Ador Welding Ltd

DIRECTORS' REPORT

To,

The Members,

The Directors take immense pleasure in presenting the Seventy First (71^st) Annual Report of the Company and the Audited Statements of Accounts for the financial year ended 31^st March, 2024.

1. CORPORATE OVERVIEW

Your Company, Ador Welding Limited (ADOR) was incorporated in the year 1951 and has come a long way to become one of India's leading players in the welding industry. Your Company's Vision is "Creating the Best Welding Experience".

ADOR has a huge spectrum of products offering and aims to provide "Complete Welding Solutions" to the "World of Manufacturing" for enhancing their operational efficiency.

Our presence is there across over fifteen (1 5) countries and our corporate headquarter is based in Mumbai.

2. FINANCIAL PERFORMANCE & THE STATE OF COMPANY'S AFFAIRS

3. DIVIDEND & RESERVES

The Board of Directors, in view of the proposed amalgamation of Ador Fontech Limited with our Company, declared Interim Dividend of 185 % (i.e. @ Rs. 18.50 per Equity Share of face value of Rs. 10/- each) for the Financial Year (FY) 2023-24, payable in FY 2024-25.

The total amount of Dividend, to be disbursed for FY 2023-24, will be Rs. 2,516 Lakhs, subject to applicable TDS. Further, the Dividend amount will be paid out of the profits of the Company, within 30 days, as per applicable law.

The dividend payment will be in accordance with the Dividend Distribution Policy ("Policy") of the Company. The said policy is available on the website of your Company at https://www. adorwelding.com/wp-content/uploads/2021/07/ Dividend-Distribution-Policv.pdf

The Interim Dividend for FY 2023-24 will be paid to those Shareholders and Beneficial Owners, whose names appear in the Register of Members (RoM), as on the cut-off/record date for dividend payment i.e. Wednesday, 15^th May, 2024.

The Board recommends transfer of 10 % of its Net Profits to General Reserve.

Considering the interim dividend payment of Rs. 18.50 per equity share, the Board has decided not to declare any additional final dividend for FY 2023-24. Hence the Interim Dividend of Rs. 18.50 per share will be the Final Dividend for FY 2023-24.

4. SHARE CAPITAL

The paid-up Equity Share Capital of the Company as at 31^st March, 2024 stood at Rs. 1,359.85 Lakhs. During the financial year under review, there was no change in the issued, subscribed and paid-up share capital of the Company. Further, the authorized share capital of the Company increased in FY 2022-23 from Rs. 3,000.00 Lakhs to Rs. 3,300.00 Lakhs i.e. by Rs. 300.00 Lakhs, pursuant to the amalgamation of Ador Welding Academy Private Limited (Wholly Owned subsidiary of the Company) with the Company, effective from 01^st April, 2021.

Confirmations:

a. During the year under review, the Company has not:

i. issued any shares, warrants, debentures, bonds, or any other convertible or nonconvertible securities.

ii. issued any equity shares with differential rights as to dividend, voting or otherwise.

iii. issued any sweat equity shares to its Directors or employees.

iv. made any change in voting rights.

v. reduced its share capital or bought back shares.

vi. changed the capital structure, resulting from restructuring.

vii. failed to implement any corporate action.

b. The Company's securities were not suspended for trading during the year.

c. The disclosure pertaining to explanation for any deviation or variation in connection with certain terms of a public issue, rights issue, preferential issue, etc. is not applicable to the Company.

5. FINANCE & ACCOUNTS

During the financial year under review, there was no revision in the Credit Rating of the Company. The Rating Agency CARE maintained "A+" (Single A Plus; Outlook: Stable) rating for the Company's long term borrowings and "A1+" (A One Plus) rating for the Company's short term borrowings. Whereas CRISIL Agency assigned rating CRISIL "A+/Stable" for Long Term borrowings & CRISIL A1 for Short Term borrowings.

As mandated by the Ministry of Corporate Affairs (MCA), the financial statements for the financial year ended 31^st March, 2024 have been prepared in accordance with the Indian Accounting

Standards (Ind AS), notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as "the Act"), read with the Companies (Accounts) Rules, 2014, as amended from time to time. The estimates and judgements relating to the Financial Statements are made on a prudent basis, so as to reflect a true & fair form and substance of transactions and reasonably present the Company's state of affairs, profits & cash flows for the financial year ended 31^st March, 2024.

The Notes to the Financial Statements adequately cover the Audited Statements and form an integral part of this Report.

6. OPERATIONS

In FY 2023-24, the total Sales & Other Income increased by 14.48%, as compared to last FY 2022-23. The year ended with Sales & Other Income of Rs. 89,690 Lakhs. (Rs. 78,343 Lakhs)*.

The Company's Net Sales and Other Income during FY 2023-24 comprised the following:

6.1 Welding Consumables at Rs. 67,780 Lakhs (Rs. 61,449 Lakhs)*

6.2 Equipment and Welding Automation at Rs. 17,131 Lakhs (Rs. 11,504 Lakhs)*

6.3 Flares & Process Equipment Business at Rs. 3,472 Lakhs (Rs. 4,723 Lakhs)*

6.4 Other Income of Rs. 1,307 Lakhs mainly comprised of forex gain, interest, rent & export incentives etc. (Rs. 667 Lakhs)*

(*Figures in brackets indicate previous year)

7. CAPEX

The Company incurred CAPEX of Rs. 1,514 Lakhs during FY 2023-24. The Capital work-in-progress as at 31^st March, 2024 was Rs. 2,537 Lakhs. CAPEX planned for FY 2024-25 is approximately Rs. 2,800 to Rs. 3,500 Lakhs, mainly for the following:-

a. Automation/modernization at Consumables and Equipment Plants.

b. Plant & Machinery for capacity expansion of certain products, and also for improvement of "productivity & in-process quality".

c. Replacement of Old Machineries.

d. Upgradation of R&D Infrastructure.

e. Information Technology (IT) upgradation, digitalization & Compliances.

f. Replacement of Vehicles.

8. PERFORMANCE OF THE SUBSIDIARY COMPANY

During the financial year under review, the Company did not have any subsidiary. However, the Board of Directors of the Company has approved a Policy for determining material subsidiaries, which is in line with the provisions of the Securities & Exchanges Board of India (Listing Obligations & Disclosure Requirments) Regulations, 2015, as amended from time to time. The said Policy has been uploaded on the Company's website at the following weblink: https://www. adorwelding.com/wp-content/uploads/2021 /07/ Policv-for-determining-Material-Subsidiarv.pdf

9. CONSOLIDATED FINANCIAL STATEMENT

Since the Company had given effect to the Scheme of Amalgamation (Merger by Absorption) of Ador Welding Academy Private Limited ("AWAPL") with Ador Welding Limited ("AWL") from 16^th March, 2023, the consolidated financial statement of the Company and its subsidiary for FY 2023-24 is not applicable.

10. COMPOSITE SCHEME OF ARRANGEMENT

The Scheme of Amalgamation (Merger by Absorption) of Ador Fontech Limited with Ador Welding Limited and their respective shareholders, under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("the Scheme"), was considered and approved by the Board of Directors at its meeting held on 31^st May, 2022.

The Hon'ble National Company Law Tribunal (NCLT), Mumbai Bench, delivered/pronounced an order on 18^th May, 2023, directing that the meeting of the unsecured as well as secured creditors be dispensed with and notices be issued to the unsecured creditors, with/having outstanding amount of more than Rs. 1.00 Lakh in value, for raising their observations/objections/queries/representations, if any.

The order dated 18^th May, 2023 also directed the Company to hold the Meeting of the equity shareholders of the Company for seeking their approval on the proposed scheme of amalgamation. Accordingly, NCLT convened Meeting of equity shareholders was held on Thursday, 10^th August, 2023. The scheme was approved by requisite majority.

Thereafter, the Company has complied with all the compliances and formalities and the Petition for approving the scheme of Amalgamation, under Section 230 to Section 232 of the Companies Act, 2013 was filed with the Hon'ble NCLT, Mumbai bench, as all the related documentations were in place.

The Company is awaiting the amalgamation order from NCLT, Mumbai Bench.

11. RISK MANAGEMENT

Given the diversified scale of operations, your Company has formulated an Enterprise Risk Management (ERM) framework to manage various financial & non-financial risks, operational & nonoperational risks, amongst other risks. The Board takes the responsibility of the overall process of risk management throughout the organization.

The ERM Policy of the Company helps to continuously assess & monitor the risks assumed by the Company. The processes are in place for identifying, evaluating and managing the risks. Based on the ERM Policy, the Board hereby states that there are no elements of risks, which threaten the existence/going concern status of the Company.

Further, since your Company falls in "Top 1000 Companies", based on market capitalization, since 31^st March, 2021, a Risk Management Committee was constituted in FY 2021-22 to oversee implementation of the Risk Management Policy, to monitor & evaluate risks, basis appropriate methodology, processes & systems and to keep the Board of Directors informed and recommend the actions, to be taken, if any. The said policy is uploaded on the Company's website at the following web link: https://www.adorwelding.com/ wp-content/uploads/2021/07/Risk-Management- Policy.pdf

12. RELATED PARTY TRANSACTIONS (RPTs)

During FY 2023-24, the Company entered into certain Related Party Transactions, in the ordinary course of business and on arms' length basis, with prior approval of the Audit Committee. Omnibus approvals are obtained on a quarterly basis for all the transactions, which are foreseeable & repetitive in nature and the details of all the related party transactions are placed before the Audit Committee and the Board for review & approval, on a quarterly basis.

During the financial year under review, the Company did not enter into any transaction, contract or arrangement with the related parties, that could be considered material under Regulation 23(4) of SEBI (LODR) Regulations, 2015 or Section 188 of the Companies Act, 2013.

All transactions entered into with the Related Parties during the financial year 2023-24 under review, were on arms' length basis and were not material. Hence, disclosure pursuant to Section 1 34(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not required. Further, there are no materially significant Related Party Transactions executed between the Company & its Promoters, Directors, Key Managerial Personnel or other designated persons, that may have a potential conflict, with the interest of the Company, at large.

None of the Directors have any pecuniary relationships or transactions vis-a-vis the Company, except remuneration, commission, sitting fees and reimbursement of expenses, to the extent applicable. All Related Party Transactions are given/mentioned in the notes to accounts. The Company has developed a framework through Standard Operating Procedures (SOPs), for the purpose of identification and monitoring of such Related Party Transactions.

A detailed note on procedure adopted by the Company in dealing with contracts and arrangements with the related parties has been provided in the Report on Corporate Governance on page no. 42.

During the year, the Company amended its RPT Policy in order to align with the provisions of the amended SEBI (LODR) Regulations, 2015, which is reviewed by the Audit Committee & approved by the Board of Directors in a timely manner and as & when necessary. The said RPT policy is available on the Company's website at https://www. adorwelding.com/wp-content/uploads/2024/02/ RPT-Materialitv-Policv-2023-24.pdf

13. ANNUAL RETURNS

Pursuant to Sections 92 & 134(3) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, as amended, the draft of Annual Return for FY 202324 in e-form MGT-7 is available on the Company's website: https://www.adorwelding.com/wp-content/uploads/2024/06/website-MGT-7-1.pdf

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Under the "Corporate Social Responsibility" (CSR) drive, the Company has spent an amount of Rs. 95.19 Lakhs during FY 2023-24, out of its budgeted annual CSR expenditure of Rs. 94.83 Lakhs & has spent Rs. 0.83 Lakh, out of Rs. 10.50 Lakhs parked in the Unspent Corporate Social Responsibility Account (UCSR) for an "Ongoing Project". Accordingly, the balance in UCSR account stands "NIL" as on 31^st March, 2024. The various projects/initiatives, undertaken by the Company, were in the following areas:

a. Promoting education amongst children, women, elderly and differently abled, including special education & employment enhancing vocational skills, especially skill development and encouraging safety practices in welding & allied fields for economically challenged/financially weaker sections of the Society.

b. Empowering women towards individual and professional development opportunities.

c. Promoting healthcare, sanitation & hygiene for the non-privileged/underprivileged.

Your Company understands its duties towards the society and considers social responsibility as an integral part of its operations. Your Company tries to ensure that its CSR initiatives have a meaningful impact on the society at large & that the contribution made by it, reaches the beneficiary at the earliest, with the aim to create a long-term positive impact.

The Company is committed to continuously explore new opportunities, in alignment with its CSR philosophy & policy and strives to create a positive impact on the society, through its CSR initiatives.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out, in a format prescribed in the Companies (CSR Policy) Rules, 2014, as amended from time to time, in Annexure - I to this Report. The CSR Policy is also available on Company's website at URL: https://www.adorwelding.com/wp-content/ uploads/2022/05/CSR-Policv-FY-2022-23.pdf

The composition of the CSR Committee is covered under the Corporate Governance Report, which is annexed to this Report as Annexure - III.

Brief on "Ador Foundation"

"Ador Foundation" is a social initiative, undertaken by all Ador Group Companies, collectively, from FY 2022-23 onwards. The mission of the Foundation is to take Ador Group's socially conscious legacy forward, through initiatives in the field of Education, Women Empowerment, Skill-Development & Health Care, which are also considered as four pillars of the foundation. All the projects are personally vetted by the personnel of the Foundation & by at least two of our Directors and to ensure that the said projects are good, genuine and beneficial to the underprivileged society at large. Ador believes in doing well by giving good. It is our firm belief that the long-term success of a corporate depends on giving back to the society it operates in and ensuring its operations are sustainable.

15. LOANS, GUARANTEES & INVESTMENTS

The details of Loans, Guarantees & Investments, covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the Financial Statements, forming part of this Annual Report.

16. FIXED DEPOSITS

Your Company had no opening balances of fixed deposits. Further, the Company has not accepted or renewed any deposits, including from the public, and, as such, no amount of principal or interest was outstanding as of the Balance Sheet date, within the meaning of Section 73 and/or Section 74 of the Companies Act 2013, read with the Companies (Acceptance of Deposits) Rules, 2014.

17. SECRETARIAL STANDARDS (SS)

Your Company has complied with all the applicable Secretarial Standards (SS), issued by the Institute of Company Secretaries of India (ICSI), from time to time.

18. INSURANCE

All the properties/assets of the Company are adequately insured.

19. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE

The information required under Section 134(3) (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 with respect to the conservation of energy, technology absorption & foreign exchange earnings/outgo is annexed hereto as Annexure - II.

20. CORPORATE GOVERNANCE

As per the Listing Agreements executed with the Stock Exchanges, the Company has been following the Corporate Governance Code since FY 2001-02. Your Company has strived to comply with all the requirements of Good Corporate Governance practices for the period 01 st April, 2023 to 31st March, 2024 (i.e. FY 2023-24), pursuant to Regulation 27(2) of SEBI (LODR) Regulations, 2015. As per Regulation 34(3) read with Schedule V to SEBI (LODR) Regulations, 2015, a separate section on the Corporate Governance practices, followed by the Company, together with Corporate Governance Compliance Certificate received from M/s. N. L. Bhatia & Associates, Practicing Company Secretaries, Secretarial Auditors of the Company, confirming compliance, is forming an integral part of this Report, which is annexed hereto as Annexure - III.

The Management Discussion and Analysis (MDA) Report, as stipulated under Schedule V to SEBI (LODR) Regulations, 2015, is also annexed to this Report as Annexure - IV.

21. SIGNIFICANT & MATERIAL REGULATORY ORDERS

During FY 2023-24, there were no significant orders passed against the Company by any regulators or courts or tribunals, impacting the going concern status and the Company's operations, in future. However, Members attention is drawn to the Statement on Contingent Liabilities and Commitments in the Notes, forming part of the Financial Statement.

There was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.

22. NOMINATION, REMUNERATION & BOARD DIVERSITY POLICY

The Board of Directors has framed a policy, on the recommendation of the Nomination & Remuneration Committee (NRC), which lays down a framework in relation to appointment and remuneration of its Directors. The Policy includes criteria for determining qualifications, positive attributes, independence of Directors etc., as required under the provisions of Section 178(3) of the Companies Act, 2013 and SEBI (LODR) Regulations 2015. The Policy also broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to the Executive & the Non-Executive Directors. The said policy has been posted on the website of the Company at https://www.adorwelding.com/wp-content/ uploads/2021 /07/criteria_for_pavment_to_NEDs. pdf

In case of re-appointment of Non-Executive & Independent Directors, NRC and the Board takes into consideration the performance of the Directors, based on the Board evaluation and his/her engagement level during his/her previous tenure.

The details of the Remuneration Policy for Directors, are explained in the Corporate Governance Report, annexed hereto as Annexure - III.

The Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, regional and industry experience, cultural and geographical background, age, ethnicity, race, gender, knowledge and skills including expertise in financial, diversity, global business, leadership, information technology, mergers & acquisitions, Board service and governance, sales and marketing, Environmental, Social & Governance (ESG), risk management, cybersecurity and other domains, which will ensure that the Company retains its competitive advantage. The Board Diversity Policy adopted by the Board sets out its approach to diversity. The policy is available on our website, at https://www.adorwelding.com/wp-content/ uploads/2023/09/Policy-on-Diversity-of-Board-of- Directors.pdf

23. INDEPENDENT DIRECTORS

All the Independent Directors of the Company have given declarations under Section 149(7) of the Act, stating that they meet the criteria of independence, as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015. In terms of Regulation 25(8) of SEBI (LODR) Regulations, 2015, the Independent Directors have confirmed 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 judgement and without any external influence. They have also given declaration under Rule 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, that their profile is uploaded/registered in the databank, as maintained by the Indian Institute of Corporate Affairs (IICA), within the stipulated time. Further, the Independent Directors have also completed their KYC confirmation on the MCA website.

Pursuant to Rule 8(5)(iii)(a) of the Companies (Accounts) Rules, 201 4, in the opinion of the Board, the Independent Directors are competent, experienced and are the persons of expertise (including the proficiency), having positive attributes, standards of integrity, ethical behavior, qualifications & independent judgement.

Your Company has in all 06 (six) Independent Directors, including 01 (one) Woman Independent Director, as on 31^st March, 2024. The Independent Directors met on 01^st February, 2024, without the presence of the Non-Independent Directors and Members of the Management, as required under SEBI (LODR) Regulations, 2015 and the Companies Act 2013, to discuss on various important matters & evaluate the working culture in the Company/operations of the Management (Whole-Time Directors & KMPs).

24. DIRECTORS & KEY MANAGERIAL PERSONNEL

During FY 2023-24 the following changes occurred in the composition of the Board of Directors of the Company:

a. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee at their meeting held on 30^th May, 2023, re-appointed Mr. Aditya T. Malkani (DIN :01585637) as the Whole-Time Director, designated as the Managing Director of the Company for a period of three (03) years w.e.f 14^th September, 2023, subject to the approval of the Shareholders. The appointment of Mr. Aditya T. Malkani was thereafter ratified by the Shareholders at the subsequently held 70^th Annual General Meeting for FY 2022-23 on Wednesday, 09^th August, 2023.

b. In accordance with the provisions of Section 152 of the Act and the Company's Articles of Association (AoA), Ms. Tanya H. Advani (DIN: 08586636), Non-Executive Director, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers herself for reappointment. The Board recommends her reappointment for consideration of the Members of the Company at the forthcoming Annual General Meeting. The brief profile of Ms. Tanya H. Advani is given in the Notice convening 71^st Annual General Meeting.

c. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee at their meeting held on 01 ^st February, 2024, re-appointed Mrs. Ninotchka Malkani Nagpal (DIN: 00031985) as the Whole-Time Director, designated as the Executive Chairman of the Company for a period of three (03) years w.e.f. 07^th May, 2024, subject to the approval of the Shareholders, considering her rich experience in finance, Business and Economics as well as her long term association with the Company/Ador Group of almost 26 years. According to the Company's Articles of Association (AoA) & Section 152(6), Mrs. Ninotchka Malkani Nagpal is liable to retire by rotation.

The brief profile of Mrs. Ninotchka Malkani Nagpal is given in the Notice convening the 71^st Annual General Meeting. In the interest of the Company's continued prosperity and well-being, the Board recommends her re-appointment as the Whole Time Director (Executive Chairman) of the Company at the ensuing Annual General Meeting.

d. Mrs. Nita Dempo Mirchandani (DIN: 01103973) is a Non-Executive & Woman Independent Directors of the Company. She was appointed as Independent Director on the Board, under the Companies Act, 2013, on 01^st April, 2020. Section 1 49 of the Companies Act, 201 3 provides that an Independent Director shall hold office for a term of upto 05 (five) consecutive years and shall be eligible for re-appointment on passing a Special Resolution by the shareholders of the Company for a second term of upto 05 (five) consecutive years i.e. holding office up to 02 (two) consecutive terms, whose term of office shall not be liable to retire by rotation.

In terms of Section 149 and other applicable provisions of the Companies Act, 2013, Mrs. Nita Dempo Mirchandani, being eligible, have offered herself for re-appointment and is proposed to be re - appointed as an Independent Director, on the recommendation of the Nomination & Remuneration Committee and on the basis of the reports/results/outcome or performance evaluation, for a second term of 05 (five) consecutive years, commencing from 10^th November, 2024 upto 09^th November, 2029. The brief profile of Mrs. Nita Dempo Mirchandani is given in the Notice convening 71^st Annual General Meeting.

Notice had been received from a Member proposing candidature of Mrs. Nita Dempo Mirchandani as candidate to the office of Independent Director of the Company. In the opinion of the Board, she satisfies the conditions, specified in SEBI (LODR) Regulations, 2015 and the Companies Act, 2013 along with the rules made thereunder, for her re-appointment and is independent of the Management. The Board believes that her continued association would be of immense benefit to the Company and it is desirable to continue to avail her services as an Independent Director.

e. In terms of the Section 149(10) & 149(11) of the Companies Act, 201 3 and Regulation 25(3) of SEBI (LODR) Regulations, 2015, the Independent Directors shall hold office for a term up to 05 (five) consecutive years, but shall be eligible for re-appointment for another term of 05 (five) consecutive years on passing of a special resolution. Mr. Piyush Kumar Gupta (DIN: 00963094), Mr. Rakesh Narain Sapru (DIN: 02332414) & Mr. K. Digvijay Singh (DIN: 00004607), served as Non-Executive & Independent Directors on Board of the Company from 28^th July, 2014 and their respective tenure will expire on 27^th July, 2024. In view of this, they will cease to act as Independent Directors of the Company w.e.f. 28^th July, 2024 & shall be eligible for appointment only after the expiration of 03 (three) years of ceasing to become Independent Directors. Further, they shall not be associated with the Company in any other capacity, either directly or indirectly during the said period of 03 (three) years.

f. At the end of the financial year, the Board of Directors, on the recommendation of the Nomination & Remuneration Committee appointed Mr. Santosh Janakiram Iyer (DIN: 06801226) as an Additional Director (Non-Executive & Independent) with effect from 28^th July, 2024. In terms of Section 161 of the Act, Mr. Santosh Janakiram Iyer holds office up to the date of ensuing Annual General Meeting. The Company has received requisite notice in writing from a Member proposing his name for the office of Director. The Board recommends the appointment of Mr. Santosh Janakiram Iyer as a Non-Executive & Independent Director, for the approval by the Members of the Company. The brief profile of Mr. Santosh Janakiram Iyer is given in the Notice convening 71^st Annual General Meeting.

In the opinion of the Board, Mr. Santosh Janakiram Iyer satisfies the conditions specified in SEBI (LODR) Regulations, 2015 and the Companies Act, 2013 along with the rules made thereunder, for his appointment as an Independent Director of the Company and he is independent of the Management. The Board believes that his association would be of immense benefit to the Company and it is desirable to avail his services as an Independent Director for the first term of 05 (five) consecutive years. He shall not be liable to retire by rotation. In the interest of the Company's continued prosperity and well-being, the Board recommends his appointment as an Independent Director at the ensuing Annual General Meeting.

g. At the end of the financial year, the Board of Directors, on the recommendation of the Nomination & Remuneration Committee, appointed Mr. Jitendra Hiru Panjabi (DIN: 01 259252) as an Additional Director (Non- Executive & Independent) with effect from 28^th July, 2024. In terms of Section 161 of the Act, Mr. Jitendra Hiru Panjabi holds office up to the date of ensuing Annual General Meeting. The Company has received requisite notice in writing from a Member proposing his name to the office of Director. The Board recommends the appointment of Mr. Jitendra Hiru Panjabi as a Non-Executive & Independent Director, for the approval by the Members of the Company. The brief profile of Mr. Jitendra Hiru Panjabi is given in the Notice convening 71^st Annual General Meeting.

In the opinion of the Board, Mr. Jitendra Hiru Panjabi satisfies the conditions specified in SEBI (LODR) Regulations, 2015 and the Companies Act, 2013 along with the rules made thereunder, for his appointment as an Independent Director of the Company and he is independent of the Management. The Board believes that his association would be of immense benefit to the Company and it is desirable to avail his services as an Independent Director for the first term of 05 (five) consecutive years. He shall not be liable to retire by rotation. In the interest of the Company's continued prosperity and well-being, the Board recommends his appointment as an Independent Director at the ensuing Annual General Meeting.

h. The abovenamed Directors have submitted Form DIR-8, pursuant to Section 1 64 of the Companies Act, 2013 & Rule 14(1) of the Companies (Appointment & Qualification of Directors) Rules, 2014, along with their consent in Form DIR-2, pursuant to Section 152 of the Companies Act, 2013 & Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

i. Necessary Resolutions for the re-appointment of the abovenamed Directors have been included in the Notice convening the ensuing 71^st Annual General Meeting and details of the proposed appointees, as required pursuant to Regulation 36 of SEBI (LODR) Regulations, 2015 and Clause 1.2.5 of the Secretarial Standard-2 (SS-2), are given in the Appendix to the Explanatory Statement annexed to the said Notice.

25. DIRECTORS PERFORMANCE EVALUATION

The annual evaluation process of the Board of Directors, individual Directors and Committees of the Board was conducted in accordance with the provisions of the Act and SEBI (LODR) Regulations, 201 5. A structured questionnaire was prepared after taking into consideration various aspects of the Board's functioning, composition, structure, effectiveness of the Board & Committee Meetings, execution & performance of specific duties, obligations & governance. The performance evaluation of the Board, of its own performance & that of its Committees and individual Directors, including the Executive Chairman and the Independent Directors was completed during the year under review. The NRC reviewed the performance of individual directors on the basis of criteria, such as the contribution of the individual director to the Board and committee meetings, like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. and to the Board as a whole. The Board of Directors expressed their satisfaction with the evaluation process.

The evaluation process endorsed the Board's confidence in the ethical standards of the Company, cohesiveness amongst the Board members, flexibility of the Board and management in navigating the various challenges faced from time to time and openness of the Management in sharing strategic information with the Board.

The manner of evaluation is explained in the Corporate Governance Report in Annexure - III.

26. DIRECTORS RESONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) & (5) of the Companies Act, 2013, the Board of Directors of the Company, to the best of their knowledge and ability, hereby confirms that:

a. in preparation of the Annual Accounts for FY 2023-24, all the applicable Accounting Standards (AS) have been followed, along with proper explanation relating to material departures, if any;

b. the Directors have selected such accounting policies & practices and applied them consistently & made judgments and estimates, that are reasonable and prudent, so as to give a true & fair view of the state of affairs of the Company and of the profits of the Company for the year ended 31^st March, 2024;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing & 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 & were operating effectively; and

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

27. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

Pursuant to Regulation 34(2)(f) of SEBI (LODR) Regulations, 2015, the Business Responsibility & Sustainability Report (BRSR), in the prescribed format, is annexed as Annexure VII and forms an integral part of this Report.

BRSR includes reporting on the 09 (nine) principles of the National Voluntary Guidelines on social, environmental and economic responsibilities of business, as framed by MCA.

28. AUDIT COMMITTEE & ITS RECOMMENDATIONS

The composition of the Audit Committee is covered under the Corporate Governance Report, which is annexed to this Report as Annexure - III.

The Audit Committee plays a key role in providing assurance about financial statements to the Board of Directors. Significant audit observations, if any, and corresponding corrective actions taken by the Management are presented to the Audit Committee.

The Board has accepted all the recommendations of the Audit Committee and hence, there is no further explanation to be provided for, in this Report.

29. NUMBER OF BOARD MEETINGS

The Company conducted 04 (four) Board meetings during FY 2023-24 and the details thereof are covered in the Corporate Governance Report, which is annexed to this Report as Annexure - III.

30. COMMITTEES OF THE BOARD

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority/charter.

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

a. Audit Committee (AC)

b. Nomination and Remuneration Committee (NRC)

c. Risk Management Committee (RMC)

d. Corporate Social Responsibility Committee (CSR)

e. Stakeholders' Relationship Committee (SRC)

31. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel (KMPs) of the Company as on 31^st March, 2024:

a. Mrs. Ninotchka Malkani Nagpal, Whole - Time Director (Executive Chairman)

b. Mr. Aditya T. Malkani, Whole - Time Director (Managing Director)

c. Mr. Vinayak M. Bhide, Company Secretary & Compliance Officer

d. Mr. Surya Kant Sethia, Chief Financial Officer

a. STATUTORY AUDITORS

M/s. Walker Chandiok & Co. LLP Chartered Accountants, (FRN: 001076N/N500013), Mumbai, were re-appointed as the Statutory Auditors of the Company for a second term of 5 (five) consecutive years at the 67^th Annual General Meeting (AGM) of the Members held on 22^nd September, 2020, i.e. until the conclusion of the 72^nd Annual General Meeting, on such remuneration, as may be mutually agreed upon by the Board of Directors and the Statutory Auditors.

Their remuneration is fixed annually, as recommended by the Audit committee and approved by the Board of Directors.

The Report of the Statutory Auditor, forming part of the Annual Report, does not contain any qualification, reservation, adverse remark or disclaimer. The observations made in the Auditor's Report are self-explanatory and therefore do not call for any further comments/explanations.

b. SECRETARIAL AUDITOR & ITS REPORT

Pursuant to the provisions of Section 204(1) of the Companies Act, 201 3 and the rules made thereunder, the Board of Directors had appointed M/s. N. L. Bhatia & Associates, (Unique Identification Number: P1996MH055800), a firm of Company Secretaries in Practice, to undertake the Secretarial Audit of the Company for FY 202324.

The Secretarial Audit Report is annexed herewith as Annexure - V. There are no qualifications in the said Report and therefore no explanations are provided in this Report.

c. COST AUDITOR & ITS REPORT

Pursuant to the provisions of Section 1 48 of the Companies Act, 201 3, the Board of Directors, on the recommendation of the Audit Committee, had appointed M/s. Kishore Bhatia & Associates, Cost Accountants, Mumbai, as the Cost Auditor of the Company for FY 2023-24.

The brief information of the Cost Auditor and the Cost Audit Report is given as under:

a. Name of the Cost Auditor: M/s. Kishore Bhatia & Associates

b. Address: 701/702, D-Wing, Neelkanth

Business Park, Nathani Road, Vidhyavihar (West),

Mumbai - 400 086,

Maharashtra, India.

c. Membership No.: 31166

d. Firm Registration No.: 00294

e. Due date of submitting Cost Audit Report for FY 2022-23 by the Cost Auditor with the Company: Within 180 days from the end of the financial year (by 30th September, 2023)

f. Actual Date of filing of Cost Audit Report for FY 2022-23 with the Central Government: 11^th August, 2023

The Company has appointed M/s. Kishore Bhatia & Associates, Cost Accountants, Mumbai (Firm Registration No. 00294) as the Cost Auditors for the financial year 2024-25, as well. M/s. Kishore Bhatia & Associates have, under Rule 6(1 A) of the Companies (Cost Records and Audit) Rules, 2014, furnished a certificate of their eligibility and consent for the said appointment. As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor for FY 2024-25 is being placed before the Members at the ensuing Annual General Meeting, for ratification.

The cost records of the Company, as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013, are duly prepared & maintained by the Company.

33. VIGIL MECHANISM & WHISTLE BLOWER POLICY

Pursuant to Section 177(9) of the Act and Regulation 4(2)(d)(iv) of SEBI (LODR) Regulations, 2015, the Company has framed a policy on Vigil Mechanism - cum - Whistle Blower, which enables any Director, Employee & Stakeholder of the Company to report their genuine concerns/instances of any unethical/improper activity, directly to the Chairman of the Audit Committee, as a Protected Disclosure. The employees, who join the Company are apprised of the availability of the said policy as a part of their induction schedule. The policy also provides adequate safeguards against victimization of persons, who may use such mechanism.

The detailed policy is also posted on the Company's Intranet Portal "ADORHUB" and also onto its website at the following weblink: https://www.adorwelding. com/wp-content/uploads/2021/07/Mechanism- For-Whistle-Blower-For-Stakeholders11.pdf

34. POLICY ON PREVENTION OF SEXUAL HARASSMENT

The Company has "zero tolerance" for sexual harassment at workplace and has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under "The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013", as amended from time to time, which looks into the complaints received, if any. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office/factory premises and women service providers are covered under this Policy. ADOR is committed to creating a safe and healthy work environment, where every employee, irrespective of gender, is treated with respect and is able to work without any fear of discrimination, prejudice, gender bias, or any form of harassment at the workplace.

In compliance with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted an Internal Complaints Committee and is fully compliant of the Committee composition requirements.

Further, there were no complaints received by the Committee during the financial year 2023-24. The Company has also adopted a policy under the said Act, which is placed on its internal portal as well as on the website of the Company, which can be viewed at the following weblink: https://www. adorwelding.com/wp-content/uploads/2023/09/ POSH-Policv-2023.pdf

35. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION & PROTECTION FUND (IEPF)

Pursuant to Sections 124 and 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 201 6 ("IEPF Rules"), as amended from time to time, dividends, if not claimed within/for a period of 07 (seven) years from the date of transfer to the Unpaid Dividend Account of the Company, are liable to be transferred to the

Investor Education and Protection Fund ("IEPF"). Furthermore, IEPF Rules mandate the Companies, to transfer shares of the Members, whose dividends remain unpaid/unclaimed for a period of 07 (seven) consecutive years to the demat account of IEPF Authority. The said requirement does not apply to shares, in respect of which there is specific order of the Court, Tribunal or Statutory Authority, restraining any transfer of shares.

In the light of the aforesaid provisions, the Company has, during the financial year 2023-24 under review, transferred to IEPF, the unclaimed dividend of Rs. 18,65,560/- pertaining to FY 201516. Further, 13,182 equity shares of the Company, in respect of which dividends were not claimed/remained unpaid for 07 (seven) consecutive years or more, have also been transferred to the demat account of IEPF Authority. The details of the transfer of unclaimed dividend to the IEPF Authority are provided in detail in the Corporate Governance Report, annexed as Annexure III, to this report.

The Members, may claim dividends and/or shares from IEPF Authority, by submitting an online application in the prescribed electronic Form IEPF- 5, available on the website www.iepf.gov.in and subsequently send a physical copy of the e-form along with its acknowledgement, duly signed, to the Company along with the requisite documents enumerated in the said e-form IEPF-5. No claims shall lie against the Company, in respect of the dividend/shares, so transferred. Members may also kindly refer to the Refund Procedure for claiming the aforementioned amounts & shares transferred to IEPF Authority, as detailed/given on www.iepf.gov.in

Whilst the Company has already written to the Members, informing them about the due date for transfer of their shares to IEPF, the attention of the shareholders is once again drawn to this matter through the Annual Report. The data on unpaid/unclaimed dividend and shares is also available on the Company's website at www.adorwelding.com. Investors, who have not yet encashed their unclaimed/unpaid dividend amounts are requested to correspond with the Company's Registrar and Share Transfer Agent, at the earliest. Those Members/Shareholders, who do not remember/recollect having encashed their dividend, can also check the "List of Unpaid Dividends", posted on the website of the Company.

36. HUMAN RESOURCE

At ADOR, employee well-being is of utmost importance. The Company has a structured induction process at all its locations and undertakes training programs to upgrade skills/knowledge of its employees. Objective appraisal systems, based on key result areas (KRAs), are in place for its employees. ADOR believes in harnessing the potential of the employees, by providing them adequate training, opportunities and inclusive work culture, in order to achieve Company's goal, in line with the overall employee development. The industrial relations at all the Plants and Offices of the Company continue to remain harmonious, cordial and peaceful.

The disclosure pertaining to remuneration and other details, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this Report, as Annexure VI.

Statement containing particulars of top 1 0 employees and the employees drawing remuneration in excess of limits prescribed under Section 1 97 (1 2) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, if any, is provided in the Annexure forming part of this report. In terms of proviso to Section 136(1) of the Act, the Report and the Accounts are being sent to the shareholders, excluding the aforesaid Annexure. The said Statement is also open for e-inspection/physical inspection, 21 (twenty one) days before and up to the date of the ensuing 71st Annual General Meeting, during business hours on any working day. Any Member interested in obtaining a copy of the same, may write to the Company Secretary. None of the employees, listed in the said Annexure, are related to any of the Directors of the Company or to each other. None of the employees hold (by himself/herself or along with his/her spouse and dependent children) more than 2% (two percent) of the Equity Shares of the Company.

The on-roll manpower strength of the Company, as at the date of this Report, is 667.

37. MATERIAL CHANGES & COMMITMENTS

There were no material changes, affecting the financial position of the Company subsequent to the close of the financial year 2023-24, till 30^th April, 2024 i.e. till the date of this report.

38. INTERNAL FINANCIAL CONTROL SYSTEM & ITS ADEQUACY

The Board has adopted policies & procedures of governance for orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding its assets, prevention & detection of frauds and errors, accuracy & completeness of the accounting records and timely preparation of reliable financial disclosures. ADOR has an effective internal financial control system, which is constantly assessed and strengthened. The Company's internal financial control systems are commensurate with the nature of its business, the size and complexity of its operations.

The Internal Auditor reports to the Audit Committee. The Audit Committee defines the scope and authority of the Internal Auditor. The Internal Auditor monitors and evaluates the efficacy and adequacy of internal financial control system in the Company, its compliance with operating systems, accounting procedures and policies at all the locations of the Company. Based on the report of the Internal Auditor, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and the corresponding corrective actions are, thereafter presented to the Audit Committee in its meeting, on a quarterly basis and as & when required.

39. REPORTING OF FRAUDS

There were no instances of fraud, during the financial year 2023-24, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Act and Rules framed thereunder.

40. DISCLOSURE W.R.T. VALUATION

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done, while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable during the financial year under review.

41. CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted the Code of Conduct for Prevention of Insider Trading (PIT) for dealing/trading in the Securities of the Company, in accordance with the Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2018. The Code of Conduct for Prevention of Insider Trading & Code of Corporate Disclosure Practices is also uploaded on the website of the Company at the following weblink: https://www.adorwelding.com/ wp-content/uploads/2022/12/Code-of-practices- and-procedures-for-fair-disclosure-of-unpublished- price.pdf

All the Directors, employees and third parties such as auditors, consultants, vendors, traders, etc, who could have access to the Unpublished Price Sensitive Information (UPSI) of the Company, are governed by this code. The objective of PIT Code is to protect the interest of the shareholders at large, to prevent misuse of any unpublished price sensitive information and to prevent any insider trading activity, by/while dealing in shares of the Company, by/through its Designated Persons and their immediate relatives. The trading window is closed during/around the time of declaration of results and occurrence of any material events, as per the Code. The Company Secretary & Compliance Officer, is responsible for setting forth procedures and implementation of the Code for trading in the Company's securities.

The Company periodically circulates informative e-mails on prevention of insider trading, Do's and Dont's, etc. to all the Designated Persons to familiarize, educate and sensitize them on the provisions of the Code and PIT Regulations. The Management also imparts several trainings and workshops to the Designated Persons in order to create awareness on various aspects of the Code and the PIT Regulations. Various "In-person" sessions are organized to seek clarifications on the Code. These activities help the Designated Persons to ensure objective compliances of the Regulations and the Code.

The Company has also maintained a structured Digital Database ("SDD"), pursuant to the requirments of regulations 3(5) and 3(6) SEBI (PIT) Regulations, 2015.

42. ENVIRONMENT & HEALTH

Your Company is conscious of the importance of environmentally clean and safe operations. ADOR has undertaken various initiatives, which contribute towards sustainable development. Your Company strives to operate, after taking into consideration various environmental, social and governance initiatives/guidelines/laws, in order to achieve maximum output by optimum utilization of available resources, in environment friendly manner/ways.

The detailed explanation w.r.t. the intiatives taken by the Company from health & environment perspective are given in BRSR Report, annexed herewith as Annexure VII.

43. ANNUAL LISTING FEES

The Company affirms that the annual listing fees for the financial year 2024-25 have been paid to both M/s. National Stock Exchange of India Limited (NSE) and M/s. BSE Limited (Bombay Stock Exchange). Your Company has also paid its annual custodial fees to M/s. National Securities Depository Limited (NSDL) and M/s. Central Depository Services (India) Limited (CDSL).

44. DESIGNATED PERSON FOR IDENTIFICATION OF SIGNIFICANT BENEFICIAL OWNER (SBO)

Mr. Vinayak M. Bhide, Company Secretary and Compliance Officer of the Company has been appointed as the Designated Person, who shall be responsible for furnishing, identifying Significant Beneficial Owner and extending the cooperation for providing the information to the Registrar, pursuant to the Rule 9(3) of the Companies (Management and Administration) Rules, 2014.

45. CAUTIONARY STATEMENT

Statements in this Directors' Report and Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially, from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

46. ACKNOWLEDGEMENT

Your Directors take this opportunity to place on record their sincere gratitude and warm appreciation for the invaluable contribution and spirit of dedication shown by the employees, including the support staff, at all the levels during FY 2023-24. Your Directors also express their deep gratitude for the business assistance, co-operation and support extended to your Company by its Customers, Distributors, Dealers, Vendors, Suppliers, Service Providers, Bankers, various Government Organizations/Agencies & the Shareholders and look forward to their continued support and cooperation in the future, as well.