Laxmipati Engineering Works Ltd

TO THE MEMBERS,

Your Directors take pleasure in presenting the 13^th Annual Report on the business and operations of your Company together with the Audited Accounts for the financial year ended 31^st March 2024.

1. FINANCIAL PERFORMANCE/ STATE OF AFFAIRS:

During the financial year ended 31^st March 2024, your company has recorded a total revenue of Rs. 4031.79 lakhs against Rs. 1526.55 lakhs in the previous year, representing increase of 164.11%. During the year, the company has incurred profit of Rs. 77.52 lakhs as compared to loss of Rs. 472.55 lakhs in the previous year. Financial performance of the Company for Financial Year 2023-24 is summarized below:

* Figures regrouped wherever necessary.

2. DIVIDEND:

Keeping in mind the overall performance and outlook for your Company, your Board of Directors recommend that this time the company is not declaring dividends as the company is at growing stage and requires funds for expansion. Your Directors are unable to recommend any dividend for the year ended 31^st March, 2024.

3. UNCLAIMED DIVIDEND:

There is no balance lying in unpaid equity dividend account.

4. SHARE CAPITAL:

As on 31/03/2024: Authorized Share Capital:

60,00,000 Equity Shares of Rs. 10/- Each for Rs. 6,00,00,000/- Issued, Subscribed and Fully Paid Up: 57,52,000 Equity Shares of Rs. 10/- Each for Rs. 5,75,20,000/-

There has been no change in the Equity Share Capital of the Company during the year.

5. MATERIAL CHANGES:

There have been no material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

6. TRANSFER TO RESERVES:

The Board of Directors of your company has decided not to transfer any amount to the Reserves for the year under review.

7. DIRECTORS? RESPONSIBILITY STATEMENT:

Pursuant to the requirement under Section 134 (3) (c) and 134 (5) of the Companies Act, 2013 with respect to Directors? Responsibility Statement, it is hereby confirmed that:

a. In the preparation of the annual accounts for the year ended March 31, 2024, the applicable Accounting Standards have been followed and there are no material departures from the same;

b. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the State of affairs of the Company as at March 31, 2024 and of the Profit & Loss of the Company for that 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. The Directors had prepared the annual accounts of the Company on a ‘going concern? basis; and

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

8. DECLARATION BY INDEPENDENT DIRECTOR:

All 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 of the Listing Regulations 2015. The Independent Directors of your Company have confirmed that they are not aware of any circumstance or situation, which could impair or impact their ability to discharge duties with an objective independent judgement and without any external influence. All the independent directors have cleared their exam "Online Self-Assessment Test" with the Indian Institute of Corporate Affairs at Manesar.

9. SEPARATE MEETING OF INDEPENDENT DIRECTORS:

In terms of requirement of Schedule IV of the Companies Act, 2013, the Independent Directors of the company have complied with the code of Independent Director. Independent Directors met separately on 12^th February, 2024 to inter alia review the performance of Non-Independent Directors (Including the Chairman), the entire Board and the quality, quantity and timeliness of the flow of the information between the Management and the Board.

10. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS:

The company has not given any loans or guarantees or made investments under section 186(4) of Companies Act, 2013.

11. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES:

The Company does not have any Subsidiary, Joint Venture or Associate Company.

12. EXTRACT OF ANNUAL RETURN:

As per amended section 92(3) of Companies Act, 2013 attachment of extract of annual return to Directors Report is discontinued. The Annual Return for FY 2023-24 is available on Company?s website at https://www.laxmipatiengineering.com.

13. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As per the Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, the Management Discussion and Analysis of the financial condition and results of consolidated operations of the Company under review, is annexed and forms an integral part of the Directors? Report, is given in Annexure I.

14. NUMBER OF MEETING HELD DURING THE YEAR:

The details of all meeting of board of directors and committee meeting had taken place during the year and their detailed composition along with their attendance forms the part of Corporate Governance Report as given in Annexure II.

The following Meetings of the Board of Directors were held during the Financial Year 2023-24:

15. CORPORATE GOVERNANCE:

Your company has incorporated the appropriate standards for corporate governance. The company has filed all the quarterly compliance reports on corporate governance within the due time line to the Stock Exchange, as specified in Regulation 27(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and all other Corporate Governance norms mentioned under the said regulation dully complied by the Company. Moreover, as per Regulation 34(3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 company gives the Corporate Governance Report in its Annual Report. Corporate Governance Report is as per Annexure II.

16. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

There was no employee drawing remuneration in excess of limits prescribed under section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The disclosures pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 are annexed in Annexure III.

17. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY?S OPERATIONS IN FUTURE:

There was no significant material order passed by the regulators or courts or tribunals impacting the going concern status and company?s operation in nature.

18. STATEMENT ON RISK MANAGEMENT:

During the financial year under review a statement on risk management including identification therein of elements of risk, if any, which in the opinion of the Board may threaten the existence of the company as per the provisions of Section 134(3) (n) of Companies Act, 2013; has been annexed in Annexure IV.

19. STATUTORY AUDITORS:

The members at the 11^th Annual General Meeting of the company held on 25^th August, 2022, had appointed M/s. R P R & Co., Chartered Accountants (Firm Registration No. 131964W) as the Statutory Auditor of the Company to hold office for a term of five years i.e., from the conclusion of the 11^th Annual General Meeting until the conclusion of the 16^th Annual General Meeting.

20. SECRETARIAL AUDITOR:

Your Board had appointed Mr. Ranjit Binod Kejriwal, Practicing Company Secretary to conduct Secretarial Audit for the term of 5 (Five) Years from the financial year 2024-25 to 2028-29. The Secretarial Audit Report for the financial year 2023-24 is annexed herewith in Annexure V. The Secretarial Auditor?s report is self-explanatory and as such they do not call for further explanations.

21. INTERNAL AUDITOR:

M/s. V.M. Patel & Associates, Cost Accountants were appointed as Internal auditor by the Board of Directors of the Company, based on the recommendation of the Audit Committee, for five years from financial year 2019-20 to 2023-24 in the board meeting held on 27^th May, 2019. The Internal Auditor reports their findings on the internal audit of the company to the Audit Committee on a quarterly basis. The Scope of Internal audit is approved by the Audit Committee.

Further the Board has appointed M/s R. Kejriwal & Co., Chartered Accountants, Surat (Firm Registration No. 133558W) as an Internal Auditor for five years from financial year 2024-25 to 2028-29 in place of M/s V.M. Patel & Associates due to completion of its tenure.

22. COMMENTS ON AUDITOR?S REPORT:

The notes referred to in the Auditor's Report are self-explanatory and as such they do not call for any further explanation.

23. MAINTENANCE OF COST RECORDS:

The company is not required to maintain Cost Records as specified by Central Government under section 148(1) of the Companies Act, 2013, and accordingly such accounts and records are not made and maintained.

24. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

The company has in place a robust process for approval of related party transactions and on dealing with related parties. The material related party transactions approved by the members of the company are also reviewed/ monitored on quarterly basis by the audit committee of the company as per Regulation 23 of the Listing Regulations and Section 177 of the Companies Act, 2013.

Your Board endeavors that all contracts/arrangements/transactions entered by the Company during the financial year with related parties are in the ordinary course of business and on an arm?s length basis only. The Policy on Related Party Transactions is uploaded on the website of the company at https://www.laxmipatiengineering.com/storage/app/media/11.%20Related%20Party%20transaction.pdf. Further all related party transactions entered into by the Company were in the ordinary course of business and were on an arm?s length basis are attached herewith in Form AOC-2 in Annexure VI.

EXCHANGE EARNINGS AND OUTGO:

The requirements for disclosure in respect of conservation of energy, technology absorption and foreign exchange earnings and outgo in terms of Section 134(3) (m) of the Companies Act, 2013 read with the rule 8 of Companies (Accounts) Rules, 2014 are annexed herewith in Annexure VII.

26. CEO / CFO CERTIFICATION:

In terms of Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the CFO has certified to the Board of Directors of the Company with regard to the financial statements and other matters specified in the said regulation for the financial year 2023-24. The certificate received from CFO is attached herewith as per Annexure VIII.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 are not applicable to the Company.

28. PUBLIC DEPOSIT:

The company has not accepted deposits from the public during the financial year under review within the meaning of Section 73 of the Act of the Companies Act 2013, read with Companies (Acceptance of Deposits) Rules, 2014.

Details of money received from Directors

29. BOARD EVALUATION:

The board of directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Act and the corporate governance requirements as prescribed by SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 ("SEBI Listing Regulations") based on the evaluation criteria defined by Nomination and Remuneration Committee (NRC) for performance evaluation process of the Board, its Committees and Directors. The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of the criteria such as the composition of committees, effectiveness of committee meetings, etc. The board and the nomination and remuneration committee reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. In addition, the chairman was also evaluated on the key aspects of his role. In a separate meeting of independent directors, performance of non-independent directors, performance of the board as a whole and performance of the chairman was evaluated, taking into account the views of executive directors and non-executive directors. The same was discussed in the board meeting that followed the meeting of the independent directors, at which the performance of the board, its committees and individual directors was also discussed. Performance evaluation of independent directors was done by the entire board, excluding the independent director being evaluated.

30. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In accordance with Section 152(6) of the Companies Act, 2013 read with the Articles of Association of the Company, Mr. Sanjaykumar Govindprasad Sarawagi (DIN: 00005468), Executive Director, retire by rotation and is being eligible has offered himself for re-appointment at the ensuing Annual General Meeting. Company?s policy on directors? appointment and remuneration is available in the web link https://www.laxmipatiengineering.com/storage/app/media/Nomination%20and%20Remuneration%20Policy. pdf.

Mr. Amit Khandelwal, Manager of the company is proposed to be re-appointed and Mr. Krishna Papaiah Mekala (DIN: 01685738) is proposed to be regularized as an Independent Director in the ensuing Annual General Meeting. Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act, 2013. The List of board of Directors and Key Managerial Personnel (KMP) for the F.Y. 2023-24 is as follow:

*Appointment of Mr. Krishna Papaiah Mekala have been made after the completion of financial year 2023-24; on 31^st August, 2024.

31. COMPOSITION OF BOARD AND ITS COMMITTEE:

The details of the composition of the Board and its Committees thereof and detail of the changes in their composition if any is given in Annexure II in the Corporate Governance Report. The composition of the Board and its committee is also available on the website of the company at below mentioned links respectively: https://www.laxmipatiengineering.com/board-of-directors & https://www.laxmipatiengineering.com/boards-committees

32. INTERNAL FINANCIAL CONTROL SYSTEM:

The Company has a well-placed, proper and adequate internal financial control system which ensures that all the assets are safeguarded and protected and that the transactions are authorized recorded and reported correctly. The internal audit covers a wide variety of operational matters and ensures compliance with specific standard with regards to availability and suitability of policies and procedures. During the year no reportable material weakness in the design or operation were observed. The internal auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting of the internal auditor to the Audit Committee of the Board.

33. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Companies Act, 2013 re-emphasizes the need for an effective internal financial control system in the company. Rule 8(5) (viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of internal financial controls with reference to the financial statements to be disclosed in the Board?s Report. The detailed report forms part of Independent Auditors Report.

34. WHISTLE BLOWER POLICY / VIGIL MECHANISM:

Your Company has established a mechanism called Vigil Mechanism/Whistle Blower Policy for the directors and employees to report to the appropriate authorities of unethical behavior, actual or suspected, fraud or violation of the Company?s code of conduct or ethics policy and provides safeguards against victimization of employees who avail the mechanism and also provides for direct access to the Chairman of the Audit Committee. The Vigil Mechanism/Whistle Blower Policy as approved by the Board is uploaded on the Company?s website.

The weblink of the policy is as mentioned below: https://www.laxmipatiengineering.com/storage/app/media/14.%20Vigil%20Mechanism%20Whistle%20Blow er.pdf

35. STATUTORY INFORMATION:

The company is engaged into the defence and heavy engineering and allied business and is the member of BSE SME Platform. Apart from this business, the company is not engaged in any other business/activities.

36. SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI):

The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

37. FRAUD REPORTING:

During the year under review, no fraud has been reported by Auditors under Section 143(12) of the Companies Act, 2013.

CORPORATE GOVERNANCE:

A certificate received from M/s R P R & Co., Statutory Auditors of the Company regarding compliance of the conditions of Corporate Governance, as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached herewith as per Annexure – IX.

39. CODE OF CONDUCT:

Board of Directors has formulated and adopted Code of Conduct for Board Members and Senior Management Personnel. During the year, Board of Directors and Senior Management Personnel has complied with general duties, rules, acts and regulations. In this regard certificate from Executive Director as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been received by the Board and the same is attached herewith as Annexure – X.

Code of Conduct for Board Members and Senior Management Personnel is available on below link: https://www.laxmipatiengineering.com/storage/app/media/3.%20Code%20of%20Conduct.pdf

40. CERTIFICATION FROM COMPANY SECRETARY IN PRACTICE:

Mr. Ranjit Binod Kejriwal, Practicing Company Secretary has issued a certificate required under the listing regulations, confirming that none of the Directors on the Board of the company has been debarred or disqualified from being appointed or continuing as director of the company by SEBI/Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed as Annexure - XI.

41. RESEARCH & DEVELOPMENT:

The Company believes that technological obsolescence is a reality. Only progressive research and development will help us to measure up to future challenges and opportunities. We invest in and encourage continuous innovation. During the year under review, expenditure on research and development is insignificant in relation to the nature size of operations of your Company.

42. INSURANCE:

All the properties and the insurable interest of the company including building and stocks wherever necessary and to the extent required have been adequately insured. The company keeps reviewing the insurance amount every year as per requirement.

43. PREVENTION OF INSIDER TRADING:

The Company has adopted a Code Of Internal Procedures And Conduct For Regulating, Monitoring And Reporting Of Trading By Insiders And Code Of Practices And Procedures For Fair Disclosure Of Unpublished Price Sensitive with a view to regulate trading in securities by the directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company?s shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the trading window is closed. The Board is responsible for implementation of the Code.

The Company has a Prohibition of Insider Trading Policy and the same has been posted on the website of the Company at: https://www.laxmipatiengineering.com/storage/app/media/7.%20Insider%20Trading%20Policy.pdf

PROHIBITION AND REDRESSAL) ACT, 2013:

Our company goal has always been to create an open and safe workplace for every employee to feel empowered, irrespective of gender, sexual preferences, and other factors, and contribute to the best of their abilities. The Internal Complaints Committee (ICC) has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGOs or with relevant experience. Half of the total members of the ICC are women. The role of the ICC is not restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. The Company did not receive any complaints on sexual harassment during the year 2023-24 and hence no complaints remain pending as of 31^st March, 2024.

The Company has a Policy for Anti-Sexual Harassment and the same has been posted on the website at below link: https://www.laxmipatiengineering.com/storage/app/media/9.%20Policy%20for%20Anti%20Sexual%20harass ment.pdf

45. OTHER DISCLOSURES

There are no proceedings initiated/ pending against your company under the Insolvency and Bankruptcy Code, 2016 and there is no instance of one-time settlement with any Bank or Financial Institution.

46. APPRECIATION:

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment and express their sincere thanks and appreciation to all the employees for their continued contribution, support and co-operation to the operations and performance of the company.

47. ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from Shareholders, Bankers, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in successful performance of the Company during the year.