Electrotherm (India) Ltd Directors Report

To,

The Members

Electrotherm (India) Limited

Your Directors have pleasure in presenting the 38th Annual Report on the business and operations of the Company and Audited Financial Statements for the year ended on 31^st March, 2024.

FINANCIAL SUMMARY OR HIGHLIGHTS:

The standalone financial performance of the Company fortheyearendedon31 ^st March, 2024 is summarized below:

(Rs. In Crores)

Particulars	2023-2024	2022-2023
Total Income	4275.84	3080.74
Total Expenses	3851.36	2939.50
Profit / (Loss) before Finance Costs, Depreciation and Amortisation	424.48	141.24
Less : Finance Costs	59.82	66.07
Depreciation and Amortisation Expenses	45.23	47.08
Profit / (Loss) before Exceptional Items and Tax	319.43	28.09
Less : Exceptional Items	-	(104.75)
Profit / (Loss) before Tax	319.43	(76.66)
Less: Tax Expenses	-	-
Profit / (Loss) for the Year	319.43	(76.66)
Other Comprehensive Income	(2.24)	(2.03)
Total Comprehensive Income	317.19	(78.69)
Earning Per Equity Share	250.73	(60.17)

STATE OF THE COMPANYS AFFAIRS AND OPERATIONS:

The Company is engaged in the business of manufacturing induction furnaces, TMT Bars, Ductile Iron Pipes (DI Pipes), Electric Vehicles, Transformers etc. of the During the year ended on 31st March, 2024, the total income of the Company was Rs. 4275.84 Crores compared to Rs. 3080.74 Crores of previous financial year. The Profit before Finance Costs, Depreciation and Amortisation statements to Rs. 141.24 Crores ofpreviousfinancialyear.Thenetprofitforthe year 2023-2024 are prepared in compliance with current financial year was Rs. 319.43 Crores as compared to net loss of Rs. 76.66 Crores of previous financial year. A detailed analysis performancefortheyearisincludedintheManagementDiscussion 2015 ("Listing Regulations"), and Analysis, which forms part of this Annual Report.

CHANGE IN NATURE OF BUSINESS:

During the financial year, there was no change in the nature of business carried out by the Company.

TRANSFER TO RESERVES:

During the financial year under review, no amount has been transferred to the General Reserve.

DIVIDEND:

In view of accumulated lossesduringthepreviousfinancialyears and fund requirements, the Board of Directors of the Company do not recommend any dividend on Equity Shares and on Preference Shares for the year ended on 31^st March, 2024.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANICAL POSITION AFTER THE END OF FINANCIAL YEAR:

There are no material changes and commitments, affecting the Company which have occurred between financial position the end of the financial statements relate and the date of the report.

CONSOLIDATED FINANCIAL STATEMENTS: of the Company for the The consolidated financial was Rs. 424.28 Crores as compared applicable financial provisions of the Companies Act, 2013, Indian Accounting Standards ("Ind AS") and SEBI (Listing Obligations and Disclosure Requirements) Regulations,which form part of this

Annual Report.

SUBSIDIARY / JOINT VENTURE COMPANIES:

The Company has the following subsidiaries / joint venture companies as on 31^st March, 2024:

1. Hans Ispat Limited

2. Electrotherm Services Limited

3. Shree Ram Electro Cast Limited

4. ET Elec-Trans Limited

5. Jinhua Indus Enterprises Limited

6. Jinhua Jahari Enterprises Limited (Step-down Subsidiary Company)

7. Bhaskarpara Coal Company Limited (Joint Venture Company)

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financialstatement including the highlights of the performance of the subsidiary / joint venture companies in Form AOC-1 is attached as "Annexure A" to this Report.

Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries / joint venture companies, are available on the website of the company https://www.electrotherm.com/ investors/annual-reports.

During the financial year 2023-2024, none of the companies have become or ceased to be subsidiaries, joint ventures or associate companies.

NUMBER OF BOARD MEETINGS:and Remuneration During the financial year 2023-2024, four (4) Board Meetings were held. Details of the composition of the Board and its Committees and of the meetingsheld, attendance of the Directors at such meetings and other relevant details are provided in the Corporate Governance Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP): Retirement by Rotation:

PursuanttotheprovisionsofSection152 of the Companies Act,

2013 read with the Companies(AppointmentandQualification of Directors) Rules, 2014 and Articles of Association of the Company, Mr. Suraj Bhandari (DIN: 07296523), retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

Appointment / Cessation/Continuation of Directors:

R. Sarda (DIN: 00938666) Duringthefinancial was re-appointed as Independent Director of the Company, for the second term of 5 (five) years with effect from 25 th May, 2023 upto 24th May, 2028 as per the recommendation of the Nomination and Remuneration Committee and approval of the Board of Directors at their meeting held on 23 rd May, 2023 and 24 had approved ^th May,2023 her re-appointment at the 37th Annual General Meeting on 9^th August, 2023.

Further, pursuant to Regulation 17(1D) of the SEBI LODR

Regulations 2015, the continuation of Mr. Mukesh Bhandari (DIN: 00014511) as a Non-Executive Director of the Company with effect from1 st April, 2024, is being placed before the shareholders for approval at the ensuing 38th Annual General Meeting.

Key Managerial Personnel:

Executiv Mr.ShaileshBhandari(DIN:00058866)isthe Chairman and Mr. Suraj Bhandari (DIN: 07296523) is the Managing Director of the Company.

The Board of Directors based on the recommendation of the Nomination and at their th February, 2024, approved the re-designation

Managing Director as Executive Vice Chairman with effect 9^th February, 2024 for the balance tenure of his appointment upto 31st January, 2026. Thereafter, the shareholders of the Company have approved such re-designation of Mr. Shailesh Bhandari, Managing Director as Executive Vice Chairman through postal ballot, on 19^th March, 2024 and he is entrusted withsubstantialpowersofmanagementofaffairsoftheentire Company except Engineering and Technologies Division of the Company. Further, except for the change in designation and powers as mentioned herein, allothertermsandconditionsof his re-appointment as approved by the Board of Directors at their meeting held on 30th January, 2023 and the shareholders through postal ballot on 28th March, 2023, are remain unchanged.

Further, the Board of Directors based on the recommendation of the Nomination respective th February, 2024, approved meetings of Mr. Surajthe elevation Bhandari (DIN: re-designation 07296523) from Whole-time Director to Managing Director with effect from 9th February, 2024 for the balance tenure of his appointment upto 12th November, 2025. Thereafter, the shareholders of the Company have approved such elevation and re-designation of Mr. Suraj Bhandari as a Managing Director through postal ballot, on 19^th March, 2024 and he is entrusted with substantial powers of management to manage the affairs of ‘Engineering and Technologies Division of the Company. Further except for the change in designation and powers asmentionedherein, all other terms and conditions of his re-appointment as approved by the Board of Directors at their meeting held on 2nd August, 2022 and the shareholders at the 36th Annual General Meetingheld on 31 st August, 2022 are remain unchanged.

During the financialyear 2023-2024, Mr. Jigar Shah resigned as a Company Secretary & Compliance 30th January, 2024. Mr. Fageshkumar R. Soni was appointed as a Company Secretary & Compliance Officer with effect from 8 ^th February, 2024.

Except above, there was no change in the Key Managerial Personnel during the year under review. held Further, Mr. Chirag Shah resigned as a Chief Financial with effect from 12^th April, 2024.

Declaration of Independence:

The Company has received declaration of Independence as stipulated under Section 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing and Disclosure Requirements) Regulations, 2015 Independent Directors confirming of independence and not disqualified from appointment / continuingas an Independent Director and they have complied with the code of conduct for Independent Directors prescribed in Schedule IV of the Companies Act, 2013. Further, pursuant to Companies (Creationand Maintenance of databank of Independent Directors) Rules 2019, Independent Directors registered their name in the Independent Directors Databank. of Mr. Shailesh Bhandari (DIN: 00058866),

Annual Evaluation of Boards Performance:

In terms of the provisions of Section with related parties Companies Act, 2013 read with Rule 8(4) of the Companies (Accounts) Rules, 2014 and Listing Regulations,the Nomination and RemunerationCommittee has carried out the annual evaluation of performance of the Board and the Board of Directors has carried out the annual evaluation of the performance of individual directors. The manner in which the evaluation was carried out is provided in the Corporate Governance Report, which is part of this Annual

Report.

Nomination and Remuneration Policy:

The Board of Directors of the Company has, on the recommendation of Nominationand Remuneration Committee, framed and adopted a policy for selection and appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration. The salient aspects of the Nomination and Remuneration Policy, covering the policy on appointment and remuneration of Directors and other matters have been outlined in the Corporate Governance Report which forms part of this Annual Report. The said policy is available on the website of the Company at https://www.electrotherm.com/investors/codes-and-policies .

PARTICULARS OF INVESTMENT, LOAN AND GUARANTEE:

Particulars of investment made, loan and guarantee given as covered under the Section 186 been provided in the Note No. 5, 6 & 32 of the notes to the financial statements which form part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Act, Pursuant to the provisions of Section

2013 read with the Companies (Corporate Social Responsibility Committ Policy)Rules,2014,theCompanyhasconstitutedaCSR

The Board of Directors on the recommendation of Corporate Social Responsibility (CSR) Committee had approved the Corporate Social Responsibility Policy. The CSR Policy is available on the website of the company at https://www.electrotherm.com/investors/codes-and-policies. The composition and terms of reference of the CSR enclosed Corporate Governance

Report.

Activities during the financialyear 2023- TheAnnualReportonCSR

2024 forming part of this Boards Report is annexed herewith as

"Annexure B" to this report.

RELATED PARTY TRANSACTIONS:

The Company has entered into related party transactions on arms length basis. During the year, the Company had not entered into any contract / arrangement / transaction related parties which with could be considered material in accordance with the Policy of the Company on materiality of related party transactions. The Policy on materiality of related party transactionsand on dealing with related party transactions as approved by the Board may be accessed on the Companys website at https://www.electrotherm. com/investors/codes-and-policies.

There are no materially significant related party transactions that may have potential conflict with interest of the Company Thedetails of transaction thefinancialyear ended on 31st March, 2024 is given in Note No. 43 of the financial statements which is part of this Annual Report of the Company. its Committees

FIXED DEPOSIT:

During the financial year 2023-2024, the Company has not accepted any deposit within the meaning of Section Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. Further there are no outstanding deposits as on 31^st March, 2024.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) of the Companies Act,

Directors state that : in preparationof the annual accounts for the financial year ended on 31st March, 2024, the applicable accounting standards had 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 financialyear and of the profit or loss of the company for that period; the Directors had taken proper and sufficient care for the the Companies Act, 2013, has 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 frauds and other irregularities; d) the Directors had prepared the Annual Accounts on a going concern basis; e) the Directors had laid down internal financialcontrols to be followed by the company and that such internal financial controls are adequate and were operating effectively; and the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS AND AUDITORS REPORT:

? Statutory Auditor:

Pursuant to the provisions of Section applicable provisions of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. Hitesh Prakash Shah & Co., Chartered Accountants (Firm Registration No. 127614W), Ahmedabad, were appointed as Statutory Auditor of the Company at the 36th Annual General Meeting held on 31st August, 2022 for a second term of five (5) years beginning from the conclusion of the 36th Annual General Meeting till the conclusion of the 41 st Annual General Meeting to be held in the year 2027.

Auditors Report:

In the Independent Auditors Report for the year ended on 31st March, 2024, there are certain matters of emphasis related to (a) Note No 15(c) in respect of delayed / non-payment of principal and Interest due to lenders of the loan and lenders of are yet to confirm the revised repaymentschedule (b) Note & Co., Company No 15(f) related to default in complying with the terms and conditions of settlement entered with the Banks / ARCs and the uncertainty about the amount of final liability of the company (c) Note No 15(g) and Note No 36 in respect of defaults in repayment of the loan and treatment in the books of account of the assignment / settlement of the debts of various banks and the financial Institutions 41 in respect of pending enquiries / notices / summons identify litigation / recovery / fraud proceedings against the company and the Directors of the Company (e) Note No 39(b) & (e) in respect of confirmation / reconciliation / regrouping and classification Payable", "Advance from Customers", "Advances Recoverable in Cash or Kind", and "Advance to suppliers and other parties" and the amount of inventories as the same are taken by the management.

The relevant Notes to accounts related to these ed by emphasis are self-explanatory. ed the default disclosures With regard tothequalification in the Independent Auditors Report in reference to Note No. 38(b) of non-provision of interest on NPA accounts of bank, on approximate basis of Rs. 116.10 Crores, for the year under consideration and total amount of such unprovided interest till date is Rs. 784.72 Crores, the Board of Directors submits that the loan account of the Company have been classified as Non-Performing Assets (NPA) by Rare Asset Reconstruction assignee of Indian Overseas Bank) and the said Bank / ARC has not charged interest on the said account and therefore provision for interest has not been made in the books of accounts. required pursuant to

? Cost Auditor:

Pursuant to the consent and

H. Savaliya & Associates, Cost Accountants, Ahmedabad and as per Section 148 and other applicable provisions if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of the Company has on the recommendation of the Audit Committee appointed him Cost Auditor, to conduct the cost audit of the Company for the ending on 31 financial st March, 2025, at a remuneration as mentioned in the notice convening the Annual Meeting, subject to ratification of Members of the Company.

Maintenance of cost records as specifiedby the Central Government under sub-section Companies Act, 2013, is applicable to the Company and accordingly such accounts and records are made and maintained by the Company. s on periodicalk

? Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, Regulation 24A of the SEBI (LODR) Regulations Company has appointed M/s. Bharat Prajapati Secretary in Practice to conduct Company. The Secretarial Audit Report in Form No. MR-3 is annexed herewith as "Annexure C" to this report.

With regard to qualifications of the Secretarial Auditor, the Board of Directors submits as under: (a) With regard to non-appointment of Chief Financial Officer, the Company was in process to suitable candidate for the said post and appointed Mr. Chirag Shah as a Chief Financial Officer with effect from 24^th May, 2023. of few accounts of "Trade Receivables", "Trade (b) With regard to non-submission of disclosures of defaults on payment of interest / repayment of principal amount on loans from banks / financial institutions for the from 1st April, 2023 till 31st March, 2024, due to the legal implications under various laws for acknowledgement of submitt liabilityofdefault,thesamewasnot of Company. However, the Company has evaluated the sameinduecourseand from June 2024 onwards.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The information required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) the Companies (Accounts) Rules, 2014 with respect to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in "Annexure D" which forms part of this Annual Report.

PARTICULARS OF EMPLOYEES:

Theinformation 197 of the Companies

Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of receivedfrom M/sV. the employees are given in "Annexure E" to this Annual Report.

AUDIT COMMITTEE:

The composition, terms of the reference attendance at the covered in the enclosed Corporate Governance Report.

As on 31st March, 2024, the Audit Committee consists of (i) Mr. Pratap Mohan, Independent Director as Chairman (ii) Mr. Dinesh remuneration by the Mukati, Independent Director as Member and (iii) Ms. Nivedita R.

Sarda, Independent Director as Member.

RISK MANAGEMENT POLICY: (1) of Section 148 of the

The Risk Management covers various criteria for identification of key risk, action plans to mitigate those risks,reviewandreportingof ris etc. identified

In the opinion of the Board of the Directors of the Company, there are elements of risks in the nature of various legal cases including for recovery of dues and attachment of certain properties which may threaten the existence of the Company.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE

REGULATORS:

Presently, there are certain significant and material orders passed by the regulator / court / tribunal which may impact the Company and its operations in future as mentioned in Note No. 37 & 41 of the standalone financial statements which is part of this Annual Report year 2023-2024,

CORPORATE GOVERNANCE:

In compliance with the provisions of Listing Regulations, a separate report on Corporate Governance along with a certificate from Practicing Company Secretary regarding the status of conditions of corporate governance forms a part of this Annual

Report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM:

The Company is committed to highest standards of ethical, moral and legal business conduct. Accordingly, the Board of Directors has formulated Whistle Blower Policy / Vigil Mechanism in compliance with the provisions of Section 177(10) of the Companies Act, 2013 and Regulation 22 of the Listing Regulations.The policy provides for a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. More details of the Whistle Blower Policy / Vigil Mechanism are explained in the Corporate Governance Report. The Whistle Blower Policy / Vigil Mechanism is available on the website of the Company at https://www.electrotherm.com/investors/codes-and-policies.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulation 34(2)(e) read with Part B of Schedule V of the Listing Regulations, Management Discussion and Analysis Report is annexed after the Boards Report and form a part of this Annual

Report.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section

Act, 2013, the Annual Return. in form of Form MGT 7 as 31st March, 2024 is available on the website of the Company at https://www.electrotherm.com/investors/annual-reports .

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL

CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS: e bank / financial The Company has put in place adequate internal financial with reference to the financialstatements. During the financial year, such internal financial controls were operating effectively and commensurate with the size, scale and complexity of the Company and the nature of business of the Company.

SECRETARIAL STANDARDS:

During the year under review, the Company has complied with the applicable Secretarial Standards issued by The Institute Secretaries of India (ICSI).

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT

WORKPLACE:

The Company is committed to provide a work environment that ensures every employee is treated with dignity, respect and afforded equal treatment. The Company has complied with the provisions relating to the constitutionof Internal Complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013andduringthefinancialyear, the Company has not received any complaints under the said Act.

OTHER DISCLOSURES: there was no a) Duringthefinancial change in authorized share capital, subscribed and paid-up share capital of the Company. Also, there was no reclassification / subdivision in authorized share capital of the Company. b)compliance There was no reduction of share capital or buy back of shares or change in capital resulting from restructuring. c) The Company has not issued equity shares with differential rights as to dividend, voting or otherwise. d) The Company has not issued sweat equity shares to its directors or employees. e) The Company does not have any Employees Stock Option Scheme for its Employees / Directors. f) During the financialyear 2023-2024, the Company has not made allotment of any securitiesand as such, the requirement for obtaining credit rating was not g) There is no money lying to unpaid / unclaimed dividend account pertaining to any of the previous years with the Company. As such the Company is not required to transfer such amount to the Investor Education and Protection Fund established by the Central Government. h) The Auditors has not reported any frauds under sub-section (12) of Section. 143 ofthe Companies Act, 2013 i) The details of difference between amount of valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or financial institutionsalong with the reasons thereof is not applicable, as there was no valuation done at the time of one time settlement with Bank / financial

j) There were two petitions Insolvency and Bankruptcy Code (IBC) at the beginning of the year and in view of the settlement / restructuring with the institution, both the petitionswere disposed of during the current financial year as mentioned controls Note No. 37(d) of the standalone financial statements. Further there are certain pending petitions before the Honble National it is Company Law Tribunal (NCLT), Ahmedabad and inspection / investigation Note No. 41 of the standalone financial statements which is part of this Annual Report.

of Company

APPRECIATION:

Your Directors wish to place on record their appreciation for the valuable co-operation and support received from the customers and suppliers, various financial institutions, banks, government authorities, auditors and shareholders during the year under review to place on record their deep sense of appreciation for the devoted services of the Executives, Staff and Workers of the Company.

For and on behalf of the Board of Directors

Electrotherm (India) Limited

 

Shailesh Bhandari	Suraj Bhandari
Executive Vice Chairman	Managing Director
DIN : 00058866	DIN: 07296523

 

Place : Ahmedabad

Date : 10th August, 2024