Lakhani India Ltd Share Price directors Report
LAKHANI INDIA LIMITED
ANNUAL REPORT 2010-2011
DIRECTORS REPORT
To
The Members,
Your Directors have pleasure in presenting the Twenty Ninth Annual Report
of your Company together with Audited Accounts for the year ended 31st
March, 2011.
FINANCIAL RESULTS: (Rs. in Lacs)
PARTICULARS 2010-11 2009-10
Sales & Other Income 34695.99 28073.03
Profit before Depreciation (1664.98) 1241.44
Less: Depreciation 762.96 702.02
Profit before Tax (2427.94) 539.42
Provision for Tax:
Current 0.00 100.00
Prior period - -
Deferred 64.46 111.76
Net Profit after Tax (2492.40) 327.66
Add: Balance Brought Forward 1617.66 1289.99
Balance Carried to Balance Sheet (874.74) 1617.65
DIVIDEND:
No dividend is recommended for the period ended 31st March, 2011.
DEPOSITS:
During the year the Company has not accepted any Deposits under Section 58A
of the Companies Act, 1956 read with the Companies (Acceptance of Deposits)
Rules, 1975.
AUDITORS:
M/s Sameer Charu & Associates, Statutory Auditor of the Company had
resigned on 23.05.2011 and thus causing casual vacancy in the office of
Statutory Auditor of the Company. M/s Rakesh Gupta & Associates, Chartered
Accountants, Delhi has been appointed as Statutory Auditors of the Company
through postal ballot conducted as per section 192 A of the Companies Act,
1956 to hold office until the conclusion of the ensuing 29th Annual General
Meeting.
M/s Rakesh Gupta & Associates, Chartered Accountants, offer themselves for
appointment as Statutory Auditors from conclusion of this Annual General
Meeting to the conclusion of the next Annual General Meeting. The Company
has also received a Certificate from the Auditors to the effect that their
appointment, if made, would be in accordance with Section 224(1B) of the
Companies Act, 1956. The Report of the Auditors is self explanatory and
does not call for any further comment.
COST AUDITORS:
Pursuant to the directives of the Central Government and provisions of
Section 233B of the Companies Act, 1956 M/s K. V. Sharma & Co., Cost
Accountants, have been appointed to conduct the Cost Audit of the foot-wear
manufactured by the Company for the year 2011-2012, the Cost Audit Report
will be directly submitted to the Central Government.
DIRECTORS:
Mr. S. K. Kundra was appointed as additional director pursuant to section
260 of companies act, 1956 in the board meeting held on 15.11.2011. He
holds office up to forthcoming Annual General Meeting of the company. Your
company has received notice from a member seeking his appointment as
Director of your Company pursuant to Section 257 of the Companies Act,
1956.
Mr. Narendra Kumar Pandey has resigned from the directorship w.e.f.
09.09.2011. Your Directors place on record their appreciation for the
valuable services rendered by Dr. N.K. Pandey during his tenure on the
board. Mrs. Suman Lakhani, Director of the Company, retires by rotation at
the ensuing Annual General Meeting and being eligible offers herself for
re-appointment.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the provisions under Section 217(2AA) of the Companies Act,
1956, the Directors confirm that in preparation of Annual Accounts for the
Financial Year ended 31st March, 2011:
(i) The applicable Accounting Standards have been followed along with
proper explanation relating to material departures;
(ii) The appropriate Accounting policies have been selected and applied
consistently, judgments and estimates made are reasonable and prudent so as
to give true and fair view of the state of affairs of the Company at the
end of the financial year 31st March, 2011 and of the Profit and Loss
Account of the company for that period;
(iii) The proper and sufficient care has been taken for 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;
(iv) The Annual Accounts for the financial year ended on 31st March, 2011
have been prepared on a going concern basis.
SUBSIDIARY AND CONSOLIDATED FINANCIAL STATEMENT:
The Ministry of Corporate Affairs vide its General Circular No.2/2011,
dated February 08, 2011 has granted a general exemption under Section
212(8) of the Companies Act, 1956 to all the Companies from annexing the
annual accounts and other statements of subsidiary companies with the
annual report of the holding company.
A statement setting out important financials of the subsidiary company is
attached and forms a part of this Annual Report.
The Annual Accounts of the subsidiary are also available for inspection for
any member/ investor, during business hours, at the Registered Office of
the Company.
The Consolidated Accounts of the Company are annexed to this report.
REPORT ON CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:
A separate statement on Corporate Governance and Management Discussion &
Analysis Reports along with Auditors Certificate is enclosed as an
annexure.
PARTICULARS OF EMPLOYEES:
There were no Employees who were in receipt of remuneration in excess of
the Limits prescribed under Section 217(2A) of the Companies Act, 1956 read
with the Companies (Particulars of Employees) Rules, 1975, as amended.
CONSERVATION OF ENERGY:
The particulars required under Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of Particulars in the Report of
the Board of Directors) Rules, 1988 are set out in the Annexure, forming
part of this report.
ACKNOWLEDGMENT:
The Board acknowledges with gratitude the co-operation and assistance
provided to your Company by the bankers and authorities of State Government
from time to time. The Board wishes to place on record its appreciation to
the contribution made by employees of the Company. Your Directors thank the
customers, clients, vendors and other business associates for their
continued support. Your Directors are thankful to the shareholders for
their continued patronage.
For and on behalf of Board of Directors
Place: Faridabad P. D. Lakhani
Dated: 15th November, 2011 Chairman & Managing Director
ANNEXURE TO DIRECTORS REPORT:
Statement pursuant to Section 217(1) (e) of the Companies Act, 1956 read
with the Companies (Disclosure of particulars in the Report of Board of
Directors) Rules, 1988 and forming part of the Directors Report for the
Year ended 31st March, 2011:
A. CONSERVATION OF ENERGY:
(a) Energy Conservation measures taken:
1. Use of energy efficient motors.
2. Proper care has been taken in the factory building for natural lighting
and ventilation.
3. Automatic power factor correction panels have been installed.
4. Strict controls on wastage of energy have been made.
5. The Company uses efficient lighting equipment to save the power.
6. The Company invests in the latest energy efficient technologies to
conserve energy.
7. The Company maintains machineries on regular basis to ensure optimum
utilization of energy resources, especially power and fuel costs.
8. All the section workers have been provided with Distribution Boxes so
that they can shut down the power during idle time.
(b) Additional investments and proposals being implemented for reduction of
consumption of energy:
The Company has developed systems to identify areas for making investment
and implementing proposals to reduce consumption of energy resources and
for optimum utilization of limited energy resources.
(c) Impact of measures at (a) and (b) above for reduction of energy
consumption and consequent impact on the cost of production of goods:
As a result of energy conservation measures adopted, there has been
considerable saving in the energy consumption. The Company continues to
make all efforts to keep energy consumption at optimum level.
(d) Total energy consumption and energy consumption per unit of production:
Form-A is not applicable.
(e) Efforts made in technology absorption are given as per Form-B annexed:
(f) Total Foreign Exchange used and earned:
Year ended Year ended
31.03.2011 31.03.2010
Used 14.96 Lacs 18.95 Lacs
Earned 41.41 Lacs 1629.40 Lacs
ANNEXURE TO DIRECTORS REPORT:
FORM-B
For disclosure of particulars with respect of absorption:
RESEARCH AND DEVELOPMENT (R & D):
1. Specific areas in which R & D carried out by the Company:
The material development, product development, process development, waste
recycling and energy saving were the specific areas for Research &
Development during the year under review.
2. Benefits derived as a result of the above R & D:
Improvement in quality, energy efficiency as well as the development of eco
friendly processes enabled the companys products to be competitive in the
market.
3. Future plan of action:
The Company will continue to focus on developing high quality products to
drive growth and a relentless focus on reducing cost to fund growth.
4. Expenditure on R & D:
Expenditure on R & D is not separately allocated and identified due to the
nature of industry.
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
1. Efforts in brief, made towards technology absorption, adaptation and
innovation:
The technological know-how for manufacture of products has been fully
absorbed and adapted by the Companys personnel in the production process.
The R & D team ensures successful absorption and adaptation of latest
technologies with all the manufacturing divisions.
2. Benefits derived as a result of the above efforts:
i) Improvement in product quality
ii) Reduction in wastage & process losses.
iii) Reduction in process cycle time.
iv) Abatement in pollution
v) Improved productivity
3. Technology imported during last five years - NIL
For and on behalf of Board of Directors
Place: Faridabad P.D. Lakhani
Dated: 15th November, 2011 Chairman & Managing Director
MANAGEMENT DISCUSSION AND ANALYSIS
ECONOMIC - OVERVIEW:
The Indian economy plays a major role in the world. Last year the GDP
growth rate was registered at 8%. With over 8% growth rate in last three
quarters, it is estimated that the GDP growth rate will continue between 8%
to 10%. The Indian markets have been strong and supported by its domestic
demand and growing population. Besides this, there have been other factors
for the growth of Indian markets such as consumer habits, investment in
infrastructure and friendly government policies.
The manufacturing sector has recorded growth. Despite the steady growth in
the economy, inflation and increasing interest rates have been obstructions
in the industrial growth and consumer spending.
On the one hand, economic growth provides the opportunities for investment
and expansion in manufacturing sector and development in infrastructure. On
the other hand, inflation and rising interest rates turn into obstructions
in growth of manufacturing sector.
INDUSTRY STRUCTURE, OPPORTUNITIES AND THREATS:
India is the one of the biggest producer of footwear. In India, footwear is
manufactured both in organized and unorganized sector. The unorganized
sector accounts almost half of total production. The Indian consumer has
become more quality conscious and trendy. The organized sector which is
equipped with advanced technological infrastructure and Research &
Development can meet out the demand of consumer preferences, quality and
modern trends. This has provided more opportunities to the organized sector
for growth in its size and product range.
The footwear industry has been contributory to the economic growth. On the
one hand, it provides employment to a large number of people and on the
other hand it develops the market and product and contributes in industrial
output. However, the competitive environment, economic slowdown and
financial crisis have been concern for footwear industry.
SEGMENTWISE OR PRODUCTWISE PERFORMANCE:
The Company is mainly engaged in the business of manufacturing of Footwear,
so the Management considers Footwear as the only business segment of the
Company.
FINANCIAL PERFORMANCE:
The Management Discussion and Analysis Segment constitute the part of
Directors Report and Financial Performance and Review of Operations have
been fully disclosed in Directors Report.
OUTLOOK & KEY CHALLENGES:
Lakhani India Ltd. is an established name in footwear market for its high
quality products. The company manufactures footwear and a diversified range
of shoe products with the help of technological advancement and built up
infrastructure. The company has developed and established its brands and
retail network. It has been the prime responsibility to meet the consumer
demand and to provide high quality products at lowest possible price in
competitive environment and to ensure the sustainable growth.
INTERNAL CONTROL SYSTEM:
The Company has a proper and adequate system of internal controls to ensure
that all assets are safeguarded and protected against loss from
unauthorized use or disposition, and to ensure that all transactions are
authorized, recorded and reported correctly and adequately.
The Companys internal controls are supplemented by an extensive program of
internal audits, review by management and documented policies, guidelines
and procedures. The internal control is designed to ensure that financial
and other records are reliable for preparing financial information. All
financial and audit control systems are also reviewed by the Audit
Committee of the Board of Directors of the Company.
ENVIRONMENT AND SAFETY:
The Company continued to strive toward its commitment to protect and
promote the environment. On environmental matters, all plants of the
Company continue to perform well beyond the stringent operational norms
prescribed by the Haryana Pollution Control Board. The Company had planted
number of trees around the factory premises on road.
Adequate measures for safe guarding the safety and health of employees and
labourers are installed at the plants of Company. The Workers and staff are
regularly trained to handle the fire fighting equipments at all
manufacturing plants in case of need.
HUMAN RESOURCES & INDUSTRIAL RELATIONS:
We firmly believe that it is our people who are most important valuable
assets and resources. The Company strives to ensure best working conditions
for its people and that there are no compromises on the health and safety
of its employees. The Company has a healthy work culture built around
strong corporate value. The Company also encourages and supports its
employees to upgrade their skills on a continual basis through organizing
skill development programs. The employees are provided training and also
encouraged to participate in skill development courses. The devotion and
commitment of our employees has enabled the Company to fulfill its targets
and deadlines in time. Employer - Employee relations continued to remain
cordial during the year.
CAUTIONARY STATEMENT:
Statements in the Management discussion and analysis report describing the
Companys estimates, expectations or predictions may be forward-looking
statements within the meaning of applicable securities laws and
regulations. Actual results could differ materially from those expressed or
implied. Important factors that would make a difference to the Companys
operations include demand-supply conditions, raw material prices, changes
in Government regulations, tax regimes, economic developments within the
country and other factors
For and on behalf of Board of Directors
Place: Faridabad P. D. Lakhani
Dated: 15th November, 2011 Chairman & Managing Director