Servotech Power Systems Ltd

Dear Members,

Your Directors are pleased to present to you the 20^th Annual Report on the business and operations of the Company along with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended 31^st March, 2024 ("FY").

1. FINANCIAL PERFORMANCE

Highlights of the Company's financial performance for the year ended 31st March, 2024 are as under:

a) Standalone Financial Results

(Amount in Lakhs)

Note: The face value of the Company calculated considering the sub-division held on 28th July, 2023.

b) Consolidated Financial Results

c) Overview of Company Performance

In the midst of trade flow disruptions and economic instability, there was ongoing volatility in the global markets. Despite challenges, your company has continued to grow steadily and produce positive financial results.

Inflationary pressures caused consumer demand to decline, especially in rural markets, and increased consumer preference for goods at lower price points.

By focusing on the strategic pillars of cost-efficiency initiatives, innovation, brand development, and distribution in order to maintain growth and profitability, your company is navigating these unprecedented challenges. To counteract the effects of rising commodity prices, prudent price increases were also put into practice.

2. SHARE CAPITAL

a) Authorised Share Capital:

At the beginning of the financial year, the Authorized Share Capital of the Company was Rs. 22,00,00,000/-(Rupees Twenty Two Crores only) divided into 11,00,00,000 (Eleven Crores) equity shares of face value of Rs. 2/- (Rupees Two Only) each.

Thereafter in order to ensure smooth flexibility for Shareholders, the Company did sub-divide the equity shares of the Company such that equity shares of face value of Rs. 2/- were sub-divided into 1 (One) equity shares having face value Rs. 1/- each fully paid-up ranking pari-passu with each other in all respects with effect from 28^th July, 2023. The Authorized share capital of the Company post

stock split stood at Rs. 22,00,00,000/-(Rupees Twenty Two Crores only) divided into 22,00,00,000 (Twenty Two Crores) equity shares of face value of Rs. 1/- (Rupees One Only) each.

Thereafter, the Company vide its General Meeting by way of postal ballot dated 17^th December, 2023 increase the authorised share capital of the company from Rs.

22.00. 00.000/-(Rupees Twenty Two Crores only) divided into 22,00,00,000 (Twenty Two Crores) equity shares of face value of Rs. 1/- (Rupees One Only) each to Rs.

25.00. 00.000/-(Rupees Twenty Five Crores only) divided into 25,00,00,000 (Twenty Five Crores) equity shares of face value of Rs. 1/- (Rupees One Only)

As on 31st March, 2024 Authorized Share Capital of the Company stood at Rs. 25,00,00,000/-(Rupees Twenty Five Crores only) divided into 25,00,00,000 (Twenty Five Crores) equity shares of face value of Rs. 1/- (Rupees One Only)

b) Paid-up Share Capital:

At the beginning of the financial year, the paid-up equity share capital of the Company was Rs. 21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) to 10,63,27,145 (Ten Crore Sixty Three Lakh Twenty Seven Thousand One Hundred Forty Five) equity shares, each of Rs. 2/- (Rupees Two only) each.

Thereafter, with effect from 28th July, 2023, the shares of the Company were sub-divided such that equity shares of face value of Rs. 2/- were sub-divided into 1 (One) equity shares having face value Rs. 1/- each fully paid-up ranking pari-passu with each other in all respects with effects, resulting in change in the paid-up equity share capital from Rs. 21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) divided to

21.26.54.290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) equity shares, each of Rs. 1/- (Rupees One only) each

The Company vide Extra-ordinary General Meeting held on 1st October, 2022 had issued convertible warrants to promoter group and as on 06th January 2024 allotted 42,50,000 equity shares (Pursuant to conversion of warrants) of Rs. 1/- each on preferential basis to promoter group, Accordingly, the paid up capital was changed from Rs. 21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) divided to

21.26.54.290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) equity shares, each of Rs. 1/- (Rupees One only) each to Rs. 21,69,04,290 (Rupees Twenty One Crore Sixty Nine Lakh Four Thousand Two Hundred Ninety) divided into 21,69,04,290 (Twenty One Crore Sixty Nine Lakh Four Thousand Two Hundred Ninety) equity shares of Rs. 1/- (Rupees One only) each.

As on 31st March, 2024, the Paid up capital of the Company stood at Rs. 21,69,04,290 (Rupees Twenty One Crore Sixty Nine Lakh Four Thousand Two Hundred Ninety) divided into 21,69,04,290 (Twenty One Crore Sixty Nine Lakh Four Thousand Two Hundred Ninety) equity shares of Rs. 1/- (Rupees One only) each

3. DETAILS OF PREFERENTIAL ISSUE

During the financial year 2023-2024, the Company vide its General Meeting by way of postal ballot dated 17^th December,

2023 had issued 90,00,000 warrants, convertible into equity shares on preferential basis to promoter and certain identified non-promoters and as on 06th January 2024 allotted 8900000 warrants, convertible into equity shares on preferential basis to promoter and certain identified nonpromoters in accordance with Sections 23(1)(b), 42 and 62(1)(c) of the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share Capital and Debentures) Rules, 2014 and read with the SEBI (ICDR) Regulations and the SEBI (LODR) Regulations, 2015.

4. DETAILS OF EMPLOYEES STOCK OPTION PLAN (ESOP- 2022)

In order to enable the employees of the Company to participate in its future growth and success, The Company has granted the ESOP options to its eligible employees and is in the process of implementing the said ESOP scheme by following the applicable provisions of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

5. DIVIDEND

During the year under review, the Board of Directors recommended and shareholders approved the Final dividend of Re .0.20 per Equity Share of Face Value of 1 /- (Rupees One Only)] for the Financial Year ended 31st March, 2023 AGM held on September 30,2023.

Further, the Board of Directors have recommend the Final dividend of Re 0.05 per Equity Share of Face Value of 1 /- (Rupees One Only) for the Financial Year ended 31st March,

2024 subject to the approval of members at the ensuing Annual General Meeting upon deduction of TDS.

In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company had, accordingly, made the payment of the interim dividend after deduction of tax at source, at the rates as prescribed and the final dividend shall also be dealt accordingly.

Further, pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after completion of seven years.

Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. However, the Company had declared Dividend for the first time in the Financial Year 2021-2022 and seven years have not elapsed from the date of declaration and payment of dividend the requirement of transfer of unpaid dividend and the shares on which dividend has not been paid or claimed, to Investor Education and Protection Fund (IEPF) is not applicable to the Company.

6. DETAILS OF SUB-DIVISION OR STOCK SPLIT OF SHARES OF THE COMPANY

During the financial year under review, the board of Directors of the Company vide its Meeting dated 25th May 2023, upon approval of the shareholders of the Company vide EGM dated 22nd June, 2023 had approved the sub- division/stock split of shares of the Company such that each equity shares of face value of Rs. 2/- were sub-divided into 2 (Two) equity shares having face value Rs. 1/- (One) each fully paid-up ranking pari-passu with each other in all respects with effect from 28th July, 2023.

In order to ensure smooth flexibility for Shareholders, the Company did sub-divide the equity shares of the Company such that each equity share of face value of Rs. 2/- were sub-divided into 2 (Two) equity shares having face value Rs. 1/- each fully paid-up ranking pari-passu with each other in all respects with effect from 28th July, 2023. The Authorized share capital of the Company post stock split stood at Rs.

22,00,00,000/-(Rupees Twenty Two Crores only) divided into 22,00,00,000 (Twenty Two Crores) equity shares of face value of Rs. 1/- (Rupees One Only) each.

Further, the issued, subscribed, and paid-up equity share capital had also changed to Rs. 21,26,54,290 divided into

21.26.54.290 equity shares, each of Rs. 1/- each from Rs.

21.26.54.290 divided into 10,63,27,145 equity shares, each of Rs. 2/- each and later as on 31.03.2024-21,69,04,290 (Rupees Twenty One Crore Sixty Nine Lakh Four Thousand Two Hundred Ninety) divided into 21,69,04,290 (Twenty One Crore Sixty Nine Lakh Four Thousand Two Hundred Ninety) equity shares of Rs. 1/- (Rupees One only) each

7. CHANGE IN THE NATURE OF BUSINESS

For sustained growth in the future, Company wants to rely on the main business (es) of Company. There is no change in the nature of the business of the Company during the year.

8. TRANSFER TO RESERVE

The Company does not propose to transfer amounts to the general reserve.

9. DEPOSITS

The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 during the financial year 2023-24.

10. DETAILS OF SUBSIDIARY/JOINT VENTURE/ ASSOCIATE COMPANIES

As on 31^st March, 2024, the Company has 4 (Four) subsidiaries, the details of which are as mentioned below. Further a subsidiary named Techbec Global Solutions Private Limited was sold out during the said year. After the closure of F.Y. one more subsidiary incorporated with the name of Servotech Sports and Entertainment Private limited. Detail as per section 129 is attached as AOC-1 which forms part of Financial Statement .

There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.

I. Rebreathe Medical Devices India Private Limited ("RMDIPL"):

A Private Limited Company vide CIN: U33119DL2021PTC383180 incorporated on 5th July, 2021. The Holding Company has 95% shareholding in the Subsidiary.

II. Techbec Industries Limited ("TIL")

A Public Limited Company vide CIN:

U31900DL2022PLC404516 incorporated on 13th September, 2022. The holding Company has 63.5% shareholding in the Subsidiary Company.

III. Techbec Green Energy Private Limited ("TGEPL")

A Private Limited Company vide CIN:

U27201DL2023PTC417728 incorporated as a wholly- owned subsidiary on 27th July, 2023.

IV. Servotech Ev Infra Private Limited (‘'SEIPL'')

A Private Limited Company vide CIN:

U33200DL2023PTC422574 incorporated as a

wholly-owned subsidiary on 10th November, 2023. After Dilution The Holding Company has 94.28% shareholding in the Subsidiary.

V. Servotech Sports And Entertainment Private limited("SSEPL")

After the close of financial year and with effect from 28th May, 2024 a subsidiary Company vide CIN: U93190DL2024PTC431924 was incorporated.

The annual accounts of the subsidiaries shall also be kept for inspection by any shareholder in the Registered Office of the Company and the respective offices of its Subsidiary Companies.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the Company's website at www.servotech.in at Investors Tab.

11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, 21 (Twenty One) meetings of the Board of Directors were held. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31^st March, 2024 the Board comprised of 6 (six) Directors, 3 (three) Executive Directors and 3 (three) Independent Directors. Out of the total 6 (six) directors, 1 (one) is woman director.

1. During the Financial Year, Mr. Sahiel Khurana (DIN: 02340950) Non-executive Independent Director of the Company resigned w.e.f. 19th May, 2023 and

2. Mr. Meenakshisundaram Kolandaivel (DIN: 09854605) was appointed as Non-executive Independent Director of the Company w.e.f 25th June, 2023.

After the closure of financial year Mr. Rajesh Mohan Rai was re-designated to Non-executive Director w.e.f. 03^rd June, 2024.

Apart from above, there were no changes in the Board of Directors and Key Managerial Personnel of the Company.

13. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, so as to qualify themselves continue to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof. In the opinion of the Board, they fulfil the condition for appointment/re-appointment as Independent Directors on the Board. Further, in the opinion of the Board, the Independent Directors also possess the relevant attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5) (iii) (iiia) of the Companies (Accounts) Rules, 2014.

14. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Act, the Board of

Directors, to the best of their knowledge and ability, confirm

that:

a) In the preparation of annual accounts for the financial year ended 31st March, 2024, the applicable accounting standards have been followed and there are no material departures;

b) They 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 31st March, 2024 and of the profit of the Company for that period;

c) They have taken proper and sufficient care for their 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;

d) They have prepared the annual accounts on a going concern basis;

e) They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

15. AUDITORS AND AUDITOR'S REPORT

i. STATUTORY AUDITORS

In accordance with the provisions of section 139 of the Companies Act, 2013, M/s. Rohit KC Jain and Co., Chartered Accountants (Firm Registration No. 020422N),were appointed as the Statutory Auditors for a period of 5 (five) years commencing from the conclusion of the 18th AGM till the conclusion of the 23rd AGM. M/s. Rohit KC Jain and Co., Chartered Accountants is a leading professional services firm engaged in the field of audit, taxation, risk and transaction advisory services.

M/s. Rohit KC Jain and Co., Chartered Accountants have consented to the said appointment, and confirmed that their appointment, would be within the limits mentioned under Section 141(3)(g) of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014. Further, they have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI).

The Audit Committee and the Board of Directors recommended the appointment of M/s. Rohit KC Jain and Co., Chartered Accountants, as Statutory Auditors of the company from the conclusion of the 18^th AGM till the conclusion of the 23^rd AGM.

In accordance with the provisions of the Companies (Amendment) Act, 2017, the requirement related to annual ratification of appointment of statutory auditors by the members has been omitted. Hence, the resolution for ratification of appointment of M/s. Rohit KC Jain and Co., Chartered Accountants as the statutory auditor, whose appointment was approved by the members in the 18^th AGM for a term of five consecutive years i.e. till the conclusion of the 23^rd AGM, has not been put for motion as an ordinary business in the 20^th AGM.

The Auditors' Report for financial year 2023-2024 on the financial statements forms part of this Annual Report. The Auditors have also furnished a declaration confirming their independence as well as their arm's length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company. The Audit Committee reviews the independence of the Auditors and the effectiveness of the Audit process.

Auditors' Report and the Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

ii. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors in its meeting held on 21st July, 2023 have appointed R & D Company Secretaries as Secretarial Auditor of the Company to conduct the Secretarial Audit of the Company for the financial year 2023-24.

The Secretarial Audit Report in prescribed Form MR-3 for the financial year ended 31^st March, 2024 is appended as Annexure-1 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Board of Directors further in its meeting dated 09th May, 2024 re-appointed R & D Company Secretaries to conduct the Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Auditor have provided their consent inter alia contains their eligibility to give effect to their appointment.

iii. COST AUDITOR

As per Section 148 of the Act read with Companies (Cost Records and Audit) Rules 2014, M/s NN Sharma & Associates, Cost Accountants (Firm Registration No. 101702) as the Cost Auditors, have been re-appointed as Cost Auditors for the financial year 2024-25 to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee. The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.

The Cost Audit Report for the financial year 202324, issued by M/s NN Sharma & Associates, Cost Accountants, in respect of the various products prescribed under Cost Audit Rules.

There were no observations (including any qualification, reservation, adverse remark or disclaimer) of the Cost Auditors in the Report issued by them for the financial year 2023-24 which call for any explanation from the Board of Directors.

16. DISCLOSURE ON COST RECORDS

Pursuant to provisions of Section 134 of the Act read with Rule 8(5) of the Companies (Accounts) Rules, 2014 it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Act, is required by the Company and accordingly such accounts and records are made and maintained.

17. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in Director's Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report, highlighting the performance and prospects of the Company's business, forms integral part of the Annual Report.

19. CORPORATE GOVERNANCE

A good corporate governance system is something your company is devoted to. The needed Certificate from Secretarial Auditors regarding compliance with the requirements of corporate governance, as prescribed, and the Corporate Governance Report, as stipulated by the SEBI Listing Regulations, are an integral element of this Annual Report.

Your Company has developed and implemented a Code of Business Conduct for all Board members and senior management staff at the Company (Code of Conduct), who have all attested to compliance with the Code in accordance with the corporate governance standards as per the SEBI Listing Regulations. The aforementioned Code of Conduct can be seen on the Company's website at https://www.servotech.in/investors/corporate-governance/ code-of-conduct.

20. FORMAL ANNUAL EVALUATION

Pursuant to applicable provisions of the Act and the Listing Regulations, the Board, in consultation with the Nomination and Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual directors, including Independent Directors and the chairmen of the Board. The framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee, based on need and new Compliance requirements.

The Board evaluation exercise for financial year 2023-24 was carried out by way of internal assessments done based on a combination of detailed questionnaires and verbal discussions.

I. Performance evaluation of the Board and Committees

The performance of the Board was evaluated by the Board Members after considering inputs from all the Directors primarily on:

i) Board composition and quality with emphasis on its size, skill, experience and knowledge of members;

ii) Periodic review of Company's management and internal control system for appropriateness and relevance;

iii) Board process and procedure with emphasis on the frequency of meetings, attendance thereof, flow of information;

iv) Oversight of Financial Reporting process including Internal Controls and Audit Functions;

v) Engagement in Corporate Governance, ethics and compliance with the Company's code of conduct.

The Board evaluated the performance of the Committees on the following parameters:

i) Appropriateness of size and composition;

ii) Clarity of mandate and well-defined agenda;

iii) Reporting to the Board on the Committee's activities;

iv) Availability of appropriate internal and external support or resources to the Committees.

II. Performance Evaluation of Individual Directors

The performance evaluation of the Individual Directors were carried out by the Board and other Individual Directors, considering aspects such as:

i) Sufficient knowledge of Company strategy and objective;

ii) Understand their role as Director, as distinct from management;

iii) Adequate and productive use of knowledge and experience of the Independent Directors for the functioning of Board;

iv) Efforts for professional development to enable better fulfilment of their responsibilities;

v) Ask questions/critique proposals with confidence;

vi) Open and effective participation in Board discussions;

vii) Keep stakeholder interest as the touchstone in endorsing decisions.

III. Performance Evaluation of Chairman

i) Display of effective leadership qualities and skill;

ii) Implementation of observations/recommendations of Board Members;

iii) Effective and timely resolution of grievances of Board Members;

iv) Ability to bring convergence in case of divergent views and conflict of interest situation tabled at Board Meetings;

IV. Evaluation Outcome

The evaluation revealed that the timely sharing of information with the Board, the drafting of agenda notes and their content, as well as the drafting of the minutes, were all deemed to be satisfactory. The way the business issues of the company were handled satisfied every Board Member.

21. COMMITTEES OF THE BOARD OF DIRECTORS

Your Company has following Committees of Board of Directors:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders' Relationship Committee;

4. Corporate Social Responsibility Committee; and

5. Committee of Board of Directors

The role and composition of these Committees, including the number of meetings held during the period under review and the related attendance, are provided under Corporate Governance Report which forms part of the Annual Report.

22. MATERIAL CHANGES

The material changes made as on the date of this report are as mentioned herein below:

i. A subsidiary of the Company under name and style as Servotech Sports and Entertainment Private limited ("SSEPL") vide CIN: U93190DL2024PTC431924 was incorporated on 28th May, 2024.

ii. Mr. Rajesh Mohan Rai (DIN: 09050751), re-designated from Whole-time Director-Executive Director to Nonexecutive Director w.e.f. 03rd June, 2024.

iii. Company has Allotted 3000000, 1500000, 1500000, equity shares pursuant to conversion of warrants as on 08.04.2024, 22.04.2024, 18.05.2024 respectively. After these allotments company's Paid up capital of the Company stood at Rs. 22,29,04,290 (Rupees Twenty Two Crore Twenty Nine Lakh Four Thousand Two Hundred Ninety) divided into 22,29,04,290 (Rupees Twenty Two Crore Twenty Nine Lakh Four Thousand Two Hundred Ninety) equity shares of Rs. 1/- (Rupees One only) each

23. RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("Listing Regulations"), during the Financial Year under review were in the ordinary course of business and at an arm's length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which were in conflict with the interest of the Company and requiring compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) are mentioned in the Notes which forms integral part of the Financial Statements.

The Company has formulated a policy on the materiality of Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https://www.servotech.in/blog/wp-content/ uploads/2021/12/Related-Partv-Transaction-policv.pdf.

The particulars of related party transactions in prescribed Form AOC-2 are attached as "Annexure-2".

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal financial control procedures commensurate with its size and nature of business.

The Company has appointed Internal Auditors who periodically audit the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements.

The Audit Committee of the Board of Directors approves the annual internal audit plan and periodically reviews the progress of audits as per approved audit plans along with critical internal audit findings presented by internal auditors, status of implementation of audit recommendations, if any, and adequacy of internal controls.

The detailed statement about adequacy of Internal Financial Controls is given in Point No. 11 of the Management Discussion and Analysis Report, which forms an integral part of this Annual Report.

25. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.

26. CORPORATE SOCIAL RESPONSIBILITY

Company is committed towards its Corporate Social Responsibility (CSR). The Company has crossed the threshold limit provided under Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 relating to Corporate Social Responsibility (CSR) hence, CSR is applicable to the company. Details about the CSR policy and initiative taken by the company during the year are available on the website at web link: https://www.servotech.in/investors/ corporate-governance/policies. The annual report on Our

CSR activities is appended as Annexure-3 which forms part of this Report.

Further the board would like to highlight the unspent CSR amount of INR 21,34,000 for the financial year 2023-24 have been transferred to PM Care fund, pursuant to the companies act, 2013 and rules framed thereunder, after the closure of the financial year.

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND RESEARCH & DEVELOPMENT

In accordance with the requirements of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, a statement showing particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is annexed hereto as Annexure-4 and forms part of this report.

28. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for its employees and Directors to report concerns about any unethical and improper activity. No person has been denied access to the Chairman of the Audit Committee. The Whistle Blower policy is uploaded on the website of the Company at https://www.servotech.in/blog/wp-content/ uploads/2021/12/Whistle-Blower-Policy.pdf.

The Audit Committee monitors and reviews the investigations of the whistle blower complaints. During the year under review, no complaints were received under Whistle Blower Policy

29. EXTRACT OF ANNUAL RETURN

The Annual Return of the Company as on 31^st March 2024 is available on the website of the Company and can be accessed at https://www.servotech.in/

30. SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

31. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, are given in the notes to the Financial Statements.

32. PARTICULARS OF EMPLOYEES

The details required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, KMPs and other employees of the Company, are given in Annexure-5 of this Board's Report.

During the year ended 31st March, 2024, the Company did not have any employee, who is in receipt of remuneration of Rs. 8,50,000/- per month or Rs. 1,02,00,000 per annum and hence the Company is not required to provide information under Sub rule 2 and 3 of Rule 5 of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

However, in terms of first provision of section 136(1) of the Act, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary at email id investor.relations@servotechindia.com.

33. NOMINATION AND REMUENRATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall:

i) formulate the criteria for Board membership, including the appropriate mix of Executive & Non-Executive Directors and Board Diversity;

ii) approve and recommend compensation packages and policies for Directors, Key Managerial Personnel and Senior Management Personnel;

iii) lay down the effective manner of performance evaluation of the Board, its Committees and the Directors; and

iv) such other matters as provided under section 178 of the Act and under the provisions of Listing Regulations.

The salient features of the Nomination and Remuneration Policy of the Company are outlined in the Corporate Governance Report which forms part of this Annual Report. The Policy is available on the website of the Company at: https://www.servotech.in/blog/wp-content/ uploads/2021/12/Nomination-and-Remuneration-policv.pdf.

34. RISK MANAGEMENT POLICY

Your Company has in place comprehensive risk assessment and mitigation framework, which is reviewed by the Board periodically. The Committee of Board of Directors has formulated a well-defined Policy for Risk Management to identify, assess and frame a response to threats and mitigate the various risks to our business that affects the achievement of our objectives.

More details on the Policy are given on Company's website which can be accessed through following link: https://www. servotech.in/blog/wp-content/uploads/2021/12/Risk- Management-Policy.pdf

35. DISCLOSURE UNDER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As per the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has constituted Internal Complaints Committees (ICs) at all relevant locations across India to consider and resolve the complaints related to sexual harassment. The ICs includes external members with relevant experience. The ICs, presided by senior women conduct the investigations and make decisions at the respective locations. The ICs also work extensively on creating awareness on relevance of sexual harassment issues, including while working remotely.

During the year under review, there were no complaints pertaining to sexual harassment

All new employees go through a detailed personal orientation on anti-sexual harassment policy adopted by the Company.

36. FRAUD REPORTING

There was no fraud reported during the Financial Year ended 31st March, 2024.

37. LISTING OF EQUITY SHARES

The equity shares of your Company are listed on National Stock Exchange of India Limited ("NSE") Main Board. The Annual Listing Fees for the year 2023-24 has been duly paid to the NSE.

38. DEPOSITORY SYSTEM

The Members are requested to note that as on 31st March, 2024, 99% of the Company's total paid-up share capital representing 21, 68, 37,280 shares are in dematerialized form. In view of the numerous advantages offered by the Depository System as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from National Securities Depository Limited ("NSDL') and Central Depository Services (India) Limited ("CDSL').

39. HEALTH, SAFETY AND ENVIRONMENT

Your Company has complied with all the applicable Health & Safety Standards, Environment Laws and Labor laws and has been taking all necessary measures to protect the environment and provide workers a safe work environment. Your Company is committed towards improvement in Health & Safety as well as Environmental performance by providing a Safe & healthy work environment to all its employees and co-workers.

40. HUMAN RESOURCE AND INDUSTRIAL RELATIONS

At Servotech, employees are its prime assets and a vital key to its success. The company is committed to creating a professional culture to nurture and enable people to grow in their careers alongside Company's success. The company constantly strives to strengthen its manpower in alignment with the business needs and continue to engage them through various initiatives in the realm of learning & development opportunities, reward & recognition, employee engagement activities and career growth.

41. ACKNOWLEDGMENTS

Your Directors would like to thank all the stakeholders' viz. consumers, shareholders, dealers, suppliers, business partners, bankers, employees and all other business associates for the continuous support given by them to the Company and its Management.