RIR Power Electronics Ltd

TO THE SHAREHOLDERS

Dear Members,

Your Directors have pleasure in presenting the 55th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended 31st March, 2024.

FINANCIAL RESULTS AND OPERATIONS

(Amt. in Lakhs)

STANDALONE

During the financial year 2023-24, your Company reported total revenue of 6955.04 Lakhs as against 6001.74 Lakhs last year thereby reporting a growth of 15.88 % on yearly basis. Earnings before Interest, Tax and Depreciation and Amortization (EBITDA) for the year increased by 17.22% to 1275.49 Lakhs as compared to 1088.15 Lakhs last year. Net Profits of the Company increased by 19.09% during the year at 795.70 Lakhs as against 668.15 Lakhs last year.

CONSOLIDATED

During the financial year 2023-24, your Company reported total revenue of 6869.62 Lakhs as against 5943.12 Lakhs last year thereby reporting a growth of 15.59 % on yearly basis. Earnings before Interest, Tax and Depreciation and Amortisation (EBITDA) for the year increased by 16.27 % at 1182.80 Lakhs as compared to 1017.28 Lakhs last year. Net Profits for the year increased by 17.71 % during the year at 702.86 Lakhs as against 597.12 Lakhs last year.

According to Section 129(3) of the Act, the consolidated financial statements of the Company and its subsidiary are prepared in accordance with the relevant Indian Accounting Standards specified under the Act and the rules framed thereunder forming part of this Annual Report. A statement containing the salient features of the financial statements of the Company's subsidiary in Form AOC-1 is given in Annexure I to the Directors' Report.

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

BRIEF HIGHLIGHTS OF BUSINESSES OF SUBSIDIARY COMPANY VISICON POWER ELECTRONICS PRIVATE LIMITED

Visicon Power Electronics Private Limited is into the business of manufacturing Silicon Carbide (SiC) wafers and power electronic devices through Epitaxial process. The phase I of the project is expected to start the commercial production from next financial year. The total revenue of Visicon Power Electronics Private Limited for the Financial year was 10.45 Lakhs and the Company incurred Net Loss of 21.16 Lakhs during the said period.

DIVIDEND

Your Directors are pleased to recommend a Dividend of 2/- (i.e. 20%) per equity share having face value of 10/- each for the financial year ended 31st March, 2024. The said dividend on equity shares is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company. If approved, the total dividend payout would result in cash outflow of 139.14 Lakhs for the financial year 2023-24.

TRANSFER TO RESERVES

During the year under review, no amount of profits was transferred to General Reserve.

EQUITY SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2024 was

69,572,400/-. During the year under review, the Company has not issued any shares with differential voting rights nor has granted any stock options or sweat equity and does not have any scheme to fund its employees to purchase the shares of the Company.

ISSUE OF PREFERENTIAL WARRANTS TO INSTITUTIONAL INVESTORS

The Company has allotted 10,00,000 Convertible Warrants of 10/- each to Institutional Investors at issue price of 855/- per warrant. The Company has received 25% of the issue price per warrant i.e. 213.75/- (Rupees Two Hundred and Thirteen and Seventy Five paise only) as upfront payment aggregating to 21,37,50,000/- (Rupees Twenty One Crores Thirty Seven Lakhs Fifty Thousand only) for allotment of 10,00,000 Convertible Warrants as per the terms of the issue.

Each Warrant, so allotted, is convertible into or exchangeable for one fully paid-up equity share of face value of 10/- (Rupees Ten only) of the Company in accordance with the provisions of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, subject to receipt of balance consideration of 641.25/- per warrant (being 75% of the issue price per warrant) from the allottees to exercise conversion option against each such warrant.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act 2013 ("the Act") read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of the Company, Mr. Piyush K Shah, Director of the Company, will retire by rotation and being eligible, offers himself for re-appointment. The Board recommends his re-appointment for the consideration of the members of the Company at the ensuing Annual General Meeting.

The Board at its meeting held on 8th November, 2023, appointed Mr. N. Ramesh Kumar (DIN: 08257872) and further in its meeting held on 24th May, 2024, appointed Ms. Sonali Mehta (DIN : 10446751) as an Additional Director of the Company pursuant to Section 161 of the Act and Article 147 of the Articles of Association of the Company. Mr. N. Ramesh Kumar (DIN: 08257872) was appointed as an Additional Director under the category of Non-Executive, Non-Independent Director, subject to the approval of members. Mr. N. Ramesh Kumar holds office as an Additional Director, till the conclusion of the ensuing 55th Annual General Meeting of the Company. A notice under Section 160 of the Act, has been received from a member nominating the candidature of Mr. N. Ramesh Kumar for appointment as Non-Executive, Non-Independent Director of the Company. The nomination and remuneration committee and the Board have considered and recommended to the members for appointment of Mr. N. Ramesh Kumar as Non-Executive, Non-Independent Director and a resolution seeking shareholder's approval for his appointment forms part of the Notice of the ensuing 55th AGM.

Ms. Sonali Mehta (DIN: 10446751) was appointed as an Additional Director under the category of Non-Executive, Non-Independent Director, subject to the approval of members. Ms. Sonali Mehta holds office as an Additional Director, till the conclusion of the ensuing 55th Annual General Meeting of the Company. A notice under Section 160 of the Act, has been received from a member nominating the candidature of Ms. Sonali Mehta for appointment as Non-Executive, Non-Independent Director of the Company. The nomination and remuneration committee and the Board have considered and recommended to the members for appointment of Ms. Sonali Mehta as Non-Executive, Non-Independent Director and a resolution seeking shareholder's approval for her appointment forms part of the Notice of the ensuing 55th AGM.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Act read with the Schedules and Rules issued thereunder as well as Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Mrs. Bhavna H. Mehta – Managing Director, Mr. R. G. Trasi – C.E.O. and Mr. Bhavin P. Rambhia – Company Secretary are the Key Managerial Personnel of your Company in accordance with the provisions of Section 2(51), 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria for performance evaluation of Independent and Non-Independent Directors. The board expressed their satisfaction with the evaluation process.

PUBLIC DEPOSITS

During the year under review, your Company has not accepted any deposits within the meaning of Section 73 and 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force).

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

During the period under review, your Company has given a loan of 227.90 Lakhs to Visicon Power Electronics Private Limited, a wholly owned subsidiary company. Your Company has not granted any guarantee.

The Company has invested an amount of 210.38 Lakhs in the equity capital of Visicon. The particulars of loans and investments covered under the provisions of Section 186 of the Act have been disclosed in the financial statements.

(1) Statutory Auditors :

M/s. Kirtane & Pandit LLP; Chartered Accountants (Firm Regn. No. 105215W/W100057), were appointed as the Statutory Auditors of the Company for a tenure of 5 (five) years, to hold office from the conclusion of the 50th AGM held on Tuesday, 24th September, 2019 until the conclusion of the ensuing 55th AGM. The Statutory Auditors tenure of 5 (five) years as Statutory Auditors concludes at this ensuing AGM.

The Company has received confirmation from the Statutory Auditors to the effect that their appointment, if made, will be in accordance with the limits specified under the Act and the firm satisfies the criteria specified in Section 141 of the Act read with Rule 4 of the Companies (Audit and Auditors) Rules, 2014.

The Board of Directors of the Company on the recommendation of the Audit Committee has re-appointed M/s. Kirtane & Pandit LLP as the Statutory Auditors of the Company pursuant to Section 139 of the Act for a second term of 5 (five) years to hold office from the conclusion of the ensuing 55th AGM till the conclusion of 60th AGM of the Company to be held in the year 2029, subject to approval by the Members at the ensuing AGM.

The Board recommends to seek consent of its members at the ensuing AGM on re-appointment of M/s. Kirtane & Pandit LLP as Statutory Auditors for tenure of 5 (five) years, to examine and audit the accounts of the Company during the said period.

(2) Secretarial Auditors :

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had appointed M/s. Neetu Agrawal & Co., a firm of Company Secretaries in Practice (C.P. No. 9272) to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure III to the Directors Report.

The Auditors Report and the Secretarial Audit Report for the financial year ended 31st March, 2024 do not contain any qualification, reservation, adverse remark or disclaimer.

ANNUAL RETURN

In accordance with Section 92(3) of the Act, and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the company's website at https://investors-ruttonsha.tantra-gyan.com/financial_result_and_report_pdfs/RZuWGmnYL8hKyALUlyuhOfNToumsgDLBB64cN7eV/Form_MGT_7-2022-23.pdf

RELATED PARTY TRANSACTIONS

Pursuant to the provisions of Section 134 of the Act, read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of all contracts or arrangements entered into by the Company with related parties have been done on arm's length basis and in the ordinary course of the business. Hence, disclosure in Form AOC – 2 in terms of Section 134 of the Act is not required. Related party disclosures as per the Indian Accounting Standard 24 (Ind AS 24) have been provided in Note No.35 of the Notes forming part of the financial statements.

None of the related party transactions entered into by the Company during the financial year, were materially significant, warranting member's approval under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including amendments thereunder.

RISK MANAGEMENT

The Company has in place adequate risk management system which takes care of risk identification, assessment and mitigation. Your Company has adopted a Risk Management Policy which establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk. The risk management framework defines the risk management approach of the Company and includes periodic review of such risks and also documentation, mitigating controls and reporting mechanism of such risks.

There are no risks which in the opinion of the Board threatens the existence of your Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis which forms part of this report.

INTERNAL CONTROL SYSTEMS AND ADEQUACY

The Company has an effective internal control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures. The Company's internal control system is commensurate with its size, scale and complexities of its operations. The internal and operational audit is entrusted to M/s. Bhandarkar & Kale, Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisals of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Audit Committee of the Board, Statutory Auditors and the Business Heads are periodically appraised of the internal audit findings and corrective action taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board.

REMUNERATION AND NOMINATION POLICY

A Committee of the Board named as "Nomination and Remuneration Committee" has been constituted to comply with the provisions of Section 178 of the Act, and to recommend a policy of the Company on Directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, payment of remuneration to them and evaluation of their performance and to recommend the same to the Board from time to time.

BOARD AND COMMITTEE MEETINGS

Six meetings of the board were convened and held during the year.

The Board has constituted an Audit Committee with Mr. Kisan R. Choksey as Chairman and Mr. Pravin G. Shah; Mr. Piyush K. Shah and Mr. Kaushal M. Mehta as members. There has not been any instance during the year when recommendations of the Audit Committee were not accepted by the Board.

DIRECTORS' RESPONSIBILTY STATEMENT

In terms of Section 134 (5) of the Act, the directors of your Company confirm that :

i) in the preparation of the annual accounts for the financial year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) 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 as at 31st March, 2024 and of the profit of the Company for the financial year ended 31st March, 2024;

iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the directors have prepared the annual accounts on a going concern basis;

v) 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; and

vi) the directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, as the amount to be spend on CSR activities does not exceed 50 Lakhs, hence CSR committee has not been constituted and the function of such committee is being discharged by the board of directors of the company.

As part of its initiatives under CSR, the Company has identified various projects / activities in accordance with Schedule VII of the Act. The details of CSR activities undertaken during the financial year 2023-24, as required under Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014, are annexed as Annexure - II and forms part of this report.

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

As required by the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace with a mechanism of lodging complaints. The Policy aims to provide protection to female employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee to inquire into complaints of sexual harassment and recommend appropriate action. During the year under review, no complaints were reported to the Board.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts that would impact the going concern status of the Company and its future operations.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information under Section 134 (3)(m) of the Act read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 for the year ended 31st March, 2024 is given below and forms part of the Director's Report.

(a) Conservation of Energy :

(i) Steps taken or impact on conservation of energy :

1. Adequate steps for energy conservation, power factor improvement have been taken wherever feasible.

2. For effective treatment of effluents the Company has constructed an effluent treatment plant. Waste water generated from manufacturing process is treated/recycled at Effluent Treatment Plant and used for internal consumption and plantation.

3. There is adequate provision for the treatment of fumes resulting from the use of Sulphuric, Nitric, Hydrofluoric and other acids required for production.

4. Replacement of the conventional light fittings with LED lighting has resulted in lower power consumption for lighting.

(ii) Steps taken by the Company for utilizing alternative source of energy :

The Company has installed 10Kva three phase Roof Top Solar Panels at Baska Factory alongwith with online Inverter based system as an alternate means of power and to encourage energy conservation. This solar power plant is based on SPV (Solar Photovoltaic Cells) connected to grid.

(iii) Capital Investment on energy conservation equipments :

The Company continuously makes investments in its facility for better maintenance and safety of the operations. The Company has undertaken efforts to rectify the shortfalls in the existing facilities in order to reduce the energy consumption by setting up efficient facilities.

(b) Technology Absorption

(i) Efforts made towards technology absorption and benefits derived like product improvement, cost reduction, product development or import substitution : The Company has received complete technical know how for Silicon Rectifiers and Silicon Controlled Rectifiers upto 30 mm devices from M/s. International Rectifier Corporation, California, U.S.A. The erstwhile Orient Semiconductors Pvt. Ltd., now amalgamated with the Company, received technical know how from Silicon Power Corporation, U.S.A. (an ex. General Electric facility) for manufacturing semiconductor devices upto 125 mm. Efforts towards technology absorption include continued efforts for process improvements and improved product types/ designs in order to improve the efficiency, productivity and profitability of the Company.

(ii) Information regarding technology imported, during last 3 years : Nil (iii) Expenditure incurred on Research and Development : Nil

(c) Foreign Exchange Earnings and Outgo

PARTICULARS OF EMPLOYEES

In terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company does not have any employee who is employed throughout the financial year and in receipt of remuneration of 120 Lakhs or more, or employees who are employed for part of the year and in receipt of 8.50 Lakhs or more per month.

The information required pursuant to Section 197 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the reports and accounts are being sent to the members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the members at the Registered office of the company during business hours on working days of the Company up to the date of forthcoming Annual General Meeting. If any member is interested in inspecting the same, such member may write to the company secretary in advance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company's businesses and other material developments during the financial year 2023-24.

CORPORATE GOVERNANCE REPORT

The Company has complied with the corporate governance requirements under the Companies Act, 2013 and the SEBI Listing Regulations 2015. A separate section on corporate governance, along with a certificate from practising company secretary confirming compliance of the conditions of corporate governance is annexed and forms part of this Report.

ACKNOWLEDGEMENTS

The Board wishes to place on record its sincere appreciation for assistance and co-operation received from customers, bankers, regulatory and government authorities during the year. The Directors express their gratitude to the shareholders for reposing their faith and confidence in the Company. The directors also acknowledge the contribution made by the Company's employees at all levels. Our consistent growth was made possible by their hard work, solidarity and support.