CORPORATE GOVERNANCE REPORT
The Directors present the Report on Corporate Governance for the year ended 31st March 2016, in terms of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
1. Philosophy on Code of Corporate Governance
The corporate vision of LECS is to maintain responsible corporate behaviour across the organization, respectful of all rules and regulations governing corporate bodies. Makes all conscious efforts to conduct business in the best interests of all stake holders in a transparent manner. Engages in continuous improvement of products, manufacturing processes and work environment to deliver the best-in-class products and services to customers.
2. 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 on quarterly basis.
The Board of Directors of LECS is headed by Chairperson and Managing Director and ably supported by six non-executive Directors of which four of them are Independent Directors. Position of Board of Directors
As mandated by Regulation 26 of SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015 and erstwhile Clause 49 of listing agreement entered into with the Stock Exchange, none of the Directors hold any membership in more than ten Committees of Boards or Chairman of more than five Committees in which they are members.
Familiarization Program for Independent Directors
The Company has conducted the Familiarisation programmes for Independent Directors during the financial year. The Programmes aim to provide insights into the Company to enable the Independent Directors to understand its business in depth, to familiarise them with the processes, businesses and functionaries of the Company and to assist them in performing their role as Independent Directors of the Company. The details of familiarisation programmes imparted to Independent Directors is posted in the website of the Company 'www.lecsindia.com
3. Committee of Directors
The Board has constituted various Committees of Directors to deal with matters referred to it for timely decisions. (i) Audit Committee:
The role, powers and functions of the committee are as per Section 177 of the Companies Act, 2013 and the guidelines set out in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms of reference of this committee are as required by Regulation 18 read with Part C of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The Audit Committee assure to the Board, compliance of adequate internal control system, compliance of Accounting Standards, financial disclosure and other issues confirming to the requirements specified by the Companies Act, 2013, SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015 and Listing Agreement entered into with the Stock Exchange.
Audit Committee consists of the following Independent Directors:
1. Sri. N. Suryakumar - Chairman
2. Sri. Ramesh Rudrappan - Member
3. Sri. A. Palaniappan - Member
Company Secretary of the Company is the Secretary of the Committee.
The Committee met five times during the Financial Year ended 31st March 2016 on 22nd May 2015, 13th August 2015, 28th October 2015, 4th February 2016 and 11th March 2016.
(ii) Nomination and Remuneration Committee:
This Committee was formed for determining remuneration payable to Executive and Non-Executive Directors, selection and appointment of Directors and senior executives.
The terms of reference of this committee has been mandated with the same as specified in Regulation 19 read with Part D of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also with the requirement of Section 178 of the Companies Act, 2013.
The Committee consists of the following Directors as its members:
1. Sri. N. Suryakumar - Chairman
2. Sri. Arun Selvaraj - Member
3. Sri. Ramesh Rudrappan - Member
The Company has formulated performance evaluation criteria for Independent Directors, Board, Committees and other Directors which includes criteria for performance evaluation of the non-executive directors and executive directors and shall carry out evaluation of every directors performance
(iii) Stakeholders Relationship Committee:
The Committee has been formed to specifically focus on the services to the stakeholders. The Committee periodically reviews the services rendered to the shareholders particularly redressal of complaints of the shareholders like transfer of shares, non-receipt of Annual Report, non-receipt of declared dividends, etc., and also the action taken by the Company on the above matters.
The Committee consists of the following Directors as its members:
1. Sri. Ramesh Rudrappan - Chairman
2. Sri. D.Senthilkumar - Member
3. Smt. Nethra J.S. Kumar - Member
Sri.S.Sathyanarayanan, Company Secretary serves as the Compliance Officer with effect from 13th August 2015.
During the year 1 letter / complaint was received from the investor which was replied/resolved to the satisfaction of the investor. The outstanding letters / complaints as on 31.03.2016 was NIL. The Committee had met two times during the Financial Year ended 31st March, 2016 on 31st July 2015 and on 04th February 2016
Pursuant to clause 47(c) of the Listing Agreement/ Regulation 40(9) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, a certificate on half-yearly basis confirming due compliance of share transfer formalities by the Company from Practising Company Secretary has been submitted to the Stock Exchange within stipulated time.
(iv) Share Transfer Committee:
Share Transfer Committee consists of the members of the Board, Company Secretary and Share Transfer Agents. At present there are 6 members in the Committee. The committee reviews and approves transfers, transmission, split, consolidation, issue of duplicate share certificate, recording change of name, transposition of names etc. in equity shares of the Company. Shareholder requests on the above matters are being processed and certificates returned to them within 15 days from the date of receipt. The committee had met 20 times during the Financial Year ended 31st March, 2016.
(v) Corporate Social Responsibility Committee:
The Committee has been formed to frame CSR Policy, approve the CSR Budget and monitor the implementation of the project or activities undertaken under CSR.
The Corporate Social Responsibility Committee consists of the following directors:
1. Sri. D. Senthilkumar - Chairman
2. Smt. Nethra J.S. Kumar - Member
3. Sri. Arun Selvaraj - Member
(vii) Independent Directors Meeting:
As required under the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a separate meeting of Independent Directors of the Company was held on 10th March, 2016. All the Independent Directors were present at the meeting
6. Means of Communication
The quarterly results were published in leading newspapers viz. Financial Express (English) and Dina Malar (Tamil).
The Company Profile, Corporate Information, Share Holding Pattern, Code of Conduct for Directors and Officers, Financial Statements,Product Range and the details prescribed in regulation 46 (2) (b) to (i) of SEBI (Listing Obligations and Disclosures Requirements) Regulation, 2015 is published in the Company's website www.lecsindia.com
7. Shareholders Information Annual General Meeting
Day & Date Time Venue
Monday, 8th day of August 2016 3.00 P.M Nani Kalai Arangam, Mani Higher Secondary School, Pappanaickenpalayam, Coimbatore - 641 037.
Financial Year : 1st April to 31st March
Announcement of Quarterly Results for the Financial Year 2016 - 2017 (Tentative) ;
August 2016, November 2016, February 2017 and May 2017
Date of Book Closure : Tuesday, the 02nd August 2016 to Monday, the 08th August 2016 (both days inclusive)
Dividend Payment Date :On or before 07th September 2016.
Listing on Stock Exchanges
The equity shares of the Company are listed in BSE Limited, Mumbai. The listing fees have been paid to BSE Limited for the Financial Year 2016-2017.
Stock Codes & ISIN Number:
Stock Exchange : BSE Limited
Security Code : 504258
Security ID LAKSELEC
ISIN No. INE284C01018
Registrar & Share Transfer Agents:
Transfer, transmission, split, consolidation, recording the change of name of shareholders, issue of duplicate certificate, dematerialisation and such other matters relating to the shares of the Company or entrusted to the share transfer agents M/s. S.K.D.C. Consultants Limited, Kanapathy Towers, 3rd Floor, 1391 / A-1, Sathy Road, Ganapathy, Coimbatore - 641 006. They are the connectivity providers for Demat Segment.
Share Transfer System:
The share transfers are registered and share certificates are returned within a period of 15 days from the date of receipt, if documents are in order. The share transfers are approved by Share Transfer Committee
Dematerialisation of Shares and liquidity:
As on 31st March 2016, 22,85,545 shares constituting 92.98% of the total paid up capital of the Company has been dematerialized.
Outstanding ADR / GDR / Warrants / or any Convertible Instruments - The Company has not issued any ADR / GDR / Warrants / or any Convertible Instruments.
Commodity price risk or foreign exchange risk and hedging activities - Nil Plant Locations:
The Company's plant is situated at the following location:
Factory : Arasur, Coimbatore - 641 407 Wind Mill Division : Palladam (TK), Tirupur District
Address for Correspondence :
All correspondence should be addressed to:
The Compliance Officer, Lakshmi Electrical Control Systems Limited Arasur, Coimbatore - 641 407 E-mail: firstname.lastname@example.org
a. Materially significant related party transactions:
The transactions with related parties are monitored in accordance with the policy. All the transactions with the related parties are at arms length transaction and are taking place in the ordinary course of business. The details of related party transactions are provided elsewhere in the Annual Report. The Board has approved a policy for related party transactions which has been uploaded on the Company's website. Weblink: <http://www.lecsindia.com/financial/Policies/relatedpartytransactionPolicy.Pdf>
b. Strictures and Penalties
The Company has complied with all the requirements of the Listing Agreement of the stock exchanges as well as regulations and guidelines of SEBI including SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. No penalties have been levied or strictures have been passed by SEBI, Stock Exchange or any other statutory authority on matters relating to capital markets during the last three years.
c. Vigil Mechanism and Whistle-Blower Policy
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.
The Whistle Blower Policy has been posted on the website of the Company www.lecsindia.com Your Company hereby affirms that no complaints were received during the year under review.
d. Details of compliance with mandatory requirements
The Company has complied with all mandatory requirements laid down under the provision of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
e. Details of compliance of non-mandatory requirements
The Company has adopted the non-mandatory requirement of Reporting of internal auditors to Audit Committee as recommended under Regulation 27(1) read with Part E of Schedule II of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
f. The company has no subsidiary.
9. Commodity price risks and Commodity hedging activities - During the financial year ended 31st March, 2016 the company did not engage in commodity hedging activities.
10. Management Discussion and Analysis Report - Management Discussion and Analysis Report forms part of this Annual Report.
11. The Company complies with the corporate governance requirement specified in regulation 17 to 27 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The constitution of Risk Management Committee is not applicable to the Company.
12. Risk Management
Business risk evaluation and management is an ongoing process within the Company. The assessment is periodically examined by the Board.
13. Certificate from the Statutory Auditors confirming the compliance with all the conditions of Corporate Governance as stipulated in Listing Regulations forms part of this report.
14. There are no unclaimed shares of the Company and hence the Company has not opened unclaimed suspense account.
15. Certificate from Chairperson and Managing Director (CMD) & CFO
The CMD and CFO certification of the financial statements for the financial year has been submitted to the Board of Directors, in its meeting held on 26th May 2016 as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations.
For and on behalf of the Board
Nethra J.S. Kumar
Chairperson and Managing Director
(DIN : 00217906
Place : Coimba
Date : July 1, 2016