Lakshmi Engineering & Warehousing Ltd

Report of the Board of Directors to the Shareholders

Your Directors submit their Fiftieth Annual Report together with the Audited Balance Sheet as at 31^st March, 2024, the Statement of Profit and Loss, the Statement of changes in Equity and the Cash Flow Statement for the year ended 31^st March, 2024.

Financial Summary / Highlights

Dividend

For the Financial Year 2023-24, the Board of Directors at their meeting held on 23^rd May, 2024, have recommended a Dividend of T 12/- per share (12%) on the paid-up Share Capital of 6,68,750 Equity Shares of T 100/- each. subject to the approval of Shareholders, an amount of T 80.25 lakhs will be paid as Dividend after deducting applicable taxes (Previous Year - T 66.87 lakhs).

Operations

The operations during the year have resulted in a Net Profit of T 304.32 lakhs after providing for depreciation and amortization expenses of T 116.35 lakhs. The Net Profit after Tax for the year is T 230.21 lakhs.

The Company has two revenue segments ie. a) Warehousing Rental Services - Unit 1 at Hosur Industrial Complex, Hosur - 635 126 and b) Engineering Services - Unit 2 at Pollachi Road, Coimbatore - 642 109.

Warehousing Rental Services - Unit 1

The Warehousing Rental Services segment consists of Warehousing Rental Income on Land and Buildings at Hosur.

The income generated from Warehousing Rental Services during the year was T 815.50 lakhs against T 724.07 Lakhs in the previous year.

Engineering Services - Unit 2

The Engineering Services segment consists of Manufacture and Sale of Accessories and Spares of Weaving and Knitting Machines, Parts and Accessories for Machine Tools and Spares for other Textile Machineries.

The revenue from the Engineering Services Division during the year was T 755.28 lakhs against T 599.91 Lakhs in the previous year. increase in export orders for Spares and Accessories of Weaving Machines and domestic orders for Parts with better product mix resulted in higher revenue.

Outlook

The existing Building Space for Warehousing Services at Hosur has been leased to corporate tenants. The Building Plan for constructing an additional Warehouse of 40,000 Sq. Ft. at Hosur has been approved by the DTCP Chennai and the construction will commence on receipt of the Construction permission from Hosur Municipality.

Steps have been taken to increase the supply of Spares and Accessories of Weaving & Textile Machines to overseas and domestic consumers. Steps have been taken up to identify new supply areas in Automobile and Engineering Sectors and orders are expected during the Financial Year 2024-25.

Share Capital

The paid up Equity Share Capital as on March 31, 2024 is ' 668.75 lakhs comprising of 6,68,750 Equity Shares of ' 100/- each. During the year under review, the Company has not issued any shares or any convertible instruments.

Deposits

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013.

Annual Return

Pursuant to the provisions of Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company for the Financial Year ended 31.03.2024 is available in the Company?s website at www.lakshmiautomatic.com

Meetings of the Board and its Committees

Four Meetings of the Board of Directors were held on 25.05.2023, 09.08.2023, 10.11.2023, and 13.02.2024 during the Financial Year from 1^st April, 2023 to 31^st March, 2024. The intervening gap between the Meetings is within the period prescribed under the Companies Act, 2013.

Details of Attendance of Directors at the Meetings of the Board and its Committees during the Financial Year ended 31^st March, 2024 are as below:

The independent Audit Committee constituted consists of three independent Directors and one Non-Executive Director as its Members as below.

The Company Secretary is the Secretary of the Audit Committee.

Four Committee Meetings were held during the Financial Year ended 31^st March, 2024 on 25.05.2023, 09.08.2023, 10.11.2023 and 13.02.2024.

The Statutory Auditors, Internal Auditors, the Chief Technical Officer, the Chief Executive Officer and the Chief Financial Officer attend the Audit Committee Meetings on invitation.

Nomination and Remuneration Committee

The Committee has been set up as below with four Directors as Members of which two Members are independent Directors.

The Company Secretary is the Secretary of the Committee.

The Committee has met two times during the Financial Year ended 31^st March, 2024 on 09.08.2023 and 13.02.2024. Nomination and Remuneration Policy

The Board on the recommendation of the Nomination & Remuneration Committee has framed a Policy for selection and appointment of Directors and Key Managerial Personnel and approve their remuneration in terms of Section 178(3) of the Companies Act, 2013. The Nomination and Remuneration Policy as approved by the Board is disclosed on the Company?s website at the Link at: http://www.lakshmiautomatic.com/investors/policies/nomination-and- remuneration-policy/ in terms of the proviso to Section 178(4) of the Companies Act, 2013.

Salient Features of the Policy include:

• To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

• To determine remuneration based on the Company?s size and financial position and trends and practices on remuneration prevailing in peer Companies, in the manufacturing sector.

• To carryout evaluation of the performance of Directors, as well as Key Managerial and Senior Management Personnel.

• To compensate them to their effort, performance, dedication and achievement relating to the Company?s operations.

• To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons.

• To lay down such other functions as may be necessary as appropriate for the performance of the Directors. Annual Performance Evaluation

The Nomination and Remuneration Committee has laid down the criteria and the manner for effective evaluation of the performance of the Board, its Committees and individual Directors for the Financial Year 2023-24. Accordingly, a peer evaluation excluding the Director evaluated was carried out by the Board on 13.02.2024. By a questionnaire circulated, each Board Member was requested to give his/her views in evaluation of the Company performance, strategy and the performance of the Board, its Committees and individual Directors. Some of the performance parameters on which the Independent Directors were evaluated include Contribution, Commitment, Initiative, Integrity, Independence, Independent Views and Judgment, Fulfillment of Functions, Qualifications, Knowledge, Experience and Competency and Role in active participation in Board and Committee Meetings.

The Independent Directors at their Meeting held on 13.02.2024 reviewed the performance of Non-Independent Directors, the Board and the Chairperson of the Company.

The performance of the Key Managerial and Senior Management Personnel of the Company was evaluated based on their Qualifications, Experience and the Duties and Responsibilities carried out by them

Directors Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company state that:

a) in the preparation of the Annual Accounts for the year ended 31^st March 2024, the applicable Accounting Standards had been followed along with proper explanation relating to material departure, if any;

b) the Directors had 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 as at 31^st March 2024 and of the profit of the Company for the year ended 31^st March 2024;

c) the Directors had 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) the Directors had prepared the Annual Accounts for the Financial Year ended 31^st March 2024 on a going concern basis.

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

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

Declaration by Independent Directors

The Company has received declaration from all the Independent Directors of the Company in terms of Section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 confirming that they meet with the criteria of independence as prescribed under sub section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There are no qualifications, reservations or adverse remarks made by the Statutory Auditors, M/s.Subbachar & Srinivasan, Chartered Accountants, (Membership No.004083S) in the Auditors? Report on the financial statements for the year ended 31-03-2024.

Secretarial Auditor

The Board has appointed Mr.M.R.L.Narasimha, Practicing Company Secretary,(Membership No.2851, COP 799) to conduct Secretarial Audit for the Financial Year 2023-24. The Secretarial Audit Report for the Financial Year ended March 31, 2024 is annexed to this Report as Annexure 1.

As regards to the observation made in the Secretarial Audit Report which is self explanatory and your Directors wish to state that necessary steps have been initiated to ensure compliance with all applicable statutory requirements.

Particulars of Loans, Guarantees or Investments

The Company has not given any Loans or Guarantees covered under the provisions of Section 186 of the Companies Act, 2013.

Related Party Transactions

All Related Party Transactions entered into during the Financial Year were on arm?s length basis in the ordinary course of the business. No materially significant Related Party Transactions were made by the Company with Promoters, Key Managerial Personnel or other Designated Persons which may have potential conflict with the interest of the Company at large. Hence Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 is not applicable.

The Policy on materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board may be accessed on the Company?s website at the link at www.lakshmiautomatic.com/investors/ policies/related-party-transaction-policy/

Risk Management

The Company has laid down the Risk Assessment and Minimisation Procedures and on evaluation by the Audit Committee, are reviewed by the Board from time to time.

Corporate Social Responsibility

Your Company is not coming under the purview of the Corporate Social Responsibility under Section 135 of the Companies Act, 2013. However, the Company has taken cognizance of the impact of Environmental, Social and Governance (ESG).

Directors and Key Managerial Personnel

Sri R.Santharam and Sri N.Jayachandar, Directors of the Company retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment. A brief profile of the Directors retiring by rotation and seeking re-election, is annexed to the Notice of the ensuing Annual General Meeting.

Mr.B.Ashokkumar was appointed as the Chief Technical Officer (Senior Management) of the Company on 05.06.2023 and there were no other changes in the Key Managerial Personnel (KMP) during the year.

The details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are furnished in Annexure 2 forming part of the Board?s Report.

Internal Financial Controls

The Company has in place adequate Internal Financial Controls with reference to financial statements. The Internal Audit objectives, scope, functioning, periodicity and methodology is defined in the Internal Audit Programme. The quarterly Internal Audit Report is placed before the Audit Committee of the Board. The Internal Auditors monitor the adequacy of Internal Control Systems, Accounting Procedures and Policies of the Company and corrective actions based on the observations are taken wherever necessary. During the year, such controls were reviewed and no reportable material weakness in the system or operation was observed by the Audit Committee.

Auditors

M/s.Subbachar & Srinivasan, Chartered Accountants, had been appointed as the Statutory Auditors of the Company for a second term of five Financial Years, commencing from 2022-2023 to 2026-2027 at the 48^th Annual General Meeting held on 10^th August 2022.

The Company has received a Certificate from the Statutory Auditors to the effect that their continued appointment as the Statutory Auditors of the Company, would be within the limits prescribed under Section 139 of the Companies Act, 2013.

Report on Corporate Governance and Management Discussion and Analysis

The report on Management Discussions and Analysis (Annexure 3) forms part of the Annual Report.

Pursuant to Regulation 15(2)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the compliance with the Corporate Governance provisions as specified in Regulations 17 to 27 and Clauses (b) to (i) and (1) of sub-regulation (2) of Regulation 46 and para C, D and E of Schedule V shall not apply to the Company. Hence the reporting on Corporate Governance in a separate section is not furnished. The Certificate from the Auditors of the Company to this effect is furnished as Annexure 4 to the Annual Report. However, as a good Corporate Governance practice the Company is implementing the Corporate Governance Provisions and shall report the same in the Annual Report when it becomes applicable to the Company.

Vigil Mechanism

The Company has adopted the Vigil Mechanism / Whistle Blower Policy for Directors and Employees to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company?s Code of Conduct or ethics policy. No personnel is denied access to the Audit Committee. No protected disclosures were received by the Nodal Officer during the year ended 31^st March, 2024.

A copy of the Vigil Mechanism / Whistle Blower Policy is posted on the Company?s website at www.lakshmiautomatic.com

Disclosure under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal)

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints were received during the year under review.

Demat Suspense Account / Unclaimed Suspense Account

The Shares remained unclaimed were transferred to the Unclaimed Suspense Account. The details of the said Shares in Demat Suspense Account of the Company were:

General

Information with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is appended hereto.

Your Directors state that no disclosure or reporting is required in respect of the following items during the year under review as the Company has neither accepted Deposits from the public nor issued any differential right shares and shares (including Sweat Equity Shares) to the employees of the Company:

1. Details relating to Deposits from the Public covered under Chapter V of the Companies Act, 2013: Not applicable

2. Issue of Equity Shares with differential rights as to dividend, voting or otherwise in terms of Section 43 and 47 of the Companies Act, 2013 and the Rules made there under: Not applicable

3. Issue of shares (including Sweat Equity Shares) to employees of the Company under any scheme: Not applicable Your Directors further state that during the year under review:

1. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company?s operations in future.

2. There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the Financial Year under review and the date of this report.

3. The Annual Listing Fees for the year 2024-25 has been paid by the Company to BSE Limited.

4. No penalty or strictures have been imposed on the Company by the Capital Market Authorities for noncompliance of law, during the last three years.