TO THE SHAREHOLDERS
Your Directors submit their Forty Fifth Annual Report together with the Audited BalanceSheet as at 31st March 2019 and the Statement of Profit and Loss for the year ended 31stMarch 2019.
Financial Summary / Highlights ` in lakhs
| ||2018-19 ||2017-18 |
|Sales and other income ||895.01 ||831.38 |
|Profit before Depreciation and Amortization Expenses ||224.99 ||272.08 |
|Depreciation and Amortization Expenses ||46.99 ||35.99 |
| ||178.03 ||236.09 |
|Add : Comprehensive Income ||1.97 ||1.18 |
| ||180.00 ||237.27 |
|Less : Tax Expense || || |
|Current Tax ||(-) 44.17 ||(-) 61.96 |
|Deferred Tax ||(-) 8.03 ||(-) 1.24 |
|Net Profit / Loss (-) ||127.80 ||174.07 |
|Add: Balance from the Previous year ||(-) 568.51 ||(-) 742.58 |
|Balance Carried Over ||(-) 440.71 ||(-) 568.51 |
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.
The operations during the year have resulted in a net profit of ` 180.00 lakhs afterproviding for depreciation and amortization of expenses of ` 46.99 lakhs. The net profitafter Tax for the year is ` 127.80 lakhs.
The Company has two revenue segments ie. a) Warehousing Rental Services - Unit 1 atHosur Industrial Complex Hosur - 635 126 and b) Other Engineering Services - Unit 2 atPollachi 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.
Warehousing Rental Services - Unit 1
The income generated from Warehousing Rental Services during the year was ` 481.34lakhs against ` 458.75 lakhs in the previous year.
Other Engineering Services - Unit 2
The sale of Accessories and Spares of Weaving Machines during the year was ` 131.07lakhs against ` 69.06 lakhs in the previous year. The sale of Parts and Accessories forMachine Tools during the year was ` 185.62 lakhs against ` 194.69 lakhs in the previousyear.
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 near Bangalore theCompany is constructing additional Buildings in the existing land to augment its revenue.
The 400000 - 6% Cumulative Redeemable Preference Shares of ` 100/- each werereclassified into (a) 200000 - 6% Non Cumulative Compulsorily Convertible PreferenceShares of ` 100/- each and (b) 200000-6% Non Cumulative Optionally ConvertiblePreference Shares of Rs.100/- each fully paidup.
As approved by the shareholders at their meeting held on 19.09.2018 :
a) The 200000 - 6% Non Cumulative Compulsorily Convertible Preference Shares (CCPS)of ` 100/- each have been converted into 291757 Equity Shares of ` 10/- each fully paidup at a premium of ` 58.55 per share on preferential basis to Promoter and Promotersgroup on 16.10.2018.
b) The 200000 - 6% Non Cumulative Optionally Convertible Preference Shares (OCPS) of` 100/- each have been converted into 291757 Equity Shares of ` 10/- each fully paid upat a premium of ` 58.55 per share on the option exercised by the Optionally ConvertiblePreference Shareholder on 10.05.2019 on preferential basis to the Promoter and Promotergroup. After the said conversions the issued and paid-up Equity Capital of the Companystands at ` 66875020/- and the paid-up Preference Capital of ` 40000000/- of theCompany was reduced to Nil.
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 Committee Meetings conducted during the year under review.
Four Meetings of the Board of Directors were held on 24.05.2018 07.08.2018 13.11.2018and 11.02.2019 during the Financial Year from 1st April 2018 to 31st March 2019. 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 2019 are as below:
|Name of Directors ||Board Meetings attended ||Audit Committee Meetings attended ||Nomination & Remuneration Committee Meetings attended ||Stakeholders Relationship Committee Meetings attended ||Last AGM Attended (Yes/ No) |
|1 Sri S.Pathy ||4 ||- ||- ||- ||Yes |
|2 Sri R.Santharam ||2 ||2 ||1 ||1 ||Yes |
|3 Sri R.C.H.Reddy ||4 ||4 ||2 ||1 ||Yes |
|4 Smt.Aishwarya Pathy ||2 ||- ||2 ||- ||No |
|5 Sri R.Varadarajan ||3 ||3 ||2 ||- ||Yes |
|6 Sri C.Kamatchisundaram ||4 ||- ||- ||- ||Yes |
|7 Sri N.Jaychander ||4 ||- ||- ||1 ||Yes |
|8 Sri R.R.Balasundharam ||4 ||4 ||- ||- ||Yes |
The Independent Audit Committee constituted as below consists of three IndependentDirectors and one Non-Executive 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 2019 on24.05.2018 07.08.2018 13.11.2018 and 11.02.2019. 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 2019 on07.08.2018 and 11.02.2019.
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 2018-19. Accordingly a peer evaluation excluding theDirector evaluated was carried out by the Board on 11.02.2019. 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 11.02.2019 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 forthe year ended 31st March 2019 the applicable Accounting Standards had been followedalong with proper explanation relating to 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 2019 and of the profitof the Company for the year ended 31st March 2019;
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 2019 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 Obligation 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 Obligation andDisclosure Requirements) 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 2018-19. TheSecretarial Audit Report for the Financial Year ended March 31 2019 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 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 the CompaniesAct 2013 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/
The Directors were unable to recommend a dividend on the Equity Shares for the year onaccount of carried over previous years' losses. The Preference Shareholder has givenconsent in writing for waiver of the Dividend and the shares have since been convertedinto Equity Shares as approved by the shareholders.
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 S.Pathy and Smt Aishwarya Pathy Directors of the Company retire by rotation at theensuing Annual General Meeting and being eligible offer themselves for re-appointment. Abrief profile of the Directors retiring by rotation and seeking re-election is annexed tothe Notice of the ensuing Annual General Meeting.
The tenure of Sri R.C.H.Reddy Sri R.Varadarajan and Sri C.Kamatchisundaram IndependentDirectors of the Company expires on 17th September 2019 and the tenure of SriR.R.Balasundharam on 22nd September 2019. The Nomination and Remuneration Committee andthe Board of Directors having regard to the credentials and vast experience of theIndependent Directors have recommended the re-appointment of Sri R.C.H.Reddy SriR.Varadarajan Sri C.Kamatchisundaram and Sri R.R.Balasundharam as Non-ExecutiveIndependent Directors of the Company for a second term of 5 (five) consecutive years tothe members for their approval at the ensuing Annual General Meeting.There are no otherchanges in the Key Managerial Personnel (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.
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. Pursuant to theamendment of Section 139 of the Companies Act 2013 the Company is no longer required toseek the ratification of the appointment of the Auditors at every Annual General Meeting.Accordingly it has been proposed to obtain the approval of the members to continue theappointment of the Statutory Auditors without ratification of their appointment at everyAnnual General Meeting.
The Company has received a Certificate from the Statutory Auditors to the effect thattheir continued appointment as the Statutory Auditors of the Company would be within thelimits prescribed under Section 139 of the Companies Act 2013. Members are requested togrant their approval for the continuation of the appointment of the Auditors for a periodup to the conclusion of the Annual General Meeting to be held in 2022 without ratificationat every Annual General Meeting.
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 asspecifed in Regulations 17 17A 18 19 20 21 22 23 24 24A 25 26 27 and Clauses(b) to (i) of sub-regulation (2) of Regulation 46 and para C D and E of Schedule V shallnot apply to the Company. Hence the reporting on Corporate Governance in a separatesection is not furnished. The Certificate from the Auditors of the Company to this effectis furnished as Annexure 5 to the Annual Report. However as a good Corporate Governancepractice the company has implemented the Corporate Governance provisions and shall reportthe same in the Annual Report when it becomes applicable to the 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 2019.
A copy of the Vigil Mechanism / Whistle Blower Policy is posted on the Company'swebsite at 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 :
|S.No Particulars ||No of Share holders ||No. of Shares |
|(a) Aggregate Number of Shareholders and the outstanding shares held in Demat suspense account lying at the beginning of years. ||1107 ||3191 |
|(b) Number of Shareholders who approached the Company for transfer of shares from suspense account during the year. ||1 ||6 |
|(c) Number of Shareholders to whom share were transferred from Suspense account during the year ||1 ||6 |
|(d) Aggregate Number of Shareholders and the outstanding Shares in the suspense account lying at the end of the year ||1106 ||3185 |
|(e) The Voting Rights on these shares shall remain frozen till the rightful owner of such shares claims the Shares. ||1106 ||3185 |
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. 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. The Annual Listing Fees for the year 2019-20 has been paid by the Company to BSELimited.
4. No penalty or strictures have been imposed on the Company by the Capital MarketAuthorities for non-compliance of law during the last three years.
| ||By Order of the Board |
| ||(Sd.) S. PATHY |
|Place : Coimbatore ||Chairman |
|Date : 05.08.2019 ||DIN No.00013899 |