DIRECTORS’ REPORT 1.Your Directors are pleased to present the 20th Annual Report and the Audited Statement of Accounts for the financial year ended March 31, 2015, together with the notice of Annual General Meeting. 2. Results of Operations During the year under review, the Company achieved a gross income of Rs. 90913.50 lacs as against Rs. 87113.95 lacs for the corresponding period of the previous year. The Company’s profit before depreciation, interest, tax amounts to Rs 8141.88 lacs as compared to Rs.7003.36 lacs in the previous year, The Company has achieved Profit Before Tax of Rs 6799.24 lacs as against Rs. 4668.13 lacs The Net Profit after tax is Rs 4522.91. lacs as against Rs. 3137.72 lacs for the previous year. The financial year 2014-15 was a significant year for the Company in terms of growth in profitability, The net profit during the year has grown around by 44.15% over the previous financial year. 3. Dividend The Board of Directors at the meeting held on May 27, 2015 recommended a dividend of 60% (Rs. 6.00) per Equity Share (last year Rs. 3.00 per Equity Share) on 50,50,600 equity shares of Rs.10 each and 0.25% on 56,00,000 preference shares of Rs. 100 each for the year ended March 31, 2015, subject to approval of the shareholders in the ensuing Annual General Meeting. Distribution Tax on the dividend is being borne by the Company. 4. Transfer to Reserves In accordance with the provisions of the Companies Act, 1956 read with Companies (Transfer to reserves) Rules, 1975, your directors propose to transfer a sum of Rs. 400.00 lacs to the general reserve out of profits earned by the Company. 5. Changes in Share Capital During the Financial Year 2014-15, the share capital of the Company has been increased from 529.98 lacs to 6129.98 lacs pursuant to allotment of 56,00,000 Non Convertible Redeemable Preference Shares of Rs 100 each in lieu of conversion of unsecured loan of company. 6. Fixed Deposits The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 and rules made there under, during the year 2014-15 and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet. 7. Particulars of loans, guarantees or Investments The Company has not given any loans or guarantees covered under the provision of section 186, of the Companies Act, 2013. The detail of investments made by company is given to the notes to the financial statements. 8. Internal Control System and their adequacy The company has adequate internal control procedures commensurate with the size of the company and the nature of its business for purchase of inventories, fixed assets and with regard to the sale of goods and services. 9.Corporate Social Responsibility Initiatives As part of its initiatives under "corporate social responsibility" (CSR), the company has contributed funds for the schemes of eradicating hunger and poverty, promotion of education and medical aid. The contributions in this regard have been made to the registered trust which is undertaking these schemes. The Annual Report on CSR activities is annexed herewith as: Annexure B 10. Management Discussion and Analysis Report Pursuant to Clause 49 of the Listing Agreement, a Management Discussion and Analysis Report is annexed as Annexure C forming part of this Report. 11. Corporate Governance Your Company is committed to maintain the good Corporate Governance practices. Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, a separate section on Corporate Governance together with a certificate from the Company's Auditor confirming compliance is set out in Annexure D and E forming part of this report. Further a declaration on the Code of Conduct is given as Annexure F. 12. CEO and CFO Certification As required under clause 49(V) of the Listing Agreement, the CEO/ CFO certification on the accounts of the Company as given by Sri Ashok Kumar Todi, Whole Time Director and Sri Ajay Patodia, Chief Financial Officer is set out in Annexure F forming part of this report. 13. Directors Mr. Ashok Kumar Todi Whole Time Director retire by rotation and, being eligible, offer himself for re-appointment. The Directors recommend Mr. Ashok Kumar Todi for his re-appointment. Mrs. Prabha Devi Todi who is appointed as additional director of the company on 11th February, 2015 is co-opted as Director of the company from the ensuing Annual General Meeting. The Company has received a notice from a member pursuant to section 160 of the companies Act 2013 signifying intention to propose her for the office of Director. Resolutions seeking approval of the members have been incorporated in the notice of the forthcoming Annual General meeting . Brief resume /details relating to director's who are to be appointed /reappointed are furnished in the annexure to be the notice of the ensuing Annual General Meeting as required under the code of corporate Governance 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 clause 49 of the Listing Agreement. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committees. The manner in which the evaluation has been carried out has been explained in Nomination & Remuneration Policy in the Corporate Governance Report. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. And also has been posted on the Company's website www. luxinnerwear.com Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year six Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. 14. Director's Responsibility Statement Pursuant to the requirement under section 134 clause (C) of sub section (3) the Companies Act, 2013 the directors confirm : • In the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departure, if any; • The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date; • The Directors have taken proper and sufficient care 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; and • The Directors have prepared the annual accounts of the Company on a 'going concern' basis. • The directors in case of a listed company has laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively • That 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 15. Related Party Transactions All related party transactions that were entered into during the financial year were on arm’s length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the company at large. 16. Subsidiary Companies The Company does not have subsidiary. 17. Code of Conduct The Board of Directors has approved a Code of Conduct which is applicable to the Members of the Board and all senior employees in the course of day to day business operations of the company. The Company believes in “professional integrity, honesty and ethical conduct while conducting the business of the company. The code laid down by the Board is known as “code of conduct for Board Members and Senior Management Employees" The Code has been posted on the Company's website www. luxinnerwear.com The Code lays down the standard procedure of business conduct which is expected to be followed by the Directors and the senior employees in their business dealings and in particular on matters relating to integrity in the work place, in business practices and in dealing with stakeholders. All the Board Members and the Senior Management personnel have confirmed compliance with the Code. 18. Whistle Blower Policy The Company has a Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing. It protects employees wishing to raise a concern about serious irregularities within the Company. A quarterly report with number of complaints received under the Policy and their outcome placed before the Audit Committee and the Board if any. 19. Prevention of Insider Trading The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors, Officers and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors, Officers and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board of Directors and the designated employees have confirmed compliance with the Code. 20. Auditor's Report / Secretarial Audit Report The observation made in the Auditors' Report read together with relevant notes thereon are self explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013. As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report. And there is no such observation made by Secretarial Auditor hence do not require any comments under Section 134 of the Companies Act, 2013. 21. Auditors M/s Sanjay Modi & Co. , Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Members are requested to consider their appointment as the Statutory Auditors of the Company from the conclusion of this Annual General Meeting until the conclusion of the Twentieth (21st) Annual General Meeting of the Company on such remunerations as approved by the members. The Company has received a certificate from the proposed Auditors to the effect that their appointment, if made, would be in accordance with all the conditions prescribed under the Companies Act, 2013 and the Companies (Audit and Auditors) Rules,2014. 22. Secretarial Audit Pursuant to provisions of section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the company has appointed Smita Mishra, a Practising Company Secretary to undertake the Secretarial Audit of the Company. The Secretarial Audit report is annexed herewith as "Annexure G" 23. Proposal for listing of equity shares on nation-wide trading platform Pursuant to the SEBI Circulars dated CIR/MRD/DSA/14/2012 and CIR/MRD/ DSA/05/2015 dated May 30, 2012 & April 17, 2015 and after a prolonged discussion, the Board of Directors thought it prudent to get the equity shares of the Company listed on National Stock Exchange of India Limited and/ or BSE Limited in order to persevere the status of listing of equity shares of the Company. 24. Extract of Annual Return The details forming part of the extract of the Annual Return in form MGT-9 is annexed herewith as "Annexure H" 25. Business Risk Management Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 (VI) of the Listing Agreement , the company has constituted a business risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report. At present the company has not identified any element of risk which may threaten the existence of the company. 26. Industrial Relation During the year under review, the industrial relations remained cordial and stable. The directors wish to place on record their appreciation for the excellent cooperation received from all employees at all levels. 27. Particulars of Employees The particulars of employees as required under section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are not applicable, as none of employees, either employed throughout the financial year or part of the financial year, was in receipt of remuneration aggregate of such sum as prescribed under the rules amended up to date. 28. Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo The particulars relating to conservation of energy, technology absorption and foreign exchange earning and outgo required to be disclosed under section 134(3) (m) of the Companies Act, 2013, are annexed here to and forms part of this report. 29. Acknowledgement Your board wishes to place on record its sincere appreciation for the continued assistance and support extended to the company by its customers, vendors, investors, business associates, banks, government authorities and employees. The directors acknowledge with gratitude the encouragement and support extended by the shareholders. For on behalf of the Board of Directors Ashok Kumar Todi Chairman Kolkata May 27, 2015 |