| Dear Members,
Your Directors have pleasure in presenting their 21st Annual Report on
the business and operations of the Company together with the Audited
Statement of Accounts of Rainbow Foundations Limited ( the Company )
for the year ended March 31,2015.
1. FINANCIAL RESULTS (Rs. in Lakhs)
Standalone
Particulars
31/03/2015 31/03/2014
Total Income 3231.21 1596.89
Profit/(loss) before Interest,
Depreciation & Tax (EBITDA) 558.87 391.85
Finance Charges 458.21 260.29
Depreciation 3.79 6.34
Provision for Income Tax 31.43 41.44
Net Profit/(Loss) After Tax 61.48 83.87
Profit/(Loss) brought forward
from previous year - -
Profit/(Loss) carried to Balance Sheet 61.48 83.87
2. FINANCIAL PERFORMANCE OF THE COMPANY
During the year under review, the Company s Profit before Interest,
Depreciation & Tax increased to Rs. 558.87 Lakhs as compared to Rs.
391.85 Lakhs in the previous year. The Company earned a net profit of
Rs. 61.48 Lakh in the Current Financial Year as against a net profit of
Rs. 83.87 Lakh in the previous year. The increase in net profit is on
account of increased revenue and marginal reduction of project
expenditure. Your directors are expecting to provide a better
performance in the forthcoming years.
3. CHANGE IN NATURE OF BUSINESS, IF ANY
Our Company has not deviated its line of business activity nor has
expanded the area of activities; therefore, there is no change in the
nature of business for the year under review.
4. DIVIDEND
In order to conserve the resources of your Company, the Board of
Directors of do not recommend any dividend for the financial
year 2014-15.
5. TRANSFER TO RESERVES
The Company has not transferred any amount to reserves for the
financial year 2014-15.
6. SHARE CAPITAL
The Board of Directors of the Company has not issued any shares during
the year.
Present Capital structure of the Company is as follows.
As at March 31, 2015 As at March 31, 2015
Particulars
Number Amount Number Amount
Share Capital
Authorised
Capital
Equity shares of
INR 10 each 1,20,00,000 120,000,000 1,20,00,000 120,000,000
Issued, Subscribed
and fully paid up
share capital
Equity snares of
INR 10 each 55,13,100 55,131,000 55,13,100 55,131,000
7. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
The Company has no subsidiaries, associate and joint ventures,
therefore, disclosing the names of the respective entities does not
arise.
8. MATERIAL CHANGES & COMMITMENTS AFFECTING FINANCIAL POSITION OF THE
COMPANY, OCCURRING AFTER BALANCE SHEET DATE
There are no material changes or commitments likely to affect the
financial position of the Company which is having an impact on the
functioning and working of the Company. The operations of the Company
have been effectively being managed and the Management shall review the
performance from time to time in order to monitor the business
activities of the Company.
9. PARTICULARS OF LOANS, INVESTMENTS AND GUARANTEES UNDER SECTION 186
OF THE COMPANIES ACT, 2013
There were no loans, guarantees and investments under Section 1 86 of
the Companies Act, 2013 during the year 2014-15.
10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES TO
REFERRED TO IN SUB SECTION (1) OF SECTION 188 OF THE COMPANIES ACT,
2013
During the year under review, the Company has not entered into any
contracts or arrangements with its related parties.
11. DEPOSITS
The Company has not accepted any deposits either from the shareholders
or public within the meaning of the Companies (Acceptance of Deposits)
Rules, 2014. No amounts on account of principal or interest on deposits
from public was outstanding as on 31st March, 2015.
12. STATUTORY AUDITORS
The Auditors of your Company, M/s. Jain Bafna & Co., Chartered
Accountants, having Firm Registration Number 010657S, hold office until
the conclusion of the Twenty first Annual General Meeting and, being
eligible, offer themselves for re-appointment as the Auditors of your
Company for the financial year 2015-16. The Company has received the
consent from the Auditors for their appointment for the respective
year.
The Auditor s report on the financial statements for the year 2014-15
does not contain any qualification, reservation or adverse remark.
13. COST AUDITORS.
Cost Audit is not applicable to the Company. The Central government has
not specified maintenance of cost records for the Company under sub -
section (1) of section 148 of the Companies act 2013. Therefore, there
is no requirement for appointment of Cost Auditors.
14. SECRETARIAL AUDIT REPORT
Pursuant to provisions of Section 204 of the Companies act, 2013 and
the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Company has appointed M/S. JM & Associates, a firm of
Company Secretaries in practice to undertake the Secretarial Audit of
the Company for the financial year 2014" 15.The report of Secretarial
Audit is annexed herewith in Form MR - 3 as annexure.
15. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies act, 2013, the Board of
Director s to the best of their knowledge and ability, confirm that.
I. In the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures,
ii. Had selected such accounting policies and applied them consistently
and made judgments and estimates that are reasonable and prudent so as
to give a true and fair view of the state of affairs of the company at
the end of the financial year and of the profit and loss of the company
for that period,
iii. 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,
iv. Had prepared the annual accounts on a going concern basis, and
v. Had laid down internal financial controls to be followed by the
company and that such internal financial controls are adequate and were
operating effectively.
vi. The directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
16. COMPOSITION OF BOARD
The Composition of Board is governed by the applicable laws and
regulations and Articles of Association of th e Co m pany.
The Board consists of persons of professional expertise and experience
in technical, financial and operational segments who provide leadership
and guidance to the management. The Present constitution of the Board
of Directors of the Company consists of the following members.
No. of Director No. of
Name of Director Category of -ships in Equity
Director other bodies Shares held
corporate
Mr. Anopchand Jain P/MD 1 1,76,883
Mr. Gajraj Jain P/JMD NIL 2,00,000
Mr. Mukesh Kumar M. Mehta I/NED NIL 631
Mr. PM.Mothiram I/NED NIL NIL
Mr. Sampatraj Singhvi I/NED NIL 27
Ms. Lakshmi Sreedhar I/NED NIL NIL
P Promoter MD Managing Director
ED Executive Director NED Non"Executive Director
I Independent - -
The Directorships held by the Directors as mentioned above do not
include Alternate Directorships and Directorships held in Foreign
Companies, Companies registered under Section 8 of the Companies Act,
2013 and Private Limited Companies.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL
P ursuant to Section 149(10) of the Companies Act, 2013, read along
with Rules framed thereunder, the Members had at the Annual General
Meeting of the Company held on September 29, 2014, approved the change
in designation of Mr. Mukesh Kumar Manilal Mehta, Mr. PM. Mothiram and
Mr. Sampat Raj Singhvi as Independent Directors for a term of five
years. All the Independent Directors have given declarations that they
meet the criteria of independence as provided in Section 149(6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement. In the
opinion of the Board, they fulfill the conditions of independence as
specified in the Act and the rules made thereunder and they are
independent of the management.
During the last Annual General Meeting held on September 29, 2014, Mr.
Anopchand Jain was re-appointed as the Managing Director of the Company
for a term of five years commencing from June 7, 2014 upto June 6,
2019.
Also, during the year under review Mr. Gajraj Jain has been
re-appointed as the Joint Managing Director for a period of five years
commencing from January 1, 2015 and is paid remuneration as per the
terms of his employment.
Mr. Anopchand Jain retire by rotation at the forthcoming Annual General
Meeting and being eligible, offers himself for re-election. Brief
particulars and expertise about him has been given in the annexure to
the Notice of the Annual General Meeting in accordance with the
requirements of listing agreement with the Stock Exchange.
In order to comply with Section 149 of the Companies Act, 2013, the
Company had appointed Ms. Lakshmi Sreedhar as the Woman director of the
Company vide Board Meeting dated March 23, 2015.
18. POLICY ON APPOINTMENT OF DIRECTORS AND CRITERIA FOR DETERMINING
QUALIFICATIONS, POSITIVE ATTRIBUTES AND INDEPENDENCE OF A DIRECTOR
The Nomination and Remuneration committee is responsible for developing
competency requirements for the Board and in this regard conducts a gap
analysis to determine the Board composition on a periodic basis
including each time a Director appointment or reappointment is
required. The committee has framed a policy to determine th e
qualifications, po sitive attri bute s and independence of a Director.
The key feature s of th e policy are.
* Qualifications - The Board nomination process encourages diversity of
thought, experience, knowledge, age and gender. It also ensures that
the Board has an appropriate blend of functional and industry
expertise.
* Positive attributes - Apart from the duties of Directors as
prescribed in the Companies act, 2013, the Directors are expected to
demonstrate high standards of ethical behavior, communication skills
and independent judgement.
* Independence - A Director wwill be considered independent if he/she
meet the criteria laid down in
Section 149(6) of the Companies act, 2013 and clause 49 of the listing
agreement.
19. EVALUATION OF THE BOARD'S PERFORMANCE
In accordance with the provisions of the Companies Act, 2013 and
Corporate Governance requirements as prescribed by SEBI under Clause
49of the Equity Listing Agreement, the Board along with the Nomination
& Remuneration Committee have carried out an annual evaluation of its
own performance and that of its committees and individual Directors.
The Independent Directors evaluated the performance of the individual
Directors on the basis of various criteria included attendance &
participation in Board Meeting, engagement with the management in
decision making, understanding about the company s business and its
affecting industries.
The criteria for performance evaluation of Board included the aspects
such as composition of Board and its structure, roles and
responsibilities under various provisions of the Companies Act, 2013
etc. The criteria for performance evaluation of Committees of the Board
included the aspects like composition of Committees, effectiveness of
Committee meetings etc.
20. COMMITTEES OF BOARD
During the financial year 2014 -15, the Board constituted some of its
Committees, in accordance with the Companies Act, 2013. There are
currently three Committees of the Board, as follows:
i. Audit Committee
ii. Nomination and Remuneration Committee
iii. Stakeholders Relationship Committee
Details of all the Committees along with their charters, composition
and meetings held during the year, are provided in the Report on
Corporate Governance .
21. BOARD MEETINGS
The Board of Directors met 8 (Eight) times during the year financial
year 2014-15.
Details of the composition of the Board and its committees and of the
meetings held, attendance of the Directors at such meetings and other
relevant details are provided in the Corporate Governance Report. The
intervening gap between the meetings was within the period prescribed
under the Companies Act, 2013.
During the year under review, the Board has accepted all
recommendations of the Audit Committee.
22. VIGIL MECHANISM
The Company has adopted a Whistle blower policy establishing vigil
mechanism, to provide a formal mechanism to the directors and employees
to report their concerns about unethical behaviour, actual or suspected
fraud or violation of the Company s code of conduct or ethics policy.
The policy provides for adequate safeguards against victimization of
employees who avail of the mechanism and also provide for direct access
to the Chairman of the Audit Committee. It has affirmed that no
personnel of the Company has been denied access to the Audit Committee.
23. EXTRACT OF ANNUAL RETURN
Pursuant to section 92(3) of the Companies Act, 2013 ( the Act ) and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, extract of annual return in Form MGT 9 is enclosed as Annexure.
24. ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE
A) Conservation of energy, technology absorption
The particulars as required under the provisions of Section 134(3) (m)
of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)
Rules, 2014 in respect of conservation of energy and technology
absorption have not been furnished considering the nature of activities
undertaken by the Company during the year under review
B) F oreign Exchange Earnings and Outgo:
PARTICULARS 2015 (in inr) 2014 (in inr)
Earnings Nil Nil
Outgo Nil Nil
25. REVIEW OF RISK MANAGEMENT POLICY ADOPTED BY THE COMPANY
The Company in order to comply the provisions of the Companies Act,
2013 and provide an effective mechanism for implementing risk
management system had adopted the policy on risk management for
evaluating and monitoring various risks that could threaten the
existence of the Company. The Company had not faced any major risks and
no major deviations from the actuals as attained by the Company. The
Audit committee has to review the policy periodically. The Board takes
overall responsibility for the overall process of risk management in
the organisation.
The Board shall take note of any future threats and shall report to the
Company for formulating an effective mechanism and strategy.
26. MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS, TRIBUNALS
There are no significant material orders passed by the Regulators or
Courts or Tribunals which would have impact on the going concern status
of the Company and its future operation.
27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO
FINANCIAL STATEMENTS
The Company has an adequate system of internal controls in place. it
has documented policies and procedures covering all financial and
operating functions. These controls have been designed to provide a
reasonable assurance with regard to maintaining of proper accounting
controls for ensuring reliability of financial reporting, monitoring of
operations, protecting assets from unauthorised use or losses,
compliances with regulations. The Company has continued its efforts to
align all its processes and controls with global best practices.
28. PREVENTION OF SEXUAL HARASSMENT
The Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 is applicable to your
Company.
Your 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, 201 3 to prevent sexual
harassment at work place. All employees (perma nent, contractual, te m
porary, trainee s) are covere d under thi s policy.
During the year under review, the Company has not received any
complaints from the employees with regard to Sexual Harassment.
29. REPORT ON CORPORATE GOVERNANCE
A separate section on Corporate Governance forming part of the
Directors Report and the Certificate from the Practicing Company
Secretary confirming compliance of Corporate Governance norms as
stipulated in Clause 49 of the listing agreement with the Bombay Stock
Exchange is included in the Annual Report.
30. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The management discussion and analysis of the financial conditions
including the result of the operations of the company for the year
under review as required under clause 49 of the Listing Agreement is
given as a separate statement in the Annual Report.
31. REMUNERATION POLICY:
The Nomination and Remuneration Committee (NRC) has formulated a policy
relating to the remuneration of the directors, key managerial personnel
and other employees. The philosophy for remuneration is based on the
commitment of fostering a culture of leadership with trust. The
remuneration policy has been prepared pursuant to the provisions of
Section 178(3) of the Companies act, 2013 and Clause 49 of the listing
agreement. While formulating this policy, the committee has considered
the factors laid down in Section 178(4) of the Companies Act, 2013,
which are us under:
* That the level and composition of remuneration is reasonable and
sufficient to attract, retain and motivate directors of the quality
required to run the Company successfully;
* Relationship of remuneration to performance is clear and meets
appropriate performance benchmarks;
* Remuneration to directors, key managerial personnel and senior
management involves a balance between fixed and incentive pay
reflecting short and long term performance objectives appropriate to
the working of the Company and its goals.
The key principles governing the remuneration policy are as follows:
* Market Competitiveness
* Role played by the individual
* Reflective of size of the company, complexity of the
sector/industry/Company s operations and the Company s capacity to pay
* Consistent with recognised best practices and
* Aligned to any regulatory requirements.
In accordance with the policy, the Managing/Executive/KMPs/ employees
are paid basic/fixed salary.
The non-executive Directors, including Independent directors are paid
sitting fees for attending the meetings of the Board and committees of
the Board.
The NRC is responsible for recommending the remuneration policy to the
Board. The Board is responsible for approving and overseeing
implementation of the remuneration policy.
The information required under Section 197 of the Companies act, 2013
read with rule 5(1) of the Companies (Appointment and remuneration of
Managerial Personnel) Rules, 2014 has been attached as annexure.
32. COMMENTS ON QUALIFICATIONS MADE IN SECRETARIAL AUDIT REPORT
The Following qualifications were made in the secretarial audit report,
1. Non appointment of CFO
2. Non appointment of Internal Auditor
Board s reply,
1. The Co m pany is in process of recruiting right candid ate as CF O
to adhere due co m pliance under the Act.
2. The Company is under process to appoint Internal Auditors to
conduct internal audit of the functions and activities of the Company.
33. DETAILS OF EMPLOYEES DRAWING SALARY ABOVE PRESCRIBED LIMITS
There are no employees who are paid remuneration in excess of the
limits specified under Section 197 of the Companies Act, 2013 read with
Companies (Appointment and Remuneration) Rules, 2014 as amended from
time to time.
34. ACKNOWLEDGEMENTS
Your Director s wish to convey their appreciation to all of the Company
s employees for their enormous personal efforts as well as their
collective contribution to the Company s performance. The Director s
would also like to thank the employees, shareholders, customers,
dealers, suppliers, bankers, Government and all other business
associates for the continuous support given by them to the Company and
their confidence in its management.
FOR AND ON BEHALF OF THE BOARD
Sd/- Sd/-
Managing Director Whole Time Director
Place . Chennai
Date . 14.08.2015
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