The Members of
LIPPI SYSTEMS LIMITED
Your directors have pleasure in presenting their 26th Annual Report together with theAudited Annual accounts for the year ended on 31" March 2019.
|FINANCIAL RESULTS: || ||(Rs in Lacs) |
|Particulars: ||2018-19 ||2017-18 |
|Net Sales ||1594.72 ||1605.70 |
|Other Income ||105.68 ||114.04 |
|Finance Cost ||104.62 ||92.59 |
|Depreciation ||148.60 ||149.36 |
|Income Tax Provision ||21.41 ||33.57 |
|Deferred Tax Liability ||(16.30) ||64.42 |
|Net Profit ||79.64 ||96.02 |
Your directors are pleased to report that for the year under review your Company hasbeen able to achieve a net turnover of Rs. 15.95 crores as compared to Rs. 16.06 croresfor the previous year. Your company could achieve a net profit of Rs. 79.64 lacs asagainst a net profit of Rs. 96.02 lacs for the preceding year.
Your directors expect better results for the current year.
The Authorised Share Capital of the Company as on March 31 2019 was Rs 100000000(Rupees Ten crores) divided intol0000000 (One crores ) equity shares of Rs. 10 each.
The paid up share capital of the Company as on March 31 2019 was Rs 70000000(Rupees Seven crores only) divided into 7000000 (Seventy lakhs ) equity shares of Rs 10each.
In view of the marginal profits for the year under review your directors have notrecommended any dividend for the year under report.
During the year under review your company has not accepted any fixed deposits from thepublic under section 73 of companies act 2013 and therefore no information is requiredto be furnished in respect of outstanding deposits.
VIGILMECHANISM/WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act 2013 and as per SEBI (ListingObligation and Discourse Requirements) Regulations 2015 the Company has formulated aWhistle Blower Policy to establish a vigil mechanism for directors and employees of theCompany. The purpose and objective of this Policy is to provide a framework to promoteresponsible and secure whistle blowing. It protects the employees wishing to raise aconcern about serious irregularities within the Company. The details of the Whistle BlowerPolicy are posted on the website ( www.lippisystems.com ) of the Company.
The Company has complied with the prov1Sions of revised' SS-1 SecretarialStandards on meetings of the Board of Directors which has come into effect from October01 2017 and also SS- 2 Secretarial Standard on General Meetings during the year.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS:
The Company has established a well-defined process of risk management wherein theidentification analysis and assessment of the various risks measuring of the probableimpact of such risks formulation of risk mitigation strategy and implementation of thesame takes place in a structured manner. Though the various risks associated with thebusiness cannot be eliminated completely all efforts are made to minimize the impact ofsuch risks on the operations of the Company. Necessary internal control systems are alsoput in place by the Company on various activities across the board to ensure that businessoperations are directed towards attaining the stated organizational objectives withoptimum utilization of the resources. Apart from these internal control procedures awell-defined and established system of internal audit is in operation to independentlyreview and strengthen these control measures which is carried out by a reputed firm ofChartered Accountants. The Audit Committee of the Company regularly reviews the reports ofthe internal auditors and recommends actions for further improvement of the internalcontrols. The Risk Management policy is posted on the website of the Company.
RELATED PARTY TRANSACTIONS:
The Company has entered into related party transaction with relative of promoter Ms.Shashiben G. Gupta (Wife of Mr. Nandlal J. Agrawal MD & Chairman) during thefinancial year 2018-19 the details of which are given in the notes forming parts ofFinancial Statements. All Related Party Transactions entered into are on an arm's lengthbasis. There are no materially significant Related Party Transactions made by the Companywith promoters directors Key Managerial Personnel or other designated persons which mayhave potential conflict with the interests of the Company at large.
On the recommendation of the Audit Committee the Board of Directors has adopted apolicy on Related Party Transactions which is also uploaded on the website of the Company( www.lippisystems.com ) under the head of Investor'. The Policy envisages theprocedure governing related party transactions required to be followed to ensurecompliance with the applicable laws and regulations as well as to ensure that the RelatedParty Transactions are managed and disclosed in accordance with the strict legal andaccounting requirements.
A statement of all related party transactions is presented before the Audit Committeeon
a quarterly basis specifying the nature value and terms &conditions of thetransactions. The statement is supported by a certificate from the CEO/ CFO.
None of the Directors has any pecuniary relationships or transactions vis-a-vis theCompany.
MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:
Management's Discussion and Analysis Report for the year under review as stipulatedunder SEBI (Listing Obligation and Discourse Requirements) Regulations 2015 is presentedin a separate section forming part of the Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators/Courts whichwould impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIALSTATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the companyhave occurred between the end of the financial year of the company to which the financialstatements relate and the date of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees or investments covered under theprovisions of section 186 of the Companies Act 2013 during the Financial Year 2018-19
TRANSFER TO RESERVES:
The Company has transferred current year's profit of Rs. 7963758/- to the Reserve &Surplus and the same is in compliance with the applicable provisions prescribed under theCompanies Act 2013.
Ms. Swetal Sapra was appointed as an Additional Woman Director in the Board ofDirectors Meeting held on 14.08.2019 and it is proposed to appoint her as WomanIndependent Director for the period of5 years from 14.08.2019.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Nandlal J. Agrawal (DlN: 00336556) retires by rotation andis eligible for reappointment.
(iii) Declarations by Independent Directors
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 and SEBI(Listing Obligation and Discourse Requirements) Regulations 2015.
(iv) Board Evaluation
In compliance with the provisions of the Companies Act 2013 and as per SEBI (ListingObligation and Discourse Requirements) Regulations 2015 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Nomination& Remuneration Committee. The mannerin which the evaluation has been carried out has been explained in the CorporateGovernance Report.
(v) Nomination & Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection appointment and remuneration of Directors and KeyManagerial Personnel including criteria for determining qualifications positiveattributes Independence of Directors. More details of the same are given in the CorporateGovernance Report.
(vi) Board Meetings
There are seven members of Board of the Directors of the company of ExecutiveDirectors independent directors and Woman Director. There is no institutional nominee onthe Board. During the year Six Meetings of the Board were held. The Board of directorswasmeton30/05/2018 14/08/2018 02/11/2018 14/11/2018 13/02/2019 and 29/03/2019.
The composition and attendance of Board of Directors are as:
|Name of Director ||Category of Director ||No.of Board Meetings attended ||Attendance at the last AGM ||No. of committee/ membership in which he/she is a member of Chairperson |
|1 Shri Nandlal Agrawal (DIN:00336556) ||Managing Director -Chairman ||6 ||Yes ||None |
|2 Shri Minesh Shah (DIN:00045178) ||Executive ||6 ||Yes ||None |
|3 Shri Kunal Agrawal (DIN: 00169324) ||Executive ||5 ||Yes ||None |
|4 Shri Tirthraj Pandya (DIN:02972285) ||Independent ||6 ||Yes ||Member in One Committee& Chairman in one Committee |
|5 Shri Kamlesh Sharma (DIN: 01563040) ||Independent ||6 ||Yes ||Chairman in one Committee |
|6 Ms Jesal P Shah (DIN:07155395) ||Woman- Independent ||6 ||Yes ||Member in three Committee |
|7 Shri. Govind C. Thakkar (DIN:07531165) ||Independent ||6 ||Yes ||Chairman in one Committee Member in Two Committees |
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNING AND OUTGO:
The information relating to conservation of energy technology absorption and foreignexchange earnings & outgo as required under Section 134(3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is Annexed herewith as"Annexure-A".
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure - B".
Pursuant to Section 177 of the Companies Act 2013 the board of directors hasconstituted an audit committee. The audit committee comprises of Shri Govind C Thakkar(DIN: 07531165) Chairperson Shri Tirthraj Pandya (DIN: 02972285) Member and Smt. JesalbenShah (DIN: 07155395) Member.
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 statements in terms ofthe Section 134(3)of the Companies Act 2013:
(i) that in the preparation of the annual financial statements for the year ended March31 2019 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;
(ii) That such accounting policies as mentioned in the Financial Statements asSignificant Accounting Policies' have been selected and applied consistently andjudgments and estimates have been made that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the company as at March 31 2019 and of theprofit of the Company for the year ended on that date;
(iii) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) That the annual financial statements have been prepared on a going concern basis;
(v) That proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively;
(vi) That proper systems to ensure compliance with the provisions of all applicablelaws were in place and were adequate and operating effectively
(i) Statutory Auditors
M/s. Vijay Moondra & Co. Chartered Accountants Firm (Firm Reg. No.112308W) wasappointed as Statutory Auditor of the company to hold office from 29th September 2017till conclusion of the 28th Annual General Meeting to be held in the year 2022 of thecompany.
(ii) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed M/s Gaurang R. Shah a firm of Company Secretaries in Practice to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewithas "Annexure - C".
Reply to the Observation:
1. The Board noted the fact about the No-Dematerialization of some of the promotersShare Holding and accordingly intimated to the concerned Promoters. The Company hasreceived the positive response from the same promoter and the process of the conversionhas been initiated by them.
(iii) Internal Auditor
Pursuant to provisions of Section 138 of the Companies Act 2013 and the Companies(Accounts) Rules 2014 M/s. ASHOK DHARIWAL &CO. a Firm of Chartered Accountants inPractice is appointed as an Internal Auditors of the Company for the Financial Year2019-20.
PARTICULARS OF EMPLOYEES
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remunerationof Managerial Personnel) Rules 2014 requiring particulars of the employees in receipt ofremuneration in excess of Rs. .60 lacs per year to be disclosed in the Report of Board ofDirectors are not applicable to the Company's none of the employees was in receipt ofremuneration in excess of Rs. .60 lacs during the financial year 2018-19.
The information required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules2014 is given in the Statement annexed herewith as "Annexure -D".
A Report on Corporate Governance along with a Certificate from Practicing CompanySecretary regarding compliance of the conditions of Corporate Governance pursuant toRegulation 34(3) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations2015 is annexed herewith as "Annexure - E".
The Company has complied with the provisions relating to the Constitution of InternalComplaints Committee under the Sexual harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. There was no case filled or registered with theCommittee during the year under the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013. Further Company ensures that there is a healthyand safe environment for every women employee at the workplace and made the necessarypolicies for safe and secure environment for women employee.
The Company is not required to maintain cost records as specified by the CentralGovernment under sub-section (1) of Section 148 of the Companies Act 2013.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company has adequate internal financial control with reference to the financialstatements commensurate with its size and nature of business. These controls include welldocumented procedures covering financial and operational functions. The internalfinancial controls of the Company are adequate to ensure the accuracy and completeness ofaccounting records timely preparation of reliable financial information prevention anddetection of frauds and errors and safe guard against any losses or unauthorized use ordisposal of assets. These controls are assessed on a regular basis by Internal Audit
The Board wishes to place on record their sincere appreciation and acknowledge withgratitude the effort put in and co-operation extended by bankers shareholders employeesat all levels and all other associated persons bodies or agencies for their continuedsupport.
|Place: Ahmedabad ||For and on Behalf of Board of Directors |
|Date: 14/08/2019 ||Nandlal J. Agrawal |
| ||Chairman & Managing Director |
| ||(DIN: 00336556) |
"Annexure : A"
ANNEXURE TO DIRECTOR'S REPORT:
(A) CONVERSATION OF ENERGY:
a) Energy conservation has been an important thrust area for the Company and iscontinuously monitored. The adoption of energy conservation measures has helped theCompany in reduction of cost and reduced machine down-time.
b) Energy conservation is an ongoing process and new areas are continuously identifiedand suitable investments are made wherever necessary.
c) Various on-going measures for conservation of energy include
(i) use of energy efficient lighting and better use of natural lighting
(ii) reduction of energy loss and
(iii) replacement of outdated energy intensive equipment.
d) Total energy consumption and energy consumption per unit of production is given inthe table below:
(A) POWER AND FUEL CONSUMPTION IN RESPECT OF:
|Particulars ||Year ended 2018-19 ||Year ended 2017-18 |
|1) Electricity || || |
|a) Purchased || || |
|Unit Nos. ||1455779 ||1549740 |
|Total Amt. (Rs) ||10204238.93 ||10895059.22 |
|Rate Per Unit (Rs) ||7.01 ||7.03 |
|b) Own Generation || || |
|Through Diesel Generation Set || || |
|Units ||19320 ||9300 |
|Unit per liter of Diesel Oil ||3.45 ||2.91 |
|Cost per Unit ||17.70 ||25.61 |
(B) CONSUMPTION PER UNIT OF PRODUCTION:
|Particulars ||2018-19 ||2017-18 |
|Consumption per square meter of Production Electricity(No. of Units) ||275.04 ||367.56 |
The efforts made towards technology absorption: NA The benefits derived from technologyabsorption: NA The Company has not imported any technology for its products.
The Company has not specific Research and Development Department. However the Companycarries out research and development in several areas including material & processdevelopments towards efficiency improvements quality improvements waste reduction etc.Apart from process improvements the research and development also aims at findingequivalent substitutes of various inputs and packaging materials to have cost savingswithout compromising quality.
The Company has derived benefits of product diversification cost reduction and betterquality as a result of the above efforts.
The research and development is an on-going exercise and suitable efforts will continueto be made in future.
FOREIGN EXCHANGE EARNING AND OUTGO:
The information required to be given in respect of foreign exchanges and outgo isprovided in the notes forming part of accounts. Members are requested to refer the same.