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Lambodhara Textile Directors Report, Lambodhara Text Reports by Directors
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Lambodhara Textile

BSE: 590075|NSE: LAMBODHARA|ISIN: INE112F01022|SECTOR: Textiles - Spinning - Cotton Blended
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Directors Report Year End : Mar '18    Mar 16

Dear Shareholders,

The Directors have pleasure in presenting their twenty fourth Annual Report on the business and operations of the Company upto the period 11th July 2018 and the financial statements for the year ended 31st March, 2018.

FINANCIAL HIGHLIGHTS

Company''s financial performance for the year under review along with previous year''s figures are given hereunder:

PARTICULARS

31.03.2018

31.03.2017

(Rs. in ’000)

(Rs. in ’000)

Revenue from operations

16,67,333

13,07,519

Other Income

6,268

4,379

Operating Profit before Finance Costs,

Depreciation & Tax

2,10,342

1,80,936

Less: Depreciation

60,170

60,808

Less : Finance Costs

66,339

27,666

Profit before Tax

83,833

92,462

Provision for Tax

20,124

19,239

Deferred Tax

4,199

3,258

Net Profit for the year

59,510

69,965

Other comprehensive income

(4.33)

2.66

Total comprehensive income for the year

59,078

70,230

Add: Balance brought forward from previous year

2,58,439

1,98,140

Profit available for appropriation

3,17,517

2,68,370

Appropriation of Profits

Transfer to General Reserve

-

1,737

Proposed Dividend

9,078

6,809

Corporate Dividend Tax

1,848

1,386

Balance carried over to Balance Sheet

3,06,591

2,58,439

COMPANY PERFORMANCE

The Company achieved a total turnover of Rs. 167.36 Crores as against a turnover of Rs. 131.18 crores in the previous year. The Company’s profit before tax is Rs. 8.38 crores during the year, as compared to Rs. 9.25 crores in the previous year, decrease of 9.31 % over the last year. The Company earned a net profit of Rs. 5.95 crores, as against a net profit of Rs. 7 crores in the previous year.

STATE OF COMPANY’S AFFAIRS

During the Financial year the Company has rented one more floor of its commercial complex situated at Avinashi Road, Coimbatore with an approximate area of 7,555 sq.ft and with this all the four floors in the said commercial complex with a total tenantable area of 28,000 square feet have been rented out.

The Company has entered into conversion agreements with other spinning mills and this will enhance the spinning capacity of the Company.

RESERVES

The Company had not proposed to transfer any amount to the General Reserves account. However, the current year profit of Rs. 3,065.91 Lakhs has been added to the retained earnings under the head Other Equity.

DIVIDEND

Your Directors are pleased to recommend a dividend of Rs. 1/- per equity share (20%) of face value of Rs. 5/- each (Previous year Rs. 1/- per equity share (20%) of face value of Rs. 5/- each). If the dividend,as recommended above, is declared by the Members at the Annual General Meeting, the total outflow towards dividend on Equity Shares for the year would be Rs. 115.46 Lakhs (including dividend tax) (Previous Year Rs. 109.26 Lakhs)

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

There is no amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made thereunder.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2018 was Rs. 4,78,88,000/-.

During the year under review, the Company had allotted 5,00,000 Equity shares of Rs. 5/- each at Rs.80/- per share to Strikeright Integrated Services Limited (Member of Promoter Group) on a Preferential basis. The Company had received listing and trading approval for the aforesaid shares from The National Stock Exchange of India Limited and the said shares were admitted to dealings. Consequent to the preferential issue the Paid-up Capital of the Company had increased from Rs. 4,53,88,000/- to Rs. 4,78,88,000/-.

The Company has passed a Special Resolution dated 22nd January 2017 vide its Postal Ballot Notice dated 20th December, 2017 for offer, issue and allot securities by way of Qualified Institutions Placement (QIP) for an aggregate amount not exceeding Rs. 15,00,00,000 (Rupees Fifteen Crore Only) and the Company is yet to initiate the process for the said offer/issue/ allotment.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure -1 and is attached to this Report.

NUMBER OF MEETINGS OF THE BOARD OFDIRECTORS

Details of the composition of the Board and its Committees namely Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report which forms a part of this Report.

STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit of the company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets 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;

(e) the internal financial controls to be followed by the company were laid down and such internal financial controls were adequate and were operating effectively; and

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.

During the period under review, no incident of frauds was reported by the Statutory Auditors pursuant to Section 143(12) of the Companies Act, 2013.

DECLARATION BY INDEPENDENT DIRECTORS

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of The Companies Act, 2013 read with the Schedules and Rules issued there under as well as SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The Board of Directors has framed a policy which lays down a framework inrelation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy are furnished in Annexure - 2 and forms part of this report and can also be accessed on the Company’s website at www.lambodharatextiles.com.

AUDITORS

STATUTORY AUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Jain & Mohan, Chartered Accountants, the Statutory Auditors of the Company, hold office up to the conclusion of the Annual General Meeting to be held in the year 2022. The Company has received a certificate from the said Auditors that they are eligible to hold office as the Auditors of the Company.

The Ministry of Corporate Affairs vide their notification dated 07th May 2018 has amended the Section 139 of the Companies Act, 2013 by omitting the necessity of ratification of the appointment of the Statutory Auditors by members of the Company at every subsequent Annual General Meeting. In order to align with the amended Section 139, the relevant subject matter is included in the Notice of the ensuing Annual General Meeting for seeking approval of the members.

COST AUDITORS:

As per the requirement of Central Government and pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company has been carrying out audit of cost records.

The Board of Directors, on the recommendation of Audit Committee, has appointed M/s.C.S.Hanumantha Rao & Co., Cost Accountants (Firm Regn. No.000216) as Cost Auditor to audit the cost accounts of the Company for the financial year 2018-2019. As required under section 148(2) of the Companies Act, 2013, a resolution seeking member’s approval for the remuneration payable to the Cost Auditor forms part of the Notice convening the Annual General Meeting for their ratification.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Mr.M.D.Selvaraj, FCS of MDS & Associates Practicing Company Secretary carried out the Secretarial Audit of the Company for the year ended 31st March, 2018. The Secretarial Audit Report is annexed as Annexure - 3.

The Auditors’ Report for the financial year ended 31st March, 2018 does not contain any qualification, reservation, adverse remark or disclaimer.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

Particulars of the investments made by the Company as at 31st March, 2018 are given in the Notes forming part of the Financial Statements. During the Financial Year under review, the Company made an investment of Rs.3.51 lakhs in 31,900 equity shares of OPG Power Generation Private Limited in order to enable the Company to purchase electricity from them under group captive arrangement. The Company has not given any loans or guarantees or provided any security to any person or other bodies corporate under section 186 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All Related Party Transactions that were entered into during the financial year were on an arm’s length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The particulars of contracts and arrangement with related parties referred in section 188(1) of the Companies Act, 2013 in prescribed Form AOC-2 is appended as Annexure -4 to the Directors’ Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure and is attached to this report.

RISK MANAGEMENT POLICY

The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status. These procedures are periodically reviewed to ensure that the executive management monitors and controls risks.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As a part of its initiative under the “Corporate Social Responsibility” (CSR) drive, the Company has undertaken projects in the area of promoting education. These projects are in accordance with Schedule VII of the Companies Act, 2013 and the Company’s CSR policy. The Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure - 5 and forms anintegral part of this Report. The CSR Policy may be accessed on the Company’s website at www.lambodharatextiles.com.

Detailed composition of the CSR Committee, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report which forms a part of this Report.

The Company was required to spend Rs.14.85 Lakhs on CSR activities during the Financial Year 2017-18, being 2% of the average net profits of the three immediately preceding financial years and the Company has spent Rs.16.73 lakhs during the current financial year.

ANNUAL PERFORMANCE EVALUATION

In accordance with the evaluation criteria and procedure suggested by the Nomination and Remuneration Committee, the Board of Directors evaluated the performance of the Board, having regard to various criteria such as Board composition, Board processes, Board dynamics, etc. The Independent Directors, at their separate meetings, also evaluated the performance of non-independent directors and the Board as a whole based on various criteria. The performance of each independent Director was evaluated by the entire board of directors on various parameters like engagement, leadership, analysis, decision making, communication, governance, etc. The Board and the Independent Directors were of the unanimous view that performance of the Board of Directors as a whole was satisfactory.

The performances of all the Committees were evaluated by the Board having regard to various criteria such as committee composition, committee processes, committee dynamics, degree of fulfillment of key responsibilities, effectiveness of meetings, etc. The Board was of the unanimous view that all the committees were performing their functions satisfactorily.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended 31st March, 2018.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

On the recommendation of the Nomination and Remuneration Committee (NRC) and in accordance with the provisions of Section 152(2), 161(1), 196, 197, 198, 203, Schedule V and other applicable provisions of the Companies Act, 2013 and subject to the shareholders’ approval, the Board has appointed Mr.Ramesh Shenoy Kalyanpur (holding DIN: 06392237) as Whole-time Director cum Chief Financial Officer and Mr.Narayanasamy Balu (holding DIN: 08173046) as Whole-time Director of the Company for a period of five (5) years w.e.f 11th July, 2018.

Mr.R.Santossh (holding DIN: 00790493) Managing Director of the Company and Mrs.Vimala Radhakrishnan (holding DIN: 00813706) Whole-time Director of the Company both resigned from the office w.e.f 11th July, 2018 due to health issues and age factor respectively. The Board appreciated the services rendered by them during their period of appointment.

The Board of Directors at their meeting held on 30th May, 2018 has re-appointed Mrs.Bosco Giulia (holding DIN 01898020) as the Whole-time Director of the Company for a further period of 5 years with effect from 28th September, 2018, subject to the approval of the shareholders at the ensuing Annual General Meeting. Accordingly, necessary resolution has been included in the Agenda of the Notice convening the Annual General Meeting for the approval of the members.

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mrs.Bosco Giulia (holding DIN 01898020) is due to retire by rotation at the ensuing Annual General Meeting and being eligible, offers herself for re-appointment. The members are requested to consider her re-appointment.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any Subsidiary, Joint Venture or Associate Company.

FIXED DEPOSITS

The Company has not accepted any deposit within the meaning of Chapter V of the Companies Act, 2013 and the Rules framed there under and there are no outstanding fixed deposit from the public as on 31st March, 2018.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

There is no significant and material order passed by the regulators or courts or tribunals impacting the going concern status and company’s operation in future.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Internal Audit Reports were reviewed by the Audit Committee. Further, the Audit Committee annually reviews the effectiveness of the Company’s internal control system. The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate and effective with respect to the operations of the Company. A report of Auditor’s pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditor’s report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under Section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure -6 to this Report.

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs.1,02,00,000/- if employed throughout the year or Rs.8,50,000/- per month if employed for part of the year.

AUDIT COMMITTEE

The composition of Audit Committee has been detailed in the Corporate Governance Report, forming part of this Annual Report.

The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

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

The Company has in place a policy against Sexual Harassment at work place in line with requirements of the Sexual Harassment Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee has been setup to redress complaints received regularly. There was no compliant received from any employee during the financial year 2017-18, nor any complaint remains outstanding for redressal as on 31st March, 2018.

MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE

The Management Discussion and Analysis Report and the Report on Corporate Governance, as required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report.

LISTING OF SHARES

Equity shares of the Company was continued to be listed on National Stock Exchange of India Limited (NSE).

ACKNOWLEDGEMENTS:

The Board of Directors express their appreciation for the contribution made by the employees, customers and bankers for the support extended by them during the year under review.

For and on behalf of the Board

Meenakshi Sundaram Rajkumar

Place : Coimbatore Chairman

Date : 11.07.2018 (DIN : 06935422)

Source : Dion Global Solutions Limited
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