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Loyal Equipments Ltd.

BSE: 539227 Sector: Engineering
NSE: N.A. ISIN Code: INE876S01017
BSE LIVE 15:21 | 14 Dec 48.00 0.10
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NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 48.75
PREVIOUS CLOSE 47.90
VOLUME 24000
52-Week high 55.35
52-Week low 12.00
P/E 22.43
Mkt Cap.(Rs cr) 49
Buy Price 46.00
Buy Qty 3000.00
Sell Price 49.85
Sell Qty 3000.00
OPEN 48.75
CLOSE 47.90
VOLUME 24000
52-Week high 55.35
52-Week low 12.00
P/E 22.43
Mkt Cap.(Rs cr) 49
Buy Price 46.00
Buy Qty 3000.00
Sell Price 49.85
Sell Qty 3000.00

Loyal Equipments Ltd. (LOYALEQUIPMENTS) - Director Report

Company director report

To The Members

The directors submit Ninth annual report of Loyal Equipments Limited (the Company orLoyal ) along with the audited financial statements for the financial year (FY) endedMarch 31 2016.

1. FINANCIAL RESULTS:

The Company s financial performance for the year ended March 31 2016is summarized asbelow:

Amount in Rs.
Particulars Current Year 2015-16 Previous Year 2014-15
Revenue from operations 111308750/- 148568490/-
Other income (net) 1215510/- 152710/-
Total Income 112524260/- 148721200/-
Less:
Operating & Administrative expenses 90702250/- 109896600/-
Profit Before Depreciation Interest & Tax 21822010/- 38824600/-
Less:
Depreciation and amortization expense 10105230/- 10294840/-
Finance costs 3269330/- 3419360/-
Profit before exceptional item and tax 8447450/- 25110400/-
Exceptional item - -
Profit before tax (PBT) 8447450/- 25110400/-
Tax expense 3193370/- 8746320/-
Profit after tax for the year (PAT) 5254080/- 16364080/-
Balance brought forward from previous year 33630250/-
Amount available for appropriation 38884330/- 19860570/-
Appropriations
Proposed dividend on equity shares (excluding tax) 3400000/- 3000000/-
Tax on dividends 692160/- 509850/-
General reserve 14048990/- 3614810/-
Statutory reserve - -
Balance carried to balance sheet 27314770/- 33630250/-

2. OPERATION & REVIEW:

Revenue from the operations of your Company for the year was Rs. 111308750/- 25.08%lower than Rs. 148568490/- in the previous year. Profit before Depreciation Interest& Tax was Rs. 21822010/- against Rs. 38824600/- in the previous year. Profit afterTax for the year at Rs. 5254080/- was lower by 67.89% over Rs. 16364080/- in theprevious year. Detailed report on operations of and structure of Business of the Companyhas been included in Management Discussion and Analysis Report which forms part of thisAnnual Report.

3. RISK MANAGEMENT AND INTERNAL CONTROL

Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. The Company at regular intervalsmonitors the financial operational legal risk to the Company through procedures likeaudit inspections etc. There is no risk which in the opinion of the Board may threatenthe existence of the Company. The internal financial controls are adequate and aremonitored at regular intervals.

4. ISSUE OF EQUITY SHARES

The Company allotted 1800000 Equity shares of Rs. 10/- each at a premium of Rs. 8/-per share through Initial Public Offer (IPO) on SME Platform of BSE Limited on 14thJuly 2015. The Company got listed on BSE SME Platform with effective from July 16 2016.

5. USE OF PROCEEDS

The proceeds from the Issue of the Company vide prospectus dated 28th June 2016 havebeen utilized / are in process of utilization for the purpose for which they were raisedand there is no deviation in the utilization of proceeds.

6. DIVIDEND

Based on the Company s performance the directors are pleased to recommend for approvalof the members a final dividend of Rs. 0.50 per equity share (5% on the Equity Shares ofRs. 10/- each) on 6800000 Equity Shares of Rs 10/- each for the year ended2015-16. Thefinal dividend on equity shares if approved by the members would involve a cash outflowof Rs4092160/-including dividend tax.

7. TRANSFER TO RESERVES

The Company has transferred Rs. 14048990/- to the Capital Reserve during the year andtransferred Rs. 1877400/- for the Gratuity provision during the year.

8. MANAGEMENT AND DISCUSSION ANALYSIS REPORT:

A Separate report on Management Discussion and Analysis Report as required under clause34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 hasbeen presented in a separate section forming part of this Annual Report.

9. HUMAN RESOURCE DEVELOPMENT

During the year under review various employee centric policies were implemented by theCompany for improving employee skills and enhancing employee productivity. The relationswith the employees were cordially during the year under review.

10. QUALITY INITIATIVES:

The Company is committed to the highest level of quality and continuous improvementprogramme are organized at all the level. The manufacturing operation of the Company isISO 9001:2008 U-Stamp and U2- Stamp certified by the independent originations.

11. SUBSIDIARY COMPANIES:

The Company does not have any subsidiary companies hence Your Company is not requiredto present the consolidated financial statement as per the requirement of the provision ofSection 136 of the Companies Act 2013.

12. DIRECTORS RESPONSIBILITY STATEMENT

As required by Section 134 (5) of the Companies Act 2013 the Directors herebyconfirm:

(i) in the preparation of the annual financial statements applicable accountingstandards have been followed and there are no material departures from the said standards;

(ii) such accounting policies have been selected and applied consistently and judgmentsand estimates made that are reasonable and prudent so as to give a true and fair view ofthe state of affairs of the company as at March 31 2016 and of the profit of the companyfor the year ended on that date;

(iii) proper and sufficient care has been taken for maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for prevention and detection of fraud and other irregularities;

(iv) the annual financial statements have been prepared on a going concern basis;

(v) proper internal financial controls are in place and are adequate and are operatingeffectively; and

(vi) the systems to ensure compliance with the provisions of all applicable laws are inplace and are adequate and operating effectively.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of section 149 of the Companies Act 2013 Mr. BabubhaiPatel and Mr. Girish Desai were appointed as independent directors at the annual generalmeeting of the Company held on 11th June 2015. Mr. kalpesh Joshi wasappointment as an independent director of the Company at the Extra Ordinary GeneralMeeting held on 13th June 2015. They have submitted a declarationthat each ofthem meets the criteria of independence as provided in section 149(6) of the Act and therehas beenno change in the circumstances which may affect their status as independentdirector during the year.

Mr. RameshchandraNathalalPatel retires by rotation and being eligible has offeredhimself for reappointment.

Pursuant to the provisions of section 203 of the Act during the year under review theCompany has appointed Mr. AlkeshRameshchandra Patel as Managing Director Mr. Amit Patelas Chief Financial Officer and Ms. KomalMotiani as Company Secretary as the key managerialpersonnel of the Company. There has been no change in the key managerialpersonnel sincetheir appointment.

14. NUMBER OF MEETINGS OF THE BOARD

Seventeen meetings of the board were held during the year. For details of themeetingsof the board please refer to the corporate governance report which forms part of thisreport.

15. BOARD EVALUATION

The Board evaluated the effectiveness of its functioning and that of the Committees andof individual directors by seeking their inputs on various aspects of Board/CommitteeGovernance. The evaluation covered functioning and composition of the Board and itscommittees understanding of the roles and responsibilities experience competenciesparticipation at the Board and Committee meetings corporate governance practices etc.

Evaluation of the Board and its compositions was carried out through a defined processcovering the areas of the Boards functioning viz. composition of the Board and Committeesunderstanding of roles and responsibilities experience and competencies contribution atthe meetings etc.

16. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

Pursuant to the requirement of Section 134(3)(e) and Section 178(3) of the CompaniesAct 2013 the Board has on the recommendation of the Nomination and RemunerationCommittee framed a policy on appointment of Directors including criteria for determiningqualifications positive attributes independence of a Director and the policy onremuneration of Directors KMP and other senior management has been disclosed in thecorporate governance report which forms part of this report.

17. AUDIT COMMITTEE

During the year under review the Company constituted the Audit Committee and theprimary objective is to monitor and supervise the financial reporting to ensure accurateand timely disclosures transparency integrity and quality of financial reporting. As ofthe date of this report the audit committee is comprised of Mr.Babubhai Patel(Chairman)Mr.RameshchandraNathalal Patel (Member) and Mr.Kalpesh Joshi (Member).

18. AUDITORS

J. M. Patel & Bros. CharteredAccountants who are the statutory auditors oftheCompany hold office until the conclusion of the ensuingAGM and are eligible forre-appointment. Members of theCompany at the AGM held on 30th September 2014had approvedthe appointment of J. M. Patel & Bros. as the Statutory Auditors foraperiod of five years from the conclusion of the Annual General Meeting held on 30thSeptember 2014 till the conclusion of Annual General Meeting of the Company to be held incalendar year 2018.As required by the provisions of the Companies Act 2013theirappointment should be ratified by members each yearat the AGM. Accordingly requisiteresolution forms part ofthe notice convening the AGM.The auditors report does not containany qualifications reservations or adverseremarks.

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Amit K.Patel Company Secretary in practice to undertake the Secretarial Audit of the Company forthe year under review. The Board has duly reviewed the Secretarial Auditor s Report andthe comments appearing in the report are self-explanatory and do not call for any furtherexplanation by the Board of Directors as provided under section 134 of the Act. TheSecretarial Audit Report is annexed herewith as Annexure IV .

19. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS

The particulars of loans guarantees and investments have been disclosed in thefinancial statements.

20. TRANSACTIONS WITH RELATED PARTIES

Pursuant to the provisions of Section 134 (3) read with Section 188 (2) of theCompanies Act 2013 details of transaction for the year under review are given in FormAOC-2 as Annexure IIIto this report and in the section on Related Party Transactions inCorporate Governance Report.

21. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return inForm MGT 9 as perprovisions of Companies Act 2013 and rulesthereto is annexed to this report as AnnexureII .

22. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company will be provide upon request. In terms of Section 136 of the Actthe reports and accounts are being sent to the members and others entitled theretoexcluding the information on employees particulars which is available for inspection bymembers at the registered office of the Company during the business hours on all workingdays of the Company up to the date of ensuing Annual General Meeting of the Company. Ifany member is interested in inspection the same the member may write to the CompanySecretary in advance.

23. DEPOSITS FROM PUBLIC

Your Company has not accepted any Fixed Deposits as defined under Section 73 of theCompanies Act 2013 and rules framed thereunder.

24. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGOCONSERVATION OF ENERGY:

Details of the energy conservation technology absorption and foreign exchange earningsand outgo are annexed to this report as Annexure I .

25. ACKNOWLEDGEMENT

We thank our customers vendors dealers investors business associates and bankersfor their continued support during the year. We place on record our appreciation of thecontribution made by employees at all levels.

Date:2nd August 2016 On behalf of the board of directors
Place: Dahegam Gandhinagar AlkeshRameshchandra Patel RameshchandraNathalal Patel
Managing Director Chairman& Whole-time Director

ANNEXURE TO DIRECTORS REPORT

ANNEXURE I

DETAILS OF CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS& OUTGO:

A. CONSERVATION OF ENERGY

(i) The steps taken or impact on conservation of energy; The Company has adopted the system of shutting down the electrical machineries and appliances when not in use to avoid unnecessary waste of energy. New investment in machines is being considered with an idea to have reduction of consumption of energy. The impacts of measures taken are not precisely ascertainable.
(ii) The steps taken by the company for utilizing alternate sources of energy; NIL
(iii) The capital investment on energy conservation equipment; NIL

B. TECHNOLOGY ABSORPTION ADOPTION & INNOVATION:

(i) The efforts made towards technology absorption; The activities of the Company at present do not involve technology absorption and research and development
(ii) The benefits derived like product improvement cost reduction product development or import substitution; NIL
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)- (a) the details of technology imported; (b) the year of import; (c) whether the technology been fully absorbed; (d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; and NIL
(iv) The expenditure incurred on Research and Development. NIL

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

The Foreign Exchange earned in terms of actual inflows during the year: NIL
The Foreign Exchange outgo during the year in terms of actual outflows: Rs. 2423720/-

DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year Number of shareholders who approached listed entity for transfer of shares from suspense account during the year Number of shareholders to whom shares were transferred from suspense account during the year Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year
16000 Shares NIL NIL 16000 Shares

We hereby declare that the voting rights on shares in the suspense account shall remainfrozen till the rightful owner of such shares claims the shares.

Date:2nd August 2016 On behalf of the board of directors
Place: Dahegam Gandhinagar AlkeshRameshchandra Patel RameshchandraNathalal Patel
Managing Director Chairman& Whole-time Director

ANNEXURE III

FORM NO. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Companies Act 2013and Rule 8(2) of the Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts / arrangements entered into by thecompany with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain arm s length transactions under third provisothereto:

1. Details of contracts or arrangements or transactions not at arm s length basis:LoyalEquipments Limited has not entered into any contract/arrangement/transaction with itsrelated parties which are not in ordinary course of business or at arm s length during FY2015-16.

i. Name(s) of the related party and nature of relationship: Not Applicable ii. Natureof contracts/arrangements/transactions: Not Applicable iii. Duration of the contracts /arrangements/transactions: Not Applicable iv. Salient terms of the contracts orarrangements or transactions including the value if any: Not

Applicable v. Justification for entering into such contracts or arrangements ortransactions: Not Applicable vi. Date(s) of approval by the Board: Not Applicable vii.Amount paid as advances if any: Not Applicable viii. Date on which the special resolutionwas passed in general meeting as required under first proviso tosection 188: NotApplicable

2. Details of material contracts or arrangement or transactions at arm s length basis:

Name of Related Party Nature of Relationship Duration of Contract Salient Terms Amount (Rs)
Loyal Engineers Proprietorship of Director /Promoter Rent Agreement effective from 1st January 2009 and subsequent modification thereof Lease agreements effective from 1st January 2016. Rent Agreement 2400000

 

Date:2nd August 2016 On behalf of the board of directors
Place: Dahegam Gandhinagar Alkesh Rameshchandra Patel Rameshchandra Nathalal Patel
Managing Director Chairman& Whole-time Director

ANNEXURE - IV

FORM NO. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED ON 31ST MARCH 2016

[Pursuant to section 204(1) of the Companies Act 2013 and rule No.9 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]

To

The Members

LOYAL EQUIPMENTS LIMITED

Block No. 35/1-2-3-4 Village Zak Dahegam Ganshinagar 382 330

We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Loyal Equipments Limited(hereinafter called the Company ). Secretarial Audit was conducted in a manner thatprovided us a reasonable basis for evaluating the corporate conducts/statutory compliancesand expressing my opinion thereon.

Based on our verification of the Company s books papers minute books forms andreturns filed and other records maintained by the Company the information provided by theCompany its officers agents and authorized representatives during the conduct ofsecretarial auditthe explanations and clarifications given to us and therepresentationsmade by the Managementwe hereby report that in our opinion the Company has during theaudit period covering the financial year ended on 31st March 2016 generallycomplied with the statutory provisions listed hereunder and also that the Company hasproper Board-processes and compliance mechanism in place to the extent in the manner andsubject to the reporting made hereinafter:

We have examined the books papers minute books forms and returns filed and otherrecords made available to us and maintained by the Company as per Annexure A for theFinancial Year ended on 31st March 2016 according to the provisions of:

(i) The Companies Act 2013 (the Act) and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 ( SCRA ) and the rules madethereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ( SEBI Act ):-

i. The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers)

Regulations 2011;

ii. The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 and Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015;

iii. The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements)

Regulations 2009;

iv. The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee

Stock Purchase Scheme) Guidelines 1999; [The Securities and Exchange Board of India(Share based Employee Benefits) Regulations 2014; (Not applicable to the Company duringthe period) v. The Securities and Exchange Board of India (Issue and Listing of DebtSecurities) Regulations

2008;(Not applicable to the Company during the period)

vi. The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents)

Regulations 1993 regarding the Companies Act and dealing with client;(Not applicableto the Company during the period)

vii. The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009;(Not applicable to the Company during the period) and

viii. The Securities and Exchange Board of India (Buyback of Securities) Regulations1998;(Not applicable to the Company during the period)

(vi) We further report that having regard to the compliance system prevailing in thecompany and on examination of relevant documents and records in pursuance thereof on testcheck basis the company has generally complied with other laws identified by themanagement as applicable specifically to the company broadly covering Laws relating toengineering Industries.

However it has been found that there were no instances requiring compliance with theprovisions of the laws indicated at point (d) to (h) of para (v) mentioned hereinaboveduring the period under review.

We have also examined compliance with the applicable clauses of the following:

i. Secretarial Standards issued by The Institute of Company Secretaries of India.

ii. The Listing Agreements entered into by the Company with the BSE Ltd. read with theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015.

However it was noted that compliance of secretarial standards issued by ICSI were notmandatory as none of the standards were notified during the period under review.

During the period under review the Company has generally complied with the provisionsof the Act Rules Regulations Guidelines Standards mentioned hereinabove and areadequate systems and processes in the Company that commensurate with thesize andoperations of the Company tomonitor and ensure compliance with applicable laws rulesregulationsand guidelines. We have relied on the representations made by the Company andits officers for systems and mechanisms formed by the Company for compliances under thelaws and regulations applicable to the Company as referred hereinabove and verification ofdocuments and records on test check basis.

We further report that the compliance by the company of the direct and indirect taxlaws has not been reviewed during this audit as the same had been subject to review by thestatutory financial audit and other designated professionals.

We further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Decisions at the Board Meetings were taken unanimously.

I further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

ANNEXURE - A

List of documents verified

1. Memorandum & Articles of Association of the Company.

2. Minutes of the meetings of the Board of Directors Audit Committee Nomination &Remuneration Committee Stakeholders Relationship Committee held during the period underreport.

3. Minutes of General Body Meetings held during the period under report.

4. Statutory Registers/Records under the Companies Act and rules made there under viz.

- Register of Directors & KMP

- Register of Directors Shareholding

- Register of loans guarantees and security and acquisition made by the Company

- Register of Members

- Periodical BENPOS Registers of Demat/Remat and records made available from RTA

5. Agenda papers relating to the Board Meetings and Committee Meetings.

6. Declarations received from the Directors of the Company pursuant to the provisionsof Section 299 of the Companies Act 1956 and 184 of the Companies Act 2013.

7. e-Forms filed by the Company from time-to-time under applicable provisions of theCompanies Act 1956 and Companies Act 2013 and attachments thereof during the periodunder report.

8. Intimations/ documents/ reports/ returns filed with the Stock Exchanges pursuant tothe provisions of Listing Agreement during the period under report.

9. Communications/ Letters issued to and acknowledgements received from the Independentdirectors for their appointment

10. Various policies framed by the company from time to time as required under theCompanies Act as well as listing agreement/SEBI Regulations.

ANNEXURE - B

To

The Members

LOYAL EQUIPMENTS LIMITED

Block No. 35/1-2-3-4 Village Zak Dahegam Gandhinagar 382 330

Sir

Sub: Secretarial Audit Report for the Financial Year ended on 31st March2016

Our report of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of thecompany. Our responsibility is to express an opinion on these secretarial records based onour audit.

2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the company.

4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. Our examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability ofthe company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the company.

Name of Company Secretary:Amit Patel
Place: Ahmedabad Company Secretary
Date: 2nd August 2016 FCS No. 8291 CP. No. 15068