The Directors present the 26th Annual Report of the Company along with theaudited financial statements for the financial year (FY) ended on March 31 2019.
FINANCIAL SUMMARY/HIGLIGHTS OPERATIONS STATE OF AFFAIRS:
The financial performance of the Company for the year ended March 31 2019 issummarized below:
(Amount in Rs.)
|Particulars ||Year Ended 31.03.2019 ||Year Ended 31.03.2018 |
|Total Revenue ||53345756 ||48063224 |
|Total Exp. ||64289208 ||43083753 |
|Profit before exceptional items & tax ||(10943452) ||4979471 |
|Current Tax for the year & Prior Year ||- ||(2700000) |
|Deferred Tax Liability ||2408442 ||4497110 |
|Profit after taxation ||(8535010) ||6776581 |
As per Regulation 33 of the Securities board of India (Listing Obligation andDisclosure Requirements) Regulations 2015 (herein after referred to as "ListingRegulation") and applicable provisions of the Companies Act 2013 read with the rulesthereunder the Financial Statements of the Company for F.Y. 2018-19. The FinancialStatements for the year 2018-19 have been prepared in compliance with the new set ofIndian Accounting standards (IND AS) and the comparatives for the corresponding previousfinancial year 2017-18 have also been prepared in compliance with the new set of IndianAccounting standards (IND AS). The Ministry of Corporate Affairs (MCA) vide itsnotification in the official gazette dated 16th February 2015 has made applicable theIndia Accounting Standard (IND AS') to certain classes of Companies. For theCompany Ind AS was applicable from 1st April 2017 with a transaction dated of 1st April2016. The Financial results have been prepared in accordance with the recognition andmeasurement principles laid down under Ind AS as presented under Section 133 of CompaniesAct 213 ("the Act") read with the relevant rules issued there under and therelevant accounting principles generally accepted in India as applicable.
Operating & Financial Performance & Internal Control:
Your company has generated gross revenue of Rs. 53345756 as compared to Rs.48063224 for previous year. The income by way of trading during the year amounted toRs. 37727845 compared to Rs. 15660292 in the previous year. Income from servicesamounted to Rs. Nil compared to Rs. Nil in the previous year. The company is focusing moreon polymer imports rather than chemical imports in lieu of erratic price movements andfluctuation of currency.
The company is exploring imports of Coal as part of its commodity trading which islikely to commence shortly.
The Company has in place an established internal control system designed to ensureproper recording of financial and operational information and compliance with variousinternal controls and other regulatory and statutory compliances. Code of Internalcontrols which require that the Director review the effectiveness of internal controls andcompliances controlsfinancialand operational risks risk assessment and managementsystems and related party transactions have been complied with.
The income tax demand on the company of around Rs 10 crore that was passed by theAssessment officer under section 143(3) of the Income Tax Act where the company went intoappeal and thereby pending with the Income Tax Appellate Tribunal in respect of AssessmentYear 2012- 2013 was heard on 22.03.2019. Your company is confident of the demand beingdismissed and the appeal being allowed based on the facts of the case.
Company's Policies on Remuneration Whistle Blower and also Code of Conduct applicableto Directors and Employees of the Company has been complied with. These Policies and Codeof Conduct are available on the Company's website www.laffanspetrochemical.com
There is no change in the nature of the business of the Company. There were nosignificant and material orders passed by the regulators or courts or tribunals impactingthe going concern status and company's operations in future. There were no materialchanges and commitment affecting the financial position between March 31 2019 and date ofthis Report of Directors.
Subsidiaries Joint Venture or Associates Companies during the Year:
You Company has neither any Subsidiary nor Joint Venture nor Associates Company. Duringthe year under review none of the Companies have become or ceased to be Company'sSubsidiaries Joint ventures or Association Companies.
The Company has not invited/ accepted any deposits from the public during the yearended March 31 2019. There were no unclaimed or unpaid deposits as on March 31 2019.
Transfer to Reserve:
The Company has not transferred any amount to reserves.
To conserve resources which would assist in future growth of the Company no dividendis recommended by the Board for the financial year ended March 31 2019.
Significance and Material Order Passed By the Regulators or Courts or Tribunals.
There were no significance and material orders passed by regulators or courts ortribunals impacting the going concern status and company operations in future. There wereno material changes and commitments affecting the financial position of the companyoccurring between March 31 2019 and the date of this Report of the Directors.
DIRECTORS AND KEY MANAGERIAL PERSONNEL RETIREMENT BY ROTATION:
In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Jaideep Seth (DIN: 03130620) is due to retire by rotation at the 26th Annual GeneralMeeting and being eligible offer himself for re- appointment.
Brief profile of the proposed appointee together with other disclosures in terms ofRegulation 36 (3) of the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015 are mentioned in the Notice which is part of this Annual Report.
APPOINTMENT AND RESIGNATION OF DIRECTOR AND KEY MANAGERIAL PERSONNEL:
Appointment of Mr. Deepak Jagannath Roy (DIN: 08023836) as an Independent Director witheffect from 13th August 2018.
Number of meeting of the Board:
During the financial year 4 (four) Board Meetings and 4 (four) Audit Committee Meetingswere convened and held.
The details of which are given in the Corporate Governance Report. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013.
Directors' Responsibility Statement:
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSections 134(3) (c) read section 134(5) of the Companies Act 2013.
(i) In the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards had been followed along with properexplanation 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 as at March 31 2019 and of the profitand loss of the company for that period;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;
(iv) The directors had prepared the annual accounts on a going concern basis; and
(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
(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.
Statement on declaration given by independent directors under sub-section (6) ofsection 149:
The Company has received the declaration from each Independent Directors that they meetthe criteria of independence laid down under Section 149(6) of Companies Act 2013 underRegulation 16(b) of SEBI (LODR) Regulations 2015.
Particulars of loans guarantees or investments under section 186:
The Company has not made any loans or given Guarantees or provided security to anyperson and has not made any investment that attracts the provisions of Section 186 of theCompanies Act 2013 during the Financial Statements.
Nomination & Remuneration Policy:
The Board has framed a policy on the recommendation of the Nomination &Remuneration Committee which lays down a framework in relation to remuneration ofDirectors Key Managerial Personnel and Senior Management of the Company. This policy alsolays down criteria for selection appointment and remuneration of Board Members/ KeyManagerial Personnel and other employees. Is annexed herewith as "AnnexureA".
Related Party Transactions:
There were contracts or arrangements entered into by the company during the year whichattracts the provision of Section 188 of the Companies Act 2013. Details of whichprovided in form AOC-2. All related party transactions that were entered into during thefinancial year were on an arm's length basis and were in the ordinary course of business.Thus not requires the approval of shareholders. All Related Party Transactions are placedbefore the Audit Committee for approval.
There are no materially significant related party transactions made by the Company withpromoters directors KMP or other designated persons which may have a potential conflictwith the interest of the Company.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompany's website www. laffanspetrochemical.com .
Conservation of energy technology absorption foreign exchange earnings and outgo:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "AnnexureB".
Risk management policy and its implementation:
The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.
Internal Control System:
The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested and certified byStatutory as well as Internal Auditors.
Statement indicating the manner in which formal annual evaluation has been made by theBoard of its own performance and that of its committees and Individual Directors:
The formal annual evaluation has been done by the board of its own performance and thatof its committee and individual directors on the basis of evaluation criteria specified inthe Nomination and Remuneration policy of the Company. A member of the Board/committee didnot participate in the discussion of his/her evaluation.
Remuneration of Directors Key Managerial Personnel and particulars of employees:
The remuneration paid to the Directors is in accordance with the Nomination andremuneration policy formulated in accordance with Section 178 of the Companies Act 2013and Regulation 19 of the listing Regulation (Including any statutory modification(s) orre-enactments(s) thereof for time being in Force).
The information required pursuant to Section 197 of the Companies Act 2013 read rule 5of the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014 Theprescribed particulars of employees required under section 134(3)(q) read rule 5 of theCompanies (Appointment and Remuneration of Managerial personnel) Rules 2014 in respectof employees of the Company is not provided as there are no employees drawingremuneration exceeding the limits prescribed under aforesaid rules.
The information required pursuant to Section 197 read with Rule 5 (1) (i) of TheCompanies (Appointment and Remuneration) Rules 2014 in respect of ratio of remunerationof each director to the median remuneration of the employees of the Company for theFinancial Year will be made available for inspection at its registered office of theCompany during the working hours for a period of twenty one days before the date of annualgeneral meeting of the company pursuant to Section 136 of the Companies Act 2013 andmembers if any interested in obtaining the details thereof shall make specific requestto the Company Secretary and Compliance officer of the Company in this regard.
Further details of remuneration of each director have been provided under MGT-9 extractof Annual Return appended as Annexure D of this report. Hence not repeated the sameunder corporate governance report.
At the Annual General Meeting held on 28th September 2018 M/s. Pushp K.Sahu & Co. Chartered Accountant Statutory Auditors of the Company havingregistration number (FRN No. 128013W) were appointed as statutory auditors of the Companyfor a term of 5 (five) years from the conclusion of the 25th AGM (subject to ratificationof such appointment by the Members at every AGM if required) till the conclusion of the30th AGM at such remuneration as may be determined by the Board of Directors and the saidAuditors from time to time. The Company has received a certificate from the statutoryauditors to the effect that their re-appointment if made would be within the limitsprescribed.
The said Auditors have confirmed their eligibility for appointment in terms of Section139 of the Act. There are no qualifications reservations or adverse remarks ordisclaimers made by M/s. Pushp. K. Sahu & Co Statutory Auditors in their report.
Independent Practicing Chartered Accountants were appointed as an Internal Auditor forFinancial Year 2018-19 they performed the duties of internal auditors of the Company asprescribed under the Act and their report is reviewed by the audit committee from time totime.
Secretarial Auditors and Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 Board hasappointed M/s. Jitendra Lekhwani Practicing Company Secretary to conduct SecretarialAudit for the financial year 2018-19. The Secretarial Audit Report for the financial yearended March 31 2019 is annexed herewith marked as Annexure C' to this Report. Thereis no qualification reservations or adverse remarks made by SecretarialAuditors in theAudit Report.
According to information and explanation given to us the maintenance of cost recordshas not been prescribed by the Central Government sub section (1) of section 148 of theCompanies Act 2013
Reporting Of Frauds by Auditor:
During the year under review neither the Statutory Auditors nor the SecretarialAuditor has reported to the Audit Committee under Section 143 (12) of the Companies Act2013 any instances of fraud committed against the Company by its officers or employeesthe details of which needs to be mentioned in the Board's Report.
Obligation of Company under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013:
In order to prevent sexual harassment of women at work place the Company has adopted apolicy for prevention of Sexual Harassment of Women at workplace under the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andduring the year Company has not received any complaint of such harassment.
In compliance with the SEBI regulation on prevention of Insider Trading your Companyhas framed a comprehensive code which lays down guidelines and advises the Directors andemployees of the Company on procedures to be followed and disclosures to be made whiledealing in securities of the Company. During the year under review the Company adoptedCode of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitiveinformation and the Code of Conduct for Prohibition of Insider Trading in accordance withSEBI (Prohibition of Insider Trading) Regulations 2015.
The Extract of the Annual Return in form MGT-9:
The details forming part of the extract of the Annual Return in form MGT 9 is annexedherewith as "Annexure D".
Transfer of Amounts to Investor Education and Protection Fund:
Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore; there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).
During the Year Evaluation cycle was completed which included the Evaluation of theBoard as a whole Board Committees and Directors. The exercise was done in the IndependentDirectors meeting and Nomination and Remuneration Committee meeting of the Company. TheEvaluation process focused on various aspects of the Board and Committees functioning suchas composition of the Board and Committees experience and competencies performance ofspecific duties and obligations governance issues etc. Separate exercise was carried outto evaluate the performance of individual Directors on parameters such as attendancecontribution and independent judgment.
Corporate Social Responsibility (CSR):
Your Company does not fall in the criteria mentioned under Section 135 of the CompaniesAct 2013 for applicability of the provisions of Corporate Social Responsibility. Henceyour Company is not required to constitute CSR Committee and to comply with otherprovisions of Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014.
Research & Development:
As Company is not into manufacturing activity there was no Research and Developmentactivity carried out by the Company during the financial year under review.
Website of the Company:
The Company maintains a website www.laffanspetrochemical.com where detailed informationof the company and its products are provided.
Code of Conduct:
The Board of Directors has approved a Code of Conduct which is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Code has been placed on the Company's websitewww.laffanspetrochemical.com. The Code lays down the standard procedure of businessconduct which is expected to be followed by the Directors and the designated employees intheir business dealings and in particular on matters relating to integrity in the workplace in business practices and in dealing with stakeholders.
All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.
Vigil mechanism/whistle Blower Policy:
The Company has established a vigil mechanism/Whistle Blower Policy for Directors andemployees to report their genuine concerns details of which have been given in theCorporate Governance Report annexed to this Report.
Following details are also available on the website of the Companies onwww.laffanspetrochemical.com
1. The details of such familiarization programmes
2. The policy on Related Party Transactions
3. Code of conduct for Board of Directors and Employees
4. Code of internal procedure and conduct under insider trading regulation.
5. Policy on Board Diversity
6. Nomination & Remuneration Policy etc.
Report on Corporate Governance
A separate report on Corporate Governance is attached to this report along withStatutory Auditor's certificate on its compliance in "Annexure F"
Management Discussion and Analysis Report:
Management's discussion and analysis Report is annexed herewith as "Annexure E".
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectivelyhave been duly followed by the Company.
Disclosure with Respect to Demat Suspense Account / Unclaimed Suspense Account
The Company reports that no shares issued pursuant to Public Issue remains unclaimedhence the Clause of Disclosure with respect to Demat Suspense Account / Unclaimed SuspenseAccount is not applicable.
Your Company has tied up with Central Depository Services (India) Ltd. (CDSL) to enablethe shareholders to trade and hold share in an electronic/dematerialized form. Theshareholders' are advised to take benefit dematerialization.
All material Risks faced by the Company are identifiedand assessed. For each of therisks identified corresponding controls are assessed and policies and procedures are putin place for monitoring mitigating and reporting risk on a periodic basis.
Your Directors take this opportunity to place on record their appreciation and sinceregratitude to the Government of India Governments of Gujarat & MaharashtraAuthorities and the Bankers to the Company for their valuable support and look forward totheir continued co-operation in the years to come. Your Directors also acknowledge thesupport and co-operation received from the employees and all those who have helped in theday to day management.
| ||For and on behalf of the Board of Directors || || |
|Place: Mumbai ||Sandeep Seth ||Anisha Seth ||S.R. Narayanan |
|Dated: 5th September 2019 ||(Managing Director) ||(Director) ||(Company Secretary) |
| ||DIN: 00316075 ||DIN: 06867960 || |