Latteys Industries Ltd Directors Report.

The Members,

LATTEYS INDUSTRIES LIMITED

Dear Members,

Your Directors are pleased to present this Sixth (6th) Annual Report of your company along with Audited Financial Statements for the Financial Year ended on March 31,2019.

FINANCIAL HIGHLIGHTS:

Particulars 2018-19 2017-18
Turnover 270,927,929 326,780,003
Other Income 3,233,265 1,284,119
Profit Before Depreciation, Interest and Tax (PBDIT)
Finance Cost 10,956,774 11,009,978
Depreciation and amortization expenses 6,844,006 5,662,116
Profit Before Tax 10,745,421 14,731,699
Tax Expenses:
Current Tax 2,949,894 4,206,135
Deferred Tax 123,836 14,873
Income Tax relating to earlier year
MAT Credit Entitlement
Profit after Tax 7,919,364 10,521,684

1. COMPANYS PERFORMANCE REVIEW:

• During the Financial Year ended March 31, 2019, the Companys total Revenue from operations is Rs. 274,161,195/- as against Rs. 328,064,122/- in the corresponding previous Financial Year ended March 31,2018.

• The Profit after tax (PAT) for the Financial Year ended March 31, 2019 is 7,919,364/- as against Profit of Rs. 10,521,684/- in the corresponding previous Financial Year ended March 31,2018.

2. DIVIDEND

With a view to conserve the available resources, it has been proposed by the Board of Directors not to declare any Dividend for the financial year 2018-19.

3. RESERVES

The Company has closing balance of Rs. 89,656,751/- (Rupees Eight Crore Ninety Six Lakhs Fifty six Thousand Seven Hundred fifty One only) as Reserve and Surplus as on March 31,2019. The Closing Balance of Reserve and Surplus is bifurcated as follows:

Sr. no Particulars Amount
1. Securities Premium Reserve 64,293,196
2. Surplus in Statement of Profit & Loss 25,363,555
total 89,656,751

4. changes in nature of the business, if any

The Company Continued to carry Business of Manufacture of submersible pumps and Motors and hence, there was no change in the nature of business or operations of the Company which impacted the financial position of the Company during the year under review.

5. material changes and commitments affecting financial position of the company

There are no material changes and commitments affecting the financial position of the Company, subsequent to close of Financial Year 2018-19 till the date of this Report.

6. share capital

During the year under review, there is no change in the Authorized, Issued, Subscribed and Paid-up Share Capital of the Company.

As at March 31, 2019, the Authorized Share Capital of the Company is Rs. 50,000,000/- divided into 5,000,000/- equity shares of Rs. 10/- each.

Further, Issued, Subscribed and Paid-up Share Capital of the Company as at March 31, 2019 is Rs. 45,996,660/- divided into 4,599,666/- equity shares of Rs. 10/- each.

7. DEPOSITS

During the year under review, the Company has not accepted or renewed any deposits from public falling within the purview of provisions of Section 73 and 76 of the Companies Act, 2013 ("the Act") and Rules framed thereunder.

8. particulars of loans, guarantees or investments under section 186 of the companies ACT, 2013

The particulars of Loan, Guarantees and Investments covered under section 186 of the Companies have been disclosed in Notes to the Financial Statement.

9. particulars of contracts or arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the company had not entered into any contract or arrangement or transactions with related parties which could be considered material (i.e. transactions exceeding ten percent of the annual turnover as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the Company on materiality of Related Party Transactions. Accordingly, there are no transactions that are required to be reported in form AOC-2. However, you may refer to Related Party transactions, as per the Accounting Standards, in Note No. 27 & 28 of the Financial Statements.

10. subsidiary company / associate company / joint venture

The Company does not have any subsidiary, joint venture or associate companies within the meaning of Section2 (6) and 2(87) of the Companies Act, 2013. As such, a report in the prescribed Form AOC -1 as per first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rules made thereunder is not required to be attached and a policy fordetermining material subsidiary is not required to be framed by the Company.

11. directors and key managerial personnel

I. The Directors and Key Managerial personnel of the Company as on 31st March, 2019 are as below:

Sr. No Name Designation DIN/PAN
1 KAPOOR CHAND GARG Managing Director 00434621
2 PAWAN GARG Whole time Director 00434836
3 SAROJ GARG Director 03564480
4 SACHIN GUPTA Director 03637291
5 SANDEEP KUMAR MANGAL Director 07335831
6 VIRALBHAI HASMUKHBHAI PATEL CFO(KMP) BQFPP7432R

II. During the current financial year 2019-2020 (Post31stMarch 2019 till the Date of Boards Report):

Mr. NIKHILKUMAR MANSUKHBHAI VADERA has appointed for the post of Company Secretary & Compliance Officer with effect from April 03, 2019.

iii. Director - Retirement By Rotation:

Pursuant to Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended), Mr. PAWAN GARG (DIN: 00434836), retires by rotation and being eligible, offers herself for re-appointment.

The Board of Directors of the Company recommends the appointment of M r. PAWAN GARG to the Shareholders for their consideration at the 6th Annual General Meeting in the interest of the Company. The brief resume and other details relating to Mr. PAWAN GARG as required to be disclosed under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated in the annexure to the notice calling 6th Annual General Meeting of the Company.

IV. Declaration under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from independent Directors:

The Company has duly complied with the definition of Independence according to the provisions of Section 149(6) of, read with Schedule IV - Code of Independent Directors to, the Companies Act, 2013 and Regulation 16 (1) (b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (as amended). All the Independent Director/s, have submitted a declaration that he/she meets the criteria of independence and submits the declaration regarding the status of holding other directorship and membership as provided under law. The Independent Directors have also confirmed that they have complied with the Company s code of conduct for Board and Senior Management as per Regulation 26(3) of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015. The Independent Directors affirmed that none of them were aware of any circumstance or situation which could impair their ability to discharge their duties in an independent manner.

12. SEBI Complaints Redress System (SCORES):

The investor complaints are processed in a centralized web based complaints redress system. The salient features of this system are centralized database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned companies and online viewing by investors of actions taken on the complaint and its current status. Your Company has been registered on SCORES and makes every effort to resolve all investor complaints received through SCORES or otherwise within the statutory time limit from the receipt of the complaint. The Company has not received any complaint on the SCORES during financial year 2018-19.

13. BOARD AND COMMITTEE MEETINGS:

During the year under review the Board of Directors met 8 (Eight) times on April 12, 2018, May 11,2018, June 1,2018, July 12, 2018, August 30, 2018, September29, 2018, January 23, 2019, and March 28, 201 9. The interval between the two meetings was well within the maximum period mentioned under Section 173 of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

Sr. no Name of the Director

No. of Board Mteeting

Held Attended
1 KAPOOR CHAND GARG 8 8
2 PAWAN GARG 8 8
3 SAROJGARG 8 8
4 SACHIN GUPTA 0 0
5 SANDEEP KUMAR MANGAL 0 0
6 VIRALBHAI HASMUKHBHAI PATEL 8 8

14. Formal annual evaluation process by board:

Pursuant to the provisions of the Companies Act, 2013 and rules made thereunder, the Board has carried the evaluation of its own performance, performance of Individual Directors, Board Committees including the chairman of the Board on the basis of attendance, contribution of various criteria as recommended by the nomination and remuneration committee of the Company.

The evaluation of the working of the Board, its committees, experience and expertise, performance of specific duties and obligations etc. were carried out. The Directors expressed their satisfaction with the evaluation process and outcome.

The performance of each of the Non Independent Directors (including the chairman) was also evaluated by the Independent directors at the separate meeting held of the Independent Directors of the Company.

15. Directors responsibility statement

pursuant to Section 134 (3) (C) of the Companies Act, 2013 the Directors confirm that:

In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

They 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 and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

They have 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;

The annual accounts have been prepared on a going concern basis;

They have laid down Internal financial controls for ensuring the orderly and efficient conduct of its business, including adherence to Company s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and com pleteness of the accounting records, and the timely preparation of reliable financial information and;

They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

16. conservation of energy and technology absorption foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as "Annexure A to this Report.

1 7. extract of the annual return

As per the requirements of section 92 (3) of the Companies Act, 2013 and Rules framed thereunder, the extract of the Annual Return for the Financial Year ended March 31, 2019 is given in Annexure-B in the prescribed Form MGT-9, which forms part of this Report.

18. corporate governance

Since the Company s securities are listed on SME Emerge Platform of National Stock Exchange (NSE), by virtue of Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, The compliance with the corporate governance provisions as specified in regulations 17 to 27 and clause (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of schedule V are not applicable to the Company. Hence Corporate Governance does not form part of this Board s Report.

19. compliances of secretarial standards

The Company is in compliance with all the applicable standards issued by the Institute of Company Secretaries of India.

20. internal financial control systems and their adequacy

The Company has its internal financial control systems commensurate with the size and complexity of its operations, to ensure proper recording of financials and monitoring of operational effectiveness and compliance of various regulatory and statutory requirements. The management regularly monitors the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records including timely preparation of reliable financial information.

The internal auditor consults and reviews the effectiveness and efficiency of the internal financial control systems and procedure to ensure that all the assets are protected against loss and that the financial and operational information is accurate and complete in all respects. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Company.

21. particulars of employees

The Company has no employee, who is in receipt of remuneration of Rs 8,50,000/- per month or Rs 1,02,00,000/- per annum and hence the Company is not required to give information under sub rule 2 and 3 of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further the following details forming part of Annexure-C to the Board Report.

Pursuant to Rule 5(2) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014 statement containing the names and other particulars of Top Ten employees in terms of remuneration drawn by them.

Disclosure Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

22. management discussion and analysis

Management Discussion and Analysis Report as required under Regulation 34 and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is furnished as an Annexure-D.

23. AUDITORS

I. Statutory Auditor

The Board of Director places on record its appreciation on the services provided by M/s. KPMC & Associates., Chartered Accountants, Delhi as the Statutory Auditors of the Company.

In accordance with the provisions of Section 139 of the Companies Act, 2013 and Rules framed thereunder, the shareholders of the Company at the Extra Ordinary General Meeting held on 26th April, 2019 had appointed M/s. KPMC & Associates., Chartered Accountants, Delhi (having Firm Registration No. 023419N) as Statutory Auditors of the Company, from the conclusion of the Annual General Meeting and that they shall conduct the statutory audit for the period ended 31st March 2019.

M/s. KPMC & Associates., Chartered Accountants, have consented to act as a Statutory Auditors of the Company and also confirmed that their appointment is as per the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

II. Secretarial Auditor

As required under provisions of Section 204 of the Companies Act, 2013 and Rules framed thereunder, the Board has appointed the Secretarial Auditors of the Company, M/s Vickey K. Patel, Practicing Company Secretaries, for conducting the Secretarial Audit for the FY 2018-19.

Secretarial Audit Report in Form MR-3 issued by the Secretarial Auditor of the Company for the Financial Year ended on March 31, 2019 is attached to the Directors Report as Annexure- E. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

24. details of significant and material order passed by the regulator or court or tribunal

There were no significant and material orders issued against the Company by a regulating authority or court or tribunal that could affect the going concern status and company s operation in future.

25. RISK MANAGEMENT

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 a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

26. VIGIL MECHANISM

The Company has established a vigil mechanism, through a Whistle Blower Policy, where Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle-blowing mechanism not only helps the Company in detection of fraud, but is also used as a corporate governance tool leading to prevention and deterrence of misconduct.

It provides direct access to the employees of the Company to approach the Compliance Officer or the Chairman of the Audit Committee, where necessary. The Company ensures that genuine whistle blowers are accorded complete protection from any kind of unfair treatment or victimization.

The said policy is also available on the website of the Company at www.latteysindustries.com under the head investor section.

27. FRAUD REPORTING

There were no frauds disclosed during the Financial Year.

28. CODE OF CONDUCT

The Board has laid down a specific code of Conduct for all Board Members and Senior Management of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code on annual basis.

29. INSIDER TRADING

The Board has in consultation with the Stakeholders Relationship Committee laid down the policy to regulate and monitor the Insider Trading in the Company. The Committee regularly analyses the transactions and monitors them to prevent Insider Trading. The Company has also adopted a Prohibition of Insider Trading Policy.

During the year under review, in compliance with the amendments to the SEBI Insider Regulations, the Company adopted the following effective 1 April 2019:

Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information.

Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons and their Immediate Relatives

The Policy was approved by the Board and same was uploaded on the Company s website www.latteysindustries.com under the tab investors.

30. means of communication

The Board believes that effective communication of information is an essential component of Corporate Governance. The Company regularly interacts with its shareholders through multiple channels of communication such as Company s Website and stipulated communications to Stock Exchange where the Company s shares are listed for announcement of Financial Results, Annual Report, Notices, Outcome of Meetings, and Company s Policies etc.

31. human resources

Your Company treats its "Human Resources as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on ongoing basis. Numbers of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

32. WEBSITE

The Company has a website addressed as www.latteysindustries.com. Website contains the basic information about the Company - details of its Business, Financial Information, Shareholding Pattern, Contact Information of the Designated Official of the Company who is responsible for assisting and handling investors grievances and such other details as may be required under sub regulation (2) of Regulation 46 of the Listing Regulations, 2015. The Company ensures that the contents of this website are periodically updated.

33. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS

The Company s policy on Directors appointment including criteria for determining qualifications, positive attributes and independence of a Director as well as policy relating to Remuneration of Key Managerial Personnel and other employees and other matters as provided in Section 178(3) of the Act, is appended as an Annexure VII to this Report.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (prevention, PROHIBITION AND REDRESSAL) ACT, 201 3

In accordance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules framed thereunder, the Company has formed an Internal Complaints Committee and also framed and adopted the policy for Prevention of Sexual Harassment at Workplace.

The following is the summary of Sexual Harassment complaints received and disposed of during the year 2018-19.

No. of Complaints Received: NIL

No. of Complaints Disposed of: NIL

35. ACKNOWLEDGEMENT

Your Directors wish to express their gratitude to the Bankers, Financial Institutions, Government Authorities, Customers, Vendors, Consultants, Advisors and Members for their direct and indirect co-operation and look forward to their continued support in the future.

Your Directors acknowledge the support and co-operation received from employees and all those who have helped in day to day management of the Company.

For and on behalf of the Board
FOR LATTEYS INDUSTRIES LIMITED
KAPOOR CHAND GARG
PLACE: AHMEDABAD DIRECTOR
DATE: 28th AUGUST 2019 DIN:00434621

conservation of energy, technology absorption and foreign exchange earnings and outgo [Section 134 (3) (M) of the Companies Act, 2013 read with Rule 8(3) of the Companies Accounts) Rules, 2014]

S. No. Particulars
Conservation of Energy:-
1 the steps taken or impact on conservation of energy; Being an energy efficient product manufacturer we make energy efficient stainless steel pumps and motors. We offer energy efficient pumping systems for agriculture and offers energy savings over 40% compared to conventional pumping system.
Our all the newly developed product is having utmost care in terms of energy efficiency, every single watt of energy we save at the product end, it helps to create big difference at the power generation end.
2 the steps taken by the Company for utilizing alternate sources of energy; The company is constantly adopting solar as alternative source of energy and promoting solar pumps across globe and company made solar business as key focus area of business. This solar power could transform our agricultural landscape and improve quality of life in rural and urban India ensuring energy security to the poor and marginalizes. This would immensely help climate change mitigation efforts by in line with global
3 the capital investment on energy conservation equipment We have already installed Solar Power plant and invested heavily on other renewable energy applications and equipments and the total investments could approx. 18 Lacs.

Technology absorption:-

No new technology is absorbed by the company as company is equipped in well manner with all the required technologies and machineries that it requires in order to have smooth functioning of business operations.

Foreign exchange earnings and Outgo:-

(i) The Foreign Exchange earned in terms of actual inflows during the year; RS. 4,787,279.00
(ii) The Foreign Exchange outgo During the year in terms of actual Outflows. NIL

 

For and on behalf of the Board
FOR LATTEYS INDUSTRIES LIMITED
KAPOOR CHAND GARG
PLACE: AHMEDABAD DIRECTOR
DATE: 28th AUGUST 2019 DIN:00434621

ANNEXURE-C

Disclosure as per Section 197(12) of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 201 4

a) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year ending March 31, 2019 and

b) The Percentage Increase in Remuneration of Each Director, Chief Financial Officer and Company Secretary during the Financial Year ending on March 31, 2019

The ratio of the remuneration of each director to the median employees remuneration for the financial year 2018- 19.

Name Designation Ratio
KAPOOR CHAND GARG Managing Director 8 Times
PAWAN GARG Director 8 Times

The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2018-19 compared to 2017- 18

Name Designation % increase in remuneration
KAPOOR CHAND GARG Managing Director 8 Times
PAWAN GARG Director 8 Times

 

The number of permanent employees on the rolls of company 92
the explanation on the relationship between average increase in remuneration and company performance The increase is remuneration is linked to the performance of the company as a whole, the performance of the employee and others internal and external factors
Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration. No change during the year.
Variations in the market capitalization of the company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the company in comparison to the rate at which the company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the company as at the close of the current financial year and previous financial year

Not Applicable

Affirmation that the remuneration is as per the remuneration policy of the Company

We affirm that remuneration is as per the remuneration policy of the company.