DIRECTORS' REPORT TO THE MEMBERS OF RCI Industries & Technologies Limited Dear Shareholders, Your Directors are pleased to present their Annual Report on the working of the Company for the period from 1st April, 2014 to 31st March, 2015 with audited statements of accounts :- RESERVES & SURPLUS The Company's Reserve & Surplus in the year 2015 is 332,761,386 as compared to the previous year it was 319,760,469 Performance Review Your company achieved an all time high performance both in turnover and its profits. The Gross revenues touched Rs. 8,425,891,113 and the Profit after taxes recorded was Rs. 21,858,930. Your company coupled high level of modernization with, concentrated efforts of both Management and employees, the whole hearted support of Banks, suppliers and customers to attain these levels of performance. The earnings per equity share (of face value Re. 10) for the year decreased to Rs. 2.01 from Rs.2.22 from the previous year. Dividend With a view to provide a cushion for any financial contingencies in the future and to strengthen the financial position of the Company, your Directors have decided not to recommend any dividend for the period under review Extract of annual return The extract of annual return as on March 31, 2015 in the prescribed Form no. MGT- 9, pursuant to section 92(3) of the Companies Act , 2013 and rule 12(1) of the companies (management and ad ministration ) Rules ,2014 is attached herewith as Annexure - 1 and forms the part of this Meetings of board of directors 27 board meetings held during the year 2014-15. P olicy on director's appointment and policy on remuneration Pursuant to the requirement under Section 134(3)(e) and Section 178(3) of the Companies Act, 2013, the policy on appointment of Board members including criteria for determining qualifications, positive attributes, independence of a Director and the policy on remuneration of Directors, KMP and other employees is attached herewith as Annexure - 2 which forms part of this report Comparison of remuneration of each KMP The difference of remuneration arises due to work experience. Future Prospectus Despite stiff competition from other countries, international buyers show preference to your company's product for its quality and timely delivery and hence your Directors are confident of achieving better working results in the coming years. Directors' Responsibility Statement Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement, the Directors confirm and state that a. That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and no material departures have been made from the same; b. That 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. That they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d. That they had prepared the annual accounts on a going concern basis; e. That 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. That they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Corporate Social Responsibility Although the Corporate Social Responsibility is not applicable to the company but the company has incorporated a wholly owned subsidiary named RCI Skills & Social Development Private Limited on 29.09.2014 an initiative towards CSR. The company RCI Skills & Social Development Private Limited is now in the process of doing CSR activities. Particulars of loans, guarantees or investments Pursuant to the provisions of section 186 of Companies Act, 2013 the particulars of loans, guarantees or investments is mentioned in notes no. 2.11 to the notes to account forming the part of annual report. Declaration by Independent Directors Pursuant to the provisions of section 149 (6) of the Companies Act, 2013 Mr. Raj Singh Jamwal and Mr. Anil Kumar Jain (INDEPENDENT DIRECTORS OF THE COMPANY) has given the declaration as required under said Section. Risk management policy Although the competition is hectic we have an edge over others with our quality and timely execution of orders. The more transit time due to geographical position and adverse movement of foreign exchange rate of the Rupee are major concerns for the growth of the industry. The fluctuation of Rupee against US Dollar, a trend noted during the last quarter of the year may affect the company's profitability in both short and long term. China, Europe, Japan along with the U.S. (the four largest economies in the world) will largely determine the direction of the global economy through the rest of this year and into 2015. The good news is that the advanced economies overall will perform more strongly and contribute more to global growth in 2015. Listing on Stock Exchanges Your Company's shares are listed on the Bombay Stock Exchange, SME Platform. Corporate Governance As required by Clause 52 of the BSE SME Listing Agreement the Corporate Governance Report, Management Discussion and Analysis, and the Auditor's Certificate regarding compliance of conditions of Corporate Governance, form part of this Annual Report Particulars of Employees There is no Employee in respect of whom information required under Companies Act, 2013 is required to be furnished in this report. Conservation of Energy and Technology Absorption Provisions of the Companies Act, 2013 regarding Conservation of Energy and Technology Absorption do not apply to your Company. Foreign Exchange Earnings & Outgo The Details of Foreign Exchange Earnings and Outgo during the financial year is mentioned in Notes No. 2.26 to 2.29 of Notes to accounts forming part of Annual report. Deposits The Company has neither invited nor accepted any sum falling under the purview of the Companies Act, 2013 Buy Back of Securities The Company has not made any offer for buy back of its securities during the year under review. Directors In accordance with the Companies Act, 2013, Mrs. Mamta Gupta retires by rotation and being eligible offers herself for reappointment. Mr. Praveen Aggarwal resigned as an independent director of the company during the year and Mr. Anil Kumar Jain appointed as an independent director in his place. Key Managerial Personnel During the period Mr. Abhishek Kedia has been appointed as CFO of the company. Director's remuneration The Managing Director was paid remuneration of Rs. 12, 00,000 during the year as salary, and perquisites duly approved by shareholders in their meeting and further approved by nomination & remuneration committee of the company and Mrs. Mamta Gupta was not paid any remuneration during the year. It is thereby, affirmed that remuneration is as per remuneration policy of the company. Performance evaluation of the board, its committees and individual directors Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and Individual Directors, including Independent A structured questionnaire has been prepared, covering various aspects of the functioning of the Board and its Committee, such as, adequacy of the constitution and composition of the Board and its Committees, matters addressed in the Board and Committee meetings, processes followed at the meeting, Board^s focus, regulatory compliances and Corporate Governance, etc. Similarly, for evaluation of Individual Director's performance, the questionnaire covers various aspects like his/ her profile, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, etc. Board members had submitted their response on a scale of 5 (excellent) - 1 (poor) for evaluating the entire Board, respective Committees of which they are members and of their peer Board members, including Chairman of the Board. The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed, inter-alia, the performance of non Independent Directors and Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of executive and Non-Executive Directors. The Nomination and Remuneration Committee has also carried out evaluation of every Directors performance The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated. On the basis of performance evaluation done by the Board, it shall be determined whether to extend or continue their term of appointment, whenever the respective term expires. The Directors expressed their satisfaction with the evaluation process. Auditors and their report M/s RPMD & Associates Chartered Accountants, Independent Auditors of the Company was appointed by the shareholders in 23rd AGM on 24.07.2014 to hold the office from the conclusion of 23rd AGM to 28th AGM subject to rectification by shareholders in each AGM held thereafter. Hence the rectification of the appointment of M/s RPMD & Associates is needed to be done by shareholders in this AGM. The Auditors report is enclosed herewith along with all attachments. Secretarial Auditors and their report The board has appointed M/s Kiran And Associates, as a practicing company secretary, to conduct secretarial audit for the financial year 2014-2015 pursuant to section 204 of the Companies Act, 2013. The secretarial audit report submitted by them in the prescribed form MR-3 is attached as Annexure -3 and forms part of this report. There are no qualifications or observations or other remarks of the secretarial auditors in the report issued by them for the financial year 2014-2015. Consolidated financial statements In compliance with the applicable provisions of Companies Act, 2013 including the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2014- 15 which includes the Financial Statement of Subsidiaries and Associates Companies. Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries. The company has not consolidated the financial statement of 2 associates companies (Metalrod Limited and Ace Matrix Solutions Limited) as the AS -21 exempts the consolidation of financial statement of such associates because the investment in shares of associates was acquired as stock in trade and the intention of such investment was to disposed off the same in near future and further Section 129 (3) of the Companies Act, 2013 read with first proviso to Rule 6 of Companies (Accounts) Rules, 2014 which stated that in case of a company covered under sub section (3) of section 129 which is not required to prepare consolidated financial statements under Accounting Standards, it shall be sufficient if the company complies with provision of Consolidated Financial Statements provided in Schedule III of the Act and the company has duly complied with provision of Schedule III of the Act by disclosing the name of associates not consolidated and reason thereof as mentioned above. Further, a separate statement containing the salient features of the financial statements of subsidiaries/Associates of the Company in the prescribed form AOC-1 has been disclosed in the Consolidated Financial Statements. In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the Subsidiary Companies on i ts website. The Company will make available physical copies of these documents upon request by any shareholder of the Company/ subsidiary interested in obtaining the same. These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing AGM. Internal financial control system According to Section 134(5)(e) of the Companies Act, 2013 the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. The Company has a well placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Company's internal financial control system also comprises due compliances with Company^s policies and Standard Operating Procedures (SOPs) and audit and compliance by in-house Internal Audit Division, supplemented by checks by Internal Auditors and various transaction auditors. The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of Internal Audit Division and Internal Auditors to the Audit Committee of the Board. Adequacy of internal financial controls with reference to the financial statements The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Board^s report. To ensure effective Internal Financial Controls the Company has laid down the following measures: >- The Company has a comprehensive risk management framework. >- Rci industries and technologies limited has in place a well-defined Whistle Blower Policy/ Vigil Mechanism. >- Rci industries and technologies limited has a system of Internal Business Reviews. All departmental heads discuss their business issues and future plans in monthly review meetings. They review their achievements in quarterly review meetings. Specialized issues like investments, property, FOREX are discussed in their respective Internal Committee meetings. >- Compliance of secretarial functions is ensured by way of secretarial audit. Composition of Audit Committee, Nomination and Remuneration Committee and Shareholders Grievance Committee & Establishment of Vigil Mechanism/Whistle Blower Policy The details of composition of all the committee and their meeting during the financial year and establishment of Vigil Mechanism are described in the Corporate Governance Report forming part of this Annual Report. Related party transactions All transactions with related parties were in the ordinary course of business and at arm's length and duly approved by Audit Committee of the company. The company has not entered into any transaction of a material nature with any of the related parties which are in conflict with the interest of the company. As required under Companies Act, 2013 the details of related party transactions are disclosed in prescribed form no. AOC - 2 which is attached herewith as Annexure - 4 Subsidiaries/Associates Company During the year RCI SKILLS AND SOCIAL DEVELOPMENT PVT. LTD. has been included as the wholly owned subsidiary of the company. Change in capital structure and listing of shares The company shares are listed on Bombay stock exchange (BSE) and there is no change in the capital structure of the company. Company affairs Kindly refer to Management Discussion & Analysis and Corporate Governance Report which forms part of this report Carry forward to reserve The Balance of Profit & Loss Account has been transferred to reserve. Obligation of company under the Sexual Harassment of women at workplace ( Prevention, Prohibition and Redressal) Act, 2013 In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women Company is in process to adopt a policy for prevention of Sexual Harassment of Women at workplace in the current year and to set up Committee for implementation of said policy. Company has not received any complaint of harassment till date Acknowledgement Your Directors would like to express their sincere appreciation for the assistance and cooperation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers. For and on behalf of the Board of Directors By Order of the Board of Directors For RCI Industries & Technologies Limited Sd/-Mr. Rajeev Gupta Chairman & Managing Director DIN 00503196 Date: 27/08/2015 |