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Lerthai Finance Ltd.

BSE: 502250 | NSE: | Series: NA | ISIN: INE347D01011 | SECTOR: Cement - Products & Building Materials

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Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Director’s Report

To,

The Members,

Marathwada Refractories Limited

The Directors have pleasure in presenting the Thirty Ninth Annual Report of your Company together with audited statement of Accounts and the Auditor’s Report thereon in respect of the year ended on March 31, 2018.

1. Financial Summary

(Rs. In Lakhs)

Particulars

For the FY 2017-18 ended on 31st March, 2018 (INR)

For the FY 2016-2017 ended on 31st March, 2017 (INR)

Total Income

3.28

11.34

Total Expenditure

13.61

10.06

Profit / (Loss) before tax

(10.32)

1.28

Less: Tax Expenses

0.01

0.39

Profit / (Loss) after Tax

(10.34)

0.89

The Company does not have any subsidiaries and hence is not required to prepare a consolidated financial statement.

2. State of Company’s Affairs

The Company has since discontinued its business activities of inter alia production, manufacture or trade refractories of all kind and bricks of all types and varieties being does not resulting as a profitable venture. During the year under consideration the company has earned income mainly from interest earned on fixed deposits placed with the nationalized Bank.

During the under review, Calvera Capital Pte. Limited (“Acquirer”) and LT Investment Limited (“PAC”) have jointly acquired 5,19,525 shares constituting 74.22% of the paid-up share capital of the Company from Mr. Sushil Pandurang Mantri (“Seller”) in accordance with the Share Purchase Agreement (“SPA”) dated November 21, 2017 executed between the Acquirer, PAC and the Seller. The Acquirer also acquired 5,475 shares from the public shareholders of the Company vide an Open Offer made as per the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. Consequently, Mr. Sushil Pandurang Mantri shall be de-classified as a Promoter and re-classified as a Public Shareholders subject to approval of Members in the ensuing AGM and the perspective Stock Exchanges.

The prime objective of the Acquirer for the acquisition of SPA Shares was to have substantial holding of Equity Shares and voting rights accompanied by control over the management of the Company. Post successful acquisition the new promoters are considering available options to revive or diversify the business of the Company. The Company along with new promoters is in process of effecting smooth transition of the management and control.

As mentioned above, Directors’ of your Company are considering available options to revive or diversify the business of the Company subsequent to the acquisition of substantial shareholding in the Company, there is nothing at present which can be reported under Management Discussion and Analysis Report in so far industry structure, outlook, opportunities and risk are concerned. The Directors have dealt with the other aspects relating to financial performance, internal control and accounting treatment as far as possible elsewhere in this report.

Further, the obligations relating to compliance with corporate governance provisions does not apply to the Company as per the exemption criteria given under the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Company shall comply with the requirements with the said regulations within six months from the date on which it becomes applicable to it. Nevertheless, the Company follows highest governance standards in spirit and believes in philosophy of transparency and disclosure. Corporate Governance is about maximizing shareholder value legally, ethically and sustainably. Your Company’s Board exercises its fiduciary responsibilities in the widest sense of the term.

3. Dividend

In view of inadequacy of profits, the Board of Directors has not recommended any dividend for the year under review.

4. Share capital

The current Share Capital of the Company is Rs. 70,00,000 (Rupees Seventy Lakhs Only) consisting of 700,000 (Seven Lakhs) Equity Shares of Rs. 10 (Rupees Ten only) each. There was no change in the Share Capital of the Company during the year under review.

5. Amount to be transferred to reserves

No amount is proposed to be transferred to any reserve.

6. Subsidiary/Joint Ventures/Associate Companies

The Company did not have any subsidiaries, joint ventures or associate companies during the year under review.

7. Directors and Key Managerial personnel

The present Board of Directors consists of the following Directors:

i. Mr. Shao Xing Max Yang

ii. Mr. Jayant Goel

iii. Ms. Aparna Goel

iv. Ms. Ntasha Berry

In terms of Share Purchase Agreement, as discussed above, Mr. Dig Vijay Singh, Mr. Hebbur Satyanarayana Girish Gupta, and Mr. Ganapathy Venkatesh ceased to be the Directors of the Company.

Ms. Aparna Goel, who was and Independent Director of the Company has given a declaration that due to change in circumstances she does not meet criteria of independence and accordingly her status has been changed from an Independent Director to non Executive Director. She retires by rotation and being eligible, offers herself for re-appointment.

The Board has entrusted nomination committee to search for the Independent Directors in terms of the statutory provisions and the process for the same is underway as the committee is screening candidates suitable for the position.

8. Board Meetings

During the year under review the Board met 4 (Four) times inter alia to adopt and declare financial results to stock exchanges.

9. Declaration by Independent Directors

The Company has received necessary declarations from Ms. Ntasha Berry, an Independent Director, under Section 149(7) of the Companies Act, 2013 that she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013. Ms. Aparna Goel has given declaration stating that she no longer meet the criteria of independence due to change in circumstances. The Board took note of the declarations.

10. Board Evaluation

The Board of Directors have carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act, SEBI Listing Regulations and the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5,2017.

The performance of the board was evaluated by the board after seeking inputs from all the Directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

In a separate meeting of independent Directors, performance of non-independent Directors, the Chairman of the Company and the board as a whole was evaluated, taking into account the views of executive Directors and non-executive Directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual Directors on the basis of criteria such as education qualification, experience of the core area in which the company operates, attendance, the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In the board meeting that followed the meeting of the independent Directors and meeting of Nomination and Remuneration Committee, the performance of the board, its committees, and individual directors was also discussed.

Performance evaluation of independent Directors was done by the entire board, excluding the independent director being evaluated.

11. Audit Committee

Present composition of the Audit Committee is as under:

1. Ms. Ntasha Berry

2. Mr. Shao Xing Max Yang

3. Mr. Jayant Goel

During the financial year, the Audit Committee met 4 (four) times.

12. Nomination & Remuneration Committee

Present composition of the Nomination & Remuneration Committee is as under:

1. Mrs. Aparna Goel

2. Ms. Ntasha Berry

3. Mr. Shao Xing Max Yang

During the financial year, the Nomination & Remuneration Committee met 1 (One) time.

13. Stakeholders’ Relationship Committee

Present composition of the Stakeholders’ Relationship Committee is as under:

1. Mr. Shao Xing Max Yang

2. Mr. Jayant Goel

3. Ms. Ntasha Berry

During the financial year, the Stakeholders’ Relationship Committee met 1 (One) time.

14. Company’s Policy on Directors’ Appointment and Remuneration

The Company has policy which mandates to look criteria for determining qualifications, positive attributes and independence of Directors’ Appointment and Remuneration while considering appointment of Director and key managerial personnel. The policy inter alia takes into account: (i) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the company successfully; (ii) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (iii) remuneration to Directors and key managerial personnel involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

15. Remuneration Details of Directors/ Key Managerial Personnel (KMP) and Employees

None of the employees and Directors or Key Managerial Personnel are in receipt of remuneration, hence the disclosure prescribed under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company.

The members of Board are only entitled to sitting fees as approved by the Board pursuant to provisions of Section 203 of the Companies Act, 2013 and Rule 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

16. Directors’ Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 (“the Act”) and, based upon representations from the Management, the Board states that:

a) in preparing the annual accounts, applicable accounting standards have been followed and there are no material departures;

b) the Directors have selected accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent 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 loss of the Company for the year;

c) the Directors have taken proper and sufficient care in maintaining adequate accounting records in accordance with provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a “going concern” basis;

e) the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively; and

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

17. Statutory Auditors

M/s. Guru & Jana, Chartered Accountants (Firm Registration Number 006826S) are appointed as the Statutory Auditors of the Company. There are no qualifications or adverse remarks in the Statutory Auditors’ Report which require any explanation from the Board of Directors.

18. Internal Auditors

In accordance with Section 138 of the Companies Act, 2013 read with Rule 13 of Chapter IX of the said Act, the Board appointed M/s B.S. Venkatachalapathy & Co., Chartered Accountants, Bangalore (Firm Registration No. 013037S) as Internal Auditor of the Company for the Financial Year 2017-18 to conduct internal audit.

19. Explanation on auditor’s qualification, reservation, adverse remark or disclaimer

There are no qualifications, reservations or adverse remarks given or disclaimers made by the auditor in his audit report for the financial year under review.

20. Secretarial Audit

The Secretarial Audit Report for the year ended March 31, 2018 issued by Ms. Snehal SHaligram, Practicing Company Secretary in accordance with the provisions of Section 204 of the Companies Act, 2013, forms part of the Annual Report.

21. Orders passed by the Regulators or Courts or Tribunals

During the year under review, there have been no orders passed by any of the regulators or courts or tribunals impacting the going concern status of the Company and the Company’s operations in future.

22. Related Party transactions

There have been no transactions between the Company and related parties as referred to in section 188(1) of the Companies Act, 2013 during the financial year under review. Accordingly, Form AOC-2 as per the rules prescribed under Chapter IX relating to Accounts of Companies under the Companies Act, 2013 does not form part of this report.

23. Loan, Guarantees or Investments

During the financial year under review, the Company has not granted any loans or guarantees or made any investments in respect of which the provisions of section 186 of Companies Act, 2013 are applicable.

24. Deposits from public

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

25. Risk management policy

Since the Company has already closed its manufacturing operations and is in the process of identifying business opportunities, the Company has no such policy in place as of now. The Board shall take steps to formulate the requisite policy as soon as it identifies business opportunity.

26. Vigil Mechanism/Whistle Blower Policy

Your Company has in place a Whistle Blower Policy for its directors and employees to report concerns about unethical behavior, actual or suspected fraud in accordance with Section 177(9) of the Companies Act, 2013. The policy provides for protected disclosures which can be made by a complainant through e-mail or a letter to the Chairperson of the audit committee. The Company did not receive any complain during the year 2017-18.

27. Corporate Social Responsibility

For the year under review, the provisions of section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility are not applicable to the Company.

28. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) ACT, 2013

The Company has in place a policy for prevention of sexual harassment in accordance with the requirements of the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company did not receive any complain during the year 2017-18.

29. Conservation of Energy and Technology Absorption

Particulars regarding conservation of energy and technology absorption as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014 are not applicable since the Company is not engaged in any manufacturing / power intensive activity.

30. Foreign exchange earnings and Outgo:

There was no foreign exchange inflow or Outflow during the year under review.

31. Transfer of Amounts to Investor Education and Protection Fund

The Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

32. Acknowledgment

The Directors take this opportunity of thanking their shareholders, bankers, business associates and government authorities for their co-operation and support during the year.

For and on behalf of the Board of Directors

Marathwada Refractories Limited

Sd/-

Shao Xing Max Yang

Chairperson

DIN:08114903

Place: Delhi

Date: August 13, 2018

Director’s Report