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Company Information

Home » Market » Company Information

Rajapalayam Mills Ltd.

Dec 12, 01:17
726.00 +4.80 (+ 0.67 %)
 
VOLUME : 173
Prev. Close 721.20
Open Price 724.00
TODAY'S LOW / HIGH
715.00
 
 
 
737.95
Bid PRICE (QTY.) 723.05 (1)
Offer PRICE (Qty.) 728.00 (5)
52 WK LOW / HIGH
680.00
 
 
 
1583.00
Rajapalayam Mills Ltd. is not traded in NSE
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Market Cap. ( ₹ ) 535.51 Cr. P/BV 0.33 Book Value ( ₹ ) 2,170.64
52 Week High/Low ( ₹ ) 1583/680 FV/ML 10/1 P/E(X) 4.64
Bookclosure 03/08/2018 TTM EPS ( ₹ ) 0.00 Div Yield (%) 0.55
DIRECTOR'S REPORT
You can view full text of the latest Director's Report for the company.
Year End :2017-03 

TO THE MEMBERS

Before reporting the working results of the year, your Directors with deep regret inform the sad and sudden demise of Shri P.R. Ramasubrahmaneya Rajha, Chairman of the Company on 11-05-2017. When Shri P.R. Ramasubrahmaneya Rajha assumed charge of Rajapalayam Mills Limited, the capacity of the Company was 40,000 Spindles. Under his leadership the Company grew to aggregate spindle capacity of 1,37,552 Spindles and Open End capacity of 4,616 Rotors. Shri P.R. Ramasubrahmaneya Rajha was appointed as a Director of the Company in the year 1956 and served the Company for more than 60 years. The Mill was developed financially and operationally very strong during his tenure because of prudent and transparent management. The achievements made by the legendary Chairman not only to the Company but also to the Textile Industry as a whole will be appreciated by many generations to come. He was also known for his business ethics, value systems and philanthropic activities. He not only led the Rajapalayam Mills Limited but was also the guiding force for the entire Ramco Group of Companies, which has made the Group, one of the most respected industrial houses in the country. Under his leadership, the Company has made consistent profits and handsomely rewarded all the stakeholders of the Company.

The Directors place on record the immense contribution, Shri P.R. Ramasubrahmaneya Rajha had made to the Company in its growth progress. The Directors are committed to take forward the future growth of the Company, in line with his vision and values.

The Directors are presenting their 81st Annual Report and the Audited Accounts of the Company for the year ended 31st March, 2017.

1. FINANCIAL RESULTS

The financial results for the year ended 31st March, 2017 after charging all expenses and contribution to P.A.C. Ramasamy Raja Memorial Fund of Rs.70 Lakhs (which is less than the limits laid in the Articles of Association) but before deducting finance cost and depreciation have resulted in operating profit (EBITDA) of Rs. 8,286.00 Lakhs against Rs. 7,938.50 Lakhs for the previous financial year 2015-16.

After deducting Rs. 2,328.56 Lakhs towards finance cost and providing Rs. 2,114.44 Lakhs towards Depreciation, the Net Profit and other comprehensive income before tax for the year is Rs. 3,759.24 Lakhs, as compared to Rs.3,038.54 Lakhs for the previous financial year 2015-16. Adding the surplus of Rs.1,112.17 Lakhs brought forward from the previous year, your Directors propose to appropriate the total sum of Rs. 4,871.41 Lakhs as detailed below:

(Rs. in Lakhs)

Provision for Taxation - Current Tax

775.13

- Deferred Tax (including MAT Credit

(553.86)

Entitlement of Rs.374.59 Lakhs)

Transfer to General Reserve and FVTOCI Reserve

3,650.14

Balance carried over to Balance sheet

1,000.00

TOTAL

4,871.41

2. SHARE CAPITAL

The Paid-up Capital of the Company is Rs.737.62 Lakhs (Previous Year: Rs.737.62 Lakhs) consisting of 73,76,160 Shares of Rs.10/- each.

3. DIVIDEND

Your Directors have pleasure in recommending a Dividend of Rs. 4/- per share (Previous Year: Rs.3/- per share). The Company will pay Dividend Distribution Tax under Income Tax Act, 1961. The total amount of Dividend outgo for the year will be Rs.295.05 Lakhs. The amount of tax on dividends would be Rs.60.07 Lakhs.

4. TAXATION

An amount of Rs. 775.13 Lakhs towards Current Tax has been provided and Deferred Tax of Rs.179.27 Lakhs has been withdrawn for the year 2016-17. The Company’s entitlement of MAT Credit of Rs. 374.59 Lakhs has been recognized in the books during the year.

5. EXPORTS

On the export front during the year, we have made export of Cotton Yarn (including merchant exports) for a value of Rs.121.93 Crores as against Rs.114.97 Crores of the previous year.

Your Directors are thankful to M/s. Mitsubishi Corporation, M/s. Doko Spinning Co. Ltd., and M/s. Unitika Ltd., Japan for their continued support and efforts for promotion of exports to Japan.

6. MODERNISATION / EXPANSION

As a part of continuous thrust on modernization and expansion programme, the Company has invested about Rs. 5.45 Crores for investment in textile machinery & equipments like, Compact conversion, Contamination detecting machine etc.,

7. PROSPECTS FOR THE CURRENT YEAR

The cotton prices are showing increasing trend due to reduced acreage of cotton plantation during the cotton season 2016-17. There is a huge volatility in the demand of cotton and yarn in domestic as well as international markets, which is reflecting in their prices also. There is an expectation that the US’s exit from the Trans-Pacific partnership is likely to realign textile trade towards India, which will boost the consumption of Indian yarn. Cotton Yarn is now enjoying the excise duty exemption through optional route since 2004. The Government is planning to implement GST in India with effect from 01-07-2017 and it is expected to yield long-term benefits.

The Company is always focusing on maintaining highest standards of yarn quality and also concentrating on cost effective production. It is always our endeavor to minimize the waste and to focus more on automation with a view to utilize the skilled manpower more efficiently. With the flexibility to produce value added super fine counts and by using more imported contamination free cotton, the Company will continue to make efforts in expanding the marketing activities across the globe to increase its customer base.

8. WIND MILL

The Company has wind mills with installed capacity of 35.15 MW for its captive power consumption. The wind farm has generated 683 Lakhs Kwh as compared to 394 Lakhs Kwh of the previous year. There was a good wind velocity supported by good evacuation by Tamil Nadu Generation and Distribution Corporation (TANGEDCO) during the financial year 2016-17. All the Units generated by wind mills were adjusted for captive consumption at our Mills in Tamil Nadu. The income during the year from the Wind Mill Division was Rs. 45.62 Crores as against Rs. 26.26 Crores of previous year.

9. INDIAN ACCOUNTING STANDARDS (IND AS) - IFRS CONVERGED STANDARDS

The Ministry of Corporate Affairs vide its notification dated 16th February, 2015 has notified the Companies (Indian Accounting Standard) Rules, 2015. In pursuance of this notification, our Group Companies M/s. The Ramco Cements Limited and M/s. Ramco Industries Limited has adopted Ind AS in first phase i.e. with effect from 01-04-2016 and they have considered M/s. Rajapalayam Mills Limited as their Associate Company. As per the above said notification, if a listed Company adopts Ind AS in first phase, their Associate Company should also adopt Ind AS in first phase. Hence, the Company and its Associate Companies have adopted Ind AS with effect from 01-04-2016. The Company’s financial results for the previous year ended 31-03-2016 had also been recast in accordance with Ind AS.

10. ASSOCIATE COMPANY

The Company holds investments in the Group Companies viz., M/s. The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, M/s. The Ramaraju Surgical Cotton Mills Limited, M/s. Sri Vishnu Shankar Mill Limited and M/s. Ontime Industrial Services Limited.

During the year 2016-17, as per Ind AS - 28 the Board has considered the above Group Companies as its Associate Companies.

In accordance with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company’s Associates’ is attached in Form AOC-1 as Annexure - I.

CONSOLIDATED FINANCIAL STATEMENTS

As per provisions of Section 129(3) of the Companies Act, 2013 and Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Companies are required to prepare consolidated financial statements of its Subsidiaries and Associates to be laid before the Annual General Meeting of the Company.

Accordingly, the consolidated financial statements incorporating the accounts of Associate Companies, viz. M/s.The Ramco Cements Limited, M/s. Ramco Industries Limited, M/s. Ramco Systems Limited, M/s. The Ramaraju Surgical Cotton Mills Limited, M/s. Sri Vishnu Shankar Mill Limited and M/s. Ontime Industrial Services Limited along with the Auditors’ Report thereon, forms part of this Annual Report. As per Section 136(1) of the Companies Act, 2013 the Financial Statements including Consolidated Financial Statements are available at the Company’s website at the following link at http://www.rajapalayammills.co.in. The Annual Report containing the Statement of Accounts for Associate Companies are available at the Company’s website.

The Consolidated Net Profit after tax of the Company amounted to Rs. 14,519.45 Lakhs for the year ended 31st March, 2017 as compared to Rs. 10,252.35 Lakhs of the previous year.

The Consolidated Total Comprehensive Income for the year under review is Rs. 14,507.07 Lakhs as compared to Rs. 10,124.76 Lakhs of the previous year.

11. INTERNAL FINANCIAL CONTROLS

In accordance with Section 134(5)(e) of the Companies Act, 2013, the Company has Internal Financial Controls Policy by means of Policies and Procedures commensurate with the size & nature of its operations and pertaining to financial reporting. In accordance with Rule 8(5)(viii) of Companies (Accounts) Rules, 2014, it is hereby confirmed that the Internal Financial Controls are adequate with reference to the financial statements. ERP System developed by Ramco Systems Limited has been installed for online monitoring of all functions and management information reports are being used to have better internal control system and to take decisions in time.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY

In accordance with Section 177(9) and (10) of the Companies Act, 2013 and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil Mechanism and has a Whistle Blower Policy. The policy is available at the Company’s website.

13. DIRECTORS

Smt. R. Sudarsanam, was reappointed as Managing Director of the Company for a period of three years starting from 01-04-2014 to 31-03-2017 at the Annual General Meeting held on 04-08-2014. Based on the recommendation of the Nomination and Remuneration Committee made at its meeting held on 27-05-2016, the Board of Directors at their meeting held on 28-05-2016 and the Shareholders at the 80th Annual General Meeting held on 10th August, 2016 have approved appointment of Smt. R. Sudarsanam as Managing Director for a further period of 3 years starting from 01-04-2017.

In accordance with the provision of the Companies Act, 2013 and in terms of the Memorandum and Articles of Association of the Company, the following Directors retire by rotation at the ensuing Annual General Meeting and they are eligible for re-appointment:

1) Shri S. S. Ramachandra Raja, (DIN: 00331491)

2) Shri P. R. Venketrama Raja, (DIN: 00331406)

Smt. Soundara Kumar (DIN: 01974515) has been appointed as Independent Director for a period of five years with effect from 27-08-2015 at the Annual General Meeting held on 10th August, 2016.

Shri P. V. Abinav Ramasubramaniam Raja (DIN: 07273249) has been co-opted on 11th February, 2017 as an Additional Director. He will hold the office till the date of the forthcoming Annual General Meeting. A Notice in writing has been received from a Member signifying his intention to propose the appointment of Shri P. V. Abinav Ramasubramaniam Raja as a Director at the Annual General Meeting.

Shri P.A.S. Alaghar Raja (DIN: 00487312) has been co-opted on 11th February, 2017 as an Additional Director under Independent Director category. He will hold the office till the date of the forthcoming Annual General Meeting. A Notice in writing has been received from a Member signifying his intention to propose the appointment of Shri P.A.S. Alaghar Raja as a Director under Independent Director category at the Annual General Meeting to hold office for 5 consecutive years with effect from 11th February, 2017, without being subject to retirement by rotation.

Shri P.R. Venketrama Raja has been appointed as Chairman at the Board meeting held on 04-06-2017.

The Independent Directors hold office for a fixed term of 5 years and are not liable to retire by rotation. No Independent Director has retired during the year.

Pursuant to Rule 8(5)(iii) of Companies (Accounts) Rules, 2014, it is reported that, other than the above, there have been no changes in the Directors or Key Managerial Personnel during the year under review.

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013.

The Audit Committee has four members, out of which three are Independent Directors. Pursuant to Section 177(8) of the Companies Act, 2013, it is reported that there has not been an occasion, where the Board had not accepted any recommendation of the Audit Committee.

In accordance with Section 178(3) of the Companies Act, 2013 and based upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors have approved a policy relating to appointment and remuneration of Directors, Key Managerial Personnel and Other Employees.

The objective of the Nomination and Remuneration Policy is to ensure that the level and composition of remuneration is reasonable, the relationship of remuneration to performance is clear and appropriate to the long term goals of the Company.

As required under Regulation 25(7) of SEBI (LODR) Regulations, 2015, the Company has programmes for familiarization for the Independent Directors about the nature of the industry, business model, roles, rights and responsibilities of Independent Directors and other relevant information. As required under Regulation 46(2) of SEBI (LODR) Regulations, 2015, the details of the Familiarization Programme for Independent Directors are available at the Company’s website, at the following link at http://www.rajapalayammills.co.in/pdf/familiarisation-programme-for-independent-directors-31-03-2017.pdf

The details of the familiarization programme are explained in the Corporate Governance Report also.

14. EVALUATION OF BOARD

Pursuant to Section 134(3)(p) of the Companies Act, 2013, and Regulation 25(4) of SEBI (LODR) Regulations, 2015, Independent Directors have evaluated the quality, quantity and timeliness of the flow of information between the Management and the Board, performance of the Board as a whole, its committee and its Members and other required matters in accordance with the guidance note issued by SEBI on 05-01-2017. Pursuant to Schedule II, Part D of SEBI (LODR) Regulations, 2015, the Nomination and Remuneration Committee has laid down evaluation criteria based on the above guidance note issued by SEBI for performance evaluation of Independent Directors, which will be based on attendance, independence, expertise and contribution brought by the Independent Director at the Board Meeting, which shall be taken into account at the time of reappointment of Independent Director.

15. MEETINGS

During the year, four Board Meetings were held. In accordance with Clause 9 of Secretarial Standard - 1 the details of the number and dates of meetings of the Board and Committees held during the Financial year indicating the number of meetings attended by each Director are given in the Corporate Governance Report.

16. PUBLIC DEPOSITS

Pursuant to Rule 8(5)(v)& (vi) of Companies (Accounts) Rules, 2014, it is reported that the Company has not accepted any deposit from public during the financial year under review. There has been no default in the repayment of deposits / payment of interest thereon during the year. The Company has no deposit, which is not in compliance with the Chapter V of the Companies Act, 2013.

The Company has received a sum of Rs.1,100 Lakhs from Directors as deposit / loan during the financial year 2016-17. It has repaid an amount of Rs.1,100 Lakhs during the year 2016-17.

17. ORDERS PASSED BY REGULATORS

Pursuant to Rule 8(5)(vii) of Companies (Accounts) Rules, 2014, it is reported that, no significant and material orders have been passed by the Regulators or Courts or Tribunals, impacting the going concern status and Company’s operations in future.

18. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Pursuant to Section 186(4) of the Companies Act, 2013, it is reported that:

(a) the Company has not given any loans during the year 2016-17 under Section 186 of the Companies Act, 2013.

(b) the particulars of the guarantees and investments are provided under Note No.40 and Note No. 8 respectively of Notes forming part of financial statements. The guarantees are extended to secure the loans from Banks / Financial Institutions to the borrowers.

19. CORPORATE SOCIAL RESPONSIBILITY

In terms of Section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors have constituted a Corporate Social Responsibility (CSR) Committee and adopted a CSR Policy which is based on the philosophy that “As the Organization grows, the Society and Community around it also grows.”

The Company has undertaken various projects in the areas of education, health, rural development, water and sanitation, promotion and development of traditional arts, livelihood enhancement projects, etc., largely in accordance with Schedule VII of the Companies Act, 2013.

Your Directors are pleased to inform that the Company has fulfilled its CSR obligations pursuant to Section 135(5) of the Companies Act, 2013. As against the requirement of Rs. 60.56 Lakhs, the Company has spent Rs. 68.55 Lakhs on CSR during the year 2016-17.

The Annual Report on CSR activities as prescribed under Companies (Corporate Social Responsibility Policy) Rules, 2014 is attached as Annexure - II.

20. AUDITS STATUTORY AUDIT

As per the provisions of Section 139 of the Companies Act, 2013, the term of Office of M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja and Co., Chartered Accountants, come to an end at the close of the 81st Annual General Meeting of the Company.

M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, were the Auditors of the Company since incorporation and M/s. Ramakrishna Raja and Co., Chartered Accountants, were the Auditors of the Company since 1967-68. The Board of Directors wish to place on record their sincere appreciation for the services rendered by M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja and Co., Chartered Accountants, as Statutory Auditors of the Company, during their long association with the Company.

Subject to the approval of the Members of the Company at the ensuing 81st Annual General Meeting, the Board of Directors have recommended the appointment of M/s. N.A. Jayaraman & Co. Chartered Accountants and M/s. SRSV Associates, Chartered Accountants as Statutory Auditors of the Company, pursuant to Section 139 of the Companies Act, 2013. The Audit Committee at its meeting held on 24-05-2017 had recommended their appointment as Statutory Auditors, pursuant to Section 139 (11) of the Companies Act, 2013. Written consents from the incoming Auditors have been obtained, confirming that they satisfy the legal requirements for their appointment. The proposal relating to their appointment has been included in the notice convening the 81st Annual General Meeting of the Company. They shall hold office from the conclusion of 81st Annual General Meeting to the conclusion of 86th Annual General Meeting and the matter relating to the Auditors’ appointment will be placed before the Members for their ratification at every intervening Annual General Meeting.

The report of Statutory Auditors viz., M/s. M.S. Jagannathan & N. Krishnaswami, Chartered Accountants, and M/s. Ramakrishna Raja and Co., Chartered Accountants, for the year ended 31st March, 2017 does not contain any qualification, reservation or adverse remark and no instance of fraud has been reported by Auditors under Section 143(12) of Companies Act, 2013.

SECRETARIAL AUDIT

Shri M.R.L. Narasimha, a Practicing Company Secretary has been appointed to conduct the Secretarial Audit of the Company. Pursuant to Section 204(1) of the Companies Act, 2013, the Secretarial Audit Report submitted by the Secretarial Auditor for the year ended 31st March, 2017 is attached as Annexure - III. The report does not contain any qualification, reservation or adverse remark.

COST AUDIT

As per notification dated 31-12-2014 issued by MCA under the Companies (Cost Records and Audit) Rules, 2014, Textile Mills are required to file cost audit report with effect from the financial year 2015-16.

The Board of Directors had approved the appointment of Shri M. Kannan, Cost Accountant as the Cost Auditors of the Company to audit the Company’s Cost Records relating to manufacture of textile products for the year 2017-18.

The remuneration of the cost auditor is required to be ratified by the Shareholders in accordance with the provisions of Section 148(3) of the Companies Act, 2013 and Rule 14 of Companies (Audit and Auditors) Rules, 2014. Accordingly, the matter related to his remuneration is being placed before the Members for ratification at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2015-16 due to be filed with Ministry of Corporate Affairs by 30-09-2016 had been filed on 02-09-2016.

The Cost Audit Report for the financial year 2016-17 is due to be filed within 180 days from the closure of the financial year and will be filed within the stipulated period.

21. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of Companies (Accounts) Rules, 2014, the information relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as Annexure - IV.

22. EXTRACT OF ANNUAL RETURN

In Accordance with Section 92(3) of the Companies Act, 2013, read with Rule 12(1) of Companies (Management and Administration) Rules, 2014, an extract of the Annual Return in Form MGT-9 is attached herewith as Annexure - V.

23. CORPORATE GOVERNANCE

The Company has complied with the requirements regarding Corporate Governance as stipulated in SEBI (LODR) Regulations, 2015. As required under Schedule V(C) of SEBI (LODR) Regulations, 2015, a Report on Corporate Governance being followed by the Company is attached as Annexure - VI. As required under Schedule V(E) of SEBI (LODR) Regulations, 2015 a Certificate from the Auditors confirming compliance is also attached as Annexure - VII to this Report.

24. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The disclosures in terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) and (3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to remuneration are provided in Annexure- VIII.

25. INDUSTRIAL RELATIONS AND PERSONNEL

The Company has 2,898 employees as on 31-03-2017. Industrial relations with employees remained cordial during the year. Human Resources Development activities received considerable focus. The emphasis was on imparting training and development of the skill-set of the employees to enable them to face the challenges in the work environment.

26. RELATED PARTY TRANSACTION

Prior approval / Omnibus approval is obtained from the Audit Committee for all related party transactions and the transactions are periodically placed before the Audit Committee for its approval. No transaction with the related party is material in nature, in accordance with Company’s “Related Party Transaction Policy” and Regulation 23 of SEBI (LODR) Regulations, 2015. In accordance with Ind AS 24 (Related Party Disclosure), the details of transactions with the related parties are set out in Note No: 43 of disclosures forming part of Financial Statements.

As required under Regulation 46(2)(g) of SEBI (LODR) Regulations, 2015, The Company’s Related Party Transaction Policy is disclosed in the Company’s website and its web link is http://www.rajapalayammills.co.in/pdf/related-party-transaction-policy.pdf

27. RISK MANAGEMENT POLICY

Pursuant to Section 134(3)(n) of the Companies Act, 2013 and Regulation 17(9) of SEBI (LODR) Regulations, 2015, the Company has developed and implemented a Risk Management Policy. The Policy envisages identification of risk and procedures for assessment and minimization of risk thereof.

28. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:

(a) they had followed the applicable accounting standards along with proper explanation relating to material departures, if any, in the preparation of the annual accounts for the year ended 31st March, 2017;

(b) they 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 on 31st March, 2017 and of the profit of the Company for the year ended on that date;

(c) they had taken proper and sufficient care 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) they had prepared the Annual Accounts on a going concern basis;

(e) they 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ACKNOWLEDGEMENT

The Directors are grateful to the various Departments and agencies of the Central and State Governments for their help and co-operation. They are thankful to the Financial Institutions and Banks for their continued help, assistance and guidance. The Directors wish to place on record their appreciation of employees at all levels for their commitment and their contribution.

On behalf of the Board of Directors,

For RAJAPALAYAM MILLS LIMITED,

RAJAPALAIYAM, P.R. VENKETRAMA RAJA

04th June, 2017. CHAIRMAN