Jyoti CNC Automation Ltd

To

The Members,

Your Directors have pleasure in presenting their 33rd Annual Report on business and operation of your company for the year ended as at March 31, 2024.

(Amt. in Crores)

Note: All Figures are in crores except Earnings Per Share.

A.1. Dividend Distribution Policy

In terms of Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) 1Regulations, 2015, the board of directors of the company has formulated and adopted the dividend distribution policy (the "Policy"). The copy of Policy is available on website of company at https://jyoti. co.in/investors/corporate-governance/.

A.2. Dividend and Reserve

For the financial year 2023 - 24, the board has not recommended dividend and has decided to retain the entire amount of profit in the statement of profit & loss for the financial year.

A.3. Transfer to Reserve

No amount is proposed to be transferred to the reserves during the year under review.

B. OPERATIONS & PERFORMANCE

On a standalone basis, revenue from the operation of the company stood at Rs 11,897.24 million for fiscal year 2024 as against Rs 8,282.38 million in previous fiscal year 2023 as well as profit (after tax) at 1,399.94 million for fiscal year 2024 as against Rs 393.26 million in previous fiscal year 2023. During the year, the company has sold a variety of machines aggregate to 3,063 machines. Further, the production of CNC Machine was at 3106 against the installed capacity of 4,400 machine per annum indicates capacity utilization of 70.59%.

The higher revenue and excess margin generated by the company during financial year 2023 - 24, has been contributed through the business model adopted by company which includes "Model Mix and Customization". During the year, the aerospace and defense sector contributed most in revenue of the company and the same been included by the company in its next growth leap.

Just a few years back, the auto sector, general engineering, dies & mould lead the contribution in revenue. But now the share of emerging sectors will increase and then will overpass these sectors. These emerging sectors offered huge business opportunities with quality, precision and automation approaches. The company undertakes various initiatives in order to meet challenges from these emerging sectors and expects to continue to gain benefits therefrom.

In order to have better utilization of existing facilities and to extend the capacity, the company is undertaking capital expenditure which aimed at removing bottlenecks in existing facilities and better utilization thereof. For the purpose, the company has sufficient land resource.

C.1. Fund Raising

During financial year 2023 - 24, the company has raised funds aggregate to Rs. 1165.88 Crores through private placement of its securities, preferential allotment through conversion of loan and initial public offering of its equity shares (IPO).

The company has raised funds for various purposes like repayment of debt, working capital, and other business purposes. Further, the compulsory convertible preference shares ("CCPS") of face value of Rs. 2/- each allotted under the private placement offer were fully converted into equity shares of face value of Rs. 2/- each. The funds raised through private placement and preferential allotment were used for working capital and capex.

While the funds raised through IPO were partially utilized towards debt repayment, working capital, capex and investment in subsidiary. In pursuant to the SEBI Regulations, the company has appointed CARE Ratings Limited as Monitoring Agency. The said monitoring agency has issued report on utilization of IPO Proceeds by Company till March 31, 2024. The said report along with statement on deviation(s) / variation(s), prepared in pursuant to the SEBI Circular No. CIR/ CFD/CMD1/162/2019 dated December 24, 2019, were filed with BSE India Limited ("BSE") and National Stock Exchange of India Limited ("NSE"). Further, both, report of monitoring agency and statement on deviation(s) / variation(s) are available on website of the company at https://jyoti.co.in/investors/announcements/.

C.2. Change in Share Capital Share Capital

During the financial year, the company has split face value of its securities (Equity & Preference Shares) from Rs. 10/- each to Rs. 2/- each. Further, the company has increased its authorized share capital from Rs. 47,00,00,000/- [Rupees Forty-Seven Crores Only] divided into 22,50,00,000 Equity Shares of Face Value of Rs. 2/- Each and 1,00,00,000 Preference Shares of Face Value Rs. 2/- Each to Rs. 57,00,00,000/- [Rupees Fifty-Seven Crores Only] divided into 27,50,00,000 Equity Shares of Face Value of Rs. 2/- Each and 1,00,00,000 Preference Shares of Face Value Rs. 2/- Each.

During the financial year, the company had allotted fresh 3,82,052 equity shares of face value of Rs 10/- each and 3,92,855 compulsory convertible preference shares (Series A) of face value of Rs 10/- each ("CCPS") under private placement offer. Moreover, the company had also allotted fresh 58,40,000 equity shares of face value of Rs 10/- each. The company had converted all outstanding CCPS before launch of its IPO and had allotted fresh 14,47,357 equity shares of face value of Rs 2/- each. In first IPO of the company, total fresh 3,02,18,649 equity shares of face value of Rs 2/- each been allotted. All equity shares allotted by the company during the year are pari passu in all respect. Thus, the total paid up share capital of the company was Rs 329.29 million as at March 31, 2023 consist of 3,29,29,366 fully paid up equity shares of Rs 10/- each and has been increased to Rs 454.85 millions as at March 31,2024 consist of 22,74,23,096 fully paid up equity shares of Rs 2/- each.

C.3. Listing of Security

In last quarter of financial year 2023 - 24, the company has successfully completed fund raising through initial public offering of its equity shares of face value of Rs. 2/- each and got listed its equity shares of face value of Rs. 2/- each on both BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE").

C.4. Capex

In order to remove bottlenecks in existing manufacturing facilities and to increase production, the company has spent sum of Rs 1059.83 million towards capital expenditures.

C. 5. Repayment of Debt

During the financial year ended on March 31, 2024, the company had repaid debt aggregate to Rs 5327.30 million. The resultant saving, in interest and finance cost, will be utilized for future business and growth of the company. The total borrowing of the company was Rs 921.92 million as at March 31, 2024.

D. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Jyoti's vision and mission focus on having the right balance between Value Creation and Corporate Citizenship. Corporate Social Responsibility is an integral part of Jyoti's business process and the same is reflected by activities carried out by the company. The board of directors has approved CSR Policy and pursuant to the policy, the company undertakes its CSR activities.

During the period, the company has spent sum of Rs. 38.16 Lakhs cyber security, skill India, Clean India and promoting arts & culture. The Annual CSR Report containing details on the CSR Committee, activities undertaken by company and amount spent thereon, is given in Annexure I enclosed herewith The CSR Policy approved by Board of Directors of the company is available on the website of the company at https://jyoti. co.in/investors/corporate-governance/.

E. CORPORATE GOVERNANCE

The company listed its security on stock exchanges in India and accordingly, it has to follow the corporate governance norms as prescribed by SEBI Listing Regulations in addition to those prescribed under Companies Act, 2013. The corporate governance report is annexed to this Report.

F. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

A Business Responsibility and Sustainability Report is forming part of this annual report and has been prepared in pursuant to the provisions of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 read with SEBI Circular No. SEBI/HO/CFD/CMD-2/P/ CIR/2021/562 dated May 10, 2021 and SEBI/HO/CFD/

CFD- SEC-2/P/CIR/2023/122 dated July 12, 2023.

G.1. Meeting of Board and Committees of the Board

The Board meet 10 times during the financial year 2023 - 24 and intervening period between two meeting does not exceed the limit prescribed under the companies act, 2013 and SEBI listing regulations. Details of composition of Board and its committees as well as details of Board and Committees meetings held during the year and Directors attending the same are given in this annual report as well as in corporate governance report annexed to Board of Directors' Report.

G.2. Directors and Key Managerial Personnel

During the year under review, there is change in Board of Directors of the company.

1. Mrs. Rajshriba P. Jadeja was resigned as Non- Executive Director of company with effect from August 19, 2023.

2. Mr. Pravinchandra R. Dholakia and Ms. Jignasa P. Mehta have been appointed as Non-Executive and Independent Director of the Company with effect from August 19, 2023.

3. Mr. Rikesh U. Chand was cease as Nominee Director of the company with effect from February 02, 2024.

Mr. Pravinchandra R. Dholakia (DIN 00844014) and Ms. Jignasa P. Mehta (DIN 08035567) have been appointed by shareholders at an extra ordinary general meeting held on August 19, 2023, as non-executive independent director of the company for a term of five years.

Mr. Vijay V. Paranjape (DIN: 00370451) and Mr. Yogesh

D. Kathrecha (DIN: 02355968), Independent Directors, will complete their second term of office in company at the end of ensuing annual general meeting of members of company and will not be eligible for reappointment in terms of provisions of section 149(11) of companies act, 2013.

In terms of Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the company shall comprise minimum six (6) members of which half of them must be an Independent Directors. Accordingly, pursuant to vacancy of office of independent directors to be made by Mr. Vijay V. Paranjape (DIN: 00370451) and Mr. Yogesh D. Kathrecha (DIN: 02355968), a company needs to appoint new Independent Director and accordingly, pursuant to the nomination by Nomination & Remuneration committee, the Board of Directors of the company has recommended Mr. Yudhvir Singh Jain (DIN: 06507365) as an Independent Director of the company for the an initial term of five years to be commence from the end of the ensuing general meeting of shareholders of the company to the end of fifth annual general meeting of members of the company to be held for the financial year ended on March 31, 2029. Necessary details of Mr. Yudhvir Singh Jain (DIN: 06507365) , for consideration by members of the company, are given in the note to the notice convening the annual general meeting of members of the company.

All Independent Directors of the company have provided requisite declaration in terms of Section 149(7) of the Companies Act, 2013, that they meet the criteria of Independence as laid down under Section 149(6) of the Companies Act 2013 and rules made thereunder. In the opinion of Board of Directors, the Independent Directors have relevant proficiency, expertise and experience. Further all directors have confirmed that they are not disqualified from being appointed as Directors in terms of section 164 of the Companies Act, 2013.

Pursuant to section 152 of the companies act 2013, Mr. Vikramsinh R. Rana is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, offer himself for reappointment.

On recommendation of Nomination & Remuneration Committee, the board of directors of the company at its meeting held on September 03, 2024 approved reappointment of Mr. Vikramsinh R. Rana as whole time director subject to the approval of shareholders of the company.

The requisite particulars in respect of Directors seeking appointment / reappointment are given in Notice convening the Annual General Meeting.

Remuneration and Other Details

The Policy on Directors' Appointment, Remuneration and Other details, approved by Board of Directors of the Company in terms of Provisions of Section 178(3) of the companies act, 2013 is available on company's website at https://jyoti.co.in/investors/corporate-governance/.

G.4. Directors' Evaluation

The Securities and Exchange Board of India (SEBI) vide its Master Circular dated July 11,2023 provided guidance note on Board Evaluation by specifying the criteria for evaluation of performance of (i) Board as a Whole; (ii) Individual Directors (Including Independent Directors & Chairperson) and (iii) Committees of the Board.

Pursuant to the provisions of Companies Act, 2013 and SEBI Listing Regulations, the Nomination and

Remuneration Committee specified the criteria for evaluation and accordingly, undertook the performance evaluation of the Board, its Committees and Individual Directors were carried out. The criteria selected for evaluation and mechanism for evaluation were in line with the policy of company for performance evaluation of Board and its Committees as well as Directors.

Further, in separate meeting of Independent Directors held on August 10, 2024, the performance of Non- Independent Directors, Board as a whole and Chairman of the company were evaluated taking into consideration views received from all directors as well as other factors contributing to their performance.

The result of the evaluation was communicated to the Chairman of the Board of Directors.

G. 5. Employee's Particulars

Disclosure pertaining to remuneration and other details of employees, as required under section 197(12) of Companies Act, 2013 read with Rule 5(1) of Companies Appointment and Remuneration) Rules, 2014 is given in Annexure II forming part of this report. During the financial year 2023 - 24, there are no employees employed wither throughout the year or part of the year, who holds by himself or along with his spouse and dependent children, not less than two percent of equity shares of the company and draws remuneration in excess of the threshold limits provided In Rule 5(2) of Companies (Appointment and Remuneration) Rules, 2014. Hence, disclosure under said rule is not provided.

H. SUBSIDIARIES & CONSOLIDATED FINANCIAL STATEMENT

The company has 5 overseas subsidiaries including 4 step down operating subsidiaries. In pursuant to the provisions of section 129(3) of the Company Act, 2013, a company has prepared consolidated financial statement for the financial year ended on March 31, 2024 and the same, along with the report of auditor thereon, form part of this report. Further, a statement containing salient features of financial statement of subsidiaries in Form AOC - I is also annexed to this report at Annexure III.

Pursuant to Section 136 of the Companies Act 2013 and amendment thereto, read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the audited financial statement, including consolidated financial statements and related information of the company as well as financial statement of subsidiaries are available on website of company https://jyoti.co.in/

I. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Particulars of loans, guarantee given, and investment covered under section 186 of the Companies Act, 2013, form part of the notes to the financial statements annexed to this report.

J. RELATED PARTY TRANSACTIONS

In compliance with the provisions of Companies Act, 2013 and of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the board of directors has formulated a policy on Related Party Transactions and the same is available on company's website at https://jyoti.co.in/investors/corporate-governance/.

During the financial year 2023 - 24, all related party transactions entered into by company were at arm's length transactions and approved by the Audit Committee. Omnibus approval have been obtained from the Audit Committee in respect of transactionS which were repetitive in nature and in ordinary course of business. The company did not enter into any contract or arrangement, during the F.Y. 2023 - 24, with related parties in terms of provisions of section 188(1) of the companies act, 2013. Accordingly, the disclosure on related party transactions in Form AOC - 2, pursuant to Section 134(3(h) of companies act, 2013, is not applicable to the company for financial year 2023 - 24 and hence does not form part of this report.

In terms of AS - 24, details of related party transactions entered into by the company have been disclosed in the notes to the standalone and consolidated financial statements forming part of this report.

K. RISK MANAGEMENT POLICY

The company is in capital goods sector and like any other business, it has to deal with risks arising out of and in surrounding business environments. The company has adopted a risk management policy to identify and analyze the risks faced by company and to take corrective steps to mitigate impact simultaneous with improve business efficiency, sustain in competitive business environments as well as transform business operation to Industry 4.0 standards so as to meet future challenges.

Pursuant to the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Board of Directors has constituted a Risk Management Committee and also formulated a Risk Management Policy. The company

has already implemented Risk Governance Structure at operational level which operate under direction of top management.

Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the company's activities. Details of Risks & concerns of company and mitigation measures are explained in Management & Discussion Analysis provided separately in this annual report.

L. INTERNAL CONTROL SYSTEM

The company has internal control system, commensurate with the size, scale and complexity of operations. The controlling structure in place in company is adequate to safeguard the assets and protect against loss from unauthorized use or disposition. Details on the Internal Financial Controls of the Company forms part of Management Discussion and Analysis forming part of this report.

M. DEPOSITS

The company has not accepted any deposits or money in contravention to the provisions of Section 73 of the Companies Act, 2013 and to the provisions of Companies (acceptance of Deposits) Rules, 2014.

N. DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The company has zero tolerance towards sexual harassment of woman at its workplace. The Company has adopted a Policy on prevention, prohibition and redressal of sexual harassment of woman at workplace and the same is in line with the provisions of the Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder.

The Company has also constituted an Internal Committee as per provisions of Sexual Harassment of Woman at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year, the company has not received any complaints.

O. SIGNIFICANT & MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant and material order passed by the Regulator, Court or Tribunal impacting the going concern status and company's operation in future. However, members' attention is drawn to the contingent liabilities, commitments given in the notes forming part of the financial statement annexed to this report.

P. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO

In terms of provisions of section 134(3)(m) of the Companies Act, 2013, details on energy conservation, technology absorption and foreign exchange earnings & outgo are annexed to this report Annexure IV.

Q. VIGIL MECHANISM

The Vigil Mechanism of the company provide opportunity to all stakeholders of Company to approach chairman of audit committee and make protected disclosure of fraud or unethical behavior of any Director or Employee of the company.

Board of Directors of Company formulated a whistle blower policy for vigil mechanism and under the policy, director, employee or business associates like customers, suppliers, of the company, can make disclosure of unethical behavior, intimidation, leak of unpublished price sensitive information, etc. A whistle blower under the policy can approach Chairman of audit committee with protected disclosure. Company's whistle blower policy on vigil mechanism aimed to foster trust and transparency among all stakeholders.

During the year, the company has not received any complaint, grievance.

R. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(3)(c) of The Companies Act, 2013 the Board of Directors to the best of their knowledge and ability confirm that:

A. in the preparation of the Annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures if any;

B. the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31stMarch, 2024 and of the Profit of the Company for that period;

C. the directors 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. the directors had prepared the annual accounts on a going concern basis.

E. the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively.

F. the directors had devised proper internal systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

S. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis prepared in terms of provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is forming part of this annual report.

Statutory Auditor

Members of the company had appointed M/s. G. K. Choksi & Co, (Firm Registration No. 125442W), Chartered Accountants, as Auditor of the company for a period of five years commencing from conclusion of 31st annual general meeting of members of the company held on September 30, 2022 until the conclusion of 36th annual general meeting of members of the company to be held in year 2027.

Except below, the report of auditor and notes to the financial statements referred to in the Auditor's Report are self-explanatory and does not contain any remarks, qualifications, reservations or remarks which requires separate explanation thereto. Also, attention of Investors is drawn to the emphasis of matter given in the report of Auditor.

The audit trail feature was enabled on 18-08-2024 in primary accounting software as the time was spent on training and awareness of personnel using the software as well as its implementation. The audit trail feature was then enabled throughout the year as confirmed in report of auditor.

Cost Auditor

The Board of Directors of the company has appointed M/s. Mitesh Suvagiya & Co. Practicing Cost Accountant, as Cost Auditor of the company for conducting the audit of cost records of the company for the financial year 2024-25. The cost audit for the financial year 2023 - 24 was conducted by the said auditor and report thereon will be filed on the web portal of Ministry of Corporate Affairs.

In accordance with the provisions of Section 148(3) of Companies Act, 2013 read with Rule 14 of Companies (Audit and Auditors) rules, 2014, as amended, the remuneration of Rs. 70,000 plus applicable taxes and reimbursement of out-of-pocket expenses payable to the cost auditor for conducting cost audit for financial year 2024 - 25 as recommended by audit committee and approved by Board of Directors of the company has to be ratified by the members of the company. The same is placed for ratification of members and form part of Notice of the AGM.

Secretarial Auditor

Section 204 of the Companies Act, 2013 requires every listed company to annex to the report of board of directors of the company, a Secretarial Audit Report, given in prescribed form, by Company Secretary in Practice.

The Board of Directors of the Company has appointed N. S. Dave & Associates (CP No. 13946) as Secretarial Auditor to conduct a secretarial audit of the company for FY2023- 24 and their report is annexed to this report at Annexure VI. The said report does not contain any qualifications, reservations, remarks or disclaimers.

Reporting of Fraud

During the year under review, the statutory auditor, cost auditor and secretarial auditor, have not reported any instances of fraud committed in company by its officers, employees to the Audit Committee under section 143(12) of Companies Act, 2013 read with Rule 13(3) of Companies (Audit and Auditors) Rules, 2014, details of which need to be mentioned in this report.

U. ANNUAL RETURN

The annual return for the financial year 2023 - 24 as per provisions of Companies Act, 2013 and rules made thereunder, is available at companies website at https:// jyoti.co.in/investors/financial-results-annual-returns/.

V. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

There are no significant and material order passed by the Regulator, Court or Tribunal impacting the going concern status and company's operation in future. However, members' attention is drawn to the contingent liabilities, commitments given in the notes forming part of the financial statements.

W. OTHER DISCLOSURE

1. there has been no change in the nature of business of the company as on date of this report.

2. there were no material changes and commitments affecting the financial position of the company between the end of financial year and date of this report.

3. there was no application made or proceeding pending against the company under Insolvency & Bankruptcy Code, 2016 during the year under review.

4. Company neither allot any debt securities nor has any outstanding debt securities as at March 31,2024 which requires an external credit rating. However, members' attention is drawn to external credit ratings on borrowings of the company given at page number 61 under corporate governance report forming part of this annual report.

X. APPRECIATION

Your Directors wish to place on record their deep sense of appreciation for the committed services of employees of the Company. Your directors would like to express their appreciation for the assistance and co- operation received from the government authorities, financial institutions, banks, customer, vendors and members during the year under review.

For, Jyoti CNC Automation Limited

Parakramsinh G. Jadeja

Chairman and Managing Director

Dated September 03, 2024, at Metoda, Rajkot.