Patels Airtemp (India) Ltd

To,

The Members,

Ahmedabad.

Your Directors have pleasure in presenting herewith the 32^nd Annual Report 2023-24 together with the Audited Standalone & Consolidated Financial Statements of Patels Airtemp (India) Limited (herein after referred to as "the Company") for the year ended 31^st March, 2024.

( in lakhs except EPS)

The Company has earned total revenue from operations of 37076.17 Lakhs during the year ended on 31^st March, 2024 as against 28147.85 Lakhs earned during the previous year ended on 31^st March, 2023, an increase of 31.72 %. The Company has also earned other income of 198.94 Lakhs during the year under review as against 132.56 Lakhs earned during the previous year.

Out of revenue from operations of 37076.17 Lakhs earned by the Company during the year under review,

36597.61 Lakhs represents sale of products (Domestic & Export), 72.01 Lakhs represents sale of Services (Processing Charges) and 406.55 Lakhs represents other operating revenue including export incentives. The Company has incurred total expenses of 35261.00 Lakhs during the year ended on 31^st March, 2024 as compared to 26744.61 Lakhs incurred during the previous year ended on 31^st March, 2023.

The Company has paid total fees of 4,38,000 including statutory audit fees, certification fees and fees for other services to M/s. Parikh & Majmudar (Firm Registration No. 107525W & Membership No. 107628), Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company.

The company has written off Investment in Wholly Owned Subsidiary amounting to 7.17 Lakhs and Loan to Wholly Owned Subsidiary amounting to 5.32 Lakhs in the books of accounts due to dissolution of M/s. Patels Airtemp (USA) Inc., a Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company w.e.f. 11^th December, 2023.

The Company has earned the Profit before Tax of 2014.11 Lakhs during the year ended on 31^st March, 2024 as compared to 1535.80 Lakhs earned during the previous year ended on 31^st March, 2023, an increase of 31.14 %.

The Company has earned Net Profit of 1469.45 Lakhs for the year ended on 31^st March, 2024 after making Provision for Tax Expenses of 544.66 Lakhs and other adjustments, as compared to Net Profit of 1118.81 Lakhs earned by the Company during the previous year ended on 31^st March, 2023, an increase of 31.34 %. After adding the Surplus in the Statement of Profit & Loss of 10735.91 Lakhs brought forward from the previous year to the profit of 1469.45 Lakhs earned by the Company during the year under review, the total amount of 12205.36 Lakhs is available for appropriation.

After appropriating the Dividend amount of 164.11 lacs, as recommended, out of 12205.36 Lakhs available for appropriation, the balance amount of 12041.24 Lakhs carried forward to Balance Sheet. The Audited Standalone Financial Statements of the Company and all other documents required to be attached thereto have been included in the Annual Report 2023-24, which has been put on the Company's website https://patelsairtemp.com/investors/annual-reports/

The Directors have recommended dividend of 3.00 per share (@ 30 %) on increased share capital of 54,70,240 Equity Shares of 10/- each of the Company out of the profits of the Company for the Financial Year ended 31^st March, 2024 (2023-24), as compared to Dividend of 3.00 per share (@ 30 %) declared on 54,70,240 Equity Shares of 10/- each for the previous Financial Year ended 31^st March, 2023. This will absorb 164.11 lakhs.

A resolution to that Effect has been placed for the approval of the members at this Annual General Meeting of the Company and that the same, when declared, shall be paid to the Members within 30 days from the date of declaration.

Pursuant to Finance Act, 2020, dividend income will be taxable in the hands of the shareholders w.e.f. 1^st April 2020 and the Company is required to deduct tax at source ("TDS") from dividend paid to the Members at prescribed rates, subject to the provisions of Income Tax Act, 1961. In this regard, the details of provisions regarding TDS on dividend amount have already been mailed to the shareholders earlier and have also been included in the Notes to the Notice of AGM included in this Annual Report.

In view of above, the Company has not transferred any amount to the General Reserve for the year ended on 31^st March, 2024 and retain the entire amount of profits in the Profit & Loss Account.

Patels Airtemp (USA) Inc., a Corporation, was formed in the State of Delaware, USA. The Company acquired 10,00,000 Shares with a par value of USD 0.01 per Share of Patels Airtemp (USA) Inc. (Equity Investment), to become 100 % Wholly Owned Subsidiary (WOS) of Patels Airtemp (India) Ltd. with Effect from 13^th January, 2020.

However, the aforesaid Patels Airtemp (USA) Inc., Wholly Owned Subsidiary (WOS) of the Company was dissolved w.e.f. 11^th December, 2023, as per Certificate of Dissolution issued by State of Delaware (USA), as the said WOS did not commence any business activities since its incorporation and incurred loss and there was no plan to commence any business activities in future. The said WOS was dissolved by dis-investment of Equity Capital and write off USD 15,941 and net balance of USD 9,059 remitted to India from USA, pursuant to the provisions of Foreign Exchange Management Overseas Investment Rules, Regulations and Directions issued by the Central Government along with Reserve Bank of India (RBI) and also the laws applicable in the State of Delaware, USA.

Consequent upon the said dissolution, Patels Airtemp [USA) Inc., ceased to be the subsidiary of the Company w.e.f. 11^th December, 2023. Patels Airtemp (USA) Inc., was not a Material Subsidiary of the Company.

Pursuant to the requirements of Section 129(3) read with Schedule III of the Companies Act, 2013 and Rules made thereunder and as stipulated by Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (herein after referred to as "SEBI Listing Regulations") and applicable Indian Accounting Standards, the Consolidated Financial Statements of the Company and its Wholly Owned Subsidiary (WOS/Foreign Entity) namely Patels Airtemp (USA) Inc. for the year ended 31^st March, 2024 have been attached with the Financial Statements of the Company. The Audited Consolidated Financial Statements together with Auditors' Report form part of the Annual Report 2023-24. The Consolidated Financial Statements comprise of Audited Financial Statements of the Company and Patels Airtemp (USA) Inc.

During the year under review, M/s. Patels Airtemp (USA) Inc., a Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company, stands dissolved w.e.f. 11^th December, 2023 as per Certificate of Dissolution issued by State of Delaware (USA). In this regard, the Consolidated Financial Statements for the year ended on 31^st March, 2024 comprises of Audited Financial Statements of the Company for the year ended 31^st March, 2024 and Audited Financial Statements of Patels Airtemp (USA) Inc. up to 30^th November, 2023.

During the year under review, there were no significant transactions and arrangements entered into by the said Wholly Owned Subsidiary of the Company. Audit Committee and Board of Directors of the Company reviewed quarterly unaudited financial results / statements of the said Wholly Owned Subsidiary. The Company monitored performance of its Wholly Owned Subsidiary, inter alia, by the Minutes of Board Meetings and General Meeting of the said Wholly Owned Subsidiary placed before the Board of Directors of the Company.

As on March 31, 2024, the Company did not have any material unlisted subsidiary as defined in Regulation 16(1)(c) of SEBI Listing Regulations. Accordingly, the requirement of appointment of Independent Director of the Company on the Board of Directors of the material unlisted subsidiary companies as per Regulation 24 of SEBI Listing Regulations does not apply.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is put up on the Company's website and can be accessed at https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/policy-on-material-subsidiaries.pdf.

In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI Listing Regulations, the Audited Consolidated Financial Statements of the Company and all other documents required to be attached thereto have been included in the Annual Report 2023-24, which has been put on the Company's website https://www.patelsairtemp.com/investors/annual-reports/ The Audited Financial Statements of the Wholly Owned Subsidiary (WOS/Foreign Entity) for the period up to 30^th November, 2023, as required, are also put up on the Company's website and can be accessed at https://www.patelsairtemp.com/investors/subsidiary-company-accounts/ These documents will also be available for inspection on all working days, except Saturdays, during business hours, at the Company's Factory (Works) at Rakanpur, Dist. Gandhinagar.

A statement containing the salient features of the financial statements of the Company's Wholly-Owned Subsidiary (WOS/Foreign Entity) for the year ended 31^st March, 2024 in the prescribed Form AOC-1 as per _rst proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rule 5 of the Companies (Accounts) Rules, 2014 is attached herewith as per Annexure - A and forms an integral part of this Report. The Company has already _led an Annual Performance Report (APR) in Form ODI Part II with the Reserve Bank of India for the period up to 30^th November, 2023 for its Overseas Direct Investment (ODI) in its Wholly Owned Subsidiary (WOS) Patels Airtemp (USA) Inc.

The Company has also _led an Annual Return on Foreign Liabilities and Assets (FLA) for the year 2023-24 (as on 31^st March, 2024) with Reserve Bank of India.

In respect of new Greenfield project set up by the Company in the year 2019-20 at Dudhai, Taluka. Kadi, Dist. Mehsana, Gujarat (Dudhai Unit), the Company has constructed total four bays/shades with total covered area of 11,016 Sq. Mtrs., with total capital outlay of around 24.00 crores. In this regard, during the financial year 2023-24, the Company has further incurred additional capital expenditure to the extent of 86.26 Lacs for the said project mainly in Plant & Machinery and Factory Road.

As you aware that the Company is in engineering industry and is engaged in manufacturing/fabricating tailor made machines and therefore, the order book position of such type of company can play pivotal role in the growth of the Company. Your Directors are pleased to state that continuing the past trend, the Company is having confirmed orders of about 312 Crores on hand as on 1^st August, 2024. Thus, your Directors are quite bullish on repeating similar performance in future. Your Directors are cautious and making untiring e_orts so as not to compromise on growth, quality, and profitability of the Company.

During the year, Shri Narayanbhai G. Patel, the Founder and one of the Promoter and Chairman & Whole-time Director of the Company, died on 3^rd October, 2023 due to illness. Unexpected demise of Shri Narayanbhai G. Patel will be irreparable loss to the Company and all Directors and Employees of the Company convey deep sympathy, sorrow and condolences to his family members. In absence of Shri Narayanbhai G. Patel, highly experienced Board of Directors and Senior Management of the Company are committed to take legacy of Shri Narayanbhai G. Patel and release his vision for the Company.

Patels Airtemp (USA) Inc., Wholly Owned Subsidiary (WOS) of the Company was dissolved w.e.f. 11^th December, 2023 as per Certificate of Dissolution issued by State of Delaware (USA). The said WOS was dissolved by disinvestment of Equity Capital and write off USD 15,941 and net balance of USD 9,059 remitted to India from USA, pursuant to the provisions of Foreign Exchange Management Overseas Investment Rules, Regulations and Directions issued by the Central Government along with Reserve Bank of India (RBI) and also the laws applicable in the State of Delaware, USA.

Consequent upon the said dissolution, Patels Airtemp [USA) Inc., ceased to be the subsidiary of the Company w.e.f. 11^th December, 2023. Patels Airtemp (USA) Inc., was not a Material Subsidiary of the Company.

In terms of Section 134(3)(l) of the Companies Act, 2013, except as mentioned above, no material changes or commitments a_ecting the financial position of the Company have occurred between the end of the financial year and the date of this Report.

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

Regarding Interlocutory Application (IA) No. IA/69(AHM)2022 in No. IA/68(AHM)2022 read with Company Petition (CP) No. 58/(AHM)2018 _led by one Mr. Bhavesh D. Narumalani (Applicant) vs. Therm Flow Engineers Private Limited (Respondent) with National Company Law Tribunal (NCTL), Ahmedabad Bench, with regards to approval of the Shareholders received at the Extraordinary General Meeting ("EGM") of the members of the company held on 8^th October, 2022 for the Preferential Issue of 4,00,000 Equity Shares of face value of 10/- each of the Company for cash at a premium of 222/- per share aggregating to 9,28,00,000/- issued and allotted to the Promoters and Promoter Group on 16^th November, 2022, the Company has so far not received any directives from the Hon'ble NCLT in the said matter as on the date of this Report.

Meanwhile, the Company has already received listing and trading approval from BSE Ltd. vide its letter No. LOD/PREF/TP/CP/13646/2022-23, dated 1^st December, 2022 for trading of 4,00,000 Equity Shares of 10/- each Effective from 2^nd December, 2022.

During the financial year 2023-24, the Company has applied for settlement under the settlement scheme pursuant to the provisions of SEBI (Settlement Proceedings) Regulations, 2018 as amended in the matter of Show Cause Notice No. SEBI/HO/EAD-8/SKV/VC/36027/2023 Dated September 01, 2023 (SCN) issued by SEBI against the Company in the matter of Extra-ordinary General Meeting (EGM) of the Company held on 8^th October, 2022 and disclosures made in Explanatory Statement for Shares issued and allotted to the Promoters and Promoter Group under Preferential Issue made by the Company. Pursuant to the said Settlement Application, the Company is awaiting for approval / order from SEBI regarding the settlement terms, subject to other legal course of action available to the Company.

Except above, the Company has not received any significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future.

Annual Return of the Company as on 31^st March, 2024 as required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 in the prescribed Form MGT-7 is put up on the Company's website and can be accessed at https://patelsairtemp.com/investors/annual-return/

In terms of provisions of Regulation 34 of SEBI Listing Regulations, the Management Discussion and Analysis Report has been enclosed herewith as per Annexure – B and forming part of the Directors' Report.

Along with development of product design and product manufacturing application, the Company in its tenure of 51+ years continuously upgraded quality and product system by acquiring world's most recognized system like ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ASME (U2, U, S-Stamps). The Company is having Quality Management System as per ISO 9001-2015 certification from TUV-SUD and Certificate for Environment Management System as per ISO 14001:2015 and Occupational Health and Safety (OH&S) Management System as per ISO 45001:2018 from TUV-NORD.

The Company's products have ASME (American Society of Mechanical Engineers-USA) "U", "U2" and "S" Stamp authorization. The Company is also having "NB" and "R" Stamp. The Company is also a member of HTRI (Heat Transfer Research, Inc, U.S.A.) for updating Heat Transfer Technology.

Due to "U"/ "U2"/ "S" Stamp authorization, it is expected to improve the Quality of the products/equipment of the Company and to achieve higher growth and profitability of the Company in future.

The Company has also licensed software of ANSYS, CREO, PVelite, Nozzle Pro and TEKLA for product development.

The Company is availing working capital facilities of 180.92 Crores from Bank of Baroda and 68.25 Crores from Axis Bank Ltd. aggregating to 249.17 Crores under consortium arrangement.

During the year 2023-24, the Company has also availed additional SBLC limit of 5.00 Crores, being sub-limit of Bank Guarantee, within overall working capital facilities of 68.25 Crores sanctioned by Axis Bank Ltd. The Company is also availing L.C. Bill Discounting facility amounting to 10.00 Crores from Axis Bank Ltd. The Company is also availing Bill Discounting facility from Citibank NA.

The Company is also availing overdraft facility against fixed deposit with various branches of Bank of Baroda.

During the year under review, the Company has not accepted any deposits from the Public and Members of the Company and therefore not required to comply with the requirement under the Companies Act, 2013 and the Rules made thereunder. As such, no amount of principal or interest was outstanding to the Public and Members of the Company as on March 31, 2024 and the Company is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.

During the year under review, the Company has accepted deposits from the Directors of the Company which are exempted deposits under Rule 2(1)(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014, subject to compliance of the provisions of the Companies Act, 2013 and the Rules made thereunder. During the year under review, the Relatives of the Directors also brought in unsecured loan/deposits by way of contribution to bring additional long term funds as a part of conditions imposed by Bank of Baroda on the Promoters and their relatives, while reviewing working capital facilities to the Company vide its Letter No. AR/SMEBR/2021-22/July, 94 dated 7^th August, 2021, which are exempted deposits under Rule 2(1)(c) (xiii) of Companies (Acceptance of Deposits) Rules, 2014.

Details of exempted deposits accepted and repaid by the Company including interest to the Directors & their Relatives during the financial year 2023-24 are mentioned in Note No. 17 and 33 (Relate Party information) of the Notes to the Standalone Financial Statements attached with this Annual Report.

The Company has duly _led the required Form DPT-3 during the year under review regarding exempted deposits under MCA portal.

In terms of the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF), as amended, during the year under review, the Company has transferred the amount of unclaimed/unpaid Dividend of 2,25,299.80/- for the financial year 2015-16 to IEPF established by the Central Government under Section 124 & 125 of the Companies Act, 2013 and Rules made thereunder. Pursuant to provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid / unclaimed amounts lying with the Company as on 23^rd September, 2023 (date of the previous Annual General Meeting) on the Company's website: https://www.patelsairtemp.com/investors/ unclaimed-dividend/

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has, during financial year 2023-24, transferred to the IEPF Authority 3,667 Equity Shares of the face value of 10/- each belonging to 41 Shareholders in respect of which dividend had remained unpaid or unclaimed for seven consecutive years or more from 2015-16 to 2021-22. Details of shares transferred to the IEPF Authority are available on the website of the Company https://www.patelsairtemp.com/investors/ iepf-shares-transfer/ The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement. The voting rights on the shares transferred to IEPF Authority shall remain frozen till the rightful owner claims the shares.

Members may note that the dividend and shares transferred to the IEPF can be claimed back by the concerned shareholders from the IEPF Authority after complying with the procedure prescribed under the Rules.

The Company has duly appointed Company Secretary of the Company as Nodal Officer for the purposes of verification of claims and coordination with Investor Education and Protection Fund Authority.

The Company has duly _led all the required IEPF Forms with the authorities.

Being a Listed Company, the Company has taken necessary measures to comply with the provisions of SEBI Listing Regulations regarding Corporate Governance as amended from time to time. A separate report on Corporate Governance for the year ended 31^st March, 2024 is attached herewith as a part of this Annual Report viz Annexure - C. A Certificate from Practicing Company Secretary of the Company regarding compliance of the aforesaid provisions of Corporate Governance is obtained by the Company and annexed to the Corporate Governance Report. The Certificate on Corporate Governance issued by Practicing Company Secretary for the financial year 2023-24 does not contain any qualification, reservation or adverse remark in respect of Corporate Governance Report.

The Company has furnished to BSE Ltd., where the Shares of the Company are listed, Corporate Governance Compliance Report for the Quarter/Half-year/Whole year during the financial year 2023-24 in the format as specified by SEBI from time to time as placed before the Board as per various provisions of SEBI Listing Regulations. The said Corporate Governance Compliance Report have also been uploaded on the website of the of the Company https://www.patelsairtemp.com/investors/corporate-governance-report/.

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm that: (a) in the preparation of the annual accounts for the year ended 31^st March, 2024, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of Affairs of the Company as at 31^st March, 2024 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care 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) the Directors have prepared the annual accounts for the year ended on 31^st March, 2024 on a going concern basis; (e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating Effectively; and (f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating Effectively.

During the year under review, the Company has not provided any loan or guarantee or security to any person nor made any investment.

Particulars of earlier loan given and investment made by the Company in its Wholly Owned Subsidiary (WOS), namely, Patels Airtemp (USA) Inc. are provided in the Standalone Financial Statements of the Company (Please refer Note No. 4, 5 and 40 to the Standalone Financial Statements).

However, during the year ended on 31^st March, 2024, the company has written off Investment in Wholly Owned Subsidiary amounting to 7.17 Lakhs and Loan to Wholly Owned Subsidiary amounting to

5.32 Lakhs in the books of accounts due to dissolution of M/s. Patels Airtemp (USA) Inc., a Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company w.e.f. 11^th December, 2023 as per Certificate of Dissolution issued by State of Delaware (USA).

Information on transactions with related parties referred to under sub-section (1) of Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is attached herewith viz Annexure - D and forming part of the Directors' Report pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

Pursuant to the provisions of SEBI Listing Regulations, details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in Note No. 33 of the Notes to the Standalone Financial Statements for the year ended 31^st March, 2024, forming part of this Report.

However, there are no materially significant related party transactions made/entered into by the Company with its related parties including promoters, directors or the management etc. that may have potential conflict with the interests of the Company at large.

"Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions" related to entering into Related Party Transactions by the Company with Related Parties is uploaded on the Company's website viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/policy-on-materiality-of-related-party-transaction-and-dealing-with-related-party-transactions.pdf.

SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 pertaining to Related Party, Related Party Transactions, Prior Approvals and Disclosures Effective from April 01, 2022 and other earlier amendments, except for a few provisions which will be Effective from April 01, 2023, have introduced substantial changes in the RPT framework. In view of the said amendments, policy on materiality of related party transactions and dealing with related party transactions of the Company (Policy on RPTs) was modified / revised / updated in line of the above amendments which is Effective from 12^th November, 2022.

All Related Party Transactions are placed before the Audit Committee for its prior approval (by Independent Directors only from 1^st January, 2022 as per amendment in SEBI Listing Regulations) as also to the Board for approval including Omnibus approval for the transactions for one financial year, which are repetitive in nature and also for the transactions, which are not foreseen (subject to financial limit). However, the Company has not entered into any contract/ arrangement / transaction with related parties which could be considered material in accordance with the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder and SEBI Listing Regulations and as such no approval of the Shareholders require. As per Regulation 23 and 18(3) read with Part C of Schedule II of SEBI Listing Regulations as amended from time to time, the Audit Committee of the Board has reviewed and ratified Related Party Transactions (RPTs) entered into by the company with related parties during the financial year ended 31^st March, 2024 (2023-24) pursuant to each of the omnibus approvals given.

The Company has duly _led with BSE Ltd. half-yearly statement of Related Party Transactions ended on 31^st March, 2023 and 30^th September, 2023 in accordance with applicable Indian Accounting Standards on a consolidated basis in the format as specified by SEBI from time to time pursuant to Regulation 23(9) of SEBI Listing Regulations and uploaded the said details on website of the Company viz. https://www. patelsairtemp.com/investors/disclosures-of-related-party-transactions/

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors' and ‘General Meetings' respectively, issued by the Institute of Company Secretaries of India (ICSI) have been duly followed by the Company.

With profound sorrowfully, the Board of Directors of the Company express their deep condolences at the sad demise of Shri Narayanbhai G. Patel (DIN: 00023107), the Founder, one of the Promoter and the Chairman & Whole-time Director of the Company on 3^rd October, 2023 due to ill-health. Unexpected demise of Shri Narayanbhai G. Patel will be irreparable loss to the Company and all Directors and Employees of the Company convey deep sympathy, sorrow and condolences to his family members. Due to sad demise, Shri Narayanbhai G. Patel ceased to be a Chairman & Whole-time Director and Member of the Audit Committee (AC), Nomination & Remuneration Committee (NRC), Stakeholders' Relationship Committee (SRC) and Corporate Social Responsibility Committee (CSR) committee of Board of Directors of the Company. In absence of Shri Narayanbhai G. Patel, highly experienced Board of Directors and senior management of the Company are committed to take legacy of Mr. Narayanbhai G. Patel and release his vision for the Company. However, before his demise, Shri Narayanbhai G. Patel (DIN: 00023107) was duly re-appointed as Whole-time Director of the Company designated as "Chairman & Whole-time Director" for a further period of 3 years with Effect from 20^th May, 2023 up to 19^th May, 2026, with payment of remuneration by way of Salary of 4,00,000/- per month plus perquisites and allowances, as recommended and approved by Nomination & Remuneration Committee and Board of Directors and duly approved by the Shareholders by passing Special Resolution at the 31^st Annual General Meeting (AGM) held on 23^rd September, 2023.

Mr. Sanjivkumar N. Patel (DIN:02794095) has been duly re-appointed as Managing Director of the Company for a further period of 3 years with Effect from 20^th May, 2023 up to 19^th May, 2026, with payment of remuneration by way of Salary of 4,00,000/- per month plus perquisites and allowances, as recommended and approved by Nomination & Remuneration Committee and Board of Directors and duly approved by the Shareholders by passing Special Resolution at the 31^st Annual General Meeting (AGM) held on 23^rd September, 2023. Meanwhile, Mr. Sanjivkumar N. Patel, Managing Director (DIN: 02794095), has been appointed as the Chairman of the Board of Directors of the Company designated as "Chairman & Managing Director" with Effect from 9^th November, 2023 and to remain the Chairman of the Board until otherwise decided by the Board of Directors in place of Shri Narayanbhai G. Patel (DIN: 00023107) who ceased to be the Chairman & Whole-time Director of the Company w.e.f. 3^rd October, 2023 due to his sad demise. Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder and Articles of Association, Mr. Apurva V. Shah (DIN: 0008197983), Whole-time Director of the Company, shall retire by rotation as Director of the Company at this Annual General Meeting, and being eligible, offers himself for re-appointment, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends re-appointment of Mr. Apurva V. Shah (DIN: 0008197983) as Director of the Company. Meanwhile, Mr. Apurva V. Shah has been re-appointed as a Whole-time Director of the Company for a further period of 3 (Three) years with Effect from 11^th August, 2024 up to 10^th August, 2027, upon the terms and conditions including remuneration by way of Salary of 3,60,000/- per month plus Perquisites and Allowances for the said period of 3 years from 11^th August, 2024 up to 10^th August, 2027 as recommended and approved by Nomination & Remuneration Committee and Board of Directors and duly approved by the Shareholders by passing an Ordinary Resolution through Postal Ballot of the Company. The brief resume/details relating to Mr. Apurva V. Shah, who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

The second term of Mr. Hareshkumar I. Shah (DIN: 00216585) as Independent Director of the Company, shall be completed on 29^th August, 2024 and accordingly he will cease to be an Independent Director of the Company. Consequently. Mr. Hareshkumar I. Shah will also cease to be a Chairman of Audit Committee (AC), Nomination & Remuneration Committee (NRC), Stakeholders Relationship Committee (SRC) and Corporate Social Responsibility (CSR) Committee of the Board w.e.f. 30^th August, 2024. The Board places on record their appreciation for the assistance and guidance provided by Mr. Hareshkumar I. Shah during his tenure as an Independent Director of the Company and also as a Chairman of AC, NRC, SRC & CSR Committees of the Board.

Mr. Rajendrakumar C. Patel (DIN: 06532676) has been duly re-appointed as Independent Director (Non-executive & Independent) of the Company not liable to retire by rotation, for a second term of five years from 10^th August, 2024 up to 9^th August, 2029 as recommended and approved by Nomination & Remuneration Committee and Board of Directors and duly approved by the Shareholders by passing Special Resolution through Postal Ballot.

The Board of Directors has the following Committees:

1. Audit Committee (AC)

2. Nomination and Remuneration Committee (NRC)

3. Stakeholders' Relationship Committee (SRC)

4. Corporate Social Responsibility Committee (CSR)

The Board of Directors reconstituted AC, NRC, SRC and CSR Committees of the Board w.e.f. 12^th August, 2023 by appointing Mr. Naimish B. Patel (DIN: 02813295), an Independent Director, as a Member of AC, NRC, SRC and CSR Committee, in place of Mr. Himanshu N. Rawal (DIN: 06631728), who ceased to be a Director of the Company and consequently as a Member of AC, NRC, SRC and CSR Committee of the Board w.e.f. 23^rd September, 2023 due to completion of 2^nd term as Independent Director of the Company.

The Board of Directors also reconstituted CSR Committee w.e.f. 9^th November, 2023 by appointing Mrs. Veenaben B. Patel (DIN: 07131341), Independent Director, as a Member of CSR Committee in place of Shri Narayanbhai G. Patel, who ceased to be the Chairman & Whole-time Director and Member of CSR Committee due to sad demise on 3^rd October, 2023.

The Board of Directors reconstituted AC, NRC, SRC and CSR Committees of the Board w.e.f. 3^rd August, 2024 by appointing Mr. Rajendrakumar C. Patel (DIN: 06532676), an Independent Director, as a Member of AC, NRC, SRC and CSR Committee, in place of Mr. Hareshkumar I. Shah (DIN: 00216585), who will cease to be an Independent Director of the Company and consequently as a Chairman of AC, NRC, SRC and CSR Committee of the Board w.e.f. 30^th August, 2024 due to completion of 2^nd term as Independent Director of the Company.

The Board of Directors also appointed Mr. Naimish B. Patel (DIN: 02813295), an Independent Director, as a Chairman of AC, NRC, SRC and CSR Committee w.e.f. 30^th August, 2024 in place of Mr. Hareshkumar I. Shah (DIN: 00216585), who will cease to be an Independent Director of the Company w.e.f. 30^th August, 2024 and consequently as a Chairman of AC, NRC, SRC and CSR Committee of the Board.

The details of various Committees of Directors constituted by the Board of Directors as above under various provisions of Companies Act, 2013 and Rules made thereunder and SEBI Listing Regulations, Meetings & Attendance, terms of reference and other details are provided in the Corporate Governance Report annexed with the Directors' Report.

The composition of various Committees and their terms of references may be accessed on the Company's website viz. https://www.patelsairtemp.com/investors/composition-of-committees-of-board-of-directors/.

The Board has carried out an evaluation of its own performance and that of its Committees and Directors and also Chairperson in terms of Section 134(3)(p) of the Companies Act, 2013 and Rules made thereunder and SEBI Listing Regulations. The Board has approved a policy (NRC Policy) for criteria of determining qualifications, selection, appointment and remuneration of Directors, KMP and Senior Management and the same has been uploaded on the Company's web-site https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/nomination-and-remuneration-policy.pdf.

In a separate meeting of independent Directors held on 30^th March, 2024, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors and assessed the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to Effectively and reasonably perform their duties.

The Policy on appointment and remuneration of Directors, KMP and other employees and other matters as required under Section 178(3) of the Companies Act, 2013 is available on the web-site of the Company viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/nomination-and-remuneration-policy. pdf.

During the financial year 2023-24, 4 (Four) Board Meetings of the Company were held on 27^th May, 2023, 12^th August, 2023, 9^th November, 2023 and 10^th February, 2024.

For the Board Meetings held as above, the gap between two Board Meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations. The Board Meetings were held at the Factory (Works) of the Company situated at Rakanpur, Dist. Gandhinagar, Gujarat.

The particulars of number of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report. Agenda of the meetings were prepared and all necessary papers were circulated to Members of the Board in advance. Necessary disclosures were made by the Directors in the Board and Committee Meetings whenever required. The Company has complied with Secretarial Standards 1 (SS-1) related to Board and Committee Meetings of the Company issued by ICSI. During the financial year 2023-24, 3 (three) Circular Resolutions in respect of the following matters have been passed by the Board of Directors on 27^th September, 2023 and 8^th December, 2023 and duly confirmed by the Board of Directors in the next Board Meeting of the Company as per Section 175 of the Companies Act, 2013 and Rules made thereunder and as per Secretarial Standards SS-1issued by ICSI:

1) Approval of Cost Audit Report for the year 2022-23 issued by M/s. Rajendra Patel & Associates, Cost Accountant, Ahmedabad (Firm Regn. No. FRN 101163), Cost Auditor of the Company in respect of cost records maintained by the Company for various products of the company.

2) Taking note of Show Cause Notice (SCN) dated 1^st September, 2023 received from SEBI and authority to Managing Director to sign the Settlement Application along with all annexures on behalf of the Company and submit the same to SEBI and to appoint various persons to appear, act and plead before SEBI under Settlement Scheme on behalf of the Company against the said SCN.

3) Approval to wind-up / dissolve Patels Airtemp (USA) Inc., a 100% Wholly-Owned Subsidiary (WOS) of the Company.

As required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure – E attached herewith and forming part of the Directors' Report.

Business risk evaluation and management, covering the business operations of the Company, is an ongoing process within the Company and the management reviewed frequently risk assessment and to minimize them. The ultimate goal of risk management is the preservation of physical and human assets of the organization for successful continuation of its operations. Pursuant to the provisions of Regulation 21 of SEBI Listing Regulations, at present, the Company is not required to constitute Risk Management Committee of the Directors of the Company.

The details regarding Corporate Social Responsibility of the Company are given in the Corporate Governance Report, which forms part of this Report.

The salient features of the Policy forms part of the Annual Report on CSR activities annexed to the Board's Report. The Annual Report on CSR activities and expenditure, as required under Sections 134 and 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014, is annexed herewith marked as Annexure - F. The policy also indicates the activities to be undertaken by the Company within the broad framework of Schedule VII of the Companies Act, 2013, as in force and as amended from time to time which includes promotion of educational and employment enhancing vocational skills and education of underprivileged children, social development/services, promotion of healthcare, including preventive health care i.e. for medical treatment, rehabilitation and sanitation and disaster management, environmental sustainability, rural development project, eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and promoting gender equality, empowering women and measures for reducing inequalities faced by socially and economically backward groups and such other activities and programs as recommended by CSR committee from time to time.

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed.

The Company's internal control system is commensurate with its size, scale and complexities of its operations.

M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad (Firm Registration No. 107525W) were appointed as Statutory Auditors of your Company at the 30^th Annual General Meeting of the Company held on 27^th September, 2022, for a first term of five consecutive years from the conclusion of the said 30^th Annual General Meeting of the Company till the conclusion of the 35^th Annual General Meeting to be held in the year 2027 in place of retiring Statutory Auditors M/s. Shah & Shah Associates, Chartered Accountants, Ahmedabad (Firm Registration No. 113742W).

In accordance with the Companies Amendment Act, 2017, enforced on 7^th May, 2018 by the Ministry of Corporate Affairs (MCA), the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. Accordingly, no resolution has been proposed for ratification of appointment of Auditors of the Company.

No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013 requiring disclosure in the Board's Report, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

During the Financial Year 2023-24, the Company has paid total fees of 4,38,000 including statutory audit fees, certification fees, and fees for other services to M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company (Firm Registration No. 113742W).

The Statutory Auditors have mentioned in their Audit Report the following Notes in respect of Audited Standalone Financial Statements of the Company for the year ended 31^st March, 2024 as Emphasis of the Matter: "During the year under review, M/s. Patels Airtemp (USA) Inc., a Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company, stands dissolved w.e.f. 11^th December, 2023 as per Certificate of Dissolution issued by State of Delaware (USA). Consequent, upon the said dissolution, Patels Airtemp (USA) Inc. ceased to be a Subsidiary Company and accordingly the company has written off Investment in Wholly Owned Subsidiary amounting to 7.17 Lakhs and Loan to Wholly Owned Subsidiary amounting to 5.32 Lakhs in the books of accounts during the financial year ended on 31^st March, 2024." The Statutory Auditors have also mentioned the following notes in their Auditors' Report as Emphasis of the Matter: "The balance confirmation from the suppliers and customers have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables and trade payables have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties." However, the Auditors clarified in its report that their Conclusion is not modified in respect of the above matters of emphasis.

The Notes on financial statement referred to in the Auditors' Report and mentioned above are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer, except Emphasis of the Matter as mentioned above.

Section 204 of the Companies Act, 2013 and Rules made thereunder inter alia requires every Listed Company to annex with its Board Report a Secretarial Audit Report given by a Company Secretary in Practice in the prescribed form. The Board appointed Mr. Punit Lath, Practicing Company Secretary, Ahmedabad (COP No. 11139 & Membership No. 26238) as the Secretarial Auditor to conduct Secretarial Audit of the records of the Company for the financial year 2023-24. Secretarial Auditor has submitted to the Company the Secretarial Audit Report for the financial year ended March 31, 2024 and annexed herewith marked as Annexure – G to this Report.

The Secretarial Audit Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark. During the year under review, the Secretarial Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

The Board at its meeting held on 10^th February, 2024, has re-appointed Mr. Punit Lath as Secretarial Auditor, for conducting Secretarial Audit of the Company for the financial year 2024-25. The Company has received his written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder.

The Company has also received Secretarial Compliance Report for the year ended 31^st March, 2024 from Mr. Punit Lath (COP No. 11139 & Membership No. 26238), Practicing Company Secretary and duly _led with BSE Ltd., in respect of compliance with the provisions of: (a) the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the Regulations, circulars, guidelines issued thereunder; and (b) the Securities Contracts (Regulation) Act, 1956 ("SCRA"), rules made there under and the Regulations, circulars, guidelines issued there under by the Securities and Exchange Board of India ("SEBI").

Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get its cost accounting records audited by a Cost Auditor.

Accordingly, the Board at its meeting held on 24^th May, 2024, has on the recommendation of the Audit Committee, appointed M/s. Rajendra Patel & Associates, Cost Accountant, Ahmedabad (Firm Registration No. FRN101163) to conduct the audit of the cost accounting records of the Company for FY 2023-24 on a remuneration of 80,000/- plus taxes as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and confirmed that their appointment is within the limits of the Section 139 of the Companies Act, 2013. They have also certified that they are free from any disqualifications specified under Section 141 of the Companies Act, 2013.

The Cost Audit Report for the Financial Year ended 31^st March, 2023 has been duly _led in XBRL mode. The cost audit report of the Company for financial year ended March 31, 2024 will be _led with Central Government on or before the due date as prescribed under Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014.

Pursuant to the provisions of Regulation 18 read with Part C of Schedule II of SEBI Listing Regulations, the Audit Committee reviews quarterly the Report of internal audit received from Internal Auditor of the Company relating to internal control weakness, if any, as mentioned in the Internal Audit Report.

Pursuant to the provisions of SEBI Listing Regulations, the Company declares that the Equity Shares of the Company are listed on the BSE Limited (BSE). The Company confirms that it has paid Annual Listing Fees to BSE up to the Financial Year 2024-25.

The Disclosures relating to remuneration and other details required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed as Annexure - H and forms an integral part of this Report. A statement showing the names of top 10 employees in terms of remuneration drawn as per Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed as Annexure - H and forms an integral part of this Report.

The Statement of particulars of employees under Section 197(12) read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not provided with as, during the financial year under review, no employee of the Company including Whole-time Directors and Managing Directors were in receipt of remuneration in excess of the limits set out in the said rules.

The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report any act of serious misconduct or wrongful activity being occurred or suspected to occur within the organization, to his immediate HOD or the HR Head or directly to the concern Whole-time Directors or Managing Directors of the Company, as he may desire. No employee of the Company is denied access to the Audit Committee. The vigil mechanism/whistle blower policy is also available on the web-site of the Company viz. https://www. patelsairtemp.com/pdf/policies-and-code-of-conduct/whistel-blower-cum-vigil-mechanism-policy.pdf. During the year under review, the Company has not received any whistle blower complaint.

The Company has zero tolerance towards sexual harassment at the workplace. The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. All employees (permanent, contractual, temporary, trainees) are covered under the said Policy.

All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints pertaining to sexual harassment were received during the financial year 2023-24.

Policy on Prevention, Prohibition and Punishment of Sexual Harassment is also available on the web-site of the Company viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/sexual-harassment-policy.pdf

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review: O The Company does not provide any loan or other financial arrangement to its employees or Directors or Key Managerial Personnel for purchase of its own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013 does not require.

O The disclosure in terms of Rule 4 of Companies (Share Capital and Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares with differential voting rights.

O No fraud has been reported by the Auditors to the Audit Committee or the Board.

O The Company has not issued any shares under any scheme including Employees' Stock Options Schemes or Sweat Equity Shares to employees of the Company.

O Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from its subsidiary.

O There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. O There was no instance of onetime settlement with any Bank or Financial Institution.

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions. The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

(Pursuant to _rst proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014)

( in Lakhs)

Patels Airtemp (USA) Inc., a Wholly Owned Subsidiary (WOS/Foreign Entity) of Patels Airtemp (India) Limited ("the Company") has not commenced any business activities since its incorporation and incurring loss and no plan to commence any business activities in future.

In view of above, Patels Airtemp (USA) Inc., stands dissolved w.e.f. 11th December, 2023 as per Certificate of Dissolution issued by State of Delaware (USA). Consequent upon the said dissolution, Patels Airtemp (USA) Inc., ceased to be a Subsidiary of the Company w.e.f. 11th December, 2023.

The said WOS was dissolved by disinvestment of Equity Capital and write off USD 15,941 and net balance of USD 9,059 remitted to India from USA, pursuant to the provisions of Foreign Exchange Management Act, Overseas Investment Rules, Regulations and Directions issued by the Central Government along with Reserve Bank of India (RBI) and also the laws applicable in the State of Delaware, USA.