lakshmi automatic loom works ltd share price Directors report

Your Directors submit their Forty Ninth Annual Report together with the Audited Balance Sheet as at 31st March, 2023, the Statement of Profit and Loss, the Statement of changes in Equity and the Cash Flow Statement for the year ended 31st March, 2023.

Financial Summary / Highlights

(Rs in lakhs)

	2022-23	2021-22
Sales and Other Income	1,424.52	1,321.41
Profit before Depreciation and Amortization Expenses	371.92	446.45
Depreciation and Amortization Expenses	98.49	94.31
	273.43	352.14
Add: Comprehensive Income	(-)0.88	(-)8.28
	272.55	343.86
Less: Tax Expense:
Current Tax	(-)43.10	(-)84.98
Deferred Tax	(-)17.56	(-) 7.10
Net Profit	211.89	251.78
Dividend paid during the year	(-) 66.87	-
Add: Balance from the Previous Year	390.39	138.61
Balance Carried Over	535.41	390.39

Dividend

For the Financial Year 2022-23, the Board of Directors at their meeting held on 25th May, 2023, have recommended a Dividend of Rs 10/- per share (10%) on the paid-up Share Capital of 6,68,750 Equity Shares of Rs 100/- each. Subject to the approval of Shareholders, an amount of Rs 66.87 Lakhs will be paid as Dividend after deducting applicable taxes (Previous Year - Rs 66.87 Lakhs).

Operations

The operations during the year have resulted in a Net Profit of Rs 272.55 lakhs after providing for depreciation and amortization expenses of Rs 98.49 lakhs. The Net Profit after Tax for the year is Rs 211.89 lakhs.

The Company has two revenue segments ie. a) Warehousing Rental Services - Unit 1 at Hosur Industrial Complex, Hosur - 635 126 and b) Engineering Services - Unit 2 at Pollachi Road, Coimbatore - 642 109.

Warehousing Rental Services - Unit 1

The Warehousing Rental Services segment consists of Warehousing Rental Income on Land and Buildings at Hosur.

The income generated from Warehousing Rental Services during the year was Rs 724.07 lakhs against Rs 768.77 lakhs in the previous year. The reduction was due to change of lease holders and subsequent time lag of almost three months for the new lease holders to occupy the premises.

Engineering Services - Unit 2

The Engineering Services segment consists of Manufacture and Sale of Accessories and Spares of Weaving and Knitting Machines, Parts and Accessories for Machine Tools and Spares for other Textile Machineries.

The revenue generated from the Engineering Services Division during the year was Rs 599.91 lakhs against Rs 456.89 lakhs in the previous year. Increase in export orders for Spares and Accessories of Weaving Machines and domestic orders for Parts with better product mix resulted in higher revenue.

Outlook

The available Building space of Unit 1 - Warehousing Rental Services, at Hosur is leased to corporate tenants. Further addition of 40,000 Sq ft Building is being taken up during the current Financial Year. The construction will commence on receipt of Building Plan approval from the Government Authorities.

Steps have been taken to increase supply of Spares and Accessories of Weaving & Textile Machines to overseas and domestic consumers by identifying new supply areas during the Financial Year 2023-24. The increase in input cost may have an adverse effect on the profit margin.

Share Capital

The paid up Equity Share Capital as on March 31, 2023 is Rs 668.75 lakhs comprising of 6,68,750 Equity Shares of Rs 100/- each. During the year under review, the Company has not issued any shares or any convertible instruments.

Deposits

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013.

Annual Return

Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company is available in the Companys website at www.lakshmiautomatic.com

Meetings of the Board and its Committees

Four Meetings of the Board of Directors were held on 26.05.2022, 10.08.2022, 14.11.2022, and 10.02.2023, during the Financial Year from 1st April, 2022 to 31st March, 2023. The intervening gap between the Meetings is within the period prescribed under the Companies Act, 2013.

Details of Attendance of Directors at the Meetings of the Board and its Committees during the Financial Year ended 31st March, 2023 are as below:

Sl. No.	Name of Directors	Board Meetings attended	Audit Committee Meetings attended	Nomination & Remuneration Committee Meeting attended	Stakeholders Relationship Committee Meeting attended	Last AGM attended (Yes/ No)
1	Sri S.Pathy	4	-	-	-	Yes
2	Smt.Aishwarya Pathy	4	-	1	-	Yes
3	Sri R.Santharam	4	4	1	1	Yes
4	Sri R.C.H.Reddy	4	4	1	1	Yes
5	Sri R.Varadarajan	4	4	1	-	Yes
6	Sri C.Kamatchisundaram	4	-	-	-	Yes
7	Sri N.Jayachandar	4	-	-	1	Yes
8	Sri R.R.Balasundharam	4	4	-	-	Yes
9	Sri Pradip Roy	4	-	-	-	Yes

Audit Committee

The Independent Audit Committee constituted consists of three Independent Directors and one Non-Executive Director as its Members as below.

1.	Sri R.C.H.Reddy	Chairman	Independent Director
2.	Sri R.Santharam	Member	Non Executive Director
3.	Sri R.Varadarajan	Member	Independent Director
4.	Sri R.R.Balasundharam	Member	Independent Director

The Company Secretary is the Secretary of the Audit Committee.

Four Committee Meetings were held during the Financial Year ended 31st March, 2023 on 26.05.2022, 10.08.2022, 14.11.2022, and 10.02.2023. The Statutory Auditors, Internal Auditors, the Chief Executive Officer and the Chief Financial Officer attend the Audit Committee Meetings on invitation.

Nomination and Remuneration Committee

The Committee has been set up as below with four Directors as Members of which two Members are Independent Directors.

1.	Sri R.C.H.Reddy	Chairman	Independent Director
2.	Sri R.Santharam	Member	Non Executive Director
3.	Smt Aishwarya Pathy	Member	Non Executive Director
4.	Sri R.Varadarajan	Member	Independent Director

The Company Secretary is the Secretary of the Committee.

The Committee has met once during the Financial Year ended 31st March, 2023 on 10.02.2023.

Nomination and Remuneration Policy

The Board on the recommendation of the Nomination & Remuneration Committee framed a Policy for selection and appointment of Directors and Key Managerial Personnel and approve their remuneration in terms of Section 178(3) of the Companies Act, 2013. The Nomination and Remuneration Policy as approved by the Board is disclosed on the Companys website at the Link at: http://www.lakshmiautomatic.com/investors/policies/nomination-and- remuneration-policy/ in terms of the proviso to Section 178(4) of the Companies Act, 2013.

Salient Features of the Policy include:

• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

• To determine remuneration based on the Companys size and financial position and trends and practices on remuneration prevailing in peer Companies, in the manufacturing sector.

• To carryout evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.

• To compensate them to their effort, performance, dedication and achievement relating to the Companys operations.

• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons.

• To lay down such other functions as may be necessary as appropriate for the performance of the Directors.

Annual Performance Evaluation

The Nomination and Remuneration Committee has laid down the criteria and the manner for effective evaluation of the performance of the Board, its Committees and individual Directors for the Financial Year 2022-23. Accordingly, a peer evaluation excluding the Director evaluated was carried out by the Board on 10.02.2023. By a questionnaire circulated, each Board Member was requested to give his/her views in evaluation of the Company performance, strategy and the performance of the Board, its Committees and individual Directors. Some of the performance parameters on which the Independent Directors were evaluated include Contribution, Commitment, Initiative, Integrity, Independence, Independent Views and Judgment, Fulfillment of Functions, Qualifications, Knowledge, Experience and Competency and Role in active participation in Board and Committee Meetings.

The Independent Directors at their Meeting held on 10.02.2023 reviewed the performance of Non-Independent Directors, the Board and the Chairperson of the Company.

The performance of the Key Managerial and Senior Management Personnel of the Company was evaluated based on their Qualifications, Experience and the Duties and Responsibilities carried out by them.

Directors Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company state that:

a) in the preparation of the Annual Accounts for the year ended 31st March 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departure, if any;

b) the Directors had 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 31st March 2023 and of the profit of the Company for the year ended 31st March 2023;

c) the Directors had 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;

d) the Directors had prepared the Annual Accounts for the Financial Year ended 31st March 2023 on a going concern basis.

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f) 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.

Declaration by Independent Directors

The Company has received declaration from all the Independent Directors of the Company in terms of Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet with the criteria of independence as prescribed under sub Section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Auditors Report

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors, M/s.Subbachar & Srinivasan, Chartered Accountants, (Membership No.004083S) in the Auditors Report on the financial statements for the year ended 31-03-2023.

Secretarial Auditor

The Board has appointed Mr.M.R.L.Narasimha, Practicing Company Secretary, (Membership No.2851, COP 799) to conduct Secretarial Audit for the Financial Year 2022-23. The Secretarial Audit Report for the Financial Year ended March 31, 2023 is annexed to this Report as Annexure 1. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

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.

Related Party Transactions

All Related Party Transactions entered into during the Financial Year were on arms length basis in the ordinary course of business. No materially significant Related Party Transactions other than the acquisition of Industrial Buildings comprising of Land at Tirupur with the consent of the members at the EGM held on 12.12.2023 were entered into 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 Companys website at the link at www.lakshmiautomatic.com/investors/ policies/related-party-transaction-policy/

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.

Corporate Social Responsibility

Your Company is not coming under the purview of the Corporate Social Responsibility under Section 135 of the Companies Act, 2013.

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 the ensuing Annual General Meeting.

There were no other changes in the Key Managerial Personnel (KMP) during the year.

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 Boards Report.

Internal Financial Controls

The Company has in place adequate Internal Financial Controls with reference to financial statements. The Internal Audit objectives, scope, functioning, periodicity and methodology is defined in the Internal Audit Programme. The quarterly Internal Audit Report is placed before the Audit Committee of the Board. The Internal Auditors monitor the adequacy of Internal Control Systems, Accounting Procedures and Policies of the Company and corrective actions based on the observations are taken wherever necessary. During the year, such controls were reviewed and no reportable material weakness in the system or operation was observed by the Audit Committee.

Auditors

M/s. Subbachar & Srinivasan, Chartered Accountants, had been appointed as the Statutory Auditors of the Company for a second term of five Financial Years, commencing from 2022-23 to 2026-2027 at the 48th Annual General Meeting held on 10th August 2022.

The Company has received a Certificate from the Statutory Auditors to the effect that their continued appointment as the Statutory Auditors of the Company, would be within the limits prescribed under Section 139 of the Companies Act, 2013.

Report on Corporate Governance and Management Discussion and Analysis

The report on Management Discussions and Analysis (Annexure 3) forms part of the Annual Report.

Pursuant to Regulation 15(2)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the compliance with the Corporate Governance provisions as specified in Regulations 17 to 27 and Clauses (b) to (i) and (1) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V shall not apply to the Company. Hence the reporting on Corporate Governance in a separate section is not furnished. The Certificate from the Auditors of the Company to this effect is furnished as Annexure 4 to the Annual Report. However, as a good Corporate Governance practice the Company is implementing the Corporate Governance Provisions and shall report the same in the Annual Report when it becomes applicable to the Company.

Vigil Mechanism

The Company has adopted the Vigil Mechanism / Whistle Blower Policy for Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or ethics policy. No personnel is denied access to the Audit Committee. No protected disclosures were received by the Nodal Officer during the year ended 31st March, 2023.

A copy of the Vigil Mechanism / Whistle Blower Policy is posted on the Companys website at www.lakshmiautomatic. com

Disclosure under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were received during the year under review.

Demat Suspense Account / Unclaimed Suspense Account

The Shares remained unclaimed were transferred to the Unclaimed Suspense Account. The details of the said Shares in Demat Suspense Account of the Company were:

Sl. No.	Particulars	No. of Shareholders	No. of Shares of Rs 100/- each
(a)	Aggregate Number of Shareholders and the outstanding Shares held in Demat Suspense Account lying at the beginning of the year.	16	16
(b)	Aggregate Number of Shareholders and the outstanding Shares in the Suspense Account lying at the end of the year.	16	16
(c)	The Voting Rights on these Shares shall remain frozen till the rightful owner of such Shares claims the Shares.	16	16
(d)	Number of Shareholders who approached the Company for transfer of Shares from Suspense Account during the year.	Nil	Nil
(e)	Number of Shareholders to whom Shares were transferred from Suspense Account during the year	Nil	Nil

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 (Accounts)Rules, 2014 is appended hereto.

Your Directors state that no disclosure or reporting is required in respect of the following items during the year under review as the Company has neither accepted Deposits from the public nor issued any differential right shares and shares (including Sweat Equity Shares) to the employees of the Company:

1. Details relating to Deposits from the Public covered under Chapter V of the Companies Act 2013: Not applicable

2. Issue of Equity Shares with differential rights as to dividend, voting or otherwise in terms of Section 43 and 47 of the Companies Act 2013 and the Rules made there under: Not applicable

3. Issue of shares (including Sweat Equity Shares) to employees of the Company under any scheme: Not applicable Your Directors further state that during the year under review:

1. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

2. 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.

3. The Annual Listing Fees for the year 2023-24 has been paid by the Company to BSE Limited.

4. No penalty or strictures have been imposed on the Company by the Capital Market Authorities for noncompliance of law, during the last three years.

	By Order of the Board
	(Sd.) S.PATHY
Place : Coimbatore	Chairman
Date : 25-05-2023	DIN No.00013899