Magna Electro Castings Ltd

Dear Shareholders,

Your Directors have pleasure in presenting the 34th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2024.

The highlights of the performance of your Company during the financial year (FY) 2023-24 are given hereunder;

( in lakhs)

The summary / highlights for the last five years is furnished vide Annexure-A to this Report

The Operating Revenue of the Company has decreased by 12.72 % from Rs. 16464.29 Lakhs in the previous year to Rs. 14369.78 Lakhs in the current year. The Export revenue during the year is Rs. 6615.84 lakhs compared to Rs.7646.09 lakhs in the previous year. Due to lower demand coupled with inventory adjustment and shorter transit time, the Export business decreased by

13.47 % over the previous year. During the year, the domestic market also underwent a demand correction. Hence the reason for reduction in the turnover.

Despite decline in Operating Revenue, the Company has strived hard to maintain the operational profit margin at 17.44% current year compared to previous year margin of 17.35%. This is mainly due to lower input cost, production efficiency and product mix. The raw material cost was relatively stable during the financial year ended

31st March, 2024.

During the previous year, Profit Before Tax was Rs.2311.75 Lakhs which includes Operating profit of Rs 2140.94 Lakhs and One time profit from sale of asset of Rs. 170.81 Lakhs. During the year under review, the Company had an Operating profit of Rs 2039.39 Lakhs and profit before tax of Rs 2040.61 Lakhs

Your Company is always eco-conscious and ESG considerations are deeply ingrained in the Company's vision.

During, FY 2023 24, your Company has made significant strides towards green energy. 83% of the total energy consumption is from Green energy which is generated from the Company's Windmills and Solar Plant. Further, the Company plan to invest in Sand Reclamation Systems so that the burden on the environment is substantially reduced and increase the capacity of Solar Power plant.

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The income from Wind and Solar Energy is Rs. 741.57 Lakhs during the year as against Rs. 479.54 Lakhs, in the previous year.

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

Your Directors are pleased to recommend a dividend of Rs. 5/- per share, i.e. at the rate of 50 % for the FY 2023-24 on the paid-up equity share capital of the Company. The dividend, if approved, will absorb an amount of Rs.211.61 Lakhs and will be paid to shareholders on approval, subject to deduction of tax at source. The payment of dividend is subject to approval of the shareholders at the 34th Annual General Meeting (‘AGM') of the Company. In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. Your Company shall, accordingly, make the payment of the dividend after deduction of tax at source at appropriate rates applicable to resident and nonresident shareholders as the case may be.

During the year under review, the Company has installed some balancing equipments/machinery which will enhance the production activities of the Company. Civil works were also undertaken to increase the floor space of the finishing division and machine shop. Roads were also laid/ re-laid to facilitate easy of movement of vehicles inside the Plant.

During the year, the Board has approved the Third Molding Line project for augmenting the molding capacity of the Company. The preliminary works for accommodation of the Third Molding Line were undertaken during the year and they are in place as at the date of this report.

Implementation, erection and commissioning of Third Molding Line project will be completed during the last quarter of the Financial year 2024-25. The total installed molding capacity will be around 2000MT per month. The additional melting capacity will be accordingly adjusted as and when the production picks up. This expansion will also enable us to secure new business in medium sized components range on a competitive basis. On successful completion of this project, the Company will able to cater to a wide range of castings from 1 Kg to 250 Kgs.

During the year, the Company obtained re-certification of the following standards IATF 16949 & ISO 9001 Certification, Pressure Equipment Directive (PED) requirements, Transportation & Power Generation (TPG) requirements. Further, the Company has also received Re- Certification of EMS ISO 14001 Environmental System certification and Marine Certification as per DNV Rules for Classification of Ships. In addition to this, the Company also complies with Supplier Assessment Audits conducted by its customers constantly.

During the year, the Company has been awarded the Supplier Excellence Recognition 2023 from Caterpillar Inc.

The Company incurred a finance cost of Rs. 20.03 Lakhs during the year. As on the date of this report, there is no long term debt obligation for the Company.

The Company has transferred Rs 200 Lakhs out of the current year profits to General Reserves during the year and an amount of Rs. 6145.76 lakhs is retained in the Statement of Profit & Loss.

During the year under review, the Company has not altered/modified its authorised share capital and the Company has not made any fresh issue of shares.

As on 31st March 2024, the authorized capital of the is Rs. 5,00,00,000/- divided into 50,00,000 equity shares of Rs. 10/- each. The Issued, Subscribed and Paid-up equity capital of the Company as on 31st March, 2024 is Rs. 4,23,21,040/- divided into 42,32,104 equity shares of Rs. 10/- each fully paid up.

In terms of Section 124 and 125 of the Companies Act, 2013, the Unclaimed Dividend relating to the Financial Year 2016-17, is due for transfer during October, 2024 to the Investor Education and Protection Fund (IEPF) established by the Central Government.

During the year under review, as per the requirements of Section 124(6) of the Companies Act, 2013 and Investor

Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (IEPF Rules),

6278 Equity Shares of Rs. 10/- each on which dividend had remained unclaimed for a period of 7 years has been transferred to the credit of the demat Account identified by the IEPF Authority. As on 31st March 2024, 1,01,243 Equity Shares of the Company were in the credit of the Demat Account of the IEPF Authority.

The Annual Return of the Company for the financial year 2023-24 as required under Section 92(3) of the Companies

Act, 2013 is available on the website of the Company and can be accessed on the Company's website at the link https://www.magnacast.com/uploads/invsubpdf/invsubpdf2024-06-18-dlgd66715d592cb99.pdf

During the year under review, Five (5) Meetings of the Board of Directors were held. The details of the composition of the Board and its Committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility (CSR) Committee and Meetings held and attendance of the Directors at such Board / Committee Meetings are provided in the Corporate Governance Report under relevant heads which forms a part of this Report.

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial

Standards and that such systems are adequate and operating effectively. The Company has duly complied with

Secretarial Standards issued by the Institute of Company Secretaries of India on meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

Pursuant to requirement of Section 134(3)(c) of the Companies Act 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departure from those standards; 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 at the end of the financial year and of the profit of the Company for that period; c) The Directors have taken proper and sufficient care for 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 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 were operating effectively; and f) The Directors had devised proper system to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively;

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit.

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 [‘Listing Regulations'] so as to qualify themselves as Independent

Directors under the provisions of the Companies Act, 2013 and the relevant rules of the Listing Regulations. Further, they have also declared that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors are Independent: Sri. K Gnanasekaran, Dr. R Nandini, Dr. Jairam Varadaraj, Sri. G D Rajkumar and Smt. Vijayalakshmi Narendra.

Pursuant to Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent

Directors have submitted necessary declaration of compliance with Rule 6(1) and Rule 6(2) of the said Rules. They have confirmed that their names have been included in the data bank of the Indian Institute of Corporate Affairs.

The Board of Directors have evaluated the Independent Directors appointed/ re-appointed during the year 2023-

24 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on nomination, appointment and remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and employees of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other matters pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the Listing Regulations. The detailed Remuneration Policy can be accessed on the Company's website at the link https://www.magnacast.com/uploads/invsubpdf/nomination-and-remuneration-policy-31012022-amended-subd62d0ea3371161.pdf

The Company has no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review. However, the investments made during the earlier years are provided under the notes to Balance Sheet appearing elsewhere in this Annual Report. Further, the Company has not accepted any Fixed deposits.

All the transactions of the Company its related parties as defined under the Companies Act, 2013 and Regulation 23 of the Listing Regulations (as amended) during the financial year 2023-24 were in the ordinary course of business and on an arm's length basis. Pursuant to Regulation 23 of the Listing Regulations, the Company had obtained the approval of the Shareholders to enter into material related party transactions with one of its related parties. For the Financial Year 2024-25, approval of Shareholders is being sought to enter into material related party transactions with its Related Party. The particulars of Material Related Party Transactions which are at arms' length basis is provided in Form AOC-2 and the same is annexed to the Boards Report as Annexure -B.

The Policy on Related Party Transactions is made available at the Company's website and the same can be accessed through the link at https://www.magnacast.com/uploads/invsubpdf/rpt-policy-revised-01042022-i08w626a42626c262.pdf .

There have been no material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial year ended 31st March, 2024 relate and the date of the report.

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies

(Accounts) Rules, 2014 is furnished in Annexure - C attached to this report.

The Company continues to focus attention on the risk areas identified and in case of any adverse situation, suitable mitigation steps are taken. The Company has adopted a comprehensive and integrated risk appraisal, mitigation and management process. The risk mitigation measures and procedures of the Company are placed before the Audit Committee/ Board periodically for review and improvement. The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal.

The Board had formed a Corporate Social Responsibility (CSR) Committee comprising of Dr.R.Nandini, Sri. G. D. Rajkumar and Sri.N.Krishna Samaraj. The CSR Committee of the Company deals with allocation of funds, activities, identification of programs, approval, implementation, monitoring and reporting mechanisms under the policy.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are furnished separately vide Annexure - D to this Report. The policy relating to CSR has been displayed on the Company's website and can be accessed at https://www.magnacast.com/uploads/invsubpdf/csr-policy-tzos608aa07b65155.pdf

Pursuant to the provisions of the Companies Act, 2013, the Board of Directors evaluated the annual performance of the members of the Board and its Committees vis-a-vis the nature of business of the Company, its performance during the year and the contribution of each of the Directors based on the criteria laid down by the Nomination and Remuneration Committee.

The Independent Directors has also convened a separate meeting for this purpose on 3rd February, 2024 and inter-alia, reviewed the performance of the Non- Independent Directors and the Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company and the Board.

The Board of Directors at their Meeting held on 30th May, 2023 have appointed : i. Sri. Ajeya Vel Narayanaswamy (DIN: 07553660) as an Additional Non-Executive Non-Independent Director; ii. Smt. Vijayalakshmi Narendra (DIN: 00412374) as an Additional Non-Executive Independent Director to hold office for a period of 5 years.

Subsequently, the appointments were approved by the Shareholders at their Meeting held on 26th August, 2023.

Sri. Ajeya Vel Narayanaswamy (DIN: 07553660) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Your Directors recommend his re-appointment.

The Nomination and Remuneration Committee and Board of Directors at their respective meetings held on

29th May 2024 after considering the qualifications, credentials and the required criteria as per statutory requirements, have recommended to the Shareholders for their approval, the proposal for: i. Appointment of Sri. Vidyaprakash Arjunprakash (DIN: 00835823) as Non-Executive Independent Director of the

Company to hold office for a period of 5 years with effect from 16th August, 2024. ii. Continuation of Directorship of Sri. N. Krishna Samraj (DIN: 00048547) as Managing Director of the Company upon attaining age of 70 years on 26th March, 2025 for the remaining period of his term of 5 years (i.e) until 16th January, 2027;

The Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies

Act, 2013 as on 31st March, 2024 are:

During the year under review, Smt. Sangeetha. C has resigned from the office of Company Secretary on 1st November, 2023 and Ms. Divya Duraisamy is appointed as the Company Secretary with effect from 1st November, 2023.

The second term of appointment of Sri. K. Gnanasekaran, Dr. Jairam Varadaraj and Dr. R. Nandini as Independent Directors is ending in the upcoming Financial year on 18th August, 2024.

The Company does not have any Subsidiaries, Joint ventures or Associate Companies.

Since the Company has not accepted any fixed deposit covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March, 2024 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year does not arise.

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operation in future.

The Company has an adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Audit Committee of the Board periodically reviews the Internal Financial Control Systems and their adequacy and recommends corrective action as and when necessary to ensure that an effective internal control mechanism is in place.

The Directors confirm that the Internal Financial Control (IFC) systems are adequate with respect to the operations of the Company. The report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Control is annexed with the Auditors Report.

M/s. VKS Aiyer & Co., (Firm Registration No. 000066S), Chartered Accountants, Coimbatore, were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 31st Annual General Meeting held on 23rd September, 2021 for a period of 5 consecutive years till the conclusion of the 36th Annual General Meeting to be held in the year 2026.

The Company has received necessary consent letter and certificate from M/s. VKS Aiyer & Co., (Firm Registration

No. 000066S), Chartered Accountants, Coimbatore, to the effect that their appointment, if made, would be within the prescribed limits under Section 141(3) of the Act and that they are not disqualified from being appointed as the

Statutory Auditors of the Company.

M/s. MDS & Associates LLP, Company Secretaries, Coimbatore (LLPIN: ABZ 8060)(Peer Review No: 3030/2023) were appointed as the Secretarial Auditors of the Company for the year 2024-25 to carry out the Secretarial Audit, pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014,

The report of the Secretarial Auditors for the financial year 2023-24 is annexed as Annexure- E to this Report.

The Board of Directors on the recommendation of the Audit Committee, has appointed M/s. SBK & Associates,

Cost Accountants, Chennai as the Cost Auditors of the Company for the financial year 2024-25. Pursuant to Section

148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable for the year 2024-25 to the Cost Auditors of the Company is subject to ratification by the Shareholders at the ensuing Annual General Meeting.

The maintenance of cost records as specified by the Central Government under Section 148(1) of the Companies

Act, 2013 is applicable to the Company and accordingly the cost accounts and records are made and maintained.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. VKS Aiyer & Co, Statutory

Auditors and M/s. MDS & Associates LLP, Secretarial Auditors in their respective audit reports.

No applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

The relationship between the management and the employees at all levels during the year under review has been cordial and productive.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to define the policy and redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed of during the year 2023-24: i. Number of complaints received - Nil ii. Number of complaints disposed of – NA iii. Number of complaints pending - Nil

Statement pursuant to Section 134 of the Companies Act, 2013, read with the Companies (Particulars of Employees) Rules, 1975 and Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - F to this report.

In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees drawing remuneration and other particulars, as prescribed in the said Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.

During the year, the Company had no employee who was employed throughout the FY or part thereof and was in receipt of remuneration, which in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company

Pursuant to Regulation 34(3) of the Listing Regulations, a report on Corporate Governance along with a Certificate from the Company Secretary in Practice confirming the compliance of the provisions of Corporate Governance, forms an integral part of this Annual Report and are given in Annexure - G respectively.

The Audit Committee of the Board of Directors has been duly constituted in accordance with the provisions of Section 177 of the Companies Act, 2013. Details relating to the composition, meetings and functions of the Committee are set out in the Corporate Governance Report forming part of this Annual Report. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of

Audit Committee by the Board.

As required under Regulation 33 (2) (a) of the Listing Regulations, the Managing Director and the Chief Financial Officer of the Company have furnished necessary certificate to the Board on the Financial Statements presented, which is annexed as Annexure - H to this report.

The Company has provided for adequate safeguards to deal with instances of fraud and mismanagement and to report concerns about unethical behavior or any violation of the Company's Code of Conduct. During the year under review, there were no complaints received under this mechanism. The policy can be accessed on the Company's website at https://www.magnacast.com/uploads/invsubpdf/whistle-blower-policymagna-30012022- m7cc63f9e7353a01a.pdf

The Directors wish to place on record their appreciation of the support and co-operation extended by the Company's Bankers, M/s. Union Bank of India and M/s. Axis Bank, the various Government Agencies and in particular the Tamil Nadu Electricity Board and the employees of the Company at all levels for being an invaluable part of the team. The Directors would also like to thank all the stakeholders for the unwavering support that propels the Company forward. As we continue to navigate the ever-evolving business landscape, we remain committed to transparency, excellence, and delivering value. May the blessings of Almighty illuminate our path, fortify our endeavors, and propel our Company toward greater heights.