lux industries ltd share price Directors report


Dear sHareHoLDers,

Your Directors are pleased to present the 28th Annual Report concerning the Companys business and activities. Additionally, the Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2023 are also being presented.

1. Financial Highlights (C in Crores)

Particulars

Standalone

Consolidated

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022

Revenue from Operations

2367.97 2273.00 2378.66 2295.88

Other Income

18.79 16.99 18.97 17.04

Total Revenue

2386.76 2289.99 2397.63 2312.92

Profit Before Tax

198.19 459.27 188.88 455.92

Tax Expense (Including Deferred Tax)

51.43 117.88 51.41 117.86

Profit after Tax

146.76 341.39 137.47 338.06

2. Operating & Financial Performance

Despite facing headwinds such as a global recession, the Russia-Ukraine war, volatility in raw material prices, high inflation rates, and increase in Covid-19 cases in many countries, your Company has reported identical numbers this year. The Companys total revenue for the current Financial Year 2022-23 is C2398 crores, compared to C2313 crores in the previous Financial Year 2021-22. Moreover, the Companys EBITDA and PAT for the current Financial Year are C233 crores and C137 crores, respectively, whereas they were C490 crores and C338 crores in the previous Financial Year. The Companys profitability was significantly impacted by the volatility in raw material prices. However, to maintain stability in pricing and diversify the supply chain, the Company has strengthened its relationship with suppliers and negotiated long-term contracts with multiple suppliers for raw materials.

We are grateful that our Company had a satisfactory performance in 2022-23, and we are optimistic that by product differentiation through branding, celebrity endorsements and enhanced quality 2023-24 will be a better year.

Lux, being one of the biggest players in the branded innerwear industry, had been proactive about the changing consumer-preferences and is responding by creating innovative and trendy product lines and maintaining a healthy balance between offline and online channels. Company is expanding its e-commerce presence and has partnered with top e-commerce companies such as Amazon, Flipkart, Myntra and Ajio and is currently shipping more than 4,000 orders daily. Going forward, the Company aims to generate about C100 crores of top line coming in from the online channel.

The innerwear garments industry has few leaders and the Company stands out amongst them with its expansion-distribution network consisting of 19 warehouses in 12 states, 2 lakh+ multi brand stores and 9 EBOs (Exclusive Brand Outlets), 1170+ dealers network and 11 Depots driving faster distribution in India. The export network of 46 countries has expanded significantly, with the inclusion of 24 new countries over the past 5 years and the ambitious goal is to target a total of 60 countries by 2025.

As the Company has expanded beyond its origins as an innerwear-only manufacturer and diversified into athleisure and outwear, entered the southern region of India, and broadened its product range to include womens innerwear and outerwear, as well as childrens clothing, it has become a well-rounded player in the market. The Company has also recognized the potential of the womens wear market segment and has made a deliberate effort to expand its presence in this space. This has been achieved through a combination of strategies, including leveraging e-commerce platforms and other disruptive channels. The Company actively engages in and makes contributions to various industry-level research and development (R&D) initiatives, including the initiatives taken by Hosiery association. However, there is no specific allocation of funds dedicated to these initiatives. The Company recognizes the importance of investing in automated equipments over standard equipments that improves efficiency of our operations and has invested C17 crores on advanced machinery from Italy, Germany, and Singapore.

The Company is achieving new heights by strengthening its brand with the support of brand ambassadors such as Vijay Deverakonda, Jacqueline Fernandez, Salman Khan, Sourav Ganguly, Virat Kohli, Varun Dhawan, Boman Irani, and Taapsee Pannu. Furthermore, the Company is expanding into the premium market with ONE8, which has independent and dedicated manufacturing facilities and the backing of Virat Kohli. Additionally, it has sponsored the KKR team in the IPL to increase the brands global visibility and reputation. The Company allocates an average of 8% of its revenues to branding initiatives, with a return of C12.74 for every rupee spent on advertising and publicity. Also, Company is expanding womens wear segment into a complete range including inner wear and athleisure through its brand Lyra.

Company has taken a multi-faceted approach to achieve success. By focusing on brand building activities, the Company has been able to strengthen its product portfolio and differentiate itself from competitors. Additionally, by implementing the latest technology in manufacturing processes, the Company is likely able to produce goods more efficiently and effectively than competitors, which can help lower costs and improve product quality. On the supply chain side, the Companys large distribution network is a

core strength that likely allows it to reach customers quickly and efficiently. This can help the Company respond to changes in demand and minimize inventory costs.

All factories worked efficiently during the year. Safety measures and processes have been installed and improved upon at all factories and work sites.

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

3. Performance of Subsidiary Company Artimas Fashions Private Limited

During the year under review, Artimas Fashions Private Limited has captured good market segment under the brand name of One8Brand of Indian Cricket Teams Former Captain Virat Kohli and has reported de-growth of 4% in its Revenue. The Total Income for the current financial year was C24.90 crores as compared to C26.02 crores in the previous financial year.

4. Dividend

Over the years, Lux has consistently followed a policy of paying high dividend, keeping in mind the cashgenerating capacities, the expected capital needs of business and strategic considerations. The Company recommended/ declared dividend as under:

Type of Dividend

Financial Year 2022-23 Financial Year 2021-22
Divdend Per Dividend Per
Share in Share in

Interim Dividend

Nil 12.00

Final Dividend

5.00* -

Total Dividend

5.00* 12.00

* Recommended by the Board of Directors at its meeting held on May 30, 2023 for Financial year 2022-23. The payment is subject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) of the Company.

Dividend Distribution Policy

In terms of the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (Listing Regulations) the Board of Directors of the Company has adopted a Dividend Distribution Policy which is annexed as "AnnexureA" to this report and is also available on the website of the Company i.e. http://s3.amazonaws.com/ luxs/ckeditors/pictures/356/original/Dividend_ Distribution_Policy.pdf

5. Capex and Liquidity

During the financial year 2022-23, the Company projected to invest 150 crores for enhancing production and storage capacity at Ludhiana along with the ongoing capital expenditures in its Hosiery Park project in West Bengal. With improved mechanical equipment and a scientific approach in operations, the Company aims for more flexibility in terms of capacity according to market demand.

Your Company has sufficient cash to meet its operations and strategic objectives. Net borrowings have decreased from 1205 Crores as on March 31, 2022 to 1114 Crores as on March 31, 2023. The balance funds have been invested in deposits with banks, highly rated financial institutions and debt schemes of mutual funds.

6. Material Changes and Commitments

No material changes and commitments have occurred from the date of the close of the financial year, to which the financial statements relate, till the date of this Report, which affects the financial position of the Company.

7. Significant & Material Orders

No significant and material orders has been passed by any Regulators or Courts or Tribunals impacting the going concern status and the Companys operations in future during the financial year under review.

8. Consolidated Financial Statements

The Consolidated Financial Statements of the Company are prepared in accordance with the relevant Indian Accounting Standards issued by the Institute of Chartered Accountants of India and forms an integral part of this report.

Pursuant to section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries is given in Form AOC-1 and annexed as Annexure"L".

9. Share Capital

The paid-up share capital of the Company stood at 16,26,35,362 as at March 31, 2023 comprising of 3,00,71,681 equity shares of 12/each (plus forfeited share capital amounting 124,92,000).

During the year under review, there was no change in the Share Capital of the Company.

10. Transfer to Reserves

The Company has not transferred any amount to the General Reserve during the financial year under review.

11. Transfer to Investor Education and Protection Fund

During the financial year under review, the Company has transferred unpaid/unclaimed dividend, amounting to 178,780/for Financial Year 2014-15 to the Investor Education and Protection Fund (IEPF) of the Central Government of India.

Further the unpaid/unclaimed dividend, amounting to 156,970 in relation to interim dividend declared in financial year 2015-16 has been transferred to IEPF in May, 2023.

Dividend which was declared for the year ended March 31, 2016 at the Annual General Meeting held on September 27, 2016, which remains unclaimed, will be transferred to the IEPF by November, 2023 pursuant to the provisions of the section 124 and 125 of the Companies Act, 2013. Thereafter, no claim shall lie on the Company for these unclaimed dividends. Shareholders will have to make their claim with the IEPF Authority following the appropriate rules in this regard.

Further, the equity shares corresponding to the dividend which remained unclaimed for seven consecutive years, will be also transferred to the Demat account of the IEPF Authority. Individual notices and necessary newspaper publication will be made in this regard.

5 Equity shares in respect of 1 folio corresponding to the dividend for the year ended on March 31, 2015 which remained unclaimed for seven consecutive years were transferred to the IEPF Authority in compliance with Section 124 of the Companies Act, 2013 read with rule 6 of the Investor Education and Protection Fund (Accounting Audit, Transfer and Refund) Rules, 2017. Individual notices to concerned shareholder(s) were served and advertisement in newspapers were published by the Company in this regard.

Members are requested to claim the dividend(s), which have remained unclaimed/unpaid, by sending a written request to the Company at investors@luxinnerwear. com or to the Companys Registrar and Transfer Agent KFin Technologies Limited at einward.ris@ kfintech.com or at their address at KFin Technologies Limited, Unit: Lux Industries Limited, Selenium Tower B, Plot 31-32, Financial District, Nanakramguda,

Serilingampally Mandal, Hyderabad 500032. Members can find the details of the Nodal officer appointed by the Company under the provisions of IEPF at https:// www.luxinnerwear.com/investor-contacts.

List of shareholders whose dividend remained unclaimed till date of ensuing AGM will be uploaded on the website of the Company www.luxinnerwear. com under heading Investors Section.

12. Deposits

Your Company had not accepted Deposits from the public any time, hence, there is no opening balances of Deposits. Further, your Company has also not accepted any Deposits during the financial year 2022-23 and no principal or interest were outstanding as on March 31, 2023 as per the provisions of the Companies Act, 2013 and the Rules framed thereunder.

13. Particulars of Loans, Guarantees or Investments

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security provided is proposed to be utilized by the recipient are provided in the Standalone Financial Statement. (Refer Note 37 to the Standalone Financial Statement).

14. Internal Control System and their adequacy

Your Company has established guidelines and procedures that facilitate adequate internal control system (including internal financial control system) throughout the Company. The details in respect of adequacy of internal financial controls with reference to the Financial Statements are stated in Management Discussion and Analysis which forms part of this Report.

15. Corporate Social Responsibility Initiatives

Pursuant to section 135 of the Companies Act 2013, read with rules made there under, the Company has constituted a Corporate Social Responsibility (CSR) Committee (the "CSR Committee") comprising of Mr. Ashok Kumar Todi, Mr. Pradip Kumar Todi & Mr. Kamal Kishore Agrawal for monitoring and overseeing the CSR initiatives. Lux undertakes CSR initiatives both directly and as well as through Lux Foundation.

This year, Companys CSR initiatives were based primarily towards:-

Enabling and empowering the underprivileged people of the society to have a dignified lifestyle,

Promoting quality education to underprivileged and tribal children,

Ensuring animal welfare and environment sustainability,

Promoting competitive sports,

Promoting art and culture and

Providing medical support to deserving people and promoting healthcare.

During the year under review, the Company has spent an amount of C6.80 Crores towards CSR activities. An ongoing residential school project for 1000+ underprivileged girls at Joka, West-Bengal is in the stage of completion and will be inaugurated in July 2023. In addition, the Company took initiative for developing one rest-room for economically-weaker section in South 24 Paraganas, West Bengal. T o promote sports activities the Company provided support for development of infrastructures in Newtown, West Bengal. The details are broadly covered in the CSR Report forming part of Annual Report.

The CSR Policy may be accessed on the Companys website at the link: http://s3.amazonaws.com/luxs/ ckeditors/pictures/95/original/CSR_Policy.pdf

The Annual Report on CSR activities is annexed herewith as Annexure B forming part of this Report.

16. Management Discussion and Analysis Report

Pursuant to Regulation 34(2) (e) of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, Management Discussion and Analysis Report for the year 2022-23 is annexed as Annexure C forming part of this Report.

17. Corporate Governance

The Company is committed to uphold good Corporate Governance practices. Pursuant to Regulation 34(3) read with Part C of Schedule V of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, a separate section on Corporate Governance together with a certificate from the Companys Auditor confirming compliance is set out in Annexure D and Annexure F respectively forming part of this report.

18. Chairman and Managing Director Certification

As required under Part B of Schedule II read with Regulation 17(8) of SEBI (Listing Obligations and

Disclosures Requirements) Regulations, 2015, the CEO and Whole-Time Director certification on the accounts of the Company as given by Mr. Ashok Kumar Todi, Chairman and Whole Time Director and Mr. Pradip Kumar Todi, Managing Director is set out in Annexure E forming part of this report. Further a declaration on the Code of Conduct is also part of it.

19. Directors, Key Managerial Personnel (KMP) & Senior Managerial Personnel (SMP)

As of March 31, 2023, the Board comprised of 12 Directors, 6 of whom were Independent Directors, including two independent woman directors. The Chairman of the Board and the Managing Director were held by different individuals, both being Executive Directors. There were no changes in the Board members during the review period. You can find the profiles of all Directors on the Companys website at

https://www.luxinnerwear.com/management/board-

of-directors.

As required under Regulation 34(3) and Schedule V Para C clause (10) (i) of the Listing Regulations the certificate on Non-disqualification of Directors by M/s MR & Associates, Practicing Company Secretary confirming that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of companies by the SEBI / Ministry of Corporate Affairs or any such statutory authority is annexed as Annexure G to the Boards Report.

As on March 31, 2023, the Key Managerial Personnel (KMP) of the Company in compliance with the provision of section 203 of the Companies Act, 2013 are as under:-.

Sl No.

Name of the KMP Designation

1.

Mr. Ashok Kumar Todi Whole-time Director

2.

Mr. Pradip Kumar Todi Managing Director

3.

Mr. Navin Kumar Todi Executive Director

4.

Mr. Rahul Kumar Todi Executive Director

5.

Mr. Saket Todi Executive Director

6.

Mr. Udit Todi Executive Director

7.

Mrs. Smita Mishra Company Secretary & Compliance Officer

8.

Mr. Saurabh Kumar Bhudolia, Chief Financial Officer*

*During the year under review, Mr. Saurabh Kumar Bhudolia, Chief Financial Officer of the Company resigned with effect from January 15, 2023.

Mr. Ajay Nagar has been appointed as the Chief Financial Officer and KMP of the Company on the recommendation of Nomination and Remuneration Committee and approval of Board of Directors with effect from May 30, 2023.

Based on the recommendation of the Nomination and Remuneration Committee, the Board has designated and appointed Mr. Udai Kumar Agarwal as Chief Operating Officer and SMP with effect from November 14, 2022.

a. Retirement by Rotation

Mr. Rahul Kumar Todi (DIN: 00054279) and Mr. Saket Todi (DIN: 02821380), Executive Directors of the Company are liable to retire by rotation and, being eligible, offer themselves for reappointment in accordance to section 152(6) of the Companies Act, 2013, at the ensuing Annual

General Meeting of Company.

b. Declarations from Independent Directors

All Independent Directors of the Company have given declarations under section 149(7) of the Companies Act, 2013 ("Act"), that he/she meets the criteria of independence as laid down under section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

c. Familiarization Program

The details of the training and familiarization program are provided in the Corporate governance report. Further, at the time of the appointment of an independent director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities. The format of the letter of appointment is available on our website, at http://s3.amazonaws.com/luxs/

ckeditors/pictures/344/original/Familiarization_ Programme.pdf. Directors are also explained in detail, the various declarations/affirmations required from him/her as a Independent Director under various provision of Companies Act, 2013, and such other rules and regulations.

d. Board Evaluation

Pursuant to the provisions of section 178 of Companies Act, 2013 and Regulation 17 and 19 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the performance of individual directors and its Committee. The manner in which the evaluation has been carried out has been explained in Nomination & Remuneration Policy in the Corporate Governance Report.

Further, the Independent Directors of the Company met once during the year on March 16, 2023 to review the performance of the Executive Directors, Chairman of the Company and performance of the Board as a whole. Details of the separate meeting of Independent Directors is given in the Corporate Governance Report.

e. Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The salient features of the Nomination and Remuneration Policy is stated in the Corporate Governance Report and has also been posted on the Companys website: http://s3.amazonaws.com/ luxs/ckeditors/pictures/357/original/Nomination_ and_remuneration_Policy_13.05.2023.pdf

f. Meetings

During the year under review, four Board Meetings were convened and held. The details are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and such other rules and regulations.

g. Committees

The following are the details of the Committees as on March 31, 2023 -

Audit Committee

Nomination and remuneration Committee

Stakeholders Relationship Committee

Risk Management Committee

Corporate Social Responsibility Committee

Committee of Directors

Share Transfer Committee

The composition of each of the above Committee, their respective roles and responsibilities are provided in detail in the Corporate Governance Report.

h. Board Procedure:

The Board of Directors meets from time to time to transact the business in respect of which the Boards attention is considered necessary. The Board meets at least once in each quarter, which is scheduled in advance. There is a well-laid procedure to circulate detailed agenda papers to the Directors before each meeting and in exceptional cases these are tabled. The Directors discuss and express their views freely and seek clarifications on items of business taken up in the meetings. The discussions are held in a transparent manner. Various decisions emanating from such meetings are implemented to streamline the systems and procedures followed by the Company.

The Board regularly reviews the strategic, operational policy and financial matters of the Company. The Board has also delegated its powers to the Committees. The Board reviews the compliance of the applicable laws in the meeting. The Budget for the financial year is discussed with the Board at the commencement of the financial year and the comparison of the quarterly/ annual performance of the Company vis-a-vis the budgets is presented to the Board before taking on record the quarterly/ annual financial results of the Company. The requisite information as required is provided to the Board.

The information as specified in Regulation 17(7) of Listing Regulations is regularly made available to the Board.

20. Directors Responsibility Statement

Pursuant to the requirement under section 134(3) (c) and 134(5)of the Companies Act, 2013, the directors confirm:

a. that in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along

with proper explanation relating to material departure, if any;

b. that such accounting policies as mentioned in the notes to annual accounts have been selected and applied consistently and judgments and estimates have been made that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

c. that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. that the annual accounts of the Company have been prepared on a going concern basis;

e. that proper internal financial controls are in place and that the financial controls are adequate and operating effectively;

f. that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems were adequate and operating effectively.

21. Related Party Transactions

All related party transactions that were entered into during the financial year were on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with the Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large during the year under review.

All the related party transactions were reviewed by the Audit Committee. There were no contracts, arrangements or transactions entered into during financial year 2022-23 that fall under the scope of first proviso to Section 188(1) of the Companies Act, 2013. As required under the Companies Act, 2013, the prescribed Form AOC-2 is appended as Annexure -H to the Boards report.

The Policy as per SEBI (LODR) Regulations, 2015 is available on the website of the Company and can be accessed at http://s3.amazonaws.com/luxs/ ckeditors/pictures/345/original/RPT_for_website.pdf

Further as required under Para A of Schedule V of Listing Regulations following promoters are holding more than 10% of shareholding as on March 31, 2023 with whom transactions were held by the Company:

1. Mr. Ashok Kumar Todi

2. Mr. Pradip Kumar Todi

3. Mrs. Prabha Devi Todi

4. Mrs. Bimla Devi Todi

Disclosure of transaction with above-mentioned promoters are given in the notes no. 32 to Notes to accounts.

22. Subsidiaries, Associate and Joint Ventures Companies

The Company has one subsidiary i.e. Artimas Fashions Private Limited (Unlisted Private Limited Company). Further the Company does not have any associates and there were no joint ventures entered into by the Company.

23. Vigil Mechanism

The Company has a vigil mechanism contained in the Whistle Blower Policy, in terms of section 177 of the Companies Act 2013 and Regulation 22 of Listing Regulations, to deal with instances of fraud and mismanagement, if any. The purpose of this policy is to provide a framework to promote responsible and secure whistle blowing.

The Whistle Blower Policy also provides employees to report instances of leak of unpublished price sensitive information as required under sub-regulation 6 of Regulation 9A of SEBI (Prohibition of Insider Trading) Regulations, 2015. It protects employees wishing to raise a concern about serious irregularities within the Company.

A quarterly report with the number of complaints, if any, received under the Policy and their outcome is placed before the Audit Committee and the Board. The policy on vigil mechanism may be accessed on the Companys website: http://s3.amazonaws.com/ luxs/ckeditors/pictures/391/original/Whistle_Blower_ Policy.pdf

24. Auditors & Audit Reports

i. Statutory Auditors:

Your Company at its 27th Annual General Meeting held on September 20, 2022 had reappointed M/s S K AGRAWAL AND CO CHARTERED ACCOUNTANTS LLP (Firm Registration Number: 306033E) as

Statutory Auditors of the Company for a period of five consecutive years i.e., from the conclusion of the 27th AGM until the conclusion of the 32nd AGM of the Company to be held in the year of 2027 at a remuneration as may be fixed by the Board of Directors and Audit Committee as mutually agreed with Auditors. The Statutory Auditors have confirmed that they satisfy the independence criteria as required under the Act.

M/s S K AGRAWAL AND CO CHARTERED ACCOUNTANTS LLP (Firm Registration Number: 306033E) Statutory Auditors of the Company have submitted their Independent Auditors report on the Financial Statements of the Company for the year ended on March 31, 2023.

The Auditors Report on the Financial Statements of the Company for the year ended March 31, 2023 does not contain any qualifications, reservations or adverse remarks. The Auditors Report is enclosed with the Financial Statements and forms part of the Annual Report. The observation made in the Auditors Report read together with relevant notes thereon are self-explanatory and hence do not call for any further comments under Section 134 of the Companies Act, 2013.

ii. Secretarial Auditors and Secretarial Audit Report:

As required under section 204 (1) of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Mohan Ram Goenka of M/s MR & Associates, Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Auditors Report of the Company for the year ended March 31, 2023 does not contain any qualifications, reservations or adverse remarks hence do not call for any further comments under Section 134(3) (f) of the Companies Act, 2013. It is annexed as Annexure I.

iii. Internal Auditor:

Ernst & Young LLP (EY), were appointed as the Internal Auditors of the Company to conduct the Internal Audit for the Financial Year 2022-23 in accordance with the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014. The Audit Committee considers and reviews the Internal Audit Report submitted by the Internal Auditor on a quarterly basis.

iv. Cost Audit and Cost Records:

The provisions of Section 148 of the Companies Act, 2013, with respect to maintenance of Cost records and cost audit are not applicable to the Company.

v. Fraud

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor have reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its Officers or Employees, the details of which would need to be mentioned in this Annual Report.

25. Insider Trading Code

In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (the PIT Regulations) on prevention of insider trading, the Company had instituted a comprehensive Code of Conduct for regulating, monitoring and reporting of trading by Insiders. The said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.

During the financial year 2022-23, Code of Internal Procedure and Conduct to Prohibit Insider Trading and Code of practices and procedures of fair disclosures of unpublished price sensitive information were amended by the Company in its Board meeting held on August 9, 2022 and the same was updated on the website of the Company. Both the aforesaid Codes are in line with the SEBI (PIT) Regulations, 2015.

26. Credit Ratings

During Financial Year 2022-23 under review, Acuite Ratings & Research Limited (previously known as SMERA Ratings Limited) has reaffirmed the following rating with enhancement in the limit in the long-term Bank facilities:-

Ratings

Amount Category Remarks

ACUITE AA+(Stable)

464.18 LongTerm Bank Facilities Reaffirmed

ACUITE A1+

1.50 Short Term Instruments Reaffirmed

27. Annual Return

Pursuant to Section 92(3) read with Section 134(3)

(a) of the Act, the Annual Return as on March 31, 2023 is available on the Companys website at http:// s3.amazonaws.com/luxs/ckeditors/pictures/411/ original/Draft_MGT-7.pdf

28. Business Responsibility and Sustainability Report

Your Company contributes towards sustainable development and fulfills its social, environmental, and economical responsibilities, creating a long-lasting value for all stakeholders. Company is committed to maintain highest standards of ethics in all spheres of its business activities.

In compliance with regulation 34(2)(f) of Listing Regulations, Lux has published its Business Responsibility Report (BRR), as a part of its Annual Report every year in the past. In terms of amendment to regulation 34 (2) (f) of LODR Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021 and the National Guidelines on Responsible Business Conduct (NGRBC) guidelines as established by the Ministry of Corporate Affairs (MCA), Government of India, Lux is publishing its Business Responsibility & Sustainability Report (BRSR) which forms part of the Annual Report as Annexure J.

29. Cyber Security

Your Company has a structured framework for cybersecurity. The Risk Management Committee ensures the overall responsibility for oversight of cybersecurity frameworks. Mr. Bibek Maity is Chief Information Officer ("CIO") of the Company having rich experience in Information/Cybersecurity. He looks after the information technology and cyber security related matters.

30. Risk Management

In accordance with the SEBI Listing Regulations, the Board of Directors of the Company is responsible for framing, implementing and monitoring the risk management plans of the Company. The Company has a "Risk Management Policy" to identify risks associated with the Company, assess its impact and take appropriate corrective steps to minimize the risks that may threaten the existence of the Company. The Enterprise Risk Management (ERM) framework of the Company is comprehensive and robust enough to respond against any uncertainty.

It has risk identification, analysis, evaluation and treatment mechanism, ensuring that smallest factor of uncertainty present in any layer is identified, evaluated and treated suitably. An update on ERM plan is presented and deliberated upon in the RMC meetings on half yearly basis and at least once in a year at the Board level. The Audit Committee has additional oversight over financial risks and controls. Annual risk assessment exercise is conducted in line with the framework, existing risks, their mitigation actions are evaluated, and new risks are identified.

Risk Management Committee (RMC) of the Company on half-yearly basis, reviews the risks, adequacy of risk mitigating actions and identifies the new risks, takes strategic decisions to ensure that organization successfully achieves the business objectives and fulfils expectations of all its stakeholder.

During the year under review, the RMC evaluated the risk management system of the Company, reviewed the Cyber security related risk and action initiated by the management to minimize the impact on the Company. The Risk Management Policy of the Company was reviewed by the Board in its meeting Meeting held on February 9, 2023 and the same has been updated on the website: http://s3.amazonaws.com/luxs/ckeditors/ pictures/389/original/Risk_Management_Policy.pdf

31. Industrial Relation

During the year under review, the industrial relations remained cordial and stable. The directors wish to place on record their appreciation for the excellent cooperation received from the employees at all levels.

32. Litigation

During the year under review, there were no outstanding material litigations. Details of litigations/ dispute are disclosed in the financial statements.

33. Compliance with Secretarial Standards

The Company complies with all applicable mandatory secretarial standards issued by the Institute of Company Secretaries of India.

34. Particulars of Employees

As on March 31, 2023, total number of employees on the records of the Company was 3055 as against 2678 in the previous financial year.

Disclosure required in respect of employees of the Company, in terms of provisions of Section 197 (12) of the Companies Act, 2013 read wi th Rule 5

of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as AnnexureK and forms part of Directors Report.

Directors place on record their appreciation for the significant contribution made by all employees, who through their competence, dedication, hard work, cooperation and support, have enabled the Company to cross new milestones on a continual basis.

35. Prevention of Sexual Harassment at workplace

The Company is committed to provide a work environment which ensures that every employee is treated with dignity, respect and equality. There is zero tolerance towards sexual harassment. Any act of sexual harassment invites serious disciplinary action. The Company has established policy against Sexual Harassment for its employee. The Company has an internal complaint committee, for Prevention of Sexual Harassment comprising of (i) Mrs. Smita Mishra Company Secretary & Compliance OfficerChairperson (ii) Mr. Rajendra Kumar Bhutoria HR Manager Member (iii) Mrs. Shikha Jajoo GM FinanceMember. The policy allows any employee to freely report any such act and prompt action will be taken thereon. No complaints were received during the year under review.

36. Codes and Board Policies

The Company strives to conduct its business and strengthen its relationships in a manner that is dignified, distinctive and responsible. It adheres to highest ethical standards to ensure integrity, transparency, independence and accountability

in dealing with its stakeholders. Accordingly, the following codes and policies have been adopted by the Company:

Code of Conduct

Vigil Mechanism/Whistle Blower Policy

Risk Management Policy

Nomination and Remuneration Policy

Related Party Transaction Policy

Corporate Social Responsibility Policy

Code of Internal Procedure and conduct to Prohibit Insider Trading in Securities of Lux Industries limited ("Company").

Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)

Policy on Preservation of documents/Archival Policy

Policy on Disclosure of Materiality for Disclosure of Events

Policy for Prevention of Sexual Harassment at Workplace

Business Responsibility and Sustainability Policy

Dividend Distribution Policy

Policy on determining Material Subsidiaries.

Health, Safety and Environment Policy

The Company has not approved any new policy during the year, however some existing policies were amended and revised by the board as required under Companies Act, 2013 and SEBI (Listing Obligations and Disclosures Requirements)Regulations. The policies are reviewed periodically by the Board and updated as needed.

During the year board revised the following policies/Codes:

Name of the Policy

Summary of Key Changes Web link (if any)

Risk management Policy

The Risk Management Policy was amended in line with SEBI (LODR) Regulations, 2015 as amended from time to time. http://s3.amazonaws.com/luxs/ckeditors/

pictures/389/original/Risk_Management_

Policy.pdf

Code of Internal Procedure and Conduct to Prohibit Insider Trading

The Code of Internal Procedure and Conduct to Prohibit Insider Trading was amended in line with SEBI (PIT) Regulations, 2015 as amended from time to time. http://s3.amazonaws.com/luxs/ckeditors/

pictures/259/original/Lux_Insider_trading_

Code_v5_09082022.pdf

Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)

The Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive information (UPSI) was amended in line with SEBI (PIT) Regulations, 2015 as amended from time to time. http://s3.amazonaws.com/luxs/ckeditors/

pictures/234/original/Code_of_Practices_

and_procedure_of_Fair_Disclosure.pdf

Name of the Policy

Summary of Key Changes Web link (if any)

Code of Conduct

The scope of applicability of the Code of Conduct and the duties of the independent directors were modified. http://s3.amazonaws.com/luxs/ckeditors/

pictures/251/original/Code_of_Conduct.pdf

37. Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo:

The particulars relating to conservation of energy, technology absorption and foreign exchange earnings and outgo required to be disclosed under section 134(3) (m) of the Companies Act, 2013, are annexed here to and forms part of this report as Annexure M.

38.Insurance

The Company has taken adequate insurance to cover the risks to its employees, property (land and buildings), plant, equipment, other assets and third parties.

39. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (Code):

During the year under review, the Company has not submitted any applications and there is no pending proceeding against it.

40. The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof:

Not Applicable.

41. Acknowledgement

The Board wishes to place on record its sincere appreciation for the continued assistance and support extended to the Company by its customers, vendors, investors, business associates, banks, government authorities, employees and other stakeholders.

42. Annexures forming part of Board Report

The Annexures referred to in this Report and other information which are required to be disclosed are annexed herewith and form a part of this Report of the Directors:

Annexure

Particulars

Annexure A

Dividend Distribution Policy

Annexure B

Annual Report on Corporate Social Responsibility (CSR) Activities

Annexure C

Management Discussion and Analysis Report

Annexure D

Report on Corporate Governance

Annexure E

Certification by Chairman and Managing Director of the Company

Annexure F

Auditors Certificate on Corporate Governance

Annexure G

Certificate of NonDisqualification of Directors

Annexure H

Particulars of contracts / arrangements made with related parties in Form AOC-2

Annexure I

Secretarial Audit Report

Annexure

J

Business Responsibility & Sustainability Report (BRSR)

Annexure K

Details pertaining to remuneration 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

Annexure L

Statement containing salient features of the financial statements of Subsidiaries in Form AOC-1

Annexure M

Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo

 

For and on behalf of the Board of Directors

Sd/-
Ashok Kumar Todi

Place: Kolkata

Chairman

Date: May 30, 2023

DIN: 00053599