Lee & Nee Software (Exports) Ltd

Dear Member's

We are pleased to present the Thirty Sixth (36 ) Annual Report of Lee & Nee Softwares (Exports) Ltd. ("the Company") together with the Audited (Standalone and Consolidated) Financial Statements for the Financial Year ended 31 March, 2024.

The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

The Company's financial performance (Standalone and Consolidated) for the financial year ended 31 March, 2024 is summarized below:

(All amount in Rupees Lacs unless otherwise stated)

During the period under review, at consolidated level, the Company achieved revenue of Rs.1029.18 lacs EBITDA Rs. 71.17lacs, PBT of Rs. 65.11 lacs and PAT of Rs. 49.80 lacs as compared to the revenue of Rs.826.26 lacs EBITDA Rs. 36.65 lacs, PBT of Rs. 30.60 lacs and PAT of Rs. 20.81 lacs respectively in the previous year.

On Standalone basis, the Company achieved revenue of Rs. 805.27 lacs EBITDA Rs. 54.55 lacs, PBT of Rs. 49.02 lacs and PAT of Rs. 33.55 lacs as compared to the revenue of Rs. 725.45 lacs EBITDA Rs. 30.99 lacs, PBT of Rs. 25.97 lacs and PAT of Rs. 18.41 lacs respectively in the previous year.

At the Standalone level the sales of the Company have increased by 29.14% as compared to previous year and at the Consolidated level also the sales of the Company has increased by 24.96% as compared to last year.

During the year under review, the Company and its subsidiaries reported an Operating Cash outflow of Rs. 63.88 Lacs as compared to Rs. 203.42 Lacs in the previous financial year. Consolidated Total Income was Rs. 1029.18 Lacs as compared to Rs. 826.26 Lacs. Our strong focus on sustainability and efficiency led us to achieve consistently high and positive operating cash-flows over the last two years. During the year we responded well to a challenging macroeconomic environment experiencing global supply chain challenges and inflationary price increases, which is a testament to the strength of our business model as well as the flexible, diversified supply chain structure we proactively built and have leveraged during this time.

The Company has as on 31 March 2024, two wholly owned subsidiaries viz. Lensel Web Services Private Ltd and Rituraj Shares Broking Pvt. Ltd. There has been no material change in the nature of business of the subsidiaries.

Apart from the information provided in the foregoing paragraph, there were no Companies which have become or ceased to be subsidiaries, associates and joint ventures during the financial year under review.

Pursuant to sub-section (3) of Section 129 of the Companies Act, 2013 a statement containing the salient features of the financial statement of a company's subsidiaries is given in Form No. AOC-1 annexed as 'Annexure I', which forms a part of this Annual Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statement of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of Subsidiaries, are available on the website of the Company https://lnsel.com/investor/

In terms of the Dividend Distribution Policy, as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, equity shareholders of the Company may expect dividend if the Company is having surplus funds and after taking into consideration the relevant internal and external factors as mentioned in the said Policy. Accordingly, considering the cash position, fund requirements for growth of business of your Company and the brought forward losses, the Board of Directors has not recommended any dividend for the financial year ended March 31, 2024. Accordingly, no amount is also proposed to be transferred to the reserves of your Company.

In terms of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Second Amendment Rules, 2017 the Company has not transferred any shares to Investor Education and Protection Fund Authority during the financial year 2023- 2024.

Financial Statements for the year ended 31 March 2024 are in accordance with the Indian Accounting Standards (IND-AS) notified by the Ministry of Corporate Affairs, Government of India, which have already become applicable to the Company.

The Company has not carried out any revision in its financial statements in any of the three preceding financial years as per the requirement under Section 131 of the Companies Act, 2013.

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposits) Rules, 2014. Therefore no such amount on account of principal or interest on deposits from public was outstanding as on the date of the Balance Sheet.

Hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the

Act is not applicable.

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and the date of this report.

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are found adequate. During the year under review, no material or serious observation has been received on inefficiency or inadequacy of such controls, from the Internal Auditors of the Company.

During the financial year 2023-24, no orders have been passed by any Regulator or Court or Tribunal which can have impact on the going concern status and on the Company's operations in future.

All contracts / arrangements / transactions entered by the Company during the financial year 2023-24 with related parties were in the ordinary course of business and on an arm's length basis .During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the company's policy of Materiality of Related Party Transactions read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 .

The Policy on dealing with related party transactions as approved by the Board may be accessed on the Company's website at the link https://lnsel.com/wp-content/uploads/2024/05/policy-on-related-party-transactions-1.pdf

The Directors draw attention of the members to Note No .25 of the standalone financial statement which sets out related party disclosures.

There are no Loans, Guarantees and Investments made under the provisions of Section 186 of the Companies Act, 2013 during the year under review.

Details of loans given, investments made, guarantees given and securities provided along with the purposes for which the loans or guarantees or securities are proposed to be utilized by the recipient(s) thereof are provided in details in Note Nos. 4.1, 4.2, 7.1 &7.4 of Standalone Financial statements.

As on 31 March, 2024, paid up share capital of the Company was Rs. 5577.40 lacs divided into 55,774,000 equity shares of Rs.10/- each. There was no change in share capital of the Company during the Financial Year 2023-24.

The Company has not issued any other shares with differential voting rights and sweat equity shares and hence, disclosures under Section 43(a)(ii) and Section 54(1)(d) of the Companies Act, 2013 read with relevant rules are not required to be furnished.

The Company does not have a scheme of ESOP and hence disclosures pursuant to Section 67(3) of the Companies Act, 2013 are also not required to be furnished.

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

In accordance with provisions of section 152 of the companies Act,2013 , Mr. Sagarmal Gupta (DIN: 00536428) Managing Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. Also he will attain the age of 75 years on 01/07/2025 for which a special resolutions is passed for the approval of the member. Additional information and brief profile as required under the SEBI Regulations for the Director seeking reappointment is annexed to the Notice of AGM.

Pursuant to Regulation 30 read with Para A of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform you that the second term of 5(five) years of Mr. Vikash Kamani (DIN: 06875355), and Miss Leela Murjani (DIN: 02413222), Independent Directors of the Company will come to an end on 26th September,2024 and consequently, will cease to be the Independent Directors of the Company with immediate effect i.e.; from end of day on 26th September ,2024 . The Board of Directors and the Management of the Company place on record their deep appreciation for the contributions made by Mr. Vikash Kamani and Miss Leela Murjani during their association with the Company over the years.

Your Company has laid down procedures to be followed for familiarizing the Independent Directors with your Company, their roles, rights, responsibilities in your Company and to impart the required information and training to enable them contribute significantly to your Company.

All the Independent Directors of the Company have given declarations that they meet the criteria of independence as laid down in section 149(6) of the Act and Regulation 16(1) (b) of Listing Regulations. The Independent Directors have also confirmed that they have complied with the Company's Code of Conduct.

During the year under review, the Independent Directors met on 10th February, 2024 without the presence of Non-Independent Directors and members of the Management and, inter alia: (i) reviewed the performance of Non-Independent Directors and the Board as a whole; (ii) reviewed the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

(iii) assessed the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively & reasonably perform their duties.

The details of the familiarization programme imparted to the Independent Directors of the Company are Uploaded on the website of the Company at https://lnsel.com/wp-content/uploads/2024/06/Familiarization-Programme-for-Independent-Director.pdf

The Nomination and Remuneration Committee identifies and ascertains the integrity, qualification, expertise, skills, knowledge and experience of the person for appointment as Director and Key Managerial Personnel. The appointment of a Director as recommended by the Nomination and Remuneration Committee requires approval of the Board.

The remuneration determined for Executive/ Independent Directors is subject to the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors. The Non-Executive Directors appointed on the Board are paid sitting fees for attending the Board and Board Committee meetings. No other remuneration or commission is paid to the Non-Executive Directors.

The Board has, on the recommendation of the Nomination & Remuneration Committee adopted and framed a Remuneration Policy for the Directors, Key Managerial Personnel and other employees pursuant to the provisions of the Companies Act, 2013 and SEBI Listing Regulations. The said Remuneration Policy forms part of this report and is annexed as 'Annexure-II' to this report. The same is also available on https://lnsel.com/wp-content/uploads/2023/09/remuneration-policy.pdf

The Board of Directors met 4 (four) times during the financial year 2023 - 2024 in accordance with the provisions of the Companies Act, 2013 and rules made thereunder. Detailed information on the Board Meetings is provided in the Corporate Governance Report which forms part of this Annual Report.

Disclosures with respect to the Board composition, Directors and Board meetings held during the financial year are covered under the Corporate Governance report forming part of this report, as per the Provisions of the Companies Act, 2013.

There are Four Committees of the Board of Directors of the Company viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee and Independent Directors Committee.

During the year detailed information on all the Committees is provided in the Corporate Governance Reportalong with the details of extract from Nomination and Remuneration Policy of the Company with respect to remuneration of Executive Directors, Key Managerial Personnel and other senior employees of the Company.Policies framed by the Board pursuant to the applicable provisions of the Companies Act, 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 are available on the Company's Website:https://lnsel.com/wp-content/uploads/2024/06/Corporate-Governance-Mar24.pdf

Pursuant to Section 134 (3) (C) and 134(5) of the Companies Act, 2013, the Board of Directors, to the best oftheir knowledge and ability, confirm that: i. In the preparation of the annual accounts, the applicable accounting standards had been followed alongwith proper explanation relating to material departures; ii. they 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 theCompany at the end of the financial year and of the profit of the Company for that period; iii. the Directors had 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 preventingand detecting fraud and other irregularities; iv. the Directors had prepared the annual accounts on a going concern basis; v. the Directors have laid down internal financial controls to be followed by the Company and such internalfinancial controls are adequate and are operating effectively; and vi. the Directors had devised proper systems to ensure compliance with the provisions of all applicable lawsand that such systems were adequate and operating effectively.

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors, employeesand others who are associated with the Company in confirmation with Section 177(9) of the Act and Regulation22 of Listing Regulations to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct. The Policy provides for adequate safeguards against victimizationof Employees/ Directors who avail the mechanism. The company affirms that no person has been denied access to the Audit Committee in this respect. The said policy is available on the website of the Company: https://lnsel.com/wp-content/uploads/2023/09/vigil-mechanismwhistle-blower-policy.pdf

The Board of Directors of the Company has designed Risk Management Policy and Guidelines to avoid events,situations or circumstances which may lead to negative consequences on the Company's businesses and definea structured approach to manage uncertainty and to make use of these in their decision making pertaining to allbusiness divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews.

In the opinion of the Board there is no such risk which may threaten the present existence of the Company.

The Company has policies and procedures in case of Leak of Unpublished Price Sensitive Information, for FairDisclosure has been framed with a view to preserve the confidentiality of unpublished price sensitive information, prevent misuse of such information while trading in Company's securities and ensure fairness indealing with all stakeholders. This Code for Fair Disclosure has been formulated pursuant to Regulation 8 of SEBI(Prohibition of Insider Trading) Regulations, 2015 ("Regulations") adopted and approved by the Board of theCompany Words and terms used in this Code for Fair Disclosure herein shall have meaning assigned thereto in the Regulations. The same can be found on the company's website: https://lnsel.com/wp-content/uploads/2023/09/Code-of-Practice-and-Procedure-for-Fair-Disclosure-of-Unpublished-Price-Sensitive-Information.pdf

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Nomination and Remuneration Committee has laid down the criteria for performance evaluation on the basis of which the Board has carried outevaluation of its own performance, the performance of Board Committees and of the Independent Directors individually.

The Board performance was reviewed on various parameters, such as, adequacy of the composition of the Board,Board culture, appropriateness of qualification & expertise of Board members, process of identification and appointment of Independent Directors, inter-personal skills, ability to act proactively, managing conflicts,managing crisis situations, diversity in the knowledge and related industry expertise, roles and responsibilities ofBoard members, appropriate utilization of talents and skills of Board members, etc.

The Board of Directors of the Company, based on the report of the Independent Directors and the Nomination andRemuneration Committee, evaluated the performance of Board and of individual Directors. The Board also carriedout the evaluation of performance of its Committees on various parameters, such as, adequacy of meetings in enhancing the effectiveness of the Committee, existence of a defined set of objectives/ terms of reference, etc.

The result of review and evaluation of performance of Board, it's Committees and of individual Directors was foundto be satisfactory.

The Company has in place adequate internal financial controls with reference to the Financial Statements. The controls are adequate for ensuring the orderly and efficient conduct of the business, including adherence to theCompany's policies, the safe guarding of assets, the prevention & detection of frauds & errors, the accuracy andcompleteness of accounting records and timely preparation of reliable financial information.

The matters related to Auditors and their reports for the year ended 31 March, 2024 are as under:-

M/s. N H Agrawal & Associates, Chartered Accountants, Kolkata (Firm Registration No. 327511E), were appointed as Statutory Auditors of your Company from the conclusion of Thirty Fourth (34^th) Annual GeneralMeeting (AGM) till conclusion of Thirty Ninth (39^th) AGM to be held in the year 2027, as required under Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014.

For the year under review, the statutory auditors have confirmed that they satisfy the independence criteriarequired under the Companies Act, 2013.

The Auditors' Report contains 'Unmodified Opinion' on the financial statements (Standalone and Consolidated) of your Company, for the year ended 31 March, 2024 and there are no qualifications reservations or adverse remarks in their report.

Pursuant to the provisions of Section 204 of the Act, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board of Directors of the Company has re-appointed Mrs. Rasna Goyal, a Practicing Company Secretary in Practice (CP No.-9209) to conduct the Secretarial Audit Report of the Company for the financial year 2023-24. The Secretarial Audit Report in Form MR-3, for the financial year ended 31 March, 2024 is annexed as 'Annexure-III (a)' to this Report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

Lensel Web Services Pvt Ltd., material subsidiary of your Company, has undertaken its secretarial audit for the financial year ended 31 March, 2024 by Mrs. Rasna Goyal, a Practicing Company Secretary in Practice (CP No.-9209) as 'Annexure-III-(b)' to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

In line with the Circular dated February 08, 2019 issued by the Securities and Exchange Board of India, Annual Secretarial Compliance Report for the year ended 31 March, 2024 confirming compliance of all applicable SEBI Regulations, Circulars and Guidelines by the Company was issued by Rasna Goyal, Practicing Company Secretaries and filed with the Stock Exchanges. The same is available on the website of the Company at www.lnsel.com.

The statutory auditor's report and the secretarial audit report do not contain any qualifications, reservations, or adverse remarks or disclaimer. Secretarial audit report is attached to this report.

Maintenance of cost records and requirements of cost audit as prescribed under the provisions of Section 148 (1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

During the year under Review, no instances of fraud were reported by the statutory auditors of the company.

Pursuant to Section 92(3), read with Section 134(3) (a), of the Act, a copy of the Annual Return of the Company as on the Financial Year ended 31 March, 2023, in Form No. MGT-7, can be accessed on the website of the Company https://lnsel.com/wp-content/uploads/2024/08/Extract-of-Annual-Return-MGT-7-2023.pdf

Further, pursuant to Section 92(3) of the Act, the Annual Return of the Company as on the Financial Year ended 31 March, 2024, will be duly uploaded on the website of the Company, at https://lnsel.com/reports/ upon filing of the same with the Registrar of Companies, under Section 92(4) of the Act.

The Company has laid down a robust Code of Business Conduct and Ethics, which is based on the principles of ethics, integrity and transparency. More details about the Code is given in the Corporate Governance Report.

During the year under review, no application was made by the Company or proceedings were pending under the Insolvency and Bankruptcy Code, 2016 against the Company or any of its Subsidiaries.

The Company has not done any one time settlement with any of the Lenders / Financial Institutions / Banks of any loan facility provided by them, therefore disclosure under the given head is not applicable.

Pursuant To Provisions of Section 134 of the Companies Act, 2013 Read With the Companies (Accounts) Rules, 2014. He Statement pursuant to section 134(3) (M) of the Companies Act, 2013 read with Rule 8(3) of the Company's (Accounts) Rules 2014 is annexed as 'Annexure-IV' forming part of this report.

Pursuant to Section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014, during the financial year under review, the Company was not required to spend any amount towards Corporate Social Responsibility activities. Further, as the provisions of the Section 135 were not applicable to the Company for the financial year 2023-24.

The Directors state that as per section 118(1) of the companies Act 2013, the applicable Secretarial Standards, i.e. SS-1 and SS -2, relating to 'Meetings of the Board of Directors' and 'General Meeting' respectively, have been duly followed by the Company.

Your Company has in place a policy on prevention of sexual harassment at work place in accordance with the provisions of Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013. The policy aims at prevention of harassment of women employees and lays down the guidelines for identification, reporting and prevention of sexual harassment. During the year under review there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Subject to the applicable provisions of the Companies Act, 2013, and applicable law, all documents, including the Notice and Annual Report shall be sent through electronic means (e-mail) in respect of members whose email IDs are registered in their demat account or are otherwise provided by the members.

A detailed Management Discussion and Analysis Report as required under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR") forms part of this Annual Report.

The Corporate Governance Report, in terms of Regulation 34(3), read with Schedule V, of the SEBI Listing Regulations, forms part of this Annual Report. The Company has obtained a certificate from the Statutory Auditors' of the company regarding compliance of conditions and the same forms part of this annual report and annexed as

'Annexure-V'.

The Company has laid down Code of Conduct to which the Board and Senior Management have affirmed compliance. The Code is displayed on the official website of the Company https://lnsel.com/reports/

Business Responsibility and Sustainability Reporting is not applicable to the Company, hence the disclosure under the given head is not made.

Your Directors place on record their appreciation for the help and co-operation received by them from ICICI Bank Ltd, Indusind Bank, RBL Bank Ltd, State Government of West Bengal and Department of Electronics & Department of Telecommunication under Ministry of Information & Technology Government of India, specially Software Technology Parks of India, WEBEL (West Bengal Electronics Industry Development Corporation Limited).

Your Directors also place on record their appreciation for the dedicated services rendered by the employees of your Company at all levels and thank the Company's customers, vendors, investors and academic partners for their continuous support. Our consistent growth is possible because of their hard work, solidarity, co-operation and support.