Directors' Report TO THE MEMBERS, Your Directors present their Seventeenth Annual Report along with the audited Financial Statements for the year ended on 31st March, 2011. 1. OPERATIONS Your directors inform you that since company was taken over by new management and immediate after takeover, the management has taken lots of steps and initiatives for long term survival and growth of the Company. The Company has taken up factory premises on rent and started manufacturing of garments in Ludhiana in Punjab. The company has made capital expenditure on installation of garment machines imported from abroad. The Company has also set up another garment manufacturing unit at Nalagarh in Himachal Pradesh in the area notified by Government for receiving various subsidies and benefits. The year saw a increase in sales in both the Domestic and Export Markets. During the financial year under review, the Company achieved sales of s 13334.99 Lacs against s 258.51 lacs in the previous year. The performance in terms of net profit was substantially below expectations mainly because of appreciation of rupee The Company is on horizon of expansion track and wish to set international quality standards to mark its presence worldwide in garment business. The Company is also planning to get heights in wholesale distributorship business of Computer hardware, software, papers, etc. Your directors are confident that operations would bring positive results in near future. 2. SUB DIVISION OF EQUITY SHARES In order to improve liquidity position and easy tradability of shares, shareholders in Extra Ordinary General Meeting held on 21.08.2010 has approved the sub division of Equity shares capital of the Company by sub dividing the Equity Shares of face value of s10 each to s1 each, however it is approved and all formalities is completed and the company equity shares face value of s 10 each to s1 each w.e.f 15.06.2011. 3. SUBSIDIARIES As required under section 212 of the Companies Act, 1 956, the audited statements of accounts, alongwith the Reports of the Board of Directors and Auditors thereon of M/s EZY Infosoft Pvt. Ltd. is annexed. 4. DIVIDEND In view of the loss for the year and carried forward losses of the Company, your Directors do not recommend any dividend for the year under review. 5. DIRECTORS During the year, Mr. Yogesh Thakur was appointed as Whole Time Director of the Company on 27.5.2011 and Mr. Kulbhushan Sharma was appointed as Additional Director of the Company on 27.05.2011 and 28.05.2011 and Mr. Vikash Shekhar, Mr. Birendra Kumar, Mr. Akash Deep Sharma and Ms. Chay Suet Meng resigned from directorship of the Company w.e.f 20.01.2011, 27.05.2011, 14.11.2011 and 14.11.2011 respectively. In accordance with the provisions of the Companies Act, 1956 and the Company's Articles of Association, Mr Kwangsoo Kim, director of the Company is liable to retire by rotation and being eligible offers himself for re-appointment. The board recommends the appointment of Mr Kwangsoo Kim. 6. FIXED DEPOSITS The Company have not accepted any Fixed Deposits from the Public in the Financial Year 2010-2011. 7. INTERNAL CONTROL SYSTEM The Company has a proper and adequate system of internal control. An extensive programme of internal audits and management reviews supplement the process of internal control. Properly documented policies, guidelines and procedures are laid down for this purpose. The Company has an Audit Committee comprising of majority of Independent, Non Executive and professionally qualified Directors, who interact with the statutory auditors and internal auditors in dealing with matters within its terms of reference. During the year under review, the Committee met five times. 8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT A detailed Report on Management Discussion and Analysis, pursuant to Clause 49 of the Listing Agreement is annexed to this report. 9. CORPORATE GOVERNANCE The Company has been practicing the principles of good Corporate Governance over years. The Board of Directors supports the broad principles of Corporate Governance. In addition to the basic governance issues, the Board lays strong emphasis on transparency, accountability and integrity. The Company has been in compliance with all the conditions of Corporate Governance as stipulated in Clause 49 of the Listing Agreement with Stock Exchange and a Certificate from the Auditors to this effect is enclosed as a part of the Corporate Governance Report. In terms of sub-clause (v) of Clause 49 of the Listing Agreement, Whole Time Director have confirmed the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee in terms of the said Clause. 10. DEPOSITORY SYSTEM As members are aware, your Company's shares are tradable compulsorily in electronic form and the Company has established connectivity with both the depositories, i.e., National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository System, members are requested to avail the facility of dematerialization of the Company's shares on either of the Depositories as aforesaid. 11. AUDITORS M/s. Doogar & Associates, Chartered Accountants, Statutory Auditors of the Company, retires at the ensuing Annual General Meeting and are eligible for reappointment. The Company has received the letter from them to the effect that their appointment, if made, would be within the prescribed limits under section 224(1B) of the Companies Act, 1956. The Notes on Accounts referred to in the Auditors' Report are self-explanatory and therefore do not call for any further comments. 12. TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, the declared dividends and interest on fixed deposits which remained unpaid or unclaimed for a period of seven years, if any, have been transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 205C of the said Act. 13. CONSERVATION OF ENERGY, TECH N OL OGY AB SORB TI ON AN D FOREIGN EXCHANGE EARNINGS AND OUTGO The information required under section 217(1)(e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 relating to "Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo" is annexed and forms an integral part of this Report. 14. PARTICULARS OF EMPLOYEES Particulars of employees as required under section 217(2A) of the Companies Act, 1956,read with the Companies (Particulars of Employees) Rules, 1975, as amended is annexed and forms an integral part of this Report. 15. PERSONNEL Your Directors place on record their appreciation for the significant contribution made by all the employees, who through their competence, hard work, solidarity and co-operation, have enabled the Company to cross new milestones. 16. TRADE RELATIONS The Board desires to place on record its appreciation for the support and cooperation that the Company received from its suppliers, distributors, retailers and other associates. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be Company's endeavor to build and nurture strong links based on mutuality, respect and cooperation with each other and consistent with customer interest. 17. LISTING WITH STOCK EXCHANGE The shares of the Company are presently listed at Bombay Stock Exchange Llimited. The Listing fee for the year 2011-12 has been paid to the Bombay Stock Exchange Limited. 18. AUDITORS' REMARKS Comments made by the Statutory Auditors in the Auditors' Report are self-explanatory and do not require any further clarification. 19. CEO/CFO CERTIFICATION The Certificate addressed to the Board of Directors of the Company required under Corporate Governance concerning the annual financial statement is annexed to the Corporate Governance Report. 20. DIRECTORS' RESPONSIBILITY STATEMENT In compliance of Section 217 (2AA) of the Companies Act, 1956, the Directors state that : 1. In the preparation of the annual accounts for the year ended 31st March, 2011, the applicable accounting standards have been followed. There are no material departures from the applicable accounting standards. 2. Such accounting policies have been selected and applied consistently and such judgments and estimates have been made as 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 ended on and loss of the Company for the year. 3. Proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and 4. The Annual Accounts has been prepared on a going concern basis. 21. ACKNOWLEDGEMENT Your Directors record their appreciation of support and co-operation extended by all shareholders, banks, government authorities and business associates towards growth of the Company. For and on behalf of the Board for LS Industries Limited Yogesh Thakur Whole Time Director Kulbhushan Sharma Additional Director Place : Nalagar Date : 14th November, 2011 |