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Lakshmi Machine Works Ltd.

BSE: 500252 Sector: Industrials
NSE: LAXMIMACH ISIN Code: INE269B01029
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OPEN 8098.00
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VOLUME 254
52-Week high 8870.00
52-Week low 3401.80
P/E 100.92
Mkt Cap.(Rs cr) 8,565
Buy Price 8010.10
Buy Qty 1.00
Sell Price 8018.45
Sell Qty 2.00

Lakshmi Machine Works Ltd. (LAXMIMACH) - Director Report

Company director report

Report to Shareholders

The Board of Directors of your Company are pleased to present theAnnual Report on the business of the Company along with the standalone summary ofFinancial Statements for the year ended 31st March 2021.

1. The State of Affairs of the Company Dividend and Reserve

The Board has prepared its report based on the standalone FinancialStatements of the Company and the Annual Report contains a separate section wherein areport on the performance and financial position of its wholly owned subsidiary company ispresented in Form AOC-1.

Financial summary/highlights and transfer to General Reserve (0 inLakhs)

Sl. No Particulars Current Year 2020-21 Previous Year 2019-20
1 Revenue from Operation 176885.14 166373.16
2 Operating Expenses 162098.14 154696.84
3 Exceptional Items 2211.54 209.76
4 Gross Profit 12575.46 11466.56
5 Depreciation 5155.89 5025.90
6 Profit before Tax 7419.57 6440.66
7 Provision for Tax 2673.56 1940.90
8 Net Profit after Tax: 4746.01 4499.76

Transfer to Reserve

The Company has transferred a sum of 0500 Lakhs out of the current yearprofits to the General Reserve.

Dividend:

The Board recommends a dividend of 010 /- per equity share having aface value of 010/- each (100%) on the equity share capital of 0106830000/- for theyear ended on 31st March 2021 aggregating to 01068.30 Lakhs. As per FinanceAct 2020 Dividend is taxable in the hands of the Shareholders. Dividend on equity sharesis subject to the approval of the Shareholders at the ensuing Annual General Meeting.

The unclaimed Dividend relating to the financial year 2013-14 is duefor remittance during September 2021 to the Investor Education and Protection Fund (IEPF)established by the Central Government.

During the year under review as per the requirements of the InvestorEducation and Protection Fund Authority

(Accounting Audit Transfer and Refund) Rules 2016 (IEPF Rules)14661 equity shares of 1310/- each on which dividend had remained unclaimed for a periodof 7 years have been transferred to the credit of the demat account identified by the IEPFAuthority. As on the date of this report the Company has transferred 55722 equity sharesto the credit of the demat account of the IEPF Authority.

As per the requirements of SEBI notification no. SEBI/LAD-NRO/GN/2016-17/008 dated 8th July 2016 the Company has formulated a DividendDistribution Policy which has been duly approved by the Board of Directors. A copy of theDividend Distribution Policy is available on the Company's website:www.lmwglobal.com.

STATE OF AFFAIRS:

OPERATIONS

A detailed overview of the global and Indian economy has been providedin the Management Discussion and Analysis Report. Also the state of affairs of eachdivision during the year under review has been provided in detail within the same report.

Overall the Company's gross turnover increased by 8.63% from3150863.92 Lakhs in 2019-20 to 3163888.58 Lakhs in 2020-21; the Profit beforeexceptional items and Tax stood at 39631.11 Lakhs as against 36650.42 Lakhs in 2019-20.

The Net Profit after Tax for financial year 2020 - 21 was 34746.01Lakhs as against 34499.76 Lakhs for financial year 2019-20.

TEXTILE MACHINERY DIVISION (TMD)

During the year under review the Textile Machinery Division had aturnover of 3112759.20 as against 3110796.80 Lakhs registered in 2019-20 an increaseof 1.77% over the previous year.

MACHINE TOOL DIVISION (MTD)

The Machine Tool Division reported a turnover of344434.06 Lakhs inFinancial Year 2020-21 as against 328931.92 Lakhs registered in 2019-20 an increase of53.58 % over the previous year.

FOUNDRY DIVISION (FDY)

The division reported a turnover of 35148.68 Lakhs in 2020-21 asagainst 38822.28 Lakhs in 2019-20 registering a decrease of 41.64 %. Exports accountedfor 28 % of the division's turnover.

ADVANCED TECHNOLOGY CENTRE (ATC)

Advanced Technology Centre clocked a turnover of 31546.64 Lakhs duringthe current financial year as against 32312.92 Lakhs achieved in 2019-20. Other incomeduring the period under review was 31341.41 Lakhs as against 31012.73 Lakhs in theprevious year.

REAL ESTATE ACTIVITY

The Elan Project at Parasakthi Nagar Ganapathy Coimbatore has beenpromoted by the Company in association with M/s. Sobha Limited (Developer). Spread over4.76 acres of land this project is for construction of 236 residential apartmentsconsisting of 1 BHK 2 BHK and 3 BHK. The Company has a revenue share of 30% in theproject. Entire project is completed with sale of all 236 residential apartments during FY2020-21. During the year under review the Company has received a revenue of 3666.30 Lakhsin this regard.

RENEWABLE ENERGY DIVISION

The Company has a policy of tapping non- conventional and renewableresources of energy namely wind/solar power to augment the sources from which it meets itsenergy requirements.

As on 31st March 2021 the Company has installed 28 WindEnergy Generators (WEG) with a total capacity of 36.80 MW. Cumulatively windmills havegenerated 652 Lakh units of power during 2020-21.

The Company also has a 10 MW of Solar Power Generating facility. As on31st March 2021 this facility has generated 212 Lakh units of power.

About 97% of energy demand has been met through renewable energy andthereby helped to reduce the power cost.

EXPORTS

During the year under review the Company has achieved an exportturnover as indicated below: (0 in Lakhs)

Division FY 2020-21 FY 2019-20
Textile Machinery 28483.91 25827.02
CNC Machine Tools 28.48 161.97
Castings 1459.49 3490.95
Aerospace Parts 837.70 1959.99
Total Exports 30809.58 31439.93

Export of Textile Machinery as stated above includes exports worth04188.59 Lakhs made to the wholly owned subsidiary company LMW Textile Machinery(Suzhou) Co. Ltd. China. Amongst other countries the Company's products areprimarily exported to countries like Bangladesh Turkey Nepal Indonesia and Vietnam.

RESEARCH AND DEVELOPMENT

The Research and Development efforts of the Company are focused on:

1. Developing eco-friendly sustainable energy efficient low carbonfootprint technology.

2. Developing technology for production of innovative machinery.

3. Developing end-products at optimal cost.

Separate Research and Development units have been established for thedevelopment of Textile Machinery and CNC Machine Tools. Both these facilities have beenrecognized by the Department of Science and Technology Government of India as in-house R& D facilities.

During the year under review the Company has filed applications for 12new patents and 2 Industrial Designs.

AWARDS

During the year 2020-21 the Company has received the following Awards:

1. TMMA — Best R&D Award for the product "Draw Frame LDB3"

2. CII Industrial innovation awards 2020 under the category "Top25 innovative company"

3. CII Industrial innovation awards 2020 under the category "Mostinnovative company"

INDUSTRIAL RELATIONS

Relationship with employees was cordial throughout the year.

SUBSIDIARY COMPANIES

1. LMW TEXTILE MACHINERY (SUZHOU) CO. LTD. (LMWTMSCL)

The turnover of the Company during the year under review was 08142.76Lakhs as against 01909.61 Lakhs achieved during the previous year. During the year theCompany has incurred a Net Loss of 0309.45 Lakhs as against a Net Loss of 01618.51 Lakhsduring the previous year.

II. LMW AEROSPACE INDUSTRIES LIMITED

The Company was incorporated on 16th March 2021 and thecapital was subscribed during April 2021. As on date the Company is yet to commenceoperations.

The consolidated Financial Statements incorporating the FinancialStatements of the wholly owned subsidiary company LMWTMSCL is attached to the AnnualReport as required under the applicable Accounting Standard(s) and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The english translated versionof the standalone Annual Financial Statements of the wholly owned subsidiary is posted inthe Company's website www.lmwglobal.com.

Besides the above the Company does not have any other Joint Venture /Associate Company.

2. Annual Return

As per the requirement of Section 92 of the Companies Act 2013 readwith Rule 12 of the Companies (Management

& Administration) Rules 2014 the Annual Return in the prescribedForm is available on the Company's website www.lmwglobal.com.

3. Number of Meetings of the Board.

During the year under review four (4) meetings of the Board ofDirectors were held. Further details regarding the number of meetings of Board ofDirectors and Committees thereof and the attendance of the Directors at such meetings areprovided under the Corporate Governance Report.

4. Directors' Responsibility Statement

The Directors' based on representation received from theOperating Management confirm that:

a. In the preparation of the annual accounts the applicable accountingstandards have been followed along with proper explanation relating to materialdepartures;

b. Have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

c. Have taken proper and sufficient care for maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

d. Have prepared the annual accounts on a going concern basis;

e. Have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f. Have devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and are operating effectively.

5. Share Capital

As on 31st March 2021 the authorized issued subscribedand paid-up share capital is as follows:

Authorized Share Capital 50000000 Equity Shares of 10/- each
Issued Subscribed and Paid-up Share Capital 10683000 Equity Shares of 10/- each

During the year under review there were no changes in CapitalStructure of the Company.

6. Nomination and Remuneration Committee and Policy

Nomination and Remuneration Committee of Directors has been formed andhas been empowered and authorized to exercise power as entrusted under the provisions ofCompanies Act 2013 and SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (both as amended from time to time). The Company has a policy onDirectors' / Senior Management appointment and remuneration which specifies criteriafor determining the qualification positive attributes for Senior Management andDirectors. The policy also specifies the criteria for determination of independence of aDirector and other matters provided under sub-section (3) of Section 178. The Nominationand Remuneration Policy is available at the Company's website www.lmwglobal.com.

7. Declaration by Independent Directors

The Independent Directors have submitted their disclosures to the Boardindicating that they comply with all the requirements that are stipulated in Section149(6) of the Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 so as to qualify themselves to act asIndependent Directors in the Company. Further they have also declared that they are notaware of any circumstance or situation which exists or may be reasonably anticipatedthat could impair or impact their ability to discharge their duties with an objectiveindependent judgment and without any external influence.

The Independent Directors of the Company have complied with therequirements of the provisions in relation to Independent Directors Databank as stated inthe Companies (Creation and Maintenance of databank of Independent Directors) Rules 2019and the Companies (Appointment and Qualification of Directors) Rules 2014 as amended fromtime to time.

8. Explanation and Comments on Audit Report

The report of Statutory Auditors (appearing elsewhere in this AnnualReport) and that of the Secretarial Auditors (annexed hereto as Annexure 1) areself-explanatory having no adverse comments. Further the Secretarial Compliance Reportfor the year ended 31st March 2021 issued by the Practicing Company Secretarypursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 has been filed with BSE Limited and the National Stock Exchange ofIndia Limited. A copy of the same is available on the Company's website:www.lmwglobal.com. There were no instances of fraud reported by the Auditors to theCentral Government or to the Audit Committee of the Company as indicated under theprovisions of Section 143 (12) of the Companies Act 2013.

9. Particulars of Loans/Guarantee/Investments/ Deposits

The Company has no Inter-Corporate Loans/Guarantees. Investments of theCompany in the shares of other companies is provided under notes to Balance Sheetappearing elsewhere in this Annual Report. The amount of investment made by the Companydoes not exceed the limits as specified in Section 186 of the Companies Act 2013.TheCompany has not accepted any Fixed Deposits.

10. Particulars of Contracts with Related Parties

All the transactions of the Company with related parties are atarms' length and have taken place in the ordinary course of business. None of thetransaction with related parties are material transactions. Since there are notransactions that are not in arms' length and material in nature disclosure underAOC 2 does not arise. A copy of the Related Party Transaction Policy is available at theCompany's website www.lmwglobal.com.

11. Material Changes

Company has subscribed to 2500000 equity shares of 10 eachamounting to 25000000 (Rupees Two Crores Fifty Lakhs only) in its wholly ownedsubsidiary company LMW Aerospace Industries Limited during April 2021. Also theCompany's Board at its meeting held on 24*h May 2021 has approved a Scheme of Arrangementwith LMW Aerospace Industries Limited ("LMWASIL") for demerger of the businessundertaking of Advanced Technology Centre ("ATC") into LMWASIL Besides thisthere are no material changes or commitments after closure of the financial year till thedate of this report.

12. Conservation of Energy Technology Absorption & ForeignExchange

The disclosure under Rule 8(3) of Companies (Accounts) Rules 2014 areas under:

STATEMENT FOR CONSERVATION OF ENERGY

Sl. No. Particulars Related Disclosures
(A) Conservation of Energy
(i) the steps taken or impact on conservation of energy; sources of energy; Company has invested in energy conservation devices to save power as detailed in point (iii) below.
(ii) the steps taken by the Company for utilizing alternate sources of energy Company has installed windmills with a capacity of 36.80 MW. The Company also has a photo-voltaic solar power generating facility with an installed capacity of 10 MW. The Company uses electricity generated from renewable sources for captive power consumption.
(iii) the capital investment on energy conservation equipment An amount of 40 Lakhs has been invested during 2020-21 for replacing 400/250-watt mercury vapour/fluorescent lamps with 120/100 watt LED lighting.

TECHNOLOGY ABSORPTION ADAPTATION AND INNOVATION

(B1) Technology Absorption — Textile Machinery Division

(i) Efforts made towards technology absorption; Technical guest lectures in various subjects and specializations / skill building exercises In-depth IPR analysis and review Theoretical simulation
(ii) (iii) Benefits derived like product improvement cost reduction product development or import substitution; In case of imported technology (imported during the last three years reckoned from the beginning of the financial year): Development of machinery with innovative features resulting in improved performance cost effectiveness localization of content and user friendliness to the end user
a) the details of technology imported;
b) the year of import;
c) whether the technology has been fully absorbed;
(iv) d) if not fully absorbed areas where absorption has not taken place and the reasons thereof; Expenditure incurred on Research and Development Capital Expenditure : 092.39 Lakhs
Revenue Expenditure : 01944.54 Lakhs
Total Expenditure : 02036.93 Lakhs

(B2) Technology Absorption — Machine Tool Division

(i) Efforts made towards technology absorption; Technical guest lectures in various subjects and specializations / skill building exercises
In-depth IPR analysis and review Theoretical simulation
ii) Benefits derived like product improvement Product improvement:
cost reduction product development or import Rigidity improvement in Turning Centre. Development /
substitution; upgrade in product range to bridge product gap and to redress / address customers requirements.
New Products under development: New products are being developed in the product verticals/ variants such as CNC Turning Centre Horizontal Machine Centre Vertical Machine Centre Drilling Tapping Centre and also in sub-system.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
a) the details of technology imported;
b) the year of import; Nil
c) whether the technology has been fully absorbed;
d) if not fully absorbed areas where absorption has not taken place and the reason thereof;
(iv) Expenditure incurred on Research and Development Capital Expenditure : Nil
Revenue Expenditure : K275.07 Lakhs
Total Expenditure : K275.07 Lakhs
(B3) Technology Absorption — Foundry Division
(i) Efforts made towards technology absorption; Technical guest lectures on various subjects and specializations / skill building exercises.
(ii) Benefits derived like product improvement cost reduction product development or import substitution; Implementation of GREENCO Practices.
As a part of the process initiatives are carried out for better energy efficiency water conservation use of renewable energy reduction of greenhouse gas emission material conservation waste management green supply chain life cycle assessment for our foundry units.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
a) the details of technology imported; Nil
b) the year of import;
c) whether the technology has been fully absorbed;
d) if not fully absorbed areas where absorption has not taken place and the reason thereof;
(iv) Expenditure incurred on Research and Development Nil
(B4) Technology Absorption — Advanced Technology Centre
(i) Efforts made towards technology absorption; Technical guest lectures on various subjects and specializations / skill building exercises.
(ii) Benefits derived like product improvement cost reduction product development or import substitution; Manufacture/development of components and subassemblies using metal/composite materials.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year):
a) the details of technology imported; Nil
b) the year of import;
c) whether the technology has been fully absorbed;
d) if not fully absorbed areas where absorption has not taken place and the reason thereof;
(iv) Expenditure incurred on Research and Development Nil

FOREIGN EXCHANGE OUTGO AND EARNINGS:

Foreign Exchange Earned 30977.88
Foreign Exchange Used 13777.09

13. Risk Management

The Company follows a comprehensive and integrated risk appraisalmitigation and management as stated in its Risk Management Policy. The identified elementsof Risk and Risk Mitigation measures are periodically reviewed and revised by the Board ofDirectors. The Board of Directors have also constituted a Risk Management Committee tooversee the Risk Management process.

14. Corporate Social Responsibility (CSR)

The Company has constituted a CSR Committee of the Board of Directorsand has adopted a CSR Policy. The same is posted in the Company's websitewww.lmwglobal.com. A report in the prescribed format detailing the CSR expenditure for theyear 2020-21 is attached herewith as Annexure 2 and forms a part of this report.

15. Evaluation of Board's Performance

On the advice of the Board of Directors the Nomination andRemuneration Committee of the Board of Directors of the Company have formulated thecriteria for evaluation of the performance of each individual Director Board as a wholeCommittees of the Board Independent Directors NonIndependent Directors and the Chairmanof the Board based on the criteria of evaluation as specified by SEBI CircularSEBI/HO/CFD/CMD/CIR/P/2017/004 dated 5th January 2017. Based on these criteriathe performance evaluation process has been undertaken. The Independent Directors of theCompany had also convened a separate meeting for this purpose on 27 th January2021. The results from this evaluation process has been communicated to the Chairman ofthe Board of Directors.

16. Additional Information

As per Rule 8(5) of the Companies (Accounts) Rule 2014 the followingadditional information is provided:

(i) The Financial summary or highlights The financial highlights including State of Affairs of the Company Dividend and Reserve have been provided elsewhere in this report.
(ii) The change in the nature of business if any There is no change in the business line of the Company.
(iii) The details of Directors or Key Managerial Personnel who were appointed or have resigned during the year Details regarding the changes in Directors who were appointed or have resigned during the year have been provided elsewhere in this report.
(iv) The names of companies which have become or ceased to be its Subsidiaries Joint Ventures or Associate Companies during the year LMW Aerospace Industries Limited was incorporated on 16th March 2021. However the capital was subscribed to during April 2021 and as on date the Company is yet to commence operations.
(v) The details relating to deposits covered under Chapter V of the Act The Company has not accepted any amount which falls under the purview of Chapter V of the Act.
(vi) The details of deposits which are not in compliance with the requirements of Chapter V of the Act. Not Applicable
(vii) The 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 Nil
(viii) The details in respect of adequacy of internal controls with reference to the Financial Statements Procedures are set to detect and prevent frauds and to protect the organization's resources both physical (eg. machinery and property) and intangible (e.g. reputation or Intellectual property such as trademarks). The Financial Statements are prepared in accordance with the Indian Accounting Standards issued by the Ministry of Corporate Affairs.
(ix) Maintenance of cost records under sub-section (1) of section 148 of the Companies Act 2013 Pursuant to the provisions of Section 148 (1) of the Companies Act 2013 read with Companies (Cost Records and Audit) Rules 2014 the Company was required to maintain cost records. Accordingly the Company has duly made and maintained the Cost Records as mandated by the Central Government.

17. Directors:

Sri K Soundhar Rajhan (DIN: 07594186) who retires by rotation at theensuing Annual General Meeting being eligible offers himself for reappointment. The Boardrecommends his reappointment in the forthcoming Annual General Meeting.

During the year under review consequent to issue of fresh nominationby Life Insurance Corporation of India ("LIC") Sri Anil Gupta (DIN: 08446779)was replaced by Sri T.C Suseel Kumar (DIN: 06453310) as the new Nominee Director of LIC onthe Board of the Company with effect from 27th January 2021.

The tenure of Sri Arun Alagappan (DIN:00291361) as an IndependentDirector of the Company expires on 25th October 2021. On perusal of variousfactors including the performance evaluation carried out the Board of Directors at theirmeeting held on 24th May 2021 have recommended the reappointment of Sri ArunAlagappan in the forthcoming Annual General Meeting as an Independent Director for asecond term of five consecutive years commencing from close of business hours of 25thOctober 2021.

Further the tenure of Sri Sanjay Jayavarthanavelu (DIN: 00004505) as aManaging Director of the Company expires on 31st March 2022. On perusal ofvarious factors including but not limited to the number of years association with theorganization expertise possessed outcome of the performance evaluation the Board ofDirectors at their

meeting held on 24th May 2021 have recommended thereappointment of Sri Sanjay Jayavarthanavelu as Managing Director for another term of 5years in the forthcoming Annual General Meeting.

Notice of candidature under Section 160 for the reappointment of SriArun Alagappan (DIN :00291361) has been received by the Company from a Shareholder.

18. Audit Committee / Whistle Blower Policy

The Audit Committee was formed by the Board of Directors and itconsists of:

1. Dr Mukund Govind Rajan Chairman (Non- Executive — Independent)

2. Sri Aditya Himatsingka Member (Non-Executive — Independent)

3. Justice Smt Chitra Venkatraman (Non-Executive - Independent)

The Board has accepted the recommendations of the Committee and therewas no incidence of deviation from such recommendations during the financial year underreview. The Company has devised a vigil mechanism in the form of a Whistle Blower Policyin pursuance of provisions of Section 177(10) of the Companies Act 2013 and detailsthereof is available on the Company's website at www.lmwglobal.com. During the yearunder review there were no complaints received under this mechanism.

19. Prevention of Sexual Harassment of Women at the Workplace

The Company has complied with the provisions relating to theconstitution of Internal Complaints Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013. Information regarding thesame is also provided in the Corporate Governance Report forming part of Directors'Report.

20. Listing of Shares

The shares of the Company are listed on BSE Limited Mumbai and on theNational Stock Exchange of India Limited Mumbai. Applicable listing fees have been paidup to date. The shares of the Company have not been suspended from trading at any timeduring the year by the concerned Stock Exchanges.

21. Overall Maximum Remuneration

Particulars pursuant to Section 197(12) of the Companies Act 2013 andRule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014:

a) The ratio of the remuneration of each Director to the medianemployee's remuneration for the financial year and such other details as prescribedis as given below:

Director Category Ratio
Sri Sanjay J ayavarthanavelu Executive - Chairman and Managing Director 91.87
Sri S Pathy Non-Executive - Non-Independent 1.37
Sri Aditya Himatsingka Non-Executive — Independent 1.37
Dr Mukund Govind Rajan Non-Executive — Independent 1.37
Sri Anil Gupta/ Sri T C Suseel Kumar1 Non-Executive - Non-Independent Nominee of LIC 1.37
Justice (Smt) Chitra Venkataraman (Retd) Non-Executive — Independent (Woman) 1.37
Sri Arun Alagappan Non-Executive — Independent 1.37
Sri K Soundhar Rajhan Executive- Non-Independent 23.42

Note: Sitting fees paid to the Directors has not been considered asremuneration.

1Amount paid to Life Insurance Corporation of India (LIC). LICreplaced the nomination of Sri Anil Gupta as the nominee Director of LIC with that of SriT C Suseel Kumar with effect from 27 th January 2021.

b) The percentage increase in remuneration of each Director ChiefFinancial Officer Company Secretary in the financial year:

Director Category % increase
Sri Sanjay Jayavarthanavelu Executive - Chairman and Managing Director 53.71
Sri S Pathy Non-Executive - Non-Independent Nil
Sri Aditya Himatsingka Non-Executive — Independent Nil
Dr Mukund Govind Rajan Non-Executive — Independent Nil
Sri Anil Gupta / Sri T C Suseel Kumar1 Non-Executive - Non-Independent Nominee of LIC Nil
Justice (Smt) Chitra Venkataraman (Retd) Non-Executive - Independent (Woman) Nil
Sri Arun Alagappan Non-Executive — Independent Nil
Sri K Soundhar Rajhan Executive Non-Independent -7.82
Key Managerial Personnel Category
Sri V Senthil Chief Financial Officer -19.51
Sri C R Shivkumaran Company Secretary -32.58

1Amount paid to Life Insurance Corporation of India.

Note: For this purpose Sitting Fees paid to the Directors has not beenconsidered as remuneration. The remuneration details are

for the year 2020-21 (Previous Year: 2019-20).

c) The Percentage decrease in the median remuneration of employees inthe financial year 13.61%

d) The number of permanent employees on the rolls of company: 2888

e) Average percentile increase already made in the salaries ofemployees other than the managerial personnel in the last financial year and itscomparison with the percentile increase in the managerial remuneration and justificationthereof and point out if there are any exceptional circumstances for increase in theManagerial Remuneration: Decrease

in average percentile of salary of employees other than managerialpersonnel is 1.08% as against increase in percentile of managerial remuneration of 35.36%on account of commission increase which is based on performance of the Company.

f) Affirmation that the remuneration is as per the remuneration policyof the Company: Yes

g) Particulars of Employees as per [Rule 5(2) and Rule 5(3) ofCompanies (Appointment and Remuneration of Managerial Personnel Rules) 2014]:

Particulars of Employees whose salary is not less than Rupees One Croreand Two Lakhs: Table 11 2

Name (Age in Years) Designation Gross Remuneration paid (in ^) Qualification Date of Commencement of employment (experience in years) Previous Employment
Sri Sanjay Jayavarthanavelu (52 Years) Chairman and Managing Director 50161956 MBA. 3rd June 1994 (26 Years)
Sri K Soundhar Rajhan (72 Years) Director — Operations 12784304 B.Sc. 9th July 1973 (47 Years) The Kovilpatti Lakshmi Roller Flour Mills Limited

1 Employment is contractual. The remuneration includesCompany's contribution to provident fund gratuity and perquisites.

2 The remuneration details are for the financial year 2020-21 andall other particulars are as on 31st March 2021. Besides the above there areno other employees in receipt of Remuneration/Salary for any part of the year at a ratewhich in the aggregate was not less than 0850000/- per month.

Particulars of Top Ten employees in terms of remuneration drawn: Table2: Employed for full year 1 2 3 & 4

Name (Age in Years) Designation Gross Remuneration paid (in ^) Qualification Date of Commencement of employment (experience in years) Previous Employment
Sreeramachandra Murthy Kaza (54 Years) President - MTD 6173070 B Tech. M Tech. PG Diploma. 14th February 2019 (2 Years) Elgi Equipments Limited
Sankar M (63 Years) President - TMD 6147624 B. Tech. 21st August 1985 (35 Years) Star Marketing Services Limited
Krishna Kumar N (63 Years) Senior Vice President - TQM 5522037 B.E. M.E. 1st July 1983 (37 Years) -
Venugopal V (63 Years) Senior Vice President Foundry 5348434 BE. ME. MBA. MS. 5th August 1981 (39 Years) -
Senthil V2 (42 Years) Chief Financial Officer 3802325 B.Com. ACA. 23rd January 2015 (6 Years) LMW Textile Machinery (Suzhou) Company Limited
Indraneel Bhattacharya (56 Years) Vice President - MTD - Marketing & Sales 3432705 DME. 8th February 1993 (28 Years) Batliboi & Company Limited
Harikrishna R (51 Years) Vice President -IT 3356404 BE.. 19th August 2019 (1 Year) Tata Projects Limited
Arunachalam C (56 Years) Vice President - TMD Global Sales 3298206 B. Tech. MBA. 3rd February 1992 (29 Years) J K Synthetics Limited
Sridhar S (60 Years) Vice President - ATC 3288810 BE. 2nd December 2019 (1 Year) Vikram Sarabhai Space Centre
Ananthan P (52 Years) Vice President - SCM 3244242 BE. 17th August 1989 (31 Years) -

Notes for Table 2:

*The remuneration includes Company's contribution to providentfund gratuity and perquisites.

2Except Sri V Senthil Chief Financial Officer who is a relative(daughter's husband) of Sri K Soundhar Rajhan Director Operations no other employeeis a relative (in terms of the Companies Act 2013) of any other Director of the Company.

3No employee of the Company is covered by the Rule 5(2) (iii) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 that isemployee holding by himself or with his family shares of 2% or more in the Company anddrawing remuneration in excess of the remuneration paid to Chairman and Managing Director.

4The remuneration details are for the financial year 2020-21 andall other particulars are as on 31st March 2021.

22. Corporate Governance:

As per Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 a separate section on Corporate Governance practicesfollowed by the Company is provided elsewhere in this Report. A report of the StatutoryAuditors of the Company confirming the compliance of conditions of Corporate Governance asrequired by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 isannexed to this report as Annexure 3 and forms a part of the report.

23. Auditors

Statutory Auditors

M/s S Krishnamoorthy & Co. Chartered Accountants (FRN:001496S)with Sri K Raghu as signing partner were appointed as Statutory Auditors of the Companyfrom the financial year 2016-17 at the Annual General Meeting ("AGM") heldduring 2016 for a term of five financial years commencing from 2016-17 and until 2020-21.Considering the performance and experience of M/s S Krishnamoorthy & Co a resolutionfor re-appointing M/s. S Krishnamoorthy & Co Chartered Accountants as StatutoryAuditors with Sri K Raghu and / or Sri B Krishnamoorthi as signing partner(s) for asecond term of five financial years has been proposed by the Board of Directors on therecommendation of the Audit Committee and the said appointment is subject to approval ofthe Shareholders at the ensuing Annual General Meeting.

Cost Auditor

Pursuant to Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 (as amended) the Directors on therecommendation of the Audit Committee have appointed Sri A N Raman Practicing Cost andManagement Accountant Chennai as the Cost Auditor of the Company for the Financial Year2021-22. The remuneration payable to the Cost Auditor is subject to ratification ofShareholders at the ensuing Annual General Meeting.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 theBoard of Directors have appointed M/s MDS & Associates Coimbatore CompanySecretaries in Practice to undertake the Secretarial Audit of the Company for thefinancial year 2021-22.

24. Business Responsibility Report

The SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 and amendments made thereto mandates inclusion of the Business Responsibility Report(BRR) as a part of the Annual Report for the top 1000 listed entities based on marketcapitalization. In compliance with the Regulation the BRR is enclosed as Annexure 4 andforms a part of the Annual Report.

25. Compliance with Secretarial Standards

The Directors have devised proper systems to ensure compliance with theprovisions of all applicable Secretarial Standards and that such systems are adequate andoperating effectively.

26. Acknowledgments

Your Directors thank all customers' for their continued supportand patronage.

The Directors also thank the Company's Bankers Selling AgentsVendors Central and State Governments for their valuable assistance.

The Directors wish to place on record their appreciation for thecooperation and contribution made by the employees at all levels towards the progress ofthe Company.

By order of the Board
Sanjay Jayavarthanavelu
Date : 24th May 2021 Chairman and Managing Director
Place : Coimbatore (DIN : 00004505)

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