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Lakshmi Automatic Loom Works Ltd.

BSE: 505302 Sector: Industrials
NSE: N.A. ISIN Code: INE718M01022
BSE 14:21 | 27 Sep 851.70 -37.85
(-4.25%)
OPEN

882.00

HIGH

918.80

LOW

851.70

NSE 05:30 | 01 Jan Lakshmi Automatic Loom Works Ltd
OPEN 882.00
PREVIOUS CLOSE 889.55
VOLUME 112
52-Week high 1038.00
52-Week low 305.00
P/E 19.37
Mkt Cap.(Rs cr) 57
Buy Price 856.10
Buy Qty 1.00
Sell Price 875.40
Sell Qty 1.00
OPEN 882.00
CLOSE 889.55
VOLUME 112
52-Week high 1038.00
52-Week low 305.00
P/E 19.37
Mkt Cap.(Rs cr) 57
Buy Price 856.10
Buy Qty 1.00
Sell Price 875.40
Sell Qty 1.00

Lakshmi Automatic Loom Works Ltd. (LAKAUTOLOOMS) - Director Report

Company director report

To the Shareholders

Your Directors submit their Forty Sixth Annual Report together with the Audited BalanceSheet as at 31st March 2020 and the Statement of Profit and Loss for the year ended 31stMarch 2020.

Financial Summary / Highlights

Rs. in lakhs
2019-20 2018-19
Sales and Other Income 1328.46 895.01
Profit before Depreciation and Amortization Expenses 498.73 224.99
Depreciation and Amortization Expenses 62.25 46.96
436.48 178.03
Add: Comprehensive Income (-) 6.67 1.97
Less: Tax Expense 429.81 180.00
Current Tax (-)100.23 (-) 44.17
Deferred Tax (-) 1.53 (-) 8.03
Net Profit 328.05 127.80
Add: Balance from the Previous year (-) 440.71 (-) 568.51
Balance Carried Over (-) 112.66 (-) 440.71

Indian Accounting Standards

In the preparation of Financial Statements the Company has followed the IndianAccounting Standards (Ind AS) and the Financial Results have been prepared in accordancewith the recognition and measurement principles laid down in the said standards.

Operations

The operations during the year have resulted in a net profit of Rs.429.81 lakhs afterproviding for depreciation and amortization of expenses of Rs.62.25 lakhs. The net profitafter Tax for the year is Rs.328.05 lakhs.

The Company has two revenue segments ie. (a) Warehousing Rental Services - Unit 1 atHosur Industrial Complex Hosur - 635 126 and (b) Engineering Services - Unit 2 atPollachi Road Coimbatore - 642 109.

The Warehousing Rental Services segment consists of Warehousing Rental income on Landand Buildings at Hosur and the Engineering Services segment consists of Manufacture andSale of Accessories and Spares of Weaving and Knitting Machines and Parts and Accessoriesfor Machine Tools.

Warehousing Rental Services - Unit 1

The income generated from Warehousing Rental Services during the year was Rs.594.62lakhs against Rs.481.34 lakhs in the previous year.

Engineering Services - Unit 2

The sale of Accessories and Spares of Weaving Machines during the year was Rs.556.54lakhs against Rs.131.07 lakhs in the previous year. The sale of Parts and Accessories forMachine Tools during the year was lower at Rs.107.49 lakhs against Rs.185.62 lakhs in theprevious year.

Outlook

The additional warehouse constructed during the Financial Year has been let out to acorporate tenant for five years. Further addition of warehousing capacity proposed to betaken up depending on the demand post COVID-19 situation.

Steps are being taken for increase in supply of Spares and Accessories of Looms fromoverseas and domestic consumers. The COVID-19 impact may impair the Company's domestic andexport market causing an adverse effect on the revenue generation during the year 2020-21.

Share Capital

As approved by the Shareholders at their meeting held on 19-09-2018 the balance200000 - 6% Non Cumulative Optionally Convertible Preference Shares (OCPS) of Rs.100/-each have been converted into 291757 Equity Shares of Rs.10/- each fully paid up at apremium of Rs.58.55 per share on the option exercised by the Optionally ConvertiblePreference Shareholder on 10.05.2019. After the said conversion the issued and paid-upEquity Capital of the Company stands at Rs.66875020/- and the paid-up PreferenceCapital of the Company was reduced to Nil.

Deposits

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

Four Meetings of the Board of Directors were held on 23-05-2019 05-08-2019 08-11-2019and 13-02-2020 during the Financial Year from 1st April 2019 to 31st March 2020. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 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 2020 are as below:

Sl. No. Name of Directors Board Meetings attended Audit Committee Meetings Attended Nomination & Remuneration Committee Meeting attended Stakeholders Relationship Committee Meeting attended Last AGM Attended (Yes/ No)
1 Sri S.Pathy 4 - - - Yes
2 Sri R.Santharam 4 4 2 1 Yes
3 Sri R.C.H.Reddy 4 4 2 1 Yes
4 Smt.Aishwarya Pathy 3 - 2 - Yes
5 Sri R.Varadarajan 4 4 2 - Yes
6 Sri C.Kamatchisundaram 4 - - - Yes
7 Sri N.Jaychander 4 - - 1 Yes
8 Sri R.R.Balasundharam 4 4 - - Yes

Audit Committee

The Independent Audit Committee constituted as below consists of three IndependentDirectors and one NonExecutive Director as its members. Sri R.C.H.Reddy IndependentDirector is the Chairman of the Committee.

1. Sri R.C.H.Reddy Chairman Independent Director
2. Sri R.Santharam Member Non Executive Director
3. Sri R.Varadarajan Member Independent Director
4. Sri R.R.Balasundharam Member Independent Director

The Company Secretary is the Secretary of the Audit Committee.

Four Committee Meetings were held during the Financial Year ended 31st March 2020 on23-05-2019 05-08-2019 08-11-2019 and 13-02-2020.The Statutory Auditors InternalAuditors the Chief Executive Officer and the Chief Financial Officer attend the AuditCommittee Meetings on invitation. The Senior Managerial Personnel attend the Meetings asmay be required by the Committee.

Nomination and Remuneration Committee

The Committee has been set up as below with four Directors as members of which twomembers are Independent Directors. The Chairman of the Committee Sri R.C.H.Reddy is anIndependent Director.

1. Sri R.C.H.Reddy Chairman Independent Director
2. Sri R.Santharam Member Non Executive Director
3. Smt Aishwarya Pathy Member Non Executive Director
4. Sri R.Varadarajan Member Independent Director

The Company Secretary is the Secretary of the Committee.

The Committee has met two times during the Financial Year ended 31st March 2020 on05-08-2019 and 13-02-2020. 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 andrecommending to the Board of their remuneration in terms of Section 178(3) of theCompanies Act 2013. The Nomination and Remuneration Policy as approved by the Board isdisclosed on the Company's website at the link at :http://www.lakshmiautomatic.com/investors/ policies/nomination-and- remuneration-policy/in terms 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 2019-20. By a questionnaire circulated each Board memberwas requested to give his/her views in evaluation of the Company performance strategy andthe performance of the Board its Committees and individual Directors. Some of theperformance parameters on which the Independent Directors were evaluated include theircontribution commitment Initiative Integrity Independence Independent views andjudgment fulfillment of functions Qualifications Knowledge Experience and Competencyand Role in active participation in Board and Committee Meetings. A peer evaluationexcluding the Director evaluated was carried out by the Board on 13-02-2020.

The Independent Directors at their meeting held on 13-02-2020 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(5) of the Companies Act 2013 the Boardof Directors of the Company state that:

a) in the preparation of the Annual Accounts for the year ended 31st March 2020 theapplicable Accounting Standards had been followed along with proper explanation relatingto material departure if any;

b) the Directors had 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 2020 and of the profitof the Company for the year ended 31st March 2020;

c) the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) the Directors had prepared the Annual Accounts for the Financial Year ended 31stMarch 2020 on a going concern basis.

e) the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.

f) the Directors had devised proper systems to ensure compliance with the provisions ofall 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 and Regulation 25(8) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 confirming that theymeet with the criteria of independence as prescribed under sub-section (6) of Section 149of the Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

Auditors' Report

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 on the financial statements for the year ended 31-03-2020.

Secretarial Auditor

The Board has appointed Mr.M.R.L.Narasimha Practising Company Secretary (MembershipNo.2851 CP 799) to conduct Secretarial Audit for the Financial Year 2019-20. TheSecretarial Audit Report for the Financial Year ended March 31 2020 is annexed to thisReport as 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 in the ordinary course of the business. No materially significant RelatedParty Transactions were made by the Company with Promoters Key Managerial Personnel orother designated persons which may have potential conflict with the interest of theCompany at large. Hence Form AOC-2 pursuant to Section 134(3)(h) of the Companies Act2013 read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is not applicable.

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/

Dividend

The Directors were unable to recommend a Dividend on the Equity shares for the year onaccount of carried over previous years' losses.

Risk Management

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 the ensuing Annual General Meeting.

Casual vacancy was caused by the sudden demise of MrJ.Balasubramaniam Chief ExecutiveOfficer of the Company on 19-05-2020 and there was no other change in the Key ManagerialPersonnel (KMP) 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.

Auditors

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 at the 43rd Annual General Meeting held on 28th July 2017 and pursuant to theamendment of Section 139 of the Companies Act 2013 and the approval of the Members theCompany is not required to seek the ratification of the appointment of the Auditors atevery Annual General Meeting. The Company has received a Certificate from the StatutoryAuditors to the effect that their continued appointment as the Statutory Auditors of theCompany would be within the limits prescribed under Section 139 of the Companies Act2013.

Report on Corporate Governance and Management Discussion and Analysis

The report on Management Discussions and Analysis (Annexure 4) forms 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 1717A1819202122 232424A252627 and Clauses (b) to (i)of sub-regulation (2) of Regulation 46 and para C D and E of Schedule V shall not applyto the Company. Hence the reporting on Corporate Governance in a separate section is notfurnished. The Certificate from the Auditors of the Company to this effect is furnished asAnnexure 5 to the Annual Report. However as a good Corporate Governance practice theCompany is implementing the Corporate Governance Provisions and shall report the same inthe Annual Report when it becomes applicable to the Company.

Vigil Mechanism

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 2020.

A copy of the Vigil Mechanism/Whistle Blower Policy is posted on the Company's websiteat www.lakshmiautomatic.com.

Disclosure under the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal)

The Company has complied with the provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013. No complaints reported during the year under review.

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:

Sl. No. Particulars No. of Shareholders No. of Shares
(a) Aggregate Number of Shareholders and the outstanding shares held in demat Suspense Account lying at the beginning of the year. 1106 3185
(b) Number of Shareholders who approached the Company for transfer of shares from Suspense Account during the year 2 26
(c) Number of Shareholders to whom share were transferred from Suspense Account during the year 2 26
(d) Aggregate Number of Shareholders and the outstanding Shares in the Suspense Account lying at the end of the year 1104 3159
(e) The Voting Rights on these Shares shall remain frozen till the rightful owner of such shares claims the Shares. 1104 3159

General

Information with respect to conservation of Energy Technology Absorption ForeignExchange Earnings and Outgo

Pursuant to Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (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. 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.

2. 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.

3. In view of the nationwide lock down due to COVID-19 in the last quarter of the yearthe Company's operations were shut down which marginally impacted the performance for thequarter. The Company has considered internal and external sources of information economicforecasts and industry reports upto the date of approval of financial statements indetermining the impact of COVID-19 pandemic on various elements of its business operationsand financial statements. The Company has used the principles of prudence in applyingjudgements estimates and assumptions and based on the current estimates the Companyexpects to recover the carrying amount of its current and non-current assets and does notanticipate any impairment to these assets. The Company has since resumed its operations ina phased manner from 06-05-2020 conforming with the Guidelines of the Government. TheCompany will continue to closely monitor any material changes to future economicconditions.

4. The Annual Listing Fees for the year 2020-21 has been paid by the Company to BSELimited.

5. No penalty or strictures have been imposed on the Company by the Capital MarketAuthorities for noncompliance of law during the last three years.

By Order of the Board
(Sd.) S. PATHY
Place : Coimbatore Chairman
Date : 10-08-2020 DIN No.00013899

Conservation of Energy Technology Absorption and Foreign Exchange Earnings and Outgo.

[Section 134(3)(m) of The Companies Act2013 read with Rule 8(3) of the Companies(Accounts) Rules 2014]

A. Conservation of Energy:

a) The Manufacture of Spares and Accessories for Textile Machinery and Parts forMachine Tools is not energy intensive. Efforts are continuously made to reduce the wasteof energy to the minimum.

b) The Company currently manufactures Spares and Accessories for ‘C' type ShuttleWeaving and Circular Knitting Machines and Parts for Machine Tools and the consumption ofenergy is minimal. There was no significant capital investment on energy conservationequipments during the year.

B. Technology Absorption:

(i) Efforts made towards technology absorption.

The Company has fully absorbed the technology in manufacturing Spares and Accessoriesfor ‘C' type Shuttle Weaving and Circular Knitting Machines.

(ii) Benefits derived like product improvement cost reduction product development orimport substitution:

The quality Spares and Accessories for ‘C' type Shuttle Weaving and CircularKnitting Machines and Parts for Machine Tools supplied by the Company at market price arewell received by the users.

(iii) The Company has not imported any new technology during the last three FinancialYears.

(iv) The expenditure incurred on R&D during the year was not material.

C. Foreign Exchange Earnings and Outgo:

Total Foreign Exchange earned by the Company during the year : Rs.528.05 Lakhs
Total Foreign Exchange outgo during the year : Rs.12.98 Lakhs

 

By Order of the Board
(Sd.) S. PATHY
Place : Coimbatore Chairman
Date : 10-08-2020 DIN No.00013899

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