20 Microns Ltd Directors Report

Prevention of Sexual Harassment at Workplace b>

The Company has adopted a policy with the name "Policy on Prevention of Sexual Harassment at Workplace". The policy is applicable for all employees of the organization, which includes corporate office, branches, depots and manufacturing locations etc.

A Complaint Committee has also been set up to redress complaints received on sexual harassment including such unwelcome sexually determined behavior, whether directly or by implication, such as physical contact and advances, a demand or request for sexual favours, sexually colored remarks, showing pornography, and any other unwelcome physical, verbal or non-verbal conduct of sexual nature.

During the year under review, the HR Dept. had conducted training for awareness on the subject – PoSH, amongst the employees of the Company

During the financial year under review, the Company has not received any complaint of sexual harassment.

The policy of Prevention of Sexual Harassment at Workplace may be accessed on the Companys web link - https:// www.20microns.com/corporate-governance-policies-codes

Industrial Relations

Industrial relations, during the year, remained co-cordial, healthy and harmonious at all the locations of the Company across the country.

General Shareholders Information

General Shareholders Information is given in the Report on Corporate Governance forming part of this Annual Report.

Secretarial Standards

Your company has complied with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

Particulars of Loan, Guarantees or Investments

Loans, guarantee and investment covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report.

Selection and Procedure for Nomination and Appointment of Directors

The Company has a Nomination and Remuneration Committee ("NRC") which is responsible for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The NRC makes recommendations to the Board in regard to appointment of new Directors and Key Managerial Personnel ("KMP") and senior management employees. The role of the NRC encompasses conducting a gap analysis to refresh the Board on a periodic basis, including each time a Directors appointment or re-appointment is required.

Criteria for determining qualifications, positive attributes and independence of a Director

In terms of the provisions of Section 178(3) of the Companies Act,2013 and Regulation 19 of the SEBI (Listing obligation and disclosure Requirements) Regulations,2015, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

• Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

• Positive Attributes - Apart from the duties of Directors as prescribed in the Act the Directors are expected to demonstrate higher standards of ethical behavior, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

• Independence - A Director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Companies Act,2013 the Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Regulations and Obligations Requirements)Regulation, 2015 or any other provisions applicable as the case may be.

Evaluation of Board of Directors

The Board of Directors has carried out an annual evaluation of its own performance, Board Committees and individual directors pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, 2015.

The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as the Board composition and structure, effectiveness of board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are as provided by the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

Remuneration Policy

Pursuant to the provisions of Section 178(3) of the Act and Regulation 19 of the Listing Regulations, 2015, the NRC has formulated a policy relating to the remuneration for the Directors, Key Managerial Personnel (KMP), Senior Management and other employees. The philosophy for remuneration is based on the commitment of fostering a culture of leadership with trust. While formulating this policy, the NRC has considered the factors laid down in Section 178(4) of the Act which are as under:

• That the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully;

• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

• Remuneration to Directors, KMP and Senior Management Employees involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

Remuneration Policy of the Company is available at link: https:// www.20microns.com/corporate-governance-policies-codes.

Remuneration for Independent Directors and Non-Executive-Non-Independent Directors

The Non-Executive Directors, including Independent Directors, are paid sitting fees for attending the meetings of the Board and committees of the Board. As per the Policy, the overall remuneration (including sitting fees and commission) should be reasonable and sufficient to attract, retain and motivate Directors aligned to the requirements of the Company including considering the challenges faced by the Company and its future growth imperatives. The remuneration should also be reflective of the size of the Company, complexity of the business and the Companys capacity to pay the remuneration.

Within the ceiling of 1% of net profits of the Company, computed under the applicable provisions of the Act, the Non-Executive Directors including Independent Directors were also paid a commission, the amount whereof was recommended by the NRC and approved by the Board during FY 2023-24.

The basis of determining the specific amount of commission payable to a Non-Executive Directors is related to their attendance at meetings, role and responsibility as Chairman or member of the Board / Committees and overall contribution as well as time spent on operational matters other than at the meetings.

Board of Directors and meetings

The members of the Companys Board of Directors are eminent persons of proven competence and integrity. Besides experience, strong financial acumen, strategic astuteness and leadership qualities, they have a significant degree of commitment towards the Company and devote adequate time to the meetings and preparation.

The Board meets at regular intervals to discuss and decide on Company/business policy and strategy apart from other regular Board businesses. Intimation of Board Meeting date usually be given in advance to help them plan their schedule and ensure meaningful participation in the meetings. In case of special and urgent business, if the need arises, the Boards/Committees approval is taken by passing resolutions through circulation or by calling Board/Board Committee meetings at shorter notice, by complying with the applicable law.

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Board Meetings and General Meeting(s). The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed to enable the Directors to take an informed decision. The Board of Directors had held 5 (Five) board meetings during FY 2023-24. For further details, please refer to the Corporate Governance Report, which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations, 2015.

Directors and Key Managerial Personnel

The term of Managing Directors namely Mr. Rajesh C. Parikh and Mr. Atil C. Parikh is ending on 31^st March, 2025. Hence, their reappointment for the further period of 5 (five) years and payment of remuneration for term of 3 (three) years w.e.f. 1^st April, 2025 is proposed at the ensuing Annual General Meeting. Further, appointment of Mr. Jaideep Verma as an independent Director is proposed for 2^nd term at the ensuing Annual General Meeting.

In accordance with the Articles of Association of the Company, Mrs. Sejal R. Parikh [DIN # 00140489], Whole-time Director, retires by rotation at this Annual General Meeting and being eligible offers herself for re-appointment. The Board recommends her re-appointment. The board has approved the revision in remuneration w.e.f 01-04-2024 to Mrs. Sejal R Parikh, Whole-time Director and the same will be subject to approval of shareholders in the ensuing Annual General Meeting.

The Board of Directors at its meeting held on 17^th May, 2024, upon recommendations of Nomination and Remuneration Committee, has appointed Mr. Dukhabandhu Rath (DIN: 08965826) as an Additional Director (Category-Independent) and his term of office will conclude at the ensuing Annual General Meeting and notice is being placed before shareholders in the ensuing Annual General Meeting for his appointment for the first term of consecutive 5 years from 17^th May, 2024.

Necessary resolutions have been included in the notice of ensuing AGM for approval of shareholders for appointment of Directors as mentioned above. The Board recommends passing of these resolutions.

None of the Directors of the Company is disqualified under Section 164(2) of the Companies Act, 2013. As required by law, this declaration is also reflected in the Auditors Report.

In accordance with provisions of Section 149 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Mr. Ramkisan Devidayal, Mr. Atul Patel, Dr. Ajay Ranka, Mr. Jaideep Verma and Dr. Sivaram Swaminathan have given a declaration to the Company that they meet the criteria of independence as mentioned in Section 149(6) of the Companies Act, 2013.

Company meets the requirement of Section 203 of the Companies Act, 2013 of having Key Managerial Personnel (KMP) such as Mr. Rajesh C Parikh, Chairman & Managing Director (DIN:00041610), Mr. Atil C. Parikh, CEO & Managing Director (DIN: 00041712), Mr. Narendrakumar R. Patel, Chief

Financial Officer and Mrs. Komal Pandey, Company Secretary are the KMP of the Company.

The composition of the Board, meetings of the Board held during the year and the attendance of the Directors thereat have been mentioned in the Report on Corporate Governance which forms part of this Annual Report.

Independent Directors Declaration

Our definition of ‘Independence of Directors is derived from Regulation 16(1)(b) of the Listing Regulations, 2015 and Section 149(6) of the Act and rules framed thereunder. The Independent Directors have also submitted a declaration that they meet the criteria of independence and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence, pursuant to Regulation 25 of the Listing Regulations, 2015.

Based on the confirmation/disclosures received from the Directors, the following Non-Executive Directors are Independent as on March 31, 2024:

1) Mr. Ramkisan A. Devidayal

2) Mr. Atul H. Patel

3) Dr. Ajay I. Ranka

4) Mr. Jaideep B. Verma

5) Dr. Sivaram Swaminathan

Committees of the Board

The Company has 4 (four) Committees of Directors as on March 31, 2024:

1) Audit Committee

2) Nomination and Remuneration Committee

3) Stakeholders Relationship & Share Transfer Committee

4) CSR Committee

Details of all the committees along with their main terms, composition and meetings held during the year under review are provided in the Report on Corporate Governance, a part of this Annual Report.

Board Diversity

The Company recognizes and embraces the importance of a diverse board in its success. The Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help the Company to retain its competitive advantage.

Familiarization Program for Independent Directors

As trustees of shareholders, Independent Directors play a pivotal role in upholding corporate governance norms and ensuring fairness in decision making. Being experts in various fields, they also bring independent judgment on matters of strategy, risk management, controls and business performance.

At the time of appointing a new Independent Director, a formal letter of appointment is given to the Director, inter alia, explaining the role, duties and responsibilities of the Director.

The Director is also explained in detail the compliances required from him/her under the Act, SEBI Regulations and other relevant regulations. By way of an induction programs in the Company, presentations are also being made to the newly appointed Independent Director on relevant information like overview of the Companys businesses, market and business environment, growth and performance, organizational set up of the Company, governance and internal control processes.

Ongoing familiarization program aims to provide insights into the Company and the business environment to enable all the Independent Directors to be updated of newer challenges, risks and opportunities relevant in the Companys context and to lend perspective to the strategic direction of the Company. The details for familiarization program for the Independent Directors is available on the website of the Company. As required under Regulation 46(2)(i) of the Listing Regulations, 2015 and the same can be accessed at the link:https://www.20microns.com/ corporate-governance-policies-codes.

Significant and material orders passed by the Regulators or Courts

The Stock Exchanges [SEs] had imposed penalty for alleged violation of Regulation 17[1A] of SEBI (LODR) Regulations, 2015, against the report on Corporate Governance filed by the Company for the Quarter ended 30.06.2023, which was pertaining to appointment of Mr. Swaminathan Sivaram as an Independent Director who has exceeded the age of 75 years without prior approval of shareholders. The company had paid the said penalty under protest to the SEs. This was reported to the SEs and the Board of Directors at its meeting held on 25.10.2023.

Similarly, SEs had also imposed penalty for violation of Regulation 17[1A] of SEBI (LODR) Regulations, 2015, against the report on Corporate Governance filed by the Company for the Quarter ended 30.09.2023. The company had paid the said penalty also under protest to the SEs. This was reported to the SEs and the Board of Directors at its meeting held on 25.01.2024.

The Company had made appeal[s] before the Honble Securities Appellate Tribunal (SAT) in this regard. The Honble SAT have pronounced its order in favour of the Company saying that there was no violation by the Company and no penalty could have been imposed on the Company.

The Company had initiated actions for getting the Refunds of the said fines in view of the said order passed by the Honble SAT. The Company has received refund from both stock exchanges (BSE & NSE) for Q1 & Q2 of the FY 24.

Apart from above, no Significant and material orders passed by the Regulators or Courts during the year under review.

A. Statutory Auditors

M/s. Manubhai & Shah LLP, Chartered Accountants (Firm Registration No. 106041W/W100136) were appointed as statutory auditors of the company, at the conclusion of 35^th AGM of the Company. In terms of their appointment made at the 35^th AGM held on 22.07.2022, they are holding office of the auditors as such up to the conclusion of the 40^th AGM and hence, would retire at the conclusion of the 40^th AGM. The Statutory Auditors Report received from M/s. Manubhai & Shah LLP, Chartered Accountants for FY 2023-24 on the financial statement of the Company forms part of this Annual Report. The Statutory Auditors report on the financial statements for FY 2023-24 does not contain any qualifications, reservations or adverse remarks or disclaimer.

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso to Section 143(12) of the Act.

B. Internal Auditors

M/s Lalit R. Mehta & Associates, Chartered Accountants, the Internal Auditors have merged their existing practice with Vadodara based firms and the firm will be continuing its services based on the on-going engagements without any changes but under the revised name M/s V L S & Co.

The Company has appointed M/s. V L S & Co, Chartered Accountants, Vadodara as the Internal Auditors of the Company for the F.Y. 2024-25.

C. Cost Auditors

Your Board has re-appointed M/s. Y. S. Thakar & Co., Cost Accountants in Practice as Cost Auditors of the Company for conducting cost audit for the FY 2024-25. A resolution seeking approval of the members for ratifying the remuneration payable to the Cost Auditors for FY 2024-25 is provided in the Notice to the ensuing Annual General Meeting.

Cost Records

The Cost accounts and records as required to be maintained under Section 148 (1) of Act are duly made and maintained by the Company.

Cost Report

That cost audit report for FY 2023-24 have been filed with in prescribed limit and cost audit report for FY 2023-24 will be filed on or before prescribed time i.e. 30-09-2024

D. Secretarial Auditors

The Secretarial Audit Report for the financial year 2023-24 issued by M/s. Parikh Dave & Associates, Practicing Company Secretaries, Ahmedabad is annexed to this Report. There are no qualifications, observations or adverse remark or disclaimer in the said report.

For the FY 2024-25 Company has reappointed M/s. Parikh Dave & Associates, Practicing Company Secretaries, Ahmedabad as the Secretarial Auditors of the Company to conduct secretarial audit and to ensure compliance by the Company with various Acts applicable to the Company.

Directors Responsibility Statement

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors including audit of internal financial controls over financial reporting by the statutory 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 Companys internal financial controls were adequate and operating effectively during the FY 2023-24. Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, your Directors hereby 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; b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) 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 and operating effectively; f) adequate systems and processes, commensurate with the size of the Company and the nature of its business, have been put in place by the Company, to ensure compliance with the provisions of all applicable laws as per the Companys Global Statutory Compliance Policy and that such systems and processes are operating effectively

DISCLOSURE ABOUT THE APPLICATION AS MADE OR ANY PROCEEDING IS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE (IBC), 2016 DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

During the year under review no application has been made or any proceeding is pending under the Insolvency and Bankruptcy Code (IBC), 2016.

DISCLOSURE ABOUT THE DIFFERENCE BETWEEN THE AMOUNTS OF VALUATION EXECUTED AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUION ALONG WITH THE REASON THEREOF.

During the year under review no valuation has been executed with Bank for one time settlement

ACKNOWLEDGEMENT

TThe Directors wish to convey their deep appreciation to all the employees, bankers, customers, vendors, investors, and consultants/advisors of the Company for their sincere and dedicated services as well as their collective contribution to the Companys performance.

The Directors also thank the Government of India, Governments of various States in India, Governments of various Countries and concerned Government departments for their cooperation.

For and on behalf of the Board of Directors