To,
The Members
Reliance Naval and Engineering Limited
The newly constituted Board of Directors of the Company hereby present
the 27th (Twenty Seventh) Directors' Report together with the Audited
Financial Statements of the Company for the financial year ended March 31, 2024.
Pursuant to the Order dated January 15, 2020, of the Hon'ble
National Company Law Tribunal, Ahmedabad ("NCLT"), the Corporate Insolvency
Resolution Process ("CIRP") was initiated in respect of the Company in
accordance with the provisions of the Insolvency and Bankruptcy Code, 2016
("IBC"/ "Code") and related rules and regulations issued thereunder,
effective from January 15, 2020 (the "CIRP Commencement Date"). Shri Rajeev
Sawangikar was appointed as the Interim Resolution Professional ("IRP") pursuant
to the NCLT Order. Thereafter, the Committee of Creditors ("CoC") of the Company
resolved with the requisite voting share to replace the IRP with Shri Sudip Bhattacharya
as the Resolution Professional ("RP" or "Resolution Professional").
Subsequently, the Hon'ble NCLT approved the appointment of Shri Sudip Bhattacharya as
the RP for the Company vide its Order dated May 05, 2020
The powers of the Board of Directors of the Company were suspended
effective from the commencement date of the Corporate Insolvency Resolution Process
(CIRP), and such powers, along with the management of the Company's affairs, were
vested in the Interim Resolution Professional (IRP), Resolution Professional (RP), or
Monitoring Committee (MC) in accordance with the provisions of the Insolvency and
Bankruptcy Code (IBC) and the Resolution Plan.
Under Regulation 15(2A) and 15(2B) of the SEBI (LODR) Regulations,
2015, the provisions of Regulations 17, 18, 19, 20, and 21 relating to the Board of
Directors, the Audit Committee, the Nomination and Remuneration Committee, the
Stakeholders Relationship Committee, and the Risk Management Committee do not apply to a
listed entity undergoing the Corporate Insolvency Resolution Process (CIRP) under the
Insolvency and Bankruptcy Code (IBC). However, the role and responsibilities of the Board
of Directors, and its Committees, were fulfilled by the Resolution Professional (RP) or
Monitoring Committee, in accordance with Sections 17 and 23 of the IBC and the Sanctioned
Resolution Plan.
Pursuant to the NCLT order dated December 23, 2022 ("NCLT
Order"), the Adjudicating Authority approved the resolution plan ("Approved
Resolution Plan") submitted by Hazel Mercantile Limited ("Resolution
Applicant") for the Company under Section 31 of the Code. In accordance with the
provisions of the Code and the NCLT order, the Approved Resolution Plan is binding on the
corporate debtor and its employees, members, creditors, guarantors, and other stakeholders
involved in the resolution plan.
In terms of approved Resolution Plan, Monitoring Committee comprising 2
(Two) representatives of the Financial Creditors, 2 (Two) representatives of the
Resolution Applicants, was constituted on December 23, 2022, to manage the affairs of the
Company as a going concern and supervise the implementation of the Resolution Plan until
January 04, 2024.
Members are kindly requested to note that the incumbents of the
reconstituted Board of Directors of the Company were appointed on the Board of the Company
with effect from December 08, 2023 and took over the affairs of the company with effect
from January 04, 2024. Prior to that, the Resolution Professional was handling the affairs
of the company during the Corporate Insolvency Resolution Process ("CIRP") until
December 23, 2022, and thereafter till January 04, 2024 the Monitoring Committee
("MC") were entrusted with and responsible for the management of the
Company's affairs.
The reconstituted Board of Directors, which took over the management of
the Company's affairs from the Monitoring Committee on January 04, 2024, is
presenting this Report and the Financial Statements for the year ended March 31, 2024,
under the provisions of the Companies Act, 2013, the rules and regulations framed
thereunder ("the Act"), and the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations").
The present Board of Directors disclaims any responsibility for all
current and future liabilities, including contingent liabilities, whether crystallized or
uncrystallized, arising from non-compliance with statutory obligations by the Resolution
Professional or the Monitoring Committee during their tenure. This includes, but is not
limited to, non-compliance with the Act, Listing Regulations, and other SEBI/ Corporate
Laws up to January 04, 2024.
An immunity has been provided to the new management as per the
provision contained in the sanctioned Resolution Plan and relief provided by virtue of the
order passed by the National Company Law Tribunal from all the past non-compliance
committed by the erstwhile management / resolution professional / monitoring committee
prior to the acquisition of control of the Company. This disclaimer clarifies that the
newly constituted Board of Directors, its officers, and the new management are insulated
from any irregularities or legal obligations incurred before assuming control of the
Company's management on January 04, 2024.
For the period under review, the Company was not operational due to the
suspension of its management. The management control of the Company was entrusted to the
Resolution Professional until December 23,2022, and thereafter the Monitoring Committee
("MC") had management control till January 04, 2024. Board of the Company took
over the affairs of the company with effect from January 04, 2024. In view of the above
facts, the Directors Report for the year under review has been prepared to the extent
applicable.
Financial Results
The financial performance of the Company, on standalone basis, for the
financial year ended March 31, 2024 is summarised below:
(Amount in ' In Lacs)
Particulars |
Financial year ended March 31, 2024 |
Financial year ended March 31, 2023 |
| Total Income |
246 |
776 |
| Profit / (Loss) before taxation |
(12136) |
(1,58,430) |
| Exceptional items |
|
19,52,123 |
| Tax expenses (Net) (including deferred tax
and tax for earlier years) |
- |
|
| Profit / (Loss) after taxation |
(12136) |
17,93,693 |
| Other Comprehensive Income |
- |
- |
| Total Comprehensive Income for the year |
(12136) |
17,93,693 |
Financial Performance and State of Affairs of the Company:
There were no business operations during the year under review as the
Company was under Corporate Insolvency Resolution Process ("CIRP") until January
09, 2023 and was under the supervision of Monitoring Committee until January 04, 2024, for
the rest of period, newly reconstituted board. was in power. However, the income from
other source were Rs 246 Lakhs.
Dividend:
During the year under review, since the Company was under CIRP and due
to current year losses, no dividend on the equity shares of the Company has been
recommended.
Reserves:
In view of the losses incurred during the financial year ended March
31, 2024, no amount has been transferred to Reserve.
Subsidiary Companies, Associate and Joint venture:
Following is the status of Subsidiary and Associate Companies:
Sr. No. |
Name of the Company |
Nature of entity |
Status |
Accounting of investment |
| 1 |
E Complex Private Limited |
Wholly Owned Subsidiary |
Under CIRP |
Impaired in FY 2020-21 |
| 2 |
RMOL Engineering and Offshore Limited |
Wholly Owned Subsidiary |
Under liquidation |
Impaired in FY 2018-19 and written off in FY
2022-23 |
| 3 |
REDS Marine Services Limited |
Wholly Owned Subsidiary |
Under liquidation |
Impaired in FY 2018-19 and written off in FY
2022-23 |
| 4 |
Reliance Technologies and Systems Private
Limited |
Wholly Owned Subsidiary |
Ongoing |
Impaired in FY 2018-19 and written off in FY
2022-23 |
| 5 |
PDOC Pte. Limited |
Subsidiary |
Ongoing |
Impaired in FY 2018-19 and written off in FY
2022-23 |
| 6 |
Conceptia Software Technologies Private
Limited |
Associate |
Ongoing |
Carried in the books |
Due to the write-off and impairments of investments in subsidiary
companies, the financial information of the subsidiaries has not been considered for the
consolidation of the financial statements of the Company, except for one associate, i.e.,
Conceptia Software Technologies Private Limited.
Material Changes Post Closure of Financial Year:
The upfront payment, as per approved resolution plan, was due by March
23, 2023. The Company obtained extension from the Committee of Creditors ("CoC")
as well as the Hon'ble NCLT, Ahmedabad Bench, for the payment of the upfront amount.
In accordance with the extension granted by the Hon'ble NCLT, the upfront payment,
along with interest for the delay, was made on October 27, 2023
The first tranche, as per the plan, was due by December 23, 2023. The
Company obtained an extension from the CoC as well as the Hon'ble NCLT, and the
payment was deferred to December 23, 2024, as per the deferred payment agreement. The
payment was made on August 07, 2024, along with interest as stipulated in the deferred
payment agreement.
Corporate Governance:
During the period under the review, the Management Control of the
Company was in the hands of the Monitoring Committee till January 04, 2024 and thereafter
with the New Management. In view of the same, information in relation to the same forms
part of the Annual Report as Corporate Governance Report to the extent applicable.
Number of Board Meetings and Committee meetings
The reconstituted Board after assuming the management control met twice
(2) until March 31, 2024. Details of the Board and Committee meeting and the attendance
therein is explained in details in Corporate Governance Section of the Annual Report.
Declaration of Independence:
The Company has received Declaration of Independence as stipulated
under section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors
confirming that he/she is not disqualified from being appointed/re-appointed/ continue as
an Independent Director as per the criteria laid down in section 149(6) of the Companies
Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
The Independent Directors of the Company have registered themselves
with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of
section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment
& Qualification of Directors) Rules, 2014.
Performance Evaluation
The Independent Directors of the newly constituted Board of the
Company, at their first meeting held on March 28, 2024, reviewed and discussed various
matters, including the performance evaluation of the Board and individual Directors. It
was agreed that, given the Board's constitution in December 2023 following the NCLT
proceedings, and the appointment of the new management, including the Chairman, in
February 2024, the financial year ending March 31, 2024, was too brief to conduct a
meaningful evaluation of the Board, its Committees, and the Chairman. Consequently, no
evaluation was undertaken.
Deposits / Unpaid dividend:
Following the assumption of management responsibility by the
reconstituted Board on January 4, 2024, the Board has neither accepted nor renewed any
deposits from the public in accordance with Section 73 of the Companies Act, 2013
(‘the Act') and the applicable Rules thereunder. Further, pursuant to the
sanctioned resolution plan, any unpaid dividends owed to the equity shareholders of the
Company have been extinguished, and no claims shall remain outstanding against the Company
or its officers.
Particulars of Loans, Guarantees or Investments:
Details of loans, guarantees or investments covered under the
provisions of Section 186 of the Act are given in notes to the standalone financial
statements forming part of the Annual Report.
Change in the nature of business:
There was no change in the nature of business of the Company during the
year under review.
Internal Financial Control ("IFC") systems and their
adequacy:
The management of the Company is currently in the process of
implementing effective internal control systems pertaining to financial reporting.
Significant and Material Orders impacting going concern basis passed by
the regulators or courts or tribunals
The Hon'ble National Company Law Tribunal (‘NCLT') vide
its order dated December 23, 2022, approved the resolution plan submitted by Hazel
Mercantile Limited ("Resolution Applicant") for the Company under Section
31 of the Code. In accordance with the provisions of the Code and the NCLT order, the
approved resolution plan is binding including but not limited on the Company and its
employees, members, creditors, guarantors and other stakeholders involved in the
resolution plan.
Management Discussion and Analysis Report
Considering that the Company was entirely non-operational and under the
supervision of the Resolution Professional until January 04, 2024, the Management
Discussion and Analysis Report has been prepared in so far as applicable and is included
in the Annual Report.
Change in Share Capital
As a part of the implementation of the Resolution Plan approved by the
Hon'ble NCLT under Section 31 of the Insolvency and Bankruptcy Code, 2016, vide its
order dated December 23, 2022 the following changes have taken place in the share capital
of your Company during the year under review:
a. Cancellation and extinguishment of all equity shares and allotment
of shares to existing shareholders in the ratio 275: 1 pursuant to the approved resolution
plan;
b. Allotment of 5,00,00,000 fresh ordinary equity shares of face value
of Rs 10/- each to the Special Purpose Vehicle ‘Hazel Infra Limited' Authorised
Share Capital
As of March 31, 2024, there is no change in the Authorised Capital of
the Company Paid-up Share Capital
Pursuant to the approved of Resolution Plan as approved by Hon'ble
NCLT:
a. All existing ordinary equity shares, totaling 73,75,91,263 shares of
Rs 10 each, held by the shareholders, were cancelled and extinguished. In exchange,
26,82,150 new ordinary equity shares of Rs 10 each were issued to the shareholders,
at a ratio of 1 (one) new equity share of Rs 10 face value for every 275 (two
hundred seventy-five) ordinary equity shares previously held
b. 5,00,00,000 fresh ordinary equity shares of Rs 10 each were
issued to the Special Purpose Vehicle, ‘Hazel Infra Limited.'
c. The existing issued, subscribed, and paid-up 42,245,764 Compulsorily
Redeemable Preference Shares (CRPS) of Rs 100 each were fully cancelled and
extinguished.
As on March 31, 2024, the total equity paid-up share capital of your
Company was Rs 5,268 Lakhs divided into 5,26,82,150 equity shares of Rs 10
each fully paid-up.
Particulars of employees and related Disclosures:
Due to absence of information, the reconstituted Board is unable to
furnish the disclosures required under Section 197(12) of the Companies Act, 2013, read
with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014.
Directors' Responsibility Statement:
Members may kindly note that, the management control of Company was
handed over to the Reconstituted Board only on January 04, 2024. Monitoring Committee
appointed as per approved resolution plan was the in charge of management of the affairs
of the Company from April 01, 2023 to January 03, 2024 and the Reconstituted Board of
Directors assumed control over the affairs and of the Company on January 04, 2024.
Accordingly, pursuant to Section 134(5) of the Act, the Reconstituted
Board of Directors, based on the knowledge/information gained by them, about the actions
of Monitoring Committee (i.e. who were entrusted with and responsible for the management
of the affairs of the Company prior to January 04, 2024) and the affairs of the Company in
a limited period of time from January 04, 2024 to March 31, 2024, from the records of the
Company, 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 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, are in the process of reviewing existing internal
financial controls and strengthening it wherever required taking into consideration future
scale of operation of the Company. However, the Directors are of the opinion that existing
internal financial controls are commensurate with its current level of commercial
activity.
Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition, and Redressal) Act, 2013:
Details of the complaints received under the Sexual Harassment of Women
at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, have been explained in
Corporate Governance section.
Statutory Auditors and Auditors' Report:
At the 23rd Annual General Meeting ("AGM") of the
Company held on November 10, 2020, M/s Pipara and Co LLP, Chartered Accountants, were
appointed as the statutory auditors for a term of five consecutive years, until the
conclusion of the 28th AGM. However, M/s Pipara and Co LLP resigned on October
12, 2024, before completing their term.
Following the resignation, and based on the recommendation of the Audit
Committee, the Board of Directors appointed M/s N. N. Jambusaria & Co., Chartered
Accountants, as the statutory auditors to fill the casual vacancy caused by the
resignation, at their meeting on October 17, 2024.
Further, M/s N. N. Jambusaria & Co., the existing Statutory Auditor
was appointed to fill causal vacancy created by the Resignation of M/s Pipara & Co
LLP, Chartered Accountants (FRN: 107929W / W100219) at 25th Annual General
Meeting of the Company, to hold office until the conclusion of 27th Annual
General Meeting. Consequently, M/s N. N. Jambusaria & Co. would vacate the office as
statutory auditor on the conclusion of 27th Annual General Meeting scheduled to
be held on December 27, 2024.
Accordingly, the Board of Directors ("Board") of the Company
on the recommendation of the Audit Committee, has recommended the appointment of M/s N. N.
Jambusaria & Co., ("N. N. Jambusaria") Chartered Accountants (Firm
registration number 104030W) as Statutory Auditors for a period of 5 continuous years i.e.
from the conclusion of 27th Annual General Meeting till the conclusion of 32nd
Annual General Meeting of the Company in accordance with the provisions of Section 139 of
the Act and the Companies (Audit and Auditors) Rules, 2014.
Terms and Conditions of appointment of N. N. Jambusaria:
Tenure:
5 years from the conclusion of the 27th Annual General
Meeting till the conclusion of the 32nd Annual General Meeting Audit Fees:
The fixed fees for the statutory audit, limited review, audit of
internal control over financial reporting, statutory certifications, and other
professional work are Rs 16.30 Lakh for FY 2024-25, plus applicable taxes, travel,
and other out-of-pocket expenses incurred in connection with the statutory audit. The
proposed fees are based on the scope of work, team size, industry experience, expertise,
and the time and effort required from N. N. Jambusaria for FY 2024-25. Further, the Fees
for the remaining tenure of N. N. Jambusaria as statutory auditors for FY 2025-26 to FY
2028-29 will be approved by the Board of Directors and/or the Audit Committee
Reporting of Fraud:
There have been no instances of fraud reported by the Statutory
Auditors under Section 143(12) of the Act and Rules framed thereunder, either to the
Company or to the Central Government.
Secretarial Auditor and Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Act read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Resolution professional had appointed M/s. Jignesh M Pandya & Co, Company Secretaries
in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit
Report is enclosed towards the end of this report.
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.
Cost Auditors and Cost Audit Records:
There was no appointment of Cost Auditors during the Reporting Period.
Particular of contracts or arrangements with related parties referred
to in Sub-Section (1) of Section 188 of the Companies Act, 2013:
The transactions with Related Parties have been disclosed in the
financial statement of the Company for FY 2023-24.
Conservation of energy, technology absorption and foreign exchange
earnings and outgo
Due to the unavailability of confirmation regarding the disclosure of
Conservation of energy, technology absorption and foreign exchange earnings and outgo, the
reconstituted Board is not in a position to confirm the status of the disclosure during
the reporting period.
Whistle Blower Policy:
Due to the lack of confirmation regarding compliance under the Vigil
Mechanism system, the reconstituted Board is unable to verify compliance with this
disclosure under whistle blower policy
Familiarization programme for Independent Director:
As part of the implementation of the Resolution Plan approved by the
Hon'ble NCLT through its order dated December 23, 2022, the erstwhile Board of
Directors of the Company was replaced by a new Board of Directors, effective December 08,
2023, which took control of the management of the Company from January 04, 2024. During
the Board meetings held in the financial year 2023-24, following the reconstitution of the
Board, presentations were made on various matters, including the Company's business
and operations, industry and regulatory updates, and other relevant topics as part of the
familiarization programs.
Vigil Mechanism:
Due to the lack of confirmation regarding compliance under the Vigil
Mechanism system, the reconstituted Board is unable to verify compliance with this
disclosure.
Acknowledgement:
Reconstituted Board would like to express their sincere appreciation
for the assistance and co-operation received from the financial institutions, banks,
Government authorities, customers, vendors and members during the year under review and
also wish to place on record its deep sense of appreciation for the committed services by
the Company's executives, staff and workers.
|
For and on behalf of Board of Directors |
|
|
Paresh Merchant |
Nikhil Merchant |
|
Director |
Chairman & Managing Director |
|
DIN: 00660027 |
DIN: 00614790 |
| Date: November 11, 2024 Place: Mumbai |
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