TO THE MEMBERS,

The Board of Directors ("Board") have pleasure in presenting the 42nd Annual Report on the business and operations together with Audited Financial Accounts of the Company ("the Company") for the Financial Year ended March 31, 2023.

1. FINANCIAL PERFORMANCE- STANDALONE & CONSOLIDATED

The highlights of standalone and consolidated financial performance of the Company are as follows:

(` in Lakhs unless otherwise stated)

a. COMPANY PERFORMANCE Standalone:

On standalone basis, the revenue from contracts with customers during the Financial year 2022-23 stood at ` 231,952.34 Lakhs as compared to ` 1,75,131.10 Lakhs in the last year registering a growth of 32.45%.

For the Financial Year 2022-23, the profit before exceptional items and income tax stood at ` 11,287.45 Lakhs as compared to ` 6,328.70 Lakhs in the last year witnessing a significant increase of 78.35%. The Profit before Tax (PBT) after exceptional items stood at ` 10,743.62 Lakhs as compared to ` 4,614.75 Lakhs in the last year registering an increase of 132.81%. The Profit after Tax (PAT) stood at ` 7,063.59 Lakhs as compared to ` 3,543.37 Lakhs registering a significant increase of 99.35%. The Total Comprehensive Income increased to ` 7,131.92 Lakhs as against ` 3,211.23 Lakhs in the last year registering an increase of 122.09%. The Basic and Diluted Earnings per share stood at ` 75.57 registering a significant increase of 99.35%.

Consolidated:

For the Financial Year 2022-23 on consolidated basis, the Profit after Tax (PAT) stood at ` 10,308.02 Lakhs as compared to ` 4,072.47 Lakhs registering a significant increase of 153.11%. The Total Comprehensive Income increased to ` 10,445.47 Lakhs as against ` 3,785.45 Lakhs in the last year registering an increase of 175.94%. The Basic and Diluted Earnings per share stood at ` 110.27 registering a significant increase of 153.11%.

b. SHARE CAPITAL

The paid-up Equity Share Capital as on March 31, 2023 was ` 934.77 Lakhs. During the year under review, the Company has not issued shares or granted stock options or sweat equity.

c. DIVIDEND

Your Board have recommended a Dividend @ ` 27/- (i.e. 270%) per equity share having face value of ` 10/- each for the FY 2022-23 in its meeting held on May 27, 2023 subject to approval of Shareholders in the ensuing AGM ("AGM"). The Dividend paid for the last financial year was ` 13.50/- (i.e. 135%) per Equity Share having face value of ` 10/- each.

The dividend pay-out for the FY 2022-23 would work out to ` 2,523.89 Lakhs, which is equivalent to 35.73% of the net profits of the Company during the year as against the pay-out of ` 1,261.94 Lakhs in last FY 2021-22. The Register of Members and Share Transfer Books shall remain closed from Friday, August 11, 2023 to Tuesday, August 22, 2023 (both days inclusive).

The dividend as recommended by the Board, if approved by the shareholders at the ensuing AGM shall be paid to the eligible Shareholders, whose names appear in the Register of Members as on Thursday, August 10, 2023 within the stipulated time period.

DIVIDEND DISTRIBUTION POLICY

Pursuant to the amended provisions of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has Dividend Distribution Policy in place which can be accessed on the website of the Company at https://www.lumaxworld. in/lumaxindustries/pdf/dividend-distribution-policy-lil.pdf

d. AMOUNT TRANSFER TO RESERVES

The Board of the Company do not propose to transfer any amount to reserves other than transfer of undistributed profits to surplus in statement of profit & loss.

e. PERFORMANCE OF SUBSIDIARY AND ASSOCIATE COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

During the year under review, the Company has acquired 100% Equity Stake (Ownership interest) in a Czech Republic based Company, named "Damberty Real s.r.o." whose name was changed to "Lumax Industries Czech s.r.o.", Wholly Owned Subsidiary (WOS). The WOS is engaged in the business of providing technical and engineering solutions for the automotive lighting systems.

The Company also has one Associate Company viz. SL Lumax Limited in which the Company holds 21.28% of equity share capital. SL Lumax is based in Chennai and primarily engaged in manufacturing of automotive components which includes lamp assemblies, chassis, mirror and front-end modules (FEM).

During FY 2022-23, the Associate's profit attributable to the Company was ` 4,170.54 Lakhs as compared to the ` 667.18 Lakhs in the last year.

In accordance with the provisions of the Companies Act, 2013 (‘'the Act'') and Regulation 33 of the Listing Regulations and applicable Accounting Standards, the Audited Consolidated Financial Statements of the Company for the FY 2022-23, together with the Auditors' Report form part of this Annual Report.

A report on performance and financial position of WOS and Associate Company included in the Consolidated Financial Statement (CFS) is presented in a separate section in this Annual Report in the prescribed format AOC-1 as a part of financial statements.

In accordance with Section 136 of the Act, the electronic copy of Financial Statements of the WOS and Associate Company shall be available in the investor section of website of the Company at https://www.lumaxworld.in/ lumaxindustries/associate-financials.html. Any Member desirous of obtaining a copy of the said Financial Statements may write to the Company Secretary at the Registered Office of the Company. The Financial Statements including the CFS, and all other documents required to be attached to this report have been uploaded on the website of the Company at https://www. lumaxworld.in/lumaxindustries/index.html

2. STATE OF COMPANY'S AFFAIRS

The past fiscal year was a significant year for the Indian automotive segment especially for the passenger vehicle segment where India surpassed Japan to become the 3rd largest auto market after China and United States. The passenger vehicle segment recorded a strong growth of 25% in production vis-?-vis the last year. All the other segments showed a decent growth indicating the strong economic growth. With the significant new model launches and the trust shown by the Original Equipment Manufacturers (OEMs), the Company was able to clock growth more than that of the industry.

It has been a pretty successful year for the Company with addition of new customers in its portfolio coupled with the new businesses from existing customers to improve top line.

With the technological advancements happening in the automotive industry and with increased focus of OEMs on localization, the Company invested significantly on its R&D facility to maintain the competitive edge against the competition. This has been evident with the strong order book that the Company maintains with the development and production of new technology parts.

The Company with the new launches planned in the FY 2023-24, shall be setting up new manufacturing facility in the western region coupled with expansion in the Gujarat region. The new facility coming up in western region shall be supporting existing and new customers with the supplies of future generation of automotive lamps. This year the Company shall also be venturing into a new vertical with the introduction of Automotive Heater Control Panel for a prestigious OEM. The product shall enable the Company to expand the horizon into a new segment with support from its partners.

The technology has been changing and evolving rapidly, and in order to always be ahead with the competition, the Company has been focussing on strengthening its R&D capability. In this direction the Company's Wholly Owned Subsidiary in Czech Republic is playing a pivotal role to further enhance the skill of the local staff with exposure to new futuristic technologies.

With the introduction and emphasis of localization by OEMs, to avoid the risks associated with the supply chains, Lumax has invested in the upgradation of its existing manufacturing facilities. The same will help in successful localization of technologically advanced products thus giving the customers immunity from supply chain risks with best quality products.

The Company further tried to strengthen its internal procedures in a major push towards paperless office. During this year, the Company focused on digitalization of the key approval processes and these processes are integrated with the other important application. After the Covid-19 pandemic, the term "Digitalization" has become more pervasive and importance is well known to everyone. Now after digitalization of key approval processes, these are further streamlined and helped in increasing the productivity and faster decision making. For Lumax, data security and business continuity will always remain in focus as this is very important from the sustainability point of view. To achieve this, the Company has implemented many security solutions which will be rare in the manufacturing industries. For business continuity, the Company is having 3 layers of security to meet the customer's supply and the Company's IT infra can't afford single minute downtime. The Company is having IT infra in different seismic zones for continuity of the IT operations.

During the year the Company's Chakan Plant got TISAX (Trusted Information Security Assessment Exchange) certificate for its design department and this is a major achievement in security. The Company's Gurugram Design department is also ISO 27001:2013 certified. To strengthen supply chain, the Company has covered all the domestic suppliers on portal LSETU and this is tightly integrated with SAP MRP. All suppliers can view their transactions at Lumax end on this portal and this will further increase the trust with suppliers.

Safety is the most critical and important priority in the automotive lighting industry, and will remain the Company's primary focus as new innovations are developed over time. However, the end consumer desires an increasing level of personalization possibilities in all areas of their lives and that extends into the mobility segment as well. OEMs are using lighting to fulfill that consumer demand, as well as to emphasize their brand signatures. Lighting is evolving from what was termed as "the new chrome", to what the industry is calling "intelligent chrome". Complex electronics, software, and communication with the vehicle network is becoming the norm. The Electric Vehicle (EV) segment is also growing rapidly globally and also in India. This vehicle segment is driving the adoption of new innovative technologies at an ever-increasing rate. The utilization of lighting as a communication tool is opening new areas of functionality and features. The area once occupied by the front grille or rear decklid are now a new canvas that design studios are using for exactly that purpose.

The desires of the studios to utilize low profile headlamps, hidden-til-lit functions, full end-to-end lamps integrating a variety of new features puts new challenges to engineering and manufacturing teams. The teams are focused on finding cost effective solutions to these challenges. Efficiency is the key to find the balance between high complexity and low power consumption. The Company continues to enhance its Center of Competency organization to meet the customer requirements, the priority is to build the technical competency in India. The launch of its own proprietary suite of optical design software has allowed it to efficiently develop complicated optical systems that optimize power consumption and unparalleled aesthetic appearance. This also significantly lowered the cost of engineering, and still improved the responsiveness to the customer. The vertical integration of electronics also improved the cost structure, and agility to meet the customer desires in terms of performance, features and compressed timelines. The Company is also able to leverage its global expertise in optics, electronics and CAE to develop lighting products for the interior of the vehicle as well. This is an exciting new area to explore, and where the Company can provide a great deal of value.

The Company demonstrated its commitment towards Quality by ensuring that quality processes are adhered to by all through its recently Launched LDR (Lumax Development Rule) Product Development Process. This is an Online Project Management 7 gate tool that has taken program execution towards excellence.

The Company has won accolades and awards not only from the customers but also at various industry conventions like ACMA competition, National Convention of Quality Control Circle (NCQCC), Kaizen etc. Also Company got International TPM awards from Japan Institute of Plant Maintenance (JIPM) for best manufacturing practices.

The Company continues to uphold the highest standards of Corporate Governance, treating its various stakeholders as an ethical requisite rather than a regulatory necessity and continue to base all its actions on the principles of fairness, trust and transparency, standing by its core values of Respect, Integrity, Passion and Excellence.

All in all, the Company made good progress in all areas in FY 2022-23, and the management is quite confident that going forward the Company will continue to deliver value to all its customers and stakeholders. The long term outlook for the Company remains positive and it is poised to outperform the industry.

a. CAPACITY EXPANSION & MODERNIZATION OF FACILITIES

The Company is constantly expanding the boundaries of its existing facilities and during the year under review, the Company has invested towards capacity expansion of its manufacturing facilities to the tune of ` 9,737 Lakhs. Further, an expenditure to the tune of ` 412 Lakhs was done on Research and Development facilities of Chakan and Gurugram.

b. TECHNOLOGY, INNOVATION AND QUALITY

The accelerating desire for end consumers to personalize every aspect of their lives, have driven OEMs to push the envelope even more to integrate this aspect into their vehicles. Of course, safety remains the first priority, and there are regulatory requirements that must be met, however new features and functions are being developed, and lighting is one of the most prominent ways to achieve this objective. The growing Electric Vehicle (EV) segment is accelerating this trend, using the space once occupied by the front grille and rear decklid as a canvas to add these features. The trend of the studios is to minimize the functional elements of lighting, to make room for new styling features such as welcome/ goodbye animations, charging indicators, lit logos, projected images, and full edge-to-edge lit signatures. New features are also being implemented to improve visibility and safety such as matrix headlamps, high beam boost, AFS, and gliding turn indicators. This added complexity puts a high priority on developing compact, efficient, and light weight designs. Obviously electronic and software content is growing exponentially to enable all of these features to be seamlessly integrated into the vehicle networks. A high priority is being given to develop ultra compact/efficient projector modules for the main headlamp functions, but also for matrix headlamps. For signal lighting, highly efficient micro-optics, OLED, and light blades/guides are being developed.

The regulations will continue to evolve for even more features to be allowed, so it is very important to utilize the Company's offices in Europe and Taiwan to understand these industry trends, and adapt them to the Indian market. Interior lighting is one of the fastest growing areas for innovation, and the Company will leverage its technical competency in optics, electronics, software, and CAE to develop new innovative technologies to meet this trend. Mood lighting, accent lighting, lit smart surfaces are all areas that the Company is now aggressively exploring. The Company continues to grow its technical competency in India through its offices in Europe and Taiwan, as well as its partner Stanley Japan. The goal remains to allow the Company to be self-reliant in new technology development and ensure that its teams have the necessary technical competency in India to best serve the customer's needs.

The Company will continue to innovate and develop world class products and put thrust and focus on R&D, Global Technology partnerships and development of advanced technological automotive products. As an annual practice, this year as well, the Company had celebrated 15 September as Innovation Day, on the occasion of Engineers Day, showcasing the Company's new products and technologies to the customers.

c. MANAGEMENT DISCUSSION & ANALYSIS REPORT

As stipulated under the provisions of Regulation 34 of the Listing Regulations, Management Discussion & Analysis Report forms an integral part of this Report as an Annexure - A and provides details on overall Industry Structure and Developments, financial and operational performance and other material developments during financial year under review.

d. Key Business Developments

During the year under review, the Company has initiated the process of setting up of the new Greenfield Project at Chakan, Pune (Maharashtra) with the Capital outlay up to ` 175 Crore for Phase 1. This project will cater to the new orders received from OEM customers for advance lighting solutions. The Capex will be funded by mix of Debt and internal accruals and peak annualized turnover is expected to the tune of ` 600 Crore post commissioning. The Project is expected to be commissioned by Q2 FY 24.

e. THE CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the financial year ended March 31, 2023, there was no change in the nature of business of the Company.

3. GOVERNANCE AND ETHICS a. CORPORATE GOVERNANCE

The Report on Corporate Governance together with the Auditor's Certificate regarding the Compliance of conditions of Corporate Governance as stipulated in Regulation 34 of Listing Regulations is annexed and forms part of this Report as an Annexure - B.

(i) DIRECTORS

The Composition of Board of Directors is in conformity with the applicable provisions of the Act and Listing Regulations.

During the year under review, there was no change in the composition of the Board.

The Board of Directors in their meeting held on February 09, 2023 had approved the following reappointments:

- Re-appointment of Ms Ritika Modi for the second term of 5 years.

- Re-appointment of Mr Vineet Sahni for the further period of 3 years.

- Re-appointment of Mr Kenjiro Nakazono for the further period of 3 years.

All the above re-appointments have also been approved by the Shareholders through Postal Ballot.

Mr Kenjiro Nakazono and Mr Vineet Sahni resigned from the Board with effect from April 07, 2023 and April 14, 2023 respectively.

Subsequent to the closure of financial year, Mr Raajesh Kumar Gupta has been appointed as an Executive Director and Company Secretary of the Company with effect from May 27, 2023 and Mr Yoshitsugu Matsushita has been appointed as a Non-Executive Director on the Board of Company with effect from June 01, 2023.

RETIREMENT BY ROTATION AND SUBSEQUENT RE-APPOINTMENT

In accordance with the Articles of Association of the Company and Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), Mr Toru Tanabe, Non Executive Director (DIN: 06883767) is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for reappointment.

A brief profile of Mr Toru Tanabe is provided in the Notice of the ensuing Annual General Meeting of the Company.

INDEPENDENT DIRECTORS

The Board has 6 (Six) Independent Directors, including one Woman Independent Director, representing diversified fields and expertise. Details are provided in the relevant section of the Corporate Governance Report.

All Independent Directors have registered themselves with the Indian Institute of Corporate Affairs for the inclusion of their name in the data bank of independent directors, pursuant to the provision of Rule 6 (1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

Further, as stipulated under the Regulation 17(10) and 19 read with Schedules thereto of Listing Regulations, an evaluation exercise of Independent Directors was conducted by the Nomination and Remuneration Committee and the Board of the Company. The Board members satisfied themselves with the performance and contribution of all the Independent Directors.

KEY MANAGERIAL PERSONNEL (KMP)

As on March 31, 2023, Mr Deepak Jain, Chairman & Managing Director, Mr Anmol Jain, Joint Managing Director, Mr Vineet Sahni, Whole Time Director (Senior Executive Director & CEO), Mr Tadayoshi Aoki, Whole Time Director (Senior Executive Director), Mr Kenjiro Nakazono, Whole Time Director (Executive Director), Mr Shruti Kant Rustagi, Chief Financial Officer and Mr Pankaj Mahendru, Company Secretary were regarded as Key Managerial Personnel (KMPs).

Mr Shruti Kant Rustagi, resigned from the position of Chief Financial Officer ("CFO") of the Company consequent upon his transfer to Group Corporate Materials Function, with effect from the close of business hours of March 31, 2023 and Mr Ravi Teltia was appointed as the Vice President and Chief Financial Officer designated as Key Managerial Personnel of the Company with effect from April 01, 2023. Subsequent to the close of Financial Year:

- Mr Kenjiro Nakazono and Mr Vineet Sahni resigned from the Board with effect from April 07, 2023 and April 14, 2023 respectively.

- Mr Vishnu Johri has been appointed as a Chief Executive Officer (KMP) of the Company with effect from April 15, 2023.

- Mr Pankaj Mahendru, resigned from the position of Company Secretary of the Company with effect from the close of business hours of May 26, 223, consequent upon his transfer to Group Company.

- Mr Raajesh Kumar Gupta has been appointed as an Executive Director and Company Secretary (KMP) of the Company with effect from May 27, 2023

- Mr Yoshitsugu Matsushita has been appointed as a Non Executive Director with effect from June 01, 2023.

c. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the FY 2022-23, the Board met Six (6) times on May 24, 2022, August 10, 2022, November 11, 2022, December 07, 2022, February 09, 2023 and March 29, 2023. It is confirmed that the gap between two consecutive meetings was not more than one hundred and twenty days as provided in Section 173 of the Act. Pursuant to the requirements of Para VII (1) of Schedule IV of the Act and the Listing Regulations, a separate Meeting of the Independent Directors of the Company was held on March 29, 2023, without the presence of Non-Independent Directors and Members of the management, to review the performance of Non- Independent Directors and the Board as a whole, the performance of the Chairperson of the Company, taking into account the views of Executive Directors, Non-Executive, Non-Independent Directors and also to assess the quality, quantity and timeliness of flow of information between the Company Management and the Board.

d. DIRECTORS RESPONSIBILITY STATEMENT

In terms of Section 134 (3) (c) & 134 (5) of the Act, and to the best of their knowledge and belief, and based on the information and explanations provided, your Directors hereby make the following statements:

(i) that in the preparation of the Annual Accounts for the financial year ended March 31, 2023 the applicable Accounting Standards have been followed and there are no material departures;

(ii) that the Directors have selected such accounting policies and applied 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 as on March 31, 2023 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 the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the Directors have prepared the Annual Accounts on a "going concern" basis;

(v) that 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;

(vi) that 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.

e. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS

The requisite declarations, as per the Regulation 16 (1) (b) and Regulation 25 of Listing Regulations read with the provisions of Section 149 (6) of the Act, have been received from the Independent Directors regarding meeting the criteria of Independence as laid down under those provisions. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties.

f. POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS

Pursuant to the provisions of Section 178(1) of the Act and Regulation 19(4) read with Part D of Schedule II of Listing Regulations, the Company has in place the Nomination and Remuneration Policy of Directors, Key Managerial Personnel (KMP) and Other Employees including criteria for determining qualifications, positive attributes, independence of a Director and other matters provided u/s 178(3) of the Act.

• The main features of the Policy are as follows:

• It acts as a guideline for matters relating to appointment and re-appointment of directors;

• It contains guidelines for determining qualifications, positive attributes of Directors, and independence of a Director;

• It lays down the criteria for Board Membership;

• It sets out the approach of the Company on Board Diversity;

• It lays down the criteria for determining independence of a Director, in case of appointment of an Independent Director.

During the year under review, there were no substantive changes in the Policy except to align the Policy with amendments made to applicable laws and the same is available on the website of the Company at https:// www.lumaxworld.in/lumaxindustries/pdf/nomination-and-remuneration-policy-of-directors-keymanagerial-personnel-and-other-employees.pdf.

g. PERFORMANCE EVALUATION OF BOARD, COMMITTEES AND DIRECTORS

One of the key responsibilities and role endowed on the Board is to monitor and evaluate the performance of the Board, Committees and Directors.

Accordingly, in line with applicable provisions of the Act and Listing Regulations, the annual performance evaluation of the Board as a whole, Committees and all the Directors was conducted, as per the internally designed evaluation process approved by the Nomination and Remuneration Committee. The evaluation tested key areas of the Board's work including strategy, business performance, risk and governance processes. The evaluation considers the balance of skills, experience, independence and knowledge of the management and the Board, its overall diversity, and analysis of the Board and its Directors' functioning.

Evaluation Technique

The evaluation methodology involves discussion on questionnaires consisting of certain parameters such as Evaluation factor, Ratings and Comments, if any.

The performance of entire Board is evaluated by all the Directors based on Board composition and quality, Board meetings and procedures, Board development, Board strategy and risk management, etc.

The performance of the Managing Director and Executive Directors is evaluated by all the Board Members based on factors such as leadership, strategy formulation, strategy execution, external relations, etc.

The performance of Non-Executive Director and Independent Directors is evaluated by other Board Members based on criteria like managing relationship, Knowledge and skill, personal attributes, etc.

It also involves self-assessment by all the Directors and evaluation of Committees of Board based on Knowledge, diligence and participation, leadership team and management relations, committee meetings and procedures respectively.

Further, the assessment of Chairman & Managing Director's performance is done by each Board Member on similar qualitative parameters.

EVALUATION OUTCOME

The feedback of the evaluation exercise and inputs of Directors are collated and presented to the Board and an action plan to further improve the effectiveness and efficiency of the Board and Committees is placed. The Board as a whole together with each of its committees were working effectively in performance of its key functions - Providing strategic guidance to the Company, reviewing and guiding business plans, ensuring effective monitoring of the management and overseeing risk management function. The Board is kept well informed at all times through regular communication and meets once per quarter and more often as and when need arises. Comprehensive agendas are sent to all the Board Members well in advance to help them prepare and ensure the meetings are productive. The Company makes consistent efforts to familiarize the Board with the overall business performance covering all Business verticals, Product Category and Corporate Function from time to time.

The performance of the Chairman was evaluated satisfactory in the effective and efficient discharge of his role and responsibilities for the day-to-day management of the business, with reference to the strategy and long-term objectives. The Executive Directors and Non-Executive Directors provided entrepreneurial leadership to the Company within a framework of prudent and effective controls, with a balanced focus on policy formulation and development of operational procedures. It was acknowledged that the management accorded sufficient insight to the Board in keeping it up to date with key business developments which was essential for each of the individual Directors to maintain and enhance their effectiveness.

h. AUDIT COMMITTEE & COMPOSITION

The Composition of the Audit Committee is in alignment with the provisions of Section 177 of the Act read with rules framed thereunder and Regulation 18 of the Listing Regulations. The members of the Committee are financially literate and having experience of financial management. As on March 31, 2023 the Audit Committee of Board comprised of Six (6) Members viz. Mr Rajeev kapoor (Chairman), Mr Avinash Parkash Gandhi, Mr Dhiraj Dhar Gupta, Mr Rattan Kapur (Independent Directors), Mr Deepak Jain and Mr Tadayoshi Aoki (Executive Directors). The Company Secretary acts as a Secretary to the Audit Committee.

The details regarding category of Members and terms of reference of Audit Committee have been stated in Corporate Governance Report which forms part as an Annexure - B to this Report.

All the recommendations of Audit Committee made to the Board of Directors were duly accepted by the Board of Directors.

i. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

For the FY 2022-23, all the Related Party Transactions entered into by the Company were in ordinary course of business and at arms-length basis. All Related Party Transactions, which are foreseen and repetitive in nature, are placed before the Audit Committee on yearly basis for obtaining prior omnibus approval of the Committee. The transactions entered into pursuant to the omnibus approval are placed before the Audit Committee for review and approval on quarterly basis. All Related Party Transactions are subjected to independent review by a reputed accounting firm to establish compliance with the provisions of the Act and Listing Regulations.

There were no material significant Related Party Transactions entered into, by the Company with

Promoters, Directors or Key Managerial Personnel, which may have a potential conflict of interest for the Company, at large.

The details of Related Party Transactions undertaken by the Company which fall under the purview of "Materiality" as per Listing Regulations are attached in Form AOC-2 as an Annexure - C to this Report.

Further, the Shareholders approval on such Material Related Party Transactions have been taken by way of Postal Ballot for which the results were declared by the Company on September 29, 2022.

The details of the Related Party transactions as per IND AS 24 are set out in the notes to the financial statement to the Company.

The Company has formulated a policy on Related Party Transactions, which is available on the Company's website at https://www.lumaxworld.in/lumaxindustries/ pdf/policy-document-on-materiality-and-dealing-withrelated-party-transactions.pdf

j. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism named Whistle Blower Policy, for Directors, employees and business associates to report to the Management, concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics, in accordance with the provisions of Section 177 (10) of the Act and Regulation 22 of the Listing Regulations. This mechanism provides for adequate safeguards against unfair treatment of whistle blower who wishes to raise a concern and also provides for direct access to the Chairman of the Audit committee in appropriate/exceptional cases.

The Whistle Blower Policy is available on the website of the Company https://www.lumaxworld.in/lumaxindustries/ pdf/vigil-mechanism-whistle-blower-policy_LIL.pdf.

To further strengthen this mechanism, the Company has an Employee App which is available for both android and iOS users to report any instances of financial irregularities, breach of Code of Conduct, abuse of authority, unethical/unfair actions concerning Company vendors/suppliers, malafide manipulation of Company records, discrimination among employees, anonymously, to provide protection to the employees who report such unethical practices and irregularities.

Any incidents that are reported are investigated and suitable action is taken in line with the Whistle Blower Policy.

During the year under review, no incidence under the above mechanism was reported.

k. CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT OF THE COMPANY

The Company has adopted the Code of Conduct for Directors and Senior Management of the Company. The same is available on the website of the Company at https://www.lumaxworld.in/lumaxindustries/pdf/Code-of-Conduct-for-Directors-and-Senior-Management.pdf.

l. PARTICULARS OF REMUNERATION OF DIRECTORS AND OTHER EMPLOYEES

Information on Employees as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms an integral part of this Report as an Annexure - D.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules which form part of the Boards' Report, will be made available to any shareholder on request, as per provisions of Section 136(1) of the Act.

m. COMPLIANCE MANAGEMENT FRAMEWORK

The Company has a robust and effective framework for monitoring compliances with applicable laws. The Company has installed a Software namely AVACOM (Team Lease Product) for Compliance Management and through this Software the Company is able to get the structured control over applicable compliances by each of the units of the Company.

A separate Corporate Compliance Management Team periodically reviews and monitors compliances by units and supports in effective implementation of same in a time bound manner. The Board and Audit Committee alongwith Compliance team periodically monitors status of compliances with applicable laws based on quarterly certification provided by Senior Management.

n. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Please refer to the Paragraph on Familiarization Programme in the Corporate Governance Report for detailed analysis.

o. HUMAN RESOURCES

Please refer to the paragraph on Human Resources in the Management Discussion & Analysis section for detailed analysis.

a. Adequacy of Internal Financial Control with reference to Financial Statements

The Company has a robust and well embedded system of internal controls in place to ensure reliability of financial reporting, orderly and efficient conduct of business, compliance with policies, procedures, safeguarding of assets and economical and efficient use of resources. Appropriate review and control mechanisms are put in place to ensure that such control systems are adequate and operate effectively.

Periodical programs of Internal Audits are planned and conducted which are also aligned with business objectives of the Company. The meetings with Internal Auditors are conducted wherein the status of audits and management reviews are informed to the Audit Committee.

The Company has adopted accounting policies which are in line with the Indian Accounting Standards notified under Section 133 of the Act read with the Companies (Indian Accounting Standard) Rules, 2015.

The Company gets its Standalone and Consolidated Financial Statements reviewed every quarter by its Statutory Auditors.

The Company uses an established SAP ERP HANA Systems to record day to day transactions for accounting and financial reporting. The SAP system is configured to ensure that all transactions are integrated seamlessly with the underline books of accounts, which helps in obtaining accurate and complete accounting records and timely preparation of reliable financial disclosures.

b. RISK MANAGEMENT POLICY

The Company has adopted the Risk Management Policy as per Regulation 21 of the Listing Regulations.

The Risk Management Committee is responsible to frame, implement and monitor the risk management plan for the Company. The Committee is responsible for development and implementation of a Risk management Policy for the Company including identification therein elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company and is responsible for reviewing the risk management plan and its effectiveness. The Company has Risk Management Policy which can be accessed on Company's website https://www.lumaxworld.in/lumaxindustries/pdf/ riskmanagement-policy-lil.pdf.

c. AUDITORS Statutory Auditors

M/s B S R & Associates LLP, Chartered Accountants (FRN:116231W/W-100024), Statutory Auditors of the Company, have completed their tenure of 5 years and accordingly ceased to act as Statutory Auditors upon the conclusion of the 41st Annual General Meeting.

M/s S.R. Batliboi & Co. LLP, Chartered Accountants (FRN: 301003E/E300005) were appointed as Statutory Auditors of the Company from the conclusion of the 41st Annual General Meeting of the Company.

Statutory Auditors Report

The Report given by M/s S.R. Batliboi & Co. LLP, Chartered Accountants on the Financial Statements of the Company for the FY 2022-23 forms part of the Annual Report. There are no qualification, reservation, adverse remark, or disclaimer given by the Auditors in their Report.

Cost Auditors

In terms of Section 148 (1) of the Act, the Company is required to maintain cost records for certain products as specified by the Central Government and accordingly such accounts and records are prepared and maintained in the prescribed manner.

The Board, on recommendation of Audit Committee, has re-appointed M/s Jitender, Navneet & Co. (Firm Registration No. 000119) as the Cost Auditors of the Company, for the audit of the cost accounts of the Company for the FY 2023-24.

The remuneration proposed to be paid to the Cost Auditor requires ratification by the shareholders of the Company. In view of this, your approval for payment of remuneration to Cost Auditors is being sought at the ensuing AGM. Accordingly, a resolution, seeking approval by members for the ratification of the remuneration to be paid to Cost Auditors amounting to ` 1.75 Lakhs (Rupees One Lakh Seventy-Five Thousand only) excluding taxes and out of pocket expenses, if any, payable to M/s Jitender, Navneet & Co., is included in the Notice convening 42nd AGM of the Company.

Cost Audit Report

The Cost Audit Report for the FY 2021-22 has been filed with the Central Government within the stipulated time.

Disclosure on Maintenance of Cost Records As Specified By Central Government under Sub Section (1) Of Section 148

The Company is maintaining cost records as stipulated under law.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Mr Maneesh Gupta, Practicing Company Secretary (M. No. F4982) as the Secretarial Auditor of the Company to conduct the Secretarial Audit for FY 2023-24.

The Company has received consent from Mr Maneesh Gupta to act as the auditor for conducting audit of the secretarial records for the financial year ending March 31, 2024.

Annual Secretarial Audit Report & Annual Secretarial Compliance Report

The Secretarial Audit Report for the financial year ended March 31, 2023 under the Act, read with Rules made thereunder and Regulation 24A (1) of the Listing Regulations is set out in the Annexure - E to this Report.

There are no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Pursuant to Regulation 24 A (2) of Listing Regulations, all listed entities on annual basis are required to get a check done by Practising Company Secretary (PCS) on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder and get an Annual Secretarial Compliance Report issued in this regard which is further required to be submitted to Stock Exchanges within 60 days of the end of the financial year. The Company has engaged the services of Mr Maneesh Gupta (FCS No.: 4982), PCS and Secretarial Auditor of the Company for providing this certification.

Accordingly, the Company has complied with the above said provisions and an Annual Secretarial Compliance Report has been submitted to the Stock Exchanges within stipulated time.

Internal Auditors

In compliance with the provisions of Section 138 of the Act, read with the Companies (Accounts) Rules, 2014, the Internal Audit, of various units of Company, for the FY 2022-23 was carried out by M/s Grant Thornton Bharat LLP. Further, the Board in their meeting held on May 27, 2023 has re-appointed M/s Grant Thornton Bharat LLP as Internal Auditors for the FY 2023-24.

d. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

During the year under review, no frauds were reported by Statutory Auditor and Secretarial Auditor against the Company which need to be mentioned in this Report.

5. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY AND INITIATIVES

The Company's Corporate Social Responsibility (CSR) objective is to give back to society and contribute to nation's development through its initiatives.

The Company's CSR initiatives are implemented primarily through its CSR arm/trust, Lumax Charitable Foundation ("Foundation"), with focus on education, empowerment of girl child through education and the healthcare, for disadvantaged Section of society.

During the year, the Company's obligation to spend on CSR activities was ` 112.60 Lakhs i.e. 2% of the average net profits during the three immediately preceding financial years against which the Company has actually spent ` 123.70 Lakhs.

The Company has constituted a CSR Committee of the Board and also developed & implemented a CSR Policy in accordance with the provisions of the Act. The Committee monitors and oversees various CSR initiatives and activities of the Company.

Key CSR Activities

Lumax provides holistic education opportunities and preventive and curative health interventions, committed to the India Sustainable Goals of Quality Education and Good Health. These interventions and programs are managed by the Lumax Charitable Foundation team along with implementation partners.

Education

In its endeavor to provide holistic and quality education, the interventions include, girl child enrolment in schools, starter kits and learnings aids. It is to provide and enable underprivileged students to enhance their learning experience through out of school learning activities like excursion trips, end-to-end career counselling, life-skills & soft-skills training on a continuous basis. The programs help to facilitate various govt. & private scholarships to deserving need-based and merit-based students to pursue with their education.

Infrastructure needs of the govt. schools including the construction of toilets, classroom, providing LED lights are also undertaken after a thorough need assessment. The programs are preferably conducted in areas around the Company's plants.

Health

Under health, the Foundation has been supporting communities near the plants with preventive cancer awareness and screening camps and also provide eye care camps for eye-check up and conducting cataract surgeries.

The cancer screening includes blood profiling along with physical examination by a surgeon, ENT specialist and a gynecologist, complete with radiology examination.

The programs also include Juvenile diabetes for the underprivileged children.

Constitution of CSR Committee

As on March 31, 2023, the CSR Committee of the Company comprised of three (3) Members namely, Mr Deepak Jain (Chairman), Mr Avinash Parkash Gandhi and Mr Anmol Jain.

The details of the CSR Policy of the Company are also available on the website of the Company at https:// www.lumaxworld.in/lumaxindustries/pdf/corporate-socialresponsibility-policy_Lumax-industries-limited.pdf. The contents of the said policy are as below: a. CSR Philosophy b. Constitution of CSR Committee c. Role of CSR Committee d. Implementation of CSR Projects, Programs and Activities e. Allocation of Budget f. Lumax domains of engagement in accordance with Schedule VII g. Monitoring and Review Mechanism h. Management Commitment The Annual Report on CSR as per Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as an Annexure - F to this Report in the prescribed format.

6. OTHER DISCLOSURES

Material Changes and Commitments

The Gurugram plant of the Company was not operating at its full efficiency. Therefore the production facilities and the production operations of the Gurugram plant were transferred to Dharuhera Plant and consequently the manufacturing operations at Gurugram plant were discontinued w.e.f May 31, 2023. There was no adverse impact of this closure on the financials of the Company. There were no other material changes and commitments which have occurred after the end of the financial year ended March 31, 2023 till the date of this Report that affects the financial position of the Company.

Particulars of Loans, Guarantees and Investments

The particulars of Investments and Loans as on March 31, 2023 as covered under the provisions of Section 186 of the Act is given in the Notes to Financial Statements of the Company. The Company has not given any guarantees during the year under review.

Information on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

One of the several commitments that continued to remain in force throughout the financial year was developing business along with improvement in environmental performance to maintain a reliable and sustainable future. During the course of the year, the manufacturing units of the Company have continued their efforts to reduce energy consumption in all areas of their operations with energy efficient technologies and ofitake of electricity from renewable sources wherever feasible. These manufacturing units are constantly encouraged to improve operational activities and maximizing production volumes and minimizing consumption of natural resources. Systems and processes have been put in place for utilization of alternate sources of energy and monitoring of energy consumption for all the units. Disclosure of information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earning and Outgo, etc. as required under Section 134(3) (m) of the Act read with the Companies (Accounts) Rules, 2014, is annexed as an Annexure – G to this Report.

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 Company's website on https://www.lumaxworld.in/ lumaxindustries/annual-return.html.

Details of Deposits

During the year under review, the Company has neither accepted nor renewed any Deposit in terms of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 and hence any provisions of the said Section are not applicable to the Company.

Names of Companies which have become or ceased to be Its Subsidiaries, Joint Ventures or Associate Companies during the Year

During the FY 2022-23, one Company namely Lumax Industries Czech s.r.o. became Subsidiary of the Company.

Significant and Material Orders passed by the Regulators or Courts

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

Constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH)

As per Section 134(3) of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, a "Statement that the Company has complied with the provisions related to Constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH)" has to be included in the Board's Report.

In accordance with the above-mentioned provisions of POSH, the Company is in compliance with and has adopted the "Policy on Prevention of Sexual Harassment of Women at Workplace" and matters connected therewith or incidental thereto covering all the related aspects. The constitution of ICC is as per the provisions of POSH and includes external Members from NGO or those individuals having relevant experience.

The Committee meets as and when required and provides a platform for female employees for registration of concerns and complaints, if any.

During the year under review i.e. FY 2022-23, thirty nine (39) meetings and forty three (43) awareness sessions were held across all manufacturing locations to discuss on strengthening the safety of employees at workplace. In addition, the awareness about the Policy and the provisions of Prevention of Sexual Harassment Act was also carried out in the said meetings. Further, as per the applicable provisions of POSH, the Company continues to submit Annual Report to the District Officer consisting of details as stipulated under the said Act.

Environment, Health, Safety

The Company continues to identify and manage risk to ensure the Safety of the employees. The Company focuses on "Safety" continuously to ensure policies, procedures and systems to meet the requirements of current legislation and best practices. Over the last seven years the Company has been working to strengthen the position in relation to Safety management. This has been a process of gradually tightening up on policies and procedures and ensuring that these remain relevant and up-to date. The Company has improved systems for carrying out risk assessments and making sure that they are regularly reviewed; for tracking of workers; workstation assessments and for many other aspects of a good Safety management system. The Company continues to work closely with its internal Safety Officers and external Agencies to build on that work and promote continuous improvement.

Key aims and objectives achieved in 2022-23 includes: Strong and Active Leadership:

• Corporate safety procedures & Emergency Procedures were reviewed and safety management audit program was delivered.

• Safety competence, awareness & training was in place.

• Safety performance and risk management arrangements established in the organization.

• Team approach has continued to progress key Safety objectives.

• Continuation of strong Safety Management System through the established safety committees to ensure effective communication and consultation arrangements for discussion and promotion of Safety improvements at scale and pace.

• Safety as a standing item on all Corporate,

Directorate and manager meeting agendas to embed best practice and drive cultural change and improvement.

Apart from the above, the Company has also performed below activities in FY 2022-23 sincerely:

1. Employee Engagement Activities (Celebrated NationalSafetyweek,PersonalProtectiveequipment demonstrations, Unplanned – Evacuation Drill, Road Safety Week, World Environment Day, Safety Motivational Reward activities, Work place Safety awareness Training, Safety Quiz Program & World Environment Health Day).

2. KYT - Kiken Yochi Training (Identifying hazard and taking corrective measures with the help of actual users).

3. Hazards specific Safety training (Fire Fighting, Near Miss, First Aid, Electrical Safety, Chemical & Machine Safety).

4. Monthly Internal safety Committee Meeting.

5. Regional Safety Meeting at all regions.

6. Safety Gemba Audit and Monitoring.

7. Fire Risk Assessment Audit.

8. Comprehensive review/surveillance audit done as per ISO 14001:2015 (Environment Management System) and ISO 45001:2018 (Occupational Health & Safety Management system).

9. Near miss incident capturing and Investigation.

10. Thermography study for health check-up of electrical Panel.

11. Third Party Audit / Safety assessment done.

12. Surface treatment – ST booth and Duct Cleaning activities for all locations.

For Tier-2 Suppliers:

From the last Six years, the Company also commenced the Fire Risk Assessment Audit for Tier-2 suppliers (63 Nos) to reduce the fire related incident and achieved significant OK result.

Also, the Company has initiated for safety and started the Safety Audit from 2019-20 for (5 Nos) suppliers to reduce the human injury (Only for those who are having the heavy power press machinery- Critical Operation). Apart from the above activities, the Company is strictly monitoring the injury status and sharing the same every month to its Vendors. The Company also delivered Training awareness programs related to Fire, Electrical, Machine Safety and Fire Mock drill.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124(5), 125 and other applicable provisions of the Act, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), all unpaid or unclaimed Dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven (7) years from the date of transfer to Unclaimed/Unpaid Dividend Account of the Company.

Further, pursuant to provisions of Section 124(6) of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the shares in respect of which Dividend has not been claimed or unpaid for seven (7) consecutive years or more shall also be transferred to the Demat account of IEPF Authority. The said provisions does not apply to shares in respect of which there is a specific Order of Court, Tribunal or Statutory Authority, restraining any transfer of the shares.

Accordingly, the details relating to amount of Dividend transferred to the IEPF and corresponding shares on which Dividends were unclaimed for seven (7) consecutive years, are provided in the Report on Corporate Governance annexed to this Report.

It may be noted that the due date for transfer of the Unpaid/Unclaimed Dividend lying in the Unpaid Dividend Account of the Company for the FY 2014-15, which was declared on August 19, 2015, was transferred to IEPF on October 18, 2022 and also the Interim dividend for FY 2015-16, which was declared on March 12, 2016, was transferred to IEPF on April 28, 2023 and accordingly the shares lying unclaimed for the respective Financial Years were also transferred to IEPF within stipulated timelines.

CODE OF CONDUCT TO REGULATE, MONITOR AND REPORT TRADING BY DESIGNATED PERSONS (CODE OF CONDUCT)

The Company has adopted a Code of Conduct to regulate, monitor and report trading by Designated Persons [Pursuant to Regulation 9 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015]. This Code of Conduct is intended to prevent misuse of Unpublished Price Sensitive Information ("UPSI") by Designated Persons and their immediate relatives.

The said Code lays down guidelines, which advise Designated Persons and 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. This Code includes a Policy and Procedure for Inquiry in case of leakage of UPSI or suspected leakage of UPSI and is available for reference on the website of the Company i.e. https://www.lumaxworld.in/lumaxindustries/pdf/codeof-conduct_SEBI-egulations-2015.pdf.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

A detailed Business Responsibility and Sustainability Report in terms of the provisions of Regulation 34 of the Listing Regulations forms part of the Annual Report.

DISCLOSURE FOR COMPLIANCE OF SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standard-1 (Meetings of Board of Directors) and Secretarial Standard-2 (General Meetings) issued by the Institute of Company Secretaries of India.

GENERAL

During the year, there were no transaction requiring disclosure or reporting in respect of matters relating to:

(a) issue of equity shares with differential rights as to dividend, voting or otherwise;

(b) issue of shares (including sweat equity shares) to employees of the Company under any scheme;

(c) raising of funds through preferential allotment or qualified institutions placement;

(d) pendency of any proceeding under the Insolvency and Bankruptcy Code, 2016 and

(e) instance of one-time settlement with any bank or financial institution. Your Company did not have any subsidiary or joint venture or associate Company.

CONTRIBUTION TO EXCHEQUER

The Company is a regular payer of taxes and other duties to the Government. During the year under review, the Company paid all its statutory dues & presently no undisputed dues are outstanding for more than six months. The Company generally ensures payment of all dues to exchequer well within time line as applicable.

7. ACKNOWLEDGEMENT

The Board of Directors place on record their sincere gratitude and appreciation towards all its Stakeholders viz. shareholders, employees, investors, bankers, customers, suppliers, government agencies, stock exchanges and depositories, auditors, legal advisors, consultants, business associates, service providers, academic partners for their continued commitment and support. The Board conveys their deep sense of appreciation towards contributions made by every member of Lumax Family during the year and express a sincere thanks and gratefulness to its Technical & Financial Collaborator- Stanley Electric Co., Limited for their continued support and patronage throughout the year.

Deepak Jain

Chairman & Managing Director

DIN: 00004972

Place: Gurugram

Dated: July 28, 2023