Reliance Chemotex Industries Ltd Management Discussions.

Dear Members,

The Directors of RCIL are pleased to present the 41st Annual Report on the affairs of the Company along with the Audited Financial Statements for the financial year ended on 31st March, 2019.


The Companys Financial Performance for the year ended 31st March, 2019 is summarized below: (Rs in Lakh )




Revenue from operation includin g other income 32,549.79 28685.78
Earning Before Deprecation Interest and Tax (EBIDTA) 2781.81 2058.77
Less : Depreciation 670.97 739.35
Less : Finance Cost 1,307.18 1978.15 1237.94 1977.29
Profit Before Tax 803.66 81.48
Tax Expenses 394.52 (178.29)
Profit After Tax 409.14 259.77
Other Comprehensive Income (3.76) 21.15
PAT after Other Comprehensive Income 405.38 280.92
Earning Per Shares Basic & Diluted 10.28 6.53


As per the International Monetary Fund (IMF), in 2017 and in early 2018 global economic activity registered strong growth but slowed notably in the second half of 2018, reflecting a confluence of factors like trade tensions, tight financial conditions, uncertainty surrounding Brexit and a slowdown in China (which affected economies around the world). Global growth is now projected to be at 3.3 percent in 2019 as compared to 3.6 percent in 2018 and to 3.8 percent in 2017. (Source: World Economic Outlook)


Europes economy continued to expand in the first half of 2018, albeit at a slower-than-expected pace. The region continues to enjoy respectable growth fueled by domestic demand. Growth in the Euro area is expected to moderate from 1.8 percent in 2018 to 1.6 percent in 2019 and to 1.7 percent in 2020. Growth rates have been marked down for many economies: Germany (due to soft private consumption, weak industrial production due to stricter

auto emission norms and subdued foreign demand), France (due to negative impact of street protests and industrial action) and Italy (due to weak domestic demand and higher borrowing costs). There is substantial uncertainty around the baseline projection of

1.5 percent growth in United Kingdom in 2019-20 on account of the high uncertainty with regard to the final shape of the Brexit deal. (Source: WEO update January 2019)


The growth forecast for the United States is expected to decline to

2.5 percent in 2019 and soften further to 1.8 percent in 2020 with th e u nw in d in g o f t h e fiscal stimulus and as the federal funds rate temporarily overshoots the neutral rate of interest. Strong domestic demand growth will support rising imports and contribute to a widening of the US current account deficit. (Source: WEO update January 2019)


India being the sixth largest economy in the world and also the fastest growing trillion dollar economy was expected to grow at 6.8 percent in 2018-19, however, after seeing growth rates of 8.2% and 7.1% in the first two quarters of the year under review the growth rates fell to 6.6% in the third quarter and further to 5.8% in the last quarter. The weaker sentiment in the second half of the year was on account of a major non-banking financial company (NBFC) defaulting on its repayments to the financial institutions thereby effecting the credit expansion and consumer sentiments. Other major developments in the year under review were a decline in national inflation, an increase in per capita income and a steadying of interest rates. During the year, the US dollar crossed the level of Rs. 74 per dollar for the first time but eventually ended the year at Rs. 69.44.

For the year gone by India was in a better position to absorb the geo-economic shocks due to improving fundamentals and the Governments policy initiatives like insolvency and bankruptcy code amendments, bank recapitalizations, investment in infrastructure etc.. Over the medium-term, the domestic demand (which in near future looks subdued) will drive growth. According to International Monetary Fund (IMF), Indias GDP for 2019-20 is expected to grow by 7.3% and by 7.5% for 2020-21 on the back of recovery in private investments post the formation of the new government and robust domestic consumption fueled by easing of monetary and fiscal policy. The Direct Income Scheme programme announced in 2019-20 interim budget which is aimed at improving the condition of the farmers is also expected to provide impetus to rural consumption.

Source: economy/markets/a rticle/voyage-2019-live-updates-industry- leaders-discuss-the-future-of-indian-economy/405535


1554256892900.html growth-forecast-to-7-3-for-2019-20-1554813422935.html World Bank Report - Global Economic Prospects, January 2019 IMF Report - World Economic Outlook, April 2019 Synthetic Textile Industry in India

The Indian textile industry is one of the largest in the world with a large raw material base and manufacturing strength across the value chain. The textile industry accounts for 7% of industry output in value terms, 2% of Indias GDP and 15% of the Countrys export earnings according to Ministry of Textiles. Technical Textiles is one of the fastest growing sectors globally and in India it is estimated to grow to Rs. 2 lakh crores by 2020-21 (Ministry of Textile).

For the entire textile industry and particularly for synthetic spinning mills the year 2018-19 was an extremely challenging year on account of the heavy fluctuations in the raw material rates and weak domestic and export demand. The fluctuations in the raw material rates were caused by volatility in crude oil prices and the Rupee-USD foreign currency rates.

The GST Regime, which was introduced from 1st July 2017, replaced the value-added, sales, and excise taxes levied by 29 states and the federal government. The GST, which disrupted the tax system, is seeing signs of stabilization, and its impact on macroeconomic indicators is likely to be very positive in the medium-term.




The companys revenue from operations (including other income) stood at Rs. 32,549.79 Lakh compared to Rs. 28,685.78 Lakh with a remarkable growth of 13% as compared to the previous fiscal. Yarn production stood at 14,936 MT in FY19 compared to 14,170 MT in FY18 with a favorable growth of 5.40%. During the year, the Company has sold 14827 MT as compared to 13732 MT in FY18. Earnings Before Interest, Depreciation and Tax (EBITDA) for the year was Rs. 2,781.81 Lakhs as compared to Rs. 2,058.77 lakhs in the previous fiscal showing a remarkable growth of 35%. In this Financial Year, the Profit after Tax and Other Comprehensive Income for the year has increased substantially by 44.30% to Rs. 405.38 lakhs as compared to Rs. 280.92 lakhs in FY18. We were

extremely positive about our prospects in the domestic market in FY 18-19 and have achieved a remarkable demand of our product from the domestic market. The domestic sales of the Company have grown by 37% and the export sale have also witness a growth of 5% from Rs. 169.05 crore to Rs. 177.09 crore.

The Company has constantly focused on improving its operational efficiencies. The Company is pleased to report that during the period the Rajasthan State Industrial Development & Investment Corporation (RIICO) has appraised our modernization and expansion proposal and has sanctioned a term loan of Rs. 35.50 crores for this at very favorable terms. This loan also qualifies under Rajasthan Investment Promotion Scheme-2014 (RIPS- 2014) for an interest subsidy of 7% for 5 years from the start of commercial production. In this project the Company will expand existing capacity, replace older machinery and re-allocate certain machinery for research and development purposes. This will result in significant savings on repair and power cost and allow us to further expand our product offerings and enhance our margins. Furthermore, the Company is raising funds through the Issuance of Equity Shares on the Right Basis for Rs. 24.81 Crore, of which 23.07 crore will be used for the Redemption of 10% cumulative redeemable Preference Shares and remaining amount will be used for the General Corporate Purpose.

We have been constantly working towards our objective of sustainable growth and we continue to focus on improving our product mix and on strategic cost reduction. Moreover, we envisage an increase in demand for our value-added portfolio in the coming years.


Today, India is one of the worlds leading manufacturers of manmade textiles. Indian fabrics are known for their excellent workmanship, colors and durability. Due to heavy investments in world- class manufacturing plants, continuous innovation, new product mix and strategic market expansion, Indian man-made fibers (MMF) are set to take center stage in the global arena. India synthetic fiber industry is the new addendum to the ever-growing Indian Textile Industry. India being one of the worlds fastest growing economies it is expected that there would be significant rise in domestic as well as export demand in the coming years The company does not foresee any threats in the normal course of business, Company continuous focus on reducing its operational costs, improving efficiencies and technology up gradation have helped us be ahead of the curve.

Moreover, certain Macroeconomic factors such as recent trends of currency fluctuations, US China trade tensions and upcoming parliamentary elections may have some impact in near term. Currency swings can also lead to India becoming less competitive in the global market. However favorable government policies for the sector may provide boost to the industry going ahead.


The Audit Committee closely monitors all risks that could have a negative effect on the Company. Our Enterprise Risk Management (ERM) framework encompasses practices relating to the identification, analysis, evaluation, treatment, mitigation and monitoring of the strategic, operational, and legal and compliance risks to achieving our key business objectives. Risks which were reviewed by the Audit Committee are Financial Risk, Compliance Risk, Hazardous Risk, and Employee Related Risk, Liquidity Risk, Commodity Risk and Market risk. The focus of risk management is to assess risks and deploy mitigation measures. In accordance with SEBI( Listing Obligations and Disclosures Requirements) Regulation, 2015 (herein after called Listing Regulation) the Board members were informed of risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. Your Company is exposed to a number of factors which could potentially have an impact on the Companys operations: cost of raw material prices, cost of power, fluctuation in foreign exchange rate, changes in government regulation and availability of skilled labor, amongst others.


The Company recognizes the importance of Human Resource as a key asset instrumental in its growth. The Company believes in acquisition, retention and betterment of talented team players. With the philosophy of inclusive growth, the Company has further redefined its performance management system. The new system focuses on progression of individual employees together with organizational goals. Under the new system increased thrust will be on job rotation and multi-skilling. HRD achieves are taken in the Company involving positive approach to develop employees to take care of productivity, quality and customer needs. The Company has to make constant efforts to deploy Manpower. To develop skilled labour, training facilities are provided to the employees in house or by deputing them to the machinery suppliers and to training institutes for specific training. The Company has well developed management information system giving daily, monthly and periodical information to the all levels of management. Such reports are being analyzed and effective steps are taken to control the efficiency, Utilization, productivity and quality of product being produced in company.

The employee strength at the end of the financial year was 1508. This includes both skilled and unskilled manpower.


Your Directors are pleased to recommend a dividend of 10% (i.e. Rs. 1.00/- per Share) on Equity Shares of Rs. 10/- each for the Financial Year ended 31st March 2019 and an Additional Special Dividend of 5% i.e. Rs. 0.5 per share on the completion of 40 years of commencement of commercial production. If the dividend, as recommended above, is approved by the Members at the Annual General Meeting, the total outflow towards dividend (including the special dividend) on Equity Shares for the year would be Rs. 71.87 Lakh (inclusive of dividend distribution tax).


Your Directors are pleased to recommend a dividend of 10% (i.e. Rs. 10.00/- per Share) on 10% Cumulative Redeemable Preference shares of Rs. 100/- each for the Financial Year ended 31st March 2019. The dividend has to be paid as per the terms of the issue for the year; the total dividend payout will be Rs. 277.73 Lakh (inclusive of dividend distribution tax).


Your Company has been in strong financial health during the year under review. During the year, the Company has made repayments of term loans amounting to Rs. 10.70 crore to banks and financial institution and the Companys bankers have readily provided your Company with need-based working capital. During the year, RI ICO has approved a term loan of Rs. 35.50 Crores at very attractive terms for this modernization. This Loan also qualifies under Rajasthan Investment Promotion Scheme-2014 (RIPS- 2014) for Interest subsidy of 7% for 5 years from start of commercial production. The exercise will be completed in 2 phases and post the completion; we expect significant savings in power consumption and repairs & maintenance cost which will further enhance operating profits.


During the year under review, Mr. Rahul Shroff has been reappointed as Wholetime Director designated as Executive Director w.e.f 26th September, 2018 .

The term of contract of Mr. Ameya Shroff, Executive Director of the Company is up to 31st July, 2019. The Board of Directors on recommendation of Nomination and Remuneration Committee wishes to re-appoint him as Executive Director for a period of three years, with effect from 01st August, 2019. The resolution seeking approval of shareholders for the re-appointment of Mr. Ameya Shroff, Executive Director has been incorporated in the notice of Annual General Meeting along with brief detail about him.

In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-

enactment(s) thereof for the time being in force) and the Articles of Association of the Company, Mrs. Dipika Shroff (Non-Executive & Non-Independent Director) is liable to retire by rotation at the ensuing AGM and being eligible have offered herself for reappointment.

Mr. K.L. Sonthalia, Mr. Ramadoss Srinivasan & Mr. Narayan Shroff the Independent Directors of the company, whose first term of office will get completed on 31st March, 2019.,The company has received the consent from them and has proposed to re-appoint them for second term of office with effect from 01st April, 2019 for 5 years. The terms and conditions of appointment of Independent Directors are as per Schedule IV of the Act and SEBI Listing Regulations.

The Board of Directors recommended the / aforementioned appointments re- appointments of Mr. Ameya Shroff, Mrs. Dipika Shroff, Mr. Narayan Shroff, Mr. K.L. Sonthalia and Mr. Ramadoss Srinivasan.

The Company has received declarations from all the Independent Directors of the Company confirming that they continue to meet the criteria of independence as prescribed under sub- section (6) of Section 149 of the Companies Act, 2013 and rules issued thereunder as well as Regulation 16 of Listing Regulation including any statutory modification or re-enactment thereof for the time being in force.

Familiarization program has been conducted for Independent Director and the details are uploaded on the company website

Brief details of Directors proposed to be appointed/re-appointed as required under Regulation 36 of the SEBI Listing Regulations are provided in the Notice of Annual General Meeting.


Pursuant to Provision of the Companies Act, 2013 read with Rules issued there under and the SEBI (Listing Regulation).The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017. In a separate meeting of independent directors, performance of non-independent directors, the board as a whole and the Chairman of the Company was evaluated,

taking into account the views of executive directors and non executive directors. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.


The Board of Directors met five times during the year on 17.05.2018, 28.06.2018, 13.08.2018, 02.11.2018 and 09.02.2019. The frequency of and the quorum at these meetings were in conformity with the provisions of the Companies Act, 2013, Secretarial Standard -1 and the SEBI (Listing Regulations). Attendance and other details are given in Corporate Governance Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and SEBI (Listing Regulations), 2015 and Secretarial Standard-1.


The Company has appointed M/s. Jain Pramod Jain & Co, Chartered Accountant, New Delhi (Firm Registration No. 016746N), as the statutory auditors of the Company, for a term of five succeeding years, from the conclusion of the 39th Annual General Meeting of the Company held on 28th August, 2017 till the conclusion of the 44th Annual General Meeting to be held in the year 2022, and approval of shareholders of the Company, based on the recommendation of the Audit Committee was recorded for the same.

Pursuant to the amendments made to Section 139 of the Companies Act, 2013 by the Companies (Amendment) Act, 2017 effective from May 7, 2018, the requirement of seeking ratification of the Members for the appointment of the Statutory Auditors has been withdrawn from the Statute. Hence the resolution seeking ratification of the Members for continuance of their appointment at this AG M is not being sought.

The Company has received a certificate from M/s. , Jain Pramod Jain & Co, Chartered Accountant, New Delhi (Firm Registration No. 016746N), confirming that they are not disqualified from continuing as Statutory Auditors of the Company AUDITORS REPORT

There is no reservation, qualification or adverse remark contained in the Auditors Report attached to Financial Statements of

company as at 31st March, 2019. The information referred in Auditors Report of Financial Year 2018-19 is self-explanatory and do not call for any further comments.


There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Act and the rules made there under.


In Board Meeting held on 13th August, 2018, M/s N.N & Associates was appointed as Cost Auditor to undertake the Cost Audit for the Financial Year 2018-19. The Cost Audit for the Financial Year 2018-19 has been completed and the Cost Audit Report along with cost Accounts approved by the Board in its meeting held on 09th August, 2019.

M/s. N.N & Associates, Cost Accountants, New Delhi (FRN: 002322) has been re-appointed by the Board to conduct the Audit for the Financial Year 2019-20. As required under the Companies Act, 2013 the remuneration payable to the Cost Auditors is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking members ratification remuneration payable to M/s. N.N & Associates, Cost Accountant, New Delhi is included in the Notice of Annual General Meeting.

The Company has maintained the cost accounts and records in accordance with Section 148 of the Companies Act, 2013 and Rule 8 of the Companies (Accounts) Rules, 2014.

As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained a written certificate from the above mentioned Auditors to the effect that they conform with the limits specified in the said Section and that they are not disqualified for appointment within the meaning of Section 141 of the said Act and rules framed as under.

SECRETARIAL AUDITORS & SECRETARIAL AUDIT REPORT Pursuant to Provision of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s. V.M & Associates, Practicing Company Secretary (FRN: P1984RJ039200), Jaipur to undertake the Secretarial Audit of the Company for the financial year 2018-19. The Secretarial Audit Report in form M R-3 for the Financial Year 2018-19 is included as Annexure-2 and forms integral part of the Report.

The Secretarial Audit Report does not contain any qualification/ reservation &adverse remark.

The Board of Directors has re-appointed M/s. V.M & Associates, Practicing Company Secretary, Jaipur to conduct the Secretarial Audit for the Financial Year 2019-20

As required under the provisions of Section 139 of the Companies Act, 2013, the Company has obtained a written certificate from the above mentioned Auditors to the effect that they conform with the limits specified in the said Section and that they are not disqualified for appointment within the meaning of Section 141 of the said Act and rules framed as under.


Pursuant to Provision of Section 138 of the Companies Act,2013 read with Companies Accounts Rules) 2014, the Company appointed M/s. Rajeev Amitabh & Co, Chartered Accountant, New Delhi to undertake the Internal Audit for the Financial Year 201819. The Scope of Internal Audit is closely monitored by the Audit Committee. The Internal Auditor submits their report on half yearly basis and same has been placed before the Audit Committee along with Management response. Board of Directors in its meeting held on 4th May, 2019 has re- appointed M/s. Rajeev Amitabh & Co, Chartered Accountant, New Delhi to conduct the Internal Audit of the Company for the Financial Year 2019-20.


During the Financial Year 2018-19, your Company has not invited, accepted or renewed any deposits within the meaning of Section73, 74 and 76 of the Companies Act., 2013 read together with the Companies (Acceptance of Deposit) Rules, 2014 as amended. The Borrowing taken from the directors was stated in the financial statement note no. 16.


The paid up Equity Share Capital as at March 31, 2019 stood at Rs. 399.69 Lakh. During the year under review, the Company has not issued shares or convertible securities or shares with differential voting rights nor has granted any stock options or sweat equity or warrants. As on March 31, 2019, none of the Directors of the Company hold instruments convertible into Equity Shares of the Company. The Board had proposed to raise the funds by way of Right Issue from the existing shareholders of an amount not exceeding Rs. 30.00 Cr. Accordingly, the issue of shares to be issued on rights basis was opened on 08th July 2019 and closed for subscription on 22nd July 2019. The total offer was for 38,16,818 Shares @ Rs. 65.00 Per share (including a premium of Rs. 55.00 per share) amounting to Rs. 2480.93 Lakhs. The company received valid applications for 35,62,713 shares amounting to Rs. 2315.76 lacs.

The present capital structure of the company as on 31.03.2019 is as under:

Equity Share Capital : 399.69 Lakh
Preference Share Capital : 2307.50 Lakh


The Company does not propose to transfer any sum to the General Reserve out of the amount available for appropriation.


The Extract of the Annual Return in Form MGT-9 containing details as on the financialyear ended 31st March, 2019, as required under Section 92 (3) of the Companies Act,2013, read with the Companies (Management and Administration) Rules 2014, is included in the Report as an Annexure- 8.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY During the year under review, the Company has proposed to raise the funds by way of Right Issue to existing shareholders. The Company has allotted 3562713 Equity Shares to existing shareholders on 30th July, 2019. As on the Date of Report the above share has been listed and traded on the stock exchange. SIGNIFICANT MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There were no significant and material orders passed by the regulators, courts or tribunals which would impact the going concern status of the company and also the Companys future operations.


During the year, the Company has no Subsidiaries/ associate companies / Joint Venture as on 31st March, 2019.


During the year under review, your Company made loans, given guarantees, provided securities and made investments in compliance with Section 186 of the Companies Act, 2013. The said details are given in the notes to the financial statements. INTERNAL FINANCIAL CONTROL SYSTEM The Company has put in place an adequate system of internal control commensurate with its size and nature of business to safeguard and protect from loss, unauthorized use or disposition of its assets. All the transactions are properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting financial statements. The internal auditor of the Company checks and verifies the internal control system and monitors them in accordance with the policy adopted by the Company. The Audit Committee of the Board of Directors, Statutory Auditor and Department head are appraised of the internal audit finding and corrective action are taken thereon. The audit observation/ management response is placed before the Audit Committee. We

believe that our internal financial control system provides reasonable assurance that our internal financial control is designed effectively and is operating as intended.

REPORT ON CORPORATE GOVERNANCE A separate section on Corporate Governance and a certificate from Auditors of the Company regarding compliance with the conditions of Corporate Governance as stipulated under Regulation 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 with Stock Exchange form a part of the Annual Report are given in Annexure-9.

VIGIL MECHANISM /WHISTLE BLOWER POLICY Your Company is committed to highest standard of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated a Whistle Blower Policy which is in compliance with the provisions of Section 177(9) of the Companies Act, 2013 and Listing Regulation. The Policy provides a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. The policy is to promote ethical behavior in all its business activities and to report concerns and unethical behavior, actual or suspected fraud or violation of our code of conduct and ethics. Under the said Mechanism, the employees are free to report violations of applicable laws and regulations and the Code of Conduct. It also provides for adequate safeguards against the victimization of persons who use such mechanism. The Vigil Mechanism /Whistle Blower Policy have been posted on the Companys website

The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time. Your Company affirms that no director/employee has been denied to access the Chairman of the Audit Committee and that no compliant was received during the year. Brief details about the policy are given in the Corporate Governance Report.


The Board of Directors has framed the policy on Nomination & Remuneration which lays down the framework in relation to remuneration of Directors, Key Managerial Person and Senior Management of the Company. This policy also lays down the criteria for selection and appointment of Board Members. The Nomination & Remuneration policy has been posted on the Companys RELATED PARTY TRANSACTION

In line with the requirements of the Companies Act, 2013 and Listing Regulations, your Company has formulated a Policy on Related Party Transactions which is available on the Companys website at Policy intends to ensure that proper reporting; approval and disclosure processes are in place for

all transactions between the Company and Related Parties.

All Related Party Transactions are placed before the Audit Committee for review and approval. Prior omnibus approval is obtained for Related Party Transactions which are of repetitive nature and / or entered in the Ordinary Course of Business and are at Arms Length.

All Related Party Transactions entered during the year were in Ordinary Course of the Business and at Arms Length basis. No Material Related Party Transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements, were entered during the year by your Company. The disclosure of particulars of contracts/ arrangements entered into by the company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 is given in AOC -2 as given in Annexure-3.


The Company has always believed in providing a safe and harassment free workplace for every individual through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

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. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2018-19:

No. of complaints received No. of complaints disposed off


The Board of Directors has following committees:

1. Audit Committee

2. Nomination & Remuneration Committee

3. Stakeholders Relationship Committee

4. CSR Committee

5. Finance Committee

6. Executive Committee for Rights Issue

The details of committees along with their composition, number

of meetings and attendance of the meetings and other details are provided in the Corporate Governance Report.


In terms of requirements of Section 135 of the Companies Act, 2013 and rules issued there under, the Board of Directors of your company has constituted a CSR Committee comprising of Shri K.L. Sonthalia, Shri R.N. Sharma and Shri. Rahul Shroff as members of the committee. This committee is responsible for formulating, implementing and monitoring the CSR Policy of the company. The policy on CSR can be accessed on the Company website at

During the year under review, the company has spent Rs12.58 Lakh/- towards CSR activities.

The Report on CSR Activities as required under the Companies Act, 2013 are set out in the Annexure -4.


The information required pursuant to Section 197 (12) read with rule 5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of managerial remuneration of the Company is set out in the Annexure-5.

A statement of the employees of the Company who were in receipt of the remuneration exceeding the limits prescribed u/s 197 (12) read with rule 5(2), of The Companies (Appointment and Remuneration of Managerial Personnel) of the Companies Act,

2013 during the year under review, a Statement of particular of top ten employees in accordance with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personal) Rules,

2014 is appended as Annexure-6.


The statement pursuant to Section 134 (3)(m) of The Companies Act, 2013 read with the Rule 8(3) of The Companies (Accounts) Rules,2014 regarding particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act is given in Annexure no.1.


Pursuant to the requirement of Section 134(3)(c) of the Companies Act, 2013, with respect to Directors Responsibility Statement, Board of Directors hereby state and confirm that:

(i) In the preparation of the annual accounts for the year ended March 31, 2019 the applicable accounting standards and schedule III of the Companies Act, 2013 had been followed and there are no material departure from the same;

(ii) Appropriate accounting policies have been selected and these have been applied consistently and that the

judgments and estimates that have been made are reasonable and prudent so as to provide a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(iii) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 to safeguard the assets of the Company and to prevent or detect fraud and other irregularities;

(iv) The annual accounts for the year ended 31st March, 2019 have been prepared on a going concern basis;

(v) Robust and detailed Internal Financial Controls to be followed by the Company have been laid down. These controls are adequate and were operating effectively; and

(vi) Appropriate system has been devised to ensure that your Company is compliant with all applicable provisions and statutory requirements. These systems were adequate and operating effectively.


The company has complied with all applicable secretarial standard during the year.


Pursuant to amendment made in Schedule V to the SEBI Listing Regulations, details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company (on standalone basis) including explanations therefore are given below:

Particular 31.03.2019 31.03.2018
Debtor Turnover Ratio (no. of days) 19.78 22.08
Inventory Turnover (no. of days) 42.78 53.00
Interest coverage Ratio 1.61 1.07
Current Ratio 0.94 0.86
Debt/Equity Ratio 0.39 0.42
Operating Profit margin 1.77% -0.21%
Net Profit Margin 2.47% 0.28%
Return on Networth 4.55% 2.78%


Certain statements in this Boards Report and Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be "forward-looking statements," within the meaning of applicable laws and regulations. Forward-looking statements are identified in this report by using words like "anticipates", "believes", "expects", "intends" and other similar expressions in such statements. Although we believe our expectations are based on reasonable assumptions, these forward-looking statements may be influenced by numerous risks and uncertainties that could cause actual outcomes and results to be materially different from those expressed or implied. Some of these risks and uncertainties have been discussed in the section on "Risk Management". The Company takes no responsibility for any consequence of decisions made, based on such statements, and holds no obligation to update these in the future. Market data and information are gathered from various published and unpublished reports. Their accuracy, reliability and completeness cannot be assured. APPRECIATION & ACKNOWLEDGMENT The Directors thank the Companys employees, customers, vendors, investors and academic partners for their continuous support. The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation. The Directors appreciate and value the contribution made by every member of the RCIL family.


Place: Mumbai (Sanjiv Shroff) (Rahul Shroff)
Date: 9th August, 2019 DIN:00296008 DIN:02301693