Rupa & Company Ltd Directors Report.
The Directors have pleasure in presenting their 34th Annual Report on the business and operations of the Company, along with the Audited Accounts of the Company, for the Financial Year ended March 31, 2019.
The financial performance of the Company is summarized hereunder:
|Standalone Financial Review||(Rs. in Lakhs)|
|Revenue from Operations||1,10,824.10||1,08,975.57|
|Profit before Finance Costs, Tax, Depreciation/ Amortization (PBITDA)||17,530.65||16,945.62|
|Less: Finance Costs||1,672.75||759.18|
|Profit before Tax, Depreciation/Amortization (PBTDA)||15,857.90||16,186.44|
|Profit before Tax (PBT)||14,540.50||14,745.26|
|Less: Tax Expense||5,203.12||5,283.83|
|Net Profit after Tax (PAT)||9,337.38||9,461.43|
|Other Comprehensive Income||1.28||(13.20)|
|Total Comprehensive Income for the year||9,338.66||9,448.23|
|Consolidated Financial Review|
|Revenue from Operations||1,15,470.13||1,12,036.86|
|Profit before Finance Costs, Tax, Depreciation/ Amortization (PBITDA)||15,304.22||15,791.65|
|Less: Finance Costs||1,855.25||810.49|
|Profit before Depreciation/Amortization (PBTDA)||13,448.97||14,981.16|
|Profit before Tax (PBT)||11,947.80||13,402.51|
|Less: Tax Expense||4,530.02||4,779.52|
|Net Profit after Tax (PAT)||7,417.78||8,622.99|
|Other Comprehensive Income||4.29||(12.52)|
|Total Comprehensive Income for the year||7,422.07||8,610.47|
State of Companys Affairs and Future Outlook
The Company achieved a Turnover of Rs. 1,10,824.10 lacs during the Financial Year 2018-19, as against Rs. 1,08,975.57 lakhs in 2017-18, i.e., registering a growth of 1.70% over the last year. During the year, the Profit before Finance Charges, Depreciation and Tax stood at Rs. 17,530.65 lakhs, as against Rs. 16,945.62 lakhs during the previous year, an increase of 3.45% in comparison to previous year. The Net Profit for the year 2018-19 stood at Rs. 9,337.38 lakhs, as compared to Rs. 9,461.43 lakhs, during the previous year. Financial Year 2018-19 was very challenging, where the market faced liquidity stress which impacted working capital cycle resulting in higher finance cost and pressure on margin. However, the Company continued to maintain its credit policy to mitigate exposure to higher credit risk. In order to address the credit risk issue the Company is contemplating to extend easy financial solution to dealers which shall help them overcome liquidity stress in the market in general. Gradually, the Company is also moving some part of wholesale business to retailing business but the cycle to change over may take some time. Due to the transition in short term we are seeing some challenges in revenue but in long run this will be rewarding.
On consolidated basis, the Turnover for the year 2018-19 was Rs. 1,15,470.13 lakhs, as against Rs. 1,12,036.86 lakhs in 2017-18. The Profit before Finance Charges, Depreciation and Tax stood at Rs. 15,304.22 lakhs during 2018-19, as against Rs. 15,791.65 lakhs during the previous year and the Net Profit for the year 2018-19 stood at Rs. 7,417.78 lakhs, as compared to Rs. 8,622.99 lakhs, during the previous year. The decrease in profit on consolidated basis was mainly due to loss in Oban Fashions Private Limited, Wholly-owned Subsidiary of the Company. In Oban, we are investing in brand building including modern trade and e-commerce, which has a long break-even point but very critical for the business, and been very good traction in modern trade including e-commerce and we are confident that this will give a good result in future.
The Company is engaged in the Manufacturing, Branding, Marketing and Sell of Mens and Womens Innerwear, Thermal wear and Casual wear for all sections of the society, like, Economy, Mid-Premium, Premium and Super-Premium. It has over 18 sub-brands and 8000 SKUs (Stock Keeping Unit), having a strong brand recall. In order to nurture its brands, the Company has been consistently involved in robust advertisement and brand promotion activities, thereby spending extensively on brand communication. In innerwear industry, the Company is a leader having a distribution network across India. The Company has a PAN-India presence with a large distribution network consisting of 4 central warehouses, 10 EBOs (Exclusive Brand Outlets), more than 1000 dealers and 1,25,000 retailers. It is also looking at enhancing availability through presence in e-commerce, MBOs (Multi-Brand Outlets) and LFRs (Large Format Retail Stores). The Company is also looking forward to open Rupa EBOs through the franchisee route across India and expand its retail footprint.
The Company has manufacturing facilities situated at Howrah Domjur, Tirupur, Bengaluru and Ghaziabad. The Company has sales offices situated at Kolkata, Patna, Mumbai, Delhi, Ghaziabad, Bengaluru and Tirupur. The Company follows efficient business strategy by outsourcing low end and labour intensive work and utilizes its resources on key areas involving value addition, product differentiation, branding and distribution.
The Company caters to all segment including men, women and kid segment with its wide bouquet of brands. The various sub-brands of the Company includes, Frontline, Jon, Air, Macroman, Euro, Bumchums, Torrido, Thermocot, Kidline, Footline, Softline, etc., catering to various segments, under its umbrella brand Rupa. The brands are endorsed by leading celebrities including Ranveer Singh, Sidharth Malhotra and Anushka Sharma. The Company has also premium brand, Macroman M-Series, which is being endorsed by youth icon, Ranbir Kapoor, and the premium brand under Female segment, Macroman W-Series containing products like, lingerie, active wear and leisurewear.
Rupa through its Wholly-owned Subsidiary, Oban Fashions Private Limited, has acquired an exclusive license for the brand FCUK and the brand Fruit of the Loom, to manufacture, market and sale of innerwear and other products in India. The FCUK and FOTL products has been launched at different locations in India. Going forward, these brands are expected to further strengthen and cement its position in the super-premium segment.
The male innerwear segment contributes significantly to the Companys business in comparison to the female innerwear segment. Presently, the Company is catering to female innerwear and loungewear space through its brands Jon, Softline and Macrowoman W Series. The Company is continuously striving at strengthening its female innerwear segment, as well and is open to grow in this segment through inorganic route also in domestic market.
The Company believes in the overall growth of its innerwear, thermal wear and casual wear business across India through its innovative designs, superior product quality, ability to create a sustainable business model, initiatives to nurture the in-house talent and the zeal towards the healthy creation of stakeholders value. To overcome the various economical challenges, the Company, from time to time, revisits its marketing strategies. The Company has always been responsive towards the changing fashion needs by introducing new line of products across all segments.
The Company is focusing on enhancing its product offering in the children and womens segment with the introduction of new products and brands. The Company is also looking to foray into the womens lingerie segment and is looking for a tie-up for the same. Both the children and womens segment have a lower presence of organized players and hence, provide a huge opportunity for the Company. The Indian innerwear market is shifting from a price sensitive market to a fashion quotient market. Accordingly, the group is gradually increasing its presence in the premium segment with direct and indirect strategic tie-ups with foreign brands.
The Company has the following 3 (three) Wholly-owned Subsidiaries as on March 31, 2019:
(i) Euro Fashion Inners International Private Limited, which was earlier engaged in selling hosiery premium products under the brand name "EURO", designed for the fashion conscious consumers, has transferred its Business Operations to its Holding Company through a Business Collaboration Agreement effective from April 1, 2014.
During the year under review, the Revenue from Operations, including Other Income, was Rs. 17.82/- lacs, as against Rs. 26.54 lacs during the previous year. Net profit during the year was Rs. 8.35 lacs, as compared to Net profit of Rs. 20.48 lacs, during the previous year.
(ii) Imoogi Fashions Private Limited, which is engaged in manufacturing, processing and selling hosiery and outer casual wear products, of premium category 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. 388.97 lacs, as against Rs. 400.70 lacs during the previous year. Net Profit during the year was Rs. 35.45 lacs, as compared to Rs. 34.99 lacs, during the previous year.
(iii) Oban Fashions Private Limited, has been incorporated with the object, inter alia, to operate Indian business of international brands managed under licensing/ franchise/ joint venture/ ownership arrangements, etc.
Oban Fashions Private Limited, during the Financial Year 2016-17, has acquired the brand "FCUK" from the French Connection Limited, and the brand "Fruit of the Loom" from Fruit of the Loom, Inc, a New York Corporation, being a Wholly-owned Subsidiary of Berkshire Hathaway Company, to develop, manufacture, market and sale of the innerwear and related products under the respective brand names, in India.
During the Financial Year under review, the Revenue from Operations, including Other Income was Rs. 3,969.57 lacs, as against Rs. 2,955.31 lacs, during the previous year. Net loss during the year was Rs. 1,963.40 lacs, as compared to Rs. 893.91 lacs, during the previous year.
In terms of Regulation 24 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the above subsidiaries are not material subsidiaries.
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 Companies Act, 2013, including any subsequent amendment thereto (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 is provided under the Notes to the Consolidated Financial Statements. The Audited Financial Statements, together with the Consolidated Financial Statements of the Company and other related information, and the Audited Accounts of the Companys subsidiaries are available on the website of the Company at www.rupa.co.in.
The Annual Accounts of the subsidiaries and the related detailed 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. The copies of the Annual Accounts of the subsidiaries remain open for inspection by the Members at the Companys registered office.
Except as stated hereinabove, the Company did not have any other subsidiary, joint venture or associate company, during the year under review.
Change(s) in the Nature of Business
During the year under review, there was no change in the nature of the business of the Company.
For the Financial Year 2018-19, the Board of Directors of the Company has recommended a Final Dividend, for consideration of the Shareholders of the Company at the ensuing Annual General Meeting (AGM), @ 300%, i.e., Rs. 3 per share, for 7,95,24,560 equity shares of Rs. 1/- each, amounting to Rs. 23,85,73,680/- (Rupees Twenty Three Crore Eighty Five Lacs Seventy Three Thousand Six Hundred and Eighty Only). The dividend payout is in accordance with the Companys Dividend Distribution Policy.
The Dividend Distribution Policy of the Company, adopted by the Board of Directors of the Company, pursuant to Regulation 43A of the SEBI Listing Regulations, as amended, is available on the website of the Company and also annexed hereto, marked as Annexure - I.
Transfer of Shares and unclaimed dividend to IEPF
During the year ended March 31, 2019, the Company has transferred unclaimed and unpaid dividend for the Financial Year 2010-11, amounting to Rs. 1,59,255/- (Rupees One Lakh Fifty Nine Thousand Two Hundred Fifty Five only), to the IEPF. During the year ended March 31, 2019, 21 Equity Shares of 1/- each, held by 3 (Three) shareholders, in aggregate, whose dividends have remained unpaid or unclaimed for a period of 7 (Seven) consecutive years or more, as on the due date, have been transferred to the IEPF Demat Account, within the due date.
Demat Suspense Account / Unclaimed Suspense Account
There were no shares underlying in the demat suspense account or unclaimed suspense account.
Transfer to Reserves
The Board is not proposing to transfer any amount to the General Reserves of the Company.
Changes in Share Capital
During the year under review, there were no changes in the Share Capital of the Company.
Crisil Limited, the Credit Rating Agency, has assigned the credit ratings CRISIL AA-/Stable and CRISIL A1+ for the long term and short term debt instruments/facilities of the Company, respectively. The details of the rating assigned by the Credit Rating Agency has been disclosed in the Corporate Governance Report, which forms part of this Annual Report.
Directors and Key Managerial Personnel
Details of Directors and Key Managerial Personnel (KMP) appointed, re-appointed or resigned during the year are as below:
|Name||Date of Appointment/ Re-appointment/ Resignation|
|Mr. Satya Brata Ganguly||Resigned from the post of Independent Director, with effect from July 3, 2018|
|Mr. Ashok Bhandari||Appointed as an Independent Director, with effect from August 10, 2018|
|Mr. Ghanshyam Prasad Agarwala||Director retire by rotation, reappointed at the AGM on August 31, 2018|
|Mr. Ramesh Agarwal||Director retire by rotation, reappointed at the AGM on August 31, 2018|
|Mr. Dinesh Kumar Lodha||Appointed as Chief Executive Officer (KMP), with effect from February 25, 2019, at the Board Meeting held on February 8, 2019|
Pursuant to the provisions of the Companies Act, 2013 (the Act), the Members of the Company, at the 29th AGM held on September 11, 2014 had approved the appointment of Mr. Vinod Kumar Kothari, Mr. Dipak Kumar Banerjee, Mr. Sushil Patwari and Mr. Dharam Chand Jain, as an Independent Director of the Company, to hold office for 5 (Five) consecutive years up to the date of this ensuing AGM. Further, the appointment of Mrs. Alka Devi Bangur, as an Independent Director of the Company, for a period of 5 (Five) consecutive years, w.e.f. November 14, 2014, was approved at the AGM held on September 15, 2015. The above mentioned Independent Directors are eligible for re-appointment as an Independent Director of the Company for a second term of 5 (Five) consecutive years. Pursuant to the provisions of the Act and the SEBI Listing Regulations, based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors has approved their reappointment and recommended for the approval of the Members by way of special resolution at the ensuing AGM of the Company, to hold office for a further period of 5 (Five) consecutive years.
Mr. Prahlad Rai Agarwala, Chairman and Mr. Mukesh Agarwal, Whole-time Director, are liable to retire by rotation at the ensuing AGM and being eligible, have offered themselves for re-appointment.
Details of Directors to be re-appointed are provided in the Explanatory Statement to the Notice of the ensuing AGM. Further, details of Directors are provided in the Corporate Governance Report, which forms part of this Annual Report.
None of the Directors of the Company is disqualified under the provisions of Section 164(2)(a) & (b) of the Act. Apart from the aforesaid, no changes in the Directors and KMPs have taken place during the period under review.
Declaration given by the Independent Directors under Section 149(7) of the Act
All Independent Directors of the Company have given their declarations to the Company that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations.
Number of Meetings of Board of Directors
During the Financial Year 2018-19, 4 (four) meetings of the Board of Directors were held, details of which are given in the Corporate Governance Report, which forms part of this Annual Report.
Separate Meeting of Independent Directors
During the year under review, the Independent Directors, without the presence of Non-Independent Directors and members of the Management, met on March 13, 2019 and, inter alia:
(i) reviewed the performance of Non-Independent Directors and the Board as a whole;
(ii) reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors;
(iii) assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively & reasonably perform their duties.
Annual Evaluation of Performance
Pursuant to the provisions of the Act and the SEBI 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, without the participation of Non-Independent Directors and members of management, in their separate meeting held on March 13, 2019, have reviewed the performance of Non-Independent Directors and 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, attendance, leadership, etc. The Board performance was reviewed on various parameters, such as, adequacy of the composition of the Board, Board culture, appropriateness of qualification & expertise of Board members, process of identification and appointment of Independent Directors, inter-personal skills, ability to act proactively, managing conflicts, managing crisis situations, diversity in the knowledge and related industry expertise, roles and responsibilities of Board members, appropriate utilization of talents and skills of Board members, 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, governance & compliance and 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 and knowledge of the regulatory requirements relating to governance, such as, roles and responsibilities under the Code for Independent Directors, the Act, the SEBI Listing Regulations, etc.
The Board of Directors of the Company, based on the report of the Independent Directors and the Nomination and Remuneration Committee, evaluated the performance of Board and of individual Directors. The Board also 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 review and evaluation of performance of Board, its Committees and of individual Directors was found to be satisfactory.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo
The particulars related to the conservation of energy, technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, are annexed hereto, marked as Annexure - II.
Particulars of Employees
The particulars of employees, as required under Section 197(12) of the Act, read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are annexed hereto, marked as Annexure - III.
Disclosure on Employee Stock Option/Purchase Scheme
Presently, the Company does not have any Employee Stock Option/Purchase Scheme.
Committees of the Board
As on March 31, 2019, the Board has 6 (six) Committees:
Nomination and Remuneration Committee
Stakeholders Relationship Committee
Corporate Social Responsibility (CSR) Committee
Risk Management Committee
Operations Committee Audit Committee
As on March 31, 2019, the Audit Committee comprised of 6 (six) Members, of which majority were Independent Directors. The details with respect to the composition of the Audit Committee, the number of meetings held during the Financial Year under review and attendance therein, and the terms of reference has been detailed out in the Corporate Governance Report, which forms part of this Annual Report.
Further, there were no instances wherein the Board had not accepted any recommendation of the Audit Committee. Nomination and Remuneration Committee
Details pertaining to constitution of the Nomination and Remuneration Committee of the Board of Directors of the Company, number of meetings held during the Year under review, attendance therein and its terms of reference have been stated in the Corporate Governance Report, which forms part of this Annual Report.
Policy on Appointment and Remuneration
The Board, on the recommendation of Nomination and Remuneration Committee, as prescribed under Section 178(3) of the Act, has framed a Policy on Appointment and Remuneration of Directors, Key Managerial Personnel and other employees of the Company and the same is available on the website of the Company, at the link, http://rupa.co.in/livesite/ wp-content/uploads/2018/12/ Remuneration_Policy.pdf. and is also annexed hereto, marked as Annexure - IV.
Stakeholders Relationship Committee
Details pertaining to the constitution of the Stakeholders Relationship Committee of the Board of Directors of the Company, number of meetings held during the Year under review, attendance therein, and its terms of reference have been stated in the Corporate Governance Report, which forms part of this Annual Report.
Corporate Social Responsibility Committee
The Company recognizes the value of being socially responsible corporate and therefore, it is committed towards the society and its people in a dedicated way.
Annual Report on CSR Activities, as prescribed under Section 135 of the Act, read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed hereto, marked as Annexure -V.
Terms of Reference: The detailed terms of reference of the Corporate Social Responsibility Committee is available on the website of the Company, at the link, http://rupa.co.in/site/wp-content/uploads/ 2015/10/Corporate-Social-Responsibility- Committee.pdf
|Composition of the Committee|
|Name of Member||Position||Category|
|Mr. Prahlad Rai Agarwala||Chairman||Promoter, Executive|
|Mr. Kunj Bihari Agarwal||Member||Promoter, Executive|
|Mr. Vinod Kumar Kothari||Member||Independent, Non-Executive|
The composition of the Committee complies with the provision of Section 135 of the Act, read with Rules made thereunder. Meeting and Attendance
During the Financial Year ended March 31, 2019, 2 (two) meetings of the Corporate Social Responsibility Committee were held. The details of the said meeting and attendance therein, are as hereunder:
|Name of Member||
Meetings held during the year and Attendance
|May 23, 2018||February 8, 2019|
|Mr. Prahlad Rai Agarwala||Present||Present|
|Mr. Kunj Bihari Agarwal||Present||Present|
|Mr. Vinod Kumar Kothari||Present||Present|
Risk Management Committee
The Risk Management Committee of the Board of Directors of the Company was constituted on May 23, 2018. As on March 31, 2019, the Risk Management Committee comprised of 6 (six) Members. The details with respect to its composition, the number of meetings held during the Financial Year under review and attendance therein, and the terms of reference has been detailed out in the Corporate Governance Report, which forms part of this Annual Report.
For administrative convenience and ease of doing business, the Board of Directors of the Company have constituted the Operations Committee, during the year 2017-18. The Operations Committee have met 5 (Five) times during the year 201819. The composition of the Operations Committee and details of the Meeting and attendance thereof are as hereunder:
|Name of Member||1 Category||
Meeting held during the year and Attendance
|1 April 17, 2018||July 18, 2018||August 27, 2018||November 27, 2018||February 4, 2019|
|Mr. Kunj Bihari Agarwal||Executive, Promoter||Present||Present||Present||Present||Present|
|Mr. Ramesh Agarwal||Executive, Promoter||Present||Present||Present||Present||Present|
|Mr. Mukesh Agarwal||Executive, Promoter||Present||Absent||Present||Present||Present|
The terms of reference of the Operations Committee are available on the website of the Company, at the link, http://rupa. co.in/site/wp-content/uploads/2015/10/Operations-Committee.pdf. The Operations Committee also performs such other functions, as may be assigned to them, by the Board of Directors, from time to time.
In terms of the Section 177 of the Act, read with the Rules made thereunder and Regulation 22 of the SEBI Listing Regulations, the Company has framed a Whistle Blower Policy with an objective to provide an avenue to address concerns, in line with the policy of the Company to the highest possible standards of ethical, moral and legal business conduct and its commitment to open communication, as well as timely redressal of concerns and disclosures to build and strengthen a culture of transparency and trust in the Company. 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. Audit Committee looks into the complaints raised, if any, and their redressal. The Whistle Blower Policy of the Company, as amended on February 8, 2019, is available on the website of the Company, at the link, http://rupa.co.in/site/wp-content/uploads/2015/10/ WhistleBlowerPolicy1.pdf
Extract of the Annual Return
The extract of the Annual Return, as at the Financial Year ended March 31, 2019, in Form MGT-9, is available on the website of the Company as a part of the Annual Report at the link, http://rupa.co.in/annual-report-accounts/ and the same is also annexed hereto, marked as Annexure - VI.
Risk Management Policy
The Company has a Risk Management Policy which lays down the framework for identification and mitigation of various risks. The specific objectives of the Risk Management Policy are to ensure that all the current and future material risk exposures of the Company are identified, assessed, quantified, appropriately mitigated and managed, to establish a framework for the Companys risk management process.
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 Policy is discussed at the meeting of the Audit Committee and Risk Management Committee of the Board of Directors. The management accepts the suggestions with regard to mitigation of risks that may arise in future. Further, in the opinion of the Board, there are no existing factors which threaten the existence of the Company.
Internal Financial Control Systems with reference to Financial Statements and its adequacy
The Company has adequate Internal Financial Control systems and procedures which are commensurate with its size and nature of business. It is ensured that all the assets 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 and 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:
1) Systems have been laid to ensure that all transactions are executed in accordance with managements general and specific authorization;
2) Systems and procedures exist to ensure that all transactions are recorded, as necessary to permit preparation of Financial Statements in conformity with Generally Accepted Accounting Principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information;
3) 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;
4) The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to differences, if any; and
5) 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, Chief Executive Officer and Chief Financial Officer, in terms of Regulation 17(8) of the SEBI Listing Regulations, provided in this Annual Report, also certifies the adequacy of our Internal Control systems and procedures.
Statutory Auditors and Auditors Report
M/s. Singhi & Co. (Firm Registration Number 302049E), Chartered Accountants, had been appointed as the Statutory Auditor of the Company to hold office for a period of 5 (five) years from the conclusion of the 32nd AGM of the Company (for the Financial Year 2016-17), held on August 31, 2017, until the conclusion of the 37th AGM of the Company for the Financial Year 2021-22.
The Notes on accounts referred to in the Auditors Report are self-explanatory and therefore, do not call for any further explanations/comments.
M/s. Das & Prasad, Chartered Accountants (Firm Registration Number 303054E), was appointed as the Internal Auditors of the Company to conduct the Internal Audit for the Financial Year 2018-19. Further, the Audit Committee considers and reviews the Internal Audit Report submitted by the Internal Auditor on a quarterly basis.
Details in respect of Fraud
During the Financial Year 2018-19, the Auditors have not reported any fraud, as prescribed under Section 143(12) of the Act.
Secretarial Audit Report
Pursuant to the provisions of Section 204 of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed CS Nidhi Bagri of M/s. Nidhi Bagri & Company, Practicing Company Secretaries, to conduct the Secretarial Audit of the Company, for the Financial Year 2018-19. The Secretarial Audit Report in Form MR-3, for the Financial Year 2018-19, is annexed hereto, marked as Annexure - VII. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of this Report
No material changes and commitments affecting the financial position of the Company have occurred between the end of the Financial Year 2018-19 and the date of this Report.
Details of significant and material orders passed by the Regulators/ Courts/ Tribunals impacting the going concern status and the Companys operations in future
No such significant and material order has been passed by any Regulator/ Court/ Tribunals against the Company, which will impact the going concern status and the Companys operations in future.
The Company has not accepted any deposit within the meaning of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014, during the Financial Year ended March 31, 2019.
Particulars of Loans, Guarantees or Investments
The loan and guarantee given by the Company during the financial year ended March 31, 2019 are within the limits prescribed under Section 186 of the Act. Further, the details of the 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 SEBI Listing Regulations, have been provided in the Notes to the Financial Statements of the Company.
Particulars of Contracts or Arrangements with Related Parties
There were no materially significant related party transactions entered into by the Company which may have potential conflict with the interest of the Company. All contracts/ arrangements/ transactions entered by the Company during the Financial Year 2018-19, with its related parties, were in the ordinary course of business and on an arms length basis and were reviewed and approved by the Audit Committee of the Board. 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 of Materiality of Related Party Transactions except those provided in Form AOC-2, annexed hereto, marked as Annexure - VIII. Further, suitable disclosure as required by the Accounting Standards has been made in the Notes to the Financial Statements.
The Policy on dealing with Related Party Transactions is available on the website of the Company, at the link- http://rupa. co.in/livesite/wp-content/uploads/2018/12/policy-on-related-party-transactions.pdf
Particulars of Contract with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company
The details of the transactions entered 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)|
|Rajnish Enterprises Ltd||19.90%||Enterprises owned or significantly influenced _ by key management personnel or their relatives _||Dividend||4,74,69,570|
|Binod Hosiery (shares held in the name of its partners, Mr. Prahlad Rai Agarwala, jointly with Mr. Ghanshyam Prasad Agarwala and Mr. Kunj Bihari Agarwal||21.08%||Dividend||5,02,90,968|
Compliance with Secretarial Standards
The Directors state that the Company is in compliance with the applicable Secretarial Standards.
Maintenance of Cost Records
The Provisions of Section 148 of the Companies Act, 2013, with respect to maintenance of Cost records are not applicable to the Company.
Management Discussion and Analysis Report
The Management Discussion and Analysis Report, in terms of Regulation 34, read with Schedule V of the SEBI Listing Regulations, forms part of this Annual Report.
Corporate Governance Report
The Corporate Governance Report, in terms of Regulation 34(3), read with Schedule V, of the SEBI 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. (Firm Registration Number 302049E), regarding compliance of conditions of Corporate Governance and the same forms part of this Annual Report.
Business Responsibility Report
The Business Responsibility Report, in terms of Regulation 34 of the SEBI Listing Regulations, forms part of this Annual Report.
Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013
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, thereby providing a safe and healthy work environment. 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.
However, during the year under review no such incidence has been reported.
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) that in the preparation of the Annual Accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any;
(ii) that 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, 2019 and of the profit of the Company for that period;
(iii) that proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities has been taken;
(iv) that the Annual Accounts has been prepared on a going concern basis;
(v) that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems were adequate and operating effectively; and
(vi) that internal financial control to be followed by the Company are in place and that such internal financial controls are adequate and are operating effectively.
Annexures forming a part of this Report of the Directors
|I||Dividend Distribution Policy|
|II||Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo|
|III||Particulars of Employees|
|IV||Policy on Appointment and Remuneration|
|V||Annual Report on CSR Activities|
|VI||Extract of the Annual Return in Form MGT-9|
|VII||Secretarial Audit Report|
|VIII||Particulars of Contracts or Arrangements with Related Parties in Form AOC-2|
We would take this opportunity to thank our customers, vendors, bankers, stakeholders and the Government for their continued support. We place on record our appreciation of the contribution made by our employees at all levels. Our consistent performance is possible because of their hard work, solidarity, co-operation and support.
|By order of the Board|
|For Rupa & Company Limited|
|Prahlad Rai Agarwala|
|Date: May 25, 2019||DIN: 00847452|