Arcotech Ltd

Dear Members,

Your Directors have immense pleasure in presenting the 43^rd Annual Report on the business and operations of the Company together with Audited Statement of Accounts of your Company for the financial year ended onthe 31^st March, 2024.

(Rs. in Crores)

2. DIVIDEND

During the Period Company has incurred a loss of Rs. 143.6 crores, your Directors do not recommend any Dividend for the year under review.

3. GENERAL RESERVES

There was no transfer to General Reserve during the year 2023-24.

4. BUSINESS AND OPERATIONS REVIEW

The Company has a well-equipped and an integrated manufacturing facility comprising of melting & casting to rolling to manufacture Copper and Cu alloys like Brass, Phosphor Bronze, Leaded Brass, Cupro Nickel in the form of strips, foils, sheets, ingots, rods, profiles, bus bars and forward integrated products such as terminals, connectors, coin blanks, key blanks etc.

Company had embarked to transform itself from a Semi's manufacturer to a Precision Component manufacturer for supplying value added items to the Indian Industry, however, Company has faced losses due to inverted duty structure and working capital problems and before Company can fulfill its objective its accounts became non- operational due to continued losses. Company had tried to restructure its accounts as per RBI guidelines but the same could not be materialized because of the inordinate delay caused by Covid.

Since the restructuring could not be finalized and now the lenders are also not very keen for the same, Company has given them the One Time Settlement proposal. The said proposal has been in principally accepted by the Joint Lenders Forum but the final sanction of same needs to be approved by their respective sanctioning authorities for Company to move ahead with its implementation and Company is expecting to receive the same soon.

There were no operations in the Company during the year under review and the Profit after Tax of the Company has been (Rs. 143.59) Crores. Company had been one of the leading Non-Ferrous Engineering Company mainly in Copper/Brass Strips and Foils in the past and still has potential to regain its business and once again make a mark for itself in the industry. Company is trying its best to complete the OTS at the earliest so that it can resume operations and can re-embark on the path of efficiency and profitability.

5. DIRECTORS AND KEY MANEGERIAL PERSONNEL

In pursuance with the provisions of Companies Act, 2013, Shri Radhanath Pattanayak, Executive Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment. In terms of Regulation 36(3) of SEBI (LODR) Regulations, 2015, the details of the Director to be re- appointed are being provided in the notice of the ensuing Annual General Meeting.

The Board of the Company is constituted in accordance with the provisions of Companies Act, 2013 and rules made there under and Regulation 17 of SEBI (LODR) Regulations, 2015.

Company has optimum combination of Board of Directors and no changes took place in the same during the year.

Completion of Tenure of Independent Directors: Tenure of Independent Directors Sh. Rameshwar Dayal Tayal and Sh. Sham Lal Mohan is completing on 19th September, 2024 and they will cease to be Directors on Board of Company from that date. Board had taken the note of same in their last meeting.

Change in Key Managerial Personnel:

a) No changes took place in the KMPs during the year.

6. BOARD DIVERSITY AND POLICY ON DIRECTOR'S APPOINTMENT AND REMUNERATION

The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board, among others, will enhance the quality of decisions by utilizing different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development. Accordingly, the Board has adopted a policy on 'Nomination, Remuneration and Board Diversity', which sets out the criteria for determining qualifications, positive attributes and independence of a Director. The detailed policy is available on the Company's website at http: / / www.arcotech.in/New14/NOMINATION.pdf and

http: / / www.arcotech.in/New14 / Policy-on-Board-Diversity.pdf is also annexed to this Report as Annexure-A.

Annual Board Evaluation and Familiarisation Programme for Independent Directors

The statement pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015 indicating the manner in which formal annual evaluation of the Directors, the Board and the Board level Committees are given in the report on Corporate Governance, which forms part of this Annual Report. A note on the familiarization programme adopted by the Company is available at Company's website at the link: http://www.arcotech.in/New14/Familiarisation-programmes-for-Independent-Directors.pdf

Declaration by Independent Directors

The Company has received necessary declaration from each independent director that he/ she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015. The Independent Directors have also confirmed that they have complied with the Company's code of conduct.

Registration in Independent Directors' Data Bank: Mr. R D Tayal and Mr. S L Mohan are already registered in Databank and they are exempted from passing of the proficiency test. However, the newly appointed Directors are in the process of registration in the same and will also go through the proficiency test. In the opinion of the Board of Directors of the Company all Independent Directors possess high integrity expertise and experience including the proficiency required to discharge the duties and responsibilities as Directors of the Company.

7. AUDITORS AND AUDITORS REPORT

Pursuant to the provisions of Section 139 of the Act read with applicable Rules framed thereunder, M/ s. Amit Joshi & Associates (FRN: 004898N) have been appointed as Statutory Auditors for the second term of five years in the AGM held on 29^th September, 2021 and they shall hold office from the conclusion of the 40^th Annual General Meeting till the conclusion of the 45^th Annual General Meeting to be held in the year 2026.

The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

8. COST AUDITOR

Company is outside the purview of Section 148 and Cost Audit is not applicable on Company and thus no appointment of Cost Auditor has been made by Company.

9. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Board of your Company has appointed M/s A. Upadhyaya & Associates, Company Secretaries, Certificate of Practice no. 4729 as Secretarial Auditor for conducting the secretarial audit of the Company for the financial year 2023-24 and to provide other certificates during the year.

The Secretarial Auditor has provided Secretarial Audit Report for the financial year 2023-24 and the same is attached hereto as Annexure-B and is self-explanatory and do not call for any further comments.

10. REPORTING OF FRAUDS BY AUDITORS

During the Year under review, none of the Auditors have reported to the Audit Committee or to the Board, under section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.

11. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS

Your Board of Directors has taken note of the Auditor's Report. Auditors have given their qualified opinion on the Financial Statements. The restructuring of the Company's business had been under consideration by the lenders. Consequent to the filing of restructuring proposal with lenders, feasible TEV (techno economic viability) study/reports of the operations of the Company was conducted by outside agency where in certain reliefs/ concessions have been envisaged to make the project viable. Included in there is relief in interest rates effective from 01.11.2018. The Company has provided interest at the rates mentioned in TEV. This along with other unprovided interest amounts to Rs. 2,569.10 lakhs (net of tax) for the current financial year. The Company is in the process of settling the dues with the lenders towards which an amount of Rs. 705.00 lakhs has been deposited with the bankers and financial institutions, for which final approval from some of the lenders is still awaited. In view of the management's expectation of successful outcome of above proposal and revival of its business, the financial statements have been prepared on going concern basis. Further, the Directors are conscious to comply with all the statutory requirements and also making continuous efforts to identify the areas where controls need to be strengthened.

12. NUMBER OF MEETINGS OF THE BOARD

During the year under review, total 4 (Four) meetings of the Board were convened and held, the details of which are given in the Report on Corporate Governance forming part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17(2) of SEBI (LODR) Regulations, 2015.

Audit Committee: The Composition and function of Audit Committee of the Board of Directors of the Company is disclosed in the Report on Corporate Governance, which forms part of this report.

13. VIGIL MECHANISM

The Company has established a vigil mechanism which incorporates a whistle blower policy in terms of the listing regulations for directors and employees to report their genuine concerns. The objective of the policy is to create a window for any person who observes an unethical behavior, actual or suspected fraud or violation of Company's code of conduct. Protected disclosures can be made by the whistle blower through an email or phone or a letter to the chairman of the audit committee. The policy can be assessed from the Company's website www.arcotech.in/New14/WHISTLEBLOWERPOLICY.pdf

14. SUBSIDIARY & JOINT VENTURE

The Company has framed a policy for Determining material Subsidiaries. There is no subsidiary or Joint Venture of the Company as on 31^st March, 2024.

15. DIRECTORS' RESPONSIBILITY STATEMENT UNDER SECTION 134(3)(C) OF THE COMPANIES ACT,2013

The Board of Directors hereby confirms, in terms of Section 134(5) of the Companies Act, 2013:

a) That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) That appropriate accounting policies have been selected and applied consistently, and made judgments and estimates that are reasonable and prudent have been made 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 or loss of the Company for that period.

c) That 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) That the Annual Accounts have been prepared on a going concern basis.

e) That the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively.

f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

16. ANNUAL RETURN

In accordance with the provisions of section 134(3)(a) of the Companies Act, 2013, Annual Report will be placed on

Company's website at www.arcotech.in

17. LISTING

The equity shares of your Company are listed with the BSE Ltd and National Stock Exchange of India Ltd.

18. DEPOSITS

During the Year under review, your Company has not accepted any deposit within the meaning of Section 73 and

74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

19. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the year under review, no company have become or ceased to be its subsidiaries, joint ventures or associate Company.

A. Conservation of energy and technology absorption

Information under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014:

I. Conservation of Energy: Company had no active commercial production in the FY 2023-24 and thus there was no energy consumption & conservation.

II. Technology Absorption, Adaptation and Innovation: Company had no active commercial production in the FY 2023-24 and thus no new R&D has been undertaken. No new technology has been absorbed or imported during the year.

B. Foreign Exchange Earnings and outgo

During the year under review, your Company has not dealt with foreign exchange earnings and outgo and the Foreign Exchange earned in terms of actual inflows as well as outgo in terms of actual outflows is Nil.

C. Particulars of Employees

Information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, regarding employees is a part of this report.

Disclosures regarding ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

Managerial Remuneration:

i) The percentage increase in remuneration of each Director, CFO and CS in the financial year:

There was an increase in the remuneration of CS during the year.

ii) The percentage increase in the median remuneration of employees in the financial year: Nil

iii) The number of permanent employees on the rolls of Company:

04 employees as on 31.03.2024

iv) Average percentile increase already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: NIL

v) Comparison of the each remuneration of the Key Managerial personnel against the performance of the Company:

vi) The key parameters for any variable component of remuneration availed by the Directors: There is no such variable component

vii) The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year: 0.060:0.097

viii) The Remuneration is as per the remuneration policy of the Company.

The remuneration of Whole Time Director (Executive Director) for the financial year ended 31st March 2024

D. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate of previous year.

Note: Shares were traded till 30^th August, 2021 on Trade for Trade basis in Z group only on the first trading day of every week. Thereafter trading has been temporarily suspended and discontinued. Above mentioned price and values are taken as per last traded price of Company as on 30^th August, 2021.

21. CORPORATE GOVERNANCE

A separate report of Board of Directors of the Company on Corporate Governance is included in the Directors Report as Annexure-C and the Certificate from M/s A. Upadhyaya & Associates, Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance as stipulated in Schedule V of SEBI (LODR), Regulations, 2015 is attached to the report on Corporate Governance.

22. COMPLIANCE WITH SECRETARIAL STANDARD

Secretarial Standard 1 on Meetings of the Board of Directors and Secretarial Standard 2 on General Meetings, as applicable, have been complied by the Company.

23. RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Board of directors of the Company.

The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by statutory as well as internal auditors.

24. CORPORATE SOCIAL RESPONSIBILITY

The provisions of corporate social responsibility as per Section 135 of the Companies Act, 2013 are not applicable on Company and therefore, Annual Report on CSR activities as per Rule 8 of The Companies (Corporate Social Responsibility Policy) Rules, 2014 do not form part of this report. However, Company has a duly formulated CSR policy in place. Policy can be assessed from the Company Website http:// www.arcotech.in/New14/CSR.pdf.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year under review, Company has not given any loan, guarantee or investments under section 186 of the Companies Act, 2013.

26. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY.

There have been 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.

27. RELATED PARTY TRANSACTIONS

All related party transactions entered into by the Company during the financial year, if any, were in the ordinary course of business and on arm's length basis. All related party transactions were entered with the prior approval of the Audit Committee and periodically placed before the Committee and the Board for review. The details of the transactions with related party as provided in the Company's financial statements is in accordance with the Accounting Standard. None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2023-24 and hence does not form part of this report.

The Policy on the Related Party Transactions is available on the Company's website at http: / / www. arcotech. in/New14 / Policy-on-Materiality-of-and-dealing-with-Related-Party-Transaction. pdf

(a) Industry Scenario & Future Challenges

Copper, one of the important non-ferrous metals, has various industrial uses and demand for it is increasing in India where the inventory and production of copper, though not comparable with developed countries, shows an impressive growth rate. Company's operations are currently under One Time Settlement with the lenders. Company is looking forward to the implementation of OTS at the earliest to start its activities afresh.

(b) Opportunities and Threats

Government focus on Aatmnirbhar Bharat will give boost to our industry. Government will have to take adequate steps to provide level playing field to Indian Non- ferrous Manufacturers by taking mitigant steps to nullify the impact of inverted duty effect.

(c) Operating Performance, Future Outlook etc.

There have been no operations in the Company during the year under review. Further, Company is looking forward to completion of its ongoing One Time Settlement in near future so that operations can restart and Company can resume its profitability.

(d) Adequacy of Internal Controls

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded, and reported correctly. Independent Internal auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards.

(e) Financial performance and operational performance

The Company had not carried any commercial production in the year and this lead to nil revenue in the financials of Company. There are losses in the financials of Company because of the fixed basic regular expenses and the provisions made by the Company. Company is trying its best to move ahead with the OTS at priority.

(f) Human Resources/ Industrial Relations

Your Company has always acknowledged the commitment, competence and dedication of its employees at all areas of business. The Company will continue to be committed to nurture, enhance and retain best talent through investment in its people to upgrade their technical, domain and leadership capability. The Company continuously innovates and customizes its Human Resource (HR) strategy to meet changing employee need. The Company has always taken initiative for safety of employees and will continue to implement regular safety audit, imparted machine safety training and deploying wearing of protective equipments.

(g) Significant changes in Key Financial Ratios

The significant changes in the key financial ratio of the Company, which are more than 25% as compared to the previous year, are as given below-

29. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Company's operations in future.

30. DISCLOSURE AS PER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has a policy on prohibition, prevention and redressal of Sexual Harassment of women at workplace and matters connected therewith or incidental thereto covering all the aspects as contained under "The Sexual Harassment of women at workplace (Prohibition, Prevention and Redressal) Act, 2013".

During the financial year 2023-24, no such complaint was received under the policy.

31. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, no proceeding in the name of the Company is admitted in NCLT under Insolvency and Bankruptcy Code, 2016. Also no new application has been made by the Company under the said code.

32. DETAILS REGARDING OTS DONE DURING THE YEAR

During the year under review, Company has not done any OTS with any lender. However, the ongoing OTS with consortium lender is under process and Company is waiting for approval of same from their respective authorities.

33. INTERNAL FINANCIAL CONTROL

The Company has adequate internal control systems and procedures designed to effectively control the operations at its corporate office, Head office and plant. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The Company has well designed Standard Operating Procedures.

Independent Internal Auditor conducts the internal audit covering a wide range of operational matters and ensures compliance with specified standards. Planned periodic reviews are carried out by Internal Auditor. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements including the Financial Reporting System and Compliance to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the Internal Controls and Systems followed by the Company.

34. ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees had enabled the Company to achieve the forefront position of the Industry and Company hopes to again achieve the same in future. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. Directors also take this opportunity to thank all Investors, Banker, Clients, Vendors, Companies, Government authorities and Stock Exchange(s) for their continued support.