Your Directors present the 16th Annual Report and the audited financialstatements for the financial year ended March 31 2020.
Pursuant to an application filed by Ericsson India Pvt. Ltd before the Hon'ble NationalCompany Law Tribunal Mumbai Bench ("NCLT") in terms of Section 9 of theInsolvency and Bankruptcy Code 2016 read with the rules and regulations framed thereunder("Code") the NCLT had admitted the application and ordered the commencement ofcorporate insolvency resolution process ("CIR process") of the RelianceCommunication Limited ("Company"/ Corporate Debtor) vide its order dated May 152018 ("Admission Order"). The NCLT had pursuant to the Admission Orderappointed an interim resolution professional (IRP) for the Corporate Debtor vide its orderdated May 18 2018. In terms of the Admission Order inter alia the management of theaffairs of the Corporate Debtor was vested with the IRP.
Subsequently the Hon'ble National Company Law Appellate Tribunal ("NCLAT")while adjudicating upon an appeal preferred against the admission of the insolvencyapplication against the Corporate Debtor vide its order dated May 30 2018 interalia stayed the Admission Order and allowed the management of the Corporate Debtor tofunction ("Stay Order"). On April 30 2019 the NCLAT upon allowing thedirector and shareholder of the Corporate Debtor to withdraw its aforesaid appeal vacatedall interim orders including the Stay Order.
Thereafter the Committee of Creditors (CoC) of the Corporate Debtor resolved with therequisite voting share to replace the IRP with the undersigned as the resolutionprofessional for the Corporate Debtor ("RP" or "ResolutionProfessional"). Subsequently the Hon'ble NCLT has appointed Mr. Anish NiranjanNanavaty as the RP for the Corporate Debtor vide its order dated June 21 2019 which waspublished on June 28 201 9.
In accordance with the provisions of the Code various resolution plans in respect ofthe Company were received by the RP The CoC of the Company in their meeting held on March02 2020 had approved a resolution plan submitted by UV Asset Reconstruction CompanyLimited ("Resolution Plan") which was subsequently submitted to the NCLT onMarch 6 2020 in accordance with Section 30(6) of the Code. The same is sub-judice withthe NCLT.
Financial performance and state of the Company's affairs
The standalone financial performance of the Company for the year ended March 31 2020is summarised below:
|Particulars || |
Financial Year ended March 31 2020
* Financial Year ended March 31 2019
| ||Rs in crore ||US$ in million** ||Rs in crore ||US$ in million** |
|Total income ||818 ||109 ||1465 ||212 |
|Gross profit /(Loss) before depreciation Amortisation and exceptional items ||(1429) ||(190) ||(30) ||(4) |
|Less: || || || || |
|Depreciation and amortization ||183 ||24 ||277 ||40 |
|Profit/ (Loss) before Exceptional items and Tax ||(1612) ||(214) ||(307) ||(44) |
|Exceptional items: || || || || |
|(Loss) / Profit on Fair Value of Investments ||(15251) ||(2025) ||8964 ||1296 |
|Profit/ (Loss) before Tax ||(16863) ||(2239) ||8657 ||1252 |
|Current tax / Excess provision for Tax of earlier years ||- || ||- ||- |
|Deferred Tax charge/ (credit) ||- || ||3558 ||515 |
|Profit / (Loss) after tax ||(16863) ||(2239) ||5099 ||737 |
|Profit / (Loss) after tax from Discontinued Operations ||(28475) ||(3780) ||(2252) ||(325) |
|Other Comprehensive Income || || || || |
|Re-measurement Gain/ (Loss) of defined benefit plans ||(45333) ||(6018) ||2847 ||412 |
|(Net of tax) ||5 ||1 ||- ||- |
|Total Comprehensive Income ||(45333) ||(6018) ||2847 ||412 |
|Add : Balance brought forward from previous year ||(14183) ||(1883) ||(17030) ||(2463) |
|Profit available for appropriation || || ||- ||- |
|Balance carried to Balance Sheet ||(59516) ||(7901) ||(14183) ||(2051) |
Figures of previous year have been regrouped and reclassified wherever required.
** Exchange Rate Rs 75.3245 = US$ 1 as on March 31 2020 (' 69.155 = US$ 1 as on March31 2019).
During the year under review your Company has earned from Continuing Operations incomeof Rs 818 crore against Rs 1465 crore in the previous year. The Company has incurred anoperational loss of Rs 30087 crore (including loss from discontinuation of wirelessbusiness of Rs 28475 crore) and including provision for diminution in the value ofInvestment there is a Loss of Rs 45333 crore for the year as compared to profit of Rs2847 crore in the previous year. The performance and financial position of the subsidiarycompanies and associate companies are included in the consolidated financial statement ofthe Company and presented in the Management Discussion and Analysis Report forming part ofthis Annual Report.
The outbreak of COVID-19 pandemic has significantly impacted businesses around theworld. The Government of India ordered a nationwide lockdown initially for 21 days whichwas extended thereafter. Presently the lockdown in Maharashtra is valid till July 312020. This has resulted in significant reduction in economic activities all over India.
However Telecommunication services being essential services are allowed to continueoperation during the period of lockdown. The Company has continued to provide services toits Enterprise customers without any interruptions and honour commitments despite facingall odds during lockdown. The extent to which the COVID-19 pandemic will impact theCompany's future financial results will depend on upcoming developments which are highlyuncertain including among other things any new information concerning the severity ofthe COVID-19 pandemic and the action to mitigate its spread as advised by localauthorities.
During the year under review since the Company is under CIR Process and due to currentyear losses no dividend on the equity shares of the Company has been recommended.
The Company provides telecom services to the business and government segments. Theseinclude a comprehensive portfolio spanning Network Connectivity Cloud Networking DataCenter Services Enterprise Voice Cloud Telephony Access Number Services CollaborationServices Wholesale Voice & Value Added Service (VAS). The Company serves nearly40000 businesses of all sizes-from multinational conglomerates to SMEs-belonging toalmost every vertical: BFSI Manufacturing Logistics Healthcare IT & ITeS OTT andNew Media to name just a few.
With nine world-class data centers spread across key business markets in India (MumbaiBengaluru Chennai & Hyderabad) we are a leading provider of data center services inthe region to hundreds of enterprise customers including many of India's marquee brandsin the BFSI FMCG new media and e-commerce industry segments. These services coverColocation Shared IT Infrastructure and IT Managed Services.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34(2) of the Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 ("Listing Regulations") is presentedin a separate section forming part of this Annual Report.
Issue and Redemption of Non-Convertible Debentures
The Company has not carried out any fresh issue of Non Convertible Debentures (NCDs) inthe current financial year.
NCDs issued during the earlier years matured for final redemption during the financialyear 2018-19 but remains unpaid in view of the ongoing CIR Process.
The Company has never accepted any deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 ("the Act") and the Companies (Acceptanceof Deposits) Rules 2014. There are no unclaimed deposits unclaimed/ unpaid interestrefunds due to the deposit holders or to be deposited with the Investor Education andProtection Fund as on March 31 2020.
Particulars of Loans Guarantees or Investments
The Company has complied with provisions of Section 186 of the Act to the extentapplicable with respect to Loans Guarantees or Investments during the year.
Pursuant to the provisions of Section 186 of the Act the details of the Investmentsmade by the Company are provided in the standalone financial statement under Notes No.2.03 and 2.08.
Subsidiary and Associate Companies
During year under review GCX Limited an overseas step-down subsidiary of the Companydefaulted in payment to 7% Senior Secondary Notes (Notes) amounting to USD 350 millionfallen due for repayment on August 01 2019 and consequently on 15thSeptember 2019 GCX Limited and its subsidiaries/ affiliates had initiated a voluntaryapplication under Chapter 11 of the United States Bankruptcy Code to effectuate aprepackaged plan of reorganization in the District of Delaware court. More than 75% ofBond holders have committed their support for the said plan. Based on the above Controlby the Company over GCX Limited and its subsidiaries has ceased to exist upon initiationof the voluntary application under Chapter 11 of the United States Bankruptcy Code andaccordingly the said Companies were deconsolidated with effect from July 01 2019 for thepurpose of and as per the requirements of Ind AS 110 "Consolidated FinancialStatement". Investment in the deconsolidated subsidiaries has been accounted at fairvalue as per Ind AS 1 09 "Financial Instruments". In addition pursuant to theorder of the District of Delaware court dated December 4 2019 the holder of Notes havebecome entitled to be the owners of GCX Limited in terms of the plan as approved underChapter 11 of the United States Bankruptcy Code on the effective date upon implementationof the approved plan. The plan has been approved by the District of Delaware court onDecember 4 2019 and the plan is pending for implementation.
Pursuant to an application filed by Ericsson India Pvt. Ltd before the Hon'ble NCLT interms of Section 9 of the Code the NCLT had admitted the application and ordered thecommencement of CIR process of the Reliance Infratel Limited and Reliance Telecom Limitedsubsidiary companies vide its order dated May 15 2018. Mr. Anish Niranjan Nanavaty hasbeen appointed as the resolution professional of Reliance Infratel Limited and RelianceTelecom Limited.
Further pursuant to an application filed by State Bank of India under Section 7 of theCode the Hon'ble NCLT vide order dated September 25 2019 ordered the commencement ofCIR process in terms of the Code in respect of Reliance Communications InfrastructureLimited a wholly owned subsidiary of the Company and has appointed Mr. Anish NiranjanNanavaty as the resolution professional of Reliance Communications Infrastructure Limited.
The summary of the performance and financial position of the each of the subsidiary andassociate companies are presented in Form AOC - 1 and in Management Discussion andAnalysis Report forming part of this Annual Report. Also a report on the performance andfinancial position of each of the subsidiary companies and associate companies as per theAct is provided in the consolidated financial statement. Also a report on the performanceand financial positing of each of the subsidiaries associates as per the Act is providedin the consolidated financial statement.
The Policy for determining material subsidiary companies can be accessed on theCompany's website at the link http://www.rcom.co.in/Rcom/about-us/investor-relations/corporate- governance.html.
Standalone and Consolidated Financial Statements
The Audited financial statements of the Company are drawn up both on standalone andconsolidated basis for the financial year ended March 31 2020 in accordance with therequirements of the Companies (Indian Accounting Standard) Rules 2015 (Ind AS) notifiedunder Section 133 of the Act read with relevant rules and other accounting principles.The Consolidated Financial Statement has been prepared in accordance with Ind-AS andrelevant provisions of the Act based on the financial statements received fromsubsidiaries associates as approved by their respective Board of Directors.
As Reliance Infratel Limited Reliance Telecom Limited and Reliance CommunicationsInfrastructure Limited subsidiaries of the Company are under CIR Process financialresults of these companies are approved and received from these companies and accordinglythe Consolidated Financial Statements are prepared.
During the year under review Prof. J. Ramachandran Shri R N Bhardwaj Shri DeepakShourie and Shri A K Purwar completed their term as Independent Directors of the Companyand ceased to be Directors of the Company w.e.f. 16th September 2019.
Further during the year Shri Anil D Ambani Smt. Chhaya Virani and Smt. ManjariKacker have resigned with effect from 15th November 2019; Smt. Ryna Karani hasresigned with effect from 14th November 2019 and Shri Suresh Rangachar hasresigned with effect from 1 3th November 201 9 as Directors of the Company.Certain directors being Shri Anil D Ambani Shri Suresh Rangachar and Smt. Manjari Kackerhave also filed their respective DIR-11 forms with the Registrar of Companies. Theaforementioned resignations were put up to the CoC of the Company for their considerationin accordance with Section 28(1)(j) of the Code. However CoC of the Company at itsmeeting held on November 20 2019 considered the resignations tendered by the abovedirectors and expressed a unanimous view that the resignations cannot be accepted andinstructed the Resolution Professional to convey to the directors to continue with theirduties and responsibilities as directors and provide all cooperation in the corporateinsolvency resolution process at least until the completion of the insolvency resolutionprocess of the Company.
In light of the above it was duly communicated to the aforesaid directors of theCompany that their resignations have not been accepted and they are advised to continue toperform their duties and responsibilities as the directors of the Company and provide allcooperation to Resolution Professional in the CIR process.
Accordingly Shri Anil D Ambani Smt. Chhaya Virani Smt. Manjari Kacker Smt. RynaKarani and Shri Suresh Rangachar continues to be on the composition of the board ofdirectors and the respective committees of the Company.
Due to abovementioned events Company has not received necessary Annual disclosures asrequired under section 164(2) and Section 184(1) of the Companies Act 2013 from Shri AnilD Ambani Smt. Chhaya Virani Smt. Ryna Karani Smt. Manjari Kacker and Shri SureshRangachar Directors of the Company.
Shri Vishwanath Devaraja Rao was appointed as an Executive Director and Chief FinancialOfficer of the Company with effect from 19th November 2019 on account of thevacancy created by the resignation of Shri Manikantan V w.e.f. November 19 2019 as theDirector and Chief Financial Officer of the Company notice of which was received by theCompany on October 4 2019 and approved by the COC of the Company in its meeting held onNovember 13 2019 and passing of resolution through e-voting for which voting concludedon November 19 2019.
The Directors and Resolution Professional of the Company places on record their sincereappreciation for the valuable contribution made by Prof. J. Ramachandran Shri R NBhardwaj Shri Deepak Shourie Shri A K Purwar and Shri Manikantan V during their tenureas Directors of the Company.
In terms of the provisions of the Companies Act 2013 Shri Punit Garg Director of theCompany retires by rotation and being eligible offers himself for reappointment at theensuing AGM.
A brief profile of Shri Punit Garg along with requisite details as stipulated underRegulation 36(3) of the Listing Regulations are provided in this Annual Report.
The details of programme for familiarization of Independent Directors with the Companynature of the industry in which the Company operates and related matters are placed on thewebsite of the Company at the link http://www.rcom.co.in/Rcom/about-us/investor-relations/corporate-governance.html. In the opinion of the Boardthe Independent Directors possess the requisite expertise and experience and are thepersons of high integrity and repute. They fulfill the conditions specified in the Act andthe Rules made thereunder and are independent of the management.
Key Managerial Personnel
Shri Punit Garg ceased to be Executive Director of the Company w.e.f. 5thApril 2019 however he is continuing as a Non Executive Director of the Company.
Shri Rakesh Gupta has been appointed as the Company Secretary and Compliance Officer ofthe Company with effect from 20th July 2019 pursuant to the resignation ofShri Prakash Shenoy as the Company Secretary and Compliance officer of the Company witheffect from July 19 2019 which has been duly approved by the Committee of Creditors(CoC) of the Company in its meeting held on July 9 2019.
Shri Vishwanath Devaraja Rao has been appointed as the Executive Director and ChiefFinancial Officer of the Company with effect from November 19 2019 on account of thevacancy created by the resignation of Shri Manikantan V as the Director and ChiefFinancial Officer of the Company as approved by the CoC of the Company in its meeting heldon November 13 2019 and passing of resolution through e-voting which voting concludedon November 19 2019.
Except as mentioned above there was no change in the Key Managerial Personnel of theCompany.
Policy on appointment and remuneration for Directors Key Managerial Personnel andSenior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy forselection appointment and remuneration of Directors Key Managerial Personnel and SeniorManagement Employees. The Committee has formulated the criteria for determiningqualifications positive attributes and independence of a Director which has been put upon the Company's website at http://www.rcom.co.in/investorrelations and also is attachedas Annexure - A.
Currently as the Company is under CIR Process the approval of CoC is necessary forthe appointment and remuneration of Directors and Key Managerial personnel of the Company.
Directors' Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors'Responsibility Statement it is hereby confirmed that:
i In preparation of the annual accounts for the financial year ended March 31 2020the applicable Accounting Standards had been followed along with proper explanationrelating to material departures if any;
ii The Directors had selected such accounting policies and applied them consistentlyand made judgments 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 2020 and of the loss ofthe Company for the year ended on that date;
iii The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
iv The Directors had prepared the annual financial statements for the financial yearended March 31 2020 on a 'going concern' basis;
v The Directors had laid down internal financial controls to be followed by the Companyand such financial controls are adequate and are operating effectively and
vi The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
Note: Since the Company is under CIR Process management of the affairs of theCompany is vested with Resolution Professional all the above mentioned duties andresponsibility of Directors have been performed by directors under the direction of RP ofthe Company.
Contracts and Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company during thefinancial year under review with related parties were on an arm's length basis and in theordinary course of business. There were no materially significant related partytransactions made by the Company with Promoters Directors Key Managerial Personnel orother designated persons which may have a potential conflict with the interest of theCompany at large.
During the year the Company has not entered in to any contract / arrangement /transaction with related parties which could be considered material in accordance with thepolicy of Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval.Omnibus approval of the Audit Committee was obtained for the transactions which were of arepetitive nature. The transactions entered into pursuant to the omnibus approval sogranted were reviewed and statements giving details of all related party transactions wereplaced before the Audit Committee on a quarterly basis.
During the year under review as the Company is under CIR Process in terms of Section28(1 )(f) of the Code approval of the CoC was taken for related party transactions in CoCmeeting(s) held on October 3 2019 and November 25 2019 and February 24 2020.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website at the link http://www.rcom.co.in/Rcom/about-us/investor-relations/corporate- governance.html. None of theDirectors has any pecuniary relationships or transactions vis-a-vis the Company.
There are no transactions entered by the Company with persons / entities as mentionedin Regulation 34 (3) and 53 (f) in Schedule V A 2A of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Material Changes and Commitments if any affecting the financial position of theCompany
Except as disclosed in this report there were no material changes and commitmentsaffecting the financial position of the Company which have occurred between the end of thefinancial year and the date of this report.
Meetings of the Board
A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe financial year ended March 31 2020 the Directors held 3 meetings and in addition toabove- mentioned Directors meetings on May 27 201 9 the Interim Resolution Professionalof the Company ("IRP") held a meeting with the management of the Company forconsidering and approving the audited financial results for the financial year ended March31 2020 in terms of Section 134 of the Companies Act 2013 and Regulation 33 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.
The additional details about aforesaid meetings are given in the Corporate GovernanceReport forming part of this report.
The Audit Committee of the Directors consists of Independent Directors namely Smt.Manjari Kacker Chairperson Smt. Ryna
Karani Smt. Chhaya Virani and Non Independent Directors Shri Punit Garg ShriVishwanath Devaraja Rao as members.
During the year all the recommendations made by the Audit Committee were accepted bythe Directors and RP of the Company.
Auditors and Auditors' Report
At the 12th Annual General Meeting (AGM) held on September 27 201 6 M/s.Pathak H.D. & Associates Chartered Accountants were appointed as the statutoryauditors of the Company to hold office till the conclusion of the 17th AGM.Pursuant to the provisions of Section 139 of the Act and the Companies (Audit andAuditors) Rules 2014 M/s. Pathak H.D. & Associates Chartered Accountants theStatutory Auditors of the Company have been appointed as Auditors for a term of 5 years.The Company has received a confirmation from the said Auditors that they are notdisqualified to act as the Auditors and are eligible to hold the office as Auditors of theCompany.
The Auditors in their report to the members have given a qualified opinion and theresponse of the Company with respect to it is as follows:
Considering various factors including admission of the Corporate Debtor and its threesubsidiaries; RTL RITL and RCIL to CIRP under the Code there are various claimssubmitted by the operational creditors the financial creditors employees and othercreditors. The overall obligations and liabilities including obligation for interest onloans and the principal rupee amount in respect of loans including foreign currencydenominated loans shall be determined during the CIRP and accounting impact if any will begiven on completion of CIRP. Further prior to May 15 2018 the Corporate Debtor and itssaid subsidiaries were under Strategic Debt Restructuring (SDR) and asset monetization anddebt resolution plan was being worked out. The Company has not provided Interest of Rs4212 crore (' 4748 crore in case of consolidated) calculated based on basic rate ofinterest as per terms of loan for the year ended March 31 2020 and foreign exchangevariation aggregating to Rs 1313 crore loss (' 1609 loss in case of consolidated) forthe year ended March 31 2020. Had the Corporate Debtor provided Interest and foreignexchange variation the Loss would have been higher by Rs 5 525 crore (' 6357 crore incase of consolidated) for the year ended March 31 2020.
On completion of the corporate insolvency resolution process the Company will carryout a comprehensive review of all the assets including investment in subsidiaries andliabilities which are pending for confirmation and accordingly provide for impairment ofassets and write back of liabilities if any. Further the Company is in the process ofreconciling Goods & Service Tax (GST) and Tax Deducted at source.
Considering these developments including in particular the RP having taken over themanagement and control of the Corporate Debtor and its three subsidiaries (Group) interalia with the objective of running them as going concerns the financial results continueto be prepared on going concern basis. However since the Group continues to incur losscurrent liabilities exceed current assets and Group has defaulted in repayment ofborrowings payment of regulatory and statutory dues these events indicate that materialuncertainty exists that may cast significant doubt on Group's ability to continue as agoing concern.
The Company's assets are held for sale as per Ind AS 105 and accordingly leaseagreements are considered to be short term in nature and Ind AS 116 has not been applied.
The observations and comments given by the Auditors in their report read together withnotes on financial statements are self explanatory particularly Note No. 2.15 2.31 2.48and 2.52 (standalone financials) and 2.16 2.41 2.53 2.60 and 2.61 (consolidatedfinancials) and hence the same to be treated as explanation provided under Section 134 ofthe Act.
The audited financial statement are drawn up both on standalone and consolidated basisfor the financial year ended March 31 2020 in accordance with the requirements of theInd-AS Rules.
As per the provisions of Clause (ca) of Sub-section (3) of Section 134 of the Act theauditors of the Company have not reported any fraud under sub-section (12) of Section 143of the Act.
Pursuant to the provisions of the Act and the Companies (Cost Records and Audit) Rules2014 the Resolution Professional on the recommendation of directors in a meeting dated 31stJuly 2020 have appointed M/s. V. J. Talati & Co. Cost Accountants as the CostAuditors to conduct cost audit for the telecommunications businesses of the Company forthe financial year ending March 31 2021 and their remuneration is subject to ratificationby the Members at the ensuing Annual General Meeting of the Company.
The Provisions of Section 148(1) of the Act are applicable to the Company andaccordingly the Company has maintained cost accounts and records in respect of theapplicable products for the year ended March 31 2020.
During the year under review the Company has complied with the applicable SecretarialStandards issued by The Institute of Company Secretaries of India.
Secretarial Audit & Secretarial Compliance Report
Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the ResolutionProfessional on the recommendation of Directors had appointed M/s. Ashita Kaul &Associates Company Secretaries in Practice to undertake the Secretarial Audit of theCompany. There is no qualification reservation or adverse remark made in theirSecretarial Audit Report submitted to the Company. The Secretarial Audit Report isattached herewith as Annexure B.
Pursuant to circular No. CIR/ CFD/ CMD1 / 27/ 2019 dated February 08 2019 issued bythe Securities and Exchange Board of India (SEBI) the Company has obtained AnnualSecretarial Compliance Report from a Practicing Company Secretary (PCS) on compliance ofall applicable SEBI Regulations and circulars/ guidelines issued there under and the copyof the same shall be submitted with the Stock Exchanges within the prescribed due date.
As required under Section 134(3)(a) of the Act the Annual Return for the financialyear 2019-20 is put up on the Company's website and can be accessed at https://www.rcom.co.in/investor-relations-Annual Return.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 (theRules) as amended a statement showing the names and other particulars of the employeesdrawing remuneration in excess of the limits set out in the said Rules are provided in theAnnual Report. Disclosures relating to the remuneration and other details as requiredunder Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended also forms part of thisAnnual Report.
However having regard to the provisions of second proviso to Section 136(1) of theAct the Annual Report excluding the aforesaid information is being sent to all themembers of the Company and others entitled thereto. Any member interested in obtaining thesame may write to the Company Secretary and the same will be furnished on request.
Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo
As the Company does not carry on any manufacturing activity being a telecommunicationsservice provider most of the information of the Company as required under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules 2014 are notapplicable. However the information as applicable has been given in the Annexure Cforming part of this Report.
The Company has adopted the "Reliance Group-Corporate Governance Policies and Codeof Conduct" which sets out the systems process and policies confirming to theinternational standards. The report on Corporate Governance as stipulated under Regulation34(3) read with Para C of Schedule V of the Listing Regulations is presented in separatesection forming part of this Annual Report
A Certificate from M/s. Ashita Kaul & Associates Practicing Company Secretaryconforming compliance to the conditions of Corporate Governance as stipulated under Para Eof Schedule V of the Listing Regulations is enclosed to this Report.
Ombudspersons & Whistle Blower (Vigil Mechanism)
The Company has formulated an Ombudspersons & Whistle Blower (Vigil Mechanism) toaddress the genuine concern if any of the directors and employees. The details of thesame have been stated in the Report on Corporate Governance and the policy can also beaccessed on the Company's website at www.rcom.co.in
The Company had constituted a Risk Management Committee in the Board of Directorsmeeting held on 14th November 2014 consisting of majority of directors andsenior managerial personnel of the Company; however these mandatory provisions of ListingRegulations are not applicable to the Company. The Board of Directors of the Company hasdissolved the Risk Management Committee in its meeting held on 3rd November2018. Audit Committee looks after the functions of the Risk Management Committee.
The Company is currently under corporate insolvency resolution process pursuant to theprovisions of the Insolvency and Bankruptcy Code 201 6 and considering these developmentsincluding in particular the RP having taken over the management and control of theCompany and its three subsidiaries (Group) inter alia with the objective of running themas going concerns the Company continues to incur loss current liabilities exceed currentassets and Group has defaulted in repayment of borrowings payment of regulatory andstatutory dues these events indicate that material uncertainty exists that may castsignificant doubt on Group's ability to continue as a going concern. The Auditors havedrawn qualification in their Audit Report for the quarter and year ended March 31 2020.
Further the Company has a robust Business Risk Management framework to identifyevaluate business risks and opportunities. This framework seeks to create transparencyminimize adverse impact on the business objectives and enhances Company's competitiveadvantage. The business risk framework defines the risk management approach across theenterprise at various levels including documentation and reporting.
The risk framework has different risk models which helps in identifying risks trendexposure and potential impact analysis at a Company level as also separately for businesssegments.
Compliance with provisions of Sexual Harassment of Women at workplace (PreventionProhibition and Redressal) Act 2013
The Company is committed to uphold and maintain the dignity of women employees and ithas in place a policy which provides for protection against sexual harassment of women atwork place and for prevention and redressal of such complaints. During the year one suchcomplaints was received and the same was redressed immediately.
The Company has also constituted an Internal Compliance Committee under the SexualHarassment of Women at workplace (Prevention Prohibition and Redressal) Act 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility Committee in compliancewith the provisions of Section 135 of the Act read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. The Corporate Social Responsibility Committee hasformulated a Corporate Social Responsibility Policy (CSR policy) indicating the activitiesto be undertaken by the Company. The CSR policy may be accessed on the Company's websiteat the link; http://www.rcom.co.in/Rcom/about-us/investor-relations/corporate-governance.html.
The CSR Committee as on March 31 2020 comprised of Smt. Manjari Kacker as Chairpersonand Shri Punit Garg Shri Vishwanath Devaraja Rao Smt. Ryna Karani and Smt. Chhaya Viranias members. The annual report on CSR activities is annexed as Annexure D.
Orders if any passed by Regulators or Courts or Tribunals
Except as disclosed in this report no orders have been passed by the Regulators orCourts or Tribunals impacting the going concern status and the Company's operation.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls across the organization.The same is subject to review periodically by the Internal Audit Cell and by the AuditCommittee for its effectiveness.
During the year such controls were tested and no reportable material weaknesses in thedesign or operation were observed.
Business Responsibility Report
Business Responsibility Report for the year under review as stipulated under theListing Regulations is presented under separate section forming part of this AnnualReport.
Your Directors express their sincere appreciation for the cooperation and assistancereceived from shareholders debenture holders bankers financial institutions regulatory
bodies government Authorities debenture trustee and other business constituentsduring the year under review. The Directors express their sincere thanks to the ResolutionProfessional and Committee of Creditors of the Company for continuous support during theyear. Your Directors also wish to place on record their deep sense of appreciation for thecommitment displayed by all executives officers and staff and look forward to theircontinued support in future.
|Punit Garg ||Vishwanath Devaraja Rao |
|Non Executive Director ||Executive Director and Chief Financial Officer |
|Place: Mumbai || |
|Date : July 31 2020 || |