The Directors present the Company’s 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. Company’s Philosophy on Corporate Governance:
LGB applies the principles of sound corporate governance and the Company has always been at the forefront of benchmarking its internal systems and policies within accepted standards so as to facilitate the creation of long term value for its shareholders and all other stakeholders.
2. Board of Directors:
Your Company’s Board has an optimum combination of executive, non-executive, independent and women directors as per requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
The details of composition of the Board of Directors and directorship held in other companies / board committees by each member of the Board of Directors of the Company as on 31st March, 2016 is as under:
* Exclude Directorship in Private Companies and Foreign Companies.
** Only Audit Committee and Stakeholders’ Relationship Committee has been considered.
# Sri. B. Vijayakumar, Father of Smt. V. Rajsri and Sri. V. Rajvirdhan
As per the disclosures received from the Directors, none of the Directors serve as member of more than 10 Committees nor are they the Chairman / Chairperson of more than 5 Committees, as per the requirements of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Familiarisation programme for Independent Directors
The Company has conducted the Familiarisation programmes for Independent Directors during the 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 Company’s Policy of conducting the Familiarisation Programme and the details of familiarisation programmes imparted to independent directors during 2015-2016 have been disclosed on the website of the Company at http://www.lgb.co.in Separate Meetings Of Independent Directors
During the year under review, the Independent Directors met on 15.03.2016, inter alia, to Discuss to discuss / review the matters specified in Regulation 25 of SEBI LODR / Schedule IV of the Companies Act, 2013. All the five Independent Directors were present at the meeting.
Details of the Board meetings held during the financial year 2015-2016
During the year, 5 (Five) Meetings of the Board of Directors of the Company were held on 30th April, 2015, 30th July, 2015, 29th October, 2015, 27th January, 2016 and 15th March, 2016.
3. Audit Committee
The Board has constituted a well-qualified Audit Committee in compliance with Section 177 of the Companies Act, 2013 read with Regulation 18 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. All the members of the Committee are Independent Directors including Chairman. They possess sound knowledge on accounts, audit, finance, taxation, internal controls etc.
3.1 Terms of Reference:-
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 SEBI – under Regulation 18 read with Part C of Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Besides having access to all the required information from within the company, the committee can obtain external professional advice whenever required.
3.2 Composition & Meetings:-
During the financial year ended 31st March 2016, four Audit Committee Meetings were held on 29th April. 2015, 29th July, 2015, 28th October, 2015 and 25th January, 2016. The necessary quorum was present at these meetings, and the details of meetings attended by the Members are as follows
The Deputy Managing Director, Chief Financial Officer, Statutory Auditors, Internal Auditors and Cost Auditor are the permanent invitees of the Audit Committee and the Company Secretary attended the meetings as Secretary of the Committee.
In line with its terms of reference, the Audit Committee, at its each meeting reviewed the operations and the audit reports for businesses pursuant to audits undertaken by the Internal Auditors under the audit plan approved at the commencement of the year. The quarterly financial results were reviewed by the Committee before submission to the Board. Independent sessions were held with the Statutory and the Internal Auditors to assess the effectiveness of the audit processes. The Committee reviewed adequacy of Internal Financial Controls on a Company-wide basis and shared their recommendations on the internal control processes to the Board. On a quarterly basis, the Committee continues to review whistle-blower complaints, litigations, related party transactions and policy violation instances, the corrective actions and mitigating controls put in place there for.
4. Nomination and Remuneration Committee
The Nomination and Remuneration Committee is constituted in compliance with the requirements of Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and section 178 of the Companies Act 2013.
4.1 Terms of Reference:-
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 the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and also with the requirement of Section 178 of the Companies Act, 2013
4.3 Performance evaluation criteria for Independent Directors
The company has devised a Policy for performance evaluation of 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 director performance.
4.4. Remuneration Policy
The remuneration policy is in consonance with the existing industry practice and also with the provisions of the Companies Act, 2013. The Board of Directors based on the recommendation of the Nomination and Remuneration Committee has formulated a policy on remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The policy covers the appointment, including criteria for determining qualification, positive attributes, independence and remuneration of its Directors, Key Managerial Personnel and Senior Management Personnel. The Nomination and Remuneration Policy is annexed to this report and also can be accessed on the Company’s web site at http:/www.lgb.co.in
Stakeholders’ Relationship Committee:
The Stakeholders Relationship Committee was constituted in compliance with the provisions of Section 178 of the Companies Act, 2013 read with Regulation 20 and Part D of Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
This Committee is responsible for the satisfactory redressal of investors’ complaints pertaining to share transfers, non-receipt of annual reports, dividend payments, issue of duplicate certificates, transfers and transmission of shares and other miscellaneous complaints. In addition, the Committee looks into other issues including status of dematerialization / re-materialization of shares as well as systems and procedures followed to track investor complaints and suggest measures for improvement from time to time.
During the year under review, the Committee met 18 times to deliberate on various matters referred above and for redressal of investors complaints.
Sri.M.Lakshmi Kanth Joshi, General Manager Cum Company Secretary, acts as Secretary to the Committee. He is the Compliance Officer of the Company and also responsible for redressal of investors complaints.
The Company has been receiving various correspondences from Shareholders and required information/documents are furnished immediately to the satisfaction of Shareholders. At the beginning of the year, no complaint was pending. During the year ended 31st March, 2016, the Company has not received any complaint from investors and also no investor complaint was pending on 31st March 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 Exchanges within stipulated time.
The Company has adopted an ‘Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades by Insiders’ (“the Code”) in accordance with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 2015.
The Company has also formulated ‘The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)’ in compliance with SEBI (Prohibition of Insider Trading) Regulations, 2015.
Disclosures with respect to the Demat Suspense Account / Unclaimed Suspense Account
In terms of Regulation 39(4) of Securities of Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Schedule VI thereof, the Company has opened a demat account in the name and style “L.G.Balakrishnan & Bros Limited - Unclaimed Shares Suspense Account”. The disclosures with respect to demat suspense account are as follows:
Corporate Social Responsibility Committee (CSR Committee)
In compliance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted the Corporate Social Responsibility Committee.
Management Discussion and Analysis Report
Management Discussion and Analysis Report forms part of this Annual Report
Extra Ordinary General Meetings and Postal Ballot:
During the year no EGM was convened nor any approval of the shareholders obtained through Postal Ballot.
No special resolution requiring postal ballot is being proposed on or before the ensuing Annual General Meeting of the Company.
Means of Communication
The Quarterly, Half yearly and Annual Results of the Company are available on the website of the Company www.lgb.co.in. The hard and soft copies are also sent to concerned Stock Exchanges immediately after they are approved by the Board so as to enable them to display them on their notice board/ website and also published in one widely circulated English Newspaper (Financial Express) and a Vernacular (Tamil) Newspaper (Malaimalar).
The Company has a dedicated help desk with email ID: email@example.com in the Secretarial Department for providing necessary information to the investors.
Official News Releases
Official news releases are made whenever it is considered necessary
The presentation made to institutional investors or to the analysts
There were no specific presentation made to the investors or analysts during the year.
10. General Shareholders’ Information
Annual General Meeting is proposed to be held at 10.30 A.M. on Thursday the 14th July, 2016 at Ardra Convention Centre, Kaanchan, 9, North Huzur Road, Coimbatore- 641 018.
Financial Year : April to March
For the year ended 31st March 2016, results were announced on 30.04.2016.
Financial Year - 2016-2017
Quarter ending June 30, 2016 - End of July 2016*
Quarter ending September 30, 2016 - End of October 2016*
Quarter ending December 31, 2016 - End of January 2017*
Year ending March 31, 2017 - End of April or May 2017*
Date of Book Closure - The date of Book closure are from 08.07.2016 to 14.07.2016 (both days inclusive) to determine the members entitled to the dividend for 2015-16
Dividend payment date - 10th August 2016
a) Listing on Stock Exchanges - BSE Ltd.
The National Stock Exchange of India Ltd.
b) Securities Code - BSE Ltd. Equity 500250
- The National Stock Exchange of India Ltd. - LGBBROSLTD
c) The International Security - Identification Number (ISIN) : INE337A01034
Registrar & Transfer Agents
M/s.Cameo Corporate Services Limited, “Subramanian Building” No.1, Club House Road, Chennai – 600 002
Share Transfer System:
Shares sent for transfer in physical form are registered and returned by our Registrars and Share Transfer Agents in 15 days of receipt of the documents, provided the documents are found to be in order. Shares under objection are returned within two weeks. The Stakeholders Relationship Committee considers the transfer proposals generally on a weekly basis
Outstanding GDRs/ADRs/Warrants or any convertible instruments, conversion date and likely impact on equity
The Company has not issued Global Depository Receipts or American Depository Receipt or Warrants or any Convertible instruments.
Commodity Price Risk/ Foreign Exchange Risk and Hedging
The Company did not engage in hedging activities.
Plant Location & Addresses
1. Coimbatore : 6/16/13, Krishnarayapuram Road, Ganapathy, Coimbatore Pincode - 641 006.
2. Vaiympalayam : SF. No. 47 & 50, Kondayampalayam Village, Vaiyampalayam PO, Coimbatore Pincode - 641 110.
3. Dindigul : SF. No. 5691/2, 5701/2, Karur Dindigul Road, D-Gudalur Pincode - 624 620
4. Karur: Mochakottampalayam, Vishwanathapuri, Karur Pincode - 639 002.
5. Mysore: No. 24, ndustrial Suburb Mysore Pincode - 570 008.
6. Annur: 269/1, Ganesapuram, Kattampatti Post, Annur, Coimbatore Pincode - 641 107.
7 Pongalur: 1/175, Sathy Road, Pongalur, Puliampatti Post, Pongalur Pincode - 638 459
8 Bangalore: No.4-A, Bommasandra Industrial Area, Anekal Taluk, Bangalore Pincode - 560 009.
9 Chakan: Gat No. 343-4, Industrial Shed, behind Hotel Marriot, Chakan Talegaon Road,Mahalunge, PUNE, Pincode - 410 501.
10 100% EOU: Kondaiyampalayam Village, SF No. 195, Pillaiyar Kovil Street, Near Power House, Kottaipalayam Post Coimbatore Pincode - 641 110.
11 Manesar: Plot No. 17, Section - 3, IMT Manesar Gurgaon Pincode 122 050.
12 Chennai: No. 49, Sidco Industrial Estate, Ambattur Chennai Pincode 600098
13 Annur: 3/145, Kovai Road, Ottrapalayam Village, Annur, Coimbatore Pincode - 641 653
14 Rudrapur: Khasra No. 390, Village- Danpur, Kashipur Road, Rudrapur, Pincode - 263 153 Uttrankhand
15 Pant Nagar: Plot No. 16, Sector 9, II E, Sidgul, Pant Nagar, Uddamsingh Nagar, Pincode - 263 153. Uttrankhand
16 Kushkhera, G-1, 356 RIICO Idustrial Area, Alwar District Pincode - 301707, RAJASTHAN
17 Kariampalayam: SF. No. 266/1B & 1C, RD Building. Kumarapalaym Road,Kariampalayam Post, Annur, Coimbatore Pincode - 641 653.
18 Pilliappanpalayam: SF.NO.225 - 227 - 123 D, Annur Road, Annur VIA Pillaippampalayam, Coimbatore Pincode - 641 653.
19 SF.NO.225 - 227 - 223 D, Annur VIA Pillaippampalayam, Coimbatore Pincode - 641 653.
20 Jalna: Plot No. A -7, Jalna Phase III, Industrial Area (MIDC) Maharashtra - 431 213
21 Ahmed Nagar: MIDC, Supa Area, Supa Parner Industrial Area, Ahmed Nagar, Maharashtra Pincode - 414 301
22 Pilliappanpalayam: SF.No. 225, 226, 227/1,2,3 A, Annur (Via), Pillaiappampalayam, Coimbatore Pincode - 641 653.
Address for Correspondence
M. Lakshmi Kanth Joshi General Manager Cum Company Secretary 6/16/13, Krishnarayapuram Road, Ganapathy Post, Coimbatore – 641 006 Phone No.0422-3911212 Fax No: 0422-3911163 Email: firstname.lastname@example.org Exclusive e-mail id for Investor Grievances: The following e-mail ID has been designated for communicating investors’ grievances:- email@example.com
a. Related Party Transactions:
All the related party transactions are entered on arm’s length basis, in the ordinary course of business and are in compliance with the applicable provisions of the Companies Act, 2013 and the Listing Regulations.
There are no materially significant related party transactions made by the Company with Promoters, Directors or Key Managerial Personnel etc. which may have potential conflict with the interest of the Company at large , The details of the transactions with Related Party are provided in the Company’s financial statements in accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions.
The Related Party Transactions Policy as approved by the Board is uploaded on the Company’s website http://www.lgb.co.in/pdf/related-party-transactions-policy.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 behavior, 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.lgb.co.in.
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.
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.
During the current financial year, there are no audit qualifications in the financial statements of the Company. The Company continues to adopt appropriate best practices in order to ensure unqualified financial statements.
The Company has not adopted any other non- mandatory requirements.
e. Policy for determining ‘material’ subsidiaries
As required under Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Policy for determining ‘material’ subsidiaries which has been put up on the website of the Company at http://www.lgb.co.in
Material unlisted subsidiary
During the year, the Company did not have any material unlisted subsidiary companies which are subject to special governance norms in terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. However, minutes of the meetings of the Board of Directors of all subsidiary companies are placed before the Board of Directors of the Company for their review and noting
f. Commodity price risks and Commodity hedging activities
During the financial year ended 31st March, 2016 the company did not engage in commodity hedging activities.
Disclosure of Accounting Treatment
In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.
Business risk evaluation and management is an ongoing process within the Company. The assessment is periodically examined by the Board.
13. There has been no instance of non-compliance of any requirement of Corporate Governance Report.
The Company has complied with all the mandatory requirements specified in Regulations 17 to 27 and clauses
(b) to (i) of sub – regulation (2) of Regulation 46 of the Listing Regulations Certificate from CEO/CFO
The CEO certification of the financial statements for the year has been submitted to the Board of Directors, in its meeting held on April 30, 2016 as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations.
14. DECLARATION – CODE OF CONDUCT
I, B.Vijayakumar, Chairman cum Managing Director of L.G.Balakrishnan & Bros Limited, declare that all the members of the Board of Directors and Senior Management have, for the year ended 31st March, 2016 affirmed compliance with the Code of Conduct laid down by the Board of Directors and Senior Management in terms of Regulation 26(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.