<dhhead>DIRECTORS’ REPORT</dhhead>
To
The Members of
Lakshmi Finance & Industrial Corporation Limited
The Board of Directors are pleased to present the Company’s
Ninety Nineth Annual Report and the Company’s Audited Financial Statements for the
financial year ended March 31, 2023.
1). FINANCIAL PERFORMANCE
The summarized financial results of the Company for the
financial year ended March 31,2023 are presented below:
Particulars |
2022-23 |
2021-22 |
Gross Income |
360.03 |
796.91 |
Profit/(Loss) before Depreciation and Tax |
31.97 |
640.28 |
Depreciation |
14.24 |
14.78 |
Profit/(Loss) for the year before taxation |
17.73 |
625.50 |
Provision for Taxation |
39.00 |
58.00 |
Profit/(Loss) after tax |
(21.27) |
567.50 |
Prior year taxes |
4.03 |
0.02 |
Net Profit/(Loss) after Tax |
(25.30) |
567.48 |
Deferred tax |
66.35 |
3.21 |
MAT Credit Entitlement |
14.00 |
- |
Profit/(Loss) for the year after Tax |
55.05 |
570.69 |
Profit brought Forward |
1,354.87 |
994.18 |
Total Profit available for appropriation |
1,409.92 |
1,564.87 |
Dividend pertaining to previous year paid during the year |
90.00 |
90.00 |
Corporate Dividend Tax |
- |
- |
Transfer to Reserve Fund (per RBI Guide Lines) |
12.00 |
120.00 |
Balance carried over to Balance Sheet |
1,307.92 |
1,354.87 |
2). OPERATIONAL PERFORMANCE:
The Indian economy appears to have moved on after
its encounter with the pandemic, staging a full recovery in FY22 ahead of many nations and
positioning itself to ascend to the pre-pandemic growth path in FY23. Yet in the current
year, India has also faced the challenge of reining in inflation that the European strife
accentuated. Measures taken by the Government and RBI, along with the easing of global
commodity prices, have finally managed to bring retail inflation below the RBI upper
tolerance target in November 2022. However, the challenge of the depreciating
rupee, although better performing than most other currencies, persists with the likelihood
of further increases in policy rates by the US Fed. The widening of the CAD may also
continue as global commodity prices remain elevated and the growth momentum of the Indian
economy remains strong. The loss of export stimulus is further possible as the slowing
world growth and trade shrinks the global market size in the second half of the current
year. Despite these, agencies worldwide continue to project India as the fastest-growing
majoreconomy at 6.5-7.0 per cent in FY23.
Despite the various challenges during the period,
the economy during the year, slowly started improving and with the stock market sentiment
improving, the Sensex which was at 58,568 as on 31.03.2022 with a marginal increase
(0.72%) in Sensex is settled at 58,992 as on 31.03.2023.
The Company recorded Gross Income reduced to .360.03
lakhs as compared to .796.91 lakhs in the previous year. Profit after tax stood at
.55.05 lakhs after providing current year tax
provision of .39 lakhs as compared to Profit after tax of .570.69 lakhs in the
previous year. The performance during the year ended 31.03.2023 was lower mainly on
account of sluggish Stock Market conditions and decrease in valuation of investments. The
rental incomes have been on expected basis. The Company continues to actively and closely
monitor its portfolio investments in mutual funds and equity shares cautiously and
optimistic about the Indian economy outlook to generate optimum returns by way of capital
appreciation and periodic dividend returns.
3) . DIVIDEND:
Your Company has a dividend policy that, inter alia balances the
objectives appropriately rewarding shareholders and retaining capital in order to fund
future growth. It has a consistent track record of dividend distribution to Company
Shareholders. In recognition of the overall performance during the year under review, your
Directors are pleased to recommend a dividend at the rate of 20% (i.e., . 2/- per Equity
Share of .10/- each) for the financial year 2022-23 as against 30% dividend rate in the
previous year. The proposed dividend, if approved at the 99th Annual General Meeting by
the Members, will be paid to all those Equity Shareholders whose names appear in the
Register of Members as on 01.08.2023 and also to those whose names appear as beneficial
owners as furnished by the National Securities Depository Limited and Central Depository
Services (India) Limited. The Company has not appropriated proposed dividend from
Statement of Profit and Loss for the year ended March 31, 2023. The outflow on account of
the dividend payout would be .60 lakhs.
UNPAID/UNCLAIMED DIVIDEND:
In terms of the provisions of Investor Education and Protection
Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 and Rules, 2001, unpaid/
unclaimed dividend amount of .12,17,859/- was transferred to Investor Education and
Protection Fund on 14.10.2022 pertaining to the financial year 2014-15.
4) . TRANSFER TO RESERVES:
The Company proposed to transfer a sum of .12 lakhs i.e 20% of
its Net Profit for the year 2022-23 to Reserve Fund in terms of Sec 45-1c of the RBI Act,
1934.
5) . DETAILS OF SUBSIDIARIES, ASSOCIATES AND
JOINT VENTURES:
Your Company does not have any subsidiaries, associates and
joint ventures.
6) . DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONAL
WHO WERE APPOINTED OR HAVE RESIGNED DURING THE YEAR:
Sri.K.Kapil Prasad, Director of the Company retires at the
ensuing Annual General Meeting and being eligible offers himself for re-appointment.
As the term of appointment of Sri.K.Harishchandra Prasad,
Managing Director expires on 31.03.2023, the Nomination & Remuneration Committee and
the Board of Directors recommended the re-appointment of Sri K.Harishchandra Prasad for
another 3 years w.e.f 01.04.2023 as per the terms / conditions mutually agreed upon.
Special Resolution in this regard is included in the AGM Notice.
tyle=margin-bottom:6.0pt;text-align:justify;tab-stops:
13.5pt>7) . DECLARATIONS GIVEN BY INDEPENDET DIRECTORS:
All Independent Directors have given declarations that they meet
the criteria of Independence as laid down under Section 149 of the Companies Act, 2013 and
Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
which have been relied on by the Company and were placed at the Board Meeting held on May
30, 2023.
8) . EVALUATION OF THE BOARD’S PERFORMANCE:
In compliance with the Companies Act, 2013 and Regulation 17(10)
of SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the
performance evaluation of the Board was carried out during the year under review.
The Board has a formal mechanism for evaluating Board’s
performance and as well as that of its Committees and Individual Directors, including the
Chairman of the Board based on the criteria laid down by Nomination and Remuneration
Committee which included attendance, contribution at the meetings and otherwise,
Independent judgment, safeguarding of minority shareholders interest, adherence to Code of
Conduct and Business ethics, monitoring of regulatory compliance, risk assessment and
review of Internal Control Systems etc.
9) . POLICY ON DIRECTOR’S APPOINTMENT AND REMUNERATION
AND OTHER DETAILS:
The Company follows a policy on remuneration of Directors and
Senior Management Employees. The Policy is approved by the Nomination and Remuneration
Committee and the Board. More details on the same are given in the Corporate Governance
Report.
10) . NUMBER OF BOARD MEETINGS HELD:
The Board of Directors duly met 4 times during the
Financial Year from 1st April, 2022 to 31st March, 2023. The dates
on which the meetings were held are as follows:
26th May, 2022, 4th August, 2022, 9th
November, 2022 and 10th February, 2023.
11) . AUDIT COMMITTEE
The details pertaining to composition and term of reference of
the Audit Committee Members, dates of meeting held and attendance of the Directors are
given separately in the Corporate Governance Report, which forms part of this report.
12) . LISTING OF COMPANY’S SHARES:
The Company’s shares are listed at The National Stock
Exchange of India Limited (NSE) w.e.f. 15.04.2015 and the Annual Listing Fees for the year
2023-24 have been paid. The Company’s shares are listed and traded at NSE with ISIN
code ‘INE 850E01012’ and Stock Code is ‘LFIC’ with
effect from 15.04.2015.
13) . DEMATERIALISATION OF SHARES:
Your Company shares have been made available for
dematerialization through the National Securities Depository Limited (NSDL) and Central
Depository Services (India) Limited (CDSL). As on 31st March 2023, 80.55% of
the shares in your Company have been dematerialized.
14. UN PAID /UN CLAIMED DIVIDEND:
In terms of the provisions of the Companies Act, the Company is
obliged to transfer dividends which remain unpaid or unclaimed for a period of seven years
from the declaration to the credit of the Investor Education and Protection Fund
established by the Central Government. Accordingly, the Members are hereby informed that
the 7 years period for payment of the dividend pertaining to financial year 2015-2016 will
expire on September 17th, 2023 and thereafter the amount standing to the credit
in the said account will be transferred to the “Investor Education and Protection
Fund” ofthe Central Government.
15). AUDITORS:
i). Statutory Auditors:
At the Annual General Meeting held on 28.09.2022, M/s. Brahmayya
& Co., Chartered Accountants, Hyderabad were appointed as Statutory Auditors of the
Company to hold the office for a period of 5 years commencing from the conclusion of 98th
Annual General Meeting till the conclusion of 103rd Annual General Meeting.
The Auditors’ Report for F.Y. 2022-23 does not contain any
qualifications. The Auditors’ Report is enclosed with the Financial Statements in
this Annual Report.
ii) . Internal Auditors:
M/s M. Bhaskara Rao & Co., Chartered Accountants, Hyderabad
perform the duties of Internal Auditors of the Company and their reports are reviewed by
the Audit Committee from time to time.
iii) . Secretarial Auditors:
According to the provisions of section 204 ofthe Companies Act,
2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Secretarial Audit Report submitted by Smt. N. Madhavi, Company
Secretary in Practice is enclosed as a part of this report.
16) . DETAILS IN RESPECT OF ADEQUACY OF INTERNAL
FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Company has in place proper and adequate internal control
systems commensurate with the nature of its business, and size and complexity of its
operations. Internal control systems comprising of policies and procedures designed to
ensure reliability of financial reporting timely feedback on achievement of operational
and strategic goals, compliance with policies procedure, applicable laws and regulations,
and that all assets and resources are acquired are used economically.
17) . DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act, 2013, your
Directors confirm that to the best of their knowledge and belief and according to the
information and explanation obtained by them.
i. In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation relating to material
departures.
ii. Such accounting policies as mentioned in the notes to the
financial statements have been selected and applied consistently and judgments and
estimates that are reasonable and prudent made so as to give a true and fair view of the
state of affairs of the Company at the end of the financial year 2022-23 and of the
statement of Profit or Loss of the Company for that period.
iii. Proper and sufficient care has been taken 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 annual accounts for the year 2022-23 have been prepared
on a going concern basis.
v. That the proper internal financial controls were in place and
that the financial controls were adequate and were operating effectively.
vi. That systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and effectively mentioned under various
heads of the departments which are in then reporting to the Managing Director.
18) . PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS:
The Company has not given Loans, Guarantees and Investments
covered under the provisions of section 186 ofthe Companies Act, 2013
19) . PUBLIC DEPOSITS:
Your Company has not accepted any deposits from the public
during the year under review and there are no outstanding deposits as on 31st
March 2023. Further, the Company is registered with RBI as a “Non-Banking
Financial Institution without accepting public Deposits”.
20) . CHANGE IN NATURE OF BUSINESS:
There is no change in the nature of business during the year
under review.
21) . VIGIL MECHANISM :
In pursuant to the provisions of section 177(9) & (10) of
the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine
concerns has been established. The Vigil Mechanism Policy has been uploaded on the website
of the Company at www.lakshmifinance.ora.in.
22) . RELATED PARTY TRANSACTIONS :
Related party transactions that were entered during the
financial year were on an arm’s length basis and were in the ordinary course of
business. There were no materially significant related party transactions with the Company’s
Promoters, Directors, Management or their relatives, which could have had a potential
conflict with the interests of the Company. Transactions with related parties entered by
the Company in the normal course of business are periodically placed before the Audit
Committee for its omnibus approval and the particulars of contracts entered during the
year as per Form AOC-2 is enclosed as Annexure-I.
The policy on related party transactions as approved by the
Board is uploaded on the website of the Company at www.lakshmifinance.ora.in.
23) . EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in
form MGT-9 is annexed herewith as “Annexure-N” to this report,
24) . MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
In terms of the provisions of Regulation 34 of the Securities
and Exchange Board of India, (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Management’s discussion and analysis is set out in this Annual
Report.
25) . CORPORATE GOVERNANCEAND SHAREHOLDERS INFORMATION:
Your Company has taken adequate steps to adhere to all the
stipulations laid down in the Listing Regulations. A report on Corporate Governance is
included as a part of this Annual Report. Certificate from the Statutory Auditors of the
Company M/s. Brahmayya & Co., Chartered Accountants confirming the compliance with the
conditions of Corporate Governance as stipulated under Listing Regulations is included as
a part of this report.
26) . CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO:
Information required under section 134(3)(m) read with Rule, 8
of the Companies (Accounts) Rules, 2014, of the Companies Act, was not given as the same
is not applicable owing to the nature of activities in foreign Currency is Nil.
27) . CORPORATE SOCIAL RESPONSIBILITY (CSR) :
In terms of section 135 and Schedule VII of the Companies Act,
2013, the Board of Directors of your Company has constituted a CSR Committee w.e.f
25.05.2015. The Committee Comprises of three Independent Directors and one Non-Independent
Director, namely Sri.R.Surender Reddy, Sri.Keshav Bhupal, Sri.Kapil Bhatia and
Sri.K.Harishchandra Prasad, Managing Director. CSR Committee of the Board developed a CSR
Policy and the functions of Committee include review of CSR initiatives undertaken by the
Company, formation and recommendation to the Board of a CSR policy indicating the
activities to be undertaken by the Company and recommendation of the amount of the
expenditure to be incurred for such activities. However, during the year under review
Section 135 of the Companies Act, 2013, relating to the Corporate Social Responsibility is
not applicable to the Company and hence the same is not adopted.
28) . REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL
PERSONNEL (KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule
5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and
Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company
and Directors is given in Annexure-lll
29) . MATERIAL CHANGES AND COMMITMENTS:
Pursuant to the provisions Sec.134 (3) (I) of the Companies Act,
2013, there were no material changes and commitments which affects the financial
statements of the Company during the year under review.
30) . RISK MANAGEMENT COMMITTEE:
The Board of Directors of the Company has formed a Risk
Management Committee to frame, implement and monitor the risk management plan for the
Company. The Committee is responsible for reviewing the risk management plan and ensuring
its effectiveness. The Audit Committee has additional oversight in the area of financial
risks and controls. Major risks identified by the business and functions are
systematically addressed through mitigating actions on a continuing basis. The details of
Risk Management Committee and its composition is given in the Corporate Governance Report
which form part of this report.
31) . SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS
OR COURTS:
There are no significant material orders passed by the
Regulators/Courts which would impact the going concern status of the Company and its
future operations.
32) . 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 with the requirements of The Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal)Act, 2013. Internal Complaints Committee (ICC)
has been set up to redress complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary, trainees) are covered under this policy.
The following is a summary of sexual harassment complaints
received and disposed off during each Financial Year:
No. of complaints received: |
Nil |
No. of complaints disposed off: |
Nil |
33). ACKNOWLEDGEMENTS:
Directors take this opportunity to express their thanks to
various departments of the Central and State Government, Banks and Shareholders for their
continued support and guidance.
The Directors wish to place on record their appreciation for the
dedicated efforts put in by the Employees of the Company at all levels.
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