The Directors present the Annual Report together with the audited Balance Sheet and the Statement of Profit and Loss of RSWM Limited for the year ended March 31, 2018.

Company’s Performance

Your Company's performance during the year 2017-2018 is summarized below:

Financial Results

(Rs. in Crores)

Number of Meetings of the Board

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

The composition of the Board and its committees has also been given in detail in the report on Corporate Governance.

Dividend and other Appropriations

Your Directors are pleased to recommend a dividend on Equity Shares @ 20% i.e. Rs.2 per Equity Share of Rs.10/- each for the year ended the March 31, 2018.

The proposal for payment of dividend on Equity Shares of the Company will absorb an amount of Rs.5.70 Crore (inclusive of dividend distribution tax).

The proposal with regard to the payment of dividend on Equity Shares for the year ended March 31, 2018 shall be placed before the shareholders at the ensuing Annual General Meeting.

No amount is proposed to be transferred to General Reserve. The amount of Rs. 49.10 crore has been carried over to next year.

Operational Performance

Your Directors inform the members that during the year under review, the operations of the Company stabilised from the aftermath of demonetisation. However, the bigger economic event of implementation of Goods and Service Tax w.e.f July 1, 2017 impacted the overall business sentiments particularly in the 1st half of the Financial Year. Your Company geared itself to face the challenges and made all efforts to continue its operations with full efficiency and vigour.

Despite all the difficulties, your Company recorded a marginal decrease in turnover at Rs.2,943.09 Crores against Rs.2996.20 Crores in the previous year. However, operating profit of the Company declined to Rs.263.08 crore from Rs.357.87 crore recorded in the previous year. Profit before depreciation also declined to Rs.145.79 Crores against Rs.247.51 Crores recorded in the previous year and the profit after tax also decreased to Rs.14.50 Crores against Rs.100.97 Crores in the previous year. Your Directors inform the member that the financial statements of your Company have been drawn on the Ind-AS for the financial year ended March 31, 2018 with comparatives.

Your Company took various steps to overcome the situation which included rationalisation, modernisation and capex programme on need priority basis. Apart from this, the Company enhanced its focus on marketing and value addition to achieve the optimum benefits. Your Company also focused on cost reduction to improve the profitability along with better product mix and improving efficiency. Your Directors inform the members that due to above steps the profitability of the Company improved substantially in the second half of the Financial Year under review. The above measures are expected to result positively in the current Financial Year also.

The analytical review of the Company's performance and its businesses, including initiatives in the areas of human resources and information technology, have been presented in the section on Management Discussion and Analysis of the Annual Report.

Working results of last three financial years 2015-16 to 201718 are given in Annexure - 1 and form part of this report.

Expansion and Modernization

Your Directors in their previous report had reported about the commissioning of Denim Sheet Dyeing project which resulted in enhancing the production capacity of Denim Fabric to 25 million meters from 17 million meters per annum. However, the full benefits of this expansion could not be realized due to market conditions in the backdrop of GST implementation.

Your Directors had also reported in previous report about the completion of phase-I of debottlenecking and up-gradation of equipments and facilities across various units of the Company. Your Directors had also reported the initiation of phase II of Technology up-gradation & debottlenecking programme to further modernise the facilities and equipments at various units of the Company. Your Directors feel pleasure in informing the members that this programme has been completed during the year at a capital outlay of Rs.42.29 crores. The above programme has resulted in modernising the equipment and facilities across various units of the Company. Your Directors further inform the members that your Company, during the year had installed and operationalised. 3.6 M.W Roof Top Solar Power facility at its Mandpam and Kanyakheri Units which had been built at a total cost of Rs.16.05 crores.

Your Directors inform the members that your Company has outlined further capex of Rs.56.55 crores for modernisation of spinning facility at Ringus unit as well as expansion of capacity of Recycled Polyester Fibre at the same location. This programme is likely to be operational in the current financial year.

Your Directors are hopeful that with the completion of debottlenecking and up-gradation of facilities as well as implementation of new initiatives, the overall productivity and profitability of the Company will improve considerably.

Subsidiary Companies, Joint Ventures & Associates

Your Directors inform the members that during the financial year under review, your Company has no Subsidiary.

During the year under review, your Company continued to receive wind power supply from LNJ Power Ventures Limited. This green power initiative also enables your Company to meet its Renewable Power Obligations. Your Directors further inform the members that during the year its Joint Venture partner M/s Bhilwara Energy Limited exited from the Wind Power business and accordingly M/s Hero Wind Energy Private Limited were inducted as Joint Venture partner in their place.

Further as reported in the previous report, your Company is holding significant investment in Bhilwara Energy Limited and is represented by Shri Riju Jhunjhunwala, Managing Director of your Company on their Board where also he is holding the position of Managing Director. Accordingly, M/s Bhilwara Energy Limited continues to be associate of your Company.

Your Directors inform the members that in line with the emphasis of government on Skill Development, your Company decided to undertake the skill development related activities and accordingly acquired 40.66% stake in the form of subscription of 7,50,000 shares in LNJ Skills & Rozgar Private Limited which is involved in skill development activities. Accordingly, LNJ Skills & Rozgar Private Limited has become associate of your Company.

A statement containing the salient features of the financial statements of LNJ Power Ventures Limited, Bhilwara Energy Limited and LNJ Skills & Rozgar Private Limited in the prescribed format AOC 1 is annexed as Annexure - II.

Contribution to the Exchequer

Your Company has contributed an amount of H 267.55 Crores in terms of taxes and duties to the Exchequer.

Corporate Social Responsibility

Your Directors feel pleasure to inform the members that your Company has been on the forefront to fulfil its obligation towards the society at large and accordingly made its contribution in whole gamut of activities such as sanitation and safe drinking water, eradicating hunger, poverty and malnutrition, ensuring environmental sustainability, ecological balance, protection of national heritage, promotion of rural sports etc. Your Directors in their previous report had informed the members that at the request of State Government of Rajasthan, your Company had undertaken to build the damaged wall of Check Dam at Beneshwar near Mordi, Banswara. Your Directors feel pleasure to inform the members that during the year under review an amount of H99.37 lakhs was spent towards this project. Your Company also sponsored for Rajasthan Heritage Development Project. An amount of H10 lakhs was incurred towards this. These activities were besides the other activities undertaken by the Company from time to time.

Your Directors inform the members that the Corporate Social Responsibility Committee comprising of Shri Arun Churiwal, Shri Riju Jhunjhunwala and Shri Amar Nath Choudhary monitors the expenditure incurred on the CSR activities and formulate an annual budget for these activities. Your Directors also review the progress periodically.

The details of the CSR spend by the Company are annexed as Annexure III forming part of this report.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

Your Directors inform the members that your Company continuously looks out for energy conservation measures in all areas of operation across its various units. Similarly, your Company endeavours to lookout for up-gradation and absorption of technology. Your Company also spends continuously on Research and Development. Your Directors are glad to inform the members that your Company is a net foreign exchange earner. The relevant detail as required to be disclosed with respect to Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo pursuant to Section 134(3) (m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure - IV forming part of this report.

Extract of Annual Return

Pursuant to Section 92 of the Companies Act, 2013 read with Rule 12 of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in prescribed format MGT-9 is annexed as Annexure - V.

Directors & Key Managerial Personnel

Shri Ravi Jhunjhunwala and Shri Arun Churiwal, Directors retire by rotation and being eligible offer themselves for reappointment.

During the financial year under review, Smt. Geeta Mathur, Independent Woman Director resigned from the Board with effect from 9th November, 2017 due to her time commitments. Further, Shri Prakash Maheshwari, Executive Director also resigned from the Board with effect from 31st March, 2018 due to completion of his term. Your Directors place on record their appreciation for the services rendered by Smt. Geeta Mathur and Shri Prakash Maheshwari during their tenure on the Board.

Your Directors further inform the members that Smt. Archana Capoor was co-opted on the Board as an Additional Director in the category of Independent Director with effect from 13th February, 2018. Smt. Archana Capoor brings with her vast experience in the field of Finance and Market Research. Your Directors further inform the members that the term of Shri Priya Shankar Dasgupta as Independent Director is due for completion on 15th September, 2018. Your Directors upon commendation of Nomination and Remuneration Committee proposed to reappoint Shri Priya Shankar Dasgupta for the second term of 5 years w.e.f 16th September, 2018. The proposal for confirmation of appointment of Smt Archana Capoor and re-appointment of Shri Priya Shankar Dasgupta as Independent Director(s) for a term of 5 years shall be put up before the ensuing Annual General Meeting.

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

During the year, Shri Riju Jhunjhunwala, Managing Director & CEO, Shri Surender Gupta, Company Secretary and Shri B.M. Sharma, Chief Financial Officer acted as Key Managerial Personnel.

Directors’ Appointment and Remuneration Policy

As your Directors informed the members in their previous report, a Nomination and Remuneration Policy had been framed by your Company for the appointment of Directors and Senior Management and fixation of their remuneration. The Nomination and Remuneration Policy as framed is annexed as Annexure VI and forms part of this report.

Your Directors inform the members that the Nomination and Remuneration Committee as well your Directors endeavour to follow the policy and all appointments at Board and Senior Management are considered at the meetings of the Committee and the Board.

Annual Evaluation by the Board

Your Board of Directors, during the financial year under review, carried out annual evaluation of its own performance as well as its Committees and also of the individual Directors in the manner as enumerated in the Nomination and Remuneration Policy in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Directors feel pleasure in informing the members that the performance of the Board as a whole and its members individually was adjudged satisfactory.

Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments are given in the Notes to the Financial Statements at appropriate places.

Particulars of Contracts or Arrangements with Related Parties

All contracts/ arrangements/ transactions entered into by the Company during the financial year with the related parties are on arm's length basis and in the ordinary course of business. During the financial year, there was no material contracts or arrangements entered into by the Company with any of the related party. Your Directors draw attention of the members to Note No.39 to the financial statements, which contain particulars with respect to related parties. The policy on dealing with the related party transactions as approved by the Board of Directors is disclosed on the website of the Company under the following link

http://www.rswm.in/wp-content/themes/rswm/template- investors/pdf/various-policies/Related_Party_Transaction_Policy-2018.pdf

Significant and Material Orders Passed by the Regulators or Courts

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

Risk Management Policy

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

Internal Control Systems

Your Directors inform the members that your Company has put in place strong internal control systems commensurating with the size of the Company. Further, your Directors take utmost care to ensure that all assets are properly safeguarded and reliable information is provided to the management. Your Directors endeavour to inform the member that all the obligations of the Company are properly adhered to.

Your Directors place utmost importance on continuous strengthening of internal control systems. As reported in the previous report, your Company has put in place a system whereby all areas of the operations of the Company are reviewed by the internal as well as external professionals and independent audit firms. Your Company takes adequate measures with respect to gaps, if any, reported. The Audit Committee of your Company regularly monitors the annual operating plans, risk assessment and minimization procedures as well as mitigation plans.

Your Directors endeavour to continuously improve and monitor the internal control systems.

Particulars of Employees

The information pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, of the employees is annexed as Annexure -VII.

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

Auditors

Statutory Auditors

During the year under review, M/s S. Bhargava Associates, Chartered Accountant (Firm Registration No 003191C), Joint Statutory Auditors of the Company retired at the conclusion of the 56th Annual General Meeting as they became ineligible for re-appointment pursuant to Section 139 of the Companies Act, 2013 and rules made thereunder. M/s S. Bhargava & Associates rendered their services over the years and your Board places on record its appreciation of their services as Joint Statutory Auditors of the Company.

M/s Lodha & Co, Chartered Accountants (Firm Registration No.301051E), were appointed as Joint Statutory Auditors of the Company at the 56th Annual General Meeting of the Company held on 27th September, 2017 for a term of 5 years till the conclusion of 61st Annual General Meeting subject to ratification by members at every subsequent Annual General Meeting.

Further, M/s S. S. Kothari Mehta & Co., Chartered Accountants (Firm Registration No.000756N), Joint Statutory Auditors of the Company, were appointed at the 53rd Annual General Meeting of the Company held on September 16, 2014 for a term of 5 years till the conclusion of 58th Annual General Meeting subject to ratification by members at every subsequent Annual General Meeting.

Your Directors inform the members that in accordance with the amendment notified by MCA on 7th May, 2018, the requirement of ratification of the appointment of Statutory Auditors at every Annual General Meeting has been omitted and is no longer required. Accordingly, the notice convening the ensuing Annual General Meeting does not carry resolutions with regard to ratification of appointment of Statutory Auditors.

However, both the Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules framed thereunder.

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

Internal Auditors

Your Directors, during the year under review, appointed M/s. P. K. Deora & Co., Chartered Accountants (Firm Registration No.004167N), M/s. BGJC & Associates LLP, Chartered Accountants (Firm Registration No.003304N) and M/s. ASM Bhargava & Co., Chartered Accountants (Firm Registration No.019378C) to act as the Internal Auditors of the Company for the financial year 201718 pursuant to Section 138 of the Companies Act, 2013 read with The Companies (Accounts) Rules, 2014.

Secretarial Auditor

Your Directors, during the year under review, also appointed Shri Mahesh Gupta, Practicing Company Secretary (Membership No. FCS 2870 and CP No.1999) Proprietor of M/s Mahesh Gupta & Company, Company Secretaries, Delhi as the Secretarial Auditor of the Company for the financial year 2017-18 pursuant to Section 204 of the Companies Act, 2013 read with The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of Secretarial Audit is annexed as Annexure IX.

Cost Auditor

Your Directors inform the Members that pursuant to Section 148 of the Companies Act, 2013 read with The Companies (Cost Records and Audit) Rules, 2014, Textile Companies are required to get their cost records audited. In this connection, the Board of Directors of the Company on the commendation of Audit Committee had approved the appointment of M/s. N. D. Birla & Company, Cost Accountants, (Firm Registration No. 000028), Ahmedabad as the Cost Auditor of the Company for the year ending March 31, 2018.

Corporate Governance

Report on Corporate Governance along with the Certificate of Auditors M/s. S. S. Kothari Mehta & Co., Chartered Accountants (Firm Registration No 000756N), Plot No-68, Okhla Industrial Area, Phase III, New Delhi -110020 and M/s. Lodha & Co., Chartered Accountants (Firm Registration No.301051E), 12, Bhagat Singh Marg, New Delhi - 110 001 confirming compliance to conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, form part of the Annual Report.

Whistle Blower Policy

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

http://www.rswm.in/wp-content/themes/rswm/template- investors/pdf/various-policies/RSWM-Whistle-Blower-Policy-2018.pdf

Management Discussion and Analysis Report

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

Directors’ Responsibility Statement.

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

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

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

(c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they had prepared the annual accounts on a going concern basis; and

(e) they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

Acknowledgements

Your Directors take this opportunity to thank customers, members, suppliers, bankers, business partners / associates, Central and State Governments for their consistent support and co-operation extended to the Company. We also acknowledge the significant contribution made by the employees by their dedication and hard work and trust reposed on us. We look forward to have the same support in our endeavour to help the Company to grow faster.

For and on behalf of the Board

Ravi Jhunjhunwala

Chairman DIN - 00060972

Place: Noida (U.P)

Date: May 10, 2018