The Members of
LIPPI SYSTEMS LIMITED
Your directors have pleasure in presenting their 28th Annual Report together with theAudited Annual accounts for the year ended on 31st March 2021.
| || ||(Rs. in Lacs) |
|Particulars: ||2020-21 ||2019-20 |
|Net Sales ||1308.66 ||1391.61 |
|Other Income ||82.48 ||129.54 |
|Finance Cost ||67.64 ||93.90 |
|Depreciation ||144.98 ||139.85 |
|Income Tax Provision ||1.99 ||13.68 |
|Deferred Tax Liability ||(10.79) ||9.67 |
|Net Profit ||(38.52) ||15.64 |
Your directors are pleased to report that for the year under review your Company hasbeen able to achieve a net turnover of Rs. 13.09 crores as compared to Rs. 13.92 croresfor the previous year. Your company made a loss of Rs. 38.52 lacs as against a net profitof Rs. 15.64 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 2021 was Rs. 100000000(Rupees Ten crores) divided into 10000000 (One crores) equity shares of Rs 10 each.
The paid up share capital of the Company as on March 31 2021 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.
In the last month of FY 2020 the COVID-19 pandemic developed rapidly into a globalcrisis forcing governments to enforce lockdowns of all economic activity. For theCompany the focus immediately shifted to ensuring the health and well-being of allemployees and on minimizing disruption to services for all our customers. This responsehas reinforced customer confidence in Lippi and many of them have expressed theirappreciation and gratitude for keeping their businesses running under most challengingconditions. Although there are uncertainties due to the pandemic and reversal of thepositive momentum post lockdown we expect business to improve gradually and that businesswill start moving upwards from 2nd quarter of FY21-22. We can expect the business tonormalize from the 3rd quarter of FY21-22. Strong balance sheet position and inherentresilience of the business model position the Company well to navigate the challengesahead and gain market share.
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.
VIGIL MECHANISM/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 provisions of revised' SS-1 SecretarialStandards on meetings of the Board of Directors which has come into effect from October012017 and also SS- 2 Secretarial Standard.
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 N. Agrawal (Wife of Mr. Nandlal J. Agrawal MD & Chairman) and M/s PrinceEnterprise (in which Mr. Kunal N. Agrawal is common Partner in the firm and director inthe company) during the financial year 2020-21 the details of which are given in thenotes forming parts of Financial Statements. All Related Party Transactions entered intoare on an arm's length basis. There are no materially significant Related PartyTransactions made by the Company with promoters directors Key Managerial Personnel orother designated persons which may have potential conflict with the interests of theCompany 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 2020-21.
TRANSFER TO RESERVES:
The Company has transferred current year's loss of Rs. 3852455/- to the Reserve &Surplus and the same is in compliance with the applicable provisions prescribed under theCompanies Act 2013.
There is no new appointment taken place in the F.Y 2020-2021.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Kunal N. Agrawal (DIN: 00169324) 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 directors wasmet on 20/06/2020 27/07/2020 14/08/2020 29/08/2020 12/11/2020 and 12/02/2021.
The composition and attendance of Board of Directors are as:
|Sl. No. ||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) ||Whole Time Director ||6 ||Yes ||None |
|3 ||Shri Kunal Agrawal (DIN:00169324) ||Whole Time Director ||6 ||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 Swtal Sapra (DIN: 07155395) ||Woman -Independent ||6 ||Yes ||Member in three Committee |
|7 ||Shri. Govindlal 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".
Pursuant to Section 177 of the Companies Act 2013 the board of directors hasconstituted an audit committee. The audit committee comprises of Shri Govindlal C Thakkar(DIN: 07531165) Chairperson Shri Tirthraj Pandya (DIN: 02972285) Member and Ms. SwetalSapra (DIN: 08536677) 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) (c) of the Companies Act 2013:
(i) That in the preparation of the annual financial statements for the year ended March31 2021 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 2021 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 29th 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 - B".
Reply to the Observation:
1. The Board noted thefact about the No-Dematerialization ofsome ofthe promoters ShareHolding and accordingly intimated to the concerned Promoters. The Company has received thepositive response from the same promoter and the process of the conversion has beeninitiated 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 Year2021-22.
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 2020-21.
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 - C".
CORPORATE GOVERNANCE REPORT
A Report on Corporate Governance regarding compliance of the conditions of CorporateGovernance pursuant to Regulation 34(3) of the SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 is annexed herewith as "Annexure - D".
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 safeguard 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 / 2021 ||Nandlal J. Agrawal |
| ||Chairman & Managing Director |
| ||(DIN : 00336556) |