The Directors present the Annual Report together with the auditedBalance Sheet and the Statement of Profit and Loss and other financial statements of RSWMLimited for the year ended March 31 2020.
Your Company's performance during the year 2019-20 is summarized below:
| ||2019-20 ||2018-19 |
|Turnover || || |
|Export ||827.23 ||1020.17 |
|Domestic ||1943.80 ||1940.41 |
|TOTAL ||2771.03 ||2960.58 |
|Profit before Interest & Depreciation ||263.74 ||210.01 |
|Less: Interest/Finance Cost ||108.51 ||119.52 |
|Profit before Depreciation & Amortisation ||155.23 ||90.49 |
|Less: Depreciation & Amortization ||131.67 ||123.28 |
|Profit/(Loss) before Tax ||23.56 ||(32.79) |
|Less: Current Tax ||17.09 ||Nil |
|Deferred Tax Liability/(Asset) ||(16.20) ||(8.52) |
|Profit/(Loss) after Tax ||22.67 ||(24.27) |
|Add: Opening Balance ||352.40 ||354.24 |
|Add: Profit on Sale of Equity shares held in HEG Limited ||78.58 ||29.73 |
|Less: Dividends & Others ||0.75 ||7.30 |
|Profit available for appropriation ||454.40 ||352.40 |
Number of Meetings of the Board
The particulars of the meetings held during the year along with thedetails regarding the meetings attended by the Directors form part of the CorporateGovernance Report.
The composition of the Board and its Committees has also been given indetail in the report on Corporate Governance.
Dividend and other Appropriations
Keeping in mind the financial position of the Company during thefinancial year under review your Directors do not recommend any dividend on the EquityShares of the Company.
No amount is proposed to be transferred to General Reserve. The amountavailable for appropriation '49.10 Crore has been carried over to next year. OperationalPerformance
Your Directors inform the members that during the year under reviewyour Company faced unprecedented challenges due to global economic slowdown including thedomestic markets. Your Company geared itself and took all measures to withstand thechallenges particularly in the second half of financial year. Due to these steps yourCompany was able to achieve better performance. Though the Company recorded a lowerturnover at '2771.03 Crores as against '2960.58 Crores partially due to lockdown at thefag end of the financial year the operating profit of the Company improved significantlyat '263.74 Crores against '210.01 Crores in the previous financial year. Profit beforedepreciation also increased to '155.23 Crores against '90.49 Crores recorded in theprevious financial year. The Company also recorded profit after tax of '22.67 Croresagainst a loss of '24.27 Crores in the previous year. Your Directors inform the memberthat the financial statements of your Company had been drawn on the IND-AS for thefinancial year ended March 312020 with comparatives.
Your Company took various decisions and steps during the year underreview to overcome these challenges which included rationalisation of costs monetizationof investments and sale of surplus land and fixed assets. The Company also focused onexploring new markets in the vague of economic slowdown in the existing markets and alsoworked on improving and innovating the product mix as well as operational efficiency.However towards the end of current financial year the global world faces anotherchallenge in the form of COVID-19 the impact of which would be known in due
course. Your Company is also aware of the challenges and taking allsteps to counter the post challenges.
The analytical review of the Company's performance and its businessesincluding initiatives in the areas of human resources and information technology has beenpresented in the section on Management Discussion and Analysis forming part of the AnnualReport.
Working results of last three financial years 2017-18 to 2019-20 aregiven in Annexure - I and form part of this report.
Expansion and Modernization
Your Directors inform the members that the Company did not incur anyfurther capital expenditure on expansion and modernization programme due to difficulteconomic conditions during the year under review except the normal capex for smoothrunning of the operations of the Company. However your Directors are pleased to informthe members that ongoing Capex on implementation of ERP Phase 2 at Denim and FabricDivisions was completed within its stipulated budget of '7 Crores.
Your Company is closely observing the economic conditions and takingall measures to boost its performance as soon as the global economic situation improve.
Subsidiary Companies Joint Ventures &Associates
Your Directors in their previous report had informed the members aboutthe investment by the Company in M/s. LNJ Skills & Rozgar Private Limited which isinvolved in skill development related activities. Your Directors also reported in theprevious report that your Company acquired 54.26% shareholding in M/s. LNJ Skills &Rozgar Private Limited at an investment of '11.80 Crores and acquired 1180000 Equityshares in the Company. M/s. LNJ Skills & Rozgar Private Limited became subsidiary ofyour Company w.e.f. November 2018. Your Directors further inform the members that M/s.LNJ Skills & Rozgar Private Limited subsequently ceased to be the subsidiary of theCompany in April 2019 with the allotment of equity shares by them to other entities tofurther their business. However your Company continues to hold 47.30% shareholding inM/s. LNJ Skills & Rozgar Private Limited and therefore it has acquired the status ofAssociate of your Company. Your Directors are hopeful that with this investment yourCompany would continue to contribute its bit in enhancing the skill levels of ourcountrymen.
Yours Directors in their previous report informed the members that HeroWind Energy Private Limited who acquired the stake of M/s. LNJ Power Ventures Limitedhad become Joint Venture partner with the Company. Your Directors are of the view thatthere is no significant influence of your Company on the operations of M/s. LNJ PowerVentures Limited throughout the year and therefore it no longer remains Associate of yourCompany from April 2018 onwards.
Further as reported in the previous report your Company is holdingsignificant investment in Bhilwara Energy Limited and is represented
by Shri Riju Jhunjhunwala Chairman and Managing Director of yourCompany on their Board where also he is holding the position of Managing Director. YourDirectors inform the members that your Company sold its investment in M/s. Bhilwara EnergyLimited comprising of 16938599 equity shares of '10/- each constituting 10.21% to M/s.HEG Limited as approved by your Board on 10th April 2019 for a consideration of '84.85Crores. However your Company continues to hold 12524960 Equity Shares constituting7.56% of paid up capital in M/s. Bhilwara Energy Limited. Your Directors are of the viewthat your Company continues to exercise its significant influence on BEL by therepresentation of Shri Riju Jhunjhunwala Chairman and Managing Director on the Board ofBEL and accordingly continue to treat M/s. Bhilwara Energy Limited as its Associate.Accordingly M/s Bhilwara Energy Limited continues to be Associate of your Company.
A statement containing the salient features of the financial statementsof M/s. LNJ Skills & Rozgar Private Limited and M/s. Bhilwara Energy Limited in theprescribed format AOC 1 is annexed as Annexure - II.
Contribution to the Exchequer
Your Company has contributed an amount of '263.65 crores in terms oftaxes and duties to the Exchequer.
Corporate Social Responsibility
Your Directors feel pleasure to inform the members that your Companyhas been on the forefront to fulfil its obligation towards the society at large andaccordingly made its contribution in whole gamut of activities such as sanitation and safedrinking water eradicating hunger poverty and malnutrition promoting education skillsdevelopment empowering women ensuring environmental sustainability ecological balanceprotection of national heritage help to armed forces veterans and promotion of ruralsports etc. During the financial year 2019-20 your Company has incurred '0.82 crore onaccount of CSR activities which includes health care sanitation & safe drinking water'0.21 crore; promoting education skills development '0.26 crore; ensuring environmentsustainability ecology balance '0.10 crore protection of national heritage culture'0.19 crore and towards empowering women help to armed forces veterans & training topromote rural sports '0.06 crore.
Your Directors inform the members that the Corporate SocialResponsibility Committee comprising of Shri Arun Churiwal Shri Riju Jhunjhunwala and ShriAmar Nath Choudhary monitors the expenditure incurred on the CSR activities and formulatean annual budget for these activities. Your Directors also review the progressperiodically.
The details of the CSR spent by the Company are annexed as Annexure IIIforming part of this report.
Energy Conservation Technology Absorption and Foreign ExchangeEarnings and Outgo
Your Directors inform the members that your Company continuously looksout for energy conservation measures in all areas of operation across its various Units.Similarly your Company endeavors to lookout for up-gradation and absorption of technology.Your Company also spends continuously on Research and Development. Your Directors are gladto inform the members that your Company is a net foreign exchange earner. The relevantdetail as required to be disclosed with respect to Energy Conservation Technologyabsorption and Foreign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of theCompanies Act 2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2014 aregiven in Annexure - IV forming part of this report.
Extract of Annual Return
Pursuant to Section 92 of the Companies Act 2013 read with Rule 12 ofThe Companies (Management and Administration) Rules 2014 the extract of Annual Return inprescribed format MGT-9 is annexed as Annexure - V.
Directors & Key Managerial Personnel
Shri Ravi Jhunjhunwala and Shri Arun Churiwal Directors retire byrotation and being eligible offer themselves for reappointment.
During the financial year under review Shri Dharmendar Nath DavarIndependent Director resigned from the Board with effect from 24th July 2019 due tohealth reasons. Further Shri Jagdish Chandra Laddha Non Independent Director alsoresigned from the Board with effect from 31st July 2019 due to other commitments. YourDirectors place on record their appreciation for the services rendered by Shri DharmendarNath Davar and Shri Jagdish Chandra Laddha during their tenure on the Board. YourDirectors further inform the members that the members of the Company at the previousAnnual General Meeting of the Company held on 11th September 2019 approved there-appointment of Dr. Kamal Gupta and Shri Amar Nath Choudhary as Independent Directorsfor the second term of five years commencing from 16th September 2019 by SpecialResolution(s).
Your Directors further inform the members that declarations have beentaken from the Independent Directors at the beginning of the financial year stating thatthey meet the criteria of independence as specified under sub-section (6) of Section 149of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Your Directors inform the members that at its meeting held on 15thJune 2020 Shri Ravi Jhunjhunwala Chairman and Shri Shekhar Agarwal Vice Chairman of theBoard expressed their desire to relinquish from the Chairmanship and Vice Chairmanshiprespectively keeping in view the natural progression and succession planning. YourDirectors agreed to respect their wish and requested them to provide their continuousguidance by continuing on the Board which was agreed to by them.
The Board of Directors of the Company subsequently elected Shri RijuJhunjhunwala Managing Director as the new Chairman of the Board with immediate effectconsidering his long standing association and familiarity with the Company's business.Your Directors are hopeful that your Company shall continue to progress under theleadership of Shri Riju Jhunjhunwala.
Your Directors at the above meeting also approved the reappointment ofShri B.M. Sharma as Joint Managing Director of the Company upon commendation of Nominationand Remuneration Committee for a further period of two years with effect from 7th August2020 after the completion of his present term on 6th August 2020. The proposal withregard to his reappointment would be put up at ensuing Annual General Meeting for approvalof the Members.
During the year Shri Riju Jhunjhunwala Managing Director & ChiefExecutive Officer Shri Brij Mohan Sharma Joint Managing Director & Chief FinancialOfficer and Shri Surender Gupta Company Secretary acted as Key Managerial Personnel.
Directors' Appointment and Remuneration Policy
As your Directors informed the members in their previous report aNomination and Remuneration Policy had been framed by your Company for the appointment ofDirectors and Senior Management and fixation of their remuneration. The Nomination andRemuneration Policy as framed is annexed as Annexure VI and forms part of this report.
Your Directors inform the members that the Nomination and RemunerationCommittee as well your Directors endeavor to follow the policy and all appointments atBoard and Senior Management are considered at the meetings of the Committee and the Board.
Annual Evaluation by the Board
Your Board of Directors during the financial year under reviewcarried out annual evaluation of its own performance as well as its Committees and also ofthe individual Directors in the manner as enumerated in the Nomination and RemunerationPolicy in accordance with the provisions of Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Your Directors feel pleasurein informing the members that the performance of the Board as a whole and its membersindividually was adjudged satisfactory.
Particulars of Loans Guarantees or Investments
Details of Loans Guarantees and Investments are given in the Notes tothe Financial Statements at appropriate places.
Particulars of Contracts or Arrangements with Related Parties
All contracts/ arrangements/ transactions entered into by the Companyduring the financial year with the related parties are on arm's length basis and in theordinary course of business. During the financial year there were no material contractsor arrangements entered into by the Company with any of the related party. Your Directorsdraw attention of the members to Note No.39 to the financial statement which containparticulars with respect to transactions with related parties. The policy on dealing withthe related party transactions as approved by the Board of Directors is disclosed on thewebsite of the Company under the following linkhttps://www.rswm.in/wp-content/uploads/2020/05/Related-Party- Transaction-Policy.pdf
Significant and Material Orders Passed by the Regulators or Courts
During the year under review there were no significant and materialsorders passed by the Regulators or Courts.
Risk Management Policy
The Company has adopted the risk management policy which aimed atcreating and protecting shareholders value by minimizing threats and losses andidentifying and maximizing opportunities. Your Directors periodically review the risksassociated with the business or which threaten the prospects of the Company.
Internal Control Systems
Your Directors inform the members that your Company has put in placestrong internal control systems commensurate with the size of the Company. Further yourDirectors take utmost care to ensure that all assets are properly safeguarded and reliableinformation is provided to the management. Your Directors endeavor to inform the membersthat all the obligations of the Company are properly adhered to.
Your Directors place utmost importance on continuous strengthening ofinternal control systems. As reported in the previous report your Company has put inplace a system whereby all areas of the operations of the Company are reviewed by theinternal as well as external professionals and independent audit firms. Your Company takesadequate measures with respect to gaps if any reported. The Audit Committee of yourCompany regularly monitors the annual operating plans risk assessment and minimizationprocedures as well as mitigation plans.
Your Directors endeavor to continuously improve and monitor theinternal control systems.
Particulars of Employees
The information pursuant to Section 197 read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 of theemployees is annexed as Annexure -VII.
Further pursuant to Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the relevant statement is annexed asAnnexure - VIII.
As your Directors informed the members in their previous report M/s.
S. S. Kothari Mehta & Co. Chartered Accountants (Firm RegistrationNo.000756N) Joint Statutory Auditors of the Company who were appointed at the 53rdAnnual General Meeting of the Company held on 16th September 2014 for a term of 5 yearshave been reappointed for second term of five years from the conclusion of 58th AnnualGeneral Meeting of the Company held on 11th September 2019 till the conclusion of 63rdAnnual General Meeting of the Company in accordance with the provisions of Section 139 ofthe Companies Act 2013.
M/s. Lodha & Co Chartered Accountants (Firm RegistrationNo.301051E) were appointed as Joint Statutory Auditors of the Company at the 56th AnnualGeneral Meeting of the Company held on 27th September 2017 for a term of 5 years till theconclusion of 61st Annual General Meeting and accordingly continue with their term till61st Annual General Meeting of the Company.
Further both the Statutory Auditors have confirmed their eligibilityunder Section 141 of the Companies Act 2013 and the Rules framed there under.
The observations of the Auditors if any are explained wherevernecessary in the appropriate notes to the accounts. The Auditors' Report does not containqualification reservation or adverse remark.
Your Directors during the year under review appointed M/s. P.K. Deora& Co. Chartered Accountants (Firm Registration No.004167N) M/s. BGJC &Associates LLP Chartered Accountants (Firm Registration No.003304N) and M/s. ASM Bhargava& Co. Chartered Accountants (Firm Registration No.019378C) to act as the InternalAuditors of the Company for the financial year 2019-20 pursuant to section 138 of theCompanies Act
2013 read with The Companies (Accounts) Rules 2014.
Your Directors during the year under review also appointed ShriMahesh Gupta Practicing Company Secretary (Membership No. FCS 2870 and CP No.1999)Proprietor of M/s Mahesh Gupta & Company Company Secretaries Delhi as theSecretarial Auditor of the Company for the financial year 2019-20 pursuant to Section 204of the Companies Act
2013 read with The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Report of Secretarial Audit is annexed as AnnexureIX.
Your Directors inform the Members that Pursuant to Section 148 of theCompanies Act 2013 read with The Companies (Cost Records and Audit) Rules 2014 TextileCompanies are required to get their cost records audited. In this connection the Board ofDirectors of the Company on the commendation of Audit Committee had approved theappointment of M/s. N. D. Birla & Company Cost Accountants (Firm Registration No.000028) Ahmedabad as the Cost Auditor of the Company for the year ending March 31 2020.
Report on Corporate Governance along with the Certificate of AuditorsM/s. S. S. Kothari Mehta & Co. Chartered Accountants (Firm Registration No 000756N)Plot No-68 Okhla Industrial Area Phase III New Delhi
-110020 and M/s. Lodha & Co. Chartered Accountants (FirmRegistration No.301051E) 12 Bhagat Singh Marg New Delhi - 110001 confirming complianceto conditions of Corporate Governance as stipulated under SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 form part of the Annual Report.
Whistle Blower Policy
Your Directors inform the Members that with the objective of pursuingthe business in a fair and transparent manner by adopting the highest standards ofprofessionalism honesty integrity and ethical behavior and to encourage and protect theemployees who wish to raise and report their genuine concerns about any unethicalbehavior actual or suspected fraud or violation of Company's Code of Conduct the Companyhas adopted a Whistle Blower Policy. Policy adopted by the Company contains a frameworkwhereby the identity of the complainant is not disclosed. The policy has been disclosed onthe website of the Company the link of which is given hereunder:
Management Discussion and Analysis Report
Management Discussion and Analysis Report as required by SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
Directors' Responsibility Statement.
Pursuant to Section 134(3) (c) of the Companies Act 2013 theDirectors state that:
(a) In the preparation of the annual accounts the applicableaccounting standards had been followed along with proper explanation relating to materialdepartures;
(b) They had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company for that period;
(c) They had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(d) They had prepared the annual accounts on a going concern basis; and
(e) They had laid down internal financial controls to be followed bythe Company and that such internal financial controls are adequate and were operatingeffectively.
(f) They had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Your Directors take this opportunity to thank Customers MembersSuppliers Bankers Business Partners/Associates Central and State Governments for theirconsistent support and co-operation extended to the Company. We also acknowledge thesignificant contribution made by the employees by their dedication and hard work and trustreposed on us. We look forward to have the same support in our endeavor to help theCompany to grow faster.
| ||For and on behalf of the Board |
| ||Riju Jhunjhunwala |
|Place: Noida (U.P) ||Chairman & Managing Director |
|Date: June 15 2020 ||DIN - 00061060 |