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LKP Finance Ltd.

BSE: 507912 Sector: Financials
NSE: LKPMERFIN ISIN Code: INE724A01017
BSE 09:35 | 06 Dec 91.00 1.00
(1.11%)
OPEN

91.50

HIGH

91.50

LOW

91.00

NSE 05:30 | 01 Jan LKP Finance Ltd
OPEN 91.50
PREVIOUS CLOSE 90.00
VOLUME 56
52-Week high 144.20
52-Week low 71.10
P/E
Mkt Cap.(Rs cr) 114
Buy Price 90.50
Buy Qty 1.00
Sell Price 91.65
Sell Qty 3.00
OPEN 91.50
CLOSE 90.00
VOLUME 56
52-Week high 144.20
52-Week low 71.10
P/E
Mkt Cap.(Rs cr) 114
Buy Price 90.50
Buy Qty 1.00
Sell Price 91.65
Sell Qty 3.00

LKP Finance Ltd. (LKPMERFIN) - Director Report

Company director report

The Directors present the Thirty Eighth Annual Report and AuditedAccounts of the Company for the year ended March 31 2022.

FINANCIAL HIGHLIGHTS

The financial performance of the Company is as follows:

Rs. In lakh

Particulars

Standalone

Consolidated

Financial Year Financial Year Financial Year Financial Year
2021-22 2020-21 2021-22 2020-21
Revenue from Operations 5554.01 9563.69 6100.18 9575.18
Other Income 15.80 149.31 15.80 149.31
Total Revenue 5569.81 9713.00 6115.98 9724.49
Profit before Tax 3722.03 6963.56 4190.36 6954.94
Less: Tax expense 441.25 889.96 533.95 890.27
Profit after Tax 3280.78 6073.60 3656.41 6064.67
Other Comprehensive income for the year 212.50 4822.25 214.68 4822.54
Total Comprehensive Income / (loss) for the year 3493.28 10895.84 3871.09 10887.21
Earnings per equity share (Face Value of Rs.10/- each) - Basic and Diluted (in Rs.) 26.09 48.32 29.09 48.25

RESERVE

The Company during the year under review has transferred Rs. 656.162lacs to Special Reserve as per applicable regulation for NBFCs prescribed by the ReserveBank of India Act 1934.

DIVIDEND

Your Directors are pleased to recommend a Dividend of Rs. 3/- (30%) perequity share of Rs. 10/- each for the financial year 2021-22 which is subject toconsideration and approval of the Shareholders at the ensuing Annual General Meeting ofthe Company and shall be paid within the statutory period to those members whose namesappear in the Register of Members as on the date of book closure.

The total outflow on account of the proposed dividend shall amount toRs. 377.06 lakhs.

PERFORMANCE REVIEW

The Company has adopted Ind AS for reporting financial results. TheCompany's revenue from operation decreased to Rs. 5554.01 from Rs. 9563.69 lacs lacsand Other Income also decreased to Rs. 15.80 lacs from 149.31 lacs. There is a net profitafter tax of Rs 3280.78 lakhs as against a net profit of Rs 6073.60 lakhs in the previousyear.

COVID-19

The COVID-19 pandemic outbreak which began in the middle of March2020continued to impact the economy throughout the financial year 2021-22. The year was fullof uncertainties with slowdown in activities on the ground. Your Company has been strictlyadhering to lockdown announcements in accordance with the directives issued by theCentral State Government and Local Administration.

The Company took all necessary measures to mitigate the impact of thechallenges being faced in the business. It is focused on controlling costs maintainingliquidity and closely monitoring the operations. The Company carries shares and securitiesin its books. The effect of mark to market profit / losses thereon have been taken intoaccount in the Statement of Profit and Loss for the year. The Company believes that it hastaken into account the impact of known events arising out of COVID 19 pandemic in thepreparation of financial results resulting out of fair valuation of the investments.

SHARE CAPITAL

During the year under review there is no change in the Share capitalof the Company.

During the year under review the Company has not issued any sweatequity shares or bonus shares or equity shares with differential rights.

FIXED DEPOSITS

The Company has no public deposits as of date and will not accept anydeposits without prior approval of the Statutory Authorities concerned.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the sizescale and complexity of its operations. The scope and authority of the InternalAuditors' function is defined in their letter of engagement. To maintain itsobjectivity and independence the Internal Audit function reports to the Chairman of theAudit Committee of the Board & to the Executive Chairman.

The Internal Audit Department monitors and evaluates the efficacy andadequacy of internal control system in the Company its compliance with operating systemsaccounting procedures and policies of the Company. Based on the report of internal auditfunction process owners undertake corrective action in their respective areas and therebystrengthen the controls. Significant audit observations and recommendations along withcorrective actions thereon are presented to the Audit Committee of the Board.

RISK MANAGEMENT

Your Company recognizes that risk is an integral part of business andis committed to managing the risks in a proactive and efficient manner.

The Board of the Company at regular intervals monitors the financialoperational legal risk to the Company. There is no risk which in the opinion of theBoard which may threaten the existence of the Company.

INDIAN ACCOUNTING STANDARD (IND AS)

The Company has adopted Indian Accounting Standards ("INDAS") from April 01 2019 with a transition date of April 01 2018. Accordingly thefinancial statement for the year 2021-22 have been prepared in accordance with IND ASprescribed under Section 133 of the Act read with the relevant rules issued thereunderand the other recognised accounting practices and policies to the extent applicable.

SUBSIDIARY JOINT VENTURE HOLDING COMPANY AND ASSOCIATE COMPANIES

As per the Circular No. 51/12/2007-CL-In dated 8th February2011 issued by Government of India Ministry of Corporate Affairs the required financialinformation in the consolidated balance sheet is given in respect of Company'ssubsidiary i.e. Bond Street Capital Private Limited (erstwhile Gayatri Cement and ChemicalIndustries Private Limited) in Form AOC 1 annexed to this Report as "AnnexureI".

The annual accounts of the aforesaid subsidiary and the relateddetailed information shall be made available to shareholders of the Company seeking suchinformation at Company's website i.e. www. lkpsec.com . The Company does not have anyjoint venture/associate / holding company.

CONSOLIDATED FINANCIAL STATEMENT

During the year under review the Board has reviewed the affairs of itssubsidiary. The Consolidated Financial Statements of the Company is prepared in accordancewith the Act and applicable IND AS along with the relevant documents and Auditors Reportthereon form part of this Annual Report.

In accordance with the provisions of Section 136(1) of the Act theAnnual Report of the Company containing therein the audited standalone and consolidatedfinancial statements and the audited financial statement of the subsidiary has been placedon the website of the Company at www.lkpsec.com. The aforesaid documents are alsoavailable to Member interested in obtaining the same upon a request made to the Company.

DIRECTORS

To comply with the requirement of minimum number of Directors on theBoard of the Company pursuant to the regulation 17 (1)

(c) of SEBI (Listing Obligations and Disclosure Requirements)Regulation 2015.

In terms of Section 152 of the Act Mr. Mahendra V. Doshi is liable toretire by rotation at the forthcoming Annual General Meeting ("AGM") and beingeligible offers himself for re-appointment.

The Company has received necessary disclosure and confirmation fromconcerned Director(s) in connection with their appointment / re-appointment as requiredunder Regulation 36 of SEBI Listing Regulations is given in the Notice convening theensuing AGM.

The Company has received necessary declarations from all theIndependent Directors under Section 149(7) of the Act that they meet the criteria ofindependence laid down in Section 149(6) of the Act and Regulation 25 of SEBI ListingRegulations.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Act and SEBI Listing Regulations theBoard has carried out an annual evaluation of performance of its own the Committeesthereof and the Directors individually.

At the meeting of the Board all the relevant factors that are materialfor evaluating the performance of the Committees and of the Board were discussed indetail.

A separate exercise was carried out to evaluate the performance ofindividual Directors including the Chairman of the Board who were inter-alia evaluated onparameters such as level of engagement contribution independence ofjudgmentsafeguarding the interest of the Company and its minority shareholders etc. Theperformance evaluation of the Independent Directors was carried out by the entire Boardexcept the Director being evaluated. The performance evaluation of the Chairman andNon-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

The Board has on the recommendation of the Nomination &Remuneration Committee framed a policy for selection and appointment of Directors SeniorManagement and their remuneration. The Remuneration Policy is stated in the CorporateGovernance Report.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

Company's policy is to have an appropriate mix of executivenonexecutive and independent directors to maintain the independence of the Board andseparate its functions of governance and management. As on March 31 2022 the Board hadsix members one of whom is an Executive Chairman-Managing Director two Non-executiveNon-independent Director and three Independent Directors. One of whom is a WomanIndependent Director.

The Company's policy on Directors' appointment andremuneration and other matters provided in Section 178(3) of the Act has been disclosedin the Corporate Governance Report which forms part of this Annual Report.

MEETINGS

During the year Four Board Meetings and four Audit Committee Meetingswere convened and held. The details of which are given in the Corporate Governance Report.The intervening gap between the Meetings was within the period prescribed under theCompanies Act 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuringcompliance with the provisions of section 134(3)(c) read with section 134(5) of theCompanies Act 2013 in the preparation of the annual accounts for the year ended on March31 2022 and state that :

i. in the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures if any;

ii. the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;

iii. the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

iv. the Directors have prepared the annual accounts on a going concernbasis;

v. the Directors have laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and areoperating effectively; and

vi. there is a proper system to ensure compliance with the provisionsof all applicable laws and that such systems are adequate and operating effectively.

STATUTORY AUDITORS

M/s. MGB & Co. LLP Chartered Accountants Firm Reg. No.101169W/W100035 Mumbai retire at the conclusion of the forthcoming Annual GeneralMeeting. The Company has received a letter from them to the effect that their appointmentif made would be within the provision prescribed under Section 139 of the Companies Act2013. Your Directors recommend their re-appointment.

Auditors' Report to the members does not contain anyqualification reservation and adverse remarks and the same is annexed in this AnnualReport.

SECRETARIAL AUDIT

Pursuant provisions of section 204 of the Companies Act 2013 and TheCompanies (Appointment and Remuneration of Managerial

Personnel) Rules 2014 the company has appointed M/s V. R. Associatesa firm of Company Secretaries in practice to undertake the Secretarial Audit of theCompany. The observation made in the Report is factual and self-explanatory. TheSecretarial Audit Report is annexed herewith as "Annexure II".

The Board of Directors affirm that the Company has complied with theapplicable Secretarial Standards issued by the Institute of Companies Secretaries of India(SS1 and SS2) respectively relating to Meetings of the Board its Committees and theGeneral Meetings.

ANNUAL RETURN

The requirement to annex the extract of annual return in Form MGT 9 isomitted vide the Companies (Amendment) Act 2017 read with the Companies (Management andAdministration) Amendment Rules 2021 effective from 5 th March 2021. As per Section 92of the Companies Act 2013 the copy of annual return of the company has been placed onthe website of the company and can be accessed at www.lkpsec.com

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The company has contributed funds for the promotion of education andenvironmental sustainability etc. The contribution has been made to a registered trustwhich mainly undertakes activities specified under Schedule VII of the Companies Act2013.

The report on CSR activities is annexed herewith as "AnnexureIII".

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during thefinancial year were on arm's length basis and were in the ordinary course of thebusiness. There are no materially significant related party transactions made by theCompany with Promoters Key Managerial Personnel or other designated persons which mayhave potential conflict with interest of the Company at large.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN ORSECURITY PROVIDED BY THE COMPANY

Details of loans guarantees and investments covered under theprovisions of Section 186 of the Act are given in the Notes to the Financial Statement.

CODE OF CONDUCT:

The Board of Directors has approved a Code of Conduct which isapplicable to the Members of the Board and all employees in the course of day to daybusiness operations of the company. The Code has been placed on the Company's websitewww.lkpsec.com

The Code lays down the standard procedure of business conduct which isexpected to be followed by the Directors and the designated employees in their businessdealings and in particular on matters relating to integrity in the work place in businesspractices and in dealing with stakeholders.

All the Board Members and the Senior Management personnel haveconfirmed compliance with the Code.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company is committed to the high standards of Corporate Governanceand stakeholder responsibility.

The Company has established a vigil mechanism to be known as the‘Whistle Blower Policy' for its Directors and employees to report instances ofunethical behavior actual or suspected fraud or violation of the Company's Code ofConduct. The aim of the policy is to provide adequate safeguards against victimization ofwhistle blower who avails of the mechanism and also provide direct access to the Chairmanof the Audit Committee in appropriate or exceptional cases.

Accordingly ‘Whistle Blower Policy' has been formulated witha view to provide a mechanism for the Directors and employees of the Company to approachthe Chairman of the Audit Committee of the Company.

The purpose of this policy is to provide a framework to promoteresponsible and secure whistle blowing. It protects employees willing to raise a concernabout serious irregularities within the Company.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of InsiderTrading as amended from time to time with a view to regulate trading in securities by theDirectors and designated employees of the Company. The Code requires pre-clearance fordealing in the Company's shares and prohibits the purchase or sale of Company sharesby the Directors and the designated employees while in possession of unpublished pricesensitive information in relation to the Company and during the period when the TradingWindow is closed. The Board is responsible for implementation of the Code.

All Board Directors and the designated employees have confirmedcompliance with the Code.

INFORMATION PURSUANT TO SECTION 134(3) OF THE COMPANIES ACT 2013

The Statement of Disclosure of Remuneration under Section 197 ofCompanies Act 2013 and Rule 5(1) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 Annexed as "Annexure IV".

A statement showing the names of the top ten employees in term ofremuneration drawn and the name of every employee who was in receipt remuneration notless than the limits as set out in the Rule 5(2) and Statement of Particulars as per Rule5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 formspart of this report. However in terms of first proviso to Section 136(1) of the Act theAnnual Report and Accounts are being sent to the Members and others entitled theretoexcluding the aforesaid information. The said information is available for inspection bythe Members at the Registered Office of the Company during business hours on working daysand through electronic means. Further in terms of proviso to said Rule 5(3) suchparticulars shall be available to any shareholder on specific request made by him inwriting or e. mail to Company Secretary at lkpfininvestor. relations@lkpsec.com.

The prescribed particulars of Conservation of Energy TechnologyAbsorption do not apply to your Company. There are no foreign exchange earnings &outgo during the year under report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OFTHE COMPANY

There were no material changes and commitments affecting the financialposition of the Company from end of the financial year upto the date of this Board'sReport.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with a Certificate ofcompliance from the Practising Company Secretaries and Management Discussion and AnalysisReport forms part of this Report.

DISCLOSURES

• There are no significant and material orders passed by theregulators or courts or tribunals impacting the going concern status and theCompany's operations in future.

• During the year under review the Company has not issued anyDebentures.

• There is no change in the nature of business of the Company.

• Executive Chairman-Managing Director as per the terms of hisappointment does not draw any commission or remuneration from subsidiary company.Thereby no disclosure is required under Section 197(14) of the Act.

• Maintenance of cost records and requirement of cost Audit asprescribed under the provisions of Section 148(1) of the Act are not applicable to thebusiness activities carried out by the Company.

DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSEACCOUNT

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year Number of shareholders who approached listed entity for transfer of shares from suspense account during the year Number of shareholders to whom shares were transferred from suspense account during the year Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year
NIL NIL NIL NIL

Declaration that the voting rights on shares in the suspense accountshall remain frozen till the rightful owner of such shares claims the shares - NotApplicable

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013.

The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at the

Workplace (Prevention Prohibition & Redressal) Act 2013. InternalComplaints Committee (ICC) has been set up to redress complaints received regarding sexualharassment. All employees (permanent contractual temporary trainees) are covered underthis policy. The following is a summary of sexual harassment complaints received anddisposed-off during the year 2021-22.

• Number of complaints received: Nil

• Number of complaints disposed-off: Nil

• Number of complaints pending: Nil

ACKNOWLEDGEMENT

Your Directors would like to place on record their sincere appreciationto Shareholders Bankers Institutions and Employees for their cooperation and support.

For and on behalf of Board of Directors
(M. V. Doshi)
Place: Mumbai Executive Chairman & Managing Director
Date: May 05 2022 DIN: 00123243

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