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RSWM Ltd.

BSE: 500350 Sector: Industrials
NSE: RSWM ISIN Code: INE611A01016
BSE 00:00 | 20 May 435.70 10.30
(2.42%)
OPEN

430.35

HIGH

441.15

LOW

425.00

NSE 00:00 | 20 May 436.55 11.10
(2.61%)
OPEN

431.95

HIGH

441.55

LOW

424.60

OPEN 430.35
PREVIOUS CLOSE 425.40
VOLUME 12232
52-Week high 572.60
52-Week low 231.30
P/E 5.05
Mkt Cap.(Rs cr) 1,026
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 430.35
CLOSE 425.40
VOLUME 12232
52-Week high 572.60
52-Week low 231.30
P/E 5.05
Mkt Cap.(Rs cr) 1,026
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

RSWM Ltd. (RSWM) - Director Report

Company director report

The Directors present the Annual Report together with the audited Balance Sheet and theStatement of Profit and Loss and other financial statements of RSWM Limited for the yearended March 312021.

Company's Performance

Your Company's performance during the year 2020-21 is summarized below:

Financial Results (Rs. in Crores)
Particulars 2020-21 2019-20
Turnover
Export 756.09 827.23
Domestic 1569.93 1943.80
TOTAL 2326.02 2771.03
Profit before Interest & Depreciation 214.97 263.74
Less: Interest/Finance Cost 83.03 108.51
Profit before Depreciation & Amortisation 131.94 155.23
Less: Depreciation & Amortization 127.68 131.67
Profit/(Loss) before Tax 4.26 23.56
Less: Current Tax 0.71 17.09
Tax of earlier years provided (written back) (10.22) Nil
Deferred Tax Liability/(Asset) (7.84) (16.20)
Profit/(Loss) after Tax 21.61 22.67
Add: Opening Balance 454.40 352.40
Add: Profit on Sale of Equity shares held in HEG Limited - 78.58
Dividends & Others 1.19 0.75
Profit available for appropriation 477.20 454.40

Number of Meetings of the Board

The particulars of the meetings held during the year along with the details regardingthe meetings attended by the Directors form part of the Corporate Governance Report.

The composition of the Board and its committees is in the report on CorporateGovernance.

Dividend and other Appropriations

Keeping in mind the financial position of the Company during the financial year underreview your directors do not recommend any dividend on the Equity Shares of the Company.

No amount is proposed for transfer to General Reserve. The amount available forappropriation T49.10 Crore has been carried over to next year.

Your Directors have adopted the Dividend Distribution Policy in line with the recentamendment notified by Securities and Exchange Board of India in Regulation 43A of SEBI(Listing Obligations and Disclosure Reguirements) Regulations 2015 and the same formspart of this Annual Report and is also available on the website of the Company.

Operational Performance

Your Directors inform the members that during the year under review the entire worldincluding our Nation faced the unprecedented lifetime challenge thrown by the world overpandemic in the form of COVID - 19. The Nationwide Lockdown was announced by theGovernment and your Company also began the financial year under lockdown conditions withall the operations remaining shut. The Company gradually started its operations at itsvarious facilities with the commencement of unlocking with the permission of the localauthorities as per the Government guidelines. The gradual uplift of operations couldstabilise in third quarter.

Your Company took various steps and decisions to counter the challenges thrown by theunprecedented conditions. These included rationalisation of costs optimized use of itscapacities availment of moratorium period for loan repayments as per RBI guidelines andavailment of financial assistance in the form of working capital facilities under COVID -19 financial assistance scheme by the Consortium Banks for necessary payments includingsalary and wages. Due to all these measures your Company could sustain its operations andstarted returning towards normalcy from the third quarter onwards.

With the help of all these measures your Company recorded a turnover of ?2326.02Crore as against a turnover of ?2771.03 Crore (which itself was lower due to the lockdowntowards the fag end of the financial year).

The analytical review of the Company's performance and its businesses includinginitiatives in the areas of human resources and information technology has been presentedin the section on Management Discussion and Analysis of the Annual Report.

Working results of last three financial years 2018-19 to 2020- 21 are given in Annexure- I and form part of this report.

Expansion and Modernization

Your Directors inform the members that in view of difficult conditions prevailing inthe first half of the year under review your Company did not incur any capital expenditureexcept the normal capex for smooth running of the operations of the Company. However inthe second half of the year the normalcy in the operations returned due to the buoyancyin all business segments of the Company.

Your Directors inform the members that encouraged with the business conditions thatprevailed in second half of year under review the Company planned a capital expenditureprogramme at an outlay of T304.00 Crore comprising of setting up of 19488 Spindles ofcombed spinning of Cotton Yarn at Mordi at a capital outlay of T78.35 Crores setting upof 8.4 Million Mtrs. of Denim capacity for sheet dyeing and finishing facility at Mordi atan outlay of T29.71 Crores and setting up of 30000 Spindles of Melange yarn at Kharigramat a capital outlay of ?157.12 Crores and Modernisation and Balancing Eguipments acrossall locations during FY21-22 at capital outlay of T38.82 Crore.

Your Directors inform the members that these capacities are being created at theexisting facilities by making use of surplus land and civil structure available at therespective locations and therefore is cost effective to that extent. Your Directors arepleased to inform the members that the implementation of above expansions has started andlikely to be completed during the current financial year. Your Directors are hopeful thatthe above expansions will lead to significant growth in the turnover and profitability ofthe Company.

Subsidiary Companies Joint Ventures & Associates

Your Directors in their previous report had informed the members about the investmentof the Company in M/s. LNJ Skills & Rozgar Private Limited which is involved in skilldevelopment related activities. Your Directors inform the members that during the yearunder review your Company continued to hold 47.30% of total shareholding in LNJ Skills& Rozgar Private Limited at an investment of ?11.80 Crores and therefore continuing asAssociate of your Company. Your Directors are hopeful that with this investment yourCompany would continue to contribute its bit in enhancing the skill levels of our countrymen.

Further as reported in the previous report your Company is holding significantinvestment in Bhilwara Energy Limited and is represented by Shri Riju JhunjhunwalaChairman and Managing Director of your Company on their Board where also he is holdingthe position of Managing Director. Your Company continues to hold 12524960 EguityShares constituting 7.56% of paid up capital in M/s. Bhilwara Energy Limited. YourDirectors are of the view that your Company continues to exercise its significantinfluence on BEL by the representation of Shri Riju Jhunjhunwala Chairman and ManagingDirector on the Board of BEL and accordingly continue to treat M/s. Bhilwara EnergyLimited as its Associate.

A statement containing the salient features of the financial statements of M/s. LNJSkills & Rozgar Private Limited and M/s. Bhilwara Energy Limited in the prescribedformat AOC1 is annexed as Annexure - II.

Contribution to the Exchequer

Your Company has contributed an amount of C200.88 crores in terms of taxes and dutiesto the Exchequer.

Corporate Social Responsibility

Your Directors feel pleasure to inform the members that your Company has been on theforefront to fulfil its obligation towards the society at large and accordingly made itscontribution in whole gamut of activities such as sanitation and safe drinking watereradicating hunger poverty and malnutrition promoting education skills developmentempowering women ensuring environmental sustainability ecological balance protection ofnational heritage help to armed forces veterans and promotion of rural sports etc. Duringthe financial year 2020-21 your Company has incurred C0.64crore on account of CSRactivities which includes health care sanitation & safe drinking water C0.16 crore;promoting education skills development C0.26 crore; ensuring environment sustainabilityecology balance C0.02 crore protection of national heritage culture C0.15 crore andtowards empowering women help to armed forces veterans & training to promote ruralsports C0.05crore.

Your Directors inform the members that the Corporate Social Responsibility Committeecomprising of Shri Arun Churiwal Shri Riju Jhunjhunwala and Shri Amar Nath Choudharymonitors the expenditure incurred on the CSR activities and formulate an annual budget forthese activities. Your Directors also review the progress periodically.

The Annual Report on CSR initiatives undertaken by the Company as per the Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure III formingpart of this report.

Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo

Your Directors inform the members that your Company continuously looks out for energyconservation measures in all areas of operation across its various Units. Similarly yourCompany endeavors to lookout for up-gradation and absorption of technology. Your Companyalso spends continuously on Research and Development. Your Directors are glad to informthe members that your Company is a net foreign exchange earner. The relevant detail asrequired to be disclosed with respect to Energy Conservation Technology absorption andForeign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of the Companies Act2013 read with the Rule 8(3) of the Companies (Accounts) Rules 2014 are given in Annexure- IV forming part of this report.

Annual Return

In terms of Companies Act 2013 as amended the Annual Return is available on thewebsite of the Company at the following link :

https://www.rswm.in/Annual Return-2020-21

Directors & Key Managerial Personnel

Shri Shekhar Agarwal and Shri B M Sharma Directors retire by rotation and beingeligible offer themselves for reappointment.

Your Directors inform the members that Shri B M Sharma was reappointed as JointManaging Director with effect from 7th August 2020 and his reappointment wasapproved by the members at the previous Annual General Meeting held on 24thSeptember 2020 by Special Resolution.

Your Directors also inform the members that during the year under review Shri RijuJhunjhunwala whose term as Managing Director was due to expire on 30th April2021 was also reappointed as Manging Director for a further period of five years witheffect from 1st May 2021 and his reappointment was approved by the members on18th April 2021 through Postal Ballot conducted by the Company in thisregard.Your Directors in their previous report had informed the members that during theyear under review Shri Riju Jhunjhunwala was elected as the Chairman of the Boardsubsequent to request by Shri Ravi Jhunjhunwala to relinquish his responsibility asChairman keeping in view the natural progression and succession planning.

Your Directors further inform the members that Shri Deepak Jain Independent Directorwhose term was due to expire on 10th May 2021 was proposed to be reappointedfor second term of five years with effect from 11th May 2021 by your Directorsupon commendation of Nomination and Remuneration Committee. The reappointment of ShriDeepak Jain as Independent Director for second term of five years with effect from 11thMay 2021 was also approved by Special Resolution by the members on 18th April2021 by Postal Ballot conducted by the Company in this regard.

Your Directors further inform the members that declarations have been taken from theIndependent Directors at the beginning of the financial year stating that they meet thecriteria of independence as specified under sub-section (6) of Section 149 of theCompanies Act 2013 and Regulation 16(1 )(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

During the year Shri Riju Jhunjhunwala Chairman and Managing Director & ChiefExecutive Officer Shri B M Sharma Joint Managing Director Shri Avinash Bhargava ChiefFinancial Officer and Shri Surender Gupta Company Secretary acted as Key ManagerialPersonnel.

Directors' Appointment and Remuneration Policy

Your Directors inform the members that a Nomination and Remuneration Policy had been inplace for the appointment of Directors and Senior Management and fixation of theirremuneration. The Nomination and Remuneration Policy as framed is annexed as Annexure Vand forms part of this report.

Your Directors inform the members that the Nomination and Remuneration Committee aswell your Directors endeavor to follow the policy and all appointments at Board and SeniorManagement 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 review carried out annualevaluation of its own performance as well as its Committees and also of the individualDirectors in the manner as enumerated in the Nomination and Remuneration Policy inaccordance with the provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. Your Directors feel pleasure in informing themembers that the performance of the Board as a whole and its members individually wasadjudged satisfactory.

Public Deposit

During the year under review your Company has not accepted any public deposit underCompanies Act 2013.

Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investment are given in the Notes to the FinancialStatements at appropriate places.

Particulars of Contracts or Arrangements with Related Parties

All contracts/ arrangements/ transactions entered into by the Company during thefinancial year with the related parties are on arm's length basis and in the ordinarycourse of business. During the financial year there were no material contracts orarrangements 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/Related-Party-Transaction-Policy Significant and Material OrdersPassed by the Regulators or Courts

During the year under review there were no significant and materials orders passed bythe Regulators or Courts.

Risk Management Policy

The Company has adopted the risk management policy which aimed at creating andprotecting shareholders value by minimizing threats and losses and identifying andmaximizing opportunities. Your Directors periodically review the risks associated with thebusiness or which threaten the prospects of the Company.

Internal Control Systems

Your Directors feel that adequate control system are the backbone of any Company. YourDirectors endeavor to place adequate control systems commensurate with the size of theCompany to ensure that all assets are properly safeguarded and that all the informationprovided to the management is reliable and also the obligations of the Company areproperly adhered to.

Your Directors inform the members that in pursuit of strengthening internal controlsystems your Company has put in place a system whereby all areas of the operations of theCompany are reviewed by the internal as well as external professionals and independentaudit firms. Your Company takes adequate measures with respect to gaps if any reported.The Audit Committee of your Company regularly monitors the annual operating plans riskassessment and minimization procedures as well as mitigation plans.

Your Directors endeavor to continuously improve and monitor the internal controlsystems.

Particulars of Employees

The information pursuant to Section 197 read with Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 of the employees is annexed asAnnexure -VI.

Further pursuant to Rule 5(2) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the relevant statement is annexed as Annexure - VII.

Auditors

Statutory Auditors

Your Directors inform the members that M/s. S. S. Kothari Mehta & Co. CharteredAccountants (Firm Registration No.000756N) were reappointed as Joint Statutory Auditors ofthe Company for second term of five years from the conclusion of 58th AnnualGeneral Meeting of the Company held on 11th September 2019 till the conclusionof 63rd Annual General Meeting of the Company in accordance with the provisionsof Section 139 of the Companies Act 2013.

M/s. Lodha & Co Chartered Accountants (Firm Registration No.301051E) wereappointed as Joint Statutory Auditors of the Company at the 56th Annual GeneralMeeting of the Company held on 27th September 2017 for a term of 5 years tillthe conclusion of 61st Annual General Meeting and accordingly continue withtheir term till 61st Annual General Meeting of the Company.

Further both the Statutory Auditors have confirmed their eligibility under Section 141of the Companies Act 2013 and the Rules framed there under.

The observations of the Auditors if any are explained wherever necessary in theappropriate notes to the accounts. The Auditors' Report does not contain qualificationreservation or adverse remark.

Internal Auditors

Your Directors during the year under review appointed M/s. P.K. Deora & Co.Chartered Accountants (Firm Registration No.004167N) M/s. BGJC & Associates LLPChartered Accountants (Firm Registration No.003304N) and M/s. S. Bhargava AssociatesChartered Accountants (Firm Registration No.003191C) to act as the Internal Auditors ofthe Company for the financial year 2020-21 pursuant to section 138 of the Companies Act2013 read with the Companies (Accounts) Rules 2014.

Secretarial Auditor

Your Directors during the year under review also appointed Shri Mahesh Kumar GuptaPracticing Company Secretary (Membership No. FCS 2870 and CP No.1999) Proprietor of M/sMahesh Gupta & Company Company Secretaries Delhi as the Secretarial Auditor of theCompany for the financial year 2020-21 pursuant to Section 204 of the Companies Act 2013read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.The Report of Secretarial Audit is annexed as Annexure VIII.

Cost Auditor

Your Directors inform the Members that Pursuant to Section 148 of the Companies Act2013 read with The Companies (Cost Records and Audit) Rules 2014 Textile Companies arerequired to get their cost records audited. In this connection the Board of Directors ofthe 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 theCost Auditor of the Company for the year ending March 312021.

Corporate Governance

Report on Corporate Governance along with the Certificate of Auditors M/s. S. S.Kothari Mehta & Co. Chartered Accountants (Firm Registration No 000756N) Plot No-68Okhla Industrial Area Phase III New Delhi -110020 and M/s. Lodha & Co. CharteredAccountants (Firm Registration No.301051E) 12 Bhagat Singh Marg New Delhi - 110001confirming compliance to conditions of Corporate Governance as stipulated under SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 form part of theAnnual Report.

Whistle Blower Policy

Your Directors inform the Members that with the objective of pursuing the business in afair and transparent manner by adopting the highest standards of professionalism honestyintegrity and ethical behavior and to encourage and protect the employees who wish toraise and report their genuine concerns about any unethical behavior actual or suspectedfraud or violation of Company's Code of Conduct the Company has adopted a Whistle BlowerPolicy. Policy adopted by the Company contains a framework whereby the identity of thecomplainant is not disclosed. The policy has been disclosed on the website of the Companythe link of which is given hereunder:

https://www.rswm.in/Whistle-Blower-Policy

Management Discussion and Analysis Report

Management Discussion and Analysis Report as required by SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 forms part of the Annual Report.

Business Responsibility Report

In terms of the Requlation 34 of the SEBI (Listing obligations and DisclosureRequirements) Regulations 2015 the Business Responsibility Report forms part of theAnnual Report.

General

a) The Company being a Textile Company falls under the prescribed class of Companiesand maintain Cost Accounts and Records which are subject to audit conducted by the CostAuditor.

b) In line with the provisions of Sexual Harassment of Women at the Workplace(Prevention Prohibition and Redressal) Act 2013 the Company has in place a Policyframed at Group level and also set up an Internal Complaints Committee (ICC) to deal withany such reported matter. During the year the ICC did not report receipt of any complaintwith regard to sexual harassment.

c) The Company is in compliance of all applicable secretarial standards issued by TheInstitute of Company Secretaries of India from time to time.

Directors' Responsibility Statement.

Pursuant to Section 134(3) (c) of the Companies Act 2013 the Directors state that:

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) They had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitand loss of the Company for that period;

(c) They had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 by the Company andthat such internal financial controls are adequate and were operating effectively.

(f) They had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

Acknowledgements

Your Directors take this opportunity to thank Customers Members Suppliers BankersBusiness Partners/Associates Central and State Governments for their consistent supportand co-operation extended to the Company. We also acknowledge the significant contributionmade by the employees by their dedication and hard work and trust reposed on us. We lookforward to have the same support in our endeavor to help the Company to grow faster.

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