Your Directors have pleasure in presenting their twenty second Annual Report on thebusiness and operations of the Company and the financial statements for the year ended 31stMarch 2016.
Company's financial performance for the year under review alongwith previous year'sfigures are given hereunder
|PARTICULARS ||31.03.2016 ||31.03.2015 |
| ||( Rs. in '000) ||( Rs. in '000) |
|Revenue from operations ||1187863 ||1333018 |
|Other Income ||3440 ||4229 |
|Operating Profit before Finance Costs || || |
|Depreciation & Tax ||180915 ||190622 |
|Less: Depreciation ||59816 ||60477 |
|Less : Finance Costs ||54901 ||70398 |
|Profit before Tax ||66198 ||59747 |
|Provision for Tax ||14092 ||12240 |
|Deferred Tax ||7132 ||(3970) |
|Net Profit for the year ||44974 ||51477 |
|Add: Balance brought forward from previous year ||154291 ||112485 |
|Profit available for appropriation ||199265 ||163962 |
|Appropriation of Profits || || |
|Transfer to General Reserve ||1125 ||1290 |
|Proposed Dividend ||6808 ||6808 |
|Corporate Dividend Tax ||1386 ||1572 |
|Balance carried over to Balance Sheet ||189946 ||154291 |
The Company achieved a total turnover of Rs. 119.13 Crores as against a turnover of Rs.133.72 crores in the previous year. The Company's profit before tax is Rs. 6.62 croresduring the year as compared to Rs. 5.97 crores in the previous year an increase of10.88% over the last year. The Company earned a net profit of Rs. 4.49 crores as againsta net profit of Rs. 5.14 crores in the previous year.
STATE OF COMPANYS AFFAIRS:
During the financial year under review the Company has completed construction ofCommercial Complex at the heart of city with a tenantable area of 28000 square feet. TheCompany has rented two floors during the current financial year and is in the process torent balance two floors.
The Company has purchased land admeasuring 85000 square feet adjacent to the currentPlant location for expansion and the land development is underway. The Company is planningto add a further capacity of 15000 spindles to the existing capacity of 37856 spindleswith a timeframe of two years for implementation of the said expansion. The cost of theproject will be Rs. 35 Crores funded thru Term Loan and internal accruals.
To enhance the spinning capacity the Company has entered into an agreement with aspinning mill to utilize their spare capacity of 5456 spindles for conversion of fiberinto yarn.
In order to reduce the power cost the Company has entered into an agreement with MytrahVayu Manjira Private Limited for purchasing an additional 30 lacs units of wind power atthe rate of Rs. 6.50/unit.
The Company proposes to transfer an amount of Rs. 11.25 Lakhs to the General Reserves.An amount of Rs. 1899.46 Lakhs is proposed to be retained in the Statement of Profit andLoss.
Your Directors are pleased to recommend a dividend of Rs. 0.75 per equity share (15%)of face value of Rs. 5/- each (Previous year Rs. 1.50 per equity share (15%) of face valueof Rs. 10/- each). If the dividend as recommended above is declared by the Members atthe Annual General Meeting the total outflow towards dividend on Equity Shares for theyear would be Rs. 81.94 Lakhs (including dividend tax) (Previous Year Rs. 81.94 Lakhs)
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
There is no amount required to be transferred to investor education and protection fundin accordance with the relevant provisions of the Companies Act 1956 and rules madethereunder.
The paid up Equity Share Capital as on 31st March 2016 was Rs.45388000/-. During the year under review the Company has not issued any shares.
Sub Division of Equity Shares
In accordance with the approval of the shareholders of the Company the equity share ofnominal value of Rs. 10/- each of the Company was sub divided into two equity shares ofnominal value of Rs. 5/- each on and from 17th October 2015; and the Memorandumand Articles of Association of the Company were altered pursuant to the sub-division ofthe equity shares of the Company.
The shareholders with equity shares of nominal value of Rs. 10/- each of the Company inelectronic form received direct credit of sub-divided equity shares of nominal value ofRs. 5/- each of the Company to their dematerialized account with the depository. TheCompany issued new share certificate for equity share of nominal value of Rs. 5/- each inplace of old share certificate for shareholders holding equity shares in physical form.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in AnnexureNo.1 and is attached to this Report.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Details of the composition of the Board and its Committees namely Audit CommitteeNomination and Remuneration Committee CSR Committee Stakeholders Relationship Committeeand of the Meetings held and attendance of the Directors at such Meetings are provided inthe Corporate Governance Report which forms a part of this Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going concern basis;
(e) the internal financial controls to be followed by the company were laid down andsuch internal financial controls were adequate and were operating effectively; and
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THECOMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CETNRAL GOVERNMENT.
There have been no frauds reported by the Auditors pursuant to Section 143(12) of theCompanies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS
All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under the provisions ofthe Companies Act 2013 and the relevant rules.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES
The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members. Thedetails of this policy are furnished in Annexure and forms part of this report and canalso be accessed on the Company's website at www.lambodharatextiles.com
The members at the 20th Annual General Meeting held on 11th September 2014had appointed M/s. Mohan & Venkataraman (Firm Registration No. 007321S) CharteredAccountants as statutory auditors of the Company for a period of three years subject toratification by the members annually.
M/s.Mohan & Venkataraman Chartered Accountants have confirmed their eligibilityunder section 141 of the Companies Act 2013 and the related rules to continue asstatutory auditor of the Company.
Necessary resolution for ratification of appointment of said auditor is included in thenotice of the Annual General Meeting for seeking approval of members.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying out audit of cost records.
The Board of Directors on the recommendation of Audit Committee has appointed M/s.C.S.Hanumantha Rao & Co. Cost Accountants (Firm Regn. No. 000216) as Cost Auditor toaudit the cost accounts of the Company for the financial year 2016-17. As required undersection 148(2) of the Companies Act 2013 a resolution seeking member's ratification forthe remuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed Mr. M.D.Selvaraj of MDS & Associates to undertake the Secretarial Auditof the Company for the year ended 31st March 2016. The Secretarial AuditReport is annexed as Annexure 3.
Regarding the observation made in the report for non appointment of Company Secretarythe Company is in the process of appointing a qualified Company Secretary.
The Auditors' Report for the financial year ended 31st March 2016 does notcontain any qualification reservation adverse remark or disclaimer.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
Particulars of the investments made by the Company as at 31st March 2016are given in the Notes forming part of the Financial Statements. During the Financial Yearunder review the Company made an investment of Rs. 2.21 lakhs in 6500 equity shares ofOPG Energy Private Limited and Rs. 6.00 Lakhs in 60000 equity shares of Mytrah Vayu(Manjira) Private Limited in order to enable the Company to purchase electricity from themunder group captive arrangement. The Company has not given any loans or guarantees orprovided any security to any person or other bodies corporate under section 186 of theCompanies Act 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Act and the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Form AOC-2 as required under Section 134 (3) (h) of theCompanies Act 2013 read with Rule 8 (2) of the Companies (Accounts) Rules 2014 isenclosed as Annexure -4.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and outgo as required under section 134 (3) (m) of the Companies Act2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is furnished in Annexureand is attached to this report.
RISK MANAGEMENT POLICY
The Company has a structured risk management policy. The Risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking. The Company has laid down procedures to inform the Audit Committee as well as theBoard of Directors about risk assessment and management procedures and status. Theseprocedures are periodically reviewed to ensure that the executive management monitors andcontrols risks.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the area of promoting education. Theseprojects are in accordance with Schedule VII of the Companies Act 2013 and the Company'sCSR policy. The Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as Annexure - 5 and forms an integral partof this Report. The CSR Policy may be accessed on the Company's website atwww.lambodharatextiles.com.
Detailed composition of the CSR Committee number of meetings held during the yearunder review and other related details are set out in the Corporate Governance Reportwhich forms a part of this Report.
The Company was required to spend Rs.10.61 Lakhs on CSR activities during the FinancialYear 2015-16 being 2% of the average net profits of the three immediately precedingfinancial years and the Company has spent Rs. 10.62 lakhs during the current financialyear.
ANNUAL PERFORMANCE EVALUATION
In accordance with the evaluation criteria and procedure suggested by The Nominationand Remuneration Committee the Board of Directors evaluated the performance of the Boardhaving regard to various criteria such as Board composition Board processes Boarddynamics etc. The Independent Directors at their separate meetings also evaluated theperformance of non-independent directors and the Board as a whole based on variouscriteria. The performance of each independent Director was evaluated by the entire boardof directors on various parameters like engagement leadership analysis decision makingcommunication governance etc. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory.
The performances of all the Committees were evaluated by the Board having regard tovarious criteria such as committee composition committee processes committee dynamicsdegree of fulfillment of key responsibilities effectiveness of meetings etc. The Boardwas of the unanimous view that all the committees were performing their functionssatisfactorily.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2016.
Pursuant to the provisions of section 152 of the Companies Act 2013 Mrs.VimalaRadhakrishnan (holding DIN00813706) is due to retire by rotation at the ensuing AnnualGeneral Meeting and being eligible offers herself for re-appointment.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or Associate Company.
The Company has not accepted any deposit within the meaning of Chapter V of theCompanies Act 2013 and the Rules framed there under and there is no outstanding fixeddeposit from the public as on 31st March 2016.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an adequate system of internal controls. It has documentedpolicies and procedures covering all financial and operating functions and processes.These have been designed to provide a reasonable assurance with regard to maintaining ofproper accounting controls for ensuring reliability of financial reporting monitoring ofoperations protecting assets from unauthorized use or losses and compliance withregulations.
INTERNAL FINANCIAL CONTROL
The company has a proper and adequate Internal Financial Control System to ensure thatall assets are safeguarded and protected against loss from unauthorized use or dispositionand transactions are authorized recorded and reported correctly.
Internal Financial Controls is exercised through documented policies guidelines andprocedures. It is supplemented by an extensive program of internal audit conducted by anexternal internal auditor appointed by the Board. The audit observation and correctiveaction if any taken theron are periodically reviewed by the Audit Committee to ensurethe effectiveness of the Internal Financial Control System.
PARTICULARS OF EMPLOYEES AND REMUNERATION
The requisite details relating to ratio of remuneration percentage increase inremuneration etc. as stipulated under Section 197(12) and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed as Annexure6 to this Report.
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not apply to the Company as there were no employeeswho are in receipt of remuneration in the aggregate at the rate of not less than Rs.6000000/- if employed throughout the year or Rs. 500000/- per month if employed forpart of the year
The Audit Committee of the Board of Directors of the Company comprises three Membersnamely Mr.Deepak Padamshi Malani Mr.Vastupal Rajinikant Mehta and Mr. M S Rajkumar allof them being Independent Directors. Mr. Mr.Deepak Padamshi Malani an IndependentDirector is the Chairperson of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
VIGIL MECHANISM/ WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Companys Code of Conduct or ethics policy. ThePolicy provides for adequate safeguards against victimization of employees who avail ofthe mechanism and also provides for direct access to the Chairman of the Audit Committee.It is affirmed that no personnel of the Company has been denied access to the AuditCommittee.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013.
The Company has in place a policy against Sexual Harassment at work place in line withrequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaint Committee has been setup to redress complaintsreceived regularly. There was no compliant received from any employee during the financialyear 2015-16 not any complaint remains outstanding for redressal as on 31stMarch 2016.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
LISTING OF SHARES
Equity shares of the Company was continued to be listed on National Stock Exchange ofIndia Limited (NSE)
During the Financial year 2015 - 2016 your Company has entered into new ListingAgreement with National Stock Exchange of India Limited in compliance with SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The Board of Directors express their appreciation for the contribution made by theemployees customers and bankers for the support extended by them during the year underreview.
| ||For and on behalf of the Board |
| ||Meenakshi Sundaram Rajkumar |
|Place : Coimbatore ||Chairman |
|Date : 27.05.2016 ||(DIN : 06935422) |