Dear Members,

Your directors are pleased to present the 40th Annual Report of the Company along with the Audited Financial Statements for the financial year ended March 31,2024.

1. FINANCIAL HIGHLIGHTS AND STATE OF COMPANY'S AFFAIRS.

Rs. in Lakhs

Note:

The above figures are extracted from the audited financial statements of the Company prepared as per the Indian Accounting Standards (Ind AS).

2. PERFORMANCE REVIEW

During the year, the total income increased by approximately 20.74% while PAT increased by almost 43.15%.

During the financial year 2023-24, the Company recorded revenue from operations through Net Sales of Rs. 29,353.99/- Lakhs, compared to Rs. 24,030.24/- Lakhs in 2022-23, reflecting an increase of about 22.15 %.

The overall increase in turnover and profit can be attributed to the focused approach of the Company's management in improving productivity, capacity utilisation and growth. The Company is consistently striving towards meeting its sales and profit targets, and your directors are confident that these objectives will be realised as planned.

Furthermore, we request that shareholders to refer Management Discussion and Analysis Report also which forms part of this Report as Annexure B.

3. DIVIDEND

Currently, your Company is prioritising its expansion plans, and a significant portion of the profit is being reinvested back into the business with the focus on creating shareholders value. Therefore, your directors did not recommend any dividend for the financial year ended March 31,2024.

4. TRANSFER TO GENERAL RESERVE

The Company does not propose transferring any amount to the General Reserve for 2023-24.

5. SHARE CAPITAL

During the year under review, the Company has increased its authorised share capital from 20,00,00,000 (Rupees Twenty Crore Only) divided into 2,00,00,000 (Two Crore Only) equity shares of Rs.10/- (Rupees Ten Only) to Rs. 22,00,00,000 (Rupees Twenty-Two Crore Only) divided into 2,20,00,000 (Two Crore Twenty Lakhs Only) equity shares of '10/- (Rupees Ten Only).

Furthermore, the Company issued and allotted 6,00,000 (Six Lakh) Equity shares at Rs. 243.25/- each (including premium of Rs. 233.25/-) preferential allotment and 15,00,000 (Fifteen Lakh) warrants convertible into equity shares of the Company at Rs. 243.25/- each (including premium of Rs. 233.25/-) by way of preferential allotment.

As on March 31,2024, the paid-up equity share capital of the Company is Rs. 1,849.67 Lakhs and paid-up equity share capital on fully diluted basis is Rs. 1,999.67 Lakhs.

6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company does not have any Subsidiary, Associates or Joint Venture company either in India or abroad.

7. CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Composition

The Company's Board currently comprises 9 directors: four Executive Directors, three Independent Directors, and two Non-Executive Directors, including one Woman Director.

Mr. Mullapudi Lokeswara Rao, Managing Director; Mr. V. Sudhakara Reddy, Chief Financial Officer; and Mr. Gurprit Singh, Company Secretary, hold the office of Key Managerial Personnel. Mr. Mullapudi Srivias, Mr. Mullapudi Srikrishna, and Mr. Bollienei Kishore Babu hold the office of Whole-time Directors.

In accordance with the provisions of Companies Act, 2013, the tenure of Mr. Mullapudi Lokeswara Rao, Managing Director, Mr. Bollineni Kishore Babu, Mr. Mullapudi Srinivas, Mr. Mullapudi Srikrishna, Wholetime Directors will expire on September 30, 2024.

The Board at its meeting held on August 14, 2024, has recommended their re-appointment to the Shareholders at the ensuing AGM.

The appointment of Mr. K. Krishna Swamy, Non-Executive Director of the company, is due for retirement by rotation at the ensuing Annual General Meeting and he is eligible for re-appointment. The Board recommends his re-appointment to the shareholders.

The second term of Mr. B. R. Mahesh, Independent Director of the Company will conclude on September 29, 2024. The Board of Directors extends its heartfelt appreciation for Mr. Mahesh's valuable contributions and dedication throughout his tenure with the Company. His impact over the years has been greatly appreciated.

Further, on the recommendation of the Nomination and Remuneration Committee, the Board has recommended the appointment of Mr. Meka Yugandhar as an Independent Director of the Company at the ensuing Annual General Meeting effective from September 29, 2024 to September 28, 2029.

Mr. Dorairajan Balaji, Independent Director of the Company was appointed as an Independent Director of the Company at the 35th Annual General Meeting (AGM) held on September 27, 2019. The Board at its meeting held on August 14, 2024, has recommended the re-appointment of Mr. Dorairajan Balaji as an Independent Director of the Company effective from August 14, 2024 till August 13, 2029.

In accordance with the requirements of Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the continuation of appointment of Mr. K. Krishna Swamy, a Non-Executive Director, will be placed before the shareholders at the upcoming Annual General Meeting.

As mandated by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed information and profiles of the director's seeking appointment and re-appointment are provided in the notice and explanatory statement of the 40th Annual General Meeting.

Independent Directors

The Independent Directors have fulfilled the criteria of Independence as defined under Section 149(6) of the Companies Act, 2013, and requisite declarations in terms of Section 149(7) of the Companies Act, 2013, have been received.

During the year under review, a separate meeting of Independent Directors was held on March 04, 2024, in accordance with Schedule IV to the Companies Act, 2013 (Code for Independent Directors) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This meeting was convened without the attendance of Non-Independent Directors.

The meeting was attended by Mr. B.R. Mahesh, Mr. D. Balaji and Mr. S.S. Raman. Additionally, all directors of the Company have disclosed their interests to the Company pursuant to Section 184(1) of the Companies Act, 2013.

9. BOARD MEETINGS

During the year, a total of 9 meetings of the Board of Directors were convened and held. Comprehensive information regarding these meetings is provided in the Corporate Governance Report, which is enclosed with this report as Annexure D.

10. COMPANY'S POLICY RELATING TO DIRECTORS' APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES.

The Company has formulated a comprehensive policy that encompasses various aspects, including the appointment of Directors, remuneration for managerial roles, Director qualifications, their positive attributes, the assessment of Director independence, and other pertinent subjects as stipulated by Section 178(3) of the Companies Act, 2013. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the corporate overview section that forms part of this Annual Report. This policy has been made accessible on the Company's website at https://www.lokeshmachines. com/investment-center.php?key=policy.

11. AUDITORS

a) Statutory Auditors

As per the provisions of Section 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 (the Act), and the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force) and pursuant to recommendation of the Audit Committee and the Board of Directors, M/s. Brahamayya & Co., Hyderabad (ICAI Firm Regn. No.000513S) were appointed as Statutory Auditors of the Company at the 38th Annual General Meeting for a term of five years i.e., from conclusion of 38th Annual General Meeting till the conclusion of 43rd Annual General Meeting at a remuneration of Rs. 5,00,000/- per annum plus reimbursement of out of-pocket and travelling expenses, if any.

The Statutory Auditors' report forms part of the Annual Report. The notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

The Statutory Auditors have not made any qualification, reservations, or adverse remark or disclaimer in their report for the financial year ended on March 31, 2024, furthermore, no instances of fraudulent activities have been reported by the Auditors to the Company's Audit Committee during financial year under review.

b) Cost Auditors:

Based on the recommendation of the Audit Committee, the Board at its meeting on May 22, 2024, appointed M/s Naval & Associates, Cost Accountants (Firm Registration: 002319), to perform the audit of cost records for various segments of the Company for the financial year 2024-25.

In accordance with the provisions outlined in Section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration of cost auditors is placed for ratification by the shareholders of the Company at the 40th AGM.

c) Secretarial Auditors:

The Board, at its meeting held on May 22, 2024, appointed M/s. L.D. Reddy & Co., Practicing Company Secretaries, to conduct the Secretarial Audit of the Company for 2024-25. This appointment is in line with the requirements set out in Section 204 of the Companies Act, 2013, and Rule 9 thereof. The Secretarial Audit Report for the financial year 2023-24 is a part of this report as Annexure A.

Furthermore, the Secretarial Auditors have not made any qualification, reservations, or adverse remark or disclaimer in their report for the financial year ended on March 31,2024.

Furthermore, in accordance with regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, along with relevant circulars and guidelines issued under these regulations (referred to as "SEBI Listing Regulations"), the Company has undertaken an audit to ensure compliance with all applicable provisions of the SEBI Listing Regulations for the financial year 2023-24.

The Annual Secretarial Compliance Report, issued by Mr. L. Dhanamjay Reddy, Practising Company Secretary based in Hyderabad, has been duly submitted to the Stock Exchanges within the stipulated timeframe. A copy of this report has been attached as Annexure A2 to this document.

12. INTERNAL AUDIT, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board, at its meeting on May 22, 2024, appointed M/s K. S. Rao & Co., Chartered Accountants, Hyderabad having Firm Reg. No. 003109S as the Internal Auditors of the Company in place of M/s M V Narayana Reddy & Co., Chartered Accountants, (FRN: 002370S) The Board is of the opinion that in order to maintain transparency and good corporate governance it is important to rotate Internal Auditors at regular intervals.

The responsibility of Internal Auditors inter-alia includes conducting the Internal Audit for the year ending on March 31, 2025. The role of the Internal Auditors encompasses assessing the efficiency and effectiveness of the Company's systems and procedures. The Audit Committee plays a vital role in this process by approving and reviewing the internal audit report issued by the Internal Auditors.

Furthermore, the Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of fraud, error-reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. For more details, refer to the 'Internal control systems and their adequacy' section in the Management discussion and analysis report, which forms part of this Annual Report as Annexure B.

13. SECRETARIAL STANDARDS

The Directors have devised proper systems and processes for complying with the requirements of applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems were adequate and operating effectively.

14. PREVENTION OF INSIDER TRADING:

As per SEBI (Prohibition of Insider Trading) Regulation, 2015, as amended from time to time, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The Company has appointed Mr. Gurprit Singh, Company Secretary, as Compliance Officer w.e.f. June 16, 2021, who is responsible for setting forth procedures and implementation of the code for trading in Company's securities. During the year under review, there has been due compliance with the said code of conduct for the prevention of Insider trading.

15. DIVIDEND DISTRIBUTION POLICY

The Provision relating to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding formulation of Dividend Distribution Policy is not applicable to your Company.

16. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Provision relating to Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding submission of Business Responsibility and Sustainability Report is not applicable to your Company.

17. ANNUAL RETURN

The Annual Return filed by the Company is available on the Company's website at https:// www.lokeshmachines.com/investment-center. php?key=annual-returns06-16-01 and the Annual Return as on March 31, 2024 shall be uploaded on the website of the Company as & when filed with the Registrar of Companies, Hyderabad.

18. INDUSTRIAL RELATIONS

The employee relations have remained cordial throughout the year and industrial harmony was maintained. Measures for the safety, training and development of the employees continued to receive top priority. The Directors wish to place on record their appreciation of the valuable contribution made by the employees of the Company at all levels towards the performance and growth of the Company.

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

The Company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies Act, 2013. The details of the investments made by the Company are given in the financial statements.

20. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed in CSR Report which forms part of this report as Annexure C attached hereof. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report as Annexure D. This policy has been made accessible on the Company's website at https://www.lokeshmachines.com/investment-center. php?key=policy

21. INTERNAL COMPLAINTS COMMITTEE

The Company has in place a policy for prevention, prohibition and redressal against sexual harassment of women at workplace to protect women employees and enable them to report sexual harassment at workplace. An Internal Committee has been constituted consisting of optimum number of women for the said purpose. During the year under review, the Company has not received any complaint from any women employees and there were no pending complaints at the beginning or at the end of the financial year. This policy has been made accessible on the Company's website at https://www.lokeshmachines.com/investment-center. php?key=policy.

22. PERFORMANCE EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

As required under the provisions of Schedule IV of the Companies Act, 2013 the performance evaluation of independent directors has been done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure, and time schedule for the Performance Evaluation process for the Board, its Committees and Directors.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/ support to the management outside Board/ Committee Meetings.

The Independent Directors of the Company had also convened a separate Meeting for this purpose on March 04, 2024. The results from this evaluation process have been informed to the Chairman of the Board of Directors.

23. LISTING:

The equity shares of the Company are listed with BSE Limited (BSE), and National Stock Exchange of India Limited (NSE). There are no arrears on account of payment of listing fees to the said Stock Exchanges.

24. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors confirm that:

In preparation of annual accounts for the financial year ended March 31,2024.

a. the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b. 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 true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2024 and of the profit of the Company for the financial year;

c. The Directors have taken proper and sufficient care for their 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 on a 'going concern' basis;

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; and

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

25. CORPORATE GOVERNANCE REPORT

A report on compliance with the requirements of Corporate Governance has been attached as Annexure D. The certificate on compliance with the conditions of Corporate Governance is attached as Annexure D2.

26. FUND RAISING AND UTILISATION OF PROCEEDS FROM PREFERANTIAL ISSUE

During the financial year under review, your Company raised funds by issuing Equity Shares and Warrants through preferential allotment in accordance with the provisions of the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

The details of utilisation of such funds are as follows:

Furthermore, the Company has issued and allotted 6,00,000 (Six Lakh) Equity shares at Rs. 243.25/- each (including premium of Rs. 233.25/-) and 15,00,000 (Fifteen Lakh) warrants convertible into equity shares of the Company at Rs. 243.25/- each (including premium of Rs. 233.25/-) by way of Preferential Allotment.

27. CERTIFICATE FROM COMPANY SECRETARY IN PRATICE

Mr. L. Dhanamjaya Reddy, Practicing Company Secretary has issued a certificate as 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 companies by the SEBI/ Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed as Annexure D1.

28. NOMINATION AND REMUENRATION POLICY

On the recommendation of the Nomination and Remuneration Committee the Board of Directors has formulated a policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, and independence of a director and other matters and to frame proper systems for identification, appointment of directors & KMP Payment of Remuneration to them and Evaluation of their performance. This policy has been made accessible on the Company's website at https://www.lokeshmachines.com/investment-center. php?key=policy

29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure E forming part of the Annual Report.

Further, the disclosure required under section 197(14) of the Companies Act, 2013, is not applicable as the Company do not have any Holding or Subsidiary Company.

With regard to the provisions of Section 136(1) read with its relevant provision of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the registered office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary at cosecy@ lokeshmachines.com.

30. BOARD'S RESPONSE ON AUDITOR'S QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

During the year, there is no qualification, reservation or adverse remark or disclaimer made or reported by the auditors under the provisions of the Companies Act, 2013 read with SEBI Listing Regulations.

31. INSURANCE:

The Company takes a very pragmatic approach towards insurance. Adequate cover has been taken for all movable and immovable assets for various types of risks.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

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.

33. MATERIAL CHANGES AND COMMITMENTS

There are no Material changes and commitments affecting the financial position of the Company which occurred between the financial year ended March 31, 2024, to which the financial statements relates and the date of signing of this Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS:

A brief note on the Management discussion and analysis for the year is enclosed as Annexure B to this report.

35. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE OUTGO

Information required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) 2014, is enclosed herewith as Rules, in Annexure F.

36. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Company has been addressing various risks impacting the Company. The Policy of the Company on risk management is discussed as a part of the Management Discussion and Analysis Report.

The Company has developed and implemented a risk management policy for the Company including identification therein of elements of risks, which in the opinion of the Board may threaten the existence of the Company.

37. VIGIL MECHANISIM

In pursuant to the provisions of section 177 of the Companies Act, 2013 a Vigil Mechanism for directors and employees to report genuine concerns has been established. All employees of the Company are covered under the Whistle Blower Policy. This policy has been made accessible on the Company's website at https://www.lokeshmachines.com/investment-center. php?key=policy

38. PUBLIC DEPOSITS:

The Company has not accepted any deposits from the public.

Further, during the year under review, the Company received unsecured loan amounting to Rs. 695 lakhs from the Directors of the Company which was subsequently repaid by the Company during the year.

39. RELATED PARTY TRANSACTIONS:

Related party transactions entered during the financial year under review are disclosed in Note No. 40 of the Financial Statements of the Company for the financial year ended March 31,2024. These transactions entered were at an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. The Audit Committee granted approval as and when required and subsequently ratified by the Board of Directors. As required under the Act, the prescribed Form AOC-2 is appended as Annexure G to the Board's report.

40. THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

During the year under review, there are no proceedings, either filed by the Company or filed against Company, pending under the Insolvency and Bankruptcy Code, 2016, before Hon'ble National Company Law Tribunal or other Court.

41. ACKNOWLEDGEMENTS

Your directors wish to place on record their appreciation for the support and co-operation extended by the Shareholders, Bankers, Financial Institutions, Government Authorities, Stock Exchanges, Customers, Suppliers and other associates.

Your directors also wish to place on record their appreciation for the enthusiastic support received from the team of dedicated employees in the activities of your Company.