As on: Sep 26, 2023 12:51 AM
To,
The Members,
Rainbow Foundations Limited
Your Directors have pleasure in presenting the 28th Annual Report on the business and operations of your Company, along with the Audited financial statements for the year ended 31st March, 2022.
1. FINANCIAL RESULTS
2. ECONOMIC REVIEW:
The Indian economy has been fairly resilient in the last year despite pandemic related challenges, however few headwinds could impact economic recovery in FY 2022-23. Global disruptions, shortages and escalating prices of commodities as a result of geopolitical tensions and sanctions have so far persisted which pose a substantial risk of unusually high inflation.
While the short-term outlook seems challenging given external supply shocks and geopolitical tension, we do believe the government is doing the right things to ensure a sustainable growth path for the country and the operational momentum of your company is likely to be sustained by its healthy Balance Sheet and robust project Pipeline. Your company will focus on opportunistic growth in the current environment to create a healthy project pipeline.
3. OPERATIONAL AND FINANCIAL PERFORMANCE HIGHLIGHTS:
During the year under review, the turnover of the company has increased to Rs.3,60,191.84 thousand as compared to previous year turnover of Rs. 3,46,187.83 thousand. However there is an increase in turnover but due to increase in total expenditure as well, the profits of the company have reduced by 73.779%. The Earning per Share ( EPS ) for the year also reduced to Rs. 0.54 as compared to Rs. 2.07 in the previous year due to increase in expenditure.
4. CHANGE IN NATURE OF BUSINESS:
During the year, there was no change in the nature of business of the Company.
5. CORPORATE GOVERNANCE
Your Company is committed towards maintaining high standards of Governance. The Report on Corporate Governance as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 ( Listing Regulations ), shareholders information together with a Corporate Governance Compliance Certificate from M/s GASM DANSR AND CO, Statutory Auditor of the Company confirming compliance, forms an integral part of this Report which is annexed herewith as Annexure (A) .
6. BOARD EVALUATION
Pursuant to the provisions of the Act and Regulation 17 of the Listing Regulations, a formal evaluation was carried out by the Board of its own performance and that of its committees and individual directors.
During the year under review, one meeting of the Independent directors was held wherein the performance of non-independent directors and the Board as whole were reviewed. The performance evaluation of committees and Independent Directors was carried out by entire Board excluding the director being evaluated. The Independent Directors also assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Directors to effectively and necessarily perform their duties.
The final evaluation was thereafter deliberated and assessed taking into account inputs from the Board about evaluation of independent directors and various committees of the Board and suggesting action plan for improving Board performance and plan for next Board, its Committee(s) and individual director s evaluation.
7. INDEPENDENT DIRECTORS
Definition of Independent Director is referred in Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. Based on the confirmation/disclosures received from the Directors and on evaluation of the relationships disclosed, the following Directors are Independent: l Mr. Sampat Raj Singhvi l Mr. Pushpala Motiram Manjith l Mr. Maithri Jayakkar
8. NOMINATION & REMUNERATION POLICY
Your Company has a Nomination & Remuneration policy for selection and appointment of Directors, Senior Management and fixing their remuneration, including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under Section 178 (4) of the Act. The said policy and the composition of the Nomination and Remuneration Committee have been stated in the Corporate Governance Report.
9. SHARE CAPITAL:
During the year under review the Board of Directors of the Company has not issued any shares, hence the present Capital structure of the Company is as follows:
10. DIVIDEND:
No Dividend is recommended for the current financial year due to inadequate profit earned by the Company.
However, the company paid a sum of Rs. 45,500/- to the preference shareholders which is the dividend on Cumulative Preference Shares issued by the company as at 31.03.2021 in accordance with the terms and conditions approved by the shareholders of the Company in its Extraordinary General Meeting held on 05th December, 2018.
11. TRANSFER TO RESERVES:
No amount was transferred to reserves during the FY 2021-22.
12. SUBSIDIARY COMPANIES/ ASSOCIATE COMPANIES/ HOLDING COMPANIES/ JOINT VENTURES:
Your company does not have any subsidiaries, associate company and joint ventures during the year under review.
13. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY, OCCURRING AFTER BALANCE SHEET DATE:
The Company has allotted 4,41,04,800 (Four Crore Forty One Lakh Four Thousand and Eight Hundred) Equity Shares having face value of Rs. 10/- (Rupees Ten) on a right basis to the existing equity shareholders of the Company at a price of Rs. 11/- (Rupees Eleven only) per Equity Share in the ratio of 8:1 i.e. 8 (Eight) Equity Shares for every 1 (One) Equity Share on 27th April, 2022 for the purpose of redemption of preference shares.
Further, the Board of Directors in its meeting held on 06th May, 2022 has decided to redeem Non-convertible Redeemable Cumulative Preference Shares (NCRCPS) in multiple tranches and as on date the company has redeem the 6000000 NCRCPS of Rs.10/- (Rupees Ten only) aggregating to Rs. 6,00,00,000/- .
Apart from the above, there have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of the Report.
14. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186:
There were no Loans, Guarantees and Investments made by the company under the provisions of Section 186 of the Companies Act, 2013 (the Act) during the year under review and hence the said provision is not applicable.
15. RELATED PARTY TRANSACTION:
Your Company has in place a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. This policy has been approved by the Board and is available on the Company s website (www.rainbowfoundations.in).
During the year under review, the company has not entered into any contracts and arrangements as per Section 188(1) of Companies Act, 2013.
16. DEPOSITS:
Your Company has neither accepted nor renewed any deposit during the year. As such, no amount of principal and/ or interest is outstanding as on the Balance Sheet date.
17. STATUTORY AUDITORS AND THEIR REPORT:
As per the provisions of Section 139 of the Act, M/s. GASM DANSR and Co, Chartered Accountants (ICAI Firm Registration No.005986S), were appointed as Statutory Auditors of your Company, to hold office until the conclusion of the 28th Annual General Meeting.
The tenure of the Statutory Auditor expires in the ensuing Annual General Meeting and the Board proposes their reappointment for a period of another 5 years.
As required under Regulation 33 of the Listing Regulations, Statutory Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
There are no qualifications, reservations or adverse remarks made by Statutory Auditors, in their Report.
18. INTERNAL AUDITOR:
Pursuant to the provisions of Section 138 of the Companies Act, 2013, M/s. BKJ & Co., Chartered Accountant, (Membership No: 243126), Chennai is appointed as the Internal Auditors of the Company for the period of three financial year (From 2019-20 to 2021 to 22).
The Board of Directors in its meeting held on 12th August, 2022, re-appointed M/s. BKJ & Co., as Internal Auditor of the Company for the period of three financial year (From 2022-23 to 2024-25).
19. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Act and Rules, Regulation 24A of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and other applicable provisions framed thereunder, as amended, your Company appointed JM & Associates, Practicing Company Secretary to undertake the Secretarial Audit of the Company for the financial year 2021-22. The Practicing Company Secretary has submitted his Report on the Secretarial Audit conducted by him which is annexed herewith as Annexure (B) .
20. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. This ensures that all transactions are authorized, recorded and reported correctly, and assets are safeguarded and protected against loss from un-authorized use or disposition. In addition, there are operational controls and fraud risk controls, covering the entire spectrum of internal financial controls.
21. FRAUD REPORTING:
During the year under review, there were no material or serious instances of fraud falling within the purview of Section 143 (12) of the Companies Act, 2013 and rules made thereunder, by officers or employees reported by the Statutory Auditors of the Company during the course of the audit conducted.
22. COST AUDITORS:
Cost Audit is not applicable to the Company. The Central government has not specified maintenance of cost records for the Company under Sub Section (1) of section 148 of the Companies Act 2013. Therefore, there is no requirement for appointment of Cost Auditors.
23. MATTERS RELATED TO DIRECTORS AND KEY MANAGERIAL PERSONNEL:
The Board of your Company is duly constituted in accordance with the requirements of the Companies Act, 2013 read with the Listing Regulations.
24. MEETINGS OF THE BOARD AND ITS COMMITTEES
The details of (a) the meetings of the Board and its Committees held during the year; and (b) composition and terms of reference of the Committees are detailed in the Corporate Governance Report.
25. CODE OF CONDUCT
The Board has approved a Code of Business Conduct (Code) which is applicable to the Members of the Board and insiders. The Code of Business has been posted on the Company s website (www.rainbowfoundations.in). The Code lays down the standard of conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
26. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO:
A) Conservation of energy, technology absorption:
The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the Company duringthe year under review.
B) Foreign Exchange Earnings and Outgo:
During the period under report, your Company had not earned any amount of foreign exchange nor had incurred expenditure in foreign exchange.
27. PARTICULARS OFEMPLOYEES:
The information required pursuant to Section 197(12) read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure (C1) .
A statement containing the names of top ten employees in terms of remuneration drawn and the name of every employee employed throughout the Financial Year was in receipt of remuneration of Rs.102 lakhs or more, or if employed for part of the year and in receipt of Rs.8.50 lakhs or more per month, pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure (C2) .
28. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company has not developed and implemented any Corporate Social Responsibility initiatives as the said provisions are not applicable.
29. ANNUAL RETURN:
In accordance with the Companies Act, 2013, the annual return in the prescribed format is available at (www.rainbowfoundations.in.)
30. RISK MANAGEMENT POLICY:
Your Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.
31. VIGIL MECHANISM POLICY:
The Company has established a vigil mechanism / whistle blower policy for Directors and employees to report their concerns, which is reviewed and updated from time to time. The said policy is available on the Company s website (www.rainbowfoundations.in.)
32. PREVENTION OF SEXUAL HARASSMENT POLICY:
The Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 is applicable to your Company.
Your Company has in place an Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.
During the year under review, the Company has not received any complaints from the employees with regard to Sexual Harassment.
33. MANAGEMENT?S DISCUSSION AND ANALYSIS REPORT:
The Management Discussion and Analysis Report for the year under review, as stipulated under Schedule V of the Listing Regulations, is forming part of this Annual Report as Annexure D
34. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS, TRIBUNALS
IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATIONS IN FUTURE:
During the period under review, there are no significant or material orders were passed by the Regulators, Courts, and Tribunals which affects the Company s going concern status or operations.
35. DIRECTORS? RESPONSIBILITY STATEMENT:
To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:
(a) in the preparation of the annual Financial Statements for the year ended March 31,2022, the applicable accounting standards has been followed along with proper explanation relating to material departures;
(b) your directors have 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 at the end of the financial year March 31, 2022 and of the profit of the company for the period ended March 31, 2022;
(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) the Annual Financial Statements have been prepared on a going concern basis; and
(e) the directors had devised proper internal systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
(f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
36. ACKNOWLEDGEMENTS:
Your Directors wish to place on the record their deep sense of appreciation to the devoted services, unstinted support and excellent service rendered by all the customers, Professional colleagues and bankers.
FOR RAINBOW FOUNDATIONS LIMITED