Bhagwati Autocast Ltd

To the Members,

Your Directors are pleased to present the 41^st ANNUAL REPORT for the financial year ended March 31, 2023. The financial statements are prepared in accordance with Indian Accounting Standards (‘Ind AS'). The performance of the Company is summarized as follows:

(Amount Rs. in Lakhs)

During the year under review, your Company's total income increased by 37.55% as compared to previous year. The profit before tax for the year under review improved at Rs. 1083.10 lakhs as compared to loss of Rs. 133.64 lakhs for the previous year after providing for depreciation and amortisation.

The demand for the casting was strong lead by tractor industry in first two quarters of the financial year, and Company could achieve better utilization of plant capacity.

During the year under review, major raw material prices have gone up substantially during the first quarter of financial year 2223 andthe Company was successful in passing the increase in the input costs to the customers through established price adjustment mechanism.

Also the Company having capacity of 4500 kWp Ground mounted Solar power plant at Village Bamroli, Dist. Patan for captive consumption and working very effectively which saved energy cost around 21.68%.

The Board of Directors have recommended dividend of Rs.2 per Equity Share (20% on the face value of Rs. 10/- each) for the year ended on March 31, 2023 (Previous year Rs. 1 per equity share, i.e. @10%) subject to the approval of shareholders at the ensuing Annual General Meeting.

During the year under review, no amount is appropriated from Profit and Loss Account and transferred to any reserve account.

Pursuant to the provisions of the Companies Act, 2013 read with rules made thereunder, the Company had sent individual notices to the shareholders who have not claimed their dividends for past seven consecutive years. The Company has also advertised the same in the Business Standard and Jay Hind Newspapers dated May 25, 2022 seeking action from the shareholders who have not claimed their dividends for past seven consecutive years. The Company had transferred Rs.84,923/- to the Investor Education and Protection Fund established by the Central Government during the financial year 2022-23, as unclaimed dividend after expiry of seven years for the year ended March 31, 2015. In accordance with Section 124(6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (amended from time time), the Company had also transferred total 4,123 equity shares held by 42 shareholders to the IEPF Authority on November 23, 2022 who have not claimed their dividends for past seven consecutive years from the date of transfer to the unpaid dividend account. The details of such shares transferred have been uploaded on the Company's website http:/ /www.bhagwati.com/investors.html

The Shareholders/ claimants whose shares and unclaimed dividend have been transferred to the IEPF Account may claim the shares or apply for refund by making an application to the IEPF Authority. A details of Nodal officer of the Company appointed by the Board of directors is available at Company's website http://www.bhagwati.com/investors.html

During the year under review, your Company has not accepted or renewed any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

During the year under review, the paid up capital of the Company has remained the same. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity. The Company has also not purchased of its own shares by employees or by trustees for the benefit of employees. Also during the year under review, there was no change in the Authorized share capital of the Company.

During the year under review, the Company's quality management system has been reviewed and confirmed as per the standard ISO 9001:2015 certification through external agency.

Your Company is prompt in making the payment of interest and repayment of loans apart from payment of interest on working capital to the bank and the bank continues their unstinted support in all aspects and the Board records its appreciation for the same.

10. CHANGE IN THE NATURE OF BUSINESS, IF ANY: No change in nature of the business of the Company occurred during the year.

Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, a copy of the annual return for the year ended March 31, 2023 is placed on the website of the Company at http://www.bhagwati.com/investors.html with information available up to the date of this report.

The Information required to be disclosed in the report of the Board of Directors as per the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 is annexed herewith as (Annexure-1).

As per provision of the Companies Act, 2013, Dr. Pravin N. Bhagwati (DIN: 00096799) retires by rotation in the forthcoming Annual General Meeting and being eligible offered himself for reappointment. The Board of Directors recommends his reappointment.

During the year under review, on recommendation of Nomination and Remuneration Committee and the Board of directors, the Members of the Company have approved the appointment of Dr. Pravin N. Bhagwati (DIN: 00096799) as Non-Executive Director (Promoter) and Chairman of the Company effective from October 1, 2022.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct. Also all the Independent directors of the Company have confirmed under Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 and have been registered and members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs.

The Board has opined that all the Independent directors of the Company has possessed relevant Integrity, Expertise and Experience in commensurate with the business of the Company. All Independent Directors of the Company are registered with the Independent Directors Databank as maintained and managed by the Indian Institute of Corporate Affairs. Also all Directors have meets the requirements of proficiency self-assessment test under Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (amended from time to time)

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors of the Company has initiated and put in place evaluation of its own performance, its committees and individual directors. The Nomination and Remuneration Committee has also reviewed the performance of the Board, Committee and all the directors of the Company. The board of directors expressed their satisfaction with the evaluation process.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The said policy is available on the website of the Company at http://www.bhagwati.com/ investors.html.

The Independent directors are regularly informed during meeting of the Board and Committees on the business strategy, business activities, manufacturing operations and issues faced by the foundry. Also the independent directors have been updated with their roles, rights and responsibilities in the Company by specifying it in their appointment letter along with necessary documents, reports and internal policies to enable them to familiarize with the Company's procedures and practices. The details of familiarization programs are available on the website of the Company at http://www.bhagwati.com/investors.html.

Four meetings of the Board of directors of the Company were held during the year under review. The details of composition, meetings, attendance and other details of the Board are reported under Corporate Governance Report which is annexed to this Directors report.Your Company has complied with the Secretarial Standard as applicable to the Company pursuant to the provisions of the Companies Act, 2013.

The Audit Committee comprises Mr. R. J. Shah, Chairman and Ms. R. P Bhagwati, Mr. P H. Buch, Mr. V R. Ambani and Mr. S. C. Mehta as Members. In accordance with provisions of Section 177(8) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has accepted all the recommendations of the Audit Committee during the financial year 2022-23.

The details of composition, meetings, attendance and other details of the Audit Committee and other committees are reported under Corporate Governance Report which is annexed to this Directors report.

The Company has Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and also posted on the website of the Company at http:// www.bhagwati.com/investors.html.

Your Company has not given any loan, investment made, guarantee given or security provided by the Company to any entity under Section 186 of the Companies Act, 2013.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in section 188(1) of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto are disclosed in Form No. AOC -2 is annexed herewith as (Annexure-2).

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business and the same were placed before the Audit Committee and also to the Board for their review and approval on a quarterly basis. The Company has also formulated related party transaction policy and the same is available on the website of the Company at http://www.bhagwati.com/investors.html.

During the year under review, Your Company does not have any subsidiary/Joint Venture/ Associate Company.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith as (Annexure-3).

During the year under review, there were no employees drawing remuneration which is in excess of the limit as prescribed under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (amended from time to time) and holds two percent of the equity share capital of the Company.

Pursuant to the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management discussion and analysis report for the financial year ended March 31, 2023 is forming part of this Annual report is annexed herewith as (Annexure-4).

As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on Corporate Governance for the financial year ended 31st March, 2023 along with requisite certificate confirming compliance with the conditions of Corporate Governance are annexed herewith as (Annexure-5).

Pursuant to provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to submit Business Responsibility and Sustainability Report not applicable to your Company for the financial year ended 31st March, 2023.

Pursuant to provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Cash Flow Statement is part of the Annual Report for the financial year 2022-23. The Company does not have any subsidiaries and hence not required to publish Consolidated Financial Statements.

M/s. Mahendra N. Shah & Co., Chartered Accountants (FRN: 105775W) Ahmedabad were appointed as Statutory Auditor of the Company for a second term of 5 (five) consecutive years, at the 39th Annual General Meeting held on September 23, 2021 upto the conclusion of the 44th Annual General Meeting (AGM) at a remuneration as may be mutually agreed between the Board of directors of the Company and the Auditors.

The report given by the Statutory Auditors is part of the Annual Report. There has been no adverse qualification, observations, adverse remark or disclaimer given by the Auditor in their report.

Pursuant to the provisions of Section 138 of the Companies Act, 2013, the Board of directors of the Company has appointed M/s. Mehta Sheth & Associates, Chartered Accountants (FRN:106238W) Ahmedabad as an Internal auditor 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 Board of directors has appointed M/s. Chirag Shah & Associates, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. Secretarial Audit Report for financial year 2022-23 is annexed herewith as (Annexure-6) and the Secretarial auditor has not made any adverse comments or given qualification, reservation or adverse remarks or disclaimer in their report.

The Board has appointed M/s. Chirag Shah & Associates, Company Secretaries, Ahmedabad as Secretarial auditor of the Company for the financial year 2023-24.

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. In this connection, the Board of Directors of the Company has on the recommendation of the Audit Committee, approved the appointment of M/s. Kiran J. Mehta & Co. (FRN: 000025), Cost Accountants, Ahmedabad as the cost auditor of the Company for the financial year ending March 31, 2024. 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 member's ratification for the remuneration payable to M/s. Kiran J. Mehta & Co., Cost Accountants placed in the notice convening the ensuing Annual General Meeting.

During the year under review, your Company has maintained cost accounts and records as prescribed under Section 148 of the Companies Act, 2013 and rules made thereunder. Cost audit report for the financial year ended 31st March, 2022 was filed with the Central Government within the stipulated time on 1st September, 2022.

During the year under review, the auditors have not reported any instances of frauds committed in the Company by its officers or employees to the Audit Committee under section 143(12) of the Companies Act, 2013.

In terms of Section 134(3) of the Companies Act, 2013, in relation to the Financial Statements for FY 2022-23, your Directors, to the best of their knowledge and belief, confirm that:

(a) in 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 and loss 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 this Act 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 were operating effectively; and

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

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks in the internal and external environment, along with the cost of treating risks and incorporates risk treatment plans in its strategy, business and operational plans.

Your Company, through its risk management process, strives to contain impact and likelihood of the risks within the risk appetite as agreed from time to time with the Board of Directors.

There are no risks which in the opinion of the Board threaten the existence of your Company.

Many initiatives have been taken to support business through organizational efficiency, process change support and various employee engagement programmes which has helped the Organization to achieve higher productivity levels. A significant effort has also been undertaken to develop leadership as well as technical/ functional capabilities in order to meet future talent requirement.

The Company has adopted a Code of Conduct for Prohibition of Insider Trading with regulates trading in securities by the Directors and designated employee of the Company. The Board is responsible for implementation of the Code. The code requires preclearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employee while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading window is closed. The relevant policy is available on the Company's website.

The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories, i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the Depository system, members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid.

In accordance with Section 135 of the Companies Act, 2013 and Rules framed thereunder, norms of Corporate Social Responsibility (‘CSR') have been applicable to the Company at financial year ended March 31, 2023. Accordingly, the Board of directors has constituted CSR Committee comprising Ms. R. P Bhagwati, Chairperson, Mr. P H. Buch, Mr. V R. Ambani and Mr. S. C. Mehta as Members. The Company will carry out CSR activities as per policy in compliance with Companies Act, 2013 during financial year 2023-24. The details of CSR Composition and CSR policy are available on website of the Company at http://www.bhagwati.com/investors.html.

The Company has an internal control system, commensurate with the size, scale and complexity of its operations. To maintain its objectives and independence, the internal Audit reports to the Audit Committee of the Board.The Internal Auditor monitors and evaluates the efficiency and adequacy of Internal Control System of the Company, its compliance with operating system, accounting procedures and policy of the Company. Based on the report of internal audit function, process owners undertake corrective action and thereby strengthen the controls. Significant audit observation and corrective actions thereon are presented to the audit committee of the board regularly.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

(i) No significant or material orders were passed by any regulator or court or tribunal which impacts the going concern status and Company's operations in future.

(ii) No material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

(iii) the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

(iv) the details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company's executives, staff and workers.