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Ramky Infrastructure Directors Report, Ramky Infra Reports by Directors
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Ramky Infrastructure

BSE: 533262|NSE: RAMKY|ISIN: INE874I01013|SECTOR: Construction & Contracting - Civil
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Directors Report Year End : Mar '15    Mar 14
Dear Members,
 
 The Directors have pleasure in presenting their 21st Annual Report on
 the business and operations of your company for the financial year
 ended March 31, 2015.
 
 Financial Results
 
 The standalone financial performance of the Company for the financial
 year ended March 31, 2015 is summarized below:
 
                                                        (Rs. in Crores)
 
 Particulars                                      2014-15       2013-14
 
 Revenue from operations                          1079.74       1755.09
 
 Other Income                                       34.93         22.94
 
 Total Income                                     1114.67       1778.03
 
 Total Expenditure                                1780.76       2401.46
 
 Profit/(Loss) before taxes                       (666.09)      (623.43)
 
 Tax Expense/(Benefit)                            (220.61)      (191.32)
 
 Profit/(Loss) after Tax                          (445.48)      (432.11)
 
 Earnings per equity shares in Rs.                 (77.89)       (75.55)
 
 Review of Performance and state of the company''s affairs
 
 During the year under review, the company''s performance was affected
 due to macro and micro industry concerns such as liquidity issues,
 delay in hand over of land for road projects, delay in receivables from
 the clients and other factors prevailing in the industry/sector. The
 company is making all measures to overcome those constraints by either
 terminating or foreclosure of the contracts, speeding up the execution
 of works which are on the verge of completion, making claims and
 claiming cost escalation or cost overruns whereever the contract
 agreements permits etc.
 
 During the year under review, members will notice that the standalone
 revenues have declined by 38.48% to Rs. 1079.74 crores from Rs. 1755.09
 crores of the previous year 2013-14, while the Loss after tax was at
 Rs.  445.58 crores from Loss after tax of Rs. 432.11 crores achieved
 during the previous year 2013-14.
 
 During the year under review, members will notice that the consolidated
 revenues have declined by 31.54% to Rs. 1644.13 crores from Rs. 2401.70
 crores of the previous year 2013-14, while the Loss after Tax was at
 Rs.  482.96 crores from Loss after tax of Rs. 414.85 crores achieved
 during the previous year 2013-14.
 
 Dividend and Transfer to Reserves
 
 In view of the losses incurred in the financial year 2014-15, your
 Board of Directors has not recommended any dividend for the financial
 year 2014-15 and no amount has been transferred to General Reserve
 during the financial year 2014-15.
 
 Share Capital
 
 During the period under review there is no change in the Authorised and
 paid up capital of the Company. The Authorised share capital is Rs.
 70,00,00,000 and paid up share capital is Rs. 57,19,79,910.
 
 The Company has not issued any shares with differential rights and
 hence no information as per provisions of Section 43(a)(ii) of the Act
 read with Rule 4(4) of the Companies (Share Capital and Debenture)
 Rules, 2014 is furnished.
 
 Directors & its board meetings:
 
 The following persons were appointed as Additional Director of the
 Company during the year under report:
 
 S.
 No  Name of the Director        Date of Appointment
 
 1   Mr. G. Krishna Kumar           13.11.2014
 
 2   Mrs A. Rama Devi               13.02.2015
 
 Proposed Appointments:
 
 The following appointments to the Board are proposed:
 
 Approval of the shareholders is being sought for the appointment of Mr.
 A.Ayodhya Rami Reddy as Director (executive Chairman) of the Company,
 who retire by rotation at the ensuing Annual General Meeting of the
 Company and being eligible offer himself for re-appointment in
 accordance with the provisions of the Companies Act and pursuant to
 Articles of Association of the Company. Your Board recommends his re-
 appointment.
 
 Mr. G. Krishna Kumar was inducted as an Additional Director on the
 Board.  As per the provisions of Section 161 of the Companies Act,
 2013, he holds office only up to the date of the Annual General Meeting
 of the Company.  Approval of the Shareholders is being sought for his
 appointment as Director (Non Executive ) in the ensuing Annual General
 Meeting pursuant to the provisions of the Section 160 of the Companies
 Act, 2013. Being eligible, the Board recommends his appointment.
 
 In terms of Sections 149, 152, Schedule IV and other applicable
 provisions, if any, of the Companies Act, 2013 read with Companies
 (Appointment and Qualification of Directors) Rules, 2014, the
 Independent Directors can hold office for a term of up to five (5)
 consecutive years on the Board of Directors of your Company and are not
 liable to retire by rotation.  Accordingly, Mrs.A.Rama Devi was
 appointed as Additional and Independent Directors of your Company up to
 5 (five) consecutive years.
 
 Appropriate resolutions for the appointment/ re-appointment of
 Directors are being placed before you for your approval at the ensuing
 Annual General Meeting. The brief resume of the aforesaid Directors and
 other information have been detailed in the Notice. Your Directors
 recommend their appointment/reappointment as Directors of your Company.
 
 Resignation
 
 Mr. Rajiv Maliwal, Mr. V.Harish Kumar, Mr. Rajasekhara Reddy and Dr
 Archana Niranjan Hingorani, Directors of the company submitted their
 resignation vide letter dated 13 November 2014. The board of directors
 at their meeting held 13 November 2014 have accepted the same and
 placed on record its sincere appreciation for the services rendered to
 the company.
 
 Number of meetings of the board :
 
 Six Board Meetings were held during the year ended on 31st March 2015.
 The gap between any two Board Meetings is within the period prescribed
 by the Companies Act, 2013.
 
 Declarations by Independent Directors:
 
 The Company has received declarations form the Independent Director
 under Section 149(6) of the Companies Act, 2013 confirming their
 independence vis--vis the Company.
 
 Board evaluation and assessment;
 
 The company believes formal evaluation of the board and of the
 individual directors, on an annual basis, is a potentially effective
 way to respond to the demand for greater board accountability and
 effectiveness. For the company, evaluation provides an ongoing means
 for directors to assess their individual and collective performance and
 effectiveness. In addition to greater board accountability, evaluation
 of board members helps in;
 
 a.  More effective board process
 
 b.  Better collobaration and communication
 
 c.  Greater clarity with regard to members roles and responsibilities
 
 d.  Improved chairman - managing directors and board relations The
 evaluation process covers the following aspects
 
 - Self evaluation of directors
 
 - Evaluation of the performance and effectiveness of the board
 
 - Evaluation of the performance and effectiveness of the committees
 
 - Feedback from the non executive directors to the chairman
 
 - Feedback on management support to the board.
 
 Familiarisation Programme for Independent Directors
 
 The Company shall through its Senior Managerial personnel familiarise
 the Independent Directors with the strategy, operations and functions
 of the Company. The Independent Directors will also be familiarised
 with their roles, rights and responsibilities and Orientation on
 Statutory Compliances as a Board Member.
 
 On appointment of the Independent Directors, they will be asked to get
 familiarised about the Company''s operations and businesses. An
 Interaction with the key executives of the Company is also facilitated
 to make them more familiar with the operations carried by the company.
 Detailed presentations on the business of the company are also made to
 the Directors.  Direct meetings with the Chairman and the Managing
 Director are further facilitated for the new appointee to familiarize
 him/her about the Company/ its businesses and the group practices as
 the case may be and link is available at the website
 http://ramkyinfrastructure.com.
 
 Directors'' Responsibility Statement
 
 Pursuant to the requirement under section 134 (3) and (5) of the
 Companies Act 2013, with respect to Directors'' Responsibility
 Statement, your board of directors to the best of their knowledge and
 ability 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.  such accounting policies have been selected and applied
 consistently and the Directors 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 at 31st March, 2015 and of the profit/loss
 of the Company for that year;
 
 c.  proper and sufficient care was taken 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.  the annual accounts of the Company have been prepared on a going
 concern basis;
 
 e.  internal financial controls have been laid down to be followed by
 the Company and that such internal financial controls are adequate and
 were operating effectively;
 
 f.  proper systems have been devised to ensure compliance with the
 provisions of all applicable laws and that such systems were adequate
 and operating effectively;
 
 Corporate Governance
 
 In pursuance of Clause 49 of the Listing Agreement entered into with
 the Stock Exchanges, a separate Report on Corporate Governance along
 with a certificate from Mr. Manoj Kumar Koyalkar, Practising Company
 Secretary regarding its compliance is annexed and forms part of this
 Report. Your company will continue to adhere in letter and spirit to
 good corporate governance policies.
 
 Management Discussion & Analysis
 
 The Management Discussion and Analysis Report highlighting the industry
 structure and developments, opportunities and threats, future outlook,
 risks and concerns etc. is furnished separately and forms part of this
 report.
 
 Consolidation of Accounts
 
 The standalone accounts of your Company broadly represents the EPC
 business plus the investment that have gone into the 13 wholly owned
 subsidiaries, 6 Subsidiaries, 1 Association of person, 2 Jointly
 Controlled entities and 2 Associates & 3 step down subsidiaries of the
 Company, and the consolidated business represents the consolidation of
 the EPC business and the integrated infrastructure developer business.
 
 In accordance with clause 32 of the listing agreement and in compliance
 with the provisions of companies act 2013 and the Accounting Standard
 AS-21 on Consolidated Financial Statements read with Accounting
 standard AS-23 on Accounting for Investments in Associates and
 Accounting Standard AS-27 on Financial Reporting of Interests in Joint
 Ventures, your Directors have pleasure in attaching the Consolidated
 Financial Statements as part of the Annual Report.
 
 A statement containing brief financial details of the subsidiaries for
 the financial year ended March 31, 2015 is annexed. The annual accounts
 of these subsidiaries and the related detailed information will be made
 available to any member of the Company/its subsidiaries seeking such
 information at any point of time and are also available for inspection
 by any member of the Company/its subsidiaries at the registered office
 of the Company. The annual accounts of the subsidiaries will also be
 available for inspection, as above, at registered office of the
 respective subsidiary companies.
 
 Statutory Auditors
 
 M/s.Chaturvedi & Partners, Chartered Accountants, New Delhi, Statutory
 Auditors are the auditors appointed under causal vacancy.
 
 M/s Chaturvedi & Partners, Chartered Accountants, New Delhi bearing
 ICAI Registration No. 307068E are proposed to be appointed as Statutory
 Auditors of the Company from the conclusion of the ensuing Annual
 General Meeting till the conclusion of the fourth Annual General
 Meeting of the Company held thereafter, subject to ratification of the
 appointment by the members at every AGM.
 
 As required under Section 139 of the Companies Act, 2013, the Company
 has obtained a written consent from M/s Chaturvedi & Partners, to such
 appointment and also a certificate to the effect that their
 appointment, if made, would be in accordance with Section 139(1) of the
 Companies Act, 2013 and the rules made there under.
 
 The Board of Directors and the Committee thereof, recommend the
 appointment. Appropriate resolutions form part of the agenda at the
 ensuing Annual General Meeting.
 
 Business Responsibility Report (BRR)
 
 Securities Exchange Board of India (SEBI) vide circular CIR/CFD/DIL/8/
 2012 dated August 13, 2012 has mandated the inclusion of BRR as part of
 the Annual Report for the top 100 listed entities based on their market
 capitalization on Bombay Stock Exchange Ltd and National Stock Exchange
 of India Ltd as at 31 March 2012. In view of the requirements
 specified, the company is not mandated for the providing the BRR and
 hence do not form part of this Report.
 
 Corporate Social Responsibility
 
 Ramky Infra has been pursuing CSR activities long before they were made
 mandatory under the companies act 2013. You are aware that the CSR
 activities are being carried under Ramky Foundation, a charitable trust
 which looks after CSR activities. It focuses on 4 thrust areas viz,
 natural resource management, education, health and women empowerment.
 It seeks to bring corporate sector with an overall aim to create
 equitable, sustainable, and accessible developmental opportunities for
 the communities we serve. A Report on Corporate Social Responsibility
 (CSR) Policy and Activities as per Rule 8 of Companies (Corporate
 Social Responsibility Policy) Rules, 2014 is appended to this annual
 report as Annexure - B and link to the CSR policy is available at the
 website http:/ /ramkyinfrastructure.com.
 
 Particulars of Loans, Guarantees and Investments
 
 Details of loans and guarantees given and investments made under
 Section 186 of the Act are provided in the Notes to the Financial
 Statements.
 
 Cost Audit Report
 
 Pursuant to the provisions of Section 148 of the Companies Act, 2013
 read with Notifications/Circulars issued by the Ministry of Corporate
 Affairs from time to time, the Board of Directors at their meeting
 dated 20 June 2014, appointed M/s. R.Srinivas Rao, Cost Accountants as
 the Cost Auditors of the Company for the financial year 2014 - 15. The
 Cost Audit Report will be filed within the stipulated period of 180
 days from the closure of the financial year.
 
 Secretarial Audit Report
 
 Pursuant to the provisions of Section 204 read with Section 134(3) of
 the Companies Act, 2013, the company is required to obtain Secretarial
 Audit Report from Practicing Company Secretary. Mr.Manoj Kumar
 Koyalkar, Practising company secretary was appointed to issue
 Secretarial Audit Report for the financial year 2014-15.
 
 Secretarial Audit Report issued by Mr.Manoj Kumar Koyalkar, Practising
 company secretary in Form MR-3 for the financial year 2014-15 forms
 part to this report as Annexure - C. The said report contains
 observation as under
 
 I further report that as on March 31, 2015, undisputed dues in respect
 Provident Fund, Employees State Insurance and Gratuity, have not been
 regularly deposited with the appropriate authorities and there have
 been delays in number of cases.
 
 The company has incurred losses during this financial year and last
 financial year. Due to severe liquidity constraints, there have been
 delays in payment of the Provident Fund, Employees State Insurance dues
 and gratuity, the company has made provision for payment of statutory
 dues in the restructure package approved under JLF and the company will
 be able to address the crisis through restructure arrangement with
 existing lenders, the restructure package inter-alia includes for
 funding of such dues whereby we can clear the dues.
 
 Whistle Blower Policy/Vigil Mechanism
 
 Pursuant to the provisions of section 177 of the companies act, 2013
 and the rules framed there under and pursuant to the applicable
 provision of clause 49 of the listing agreement entered with stock
 exchanges, the company has established a mechanism through which all
 stake holders can report the suspected frauds and genuine grievances to
 the appropriate authority. The Whistle blower policy which has been
 approved by the board of directors of the company has been hosted on
 the website of the company viz http://ramkyinfrastructure.com.
 
 Risk Management Policy
 
 The board of directors has formed a risk management committee to
 identify, evaluate, mitigate and monitor the risks associated with the
 business carried by the company. The committee reviews the risk
 management plan and ensures its effectiveness. A mechanism has been put
 in place which will be reviewed on regular intervals.
 
 Policy on Sexual Harassment
 
 The Company has adopted policy on Prevention of Sexual Harassment of
 Women at Workplace in accordance with The Sexual Harassment of Women at
 Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the
 financial year ended 31st March, 2015, the Company has not received any
 complaints pertaining to Sexual Harassment.
 
 Particulars of Contracts or arrangements with related parties
 
 All the related party transactions that were entered during the
 financial years were in the ordinary course of business of the company
 and were on arm length basis. There were no materially significant
 related party transactions entered by the company during the year with
 the promoters , directors, key managerial personnel or other persons
 which may have a potential conflict with the interest of the company.
 
 The policy on related party transactions as approved by the board of
 directors is hosted on the website of the company viz : http://
 ramkyinfrastructure.com.
 
 Since all the related party transactions entered into by the company
 were in the ordinary course of business and were on arm length basis ,
 the requirement of furnishing the requisite particulars in form AOC -2
 is not applicable.
 
 Material changes and commitments, if any, affecting the financial
 position of the company
 
 There are no material changes and commitments affecting the financial
 position of the company which occurred between the end of the financial
 year to which the financial statements relate and the date of the
 report.
 
 Details of significant and material orders passed by the regulators or
 courts or tribunals impacting the going concern status and company''s
 operations in future
 
 No significant and material order has been passed by the regulators,
 courts, tribunals impacting the going concern status and Company''s
 operations in future
 
 Public Deposits
 
 Your Company has not accepted any deposits from the public. As such,
 there was no principal or interest outstanding on the date of the
 Balance Sheet.
 
 Particulars of Employees
 
 A table containing the particulars in accordance with the provisions of
 Section 197(12) of the Act, read with Rule 5(1) of the Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is
 appended as Annexure D to this Report.
 
 A statement containing the name of every employee employed throughout
 the financial year and in receipt of remuneration of Rs 60 lakh or
 more, or employed for part of the year and in receipt of Rs. 5 lakh or
 more a month, under Rule 5(2) of the Companies (Appointment and
 Remuneration of Managerial Personnel) Rules, 2014, is enclosed as
 Annexure E to this Report.
 
 Extract of the Annual Return
 
 In accordance with Section 134 (3) (a) of the Act, an extract of the
 Annual Return in the prescribed format is appended as Annexure F to
 this Report.
 
 Particulars of Conservation of Energy, Technology Absorption and
 Foreign Exchange Earnings and Outgo
 
 Conservation of Energy which is an ongoing process in the Company''s
 construction activities and the same is not furnished as the relative
 rule is not applicable to your company.
 
 There is no information to be furnished regarding Technology Absorption
 as your company has not undertaken any research and development
 activity in any manufacturing activity nor any specific technology is
 obtained from any external sources which needs to be absorbed or
 adapted.
 
 Innovation is a culture in the Company to achieve cost efficiency in
 the construction activity so as to be more competitive in the
 prevailing environment.
 
 Foreign Exchange Earnings and Outgo
 
 In accordance with the provisions of Section 134 of the Companies Act,
 2013, read with the Companies (Disclosure of Particulars in the Report
 of Board of Directors) Rules, 1988, the information relating to foreign
 exchange earnings and outgo is provided under Notes to the Balance
 Sheet and Profit and Loss Account.
 
 MANAGEMENT REPLIES TO AUDITORS REPORT 
 
 - Standalone and Consolidated financial reports:
 
 With reference to observations made in Auditor''s Report, the notes of
 account is self-explanatory and therefore do not call for any further
 comments. The results for the year ended March 31, 2015 have been
 subjected to an audit by the Statutory Auditors of the Company and a
 qualified report has been issued by them thereon
 
 Qualifications matters - Standalone and consolidated financials
 
 1.  With respect to the deferred tax assets amounting to Rs. 409.08
 Crore :
 
 The Company has recognized deferred tax asset on unabsorbed
 depreciation, business losses and other timing differences incurred by
 the Company during the year. Based on estimated realization of
 reasonable margin on existing contracts on hand and future contracts,
 the Management is confident of sufficient future taxable income for
 realization of deferred tax assets.
 
 2.  Impact of floods on one of the Company''s project in Srinagar, Jammu
 and Kashmir
 
 The Company has lodged an insurance claim in this regard and the
 management is confident of realising the insurance claim and therefore
 there will be no consequential material adjustment for loss of project
 materials and assets will be required.
 
 3.  The statutory auditors of the Company have also drawn Emphasis in
 their review report (Standalone and consolidated financials) with
 respect to
 
 a. Material uncertainties over the realisability of certain
 construction work in progress, trade receivables and loans and advances
 aggregating to Rs. 580.78 crores, which are subject matters of
 arbitration proceedings/ negotiations
 
 The Management of the Company, keeping in view the long term nature of
 the contracts, terms and condition implicit in these contracts and the
 ongoing discussion based on which steps to recover are currently in
 process, is confident of recovering the amount as they are
 contractually tenable.
 
 4.  Other observations - Statutory Compliances:
 
 a. Delays caused in remitting the statutory dues towards Provident
 Fund, Employees State Insurance, Income tax deducted at source, Works
 contract Tax deducted at source, Sales tax and Service Tax to the
 concerned authorities is primarily due to non realization of trade
 receivables, retention and advances from clients and other authorities
 due to arbitrations/disputes due to which the company is facing severe
 liquidity crisis.
 
 However we are able to address the crisis through restructure
 arrangement with existing lenders, the restructure package inter-alia
 includes for funding of such dues whereby we can clear the dues
 
 b. Defaulted in repayment of dues to bankers : The default in repayment
 of dues to the banks have been regularised post restructure arrangement
 with lenders of the company under JLF .
 
 5.  Emphasis matters in consolidated financials
 
 a.  the uncertainty in connection with the charge sheet filed by
 Central Beuro of Investigation (CBI) and attachment order of the
 Enforcement Directorate in respect of certain assets of the company.
 
 The Management believes that the project of RPCIL is being carried out
 in accordance with the provisions of the Concession Agreement executed
 between RPCIL and Andhra Pradesh Industrial Infrastructure Corporation
 Limited (APIIC) after obtaining the requisite approvals and following
 the due process of law.
 
 b.  in respect of the insurance claim filed by the Company, towards
 loss caused by HUDHUD cyclone in Pharma City.
 
 The Company has lodged an insurance claim in this regard and the
 management is confident of realising the insurance claim and therefore
 there will be no loss caused by HUDHUD cyclone in Pharma City.
 
 c.  With respect of contract terminated/foreclosed by certain
 subsidiaries and no business being carried out by a subsidiary and no
 business in hand which affect the going concern assumption of those
 companies- notes of account is self- explanatory and therefore do not
 call for any further comments
 
 d.  Revenue and receivables of Rs. 408.96 crores, recognised on the
 basis of fair value of consideration for construction services and the
 effective interest rate in the case of financial assets covered under
 service concession arrangements.
 
 As per the Draft Guidance note on Service Concession Arrangements, the
 company has accounted for service concession arrangements for
 applicable BOT projects.
 
 INDUSTRIAL RELATIONS
 
 The company enjoyed cordial relations with its employees during the
 year under review and the Board appreciates the employees across the
 cadres for their dedicated service to the Company, and looks forward to
 their continued support and higher level of productivity for achieving
 the targets set for the future.
 
 ACKNOWLEDGEMENTS
 
 Your Directors wish to express their appreciation of the support and
 co- operation of the Central and the State Government, bankers,
 financial institutions, suppliers, associates and subcontractors and
 seeks their continued patronage in future as well.
 
                                    For and on behalf of the Board of
 
                                         Ramky Infrastructure Limited
 
                    Mr.Y.R.Nagaraja         Alla Ayodhya Rami Reddy 
 
 Hyderabad          Managing Director       Executive Chairman 
 
 August 13, 2015   (DIN:00009810)          (DIN: 00251430)
Source : Dion Global Solutions Limited
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