| Dear Member,
We have pleasure in presenting the 29th Annual Report of the Company
along with the Audited Financial Statements of Account and Auditor's
Report thereon for the year ended March 31, 2015.
COMPANY'S PERFORMANCE
The performance of the Company during the year was not satisfactory as
the operations at the plant were stalled due to absence of need base
working capital. Your Company's performance during the financial year
2014-15 is summarized below:
(Rs. In Lakh)
PARTICULARS Current Year Previous Year
ended ended
on 31-03-2015 on 31-03-2014
Income
Revenue from operations 194.53 3721.39
Other Income 2.32 54.46
Total Revenue 196.85 3775.85
Expenses
Cost of material consumed - 725.78
Purchase of traded goods 109.95 2439.7
Change in inventories of finished
goods and work-in-progress 67.51 42.17
Employee benefits expenses 76.77 173.56
Other expenses 129.56 186.1
Prior Period Items and tax 0.1 2.96
Total Expenses 383.89 3570.27
(Loss)/profit before depreciation,
finance cost and tax (187.04) 205.58
Finance Cost 538.07 521.97
(Loss)/profit after finance cost
but before depreciation and tax (725.11) (316.39)
Deprecation 277.02 278.2
(Loss)/profit after depreciation
but before tax (1002.13) (594.59)
Extraordinary item 24.07 -
Tax expense
a. Current Tax - -
b. Minimum alternate tax entitlement - -
Net (Loss)/ Profit for the year (978.06) (594.59)
DIVIDEND
In the view of Losses suffered by the company, the Directors regret
their inability to recommend dividend for the year under review.
PRODUCTION & SALES REVIEW
During the year under review, your company had registered Rs. 194.53
Lakhs as revenue from operations as compared to Rs. 3721.39 Lakh showing
a decrease of Rs. 3526.86 Lakh over previous year because the operations
at the Plant were stalled and only the existing stock of finished goods
were sold off to generate revenue. During this tenure we have been
continuously approaching the Bank to provide the need based working
capital on the basis of orders in hand. Your Company also wrote several
letters to the Bank but all in vain as till date we did not get any
appropriate response from them. We must admit that the Board of
Directors have been very supportive during this while and have
continuously made efforts to revive the company. They have been
instrumental in new initiatives and in facilitating new projects in
consonance with the objectives of the company, which could contribute
towards increase of revenue from the mainstream business activities.
BUSINESS STRATEGY
Our strategic objective is to build a sustainable organization that
remains relevant to the agenda of our client while generating
profitable growth for our investor. We are working on forging such
alliances that will not only complement our core competencies but also
lead us to growth trajectory. We will periodically assess the
effectiveness of our organization structure and process to optimize it
for alignment with our strategic objectives and agility. We constantly
monitor and optimize various operational parameters such as cost and
utilization of resources, distribution of employees, cost of operations
and efficiencies of scale.
PROCUREMENT AND DISTRIBUTION
Procurement department purchases raw cotton and processes into cotton
yarn for the weaving division. Entire yarn production is consumed
internally for the manufacturing of grey fabrics and combed yarn has to
be purchased from other spinners.
Marketing department, manages order books, sales and collections.
TECHNOLOGY AND NEW PRODUCT DEVELOPMENT
Management's endeavour is to maximise the quality and quantity of
output from the spinning and weaving department. All efforts are
focused on processing higher margin products with improved efficiency.
The focus of the company has been on Exports and Technical Textiles
(including products for institutional sector). Our products are well
accepted in International Market as well as in Defence, Paramilitary
forces, Steel and Oil Companies. RTL is planning to leverage the market
for safety and security solutions.
RESOURCES UTILISATION
Fixed Assets: The Fixed assets as at 31st March, 2015 were Rs. 6103.73
Lakh.
Current Assets: The current assets as at 31st March, 2015 were Rs.
4359.05 Lakh as against Rs. 4440.48 Lakhs in the previous financial
year. Inventory level was at Rs. 666.73 Lakh as compared to the
previous year level of Rs. 734.24 Lakh.
OPERATIONS
Manufacturing Capacities: A state of the art manufacturing facility in
Jagdishpur, District Amethi (UP).
Spinning: Current capacity of 11,520 spindles, 12 ring frames, 2 open
end and 432 rotors backed by all prepartories from Reiter.
Weaving: There are 72 PU 7100 SulzerRueti Shuttle-less Projectile Looms
backed by adequate prepatory. Plant is equipped with Benninger Warping
machine and Sucker Muller high production Sizing Machines.
SUBSIDIARY
As on March 31, 2015, the company has no subsidiary company.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as
stipulated under Clause 49 of the listing agreement with the Stock
Exchanges in India is presented in a separate section forming part of
the Annual Report.
DEPOSITS
The company did not accept any deposits from the public during the
financial year. Hence, no information is required to be appended to
this report.
MEETINGS OF THE BOARD
The Board met four times during the financial year, the details of
which are provided in Corporate Governance Report that forms part of
this Annual Report. The intervening gap between any two meetings was
within the time gap prescribed by the Companies Act, 2013 as well as
clause 49 of the Listing agreement.
INDUCTION OF DIRECTOR
On the recommendation of the Nomination and Remuneration Committee, the
Members appointed Mr. Shyam Sunder Madan as the Independent Director of
the company w.e.f. 18th December 2014. We thank the shareholders for
their support in confirming the appointment of Mr. Shyam Sunder Madan
at the AGM of the company held on December 18, 2014. Further, the
shareholders via postal ballot approved the appointment of Mr. Surender
Malik as Independent director w.e.f. April 24, 2015. We thank the
shareholders for their support in confirming his appointment.
RETIREMENTS AND RESIGNATIONS
During the year under review, Mr. S. B. Mohapatra, had resigned from
the post of Independent Director w.e.f. November 10, 2014. The Board
placed on record its appreciation for the services rendered by Mr. S.
B. Mohapatra during his tenure with the Company.
Mr. Umesh Kumar Khaitan retired at the Annual General Meeting of the
company held on December 18, 2014 and did not seek re-appointment. The
Board thanked him for providing valuable guidance during the tenure of
his services.
The Companies Act, 2013 provide for appointment of independent
director. Section 149(10) of the Companies Act 2013 (effective 1st
April 2014) provides that independent directors shall hold office for a
term of up to five consecutive years on the board of the company and
shall be eligible for re-appointment after passing a special resolution
by the shareholders of the company.
Sub- section (11) states that no independent director shall be eligible
for re-appointment for more than two consecutive terms of five years.
Sub-section (13) states that the provision of retirement by rotation as
defined in sub-sections (6) and (7) of section 152 of the act shall not
apply to such independent directors.
The term of appointment of Mr. R Shankar will cease at the ensuing
Annual General Meeting. The Board thanks him for providing valuable
guidance during the tenure of his services.
Ms. Pooja Sabharwal, had resigned from the post of Joint Managing
Director w.e.f. April 01, 2015. However, she would continue to be
associated with the company in the capacity of 'Non- executive
Director'.
DECLARATION BY INDEPENDENT DIRECTORS
The Company had also received declarations from all the Independent
Directors of the Company confirming that they meet with the criteria of
independence as prescribed both under sub-section (6) of Section 149 of
the Companies Act, 2013 and under Clause 49 of the Listing Agreement
with the Stock Exchanges.
The Company policy is to have an appropriate mix of executive and
independent directors to maintain the independence of the board and
separate its function of governance and management. The board
periodically evaluate the need for change in its composition and size.
The Policy for selection of Directors and determining Directors
independence and Remuneration Policy for Directors, Key Managerial
Personnel and other employees are attached as Annexure I and Annexure
II respectively.
BOARD EVALUATION
Clause 49 of the listing agreement mandates that the board will monitor
and review the Board evaluation framework. The Companies Act, 2013
states that a formal annual evaluation needs to be done by the board of
its own performance and that of its committees and individual
directors. Schedule IV of the Companies Act, 2013 states that the
performance evaluation of the independent directors will be done by the
entire board except the director being evaluated.
The Company has devised a Policy for performance evaluation of
Independent Directors, Board, Committees and other individual
Directors, which includes criteria for performance evaluation of the
non-executive directors and executive directors. On the basis of the
Policy for performance evaluation of Independent Directors, Board,
Committees and other individual Directors, a process of evaluation was
followed by the Board for its own performance and that of its
Committees and individual Directors.
FAMILIARATION PROGRAMME FOR INDEPENDENT DIRECTORS
The details of programmes for familiarization of Independent Directors
with the Company, their roles, rights, responsibilities in the Company,
nature of the industry in which the Company operates, business model of
the Company and related matters are put up on the website of the
Company at the link: http://www.runeecha.eom//Corporate-Govemance.html
COMMITTEE OF THE BOARD
Currently, the board has four committees: the audit committee,
nomination and remuneration committee, stakeholders relationship
committee and risk management committee. A detailed note on the Board
and its committee is provided under the Corporate Governance Report
that forms part of this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 134(3) (c) OF THE
COMPANIES ACT, 2013
Your Directors confirm that:
1. In the preparation of the annual accounts for the year ended March
31, 2015, the applicable accounting standards read with requirements
set out under Schedule III to the Act, have been followed and there are
no material departures from the same;
2. The Directors have 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 March 31, 2015 and of the profit of the Company
for the year ended on that date;
3. The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding the assets of the Company and
for preventing and detecting fraud and other irregularities;
4. The Directors have prepared the annual accounts on a 'going
concern' basis;
5. The Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and are operating effectively; and
6. The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are
adequate and operating effectively.
CORPORATE GOVERNANCE
The Company is committed to maintain the highest standards of corporate
governance and adhere to the corporate governance requirements set out
by SEBI. The report on Corporate Governance as stipulated under the
Listing Agreement forms an integral part of this Report. The requisite
certificate from the Auditors of the Company confirming compliance with
the conditions of corporate governance is attached to the report on
Corporate Governance.
CERTIFICATE ON CORPORATE GOVERNANCE
As required by clause 49 of the Listing Agreement, certificate on
Corporate Governance is enclosed as Annexure III to the Board Report.
PARTICULARS OF EMPLOYEES
There is no such employee in the Company who is drawing remuneration in
excess of limits laid down u/s Section 197(12) of the Companies Act,
2013 read with Rules 5(1) of the Companies (Appointment and
remuneration of Managerial Personnel) Rules, 2014and therefore, no such
particulars are furnished herewith.
VIGIL MECHANISM
The Vigil Mechanism of the Company, which also incorporates a whistle
blower policy in terms of the Listing Agreement, comprises senior
officers of the Company. A whistle blower through an e-mail, or letter
can make protected disclosures to the Compliance Officer or the
Chairman of the Audit Committee.
The Policy on vigil mechanism and whistle blower policy may be accessed
on the Company's website at the link: http://
www.runeecha.com/Corporate-Governance.html
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company
during the financial year with related parties were in the ordinary
course of business and on an 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 policy of the Company on materiality of related party
transactions.
The Policy on materiality of related party transactions and dealing
with related party transactions as approved by the Board may be
accessed on the Company's website at the link:
http://www.runeecha.eom//Corporate-Govemance.html
Your Directors draw attention of the members to Note 34 to the
financial statement, which sets out related party disclosures.
RISK MANAGEMENT
During the year, your Directors have constituted a Risk Management
Committee which has been entrusted with the responsibility to assist
the Board in overseeing that all the risks that the organization faces
such as strategic, financial, credit, market, liquidity, security,
property, IT, legal, regulatory, reputational and other risks have been
identified and assessed and there is an adequate risk management
infrastructure in place capable of addressing those risks. A Risk
Management Policy was reviewed and approved by the Committee.
STATUTORY AUDITOR
At the Annual general meeting held on December 18, 2014, M/s.
Haribhakti& Co. LLP, were appointed as the Statutory Auditors' of the
Company till the conclusion of the next annual general meeting to be
held in the year 2015. Considering the stipulation contained under
section 139 (2) of the Companies Act, 2013, M/s Haribhakti& Co. LLP, is
not eligible to be re-appointment for the financial year 2015-16.
The Company had received confirmation from M/s K. N. Gutgutia& Co.,
Chartered Accountants that their appointment, if made, would be in
accordance with the provision of Section 139 of the Companies Act, 2013
and that they are not disqualified for appointment. Therefore, the
Board of directors recommend their appointment as the Statutory
Auditors of the Company for a term of five years subject to
ratification at every Annual General Meeting.
COMMENTS ON AUDITORS REPORT
The Auditors Report is self-explanatory and there are no adverse
observations / qualifications contained in the Auditors Report.
However, your director's would like to clarify that the statutory dues
till March 31, 2015 have been deposited as on the date of the approval
of the report.
SECRETARIAL AUDITOR
The Board has appointed M/s VLA & Associates, Practising Company
Secretary, to conduct Secretarial Audit for the financial year 2014-15
as required under Section 204 of the Companies Act, 2013 and rules
thereunder. The Secretarial Audit Report for the financial year ended
March 31, 2015 formed part of the Annual Report as Annexure IV to this
Report.
EXTRACT OF ANNUAL RETURN
In accordance with section 134(3) (a) of the Companies Act, 2013 an
extract of Annual Return of the Company is annexed herewith as Annexure
V to this Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars prescribed under Section 134 (3)(m) of the Companies
Act, 2013 read with the Companies (Accounts) Rules 2014 relating to
conservation of energy, technology absorption, foreign exchange
earnings and outgo, are not applicable to the company since the company
had not conducted any manufacturing activities during the period under
review.
GREEN INITIATIVE
The company had started a sustainability initiative with the aim of
going green and minimizing our impact on the environment. Like the
previous years, this year too, we are publishing only the statutory
disclosures in the print version of the Annual report. Additional
information is available on our website: www.runeecha.com.
Electronic copies of the Annual Report 2015 and notice of the 29th AGM
is send to all the members whose email addresses are registered with
the company/depositary participant(s). For members who have not
registered their email addresses, physical copies of the Annual report
2015 and notice of 29th AGM are sent in the permitted mode. Members
requiring physical copies may send their request to the Company
Secretary.
ACKNOWLEDGEMENT
Your Directors are pleased to place on record their sincere gratitude
to the Government, Financial Institutions, Bankers, customers, vendors
and Business Constituents for their continued and valuable co-operation
and support to the Company. They also take this opportunity to express
their deep appreciation for the devoted and sincere services rendered
by the employees at all levels of the operations of the Company during
the year.
Your Directors also convey their grateful thanks to the shareholders
for their continued assistance, cooperation and patronage.
Date: 30.06.2015 sd/-
Place: Noida (Pradeep Jain)
CIN: L99999MH1986PLC038532 Chairman & Managing Director
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