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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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Download Annual Report PDF Format 2014 | 2013 | 2012 | 2011 | 2010
Directors Report Year End : Mar '14    « Mar 13
Dear Members,
 
 The Directors have pleasure in presenting their 20th Annual Report on
 the business and operations of your company for the financial year
 ended March 31, 2014.
 
 FINANCIAL RESULTS
 
 The standalone financial performance of the Company for the financial
 year ended March 31, 2014 is summarized below:
 
                                                         (Rs.in Crores)
 
 Particulars                                        2013-14     2012-13
 
 Gross Turnover                                     1755.09     3038.62
 
 Other Income                                         22.94       32.19
 
 Total Income                                       1778.03     3070.81
 
 Total Expenditure                                  2401.46     2980.18
 
 profit/(Loss) before Inter-                       (382.91)      302.24
 est, Depreciation & Tax
 
 Profit/(Loss) before taxes                        (623.43)       90.64
 
 Tax Expense/(Benefit)                             (191.32)       30.71
 
 Profit/(Loss) after Tax                           (432.11)       59.93
 
 Balance brought forward                             541.71      481.78
 
 from previous year       
 
 Profit available for appro-                         109.60      541.71
 priation
 
 Balance carried to Balance Sheet                    109.60      541.71
 
 REVIEW OF PERFORMANCE
 
 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 declined by 42.24% to Rs. 1755.09 crores from Rs. 3038.62 crores
 of the previous year 2012-13, while the Loss before Tax was at Rs.
 623.43 crores from profit before tax of Rs. 90.64 crores achieved in
 the previous year 2012-13.
 
 The loss after tax was at Rs. 432.11 crores from profit after tax of
 Rs. 59.93 crores reported in the previous year. The earnings per share
 was Rs. (75.55) as compared to Rs. 10.48 in the previous year
 2012-13.
 
 DIVIDEND
 
 As there are no profits during the year, the Board of Directors have
 not recommended any dividend for the FY 2013-14.
 
 TRANSFER TO RESERVES
 
 During the financial year under review, there were no transfers to
 Reserves.  
 
 SHARE CAPITAL
 
 During the period under review there is no change in the Authorised and
 paid up capital of the Company.
 
 DIRECTORS
 
 The following person was appointed as Additional Director of the
 Company during the year under report:
 
 S.No  Name of the Director           Date of Appointment
 
 1     Mr A.Ayodhya Rami Reddy        June 20, 2014
 
 Proposed Appointments:
 
 The following appointments to the Board are proposed:
 
 Approval of the shareholders is being sought for the appointment of
 Dr.Archana Niranjan Hingorani, Director of the Company, who retire by
 rotation at the ensuing Annual General Meeting of the Company and being
 eligible offer herself for re-appointment in accordance with the
 provisions of the Companies Act and pursuant to Articles of Association
 of the Company.  Your Board recommends her re- appointment.
 
 Mr.Ayodhya Rami Reddy was inducted as 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 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
 
 The Board of Directors at their meeting held on 20th June ,
 2014,subject to the approval of the shareholders at the ensuing Annual
 General Meeting, considered and approved the appointment of Mr.
 A.Ayodhya Rami Reddy as the Executive Chairman of your Company for a
 term of three (3) years commencing from20 June 2014 to 19 June 2017.
 
 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, it is proposed to appoint
 Dr.A.G. Ravindranath Reddy, Mr. Rajasekhara Reddy, Mr. V. Murahari
 Reddy and Mr. V. Harish Kumar as Independent Directors of your Company
 up to 5 (five) consecutive years up to on 31st March, 2019.
 
 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. Kamlesh Shivji Vikamsey has expressed his inability to continue on
 the board due to his elevation as audit committee advisory chairman of
 UNDP, Newyork and to comply with the limit in no of directorship as
 provided u/s 165 and submitted his resignation vide letter dated 14
 June 2014.The board of directors at their meeting held 20 June 2014
 have accepted the same and placed on record its sincere appreciation
 for the services rendered to the company and the contribution made both
 during his tenure as audit committee chairman and chairman of the
 company
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 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, 2014 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.
 
 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 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.
 
 MANAGEMENT DISCUSSION & ANALYSIS
 
 A report on Management Discussion & Analysis forms part of this Annual
 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 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, 2014 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.
 
 AUDITORS
 
 M/s. Visweswara Rao & Associates, Chartered Accountants, Hyderabad &
 M/s B S R & Co.,LLP Chartered Accountants, Hyderabad, the Joint
 statutory Auditors are the retiring auditors at this AGM and the Joint
 statutory auditors expressed their intention not to be re appointed at
 the ensuring Annual General Meeting. The Board places on record its
 appreciation of the services rendered by the Joint Statutory Auditors.
 
 M/s Walker Chandiok & Co.LLP, Chartered Accountants bearing ICAI
 Registration No. (001076N/N500013) 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 sixth Annual General
 Meeting of the Company held thereafter, subject to ratification of the
 appointment by the members at every AGM held after the ensuing 20th
 Annual General Meeting As required under Section 139 of the Companies
 Act, 2013, the Company has obtained a written consent from M/s Walker
 Chandiok & Co.LLP, 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 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.
 
 COST AUDIT COMPLIANCE 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 2013 - 14
 from Mr. R Srinivasa Rao, Practicing Cost Accountant.
 
 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.
 
 STATUTORY INFORMATION
 
 A statement containing the Particulars of employees who were in receipt
 of remuneration of Rs. 60,00,000/- or more per annum or Rs.
 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 company.
 
 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 Outgo3
 
 In accordance with the provisions of Section 217(1)(e) of the Companies
 Act, 1956, 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
 
 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, 2014 have been subjected to an
 audit by the Statutory Auditors of the Company and a qualified report
 has been issued by them thereon 
 
 Recognition of Deferred tax Asset :
 
 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 realisation of
 reasonable margin on existing contracts on hand, the Management is
 confident of the virtual certainty of sufficient future taxable income
 for realisation of deferred tax assets as enunciated in Accounting
 Standard 22 Accounting for Taxes on Income (AS 22).
 
 Emphasis Matters - Standalone & Consolidated financials 
 
 Search & Seizure:
 
 During the previous year a search and seizure operation under Section
 132 of the Income Tax Act, 1961 was carried out by the Income Tax
 Authorities on the Company''s premises. At the time of search, the
 Company was not able to substantiate some transactions to the
 satisfaction of the Income Tax Department. While the transactions can
 be substantiated, to avoid dispute with the Income Tax department, the
 Company has accepted for additional disallowance of expenses and filed
 revised returns for the respective previous years with the Income Tax
 Department for amount contended.  The resulting tax exposure of Rs.
 10.78 crores (including penal interest of Rs. 2.84 crores) has been
 disclosed as tax expense relating to prior years in the audited
 standalone financial statements.
 
 During the previous year a search and seizure operation under Section
 132 of the Income Tax Act, 1961 was carried out by the Income Tax
 Authorities on the Company''s premises and survey on its subsidiaries
 premises. At the time of search, the Group was not able to substantiate
 some transactions to the satisfaction of the Income Tax Department.
 While the transactions can be substantiated, to avoid dispute with the
 Income Tax department, the Group has accepted for additional
 disallowance of expenses and filed revised returns for the respective
 previous years with the Income Tax Department for amount contended. The
 resulting tax exposure of Rs. 12.84 crores (including penal interest
 of Rs. 3.92 crores) has been disclosed as tax expense relating to
 prior years in the consolidated financial statements.  
 
 Contracts pursued on account of foreclosure :
 
 During the year ended 31 March 2014, an amount of Rs. 77.63 crores
 (including amount pertaining to advances, retention money, contract
 work- in-progress and performance bank guarantees invoked) is
 receivable from customers against the contracts not been pursued on
 account of foreclosure by the Company/ disputes with customers. 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.
 
 Attachment order of Enforcement Directorate of certain assets of, M/s
 Ramky Pharma City (India) Limited (RPCIL) :
 
 During the previous year Ramky Pharma City (India) Limited
 (RPCIL) (a Subsidiary of Ramky Infrastructure Limited), had
 received a provisional attachment order under Section 5 (1) of the
 Prevention of Money Laundering Act, 2002 (''the Act'') from Enforcement
 Directorate (ED) dated 7 January 2013 for attachment of
 assets/properties valued at Rs. 133.74 crores comprising Land and
 facilities valuing Rs. 130.54 crores and mutual funds of Rs. 3.20
 crores, which during the current quarter has been transferred in name
 of ED. The Adjudicating Authority (the AA) has through his order
 dated 6 June 2013 confirmed the provisional attachment order. On 24
 July 2013 the Company has filed an appeal before the Appellate Tribunal
 contesting the order passed by the AA. In the meantime the office of
 Joint director, Enforcement Directorate, Hyderabad Zonal office had
 served a notice dated 3 October 2013 for taking possession of the
 referred properties under Section 8(4) of the Act. RPCIL has contested
 the said Order before the Appellate Tribunal. The Appellate Tribunal
 has considered the appeal and stayed the proceeding till the next date
 of hearing. 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. Since the
 mutual funds has been transferred in the name of ED, same has been
 classified under other current assets in consolidated financial
 statements 
 
 other observations - Statutory Compliances:
 
 Delays caused in remitting the statutory dues towards TDS - Income Tax;
 Service Tax, VAT, Provident Fund, ESI and Profession Tax to the
 concerned authorities due to liquidity issues with the Company.
 
 During the year the Company has delays repayment of principal and
 interest to various banks aggregating to Rs. 98.89 Crores. The delay
 in repayment of principal and interest ranges from 1 to 9 to 189 days.
 The letter of Credit amounting to Rs. 13.00 Cr to Axis Bank and Rs.
 1.60 Cr to Punjab National Bank were subsequently paid. The delays were
 caused mainly due liquidity issues within the Company.
 
 Inventory and Fixed Assets
 
 Company is engaging external agencies for verification of Inventory and
 Fixed assets on quarterly basis, to improve the record keeping and
 processes adopted in this regard.
 
 Internal audit:
 
 In line with change of statutory auditors, new Internal audit firm is
 engaged for improving the internal audit reporting and emphasis on the
 improvements required.
 
 CORPORATE SOCIAL RESPONSIBILITY:
 
 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.
 
 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
 
 Hyderabad                                      Alla Ayodhya Rami Reddy
 August 14, 2014                                     Executive Chairman
                                                        (DIN: 00251430)
Source : Dion Global Solutions Limited
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