To The Members of
Lux Industries Limited
Your Directors are pleased to present the 21st Annual Report and the Audited Statementof Accounts for the financial year ended March 31 2016.
1. Financial Results
| || ||Rs. |
|Particulars ||For the year ended March 31 2016 ||For the year ended March 31 2015 |
|Gross Income ||94116.33 ||90913.50 |
|Profit before Interest Depreciation and Tax ||9476.37 ||8141.88 |
|Less: Depreciation ||411.89 ||(421.70) |
|Less: Finance Cost ||1196.50 ||1764.34 |
|Profit ||7867.98 ||6799.24 |
|Tax Expense || || |
|(a) Current Tax ||2769.00 ||2035.00 |
|(b) Deferred Tax ||(25.79) ||241.33 |
|(c) Income Taxes for earlier year ||(9.29) ||- |
|Profit after ||5134.06 ||4522.91 |
|Add: Surplus brought forward ||10732.15 ||6973.14 |
|Balance available for appropriation ||15866.21 ||11496.05 |
|Appropriations: || || |
|Transfer to General Reserve ||100.00 ||400.00 |
|Dividend on equity shares ||353.54 ||303.04 |
|Dividend on preference shares ||14.00 ||0.23 |
|Dividend tax on equity dividend ||71.97 ||60.58 |
|Dividend tax on preference dividend ||2.85 ||0.05 |
|Balance carried forward ||15323.85 ||10732.15 |
|Total ||15886.22 ||11496.05 |
2. Results of Operations
Your company delivered another year of steady performance in the backdrop of continuingsluggishness in the macro-economic environment. During the year under review the Companyachieved a gross income of Rs. 94116.33 lacs as against Rs. 90913.50 lacs in theprevious year. Profit before Tax isRs. 7867.98 lacs as against Rs. 6799.24 lacs asagainst the previous year. The Net Profit after tax is Rs. 5134.06 lacs as against Rs.4522.91 lacs for the previous year. The earning per share is Rs. 101.65 against Rs. 89.55in the previous year.
The innerwear industry is expected to grow at 8% to 10% during 2016-17. The yarn pricesare expected to remain steady. The topline of the company is also expected to grow at 10%.The company expects to achieve better efficiency with its Dankuni Plant commencingoperations having an area of six lakh square feet. The company has its other manufacturingcapacities at B.T.Road Dhulagarh Agarpara Ludhiana and Tirupur. The company has itssales offices almost all over the country.
The Board of Directors at the meeting held on March 12 2016 declared an interimdividend @ 60% (Rs. 6/-) per Equity Share. The Board is pleased to recommend a finaldividend @ 10% (Rs. 1/-) per Equity Share. This will make the total dividend forthe year @ 70% (Rs. 7/-) per share (previous year Rs. 6.00 per Equity Share) on 5050600equity shares of Rs.10 each. The Board also recommends to pay dividend @ 0.25% on5600000 preference shares of Rs. 100 each. Payment of final dividend is subject to theapproval of the shareholders in the ensuing Annual General Meeting.
4. Material Changes and Commitments
No material changes and commitments have occurred from the date of close of thefinancial year till the date of this Report which affect the financial position of thecompany.
5. Share Capital
During the year under review there was no change in share capital of the company.
6. Transfer to Reserves
The Company propose to transfer a sum of Rs. 100.00 lacs to the General Reserve out ofprofits earned by the Company.
7. Fixed Deposits
The Company has not accepted any deposits from the public in terms of Section 73 of theCompanies Act 2013 and rules made there under during the year under review.
8. Particulars of loans guarantees or Investments
Particulars of loans given during the year are as follows. Further the Company has notgiven any guarantees covered under the provision of section 186 of the Companies Act2013.
| || || ||(Rs. in lacs) |
|Name ||Rate of Interest ||Max amount of Outstanding ||Purpose |
|Frontiers Warehousing Pvt.Ltd. ||15% ||100 ||Loan |
|Jalan & Sons ||12% ||25 ||Loan |
|West Bengal Hosiery Park Infrastructure Limited ||9% ||1800 ||Loan |
The details of investments made by Company are given under the notes to the financialstatements
9. Internal Control System and their adequacy
The Company has adequate internal control procedures commensurate with its size and thenature of its business for the purchase of inventories fixed assets and with regard tothe sale of goods and services. Details in respect of adequacy of internal financialcontrols with reference to the Financial Statements are stated in Management Discussionand Analysis which forms part of this Report.
10. Corporate Social Responsibility Initiatives
Pursuant to Section 135 of the Companies Act 2013 read with rules made there underyour directors have constituted a Corporate Social Responsibility Committee. As part ofits initiatives under Corporate Social Responsibility (CSR) the company hascontributed funds for the schemes of eradicating hunger and poverty promotion ofeducation and medical aid. The contributions in this regard have been made to theregistered trusts and / or section 8 companies which are undertaking such schemes. The CSRPolicy may be accessed on the Companys website at the link: http://www.luxinnerwear.com/investor_download_pdf2/20151221073219.pdf.
The Annual Report on CSR activities is annexed herewith as Annexure B
11. Management Discussion and Analysis Report
Pursuant to Regulation 34(2)(e) of SEBI (Listing Obligations And DisclosuresRequirements) Regulations 2015 Management Discussion and Analysis Report is annexed as AnnexureC forming part of this Report.
12. Corporate Governance
Your Company is committed to maintain good Corporate Governance practices. Pursuant toRegulation 34(3) read with Part C of Schedule V of SEBI (Listing Obligations AndDisclosures Requirements) Regulations 2015 a separate Section on Corporate Governancetogether with a certificate from the Companys Auditor confirming compliance is setout in Annexure D and Annexure F forming part ofthis report. Further a declaration on the Code of Conduct is given in AnnexureE.
13. CEO and CFO Certification
As required under Part E of Schedule V of SEBI (Listing Obligations and DisclosuresRequirements) Regulations 2015 the CEO/CFO certification on the accounts of the Companyas given by Sri Ashok Kumar Todi Whole Time Director and Sri Ajay Kumar Patodia ChiefFinancial Officer is set out in Annexure E forming part of this report.
14. Directors & Key Managerial Personnel
Details of Directors or Key Managerial Personnel (KMP) appointed or resigned during theyear are as below:
|Sl. No. ||Directors / Key Managerial Personnel ||Date of Appointment/ Resignation |
|1. ||Mr. Vinod Agrawal Company Secretary ||Resigned on 01.06.2015 |
|2. ||Mr. Pankaj Kumar Kedia Company Secretary ||Appointed on 01.06.2015 |
Nomination and Remuneration Committee of the Board has recommended the said appointmentto the Board of Directors The Board has placed on record their deep appreciation for thevaluable contribution made by Mr. Agarwal during the tenure of his service with thecompany.
Mr. Pradip Kumar Todi Managing Director retire by rotation and being eligible offershimself for re-appointment. The Directors recommend his re-appointment. Brief resume /details of Mr Pradip Kumar Todi is furnished in the annexure to the notice of the ensuingAnnual General Meeting as required under the code of corporate governance.
All independent directors have given declarations under Section 149(7) declaring thatthey meet the criteria of independence as laid down under Section 149(6) of the CompaniesAct 2013.
Annual Board Evaluation and Familiarisation Program
At the time of appointing a Director a formal letter of appointment is given to him /her which inter alia explains the role function duties and responsibilities expectedof him/her as a Director of the Company. The Director is also explained in detail thevarious compliances required from him/her as a director under various provision of theCompanies Act 2013 and such other rules and regulations.
The Directors are also updated about the financials of the company and new productlaunches. They are also provided booklets about the business and operations of thecompany. They are updated on the changes in relevant corporate laws relating to theirroles and responsibilities as Directors from time to time.
The details of such familiarisation programs for Independent Directors may be accessedon the companys website http://www.luxinnerwear.com/investor_download_pdf2/20160504012019.pdf
Pursuant to the provisions of Section 178 of the Companies Act 2013 and Regulation 1719 & 20 of SEBI (Listing Obligations And Disclosures Requirements) Regulations 2015the Board has carried out an evaluation of its own performance the directors individuallyas well as the evaluation of the working of its Audit and Nomination & RemunerationCommittees. The manner in which the evaluation has been carried out has been explained inNomination & Remuneration Policy in the Corporate Governance Report. Further theIndependent Directors of the Company met once during the year on February 12 2016 toreview the performance of the Non-executive directors Chairman of the Company andperformance of the Board as a whole. Detail of separate meeting of Independent Directorsare given in the Corporate Governance Report.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report. Andalso has been posted on the Companys website http://www.luxinnerwear.com/investor_download_pdf2/20151221071320.pdf
Minimum four meetings which are scheduled in advance are held annually. A calendar ofMeetings is prepared and circulated in advance to all the Directors. Any additionalmeeting is convened by giving appropriate notice in order to meet the requirements.
During the year five Board Meetings and four Audit Committee Meetings were convened andheld. Details are given in the Corporate Governance Report. The intervening gap betweenthe Meetings was within the period prescribed under the Companies Act 2013 and such otherrules and regulations.
15. Director's Responsibility Statement
Pursuant to the requirement under Section 134 clause (C) of sub Section (3) of theCompanies Act 2013 the directors confirm:
a. that in the preparation of the annual accounts for the year ended March 31 2016the applicable accounting standards have been followed along with proper explanationrelating to material departure if any;
b. that such accounting policies as mentioned in the notes to annual accounts have beenselected and applied consistently and judgments and estimates have been made that werereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany as at March 31 2016and profit of the Company for the the year ended on that date;
c. that proper and sufficient care have been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d. that the annual accounts of the Company have been prepared on a goingconcern basis.
e. that proper internal financial controls are in place and that the financialeffectively.
f. that proper systems to ensure compliance with the provisions of all applicable lawsare in place and that such systems were adequate and operating effectively.
16. Related Party Transactions
All related party transactions that were entered into during the financial year were onarms length basis and were in the ordinary course of the business. There are nomaterially company significant with the Promoters Key Managerial Personnel or otherdesignated persons which may have potential conflict with interest of the company atlarge. All the related party transactions are reviewed by the Audit Committee. A policy onrelated party transactions and dealing with related parties as approved by the Board hasbeen posted on the companys website http://www.luxinnerwear.com/investor_download_pdf2/20151221073348.pdf
17. Subsidiary Companies and Joint Ventures
The Company does not have any subsidiary. There were no joint ventures entered into bythe company.
18. Vigil Mechanism
The Company has a vigil mechanism contained in the Whistle Blower Policy in terms ofsection 177 of the Companies Act 2013 to deal with instances of fraud and mismanagementif any. The purpose of this policy is to provide a framework to promote responsible andsecure whistle blowing. It protects employees wishing to raise a concern about seriousirregularities within the Company. A quarterly report with number of complaints if anyreceived under the Policy and their outcome are placed before the Audit Committee and theBoard. The policy on vigil mechanism may be accessed on the companys website http://www.luxinnerwear.com/investor_download_pdf2/20151221073425.pdf
19. Auditors Report / Secretarial Audit Report
The observation made in the Auditors Report read together with relevant notesthereon are self explanatory and hence do not call for any further comments under Section134 of the Companies Act 2013.
As required under section 204 (1) of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the company hasappointed Ms. Smita Mishra a Practising Company Secretary to undertake the SecretarialAudit of the Company. The Secretarial Audit report is annexed herewith as AnnexureG.
M/s Sanjay Modi & Co. Chartered Accountants Statutory Auditors of the Companyhold office until the the ensuing Annual General Meeting and are eligible forreappointment. The Members are requested to consider their appointment as the StatutoryAuditors of the Company from the conclusion of this Annual General Meeting until theconclusion of the Twenty Second (22nd) Annual General Meeting of the Company on suchremunerations as approved by the members.
The Company has received a certificate from the proposed Auditors to the effect thattheir appointment if made would be in accordance with all the conditions prescribedunder the Companies Act 2013 and the Companies (Audit and Auditors) Rules 2014.
21. Extract of Annual Return
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as Annexure H.
22. Business Risk Management
The Board of the company realizes that risk evaluation and risk mitigation is itsimportant responsibility. Pursuant to section 134 (3) (n) of the Companies Act 2013 &Regulation 21 of SEBI (Listing Obligations and Disclosures Requirements) Regulations2015 the company has constituted a risk management committee. The details of thecommittee and its terms of reference are set out in the corporate governance reportforming part of the Boards report. Identifying critical risks and their mitigation invarious departments of the company is an ongoing process. The company has notidentifiedany material element of risk which may threaten the existence of the company.
23. Industrial Relation
During the year under review the industrial relations remained cordial and stable. Thedirectors wish to place on record their appreciation for the excellent cooperationreceived from the employees at all levels.
24. Particulars of Employees
The ratio of remuneration of each director to the median of employees remuneration asrequired under Section 197 (12) of the Companies Act 2013 read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexedherewith as Annexure I(i).
A statement containing the names of every employee as required under section 197(12) ofthe Companies Act 2013 read with the rule 5(2) and 5(3) of the Companies (Appointment andRemuneration Personnel) Rules 2014 is annexed herewith as Annexure I(ii).
25. Prevention of Sexual Harassment at workplace
Your company is committed to provide a work environment which ensures that everyemployee is treated with dignity respect and equality. There is zero tolerance towardssexual harassment. Any act of sexual harassment invites serious disciplinary action. Thecompany has established policy against Sexual Harassment for its employee. The policyallows any employee to freely report any such act and prompt action will be taken thereon.There were no such incidence during the period under review.
26. Conservation of Energy Technology Absorption and Foreign Exchange Earning andOutgo
The particulars relating to conservation of energy technology absorption and foreignexchange earnings and outgo required to be disclosed under Section 134(3) (m) of theCompanies Act 2013 are annexed here to and forms part of this report.
Your Board wishes to place on record its sincere appreciation for the continuedassistance and support extended to the company by its customers vendors investorsbusiness associates banks government authorities employees and other stakeholders.
| ||For and on behalf of the Board of Directors |
| ||Ashok Kumar Todi |
|Kolkata ||Chairman |
|May 25 2016 ||DIN 00053599 |
ANNEXURE A to Boards Report
INFORMATION UNDER SECTION 134 (3) (m) OF THE COMPANIES ACT 2013 READ WITH RULE 8 (3)OF THE COMPANIES (ACCOUNTS) RULES 2014 AND FORMING PART OF DIRECTORS REPORT FOR THEYEAR ENDED MARCH 31 2016.
A. CONSERVATION OF ENERGY
i) The steps taken or impact on conservation of energy: The company continuouslyidentifies the areas to conserve energy.
The maintenance and up-gradation of machines and equipments is done from time to timekeeping energy conservation in mind.
ii) The steps taken by the company for utilizing alternate source of energy: Thecompany does not use / employ any alternate source of energy as there is no availabilityof the same.
iii) The Capital Investment on energy conservation equipments: No directidentifiable investment pertaining to conservation of energy was done during the yearother than maintenance and up-gradation of machines and equipments. Hence the amount ofinvestment cannot be directly measured.
B. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION
a. Expenditure on Research & Development (R & D):
R & D are carried out separately by the Hosiery Association. There is therefore noexpenditure incurred on this account.
b. Technology absorption adaptation and innovation:
(i) The efforts made towards technology absorption: The company keeps aclose watch on the technological developments pertaining to its industry. Up-gradation andreplacement of old machines is done as and when required in order to maintain high qualityof output.
(ii) The benefits derived through use of the machines: By using new technologyyour Company is able to use the finest quality of knitted products. It has enabled toreduce wastage expedite the production process and reduction in the inventory of WIP.
(iii) In case of imported technology [imported during the last three (3) yearsreckoned from the beginning of the financial year]:
(a) Your Company has imported following machines with the latest and updatedtechnology :
108 (One Hundred Eight) Stitching/Sewing Machine from Singapore
11 (Eleven) High Speed Knitting Machine from Germany
60 (Sixty) Socks Knitting Machine from China
1(One) Cutting Machine from Singapore.
(b) The year of import : 2015-16.
(c) Whether technology has been fully absorbed : Partially absorbed during theyear.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
a. Activities relating to exports initiatives taken to increase exports developmentof new export market for products and exports plans: During the year the Companyexported its products to Middle East Australia Cameroon and African Countries. TheCompany is further exploring opportunities in European and American markets.
b. Information in respect of Foreign Exchange Earning and Outgo is:
| || || || |
(Rs. in lacs)
|Sl. No. ||Particulars ||Current Year ||Previous Year |
|i) ||Earning ||10264.08 ||11378.60 |
|ii) ||Outgo ||354.53 ||330.90 |
| ||For and on behalf of the Board of Directors |
| ||Ashok Kumar Todi |
|Kolkata ||Chairman |
|May 25 2016 ||DIN 00053599 |