Your Directors have pleasure in presenting the Hundred and Fourteenth Year Annual Report together with the audited accounts of the Company for the year ended 31st March 2024.

FINANCIAL SUMMARY / HIGHLIGHTS

OPERATIONS

The Company’s Revenue from Operations increased by 5% from Rs. 24,040.40 Lakhs in 2022-23 to Rs. 25,296.90 Lakhs in 2023-24 and the Net Loss after Tax for financial year 2023 - 24 is Rs. 1,379.29 Lakhs as against the Net Loss of Rs. 501.20 Lakhs for the financial year 2022-23. The installed capacity increased from 1.33 to 1.44 lakh spindles during the year 2023-24. Due to adverse market conditions in domestic and export fronts, the production of yarn was affected resulting in lower turnover. As such the Company was not able to work in full capacity during the year under review.

The revenue segments of the Company continues to be structured with two business segments as (a) Textiles and (b) Rental Services.

CHANGE IN NATURE OF BUSINESS

There is no change in the nature of business operations of the Company during the year.

RENTAL SERVICES

The income generated from rental services during the year was Rs. 1,539.58 Lakhs (Previous year - Rs. 655.16 Lakhs).

EXPORTS

Your Company apart from manufacturing Cotton and Synthetic yarn have outsourced fabrics both for exports as well as for domestic market. Export of yarn and fabrics accounted for Rs. 4,415.47 Lakhs as against Rs. 5,188.21 Lakhs in the previous year, a decrease of around 14.89% from the previous year’s performance.

DIVIDEND

The Board of Directors of the Company have not recommended dividend for the financial year 2023-24. TRANSFER TO RESERVES

The Company has not transferred any amount to its Reserves during the year under review. However, an amount of Rs. 1,379.29 Lakhs of the current loss has been adjusted with the surplus under the head retained earnings.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

In terms of Sections 124 and 125 of the Companies Act, 2013, unclaimed or unpaid Dividend relating to the financial year 2016-17 is due for remittance to the Investor Education and Protection Fund established by the Central Government.

Further, pursuant to Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 708 Equity Shares of Rs.100/- each on which dividend had remained unclaimed for a period of 7 years has been transferred to the credit of Demat Account identified by the IEPF Authority during the year under review. As on 31st March 2024, 19,386 Equity Shares of the Company were in the credit of the Demat Account of the IEPF Authority.

During the year under review, unclaimed dividend amount of Rs. 2,48,085/- for the year 2015-16 has been transferred to IEPF Authority.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2024 was Rs. 6,95,55,000/- comprising 6,95,550 shares of Rs. 100/- each. During the year under review, the Company has not made any fresh issue of shares.

WEBLINK OF ANNUAL RETURN

The Annual Return of the Company for the financial year 2023-24 as required under Section 92(3) of the Companies Act, 2013 is available on the website of the Company at the link www.lakshmimills.com/annual-return.

BOARD MEETINGS AND ITS COMMITTEES CONDUCTED DURING THE PERIOD UNDER REVIEW

During the year under review, 4 Meetings of the Board of Directors, 4 Meetings of the Audit Committee, 2 Meetings of the Nomination and Remuneration Committee, 1 Meeting of the Corporate Social Responsibility Committee, 1 Meeting of the Stakeholders Relationship Committee and 21 Meetings of the Share Transfer Committee were held. Further details of the same have been enumerated in the Corporate Governance Report annexed herewith.

STATEMENT ON COMPLIANCE WITH SECRETARIAL STANDARDS

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

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements under Section 134(3)(c) of the Companies Act, 2013, with respect to the Directors’ Responsibility Statement, it is hereby confirmed that-

(i) In the preparation of the annual accounts for the year ended 31st March 2024, the applicable accounting standards have been followed and there were no material departures from those standards;

(ii) the Directors 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;

(iii) 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;

(iv) the Directors have 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 that such internal financial controls are adequate and operating effectively; and

(vi) the Directors have devised proper systems to ensure compliance with the provisions of the applicable laws and such systems are adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THE COMPANIES ACT, 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

There was no instance of fraud identified or reported by the Statutory Auditors during the course of their audit for the year to report to the Audit Committee and/or Board pursuant to Section 143(12) of the Companies Act, 2013 and rules framed thereunder.

DECLARATION OF INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and that their name is included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014. During the year, the Independent Directors of the Company had no pecuniary relationship or transactions with the Company other than sitting fees and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors and Committee(s). The details of remuneration and /or other benefits of the Independent Director are mentioned in the Corporate Governance Report. Further, they have also declared that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. In the opinion of the Board, the Independent Directors, fulfil the conditions of independence as specified in Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also confirmed that they have complied with the Company’s Code of Business Conduct & Ethics.

Based on the confirmation/disclosures received from the Directors and on the evaluation of the relationships disclosed, the following Non-Executive Directors are Independent:

Sri D. Rajendran, Sri Satish Ajmera, Sri Vijay Venkataswamy and Smt Suguna Ravichandran

Pursuant to Companies (Appointment and Qualification of Directors) Rules, 2014 the Certificate of Registration as required from all the Independent Directors of the Company was taken on note by the Board of Directors of the Company.

STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS DURING THE YEAR

The Board of Directors have evaluated the Independent Directors during the year 2023-24 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

FAMILIARIZATION PROGRAMMES

In compliance with the requirements of the Listing Regulations, the Company has put in place a familiarization programme for the Independent Directors to familiarize them with their roles, rights and responsibilities as Independent Directors, the working of the Company, nature of the industry in which the Company operates. The same is also available on the Company website at https://www.lakshmimills.com/familiarisation-programme.

COMPANY’S POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND OTHER MATTERS PROVIDED UNDER SECTION 178(3) OF THE COMPANIES ACT, 2013

The composition and attendance of the Nomination and Remuneration Committee of Directors of the Company are reported elsewhere in the Annual Report.

The Board of Directors has framed a policy which lays down a framework in relation to nomination, appointment and remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive Directors, Key Managerial Personnel and Senior Management. The policy also provides the criteria for determining qualifications, positive attributes and Independence of Directors and criteria for appointment of Key Managerial Personnel / Senior Management pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the SEBI Listing Regulations and their performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the appointees. The above policy has been posted on the website of the Company at - https://www.lakshmimills.com/investors/ Nomination-and-Remuneration-Policy.pdf.

AUDITORS’ REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. Subbachar & Srinivasan, Statutory Auditors.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the year under review, the Company has made investments and complied with the provisions of Section 186 of Companies Act, 2013 and the details in respect of investments have been disclosed in the notes to the Financial Statements.

However, the Company has not given any loans or guarantees or provided any securities covered under the provisions of Companies Act, 2013.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All the transactions of the Company during the year with the related parties were in the ordinary course of business and on an arm’s length pricing basis and not material in nature and thus a disclosure in Form AOC-2 is not required. Further, there are no material related party transactions during the year under review with Promoters, Directors or Key Managerial Personnel.

The policy on Related Party Transactions as approved by the Board of Directors of the Company has been uploaded on the website of the Company and may be accessed through the link at https://www.lakshmimills. com/investors/Policy-on-Related-Party-Transactions.pdf.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There is no material change or commitment affecting the financial position of the Company after the closure of the financial year as on 31st March 2024 and till the date of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required under section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is attached herewith as Annexure - 1 forming part of this report.

STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

The Company follows a comprehensive and integrated risk management process. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are reviewed and integrated with the management process such that they receive the necessary consideration during decision making by the Board of Directors.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

The Board had formed a Corporate Social Responsibility Committee comprising of the following Directors:

1. Sri S. Pathy - Chairman

2. Sri Aditya Krishna Pathy - Member and

3. Sri D. Rajendran - Member

The company has adopted a Corporate Social Responsibility Policy defining therein the CSR activities to be undertaken by the Company in areas or subjects specified in Schedule VII of the Companies Act, 2013. The Corporate Social Responsibility Committee of the Board is responsible for the implementation and effective monitoring of the CSR activities of the Company. The CSR policy may be accessed on the Company’s website https://www.lakshmimills.com/other-information.

The Company’s average net profits of the three immediately preceding financial years of the financial year 202324 is less than the prescribed limit as per Section 135 read with Section 198 of the Companies Act, 2013 and hence no amount has been prescribed/allocated for the CSR expenditure. Thus, no amount has been spent on the CSR activities of the Company for the financial year 2023-24.

The brief outline of the Corporate Social Responsibility (“CSR”) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out as Annexure-2 to this report in the format prescribed in the Companies (CSR Policy) Rules, 2014.

ANNUAL EVALUATION OF THE BOARD ON ITS OWN PERFORMANCE AND OF THE INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out the annual evaluation of its own performance, the individual Directors (including the Chairman) as well as an evaluation of the working of all Board Committees. The performance evaluation was carried out on the basis of the criteria laid down by Nomination and Remuneration Committee and the inputs received from all the Directors/Members of the Committees, considering the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The Independent Directors of the Company have also convened a separate meeting for reviewing the performance of the NonIndependent Directors and the Board as a whole and assessing the quality, quantity and timeliness of flow of information between the Company and the Board. The results of evaluation have been communicated to the Chairman of the Board of Directors.

DIRECTORS’ & KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Sri Sanjay Jayavarthanavelu, (DIN 00004505) Director is liable to retire by rotation at the ensuing Annual General Meeting (“AGM”) and being eligible offers himself for re-appointment.

The Board recommends his reappointment for the consideration of the Members of the Company at the forthcoming Annual General Meeting. Brief profile of Sri Sanjay Jayavarthanavelu is given in the Notice convening the Annual General Meeting.

In accordance with the provisions of Section 152 of the Act, upon completion of the second term of office as Independent Director - Sri Satish Ajmera, Sri D. Rajendran and Sri Vijay Venkataswamy are vacating the Office from the conclusion of the ensuing Annual General Meeting.

On the recommendations of the Nomination and Remuneration Committee in their ensuing meeting, the Independent Directors will be appointed for a consecutive period of 5 years at the ensuing Annual General Meeting.

The Key Managerial Personnel of the Company pursuant to Section 2(51) and 203 of the Companies Act, 2013 are Sri S. Pathy - Chairman and Managing Director, Sri Aditya Krishna Pathy - Deputy Managing Director, Sri N. Singaravel - Company Secretary and Sri A. Doraiswamy - Chief Financial Officer.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

The Company does not have any joint venture, subsidiary or associate company.

FIXED DEPOSITS

Since the Company has not accepted any fixed deposit covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March, 2024 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year does not arise.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

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

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Your Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable or significant deficiencies and no material weakness in the design or operation of any control were observed. The Audit Committee of the Board periodically reviews the Internal Financial Control Systems and their adequacy and recommends corrective action as and when necessary to ensure that an effective internal control mechanism is in place.

The Directors and Management confirm that the internal financial controls with reference to the Financial Statements are commensurate with the size and nature of business of the Company. A report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.

COMPOSITION OF AUDIT COMMITTEE AND VIGIL MECHANISM / WHISTLE BLOWER POLICY

The composition and attendance of the Audit Committee of the Board of Directors of the Company are disclosed in the Corporate Governance Report of the Annual Report. The Company has devised a vigil mechanism in the form of a Whistle Blower Policy to provide adequate safeguards to deal with instances of fraud and mismanagement and to report concerns about unethical behavior or any violation of the Company’s Code of Conduct in pursuance of provisions of Section 177(10) of the Companies Act, 2013 as explained in the Corporate Governance Report and also posted on the website of company and can be accessed at the link https://www.lakshmimills.com/

investors/Vigil-Mechanism-Whistle-Blower-Policy.pdf. During the year under review, there were no complaints received under this mechanism.

AUDITORS

STATUTORY AUDITORS

M/s. Subbachar & Srinivasan (Firm Registration No.004083S), Chartered Accountants, Coimbatore were appointed as the Statutory Auditors of the Company for a period of five years at the 112th Annual General Meeting of the company held on 9th September 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.

COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Audit and Auditors) Rules, 2014, as amended from time to time, the Board of Directors on the recommendation of the Audit Committee has reappointed M/s. A.R.Ramasubramania Raja & Co., (Firm Registration No. 000519) a firm of Cost Accountants, as the Cost Auditors to audit the cost records of the Company for the financial year 2024-25. M/s. A.R.Ramasubramania Raja & Co., have confirmed that their appointment is within the limits of section 141(3) (g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under section 141(3) and proviso to section 148(3) read with section 141(4) of the Companies Act, 2013.

The Audit Committee has also received a Certificate from the Cost Auditor certifying their independence and arm’s length relationship with the Company.

As per the provisions of the Companies Act 2013 read with the Companies (Cost Audit and Auditors) Rules, 2014, a resolution seeking Members’ approval for the remuneration payable to the Cost Auditors for the financial year 2024-25 forms part of the Notice convening the 114th Annual General Meeting of the Company for their ratification. Accordingly, the Board recommends for the resolution seeking Members’ ratification for the remuneration payable to M/s. A.R.Ramasubramania Raja & Co., Cost Auditors.

MAINTENANCE OF COST RECORDS UNDER SUB-SECTION (1) OF SECTION 148 OF THE COMPANIES ACT, 2013

The Company has maintained the Cost Records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Sri M.D.Selvaraj, FCS, Managing Partner of MDS & Associates LLP, Company Secretaries as the Secretarial Auditors of the Company for the year 202425 to undertake the Secretarial Audit of the Company. The Secretarial Audit Report for the financial year 2023-24 is annexed herewith as Annexure - 3 and forms an integral part of this Report. With respect to the observations made by M/s. MDS & Associates LLP, Company Secretaries, Coimbatore, Secretarial Auditors of the Company in their report for the year ended March 31, 2024, which are self-explanatory, your Directors wish to state that necessary steps have been initiated to ensure due compliance with all applicable statutory requirements.

CORPORATE GOVERNANCE

Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report, Report on Corporate Governance and Auditors Certificate regarding compliance of conditions of Corporate Governance provided elsewhere in this Report, forms part of the Directors’ Report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197(12) of Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure - 4 to this Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place a policy on Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received from any employee of the Company during the financial year 2023-24.

The following is the summary of sexual harassment complaints received and disposed of during the year 2023-24:

i. Number of complaints received - Nil

ii. Number of complaints disposed of - NA

CEO/CFO CERTIFICATION

As required under SEBI (Listing Obligations and Disclosure Requirements) Rules 2015, the Chairman and Managing Director (Chief Executive Officer) and the Chief Financial Officer have furnished necessary certificate to the Board on the financial statements presented for the year ended 31st March 2024.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR

No applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

ACKNOWLEDGEMENT

The Board acknowledges the continued support from the Bankers, Cotton, Yarn and Cloth Dealers of the Company and Shareholders and appreciates the valuable services rendered by the employees at all levels.

May the Goddess Lakshmi continue to shower her choicest Blessings for the prosperity of the Company in the years to come.

By Order of the Board For The Lakshmi Mills Co. Ltd., S. PATHY

Coimbatore Chairman and Managing Director

28^th May, 2024 (DIN 00013899)