DEAR SHAREOWNERS,
Your Directors present the 22nd Annual Report and the audited financial
statement for the Financial Year ended March 31, 2019
Financial Results
The financial performance of the Company, on standalone basis, for the financial year
ended March 31, 2019 is summarised below:
|
|
(र in Lakh) |
| Particulars |
Financial year ended March 31, 2019 |
Financial year ended March 31, 2018 |
| Total Income |
18,463.04 |
41,384.25 |
| Profit / (Loss) before taxation |
(10,10,098.29) |
(1,16,853.21) |
| Tax expenses (Net) (including deferred tax and tax for earlier years) |
(38,006.43) |
21,245.47 |
| Profit / (Loss) after taxation |
(10,48,104.72) |
(95,607.74) |
| Other Comprehensive Income |
(11.96) |
28.24 |
| Total Comprehensive Income for the year |
(10,48,116.68) |
(95,579.50) |
| Add: Balance of profit/(loss) brought forward |
(51,468.68) |
43,427.32 |
| Securities Premium on issue of shares |
- |
683.50 |
| Balance carried to Balance Sheet |
(10,99,585.36) |
(51,468.68) |
Financial Performance
During the financial year under review, your Company earned an income of Rs. 18,463.04
lakhs against Rs. 41,384.25 Lakhs in previous year. The Company incurred a loss after tax
of Rs. 10,48,104.72 lakhs for the year as compared to Rs. 95,607.74 lakhs in the previous
year.
The performance and financial position of the subsidiary companies and associate
company are included in the consolidated financial statement of the Company and presented
in the Management Discussion and Analysis forming part of this Annual Report.
Dividend
In view of the inadequacy of profit during the year under review, the Board of Director
has not recommended dividend on the equity shares of the Company.
The Companys Dividend Distribution Policy forms part of this annual report.
Business Operations
The Company is primarily engaged into defence and commercial shipbuilding, ship repair
and offshore engineering activities and operates the largest dry dock in India. Our
Companys shipyard at Pipavav, Gujarat, has integrated state of-the-art production
facilities.
Our Companys Shipyard at Pipavav, Gujarat, is certified by the US Navy for servicing
of warships from the US Navys Seventh fleet. Currently, this is the only Indian Shipyard
to achieve this landmark.
During the year under review, our Company launched first-of-its-kind the largest next
generation training ship for Indian
Coast Guard (ICG) entirely designed by the Design Bureau of the Company. The training
ship has the primary role to impart sea training to cadets, including an all-round
exposure to the lives of ICG officers. The vessel is 105 meters long, with a capacity of
accommodating 242 personnel. The vessel is powered by twin diesel engines of 10,400KW and
can move at a speed of 20knots. The vessel is also equipped with weapons systems and is
capable of policing maritime zones of the country as well as for search and rescue
missions. The vessels capability also includes operating a twin-engine helicopter for
undertaking maritime reconnaissance.
Debt Refinancing and Resolution Plan
As on March 31, 2019 the Company had outstanding fund based borrowings of Rs. 7,835
Crores crore (including interest) taken from banks and financial institutions. Due to long
gestation period of large scale infrastructure created by our Company, non-availability of
working capital on time coupled with dearth in new orders the operations of our Company
were severely impacted during the year. The Companys business is significantly dependent
on defence contracts and in absence of finalisation of any such contracts; the earnings of
the Company were insufficient to service the debt. As a matter of fact, it further
increased its financial stress.
The Company is under discussion with the lenders and looking forward to achieve debt
resolution under the extant RBI guidelines.
During the year under review, one of the lenders has filed an application before the
National Company Law Tribunal, Ahmedabad seeking debt resolution under IBC process in
compliance with the circular dated February 12, 2018 issued by Reserve Bank of India.
Further lenders have also filed application against the Company with Debts Recovery
Tribunal, Ahmedabad.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under
Regulation 34(2) of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 (Listing Regulations) is presented in a
separate section forming part of this Annual Report.
Non-Convertible Debentures
During the year under review, the Company has revoked / extinguished the 2,42,31,000
Secured, Redeemable, Unlisted, Non-Convertible Debentures of Rs. 100 each aggregating to
Rs. 243.31 crores, issued on private placement basis to the lenders for consideration
other than cash, against the Right of Recompense (RoR). These debentures were issued in
anticipation of lenders approving the Refinance Scheme.
Deposit
During the year under review, the Company has neither accepted nor renewed any deposits
from the public falling within the ambit of Section 73 of the Companies Act, 2013
(‘the Act) and the relevant Rules made there under. There are no unclaimed deposits,
unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the
Investor Education and
Protection Fund as on March 31, 2019.
Particulars of Loans, Guarantees or Investments
Pursuant to Section 186 of the Act, details of the Investment made by the Company are
provided in standalone financial statement under Note no. 3.
Subsidiary Companies, Associate and Joint venture
As on March 31, 2019 the Company is having 6 subsidiaries under its fold and 1
Associate Company.
The financial performance of each of the subsidiaries and associate companies as per
the Act is provided in the consolidated financial statement.
During the year, due to non-viability of the project, Mazagon Dock Pipavav Defence
Private Limited (MDPDPL), the joint venture company between the Company and Mazagon Dock
Shipbuilders Limited has been terminated and necessary application for strike off of the
name of the joint venture company from the register of companies has been filed with the
Registrar of Companies (ROC), Maharashtra at Mumbai. Final notification by the ROC is
awaited.
The Companys policy for determining material subsidiaries, as approved by the Board,
may be accessed on the Companys website at the link: https://
www.rnaval.co.in/web/rnaval/ corporate-governance.
Financial Statement – Application of Indian Accounting Standards (Ind AS)
The audited financial statement of the Company drawn up, both on standalone and
consolidated basis, for the financial year ended March 31, 2019, are in the accordance
with the requirements of the Companies (Indian Accounting Standards) Rules, 2015 "Ind
AS Rules".
Consolidated Financial Statement
The Audited Consolidated Financial Statement for the financial year ended March 31,
2019, based on the financial statement received from subsidiaries and associate companies,
as approved by their respective Board of Directors have been prepared in accordance with
the Companies (Indian Accounting Standards) Rules, 2015 (‘Ind AS) prescribed under
Section 133 of the Companies Act, 2013 and other recognised accounting practices and
policies.
Directors
During the year under review, Shri Debashis Bir has been appointed as Whole-time
Director of the Company w.e.f. April 01, 2018 for a period of 2 years. The period of 2
years will expire on March 31, 2020. It is proposed to re-appoint Shri Debashis Bir as
Whole-time Director of the Company for a further period of 3 years. The Nomination and
Remuneration Committee of the Board, has recommended appointment Shri Debashis Bir. The
Board also recommends his re-appointment. Lt. Gen. Syed Ata Hasnain (Retd.), Shri Rajesh
Dhingra and Shri Rahul Sarin have resigned as Directors of the Company w.e.f. August 10,
2018.
Shri Anil D. Ambani has resigned as Director of the Company w.e.f. August 25, 2018.
The IDBI Bank Limited and Life Insurance Corporation of India have withdrawn nomination
of Shri Rajeev Kumar and Shri Raj Kumar as Nominee Directors from the Board of Directors
of the Company w.e.f. September 22, 2018 and February 02, 2019, respectively.
Ms C R Gayathri has resigned as Director of the Company w.e.f.
December 14, 2018. Shri Rana Ranjit Rai, Ms. Ryna Karani, and Shri Sateesh Seth have
resigned as Directors of the Company w.e.f. February 02, 2019.
Shri Raj Narain Bhardwaj has resigned as Director of the Company w.e.f. February 07,
2019.
Pursuant to the provision of Section 161 of the Act, Ms Ankita
Tallur has been appointed as Additional Director of the Company w.e.f. February 02,
2019. Further, Shri Pankaj Pandya, was appointed as Additional Director in the capacity of
Independent Director and Shri Venkata Rachakonda and Ms. Shiby Jobby were also appointed
as Additional Directors of the Company w.e.f. March 30, 2019. Ms. Ankita Tallur, Shri
Pankaj Pandya, Shri
Venkata Rachakonda and Ms. Shiby Jobby shall hold office till the conclusion of ensuing
Annual General Meeting (AGM) of the Company.
The Company has received notices in writing from a member under Section 160 of the Act,
proposing the candidature of
Ms. Ankita Tallur, Shri Pankaj Pandya, Shri Venkata Rachakonda and Ms. Shiby Jobby, for
the office of Director of the Company.
The Nomination and Remuneration Committee of the Board, has recommended appointment of
all the above mentioned directors. The Board also recommends appointment of Shri Pankaj
Pandya, as an Independent Director, for a period of five consecutive years effective from
the date of appointment as an Additional director, not being liable to retire by rotation
and also appointment of Ms. Ankita Tallur, Shri Venkata Rachakonda and Ms. Shiby Jobby as
Directors, being liable to retire by rotation.
In the opinion of the Board, the Independent Director proposed to be appointed fulfils
the conditions specified in the Act and the rules made thereunder and that the proposed
independent director is independent of the management.
The Board places on record its appreciation for valuable contribution made by Lt. Gen.
Syed Ata Hasnain (Retd.), Shri Rajesh Dhingra, Shri Rahul Sarin, Shri Anil D. Ambani, Shri
Rajeev Kumar, Ms. C R Gayathri, Shri Raj Kumar, Shri Rana Ranjit Rai, Ms. Ryna Karani,
Shri Sateesh Seth and Shri Raj Narain Bhardwaj during their tenure as Directors of the
Company.
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet the criteria of independence as prescribed under the Act and the
Listing Regulations.
The details of programme for familiarization of Independent Directors with the Company,
nature of the industry in which the Company operates and related matters are uploaded on
the website of the Company at the link http://www.rnaval.co.in/
web/rnaval/corporate-governance.
In term of the provisions of the Companies Act, 2013 Shri Debashis Bir, Whole-time
Director and Chief Executive Officer of the Company, retires by rotation and being
eligible, offers himself for re-appointment at the ensuing AGM. A brief resume of Shri
Debashis Bir, along with requisite details, as stipulated under Regulation 36(3) of the
Listing Regulations is given in the section on Corporate Governance Report forming part of
this Annual Report.
Key Managerial Personnel (KMP)
During the year under review, Shri Debashis Bir has been appointed as Whole-time
Director and Chief Executive Officer and termed as KMP with effect from April 1, 2018.
Shri Paresh Rathod has been appointed as Company Secretary and termed as KMP with effect
from April 1, 2018
Evaluation of Directors, Board and Committees
The Nomination and Remuneration Committee (NRC) of the Company has devised a policy for
performance evaluation of the individual directors, Board and its Committees, which
includes criteria for performance evaluation.
Pursuant to the provisions of the Act, Regulation 17(10) of the Listing Regulations and
based on the policy devised by NRC, 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 the Committees of the Board. A separate meeting of the Independent
Directors was also held during the financial year for the evaluation of the performance of
non-independent Directors, performance of the Board as a whole and that of the Chairman.
Policy on appointment and remuneration for Directors, Key Managerial Personnel and
Senior Management Employees
The Nomination and Remuneration Committee of the Board has devised a policy for
selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior
Management Employees. The Committee has formulated the criteria for determining
qualifications, positive attributes and independence of a Director, which has been put up
on the Companys website http://www.rnaval.co.in/web/rnaval/corporate-governance and also
is attached as Annexure - A.
Directors Responsibility Statement
Pursuant to the requirements under Section 134(5) of the Act with respect to Directors
Responsibility Statement, it is hereby confirmed that: i. In the preparation of the annual
financial statement for the financial year ended March 31, 2019, the applicable Accounting
Standards had been followed along with proper explanation relating to material departures,
if any; ii. The Directors 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 March 31, 2019 and
of the loss of the Company for the year ended on that date; iii. The Directors had 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; iv. The Directors had
prepared the annual financial statement for the financial year ended March 31, 2019, on a
‘going concern basis; v. The Directors had laid down proper internal financial
controls to be followed by the Company and such financial controls are adequate and are
operating effectively; and vi. The Directors 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 into/by the Company during the
financial year under review with related parties were on an arms length basis and in the
ordinary course of business.
There were no materially significant related party transactions which could have a
potential conflict with the interest of the Company at large.
During the year, the Company had not entered in to any contract / arrangement /
transaction with related parties which could be considered material in accordance with the
policy of Company on materiality of related party transactions.
All Related Party Transactions were placed before the Audit Committee for approval.
Prior omnibus approval of the Audit Committee was obtained for the transactions which were
of a repetitive nature. The transactions entered into pursuant to the omnibus approval so
granted were reviewed and statements giving details of all related party transactions were
placed before the Audit Committee on a quarterly basis. The policy on Related
Party Transactions as approved by the Board is uploaded on the Companys website at the
link: http://www.rnaval.co.in/web/ rnaval/corporate-governance. Your Directors draw
attention of the members to Note No. 39 to the Standalone Financial Statements which sets
out Related Party Disclosures.
Material Changes and Commitments, if any, affecting the financial position of the
Company
There were no material changes and commitments affecting the financial position of the
Company which have occurred between the end of the financial year and the date of this
report.
Meetings of the Board
A Calendar of Meetings is prepared and circulated in advance to the Directors. During
the financial year, four Board Meetings were held, details of which are given in the
Corporate Governance Report, forming part of this Annual Report.
Audit Committee
During the financial year, Audit Committee has been re-constituted by the Board of
Directors on April 01, 2018, February 02, 2019 and March 30, 2019. As on March 31, 2019,
the committee consists of majority of Independent Directors namely Shri K. Ravikumar, as
Chairman, Shri Pankaj Pandya and Shri Debashis Bir, as members. During the year, all the
recommendations made by the Audit Committee were accepted by the Board.
Auditors and Auditors Report
M/s. Pathak H.D. & Associates, Chartered Accountants were appointed as Auditors of
the Company for a term of 5 (five) consecutive years, at the Annual General Meeting of the
Company held on September 30, 2015. The Company has received confirmation from M/s. Pathak
H.D. & Associates, Chartered Accountants that they are not disqualified from
continuing as Auditors of the Company.
The observations and comments given by the Auditors in their report read together with
notes on financial statements are self-explanatory and hence do not call for any further
comments under Section 134 of the Act.
Secretarial Standards
During the year under review, the Company has complied with the applicable Secretarial
Standards issued by The Institute of Company Secretaries of India.
Secretarial Audit and Secretarial Compliance Report
Pursuant to the provisions of Section 204 of the Act read with the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors
has appointed M/s. Ashita Kaul & Associates, Practicing Company Secretaries, to
undertake the Secretarial Audit of the Company. There is no qualification, reservation or
adverse remark made by the Secretarial Auditor in the Secretarial Audit Report, except
that the lenders have till date not provided their approval for payment of remuneration to
Shri Debashis Bir, as Whole-time Director. The Company has appointed Shri Debashis Bir, as
Whole-time Director with due communication and application to the lenders. The Audit
Report of the Secretarial Auditors for the financial year ended March 31, 2019 is attached
as Annexure - B. Pursuant to circular No.CIR/ CFD/ CMD1/ 27/ 2019 dated February
08, 2019, issued by the Securities and Exchange Board of India (SEBI) the Company has
obtained Secretarial Compliance Report, from a Practicing Company Secretary (PCS) on
compliance of all applicable SEBI Regulations and circulars/ guidelines issued there under
and the copy of the same shall be submitted with the Stock Exchanges within the prescribed
due date.
Annual Return
As required under Section 134(3)(a) of the Act, the Annual Return of the financial year
2017-18 and 2018-19 is put up on the Companys website and can be accessed at the link:
http:// www.rnaval.co.in/web/rnaval/AGM-2018-19.
Particulars of Employees and related disclosures
In terms of the provisions of Section 197(12) of the Act read with Rule 5(2) and 5(3)
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as
amended, a statement showing the names and other particulars of the employees drawing
remuneration in excess of the limits set out in the said Rules are provided in the
Annexure, which forms part of this Report.
Disclosures relating to the remuneration and other details as required under Section
197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, as amended, are also forming part of this Report.
However, having regard to the provisions of first proviso to Section 136(1) of the Act,
the Annual Report excluding the aforesaid information is being sent to all the members of
the Company and others entitled thereto. The said information is available for inspection
at the registered office of the Company on all working days, except Saturdays between
11:00 A.M. and 1:00 P.M. up to the date of the Meeting. Any member interested in obtaining
the same may write to the Company Secretary and the same will be furnished on request.
Conservation of energy, technology absorption and foreign exchange earnings and outgo
The particulars as required to be disclosed in terms of Section 134(3)(m) of the Act
read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure - C forming
part of this Report.
Corporate Governance
The Company has adopted ‘Reliance Group– Corporate Governance Policies and
Code of Conduct which sets out the systems, processes and policies confirming to the
international standards. The report on Corporate Governance as stipulated under Regulation
34(3) read with para C of Schedule V of the Listing Regulations is presented in a separate
section forming part of this Annual Report.
A certificate from M/s Ashita Kaul, Practising Company Secretary conforming compliance
to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the
Listing Regulations, is enclosed to this Report.
Whistle Blower Policy (Vigil Mechanism)
In accordance with Section 177 of the Act and Listing Regulations, the Company has
formulated a Vigil Mechanism Policy to address the genuine concerns, if any, of the
directors and employees. The details of the same have been stated in the Report on
Corporate Governance and the policy can also be accessed on the Companys website at the
link: http://www. rnaval.co.in/web/rnaval/corporate-governance.
Risk Management
The Company continues to have a Risk Management Committee consisting majority of Board
of Directors. However, the mandatory provisions of listing regulations are not applicable
to the Company. The details of the Committee and its terms of reference, etc. are set out
in the Corporate Governance Report forming part of this Report.
The Company has a robust Business Risk Management (BRM) framework to identify, evaluate
business risks and opportunities. This framework seeks to create transparency, minimize
adverse impact on the business objectives and enhances Companys competitive advantage.
The business risk framework defines the risk management approach across the enterprise at
various levels including documentation and reporting. The framework has different risk
models which help in identifying risk trend, exposure and potential impact analysis at a
Company level and also separately for business segment. The risks are assessed for each
project and mitigation measures are initiated both at the project as well as the corporate
level. More details on Risk
Management indicating development and implementation of Risk Management policy
including identification of elements of risk and their mitigation are covered in
Management Discussion and Analysis section, which forms part of this Report.
Compliance with the provisions of Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013
The Company is committed to uphold and maintain the dignity of women employees and it
has in place a policy which provides for protection against sexual harassment of women at
work place and for prevention and redressal of such complaints. During the year under
review, no such complaints were received. The Company has also constituted an Internal
Compliance Committee under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
Corporate Social Responsibility
The Company has constituted Corporate Social Responsibility (CSR) Committee in
compliance with the provisions of Section 135 of the Act read with the Companies
(Corporate Social Responsibility Policy) Rules, 2014. The Corporate Social Responsibility
Committee has formulated a Corporate Social Responsibility Policy (‘CSR policy)
indicating the activities to be undertaken by the Company. The CSR policy may be accessed
on the Companys website at the link: http://www.rnaval.co.in/
web/rnaval/corporate-governance.
As on March 31, 2019, the CSR Committee of the Board consist of Shri Pankaj Pandya, as
Chairman, Shri Debashis Bir, Shri Venkata Rachakonda, as members.
The disclosure with respect to CSR activities is given as Annexure - D.
Order, if any, passed by the Regulators or Courts or Tribunals
No orders have been passed by the Regulators or Courts or Tribunals impacting the going
concern status of the Company and its operations.
Internal Financial Controls and their adequacy
The Company has in place adequate internal financial controls with reference to
financial statement across the organization.
The same is subject to review periodically by the internal audit cell for its
effectiveness. During the financial year, such controls were tested and no reportable
material weaknesses in the design or operations were observed.
Acknowledgement
Your Directors would like to express their sincere appreciation for the co-operation
and assistance received from shareholders, Debenture holders, debenture trustee, bankers,
financial institutions, regulatory bodies and other business constituents during the year
under review. Your Directors also wish to place on record their deep sense of appreciation
for the commitment displayed by all executives, officers and staff, resulting in the
successful performance of the Company during the year.
| For and on behalf of the Board of Directors |
|
| Shri Debashis Bir |
Shri K Ravikumar |
| Whole-time Director and CEO |
Chairman |
| Place : Mumbai |
|
| Date : May 28, 2019 |
|
+91-9892691696
