The Members of
LIPPI SYSTEMS LIMITED
Your directors have pleasure in presenting their Annual Report together with theAudited Annual accounts for the year ended on 31st March 2017.
|Particulars: ||2016-17 ||2015-16 |
|Net Sales ||1572.64 ||1489.18 |
|Other Income ||126.09 ||69.56 |
|Finance Cost ||130.35 ||146.66 |
|Depreciation ||146.40 ||113.73 |
|Income Tax Provision ||51.95 ||15.52 |
|Deferred Tax Liability ||80.56 ||26.67 |
|Net Profit ||163.55 ||53.17 |
Your directors are pleased to report that for the year under review your Company hasbeen able to achieve a net turnover of Rs. 15.73 crores as compared to Rs. 14.89 croresfor the previous year. Your company could achieved a net profit of Rs. 163.55 lacs asagainst a net profit of Rs. 53.17 lacs for the preceding year.
Your directors expect better results for the current year.
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.
VIGIL MECHANISM/WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act 2013 and as per SEBI (ListingObligations And Disclosure 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)
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS:
The Company has established a well-defined process of risk management where in 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 MsShashiben G. Gupta (Wife of Mr Nandlal J. Agrawal MD & Chairman) during the financialyear 2016-17 the details of which are given in the notes forming parts of FinancialStatements. All Related Party Transactions entered into are on an arm's length basis.There are no materially significant Related Party Transactions made by the Company withpromoters directors Key Managerial Personnel or other designated persons which may havepotential 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 the proceduregoverning related party transactions required to be followed to ensure compliance with theapplicable laws and regulations as well as to ensure that the Related Party Transactionsare managed and disclosed in accordance with the strict legal and accounting 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 Obligations And Disclosure Requirements) Regulations 2015 ispresented in 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 OFLOANS. 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 F inancial Year 2016-17
TRANSFER TO RESERVES:
The Company has transferred current year's profit of Rs. 16354777.00 to the Reserve& Surplus and the same is in compliance with the applicable provisions prescribedunder the Companies Act 2013.
The Board of Directors has appointed Mr. Govind C Thakkar (DIN: 07531165) as anAdditional Independent Director of the Company on 30th May 2016 and then wasregularized as an Independent Director in the Annual General Meeting held on 30th September2016.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Minesh C. Shah (DIN: 00045178) retires by rotation and iseligible 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 Obligations And Disclosure Requirements) Regulations 2015.
(iv) Board Evaluation
In compliance with the provisions of the Companies Act 2013 and SEBI (ListingObligations And Disclosure 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. Themanner in 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 eight members of Board of the Directors of the company of ExecutiveDirectors Non Executives Directors and independent directors. There is no institutionalnominee on the Board. During the year nine meetings of the Board were held. The Board ofdirectors was met on 12/04/201630/05/201612/08/201627/09/201614/11/2016 14/02/2017and 25/03/2017.
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 ||7 ||Yes ||None |
|2 Shri Sanjay Agrawal (DIN: 00075210) ||Non executive ||4 ||Yes ||Member in two Committees |
|3 Shri Minesh Shah (DIN: 00045178) ||Executive ||7 ||Yes ||Member in one Committee |
|4 Shri Kamlesh Sharma (DIN: 01563040) ||Independent ||7 ||Yes ||Chairman in one Committee |
|5 Shri Tirthraj Pandya (DIN: 02972285) ||Independent ||7 ||Yes ||Chairman in one Committee Member in One Committee |
|6 Shri Mahendra Patel (DIN: 03017155) ||Independent ||3 ||Yes ||Chairman in one Committee Member in Two Committees |
|7 Shri Kunal Agrawal (DIN: 00169324) ||Executive ||7 ||Yes ||None |
|8 Ms Jesal P Shah (DIN: 07155395) ||Woman- Independent ||7 ||Yes ||None |
|9 Shri. Govind C. Thakkar (DIN: 07531165) ||Independent ||5 ||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 withRule 8(3) ofthe 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 Minesh C Shah (DIN:00045178) Shri Mahendra Patel (DIN: 03017155) and Shri Tirthraj Pandya (DIN: 02972285).On 14th November 2016 Company reconstituted Audit Committee new composition is mentionedbelow;
|1. Mr. Govind C Thakkar.... ||Chairman |
|2. Ms. Jesalben Shah .... ||Member |
|3. Mr. Tirthraj Pandya ||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 2017 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 as'Significant 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 312017 and of theprofit of the Company for the year ended on that date;
(ill) 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
Under Section 139 of the companies act 2013 and the rule made their under it ismandatory to rotate the statutory auditors on completion of maximum term permitted underthe said section. The board of Directors of the company has recommended the appointment ofM/S Vijay Moondra & Co. Chartered Accountants Firm (Firm Reg. No. 112308W) as theStatutory Auditor of the company. The said firm will hold the office for the period offive consecutive years from the conclusion of the 24* Annual General Meeting of thecompany schedule to be held on 29th September 2017 till conclusion of the 28thAnnual General Meeting to be held in the year 2022 subject to ratification ofShareholders of the company. The first year of Audit will be of the financial statementfor the year ending March 312018 which will include the quarterly financial statement.
(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:
The Board noted thefact about Non-Dematerialization ofSome of the Promoters 'ShareHolding and Accordingly intimated to the concerned Promoter. 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 Year2017-18.
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 as none of the employees was in receipt ofremuneration in excess of Rs.60 lacs during the financial year 2016-17.
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 the Auditors of theCompany regarding compliance of the conditions of Corporate Governance pursuant to SEBI(Listing Obligations And Disclosure Requirements) Regulations 2015 is annexed here withas "Annexure - E".
There was no case filled during the year under the sexual harassment of women atworkplace (Prevention Prohibition & Redressal) Act 2013. Further Company ensuresthat there is a healthy and safe atmosphere for every women employee at the workplace andmade the necessary policies for safe and secure environment for women employee.
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: 25/08/2017 ||Nandlal J. Agrawal |
| ||Chairman & Managing Director |
| ||(DIN: 00336556) |