Lokesh Machines Limited has disclosed receiving fine notices from both BSE and NSE for non-compliance with board composition regulations under SEBI LODR Regulations. The regulatory breach occurred during the quarter ended December 31, 2025, following the resignation of an independent director, leading to violations of Regulation 17(1) requirements.

Fine Details and Financial Impact

The stock exchanges have imposed penalties on the company for the regulatory non-compliance:

Board Meeting and Formal Response

The company's board of directors convened on March 06, 2026, to deliberate on the penalties imposed by both exchanges. The board formally acknowledged the temporary non-compliance with Regulation 17(1) of SEBI Listing Regulations and reviewed the circumstances leading to the regulatory breach.

Regulatory Constraints Under Arms Act

The board emphasized that as a manufacturer of small arms, Lokesh Machines Limited operates under stringent provisions of the Arms Act, 1959, and Arms Rules, 2016. The company faces mandatory regulatory requirements that contributed to the compliance delay:

• Prior approval from the Ministry of Home Affairs (MHA) is mandatory for any directorship changes
• Applications for new directors must be submitted 90 days in advance
• Security clearance proforma and self-declarations are required for all proposed directors
• Physical submission of applications to the Arms Section is mandatory

Waiver Application and Legal Justification

The board has formally advised management to submit waiver applications to both stock exchanges, emphasizing that the temporary non-compliance arose solely due to mandatory MHA approval requirements beyond the company's control. The applications have been filed in accordance with the Policy for Exemption of Fines levied under the SEBI SOP Circular.

Compliance Commitment and Transparency

The board has reiterated its commitment to maintaining high standards of corporate governance and compliance with all applicable regulatory requirements. The company has made comprehensive disclosures in compliance with Regulation 30 of SEBI LODR Regulations, with all relevant information available on the company's website at www.lokeshmachines.com .

Lokesh Machines has announced a major breakthrough in its defence business segment with the successful acquisition of a ₹22.00 crore contract for supplying critical defence components. The contract, awarded by the Ministry of Defence through Advanced Weapons and Equipment India Limited, specifically involves the supply of 9X19mm machine pistol consisting sub-assemblies and components, marking a significant expansion in the company's defence manufacturing portfolio.

Contract Details and Execution Timeline

The defence contract secured by Lokesh Machines focuses on the production and supply of precision components for 9X19mm machine pistols. The company disclosed this development under Regulation 30 of SEBI (LODR) Regulations through formal filings to BSE Limited and National Stock Exchange of India Limited. The event occurred on January 04, 2026, at 11:15 AM (IST), with the contract carrying a strict execution deadline requiring completion on or before March 19, 2026.

Regulatory Compliance and Documentation

Lokesh Machines has fulfilled all regulatory requirements by submitting comprehensive disclosures to both BSE Limited and National Stock Exchange of India Limited. The company's filing, signed by P. Kodanda Rami Reddy, Company Secretary & Compliance Officer, includes detailed annexures as per SEBI Circular No. SEBI/HO/CFD/CFD-PoD-1/P/CIR/2023/123 dated July 13, 2023. The documentation confirms that the contract does not involve any related party transactions and has been awarded at arm's length, with no interest from promoters or group companies in the awarding entity.

Strategic Significance for Defence Production

This contract award positions Lokesh Machines as a key supplier in India's defence manufacturing ecosystem. The company's ability to secure this substantial order reflects its manufacturing expertise and quality standards that meet defence industry specifications. The domestic nature of the contract aligns with India's focus on indigenous defence manufacturing and the government's push for self-reliance in defence production.

Impact on Business Operations

The ₹22.00 crore defence contract is anticipated to boost Lokesh Machines' defence production growth substantially. With a tight execution timeline of approximately two and a half months, the company will need to mobilize its manufacturing capabilities efficiently to meet the March 2026 deadline. This development validates the company's technical competencies and manufacturing capabilities in producing precision defence components, potentially opening doors for future defence manufacturing opportunities.