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Baroda Rayon Corporation Ltd.

BSE: 500270 Sector: Industrials
NSE: BARODARAYN ISIN Code: INE461A01024
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Baroda Rayon Corporation Ltd. (BARODARAYN) - Director Report

Company director report

To

The Members of

The Baroda Rayon Corporation Limited

Your Directors are pleased to present the 56th Annual Report and the Audited Statementof Accounts for the year ended 31st March 2016. The Financial results are shown as below.

Financial Results
(Rs. In Lakhs)
Particulars 31.03.2016 31.03.2015
Income from Sales NIL NIL
Other Income NIL NIL
Total Income NIL NIL
Less: Expenditure 86.97 37.64
Profit/(Loss) before interest depreciation and tax (86.97) (37.64)
Less: Depreciation 303.94 303.94
Interest 25.87 20.31
Provisions for Taxation Nil Nil
Profit/(Loss) before extraordinary item (416.78) (361.89)
Less: Extraordinary Item - (11.02)
Profit/(Loss) after Taxes (416.78) (350.87)
Profit/(Loss) available for appropriation (416.78) (350.87)
Balances as per last year’s Balance sheet (35925.41) (35574.53)
Profit and Loss Appropriation Account NIL NIL
Balance carried to Balance sheet (34888.49) (35925.41)

Overview of Company’s Financial Performance

Your company’s net loss is Rs. 416.78 lakhs as against Rs. 350.87 lakhs in theprevious year. Interest cost has increased to Rs. 25.87 lakhs as against Rs. 20.31 lakhsin previous year Rs. Total expenditure of your company has increased to Rs. 86.97 lakhs asagainst Rs. 37.64 lakhs in previous year Rs.

Dividend

Your Directors regret their inability to recommend any dividend for the financialperiod under review in view of the continued losses.

Share Capital

The issued subscribed and paid-up equity share capital of the company as on 31stMarch 2016 is Rs. 2291.14 lakhs. During the year under review the Company has not issuedshares with differential voting rights nor granted stock options nor sweat equity. As on31st March 2016 none of the Directors of the company holds equity shares in the company.

Transfer to Reserves

During the year under review no amount was transferred to General Reserve.

Change in nature of business

During the year under review there is no change in the nature of business of thecompany.

Review of Operation

During the year under review no production/manufacturing activities were carried on bythe company. Hence No information is provided regarding the performance of the company.Your company is seeking new avenues in order to restart the operations of your company.

Material changes and commitment affecting the financial position of the companyoccurred between the end of the financial year to which this financial statements relateand the date of the report

There were 3(Three) material changes and commitments affecting the financial positionof your Company which have occurred between the end of the financial year 2015-16 and thedate of this Report viz. –

1) The Contingent liability of Central Excise relating to FY 1996-97 amounting to Rs.60028/- was dropped by Commissioner (Appeals) vide order dated 23.05.2016.

2) The Contingent liability of Central Excise relating to FY 1997-98 amounting to Rs.1611396/- was dropped by Add. Commissioner of Central Excise vide order dated30.06.2016.

3) The Contingent liability of Central Excise relating to FY 1996-97 amounting to Rs.442805/- was dropped by Add. Commissioner of Central Excise vide order dated 30.06.2016.

Directors’ Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act 2013 theBoard hereby submit its responsibility Statement:—a) in the preparation of the annualaccounts for the year ended March 31 2016 the applicable accounting standards read withrequirements set out under Schedule III to the Act have been followed and there are nomaterial departures from the same;

b) the Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2016 and of the loss ofthe Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts on a ‘going concern’basis;

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

f) the Directors have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company does not have any Subsidiaries Joint Ventures and Associate Companies.

Deposits

During the financial year 2015-16 your Company has not accepted any fixed depositswithin the meaning of section 73 and 74 of the Companies Act 2013 read together with theCompanies (Acceptance of Deposits) Rules 2014.

During the year under review your company has repaid fixed deposits of Rs. 59.56 lakhs.However deposits of Rs. 1.95 lakhs were outstanding as at 31st March 2016 as the matteris disputed.

Directors and key managerial personnel Appointments:

At the 55th AGM held on 30/09/2015 Mrs. Vidhya Bhavani was appointed as Non ExecutiveDirector of the company liable to retire by rotation.

The Board for Industrial & Financial Reconstruction (BIFR) vide its order dated20/10/2015 appointed Mr. Prashant Panda (DIN – 00596554) as Nominee Director of thecompany until further orders or for a period of 5 years from the date of appointment ortill the date on which he attains the age of 70 years whichever is earlier.

Disclosure relating to Remuneration and Nomination Policy

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy is explained in Corporate Governance Report.

Managerial Remuneration

During the year under review no director was paid any remuneration.

Independent Directors’ Meeting

Independent Directors of the Company had met during the year under review details ofwhich are given in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration and StakeholdersRelationship Committees. The manner in which the evaluation has been carried out has beenexplained in the Corporate Governance Report.

Meetings

The details of the number of Board and other Committee meetings of your Company are setout in the Corporate Governance Report which forms part of this Report.

Declaration by independent directors

The Board has received declaration from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under theCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

Committees of the Board

There are currently three Committees of the Board as follows:

1. Audit Committee

2. Nomination and Remuneration Committee 3. Stakeholders’ Relationship Committee

Details of all the Committees along with their charters composition and meetings heldduring the year are provided in the "Report on Corporate Governance" a part ofthis Annual Report.

Corporate Governance Report

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate section on corporate governancepractices followed by the Company together with a certificate from the Company’sAuditors confirming compliance forms an integral part of this Report.

Auditors:

A. Statutory Auditors

At the Annual General Meeting held on September 30 2014 Messrs AMPAC &Associates Chartered Accountants (Registration No. FRN 112236W) were appointed asstatutory auditors of the Company to hold office till the conclusion of the Annual GeneralMeeting to be held in the calendar year 2019. In terms of the first proviso to Section 139of the Companies Act 2013 the appointment of the auditors shall be placed forratification at every Annual General Meeting. Accordingly the appointment of AMPAC &Associates Chartered Accountants as statutory auditors of the Company is placed forratification by the shareholders. In this regard the Company has received a certificatefrom the auditors to the effect that if they are reappointed it would be in accordancewith the provisions of Section 141 of the Companies Act 2013.

B. Secretarial Auditor

Mr. Manish Patel Practicing Company Secretary Surat was appointed to conduct thesecretarial audit of the Company for the financial year 2015-16 as required under Section204 of the Companies Act 2013 and Rules thereunder. The secretarial audit report for FY2015-16 forms part of the Annual Report as "Annexure A" to the Board’sreport.

The Board has appointed Mr. Manish Patel Practicing Company Secretary as secretarialauditor of the Company for the financial year 2016-17.

Auditors’ Report

The observations made by the Auditors are self explanatory and have also been explainedin the notes forming part of the accounts wherever required.

Related Party Transactions

During the financial year 2015-16 there were no transactions with related partieswhich qualify as material transactions under the Listing Regulations and that theprovisions of section 188 of the Companies act 2013 are not attracted. Thus disclosure inform AOC-2 is not required. Further there were not material related party transactionsduring the year under review with the Promoters Directors of Key Managerial Personnel.

Loans Guarantees and Investments

The details of loans guarantees and investments under Section 186 of the CompaniesAct 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 are asfollows:

A). Details of investments made by the Company as on 31st March 2016 (includinginvestments made in the previous years) (in equity shares):

(Rs. In Lakhs Rs.
Name of Company Amount as at 31st March 2016
ICICI Bank Ltd. -
Hindustan Organic Chemicals Ltd. 0.25
Thai Baroda Industries Ltd. 574.85
TAIB Capital Corporation Ltd. 24.50
Zoroastrian Co-op. Bank Ltd. 0.01
Total 599.61

B). There are no loans given by your Company in accordance with Section 186 of theCompanies Act 2013 read with the Rules issued thereunder.

C). There are no guarantees issued by your Company in accordance with Section 186 ofthe Companies Act 2013 read with the Rules issued thereunder.

Conservation of Energy Technology Absorption and Foreign Exchange Earnings & Outgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 are as under-

(A) Conservation of Energy:

The production and manufacturing activities are not carried on by the Company and dueto that no usage of energy. Hence no steps are taken by the Company for conservation ofenergy.

(B) Technology Absorption:

The company has not imported any technology during the year and as such there isnothing to report.

(C) Foreign Exchange Earnings and Outgo: (Rs. In Lakhs)
31.03.2016 31.03.2015
Foreign Exchange Earnings NIL NIL
Foreign Exchange Outgoings NIL NIL

Compliance Certificate

A certificate from the Auditors of the company regarding compliance of conditions ofCorporate Governance as stipulated under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 is attached to this report.

Extract of Annual Return

In accordance with Section 134(3)(a) of the Companies Act 2013 an extract of theannual return in the prescribed format is appended as "Annexure B" to theBoard’s report.

Management’s view on Statutory Auditors Qualification:

Your Company’s applications before the Hon’ble BIFR and Gujarat High Courtare pending and the management desire to act as per the directions given by the respectiveauthorities.

Management’s view on Secretarial Auditors Qualification:

In respect of the Qualifications as stated in the Secretarial Audit Report yourmanagement is of the view that –

1) Your company has not appointed Company Secretary & Chief Financial Officer asKey Managerial Personnel specified under section 203 of the Companies Act 2013 howeveryour company has appointed Mr. Kunjal Desai as Company Secretary cum Compliance Officer ofthe company w.e.f. 01/06/2016.

2) Your company has not submitted Share Reconciliation Audit Report on quarterly basiswith Stock Exchange as per clause 55A of Securities and Exchange Board of India(Depositories and Participants) Regualtions 1996 however company has submitted thereport of all the Quarters of 2015-16 on 27.06.2016 with the Stock Exchange.

3) Your Company has not appointed internal auditor as per section 138 of Companies Act2013 however your company has appointed Mr. Ashok Shah Chartered Accountant asinternal auditor of the company w.e.f. 30.05.2016.

4) Your Company is a sick unit under the Board for Industrial & FinancialReconstruction (BIFR) and the entire production/manufacturing activities of the companybecame stand still since August’ 2008 and due to loss of key personnel responsiblefor the various compliances the non compliances as stated in the Secretarial Reportregarding Companies Act 2013 and Listing Agreement has occurred. However your company isin process of appointing key personnel responsible for the compliances of the same.

5) In respect of Specific Acts applicable to the Company your company has not compliedwith any of the compliances required under the specified Acts above on account ofdiscontinued operational activities by the company since August 2008.

Cash Flow Analysis

The Cash Flow Statement for the year under reference in terms of Regulation 34 of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 forms part of theAnnual Report.

Vigil Mechanism

Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177 (10) of the Companies Act 2013 andRegulation 22 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.The policy provides for a framework and process whereby concerns can be raised by itsemployees against any kind of discrimination harassment victimization or any otherunfair practice being adopted against them. More details on the vigil mechanism and theWhistle Blower Policy of your Company have been outlined in the Corporate GovernanceReport which forms part of this report.

Disclosures as per the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013.

The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on prevention prohibition and redressal of sexual harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules thereunder for prevention and redressalof complaints of sexual harassment at workplace.

Since your company is having no operative activities it has not received any complainton sexual harassment during the financial year 2015-16.

Particulars of Employees

The statement containing particulars of employees as required under Section 197 (12) ofthe Companies Act 2013 read with Rule 5 (2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 forms part of this Report as"Annexure – C".

Details on internal financial controls related to financial statements

Your Company has adopted accounting policies which are in line with the AccountingStandards prescribed in the Companies (Accounting Standards) Rules 2006 that continue toapply under Section 133 and other applicable provisions if any of the Companies Act2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions ofthe Companies Act 1956 to the extent applicable. These are in accordance with generallyaccepted accounting principles in India.

Significant/Material orders passed by the regulators

The Hon’ble Single Bench of Gujarat High Court had passed an order dated08/05/2015 in SCA 15599/2008 against which company had filed LPA 948/2015 in whichdivision bench of Gujarat High Court passed an order on 15/07/2015 in which stay againstimpugned order of single judge was granted. Being aggrieved by the order of DivisionalBench Union appealed in Supreme court of India for early hearing. The Supreme courtpassed the order for early hearing on 28/09/2015. Thereafter hearing was held on23/02/2016 where Asset Sale Committee (ASC) was constituted for sale of absolute/unviablePlant & Machinery of the company.

General a) Your Company has not issued equity shares with differential rights as todividend voting or otherwise; and b) Your Company does not have any ESOP scheme for itsemployees/Directors.

Appreciation

Your Directors wish to place on record their appreciation towards all associatesincluding Customers Collaborators Government Agencies Financial Institutions BankersSuppliers Shareholders Employees and other who have reposed their confidence in thecompany during the period under review.

By order of the Board of Directors
Place: Surat
Date: 10th August 2016 Damodarbhai B Patel
Chairman & Managing Director
DIN: 00056513

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