L G Balakrishnan & Bros Ltd
Directors Reports
DEAR SHAREHOLDERS,
Your Directors have pleasure in presenting their Sixty Seventh (67th)
Annual Report on the business and operations, along with the audited Financial Statements
of your Company (standalone and consolidated), for the year ended March 31, 2023.
FINANCIAL RESULTS
The key highlights of the Standalone and Consolidated Audited Financial
Statements of your Company for the Financial Year ended March 31, 2023, in comparison with
the previous Financial Year ended March 31, 2022, are summarized below:
| Particulars |
Consolidated |
Standalone |
|
31.03.2023 (Rs. in Lakhs) |
31.03.2022 (Rs. in Lakhs) |
31.03.2023 (Rs. in Lakhs) |
31.03.2022 (Rs. in Lakhs) |
| TOTAL INCOME |
2,22,554.84 |
2,11,412.90 |
2,10,822.36 |
2,01,771.53 |
| Profit before interest, depreciation & Tax |
40,608.37 |
40,051.76 |
39,475.15 |
38,753.19 |
| Less : Interest |
660.39 |
835.98 |
602.60 |
788.13 |
| Depreciation |
7,946.79 |
8,321.81 |
7,355.42 |
7,734.22 |
| PROFIT BEFORE TAX |
32,001.19 |
30,893.97 |
31,517.13 |
30,230.84 |
| Add : Exceptional items |
2,029.48 |
2,273.75 |
2,029.48 |
2,273.75 |
| Less : Provisions for Taxation |
|
|
|
|
| Current Income Tax / MAT |
8,705.75 |
8,741.88 |
8,684.91 |
8,741.88 |
| Current tax expenses relating to previous year |
- |
307.46 |
- |
307.46 |
| Deferred Tax (Credit / charge) |
92.12 |
(455.79) |
92.12 |
(455.79) |
| PROFIT AFTER TAX |
25,232.80 |
24,574.17 |
24,769.58 |
23,911.04 |
REVIEW OF OPERATIONS:
The Highlights of the Company's performance (Consolidated) for the
year ended March 31, 2023, are as under:
On consolidated basis, revenue from operations and other income for the
Financial Year under review were ' 2,22,554.84 Lakhs as against ' 2,11,412.90 Lakhs for
the previous Financial Year registering an increase of 5.27%. The profit before tax and
exceptional item was ' 32,001.19 Lakhs and the profit after tax, was ' 25,232.80 Lakhs for
the Financial Year under review as against ' 30,893.97 Lakhs and ' 24,574.17 Lakhs,
respectively for the previous Financial Year.
The Highlights of the Company's performance (Standalone) for the
year ended March 31, 2023, are as under:
On standalone basis, revenue from operations and other income for the
Financial Year under review were ' 2,10,822.36 lakhs as against ' 2,01,771.53 Lakhs for
the previous Financial Year registering an increase of 4.48%. The profit before tax and
exceptional item was ' 31,517.13 Lakhs and the profit after tax, was ' 24,769.58 Lakhs for
the Financial Year under review as against ' 30,230.84 Lakhs and ' 23,911.04 Lakhs,
respectively for the previous Financial Year.
TRANSFER TO RESERVES
The Company has transferred an amount of ' 20,000 Lakhs to the General
Reserves out of the amount available for appropriations and the remaining amount of '
10,851.47 Lakhs has been retained in the Surplus in Profit and Loss Account.
DIVIDEND
Based on Company's Performance and in terms of Dividend
Distribution Policy of the Company, the Board of Directors in its meeting held on April
29, 2023, has recommended a dividend of ' 16/- (i.e., 160%) per equity share having face
value of ' 10/- each amounting to ' 5,022.79 Lakhs for the Financial Year ended March 31,
2023, subject to the approval of the Members at the ensuing Annual General Meeting
(‘AGM') of the Company. The Dividend, if approved, will be paid to all those
Members whose names appears in the Register of Member as on the record date i.e. 18th
September, 2023.
Pursuant to the Finance Act, 2020, dividend income is taxable in the
hands of the Members w.e.f. April 1, 2020, and the Company is required to deduct tax at
source (TDS) from dividend paid to the Members at prescribed rates as per the Income-tax
Act, 1961.
According to Regulation 43A of the Listing Regulations, the top 1000
listed entities based on market capitalization, calculated as on 31st March of every
Financial Year are required to formulate a Dividend Distribution Policy which shall be
disclosed on the website of the listed entity and a weblink shall also be provided in
their Annual Reports. Accordingly, the Dividend Distribution Policy of the Company can be
accessed using the following link
https://www.lsb.co.in/wp-content/uploads/2021/09/LGB-Dividend-Distribution-Policy.pdf
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")
Pursuant to the provisions of the Companies Act, 2013 read with the
IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 as amended from time
to time ("the Rules"), all unpaid or unclaimed dividends are required to be
transferred by the Company to the IEPF Authority after the completion of seven years.
Further, according to the Rules, the shares on which dividend has not been paid or claimed
by the shareholders for seven consecutive years or more shall also be transferred to the
demat account of the IEPF Authority. Accordingly, the Company has transferred unpaid/
unclaimed dividend which remained unclaimed for a period of 7 years in respect of the
Financial Year 2015-2016 (2nd Interim) along with 4737 shares to the Investor Education
and Protection Fund (IEPF). The details are also available on the website of the Company,
https://www.lgb.co.in/investor-relations/transfer-of-shares-to-iepf/
SHARE CAPITAL
The authorised share capital of the Company as on 31st March 2023 was '
47,00,00,000/- comprising of 4,70,00,000 equity shares of ' 10/- each. The issued,
subscribed and paid-up equity share capital as on 31st March 2023, was ' 31,39,24,160/-
comprising of 3,13,92,416 equity shares of ' 10/- each.
There was no public issue, rights issue, bonus issue or preferential
issue, etc., during the year under review. The Company has not issued shares with
differential voting rights, sweat equity shares, neither has it granted any employee stock
options nor issued any convertible securities.
MEETINGS OF THE BOARD AND ITS COMMITTEES
The Board has met 4 times during the Financial Year 2022-23. The
details of the meetings of the Board and Committees thereof are provided in the Corporate
Governance Report, which forms part of this Integrated Annual Report. The Intervening gap
between the Meetings was within the period prescribed under the Act and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations").
INDEPENDENT DIRECTORS' Meeting
The Independent Directors have met on February 25, 2023, without the
attendance of Non-Independent Directors and Members of the Management. The Independent
Directors reviewed the performance of Non-Independent Directors, the Committees and the
Board as a whole along with the performance of the Chairman of the Company, taking into
account the views of Executive Directors and Non-Executive Directors and assessed the
quality, quantity and timeliness of flow of information between the Management and the
Board that is necessary for the Board to perform their duties effectively and reasonably.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the
provisions of all applicable Secretarial Standards and that such systems are adequate and
operating effectively. The Company has duly complied with Secretarial Standards issued by
the Institute of Company Secretaries of India on the meeting of the Board of Directors
(SS-1) and General Meetings (SS-2).
DIRECTORS & KEY MANAGERIAL PERSONNEL
DIRECTOR RETIRING BY ROTATION
Pursuant to the provisions of Section 152 of the Companies Act, 2013
and the Articles of Association of the Company, Sri. B. Vijayakumar (DIN: 00015583),
Executive Chairman and Smt. Rajsri Vijayakumar (DIN:00018244), Director, being longest in
the office, are liable to retire by rotation at the ensuing Annual General Meeting of the
Company in terms of the Articles of Association and being eligible, they have offered
themselves for reappointment. Necessary agenda for their re- appointment are included in
the Notice of AGM for seeking the approval of Members. The Board of Directors recommend
their re-appointment.
During the year, based on the recommendation of Nomination and
Remuneration committee and the approval of the Audit Committee and the Board of Directors,
the Shareholders of the Company has approved the following changes by means of passing
necessary special / ordinary resolution(s), as applicable, through postal ballot means on
December 18, 2022:
a. Sri. B. Vijayakumar (DIN: 00015583), who was Chairman and Managing
Director (Promoter) of the Company and who had expressed his desire to step-down as
Managing Director and who will attain the age of 70 years on January 22, 2023, was
re-designated as "Executive Chairman" of the Company for the remaining period of
his current tenure and approved the variation in the terms of payment of remuneration to
him, effective from January 01, 2023. (Special Resolution)
b. Approved the variation in the terms of payment of remuneration to
Sri.P.Prabakaran (DIN.01709564), Managing Director of the Company for the remaining period
of his tenure, effective from January 01, 2023. (Ordinary Resolution)
c. Sri. Rajiv Parthasarathy (DIN: 02495329), who was already the
Whole-time Director (designated as "Senior Vice President - Operations"), was
re-designated as "Executive Director" of the Company for the remaining period of
his current tenure and approved the variation in the terms of payment of remuneration to
him, effective from January 01, 2023. (Special Resolution)
Other than the above, there was no change in the composition of the
Board of Directors and Key Managerial Personnel of the Company.
KEY MANAGERIAL PERSONNEL
Pursuant to the provisions of Section 203 of the Act, the Key
Managerial Personnel of the Company are as given herein below:
| Sri. B. Vijayakumar (DIN: 00015583) |
Executive Chairman |
| Sri. P. Prabakaran (DIN: 01709564) |
Managing Director |
| Sri. Rajiv Parthasarathy (DIN: 02495329) |
Executive Director |
| Sri. N. Rengaraj |
Chief Financial Officer |
| Sri. M. Lakshmi Kanth Joshi |
Senior General Manager (Legal) & Company
Secretary. |
During the year under review, there has no change in Key Managerial
Personnel, except the changes mentioned herein above.
INDEPENDENT DIRECTORS' DECLARATION
All the Independent Directors have given declaration to the effect that
they meet the criteria of Independence as laid down under Section 149(6) of the Companies
Act, 2013 read with applicable Schedule and Rules issued thereunder and Regulation 25 of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 SEBI (Listing
Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021 and its
corrigendum, effective from 1st January, 2022 and that their name is included in the data
bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules,
2014 (as amended).
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY,
EXPERTISE AND EXPERIENCE (INCLUDING The PROFICIENCY) OF The INDEPENDENT DIRECTORS
APPOINTED DURING The YEAR
The Board of Directors have evaluated the Independent Directors during
the year 2022-23 and opined that the integrity, expertise and experience (including
proficiency) of the Independent Directors is satisfactory.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134(3) (c) read with Section 134(5) of the Act, the
Directors state that:
a) in the preparation of the annual accounts for the Financial Year
ended March 31,2023, the applicable accounting standards have been followed and there are
no material departures.
b) 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 your Company as at March 31, 2023
and of the profit of the Company for that period;
c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities.
d) the Directors have prepared the annual accounts 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; and
f) the Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND
OF INDIVIDUAL DIRECTORS
The Board has made a formal annual evaluation of its own performance
and its Committees and of every Individual Directors including the Independent Directors
of the Company. The Board's own performance was evaluated based on the criteria like
structure, governance, dynamics and functioning and review of operations, financials,
internal controls etc.
The performance of the Individual Directors including Independent
Directors were evaluated based on the evaluation criteria laid down under the Nomination
and Remuneration Policy and the Code of Conduct as laid down by the Board. Further, the
Independent Directors, at their separate meeting held during the year 2022-23, has
evaluated the performance of the Board as a whole, its Chairman and Non-Executive
Non-Independent Directors and other items as stipulated under Schedule IV of the Companies
Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015.
The Committees of the Board were evaluated based on the terms of
reference specified by the Board to the said Committee, frequency and effectiveness of
Committee meetings, quality of relationship of the Committee and the Management etc. The
Board of Directors were satisfied with the evaluation process which ensured that the
performance of the Board, its Committees, Individual Directors including Independent
Directors adheres to their applicable criteria.
NOMINATION AND REMUNERATION POLICY
Based on the recommendation of the Nomination and Remuneration
Committee, the Company has formulated and adopted the Nomination and Remuneration Policy
(‘NRC Policy') which inter alia provides the criteria for selection and
appointment of Directors, Senior Management, evaluation of the performance of the
Directors / Key Managerial Personnel / Senior Management and the remuneration payable to
them in accordance with the provisions of the Act read with the relevant Rules issued
thereunder and the Listing Regulations. The NRC Policy of the Company can also be accessed
on the Company's website at
https://www.lsb.co.in/wp-content/uploads/2022/07/Nomination-Remuneration-Policy.pdf. The
salient
features of the NRC Policy have been disclosed in the Corporate
Governance Report forming an integral part of this report.
ANNUAL RETURN
In compliance of Section 92 and Section 134 of the Act read with Rule
12 of the Companies (Management and Administration) Rules, 2014, the copy of the Annual
Return of the Company for the FY 2022-23 is available on the Company's website and
can be accessed at https://www.lgb.co.in/investor-relations/annual-return-mgt-7/
STATUTORY AUDITORS
As per Section 139 of the Companies Act, 2013, read with the Companies
(Audit and Auditors) Rules, 2014, the Members of the Company, at their 66th Annual General
Meeting (‘66th AGM') held on August 25, 2022, had approved the re-appointment of
M/s. Suri & Co, Chartered Accountants (Firm Registration No. 004283S), as the
Statutory Auditors of the Company to hold such office for a Second Term of Five
consecutive years from the conclusion of 66th AGM till the conclusion of 71st AGM.
Accordingly, no resolution for appointment of statutory auditors is included in the Notice
convening the 67th Annual General Meeting.
M/s. Suri & Co, Chartered Accountants have also confirmed that they
have subjected themselves to the peer review process of the Institute of Chartered
Accountants of India (ICAI) and hold a valid certificate issued by the Peer Review Board
of the ICAI. The Company has also obtained necessary consent under Section 139 and
eligibility certificate under Section 141 from the Statutory Auditors to the effect that
their appointment is in conformity with the provisions of the Companies Act, 2013.
EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE
REMARKS OR DISCLAIMERS MADE BY THE AUDITORS
The Report given by M/s. Suri & Co on the Financial Statements of
your Company for the Financial Year 2023 is part of the Annual Report. The Notes on the
Financial Statements referred to in the Auditor's Report are self-explanatory and do
not call for any comments. The Auditor's Report does not contain any qualification,
reservation, adverse remark or disclaimer.
details IN RESPECT OF frauds reported BY auditors under SECTION 143(12)
OF the companies act, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
During the year, the Auditors had not identified or reported any
instances of fraud under Section 143 (12) of the Act.
COST AUDITOR & MAINTENANCE OF COST RECORDS
The Company has made and maintained cost records as prescribed by the
Central Government under Section 148 of the Companies Act, 2013. In terms of the
provisions of Section 148 of the Act read with the Companies (Cost Records and Audit)
Rules, 2014, the Board of Directors of the Company had re-appointed Dr.G.L. Sankaran
(Membership No.4482), Cost Accountant as the Cost Auditor to conduct an audit of the cost
records of the Company for the year 2023-2024 and the remuneration payable to him, subject
to ratification by the Members by means of passing an Ordinary Resolution. As required
under the provisions of Section 148 of the Companies Act, 2013 read with Rule 14 of the
Companies (Audit and Auditors) Rules, 2014, necessary ordinary resolution seeking
Members' ratification for the remuneration payable to the Cost Auditor is included in
the Notice convening the 67th Annual General Meeting of the Company.
Further, the Cost Audit Report for the Financial Year 2022-2023 will be
filed with the Central Government in the prescribed form within the period stipulated
under the Companies Act, 2013.
SECRETARIAL AUDIT
Pursuant to Section 204 of the Companies Act, 2013, the Company has
obtained Secretarial Audit Report in the prescribed Form MR-3 from Mr. M. D. Selvaraj
(FCS: 960 / COP: 411), Managing Partner of M/s. MDS & Associates LLP (ICSI Peer Review
No.3030/2023), Company Secretaries, Coimbatore for the Financial Year ended 31st March,
2023 and the same is annexed herewith as ‘Annexure - A' to this Report. With
respect to the observations of the Secretarial Auditor of the Company in his report, your
Directors wish to state that necessary steps has been initiated to ensure compliance with
all applicable statutory requirements.
Further, the Board of Directors has appointed M/s. MDS & Associates
LLP (ICSI Peer Review No.3030/2023), Company Secretaries, Coimbatore as Secretarial
Auditors to carry out the Secretarial Audit for the Financial Year 2023-24 pursuant to
Section 204 of the Companies Act, 2013 read with the relevant Rules made thereunder and
the Listing Regulations.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY
During the Financial Year ended March 31, 2023, no loan or guarantee or
security falling under Section 186 of the Companies Act, 2013 were given by the Company.
The details of the investments made during the year under review and the investments made
in earlier years in compliance with Section 186 of the Act has been disclosed under the
relevant notes to standalone Financial Statements.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All the contracts/ arrangements / transactions made by the Company with
its related parties during the Financial Year under review were on arm's length basis
and in the ordinary course of business and were approved by the Audit Committee. Further,
during the reporting period, the Company has not entered into any contract / arrangement/
transaction with any related party which could be considered material in accordance with
the Company's Policy on Related Party Transactions, read with the Listing Regulations
and accordingly, the disclosure of material related party transactions in Form AOC-2 is
not applicable. However, the details of all transactions with related parties have been
disclosed in Notes to the Standalone Financial Statement forming an integral part of this
Annual Report.
Further, the Company has formulated a policy on related party
transactions for identification and monitoring of such transactions. The Policy on related
party transactions as recommended by the Audit Committee and approved by the Board can be
accessed on the Company's website at
https://www.l3b.co.in/wp-content/uploads/2023/08/
Policy-on-Materiality-of-Related-Party-Transaction-and-Dealins-with-Related-Party-Transaction.pdf
COVID-19
Apart from the protocols mandated by the Government in relation to
maintaining safe working environment amidst COVID-19 pandemic, your Company was
instrumental in conducting vaccination drive and continued collaboration with governmental
authorities in getting its employees vaccinated. The vaccination drive has immensely
helped in reducing the risk on the campus. Amongst a host of other mandatory protocols,
your Company actively engaged the employees by, imparting wellness training and awareness
to all employees about "Do's and Don'ts"; awareness board on the
COVID-19 information across the premises; building new protocols for third party entering
& exiting out of the campus; regular monitoring of health status of each infected
employee & their family Members; "Work from Home" facility for eligible
employees to reduce footfalls on the campus/ obviate risks for all; cross functional team
headed by the Plant Manager and EHS to review and monitor the systems and their adequacy
from time to time.
MATERIAL CHANGES AND COMMITMENTS OCCURRED, IF ANY, AFFECTING THE
FINANCIAL POSITION OF THE COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE
DATE OF REPORT
There have been no material changes and commitments, which affect the
financial position of the Company, having occurred since the end of the year and till the
date of Report.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO
The information on conservation of energy and technology absorption
stipulated under Section 134 (3) (m) of the Act read with Rule 8 of The Companies
(Accounts) Rules, 2014, is given in "ANNEXURE - B" forming part of this report.
RISK MANAGEMENT POLICY
The Company has adopted a Risk Management Policy which covers the risk
Management approach of the Company and includes collective identification of risks
impacting the Company's business and documents their process of identification,
mitigation and optimization of such risks. The Company has constituted a Risk Management
Committee in accordance with Regulation 21 of the Listing Regulations. The Risk Management
Policy adopted by the Company is available on the website of the Company and can be
accessed through the following weblink:
https://www.lsb.co.in/wp-content/uploads/2021/08/risk-manasement-policy.pdf
CORPORATE SOCIAL RESPONSIBILITY
Pursuant to Section 135 of the Act, the Company has constituted a
Corporate Social Responsibility Committee and has adopted a Corporate Social
Responsibility Policy. The requisite information has also been provided in the Corporate
Governance Report forming part of this Directors' Report. The CSR policy is available
on the website of the Company at
https://www.lsb.co.in/wp-content/uploads/2022/07/Corporate-Social-Responsibility-Policy.pdf.
The annual report on CSR activities as per Rule 8 of the Companies
(Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith as ANNEXURE - C
to this report.
FIXED DEPOSITS
As of 31st March 2023, the fixed deposits accepted by the Company from
public and shareholders aggregated to ' 1,396.15 Lakhs, which are within the limits
prescribed under the Companies Act, 2013 and the rules framed there under.
With the notification of applicable provisions of the Companies Act,
2013 governing deposits, with effect from 1st April 2014, the approval of shareholders was
obtained by the Company by way of Special Resolution at the Annual General Meeting held on
10.09.2015 for inviting/ accepting/ renewing deposits from Members and public.
The provisions of the Companies Act, 2013 also mandate that any Company
inviting/ accepting/ renewing deposits is required to obtain Credit Rating from a
recognized credit rating agency. Your Company has obtained a credit rating "ICRA
"AA"(stable) for its fixed deposit from ICRA.
The details relating to deposits covered under Chapter V of the 2013
Act are given here under:
| Amount of deposits as on 01.04.2022 |
1605.82 |
| Deposits accepted during the year |
48.50 |
| Deposits repaid during the year |
258.17 |
| Amount of deposits as on 31.03.2023 |
1396.15 |
| a. At the beginning of the year |
1605.82 |
| b. Maximum during the year |
1629.57 |
| c. At the end of the year |
1396.15 |
| Deposits remaining unpaid or unclaimed as at
the end of the year |
Nil |
| Whether there has been any default in
repayment of deposits or payment of interest thereon during the year and if so, number of
such cases and the total amount involved |
Nil |
| The details of deposits which are not in
compliance with the requirements of Chapter V of the Act |
Nil |
In accordance with Rule 16A of the Companies (Acceptance of Deposits)
Rules, 2014, the monies received from the Directors, if any, has been disclosed under
relevant notes to the Financial Statements.
significant and material orders passed by the regulators or courts or
tribunals impacting the going CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE
There are no orders passed by the regulators or courts or tribunals
impacting the going concern status and the Company's operations in future.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR
The Company has not made any application or any proceeding pending
under the Insolvency and Bankruptcy Code, 2016 ("IBC Code") during the Financial
Year and does not have any proceedings related to IBC Code.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME
OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR
FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF
The Company has not made any onetime settlement during the Financial
Year 2022-23 with Banks or Financial Institution and hence, the disclosure under this
clause is not applicable.
SETTING UP OF NEW MANUFACTURING PLANT AT ADDITIONAL BULTIBORI MIDC
INDUSTRIAL AREA-NAGPUR FOR MANUFACUTING OF POWER TRANSMISSION CHAINS AND RELATED PRODUCTS
FOR AUTO AND INDUSTRIAL APPLICATION UNDER MEGA PROJECT SCHEME.
During the year under review, the Company has commenced construction of
Factory on the allotment of Land at Additional Bultibori MIDC Industrial Area Nagpur for
establishment of New Manufacturing Plant for manufacturing of Power Transmission Chains
and related Products for Auto and Industrial Application under MEGA Project Scheme. The
commercial production in the new plant will start in Q3-Q4 of the FY 2023-2024.
ON-GOING ACQUISITION OF RSAL STEEL PRIVATE LIMITED
The Company has filed the Resolution Plan, dated 20th November 2020, as
last revised on 29th March 2021, ("Resolution Plan") for acquisition of RSAL
Steels Private Limited (RSAL) a Company currently undergoing Corporate Insolvency
Resolution Process (CIRP) under the provisions of the Insolvency and Bankruptcy Code 2016
(IBC) and the Committee of Creditor of RSAL (CoC) unanimously approved the Resolution Plan
by 100% on 7th May 2021 and pursuant to the approval of the Resolution Plan by the COC,
the Company has filed an application bearing reference IA No 1240 of 2021 on 13th May 2021
for the approval of the Resolution Plan by Hon'ble National Company Law Tribunal
Mumbai and the same is pending.
INTERNAL FINANCIAL CONTROLS
The Company has adequate Internal Financial Control systems in place
which are supplemented by an extensive Internal Audit Program conducted by an Independent
Professional Agency. The Internal Control system is designed to ensure that all financial
and other records are reliable for preparing Financial Statements and for maintaining
accountability of Assets. During the Financial Year, such controls were tested and no
reportable material deficiency in controls were observed.
DISCLOSURE UNDER SECTION 197(12) AND RULE 5 OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014
The requisite details relating to ratio of remuneration, percentage
increase in remuneration etc., as stipulated under Section 197(12) and Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed
as ANNEXURE-D to this Report.
Further, a statement showing the names and other particulars of top ten
employees in terms of remuneration drawn and of employees drawing remuneration in excess
of the limits required under Section 197(12) of the Act read with Rule 5(2) and Rule 5(3)
of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms
part of this Report.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Company has adequate Internal Financial Control systems in place
which are supplemented by an extensive internal audit program conducted by an independent
professional agency. The internal control system is designed to identify and help mitigate
risk and improve the Company's overall internal controls and to ensure that all
financial and other records are reliable for preparing Financial Statements and for
maintaining accountability of assets. During the Financial Year, such controls were tested
and no reportable material deficiency in controls were observed. Internal Financial
Controls are evaluated, and Internal Auditors' Reports are regularly reviewed by the
Audit Committee of the Board.
Statutory Auditors Report on Internal Financial Controls as required
under Clause (i) of Sub-Section 3 of Section 143 of the Companies Act, 2013 ("the
Act") is annexed with the Independent Auditors' Report.
SUBSIDIARY COMPANIES, JOINT VENTURE AND CONSOLIDATED FINANCIAL
STATEMENTS
As of March 31, 2023, the Company has three subsidiaries viz., LGB USA
INC, (Direct Overseas Subsidiary), GFM Acquisition LLC and GFM LLC (Step down overseas
subsidiaries) in USA. The Company does not have any joint ventures or associate companies
during the reporting period.
ACCOUNTS OF SUBSIDIARIES
In accordance with Section 129(3) of the Act read with rules made
thereunder, a statement containing salient features of the financial position of
Subsidiaries is given in Form AOC-1 attached as an "ANNEXURE E" forming integral
part of this Report. As required under Section 134 of the Act, the said form also
highlights performance of the subsidiaries.
Further, in accordance to the provisions of Section 136(1) of the Act,
the Annual Report of the Company, containing therein audited Financial Statements of the
Company and also the Financial Statements of subsidiary Company have been placed on the
website of the Company at
https://www.lsb.co.in/wp-content/uploads/2023/08/Subsidiary-Financials-2022.pdf
The Company has laid down policy on material subsidiary and the same is
placed on the website
https://www.lgb.co.in/wp-content/uploads/2021/08/policy-for-determining-material-subsidiaries.pdf
None of the subsidiaries are material subsidiary for the financial year ended 31st March
2023 as per the provisions of SEBI (LODR) Regulations, 2015.
CHANGE IN THE NATURE OF BUSINESS, IF ANY
There was no change in the nature of business of the Company during the
Financial Year ended 31st March 2023. management DISCUSSION & ANALYSIS
As per Regulation 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, a separate section on Management Discussion and Analysis
Report outlining the business of your Company forms part of this Annual Report as ANNEXURE
- F.
CORPORATE GOVERNANCE REPORT
The Company is committed to maintaining the highest standards of
Corporate Governance and adheres to the corporate governance requirements as set out by
the SEBI. The Company has also implemented several best governance practices. A detailed
Corporate Governance Report ("CG Report") as stipulated under Regulation 34(3)
read with Part C of Schedule V of the Listing Regulations is forming part of this Annual
Report. The requisite certificate from Mr. M. D. Selvaraj (FCS: 960 / COP: 411), Managing
Partner of M/s. MDS & Associates LLP (ICSI Peer Review No.3030/2023), Company
Secretaries, Coimbatore confirming compliance with the conditions of corporate governance
is attached to the CG Report as "ANNEXURE G".
AUDIT COMMITTEE
Audit Committee of the Company meets the requirements of Section 177 of
the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations 2015. The details of the composition and other requisite
information of the Audit Committee as required under the provisions of Section 177(8) of
the Companies Act, 2013 are given in the Corporate Governance Report which forms part of
this annual report. During the year under review, the Board has accepted all the
recommendations of the Audit Committee.
VIGIL MECHANISM
The Company has adopted a Whistle Blower Policy and Vigil Mechanism
that provides a mechanism to report violations, any unethical behaviour, suspected or
actual fraud, violation of the Company's Code of Conduct, including providing
adequate safeguards against victimisation. Further, it is stated that the Company has
provided direct access to the Chairman of the Audit Committee under the whistle blower
mechanism.
During the Financial Year 2022-23, no case was reported under Whistle
Blower Policy of the Company. The details of the Whistle Blower Policy have been disclosed
in the Corporate Governance Report and the same is available on the website of the Company
at: https://www.lgb.co.in/wp-content/uploads/2021/08/whistle-blower-policy.pdf
LISTING OF EQUITY Shares
The Company's Equity Shares continue to be listed at National
Stock Exchange of India Limited and BSE Limited and details of listing have been given in
the Corporate Governance Report forming part of this Directors' Report. We confirm
that the Listing fee for the Financial Year 2023-2024 has been paid to them.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of Regulation 34 of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 read with relevant SEBI Circulars, a new reporting
requirement on ESG Parameters were prescribed under "Business
Responsibility and Sustainability Reporting" ("BRSR").
The BRSR seeks disclosure on the performance of the Company against the nine principles of
the "National Guidelines on Responsible Business Conduct" (‘NGRBCs').
As per the SEBI Circulars, effective from the Financial Year 2022-23,
filing of BRSR is mandatory for the top 1,000 listed companies by market capitalisation.
Accordingly, the "Business Responsibility and Sustainability Report" of the
Company is annexed as ANNEXURE H and forms an integral part of the Annual Report.
HUMAN RESOURCE
We believe that the human resource forms the key factor in leading
organizational success and thereby, we consider our employees to be our most valued asset.
LGB provides in-house training for employees through skill development initiatives and
career development opportunities at all levels and across all functions. Our
Company's talent Management strategy focuses on sustaining the Company's
position as among India's most valuable organizations for successfully delivering
quality customer service and competitive superiority, while also facilitating
futurepreparedness and agility.
Employee relations continued to be cordial and harmonious across all
levels and at all the units of the Company. INSURANCE
The Company's plants, properties, equipment's and stocks are
adequately insured against all major risks. The Company has insurance cover for product
liability. The Company has also taken Directors' and Officers' Liability Policy
to provide coverage against the liabilities arising on them.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013
The Company is committed to creating a healthy working environment that
enables employees to work without fear of prejudice and gender bias. The Company has in
place an Anti-Sexual Harassment Policy in line with requirements, inter-alia, of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act,
2013. An Internal Complaints Committee has been set up to redress complaints received
regarding sexual harassment. All employees (permanent, contractual, temporary and trainee)
are covered under this policy. No complaints of sexual harassment were received by the
Company during the Financial Year 2022-2023.
acknowledgement
The Board of Directors would like to place on record their sincere
appreciation of the Company's customers, vendors and bankers for their continued
support to the Company during the year. The Directors also wish to acknowledge the
contribution made by employees at all levels for steering the growth of the organization.
We thank the Government of India, the state governments and other government agencies for
their assistance and co-operation and look forward to their continued support in the
future. Finally, the Board would like to express its gratitude to the Members for their
continued trust, co-operation and support.
| For and on behalf of the Board of Directors |
|
| B. VIJAYAKUMAR |
P.PRABAKARAN |
| Executive Chairman |
Managing Director |
| DIN: 00015583 |
DIN:01709564 |
Coimbatore
29.04.2023
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