Lahoti Overseas Ltd Directors Report.

TO THE MEMBERS OF LAHOTI OVERSEAS LIMITED

Your Companys Directors take pleasure in presenting the Twenty Fourth Annual Report along with Audited Financial Statements of your Company and its subsidiaries for the Financial Year ended March 31, 2019.

FINANCIAL RESULTS:

The financial performance of the Company, for the year ended March 31, 2019 is summarized below:

Particulars

Standalone

Consolidated

For the Financial Year Ended

For the Financial Year Ended

March 31, 2019 March 31, 2018 March 31, 2019 March 31, 2018
Gross Income 64,658.49 46,258.42 64,666.68 46,259.74
Gross Profit before, Depreciation and Tax 2497.01 914.28 2,503.94 921.03
Less: Depreciation 352.79 265.03 352.78 265.03
Profit Before Tax 2144.22 649.25 2,151.16 656.00
Provision for Tax
Current Tax 541.93 197.00 550.82 197.02
Deferred Tax (13.51) 82.97 (13.51) 82.97
Profit after Tax before period items 1615.80 369.28 1613.86 376.01
Balance b/f from previous year 8734.34 8842.55 8,760.40 8,705.39
Amount available for appropriation 9722.31 8,920.04 10397.49 8,901.12
Less: Dividend Payout 58.34 116.68 58.34 116.68
Corporate Dividend Tax 11.88 23.76 11.88 23.76
Transferred to General Reserves - - - -
Reserves and surplus 12114.76 10,417.83 121146.93 10,580.34

RESULTS OF OPERATIONS:

During the year under review your Company has reported a standalone total income of Rs. 64,176.40 Lakhs as compared to Rs. 46,258.42 Lakhs for the previous year. Further, the net profit for the current year under review was Rs. 1,615.80 Lakh as compared to Rs. 369.28 Lakhs in previous year.

DIVIDEND:

Your Directors are pleased to recommend a final dividend @ 15% (i.e. 0.30) per equity share on 2,91,71,500 Equity shares of Face Value of Rs. 2 each amounting to 87,51,450 for the year ended March 31, 2019.

The Final Dividend, subject to approval of the Members will be paid within statutory period, to the Members whose name appear in the Register of Members as on the record date, i.e. September 21, 2019. The Dividend payout for the year under review has been formulated in accordance with the shareholders aspirations and the Companys policy to pay sustainable dividend linked to long term growth objectives of the Company to be met by internal cash accruals.

The Register of Members of the Company will remain closed from Sunday, September 22, 2019 to Saturday, September 28, 2019 (both days inclusive) for annual closing and determining the entitlement of the shareholders to the final dividend for Financial Year 2018-19

INVESTOR EDUCATION AND PROTECTION FUND

During the year, the unclaimed dividend amount of Rs. 66,880.00 pertaining to the dividend for the financial year ended March 31, 2011 was transferred to the Investor Education & Protection Fund in compliance with the provisions of Sections 124 and 125 of the Companies Act, 2013

In compliance with these provisions read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, your Company also transferred 5,575 Equity shares to the Demat Account of the IEPF Authority, in respect of which dividend had remained unpaid/unclaimed for a consecutive period of 7 years.

NATURE OF BUSINESS AND CHANGES THEREIN:

The Company is engaged in the business of Merchant Exports of Cotton textiles and to specialize in the export of quality Cotton Yarns and Fabrics. Lahotis range today covers a wide variety of Cotton Yarns including carded & combed ring spun yams of coarse & fine counts, ply yarns, special yarns and grey knitted and woven fabrics.

The Company is also engaged in the business of setting up of Power projects and to generate, supply, distribute, transmit and transform electric or other sources of power.

During the year under review, there has been no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF REPORT:

There have been no material changes or commitments, affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of report.

SUBSIDIARY COMPANIES:

The Company has 2 (two) Wholly Owned Subsidiaries. As on 31st March, 2019 Company has only 1 (one) Wholly Owned Subsidiary i.e G. Vaaradan Ltd.

1. Lahoti Spintex and Energy Limited (Formerly known as Lahoti Spintex Limited)*

2. G. Varadan Limited

During the year, the Board of Directors (‘the Board) reviewed the affairs of the subsidiary. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiary, which form part of the Annual Report. Further, a statement containing the salient features of the financial statement of our subsidiary in the prescribed format AOC-1 is appended as Annexure -1 to the Directors Report. The statement also provides the details of performance, financial position of the subsidiary. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of its subsidiary will be available for inspection during business hours at the Registered office of the Company.

No Independent Director on the Board of the Company is required to be inducted on the Board of its subsidiary, as it is not a material non-listed subsidiary Company as defined in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Audit Committee of the Company reviews the financial statements of the unlisted subsidiary company. The minutes of the Board meetings of unlisted subsidiary company are regularly placed at the Board meetings of the Company.

Note: * Lahoti Spintex and Energy Limited

(Formerly known as Lahoti Spintex Limited) ceases to be a subsidiary from 30.03.2019

DEPOSIT:

During the year under review, your Company did not accept any deposits in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014. No amounts were outstanding which were classified as ‘Deposits under the applicable provisions of Companies Act, 2013 as on the date of Balance Sheet and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the year under review the Company has duly entered into related party transactions as per the provisions of Section 188 of the Companies Act, 2013. The particulars of contracts or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, in the prescribed Form AOC - 2 is appended as Annexure - 2 to the Board Report. Further there are no materially significant related party transactions during the year under review made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company.

The Company has formulated a related party transactions policy and the same is displayed on the website of the company viz. http://lahotioverseas.in/ PDFs/policies/related-partv-transactions-policv.pdf

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements provided in this Annual Report.

However, the Company was not required to pass special resolution as the Loans advanced and investments made in accordance with the said provisions has not exceeded the limits as specified in the provision.

BOARD OF DIRECTORS :

As per the requirements of Section 149, 152 of the Companies Act, 2013 (the Act) and such other applicable provisions of the Act and as per provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which defines the composition of the Board, the Board of Directors of the Company have been constituted in compliance with the said Sections.

Further at the time of appointment of an Independent Director, the Company issues a formal letter of appointment detailing their role and function in the Company, the format of the letter of appointment whereof is available on the website of the Company at: http://lahotioverseas.in/PDFs/policies/terms-and- conditions-of-appointment-of-independent-directors. pdf

As on the date of this report, the Companys Board consists of the following Directors:

1. Mr. Prakash Ramchandra Bang

2. Mr. Prem Sardarilal Malik

3. Ms. Meghna Vijay Panchal

4. Mr. Ujwal Lahoti

5. Mr. Umesh Lahoti

6. Mr. Aadhitiya Lahoti

KEY MANAGERIAL PERSONNEL

Mr. Umesh Lahoti, Managing Director, Mr. Pradeep Bachhuka, Chief Financial Officer and Ms. Akshita Jhawar, Company Secretary & Compliance Officer are the Key Managerial Personnel of the Company, in terms of Section 2(51) read with Section 203(1) of the Companies Act, 2013.

During the year, Ms,. Avani D. Lakhani Company Secretary & Compliance Officer has resigned from the post w.e.f. 23.03.2019 & Ms. Akshita Jhawar has appointed as Company Secretary & Compliance Officer w.e.f. 30.05.2019.

DECLARATION BY INDEPENDENT DIRECTORS:

Mr. Prakash Ramchandra Bang, Mr. Prem Sardarilal Malik and Ms. Meghna Vijay Panchal are the Independent Directors on the Board of the Company.

The Company has received the declaration from all the Independent Directors confirming that they meet the criteria as set out in the provisions of Section 149(6) of the Companies Act, 2013 and the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

A) Formal Annual Evaluation

In terms of the provisions of the Companies Act, 2013 read with Rules issued thereunder and SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, the Board of Directors on recommendation of the Nomination and Remuneration Committee have evaluated the effectiveness of the Board/ Director(s) for the financial year 2018-2019.

COMMITTEES OF BOARD:

The Board has 4 Committees: Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee and the Corporate Social Responsibility Committee. A detailed note on the functions of the Board and Committee are provided in the Corporate Governance Report. The Composition of the Committees are as follows:

1. Audit Committee

The Audit Committee comprises of the following members:

Name of the Director Designation in the Committee
Mr. Prakash Ramchandra Bang (Independent Director) Chairman
Ms. Meghna Vijay Panchal (Independent Director) Member
Mr. Prem Sardarilal Malik (Independent Director) Member

Kindly refer to the section on Corporate Governance under the head, ‘Audit Committee for matters relating to constitution, meetings and functions of the Committee.

2. Stakeholders Relationship Committee

Name of the Director Designation in the Committee
Ms. Meghna Vijay Panchal (Non-Executive Independent Director) Chairperson
Mr. Umesh Rambilas Lahoti (Managing Director) Member
Mr. Ujwal Rambilas Lahoti (Executive Director) Member

Kindly refer to the section on Corporate Governance under the head, ‘Stakeholders Relationship Committee for matters relating to constitution, meetings and functions of the Committee.

3. Nomination and Remuneration Committee

Name of the Director Designation in the Committee
Ms. Meghna Vijay Panchal (Independent Director) Chairperson
Mr. Prakash Ramchandra Bang (Independent Director) Member
Mr. Prem Sardarilal Malik (Independent Director) Member

Kindly refer section on Corporate Governance, under the head, ‘Nomination & Remuneration Committee for matters relating to constitution, meetings, functions of the Committee and the remuneration policy formulated by this Committee.

4. Corporate Social Responsibility Committee

Name of the Director Designation in the Committee
Mr. Ujwal Rambilas Lahoti (Executive Director) Chairman
Mr. Umesh Rambilas Lahoti (Managing Director) Member
Mr. Prakash Ramchandra Bang (Independent Director) Member

COMPANIES POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION:

In Compliance with Section 178 of the Companies Act, 2013 and the relevant provisions of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board constituted the Nomination and Remuneration Committee comprising of Three (3) Non-Executive Independent Directors of the Company and further the Board in consultation with the Nomination and Remuneration Committee formulated the Nomination and Remuneration Policy.

The Remuneration policy of the Company comprises inter alia the aims and objectives, principles of remuneration, guidelines for remuneration to Executive and Non-Executive Directors and Key Managerial Personnel and criteria for identification of the Board Members and appointment of Senior Management.

The Criteria set out identification of the Board members are given hereunder:

1. The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management level and recommend to the Board his / her appointment.

2. A person should possess adequate qualification, expertise and experience for the position he / she is considered for appointment. The Committee has discretion to decide whether qualification, expertise and experience possessed by a person is sufficient / satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as Whole-time Director who has attained the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.

The Nomination and Remuneration Policy has been posted on the website of the Company http://lahotioverseas.in/PDFs/policies/ nomination-and-remuneration-committee-policy. pdf

ANNUAL EVALUATION OF THE BOARD:

Pursuant to applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board had adopted a formal mechanism for evaluating its own performance and as well as that of its Committees and individual Directors, including the Chairman of the Board.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial controls with reference to financial statements. During the year no reportable material weakness in the design or operations were observed.

INTERNAL CONTROLS OVER FINANCIAL REPORTING (ICFR)

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. During the year such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets,the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your Company has constituted a CSR Committee comprising of Mr. Ujwal Rambilas Lahoti as Chairman, Mr. Umesh Rambilas Lahoti & Mr. Prakash Ramachandra Bang as its members. The Committee is responsible for formulating and monitoring the CSR policy of the Company.

CSR activities, as per the provisions of the Companies Act, 2013, may be undertaken by the Company through a registered trust or a registered society.

The CSR policy as adopted by the Company can be viewed on the website of the Company at: http:// lahotioverseas.in/PDFs/policies/corporate-social- responsibilitv-policv.pdf.

The Annual report on the CSR activities undertaken by the Company is appended to this report as Annexure -3.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND VARIOUS COMMITTEE:

During the year, Five Board Meetings were convened and held, the details of number of meetings of the Board and various Committee during the Financial Year 20182019 forms part of the Corporate Governance Report.

VIGIL MECHANISM/WHISTLE BLOWER:

As per the provisions of Section 177(9) and 177(10) of the Companies Act, 2013 and the relevant provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has adopted a Whistle Blower Policy to report genuine concerns or grievances and to deal with the instances of fraud and mismanagement.

The Whistle Blower Policy has been posted on the website of the Company http://lahotioverseas.in/PDFs/ policies/whistle-blower-policy.pdf During the year under review, there were no complaints/ concerns that arose.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to sub-section (5) of Section 134 of the Companies Act, 2013 and to the best of their knowledge and belief and according to the information and explanations obtained /received from the operating management, your Directors make the following statement and confirm that-

(a) in the preparation of the Annual Accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) 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; and

(f) 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.

AUDITORS AND AUDITORS REPORT:

In accordance with Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, Palan and Co., Chartered Accountants, Mumbai (Registration No.133811W) Statutory Auditors of the Company hold office upto the conclusion of the 27th Annual General Meeting of the Company. However, their appointment as Statutory Auditors of the Company is subject to ratification by the Members at every Annual General Meeting.

In terms of the provisions relating to statutory auditors forming part of the Companies Amendment Act, 2017, notified on May 7, 2018, ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. Accordingly, the notice convening the ensuing AGM does not carry any resolution on Ratification of the appointment of the Statutory Auditors.

The Reports of the Statutory Auditors, Palan and Co., Chartered Accountants on the Standalone and Consolidated Financial Statements of the Company for the year 2019 form part of this Annual Report. The statutory auditors have submitted a unmodified opinion on the audit of Financial Statements for the year 2019 and there is no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report and therefore the same does not call for any further comments/explanation from the Directors.

SECRETARIAL AUDITOR:

Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Your Company has appointed Kothari H. & Associates, a firm of Practicing Company Secretaries as a Secretarial Auditor of the Company, for conducing secretarial audit of Company for the Financial Year 2018 - 19.

The report in respect of the Secretarial Audit carried out by Kothari H. & Associates Company Secretaries in Form MR-3 for the FY 2018-19 forms part to this report as Annexure - 4. The said report does not contain any adverse observation or qualification requiring explanation or comments from the Board under Section 134(3) of the Companies Act, 2013.

EQUITY SHARES WITH DIFFERENTIAL RIGHTS:

The Company has not issued any equity shares with differential rights / sweat equity shares/ employee stock options or not made any provision of its own shares by employees or by trustees for the benefit of employees during the Financial Year 2018-2019

The Company has not made any purchase or provision of its own shares by employees or by trustees for the benefit of employees during the Financial Year 2018-2019.

LISTING:

At present the Companys Equity Shares are listed at BSE Limited and the Company has paid Listing Fees to the above Stock Exchanges for the year 2019-20.

DISCLOSURE OF REMUNERATION PAID TO DIRECTOR AND KEY MANAGERIAL PERSONNEL:

The table containing the names and other particulars of employees in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended as Annexure - 5 to the Boards report.

SIGNIFICANT AND MATERIAL ORDERS:

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

RISK MANAGEMENT:

Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risk managements objective is to assure uncertainty does not deflect the endeavor from the business goals.

The Company has laid down procedures to inform the members of the Board about the risk assessment and minimization procedures. A risk management committee consisting of senior executives of the Company periodically reviews these procedures to ensure that executives management controls risk through means of a properly defined framework. A senior independent director is associated with the committee. The Company has framed the risk assessment and minimization procedure which is periodically reviewed by the Board. The risk management policy is displayed on the website of the Company viz. http://lahotioverseas.in/PDFs/policies/ risk-management-policy.pdf

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis of the financial condition and results of consolidated operations of the Company under review, is annexed and forms an integral part of the Annual Report.

REPORT ON CORPORATE GOVERNANCE

The Report on Corporate Governance for the year under review together with the certificate from the Auditor of the Company regarding compliance of the conditions of Corporate Governance, as stipulated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

CERTIFICATE FROM PCS UNDER SCHEDULE V (C) (10) (I) OF SEBI (LODR)

The Certificate from the practicing Company secretary as per Schedule V (C) (10) (i) of SEBI (LODR) certifying that none of the directors on the board of the company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority is annexed to this Directors Report as Annexure - 7.

EXTRACTS OF ANNUAL RETURN:

As per the provisions of Section 134(3) (a) of the Companies Act, 2013, an extract of the Annual Return in the prescribed format in Form MGT-9 is annexed to this Directors Report as Annexure - 6. and also available on at the website of the Company i.e. www. lahotioverseas.in

ENERGY CONSERVATION MEASURES, TECHNOLOGY ABSORPTION AND R & D EFFORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is not engaged in any manufacturing activity and thus its operations are not energy intensive. However adequate measures are always taken to ensure optimum utilization and maximum possible saving of energy. The Company has installed energy conservative equipments like LED (Light Emitting Diode) lights instead of CFL (Compact Fluorescent Lamp).

The Company has maintained a technology friendly environment for its employees to work in. Your Company uses latest technology and equipments. However, since the Company is not engaged in any manufacturing, the information in connection with technology absorption is NIL.

During the period under review the Company has earned Foreign Exchange of Rs. 60,719.98 Lakhs and incurred the Foreign Exchange outgo of Rs. 506.03 Lakhs

SECRETARIAL STANDARDS:

The Company complies with all the Secretarial Standards.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company has in place the "Policy on Prevention of Sexual Harassment at the Workplace" in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaints were received by the Committee for Redressal.

ACKNOWLEDGEMENT

Your Companys Directors wish to express their grateful appreciation for co-operation and support received from customers, financial institutions, Banks, regulatory authorities, customers, vendors and members and the society at large.

Deep sense of appreciation is also recorded for the dedicated efforts and contribution of the employees at all levels, as without their focus, commitment and hard work, the Companys consistent growth would not have been possible, despite the challenging environment.

For and on behalf of the Board of Directors
Sd/- Sd/-
Ujwal Rambilas Lahoti Umesh Rambilas Lahoti
(Executive Chairman) (Managing Director)
(DIN: 00360785) (DIN: 00361216)
Place: Mumbai
Date : August 9, 2019