The Directors present the Annual Report together with the auditedBalance Sheet and the Statement of Profit and Loss of RSWM Limited for the year endedMarch 31 2018.
Your Company's performance during the year 2017-2018 is summarizedbelow:
|Financial Results || || |
| || ||(Rs in Crores) |
| || |
|Turnover || || |
|Export ||964.90 ||917.29 |
|Domestic ||1978.19 ||2078.91 |
|Total ||2943.09 ||2996.20 |
|Profit before Interest & Depreciation ||263.08 ||357.87 |
|Less: Interest/Finance Cost ||117.29 ||110.36 |
|Profit before Depreciation & Amortisation ||145.79 ||247.51 |
|Less: Depreciation & Amortisation ||124.48 ||132.17 |
|Profit/(Loss) before Tax ||21.32 ||115.34 |
|Less: Current Tax ||4.55 ||24.30 |
|Tax of earlier years provided (written back) ||(0.05) ||0.11 |
|Deferred Tax Liability ||2.32 ||(10.04) |
|Profit/(Loss) after Tax ||14.50 ||100.97 |
|Add: Opening Balance ||371.95 ||311.27 |
|Less: Dividends & Others ||32.21 ||40.29 |
|Profit available for appropriation ||354.24 ||371.95 |
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
Your Directors are pleased to recommend a dividend on Equity
Shares @ 20% i.e. H2 per Equity Share of H10/- each for the year endedthe March 31 2018.
The proposal for payment of dividend on Equity Shares of the
Company will absorb an amount of H5.70 Crore (inclusive of dividenddistribution tax).
The proposal with regard to the payment of dividend on Equity
Shares for the year ended March 31 2018 shall be placed before theshareholders at the ensuing Annual General Meeting. No amount is proposed to betransferred to General Reserve. The amount of H49.10 crore has been carried over to nextyear.
Your Directors inform the members that during the year under reviewthe operations of the Company stabilised from the aftermath of demonetisation. Howeverthe bigger economic event of implementation of Goods and Service Tax w.e.f July 1 2017impacted the overall business sentiments particularly in the 1st half of the FinancialYear. Your Company geared itself to face the challenges and made all efforts to continueits operations with full efficiency and Despite all the difficulties your decrease inturnover at H2943.09 Crores against H2996.20 Crores in the previous year. Howeveroperating profitof the Company declined to H263.08 crore fromH357.87 crore recorded in theto previous year. Profit H145.79 Crores against H247.51 Crores recorded in the previousyear and the profit H14.50 Crores against H100.97 Crores in the previous year. YourDirectors inform the member that drawn on thethefinancial Ind-AS for the financial yearended March 31 2018 with comparatives.
Your Company took various steps to overcome the situation whichincluded rationalisation modernisation and capex programme on need priority basis. Apartfrom this the Company enhanced its focus on marketing and value addition to achieve theoptimum with better on cost reduction to improve the product mix and improving efficiency.Your Directors inform profitability of the the members that due to above steps the Companyimproved substantially in the second half of the Financial Year under review. The abovemeasures are expected to result positively in the current Financial Year also.
The analytical review of the Company's performance and itsbusinesses including initiatives in the areas of human resources and informationtechnology have been presented in the section on Management Discussion and Analysis ofthe Annual Report Working results of last three financial 18 are given in Annexure 1 andform part of this report.
Expansion and Modernization
Your Directors in their previous report had reported about thecommissioning of Denim Sheet Dyeing project which resulted in enhancing the productioncapacity of Denim Fabric to 25 million meters from 17 million meters per annum. Howeverthe full benefitsof this expansion could not be realized due to market conditions in thebackdrop of GST implementation.
Your Directors had also reported in previous report about thecompletion of phase-I of debottlenecking and up-gradation of equipments and facilitiesacross various units of the
Company. Your Directors had also reported the initiation of phase II ofTechnology up-gradation & debottlenecking programme to further modernise thefacilities and equipments at various units of the Company. Your Directors feel pleasure ininforming the members that this programme has been completed during the year at a capital. outlay of H42.29 crores. The above programme has resulted in modernising Companyrecorded a marginal the equipment and facilities across various units of the
Company. Your Directors further inform the members that your Companyduring the year had installed and operationalised. 3.6 M.W Roof Top Solar Power facilityat its Mandpam and Kanyakheri Units which had been built at a total cost of H16.05 crores.
Your Directors inform the members that your Company has outlinedfurther capex of H56.55 crores for modernisation of spinning facility at Ringus unit aswell as expansion of capacity of Recycled Polyester Fibre at the same location. Thisprogramme is likely to be operational in the current financial year.
Your Directors are hopeful that with the completion of debottleneckingand up-gradation of facilities as well implementation of new initiatives the overallproductivity profitability of the Company will improve considerably.
Subsidiary Companies Joint Ventures & Associates
Your Directors inform the members that during the financialyear underreview your Company has no Subsidiary.
During the year under review your Company continued to receive windpower supply from LNJ Power Ventures Limited. This green power initiative also enablesyour Company to meet its Renewable Power Obligations. Your Directors further inform . themembers that during the year its Joint Venture partner M/s Bhilwara Energy Limited exitedfrom the Wind Power business years 2015-16 to 2017 and accordingly M/s Hero Wind EnergyPrivate Limited were inducted as Joint Venture partner in their place.
Further as reported in the previous report your Company is holdingsignificant investment in is represented by Shri Riju Jhunjhunwala Managing Director ofyour Company on their Board where also he is holding the position of Managing Director.Accordingly M/s Bhilwara Energy Limited continues to be associate of your Company.
Your Directors inform the members that in line with the emphasis ofgovernment on Skill Development your Company decided to undertake the skill developmentrelated activities and accordingly acquired 40.66% stake in the form of subscription of750000 shares in LNJ Skills & Rozgar Private Limited which is involved in skilldevelopment activities. Accordingly LNJ Skills & Rozgar Private Limited has becomeassociate of your Company. A statement containing the salient features of the financialstatements of LNJ Power Ventures Limited Bhilwara Energy
Limited and LNJ Skills & Rozgar Private Limited in the prescribedformat AOC 1 is annexed as Annexure - II.
Contribution to the Exchequer
Your Company has contributed an amount of H 267.55 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 ensuring environmentalsustainability ecological balance protection of national heritage promotion of ruralsports etc. Your Directors in their previous report had informed the members that at therequest of State Government of Rajasthan your Company had undertaken to build the damagedwall of Check Dam at Beneshwar near Mordi Banswara. Your Directors feel pleasure toinform the members that during the year under review an amount of H99.37 lakhs was spenttowards this project. Your Company also sponsored for Rajasthan Heritage DevelopmentProject. An amount of H10 lakhs was incurred towards this. These activities were besidesthe other activities undertaken by the Company from time to time.
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 spend 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 endeavours to lookout for up-gradation and absorption oftechnology. Your Company also spends continuously on Research and Development. YourDirectors are glad to inform the members that your Company is a net foreign exchangeearner. The relevant detail as required to be disclosed with respect to EnergyConservation Technology Absorption and Foreign Exchange Earnings and Outgo pursuant toSection 134(3) (m) of the Companies Act 2013 read with the Rule 8(3) of the Companies(Accounts) Rules 2014 are given 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 Smt. Geeta Mathur IndependentWoman Director resigned from the Board with effect from 9th November 2017 due to her timecommitments. Further Shri Prakash Maheshwari Executive Director also resigned from theBoard with effect from 31st March 2018 due to completion of his term. Your Directorsplace on record their appreciation for the services rendered by Smt. Geeta Mathur and ShriPrakash Maheshwari during their tenure on the Board.
Your Directors further inform the members that Smt. Archana Capoor wasco-opted on the Board as an Additional Director in the category of Independent Directorwith effect from 13th February 2018. Smt. Archana Capoor brings with her vast experiencein the field of Finance and Market Research. Your Directors further inform the membersthat the term of Shri Priya Shankar Dasgupta as Independent Director is due for completionon 15th September 2018. Your Directors upon commendation of Nomination and RemunerationCommittee proposed to reappoint Shri Priya Shankar Dasgupta for the second term of 5 yearsw.e.f 16th September 2018. The proposal for of appointment of Smt Archana Capoor andre-appointment of Shri Priya Shankar Dasgupta as Independent Director(s) for a term of 5years shall be put up before the ensuing Annual General Meeting.
Your Directors further inform the members that declarations have beentaken from the Independent Directors at the beginning of the financialyear stating thatthey meet the criteria of independence as specifiedunder sub-section (6) of Section 149 ofthe Companies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
During the year Shri Riju Jhunjhunwala Managing Director & CEOShri Surender Gupta Company Secretary and Shri B.M. Sharma Chief Financial Officer actedas 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
Remuneration Committee as well your Directors endeavour to follow thepolicy and all appointments at Board and Senior
Management are considered at the meetings of the Committee and theBoard.
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 thefinancialyear with the related parties are on arm's length basis and in theordinary course of business. During the financial arrangements entered into by the Companywith any of the related party. Your Directors draw attention of the members to Note No.39to the financialstatements which contain particulars with respect to related parties. Thepolicy on dealing with the related party transactions as approved by the Board ofDirectors is disclosed on the website of the Company under the following link
Significant and Material
Regulators or Courts
During the year under review there were no significant 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 commensurating 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 endeavour to inform the memberthat all the obligations of the Company are properly adhered to.
Your Directors place utmost importance on continuous strengthening ofinternal control systems. As reported previous report your Company has put in place asystem whereby all areas of the operations of the Company are reviewed by the internal aswell as external professionals and independent audit firms. Your Company takes adequatemeasures with respect to gaps if any reported. The Audit Committee of your Companyregularly monitors the annual operating plans risk assessment and minimization proceduresas well as mitigation plans. year there was no material contracts or
Your Directors endeavour 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.
During the year under review M/s S. Bhargava Associates CharteredAccountant (Firm Registration No 003191C) Joint
Statutory Auditors of the Company retired at the conclusion of the 56thAnnual General Meeting as they became ineligible for re-appointment pursuant to Section139 of the Companies Act 2013 and rules made thereunder. M/s S. Bhargava & Associatesrendered their services over the years and your Board places on record its appreciation oftheir services as Joint Statutory year Auditors of the Company.
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 subject to ratification by members at everysubsequent Annual General Meeting. Further M/s S. S. Kothari Mehta & Co. CharteredAccountants (Firm Registration No.000756N) Joint Statutory Auditors of the Company wereappointed at the 53rd Annual General Meeting of the Company held on September 16 2014 fora term of 5 years till the conclusion of 58th Annual General Meeting subject toratification by members at every Meeting.
Your Directors inform the members that in accordance with the 7th May2018 the requirement amendmentnotified of ratification of the appointment of AnnualGeneral Meeting has been omitted and is no longer required. Accordingly the noticeconvening the ensuing Annual General Meeting does not carry resolutions with regard toratification of appointment of Statutory Auditors.
However both the Statutory Auditors have confirmed their eligibilityunder Section 141 of the Companies Act 2013 and the Rules framed thereunder.
The observations of the Auditors if any are explained wherevernecessary in the appropriate notes to the accounts. The Auditors' Report does notcontain qualification 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 2017-18 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 -18 pursuant to Section oftheCompanyforthefinancial 204 of theCompanies Act 2013 read with The Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014. The Report of Secretarial Audit is annexed as Annexure IX.
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 the appointment of M/s. N. D. Birla &Company Cost Accountants (Firm Registration No. 000028) Ahmedabad as the Cost Auditorof the Company for the year subsequentAnnualGeneral ending March 31 2018.
Report on Corporate Governance along with the Certificate of StatutoryAuditors at every Auditors M/s. S. S. Kothari Mehta & Co. Chartered Accountants (FirmRegistration No 000756N) Plot No-68 Okhla Industrial Area Phase III New Delhi -110020and M/s. Lodha & Co. Chartered Accountants (Firm Registration No.301051E) 12 BhagatSingh Marg New Delhi 110 001 confirming compliance to conditions of Corporate Governanceas stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 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 theCompany has adopted a Whistle Blower Policy. Policy adopted by the Company contains aframework whereby the identity of the complainant is not disclosed. The policy has beendisclosed on the website of the Company the link of which is given hereunder:http://www.rswm.in/wp-content/themes/rswm/template-investors/pdf/various-policies/RSWM-Whistle-Blower-Policy-2018.pdf
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 them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe 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 laiddown internal financial controls to be followed by the Company financialcontrols and thatsuch internal are adequate and were operating effectively.
(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 their consistent support andco-operation extended to the Company. We also acknowledge the significant contributionmade by dedication and hard work and trust reposed on us. We look forward to have the samesupport in our endeavour to help the
Company to grow faster.
For and on behalf of the Board
DIN - 00060972
Place: Noida (U.P) Date: May 10 2018