The Board of your Company is immensely delighted in presenting its 26th Report. TheReport is being presented along with the Audited Financial Statements for the FinancialYear ended March 31 2017.
(Rs. In Millions)
| ||Standalone ||Consolidated |
|Sl. No. Particulars ||Year ended 31.03.2017 ||Year ended 31.03.2016 ||Year ended 31.03.2017 ||Year ended 31.03.2016 |
|1. Revenue from operations ||10214.39 ||9147.21 ||10220.36 ||10512.83 |
|2. Other Income ||1.91 ||8.27 ||1.94 ||8.65 |
|3. Total Revenue ||10216.30 ||9155.48 ||10222.30 ||10521.47 |
|4. Expenditure || || || || |
|a. Cost of Raw Material Consumed ||2101.49 ||123.34 ||2089.17 ||123.34 |
|b. Purchase of Stock in trade ||8180.13 ||7609.44 ||8190.54 ||8600.58 |
|c. (-) Inc. / (+) Dec. In stock ||(1467.35) ||651.08 ||(1460.38) ||1005.89 |
|d. Employees benefit expenses ||49.17 ||76.53 ||51.81 ||80.81 |
|e. Finance Cost ||249.86 ||334.51 ||249.86 ||334.51 |
|f. Depreciation ||136.64 ||318.86 ||138.53 ||321.09 |
|g. Other Expenditure ||68.30 ||205.45 ||73.37 ||216.96 |
|Total Expenses ||9318.25 ||9319.21 ||9332.90 ||10683.18 |
|5. Profit/(Loss) from ordinary activities PBT before exceptional Items ||898.05 ||(163.73) ||889.39 ||(161.71) |
|6. Exceptional items (Interest transferred to FITL/WCTL payable in the next eight years as approved by IEC under RBI guidelines) ||(924.53) ||(844.82) ||(924.53) ||(844.82) |
|7. Profit/(Loss) from ordinary activities before tax PBT ||(26.48) ||(1008.55) ||(35.14) ||(1006.52) |
|8. Tax Expenses || || || || |
|-Current Tax ||- ||- ||- ||0.10 |
|-Deferred Tax ||(15.35) ||(76.94) ||(44.27) ||(102.98) |
|-MAT credit entitlement || || || ||(0.10) |
|9. Profit afterTax (PAT) ||(11.12) ||(931.61) ||9.13 ||(903.55) |
|10. Earnings per share || || || || |
|Basic (Rs.) ||(0.16) ||(14.01) ||0.13 ||(13.59) |
|Diluted (Rs.) ||(0.15) ||(14.01) ||0.13 ||(13.59) |
Financial & Performance Review
The company is in the business of agri based products such as rice processing foodprocessing and green power generation based on agri-waste mainly rice husk which is one ofthe Companys by-products. The Company is primarily engaged in the handling storageand transportation of food grains. In the process the prime motive is to preserve andstore the food grains. Warehousing infrastructure transportation and packing plays keyrole in process efficiency and profitability la.
Your Companys USP is excellent quality strategic procurement marketing andbrand. Your Companys presence is all pervasive starting from grass root level offarmers mandi yards through representatives procurement transportation warehousingpaddy processing generating other by-products like rice bran oil de-oiled cakes andusing husk for power plant.
During the year ended 31st March 2017 your Company recorded Sales of Rs.10214.39million as compared to Rs.9147.21 million during the year ended 31-03-2016 registering ayoy growth of 11.67% over the last year.
EBIDTA was positive by Rs.1284.55 million as against negative EBIDTA of Rs.489.64million last yesr. Loss after Tax was Rs.11.12 millions as at 31st March 2017 (Rs.931.61million last year). The company is effectively taking steps to curtail the expenses andincreasing the efficiency on all fronts.
Loan accounts of the company were restructured by Joint Lenders Forum (JLF) with mutualconsent of the company in March 2015 in terms of RBI guidelines after conducting TEV studyby M/s Dun & Bradstreet with cut-off date 01-10-2014 and approved by IndependentEvaluation Committee (IEC) on 11-05-2015. The company complied with all the conditions ofrestructuring scheme including payment of interest till 30-09-2016. But the bankers didnot fulfil the conditions of approved scheme as WC limits were not released by Banks asper TEV report/approved restructuring scheme despite numerous requests/proposals by thecompany to the banks. Consequently the restructuring scheme could not be taken forwardafter 01-10-2016 and the company could not achieve its projections as per TEV report whichhas affected the profitability of the company. JLF meetings were held on 22-12-2016 and22-04-2017 wherein company is eligible for S4A (Scheme for Sustainable Structuring ofStressed Assets) scheme of RBI.
As decided in the Joint Lenders Forum (JLF) meeting the company is in the process ofimplementation of S4A scheme under the RBI guidelines with reference date 21 June 2017.Decision of Joint Lenders Forum to consider the account of Company under S4A schemeof RBI speaks about the confidence of the lenders in the ability of management torun the company profitably. Management of Company extend thanks to the lenders forreposing the confidence the Management of Company. Under S4A scheme of RBI the debt ofthe company will be bifurcated into two parts sustainable debt which cannot beless than 50% of existing debt and will have to be serviced. The other unsustainable partof the loan can either be converted into long term (15-20 years) Optionally ConvertibleDebentures/Redeemable
Optionally Convertible Preference Shares/Equity with clearly spelt out terms. Lendersget 180 days from Reference Date to formulate the resolution plan andimplement the same along with necessary internal approvals. Decision of lenders toconsider the accounts of the company under S4A scheme of RBI is a positive move towardssustained long term growth for the company as it will result in the reduction ofsubstantial cost of debt servicing which will have positive impact on all the stakeholderssuch as shareholders farmers commission agents Government bankers etc.
A detailed discussion on the business performance and future outlook has been given inManagement Discussion and Analysis (MDA).
Consolidated financial statements
Further pursuant to Accounting Standard-21 (AS-21) issued by the Institute of CharteredAccountants of India Consolidated
Financial Statements presented in this Annual Report include financial information ofthe subsidiary companies i.e Punjab Greenfield Resources Limited M/s Lakshmi Green PowerLimited and M/s Green Energy and Foods Pte. Ltd Singapore.
Change in nature of Business
During the year under review there was no change in the nature of Business.
Expansion & Modernization
During the period under review certain balancing equipments were added in the Plantsto improve the quality and efficiency. The Company has set up state of art modernCorporate Office at Khamanon to meet the current and future need of the administrationoffice.
Performance of Subsidiaries
The following may be read in conjunction with the Consolidated Financial Statementsprepared in accordance with Accounting Standard 21. Shareholders desirous of obtaining thereport and accounts of your Companys subsidiaries may obtain the same upon request.Further the report and accounts of the subsidiary companies will also be available on
Companys website www.lakshmigroup.in in a downloadable format.
Punjab GreenfieldResources Limited a wholly owned subsidiary Company presentlyacts as a sales and marketing arm of LEAF and has been engaged in buying the finished ricevarieties from LEAF warehousing them and distributing them in various parts of thecountry using its network of brokers dealers and distributors.
M/s Lakshmi Green Power Limited is wholly owned subsidiary of your company. Onbeing operational this company shall significantly contribute to generate power.
M/s Green Energy and Foods Pte. Ltd Singapore is subsidiary company and it is yetto start its operations.
There is no associate Company and joint venture of the Company.
Material Subsidiaries - The Board of Directors of the Company in its meetingapproved the policy for determining Material Subsidiaries. At present the Company does nothave any Material Subsidiary. The Policy on Material Subsidiary has been posted on thewebsite of the Company at the following link: http://lakshmigroup.in/downloads/Policyonmaterialsubsidiaries.pdf
The statement containing the salient feature of the financialstatement of aCompanys subsidiaries as per first proviso to sub-section (3) of section 129 in FormAOC-1 is attached as Annexure-1 and forms part of Annual Report.
Transfer to Reserves
The Company has not transferred any amount to the General Reserves during the periodyear under review.
Taking into account loss incurred by the Company Board of directors of the Company donot recommend any dividend for the year ended 31st March 2017.
Directors and KMP
In accordance with the provisions of Section 152 of the Act read with the Articles ofAssociation of the Company Mr. Janak Raj Singh will retire by rotation at the AGM andbeing eligible offers himself for re-appointment. Your Board has recommended hisre-appointment.
Mr. Balbir Singh Uppal is being re-appointed as Managing Director of the companysubject to the approval of the shareholders in the ensuing Annual General Meeting for aperiod of three years w.e.f. 1st September 2017.
Brief resume/details of the Directors who are to be re-appointed as mentioned abovehave been furnished alongwith the Explanatory Statement to the Notice of the ensuingAnnual General Meeting.
During the year due to critical illness Mr. Sukhdeep Singh resigned from the post ofChief Financial Officer w.e.f. 14.02.2017 and Mr. P. C. Jain was appointed as new ChiefFinancial Officer of the company w.e.f. 14.02.2017.
The detailed section on Board of Directors is given in the separate sectiontitled Corporate Governance Report forming part of this Annual Report.
Declaration of Independence
The Board has received declarations from all the Independent Directors of the Companyconfirming that they meet with the criteria of independence as prescribed undersub-section (6) of Section 149 of the Companies Act 2013 and regulation 16(b) ofSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations in the Act and the Rules made thereunder and are 2015.
Number of Board Meetings
During the year ended 31st March 2017 eleven meetings of the Board were held on April272016 May 09 2016 May 17 2016 July 202016 August 11 2016September 14 2016October 03 2016 November 14 2016 November 21 2016December 14 2016 and February 142017.
Mechanism for evaluation of board committees and individual directors
Pursuant to the provisions of the Companies Act 2013 and regulation 17(10) of SEBI(LODR) regulations 2015 a structured procedure was adopted after taking intoconsideration the various aspects of the Boards functioning composition of theBoard and its various Committees execution and performance of specific dutiesobligations and governance.
The performance evaluation of the Independent Directors was completed in time. Theperformance evaluation of the Chairman and the Non-Independent Directors was carried outby the Independent Directors. The Board of Directors expresses its satisfaction with theevaluation process.
The Nomination and Remuneration ("NR") Committee has laid down propercriteria and procedure to evaluate and scrutinize performance of the Chairperson each(including Executive Non-Executive and Independent directors) of the Board as a wholeand its Committee.
The criteria include different aspects covered under Administrative StrategicOperational and Compliance headings. As per laid down procedure the Independent Directorsheld a separate meeting to review the performance of the Chairperson of the Company aftertaking into account the views of Executive and Non Executive Directors. The substantialand continuing contribution of the Chairperson in the growth of the Company has beenhighly commended. The Independent Directors also reviewed performance of every Executiveand Non Executive Director of the Board. The performance evaluation of each IndependentDirector was done by the entire Board (except the Independent Directors being evaluated).
The performance of each committee has been evaluated by its members and found to behighly satisfactory.
On the basis of this exercise the NR Committee and the Board after recognising theimportant contribution being made by each Independent Directors have decided that allIndependent Directors should continue to be on the Board.
Familiarisation programme for Independent Directors
During FY 2016-17 the Board including all Independent Directors were explained abouttheir roles rights and responsibilities in the Company through detailed presentations asper the Companies Act 2013 and SEBI (Listing Obligations And Disclosure Requirements)Regulations 2015.
The Board including all Independent Directors was provided with relevant documentsreports and internal policies to enable them to familiarise with theCompanysproceduresandpracticesfromtimetotimebesidesregularbriefingby the members ofthe Senior Leadership Team.
The Familiarisation programme for Independent Directors is posted on the websitewww.lakshmigroup.in and can be viewed at the following link-http://lakshmigroup.in/downloads/Familiarisation_program_for_Independent_Directors.pdf
Your Company has set up a Nomination and Remuneration (NR) Committeepursuant to Section 178 of the Act which has formulated a policy for DirectorsAppointment and remuneration for Directors KMP and other employees. They have alsodeveloped the criteria for determining qualifications positive attributes andindependence of a Director including making payments to Non-Executive Directors.
NR Committee takes into consideration the best remuneration practices being followed inthe industry while fixing appropriate remuneration packages. Further the compensationpackage for Directors Key Managerial Personnel Senior Management and other employees aredesigned based on the following set of principles:
Aligning key executive and Board remuneration with the long term interests ofthe Company and its shareholders;
Minimise complexity and ensure transparency;
Link to long term strategy as well as annual business performance of theCompany;
Promotes a culture of meritocracy and is linked to key performance and businessdrivers; and
Reflective of line expertise market competitiveness so as to attract the besttalent.
Your directors affirm that the remuneration paid to employees KMP and Directors is asper the Remuneration Policy of the Company. The Remuneration Policy of the Company isposted on the website www.lakshmigroup.in and can be viewed at the following Linkhttp://lakshmigroup.in/Investor.html
Directors Responsibility Statement
Your Directors make the following statement in terms of Section 134(3)(c) & (5) ofthe Act which is to the best of their knowledge and belief and according to theinformation and explanations obtained by them:
1. that in the preparation of the annual accounts for the Financial Year ended March31 2017 the applicable accounting standards have been followed along with properexplanation relating to material departures;
2. that appropriate accounting policies have been selected and applied consistently andjudgments and estimates that are reasonable and prudent have been made so as to give atrue and fair view of the State of Affairs as at March
312017 and of the Profit/Loss of your Company for the Financial Year ended March 312017;
3. that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of your Company and for preventing and detecting fraud and other irregularities;
4. that the annual accounts for the Financial Year ended March 31 2017 have beenprepared on a going concern basis;
5. that the Directors have laid down Internal Financial Controls which were followed bythe Company and that such
Internal Financial Controls are adequate and were operating effectively; and
6. that the Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems are adequate and operatingeffectively.
Management Discussions and Analysis Report
Management Discussions and Analysis Report as required pursuant to Schedule V ofSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015 is annexed and forms part of this Report.
The Company has complied with the Corporate Governance requirements as stipulated inSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015. A separate section on Corporate Governance along with a certificatefrom the Auditors of the Company confirmingthe compliance is annexed and forms part ofthis Report.
The Board has also evolved and adopted a Code of Conduct based on the principles ofGood Corporate Governance and best management practices being followed globally. The Codeis available on the website of the Company www. lakshmigroup.in.
Transfer to Investor Education & Protection Fund
During the year under review there was no amount of unpaid / unclaimed dividend due tobe transferred to "Investor Education and Protection Fund" (IEPF) established bythe Central Government.
However unpaid/unclaimed dividend of Rs.438775/- in respect of 2008-09 (FinalDividend) was transferred to "Investor Education and Protection Fund" (IEPF)established by the Central Government in May 2017.
Hereunder are the details of Dividends paid by the Company and their respective duedates of transfer of unpaid or unclaimed dividends to IEPF:
|Dividend for the year ||Date of Declaration of Dividend ||Due date for transfer to IEPF |
|2009-10 (Final Dividend) ||26/03/2011 ||01/05/2018 |
|2010-11 (Final Dividend) ||28/03/2012 ||03/05/2019 |
|2011-12 (Final Dividend) ||28/03/2013 ||03/05/2020 |
|2012-14 (Final Dividend) ||03/05/2013 ||08/06/2020 |
Material Changes and commitments
Save as mentioned elsewhere in this Report no material changes and commitmentsaffecting the financial position of the Company have occurred between the end of thefinancial year of the Report.
Changes in Capital Structure
Issuance/allotment of convertible warrants
The company has allotted 7140000 convertible warrants (3480000 warrants of series-1and 3660000 warrants of Series-2) on 17/05/2016 on preferential basis to M/s GaneshayOverseas Industries Limited Promoters Group entity at an exercise price ofRs.17.50 per underlying equity share of the face value of Rs.2 each in terms of thein-principle approvals given by BSE and NSE. As per SEBI (ICDR) Regulations 25% upfrontamount was received by the company from the allottee before allotment of warrants.
The company has allotted 3480000 equity shares of Rs.2/- on 20-07-2016 on conversionof 3480000 warrants of Series-1 to M/s Ganeshay Overseas Industries Limited(Promoters Group entity).
Except the above matter there has not been any change in capital structure. AuthorisedCapital of the Company is Rs.200000000 and paid up capital was Rs.139940000/- as on31-03-2017 and as on date of this report.
Particulars of loans guarantees and investments u/s 186
The details of the investments made by the Company are in Note No.14 of the auditedfinancial statements. The Company has not made any loans to any persons within the meaningof Section 186 and has also not given any guarantees within the meaning of that section.
Related Party Transactions
During FY 2016-17 all contracts/arrangements/transactions entered into by your Companywith related parties under Section 188(1) of the Act were in the ordinary course ofbusiness and on an arms length basis. During FY 2016-17 your Company has enteredinto certain transactions with related parties which could be consideredmaterial as per Regulation 23 of the Securities Exchange Board of India(Listing Obligations & Disclosure Requirements) Regulations 2015 and thesetransactions are reported in form AOC-2 as Annexure-6.
Further during FY 2016-17 there were no materially significant related partytransactions made by the Promoters Directors Key Managerial Personnel or otherdesignated persons which might have potential conflict with the interest of the Companyat large.
All related party transactions are placed before the Audit Committee for its approval.There was no matter requiring approval of the Board. During FY under review the AuditCommittee has approved transactions through the Omnibus mode in accordance with theprovisions of the Act and Listing Regulations. Related party transactions were disclosedto the Board on regular basis as per IND AS 24. Details of related party transactions asper IND AS 24 may be referred to in Note 14 of the Standalone Financial Statements.
The policy on Related Party Transactions as approved by the Board is uploaded on theCompanys website at www. lakshmigroup.in and can be viewed at the following link:http://lakshmigroup.in/downloads/Relatedpartytransactionpolicy. pdf
None of the Directors has any pecuniary relationships or transactions vis--vis theCompany except the remuneration received by respective directors.
Risk Management System
Your Company follows a comprehensive system of Risk Management and has adopted aprocedure for risk assessment and its minimisation. It ensures that all the risks aretimely defined and mitigated in accordance with the Risk Management Process includingidentification of elements of risk which might threaten the existence of the Company. YourCompany constituted a Risk Management Committee which intensely monitors the RiskManagement Process in the Company and the same is periodically reviewed by the Board.
Vigil Mechanism/ Whistle Blower Policy
Your Company has in place a well formulated Vigil Mechanism/ Whistle Blower Policy todeal with instance of fraud and mismanagement if any. The policy enables the employeesDirectors and other stakeholders to raise their concern. There was no incident when theaccess to the Audit Committee was denied to any employees with respect to vigil mechanism.The policy is posted on the website of the Company at www. lakshmigroup.in at thefollowing link: http://lakshmigroup.in/downloads/VIGIL_MECHANISM.pdf