Lakshmi Electrical Control Systems Limited
Registered Office:504 Avinashi Road Peelamedu Post Coimbatore 641004 TamilNadu.
Tel: +91 422 6616500
Email: email@example.com Website: www.lecsindia.com
Board of Directors Report to Shareholders
The Board of Directors of your Company are pleased to present the Fortieth AnnualReport on the business and operations of the Company along with the summary of financialstatements for the year ended 31st March 2021.
1. The State of Affairs of the Company Financial summary/highlights
|Particulars ||Financial Year 2020-2021 ||Financial Year 2019-2020 |
| ||(Rs. in Lakhs) ||(Rs. in Lakhs) |
|Revenue from operations ||13224.58 ||11322.30 |
|Other Income ||349.15 ||331.84 |
|Profit before Interest Depreciation & amortisation expense and exceptional items ||746.54 ||317.81 |
|Less: Interest ||8.78 ||2.93 |
|Profit before Depreciation & amortisation expenses and exceptional items ||737.76 ||314.88 |
|Less: Depreciation & amortisation expense ||219.90 ||223.12 |
|Profit before Exceptional items and Tax ||517.86 ||91.76 |
|Less: Exceptional item ||256.67 ||- |
|Less: Provision for Taxes ||(44.69) ||48.88 |
|Profit after Tax ||305.88 ||42.88 |
Business and Operations
During the year under review the Companys revenue from operations (net of GST)has increased by Rs. 1902.28 lakhs over the previous financial year.
The profit before interest depreciation and exceptional items is Rs. 746.54 Lakhs asagainst Rs. 317.81 Lakhs for the previous financial year. The profit after tax is Rs.305.88 Lakhs as against Rs. 42.88 Lakhs for the previous financial year.
The main revenue segment of the Company Electricals achieved turnover of Rs. 10970.28Lakhs and achieved mild positive growth. The Plastics segment recorded a turnover of Rs.2231.86 Lakhs posted a mild positive growth compared to the financial year 2019-2020. Inboth the segments the Company continues to put its efforts in increasing the productivitylevels and adding new customers. There was a slight decrease in generation of electricityby Wind Electric Generators due to reduction in wind velocity.
The Board recommends 35% dividend of Rs. 3.50/- per equity share of the face value ofRs.10/- (Rupees Ten only) each on the equity share capital of Rs. 24580000/- for thefinancial year ended on 31st March 2021. The dividend on equity shares is subject to theapproval of the shareholders at the ensuing Annual General Meeting. Dividend will be paidto those equity shareholders whose names appear in the Register of Members as on30.07.2021 in respect of shares held in physical form and in respect of shares held indematerialized form the dividend shall be paid on the basis of the beneficial ownershipas per the details furnished by the Depositories for this purpose at the end of businesshours on 30.07.2021.
The paid-up capital of the Company as at March 31 2021 stood at Rs. 245.80 Lakhs.During the financial year under review your company had not made any fresh issue ofshares.
Relationship with employees was cordial throughout the financial year.
2. Annual Return
As per requirements of the Companies Act 2013 (the Act) a copy of theannual return is available in the website of the Company www.lecsindia.com
3. Number of Meetings of the Board
Details of number of meetings of the Board of Directors and Committees thereof and theattendance of the Directors in such meetings are provided under the Corporate GovernanceReport.
4. Directors Responsibility Statement
In terms of Section 134 of the Companies Act 2013 the Directors confirm that: a. inthe preparation of the annual accounts the applicable accounting standards have beenfollowed and there are no material departures from the same; b. have selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state ofaffairs of the company at the end of the financial year and of the profit and lossof the company for that period; c. have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theAct for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities; d. have prepared the annual accounts on a going concernbasis; e. have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and were operating effectively;and f. have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
5. No Frauds reported by statutory auditors
There is no instance of frauds reported by the statutory auditors of the Company forthe financial year under review under sub Section (12) of Section 143 of the CompaniesAct 2013.
6. Declaration by Independent Directors
The Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 [SEBI (LODR) / Listing Regulations] so as to qualifythemselves as Independent Directors under the provisions of the Companies Act 2013 andthe relevant rules of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 [SEBI (LODR) / Listing Regulations]. Further they have alsodeclared that they are not aware of any circumstance or situation which exists or may bereasonably anticipated that could impair or impact their ability to discharge theirduties with an objective independent judgment and without any external influence. TheIndependent Directors of the Company have complied with the requirements of the provisionsin relation to Independent Directors Databank as stated in the Companies (Creation andMaintenance of databank of Independent Directors) Rules 2019 and the Companies(Appointment and Qualification of Directors) Rules 2014 as amended from time to time
7. Nomination and Remuneration Committee and Policy
As per the provisions of the Companies Act 2013 and SEBI LODR a Nomination andRemuneration Committee of directors was formed by the Board of Directors consisting of:
1. Sri. N.Suryakumar Chairman (Non-Executive Independent)
2. Sri. Ramesh Rudrappan Member (Non-Executive Independent)
3. Sri. Arun Selvaraj Member (Non-Executive Independent)
The said committee has been empowered and authorised to exercise widest powers asentrusted under the provisions of Section 178 of the Companies Act 2013 and SEBI LODR.The Company has a policy on directors appointment and remuneration includingcriteria for determining qualification positive attributes independence of a directorand other matters provided under sub-section (3) of section 178. The policy is availableon the Companys website www.lecsindia.com.
The salient aspects covered in the Nomination and Remuneration Policy:
The Company believes that the human resources are one of the most important valuableassets of the company. As per the requirement of the provisions of the Companies Act 2013and SEBI LODR to meet and attract the valuable asset and harmonize the payment toDirectors Key Managerial Personnel and other employees of the Company in line with themission visions and values of the Company. This policy has been formulated by theNomination and Remuneration Committee for the Directors Key Managerial Personnel andSenior Management personnel and approved by the Board of Directors. The objective andpurpose of this policy are:
To lay down criteria and terms and conditions with regard to identifying persons whoare qualified to become Directors and persons who may be appointed in Senior Managementand Key Managerial positions.
To lay down guiding principle for remuneration payable to Executive Directors NonExecutive Directors Senior Management Personnel and Key Managerial Personnel.
To determine the evaluation of performance of the Members of the Board includingIndependent Directors.
To recommend remuneration based on the Companys size financial position trendsand practices on remuneration prevailing in peer companies.
To provide them reward linking to their effort performance dedication and achievementin the Companys operations/ performance.
To design suitable remuneration package to attract retain motivate and promote bestcaliber directors and employees create strong performance orientated environment andreward achievement of meaningful targets over the short and long-term and createcompetitive advantage.
To Determine the criteria for qualifications positive attributes and independence ofDirectors.
To determine whether to extend or continue the term of appointment of IndependentDirectors.
Devising criteria for board diversity.
Develop succession plan for the Board Senior Management and Key Managerial Personnel.
8. Auditors Comments
There are no adverse comments in the reports of Statutory Auditors (appearing elsewherein the Annual Report) and that of the Secretarial Auditors (annexed hereto as Annexure 1).
9. Particulars of Loans/Guarantee/Investments
The Company has not given / made any Loans Guarantees and Investments covered underthe provisions of Section 186 of the Companies Act 2013 during the year under review.Details of investments made in the earlier years have been disclosed in the notes to thefinancial statements.
10. Particulars of Contracts with Related Party
The transactions entered by the Company with the related parties during the financialyear 2020-21 are in the ordinary course of business and at arms length basis. Theparticulars of material related party transactions is provided in the form AOC 2 andannexed to the Boards Report as Annexure - 2. The Policy on Related Party isavailable on the Companys website at www.lecsindia.com
11. Material Changes and Commitments between the end of financial year (March 31 2021)to which this financial statements relate and the date of this Directors Report.
The state Government (the Government of Tamilnadu) has imposed some restrictions from10th May 2021 to 24th May 2021 in view of the sudden spurt of second wave of COVID 19. Therestrictions on movement of people and spread of COVID among local communities hasaffected the availability of manpower. The Company is closely monitoring the situation andtrying to maintain the operations. The Company has suspended the operations effective 24thMay 2021 due to further restrictions announced by the Government of Tamilnadu untilfurther notice.
12. Conservation of Energy Technology Absorption & Foreign Exchange
The disclosures under Rule 8(3) of the Companies (Accounts) Rules 2014 are as under:
Conservation of Energy
|Particulars ||Disclosures |
|(i) Steps taken or impact on conservation of energy ||I. Eliminated unwanted power consumption using electro mechanical design changes and reduced idle power consumption using timer systems in the machines wherever possible. |
| ||II. IOT based incoming power supply and energy monitoring system implemented. |
| ||III. In the lighting system Auto OFF and ON system / lighting censor system installed to conserve the energy wherever possible. |
|(ii) Steps taken by the company for utilising alternate sources of energy ||Wind energy generation power is utilized for Plant captive consumption from August 2016 onwards. |
|(iii) Capital investment on energy conservation equipments; ||- |
|Particulars ||Disclosures |
|(i) Efforts made towards technology absorption; ||No technology or knowhow is brought from external bodies or imported. |
|(ii) The benefits derived like product improvement cost reduction product development or import substitution; ||In-house developmental and operational research activities are carried out on regular basis. |
|(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): ||No technology was imported during the last three years. |
|(a) the details of technology imported; || |
|(b) the year of import; || |
|(c) whether the technology has been fully absorbed; || |
|(d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; || |
|(iv) The expenditure incurred on Research and Development ||Capital Expenditure: Nil |
| ||Revenue Expenditure: Rs. 35.92 Lakhs |
| ||Total Expenditure: Rs. 35.92 Lakhs |
Foreign Exchange Outgo And Earnings:
(Rs. in Lakhs)
|Foreign Exchange earned through exports ||10.06 |
|Foreign Exchange used ||553.40 |
13. Risk Management
The Company follows a comprehensive and integrated risk appraisal mitigation andmanagement process. The risk management process of the Company is being periodicallyreviewed for improvement by the Board of Directors.
14. Corporate Social Responsibility (CSR)
The Company has constituted a CSR committee of the Board of Directors and has adopted aCSR Policy. The same is posted in the Companys website www.lecsindia.com. TheCommittee consist of three directors viz. Sri.D.Senthilkumar Smt.Nethra J.S.Kumarand Sri.Arun Selvaraj. The meeting of CSR Committee was held on 10th August 2020. A reportin prescribed format detailing the CSR spend for the financial year 2020-21 is attachedherewith as Annexure-3 forming a part of this report.
15. Evaluation of Boards Performance
On the advice of the Board of Directors the Nomination and Remuneration Committee haveformulated the criteria for the evaluation of the performance of Board of IndividualDirectors Board as a whole Committees of Directors Independent DirectorsNon-Independent Directors and the Chairperson of the Board. Based on that performanceevaluation has been undertaken for the financial year 2020-21. The Independent Directorsof the Company have also convened a separate meeting for this purpose. All the results andevaluation has been communicated to the Chairperson of the Board of Directors.
16. Additional Disclosures
As per Rule 8(5) of the Companies (Accounts) Rule 2014 the following additionalinformation is provided:
|Particulars ||Disclosures |
|(i) The financial summary or highlights. ||The financial highlights including State of Affairs of the Company is provided in this Annual Report. |
|(ii) The change in the nature of business if any. ||There is no change in the business line of the company. |
|(iii) The details of directors or key managerial personnel who were appointed or have resigned during the year. ||Nil |
|(iv) Statement regarding opinion of the Board with regard to integrity expertise and experience (including the proficiency) of the independent directors appointed during the year ||Nil |
|(v) The names of companies which have become or ceased to be its subsidiaries joint ventures or associate companies during the year. ||Nil |
|(vi) The details relating to deposits covered under Chapter V of the Act. ||The Company has not accepted deposits. |
|(vii) The details of deposits which are not in compliance with the requirements of Chapter V of the Act. ||Nil |
|(viii) The details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future. ||Nil |
|(ix) The details in respect of adequacy of internal financial controls with reference to the Financial Statements. ||The Company has implemented and evaluated the Internal Financial Controls which provide a reasonable assurance. |
| ||The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Companies Act 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors report. |
|(x) Cost Records ||The Company is maintaining the cost records as required under Section 148 of the Companies Act 2013 read with Companies (Cost Records and Audit) Rules 2014. |
|(xi) Internal Complaints Committee ||As per the provisions of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 the Company has constituted an Internal Complaints Committee. During the financial year 2020-21 no complaint was received before the committee. |
|(xii) Insolvency and Bankruptcy Code 2016 ||No application is made or any proceeding is pending under the Insolvency and Bankruptcy Code 2016 during the year under review. |
|(xiii) Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof. ||Not Applicable - there was no instance of one time settlement with any Bank or Financial Institution. |
17. 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 accounting transactions andoperations are audited by the Internal Auditor vis.a.vis the internal controls policiesand procedures and the deviations if any are reported and corrective actions are takenappropriately.
18. Board of Directors
Re-appointment of Managing Director:
Smt. Nethra J.S. Kumar (DIN: 00217906) was re-appointed as the Managing Director of theCompany for a period commencing from 1st July 2017 until 31st March 2022 on the terms andconditions as approved by the shareholders at the 35th Annual General Meeting held on 8thAugust 2016.
The current tenure of the office of Smt. Nethra J.S. Kumar is valid up to 31st March2022. As per the provisions of the Companies Act 2013 the Board of Directors of theCompany at the meeting held on 28th May 2021 had re-appointed Smt. Nethra J.S. Kumar asManaging Director of the Company for a further period of 3 years with effect from 01stApril 2022 to 31st March 2025 subject to approval of shareholders in the ensuing AnnualGeneral Meeting. The terms of appointment are detailed in the AGM Notice.
Re-appointment of retiring Director:
Sri. N.R.Selvaraj Director who retires by rotation at the ensuing Annual GeneralMeeting being eligible offers himself for re-appointment. The Board recommends hisre-appointment in the forthcoming Annual General Meeting.
Appointment of new Independent Director:
On the recommendation of the Nomination and Remuneration Committee the Board ofDirectors appointed Sri. Arjun Balu as an Additional Director on the Board of theCompany with effect from 28th May 2021 with an intention to appoint him as an IndependentDirector. In the opinion of the Board Sri. Arjun Balu fulfills the conditions asspecified under the Act read with the Rules made thereunder and the Listing Regulationsfor his appointment as an Independent Non-Executive Director of the Company subject toapproval of the shareholders in the ensuing Annual General Meeting. The company has alsoreceived declaration from the appointee director that he fulfils the criteria ofindependence as prescribed under Section 149(6) of the Act as well as Regulation 16(1)(b)of the Listing Regulations. The Board recommends his appointment in the forthcoming AnnualGeneral Meeting.
There was no incidence of resignation of any Director.
19. Composition of Audit Committee
The Audit Committee was formed by the Board of Directors and consists of:
|1 Sri. N.Suryakumar Chairman ||(Non-Executive Independent) |
|2 Sri. A.Palaniappan Member ||(Non-Executive Independent) |
|3 Sri. Ramesh Rudrappan - Member ||(Non-Executive Independent) |
The Board has accepted the recommendations of the committee during the financial yearunder review.
20. Vigil Mechanism
The Company has devised a vigil mechanism in the form of a Whistle Blower Policy inpursuance of provisions of Section 177(10) of the Companies Act 2013 and details whereofis available on the Companys website www.lecsindia.com . During the year underreview there were no complaints received under this mechanism.
21. Overall Maximum Remuneration
Particulars pursuant to Section 197(12) & rule 5(1) of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014 : a) The ratio of the remunerationof each director to the median employees remuneration for the financial year andsuch other details as prescribed is as given below:
|Name ||Category ||Ratio |
|Smt. Nethra J.S.Kumar (DIN:00217906) ||Executive Chairperson and Managing Director * (CMD) ||1:13.02 |
|Sri. N.Suryakumar (DIN:00008316) ||Non-Executive - Independent ||- |
|Sri. Sanjay Jayavarthanavelu (DIN: 00004505) ||Non-Executive Non Independent ||- |
|Sri. D.Senthilkumar (DIN: 00006172) ||Non-Executive Non Independent ||- |
|Sri. Ramesh Rudrappan (DIN: 00008325) ||Non-Executive - Independent ||- |
|Sri. A.Palaniappan (DIN:00044022) ||Non-Executive - Independent ||- |
|Sri. Arun Selvaraj (DIN: 01829277) ||Non-Executive Independent ||- |
|Sri N.R. Selvaraj (DIN: 00013954) ||Non-Executive Non Independent ||- |
Note: For this purpose Sitting fees paid to the Directors have not been considered asremuneration.
*CMD has not drawn salary and commission for the financial year 2019-20. CMD has drawnsalary of Rs. 57.13 lakhs for the financial year 2020-21.
b) The percentage increase in remuneration of each Director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year:
|Name ||Category ||% |
|Smt. Nethra J.S.Kumar** ||Executive Chairperson and Managing Director ||100 |
|Sri. N.Suryakumar ||Non-Executive Independent Director ||- |
|Sri. Sanjay Jayavarthanavelu ||Non-Executive Non Independent Director ||- |
|Sri. D.Senthilkumar ||Non-Executive Non Independent Director ||- |
|Sri. Ramesh Rudrappan ||Non-Executive Independent Director ||- |
|Sri. A.Palaniappan ||Non-Executive Independent Director ||- |
|Sri. Arun Selvaraj ||Non-Executive Independent Director ||- |
|Sri N.R. Selvaraj ||Non-Executive Non Independent Director ||- |
|Sri. A.Thiagarajan* ||Chief Financial Officer (CFO) ||(1.02) |
|Sri. S.Sathyanarayanan* ||Company Secretary (CS) ||(3.24) |
Note: For the above purpose sitting fees paid to the Directors have not beenconsidered as remuneration. *The percentage decrease is inclusive of Provident Fund andprovision for Gratuity.
**CMD has not drawn salary and commission for the financial year 2019-20. CMD has drawnsalary of Rs. 57.13 lakhs for the financial year 2020-21. c) The percentage increase /(decrease) in the median remuneration of employees in the financial year: (7.28)% d) Thenumber of permanent employees on the rolls of company: 172 e) Average percentile increasealready made in the salaries of employees other than the managerial personnel in the lastfinancial year and its comparison with the percentile increase in the managerialremuneration and justification thereof and point out if there are any exceptionalcircumstances for increase in the Managerial Remuneration: Average increase / (decrease)in remuneration is (8.93%) for employees other than Managerial Personnel and KMP while itis 128.57% for Managerial Personnel (KMP and Senior Management).
CMD has not drawn salary and commission for the financial year 2019-20. CMD has drawnsalary of Rs. 57.13 lakhs for the financial year 2020-21. f) It is affirmed that theremuneration is as per the remuneration policy of the Company. g) Particulars of Employeesas per Rule 5(2) and Rule 5(3) of the Companies (Appointment & Remuneration ofManagerial Personnel Rules 2014) are provided as Annexure-4 to this Report.
22. Accounting Treatment
In the preparation of financial statements no treatment different from that ofprescribed accounting standards has been followed.
23. Secretarial Standards
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and such systems are adequate and operatingeffectively. The Company has adhered with the applicable Secretarial Standards issued byThe Institute of Company Secretaries of India.
24. Corporate Governance
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 aseparate section on Corporate Governance practices followed by the Company together witha certificate from the Companys Auditors confirming compliance forms an integralpart of this Report. The shares of the Company are listed in BSE Limited Mumbai. Thelisting fees is paid up to date and the shares of the Company were not suspended fortrading by the Stock Exchange at any time during the financial year under review.
25. Investor Education and Protection Fund
The Company has transferred the equity shares and dividend in respect of whichdividend has not been claimed by the members for seven consecutive years or more to theInvestor Education and Protection Fund Authority (IEPF) during the financial year2020-2021. Details of shares transferred have been uploaded on the website of the Company.
Pursuant to the provisions of Section 139 of the Companies Act 2013 and the Companies(Audit and Auditors) Rules 2014 M/s. Subbachar & Srinivasan Chartered Accountantsthe Statutory Auditors of the Company hold office up to the conclusion of the AnnualGeneral Meeting to be held in the year 2026. The Company has received a certificate fromthe said Auditors that they are eligible to continue and hold office as the Auditors ofthe Company.
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 M/s. MDS & Associates Coimbatore Company Secretaries in Practice toundertake the Secretarial Audit of the Company for the financial year 2021-2022.
The Board of Directors on the recommendation of the Audit Committee has appointedSri.S.Subbaraman Cost Accountant in Practice as Cost Auditors to undertake Cost Audit forthe financial year 2021-22. Pursuant to Section 148 of the Companies Act 2013 read withRule 14 of the Companies (Accounts) Rules 2014 the remuneration payable for thefinancial year 2021-22 to the Cost Auditors of the Company is subject to ratification bythe shareholders at the ensuing Annual General Meeting. The Board recommends theirremuneration for members ratification.
Your Directors thank the customers bankers vendors shareholders and otherstakeholders for their continued support and patronage.
The Directors wish to place on record their appreciation for the cooperation andcontribution made by the employees at all levels towards the performance of the Company.
|Place : Coimbatore ||For and on behalf of the board |
|Date : May 28 2021 ||Nethra J. S. Kumar |
| ||Chairperson and Managing Director |
| ||DIN : 00217906 |