Latteys Industries Ltd Directors Report.

To,

The Members,

LAnEYS INDUSTRIES LIMITED

Dear Members,

Your Directors are pleased to present this Sixth (7") Annual Report of your company along with Audited Financial Statements for the Financial Year ended on March 31,2020.

FINANCIAL HIGHLIGHTS:

Particulars 2019-20 2018-19
Turnover 245,197,073.71 27,09,27,929.34
Other Income 3,225,111.53 32,33,265.13
Profit Before Depreciation, Interest and Tax (PBDIT)
Finance Cost 13,188,703.68 1,09,56,774.26
Depreciation and amortization expenses 8,861,539.90 68,44,006.54
Profit Before Tax 60,12,236.00 1,07,45,421.95
Tax Expenses:
Current Tax 22,51,724.00 29,49,894.00
Deferred Tax 4,39,648.79 1,23,836.00
Income Tax relating to earlier year
MAT Credit Entitlement
Profit after Tax 42,00,160.79 79,19,363.95

1. COMPANYS PERFORMANCE REVIEW:

•During the Financial Year ended March 31,2020, the Companys total Revenue from operations is Rs. 24,51,97,073.71/- as against Rs. 27,09,27,929.34/- in the corresponding previous Financial Year ended March 31,2019.

•The Profit after tax (PAT) for the Financial Year ended March 31, 2020 is 42,00,160.79/- as against Profit of Rs. 79,19,363.95/- in the corresponding previous Financial Year ended March 31,2019.

2. DIVIDEND

With a view to conserve the available resources, it has been proposed by the Board of Directors not to declare any Dividend for the financial year 2019-20.

3. RESERVES

The Company has closing balance of Rs. 9,38,56,911.75/- (Rupees Nine Crore Thirty Eight Lakhs Fifty six Thousand Nine Hundred Eleven only) as Reserve \and Surplus as on March 31,2020. The Closing Balance of Reserve and Surplus ^Js bifurcated as follows;

Particulars Amount
1. Securities Premium Reserve 6,42,93,196
2. Surplus in Statement of Profit & Loss 2,95,63,716
TOTAL 9,38,56,912

4. CHANGES IN NATURE OF THE BUSINESS, IF ANY

The Company Continued to carry Business of Manufecture of submersible pumps and Motors and hence, there was no change in the nature of business or operations of the Company which impacted the financial position of the Company during the year under review.

5. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company, subsequent to close of Financial Year 2019-20 till the date of this Report.

6. SHARE CAPITAL

During the year under review, there is no change in the Authorized, Issued, Subscribed and Paid-up Share Capital of the Company.

As at March 31,2020, the Authorized Share Capital of the Company is Rs. 50,000,000/- divided into 5,000,000/- equity shares of Rs. 10/- each.

Further, Issued, Subscribed and Paid-up Share Capital of the Company as at March 31,2020 is Rs. 45,996,660/- divided into 4,599,666/- equity shares of Rs. 10/- each.

7. DEPOSITS

During the year under review, the Company has not accepted or renewed any deposits from public falling within the purview of provisions of Section 73 and 76 of the Companies Act, 2013 ("the Act") and Rules framed thereunder.

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

The particulars of Loan, Guarantees and Investments covered under section 186 of the Companies have been disclosed in Notes to the Financial Statement.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arms length basis. During the year, the company had not entered into any contract or arrangement or transactions with related parties which could be considered material (i.e. transactions exceeding ten percent of the annual turnover as per the last audited financial statements entered into individually or taken together with previous transactions during the financial year) according to the policy of the Company on materiality of Related Party Transactions. Accordingly, there are no transactions that are required to be reported in form AOC-2. However, you may refer to Related Party transactions, as per the Accounting Standards, in Note No. 21.5 of the Financial Statements.

\ 10. SUBSIDIARY COMPANY / ASSOCIATE COMPANY / JOINT VENTURE

The Company does not have any subsidiary, joint venture or associate companies within the meaning of \?\Section2 (6) and 2(87) of the Companies Act, 2013. As such, a report in the prescribed Form AOC -1 as per first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rules made thereunder is not required to be attached and a policy for determining material subsidiary is not required to be framed by the Company.

1. DIRECTORS AND KEY MANAGERIAL PERSONNEL

I. The Directors and Key Managerial personnel of the Company as on 31st March, 2020 are as below:

Name Designation DIN/PAN
1 KAPOOR CHAND GARG Managing Director 00434621
2 PAWAN GARG Whole time Director 00434836
3 SAROJ GARG Director 03564480
4 SACHIN GUPTA Director 03637291
5 SANDEEP KUMAR MANGAL Director 07335831
6 VIRALBHAI HASMUKHBHAI PATEL CFO(KMP) BQFPP7432R
7 NIKHILKUMAR M. VADERA CS ANUPV7082L

II. During the current financial year 2019-2020 (Post 31** March 2020 till the Date of Boards Report):

Mr. NIKHILKUMAR MANSUKHBHAI VADERA has resigned from the post of Company Secretary & Compliance Officer with effect from June 30,2020.

III. Director - Retirement By Rotation:

Pursuant to Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended), Mr. PAWAN GARG (DIN: 00434836), retires by rotation and being eligible, offers herself for re-appointment.

The Board of Directors of the Company recommends the appointment of Mr. PAWAN GARG to the Shareholders for their consideration at the 7th Annual General Meeting in the interest of the Company. The brief resume and other details relating to Mr. PAWAN GARG as required to be disclosed under Regulation 36(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is incorporated in the annexure to the notice calling 7th Annual General Meeting of the Company.

IV. Declaration under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors:

The Company has duly complied with the definition of Independence according to the provisions of Section 149(6) of, read with Schedule IV - Code of Independent Directors to, the Companies Act, 2013 and Regulation 16 (1) (b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (as amended). All the Independent Director/s, have submitted a declaration that he/she \ meets the criteria of independence and submits the declaration regarding the status of holding other

12. SEBI Complaints Redress System (SCORES):

The investor complaints are processed in a centralized web based complaints redress systemN:\ The salient features of this system are centralized database of all complaints, online upload of Action Taken Reports (ATRs) by the concerned companies and online viewing by investors of actions taken on the complaint and its current status. Your Company has been registered on SCORES and makes every effort to resolve all investor complaints received through SCORES or otherwise within the statutory time limit from the receipt of the complaint. The Company has not received any complaint on the SCORES during financial year 2018-19.

13. BOARD AND COMMITTEE MEETINGS:

During the year under review the Board of Directors met 10 (Ten) times on April 2,2019, April 3, 2019, April 27, 2019, April 29, 2019, May 30, 2019, June 29, 2019, August 31, 2019, September 28,2019, December 25,2019 and February 26,2020. The interval between the two meetings was well within the maximum period mentioned under Section 173 of the Companies Act, 2013 and Regulation 17 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015.

Name of the Director No. of Board Meeting
Held Attended
1 KAPOOR CHAND GARG 10 10
2 PAWAN GARG 10 10
3 SAROJ GARG 10 10
4 SACHIN GUPTA 4 4
5 SANDEEP KUMAR MANGAL 4 4
6 VIRALBHAI HASMUKHBHAI PATEL 10 10
7 NIKHILKUMAR M VADERA 10 10

14. FORMAL ANNUAL EVALUATION PROCESS BY BOARD:

Pursuant to the provisions of the Companies Act, 2013 and rules made thereunder, the Board has carried the evaluation of its own performance, performance of Individual Directors, Board Committees including the chairman of the Board on the basis of attendance, contribution of various criteria as recommended by the nomination and remuneration committee of the Company.

The evaluation of the working of the Board, its committees, experience and expertise, performance of specific duties and obligations etc. were carried out. The Directors expressed their satisfaction with the evaluation process and outcome.

The performance of each of the Non Independent Directors (including the chairman) was also evaluated by the Independent directors at the separate meeting held of the Independent Directors of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

\/^ursuantto Section 134 (3) (C) of the Companies Act, 2013 the Directors confirm that:

Pursuant to Section 134 (3) (C) of the Companies Act, 2013 the Directors confirm that:

In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

The annual accounts have been prepared on a going concern basis;

They have laid down Internal financial controls for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information and;

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

16. CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out herewith as "Annexure-A" to this Report.

17. EXTRACT OF THE ANNUAL RETURN

As per the requirements of section 92 (3) of the Companies Act, 2013 and Rules framed thereunder, the extract of the Annual Return for the Financial Year ended March 31, 2020 is given in "Annexure-B" in the prescribed Form MGT-9, which forms part of this Report.

18. CORPORATE GOVERNANCE

Since the Companys securities are listed on SME Emerge Platform of National Stock Exchange (NSE), by virtue of Regulation ISofSEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, The compliance with the corporate governance provisions as specified in regulations 17 to 27 and clause (b) to (i) of sub-regulation (2) of regulation 46 and para C, D and E of schedule V are not applicable to the Company. Hence Corporate Governance does not form part of this Boards Report.

19. COMPLIANCES OF SECRETARIAL STANDARDS

The Company is in compliance with all the applicable standards issued by the Institute of Company Secretaries of India.

20. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has its internal financial control systems commensurate with the size and complexity of its operations, to ensure proper recording of financials and monitoring of operational effectiveness and compliance of various regulatory and statutory requirements. The management regularly monitors the safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records including timely preparation of reliable financial information.

The internal auditor consults and reviews the effectiveness and efficiency of the internal financial control systems and procedure to ensure that all the assets are protected against loss and that the financial and operational information is accurate and complete in all respects. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Company.

21. PARTICULARS OF EMPLOYEES

The Company has no employee, who is in receipt of remuneration of Rs 8,50,000/- per month or Rs 1,02,00,000/- per annum and hence the Company is not required to give information under sub rule 2 and 3 of rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Further the following details forming part of /\nnexure C to the Board Report.

Pursuant to Rule 5(2) of the Companies (Appointment and remuneration of managerial personnel) Rules, 2014 statement containing the names and other particulars of Top Ten employees in terms of remuneration drawn by them.

Disclosure Rule 5 of the Companies (/Appointment and Remuneration of Managerial Personnel) Rules, 2014.

22. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required under Regulation 34 and Scf of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is furnish( Annexure D.

23. AUDITORS

I. Statutory Auditor

The Board of Director places on record its appreciation on the services provided by M/s. KPMC & Associates., Chartered Accountants, Delhi as the Statutory Auditors of the Company.

M/s. KPMC & Associates., Chartered Accountants, have consented to act as a Statutory Auditors of the Company and also confirmed that their appointment is as per the provisions of Section 141 of the Companies Act, 2013 and Rule 4 of Companies (Audit and Auditors) Rules, 2014.

II. Secretarial Auditor

As required under provisions of Section 204 of the Companies Act, 2013 and Rules framed thereunder, the Board has appointed the Secretarial Auditors of the Company, M/s Vickey K. Patel, Practicing Company Secretaries, for conducting the Secretarial Audit for the FY 2020-21.

Secretarial Audit Report in Form MR-3 issued by the Secretarial Auditor of the Company for the Financial Year ended on March 31, 2020 is attached to the Directors Report as Annexure- E. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

24. DETAILS OF SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATOR OR COURT OR TRIBUNAL

There were no significant and material orders issued against the Company by a regulating authority or court or tribunal that could affect the going concern status and companys operation in future.

25. RISK MANAGEMENT

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

There are no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this Report.

26. VIGIL MECHANISM

The Company has established a vigil mechanism, through a Whistle Blower Policy, where Directors and employees can voice their genuine concerns or grievances about any unethical or unacceptable business practice. A whistle-blowing mechanism not only helps the Company in detection of fraud, but is also used as a corporate governance tool leading to prevention and deterrence of misconduct.

It provides direct access to the employees of the Company to approach the Compliance Officer or the Chairman of the Audit Committee, where necessary. The Company ensures that genuine whistle blowers are accorded complete protection from any kind of unfair treatment or victimization.

The said policy is also available on the website of the Company at wvwv.latteysindustries.com under the head investor section.

27. FRAUD REPORTING

There were no frauds disclosed during the Financial Year.

28. CODE OF CONDUCT

The Board has laid down a specific code of Conduct for all Board Members and Senior Management of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code on annual basis.

29. INSIDER TRADING

The Board has in consultation with the Stakeholders Relationship Committee laid down the policy to regulate and monitor the Insider Trading in the Company. The Committee regularly analyses the transactions and monitors them to prevent Insider Trading. The Company has also adopted a Prohibition of Insider Trading Policy.

During the year under review, in compliance with the amendments to the SEBI Insider Regulations, the Company adopted the following effective 1 April 2019;

Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information.

Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons and their Immediate Relatives

The Policy was approved by the Board and same was uploaded on the Companys website www.latteysindustries.com under the tab investors.

30. MEANS OF COMMUNICATION

The Board believes that effective communication of information is an essential compi Corporate Governance. The Company regularly interacts with its shareholders through channels of communication such as Companys Website and stipulated communicc Stock Exchange where the Companys shares are listed for announcement of Financial Annual Report, Notices, Outcome of Meetings, and Companys Policies etc.

31. HUMAN RESOURCES

Your Company treats its "Human Resources" as one of its most important assets. Your C continuously invests in attraction, retention and development of talent on ongoini Numbers of programs that provide focused people attention are currently underws Company thrust is on the promotion of talent internally through job rotation and job enlar

32. WEBSITE

The Company has a website addressed as www.latteysindustries.com. Website cont basic information about the Company - details of its Business, Financial Info Shareholding Pattern, Contact Information of the Designated Official of the Company responsible for assisting and handling investors grievances and such other details as required under sub regulation (2) of Regulation 46 of the Listing Regulations, 20 Company ensures that the contents of this website are periodically updated.

33. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND ( DETAILS

The Companys policy on Directors appointment including criteria for determining qualificati positive attributes and independence of a Director as well as policy relating to Remuneratioi Managerial Personnel and other employees and other matters as provided in Section 178(3 Act, is appended as an Annexure VII to this Report.

34. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOME WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 201

In accordance with Sexual Harassment of Women at Workplace (Prevention, Prohibi Redressal) Act, 2013 and the Rules framed thereunder, the Company has formed an Complaints Committee and also framed and adopted the policy for Prevention of Harassment at Workplace.

The following is the summary of Sexual Harassment complaints received and disposed c the year 2019-20.

No. of Complaints Received: NIL No. of Complaints Disposed of: NIL

35. ACKNOWLEDGEMENT

Your Directors wish to express their gratitude to the Bankers, Financial Institutions, Government Authorities, Customers, Vendors, Consultants, Advisors and Members for their direct and indirect co-operation and look forward to their continued support in the future.

Your Directors acknowledge the support and co-operation received from employees and all those who have helped in day to day management of the Company.

For and on behalf of the Board
FOR LATTEYS INDUSTRIES LIMITED
KAPOOR CHAND GARG
PLACE; AHMEDABAD MANAGING DIRECTOR
DATE: 05™September2020 DIN: 00434621