Dear Members of RCIL
We are glad to present the 43rdAnnual Report on the business and operationsof the Company along with the Audited Financial Statements for the financial year ended onMarch 31 2021.
FINANCIAL SUMMARY AND HIGHLIGHTS
The Company's Financial Summary and Highlights are summarized below:
(Rs. in Lakh)
|Particular ||FINANCIAL YEAR 2020-21 ||FINANCIAL YEAR 2019-20 |
|Revenue from Operations including other income) ||26011.75 ||30085.02 |
|Earning Before Depreciation Interest and Tax (EBIDTA) ||2760.90 ||2944.08 |
|Less: Depreciation ||759.87 ||733.83 |
|Less: Finance Cost ||964.80 ||1132.88 |
| ||1724.67 ||1866.71 |
|Profit Before Tax ||1036.23 ||1077.37 |
|Tax Expenses ||343.10 ||144.26 |
|Profit After Tax ||693.13 ||933.11 |
|Other Comprehensive Income ||8.57 ||12.74 |
|PAT after Other Comprehensive Income ||701.70 ||945.85 |
|Earning Per Share (Basic & Diluted) ||9.19 ||14.68 |
STATE OF THE COMPANY'S AFFAIR
The Company produced 14043.47 M.T. of Yarn during the period under review as against14475.84 M.T. of Yarn produce during the last year. During the year the Company hadexport of Rs. 14324.65 Lakh against export of Rs. 17115.45 during the previous year. Theexport constituted 57.57 % of the total turnover of the Company. Your Company's ProfitBefore Tax (PBT) during 2020-21 has been Rs. 1036.23 Lakh as against 1077.37 Lakh duringthe year 2019-20 decreased by 3.82%. The EPS for the year 2020-21 works out to Rs. 9.19 asagainst Rs. 14.68 for the year 2019-20. However during the financial year decrease inProfit After Tax (PAT) is due to deferred tax liability.
CHANGES IN THE NATURE OF BUSINESS
There is no change in the nature of the business of the company.
DIVIDEND ON EQUITY SHARES
Your Directors are pleased to recommend a dividend of 20% (i.e. Rs. 2.00/- per Share)on Equity Shares of Rs. 10/- each. If the dividend as recommended above is approved bythe Members at the Annual General Meeting the total outflow towards dividend includingtax deducted at source (TDS) on Equity Shares for the year will be Rs. 150.87 Lakh.
TRANSFER TO RESERVE
The Board of Directors does not propose to transfer any sum to the General Reserve forthe financial year ended on March 31 2021.
During the period under review there has been no change in the Share Capital of theCompany.
DETAILS OF SUBSIDIARY/ JOINT VENTURES / ASSOCIATE COMPANIES / AND ITS PERFORMANCE
During the year the Company has no Subsidiaries/ Associate Companies / Joint Venture.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
In compliance with Section 134(3)(l) of the Act no material changes and commitmentshave occurred after the closure of the financial year to which the financial statementsrelate till the date of this report affecting the financial position of the company.
IMPACT OF COVID 19 PANDEMIC
The COVID 19 pandemic has rapidly spread throughout the world. The operations of theCompany was also impacted during the year 2020-21 due to national lockdown imposed by theGovernment of India till April 19 2020. The Company also resumed the operation in thephased manner as per directives from the Government of Rajasthan. The company is howeverof the view that there is no significant impact on its financial statement as at March 312021. However considering the second wave of COVID 19 the impact assessment of COVID 19will be a continuing process due to its uncertainties associated with its nature andduration. Therefore considering these factors the impact may be different from theestimated as at the date of approval of these financial statements. The company willcontinue to monitor any material change to the future economic condition also.
SIGNIFICANT MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTINGTHE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There were no significant and material orders passed by the regulators courts ortribunals which would impact the going concern status of the company and also theCompany's future operations.
LOANS GUARANTEES & INVESTMENTS BY THE COMPANY
The Company has not given any loan nor furnished any guarantees nor made anyinvestments covered under the provisions of Section 186 of the Companies Act 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
In line with the requirements of the Companies Act 2013 ("Act") andthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") your Company hasformulated a Policy on Related Party Transactions which is available on the Company'swebsite at https://www.reliancechemotex.com/reports/code-of- conduct-and-policies/ Policyintends to ensure that proper reporting approval and disclosure processes are in placefor all transactions between the Company and Related Parties.
All Related Party Transactions are placed before the Audit Committee for review andapproval. Prior omnibus approval is obtained for Related Party Transactions which are ofrepetitive nature and/or entered in the Ordinary Course of Business and are at Arm'sLength.
All Related Party Transactions entered during the year were in Ordinary Course of theBusiness and at Arm's Length. No Material Related Party Transactions i.e. transactionsexceeding 10% of the annual consolidated turnover as per the last audited financialstatements were entered during the year by the Company. The disclosure of particulars ofcontracts/ arrangements entered into by the Company with related parties referred to insub-section (1) of section 188 of the Act as given in AOC-2 are provided in Annexure-3.
MEETINGS OF BOARD
The Board of Directors met four times during the year on June 26 2020 August 262020 November 09 2020 and February 10 2021. Frequency and quorum at these meetings andthe intervening gap between any two meetings were in conformity with the provisions of theAct the Listing Regulations and Secretarial Standards issued by The Institute of CompanySecretaries of India ("Secretarial Standards"). For further detailsplease refer report on Corporate Governance annexed to this report.
COMMITTEES OF THE BOARD OF DIRECTORS
As on March 31 2021 the Board of Directors has following committees:
1. Audit Committee
2. Nomination & Remuneration Committee
3. Stakeholders Relationship Committee
4. CSR Committee
5. Finance Committee
The details of committees along with their composition number of meetings andattendance at the meetings and other details are provided in the Corporate GovernanceReport annexed to the report.
CHANGE IN THE DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of the Act and Articles of Association of theCompany Mr. N. G. Khaitan(DIN: 00020588) Non-Executive Non-Independent Director of theCompany was liable to retire by rotation at the 42nd Annual General Meeting (AGM)and was appointed therein.
In accordance with the provision of the Act and the Article of Association ofthe Company Mr. Rahul Shroff (DIN: 02301693) and Mr. Ameya Shroff (DIN:05315616) wholetime director(s) designated as the Executive Directors of the company are liable to retireby rotation at the ensuing Annual General Meeting and being eligible offers them self forreappointment.
Mr. Sanjiv Shroff (DIN: 00296008) was re-appointed as Managing Director for aperiod of three years w.e.f. September 01 2020 to August 31 2023 at the 42ndAGM of the Company.
Mr. Rahul Shroff (DIN: 02301693) was re-appointed as Whole time Directordesignated as Executive Director of the Company for a period of three years w.e.f.September 26 2021 to September 25 2024 through Postal Ballot dated February 10 2021.
Mr. Kishori Lal Sonthalia Independent Director who was also the chairperson ofAudit Committee Nomination and Remuneration Committee Stakeholders RelationshipCommittee and Corporate Social Responsibility Committee ceased to be director of thecompany due to his sad demise on November 21 2020.
Mr. Ram Niwas Sharma was re-designated as Independent Director of the Companywith effect from February 10 2021 for the period of 5 (Five) years with the approval ofthe Shareholders via Postal Ballot dated February 10 2021.
(B) Key Managerial Personnel
During the financial year Mr. Vimal Tank Company Secretary & Compliance Officerresigned w.e.f. April 30 2020 and Mr. Chirag Gupta joined as Company Secretary of theCompany w.e.f. June 26 2020.
DECLARATION BY INDEPENDENT DIRECTORS
Pursuant to the Section 149 of the Act and Regulation 16 of the Listing Regulation allindependent Directors of the Company have given declaration that they meet the criteria ofIndependence and also registered with IICA database for independent directors. Also theExemption certificate has been received from all the independent directors fornon-appearing of Exam conducted by IICA. The Independent Directors have also confirmedthat they have complied with the Company's code of conduct. In the opinion of the Board ofDirectors the independent directors fulfill the conditions specified in the Act and theListing Regulations and are independent of the management.
Further a familiarization program has been conducted for Independent Directors and thedetails are uploaded on the company websitehttps://www.reliancechemotex.com/reports/grievance- management/.
FORMAL ANNUAL EVALUATION
Pursuant to the provisions of the Act and The Listing Regulations PerformanceEvaluation is becoming increasingly important for the Board and Directors and has benefitsfor the Directors as an individual Board as a whole and companies for whom they areworking.
The Securities and Exchange Board of India has issued a Guidance Note on BoardEvaluation and pursuant to the provision of the Act the Board of Directors has carriedout an annual performance evaluation of its own performance Board Committees andindividual director. The Performance evaluation was based on the criteria such ascomposition understandability of their roles value addition independence experienceexpertise etc.
AUDITORS AND AUDIT REPORTS
I. Statutory Auditors and Audit Report
M/s. Jain Pramod Jain & Co Chartered Accountants (Firm Registration No.016746N)New Delhi were appointed as the Statutory Auditors of the Company to hold office for aterm of five consecutive years from the conclusion of the 39th AGM of theCompany held on September 28 2017 till the conclusion of the 44th AGM to beheld in the calendar year 2022. The requirement for the annual ratification of auditors'appointment at the AGM has been omitted pursuant to Companies (Amendment) Act 2017notified on May 7 2018 and therefore the Board has not proposed the ratification ofappointment of the said auditor at the ensuing AGM of the Company. There is noreservation qualification or adverse remark contained in the Auditors Report attached tothe Financial Statement of Company as on March 31 2021. The information refereed in theAuditors Report for the financial year 2020-2021 is self-explanatory and do not call forany further comments.
As per Section 143(12) of the Act during the year no fraud was reported by the Auditorof the Company in their Audit Report.
II. Cost Auditors and Cost Audit Report
In terms of the provisions of Section 148 of the Companies Act 2013 read withCompanies (Cost Records and Audit) Rules 2014 the Board of Directors of your Companyhave on the recommendation of the Audit Committee appointed M/s. N N & AssociatesCost Accountants (Firm Registration No.002322) New Delhi as the Cost Auditors to conductthe Cost Audit of your Company for the financial year 2021-22. The Company has recommendedtheir remuneration to Shareholders for their ratification at the ensuing Annual GeneralMeeting.
Your Company has maintained cost audit records pursuant to section 148 of the CompaniesAct 2013 read with Companies (Cost Records and Audit) Rules 2014 in respect ofmanufacturing activities are required. The Cost Audit Report for the financial year2019-20 was filed with Ministry of Corporate Affairs on September 03 2020. The Reportdoes not contain any qualification reservation or advance remark.
During the financial year 2019-20 no fraud was reported by the Cost Auditor of theCompany in their Audit Report.
III. Secretarial Auditors and Secretarial Audit Report
M/s. V. M. & Associates Company Secretaries (Firm Registration No. P1984RJ039200)Jaipur were appointed as Secretarial Auditors of the Company for conducting theSecretarial Audit for the financial year 2020-21. The Secretarial Audit Report for thefinancial year 2020-21 in form MR-3 does not contain any qualification reservation oradverse remark and is annexed to this report as Annexure-2.
Further the Board of Directors has approved the reappointment of M/s. V. M. &Associates Company Secretaries (Firm Registration No. P1984RJ039200) Jaipur asSecretarial Auditors at their meeting held on June 21 2021 for conducting the SecretarialAudit of the Company for the financial year 2021-22.
During the financial year 2020-21 no fraud was reported by the Secretarial Auditor ofthe Company in their Audit Report.
IV. Internal Auditors and Internal Audit Report
M/s. Rajeev Amitabh & Co Chartered Accountants (Firm Registration No.009942N) NewDelhi were appointed as Internal Auditors of the Company for conducting Internal Audit forthe financial year 2020-21. The Internal Audit Reports were received by the Company andthe same were reviewed by the Audit Committee and Board of Directors of the company.
Further the Board of Directors has approved the reappointment of M/s. Rajeev Amitabh& Co Chartered Accountants (Firm Registration No.-009942N) New Delhi as InternalAuditors at their meeting held on June 21 2021 for conducting the Internal Audit of theCompany for the financial year 2021-22.
During the financial year 2020-21 no fraud was reported by the Internal Auditor of theCompany in their Audit Report.
VIGIL MECHANISM /WHISTLE BLOWER POLICY
Your Company is committed to highest standards of ethical moral and legal businessconduct. Accordingly the Board of Directors has formulated a Whistle Blower Policy whichis in compliance with the provisions of Section 177(9) of the Act and Regulation 22 ofListing Regulations. The policy provides a framework and process whereby concerns can beraised by its employees against any kind of discrimination harassment victimization orany other unfair practice being adopted against them and can also report directly to theChairman of Audit Committee. The policy focuses on promoting ethical behavior in all itsbusiness activities and encourages employees to report concerns and unethical behavioractual or suspected fraud or violation of the company's code of conduct and ethics. Underthe said mechanism employees are free to report violations of applicable laws andregulations and the Code of Conduct. It also provides for adequate safeguards against thevictimization of persons who use this mechanism. The Vigil Mechanism/Whistle Blower Policyhas been posted on the Company 's website athttps://www.reliancechemotex.com/reports/code-of-conduct- and-policies/. The functioningof the Vigil Mechanism is reviewed by the Audit Committee from time to time. The Companyaffirms that no director/employee has been denied access to the Chairman of the AuditCommittee and that no compliant was received during the year.
CORPORATE SOCIAL RESPONSIBILITY
In terms of requirements of Section 135 of the Act and rules issued there under theBoard of Directors of the company has constituted a Corporate Social ResponsibilityCommittee ("CSR Committee") comprising of Mr. K.L. Sonthalia Mr.R.N. Sharma and Mr. Rahul Shroff. Mr. K.L. Sonthalia Chairman of the CSR Committee passedaway on November 21 2020. Due to his sad demise the CSR Committee was reconstituted inthe Board Meeting held on February 10 2021. Consequently Mr. R. N. Sharma was appointedas the chairperson and Mr. Ramadoss Srinivasan was inducted as the member to the CSRCommittee in the Board Meeting held on February 10 2021.
This committee is responsible for formulating implementing and monitoring the CSRPolicy of the company. The policy on CSR can be accessed on the Company's website athttps://www.reliancechemotex.com/reports/code-of-conduct- and-policies/.
During the year under review the company has spent Rs 2024288/-towards CSRactivities which includes unspent amount of Rs.713102 for the F.Y. 2019-20. Thedetailed report on CSR Activities as required under the Act is set out in the Annexure-4.
RISK MANAGEMENT POLICY
The Audit Committee closely monitors all risks that could have a negative impact on theCompany. Our Risk Management framework encompasses practices related to theidentification analysis evaluation treatment mitigation and monitoring of thestrategic operational legal and compliance risks to achieving our key businessobjectives. Risks which were reviewed by the Audit Committee are Financial RiskCompliance Risk Hazardous Risk and Employee Related Risk Liquidity Risk Commodity Riskand Market risk. The focus of Committee is to assess risks and deploy mitigation measures.In accordance with Listing Regulation the Board members were informed of risk assessmentand minimization procedures after which the Board formally adopted steps for framingimplementing and monitoring the risk management plan for the Company. In order to achievethe key objectives the policy establishes a structured and disciplined approach to RiskManagement in order to guide decisions on risk- related issues.
DISCLOSURE UNDER THE SEXUAL HARRASAMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has always believed in providing a safe and harassment-free workplace forevery individual through various interventions and practices. The Company always endeavorsto create and provide an environment that is free from discrimination and harassmentincluding sexual harassment.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. The Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. Following are the details of sexualharassment cases for the financial year 2020-21.
|Sr. No. of complaints No. received during the financial year ||No. of complaints disposed off during the Year ||No. of Complaints pending as at the end of the financial year |
|1 NIL ||NIL ||NIL |
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act the Annual Return ason March 31 2021 is available on the Company's websitehttps://www.reliancechemotex.com/reports/financial-reports/
During the Financial Year 2020-21 your Company has not invited accepted or renewedany deposits within the meaning of Section 73 74 and 76 of the Act read together with theCompanies (Acceptance of Deposit) Rules 2014 as amended. The Borrowing taken from theDirectors is stated in the financial statement note no.18.
INTERNAL FINANCIAL CONTROL SYSTEM
For detailed discussion with reference to adequacy of internal financial controlsplease refer to Management Discussion and Analysis Report annexed to this report as Annexure-7.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:
Your Company continuously strives to conserve energy adopt environment friendlypractices and employ technology for more efficient operations.
The statement pursuant to Section 134 (3)(m) of the Act read with the Rule 8(3) of TheCompanies (Accounts) Rules 2014 regarding particulars relating to conservation of energytechnology absorption foreign exchange earnings and outgo as required to be disclosedunder the Act is provided in Annexure 1.
NOMINATION & REMUNERATION POLICY
The Board of Directors has framed the policy on Nomination & Remuneration whichlays down the framework in relation to the selection appointment and remuneration ofDirectors Key Managerial Person and Senior Management of the Company. The Nomination& Remuneration Policy has been posted on the Company's websitehttps://www.reliancechemotex.com/reports/code-of-conduct- and-policies/ and the salientfeatures of the policy form a part of the Annual report.
PARTICULARS OF EMPLOYEES & THEIR DISCLOSURES:
Disclosures relating to remuneration of Directors u/s 197(12) of the Act read withRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed as Annexure 5 to this Report.
The information as required to be provided in terms of Section 197 (12) of the Act readwith Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel)Rules2014 is annexed as Annexure 6 to this Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Pursuant to Regulation 34 of the Listing Regulations the operations of the company arereviewed in detail in the
Management Discussion and Analysis Report which is annexed to this report as Annexure-7.
REPORT ON CORPORATE GOVERNANCE
Your Company is compliant with the norms on Corporate Governance as provided in theListing Regulations. Report on Corporate Governance for financial year 2020-21 is annexedto this report as Annexure -8.
DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared in accordance with Indian Accounting Standards(Ind AS). The IND AS are prescribed under section 133 of the Act read with rule 3 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Amendment Rules 2016. Accounting Policies have been consistently appliedexcept where a newly issued accounting standard is initially adopted or a revision to anexisting accounting standard requires a change in the accounting policy hitherto in use.
Pursuant to the provisions of Section 118 of the Companies Act 2013 the Company hascomplied with the applicable provisions of the Secretarial Standards issued by theInstitute of Companies Secretaries of India and notified by Ministry of Corporate Affairs.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement of Section 134(3)of the Act with respect to Directors'Responsibility Statement the Board of Directors hereby state and confirm that:
(I) in the preparation of the annual accounts for the year ended March 31 2021 theapplicable accounting standards and schedule III of the Companies Act 2013 have beenfollowed and there are no material departures from this;
(ii) Appropriate accounting policies have been selected and these have been appliedconsistently and that the judgments and estimates that have been made are reasonable andprudent so as to provide a true and fair view of the state of affairs of the Company atthe end of the financial year and of the profit or loss of the Company for that period;
(iii) Proper and sufficient care has been taken in the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 tosafeguard the assets of the Company and to prevent or detect fraud and otherirregularities;
(iv) The annual accounts for the year ended March 31 2021 have been prepared on agoing concern basis;
(v) Robust and detailed Internal Financial Controls to be followed by the Company havebeen laid; and
(vi) An appropriate system has been devised to ensure that your Company is compliantwith all applicable provisions and statutory requirements. These systems were adequate andoperating effectively.
Certain statements in this Board's Report and Management Discussion and Analysisdescribing the Company's objectives projections estimates and expectations maybe"forward-looking statements" within the meaning of applicable laws andregulations. Forward-looking statements are identified in this report by using words like"anticipates" "believes" "expects" "intends"and other similar expressions in such statements. Although we believe our expectations arebased on reasonable assumptions these forward-looking statements may be influenced bynumerous risks and uncertainties that could cause actual outcomes and results to bematerially different from those expressed or implied. Some of these risks anduncertainties have been discussed in the section on "Risk Management". Thecompany takes no responsibility for any consequence of decisions made based on suchstatements and holds no obligation to update these in the future. Market data andinformation has been gathered from various published and unpublished reports. Theiraccuracy reliability and completeness cannot be assured.
APPRECIATION & ACKNOWLEDGMENT
The Directors thank the Company's employees customers vendors investors and academicpartners for their continuous support. The Directors also thank the Government of IndiaGovernments of various states in India Governments of various countries and concernedGovernment departments and agencies for their co-operation. The Directors appreciate andvalue the contribution made by every member of the RCIL family.
FOR AND ON BEHALF OF BOARD OF DIRECTORS
FOR RELIANCE CHEMOTEX INDUSTRIES LIMITED
|Place: Mumbai ||(Sanjiv Shroff) ||(Rahul Shroff) |
|Date: June 21 2021 ||Managing Director ||Whole-Time Director |
| ||DIN:00296008 ||DIN: 02301693 |