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Rupa & Company Ltd.

BSE: 533552 Sector: Industrials
NSE: RUPA ISIN Code: INE895B01021
BSE 00:00 | 15 Feb 311.65 -1.30
(-0.42%)
OPEN

309.60

HIGH

315.00

LOW

308.10

NSE 00:00 | 15 Feb 311.10 0.15
(0.05%)
OPEN

310.65

HIGH

316.90

LOW

306.40

OPEN 309.60
PREVIOUS CLOSE 312.95
VOLUME 1192
52-Week high 469.90
52-Week low 246.65
P/E 24.60
Mkt Cap.(Rs cr) 2,478
Buy Price 310.50
Buy Qty 10.00
Sell Price 311.65
Sell Qty 20.00
OPEN 309.60
CLOSE 312.95
VOLUME 1192
52-Week high 469.90
52-Week low 246.65
P/E 24.60
Mkt Cap.(Rs cr) 2,478
Buy Price 310.50
Buy Qty 10.00
Sell Price 311.65
Sell Qty 20.00

Rupa & Company Ltd. (RUPA) - Director Report

Company director report

for the Financial Year ended March 31 2018

Dear Shareholders

The Directors have pleasure in presenting their 33rd Annual Report on the business andoperations of the Company along with the Audited Accounts of the Company for theFinancial Year ended March 31 2018.

Financial Highlights

The financial performance of the Company is summarized hereunder:

Standalone Financial Review (Amount in Rs. )

Particulars 2017-18 2016-17
Revenue from Operations 11261135816 10842958389
Profit before Finance Charges Tax Depreciation/ Amortization (PBITDA) 1694562252 1445033093
Less: Finance Charges 75918277 105469502
Profit before Tax Depreciation/Amortization (PBTDA) 1618643975 1339563591
Less: Depreciation/Amortization 144117783 150487036
Profit before Tax (PBT) 1474526192 1189076555
Less: Tax Expense 528382660 417567218
Net Profit after Tax (PAT) 946143532 771509337
Other Comprehensive Income (1320170) (13820)
Total Comprehensive Income for the year 944823362 771495517
Consolidated Financial Review (Amount in Rs. )
Particulars 2017-18 2016-17
Revenue from Operations 11567616851 10928336495
Profit before Finance Charges Tax Depreciation/ Amortization (PBITDA) 1579164601 1414686196
Less: Finance Charges 81048999 105929607
Profit before Depreciation/Amortization (PBTDA) 1498115602 1308756589
Less: Depreciation/Amortization 157864875 162077990
Profit before Tax (PBT) 1340250727 1146678599
Less: Tax Expense 477951842 423841660
Net Profit after Tax (PAT) 862298885 722836939
Other Comprehensive Income (1251536) 81364
Total Comprehensive Income for the year 861047349 722918303

50 glorious years of fashioning India

This year has been a remarkable year as the Rupa group completed 50 glorious years offashioning India in the hosiery textile industry. What started off as a small unit wayback in 1968 has now evolved into a multi-dimensional business conglomerate – amilestone in true sense which has been in business for the past 50 years.

On the special occasion of completing 50 glorious years Hon'ble Governor of WestBengal Shri Kesri Nath Tripathi and Smt. J. Charukesi Post Master General KolkataRegion has released "Special Cover Envelope & My Stamp" with respectto Rupa on April 27 2018.

State of Company's Affairs and Future Outlook

The Company recorded a satisfactory business performance in spite of the disruptionscaused during the year under review by the after effects of the major economics decisionof the Government of India on implementation of Goods and Services Tax (GST) from July 12017.

The Company has adopted Ind AS w.e.f April 1 2017. Accordingly results for the yearended March 31 2018 have been prepared in accordance with Ind AS prescribed underSection 133 of the Companies Act 2013 ('Act') and other accounting principles generallyaccepted in India. Previous periods figures have been restated as per Ind AS to make themcomparable.

The Company achieved a Turnover of Rs. 1126.11 crores in Financial Year 2017-18 asagainst Rs. 1084.30 crores in 2016-17 i.e. registering a growth of 3.86% over the lastyear. During the year the Profit before Finance Charges Depreciation/ Amortization andTax stood at Rs. 169.46 crores as against Rs. 144.50 crores during the previous year anincrease of 17.27% in comparison to previous year. The Net Profit for the year 2017-18stood at Rs. 94.61 crores as compared to Rs. 77.15 crores during the previous yearregistering a growth of 22.64% over the previous year.

The Company is engaged in the Manufacturing Branding Marketing and selling of Men'sWomen's and Kid's Innerwear Thermal wear and Casual wear for all sections of the societylike Economy Mid-Premium Premium and Super-Premium. It has over 18 sub-brands and 8000SKUs (Stock Keeping Unit) having a strong brand recall. In order to nurture its brandsthe Company has been consistently involved in robust advertisement and brand promotionactivities thereby spending extensively on brand communication. In innerwear industrythe Company is a leader having a distribution network across India. The Company has aPAN-India presence with a large distribution network consisting of 4 central warehouses10 EBOs (Exclusive Brand Outlets) more than 1000 dealers and 125000 retailers. It isalso looking at enhancing availability through presence in e-commerce MBOs (Multi-BrandOutlets) and LFRs (Large Format Retail Stores). The Company is also looking forward toopen Rupa EBOs through the franchisee route across India and expand its retail footprint.The Company has manufacturing facilities situated at Howrah Domjur Tirupur Bengaluru andGhaziabad. The Company has 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 segment including men women and kid segment with its widebouquet 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 by leadingcelebrities including Ranveer Singh Sidharth Malhotra and Bipasha Basu. The Company hasalso premium brand Macroman M-Series which is being endorsed by youth icon RanbirKapoor and the premium brand under Female segment Macrowoman W-Series containingproducts like lingerie active wear and leisurewear. Rupa group is strengthening itsposition in the super-premium segment by acquiring the exclusive license for themanufacture market and sale of innerwear and other products of foreign brands in India.The Company's Wholly-owned Subsidiary Oban Fashions Private Limited has acquired anexclusive license for the brand 'FCUK' and the brand ‘Fruit of the Loom' ('FOTL')for the manufacture market and sale of innerwear and other products in India. Oban haslaunched FCUK and FOTL products at different locations in India. Going forward thesebrands are expected to further strengthen and cement its position in the super-premiumsegment.

The Indian innerwear industry is highly unorganized with unorganized players having 50%market share. The implementation of GST has been a major positive for organized players.Innerwear appears to be a potential growth category. The men's innerwear marketcontributes 40% and is characterized by the presence of numerous Indian and internationalbrands. The economy segment contributes around 56% in the men's wear market the mid-pricesegment 30% and the remaining 14% comes from premium and super-premium segments. Furtherthe premium and super-premium segments are expected to grow at a faster pace. The women'sinnerwear market which is driven by value-added innerwear products contributes around60% to the market and is growing at a faster rate of 15%. The market is largely dominatedby mid-priced and economy segment contributing 80% of the market while remaining comesfrom the premium and super premium segments. The Company believes that the industry is 50%unorganized and expects shift to happen from unorganized to organize in a longer run.Increasing urbanization preference towards branded products introduction of GSTorganized and online retailing etc. are various factors which would drive growth fororganized players.

The Company believes in the overall growth of its innerwear thermal wear and casualwear business across India through its innovative designs superior product qualityability to create a sustainable business model initiatives to nurture the in-house talentand the zeal towards the healthy creation of stakeholders' value. To overcome the variouseconomical challenges the Company from time to time revisits its marketing strategies.The Company has always been responsive towards the changing fashion needs by introducingnew line of products across all segments.

The Company is focusing on enhancing its product offering in the children and women'ssegment with the introduction of new products and brands. The Company is also looking toforay into the women's lingerie segment and is looking for a tie-up for the same. Both thechildren and women's segment have a lower presence of organized players and hence providea huge opportunity 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.

Subsidiaries

The Company has the following 3 (three) Wholly-owned Subsidiaries as on March 31 2018:

(i) Euro Fashion Inners International Private Limited which was earlier engaged inselling hosiery premium products under the brand name "EURO" designed for thefashion conscious consumers has transferred its business operations to its HoldingCompany through a Business Collaboration Agreement effective from April 1 2014.

During the year under review the Revenue from Operations including Other Income wasRs. 26.54 lacs as against Rs. 7.50 lacs during the previous year. Net profit Rs.20.48 lacs as compared duringtheyearwas to Net loss of Rs. 5.62 lacs during theprevious year.

(ii) Imoogi Fashions Private Limited which is engaged in manufacturing processing andselling hosiery and outer casual wear products of premium category for female and kid'ssegments under the brand name "Femmora" and "Imoogi" respectively.

During the Financial Year under review the Revenue from Operations including OtherIncome was Rs. 400.70 lacs as against Rs. 320 lacs during the previous year. Net Profitduring the year was Rs. 34.99 lacs as compared to Rs. 27 lacs during the previous year.

(iii) Oban Fashions Private Limited has been incorporated with the object interalia to operate Indian business of international brands managed under licensing/franchise/ joint venture/ ownership arrangements etc. Oban Fashions Private Limitedduring the Financial Year 2016-17 has acquired the brand "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 sale 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. 2955.31 lacs as against Rs. 751.59 lacs during the previous year. Netloss during the year was Rs. 893.91 lacs as compared to Rs. 508.10 lacs during theprevious year.

In terms of Regulation 24 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (SEBI Listing

Regulations) the above subsidiaries are not material subsidiaries.

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 Act including any subsequent amendment thereto read with Rule 5 ofthe Companies (Accounts) Rules 2014. Further the contribution of these subsidiaries tothe overall performance of the Company is provided under the Notes to the ConsolidatedFinancial Statements. The Audited Financial Statements together with the ConsolidatedFinancial Statements of the Company and other related information and the AuditedAccounts of the Company's subsidiaries are available on the website of the

Company at http://rupa.co.in/

The Annual Accounts of the subsidiaries and the related detailed information shall bemade available to the Members of the Company seeking such information at any point oftime. The Members may request for such information by writing to the Company Secretary atthe registered office of the Company. The copies of the Annual Accounts of thesubsidiaries remain open for inspection by the Members at the Company's registered office.Except as stated hereinabove the Company did not have any other subsidiary joint ventureor associate company during the year under review.

Change(s) in the Nature of Business

During the year under review there were no changes in the nature of the business ofthe Company.

Dividend

For the Financial Year 2017-18 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) @ 300% i.e. Rs. 3 per share for 79524560 equity shares of Rs.1/- (Rupee One only) each amounting to Rs. 238573680/- (Rupees Twenty-three croresEighty-five lacs Seventy-three thousand Six hundred and Eighty only). The dividend payoutis in accordance with the Company's Dividend Distribution Policy.

The Dividend Distribution Policy of the Company adopted by the Board of Directors ofthe Company pursuant to Regulation 43A of the SEBI Listing Regulations as amended isannexed hereto marked as ‘Annexure – I'.

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 CRISILA+/Stable and CRISIL A1+ for the long term and short term debt instruments/facilities ofthe Company respectively.

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
Mr. Arihant Kumar Baid Resigned from the post of Whole-time Director with effect from close of working hours on January 15 2018
Mr. Niraj Kabra Appointed as the Additional Director designated as Executive Director with effect from February 12 2018

Mr. Ghanshyam Prasad Agarwala Vice-Chairman (Whole-time Director) and Mr. RameshAgarwal Whole-time Director are liable to retire by rotation at the ensuing AnnualGeneral Meeting (AGM) and being eligible have offered themselves for re-appointment.Details of Directors to be re-appointed are provided in the Explanatory Statement to theNotice of the ensuing AGM.

Further details of Directors are provided in the Corporate Governance Report whichforms part of this Annual Report.

None of the Directors of the Company is disqualified under the provisions of Section164 of the Act.

Apart from the aforesaid no changes in the Directors and KMPs have taken place duringthe period under review.

Statement on Declaration given by 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 of the SEBI Listing Regulations.

Number of Meetings of Board of Directors

During the Financial Year 2017-18 4 (four) 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 without the presence ofNon-Independent Directors and members of the Management met on March 14 2018 and interalia: (i) reviewed the performance of Non-Independent Directors and the Board as awhole; (ii) reviewed the performance of the Chairperson of the Company taking intoaccount the views of Executive Directors and Non-executive Directors; and (iii) assessedthe quality quantity and timeliness of flow of information between the Company managementand the Board that is necessary for the Board to effectively & reasonably performtheir duties.

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 Directors individually. The IndependentDirectors of the Company without the participation of Non-Independent Directors andmembers of management in their separate meeting held on March 14 2018 have reviewed theperformance of Non-Independent Directors and the Board as a whole and also the performanceof the Chairperson of the Company. The review of performance of Non-Independent Directorswas done on various parameters such as skill competence experience degree ofengagement ideas & planning attendance leadership etc. The Board performance wasreviewed on various parameters such as adequacy of the composition of the Board Boardculture appropriateness of qualification & expertise of Board members process ofidentification and appointment of Independent Directors inter-personal skills ability toact proactively managing conflicts managing crisis situations diversity in theknowledge and related industry expertise roles and responsibilities of Board membersappropriate utilization of talents and skills of Board members etc.

The evaluation of the Chairperson of the Company was conducted on various parameterssuch as leadership quality capability availability clarity of understandinggovernance & compliance and degree of contribution etc. The Nomination andRemuneration Committee of the Board based on the report of the Independent Directorsevaluated the performance of the Non-Independent Directors. The said Committee membersalso evaluated the performance of the Independent Directors of the Company based on thereports of the Executive Directors considering their requisite skills competenceexperience and knowledge of the regulatory requirements relating to governance such asroles and responsibilities under the Code for Independent Directors the Act the SEBIListing 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 2018 the Company has 5 (Five) Committees:

Audit Committee

Nomination and Remuneration Committee

Stakeholders' Relationship Committee

Corporate Social Responsibility (CSR) Committee

Operations Committee

Audit Committee

As on March 31 2018 the Audit Committee comprised of 6 (six) Members of whichmajority were Independent Directors.

The details with respect to the composition of the Audit Committee the number ofmeetings held during the year under review attendance therein and its terms of referencehas been detailed out in the Corporate Governance Report which forms part of this AnnualReport.

Further there were no instances wherein the Board had not accepted any recommendationof 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 year under review attendance therein andits terms of reference have been stated in the Corporate Governance Report which formspart of this Annual Report.

Policy on Director's Appointment and Remuneration

The Board on the recommendation of 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 Company andthe same in brief is annexed hereto marked as ‘Annexure – IV'.

Stakeholders' Relationship Committee

Details pertaining to the constitution of the Stakeholders' Relationship Committee ofthe Board of Directors of the

Company number of meetings held during the year under review attendance therein andits terms of reference have been stated in the Corporate Governance Report which formspart of this Annual Report.

Corporate Social Responsibility (CSR) 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.

Annual Report on CSR Activities as prescribed under Section 135 of the Act read withRule 8 of the Companies (Corporate Social Responsibility Policy) Rules 2014 is annexedhereto marked as ‘Annexure –V'.

Terms of Reference: The detailed terms of reference of the CSR Committee is availableon the website of the Company at the linkhttp://rupa.co.in/site/wp-content/uploads/2015/10/Corporate-Social-ResponsibilityCommittee- .pdf

Composition of the Committee

Name of Member Position Category
Mr. Prahlad Rai Agarwala Chairman Promoter Executive
Mr. Kunj Bihari Agarwal Member Promoter Executive
Mr. Vinod Kumar Kothari Member Independent Non-Executive

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

Meeting and Attendance

During the Financial Year ended March 31 2018 2 (two) meetings of the CSR Committeewere held. The details of the said meeting and attendance therein are as hereunder:

Name of Member Meetings held during the year and Attendance
May 26 2017 February 12 2018
Mr. Prahlad Rai Agarwala Present Present
Mr. Kunj Bihari Agarwal Present Present
Mr. Vinod Kumar Kothari Present Present

Operations Committee

For administrative convenience and ease of doing business the Board of Directors ofthe Company have constituted the Operations Committee during the year 2017-18. TheOperations Committee have met 2 (two) times during the year 2017-18. The composition ofthe Operations Committee and details of the meetings and attendance therein are ashereunder:

Name of Member Category Meeting held during the year and Attendance
January 2 2018 February 20 2018
Mr. Kunj Bihari Agarwal Executive Promoter Present Present
Mr. Ramesh Agarwal Executive Promoter Present Present
Mr. Mukesh Agarwal Executive Promoter 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 line withthe policy of the Company to the highest possible standards of ethical moral and legalbusiness conduct and its commitment to open communication as well as timely redressal ofconcerns and disclosures to build and strengthen a culture of transparency and trust inthe Company. The mechanism also provides for adequate safeguards against victimization ofdirector(s) or employee(s) or any other person for availing the mechanism and inexceptional cases direct access to the Chairman of the Audit Committee to reportinstances of fraud/ misconduct. Audit Committee looks into the complaints raised if anyand their redressal. The Whistle Blower Policy of the Company is available on the websiteof the Company at the linkhttp://rupa.co.in/site/wp-content/uploads/2015/10/WhistleBlowerPolicy1.pdf

Extract of the Annual Return

The extract of the Annual Return as at the Financial Year ended March 31 2018 inForm MGT-9 is annexed hereto marked as ‘Annexure – VI'.

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 assessedquantifiedappropriately 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's riskappetite and regulatory requirements.

The Risk Management Policy is discussed at the meeting of the Audit Committee of theBoard of Directors. The management accepts the suggestions with regard to mitigation ofrisks that may arise in future. Further in the opinion of the Board there are noexisting factors which 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 it's 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 (MD) and Chief Financial Officer (CFO)in terms of Regulation 17(8) of the SEBI Listing Regulations provided in this AnnualReport also certifies the adequacy of our Internal Control systems and procedures.

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 32 nd 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's Registration Number 303054E) wasappointed as the Internal Auditors of the Company to conduct the Internal Audit for theFinancial Year 2017-18. 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 2017-18 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 M/s. Nidhi Bagri & Company Practicing CompanySecretaries to conduct the Secretarial Audit of the Company for the Financial Year2017-18. The Secretarial Audit Report in Form MR-3 for the Financial Year 2017-18 isannexed hereto marked as ‘Annexure – VII'. The Secretarial Audit Reportdoes 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 2017-18 and the date of this Report.

Details of significant and material orders passed by the Regulators/ Courts/ Tribunalsand 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.

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 ended March 31 2018.

Particulars of Loans Guarantees or Investments

The loan given guarantee given and investment made by the Company during the FinancialYear ended March 31

2018 are within the limits prescribed under Section 186 of the Act. Further thedetails of the said loan given guarantee given and investment made are provided in theNotes to the 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 2017-18 withits related parties were in the ordinary course of business and on an arm's length basisand were reviewed and approved by the Audit Committee of the Board. Further during thesaid 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 provided inForm AOC-2 annexed hereto marked as ‘Annexure – VIII'. Furthersuitable disclosure as required by the Accounting