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LWS Knitwear Ltd.

BSE: 531402 Sector: Industrials
NSE: N.A. ISIN Code: INE281M01013
BSE 00:00 | 10 Apr 3.86 0
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NSE 05:30 | 01 Jan LWS Knitwear Ltd
OPEN 3.86
PREVIOUS CLOSE 3.86
VOLUME 300
52-Week high 12.91
52-Week low 3.51
P/E 12.87
Mkt Cap.(Rs cr) 2
Buy Price 3.86
Buy Qty 100.00
Sell Price 4.20
Sell Qty 1500.00
OPEN 3.86
CLOSE 3.86
VOLUME 300
52-Week high 12.91
52-Week low 3.51
P/E 12.87
Mkt Cap.(Rs cr) 2
Buy Price 3.86
Buy Qty 100.00
Sell Price 4.20
Sell Qty 1500.00

LWS Knitwear Ltd. (LWSKNITWEAR) - Director Report

Company director report

TO THE MEMBERS OF LWS KNITWEAR LIMITED LUDHIANA

The Directors of your company have pleasure in presenting the 28th AnnualReport together with Audited Accounts of the company for the financial year ended 31stMarch 2017.

FINANCIAL HIGHLIGHTS

(Rs. In Lacs)

Standalone
Particulars 2016-17 2015-16
Gross Income 3223.37 2686.58
Profit Before Interest and Depreciation 59.17 40.29
Finance Charges 43.85 22.03
Depreciation and Amortization 2.36 2.32
Expenses
Profit Before Tax 12.96 15.94
Provision for Tax 3.98 4.93
Net Profit After Tax 8.98 11.01
Less previous year tax adjustments 1.30 0.18
Surplus carried to Reserve 7.68 10.83

STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

The Company is engaged in the manufacture of hosiery goods/garments. Board expects theCompany to grow in future.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business activities of the Company.

DIVIDEND

The Board of Directors with the view to conserve the resources of company has notrecommending any dividend this year.

AMOUNTS TRANSFERRED TO RESERVES

The Board of the company has decided to carry Rs 768653.45 to its reserves andsurplus account.

CHANGES IN SHARE CAPITAL IF ANY

There has been no change in Share Capital of the Company during the current FinancialYear..

INFORMATION ABOUT SUBSIDIARY/ JV/ ASSOCIATE COMPANY

The Company does not have any Subsidiary Joint venture or Associate Company.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCTION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act 2013 do not apply as there wasno dividend declared and paid last year and there is no unclaimed dividend.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Companyoccurred between the period from the end of the financial year to which this financialstatement relate and on the date of this report

EXTRACT OF ANNUAL RETURN

The Extract of Annual Return as required under section 92(3) of the Companies Act 2013and rule 12(1) of the Companies (Management and Administration) Rules 2014 in Form MGT-9is annexed herewith for your kind perusal and information.

MEETINGS OF THE BOARD OF DIRECTORS

During the Financial Year 201-17 the Company held 6 Board meetings of the Board ofDirectors as per Section 173 of Companies Act 2013 which is summarized below. Theprovisions of Companies Act 2013 and listing agreement were adhered to while consideringthe time gap between two meetings.

30.04.2016 30.05.2016 12.08.2016 14.11.2016 14.02.2017 28.03.2017

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors of theCompany confirms that-

(a) In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(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 and loss 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; and

(e) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively.

(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.

AUDITORS AND REPORT THEREON

M/s. Rajesh K Sharma and Associates Chartered Accountants Ludhiana was appointed asStatutory Auditors for a period of three years to hold office from the conclusion of 25thAnnual General Meeting until the conclusion of the 28th Annual General Meeting.Board has recommended their re-appointment for second term of next five years whichrequires approval of members at ensuing Annual General Meeting. There are noqualifications or adverse remarks in the Auditors' Report which require any clarification/explanation. The Notes on financial statements are self-explanatory and needs no furtherexplanation. Further the Auditors' Report for the financial year ended 31st March 2017is annexed herewith for your kind perusal and information.

LOANS GUARANTEES AND INVESTMENTS

During the year the Company has made further investment of Rupees 7374483.20 in M/s.LWS Knitwear a partnership firm in which Company is a partner and Shri Girish KapoorManaging Director of the Company is also a partner of the firm. The total investment inthe firm is Rs. 58821556.73 at the close of the financial year.

RELATED PARTY TRANSACTIONS

The Company has entered into various Related Parties Transactions in ordinary course ofbusiness at arm' s length as defined under Section 188 of the Companies Act 2013 withrelated parties as defined under Section 2 (76) of the said Act. Further all the necessarydetails of transaction entered with the related parties are attached herewith in Form No.AOC- 2 for your kind perusal and information.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO

The Information pursuant to Section 134(3) (m) pertaining to Conservation of EnergyTechnology Absorption and Foreign Exchange Outgo is provided in annexure herewith.

RISK MANAGEMENT

The Company does not have any Risk Management Policy as the element of risk threateningthe Company's existence is very minimal.

DIRECTORS AND KMP

During the current financial year no changes have occurred in the constitution of Boardof Directors and KMP of the company:

DEPOSITS

The company has not accepted any deposits during the year and there are no unclaimeddeposits.

PERSONNEL

The information required pursuant to Section 134(3) and Section 197(12) read with Rule5 (1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company and Directors is attached herewith. Furtherinformation required under Rule 5 (2) of The Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is nil as no employee of the Company is in receipt ofremuneration as stated therein.

ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 the Board has carried out anannual performance evaluation of its own performance the directors individually as wellas the evaluation of the working of its Audit Nomination & Remuneration Committee. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department.

CORPORATE GOVERNANCE

Report on Corporate Governance along with the Certificate of M/s. Rajesh K Sharma andAssociates Chartered Accountants Ludhiana confirming compliance of conditions ofCorporate Governance as stipulated in the Listing Agreement with the Stock Exchanges formspart of the Board Report.

According to Schedule V Part II Section II point IV states that:

a) The remuneration package of the directors are as follows:

Name of Director GIRISH KAPOOR
Salary Rupees 240000/-
Bonus Nil
Stock Options Nil
Pension Nil
Medical Reimbursment Nil

b) Performance linked incentives- Nil

c) Service contracts notice period servant fees- Nil

d)Stock option details- Nil

INDEPENDENT DIRECTORS AND DECLARATION

Sh. Daya Nand Sahu and Sh.Varinder Kumar Dhamija are two independent directors on theBoard of Directors of the Company. The Board of Directors of the Company hereby confirmsthat all the Independent directors duly appointed by the Company have given thedeclaration and they meet the criteria of independence as provided under section 149(6) ofthe Companies Act 2013.

NOMINATION AND REMUNERATION COMMITTEE

As per the section 178(1) of the Companies Act 2013 the Company's Nomination andRemuneration

Committee comprises of three Non-executive Directors. The table sets out thecomposition of the

S.N. Name of the Director Position held in the Committee Category of the Director
1 Sh. Daya Nand Sahu Chairman Non Executive Independent Director
2 Sh.Varinder Kumar Dhamija Member Non Executive Independent Director
3 Smt. Kusum Kapoor Member Non Executive Promoter Director

The date of meetings of committee and attendance of members is given in report oncorporate governance

attached with the report.

Terms of Reference

The Terms of Reference of the Nomination and Remuneration Committee are as under:

1. To identify persons who are qualified to become Directors and who may be appointedin senior management in accordance with the criteria laid down recommend to the Boardtheir appointment and removal and shall carry out evaluation of every Director'sperformance.

2. To formulate the criteria for determining qualifications positive attributes andindependence of a Director and recommend to the Board a policy relating to theremuneration for the Directors Key Managerial Personnel and other employees.

3. The Nomination and Remuneration Committee shall while formulating the policy ensurethat:

a. the level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully;

b. relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and

c. remuneration to Directors Key Managerial Personnel and senior management involves abalance between fixed and incentive pay reflecting short and long-term performanceobjectives appropriate to the working of the company and its goals:

4. Regularly review the Human Resource function of the Company

5. Discharge such other function(s) or exercise such power(s) as may be delegated tothe Committee by the Board from time to time.

6. Make reports to the Board as appropriate.

7. Review and reassess the adequacy of this charter periodically and recommend anyproposed changes to the Board for approval from time to time.

8. Any other work and policy related and incidental to the objectives of the committeeas per provisions of the Act and rules made there under.

REMUNERATION POLICY

Remuneration to Executive Directors

The remuneration paid to Executive Directors is recommended by the Nomination andRemuneration Committee and approved by Board in Board meeting subject to the subsequentapproval of the shareholders at the General Meeting and such other authorities as may berequired. The remuneration is decided after considering various factors such asqualification experience performance responsibilities shouldered industry standards aswell as financial position of the Company.

Remuneration to Non Executive Directors

The Non Executive Directors have not been paid any sitting fees during the year underreport.

AUDIT COMMITTEE

According to Section 177 of the Companies Act 2013 the company's AuditCommittee comprised of three directors. The board has accepted the recommendations of theAudit Committee. The table sets out the composition of the Committee:

S.N. Name of the Director Position held in the Committee Category of the Director
1 Sh. Daya Nand Sahu Chairman Non Executive Independent Director
2 Sh.Varinder Kumar Dhamija Member Non Executive Independent Director
3 Smt. Kusum Kapoor Member Non Executive Promoter Director

The date of meetings of committee and attendance of members is given in report oncorporate governance attached with the report.

SECRETARIAL AUDIT REPORT

The Secretarial Auditor has given observations relating to updating of statutoryregisters minutes books and website of the Company as per The Companies Act 2016 andSEBI (LODR) Regulations 2015. The Board has given instructions to concerned persons fordoing the needful. Further the Secretarial Audit Report as provided by Ravinder KumarPracticing Company Secretary for the financial year ended on 31st March 2017 isannexed herewith for your kind perusal and information.

VIGIL MECHANISM

As per Section 177(9) and (10) of the Companies Act 2013 and as per the Clause 49 ofthe Listing Agreement the company has established Vigil Mechanism for directors andemployees to report genuine concerns and made provisions for direct access to thechairperson of the Audit Committee. Company has formulated the present policy forestablishing the vigil mechanism/ Whistle Blower Policy to safeguard the interest of itsstakeholders Directors and employees to freely communicate and address to the Companytheir genuine concerns in relation to any illegal or unethical practice being carried outin the Company.

SHARES

a. Buy Back of Securities-The Company has not bought back any of its securitiesduring the year under review.

b. Sweat Equity-The Company has not issued any Sweat Equity Shares during theyear under review.

c. Bonus Shares-No Bonus Shares were issued during the year under review.

d. Employees Stock Option Plan-The Company has not provided any Stock OptionScheme to the employees.

ORDER OF COURT

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.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Internal Financial Controls are adequate and are in consonance with the size andoperations of the Company and such internal financial controls are operating effectively.The Company has also appointed M/s. K. K. Bector & Co. Chartered AccountantsLudhiana as Internal Auditor as required under Section 138 of the Companies Act 2013.

SHARES IN SUSPENSE ACCOUNT

i. Aggregate number of shareholders and the outstanding shares in the suspense accountlying at the beginning of the year=nil

ii. Number of shareholders who approached issuer for transfer of shares from suspenseaccount during the year=nil

iii. Number of shareholders to whom shares were transferred from suspense accountduring the year=nil

iv. aggregate number of shareholders and the outstanding shares in the suspense accountlying at the end of the year=nil

SHARES IN UNCLAIMED SUSPENSE ACCOUNT

i. Aggregate number of shareholders and the outstanding shares lying in the UnclaimedSuspense Account at the beginning of the year=nil

ii. Number of shareholders who approached the issuer for transfer of shares from theUnclaimed Suspense Account during the year=nil

iii. Number of shareholders to whom shares were transferred from the Unclaimed SuspenseAccount during the year=nil

iv. Aggregate number of shareholders and the outstanding shares lying in theUnclaimed Suspense Account at the end of the year=nil

MATERIAL VARIATIONS

The material variations between the projections and the actual utilization are notapplicable:

CODE OF CONDUCT

The Code of Conduct of LWS Knitwear Limited is attached herewith.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

1. Industry structure and development

Ludhiana is a leading producer of woolen and acrylic garments. The industry caterslargely to domestic market it is also exporting hosiery goods which is around 10% oftotal production. Main export markets till early 1990s; it was former USSR and Middle Eastand now in recent years it has expanded to other markets in Europe and USA.

2. Opportunities and threats

The company is engaged in the manufacture garments which is a consumer product and hasa ready

market in India and abroad. However the company faces competition from othermanufactures.

3. Segment wise or product wise performance

The company suffered losses in past some years and there were some financialconstraints which led to the closure of production. However company has come out of allthe constraints and now Company is earning some profits.

4. Outlook

Company is all set to export readymade garments and it is expected to earn good profitsin the coming years.

5. Risks and concern

Management does not foresee any significant risk to the industry.

6. Internal control systems and their adequacy

The company has a qualified and independent audit committee which reviews the adequacyof internal controls.

7. Discussion on financial performance with respect to operational performance

The gross block of assets of the company stood at Rs.14.47 lacs and net worth of thecompany is Rs. 9.60 crores as at 31.03.2017.

8. Human Resourses

The Company provides a fair and equitable work environment to all its employees. TheCompany is continuously working to create an atmosphere which is highly motivated andresult oriented.

DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013

The Company has in place `Prevention of Sexual Harassment Policy` in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. An Internal Complaints Committee (ICC) is also in place toredress complaints received regarding sexual harassment. The following is a summary ofsexual harassment complaints received and disposed off during the year - No. ofcomplaints received: Nil -No. of complaints disposed off: NA

ACKNOWLEDGEMENT

Your Directors wish to express their grateful appreciation to the continuedco-operation received from the Banks Government Authorities Customers Vendors andShareholders during the year under review. Your Directors also wish to place on recordtheir deep sense of appreciation for the committed service of the Executives staff andWorkers of the Company.

By Order of the Board
For LWS KNITWEAR LIMITED
Sd/-
GIRISH KAPOOR
DATE: 30.05.2017 MANAGING DIRECTOR
PLACE: LUDHIANA DIN-01870917