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LGB Forge Ltd.

BSE: 533007 Sector: Engineering
NSE: LGBFORGE ISIN Code: INE201J01017
BSE 00:00 | 09 Apr 1.78 0.16
(9.88%)
OPEN

1.78

HIGH

1.78

LOW

1.78

NSE 00:00 | 09 Apr 1.95 0.15
(8.33%)
OPEN

1.80

HIGH

1.95

LOW

1.80

OPEN 1.78
PREVIOUS CLOSE 1.62
VOLUME 1625
52-Week high 4.72
52-Week low 1.56
P/E 35.60
Mkt Cap.(Rs cr) 42
Buy Price 1.78
Buy Qty 5502.00
Sell Price 1.60
Sell Qty 8000.00
OPEN 1.78
CLOSE 1.62
VOLUME 1625
52-Week high 4.72
52-Week low 1.56
P/E 35.60
Mkt Cap.(Rs cr) 42
Buy Price 1.78
Buy Qty 5502.00
Sell Price 1.60
Sell Qty 8000.00

LGB Forge Ltd. (LGBFORGE) - Director Report

Company director report

Dear Shareholders

Your Directors take pleasure in presenting the Thirteenth Annual Report of your Companytogether with the audited accounts for the year ended 31st March 2019.

FINANCIAL RESULTS

The summary of the financial performance of the Company for the year ended 31st March2019 as compared to the previous year is as below

Particulars 31.03.2019 31.03.2018
(Rs. in Lakhs) (Rs. in Lakhs)
Total Revenue 13308.79 10258.96
Profit before interest depreciation & Tax 1015.39 196.45
Less : Interest 489.21 312.62
Depreciation 320.47 201.79
Profit Before Tax 205.71 (317.96)
Less : Provisions for Taxation - -
Current Income Tax / Mat - -
Deferred Tax (Credit / charge) - -
Add : Exceptional items - -
PROFIT AFTER TAX 205.71 (317.96)
Add: Balance brought forward (4946.62) (4628.66)
AVAILABLE FOR APPROPRIATION (4740.91) (4946.62)

INDIAN ACCOUNTING STANDARDS (IND AS)

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

PERFORMANCE OF THE COMPANY

During the year under review the total Revenue stood at Rs. 13308.79 Lakhs as comparedto Rs. 10258.96 Lakhs for the previous year profit before tax stood at Rs. 1015.39 Lakhsfor the year under review as compared to Rs. 196.45 Lakhs for the previous year profitafter tax stood at Rs. 205.71 Lakhs as compared to the loss of Rs.(317.96 Lakhs) for theprevious year.

TRANSFER TO RESERVES

The Company has not transferred any amount to Reserves during the year due to theaccumulated loss incurred to the Company and hence no information as per the provisions ofSection 134(3)(j) of the Companies Act 2013 has been furnished.

DIVIDEND

In view of the previous losses incurred to the Company your Directors regret theirinability to pay dividend for the year 2018-19.

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 transfered to IEPF is not applicable to the Company.

SHARE CAPITAL

The paid up share capital of the Company as at 31st March 2019 aggregates toRs. 238202463/- comprising of 238202463 equity shares of Rs. 1/- each fully paid up.During the year the Company has issued 88200912 Equity Shares under Rights Issue at aprice of Rs. 3 per share (including the premium of Rs. 2).

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 intoconsideration inputs received from Directors covering aspects of the Board's functioningsuch as adequacy of the Composition of the Board and its Committees execution andperformance of specific duties obligations 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 familiarisation 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.co.in.

DIRECTORS

Pursuant to the provisions of Section 152 of the Companies Act 2013 Sri.B.Vijayakumar(DIN:00015583) 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 reappointment. Necessary resolution for his re-appointment is included in the Noticeof AGM for seeking approval of Members. The Directors recommend his re-appointment foryour approval.

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

Key Managerial Personnel

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

Sri.R.Ramakrishnan Chief Financial Officer of the company has resigned with effectfrom 14th March 2019. The Board of Directors has placed on record their sincereappreciation for the contribution made by him during his tenure.Pursuant to the provisionsof Section 203 of Companies Act 2013 the vacancy will be filled up for due complaince

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 2019 the Board of Directorshereby confirms that (a) in the preparation of the annual accounts the applicableaccounting standards have been followed and there are no material departures; (b) thatsuch accounting policies have been selected and applied consistently and the Directorsmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the Company for that period; (c) proper and sufficient care was 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; (d) the annual accounts of the Company have beenprepared on a going concern basis; (e) internal financial controls have been laid down tobe followed by the Company and that such internal financial controls are adequate and wereoperating effectively; (f) proper system have been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

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 evolution of the Directors and the said policy have 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 as Annexure- 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 Company has received a certificate from the said Auditors that theyare eligible to hold office as the Auditors of the Company and are not disqualified forbeing so appointed.

The Auditors' Report for the financial year 2019 does not contain any qualificationreservation 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 2019.

The Secretarial Audit Report for the Financial Year ended 31st March 2019in Form No. MR-3 is annexed to this Report as "Annexure - B".

The Secretarial Audit Report does not contain any qualification reservation or adverseremark.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY

During the financial year ended 31st March 2019 no Loan under section 186 of theCompanies Act 2013 was given by the Company. In respect of investment loan guaranteegiven in earlier years please refer notes to standalone financial statements.

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 2019 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 2019) 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 did not accept or renew any Fixed Deposits and no FixedDeposits remained unclaimed with the company as on 31st March 2019.

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

No Significant and Material orders have been passed by any Regulator 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 likeRelated Party Transactions Policy Whistle Blower Policy Policy to determine MaterialSubsidiaries and such other procedures for ensuring the orderly and efficient conduct ofits business for safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information.

SUBSIDIARY COMPANIES JOINT VENTURE AND CONSOLIDATED FINANCIAL STATEMENTS: TheCompany has no subsidiary Joint Venture or Associate Companies during the year underreview and hence no information required to be furnished as per the provisions of rule8(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 2019 no entity became or ceasedto be the subsidiary 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 2019.

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 2019-2020has been paid to them.

HUMAN RESOURSE

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 andharmonious across all levels and at all the 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 2018-19 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
V.RAJVIRDHAN P. SHANMUGASUNDARAM
Coimbatore Managing Director Director
30.04.2019 DIN: 00156787 DIN: 00119411