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LWS Knitwear Ltd.

BSE: 531402 Sector: Industrials
NSE: N.A. ISIN Code: INE281M01013
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VOLUME 411
52-Week high 7.60
52-Week low 1.80
P/E 5.97
Mkt Cap.(Rs cr) 1
Buy Price 2.03
Buy Qty 4914.00
Sell Price 2.03
Sell Qty 10.00
OPEN 2.03
CLOSE 2.03
VOLUME 411
52-Week high 7.60
52-Week low 1.80
P/E 5.97
Mkt Cap.(Rs cr) 1
Buy Price 2.03
Buy Qty 4914.00
Sell Price 2.03
Sell Qty 10.00

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 30th AnnualReport together with Audited Accounts of the company for the financial year ended 31stMarch 2019.

FINANCIAL HIGHLIGHTS

Particulars Standalone (Rs. In Crores)
2018-19 2017-18
Gross Income 54.37 30.31
Profit Before Interest and Depreciation 0.80 0.33
Finance expense 0.05 0.13
Depreciation and Amortization Expenses 0.10 0.06
Profit Before T ax 0.65 0.14
Tax expense 0.21 0.04
Net Profit After Tax 0.44 0.10
Surplus carried to Reserve 0.44 0.10

STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

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

ADOPTION OF IND AS

The Company has adopted Indian Accounting Standards (Ind AS) and Annual FinancialStatements for the year ended 31st March 2019 have been prepared in accordancewith the Indian Accounting Standards (“IND AS “) as prescribed under theCompanies (Indian Accounting Standards) Rules as amended from time to time notified underSection 133 of the Companies Act 2013.

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 0.44 Crore to its reserves and surplusaccount. CHANGES IN SHARE CAPITAL

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 and theprovisions regarding disclosure of names of companies which ceased to be the subsidiaryjoint venture or associate companies are not applicable.

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 current Financial Year the Company held 7 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.

25.04.2018 30.05.2018 14.08.2018 14.11.2018 01.12.2018 14.02.2019 20.03.2019

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 second term of five years at 28th annual general meetingand his appointment is to be ratified by the members at ensuing annual general meeting.There are no qualifications or adverse remarks in the Auditors' Report which require anyclarification/ explanation. The Notes on financial statements are selfexplanatory andneeds no further explanation. Further the Auditors' Report for the financial year ended31st March 2019 is annexed herewith for your kind perusal and information.

LOANS GUARANTEES AND INVESTMENTS

During the year the Company has made investment of Rs. 2107031.28 in M/s. LWSKnitwear 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 company has receivedshare of profit from M/s. LWS Knitwear and the total investment in the firm is Rs.33593314.51 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 following changes have occurred in the constitutionof Board of Directors and KMP of the company.

S.No. Name Designation Changes Date of change
1 Mr. Arpit Jain Company Secretary Resigned 21.04.2018
2 Ms. Vanita Arora Company Secretary Appointed 01.12.2018

Following changes have also occurred after the close of financial year till the date ofthis report-

S.No. Name Designation Changes Date of change
1 Mr. Varinder Kumar Independent Director Resigned 24.04.2019
2 Mr. Rahul Khanna Independent Director Appointed 24.04.2019
3 Smt. Kusum Kapoor Promoter Director Resigned 22.05.2019
4 Sh.Dayanand Independent Director Resigned 22.05.2019
5 Sh. Rahul Khanna Independent Director Resigned 22.05.2019
6 Smt. Genus Magoo Promoter Director Appointed 22.05.2019
7 Ms. Anju Bala Independent Director Appointed 22.05.2019
8 Mr. Jaskaran Singh Ghuman Independent Director Appointed 22.05.2019

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.

a) The information under Schedule V Part II Section II point IV is as under

b) 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.Rahul Khanna both independent directors have resigned on22.05.2019. Ms. Anju Bala and Mr. Jaskaran Singh Ghuman have been appointed on same datein their place. The Board of Directors of the Company hereby confirms that all theIndependent directors duly appointed by the Company have given the declaration and theymeet the criteria of independence as provided under section 149(6) of the Companies Act2013.

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 thepresent composition of the Committee:

SN Name of the Director Position held in the Committee Category of the Director
1 Ms. Anju Bala Chairman Non Executive Independent Director
2 Mr. Jaskaran Singh Ghuman Member Non Executive Independent Director
3 Smt. Genus Magoo 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 Audit Committeecomprised of three directors. The board has accepted the recommendations of the AuditCommittee. The table sets out the present composition of the Committee:

SN Name of the Director Position held in the Committee Category of the Director
1 Ms. Anju Bala Chairman Non Executive Independent Director
2 Mr. Jaskaran Singh Ghuman Member Non Executive Independent Director
3 Smt. Genus Magoo 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.

STAKEHOLDERS RELATIONSHIP COMMITTEE

Stakeholders Relationship Committee was reconstituted during the year and according toSection 178 of the Companies Act 2013 which comprised of three Non-executive Directorsand Chairman of the committee is Independent and Non executive Director. The table setsout the present composition of the Committee as under

SN Name of the Director Position held in the Committee Category of the Director
1 Ms. Anju Bala Chairman Non Executive Independent Director
2 Mr. Jaskaran Singh Ghuman Member Non Executive Independent Director
3 Smt. Genus Magoo 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 STANDARDS

The Directors state that the Company has complied with both the applicable SecretarialStandards i.e. SS- 1 and SS-2 relating to ‘Meetings of the Board of Directors' and‘General Meetings' respectively.

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 2019 is annexedherewith 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 securities duringthe year under review.

b. Sweat Equity-The Company has not issued any Sweat Equity Shares during the yearunder 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 Option Scheme tothe 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 the UnclaimedSuspense 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.1.32 crores and net worth of thecompany is Rs. 9.83 crores as at 31.03.2019.

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.

CORPORATE SOCIAL RESPONSIBILITY

The company does not meet the criteria of Section 135 of Companies Act 2013 read withthe Companies (Corporate Social Responsibility Policy) Rules 2014 so there is norequirement to constitute Corporate Social Responsibility Committee.

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

The Company has in place 'Prevention of Sexual Harassment Policy'. This Anti-SexualHarassment policy of the Company is in line with the requirements of The Sexual Harassmentof Women at the Workplace (Prevention Prohibition & Redressal) Act 2013. Allemployees (permanent contractual temporary and trainees) are covered under this policy.The company has complied with provisions relating to the constitution of InternalComplaints Committee and an Internal Complaints Committee (ICC) is in place to redresscomplaints received regarding sexual harassment. The following is a summary of sexualharassment complaints received and disposed off during the year - No. of complaintsreceived: Nil -No. of complaints disposed off: NA.

COMPLIANCES OF ALL LAWS

The Board hereby states that the company has devised proper systems to ensurecompliance of all laws applicable to the company.

COST RECORDS

The provisions of Section 148(1) of the Companies Act 2013 for maintenance of costrecords are not applicable to the Company.

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

MANAGING DIRECTOR

DIN-01870917

DATE: 30.05.2019

PLACE: LUDHIANA