The Directors have pleasure in presenting their 34th Annual Report on the business andoperations of the Company along with the Audited Accounts of the Company for theFinancial Year ended March 31 2019.
The financial performance of the Company is summarized hereunder:
|Standalone Financial Review || ||(Rs. in Lakhs) |
|Particulars ||2018-19 ||2017-18 |
|Revenue from Operations ||110824.10 ||108975.57 |
|Profit before Finance Costs Tax Depreciation/ Amortization (PBITDA) ||17530.65 ||16945.62 |
|Less: Finance Costs ||1672.75 ||759.18 |
|Profit before Tax Depreciation/Amortization (PBTDA) ||15857.90 ||16186.44 |
|Less: Depreciation ||1317.40 ||1441.18 |
|Profit before Tax (PBT) ||14540.50 ||14745.26 |
|Less: Tax Expense ||5203.12 ||5283.83 |
|Net Profit after Tax (PAT) ||9337.38 ||9461.43 |
|Other Comprehensive Income ||1.28 ||(13.20) |
|Total Comprehensive Income for the year ||9338.66 ||9448.23 |
|Consolidated Financial Review || || |
|Revenue from Operations ||115470.13 ||112036.86 |
|Profit before Finance Costs Tax Depreciation/ Amortization (PBITDA) ||15304.22 ||15791.65 |
|Less: Finance Costs ||1855.25 ||810.49 |
|Profit before Depreciation/Amortization (PBTDA) ||13448.97 ||14981.16 |
|Less: Depreciation ||1501.17 ||1578.65 |
|Profit before Tax (PBT) ||11947.80 ||13402.51 |
|Less: Tax Expense ||4530.02 ||4779.52 |
|Net Profit after Tax (PAT) ||7417.78 ||8622.99 |
|Other Comprehensive Income ||4.29 ||(12.52) |
|Total Comprehensive Income for the year ||7422.07 ||8610.47 |
State of Company's Affairs and Future Outlook
The Company achieved a Turnover of Rs. 110824.10 lacs during the Financial Year2018-19 as against Rs. 108975.57 lakhs in 2017-18 i.e. registering a growth of 1.70%over the last year. During the year the Profit before Finance Charges Depreciation andTax stood at Rs. 17530.65 lakhs as against Rs. 16945.62 lakhs during the previous yearan increase of 3.45% in comparison to previous year. The Net Profit for the year 2018-19stood at Rs. 9337.38 lakhs as compared to Rs. 9461.43 lakhs during the previous year.Financial Year 2018-19 was very challenging where the market faced liquidity stress whichimpacted working capital cycle resulting in higher finance cost and pressure on margin.However the Company continued to maintain its credit policy to mitigate exposure tohigher credit risk. In order to address the credit risk issue the Company is contemplatingto extend easy financial solution to dealers which shall help them overcome liquiditystress in the market in general. Gradually the Company is also moving some part ofwholesale business to retailing business but the cycle to change over may take some time.Due to the transition in short term we are seeing some challenges in revenue but in longrun this will be rewarding.
On consolidated basis the Turnover for the year 2018-19 was Rs. 115470.13 lakhs asagainst Rs. 112036.86 lakhs in 2017-18. The Profit before Finance Charges Depreciationand Tax stood at Rs. 15304.22 lakhs during 2018-19 as against Rs. 15791.65 lakhs duringthe previous year and the Net Profit for the year 2018-19 stood at Rs. 7417.78 lakhs ascompared to Rs. 8622.99 lakhs during the previous year. The decrease in profit onconsolidated basis was mainly due to loss in Oban Fashions Private Limited Wholly-ownedSubsidiary of the Company. In Oban we are investing in brand building including moderntrade and e-commerce which has a long break-even point but very critical for thebusiness and been very good traction in modern trade including e-commerce and we areconfident that this will give a good result in future.
The Company is engaged in the Manufacturing Branding Marketing and Sell of Men's andWomen's Innerwear Thermal wear and Casual wear for all sections of the society likeEconomy Mid-Premium Premium and Super-Premium. It has over 18 sub-brands and 8000 SKUs(Stock Keeping Unit) having a strong brand recall. In order to nurture its brands theCompany 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 Bengaluruand Ghaziabad. 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 Anushka Sharma. The Company hasalso premium brand Macroman M-Series which is being endorsed by youth icon RanbirKapoor and the premium brand under Female segment Macroman W-Series containing productslike lingerie active wear and leisurewear.
Rupa through its Wholly-owned Subsidiary Oban Fashions Private Limited has acquiredan exclusive license for the brand 'FCUK' and the brand 'Fruit of the Loom' tomanufacture market and sale of innerwear and other products in India. The FCUK and FOTLproducts has been launched at different locations in India. Going forward these brandsare expected to further strengthen and cement its position in the super-premium 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 Softline and Macrowoman W Series.The Company is continuously striving at strengthening its female innerwear segment aswell and is open to grow in this segment through inorganic route also in domestic market.
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.
The Company has the following 3 (three) Wholly-owned Subsidiaries as on March 31 2019:
(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. 17.82/- lacs as against Rs. 26.54 lacs during the previous year. Net profit duringthe year was Rs. 8.35 lacs as compared to Net profit of Rs. 20.48 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 kidssegments under the brand name "Femmora".
During the Financial Year under review the Revenue from Operations including OtherIncome was Rs. 388.97 lacs as against Rs. 400.70 lacs during the previous year. NetProfit during the year was Rs. 35.45 lacs as compared to Rs. 34.99 lacs during theprevious year.
(iii) Oban Fashions Private Limited has been incorporated with the object inter aliato operate Indian business of international brands managed under licensing/ franchise/joint venture/ ownership arrangements etc.
Oban Fashions Private Limited during the Financial Year 2016-17 has acquired thebrand "FCUK" from the French Connection Limited and the brand "Fruit ofthe Loom" from Fruit of the Loom Inc a New York Corporation being a Wholly-ownedSubsidiary of Berkshire Hathaway Company to develop manufacture market and sale of theinnerwear and related products under the respective brand names in India.
During the Financial Year under review the Revenue from Operations including OtherIncome was Rs. 3969.57 lacs as against Rs. 2955.31 lacs during the previous year. Netloss during the year was Rs. 1963.40 lacs as compared to Rs. 893.91 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 notmaterial 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 Companies Act 2013 including any subsequent amendment thereto (the'Act') read with Rule 5 of the Companies (Accounts) Rules 2014. Further the contributionof these subsidiaries to the overall performance of the Company is provided under theNotes to the Consolidated Financial Statements. The Audited Financial Statements togetherwith the Consolidated Financial Statements of the Company and other related informationand the Audited Accounts of the Company's subsidiaries are available on the website of theCompany at www.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 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.
For the Financial Year 2018-19 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/- each amounting to Rs. 238573680/- (Rupees Twenty Three Crore Eighty Five LacsSeventy Three Thousand Six Hundred and Eighty Only). The dividend payout is in accordancewith 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 isavailable on the website of the Company and also annexed hereto marked as 'Annexure - I'.
Transfer of Shares and unclaimed dividend to IEPF
During the year ended March 31 2019 the Company has transferred unclaimed and unpaiddividend for the Financial Year 2010-11 amounting to Rs. 159255/- (Rupees One LakhFifty Nine Thousand Two Hundred Fifty Five only) to the IEPF. During the year ended March31 2019 21 Equity Shares of '1/- each held by 3 (Three) shareholders in aggregatewhose dividends have remained unpaid or unclaimed for a period of 7 (Seven) consecutiveyears or more as on the due date have been transferred to the IEPF Demat Account withinthe 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.
Crisil Limited the Credit Rating Agency has assigned the credit ratings CRISILAA-/Stable and CRISIL A1+ for the long term and short term debt instruments/facilities ofthe Company respectively. The details of the rating assigned by the Credit Rating Agencyhas been disclosed in the Corporate Governance Report which forms part of this AnnualReport.
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. Satya Brata Ganguly ||Resigned from the post of Independent Director with effect from July 3 2018 |
|Mr. Ashok Bhandari ||Appointed as an Independent Director with effect from August 10 2018 |
|Mr. Ghanshyam Prasad Agarwala ||Director retire by rotation reappointed at the AGM on August 31 2018 |
|Mr. Ramesh Agarwal ||Director retire by rotation reappointed at the AGM on August 31 2018 |
|Mr. Dinesh Kumar Lodha ||Appointed as Chief Executive Officer (KMP) with effect from February 25 2019 at the Board Meeting held on February 8 2019 |
Pursuant to the provisions of the Companies Act 2013 ('the Act') the Members of theCompany at the 29th AGM held on September 11 2014 had approved the appointment of Mr.Vinod Kumar Kothari Mr. Dipak Kumar Banerjee Mr. Sushil Patwari and Mr. Dharam ChandJain as an Independent Director of the Company to hold office for 5 (Five) consecutiveyears up to the date of this ensuing AGM. Further the appointment of Mrs. Alka DeviBangur as an Independent Director of the Company for a period of 5 (Five) consecutiveyears w.e.f. November 14 2014 was approved at the AGM held on September 15 2015. Theabove mentioned Independent Directors are eligible for re-appointment as an IndependentDirector of the Company for a second term of 5 (Five) consecutive years. Pursuant to theprovisions of the Act and the SEBI Listing Regulations based on the recommendation of theNomination and Remuneration Committee the Board of Directors has approved theirreappointment and recommended for the approval of the Members by way of special resolutionat the ensuing AGM of the Company to hold office for a further period of 5 (Five)consecutive years.
Mr. Prahlad Rai Agarwala Chairman and Mr. Mukesh Agarwal Whole-time Director areliable to retire by rotation at the ensuing AGM and being eligible have offeredthemselves for re-appointment.
Details of Directors to be re-appointed are provided in the Explanatory Statement tothe Notice of the ensuing AGM. Further details of Directors are provided in the CorporateGovernance Report which forms part of this Annual Report.
None of the Directors of the Company is disqualified under the provisions of Section164(2)(a) & (b) of the Act. Apart from the aforesaid no changes in the Directors andKMPs 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 of the SEBI Listing Regulations.
Number of Meetings of Board of Directors
During the Financial Year 2018-19 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 13 2019 and interalia:
(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.
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 Independent Directors of the Company without the participation of Non-IndependentDirectors and members of management in their separate meeting held on March 13 2019have 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 degree of engagement ideas & planning attendance leadership etc. TheBoard performance was reviewed on various parameters such as adequacy of the compositionof the Board Board culture appropriateness of qualification & expertise of Boardmembers process of identification and appointment of Independent Directorsinter-personal skills ability to act proactively managing conflicts managing crisissituations 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's Committees and ofindividual 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 2019 the Board has 6 (six) Committees:
Nomination and Remuneration Committee
Stakeholder's Relationship Committee
Corporate Social Responsibility (CSR) Committee
Risk Management Committee
Operations Committee Audit Committee
As on March 31 2019 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 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 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 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 is available on the website of the Company at the linkhttp://rupa.co.in/livesite/ wp-content/uploads/2018/12/ Remuneration_Policy.pdf. and isalso 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 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.
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 Corporate SocialResponsibility Committee is available on the website of the Company at the linkhttp://rupa.co.in/site/wp-content/uploads/ 2015/10/Corporate-Social-Responsibility-Committee.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 2019 2 (two) meetings of the CorporateSocial Responsibility Committee were held. The details of the said meeting and attendancetherein are as hereunder:
|Name of Member || |
Meetings held during the year and Attendance
| ||May 23 2018 ||February 8 2019 |
|Mr. Prahlad Rai Agarwala ||Present ||Present |
|Mr. Kunj Bihari Agarwal ||Present ||Present |
|Mr. Vinod Kumar Kothari ||Present ||Present |
Risk Management Committee
The Risk Management Committee of the Board of Directors of the Company was constitutedon May 23 2018. As on March 31 2019 the Risk Management Committee comprised of 6 (six)Members. The details with respect to its composition the number of meetings held duringthe Financial Year under review and attendance therein and the terms of reference hasbeen detailed out in the Corporate Governance Report which forms part of this AnnualReport.
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 5 (Five) times during the year 201819. The composition ofthe Operations Committee and details of the Meeting and attendance thereof are ashereunder:
|Name of Member ||1 Category || |
Meeting held during the year and Attendance
| || ||1 April 17 2018 ||July 18 2018 ||August 27 2018 ||November 27 2018 ||February 4 2019 |
|Mr. Kunj Bihari Agarwal ||Executive Promoter ||Present ||Present ||Present ||Present ||Present |
|Mr. Ramesh Agarwal ||Executive Promoter ||Present ||Present ||Present ||Present ||Present |
|Mr. Mukesh Agarwal ||Executive Promoter ||Present ||Absent ||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 Operations Committeealso performs such other functions as may be assigned to them by the Board of Directorsfrom time to time.
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 'Whistle BlowerPolicy' with an objective to provide an avenue to address concerns in line with thepolicy 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 as amended on February 82019 is available on the website of 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 2019 inForm MGT-9 is available on the website of the Company as a part of the Annual Report atthe link http://rupa.co.in/annual-report-accounts/ and the same is also annexed heretomarked 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 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's riskappetite and regulatory requirements.
The Risk Management Policy is discussed at the meeting of the Audit Committee and RiskManagement Committee of the Board of Directors. The management accepts the suggestionswith regard to mitigation of risks that may arise in future. Further in the opinion ofthe Board there are no existing 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 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.
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 2018-19. 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 2018-19 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 2018-19. The Secretarial Audit Report in Form MR-3 for the Financial Year 2018-19is annexed hereto marked as 'Annexure - VII'. The Secretarial Audit Report does notcontain 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 2018-19 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 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 2019.
Particulars of Loans Guarantees or Investments
The loan and guarantee given by the Company during the financial year ended March 312019 are within the limits prescribed under Section 186 of the Act. Further the detailsof the loan given guarantee given and investment made are provided in the Notes to theFinancial 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 2018-19 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 theFinancial Year the Company has not entered into any contract/ arrangement/ transactionwith related parties which could be considered material in accordance with the Company'spolicy of Materiality of Related Party Transactions except those provided in Form AOC-2annexed hereto marked as 'Annexure - VIII'. Further suitable disclosure as required bythe Accounting Standards has been made in the Notes to the Financial Statements.
The Policy on dealing with Related Party Transactions is available on the website ofthe Company at the link- 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 by the Company with promoter/ promoter groupwhich 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) |
|Rajnish Enterprises Ltd ||19.90% ||Enterprises owned or significantly influenced _ by key management personnel or their relatives _ ||Dividend ||47469570 |
|Binod Hosiery (shares held in the name of its partners Mr. Prahlad Rai Agarwala jointly with Mr. Ghanshyam Prasad Agarwala and Mr. Kunj Bihari Agarwal ||21.08% || ||Dividend ||50290968 |
| || || ||Rent payment ||14400 |
Compliance with Secretarial Standards
The Directors state that the Company is in compliance with the applicable SecretarialStandards.
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 SEBI 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' to prohibitprevent or deter any acts of sexual harassment at workplace and to provide the procedurefor the redressal of complaints pertaining to sexual harassment thereby providing a safeand healthy work environment. Further the Company has complied with the provisionsrelating to constitution of Internal Complaints Committee under Sexual Harassment of Womenat Workplace (Prevention Prohibition and 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 2019 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 Exchange Earnings and Outgo |
|III ||Particulars of Employees |
|IV ||Policy on Appointment and Remuneration |
|V ||Annual Report on CSR Activities |
|VI ||Extract of the Annual Return in Form MGT-9 |
|VII ||Secretarial Audit Report |
|VIII ||Particulars of Contracts or Arrangements with Related Parties in Form AOC-2 |
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 performance 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 25 2019 ||DIN: 00847452 |