DIRECTORS REPORT Dear Shareholders, Your Directors have pleasure in presenting their 21st Annual Report together with the audited accounts of the Company for the year ended 31st March, 2015. Dividend Your Directors recommend a Dividend of Rs.2.50 per equity share (previous year Rs.2/- per equity share) for the year ended 31st March, 2015. Financial performances Sales & Net Profit: During the year under review, the Company's Sales (incl. Other Operational Income) increased by only 1.3% to Rs.31830.27 Lacs as compared to Rs.31410.28 Lacs during the preceding year. The Company spend Rs.950.65 Lacs (3.0% of Sales) on Advertisement & Promotion in 2014-15 as compared to Rs.570.79 Lacs (1.8% of Sales) in 2013-14. The EBIDTA increased to Rs.2555.38 Lacs (8%) from Rs.2215.29 Lacs (7.1% of Sales). The Profit after Tax during the year was Rs.1432.41 Lacs as compared to Rs.1150.89 Lacs in the previous year, a jump of about 24.5%. The main reasons for improved profitability in 2014-15 were - a. Focus on value added products; b. Better working capital Management. The performance of the Company in 2014-15 would have been better, but for lower exports turnover on account of the political turmoil leading to currency devaluation in few of the geographies of our presence. Consequently, for the first time in over 15 years, our export turnover decreased, albeit by a meagre 4% to reach H87crore in 2014-15 compared to H91crore in 2013-14. However, the Company has already started taking various decisive steps that will help restore the double digit growth rate during the upcoming fiscal Working Capital: The year-end debtors are 46 days of the sales for the year as compared to 48 days in the previous year. The inventory holding is for 73 days' sales as compared to 82 days in the previous year. The total reduction of 11 days helped the Company in bringing down its finance cost by 37.4% for the year 2014-15. A full analysis and discussion on the performance of the Company as well business outlook is included in this Annual Report under the heading 'Management Discussion and Analysis' as Annexure to this Report. Directors' Responsibility statement Pursuant to Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:- (a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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 and loss of the company for that period; (c) the directors had 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; (d) the directors had prepared the annual accounts on a going concern basis; (e) the directors, in the case of a listed company, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and (f) 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. Corporate covenance The Company had complied with the requirements of Corporate Governance in terms of clause 49 of the Listing Agreement with Stock Exchanges. A separate report each on Corporate Governance (Annexure-B, along with Auditors' Certificate on its due compliance) and Management Discussion and Analysis is attached to this report. Listing The equity shares of the Company are listed on BSE Limited (BSE), The Calcutta Stock Exchange Limited (CSE). The equity shares of the Company are also listed on National Stock Exchange of India Limited (NSE) w.e.f 9th March, 2015. DIRECTORS AND KEY MANAGERIAL , PERSONNEL Pursuant to the provision of the Companies Act, 2013, the appointment of Dr. Ranjan Das, Shri Naresh Pachisia, Shri Kedar Nath Ranasaria and Shri Anil Kochar as Independent Director under section 149 of the Companies Act, 2013 for a term of 5 years w.e.f. 29th August, 2014 were approve by the shareholders at their meeting held on 29th August, 2014. Ms. Supriya Newar was appointed as an Additional Director of the Company by the Board of Directors on 31st March, 2015, on recommendation of Nomination and Remuneration Committee. Ms. Newar is recommended for appointment as Independent Director in terms of Section 149 of the Companies Act, 2013, for five consecutive years with effect from the date of the ensuing Annual General Meeting of your Company. In accordance with the Articles of Association of the Company, Shri Deepak Jalan, Managing Director of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for re-appointment. The following persons were appointed as Key Managerial Personnel of the Company in Compliance with provisions of section 203 of the Companies Act, 2013: Shri Deepak Jalan- Managing Director Shri Aloke Jalan- Whole Time Director Shri N. K. Dujari- Chief Financial Officer & Company Secretary Conservation of Energy, Technology Absorption and Foreign- EjocU-M^ge. A statement pursuant to section 134 of the Companies Act, 2013, giving details of measures taken towards conservation of energy, technology absorption, foreign exchange earnings and outgo in accordance with the Companies (Accounts) Rules, 2014 is annexed as Annexure - C. Particulars of employee and related disclosers Disclosure as required Section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 is annexed as Annexure - D. Policy On Directors' Appointment And Remuneration Policy on Directors' Appointment is to follow the criteria as laid down under the Companies Act, 2013 and the Listing Agreement with Stock Exchanges and good corporate practices. Emphasis is given to persons from diverse fields or professions. Policy on Remuneration - Guiding Policy on remuneration of Directors, Key Managerial Personnel and employees of the Company is - • Remuneration to unionised workmen is based on the periodical settlement with the workmen union. • Remuneration to Key Managerial Personnel, Senior Executives, Managers, Staff and Workmen (non Unionised) is industry driven in which it is operating taking into account the performance leverage and factors such as to attract and retain quality talent. • For Directors, it is based on the shareholders resolutions, provisions of the Companies Act, 2013 and Rules framed therein, circulars and guidelines issued by Central Government and other authorities from time to time. Declaration by independent directors Pursuant to Section 149(6) of the Companies Act, 2013, Independent Directors of the Company have made a declaration confirming the compliance of the conditions of the independence stipulated in the aforesaid section. Related Party transaction All related party transactions that were entered into during the year under report were on an arm's length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company during the year. Related Party Transactions Policy is available on website: www.lincpen.com Risk management The Company has a structured risk management policy. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventorised and integrated with the management process such that they receive the necessary consideration during decision making. It is dealt with in greater details in the management discussion and analysis section. ANNUAL EVOLUTION BY BOARD The Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company. WHISTLE BLOWER MECHANISM Your Company has put in place Whistle Blower Mechanism. The detailed mechanism is given in Corporate Governance Report forming part of this report. Extract of annual returns Extract of Annual Return is annexed as Annexure - E. Meeting of the board of directors Five (5) meeting of the Board of Directors were held during the year. The details of the same are provided in the Corporate Governance Report. Auditors Your Directors request you to appoint Auditors for the Current Financial Year. Cost Audit The Company had appointed Mr. Debabroto Banerjee, Cost Accountant, to audit its cost accounting records for the financial year 201415. The due date for filing the Cost Audit Report with the Ministry of Corporate Affairs is 30th September, 2015. Secretarial Audit The Company had appointed M/s D. C. Sahoo & Co., Practising Company Secretaries as the Secretarial Auditor of the Company for the activities given in Annexure-G forming part of financial year 2014-15. The report of the this report. Secretarial Auditor is annexed as Annexure - F. The report does not contain any qualification. Corporate Social responsibility With the enactment of the Companies Act, 2013 and the Companies (Corporate Social Responsibility) Rules, 2014 read with various clarifications issued by Ministry of Corporate Affairs, the Company has undertaken activities as per the CSR Policy and the details are activities given in Annexure-G forming part of this report Acknowledgement Your Directors express their appreciation to all the employees for their valuable contribution. Your directors also wish to express their gratitude for the continued co-operation, support and assistance provided by all the valued Channel Partners, Distributors, Suppliers, Bankers, Shareholders, the Central and State Governments. For and on behalf of the Board Deepak Jalan Managing Director Aloke Jalan Whole Time Director Place : Kolkata Dated : 22nd May, 2015 |