Your Directors take pleasure in presenting the Sixty Second Annual Report of yourCompany together with the audited accounts for the year ended 31st March 2018.
The summary of the financial performance of the Company for the year ended 31st March2018 as compared to the previous year is as below
| || |
|Particulars ||31.03.2018 ||31-03-2017 ||31-03-2018 ||31-03-2017 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|TOTAL REVENUE ||145933.92 ||140287.38 ||135555.03 ||128720.80 |
|Profit before interest depreciation & Tax ||19954.36 ||16933.14 ||18666.88 ||15293.66 |
|Less : Interest ||1057.14 ||1449.93 ||978.13 ||1310.79 |
|Depreciation ||5779.47 ||5282.04 ||5412.75 ||4935.86 |
|PROFIT BEFORE TAX ||13117.75 ||10201.17 ||12276.00 ||9047.01 |
|Add : Exceptional Items ||- ||131.33 ||- ||131.33 |
|Less Provisions for Taxation || || || || |
|Current Income Tax / Mat ||4119.98 ||3212.43 ||4119.98 ||2870.50 |
|Deferred Tax (Credit / charge) ||146.08 ||(294.91) ||146.08 ||(297.50) |
|PROFIT AFTERTAX BEFORE SHARE IN PROFIT OF ASSOCIATE ||8851.69 ||7 520.23 ||8009.94 ||6605.34 |
|Add : Share in Profit of Associate ||96.64 ||105.25 ||- ||- |
|PROFIT AFTER TAX ||8948.33 ||7625.48 ||8009.94 ||6605.34 |
4 Effective date 27.07.2018 the Company completed the merger of M/s.B.C.W. VTech India (P) Limited. Financial Year2017 has been restated considering the saidmerger. The appointed date of merger was April 1 2017.
INDIAN ACCOUNTING STANDARDS (IND AS)
The Company had adopted Ind AS with effect from 1st April 2017 pursuant tothe Ministry of Corporate Affairs notification dated 16th February 2015notifying the Companies (Indian Accounting Standard) Rules 2015. Accordingly theFinancial Statements for the year ended 31st March 2018 of the Company and itssubsidiary were prepared with comparative data in compliance with Ind AS.
During the year under review your Company's consolidated total revenue stood at Rs.145933.92 Lakhs as compared to Rs. 140287.38 Lakhs for the previous year representingan increase of 4.02%; profit before exceptional and extraordinary items and tax stood atRs. 13117.75 Lakhs for the year under review as compared to Rs. 10201.17 Lakhs for theprevious year profit after tax after share of Profit of Associate stood at Rs. 8948.33Lakhs as compared to Rs. 7625.48 Lakhs for the previous year.
During the year under review the Total Revenue stood at Rs. 135555.03 Lakhs ascompared to Rs. 128720.80 Lakhs for the previous year profit before exceptional andextraordinary items and tax stood at Rs. 12276.00 Lakhs for the year under review ascompared to Rs. 9047.01 Lakhs for the previous year profit for the year stood at Rs.8009.94 Lakhs as compared to Rs. 6605.34 Lakhs for the previous year.
TRANSFER TO RESERVES
The Company has transferred an amount of Rs. 7500 Lakhs to the General Reserve out ofthe amount available for appropriations and the remaining amount of Rs. 7527.24 Lakhs hasbeen retained in the Profit and Loss Account.
Your Company has a consistent track record of dividend payment. Continuing with thistrend Directors are pleased to recommend a dividend of Rs. 4.50 (45%) per share of Rs.10/- each on Equity Share Capital of the Company which includes the bonus shares allottedsubject to the approval of shareholders at the ensuing Annual General Meeting which wouldresult in appropriation of Rs. 1413.00 Lakhs out of profits of the Company for the currentyear as against Rs. 1099.00 Lakhs in the previous year.
The dividend if approved by the members at the forthcoming Annual General Meeting willbe paid in compliance with applicable regulations.
TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND
The Company sends intimations to all shareholders whose dividends are unclaimed so asto ensure that they receive their rightful dues. Efforts are also made to co-ordinate withthe Registrar and Share Transfer Agents to locate the shareholders who have not claimedtheir dues.
During the financial year 2017-18 the Company has transferred a sum of Rs. 4.44 Lakhsto Investor Education & Protection Fund the amount which was due and payable andremained unclaimed and unpaid for a period of seven years. Despite the reminder letterssent to each shareholder the amount remained unclaimed and the same was transferred.
The Company has uploaded the details of unpaid and unclaimed amounts lying with theCompany as on 27th July 2017 (date of last Annual General Meeting) on thewebsite of the Company (www.lgb.co.in ) as also on the Ministry of Corporate Affairswebsite.
The paid up share capital of the Company as at 31st March 2018 aggregates toRs. 156962080/- comprising of 15696208 equity shares of Rs. 10/- each fully paid up.
The Company has issued 15696208 fully paid up Equity Shares of Rs. 10/- each as BonusShares in the ratio of 1:1 to the shareholders of the Company as on June 16 2018 bycapitalizing a sum of Rs. 156962080/- out of the Securities Premium Account and GeneralReserve account of the Company.
AMALGAMATION / MERGER
The Honble National Company Law Tribunal Chennai Bench (NCLT) vide its order datedJuly 13 2018 sanctioned the Scheme of Amalgamation of M/s. BCW VTech India PrivateLimited with the Company with effect from the appointed date April 1 2017. The said orderwas filed with the Registrar of Companies Coimbatore on July 27 2018 pursuant to whichthe Scheme has come into effect.
Accordingly the financial statements for the year ended March 31 2018 have beenpresented giving effect to the said Amalgamation.
NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS
Detailed composition of the Board and Board Committees namely Audit CommitteeNomination and Remuneration Committee CSR Committee Stakeholders Relationship Committeenumber of meetings held during the year under review attendance of each Director andother related details are set out in the Corporate Governance Report which forms a part ofthis Report.
DECLARATION BY INDEPENDENT DIRECTORS
Our definition of Independence' of Directors is derived from Regulation 16(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and Section 149(6) of the Companies Act 2013. Based onthe confirmation / disclosures received from the Directors and on evaluation of therelationships disclosed the following Non-Executive Directors are Independent:
Sri. P. Balasubramanian Sri.V. Govindarajulu Sri. P. Shanmugasundaram Dr. T. BalajiSri. R. Vidhya Shankar
Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the Directors individually and theCommittees of the Board.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom Directors covering aspects of the Board's functioning such as adequacy of theComposition of the Board and its Committees execution and performance of specific dutiesobligations and governance.
A separate exercise was carried out to evaluate the performance of the IndividualDirectors including the Chairman of the Board. The Directors' performance was evaluated onparameters such as level of engagement and contribution in safeguarding the interest ofthe Company etc.
The performance evaluation of the Independent Directors was carried out by the entireBoard. Further the performance evaluation of the Chairman and Non Independent Directorswas carried out by the Independent Directors.
In compliance with the requirements of the Listing Regulations the Company has put inplace a familiarization programme for the Independent Directors to familiarize them withtheir roles rights and responsibilities as Independent Directors the working of theCompany nature of the industry in which the Company operates business model and so on.The same is also available on the Company website at www.lgb.co.in.
DIRECTORS RETIREMENT BY ROTATION
Pursuant to the provisions of Section 152 of the Companies Act 2013 Sri. V.Rajvirdhan (DIN: 00156787) & Sri. S. Sivakumar (DIN:00016040) Directors being longestin the office are liable to retire by rotation at the ensuing Annual General Meeting ofthe Company and being eligible have offered themselves for re-appointment. Necessaryresolutions for their re-appointment are included in the Notice of AGM for seekingapproval of Members. The Directors recommend their re-appointment for your approval.
A brief resume and particulars relating to them are given separately as an annexure tothe AGM Notice.
KEY MANAGERIAL PERSONNEL
There were no changes in the Key Managerial Personnel during the year.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended on 31st March 2018 theBoard of Directors hereby confirms that
(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;
(b) that such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for that period;
(c) proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts of the Company have been prepared on a going concern basis;
(e) internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;
(f) proper system have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
NOMINATION AND REMUNERATION POLICY
The Company pursuant to the provisions of Section 178 of the Companies Act 2013 and interms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy onNomination and Remuneration for its Directors Key Managerial Personnel and seniormanagement which inter-alia provides the diversity of the Board and provides the mechanismfor performance evolution of the Directors and the said policy have been outlined in theCorporate Governance Report which forms part of this Report.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT-9 is annexed to thisReport as "Annexure - A".
Pursuant to provisions of Section 139 of the Act and Rules there under M/s. Sun &Co Chartered Accountants (Firm Registration No. 004283S) were appointed as StatutoryAuditors of the Company for a term of five years to hold office from the conclusion of 61stAnnual General Meeting until the conclusion of 66th Annual General Meeting andconfirmed their eligibility and desire to continue as Statutory Auditors of the Companyfor the financial year 2018-19.
The Auditors' Report for the financial year 2018 does not contain any qualificationreservation adverse remark or disclaimer.
Pursuant to the provisions of Section 148 of the Companies Act 2013 read withnotifications/ circulars issued by the Ministry of Corporate Affairs from time to time andas per the recommendation of the Audit Committee the Board of Directors at their meetingdated 28th April 2018 appointed Dr. G.L. Sankaran Cost Accountant as CostAuditor of the Company for the financial year 2018-2019. The Cost Audit Report for thefinancial year 2017-2018 will be filed within the period stipulated under Companies Act2013.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.D. Selvaraj of M/s. MDS & Associates Company Secretaries asSecretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Yearended 31st March 2018.
The Secretarial Audit Report for the Financial Year ended 31st March 2018in Form No. MR-3 is annexed to this Report as "Annexure B".
The Secretarial Audit Report does not contain any qualification reservation or adverseremark.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY
During the financial year ended 31st March 2018 no Loan under section 186of the Companies Act 2013 was given by the Company. In respect of investment loanguarantee given in earlier years please refer notes to standalone financial statements.
RELATED PARTY TRANSACTIONS
Details of the transactions with Related Parties are provided in the accompanyingfinancial statements. There were no transactions during the year which would require to bereported in FormAOC.2.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2018 AND THE DATE OF THE REPORT
Hon'ble National Company law Tribunal Chennai Bench vide order dated July 13 2018sanctioned the Scheme of Amalgamation of M/s. BCW V tech India Private Limited (TransferorCompany) with M/s. L.G. Balakrishnnan & Bros Limited (Tranferee Company) pursuant towhich all the assets and liabilities of the transferor Company have been vested with theCompany with effect from appointed date ie. April 1 2017.
Pursuant to the approval of the members by Postal Ballot the Company has allotted15696208 fully paid equity shares as Bonus Shares in the ratio of 1:1 to theshareholders as on June 16 2018 and accordingly the paid up share capital of the Companyhas been increased to Rs. 3139241607-
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as "Annexure -C".
RISK MANAGEMENT POLICY
The Board of Directors of the Company has formulated a Risk Management Policy whichaims at enhancing Shareholder's value and providing an optimum risk-reward trade off. Therisk management approach is based on the clear understanding of the variety of risks thatthe organization faces disciplined risk monitoring and measurement and continuous riskassessment and mitigation reserves.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
The brief outline of the Corporate Social Responsibility (CSR) policy of the Companyand the initiatives undertaken by the Company on CSR activities during the year are setout in "Annexure - D" of this report in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014.
For other details regarding the CSR Committee please refer to the corporate governancereport which forms part of this report. The policy is available on the website of theCompany http://www.lgb.co.in/pdf/ corporatesocial- responsibility-policy.pdf.
As at 31st March 2018 fixed deposits accepted by the Company from publicand shareholders aggregated to Rs. 3868.74 Lakhs which are within the limits prescribedunder the Companies Act 2013 and the rules framed there under.
With the notification of applicable provisions of the Companies Act 2013 governingdeposits with effect from 1st April 2014 approval of shareholders wasobtained by way of Special Resolution for inviting/ accepting/ renewing deposits.
The provisions of the Companies Act 2013 also mandate that any Company inviting/accepting/ renewing deposits is required to obtain Credit Rating from a recognized creditrating agency. Your Company has obtained a credit rating "MAA-" for its fixeddeposit from ICRA.
The details relating to deposits covered under Chapter V of the 2013 Act are given hereunder:
Rs. In Lakhs
|Accepted during the year ||142.62 |
|Remained unpaid or unclaimed as at the end of the year ||Nil |
|Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so number of such cases and the total amount involved ||Nil |
|a) At the beginning of the year ||NA |
|b) Maximum during the year ||NA |
|c) At the end of the year ||NA |
|The details of deposits which are not in compliance with the requirements of Chapter V of the Act ||NA |
DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL.
No Significant and Material orders have been passed by any Regulator or Court orTribunal which can have an impact on the going concern status and the Company's operationsin future
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records.
The Directors and Management confirm that the Internal Financial Controls (IFC) areadequate with respect to the operations of the Company. A report of Auditors pursuant toSection 143(3) (i) of the Companies Act 2013 certifying the adequacy of InternalFinancial Controls is annexed with the Auditors report
DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013
Details pursuant to Section 197(12) of the Companies Act 2013 read with the Companies(Appointment and
Remuneration of Managerial Personnel) Rules 2014 form part of this Report and areannexed herewith as "Annexure - E"
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has established adequate internal control procedures commensurate withthe nature of its business and size of its operations. The Company maintains all itsrecords in SAP System and the work flow and approvals are routed through SAP.
The Company has appointed Internal Auditors to observe the Internal Controls whetherthe work flow of organization is being done through the approved policies of the Company.In every Quarter during the approval of Financial Statements Internal Auditors willpresent the Internal Audit Report and Management Comments on the Internal Auditobservations;
The Board of Directors of the Company have adopted various policies like Related PartyTransactions Policy Whistle Blower Policy Policy to determine Material Subsidiaries andsuch other procedures for ensuring the orderly and efficient conduct of its business forsafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.
SUBSIDIARY COMPANIES JOINT VENTURE AND CONSOLIDATED FINANCIAL STATEMENTS:
The Company has three subsidiaries viz. LGB USA INC. (Direct Overseas Subsidiary)GFM Acquisition LLC and GFM LLC (Step down overseas subsidiaries) in USA. There is OneAssociate Company Viz. M/s. Renold Chain India Private Limited within the meaning ofSection 2(6) of the Companies Act 2013 ("Act"). On 13.07.2018 Hon'ableNational Company Law Tribunal Chennai has approved merger of Wholly owned Subsidiary M/s.BCW VTech India Private Ltd with the Company and it is effective from 27.07.2018.
Statement containing salient features of financial statements of subsidiaries pursuantto Section 129(3) of the Companies Act 2013 (Act) read with Rule 5 of The Companies(Accounts) Rules2014 is annexed to this Report as "Annexure F" in theprescribed Form AOC-I.
As per the provisions of Section 136 of the Companies Act 2013 the Company has placedseparate audited accounts of its subsidiaries on its website www.lgb.co.in and copy ofseparate audited financial statements of its subsidiaries will be provided to theshareholders at their request.
The Company has laid down policy on Material subsidiary and the same is placed on thewebsite http:// www.lgb.co.in/pdf/policy-on-material-subsidiaries.pdf
None of the subsidiaries are material subsidiary as per the provisions of SEBI (LODR)Regulations 2015.
Your Company has a 25:75 joint venture with M/s. Renold Holding PLC United Kingdomunder the name of M/s. Renold Chain India Private Limited. This Joint Venture Company iscreated with an objective to use advanced technology and know-how for production ofIndustrial Chains.
In Financial Year 2017-18 JV achieved sales of Rs. 81.51 Crores (Net of Taxes) againstRs. 77.80 Crores (Net of Taxes) in 2016-17. Growth in sales and margin improvement hasresulted in net profit of Rs. 6.13 Crores as against net profit of Rs. 1.99 Crores in2016-17.
NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESORASSOCIATE COMPANIES DURING THE YEAR
M/s. BCW V Tech India Private Limited the earstwhile wholly owned subsidiary of theCompany is no longer in existence due to merger vide order dated 13.07.2018.
CHANGE IN THE NATURE OF BUSINESS IF ANY
There was no change in the nature of business of the Company during the financial yearended 31st March 2018.
MANAGEMENT DISCUSSION & ANALYSIS
As per requirements of Listing Regulations a detailed review of the developments inthe industry performance of the Company opportunities and risks internal controlsystems outlook etc. of the Company is given under the head Management Discussion andAnalysis Report which forms part of this Annual Report.
CORPORATE GOVERNANCE REPORT
Your Company has complied with the Corporate Governance norms as stipulated under theListing Regulations. A detailed report on Corporate Governance forms part of this AnnualReport. A certificate from Practising Company Secretary confirming compliance of theCorporate Governance requirements by the Company is attached to the Report on CorporateGovernance.
Audit Committee of the Company meets the requirements of section 177 of the CompaniesAct 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details of the composition of the Audit Committee as required underthe provisions of Section 177(8) of the Companies Act 2013 are given in the CorporateGovernance Report which forms part of this annual report. During the year under reviewthe Board has accepted all the recommendations of the Audit Committee.
VIGIL MECHANISM/WHISTLE BLOWER POLICY
The Company has established a Whistle Blower Policy for Directors and employees toreport their genuine concern. The details of the same is explained in the CorporateGovernance Report.
LISTING OF EQUITY SHARES
The Company's equity shares continue to be listed at National Stock Exchange of IndiaLimited and BSE Limited. We confirm that the Listing fee for the financial year 2018-2019has been paid to them.
Your Company Firmly believes that employees are its most valued resource and theirefficiency plays a key role in achieving defined goals and building a competitive workenvironment. Many initiatives have been taken to support business through organizationalefficiency process change support and various employee engagement programmes which hashelped the Organization achieve higher productivity levels. In its pursuit to attractretain and develop best available talents several programmes are regularly conducted atvarious levels across the Company.
Employee relations continued to be cordial and harmonious across all levels and at allthe units of the Company.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE
The Company has an Internal Compliant Committee as required to be formed under Section4 of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal)Act 2013 and rules made there under which were notified on 9 December 2013.
The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and Redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules there under.
During the financial year 2017-18 the committee submitted it's Annual Report asprescribed in the said Act and there was no complaint as regards of sexual harassmentreceived by the Committee during the year.
The Board of Directors take this opportunity to place on record their appreciation toall the Stakeholders of the Company viz. customers investors banks regulatorssuppliers and other business associates for the support received from them during the yearunder review. The Directors also wish to place on record their deep sense of gratitude andappreciation to all the employees for their commitment and contribution towards achievingthe goals of the Company.
For and on behalf of the Board of Directors
Chairman cum Managing Director
Deputy Managing Director
DIN : 01709564