CORPORATE GOVERNANCE REPORT
1. Philosophy on Code of Governance
LMW's corporate vision is to ensure a sustainable business that delights the customer, thrives to maintain the market leadership and at the same time enhances every stakeholder value. To achieve this, systematic and planned efforts are undertaken by your Company keeping in view organization's core values and business ethics. LMW consistently partners with its customers to deliver quality products /services on time and at reasonable prices. Your Company believes in ethical conduct of business and maintains transparency and accountability in its activities. Your Company ensures compliance with all applicable regulations. Your Company is aware of the fact that its ability to meet significant corporate goals is influenced by the extent to which prudent corporate governance policies are devised and adhered to within the organization. Your Company consistently emphasizes its commitment towards creation, monitoring and continuous updation of a strong corporate governance policy and practice that will define and drive organization's performance as per its cherished values and commitments to every stakeholder.
2. Board of Directors
The Board provides leadership, strategic guidance and objective judgment in the conduct of the affairs of the Company. The Board upholds the vision, purpose and values of your Company. The Board consists of experienced specialists who are experts in their respective business/profession and have decades of experience to their credit. As a Board, the Directors are committed to ethical and lawful conduct of business and possess the ability to steer the affairs of the Company in the right direction. The Board places emphasis on highest standards of governance practices which allows the Company to carry on its business in the long term interest of all the stakeholders.
To ensure the participation of all Directors at the Board Meetings, as a matter of practice, an annual calendar of Board and General Body meetings are determined and intimated to the Directors well in advance. Company ensures that timely and relevant information is made available to all Directors in order to facilitate their effective participation and contribution during meetings and deliberations.
The Board determines strategic policies, approves annual plans & budgets, capital expenditure, new projects, investment plans, conducts performance review, ensures statutory compliance, and risk management etc periodically. A minimum of four meetings of the Board of Directors are held each year, one meeting is held in each quarter and it is ensured that the gap between two meetings does not exceed four months. A separate meeting of independent Directors is also convened once in a year.
a. Composition of Board and Category of Directors
Board of Directors is constituted in such a way that it strictly conforms to the provisions of the Companies Act, 2013 and to the conditions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The composition of the Board ensures a judicious mix of Executive and Non-Executive Directors as well as the combination of Independent and Non-Independent Directors.
As on date the Board consists of eight Directors, of whom one is the Chairman and Managing Director and seven are Non-Executive Directors. Out of the seven Non-Executive Directors, one is a Nominee Director representing LIC as an equity investor, two Directors are Non-Executive Non-Independent, four are Non-Executive Independent Directors. The Board also meets with the requirement of having a Woman Director.
3. Audit Committee
The Audit Committee was constituted with terms of reference in line with the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The terms of reference include review of financial statements, annual budgets, internal control systems, accounting policies and practices, internal audit and administration. The audit committee consists of the following Directors:
1. Dr. Mukund Govind Rajan.... Chairman
2. Sri Aditya Himatsingka
3. Sri Basavaraju
Sri K Duraisami, Company Secretary serves as the Secretary of the Committee. Sri C.B. Chandrasekar, Chief Financial Officer, Statutory Auditors, Internal Auditor and the Company Secretary are always present at the Audit Committee meetings. The Audit committee would assure to the Board compliance of adequate internal control system, compliance of Accounting Standards, financial disclosure and other issues conforming to the requirements specified by the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The committee meets once in every quarter to carry out its business.
The committee met four times during the financial year under review on 20th May, 2015, 10th August, 2015, 2nd November, 2015 and 3rd February, 2016. Details of attendance of members are as follows:
4. Nomination and Remuneration Committee
This Committee was formed for identifying persons to be appointed as Directors and senior management positions, recommend to the Board the appointment and removal of Directors, carry out evaluation of Directors, formulate criteria for determining qualification positive attributes and independence of Directors, recommend policy relating to remuneration of Directors.
During the year 2015-16 the committee was reconstituted and the reconstituted committee consists of the following Directors:
1. Justice Smt. Chitra Venkataraman (Retd.) ... Chairperson
2. Sri S Pathy
3. Sri Basavaraju
During the year under review, the committee met on 10th August, 2015 to recommend for appointment and fix the remuneration payable to Sri C.B. Chandrasekar as Chief Financial Officer of the Company. The said meeting was attended by Sri S Pathy and Sri Basavaraju.
The Committee had formulated performance evaluation criteria for the evaluation of the Chairman of the Board, the Board as a whole, committees of the Board, Independent Directors and Non independent Directors. The evaluations were conducted as per the criteria determined by this Committee.
5. Remuneration of Directors
The Non-Executive Directors of the Company are remunerated in two ways viz., sitting fees and commission. Sitting fees is paid to the Non-Executive Directors for attending the meetings of Board of Directors, committees of Board of Directors and other meetings of Directors at the rate of Rs.50,000/- per meeting.
In addition to the sitting fees, Commission, as approved by the shareholders at the Annual General Meeting held on 5th August, 2013, is paid in the aggregate for all Non-Executive Directors up to 1% of the net profits per annum. The amount of commission payable to each Non-Executive Director is determined by the Board.
Remuneration payable to Executive Directors consists of fixed as well as variable. The fixed pay consists of salary and perquisites and the variable pay is in the form of commission on net profits at affixed percentage. Remuneration to Executive Directors is determined by the Nomination and Remuneration Committee of Board of Directors and is approved by the shareholders at the General Meeting. No sitting fee is being paid to the Executive Directors
6. Stakeholders Relationship Committee
This committee has been formed to specifically focus on the services to shareholders/ investors. The committee periodically reviews the services rendered to the shareholders particularly redressal of complaints of the shareholders like delay in 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. During 2015-16 the committee was reconstituted and the reconstituted committee consists of the following Directors:
1. Justice Smt. Chitra Venkataraman (Retd.) . Chairperson
2. Sri Basavaraju
3. Sri R Rajendran
Sri K Duraisami, Company Secretary serves as the Compliance Officer. During the year under review 3 letters / complaints were received from the investors which were adequately addressed to the satisfaction of the investors. No complaint /query is remaining unresolved as on 31st March, 2016.
Details of Special Resolutions passed at the above Annual General Meetings / Extra Ordinary General Meeting:
a. At the AGM held on 5th August, 2013 the following special resolutions were passed:
(i) Approval for appointment of Sri Basavaraju as Director.
(ii) Approval for commission payable to Non-Executive Directors.
(iii) Approval for reappointment and remuneration payable to Sri R. Rajendran, Director Finance.
b. At the AGM held on 6th August, 2014 the following special resolutions were passed:
(i) Approval for alteration of Articles of Association of the Company.
(ii) Approval for amendment in the terms of appointment of Sri R. Rajendran, Director Finance.
(iii) No postal ballot pursuant to Sec.110 was conducted. Postal ballot as per clause-35B of the Listing Agreement was done. Sri M.D. Selvaraj, Practising Company Secretary, the Scrutiniser for e-voting has monitored this postal ballot also.
c. At the AGM held on 10th August, 2015 no special resolution was passed and No postal ballot was conducted.
8. Means of communication
The Company is conscious of the importance of timely dissemination of adequate information to the stakeholders. The dates of Board Meetings, General Body meetings, Book Closures and Quarterly results are being published in The Hindu Business Line, an English daily and Dinamalar, a Tamil daily Newspaper and are also informed to Stock Exchanges regularly.
Besides, the Company's Profile, Corporate Information, Quarterly and Annual Financial Statements, Annual Reports, Shareholding Pattern, Corporate Governance Report, Code of Conduct for Directors and Officers, Product Range, official news release and presentations if any to institutional investors are being kept posted and updated in the Company's web-site www.lakshmimach.com
9. General shareholder Information
Annual General Meeting
Day and Date : Friday the 5th August, 2016
Time : 2.45 PM
Venue : Nani Kalai Arangam, Mani Higher Secondary School, Pappanaickenpalayam, Coimbatore - 641 037
Financial Year : 1st April, 2015 to 31st March, 2016
Announcement of Annual Results 2015-16 : 25th May, 2016
Last date for Posting of Annual Report of 2015-16 : 11th July, 2016
Last date for receipt of Proxy forms for the above indicated AGM : Up to 02.45 PM on 3rd August, 2016
Date of Book Closure
Friday, the 29th July, 2016 to Friday the 5th August, 2016 (both days inclusive)
Dividend payment date : On or before 4th September, 2016
Name and Address of the Stock Exchanges where the Company's shares are listed:
The equity shares of the Company are listed in:
1. Bombay Stock Exchange Limited, Mumbai (Address: Phiroze Jeejeebhoy Towers, Dalal Street, Mumbai-400001) 2. National Stock Exchange of India Limited, Mumbai
(Address: Exchange Plaza, C-1, Block-G, Bandra Kurla Complex, Bandra East, Mumbai-400051)
Annual Listing Fees has been duly paid to both the stock exchanges
Stock codes & ISIN number:
Stock Exchanges Code No.
1. Bombay Stock Exchange Limited : 500252
ISIN No. INE269 B 01029
2. National Stock Exchange of India Limited : LAXMIMACH
-do-Registrar & Share Transfer Agents:
Transfer, transmission, transposition of name, split, consolidation, recording change of name of shareholders, issue of duplicate certificate, dematerialization, rematerialization and such other matters relating to the shares of the Company are entrusted to the share transfer agents M/s. SKDC Consultants Limited, Kanapathy Towers, 3rd Floor, 1391/1-A, Sathy Road, Ganapathy, Coimbatore - 641006. They are the connectivity providers for Demat Segment.
Share Transfer System:
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 etc. are approved by Shares and Debenture Committee.
Dematerialization of Shares:
As on 31st March, 2016, 1,11,36,205 equity shares constituting 98.82 percent of the paid up capital of the Company has been dematerialized.
Depository Receipts and convertible instruments:
The Company has not issued any Global Depository Receipts, American Depository Receipts or convertible instruments of any kind.
Commodity and foreign exchange hedging activities:
The Company is not making any foreign exchange exposures and does not involve in hedging activities in foreign exchange and commodity markets. The Company has a mechanism in place to continuously monitor the movement in commodity prices and take appropriate action to ensure better cost control.
The Company's plants are situated at the following locations:
Textile Machinery Divisions:
Unit - I Perianaickenpalayam, Coimbatore - 641 020
Unit - II Kaniyur, Coimbatore - 641 659
Unit -III Muthugoundenpudur, Coimbatore - 641 406
Machine Tool Division Arasur, Coimbatore - 641 407
Foundry Division Arasur, Coimbatore - 641 407
Foundry and Machine shop Arasur, Coimbatore - 641 407
Advanced Technology Centre Ganapathy, Coimbatore - 641 006
Wind Mill Division Udumalpet (TK), Tirupur District
Address for Communication
All correspondence should be addressed to:
The Company Secretary Lakshmi Machine Works Limited Corporate Office 34-A, Kamaraj Road Coimbatore - 641 018 E-mail: email@example.com
10. Other Disclosures
• There were no materially significant related party transactions that would have potential conflict with the interests of the Company at large. Details of related party transactions are given elsewhere in the Annual Report.
• No penalty or strictures have been imposed on the Company by any Stock Exchange or SEBI or any Statutory Authority on any matter related to capital markets during the last three years.
• A Whistle Blower Policy is adopted by the Company, the whistle blower mechanism is in vogue and no personnel has been denied access to the Audit Committee.
• All the mandatory requirements have been duly complied with and no discretionary requirements were undertaken.
• The Company's Policy relating to determination of Material Subsidiaries is available at the Company website www.lakshmimach.com
• The policy of the Company relating Related Party Transaction is available at the Company's website: www.lakshmimach.com
• The Company is not undertaking any commodity hedging activities, hence there is no risk of commodity hedging to the Company.
11. All the requirements of corporate governance report of sub paragraphs (2) to (10) above has been duly complied with.
12. None of the discretionary requirements as specified in Part E of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been adopted.
13. The Company is fully compliant with the Corporate Governance requirements as specified by Regulation 17 to 27 and clauses (b) to (i) of Sub-Regulation (2) of Regulation 46 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
For and on behalf of the Board
Chairman and Managing Director
(DIN No. 00004505)
Place : Coimbatore
Date : 25th May, 2016