rupa & company ltd share price Directors report


for the Financial Year ended March 31, 2023

Dear Shareholders,

Your Directors take pleasure in presenting the 38th Annual Report on the business and operations of the Company, along with the Audited Standalone and Consolidated Financial Statements for the year ended March 31, 2023.

FINANCIAL HIGHLIGHTS

The financial performance of the Company for the year ended March 31, 2023 as compared to previous financial year is summarized below: (Rs. in lakhs)

Particulars

Standalone

Consolidated

2022-23 2021-22 2022-23 2021-22
Revenue from Operations 1,11,744.01 1,42,978.63 1,14,308.03 1,47,525.01
Profit before Finance Costs, Tax, Depreciation/ Amortization 10,423.10 27,723.75 10,512.66 27,876.52
(PBITDA)
Less: Finance Costs 2,263.18 1,814.15 2,263.53 1,815.83
Profit before Tax, Depreciation/Amortization (PBTDA) 8,159.92 25,909.60 8,249.13 26,060.69
Less: Depreciation 1,320.29 1,383.69 1,325.64 1,389.24
Profit before Tax (PBT) 6,839.63 24,525.91 6,923.49 24,671.45
Less: Tax Expense 1,531.02 5,449.91 1,550.31 5,487.36
Net Profit after Tax (PAT) 5,308.61 19,076.00 5,373.18 19,184.09
Other Comprehensive Income 9.66 18.82 8.96 19.58
Total Comprehensive Income for the year 5,318.27 19,094.82 5,382.14 19,203.67

STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK

The Company achieved a standalone turnover of Rs. 1,11,744.01 lakhs and consolidated turnover of Rs. 1,14,308.03 lakhs during the financial year 2022-23 as against Rs. 1,42,978.63 lakhs and Rs. 1,47,525.01 lakhs respectively in 2021-22, registering a de-growth over the last year. Net Profit for the year 2022-23 stood at Rs. 5,308.61 lakhs on standalone basis and Rs. 5,373.18 lakhs on consolidated basis as against Rs. 19,076.00 lakhs and Rs. 19,184.09 lakhs respectively in 2021-22.

This has been one of the most challenging years for the Company and the industry. The impact was seen across the spectrum starting from highest raw material prices in decades to high energy cost in manufacturing. These factors had a significant impact on our gross margin. Consequently, as prices escalated, there was dampening demand, which has led to a significant slowdown in sales. The gradual return to workplace and reducing work from home culture, stunted the growth of the Athleisure segment. Further, our high-margin products and thermal wear witnessed slow demand. These were the major reasons for the downturn in the sales growth. We also compromised on the top line on the primary sales, keeping interest of the long-term financial discipline of the Company, which should pay off the Company in long run. Keeping the tradition of sharing profits with the shareholders, the Board of Directors have recommended a dividend of 300% i.e Rs. 3/- per equity share for the financial year ended March 31, 2023.

The Company is primarily engaged in the manufacturing, marketing, sales and distribution of innerwear, thermal wear and casual wear for men, women and kids segment and serves all sections of the society with its economy, mid-premium, premium and super-premium ranges. The Company has over 18 sub-brands and 9,000 SKUs (Stock Keeping Unit) which includes brands like Frontline, Jon, Macroman, Euro, Bumchums, Torrido, Thermocot, Kidline, Footline and Softline. The Company also has premium brand like Macroman M-Series, Macrowoman W-Series, FCUK and Fruit of the Loom which includes products like innerwear, lingerie, active wear and leisurewear.

Report of the Board of Directors

for the Financial Year ended March 31, 2023

The male innerwear segment contributes significantly to the Companys business in comparison to the female innerwear segment. Womens innerwear has seen increasing momentum in sales and is increasing at a very rapid rate due to factors like rising number of working women, increase in income levels, greater awareness, increasing purchasing power etc. Keeping this in mind, the Company is actively focusing on increasing its presence in the female wear segment. Presently, the Company is catering to female innerwear and loungewear space through its brands Jon and Softline for economy and premium category; and Macrowoman W-Series for super-premium category. Our exports continue to perform well and now contributes almost about 3.71% to our revenue. We have registered an impressive 25% growth year-on-year in exports. Modern trade registered a robust growth of 32% and contributed Rs. 51 crores towards overall top line. In order to nurture its brands, the Company has been consistently involved in robust advertisement and brand promotion activities and have engaged leading celebrities including Ranveer Singh, Kiara Advani, Kartik Aaryan, Ranbir Kapoor, Naveen Kumar Gowda (Yash) and Khesari Lal Yadav for endorsement of its products. This increased spend will go a long way in connecting with our customers and potential target demography, thus strengthening our brand equity.

The Company has a large distribution network consisting of 4 central warehouses, 28 EBOs (Exclusive Brand Outlets), more than 1,500 dealers and access to 1,50,000 retailers. The Company is enhancing its availability through presence in e-commerce, MBOs (Multi-Brand Outlets) and LFRs (Large Format Retail Stores). The Company has tied-up with leading online/ offline stores in this regard and is aggressively focusing on expanding e-commerce and EBO business. The Company is also expanding in new international geographies in its export business.

The Company remains focused on enhancing operational efficiency, expanding market reach, and capitalizing on emerging opportunities to drive sustainable growth and create long-term value for the stakeholders.

SUBSIDIARIES

The Company has following 5 (five) Wholly-owned Subsidiaries as on March 31, 2023:

(i) Euro Fashion Inners International Private Limited, which was earlier engaged in selling hosiery premium products under the brand name "EURO", has transferred its Business Operations to the Company through a Business Collaboration Agreement effective from April 1, 2014 and gets royalty from the Company for using the brand EURO in its business.

During the Financial Year under review, the Revenue from Operations, including Other Income, was Rs. 22.76 lakhs, as against Rs. 17.55 lakhs during the previous year. Net Profit during the year was Rs. 12.81 lakhs, as compared to Rs. 5.35 lakhs, during the previous year.

(ii) Imoogi Fashions Private Limited is engaged in manufacturing, processing and selling of premium category hosiery and casual wear products for female and kids segments under the brand name "Femmora". During the Financial Year under review, the Revenue from Operations, including Other Income, was Rs. 586.21 lakhs, as against Rs. 389.48 lakhs during the previous year. Net Profit during the year was Rs. 17.81 lakhs, as compared to Rs. 11.06 lakhs, during the previous year.

(iii) Oban Fashions Private Limited is engaged in the business of trading of Yarn.

During the Financial Year under review, the Revenue from Operations, including Other Income was Rs. 2,368.43 lakhs, as against Rs. 4,449.54 lakhs, during the previous year. Net Profit during the year was Rs. 34.70 lakhs, as compared to loss of Rs. 92.31 lakhs, during the previous year.

(iv) Rupa Fashions Private Limited was incorporated as Wholly-owned Subsidiary of the Company, with the object, inter alia, to be engaged in manufacturing and trading activities.

During the Financial Year under review, there was no Revenue from Operations and the Net Loss during the year under review was Rs. 0.38 lakhs, as against Rs. 0.39 lakhs in the previous year. for the Financial Year ended March 31, 2023

(v) Rupa Bangladesh Private Limited, was incorporated as Wholly-owned Subsidiary of the Company in Dhaka, Bangladesh, with the object, inter alia, to be engaged in manufacturing activities, in Bangladesh.

During the Financial Year under review, there was no Revenue from Operations and the Net Loss during the year under review was Rs. 0.39 lakhs, as against Rs. 0.22 lakhs in the previous year.

None of the above mentioned subsidiaries are ‘Material Subsidiary in terms of Regulation 16(1)(c) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘Listing Regulations). The statement in Form AOC-1 containing the salient features of the aforesaid subsidiaries has been separately annexed hereto, in terms of the first proviso to the Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014. Further, the contribution of these subsidiaries to the overall performance of the Company are provided under the Notes to the Consolidated Financial Statements. The Audited Standalone & Consolidated Financial Statements of the Company and other related information/documents along with the Audited Accounts of the Companys Subsidiaries are available on the website of the Company at https://rupa.co.in/financial-information/ The Annual Accounts of the Subsidiaries and the related information shall be made available to the Members of the Company, seeking such information at any point of time. The Members may request for such information by writing to the Company Secretary at the registered office of the Company. Further, the copies of the Annual Accounts of the subsidiaries shall remain open for inspection by the Members at the Companys registered office.

During the year under review, no company became or ceased to be a subsidiary, joint venture or associate of your Company.

CHANGE(S) IN THE NATURE OF BUSINESS

During the year under review, there has been no change in the nature of the business of the Company.

CAPITAL STRUCTURE & CHANGES IN SHARE CAPITAL

During the year under review, there were no change in the Share Capital of the Company. Further the Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company have occurred from the close of the financial year ended March 31, 2023 and till the date of this report.

SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

During the year under review, no significant and material orders were passed by the Regulators or Courts or Tribunals which may impact the going concern status of the Company or its future operations.

DIVIDEND

The Dividend Distribution Policy of the Company, drafted in accordance with the provisions of Regulation 43A of the Listing Regulations lays down various parameters to be considered by the Board before declaration/recommendation of dividend to the members of the Company. The Policy is available at https://rupa.co.in/livesite/wp-content/uploads/2022/08/ Dividend_Distribution_Policy.pdf The Directors are pleased to recommend a final dividend of 300% i.e Rs. 3/- (Rupees Three only) per equity share of Rs. 1/- (Rupees One only) each for the financial year ended March 31, 2023. The final dividend on the equity shares, if approved by the members as above, would involve an outflow of Rs. 2,385.74 lakhs towards dividend.

TRANSFER OF UNPAID/ UNCLAIMED DIVIDEND AND EQUITY SHARES TO THE IEPF AUTHORITY

During the year ended March 31, 2023, the Company has transferred unclaimed and unpaid dividend w.r.t. Financial Year 2014-15, amounting to Rs. 2,29,023/- (Rupees Two Lakh Twenty Nine Thousand Twenty Three only), to the Investor Education and Protection Fund (IEPF) as set up by the Central Government. Further, 1,980 Equity Shares of Rs. 1/- each, held by two shareholders, whose dividends have remained unpaid or unclaimed for a period of seven consecutive years or more, has been transferred to the demat account of the IEPF Authority.

Shareholders are requested to kindly check the status of their unpaid or unclaimed dividend, available at the website of the Company at https://rupa.co.in/unclaimed-dividend-iepf/.

TRANSFER TO RESERVES

No amount is proposed to be transferred to General Reserve during the financial year 2022-23.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Composition

As on March 31, 2023, the Board of Directors of the Company comprised of 14 (fourteen) Directors, viz. 7 (seven) Non Executive Independent Directors including a Woman Director and 7 (seven) Executive Directors. The position of the Chairman of the Board and the Managing Director are held by separate individuals, wherein the Chairman of the Board is an Executive Director. The profile of all the Directors can be accessed on the Companys website at https://rupa.co.in/board-members/.

None of the Directors of the Company have incurred any disqualification under Section 164(1) & 164(2) of the Companies Act, 2013 (Act). Further, all the Directors have confirmed that they are not debarred from accessing the capital market as well as from holding the office of Director pursuant to any order of Securities and Exchange Board of India or Ministry of Corporate Affairs or any other such regulatory authority.

In the view of the Board, all the directors possess the requisite skills, expertise, integrity, competence, as well as experience considered to be vital for business growth. The detailed analysis of various skills, qualifications and attributes as required and available with the Board has been presented in the Corporate Governance Report.

Changes in Board and KMP Composition

Mr. Vikash Agarwal (DIN: 00230728) was appointed as the Additional Director (Whole-time) and Mr. Sunil Rewachand Chandiramani (DIN: 00524035) was appointed as the Additional Director (Independent) of the Company, by the Board of Directors at their meeting held on May 23, 2022, for a period of five (5) years and the said appointments were approved by the Members at the Annual General Meeting held on August 17, 2022.

Further, Mr. Niraj Kabra (DIN: 08067989) was re-appointed as the Executive Director of the Company, by the Board of Directors at their meeting held on May 23, 2022, for a period of five (5) years, effective from February 12, 2023 and the said re-appointment was approved by the Members at the Annual General Meeting held on August 17, 2022.

With effect from the end of business hours of May 31, 2022, Mr. Ramesh Agarwal (DIN: 00230702), relinquished his position as the Chief Financial Officer of the Company and continued to be the Whole-time Director of the Company. Mr. Sumit Khowala was appointed as the Chief Financial Officer of the Company w.e.f June 1, 2022.

Mr. Dinesh Kumar Lodha, ceased to be the Chief Executive Officer of the Company w.e.f the end of business hours of May 31, 2022, upon his resignation.

Director liable to retire by rotation

As per the provisions of Section 152(6)(d) of the Act read with Companies (Appointment and Qualification of Directors) Rules, 2014 and Articles of Association of the Company, Mr. Prahlad Rai Agarwala (DIN: 00847452), Whole-time Director (Chairman) and Mr. Niraj Kabra (DIN: 08067989), Whole-time Director will retire by rotation at the ensuing Annual General Meeting and being eligible has offered themselves for re-appointment.

Reappointment of Independent Director

Mr. Ashok Bhandari (DIN: 00012210) was appointed as an Independent Director of the Company w.e.f. August 10, 2018 for a term of five years. His office of directorship is due for retirement on August 09, 2023. Based on the recommendation of the Nomination and Remuneration Committee and after taking into account the performance evaluation, his knowledge, expertise, experience and the substantial contribution made by him, the Board at its meeting held on May 24, 2023, has approved the re-appointment of Mr. Bhandari as an Independent Director of the Company for a second term of five years with effect from August 10, 2023, subject to the approval of the members at the ensuing Annual General meeting of the Company. The Board recommends the re-appointment to the shareholders.

Information regarding the directors seeking appointment/re-appointment as required by Regulation 36 of the Listing Regulations and Secretarial Standard-2 has been given in the notice convening the ensuing Annual General Meeting.

Declaration Given by the Independent Directors

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149 of the Act as well as Regulation 16 and 25 of Listing Regulations. The Independent Directors have also submitted a declaration confirming that they have registered their names in the databank of Independent Directors as being maintained by the Indian Institute of Corporate Affairs (IICA) in terms of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

None of the Independent Directors are aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Board of Directors have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the same and in their opinion the Independent Directors are persons of integrity, expertise and experience and fulfill the conditions specified in the Act and Listing Regulations and are independent of the management.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act along with the Code of Conduct for Directors and Senior Management Personnel formulated by the Company as per Listing Regulations.

Board Diversity

The Company recognizes and embraces the benefits of having a diverse Board that possesses a balance of skills, experience, expertise and diversity of perspectives, appropriate to the requirements of the businesses of the Company. The Board has adopted the Board Diversity Policy which sets out the approach to diversity. The policy is available at the website of the Company at https://rupa.co.in/livesite/wp-content/uploads/2022/08/Policy_on_Board_Diversity-1.pdf

PERFORMANCE EVALUATION OF THE BOARD, THE COMMITTEES AND THE INDIVIDUAL DIRECTORS

Pursuant to the provisions of Section 178 of the Act and the Listing Regulations, the Nomination and Remuneration Committee has laid down the criteria for performance evaluation on the basis of which the Board has carried out evaluation of its own performance, the performance of Board Committees and of the Directors individually.

The Independent Directors of the Company, at their separate meeting held on March 13, 2023, have reviewed the performance of Non-Independent Directors, the Board as a whole and also the performance of the Chairperson of the Company. The review of performance of Non-Independent Directors was done, on various parameters, such as skill, competence, experience, degree of engagement, ideas & planning, leadership qualities, attendance at meetings etc. The Boards performance was reviewed on various parameters, such as adequacy of the composition of the Board, Board culture, appropriateness of qualification & expertise of Board members, inter-personal skills, ability to act proactively, managing conflicts and crisis situations, roles and responsibilities of Board members, appropriate utilization of talents etc. The evaluation of performance of the Chairperson of the Company was conducted on various parameters, such as leadership quality, capability, availability, clarity of understanding, ability to encourage deliberations, degree of contribution, etc.

The Nomination and Remuneration Committee of the Board, based on the report of the Independent Directors, evaluated the performance of the Non-Independent Directors. The said Committee members also evaluated the performance of the Independent Directors of the Company, based on the reports of the Executive Directors, considering their requisite skills, competence, experience, knowledge of the regulatory requirements etc.

The Board of Directors of the Company, based on the report of the Independent Directors and the Nomination and Remuneration Committee, evaluated its own performance, the performance of Board Committees and of the Directors individually. The Board carried out the evaluation of performance of its Committees on various parameters, such as adequacy of meetings in enhancing the effectiveness of the Committee, existence of a defined set of objectives/ terms of reference, etc. The result of evaluation of performance of Board, its Committees and of individual Directors were found to be satisfactory.

COMPANYS POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT PERSONNEL

On the recommendation of Nomination and Remuneration Committee, the Company has formulated and adopted a Nomination and Remuneration Policy which is in accordance with the Act and the Listing Regulations.

The Nomination and Remuneration Policy of the Company has been designed with the following basic objectives: a. to set out a policy relating to appointment and remuneration of Directors, Key Managerial Personnels and other employees of the Company; b. to ensure that the Company is able to attract, develop and retain high-performing and motivated Executives in a competitive international market; c. to ensure that the Executives are offered a competitive and market aligned remuneration package, with fixed salaries being a significant remuneration component, as permissible under the Applicable Law; d. to ensure that the remuneration of the Executives are aligned with the Companys business strategies, values, key priorities and goals; e. setting up the Board Diversity Criteria.

The remuneration paid to the directors is as per the terms laid out in the Nomination and Remuneration Policy of the Company.

The Policy is available on the website of the Company at https://rupa.co.in/livesite/wp-content/uploads/2022/08/ Remuneration-Policy.pdf

DIRECTORS RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanations obtained by us, we hereby make the following statements in terms of Section 134(3)(c) and 134(5) of the Act: (i) in the preparation of the Annual Accounts for the financial year ended March 31, 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any; (ii) such accounting policies as mentioned in Notes to the Annual Accounts have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date; (iii) proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities has been taken; (iv) the Annual Accounts has been prepared on a going concern basis; (v) internal financial control to be followed by the Company are in place and that such internal financial controls are adequate and are operating effectively; and (vi) proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems were adequate and operating effectively.

MEETINGS OF BOARD OF DIRECTORS

The Board met 4 (four) times during the Financial Year 2022-23, viz., on May 23, 2022, August 12, 2022, November 11, 2022 and February 10, 2023. The details relating to attendance of Directors in each board meeting held during the financial year 2022-23 has been separately provided in the Corporate Governance Report.

COMMITTEES OF THE BOARD

The Board of Directors have constituted 6 (six) Committees viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Risk Management Committee and Operations Committee to deal with specific areas/activities that need a closer review and to have an appropriate structure for discharging its responsibilities.

The composition, terms of reference, attendance of directors at the meetings of all the above Committees has been disclosed in the Corporate Governance Report.

There has been no instance where the Board has not accepted any of the recommendations of the Audit Committee.

CORPORATE SOCIAL RESPONSIBILITY

The Company recognizes the value of being a socially responsible corporate and strongly believes in giving back to the society. The objective of the Companys Corporate Social Responsibility (CSR) is to improve the quality of life of communities through long-term value creation. In this regard the Company has formulated a Corporate Social Responsibility Policy which can be accessed at https://rupa.co.in/livesite/wp-content/uploads/2022/08/Corporate_Social_Responsibility-1. pdf.

The Company has constituted a CSR Committee, in terms of provisions of Section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014, inter alia to give directions and assistance to the Board for leading the CSR initiatives of the Company. The Committee formulates and reviews the Annual Action Plan and also monitors the progress of the CSR activities. The details of the Committee including term of reference have been disclosed in the Corporate Governance Report. During the year, the Company has undertaken several CSR activities in accordance with the Annual Action Plan laid down by the Board and has spent Rs. 390.89 lakhs towards CSR activities. Since there was no unspent amount, the Company was not required to transfer any amount to the fund or separate bank account during the year, in accordance with the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company during the financial year ended March 31, 2023, in accordance with Section 135 of the Act and Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out in "Annexure-1" to this report.

RISK MANAGEMENT

Risks are events, situations or circumstances which may lead to negative consequences on the Companys businesses. Risk management is a structured approach to manage uncertainty and is embedded in the Companys operating framework. The Company has a Risk Management Policy which lays down the framework for identification and mitigation of various risks. The specific objectives of this Policy is to have a well-defined approach towards risk and to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified and appropriately managed and mitigated.

The Risk Management Framework emphasises proper analysing and understanding the underlying risks before undertaking any transaction. This enables a proper assessment of all risks and ensures that the transactions and processes conform to the Companys risk appetite and regulatory requirements. The Risk Management Framework is reviewed periodically by the Audit Committee and Risk Management Committee of the Board of Directors. In the opinion of the Board of Directors, there are no existing factors which may threaten the existence of the Company.

INTERNAL FINANCIAL CONTROL

The Company has an adequate system of internal financial controls commensurate with its size and scale of operations to ensure a smooth functioning of its business. Further the Company adheres to the procedures and policies and ensures orderly and efficient conduct of its business, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information.

It is also ensured that all the assets of the Company are safeguarded and protected against loss and all transactions are authorized, recorded and reported correctly. The Internal Financial Control systems of the Company are monitored, evaluated and reviewed by the Audit Committee.

The Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively. In this regard, the Board confirms the following: i) Systems have been laid to ensure that all transactions are executed in accordance with managements general and specific authorization; ii) Systems and procedures exist to ensure that all transactions are recorded, as necessary to permit preparation of Financial Statements and to maintain accountability and the timely preparation of reliable financial information; iii) Access to assets is permitted only in accordance with managements general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted; iv) The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to differences, if any; and v) Proper systems are in place for prevention and detection of frauds and errors and for ensuring adherence to the Companys policies.

Further, the certificate from Managing Director and Chief Financial Officer, in terms of Regulation 17(8) of the Listing Regulations, provided in this Annual Report, also certifies the adequacy of the Companys Internal Control systems and procedures. Necessary certification by the Statutory Auditors in relation to Internal Financial Control u/s 143(3)(i) of the Act forms part of the Audit Report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism and a Whistle-blower policy in accordance with the provisions of Section 177 of the Act and Regulation 22 of the Listing Regulations with an objective to provide an avenue for the Directors and employees to report actual or suspected violations of applicable laws, regulations and the Code of Conduct.

The mechanism also provides for adequate safeguards against victimization of Director(s) or employee(s) or any other person for availing the mechanism and in exceptional cases, direct access to the Chairman of the Audit Committee to report instances of fraud/ misconduct is provided. The Audit Committee looks into the complaints raised, if any, and their redressal. During the year under review, the Company did not receive any complaint under the policy. The Whistle Blower Policy of the Company, is available on the website of the Company, at the link https://rupa.co.in/livesite/wp-content/ uploads/2022/08/Whistle_Blower_Policy.pdf.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Act and the Listing Regulations, the Company has formulated a Policy on dealing with Related Party Transactions (‘RPT) and the same is available on the website of the Company at: https://rupa.co.in/livesite/wp-content/uploads/2022/08/Policy_on_Related_Party_Transactions.pdf.

The Policy intends to ensure that proper approval, reporting and disclosure processes are in place for all the transactions taking place between the Company and Related Parties.

All contracts/ arrangements/ transactions entered by the Company during the Financial Year 2022-23, with its related parties, were on an arms length basis and had prior approval of the Audit Committee, as required under the Listing Regulations. All related party transactions are reviewed on a quarterly basis by the Audit Committee. There were no materially significant related party transactions entered into by the Company which may have potential conflict with the interest of the Company. Further, during the Financial Year, the Company has not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the Companys policy except those provided in Form AOC-2, annexed hereto, marked as ‘Annexure – 2. Further, suitable disclosure as required by the Accounting Standards has been made in the Notes to the Financial Statements. In terms of Regulation 34(3) read with Part A of Schedule V to the Listing Regulations, the details of the transactions entered into by the Company with promoter/ promoter group, which hold(s) 10% or more shareholding in the Company, are as hereunder:

Name of the Person % of shares held in the Company Nature of relationship Nature of transaction Amount (Rs.)
Ullas Sales Promotion LLP (formerly known as Ullas Sales Promotion Limited) 27.20% Enterprises owned or Dividend 6,48,92,580
Mr. Prahlad Rai Agarwala, jointly with Mr. Ghanshyam Prasad Agarwala and Mr. Kunj Bihari Agarwal, on behalf of a partnership firm, M/s Binod Hosiery 21.08% significantly influenced by key management personnel or their relatives Dividend 5,02,90,968

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The loan and guarantee given by the Company are within the limits prescribed under Section 186 of the Act. Further, the details of the said loan given, guarantee given and investment made are provided in the Notes to the Financial Statements of the Company.

The related party disclosures with respect to loans/ advances at the end of the Financial Year under review and maximum outstanding amount thereof during the year, as required under Part A of Schedule V to the Listing Regulations, have been provided in the Notes to the Financial Statements of the Company.

PARTICULARS OF EMPLOYEES

The disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as "Annexure- 3" to this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated in Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is provided in "Annexure – 4" to this Report.

AUDITORS & AUDIT REPORTS

Statutory Auditors and Auditors Report

In compliance with Section 139 of the Companies Act, 2013 read with Rules made thereunder, M/s. Singhi & Co. (Firm Registration Number: 302049E), Chartered Accountants, were re-appointed as the Statutory Auditor of the Company, for a second term of 5 (five) consecutive years at the 37th Annual General Meeting (AGM) held on August 17, 2022, to hold office from the conclusion of the said meeting till the conclusion of the 42nd AGM to be held in the year 2027.

The Auditors Report on the Standalone and Consolidated financial statements of the Company for the year ended March 31, 2023 forms part of this Annual Report and there are no qualifications, reservation, adverse remark or disclaimer made by the Statutory Auditors in their report.

Internal Auditors

In accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, M/s. Das & Prasad, Chartered Accountants, conducted the Internal Audit of the Company for the Financial Year 2022-23. The Audit Committee considers and reviews the Internal Audit Report submitted by the Internal Auditor on a quarterly basis. The Board of Directors on recommendation of the Audit Committee at its meeting held on February 10, 2023, have appointed M/s SS Kothari Mehta & Company, Chartered Accountants as the Internal Auditors of the Company for the financial year 2023-24.

Secretarial Auditors 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, M/s. Nidhi Bagri & Company (COP: 9590), Practicing Company Secretary, was reappointed as the Secretarial Auditor of the Company for the Financial Year 2022-23. The Secretarial Audit Report in Form MR-3, for the Financial Year 2022-23, is annexed hereto and marked as ‘Annexure – 5. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Audit and Cost Records

The provisions of Section 148 of the Companies Act, 2013, with respect to maintenance of Cost records and Cost Audit are not applicable on the Company.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, none of the auditors have reported any instances of fraud committed against the Company as required to be reported under Section 143 (12) of the Act.

ANNUAL RETURN

The Annual Return of the Company, for the Financial Year ended March 31, 2023, pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at https://rupa.co.in/annual-returnmgt-7/.

CREDIT RATING

CRISIL Limited (CRISIL) has reaffirmed the credit rating of your Company for long term facilities as CRISIL AA-/Stable and for short term facilities and Commercial Paper as CRISIL A1+. Details of the same are provided in the Corporate Governance Report.

DEPOSITS

During the year under review, the Company has not accepted any deposits from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. As on March 31, 2023, there were no deposits lying unpaid or unclaimed.

CORPORATE GOVERNANCE REPORT

The Corporate Governance Report, in terms of Regulation 34(3), read with Schedule V, of the Listing Regulations, forms part of this Annual Report. The Company has obtained a certificate from the Statutory Auditors of the Company, M/s. Singhi & Co., Chartered Accountants, confirming compliance with the same.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report for the year under review as stipulated under Regulation 34, read with Schedule V of the Listing Regulations, forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to amended Regulation 34 (2) (f) of Listing Regulations, the top 1000 listed companies are required to prepare a Business Responsibility and Sustainability Report describing the initiatives taken by the Company from an Environmental, Social and Governance (ESG) perspective. The Company has accordingly prepared a Business Responsibility and Sustainability Report as set out in "Annexure–6" to this Report. The same is also uploaded on the website of the Company at https://rupa.co.in/business-responsibility-report/.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the Financial Year 2022-23, the Company has complied with the applicable Secretarial Standards i.e. SS-1 and SS-2, as issued by the Institute of Company Secretaries of India (ICSI).

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Employees are the most valuable and indispensable asset for a Company. A Companys success depends on the ability to attract, develop and retain best talent at every level. The Company has always been proactive in providing growth, learning platforms, safe workplace and personal development opportunities to its workforce. Company strives to maintain a skilled and dedicated workforce, representing diverse experiences and viewpoints. The Human Resource department of the Company are rooted in ensuring a fair and reasonable process for all-round development and upliftment of talent through its persistent effort.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company is committed to provide a safe and conducive work environment to its employees and has formulated ‘Policy for Prevention of Sexual Harassment to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the redressal of complaints pertaining to sexual harassment. Further, the Company has complied with the provisions relating to constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, no cases were filed under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

GENERAL DISCLOSURES

Your Directors state that:

i) The Company does not have any Employee Stock Option Plan.

ii) Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

iii) No proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

iv) The Company serviced all the debts & financial commitments as and when they became due and no settlements were entered into with the bankers.

ACKNOWLEDGEMENT

The Board of Directors place on record its deep sense of appreciation for the significant contribution made by all the employees through their dedication, hard work and commitment at all levels throughout the year. The Board conveys its appreciation towards its customers, stakeholders, suppliers, vendors, bankers, financial institutions, business associates, regulatory and government authorities both at the Central and State level for their continued support and co-operation.

For and on behalf of the Board of Directors

Prahlad Rai Agarwala
Place: Kolkata

Chairman

Date: May 24, 2023

DIN: 00847452

Annexures forming part of this Report of the Directors

Annexure Particulars
1 Annual Report on CSR Activities
2 Particulars of Contracts or Arrangements with Related Parties in Form AOC-2
3 Particulars of Employees
4 Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo
5 Secretarial Audit Report
6 Business Responsibility & Sustainability Report