Dear Members,
The Board of Directors of the Company are pleased to present the 30th Annual Report of the company along with the audited financial statements for the financial year ended on March 31, 2023
1. FINANCIAL SUMMARY/ HIGHLIGHTS/ OPERATIONS STATE OF AFFAIRS
The Financial performance of the company for the year ended on March 31, 2023 is summarized below:
[in Rupees]
2. TRANSFER TO RESERVE:
During the year under review, no amount was transferred to the General Reserves.
3. DIVIDEND:
During the year under review, no dividend was declared by the Company.
4. SHARE CAPITAL:
During the year under review the Company has neither issued nor allotted any further Shares and accordingly there was no change in share capital of the Company. The paid up Equity Share Capital of the Company as on March 31, 2022 is Rs. 8,00,00,000/- divided into 80,00,000 Equity Shares of Rs. 10/- each.
5. OPERATING & FINANCIAL PERFORMANCE & INTERNAL CONTROL:
• Performance of the Company:
Your company has generated gross revenue of Rs. 20,76,31,057 as compared to Rs. 26,31,17,308 in the previous year. The revenue from operations by way of trading during the year amounted to Rs 16,65,92,481 compared to Rs. 21,94,46,601 in the previous year. The company had started in its financial year imports of chemicals from Dubai and is seeking opportunities towards indenting and trading of chemicals based on its past experience.
• Performance of Subsidiary Companies/Associate Companies/Joint Ventures:
The Company does not have any Subsidiary or Holding or Associate Company.
• Internal Control:
The Company has in place and established internal control system designed to ensure proper recording of financial and operational information and compliance with various internal controls and other regulatory and statutory compliances. Code of Internal controls which require that the Director review the effectiveness of internal controls and compliances controls, financial and operational risks, risk assessment and management systems and related party transactions, have been complied with.
Company's Policies on Remuneration, Whistle Blower and also Code of Conduct applicable to Directors and Employees of the Company has been complied with. These Policies and Code of Conduct are available on the Company's website www.laffanspetrochemical.com
6. CHANGE IN THE NATURE OF BUSINESS OF THE COMPANY:
There was no change in the nature of business during the financial year under review.
7. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT:
No material changes and commitments affecting the financial position of the Company occurred between the ends of the Financial Year to which this Financial Statements relate on the date of this report.
8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and 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 furnished in Annexure "A" and is attached to this report.
9. POLICY DEVELOPED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY (CSR):
Pursuant to Section 135 of Companies Act 2013 the Company does not fall within the criteria to contribute towards the CSR.
10. DEPOSITS:
Your Company had not accepted the deposits from the public as per Section 74 of Companies Act, 2013 read with Rule 20 of the Companies (Acceptance of Deposits) Rules, 2014.
11. LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:
The details of the Loans, Guarantees or Investments made under Section 186 of the Companies Act, 2013 by the Company, to other Body Corporate or persons are given in notes to the Financial Statements.
12. RELATED PARTY CONTRACTS AND ARRANGEMENTS:
All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. 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 a potential conflict with the interest of the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.
All Related Party Transactions are placed before the Audit Committee as also the Board for approval Disclosures pursuant to Accounting Standards on related party transactions have been made in the notes to the Financial Statements.
The Board of Directors has approved the policy on transactions with related parties ("RPT Policy"), pursuant to the recommendation of the Audit Committee. In line with the requirements of the Act, RBI Regulations and the SEBI Listing Regulations, the Company has formulated the RPT Policy which is also available on the Company's website at www.laffanspetrochemical.com. The RPT Policy intends to ensure that proper reporting; approval and disclosure processes are in place for all transactions between the Company and the related parties.
13. MANAGEMENT DISCUSSION AND ANALYSIS REPORT & CORPORATE GOVERNANCE REPORT
Management Discussion and Analysis Report & Corporate Governance Report of the Company for the year under review are annexed to the Annual Report separately forming its integral part. The certificates issued by M/s. Parveen Lokwani & Co., Auditors, pertaining to compliance of ‘Corporate Governance' conditions by Company, as applicable, and no debarment or disqualification of Directors of the Company by SEBI/ MCA or any other statutory authority from being appointed or continuing as Director of the Company are annexed to Corporate Governance Report as Annexure - B & C respectively.
14. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Company's website.
15. PARTICULARS OF EMPLOYEES:
The information required in accordance with Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further, the Company has no person in its employment drawing salary of One Crore And Two Lakh Rupees per annum or Eight Lakh And Fifty Thousand Rupees per month as defined under the provisions of Section 197 of the Companies Act, 2013, read with Rule 5(2) and 3 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the financial year:
a) The ratio of the remuneration of Directors to the median remuneration of the employees of the Company for the financial year 2022-2023:
The percentage increase in remuneration of Manager, CFO, Whole Time Director and Company Secretary in the Financial Year 2022-2023: 5-26%
c) The Key parameters for any variable component of remuneration availed by the Whole Time Director is dependent on performance of Company and respective employees
d) The percentage increase in the median remuneration of employees in the Financial Year 2022-2023 - 5-26%
e) The number of permanent employees on the rolls of Company as on 31.03.2023 - 08
f) The average percentage increase in the salaries of employees other than the Managerial Personnel compared to the average % increase in the Managerial personnel remuneration - Both has increased between the range of 5-26%
g) The Company affirms that the remuneration is as per the Remuneration Policy of the Company
16. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW:
During the financial year 2022-23, Six (6) Board Meetings were held on May 27, 2022, August 14, 2022, November 14, 2022, December 06, 2022, January 13, 2023 and March 29, 2023. The Board Meetings were held in compliance with the provisions of the Companies Act, 2013.
17. DIRECTORS RESPONSIBILITY STATEMENT:
In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its Responsibility Statement:-
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 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 were operating effectively.
18. DISCLOSURE UNDER SECTION 164(2) OF THE COMPANIES ACT, 2013:
The Company has received the disclosure in Form DIR - 8 from its Directors being appointed or re-appointed and has noted that none of the Directors are disqualified under Section 164(2) of the Companies Act, 2013 read with Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.
19. DECLARATION OF INDEPENDENT DIRECTORS:
The Independent Directors submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules as per the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015.
20. EVALUATION OF THE BOARD'S PERFORMANCE:
In compliance with the requirements of Section 134(3) (p) of the Companies Act, 2013 and Regulation 25 of the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015, the performance of the Board was carried out during the year under review. The Board was evaluated for its performance based on the following factors:
• Attendance of Board Meetings and Committees;
• Contribution made to the Board discussions and future planning;
• Level of commitment to the stakeholders' interest;
• Initiatives towards the growth of the Business and profitability and
• Providing outlook, viewpoints and feedback taking the Company ahead beyond expectations.
21. COMPANY'S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES:
The Board has framed a Policy relating to appointment of Directors, payment of Managerial remuneration, Directors' qualifications, positive attributes, Independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013 based on the recommendation of Nomination and Remuneration Committee.
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the policy on Directors appointment and remuneration for Directors, KMP and other employees, which is available on the website of the Company at www.laffanspetrochemical.com
22. DIRECTORS AND KEY MANAGERIAL PERSONNEL INFORMATION:
In accordance with the requirements of the Act and the Company's Articles of Association, Ms. Anisha Seth, Whole-time Director, retires by rotation and is eligible for re-appointment. Members' approval is being sought at the ensuing AGM for his re-appointment.
In terms of Section 149 of the Act, Mr. Rajesh Udharam Thadani, Mr. Deepak Jagannath Roy and Mr. Gajraj Ramsuphal Mishra are the Independent Directors of the Company. Based upon the declarations received from the Independent Directors, the Board of Directors has confirmed that they meet the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and that they are independent of the management.
In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the Independent Directors of the Company have included their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs.
In terms of Section 203 of the Act, following are the Key Managerial Personnel (KMP) of the Company as on March 31, 2023:
• Mr. Sandeep Seth, Managing Director
• Ms. Anisha Seth, Whole-time Director
• Mr. Mahalinga Kotian, Chief Financial Officer
23. SECRETARIAL AUDIT:
In accordance with the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has got the Secretarial Audit conducted from the Practicing Company Secretary.
A Secretarial Audit Report issued by M/s. Nidhi Bajaj & Associates, Practicing Company Secretaries, in Form MR - 3, in respect of the Secretarial Audit of the Company for the Financial Year ended March 31, 2023, is furnished and attached to this Report as Annexure D.
24. STATUTORY AUDITORS OF THE COMPANY:
At the Annual General Meeting held on September 15, 2022, M/s. JMR & Associates LLP, Chartered Accountant, Statutory Auditors of the Company having registration number (FRN 106912W/W10300) were appointed as statutory auditors of the Company for a term of 5 (five) years from the conclusion of the 29th AGM till the conclusion of the 34th AGM at such remuneration as may be determined by the Board of Directors and the said Auditors from time to time.
M/S. JMR & Associates LLP, Chartered Accountants (FRN 106912W/W100300) resigned as the Statutory Auditors of the Company with effect from November 24, 2022 due to unacceptable revised quotations to the management of the Company.
M/s. Parveen Lokwani & Co. (FRN 143818W) were appointed as statutory auditors of the Company in casual vacancy at the Extra-ordinary General Meeting held on December 30, 2022 upon the resignation of the previous auditor and shall hold office upto the conclusion of the ensuing 30th AGM eligible for appointment in the said AGM.
All above-mentioned Auditors have confirmed their eligibility for appointment in terms of Section 139 of the Act.
There are no qualifications, reservations or adverse remarks or disclaimers made by any of the auditors in their report.
25. COST AUDITORS:
The Company is not required to maintain cost records as per the Companies (Cost Records and Audit) Amendments Rules, 2014 as the turnover of the Company for the Financial Year 2020-21 was less than Rupees 35 Crores.
26. AUDITORS REPORT:
The notes to accounts referred to in the Auditor's Report are self-explanatory and, therefore, do not call for any further comments.
27. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS:
The notes on the financial statement referred in the Auditor's Report are self-explanatory and do not call for any further comments. The Auditor's Report does not contain any qualification, reservation, adverse remark or disclaimer for the Financial Year 2022-23. During the year under review, the Statutory Auditor and the Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees to the Audit Committee under section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.
28. NOMINATION AND REMUNERATION POLICY:
The Board of Directors of the Company has, on recommendation of the Nomination & Remuneration Committee, framed and adopted a policy for selection and appointment of Directors, Senior Management and their remuneration.
The Board of Directors has, based on the recommendation of the NRC of the Company, approved the policy on Directors' appointment and remuneration for Directors, KMP and other employees, is available on the website of the Company at www.laffanspetrochemical.com.
29. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:
Your Company has constituted an Audit Committee as required under Section 177 of the Companies Act, 2013 and has also established Vigil Mechanism for their employees and Directors to report their genuine concerns or grievances. The Board has accepted all the recommendations of the Audit Committee during the year under review as and when brought to their notice.
The mechanism framed by the Company is in compliance with the requirements of the Act and SEBI Listing Regulations and the same is available on the website of the Company at www.laffanspetrochemical.com
30. LISTING:
Your Company's Equity Capital is listed on the Bombay Stock Exchange. The Company confirms that it has paid annual listing fees due to these stock exchanges for the year 2022-23 and has been diligent in observing all the compliances as stipulated in the SEBI (Listing Obligation and Disclosure Requirement) Regulation, 2015.
31. DEPOSITORY SYSTEM:
Your Company has entered into agreement with the National Securities Depository Limited as well as the Central Depository Services (India) Limited (CDSL) to enable shareholders to hold shares in a dematerialized form. The Company also offers simultaneous dematerialization of the physical shares lodged for transfer.
32. INTERNAL CONTROL SYSTEM:
Your Company continuously invests in strengthening its internal control processes and has appointed M/s. Pushp Sahu & Co., Chartered Accountants as the Internal Auditors of the Company for the FY 2022-23. The Company has put in place as adequate system of internal control commensurate with its size and nature of business.
The systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. Audit Committee periodically reviews the performance of internal audit system.
The Audit Committee reviews adherence to internal control systems and internal audit reports. Further, the Board annually reviews the effectiveness of the Company's internal control system.
33. SHARES & SECURITIES:
a) Buy Back of Securities
The Company has not bought back any of its securities during the year under review.
b) Sweat Equity
The Company has not issued any Sweat Equity Shares during the year under review.
c) Bonus Shares
No Bonus Shares were issued during the year under review.
d) Employees Stock Option Plan
The Company has not provided any Stock Option Scheme to the employees.
34. ACKNOWLEDGEMENTS:
Your Directors sincerely appreciate the high degree of professionalism, commitment and dedication displayed by the employees at all levels. Your Directors also wish to place on record their gratitude to the shareholders for their continued support and confidence.