Pursuant to the Order dated December 9 2019 of the Hon'ble National Company LawTribunal - Chandigarh Bench ("NCLT Order") Corporate Insolvency ResolutionProcess ("CIR Process") has been initiated for the Company in accordance withthe provisions of the Insolvency and Bankruptcy Code 2016 ("Code") and relatedRules and Regulations issued thereunder. Mr. Dharmendra Kumar Bhasin (Registration No.IBBI/ IPA-002/IP-N00816/ 2019-2020/12564) was appointed as the Interim ResolutionProfessional ("IRP") in terms of the NCLT Order. Subsequently Mr DharmendraKumar Bhasin was confirmed as the Resolution Professional (RP) by the Committee ofCreditors in its meeting held on 07-01-2020. On appointment of IRP/RP the powers of Boardof Directors of the Company stand suspended and such powers along with the management ofaffairs of the Company are vested with the RP.
In the light of the above developments Your Directors present the 22nd Annual Reportand the Audited Financial Statements for the financial year ended March 31 2021.
FINANCIAL RESULTS (? in Lakhs)
|PARTICULARS ||YEAR ENDED 31.03.2021 ||YEAR ENDED 31.03.2020 |
|Profit/(Loss) before Depreciation ||(630.58) ||(1426.60) |
|Depreciation ||115.27 ||189.18 |
|Profit/(Loss) for the Year ||(745.85) ||(1615.78) |
|Other comprehensive Income/(Expense) ||(7.20) ||74.31 |
|Total Comprehensive Profit/(Loss) for the Year. ||(753.05) ||(1541.47) |
BRIEF DESCRIPTION OF THE COMPANY'S WORKING DURING THE YEAR AND THE STATE OF COMPANY'SAFFAIRS:
There was no production of Denim fabric during the year under review as compared to54.69 lakh meters during the previous year. The Company has achieved a sales turnover of '45.74 lakh during the year under review as compared to a turnover of ' 402 lakh during theprevious year.
In view of loss no Dividend was considered. No appropriation has been made to anyspecific reserve during the year under review.
There was no change in the Equity share capital structure of the Company during theyear under review. The Company does not have an Employee Stock Option Scheme nor are thereany shares which are held in trust for the benefit of employees of the Company.
The Company does not have outstanding Warrants or Debt instruments as on the date ofthe Report and hence Credit Rating provisions are not applicable.
The future prospects of the Company depend on the outcome of the ongoing CIR ProcessDuring the year under review the manufacturing activities at the Lalru Plant situated inthe state of Punjab continued to remain suspended. CORPORATE GOVERNANCE
A Report on Corporate Governance along with the Auditor's Certificate regardingCompliance of the conditions of Corporate Governance pursuant to Regulation 34 ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 is annexed hereto.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that :
1. In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;
2. Appropriate policies have been selected and applied consistently and have madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company as at March 31 2021 and the loss of the Companyfor the year ended March 31 2021;
3. Proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 and for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
4. The annual accounts have been prepared on a going concern basis;
5. Internal financial controls to be followed by the Company have been laid down andthat such internal financial controls are adequate and were operating effectively; and
6. Proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and are operating effectively.
The Company has constituted an Audit Committee which presently comprises of thefollowing Directors viz. Mr. D.N. Singh - Chairman Mr. H.D. Ramsinghani and Mr. R.G.Kulkarni. All the members of the Audit Committee are financially literate and haveexperience in financial management. The Audit Committee acts in accordance with the termsof reference specified from time to time by the Board.
The Stakeholders Relationship Committee which presently consists of Mr. D.N. Singh(Chairman) Mr. H.D. Ramsinghani and Mr. S. S. Arora. The Nomination and RemunerationCommittee comprising of Mr. D.N. Singh (Chairman) Mr. H.D. Ramsinghani and Mr. R. G.Kulkarni.The Company has not constituted a Corporate Social Responsibility Committee asthe Company does not fulfill the prescribed criteria.
DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES
The Company does not have any Subsidiary/Joint Venture/Associate Company as on the dateof this Report.
Information relating to the conservation of energy technology absorption foreignexchange earnings and outgo to the extent applicable is annexed hereto as Annexure A andforms a part of this Report.
The Whole Time Director was not paid any remuneration during the year under review. Noremuneration was paid to non-executive Directors. There were no employees drawingremuneration in excess of the limits prescribed under Rule 5(2) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 during the year underreview or part thereof. The Details pertaining to remuneration of top ten employees asrequired under Section 197(12) of the Companies Act 2013 read with Rule 5(1) and Rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed hereto as Annexure B and Annexure C and forms a part of the Report. Details ofloans guarantees and investments if any are given under the Notes to FinancialStatements.
There were no transactions with Related Parties during the year under review. Therewere no material related party transactions with the Promoters Directors or the KeyManagerial Personnel or their relatives during the year under review.
Pursuant to the Order dated December 9 2019 of the Hon'ble National Company LawTribunal - Chandigarh Bench ("NCLT Order") Corporate Insolvency ResolutionProcess ("CIR Process") has been initiated for the Company in accordance withthe provisions of the Insolvency and Bankruptcy Code 2016 ("Code") and relatedRules and Regulations issued thereunder.
There is no change in the nature of business of the Company during the year.
The Company has formulated a Whistle Blower Policy under which all personnel haveaccess to the Audit Committee to report genuine concerns or grievances relating to thebusiness activities of the Company in general.
There were no cases filed pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 during the year under review.
As the powers of the Directors are suspended no meetings of the Board of Directorswere held during the year under review.
Mr. H D Ramsinghani (DIN 00035416) retires from the Board of Directors by rotation andis eligible for reappointment.
All Independent directors have given declarations that they meet the criteria ofindependence as laid down in Section 149(6) of the Companies Act 2013 and Regulation 16of SEBI (LODR) Regulations 2015.
None of the Directors are disqualified from being appointed / reappointed as Directorsof the Company as per the disclosures filed by the Directors with the Company.
The Board of Directors have framed a policy in relation to remuneration of directorsKey Managerial Personnel and senior Management and it lays down criteria for selection andappointment of Board Members. The details of the policy are available on the website ofthe Company www.rainbowdenim.com.
The independent Directors of the Company are informed about their roles rights andresponsibilities in the Company and also about the nature of the industry in which companyoperates and other related matters. The details of the familiarization program areavailable on the website of the Company www.rainbowdenim.com
M/s. Khandelwal & Mehta LLP (Membership No W100084) were appointed as StatutoryAuditors of the Company at the 19th Annual General Meeting held on September18 2018 to hold office till the conclusion of the 24th Annual GeneralMeeting. M/s. Khandelwal & Mehta LLP have confirmed that they are not disqualifiedfrom continuing as Auditors of the Company.
STATUTORY AUDITORS REPORT
Your Directors refer to the observations made by the Auditors in their Report and wishto state that the management is hopeful that subject to the outcome of the CIR processthe Company would be able to continue its operations in the foreseeable future in thenormal course of business and hence the accounts have been prepared on a going concernbasis and the value of impairment if any has not been ascertained. In view of the abovethe impact of the observations on the financial statements for the year under review isnot ascertainable.
The Company has appointed M/s S.S Kothari Mehta & Co. Chartered Accountants as theInternal Auditors and their scope of work includes review of processes operationalefficiency and effectiveness of systems and processes and assessment of adequacy ofinternal controls and safeguards apart from specific operational areas as per thedirections of the Audit Committee.
CORPORATE SOCIAL RESPONSIBILITY
The provisions relating to Corporate Social Responsibility do not apply to the Companyas the Company does not meet the criteria laid down in Section 135 of the Companies Act2013.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate system of internal controls that are commensurate with itssize and nature of business to safeguard and protect the Company from losses andunauthorized use or disposition of its assets. All the transactions are properlyauthorized recorded and reported to the management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andensuring timely reporting of financial statements. There were no frauds reported by theAuditors of the Company as on the date of this Report. SECRETARIAL AUDIT
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Rules madethere under the Company has appointed A. Arora & Co to undertake the SecretarialAudit of the Company. The Secretarial Audit Report is annexed hereto as Annexure D andforms a part of this Report. The Directors refer to the observations made by theSecretarial Auditor and wish to state that the non-appointment of Executive DirectorWomen Director and Company Secretary and non-holding of Board and Committee meetings andnon- publication of financial results and nonmaintenance of Structured digital data basefor UPSI was due to the fact that the Company is under CIR Process and the powers of theBoard are suspended.
The Cost Audit Report for the financial year ended 31st March 2020 was filed onSeptember 25 2020 with Ministry of Corporate Affairs.
EXTRACT OF ANNUAL RETURN
The extract of the Annual Return in Form MGT 9 pursuant to the provisions of Section 92of the Companies Act 2013 is annexed hereto as Annexure E and forms a part of thisReport.
The Annual Return referred to in Section 92(3) of the Companies Act 2013 and otherdetails about the Company are available on the website of the Companywww.rainbowdenim.com.
The Company has not accepted any public deposits and as such no amount on account ofprincipal or interest on public deposits was outstanding as on the date of the BalanceSheet.
SAFETY ENVIRONMENTAL CONTROL & PROTECTION
The Company has taken all the necessary steps for Safety and Environmental Control andProtection at its plant at Lalru.
The Industrial Relations were affected during the year under review due to labourunrest at the Lalru Plant. ACKNOWLEDGEMENT
Your Directors sincerely record their appreciation with gratitude for the continuedsupport and assistance extended to the Company by the Banks and various GovernmentDepartments and Agencies.
| ||FOR RAINBOW DENIM LIMITED (By the order of the Resolution Professional) |
|Place : Mumbai ||H D. RAMSINGHANI CHAIRMAN |
|Dated : August 12 2021 ||DIN : 00035416 |