BOARDS' REPORT To, All the Shareholders, Your Directors have pleasure in presenting the Twenty First Annual Report of the company together with the Audited financial accounts for the financial year ended on 31st March 2015. OPERATIONAL REVIEW For the year ended as on March 31, 2015 the company has recorded a strong revenue and margin performance. Your Company has achieved turnover of Rs. 8365.79 Lacs as against 7705.19 Lacs in the previous year. The Net Profit of the Company has shot up by approx 26% amounting to Rs 214.48 Lacs as against Rs. 170.25 Lacs in the previous year due to increase of approx 9% in the turnover of the Company. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS Your company has inaugurated new plant on May, 3rd 2015 situated at Kaladera, Tehsil Chomu, and District Jaipur in Rajasthan. DIVIDEND & RESERVE To conserve the resources of the Company for its future growth, the Board of Directors of the Company are not recommending any dividend for the financial year 2014-2015. During the year under review Rs. 277613/- was transferred from Revaluation Reserve to General Reserve and Rs. 11 also transferred to General Reserve SHARE CAPITAL During the year under review, your Company's Authorised Share Capital has remain unchanged at 15,00,00,000 (Rupees Fifteen Crore) comprising 1,50,00,000 Equity Shares of 10/- each. During the year under review, your Company's paid up equity share capital has also remained unchanged at 13,67,87,990 (Rupees Thirteen Crore Sixty Seven Lacs Eighty seven Thousand Nine Hundred Ninety only) comprising 13,67,87,99 Equity Shares of 10/- each. FINANCE: Cash and cash equivalents as at March 31, 2015 was Rs. 187.17 lakh. The company continues to focus on judicious management of its working capital, Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. FIXED DEPOSITS: Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of the investments made by company are given in the notes to the financial statements. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined in the Internal Audit Manual. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee of the Board & to the Chairman & Managing Director.The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES As per Provisions of Section 135 of the Company Act 2013, and rules made there under, the CSR is not applicable on your company for the Financial Year 2014-2015. CONSERVATION OF ENERGY, TECHNOLOGY, FOREIGN EXCHANGE EARNINGS AND OUTGO Information in accordance with the provisions of section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in Annexure "B" to this report. INDUSTRIAL RELATIONS: During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels. DIRECTOR'S & KMP During the year your company has appointed u/s 203 Miss Priyanka Gattani Company Secretary cum Compliance Officer (KMP) and Mr. Rakesh Soni as Chief Financial Officer (KMP). Appointment of Mrs. Preeti Goyal Women independent director not liable to retire by rotation has been made and reappointment of Sidharth Singh and Gauri Shankar Kandoi as Independent Director not liable to retire by rotation has been made to give effect the provision of Companies Act 2013. Shri Radhe Shyam Mangal, an independent director submitted his resignation to the Board on 30, March 2015 due to personal reason. The same was accepted by the Board in its meeting held on 30, March 2015. The Board hereby places on record its sincerest thanks and gratitude for the invaluable contribution made by Shri. Radhe Shyam Mangal towards the growth and development of the company during his tenure as a director. The Board also on behalf of the members wishes Shri. Radhe Shyam Mangal a long and healthy life. As per Article 107 and 108 of Article of Association of the Company Shri Ramesh Chand Agarwal, Directors of the Company are liable to retire by rotation in the forthcoming Annual General Meeting and being eligible, offer themselves for reappointment. DECLARATION BY INDEPENDENT DIRECTOR Independent Directors of your company has given declaration under section 149(6) of their independency. BOARD EVALUATION Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. REMUNERATION POLICY The Board has, on the recommendation of the Appointment & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. MEETINGS The board of the company has met as many as Twenty two times and the details of the same are given in Corporate Governance Report Annexure "F". DIRECTORS RESPONSIBILITY STATEMENT To the best of knowledge and belief and according to the information and to the information and explanation obtained by them, your directors make the following statement in terms of section 134(3) a) In the preparation of Annual Accounts of the company, the applicable Accounting Standards have been followed along with proper explanation relating toe material departures from the same, if there any. b) The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true & fair view of the state of affairs of the company at the end of the financial year ended March 31, 2015 and of the profit of the company for the year ended on that date. c) The Directors have taken proper and sufficient care 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 irregularity. d) The Directors have prepared the Annual Accounts of the Company on a going concern basis. e) The director has laid down internal financial control to be followed by the company and such internal financial control are adequate and were operating effectively; and f) The director has devised proper system to ensure compliance with the provision of all applicable law and that such system operating effectively RELATED PARTY TRANSACTIONS: All related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large.Annexure "H" SUBSIDIARY COMPANIES: The Company does not have any subsidiary as on 31.03.2015 CODE OF CONDUCT: The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all employees in the course of day to day business operations of the company. The Company believes in "Zero Tolerance" against bribery, corruption and unethical dealings / behaviours of any form and the Board has laid down the directives to counter such acts. The Code has been posted on the Company's website www.leharfootwear.com. The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the designated employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. The Code gives guidance through examples on the expected behaviour from an employee in a given situation and the reporting structure. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. All Management Staff were given appropriate training in this regard. Declaration by managing director regarding compliance by board members and senior management personnel with the company's code of conduct is given in Annexure "C" VIGIL MECHANISM / WHISTLE BLOWER POLICY: The Company has a vigil mechanism named Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. In staying true to our values of Strength, Performance and Passion and in line with our vision of being one of the most respected companies in India, the Company is committed to the high standards of Corporate Governance and stakeholder responsibility. The Company has a Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The Whistle Blower Policy ensures that strict confidentiality is maintained whilst dealing with concerns and also that no discrimination will be meted out to any person for a genuinely raised concern. A high level Committee has been constituted which looks into the complaints raised. The Committee reports to the Audit Committee and the Board. PREVENTION OF INSIDER TRADING: The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. COMPOSITION AUDIT COMMITTEE This is forming part of Report on corporate governance as given in Annexure "F" AUDITOR'S REPORT/ SECRETARIAL AUDIT REPORT: The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. Annexure "E" AUDITOR M/s A. Bafna & Company, Chartered Accountants, Jaipur holds office until the conclusion of the ensuing Annual General Meeting and being eligible and offer themselves for re-appointment. The Company has received a letter from the Auditors to the effect that their appointment, if made would be within the provision of Companies Act 2013. M/s A. Bafna & Company, Chartered Accountants have also, under section139 (1) of the Companies Act, 2013, furnished a certificate of their eligibility for re appointment. SECRETARIAL AUDIT Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Naredi Vinod & Associates, a firm of company Secretaries in practice to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure E" EXPLANATION REGARDING THE QUALIFICATION The auditor has given a qualified Audit Report against the amount standing in the Other Assets and the Management's explanation for the same is given under Note 15.of notes on Financial Statements as under: There had occurred a fire on 24.02.2008 at the registered office & factory premises of the company. The Insurance Company has passed the claim of the company and there is a shortfall of Rs. 1,86,74,521 against the said claim. No provision is made for the same, as the company has not accepted the assessment of loss from insurances companies and has invoked the arbitration clause of the insurance contract and company is of opinion that they will receive the balance amount of Rs. 1,86,74,521 from the insurance companies. There are no significant and material order passed by the Regulators/ court that would impact the going concern status of the company and its future operations. EXTRACT OF ANNUAL RETURN The Details forming part of extract of Annual Return in Form MGT-9, as required under section 92 of the Companies Act, 2013, is included in this report as Annexure-D and forms an integral part of this report RISK MANAGEMENT Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing agreement, the company has constituted a Risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report. At present the company has not identified any element of risk which may threaten the existence of the company. PARTICULARS OF EMPLOYEES The information required pursuant to Section 197 read with Rule 5 (1) (i) of The Companies (Appointment and Remuneration) Rules, 2014 in respect of ratio of remuneration of each director to the median remuneration of the employees of the Company for the Financial Year, will be made available for inspection at its registered office of the Company during the working hours for a period of twenty one days before the date of annual general meeting of the company pursuant to Section 136 of the Companies Act, 2013 and members, if any interested in obtaining the details thereof, shall make specific request to the Company Secretary and Compliance officer of the Company in this regard. PAYMENT OF LISTING FEE Your company has paid Annual listing fee of BSE for the F.Y. 2015-16 CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are set out as separate Annexure "F" & "G" respectively together with the Certificate from the auditors of the Company regarding compliance with the requirements of Corporate Governance as stipulated in Clause 49 of the Listing Agreement. ACKNOWLEDGEMENT The Directors of your Company acknowledge a deep sense of gratitude for the continued support extended by Investors, Customers, Business Associates, Bankers and Vendors. Yours Directors place on record their appreciation for the significant contribution made by the employees at all levels through their hard work and dedication. The Directors also thanks the various Government and Regulatory Authorities and last but not the least the Shareholders for their patronage, support and faith in the company. The Board looks forward to their continued support in the years to come. By the order of the Board For Lawreshwar Polymers Limited (Ramesh Chand Agarwal) Chairman DIN: 00108287 Place: Jaipur Dated: 27.05.2015 |