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Labh Construction and Industries Ltd.

BSE: 530339 Sector: Infrastructure
NSE: LABHCONST ISIN Code: INE962A01013
BSE 05:30 | 01 Jan Labh Construction and Industries Ltd
NSE 05:30 | 01 Jan Labh Construction and Industries Ltd

Labh Construction and Industries Ltd. (LABHCONST) - Director Report

Company director report

To

The Members

Your Directors have pleasure in submitting their 29th Annual Report of the Companytogether with the Audited Statements of Accounts for the year ended 31st March 2017.

1. FINANCIAL RESULTS

The Company’s financial performances for the year under review along with theprevious year’s figures are given hereunder:

(Rs. In Lacs)
PARTICULARS 2016-17 2015-16
Total Income including other Income 100.59 1.88
Loss Before Taxation (5.90) (5.26)
Less: Provision for Taxation - -
Profit After Taxation (5.90) (5.26)

2. DIVIDEND

During the period under review your directors do not recommend any dividend for thecurrent financial year.

3. REVIEW OF BUSINESS OPERATIONS AND FUTUREPROSPECTS

The total Income during the year has Increased from Rs. 1.88 Lacs to Rs. 100.59 ascompared to previous year. The Losses have increased from Rs. 5.26 Lacs to Rs. 5.90 Lacs.

4. RESERVES

The Company has not transferred any amount to the Reserve during the year under review.

5. CORPORATE GOVERNANCE

As per the New (Listing Obligations and Disclosure Requirements) Regulations 2015notified 2nd September 2015 issued by the Securities and Exchange Board of India videcircular no. SEBI/LAD-NRO/GN/2015-16/013. Corporate Governance is notapplicable to the Company as Company has not attained the prescribed limit as mentionedhereunder:

As per the Regulation 15 (Listing Obligations And Disclosure Requirements) Regulations2015 applicability of Corporate Governance shall not be mandatory for companies havingpaid up equity share capital not exceeding rupees ten crore and net worth not exceedingrupees twenty five crore as on the last day of the previous financial year.

6. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS

During the year the Company has not provided any Loan or Guarantee under section 186 ofthe Companies Act 2013. The Company has not made any investments during the year underreview.

7. DEPOSITS:

The Company has not accepted/renewed any public deposits during the year under review.

8. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OFTHE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIALSTATEMENT RELATE AND THE DATE OF THE REPORT

During the year the Company has received tax refunds thus affecting the financialstatements of the Company. The details are disclosed in the notes to the financialstatements of the Company. Other than above there were no Material changes or commitmentthat have occurred which could affect the financial position of the Company.

9. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

During the year under review the Company has not developed and implemented anyCorporate Social Responsibility initiatives as the said provisions are not applicable.

10. SHARE CAPITAL

During the year under review there were no changes in the share capital of theCompany.

11. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS.

Your Company is in the process to implement the Internal Controls and Managementsystems. These systems enable the Company to comply with Internal Company policiesprocedures standard guidelines and local laws to help protect Company’s Assets andConfidential information against financial losses and unauthorized use.

12. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

The Board of Directors met 4 (Four) times during the year. The details are as below:

(1) 30.05.2016 (2) 10.08.2016 (3) 14.11.2016 (4) 14.02.2017

13. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the board ofdirectors to the best of their knowledge and ability confirm and state that –

i. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

ii. 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 loss of the Company for that period;

iii. 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;

iv. The Directors had prepared the annual accounts on a ‘going concern’basis;

v. 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

vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Harshad Vaghela (DIN: 01800107) retires by rotation at the ensuing Annual GeneralMeeting and being eligible offer himself for reappointment.

15. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have given declaration to the Company stating theirindependence pursuant to Section 149(6) of the Companies Act 2013.

16. PERFORMANCE OF EVALUATION

Pursuant to the provisions of the Companies Act2013 and SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015 the Board has carried out the annualperformance evaluation of the Directors individually as well as evaluation of the workingof the Board by way of individual feedback from directors. The evaluation frameworks werethe following key areas:

• ? Knowledge and skills

• ? Professional conduct

• ? Duties Role and functions

• ? Professional conduct and integrity

• ? Sharing of information with Board.

The Directors expressed their satisfaction with the evaluation process.

17. STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:

The Board is of the opinion that the Company neither started any business nor anyemployee.Hence the Company has developed policy as per its requirement.

18. AUDIT COMMITTEE

The Composition of Audit Committee as on 31/03/2017 is as under :-

Name Designation Category
Mr. Rajesh D. Girish Chairman Independent and Non-Executive
Mr. Harin K. Shah Member Independent and Non-Executive
Mr. Harshad B. Vaghela Member Non Independent & Executive

19. REMUNERATION POLICY

The Composition of Remuneration Committee as on 31/03/2017 is as under:-

Name Designation Category
Mr. Rajesh D. Girish Chairman Independent and Non- Executive
Mr. Harin K. Shah Member Independent and Non- Executive
Mr. Harshad B. Vaghela Member Non Independent and Executive

The Company’s Policy relating to appointment of Directors payment of Managerialremuneration Directors’ qualifications positive attributes independence ofDirectors and other related matters as provided under Section 178(3) of the Companies Act2013 is furnished in "Annexure A" and is attached to this report.

20. SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE:

The Composition of Shareholder’s/ Investor’s Committee as on 31/03/2017 is asunder:-

Name Designation Category
Mr. Rajesh D. Girish Chairman Independent and Non- Executive
Mr. Harin K. Shah Member Independent and Non- Executive
Mr. Harshad B. Vaghela Member Non Independent and Executive

21. VIGIL MECHANISM

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a VigilMechanism or Whistle Blower Policy for directors employees and other stakeholders toreport genuine concerns has been established. The same is also uploaded on the website ofthe Company i.e. www.labhconstrcution.com.

22. LISTING OF SHARES

The Equity Shares of the Company have suspended due to penal reasons since last fewyears on BSE Limited (BSE) with scrip code number 530339. The Company confirms that theannual listing fees to the BSE Limited has paid.

23. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES

The Company does not have any Subsidiary Joint Ventures and Associate Concerns.

24. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES ASSOCIATES ANDJOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT.

Since the Company does not have any Subsidiary / Joint Ventures / Associate ConcernsNo financial position of such concern(s) are required to be included in the financialstatement.

25. STATUTORY AUDITORS

The Auditors M/s Darshil Shah & Associates Chartered Accountants ensuing AnnualGeneral Meeting and being eligible offer themselves for reappointment at this AnnualGeneral Meeting.

The Audit Report for financial year 2016-17 contain following qualification or adverseremark:

a. Regarding non-provision of Rs.6.50 lacs (PY Rs. 6.50 lacs) out of Cash balancelooted in the year 1995-96 and not recovered so far due to which profit for the year andother non- current assets both are overstated by the amount An amount of Rs.6.50 lacs waslooted on 14th August 1995. A complaint was lodged on 14th August 1995 vide FIRNo.I-246/95 with Vejalpur Police Station Ahmedabad for the same. The amount has sincebeen recovered by Police and handed over to Income Tax authorities through court of lawbut not yet handed over to the assessee. The assessee has filed case in ITAI and succeededagainst the department but the department has not given any effect for the same and henceno effect has been provided in books. Further Rs. 61.80 lacs has been written off againstone of the trade receivable as it will not be realizable in future as per the opinion ofthe management. The account has been matched with the trade receivable as informed by themanagement.

b. Regarding other income company has received previous dues from income taxdepartment along with interest. The dues have been set off against balances carriedforward and interest of refund has been recognized as other income in statement of profitand loss. There is no business activity in the company during full previous year 2016-17.

c. Regarding non provision of certain liabilities in the accounts. In view of thenon-availability of the relevant information consequential impact thereof on the stateof affairs of the company remains to be ascertained.

d. Regarding financial as well as other impact on the state of affairs of the companydue to delayed payment of statutory dues and those to Secured lenders. In view of the non-availability of the relevant information consequential impact thereof on the state ofaffairs of the company remains to be ascertained. Reply of Comment on Auditors’Report:

Answer to (i): The Company has not done any activities since last few years. Themanagement is hopeful of recovering from losses in its investments.

Answer to (ii) There are various cases of the Company pending against the IncomeTax Department. During the year Company has received some refunds which were utilized torepay loans borrowed earlier by the Company.

Answer to (iii): The Company is a SICK UNIT and Major staff is retrenched.Management proposes to meet the liability as and when it arises. Liabilities likely toarise in future shall not be substantial.

Answer to (iv): The Company‘s operation was suspended from Stock Exchange dueto non compliance. .

26. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Kavita Khatri & Associates Company Secretaries in Practice to undertakethe Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as"Annexure B". The Secretarial Audit Report for financial year 2016-17contain the following adverse remarks:

(i) The Company has not appointed Company Secretary as Key Managerial personnel of theCompany hence section 203 of the Companies Act 2013 not complied.

(ii) The Company has not appointed Internal Auditor of the Company hencesection 138 of the Companies Act 2013 not complied.

(iii) The Company has not published the information like e-voting notice financialresults etc. Hence provisions of rule 20(5) of The Companies (Management andAdministration) Rules 2014 and clause 47 of the Listing Obligation of DisclosureRequirements 2015 not complied.

(iv) The Company is suspended in BSE Ltd due to penal reasons for more than 5years.

Reply on Comment on Secretarial Audit Reports:

Answer to (i): The Company is in the process of appointing Company Secretaryhowever due to dormant status since last few years process of appointment is gettingdelayed. The Company is hopeful to Comply at earliet.

Answer to (ii): The Company is in process for appointing internal Auditorshowever due to dormant since last few years there were no significant internal changes inthe Company.

Answer to (iii): The Company has not been working since last few years howeverCompany regularly updates the details on Company’s as well as BSE website. Answerto (iv)The Company is in financially incapable to start up any business.

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Management discussion & Analysis report form part of this annual report is annexedherewith as "Annexure- C".

28. EXTRACT OF THE ANNUAL RETURN:

The extract of the annual return in Form No. MGT– 9 will be tabled at the BoardMeeting the same is attached as "Annexure-D.

29. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO:

Conservation of Energy and Technology Absorption :NA

The year under review there are no manufacturing activities undertaken by the Company.The main activity of the Company is land development and construction activities and it isof such a nature that it requires minimum energy. In view of the aforesaid fact therewas no scope for your Company to make any efforts for energy conservation research anddevelopment and technology absorption. Hence the particulars required to be furnished inrespect of the same are not given.

Foreign Exchange Earnings : NIL Foreign Exchange Outgos: NIL

30. PARTICULARS OF EMPLOYEE

The information required under section 197 of the Act read with rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:

a. The ratio of the remuneration of each director to the median remuneration of theemployees of the Company for the financial year. None of the Director gets remunerationduring the year under review.

b. The percentage increase in remuneration of each director Chief ExecutiveOfficer Chief Financial Officer Company Secretary in the financial year.: NIL

c. The percentage increase in the median of employees in the financial year: NIL

d. Average percentile increase already made in the salaries of the employee otherthan the managerial personnel in the last financial year and its comparison with thepercentile increase in the managerial remuneration and justification thereof and point outif there are any exceptional circumstances for increase in the managerial remuneration: NIL

e. The Key parameters for any variable component of remuneration availed by theDirectors ; NIL

f. Affirmation that the remuneration is as per the remuneration policy of theCompany.

The Company affirms remuneration is as per the remuneration policy of the Company.

There is no employee covered under section 197(12) of the Companies Act 2013 read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014.

31. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their deep sense of appreciation to the OutgoingPromoters and employees Associates Bankers for the continued help and co-operationextended by them to the Company.

On behalf of the Board of Directors
For Labh Construction & Industries Limited
Place : Ahmedabad Harshad Vaghela
Date : 14/08/2017 Chairman
DIN: 01639309
Reg. Off:
Shantanu 104
Sardar Patel Nagar
Ellisbridge Ahmedabad- 380 006.