To, The Members of
LS Industries Limited
Your Directors have great pleasure in presenting the 30th Annual Report along with the Company's Audited Financial Statement for the Financial Year ended March 31, 2024.
FINANCIAL HIGHLIGHTS
The performance of your Company for the Financial Year ended March 31, 2024 is summarized below:
(Amount in INR.)
STATE OF COMPANY'S AFFAIRS
During the year under review, your Company recorded a total income of Rs.57,49,232 as compared to Rs. 52,49,120 in the previous financial year, higher by Rs. 5,00,112. The Profit/(Loss) after tax for the same period stands at Rs. (3,31,73,831) as compared to the Profit/(Loss) after tax of Rs. (8,83,06,705) in the previous financial year. Your directors are putting in their best efforts to improve the performance of the Company.
CHANGE IN NATURE OF BUSINESS
During the year under review, there is no change in the business activities of the Company.
DIVIDEND
The Board has not proposed any dividend for the Financial Year 2023-24, because Company has losses.
TRANSFERRED TO RESERVES
During the year under review, no amount from profit was transferred to General Reserve Account.
ANNUAL RETURN
The Annual Return as required under Section 92(3) and Section 134 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the Company's website at https://lsindustrieslimited.com.
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Annual Audited Financial Statements for the Financial Year 2022-2023, forming part of this Annual Report, have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standard) Rules, 2015 and requirements of Division II of Schedule III of Companies Act, 2013 and applicable Rules (hereinafter referred to as “the Act”) and in accordance with applicable regulations of Securities and Exchange Board of India (Listing Obligations and Disclosures Requirement) Regulations, 2015 (hereinafter referred to as the “Listing Regulations”).
TRANSFER OF UNCLAIMED DIVIDEND AMOUNTS AND SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:
There is no unclaimed or unpaid dividend lying with the Company. Therefore, during the year under review, the Company was not required to transfer any amount to Investor Education and Protection Fund.
AUDITORS:
(a) STATUTORY AUDITORS:
M/s. Mahesh Kumar & Associates, Chartered Accountants FRN-029649N, Existing Auditors of the Company, has resigned from the Company, due to pre-occupation in some other assignments w.e.f.28/06/2024. Pursuant to the provisions of Section 139(8) and other applicable provisions, if any, of the Companies Act, 2013 and rules made there under, the Casual vacancy caused by the resignation of Statutory Auditors can be filled by the Board of Directors within 30 days, but such appointment shall also be approved by the members of the Company at a general meeting convened within 3 months from the recommendation by the Board of Directors and shall hold the office till the conclusion of the next Annual General Meeting. In this regard, subject to the approval of the members in the 30th Annual General Meeting, the Board of Directors has recommended/re-appointed M/s. Sangeet Kumar & Associates, Chartered Accountants, (Firm Registration No.011954N), as the Statutory Auditors of the Company for the financial year 2024-25 and hold office until the conclusion of the next Annual General Meeting. The Ordinary Resolution seeking approval of the members for the appointment of M/s. Sangeet Kumar & Associates, Chartered Accountants, (Firm Registration No.011954N), forms a part of the Notice of this ensuing 30th Annual General Meeting.
Your Company has received written consent(s) and certificate(s) of eligibility in accordance with Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules issued thereunder, from M/s. Sangeet Kumar & Associates, Chartered Accountants, (Firm Registration No.011954N).
Auditors Report and response to auditors' remarks
There are no qualifications, reservations or adverse remarks made by M/s. Mahesh Kumar & Associates, Chartered Accountants (FR No-029649N) Statutory Auditors in their report for the Financial Year ending March 31, 2024.
Fraud Reporting:
During the year under review, no incident of fraud has been reported by the Statutory Auditors to the Audit Committee pursuant to the provisions of Section 143(12) of the Companies Act, 2013.
(b) SECRETARIAL AUDITORS:
In terms of Section 204(1) of the Companies Act, 2013 and Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company appointed CS Sudhakar Jha-M/s. Sudhakar & Co., Practicing Company Secretaries, to conduct Secretarial Audit for the Financial Year 2023-24. The report of the Secretarial Audit Report is annexed herewith as “Annexure-A”. The Secretarial Audit Report for the financial year ended March 31, 2024, contains certain reservation and remarks as follow:
(i) The Company has not filed annual return in Form MGT-7 as required under section 92 of the Companies Act, 2 0 1 3 and read with the Companies (Management and Administration) Rules, 2014 for the financial year ended March 31, 2023.
(ii) Whereas in terms of the provisions of section 138 of the Companies Act, 2013, the Company has not appointed Internal Auditor during the year.
(iii) Whereas in terms of the provisions the Companies (Appointment and Qualification of Directors) Rules, 2014, Every individual who intends to get appointed as an independent director in a Company, shall before such appointment, apply online to the institute for inclusion of his name in the data bank, the independent directors of the Company could not comply with the same.
(iv) Whereas in terms of the provisions of Section 203 of the Companies Act, 2013 and Regulation 26A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company was required to have certain Key Managerial Personnel (KMP). The Company has not appointed the Managing Director, or Chief Executive Officer or Manager and in their absence, a Whole-Time Director.
(v) The Company has not filed/filed with delay following forms/returns required to be submitted with the Registrar of Companies.
(vi)Whereas in terms of the Regulation-23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is required to submit disclosure of Related Party Transaction every six months on the date of publication of its results, the Company complied with delay.
(vii)Whereas in terms of the Regulation-24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company shall submit a secretarial compliance report in such form as specified, to the stock exchanges, within sixty days from end of each financial year, the Company could not comply with the same for the year ended March 31, 2024.
(viii) Whereas in terms of the provisions of Section 149 read with rules and Regulation 17 & 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the term of appointment as an Independent Director of Mr. PRATEEK PURI (DIN-07194679) and Mr. ANKUR MAHINDRU (DIN-06592338) has been expired on 20/12/2023 & 24/12/2023 respectively and the Company has not re-appointed the same during the year.
Due to this the composition of Board of Directors and Committees to the Board of Directors of the Company has attracted the non-compliance.
(ix) Whereas in terms of the Regulation-27 of the SEBI (LODR) Regulations, 2015, the Company has filed quarterly compliance report on corporate governance to the stock exchange but could not signed by the compliance officer of the Company.
(x) Whereas in terms of the Regulation 30 of the SEBI (LODR) Regulations, 2015, the Company shall make disclosures of events or information which, in the opinion of the board of directors of the Company, is material, to the stock exchange, the Company could not comply the same.
(xi) Whereas in terms of the Regulation-33 of the SEBI (LODR) Regulations, 2015, the Company has received query of discrepancies in the financial results filed with the Stock Exchanges.
(xii) Whereas in terms of the Regulation-33 of the SEBI (LODR) Regulations, 2015, the Company has appointed the auditor, who does not hold valid peer review certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
(xiii) The Company could not file of Annul Report in XBRL Mode for the year ended March 31, 2023, in terms of the Regulation 34 of SEBI (LODR) Regulations, 2015.
(xiv) Whereas in terms of the Regulation-46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has maintained the website (https://lsindustrieslimited.com) but the website properly not functioning and the Company could not disseminate information timely.
(xv) Whereas in terms of the Regulation 3(5) of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company was required to maintained Structured Digital Database (SSD) capturing all the details regarding unpublished price sensitive information (UPSI) and submit the SDD
Compliance Certificate to the Stock Exchange on quarterly basis, the Company could not comply with the same for the year, except MQ-24.
(xvi) Whereas in terms of the provisions of the Foreign Exchange Management Act, 1999 (“FEMA Act”) and the Rules and Regulations made thereunder, the Company was required to submit the annual return on Foreign Liabilities and Assets (FLA) to the RBI, the Company could not comply with the same for the year.
(xvii) During the year under review, the Company timely could not reply to the queries or discrepancy raised by the stock exchange and filing of the necessary documents as required. Further the Company could not made properly disclosures as required by the applicable laws and not adherence with the applicable Secretarial Standards.
Explanation or comment by the Board on above qualifications, reservations, or adverse remarks:
The board of directors have informed that at presently, Company could not able to earn adequate revenue to reach its production cost break even. The lower market pricing of yarn and non- availability of labour has raised serious concern for the Company to run its operations. Therefore, board has decided that company's business operation to be temporary closed. The Company's financial position has been severely impacted due to closure of manufacturing operations. The Company could not afford the salary and remuneration of competent financial and compliance personnel(s) for its respective compliance work. Therefore, Company lacks with timely compliance and in the company. The board is looking out new avenue of business. The board is putting it's best efforts to resolve the financial and compliance issues at earliest and shall come up with positive outcome.
Annual Secretarial Compliance Report
Pursuant to Regulation 24A of Listing Regulations, Annual Secretarial Compliance Report of the Company for the financial Year ended March 31, 2024 was not taken and accordingly not submitted to the Stock Exchanges within the prescribed time framework.
(c) INTERNAL AUDITORS:
During the year under review, Company was unable to appoint any internal auditor or the position of Internal Auditor of the Company in terms of the provisions of Section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 for the current financial year.
CORPORATE SOCIAL RESPONSIBILITY:
Since the Company does not meet the criteria laid down in Section 135(1) of the Companies Act, 2013, the Company is not required to comply with the provisions contained in sub- section (2) to (5) of Section 135 and constitute Corporate Social Responsibility Committee.
NOMINATION AND REMUNERATION POLICY:
In compliance with the provisions of Section 178 of the Act, the Nomination and Remuneration Policy of the Company has been designed to keep pace with the dynamic business environment and market linked positioning. The Policy has been duly approved and adopted by the Board pursuant to recommendations of Nomination and Remuneration Committee o f the Company and is placed o n the website o f the Company at https://lsindustrieslimited.com.
DIVIDEND DISTRIBUTION POLICY
Pursuant to Regulation 43A of the SEBI (LODR) Regulations, 2015, top five hundred listed entities based on market capitalization are required to formulate a Dividend Distribution Policy. Accordingly, your Company is not required to formulate the Dividend Distribution Policy.
REPORT ON RISK MANAGEMENT POLICY:
Pursuant to section 134(3) (n) of the Companies Act, 2013 and as per provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, the Company has adhered to the principles of sound risk management and already has a Risk Management Policy in place. An ongoing exercise is being carried out to identify, evaluate, manage and for monitoring of both business and non-business risk. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.