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Lakshmi Automatic Loom Works Ltd.
|BSE: 505302||Sector: Industrials|
|NSE: N.A.||ISIN Code: INE718M01014|
|BSE 10:35 | 14 Oct||32.40||
|NSE 05:30 | 01 Jan||Lakshmi Automatic Loom Works Ltd|
|Mkt Cap.(Rs cr)||22|
|Mkt Cap.(Rs cr)||21.68|
Lakshmi Automatic Loom Works Ltd. (LAKAUTOLOOMS) - Director Report
Company director report
to the Shareholders
Your Directors submit their Forty Fourth Annual Report together with the AuditedBalance Sheet as at 31st March 2018 and the Statement of Profit and Loss forthe year ended 31st March 2018.
Financial Summary / Highlights Rs in Lakhs
Transition to Indian Accounting Standards
The Company has adopted the Indian Accounting Standards (Ind AS) from April 1 2017with a transition date of April 1 2016 pursuant to the Notification dated 16.02.2015 inthe official gazette by the Ministry of Corporate Affairs (MCA) . The following are theareas which had an impact on account of transition to Ind AS
- Investment Property presented separately with the fair values
- 6% Cumulative Redeemable Preference Share Capital considered as borrowing
- Employee Cost pertaining to defined benefit obligation
- Revenue recognition
- Deferred taxes
The reconciliation and description of the effect of the transition from GAAP to Ind AShave been provided in the Notes to Accounts.
The operations during the year have resulted in a net profit of Rs 237.27 lakhs afterproviding for depreciation of Rs 35.99 lakhs. The net profit after Tax is Rs 174.07 lakhs.
On adoption of Ind AS the revenue segments of the Company have been reclassified as a)Warehousing Rental Services being the Unit 1 at SIPCOT Industrial Complex Hosur - 635 126and b) Other Engineering Services being Unit 2 at Pollachi Road Coimbatore 642 109.
The Warehousing Rental Services segment consists of Warehousing Rental income on theLand and Buildings at Hosur and the Other Engineering Services segment consists ofManufacture and Sale of Accessories and Spares of Weaving and Knitting Machines and Partsand Accessories for Machine Tools at Pollachi Road Coimbatore - 642 109.
Warehousing Rental Services
The income generated from Warehousing Rental Services during the year was Rs 458.75lakhs against Rs 414.06 lakhs in the previous year.
Other Engineering Services
The sale of Accessories and Spares of Weaving Machines during the year was Rs 69.06lakhs against Rs 113.49 lakhs in the previous year.
The sale of Parts and Accessories for Machine Tools during the year was Rs 194.69 lakhsagainst Rs 163.81 lakhs in the previous year. The inflow of orders for Parts andAccessories for Machine Tools from an EOU is based on the demand in the internationalmarket.
The Company's income mainly consists of Warehousing Rental income on Land and Buildingsat Hosur. In view of the demand for Warehousing Space at Hosur being near to Bangalorethe Company is constructing additional Buildings in the existing land to augment itsrevenue.
The paid up Equity Share Capital as on March 31 2018 is Rs 610.40 lakhs. The Companybought back unlisted 200000 - 6% Cumulative Redeemable Preference Shares of Rs 100/-each amounting to Rs 200 lakhs during the year by utilising the Securities Premium Amount.As required under Ind AS the 6% Cumulative Redeemable Preference Share Capital of Rs 400lakhs is classified under Borrowings in the Balance Sheet as on 31-03-2018.
During the year under review the Company has not issued any shares or any convertibleinstruments.
The Company has not accepted any deposit from public falling within the ambit ofSection 73 of the Companies Act 2013.
Extract of Annual Return
The Extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014in form MGT-9 is furnished in Annexure 1 forming part of the Board's Report.
Board and its Committees Meetings conducted during the year under review
Five Meetings of the Board of Directors were held on 29.05.2017 09.08.201725.09.2017 06.12.2017 and 07.02.2018 during the Financial Year from 1stApril 2017 to 31st March 2018. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
Details of Attendance of each Director at the Meetings of the Board and variousCommittees of the Board during the financial year ended 31st March 2018 are asbelow:
The Independent Audit Committee as below consists of three Independent Directors andone Non-Executive Director as its members. Sri R.C.H.Reddy Independent Director is theChairman of the Committee.
The Company Secretary is the Secretary of the Audit Committee.
Four Committee Meetings were held during the Financial Year ended 31stMarch 2018 on 29.05.2017 09.08.2017 06.12.2017 and 07.02.2018. The Statutory AuditorsInternal Auditors the Chief Executive Officer and the Chief Financial Officer attend theAudit Committee Meetings on invitation. The Senior Managerial Personnel attend themeetings as may be required by the Committee.
Nomination and Remuneration Committee
The Committee has been re-constituted as below at the Board Meeting held on 07.02.2018with four Directors as Members of which two Members are Independent Directors. TheChairman of the Committee Sri R.C.H. Reddy is an Independent Director.
The Committee has met two times during the Financial Year ended 31st March2018 on 25.09.2017 and 07.02.2018. The Company Secretary is the Secretary of theCommittee.
Nomination and Remuneration Policy
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a Policy for selection and appointment of Directors Key Managerial Personnel andtheir remuneration in terms of Section 178(3) of the Companies Act 2013. The Nominationand Remuneration Policy as approved by the Board is disclosed on the Company's website atthe link at :http://www.lakshmiautomatic.com/investors/policies/nomination-and-remuneration-policy/ interms of the proviso to Section 178(4) of the Companies Act 2013.
Salient Features of the Policy include:
To lay down criteria and terms and conditions with regard to identifying personswho are qualified to become Directors (Executive and Non-Executive) and persons who may beappointed in Senior Management and Key Managerial positions and to determine theirremuneration.
To determine remuneration based on the Company's size and financial position andtrends and practices on remuneration prevailing in peer Companies in the manufacturingsector.
To carryout evaluation of the performance of Directors as well as KeyManagerial and Senior Management Personnel.
To compensate them to their effort performance dedication and achievementrelating to the Company's operations.
To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons.
To perform such other functions as may be necessary as appropriate for theperformance of the Directors.
Annual Performance Evaluation
The Nomination and Remuneration Committee has laid down the criteria and the manner foreffective evaluation of the performance of the Board its Committees and individualDirectors for the Financial Year 2017-18. Accordingly a peer evaluation excluding theDirector being evaluated was carried out by the Board on 07.02.2018. By a questionnairecirculated each Board member was requested to give his/her views in evaluation of theCompany performance strategy and the performance of the Board its Committees andindividual Directors. Some of the performance parameters on which the independentDirectors were evaluated include contribution commitment Initiative IntegrityIndependence Independent views and judgment fulfillment of functions QualificationsKnowledge Experience and Competency and Role in active participation in Board andCommittee Meetings.
The Independent Directors at their meeting held on 07.02.2018 reviewed the performanceof Non-Independent Directors the Board and the Chairperson of the Company.
The performance of the Key Managerial and Senior Management Personnel of the Companywas evaluated based on their qualifications experience and the duties andresponsibilities carried out by them.
Directors Responsibility Statement
Pursuant to the requirement under Section 134(3) (c) of the Companies Act 2013 theBoard of Directors of the Company state that:
i) in the preparation of the annual accounts for the year ended 31st March2018 the applicable Accounting Standards have been followed;
ii) the Directors have selected such accounting Policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2018 and ofthe profit of the Company for the year ended 31st March 2018;
iii) the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
iv) the Directors have prepared the annual account for the financial year ended 31stMarch 2018 on a going concern basis.
v) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Declaration by Independent Directors
The Company has received declaration from all the Independent Directors of the Companyin terms of Section 149(7) of the Companies Act 2013 confirming that they meet with thecriteria of independence as prescribed under sub Section (6) of Section 149 of theCompanies Act 2013 and Regulations 25 of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015.
There are no qualifications reservations or adverse remarks made by the StatutoryAuditors M/s.Subbachar & Srinivasan Chartered Accountants (Membership No.004083S)in the Auditors' Report.
The Board has appointed Mr.M.R.L.Narasimha Practising Company Secretary (MembershipNo.2851 CP 799) to conduct Secretarial Audit for the Financial Year 2017-18. TheSecretarial Audit Report for the Financial Year ended March 31 2018 is annexed to thisReport (Annexure 2) . The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
Particulars of Loans Guarantees or Investments
The Company has not given any loans or guarantees covered under the provisions ofSection 186 of the Companies Act 2013.
Related Party Transactions:
All Related Party Transactions entered into during the Financial Year were on arm'slength basis and were in the ordinary course of the business. There are no materiallysignificant Related Party Transactions made by the Company with Promoters Key ManagerialPersonnel or other designated persons which may have potential conflict with the interestof the Company at large. Hence Form AOC - 2 pursuant to Section 134(3) (h) of theCompanies Act 2013 read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is notapplicable.
The Policy on materiality of Related Party Transactions and dealing with Related PartyTransactions as approved by the Board may be accessed on the Company's website at the linkat www.lakshmiautomatic.com/investors/policies/related-party-transaction-policy/
The Directors were unable to recommend a dividend on the Equity shares for the year onaccount of carried over previous years losses. The 6% Cumulative RedeemablePreference Shareholders have given consent in writing for waiver of dividend.
The Company has laid down the Risk Assessment and Minimisation Procedures and onevaluation by the Audit Committee are reviewed by the Board from time to time.
Corporate Social Responsibility
Your Company is not coming under the purview of the Corporate Social Responsibilityunder Section 135 of the Companies Act 2013.
Directors and Key Managerial Personnel
Sri R.Santharam and Sri N.Jaychander Directors of the Company retire by rotation atthe ensuing Annual General Meeting and being eligible offer themselves for re-appointment.A brief profile of the Directors retiring by rotation and seeking re-election is annexedto the Notice of Annual General Meeting.
The Board of Directors of the Company at their meeting held on 25.9.2017 had appointedMr.J.Balasubramaniam as the Chief Executive Officer of the Company for a term of 2 years.There was no other changes in the Key Managerial Personnel during the year.
The details as required under Section 197(12) of the Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 arefurnished in Annexure 3 forming part of the Board's Report.
Internal Financial Controls
The Company has in place adequate internal financial controls with reference tofinancial statements. The Internal Audit - objectives scope functioning periodicity andmethodology is defined in the Internal Audit Programme. The quarterly internal AuditReport is placed before the Audit Committee of the Board. The internal Auditors monitorthe adequacy of internal control systems Accounting Procedures and Policies of theCompany and corrective actions based on the observations are taken wherever necessary.During the year such controls were reviewed and no reportable material weakness in thesystem or operation was observed by the Audit Committee.
M/s.Subbachar & Srinivasan Chartered Accountants have been appointed as theStatutory Auditors of the Company for a term of five financial years commencing from2017-18 and ending with 2021-22 and to hold office till the conclusion of the AnnualGeneral Meeting to be held in 2022.
Report on Corporate Governance and Management Discussion and Analysis
The report on Management Discussions and Analysis (Annexure 4) form part of the AnnualReport.
Pursuant to Regulation 15(2) (a) of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the compliance with the Corporate Governance provisions asspecified in Regulations 17 to 27 and Clauses (b) to (i) of sub-regulation (2) ofRegulation 46 and para C D and E of Schedule V shall not apply to the Company. Hence thereporting on Corporate Governance in a separate section is not furnished. The Certificatefrom the Auditors of the Company to this effect is furnished (Annexure 5) . However as agood Corporate Governance practice the company has implemented the Corporate Governanceprovisions and shall report the same in the Annual Report when it becomes applicable tothe Company.
The Company has adopted the Vigil Mechanism/Whistle Blower Policy for Directors andEmployees to report concerns about unethical behaviour actual or suspected fraud orviolation of the Company's Code of Conduct or ethics policy. No personnel is denied accessto the Audit Committee. No protected disclosures were received by the Nodal Officer duringthe year ended 31st March 2018.
A copy of the Vigil Mechanism / Whistle Blower Policy is posted on the Company'swebsite at www.lakshmiautomatic. com.
Demat Suspense Account / Unclaimed Suspense Account
The Share Certificates of the Company issued to the Shareholders on amalgamation of theerstwhile The Coimbatore Pioneer Machine Works Limited in exchange of the ShareCertificates held by them remained unclaimed were transferred to the Unclaimed SuspenseAccount. The details of the said Shares in Demat Suspense Account of the Company are :
Information with respect to conservation of energy technology absorption foreignexchange earnings and outgo pursuant to Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is appended hereto.
Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:
1. Details relating to Deposits covered under Chapter V of the Companies Act 2013
2. Issue of equity shares with differential rights as to dividend voting or otherwisein terms of Section 43 and 47 of the Companies Act 2013 and the Rules made there under.
3. Issue of shares (including Sweat Equity Shares) to employees of the Company underany scheme.
Your Directors further state that during the year under review:
1. There were no complaints pursuant to the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013.
2. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
3. There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the Financial Year under review andthe date of this report.
4. The Annual Listing Fees for the year 2018-19 has been paid by the Company to BSELimited.
5. No penalty or strictures have been imposed on the Company by the Capital MarketAuthorities for non-compliance of law during the last three years.