Your Directors take great pleasure in presenting this 94th Annual Report on thebusiness and operations of your Company together with the Audited Financial Statementsfor the financial year ended 31st March 2018.
1. FINANCIAL HIGHLIGHTS
(Rs in lakhs)
|Particulars ||2017-18 ||2016-17 |
|Gross Income ||664.83 ||449.14 |
|Profit before Depreciation and Tax ||478.91 ||324.59 |
|Depreciation ||4.99 ||5.92 |
|Profit for the year before taxation ||473.92 ||318.67 |
|Provision for Taxation ||11.50 ||7.00 |
|Profit after tax ||462.42 ||311.67 |
|Prior year taxes ||0.67 ||(2.93) |
|Net Profit after Tax ||461.75 ||314.60 |
|Profit Brought Forward ||954.58 ||804.98 |
|Total Profit available for appropriation ||1416.33 ||1119.58 |
|Dividend pertaining to previous year paid during the year ||105.00 ||- |
|Corporate Dividend Tax ||21.37 ||- |
|Transfer to Reserve Fund (per RBI Guide Lines) ||100.00 ||65.00 |
|Transfer to General Reserve ||- ||100.00 |
|Balance carried over to Balance Sheet ||1189.96 ||954.58 |
2. OPERATIONAL PERFORMANCE :
The financial performance of your Company during the year ended March 31 2018remained healthy with Revenue from Operations rising by 48.47 per cent to Rs.611.93 lakhsfrom Rs.412.15 lakhs in the previous year. Other Income grew by 42.99 per cent to Rs.52.90lakhs from Rs.36.99 lakhs during the previous year. The Net Profit after Tax grew by 46.77per cent to Rs.461.75 lakhs after providing Current Year Income Tax (MAT) of Rs.11.50lakhs. The improved performance during the year under review is on account of thefavourable capital market conditions. The rental incomes have been on expected basis andgoing forward a major risk to the Economy could be a sharp increase in oil prices andrise in interest rates which could adversely affect inflation and capital marketconditions and performance of the Company as our Company's activity i.e Investments ismainly dependent on the Capital
Your Company has a dividend policy that inter alia balances the objectivesappropriately rewarding shareholders and retaining capital in order to fund future growth.It has a consistent track record of dividend distribution to Company shareholders. Inrecognition of the overall performance during the year under review your Directors arepleased to recommend a dividend at the rate of 40% (i.e. Rs.4/- per Equity Share ofRs.10/- each) for the financial year 2017-18 as against 35 % dividend rate in the previousyear. The proposed dividend if approved at the 94th Annual General Meeting by theMembers will be paid to all those equity shareholders whose names appear in the Registerof Members as on 03/08/2018 and also to those whose names appear as beneficial owners asfurnished by the National Securities Depository Limited and Central Depository Services(India) Limited. The Company has not appropriated proposed dividend from Statement ofProfit and Loss for the year ended March 31 2018. The outflow on account of the dividendpayout would be Rs. 144 . 67 lakhsincludingtax on dividends
4. TRANSFER TO RESERVE :
The Company Directors have decided to retain the Surplus amount in Statement of Profitand Loss of Rs.1189.96 lakhs in the retained earnings only. However the Companytransferred a sum of Rs. 100.00 lakhs i.e. 20% of its net profit for the year 2017-18 toReserve Fund in terms of Sec 45-1c of the RBIAct 1934.
5. DETAILS OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURES:
Your company does not have any subsidiaries associates and joint ventures.
6. DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONAL WHO WERE APPOINTED OR HAVERESIGNED DURING THE YEAR :
Sri. K. Kapil Prasad Director of the Company retires at the ensuing Annual GeneralMeeting and being eligible offers himself for re-appointment.
7. DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS:
All Independent Directors have given declarations that they meet the criteria ofIndependence as laid down under Section 149 of the Companies Act 2013 and Regulations ofSEBI (Listing obligations and disclosure requirements) Regulations 2015 which have beenrelied on by the Company and were placed at the Board Meeting held on May 11 2018.
8. EVALUATION OF THE BOARD'S PERFORMANCE:
In compliance with the Companies Act 2013 and Regulation 17(10) of SEBI (ListingObligations and Disclosure
Requirements) Regulations 2015 the performance evaluation of the Board was carriedout during the year under review.
The Board has a formal mechanism for evaluating Board's performance and as well as thatof its Committees and Individual Directors including the Chairman of the Board based onthe criteria laid down by Nomination and Remuneration Committee which included attendancecontribution at the meetings and otherwise Independent judgment safeguarding of minorityshareholders interest adherence to Code of Conduct and Business ethics monitoring ofregulatory compliance risk assessment and review of Internal Control Systems etc.
9. POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION AND OTHER DETAILS:
The Company follows a policy on remuneration of Directors and Senior ManagementEmployees. The Policy is approved by the Nomination and Remuneration Committee and theBoard. The details on the same are given in the Corporate Governance Report which formspart of this report.
10. NUMBER OF BOARD MEETINGS HELD:
The Board of Directors duly met 4 times during the Financial Year 2017-18 and theintervening period between two board meetings was within the maximum gap of one hundredand twenty days. The dates on which the meetings were held are as follows. 17th May201728th July 2017 4th November2017 and 6th February2018.
11. AUDIT COMMITTEE:
The details pertaining to composition and term of reference of the Audit Committeemember's dates of meeting held and attendance of the Directors are given separately in theCorporate Governance Report which forms part of this report.
12. LISTING OF COMPANY'S SHARES:
The Company's shares are listed at The National Stock Exchange of India Limited(NSE) w.e.f. 15.04.2015 and the Annual Listing Fees for the year 2018-19 have been paid.The Company's shares are listed and traded at NSE with ISIN code INE 850E01012' andStock Code LFIC' with effect from 15.04.2015.
13. (i) DEMATERIALISATION OF SHARES:
Your Company shares have been made available for dematerialization through theNational Securities Depository Limited (NSDL) and Central Depository Services IndiaLimited (CDSL). As on 31st March 201872.11% of the shares in your Company havebeen dematerialized.
(ii) UN PAID /UN CLAIMED DIVIDEND:
In terms of the provisions of the Companies Act the Company is obliged to transferdividends which remain unpaid or unclaimed for a period of seven years from thedeclaration to the credit of the Investor Education and Protection Fund established by theCentral Government. Accordingly the Members are hereby informed that the 7 years periodfor payment of the dividend pertaining to financial year 2010-2011 will expire onSeptember 11th 2018 and thereafter the amount standing to the credit in thesaid account will be transferred to the "Investor Education and Protection Fund"of the Central Government.
14. AUDITORS: i. Statutory Auditors:
M/s. K.S. Rao & Co. Chartered Accountants Hyderabad was appointed as StatutoryAuditors of the Company at the Annual General Meeting held on 28.07.2017 to hold theoffice for a period of 5 years commencing from the conclusion of 93rd AnnualGeneral Meeting till the conclusion of 98th Annual General Meeting of theCompany subject to ratification at every subsequent Annual General Meeting of the Company.However ratification of appointment of Statutory Auditors by the members at every AnnualGeneral Meeting is done away with vide notification dated May 07 2018 issued by theCorporate Affairs New Delhi. Accordingly no resolution is proposed for theratificationof appointment of Auditors who were appointed in the Annual General Meetingheld on 28th July 2017.
The Auditors' Report for F.Y. 2017-18 does not containanyqualifications. The Auditors'Report is enclosed with the Financial Statements in this Annual Report. ii. InternalAuditors:
M/s M. Bhaskara Rao & Co. Chartered Accountants Hyderabad perform the dutiesof Internal Auditors of the Company and their report is reviewed by the Audit Committeefrom time to time. iii. Secretarial Auditors: Smt. N. Madhavi has been appointed asthe Secretarial Auditors of the Company. According to the provisions of section 204 of theCompanies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the Secretarial Audit Report submitted by CompanySecretary in
Practice is enclosed as a part of this report. The Secretarial Audit Report does notcontain any qualification.
15. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THEFINANCIAL STATEMENTS: The Company has in place proper and adequate internal controlsystems commensurate with the nature of its business and size and complexity of itsoperations. Internal control systems comprising of policies and procedures designed toensure reliability of financial reporting timely feedback on achievement of operationaland strategic goals compliance with policies procedure applicable laws and regulationsand that all assets and resources are acquired are used economically.
16. DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act 2013 your Directors confirm thatto the best of their knowledge and belief and according to the information and explanationobtained by them. i. In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures: ii. Such accounting policies as mentioned in the notes to the financialstatements have been selected and applied consistently and judgments and estimates thatare reasonable and prudent made so as to give a true and fair view of the state of affairsof the Company at the end of the financial year 2017-18 and of the statement of Profit orLoss of the Companyforthat . period iii. Proper and sufficientcare has been taken for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities: iv. The annual accounts for the year 2017-18have been prepared on a going concern basis. v. That the proper internal financialcontrols were in place and that the financial were operating effectively. vi. That systemsto ensure compliance with the provisions of all applicable laws were in place and wereadequate and effectively mentioned under various heads of the departments which are inthen reporting to the Managing Director.
17. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company being a non-banking finance Company registered with the Reserve Bank ofIndia and engaged in the business of investment in equity and mutual funds is exempt fromcomplying with the provisions of section 186 of the Companies Act 2013. Accordingly thedisclosures of the investments done as required by the Company have not been given in thisreport. The Company has not given Loans and Guarantees covered under the provisions ofsection 186 of the Companies Act 2013.
18. PUBLIC DEPOSITS:
Your Company has not accepted any deposits from the public during the year under reviewand there are no outstanding deposits as on 31st March 2018. Further theCompany is registered with RBI as a "Non Deposit Taking Company".
19. CHANGE IN NATURE OF BUSINESS:
There is no change in the nature of business during the year under review.
20. VIGIL MECHANISM :
In pursuant to the provisions of section 177(9) & (10) of the Companies Act2013 a Vigil Mechanism for Directors and employees to report genuine concerns has beenestablished. The Vigil Mechanism Policy has been uploaded on the website of the Company atwww.lakshmifinance.org .
21. RELATED PARTY TRANSACTIONS :
Related party transactions that were entered during the financial year were on anarm's length basis and were in the ordinary course of business. There were no materiallysignificant related party transactions with the Company's Promoters Directors Managementor their relatives which could have had a potential conflict with of the Company.Transactions with related parties entered by the Company in the normal course of businessare periodically placed before the Audit Committee for its omnibus approval and theparticulars of contracts entered during the year as per Form AOC-2 is enclosed as Annexure-I. The policy on related party transactions as approved by the Board is uploaded on thewebsite of the Company at www.lakshmifinance.org.
22. EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT- 9 isannexed herewith as "Annexure-II" to this report
23. PARTICULARS OF EMPLOYEES:
None of the employees fall under the purview of the provisions provided under theSection 197 read with Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonal ) Rules 2014 whose details are required to be disclosed.
24. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In terms of the provisions of Regulation 34 of the Securities and Exchange Board ofIndia . (Listing Obligations and
Disclosure Requirements) Regulations 2015 the Management's discussion and analysis isset out in this Annual Report.
25. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
Your Company has taken adequate steps to adhere to all the stipulations laid downin the Listing Regulation. A report on Corporate Governance is included as a part of thisAnnual Report. Certificate from the Statutory Auditors of the Company M/s. K.S. Rao &Co. Chartered Accountants confirming the compliance with the conditions of
Corporate Governance as stipulated under Listing Regulation is included as a part ofthis report.
26. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO : Information required under section 134(3)(m) read with Rule 8 of theCompanies (Accounts) Rules 2014 of the Companies Act has not been given as the same isnot applicable owing to the nature of activities in foreign Currency is Nil. 27.CORPORATE SOCIAL RESPONSIBILITY (CSR) : In terms of section 135 and Schedule VII ofthe Companies Act 2013 the Board of Directors of your Company has constituted a CSRCommittee w.e.f 25.05.2015. The Committee Comprises of three Independent Directors and onenon-independent Director namely Sri.R.Surender Reddy Sri.Keshav Bhupal Sri.Kapil Bhatiaand
Sri.K.Harishchandra Prasad Managing Director. CSR Committee of the Board developed aCSR Policy and the functions of Committee include review of CSR initiatives undertaken bythe Company formation and recommendation to the Board of a CSR policy indicating theactivities to be undertaken by the Company and recommendation of the amount of theexpenditure to be incurred for such activities. However during the year under reviewSection 135 of the Companies Act 2013 relating to the Corporate Social Responsibility isnot applicable to the Company.
28. REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 and Companies(Particulars of Employees) Rules 1975 in respect of employees of the Company andDirectors is given in Annexure-III
29. MATERIAL CHANGES AND COMMITMENTS:
Pursuant to the provisions Sec.134 (3) (l) Companies Act 2013 there were no materialchanges and commitments which affects the financial statements of the Company during theyear under review.
30. RISK MANAGEMENT COMMITTEE:
The Board of Directors of the Company has formed a risk management committee to frameimplement and monitor the risk management plan for the Company. The Committee isresponsible for reviewing the risk management plan and ensuring its effectiveness. Theaudit committee has additional oversight in the area of financial risks and controls.Major risks identified by the business and functions are systematically addressed throughmitigating actions on a continuing basis. The details of risk management committee and itscomposition is given in the Corporate Governance Report which form part of this report.
31. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no orders passed by the Regulators/Courts which would impact the goingconcern status of the Company and its future operations.
32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
"The Company has in place an Anti Sexual Harassment Policy in line with therequirements of The Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of Sexual harassment complaints received and disposed offduring each Financial Year: No. of complaints received: Nil No. of complaints disposedoff: Nil
Directors take this opportunity to express their thanks to various departments of theCentral and State Government Banks and Shareholders for their continued support andguidance. The Directors wish to place on record their appreciation for the dedicatedefforts put in by the Employees of the Company at all levels.
|For and on behalf of the Board |
|LAKSHMI FINANCE & INDUSTRIAL CORPORATION LIMITED |
|Sd/- ||Sd/- |
|R. SURENDER REDDY ||K. HARISHCHANDRA PRASAD |
|Director ||Managing Director |
|(DIN: 00083972) ||( DIN: 00012564) |
|Place: Hyderabad || |
|Date: 11.05.2018 || |