Your Directors have pleasure in presenting their twenty sixth AnnualReport on the business and operations of the Company and the financial statements for theyear ended 31st March 2020.
Company's financial performance for the year under review alongwith previous year's figures are given hereunder:
|Particulars ||31-03-2020 ||31-03-2019 |
| ||(Rs. in'000) ||(Rs. in'000) |
|Revenue from operations ||1746625 ||1748050 |
|Other Income ||10407 ||10233 |
|Operating Profit before Finance Costs Depreciation & ||208380 ||180538 |
|Tax || || |
|Less: Depreciation & Amortization ||72746 ||61908 |
|Less: Finance Costs ||47610 ||22706 |
|Profit before Tax ||88024 ||95924 |
|Provision for Tax ||14662 ||23100 |
|Deferred Tax ||4692 ||(2902) |
|Tax in respect of earlier years ||65 ||-- |
|Net Profit for the year ||68605 ||75726 |
|Other comprehensive income ||(269) ||1032 |
|Total comprehensive income for the year ||68336 ||76758 |
|Add: Balance brought forward from previous year ||370326 ||306592 |
|Profit available for appropriation ||438662 ||383350 |
|Appropriation of Profits || || |
|Transfer to General Reserve ||1919 ||1477 |
|Proposed Dividend ||9578 ||9578 |
|Corporate Dividend Tax ||1969 ||1969 |
|Balance carried over to Balance Sheet ||425197 ||370326 |
The Company achieved a total turnover of Rs. 174.66 Crores as against aturnover of Rs. 174.80 crores in the previous year. The Company's profit before taxis Rs. 8.80 crores during the year as compared to Rs. 9.59 crores in the previous year adecrease of 8.24% over the last year. The Company earned a net profit of Rs. 6.86 croresas against a net profit of Rs. 7.57 crores in the previous year.
STATE OF COMPANY'S AFFAIRS
During the financial year your Company has purchased 2.00 MW Wind Millat a cost of Rs.14.35 Crores. The electricity generated from the said WEG is used forcaptive consumption and takes care of 60% of power requirement at normal level ofoperation.
The Company has transferred an amount of Rs. 19.19 Lakhs to the GeneralReserve out of the amount available for appropriations and the remaining amount of Rs.4251.97 Lakhs has been retained in the Profit and Loss Account.
Your Directors are pleased to recommend a dividend of Rs. 0.50/- perequity share (10%) of face value of Rs. 5/- each (Previous year Rs. 1/- per equity share(20%) of face value of Rs. 5/- each). If the dividend as recommended above is declaredby the Members at the Annual General Meeting the total outflow towards dividend on EquityShares for the year would be Rs. 47.89 Lakhs (Previous Year Rs. 115.47 Lakhs)
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTIONFUND
In terms of Section 124 and 125 of the Companies Act 2013 Unclaimedor Unpaid Dividend relating to the Financial Year 2012-13 is due for remittance duringOctober 2020 to the Investor Education and Protection Fund established by the CentralGovernment.
Pursuant to Section 124(6) of the Companies Act 2013 read withInvestor Education and Protection Fund Authority (Accounting Audit Transfer and Refund)rules 2016 the Company has transferred an amount of Rs. 121906/- to Investor EducationProtection Fund being the Unclaimed Dividend amount for the Financial Year 2011-12.
The paid up Equity Share Capital as on 31st March 2020 wasRs. 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 92read with Rule 12 of the Companies (Management and Administration) Rules 2014 isfurnished in Annexure - 1 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 AuditCommittee Nomination and Remuneration Committee Corporate Social ResponsibilityCommittee Stakeholders Relationship Committee and of the Meetings held and attendance ofthe Directors at such Meetings are provided in the Corporate Governance Report whichforms a part of this Report.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards and that such systems are adequate andoperating effectively. The Company has duly complied with Secretarial Standards issued byInstitute of Company Secretaries of India on meeting of the Board of Directors (SS-1) andGeneral Meetings (SS-2).
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the CompaniesAct 2013 with respect to Directors' Responsibility Statement it is herebyconfirmed that: (a) in the preparation of the annual accounts the applicable accountingstandards had been followed; (b) the Directors had selected such accounting policies andapplied them consistently and made judgements and estimates that are reasonable andprudent so as to give a true and fair view of the state of affairs of the company at theend of the financial year and of the profit of the company for that period; (c) theDirectors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of this Act for safeguarding the assets of thecompany and for preventing and detecting fraud and other irregularities; (d) the Directorshad prepared the annual accounts on a going concern basis; (e) the internal financialcontrols to be followed by the company were laid down and such internal financial controlswere adequate and were operating effectively.
(f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12)OF THE COMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CETNRALGOVERNMENT.
During the period under review no incident of frauds was reported bythe Statutory Auditors pursuant to Section 143(12) of the Companies Act 2013.
DECLARATION BY INDEPENDENT DIRECTORS
Your Company has received declarations from all the IndependentDirectors confirming that they meet the criteria of independence as prescribed underSection 149(6) of the Companies Act 2013 and Regulation 16(1)(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
Based on the confirmation / disclosures received from the Directors andon evaluation of the relationships disclosed the following Non-Executive Directors areIndependent: Sri. Vasthupal Rajinikant Mehta Sri. Deepak Padmashi Malani (resigned w.e.f.13.11.2019) Sri. Meenakshi Sundaram Rajkumar and Sri. Akkalnaicker Veluchamy(appointed w.e.f. 14.08.2019)
Pursuant to Companies (Appointment and Qualification of Directors)Rules 2014 the Certificate of Registration as received from all the IndependentDirectors of the Company were taken on note by the Board of Directors.
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITYEXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORSAPPOINTED DURING THE YEAR
Board of Directors have evaluated the Independent Directors appointed/re-appointed during the year 2019-20 and opined that the integrity expertise andexperience (including proficiency) of the Independent Directors is satisfactory.
In compliance with the requirements of the Listing Regulations theCompany has put in place a familiarization programme for the Independent Directors tofamiliarize them with their roles rights and responsibilities as Independent Directorsthe working of the Company nature of the industry in which the Company operates businessmodel and so on. The same is also available on the Company website athttps://www.lambodharatextiles.com
NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIALPERSONNEL AND OTHER EMPLOYEES
The Company pursuant to the provisions of Section 178 of the CompaniesAct 2013 and in terms of Regulation 19(4) of the SEBI Listing Regulations has formulateda policy on Nomination and Remuneration for its Directors Key Managerial Personnel andsenior management which inter-alia provides the diversity of the Board and provides themechanism for performance evolution of the Directors. The details of this policy arefurnished in Annexure - 2 and forms part of this report and can also be accessed onthe Company's website at https://www.lambodharatextiles. com
M/s. Jain & Mohan Chartered Accountants Coimbatore were appointedas the statutory auditors of the company for a period of five years at the 23rdAnnual General Meeting of the company held on 22nd September 2017. Pursuant tothe amendment of Section 139 of the Companies Act 2013 the company is no longer requiredto seek the ratification of the appointment of the auditor at every annual generalmeeting. The company has received a certificate from Jain & Mohan CharteredAccountants Coimbatore confirming that they are not disqualified from continuing asstatutory auditors of the company.
As per the requirement of Central Government and pursuant to Section148 of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules2014 as amended from time to time your Company has been carrying out audit of costrecords.
The Board of Directors on the recommendation of Audit Committee hasappointed M/s. C.S.Hanumantha Rao & Co. Cost Accountants (Firm Regn.No.000216) as Cost Auditor to audit the cost accounts of the Company for the financialyear 2020-2021. As required under section 148(2) of the Companies Act 2013 a resolutionseeking member's approval for the remuneration payable to the Cost Auditor forms partof the Notice convening the Annual General Meeting for their ratification.
MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THECOMPANIES ACT 2013
Pursuant to the provisions of Section 148(1) of the Companies Act 2013read with Companies (Cost Records and Audit) Rules 2014 the Company was required tomaintain cost records. Accordingly the company has duly made and maintained the costrecords as mandated by the Central Government.
Pursuant to the provisions of Section 204 of the Act and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 Mr.M.D.Selvaraj FCSof MDS & Associates Practicing Company Secretary carried out the Secretarial Audit ofthe Company for the year ended 31st March 2020. The Secretarial Audit Reportis annexed as Annexure - 3.
The Auditors' Report for the financial year ended 31stMarch 2020 does not contain any qualification reservation adverse remark or disclaimer.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186OF THE COMPANIES ACT 2013:
Particulars of the investments made by the Company as at 31stMarch 2020 are given in the Notes forming part of the Financial Statements. The Companyhas not given any loans or guarantees or provided any security to any person or otherbodies corporate under section 186 of the Companies Act 2013.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
All Related Party Transactions that were entered into during thefinancial year were on an arm's length basis in the ordinary course of business andwere in compliance with the applicable provisions of the Companies Act and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The particulars of contractsand arrangement with related parties referred in section 188(1) of the Companies Act 2013in prescribed Form AOC-2 is appended as Annexure - 4 to the Directors Report.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY:
Due to outbreak of Covid-19 pandemic and based on the directives of theGovernment of India Government of Tamilnadu the operations of the Company was suspendedon 24th March 2020 and resumed on 12th May 2020 in phased mannerwith minimal work force by following requisite precautions/guidelines. This has impactedthe Turnover and Profitability of the Company.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO
The information pertaining to conservation of energy technologyabsorption Foreign Exchange Earnings and outgo as required under section 134 (3) (m) ofthe Companies Act 2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014 isfurnished in Annexure - 5 and is attached to this report.
RISK MANAGEMENT POLICY
The Company has a structured risk management policy. The Riskmanagement process is designed to safeguard the organisation from various risks throughadequate and timely actions. It is designed to anticipate evaluate and mitigate risks inorder to minimize its impact on the business. The potential risks are inventorised andintegrated with the management process such that they receive the necessary considerationduring decision making. The Company has laid down procedures to inform the Audit Committeeas well as the Board of Directors about risk assessment and management procedures andstatus. These procedures are periodically reviewed to ensure that the executive managementmonitors and controls risks.
DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITSCORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As a part of its initiative under the "Corporate SocialResponsibility" (CSR) drive the Company has undertaken projects in the area ofpromoting education. These projects are in accordance with Schedule VII of the CompaniesAct 2013 and the Company's CSR policy. The Report on CSR activities as requiredunder the Companies (Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure 6 and forms an integral part of this Report. The CSR Policy may be accessed onthe Company's website at https://www.lambodharatextiles.com Detailed composition ofthe CSR Committee number of meetings held during the year under review and other relateddetails are set out in the Corporate Governance Report which forms a part of this Report.
The Company was required to spend Rs. 18.48 lakhs on CSR activitiesduring the Financial Year 2019-20 being 2% of the average net profits of the threeimmediately preceding financial years and the Company has spent Rs. 20.52 lakhs during thecurrent financial year.
ANNUAL PERFORMANCE EVALUATION
In accordance with the evaluation criteria and procedure suggested bythe Nomination and Remuneration Committee the Board of Directors evaluated theperformance of the Board having regard to various criteria such as Board compositionBoard processes Board dynamics etc. The Independent Directors at their separatemeetings also evaluated the performance of Non-Independent Directors and the Board as awhole based on various criteria. The performance of each Independent Director wasevaluated by the entire board of Directors on various parameters like engagementleadership analysis decision making communication governance etc. The Board andthe Independent Directors were of the unanimous view that performance of the Board ofDirectors as a whole was satisfactory.
The performances of all the Committees were evaluated by the Boardhaving regard to various criteria such as committee composition committee processescommittee dynamics degree of fulfillment of key responsibilities effectiveness ofmeetings etc. The Board was of the unanimous view that all the committees were performingtheir functions satisfactorily.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during thefinancial year ended 31st March 2020.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL: Appointment ofIndependent Director:
On recommendation of Nomination and Remuneration Committee the boardappointed Sri. Akkalnaicker Veluchamy (DIN: 08499764) as an Additional Director(Independent) with effect from 14th August 2019 with an intention to appointhim as the Independent Director. The Company received a notice in writing from a memberunder Section 160(1) signifying his intention to propose the candidature of Sri.Akkalnaicker Veluchamy (DIN: 08499764) for the office of Independent Director and hadobtained the approval of the members at the Annual General Meeting held on 26thSeptember 2019.
The Company has also received declaration from the said Director thathe fulfills the criteria of independence as prescribed under Section 149(6) of theCompanies Act 2013 as well as Regulation 16(1) (b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (including statutory re-enactment thereof forthe time being in force).
Re-appointment of Independent Directors:
Sri. Deepak Padamshi Malani (DIN: 02400928) Sri. Vasthupal RajinikantMehta (DIN: 02368358) and Sri. Meenakshi Sundaram Rajkumar (DIN: 06935422) werere-appointed as Independent Directors of the Company pursuant to Section 149 of theCompanies Act 2013 to hold office for the second term of five consecutive yearscommencing from 11th September 2019 upto 10th September2024 and not liable to retire by rotation.
The Company had received declaration from all these Directors that theycontinue to fulfill the criteria of independence as prescribed under Section 149(6) of theCompanies Act 2013 as well as Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (including statutory re-enactment thereof forthe time being in force).
Cessation of Independent Director:
Sri. Deepak Padamshi Malani (DIN: 02400928) Independent Director ofthe Company resigned with effect from 13th November 2019 due to health issue.The Board places on record its appreciation for the invaluable contributions made by himduring his tenure as Independent Director of the Company.
Other than the above there were no change in the Board of Directors orKey Managerial Personnel of the Company.
Key Managerial Personnel
Key Managerial Personnel of the Company as required pursuant to Section2(51) and 203 of the Companies Act 2013 are Mrs. Bosco Giulia and Mr. Narayanasamy BaluWhole-time Directors Mr. Ramesh Shenoy Kalyanpur Whole-time Director cum Chief FinancialOfficer and Mrs. Priyadarshini. V Company Secretary.
Director liable to retirement by rotation:
Pursuant to the provisions of section 152 of the Companies Act 2013Mr. Ramesh Shenoy Kalyanpur (holding DIN: 06392237) is due to retire by rotation at theensuing Annual General Meeting and being eligible offers himself for re-appointment. Themembers are requested to consider his re-appointment.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES
The Company does not have any Subsidiary Joint venture or AssociateCompany.
The Company has not accepted any deposit within the meaning of ChapterV of the Companies Act 2013 and the Rules framed there under and there are no outstandingfixed deposit from the public as on 31st March 2020.
DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS ORCOURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION INFUTURE
There is no significant and material order passed by the regulators orcourts or tribunals impacting the going concern status and company's operation infuture.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has in place an adequate system of internal controls. Ithas documented policies and procedures covering all financial and operating functions andprocesses. These have been designed to provide a reasonable assurance with regard tomaintaining of proper accounting controls for ensuring reliability of financial reportingmonitoring of operations protecting assets from unauthorized use or losses and compliancewith regulations.
INTERNAL FINANCIAL CONTROL
The company has a proper and adequate Internal Financial ControlSystem to ensure that all assets are safeguarded and protected against loss fromunauthorized use or disposition and transactions are authorized recorded and reportedcorrectly.
Internal Financial Controls is exercised through documented policiesguidelines and procedures. It is supplemented by an extensive program of internal auditconducted by an external internal auditor appointed by the Board. The audit observationand corrective action if any taken thereon are periodically reviewed by the AuditCommittee to ensure the effectiveness of the Internal Financial Control System.
PARTICULARS OF EMPLOYEES AND REMUNERATION
The requisite details relating to ratio of remuneration percentageincrease in remuneration etc. as stipulated under Section 197(12) and Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexedas Annexure 7 to this Report.
The disclosure referred to the Rule 5(2) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 does not apply to the Company as therewere no employees who are in receipt of remuneration in the aggregate at the rate of notless than Rs. 10200000/- if employed throughout the year or Rs. 850000/- per month ifemployed for part of the year
Audit Committee of the Company meets the requirements of Section 177 ofthe Companies Act 2013 and Regulation 18 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. The details of the composition of the Audit Committee asrequired under the provisions of Section 177(8) of the Companies Act 2013 are given inthe Corporate Governance Report which forms part of this annual report. During the yearunder review the 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 formalmechanism to the Directors and employees to report their concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct orethics policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provides for direct access to the Chairmanof the Audit Committee. It is affirmed that no personnel of the Company has been deniedaccess to the Audit Committee.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013.
The Company has in place a policy against Sexual Harassment at workplace in line with requirements of the Sexual Harassment Women at Workplace (PreventionProhibition and Redressal) Act 2013. Internal Complaint Committee has been setup toredress complaints received regularly. There was no compliant received from any employeeduring the financial year 2019-20 not any complaint remains outstanding for redressal ason 31st March 2020.
MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE
The Management Discussion and Analysis Report and the Report onCorporate Governance as required under regulation 34 of the Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015 forms partof the Annual Report.
LISTING OF SHARES
Equity shares of the Company was continued to be listed on NationalStock Exchange of India Limited (NSE).
The Board of Directors express their appreciation for the contributionmade by the employees customers and bankers for the support extended by them during theyear under review.
|Place : Coimbatore ||For and on behalf of the Board |
|Date : 14.08.2020 ||Meenakshi Sundaram Rajkumar |
| ||Chairman |
| ||(DIN : 06935422) |