To
The Members
Rolta India Limited (under Corporate Insolvency Resolution Process)
CIN: L74999MH1989PLC052384
Address: Office: Rolta Tower-A, Rolta Technology Park, 22nd Street
Midc- Marol, Andheri (East)- 400093, Mumbai
Your Company, presents to the Members the 34th Annual Report
of the Company together with the Audited Financial Statements (Standalone and
Consolidated) and the Auditor's Report for the Financial Year ended 31st
March, 2024, which includes the Report to the Shareholders.
At the outset, we would like to bring the kind attention of the members
towards the significant development of Rolta India Limited. As informed previously, i.e.,
the Union Bank of India, in its capacity as the financial creditor of Rolta India Limited,
had filed an application bearing C.P. (IB) 530/MB/C-I/2020 under Section 7 of the
Insolvency and Bankruptcy Code, 2016.
That the Hon'ble National Company Law Tribunal, Mumbai Bench vide
its Order dated 19th January, 2023, had admitted the said application and had
ordered the initiation of Corporate Insolvency Resolution Process against the Company and
had appointed Dr. CS Adv. Mamta Binani having registration number
IBBI/IPA-002/IP-N00086/2017-2018/10227 as the Interim Resolution Professional for
conducting the CORPORATE INSOLVENCY RESOLUTION PROCESS as envisaged under the provisions
of the Code. The Interim Resolution Professional was subsequently appointed as the
Resolution Professional.
As per the provisions of Section 17 of the Code, the management of the
affairs of the Company was vested in the Resolution Professional and the powers of the
Board of Directors of the Company was suspended and exercised by the Resolution
Professional. Thereafter, the Resolution Professional has periodically taken necessary
steps to comply with the provisions of the Insolvency and Bankruptcy Code and other
applicable laws and/or enactments.
Further, after initiation of Corporate Insolvency Resolution Process of
the Company, the Resolution Professional in a prompt manner constituted a Committee of
Creditors which has held frequent meetings to optimally guide the Resolution Professional
and diligently participate in the Corporate Insolvency Process of the Company. That the
Resolution Professional, in pursuance with the Insolvency and Bankruptcy Code, published
an advertisement and thereafter another revised version of the said advertisement in
newspaper inviting expression of interest from eligible Resolution Applicants willing to
submit the Resolution Plan.
As the period of 180 days of the Corporate Insolvency Resolution
Process was due to expire on 19.07.2023, the Resolution Professional with due approval of
the Committee of Creditors had filed an application seeking an extension of a period of 90
days to complete the process of the Corporate Insolvency Resolution Process vide I.A. No.
2798/2023. The Hon'ble NCLT was pleased to grant said extension of 90 days vide Order
dated 06.07.2023 passed in I.A. No. 2798 of 2023.
Afterwards, due to various impediments and challenges faced in the
Corporate Insolvency Resolution Process of the Company, the Resolution Professional, under
due approval of the Committee of Creditors, sought various extensions in the Corporate
Insolvency Resolution Process period and the Hon'ble NCLT, Mumbai Bench was pleased
to grant the necessary extension(s). Thereafter, the Resolution Plan approved by the
Committee of Creditors with the requisite majority and consequently, post acceptance of
Letter of Intent and submission of Performance Guarantee by the Successful Resolution
Applicant, the Resolution Professional filed the aforementioned Resolution Plan for its
approval before the Hon'ble NCLT, Mumbai Bench, vide application bearing I.A. no.
(Plan) 65 of 2024. That presently the application for approval of Resolution Plan is under
consideration for approval before the Hon'ble NCLT, Mumbai Bench.
This report is in compliance of applicable provisions of Companies Act,
2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. This
report is being presented hereby under the instructions and authority of the Resolution
Professional.
Performance of the Company, on Consolidated & Standalone basis, for
the FY ended March 31, 2024 is as summarized below:
| Particulars |
Consolidated |
|
Financial Year Ended March 31, 2024 |
Financial Year Ended March 31, 2023 |
| Revenue |
|
|
| Sales of IT Solutions and Services |
- |
17.48 |
| Other Income |
18.65 |
0.10 |
| Total Revenue |
18.65 |
17.58 |
| Expenses |
|
|
| Cost of Materials & Technical Sub- Contractors |
- |
11.10 |
| Employee Benefit Expenses |
1.62 |
12.53 |
| Finance Costs |
1.01 |
694.97 |
| Depreciation and Amortization Expenses |
32.83 |
43.24 |
| Others Expenses |
7.71 |
65.59 |
| Total Expenses |
43.17 |
827.43 |
| Profit/(Loss) before Exceptional items tax |
(24.52) |
(809.85) |
| Exceptional items |
- |
(81.29) |
| Profit/(Loss) before Tax |
(24.52) |
(891.14) |
| Deferred Tax |
994.28 |
- |
| Tax of Earlier year |
- |
- |
| Current Tax |
- |
- |
| Profit/(Loss) for the year |
(1018.80) |
(891.14) |
| Particulars |
Standalone |
|
Financial Year Ended March 31, 2024 |
Financial Year Ended March 31, 2023 |
| Revenue |
|
|
| Sales of IT Solutions and Services |
- |
2.28 |
| Other Income |
18.65 |
0.01 |
| Total Revenue |
18.65 |
2.29 |
| Expenses |
|
|
| Cost of Materials & Technical Sub- Contractors |
-- |
0.35 |
| Employee Benefit Expenses |
1.62 |
5.99 |
| Finance Costs |
1.01 |
694.97 |
| Depreciation and Amortization Expenses |
32.83 |
40.39 |
| Others Expenses |
7.86 |
26.16 |
| Total Expenses |
43.32 |
767.86 |
| Profit/(Loss) before Exceptional items tax |
(24.67) |
(765.55) |
| Exceptional items |
- |
(316.83) |
| Profit/(Loss) before Tax |
(24.67) |
(1,082.38) |
| Deferred Tax |
994.28 |
- |
| Tax of Earlier year |
- |
- |
| Current Tax |
- |
- |
| Profit/(Loss) for the year |
(1,018.95) |
(1,082.38) |
As stated in the preceding paragraphs vis-a-vis the status of
Resolution Plan is under consideration before the Hon'ble National Company Law
Tribunal, Mumbai Bench for the approval, the Company has been putting in its best efforts
to ensure that the limited operations of the Company are continued in the best interest of
the Company. The Company is primarily focusing on realizing its unbilled revenues and
debtor collection to keep operation a float.
During the financial year 2023-24, the Company's consolidated
revenue is nil as against Rs. 17.48 Cr. in previous year, registering a decrease of 100%
in year-on-year basis. Consolidated loss after tax for the financial year ended 31st
March, 2024 is Rs. 1018.80 Cr. as against Rs. 891.94 Cr. in the previous financial year
ended 31st March, 2023
The Company is having website i.e., www.roltaindia.com and
therefore, the copy of the Annual return under Sub-section (3) of Section 92 of the
Companies Act, 2013 (hereinafter referred as the "Act"), has been placed on the
website. Link of the same is given below: www.roltaindia.com
In view of losses incurred by the Company during the financial year, no
amount has been transferred to the General Reserve.
In view of the Corporate Insolvency Resolution Process and considering
the losses incurred during the period under review, no dividend on the equity shares for
financial year ended 31st March 2024 is proposed.
The Company did not have any funds lying unpaid or unclaimed for a
period of seven years. Therefore, there were no funds which were required to be
transferred to Investor Education and Protection Fund.
There is no change in the nature of business as compared to immediately
preceding years.
The Authorised Share Capital of the Company as on 31st
March, 2024 was Rs. 2,50,00,00,000 divided into 2,500,000,00 equity shares of Rs. 10/-
each.
The Paid-up equity share capital of the Company as on 31st
March, 2024 was Rs. 1,65,89,13,550/- divided into 16,58,91,355 equity shares of Rs.10/-
each.
There was no change in the Share Capital of the Company during the year
under review.
•Disclosure regarding issues of equity shares with differential
rights:
The Company has not issued any equity shares with differential rights
during the year under review.
•Disclosure regarding issues of Employee Stock Options:
In accordance with Employees Stock Option Plan of the Company, no
options were outstanding at the beginning of the year. No options were granted or
exercised during the financial year. Details of the Employees Stock Options is disclosed
in the financial statements of the Company.
•Disclosure regarding the issues of Sweat Equity Shares:
The Company has not issued any Sweat Equity Shares during the year
under review.
It may be noted that, an application for Initiation of Corporate
Insolvency Resolution Process was admitted on 19th January, 2023 therefore no
meeting of Board of Directors was required to be held after initiation of Corporate
Insolvency Resolution Process. As in terms of Section 17(1)(b) of the Insolvency and
Bankruptcy Code the powers of the Board of Directors, shall stand suspended and is being
exercised by the Interim Resolution Professional/Resolution professional as the case may
be.
Therefore, during the year under review no Board Meetings were held.
As required in terms of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Management Discussion and Analysis is annexed to this
Report and provides details on overall industry Structure and Developments during the
financial year under review.
The Company is under Corporate Insolvency Resolution Process since 19th
January, 2023. Therefor no meetings of the Board of Directors were held during the year
under review. Therefore, the Secretarial Standards i.e. SS-1 relating to the meetings of
the Board of Directors are not applicable and SS-2 i.e. relating to General Meetings have
been followed by the Company to the extent possible.
In pursuance to the provisions of section 177(9) & 10 of the
Companies Act, 2013, the Company has established a Vigil Mechanism named Whistle Blower
Policy to provide a formal mechanism to the directors and employees to report the genuine
concerns about unethical behavior, actual or suspected fraud or violation of the
Company's Code of Conduct, if any.
No personnel has been denied access to the concerned person pertaining
to reporting his/her Concern(s) as per Vigil mechanism. The details of the Whistle Blower
Policy are explained in the Corporate Governance Report and also posted on the website of
the Company.
The Company hereby affirms that no complaints were received during the
year.
The Company has put in place a mechanism to identify, assess, monitor
and mitigate various risks associated with the business. Risks are analyzed and corrective
actions are taken for managing/mitigating them. In line with the regulatory requirements,
the Company has in place the Risk Management Policy to identify and assess the key risk
areas, monitor and report compliance and effectiveness of the policies and procedures.
As the Company is under Corporate Insolvency Resolution Process since
19th January, 2023, the powers of the Board of Directors remained suspended.
The affairs of the Company were being conducted by the Resolution Professional during the
financial year under review. Consequently, no meetings of the Directors were held during
the financial year 2023-24 for such evaluation.
Prior to Corporate Insolvency Resolution Process, as and when required
the Company used to conduct programmes for familiarization of Independent Directors with
the Company and details of such programmes were updated on its website i.e.
http://www.rolta.com. Further, roles, rights, responsibilities of Independent Directors in
the Company, nature of the industry in which the Company operates, business model of the
Company and other related matters are available on the Company's website. However, in
view of Corporate Insolvency Resolution Process during the period under review, it was not
required to conduct programmes for familiarization of Independent Directors.
The Company has in place the policies that were duly approved by the
erstwhile Board on the recommendations of the Nomination and Remuneration Committee prior
to the commencement of Corporate Insolvency Resolution Process. The Company's remuneration
policy is driven by the success and performance of the individual employee and the
Company.
The key objective of this policy is:
a) formulation of the criteria for determining qualifications,
positive attributes and independence of a director and recommend to the board of directors
a policy relating to, the remuneration of the directors, key managerial personnel and
other employees;
b) formulation of criteria for evaluation of performance of
independent directors and the board of directors;
c) devising a policy on diversity of board of directors;
d) identifying persons who are qualified to become directors and
who may be appointed in senior management in accordance with the criteria laid down and
recommend to the board of directors their appointment and removal.
e) whether to extend or continue the term of appointment of the
independent director, on the basis of the report of performance evaluation of independent
directors.
f) whether to extend or continue the term of appointment of the
Managing Director and Executive Director, on the basis of the report of performance
evaluation of Managing Director and Executive Director.
g) recommend to the Board on remuneration payable to the Directors,
Key Managerial Personnel and Top Management. The authority to identify right candidates
for the appointment of Top Management is vested with the Chairman & Managing Director
who recommends the list of the same to the NRC. The Human Resource Department will
facilitate in identifying the candidates internally or externally. NRC will consider the
list of various candidates proposed by the Chairman & Managing Director and recommend
to the Board for its consideration and appointment in accordance with the applicable
provisions of the Act and Rules.
The powers of Board of Directors and its Committees remained suspended
during the year under review and were being exercised by the Resolution Professional in
accordance with Sections 17 and 23 of the Insolvency Code. Accordingly, no meetings of the
Committees were held during the financial year 2023-24. Further details are given in the
Corporate Governance Report annexed in " Annexure - A"
In accordance with Employees Stock Option Plan of the Company, no
options were outstanding at the beginning of the year. No options were granted or
exercised during the financial year. Details of the Employees Stock Options is disclosed
in the financial statements of the Company.
Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors
of the Company to the best of their knowledge and ability confirm that:
a) in the preparation of the annual accounts, the applicable
accounting standards had been followed and there were no material departures;
b) they 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 and of the profit and loss of the Company for that period.
c) they 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) they have prepared the annual accounts on a going concern basis;
e) they have laid down internal financial controls to be followed
by the Company and that such internal financial controls are adequate and were operating
effectively; and
f) they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
I. Statutory Auditors
M/s. Shah & Mantri, Chartered Accountants (ICAI Firm Registration
No. 137146W) having its office at 16, Ground Floor, Evershine Mall near Mindspace Link
Road, Malad West, Mumbai- 400064 was appointed as the Statutory Auditor in the Annual
General Meeting held in Dec, 2022 for the financial year 2022-2023. Corporate Insolvency
Resolution Process was initiated against the Company by the Hon'ble National Company
Law Tribunal, Mumbai Bench, vide its order dated 19th January 2023. Therefore,
agenda for the re- appointment of the statutory auditor for the financial year 2023-24 is
required to be approved by the Committee of Creditors pursuant to the provisions of
Section 28(1)(m) and other applicable provisions of Insolvency and Bankruptcy Code, 2016.
Annual Report 2023-202
In light of the above, the esteemed Committee of Creditors gave its
approval under Section 28(1)(m) of the Code for the re-appointment of M/s Shah &
Mantri, Chartered Accountants, having its office at 16, Ground Floor, Evershine Mall near
Mindspace Link Road, Malad West, Mumbai- 400064, bearing firm registration no. 137146W for
the term of 2 years that is for the financial year 2023- 2024 & 2024-2025,
respectively subject to the approval of the shareholders as per the provisions of the
Companies Act, 2013 as the Statutory Auditor of the Company.
For the financial year 2023-2024, Shareholders approval for the
re-appointment of M/s Shah & Mantri was obtained through postal ballot dated
05.10.2024.
In the ensuing 34th Annual General Meeting of the Company,
the members are requested to consider the re-appointment of existing auditor, namely M/S.
Shah & Mantri,
Chartered Accountants (ICAI Firm Registration No. 137146W) as the
Statutory Auditor of the Company for period of 1 year for the financial year 2024-25.
The Notes on financial statements referred to in the Auditors'
Report are selfexplanatory and do not call for any further comments.
The Auditors have made following remarks/observation in their
Standalone Financial Statements Report and the reply by the suspended Directors are as
follows:
| Observation |
Reply |
| a) As per Indian Accounting Standard 36 on "Impairment
of Assets", the Company is required to determine impairment in respect of carrying
value of Property, Plant & Equipment (PPE). No Impairment of PPE has been carried out
by the Management of the Company and therefore, we are unable to obtain sufficient
appropriate audit evidence about the recoverable amount of the Company's PPE.
Consequently, we are unable to determine whether any adjustments to carrying value are
necessary and consequential impacts on the standalone financial statements as on March 31,
2024. |
Presently, the Company is under Corporate Insolvency
Resolution Process and no such impairments at this stage is appropriate. |
| b) In accordance with the Ind AS 109 "Financial
Instruments", the Company is required to recognize corporate guarantees issued at its
fair value and then subsequent measurement thereof based on lower of amount of loss
allowance and initially recognised fair value less amortisation. The Company had issued
corporate guarantees in earlier years in favour of holders of Senior Notes
("Bonds") issued by Rolta LLC and Rolta |
The remark made is selfexplanatory in nature. |
| America LLC, wholly owned subsidiaries of Rolta International
Inc., USA, a wholly owned subsidiary of the Company (collectively referred as "US
subsidiaries"). As stated in note no. 45 to the standalone financial statements, the
said corporate guarantees were invoked by the bond holders and accordingly, obligations
arising thereon need to be accounted for in accordance with the Ind AS 109. Also, the
claims made by the bond holders have been accepted during the CIRP process amounting to
Rs. 6,268.80 crores. Due to impracticability of retrospective restatement for impact of
invocation of the aforesaid guarantee, comparative financial statements for the year ended
31st March, 2023 have not been restated and the same has been disclosed as
contingent liability. |
|
| As explained by the Management, as the company had been
admitted under CIRP process, it had not recognised the corporate guarantee including the
possible obligation arising thereon. In view of the uncertainty associated with the
outcome of CIRP Proceedings, the resultant obligation in respect of the corporate
guarantee cannot be measured with sufficient reliability and consequently, we are unable
to comment on the possible financial impact thereof on the loss for the year liabilities
and other equity as on 31st March 2024. |
|
| c) As stated in note no. 47 of the standalone financial
statements, in earlier years, certain foreign currency payable and receivables between the
Company and Rolta International Inc., Rolta UK Limited and Rolta Middle East FZ LLC
(collectively referred to as "subsidiaries"), arising mainly on account of
invocation of Standby letter of credit (SBLC) issued by the banks on guarantee given by
the Company and long-term export advances received from these subsidiaries, had been
adjusted without approval of Reserve Bank of India. The Company has made necessary
application stating the above facts to Reserve Bank of India (RBI) to seek their
permission for adjusting the receivables and payables amounts, |
The remark made is selfexplanatory in nature. |
| for which approval from the RBI is still awaited. As the
matter is pending for approval, we are unable to comment on the possible financial impact
thereof on loss for the year, assets and liabilities and other equity as on 31st
March, 2024. |
|
| d) Company's investment in certain subsidiaries (refer
note 4 of the standalone financial statements) aggregating to Rs. 29.86 Crores are carried
at cost, since in the opinion of the management the said investment are fully recoverable.
However, these subsidiaries are making continued losses, no major operations,
unavailability sufficient evidence, including sufficient evidence, including CIRP process
(refer note 43 and 44 of the Standalone financial statements), we are unable to comment
upon the adjustments, if any, required to the carrying value of the aforesaid investments
and consequential impact, if any on the loss for the year, assets and other equity as on
31st March 2024. |
The management is hopeful for positive outcome to the tune of
investment made. Accordingly, provision(s) where is required has been made in the Books of
the Company. |
| e) We draw attention to note no. 25 and 40 to the standalone
financial statement, regarding nonrecognition of interest on borrowing from banks and
financial institutions, inter corporate loans post initiation of CIRP with effect from
January 19, 2023 on the account of moratorium available under Insolvency and Bankruptcy
Code, 2016 ("the Code"). The same is not in compliance with requirements of Ind
AS - 23 on "Borrowing Cost" read with Ind AS - 109 on "Financial
Instruments". |
Due to the ongoing Corporate Insolvency Resolution Process,
The Hon'ble NCLT has granted Moratorium under Section 14 of the Code. Therefore, no
such interest can be recognized in the books of the Company after Corporate Insolvency
Resolution Process Commencement date i.e., 19th January, 2023. |
| f) In accordance with the Insolvency and Bankruptcy Code, the
Resolution Professional ("RP") has to receive, collate and admit the claims
submitted by the creditors as a part of CIRP process. Such claims can be submitted to the
RP till the approval of the resolution plan by the Committee of Creditors. Pending final
outcome of CIRP process, no accounting impact in the books of accounts has been made in
respect of excess, short, or non-receipts of claims for operational creditors, financial
creditors, employees and government dues. Also, the Company's is pursuing various tax
matters arising on account of |
The remark made is selfexplanatory in nature. |
| assessment notices, inquiry notices, demand/penalty notices
issued by various statutory tax / regulatory authorities. In view of admission of the
Company under CIRP process and these matters are now subject to CIRP process, we are
unable to comment as to whether the aforesaid matters will have any financial impact
including recognition of those liabilities in the standalone financial statement, and
consequent impact on loss for the year, liabilities and other equity as on 31st
March, 2024 (Refer note no. 39 to the standalone financial statements). |
|
Further the reply by the suspended Directors for the observation/remark
made in the Consolidated Financial Statements Report are as follows:
| Observation |
Reply |
| a) As per Indian Accounting Standard 36 on "Impairment
of Assets", the Holding Company is required to assess for any indication that the
assets have been impaired and carry out the impairment test in respect of carrying value
of Property, Plant & Equipment (PPE). No Impairment assessment and testing of PPE has
been carried out by the Management of the Holding Company and therefore, we are unable to
obtain sufficient appropriate audit evidence about the recoverable amount of the Holding
Company's PPE. Consequently, we are unable to determine whether any adjustments to
carrying value are necessary and consequential impacts on loss for the year, PPE and other
equity of the consolidated financial statements as on 31st March, 2024. |
Presently, the Company is under CIRP and no such impairments
at this stage is appropriate. |
| b) Attention is drawn to note no. 42 regarding the legal case
filed by the certain Holders of Senior Notes against the Holding Company, Rolta
International Inc., USA and its subsidiaries ("US Subsidiary") and Rolta UK
Limited, Rolta Middle East FZ LLC, Rolta Global BV (Collectively referred to as
"Rolta Group Companies") at Hon'ble Supreme Court of the State of New York. |
The remark made is selfexplanatory in nature. |
| i. (a) Hon'ble Supreme court of the State of New York
vide its orders dated 02nd September, 2020 admitted the claim of the certain Holders for
an amount of USD 183 Million plus interest of 9% up to the date of payment against the
Holding Company and its US Subsidiary; and |
|
| (b) further vide its order dated 20th October, 2020, directed
Holding Company and its subsidiaries to turnover their cash on hand and respective
investment in stock/membership interest possesses / owned or controlled by them in the
Rolta Group companies ("turnover order'). Holding Company has filed a suit with
Hon'ble Bombay High Court for grant of interim injunction against the aforesaid
orders and the suit is pending before the Hon'ble Bombay High Court. |
|
| ii. In a separate order passed by the Hon'ble Supreme
Court of the State of New York dated 16th April, 2021 and dated 24th August, 2021, the
court appointed a receiver on US Subsidiary and the Holding Company ("Receivership
Order'). Accordingly, Receiver appointed by the Court has taken over the Management
and Financial control of the US Subsidiary and the Directors appointed by the Holding
Company in US Subsidiary have ceased to be member of Board. On 22nd March, 2022, the
Holding Company has perfected the appeal before the Appellate Division, First Judiciary
department of Hon'ble Supreme Court of State of New York against the above orders,
which is still under consideration. |
|
| iii. The ‘Senior Note 2013' (Bond 1) and
‘Senior Note 2014' {Bond 2) amounting to USD 126.65 million and USD 372.36
million, issued by US subsidiaries in the year 2013 and 2014 respectively, and which were
due for repayment on 16th May, 2018 and 24th July, 2019 respectively, have not been repaid
and continue to be outstanding till date. No interest accrual for the period from 17th
May, 2018 to 31st March, 2023 on Bond 1 and 25th July 2019 to 31st |
|
| March, 2023 on Bond 2. As explained by the Management, as the
Bond indenture had not specified on payment of interest on the outstanding loan amount
beyond the date of its maturity. |
|
| Considering that the orders passed above are under
consideration by the court of laws of respective jurisdiction, Rolta International Inc.
and its subsidiaries have been continued to be consolidated in accordance with the Ind AS
110 "Consolidated Financial Statements". Also, as the US subsidiaries are under
control of receiver, no financial statements/ information of US subsidiaries are available
for the period post 30th September, 2021. Accordingly, consolidated financial statements
incudes the financial statements of US subsidiaries as at 30th September, 2021.
Consequently, we are not able to comment on any adjustments to the carrying values of the
assets and liabilities and consequential impacts on the loss for the year, assets/
liabilities and other equity as on 31st March, 2024. |
|
| c) Attention is drawn to note no. 24 and 37 to the
consolidated financial statement, regarding nonrecognition of interest on borrowing from
banks and financial institutions, inter corporate loans by the Holding Company post
initiation of CIRP with effect from 19th January, 2023 on account of moratorium available
under Section 14 of the Insolvency and Bankruptcy Code, 2016 ("the Code").The
same is not in compliance with requirements of Ind AS - 23 on "Borrowing Cost"
read with IndAS - 109 on "Financial Instruments". |
Due to the ongoing Corporate Insolvency Resolution Process,
The Hon'ble NCLT has granted Moratorium under Section 14 of the Code. Therefore, no
such interest can be recognized in the books of the Company after Corporate Insolvency
Resolution Process Commencement date i.e., 19th January, 2023. |
| d) In accordance with the Insolvency and Bankruptcy Code, the
Resolution Professional ("RP") of the Holding Company has to receive, collate
and admit the claims submitted by the creditors as a part of CIRP process. Such claims can
be submitted to the RP till the approval of the resolution plan by the Committee of
Creditors. Pending final outcome of the CIRP process, no accounting impact in the books of
accounts has been made in respect of excess, short, or non- |
The remark made is selfexplanatory in nature. |
| receipts of claims for operational creditors, financial
creditors, employees and government dues. Also, the Holding Company is pursuing various
tax matters arising on account of assessment notices, inquiry notices, demand/penalty
notices issued by various statutory authorities. In view of admission of the Holding
Company under CIRP process and these matters are now subject to CIRP process, we are
unable to comment as to whether those matters will have any financial impact including
recognition of those liabilities in the consolidated financial statement on the loss for
the year, liabilities and other equity as on 31st March, 2024 (Refer note no. 38 to the
consolidated financial statements). |
|
| e) Attention is drawn to the fact that consolidated financial
statements including the unaudited financial statements of Rolta International Inc. USA
and its four subsidiaries as at 30th September, 2021, due to non-availability of financial
statements/information post the said date, whose financial statement reflect total asset
of Rs. 3,143.53 crores. Further, consolidated financial statements including financial
statements of Rolta Global BV, USA, Rolta International Inc., USA, Rolta Defence
Technology Systems Pvt. Ltd, India and Rolta BI and Big Data Analytics Pvt Ltd., India and
their 4 subsidiaries as at March 31, 2023, due to nonavailable financial statements/
information post the said date, whose financial statement reflect total assets of Rs.
1,693.68. |
The remark made is selfexplanatory in nature. |
| Consequently, we are not able to comment on any adjustments
to the carrying values of the assets and liabilities and consequential impacts on the loss
for the year, assets/ liabilities and other equity as on 31st March, 2024. |
|
Fraud Reporting under Section 143(12) made by the Auditors and the
Practicing Company Secretary in their Reports:
During the period under review, the auditor has not reported any matter
under Section 143(12) of the Act, therefore no detail is required to be disclosed under
Section 134(3) of the Act.
During the year under review, the Auditors had not reported any matter
under Section 143(12) of the Act; therefore, no detail is required to be disclosed under
Section 134(3) of the Act.
II. Secretarial Auditor
The Provisions related to Secretarial Audit under Section 204 of the
Companies Act, 2013 is applicable on your Company. During the year under review, The
Resolution Professional has appointed Mr. Tarun Koli, Company Secretaries, to carry out
the Secretarial Audit of the Company for the financial year 2023-24.
The Secretarial Audit Report issued by Mr. Tarun Koli, Company
Secretaries, is attached as "Annexure-B" to this Report.
The Secretarial Auditor has made following remarks/Observations in
their report and the reply by the suspended Directors are as follows:
| Observation |
Reply |
| 1. Pursuant to the provisions of Regulation 6 of SEBI LODR,
2015 read with the provisions of Section 203 of Companies Act, 2013, The company has not
appointed Chief Financial Officer and a Company Secretary as Key Managerial Person (KMP)
and Compliance Officer under the aforesaid provisions for the period under review.
Further, as informed by the Company, Due to the ongoing Corporate Insolvency Resolution
Process of the Company the Company is finding difficulty in getting a suitable candidate
for the roles. |
Due to the ongoing Corporate Insolvency Resolution Process,
the Company is finding difficulty in getting a suitable candidate for the roles. |
| 2. Pursuant to the provisions of Regulation 23(9) of SEBI
LODR, 2015, The Company has not submitted disclosure of the related parties pursuant to
aforesaid regulation to the Stock Exchanges. As informed by the Company, due to lack of
financial and human resources |
The remark is self-explanatory in nature, Since the account
of the Company was financially stressed, the Company was not having necessary financial
and human resources consequentially, the financial results and thereby the |
| financial results for the relevant period were not prepared
and such disclosure were not made. |
disclosure of the related party and their subsequent
transactions for the relevant period were not prepared due to aforesaid resource
limitations. Consequently, the relevant disclosures were not made within the stipulated
timeframe. |
| 3.Pursuant to Regulation 33 of SEBI LODR, 2015, the Company
has not prepared and submitted the Financial Results for the Quarter ended June 2023,
September 2023, December 2023 and March, 2024 to Stock Exchanges. As informed by the
Company, Due to shortage of skilled manpower and other operational challenges, preparation
and collection of Financials data, especially for Foreign Subsidiaries, Consolidated the
data is not readily available and hence consuming time. |
The remark is self-explanatory in nature, Since the account
of the Company was financially stressed, the Company was not having necessary financial
and human resources. Consequentially, the financial results for the relevant period were
not prepared due to aforesaid resource limitations. Consequently, the relevant disclosures
were not made within the stipulated timeframe. |
The Provisions related to Internal Audit under Section 138 of the
Companies Act, 2013 is applicable on your Company. Your Company has appointed M/s. S.M.
Kapoor & Co., Chartered Accountants having its office at Dossa Mansion, 3rd
Floor, Sir. P.M. Road, Mumbai- 400001, as an Internal Auditor of the Company to carry out
the Internal Audit of the Company for the financial year 2023-24.
The maintenance of cost records as specified under section 148(1) of
the Companies Act, 2013, is not applicable on the Company and accordingly such accounts
and records are not made and maintained.
All Independent Directors had given declarations to the effect that
they meet the criteria of independence as laid down under Section 149(6) of the Companies
Act, 2013 and SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
However, during/after the closure of Financial Year all the Independent Directors ceased
to act as Directors of the Company and as such presently the Company has no Independent
Director.
As on 31st March 2024, in terms of the provisions of
Companies Act 2013, your Company had following Indian & Foreign subsidiaries:
Indian subsidiaries:
1. Rolta Defence Technology Systems Private Limited
2. Rolta BI and BIG Data Analytics Private Limited
3. Rolta Thales Limited
Foreign subsidiaries:
1. Rolta International Inc. USA (Consolidated)
2. Rolta Middle East FZ-LLC
3. Rolta UK Limited
4. Rolta Global B.V
As on 31st March 2024, in terms of the provisions of
Companies Act 2013, your Company doesn't have Associate and joint venture.
The Consolidated Financial Statements of the Company and its
subsidiaries, prepared in accordance with applicable Accounting Standards notified under
Section 133 the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rule
2014, form part of the Annual Report and are reflected in the Consolidated Financial
Statements of the Company.
As on 31st March, 2024, the Company has Indian and foreign
subsidiaries. Statement containing salient features of the financial statements of
subsidiaries is also included in this Annual Report as "Annexure C".
During the year under review, no Related Party Transactions has been
entered under section 188 of the Companies Act, 2013. This is to be informed that since
the commencement of Corporate Insolvency Resolution Process no related party transaction
was entered into by the Company.
Subject to initiation of Corporate Insolvency Resolution Process
against the two Indian Subsidiaries namely Rolta Defence Technology Systems Private
Limited and Rolta BI and BIG Data Analytics Private Limited and its consequential effects,
there are no material changes during the financial year under review in the Company that
would affect the financial position of the Company.
During the year under review, the company has not directly or
indirectly given any loan, guarantees or made any investments pursuant to section 185 and
186 of the Companies Act, 2013.
During the financial year ended 31st March, 2024, the
Company has not accepted any deposits falling within the ambit of Section 73 of the
Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
The Company has an adequate system of Internal Financial Control
commensurate with its size and nature of business. The Company has adopted policies and
procedures for ensuring the orderly and efficient conduct of its business, including
adherence to Company's policies, the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and completeness of the accounting records,
and all endeavors have been made for timely preparation and reporting of the financial
information.
The 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. All employees (permanent, contractual, temporary,
trainees) are covered under this policy. The policy has been uploaded on the website of
the Company. During the year under review, the Company has not received any complaints.
The Company is undergoing Corporate Insolvency Resolution Process in
accordance with the provisions of the Insolvency and Bankruptcy Code, 2016 read with the
IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016.
It may be noted that after the admission of application under Section 7
of Insolvency and Bankruptcy Code, 2016 on 19th January, 2023. Board of
Directors stands suspended under Section 17(1)(b) of Insolvency and Bankruptcy Code, 2016.
The management of the Company and suspended Board of Directors acts
under the authority and supervision of Resolution Professional appointed by the Committee
of Creditors.
The composition of the Board of the company as on 31st March
2024 are as follows:
| S. No. Name of Director |
Date of Appointment |
Date of Cessation |
| 1. Mr. Kamal K Singh (Executive Director, Chairman, MD) |
01-07-2007 |
- |
| 2. Ms. Homai A Daruwalla (Non-Executive Independent Director) |
15-07-2019 |
14-07-2024 |
| 3. Mr. Ramnath Pradeep (Non-Executive Independent Director) |
17-06-2019 |
16-06-2024 |
| 4. Mr. Ramdas Bhagwan Das Gupta (Non-Executive Independent
Director) |
17-10-2020 |
16-10-2023 |
| 6. Mr. Rangarajan Sundaram (Executive Director) |
30-12-2022 |
- |
During the year under review, following were the changes on the Board
of Directors/KMP of the Company: -
1. Mr. Rangarajan Sundaram was appointed as Additional Director
(Executive) with effect from 30th December, 2022 for a term of 2 years and his
appointment has been regularized as Director in the 33rd Annual General Meeting
held on 30th December, 2023, his term is set to conclude on 29th
December 2024. Consequently, this item pertaining to his reappointment is proposed to the
shareholders in the ensuing 34th Annual General Meeting.
2. Mr. Kamal K Singh was appointed as an Additional Director,
designated as Chairman and Managing Director without any remuneration, perks or commission
with effect from 30th December, 2022 for a term of 2 years and his appointment
was regularized as Director in the 33rd Annual General Meeting held on 30th
December, 2023 and his term is set to conclude on 29th December, 2024.
Consequently, this item pertaining to his reappointment is proposed to the shareholders in
the ensuing 34th Annual General Meeting.
3. Ms. Homai A Daruwalla was re- appointed as Non-Executive
Independent Director in the 29th Annual General Meeting held in the year 2019
with effect from 15th day of July, 2019 for the second term of 5 years.
Accordingly, her office of directorship was completed on 14th day of July,
2024. As per the provisions of Section 149 (11) of the Companies Act, 2013, she is no more
eligible to act as Non-Executive Independent Director of the Company.
4. Mr. Ramnath Pradeep was re- appointed as Non-Executive
Independent Director in the 29th Annual General Meeting held in the year 2019
with effect from 17th day of June, 2019 for the second term of 5 years.
Accordingly, his office of directorship was
Completed on 16th day of June, 2024. As per the provisions of Section
149 (11) of the Companies Act, 2013, he is no more eligible to act as Non-Executive
Independent Director of the Company.
5. Mr. Ramdas Bhagwan Das Gupta was re- appointed as Non-Executive
Independent Director in the 30th Annual General Meeting held in the year 2020
with effect from 17th day of October 2020 for the second term of 3 years.
Accordingly, his office of directorship was completed on 16th day of October,
2023. As per the provisions of Section 149 (11) of the Companies Act, 2013, he is no more
eligible to act as Non-Executive Independent Director of the Company.
Mr. Kamal K. Singh who has been designated as the Managing Director,
and Mr. Rangarajan Sundaram, who is currently serving as the Executive Director of the
Company. Their Term of office is set to conclude on 29th December 2024.
Therefore, both of them have expressed their consent to be appointed or re-appointed as
director(s) of the Company for a term of 1 year with effect from 30th December
2024 or the completion of Corporate Insolvency Resolution Process, whichever is earlier.
Social Welfare Activities has been an integral part of the Company
since inception. The Company is committed to fulfill its social responsibility. The policy
is available on the website of the Company.
However, on account of financial losses faced by the Company in last 3
years, the Company does not fall under the requisite criteria and thus the compliance with
the relevant provision of the Companies Act, 2013 is not applicable.
It may also be noted that after the admission of application under
Section 7 of Insolvency and Bankruptcy Code, 2016 on 19th January, 2023. The Board of
Directors and its Committees stands suspended under Section 17(1)(b) of Insolvency and
Bankruptcy Code, 2016.
The Company is still undergoing the Corporate Insolvency Resolution
Process. During the year under review no CSR amount has been spent because of the
recurring losses. A detailed explanation of Committee is given in the Corporate Governance
Report.
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo prescribed under Section 134 (3) (m) of the Companies
Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is Annexed as
"Annexure D" to this report.
The ratio of the remuneration of each director to the median employee's
remuneration and other details in terms of sub-section 12 of Section 197 of the Companies
Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, are forming part of this report as "Annexure-E".
In terms of the provisions of Section 197(12) of the Companies Act,
2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, there are no employees drawing remuneration in excess
of the limits set out in the said Rules are provided in the Annexure forming part of the
Annual Report.
During the year under review, there was no such commission being
received by the Managing Director/Whole Time Director from the Company or from Its Holding
or Subsidiary Company.
As stated herein before and subject to the Corporate Insolvency
Resolution Process proceedings as such no Significant & Material orders passed by the
Regulators or Courts or Tribunal during the period under review.
Subject to the terms of the Resolution Plan and Corporate Insolvency
Resolution Process proceedings, during the year the Company has not opted for any one-time
settlement scheme for the loan taken from Bank(s) or Financial Institution(s). Therefore,
there is no difference between amount of the valuation done at the time of one-time
settlement and the valuation done while taking loan from the Bank(s) or Financial
Institution(s).
The report on Corporate Governance as stipulated under the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part
of this Report. The requisite certificate from the Secretarial Auditor of the Company
confirming compliance with the conditions of Corporate Governance is attached to the
report on Corporate Governance. It is pertinent to mention that a Company undergoing
Corporate Insolvency Resolution Process, however, is exempted from the requirement of,
amongst others, composition of Board Of Directors, constitution, meetings and terms of
reference of the audit committee, constitution, meetings and terms of reference of the
nomination and remuneration committee, constitution, meetings and terms of reference of
the stakeholders' relationship committee as required under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, pursuant to the provisions of Regulation
15(2A)(2B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
The Company places on record its sincere appreciation and gratitude for
the assistance and co-operation received from the Financial Institutions, Banks,
Government authorities, Customers and Vendors during the year under review. Your Company
also wishes to place on record its deep sense of appreciation for the committed services
by the Company's executives, staff and workers.
The Company is greatfull to all those with whose help, cooperation and
hard work, the Company is able to survive during this hardship.
| By order and under the authority of Resolution
Professional For Rolta India Limited |
|
| Kamal K Singh |
Rangarajan Sundaram |
| (Managing Director) |
(Executive Director & Compliance
Officer) |
| DIN: 00260977 |
DIN:08650913 |
| Date: 29.11.2024 |
|
| Place: Mumbai |
|
|