Board's Report To The Members Raunaq International Limited Your Directors have pleasure in presenting the 50th Annual Report of your Company together with the Audited Standalone and Consolidated Financial Statements and the Auditors Report thereon for the Year ended 31st March, 2015. Dividend & Transfer to Reserves The Board is pleased to recommend a dividend of Rs. 1.00 per equity share of Rs. 10/-each for the financial year 2014-2015. The total payout will be Rs. 40.24 lacs, inclusive of dividend tax and surcharge thereon. Also the Directors have proposed to transfer an amount of Rs. 100 lacs to General Reserve. Business Operations During the year under review, the sales and other income of the Company on Standalone basis was Rs. 8,140.37 Lacs against Rs. 14,110.90 Lacs in the previous year. The profit after tax (PAT) is Rs.424.02 Lacs against Rs. 602.53 Lacs in the last year. The sales and other income of the Company on Consolidated basis in the year 2014-2015 was Rs. 9947.07 Lacs against Rs. 15,279.25 Lacs in the previous year and the profit after tax (PAT) is Rs. 212.67 Lacs against Rs. 326.63 Lacs in the last year. Future Outlook The Company during the year successfully completed a challenging project of 80 km raw water cross country piping project at Udaipur for Hindustan Zinc Ltd. in record time of 15 months. During the course of the FY 2014-15 the Company has successfully bid and won large value projects such as Station Piping & Fuel Handling System for Gadarwara Thermal Power Project for National Thermal Power Corporation Ltd. The project is under execution and expected to complete by the end of year 2017. The Company is executing two more projects for National Thermal Power Corporation Ltd., which are time bound projects which include Station Piping Package for Nabinagar Super Thermal Power Project and Comprehensive & Integrated Seepage Water Recirculation System Package for Indira Gandhi Super Thermal Power Project. This seepage water project is the first of a kind project which company will be executing this year and it is another challenging task for the Company. The Company is also working for two individual projects for Bajaj Infra Development Corporation Ltd. The first project contains the erection of Raw Water System Package for Lalitpur Super Thermal Power Project at Lalitpur (UP). The second project exceeds the first in terms of value and pertains to the establishment of CW Piping Package for Lalitpur Super Thermal Power Project. The Company is also executing LP Piping Package for Lanco Infra Ltd. and Indian Power Corporation Ltd. The Company entered into the FY 2014-15 with the order book of around Rs. 134 Crores and the order book for FY 2015-16 is Rs. 135 Crores. Consolidated Financial Statements As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements have been prepared in accordance with Accounting Standard-21 issued by the Institute of Chartered Accountants of India and have been provided in the Annual Report. These Consolidated Financial Statements provide financial information of your Company and its subsidiary as a single economic entity. Management Discussion and Analysis A detailed analysis of the Company's operations in terms of performance in markets, business outlook, risks and concerns forms part of the Management Discussion and Analysis, a separate section of this report. Directors' Responsibility Statement Pursuant to Section 134(3)(c) of the Companies Act, 2013, your Directors 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) the directors had selected such accounting policies and applied them consistently and 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 and loss of the Company for the period ended on that date; (c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Related Party Contracts and Arrangements The particulars of the undergoing contracts or arrangements of the Company with related parties during the period under review referred to in Section 188(1) of the Companies Act, 2013 were in ordinary course of business and on arm's length basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the related party transaction policy of the Company. The said policy as approved by the Board in terms of provisions of Clause 49 of the Listing Agreement is available on the website of the Company i.e. www.raunaqinternational.com <http://www.raunaqinternational.com> under the link <http://www.raunaqinternational.com/pdf/related-party->transaction-policy.pdf The prescribed form AOC-2 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure-"A" to this report. Particulars of Loans, Guarantees or Investment Details of Loans or guarantee given or security provided has been adequately disclosed in the financial statements in terms of provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014. Directors In accordance with the provisions of the Act and the Articles of Association of your Company, Dr. Sanjeev Kumar and Mr. Gauatam Mukherjee, Directors retire by rotation at the ensuing Annual General Meeting. Therefore, in terms of Section 149 of the Companies Act, 2013, it has been proposed to appoint Dr. Sanjeev Kumar and Mr. Gautam Mukherjee as Non Executive Independent Directors for a period of 5 (Five) Years upto the conclusion of the 55thAnnual General Meeting (AGM) of the Company in the Calendar year 2020 at the ensuing AGM of the Company. The Board of Directors of the Company appointed Ms. Seethalakshmi Venkataraman as an Additional Director (Woman Director) on 28th March, 2015 till the conclusion of forthcoming Annual General Meeting. Therefore, in terms of Section 149 of the Companies Act, 2013, it has been proposed to appoint Ms. Seethalakshmi Venkataraman as Non Executive Independent Director for a period of 5 (Five) Years upto the conclusion of the 55th Annual General Meeting (AGM) of the Company in the Calendar year 2020 at the ensuing AGM of the Company. The Company has received notice under Section 160 of the Companies Act, 2013 from member(s) of the Company, proposing the candidature for the office of Director for the above Directors. During the year under review, the members approved the appointment of Mr. V.K. Pargal and Mr. Satya Prakash Mangal as Independent Directors. The brief resume of the Directors proposed to be appointed is given in the notice calling the Annual General Meeting. Number of Meetings of the Board During the financial year 2014-15, Five (5) Board Meetings were held on the following dates. The gap between any two meetings was not more than one hundred twenty days as mandated under the provisions of Section 173 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges:- 30thMay, 2014; 31 stJuly, 2014; 1 3th November, 2014; 1 0th February, 2015; and 28thMarch, 2015 Independent Directors In terms of provisions of Section 149(7) of the Companies Act, 2013, all the Independent Directors of the Company have furnished a declaration to the Compliance Officer of the Company at the meeting of the Board of Directors held on 30th May, 2015 stating that they fulfill the criteria of Independent Director as prescribed under Section 149(6) of the Companies Act, 2013 and are not being disqualified to act as an Independent Director. In terms of Clause 49 of the Listing Agreement, the Company has adopted a familiarization programme for Independent Directors. The details of the said programme is available on the website of the Company i.e. www.raunaqinternational.com <http://www.raunaqinternational.com> under the link http: //www.raunaqinternational.com/pdf/familarisation- <http://www.raunaqinternational.com/pdf/familarisation->programme.pdf. Policy on Director's Appointment and Remuneration In terms of provisions of Section 178 of the Companies Act, 2013 read with revised Clause 49 of the Listing Agreement, a policy relating to remuneration for the Directors, Key Managerial Personnel and other employees has been adopted by the Board of Directors of the Company in pursuance of its formulation and recommendation by the Nomination and Remuneration Committee thereby analyzing the criteria for determining qualifications, positive attributes and independence of a Director. The said policy is annexed as Annexure-"B" to this report and is also available on the website of the Company i.e. www.raunaqinternational.com <http://www.raunaqinternational.com> under the link <http://www.raunaqinternational.com/pdf/nomination-and->remuneration-policy.pdf. Evaluation Process The Board of Directors of the Company has established a framework for the evaluation of its own performance and that of its committees and individual Directors of the Company. The certain parameters covering the evaluation of the Chairman, Executive Directors and Independent Directors have been fixed by the Board on the basis of which the evaluation is being carried out on annual basis in terms of provisions of the Companies Act, 2013. Key Managerial Personnel The Board of Directors of the Company has designated following Directors/Officials of the Company as Key Managerial Personnel (KMP) of the Company w.e.f. 30th September, 2014 in terms of provisions of Section 203 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges: 1. Mr. Surinder P. Kanwar Chairman & Managing Director 2. Mr. Sachit Kanwar Joint Managing Director 3. Mr. Rajan Malhotra Chief Executive Officer 4. Mr. Shalesh Kumar Chief Financial Officer 5. Mr. Kaushal Narula Company Secretary No Key Managerial Personnel (KMP) of the Company has resigned during the financial year ended 31st March, 2015. Disclosures under Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 Details pertaining to remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201 4 are enclosed as Annexure-"C" to this report. Particulars of Employees Information regarding employees in accordance with the provisions of Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure-"D" to this Report. Risk Management The Company has in place mechanisms to inform Board Members about the risk assessment and minimization procedures and periodical review to ensure that executive management controls risk by means of a properly defined framework. A detailed note on Risk Management is given in the Management Discussion and Analysis section forming part of this Report. Corporate Social Responsibility Pursuant to the approval of the Board of Directors of the Company, a Corporate Social Responsibility (CSR) Committee has been constituted in terms of provisions of Section 135 of the Companies Act, 2013. The CSR Committee of the Company has also formulated a CSR policy containing the areas wherein the Company proposes to spend the share of its profits as prescribed under Section 135 of the Companies Act, 2013 and the said policy has been approved by the Board of Directors of the Company thereby directing the CSR Committee to execute the CSR initiatives. As per the provisions of the said Section, the amount of Rs. 16.34 lacs was required to be spent on CSR activities by the Company during the year, however, considering the performance for the year, the Company has not spent the required funds on CSR activities. The report on CSR activities in terms of provisions of Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014 is enclosed as Annexure-"E" to this report. CSR Committee The CSR Committee comprises of Mr. Surinder P. Kanwar, Mr. Sachit Kanwar, Mr. P.K. Mittal and Mr. Satya Prakash Mangal. Audit Committee The Audit Committee comprises of Dr. Sanjeev Kumar, Mr. V.K. Pargal, Mr. P.K. Mittal and Mr. Satya Prakash Mangal. Internal Complaints Committee for Prevention of Sexual Harassment Pursuant to Section 21 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 read with Rule 14 of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted Internal Complaints Committee where any grievance of sexual harassment at workplace can be reported. The Company has also adopted a policy on Prevention of Sexual Harassment at workplace. The objective of the policy is to provide its women employees, a workplace, free from harassment/discrimination and every employee is treated with dignity and respect. The said policy is available on the website of the Company i.e. www.raunaqinternational.com <http://www.raunaqinternational.com> under the link http: //www.raunaqinternational.com <http://www.raunaqinternational.com> /pdf/policy-on-prevention-of-sexual-harassment-ril.pdf. Subsidiaries/Joint Ventures/Associate Companies Your Company has a 100% wholly owned subsidiary, Xlerate Driveline India Limited (XDIL). Xlerate Driveline India Limited (XDIL) is engaged in the manufacturing of automotive components having its Industrial Unit at Faridabad, Haryana. As on date, the Company holds 1,18,77,038 (One Crore Eighteen Lakhs Seventy Seven Thousand Thirty Eight) Equity Shares of Rs. 10/- (Rupees Ten) each of XDIL amounting to Rs. 11,87,70,380/- (Rupees Eleven Crores Eighty Seven Lakhs Seventy Thousand Three Hundred Eighty Only) as an investment directly/through its nominees which is equivalent to 100% paid up capital of XDIL. Deposits During the year under review, the Company did not accept any deposits. However, the Unclaimed Final Dividend for the Financial Year 2007-08 is proposed to be transferred into the "Investor Education and Protection Fund" on 27thAugust, 2015 upon completion of seven years from the date of transfer of said Dividend into the unclaimed Dividend Account. Auditors The Statutory Auditors, M/s. V.P. Jain & Associates, Chartered Accountants (Regn No. 015260N), had been appointed as Statutory Auditors of the Company in the 49thAnnual General Meeting held on 29thAugust, 2014 for a period of 3 (Three) years in terms of provisions of Section 139 of the Companies Act, 2013 to hold office from the 49thAGM to the third consecutive Annual General Meeting from the 49thAGM in the Calendar year 2017 (subject to ratification by the members at every Annual General Meeting). Therefore, the consent of members for ratification of appointment of Statutory Auditors to hold office from the ensuing Annual General Meeting of the Company till the next Annual General Meeting of the Company in calendar year 2016 is being sought in the ensuing Annual General Meeting. Report on Financial Statements The report of M/s V.P. Jain and Associates (ICAI Registration No. 015260N), Chartered Accountants, the Statutory Auditors of the Company on the financial statements of the Company for the year ended 31st March, 2015 is annexed to the financial statements in terms of provisions of Section 134(2) of the Companies Act, 2013. The observations of the Auditors in their report are self-explanatory and/or explained suitably in the Notes forming part of the Financial Statements. The report of the Statutory Auditors does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board. Secretarial Audit The Board has appointed Mr. Ashok Tyagi, Practicing Company Secretary as Secretarial Auditor for the Financial Year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report of the Company for the Financial Year ended 31st March, 2015 in the prescribed form MR-3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure-"F" to this report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark which needs any explanation or comment of the Board. Internal Financial Controls and their Adequacy Raunaq International has a proper and adequate system of internal financial controls which includes the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. Corporate Governance The Company is committed to maintain the highest standards of Corporate Governance. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of this Report. The requisite Certificate of Compliance from Statutory Auditors, M/s V.P. Jain & Associates, confirming compliance with the conditions of Corporate Governance, is attached to this Report. Vigil Mechanism In terms of provisions of Section 177 of the Companies Act, 2013, the Company has established an effective mechanism called Vigil Mechanism (Whistle Blower Mechanism). The mechanism under the Policy has been appropriately communicated within the organisation. The purpose of this policy is to provide a framework to promote responsible whistle blowing by employees. It protects employees wishing to raise a concern about serious irregularities, unethical behaviour, actual or suspected fraud within the Company by reporting the same to the Audit Committee. Protected disclosure can be made by the whistle blower in a closed and secured envelope or sent through e-mail to the Compliance Officer. During the year under review, no employee was denied access to the Audit Committee. The policy on vigil mechanism is available on the website of the Company i.e. www.raunaqinternational.com <http://www.raunaqinternational.com> under the link <http://www.raunaqinternational.com/pdf/policy-on-vigil->mechanism.pdf. Reconciliation of Share Capital Audit As per the directive of the Securities and Exchange Board of India (SEBI), M/s A.K. Jha & Associates, Practising Company Secretaries, New Delhi undertakes a Reconciliation of Share Capital Audit on a quarterly basis. The Audit is aimed at reconciliation of total shares held in CDSL, NSDL and in physical form with the admitted, issued and listed capital of the Company. The Reconciliation of Share Capital Audit Reports as submitted by the Auditor on quarterly basis were forwarded to the BSE Limited (BSE), Mumbai and Delhi Stock Exchange Limited (DSE), New Delhi where the original shares of the Company are listed. Listing of Shares The Equity shares of the Company are listed on the BSE Limited (BSE), Mumbai and Delhi Stock Exchange Limited, New Delhi . Disclosures under Section 134 of the Companies Act, 2013 Except as disclosed elsewhere in the Annual Report, there have been no material changes and commitments, which can affect the financial position of the Company between the end of financial year and the date of this report. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings & Outgo The information in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the Company during the year under review. The particulars with respect to foreign earnings and outgo during the year under review are as follows:- Extract of Annual Return In terms of provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of the Annual Return of the Company in Form MGT-9 of the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure- "G" to this report. Court/Tribunal Orders There were no instances of any significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future. Acknowledgements The Board of Directors gratefully acknowledge the continued co-operation, trust and support of the shareholders and would like to place on record its appreciation for the dedicated services rendered by the Employees at all levels. The Directors further express their gratitude to the Bankers, Customers and Sub-vendors and other associates for co-operation and confidence reposed by them in the Company. For and on behalf of the Board of Directors Surinder P. Kanwar Chairman & Managing Director Place: New Delhi Dated: May 30, 2015 |