| DEAR MEMBERS,
The Directors have the pleasure in presenting this 91st Annual
Report of the Company together with the Audited Statement of
Accounts for the financial year ended 31st March, 2015.
SUMMARY OF FINANCIAL RESULTS
(Rs. in lakhs)
Particulars 2014-2015 2013-2014
Gross Income 688.19 479.54
Gross Profit 578.27 143.03
Less: Interest 4.28 -
: Depreciation 7.21 8.16
Profit for the year before taxation 566.78 134.87
Provision for Taxation 68.48 -
Profit after tax 498.30 134.87
Prior year taxes (1.67) -
Net Profit 499.97 134.87
Profit brought forward 660.65 635.95
Profit available for appropriation 1160.62 770.82
Less: Carrying amount of Assets 3.28 -
Net Profit available for appropriation 1157.34 -
Appropriations:
Proposed Dividend 90.00 54.00
Dividend Tax 17.99 9.17
Transfer to Reserve Fund (per RBI Guide
Lines) 105.00 27.00
Transfer to General Reserve 200.00 20.00
Balance carried over to Balance Sheet 744.35 660.65
1) DIVIDEND:
Your Directors take the pleasure in recommending a dividend at the rate
of 30% (i.e., Rs. 3.00 per Equity Share of Rs.10/- each) for the
financial year 2014-15 as apposed to 18% dividend rate in the previous
year. The proposed dividend, if approved at the 91st Annual General
Meeting by the members, will be paid to all those equity shareholders
whose names appear in the register of members as on 06.08.2015 and also
to those whose names appear as beneficial owners as furnished by the
National Securities Depository Limited and Central Depository Services
(India) Limited. The outflow on account of the dividend payout would be
Rs. 107.99 lakhs including tax on dividends.
2) OPERATIONAL PERFORMANCE:
During the year under review the Capital Markets witnessed a roller
coaster ride during the year 2014, but ended on a high note. The year
2014 started well as commodity prices declining and stability on
political front was restored. However, fears of quantitative easing,
tapering and Rupee depreciation led to a sharp correction in Capital
Markets. As rupee stabilized, normalcy was restored, resulting in a
rally and markets reached to its peak levels. Last quarter of F.Y.
2014-15 saw stock markets breaking new highs owing to increased
optimism on the formation of a stable and progressive Government and
also stable commodity prices. Going ahead, we believe that these
factors together with reasonable current equity valuations, the stock
markets will remain well supported.
The Company's Financial performance through investment in shares and
mutual funds have yielded substantial Capital Gains and Dividends as
can be seen from the Gross Income of Rs. 688.19 lakhs for the year
ended 31st March, 2015 as against Rs. 479.54 lakhs for the previous
year ended 31st March, 2014. The Company made a profit after tax of
Rs. 499.97 lakhs against Rs. 134.87 lakhs during the previous year
ended 31st March, 2014. The Improved performance was mainly on account
of the favorable market conditions and also close monitoring of the
Portfolio Investments in Equity Shares and Mutual Funds. The Company
will continue to focus its efforts to closely monitor Portfolio
Investment activity to generate optimum returns by way of Capital
appreciation and periodic dividend returns.
3) NUMBER OF BOARD MEETINGS HELD:
The Board of Directors duly met 4 times during the Financial Year from
l st April 2014 to 31st March, 2015. The dates on which the meetings
were held are as follows:
10th May, 2014, 5th August, 2014, 04th November, 2014 and 7th February,
2015
4.(i) CONFIRMATION OF APPOINTMENT:
Pursuant to the provisions of the section 161 (1) of the Companies
Act,2013 read with the Articles of Association of the Company,
Smt.Madhurika Venkat Nalluri is appointed as Additional Director and
she shall hold office only up to the date of this Annual General
Meeting and being eligible offer herself for re-appointment as
Director.
4.(ii) APPOINTMENT OF SRI. ARUN PRASAD KANURI (Din: 06830316).
Sri. K.Arun Prasad was inducted as an Additional Director w.e.f.
07.02.2015 and his term of office expires by the end of the ensuing
Annual General Meeting. Sri Arun Prasad expressed his desire to go
abroad for higher studies (MBA) and hence the proposal for his
appointment as Director at the ensuing Annual General Meeting is not
considered.
4.(iii) APPOINTMENT OF NON INDEPENDENT DIRECTOR:
Sri.K.Kapil Prasad will retire by rotation at the ensuing Annual
General Meeting and, being eligible, offer himself for re-appointment.
4. (iv) DECLARATION OF INDEPENDENCE FROM INDEPENDENT DIRECTORS:
All Independent Directors have given declarations that they meet the
criteria of independence as laid down under Section 149 (6) of the
Companies Act, 2013 and Clause 49 of the Listing Agreement.
5) LISTING OF COMPANY'S SHARES:
The Company's shares are listed at The National Stock Exchange of India
Limited (NSE) w.e.f 15.04.2015 and the Annual Listing Fees for the year
2015-16 have been paid. The Company's shares are listed and traded at
NSE with ISIN Code 'INE 850E010I2' and Stock Code 'LFIC' with effect
from 15.04.2015.
(i) DEMATERIALISATION OF SHARES:
Your Company shares have been made available for dematerialisation
through the National Securities Depository Limited (NSDL) and Central
Depository Services India Limited (CDSL). As on 31st March 2015, 61.11%
of the shares in your Company have been dematerialized.
(ii) UN PAID / UN CLAIMED DIVIDEND:
In terms of the provisions of the Companies Act, the Company is obliged
to transfer dividends which remain unpaid or unclaimed for a period of
seven years from the declaration to the credit of the Investor
Education and Protection Fund established by the Central Government.
Accordingly, the Members are hereby informed that the 7 years period
for payment of the dividend pertaining to financial year 2007-2008 will
expire on October 20th, 2015 and thereafter the amount standing to the
credit in the said account will be transferred to the "Investor
Education and Protection Fund" of the Central Government.
6) AUDITORS:
i) Statutory Auditors:
The Auditors, M/s.M.Anandam & Co., Secunderabad and M/s.Brahmayya &
Co., Hyderabad Chartered Accountants, retire at this Annual General
Meeting and being eligible, offer themselves for reappointment.
ii) Intrernal Auditors:
M/s M.Bhaskara Rao & Co., Chartered Accountants performs the duties of
internal auditors of the Company and their report is reviewed by the
Audit Committee from time to time.
iii) Secretarial Audit:
According to the provisions of section 204 of the Companies Act, 2013
read with Rule 9 of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the Secretarial Audit Report
submitted by Company Secretary in Practice is enclosed as a part of
this report Annexure-A.
iv) AUDIT OBSERVATIONS:
There are no audit qualifications in the Company's financial statements
7) PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has not given Loans, Guarantees and Investments covered
under the provisions of section 186 of the Companies Act, 2013
8) PUBLIC DEPOSITS:
Your Company has not accepted any deposits from the public during the
year under review and there are no outstanding deposits as on 31st
March 2015. Further, the Company is registered with RBI as a "Non
Deposit Taking Company".
9) DIRECTORS' RESPONSIBILITY STATEMENT:
Pursuant to Section 134(5) of the Companies Act, 2013, Directors of
your Company hereby state and confirm that:
a) In the preparation of the annual accounts for the year ended 31st
March, 2015 the applicable accounting standards have been followed
along with proper explanation relating to material departures:
b) They 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
the company at the end of the financial year and of the profit of the
company for the same period:
c) The directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities.
d) They have prepared the annual accounts on a going concern basis.
e) They have laid down internal financial controls in the company that
are adequate and were operating effectively.
f) They have devised proper systems to ensure compliance with the
provisions of all applicable laws and these are adequate and are
operating effectively.
10) VIGIL MECHANISM :
In pursuant to the provisions of section 177(9) & (10) of the Companies
Act, 2013, a Vigil Mechanism for Directors and employees to report
genuine concerns has been established. The Vigil Mechanism Policy has
been uploaded on the website of the Company at www.lakshmifinance.org.
11) RELATED PARTY TRANSACTIONS :
Related party transactions that were entered during the financial year
were on an arm's length basis and were in the ordinary course of
business. There were no materially significant related party
transactions with the Company's Promoters, Directors, Management or
their relatives, which could have had a potential conflict with the
interests of the Company. Transactions with related parties entered by
the Company in the normal course of business are periodically placed
before the Audit Committee for its omnibus approval and the particulars
of contracts entered during the year as per Form AOC-2 is enclosed as
Annexure-B.
12) EXTRACT OF ANNUAL RETURN :
The details forming part of the extract of the Annual Return in Form
MGT-9 is annexed herewith as Annexure-C.
13) MANAGEMENT DISCUSSION AND ANALYSIS REPORT:
As required under Clause 49 of the Listing Agreements with Stock
Exchanges, the Management Discussion and Analysis Report is enclosed as
a part of this report.
14) CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
Your Company has taken adequate steps to adhere to all the stipulations
laid down in Clause 49 of the Listing Agreement. A report on Corporate
Governance is included as a part of this Annual Report. Certificate
from the Statutory Auditors of the company M/s. Brahmayya & Co.,
Chartered Accountants confirming the compliance with the conditions of
Corporate Governance as stipulated under Clause 49 of the Listing
Agreement is included as a part of this report.
15) CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE
EARNINGS AND OUTGO:
Information required under section 134(3)(m) of the Companies Act, has
not been given as the same is not applicable owining to the nature of
activites in foreign Currency is Nill.
16) CORPORATE SOCIAL RESPONSIBILITY (CSR) :
In terms of section 135 and Schedule VII of the Companies Act, 2013,
the Board of Directors of your Company have constituted a CSR Committee
w.e.f 25.05.2015. The Committee Comprises of three Independent
Directors namely Sri.R.Surender Reddy, Sri.Keshav Bhupal, Sri.Kapil
Bhatia and Sri.K.Harishchandra Prasad,Managing Director. CSR Committee
of the Board developed a CSR Policy and the functions of Committee
include review of CSR initiatives undertaken by the Company formation
and recommendation to the Board of a CSR policy indicating the
activities to be undertaken by the Company and recommendation of the
amount of the expenditure to be incurred for such activities. However,
during the year under review Section 135 of the Companies Act, 2013,
relating to the Corporate Social Responsibility is not applicable to
the Company and hence the same is not adopted.
17) REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL
(KMP) / EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of
The Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in
respect of employees of the Company and Directors is furnished
hereunder:
S. Name Designation Remuneration Remuneration
No paid F.Y paid F.Y
2014-15 2013-14
Rs. Rs.
1. Mr.K.Harishchandra Managing 53,84,519 41,32,000
Prasad Director
2. Mr.U.Vijaya Kumar CFO (KMP) 6,26,536 5,78,056
3. Smt.Suman Bung CS (KMP) 93,000 0
S. Name Increase in Ratio/Times
No remuneration per Median
from previous of employee
year -Rs. remuneration
1. Mr.K.Harishchandra 12,52,519 27
Prasad
2. Mr.U.Vijaya Kumar 48,480 5
3. Smt.Suman Bung 0 1
18) EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
Pursuant to the provisions Sec. 134 (3) (1) companies Act, 2013, there
were no material changes and commitments which affects the financial
statements of the Company during the year under review.
19) RISK MANAGEMENT COMMITTEE
A) Composition:
The Details of composition of the Committee are given below:
Name Designation Category
Sri.Keshav Bhupal Chairperson Non Executive Independent Director
Sri.R.Surender Reddy Member Non Executive Independent Director
Sri.K.Kapil Prasad Member Non Executive-Non Independent
Director
Sri.K.Harishchandra Managing
Prasad Director Executive-Non Independent Director
Role and Responsibilities of the Committee includes the following:
Framing of Risk Management Plan and Policy
* Overseeing implementation of Risk Management Plan and Policy
* Monitoring of Risk Management Plan and Policy
* Validating the process of risk management
* Validating the procedure for Risk minimisation.
* Periodically reviewing and evaluating the Risk Management Policy and
practices with respect to risk assessment and risk management
processes.
* Continually obtaining reasonable assurance from management that all
know and emerging risks have been identified and mitigated or managed.
20) ACKNOWLEDGEMENTS:
Directors take this opportunity to express their thanks to various
departments of the Central and State Government, Banks and Shareholders
for their continued support and guidance.
The Directors wish to place on record their appreciation for the
dedicated efforts put in by the Employees of the Company at all levels.
For and on behalf of the Board
Sd/- Sd/-
R. SURENDER REDDY K. HARISHCHANDRA PRASAD
Director Managing Director
Place: Hyderabad
Date: 25th May, 2015
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