Ramky Infrastructure Directors Report, Ramky Infra Reports by Directors
Ramky Infrastructure
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Directors Report Year End : Mar '13    « Mar 12
Dear Members,
 The Directors have pleasure in presenting their 19th Annual Report on
 the business and operations of your Company for the financial year
 ended March 31, 2013.
 The standalone financial performance of the Company for the financial
 year ended March 31, 2013 is summarized below:
                                   ( Crores)
 Particulars                  2012-13       2011-12
 Gross Turnover               3038.62       3094.25
 Other Income                   32.19         37.50
 Total Income                 3070.81       3131.75
 Total Expenditure            2980.18       2918.35
 Profit before Interest,
 Depreciation, & Tax           302.24        360.20
 Profit before taxes            90.64        213.40
 Tax Expense                    30.71         69.72
 Profit after Tax               59.93        143.68
 Balance brought forward from
 previous year                 481.78        403.67
 Profit available for 
 appropriation                 541.71        547.35
 Provision for tax on 
 earlier years and
 excess dividend tax 
 written back                                 65.57
 Balance carried to 
 Balance Sheet                 541.71        481.78
 During the year under review, the overall performance of the company
 was reasonable considering to the sector/market conditions.
 During the year under review, Members will notice that the revenues
 have marginally declined by 1.80 % to Rs. 3038.62 crores from Rs. 3094.25
 crores of the previous year 2011-12, while the Profit before Tax
 decreased by 57.53% to Rs. 90.64 crores from Rs. 213.40 crores achieved in
 the previous year 2011-12.
 The profit after tax decreased by 58.28% to Rs. 59.93 crores from Rs.
 143.68 crores reported in the previous year. The earnings per share was
 Rs. 10.48 as compared to Rs. 25.12 in the previous year 2011-12.
 During the year under review, your Company was awarded projects
 totalling to Rs. 1,251 crores across all verticals, with the result the
 order book at year end stood at a healthy Rs. 11,963 Crores as compared
 to previous year end order book balance of Rs. 13,703 crores
 A much greater emphasis on infrastructure is expected in the Twelfth
 Plan. The construction industry needs to focus on enhancing its
 capacity on one hand, and improving project delivery on the other. The
 Planning commission pegs the gap in the delivery capacity of the
 construction industry at 45-50 per cent. Given an average investment of
 about Rs. 10 trillion in infrastructure per year in the Twelfth Plan, the
 investment in the construction industry is estimated at about Rs. 6.2
 trillion annually (at a 62 per cent weighted average factor of
 construction activity in infrastructure).  The Planning Commission
 estimates the current delivery capacity of the Indian construction
 industry at Rs. 4.15 trillion per annum.  Thus, the total additional
 investment required by the construction industry per year is Rs. 2.1
 The negative effects of global recessionary conditions are being
 attenuated by various countries through huge investments in
 infrastructure and India is no exception in this regard. The key to
 global competitiveness of the Indian economy lies in building world
 class infrastructure with service delivery at economical rates.
 As infrastructure investments are sluggish, construction industry is
 facing demand pressure. Order execution remains slow due to weak
 macroeconomic environment and delays in government clearances, shifting
 of utilities, etc. the financial profile of construction companies has
 also deteriorated in the last few years owing to poor profitability and
 increase in BOT exposure.
 The strong order book position coupled with thrust given by the
 government for infrastructure sector augurs well for company, being one
 of the leading companies in infrastructure development. The company is
 recognised for its well organised and timely completion of projects
 with quality consciousness. Ramky Infra is exploring international
 business opportunities to scale up its business in the years to come.
 A harmonised list of main sectors and sub-sectors of infrastructure
 approved by government to serve as a guide for all agencies responsible
 for supporting infrastructure is a welcome move.
 Although your Company has earned profits during the year, the Board of
 Directors have decided to plough back the profits into the Company.
 Therefore, your Directors have not recommended any dividend for the FY
 During the financial year under review, there were no transfers to
 During the period under review there is no change in the Authorised and
 paid up capital of the Company.
 The company has raised an amount of Rs. 350 Crores through initial public
 offer during the year 2010-11. The following are the details of IPO
 proceeds pending utilisation:
                                       (Rs. in Crores)
 Particulars                For the year ended/As at
                        Note March 31,    March 31,
                             2012         2013
 Opening unutilised       A  24.35         6.62
 Utilisation of funds
 Investment in capital 
 equipment                   17.43         6.62
 Working capital
 Repayment of term loans 
 General corporate 
 purposes                     0.20 
 IPO expenses                 0.10 
 Total funds utilised   B    17.73         6.62
 Unutilised IPO
  money C=(A-B)               6.62 
 The following person was appointed as Additional Director of the
 Company during the year under report:
 Sl.No.  Name of the Director Date of Appointment
 1 Mr Rajasekhara Reddy November 08, 2012
 Proposed Appointments:
 The following appointments to the Board are proposed:
 a.  Approval of the shareholders is being sought for the appointment of
 Mr. Rajiv Maliwal and Mr.Kamlesh Shivji Vikamsey, Directors of the
 Company, who retire by rotation at the ensuing Annual General Meeting
 of the Company and being eligible offer themselves for re-appointment
 in accordance with the provisions of the Companies Act, 1956 and
 pursuant to Articles of Association of the Company.
 b.  Mr.Rajasekhara Reddy was inducted as Additional Director on the
 Board during the year under report. As per the provisions of Section
 260 of the Companies Act, 1956, 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 liable to retire by
 rotation in the ensuing Annual General Meeting pursuant to the
 provisions of the Section 257 of the Companies Act, 1956.
 Pursuant to the requirement under section 217 (2AA) of the Companies
 Act 1956, with respect to Directors'' Responsibility
 Statement, it is hereby confirmed that:
 i. In the preparation of the annual accounts, the applicable accounting
 standards have been followed along with proper explanations relating to
 material departures ;
 ii. The Directors have selected such accounting policies and applied
 them consistently and made judgment 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 March 31, 2013 and of the profit of the Company
 for the financial year ended on that date;
 iii. The Directors have taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956, for safeguarding the assets of
 the Company and for preventing and detecting fraud and other
 irregularities; and
 iv. the annual accounts of the Company have been prepared on a ''''going
 concern'''' basis.
 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 Mrs. Bindu Kilari, 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.
 A report on Management Discussion & Analysis forms part of this Annual
 The standalone accounts of your Company broadly represents the EPC
 business plus the investment that have gone into the 13 wholly owned
 subsidiaries, 7 Subsidiaries, 2 jointly controlled entities & 1
 Associate and 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 the Accounting Standard AS-21 on Consolidated
 Financial Statements read with 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.
 Pursuant to the provision of Section 212(8) of the Act, the Ministry of
 Corporate Affairs vide its circular dated February 8, 2011 has granted
 general exemption from attaching the Balance Sheet, Profit and Loss
 Account and other documents of the subsidiary companies with the Annual
 Report of the parent Company. Accordingly the Company has availed the
 exemption from attaching the Balance Sheet, Profit and Loss Account and
 other documents of the subsidiary Companies.
 A statement containing brief financial details of the subsidiaries for
 the financial year ended March 31, 2013 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.
 The Auditors M/s. Visweswara Rao & Associates, Chartered Accountants,
 Hyderabad, who retire at the ensuing Annual General Meeting of the
 company, are eligible for reappointment as Joint Statutory Auditors of
 the Company till the conclusion of next Annual General Meeting. The
 Company has received their offer in writing about their willingness for
 re-appointment as Joint Statutory auditors of your Company along with a
 Certificate under Section 224 (1B) of the Companies Act, 1956.
 The Joint Auditors M/s B S R & Co., Chartered Accountants, Hyderabad
 who retire at the ensuing Annual General Meeting of the company, are
 eligible for reappointment as Joint Statutory Auditors of the Company
 till the conclusion of next Annual General Meeting. The Company has
 received their offer in writing about their willingness for
 reappointment as Joint statutory auditors of the Company along with a
 Certificate under Section 224 (1B) of the Companies Act, 1956.
 The Board of Directors and the Committee thereof, recommend their
 respective re-appointments. Appropriate resolutions form part of the
 agenda at the ensuing Annual General Meeting.
 With reference to observations made in Auditor''s Report, the notes of
 account is self-explanatory and therefore do not call for any further
 The results for the year ended March 31, 2013 have been subjected to an
 audit by the Statutory Auditors of the Company and an unqualified
 report has been issued by them thereon
 Emphasis matter: Income Tax Department has carried out Search and
 Seizure operations under section 132 of the Income Tax Act, 1961 at the
 company''s premises in Hyderabad and other locations on 7th February
 2013 and has collected certain information and records. Later the
 company was served summons u/s 131 of the Act, which was received by
 Company on 28th May 2013 for furnishing of additional information,
 which was furnished to the Department.  The Income Tax Department has
 not served any demand in connection with the search carried on the
 The management firmly believes that the business of the company is
 being carried out with accepted business practices and with prudence
 and it has complied with the requirements of the Act.
 Pending completion of the proceedings, the final outcome of the search
 and seizure operation and the consequent tax liability, if any is
 currently not ascertainable.
 Inventory: Currently the Company is maintaining the records of
 inventory manually and by way of posting entries in Tally. The Company
 now embarked the implementation of SAP where the data compared in the
 MM module, which further strengthen the process of inventory
 accounting. The implementation is taken in phased manner, so as to
 improve the systems and controls.
 Internal Audit System: Currently the internal audit is handled by
 company''s IMAT team and external auditors. Detailed calendar is worked
 out and major projects are covered twice in a year. The company is on
 continuous focus of improvement by supplementing additional coverage,
 as per the findings, if any, by the audit team to make the process
 Statutory compliance: Delay caused in remitting statutory dues with
 respect to Income tax TDS and work contract tax TDS to appropriate
 authorities was mainly due to short term liquidity issues and also in
 compiling information extracted from books of accounts in various
 project locations spread across various parts of the country.
 During the year the Company has delayed in repayment of principal and
 interest to various banks aggregating to Rs. 305.45 Crores. The delays in
 repayments of principal and interest range from 1 to 15 to 88 days. An
 amount of Rs. 24.96 Crores towards working capital demand loan from HDFC
 Bank Limited due on 31st March-13 was repaid on 1st June 2013. The
 delay was caused mainly due to non receipt of receivables in time from
 various Govt and other parties and due to infusion of funds into
 project execution.
 The company has borrowed unsecured loans from Ramky Enviro Engineers
 Ltd a related party to meet the operational requirements of the company
 and the outstanding balance at the end of the year is Nil.
 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 and National Stock
 Exchange of India Ltd as at March 31, 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.
 As per the Companies (Cost Accounting Records) Rules, 2011, every
 Company which is engaged in production, processing, manufacturing and
 mining activities and the aggregate value of net worth as on the last
 date of the immediately preceding financial year exceeds Rs. 5 crores or
 aggregate value of Turnover during the immediately preceding financial
 year exceeds Rs. 25 crores or whose securities are listed or in the
 process of listing is required to submit a Compliance Report by a Cost
 Accountant to the Central Government.
 The Company has obtained the said Compliance Report for FY 2012 - 13
 from Mr. R Srinivasa Rao, Practicing Cost Accountant.
 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.
 A statement containing the Particulars of employees who were in receipt
 of remuneration of X 60,00,000/- or more per annum or X 5,00,000/- or
 more per month pursuant to provisions of Section 217(2A) of the
 companies act, 1956 are set out as Annexure to this Report. None of the
 Employees listed in the annexure is related to any director of the
 Conservation of energy, which is an ongoing process in the Company''s
 construction activities, 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
 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: X 57.83 crores
 Foreign Exchange Outgo : X 0.09 crores
 You will be glad to note that your company had established a charitable
 trust Ramky Foundation as part of its Corporate Social
 Responsibility. 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 CSR is provided elsewhere and forms part of this
 Annual Report.
 The following are the awards conferred on the Company during the year:
 - Best Professionally Managed Company Award - by 5th CIDC Vishwakarma
 Awards 2013.
 - Best Construction Project Award under Urban Infrastructure category
 - 87.5 MLD STP, Koparkhairane, Mumbai by 5th CIDC Vishwakarma awards -
 - Outstanding Contribution Award - Residential Project - Ramky Towers
 in the Real Estate Category by 3rd EPC World Awards 2012.
 - 5th GIREM Leadership Awards 2012 for Outer Ring Road, Hyderabad under
 the category of Best Urban Development Project.
 - Fastest Growing Construction Company (large category) as per the
 Construction World Annual 2012 Study.
 - 13th Annual Greentech Environment Excellence Award - 2012 Silver
 Award for 87.5 MLD STP Koparkhairane, Mumbai project under Construction
 - 10th Annual Construction World Global Awards 2012 for Fastest Growing
 Construction Company - 1st Rank (large category).
 - 2nd Annual Greentech CSR Award - 2012 in the Silver Category for
 Ramky Foundation under Service Sector.
 - D&B - Axis Bank Infra Awards - 2012 for the Best Project Construction
 of RCB at chamravottam, Kerala under the Irrigation Category.
 - 11th Greentech Safety Award - 2012 in Construction Sector for
 Outstanding Achievements in Safety Management.
 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.
 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
 Hyderabad                    Alla Ayodhya Rami Reddy
 May 27, 2013                 Executive Chairman
Source : Dion Global Solutions Limited
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