LN Industries India Ltd Directors Report.

To,

The Members of

LN INDUSTRIES INDIA LIMITED.

Yours Directors hereby present the Twenty Fourth Annual Report of your Company together with the Audited Accounts for the financial year ended March 31, 2017 and the Report of the Auditor thereon.

FINANCIAL RESULTS:

(Rs. In Lakhs)

Particulars For the year ended For the year ended
31st March 2017 31st March 2016
Revenue from operations 0.00 0.00
Other Income 3.59 5.68
Total Income 3.59 5.68
Total Expenditure 333.04 2,875.88
Profit / (Loss) before exceptional items (329.44) (2,870.20)
Exceptional Items 1.92 2.60
Profit / (Loss) before extraordinary items (331.36) (2,872.80)
Extraordinary items 0.00 0.00
Profit / (Loss) before tax (331.36) (2,872.80)
Less : Provision for tax 0.00 0.00
Profit / (Loss) after tax for the year (331.36) (2,872.80)
Basic and Diluted EPS (0.33) (2.83)

STATE OF COMPANYS AFFAIRS:

The manufacturing operations of the Company have not taken place during the year owing to non-availability of the working capitals from the banks. Company is taking steps to resume the operations by entering into job work arrangement with various vendors and third party business. The Developer to whom the Company has given the Company Land for development has obtained approvals from the regulatory authorities and the development activity is expected to commence. The Company has settled its complete dues and closed all its loans with the Financial Institutions and Banks.

INDUSTRY STRUCTURE AND DEVELOPMENT:

The Company is engaged in the manufacture of Texturized Twisted Polyester Dyed Yarn and Nylon Dyed Yarn.

The Product of the Company Polyester Dyed Yarn is used in the manufacturing of Dress Materials, Sarees, Shirtings, Suiting and Furnishing Fabrics and other Product Nylon Dyed Yarn is used in the manufacture of Socks, Sports Gear etc., With the emphasis of the Government in giving inputs to the Textile Industry Company has opportunity to revive its operations. The Products of the Company command good brand recall due to its excellence presence over the past 2 decades. The market offers opportunities to the Company to for scaling up its operations.

LISTING OF EQUITY SHARES:

The Companys Equity shares are presently listed on BSE Limited and the Company has paid the Annual Listing Fees to the said Stock Exchanges for the financial year 2016 – 2017.

TRANSFER TO RESERVES:

The Company has incurred a loss of Rs.331.36 lacs during the year. The said loss is set off against the reserves held by the Company.

CHANGE IN NAUTURE OF BUSINESS, IF ANY:

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 are no material changes and commitments in the business operations of the Company from the financial year ended 31st March, 2017 to the date of signing of the Directors Report.

PERFORMANCE AND FINANCIAL POSITION OF THE SUBSIDIARY COMPANY:

The Company does not have any subsidiaries or associate companies. Hence the required information under this head is not being attached to the report.

CORPORATE GOVERNANCE:

A separate report Corporate Governance is provided together with a Certificate from the Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance as stipulated under Listing Regulations. A Certificate of the CEO and CFO of the Company in terms of Listing Regulations, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed.

The extract of annual return in Form MGT-9 as required under Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as an Annexure to this Report.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

All the Independent Directors have given declarations of Independence, as required pursuant to Section 149 (7) of the Companies Act, 2013 stating that they meet the criteria of Independence as provided in subsection (6) of Section 149 of the Companies Act, 2013.

MEETING OF INDEPENDENT DIRECTORS:

The performance of the Individual Directors on the Board and the Committees thereof is done by the Board and the Independent Directors in their exclusive meeting done as per the policy formulated by the Board in this regard.

BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the performance evaluation of the Board, the Committees of the Board and Individual Directors is done on annual basis.

The evaluation is done by the Board, Nomination and Remuneration Committee and Independent Directors with specific focus on the performance and effective functioning of the Board and Individual Directors.

CHANGES IN DIRECTORS: INDUCTIONS:

During the year under review there were no Inductions on to the Board of the Company.

RE – APPOINTMENTS:

As per the provisions of the Companies Act 2013, Mr.Shailesh Shivram Mistry (DIN:02828383) retires at the ensuing Annual General Meeting and being eligible, seek his re-appointment. The Board recommends his re-appointment.

As per the provisions of the Companies Act 2013, Sri.L.Madhu Kumar Reddy (DIN:07604968) retires at the ensuing Annual General Meeting and being eligible, seek his re-appointment. The Board recommends his re-appointment.

None of the independent directors will retire at the ensuing Annual General Meeting.

RESIGNATIONS:

During the year under review Sri.G.Surender Reddy has resigned from his Directorship, with effect from 28th August 2017.

The Board noted and places on record its appreciation for the valuable services rendered by Sri.G.Surender Reddy during his tenure as Director with the Company.

CHANGES IN KEY MANAGERIAL PERSONNEL:

There have been no changes in the Key Managerial Personnel.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS:

During the year under review Six (6) times Board meetings were held on the following dates:

1. 30th May2016.

2. 13th August 2016.

3. 30th August 2016.

4. 30th September 2016.

5. 14th November 2016.

6. 13th February 2017.

The intervening gap between any two Board Meetings was within the period prescribed under the provisions of the Companies Act, 2013. All the recommendations given by the Audit Committee are accepted by the Board.

INTERNAL FINANCIAL CONTROL:

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the 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 disclosures.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(5) of the Act, and based on the representations received from the management, the directors hereby confirm that: i. in the preparation of the annual accounts for the financial year 2016 – 17, the applicable accounting standards have been followed and there are no material departures; ii. 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 the financial year; iii. and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; iv. prepared the annual accounts on a going concern basis; v. laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and vi. devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

CORPORATE SOCIAL RESPONSIBILITY:

Your Company does not fall under any of the criteria specified under the provisions of Companies Act, 2013. Hence the Company has not constituted any committee and is not required to furnish information required under the provisions of the said Act.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

There have been no loans, guarantees and investments under Section 186 of the Act during the financial year 2016 – 17.

TRANSACTIONS WITH RELATED PARTIES:

There were no related party transactions during the year except that entered in the ordinary course of business and on arms length basis. There were no materially significant related party transactions between your Company and the Directors, promoters, Key Managerial Personnel and other designated persons which may have a potential conflict with the interest of Company at large.

Form AOC – 2 for disclosure of particulars of contracts / arrangements, entered into by your Company with related parties is attached herewith as Annexure – I.

TECHNOLOGY ABSORPTION, ENERGY CONSERVATION & FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information in accordance with clause (m) of sub section (3) of Section 134 of the Companies Act, 2013 is annexed herewith as Annexure – II to this report.

PARTICULARS OF EMPLOYEES:

The information and statement containing particulars of employees required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 (1) and Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are provided in Annexure –III and forms part of this report.

The Nomination and remuneration committee of the Company has affirmed that the remuneration is as per the Remuneration policy of the Company.

Your Directors take this opportunity to record their deep appreciation of the continuous support and contribution from all employees of the Company.

EXTRACT OF ANNUAL RETURN:

As required under Sub-Section (3) of Section 92 of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 a extract of Annual Return in Form MGT – 9 forms part of this report as Annexure – IV.

DEPOSITS:

During the year under review your Company has not accepted any fixed deposits and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date.

AUDITORS: Statutory Auditors:

The Auditors appointed by the members at the 23rd Annual General Meeting held on 30th September 2016, having completed a consecutive tenure of five years leading to cooling period, event to the Company has identified M/s. C M T Associates, Chartered Accountants (FR No.011515S), as the Statutory Auditors of the Company to hold office from the conclusion of 24th Annual General Meeting to till the conclusion of the 29th Annual General Meeting. Accordingly, the appointment of M/s. C M T Associates, Chartered Accountants, as the statutory auditors of the Company is placed for ratification at every such Annual General Meeting. In this regard, the Company has received a certificate from the auditors to the effect that if they are reappointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

DISCLOSURE AS PER SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under.

During the financial year 2016-17, the Company has not received any complaints on sexual harassment.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS:

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.

ACKNOWLEDGEMENTS:

Your Directors place on record their appreciation for the assistance and co-operation extended by the Bankers, State and Central Government Agencies. Your Directors also thank all the Customers, Members and Employees for their valuable support and confidence in the Company.

on behalf of the Board of Directors
for LN INDUSTRIES INDIA LIMITED
Place: Hyderabad.
Date: 28-08-2017.
G. SURENDER REDDY
Managing Director
DIN:00109441