Your Directors have pleasure in presenting their twenty fifth Annual Report on thebusiness and operations of the Company and the financial statements for the year ended 31stMarch 2019.
Company's financial performance for the year under review along with previous year'sfigures are given hereunder:.
|PARTICULARS ||31.03.2019 ||31.03.2018 |
| ||(Rs. in '000) ||(Rs. in '000) |
|Revenue from operations ||1748050 ||1667333 |
|Other Income ||10232 ||6268 |
|Operating Profit before Finance Costs || || |
|Depreciation & Tax ||180538 ||210342 |
|Less: Depreciation ||61908 ||60170 |
|Less : Finance Costs ||22706 ||66339 |
|Profit before Tax ||95924 ||83833 |
|Provision for Tax ||23100 ||20124 |
|Deferred Tax ||(2902) ||4199 |
|Net Profit for the year ||75726 ||59510 |
|Other comprehensive income ||1032 ||(433) |
|Total comprehensive income for the year ||76758 ||59078 |
|Add: Balance brought forward from previous year ||306592 ||258439 |
|Profit available for appropriation ||383350 ||317517 |
|Appropriation of Profits || || |
|Transfer to General Reserve ||1477 ||- |
|Proposed Dividend ||9578 ||9078 |
|Corporate Dividend Tax ||1969 ||1848 |
|Balance carried over to balance sheet ||370326 ||306591 |
The Company achieved a total turnover of Rs. 174.80 crores as against a turnover of Rs.166.73 crores in the previous year. The Company's profit before tax is Rs. 9.59 croresduring the year as compared to Rs. 8.38 crores in the previous year increase of 14.44%over the last year. The Company earned a net profit of Rs. 7.57 crores as against a netprofit of Rs. 5.95 crores in the previous year.
STATE OF COMPANY'S AFFAIRS
During the financial year the company has entered into an agreement with M/s.WatsunInfrabuild Private Limited for purchase of power and has utilized 75.33 lacs units at arate of Rs. 5.08 per unit and this will help us to reduce the energy cost.
To enhance the spinning capacity the company has entered into conversion agreementwith M/s New Modern Spinning Textiles for conversion of fiber into yarn of 4608 spindles.
The Company has transferred an amount of Rs. 14.77 Lakhs to the General Reserve out ofthe amount available for appropriations and the remaining amount of Rs. 3703.26 Lakhs hasbeen retained in the Profit and Loss Account.
Your Directors are pleased to recommend a dividend of Rs.1/- per equity share (20%) offace value of Rs. 5/- each (Previous year Rs. 1/- per equity share (20%) of face value ofRs. 5/- each). If the dividend as recommended above is declared by the Members at theAnnual General Meeting the total outflow towards dividend on Equity Shares for the yearwould be Rs. 115.47 Lakhs (including dividend tax) (Previous Year Rs. 115.46 Lakhs)
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
There is no amount required to be transferred to investor education and protection fundin accordance with the relevant provisions of the Companies Act 2013 and rules madethereunder.
The paid up Equity Share Capital as on 31st March 2019 was Rs.47888000/-. During the year under review the Company has not issued any shares.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule12 of the Companies (Management and administration) Rules 2014 is furnished in Annexure1 and is attached to this Report.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Details of the composition of the Board and its Committees namely Audit CommitteeNomination and Remuneration Committee Corporate Social Responsibility CommitteeStakeholders Relationship Committee and of the Meetings held and attendance of theDirectors at such Meetings are provided in the Corporate Governance Report which forms apart of this Report.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively. The Company has duly complied with Secretarial Standards issued by Instituteof Company Secretaries of India on meeting of the Board of Directors (SS-1) and GeneralMeetings (SS-2).
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed;
(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 and ofthe profit 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;
(e) the internal financial controls to be followed by the company were laid down andsuch internal financial controls were adequate and were operating effectively; 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.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THECOMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.
During the period under review no incident of frauds was reported by the StatutoryAuditors pursuant to Section 143(12) of the Companies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under Section 149(6) of theCompanies Act 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
Based on the confirmation / disclosures received from the Directors and on evaluationof the relationships disclosed the following Non-Executive Directors are Independent:
Sri. Deepak Padamshi Malani Sri. Vasthupal Rajinikant Mehta and Sri. MeenakshiSundaram Rajkumar.
In compliance with the requirements of the Listing Regulations the Company has put inplace a familiarization programme for the Independent Directors to familiarize them withtheir roles rights and responsibilities as Independent Directors the working of theCompany nature of the industry in which the Company operates business model and so on.The same is also available on the Company website at www.lambodharatextiles.com.
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES
The Company pursuant to the provisions of Section 178 of the Companies Act 2013 and interms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy onNomination and Remuneration for its Directors Key Managerial Personnel and seniormanagement which inter-alia provides the diversity of the Board and provides the mechanismfor performance evolution of the Directors. The details of this policy are furnished in Annexure-2and forms part of this report and can also be accessed on the Company's website athttps://www.lambodharatextiles.com/files POLICY%20ON%20NOMINATION%20AND%20REMUNERATION.pdf.
M/s. Jain & Mohan Chartered Accountants Coimbatore were appointed as statutoryauditors for a period of 5 consecutive years at the 23rd annual general meetingof the Company held on 22nd September 2017 subject to ratification by theshareholders at every annual general meeting. Consequent to the amendments made in theprovisions of Section 139 of the Companies Act 2013 the members at their 24thAnnual General Meeting has approved to continue the appointment of M/s. Jain & MohanChartered Accountants Coimbatore as statutory auditors for a period of 5 consecutiveyears till the conclusion of the 28th Annual General Meeting to be held in theyear 2022 without ratification. Hence no resolution for ratification of appointment ofstatutory auditors is included in the Notice convening the 25th Annual GeneralMeeting. The Company has received a certificate from the statutory auditors to the effectthat their appointment would be in accordance with the provisions of Section 141 of theCompanies Act 2013.
As per the requirement of Central Government and pursuant to Section 148 of theCompanies Act 2013 read with the Companies (Cost Records and Audit) Rules 2014 asamended from time to time your Company has been carrying out audit of cost records.
The Board of Directors on the recommendation of Audit Committee has appointed M/s.C.S.Hanumantha Rao & Co. Cost Accountants (Firm Regn. No.000216) as Cost Auditor toaudit the cost accounts of the Company for the financial year 2019-2020. As required underSection 148(2) of the Companies Act 2013 a resolution seeking member's approval for theremuneration payable to the Cost Auditor forms part of the Notice convening the AnnualGeneral Meeting for their ratification.
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 Mr.M.D.Selvaraj FCS of MDS &Associates Practicing Company Secretary carried out the Secretarial Audit of the Companyfor the year ended 31st March 2019. The Secretarial Audit Report is annexed as Annexure- 3. The Auditors' Report for the financial year ended 31st March 2019does not contain any qualification reservation adverse remark or disclaimer.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013:
Particulars of the investments made by the Company as at 31st March 2019 are given inthe Notes forming part of the Financial Statements. During the Financial Year underreview the Company made an investment of Rs.29.46 lakhs in 294570 equity shares ofM/s.Watsun Infrabuild Private Limited in order to enable the Company to purchaseelectricity from them under group captive arrangement. The Company has not given any loansor guarantees or provided any security to any person or other bodies corporate undersection 186 of the Companies Act 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All Related Party Transactions that were entered into during the financial year were onan arm's length basis in the ordinary course of business and were in compliance with theapplicable provisions of the Companies Act and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The particulars of contracts and arrangement with relatedparties referred in section 188(1) of the Companies Act 2013 in prescribed Form AOC-2 isappended as Annexure - 4 to the Directors Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no material changes and commitments if any affecting the financialposition of the Company which have occurred between the end of the financial year of theCompany to which the financial statements relate and the date of the report.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy technology absorption ForeignExchange Earnings and outgo as required under Section 134 (3) (m) of the Companies Act2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 is furnished in Annexure-5and is attached to this report.
RISK MANAGEMENT POLICY
The Company has a structured Risk Management Policy. The risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking. The Company has laid down procedures to inform the Audit Committee as well as theBoard of Directors about risk assessment and management procedures and status. Theseprocedures are periodically reviewed to ensure that the executive management monitors andcontrols risks.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIALRESPONSIBILITY INITIATIVES
As a part of its initiative under the "Corporate Social Responsibility" (CSR)drive the Company has undertaken projects in the area of promoting education. Theseprojects are in accordance with Schedule VII of the Companies Act 2013 and the Company'sCSR policy. The Report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is annexed as Annexure - 6 and forms an integralpart of this Report. The CSR Policy may be accessed on the Company's website at https://www.lambodharatextiles.com/files/CSR%20Policy.pdf.
Detailed composition of the CSR Committee number of meetings held during the yearunder review and other related details are set out in the Corporate Governance Reportwhich forms a part of this Report.
The Company was required to spend Rs. 16.34 Lakhs on CSR activities during theFinancial Year 2018-19 being 2% of the average net profits of the three immediatelypreceding financial years and the Company has spent Rs. 16.87 lakhs during the currentfinancial year.
ANNUAL PERFORMANCE EVALUATION
In accordance with the evaluation criteria and procedure suggested by the Nominationand Remuneration Committee the Board of Directors evaluated the performance of the Boardhaving regard to various criteria such as Board composition Board processes Boarddynamics etc. The Independent Directors at their separate meetings also evaluated theperformance of Non-Independent Directors and the Board as a whole based on variouscriteria. The performance of each Independent Director was evaluated by the entire boardof directors on various parameters like engagement leadership analysis decision makingcommunication governance etc. The Board and the Independent Directors were of theunanimous view that performance of the Board of Directors as a whole was satisfactory. Theperformances of all the Committees were evaluated by the Board having regard to variouscriteria such as committee composition committee processes committee dynamics degree offulfillment of key responsibilities effectiveness of meetings etc. The Board was of theunanimous view that all the committees were performing their functions satisfactorily.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2019.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
Appointment of Whole-time Directors:
During the year under review the Board of Directors had approved the appointment ofMr. Ramesh Shenoy Kalyanpur (DIN: 06392237) as Additional Director and Whole-Time Directorcum Chief Financial Officer and Mr. Narayanasamy Balu (holding DIN: 08173046) asAdditional Director and Whole-Time Director of the Company with effect from 11thJuly 2018 and had obtained the approval of the members at the Annual General Meeting heldon 20th September 2018 in accordance with Section 196(4) of the Companies Act2013.
Resignation of Managing Director and Whole Time Director:
Further Mr.R.Santossh (holding DIN: 00790493) Managing Director of the Company andMrs. Vimala Radhakrishnan (holding DIN: 00813706) Whole-time Director of the Company hadresigned from the board w.e.f. 11th July 2018 due to health issues and agefactor respectively. The Board places on record its appreciation for the invaluablecontributions made by them during their tenure as Managing Director and Whole-timeDirector of the Company.
Re-appointment of Whole Time Director:
Further the Board of Directors had approved the re-appointment of Mrs. Bosco Giulia(DIN: 01898020) as the Whole-time Director of the Company for a further period of 5 yearswith effect from 28th September 2018 and had obtained the approval of themembers at the Annual General Meeting held on 20th September 2018 inaccordance with Section 196(4) of the Companies Act 2013.
Re-appointment of Independent Directors:
Sri. Deepak Padamshi Malani (DIN: 02400928) Sri. Vasthupal Rajinikant Mehta (DIN:02368358) and Sri. Meenakshi Sundaram Rajkumar (DIN: 06935422) were appointed asIndependent Directors of the Company pursuant to Section 149 of the Companies Act 2013for the first term of 5 years and will hold office upto 10th September 2019.Considering their knowledge expertise and experience in their respective fields and thesubstantial contribution made by these Directors during their tenure as an IndependentDirector since their appointment the Nomination & Remuneration Committee and theBoard has recommended the re-appointment of these Directors as Independent Directors onthe Board of the Company to hold office for the second term of five consecutive yearscommencing from 11th September 2019 upto 10th September 2024subject to the approval of the members by way of passing a Special Resolution at theensuing Annual General Meeting.
The Company has received declaration from all these Directors that they continue tofulfill the criteria of independence as prescribed under Section 149(6) of the CompaniesAct 2013 as well as Regulation 16(1)(b) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (including statutory re-enactment thereof for the timebeing in force). In terms of the provisions of Section 160(1) of the Companies Act 2013the Company has received Notice from a Member signifying his intention to propose thecandidature for the reappointment of Sri. Deepak Padamshi Malani Sri. VasthupalRajinikant Mehta and Sri. Meenakshi Sundaram Rajkumar for the office of IndependentDirectors.
The Board of Directors recommends the re-appointment of the Independent Directors byway of Special Resolution(s).
Director liable to retirement by rotation:
Pursuant to the provisions of Section 152 of the Companies Act 2013 Mr.BabaChandrasekar Ramakrishnan (DIN: 00125662) is due to retire by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. The membersare requested to consider his re-appointment.
Key Managerial Personnel
Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203of the Companies Act 2013 are Mrs. Bosco Giulia and Mr. Narayanasamy Balu Whole-timeDirectors Mr. Ramesh Shenoy Kalyanpur Whole-time Director cum Chief Financial Officerand Mrs. Priyadarshini. V Company Secretary.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint Venture or Associate Company.
The Company has not accepted any deposit within the meaning of Chapter V of theCompanies Act 2013 and the Rules framed there under and there are no outstanding fixeddeposit from the public as on 31st March 2019.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE
There is no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and company's operation in future.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an adequate system of internal controls. It has documentedpolicies and procedures covering all financial and operating functions and processes.These have been designed to provide a reasonable assurance with regard to maintaining ofproper accounting controls for ensuring reliability of financial reporting monitoring ofoperations protecting assets from unauthorized use or losses and compliance withregulations.
INTERNAL FINANCIAL CONTROL
The company has a proper and adequate Internal Financial Control System to ensure thatall assets are safeguarded and protected against loss from unauthorized use or dispositionand transactions are authorized recorded and reported correctly.
Internal Financial Controls is exercised through documented policies guidelines andprocedures. It is supplemented by an extensive program of internal audit conducted by anexternal internal auditor appointed by the Board. The audit observation and correctiveaction if any taken thereon are periodically reviewed by the Audit Committee to ensurethe effectiveness of the Internal Financial Control System.
PARTICULARS OF EMPLOYEES AND REMUNERATION
The requisite details relating to ratio of remuneration percentage increase inremuneration etc. as stipulated under Section 197(12) and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed as Annexure- 7 to this Report.
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not apply to the Company as there were no employeeswho are in receipt of remuneration in the aggregate at the rate of not less than Rs.10200000/- if employed throughout the year or Rs. 850000/- per month if employed forpart of the year
Audit Committee of the Company meets the requirements of Section 177 of the CompaniesAct 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details of the composition of the Audit Committee as required underthe provisions of Section 177(8) of the Companies Act 2013 are given in the CorporateGovernance Report which forms part of this annual report. During the year under reviewthe Board has accepted all the recommendations of the Audit Committee.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behaviour actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis affirmed that no personnel of the Company has been denied access to the AuditCommittee.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has in place a policy against Sexual Harassment at work place in line withrequirements of the Sexual Harassment Women at Workplace (Prevention Prohibition andRedressal) Act 2013. Internal Complaint Committee has been setup to redress complaintsreceived regularly. There was no compliant received from any employee during the financialyear 2018-19 not any complaint remains outstanding for redressal as on 31st March 2019
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report on Corporate Governanceas required under regulation 34 of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 forms part of the AnnualReport.
LISTING OF SHARES
Equity shares of the Company was continued to be listed on National Stock Exchange ofIndia Limited (NSE).
The Board of Directors express their appreciation for the contribution made by theemployees customers and bankers for the support extended by them during the year underreview.
| ||For and on behalf of the Board |
| ||Meenakshi Sundaram Rajkumar |
|Place : Coimbatore ||Chairman |
|Date : 29.05.2019 ||(DIN : 06935422) |