Report of the Board of Directors to the Shareholders Your Directors submit their Forty First Annual Report together with the Audited Balance Sheet as at 31st March, 2015 and the Statement of Profit and Loss for the year ended 31st March, 2015. Operations The operations during the year have resulted in a net profit of Rs.332.91 lakhs after providing for depreciation of Rs.38.73 lakhs. Weaving Machinery and Spares The sale of Accessories and Spares of Weaving Machines during the year was Rs.105.15 lakhs against Rs.129.75 lakhs in the previous year. Due to lack of orders, there was no production of weaving machines during the year. The income generated on utilisation of the idle Assets of the Company during the year was Rs.317.98 lakhs against Rs.300.17 lakhs in the previous year. Other Engineering Services The sale of Parts and Accessories for Machine Tools during the year was Rs.250.15 lakhs against Rs.173.07 lakhs in the previous year. The export market for Parts and Accessories for Machine Tools is highly competitive and the inflow of orders is fluctuating from year to year. Outlook The company's discussion with a reputed foreign machinery manufacturer for manufacture of Rapier and Airjet Weaving Machines is in the final stage. Dividend No dividend on the Preference and Equity shares for the year has been recommended on account of carried over previous losses. Share Capital The total paid up Share Capital as on March 31, 2015 is Rs. 1460.40 lakhs comprising of Equity Capital of Rs.610.40 lakhs and 6% Cumulative Redeemable Preference Shares of Rs.850.00 lakhs. During the year under review the company has not issued any shares or any convertible instruments. Particulars of Loans, Guarantees or Investments: The company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. Deposits The Company has not accepted any deposit from public falling within the ambit of Section 73 of the Companies Act, 2013. Extract of Annual Return The Extract of Annual Return pursuant to the provisions of Section 92 of the Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in Form MGT-9 is furnished in Annexure 1 forming part of the Board's Report. Board and its Committees Meetings conducted during the year under review During the year under review five Meetings of the Board of Directors, four meetings of the Audit Committee, three meetings of the Nomination and Remuneration Committee and one meeting of the Stakeholder Relationship Committee were held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Directors Responsibility Statement as required under Section 134(5) of the Companies Act, 2013. Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 with respect to the Directors' Responsibility Statement, the Board of Directors of the Company confirm that: i) in the preparation of the annual accounts for the year ended 31 st March, 2015, the applicable Accounting Standards have been followed; ii) the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 st March, 2015 and of the profit of the Company for the year ended 31 st March, 2015; iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the 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 had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. vi) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Directors and Key Managerial Personnel Sri S.Pathy and Smt. Aishwarya Pathy, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. A brief profile of the Directors retiring by rotation and seeking re-election, is annexed to the Notice of Annual General Meeting. Sri V.B.Haribhakti, Independent Director owing to his advancing age has tendered his resignation of the Directorship on the Board of Directors of the Company with effect from 10.02.2015. The Board places on record their appreciation of the valuable services rendered by Sri V.B.Haribhakti and the co-operation extended by him as a Director and Member of the Audit Committee during the tenure of his office. The Board of Directors at their Meeting held on 20-05-2015 has appointed Sri R.R.Balasundharam as an Independent Director in the intermittent vacancy caused by the resignation of Sri V.B.Haribhakti, who will hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a Member proposing Sri R.R.Balasundharam for appointment as an Independent Director. In accordance with the provisions of Section 203 of the Companies Act, 2013 the Company has the following Key Managerial Personnel: Mr. A.Doraiswamy Chief Executive Officer Mr. K.P.Krishnakumar Chief Financial Officer Mr. R.Muthukumar Company Secretary The details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished in Annexure 2 forming part of the Board's Report. Declaration of Independent Directors The Company has received declaration from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub Section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchange. Annual Performance Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a separate exercise was carried out by the Board of Directors at their meeting held on 09.02.2015 to review the performance of the individual Directors without the presence of the Director who was evaluated on parameters such as level of engagement and contribution and independence of judgment, etc. The board also carried out annual performance evaluation of its Committees. The independent Directors of the Company at their meeting held on 09.02.2015 without the attendance of the non independent Directors and members of Management reviewed the performance of Non independent Directors and the Board as a whole and about the quality, quantity and timings of the flow of information between the Company Management and the Board that is necessary for the Board to efficiently and reasonably perform its duties. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a Policy for selection and appointment of Directors, Key Managerial Personnels and their remuneration. The Remuneration Policy as approved by the Board is furnished as Annexure 3 to this Report. Auditors M/s.N.R.Doraiswami & Co. Chartered Accountants, Statutory Auditors of the Companyare due to retire at the ensuing Annual General Meeting. As recommended by the Audit Committee, it is proposed to re-appoint M/s.N.R.Doraiswami & Co. as Statutory Auditors of the Company. The Members are requested to consider their appointment and may authorize the Board to fix their remuneration. M/s.N.R.Doraiswami & Co. (ICAI Regn. No. 000771S) have confirmed their appointment, if made, shall be in accordance with the provisions of Section 141 of the Companies Act, 2013. Secretarial Auditors The Board has appointed Mr.M.R.L.Narasimha, Practising Company Secretary, to conduct Secretarial Audit for the Financial Year 201415. The Secretarial Audit Report for the Financial Year ended March 31, 2015 is annexed to this Report (Annexure 4). The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Related Party Transactions All Related Party Transactions entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant Related Party Transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with the interest of the company at large. Hence Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 (2) of the Companies (Accounts) Rules 2014 is not applicable. The Policy on materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed on the Company's website at the link at <http://www.lakshmiautomatic.com> / investors / policies / related-party-transaction-policy/ Auditors' Report There are no qualifications in the Auditors' Report Report on Corporate Governance and Management Discussion and Analysis The Report on Management Discussions and Analysis (Annexure 5) and the Report on Corporate Governance (Annexure 6) along with the Auditors' Certificate of compliance on Corporate Governance form part of the Annual Report. Risk Management The Company has laid down the Risk Assessment and Minimisation Procedures and on evaluation by the Audit Committee are reviewed by the Board from time to time. Internal Financial Controls The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were reviewed and no reportable material weakness in the system or operation was observed. Vigil Mechanism The Company has a Whistle Blower Policy to deal with unethical or improper practice or violation of Companies Code of Business Conduct or concerns about unethical behavior, actual or suspected fraud or disclosure practices of the Company. No person is denied access to the Audit Committee. Corporate Social Responsibility Your Company is not coming under the purview of the Corporate Social Responsibility under Section 135 of the Companies Act, 2013 General Information with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies Rules, 2014 is appended hereto. Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: 1. Details relating to Deposits covered under Chapter V of the Act. 2. Issue of Equity Shares with differential rights as to dividend, voting or otherwise. 3. Issue of shares (including Sweat Equity Shares) to Employees of the Company under any scheme. 4. There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year under review and the date of this report. 5. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. 6. Your Directors further state that during the year under review, there were no complaints pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Acknowledgement Your Directors thank the Indian Bank for their continued support and Voltas Limited and Infocus Marketing and Services Limited for their services rendered during the year. By Order of the Board (Sd.) S. Pathy Chairman Coimbatore 06.08.2015 |