DIRECTORS' REPORT To The Members of The Baroda Rayon Corporation Limited Your Directors are pleased to present the 55th Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2015. The Financial results are shown as below. Overview of Company's Financial Performance Your company's net loss is Rs. 350.87 lakhs as against Rs. 333.89 lakhs in the previous year. Interest cost has reduced to Rs. 20.31 lakhs as against Rs. 598.5 lakhs in previous year. Total expenditure of your company has reduced to Rs. 37.64 lakhs as against Rs. 1296.46 lakhs in previous year. Dividend Your Directors regret their inability to recommend any dividend for the financial period under review in view of the continued losses. Share Capital The issued, subscribed and paid-up equity share capital of the company as on 31st March, 2015 is Rs. 2291.14 lakhs. During the year under review, the Company has not issued shares with differential voting rights, nor granted stock options nor sweat equity. As on 31st March, 2015 none of the Directors of the company holds equity shares in the company. Transfer to Reserves During the year under review, no amount was transferred to General Reserve. Change in nature of business During the year under review, there is no change in the nature of business of the company. Review of Operation During the year under review no production/manufacturing activities were carried on by the company. Hence, No information is provided regarding the performance of the company. Your company is seeking new avenues in order to restart the operations of your company. Material changes and commitment affecting the financial position of the company occurred between the end of the financial year to which this financial statements relate and the date of the report There were 2(Two) material changes and commitments affecting the financial position of your Company which have occurred between the end of the financial year 2014-15 and the date of this Report viz. - 1) Secured working capital loan of Punjab National Bank (PNB) have been paid in full for which a "No Due Certificate" was obtained on 27.04.2015 and the charge was satisfied with ROC on 27.05.2015. Hence, no liability is outstanding towards the same. 2) A settlement was made with Dakshin Gujarat Vij Company Limited on 30.05.2015 through third party regarding electricity dues of Rs. 557.82 lakhs as principal and 25% against the overdue interest on electricity charges, the bank guarantee for Rs. 644.59 lakhs was also given to DGVCL. Thereafter legal cases were withdrawn by both the sides. Directors' Responsibility Statement In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submit its responsibility Statement:— a) in the preparation of the annual accounts for the year ended March 31, 2015, 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; b) the Directors have selected such accounting policies and applied them consistently and made judgements 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 March 31, 2015 and of the profit/loss of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts on a 'going concern' basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES Your Company does not have any Subsidiaries, Joint Ventures and Associate Companies. Deposits During the financial year 2014-15, your Company has not accepted any fixed deposits within the meaning of section 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014. During the year under review your company has repaid fixed deposits of Rs. 109.98 lakhs. However, deposits of Rs. 61.51 lakhs were outstanding as at 31st March, 2015 as the matter is disputed. Directors and key managerial personnel Appointments: In compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Shri Bhavanjibhai Patel, Shri Bhaveshbhai Patel and Shri Jayantilal Patel were appointed as Independent Directors on the Board of Directors of your Company at the 54th AGM of your Company held on 30th September, 2014 to hold office up to 5 (five) consecutive years up to Annual General Meeting to be held in Calendar year 2019. At the aforementioned AGM, Shri Damodarbhai Patel, Managing Director of your Company were re-appointed for 3 (three) years commencing from 12th December, 2014 to 11th December, 2017. On the recommendation of the Nomination & Remuneration Committee, the Board appointed Mrs. Vidhya Viralbhai Bhavani (DIN - 07159576) as an Additional Director of the Company with effect from 29th April, 2015 upto the date of Annual General Meeting. Disclosure relating to Remuneration and Nomination Policy The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy is explained in Corporate Governance Report. Managerial Remuneration During the year under review, no director was paid any remuneration. Independent Directors' Meeting Independent Directors of the Company had met during the year under review, details of which are given in the Corporate Governance Report. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Stakeholders Relationship Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Meetings The details of the number of Board and other Committee meetings of your Company are set out in the Corporate Governance Report which forms part of this Report. Declaration by independent directors Your Company has received declarations from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Committees of the Board There are currently three Committees of the Board, as follows: 1. Audit Committee 2. Nomination and Remuneration Committee 3. Stakeholders' Relationship Committee Details of all the Committees along with their charters, composition and meetings held during the year, are provided in the "Report on Corporate Governance", a part of this Annual Report. Corporate Governance Report In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance forms an integral part of this Report. Auditors: A. Statutory Auditors At the Annual General Meeting held on September 30, 2014, Messrs AMPAC & Associates, Chartered Accountants (Registration No. FRN 112236W), were appointed as statutory auditors of the Company to hold office till the conclusion of the Annual General Meeting to be held in the calendar year 2019. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of AMPAC & Associates, Chartered Accountants, as statutory auditors of the Company, is placed for ratification by the shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013. B. Secretarial Auditor Mr. Manish Patel, Practicing Company Secretary, Surat was appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 and Rules thereunder. The secretarial audit report for FY 2014-15 forms part of the Annual Report as "Annexure A" to the Board's report. The Board has appointed Mr. Manish Patel, Practicing Company Secretary, as secretarial auditor of the Company for the financial year 2015-16. Auditors' Report The observations made by the Auditors are self explanatory and have also been explained in the notes forming part of the accounts, wherever required. Related Party Transactions During the financial year 2014-15, there were no transactions with related parties which qualify as material transactions under the Listing Agreement and that the provisions of section 188 of the Companies act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. Further, there were not material related party transactions during the year under review with the Promoters, Directors of Key Managerial Personnel. Loans, Guarantees and Investments The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows: A). Details of investments made by the Company as on 31st March, 2015 (including investments made in the previous years) (in equity shares): B). There are no loans given by your Company in accordance with Section 186 of the Companies Act, 2013 read with the Rules issued thereunder. C). There are no guarantees issued by your Company in accordance with Section 186 of the Companies Act, 2013 read with the Rules issued thereunder. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings & Outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, are as under- (A) Conservation of Energy: The production and manufacturing activities are not carried on by the Company and due to that no usage of energy. Hence, no steps are taken by the Company for conservation of energy. (B) Technology Absorption: The company has not imported any technology during the year and as such there is nothing to report. Compliance Certificate A certificate from the Auditors of the company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is attached to this report. Extract of Annual Return In accordance with Section 134(3)(a) of the Companies Act, 2013, an extract of the annual return in the prescribed format is appended as "Annexure B" to the Board's report. Management's view on Statutory Auditors Qualification: Your Company's applications before the Hon'ble BIFR and Gujarat High Court are pending and the management desire to act as per the directions given by the respective authorities. Management's view on Secretarial Auditors Qualification: In respect of the Qualifications as stated in the Secretarial Audit Report, your management is of the view that - 1) Your company has not appointed woman director on its Board as required under Companies Act, 2013 and Listing Agreement during the period under review, however your company has appointed Mrs. Vidhya Bhavani (woman director) on its Board w.e.f. 29th April, 2015. 2) Your Company is a sick unit under the Board for Industrial & Financial Reconstruction (BIFR) and had discontinued all the production/manufacturing activities of the company and due to loss of key personnel responsible for the various compliances, the non compliances as stated in the Secretarial Report regarding Companies Act, 2013 and Listing Agreement has occurred. However, your company is in process of appointing key personnel responsible for the compliances of the same. 3) In respect of Specific Acts applicable to the Company, your company has not complied with any of the compliances required under the specified Acts above on account of discontinued operational activities by the company since August, 2008. Cash Flow Analysis The Cash Flow Statement for the year under reference in terms of clause 32 of the Listing Agreement with the stock exchanges forms part of the Annual Report. Vigil Mechanism Your Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors have formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177 (10) of the Companies Act, 2013 and Clause 49 of the Listing Agreement. The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details on the vigil mechanism and the Whistle Blower Policy of your Company have been outlined in the Corporate Governance Report which forms part of this report. Disclosures as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Since your company is having no operative activities, it has not received any complaint on sexual harassment during the financial year 2014-15. Particulars of Employees The statement containing particulars of employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as "Annexure - C". Details on internal financial controls related to financial statements Your Company has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956, to the extent applicable. These are in accordance with generally accepted accounting principles in India. Significant/Material orders passed by the regulators There are no significant/material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in future. General a) Your Company has not issued equity shares with differential rights as to dividend, voting or otherwise; and b) Your Company does not have any ESOP scheme for its employees/Directors. Appreciation Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Financial Institutions, Bankers, Suppliers, Shareholders, Employees and other who have reposed their confidence in the company during the period under review. By order of the Board of Directors Damodarbhai B Patel Chairman & Managing Director DIN:00056513 Place: Mumbai Date: 14th August, 2015 |