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Lykis Ltd.

BSE: 530689 | NSE: | Series: NA | ISIN: INE624M01014 | SECTOR: Plantations - Tea & Coffee

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Annual Report

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

Director’s Report

DIRECTORS'' REPORT

Dear Members,

THE Company''s Directors have pleasure in presenting 34th Annual Report of the Company Lykis Limited along with Audited Financial Statement for the year ended March 31, 2018

1. FINANCIAL HIGHLIGHTS

(Rs, In Lakhs)

Particulars

For the year

For the year

For the year

For the year

ended on

ended on

ended on

ended on

31.03.2018

31.03.2017

31.03.2018

31.03.2017

(standalone)

(standalone)

(consolidated)

(consolidated)

Income

Revenue from Operation

14828.78

10610.87

14825.45

10726.53

Other Income

256.49

294.76

271.55

294.80

Total Income

15085.27

10905.63

15097.00

11021.33

Expenditure

Less: Operating & Other Expenses

15077.37

10791.01

15420.60

11292.49

Profit Before Depreciation and Tax

7.90

114.62

(323.60)

(271.16)

Less: Depreciation

47.42

41.73

47.90

42.00

Profit/(Loss) Before Tax

(39.52)

72.89

(371.50)

(313.16)

Less : Provision for Taxes

7.67

12.64

(12.90)

12.64

Net Profit/(Loss) for the year

(47.19)

60.25

(358.60)

(325.80)

Total Comprehensive Income / Loss for the year

(47.19)

60.25

(358.60)

(325.80)

2. COMPANY''S PERFORMANCE

During the year ended March 31, 2018, Operational Revenue including other income on standalone basis was Rs,15085.27 lakhs vs Rs,10905.63 lakhs last year (For a like to like comparison). Profit/(Loss) Before Tax was Rs,(39.52) Lakhs vs 72.89 Lakhs while Net Profit/(Loss) for the financial year ended March 31, 2018 was Rs,(47.19) Lakhs vs Rs,60.25 lakhs in previous year.

On a consolidated basis the operational revenue including other income was Rs,15097 lakhs vs Rs,11021.33 lakhs last year and Profit/ (Loss) Before Tax was Rs, (371.50) Lakhs vs Rs, (313.16) Lakhs last year.

Your Company has taken several remedial steps to meet the challenges viz. measures in saving cost at all front of operations, optimize use of available resources etc.

A detailed analysis on the operations of the Company during the year under report and outlook for the current year is included in the Management Discussion and Analysis Report forming part of this Annual Report.

3. DIVIDEND

Your Directors have not recommended dividend for the financial year March 31, 2018.

4. RESERVES

There is no amount proposed to be transferred to the General Reserve during the year under review.

5. SUBSIDIARY AND ASSOCIATES COMPANIES

As on March 31, 2018, your company has one subsidiary company and five associate companies, details whereof as under:

- SUBSIDIARY COMPANY

Lykis Marketing is the wholly owned subsidiary of Lykis Limited. The Company has main focused on domestic market of Tea and FMCG product.

In accordance with the provision of section 136 of the Companies Act, 2013, the annual report of the Lykis Marketing Private Limited are placed on the company website i.e. www.lykisgroup.com

- ASSOCIATE COMPANY

Lykis Packaging Private Limited, Lykis Soaps Private Limited, Lykon Foods Private Limited, Lykis Confectionery Private Limited and Lyfresh Private Limited are the associate companies. Your company has sold of its all shareholding held in Lykis Confectioners Private Limited, Lyfresh Private Limited and Lykis Soaps Private Limited on July 02, 2018, August 01, 2018 and August 16, 2018 respectively consequent upon which these company ceased to be the Associate companies.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s subsidiary and associate company in Form AOC-1 is attached as Annexure A to this report.

6. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provision of Section 129(3) of the Companies Act, 2013 and Regulation 33 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the consolidated financial statements forms part of this Annual Report and shall also be laid before the ensuing Annual General Meeting of the company.

7. DIRECTOR''S RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, it is hereby confirmed that:

i. In the preparation of annual accounts, the applicable accounting standards have been followed and they are no material departures.

ii. They have selected such accounting policies and applied them consistently and made judgment 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 and loss of the company for that period.

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in according with the provision of this Act for safeguard the assets of the company and for preventing and detecting fraud and other irregularities.

iv. They have prepared annual accounts on a going concern basis.

v. They have laid down internal financial control to be followed by the company and that such internal financial control are adequate and were operating effectively.

8. BOARD OF DIRECTOR

In accordance with the provision of Companies Act, 2013, Mr.Nadir Dhrolia retires by rotation in the forthcoming Annual General Meeting and being eligible for re-appointment. The Board of Directors recommends his re-appointment.

The necessary resolutions for the appointment /re-appointment of the above mentioned director and their brief profile have been included in the notice convening the ensuing Annual General Meeting.

All the directors of the company have confirmed that they satisfy the fit and proper criteria as prescribed under the applicable regulations and that they are not disqualified from being appointed as directors in terms of section 164(2) of the companies act, 2013.

The Board met five times during the financial year 2017-18, the details of which are given in the Corporate Governance Report that form a part of Annual Report.

9. KEY MANAGERIAL PERSONNEL Company Secretary and Compliance Officer

During the year under review, Mr. Shailesh K. Bhaskar and Ms. Rupa Khanna being Company Secretary and Key Managerial Personnel of the Company resigned w.e.f from April 21, 2017 and November 25, 2017 respectively. The Board of Directors places on record the contribution made by them during their association with the company.

Ms. Neha Mankame was appointed as the Company Secretary and Key Managerial Personnel w.e.f 14th February, 2018 and also as the Compliance Officer of the Company w.e.f May 30, 2018 in place of Mr. Udayan Bal.

Chief Executive Officer and Chief Financial Officer

Mr. Pawan Kumar Gupta Chief Executive Officer (CEO) and Mr. Ankit Maheshwari Chief Financial Officer (CFO) of the company has resigned from the services of the company with effect from February 27, 2018. The Board of Directors places on record the contribution made by them during their long association with the company.

Further, The Board has appointed Mr. Pratik Kedia as Chief Financial Officer of the company w.e.f August 13, 2018. As on March 31, 2018 Mr. Pawan Kumar Gupta (CEO), Mr. Ankit Maheshwari (CFO) and Ms. Neha Mankame (CS) were the Key Managerial Personnel of the company.

10. INDEPENDENT DIRECTORS

Mr. Mayank Jhunjhunwala, Mr. Rajendra Manilal Shah and Mrs. Jyoti Budhia are Independent Directors of the company. The company has received declaration from all Independent Directors of the company confirming that they meet with criteria of Independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1) SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015.

11. BOARD EVALUATION

The Board of Directors have carried out an annual evaluation of its own performance, board committee and individual directors pursuant to provision of the Act and the corporate governance requirement as prescribed by the Securities and Exchange Board of India (Listing Obligation & Disclosure Requirement) Regulation 2015. The performance of the board was evaluated by the board after taking inputs from all the directors on the basis of criteria such as the Board Composition and structure, effectiveness of board process, information and functioning, etc. as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017.

In a separate meeting of Independent directors which was held on February 14, 2018, performance of no independent and the board as whole was evaluated, taking into account the views of executive directors and nonexecutive directors. Performance evaluation of Independent director was done by the entire board, excluding the independent director being evaluated.

12. EXTRACT OF ANNUAL RETURN

Pursuant to provision of section 134(3) (a) of the Companies Act, 2013, the extract of Annual Return in Form MGT-9 is attached as Annexure B.

13. AUDITORS

- STATUTORY AUDITOR

M/s Sanjay P Agarwal & Associates, Chartered Accountant (Firm Registration No: 325683E) were appointed as Statutory Auditor of the Company by the Members at the 30th Annual General Meeting held on 30th September, 2014 to hold office from the conclusion of 30th Annual General Meeting till the conclusion of 35th Annual General Meeting on such remuneration as may be determined by the Board of Directors.

Pursuant to the amendment to section 139 of the Companies Act, 2013 which was notified on May 07, 2018, ratification of appointment of Statutory Auditor at every AGM is no longer required.

There are no qualification, reservation or adverse remark or disclaimer made in the audit report for the financial year 2017-18.

- SECRETARIAL AUDITOR

Pursuant to provision of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the companies had appointed Mr. Bijay Agarwal, Practicing Company Secretary as Secretarial Auditor of the company.

The Secretarial audit report is self explanatory. The Secretarial Audit Report is enclosed as Annexure C to the Board''s Report.

14. COMPLIANCE WITH SECRETARIAL STANDARDS

The company has complied with Secretarial Standards on meetings of Board of Directors and on General Meeting issued by the Institute of Company Secretaries of India in terms of Section 118 (10) of the Companies Act, 2013.

15. INTERNAL FINANCIAL CONTROL

The company has put in place adequate policies and procedures to ensure that system of Internal Financial Control is commensurate with the size and nature of the company''s business. The evaluation of these internal financial controls were done through internal audit process, established within the company and also through appointing professional firm to carry out such tests by way of systematic internal audit programme. Based on the review of the reported evaluations, the directors confirms that the financial statement for the year ended March 31, 2018, are in accordance with the applicable accounting standards.

16. RISK MANAGEMENT

The company has established a robust Risk Management system to identify & assess the key risks and ensure smooth and efficient operations of the business. Your company is well aware of these risks and challenges and has put in place mechanism to ensure that they are managed and mitigate with adequate timely actions. The audit committee reviews business risk area covering operational, financial, strategic and regulatory risks.

17. RELATED PARTY TRANSACTION

All contracts, arrangements/ transactions entered into during the year by the company with Related Parties were in ordinary course of business and on an arm''s length basis. During the year under review, the company had not entered into any contract/ arrangement/ transactions with related parties which could be considered as material. The particulars of contracts or arrangements referred to in section 188 (1) of the Companies Act, 2013 with related parties and as mentioned in form AOC-2 is attached as Annexure D.

18. PARTICULARS OF EMPLOYEE

In terms of the provisions of section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report. However pursuant to provision of section 136(1) of the Act, this report is being sent to the shareholders excluding the aforesaid information. Any shareholder interested in obtaining said information, may write to the Company Secretary at the registered office/ Corporate Office of the company and the said information is open for inspection at the Register office of the company.

19. HUMAN RESOURCES

Your Company considers Great Brand and Great People as its biggest asset. The Company is continued to organize various inbound and outbound training programs, recreation and team building activities to enhance employee skills and motivation. Company also conducted various workshops and events for grooming and upgrading vocational skills of the talent pool in order to meet future talent requirements.

20. DEPOSITS

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

21. CORPORATE SOCIAL RESPONSIBILITY

Lykis Limited is committed to empower the local communities in its area of operation and support them in their path to sustainable and inclusive growth. This commitment is fundamental to the Company''s long term success. Lykis Limited is focused on creating shared value and making a difference through our Corporate Social Responsibility initiatives.

i. Being in the FMCG Sector, the company is extremely environmental friendly and strives to contribute towards preserving nature and our environment.

ii. The Company provides several local employment opportunities and contributes towards improvement in standard of living.

iii. Immense care is taken to ensure that the necessities of all our stakeholders are met. We treasure our employees and ensure their happiness in several ways.

iv. The employees are provided with a healthy working environment, free lunch and proper sanitation and water supply. Considerable amount has been invested into infrastructure to ensure health and safety of our employees.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 are given the notes to the Financial Statements.

23. MEETINGS OF BOARD OF DIRECTORS

The board met 5 (five) times during the year. The details about the board meeting and the attendance of the directors are provided in Corporate Governance Report.

24. AUDIT COMMITTEE

The audit committee comprises of three members i.e. Mr. Mayank Jhunjhunwala, Ms. Jyoti Budhia, and Mr. Prince Tulsian. The Board of Directors has accepted all the recommendations made by Audit Committee from time to time.

25. PREVENTION OF SEXUAL HARASSMENT POLICY

Considering gender equality, the company has zero tolerance for sexual harassment at workplace. The Company has an Anti-Sexual Harassment Policy in line with the requirement of the Sexual Harassment of woman at workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaint receive regarding sexual harassment.

The following is a summary of the Sexual Harassment complaints received and disposed off during the year 2017-18

1. No. of Complaints received: NIL

2. No. of Complaints disposed off: NIL

26. WHISTLE BLOWER/ VIGIL MECHANISM

The Company has established a Vigil Mechanism and adopted a whistle blower policy for its directors and employees, to report concern about unethical behavior, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy. The mechanism provides adequate safeguards against victimization of persons who use this mechanism. Policy on whistle blower is placed on the company''s website.

27. CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under the SEBI (Listing Obligation & Disclosure Requirements) Regulation, 2015 forms an integral part of this report. A certificate from Dinesh Agarwal, Practicing Company Secretary regarding compliance on conditions of corporate governance as stipulated in the Listing Regulations is also appended to the report on Corporate Governance.

28. MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

The Management''s Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 of SEBI (Listing Obligation & Disclosure Requirement) Regulation, 2015 is presented in a separate section forming part of the Annual Report.

29. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

A. Conservation of Energy:

The Company has initiated to take adequate measures for conservation of energy. The Company shall explore alternative source of energy as and when the necessity arises.

B. Technology Absorption:

The Company continues to use the latest technologies for improving the productivity and quality of its services and products.

C. Foreign Exchange Earnings and Outgo:

Current Year

Previous Year

Foreign Exchange Outgo

1064.02

141.60

Foreign Exchange earned

15476.44

8645.33

30. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which could affect the Company''s financial position which have occurred during the year and till the date of this report.

31. ACKNOWLEDGMENT

The Board of Director take this opportunity to thank all its shareholders, valued customer, banks, government and statutory authorities, investor and stock exchange for their continued support to the company. Your Directors wishes to place on record their deep sense of appreciation for the committed services by employees. Your Directors acknowledge with gratitude the encouragement and support extended by our valued shareholders and the Promoters of the Company.

For and on behalf of the Board of Directors

Vijay Kedia

Place: Kolkata Chairman

August 13, 2018 DIN: 00230480

Director’s Report