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LKP Finance Ltd.

BSE: 507912 Sector: Financials
NSE: LKPMERFIN ISIN Code: INE724A01017
BSE 09:23 | 11 Aug 54.75 4.75
(9.50%)
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54.75

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54.75

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NSE 05:30 | 01 Jan LKP Finance Ltd
OPEN 54.75
PREVIOUS CLOSE 50.00
VOLUME 25
52-Week high 98.95
52-Week low 46.40
P/E
Mkt Cap.(Rs cr) 69
Buy Price 49.00
Buy Qty 1.00
Sell Price 54.00
Sell Qty 1.00
OPEN 54.75
CLOSE 50.00
VOLUME 25
52-Week high 98.95
52-Week low 46.40
P/E
Mkt Cap.(Rs cr) 69
Buy Price 49.00
Buy Qty 1.00
Sell Price 54.00
Sell Qty 1.00

LKP Finance Ltd. (LKPMERFIN) - Director Report

Company director report

The Directors present the Thirty Fifth Annual Report and Audited Accounts of theCompany for the year ended March 31 2019.

FINANCIAL RESULTS 2018 - 2019 2017 - 2018
(Rs. in lacs) (Rs. in lacs)
Profit before tax 2978.87 2103.62
Less: Tax expense for the year 633.00 350.00
Earlier Years -82.43 -
Deferred Tax 10.29 -08.22
MAT credit entitlement - 209.64
Profit after tax 2418.01 1971.48
Profit brought forward from previous year 2886.49 1309.31
Amount available for appropriation 5304.50 3280.79
APPROPRIATIONS:
Transfer to Special Reserve Fund 483.60 394.30
Dividend Paid- Final for 2017-2018 251.37 -
Dividend -Interim 377.06 -
Tax on Dividend 128.70 -
Balance carried to Balance Sheet 4063.77 2886.49

DIVIDEND

The Company paid an interim dividend during the financial year ended 31stMarch 2019 Rs. 3/- per equity share (30%) on the equity share capital in February 2019amounting to Rs. 37705869/- (exclusive of tax on dividend).

The Board of Directors did not recommend any final dividend on the Equity Shares andaccordingly the aforesaid payment of interim dividend shall be considered as dividend forthe Financial Year ended March 31 2019.

PERFORMANCE REVIEW

The Company's revenue from operation decreased to Rs. 1277.61 lacs from Rs. 7631.53lacs whereas Other Income increased to Rs. 3188.10 lacs from 238.09 lacs. Profit after taxincreased to Rs. 2418.02 lacs from Rs. 1971.48 lacs in the previous year.

EMPLOYEES STOCK OPTION - SHARE CAPITAL

Pursuant to Employees Stock Option Scheme 2010 the Company has allotted 147100equity shares during the year. Consequence to allotment of aforesaid shares Company'spaid-up Share Capital is increased to Rs. 1256 86230/- divided in to 12568623 equityshares of Rs. 10/- each.

The Scheme was administered by the Nomination and Remuneration Committee of the Boardof Directors. Disclosures under the Companies (Share Capital and Debentures) Rules 2014and Securities And Exchange Board of India (Share Based Employee Benefits) Regulations2014 is annexed to this report herewith as "Annexure A".

FIXED DEPOSITS

The Company has no public deposits as of date and will not accept any deposits withoutprior approval of the Statutory Authorities concerned.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations. The scope and authority of the Internal Auditors' functionis defined in their letter of engagement. To maintain its objectivity and independencethe Internal Audit function reports to the Chairman of the Audit Committee of the Board& to the Executive Chairman .

The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies of the Company. Significant audit observations and recommendationsalong with corrective actions thereon are presented to the Audit Committee of the Board.

SUBSIDIARY

As per the Circular No. 51/12/2007-CL-II[ dated 8th February 2011 issued byGovernment of India Ministry of Corporate Affairs the required financial information inthe consolidated balance sheet is given in respect of Company's subsidiaries i.e. GayatriCement and Chemical Industries Private Limited in Form AOC 1 annexed in Annual Report as"Annexure B".

The annual accounts of the aforesaid subsidiary and the related detailed informationshall be made available to shareholders of the Company seeking such information at anypoint of time. The annual accounts of the subsidiary company shall also be kept open forinspection by any shareholder at the Registered office at 203 Embassy Centre NarimanPoint Mumbai 400 021.

DIRECTORS

Mr. Pratik M. Doshi retires by rotation and being eligible offers himself forre-appointment. Your Directors recommend his reappointment.

Pursuant to section 149 and other applicable provisions of the Companies Act 2013your Directors are seeking re-appointment of Mr. Vineet N. Suchanti as IndependentDirectors for five consecutive years for a second term upto 31st March 2024.Detail of the proposal for re-appointment of Mr. Vineet N. Suchanti are mentioned in theExplanatory Statement under Section 102 of the Companies Act 2013 of the Notice of the 35thAnnual General Meeting.

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed in Section 149(6) ofthe Companies Act 2013.

During the year with effect from 7th December 2018 Mr. Sayanta Basu hasresigned from the Board of Directors of the Company. Board of Directors wish to place onrecord their sincere appreciation for valuable contribution to the Board during his tenureas the Director of the Company. The Board appointed Mr. Amitabh Chaturvedi as a NomineeDirector on behalf of Dakshin Mercantile Private Limited with effect from 7thDecember 2018.

The information on the particulars of the Directors proposed for re-appointment hasbeen given in the Notice of the Annual General Meeting.

Board Evaluation

Pursuant to the provisions of the Companies Act 2013 and provisions of Regulations ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulation 2015 the Board hascarried out an evaluation of its own performance the directors individually as well asthe evaluation of the working of its Audit Nomination & Remuneration Committees. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.

Remuneration Policy

The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. The Remuneration Policy is stated in the Corporate Governance Report.

Meetings

During the year seven Board Meetings and four Audit Committee Meetings were convenedand held. The details of which are given in the Corporate Governance Report. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors acknowledges the responsibility for ensuring compliance with theprovisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on March 31 2019 and state that :

i. in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures if any;

ii. the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

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

v. the Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and

vi. there is a proper system to ensure compliance with the provisions of all applicablelaws and that such systems are adequate and operating effectively.

STATUTORY AUDITORS:

M/s. MGB & Co. LLP Chartered Accountants Firm Reg. No. 101169W/W100035 Mumbairetire at the conclusion of the forthcoming Annual General Meeting. The Company hasreceived a

letter from them to the effect that their appointment if made would be within theprovision prescribed under Section 139 of the Companies Act 2013. Your Directorsrecommend their re-appointment.

SECRETARIAL AUDIT

Pursuant 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 V. R. Associates a firm of Company Secretaries in practice to undertake theSecretarial Audit of the Company. The Secretarial Audit report is annexed herewith as"Annexure C".

The Board of Directors affirm that the Company has complied with the applicableSecretarial Standards issued by the Institute of Companies Secretaries of India (SS1 andSS2) respectively relating to Meetings of the Board its Committees and the GeneralMeetings.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9 is annexedherewith as "Annexure D".

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The company has contributed funds for the promotion of education and environmentalsustainability etc. The contribution has been made to a registered trust which is mainlyundertakes activities specified under Schedule VII of the Companies Act 2013.

The report on CSR activities is annexed herewith as "Annexure E".

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of the business. There are nomaterially significant related party transactions made by the Company with Promoters KeyManagerial Personnel or other designated persons which may have potential conflict withinterest of the Company at large. The requisite details are given in Form AOC 2 is annexedherewith as ‘Annexure F'.

PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN OR SECURITY PROVIDED BYTHE COMPANY

Details of loans guarantees and investments covered under the provisions of Section186 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 is applicable to theMembers of the Board and all employees in the course of day to day business operations ofthe company. The Code has been placed on the Company's website www.lkpsec.com

The Code lays down the standard procedure of business conduct which is expected to befollowed by the Directors and the designated employees in their business dealings and inparticular on matters relating to integrity in the work place in business practices andin dealing with stakeholders.

All the Board Members and the Senior Management personnel have confirmed compliancewith the Code.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company is committed to the high standards of Corporate Governance and stakeholderresponsibility.

The Company has established a vigil mechanism to be known as the 'Whistle BlowerPolicy' for its Directors and employees to report instances of unethical behavior actualor suspected fraud or violation of the Company's Code of Conduct. The aim of the policyis to provide adequate safeguards against victimization of whistle blower who avails ofthe mechanism and also provide direct access to the Chairman of the Audit Committee inappropriate or exceptional cases.

Accordingly ‘Whistle Blower Policy' has been formulated with a view to provide amechanism for the Directors and employees of the Company to approach the Chairman of theAudit Committee of the Company.

The purpose of this policy is to provide a framework to promote responsible and securewhistle blowing. It protects employees willing to raise a concern about seriousirregularities within the Company.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading as amendedfrom time to time with a view to regulate trading in securities by the Directors anddesignated employees of the Company. The Code requires pre-clearance for dealing in theCompany's shares and prohibits the purchase or sale of Company shares by the Directors andthe designated employees while in possession of unpublished price sensitive information inrelation to the Company and during the period when the Trading Window is closed. The Boardis responsible for implementation of the Code.

All Board Directors and the designated employees have confirmed compliance with theCode.

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

The Statement of Disclosure of Remuneration under Section 197 of Companies Act 2013and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 Annexed as "Annexure G".

In terms of first proviso to Section 136 of the Act the Report and FinancialStatements are being sent to the Members and others entitled thereto excluding theinformation on employees' particulars as required pursuant to provisions of Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.In accordance with the provisions of Section 197 of the Act read with Rule 5(2) and 5(3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theannexure pertaining to the names and other particulars of employees is available forinspection at the Registered Office of the Company during the business hours on workingdays of the Company up to the date of the ensuing AGM. Any shareholder interested inobtaining a copy of the said Annexure may write to the Company Secretary & ComplianceOfficer in this regard.

The prescribed particulars of Conservation of Energy Technology Absorption do notapply to your Company. There are no foreign exchange earnings & outgo during the yearunder report.

MATERIAL EVENT

During the year under review a Share Purchase Agreement was Signed between thePromoters (as Seller) and Dakshin Mercantile Private Limited (as Acquirer-Essel Group) toacquire from Promoters minimum 6982434 (55.55%) equity shares and upto maximum 7792546(62%) Share Capital of the Company depending on number of Equity Shares tendered in theOpen Offer.

Consequent to the said agreement under Open Offer 3074410 (24.46%) equity shareswere validly tendered by the shareholders which has been acquired in 100% by the saidacquirer @ Rs. 198/- per share.

Promoter Mr. Mahendra V. Doshi later on intimated to the Company that the aforesaidShare Purchase Agreement could not concluded on part of Dakshin Mercantile Private Limiteddue to financial constraints of the Acquirer (Essel Group). Hence the said agreementbecame void.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There were no material changes and commitments affecting the financial position of theCompany from end of the financial year upto the date of this Board's Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements are furnished herewith and form part of thisReport and Accounts. These statements have been prepared on the basis of audited financialstatements received from the Subsidiary Company as approved by their Board of Directors.

CORPORATE GOVERNANCE

The Report on Corporate Governance along with a Certificate of compliance from thePractising Company Secretaries and Management Discussion and Analysis Report forms part ofthis Report.

ACKNOWLEDGEMENT

Your Directors would like to place on record their sincere appreciation toShareholders Bankers and Employees for their co-operation and support.

For and on behalf of the Board of Directors
Mumbai (M.V. Doshi)
Date: May 02 2019 Executive Chairman