likhitha infrastructure ltd share price Directors report


To

The Members,

LIKHITHA INFRASTRUCTURE LIMITED

The Board of Directors ("Board") of Likhitha Infrastructure Limited ("the Company") hereby presents the 24th Annual Report along with the Audited Financial Statements (Standalone and Consolidated) for the financial year (FY) ended March 31,2023.

Financial Performance

The audited financial statements (standalone and consolidated) of your Company as on March 31, 2023, prepared in accordance with the relevant applicable IND AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and provisions of the Companies Act, 2013, forms part of this Annual Report.

The summary of the audited financial results (standalone and consolidated) i.e., Statement of Profit and Loss for the year ended March 31, 2023, of the Company is as follows:

(Amount Rs. in lakhs)

Particulars

Standalone

Consolidated

2022-23

2021-22

2022-23

2021-22

Revenue from Operations

35,076.61

25,713.67

36,495.50

25,721.17

Other Income

784.91

354.90

423.48

354.90

Total Revenue

35,861.52

26,068.57

36,918.98

26,076.07

EBITDA

8,501.48

6,469.37

8,730.80

6,570.06

Less: Finance costs

77.66

53.32

77.66

53.32

Less: Depreciation and Amortization Expenses

507.21

368.65

507.21

368.65

Profit before prior period items

7,916.61

6,047.40

8,145.93

6,148.09

Prior period items

--

--

--

--

Profit Before Tax

7,916.61

6,047.40

8,145.93

6,148.09

Less: Current Tax

1,937.20

1,514.55

2,141.21

1,549.74

Add: Deferred Tax Asset

24.96

13.73

24.96

13.73

Profit Available for Appropriations / Loss

6,004.37

4,546.57

6,029.68

4,612.07

Basic Earnings per Share ( Rs.)

15.22

11.52

15.28

11.69

Diluted Earnings per Share ( Rs.)

15.22

11.52

15.28

11.69

Paid up share capital (face value of Rs. 5 each)

1,972.50

1,972.50

1,972.50

1,972.50

Reserves and Surplus

23,035.19

17,236.42

23,035.55

17,288.82

Results of operations and state of affairs of the company

The keys aspects of your Companys financial performance during the financial year 2022-23 are as follows:

Financial highlights

Standalone

> Revenue from Operations increased by 36.41% YoY to Rs.35076.61 Lakhs as against Rs.25713.67 Lakhs in the previous year.

> Operating EBIDTA also increased by 31.41% YoY to Rs.8501.48 Lakhs as against Rs.6469.37 Lakhs in the previous year.

> PAT increased by 32.06% YoY to Rs.6004.37 Lakhs as against Rs.4546.57 Lakhs in the previous year. Consolidated

> Revenue from Operations increased by 41.89% YoY to Rs.36495.50 Lakhs as against Rs.25721.17 Lakhs in the previous year.

> Operating EBIDTA also increased by 32.89% YoY to Rs.8730.80 Lakhs as against Rs.6570.06 Lakhs in the previous year.

> PAT increased by 30.73% YoY to Rs.6029.68 Lakhs as against Rs.4612.07 Lakhs in the previous year.

Subsidiaries, associates and joint venture companies

As on March 31, 2023, the Company has only one (1) Joint Venture. Further, during the year under review, the Company has entered into Joint Venture Agreement and subsequently Likhitha HAK Arabia Contracting Company has been incorporated in the kingdom of Saudi Arabia as a Joint Venture Company w.e.f April 11,2023.

There are no subsidiaries or Associate Companies within the meaning of the Companies Act, 2013 ("the Act"). There has been no material change in the nature of the business of the subsidiaries.

Pursuant to first proviso to Sub-Section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Companys subsidiaries / associates / Joint Ventures of the Company in Form AOC-1, is attached as Annexure-I to this report.

Further, the Companys policy on determining the material subsidiaries, as approved by the Board, is available on the Companys website at www.likhitha.co.in.

Consolidated financial statements

Consolidated financial statements have been prepared by the Company in accordance with the relevant accounting standards issued by the Institute of Chartered Accountants of India (ICAI) and as per the provisions of Section 129(3) of the Companies Act, 2013 and as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations").

Further, pursuant to the provisions of Section 136 of the Act, the financial statements including the consolidated financial statements, along with the relevant documents forms part of this annual report and are available on the website of the Company www.likhitha.co.in.

Any member desirous of inspecting or obtaining a copy of the said financial statements may write to the Company Secretary of the Company at email ID: cs@likhitha.in.

Change in nature of business

During the year under review, there has been no change in the nature of business of the Company.

Amount to be carried to general reserve

The Company has not transferred any amount to general reserve during the current financial year.

Dividend

Your Board of Directors at their meeting held on May 18, 2023, has recommended a final dividend on the equity shares at the rate of 30% ( Rs.1.5/-) per Equity Share having face value of Rs.5/- each out of the profits of the Company for the FY 2022-23, subject to shareholders approval at the ensuing Annual General Meeting ("AGM"). The Dividend, if approved, will be paid to shareholders whose names appear in the Register of Members as on the record date.

The record date for the purpose of payment of final dividend for the financial year ending March 31,2023, is fixed as Wednesday, September 20, 2023.

The said dividend, if approved by the shareholders, would involve a cash outflow of Rs.591.75 Lakhs. As members are aware, with effect from April 01, 2020, the Government has abolished the dividend

distribution tax and dividend income is now taxable at the hands of shareholders. Hence payment of dividend to members will be subject to tax deduction at source (TDS) as per statutory requirement.

The dividend recommended is in accordance with the Companys Dividend Distribution Policy. The Dividend Distribution policy, in terms of Regulation 43A of the SEBI (LODR) Regulations, 2015 is available on the Companys website at http://www.likhitha.co.in/img/content/policies/Dividend Distribution Policy.pdf.

Transfer of unclaimed dividend to investor education & protection fund (IEPF)

During the year under review, the Company was not required to transfer any funds to the Investor Education and Protection Fund as per the provisions of Section 125 of the Companies Act, 2013. However, the balance in Unclaimed / Unpaid Dividend Account as on March 31, 2023, is given below:

Amount in

S. No. Particulars

31.03.2023

1 Final Dividend for FY 2020-21

1,44,705

2 Interim Dividend for FY 2021-22

1,20,462

3 Final Dividend for FY 2021-22

25,870

The Company requests all the members to encash/claim their respective dividend within the prescribed period. Shareholders are informed that once an unclaimed dividend is transferred to IEPF, no claim shall lie in respect thereof with the Company. The details of the unpaid/unclaimed amounts lying with the Company are available on the website of the Company at http://www.likhitha.co.in/investors.html and the said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link https://www.iepf.gov.in/.

Ms. Pallavi Yerragonda, Company Secretary and Compliance officer of the Company acts as Nodal Officer.

Share capital

During the year under review, shareholders passed ordinary resolution through postal ballot by remote e-voting dated November 09, 2022, for sub-division of 1 (One) equity share of Rs.10/- (Rupees Ten) each into 2 (Two) equity shares of Rs.5/- (Rupees Five) each.

Consequently, as on March 31, 2023, the Authorized Share Capital of the Company is ^20,00,00,000/- (Rupees Twenty Crores Only) divided into 4,00,00,000 (Four Crores) equity shares of Rs.5/- (Rupees Five Only) each and Paid-up Equity Share Capital of the Company ^19,72,50,000 (Rupees Nineteen Crores Seventy Two Lakhs and Fifty Thousand Only) comprising of 3,94,50,000 (Three Crores Ninety Four Lakhs and Fifty Thousand) equity shares of face value of Rs.5/- (Rupees Five Only) each.

During the year under review, your Company has neither issued any shares with differential voting rights nor has granted any stock options or sweat equity.

Utilisation of IPO proceeds

The Company has raised funds through Initial Public Offer (IPO) aggregating up to 51,00,000 (Fifty One Lakhs) Equity Shares with the issue size of ^61,20,00,000/- (Rupees Sixty-One Crore Twenty Lakhs only) with the object of utilization of net proceeds to fulfil working capital requirements of our company, to meet issue expenses and General Corporate Purposes. The Company has utilized all the proceeds for the objects as stated in the offer document.

Deposits

During the year under review, your Company has not accepted any deposits pursuant to the provisions of Sections 73 and 76 of the Companies Act, 2013 and rules made thereunder.

Particulars of loans, guarantees and investments

Details of Loans, Guarantees and Investments made during the financial year ended March 31, 2023, covered under the provisions of Section 186 of the Companies Act, 2013 read with Companies (Meetings of Board and its Powers) Rules, 2014, are given in the notes to the Financial Statements.

Listing of equity shares

The Companys equity shares are listed on the following Stock Exchanges:

i. BSE Limited, Phiroze JeeJeebhoy Towers, Dalal Street, Mumbai - 400 001, Maharashtra, India; and

ii. National Stock Exchange of India Limited, Exchange Plaza, Floor 5, Plot No. C/1, G Block, Bandra-Kurla Complex, Bandra (East), Mumbai - 400051, Maharashtra, India.

The Company has paid the Annual Listing Fees to the said Stock Exchanges for the Financial Year 2023-24.

Material changes and commitments

No material changes and commitments have occurred subsequent to the end of the financial year of the Company to which the financial statements relate and till the date of the report, which will have an impact on the financial position of the Company.

Outlook and future plans

"Management Discussion and Analysis" contains a separate section on the Companys outlook and future plans and members may please refer to the same on this.

Conservation of energy, technology absorption and foreign exchange earnings and outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts)Rules, 2014, is enclosed as Annexure-II to this report.

Corporate social responsibility (CSR)

The Board of Directors has constituted the Corporate Social Responsibility (CSR) Committee in accordance with the provisions of section 135 of the Companies Act, 2013. The Board on the recommendation of CSR Committee and in compliance with the policy on Corporate Social Responsibility, contributed to CSR activities specified in Schedule VII of the Companies Act, 2013

The Policy on Corporate Social Responsibility is available on the Companys website at https://www.likhitha. co.in/img/content/CSR/CSR Policy.pdf. The Annual Report on CSR activities is enclosed as Annexure-III to this report. For other details regarding the CSR Committee, please refer to the Corporate Governance Report which forms part of this Annual Report.

The Chief Financial Officer of the Company has certified that CSR funds disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board.

Annual return

In accordance with the provisions of Section 92 and Section 134 of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, (as amended), the Annual Return for the financial year ended March 31, 2023 is available on the website of the Company at http://www. likhitha.co.in/annual returns.html

Contracts and arrangements with related parties

During the Year under review, all contracts / arrangements / transactions entered by the Company with related parties were in the ordinary course of business and on an arms length basis which were approved

by the audit Committee and the Board from time to time. The particulars of such contracts or arrangements with related parties are enclosed in Form AOC-2 as Annexure-IV to this report.

Business responsibility and sustainability report

Pursuant to Regulation 34(2)(f ) of SEBI (LODR) Regulations, 2015, as amended, the Business Responsibility and Sustainability Report in prescribed format for FY 2022-23 is enclosed as Annexure-V to this report.

Management and discussion analysis

Pursuant to the provisions of Regulation 34(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a report on Management Discussion & Analysis is presented in a separate section forming part of this annual report.

Particulars of employees and related disclosures

The information 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 (including amendments thereto), is attached as Annexure-VI to this Report.

Corporate governance

Your company practices best corporate governance procedures to uphold the true spirit of law, integrity, and transparency by adhering to our core values with an objective to maximize stakeholders value. The Report on Corporate Governance, pursuant to the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is enclosed as Annexure-VII and a certificate obtained from the Secretarial Auditors confirming compliance with Corporate Governance requirements as provided in the aforesaid Regulations is annexed to this report.

Directors responsibility statement

Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

i) In preparation of the annual accounts for the financial year ended March 31, 2023, the applicable Ind- AS (Indian Accounting Standards) have been followed and there are no material departures.

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 profit and 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 this Act 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 are operating effectively and

vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and effective.

Directors and key managerial personnel

The Board comprises an optimum combination of Executive, Non-Executive, Independent and Women Directors as per the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. As on March 31, 2023, the Board Comprises of Seven (07) Directors out of which are Four (04) Independent Directors including One Woman Independent Director, One (01) Non-Executive Non-Independent Director and Two (02) Executive Directors.

Details of the composition of the Board of Directors, appointments / re-appointments during the year under review and details of declarations received by the Directors have been provided in the Corporate Governance Report which forms part of this Annual Report.

Changes in Board

a) Resignation of Mr. Kutumba Rao Gaddipati (DIN: 02333387)

During the year under review, Mr. Kutumba Rao Gaddipati (DIN: 02333387) has resigned from the position of Non-Executive Non-Independent Director of the Company with effect from February 08, 2023.

b) Reappointment of Mr. Venkatram Arigapudi (DIN: 08939773) as an Independent Director

Pursuant to the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on August 09, 2023 re-appointed Mr. Venkatram Arigapudi as an Independent Director of the Company for a further period of 3 (three) years and 6 (six) months with effect from October 31,2023, subject to the Shareholders approval at the ensuing Annual General Meeting. The Company has received requisite consent/declarations for the appointment of Mr. Venkatram Arigapudi as an Independent Director as required under the Act and rules made thereunder. His appointment for a period of three years and six months is included in the AGM notice for seeking approval of its members.

c) Reappointment of Mr. Sivasankara Parameswara Kurup Pillai (DIN: 08401552) as an Independent Director

Pursuant to the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on August 09, 2023 re-appointed Mr. Sivasankara Parameswara Kurup Pillai as an Independent Director of the Company for a further period of 3 (three) years with effect from March 28, 2024, subject to the Shareholders approval at the ensuing Annual General Meeting. The Company has received requisite consent/declarations for the appointment of Mr. Sivasankara Parameswara Kurup Pillai as an Independent Director as required under the Act and rules made thereunder. His appointment for a period of three years is included in the AGM notice for seeking approval of its members.

d) Reappointment of Mr. Venkata Sesha Talpa Sai Munupalle (DIN: 08388354) as an Independent Director

Pursuant to the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on August 09, 2023 re-appointed Mr. Venkata Sesha Talpa Sai Munupalle as an Independent Director of the Company for a further period of 3 (three) years with effect from March 28, 2024, subject to the Shareholders approval at the ensuing Annual General Meeting. The Company has received requisite consent/declarations for the appointment of Mr. Venkata Sesha Talpa Sai Munupalle as an Independent Director as required under the Act and rules made thereunder. His appointment for a period of three years is included in the AGM notice for seeking approval of its members.

e) Reappointment of Ms. Jayashree Voruganty (DIN: 09137732) as an Independent Director

Pursuant to the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on August 09, 2023 re-appointed Ms. Jayashree Voruganty as an Independent Director of the Company for a further period of 3 (three) years with effect from March 28, 2024, subject to the Shareholders approval at the ensuing Annual General Meeting. The Company has received requisite consent/declarations for the appointment of Ms. Jayashree Voruganty as an Independent Director as required under the Act and rules made thereunder. Her appointment for a period of three years is included in the AGM notice for seeking approval of its members.

Key managerial personnel

In accordance with the provisions of Section(s) 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the following are the Key Managerial Personnel of the Company as on March 31,2023:

S. No. Name of the KMP

Designation

1 Mr. Srinivasa Rao Gaddipati

Managing Director

2 Mrs. Likhitha Gaddipati

Whole Time Director and Chief Financial Officer

3 Mr. Sudhanshu Shekhar

Chief Executive Officer

4 Ms. Pallavi Yerragonda

Company Secretary and Compliance Officer

Changes in Key Managerial Personnel

During the year under review, there are no changes in the Key Managerial Personnel of the Company other than as stated below.

S. No. Name of Key Managerial Personnel

Details of the Change

1 Mrs. Triveni Banda

Resigned as Company Secretary and Compliance officer of the Company with effect from October 01, 2022.

2 Ms. Pallavi Yerragonda

Appointed as Company Secretary and Compliance officer of the Company with effect from December 22, 2022.

Non-Executive Independent Directors

The Company has received declarations from all the Independent Directors as required under section 149(6) of the Companies Act, 2013 along with Rules framed thereunder and Regulation 16(1)(b) of the Listing Regulations stating that they meet the criteria of independence. There has been no change in the circumstances affecting their status as independent directors of the Company.

The Board has reviewed integrity, expertise, experience, and the requisite proficiency of the independent directors and confirmed that the Independent Directors fulfill the conditions specified in the SEBI Listing Regulations and are independent of the management.

In terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have enrolled their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs. As prescribed under Listing Regulations and pursuant to Section 149(6) of the Act, the particulars of NonExecutive Independent Directors (as on the date of signing this report) are as under:

1. Mr. Venkata Sehsha Talpa Sai Munupalle

2. Mr. Sivasankara Parameswara Kurup Pillai

3. Mr. Venkatram Arigapudi

4. Ms. Jayashree Voruganty

All the directors were appointed as independent directors by the shareholders at their meetings.

Director liable to retire by rotation

Mrs. Sri Lakshmi Gaddipati (DIN: 02250598), Non-Executive Non-Independent Director will retire by rotation at the ensuing Annual General Meeting. Being eligible, she offers herself for re-appointment.

Directors and officers insurance (D&O)

As per the requirements of Regulation 25 (10) of the SEBI Listing Regulations, the Company has taken D&O Insurance for all its Directors of the Company.

Meetings of the board

During the year under review, 8 (Eight) Meetings of the Board were convened and held as per the Standards as set forth in the Secretarial Standard - I. The maximum gap between two consecutive board meetings was within the period as prescribed under the provisions of the Companies Act, 2013.

Details of the meetings of the Board along with the attendance of the Directors therein have been disclosed as part of the Corporate Governance Report forming part of this Annual Report.

Committees of the board

Currently the Board has 5 (Five) committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and Risk Management Committee. The composition of the committees are in line with the applicable provisions of the Act, Rules and the Listing Regulations.

Audit committee

The Board has in place a duly constituted Audit Committee as per the provisions of Section 177 of the Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The composition, attendance, powers and role of the Audit Committee are included in Corporate Governance Report which forms part of this Annual Report. All the recommendation s made by the Audit Committee were accepted by the Board of Directors.

Other committees

The Board has also constituted the following committees, in accordance with the provisions of Companies Act, 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as applicable, which are in place and discharging their functions as per terms of reference entrusted by the Board of Directors from time to time:

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

The composition, attendance, powers, and roles of the Committees are included in the Corporate Governance Report which forms part of this Annual Report.

Policy on Directors appointment and remuneration and other details

The Nomination and Remuneration Committee has adopted a policy as per Section 178(3) of the Companies Act,2013 for determination of remuneration and the manner of selection of the Board of Directors, Senior Management and Key Managerial personnel of the Company. The Policy is available on the Companys website at http://www.likhitha.co.in/investors.html.

Criteria for selection of Non-Executive Directors

• The Non-Executive Directors shall be of high integrity with relevant expertise and experience in the fields of Service Industry, Manufacturing, Marketing, Finance and Taxation, Law, Governance and General Management.

• In case of appointment of independent directors, the committee shall satisfy itself with regard to the criteria of independence of the directors vis-a-vis the company so as to enable the board to discharge its function and duties effectively.

• The committee shall ensure that the candidate identified for appointment as a director is not disqualified for appointment under Section 164 of the Companies Act, 2013.

• The committee shall consider the following attributes, while recommending to the board the candidature for appointment as director:

- Qualification, expertise and experience of the directors in their respective fields;

- Personal, professional or business standing;

- Diversity of the Board;

- In case of re-appointment of Non-Executive Directors, the Board shall take into consideration the performance evaluation of the Directors and their engagement level;

Remuneration

The Non-Executive Directors shall not be entitled to receive remuneration except by way of sitting fees, reimbursement of expenses for participation in the board/committee meetings and commission, if any, as approved by the Board of Directors. The independent directors of the company shall not be entitled to participate in the Stock Option Scheme of the company. The aggregate commission payable if any to the Non-Executive Directors will be within the statutory limits.

Criteria For selection / appointment of Managing Director, Executive Directors, CEO, CFO and CS

For the purpose of selection of the Managing Director, Executive Directors, CEO, CFO and CS the Committee shall identify persons of integrity who possess relevant expertise, experience and leadership qualities required for the position.

The Committee will also ensure that the incumbent fulfills such other criteria with regard to age and other qualifications as laid down under Companies Act, 2013, or other applicable laws.

Remuneration to Managing Director and Executive Directors

• At the time of appointment or re-appointment, the Executive Director and Managing Director shall be paid such remuneration as may be mutually agreed between the Company (which includes the Committee and the Board of Directors) and the remuneration of Executive Director / Managing Director, within the overall limits prescribed under the Companies Act, 2013.

• Any Revision in remuneration shall be subject to the approval of the members of the Company in the General Meeting in compliance with the provisions of the Companies Act, 2013.

Remuneration Policy for the Senior Management Employees including CEO, CFO & CS

In determining the remuneration of Senior Management Employees, the committee shall ensure/consider the following:

• The relationship between remuneration and performance benchmark.

• The balance between fixed and variable pay reflects short and long-term performance appropriate to the working of the company and its goals, as mutually agreed.

Familiarisation program for Independent Directors

The company has conducted a Familiarization Program for independent directors in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 as amended from time to time.

The Familiarization Program was conducted with an objective to provide an opportunity to familiarize the independent directors related to the nature of the industry, roles, rights, and responsibilities of independent directors, Business model of the company and challenges etc. They have the full opportunity to interact with Senior Management personnel and Heads of the department and are provided with all documents as required and sought by them to enable them to have a good understanding.

The details of such Familiarization Programmes for Independent Directors are posted on the Companys website at http://likhitha.co.in/investors.html.

Board evaluation and assessment

The Board of Directors has carried out an annual performance evaluation of Individual Directors including chairman of the Company, Board as a whole and its committees thereof pursuant to the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

• Performance evaluation criteria is determined by the Nomination and Remuneration Committee.

• A structured questionnaire was prepared to evaluate the performance after seeking inputs from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, and governance.

• A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution at meetings, independence, safeguarding the interest of the Company and its minority shareholders etc.

• The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the Director being evaluated), after seeking inputs from all the directors on the effectiveness and contribution of the Independent Directors. The Process and criteria evaluation of Performance of Independent Directors is explained in Corporate Governance report which forms part of the Annual Report.

• In a separate meeting of Independent Directors, performance of Non-Independent Directors, and the performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors. The Independent Directors also assessed the quality, frequency, and timeliness of flow of information between the Board and the management that is necessary for effective performance.

• The performance of the Committees was evaluated by the Board after seeking inputs from the Committee members based on criteria such as the composition of Committees, effectiveness of Committee meetings, etc.

The Directors expressed their satisfaction with the evaluation process.

Employees stock option scheme

There is no employees stock option scheme being implemented by the Company.

Auditors and Auditors Report

Statutory Auditors

M/s. NSVR & Associates LLP, Chartered Accountants (FRN: 008801S), were appointed as the Statutory Auditors of the Company for a term of five consecutive years to hold office from 20th Annual General Meeting till the conclusion of 25th Annual General Meeting of the Company. They have confirmed their eligibility for the financial year 2023-24 under Section 141 of the Companies Act, 2013, and the Rules framed thereunder.

Fraud Reporting

During the Financial Year under review, the Statutory Auditors have not reported any incident of fraud to the Board of Directors of the Company, pursuant to the provisions of Section 143(12) of the Companies Act, 2013.

Internal Auditors

Based on the recommendations of the Audit Committee, the Board of Directors at their meeting held on May 18, 2023, have re-appointed M/s. Mukul Tyagi & Associates, Chartered Accountants as Internal Auditors of the Company for the financial year 2023-2024. M/s. Mukul Tyagi & Associates have confirmed their willingness to be re-appointed as the Internal Auditors of the Company.

Secretarial Auditors

Based on the recommendations of the Audit Committee, the Board of Directors at their meeting held on May 18, 2023, have appointed M/s. VCAN & Associates, Practising Company Secretaries, Hyderabad as a Secretarial Auditors of the Company for the financial year 2023-2024. M/s. VCAN & Associates have conducted the Secretarial Audit for the financial year 2022-2023 and the Secretarial Audit Report, in Form MR-3, forms part of this Report as Annexure-VIII.

Qualifications in auditors report

Comments by the Board on Every Qualification, Reservation or Adverse Remark or Disclaimers

Statutory auditors

As there is no qualification, observations or adverse remarks in the reports given by the Statutory Auditors, your directors need not provide any clarification on the same.

Internal audit report

The recommendations / suggestions of the internal auditors are discussed in the Audit Committee and Board meetings periodically.

Secretarial audit report

There are no qualifications or adverse observation in the Secretarial Audit Report issued by the Secretarial Auditors for the financial year ended March 31,2023.

Secretarial standards

The Company confirms compliance with the requirements of Secretarial Standard I and Secretarial Standard II.

Material orders passed by the regulators

No significant material orders have been passed by the Regulators or courts or tribunals impacting the going concern status and Companys operations in future.

Insurance

All the properties of the Company, including buildings, plants and machinery and stocks have been adequately insured.

Adequacy of internal financial controls with reference to the financial statements

The Company has laid down internal financial controls through Entity level controls inter-alia to ensure orderly and efficient conduct of business, including adherence to Companys policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/information, safeguarding of assets, prevention and detection of fraud and errors.

The Board of Directors of the Company have adopted various policies like Related Party Transactions policy, Whistle Blower Policy, code of conduct for regulating, monitoring, and reporting insider trading and such other procedures for ensuring the orderly and efficient conduct of its business, prevention and detection

of frauds and errors, accuracy, and completeness of the accounting and timely preparation of financial information.

Based on the requirements under SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board has approved the code of conduct for prohibition of insider trading and the same is being implemented by the Company. The board has appointed Ms. Pallavi Yerragonda, Company Secretary, as the Compliance Officer under the code.

Vigil mechanism

Pursuant to the Provisions of the Section 177(9) & (10) of the Companies Act, 2013, and Regulation 22 of SEBI (LODR) Regulations, 2015, the Company has established a Vigil mechanism by framing a policy named as "Likhitha Whistle Blower Policy" for Directors and employees to report genuine concerns or grievances. The policy on vigil mechanism is available on the Companys website at https://likhitha.co.in/ img/content/policies/Whistle Blower Policy.pdf.

The policy lays down a framework and process, which provides a platform to disclose information, confidentially and without fear of reprisal or victimization, where there is reason to believe that there has been serious malpractice, fraud, impropriety, abuse or wrongdoing, grievances about leakage of unpublished price sensitive information (UPSI), illegal and unethical behavior within the Company to the Chairman of the Audit Committee.

Risk management

The Board of Directors has formulated and implemented a Risk Management Policy which identifies various elements of risks, which, in its opinion, may threaten the existence of the Company and contains measures to mitigate the same. The Risk Management Policy of the Company is available on the Companys website at www.likhitha.co.in. A Risk Management Committee has been constituted as per the provisions of Regulation 21 of SEBI (LODR) Regulations, 2015 to monitor and review the major risks faced by and the risk management plan of the Company periodically.

Industrial safety and environment

The utmost importance continues to be given to the safety of personnel and equipment in all the plants of the Company. The Company reviews thoroughly the various safety measures adopted and takes effective steps to avoid accidents. Safety drills are also conducted at regular intervals to train the employees for taking timely and appropriate action in case of accidents.

Green initiative

The Ministry of Corporate Affairs (MCA) has taken a green initiative in Corporate Governance by allowing paperless compliance by the Companies and permitted the service of Annual Reports and other documents to the shareholders through electronic mode subject to certain conditions and the Company continues to send Annual Reports and other communications in electronic mode to those members who have registered their email IDs with their respective depositories. Members may note that Annual Reports and other communications are also made available on the Companys website https://www.likhitha.co.in and websites of the Stock Exchanges i.e., BSE Limited, and National Stock Exchange of India Limited.

Industrial relations

Industrial relations have been cordial during the year under review and your directors appreciate the sincere and efficient services rendered by the employees of the Company at all levels towards the successful working of the Company.

Prevention of sexual harassment of women at workplace policy

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition, and Redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the rules framed thereunder.

The Company has duly constituted an Internal Complaints Committee (ICC) as required under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The present composition of ICC is as under

• Mrs. Sri Lakshmi Gaddipati -

Presiding Officer

• Mrs. Likhitha Gaddipati -

Member

• Mrs. Priyanka Gajji -

Member

• Mr. Venkata Prabhakar Rao Talluri -

Member

The disclosure pertaining to Complaints are given under:

No. of Complaints received during the year

NIL

No. of Complaints disposed-off during the year

NIL

No. of Complaints pending as on end of financial year

NIL

Human resources

The Company considers its Human Resource as the key to achieve its objectives. Our HR and Operations Department works closely with Senior Management to devise strategies that attract talent and enhance capabilities. The employees are sufficiently empowered and enabled to work in an environment that inspires them to achieve higher levels of performance. It is the unwavering commitment of our employees that propels us forward and enables us to fulfil the Companys vision. Your Company appreciates the contribution of its dedicated employees.

We believe that our employees are our most valuable asset. Your Company is also focused on the overall well-being of its employees. We are committed to creating a positive work environment that prioritizes the health, safety, career growth and development of our employees. The Company took various initiatives to keep the employees productive and engaged with various employee training and awareness programs. we strengthen our collective capabilities and pave the way for continued success.

General

Your directors state that no disclosure or reporting is required in respect of following items as there were no transactions on these items during the year under review:

a) Issue of equity shares with differential voting rights as to dividend, voting or otherwise.

b) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

c) No significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

d) No frauds were reported by the Auditors during the year under review.

e) Maintenance of Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013, is not required by the Company.

f) It was observed that BSE Limited issued a notice alleging that there was a delay in the submission of the Annual Report for the year 2021-22 by 1 (one) day and levied a penalty of Rs.2,000/-. Upon submission of clarification, the said penalty was withdrawn.

On behalf of the Board of Directors

for Likhitha Infrastructure Limited

Sd/-

Sd/-

Likhitha Gaddipati

Srinivasa Rao Gaddipati

Place : Hyderabad

Whole Time Director

Managing Director

Date : August 09, 2023

DIN: 07341087

DIN:01710775