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LGB Forge Ltd.

BSE: 533007 Sector: Engineering
NSE: LGBFORGE ISIN Code: INE201J01017
BSE 00:00 | 18 Jun 6.11 0.29
(4.98%)
OPEN

6.03

HIGH

6.11

LOW

5.53

NSE 00:00 | 18 Jun 6.00 0.25
(4.35%)
OPEN

5.85

HIGH

6.00

LOW

5.50

OPEN 6.03
PREVIOUS CLOSE 5.82
VOLUME 868490
52-Week high 6.11
52-Week low 2.17
P/E 152.75
Mkt Cap.(Rs cr) 146
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 6.03
CLOSE 5.82
VOLUME 868490
52-Week high 6.11
52-Week low 2.17
P/E 152.75
Mkt Cap.(Rs cr) 146
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

LGB Forge Ltd. (LGBFORGE) - Director Report

Company director report

DEAR SHAREHOLDERS

Your Directors take pleasure in presenting the Fourteenth Annual Report of your Companytogether with the audited accounts for the year ended 31st March 2020.

FINANCIAL RESULTS

The summary of the financial performance of the Company for the year ended 31st March 2020as compared to the previous year is as below:

Particulars 31.03.2020 31.03.2019
(Rs.In Lakhs) (Rs.In Lakhs)
Total Revenue 10196.16 13308.79
Profit before interest depreciation & Tax 631.37 1015.39
Less: Interest 253.34 489.21
Depreciation 442.02 320.47
Profit Before Tax (63.99) 205.71
Less : Provisions for Taxation - -
Current Income Tax / Mat - -
Deferred Tax - -
Add: Exceptional items - -
PROFIT AFTER TAX (63.99) 205.71
Add: Balance brought forward (4739.66) (4946.62)
AVAILABLE FOR APPROPRIATION (4803.65) (4739.66)

INDIAN ACCOUNTING STANDARDS (IND AS)

The Company had adopted Ind AS with effect from 1st April 2017 pursuant to theMinistry of Corporate Affairs notification dated 16th February 2015 notifying theCompanies (Indian Accounting Standard) Rules 2015.

PERFORMANCE OF THE COMPANY

During the year under review the total Revenue stood at Rs. 10196.16 Lakhs as comparedto Rs. 13308.79 Lakhs for the previous year profit before tax stood at Rs.(63.99) Lakhsfor the year under review as compared to Rs.205.71 Lakhs for the previous year profitafter tax stood at Rs.(63.99) Lakhs as compared to Rs.205.71 Lakhs for the previous year.

TRANSFER TO RESERVES

The Company has not transferred any amount to Reserves during the year due to lossincurred to the Company and hence no information as per the provisions of Section134(3)(j) of the Companies Act 2013 has been furnished.

DIVIDEND

In view of the losses incurred to the Company your Directors regret their inabilityto pay dividend for the year 2019-2020.

TRANSFER TO INVESTORS EDUCATION AND PROTECTION FUND

The Company has not declared any dividend from the date of incorporation and henceunclaimed dividend liable to be transferred to IEPF is not applicable to the Company.

SHARE CAPITAL

The paid up share capital of the Company as at 31st March 2020 aggregates toRs.238202463/- comprising of 238202463 equity shares of Rs.1/- each fully paid up.

UTILISATION OF ISSUE PROCEEDS

There has been no deviation in the utilization of Rights Issue proceeds from theobjects as stated in the Letter of Offer dated January 17 2019.

NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

Detailed composition of the Board and Board Committees namely Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee number ofmeetings held during the year under review attendance of each Director and other relateddetails are set out in the Corporate Governance Report which forms a part of this Report.

DECLARATION BY INDEPENDENT DIRECTORS

Our definition of ‘Independence' of Directors is derived from Regulation 16(b) ofthe Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 and Section 149(6) of the Companies Act 2013. Based onthe confirmation / disclosures received from the Directors and on evaluation of therelationships disclosed the following Non-Executive Directors are Independent:

1. Sri.K.N.V.Ramani

2. Sri.P.Shanmugasundaram

3. Sri.P.V.Ramakrishnan

4. Ms.Aishwarya Rao BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the Directors individually and theCommittees of the Board.

A structured questionnaire was prepared after taking into consideration inputs receivedfrom Directors covering aspects of the Board's functioning such as adequacy of theComposition of the Board and its Committees execution and performance of specific dutiesobligations and governance.

A separate exercise was carried out to evaluate the performance of the IndividualDirectors including the Chairman of the Board. The Directors' performance was evaluated onparameters such as level of engagement and contribution in safeguarding the interest ofthe Company etc.

The performance evaluation of the Independent Directors was carried out by the entireBoard. Further the performance evaluation of the Chairman and Non Independent Directorswas carried out by the Independent Directors.

FAMILIARIZATION PROGRAMMES

In compliance with the requirements of the Listing Regulations the Company has put inplace a familiarization programme for the Independent Directors to familiarise them withtheir roles rights and responsibilities as Independent Directors the working of theCompany nature of the industry in which the Company operates business model and so on.The same is also available on the Company website at www.lgbforge.com.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act 2013 Sri.V.Rajvirdhan(DIN:00156787) director being longest in the office is liable to retire by rotation atthe ensuing Annual General Meeting of the Company and being eligible has offered himselffor re-appointment is included in the Notice of AGM for seeking approval of Members. TheDirectors recommend his re-appointment for your approval. The retirement by rotation andreappointment of Mr. V. Rajvirdhan does not mean there is a break in his appointment asManaging Director

Ms.Aishwarya Rao Independent director re-appointed for a second term of fiveconsecutive years with effect from September 10 2020 upto September 09 2025 and is notliable to retire by rotation subject to the approval of the Share holders.

A brief resume and particulars relating to them are given separately as an annexure tothe AGM Notice.

During the year under review the following change occurred in the Key ManagerialPersonnel.

-Sri.R.Ponmanikandan Company Secretary and Compliance Officer of the Company hasresigned with effect from 30th July 2019.

-Sri.R.Vinothkumar appointed as Chief Financial Officer (CFO) of the Company witheffect from 10th June 2019 and Sri. R. Ravi appointed as Company Secretary andCompliance Officer of the Company with effect from 16th August 2019.

SECRETARIAL STANDARDS

The Company has followed applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto ‘Meetings of the Board of Directors' and ‘General Meetings' respectively.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act 2013 in relation to the auditedfinancial statements of the Company for the year ended on 31st March 2020 the Board ofDirectors hereby confirms that

(a) In the preparation of the annual accounts the applicable accounting standards havebeen followed and there are no material departures;

(b) that such accounting policies have been selected and applied consistently and theDirectors made judgments and estimates that are reasonable and prudent so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for that period;

(c) Proper and sufficient care was taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) The annual accounts of the Company have been prepared on a going concern basis;

(e) Internal financial controls have been laid down to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;

(f) Proper system have been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

NOMINATION AND REMUNERATION POLICY

The Company pursuant to the provisions of Section 178 of the Companies Act 2013 and interms of Regulation 19(4) of the SEBI Listing Regulations has formulated a policy onNomination and Remuneration for its Directors Key Managerial Personnel and seniormanagement which inter-alia provides the diversity of the Board and provides the mechanismfor performance evaluation of the Directors and the said policy has been outlined in theCorporate Governance Report which forms part of this Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management andAdministration) Rules 2014 the extract of Annual Return in Form MGT- 9 is annexed asAnnexure - A.

AUDITORS

STATUTORY AUDITORS

Pursuant to provisions of Section 139 of the Act and Rules there under M/s.N RDoraiswami & Co Chartered Accountants (Firm Registration No. 000771S) the StatutoryAuditors of the Company hold office up to the conclusion (Seventeenth) 17th AnnualGeneral Meeting.

The requirement for the annual ratification of Auditors' appointment in the AGM hasbeen omitted pursuant to “Companies” (Amendment Act 2017) notified on May 72018.

The Auditors' Report for the financial year 2019-2020 does not contain anyqualification reservation adverse remark or disclaimer.

SECRETARIAL AUDIT

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 Mr.P.Eswaramoorthy of M/s.P.Eswaramoorthy And Company Company Secretaries asSecretarial Auditors' to conduct the Secretarial Audit of the Company for the FinancialYear ended 31st March 2020.

The Secretarial Audit Report for the Financial Year ended 31st March 2020 in FormNo.MR-3 is annexed to this Report as Annexure B.

Explanations or Comments by the Board on Observations by the Company Secretary inpractice in his secretarial audit report as under:

The Company has made representation before the waiver committee of the NSE and BSE forwaiver of the fine levied for non compliance in composition of Nomination and Remunerationcommittee w.e.f. 29th January 2018 and awaiting for their reply.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY

During the financial year ended 31st March 2020 the Company has not given any Loan ormade any investment or give any guarantee pursuant to the provision of Section 186 of theCompanies Act 2013.

RELATED PARTY TRANSACTIONS

Details of the transactions with Related Parties are provided in the accompanyingfinancial statements. There were no transactions during the year which would require to bereported in Form AOC.2.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICHHAVE OCCURRED BETWEEN MARCH 31 2020 AND THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of theCompany occurred between the end of financial year (March 31 2020) to which thisfinancial statements relate and the date of this Report.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withRule 8 of The Companies (Accounts) Rules 2014 is annexed herewith as “Annexure -C”.

RISK MANAGEMENT POLICY

The Board of Directors of the Company has formulated a Risk Management Policy whichaims at enhancing Shareholder's value and providing an optimum risk- reward trade off. Therisk management approach is based on the clear understanding of the variety of risks thatthe organization faces disciplined risk monitoring and measurement and continuous riskassessment and mitigation reserves.

CORPORATE SOCIAL RESPONSIBILITY

According to Section 135 of the Companies Act 2013 no requirement for our Company toconstitute the CSR Committee and for framing the CSR Policy. Hence the requirement tofurnish the details under Section 134(3) (o) of the Companies Act 2013 does not arise.

FIXED DEPOSITS

During the year the Company has not accepted or renew any Fixed Deposits and no FixedDeposits remained unclaimed with the company as on 31st March 2020.

DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNAL.

No Significant and Material orders have been passed by any Regulatory or Court orTribunal which can have an impact on the going concern status and the Company's operationsin future.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records.

The Directors and Management confirm that the Internal Financial Controls (IFC) areadequate with respect to the operations of the Company. A report of Auditors pursuant toSection 143(3) (i) of the Companies Act 2013 certifying the adequacy of InternalFinancial Controls is annexed with the Auditors report.

DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013

Details pursuant to Section 197(12) of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 form part of thisReport and are annexed herewith as “Annexure - D”

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 Company maintains all itsrecords in SAP System and the work flow and approvals are routed through SAP.

The Company has appointed Internal Auditors to observe the Internal Controls whetherthe works flow of organization is being done through the approved policies of the Company.In every Quarter during the approval of Financial Statements Internal Auditors willpresent the Internal Audit Report and Management Comments on the Internal Auditobservations; and

The Board of Directors of the Company have adopted various policies like Related PartyTransactions Policy Whistle Blower Policy Policy to determine Material Subsidiaries andsuch other procedures for ensuring the orderly and efficient conduct of its business forsafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information.

SUBSIDIARY COMPANIES JOINT VENTURE AND CONSOLIDATED FINANCIAL STATEMENTS:

The Company has no subsidiary Joint Venture or Associate Companies during the yearunder review and hence no information required to be furnished as per the provisions ofrule 8(5)(iv) of the Companies(Accounts) Rules 2014.

NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES JOINT VENTURESOR ASSOCIATE COMPANIES DURING THE YEAR

During the financial year ended 31st March 2020 no entity became or ceased to be thesubsidiary joint venture or associate of the Company.

CHANGE IN THE NATURE OF BUSINESS IF ANY

There was no change in the nature of business of the Company during the financial yearended 31st March 2020.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

As per requirements of Listing Regulations a detailed review of the developments inthe industry performance of the Company opportunities and risks internal controlsystems outlook etc. of the Company is given under the head Management Discussion andAnalysis Report which forms part of this Annual Report.

CORPORATE GOVERNANCE

Our Company has complied with the Corporate Governance norms as stipulated under theListing Regulations. A detailed report on Corporate Governance forms part of this AnnualReport. A certificate from Secretarial Auditors confirming compliance of the CorporateGovernance requirements by the Company is attached to the Report on Corporate Governance.

AUDIT COMMITTEE

Audit Committee of the Company meets the requirements of section 177 of the CompaniesAct 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015. The details of the composition of the Audit Committee as required underthe provisions of Section 177(8) of the Companies Act 2013 are given in the CorporateGovernance Report which forms part of this annual report. During the year under reviewthe Board has accepted all the recommendations of the Audit Committee.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Whistle Blower Policy for Directors and employees toreport their genuine concern. The details of the same are explained in the CorporateGovernance Report.

LISTING OF EQUITY SHARES

The Company's equity shares continue to be listed at National Stock Exchange of IndiaLimited and BSE Limited. We confirm that the Listing fee for the financial year 2020-2021has been paid to them.

HUMAN RESOURCE

Your Company Firmly believes that employees are its most valued resource and theirefficiency plays a key role in achieving defined goals and building a competitive workenvironment. Many initiatives have been taken to support business through organizationalefficiency process change support and various employee engagement programmes which hashelped the Organization achieve higher productivity levels. In its pursuit to attractretain and develop best available talents several programmes are regularly conducted atvarious levels across the Company.

Employee relations continued to be cordial and harmonious across all levels and at allthe units of the Company.

POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has an Internal Compliant Committee as required to be formed under Section4 of the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013 and rules made thereunder which were notified on 9 December 2013.

The Company has zero tolerance towards sexual harassment at the workplace and hasadopted a policy on prevention prohibition and Redressal of sexual harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 and the Rules thereunder.

During the financial year 2019-20 the committee submitted its Annual Report asprescribed in the said Act and there was no complaint as regards of sexual harassmentreceived by the Committee during the year.

ACKNOWLEDGEMENT

The Board of Directors take this opportunity to place on record their appreciation toall the Stakeholders of the Company viz. customers investors banks regulatorssuppliers and other business associates for the support received from them during the yearunder review. The Directors also wish to place on record their deep sense of gratitude andappreciation to all the employees for their commitment and contribution towards achievingthe goals of the Company.

By Order of the Board

Coimbatore V.Rajvirdhan P.Shanmugasundaram
20 06 2020 Managing Director Director
DIN:00156787 DIN:00119411