Somi Conveyor Beltings Ltd

Dear Members

Your Board of Directors ("the Board") take pleasure of presenting the 24^th Annual Report of your Company together along with the Audited Financial Statements for the financial year ended 31^st March 2024.

FINANCIAL PERFORMANCE

The financial performance of the Company for the Financial Year ended March 31,2024 compared with previous Financial Year is summarized below:

(Rs. in Lakhs)

The above mentioned financial performance highlights are an abstract of the Financial Statements of your Company for the Financial Year 2023-24. The detailed Financial Statements of your Company forms part of this Annual Report and are also uploaded on website of your Company i.e. www.somiinvestor.com.

During the Financial Year under review, Company's revenue from operation increased by 8.98% and it stood at Rs. 10210.69 Lakhs compared to Rs. 9369.57 Lakhs in the previous financial year. The Net Profit after Tax for the financial year amounted to Rs. 455.26 Lakhs as against Rs. 346.81 Lakhs in the previous year, resulting in increase in Profits of the Company by 31.26%. The Board is confident of higher growth in the financial year 2024- 25

SUBSIDIARY, ASSOCIATE AND JOINT VENTURE

The Company does not have any Subsidiary Company, Associate Company or any other Joint Venture; therefore, it is not required to prepare Consolidated Financial Statements.

DIVIDEND

In order to conserve the funds for the growth of the Company, the Board of Directors do not recommended any dividend for the year ended 31 March, 2024.

STATE OF THE COMPANY'S AFFAIRS (MANAGEMENT DISCUSSION AND ANALYSIS)

In terms of the provisions of Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report of your Company's affairs for the year under review is attached and forms an integral part of this Annual Report.

TRANSFER TO RESERVE

The Board has decided to retain the entire amount of profit for FY24 in the distributable retained earnings. CREDIT RATING

CRISIL Rating Limited, has assigned following credit rating to the Company in respect of long-term Bank facilities and short-term Bank facilities availed by the Company:

ANNUAL RETURN

Pursuant to Section 134 (3) (a) of the Act, the draft annual return for Financial Year 2023-24 prepared in accordance with Section 92(3) of the Act is made available on your website of the Company i.e. www.somiinvestor.com.

NUMBER OF MEETINGS OF THE BOARD

Your Company's Board of Directors met 10 (ten) times during the financial year ended March 31, 2024 in accordance with the provisions of the Act and the Rules made there under. The meetings were held on 02.05.2023, 30.05.2023 12.08.2023, 04.09.2023, 20.10.2023, 08.11.2023, 11.12.2023, 12.02.2024, 01.03.2024 and 30.03.2024 of which proper notices were given and the proceedings were properly recorded and signed in the Minutes Book as required by the Articles of Association of the Company and the Act. Detailed information is given in the Corporate Governance Report.

The intervening gap between two consecutive meetings was within the period prescribed under the Companies Act, 2013, Secretarial Standards and SEBI(Listing Obligations and Disclosure Requirements) Regulations,2015.

COMMITTEES OF THE BOARD

As required under the Act and the SEBI Listing Regulations, your Company has constituted various Committees of the Board and they focus on certain specific areas and make informed decisions in line with the delegated authority.

The following Committees constituted by the Board function according to their respective roles and defined scope:

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders' Relationship Committee

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms a part of this Annual Report. During the year under review, all recommendations made by the various committees have been accepted by the Board.

DIRECTORS AND OTHER KEY MANAGERIAL PERSONNEL

Changes in the composition of the Board of Directors and other Key Managerial Personnel

During the financial year 2023-24, following changes took place in the management of the Company:

> Mrs. Payal Daga (DIN - 07134985) was appointed as Non-Executive Non-Independent Woman Director on the Board of the Company liable to retire by rotation, in the 23^rd Annual General Meeting held on September 30, 2023.

> Mr. Om Prakash Bhansali was appointed as Chairman of the Company in place of Mr. Mahendra Rakhecha w.e.f. 8^th November, 2023.

> Mr. Om Prakash Bhansali's continuation of employment as Managing Director of the Company on attaining the age of 70 years was approved for the remaining period of his term of 5 years i.e. until 31 August, 2027 in the Extra-ordinary General meeting of the Company held on 8^th January, 2024

In accordance with the provisions of Section 152 of the Act, Mrs. Payal Daga (DIN - 07134985), Non-Executive Non-Independent Woman Director of your Company retires by rotation at the forthcoming Annual General Meeting and being eligible, offers herself for re-appointment. Approval of the Members is being sought at the ensuing Annual General Meeting for her re-appointment and the requisite details in this connection are contained in the Notice convening the meeting.

The Board of Directors on the recommendation of Nomination and Remuneration Committee has proposed appointment of Mrs. Rekha Bhandari as Non-Executive Independent Woman Director of the Company. Approval of the Members is being sought at the ensuing Annual General Meeting for her appointment and the requisite details in this connection are contained in the Notice convening the meeting.

The disclosures required pursuant to Regulation 36 of the SEBI Listing Regulations, Clause 1.2.5 of the Secretarial Standard are given in the Notice of AGM, forming part of the Annual Report.

Apart from the aforesaid changes, there was no change in Directors and Key Managerial Personnel of your Company.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

Pursuant to Regulation 25(7) of the SEBI Listing Regulations, during the financial year 2023-24, the Company imparted Familiarization Programme to Independent Directors to familiarize them about their roles, rights and responsibilities in the Company, nature of the industry in which the Company operates, review of investments of the Company, business model of the Company, Prohibition of Insider Trading Regulations, SEBI Listing Regulations, etc. The details of the familiarization programme are available on the website of the Company at www.somiinvestor.com

Further, in the opinion of the Board, all the Independent Directors fulfill the conditions specified in SEBI Listing Regulations and are independent of the management.

PERFORMANCE EVALUATION

In accordance with the Act and Regulation 4(2)(f) of the Listing Regulations, your Company has framed a Policy for Evaluation of Performance of Independent Directors, Board, Committees and other Individual Directors which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors .A questionnaire is formulated for evaluation of performance of the Board, its committees and individual Directors, after taking into consideration several aspects such as board composition, strategic orientation, board functioning and team dynamics.

An annual performance evaluation for the financial year 2023-24 was carried out by the Board of Directors and the Nomination and Remuneration Committee at their respective meetings. The questionnaires were circulated to the Board members and the Committee members of the Nomination and Remuneration Committee at the time of performance evaluation conducted at their respective meetings. The Directors and the Committee members then filled-up the questionnaire and rated the Board, its Committees and individual Directors and duly filled questionnaires were handed over to the Company Officer.

Performance evaluation of Independent Directors was conducted by the Board of Directors, excluding the Director being evaluated. The criteria for performance evaluation of Independent Directors laid down by the Nomination and Remuneration Committee include ethics and values, knowledge and proficiency, diligence, behavioral traits, efforts for personal development and independence in decision making.

Similarly, performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors of your Company at its separate meeting held on March 29, 2024. Your Directors also expressed their satisfaction with the evaluation process.

TRAINING OF INDEPENDENT DIRECTORS

All Independent Directors are familiarized with your Company, their roles, rights and responsibilities in your Company, nature of the industry in which your Company operates, business model, strategy, operations and functions of your Company through its Executive Directors and Senior Managerial Personnel. The details of programs for familiarization of Independent Directors of the Company are available on the website of your Company www.somiinvestor.com

DECLARATION OF INDEPENDENT DIRECTORS

Pursuant to Section 134(3)(d) of the Act, your Company confirms having received necessary declarations from all the Independent Directors under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations declaring that they meet the criteria of independence laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. All the Independent Directors of your Company have complied with the provisions of sub-rule (1) and (2) of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 by registering themselves under data bank of Independent Director. Your Company has also formulated a Code of Conduct for Directors and Senior Management Personnel and has obtained declarations from all the Directors to the effect that they are in compliance with the Code.

MEETING OF INDEPENDENT DIRECTORS

Your Company's Independent Directors meet at least once in every financial year without the presence of the Executive Directors or Management Personnel of your Company and the Meeting is conducted formally. During the year under review, one meeting of Independent Directors was held on March 29, 2024.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(5) of Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability hereby confirm:

a) that in the preparation of the annual accounts for the financial year ended 31st March 2024, the applicable accounting standards have been followed and that no material departures have been made from the same;

b) that 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 or loss of the Company for the year ended on that date;

c) that they 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) that 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 that such internal financial controls are adequate and operating properly; and

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

DIRECTORS' REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178

Information regarding Directors' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3)of section 178 are provided in the Corporate Governance Report.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel (KMP) of the Company as per Section 2(51) and 203 of the Companies Act, 2013 read with the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are as follows:

During the financial year 2023-24, the constitution of the Board complies with the requirements of the Act, and the SEBI Listing Regulations. There was no change in Key Managerial Personnel of your Company during the financial year 2023-24.

STATUTORY AUDITORS & AUDITOR'S REPORT

Pursuant to Section 139 of the Act read with rules made thereunder, as amended, M/s Singhvi & Mehta, Chartered Accountants (Firm Registration Number 002464W), were re-appointed as the Statutory Auditors of your Company, for the second term of five years till the conclusion of 27th Annual General Meeting (AGM) of your Company to be held in the year 2027.

The Statutory Auditors have confirmed that they are not disqualified to continue as Statutory Auditors and are eligible to hold office as Statutory Auditors of your Company.

M/s. Singhvi & Mehta, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2023-24, which forms part of the Annual Report 2023-24. The Notes to the financial statements referred in the Auditors' Report are self-explanatory. The Auditors' Report is enclosed with the financial statements forming part of this Annual Report.

The Auditors' Report does not contain any qualification(s), reservation(s) or adverse remark(s).

SECRETARIAL AUDITOR

In terms of Section 204 of the Act, the Board of Directors of your Company have appointed FCS Ira Baxi (FCS: 5456; CP: 4712), Practicing Company Secretary, Jodhpur as the Secretarial Auditor of your Company to carry out Secretarial Audit for the financial year 2023-24. Your Company has obtained Secretarial Audit Report for the Financial Year 2023-24 in the prescribed Form MR-3 from FCS Ira Baxi, Practicing Company Secretary, which forms part of the Annual Report and is appended as "Annexure - I" to this Report.

There are no qualifications, reservation or adverse remark or disclaimer made by the Secretarial auditor in the report save and except disclaimer made by them in discharge of their professional obligation.

In addition to the above Secretarial Audit and pursuant to the requirements of Regulation 24A of the Listing Regulations FCS Ira Baxi, Practicing Company Secretary, have also issued to your Company, Annual Secretarial Compliance Report for the financial year 2023-24 confirming compliance of all laws, SEBI Regulations and circulars/ guidelines issued thereunder, applicable to your Company. The Annual Secretarial Compliance Report dated May 15, 2024 issued by M/s. FCS Ira Baxi, Practicing Company Secretary has been submitted to the stock exchanges within 60 days from the financial year ended March 31,2024.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

During the year under review, the Statutory Auditors and Secretarial Auditor of your Company have not reported any instances of fraud committed in your Company by Company's officers or employees, to the Audit Committee, as required under Section 143(12) of the Act.

COST AUDIT RECORDS AND COST AUDITORS

During the year under review, in accordance with Section 148(1) of the Act, your Company has maintained the accounts and cost records, as specified by the Central Government.

In terms of Section 148 of the Act, Board of Directors of the Company has appointed M/s. Anchal Jain & Co., (FRN: 103706) Cost Accountants, as Cost Auditors of your Company to conduct cost audit for the FY 2024-25 for auditing the Cost Records relating to the Rubber and allied products.

A resolution seeking approval of the Shareholders for ratifying the remuneration payable to the Cost Auditors for FY25 is provided in the Notice of the ensuing AGM.

SHARE CAPITAL

During the year under review the issued, subscribed and paid up Equity Share Capital of the Company was 11,779,656 equity shares of Rs.10/- each. There was no change in the capital structure of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the Financial Statements.

RELATED PARTY TRANSACTIONS

All transactions with related parties are placed before the Audit Committee for its approval. An omnibus approval from Audit Committee is obtained for the related party transactions which are repetitive in nature.

All transactions with related parties entered into during the year under review were at arm's length basis and in the ordinary course of business and in accordance with the provisions of the Act and the rules made thereunder, the SEBI Listing Regulations and your Company's Policy on Related Party Transactions.

Pursuant to Section 134 of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2 is appended as "Annexure - II" to this Report.

During the year under Review, your Company had entered into contract(s)/arrangement(s)/transaction(s) with related parties which were in ordinary course of business and on arm's length basis and none of which could be considered as material in accordance with the policy of your Company on materiality of related party transactions. Further, none of the contract(s)/ arrangement(s)/transaction(s) with related parties required approval of members as the same were within the limits prescribed under Section 188(1) of the Act and the Rules framed thereunder read with the provisions of Regulation 23(4) of the Listing Regulations.

Suitable disclosures as required by the Indian Accounting Standards have been made in the notes to the financial statements. The policy on related party transactions as approved by the Board is uploaded on the Company's website www.somiinvestor. com.

Pursuant to the provisions of Regulation 23 of the SEBI Listing Regulations, your Company has filed half yearly reports to the stock exchanges, for the related party transactions.

Pursuant to Schedule V (A)(2A) of SEBI (LODR)Regulations, 2015, details of transactions that took place during the year with Related Parties are listed below:

Details of transactions with Related Parties for the period 01.04.2023 to 31.03.2024

(Rs. In Lakhs)

DEPOSIT FROM PUBLIC

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of your Company during the year under review.

CYBER SECURITY

In view of increased cyber attack scenarios, the cyber security maturity is reviewed periodically and the processes, technology controls are being enhanced in-line with the threat scenarios. Your Company's technology environment is enabled with real time security monitoring with requisite controls at various layers starting from end user machines to network, application and the data.

During the year under review, your Company did not face any incidents or breaches or loss of data breach in cyber security.

RISK MANAGEMENT

The Company recognizes that risk is an integral and inevitable part of business and it is fully committed to managing the risks proactively and efficiently. Our success as an organization depends on our ability to identify and leverage the opportunities while managing the risks. The Company has a disciplined process for continuously assessing risks, in the internal and external environment along with minimizing the impact of risks. The Company incorporates the risk mitigation steps in its strategy and operating plans. The objective of the Risk Management process is to enable value creation in an uncertain environment, promote good governance, address stakeholder expectations proactively, and improve organizational resilience and sustainable growth.

The Company has in place a Risk Management Policy which regularly identifies uncertainties and after assessing them, devises short term and long-term actions to mitigate any risk which could materially impact the Company's long-term plans. Mitigation plans for significant risks are well integrated with business plans and are reviewed on a regular basis by the senior leadership. Audit Committee has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and to ensure that all short-term and long-term implications of key strategic and business risks are identified and addressed by the management.

The Company periodically reviews and improves the adequacy and effectiveness of its risk management systems considering the rapidly changing business environment and evolving complexities and through the risk management process, aims to contain the risk within the risk appetite.

WHISTLE BLOWER POLICY/ VIGIL MECHANISM

The Company is committed to highest standards of ethical, moral, compliance and legal conduct of its business. In order to ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standard of responsibility, professionalism, honesty and integrity, the Company has established a whistle blower policy as per Section 177 (9) and (10) of the Companies Act, 2013 and Regulation 22 of the SEBI (LODR) Regulations, for the directors and employees of the Company, to report their genuine concerns. The Board has adopted the policy to deal with instances of fraud or mismanagement, if any.

The policy also provides for adequate safeguards against victimization of directors, or employees or any other person who has availed the mechanism and also provides for direct access to the Chairperson of the Audit Committee in appropriate or exceptional cases. The Company promotes ethical behavior in all its business activities and in line with the best international governance practices. The Company is committed to the high standards of Corporate Governance and stakeholder responsibility.

The Company has formulated a vigil mechanism through Whistle Blower Policy to deal with instances of unethical behavior, actual or suspected, fraud or violation of Company's code of conduct or ethics policy. The details of the policy are explained in the Corporate Governance Report and also posted on the website of the Company.

DISCLOSURE ON CONFIRMATION WITH THE SECRETARIAL STANDARDS

Your Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by The Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013 and that such systems are adequate and operating effectively.

APPLICATION / PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 ("IBC")

During the year under review, no application was made under IBC by or against your Company and no proceeding is pending under IBC.

DISCLOSURE ON ONE TIME SETTLEMENT

During the year under review, the Company has not entered into any onetime settlement with the Banks or Financial Institutions who have extended loan or credit facilities to the Company.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The "Code of Fair Disclosure, Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders" has been adopted and has been disclosed on the website of the Company at www.somiinvestor.com.

All the Directors and the designated employees have confirmed compliance with the Code.

INTERNAL FINANCIAL CONTROL

The Company's Board of Directors holds responsibility for ensuring and establishing internal financial controls. Within the Company, internal control mechanisms for business processes, operational efficiency and compliance with all applicable rules and regulations are firmly in place. The Board also evaluates the adequacy and effectiveness of such controls. Policies, procedures, control structures and management systems align with the concept of Internal Financial Controls under the Companies Act, 2013, established at both entity and process levels to ensure compliance, regulatory adherence and accurate financial and operational data recording.

Regular internal inspections and audits are conducted to ensure the efficient execution of obligations. A comprehensive assessment of the Company's internal controls, accounting procedures and policies is undertaken. Senior Management evaluates and certifies the effectiveness of internal control mechanisms over financial reporting, adherence to the code of conduct and Company policies and compliance with established procedures in financial or commercial transactions, especially in cases of personal interest or potential conflicts of interest.

The Company has a clearly defined Governance, Risk & Compliance Framework aligned with Policies, Standard Operating Procedures (SOP),Financial & Operational Delegation of Authority (DOA).Our ERP system facilitate mapping with role based authority to business & functional team to ensure smooth conduct of their operations across the organisation. The internal control system ensures compliance with all applicable laws and regulations.

The Company has well established Internal audit function. Risk based audit are performed for all businesses, functions & locations (Plants, warehouse, Head office).

The internal financial control process, supports orderly and efficient conduct of its business including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND Transfer of Equity Shares:

Pursuant to the provisions of Section 124(6) of the Act and the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all the equity shares of any Company in respect of which dividend amounts have not been paid or claimed by the shareholders for seven consecutive years or more are required to be transferred to demat account of the Investor Education and Protection Fund Authority (IEPF Account).

During the year under review, 15671 equity shares have been transferred to IEPF Authority under Section 125 (6) of the Companies Act, 2013 and the IEPF (Accounting, Audit, Transfer and Refund) Rules, 2016.

Transfer of Unpaid/Unclaimed Dividend:

Further, pursuant to the provisions of Section 124(5) of the Act, the dividend which remained unclaimed/ unpaid for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government.

During the year under review, unclaimed dividend amount of Rs. 115,509.00 of the Company for the Financial Year 2015-16 (Final) has been transferred to IEPF established by the Central Government pursuant to Section 125 of the Companies Act, 2013 on 4^th December, 2023.

Further, the unpaid final dividend amount pertaining to the financial year 2017-18 will be transferred to IEPF during the Financial Year 2025-26.

CORPORATE SOCIAL RESPONSIBILITY

Your Company believes in being socially accountable to all its stakeholders and enhancing its positive impact on Society and has always laid emphasis on progress with social commitment. We believe strongly in our core values of empowerment and betterment of not only the employees but also our communities. The goal of the company's CSR programmes is to raise community standards of living while generating long-term benefit for all stakeholders. The corporate social responsibility policy of the company lays out instructions for how those activities should be carried out. The Company implements its corporate social responsibility programmes either independently or in partnership with qualified implementing agencies registered with the Ministry of Corporate Affairs that work closely with public systems and partners. The Company addresses societal challenges through societal development programmes and maintains a focus on improving quality of life.

The company is committed to acting in the best interests of its stakeholders and with a sense of purpose by engaging in socio-economic development, which has always been integral to the company's strategic objectives. Through its Corporate Social Responsibility, the company envisions an enlightened, equitable society in which every individual realises her/his potential with dignity through creating transformative, efficient and lasting solutions to their development challenges. Activities in the areas of education, healthcare, communities, ecology, and the environment are all included in the company's CSR and sustainability programmes and practises.

In pursuance of the Corporate Social Responsibility Policy and in line with the requirement of the Companies Act, 2013, every company has to spend 2% of the average net profits of the Company for the preceding three years towards the Corporate Social Responsibility activities as stated in the Companies Act, 2013. In view of the net profit before tax for the last 3 years remains less than 5 crore based on the computation as per Section 135 of the Companies Act, 2013, there is no obligation or requirement for the Company to make a CSR contribution during the financial year 2023-2024.

As required under Section 135 of the Companies Act, 2013 and to demonstrate the responsibilities towards Social upliftment in structured way, the Company has formed a Policy to conduct the task under CSR, during the year. The Board has approved a policy for Corporate Social Responsibility and same has been available on the website i.e www.somiinvestor.com. The Annual Report on the CSR activities in the format prescribed under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is set out in Annexure-III to this Report.

CORPORATE GOVERNANCE

The governance structure of the company is centered on principles of openness, honesty, professionalism, and accountability, all of which contribute to the efficient and transparent execution of the company's strategy and the creation of long-term value for its stakeholders, including its shareholders, partners in business, and employees.

The Board is responsible for and committed to sound principles of Corporate Governance in the Company. It continues to set high standards of governance which not only meet the applicable legislation but go beyond in many areas of our functioning. The Board has ultimate responsibility for the development of strategy, material acquisitions and divestments, material capital expenditure, the Company's capital structure and other financing matters, oversight of policies, procedures and internal controls, setting and monitoring the Company's culture and promoting ethical behavior.

Additionally, the Company makes sure that it continuously improves and strictly abides by governance best practises, not only to increase long-term shareholder value but also to protect the rights of the minority. The Company believes that it is its fundamental duty to provide accurate and timely information on the Company's performance, management, and governance.

The shareholders, board, and executive management make up the three tiers of the company's governance structure. It not only promotes enhanced corporate autonomy, performance management, and the growth of business leaders, but also provides higher management accountability and credibility.

A separate report on Corporate Governance Compliance as stipulated in regulations 17 to 27, clauses (b) to

(i) of sub-regulation (2) of regulation 46 and paragraph C, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included and forms part of the Annual Report along with the requisite Certificate regarding compliance of the conditions of Corporate Governance as stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The matters pertaining to industry structure and developments, opportunities and threats, segment-wise/team- wise performance, outlook, risks and concerns, internal control systems and adequacy, discussion on financial and operational performance are detailed in the Report. The Management Discussion and Analysis report for the year under review and as stipulated under Schedule V and Regulation 34(2)(e) of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 is presented in a separate section, forming part of the Annual Report.

SHARE REGISTRY ACTIVITIES

All work related to share registry is handled by Link Intime India Private Limited, a Registrar and Share Transfer Agent registered with SEBI.

LISTING WITH STOCK EXCHANGE

Equity shares of your company continue to remain listed with National Stock Exchange of India Limited and BSE Limited. There are no arrears in payment of listing fees and the stipulated listing fee for financial year 2023-24 has been paid.

DEMATERIALIZATION OF SHARES

The shares of your company are traded in dematerialized form either with the National Securities Depository Limited (NSDL) or the Central Depository Services (India) Limited (CDSL).

INSURANCE

Assets of your Company remain adequately insured against various perils.

HEALTH, SAFETY AND ENVIRONMENT

Ensuring the safety and well-being of our employees is of paramount importance. We dedicate significant efforts to uphold high standards of Health, Safety, and Environment (HSE) in the workplace, recognizing that any lapses in these areas could have serious consequences.

As a firm commitment to Health, Safety and Environment (HSE), we maintain strict adherence to health and safety protocols across all our plants and office locations. We regularly conduct health and safety training for employees and workers, supplemented by periodic audits and surprise checks to ensure full compliance with all protocols.

The goal of Hazard identification is to find and record all possible hazards that may be present at workplace and ensuring mitigation or bringing the risk to as low as reasonably possible or acceptable for all routine processes. For non-routine processes, we have Permit to Work system which ensures that adequate measures are taken before initiating any non-routine activity tasks.

While an accident may cause damage to reputation and incite potential legal actions by local authority, practicing / delivering best in class HSE performance has created positive differences to all direct and indirect stakeholders of the company. It has enhanced the brand value significantly as well.

In pursuance to HSE Policy your Company's management has devoted all their efforts to protect and maintain safety environment in the Company. The Company has taken all possible measures to segregate hazardous and non-hazardous substances. Health, Safety and Environment involves proactive approach to create safe working environment, continuous safety education and training, periodic review of programs and evaluation of incidents.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING FINANCIAL POSITION OF THE COMPANY FROM FINANCIAL YEAR END AND TILL THE DATE OF THIS REPORT

No material changes and commitments affecting the financial position of your Company have occurred between the end of the financial year of the Company to which the financial statements relate and on the date of this report.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required under Section 197 of the Act and the Rules made there-under, in respect of employees of the Company, is as follows:-

(a) the ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;

(b) the percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year;

(c) the percentage increase in the median remuneration of employees in the financial year: 11.76%

(d) the number of permanent employees on the rolls of company:102

(e) the explanation on the relationship between average increase in remuneration and company performance:

There is no direct relation between the average remuneration of the employees vis-a-vis Company Performance

(f) comparison of the remuneration of the Key Managerial Personnel against the performance of the company:

(g) variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year:

(h) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentile increase in the salaries of employees other than the managerial personnel is 11.81% which is slightly lower than the percentile increase in the remuneration of managerial personnel.

(i) Comparison of each remuneration of the Key Managerial Personnel against the performance of the Company

(j) the key parameters for any variable component of remuneration availed by the directors:

No variable remuneration is provided to the executive directors.

(k) the ratio of the remuneration of the highest paid director to that of the employees who are nol directors but receive remuneration in excess of the highest paid director during the year: NIL

(l) affirmation that the remuneration is as per the remuneration policy of the Company

The Company's remuneration policy is driven by the success and performance of the individua employees of the Company. Through its compensation package, the Company endeavors to attract, retain, develop and motivate a high performance staff. The Company follows a compensation mix of fixed pay, benefits and performance based variable pay. Individual performance pay is determined by business performance and the performance of the individuals is measured through the annual appraisal process The Company affirms remuneration is as per the remuneration policy of the Company.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company expects all its employees to act in accordance with the highest professional and ethical standards upholding the principles of integrity and compliance at all times. In this regard, expectations around compliance are communicated to the employees through multiple channels. The Company as an equal opportunity employer seeks to ensure that the workplace is free of any kind of harassment or inappropriate behaviour. Comprehensive policies and procedures have been laid down, to create an environment where there is respect and dignity in every engagement. The Company has adopted zero tolerance for sexual harassment at the workplace. This is imbibed in the Company's culture.

As an endeavour to educate and empower employees and others within the organisation regarding POSH, virtual and classroom awareness sessions were conducted throughout the year. Additionally, an e-learning module is also in place for easy learning.

The Company has formulated a policy on prevention, prohibition and redressal of sexual harassment at the 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 required awareness is created by communicating the essence of the policy to all employees at regular intervals through assimilation and awareness programs.

The Company has constituted an Internal Committee (IC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Committee is headed by an Independent person.

The following are the summary of the complaints received and disposed off during FY 2023-24:

RESEARCH AND DEVELOPMENT

Research and development are continual operations that play a vital role in supplying inputs for creating new products, coming up with energy-saving solutions, improving production processes, and improving product quality.

The Company is actively engaged in tapping these fast-emerging opportunities supported by investments in manufacturing infrastructure, registrations, research and development to expand the addressable market with wider active ingredient portfolio and enhanced customer base.

The Company is into regular advancement of their machineries, and currently planning for increasing its production capacity for which order for few machineries have also been placed.

Research and Development team constantly focus on producing innovative products that cater to evolving industry needs.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, regarding conservation of energy, technology absorption and foreign exchange earnings and outgo, are as follows:

(A) CONSERVATION OF ENERGY

a. Energy Conservation Measures taken

Continuous and substantial efforts were made to ensure optimum consumption of fuel and electricity at all the plants of the company. These efforts resulted in general improvement in the energy consumption of the business.

b. Capital Investment on energy conservation equipments NIL

FORM A

I. Disclosure of Particulars with respect to Conservation of Energy

II. Consumption per unit of Production - unit (KMH/MT)

(B) TECHNOLOGY ABSORPTION

FORM B

Disclosure of Particulars with respect to Technology Absorption

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

Your company continues to upgrade its technology to ensure that it remains a frontrunner in its field of operations.

(C) FOREIGN EXCHANGE EARNINGS AND OUTGO

(Rs. In Lakhs)

ACKNOWLEDGEMENT

Your Directors are highly grateful for all the guidance, support and assistance received from the Government of India, Governments of various states in India, concerned Government Departments, Financial Institutions and Banks. Your Directors thank all the esteemed shareholders, customers, suppliers and business associates for their faith, trust and confidence reposed in your Company.

Your Directors wish to place on record their sincere appreciation for the dedicated efforts and consistent contribution made by the employees at all levels, to ensure that your Company continues to grow and excel.

It will be our endeavor to build and nurture strong links with the trade based on mutual benefits, respect for and co-operation with each other, consistent with consumer interests. The Board look forward to continuance of the supportive relations and assistance in the future.