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Laxmi Cotspin Ltd.

BSE: 538411 Sector: Industrials
NSE: LAXMICOT ISIN Code: INE801V01019
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Laxmi Cotspin Ltd. (LAXMICOT) - Director Report

Company director report

The Directors have a pleasure in presenting the Twelth Annual Report and AuditedAccounts for the financial year ended 31sf March 2017.

1. Financials Summery (Standalone)

Particulars . 2016-17 2015-16
Sales and Other Income 11484.61 11356.63
Profit Before Tax and Depreciation 951.40 967.43
Less: Depreciation and amortization 572.33 690.29
Profit/tLoss) Before Taxation ( PBT ) 379.07 277.14
Provision for Taxation
Less:- Current Tax (MAT) 97.42 56.50
Less:- Deferred Tax & Shortage/Excess Provision 13.64 -92.62
Profit/(Loss) After Tax ( PAT ) 268.00 313.26
Add/(Less): Prior Period Adjustment (Income Tax)
Add/(Less): Exceptional items
Balance Transfer to the Balance Sheet 268.00 313.26
Basic Earning Per Equity Share 1.56 1.83
Diluted Earning Per Equity Share ' . 1.56 1.83

During the year under review our company has achieved sales Turnover of Rs. 114.84cores as against Rs. 113.57 cores achieved in the previous year The profit after taxearned by the Company is Rs. 2.68 Cores as Compared to the Profit earned in the previousyear of Rs. 3.13 Crores .

2. Listing of Equity Shares on NSE (SME) Platform

Your Directors are pleased to inform that the company has got listed with NationalStock Exchange on the SME Segment on 31.03.2017. We came up with Offer for sale of4800000 lacks equity shares of Rs 10 Each for cash at price Rs 20. The issue openingDate was March 17 2017 and the issue closing date was March 22 2017. The issue whswelcomed by the public and oversubscribed by 6 times.

3. Change in the nature of Business If any.

There has not been any change in the nature of business of the company

4. Share Capital

The Equity Shares offered through Offer for Sale on the SME Platform of NSE. Hencethere is no change in Share Capital of the company after post issue.

5. Dividend '

Yours' directors have pleasure to inform to the members that the Board has decided torecommend dividend @5% to equity shareholders of the company subject to approval ‘ byshareholders of the company.

6. Transfer to Reserve

Company has proposed to transfer a sum of Rs 27634967 to Reserve and Surplus for thefinancial year ended 31st March 2017

7. Change of Name

The company has not changed its name during financial year 2016-17

8. Details of Directors or Key Managerial Personnel who were appointed or have resignedduring the year:

During the year Mrs. Prafullata Rathi was appointed as Additional Director of theCompany on 01s' March 2017 and The Board has appointed Mr. Bhavesh Patel as aDirector in place of Mr. Rameshbhai Patel as on 13.06.2016 Mr. Singanallur Natarajari andMr. Sunil Raithatha Independent Directors have resigned on 15th July 2016 andBoard has appointed Mr. Ritesh Mantri and Mr. Satish Bhakkad as Independent Directors 01stFebruary 2017 on the Board of Directors of the company. On 03.07.2016 Board Re-DesignateMr. Sanjay Rathi as a Chairman of The Company Mr. Sanjay Rathi has submitted hisresignation from Post of chairmanship and Mr. Rajesh Ban sal Non - Executive Director isappointed as a chairman of the company as on 01.03.2017

Mrs. Prafullata Rathi having DIN: 03056379 was appointed on 01st March 2017as Additional Director of the Company.' The Board of Directors of the Company has decidedto appoint her as a regular Director

9. Particulate of Employees •

As required no employee of the company was in receipt of remuneration exceeding thelimit prescribe under rule 5 (2) of the companies (Appointment and Remuneration ofmanagerial Personnel) Rules 2014 '

10. Meetings of Board of Director and Shareholders.

Twenty Six Board Meetings and two shareholders meeting were held during the Year2016-17 and Four Audit Committee Meetings and Two Nomination and Remuneration CommitteeMeetings and Two Stakeholders' Relationship Committee Meetings (As Committee wasconstituted on 06th February 2017); and the intervening gap between meetingswas within the period prescribed under Secretarial Standards applicable to the company.

11. Board Evaluation

Pursuant to the provision of the companies Act 2013 Listing regulation along withother rules and regulation applicable if any the company has carried out the annualperformance evaluation of its own performance the director individually as well as theevaluation of the working of its committees A structured questionnaire was prepared aftertaking into consideration inputs received from the Directors covering various aspect ofthe board functioning such as adequacy of the composition of the board and its committeesboard culture execution and performance of specific duties-obligation ‘ andgovernance.

A separate exercise was carried out to evaluate the performance of the individualdirector including the Chairman of the Board who were evaluated on parameter such aslevel of engagement and contribution independence of judgment Safeguarding interest ofthe company and its minority shareholders etc. The performance evolution of IndependentDirector was carried out by entire board. The performance evolution of the chairman andnon Independent Director was carried out by the Independent

Director who also reviewed the performance of the secretarial Department. The Directorexpresses their satisfaction with the evaluation process.

12. Company Policy on Director's Appointment and remuneration

The policy of the company on Director's appointment and remuneration including criteriafor determining qualification positive attributes independence of Director and othermatters provided under Sub - section (3) 178 is explained in the corporate governancereport.

13. Disclosure Of Composition Of Audit Committee And Providing Vigil Mechanism:

The Audit Committee consists of the following members

Names Designation
Mr. Satish Swaroopnarayan Bhakkad . Chairman
Mr. Ritesh Mantri Member
Mr. Bhavesh Patel Member

The above composition of the Audit Committee consists of independent Directors.Pursuant to the provisions of Section 177 (9) & (10) of the Companies Act 2013 readwith Rule 7 of Companies (Meetings of Board and its Powers) Rules 2014'and SEBI (LODR)Regulations 2015 the Company has in place a Whistle Blower Policy which provides for avigil mechanism that encourages and supports its Directors and employees to reportinstances of illegal activities unethical behavior actual or suspected fraud orviolation of the Company's Code of Conduct or Ethics Policy. It also provides for adequatesafeguards against victimization of persons who use this mechanism and direct access tothe Chairman of the Audit Committee in exceptional cases.

14. Declaration by an Independent directors)

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of interdependence as prescribed both undersub-section 149 of the Companies Act 2013 and under Clause 52 of the Model SME ListingAgreement with the Stock Exchanges and same is Annexure "E" herewith •

15. Extracts of Annual Return in Form MGT-9 U/s 92 (3) of Companies Act 2013

Enclosed herewith Extracts of Annual Return in Form MGT-9as per Annexure "C"

16. Deposits:

The company has neither accepted any deposit from the public nor from its members.

15. Particulars of Loans Guarantees and Investments:

The company has not given any loans or provided guarantees or made investments to thirdparties in which directors are interested as specified in section 185 of the CompaniesAct 2013 during the year under review.

16. Reply to Adverse Remark Made by Statutory Auditor :

There are no adverse remarks made by the Auditor of the company

17. Internal Control Systems and Their Adequacy:

The Company has adequate Internal Control System commensurate with the size scale andcomplexity of its operations. The Internal Audit Department monitors and evaluates theefficacy and adequacy of internal control system in the Company its compliance' withoperating systems accounting procedures and policies at all locations of the Company.Based on the report of internal audit function process owners undertake corrective actionin their respective areas and thereby strengthen the controls.

18. Related Party Transactions:

All related party transactions were entered into during the financial year was at arm'slength basis and in the Regular course of the business. Details of Transactions isenclosed herewith in Form AOC-2 as per Annexure "B"

19. Holding Subsidiary and Associate Relationship :

The Company does not have any subsidiary or associate company and Company is notassociate or subsidiary of any other Company.

20. Risk Management Policy

The Management deals with timely identification assessment and proper handling ofvarious risks in the areas of Manufacturing Marketing in particular And Infrastructureand Govt. Policies in General. The Managements is taking corrective steps from time totime.

21. Statutory Auditors Auditor Reports

M/s C N A & Associates Chartered Accountants Aurangabad Statutory Auditors ofthe Company hold office till the conclusion of the ensuing Annual General Meeting and iseligible for re-appointment.

The Company has received letters from them to the effect that their re-appointment ifmade would be within the prescribed limits under Section 141 (3)(g) of the Companies Act2013 and rules made there under and that they are not disqualified for reappointment. TheBoard has decided to recommend their appointment subject to approval by shareholders forthe year 2017-18. Auditor's report is attached herewith

22. Secretarial Audit report

In terms of Section 204 of the Act and rules made there under A. R Joshi andAssociates Practicing Company Secretary has been appointed secretarial Auditor of thecompany. The reports of secretarial auditor is enclosed as Annexure "F" to thisreport.

23. Appointment of Cost Auditor :

The board has appointed M/s CheenaSs Associates Practicing Cost Accountant forConducting cost audit for a period 2017-18

24. RETIREMENT BY ROTATION:

Mr. Rajesh Bansal Director of the Company retires under Section 152 of the CompaniesAct 2013 at the ensuing Annual General Meeting and being eligible offers himself forre-appointment.

25. Expansion of Plant Capacities:

Yours directors have pleasure to inform you that our company has successfully set-upthe open .end spinning unit. This has resulted in increase of daily production of yam by9000 Kgs of open end yarn. The said project has- been financed by Shamrao VittalCo-operative Bank Ltd Aurangabad. The set-up of open end unit which resulted intoin-house use of comber waste generated during spinning process leading to maximumutilization of. the comber waste generated. .

The Company manufactures quality pesticide free and organic cotton bales Since last3-4 years and has started BCI (BETTER COTTON INITIATIVE) a farm project of cotton fundedby WWF and IKEA which was implemented by KVK. Considering the good market potential of BCIbales the company has started exports of BCI. These cotton bales and cotton yarn producedis tested in modern quality lab with machines like premier HFT 9000.

Company plan to purchase 6 TFO machine and 4 knitting machine by December end whichproduce a new variety of yarn with superior Quality which help to increase turnover ofthe company.

26. Recognition to company as a Export House:

The directors have pleasure to inform you that our company LAXMI COTSPIN LIMITED hasbeen recently recognized as a Export House by Ministry of Commerce Government of India.

27. CERTIFICATION

ISO 9001:2008 Certified Company.

Ginning 8s Spinning unit certified by control union for Organic processing andtrading.-

• Ginning & Pressing unit 4 Star rating certified by Textiles Committee.

• Organic Cotton Production Certified by NOCA.

• Recognized as a Export House by Ministry of Commerce'Government India

• Mega Project status by Government of Maharashtra.

• Recognized as BCI Membership (BETTER COTTON INITIATIVE) by BCI Council

28. MEMBERSHIP : .

1 Membership of Cotton Association of India

2 Membership of Texprocil of India '

29. Corporate Social Responsibility

The board of Directors of the company confirms that the provision of section 135(1) ofthe company act 2013 is not applicable to your company during the year under review. *

30. Conservation of Energy

a) The Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.

b) A comparative Statement showing consumption of Electricity per kg of yam 'manufactured during the current and previous year is appended here with as Annexure"A"

31. Foreign Exchange Used and Earningsf IN INRI
Foreign exchange used : Rs. 80031120/-
Foreign exchange earned : Rs. 61211538/-

32. Disclosure Under Sexual Harassment Of Women At Workplace (Prevention. ProhibitionAnd Redressall Act. 2013

During the year under review there were no cases filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013

33. Management Discussion and Analysis

The Management Discussion and Analysis forms part of this Annual report is annexed withAnnexure "H"

34. Significant And Material Orders Passed By The Regulators Or Courts Or TribunalsImpacting The Going Concern Status And Company's Operations In Future

No significant or material orders were passed by the any Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.

35. Enhancing shareholders value: .

Your Company believes that its Members are among its most important stakeholders.Accordingly your Company's operations are committed to the pursuit of achieving highlevels of operating performance and cost competitiveness consolidating and building orgrowth enhancing the productive asset and resource base and nurturing overall corporatereputation. Your Company is also committed to creating value for its other stakeholders byensuring that its corporate actions Positively impact the socio- ' economic andenvironmental dimensions and contribute to sustainable growth and development.

36. Material Changes:

There is no material changes affecting the financial position of the company occurredbetween the 'end of the Financial Year to which this report relates and the date of thereport.

37. Our Vision:

To achieve excellence in all sectors of the textile from fiber to finished productcontinually striving to be the fore front of industry and generate highest possible valuefor all stake holders.

38. Our Mission: .

To be world class manufacturer of international quality cotton lint cotton yamfabrics & garments both organic 85 non-organic with highest level of competitivenesson all the parameters. .

39. Directors' Responsibility Statement as Per Section 134(51

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

(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 and loss 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 for financial year ended on March31 2017 on a going concern; .

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; 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 .

40. Other Details

The company has adopted number of codes and policies to comply with the provision ' ofvarious applicable rules regulation and acts.

1. Policy on Related Party Transactions.

2. Policy For Determination Of Materiality Of Events An Information

3. Code Of Internal Procedures And Conduct For Regulating Monitoring And Reporting OfTrading By Insider

4. Policy on Vigil Mechanism

41. Corporate governance certificate

The Compliance certificate from Auditor or Practicing company secretaries regardingcompliance on conditions of corporate governance as stipulated in clause 52 of SME Listingagreement shall be annexed with the report as Annexure - "G" .

42. Acknowledgement

The Directors would like to express their appreciation for the co-operation from HDFCBank Ltd. Shamrao vital Co-operative Bank Ah ran gab ad and your directors also wish toappreciate the co-operation of Director of Industries and the entire staff for extendingco-operation. Your directors also wish to place on record their deep sense of •appreciation for the committed services by executive staff and workers of the Company.

For and On behalf of the Board of Directors .

LAXMI COTSPIN LIMITED
Mr. Sanjay K. Rathi Mr. Shivratan S. Mundada
Place: Jalna Managing Director Director
Date: 26/05/2017 DIN:00182739 DIN: 00349668