Lippi Systems Ltd Directors Report.
The Members of,
LIPPI SYSTEMS LIMITED
Your directors have pleasure in presenting their 26th Annual Report together with the Audited Annual accounts for the year ended on 31" March, 2019.
|FINANCIAL RESULTS:||(Rs in Lacs)|
|Income Tax Provision||21.41||33.57|
|Deferred Tax Liability||(16.30)||64.42|
Your directors are pleased to report that for the year under review, your Company has been able to achieve a net turnover of Rs. 15.95 crores as compared to Rs. 16.06 crores for the previous year. Your company could achieve a net profit of Rs. 79.64 lacs as against a net profit of Rs. 96.02 lacs for the preceding year.
Your directors expect better results for the current year.
The Authorised Share Capital of the Company as on March 31, 2019 was Rs 10,00,00,000 (Rupees Ten crores) divided intol,00,00,000 (One crores ) equity shares of Rs. 10 each.
The paid up share capital of the Company as on March 31, 2019, was Rs 7,00,00,000 (Rupees Seven crores only) divided into 7000000 (Seventy lakhs ) equity shares of Rs 10 each.
In view of the marginal profits for the year under review, your directors have not recommended any dividend for the year under report.
During the year under review your company has not accepted any fixed deposits from the public under section 73 of companies act, 2013, and therefore no information is required to be furnished in respect of outstanding deposits.
VIGILMECHANISM/WHISTLE BLOWER POLICY:
Pursuant to Section 177(9) of the Companies Act, 2013 and as per SEBI (Listing Obligation and Discourse Requirements) Regulations, 2015, the Company has formulated a Whistle Blower Policy to establish a vigil mechanism for directors and employees of the Company. The purpose and objective of this Policy is to provide a framework to promote responsible and secure whistle blowing. It protects the employees wishing to raise a concern about serious irregularities within the Company. The details of the Whistle Blower Policy are posted on the website ( www.lippisystems.com ) of the Company.
The Company has complied with the prov1Sions of revised SS-1 Secretarial Standards on meetings of the Board of Directors which has come into effect from October 01, 2017 and also SS- 2 Secretarial Standard on General Meetings during the year.
RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS:
The Company has established a well-defined process of risk management, wherein the identification, analysis and assessment of the various risks, measuring of the probable impact of such risks, formulation of risk mitigation strategy and implementation of the same takes place in a structured manner. Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the board to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources. Apart from these internal control procedures, a well-defined and established system of internal audit is in operation to independently review and strengthen these control measures, which is carried out by a reputed firm of Chartered Accountants. The Audit Committee of the Company regularly reviews the reports of the internal auditors and recommends actions for further improvement of the internal controls. The Risk Management policy is posted on the website of the Company.
RELATED PARTY TRANSACTIONS:
The Company has entered into related party transaction with relative of promoter Ms. Shashiben G. Gupta (Wife of Mr. Nandlal J. Agrawal, MD & Chairman) during the financial year 2018-19, the details of which are given in the notes forming parts of Financial Statements. All Related Party Transactions entered into are on an arms length basis. There are no materially significant Related Party Transactions made by the Company with promoters, directors, Key Managerial Personnel or other designated persons which may have potential conflict with the interests of the Company at large.
On the recommendation of the Audit Committee, the Board of Directors has adopted a policy on Related Party Transactions, which is also uploaded on the website of the Company ( www.lippisystems.com ) under the head of Investor. The Policy envisages the procedure governing related party transactions required to be followed to ensure compliance with the applicable laws and regulations as well as to ensure that the Related Party Transactions are managed and disclosed in accordance with the strict legal and accounting requirements.
A statement of all related party transactions is presented before the Audit Committee on
a quarterly basis, specifying the nature, value and terms &conditions of the transactions. The statement is supported by a certificate from the CEO/ CFO.
None of the Directors has any pecuniary relationships or transactions vis-a-vis the Company.
MANAGEMENTS DISCUSSION AND ANALYSIS REPORT:
Managements Discussion and Analysis Report for the year under review, as stipulated under SEBI (Listing Obligation and Discourse Requirements) Regulations, 2015, is presented in a separate section forming part of the Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant and material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the company have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The company has not given any loans or guarantees or investments covered under the provisions of section 186 of the Companies Act, 2013 during the Financial Year 2018-19
TRANSFER TO RESERVES:
The Company has transferred current years profit of Rs. 7963758/- to the Reserve & Surplus and the same is in compliance with the applicable provisions prescribed under the Companies Act, 2013.
Ms. Swetal Sapra, was appointed as an Additional Woman Director in the Board of Directors Meeting held on 14.08.2019 and it is proposed to appoint her as Woman Independent Director for the period of5 years from 14.08.2019.
(ii) Retirement by rotation
In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Nandlal J. Agrawal (DlN: 00336556) retires by rotation and is eligible for reappointment.
(iii) Declarations by Independent Directors
All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligation and Discourse Requirements) Regulations, 2015.
(iv) Board Evaluation
In compliance with the provisions of the Companies Act, 2013 and as per SEBI (Listing Obligation and Discourse Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Nomination& Remuneration Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.
(v) Nomination & Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a Policy for selection, appointment and remuneration of Directors and Key Managerial Personnel, including criteria for determining qualifications, positive attributes, Independence of Directors. More details of the same are given in the Corporate Governance Report.
(vi) Board Meetings
There are seven members of Board of the Directors of the company of Executive Directors, independent directors and Woman Director. There is no institutional nominee on the Board. During the year Six Meetings of the Board were held. The Board of directors wasmeton30/05/2018, 14/08/2018, 02/11/2018, 14/11/2018, 13/02/2019 and 29/03/2019.
The composition and attendance of Board of Directors are as:
|Name of Director||Category of Director||No.of Board Meetings attended||Attendance at the last AGM||No. of committee/ membership in which he/she is a member of Chairperson|
|1 Shri Nandlal Agrawal (DIN:00336556)||Managing Director -Chairman||6||Yes||None|
|2 Shri Minesh Shah (DIN:00045178)||Executive||6||Yes||None|
|3 Shri Kunal Agrawal (DIN: 00169324)||Executive||5||Yes||None|
|4 Shri Tirthraj Pandya (DIN:02972285)||Independent||6||Yes||Member in One Committee& Chairman in one Committee|
|5 Shri Kamlesh Sharma (DIN: 01563040)||Independent||6||Yes||Chairman in one Committee|
|6 Ms Jesal P Shah (DIN:07155395)||Woman- Independent||6||Yes||Member in three Committee|
|7 Shri. Govind C. Thakkar (DIN:07531165)||Independent||6||Yes||Chairman in one Committee Member in Two Committees|
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO:
The information relating to conservation of energy, technology absorption and foreign exchange earnings & outgo as required under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is Annexed herewith as "Annexure-A".
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure - B".
Pursuant to Section 177 of the Companies Act, 2013 the board of directors has constituted an audit committee. The audit committee comprises of Shri Govind C Thakkar (DIN: 07531165) Chairperson, Shri Tirthraj Pandya (DIN: 02972285) Member and Smt. Jesalben Shah (DIN: 07155395) Member.
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 statements in terms of the Section 134(3)of the Companies Act, 2013:
(i) that in the preparation of the annual financial statements for the year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
(ii) That such accounting policies, as mentioned in the Financial Statements as Significant Accounting Policies have been selected and applied consistently and judgments and estimates have been made 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 of the Company for the year ended on that date;
(iii) That proper and sufficient care has been taken 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) That the annual financial statements have been prepared on a going concern basis;
(v) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;
(vi) That proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively
(i) Statutory Auditors
M/s. Vijay Moondra & Co., Chartered Accountants Firm (Firm Reg. No.112308W) was appointed as Statutory Auditor of the company to hold office from 29th September, 2017, till conclusion of the 28th Annual General Meeting to be held in the year 2022 of the company.
(ii) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s Gaurang R. Shah, a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith as "Annexure - C".
Reply to the Observation:
1. The Board noted the fact about the No-Dematerialization of some of the promoters Share Holding and accordingly intimated to the concerned Promoters. The Company has received the positive response from the same promoter and the process of the conversion has been initiated by them.
(iii) Internal Auditor
Pursuant to provisions of Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, M/s. ASHOK DHARIWAL &CO., a Firm of Chartered Accountants in Practice, is appointed as an Internal Auditors of the Company for the Financial Year 2019-20.
PARTICULARS OF EMPLOYEES
The provisions of Rule 5(2) & (3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 requiring particulars of the employees in receipt of remuneration in excess of Rs. .60 lacs per year to be disclosed in the Report of Board of Directors are not applicable to the Companys none of the employees was in receipt of remuneration in excess of Rs. .60 lacs during the financial year 2018-19.
The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith as "Annexure -D".
A Report on Corporate Governance along with a Certificate from Practicing Company Secretary regarding compliance of the conditions of Corporate Governance pursuant to Regulation 34(3) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 is annexed herewith as "Annexure - E".
The Company has complied with the provisions relating to the Constitution of Internal Complaints Committee under the Sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no case filled or registered with the Committee during the year, under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. Further Company ensures that there is a healthy and safe environment for every women employee at the workplace and made the necessary policies for safe and secure environment for women employee.
The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
The Company has adequate internal financial control with reference to the financial statements commensurate with its size and nature of business. These controls include well documented procedures, covering financial and operational functions. The internal financial controls of the Company are adequate to ensure the accuracy and completeness of accounting records, timely preparation of reliable financial information, prevention and detection of frauds and errors and safe guard against any losses or unauthorized use or disposal of assets. These controls are assessed on a regular basis by Internal Audit
The Board wishes to place on record their sincere appreciation and acknowledge with gratitude the effort put in and co-operation extended by bankers, shareholders, employees at all levels and all other associated persons, bodies or agencies for their continued support.
|Place: Ahmedabad||For and on Behalf of Board of Directors|
|Date: 14/08/2019||Nandlal J. Agrawal|
|Chairman & Managing Director|
"Annexure : A"
ANNEXURE TO DIRECTORS REPORT:
(A) CONVERSATION OF ENERGY:
a) Energy conservation has been an important thrust area for the Company and is continuously monitored. The adoption of energy conservation measures has helped the Company in reduction of cost and reduced machine down-time.
b) Energy conservation is an ongoing process and new areas are continuously identified and suitable investments are made, wherever necessary.
c) Various on-going measures for conservation of energy include
(i) use of energy efficient lighting and better use of natural lighting,
(ii) reduction of energy loss, and
(iii) replacement of outdated energy intensive equipment.
d) Total energy consumption and energy consumption per unit of production is given in the table below:
(A) POWER AND FUEL CONSUMPTION IN RESPECT OF:
|Particulars||Year ended 2018-19||Year ended 2017-18|
|Total Amt. (Rs)||10204238.93||10895059.22|
|Rate Per Unit (Rs)||7.01||7.03|
|b) Own Generation|
|Through Diesel Generation Set|
|Unit per liter of Diesel Oil||3.45||2.91|
|Cost per Unit||17.70||25.61|
(B) CONSUMPTION PER UNIT OF PRODUCTION:
|Consumption per square meter of Production Electricity(No. of Units)||275.04||367.56|
The efforts made towards technology absorption: NA The benefits derived from technology absorption: NA The Company has not imported any technology for its products.
The Company has not specific Research and Development Department. However, the Company carries out research and development in several areas including material & process developments towards efficiency improvements, quality improvements, waste reduction etc. Apart from process improvements, the research and development also aims at finding equivalent substitutes of various inputs and packaging materials to have cost savings without compromising quality.
The Company has derived benefits of product diversification, cost reduction and better quality as a result of the above efforts.
The research and development is an on-going exercise and suitable efforts will continue to be made in future.
FOREIGN EXCHANGE EARNING AND OUTGO:
The information required to be given in respect of foreign exchanges and outgo is provided in the notes forming part of accounts. Members are requested to refer the same.