The Reserve Bank of India (RBI) vide Press Release dated November 29, 2021 in exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934 (RBI Act) superseded the Board of Directors of your Company on November 29, 2021 and thereafter appointed Mr. Nageswara Rao Y, ex-Executive Director of Bank of Maharashtra as the Administrator of your Company under Section 45-IE (2) of the RBI Act. Thereafter, RBI vide its Press Release dated November 30, 2021, in exercise of the powers conferred under Section 45-IE 5(a) of the RBI Act, constituted a three (3) member Advisory Committee consisting of Mr. Sanjeev Nautiyal, ex-DMD, State Bank of India, Mr. Srinivasan Varadarajan, ex-DMD, Axis Bank and Mr. Praveen P Kadle, ex-MD & CEO, Tata Capital Limited to assist the Administrator in discharge of his duties and further to also advise the Administrator in the operations of your Company during the Corporate Insolvency Resolution Process (CIRP). As per the framework of the Advisory Committee as approved by RBI, primary responsibility of the Advisory Committee is to guide the Administrator to undertake all steps that will maximize the value for all stakeholders of your Company through a successful resolution.
On December 2, 2021, the RBI had filed the Petition before the Honble National Company Law Tribunal, Mumbai Bench ("NCLT/ Adjudicating Authority") under sub-Clause (i) of clause (a) of Rule 5 of the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudication Authority) Rules, 2019 (FSP Rules) to initiate Corporate Insolvency Resolution Process ("CIRP") against your Company read with Section 227 of the Insolvency and Bankruptcy Code, 201 6 read with the Rules and Regulations framed there under and amended from time to time (the "Code"). Further, CIRP was initiated against the Company under Section 227 read with clause (zk) of sub section (2) of Section 239 of the Code and read with Rules 5 and 6 of the FSP Rules by an order dated December 6, 2021, of the NCLT.
In accordance with Section 14 of the Code read with the FSP Insolvency Rules, a moratorium has been effective on and from December 6, 2021, i.e. the date of admission of the Company in the CIRP process for prohibiting institution of suits or continuation of pending suits or proceedings against the Company including execution of any judgement, decree or order in any court of law, tribunal, arbitration panel or other authority.
The Administrator has taken steps for seeking confirmations from various forums where litigations have been levied on the Company for disposal of assets, that such injunctions will not be applicable during CIRP. The Adjudicating Authority vide the above order, appointed the Administrator to perform all the functions of a Resolution Professional to complete the CIRP of the Company as required under the provisions of the Code. It is also incumbent upon the Administrator, (exercising same powers as Resolution Professional under the Code), under Section 20 of the Code, to manage the operations of the Company as a going concern.
Financial Performance and State of Companys Affair
The Financial performance of the Company for the financial year ended March 31, 2022 is summarised below:
|(Rs. in lakh)|
|Particulars||March 31, 2022||March 31, 2021*||March 31, 2022||March 31, 2021*|
|Profit/(Loss) Before Tax||(1,10,580)||(10,97,150)||(7,90,780)||(9,11,406)|
|Profit/(Loss) After Tax||(1,10,580)||(10,97,150)||(8,05,474)||(9,28,656)|
|Closing surplus/(deficit) in statement of profit and loss||(19,83,764)||(18,73,184)||(30,84,387)||(22,73,568)|
|Transfer to Statutory reserve fund**||-||-||-||-|
* Previous year figures has been regrouped/reclassified wherever required.
** No amount was transferred to the Statutory Reserve Fund pursuant to Section 45-IC of the Reserve Bank of India Act, 1 934, as the Company has incurred loss during the year.
Corporate Insolvency Resolution Process
The Administrator under Section 1 3 of the Code read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process of Corporate Persons) Regulations, 2016 (CIRP Regulations) had issued a public announcement as prescribed in Form A on December 8, 2021 for bringing to the Notice of the creditors of your Company to submit their claims against your Company as per the relevant forms under the code. The Administrator, on receipt of the claims from the creditors has prepared a list of creditors (including Financial, Operational, Workmen & Employees and Other Creditors) along with their security Interest therein pursuant to Regulation 13(2)(c) of the CIRP Regulations and such list of creditors has been made available to the stakeholders on your Companys website. The claims have been admitted based on the information available in the books of accounts and records available with your Company and the information provided by the respective creditors in this regard. It is pertinent to note that mere admission of claims does not guarantee payment and the claims are subject to revision/modification till such date as they are finalized. The Administrator after preparing the list of claims of the creditors of the Company has constituted of the Committee of Creditors (COC) of your Company under Section 21 of the Code read with Regulation 17 of the CIRP Regulations.
The Committee of Creditors comprised of financial creditors of your Company as per Section 21 of the Code read with Regulation 1 7 of the CIRP Regulations. The Committee of Creditors has met 9 (nine) times since initiation of CIRP till the date of this Report. As part of CIRP of your Company, the Administrator, Advisory Committee and the present management team have taken various initiatives to ensure going concern status of your Company as required under Section 20 of the Code. Further, the Code and CIRP Regulations thereunder stipulate prior approval by the Committee of Creditors for certain actions to be taken during the process, including as provided under Section 28 of the Code. The Administrator and the Advisory Committee as set up by the RBI to assist the Administrator in discharge of his duties, exercise oversight on the operations of your Company apart from conducting the CIRP in accordance with the provisions of the Code and Regulations under IBC, 2016.
The Administrator has appointed Deloitte India Insolvency Professionals LLP and AZB & Partners as Process and Legal advisors, respectively to assist him in completion of the CIRP of your Company.
The Administrator acting as the Resolution Professional under the provisions of the Code has also appointed a Transaction Avoidance Auditor (referred as "TAA") - BDO India LLP to ascertain if your Company has entered into transactions as specified in terms of provisions of the Code specifically under Sections 43, 45, 49, 50 and 66 of the Code.
The Administrator on the advise of the Advisory Committee and in consultation with the process advisors and legal advisors will file necessary applications before the Honble NCLT as and when reports under the above sections are submitted by the TAA.
|29-11-2021||Supersession of Board of Directors and appointment of Administrator|
|02-12-2021||Application by the Reserve Bank of India for initiation of corporate insolvency resolution process against Reliance Capital Limited and commencement of interim moratorium|
|06-12-2021||Order of National Company Law Tribunal for initiation of corporate insolvency resolution process against Reliance Capital Limited|
|08-12-2021||Public Announcement for invitation of claims in corporate insolvency resolution process against Reliance Capital Limited|
|18-02-2022||Invitation for Expression of Interest under Regulation 36A(1) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016|
|11-03-2022||Invitation for Expression of Interest under Regulation 36A(1) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016|
|04-04-2022||Provisional List of Eligible Prospective Resolution Applicants as per Regulation 36A(10) of the CIRP Regulations|
|19-04-2022||Final list of Eligible Prospective Resolution Applicants as per Regulation 36A (12) of the CIRP Regulations|
For the period under review, the Committee of Creditors have met on January 5, 2022, February 2, 2022, February 10, 2022 adjourned to February 15, 2022, March 4, 2022, March 22, 2022, March 30, 2022, April 6, 2022, April 1 3, 2022 and April 27, 2022.
Resources and Liquidity
The Company has not borrowed any funds since August 2019.
Core Investment Company
The Company is a Core Investment Company (CIC) registered with Reserve Bank of India under the Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016.
Owing to the loss incurred by your Company for the financial year under review, no dividend has been declared/recommended on Equity Shares for the financial year ended March 31, 2022.
Management Discussion and Analysis
Management Discussion and Analysis Report for the year under review as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the Listing Regulations) and Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016 is presented in a separate section, forming part of this Annual Report.
The Company has neither accepted nor renewed any fixed deposits during the year. 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, 2022.
Particulars of Loans, Guarantees or Investments
The Company is registered as Core Investment Company with RBI. Thus, the provision of Section 186 except sub-section (1) of the Companies Act 2013 (the Act) is not applicable to the Company.
Subsidiary and Associate companies
During the year under review, there are no companies which have become/ceased to be Subsidiary/Associate company of the Company. The summary of the performance and financial position of each of the subsidiary and associate companies are presented in Form AOC-1 and of major subsidiaries and associates are mentioned in Management Discussion and Analysis Report forming part of this Annual Report. Also, a report on the performance and financial position of each of the subsidiary and associate companies as per the Act is provided in the consolidated financial statement. The Policy for determining material subsidiary companies may be accessed on the Companys website at https:// www.reliancecapital.co.in/pdf/Policy-for- Determination-of-Material-Subsidiary.pdf.
Standalone and Consolidated Financial Statement
The audited financial statement of the Company drawn up, both on standalone and consolidated basis, for the financial year ended March 31, 2022, are in accordance with the requirements of the Companies (Indian Accounting Standards) Rules, 2015, the ("Ind AS Rules") prescribed under Section 133 of the Companies Act, 2013, read with the relevant rules and other accounting principles. The Consolidated Financial Statement have been prepared in accordance with Ind AS and relevant provisions of the Act based on the financial statement received from subsidiary and associate companies, as approved by their respective Board of Directors.
The Reserve Bank of India (RBI) vide Press Release dated November 29, 2021 in exercise of the powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934 (RBI Act) superseded the Board of Directors of your Company on November 29, 2021 and the RBI appointed Mr. Nageswara Rao Y as the Administrator of your Company under Section 45-IE (2) of the RBI Act.
Pursuant to Section 45-IE (4)(b) of the RBI Act, all the powers, functions and duties, which may, by or under the provisions of the RBI Act or any other law for the time being in force, be exercised and discharged by or on behalf of the Board of Directors of such non-banking financial company or by a resolution passed in general meeting of such non-banking financial company, shall, until the Board of Directors of such company is reconstituted, be exercised and discharged by the Administrator referred to in sub-section (2) of Section 45-IE of the RBI Act.
Thereafter, RBI vide its Press Release dated November 30, 2021, in exercise of the powers conferred under Section 45-IE 5(a) of the RBI Act, constituted a 3 (three) member Advisory Committee to assist the Administrator in discharge of his duties and to advise the Administrator in the operations of your Company during the Corporate Insolvency Resolution Process (CIRP). The members of the Advisory Committee are Mr. Sanjeev Nautiyal, ex-DMD, State Bank of India, Mr. Srinivasan Varadarajan, ex-DMD, Axis Bank and Mr. Praveen P Kadle, ex-MD & CEO, Tata Capital Limited.
The Board of Directors of your Company as on November 29, 2021 (i.e. the date of supersession of the erstwhile board of directors) consisted of six Directors, out of which three were Independent Directors, two were Non-Executive Directors and one was an Executive Director.
During pre CIRP, Mr. A. N. Sethuraman (DIN: 01098398), Non-Executive Director, who retired by rotation at the last Annual General Meeting held on September 14, 2021and being eligible, offered himself for re-appointment and was re-appointed.
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 put up on the website of the Company at the link http://www.reliancecapital.co.in/ cg_policies.html.
Key Managerial Personnel
During the year under review, Mr. Dhananjay Tiwari resigned as Chief Executive Officer of the Company w.e.f. March 15, 2022. Further, Mr. Vijesh Thota was appointed as Chief Financial Officer of the Company with effect from July 1, 2021, upon cessation of Mr. Aman Gudral as Chief Financial Officer with effect from June 30, 2021. Thereafter, Mr. Aman Gudral was appointed as Chief Financial Officer of the Company with effect from April 12, 2022, upon cessation of Mr. Vijesh Thota as Chief Financial Officer with effect from April 11, 2022.
Evaluation of Directors, Board and Committees
Reserve Bank of India in exercise of its powers conferred under Section 45-IE (1) of the Reserve Bank of India Act, 1934, vide its notification dated November 29, 2021, superseded the Board of Directors of the Company and all the Directors of the Company vacated their office and Committees constituted by the Board stood dissolved on November 29, 2021. In view of the above, evaluation of performance of Directors, Board or the Committees could not be carried out and no separate meeting of Independent Directors could be held.
Prior to supersession of the Board of Directors of your Company by the RBI on November 29, 2021.
a. Your Company had a combination of Executive and Non-Executive Directors as well as Independent Directors including a Woman Independent Director on its Board of Directors.
b. The erstwhile Nomination and Remuneration Committee (NRC) of the Company had devised a policy for performance evaluation of the individual Directors, Board and its Committees, which includes performance evaluation criteria such as Board/Committee composition and structure, effectiveness of the Board/Committee and information provided to the Board/Committee, etc.
Policy on appointment and remuneration for Directors, Key Managerial Personnel and Senior Management Employees
The Company has devised a policy for selection, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management Employees and has also formulated the criteria for determining qualifications, positive attributes and independence of Directors. The Policy has been put up on the Companys website at https://www.reliancecapital.co.in/Policies.aspx.
Directors Responsibility Statement
The financial statements of your Company for the financial year ended March 31, 2022 have been taken on record by the Administrator while discharging the powers of the erstwhile Board of Directors of your Company which were conferred upon him by the RBI vide its press release dated November 29, 2021 and subsequently, powers conferred upon him in accordance with the NCLT Order dated December 6, 2021 to run your Company as a going concern during CIRP Hence the financial statements for the year ended March 31, 2022, have been prepared on "going concern" assumptions.
The Administrator has taken charge with effect from November 29, 2021, and has relied on information, data, and clarification provided by Key Management Personnel (KMPs) of the Company for the purpose of the financial results.
The Administrator has signed the financial statements solely for the purpose of compliance and discharging the powers of the Board of Directors during the CIRP period of your Company and in accordance with the provisions of the Companies Act, 2013, IBC, read with the relevant regulations and rules thereunder and subject to the following:
(i) The Administrator has taken charge with effect from November 29, 2021 and therefore was not in control of the operations or the management of the Company for majority of the period to which the underlying report pertains to;
(ii) The Administrator has furnished and signed the report in good faith and accordingly, no suit, prosecution or other legal proceeding shall lie against the Administrator in terms of Section 233 of the Code;
(iii) The Administrator, while signing this statement of financial statements for the year ended March 31, 2022, has relied solely upon the assistance provided by the existing staff and present key management personnel (KMPs) of the Company in review of the financial statements as well as the certifications, representations and statements made by the KMPs of the Company, in relation to these financial results.
The statement of financial results of the Company for the year ended March 31, 2022 have been taken on record by the Administrator solely on the basis of and on relying on the aforesaid certifications, representations and statements of the aforesaid existing staff and present key management personnel (KMPs).
For all such information and data, the Administrator has assumed, without any further assessment, that such information and data are in conformity with the Companies Act, 2013 and other applicable laws with respect to the preparation of the financial results and that they give a true and fair view of the position of the Company as of the dates and period indicated therein.
Further, in order to comply with the provisions of Section 134(5) of the Companies Act, 2013, the Administrator further confirms that:
i. In the preparation of the annual financial statement for the financial year ended March 31, 2022, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
ii. The Administrator 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, 2022 and of the loss of the Company for the year ended on that date;
iii. The Administrator 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;
iv. The Administrator had laid down proper internal financial controls to be followed by the Company and such financial controls are adequate and are operating effectively; and
v. The Administrator 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 for the financial year ended March 31, 2022, 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 potential conflict of interest with the Company at large.
During the year, the Company has not entered into 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 or which is required to be reported in Form AOC - 2 in terms of section 134 (3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.
All Related Party Transactions were placed before the Audit Committee and also the Board 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 and the Board of Directors on quarterly basis.
The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website at the link http://www. reliancecapital.co.in/pdf/Policy_for_Related_Party_Transaction.pdf.
Your attention is drawn to Note No. 35 to the Standalone Financial Statement which sets out related party disclosures pursuant to Ind-AS and Schedule V of Listing Regulations.
As part of the CIRP your Company is required to undertake Related Party Transactions only after the approval of the Committee of Creditors as per the provisions of Section 28 of the Code. Accordingly, your Company has identified related parties as per Section 5(24) of the Code and appropriate approvals were sought from the CoC for such transactions.
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
During the year 2021-22, prior to supersession of Board of Directors by RBI, 7 (seven) Board Meetings were held. Details of meetings held and attended by each Director are given in the Corporate Governance Report. Further, as on the date of this Report, 15 (fifteen) Advisory Committee Meetings were held.
Audit Committee and other board committees
Prior to the supersession of the Board of Directors by the RBI, your Company had a duly constituted Audit Committee as per the provisions of Section 177 of the Companies Act, 2013 and provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016. The erstwhile Board of Directors had also constituted other committees which included Nomination and Remuneration Committee, Stakeholders Relationship Committee, Group Risk Management Committee, Corporate Social Responsibility (CSR) Committee, ALCO Committee and IT Strategy Committee.
The details of the composition of the erstwhile Committees of the Board including their respective constitution, role as existing till November 29, 2021 are included in the Report on Corporate Governance forming part of this Annual Report. With the Corporate Insolvency Resolution Process (CIRP), the Advisory Committee performs the functions of various sub committees.
Auditors and Auditors Report
At the 35th Annual General Meeting (AGM) of the Company held on September 14, 2021, the members of the Company had appointed M/s. Gokhale & Sathe, Chartered Accountants to hold office as Statutory Auditors for a period of three consecutive years till the conclusion of the 38th Annual General Meeting.
As per the requirements of Guidelines dated April 27, 2021, issued by the Reserve Bank of India (RBI) for Appointment of Statutory Central Auditors (SCAs)/Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs), the Company has received a declaration from M/s. Gokhale & Sathe, Chartered Accountants, confirming their eligibility to continue to act as Statutory Auditors of the Company.
The Auditors in their Report to the Members, have given the following qualified opinion and the response of the Administrator with respect to them are as follows:-
1. Opinion on amount of the claims including claims on account of guarantees invoked, admitted or to be admitted by the Administrator under CIRP process may differ from the amount reflecting in the books of account of the Company. Pending final outcome of the CIRP no adjustments have been made in the books for the differential amounts, if any, in the claims admitted as on the date of the financial results.
2. Opinion on Interest Expenses - In view of the ongoing CIRP the Company has provided for interest expense which may be applicable on the financial debt only upto December 6, 2021. Had such interest been recognised from December 7, 2021 to March 31, 2022, the loss before tax for the quarter and year ended March 31, 2022 would have been higher by Rs.49,090 lakh.
3. Opinion on Material Uncertainty related to Going Concern, Financials Statements - The Company has been admitted under the CIRP process effective December 6, 2021 and as stipulated under Section 20 of the IBC, it is incumbent upon the Administrator to manage the operations of the Company as a going concern. Accordingly, the Standalone financial Statement for the year ended March 31, 2022, have been prepared on going concern basis. However, the Company has defaulted in repayment of the obligations to the lenders and debenture holders which is outstanding, has incurred losses during the period as well as during the previous periods, has reported negative net worth as at March 31, 2022 and previous periods and as described in Note No. 15 of the Standalone Financial Statement, the asset cover for Listed Secured Non-Convertible Debentures of the Company has fallen below one hundred percent, which indicates that material uncertainty exists, that may cast significant doubt on the Companys ability to continue as a Going Concern. Auditors conclusion on the Statement is not modified in respect of the above matter.
Response to Qualifications
Your Company is under CIRP and all the claims and repayment obligations to the lenders and debenture holders shall be dealt as per CIRP No fraud has been reported by the Auditors to the Audit Committee or the Board/Administrator.
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 Company had appointed M/s. Aashish K. Bhatt & Associates, Practicing Company Secretaries, to undertake the Secretarial Audit of the Company. The Audit Report of the Secretarial Auditors of the Company and its material subsidiary for the financial year ended March 31, 2022 are attached hereto as Annexures A1 and A2. Pursuant to Regulation 24A of the Listing Regulations, the Company has obtained Annual Secretarial Compliance Report from a Practicing Company Secretary on compliance of all applicable SEBI Regulations and circulars/guidelines issued there under and the same were submitted with the Stock Exchanges. The observations and comments given by the Secretarial Auditor in their Report are self-explanatory and hence do not call for any further comments under Section 134 of the Act.
During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
Maintenance of Cost Records
The Central Government has not specified maintenance of cost records, for any of the products of the Company, under Section 148(1) of the Act.
As required under Section 134(3)(a) of the Act, the Annual Return for the financial year 2021 -22, is put up on the Companys website and can be accessed at https://www.reliancecapital. co.in/ Annual-Reports.aspx.
Particulars of Employees and related disclosures
(a) Employees Stock Option Scheme(s)
Employees Stock Option Scheme(s) (ESOS 2015 and ESOS 2017) were approved and implemented by the Company and Options were granted to the employees in accordance with guidelines applicable to ESOS. The existing ESOS Scheme and Plans are in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI Regulations). The Company has received a certificate from the Secretarial Auditors of the Company that the ESOS 2015 and ESOS 201 7 have been implemented in accordance with the SEBI Regulations and as per the resolution passed by the members of the Company authorising issuance of the said Options. The details as required to be disclosed under SEBI Regulations are put on the Companys website at http://www.reliancecapital.co.in/ESOS-Disclosure.aspx.
(b) Other Particulars
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 Annual Report, 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 provided in the Annual Report, which forms part of this Report. However, having regard to the provisions of second 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 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 Company is a Non-Banking Financial Company and does not involve in any manufacturing activity, most of the information as required under Section 1 34(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are not applicable. However, the information as applicable has been given in Annexure - B forming part of this Report.
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations and Master Direction - Core Investment Companies (Reserve Bank) Directions, 2016, as amended is presented in separate section forming part of this Annual Report. A Certificate from M/s. Aashish K. Bhatt & Associates, Practicing Company Secretaries confirming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations is enclosed to this Report.
Ombudspersons & Whistle Blower (Vigil Mechanism)
The Company has formulated an Ombudspersons & Whistle Blower (Vigil Mechanism) policy. No person has been denied for direct access to the Chairperson of the Audit Committee. The details of the same have been stated in the Report on Corporate Governance and the policy can be accessed on the Companys website. Further, every individual can access to Administrator at his personal e-mail id that has been provided vide public announcement.
During the CIRP, the Administrator intends to implement the relevant guidelines in true spirit.
The Company has laid down a Risk Management Policy to identify the inherent risks, assess, evaluate and monitor these risks continuously and undertake effective steps to manage these risks. During the pre CIRP period, the update on the risk management practices and mitigation plan of the Company and subsidiaries were presented to the Audit Committee and Board of Directors. 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 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 woman 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, no such complaints were received. The Company has also constituted an Internal Complaints Committee under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013.
Corporate Social Responsibility
Pursuant to the RBI superseding the Board of Directors of the Company on November 29, 2021, all Committees of the Company stand dissolved. Accordingly, the Administrator alongwith the Advisory Committee overlook the responsibility of the CSR Committee.
Your Company has in place a Corporate Social Responsibility Policy (CSR Policy), as per the provisions of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, which lays down indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Companys website at the link; http://www.reliancecapital. co.in/pdf/Group_CSR_ Policy_Document.pdf. The disclosures with respect to CSR activities are given in Annexure - C.
Significant and material Orders passed by the Regulators or Courts or Tribunal
Reserve Bank of India ("RBI"), in exercise of its powers under Section 45-IE (1) of the Reserve Bank of India Act, 1934 ("RBI Act") superseded the Board of Directors of Reliance Capital Limited ("Company") on November 29, 2021. Accordingly, the RBI appointed Mr. Nageswara Rao Y as the administrator of the Company under Section 45-IE(2) of the RBI Act.
The Company is under CIRP in accordance with IBC code, 2016 read with IBC (Financial service Provider) Rules, 2019 and Mumbai bench of NCLT has passed order dated December 06, 2021 according to which the Company is under moratorium under Section 14 of the Code pursuant to which the following actions are prohibited;
(a) institute suits or continue pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority;
(b) transfer, encumber, alienate or dispose of any of its assets or any legal right or beneficial interest therein;
(c) any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002;
(d) recover of any property by an owner or lessor where such property is occupied by or in the possession of the corporate debtor.
As disclosed previously, the Company was prohibited from making any payment to secured or unsecured creditors and to dispose of, alienate, encumber either directly or indirectly or otherwise part with the possession, of any assets except in the ordinary course of business such as payment of salary and statutory dues, vide.
(a) orders dated December 3, 2019 and December 5, 2019 passed by the Honble Debts Recovery Tribunal;
(b) orders dated November 20, 2019 and March 15, 2021 passed by the Honble Delhi High Court; and, Orders dated November 28, 2019, November 4, 2020, and March 5, 2021 passed by the Honble Bombay High Court.
The Administrator has taken steps for seeking confirmations from various forums where litigations have been levied on the Company for disposal of assets, that such injunctions will not be applicable during CIRP.
Internal Financial Control Systems and their adequacy
The Company has in place adequate internal financial control systems across the organisation. The same is subject to periodical review by the Administrator & Advisory Committee for its effectiveness. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.
During the year under review there were no reportable events in relation to issue of equity shares with differential rights as to dividend, voting or otherwise, issue of sweat equity shares to the Companys Directors or Employees and one-time settlement with any Bank or Financial Institution.
Your Company would like to express their sincere appreciation for the co-operation and assistance received from Advisory Committee, shareholders, debenture holders, debenture trustee, bankers, financial institutions, regulatory bodies and other business constituents during the year under review.
Your Company also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff.
|For and on behalf of|
|Reliance Capital Limited|
|Mumbai||Nageswara Rao Y|
|May 10, 2022||Administrator of Reliance Capital Limited|
Gold/NCD/NBFC/Insurance and NPS
Gold/NCD/NBFC/Insurance and NPS