Rupa & Company Ltd Directors Report.

for the Financial Year ended March 31, 2021

Financial Highlights

The financial performance of the Company is summarized hereunder:

Standalone Financial Review (Rs. in Lakhs)

Particulars 2020-21 2019-20
Revenue from Operations 1,26,121.68 94,140.11
Profit before Finance Costs, Tax, Depreciation/ Amortization (PBITDA) 26,378.13 13,251.98
Less: Finance Costs 944.07 1,481.22
Profit before Tax, Depreciation/Amortization (PBTDA) 25,434.06 11,770.76
Less: Depreciation 1,132.36 1,567.92
Profit before Tax (PBT) 24,301.70 10,202.84
Less: Tax Expense 6,211.77 2,196.31
Net Profit after Tax (PAT) 18,089.93 8,006.53
Other Comprehensive Income 10.87 7.16
Total Comprehensive Income for the year 18,100.80 8,013.69
Consolidated Financial Review (Rs. in Lakhs)
Particulars 2020-21 2019-20
Revenue from Operations 1,31,267.15 97,464.28
Profit before Finance Costs, Tax, Depreciation/ Amortization (PBITDA) 26,462.85 12,111.80
Less: Finance Costs 1,343.31 1,862.10
Profit before Depreciation/Amortization (PBTDA) 25,119.54 10,249.70
Less: Depreciation 1,378.98 1,851.45
Profit before Tax (PBT) 23,740.56 8,398.25
Less: Tax Expense 6,214.66 2,207.91
Net Profit after Tax (PAT) 17,525.90 6,190.34
Other Comprehensive Income 17.27 13.99
Total Comprehensive Income for the year 17,543.17 6,204.33

Covid-19 pandemic

The Covid-19 pandemic has emerged as a global challenge, creating disruption across the world. Many Countries are experiencing the desolation and devastation of the deadly virus. The pandemic has led to a dramatic loss of human life worldwide and presents an unprecedented challenge to public health, food systems and the world of work. The economic and social disruption caused by the pandemic is devastating, millions of people are at risk of falling into extreme poverty. Many enterprises are facing an existential threat also. A significant workforce is at risk of losing their livelihoods. Therefore, Global solutions are needed to overcome the challenges. Due to the lockdown measures enforced by the Central Government and State Governments, the factories of the Company were not operating at the beginning of the year, however, they had started their operations in May, 2020, as per prescribed guidelines issued by the Government Authorities. The Company had adopted work from home policy for its employees, wherever necessary. The Company had undertaken several steps to help the community in which it operates, inter alia, providing food and other essentials to the needy community. The Company also provided essentials to the many needy people affected by the Cyclone Amphan, which had devastating affect and impacted many poor citizens across West Bengal in May, 2020.

State of Company’s Affairs and Future Outlook

The Company achieved a Turnover of Rs. 1,26,121.68 lakhs during the financial year 2020-21, as against Rs. 94,140.11 lakhs in 2019-20, registering a growth of 34% over the last year. During the year, the Profit before Finance Charges, Depreciation and Tax stood at Rs. 26,378.13 lakhs, as against Rs. 13,251.98 lakhs during the previous year, an increase of 99% in comparison to previous year. The Net Profit for the year 2020-21 stood at Rs. 18,089.93 lakhs, as compared to Rs. 8,006.53 lakhs, during the previous year, a growth of 126% over the last year.

On consolidated basis, the Turnover for the year 2020-21 was Rs. 1,31,267.15 lakhs, as against Rs. 97,464.28 lakhs in 2019-20, registering a growth of 34% over the last year. The Profit before Finance Charges, Depreciation and Tax stood at Rs. 26,462.85 lakhs during 2020-21, as against Rs. 12,111.80 lakhs during the previous year, an increase of 118% in comparison to previous year. The Net Profit for the year 2020-21 stood at Rs. 17,525.90 lakhs, as compared to Rs. 6,190.34 lakhs, during the previous year, a growth of 183% over the last year. Given that the Financial Year 2020-21 has been a very difficult year for all of us but the Company has given a stellar performance, despite all the challenges. We have seen a record growth across all our financial parameters, revenue, EBITDA or PAT. The Company delivered record revenues and profitability on back of strong volume growth, operational efficiencies, better product mix and cost specialization programs. In view of the robust performance, the Board of Directors have recommended a final dividend of Rs. 5 per equity share including a special dividend of Rs. 2 per equity share, as a mark of gratitude to our shareholders during this time of pandemic, which is 500% of face value for the financial year ended March 31, 2021.

The quality and durability, Rupa and sub brands are integrated across the hosiery value change. The Company enjoys top of the mind recall across all segments and have earned the trust of millions of customers across globe. In line with evolving consumer preference and market demand the Company has introduced variety of new brands and sub-brands where the product has a latest fabric innovation, continuous production technique and advance design element to give the finest style and comfort to the end user. Rupa has a strong pan India presence. Rupa enjoy very solid position in East India and gaining a significant presence in North, followed by Western region. As a part of the strategy, we are expanding in new areas which are large but weak market for Rupa like South as well as some of the weak market where market is huge where we have a huge opportunity to grow. We are building new distributor and building experience theme to further strengthen our sale in those markets as well as existing market.

Coming to the current situation in the country, we are witnessing a second wave of Covid-19 infection and it has once again resulted in disruption of businesses, but the overall impact will be milder in comparison to last year’s devastation. Several states have announced restrictions. Going forward, we expect a sharp upturn in business when the restrictions will be lifted and with the roll out of vaccines in phased manner from January, 2021, we expect that a sizeable population could be vaccinated in near future to control the pandemic, which will lead to a faster economic recovery.

The Company is engaged in the manufacturing, marketing, sales and distribution of Men’s and Women’s 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. The Company is one of the leaders in the innerwear garments industry having a distribution network spanning across India. The Company has a PAN-India presence with a large distribution network consisting of 4 central warehouses, 11 EBOs (Exclusive Brand Outlets), more than 1200 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 expanding its reach in e-commerce platform through tie-up with Amazon, Flipkart and other ecommerce platforms, as looking to double the growth. The plan is to create small to mid-sized Franchise Store Model with best-in-class SOPs. We want to establish franchise model within top 50 cities in India. Future plan is to roll out 30 EBOs by the year end and 100 EBOs in 2-3 years. Rupa is present across all e-commerce sites and Future plan is to enhance brand visibility through increasing online presence. The Company is aggressively focusing in expanding e-commerce and EBO business.

The Company has manufacturing facilities situated at Howrah, Kolkata, Tirupur, Bengaluru and Ghaziabad and have 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 segments including men, women and kid segment with its wide range 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 and Siddharth Malhotra. The Company also has premium brand, Macroman M-Series and the premium brand under Female segment, Macrowoman W-Series includes products like, lingerie, active wear and leisurewear. The Wholly-owned Subsidiary of the Company, Oban Fashions Private Limited, has exclusive license for the brand ‘FCUK’ and the brand ‘Fruit of the Loom’ or ‘FOTL’, to manufacture, market and sale of innerwear and other products in India. The FCUK and FOTL products have been launched at different locations in India. Coming to growth strategy, the Company is planning to scale up high margin revenue business, which includes the brands like FCUK, Fruit of the Loom and M-series. The vision is to occupy the consumer mindset in this category where the aspirational Indian consumer perhaps works with style. Our aim is to make premium inner wear based on comfort accessible to the consumer. The Company is also reinforcing high growth segment like Athleisure, Women wear and Thermal wear segment.

The male innerwear segment contributes significantly to the Company’s business in comparison to the female innerwear 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. 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 has always been responsive towards the changing fashion needs by introducing new line of products across all segments. 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. The Company is focusing on enhancing its product offering in the children and women’s segment with the introduction of new products and brands. Both the children and women’s 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 is also expanding in new international geography in export business by opening business in new countries in middle-east, Africa and Russia.

Scheme of Arrangement

During the year under review, the Board of Directors of the Company, at its Meeting held on December 9, 2020 has approved the Scheme of Arrangement ("Scheme") for the demerger of premium brand undertaking (i.e., business pertaining to brands "FCUK" and "FOTL") of its Wholly-owned Subsidiary, Oban Fashions Private Limited ("Oban") into the Company. Given that the registered office of Oban is situated in Mumbai, i.e., within the jurisdiction of Hon’ble National Company Law Tribunal (‘NCLT’), Mumbai and that the registered office of the Company is situated in Kolkata, i.e. within the jurisdiction of Hon’ble NCLT Kolkata Bench, the companies had filed separate applications before the respective Bench for getting directions w.r.t. dispensation from the NCLT convened meeting/ convening the meeting of shareholders and creditors for consideration of the proposed Scheme. Status of application before the respective Benches is as follows:

Before Hon’ble NCLT Kolkata Bench: The Hon’ble Bench vide order dated February 3, 2021, allowed the demerger application filed by the Company and directed to convene separate meetings of the Shareholders, Secured Creditors and Unsecured Creditors of the Company under the Chairpersonship of Mr. Soumitra Lahiri, Chartered Accountant, to seek their approval w.r.t. the proposed Scheme. In terms of the directions of the Hon’ble Bench, the meetings were duly convened on March 26, 2021 and the resolution proposed for approval of the proposed Scheme has been duly passed with requisite majority. The Chairperson’s reports w.r.t. the meetings were filed on April 13, 2021 and in terms of Rule 15 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the Company has filed a Petition before the Hon’ble Bench for sanction of the proposed Scheme. The matter shall be listed for hearing before the Hon’ble Bench on June 30, 2021. However, the Company has filed application for urgent hearing of the matter and the same was considered and order is awaited. Before Hon’ble NCLT Mumbai Bench: The Hon’ble Bench vide order dated April 8, 2021, has allowed the demerger application filed by Oban. Given that Oban is a Wholly-owned subsidiary of the Company and that there was only 1 secured creditor in Oban as on the Cut-off date, the Hon’ble Bench has dispensed with the meeting of the shareholders and Secured Creditor of Oban. Further, with respect to Unsecured Creditors, the Hon’ble Bench has directed to send notices to all the Unsecured Creditors, seeking their objection/representation, if any, to the proposed Scheme. In terms of the direction of the Hon’ble Bench, Oban has sent Notice inviting objection/representation, if any, to the Unsecured Creditors on May 5, 2021 and is in the process of filing 2nd motion application before the Hon’ble NCLT.

Subsidiaries

The Company has the following 5 (five) Wholly-owned Subsidiaries as on March 31, 2021:

(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 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. 12.26 lakhs, as against Rs. 14.83 lakhs during the previous year. Net Profit during the year was Rs. 3.48 lakhs, as compared to Rs. 5.70 lakhs, 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. 243.64 lakhs, as against Rs. 402.13 lakhs during the previous year. Net Profit during the year was Rs. 4.35 lakhs, as compared to Rs. 27.69 lakhs, 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, has exclusive license with respect to brands "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 sell 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. 5,385.94 lakhs, as against Rs. 3,396.31 lakhs, during the previous year. Net loss during the year was Rs. 570.21 lakhs, as compared to

Rs. 1,847.85 lakhs, during the previous year.

(iv) Rupa Fashions Private Limited, was incorporated as Wholly-owned Subsidiary of the Company, on December 11, 2019 with the object, inter alia, to be engaged in manufacturing and trading activities, etc. During the Financial Year under review, there was no Revenue from Operations and the Net Loss during the year under review was Rs. 0.45 lakhs, as against Rs. 0.34 lakhs in the previous year.

(v) Rupa Bangladesh Private Limited, was incorporated as Wholly-owned Subsidiary of the Company in Dhaka, Bangladesh, on September 1, 2019 with the object, inter alia, to be engaged in manufacturing activities, etc., 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. 1.22 lakhs, as against Rs. 1.39 lakhs in the previous year.

None of the above mentioned subsidiaries are ‘Material Subsidiary’ in terms of Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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 Company’s subsidiaries are also 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 Company’s 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.

Dividend

For the Financial Year 2020-21, 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), @ Rs. 5 per equity share, i.e. 500%, including a dividend of Rs. 2 per equity share as a mark of gratitude to the shareholders during the pandemic, for 7,95,24,560 equity shares of Rs. 1/- each, amounting to Rs. 39,76,22,800/- (Rupees Thirty-nine crore Seventy-six lakhs Twenty-two thousand and Eight hundred Only). The dividend payout is in accordance with the Company’s Dividend Distribution Policy.

The Dividend Distribution Policy of the Company, adopted by the Board of Directors of the Company, in terms of Regulation 43A of the SEBI Listing Regulations is annexed hereto, marked as ‘Annexure-I‘ and is also available on the Company’s website at http://rupa.co.in/livesite/wp-content/uploads/2018/12/Dividend-Distribution-Policy.pdf.

Transfer of unpaid/ unclaimed dividend and equity shares to the IEPF Authority

During the Financial Year ended March 31, 2021, the Company has transferred unclaimed and unpaid dividend for the Financial Year 2012-13, amounting to Rs. 1,17,404/- (Rupees One Lakh Seventeen Thousand Four Hundred Four only), to the IEPF Authority. During the Financial Year ended March 31, 2021, 12,001 Equity Shares of Rs. 1/- each, held by 3 (three) shareholders, in aggregate, whose dividends 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 Authority 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.

Credit Rating

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 have 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
(i) Mr. Ghanshyam Prasad Agarwala (DIN: 00224805) Director liable to retire by rotation, reappointed at the AGM held on September 18, 2020. Re-appointed as the Whole-time Director at the AGM held on September 18, 2020, for a period of 5 (five) years, w.e.f. April 1, 2021. Designated as the Vice-Chairman
(ii) Mr. Niraj Kabra (DIN: 08067989) Director liable to retire by rotation, reappointed at the AGM held on September 18, 2020
(iii) Mr. Kunj Bihari Agarwal (DIN: 00224857) Re-appointed as the Managing Director at the AGM held on September 18, 2020, for a period of 5 (five) years, w.e.f. April 1, 2021.

Mr. Prahlad Rai Agarwala, Chairman (Whole-time Director) and Mr. Ramesh Agarwal, Whole-time Director-cum-Chief Financial Officer, are liable to retire by rotation at the ensuing AGM and being eligible, have offered themselves for reappointment. 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(1)(b) of the SEBI Listing Regulations. In the opinion of the Board, the Independent Directors of the Company are persons of integrity, expertise and experience and duly qualified (including the ID Proficiency Test) to hold such positions. However, renewal of registration of Mr. Dharam Chand Jain is pending renewal due to some technical reasons and Mr. Jain is in process of renewing the same.

Number of Meetings of Board of Directors

During the Financial Year 2020-21, 5 (five) 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 met on March 22, 2021 without the presence of Non-Independent Directors and members of the Management 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.

Apart from Mr. Dharam Chand Jain, all other Independent Directors were present at that meeting.

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 Independent 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 22, 2021, 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, governance, 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, it’s 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, 2021, the Company has 6 (six) Committees:

Audit Committee

Nomination and Remuneration Committee

Stakeholder’s Relationship Committee

Corporate Social Responsibility (CSR) Committee

Risk Management Committee

Operations Committee

Audit Committee

As on March 31, 2021, 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 period 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 the 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 including criteria for determining qualifications, positive attributes, independence of a director and other matters and the same is available on the Company’s website on http://rupa.co.in/livesite/wp-content/ uploads/2018/12/Remuneration_Policy.pdf and and is also annexed hereto, marked as ‘Annexure – IV’.

Familiarisation Programme

The details of the familiarisation programme imparted to the Independent Directors of the Company are uploaded on the website of the Company at http://rupa.co.in/livesite/wp-content/uploads/2018/12/Familiarization_Programme_for_ Independent_Directors1.pdf.

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.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in the 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‘. This Policy is available on the Company’s website on http://rupa.co.in/livesite/wp-content/ uploads/2021/03/Corporate_Social_Responsibility_Policy.pdf.

Terms of Reference: The detailed terms of reference of the Corporate Social Responsibility Committee is available on the Company’s website on http://rupa.co.in/livesite/wp-content/uploads/2019/10/Corporate-Social-Responsibility-Committee.pdf.

Composition of the Committee, Meeting and Attendance

During the Financial Year ended March 31, 2021, 2 (two) meetings of the Corporate Social Responsibility Committee were held. The composition of the Committee, meeting held and attendance therein, are as hereunder:

Name of Member Position Category

Meetings held during the year and Attendance

June 26, 2020 January 29, 2021
Mr. Prahlad Rai Agarwala Chairman Promoter, Executive Present Present
Mr. Kunj Bihari Agarwal Member Promoter, Executive Present Present
Mr. Dipak Kumar Banerjee Member Independent, Non-Executive Present Present

The composition of the Committee complies with the provision of Section 135 of the Act, read with Rules made thereunder.

Risk Management Committee

The Risk Management Committee of the Board of Directors of the Company, comprised of 6 (six) Members, as on March 31, 2021. 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.

Operations Committee

For administrative convenience and ease of doing business, the Board of Directors of the Company had constituted the Operations Committee. The Operations Committee met 9 (nine) times during the year 2020-21. The composition of the Operations Committee and details of the Meeting and attendance thereof are as hereunder:

Name of the Member Category

Meeting held during the year and Attendance

July 2, 2020 August 3, 2020 September 5, 2020 October 5, 2020 November 7, 2020 December 14, 2020 January 8, 2021 January 25, 2021 February 2, 2021
Mr. Kunj Bihari Agarwal Executive, Promoter Present Present Present Present Present Present Present Present Present
Mr. Ramesh Agarwal Executive, Promoter Present Present Present Present Present Present Present Present Present
Mr. Mukesh Agarwal Executive, Promoter Present Present Present Present Present Present 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.

Vigil Mechanism

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. The Audit Committee looks into the complaints raised, if any, and their redressal. The Whistle Blower Policy of the Company, is available on the website of the Company, at the link, http://rupa.co.in/livesite/wp-content/uploads/2019/03/Whistle_Blower_Policy.pdf.

Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the draft Annual Return as on March 31, 2021 in e-form MGT 7 is available on the Company’s website at the link http://rupa.co.in/annual-report-annual-return/. The final version of the Annual Return will be uploaded on the Company’s website after the conclusion of the ensuing AGM.

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 Company’s 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 Company’s risk appetite and regulatory requirements. The Risk Management Policy is discussed at the meeting of the Audit Committee and the 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 management’s 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 management’s 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 Company’s 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.

Internal Auditor

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 2020-21. 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 2020-21, 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 2020-21. The Secretarial Audit Report in Form MR-3, for the Financial Year 2020-21, is annexed hereto, marked as ‘Annexure – VI’. 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 2020-21 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 Company’s 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 Company’s operations in future. The Scheme of Arrangement between the Company and Oban Fashions Private Limited has been pending before the Hon’ble NCLT. The detailed status of the same has been explained hereinbefore in this Report.

Deposits

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, 2021.

Particulars of Loans, Guarantees or Investments

The loan and guarantee given by the Company during the financial year ended March 31, 2021 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 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 2020-21, with its related parties, were in the ordinary course of business and on an arm’s 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 Company’s policy of Materiality of Related Party Transactions except those provided in Form AOC-2, annexed hereto, marked as ‘Annexure – VII’. 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 Company’s website on 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 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 significantly 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% influenced by key management personnel or their relatives Dividend Rent payment 5,02,90,968 14,400

Compliance with Secretarial Standards

The Directors state that the Company is in compliance with the applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’ respectively.

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 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 & 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, 2021 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

Annexure Particulars

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 Secretarial Audit Report

VII Particulars of Contracts or Arrangements with Related Parties in Form AOC-2

Acknowledgement

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 growth is possible because of their hard work, solidarity, co-operation and support.

By order of the Board
For Rupa & Company Limited
Sd/-
Prahlad Rai Agarwala
Place: Kolkata Chairman
Date: May 31, 2021 DIN: 00847452