Lokesh Machines Ltd Directors Report

Dear Members,

Your directors are pleased to present the 41 ^stAnnual Report of the company along with the Audited financial Statements for the financial year ended March 31,2025.

1. FINANCIAL RESULTS AND STATE OF COMPANYS AFFAIRS

(Rs in Lakhs)

Particulars	2024-25	2023-24
Revenue from Operations	2 2,832.16	29,353.99
Other Income	147.31	168.18
Total Income	2 2,979.47	29,522.17
Total Expenses	22890.46	27,466.84
Profit beforeTaxes	89.01	2,055.33
Tax Expenses:
(i) Current Tax	-	372.13
(ii) Provision for earlier tax	-	103.68
(iii) Deferred Tax	35.33	194.73
Profits/ (Loss) after Taxes	53.68	1,384.79
Earnings Per Equity Share:
Basic	0.28	7.68
Diluted	0.28	7.68

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

2. PERFORMANCE REVIEW

During the financial year ended on March 31,2025, the Company recorded Revenue from Operations of Rs.22,832.16/- lacs, as compared to Rs. 29,353.99/- lacs in 2023-24.Furthermore, during the financial year, the company has made profit after tax of Rs. 53.68 lacs as compared to Rs. 1384.79 lacs in 2023-24.

Furthermore, on October 30, 2024, the Company was sanctioned by United States Office of Foreign Control Assets ("OFAC Sanctions”). Because of OFAC Sanctions, the Companys turnover has decreased to the extent of 22.18 % as compared to the last financial year.

Furthermore, starting from October 30, 2024, the Company was unable to enter into any foreign currency transactions.

In view of the OFAC sanctions and challenging macro-economic conditions, the company has taken a certain cost cutting initiative and as a result of which, the Company is able to minimize the impact of sanctions on the operations of the Company.

Furthermore, the Company has undertaken renewed strategic initiatives aimed at recouping the business. These measures have begun to yield positive outcomes, evidenced by the emergence of new opportunities and the on boarding of new customers

Further, the Company is in the process of getting its name removed from the sanction list of the United State Department of Treasury for which the Company through a US based lawyer firm filed an application before Office of Foreign Assets Control, U.S. Department of the Treasury ("OFAC”) for expedited removal/reconsideration of Designation on the list of Specially Designated Nationals and Blocked Persons on January 31,2025 (EST).

3. DIVIDEND

Currently, your company is prioritizing its expansion plans, and a significant portion of the profit is being reinvested back into the business with the focus on creating shareholders value. Therefore, your directors did not recommend any dividends for the financial year ending March 31,2025.

4. TRANSFER TO GENERAL RESERVE

The Company does not propose transferring any amount to General Reserve for the financial year 2024-25.

5. SHARE CAPITAL

The Authorized share capital of the Company is Rs. 22,00,00,000 (Rupees Twenty-Two Crore Only) divided into 2,20,00,000 (Two Crore Twenty Lakhs Only) equity shares of Rs.10/- (Rupees Ten Only).

During the previous financial year ended on March 31,2024, the Company has issued & allotted 6,00,000 Equity Shares of Rs 10/- each at a premium of Rs. 233.25/- on Preferential basis to non-promoters.

In addition to above, the company has also issued & allotted 15,00,000 convertible warrants of Rs. 10/- each at a premium of Rs. 233.25/- on Preferential basis to the members of promoters/promoters group.

During the financial year ended on March 31,2025, 8,53,562 warrants have been converted into equity shares by the members of promoters/promoters group and because of that paid up equity share capital of the Company has increased by 8,53,562 equity shares.

Furthermore, till date, remaining 6,46,438 warrants have also been converted into equity shares and because of that paid up equity share capital of the Company has increased by 6,46,438 equity shares.

As on March 31,2025, the paid-up equity Share Capital of the company is Rs. 1,935.03 and paid-up equity share capital on a fully diluted basis is Rs. 1999.67 Lakhs.

6. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

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

7. CHANGE IN THE NATURE OF BUSINESS

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

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Composition

As on March 31,2025, the Companys Board of Directors comprises of 9 directors. Four are Executive Directors and three are Independent Directors and two are Non-Executive Directors including one Women Director.

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

During the year, Mr. Likhitha Mullapudi, a Non-Executive Director of the company, is due to retirement by rotation at the ensuing Annual General Meeting and is also eligible for re-appointment.

The second term for Mr. B.R. Mahesh was concluded on September 29, 2024. Further, on the recommendation of the Nomination and Remuneration Committee, the Board has recommended the appointment of Mr. Meka Yugandhar as an Independent Director of the Company at the Annual General Meeting effective from September 29, 2024, to September 28, 2029.

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

Subsequent to the end of the financial year, Mr. Raman Sekharipuram Seshadri, an Independent Director on the Board of the Company resigned w.e.f. April 29, 2025

As mandated by the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed information and profiles of the directors seeking appointment and re-appointment are provided in the notice and explanatory statement of the 41^st Annual General Meeting.

Independent Directors

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

During the year under review, a separate meeting of Independent Directors was held on March 28,2025, in accordance with Schedule IV to the Companies Act, 2013 (Code for Independent Directors) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This meeting was convened without the attendance of Non-Independent Directors.

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

Change in Key Managerial Personnel (KMP)

Subsequent to the end of the financial year, Mr. Gurprit Singh resigned as Company Secretary and Key Managerial Personnel of the Company w.e.f. August 14, 2025. Mr. P. Kodanda Rami Reddy, appointed as Company Secretary, Compliance Officer & Key Managerial Personnel (KMP) of the Company w.e.f 15.08.2025.

Appointment of Chief Operating Officer(COO)

Subsequent to the end of the financial year, Mr. Sandeep Avinash Dorle was appointed as Chief Operating Officer (COO) of the Company w.e.f. July 10, 2025. He is also designated as Senior Management Personnel under the SEBI (LODR) Regulations, 2015.

9. BOARD MEETINGS

During the year, a total of 7 meetings of the Board of Directors were convened. Comprehensive information regarding these meetings is provided in the Corporate Governance Report, which is enclosed as Annexure D.

10. COMPANYS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES.

In accordance with Section 178(1) of the Companies Act, 2013, concerning the establishment of a Nomination and Remuneration Committee. As such, the Company has formulated a comprehensive policy that encompasses various aspects, including the appointment of Directors, remuneration for managerial roles, Director qualifications, their positive attributes, the assessment of Director independence, and other pertinent subjects as stipulated by Section 178(3) of the Companies Act, 2013. The details of Board and committee composition, tenure of directors, areas of expertise and other details are available in the corporate overview section that forms part of this Integrated Annual Report. This policy has been made accessible on the Companys website for reference https://www.lokeshmachines.com/investment- center.php?key=policy.

11. AUDITORS

a) Statutory Auditors

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

The Statutory Auditors report forms part of the Annual Report. The notes on financial statements referred to in the

Auditors Report are self-explanatory and do not call for any further comments.

The Statutory Auditors have not made any qualifications, reservations, or adverse remarks or disclaimer in their report for the financial year ended on March 31,2025,furthermore, no instances of fraudulent activities have been reported by the Auditors to the Companys Audit Committee during financial year under review.

b) Cost Auditors:

The Board, during its meeting on May 28, 2025, has appointed M/s Naval & Associates, Cost Accountants (Firm Registration: 002419), to perform the audit of cost records for various segments of the Company for the fiscal year 2025-26, based on the recommendation of the Audit Committee.

In accordance with the provisions outlined in Section 148 and Rule 14 of the Companies (Audit and Auditors) Rules, 2014, a resolution has been prepared for presentation at the forthcoming Annual General Meeting (AGM) to seek ratification of the remuneration proposed for the aforementioned Cost Auditors.

c) Secretarial Auditors:

As per the provisions of section 204 of Companies Act, 2013, Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 read with the SEBI (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2024, and subject to the approval of the share holders of the Company at the ensuing Annual General Meeting, the Board, at its meeting held on May 28, 2025, recommended the appointment of M/s L.D. Reddy & Co. Practicing Company Secretaries for the period of 5 years (Five years) starting from April 01, 2025, to March 31,2030.

The Secretarial Audit Report issued by M/s L.D. Reddy & Co. Practicing Company Secretaries for the financial year 2024-25 is annexed as Annexure A to this report. Further more, the Secretarial Auditors have not made any qualifications, reservations, or adverse remarks or disclaimer in their report for the financial year ended on March 31,2025.

Furthermore, in accordance with regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("SEBI Listing Regulations"), the Company has undertaken an audit to ensure compliance with all applicable provisions of the SEBI Listing Regulations for the financial year 2024-25.

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

12. INTERNAL AUDIT, INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board, in its meeting on May 28, 2025, has appointed M/s K. S. Rao & Co., Chartered Accountants, Hyderabad having Firm Reg. No. 003109S as the Internal Auditors of the Company for the financial year ended on March 31,2025.

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

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

13. SECRETARIAL STANDARDS

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

14. PREVENTION OF INSIDER TRADING

As per SEBI (Prohibition of Insider Trading) Regulation, 2015, as amended from time to time, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The Company has appointed Mr. P. Kodanda Rami Reddy, Company Secretary, as Compliance Officer w.e.f. August 15, 2025, who is responsible for setting forth procedures and implementation of the code for trading in Companys securities. During the year under review, there has been due compliance with the said code of conduct for the prevention of Insider trading.

15. DIVIDEND DISTRIBUTION POLICY

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

16. BUSINESS RESPONSIBILITY REPORT

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

17. ANNUAL RETURN

The Annual Return of the 2024-25 filed by the Company is available on the Companys website and can be accessed at https://www.lokeshmachines.com/investment-center.php?key=annual-returns06-16-01 and the Annual Return as on March 31, 2025 shall be uploaded on the website of the Company as & when filed with the Registrar of Companies, Hyderabad.

18. INDUSTRIAL RELATIONS

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

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

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

20. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The CSR Policy of the Company and details about the initiatives taken by the Company on CSR during the year as per the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been disclosed as part of this report in Annexure C attached hereof. Further details of composition of the Corporate Social Responsibility Committee and other details are provided in the Corporate Governance Report which forms part of this report as Annexure D.

21. COMPLIANCE UNDER POSH ACT, 2013

The Company has in place a policy for prevention, prohibition and redressal against sexual harassment of women at workplace to protect women employees and enable them to report sexual harassment at workplace. An Internal Committee has been constituted consisting of optimum number of women for the said purpose. During the year under review, details of the complaints are mentioned below:

Particulars	Details
Number of complaints received during the year	NIL
Number of complaints at the beginning of the year	NIL
Number of complaints at the end of the year	NIL

22. PERFORMANCE ANNUAL EVALUATION MADE BY THE BOARD OF ITS OWN PERFORMANCE AND OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

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

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

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

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

The Independent Directors of the Company had also convened a separate Meeting for this purpose on March 28, 2025. The results from this evaluation process have been informed to the Chairman of the Board of Directors.

23. LISTING

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

24. DIRECTORS RESPONSIBILITY STATEMENT

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

In preparation of annual accounts for the financial year ended March 31,2025.

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

b. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended March 31,2025 and of the profit of the Company for the financial year;

c. The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

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

25. CORPORATEGOVERNANCEREPORT

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

26. FUND RAISING AND UTILIZATION

Your Company raised funds by issuing Equity Shares and Warrants by way of preferential allotment in accordance with the provisions of the Companies Act, 2013 and SEBI (ICDR) Regulations, 2018.

The details of amount raised, and utilization of such funds are as follows:

Details of amount raised (In Crore)

Type of Security	Total amount raised	Already received towards subscription	Pending receipt
Equity Share	14.59	14.59	-
Warrants	36.49	36.49	-
Total	51.08	51.08	-

Details of amount spent (In Crore)

Objects specified in Offer Letter	Amount Spent	Deviation
Towards repayment of unsecured loans	9.00	No
Towards capital expenses	27.00	No
Towards working capital	15.08	No
Total	51.08	No

27. CERTIFICATE FROM COMPANY SECRETARY IN PRATICE

Mr. L. Dhanamjaya Reddy, Practicing Company Secretary has issued a certificate as required under the Listing Regulations confirming that none of the directors on the Board of the Company has been debarred or dis-qualified from being appointed or continuing as director of companies by the SEBI/ Ministry of Corporate Affairs or any such statutory authority. The certificate is enclosed as Annexure D1.

28. NOMINATION AND REMUNERATION POLICY

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

29. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the Annexure E forming part of this report.

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

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

30. BOARDS RESPONSE ON AUDITORS QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE:

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

31. INSURANCE

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

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

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

33. MATERIAL CHANGES AND COMMITMENTS

There are no Material changes and commitments affecting the financial position of the Company which occurred between the financial year ended March 31,2025, to which the financial statements relate and the date of signing of this Report.

34. MANAGEMENT DISCUSSION AND ANALYSIS

The management discussion and analysis Report for the financial year ending on March 31, 2025, is enclosed as Annexure B to this report.

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

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

36. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

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

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

37. VIGIL MECHANISM

In pursuant to the provisions of section 177 of the Companies Act, 2013 read with regulation 22 of SEBI (LODR) Regulations, 2015, a Vigil Mechanism for directors and employees to report genuine concerns has been established. All employees of the Company are covered under the Whistle Blower Policy. The Policy can be accessed at https://www.lokeshmachines.com/investment-center.php?key=policy.

38. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013

During the year under review, the company has not accepted any deposits. Furthermore, detailed disclosure is as mentioned below:

S.No. Particulars	Details
a) Accepted during the year;	NIL
b) Remained unpaid or unclaimed as at the end of the year	NIL
c) Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved	No default during the financial year.
(i) At the beginning of the year;	NIL
(ii) Maximum during the year;	NIL
(iii) At the end of the year;	NIL
(vi) The details of deposits which are not in compliance with the requirements of Chapter V of the Act;	NIL

39. RELATED PARTY TRANSACTIONS:

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

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

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

41. COMPLIANCE WITH THE PROVISIONS OF MATERNITY BENEFIT ACT 1961

During the year under review, the company has complied with the provisions of the Maternity Benefit Act 1961.

42. ACKNOWLEDGEMENTS

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

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

	For and on behalf of the Board of Directors
	Sd/-	Sd/-
	Mullapudi Lokeswara Rao	Mullapudi Srinivas
Place: Hyderabad	Managing Director	Whole-time Director
Date: August 12, 2025	DIN:00989447	DIN:00917565