The Directors have pleasure in presenting their 59th Annual Report and the Audited Accounts of the Company for the year ended 31st March 2024.
FINANCIAL RESULTS
| |
|
For the
|
For the
|
| |
|
Year ended
|
Year ended
|
| |
|
31.03.2024
|
31.03.2023
|
| |
|
' in lakhs
|
' in lakhs
|
| |
|
Separate
|
Separate
|
| |
Total Revenue
|
1,33,355
|
1,33,915
|
| |
Operating Profit : Profit before Interest, Depreciation and Tax (PBIDT)
|
13,856
|
15,147
|
| |
Less : Interest
|
2,450
|
1,912
|
| |
Profit before Depreciation and Tax (PBDT)
|
11,406
|
13,235
|
| |
Less : Depreciation
|
3,451
|
3,148
|
| |
Add : Exceptional items
|
-
|
307
|
| |
Net Profit/ Loss before Tax (PBT)
|
7,955
|
10,394
|
| |
Less: Provision for Taxation - Current
|
1,843
|
2,028
|
| |
Deferred
|
152
|
235
|
| |
MAT Credit reversal of earlier years
|
-
|
384
|
| |
Deferred tax adjustment of Earlier year
|
-
|
(1,986)
|
| |
Net Profit / Loss after Tax (PAT)
|
5,960
|
9,733
|
| |
Other Comprehensive Income for the year (Net of Tax)
|
2,010
|
588
|
| |
Total Comprehensive Income for the year (TCI)
|
7,970
|
10,321
|
| |
Movement of Retained earnings
|
|
|
| |
Opening balance of Retained earning
|
56,199
|
44,071
|
| |
Add: Profit for the year
|
5,960
|
9,733
|
| |
Less: Dividend paid during the year
|
(868)
|
(867)
|
| |
Less: Transfer to General Reserve
|
(1,200)
|
(1,500)
|
| |
Add : Transfer from FVTOCI Reserve
|
(3)
|
4,762
|
| |
Add: Obligation of Financial guarantee pursuant to IND AS, reversed
|
40
|
-
|
| |
Closing balance of Retained earnings
|
60,128
|
56,199
|
SHARE CAPITAL
The paid up capital of the of the Company is ' 8,68,09,060 /- consisting of 8,68,09,060 shares of ' 1/- each. There has been no change in the Capital Structure of the Company during the year under review. The Company does not have any scheme for issue of sweat equity to the employees or Directors of the Company.
The details of Employees Stock Option Schemes (ESOS) are provided in this Report.
DIVIDEND
Your Directors have pleasure in recommending a dividend of ' 0.75 per share (PY ' 1 /- per share) on the equity capital of the Company. This would entail an outflow of ' 651.07 lakhs with a payout ratio of Company’s consolidated post tax profit. As per the Dividend Distribution Policy of the Company, the Company should strive to distribute at least 10% of Consolidated Post-Tax Profits as dividend.
The payment of dividend is in accordance with the “Dividend Distribution Policy” of the company. The Policy is available on the website of the Company under the weblink - http://www.ramcoindltd.com/policies.html
The Dividend Distribution Policy forms part of this report.
TRANSFER TO GENERAL RESERVES
After appropriations, a sum of ' 601.28 crores has been kept as retained earnings of the company and a sum of ' 12 crores has been transferred to General Reserve. As on 31.03.2024, the General reserve stands at ' 601.28 Crores.
TAXATION
An amount of ' 18.43 crores (P.Y ' 20.28 crores) towards Current Tax, ' 1.52 crores (P.Y ' 2.35 crores) towards Deferred tax has been provided for the year under review.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Macro-Economic Review Global Economy
In 2023, the global economy exhibited strong resilience amidst an uncertain environment with geopolitical tensions and global energy crisis with multiple sanctions. The global economy expanded steadily driven by positive supply trends despite central banks raising interest rates to stabilise prices. The global economy grew by 3.2% in 2023, with a similar pace expected in 2024 and 2025.
Advanced Economy
Steady employment growth and a pick-up in consumer confidence despite continued monetary tightening by major central banks aided the growth of advanced economies. Growth in advanced economies is expected to improve slightly from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025.
Emerging Markets and Developing Economies
The emerging markets and developing economies (EMDE) grew by 4.3% in 2023 and is expected to maintain a steady growth of 4.2% in both 2024 and 2025. EMDEs continue to face pressure from high public debt and unstable inflation rates. Global growth though resilient faces the risk from rising interest rates and new price spikes due to geopolitical conflicts like the Russia-Ukraine war, the Red Sea crisis and the Israel-Palestine conflict. Multilateral cooperation will help limit the costs and risks of geoeconomic fragmentation and climate change, speed the transition to green energy, and facilitate debt restructuring.
(Source: World Economic Outlook-IMF, April 2024)
Indian Economy
Amidst challenging global economic scenario, India continued to be the fastest growing major economy. India exhibited strong resilience in 2023-24, primarily driven by government push for infrastructure, digitalisation, ease of doing business, inclusive growth and improved quality of fiscal spending. India rose to fifth place in the global investment destination ranking in 2024 as compared to ninth position it held in 2023, according to PwC CEO’s survey. Domestic credit issuance to the commercial sector has also shown substantial growth.
According to Second Advanced estimates by National Statistics Organisation (NSO), the growth of the economy is estimated at 7.6% in 2023-24, higher than the 7% growth seen in 2022-23. This acceleration in growth is aided by increased investment, consumption growth, improved business sentiments and the financial positions of banks and corporations. Inflation is expected to be controlled and remain within RBI’s target as food prices normalize and government measures like banning exports, increase the supply of key commodities.
According to World Bank estimates, the Indian economy will grow at 7.5% in FY25 mainly led by activity in services and industry, rapid increase in investment and government consumption. Financial conditions in India have remained accommodative amidst global challenges.
(Source: NSO, World bank)
Review of Operations and Current Trends
A. BUILDING PRODUCTS DIVISION :
| |
PRODUCTION
|
SALES
|
TURNOVER
|
|
PRODUCT
|
Qty. in M.T.
|
Qty. in M.T.
|
'in Lakhs
|
| |
31.03.24
|
31.03.23
|
31.03.24
|
31.03.23
|
31.03.24
|
31.03.23
|
|
Fibre Cement Sheets / Boards
|
8,17,449
|
8,22,593
|
8,09,428
|
8,05,339
|
1,11,407
|
1,08,449
|
Fibre Cement (FC) Sheets:
During the year under review, the Sales quantity of FC Sheets grew by around 2% compared to previous year and the Industry reportedly had a static growth for the year. Specific Markets in East, West & South registered a strong growth. New geographical markets for sales are being explored amid stiff competition. Competition is seen emerging from “Single plant Regional Operators”. Projects in West helped grow business with a higher double digit growth.
Distribution width and depth was the growth engine last year and will continue to remain for the year as well. Taluk level dealer appointment has augmented our distribution. Sales Realisation was up by 3%, where we constantly adjusted the market selling price basis demand.
There was demand noticed in specific segments of industries viz. Tiles, Ceramics & Poultry for roofing requirements. Depreciation of Rupee also affected the raw material’s cost.
Consistent and Judicious usage of raw materials and supplier negotiations helped to partially mitigate the impact. Strong correlation in sales was noticed when the prices of substitutes went up. Seeding of Colour Sheets in existing distribution network is expected to help build new segment. Newer taluk market penetration contributed higher double digit salience.
Promotional efforts are v'gorously taken to explore new potential areas with more customized products. Greencor, Non-Asbestos roofing sheets have been well accepted in the market and sales has been in encouraging state.
Fibre Cement Boards :
Non Asbestos Category volumes declined by 8%. However due to better contribution from value added products, the value growth was at par to 2022-23.
HICEM witnessed a decline of 16% & HILUX registered a growth of 2% in volumes over 2022-23. HICEM decline was mainly due to the focus on selling in profitable markets & there is a price pressure due to capacity addition by other players. Efforts are taken for increasing the traded products like GI Channel & Frames in the brand of HILUX - PREMIUM to address the customer’s key requirement of a bundled solution from Ramco resulted positively. With this positive response, it is planned to scale up the volumes further and strengthen the range by adding few more accessories during 2024-25.
Efforts on increasing the sales through converting alternative board products like Plywood, MDF and WPC by creating Niche Marketing vertical is yielding results and the contribution from this channel is 12% of our overall volumes during 2023-24. HIDEN (High Density Fibre Cement Board) is launched during 2023-24 and the product has been received well. Retail seeding activities and specifications in Projects are expected to generate incremental volumes by upselling this new product in Fibre Cement Board category.
In line with the Balanced Score Card objectives, the key focus areas for 2024-25 would be to build up Influencer/Specifier Database, increase the intensity of connecting with them and participation in Seminars, Expos & Sponsoring special events on Fire Safety, Acoustic applications etc., to scale up our volumes.
Exports:
9 new channel partners have been appointed during 2023-24 mainly in Israel, UK, Maldives, South Africa and Barbados (North America) as part of our distribution expansion in international markets.
3 new export markets (Egypt, Poland and Antigua) have been added. BBA and KIWA certifications have helped us to register more than 40% growth in UK markets and will see a significant jump in 2024-25 as well. Work in Progress for getting our products certified for the US and Canada Markets.
Sales volume in Fibre Cement Board at GCC and Nepal are in restriction, due to very low market operating prices by local players and competition.
Red sea issues in the 2nd half of 2023-24 impacted the volumes due to increased lead time, Port congestion and Container availability. However, the situation started improving now.
Ramco SmartBuild tech services offering technical support to all marketing channels of the Company and create awareness on green dry construction.
Ramco SmartBuild tech services delivers design and technical support towards various projects to enhance sale of products like Hilux, Hicem, Hiden, Hilux Lite and other allied products of the Company.
Ramco SmartBuild focusses on revenue generation through projects, technology selling, design consulting, and training. Company is training the applicators, students and technical professionals to promote the organization’s vision on Green Dry Construction.
The Company provides technical consultancy for design, structure, finishes and board related applications for the best outcome of any dry construction project.
Ramco SmartBuild team supports export management in terms of design and consulting to offer best solutions for various applications in the foreign soil.
Ramco SmartBuild has continuously been working on exploration of various technologies to deliver optimized solutions on fast as well as superior construction methodology.
B. WIND MILLS:
During the Financial Year 2023-24, the Wind energy was good with increase of 4% compared to last year, from the existing 15 Wind Mills.
Position regarding Wind Mills was as follows : -Total Capacity Installed : 16.73 MW
Total Units generated : ' 278.22 Lakh Units (P.Y: 268 Lakh Units)
Income earned : ' 1,817 Lakhs (P.Y: ' 1,645 Lakhs)
(by generation/sale of power)
C. COTTON YARN DIVISION - SRI RAMCO SPINNERS :
Production and Sales :
During the year 2023-24, the Unit had produced 26.65 Lakh Kgs. of Cotton Yarn as compared to 33.19 Lakh Kgs. produced during the previous year.
The Unit had sold Yarn at 28.08 Lakh Kgs. (including traded yarn) during the year under rev'ew as against 34.94 Lakh Kgs. during the year 2022-23.
The cotton production in India for the cotton season 2022-23 (October to September) was 319 Lakh bales (170 Kgs), compared to 307 Lakh bales produced in the prev'ous cotton season, representing a 4% increase. However, due to sluggish market demand for cotton yarn, the cotton price remained range-bound between ' 57,000 to ' 62,000 per candy.
At the beginning of the cotton season 2023-24, the CAI estimated the cotton crop for the new season to be 294 Lakh bales (compared to the prev'ous year’s 319 Lakh bales). However, the actual cotton arrivals in the market reached 310 Lakh bales. The Cotton Corporation of India (CCI) covered 33 Lakh bales during 2023-24 and further increased the MSP price per quintal of medium staple cotton and long staple cotton by 9% and 10% respectively. Despite some price correction in cotton, the fall in yarn prices was much sharper, leading to a wider disparity that affected the margins of yarn spinners across India.
The company strategically shifted its focus to more value-added counts, and imported more high-quality cotton when prices were at reasonable levels. This strategy helped the company procure diversified varieties of cotton from across the globe and offer competitive prices for its yarn. In February 2024, the Government of India exempted Customs duty on the import of Extra Long Staple Cotton exceeding 32 mm, enhancing the competitiveness of Indian exporters for premium products.
Expecting the Cotton Prices will come down and increase in yarn prices, your Directors are hopeful in achiev'ng good results during the year 2024-25.
The Company is taking various steps to expand its market presence both in domestic and international markets and hope to achieve higher volume of sales in value added yarns in the forthcoming years and hope to achieve better performance during the year 2024-25.
D. OVERSEAS OPERATIONS OF SUBSIDIARIES - SRI RAMCO LANKA (PRIVATE) LIMITED AND SRI RAMCO ROOFINGS LANKA (PRIVATE) LIMITED, SRI LANKA:
At a Consolidated level of both the Companies, the Net Sales were SLR 87,106 lakhs (INR 22,752 lakhs) as against SLR 71,955 lakhs (INR 16,384 lakhs) during the corresponding prev'ous year.
In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the Financial Statements of the subsidiaries is attached in Form AOC-1 as Annexure -1 to the Board’s Report.
There is no proposal to transfer any amount to the General Reserves and any amount to be retained in the statement of Profit and Loss.
The Company has no material subsidiaries.
Divestment of holdings held in Lynks Logistics Limited
During the year under rev'ew, the Company had sold its entire shareholding of 45,56,35,662 equity shares held in Lynks Logistics Limited (Lynks) to Bundl Technologies Private Limited (“Bundl” operationg under the brand name “Swiggy”) and simultaneously acquired 21,95,777 Compulsory Convertible Preference Shares (CCPS) of Bundl, in consideration of the sale of shares. Accordingly, Lynks ceased to be an Associate Company with effect from 29th August, 2023.
CONSOLIDATED FINANCIAL STATEMENTS :
The Company has 5 Associate Companies viz. The Ramco Cements Limited, Rajapalayam Mills Limited, Ramco Systems Limited, Ramco Industrial and Technology Services Limited, Madurai Trans Carrier Limited.
As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR)], 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 Subsidiary Companies and Associate Companies along with 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.ramcoindltd.com/financial-performance.html
Separate audited accounts in respect of the subsidiary companies are also made available at the Company’s website. The Company shall provide a copy of separate audited financial statements in respect of its subsidiary companies to any shareholder of the Company who asks for it.
The consolidated net profit after tax of the Company amounted to ' 72.97 crores for the year ended 31st March, 2024 as compared to ' 107.62 crores of the previous year.
The Consolidated Total Comprehensive Income for the year under review is ' 177.48 crores as against ' 131.18 crores of the previous year. Key Financial Ratios
Pursuant to Schedule V (B) of SEBI (LODR), the Key Financial Ratios for the year 2023-24 are given below:
| |
|
| |
SI.
No.
|
Particulars
|
2023-24
|
2022-23
|
Formula adopted
|
Variation
|
Reasons where the variance is over 25%
|
|
1
|
Debtors Turnover Ratio (days)
|
19
|
24
|
365 days/(Revenue from sale of Products / Average Trade Receivables)
|
-21%
|
|
|
2
|
Inventory Turnover Ratio (days)
|
158
|
131
|
365 days/(Revenue from sale of Products / Average Inventories)
|
21%
|
|
|
3
|
Interest Coverage Ratio
|
5.64
|
8.08
|
EBITDA/(Interest Interest Capitalised)
|
-30%
|
Due to Less Operating Cash Profit and increase in Finance Cost
|
|
4
|
Debt Service Coverage Ratio
|
2.24
|
4.29
|
(EBITDA-Current Tax)/(Principal repayment Total Interest)
|
-48%
|
Due to Less Operating Cash Profit and increase in Finance Cost
|
|
5
|
Current Ratio
|
1.6
|
1.48
|
Total Current Assets/Total Current Liabilities
|
8%
|
|
|
6
|
Debt-Equity Ratio
|
0.02
|
0.04
|
Long Term Debt / Total Equity
|
-50%
|
Decrease in Long Term Borrowings
|
|
7
|
Operating Profit Margin
|
6%
|
8%
|
Operating Profit Before Tax / Net Income from Operation
|
-25%
|
Decrease in Operational margin
|
|
8
|
Net Profit Margin
|
4%
|
7%
|
Net Profit after Tax / Total Income
|
-43%
|
Decrease in Operational margin
|
|
9
|
Return on Networth
|
9%
|
12%
|
(Total Comprehensive Income Interest) / Average Net worth
|
-25%
|
Decrease in Operational margin
|
|
10
|
Total Debt / EBITDA
|
1.74%
|
2.03
|
Total Debt / EBITDA
|
-14%
|
|
|
11
|
Return on Capital Employed
|
7%
|
9%
|
Total Comprehensive Income Interest / (Average of Equity plus Total Debt)
|
-22%
|
|
|
12
|
Price Earnings Ratio
|
29.27
|
11.06
|
Market price per share as at 31st March / Earning per share
|
165%
|
Increase in Market Price and Decrease in Earnings
|
| |
eBITDA denotes Operating Profit Before Tax Interest Depreciation & Amortisation
|
Directors and Key Managerial Personnel:
Pursuant to rule 8(5) (iii) of the Companies ( Accounts ) rules, 2014, it is reported that Shri Hariharan Thiagarajan (DIN 00174846) has been appointed as an Independent Director with effect from 1.02.2024 for a period of five years by members, through Postal ballot. Further Shri R.S Agarwal (DIN 00012594) Independent Director had retired on 31.03.2024 due to completion of two consecutive five years each in office. The Board has recorded its appreciation for the contributions made by him to the Company during his tenure.
In accordance with the Section 159 and other applicable statutory prov'sions of the Companies Act, 2013, Regulation 17(1 A) of SEBI (LODR) and the Company’s Articles of Association, Shri S.S. Ramachandra Raja (DIN 00331491), aged 88 years, retires at the ensuing Annual General Meeting and being eligible, has offered himself and seeks for his re-appointment, which was recommended by Nomination and Remuneration Committee and Special resolution has also been included as he attained the age of 75 years as per Regulation 17(1A) of SEBI (LODR), in the Notice convening the 59th Annual General Meeting scheduled to be held on 16.08.2024, for the approval of members.
Also, Justice Shri P P S Janarthana Raja (Retd.)(DIN 06702871), aged 73 years, is proposed to be appointed as an Independent Director for a period of 5 years from 1.10.2024, as recommended by Nomination and Remuneration Committee and recommended by Board of Directors and a Special resolution has also been included as he will be attaining the age of 75 years during his term, as per Regulation 17(1A) of SEBI (LODR), in the Notice convening the 59th Annual General Meeting scheduled to be held on 16.08.2024, for the approval of members.
The disclosures for appointment/ re-appointment of Directors as required under Secretarial Standards - 2 are available in the Notice convening the AGM.
The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation.
The Company has received necessary declarations from all the Independent Directors of the Company under Section 149(7) of the Companies Act, 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013. Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.
Pursuant to rule 8(5) (iii) of the Companies (Accounts) Rules, 2014, it is reported that there have been no changes in the Directors and Key Managerial Personnel other than above, during the year under rev'ew and after the end of the year and upto the date of the report.
The Company had formulated a code of conduct for the Directors and Senior Management Personnel and the same has been complied with.
The Audit Committee has four members after retirement of Shri R.S. Agarwal, Independent Director on 31.03.2024, 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.
The Company has a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Other Employees duly approved by the Board of Directors, based upon the recommendation of the Nomination and Remuneration Committee, in accordance with Section 178(3) of the Companies Act, 2013.
As per Prov'sion to Section 178(4) of the Companies Act, 2013, 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 involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
The Nomination and Remuneration Committee and this Policy are in compliance with the Companies Act, 2013 and SEBI (LODR).
The web address of the Policy is - https://www.ramcoindltd.com/file/Investors/Policies/Nomination_and_Remuneration_Policy.pdf
As required under Regulation 25(7) of SEBI (LODR) Regulations, the Company has programmes for Familiarisation 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)(i) of SEBI (LODR) Regulations, the details of the Familiarisation Programme for Independent Directors are available at the Company’s website, at the following link at http://www.ramcoindltd.com/files/ DIRECTORS_FAMILIARISATION_PROGRAMME.pdf
The details of the familiarization programme are explained in the Corporate Governance Report also.
The details of remuneration received by the Managing Director, during the year under review are available in the Corporate Governance report.
BOARD EVALUATION
Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 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, the Nomination and Remuneration Committee has laid down evaluation criteria for performance evaluation of Independent Directors, which is based on attendance, expertise and contribution brought in by the Independent Director at the Board and Committee Meetings, which shall be taken into account at the time of reappointment of Independent Director.
Pursuant to Regulation 17(10) of SEBI (LODR), 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(2)(f)(ii)(9) of SEBI (LODR), the Board of Directors have reviewed and observed that the evaluation framework of the Board of Directors was adequate and effective.
The Board’s observations on the evaluations for the year under review were similar to their observations for the previous year. 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.
MEETINGS
During the year, seven Board meetings were held. The details of number and dates of Meetings of the Board and Committees held during the financial year including the number of meetings attended by each Director are given in the Corporate Governance Report. The details of the Committees constituted by the Board are available in the Corporate Governance Report. There are no changes in the composition of the committees during the year under review.
RECOMMENDATION OF AUDIT COMMITTEE
There has not been an occasion, where the Board had not accepted any recommendation of any Committee of the Board. SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial standards and that such systems are adequate and operating effectively. The Company is in compliance with all the applicable Secretarial Standards.
PUBLIC DEPOSITS
The Company had no fixed deposits. The Company has decided not to accept fresh deposits from 01.04.2014 and to avail the option provided under Section 74 of the Companies Act, 2013 and repaid all the existing deposits together with the accrued interest thereon by complying with the formalities required in this regard.
ORDERS PASSED BY THE 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.
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 and 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.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to Section 186(4) of the Companies Act, 2013 the details of Loans, Guarantees and Investments along with the purposes are provided under Notes No.9,10,40,41 of Notes to the separate Financial Statements.
AUDITS
STATUTORY AUDIT
As per the provisions of Section 139 of the Companies Act,2013 M/s.Ramakrishna Raja and Co., Chartered Accountants, (FRN:005333S) and M/s.SRSV & Associates, Chartered Accountants, (FRN:015041S), who have been appointed as the Statutory Auditors of the company at the 52nd Annual General Meeting, were re-appointed at the 57th Annual General Meeting of the Company for another and second term of 5 years. No change is proposed in the Auditors for the Company.
In accordance with Regulation 33(1)(d) of SEBI (LODR) Regulations 2015, the auditors have submitted the necessary certificates issued by peer review board of the Institute of Chartered Accountants of India.
The report of the Statutory Auditors for the year ended 31st March, 2024 does not contain any qualification, reservation or adverse remark. No fraud has been reported by the Company’s Auditors.
COST AUDIT
As per Rule 3 of Companies (Cost Records and Audit) Rules, 2014 the company is required to maintain cost records and accordingly such records and accounts are made and maintained.
The Board of Directors at their meeting held on 28.05.2024, as recommended by Audit Committee, had approved the appointment of M/s N.Sivashankaran & Co, Cost Accountants as the Cost Auditors of the Company to audit the Company’s Cost Records relating to manufacture of Fibre Cement Products (FCP & CSB) and Cotton Yarn for the year 2024-25 at a remuneration of ' 3,00,000/- (Rupees Three lakhs only) exclusive of GST and out of pocket expenses.
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 relating to their remuneration had been included in the Notice convening the 59th Annual General Meeting scheduled to be held on 16th August, 2024, for ratification by the Members.
The Cost Audit Report for the financial year 2022-23 due to be filed with Ministry of Corporate Affairs by 10.09.2023 had been filed on 02.09.2023. The Cost Audit Report for the financial year 2023-24 due to be submitted by the Cost Auditor within 180 days from the closure of the financial year will be filed with Ministry of Corporate Affairs, within 30 days of such submission.
SECRETARIAL AUDIT
M/s S. Krishnamurthy & Co., Company Secretaries, has been appointed to conduct the Secretarial Audit of the Company. Pursuant to the provisions of Section 204 (1) of the Companies Act, 2013 the Secretarial Audit Report submitted by the Secretarial Auditors for the year ended 31st March, 2024 is attached as Annexure - 2. The report does not contain any qualification, reservation or adverse remark.
There are no changes in the Statutory, Cost and Secretarial Auditors of the Company during the year under review and upto the date of this report.
EXTRACT OF ANNUAL RETURN
In accordance with Clause 22 of Secretarial Standard on Report of the Board of Directors (SS 4), a copy of the Annual Return in Form MGT -7 for the year ended 31st March 2023 has been placed on the website of the Company and the web link of such Annual Return is https://www.ramcoindltd.com/annual_returns.html
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), a report on Corporate Governance being followed by the Company is attached as Annexure - 3.
No complaints had been received pertaining to sexual harassment, during the year under review. The relevant statutory disclosure pertaining to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, are available at Point No: 10(l) of Corporate Governance Report.
As required under Schedule V (E) of SEBI (LODR), a Certificate from the Statutory Auditors of the Company confirming the compliance of conditions of Corporate Governance is attached as Annexure - 4.
As required under Regulation 34(3) read with Schedule V Para C (10)(i) of SEBI (LODR), Certificate from the Secretarial Auditor that none of the Company’s Directors have been debarred or disqualified from being appointed or continuing as directors of Companies, is enclosed as Annexure - 5.
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 Organisation 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, protection of national heritage, livelihood enhancement projects etc., largely in accordance with Schedule VII of the Companies Act, 2013.
The CSR obligation pursuant to Section 135(5) of the Companies Act, 2013, for the year 2023-24 is ' 214.58 lakhs (after adjusting previous year 2022-23 excess of ' 46.89 lakhs from ' 261.47 lacs which is 2% of average net profit of past 3 years for the year 2023-24). As against this, the Company has spent ' 218.92 lakhs on CSR. CSR Committee recommended to carry forward and set off the excess amount spent to the tune of ' 4.34 lakhs to the financial year 2024-25. Also the Company had spent a sum of ' 26.83 lakhs on other social causes which do not qualify under the classifications listed out in Schedule VII of the Companies Act, 2013.The Annual Report on CSR activties as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - 6.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR), the Company has established a Vigil mechanism and has a Whistle Blower Policy. The Policy prov'des the mechanism for the receipt, retention and treatment of complaints and to protect the confidentiality and anonymity of the stakeholders. The complaints can be made in writing to be dropped into the Whistle Blower Drop Boxes or through E-Mail to dedicated mail IDs. The Corporate Ombudsman shall have the sole access to these. The Policy prov'des to the complainant access to the Chairman of the Audit Committee. The web link for the Vigil Mechanism is disclosed in the Corporate Governance Report.
RISK MANAGEMENT POLICY
Pursuant to Section 134 (3) (n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR), the Company has developed and implemented the Risk Management Policy. The policy env'sages identification of risk and procedures for assessment and strategies to mitigate/minimisation of risk thereof. The Risk Management Policy of the Company is available at the Company’s website, at the following weblink:http://www.ramcoindltd.com/files/RISK_MANAGEMENT_ POLICY_RIL.pdf.
RISK MANAGEMENT
The Company’s risk management system is designed to identify the potential risks that can impact the business and dev'ce a framework for its mitigation along with periodical reviews to reflect changes in market conditions and the company’s activties. The Company’s Board of Directors has the overall responsibility of the establishment and oversight of risk management framework. The Audit Committee and Risk management committee periodically review the execution of risk management plan and advice the management wherever necessary.
| |
Key Risks
|
Mitigation measures
|
| |
Currency Fluctuation Risks
|
| |
The Company has exposure to USD and other foreign currency denominated transactions for import of Raw material, Stores & Spares and Capital goods, besides exports of finished goods and borrowings in foreign currency. Any unfavourable movement in currency prices can impact profitability.
|
The Company has Forex hedging policies to hedge Foreign currency loans, import transactions by booking forward contracts based on the prevailing foreign exchange market conditions, after taking into consideration the anticipated foreign exchange inflows/outflows, timing of cash flows, tenure of the forward contract. The company, in its textile Division, avails Packing credit in foreign Currency on receipt of export orders and hence the incidence of currency fluctuations are minimised.
|
| |
|
| |
Information Technology Risk
|
| |
The Company’s operations are completely dependent on IT systems, which requires careful management of the information that is in our possession to ensure data privacy. The cyberattack threat of unauthorised access and misuse of sensitive information or disruption to operations continue to increase across the world. Such an attack would affect the business operations in a number of ways, including disruption to sales, production and cash flows, ultimately impacting our results.
|
Organization’s Critical Data is stored in an Information Rights Management System. Data is encrypted as per policy, to protect security and privacy. Endpoint device security is enabled in the entire organization to block all unauthorized data transfers. Strong virus, malware, grey-ware, spyware, Trojans, spam, ransomware protection systems with Botnet Protection, Application Control and Web Application Firewall have been deployed. Hardware like, routers, firewalls, servers, secure remote access, endpoints are kept OEM up-to-date. All obsolete hardware, software, protocols and operating system are not in use. Strong IT policies are in place to protect business data and data privacy. All external communication media have ACL (Access Control List). Integrated Data Protection Manager deployed for backup purpose. Mission critical applications and data are replicated from the data centre to Disaster Recovery Site for business continuity.
|
| |
|
| |
|
|
| |
Interest rate Risk
|
|
|
Interest rate risk arises from long-term borrowings with variable rates, which exposed the company to cash flow interest rate risk. The Company’s fixed rate borrowing are carried at amortized cost and therefore are not subject to interest rate risk as defined in Ind AS 107 since neither the carrying amount nor the future cash flows will fluctuate because of the change in market interest rates. The Company is exposed to the evolution of interest rates and credit markets for its future refinancing, which may result in a lower or higher cost of financing, which is mainly addressed through the management of the fixed/ floating ratio of financial liabilities.
|
The Company constantly monitors credit markets to strategize a well-balanced maturity profile in order to reduce both the risk of refinancing and large fluctuations of its financing cost. The Company believes that it can source funds for both short term and long term at a competitive rate considering its strong fundamentals on its financial position.
|
| |
|
|
| |
Liquidity Risk
|
|
|
Liquidity Risks are those risk that the Company will not be able to settle or meet its obligations on time or at reasonable price
|
Monitoring and optimizing working capital is achieved through tightened control measures in collection of receivables, negotiation of credit periods with suppliers, maintain adequate inventory based on business requirements and thereby maintaining a level of cash and cash equivalents deemed adequate to finance the company’s operations. The Company maintains flexibility in funding by keeping both committed and uncommitted credit lines available with bankers. The Company has laid well defined policies and procedures facilitated by robust information system for timely and qualitative decision making by the management including its day-to-day operations
|
|
Geo-Political Risk - (Russia -Ukrain war risk)
|
|
The company’s geo-political risk arises from its sourcing the raw material from Russia on whom US, UK, EU and other countries have imposed partial sanctions.
|
The company is able to import of raw material from Russia and the company’s banks are making payments to Russian origin goods on submission of declaration and after making necessary checks with respect to restrictions on sanctions. However, to mitigate the risk, the company reviewing constantly its share of its purchases from nonRussian countries and also considers making payment to non-Russian countries and in currencies other than USD.
To mitigate the risk, the company maintains adequate stock levels so that there is no disruption in production.
|
|
Credit Risk
|
|
Credit Risk is the risk of financial loss to the Company if the customer or counterparty to the financial instruments fails to meet its contractual obligations and arises principally from the Company’s receivables. Treasury Operations and other operations that are in the nature of lease. The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer. The Company extends credit to its customers in the normal course of business by considering the factors such as financial reliability of customers. The Company evaluates the concentration of the risk with respect to trade receivables as low, as it customers are located in several jurisdictions and operate in largely independent markets.
|
The Company maintains adequate security deposits / Bank Guarantees from many of its customers based on market condition. Advance payments are obtained for the value of the material from the Project / one time / new entrants. The exposures with the Government are generally unsecured by they are considered as good. However, unsecured credits are extended based on the creditworthiness of the customers on case to case basis. Trade receivables are written off when there is no reasonable expectation of recovery, such as a debtor declaring bankruptcy or failing to engage in a repayment plan with the Company and where there is probability of default, the Company creates provision based on Expected Credit Loss for trade receivables under simplified approach.
|
| |
|
|
|
Marketing Risk
|
|
Fibre Cement Industry is a highly competitive industry, largely due to dependants in fibre imports. More manufacturing capacity have sprung up.
|
Quality Product with pricing, Benchmarking, Substitutes and In-House Branding will help get an edge over competition.
|
|
Fibre Cement Industries is seasonal in nature and logistic sensitive.
|
|
|
Human Resource Risk
|
|
Loss of key employees due to resignation or retirement, overstaffing / understaffing, higher attrition rate, inadequate training for employees, employee wellness, and disturbances in industrial relations are identified as the key risk factors in human resource
|
Human Resource risk is mitigated by forecasting annual manpower to hire right people at right time. Various retention methodologies are followed like employee friendly benefits like extending loan schemes, transfer option to preferred location in genuine cases, Group Medical Insurance and Group Personal Accident Insurance Scheme and buffer scheme. Training programmes are conducted to employees based on functional roles. Periodic Wellness sessions on health related topics are being conducted with expert doctors from reputed hospitals. Maintaining cordial relationship with Unions, local leaders and carrying out CSR projects relevant to the local needs have ensured that there were no loss of man-days due to such disturbances.
|
RELATED PARTY TRANSACTIONS
Prior approval / omnibus approval is obtained from the Audit Committee for all Related Party transactions and the transactions are also periodically placed before the Audit Committee for its approval. The details of contracts entered into by the Company during the year as per Form AOC 2 is enclosed as Annexure - 7.
No transaction with the related party is material in nature except transaction with Raja Charity Trust which was approved by Shareholders at 56th Annual General Meeting held on 19.08.2021, in accordance with Company’s “Related Party Transaction Policy” and Regulation 23 of SEBI (LODR).
In accordance with Ind AS-24, the details of transactions with the related parties are set out in the Disclosures forming part of Financial Statements.
As required under Regulation 46 (2) (g) of SEBI (LODR), the Related Party Transaction Policy is disclosed in the Company’s Website and its weblink is - https://www.ramcoindltd.com/file/Investors/Policies/RELATED_PARTY_TRANSACTION_POLICY_RIL_29012020.pdf
As required under Regulation 46(2)(h) of SEBI (LODR), the Company’s Material Subsidiary Policy is disclosed in the Company’s website and its weblink is - https://www.ramcoindltd.com/file/MATERIAL_SUBSIDIARY_POLICY_2015.pdf
MATERIAL CHANGES SINCE 1st APRIL 2024
There have been no other material changes affecting the financial position of the company between the end of the financial year and till the date of this report.
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 - 8.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The disclosures with respect to remuneration as required under Section 197 of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure - 9.
The statement containing names of the top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 (2) & (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this report.
However, the annual report is being sent to the Members, excluding the aforesaid Annexure. In terms of Section 136 of the Companies Act, 2013 the said Annexure is open for inspection. Any member interested in obtaining a copy of the same may write to the Company Secretary.
| |
EMPLOYEE STOCK OPTION SCHEME (ESOS)
At the Annual General Meeting held on 19.08.2021 the Members had approved the following Employee Stock Option Schemes :
|
| |
Name of the Scheme
|
Total No of Options
|
Exercise Price
|
Vesting
Period
|
Maximum Term
|
Source
|
Variation in terms
|
| |
ESOS 2021- Plan A
|
5,00,000
|
' 1/- per share
|
One year from the date of grant
|
On or before 31st December of the Immediately succeeding financial year in which the vesting was done
|
Primary
|
Nil
|
| |
ESOS 2021- Plan B
|
5,00,000
|
' 30/- per share
|
One year from the date of grant
|
On or before 31st December of the Immediately succeeding financial year in which the vesting was done
|
Primary
|
Nil
|
The relevant disclosure in terms of Rule 12 of Companies (Share capital and Debentures) Rules, 2014 and Secretarial Standard on Report of the Board of Directors are given below :
Details of Movement of Employee Stock Options during the year:
| |
Sl.No
|
Particulars
|
ESOS 2021 PLAN A
|
ESOS 2021 PLAN B
|
| |
(a)
|
Number of options granted during the year
|
Nil
|
Nil
|
| |
(b)
|
Number of options vested during the year
|
Nil
|
Nil
|
| |
(c)
|
Number of options exercised during the year
|
Nil
|
Nil
|
| |
(d)
|
Number of shares arising as a result of exercise of options
|
Nil
|
Nil
|
| |
(e)
|
Number of options lapsed during the year
|
Nil
|
Nil
|
| |
(f)
|
Exercise Price
|
' 1/-
|
' 30/-
|
| |
(g)
|
Variation of terms of options
|
Nil
|
Nil
|
| |
(h)
|
Money realized by exercise of options (INR), if scheme is implemented directly by the Company
|
Nil
|
Nil
|
| |
(i)
|
Total Number of options in force (available for grant, but not yet granted)
|
3,66,500
|
4,87,500
|
| |
(j)
|
Employee-wise details of options granted to
|
Nil
|
Nil
|
| |
|
(i) Key Managerial Personnel
|
Nil
|
Nil
|
| |
|
(ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during that year
|
Nil
|
Nil
|
| |
|
(iii) Identified employees who were granted option, during any one year, equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant
|
Nil
|
Nil
|
The purpose of these plans are to facilitate Eligible Persons (Employees with Long Service and Contributed to the growth of the Company) through ownership of shares of the Company to participate and gain from the Company’s performance, thereby acting as a suitable reward. Participation in the ownership of the Company, through share based compensation schemes will be a just reward for the employees for their continuous hard work, dedication and support, which has led the Company to be what it is today.
The Plan is intended to :
* Create a sense of ownership within the organisation;
* Encourage Employees to continue contributing to the success and growth of the organisation;
* Retain and motivate Employees;
* Encourage eligible persons to align their performance with Company objectives;
* Reward Eligible persons to align their performance with Company objectives;
* Align interest of Eligible Persons with those of the organisation.
The Schemes are in compliance with the SEBI Regulations. During the year under review, no material changes have been made in the schemes.
A Certificate from the Company’s Statutory Auditors, with respect to implementation of the above Employee Stock Option Schemes in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and resolution passed by the Members of the Company, has been received and same is attached as Annexure -10.
The details as required under part F of Schedule I read with Regulation 14 of SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are disclosed on the company’s website and the weblink is given below :
https://www.ramcoindltd.com/esos.html
INDUSTRIAL RELATIONS a PERSONNEL
Industrial relations continue to be cordial and harmonious at all the Units. Employees at all levels are extending their fullest cooperation for the various cost reduction measures of the Company. There is a special thrust on Human Resources Development with a view to promoting creative and group effort.
CREDIT RATING
The ratings for the Company’s borrowing are available in Corporate Governance Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
The details of key initiatives with respect to Stakeholder relationship, customer relationship, environment, sustainability, health and safety are available in the BRSR for the year 2023-24 which forms part of this report.
SHARES
The Company’s shares are listed in BSE Limited and National Stock Exchange of India Limited and the Annual Listing Fees have been paid for the F.Y. 2024-25 respectively.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Dividend amount remaining unclaimed/unpaid for a period of over 7 years was transferred to IEPF as detailed below :
The due date for transfer of Unpaid Dividend for the financial year 2016-17 to Investor Education Protection Fund is 02.09.2024. There is no other unpaid dividend amount transferred to IEPF during the financial year 2023-2024.
Shares corresponding to the dividend for the financial year 2015-16 were transferred to IEPF, as detailed below :
| |
No. of Shares
|
Date of Transfer to IEPF
|
| |
6,868
|
06-04-2023
|
Year wise amount of unpaid /unclaimed dividend lying in the unpaid account and corresponding shares, which are liable to be transferred to IEPF and due dates for such transfer, are tabled below:
| |
|
|
Year
|
Type of Dividend
|
Date of Declaration of Dividend
|
Last Date for Claiming Unpaid Dividend
|
Due Date for Transfer to IEP Fund
|
No. of Shares of ' 1/- each
|
Amount of unclaimed / unpaid Dividend as on 31-03-2024 '
|
|
|
2016-17
|
Dividend
|
04-08-2017
|
03-08-2024
|
02-09-2024
|
3,87,483
|
1,93,741.50
|
|
2017-18
|
Dividend
|
03-08-2018
|
02-08-2025
|
01-09-2025
|
2,77,287
|
1,38,643.50
|
|
2018-19
|
Dividend
|
08-08-2019
|
07-08-2026
|
06-09-2026
|
2,24,378
|
1,12,189.00
|
|
2019-20
|
Interim
Dividend
|
03-03-2020
|
02-03-2027
|
01-04-2027
|
3,52,498
|
1,76,249.00
|
|
2020-21
|
Dividend
|
12-03-2021
|
11-03-2028
|
10-04-2028
|
2,32,431
|
2,32,431.00
|
|
2021-22
|
Dividend
|
10-08-2022
|
09-08-2029
|
08-09-2029
|
3,99,189
|
3,99,189.00
|
|
2022-23
|
Dividend
|
10-08-2023
|
09-08-2030
|
08-09-2030
|
2,14,585
|
2,14,585.00
|
| |
|
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, 2024;
(b) They had selected such accounting policies and applied them consistently and made judgements 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, 2024 and of the profit of 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 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.
RESEARCH AND DEVELOPMENT EFFORTS
During the year, the company continued with respect of economical mix for manufacture of fibre cement sheets, calcium silicate boards, fibre cement boards and non-asbestos roofing sheets. Our Research and Development Laboratory has been accredited by National Accreditation Board for Testing and Calibration Laboratories (NABL).
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.
|