Your Board of Directors have pleasure in presenting the Thirty Fourth (34th)Directors' Report together with the audited financial statements of the Company for thefinancial year ended March 31 2020.
Members may kindly note that the directors of the reconstituted board were not inoffice for the part of the period to which this report primarily pertains. ResolutionProfessional during the Corporate Insolvency Resolution Process ("CIRP") andMonitoring Committee from completion of CIRP until implementation of Resolution Plan wereentrusted with and responsible for the management of the affairs of the Company. Pursuantto the implementation of Resolution Plan the new directors of the Company were appointedw.e.f. December 18 2019 (as detailed herein below) and new management was put in place.
SUCCESSFUL IMPLEMENTATION OF RESOLUTION PLAN
The Hon'ble National Company Law Tribunal Mumbai Bench ("NCLT") vide itsorder dated July 24 2019 read with order dated September 4 2019 approved the ResolutionPlan submitted by the consortium of Patanjali Ayurved Limited Divya Yog Mandir Trust(through its business undertaking Divya Pharmacy) Patanjali Parivahan Private Limited andPatanjali Gramudhyog Nyas under Section 31 of the Insolvency and Bankruptcy Code 2016.
Upon successful implementation of the Resolution Plan the following activities havebeen made in the Company all of which were effective from December 18 2019: a. Reductionand Consolidation / extinguishment of Share Capital of the Company detailed in note no.11 to financial statements; b. Increase in authorised share capital and allotment ofsecurities; c. Reconstitution of the Board of Directors of the Company and its Committees;d. Revocation of Power of Attorney/Authorizations issued before and during CIRP by theCompany; and e. Re-classification of erstwhile promoter and promoter group as publicshareholders.
The summarized financial performance highlight is presented in the table below:
(Rs in Lakhs)
|Particulars ||Financial Year |
| ||2019-20 ||2018-19 |
|Income (including other income) ||1317536.56 ||1282925.56 |
|Total Expenses other than Finance Cost and Depreciation ||1271689.34 ||1260730.04 |
|Profit/(Loss) before Depreciation Finance Cost and Tax ||45847.22 ||22195.52 |
|Less: Finance Cost ||11231.48 ||699.07 |
|Less: Depreciation amortisation and impairment Expenses ||13577.36 ||13824.44 |
|Profit for the year before Exceptional Items and Tax ||21038.38 ||7672.01 |
|Add: Exceptional Items ||744763.89 ||0.00 |
|Profit for the year before Tax ||765802.27 ||7672.01 |
|Total Tax Expenses ||(1400.00) ||0.00 |
|Net Profit for the year after Tax ||767202.27 ||7672.01 |
|Less : Items that will not be reclassified to statement of profit or loss ||(644.50) ||(632.57) |
|Total comprehensive income for the year ||766557.77 ||7039.44 |
STATE OF COMPANY'S AFFAIRS
As mentioned above the Resolution Plan approved by Hon'ble NCLT under section 31 ofthe Insolvency and Bankruptcy Code 2016 was implemented in the Company with effect fromDecember 18 2019. Your Company has achieved a total income of Rs 1317536.56 Lakh duringthe year under review as against Rs 1282925.56 Lakh in the previous financial year. Thenet profit after tax of the Company for the year under review is Rs 767202.27 Lakh asagainst Rs 7672.01 Lakh for the previous year. The net profit for the year under reviewincludes an exceptional item of Rs 744763.89 Lakh on account of write off of tradereceivables and advances provided in earlier years.
The export of the Company during the year under review was Rs 24136.84 Lakh ascompared to Rs 46372.64 Lakh during the last financial year. The decline in the exportwas mainly due to lack of working capital and intense competition in the export market.
You will appreciate that despite of lock down across the country due to Covid 19pandemic most of the plants of your Company were in operation and utilizing maximumcapacity of the same.
Your Company has a robust and sustainable business model and is confident prospects inedible oils processed food palm plantations and other businesses of the Company. YourCompany's businesses will continue to register healthy growth in revenue andmargins.
Even during uncertainties due to Covid-19 pandemic your Company is optimistic on itsfuture outlook and expects to grow with strong portfolio of brands drive towards healthyand premium offering to the customers and new product launches. Your Company's focus is tocapitalize on the existing brands and aim to increase market share across categories.Investment towards brand building will be stepped up to support market growth and launchof new products. Your Company plans to drive cost excellence across the organization toextract savings that will be redeployed for its growth.
Your Company is taking all necessary steps to utilize manufacturing capacity energizehuman resource asset drive cost efficiency and improve margins. Your Company envisages toincrease the area under Oil Palm Plantation towards Atma Nirbhar Bharat' mission andreduce country's dependence on imported oil. Your Company is positive on better financialand strategic performance outcomes in the current year. A detailed statement onmanagement's outlook included in the Management Discussion and Analysis Report whichforms part of the Annual Report 2019-20.
TRANSFER TO RESERVES
During the year under review no amount was proposed to be transferred to Reserves.
The Board of Directors of your Company has approved and adopted the DividendDistribution Policy of the Company. The Dividend Distribution Policy is annexed to thisReport as Annexure I and is also available on the web link http://www.ruchisoya.com/2020/Dividend_Distribution_Policy_of_the_ Company.pdf.
The Board of Directors of your Company after considering the relevant circumstancesand keeping in view the Company's Dividend Distribution Policy has not recommended anyDividend for the year under review.
During the year under review your Company has not accepted/ renewed any publicdeposits within the meaning of Sections 73 to 76A of the Companies Act 2013 read with theCompanies (Acceptance of Deposits) Rules 2014.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Particulars of loans guarantees or investments pursuant to Section 186 of theCompanies Act 2013 are provided in the notes to the financial statements.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
As a part of the implementation of Resolution Plan approved by the Hon'ble NCLT videits order dated July 24 2019 read with order dated September 4 2019 under section 31 ofthe Insolvency and Bankruptcy Code 2016 your Company has disposed off its entire equityinvestment/ ownership interest held in its subsidiaries during the year under review.
During the year under review the following changes have taken place in subsidiariesand associate companies :
Cessation of subsidiary companies: a. Ruchi Worldwide Limited b. Mrig TradingPrivate Limited c. RSIL Holdings Private Limited d. Ruchi Ethiopia Holdings Limited Dubaie. Ruchi Industries Pte. Limited Singapore
Cessation of Step-down subsidiary companies: a. Ruchi Agri Plantation (Cambodia)Pte. Limited Cambodia b. Ruchi Agri Trading Pte. Limited Singapore c. Ruchi Agri SARLUMadgascar d. Ruchi Agri PLC Ethiopia e. Palmolien Industries Pte. Limited Cambodia f.Ruchi Middle East DMCC Dubai
Ruchi Hi-Rich Seeds Private Limited ceased to be the Associate of the Company.
Ruchi J-Oil Private Limited a joint venture is under voluntary liquidation fromAugust 21 2018.
GHI Energy Private Limited ("GHI") was an associate of the Company withCompany's holding 49% of the paid up equity share capital. However GHI issued furtherequity shares on 13th May 2019 without consent of the Company as a result ofwhich Company's equity shareholding in GHI reduced to 19.34%. On pursuation by theCompany GHI has filed Hon'ble National Company Law Tribunal Chennai Bench ("Hon'bleTribunal") for reduction of capital under section 66 of the Companies Act 2013.Accordingly pending confirmation of the Hon'ble Tribunal of the aforesaid reduction ofshare capital of GHI the Company continues to hold only 19.34% in GHI. Upon approval ofthe capital reduction by the Hon'ble Tribunal and such capital reduction being effectivethe paid up share capital of GHI shall stand reduced to the extent of the shares soextinguished and the original shareholding of 49% of the Company shall stand restored.
The investment of the Company in Indian Oil Ruchi Biofuels LLP a Joint Venture hasbeen impaired in the books of accounts of the Company in the year 2018-19 as per theprovisions of applicable Ind-AS.
CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review Shri Dinesh Chandra Shahra (DIN: 00533055) conveyed hisdesire not to seek re-appointment as director and vacated the office with effectfrom December 13 2019. Shri Vijay Kumar Jain vacated the office of executive directorwith effect from December 18 2019.
Further as a part of the implementation of the Resolution Plan the erstwhile board ofdirectors of the Company were replaced with new board of directors with effect fromDecember 18 2019 and Monitoring Committee responsible for the implementation of theResolution Plan in its meeting held on December 18 2019 constituted the new board ofthe Company and appointed the new directors as under: (a) Shri Acharya Balkrishna (DIN:01778007) as an Additional Director (Chairman and Managing Director);
(b) Shri Ram Bharat (DIN: 01651754) as an Additional Director (Whole-time Director);(c) Shri Swami Ram Dev (DIN: 08086068) as an Additional Director (Non-ExecutiveNon-Independent Director); (d) Dr. Girish Kumar Ahuja (DIN: 00446339) as an AdditionalDirector (Independent Director); (e) Shri Rajat Sharma (DIN: 00005373) as an AdditionalDirector (Independent Director); and (f) Smt. Bhavna Samir Shah (DIN: 00246394) as anAdditional Director (Independent Director).
Shri Rajat Sharma (DIN: 00005373) has resigned from the office of Independent Directorwith effect from July 2 2020 due to his pre-occupation. Smt. Bhavna Samir Shah (DIN:00246394) has resigned from the office of Independent Director with effect from July 132020 due to her pre-occupation. Shri Rajat Sharma and Smt. Bhavna Samir Shah both haveprovided the detailed reason of their resignation and a there was no other material reasonfor their resignation other than the reason provided as above.
The Board of Directors on August 13 2020 appointed Dr. Tejendra Mohan Bhasin(DIN: 03091429) and Smt. Gyan Sudha Misra (DIN: 07577265) as Additional Directors(Independent Directors) of the Company not liable to retire by rotation for a term ofthree (3) consecutive years with effect from August 13 2020 to August 12 2023 subjectto approval of members in the ensuing annual general meeting.
In the opinion of the Board of your Company Dr. Tejendra Mohan Bhasin and Smt. GyanSudha Misra are persons of integrity and possesses relevant expertise and experience andthey fulfil the conditions specified in the Companies Act 2013 and the ListingRegulations for such an appointment.
The board of directors has recommended the appointment of all the directors in ensuingannual general meeting to members for their approval. of Since as a part of theimplementation of the Resolution Plan the erstwhile board of directors of the Companywere replaced with new board of directors with effect from December 18 2019 no directorwill retire by rotation at the ensuing annual general meeting of the Company pursuant toSection 152 and other applicable provisions of the Companies Act 2013.
Key Managerial Personnel
Shri Acharya Balkrishna was appointed as Chairman and Managing Director by themonitoring committee on December 18 2019. Subsequently Shri Acharya Balkrishna tenderedhis resignation on August 18 2020 from the office of managing director and agreed tocontinue as non-executive chairman. Thereafter on the basis of recommendation made byNomination and Remuneration Committee of the Board of Directors Shri Ram Bharat wasappointed as managing director of the Company with effect from August 19 2020 tillDecember 17 2022.
Shri Sanjeev Asthana joined the Company as Chief Executive Officer with effect fromJuly 06 2020 and appointed as key managerial personnel of the Company with effect fromAugust 19 2020.
Your Company has following key managerial personnel as on date: Shri Ram BharatManaging Director; Shri Sanjeev Asthana Chief Executive Officer; Shri Ramji Lal GuptaCompany Secretary.
Shri Anil Singhal Chief Financial Officer of the Company has resigned from the officeof Chief Financial Officer and Key Managerial Personnel of the Company with effect from11th November 2020.
STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS
The Company has received the necessary declaration from each independent director whoare part of reconstituted Board confirming that he/she meets the criteria of independencelaid out in Section 149(6) of the Companies Act 2013 read with the schedules rules madethereunder and Regulation 16(1) (b) of the Listing Regulations.
POLICY ON DIRECTORS' APPOINTMENT AND POLICY ON REMUNERATION
Pursuant to Section 134(3)(e) and Section 178(3) of the Companies Act 2013 the Policyon appointment of Board Members including criteria for determining qualificationspositive attributes independence of a Director and the Policy on remuneration ofDirectors KMP and other employees is annexed to this Report as Annexure II and isalso available on the web link http://www.ruchisoya.com/2019/Remuneration_and_Board_Diversity_Policy.pdf
PARTICULARS OF REMUNERATION OF DIRECTORS / KMP / EMPLOYEES
Disclosures pertaining to remuneration and other details as required pursuant toSection 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed to thisReport as Annexure III.
NUMBER OF MEETINGS OF THE BOARD
Members may kindly note that the directors of the reconstituted board were notin office for the part of the period to which this report primarily pertains. ResolutionProfessional during the CIRP and Monitoring Committee from completion of CIRP untilimplementation of Resolution Plan were entrusted with and responsible for the managementof the affairs of the Company.
After the re-constitution of Board as a part of the implementation of Resolution Planof the Company with effect from December 18 2019 five (5) board meetings were heldduring the year under review. For attendance and other details please refer the CorporateGovernance Report which forms part of the Annual Report 2019-20.
PERFORMANCE EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
As per section 17 of the Insolvency and Bankruptcy Code 2016 the powers of the Boardof Directors of the Company were suspended during the CIRP with effect from December 152017 and such powers were vested with the Resolution Professional. As a part of theimplementation of the Resolution Plan approved by the Hon'ble NCLT vide its order datedJuly 24 2019 read with order dated September 4 2019 the erstwhile board of directors ofthe Company were replaced by the new board of directors with effect from December 182019. Therefore being very short period it was not feasible for the new board ofdirectors to carry out the performance evaluation of board its committees and individualdirectors during the remaining period of year under review after re-constitution.
The Company has put in place a policy containing inter-alia the criteria forperformance evaluation of the Board its Committees and individual Directors (includingindependent directors).
DIRECTORS' RESPONSIBILITY STATEMENT
Members may kindly note that the directors of the reconstituted board were not inoffice for the part of the period to which this report primarily pertains. ResolutionProfessional during the CIRP and Monitoring Agency from completion of CIRP until fullimplementation of Resolution Plan were entrusted with and responsible for the managementof the affairs of the Company.
As pointed out above the reconstituted Board of Directors have been inofficeonly sinceDecember 18 2019. The reconstituted Board is submitting this report in compliance withthe Act and Listing Regulations and the Directors as on date are not to be consideredresponsible for the fiduciary duties discharged with respect to the oversight on financialand operational health of the Company and performance of the management for the periodprior to December 18 2019.
Accordingly as required under section 134(3) (c) read with section 134 (5) of the Actthe board of directors based on the knowledge/ information gained by them about theactions of the resolution professional/ Monitoring Committee (i.e. who were entrusted withand responsible for the management of the affairs of the Company prior to the 18thDecember 2019) and the affairs of the Company in a limited period of time from therecords of the Company state that: a. in the preparation of the annual accounts for thefinancial year ended March 31 2020 the applicable accounting standards had been followedand no material departures have been made from the same;
b. such accounting policies have been selected and applied consistently and judgmentsand estimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at March 31 2020 and of the profit of theCompany for the year ended on that date;
c. the proper and sufficient care has been taken 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;
d. the annual accounts of the Company have been prepared on a going concern basis;
e. the internal financial controls were in place and that such internal financialcontrols were adequate and were operating effectively; and
f. the reconstituted board has devised the proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.
AUDITORS AND THEIR REPORTS Statutory Auditor
Pursuant to the provisions of Section 139 of the Companies Act 2013 and rules madethereunder M/s. Chaturvedi & Shah LLP Chartered Accountants (Firm RegistrationNo.101720W) were appointed as Statutory Auditor of the Company at the Annual GeneralMeeting held on September 27 2017 for a period of five (5) consecutive years from theconclusion of 31st Annual General Meeting till the conclusion of 36thAnnual General Meeting of the Company to be held in the calendar year 2022 subject toannual ratification by members at every Annual General Meeting on such remuneration asmay be recommended by the Audit Committee and mutually agreed between the Board ofDirectors and the Auditors plus out of pocket expenses as may be incurred. However as perthe Companies (Amendment) Act 2017 the requirement of annual ratification has beenomitted.
M/s. Chaturvedi & Shah LLP Chartered Accountants have submitted their Report onthe financial statements of the Company for the financial year ended March 31 2020 whichforms part of the Annual Report 2019-20. There are no observations (including anyqualification reservation adverse remark or disclaimer) of the Auditors in their AuditReport that may call for any explanation or comments from the Directors of your Company.
The Board of Directors on the recommendation of Audit Committee has re-appointed M/s.K.G. Goyal & Co. Cost Accountants (Firm Registration No. 000017) as Cost Auditor toconduct audit of the cost accounting records of the Company for the financial year endingon March 31 2021. As required under Section 148 of the Companies Act 2013 a resolutionregarding ratification of the remuneration payable to M/s. K.G. Goyal & Co. CostAccountants forms part of the Notice convening the 34th Annual General Meetingof the Company.
Pursuant to provisions of Section 134 of the Companies Act 2013 read with Rule 8(5) ofthe Companies (Accounts) Rules 2014 it is confirmed that the Company has made and thecost records as specified by the Central Government under sub-Section (1) of Section 148of the Companies Act 2013.
CS Prashant Diwan Practicing Company Secretary (FCS: 1403 CP: 1979) was appointed asSecretarial Auditor to conduct the audit of secretarial records of the Company for thefinancial year ended on March 31 2020 pursuant to Section 204 of the Companies Act 2013.The Secretarial Audit Report submitted by him in the prescribed form MR- 3 is annexed tothis Report as Annexure IV.
Secretarial Audit Report:
The directors of the reconstituted Board were not in office for the part of the periodto which this report primarily pertains. Resolution Professional during the CIRP andMonitoring Agent from completion of CIRP until implementation of Resolution Plan wereentrusted with and responsible for the management of the affairs of the Company. Thereconstituted Board of Directors have been in office only since and reconstituted Board issubmitting these explanations in compliance with the Act. Explanations to the observationsmade by the secretarial auditor in his report for the year under review are as follows: a.One Designated Person of the Company has not complied with the Code of Conduct of Companyadopted pursuant to Regulation 9 read with Schedule B of SEBI (Prohibition of InsiderTrading) Regulations 2015 by trading Equity Shares of the Company during the period whenwindow was closed.
Explanation: In accordance with the requirements of the SEBI (Prohibition ofInsider Trading) Regulations 2015 the Company has duly adopted the Code of Conduct toRegulate Monitor and Report Trading by Designated Persons and their Immediate Relatives.In pursuance of the SEBI (Prohibition of Insider Trading) Regulations 2015 the Companypromptly submitted a report to SEBI in the prescribed format as per SEBI circular no.SEBI/HO/ISD/CIR/P/ 2019/82 dated July 19 2019 on November 18 2019. Further thedesignated person was warned that adherence of Code of Conduct to Regulate Monitor andReport Trading by Designated Persons and their Immediate Relatives is absolute and shallbe complied with without any exceptions.
b. As required under Regulation 29(2)/29(3) of the SEBI
(Listing obligations and Disclosure Requirements) Regulations 2015 the Company hasnot made prior intimation about the Board Meeting for Issue of Shares on Preferentialbasis.
Explanation: The reconstituted Board took over the management of the Company inDecember 2019 and was under process to set up effective and efficient standard operatingprocedures for operating and managing the affairs of the Company. After CIRP the firstboard meeting of the Company was held through video conference on 19thDecember 2019 wherein induction of new Directors on the Board of the Company was noted.Thereafter board meeting held on January 17 2020 which was calledwaseffectivelythe first by the new Board to discuss various policy and operational matters.Further the agenda item for issue of shares on preferential basis was not part of theBoard agenda and was took up by the Board as an additional item. As soon as this item wasapproved by the Board the Company immediately sent the relevant disclosure to stockexchanges after conclusion of board meeting held on January 17 2020.
It is pertinent to mention that even at the time of holding the Board meeting onJanuary 17 2020 the trading of shares of the Company was suspended due to restructuringand share capital of the Company was reduced from 334100722 equity shares of Rs 2/-each to 3341007 equity shares of Rs 2/- each and the listing and trading permission forsuch reduced equity share capital was not granted at the time of holding the meeting on17th January 2020.
Given the fact that since trading of entire equity share capital of the Company wassuspended and reduced share capital of the Company was not listed and traded at the timeof holding the Board meeting on January 17 2020 there could not have been any adverseeffect on the market price of shares of the Company or abuse of this information inrelation to trading of shares of the Company due to non-availability of prior intimationregarding fund raising under regulation 29 of the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015. The Company paid a penalty of Rs 11800/- to BSEand NSE each.
c. As required under Regulation 33 of SEBI (Listing obligations and DisclosureRequirements) Regulations 2015 the Financial Results for the 1st quarterended 30th June 2019 were not submitted within a period of 45Days from the end of the quarter.
Explanation: The Company was under the CIRP since December 15 2017. During thesaid process the powers of the board of directors of the Company were suspended and werebeing exercised by the Resolution Professional ("RP"). It was informed that theResolution Professional sought some clarifications/documents on the financial results ofthe Company which was requiring some time to prepare and submit. Hence the Board meetingwhich was scheduled to be held on August 14 2019 for the consideration and approval ofunaudited financial results for the quarter ended June 30 2019 was adjourned and held onSeptember 10 2019. A penalty of Rs 153400/- was paid to BSE and NSE each.
d. As required under Regulation 34 of SEBI (Listing obligations and DisclosureRequirements) Regulations 2015 the Company has not submitted Annual Report to BSE andNSE within the prescribed time. The Company has paid fine ofRs 73160/- to BSE and Rs80240/- to NSE.
Explanation: The Company has duly dispatched the physical copy of annual reportto stock exchanges however soft copy of the annual report was uploaded at designatedelectronic portal of stock exchanges beyond the prescribed time. The Company has paid thepenalty of Rs 73160/- to BSE and Rs 80240/- to NSE towards such delay in submission ofannual report.
e. The Company has not filed Form PAS-3 for allotment of 292500000 Equity Shares ofRs 2/- each fully paid up and 45000000 0.0001% Cumulative Non-Convertible RedeemablePreference shares of Rs 100/- each fully paid up which were allotted in the meeting ofMonitoring Agent held on 18th December 2019.
f. Further the Company has filed Form PAS 3 in respect of 4500 9% Unsecured CumulativeNon-Convertible
Debentures of face value of Rs 1000000/- which were allotted in the meeting ofMonitoring Agent held on 18th December 2019 subsequent to the closureof financial year.
Explanation to (e) and (f): As per the Resolution Plan approved by Hon'ble NCLTthe Patanjali Consortium Adhigrahan Private Limited a special purpose vehicle company("PCAPL") was merged with the Company and consequent thereupon the authorizedshare capital of the Company was increased from "Rs 25305 Lakhs consisting of1010250000 equity shares of Rs 2 each and 5100000 preference shares of Rs 100each" to
"Rs 95305 Lakhs consisting of 2112050000 equity shares of Rs 2 each and53064000 preference shares of Rs 100 each" and 292500000 equity shares of Rs2/- each and 45000000 (0.0001%) Cumulative Non-Convertible Redeemable Preference Shares("NCRPS") of Rs 100/- each were allotted to the members of PCAPL. However sincethe authorized share capital post merger of PCAPL into the Company has not been updatedin the records of the Ministry of Corporate Affairs/Registrar of Companies filethe Returnof Company could not Allotment (e-form PAS-3) for allotment of above stated equity shares.The Return of Allotment for allotment of NCRPS has been filed after close of the year.
CS Prashant Diwan Practicing Company Secretary has been re-appointed to conduct thesecretarial audit of the Company for the year ending March 31 2021.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLETO THE CENTRAL GOVERNMENT
The Statutory Auditor Cost Auditor and Secretarial Auditor of your Company have notreported any frauds to the Audit Committee or to the Board of Directors under Section143(12) of the Companies Act 2013 including rules made thereunder.
INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY
The internal control systems include documented policies checks and balancesguidelines and procedures that are supplemented by robust internal audit processes andmonitored continuously through periodical reviews by management to provide reasonableassurance that all assets are safeguarded; and all transactions entered into by Companyare authorized recorded and reported properly.
Internal control systems are integral to the Company's corporate governance. Theinternal control systems and procedures are designed to assist in the identification andmanagement of risks of all compliances as well as an theprocedure-led verificationenhanced control consciousness.
The reconstituted board / management are of the opinion that based on the knowledge/information gained by them about affairs of the Company in a limited period of time fromrecords of the Company the Company has effective internal financial control systems andpolicies and such controls are operating effectively. The reconstituted management istaking steps for further strengthening of internal financial controls.
Post-acquisition the reconstituted Board/management has reviewed the internal controlsframework of the Company with an objective to have a robust internal control frameworkcommensurate with the size scale and nature of business of the Company. The reconstitutedmanagement has initiated steps to implement the robust internal control framework. Thisframework includes entity-level policies processes and Standard Operating Procedures(SOP).
The details relating to internal financial controls and their adequacy are included inthe Management Discussion and Analysis Report which forms part of the AnnualReport 2019-20.
CHANGE IN NATURE OF BUSINESS
During the year under review there has been no change in the nature of business ofyour Company.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There have been no material changes and commitments affecting the financial position ofyour Company which have occurred between the end of the financial year of the Company towhich the financial statements this Report.
The Board of your Company has formed a Risk Management Committee to frame implementand monitor the risk management plan of the Company for identifying and mitigating variousrisks. The Committee is responsible for reviewing the risk management plan and ensuringits effectiveness. The Company recognizes that the emerging and identifiedrisks need to bemanaged and mitigated to (a) protect its shareholders and other stakeholders' interest;(b) achieve its business objectives; and (c) enable sustainable growth.
The details of various risks that are being faced by the Company are provided inManagement Discussion and Analysis Report which forms part of this Report.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED ON CORPORATE SOCIAL RESPONSIBILITY
In compliance with Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules 2014 as amended the Board of the Companyhas formed Corporate Social Responsibility ("CSR") Committee. The policy on CSRas approved by the Board of Directors is also hosted on the website of the Company and canbe accessed from web link http://www.ruchisoya.com/2019/RSIL_CSR_ Policy.pdf
Pursuant to Section 135 of the Companies Act 2013 read with CSR policy of the Companyit is required to spend two percent of the average net profitof the Company for threeimmediately preceding financial year. As the average net profit of the Company duringprevious three financial years is negative the Company is not required to spend anyamount for the CSR purpose during the year under review. The Annual report on CSRactivities as required under the Companies (Corporate Social Responsibility Policy) Rules2014 is annexed to this Report as Annexure V.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is annexed to this Report as Annexure VI.
CHANGE IN SHARE CAPITAL
As a part of the implementation of the Resolution Plan approved by the Hon'ble NCLTunder Section 31 of the Insolvency and Bankruptcy Code 2016 vide its order dated July24 2019 read with order dated September 4 2019 the following changes have taken placein the share capital of your Company during the year under review:
Authorised Share Capital
Pursuant to the Resolution Plan the authorised share capital of your Company wasincreased from "Rs 25305 Lakhs consisting of 1010250000 equity shares of Rs 2each and 5100000 preference shares of Rs 100 each" to "Rs 95305 Lakhsconsisting of 2112050000 equity shares of Rs 2 each and 53064000 preference sharesof Rs 100 each".
Paid-up Share Capital
Pursuant to the implementation of Resolution Plan as approved by Hon'ble NCLT: a. theface value of equity shares of Rs 2 each reduced to 2 paisa each and immediately afterreduction 100 equity shares of 2 paisa each consolidated into 1 equity share of Rs 2each resulting into the reduction and consolidation of the existing issued subscribed andpaid-up equity share capital of your Company from Rs 6682.01 Lakhs divided into334100722 equity shares of Rs 2 each fully paid-up to Rs 66.82 Lakhs divided into3341007 equity share of Rs 2 each fully paid-up thereby reducing the value of issuedsubscribed and paid up equity share capital of the Company by Rs 6615.19 Lakhs.
b. the existing issued subscribed and paid up 200000 cumulative redeemablepreference shares of Rs 100 each stand fully cancelled and extinguished.
c. Pursuant to Resolution Plan during the year the Company allotted 292500000equity shares of Rs 2/- each 45000000-0.0001% Cumulative Non-convertible RedeemablePreference shares of Rs 100/- each and 4500-9% Cumulative Non-convertible Debentures ofRs 1000000/- each.
As on March 31 2020 the total equity paid-up share capital of your Company was Rs5916.82 Lakhs divided into 295841007 equity shares of Rs 2 each fully paid-up andtotal preference paid-up share capital of your Company was 45000 Lakh divided into45000000 preference shares of Rs 100 each fully paid up.
EXTRACT OF ANNUAL RETURN OF THE COMPANY
The copy of the Annual Return of the Company as provided under sub-section (3) ofsection 92 of the Companies Act 2013 is available on the web link www.ruchisoya.com.
Your Company has followed applicable Secretarial Standards i.e. SS-1 and SS-2relating to Meetings of the Board of Directors and General Meetings respectively.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Your Company is committed to maintain the highest standards of Corporate Governance andadheres to the Corporate Governance requirements as set out by the Securities and ExchangeBoard of India ("SEBI"). Your Company has also implemented several bestgovernance practices.
Separate reports on Corporate Governance Compliance and Management Discussion andAnalysis as stipulated under Regulation 34 read with Schedule V of the Listing Regulationsforms part of the Annual Report 2019-20 along with the requisite certificate issuedby Statutory Auditors of your Company regarding compliance of the conditions of CorporateGovernance.
BUSINESS RESPONSIBILITY REPORT
The Business Responsibility Report for the year ended March 31 2020 as stipulatedunder Regulation 34 of the Listing Regulations is annexed and forms part of the AnnualReport 2019-20.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
With reference to Section 134(3) (h) of the Companies Act 2013 all contracts andarrangements with related parties under Section 188(1) of the Companies Act 2013 enteredby your Company during the year under review were in the ordinary course of business andon an arm's length basis.
During the year under review your Company had not entered into any contract orarrangement with a related party which could be considered material' (i.e.transactions exceeding ten percent of the annual consolidated turnover as per the lastaudited financial statements entered into individually or taken together with previoustransactions during the financial year) according to the policy of your Company onmateriality of Related Party Transactions. There are no transactions that are required tobe reported in form AOC-2.However all the transactions with related parties which werein the ordinary course of business and on an arm's length basis have been disclosed inNote No. 39 of the Financial Statements.
DISCLOSURE ON AUDIT COMMITTEE
The Audit Committee as on March 31 2020 comprises of the following IndependentDirectors:
Shri Girish Kumar Ahuja (Chairman) Shri Ram Bharat Smt. Bhavna Samir Shah as members.For attendance and other details kindly refer the Corporate Governance Report which formspart of the Annual Report 2019-20.
All recommendations of Audit Committee were accepted by the Board of Directors.
Smt. Bhavna Samir Shah has resigned from the officeof Independent Director with effectfrom July 13 2020 due to her pre-occupation and therefore ceased to be the member of theAudit Committee. Thereafter Dr. Tejendra Mohan Bhasin appointed as Independent Directorwith effect from August 13 2020 and induced as member in Audit Committee.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
Your Company has adopted a Vigil Mechanism/Whistle Blower Policy in terms of theprovisions of Companies Act 2013 and the Listing Regulations to provide a formalmechanism to the Directors and employees of the Company to report their genuine concernsand grievances about unethical behaviour actual or suspected fraud or violation of theCompany's Code of Conduct or Ethics. The policy provides adequate safeguards againstvictimization of Directors and employees who avail such mechanism and also provides fordirect access to the Vigilance Officer and the Chairman of Audit Committee. The AuditCommittee of the Board is entrusted with the responsibility to oversee the vigilmechanism. During the year no personnel was denied access to the Chairman of the AuditCommittee. The Vigil Mechanism/Whistle Blower Policy is available on the website of theCompany at http://www.ruchisoya.com/2019/ RSIL_WhistleBlower.pdf.
DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION &REDRESSAL) ACT 2013
The Company has adopted a policy on prevention prohibition and redressal of sexualharassment at workplace in line with the provisions of Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and the Rules made thereunder.The aim of the policy is to provide protection to women employees at the workplace andprevent and redress complaints of sexual harassment and for matters connected orincidental thereto with the objective of providing a safe working environment wherewomen employees feel secure. All women employees (permanent contractual temporarytrainees) are covered under the said policy.
Your Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 to redress complaints received on sexual harassment.
No complaint was pending at the beginning of the year and none was received during theyear.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALSIMPACTING THE GOING CONCERNS STATUS AND COMPANY'S OPERATIONS IN FUTURE
The Hon'ble NCLT under Section 31 of the Insolvency and Bankruptcy Code 2016 vide itsorder dated July 24 2019 read with order dated September 04 2019 approved the ResolutionPlan submitted by the consortium of Patanjali Ayurved Limited Divya Yog Mandir Trust(through its business undertaking Divya Pharmacy) Patanjali Parivahan Private Limited andPatanjali Gramudhyog Nyas.
The SEBI vide its order dated August 12 2020 has revoked its earlier directions (adinterim orders dated March 02 2016 and
May 24 2016 and confirmed due to which the Company was restrained from buying sellingor dealing in the securities market either directly or indirectly in any mannerwhatsoever.
Except above no other significant or material orders were passed by the Regulators orCourts or Tribunals impacting the going concern status and Company's operations in future.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions or events occurred on these items during theyear under review: a. Receipt of any remuneration or commission from any of its subsidiarycompanies by the Managing Director or the Whole-time Directors of the Company.
b. During the year under review the Company has not bought back any of its securities/not issued any sweat equity shares / not provided any Stock Option Scheme to its employees/ not issued any equity shares with differential rights.
c. There was no revision of the previous year's financial statements during thefinancial year under review.
Your Directors place on record their gratitude to the Central Government StateGovernments and Company's Bankers for the assistance co-operation and encouragement theyextended to the Company. Your Directors also wish to place on record their sincere thanksand appreciation for the continuing support and unstinting efforts of investors vendorsdealers business associates and employees in ensuring an excellent all around operationalperformance.
|For and on behalf of the Board of Directors of |
| ||Ruchi Soya Industries Limited |
| ||Acharya Balkrishna |
|Place: Haridwar ||Chairman |
|Date : November 10 2020 ||DIN: 01778007 |