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Lakhotia Polyesters (India) Ltd.

BSE: 535387 Sector: Industrials
NSE: N.A. ISIN Code: INE191O01010
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NSE 05:30 | 01 Jan Lakhotia Polyesters (India) Ltd
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P/E 43.05
Mkt Cap.(Rs cr) 9
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OPEN 9.04
CLOSE 9.04
VOLUME 1
52-Week high 9.04
52-Week low 7.65
P/E 43.05
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Lakhotia Polyesters (India) Ltd. (LAKHOTIAPOLY) - Director Report

Company director report

AND MANAGEMENT DISCUSSION AND ANALYSIS

To

The Shareholders

Lakhotia Polyesters India Limited

Your Directors are pleased to present the 12th Annual Report on the businessand operations of the Company and the accounts for the Financial Year ended March 312017.

1. FINANCIAL SUMMARY OR HIGHLIGHTS / PERFORMANCE OF THE COMPANY

The Board's Report shall be prepared based on the stand alone financial statements ofthe Company.

Particulars

FINANCIAL YEAR

2016-17 2015-16
Total Income 172491621 227318607
Less: Expenditure 164374043 220060778
Profit Before Finance Cost Depreciation & Tax 8117578 7257829
Less: Finance Cost 5857130 5031700
Less: Depreciation 1523009 1553864
Net Profit Before Tax & Extraordinary Item 737439 672265
Less: Extraordinary Item 0 (14630000)
Less :Tax Expense 367095 267611
Net Profit After Tax 370344 (14225346)

2. BRIEF DESCRIPTION OF THE COMPANY'S OPERATIONS DURING THE YEAR/STATE OF COMPANY'SAFFAIR

During the current period of operation your company has shown a decrease in therevenue to the extent of 31.78 % from Rs.22.73 crores during FY 2015-16 to Rs. 17.25crores during FY 2016-17. Profit after Tax of the company has become positive to Rs. 3.70lakhs during FY 2016-17 as compared to Rs.(142.25) Lakhs during FY 2015-16.

3. FINANCIAL YEAR

This report of Directors along with its Annexure Management Discussion and AnalysisCorporate Governance Report Financial Statements along with their Notes are prepared forthe period April 01 2016 to March 31 2017 (a period of 12 months). Pursuant to theprovisions of Section 2(41) of the Companies Act 2013 a ‘financial year' inrelation to the Company means the period ending on the 31st day of March every year inrespect whereof financial statement of the Company is made.

Your Company is in compliance with the provisions of the Companies Act 2013.

4. DIVIDENDS

The Company has decided to sustain the growth in line with the long term growthobjectives of the Company by retaining the profits and utilizing the same foropportunities in hand therefore the company does not recommended any dividend.

5. SHARE CAPITAL

During the period April 01 2016 to March 31 2017 during the year under review theCompany has not issued shares with differential voting rights nor has granted any stockoptions or sweat equity and there is no change in the Issued Subscribed and paid up shareCapital of Company. The Share Capital Audit as per the directives of the Securities andExchange Board of India (SEBI) is being conducted by Ranjana Mimani & AssociatesPracticing Company Secretaries. The paid up Share Capital of the Company stands at Rs.104739880/- (Rupees Ten Crores Forty Seven Lakh Eighty Thirty Nine

Thousand and Eight Hundred and Eighty Only).

6. RESERVES

No amount has been transferred by the Company to Reserves during the year.

7. PUBLIC DEPOSITS

The Company has neither invited nor accepted any public deposits during the periodunder review.

8. SUBSIDIARY AND ASSOCIATE COMPANIES

As on March 31 2017 the Company has Shatrunjaya Estates Private Limited as AssociateCompany.

9. CONSOLIDATED FINANCIAL STATEMENT

The Company is not required to consolidate its financial statements in terms ofprovisions of

Companies Act 2013 and rules thereunder.

10. DIRECTORS AND KEY MANAGERIAL PERSONNEL

• In accordance with the provisions of the Section 152 Companies Act 2013 readwith applicable Rules if any Mrs. Jayshree Lakhotia (holding DIN 05357609) retires byrotation at the ensuing Annual General Meeting and being eligible offers herself forre-appointment. As per the provisions of the Companies Act 2013 Independent Directorshave been appointed for a period of five years and shall not be liable to retire byrotation. All other Directors except the Managing Director will retire at the ensuingAnnual General Meeting and being eligible offer themselves for re-election.

• Mr. Madhusudhan Lakhotia is the Managing Director of the Company and Mr. VivekRathi is the Chief Financial Officer and Compliance Officer of the Company.

• Mr. Anil Patodia additional director (Independent Non Executive) of the Companyholds office upto the date of this AGM is eligible recommended for appointment asIndependent Director of the Company for a period of five years.

• The Independent Directors of your Company have given the certificate ofindependence to your Company stating that they meet the criteria of independence asmentioned under Section 149(6) of the Companies Act 2013.

• The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and alsoremuneration for Key Managerial Personnel and other employees forms part of the CorporateGovernance Report of this Annual Report.

11. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the Directors' Responsibility Statement referred to in clause (c) ofsub-section (3) of Section 134 of the Companies Act 2013 the Board of Directors of theCompany confirm that—

a) In the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation and there are no material departures from thesame;

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 at the end of the financial year viz.March 31 2017 and of the profit and loss of the company for that period;

c) 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;

d) The Directors had prepared the annual accounts on a going concern basis; and

e) 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

f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

12. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the Financial Year 2016-17 the Board of Directors of the Company met on January17 2017 February 12 2017 December 29 2016 November 11 2016 September 06 2016August 17 2016 August 10 2016 June 20 2016 May 27 2016.

Frequency and quorum at these meetings were in conformity with the provisions of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements) 2015entered into by the company with the Stock Exchanges. All the Board members and the seniormanagement personnel have affirmed compliance with the Code of Conduct during the yearended on 31st March 2017.

13. COMMITTEES OF THE BOARD

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

Details of Committee and their meetings are detailed in Corporate Governance Report.

14. BOARD EVALUATION

Pursuant to the provisions of Companies Act 2013 and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the board has carried out an annualperformance evaluation of its own performance the Directors individually as well as theevaluation of the working of its Audit Committee Nomination and Remuneration Committeeand Stakeholders Relationship Committee. The manner in which the evaluation has beencarried out has been explained in the Corporate Governance Report.

15. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY THE COMPANY

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 (if any) are given in the notes to the FinancialStatements.

16. CONSERVATION OF ENERGY TECHNICAL ABSORPTION FOREIGN EXCHANGE EARNING:

(A) Conservation of Energy

Your company is taking continuously taking initiatives to ensure optimum utilization ofenergy available in day to day operations. Your company uses energy efficient lightingdevices light fittings to save energy capacitor bank/devices to maintain power factorwhich are environment and power efficient.

(B) Technology Absorption

Your company is doing its business by ensuring optimum utilisation of its availableresources. Your company has not taken any research & development activity so far.

(C) Foreign Exchange Earnings and Outgo

The Company has not incurred in foreign currency during the financial year 2016-17.

17. VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. TheWhistle Blower Policy has been posted on the website of the Company www.lakhotiapoly.in.

18. NOMINATION AND REMUNERATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation toremuneration of Directors Key Managerial Personnel and Senior Management of the Company.This policy also lays down criteria for selection and appointment of Board Members.

19. CORPORATE SOCIAL RESPOSIBILITY :

The Company has not developed and implemented any Corporate Social Responsibilityinitiatives as provisions of Section 135 of the Companies Act 2013 are not applicable tothe Company.

20. SIGNIFICANT AND MATERIAL OREDERS PASSED BY REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.

21. ADEQUACY OF INTERNAL CONTROL SYSTEM

The Company has adequate internal control systems for the business processes in respectof all operations financial reporting compliance with laws and regulations etc. Themanagement information system forms an effective and sound tool for monitoring andcontrolling all operating parameters. Regular internal audits ensure that responsibilitiesare executed effectively. The Audit Committee reviews the adequacy of internal controls onregular basis.

22. CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board members and senior managementpersonnel of the Company which is available on website of the company. The Company hasobtained confirmations for the compliance with the said code from all its Board membersand senior management personnel for the year ended March 31 2017.

23. DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

All the Independent Non-Executive Directors of the Company viz. Mr. Sajan ChoudharyMr. Shailesh Mistry and Mr. Anil Patodia have submitted the declaration of independenceas required pursuant to Section 149(7) of the Companies Act 2013 stating that they meetthe criteria of independence as laid down under Section 149(6) of the Companies Act 2013and Regulation 16 (1) (b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The Independent Directors have also confirmed that they have compliedwith the Company's Code of Conduct.

24. STATUTORY AUDITORS

M/s Sabadra & Sabadra Chartered Accountants were appointed as Statutory Auditorsof your Company at the Annual General Meeting held on 2015 for a term of five consecutiveyears. As per the provisions of Section 139 of the Companies Act 2013 the appointment ofAuditors is required to be ratified by Members at every Annual General Meeting.

The Report given by the Auditors on the financial statements of the Company is part ofthe Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.

25. EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of annual return in MGT9 as a part of this Annual Report as Annexure I.

26. NOMINATION AND REMUNERATION COMMITTEE

The Company follows a policy on "Nomination and Remuneration of Directors Keymanagerial Personnel and Senior Management". The policy is approved by the Nomination& Remuneration Committee and the Board. More details on the same are given in AnnexureII.

27. RELATED PARTY TRANSACTIONS

Form AOC-2 as required under the Companies Act 2013 for related party transaction isannexed as Annexure III to the Directors Report.

28. SECRETARIAL AUDITORS

The Board of Directors have appointed M/s. R. M. Mimani & Associates as SecretarialAuditors to conduct Secretarial Audit for the Financial Year 2016-17.

The Secretarial Audit Report issued by M/s. R. M. Mimani & Associates CompanySecretaries in Practice is self-explanatory and does not call for further comments. TheSecretarial Audit Report and Management reply on the qualifications stated in the saidReport forms a part of Directors Report in Annexure IV.

29. AUDIT COMMITTEE

The composition of Audit Committee is as follows:

Name of Directors Designation in Committee Category
Mr. Sajan Choudhary Chairman Non-Executive and Independent
Mr. Shailesh Mistry Member Non-Executive Independent
Mr. Madhusudan Lakhotia Member Chairman & Managing Director

During the Financial Year 2016-17 Audit Committee met 4 times on May 27 2016 August10 2016 November 08 2016 and January 17 2017. All the recommendations made by theaudit committee were accepted by the board.

Frequency and quorum at these meetings were in conformity with the provisions of theCompanies Act 2013 Listing Agreement and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 entered into by the company with the Stock Exchanges.

30. BUSINESS RISK MANAGEMENT

The Company has a robust Business Risk Management (BRM) framework to identify evaluatebusiness risks and opportunities. This framework seeks to create transparency minimizeadverse impact on the business objectives and enhance the Company's competitive advantage.The business risk framework defines the risk management approach across the enterprise atvarious levels including documentation and reporting. The framework has different riskmodels which help in identifying risks trend exposure and potential impact analysis at aCompany level as also separately for business. The Company has adopted risk managementpolicy.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013

The Company has always believed in providing a safe and harassment free workplace forevery individual through various interventions and practices.

The Company always endeavours to create and provide an environment that is free fromdiscrimination and harassment including sexual harassment. The Company has in place anAnti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment ofWomen at the Workplace (Prevention Prohibition & Redressal) Act 2013. InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy. No complaints were received by the company during the year for sexualharassment.

In order to build awareness in this area the Company has been conducting programmes inthe organisation on a continuous basis.

32. PARTICULAR OF EMPLOYEES

Particulars of employees as required u/s 134 of the Companies Act 2013 are not annexedsince there are no employees drawing remuneration of more than Rs. 6000000/- per annumduring the year under review if employed for full year or more than Rs. 500000/- permonth if employed for part of the year.

Further the information required pursuant to Section 197 of the Companies Act 2013(the Act) read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 in respect of employees of the Company will be provided uponrequest. In terms of Section 136 of the Act the Report and Accounts are being sent to theMembers and others entitled thereto excluding the information on employees' particularswhich is available for inspection by the Members at the Registered Office of the Companyduring business hours on working days of the Company up to the date of the ensuing AnnualGeneral Meeting. If any Member is interested in obtaining a copy thereof such Member maywrite to the Compliance Officer in this regard.

33. GOODS AND SERVICE TAX

Goods and Services Tax (GST) is a landmark reform which will have a lasting impact onthe economy and on businesses. Implementation of a well-designed GST model that applies tothe widest possible base at a low rate can provide significant growth stimulus to thebusiness and contribute to the Prime Minister's mission of ‘Make in India'. Whilethere are a few areas that need to be addressed the Government has announced an intentionto go live on GST on 1st July 2017 and your Company will be ready for thistransformative reform.

34. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report under requirements of SEBI (ListingObligation and Disclosure Requirements) Regulations 2015 forms part of this AnnualReport for the year ended 31st March 2017.

35. CORPORATE GOVERNANCE

The Company is committed to maintain high standards of corporate governance and adhereto corporate governance requirement set out by SEBI. The report of corporate governance asstipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015forms an integral part of the report. The Compliance certificate from the auditors orpracticing Company Secretaries regarding compliance of conditions of corporate governanceas stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015shall be annexed with the report.

36. VIGIL MECHANISM

The Vigil Mechanism of the Company which also incorporates a whistle blower policy interms of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015includes an Ethics & Compliance Task Force comprising senior executives of theCompany. Protected disclosures can be made by a whistle blower through an e-mail ordedicated telephone line or a letter to the Task Force or to the Chairman of the AuditCommittee. The Vigil Mechanism / Whistle Blower Policy has been uploaded on the Company'sWebsite i.e. www.lakhotiapoly.in

37. CAUTIONARY STATEMENT

Statements in the Annual Report particularly those which relate to ManagementDiscussion and Analysis describing the Company's objectives projections estimates andexpectations may constitute ‘forward looking statements' within the meaning ofapplicable laws and regulations. Although the expectations are based on reasonableassumptions the actual results might differ.

38. INTERNAL FINANCIALS CONTROLS

The Company has in place adequate internal financial controls with reference tofinancial statements. During the year such controls were tested and no reportablematerial weaknesses were observed.

39. HUMAN RESOURCES

Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invest in attraction retention and development oftalent on an on-going basis. A number of programs that provide focused people attentionare currently underway. Your Company thrust is on the promotion of talent internallythrough job rotation and job enlargement. The Human Resource agenda continues to supportthe business in achieving sustainable and responsible growth by building the rightcapabilities in the organisation. It continues to focus on progressive employee relationspolicies creating an inclusive work culture and a strong talent pipeline.

40. 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).

41. DISCLOSURE ABOUT COST AUDIT

As per the Cost Audit Orders Cost Audit is not applicable to the Company.

42. APPRECIATIONS AND ACKNOWLEDGMENTS

The Directors wish to thank and deeply acknowledge the co-operation assistance andsupport extended by the Regulatory Authorities Company's Bankers Customers Shareholdersand other business constituents during the year under review. It will be your Company'sendeavour to build and nurture strong links with the trade based on mutuality of benefitsrespect for and co-operation with each other consistent with consumer interests. TheDirectors also wish to place on record their appreciation for all round co-operation andcontribution made by employees at all levels.

The Directors also take this opportunity to thank all Shareholders Clients VendorsBanks Government and Regulatory Authorities and Stock Exchanges for their continuedsupport.

For and on behalf of the Board
LAKHOTIA POLYESTERS (INDIA) LIMITED
Sd/- Sd/-
Date: September 04 2017 Madhusudhan Lakhotia Jayshree Lakhotia
Place: Nashik (Managing Director) (Executive Director)