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Rupa & Company Ltd.

BSE: 533552 Sector: Industrials
NSE: RUPA ISIN Code: INE895B01021
BSE 00:00 | 23 Sep 475.70 -2.65
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479.50

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488.00

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475.00

NSE 00:00 | 23 Sep 476.70 -3.15
(-0.66%)
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482.00

HIGH

489.20

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OPEN 479.50
PREVIOUS CLOSE 478.35
VOLUME 6045
52-Week high 547.00
52-Week low 173.75
P/E 20.11
Mkt Cap.(Rs cr) 3,782
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 479.50
CLOSE 478.35
VOLUME 6045
52-Week high 547.00
52-Week low 173.75
P/E 20.11
Mkt Cap.(Rs cr) 3,782
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rupa & Company Ltd. (RUPA) - Director Report

Company director report

for the Financial Year ended March 31 2021

Financial Highlights

The financial performance of the Company is summarized hereunder:

Standalone Financial Review (Rs. in Lakhs)

Particulars 2020-21 2019-20
Revenue from Operations 126121.68 94140.11
Profit before Finance Costs Tax Depreciation/ Amortization (PBITDA) 26378.13 13251.98
Less: Finance Costs 944.07 1481.22
Profit before Tax Depreciation/Amortization (PBTDA) 25434.06 11770.76
Less: Depreciation 1132.36 1567.92
Profit before Tax (PBT) 24301.70 10202.84
Less: Tax Expense 6211.77 2196.31
Net Profit after Tax (PAT) 18089.93 8006.53
Other Comprehensive Income 10.87 7.16
Total Comprehensive Income for the year 18100.80 8013.69
Consolidated Financial Review (Rs. in Lakhs)
Particulars 2020-21 2019-20
Revenue from Operations 131267.15 97464.28
Profit before Finance Costs Tax Depreciation/ Amortization (PBITDA) 26462.85 12111.80
Less: Finance Costs 1343.31 1862.10
Profit before Depreciation/Amortization (PBTDA) 25119.54 10249.70
Less: Depreciation 1378.98 1851.45
Profit before Tax (PBT) 23740.56 8398.25
Less: Tax Expense 6214.66 2207.91
Net Profit after Tax (PAT) 17525.90 6190.34
Other Comprehensive Income 17.27 13.99
Total Comprehensive Income for the year 17543.17 6204.33

Covid-19 pandemic

The Covid-19 pandemic has emerged as a global challenge creating disruption across theworld. Many Countries are experiencing the desolation and devastation of the deadly virus.The pandemic has led to a dramatic loss of human life worldwide and presents anunprecedented challenge to public health food systems and the world of work. The economicand social disruption caused by the pandemic is devastating millions of people are atrisk of falling into extreme poverty. Many enterprises are facing an existential threatalso. A significant workforce is at risk of losing their livelihoods. Therefore Globalsolutions are needed to overcome the challenges. Due to the lockdown measures enforced bythe Central Government and State Governments the factories of the Company were notoperating at the beginning of the year however they had started their operations in May2020 as per prescribed guidelines issued by the Government Authorities. The Company hadadopted work from home policy for its employees wherever necessary. The Company hadundertaken several steps to help the community in which it operates inter alia providingfood and other essentials to the needy community. The Company also provided essentials tothe many needy people affected by the Cyclone Amphan which had devastating affect andimpacted many poor citizens across West Bengal in May 2020.

State of Company’s Affairs and Future Outlook

The Company achieved a Turnover of Rs. 126121.68 lakhs during the financial year2020-21 as against Rs. 94140.11 lakhs in 2019-20 registering a growth of 34% over thelast year. During the year the Profit before Finance Charges Depreciation and Tax stoodat Rs. 26378.13 lakhs as against Rs. 13251.98 lakhs during the previous year anincrease of 99% in comparison to previous year. The Net Profit for the year 2020-21 stoodat Rs. 18089.93 lakhs as compared to Rs. 8006.53 lakhs during the previous year agrowth of 126% over the last year.

On consolidated basis the Turnover for the year 2020-21 was Rs. 131267.15 lakhs asagainst Rs. 97464.28 lakhs in 2019-20 registering a growth of 34% over the last year.The Profit before Finance Charges Depreciation and Tax stood at Rs. 26462.85 lakhsduring 2020-21 as against Rs. 12111.80 lakhs during the previous year an increase of118% in comparison to previous year. The Net Profit for the year 2020-21 stood at Rs.17525.90 lakhs as compared to Rs. 6190.34 lakhs during the previous year a growth of183% over the last year. Given that the Financial Year 2020-21 has been a very difficultyear for all of us but the Company has given a stellar performance despite all thechallenges. We have seen a record growth across all our financial parameters revenueEBITDA or PAT. The Company delivered record revenues and profitability on back of strongvolume growth operational efficiencies better product mix and cost specializationprograms. In view of the robust performance the Board of Directors have recommended afinal dividend of Rs. 5 per equity share including a special dividend of Rs. 2 per equityshare as a mark of gratitude to our shareholders during this time of pandemic which is500% of face value for the financial year ended March 31 2021.

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

Coming to the current situation in the country we are witnessing a second wave ofCovid-19 infection and it has once again resulted in disruption of businesses but theoverall impact will be milder in comparison to last year’s devastation. Severalstates have announced restrictions. Going forward we expect a sharp upturn in businesswhen the restrictions will be lifted and with the roll out of vaccines in phased mannerfrom January 2021 we expect that a sizeable population could be vaccinated in nearfuture to control the pandemic which will lead to a faster economic recovery.

The Company is engaged in the manufacturing marketing sales and distribution ofMen’s and Women’s innerwear thermal wear and casual wear for all sections ofthe society like economy mid-premium premium and super-premium. It has over 18sub-brands and 8000 SKUs (Stock Keeping Unit) having a strong brand recall. In order tonurture its brands the Company has been consistently involved in robust advertisement andbrand promotion activities thereby spending extensively on brand communication. TheCompany is one of the leaders in the innerwear garments industry having a distributionnetwork spanning across India. The Company has a PAN-India presence with a largedistribution network consisting of 4 central warehouses 11 EBOs (Exclusive BrandOutlets) more than 1200 dealers and 125000 retailers. It is also looking at enhancingavailability through presence in e-commerce MBOs (Multi-Brand Outlets) and LFRs (LargeFormat Retail Stores). The Company is also expanding its reach in e-commerce platformthrough tie-up with Amazon Flipkart and other ecommerce platforms as looking to doublethe growth. The plan is to create small to mid-sized Franchise Store Model withbest-in-class SOPs. We want to establish franchise model within top 50 cities in India.Future plan is to roll out 30 EBOs by the year end and 100 EBOs in 2-3 years. Rupa ispresent across all e-commerce sites and Future plan is to enhance brand visibility throughincreasing online presence. The Company is aggressively focusing in expanding e-commerceand EBO business.

The Company has manufacturing facilities situated at Howrah Kolkata TirupurBengaluru and Ghaziabad and have sales offices situated at Kolkata Patna Mumbai DelhiGhaziabad Bengaluru and Tirupur. The Company follows efficient business strategy byoutsourcing low end and labour intensive work and utilizes its resources on key areasinvolving value addition product differentiation branding and distribution.

The Company caters to all segments including men women and kid segment with its widerange of brands. The various sub-brands of the Company includes Frontline Jon AirMacroman Euro Bumchums Torrido Thermocot Kidline Footline Softline etc. cateringto various segments under its umbrella brand ‘Rupa’. The brands are endorsed byleading celebrities including Ranveer Singh and Siddharth Malhotra. The Company also haspremium brand Macroman M-Series and the premium brand under Female segment MacrowomanW-Series includes products like lingerie active wear and leisurewear. The Wholly-ownedSubsidiary of the Company Oban Fashions Private Limited has exclusive license for thebrand ‘FCUK’ and the brand ‘Fruit of the Loom’ or ‘FOTL’ tomanufacture market and sale of innerwear and other products in India. The FCUK and FOTLproducts have been launched at different locations in India. Coming to growth strategythe Company is planning to scale up high margin revenue business which includes thebrands like FCUK Fruit of the Loom and M-series. The vision is to occupy the consumermindset in this category where the aspirational Indian consumer perhaps works with style.Our aim is to make premium inner wear based on comfort accessible to the consumer. TheCompany is also reinforcing high growth segment like Athleisure Women wear and Thermalwear segment.

The male innerwear segment contributes significantly to the Company’s business incomparison to the female innerwear segment. Presently the Company is catering to femaleinnerwear and loungewear space through its brands Jon and Softline for economy and premiumcategory; and Macrowoman W-Series for super-premium category. The Company is continuouslystriving at strengthening its female innerwear segment as well and is open to grow inthis segment through inorganic route also in domestic market. The Company has always beenresponsive towards the changing fashion needs by introducing new line of products acrossall segments. The Company believes in the overall growth of its innerwear thermal wearand casual wear business across India through its innovative designs superior productquality ability to create a sustainable business model initiatives to nurture thein-house talent and the zeal towards the healthy creation of stakeholders’ value. TheCompany is focusing on enhancing its product offering in the children and women’ssegment with the introduction of new products and brands. Both the children andwomen’s segment have a lower presence of organized players and hence provide a hugeopportunity for the Company. The Indian innerwear market is shifting from a pricesensitive market to a fashion quotient market. Accordingly the group is graduallyincreasing its presence in the premium segment with direct and indirect strategic tie-upswith foreign brands. The Company is also expanding in new international geography inexport business by opening business in new countries in middle-east Africa and Russia.

Scheme of Arrangement

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

Before Hon’ble NCLT Kolkata Bench: The Hon’ble Bench vide order datedFebruary 3 2021 allowed the demerger application filed by the Company and directed toconvene separate meetings of the Shareholders Secured Creditors and Unsecured Creditorsof the Company under the Chairpersonship of Mr. Soumitra Lahiri Chartered Accountant toseek their approval w.r.t. the proposed Scheme. In terms of the directions of theHon’ble Bench the meetings were duly convened on March 26 2021 and the resolutionproposed for approval of the proposed Scheme has been duly passed with requisite majority.The Chairperson’s reports w.r.t. the meetings were filed on April 13 2021 and interms of Rule 15 of the Companies (Compromises Arrangements and Amalgamations) Rules2016 the Company has filed a Petition before the Hon’ble Bench for sanction of theproposed Scheme. The matter shall be listed for hearing before the Hon’ble Bench onJune 30 2021. However the Company has filed application for urgent hearing of the matterand the same was considered and order is awaited. Before Hon’ble NCLT MumbaiBench: The Hon’ble Bench vide order dated April 8 2021 has allowed the demergerapplication filed by Oban. Given that Oban is a Wholly-owned subsidiary of the Company andthat there was only 1 secured creditor in Oban as on the Cut-off date the Hon’bleBench has dispensed with the meeting of the shareholders and Secured Creditor of Oban.Further with respect to Unsecured Creditors the Hon’ble Bench has directed to sendnotices to all the Unsecured Creditors seeking their objection/representation if any tothe proposed Scheme. In terms of the direction of the Hon’ble Bench Oban has sentNotice inviting objection/representation if any to the Unsecured Creditors on May 52021 and is in the process of filing 2nd motion application before theHon’ble NCLT.

Subsidiaries

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

(i) Euro Fashion Inners International Private Limited which was earlier engagedin selling hosiery premium products under the brand name "EURO" designed forthe fashion conscious consumers has transferred its Business Operations to the Companythrough a Business Collaboration Agreement effective from April 1 2014 and gets royaltyfrom the Company for using the brand EURO in its business.

During the Financial Year under review the Revenue from Operations including OtherIncome was Rs. 12.26 lakhs as against Rs. 14.83 lakhs during the previous year. NetProfit during the year was Rs. 3.48 lakhs as compared to Rs. 5.70 lakhs during theprevious year.

(ii) Imoogi Fashions Private Limited which is engaged in manufacturingprocessing and selling hosiery and outer casual wear products of premium category forfemale and kids segments under the brand name "Femmora". During the FinancialYear under review the Revenue from Operations including Other Income was Rs. 243.64lakhs as against Rs. 402.13 lakhs during the previous year. Net Profit during the yearwas Rs. 4.35 lakhs as compared to Rs. 27.69 lakhs during the previous year.

(iii) Oban Fashions Private Limited has been incorporated with the objectinter alia to operate Indian business of international brands managed underlicensing/ franchise/ joint venture/ ownership arrangements etc. Oban Fashions PrivateLimited has exclusive license with respect to brands "FCUK" from the FrenchConnection Limited and the brand "Fruit of the Loom" from Fruit of the LoomInc a New York Corporation being a Wholly-owned Subsidiary of Berkshire HathawayCompany to develop manufacture market and sell of the innerwear and related productsunder the respective brand names in India.

During the Financial Year under review the Revenue from Operations including OtherIncome was Rs. 5385.94 lakhs as against Rs. 3396.31 lakhs during the previous year.Net loss during the year was Rs. 570.21 lakhs as compared to

Rs. 1847.85 lakhs during the previous year.

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

(v) Rupa Bangladesh Private Limited was incorporated as Wholly-owned Subsidiaryof the Company in Dhaka Bangladesh on September 1 2019 with the object inter aliato be engaged in manufacturing activities etc. in Bangladesh.

During the Financial Year under review there was no Revenue from Operations and theNet Loss during the year under review was Rs. 1.22 lakhs as against Rs. 1.39 lakhs in theprevious year.

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

The statement in Form AOC-1 containing the salient features of the aforesaidsubsidiaries has been separately annexed hereto in terms of the first proviso to theSection 129(3) of the Companies Act 2013 including any subsequent amendment thereto (the‘Act’) read with Rule 5 of the Companies (Accounts) Rules 2014. Further thecontribution of these subsidiaries to the overall performance of the Company is providedunder the Notes to the Consolidated Financial Statements. The Audited FinancialStatements together with the Consolidated Financial Statements of the Company and otherrelated information and the Audited Accounts of the Company’s subsidiaries are alsoavailable on the website of the Company at www.rupa.co.in. The Annual Accounts of thesubsidiaries and the related detailed information shall be made available to the Membersof the Company seeking such information at any point of time. The Members may request forsuch information by writing to the Company Secretary at the registered office of theCompany. The copies of the Annual Accounts of the subsidiaries remain open for inspectionby the Members at the Company’s registered office.

Except as stated hereinabove the Company did not have any other subsidiary jointventure or associate company during the year under review.

Change(s) in the Nature of Business

During the year under review there was no change in the nature of the business of theCompany.

Dividend

For the Financial Year 2020-21 the Board of Directors of the Company has recommended aFinal Dividend for consideration of the shareholders of the Company at the ensuing AnnualGeneral Meeting (AGM) @ Rs. 5 per equity share i.e. 500% including a dividend of Rs. 2per equity share as a mark of gratitude to the shareholders during the pandemic for79524560 equity shares of Rs. 1/- each amounting to Rs. 397622800/- (RupeesThirty-nine crore Seventy-six lakhs Twenty-two thousand and Eight hundred Only). Thedividend payout is in accordance with the Company’s Dividend Distribution Policy.

The Dividend Distribution Policy of the Company adopted by the Board of Directors ofthe Company in terms of Regulation 43A of the SEBI Listing Regulations is annexed heretomarked as ‘Annexure-I‘ and is also available on the Company’swebsite athttp://rupa.co.in/livesite/wp-content/uploads/2018/12/Dividend-Distribution-Policy.pdf.

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

During the Financial Year ended March 31 2021 the Company has transferred unclaimedand unpaid dividend for the Financial Year 2012-13 amounting to Rs. 117404/- (RupeesOne Lakh Seventeen Thousand Four Hundred Four only) to the IEPF Authority. During theFinancial Year ended March 31 2021 12001 Equity Shares of Rs. 1/- each held by 3(three) shareholders in aggregate whose dividends remained unpaid or unclaimed for aperiod of 7 (seven) consecutive years or more as on the due date have been transferredto the IEPF Authority Demat Account within the due date.

Demat Suspense Account/ Unclaimed Suspense Account

There were no shares underlying in the demat suspense account or unclaimed suspenseaccount.

Transfer to Reserves

The Board is not proposing to transfer any amount to the General Reserves of theCompany.

Changes in Share Capital

During the year under review there were no changes in the Share Capital of theCompany.

Credit Rating

Crisil Limited the Credit Rating Agency has assigned the credit ratings CRISILAA–/Stable and CRISIL A1+ for the long term and short term debtinstruments/facilities of the Company respectively. The details of the rating assigned bythe Credit Rating Agency have been disclosed in the Corporate Governance Report whichforms part of this Annual Report.

Directors and Key Managerial Personnel

Details of Directors and Key Managerial Personnel (KMP) appointed re-appointed orresigned during the year are as below:

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

Mr. Prahlad Rai Agarwala Chairman (Whole-time Director) and Mr. Ramesh AgarwalWhole-time Director-cum-Chief Financial Officer are liable to retire by rotation at theensuing AGM and being eligible have offered themselves for reappointment. Further detailsof Directors are provided in the Corporate Governance Report which forms part of thisAnnual Report. None of the Directors of the Company is disqualified under the provisionsof Section 164(2)(a) & (b) of the Act. Apart from the aforesaid no changes in theDirectors and KMPs have taken place during the period under review.

Declaration given by the Independent Directors under Section 149(7) of the Act

All Independent Directors of the Company have given their declarations to the Companythat they meet the criteria of independence as laid down under Section 149(6) of the Actand Regulation 16(1)(b) of the SEBI Listing Regulations. In the opinion of the Board theIndependent Directors of the Company are persons of integrity expertise and experienceand duly qualified (including the ID Proficiency Test) to hold such positions. Howeverrenewal of registration of Mr. Dharam Chand Jain is pending renewal due to some technicalreasons and Mr. Jain is in process of renewing the same.

Number of Meetings of Board of Directors

During the Financial Year 2020-21 5 (five) meetings of the Board of Directors wereheld details of which are given in the Corporate Governance Report which forms part ofthis Annual Report.

Separate Meeting of Independent Directors

During the year under review the Independent Directors met on March 22 2021 withoutthe presence of Non-Independent Directors and members of the Management and inter alia:

(i) reviewed the performance of Non-Independent Directors and the Board as a whole;

(ii) reviewed the performance of the Chairperson of the Company taking into accountthe views of Executive Directors and Non-Executive Directors;

(iii) assessed the quality quantity and timeliness of flow of information between theCompany management and the Board that is necessary for the Board to effectively &reasonably perform their duties.

Apart from Mr. Dharam Chand Jain all other Independent Directors were present at thatmeeting.

Annual Evaluation of Performance

Pursuant to the provisions of the Act and the SEBI Listing Regulations the Nominationand Remuneration Committee has laid down the criteria for performance evaluation on thebasis of which the Board has carried out evaluation of its own performance theperformance of Board Committees and of the Independent Directors individually. TheIndependent Directors of the Company without the participation of Non-IndependentDirectors and members of management in their separate meeting held on March 22 2021have reviewed the performance of Non-Independent Directors and the Board as a whole andalso the performance of the Chairperson of the Company. The review of performance ofNon-Independent Directors was done on various parameters such as skill competenceexperience governance degree of engagement ideas & planning attendanceleadership etc. The Board performance was reviewed on various parameters such asadequacy of the composition of the Board Board culture appropriateness of qualification& expertise of Board members process of identification and appointment of IndependentDirectors inter-personal skills ability to act proactively managing conflicts managingcrisis situations diversity in the knowledge and related industry expertise roles andresponsibilities of Board members appropriate utilization of talents and skills of Boardmembers etc. The evaluation of performance of the Chairperson of the Company wasconducted on various parameters such as leadership quality capability availabilityclarity of understanding governance & compliance and degree of contribution etc.

The Nomination and Remuneration Committee of the Board based on the report of theIndependent Directors evaluated the performance of the Non-Independent Directors. Thesaid Committee members also evaluated the performance of the Independent Directors of theCompany based on the reports of the Executive Directors considering their requisiteskills competence experience and knowledge of the regulatory requirements relating togovernance such as roles and responsibilities under the Code for Independent Directorsthe Act the SEBI Listing Regulations etc.

The Board of Directors of the Company based on the report of the Independent Directorsand the Nomination and Remuneration Committee evaluated the performance of Board and ofindividual Directors. The Board also carried out the evaluation of performance of itsCommittees on various parameters such as adequacy of meetings in enhancing theeffectiveness of the Committee existence of a defined set of objectives/ terms ofreference etc. The result of review and evaluation of performance of Board it’sCommittees and of individual Directors was found to be satisfactory.

Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo

The particulars related to the conservation of energy technology absorption andforeign exchange earnings and outgo as required under Section 134(3)(m) of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 are annexed hereto marked as‘Annexure – II’.

Particulars of Employees

The particulars of employees as required under Section 197(12) of the Act read withRule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 are annexed hereto marked as ‘Annexure – III’.

Disclosure on Employee Stock Option/Purchase Scheme

Presently the Company does not have any Employee Stock Option/Purchase Scheme.

Committees of the Board

As on March 31 2021 the Company has 6 (six) Committees:

Audit Committee

Nomination and Remuneration Committee

Stakeholder’s Relationship Committee

Corporate Social Responsibility (CSR) Committee

Risk Management Committee

Operations Committee

Audit Committee

As on March 31 2021 the Audit Committee comprised of 6 (six) Members of whichmajority were Independent Directors. The details with respect to the composition of theAudit Committee the number of meetings held during the Financial Year under review andattendance therein and the terms of reference has been detailed out in the CorporateGovernance Report which forms part of this Annual Report. Further there were noinstances wherein the Board had not accepted any recommendation of the Audit Committee.

Nomination and Remuneration Committee

Details pertaining to constitution of the Nomination and Remuneration Committee of theBoard of Directors of the Company number of meetings held during the period under reviewattendance therein and its terms of reference have been stated in the Corporate GovernanceReport which forms part of this Annual Report.

Policy on Appointment and Remuneration

The Board on the recommendation of the Nomination and Remuneration Committee asprescribed under Section 178(3) of the Act has framed a Policy on Appointment andRemuneration of Directors Key Managerial Personnel and other employees of the Companyincluding criteria for determining qualifications positive attributes independence of adirector and other matters and the same is available on the Company’s website onhttp://rupa.co.in/livesite/wp-content/ uploads/2018/12/Remuneration_Policy.pdf and and isalso annexed hereto marked as ‘Annexure – IV’.

Familiarisation Programme

The details of the familiarisation programme imparted to the Independent Directors ofthe Company are uploaded on the website of the Company athttp://rupa.co.in/livesite/wp-content/uploads/2018/12/Familiarization_Programme_for_Independent_Directors1.pdf.

Stakeholders’ Relationship Committee

Details pertaining to the constitution of the Stakeholders’ Relationship Committeeof the Board of Directors of the Company number of meetings held during the Year underreview attendance therein and its terms of reference have been stated in the CorporateGovernance Report which forms part of this Annual Report.

Corporate Social Responsibility Committee

The Company recognizes the value of being socially responsible corporate and thereforeit is committed towards the society and its people in a dedicated way.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in the Annual Report on CSR Activities as prescribed under Section 135 of the Actread with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 isannexed hereto marked as ‘Annexure –V‘. This Policy is available onthe Company’s website on http://rupa.co.in/livesite/wp-content/uploads/2021/03/Corporate_Social_Responsibility_Policy.pdf.

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

Composition of the Committee Meeting and Attendance

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

Name of Member Position Category

Meetings held during the year and Attendance

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

The composition of the Committee complies with the provision of Section 135 of the Actread with Rules made thereunder.

Risk Management Committee

The Risk Management Committee of the Board of Directors of the Company comprised of 6(six) Members as on March 31 2021. The details with respect to its composition thenumber of meetings held during the Financial Year under review and attendance therein andthe terms of reference has been detailed out in the Corporate Governance Report whichforms part of this Annual Report.

Operations Committee

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

Name of the Member Category

Meeting held during the year and Attendance

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

The terms of reference of the Operations Committee are available on the website of theCompany at the link http://rupa.co.in/site/wp-content/uploads/2015/10/Operations-Committee.pdf. The OperationsCommittee also performs such other functions as may be assigned to them by the Board ofDirectors from time to time.

Vigil Mechanism

In terms of the Section 177 of the Act read with the Rules made thereunder andRegulation 22 of the SEBI Listing Regulations the Company has framed a ‘WhistleBlower Policy’ with an objective to provide an avenue to address concerns in linewith the policy of the Company to the highest possible standards of ethical moral andlegal business conduct and its commitment to open communication as well as timelyredressal of concerns and disclosures to build and strengthen a culture of transparencyand trust in the Company. The mechanism also provides for adequate safeguards againstvictimization of director(s) or employee(s) or any other person for availing the mechanismand in exceptional cases direct access to the Chairman of the Audit Committee to reportinstances of fraud/ misconduct. The Audit Committee looks into the complaints raised ifany and their redressal. The Whistle Blower Policy of the Company is available on thewebsite of the Company at the linkhttp://rupa.co.in/livesite/wp-content/uploads/2019/03/Whistle_Blower_Policy.pdf.

Annual Return

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

Risk Management Policy

The Company has a Risk Management Policy which lays down the framework foridentification and mitigation of various risks. The specific objectives of the RiskManagement Policy are to ensure that all the current and future material risk exposures ofthe Company are identified assessed quantified appropriately mitigated and managed toestablish a framework for the Company’s risk management process.

The Risk Management Framework emphasises proper analysing and understanding theunderlying risks before undertaking any transaction. This enables a proper assessment ofall risks and ensures that the transactions and processes conform to the Company’srisk appetite and regulatory requirements. The Risk Management Policy is discussed at themeeting of the Audit Committee and the Risk Management Committee of the Board ofDirectors. The management accepts the suggestions with regard to mitigation of risks thatmay arise in future. Further in the opinion of the Board there are no existing factorswhich threaten the existence of the Company.

Internal Financial Control Systems with reference to Financial Statements and itsadequacy

The Company has adequate Internal Financial Control systems and procedures which arecommensurate with its size and nature of business. It is ensured that all the assets aresafeguarded and protected against loss and all transactions are authorized recorded andreported correctly. The Internal Financial Control systems of the Company are monitoredand evaluated and reviewed by the Audit Committee.

The Directors have laid down Internal Financial Controls to be followed by the Companyand that such Internal Financial Controls are adequate and were operating effectively. Inthis regard the Board confirms the following:

1) Systems have been laid to ensure that all transactions are executed in accordancewith management’s general and specific authorization;

2) Systems and procedures exist to ensure that all transactions are recorded asnecessary to permit preparation of Financial Statements in conformity with GenerallyAccepted Accounting Principles or any other criteria applicable to such statements and tomaintain accountability for aspects and the timely preparation of reliable financialinformation;

3) Access to assets is permitted only in accordance with management’s general andspecific authorization. No assets of the Company are allowed to be used for personalpurposes except in accordance with terms of employment or except as specificallypermitted;

4) The existing assets of the Company are verified/ checked at reasonable intervals andappropriate action is taken with respect to differences if any; and

5) Proper systems are in place for prevention and detection of frauds and errors andfor ensuring adherence to the Company’s policies.

Further the certificate from Managing Director Chief Executive Officer and ChiefFinancial Officer in terms of Regulation 17(8) of the SEBI Listing Regulations providedin this Annual Report also certifies the adequacy of our Internal Control systems andprocedures.

Statutory Auditors and Auditors’ Report

M/s. Singhi & Co. (Firm Registration Number 302049E) Chartered Accountants hadbeen appointed as the Statutory Auditor of the Company to hold office for a period of 5(five) years from the conclusion of the 32nd AGM of the Company (for the Financial Year2016-17) held on August 31 2017 until the conclusion of the 37th AGM of the Company forthe Financial Year 2021-22.

The Notes on accounts referred to in the Auditors’ Report are self-explanatory andtherefore do not call for any further explanations/comments.

Internal Auditor

M/s. Das & Prasad Chartered Accountants (Firm Registration Number 303054E) wasappointed as the Internal Auditors of the Company to conduct the Internal Audit for theFinancial Year 2020-21. Further the Audit Committee considers and reviews the InternalAudit Report submitted by the Internal Auditor on a quarterly basis.

Details in respect of Fraud

During the Financial Year 2020-21 the Auditors have not reported any fraud asprescribed under Section 143(12) of the Act.

Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Board of Directorsof the Company has appointed CS Nidhi Bagri of M/s. Nidhi Bagri & Company PracticingCompany Secretaries to conduct the Secretarial Audit of the Company for the FinancialYear 2020-21. The Secretarial Audit Report in Form MR-3 for the Financial Year 2020-21is annexed hereto marked as ‘Annexure – VI’. The Secretarial AuditReport does not contain any qualification reservation adverse remark or disclaimer.

Material changes and commitments if any affecting the financial position of theCompany which have occurred between the end of the Financial Year of the Company to whichthe Financial Statements relate and the date of this Report

No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the Financial Year 2020-21 and the date of this Report.

Details of significant and material orders passed by the Regulators/ Courts/ Tribunalsimpacting the going concern status and the Company’s operations in future

No such significant and material order has been passed by any Regulator/ Court/Tribunals against the Company which will impact the going concern status and theCompany’s operations in future. The Scheme of Arrangement between the Company andOban Fashions Private Limited has been pending before the Hon’ble NCLT. The detailedstatus of the same has been explained hereinbefore in this Report.

Deposits

The Company has not accepted any deposit within the meaning of Section 73 of the Actand the Companies (Acceptance of Deposits) Rules 2014 during the Financial Year endedMarch 31 2021.

Particulars of Loans Guarantees or Investments

The loan and guarantee given by the Company during the financial year ended March 312021 are within the limits prescribed under Section 186 of the Act. Further the detailsof the said loan given guarantee given and investment made are provided in the Notes tothe Financial Statements of the Company.

The related party disclosures with respect to loans/ advances at the end of theFinancial Year under review and maximum outstanding amount thereof during the year asrequired under Part A of Schedule V to the SEBI Listing Regulations have been provided inthe Notes to the Financial Statements of the Company.

Particulars of Contracts or Arrangements with Related Parties

There were no materially significant related party transactions entered into by theCompany which may have potential conflict with the interest of the Company. All contracts/arrangements/ transactions entered by the Company during the Financial Year 2020-21 withits related parties were in the ordinary course of business and on an arm’s lengthbasis and were reviewed and approved by the Audit Committee of the Board. Furtherduring the Financial Year the Company has not entered into any contract/ arrangement/transaction with related parties which could be considered material in accordance with theCompany’s policy of Materiality of Related Party Transactions except those providedin Form AOC-2 annexed hereto marked as ‘Annexure – VII’. Furthersuitable disclosure as required by the Accounting Standards has been made in the Notes tothe Financial Statements.

The Policy on dealing with Related Party Transactions is available on theCompany’s website on http://rupa.co.in/livesite/wp-content/uploads/2018/12/policy-on-related-party-transactions.pdf.

Particulars of Contract with any person or entity belonging to the promoter/promotergroup which hold(s) 10% or more shareholding in the Company

The details of the transactions entered into by the Company with promoter/ promotergroup which hold(s) 10% or more shareholding in the Company are as hereunder:

Name of the Person % of shares held in the Company Nature of relationship Nature of transaction Amount (Rs.)
Ullas Sales Promotion LLP (formerly known as Ullas Sales Promotion Limited) 27.20% Enterprises owned or significantly Dividend 64892580
Mr. Prahlad Rai Agarwala jointly with Mr. Ghanshyam Prasad Agarwala and Mr. Kunj Bihari Agarwal on behalf of a partnership firm M/s Binod Hosiery 21.08% influenced by key management personnel or their relatives Dividend Rent payment 50290968 14400

Compliance with Secretarial Standards

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

Maintenance of Cost Records

The provisions of Section 148 of the Companies Act 2013 with respect to maintenanceof Cost records are not applicable to the Company.

Management Discussion and Analysis Report

The Management Discussion and Analysis Report in terms of Regulation 34 read withSchedule V of the SEBI Listing Regulations forms part of this Annual Report.

Corporate Governance Report

The Corporate Governance Report in terms of Regulation 34(3) read with Schedule V ofthe SEBI Listing Regulations forms part of this Annual Report. The Company has obtained acertificate from the Statutory Auditors of the Company M/s. Singhi & Co. (FirmRegistration Number 302049E) regarding compliance of conditions of Corporate Governanceand the same forms part of this Annual Report.

Business Responsibility Report

The Business Responsibility Report in terms of Regulation 34 of the ListingRegulations forms part of this Annual Report.

Disclosures under Sexual Harassment of Women at Workplace (Prevention Prohibition& Redressal) Act 2013

The Company is committed to provide a safe and conducive work environment to itsemployees and has formulated ‘Policy for Prevention of Sexual Harassment’ toprohibit prevent or deter any acts of sexual harassment at workplace and to provide theprocedure for the redressal of complaints pertaining to sexual harassment therebyproviding a safe and healthy work environment. Further the Company has complied with theprovisions relating to constitution of Internal Complaints Committee under SexualHarassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013.However during the year under review no such incidence has been reported.

Directors’ Responsibility Statement

To the best of our knowledge and belief and according to the information andexplanations obtained by us we hereby make the following statements in terms of Section134(3)(c) and 134(5) of the Act:

(i) that in the preparation of the Annual Accounts the applicable Accounting Standardshad been followed along with proper explanation relating to material departures if any;

(ii) that such accounting policies as mentioned in Notes to the Annual Accounts havebeen selected and applied consistently and judgment and estimates have been made that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2021 and of the profit of the Company for that period;

(iii) that proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of theCompany and for preventing and detecting fraud and other irregularities has been taken;

(iv) that the Annual Accounts has been prepared on a going concern basis;

(v) that proper systems to ensure compliance with the provisions of all applicable lawsare in place and that such systems were adequate and operating effectively; and

(vi) that internal financial control to be followed by the Company are in place andthat such internal financial controls are adequate and are operating effectively.

Annexures forming a part of this Report of the Directors

Annexure Particulars

I Dividend Distribution Policy

II Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo

III Particulars of Employees

IV Policy on Appointment and Remuneration

V Annual Report on CSR Activities

VI Secretarial Audit Report

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

Acknowledgement

We would take this opportunity to thank our customers vendors bankers stakeholdersand the Government for their continued support. We place on record our appreciation of thecontribution made by our employees at all levels. Our consistent growth is possiblebecause of their hard work solidarity co-operation and support.

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

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