The Directors present to you the Eighth Annual Report of the Company together with the audited financial statements for the financial year ended March 31, 2018.
The summary of the financial results of the Company for the financial year ended March 31, 2018, is as under-
(Rs. in lakhs)
March 31, 2018
March 31, 2017
Revenue from operations
Profit/(Loss) from operations before other income, finance costs and exceptional items
Loss before Tax
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Paid-up equity share capital (face value of Rs. 2 each)
Other equity Earning per shares (in Rs.)
Further, the details of performance of associate is getting reflected in the consolidated financial statements, which forms a part of the Annual Report.
In view of the losses incurred during the financial year ended March 31, 2018, it has not been possible to transfer any amount to general reserve.
During the year under review, the Company has posted net loss of Rs. 190.07 lacs. Your Company is looking for consultancy options in generation, transmission and distribution of power. We understand the dynamics of these areas and our goal is to maintain effective relationships with stakeholders by using the extensive knowledge to benefit our clients.
There was no change in the paid up equity share capital of the Company during the Financial Year 2017-18. The paid up equity share capital of the Company is Rs. 2,764,539,184 divided into 1,382,269,592 equity shares of Rs. 2/- each.
MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF FINANCIAL YEAR AND THE DATE OF REPORT
Subsequent to the end of the financial year on March 31, 2018 till date, there has been no material change and / or commitment which may affect the financial position of the Company.
No dividend has been recommended for the year ended March 31, 2018.
DIRECTORS/ KEY MANAGERIAL PERSONNEL (KMP) DETAILS
Mr. Raghunandan Kumar Sharma (PAN: AEZPS2240F), a qualified Electrical Engineer with a rich and varied experience in the Power sector was appointed as the Manager and thereby a Key Managerial Personnel of the Company, with effect from February 5, 2018.
Mrs. Namita (DIN: 08058824), a young and dynamic Management and Law graduate with rich experience in the field of Human Resource Development in various industrial sectors such as power, cement, mining etc. was appointed as Woman Director on the Board of the Company, with effect from March 30, 2018.
The Board of Directors recommends confirmation to the appointment of Mr. Raghunandan Kumar Sharma as Manager and Mrs. Namita as a regular director of the Company.
Mr. Yashish Dahiya one of the Independent Directors resigned from the Board of the Company w.e.f. October 12, 2017. Mrs. Anjali Nashier a Non-Executive Director resigned from the Board of the Company w.e.f. March 30, 2018. The Board has placed on record its deep appreciation for the services rendered by Mr. Dahiya and Mrs. Nashier during their association on the Board of the Company.
Mr. Rajiv Rattan, the Chairman of the Company and a Whole-time Director on the Board of the Company was designated as a non-executive director on the Board of the Company effective February 5, 2018.
The Board has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section 7 of Section 149 of the Act, and in the opinion of the Board they fulfill the conditions specified in the Act and the Rules made thereunder and are Independent of the management.
The other key managerial personnel of the Company are Mr. Arun Chopra, Chief Financial Officer and Mr. R. K. Agarwal, Company Secretary.
COMPANY’S POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS
As mandated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and Section 178 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, the Company has a Nomination and Remuneration Committee in place, the constitution, the terms of reference and the scope of responsibility whereof are described in the Report on Corporate Governance, forming part of the Annual Report.
The selection and appointment of Directors and their remuneration owes its genesis to the policy formulated by the Nomination and Remuneration Committee within the four corners of its charter and scope of responsibility with due consideration to the stipulations under various applicable enactments and regulations, primarily including the Companies Act, 2013 and in particular Section 178(3) thereof, the Listing Regulations and the Income Tax Act, 1961. In formulating the policy, care has been taken to ensure that criteria laid down therein enable the Company to strike a balance between what is mandated by law, in letter as well as spirit, the principles of sound corporate governance, the functional requirements of the Company and the industry norms. It would be pertinent to mention here that the Policy is subject to periodic review by the Nomination and Remuneration Committee. The Policy may be accessed on Company’s website at the link: http://www.rattanindia.com/ril/investor-contacts/.
EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Regular evaluation of the performance of the individual directors, the Board of Directors as a whole and the various committees of the Board, is not merely a legal requirement for the Company but a feature of its overall work policy, towards which end a periodic performance evaluation exercise is carried out in the Company so as to ensure that the performance of the Board, the individual directors and the various Board Committees adheres to and in fact goes beyond the standards laid down for the purpose and in the event of any deviations between the actual and the standardized performance coming to light, immediate and necessary rectifications are effected.
As in the previous financial years, an annual evaluation of performance of the Board, the various Board Committees and the individual directors, the evaluation exercise carried out in the financial year 2017-18 involved the following:
(a) Proper analysis of the laid down performance standards so as to ascertain as to whether any modifications were required in the same due to the change in the circumstances pertinent to the business of the Company, the developments in the business, the regulatory changes and the socio economic as well as geo political environment within and outside the Country, with the passage of time since the time, these standards had been laid down. The necessary adjustments/ modifications in such standards were made, wherever so required.
(b) making the Board and the individual directors aware of the aforesaid modifications and circulating questionnaires, carefully drawn up in line with the performance standards and after factoring in the business and operational developments and changes, the financial and operational reports etc., among them so as to gather their feedback on the processes of the Board, processes of the individual committees and performance and functional efficacy and activeness of the individual directors, with the nature and size of the Company operations, the operational advantages and bottlenecks, the skill sets, knowledge and expertise of various directors.
(c) A detailed study and evaluation of the responses so received and taking the measures dictated by such responses to initiate remedial measures wherever required.
It would be pertinent to mention here that performance evaluation of the Non-Independent Directors is carried out by Independent Directors who also assess the quantity, quality and timeliness of flow of information between the Company management and Board.
SUBSIDIARIES / JOINT VENTURES / ASSOCIATE COMPANIES
There is no subsidiary of the Company nor is the Company in any joint venture with any other company. Further, there has been no change in the associate company of the Company, i.e. RattanIndia Power Limited. A report on the performance and financial position of the associate company in the form AOC-1, stipulated under Companies Act, 2013, is provided as an Annexure to the consolidated financial statements.
CONSOLIDATED FINANCIAL STATEMENTS
Pursuant to the provisions of Sections 129, 134, 136 of the Companies Act, 2013 read with rules framed thereunder and pursuant to Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has prepared a consolidated financial statement of the Company and its associate and a separate statement containing the salient features of financial statements of the associate in the form AOC-1 forms a part of the Annual Report. The financial statements as stated above, are also available on the website of the Company at http://www.rattanindia.com/ril/annual-report/
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee of the Company comprises of Mr. Sanjiv Chhikara as the Chairman and member and Mrs. Namita and Mr. Debashis Gupta as other members. The Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the CSR activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy and recommending the amount to be spent on CSR activities.
The CSR Policy may be accessed on the Company’s website at the link http://www.rattanindia.com/ril/investor-contacts/
The Annual Report on CSR forms a part of the Board’s Report and is annexed herewith marked as Annexure ‘A’.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of the provisions of Regulation 34(2)(e) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management’s Discussion and Analysis Report is presented in a separate section forming part of the Annual Report.
CORPORATE GOVERNANCE REPORT
The Company is committed to maintain the highest standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. In terms of Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance along with Compliance Certificate issued by a Practicing Company Secretary is attached to and forms integral part of this Report.
DIRECTORS’ RESPONSIBILITY STATEMENT
In terms of Section 134(3)(c) of the Companies Act, 2013, the Directors state that:
1. in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same;
2. they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2018 and of the profit and loss account of the Company for the year ended on that date;
3. they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. they had prepared the annual accounts of the Company on a ‘going concern’ basis;
5. they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and
6. they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.
The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company’s website at the link: http://www.rattanindia.com/ril/investor-contacts/.
Since all Related Party Transactions entered into by the Company were in the ordinary course of business and at an arms- length basis, form AOC-2 is not applicable to the Company. However the details of various related party transactions entered into during the financial year 2017-2018 are adequately set out in the notes to Financial Statements.
The Company has laid down code to inform board members about the risk assessment and minimization procedures. The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Risk Management Policy of the Company primarily focuses on identifying, assessing and managing risks in the areas of — Company’s assets and property, Employees, Foreign Currency Risks, Operational Risks, Non-compliance of statutory enactments, Competition Risks and Contractual Risks.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
In terms of the provisions of Section 134(5)(e) of the Companies Act, 2013, the Directors are enjoined with the responsibility of ensuring that adequate systems of financial control are in place and operational in the Company. The Board of Directors have devised and effectuated a system of internal control commensurate with the nature and size of operations of the Company, covering within its ambit every sphere of operations and activities including more particularly the financial controls.
The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls.
AUDITORS & AUDITORS’ REPORT
In the fourth Annual General Meeting of the Company held on September 30, 2014, M/s Sharma Goel & Co. LLP, Chartered Accountants (Regn. No. 000643N), were appointed as Statutory Auditors of the Company up to the financial year 2018-19 i.e. till the conclusion of Ninth Annual General Meeting of the Company.
Vide notification dated May 7, 2018 issued by Ministry of Corporate Affairs, the requirement of seeking ratification of appointment of statutory auditors by members at each AGM has been done away with. Accordingly, no such item has been considered in notice of the 8th AGM.
The Notes on financial statement referred to in the Auditors’ Report are self — explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.
Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud during the year under review.
SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s S Khandelwal & Co, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith marked as Annexure ‘B’ to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the year under review, the Company has duly complied with the applicable provisions of the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by The Institute of Company Secretaries of India (ICSI).
Electronic copies of the Annual Report 2018 and Notice of the 8th AGM are being sent to all the members whose email addresses are registered with the Company / Depository Participant(s). For members who have not registered their email addresses, physical copies of the Annual Report 2018 and Notice of the 8th AGM are being sent in the permitted mode. Members requiring physical copies can send a request to the Company Secretary.
The Company is providing e-voting facility to all members to enable them to cast their votes electronically on all resolutions setforth in the Notice convening the 8th AGM of the Company. This is pursuant to Section 108 of the Companies Act, 2013 and the Companies (Management and Administration) Amendment Rules, 2015. The instructions for e-voting are provided in the Notice.
LISTING WITH STOCK EXCHANGE
The equity shares of the Company continue to remain listed with the BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The listing fees payable to the exchanges for the financial year 2018-2019 have been paid. The Global Depository Receipts of the Company continue to be listed on the Luxembourg Stock Exchange.
DISCLOSURES: Audit Committee
During the year, the Audit Committee was reconstituted owing to resignation of Mr. Yashish Dahiya, independent Director as its member. The Audit Committee thus comprised of four members namely, Mr. Narayanasany Jeevagan, independent Director as the Chairman, Mr. Debashis Gupta, Mr. Sanjiv Chhikara, independent Directors and Mr. Rajiv Rattan, non-executive director, as the other members.
The details about Audit Committee and its terms of reference etc. have been given in Corporate Governance Report.
All the recommendations made by the Audit Committee, as to various matters, during the year under review, were accepted by the Board.
In line with the requirements under Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations, the Company has established a Vigil (Whistle Blower) Mechanism and formulated a Policy in order to provide a framework for responsible and secure whistle blowing / vigil mechanism. The Vigil (Whistle Blower) Mechanism aims to provide a channel to the Directors and employees to report genuine concerns about unethical behavior, actual or suspected fraud or violation of the codes of conduct or policy. To guard against the victimization of the persons using the vigil mechanism, the Whistle Blower Policy of the Company makes provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases.
The Policy on vigil mechanism and whistle blower policy may be accessed on the Company’s website at the link: http://www. rattanindia.com/ril/investor-contacts/.
Meetings of the Board
Eight meetings of the Board of Directors were held during the FY 2017-18. For further details, please refer report on Corporate Governance to this Annual Report. Additionally a meeting of the Independent directors of the Company was held on May 15, 2018.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements.
Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act, are provided in Annexure -’C’ to this Report.
Extract of Annual Return
Extract of Annual Return of the Company is annexed herewith as Annexure ‘D’ to this Report.
Particulars of Employees
The information required pursuant to Section 197 of the Act read with Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect as to the names and other particulars of the employees drawing remuneration in excess of the stipulated limits, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are therefore being sent to the Members and others entitled thereto, excluding the said information on employees’ particulars. However in addition to any member interested in obtaining such information, being provided with a copy of the statement containing such information, as indicated in the foregoing para, the same is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting.
The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are however being provided in “Annexure E”, to this Report.
Your Directors state that no disclosure or reporting is required in respect of the following items as no transactions pertaining thereto were undertaken/there were no developments pertinent to same, during the year under review:
1. Deposits covered under Chapter V of the Companies Act, 2013.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employees of the Company under any scheme.
4. Significant or materials orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.
5. Remuneration or commission to the Whole-time Director of the Company.
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (SHWWA)
Your Directors further state that during the year under review, there were no cases filed pursuant to the SHWWA as the Company is fully complaint with the provisions of the same.
It would be also pertinent to mention here that a Company has constituted a Internal Complaints Committee under SHWWA.
Your Directors wish to express their gratitude for the continuous assistance and support received from the investors, bankers, financial institutions and government authorities during the year. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company’s executives, staff and workers.
For and on behalf of the Board of Directors
Place : New Delhi Rajiv Rattan
Date : August 31, 2018 Chairman