The Directors present the 33rd Annual Report of La Opala RG Limited (the Company)along with Audited Financial Statements for the financial year ended 31st March 2020.
1. FINANCIAL RESULTS
The Financial Results of the Company for the year under review are as under:
(Rs. In Lakh)
|SI. No. Particulars ||For the Year ended 31st March' 2020 ||For the Year ended 31st March' 2019 |
|1 Revenue from operations ||27001.37 ||27809.77 |
|2 Other Income ||1669.05 ||1739.81 |
|3 Total expenses before interest and depreciation ||16551.32 ||16580.75 |
|4 Finance Cost ||57.45 ||61.02 |
|5 Profit after Interest but before Depreciation ||12061.65 ||12907.81 |
|6 Depreciation ||1596.77 ||1645.59 |
|7 Profit before Taxation ||10464.88 ||11262.22 |
|8 Tax Expenses ||2037.95 ||3858.69 |
|9 Profit after Taxation ||8426.93 ||7403.53 |
|10 Profit Available for Appropriation ||8426.93 ||7403.53 |
|11 Re-measurement of gain/(loss) (Net of tax) ||(45.15) ||(58.06) |
|12 Dividend and Others ||2664.00 ||1221.00 |
|13 Tax on Dividend ||547.60 ||250.98 |
|14 Transferred to General Reserve ||1000.00 ||1000.00 |
|15 Balance as per last year (Retained Earnings) ||28253.27 ||23379.78 |
|16 Balance carried forward to Balance Sheet ||32423.45 ||28253.27 |
2. STATE OF COMPANY'S AFFAIRS (OVERALL PERFORMANCE)
During FY 2019-20 your Company achieved Revenue from Operations of Rs. 270.01 croresas against Rs. 278.10 crores in FY 2018-19 profit before tax from Rs. 112.62 crores toRs. 104.65 crores and profit after tax from Rs. 74.03 crores to Rs. 84.27 crores.
The last month operations in the F.Y. 2019-20 has been affected by Covid-19 pandemic.
3. IMPACT OF COVID-19
The spread of COVID-19 has severely impacted businesses around the globe. In manycountries including India there has been severe disruption to regular businessoperations due to lockdowns disruptions in transportation supply chain travel bansquarantines social distancing and other emergency measures. La Opala plants and officeswere under nationwide lockdown since March 24 2020 and operations are being resumed in aphased manner taking into account directives from the Government. As a result of lockdownthe volumes for the month of March 2020 have been impacted and consequently theperformance for the month of March 2020 has also been partially impacted. Management isexpecting that demand for products will improve on stabilization of COVID-19 post removalof lock down. The Company has made detailed assessment of its liquidity position for aperiod of at least one year from the balance sheet date of the recoverability andcarrying values of its assets comprising property plant and equipment Intangible assetsTrade Receivables Inventory investments other current and non-current assets andability to pay its liabilities as they become due and effectiveness of internal financialcontrols at the balance sheet date and has concluded that there are no material impact oradjustments required in the stand-alone financial statements.
Management believes that it has taken into account all the possible impact of knownevents till the date of approval of its financial statements arising from COVID-19pandemic in the preparation of the stand-alone financial statements. The impact on ourbusiness will depend on future developments that cannot be reliably predicted. It isuncertain how long these conditions will last. The impact of global health pandemic mightbe different from that estimated as at the date of approval of these financial statementsand the Company will closely monitor any material changes to future economic conditions.Management expects no significant impact on the continuity of operations of the businesson a long term basis.
4. SHARE CAPITAL
The Paid up Equity Share Capital as on 31stMarch 2020 was Rs. 22.20 crore and therehas been no change in the capital structure of the Company. During the year under reviewthe Company has neither issued shares with differential voting rights /convertible warrantnor has granted any stock options or sweat equity. As on March 31 2020 none of theDirectors of the Company hold instruments convertible into equity shares of the Company.
Pursuant to the approval of the Board of Directors on February 14 2020 your Companyhas declared and paid an Interim Dividend of 60% i.e. Rs.1.20/- per equity share on eachfully paid 111000000 no. of equity shares of face value of Rs.2/- each amounting to Rs.133200000 for the financial year ending March 31 2020. The dividend was paid to thosemembers of the Company whose names appeared on the Register of Members of the Company ason Thursday February 27 2020 being the record date fixed for this purpose.
The Board has not recommended a final dividend and the interim dividend of Rs.1.20/-declared by the Board in February 2020 shall be considered as the final dividend for thefinancial year 2019-20. Thus the total dividend for the financial year 2019-20 remainsRs.1.20/- per equity share.
The Dividend Distribution Policy is available on the website of the Company atwww.laopala.in.
6. TRANSFER TO RESERVES
During the year under review Rs. 1000 lakh was transferred to General Reserves fromRetained Earning.
7. TRANSFER TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 ("the IEPFRules") all unpaid or unclaimed dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the IEPF Rules the shares on which dividend has not beenpaid or claimed by the shareholders for seven consecutive years or more shall also betransferred to the demat account of the IEPF Authority. During the year the Company hastransferred the unclaimed and unpaid dividends of Rs. 209336 for the financial yearended March 31 2011. Further 77592 corresponding shares on which dividends wereunclaimed for seven consecutive years were transferred as per the requirements of the IEPFRules.
Members/claimants whose shares and/or unclaimed dividend have been transferred to theIEPF Demat Account or the Fund as the case may be may claim the shares or apply forrefund by making an application to the IEPF authority in Form IEPF-5 (available onhttp://www.iepf.gov.in) along with requisite fee as decided by the IEPF authority fromtime to time. The member/claimant can file only one consolidated claim in a financial yearas per the IEPF Rules.
Details of shares/shareholders in respect of which dividend has not been claimed areprovided on our website at www.laopala.in. The shareholders are encouraged to verify theirrecords and claim their dividends of all the earlier seven years if not claimed.
8. CHANGE IN THE NATURE OF BUSINESS IF ANY
During the period under review there was no change in the nature of business of theCompany. The Object clause of the Company was amended by passing special resolutionthrough Postal Ballot on 1st April 2020 to include the business of providing informationtechnology data processing support service for software and hardware support servicefor storage disaster recovery and enterprise resource planning.
In terms of the provisions of Section 73 to 76 of the Act read with the relevant rulesmade thereunder your Company has not accepted any deposit from the public.
10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY
The Company has an adequate system of internal control procedures which is commensuratewith the size and nature of its business. Detailed procedural manuals are in place toensure that all the assets are protected against loss and all transactions are authorizedrecorded and reported correctly. The internal control system of the Company is monitoredand evaluated by internal auditors and their audit reports are reviewed by the AuditCommittee of the Board of Directors. The observations and comments of the Audit Committeeare placed before the Board.
As per the provisions of the Act the Company appointed M/s Singhi & Co. CharteredAccountants Kolkata (Firm Registration No. 302049E) as the Statutory Auditors of theCompany for a period of five years commencing from the conclusion of 30th Annual GeneralMeeting of the Company held on 26th August 2017.
STATUTORY AUDITORS' OBSERVATIONS
The notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report is anun-modified report and does not contain any qualification report of fraud reservationadverse remark or disclaimer and do not call for any further comments.
In accordance with the provisions of Section 148 of the Companies Act 2013 theCentral Government has prescribed maintenance and audit of cost records vide the Companies(Cost Records and Audit) Rules 2014 to such class of companies as mentioned in the Tableappended to Rule 3 of the said Rules. CETA headings under which Company's products arecovered are not included. Hence cost audit provisions are not applicable to the Companyas of now.
The provisions of Section 204 of the Companies Act 2013 mandates Secretarial Audit ofthe Company by a Company Secretary in Practice. The Board in its meeting held on 11th May2019 appointed M/S Drolia and Company Company Secretaries Kolkata as the SecretarialAuditor for the financial year ending March 31 2020. The Secretarial Auditor's Report forthe financial year ending March 31 2020 is annexed to the Boards' Report as Annexure I.There are no qualification reservation adverse remark or disclaimer in the said reportand do not call for any further comments.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS
During the year under review neither the Statutory Auditors nor the secretarialauditors has reported to the audit Committee or the Board under section 143 (12) of theCompanies Act 2013 any instances of fraud committed against the Company by its officersor employees the details of which would need to be mentioned in the Board's report.
Pursuant to Section 138 of the Companies Act 2013 read with The Companies (Accounts)Rules 2014 the Company has appointed M/s. Doshi Chatterjee Bagri & Co. LLP as theInternal Auditors of the Company. The role of internal auditors includes but not limitedto review of internal audit observations and monitoring of implementation of correctiveactions required reviewing of various policies and ensure its proper implementationreviewing of SOPs and their amendments if any.
During the year under review Smt. Mamta Binani (DIN: 00462925) was appointed as anIndependent Director effective from April 01 2019. In terms of Articles of Association ofthe Company Shri Sushil Jhunjhunwala (DIN: 00082461) and Shri Arun Kumar Churiwal (DIN:00001718) Directors of the Company retires by rotation at the ensuing Annual GeneralMeeting and being eligible have offered themselves for re-appointment.
Details of each of the Directors proposed to be reappointed at the ensuing AnnualGeneral Meeting as required by Regulation 36(3) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ("SEBI (LODR) Regulations 2015") andSS - 2 (Secretarial Standards on General Meetings) have been included in the Noticeconvening the 33rd Annual General Meeting of the Company. Your Directors recommend theResolutions for your approval.
There was no change in the composition of the Board of Directors during the year underreview except as stated above.
13. DECLARATION BY INDEPENDENT DIRECTORS
The Company has received necessary declaration from each independent director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofindependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
14. KEY MANAGERIAL PERSONNEL
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and section 203 of the Companies Act 2013 read with the Rulesframed thereunder:
|a. Mr. Sushil Jhunjhunwala ||(DIN: 00082461) |
|Executive Vice Chairman || |
|b. Mr. Ajit Jhunjhunwala ||(DIN: 00111872) |
|Managing Director || |
|c. Mrs. Nidhi Jhunjhunwala ||(DIN: 01144803) |
|Executive Director || |
|d. Mr. Alok Pandey Chief Financial Officer (CFO) and Company Secretary || |
15. BOARD EVALUATION
The Board of Directors has carried out an annual evaluation of its own performanceboard committees and individual Directors pursuant to the provisions of the Companies Act2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of criteria such as the board composition and structureeffectiveness of board processes information and functioning etc The performance of theCommittees was evaluated by the Board after seeking inputs from the committee members onthe basis of criteria such as the composition of committees effectiveness of committeemeetings etc. The above criteria are broadly based on the Guidance Note on BoardEvaluation issued by the Securities and Exchange Board of India on January 5 2017.
In a separate meeting of independent directors performance of non-independentdirectors the Board as a whole and the Chairman of the Company was evaluated taking intoaccount the views of executive directors and non-executive directors.
The Board and the Nomination and Remuneration Committee reviewed the performance ofindividual directors on the basis of criteria such as the contribution of the individualdirector to the board and committee meetings like preparedness on the issues to bediscussed meaningful and constructive contribution and inputs in meetings etc.
At the board meeting that followed the meeting of the independent directors and meetingof Nomination and Remuneration Committee the performance of the Board its Committeesand individual directors was also discussed. Performance evaluation of IndependentDirectors was done by the entire Board excluding the independent director beingevaluated.
16. BOARD MEETINGS
The Board met 4 times during the year ended March 31 2020 on May 11 2019 August 102019 November 09 2019 and February 14 2020. The gap between any two Board meetingsduring this period did not exceed one hundred and twenty days.
The details of the Board Meetings held during the F.Y. 2019-20 have been furnished inthe Corporate Governance Report forming part of this Annual Report.
17. COMMITTEES OF THE BOARD
As on March 31 2020 the Board had the following Committees:
1. Audit Committee
2. Nomination and Remuneration Committee
3. Stakeholders' Relationship Committee
4. Corporate Social Responsibility Committee
5. Risk Management Committee
The details of the Committees along with their composition number of meetings held andattendance at the meetings is provided in the Corporate Governance Report.
18. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
A Nomination and Remuneration Policy formulated and adopted by the Board of Directorspursuant to the provisions of Section 178 and other applicable provisions of the CompaniesAct 2013 and Rules thereto inter alia define the Companies policy on Directors'appointment and remuneration by the Nomination and Remuneration Committee. The said policymay be referred to at the Company's website www.laopala.in.
19. CORPORATE GOVERNANCE
A separate report on Corporate Governance practices followed by the Company togetherwith a Certificate from the Company's Auditors M/s Singhi & Co. Chartered Accountants(Firm Registration No. 302049E) confirming the compliances to conditions of CorporateGovernance as stipulated under Schedule V (E) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed.
20. MANAGEMENT DISCUSSION AND ANALYSIS REPORT
In terms of the provisions of Regulation 34(3) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Management Discussion and Analysis Reporton the operations of the Company is set out in this Annual Report.
21. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(3)(c) and 134(5) of the Companies Act 2013the Directors state that:
(a) In the preparation of the annual accounts for the year ended March 31 2020 theapplicable Indian Accounting Standards read with requirements set out under Schedule IIIto the Act have been followed and there are no material departures from the same;
(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 as at March 31 2020 and of the profit ofthe company for that period;
(c) The Directors have 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 have prepared the annual accounts on a going concern' basis;
(e) The Directors have 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.
22. VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for directors and employees in confirmation with Section 177(9) of the Act andRegulation 22 of Listing Regulations to report concerns about unethical behavior. ThePolicy is available on the Company's website at www.laopala.in under "Investors"Section. The functioning of the Vigil mechanism is reviewed by the Audit Committee fromtime to time. No complaint under this head has been received by the Company during theyear.
23. EXTRACT OF ANNUAL RETURN
As required under Section 92 of the Companies Act 2013 an extract of the AnnualReturn for the financial year 2020 in the prescribed form MGT-9 forms part of this reportand is annexed as Annexure II. The Annual Return of the Company as required under theCompanies Act 2013 will be available on the website of the Company at www. laopala.in.
24. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETINGS
During the Financial Year the Company has complied with all the applicable mandatoryprovisions of Secretarial Standards issued by the Institute of Company Secretaries ofIndia.
25. LISTING WITH STOCK EXCHNAGES
The Company's Equity Shares are listed on National Stock Exchange of India Ltd. (NSE)and Bombay Stock Exchange Limited (BSE). Necessary stock exchange regulations are compliedwith from time to time. Applicable listing fee has already been paid to the respectivestock exchanges.
26. SUBSIDIARY/ ASSOCIATES/ JOINT VENTURE COMPANIES
The Company does not have any subsidiary/ associate/joint venture Company for the yearended March 31 2020.
27. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE BY THE COMPANY
The Company has not given any loan guarantees or made any investments prescribed underSection 186 of the Companies Act 2013 during the year under review and hence the saidprovision is not applicable.
28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The information on transactions with related parties pursuant to Section 134(3)(h) ofthe Act read with Rule 8(2) of the Companies (Accounts) Rules 2014 are given in AnnexureIII in Form No. AOC-2 and the same forms part of this report. The same have also beendisclosed under Note No 44 of the Notes to the Financial Statements. In conformity withthe requirements of the Act read with SEBI (LODR) Regulations 2015 the policy to dealwith related party transactions is also available on Company's website at www.laopala.in.
29. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There were no significant and material orders passed by the Regulators or Courts orTribunals that would impact the going concern status and the Company's operations infuture.
30. MATERIAL CHANGES FROM END OF FINANCIAL YEAR TO DATE OF THIS REPORT
Except as disclosed elsewhere in this report there have been no material changes andcommitments which can affect the financial position of the Company occurred after theclosure of the financial year till the date of this report.
31. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION RESEARCH & DEVELOPMENT(R&D) AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information relating to Conservation of Energy Technology Absorption and ForeignExchange Earnings and Outgo as required to be disclosed under Section 134 (3)(m) of theCompanies Act2013 read with the Companies (Accounts) Rules 2014 is attached and forms apart of this Report marked as Annexure IV.
32. CORPORATE SOCIAL RESPONSIBILITY
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the area of eradicating hunger preventivehealth care water conservation environment sustainability women empowerment girlseducation child development and enhancing vocational skills. These projects are inaccordance with Schedule VII of the Companies Act 2013 and the Company's CSR policy. TheCSR Policy is available on the website of the Company at www.laopala.in. The Report on CSRactivities as required under the Companies (Corporate Social Responsibility Policy) Rules2014 is annexed to this reports as Annexure V.
33. DISCLOSURE UNDER RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OFMANAGERIAL PERSONNEL) RULES 2014
The information required pursuant to Section 197 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company and Directors is attached as Annexure VI.
34. PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule 5(2) & 5(3) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isattached as an Annexure VII.
35. DISCLOSURE UNDER SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE
As per the requirement of The Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules made there under your Company has in placea policy for Prevention of Sexual Harassment of Women at Workplace and constituted anInternal Complaints Committees (ICC). No complaint has been raised from any employeerelated to sexual harassment during the year ended March 31 2020.
36. HUMAN RESOURCE
For La Opala RG Ltd its people are its strongest asset. The Company takes pride in thecommitment competence and dedication of its employees in all areas of the business. TheCompany invests in building the best-in-class team led by exceptional professionals. Overthe years the Company has been nurturing a meritocratic empowering and caring culturethat encourages excellence. Company nurtures talents by providing its people opportunitiesto sharpen their capabilities. Company encourages innovation lateral thinking andmulti-skilling and prepares its people for future leadership roles.
37. BUSINESS REPONSIBILITY REPORT (BRR)
The Listing Regulations mandate the inclusion of the BRR as part of the Annual Reportfor the top 1000 listed entities based on market capitalization. Your Company forms partof the Top 1000 listed companies of India and is mandatorily required to provide aBusiness Responsibly Report as part of the Annual Report in accordance with the Regulation34(2)(f) of SEBI (LODR) Regulations 2015 read with SEBI Circular No. CIR/CFD/CMD/10/2015dated 4th November 2015. In compliance with the Listing Regulations we haveintegrated BRR disclosures into our Annual Report for FY 2019-20.
38. RISK MANAGEMENT
The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company. The policy on RiskManagement is hosted on the Company's website www. laopala.in. The Committee isresponsible for monitoring and reviewing the risk management plan and ensuring itseffectiveness. The Audit Committee has additional oversight in the area of financial risksand controls. The major risks identified by the businesses and functions aresystematically addressed through mitigating actions on a continuing basis. The developmentand implementation of risk management policy has been covered in the Management Discussionand Analysis which forms part of this report.
The Directors take this opportunity to thank the Company's employees customersmembers distributors vendors bankers government and all other business associates fortheir consistent support and encouragement to the Company. The Directors regret the lossof life due to COVID-19 pandemic and are deeply grateful and have immense respect forevery person who risked their life and and safety to fight this pandemic.
|For and on behalf of the Board || |
| ||A.C. Chakrabortti |
|Place: Kolkata ||Chairman |
|Date: 30th June 2020 ||DIN: 00015622 |