Eimco Elecon (India) Ltd

To:

The Members of Eimco Elecon (India) Limited,

The Directors take pleasure in presenting the 50^th Annual Report together with the Audited Financial Statements for the Financial Year ended on 31^st March, 2024.

1. HIGHLIGHTS OF PERFORMANCE

Total Revenue for the year increased to 22,750.28 Lakhs as compared to 17,269.70 Lakhs in the previous year. Profit Before Tax for the year was 4,994.94 Lakhs as compared to 2,648.62 Lakhs in the previous year. Profit After Tax for the year was 4,041.16 Lakhs as compared to 2,086.75 Lakhs in the previous year.

( in Lakhs)

3. DIVIDEND

Your directors recommend for your consideration a dividend of 50% i.e. 5/- per share on 57,68,385 equity shares of 10/- each for the year ended on 31^st March, 2024 (Previous Year 5/- per share on 57,68,385 equity shares of 10/- each). Dividend is subject to approval of members at the ensuing Annual General Meeting (AGM) and shall be subject to deduction of income tax at source.

The Dividend Distribution Policy is available on the Company's website www.eimcoelecon.in.

During the year, the unclaimed dividend pertaining to the Financial Year 2015-16 has been transferred to the Investor Education & Protection Fund.

4. TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profit for the Financial Year 2023-24 in the Statement of Profit & Loss

5. SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

As on 31^st March, 2024, the Company has neither subsidiary, nor Joint Venture and Associate Companies.

During the year under review, the Company has sold/disposed entire equity/investment of 5,10,000 equity Shares of 10 each (47.62% of share capital) of Eimco Elecon Electricals Limited (EEEL), an associate company to Aakaaish Investments Private Limited, a promoter group Company, for a total consideration of 131.02 Lakhs, accordingly

EEEL has ceased as an Associate Company of the Company w.e.f. 12^th July, 2023.

6. SHARE CAPITAL

The paid up Equity Share Capital as on 31^st March,

2024 was 576.84 Lakhs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock options or sweat equity.

7. BORROWINGS

The Company continues to focus on judicious management of its working capital. Receivables, Inventories and other working capital parameters were kept under strict check through continuous monitoring. The whole of the properties of the Company have been suitably insured.

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 form part of the financial statements provided in this Annual

Report.

The Company has not accepted any deposit from public falling within the ambit of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. There are no unpaid / unclaimed deposits as on 31^st March, 2024.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Cessation of term of Independent Director Shri Nirmal P. Bhogilal (DIN: 001731687) had completed his second and final term as an Independent Director and consequently ceased to be a Director of the Company w.e.f. the closure of business hours on 31^st March, 2024. The Board placed on record their appreciation for the assistance and guidance provided by Shri Nirmal P. Bhogilal during his tenure as a Non-Executive Independent Director of the Company.

Shri Jai S. Diwanji (DIN: 00910410) was appointed as an Additional Non-Executive Independent Director of the Company by the Board of Directors at their meeting held on 24^th January, 2024 for a period of five st April, 2024, subject to approval of members of the Company.

He is a Senior Partner at Desai & Diwanji, which is one of the leading legal firms in India. He has been with the firm since 2001.

He focuses on advising Indian and International clients on a wide range of Indian legal and regulatory issues, general corporate / commercial law, transactions, including insurance, private equity, venture capital, joint venture and strategic transactions. He has advised numerous and complex inbound and outbound transactions and has a detailed knowledge of the Indian legal and regulatory framework. His sector experience includes start-ups, insurance, retail, e-commerce, education, aviation, banking & finance, telecommunication infrastructure, manufacturing, logistics and real estate.

The Company had sought the approval of the members by way of Special Resolution through notice of postal ballot dated 24^th January, 2024 for the appointment of Shri Jai S. Diwanji as an Independent Director of the Company for a period of five years with effect from 1^st April, 2024, which was duly passed and concluded on 5^th March, 2024 by the members of the Company.

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Shri Pradip M. Patel (DIN: 00012138) retires by rotation at the forthcoming Annual General

Meeting of the Company and, being eligible, offers himself for re-appointment. The Board recommends his appointment for your approval.

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (LODR) Regulations,

2015 and notifications/ circulars of SEBI, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees.

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The weblink of the policy is https:// eimcoelecon.in/wp-content/uploads/2020/06/THE-NOMINATION-AND-REMUNERATION-POLICY.pdf.

During the year under review, Four (4) meetings of the Board were held. The meeting details are provided in the Corporate Governance Report that forms part of this Annual Report. The maximum interval between any two meetings is as prescribed under the Companies Act, 2013 and the SEBI (LODR), Regulations, 2015. During the year, some of the resolutions were also passed by way of circular resolutions.

Details of various committees constituted by the Board as per the provisions of Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 and the details of the said committee meetings are given in the Corporate Governance Report which forms part of this report.

The Independent Directors met on 5^th March, 2024 without the attendance of Non-Independent Directors and members of the Management. The Independent Directors reviewed the performance of Non-Independent Directors and Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All Independent Directors of the Company have given declarations to the Company under Section 149 (7) of the Companies Act, 2013 and under Regulation 25(8) of the SEBI (LODR), Regulations, 2015, that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR), Regulations, 2015.

On appointment, the concerned Director is issued a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities and expected time commitments. During the first Board Meeting attended, each newly appointed Independent Director is taken through a formal induction program, including the presentation from the Whole-time Director on the

Company's manufacturing, marketing, finance and other important aspects. The Company Secretary briefs the Director about his/her legal and regulatory responsibilities as a Director. The Familiarization Programme for Independent Directors includes a detailed presentation by Business and Functional Heads, visit to the manufacturing site, etc. Weblink for the Policy for the Familiarisation Programme for Independent Directors https:// eimcoelecon.in/details-of-familiarization-programmes-imparted-to-independent-directors/. Disclosures by Directors

None of the Director of your Company is disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under provisions of the Companies Act, 2013.

Key Managerial Personnel

As on 31^st March, 2024, Shri Mukulnarayan Dwivedi, Executive Director; Shri Vishal C. Begwani, Chief Financial Officer and Shri Rikenkumar Dalwadi, Company Secretary are designated as KMP of the Company.

9. DIRECTORS' RESPONSIBILITY STATEMENT

Based on the frame work of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by the Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the

Company's internal financial controls were adequate and effective during the year ended on 31^st March, 2024. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, based on the above and the representations received from the Operating Management, the Board of Directors, to the best of their knowledge and ability, confirmed that:

(i) In the preparation of the annual accounts, the applicable accounting standards have been followed and that there were no material departures therefrom; (ii) They have, in the selection of the accounting policies, consulted the statutory auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the profit of the Company for the year ended on that date;

(iii) 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; (iv) They have prepared the annual accounts on a going concern basis;

(v) They have laid internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively on 31^st March, 2024; and (vi) Proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and during the year ended on operatingeffectively

31^st March, 2024.

As part of its initiatives under the Corporate Social Responsibility (CSR), the Company has undertaken projects in the area of education and health care. These projects are in accordance with Schedule

VII of the Companies Act, 2013 and the Company's CSR policy. The Annual Report on CSR activities is annexed herewith as Annexure ‘A'.

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of the Company's business.

All Related Party Transactions are placed before the Audit Committee and the Board for approval. Prior approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature and in the ordinary course of the Company's business. Transactions with related parties are disclosed in the notes to accounts to the financial statements.

The Form No. AOC-2 envisages disclosure of material contracts or arrangement or transaction at arm's length basis is annexed with as Annexure ‘B'.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website. The weblink of the policy is https://eimcoelecon.in/wp-content/ uploads/2022/08/7_g_EIMCO-ELECON_RPT-Policy_31012022.pdf.

A detailed review of the operations, performance and future outlook of the Company is given in the Management's Discussion and Analysis appearing as Annexure ‘C' to this Report.

Your Company has always striven to incorporate appropriate standards for good Corporate Governance. It has taken adequate steps to ensure that the provisions of Corporate Governance as prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 are complied with. A detailed report on Corporate Governance is appearing as Annexure ‘D' to this Report along on its compliance by withtheAuditors' Certificate the Company.

The disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (the 'Rules') have been appended as Annexure ‘E', forming part of this Report. Details of employee remuneration as required under the provisions of Section 197 of the Act and Rule 5(2) and 5(3) of the Rules are available to any Shareholder for inspection on request. If any Shareholder is interested in obtaining a copy thereof, such Shareholder may write to the Company Secretary, where upon a copy would be sent through email only.

The information on conservation of energy, technology of absorption and foreign exchange earning and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given in Annexure ‘F' forming part of this report.

Messrs K C Mehta & Co LLP, Chartered Accountants, Vadodara were appointed as the Statutory Auditors of the Company for a period of 5 (five) consecutive years at the 48^th Annual General Meeting of the Company until the conclusion of 53^rd Annual General Meeting to be held for the financial The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and submitted a certificate in affirming that they are not disqualified for holding the office of the Statutory Auditor of the Company. The report given by the

Statutory Auditor on the financial of the Company forms the part of the Annual Report. The Statutory Auditor have issued an unqualified audit report on the annual accounts of the Company for the financial year 2023-24.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Messrs J. J. Gandhi & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company for the Financial Year 2023-24. The Report on the Secretarial Audit carried out by the Secretarial Auditor during the Financial Year 2023-24 is annexed herewith as Annexure ‘G'. There is no secretarial audit qualification for the year under review.

Further, your Directors have on the recommendation of the Audit Committee appointed M/s. J. J. Gandhi & Co., Practising Company Secretary, Vadodara, as a Secretarial Auditors of the Company to undertake the Secretarial Audit of the Company and provide Annual Secretarial Compliance Report for the FY2024-25.

Pursuant to Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the cost audit records maintained by the Company in respect of its activity are required to be audited. Your Directors have, on the recommendation of the Audit

Committee, appointed Messrs Diwanji & Co.,

Cost Accountants, to audit the cost accounts of the Company for the financial year ending

31^st March, 2025 on a remuneration of

55,000/- plus taxes as applicable and out of pocket expenses.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditors is required to be placed before the Members in a general meeting for their ratification.

Accordingly, a Resolution seeking Members' ratification for the remuneration payable to Messrs Diwanji & Co., Cost Accountants,

Cost Auditors is included at Item No. 7 of the Notice convening the Annual General Meeting.

The Cost Audit Reports provided by the previous cost auditors of the Company M/s. Y. S. Thakar & Co., for the year 2022-23 was filed with the Ministry of Corporate Affairs before the due date of filing.

17. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY Your Company has an effective internal control and risk-mitigation systems, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to Messrs C. F. Patel & Co., Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee of the Board of Directors, the Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions are taken by the

Management. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the Management are presented to the Audit

Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

The Company operates in a competitive environment and is generally exposed to various risks at different times such as technological risks, business risks, operational risks, financial risks etc. The Company has a system based approach to business risk management backed by strong internal control systems. A range of responsibilities from strategy to the operations is specified. A strong independent internal audit function at the corporate level carries out risk focused audits across all businesses enabling identification of areas where risk managements processes may need to be improved. The Management prepares the Risk Register which is reviewed by the Audit Committee and the Board.

The Board reviews internal audit findings and provides strategic guidance on internal control, monitors internal control environment within the Company and ensures that Internal Audit recommendations are effectively implemented. The combination of policies and procedures adequately addresses the various risks associated with your company's businesses.

19. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established Vigil Mechanism system and framed Whistle Blower Policy. Whistle Blower Policy is disclosed on the website of the Company at followingweb-link- https://eimcoelecon. in/wp-content/uploads/2023/01/The-Whistle-Blower-Policy_30012023.pdf.

The Company has in place an Anti Sexual Harassment Policy in line with the requirement of the Sexual Harassment of Women at the Workplace (Prevention & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainee) are covered under the policy. The following is a summary of sexual harassment complaints received and disposed-off during the year 2023-24:

is placed on the Company's website at https:// eimcoelecon.in/wp-content/uploads/2019/04/Sexual-Harassment-Policy.pdf.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return as on 31^st March, 2024 is available on the Company's website https://eimcoelecon.in/ annual-return-as-provided-under-section-92-of-the-companies-act-2013/.

There was no instance of fraud during the year under review, which required the Statutory Auditors and Secretarial Auditors to report to the Audit Committee or the Board or the Central Government under Section 143(12) of the Companies Act, 2013 and Rules framed thereunder.

The Company takes a very pragmatic approach towards insurance. Adequate insurance cover has been taken for all movable and immovable assets for various types of risks.

Your Company is committed to upholding its excellent reputation in the field of Industrial relations. Through continuous efforts the Company invests and improvises development programmes for its employees.

There have been no material changes and commitments affecting the financial position of the

Company, which have occurred between the end of the Financial Year and date of this report.

No significant material orders have been passed by the Regulators/Courts/Tribunals which would impact the going concern status and its future operations of the Company.

During the financial period under review, no application was made under the Insolvency and Bankruptcy Code, 2016 ("IBC 2016") by the Company. No proceedings are pending under IBC 2016 against the Company.

During the financial period under review, there were no instances of any one-time settlement against loans taken from Banks or Financial Institutions.

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

SEBI, vide its circular dated 10^th May, 2021, made Business Responsibility and Sustainability Report (BRSR) mandatory for the top 1000 listed companies by market capitalisation from financial year 2023.

Your company is not covered under top 1000 listed companies by market capitalisation. Therefore, BSRS is not applicable to the Company.

31. COMPLIANCE OF SECRETARIAL STANDARDS The Company has complied with the applicable Secretarial Standards as issued by the Institute of Company Secretaries of India.

Your Directors are highly grateful for the unstinted guidance, support and assistance received from the Government, Bankers and Financial Institutions. Your Directors are thankful to all valuable Stakeholders of the Company viz. shareholders, customers, dealers, vendors, suppliers, collaborators, business associates and other agencies for their faith, trust and confidence reposed in the 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 the Company continues to grow and excel.