Laffans Petrochemicals Ltd Directors Report.
The Directors present the 26th Annual Report of the Company along with the audited financial statements for the financial year (FY) ended on March 31, 2019.
FINANCIAL SUMMARY/HIGLIGHTS, OPERATIONS, STATE OF AFFAIRS:
The financial performance of the Company for the year ended March 31, 2019 is summarized below:
(Amount in Rs.)
|Particulars||Year Ended 31.03.2019||Year Ended 31.03.2018|
|Profit before exceptional items & tax||(1,09,43,452)||49,79,471|
|Current Tax for the year & Prior Year||-||(27,00,000)|
|Deferred Tax Liability||24,08,442||44,97,110|
|Profit after taxation||(85,35,010)||67,76,581|
As per Regulation 33 of the Securities board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (herein after referred to as "Listing Regulation") and applicable provisions of the Companies Act, 2013 read with the rules thereunder, the Financial Statements of the Company for F.Y. 2018-19. The Financial Statements for the year 2018-19 have been prepared in compliance with the new set of Indian Accounting standards (IND AS) and the comparatives for the corresponding previous financial year 2017-18 have also been prepared in compliance with the new set of Indian Accounting standards (IND AS). The Ministry of Corporate Affairs (MCA), vide its notification in the official gazette dated 16th February, 2015, has made applicable the India Accounting Standard (IND AS) to certain classes of Companies. For the Company, Ind AS was applicable from 1st April, 2017 with a transaction dated of 1st April, 2016. The Financial results have been prepared in accordance with the recognition and measurement principles laid down under Ind AS, as presented under Section 133 of Companies Act, 213 ("the Act") read with the relevant rules issued there under and the relevant accounting principles generally accepted in India as applicable.
Operating & Financial Performance & Internal Control:
Your company has generated gross revenue of Rs. 5,33,45,756 as compared to Rs. 4,80,63,224 for previous year. The income by way of trading during the year amounted to Rs. 377,27,845 compared to Rs. 156,60,292 in the previous year. Income from services amounted to Rs. Nil compared to Rs. Nil in the previous year. The company is focusing more on polymer imports rather than chemical imports in lieu of erratic price movements and fluctuation of currency.
The company is exploring imports of Coal as part of its commodity trading which is likely to commence shortly.
The Company has in place an established internal control system designed to ensure proper recording of financial and operational information and compliance with various internal controls and other regulatory and statutory compliances. Code of Internal controls which require that the Director review the effectiveness of internal controls and compliances controls,financialand operational risks, risk assessment and management systems and related party transactions, have been complied with.
The income tax demand on the company of around Rs 10 crore that was passed by the Assessment officer under section 143(3) of the Income Tax Act where the company went into appeal and thereby pending with the Income Tax Appellate Tribunal in respect of Assessment Year 2012- 2013 was heard on 22.03.2019. Your company is confident of the demand being dismissed and the appeal being allowed based on the facts of the case.
Companys Policies on Remuneration, Whistle Blower and also Code of Conduct applicable to Directors and Employees of the Company has been complied with. These Policies and Code of Conduct are available on the Companys website www.laffanspetrochemical.com
There is no change in the nature of the business of the Company. There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future. There were no material changes and commitment affecting the financial position between March 31, 2019 and date of this Report of Directors.
Subsidiaries, Joint Venture or Associates Companies during the Year:
You Company has neither any Subsidiary nor Joint Venture nor Associates Company. During the year under review, none of the Companies have become or ceased to be Companys Subsidiaries, Joint ventures or Association Companies.
The Company has not invited/ accepted any deposits from the public during the year ended March 31, 2019. There were no unclaimed or unpaid deposits as on March 31, 2019.
Transfer to Reserve:
The Company has not transferred any amount to reserves.
To conserve resources which would assist in future growth of the Company, no dividend is recommended by the Board for the financial year ended March 31, 2019.
Significance and Material Order Passed By the Regulators or Courts or Tribunals.
There were no significance and material orders passed by regulators or courts or tribunals impacting the going concern status and company operations in future. There were no material changes and commitments affecting the financial position of the company occurring between March 31, 2019 and the date of this Report of the Directors.
DIRECTORS AND KEY MANAGERIAL PERSONNEL RETIREMENT BY ROTATION:
In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Jaideep Seth (DIN: 03130620) is due to retire by rotation at the 26th Annual General Meeting and being eligible, offer himself for re- appointment.
Brief profile of the proposed appointee together with other disclosures in terms of Regulation 36 (3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 are mentioned in the Notice which is part of this Annual Report.
APPOINTMENT AND RESIGNATION OF DIRECTOR AND KEY MANAGERIAL PERSONNEL:
Appointment of Mr. Deepak Jagannath Roy (DIN: 08023836) as an Independent Director with effect from 13th August, 2018.
Number of meeting of the Board:
During the financial year 4 (four) Board Meetings and 4 (four) Audit Committee Meetings were convened and held.
The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
Directors Responsibility Statement:
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Sections 134(3) (c) read section 134(5) of the Companies Act, 2013.
(i) In the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(ii) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2019 and of the profit and loss of the company for that period;
(iii) the directors had 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 irregularities;
(iv) The directors had prepared the annual accounts on a going concern basis; and
(v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively
(vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Statement on declaration given by independent directors under sub-section (6) of section 149:
The Company has received the declaration from each Independent Directors that they meet the criteria of independence laid down under Section 149(6) of Companies Act, 2013, under Regulation 16(b) of SEBI (LODR) Regulations, 2015.
Particulars of loans, guarantees or investments under section 186:
The Company has not made any loans or given Guarantees or provided security to any person and has not made any investment that attracts the provisions of Section 186 of the Companies Act, 2013 during the Financial Statements.
Nomination & Remuneration Policy:
The Board has framed a policy on the recommendation of the Nomination & Remuneration Committee, which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection, appointment and remuneration of Board Members/ Key Managerial Personnel and other employees. Is annexed herewith as "Annexure A".
Related Party Transactions:
There were contracts or arrangements entered into by the company during the year, which attracts the provision of Section 188 of the Companies Act, 2013. Details of which provided in form AOC-2. All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. Thus not requires the approval of shareholders. All Related Party Transactions are placed before the Audit Committee for approval.
There are no materially significant related party transactions made by the Company with promoters, directors, KMP or other designated persons which may have a potential conflict with the interest of the Company.
The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website www. laffanspetrochemical.com .
Conservation of energy, technology absorption, foreign exchange earnings and outgo:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure B".
Risk management policy and its implementation:
The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.
Internal Control System:
The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors.
Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its committees and Individual Directors:
The formal annual evaluation has been done by the board of its own performance and that of its committee and individual directors on the basis of evaluation criteria specified in the Nomination and Remuneration policy of the Company. A member of the Board/committee did not participate in the discussion of his/her evaluation.
Remuneration of Directors, Key Managerial Personnel and particulars of employees:
The remuneration paid to the Directors is in accordance with the Nomination and remuneration policy formulated in accordance with Section 178 of the Companies Act, 2013 and Regulation 19 of the listing Regulation (Including any statutory modification(s) or re-enactments(s) thereof for time being in Force).
The information required pursuant to Section 197 of the Companies Act, 2013 read rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, The prescribed particulars of employees required under section 134(3)(q) read rule 5 of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014, in respect of employees of the Company is not provided, as there are no employees drawing remuneration exceeding the limits prescribed under aforesaid rules.
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.
Further details of remuneration of each director have been provided under MGT-9 extract of Annual Return appended as Annexure D of this report. Hence not repeated the same under corporate governance report.
At the Annual General Meeting held on 28th September, 2018 M/s. Pushp K. Sahu & Co., Chartered Accountant, Statutory Auditors of the Company having registration number (FRN No. 128013W) were appointed as statutory auditors of the Company for a term of 5 (five) years from the conclusion of the 25th AGM (subject to ratification of such appointment by the Members at every AGM, if required) till the conclusion of the 30th AGM at such remuneration as may be determined by the Board of Directors and the said Auditors from time to time. The Company has received a certificate from the statutory auditors to the effect that their re-appointment, if made, would be within the limits prescribed.
The said Auditors have confirmed their eligibility for appointment in terms of Section 139 of the Act. There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Pushp. K. Sahu & Co, Statutory Auditors, in their report.
Independent Practicing Chartered Accountants were appointed as an Internal Auditor for Financial Year 2018-19, they performed the duties of internal auditors of the Company as prescribed under the Act and their report is reviewed by the audit committee from time to time.
Secretarial Auditors and Secretarial Audit Report:
Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Board has appointed M/s. Jitendra Lekhwani, Practicing Company Secretary, to conduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report for the financial year ended March 31, 2019 is annexed herewith marked as Annexure C to this Report. There is no qualification, reservations or adverse remarks made by SecretarialAuditors in the Audit Report.
According to information and explanation given to us, the maintenance of cost records has not been prescribed by the Central Government sub section (1) of section 148 of the Companies Act 2013
Reporting Of Frauds by Auditor:
During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit Committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which needs to be mentioned in the Boards Report.
Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:
In order to prevent sexual harassment of women at work place the Company has adopted a policy for prevention of Sexual Harassment of Women at workplace under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and during the year Company has not received any complaint of such harassment.
In compliance with the SEBI regulation on prevention of Insider Trading, your Company has framed a comprehensive code which lays down guidelines and advises the Directors and employees of the Company on procedures to be followed and disclosures to be made, while dealing in securities of the Company. During the year under review, the Company adopted Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive information and the Code of Conduct for Prohibition of Insider Trading in accordance with SEBI (Prohibition of Insider Trading) Regulations, 2015.
The Extract of the Annual Return in form MGT-9:
The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure D".
Transfer of Amounts to Investor Education and Protection Fund:
Your 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).
During the Year, Evaluation cycle was completed which included the Evaluation of the Board as a whole, Board Committees and Directors. The exercise was done in the Independent Directors meeting and Nomination and Remuneration Committee meeting of the Company. The Evaluation process focused on various aspects of the Board and Committees functioning such as composition of the Board and Committees, experience and competencies, performance of specific duties and obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and independent judgment.
Corporate Social Responsibility (CSR):
Your Company does not fall in the criteria mentioned under Section 135 of the Companies Act, 2013, for applicability of the provisions of Corporate Social Responsibility. Hence, your Company is not required to constitute CSR Committee and to comply with other provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014.
Research & Development:
As Company is not into manufacturing activity, there was no Research and Development activity carried out by the Company during the financial year under review.
Website of the Company:
The Company maintains a website www.laffanspetrochemical.com where detailed information of the company and its products are provided.
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 Code has been placed on the Companys website www.laffanspetrochemical.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.
All the Board Members and the Senior Management personnel have confirmed compliance with the Code.
Vigil mechanism/whistle Blower Policy:
The Company has established a vigil mechanism/Whistle Blower Policy for Directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report annexed to this Report.
Following details are also available on the website of the Companies on www.laffanspetrochemical.com
1. The details of such familiarization programmes
2. The policy on Related Party Transactions
3. Code of conduct for Board of Directors and Employees
4. Code of internal procedure and conduct under insider trading regulation.
5. Policy on Board Diversity
6. Nomination & Remuneration Policy etc.
Report on Corporate Governance
A separate report on Corporate Governance is attached to this report along with Statutory Auditors certificate on its compliance in "Annexure F"
Management Discussion and Analysis Report:
Managements discussion and analysis Report is annexed herewith as "Annexure E".
The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to Meetings of the Board of Directors and General Meetings, respectively, have been duly followed by the Company.
Disclosure with Respect to Demat Suspense Account / Unclaimed Suspense Account
The Company reports that no shares issued pursuant to Public Issue remains unclaimed hence the Clause of Disclosure with respect to Demat Suspense Account / Unclaimed Suspense Account is not applicable.
Your Company has tied up with Central Depository Services (India) Ltd. (CDSL) to enable the shareholders to trade and hold share in an electronic/dematerialized form. The shareholders are advised to take benefit dematerialization.
All material Risks faced by the Company are identifiedand assessed. For each of the risks identified, corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting risk on a periodic basis.
Your Directors take this opportunity to place on record their appreciation and sincere gratitude to the Government of India, Governments of Gujarat & Maharashtra, Authorities and the Bankers to the Company for their valuable support and look forward to their continued co-operation in the years to come. Your Directors also acknowledge the support and co-operation received from the employees and all those who have helped in the day to day management.
|For and on behalf of the Board of Directors|
|Place: Mumbai||Sandeep Seth||Anisha Seth||S.R. Narayanan|
|Dated: 5th September, 2019||(Managing Director)||(Director)||(Company Secretary)|
|DIN: 00316075||DIN: 06867960|