Rainbow Foundations Limited
Your Directors have pleasure in presenting the 27th Annual Report on thebusiness and operations of your Company along with the Audited financial statements forthe year ended 31st March 2021.
1. FINANCIAL RESULTS
| ||Amount in Thousands |
|Particulars ||For Financial Year ended ||For Financial Year ended |
| ||31/03/2021 ||31/03/2020 |
|Total Income ||376831.65 ||291597.16 |
|Total Expenditure ||361596.51 ||268339.77 |
|Profit/(loss) before Interest Depreciation & Tax (EBITDA) ||94500.52 ||83434.37 |
|Finance Charges ||77831.77 ||59248.60 |
|Depreciation ||1433.61 ||928.38 |
|Profit/(loss) before Tax ||15235.14 ||23257.39 |
|Tax Expense ||3796.87 ||6244.81 |
|Net Profit/(Loss) After Tax ||11438.27 ||17012.58 |
|Profit/(Loss) carried to Balance Sheet ||11438.27 ||17012.58 |
|The proposed appropriations are || || |
|Proposed Dividend ||0 ||0 |
|Corporate dividend tax ||0 ||0 |
|General reserve ||0 ||0 |
|Balance carried forward ||11438.27 ||17012.58 |
|Earnings Per Share || || |
|Basic ||2.07 ||3.09 |
|Diluted ||2.07 ||3.09 |
2. ECONOMIC REVIEW:
The outbreak of the COVID-19 pandemic adversely impacted the sectorial performanceduring FY21. However in the secondhalf the Company reported a turnaround in performance.Therecent surge in cases following the second COVID-19 wave could impact demand in thefirst half of FY22.
While the pandemic may have affected the industry at large the operational momentum ofyour company is likely to besustained by its healthy Balance Sheet and robust projectPipeline. Your company will focus on opportunistic growth in the current environment tocreate a healthy project pipeline
3. OPERATIONAL AND FINANCIAL PERFORMANCE HIGHLIGHTS:
During the year under review the turnover of the company has increased toRs.376831.65thousand as compared to previous year turnover of Rs.291597.16thousand.However there is anincrease in turnover but due toincrease intotalexpenditure as well the profits of the company have reduced by 32.77%. The Earning perShare ( EPS ) for the year also reduced to Rs. 2.07 as compared to Rs. 3.09 in theprevious year due to increase in expenditure.
4. CHANGE IN NATURE OF BUSINESS:
During the year there was no change in the nature of business of the Company.
5. CORPORATE GOVERNANCE
Your Company is committed towards maintaining high standards of Governance. The Reporton Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligationsand Disclosure Requirements) Regulation 2015 ( Listing Regulations )shareholdersinformation together with a Corporate Governance Compliance Certificate from M/s GASMDANSR AND CO Statutory Auditor of the Company confirming compliance forms an integralpart of this Report which is annexed herewith as Annexure (A) .
6. BOARD EVALUATION
Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations aformal evaluation was carried out by the Board of its own performance and that of itscommittees and individual directors.
During the year under review one meeting of the Independent directors was held whereinthe performance of non-independent directors and the Board as whole were reviewed. Theperformance evaluation of committees and Independent Directors was carried out by entireBoard excluding the director being evaluated. The Independent Directors also assessed thequality quantity and timeliness of flow of information between the Company management andthe Board that is necessary for the Directors to effectively and necessarily perform theirduties.
The final evaluation was thereafter deliberated and assessed taking into account inputsfrom the Board about evaluation of independent directors and various committees of theBoard and suggesting action plan for improving Board performance and plan for next Boardits Committee(s) and individual director s evaluation.
7. INDEPENDENT DIRECTORS
Definition of Independent Director is referred in Section 149 (6) of the Act andRegulation 16 (1) (b) of the Listing Regulations. Based on the confirmation/disclosuresreceived from the Directors and on evaluation of the relationships disclosed thefollowing Directors are Independent:
Mr. Sampat Raj Singhvi
Mr. Pushpala Motiram Manjith
Mrs. Maithri Jayakkar
8. NOMINATION & REMUNERATION POLICY
Your Company has a Nomination & Remuneration policy for selection and appointmentof Directors Senior Management and fixing their remuneration including criteria fordetermining qualifications positive attributes independence of a Director and othermatters provided under Section 178 (4) of the Act. The said policy and the composition ofthe Nomination and Remuneration Committee have been stated in the Corporate GovernanceReport.
9. SHARE CAPITAL:
During the year under reviewthe Board of Directors of the Company has not issued anyshares hence the present Capital structure of the Company is as follows:
|Share Capital ||YEAR ENDED 31.03.2021 ||YEAR ENDED 31.03.2020 |
|(a) Authorised share Capital: || || |
|20000000 Equity Shares of Rs. 10/-each ||200000000 ||200000000 |
|50000000 Preference Shares of Rs. 10 each ||500000000 ||500000000 |
|(b) Issued Share Capital: || || |
|5513100 Equity Shares of Rs. 10/- each ||55131000 ||55131000 |
|45500000 0.01% Non-Convertible Redeemable ||455000000 ||455000000 |
|Cumulative Preference Shares of Rs. 10 each || || |
|(c) Subscribed and Paid up Capital : || || |
|5513100 Equity Shares of Rs. 10/- each ||55131000 ||55131000 |
|455000000.01% Non-Convertible Redeemable || || |
|Cumulative Preference Shares of Rs. 10 each ||455000000 ||455000000 |
No Dividend is recommended for the current financial year due to inadequate profitearned by the Company.
However the company paid a sum of Rs. 55656.00 to the preference shareholders whichis the arrears of dividend on Cumulative Preference Shares issued by the company as at31/03/2020 in accordance with the terms and conditions approved by the shareholders of theCompany in its Extraordinary General Meeting held on 05th December 2018.
11. TRANSFER TO RESERVES:
No amount was transferred to reserves during the FY 2020-21.
12. SUBSIDIARY COMPANIES/ ASSOCIATE COMPANIES/HOLDING COMPANIES/ JOINT VENTURES:
Your company does not have any subsidiaries associate company and joint venturesduring the year under review.
13. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANYOCCURRING AFTER BALANCE SHEET DATE:
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the Financial Year of theCompany to which the Financial Statements relate and the date of the Report.
14. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS UNDER SECTION 186:
There were no Loans Guarantees and Investments made by the company under theprovisions of Section 186 of the Companies Act 2013 (the Act) during the year underreview and hence the said provision is not applicable.
15. RELATED PARTY TRANSACTION:
Your Company has in place a Related Party Transactions Policy for the purpose ofidentification and monitoring of such transactions. This policy has been approved by theBoard and is available on the Company s website (www.rainbowfoundations.in).
During the year under review the company has not entered into any contracts andarrangements as per Section 188(1) of Companies Act 2013.
Your Company has neither accepted nor renewed any deposit during the year. As such noamount of principal and/or interest is outstanding as on the Balance Sheet date.
17. STATUTORY AUDITORS AND THEIR REPORT:
As per the provisions of Section 139 of the Act M/s. GASM DANSR and Co CharteredAccountants (ICAI Firm Registration No.005986S) were appointed as Statutory Auditors ofyour Company to hold office until the conclusion of the 28th AGM.
As required under Regulation 33 of the Listing Regulations Statutory Auditors haveconfirmed that they hold a valid certificate issued by the Peer Review Board of theInstitute of Chartered Accountants of India.
There are no qualifications reservations or adverse remarks made by StatutoryAuditors in their Report.
18. INTERNAL AUDITOR:
Pursuant to the provisions of Section 138 of the Companies Act 2013 M/s. BKJ &Co. Chartered Accountant (Membership No: 243126) Chennai is appointed as the InternalAuditors of the Company for the period of three financial year (From 2019-20 to 2021 to22).
19. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Act and Rules Regulation 24A of theSEBI (Listing Obligations & Disclosure Requirements) Regulations 2015 and otherapplicable provisions framed thereunder as amended your Company appointed JM &Associates Practicing Company Secretary to undertake the Secretarial Audit of the Companyfor the financial year 2020-21. The Practicing Company Secretary has submitted his Reporton the
Secretarial Audit conducted by him which is annexed herewith as Annexure (B) .
The following Observation was given in his Secretarial Audit Report
l The Company has not filed the initial disclosure upon becoming the member of thepromoter group with the Stock Exchange within the timeline prescribed under Regulation7(1)(b) of the SEBI (Prohibition of Insider Trading) Regulations 2015. However as ondate the Disclosure has been filed with Stock Exchange.
The Company was not aware of this acquisition by the promoter group and theirshareholding was reflecting under the public category.
Immediately upon realization of this on 24th February 2021 the Company has intimatedthe Registrar and Share Transfer Agent (RTA) to include their shareholding into promotergroup category.
Also as on date the Company has filed the requisite disclosure as per SEBI(Prohibition of Insider Trading) Regulations 2015 to the Bombay Stock Exchange (BSE).
20. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company s internal control systems are commensurate with the nature of itsbusiness and the size and complexity of its operations. This ensures that all transactionsare authorized recorded and reported correctly and assets are safeguarded and protectedagainst loss from un-authorized use or disposition. In addition there are operationalcontrols and fraud risk controls covering the entire spectrum of internal financialcontrols.
21. FRAUD REPORTING:
During the year under review there were no material or serious instances of fraudfalling within the purview of Section 143 (12) of the Companies Act 2013 and rules madethereunder by officers or employees reported by the Statutory Auditors of the Companyduring the course of the audit conducted.
22. COST AUDITORS:
Cost Audit is not applicable to the Company. The Central government has not specifiedmaintenance of cost records for the Company under Sub Section (1) of section 148 of theCompanies Act 2013. Therefore there is no requirement for appointment of Cost Auditors.
23. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Board of your Company is duly constituted in accordance with the requirements ofthe Companies Act 2013 read with the Listing Regulations.
During the year under review there were following changes at the Board level as givenbelow:
l Mr.Navin Jain (DIN: 02213825) was appointed as an Additional Director with effectfrom June 30 2020.
Further the approval of the members of the company was sought in the Annual GeneralMeeting (AGM) held on December 28 2020 for his appointment as Executive Director.
Further the Board has approved the re-appointment of Managing Director in its BoardMeeting held on 30th June 2021
l Mr. Anop Chand Jain (DIN: 02215110) was re-appointed as the Managing Director of thecompany for a period of 3 years commencing from December 17 2021.
l Mr. Gajraj Jain (DIN: 01182117) was re-appointed as the Managing Director of thecompany for a period of 3 years commencing from February 14 2022.
The approval of the members of the company is to be sought in ensuing AGM for theaforesaid re-appointment.
l Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr.Gajraj Jain(DIN: 01182117) Managing Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible has offered himself for the re-appointment. TheBoard recommends his re-appointment for consideration of the members at the ensuing AnnualGeneral Meeting.
24. MEETINGS OF THE BOARD AND ITS COMMITTEES
The details of (a) the meetings of the Board and its Committees held during the year;and (b) composition and terms of reference of the Committees are detailed in the CorporateGovernance Report.
25. CODE OF CONDUCT
The Board has approved a Code of Business Conduct (Code) which is applicable to theMembers of the Board and insiders. The Code of Business has been posted on the Company swebsite (www.rainbowfoundations.in). The Code lays down the standard of conduct which isexpected to be followed by the Directors and the designated employees in their businessdealings and in particular on matters relating to integrity in the work place in businesspractices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:
A)Conservation of energy technology absorption:
The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy and technology absorption have not been furnished considering thenature of activities undertaken by the Company duringthe year under review.
B)Foreign Exchange Earnings and Outgo:
During the period under report your Company had not earned any amount of foreignexchange nor had incurred expenditure in foreign exchange.
27. PARTICULARS OFEMPLOYEES:
The information required pursuant to Section 197(12) read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as Annexure (C) .
A statement containing the names of top ten employees in terms of remuneration drawnand the name of every employee employed throughout the Financial Year was in receipt ofremuneration of Rs.102 lakhs or more or if employed for part of the year and in receiptof Rs.8.50 lakhs or more per month pursuant to Rule 5(2) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 is annexed herewith as Annexure (C).
28. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as the said provisions are not applicable.
29. ANNUAL RETURN:
In accordance with the Companies Act 2013 theannual return in the prescribed formatis available at (www.rainbowfoundations.in.).
30. RISK MANAGEMENT POLICY:
Your Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis.
31. VIGIL MECHANISM POLICY:
The Company has established a vigil mechanism / whistle blower policy for Directors andemployees to report their concerns which is reviewed and updated from time to time. Thesaid policy is available on the Company s website (www.rainbowfoundations.in.)
32. PREVENTION OF SEXUAL HARASSMENT POLICY:
The Disclosure under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 is applicable to your Company.
Your Company has in place an Anti Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013.
During the year under review the Company has not received any complaints from theemployees with regard to Sexual Harassment.
33. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report for the year under review as stipulatedunder Schedule V of the Listing Regulations is forming part of this Annual Report asAnnexure D.
34. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS COURTSTRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE:
During the period under review there are no significant or material orders were passedby the Regulators Courts and Tribunals which affects the Company s going concern statusor operations.
35. DIRECTORS' RESPONSIBILITY STATEMENT:
To the best of our knowledge and belief and according to the information andexplanations obtained by us your Directors make the following statements in terms ofSection 134(3)(c) of the Companies Act 2013:
(a) in the preparation of the annual Financial Statements for the year ended March312021 the applicable accounting standards has been followed along with properexplanation relating to material departures;
(b) your directors have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the company at the end of thefinancial year March 31 2021 and of the profitof the company for the period ended March31 2021;
(c) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
(d) the Annual Financial Statements have been prepared on a going concern basis;and
(e) the directors had devised proper internal systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
(f) that proper systems to ensure compliance with the provisions of all applicable lawswere in place and that such systems were adequate and operating effectively.
Your Directors wish to place on the record their deep sense of appreciation to thedevoted services unstinted support and excellent service rendered by all the customersProfessional colleagues and bankers
| ||FOR RAINBOW FOUNDATIONS LIMITED |
| ||ANOP CHAND JAIN ||GAJRAJ JAIN |
|Place: Chennai ||Managing Director ||Joint Managing Director |
|Date: 14th October 2021 ||DIN: 02215110 ||DIN: 01182117 |