The Members Rolta India Limited
Your Directors are pleased to present the 30th Annual Report on thebusiness & operations of your Company together with Audited Financial Statements &Auditor's Report for the Financial Year ended March 31 2020.
FINANCIAL HIGHLIGHTS & REVIEW OF PERFORMANCE
The Company's financial performance for the year ended March 31 2020is summarised below:
(' in Crores)
| || |
| ||Financial year ended March 3 1 2020 ||Financial year ended March 31 2019 |
|Revenue || || |
|Sales of IT Solutions and Services ||1492.67 ||2161.29 |
|Other Income ||10.98 ||10.74 |
|Total Revenue ||1503.65 ||2172.03 |
|Expenses || || |
|Cost of Materials & Technical Sub-contractors ||1005.32 ||1104.45 |
|Employee Benefit Expenses ||429.21 ||537.90 |
|Finance Costs ||773.56 ||846.57 |
|Depreciation and Amortization Expenses ||247.67 ||253.17 |
|Other Expenses ||139.38 ||264.69 |
|Exchange Difference Gain / (Loss) ||44.16 ||172.81 |
|Total Expenses ||2639.30 ||3179.59 |
|Profit / (Loss) before Exceptional items and tax ||(1135.65) ||(1007.56) |
|Exceptional Items || || |
|Provision cum Write off of Debtors ||77.99 ||3836.37 |
|Reversal of FY 2018-19 adjustment for Realised Foreign Exchange Difference ||(122.74) ||- |
|Profit / (Loss) before Tax ||(1090.89) ||(4843.93) |
|Tax expense / benefit ||175.98 ||1186.51 |
|Profit / (Loss) for the year ||(914.91) ||(3657.42) |
Results of Operations and the State of Company's Affair
During the financial year 2019-2020 your Company has registeredconsolidated revenue for financial year ended March 31 2020 at ' 1492.67 Crore against '2161.29 Crore in previous year registering a decrease in Year-on-Year (30.94%).Consolidated loss after tax for the financial year ended March 31 2020 is ' (914.91)Crore as against loss of ' (3657.42) Crore in the previous year registering a decrease inYear-on-
Year loss of (74.98%). The basic Earnings Per Share after exceptionalitem and tax for the financial year ended March 31 2020 is ' (55.2) as against previousperiod ' (220.7). The basic Earnings Per Share was computed by considering the weightedaverage number of shares outstanding during the period as per the provisions of'Accounting Standard 20' notified under Section 133 of the Companies Act 2013 read withRule 7 of Companies (Accounts) Rule 2014.
The Financial performance on Standalone basis is as follows:
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Financial year ended March 31 2020
|Financial year ended March 3 1 2019 |
|Revenue || || |
|Sales of IT Solutions and Services || |
|Other Income || |
|Total Revenue || |
|Expenses || || |
|Cost of Materials & Technical Sub-contractors || |
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| || |
Financial year ended March 31 2020
Financial year ended March 3 1 2019
|Employee Benefit Expenses || |
|Finance Costs || |
|Depreciation and Amortization Expenses || |
|Other Expenses || |
|Exchange Difference Gain / (Loss) || |
|Total Expenses || |
|Profit / (Loss) Before Exceptional Items and Tax || |
|Exceptional Items || || |
|US Bond Liability || || |
|Provision cum Write off of Debtors || |
|Reversal of FY 2018-19 adjustment for Realised Foreign Exchange Difference || |
|Profit / (Loss) Before Tax || |
|Tax Expenses/ Deferred tax assets || |
|Profit / (Loss) for the year || |
The Company's standalone revenue was ' 79.67 Crore for the financialyear ended March 31 2020 as against ' 675.70 Crore for the previous financial year endedMarch 31 2019 representing (88.21%) decrease. The Profit after tax for the financial yearended March 31 2020 is ' (596.85) Crore as against ' (2494.87) Crore in the previousfinancial year ended March 31 2019 representing a decrease of (76.08 %).
The company's standalone net worth is ' 960.64 crore as on March 312020 and ' 1569.81 crore in March 31 2019. The book value per share on a standalonebasis as on March 31 2020 is ' 57.91 as against ' 94.71 as on March 31 2019.
BUSINESS OPERATIONS OVERVIEW AND OUTLOOK Business Overview
Digital Transformation has emerged as a driver of sweeping change inthe world around us. It is the integration of digital technology into all areas of abusiness resulting in fundamental changes of how businesses operate and how they delivervalue to customers. This digital revolution is being fuelled by technologies such as theCloud Mobility Enterprise/ Cyber Security Internet of Things (IoT) and Big DataAnalytics amongst others. The annexure of these technologies and the pervasive hyperconnected networks is responsible for the deluge of digital data and is posing majorchallenges to organizations. With over 80% of digital data having a locational contextadding a geospatial dimension is vital for deeper insights. Globally organizationscutting across Industries are increasingly demanding Digital Transformation solutions toremain relevant and succeed in the Digital Economy.
Rolta has been charting a course to constantly transform itself toremain relevant in the face of relentlessly changing digital technologies and market needswhile remaining focused on core competencies. Rolta with its rare combination of deepGeospatial and Engineering expertise combined with its IT process and differentiated IPbased software packages has established an enviable track record to help its customers ontheir Digital Transformation in each of the areas it serves.
Rolta currently operates in the following verticals-
Defence and Security
Rolta continues to be in a leadership position in the Indian Defenceand Security software market of Command and Control (C2) & Intelligence
Surveillance and Reconnaissance (ISR) and assisting them to us hereintheir Digital Transformation.
War Gaming: Rolta has developed indigenous software application forAakrosh the Indian Army's War gaming project for Counter Insurgency and CounterTerrorism(CI/CT) operations. This will meet the Army's need for smart solutions to providedynamic and cost-effective training by simulating operational and strategic scenarios. Itis first of its kind War gaming solution for training Battalion/Company and Platoon levelsof the Indian Army to meet the real challenges being faced by them.
Defence Security: Rolta's indigenous Defence Security Solutionsincludes world-class IP of Rolta products. Rolta continues to play a strong role in theDefence Security market in India by providing a full gamut of solutions like BorderSecurity Management Critical Military Infrastructure Protection like Naval AirfieldAirforce Airfield Defence Cyber Security Coastal Security Vessel Traffic ManagementSolution (VTMS) to Army to BSF to Navy to Airforce.
Geospatial Solutions: With decades of expertise and leadership in theGeospatial technologies Rolta has built a formidable track record and IP for replicableSmart City Solutions which include creation of rich geospatial enabled digitalrepositories build geo enabled business critical applications and deep learning basedadvanced geospatial analytics to drive business outcomes. Rolta has been successfullyleveraging its Geospatial expertise and proven IP in the areas of Smart Cities and e-Governance. The Company has built an enviable portfolio for addressing a wide spectrum ofSmart City requirements cutting across Utilities Transportation Environment LandManagement Public Works Urban Planning Disaster Management and Safety amongst others.These products typically provide intuitive actionable insights by contextually integratingnumerous agencycentric systems while also offering visually rich means of collaborationand communication of spatial data. Rolta has deployed till date more than 400 geospatialenabled Smart City projects in various parts of the world across Canada North AmericaEurope Middle East and India.
Enterprise IT Cloud Mobility and Cyber Security Solutions:
Technology advances in Infrastructure solutions are enabling businessleaders to drastically reduce the high capital costs associated with IT and disruptiveimplementation time as they move into Cloud and hybrid Cloud based solutions. Customersare increasingly looking for a single vendor capable of designing delivering optimizingand subsequently managing their Enterprise wide solutions. Rolta's focus in the area ofEnterprise deliver end-to-end solutions addressing a variety of Enterprise
IT Converged System Cloud Transformation Mobility and Enterprise/Cyber Security requirements by combining its innovative IP and technical skills resultinginsignificant success and traction globally.
Big Data Analytics: The Internet of Things (IoT) and Big Data are twoemerging technologies that are changing the way business is done and is gaining remarkablemomentum world over. It is imperative for organizations embarking on Big Data InformationManagement journey to migrate and consolidate their data and reporting landscape to nextgeneration high performance analytics platforms supporting self-service BI to empowerbusiness users in the digital age while also optimizing their recurring IT costs.Organisations who recognize the fundamental value in this data and learn to extract itwill be able to reap the huge benefits. Rolta's rich heritage of creating an designingdigital repositories enriched with geospatial and engineering data has uniquely positionedthe Company to analyse complex at a patterns and thereby extract deep insights from thedigital data. This is enabling the Company to address the Industry 4.0 Digital enterpriseprograms that process manufacturing industries are embarking on. The Company addresses thefull spectrum of IoT and Big Data analytics maturity journey covering initial advisorydata discovery enablement of big data landscape establishing an asset information model(AIM) to secure IoT integration and culminating in advanced analytics.
Rolta Today: The Company is in position to help various organizationsand government bodies to accelerate the digital transformation by abstracting thecomplexities of the nexus of technologies such as Geospatial Engineering Big DataInternet of Things Cloud Cyber Security Mobility and Social Media through Roltasdigital transformation platforms and solutions built on growing portfolio of IPs andreplicable software solutions. Rolta had been uniquely leveraging the exceptionalcombination of IT Geospatial and Engineering domains addressing high growth verticalswith proven Rolta IP led solutions panning across many Patents together with registeredcopyrights for software packages. Company will make better and optimum utilization of itsIPs and solutions after ongoing restructuring gets complete during FY 2021-22
Your Directors have not recommended any dividend for the Financial Yearended March 31 2020. No amount has been transferred to reserve during the year. TheCompany had transferred a sum ' 7051278/- during the financial year 2019-20 to theInvestor Education and Protection Fund established by the Central Government. The Saidamount represents Unclaimed Dividend for the financial year 2011-12 with the Company for aperiod of 7 years from the date of payment
The paid up equity share capital of the Company as on March 31 2020was ' 1658913550/- divided into 165891355 equity shares of '10/- each. During theyear under review the Company has not allotted any shares under ESOP Plan. Further theCompany has not issued shares with differential voting rights. The Company has not issuedsweat equity shares and does not have any scheme to fund its employees to purchase theshares of the Company.
Pursuant to the Rule 6 (5) of the Investor Education and ProtectionFund Authority (Accounting Audit Transfer and Refund) Rules 2016 the Company is yet totransfer 108764 Equity Shares of ' 10/- each to Investor Education Protection Fund(IEPF) Account for the Financial Year 2009-10.
EXTRACT OF THE ANNUAL RETURN
Pursuant to the provisions of Section 92(1) of the Companies Act 2013('Act') as amended by the Companies Amendment Act 2017 the extract of Annual Return inForm MGT-9 is provided under "Annexure-D" to this Report. Further pursuant toSection 134 (3) (a) of the Act a copy of the Annual Return is uploaded on the website ofthe Company and the web link of which is: http://www.rolta.com/wp-content/uploads//pdfs/investor-relations/MGT_9_Annexure_D04122020_07.12.2020.pdf
NUMBER OF MEETINGS OF THE BOARD
A calendar of Meetings is prepared and circulated in advance to theDirectors. During the financial year ended March 31 2020 Eight (8) meetings of the Boardwere held with a minimum of one meeting in each quarter in a year and not more than onehundred and twenty days has intervened between two consecutive meetings of the Board. Fordetails of the meetings of the Board please refer to the Corporate Governance Reportwhich forms part of this report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
In pursuant to the provisions of section 177(9) & (10) of theCompanies Act 2013 the Company has established a Vigil Mechanism named Whistle BlowerPolicy (WBP) to provide a formal mechanism to the directors and employees to report theirgenuine concerns about unethical behavior actual or suspected fraud or violation of theCompany's Code of Conduct if any. No personnel has been denied access to the AuditCommittee pertaining to reporting his/her concern(s) as per WBP mechanism. The details ofthe WBP is explained in the Corporate Governance Report and also posted on the website ofthe Company.
Your Company hereby affirms that no complaints were received during theyear.
RISK MANAGEMENT POLICY
The Company has adopted a Risk Management Policy in accordance with theprovisions of the Companies Act 2013. The Company reviews the execution of RiskManagement Plan and ensures its effectiveness including identification evaluatingmonitoring and minimizing identifiable risks.
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 ('Listing Regulations') Boardhas carried out an annual evaluation of its own performance the Directors individually aswell as the evaluation of the working of its Committee(s) after seeking inputs from allthe Directors excluding the Director being evaluated. The details of the Board evaluationis explained in the Corporate Governance Report which forms part of this report.
The Board has on the recommendation of the Nomination &Remuneration Committee (NRC) framed a policy for selection and appointment of DirectorsTop Management and their remuneration. The Company's remuneration policy is driven by thesuccess and performance of the individual employee and the Company.
The key objective of this policy is:
a) formulation of the criteria for determining qualifications positiveattributes and independence of a director and recommend to the board of directors a policyrelating to the remuneration of the directors key managerial personnel and otheremployees;
b) formulation of criteria for evaluation of performance of independentdirectors and the board of directors;
c) devising a policy on diversity of board of directors;
d) identifying persons who are qualified to become directors and whomay be appointed in senior management in accordance with the criteria laid down andrecommend to the board of directors their appointment and removal.
e) whether to extend or continue the term of appointment of theindependent director on the basis of the report of performance evaluation of independentdirectors.
f) Key Managerial Personnel and Top Management. The authority toidentify right candidates for the appointment of Top Management is vested with theChairman & Managing Director. The Human Resource Department facilitate in identifyingthe candidates internally or externally. NRC consider the candidates proposed by theChairman & Managing Director and recommend to the Board for its consideration andappointment in accordance with the applicable provisions of the Act and Rules.
COMPOSITION OF AUDIT COMMITTEE
Audit Committee of the Company has been constituted in line with theprovisions of Regulation 18 of the Listing Regulations read with Section 177 of theCompanies Act 2013. The members of Audit Committee comprised of Ms. Homai A Daruwalla(Chairperson) Mr. Ramnath Pradeep and Lt. Gen. Padam Pal Singh Bhandari (Retd.) Moredetails of the Audit Committee are given in the Corporate Governance Report.
EMPLOYEES STOCK OPTION SCHEME
In accordance with the Employee Stock Options Plan of the company1862500 Options are outstanding at beginning of the year. No options were granted duringthe year under consideration. During the year under review 225000 Options have lapsedand Nil Options have been exercised. Accordingly there were 1637500 Options outstandingat end of the financial year. The particulars required under the SEBI (Share BasedEmployee Benefits) Regulations 2014 are annexed to and forms part of this report as"Annexure F".
No employee was issued Stock Options during the year under review.
PREVENTION OF INSIDER TRADING
The Company has formulated a policy for Prevention of Insider Tradingwith a view to regulate monitor and report trading by its employees and other connectedpersons in compliance with the SEBI (Prohibition of Insider Trading) Regulations 2015 andthe same has been posted on the website of the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:
a) in the preparation of the annual accounts the applicable accountingstandards had been followed and there are no material departures-
b) they 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 and of the profit and loss of the Company for that period
c) they 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) they have prepared the annual accounts on a going concern basis
e) they have laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively and
f) they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
i. Statutory Auditors
In the Annual General Meeting (AGM) held on August 20 2016 M/s. N MRaiji & Co. Chartered Accountants have been appointed Statutory Auditors of theCompany for a period of Four (4) years to hold office till the conclusion of the AGM to beheld in the Calendar year 2020 (subject to ratification by the members at every AGM).Accordingly M/s. N M
Raiji & Co. Statutory Auditor of the Company will hold officeuntil the conclusion of the 30th Annual General Meeting.
During the year under review Statutory Auditors have expressed theirqualified opinion/remarks in the Audit Report & comments of the Board of Directors areas under:
a) The Company at the time of its transition to Ind AS effective April1 2015 had opted for and adopted and revaluation model for its land and buildings inaccordance with Ind AS 16- property Plant & Equipment. As per Para 34 of Ind AS 16the Company ought to have as on March 31 2020 carried out the revaluation of the landand buildings that it had revalued at the time of transition to Ind AS. The Management hasrepresented that due to the continuing COVID 19 lockdown it has not been able to get therevaluation done. Consequently we are unable to ascertain the impact on the financialstatements for the year ended as on March 31 2020. On account of the revaluation nothaving been carried out (refer note no. 5 of the Statement)
b) In February 2020 Tower C which was situated in the same complex asthe corporate office caught fire causing substantial damage to the building and the assetshoused therein (refer note 6 of the Statement). We are informed that due to continuingCOVID 19 lockdown situation except for the police panchanama no further progress hastaken place for assessment of the extent of damage (repairs v/s reconstruction of Tower C)and that the insurance company has also deferred the survey of the property. The writtendown value of Tower C as on March 31 2020 is ' 162.59 crores which comprises of thehistorical cost component of ' 12.69 crores and revalued component of ' 149.90 crores.Since it has not been possible to assess the extent of damage to Tower C the Company hascontinued to retain its written down value of ' 162.59 crores under the head Buildings. Assuch we are presently unable to ascertain the extent to which the value of tower C oughtto have been written down in the books.
a) Due to continued COVID-19 lockdown situation the company is unableto undertake revaluation of its land and buildings in accordance with the requirement ofIND-AS 16 Property Plant and Equipments. The company will take suitable steps to complywith the requirements of IND-AS 16 during the current financial year as soon as thelockdown situation improves.
b) In February 2020 Tower 'C' which is situated in the same complexas the Corporate Office and having written down value of '162.59 crores caught fire due toshort circuit causing substantial damage to the building and the assets housed therein.However due to the ongoing COVID 19 lockdown apart from the police panchnama no furtherwork could be undertaken for ascertaining the extent of damage and for initiating theprocess for lodging of the insurance claim under reinstatement policy. Under thecircumstances Company has been compelled to retain the said written down value under thehead Buildings.
Further the observations and comments given by Auditors in theirReport read together with notes to Accounts are self-explanatory and hence do not call forany further comments under Section 134 of the Companies Act 2013 and Rules madethereunder.
ii. Secretarial Audit Report
In terms of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company had appointed CS Sunita Dube Practicing Company Secretary (ACS No. 48556COP No. 17708) as the Secretarial Auditor of the Company to undertake the SecretarialAudit of the Company for the financial year ended March 31 2020. The report of the saidSecretarial Auditor is enclosed as "Annexure E" to this report in form MR-3. Theobservations given by Secretarial Auditor have been subsequently complied with by theCompany.
SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of the Company and itssubsidiaries prepared in accordance with the Accounting Standard 21 notified underSection 133 the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rule2014 form part of the Annual Report and are reflected in the Consolidated FinancialStatements of the Company.
As on March 31 2020 the Company has 3 Indian subsidiaries out ofwhich 2 are wholly owned subsidiaries and 11 Direct / Indirect 100% overseas subsidiaries.The Company has reorganized during the current year its various business groupsconsidering the present challenges being faced by the Company. In the month of May 2019Rolta Benelux B.V. Netherlands a step down subsidiary of the Company has beenderegistered in accordance with the local laws since there were no significantoperations in this company during the past few years.
Section 136 of the Companies Act 2013 has exempted companies fromattaching the annual reports and other particulars of its subsidiary Companies along withthe annual report of the Company. Accordingly the Annual Reports of the subsidiaries arenot attached with this Annual Report. However statement containing salient features ofthe financial statements of subsidiaries as per 129 (3) of the Act is also included inthis Annual Report in "Form AOC- 1" as "Annexure A". The financialstatements of the subsidiary companies are available for inspection of the shareholders atthe Registered Office of the Company during the working hours.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
None of the transaction with related parties falls under the scope ofSection 188(1) of the Act. Information on transaction with related parties pursuant toSection 134(3) (h) of the Act read with rule 8(2) of the Companies (Accounts) Rules 2014are given in "Annexure B" in "Form AOC-2" and the same forms part ofthis report.
MATERIAL CHANGES AND COMMITMENTS IF ANY
The Company had made an announcement on the Stock Exchanges at BombayStock Exchange and National Stock Exchange on May 11 2019 announcing an investment of '5500 crore by a international group "The Streamcast Group". Further inconjunction to this the Company executed Definitive Restructuring Services Agreement (RSA)with Streamcast Group on
August 6 2019 under the terms of which Streamcast Group will assistRolta in repayment and restructuring its liabilities (including providing financialassistance) commencing with immediate effect.
Except for the above mentioned Investment announcement for ' 5500/-crore Investment by Investor group and definitive RSA read alongwith the informationprovided in para below regarding orders passed by the regulators of courts / tribunalsthere has been no other material changes and commitments affecting the financial positionof the Company during the financial year.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
Details of Loans Guarantees and Investments covered under theprovisions of Section 186 of the Companies Act 2013 are given in the notes to theFinancial Statements.
During the Financial Year ended March 31 2020 the Company has notaccepted any deposits falling within the ambit of Section 73 of the Companies Act 2013and The Companies (Acceptance of Deposits) Rules 2014.
INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY
Your Company has an adequate system of internal financial controlcommensurate with its size and nature of business. Your Company has adopted policies andprocedures for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE(PREVENTION PROHIBITION & REDRESSAL) ACT 2013.
The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. Corporate Harmony Committee (CHC) has been set upto redress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this policy. The policy has beenuploaded on the website of the Company.
Your Company hereby affirms that no complaints were received during theyear by the Corporate Harmony Committee.
Retirement by rotation
As per Section 152 (6) of the Act unless the articles provide for theretirement of all directors at every Annual General Meeting not less than two-thirds ofthe total number of directors of a public Company shall be liable to determination byretirement of directors by rotation and one- third of such of the directors for the timebeing as are liable to retire by rotation at every annual general meeting shall be thosewho have been longest in office since their last appointment but as between persons whobecame directors on the same day those who are to retire shall in default of and subjectto any agreement among themselves be determined by lot.
The Members at its Twenty Ninth (29th) Annual General Meeting (AGM)held on September 28 2019 had re-appointed Lt. Gen. K. T. Parnaik (Retd.) as JointManaging Director of the Company liable to retire by rotation with effect from May 302019. Accordingly Lt. Gen. K. T. Parnaik (Retd.) Joint Managing Director of the Companyshall retire by rotation at the ensuing Annual General Meeting and is eligible forre-appointment. The Board recommends his re-appointment and the same forms part of theAnnual General Meeting Notice.
As per Section 149(10) of the Act an Independent Director shall holdoffice for a term of upto five consecutive years on the board of a Company but shall beeligible for re-appointment on passing a special resolution by the Company for anotherterm of five consecutive years on the Board of the Company. The Independent Directors ofthe Company Ms. Homai A. Daruwalla Non-Executive Independent Director Mr. RamnathPradeep Non-Executive Independent Director were re-appointed as NonExecutive IndependentDirectors of the Company for a second term of five years and Lt. Gen. Padam Pal SinghBhandari (Retd.) Non-Executive Independent Director was re-appointed as Non-ExecutiveIndependent Directors of the Company for a second term of two consecutive years asapplicable or until they attain the age of 75 years whichever is earlier in the TwentyNinth (29th) Annual General Meeting of the Company held on Saturday September 28 2019.
Mr. Ramanath Pradeep and Lt. Gen. Padam Pal Singh Bhandari (Retd.)Non-Executive Independent Directors are registered under the databank of IndependentDirectors of the Indian Institute of Corporate Affairs (IICA) as an Independent Directorand are not eligible for appearing for proficiency test. Ms. Homai DaruwallaNon-Executive Independent Director is yet to register herself under the databank ofIndependent Directors with IICA.
The Company has received declaration from all Independent Directors ofthe company confirming that they meet with criteria of Independence as prescribed underSection 149(6) of the Companies Act 2013 and Regulation 16(1) (b) SEBI (ListingObligation and Disclosure Requirements) Regulation 2015.
Appointment of Additional Director
As per Section 161 of the Companies Act 2013 as on October 17 2020Mr. Ramdas Bhagwandas Gupta was appointed by the Board of Directors vide a CircularResolution as an Additional Director designated as NonExecutive Independent Director ofthe Company to hold office upto the ensuing Annual General Meeting of the Company.
Mr. Ramdas Gupta Additional Director has also registered himself underthe databank of Independent Directors with IICA and has also qualified the proficiencytest.
CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES
The brief outline of the Corporate Social Responsibility (CSR) Policyof the Company and the initiatives undertaken by the Company on CSR activities during theyear are set out in "Annexure H" of this report in the format prescribed in theCompanies (Corporate Social Responsibility Policy) Rules 2014. The policy is available onthe website of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo prescribed under Section 134 (3) (m) of the CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is Annexed as"Annexure G" to this report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The ratio of the remuneration of each director to the median employee'sremuneration and other details in terms of sub-section 12 of Section 197 of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 are forming part of this report as "Annexure C".
In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said Rules areprovided in the Annexure forming part of the Annual Report. However having regard to theprovisions of Section 136(1) read with its relevant proviso of the Companies Act 2013the Annual Report excluding the aforesaid information is being sent to the members of theCompany. The said information is available for inspection at the Registered Office of theCompany during working hours and any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished without any fee.
ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
Bond holders holding 25%+ bonds of US$ 200000000 10.75% & US$300000000 8.875% had filed a suit with the National Company Law Tribunal (NCLT) Mumbai.NCLT Mumbai bench had announced an Order on October 22 2019 (Purported Order) and aResolution Professional (IRP) was appointed for the Company. The Company challenged thePurported Order for appointment of Resolution Professional through a Writ Petition onNovember 15 2019 in High Court of Bombay.
On November 29 2019 the Hon'ble High Court ordered that the PurportedOrder be set aside as a result whereof all consequential actions including initiation ofCorporate Insolvency Resolution Process Moratorium and the appointment of IRP be setaside and the case was reverted back to NCLT for fresh hearing. No further hearings havetaken place for the financial year upto March 31 2020.
A suit under Section 7 of the Insolvency & Bankruptcy Code 2016was filed by the Union Bank of India and others before NCLT Mumbai on January 21 2020.The said application is not yet listed and not yet admitted in NCLT.
The Central Bank of India had served upon the Company Notice under theSecuritisation & Reconstruction of financial Assets and Enforcement of SecurityInterest Act 2002 (SARFAESI) for recovery of principal and interest due thereon. Nofurther progress has taken place especially due to COVID-19 pandemic
Union Bank of India (Union Bank) has served upon the Company noticeunder SARFAESI for recovery of principal and interest due thereon. Upon
consultation with Company's legal advisors the legal advisors advisedthe Company that the legal position in relation to the action by the Union Bank of Indiais that under SARFAESI is not maintainable since there are pending proceedings under theIBC before NCLT. No further progress has taken place especially due to COVID-19 pandemic
An order of supreme court of the state of New York County of New Yorkhas been passed on 2nd Sept 2020 in favor of certain bond holders (Plaintiff) for anapproximate amount of USD 183 Million plus interest at 9 % from the date of order againstthe company and its international subsidiaries. The said order has been receivedofficially by the company on 2nd November 2020. Further a turnover order was also passedby the said honorable court in New York in favor of Plaintiff on 20th October 2020directing the company and its international subsidiaries to turn over the cash on hand andtheir shareholding interests in their subsidiaries to the Plaintiff. The company has fileda suit on 10th November 2020 in the honorable Bombay High Court to quash the above ordersgranted in New York against the company and the hearings are ongoing. The said order forthe international subsidiaries of the company has been stayed by virtue of their filingvoluntary chapter 11 proceedings in the United States Bankruptcy Court in Alabama US onOctober 29 2020. The international subsidiaries (Applicants) of the company took this stepin order to restructure their liabilities mainly consisting of the bonds that were issuedin 2013 and 2014 for USD 500 million and their outstanding interest. As per therequirement of these proceedings the Applicants will submit a plan of reorganization tothe Court in Alabama typically within a period of 4 months from filing and once approvedby the Court this will be implemented subsequently over a period of a few months. Thecompany expect to emerge as a financially strong and viable based on a plan approved bythe Court to restructure the debt obligations of the International subsidiaries.
CORPORATE GOVERNANCE REPORT
The report on Corporate Governance as stipulated under the ListingRegulations forms an integral part of this Report. The requisite certificate from theSecretarial Auditor of the Company confirming compliance with the conditions of corporategovernance is attached to the report on Corporate Governance.
Human Resource policies of the Company are business focused andemployee friendly providing employees with opportunities to grow professionally as wellas personally.
However the Company has been facing losses and cash crunch which hascaused unavoidable suffering to its employees. The Company expects that with the inductionof new capital and funds by investor through Restructuring Service Agreement of August 062019 after getting necessary Statutory approvals and the situation will improvetherafter.
The Board of Directors wishes to express its sincere appreciation andthanks to all customers stakeholders & shareholders for their consistent support andco-operation for its success.
Your Directors appreciate contributions made by the Roltaites(employees) at all the levels worldwide and acknowledge their hard work and dedication inensuring that the Company consistently performs well in current turbulent times.
For an on behalf of the Board of Directors
|Mumbai ||Kamal K Singh |
|December 05 2020 ||Chairman & Managing Director |
| ||DIN:00260977 |