Dear Members,
The Directors present the Annual Report together with the audited Balance Sheet and the
Statement of Profit and Loss and other financial statements of RSWM Limited for the year
ended March 31,2023.
Companys Performance
Your Companys performance during the year 2022-23 is summarized below:
Financial Results
(Rs in Crores)
| Particulars |
2022-23 |
2021-22 |
| Turnover |
|
|
| Export |
937.14 |
1419.41 |
| Domestic |
2851.76 |
2398.01 |
| TOTAL |
3788.90 |
3817.42 |
| Profit before Interest & Depreciation |
339.53 |
464.17 |
| Less: Interest/Finance Cost |
73.95 |
67.61 |
| Profit before Depreciation & Amortisation |
265.58 |
396.56 |
| Less: Depreciation & Amortization |
127.30 |
113.08 |
| Profit/(Loss) before Tax |
138.28 |
283.48 |
| Less: Current Tax |
24.48 |
49.37 |
| Tax of earlier years provided (written back) |
(20.66) |
(11.78) |
| Deferred Tax Liability/(Asset) |
24.85 |
5.91 |
| Profit/(Loss) after Tax |
109.61 |
239.98 |
| Add: Opening Balance |
716.58 |
477.20 |
| Dividends & Others |
(57.70) |
(0.60) |
| Profit available for appropriation |
768.49 |
716.58 |
Number of Meetings of the Board
The particulars of the meetings held during the year along with the details regarding
the meetings attended by the Directors form part of the Corporate Governance Report.
The composition of the Board and its committees is in the report on Corporate
Governance.
Dividend and other Appropriations
Your Directors are pleased to recommend a dividend on Eguity Shares @ 50% i.e. Rs. 5/-
per Eguity Share of Rs. 10/- each for the year ended the March 31,2023.
The proposal for payment of dividend on Eguity Shares of the Company will absorb an
amount of Rs. 23.55 Crore.
The proposal with regard to the payment of dividend on Eguity Shares for the year ended
March 31, 2023 shall be placed before the Shareholders at the ensuing Annual General
Meeting.
No amount is proposed to be transferred to General Reserve. The amount ofRs. 768.49
Crore has been carried overto next year.
As already informed in the previous report(s), your Directors have adopted the Dividend
Distribution Policy in line with the Regulation 43A of SEBI (Listing Obligations and
Disclosure Reguirements) Regulations, 2015 and the same forms part of this Annual Report
and is also available on the website of the Company.
Operational Performance
Your Directors feel pleasure to present the operational performance of your Company for
the financial year ended 31st March,2023. Your Directors inform the members that the
financial year under review began on higher note carrying forward the performance of the
previous year. However, the glooms of inflationary and recessionary trends in the US and
the Europe started reflecting on the operations of the Company from the second guarter
onwards. Though there was some recovery in the intermittent period but the overall trend
remained sluggish. Your Company utilised these challenging times to reorganise and
restructure itself and raised funds by way of rights issue to deleverage itself by
lowering its high cost debt obligations substantially and getting ready for future
expansions and diversifications as and when the normalcy returns.
Your Company has also continuously worked on cost optimization program to economize its
operations and operated on optimum capacity to minimize its losses during difficult period
alongside focusing on reducing inventories and realization of its outstanding debtors.
Dueto all these measures your Company could sustain its operations and profitability
during challenging times. Your Directors are hopeful that the continuous focus of the
company on cost optimization measures and on value added products as well as increase in
productivity will help in increasing profitability in future years.
During the period under review, the sale/transfer of Private Freight Terminal of the
Company situated at Namli, Madhya Pradesh was completed and entire consideration was
received as per MOU entered with the buyer. The accounting treatment has been explained in
the note no. 3e (b) of the notes on accounts.
Your Company recorded a turnover of T3788.90 Crore as against a turnover of T3817.42
Crore recorded in the previous year. This includes the operations of the newly set up
Melange and Knits Units which commenced its operations in the second guarter of the year
under review. However, operating profit of the Company declined to T339.53 Crore from
T464.17 Crore recorded in the previous year. Profit before depreciation also declined to
T265.58 against T396.56 Crore recorded in the previous year and the profit aftertax also
decreased to Rs. 109.61 Crore against T239.98 Crore in the previous year.
The analytical review of the Companys performance and its businesses, including
initiatives in the areas of human resources and information technology, has been presented
in the section on Management Discussion and Analysis of the Annual Report.
Working results of last three financial years 2020-21 to 2022- 23 are given in Annexure
- I and form part of this report.
Further, your directors are glad to inform the members that during the year under
review, your Company raised its paid up capital by way of issue of Rights Eguity Shares
aggregating to 2,35,50,842 eguity shares of face value of Rs. 10/- each at a price of Rs.
100/-each (including a premium of Rs. 90/-per share) and thus raised T235.50 Crore. The
funds raised by Rights issue were utilized for debt reduction as per stated objectives in
the offer letter. Your Directors draw attention of the members to Note No.12 to the
financial statement, which contain particulars in this regard.
Expansion and Modernization
Your Directors in their previous report informed the members about the capital
expenditure programs of the Company comprising of setting up of 19,488 Spindles of combed
spinning of Cotton Yarn at Mordi at a capital outlay of T78.35 Crores, setting up of
30,000 Spindles of Melange yarn at Kharigram at a capital outlay of Rs. 157.12 Crores and
the setting up of Knitted Fabric facility at Mordi at a capital outlay of Rs. 89 Crores in
the first phase. Your Directors are pleased to inform the members that all the above
projects were completed and made operational in the second guarter of the year under
review. Your Directors further inform that an outlay of T77.84 Crores was incurred as
capital expenditure on Modernisation and Balancing Eguipments across all locations during
FY22-23.
Your Directors inform the members that though the above stated capital expenditure
programs were completed during the previous year, the Company could not take the full
advantage of the above programs due to depressed market conditions which started in the
second guarter and continued till middle of the fourth guarter. The business conditions
started showing signs of improvement towards the end of last guarter and your Directors
are hopeful that the Company is ready and would be able to reap the full benefits of
capital expenditure completed in the last year in the current and subseguent financial
year(s).
Your Directors are further pleased to inform the members that your Company during the
year under review has envisaged further expansion in spinning capacity by setting up
51,072 Spindles of Compact Cotton Yarn at its Lodha Unit at Banswara at an outlay of
T315.00 Crores. This project is expected to be commissioned in the financial year 2023-24
and is expected to boost up the turnover and profitability of the Company significantly in
the coming years.
Your Directors in their previous report informed the members about the agreement with
M/s. Manjeet Cotton Private Limited for acguiring Butibori Unit from them upon completion
of NCLT proceedings of M/s. CLC Corporation Ltd. However, no progress was achieved with
regard to NCLT proceedings of M/s. CLC Corporation Ltd. Your Directors are reviewing the
proposal and will take a suitable decision in due course of time.
Your Directors take this opportunity to inform the members that your Company keeps
evaluating opportunities for inorganic growth apart from the organic expansion of its
capacity and as and when any such opportunity would come across, the same would be looked
into by your Directors for necessary action.
Subsidiary Companies, Joint Ventures & Associates
Your Directors take this opportunity to inform the members that during the year under
review, they approved purchase of 100% shareholding in M/s. BG Wind Power Limited at a
consideration of Rs. 5 Crores from Bhilwara Energy Limited an Associate of your Company
subject to regulatory and other relevant approvals and fulfilment of procedural
reguirements. Your Company has obtained regulatory approvals, subject to fulfillment of
certain conditions, towards the end of financial year and accordingly completed the
acguisition of 100% shareholding on 6th April, 2023. Upon completion of purchase of 100%
shares, BG Wind Power Limited became wholly owned subsidiary of your Company. Your
Directors inform the members that the said acguisition would ensure that various Units of
the Company receive the supply of long term uninterrupted clean power for the operations,
once the restoration work of all the wind mills is completed.
Your Directors have already reported in the previous report(s) that your Company is
holding significant investment in Bhilwara Energy Limited and is represented by Shri Riju
Jhunjhunwala, Chairman and Managing Director of your Company on their Board, where also he
is holding the position of Managing Director. Your Company continues to hold 1,25,24,960
Eguity Shares constituting 7.56% of paid up capital in M/s. Bhilwara Energy Limited. Your
Directors are of the view that your Company continues to exercise its significant
influence on BEL by the representation of Shri Riju Jhunjhunwala, Chairman and Managing
Director on the Board of BEL and accordingly continue to treat M/s. Bhilwara Energy
Limited as its Associate.
Your Directors in their previous reports had been mentioning about the investment of
the Company in M/s. LNJ Skills & Rozgar Private Limited which is involved in skill
development related activities. Your Directors inform the members that during the year
under review, your Company continued to hold 47.30% of total shareholding in LNJ Skills
& Rozgar Private Limited at an investment of Rs. 11.80 Crores and therefore it is
continuing as Associate of your Company. Your Directors feel pleasure that by virtue of
this investment, your Company is continuing to contribute its bit in enhancing the skill
levels of manpower of our country.
A statement containing the salient features of the financial statements of M/s.
Bhilwara Energy Limited and M/s. LNJ Skills & Rozgar Private Limited is annexed as
Annexure - II in the prescribed format Form AOC-1.
Contribution to the Exchequer
Your Company has contributed an amount ofRs. 427.12 Crores in terms of taxes and duties
to the Excheguer.
Corporate Social Responsibility
Your Directors feel pleasure to inform the members that your Company has been on the
forefront to fulfil its obligation towards the society at large and accordingly made its
contribution in various activities viz. sanitation and safe drinking water, eradicating
hunger, poverty and malnutrition, promoting education, skills development, empowering
women, ensuring environmental sustainability, ecological balance, protection of national
heritage, help to armed forces veterans and promotion of rural sports etc. During the
financial year 2022-23, your Company has incurred Rs. 1.22 Crore on account of CSR
activities which includes health care, sanitation & safe drinking water Rs. 0.23
Crore; promoting education, skills development Rs. 0.70 Crore; ensuring environment
sustainability, ecology balance ? 0.09 Crore, protection of national heritage, culture Rs.
0.18 Crore and towards empowering women, help to armed forces veterans & training to
promote rural sports Rs. 0.02 Crores.
Your Directors inform the members that the Corporate Social Responsibility Committee
comprising of Shri Arun Churiwal, Shri Riju Jhunjhunwala and Shri Amar Nath Choudhary
monitors the expenditure incurred on the CSR activities and formulate an annual budget for
these activities. Your Directors also review the progress periodically.
The Annual Report on CSR initiatives undertaken by the Company as per the Companies
(Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure-lll forming
part of this report.
Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo
Your Directors inform the members that your Company endeavors to look continuously for
energy conservation measures in all areas of operation across its various Units.
Similarly, your Company endeavors to lookout for up-gradation and absorption of
technology. Your Company also spends continuously on Research and Development. Your
Directors are glad to inform the members that your Company is a net foreign exchange
earner. The relevant details as reguired to be disclosed with respect to Energy
Conservation, Technology absorption and Foreign Exchange Earnings and Outgo pursuant to
Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies
(Accounts) Rules, 2014 are given in Annexure - IV forming part of this report.
Annual Return
In terms of Companies Act, 2013 as amended, the Annual Return is available on the
website of the Company at the following link:
https://rswm.in/Annual-Return-2022-23
Directors & Key Managerial Personnel
Shri Shekhar Agarwal and Shri Arun Kumar Churiwal, Directors retire by rotation and
being eligible offer themselves for reappointment.
Your Directors inform the members that Shri B M Sharma was reappointed as Joint
Managing Director with effect from 7th August, 2022 for a further term of two years and
his reappointment was approved by the members at the previous Annual General Meeting held
on 6th September, 2022 by Special Resolution.
Your Directors further inform the members that Smt. Archana Capoor was reappointed as
Independent Director for the second term of five consecutive years with effect from 13th
February, 2023 upto 12th February, 2028 and her reappointment was approved by the members
at the previous Annual General Meeting held on 6th September, 2022 by Special Resolution.
Your Directors further inform the members that declarations have been taken from the
Independent Directors at the beginning of the financial year stating that they meet the
criteria of independence as specified under sub-section (6) of Section 149 of the
Companies Act, 2013 and Regulation 16(1 )(b) of the SEBI (Listing Obligations and
Disclosure Reguirements) Regulations, 2015.
During the year, Shri Riju Jhunjhunwala, Chairman & Managing Director and CEO, Shri
B M Sharma, Joint Managing Director, Shri Avinash Bhargava, Chief Financial Officer and
Shri Surender Gupta, Company Secretary have acted as Key Managerial Personnel.
Directors Appointment and Remuneration Policy
Your Directors inform the members that a Nomination and Remuneration Policy as amended
from time to time in view of regulatory changes had been in place for the appointment of
Directors and Senior Management and fixation of their remuneration. The Nomination and
Remuneration Policy as framed is annexed as Annexure -V and forms part of this report.
Your Directors inform the members that the Nomination and Remuneration Committee as
well as your Directors endeavor to follow the policy and all appointments at Board and
Senior Management are considered at the meetings of the Committee and the Board.
Annual Evaluation by the Board
Your Board of Directors, during the financial year under review, carried out annual
evaluation of its own performance as well as its Committees and also of the individual
Directors in the manner as enumerated in the Nomination and Remuneration Policy in
accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and
Disclosure Reguirements) Regulations, 2015. Your Directors feel pleasure in informing the
members that the performance of the Board as a whole and its members individually was
rated satisfactory.
Public Deposit
During the year under review, your Company has not accepted any public deposit under
Companies Act, 2013.
Particulars of Loans, Guarantees or Investments
Details of Loans, Guarantees and Investment is given in the Notes to the Financial
Statements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Company during the
financial year with the related parties are on arms length basis and in the ordinary
course of business. During the financial year, there were no material contracts or
arrangements entered into by the Company with any of the related party. Your Directors
draw attention of the members to Note No.39 to the financial statement, which contain
particulars with respect to transactions with related parties. The policy on dealing with
the related party transactions as amended from time to time in view of regulatory changes
and as approved by the Board of Directors is disclosed on the website of the Company
underthe following link:
https://rswm.in/pdf/policy/Related_Party_Transaction_Policy.pdf
Significant and Material Orders Passed by the Regulators or Courts
During the year under review, no significant and materials orders were passed by the
Regulators or Courts.
Risk Management Policy
Your Directors in their previous report informed the members that a detailed Risk
Management Policy was framed in line with SEBI stipulations along with the framework for
identification of internal and external risks faced by the Company as well measures for
risk mitigation including systems and processes for internal control of identified risks.
Your Directors periodically review the risks associated with the business which can
threaten the prospects of the Company along with the measures for mitigation of such
risks..
The Risk Management Committee met periodically to monitor, review and evaluate the
identified risks as per Enterprise Risk Management Policy.
Internal Control Systems
Your Directors recognize that adeguate control systems are the backbone of any Company.
Your Directors have accordingly put in place strong internal control systems which
commensurate with the size of the Company and ensure that all assets are properly
safeguarded and also that all the information provided to the management is reliable and
the obligations of the Company are properly adhered to.
Your Directors place the utmost importance on continuous strengthening of internal
control systems and inform the members that in pursuit of strengthening internal control
systems, your Company has put in place a system whereby all areas of the operations of the
Company are reviewed by the internal as well as external professionals and independent
audit firms. Your Company takes adeguate measures with respect to gaps, if any, reported.
The Audit Committee of your Company regularly monitors the annual operating plans, risk
assessment and minimization procedures as well as mitigation plans and discuss reports by
the independent audit firms on internal audit findings.
Your Directors endeavor to continuously improve and monitor the internal control
systems.
Particulars of Employees
The information pursuant to Section 197 read with Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, of the employees is annexed as
Annexure - VI.
Further, pursuant to Rule 5(2) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the relevant statement is annexed as Annexure - VII.
Auditors
Statutory Auditors
Your Directors inform the members that M/s. S. S. Kothari Mehta & Co., Chartered
Accountants (Firm Registration No.000756N) were reappointed as Joint Statutory Auditors of
the Company for second term of five years from the conclusion of 58th Annual General
Meeting of the Company held on 11th September, 2019 till the conclusion of 63rd Annual
General Meeting of the Company in accordance with the provisions of Section 139 of the
Companies Act, 2013.
Your Directors also inform the members that M/s. Lodha & Co, Chartered Accountants
(Firm Registration No.301051E), were reappointed as Joint Statutory Auditors of the
Company for second term of five years from the conclusion of 61st Annual General Meeting
of the Company held on 6th September, 2022 till the conclusion of 66th Annual General
Meeting of the Company in accordance with the provisions of Section 139 of the Companies
Act, 2013.
Further, both the Statutory Auditors have confirmed their eligibility under Section 141
of the Companies Act, 2013 and the Rules framed there under.
The observations of the Auditors, if any, are explained wherever necessary, in the
appropriate notes to the accounts. The Auditors Report does not contain gualification,
reservation or adverse remark.
Internal Auditors
Your Directors, during the year under review, appointed M/s. P. K. Deora & Co.,
Chartered Accountants (Firm Registration No.004167N), M/s. BGJC & Associates LLP,
Chartered Accountants (Firm Registration No.003304N) and M/s. V Sankar Aiyar & Co.,
Chartered Accountants (Firm Registration No.109208W) to act as the Internal Auditors of
the Company for the financial year 2022-23 pursuant to section 138 of the Companies Act,
2013 read with the Companies (Accounts) Rules, 2014.
Secretarial Auditor
Your Directors, during the year under review, also appointed Shri Mahesh Kumar Gupta,
Practicing Company Secretary (Membership No. FCS 2870 and CP No.1999) Proprietor of M/s.
Mahesh Gupta & Company, Company Secretaries, Delhi as the Secretarial Auditor of the
Company for the financial year 2022-23 pursuant to Section 204 of the Companies Act, 2013
read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014. The Report of Secretarial Audit is annexed as Annexure-VIII.
Cost Auditor
Your Directors inform the Members that Pursuant to Section 148 of the Companies Act,
2013 read with The Companies (Cost Records and Audit) Rules, 2014, Textile Companies are
reguired to get their cost records audited. In this connection, the Board of Directors of
the Company on the commendation of Audit Committee had approved the appointment of M/s. N.
D. Birla & Company, Cost Accountants, (Firm Registration No.000028), Ahmedabad as the
Cost Auditor of the Company for the year ending March 31,2023.
Corporate Governance
Report on Corporate Governance along with the Certificate of Auditors M/s. S. S.
Kothari Mehta & Co., Chartered Accountants (Firm Registration No 000756N), Plot No-68,
Okhla Industrial
Area, Phase III, New Delhi -110020 and M/s. Lodha & Co., Chartered Accountants
(Firm Registration No.301051E), 12, Bhagat Singh Marg, New Delhi -110001 confirming
compliance to conditions of Corporate Governance as stipulated under SEBI (Listing
Obligations and Disclosure Reguirements) Regulations, 2015, form part of the Annual
Report.
Whistle Blower Policy
Your Directors inform the Members that with the objective of pursuing the business in a
fair and transparent manner by adopting the highest standards of professionalism, honesty,
integrity and ethical behavior and to encourage and protect the employees who wish to
raise and report their genuine concerns about any unethical behavior, actual or suspected
fraud or violation of Companys Code of Conduct, the Company has adopted a Whistle Blower
Policy. Policy adopted by the Company contains a framework whereby the identity of the
complainant is not disclosed. The policy has been disclosed on the website of the Company,
the link of which is given hereunder: https://rswm.in/pdf/policy/Whistle_Blower_Policy.pdf
Management Discussion and Analysis Report
Management Discussion and Analysis Report as reguired by SEBI (Listing Obligations and
Disclosure Reguirements) Regulations, 2015, forms part of the Annual Report.
Business Responsibility and Sustainability Report (BRSR)
In terms of the Regulation 34 of the SEBI (Listing obligations and Disclosure
Reguirements) Regulations, 2015 the Business Responsibility and Sustainability Report
forms part of the Annual Report.
General
a) The Company being a Textile Company falls under the prescribed class of Companies
and maintain Cost Accounts and Records which are subject to audit conducted by the Cost
Auditor.
b) In linewiththe provisions of Sexual Plarassment of Women at the Workplace
(Prevention, Prohibition and Redressal) Act, 2013, the Company has in place a Policy
framed at Group level and also set up an Internal Complaints Committee (ICC) to deal with
any such reported matter. During the year the ICC did not report receipt of any complaint
with regard to sexual harassment.
c) The Company is in compliance of all applicable secretarial standards issued by The
Institute of Company Secretaries of India from time to time.
Directors Responsibility Statement.
Pursuant to Section 134(3) (c) of the Companies Act, 2013, the Directors 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) They had selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company at the end of the financial year and of the profit
and loss of the Company for that period;
(c) They had taken proper and sufficient care for the maintenance of adeguate
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 had prepared the annual accounts on a going concern basis; and
(e) They had laid down internal financial controls to be followed by the Company and
that such internal financial controls are adeguate and were operating effectively.
(f) They had devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adeguate and operating effectively.
Acknowledgements
Your Directors take this opportunity to thank Customers, Members, Suppliers, Bankers,
Business Partners/Associates, Central and State Governments for their consistent support
and co-operation extended to the Company. We also acknowledge the significant contribution
made by the employees by their dedication and hard work and trust reposed on us. We look
forward to have the same support in our endeavor to help the Company to grow faster.
|
For and on behalf of the Board |
|
Riju Jhunjhunwala |
|
Chairman & Managing Director and CEO |
| Place: Noida (U.P) |
DIN - 00061060 |
| Date: May 26, 2023 |
|
+91-9892691696
