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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 '18    Mar 17

Dear Members,

The Directors have pleasure in presenting their 24th Annual Report on the business and operations of your company for the financial year ended March 31, 2018. The consolidated performance of the company and its subsidiaries has been referred to wherever required.

Financial Results

The standalone and consolidated financial performance of the Company for the financial year ended March 31, 2018 is summarized below:

(Rs. in Millions)

Particulars

Standalone

Consolidated

2017-18

2016-17

2017-18

2016-17

Revenue from operations

13464.37

15245.66

15784.97

17185.99

Other Income

3195.36

2464.91

5249.75

3908.24

Total Income

16659.73

17710.57

21034.72

21094.23

Total Expenditure

15,630.08

16761.00

19923.58

20593.77

Profit/(Loss) before taxes

1029.65

949.57

1111.14

500.46

Tax Expense/(Benefit)

380.14

377.41

453.17

342.25

Profit/(Loss) after Tax

655.63

574.42

325.25

(118.98)

Earnings per equity shares in INR

11.36

10.00

5.00

(1.05)

Minority Interest

-

-

39.34

(58.55)

Share of loss from associate companies

-

-

(332.72)

(277.19)

Review of Performance and state of the company’s affairs Standalone:

During the year under review, members will notice that the standalone revenues have decreased to Rs. 13464.37 Millions from Rs. 15245.66 Millions of the previous year 2016-17, and has profit of Rs. 655.63 Millions as against profit of Rs.574.42 Millions in the previous year 2016-17.

During the year under review, members will notice that the consolidated revenues have also decreased to Rs. 15784.97 Millions from Rs. 17185.99 Millions to the previous year 2016-17.

Consolidated:

The consolidated accounts of your Company broadly represents the EPC business plus the investment that have gone into the 14 wholly owned subsidiaries, 6 Subsidiaries, 2 Jointly Controlled entities and 2 Associates & 3 step down subsidiaries and 10 joint operations of the Company, and the consolidated business represents the consolidation of the EPC business and the integrated infrastructure developer businesses.

In accordance with Regulation 34(2) 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, 2018 is annexed as Annexure - I. 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.

In terms of Section 136 of the Companies Act, 2013 the audited financial statements is open for inspection at the Registered Office of the Company. Copies of this statement may be obtained by the members by writing to the Company Secretary at the Registered Office of the Company.

Dividend and Transfer to Reserves

Your Board of Directors has not recommended any dividend for the financial year 2017-18. No amount is transferred to General Reserve during the financial year 2017-18.

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. 57,19,77,910.

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.

During the period under review, the Share Allotment Committee in its meeting held on 15 December, 2017 has alloted 1,20,00,000 Compulsorily Convertible warrants at a face value Rs.10/- each and at a premium of Rs. 91.00 each to Promoter / Promoter Group and Non-Promoters of the Company.

Directors & Key Managerial Personnel Composition of Board

The Board of Directors of your company is duly constituted. The Board consists of Six Directors comprising of Two Executive Directors, One NonExecutive Director and Three Independent Directors.

Key Managerial Personnel and changes

There are three Key Managerial Personnel appointed in the Company.

Mr. Y R Nagaraja - Managing Director

Mr. I W Vijaya Kumar - Chief Financial Officer

Mr. Akash Bhagadia - Company Secretary (Appointed w.e.f 30.05.2018)

The Board of Directors at its meeting held on May 30, 2018, appointed Mr. Akash Bhagadia, as the Company Secretary and Compliance Officer and has noted the resignation of Mr. Ashish Kulkarni as Company Secretary and Compliance Officer of the company effective from May 02, 2018.

The Board of Directors at its meeting held on 13.08.2018, has noted the resignation of Mr. Krishna Kumar Gangadharan as Director of the company with effect from 13.08.2018

Proposed Appointments / Re-appointments

(i) Change in Designation of Dr. Anantapurguggilla Ravindranath Reddy, (DIN 01729114), as Non-Executive Director of the Company from Independent Director (w.e.f. 13.08.2018).

(ii) Re-appointment of Director of Dr. Anantapurguggilla Ravindranath Reddy, (DIN 01729114), who retires by rotation and being eligible offers himself for re-appointment.

(iii) Approval of the shareholders is being sought for the appointment of Dr. Anantapurguggilla Ravindranath Reddy, (DIN 01729114) as Director (Non- Executive) 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.

(iv) The Board at its meeting held on 30.05.2018 upon recommendation of Nomination and Remuneration Committee and as per written communication from the State Bank of India, Lead banker for nominating Mrs. Mahpara Ali as a nominee director to represent on the Board of the Company on behalf of SBI, had appointed Mrs. Mahpara Ali as the Additional Nominee Director of the Company with effect from May 30, 2018.

Board of Directors has proposed for regularizing the appointment of said Directors in the ensuing Annual General Meeting of the Company.

Number of meetings of the Board

Six (06) Board Meetings were held on 12.06.2017, 28.07.2017, 14.08.2017, 30.09.2017, 08.11.2017 and 09.02.2018 during the year ended on 31st March 2018. The gap between any two Board Meetings is within the period prescribed by the Companies Act, 2013 and the Listing Agreement.

Declarations by Independent Directors

The Company has received declarations from the Independent Directors under Section 149(6) of the Companies Act, 2013 confirming their independence vis-a-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 collaboration 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.

Familiarization Programme for Independent Directors

The Company shall through its Senior Managerial Personnel familiarize the Independent Directors with the strategy, operations and functions of the Company. The Independent Directors will also be familiarized 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 familiarized 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, 2018 and of the profit 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;

Constitution and Composition of Audit Committee

The Audit Committee of the company is duly constituted as per Section 177 of the Companies Act, 2013. Composition and Scope of Audit Committee is provided under the Corporate Governance report annexed herewith.

Corporate Governance

In pursuance of Regulation 17 to 27 read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, entered into with the Stock Exchanges, a separate Report on Corporate Governance along with a certificate from Mr. N V S S Suryanarayana Rao, Practicing 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.

Statutory Auditors

M/s. M V Narayana Reddy & Co., (FRN.No:002370S), Chartered Accountants have signified their willingness to act as Statutory Auditors of the Company for the further period of 5 years commencing from 24®’ Annual General Meeting and to carry out audit for financial year 2018-19 to 2022-23.

The Board recommends their appointment as Statutory Auditors of the Company for the further period of 5 years commencing from 24th Annual General Meeting, subject to the Shareholders approval.

Reporting of Fraud

The Auditors of the Company have not reported any frauds specified under Section 143(12) of the Companies Act, 2013.

Cost Audit Report

Pursuant to the provisions of Section 148 of the Companies Act, 2013 and as per the Companies (Cost Records and Audit) Rules, 2014 and amendments thereof, read with Notifications/Circulars issued by the Ministry of Corporate Affairs from time to time, the Board of Directors at their meeting dated 30.05.2018, appointed M/s. S R and Associates, Cost Accountants as the Cost Auditors of the Company for the financial year 2017-18. The Cost Audit Report will be filed within the stipulated period of 180 days from the closure of the financial year.

A proposal for approval of remuneration of the Cost Auditor for the financial year 2017-18 is placed before the shareholders.

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 - II and link to the CSR policy is available at the website http://ramkyinfrastructure.com.

Secretarial Standards

The Company complies with all applicable secretarial standards.

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. 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. N V S S Suryanarayana Rao, Practicing Company Secretary was appointed to issue Secretarial Audit Report for the financial year 2017-18.

Secretarial Audit Report issued by Mr. N V S S Suryanarayana Rao, Practicing Company Secretary in Form MR-3 for the financial year 2017-18 forms part to this report as ‘Annexure - III’.

Management responses to observations in Secretarial Audit Report:

The following are the responses of the management against the observations made by the Secretarial Auditor:

Management responses to observations in Auditor’s 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, 2018 have been subjected to an audit by the Statutory Auditors of the Company without qualification.

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 SEBI (LODR) Regulations, 2015, 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 Framework

Pursuant to SEBI (LODR) Regulations, 2015, the Board of Directors of the top 100 Listed entities are mandated to constitute a Risk Management Committee. Since the Company is not falling under the above criteria, there is no requirement to constitute such a committee.

However, periodic assessments to identify the risk areas are carried out and management is briefed on the risks in advance to enable the Company to control risk through a properly defined plan. The risks are taken into account while preparing the annual business plan for the year.

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, 2018, 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 year were in the ordinary course of business of the company and were on an arm’s 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

Particulars of every contract or arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto shall be disclosed in Form No. AOC-2 as ‘Annexure-IV’ to this report.

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.

Material Subsidiary Policy

The Company has adopted a policy for determining material subsidiary, in line with the requirements of the Listing Agreement. The Policy on Material Subsidiary is available on the website of the Company at http:// ramkyinfrastructure.com

Remuneration Policy

The Board has on the recommendation of Nomination and remuneration Committee approved a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The detailed remuneration policy is available on the website of the Company at http://ramkyinfrastructure.com

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 NIL

The ratio of the remuneration of each Director to the median employee’s remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are enclosed in Annexure V and forms part of 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 placed on the website of the company viz: http://ramkyinfrastructure.com.

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 relevant 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.

Internal Audit & Controls

The Company has appointed M/s. J K M R & Co, as Internal Auditors for the financial year 2017-18

Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

Internal Financial Control Systems

The Company has adequate Internal Financial Controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statues, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. It has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

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.

Listing with Stock Exchanges

The equity shares of your Company are listed on the National Stock Exchange and the Bombay Stock Exchange, Mumbai. The Company has been complying with the regulations as prescribed under SEBI (LODR) Regulations, 2015.

The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 to NSE and BSE where the Company’s Shares are listed.

Human Resources

Your Company treats its “Human Resources” as one of its most important assets.

Your Company continuously invests in attraction, retention and development of talent on an ongoing basis.

A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement

Acknowledgements

Your Directors wish to express their appreciation of the support and cooperation 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

Sd/- Sd/-

A AYODHYA RAMI REDDY Y R NAGARAJA

Whole Time Director Managing Director

DIN: 00251430 DIN: 00009810

Place: Hyderabad

Date: 13-Aug-2018

Source : Dion Global Solutions Limited
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