DIRECTORS' REPORT To The Members, Your Directors have pleasure in presenting the 31st Annual Report together with the Audited Statements of Accounts for the year ended on 31st March, 2015. During the year under review, Mr. B.P Lohia, and Mr. Nazim Charania, Directors of the Companystepped down from the Board. The Board wishes to place on records its deep sense ofappreciation for the valuable contributions made by them to the Board and the Company duringtheir tenure as Directors. At the Board Meeting held on 27th November, 2014, Mr. Pawan Kumar Gupta, Chief ExecutiveOfficer, Mr. Ankit Maheshwari, Chief Financial Officer and Mr. Shailesh Bhaskar, CompanySecretary of the Company were designated as “Key Managerial Personnel” of the Companypursuant to Section 2(51) and 203 of the Companies Act, 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules, 2014. In accordance with the provisions of Section 152 of the Companies Act, 2013,Mr. Vijay KishanlalKedia(DIN: 00230480)retires by rotation at the forthcoming Annual General Meeting and hebeing eligible, offers himself for re-appointment. In order to broad base the Board and to comply with the requirements of Companies Act andStock Exchange Listing Agreement, Ms. Jyoti Budhia (DIN: 00332044) has been inducted on theBoard as an Additional Independent Women Director with effect from 31.03.2015. And Mr.Rajendra Manilal Shah (DIN: 07259569) as an Additional Independent Director with effect from14th of July, 2015. 4. DIVIDEND : The company has reported profit on stand-alone basis during the year under review. However, keeping in view the cash flow position, overall financial performance and requirement of funds in diversification of business, your Directors regret their inability to recommend any dividend during the period. 5. TRANSFER TO RESERVES: Due to setting off accumulated loss of earlier year and transition adjustment of fixed assets as per Companies Act, 2013 no amount transferred to reserves. 6. MATERIAL CHANGE IN NATURE OF BUSINESS: No material changes and commitments have occurred from the date of close of the financial year till the date of this Report, which affect the financial position of the Company. Except increase in shareholding of Promoter and Promoter Group from 24.81% to 31.04% due to Open Offer. 7. RISK MANAGEMENT : A detailed review of business risks and the Corporation's plan to mitigate them is presented to the Audit Committee and Board. The Corporation has been taking steps to mitigate foreseeable business risks. Business risk evaluation and management is an ongoing and continuous process within the Corporation and regularly updated to the Audit Committee and Board. 8. INTERNAL CONTROL SYSTEM AND ADEQUACY: The company has proper and adequate system of Internal Controls which is commensurate with the size and the nature of business, to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposal and commercial transactions are authorised, recorded and reported correctly. The internal control is supplemented by an extensive program of internal and external audits.The company accords greatest importance to the security of its information assets and has the requisite security controls and checks. Adequate storage and back-up system is maintained to ensure security and availability of data at all times. 9. SUBSIDIARY COMPANIES, JOINT VENTURE AND ASSOCIATE COMPANIES: a) Lykis Packaging Pvt. Ltd.(Formerly known as Lykis Pharma Pvt. Ltd.) It is a subsidiary of Lykis Limited. The Company is in the process of diversifying into Plastics/Packaging business to facilitate backward integration with Lykis Limited business. During the year name of Lykis Pharma Pvt. Ltd is changed to Lykis Packaging Pvt. Ltd. b) Lykis Marketing Pvt. Ltd It is a subsidiary of Lykis Limited. The Company was incorporated on 27.04.2012. In a very short period the Company has set up a marketing net work in 10 States.The Company is focused on domestic marketing of Tea and FMCG products and has achieved a turnover of Rs. 3.69 Crores during the year of its operation under review. c) Lykis Biscuits Pvt. Ltd, Lykis Agritech Pvt. Ltd & Lykis (UK) Limited: They are group Companies of Lykis Limited. During the under review, the Company incorporated these three new companies to expand & diversify business of the Company in future in India as well as overseas. 10. DEPOSITS: During the year under review, your Company did not accept any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. 11. CORPORATE SOCIAL RESPONSIBILITY: The company shows extreme concern about Corporate Social Responsibility (CSR) and this is evident from the day-to-day practices and policies that the company adopts. 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. 12. CORPORATEGOVERNANCE: SEBI has prescribed certain Corporate Governance Standards vide Clause 49 of the Listing Agreement.Your Directors re-affirm their commitment to these Standards and a detailed report on Corporate Governance together with the Auditor's Certificate on its Compliance is annexed hereto. 13. HUMAN RESOURCES: Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company's vision. Your Company appreciates the spirit of its dedicated employees. 14. DIRECTORS' RESPONSIBILITY STATEMENT : To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable Accounting Standards had been followed along with proper explanation relating to material departures. b) for the financial year ended March 31, 2015, such accounting policies as mentioned in the Notes to the financial statements have been applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fairview of the state of affairs of the Company and of the Profit and Loss of the Company for the year ended March 31, 2015. c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. d) the annual financial statements have been prepared on a going concern basis. e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively. f) that proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively. 15. MANAGEMENT DISCUSSION & ANALYSIS: In terms of the provisions of Clause 49 of the Listing Agreement, the Management Discussion & Analysis forms part of the Annual Report. 16. PARTICULARS OF EMPLOYEES: As required under the provisions of the Companies Act, 2013 and Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the statement of particulars of the employees concerned forms part of the Board's Report. Since, the company does not fall under the prescribed limit of the aforesaid provisions. Therefore, this requirement is not applicable to the Company. 17. CONSERVATION OF ENERGY, TECHNOLOGY AND FOREIGN EXCHANGE OUTGO: The particulars of conservation of energy, technology absorption and foreign exchange earnings and outgo in accordance with the provisions of Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith and forms part of this report. (Annexure I) . 18. AUDITORS AND AUDITORS'S REPORTS: Statutory Audit: Your Company's Auditors, M/s. Sanjay P. Agarwal & Associates, Chartered Accountants were appointed as the Statutory Auditors at the 30th Annual General Meeting for a term of 5 years. Their appointment is to be ratified by the Shareholders under Section 139 of the Companies Act, 2013 at the ensuing Annual General Meeting. The Statutory Auditor's Report does not contain any qualification, reservation or adverse remark. The Auditors' Report and the Notes on Account being self-explanatory are not dealt with separately. Secretarial Audit: Pursuant to the provisions of Section 204 of the Companies Act 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed Mr. Bijay Agarwal, Practicing Company Secretary , as its Secretarial Auditor to undertake the Secretarial Audit for the financial year 2014-15. The Secretarial Audit Report certified by our Secretarial Auditors, in the specified form MR-3 is annexed herewith and forms part of this report. (Annexure-II) 19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013: Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements. 20. EXTRACT OF ANNUAL RETURN: The details of the extract of the Annual Return in form MGT 9 is annexed herewith and forms part of this report. (Annexure III) 21. DECLARATION BY INDEPENDENT DIRECTOR(S): 1. The declaration of Mr. Mayank Jhunjhunwala, independent director of the company, pursuant to Section 149(6) of the Companies Act 2013 is attached as Annexure V 2. The declaration of Ms. Jyoti Budhia, independent director of the company, pursuant to Section 149(6) of the Companies Act 2013 is attached as Annexure VI 3. The declaration of Mr. Rajendra Manilal Shah, independent director of the company, pursuant to Section 149(6) of the Companies Act 2013 is attached as Annexure VII. 22. QUALIFICATION OR RESEREVATION OR ADVERSE MARK IN STATUTORY AUDIT REPORT: There is no such qualification or reservation or adverse remark reported by the Statutory Auditor of the company. 23. TRAINING & FAMILIRISATION PROGRAMME OF INDEPENDENT DIRECTORS: A Director, upon appointment, is formally inducted to the Board. In order to familiarise the Independent Directors about the various business drivers, they are updated through presentations at Board Meetings about the Financials of the Company and new product launches. They are also provided booklets about the business and operations of the Company. 24. BOARD EVALUATION: The Board has carried out an annual evaluation of its own performance, as well as the working of its Committees. The Board lay down the criteria for the performance evaluation. The contribution and impact of individual Directors were reviewed through a peer evaluation on parameters such as level of engagement and participation, flow of information, independence of judgment, conflicts resolution and their contribution in enhancing the Board's overall effectiveness. A feedback cum assessment of individual directors, the board as a whole and its committees was conducted. The feedback obtained from the interventions was discussed in detail and, where required, independent and collective action points for improvement put in place. 25. RELATED PARTY TRANSACTION POLICY: The Corporation has formulated a policy on Related Party Transactions which is disclosed on its website. All transactions entered into with related parties as defined under the Companies Act 2013 and Clause 49 of the Listing Agreement during the year under review were in the ordinary course of business and on an arms' length basis and did not attract the provisions of Section 188 of the Companies Act, 2013. With regard to transactions with Related parties under the provisions of Clause 49 of the Listing Agreement, prior approval of the Audit Committee was obtained wherever required. During the year under review, the Corporation 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 of the Rules prescribed under Chapter IX under the Companies Act, 2013 is annexed herewith and forms part of this report. (Annexure IV) 26. VIGIL MECHANISM / WHISTLE BLOWER POLICY : In Compliance with provisions of Section 177(9) of the Companies Act, 2013 and Clause 49 of the Listing Agreement, your Company has established a Vigil Mechanism/ Whistle Blower Policy to enable stakeholders including Directors and employees to report unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct. The Policy provides adequate safeguards against victimization of Director(s)/ employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any reported under this Policy will be appropriately and expeditiously investigated by the Chairman. Your Company hereby affirms that no Director/ employee has been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The Whistle Blower Policy has been disclosed on the Company's website and circulated to all the Directors / employees. 27. PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE: The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on prevention, prohibition and Redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under for prevention and Redressal of complaints of sexual harassment at workplace. The Company has not received any complaint on sexual harassment during the financial year 2014-15. 28. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS: There was no instance of any material order passed by any regulators or Courts or Tribunals impacting the going concern status of the company. ACKNOWLEDGEMENT The Directors wish to place on record their sincere thanks to the officials of concerned Govt. Departments, Statutory Authorities, Banks and other Institutions for their co- operation and assistance. The directors also wish to express their sincere thanks to the shareholders and the investing public who have placed due trust in the company and the staff and employees for rendering loyal and efficient services to the company. For and on behalf of the Board VIJAY KISHANLAL KEDIA Chairman Dated : 12th August, 2015 Place : Kolkata |