Lakshmi Electrical Control Systems Ltd

Board of Directors Rs. Report to Shareholders

Dear Shareholders,

The Board of Directors of your Company are pleased to present the Forty Fourth Annual Report on the business and operations of the Company along with the summary of financial statements for the financial year ended 31^st March 2025.

1. The State of Affairs of the Company Financial summary/highlights

Business and Operations

During the financial year under review, the Company has achieved revenue from operations to an extent of Rs. 21,231.22 Lakhs (previous financial year Rs. 33,796.50 lakhs) and has dropped by Rs. 12,565.28 lakhs over the previous financial year.

The profit before interest and depreciation is Rs. 1,037.25 Lakhs as against Rs. 2,271.05 Lakhs for the previous financial year. The profit after tax is Rs. 347.23 Lakhs as against Rs. 1,396.01 Lakhs for the previous financial year and has decreased by Rs. 1,048.78 Lakhs compared to the previous financial year.

The main revenue segment of the Company, Electricals achieved a turnover of Rs. 18,614.75 Lakhs (previous financial year Rs. 29,828.59 Lakhs). The Plastics segment recorded a turnover of Rs. 2,682.48 Lakhs (previous financial year Rs. 4,030.64 Lakhs). Both in Electricals and Plastics segments, the Company continues to put its efforts in increasing the productivity levels, reduction of cost and adding new customers. The revenue from Wind Power Generation was Rs. 62.37 Lakhs for the financial year ended 31 ^st March 2025.

Second Unit

The Board of Directors approved the proposal for shifting the Second Factory Unit from SF No. 157/1, Sadaikutti Ayyan Thottam, Annur Road, Pachapalayam Village, Coimbatore - 641107, Tamil Nadu (leased premises) to the new address at S.F. No. 156/2B and 156/3, Neelambur Village, Avinashi Road, Muthugoundenpudur Panchayat, Sulur Taluk, Arasur, Coimbatore District - 641407, Tamil Nadu (leased premises) due to administrative and operational requirements of the Company on 11^th April 2025. The Company will inform upon commencement of operations post shifting.

The Board recommends 40% dividend of Rs. 4.00/- (Rupees Four only) per equity share of the face value of Rs. 10/- (Rupees Ten only) each on the equity share capital of Rs. 2,45,80,000/- for the financial year ended 31^st March 2025. The dividend on equity shares is subject to the approval of the shareholders at the ensuing Annual General Meeting. Dividend will be paid to those equity shareholders whose names appear in the Register of Members as on 18^th August 2025 in respect of shares held in physical form and in respect of shares held in dematerialized form, the dividend shall be paid on the basis of the beneficial ownership as per the details furnished by the Depositories for this purpose at the end of business hours on 18^th August 2025.

The Company has not transferred any amount to the General Reserve during the year under review. However, an amount of Rs. 347.23 lakhs of the current year profits have been carried forward under the head retained earnings.

The paid-up capital of the Company as of March 31, 2025, stood at Rs. 245.80 Lakhs. During the financial year under review, your company did not make any fresh issue of shares.

Relationship with employees was cordial throughout the financial year.

As per requirements of the Companies Act, 2013 ( Rs.the Act Rs.), a copy of the annual return is available on the website of the Company https://www.lecsindia.com/investors/annual-return/

The Board of Directors of the Company met 4 (four) times during the financial year 2024-25. The details of meetings of the Board of Directors and Committees thereof and the attendance of the Directors in such meetings are provided under the Corporate Governance Report.

In terms of Section 134 of the Companies Act, 2013 the Directors, confirm that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

b. 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 that period;

c. have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. have prepared the annual accounts on a going concern basis;

e. have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

There is no instance of fraud reported by the statutory auditors of the Company for the financial year under review under sub section (12) of Section 143 of the Companies Act, 2013.

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1 )(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI (LODR) / Listing Regulations Rs.] so as to qualify themselves as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules / regulations of the SEBI (LODR).

The Independent Directors of the Company have complied with the requirements of the provisions in relation to Independent Directors Databank as stated in the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 and the Companies (Appointment and Qualification of Directors) Rules, 2014 as amended from time to time. The details of the familiarization programme undertaken have been uploaded on the Company Rs.s website.

As per the provisions of the Companies Act, 2013 and SEBI LODR a Nomination and Remuneration Committee was formed by the Board of Directors consisting of:

1. Sri. N. R. Selvaraj, Chairman (Non-Executive - Independent)

2. Sri. Arjun Balu, Member (Non-Executive - Independent)

3. Sri. C. Kamatchisundaram, Member (Non-Executive - Independent)

4. Sri. Ramesh Rudrappan, erstwhile Chairman (Non-Executive - Independent)*

5. Sri. Arun Selvaraj, erstwhile Member (Non-Executive - Independent)*

• During the financial year under review Sri. Ramesh Rudrappan and Sri. Arun Selvaraj completed the second consecutive term as Independent Directors and ceased to be Directors of the Company on 9^th August 2024. Accordingly, Sri. N. R.Selvaraj was designated as the Chairman and Sri. C. Kamatchisundaram was inducted as a Member of the Nomination and Remuneration Committee with effect from 10^th August 2024.

The said committee has been empowered and authorised to exercise widest powers as entrusted under the provisions of Section 178 of the Companies Act, 2013 and SEBI LODR. The Company has a policy on directors Rs. appointment and remuneration including criteria for determining qualification, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178. The policy is available on the Company Rs.s website https://www.lecsindia.com/wp-content/uploads/2025/03/NRC-Policy_2025_web.pdf

The salient aspects covered in the Nomination and Remuneration Policy:

The Company believes that the human resources are one of the most important valuable assets of the Company. As per the requirement of the provisions of the Companies Act, 2013 and SEBI LODR, to meet and attract the valuable asset and harmonize the payment to Directors, Key Managerial Personnel and other employees of the Company in line with the mission, visions and values of the Company. This policy has been formulated by the Nomination and Remuneration Committee for the Directors, Key Managerial Personnel and Senior Management personnel and approved by the Board of Directors.

The objective and purpose of this policy are:

• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors and persons who may be appointed in Senior Management and Key Managerial positions.

• To lay down guiding principle for remuneration payable to Executive Directors, Non - Executive Directors, Senior Management Personnel and Key Managerial Personnel.

• To determine the evaluation of performance of the Members of the Board including Independent Directors.

• To recommend remuneration based on the Company Rs.s size, financial position, trends and practices on remuneration prevailing in peer companies, if any.

• To provide them reward linking to their effort, performance, dedication and achievement in the Company Rs.s operations/performance.

• To design suitable remuneration package to attract, retain, motivate and promote best caliber directors and employees, create strong performance orientated environment and reward, achievement of meaningful targets over the short and long-term and create competitive advantage.

• To determine the criteria for qualifications, positive attributes, and independence of Directors.

• To determine whether to extend or continue the term of appointment of Independent Directors.

• Devising criteria for board diversity.

• Develop succession plan for the Board, Senior Management and Key Managerial Personnel.

There are no qualifications, reservations or adverse remarks or disclaimers in the reports of Statutory Auditors (appearing elsewhere in the Annual Report) and that of the Secretarial Auditors (annexed hereto as Annexure 1).

The Company has not given / made any Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013, during the year under review. Details of investments made in the earlier years have been disclosed in the notes to the financial statements.

The transactions entered by the Company with the related parties during the financial year 2024-25 are in the ordinary course of business and at arm Rs.s length basis. The particulars of material related party transactions is provided in the form AOC 2 and annexed to the Boards Rs. Report as Annexure - 2. The Policy on Related Party is available on the Company Rs.s website at https://www.lecsindia.com/wp-content/uploads/2025/03/RPT-Policy_2025_web.pdf

There were no material changes and commitments affecting the financial position of the Company between the end of financial year (March 31,2025) to which this financial statement relates and the date of this Report.

The disclosures under Rule 8(3) of the Companies (Accounts) Rules, 2014 are as under:

The Company follows a comprehensive and integrated risk appraisal, mitigation and management process. The risk management process of the Company is being periodically reviewed for improvement by the Board of Directors.

The Company has constituted a CSR committee of the Board of Directors and has adopted a CSR Policy. The same is posted in the Company Rs.s website https://www.lecsindia.com/wp-content/uploads/2021/12/CSR-Policy_LECS_2021.pdf The Committee consist of three directors Rs. viz., Sri. D. Senthilkumar, Smt. Nethra J.S. Kumar and Sri. Arjun Balu as on the date of this report. The meetings of CSR Committee were held on 23^rd May 2024 and 31^st July 2024. A report in prescribed format detailing the CSR spend for the financial year 2024-25 is attached herewith as Annexure-3 forming a part of this report.

On the advice of the Board of Directors, the Nomination and Remuneration Committee have formulated the criteria for the evaluation of the performance of Board of Individual Directors, Board as a whole, Committees of Directors, Independent Directors, Non-Independent Directors and the Chairperson of the Board. Based on that performance evaluation has been undertaken for the financial year 2024-25. The Independent Directors of the Company have also convened a separate meeting for this purpose. All the results and evaluation has been communicated to the Chairperson of the Board of Directors.

As per Rule 8(5) of the Companies (Accounts) Rules, 2014, the following additional information is provided:

Your Company has established adequate internal control procedures, commensurate with the nature of its business and size of its operations.

The accounting transactions and operations are audited by the Internal Auditor vis-a-vis the internal controls, policies and procedures and the deviations, if any, are reported and corrective actions are taken appropriately.

Sri. Sanjay Jayavarthanavelu, Director who retires by rotation at the ensuing Annual General Meeting, being eligible is not offering himself for re-appointment. The Board of Directors have resolved not to fill the vacancy so caused.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on 5^th June 2025 has appointed Sri. Sudesh Koti Reddy as an Additional Director in the capacity as Independent Director of the Company for a term of consecutive five years with effect from 5^th June 2025 subject to the approval of shareholders at the Annual General Meeting. The Board recommends his appointment at the forthcoming Annual General Meeting.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on 5^th June 2025 has recommended the re-appointment of Sri. Arjun Balu as an Independent Director of the Company for a second term of consecutive five years with effect from 28^th May 2026 subject to the approval of shareholders at the Annual General Meeting. The Board recommends his re-appointment at the forthcoming Annual General Meeting.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on 5^th June 2025 has appointed Sri. Vedhanth Senthilkumar as an Additional Director (Non-executive Non-independent) of the Company with effect from 5^th June 2025 subject to the approval of shareholders at the Annual General Meeting. The Board recommends his appointment at the forthcoming Annual General Meeting.

During the financial year 2024-2025 Sri. Ramesh Rudrappan, Sri. Arun Selvaraj and Sri. A. Palaniappan ceased to be Directors of the Company on 09.08.2024 due to completion of second consecutive term as Independent Director.

There was no incidence of resignation of any Director.

The Audit Committee of the Board of Directors consists of:

*During the financial year under review, Sri. Ramesh Rudrappan and Sri. A. Palaniappan completed the second consecutive term as Independent Directors and ceased to be Directors of the Company on 9^th August 2024. Accordingly, Sri. Arjun Balu and Sri. C. Kamatchisundaram were inducted as Members of the Audit Committee with effect from 10^th August 2024.

The Board has accepted the recommendations of the committee during the financial year under review.

The Company has devised a vigil mechanism in the form of a Whistle Blower Policy in pursuance of provisions of Section 177(10) of the Companies Act, 2013 and details whereof is available on the Company Rs.s website https://www.lecsindia. com/wp-content/uploads/2023/06/WHISTLE-BLOWER-POLICY_2023.pdf During the financial year under review, there were no complaints received under this mechanism.

Particulars pursuant to Section 197(12) & rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

a) The ratio of the remuneration of each director to the median employee Rs.s remuneration for the financial year and such other details as prescribed is as given below:

Note: For this purpose, sitting fees paid to the Directors have not been considered as remuneration.

*CMD has drawn salary of Rs. 82.63 lakhs.

# During the financial year under review, Sri. Ramesh Rudrappan, Sri. Arun Selvaraj and Sri. A. Palaniappan completed the second consecutive term as Independent Directors and ceased to be Directors of the Company on 9^th August 2024. Sri. C. Kamatchisundaram was appointed as an Independent Director of the Company with effect from 9^th August 2024.

b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Note: For the above purpose, sitting fees paid to the Directors have not been considered as remuneration.

*The percentage increase is inclusive of Provident Fund and provision for Gratuity, if any.

c) The percentage increase / (decrease) in the median remuneration of employees in the financial year: 27.28 %

d) The number of permanent employees on the rolls of company: 193

e) Average percentiles increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the Managerial Remuneration:

Average increase / (decrease) in remuneration is 18.74% for employees other than Managerial Personnel and while it is 16.71 % for Managerial Personnel (KMP and Senior Management). Smt. Nethra.J.S.Kumar, Chairperson and Managing Director Rs.s has not drawn any commission for the financial year 2024-25 [for the previous financial year 2023-24 Rs.1.57 lakhs commission was paid].

f) It is affirmed that the remuneration is as per the remuneration policy of the Company.

g) Particulars of Employees as per Rule 5(2) and Rule 5(3) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 are provided as Annexure-4 to this Report.

In the preparation of financial statements, no treatment different from that of prescribed accounting standards has been followed.

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and such systems are adequate and operating effectively. The Company has adhered with the applicable Secretarial Standards issued by The Institute of Company Secretaries of India.

As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on Corporate Governance practices followed by the Company, together with a certificate from the Company Rs.s Auditors confirming compliance forms an integral part of this Report.

The shares of the Company are listed in BSE Limited, Mumbai. The listing fees is paid up to date and the shares of the Company were not suspended for trading by the Stock Exchange at any time during the financial year under review.

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the applicability of providing the Business Responsibility and Sustainability Report does not arise.

The Company has transferred 3,633 equity shares, in respect of which dividend has not been claimed by the members for seven consecutive years or more to the Investor Education and Protection Fund Authority (IEPF) during the financial year 2024-2025. The Company also transferred Rs. 5,33,816/- of unclaimed dividend out of the dividend declared for the

financial year 2016-2017 to IEPF. Details of shares transferred and proposed to be transferred to IEPF have been uploaded on the website of the Company.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, M/s. Subbachar & Srinivasan, Chartered Accountants, the Statutory Auditors of the Company, hold office up to the conclusion of the Annual General Meeting to be held in the year 2026. The Company has received a certificate from the said Auditors that they are eligible to continue and hold office as the Auditors of the Company.

Pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company have recommended the appointment of M/s. MDS & Associates LLP, Company Secretaries, Coimbatore, to undertake the Secretarial Audit of the Company for the first term of five consecutive financial years from 2025-2026 for the approval of shareholders at the ensuing AGM.

MDS & Associates LLP have consented and confirmed their eligibility for appointment as Secretarial Auditors of the Company. The necessary resolution has been included in the Agenda of the Annual General Meeting Notice for approval of the shareholders.

M/s. MDS & Associates LLP have carried out an audit as per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and provided the Annual Secretarial Compliance Report for the financial year 2024-25. The Board recommends the appointment of the Secretarial Auditor.

The Board of Directors, on the recommendation of the Audit Committee, has appointed Sri.S.Subbaraman, Proprietor of S.Subbaraman & Associates, Cost Accountant in Practice as Cost Auditor for Cost Audit for the financial year 202526. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable for the financial years 2025-26 to the Cost Auditors of the Company is subject to ratification by the shareholders at the ensuing Annual General Meeting. The Board recommends the remuneration for members Rs. ratification.

Sri. V.C.Thirupathi of Tirupathi Associates, Chartered Accountants, Coimbatore who are the Internal Auditors have carried out internal audit for the financial year 2024-25. Their reports were reviewed by the Audit Committee.

Your Directors thank the customers, bankers, vendors, shareholders and other stakeholders for their continued support and patronage. The Directors wish to place on record their appreciation for the cooperation and contribution made by the employees at all levels towards the performance of the Company.