Lakhotia Polyesters (India) Ltd

BOARD'S REPORT

To

The Members

Lakhotia Polyesters (India) Limited Nasik

Your directors are pleased to present the 19^th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2024.

1. FINANCIAL RESULTS

The Board's Report shall be prepared based on the standalone financial statements of the Company.

2. RESULTS OF OPERATIONS & STATE OF COMPANY'S AFFAIRS

During the financial year ended on March 31, 2024, there was gross revenue of Rs. 2847.91 Lakhs as against Rs. 1515.83 Lakhs in the Financial Year 2022-23. Your Company has earned a profit of Rs. 6.67 Lakhs during the year under review as against loss of Rs. 191.64 Lakhs in Financial Year 2022-23.

3. CHANGES IN THE NATURE OF BUSINESS. IF ANY

During the year the Company is in the business of manufacturing of Yarns, Packaging Films, Printing Films, Chemicals and many more to come. There is no change in nature of the business of the Company. The Company has its registered office at Nashik.

4. DIVIDENDS AND RESERVES

The Board of Directors do not recommend dividend to its shareholders during the FY 2023-24, keeping in view of further requirement of the funds for growth.

5. SHARE CAPITAL

The authorised share capital of the Company is Rs. 10,50,00,000 (Rupees Ten Crores and Fifty Lakhs only) comprising 1,05,00,000 equity shares of face value of Rs. 10/- each.

The paid-up equity share capital as at March 31,2024 stood at Rs. 10,47,39,880/- (Rupees Ten Crores Forty-Seven Lacs Thirty-Nine Thousand and Eight Hundred and Eighty Only).

There is no change in the share capital of the Company during the financial year ended on March 31, 2024.

The Company has not issued any equity shares with or without differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is 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.

6. PUBLIC DEPOSITS

The Company has neither invited nor accepted any public deposits during the period under review. No such deposits were outstanding at the beginning or end of the financial year.

7. SUBSIDIARY AND ASSOCIATE COMPANIES

As on March 31, 2024, Company does not have any subsidiary or associate or joint venture company.

8. CONSOLIDATED FINANCIALSTATEMENT

The Company is not required to consolidate its financial statements in terms of provisions of Companies Act, 2013 and rules thereunder.

9. CORPORATE GOVERNANCE

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the Secretarial Auditors on its compliance, forms an integral part of this Report.

10. ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return for the financial year ended on March 31, 2024 is available on the website of the Company at www.lakhotiapoly.in under Investor Information tab.

11. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no 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 loss of the Company for that period;

c) they 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) they have prepared the annual accounts on a going concern basis;

e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Pursuant to the provisions of Section 149 of the Act, the independent directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunderand Regulation 16(1 )(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company. As on March 31, 2024, Mr. Nikunj Bihani, Mr. Vashishtha Mohan Pandiya and Mr. Kanhaiya Lai Sharma are Independent Directors of the Company. Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act 2013.

b) The policy on Director's appointment and remuneration including criteria for determining qualifications, positive attributes, independence of Director, and also remuneration for Key Managerial Personnel and other employees, forms part of the Corporate Governance Report of this Annual Report.

c) Mr. Ashok Kumar Khajanchi retires by rotation at the ensuing 19th Annual General Meeting and being eligible, offers himself for re-appointment. A resolution seeking shareholders' approval for his re-appointment forms part of the Notice of the 19th Annual General Meeting.

d) During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, if any and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

13. MEETINGS

A calendar of Board Meetings, Annual General Meeting and Committee Meetings is prepared and circulated in advance to the Directors of your Company. During the Financial Year 2023-2024, the Board of Directors of the Company met 4(Four) times on 15-05-2023, 09-08-2023, 06-11-2023 and 09-02-2024.The details of these Meetings are provided in the Corporate Governance Section of the Annual Report. The maximum time gap between any two consecutive Meetings did not exceed one hundred and twenty days.

14. BOARD COMMITTEES

The Board had constituted/re-constituted various Committees in compliance with the provisions of the Act and the SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee.

All decisions pertaining to the constitution of Committees, appointment of Members and fixing of terms of reference/role of the Committees are taken by the Board.

The details of the role and composition of these Committees, including the number of Meetings held during the financial year and attendance at these Meetings are provided in the Corporate Governance Section of the Annual Report.

15. BOARD EVALUATION. INDUCTION AND TRAINING OF BOARD MEMBERS

Pursuant to the applicable provisions of the Act and the SEBI Listing Regulations, the Board has carried out an Annual Evaluation of its own performance, performance of the Independent Directors and the working of its committees based on the evaluation criteria specified by Nomination and Remuneration Committee for performance evaluation process of the Board, its Committees and Directors.

The Board's functioning was evaluated on various aspects, including, inter-alia, the structure of the Board, Meetings of the Board, functions of the Board, degree of fulfilment of key responsibilities, establishment, and delineation of responsibilities to various Committees and effectiveness of Board processes, information and functioning.

The Committees of the Board were assessed on the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of Meetings. The Directors were evaluated on aspects such as attendance, contribution at Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings.

As mentioned earlier, the performance assessment of Non-Independent Directors, Board as a whole and the Chairman were evaluated in a separate Meeting of Independent Directors. The same was also discussed in the Board Meeting. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

16. CRITERIA FOR SELECTION OF CANDIDATES FORAPPOINTMENTAS DIRECTORS, KEY MANAGERIAL PERSONNELAND SENIOR MANAGEMENT PERSONNEL

The Nomination and Remuneration Committee has laid down well-defined criteria, in the Nomination and Remuneration Policy, for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel.

The said Policy is available on the Company's website and can be accessed by weblink www.lakhotiapoly.in.

17. FAMILIARIZATION PROGRAM OF INDEPENDENT DIRECTORS

In compliance with the requirements of the SEBI Listing Regulations, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, Business overview etc.

The details of the familiarization program are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed by weblink www.lakhotiapoly.in.

18. INDEPENDENT DIRECTORS' MEETING

In terms of Schedule IV of the Act and Regulation 25 of the SEBI Listing Regulations, Independent Directors of the Company are required to hold at least 1 (One) meeting in a financial year without the attendance of Non-Independent Directors and Members of Management.

During the year under review, Independent Directors met separately on February 09, 2024, inter-alia; for

• Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole;

• Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors; and

• Evaluation of the quality, content, and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties;

19. A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY. EXPERTISE, AND EXPERIENCE (INCLUDING THE PROFICIENCY! OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR

The Company has received declaration from the Independent Directors that they meet the criteria of independence as prescribed under Section 149 of the Act and Regulation 16 (1)(b) read with Regulation 25(8) of the SEBI Listing Regulations. In the opinion of the Board, they fulfil the condition for appointment/re-appointment as Independent Directors on the Board and possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.

20. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS BYTHE COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 (if any) are given in the notes to the Financial Statements.

21. 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 behaviour, actual or suspected fraud or violation of the Company's Code of Conductor Ethics Policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and provides for direct access to the Chairman of the Audit Committee. It is affirmed that no person has been denied access to the Audit Committee.

The said Policy is available on the Company's website and can be accessed at www.lakhotiapoly.in

22. REMUNERATION AND NOMINATION POLICY

The Nomination and Remuneration Committee has laid down the framework for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by it and approved by the Board of Directors. The Policy, inter-alia, defines Key Managerial Personnel and Senior Management Personnel of the Company and prescribes the role of the Nomination and Remuneration Committee. The Policy lays down the criteria for identification, appointment and retirement of Directors and Senior Management. The Policy broadly lays down the framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The Policy also provides for the criteria for determining qualifications, positive attributes and independence of Director and lays down the framework on Board diversity.

The said Policy is available on the Company's website and can be at www.lakhotiapoly.in

23. RELATED PARTYTRANSACTIONS

The Company has developed a related party transactions framework through standard operating procedures for the purpose of identification and monitoring of transactions with the related parties.

The policy on related party transactions as approved by the Board of Directors has been uploaded on the website of the Company. None of the Directors has any pecuniary relationship or transactions vis-a-vis the Company.

The Company has not entered into any material related party transactions, which needs to be given in form AOC-2 in terms of the provision of section 188(1) including certain arm's length transactions.

24. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

25. STATUTORYAUDITORS

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014, M/s Sharp Aarth & Co. LLP, Chartered Accountants, (Firm Registration No. 132748W/W100823) was appointed as the Statutory Auditors of the Company to hold office from the conclusion of 17th AGM till the conclusion of 22nd AGM of the Company.

The Auditors' Report is unmodified i.e., it does not contain any qualification, reservation or adverse remark.

26. DETAILS OF FRAUD REPORTED BYAUDITOR

There were no frauds reported by the Statutory Auditors under provisions of Section 143(12) of the Companies Act, 2013 and rules made thereunder

27. COST AUDITANDCOST RECORDS

Provision of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company during the financial year under review.

28. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed R M Mimani & Associates LLP, Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as "Annexure - 1" and forms an integral part of this report.

The Secretarial Auditor's observations are self-explanatory.

29. SECRETARIAL STANDARD

The Company has complied with the applicable SS-1 (Secretarial Standard on Meetings of the Board of Directors) and SS-2 (Secretarial Standard on General Meetings) issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

30. TRANSFER OF UNCLAIMED DIVIDEND AND EQUITYSHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund Rules), 2016 (‘the IEPF Rules'), during the year under review, no amount of Unclaimed dividend and corresponding equity shares were due to be transferred to IEPF account.

31. INTERNAL CONTROL SYSTEMS ANDTHEIRADEQUACY

The Company has an adequate system of internal control to ensure that the resources are used efficiently and effectively so that:

• assets are safeguarded and protected against loss from unauthorized use or disposition.

• all significant transactions are authorized, recorded and reported correctly.

• financial and other data are reliable for preparing financial information.

• other data are appropriate for maintaining accountability of assets.

The internal control is supplemented by an extensive internal audits programme, review by management along with documented policies, guidelines and procedures.

As per Section 138 of the Companies Act, 2013, the Company has appointed Mr. V. B. Rathi., as an internal auditor for the year 2023-24 to conduct the internal audit and to ensure adequacy of the Internal controls, adherence to Company's policies and ensure statutory and other compliance through periodical checks and internal audit.

32. INTERNAL FINANCIAL CONROL AND THEIR ADEQUACY

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place forensuring properand efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Act.

33. RISK MANAGEMENT

During the financial year under review, the Company has identified and evaluates elements of business risk. Consequently, a Business Risk Management framework is in place. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks. The framework has different risk models which help in identifying risk trends, exposure and potential impact analysis at a Company level as also separately for business.

34. PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. The Company has a well formulated Policy on Prevention and Redressal of Sexual Harassment. The objective of the Policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This Policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy documentand are required to strictly abide by it. The Policy covers all employees, irrespective oftheir nature of employment and is also applicable in respect of all allegations of sexual harassment made by an outsider against an employee.

The Company has duly constituted an Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the year 2023-24, no case of Sexual Harassment was reported.

35. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Provision of Schedule VII of the Companies Act, 2013 read with Companies Corporate Social Responsibility Policy(CSR) Rules, 2014 are not applicable to the Company during the year under review.

36. ENVIRONMENT ANDSAFETY

Your Company is committed to ensure sound Safety, Health and Environmental (SHE) performance related to its activities, products and services. Your Company is taking continuous steps to develop Safer Process Technologies and Unit Operations and has been investing heavily in areas such as Process Automation for increased safety and reduction of human error element.

The Company is committed to continuously take further steps to provide a safe and healthy environment.

37. CONSERVATION OF ENERGY. TECHNOLOGYABSORPTION AND FOREIGN EXCHANGE EARNINGSANDOUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 are not applicable to the Company during the financial year under review.

38. PARTICULARS OF EMPLOYEESANDOTHERADDITIONAL INFORMATION

The information required under section 197 of the Companies Act, 2013 read with Rule 5 (1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company are given in "Annexure - 2 and 3" to this report.

39. MANAGEMENT DISCUSSION ANDANALYSIS

Management Discussion and Analysis Report for the year 2023-24 as stipulated under SEBI (LODR), Regulations, 2015 has annexed as "Annexure - 4" of this Report.

40. BUSINESS RESPONSIBILITYAND SUSTAINABILITY REPORT

The Business Responsibility Reporting as required under SEBI (LODR), 2015 is not applicable to your Company for the financial year under review.

41. CAUTIONARY STATEMENT

Statements in this Report, Management Discussion and Analysis, Corporate Governance, notice to the Shareholders or elsewhere in this Annual Report, describing the Company's objectives, projections, estimates and expectations may constitute 'forward looking statement' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the Market conditions and circumstances.

42. DISCLOSURE OF AGREEMENTS

Disclosure as required under para-F of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, are not applicable to the Company during the financial year.

43. STATEMENT PURSUANT TO SEBI LISTING REGULATIONS

The Company's shares are listed with BSE Ltd. Your Company has paid the respective annual listing fees and there are no arrears.

44. ACKNOWLEDGEMENTANDAPPRECIATION

Your directors would like to acknowledge and place on record their sincere appreciation to all Stakeholders, Clients, Financial Institutions, Banks, Central and State Governments, the Company's valued Investors and all other Business Partners, for their continued co-operation and support extended during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.