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Rasoya Proteins Ltd

BSE: 531522 | NSE: RASOYPR ISIN: INE904G01038
Market Cap: [Rs.Cr.] 42.72 Face Value: [Rs.] 1
Industry: Solvent Extraction

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Director's Report


The Members,

Your Directors have pleasure in presenting the Twenty Third (23) Annual Report on the business and operations of the Company together with the Audited Financial Accounts for the Financial Year ended on March 31, 2015.

1. Financial summary or highlights/Performance of the Company

Particulars Financial Year (Amount in Crores)
Standalone Consolidated
2014-15 2013-14 2014-15 2013-14
Gross Income 465.11 1196.75 729.39 1686.17
Depreciation 1.88 85.85 11.03 112.80
Finance Charges 49.40 37.66 49.40 42.79
23.82 141.90 70.31 226.10
Provision for Depreciation 12.47 10.90 12.47 10.90
(59.99) 37.29 (50.85) 59.11
Provision for Tax/Deferred Tax/CSR 0.00 5.27 (1.06) 5.13
(58.93) 32.15 (49.79) 53.98
101.24 69.09 209.75 155.77
Balance available for appropriation (59.12) 32.15 (49.79) 53.98
Proposed Dividend on Equity Shares 0.00 0.00 0.00 0.00
Tax on proposed Dividend 0.00 0.00 0.00 0.00
Transfer to General Reserve 0.00 0.00 0.00 0.00
Surplus carried to Balance Sheet 42.12 101.24 159.78 209.75

2. Financial performance


During the performance under review, the company's net revenue from operations is Rs. 465.11 Crores as against Rs. 1196.75 Crores in the previous year. Profit before Interest and Depreciation and tax is decreased to (83.90) Crores in financial year 2014-15 as against Rs. 27.57 Crores in financial year 2013-14.


During the performance under review, the company's net revenue from operations is Rs. 729.83 Crores as against Rs. 1686.17 Crores in the previous year. Profit before Interest and Depreciation and tax is decreased to (101.77) Crores in financial year 2014-15 as against Rs. 23.42 Crores in financial year 2013 14.

3. State of affairs of the Company

During the first half of the financial year there was complete mismatch in purchase price of raw material and selling price of finished goods. This has resulted in operational losses. We were expecting a good season to start from October 2014. However due to unseasonal rains the crop was badly damaged and there was complete failure of soya crop in Vidarbha Region and adjourning areas. Under such situation not only our plant but several other plants of the region have closed their operations. Further in view of the un-remunerative price offered by MSEDCL, the operations of the power plants have also become unviable forcing us to close the plant.

4. Change in the nature of business

During the year under review there was no change in the nature of the business of the Company.

5. Dividend

In view of losses, your directors do not recommend any dividend for the current year under review.

6. Unclaimed dividend

The dividend(s) declared by the Company which remain unpaid / unclaimed for a period of Seven (7) years are required to transferred to the Investor Education & Protection Fund (IEPF) established by the Central Government pursuant to Section 125 of the Companies Act, 2013. The Members are, therefore, requested to claim their unclaimed dividend, if any declared for the Financial Year 2008- 09.

In compliance to the provisions of section 125, the dividend for the Financial Year 2007-2008 declared at Annual General Meeting held on 28 July, 2008 remaining unclaimed is transferred to the Investor Education & Protection Fund (IEPF) on 11 August, 2015 and the Company has duly filed E-Form 1INV dated 18 August, 2015 Successfully with the MCA Authorities.

7. Share Capital

The paid-up Equity Share Capital as at March, 31, 2015 stood at Rs. 170,89,31,700.00/-. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity shares.

8. Directors and Key Managerial Personnel

• Mr. Prashant Govindrao Duchakke, Executive Director retires by rotation at the forthcoming Annual General Meeting and being eligible, offer himself for re-appointment.

• In order to comply with the provisions of Section 203 and other applicable provisions (if any) of the Companies Act, 2013, The Company has appointed Sameer Y Damle, Executive Director of the Company as Chief Financial Officer and designated as Key Managerial Personnel of the Company with effect from 14 August, 2014.

• Mrs. Manik Anil Lonkar has been appointed as Director of the Company with effect from 7 January, 2015.

• In order to comply with the provisions of Section 149 (4) and other applicable provisions (if any) of the Companies Act, 2013 and the Companies (Appointment and qualification of Directors) Rules, 2014, the Company has appointed following Non Executive Directors as Independent director of the Company with effect from 7 January, 2015:

Mr. Vishnu Dattatraya Bhagade - Independent Director
Mr. Sudhakar Ramchandra Khankhoje - Independent Director
Mr. Ashok Narayan Deshpande - Independent Director
Mr. Prakash Dattatraya Mujumdar* - Independent Director

• Mrs. Vandana Sanghi has resigned from the Post of Company Secretary of the Company with effect from 1 June, 2015 and Ms. Sneha Shrivastava, Associate member of The Institute of Company Secretaries of India has been appointed as the Company Secretary and designated as Key Managerial Personnel of the Company with effect from 1 June, 2015 under Section 203 of the Companies Act, 2013.

*Mr. Prakash Dattatraya Mujumdar, Non-Executive and Independent Director of the Company has resigned from the directorship of the Company with effect from 17 June, 2015.

9. External Rating

Your Company has appointed Credit Analysis & Research (CARE) Ltd. for rating of its various credit facilities. The rating of your Company has been revised from "CARE BB" (Double B) to "CARE D"(Single D) for Long Term facilities and "CARE A 4" (A Four) to CARE D (Single D) for short term facilities.

10. Insurance

All the assets (Movable/Immovable) of your Company are adequately insured. Similarly all the employees and workers of your Company are also covered under Accidental and Mediclaim Insurance as well as under Worskmen Compensation Policy.

11. Particulars of Employees

Particulars of employees pursuant to Section 196 & 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annual Report.

In terms of the provisions of the Section 136(1) of the Companies Act, 2013 the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the corporate office of the Company at Nagpur during working hours and any member interested in obtaining such information may write to the Company Secretary atleast 7(Seven)days prior to the Annual General Meeting and the same will be furnished on request.

12. Meetings

A calendar of meetings is prepared and circulated in advance to the Directors. During the year five Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

13. Extract of Annual Return

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in Form MGT-9 as a part of this Annual Report as "ANNEXURE I"

14. 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 Compliance Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

15. Particulars of contracts or arrangements with related parties

Pursuant to the provisions of Section 134 of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements entered into by the Company with Related Parties entered are disclosed in Form AOC-2 as "ANNEXURE II" attached to this report.

16. Company's Policy on Directors' Appointment and Remuneration

The Board had on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration. The policy is given as "ANNEXURE III" to this Report.

17. Information forming part of the Directors' Report pursuant to Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

The relevant information pursuant to Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given as "ANNEXURE IV" to this report.

18. Details of Subsidiary/Joint Ventures/Associate Companies

As on March 31, 2015 your Company has two(2) Wholly Owned Subsidiaries (WOS) viz. "RPL International Trade FZE" & "RPL (HK) Foods & Feed Corporation Limited" incorporated outside India and three(3) Associate Companies viz. "Rasoya Foods and Drinks Private Limited", "Ivory Exports Private Limited" and "Eiravat Tradelinks Private Limited" pursuant to sub-section (3) of section 129 of the Act, the statement containing the salient feature of the financial statement of a company's subsidiaries is given in Form AOC-1 as "ANNEXURE V" to this Report.

Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Corporate Office of the Company during the working hours. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report includes the financial information of its subsidiary.

19. Declaration by an Independent Director(s)

All the Independent Directors confirmed that they have met the criteria of independence as required under Section 149 of the Companies Act, 2013 and under Clause 49 of the Listing Agreement.

20.Cashflow Statement

The Cash flow statement for the year ended 31 March, 2015 is attached to the Balance Sheet.

21. Statutory Auditors

The Auditors, M/S. V.N. Bhuwania & Co.,Chartered Accountants, Mumbai (ICAI Firm Registration Number: 101482W) retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment for a period of Three Years from the conclusion of this Annual General Meeting [AGM] till the conclusion of the Annual General Meeting to be held in the year 2017 subject to ratification of their appointment at every Annual General Meeting of the Company.

22. Statutory Auditors' Report

The Auditors' Report contains qualifications and the Company has given its comments on Auditors' Qualified Opinion for the Financial Year 2014-15. The details are mentioned here under:

Qualified Opinion (a)

Sales transactions of Soya DOC amounting to Rs. 69.83 Crores as pointed out by the Auditors are the Ex- factory sales made to the new purchasers out of the return goods received from earlier purchaser. The necessary supporting documents related to above sales such as Sales Invoice, Delivery Order, Weighment Slips, Security records and other records to the extent available with us were made available to the Auditors.

Regarding purchases of Rs. 24 Crores of Soayabean Seeds made from unregistered dealers (URD), the necessary supporting documents such as ERP System generated relevant Contract Notes /Purchase Orders, Weighment Slips, Goods Received Notes /DOs have been made available to the auditors. The Sauda Kacchi Chitthi instead of invoices is issued by the URD Traders as per the prevailing trade practices related to Agro based commodity.

Qualified Opinion (b)

As mentioned in para (ii) (c) of the Annexure to audit Report regarding complete trail of supporting documents related to sales and purchases and it's impact on stock records, the clarification has been given in para (a) above.

As mentioned in para (iv) of the Annexure to audit Report regarding inadequate internal control system commensurate with the size of the company and it's nature of business with regards to purchase of inventories, sale of goods and services, inventory management, debtors and creditors management- the clarification has been already given in para (a) above.

Qualified Opinion (c)

Since the company has furnished the Corporate Guarantee to Bank of Baroda on behalf of the seed suppliers and the Liability of Rs. 19.99 Crores for Repayment to Bank of Baroda has been crystalised due to nonpayment of Bills Discounted by the respective Borrowers/seed suppliers on respective due date, towards the Seed supplies made to the Company.

The Bills Discounting Facility is availed by the respective Seed Suppliers in individual capacity from Bank of Baroda and not by the company , hence question of the having the Bank statements for the said facility with the company does not arise.

Therefore, the company is not in a position to furnish any Bank Statement for said crystallized liability under Corporate Guarantee furnished to Bank of Baroda.

Qualified Opinion (d)

Foreign Exchange Gain Rs. 29 Crores has not been recognized in accordance with AS 11, as same pertains to the o/s loan to WOS at Sharjah which is not likely to be repaid by the WOS in near future since the said funds have been earmarked for overseas operations of the company.

23. Disclosure about Cost Audit

As per the Cost Audit Orders, Cost Audit is applicable to the Company for the FY 2014-15. In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company has appointed, on the recommendations of audit committee M/s. SNM & Associates, Cost Accountants, Nagpur, as Cost Auditors to conduct the audit of cost records of your company for the financial year 2015-16.

The Cost Auditors have furnished a Certificate of their eligibility for appointment Under Section 148 of the Companies Act 2013, Certificate for independence and arms length relationship with the Company and are not disqualified for such appointment.

The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM.

Your Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.

24. Cost Auditor's Report

The Company is in receipt of Cost Audit Report pertaining to Financial Year 2013-14 from M/S SNM & Associates, Cost Accountants, pursuant to the Circular No. 15/2011 Dated 11th, April, 2011 issued by Ministry of Corporate Affair (MCA).

There are no observations or qualifications or adverse remarks in the Cost Auditor's Report which needs further comments or clarifications and the notes to accounts are self explanatory

25. 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. R. A. Daga & Co., Practicing Company Secretary, Nagpur to undertake the Secretarial Audit of the Company. The report of the Secretarial Auditors is enclosed as "ANNEXURE VI" to this report.

26. Internal Audit & Controls

The Company continues to engage M/s. S. Chakravarthy & Associates, Chartered Accountants, Nagpur as its Internal Auditor. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditor's findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.

27. Vigil Mechanism/Whistle Blower Policy

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism/Whistle Blower Policy has been established by the Company to provide appropriate avenues to the employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business principles of the Company. The Vigil Mechanism/Whistle Blower Policy has been uploaded on the website of the Company at www.rasoyaproteins.in under investors /Whistle Blower Policy link.

28. Events occurring after the balance date:

There are no significant events occurred after the Balance Sheet date which have adverse material impact on financial statement or otherwise.

29. Risk management Policy and Report:

Your company has taken adequate measures to mitigate the risks associated with the various risks impacting the Company which includes the identification of various elements of risk impacting the company and mitigation of the same.

30. 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

During the year under review, a fire accident has occurred on 27 April, 2015 at the unit situated at Malkapur in which the Soyabean seed stored in one of the Silos was damaged and destroyed. The total estimated loss as per the primary assessment is Rs. 34 Crores. The necessary steps have been taken and a surveyor has been appointed by the insurance company. The assessment and survey proceedings are under process and not yet completed.

31. Details in respect of adequacy of internal financial controls with reference to the Financial Statements

Your Company had laid down set of standards, processes and structures which enables to implement internal financial control across the organization and ensure that the same are adequate and operating effectively.

32. Deposits

The Company has accepted deposits from public during the year within the meaning of the provisions of Sections 58A, 58AA of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules, 1975 to the tune of Rs. 3,30,35,000/-. The total outstanding of such Public deposits as on the Balance Sheet Date including interest stands at Rs.2,54,82,884/-.As per the Companies Act, 2013 all the outstanding deposits had to be repaid as on March 31, 2015. However, the Company Law Board has approved the repayment of the outstanding deposits as per the original tenure.

33. Particulars of loans, guarantees or investments under Section 186

Details of Loans:

Sr. No Date of making loan Details of Borrower Amount Purpose for which the loan is to be utilized by the recipient Time period for which it is given Date of BR Date of SR (if reqd) Rate of Interest Security
Not Applicable

Details of Investments:

SL No Date of investment Details of Investee Amount Purpose for which the proceeds from investment is proposed to be utilized by the recipient Date of BR Date of SR (if reqd) Expected rate of return
1. 29/09/2014 RPL (HK) Foods & Feeds Corporation Ltd. 79,968 Investment in Capital Of RPL (HK) Foods & Feed Corporation Limited (WoS) 20/09/2014 N.A. --

Details of Guarantee / Security Provided:

SL No Date of providing security/guarantee Details of recipient Amount Purpose for which the security/guarant ee is proposed to be utilized by the recipient Date of BR Date of SR (if any) Commission
Not Applicable

34. Corporate Governance Certificate

Your Company is committed to achieve the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set by the Regulators/applicable laws. The Company has been proactive in following the principles and practice of good corporate governance. The Company has taken adequate steps to ensure that the conditions of corporate governance as stipulated in Clause 49 of the Listing Agreement of the Stock Exchange are complied with.

A separate statement on corporate governance is enclosed as a part of the Annual Report along with the Auditor's Certificate on its compliance. A Management Discussion and Analysis Report also attached herewith and the Report on Corporate Governance is given as "ANNEXURE- VII" and form part of this report.

35. Obligation of Company under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee (ICC) to look into complaints relating to sexual harassment at work place of any women employee.

The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and setup the Committee for the implementation of the said policy. The Company is fully committed to uphold and maintain the dignity of every women working in the Company.

During the year under review the Company has not received any complaint of harassment.

36. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Due to non availability of basic raw material the solvent extraction plants were not fully operational and as a result the captive power plant was shut down. Hence Conservation of energy and Technology absorption are not applicable.

(a) Conservation of energy: Not Applicable

(b) Technology absorption: Not Applicable

(c) Foreign exchange earnings and Outgo:

During the year, the total foreign exchange used was Rs. 16.89 Lac and the total foreign exchange earned was Rs. 2575.97 Lac.

37.Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

During the year under review no significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

38. Corporate Social Responsibility (CSR)

In compliance with Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules 2014, the Company has established Corporate Social Responsibility (CSR) Committee and approved the CSR Policy for the same.

Having regard to the Second proviso of Section 135 (5) of the Companies Act, 2013 the valid reason for not spending the amount on CSR Activities is that the Company is facing acute Liquidity Crunch as its main activity of Solvent Extraction could not be carried out due to non availability of the main Raw Material Soyabean Seed and as a consequence the Company's Power Plant has also been shut down during the FY 2014-15. Therefore, the Company is not even in a position to meet its day to day expenses and deposit the various Statutory dues. The various Bank Loan Accounts of the Company have turned into NPA.

In view of the above facts, it was extremely difficult for the Company to spend any amount towards the CSR activities during the FY 2014-15.

39. Human Resources

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis.

40. Directors' Responsibility Statement

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; b () 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 at the end of the financial year and of the profit and loss of the company for that period; (c) the directors had 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 directors had prepared the annual accounts on a going concern basis; and (e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

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Key Information

Key Executives:

A N Lonkar , Chairman & Managing Director

P G Duchakke , Executive Director

S R Khankhoje , Director

A N Deshpande , Director

Company Head Office / Quarters:

Wanjari Village,
Wani Taluka,
Phone : Maharashtra-91-7239-225901/225902/225903/225904 / Maharashtra-
Fax : Maharashtra-91-7239-226190 / Maharashtra-
E-mail : sameer@rasoyaproteins.com/cs@rasoyaproteins.in
Web : http://www.rasoyaproteins.in


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