirements regarding Corporate
Governance as stipulated in Clause 49 of the Listing Agreement. As
required under Clause 49(X) of the Listing Agreement, a Report on
Corporate Governance being followed by the Company together with a
Certificate from the Statutory Auditors confirming compliance as
required under Clause 49 (XI) of the Listing Agreement is set out in
Annexure - VI to this report.
RELATED PARTY TRANSACTION
The transaction with related party entered into by the Company are
periodically placed before the Audit Committee for its approval. No
transaction with the related party is material in nature, in accordance
with Company's "Related Party Transaction Policy" and Clause VII(C) of
the Listing Agreement. In accordance with Accounting Standard - 18
(Related Party Disclosure), the details of transactions with the
related parties are set out in Note No:26 (20) of disclosures forming
part of Financial Statements.
As required under Clause 49(VIII)(A)(2) of the Listing Agreement, the
Company's Related Party Transaction Policy is disclosed in the
Company's website and its weblink is -
http://www.rajapalayammills.co.in/pdf/related-party-tranactions-
policy.pdf.
RISK MANAGEMENT POLICY
Pursuant to Section 134(3)(n) of the Companies Act, 2013, the Company
has developed and implemented a Risk Management Policy. The Policy
envisages identification of risk and procedures for assessment and
minimization of risk thereof.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Directors
confirm that:
(a) in the preparation of the annual accounts, the applicable
Accounting Standards had been followed along with proper explanation
relating to material departures;
(b) they 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 profit and loss
of the Company for that period;
(c) they had taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
(d) they had prepared the Annual Accounts on a going concern basis;
(e) they had 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) they had devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate
and operating effectively.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of
the Central and State Governments for their help and co-operation. They
are thankful to the Financial Institutions and Banks for their
continued help, assistance and guidance. The Directors wish to place on
record their appreciation of employees at all levels for their
commitment and their contribution.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LIMITED,
RAJAPALAIYAM P.R.RAMASUBRAHMANEYA RAJHA
21st May, 2015. CHAIRMAN
Mar 31, 2014
TO THE MEMBERS
The Directors have pleasure in presenting their 78th Annual Report and
the Audited Accounts of the Company for the year ended 31st March 2014.
FINANCIAL RESULTS
The financial results for the year ended 31st March, 2014 after
charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial
Fund of Rs. 100 Lakhs (which is within the limits laid in the Articles
of Association) but before deducting finance cost and depreciation have
resulted in operating profit of Rs. 9,795.88 Lakhs against Rs.
8,836.01 Lakhs for the previous financial year 2012-13.
After deducting Rs. 2,849.64 Lakhs towards finance cost and providing
Rs. 2,820.57 Lakhs towards Depreciation, the Net Profit for the year
is Rs. 4,125.67 Lakhs, against Rs. 3,374.88 Lakhs for the previous
financial year 2012-13. Adding the surplus of Rs. 1,819.73 Lakhs
brought forward from the previous year and after deducting Rs. 954.00
Lakhs, being the debit balance in the profit and loss account of
transferor Company on amalgamation, your Directors propose to
appropriate the total sum of Rs. 4,991.40 Lakhs as detailed below:
Rs. in Lakhs
Provision for Taxation Current Tax - MAT 792.00
MAT credit for current year (792.00)
MAT credit related to earlier year (144.18)
Deferred Tax 1,611.30
Interim Dividend Rs. 5/- per share
(PY: Rs. 5/- per share) 368.81
Tax on Interim Dividend @16.995% 62.68
Final Dividend Rs. 2.50 per share
(PY: Rs. 1/- per share) 184.40
Tax on Final Dividend @16.995% 31.34
Transfer to General Reserve 1,926.92
Balance carried over to Balance Sheet 950.13
TOTAL 4,991.40
DIVIDEND
Your Directors have pleasure in recommending a Final Dividend of Rs.
2.50 per share. Together with the Interim Dividend of Rs. 5/- per
share paid during the year, the total dividend for the year is Rs.
7.50 per share (Previous Year: Rs. 6/- per share). The dividend will
be tax free income in the hands of Shareholders as the Company will pay
Dividend Distribution Tax under Income Tax Act, 1961. The total amount
of Dividend outgo including interim dividend for the year will be Rs.
553.21 Lakhs. The amount of tax on dividends (including tax on interim
dividend already paid) would be Rs. 94.02 Lakhs.
TAXATION
The Company is not liable to pay income tax under regular Income Tax
provisions. An amount of Rs. 792.00 Lakhs towards Current Tax (MAT) and
Rs. 1,611.30 Lakhs towards Deferred Tax has been provided for the year.
The tax paid under MAT will be available for set off in the year of
regular income tax liability.
TRADE CONDITIONS
Your Directors are glad to inform you that the performance of the
Company during the year was good due to good demand for our yarn, both
in domestic as well as export market. Though there was volatility in
cotton prices, constant demand for the value added yarn produced by
your Company has helped to maintain the yarn prices at reasonable
levels. The capacity of spinning and other value added facilities have
been utilized well during the year. Better yarn realization coupled
with higher capacity utilization have contributed for overall improved
financial performance of the Company.
The power cut in Tamil Nadu / Andhra Pradesh is still continuing.
Timely decision taken by your Directors to install Windmills in
previous years has helped the Company to mitigate the power short fall
during peak wind season. During this year, there was an unusual
restrictions imposed by the Tamil Nadu Generation and Distribution
Corporation (TANGEDCO) in evacuation of power generated by wind mills,
which has resulted in loss in generation of power from wind mills to
the extent of approximately 19 million units, which translated into Rs.
11 Crores in monetary terms.
Due to shut-down of wind mills by TANGEDCO, the Company was forced to
purchase the power from power generating companies / run the DG & HFO
sets, which are costly compared to wind mills. Due to this, the power
cost during the year has gone up substantially.
Inspite of spiraling wage cost, power cost and logistics cost, the
strategic decisions taken by the Company to focus on high quality value
added yarn catering to the premium customers in fabric and garment
segments, both in domestic and export markets have helped the Company
to improve operational and financial performance.
EXPORTS
On the export front during the year, we have made export of Cotton Yarn
/ Fabrics (including Merchant Exports) for a value of Rs. 122.56
Crores as against Rs. 78.64 Crores of the previous year.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko
Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued
support and efforts for promotion of exports to Japan and other
countries.
MODERNISATION
As a part of continuous thrust on modernization programme, the company
has invested about Rs. 31 Crores for investment in state-of-the-art
textile machinery & equipment like Carding, Combers,
Compact Ring Spinning Frames, Auto doffing System in Ring Frames, Auto
Cone Winding Machines, Link Coners, Open End Spinning Machines etc.
There was an increase in capacity by 3,312 Spindles & 448 Rotors
because of above modernization during the current year.
PROSPECTS FOR THE CURRENT YEAR
The cotton prices are currently ruling high at uneconomical levels. Due
to sluggish demand for yarn, the Spinning Mills are not able to
increase the yarn prices in line with the increased cotton cost. While
the cost of major inputs are increasing steeply, the yarn prices are
falling due to sluggishness in both domestic and global yarn markets.
There is no parity between cotton cost and yarn selling prices.
The Company is maintaining high standards of yarn quality, cost
effective production and stringent waste control measures and focusing
on more automation with a view to utilize the skilled manpower more
efficiently. The Company is making all efforts to cope up with the
current challenges through continuous cost reduction, imparting
training to the employees at all levels, re-engineering of process and
improved customer service to protect the profit margins. Your Directors
are hopeful of achieving satisfactory results for the current year with
the implementation of above steps.
WIND MILL
The Company has wind mills with installed capacity of 32.75 MW for its
captive power consumption. These wind mills are connected to the grids
maintained by Tamil Nadu Generation and Distribution Corporation
(TANGEDCO). These wind mills were permitted to run and generate power
throughout the wind season until previous yeaRs. But during this year,
TANGEDCO did not evacuate the power generated by wind mills and the
wind mills were forced to shut down during peak wind season, ranging
from eight to twenty hours resulting in heavy financial losses to the
Company. Due to this, there was drastic reduction in the power
generated by our wind farm, though there was good wind season during
the year compared to previous year.
The wind farm has generated 546 Lakhs Kwh as compared to 644 Lakhs Kwh
of the previous year. The income during the year from the Wind Mill
Division was Rs. 31.55 Crores as against Rs. 36.54 Crores of previous
year.
PERSONNEL
Industrial relations with employees remained cordial during the year.
Human Resources Development activities received considerable focus. The
emphasis was on imparting training and development of the skill-set of
the employees to enable them to face the challenges in the work
environment. The scarcity of skilled labour coupled with high labour
cost is a matter of concern for textile mills. We are striving our
best to retain them by implementing various attractive incentive
schemes.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the
employees are required to be set out in the Annexure to the Directors''
Report. However, as per the provisions of Section 219 (1) (b) (iv) of
the said Act, the Annual Report excluding the aforesaid information is
being sent to all the Members of the Company and others entitled
thereto. Member who is interested in obtaining such particulars may
write to the Company.
INTERNAL CONTROL SYSTEM
Your Company has adequate internal control procedures commensurate with
the size and nature of its operations. The audit committee constituted
by the Board of Directors is functioning effectively. All significant
audit observations were discussed in the audit committee, which met
Four times during the year under review. ERP System developed by Ramco
Systems Limited, has been installed for online monitoring of all
functions and management information reports are being used to have
better control and to take decisions in time.
DIRECTORS
Shri N.R.K. Venkatesh Raja, has resigned from the Board on 19-05-2014
and he had been on the Board of the Company for 28 yeaRs. The
Directors place on record the valuable and constructive contribution
made by Shri N.R.K. Venkatesh Raja during his association with the
Company.
The following Directors retire by rotation at the ensuing Annual
General Meeting and they are eligible for re-appointment.
1. Dr. K.T. Krishnan
2. Shri A.V. Dharmakrishnan
3. Shri P.R. Venketrama Raja
During the year, Justice Shri P.P.S. Janardhana Raja and Shri V.
Santhana Raman have been co-opted by the Board as Additional Directors
and they will hold office till the date of the forthcoming Annual
General Meeting. A Notice has been received from a Member signifying
his intention to propose the appointment of Justice Shri P.P.S.
Janardhana Raja and Shri V Santhana Raman as Directors at the Annual
General Meeting.
In accordance with Clause 49 of the Listing Agreement, 50% of the total
number of Directors should be Independent DirectoRs. Accordingly,
Members'' approval is being sought to have the following as Independent
DirectoRs.
1. Dr. K.T. Krishnan
2. Shri N.K. Ramasuwami Raja
3. Justice Shri P.P.S. Janardhana Raja
4. Shri V. Santhana Raman
As per Companies Act 2013, the independent directors have to be
appointed for a term of 5 years and they are not liable to retire by
rotation. The proposal for the appointment of above Independent
Directors along with their profile is attached in the Notice of the
AGM.
PUBLIC DEPOSITS
The total deposits from the public outstanding with the Company as on
31-03-2014 were Rs. 868.58 Lakhs including the deposits renewed in
accordance with Section 58A of the Companies Act, 1956. There was no
deposits unclaimed / unpaid as on 31-03-2014.
Section 74 of the Companies Act, 2013 has provided an option to repay
the existing deposits accepted on or before 31-03-2014. The Company has
decided not to accept fresh deposits from 01-04-2014 and to repay all
the existing deposits by complying with the formalities required in
this regard.
SHARES
The Company''s shares are listed in Madras Stock Exchange Limited and
Bombay Stock Exchange Limited. The Company had paid listing fees to the
Stock Exchanges for the financial year 2014-15.
AUDITORS
M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and
M/s. Ramakrishna Raja and Co., Chartered Accountants, are the Auditors
of the Company.
Under Section 139 of the Companies Act, 2013, a listed Company can
appoint an Audit Firm as Auditor for a maximum of 2 terms of 5
consecutive yeaRs. However, they are eligible for reappointment after
a period of 5 years from the completion of such term. Both the Auditors
have completed the maximum threshold limit of 10 consecutive yeaRs.
However, a period of 3 years is given for compliance of the new
requirement. Since a period of 3 years is available to continue with
the existing auditors, it is proposed to appoint them for the remaining
eligibility period of 3 yeaRs.
COST AUDITORS
The Government has approved the Company''s proposal to appoint M/s.
Geeyes & Co., Cost Accountants, Chennai for audit of Company''s cost
accounts for the year ended 31-03-2014 on a remuneration of Rs.
1,10,000/- exclusive of out-of-pocket expenses.
The Cost Audit Report for the financial year 2012-13 due to be filed
with Ministry of Corporate Affairs by 27-09-2013, had been filed on
16-09-2013. The Cost Audit Report for the financial year 2013-14 is due
to be filed within 180 days from the closure of the financial year and
will be filed within the stipulated period.
Under Section 148 of the Companies Act, 2013, the Government is yet to
notify the class of companies to which the Cost Audit is applicable.
Based upon such notifications as and when issued, the Company will take
steps for implementation.
AMALGAMATION
At the meeting held on 28-05-2012, the Board of Directors approved the
proposal for the amalgamation of its wholly owned subsidiary,
Rajapalayam Spinners Limited (RSL) with the Company. The Honorable
High Court of Madras vide its order dated 13-06-2013, sanctioned the
''Scheme of Amalgamation'' of RSL with the Company. The "Appointed Date"
has been fixed as 01-04-2012. Thus from this date, RSL stands
amalgamated with the Company and more details are furnished in the
Notes to the Financial Statements of this Annual Report.
SALE OF ASSETS AND LIABILITIES OF A SPINNING UNIT OF THE COMPANY
After amalgamation, the Spinning Mill owned by Rajapalayam Spinners
Limited was re-named as Rajapalayam Mills - Subramaniapuram Unit.
Before the acquisition, RSL has established market for coarser yarn
counts. Since the other units in the Company was producing fine and
super fine counts, in order to cater the coarser yarn segment also, the
Company has acquired the business of RSL.
Rajapalayam Mills - Subramaniapuram Unit has very limited synergies
with other Units of Rajapalayam Mills owing to super fine and value
added count pattern and finest quality yarn segment, where the existing
other Units focus their production and marketing.
Different ownership structure with different brand can fully utilize
the capacity and business potential of Rajapalayam Mills -
Subramaniapuram Unit. In these circumstances, selling off this Unit is
considered to be a better proposal in the long term interests of
Rajapalayam Mills Limited.
Hence the Board at its meeting held on 03-02-2014 has approved the
proposal of the Company to sell the assets along with liabilities of
above Unit, subject to the approval of the Shareholders of the Company
and formed a Committee of Directors to decide the fair market value and
other matters related to the above sale.
In order to decide the fair market value of the Assets of Rajapalayam
Mills - Subramaniapuram Unit, the Company was advised to get tenders by
publishing an advertisement in the leading Newspapers about the
Company''s proposal to sell the assets of the above said Unit. The
Company has published an advertisement on 12-02-2014 in Business Line
(All India Edition) and The Hindu-Tamil (Tamil Nadu Edition).
Based on the tender received in response to the above advertisement &
based on the report of two independent chartered engineers, the
Committee recommended that Rs. 33.31 Crores may be fixed as fair
market value of fixed assets and the same has been approved by the
Board on 24-02-2014. The proposal was also approved by the Shareholders
of the Company by way of Special Resolution passed through Postal
Ballot on 31-03-2014.
The Company, on 25-04-2014 has completed the sale of assets and
liabilities of Rajapalayam Mills - Subramaniapuram Unit in accordance
with the above said Special Resolution. The effect of this sale will be
given effect in the financial statements of next Financial Year
2014-15.
CONSERVATION OF ENERGY, ETC.,
The Company continues to take keen interest in conservation of energy
and the information required under Section 217(1) (e) of the Companies
Act, 1956 read with the relevant Rules, with regard to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
are given in Annexure I to this report.
CORPORATE GOVERNANCE
The Company has complied with the requirements regarding Corporate
Governance as required under Clause 49 of the Listing Agreements with
the Stock Exchanges. A Report on Corporate Governance followed by the
Company together with a Certificate from the Statutory Auditors
confirming compliance is set out in Annexure II to this report.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors Confirm that -
i) In the preparation of Annual Accounts for the year ended 31st March
2014, the applicable accounting standards had been followed;
ii) The selected accounting policies were applied consistently and
judgments and estimates that are reasonable and prudent were made 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 of the Company for that
period.
iii) Proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act had been taken for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities.
iv) The annual accounts were prepared on a going concern basis.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of
the Central and State Governments for their help and co-operation. They
are thankful to the Financial Institutions and Banks for their
continued help, assistance and guidance. The Directors wish to place on
record their appreciation of employees at all levels for their
commitment and their contribution.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LIMITED,
RAJAPALAIYAM,
25th May, 2014.
P.R.RAMASUBRAHMANEYA RAJHA
CHAIRMAN
Mar 31, 2013
TO THE MEMBERS
The Directors have pleasure in presenting their 77th Annual Report and
the Audited Accounts of the Company for the year ended 31st March 2013.
FINANCIAL RESULTS
The financial results for the year ended 31st March, 2013 after
charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial
Fund of Rs.57.31 Lakhs (which is within the limits laid in the Articles
of Association) but before deducting finance cost and depreciation have
resulted in operating profit of Rs. 8,836.01 Lakhs against Rs.6,184.36
Lakhs for the previous financial year 2011-12.
After deducting Rs. 2,648.45 Lakhs towards finance cost and providing
Rs.2,812.68 Lakhs towards Depreciation, the Net Profit for the year is
Rs.3,374.88 Lakhs (Previous year: Net Loss of Rs. 529.37 Lakhs). Adding
the surplus of Rs.289.84 Lakhs brought forward from the previous year,
your Directors propose to appropriate the total sum of Rs. 3,664.72
Lakhs as detailed below:
Rs. in Lakhs
Provision for Taxation Current Tax - MAT 357.00
MAT credit entitlement (219.15)
Deferred Tax 859.90
Interim Dividend Rs.5/- per share (PY: Rs.Nil) 368.81
Tax on Interim Dividend @ 16.2225% 59.83
Final Dividend Rs.1/- per share
(FY: Rs.1/- per share) 73.76
Tax on Final Dividend ©16.995% 12.54
Transfer to General Reserve 332.30
Balance carried over to Balance Sheet 1,819.73
TOTAL 3,664.72
DIVIDEND
Your Directors have pleasure in recommending a Final Dividend of Rs.
1/- per share. Together with the Interim Dividend of Rs.5/- per share
paid during the year, the total dividend for the year is Rs. 6/- per
share (Previous Year: Rs.1/- per share). The dividend will be tax free
income in the hands of Shareholders as the Company will pay Dividend
Distribution Tax under Income Tax Act, 1961. The total amount of
Dividend outgo including interim dividend for the year will be
Rs.442.57 Lakhs. The amount of tax on dividends (including tax on
interim dividend already paid) would be Rs.72.37 Lakhs.
TAXATION
The Company is not liable to pay income tax under regular Income Tax
provisions. An amount of Rs. 357.00 Lakhs towards Current Tax (MAT) and
Rs. 859.90 Lakhs towards Deferred Tax has been provided for the year.
The tax paid under MAT will be available for set off in the year of
regular income tax liability.
TRADE CONDITIONS
After a long spell of sluggishness, there was a sign of revival
witnessed in Textile Industry. The cotton and yarn prices prevailed at
a reasonable level. The expanded capacity with most modern and
automatic machines has been utilized fully to make use of the improved
demand situation. Better yarn realization coupled with higher capacity
utilization have contributed for overall improved financial performance
of the Company.
The severe power cut in Tamilnadu / Andhrapradesh is still continuing.
Timely decision taken by your Directors to install Wind Mills in
previous years and purchase of power from Third Party have helped the
Company to tide over the power crisis to a greater extent. Still to
meet the power short fall, we have to use Furnance Oil / Diesel
Generator sets resulting in higher costs. The hike in electricity
tariff rate by 30% by Government of Tamilnadu and also hike in Wheeling
and other charges imposed on Wind Mills have pushed up the cost of
power very steeply.
Inspite of spiraling wage cost, cost of power and logistics cost, the
strategic decisions taken by the Company for installation of Wind
Mills, increasing the capacity of Spindles with most advanced
machineries, implementation of various cost reduction measures and
production of flexible/value added count pattern have helped the
Company to achieve improved results in the current market scenario.
EXPORTS
On the export front during the year, we have made export of Cotton Yarn
/ Fabrics (including Merchant Exports) for a value of Rs. 78.64 Crores
as against Rs. 95.66 Crores of the previous year.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko
Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued
support and efforts for promotion of exports to Japan and other
countries.
MODERNISATION
As a part of continuous intensive modernization programme, the company
has invested about Rs. 3 Crores for investment in state-of-the-art
textile machinery & equipments like Soft Package, High Draft
Conversion, Contamination Detector in Blow Room, Auto Doffer in
Spinning, Yarn Conditioning Machines etc.
PROSPECTS FOR THE CURRENT YEAR
The high volatility in cotton prices during the current cotton season
2012-13 is creating uncertainties for Spinning Mills. The cotton prices
are currently ruling high at uneconomical levels. There is no sustained
demand for yarn both in domestic and global markets to absorb the
increased cotton cost. The power cut imposed in Tamilnadu /
Andhrapradesh and increase in power tariff are severely affecting the
operations of the Company.
The Company is maintaining high standards of yarn quality, cost
effective production and stringent waste control measures. The Company
is focusing on more automation with a view to utilize the skilled
manpower more efficiently and also focusing on value added yarn. These
measures have strengthened the Company to face the challenges in the
current scenario. Your Directors are hopeful of achieving satisfactory
results for the current year with the implementation of above steps.
WIND MILL
The Wind Mill Division with an installed capacity of 30.35 MW is
working satisfactorily. There was good wind velocity during the year
compared to previous year, which resulted in higher generation of
power. This year our wind farm have generated 644 Lakhs Kwh as compared
to 527 Lakhs Kwh of the previous year because of favourable wind
season. The income during the year from the Wind Mill Division was Rs.
36.54 Crores as against Rs.22.57 Crores of previous year. All the power
generated from our wind farm were consumed captively.
PERSONNEL
Industrial relations with employees remained cordial during the year.
Human Resources Development activities received considerable focus. The
emphasis was on imparting training and development of the skill-set of
the employees to enable them to face the challenges in the work
environment. The scarcity of skilled labour and heavy absenteeism in
labour attendance are causing loss of production. We are striving our
best to retain them by implementing attractive incentive schemes to
labours to achieve better attendance.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are required
to be set out in the Annexure to the Directors'' Report. However, as per
the provisions of Section 219 (1) (b) (iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
Members of the Company and others entitled thereto. Member who is
interested in obtaining such particulars may write to the Company.
INTERNAL CONTROL SYSTEM
Your Company has adequate internal control procedures commensurate with
the size and nature of its operations. The audit committee constituted
by the Board of Directors is functioning effectively. All significant
audit observations were discussed in the audit committee, which met
five times during the year under review. ERP System developed by Ramco
Systems Ltd., has been installed for online monitoring of all functions
and management information reports are being used to have better
control and to take decisions in time.
DIRECTORS
Shri RS. Jaganatha Raja, has resigned from the Board with effect from
27-05-2013 and he had been on the Board of the Company for 31 years.
Shri V.S. Vemban, has resigned from the Board with effect from
27-05-2013 and he had been on the Board of the Company for 35 years.
The Directors place on record the valuable and constructive
contribution made by above Directors during their association with the
Company.
In accordance with the provisions of Companies Act, 1956 and the
Company''s Articles of Association, the following Directors retire by
rotation at the ensuing Annual General Meeting and they are eligible
for re-appointment.
1. Shri N.R.K. Venkatesh Raja
2. Shri S.S. Ramachandra Raja
3. Shri N.K. Ramasuwami Raja
PUBLIC DEPOSITS
The total deposits from the public outstanding with the Company as on
31st March, 2013 were Rs. 570.75 Lakhs including the deposits renewed
in accordance with Section 58A of the Companies Act, 1956. There was no
deposits unclaimed / unpaid as on 31-03-2013.
SHARES
The Company''s shares are listed in Madras Stock Exchange Limited and
Bombay Stock Exchange Limited. The Company had paid listing fees to the
Stock Exchanges for the financial year 2013-14.
AUDITORS
M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants and M/s.
Ramakrishna Raja and Co., Chartered Accountants, Auditors of the
Company retire at the end of the 77th Annual General Meeting and are
eligible for re-appointment.
COST AUDITORS
The Government has approved the Company''s proposal to appoint M/s.
Geeyes & Co., Cost Accountants, Chennai for audit of Company''s cost
accounts for the year ended 31-03-2013 on a remuneration of Rs.
75,000/- exclusive of out-of-pocket expenses. As per Central
Government''s direction, cost audit will be done every year.
SUBSIDIARY
Government of India, Ministry of Corporate Affairs, vide their General
Circular No.2/2011 dated 08-02-2011, has granted general exemption
under Section 212(8) of the Companies Act, 1956 to the Companies from
attaching the full text of the Financial Statements of the Subsidiaries
along with the Company''s accounts / Annual Report subject to certain
conditions being fulfilled. As required under the said general
exemption Circular, the Consolidated Financial Statements have been
presented in this Annual Report and the other required disclosures on
the Company''s Subsidiary namely Rajapalayam Spinners Limited have also
been made in this report.
The Audited Annual Accounts of the subsidiary and the related detailed
information will be made available to the Shareholders of the Company
and also the Shareholders of the Subsidiary Company seeking such
information. The Annual Accounts of the Subsidiary Company will also be
kept for inspection by any Shareholder, at the Corporate Office of the
Company and of the Subsidiary Company concerned between 10.00 am to
12.00 noon on any working day of the Company and of the respective
subsidiary companies, upto the date of the 77th Annual General Meeting.
AMALGAMATION
At the meeting held on 28-05-2012, the Board of Directors approved the
proposal for the amalgamation of its wholly owned subsidiary,
Rajapalayam Spinners Private Limited ("Transferee Company") with the
Company and the petition filed by the Transferee Company in CP No.71 /
2013 has already been admitted in the Madras High Court. The "Appointed
Date" has been fixed as 1st April, 2012. The amalgamation is subject to
all the necessary statutory / regulatory approvals and orders of the
Madras High Court.
CONSERVATION OF ENERGY, ETC.,
The Company continues to take keen interest in conservation of energy
and the information required under Section 217(1) (e) of the Companies
Act, 1956 read with the relevant Rules, with regard to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
are given in Annexure I to this report.
CORPORATE GOVERNANCE
This Company has complied with the requirements regarding Corporate
Governance as required under Clause 49 of the Listing Agreements with
the Stock Exchanges. A Report on Corporate Governance followed by the
Company together with a Certificate from the Statutory Auditors
confirming compliance is set out in Annexure II to this report.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors Confirm that -
i) In the preparation of Annual Accounts for the year ended 31st March
2013, the applicable accounting standards had been followed;
ii) The selected accounting policies were applied consistently and
judgments and estimates that are reasonable and prudent were made 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 of the Company for that
period.
iii) Proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act had been taken for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities.
iv) The annual accounts were prepared on a going concern basis.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of
the Central and State Governments for their help and co-operation. They
are thankful to the Financial Institutions and Banks for their
continued help, assistance and guidance. The Directors wish to place on
record their appreciation of employees at all levels for their
commitment and their contribution.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LTD.,
RAJAPALAIYAM, P.R.RAMASUBRAHMANEYA RAJHA
27th May, 2013. CHAIRMAN
Mar 31, 2012
The Directors have pleasure in presenting their 76th Annual Report and
the Audited Accounts of the Company for the year ended 31st March,
2012.
FINANCIAL RESULTS
The financial results for the year ended 31st March, 2012 after
charging all expenses but before deducting finance cost and
depreciation have resulted in operating profit of Rs. 6,184.36 Lakhs.
After deducting Rs. 3,706.18 Lakhs towards finance cost and providing
Rs. 3,007.55 Lakhs towards Depreciation, the Net Loss for the year is
Rs. (-) 529.37 Lakhs. Considering reversal of Deferred Tax Liability of
Rs. 660.96 Lakhs and adding the surplus of Rs. 243.98 Lakhs brought
forward from the previous year, your Directors propose to appropriate
the total sum of Rs. 375.57 Lakhs as detailed below:
Rs. in Lakhs
Dividend Rs. 1/- per share 73.76
(PY : Rs.15/- per share)
Tax on Dividend @ 16.2225% 11.97
Balance carried over to
Balance Sheet 289.84
TOTAL 375.57
DIVIDEND
Your Directors have pleasure in recommending a dividend of Rs. 1/- per
share (Previous Year: Rs.15/- per share). The dividend will be tax free
income in the hands of Shareholders as the Company will pay Dividend
Distribution Tax under Income Tax Act, 1961. The total amount of
Dividend outgo (including tax on dividend) would be Rs. 85.73 Lakhs.
TAXATION
The Company is not liable to pay income tax under regular method and
there is no tax liability under Minimum Alternate Tax. An amount of Rs.
660.96 Lakhs has been withdrawn from Deferred Tax Liability provided in
the earlier years which is in accordance with the Accounting Standards.
TRADE CONDITIONS
As reported in the Directors' Report in the previous year, Textile
Industry especially Spinning Mills across the country are facing
unprecedented crisis on account of inconsistent policies adopted by the
Government of India with regard to export of cotton and cotton yarn.
The cotton prices have gone up too steeply during the season 2010-11
due to unrealistic Government's decision to export huge quantity of
cotton during peak cotton season. The Mills were forced to buy good
quality cotton at abnormally higher prices during that season which was
consumed during the financial year 2011-12. There was no parity between
cotton cost and price of yarn sold. The Mills were forced to sell the
yarn at very low price, though the yarn was produced with the stock of
high-cost cotton procured during the season 2010-11 and thus incurred
huge inventory losses.
The ban on cotton yarn exports for more than two months in the last
quarter of the financial year 2010-11 and the declining domestic demand
has resulted in piling up of huge stock of cotton yarn in the Mills.
When export of cotton yarn was allowed in April 2011, the accumulated
stock caused a crash of cotton yarn prices in the global and domestic
markets. The mounting pressure of inventory with Indian Mills and their
eagerness to get rid of their inventory before the arrival of new
cotton, virtually pushed the global yarn prices down by more than 30
per cent within a month. The crisis in Europe had affected the exports
from India and the export orders from European countries have started
shrinking during the year under review.
The power cut in Tamilnadu has worsened during the year and severe
power cut measures were announced and the power availability from the
grid was only 25% from March, 2012 and is still continuing. The
mismatch between increased demand for electricity and shortage in the
supply has affected the capacity utilization of Mills in Tamilnadu.
Timely decision taken by your Directors to install Windmills in
previous years and purchase of power from Third Party have helped the
Company to tide over the power crisis. Still to meet the full
requirements, we have to use Diesel Generator sets resulting in higher
costs.
In order to contain the inflation in India, The Reserve Bank of India
has tightened the monetary policy by increasing the lending and
borrowing rates. Because of these measures, all the Banks have hiked
the rate of interest by 2% to 3% for all our term loans and working
capital loans.
The cumulative effect of the above factors have adversely affected the
performance of the Company.
EXPORTS
On the export front during the year, we have made direct export of
Cotton Yarn / Fabrics for a value of Rs. 72.36 Crores as against Rs.
81.44 Crores of the previous year.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko
Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued
support and efforts for promotion of exports to Japan and other
countries.
MODERNISATION
As a part of continuous intensive modernization programme, the company
has invested about Rs. 9 Crores for investment in state-of-the-art
textile machinery & equipments like Elite Compact Set, Open-End (OE)
Spinning Machines, Compact Ring Spinning Machine with Automatic Link
Coner, Gassing Machine, Soft Package Winding Machine, etc.
PROSPECTS FOR THE CURRENT YEAR
The Central Government's frequent interventions in the form of
imposition and removal of quantitative restrictions on export of raw
cotton as well as cotton yarn without taking a comprehensive view of
demand and supply requirements of various segments of textile industry
has resulted in high volatility in cotton prices during the cotton
season 2011-12. The cotton prices still ruling high at uneconomical
levels.
The yarn prices are stagnant due to recessionary trend in both domestic
and global markets. The power cut imposed in Tamilnadu to the extent
of 75% is severely affecting the operations of the Company. The
Government of Tamilnadu has also announced the increase in power tariff
by more than 30%.
The increase in wages, power cost, fuel prices & interest cost and the
increase in the power cuts in recent period definitely pose a
challenge. While the cost of major inputs are increasing steeply, the
yarn price has not increased. Your Directors are therefore unable to
predict the profitability of the Company in the current year. However,
the Company is maintaining high standards of Quality Yarn, cost
effective production and stringent waste control measures. These
measures strengthened the Company to withstand the challenges in the
current scenario.
WIND MILL
The Wind Mill Division with an installed capacity of 30.70 MW is
working satisfactorily. The Division has generated 527 Lakhs Kwh as
compared to 443 Lakhs Kwh of the previous year. The full benefit of
windmills purchased during September, 2010 with the capacity of 8.80 MW
has accrued during the year. The income during the year from the Wind
Mill Division was Rs. 22.50 Crores as against Rs. 17.69 Crores of
previous year.
PERSONNEL
Industrial relations with employees remained cordial during the year.
Human Resources Development activities received considerable focus. The
emphasis was on imparting training and development of the skill-set of
the employees to enable them to face the challenges in the work
environment. The scarcity of skilled labour and heavy absenteeism in
labour attendance are causing loss of production. We are striving our
best to retain them by implementing attractive incentive schemes to
labours to achieve better attendance.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are required
to be set out in the Annexure to the Directors' Report. However, as per
the provisions of Section 219 (1) (b) (iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
Members of the Company and others entitled thereto. Member who is
interested in obtaining such particulars may write to the Company.
INTERNAL CONTROL SYSTEM
Your Company has adequate internal control procedures commensurate with
the size and nature of its operations. The audit committee constituted
by the Board of Directors is functioning effectively. All significant
audit observations were discussed in the audit committee, which met
four times during the year under review. ERP System developed by Ramco
Systems Ltd., has been installed for online monitoring of all functions
and management information reports are being used to have better
control and to take decisions in time.
DIRECTORS
The following Directors retire by rotation at the ensuing Annual
General Meeting and they are eligible for re-appointment.
1. Shri P.R.Venketrama Raja
2. Shri P.S.Jaganatha Raja
3. Shri V.S.Vemban
PUBLIC DEPOSITS
The total deposits from the public outstanding with the Company as on
31st March, 2012 were Rs. 294.39 Lakhs including the deposits renewed
in accordance with Section 58A of the Companies Act, 1956. There was no
deposits unclaimed / unpaid as on 31-03-2012.
SHARES
The Company's shares are listed in Madras Stock Exchange Limited and
Bombay Stock Exchange Limited. The Company had paid listing fees to the
Stock Exchanges for the financial year 2012-13.
AUDITORS
M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants and M/s.
Ramakrishna Raja and Co., Chartered Accountants, Auditors of the
Company retire at the end of the 76th Annual General Meeting and are
eligible for re-appointment.
COST AUDITORS
The Government has approved the Company's proposal to appoint M/s.
Geeyes & Co., Cost Accountants, Chennai for audit of Company's cost
accounts for the year ended 31-03-2012 on a remuneration of Rs.
50,000/- exclusive of out-of-pocket expenses. As per Central
Government's direction, cost audit will be done every year. For the
year ended 31st March, 2011, the due date of filing the cost audit
report was 30th September, 2011 and the actual date of filing the cost
audit report was 10th September, 2011.
SUBSIDIARY COMPANY
In terms of provisions of Section 212 of the Companies Act, 1956, the
financial statements of the subsidiary company have to be attached
along with the financial statements of the holding Company. Government
of India, Ministry of Corporate Affairs, vide their General Circular
No.2/2011 dated 08-02-2011, has granted general exemption under Section
212(8) of the Companies Act, 1956 to the Companies from attaching the
full text of the Financial Statements of the Subsidiaries along with
the Company's accounts / Annual Report subject to certain conditions
being fulfilled. As required under the said general exemption
Circular, the Consolidated Financial Statements have been presented in
this Annual Report and the other required disclosures on the Company's
Subsidiary namely M/s. Rajapalayam Spinners Limited have also been made
in this report.
The Audited Annual Accounts of the subsidiary and the related detailed
information will be made available to the Shareholders of the Company
seeking such information at any point of time. The Annual Accounts of
the Subsidiary Company will also be kept for inspection by any
Shareholder, at the Registered Office of the Company and of the
Subsidiary Company concerned.
The Board has approved a scheme of amalgamation of its wholly owned
subsidiary M/s. Rajapalayam Spinners Limited with the Company, with
effect from 01-04-2012, subject to completion of statutory formalities
and the approval of the High Court of Judicature at Madras.
CONSERVATION OF ENERGY, ETC.,
The Company continues to take keen interest in conservation of energy
and the information required under Section 217(1) (e) of the Companies
Act, 1956 read with the relevant Rules, with regard to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
are given in Annexure I to this report.
CORPORATE GOVERNANCE
This Company has complied with the requirements regarding Corporate
Governance as required under Clause 49 of the Listing Agreements with
the Stock Exchanges. A Report on Corporate Governance followed by the
Company together with a Certificate from the Statutory Auditors
confirming compliance is set out in Annexure II to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors Confirm that -
i) In the preparation of Annual Accounts for the year ended 31st March
2012, the applicable accounting standards had been followed;
ii) The selected accounting policies were applied consistently and
judgments and estimates that are reasonable and prudent were made 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 of the Company for that
period;
iii) Proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act had been taken for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
iv) The annual accounts were prepared on a going concern basis.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of
the Central and State Governments for their help and co-operation. They
are thankful to the Financial Institutions and Banks for their
continued help, assistance and guidance. The Directors wish to place on
record their appreciation of employees at all levels for their
commitment and their contribution.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LTD.,
RAJAPALAIYAM, P.R.RAMASUBRAHMANEYA RAJHA
28th May, 2012. CHAIRMAN
Mar 31, 2011
TO THE MEMBERS
The Directors have pleasure in presenting their 75th Annual Report and
the Audited Accounts of the Company for the year ended 31st March 2011.
FINANCIAL RESULTS
The financial results for the year ended 31st March, 2011 after
charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial
Fund of Rs.1,00,00,000/- (which is within the limits laid in the
Articles of Association) but before deducting interest and depreciation
have resulted in operating profit of Rs.99,49,87,912/-.
After deducting Rs. 28,50,77,780/- towards interest cost and providing
Rs. 32,11,07,050/- towards Depreciation, the Net Profit for the year is
Rs. 38,88,03,082/- adding the surplus of Rs. 9,69,30,655/- brought
forward from the previous year, your Directors propose to appropriate
the total sum of Rs. 48,57,33,737/- as detailed below:
Rs.
Provision for Taxation - Current Tax - MAT 7,30,00,000
- Deferred Tax 12,00,00,000
- MAT credit
entitlement (-) 7,29,00,000
Dividend Rs. 7.50 per share 2,63,44,350
(P.Y. - Rs.6/- per
share)
Platinum Jubilee Dividend Rs. 7.50 per share 2,63,44,350
Tax on Dividends @ 16.2225% 85,47,424
Transfer to General Reserve 28,00,00,000
Balance carried over to
Balance Sheet 2,43,97,613
TOTAL 48,57,33,737
DIVIDEND
Your Directors have pleasure in recommending a dividend of Rs. 7.50 per
share. The dividend will be tax free income in the hands of
Shareholders as the Company will pay Dividend Distribution Tax under
Income Tax Act, 1961.
In view of the Platinum Jubilee of the Company, your Directors have
pleasure in recommending a Platinum Jubilee Dividend and Issue of Bonus
Shares as follows:
A) PLATINUM JUBILEE DIVIDEND
Your Directors have pleasure in recommending a Platinum Jubilee
Dividend of Rs.7.50 per share. Inclusive of this, the total Dividend
for the year is Rs.15/- per share (Previous Year Rs.6/- per share).
The total amount of Dividend outgo (including tax on dividends) would
be Rs. 6,12,36,124/-.
B) ISSUE OF BONUS SHARES
Your Directors have also pleasure in recommending issue of Bonus Shares
to the holders of Equity Shares in the ratio of 1:1 by capitalizing the
Reserves (Share Premium Account) of Rs. 3,51,25,800/- subject to the
approval of the Members at the Extraordinary General Meeting.
TAXATION
An amount of Rs. 730 Lakhs towards Current Tax (MAT) and Rs. 1,200
Lakhs towards Deferred Tax has been provided for the year. The tax paid
under MAT will be available for set off in the year of regular income
tax liability.
TRADE CONDITIONS
Your Directors are glad to inform that the performance of the Company
during the Platinum Jubilee year was commendable and has been highest
in the history of the Company inspite of the unprecedented increase in
cotton prices. The financial year 2010-11 witnessed a very difficult
trade conditions due to the following reasons:
A) Cotton
There has been unprecedented rise in the cotton prices during the
cotton season started from October, 2010 and the cotton prices have
gone up by more than 100% as compared to the previous cotton season.
Cotton, often referred as "White Gold" has recorded the historic
highest prices. The Government of India has allowed export of more than
15% of Cotton produced in India and the good quality of cotton was
shipped out of India within 3 months. This has resulted in mismatch
between demand and supply of cotton and the domestic spinning mills
were forced to pay higher prices for good quality cotton.
B) Electricity
The power cut in Tamilnadu continued to the extent of 100% for 4 hours
during 6 P.M. to 10 P.M. and 30% during the rest of the hours, in
addition to unannounced power shutdowns. This has forced the Company to
operate captive Gensets in order to maintain the optimum utilization
level. The power cost has increased by more than 15% as compared to
previous year. Timely decision taken by your Directors to install
Windmills in previous years and purchase of power from Third Party have
helped the Company to operate the Mills at optimum utilization level
and also helped the Company to tide over the power crisis.
C) Inflation & Impact on Cost of borrowing
In order to contain the inflation in India, The Reserve Bank of India
has tightened the monetary policy by increasing the lending and
borrowing rates. Because of these measures, all the Banks have hiked
the rate of interest by 2% to 3% for all our term loans and working
capital loans.
D) Cotton Yarn Export brought under Quota System
The export of cotton yarn was under Quota Raj till 1995. When the
textiles and clothing were brought into the mainstream under the WTO,
the quota system was abolished and export of yarn was allowed without
any restriction.
The Domestic and the International Yarn markets have started improving
specifically after a long spell of sluggishness witnessed due to Global
Economic Crisis during the period from 2008 to 2010. However, the
Government of India has suddenly restricted the export of Cotton Yarn
during December, 2010 to March, 2011 and re-introduced the Quota
system. This has affected the Yarn Market both in Domestic as well as
Export, which resulted in sluggishness of yarn prices & yarn movements
in India.
By implementing various cost reduction measures and production of
flexible count pattern with more value added yarn, your Directors were
able to achieve satisfactory results in the current market scenario.
FINANCE
The Company has availed working capital loan in foreign currency at a
competitive rate of interest and gained an amount of Rs.42.76 Lakhs
towards exchange fluctuations. This gain is because of appreciation of
rupee against dollar and the foreign currency loans were repaid at the
lower exchange rates.
EXPORTS
On the export front during the year, we have made direct export of
Cotton Yarn / Fabric for a value of Rs. 81.44 Crores as against Rs.
44.26 Crores of the previous year.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko
Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued
support and efforts for promotion of exports to Japan and other
countries.
MODERNISATION
As a part of continuous intensive modernization programme, the company
has invested about Rs.9 Crores by availing term loan under Technology
Upgradation Fund (TUF) scheme for investment in state-of-the-art
textile machinery & equipments like Elite Compact Set, Carding
Machines, Soft package winding machine etc.
During the year 2008-09, an Open-End (OE) Spinning Mill with the
capacity of 1,800 Rotors has been commissioned at Andhrapradesh. During
the year under review, an additional capacity of 4,800 Ring Spindles
has been installed in this Mill to improve the overall efficiency.
PROSPECTS FOR THE CURRENT YEAR
The cotton prices during cotton season 2010-11 are very volatile. The
cotton prices which have gone up too steeply during the peak cotton
season have fallen suddenly during May, 2011. As a result, the Yarn
prices have also been crashed. Due to sluggishness in garment/fabric
market, the demand for yarn has come down unexpectedly. The
GovernmentÃs decision to re-introduce the Quota system for export of
cotton yarn is very unfortunate, which in turn has affected the market
share & profitability of the Indian Spinning Mills due to uncertain
Government Policies.
The increase in wages, fuel prices & interest cost and the increase in
the power cuts in recent period definitely pose a challenge. While the
cost of major inputs increasing steeply, the yarn price has started
declining due to decrease in demand. The cumulative effect of the above
factors would affect the performance of the Company substantially. Your
Directors are therefore unable to predict the profitability of the
Company in the current year. However, the Company is maintaining high
standards of quality yarn, cost effective production and stringent
waste control measures. These measures strengthened the Company to
face the challenges in the current scenario.
WIND MILL
The Division has generated 443 Lakhs Kwh as compared to 460 Lakhs Kwh
of the previous year. The income during the year from the Wind Mill
Division was Rs. 17.69 Crores as against Rs.16.87 Crores of previous
year. During the year, 11 Nos. of Wind Electric Generators for an
aggregate capacity 8.80 MW were purchased during September, 2010. With
this, the capacity of the Wind Mills has increased to 30.70 MW
comprising of 34 Wind Electric Generators.
PERSONNEL
Industrial relations with employees remained cordial during the year.
Human Resources Development activities received considerable focus. The
emphasis was on imparting training and development of the skill-set of
the employees to enable them to face the challenges in the work
environment.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are required
to be set out in the Annexure to the Directorsà Report. However, as per
the provisions of Section 219 (1) (b) (iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
Members of the Company and others entitled thereto. Member who is
interested in obtaining such particulars may write to the Company.
INTERNAL CONTROL SYSTEM
Your Company has adequate internal control procedures commensurate with
the size and nature of its operations. The audit committee constituted
by the Board of Directors is functioning effectively. All significant
audit observations were discussed in the audit committee, which met
four times during the year under review. ERP System developed by Ramco
Systems Ltd., has been installed for online monitoring of all functions
and management information reports are being used to have better
control and to take decisions in time.
DIRECTORS
The following Directors retire by rotation at the ensuing Annual
General Meeting and they are eligible for re-appointment.
1. Shri N.K. Ramasuwami Raja
2. Shri A.V. Dharmakrishnan
3. Dr. K.T. Krishnan
PUBLIC DEPOSITS
The total deposits from the public outstanding with the Company as on
31st March, 2011 were Rs. 494.29 Lakhs including the deposits renewed
in accordance with Section 58A of the Companies Act, 1956. There was no
deposits unclaimed / unpaid as on 31-03-2011.
SHARES
The Company's shares are listed in Madras Stock Exchange Limited and
Bombay Stock Exchange Limited. The Company had paid listing fees to the
Stock Exchanges for the financial year 2011-12.
AUDITORS
M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants and M/s.
Ramakrishna Raja and Co., Chartered Accountants, Auditors of the
Company retire at the end of the 75th Annual General Meeting and are
eligible for re-appointment.
COST AUDITORS
The Government has approved the CompanyÃs proposal to appoint M/s.
Geeyes & Co., Cost Accountants, Chennai for audit of Company's cost
accounts for the year ended 31-03-2011 on a remuneration of Rs.
35,000/- exclusive of out-of-pocket expenses. As per Central
GovernmentÃs direction, cost audit will be done every year.
CONSERVATION OF ENERGY, ETC.
The Company continues to take keen interest in conservation of energy
and the information required under Section 217(1) (e) of the Companies
Act, 1956 read with the relevant Rules, with regard to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
are given in Annexure I to this report.
CORPORATE GOVERNANCE
This Company has complied with the requirements regarding Corporate
Governance as required under Clause 49 of the Listing Agreements with
the Stock Exchanges. A Report on Corporate Governance followed by the
Company together with a Certificate from the Statutory Auditors
confirming compliance is set out in Annexure II to this report.
DIRECTORS' RESPONSIBILITY STATEMENT
The Directors Confirm that -
i) In the preparation of Annual Accounts for the year ended 31st March
2011, the applicable accounting standards had been followed;
ii) The selected accounting policies were applied consistently and
judgments and estimates that are reasonable and prudent were made 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 of the Company for that
period;
iii) Proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act had been taken for safeguarding the assets of the company and for
preventing and detecting fraud and other irregularities;
iv) The annual accounts were prepared on a going concern basis.
Secretarial Compliance Certificate issued by a practicing Company
Secretary u/s. 383(A) of the Companies Act, 1956 is given in Annexure
III to this report.
PLATINUM JUBILEE
The Company has entered into its Platinum Jubilee year. Looking back,
the Directors wish to record the following milestones, crossed by the
Company during its journey of 75 years.
- Rajapalayam Mills Ltd, was established by Shri. P.A.C. Ramasamy
Raja, Founder of the Ramco Group of Companies, in 1936 after his visit
to England to study the industrial development there. A nationalist at
heart, he was keen to provide gainful employment to a large number of
people of his home town.
- The Mill was declared open by Shri. V.V. Giri, Honourable Labour
Minister in the then Madras Presidency. At the inaugural function of
the Mill, Shri. P.A.C. Ramasamy Raja said- "A contended worker will
give to the employer better work and therefore better profits".
The Ramco Group has since been following the above belief of its
Founder and has a very proud record of harmonious industrial relations
for over 75 years. Today, the Ramco Group employs about 6,000 staff and
workers at Rajapalayam.
- In the very first year of production, the Mill has earned profits
and a dividend of 5% was declared. The Mill has the proud record of
unbroken dividend payment during the last 75 years.
- In the year 1982, the Company imported Open End Spinning Machines
for the first time in India, to manufacture 10s yarn to cater to the
needs of the handloom sector.
- In the year 1988, the Company celebrated its Golden Jubilee and the
celebrations were inaugurated by Dr. G.K. Devarajulu, the then Chairman
of Lakshmi Machine Works Ltd. It was presided over by Shri G.
Ramanujam, the then President, INTUC and Shri. P.Chidambaram,
Honourable Union Minster for Home affairs was the Chief Guest of the
Function.
- In 1991, ÃRajapalaiyam Spintextà has been established as 100% Export
Oriented Unit, first of its kind in South India. Subsequently another
Export Oriented Unit "Rajapalaiyam Textiles" has been established
during the year 1996.
- The Ramco Group of Companies have celebrated the Birth Centenary of
its Founder and Visionary Shri. P.A.C. Ramasamy Raja on 24th April,
1994. The celebrations were presided by Shri. R. Venkataraman, Former
President of India.
- In order to improve the Yarn Quality, the Company has invested in
Compact Spinning system from Suessen, Germany for the First time in
India in a big way.
- In 2008, a state-of-the-art Spinning Mill has been commissioned with
advanced compact spinning system by Rieter, Switzerland with fully
automated link coners from Savio, one of the latest technologies
implemented for the First time in India and fully imported back process
machineries to produce Yarn, which is untouched by hands.
- Automatic Savio Open End Spinning Mill has been established in
Andhra Pradesh in the year 2008 with 1,800 Rotors.
- The overall Spinning capacity of the Company is 1,25,792 Spindles and
3,816 Rotors.
- BONUS SHARES
The Mill was started with initial Share Capital of Rs.5.38 Lakhs. Due
to prudent Management, the Mill is continuously earning good profits
and as a result, the Company has issued so far 50 Bonus Shares to the
Shareholders for every share allotted during 1936. With the proposed
Bonus Shares to commemorate the Platinum Jubilee, the total Bonus
Shares would be 100 shares for 1 share initially allotted. This
includes Bonus Shares issued in the ratio of 3:5 during Golden Jubilee
Year and 1:1 issued during Birth Centenary of our Founder.
- The Growth history of Rajapalayam Mills Ltd continued with
diversification into other Non-Textile Industries. It enjoys the unique
distinction of being the Mother Company of Ramco Group, which consists
of the following Companies:
1. M/s. Madras Cements Ltd., started by Founder Shri. P.A.C. Ramasamy
Raja, went into commercial production in the year 1961 with an initial
capacity of 0.66 lakh tones per annum. It has now grown having cement
plants/grinding units in 8 locations in 4 States in India with an
aggregate cement production capacity of 12 Million Tonnes per annum.
M/s. Madras Cements Ltd is the first cement company to get ÃFour Leaves
Awardà from the Centre for Science and Environment for most dust free
and environmental friendly factory.
2. M/s. Ramco Industries Ltd., started by our Chairman Shri. P.R.
Ramasubrahmaneya Rajha, went into commercial production of Fibre Cement
Sheets in the year 1967 with an initial capacity of 0.39 lakh tones per
annum. It has now grown as one of the biggest Fibre Cement Sheet
Production Company in India having 10 Factories all over India and
Srilanka with combined production capacity of 9 lakhs tones per annum.
3. M/s. Ramco Systems Ltd., established in the year 1999, is
developing enterprise application (ERP) and provide solutions to
multiple verticals including banking, insurance, manufacturing, supply
chain, aviation, transportation and logistics, healthcare, governance,
retail and more. Today, Ramco System is a global provider serving over
1,25,000 users with more than 1,500 employees operating out of 15
offices in 9 countries.
4. Other Group Companies in Textile Division are M/s. The Ramaraju
Surgical Cotton Mills Ltd., M/s. Sri Vishnu Shankar Mill Ltd., M/s.
Sandhya Spinning Mill Ltd., M/s.Thanjavur Spinning Mill Ltd., M/s. Sri
Harini Textiles Ltd, and M/s. Rajapalayam Spinners Private Ltd., having
combined spindle capacity of 3.25 Lakhs Spindles.
5. The Ramco Group of Companies have installed Wind Mills with
combined capacity of morethan 250 MW, which demonstrates the GroupÃs
commitment for protecting the environment.
The Combined turnover of Ramco Group is about Rs.4,300 Crores employing
more than 14,000 staff and workers.
This has been possible through the help of
- Central and State Governments, who have always encouraged the
Company's initiatives.
- The Banks and Financial institutions who have sanctioned term loans
and provided working capital assistances during the initial phases of
the Company and consistently thereafter.
- The employees who have exhibited unstinted co-operation and
dedication in discharging their duties.
- The business associates viz., Lakshmi Machine Works, Rieter, Savio,
Ramco Systems, Vestas, Enercon, Suzlon and other vendors and Transport
contractors who have remained loyal with the Company in a spirit of
mutual benefit
- M/s. Mitsubishi Corporation, M/s. Doko Spinning Co. Ltd., M/s.
Unitika Limited, Japan and Corporate Buyers & other Customers who have
supported the products, which has enabled the Company to grow and
create an enterprise for lasting value.
The Directors in this Platinum Jubilee year take the opportunity to
record their appreciation and express their sincere thanks to those
mentioned supra for making the Company for what it is today.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LTD.,
P.R.RAMASUBRAHMANEYA RAJHA,
CHAIRMAN.
RAJAPALAIYAM,
28th May, 2011.
Mar 31, 2010
The Directors have pleasure in presenting their 74th Annual Report and
the Audited Accounts of the Company for the year ended 31st March,
2010.
FINANCIAL RESULTS
The financial results for the year ended 31st March, 2010 after
charging all expenses and contribution to P.A.C.Ramasamy Raja Memorial
Fund of Rs. 30,00,000/- (which is within the limits laid in the
Articles of Association), but before deducting interest and
depreciation have resulted in operating profit of Rs. 74,49,21,965/-.
After deducting Rs. 29,36,58,880/- towards interest cost and providing
Rs.30,33,70,292/- towards Depreciation, the Net Profit for the year is
Rs.14,78,92,793/-. Adding the surplus of Rs. 1,55,95,709/- brought
forward from the previous year, your Directors propose to appropriate
the total sum of Rs. 16,34,88,502/- as detailed below :
Rs. Provision for Taxation - Current Tax - MAT 94,11,993
- Deferred Tax 2,08,00,000
Dividend Rs. 6/-per share 2,10,75,480
(RY. - Rs.5/- per share
Interim Dividend - Rs.3/-
Final Dividend - Rs.2/-)
Tax on Dividend @ 16.60875% 35,00,374
Transfer to General Reserve 1,17,70,000
Balance carried over to Balance Sheet 9,69,30,655
TOTAL 16,34,88,502
DIVIDEND
Your Directors have pleasure in recommending a dividend of Rs. 6/- per
share. The dividend will be tax free income in the hands of
Shareholders as the Company will pay Dividend Distribution Tax under
Income Tax Act, 1961. The total amount of Dividend outgo (including tax
on dividend) would be Rs. 2,45,75,854/-.
TAXATION
An amount of Rs. 94.12 Lakhs towards Current Tax (MAT) and Rs. 208
Lakhs towards Deferred Tax has been provided for the year. The tax paid
under MAT will be available for set off in the year of regular income
tax liability.
TRADE CONDITIONS
A sign of revival of economy has been witnessed from the last quarter
of the financial year under review and the demand for yarn has
increased globally. However the financial results of previous 3
quarters had been affected due to various factors viz., economic
crisis, higher cotton cost, increased power cost due to power cut,
stagnant yarn price etc.,
There was severe power cut in Tamilnadu and Andhra Pradesh, which
affected the utilisation and productivity levels to some extent. Timely
decision taken by your Directors to install Furnace Oil based Gensets
and Windmills in previous years and purchase of power from Third Party
have helped the Company to operate the Mills at optimum utilization
level and also helped the Company to tide over the power crisis.
By implementing various cost reduction measures and production of
flexible count pattern with more value added yarn, your Directors were
able to achieve satisfactory results in the current market scenario.
FINANCE
The Company has availed working capital loan in foreign currency at a
competitive rate of interest and gained an amount of Rs. 152 Lakhs
towards exchange fluctuations, of which an amount of Rs. 102 Lakhs is
notional entry made on 31-03-2010 in accordance with Accounting
Standard-11. This gain is because of appreciation of rupee against
ddllar and the foreign currency loans were repaid at the lower exchange
rates.
As reported in the Directors Report in the previous year, the Company
has approached the Banks for reschedulement of Term loan repayment
installments of principal as per the norms suggested by the Reserve
Bank of India and all the Banks have approved our reschedulement
proposal. However the Company is prompt in making the Interest payment
on due dates.
The increase in interest cost in recent period is a matter of concern,
however with good standing of your company with the lenders, the
company is confident of securing loans at optimum costs.
EXPORTS
On the export front during the year, we have made direct export of
Cotton Yarn for a value of Rs. 44.26 Crores as against Rs. 84.36 Crores
of the previous year.
Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko
Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued
support and efforts for promotion of exports to Japan and other
countries.
MODERNISATION
As a part of continuous intensive modernization programme, the Company
has invested about Rs. 4.36 Crores by availing term loan under
Technology Upgradation Fund (TUF) scheme for investment in
state-of-the-art textile machinery & equipments like Elite Compact Set,
Carding Machines, Soft package winding machine etc.
PROSPECTS FOR 2010-11
The cotton prices continue to prevail at higher levels despite good
yield during last cotton season due to export of cotton in huge
quantities. The Domestic as well the International Yarn markets are
improving after a long spell of sluggishness. The Government of India
has withdrawn Export incentive Schemes viz., Duty Entitlement PassBook
(DEPB) and Duty Draw Back scheme provided to cotton yarn exporters with
effect from April, 2010. The Governments decision to withdraw the
above scheme is very unfortunate and our prices for Yarn would not be
competitive in the Global Market, which in turn will affect the
profitability of the Mills. The Company is maintaining high standards
of quality yarn, cost effective production and stringent waste control
measures. These measures strengthened the Company to face the
challenges in the current scenario. By improving productivity, taking
various measures for production of value added yarns and other cost
reduction measures, your Directors are hopeful of achieving
satisfactory results for the year 2010-11.
WIND MILL
The Wind Mill Division with an installed capacity of 21.90 M.W is
working satisfactorily. There was good wind velocity during the year
compared to previous year, which resulted in higher generation of
power. The Division has generated 460 Lakhs Kwh as compared to 413
Lakhs Kwh of the previous year. The income during the year from the
Wind Mill Division was Rs. 16.87 Crores as against Rs. 15.55 Crores of
previous year.
SHRI RAMCO BIOTECH (RESEARCH & DEVELOPMENT)
The working of the unit after charging all expenses but before
providing interest and depreciation has resulted in operating profit of
Rs. 101 Lakhs. New initiatives have been taken to develop quality
products and various new measures have been taken including setting up
of poly house for hardening the plants near the marketing locations.
With this new initiatives, we hope to improve its contribution to the
Company in the coming years.
PERSONNEL
Industrial relations with employees remained cordial during the year.
Human Resources Development activities received considerable focus. The
emphasis was on imparting training and development of the skill-set of
the employees to enable them to face the challenges in the work
environment.
In terms of the provisions of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975 as
amended, the names and other particulars of the employees are required
to be set out in the Annexure to the Directors Report. However, as per
the provisions of Section 219 (1) (b) (iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
Members of the Company and others entitled thereto. Member who is
interested in obtaining such particulars may write to the Company.
INTERNAL CONTROL SYSTEM
Your Company has adequate internal control procedures commensurate with
the size and nature of its operations. The audit committee constituted
by the Board of Directors is functioning effectively. All significant
audit observations were discussed in the audit committee, which met
four times during the year under review. ERP System developed by Ramco
Systems Ltd. has been installed for online monitoring of all functions
and management information reports are being used to have better
control and to take decisions in time.
DIRECTORS
The following Directors retire by rotation at the ensuing Annual
General Meeting and they are eligible for re-appointment.
1. Shri V.S. Vemban
2. Shri N.R.K. Venkatesh Raja
3. Shri S.S. Ramachandra Raja
PUBLIC DEPOSITS
The total deposits from the public outstanding with the Company as on
31st March, 2010 were Rs.416.39 Lakhs including the deposits renewed in
accordance with Section 5çA of the Companies Act, 1956. There was no
deposits unclaimed / unpaid as on 31-03-2010.
SHARES
The Companys shares are listed in Madras Stock Exchange Limited and
Bombay Stock Exchange Limited. The Company had paid listing fees to the
Stock Exchanges for the financial year 2010-11.
AUDITORS
M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants and M/s.
Ramakrishna Raja And Co., Chartered Accountants, Auditors of the
Company retire at the end of the 74th Annual General Meeting and are
eligible for re-appointment.
COST AUDITORS
The Government has approved the Companys proposal to appoint M/s.
Geeyes & Co., Cost Accountants, Chennai for audit of Companys cost
accounts for the year ended 31-03-2010 on a remuneration of Rs.
30,000/- exclusive of out-of-pocket expenses. As per Central
Governments direction, cost audit will be done every year.
CONSERVATION OF ENERGY, ETC.
The Company continues to take keen interest in conservation of energy
and the information required under Section 217(1) (e) of the Companies
Act, 1956 read with the relevant Rules, with regard to Conservation of
Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
are given in Annexure I to this report.
CORPORATE GOVERNANCE
This Company has complied with the requirements regarding Corporate
Governance as required under Clause 49 of the Listing Agreements with
the Stock Exchanges. A Report on Corporate Governance followed by the
Company together with a Certificate from the Statutory Auditors
confirming compliance is set out in Annexure II to this report.
DIRECTORS RESPONSIBILITY STATEMENT
The Directors confirm that -
i) In the preparation of Annual Accounts for the year ended 31st March
2010, the applicable accounting standards had been followed;
ii) The selected accounting policies were applied consistently and
judgments and estimates that are reasonable and prudent were made 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 of the Company for that
period;
iii) Proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies
Act had been taken for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities;
iv) The Annual Accounts were prepared on a going concern basis.
Secretarial Compliance Certificate issued by a practicing Company
Secretary u/s. 383(A) of the Companies Act, 1956 is given in Annexure
III to this report.
ACKNOWLEDGEMENT
The Directors are grateful to the various Departments and agencies of
the Central and State Governments for their help and co-operation. They
are thankful to the Financial Institutions and Banks for their
continued help, assistance and guidance. The Directors wish to place on
record their appreciation of employees at all levels for their
commitment and their contribution.
On behalf of the Board of Directors,
For RAJAPALAYAM MILLS LTD.,
RAJAPALAIYAM,
P.R.RAMASUBRAHMANEYA RAJHA
28th May, 2010. CHAIRMAN.
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