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Lakshmi Automatic Loom Works Ltd.

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Lakshmi Automatic Loom Works Ltd. Accounting Policy

Report on Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Bombay Stock Exchange Ltd, Compliance with the requirements of Corporate Governance is set out below:

Company's Philosophy on Code of Governance:

Lakshmi Automatic Loom Works Ltd is committed to sound practice of corporate functioning and customer satisfaction needs by offering the quality products and after sales service and complying with the regulations from time to time. The Company always endeavours its best to maintain quality at affordable cost by adopting highest standards of personal and professional integrity and ethical standards in all its business activities.

BOARD OF DIRECTORS:

In order to enable the Board to discharge its responsibilities effectively all statutory, significant and material information are placed before the Board at the meetings.

COMPOSITION:

The Board of Directors (Board) comprises of Eight Non Executive Directors, of which Four are Independent Directors. The Board is headed by a Non Executive Chairman

Board Meetings and Attendance :

Five Board Meetings were held on 30.05.2014, 01.08.2014, 18.09.2014, 12.11.2014 and 09.02.2015 during the financial year from 1st April, 2014 to 31st March, 2015. Details of Attendance of each Director at the Meetings of the Board and various committees of the Board during the financial year ended 31 st March, 2015

Remuneration of Directors :

No remuneration other than Sitting Fees within the limits prescribed under the Companies Act, 2013 was paid to the Directors during the year.

Familiarization Programme for Independent Directors

The senior management provides information such as specific project, activity or process of the Company at the meeting of Board of Directors and during their visit to the plant.

The familiarization process enables an understanding of businesses and the markets and regulatory environment in which it operates and equip the Independent Directors to perform their role on the Board effectively.

Upon appointment, Independent Directors are issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments and is also posted on the Company's website at www.lakshmiautomatic.com

Committee of Directors :

The Board has constituted various Committees of Directors to deal with matters referred to it for timely decisions :

Audit Committee :

The Company Secretary is the Secretary of the Audit Committee.

The Audit Committee is empowered as per the Terms of Reference specified by the Board in terms of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

The brief description of such terms of reference are as follows :

? Oversight of the Company's financial reporting process and the disclosure of its financial information to ensure that the financial statements are correct, sufficient and credible;

? Recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

? Approval of payment to Statutory Auditors for any other services rendered;

? Review of accounting and financial policies and practices;

? Reviewing, with the management, performance of Statutory and Internal Auditors, adequacy of the internal control systems;

? Evaluation of internal financial controls and risk management systems;

? Reviewing with the management, the Quarterly / Annual Financial Statements and Auditors' Report before submission to the Board for approval;

? Approval or any subsequent modification of Related Party Transactions;

? Other terms of reference included from time to time based on provisions of Clause 49 of the Listing Agreement / Companies Act, 2013.

The Committee has met Four times during the financial year ended 31st March, 2015. The Statutory Auditors, Internal Auditors, the Chief Executive Officer and the Chief Financial Officer attend the Audit Committee Meetings on invitation. The CEO, CFO and Senior Managerial Personnel attend the meetings as may be required by the Committee.

Stakeholders Relationship Committee:

The Committee considers and resolves the grievances of shareholders of the Company and look into their complaints, if any, on transfer of shares, non-receipt of Balance Sheet, non receipt of declared dividends etc. and also the action taken by the Company on the above matters.

The Company Secretary is the Secretary of the Committee.

During the financial year ended 31st March, 2015, 1 letter / complaint was received from the investor which was replied / resolved to the satisfaction of the investor. The outstanding letters / complaints as on 31 st March, 2015, was Nil. The Committee has met once during the financial year ended 31 st March, 2015.

Nomination and Remuneration Committee:

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

The Committee has interalia formulated the criteria for determining qualifications, positive attributes and independence of a Director and recommended to the Board a policy relating to the remuneration for the Directors, Key Managerial Personnel and Senior Management Personnel in terms of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement and approved by the Board of Directors.

Terms of reference 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 Company's 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 Company's operations.

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

? To perform such other functions as may be necessary as appropriate for the performance of the Directors.

The Company Secretary is the Secretary of the Committee.

Share Transfer Committee:

The Share Transfer Committee consists of Three Members of the Board of Directors and Two Members representing the Registrars and Transfer Agents. The Committee has met Fifteen times during the financial year ended 31 st March, 2015.

INDEPENDENT DIRECTORS MEETING

During the year under review, the Independent Directors met on 09.02.2015, to:

1. Review the performance of Non Independent Directors and the Board as a whole;

2. Assessment of the quality, content and timelines of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

Except one Independent Director who was away, all other Independent Directors were present at the meeting.

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 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 performance approval of the Independent Directors was carried out by the entire Board at their meeting held on 09-02-2015. The board also carried out annual performance evaluation of its Committees.

PREVENTION OF INSIDER TRADING

The Company has adopted the Code of Conduct to Regulate, Monitor and Report Trading by insiders and the Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information pursuant to the SEBI (Prohibition of Insider Trading) Regulations, 2015 and is posted in the Company's website at www.lakshmiautomatic.com

Disclosures:

There are no materially significant Related Party Transactions that would have potential conflict with the interests of the Company at large. The transactions with related parties are disclosed in the Note No.13 to the Annual Accounts. The Board has approved a policy for Related Party Transactions which is posted on the Company's website at www.lakshmiautomatic.com .

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

The Company has complied with the requirements of the Listing Agreement with the BSE Ltd and the regulations of SEBI.

All the mandatory requirements have been complied with as stated in this report on Corporate Governance. The Board has taken cognizance of the non-mandatory requirements. The Company has a Non-Executive Chairman and a separate Chief Executive Officer. The financial statements are unqualified.

Vigil Mechanism / Whistle Blower Policy:

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 Company's 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, 2015

A copy of the Vigil Mechanism / Whistle Blower Policy is posted on the Company's Website at www.lakshmiautomatic.com .

Code of Conduct:

The Code of Conduct for the Directors and Senior Management Personnel of the Company has been laid down and is posted on the Website of the Company at www.lakshmiautomatic.com . The Compliance of the said Code of Conduct by the Directors and Senior Management Personnel for the year 2014-15 has been affirmed by the CEO.

CEO and CFO Certification:

The CEO and the CFO have given a Certificate to the Board as contemplated in Clause 49 of the Listing Agreement and is separately annexed.

Means of Communication:

The Quarterly Results are published in leading news papers like Financial Express (English) and Malai Malar (Tamil).

The Quarterly Results, Shareholding Pattern and Company information are available in the Company's Website www.lakshmiautomatic.com .

Management Discussion and Analysis (MDA) Report

The report on MDA is annexed to the Director's Report and forms part of this Annual Report.

SHAREHOLDERS INFORMATION

Annual General Meeting :

Day & Date : Wednesday the 23rd September, 2015

Time : 2.45 P.M.

Venue : Registered Office: 686, Avanashi Road,Pappanaickenpalayam, Coimbatore - 641 037.

Financial Calendar

Financial Year : 1st April 2014 to 31st March 2015

Results announced : 20.05.2015

Posting of Annual Reports : On or before 22.08.2015

Last date of receipt of Proxy Form : 21.09.2015 (before 2.45 P.M.)

Announcement of Quarterly Results : August 2015, November 2015, February 2016 (Tentative) and May 2016

Date of Book Closure :

17.09.2015 to 23.09.2015 (both days inclusive)

Dividend Payment Date :

No dividend recommended

Listing on Stock Exchanges :

The Equity Shares of the Company are listed in BSE Ltd.

Payment of Listing Fees :

Annual Listing Fees for the year 2015-16 has been paid by the Company.

Stock / Scrip Code : 505302

ISIN Number : INE718M01014

Registrars and Share Transfer Agents :

(For Shares held in both Physical and Demat mode)

M/s. S.K.D.C. Consultants Ltd

Kanapathy Towers, 3rd Floor, 1391/A1, Sathy Road, Ganapathy, Coimbatore - 641 006 Telephone No.91-422-2539835, 2539836 & 6549995 Email Id : info@skdc-consultants.com

Share Transfer System:

The Company's shares are transferable through the depository system. The physical share transfers are processed and the share certificates are returned within a period of 15 days from the date of receipt if documents are in order and on approval by the Share Transfer Committee.

There are 8823 shareholders holding 6103988 Equity Shares of the Company. 6393 shareholders are holding shares in less than marketable lots of 50 shares.

Dematerialisation of Shares:

The Company's shares are available for dematerialisation with both the Depositories, National Securities Depository Ltd (NSDL) and Central Depository Services (India) Ltd (CDSL).

As on 31-03-2015, 31,14,850 Equity shares were dematerialized representing 51.03% of the total paid up Equity Share Capital of the Company.

Nomination Facility:

Section 72 of the Companies Act, 2013 provides the facility for nomination of the shares. The nomination (Form No.SH-13) along with instructions is provided to the Members on request.

Plant Locations :

The Company has 2 Plants situated at the following locations :

WEAVING MACHINERY AND SPARES (UNIT 1) OTHER ENGINEERING SERVICES (UNIT 2)

Hosur Industrial Complex Singarampalayam, Kinathukadavu Taluk Hosur - 635 126 Pollachi 642 109, Coimbatore District

Address for Correspondence :

All correspondence from shareholders should be addressed to the Registrar and Share Transfer Agent :

M/s. S.K.D.C. Consultants Ltd

Kanapathy Towers, 3rd Floor,

1391/A1, Sathy Road, Ganapathy, Coimbatore - 641 006 Telephone No.91-422-2539835 - 36 & 6549995 Email Id : info@skdc-consultants.com  

Shareholders Complaints Registration Email ID : secretarial@lakshmiautomatic.com