Magna Electro Castings Ltd

Dear Shareholders,

Your Directors have pleasure in presenting the 35th Annual Report and Audited Accounts of the Company for the year ended 31st March, 2025.

The highlights of the performance of your Company during the financial year (FY) 2024-25 are given hereunder;

( in lakhs)

The financial summary / highlights for the last five years is furnished vide Annexure-A to this Report

The Operating Revenue of the Company has increased by 22.79% from 14,369.78 Lakhs in the previous year to 17,644.92 Lakhs in the current year.

The Export revenue during the year was 8,681.48 Lakhs compared to 6,615.84 Lakhs in the previous year, registering an increase by 31.22%. During the year, the domestic market also increased by 15.26% from 7,427.70 Lakhs in the previous year to 8,560.81 Lakhs in the current year.

During the year, Profit Before Tax (PBT) was Rs 3,104.46 Lakhs compared to previous year's PBT of 2,040.61 Lakhs registering an increase by 52.13 % and Profit After Tax (PAT) is 2,311.70 Lakhs compared to previous year's PAT of 1,510.92 Lakhs with increase by 53%.

During the Financial Year 2024 25, 66.49% of the Company's total energy consumption was derived from green energy sources, generated through its in-house Windmills and Solar power plant (Captive user basis).

The income from Wind and Solar Energy is 722.76 Lakhs during the year as against 741.57 Lakhs, in the previous year, mainly due to low generation of wind/solar power and increase in operation activities and total consumption.

There has been no change in the nature of business of the Company.

The Company has successfully applied for and obtained registration of the trademarks "MASTERCAST" and "BREAK THE MOULD" with the Trademark Registry.

Your Directors are pleased to recommend a dividend of 6/- per share, i.e. at the rate of 60% for the FY 2024-25 on the paid-up equity share capital of the Company. The dividend, if approved, will absorb an amount of 253.93 Lakhs and will be paid to shareholders on approval, subject to deduction of tax at source. The payment of dividend is subject to approval of the shareholders at the 35th Annual General Meeting (‘AGM') of the Company.

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. Your Company shall, accordingly, make the payment of the dividend after deduction of tax at source at appropriate rates applicable to resident and nonresident shareholders as the case may be.

During the year under review, the Company has installed Bulk storage and pumping of additive new system. New auto pour has been installed for Third Moulding Line, 2No's of 5axis CNC grinding machine were installed in Finishing division.

The erection of Third Molding Line project, aimed at augmenting the molding capacity of the Company has been completed and trial run has commenced as of the date of this report. The commencement of commercial operation is expected by June, 2025. The total project cost amounts to 47.80 Crores, out of which the Company has availed or is to avail Term Loan from the Bank to the extent of 13.49 Crores against the sanctioned limit of 15 Crores and the balance expenditure of 34.31 Crores has been / to be met out of Internal accruals.

The commissioning of Third Molding Line project will be completed by end of June, 2025. The total installed molding capacity now stands at 2000 MT per month. The current melting capacity remains at 1500 MT per month. The additional melting capacity will be accordingly adjusted as and when the production picks up. This expansion will also enable us to secure new business in medium sized components range on a competitive basis. On successful completion of this project the Company will able to cater to a wide range of castings from 1 Kg to 250 Kgs.

During the year, the Company made notable progress in sustaining and advancing its management system certifications and ensuring adherence to regulatory compliance requirements. The Company successfully completed re- audits for the following internationally recognized standards - IATF 16949 - Quality Management System for the automotive sector, ISO 9001 - Quality Management System, ISO 14001 - Environmental Management System.

Based on successful surveillance audits, the Company retained several critical certifications, demonstrating robust compliance with global industry standards - Pressure Equipment Directive (PED) and AD 2000 W0 requirements, Pressure Equipment Safety Regulation (PESR), Transportation & Power Generation (TPG) requirements, Renewal of Indian Boiler Regulation (IBR) license, Marine Certification in accordance with DNV Rules for the Classification of Ships.

The Company expanded its certification portfolio with the following approvals - BIS IS 210 License for Grey Iron Castings, Marine Certifications as an approved Manufacturer of Iron Castings meeting the standards of Lloyd's Register (LR) and Bureau Veritas (BV), the Company committed to enhanced sustainability tracking through - Annual computation of Greenhouse Gas (GHG) emissions and Product Carbon Footprints (PCFs) and validation by second-party. In addition to this, the Company also complies with Supplier Assessment Audits conducted by its customers.

During the year, the Company has been awarded the Supplier Excellence Recognition 2024 for the Second Consecutive Year by Caterpillar Inc.

The Company incurred a finance cost of 26.98 Lakhs during the year.

The Company has transferred 200.00 Lakhs to the General Reserve during the year under review. An amount of 8,045.85 Lakhs is retained in the Statement of Profit & Loss.

During the year under review, the Company has not altered/modified its authorised share capital and the Company has not made any fresh issue of shares.

As on 31st March 2025, the authorized capital of the is 5,00,00,000/- divided into 50,00,000 equity shares of 10/- each. The issued, subscribed and paid-up equity capital of the Company as on 31st March, 2025 is 4,23,21,040/- divided into 42,32,104 equity shares of 10/- each fully paid up.

In terms of Section 124 and 125 of the Companies Act, 2013, the Unclaimed Dividend relating to the Financial Year 2017-18, is due for transfer during October, 2025 to the Investor Education and Protection Fund (IEPF) established by the Central Government.

During the year under review, as per the requirements of Section 124(6) of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (IEPF Rules), 6,637 Equity Shares of 10/- each on which dividend had remained unclaimed for a period of 7 years has been transferred to the credit of the demat Account identified by the IEPF Authority. As on 31st March 2025, 1,07,880 Equity Shares of the Company were in the credit of the Demat Account of the IEPF Authority.

During the Financial Year 2024 25, the Registered Office of the Company was shifted from its earlier location situated at 43, (Old No.62) Balasundaram Road, Coimbatore 641 018, Tamil Nadu, India to the new address situated at SF No. 34 and 35, Coimbatore Pollachi Main road, Mullipadi village, Tamaraikulam Post, Kinathukkadavu Taluk, Coimbatore- 642 109, Tamil Nadu, India. This change, which involved a shift outside the local limits of the city, was effected with the approval of the shareholders through the Postal Ballot process and came into effect on 25th September 2024.

The Corporate Office of the Company continues to be located at 43, (Old No.62) Balasundaram Road, Coimbatore - 641 018, Tamil Nadu, India.

The Annual Return of the Company for the financial year 2024-25 as required under Section 92(3) of the Companies Act, 2013 is available on the website of the Company and can be accessed on the Company's website at the link https://www.magnacast.com/uploads/MGT7_Website_2425.pdf

During the year under review, six (6) Meetings of the Board of Directors were held. The details of the composition of the Board and its Committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility (CSR) Committee and Meetings held and attendance of the Directors at such Board / Committee Meetings are provided in the Corporate Governance Report under relevant heads which forms a part of this Report.

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively. The Company has duly complied with Secretarial Standards issued by the Institute of Company Secretaries of India on meeting of the Board of Directors (SS-1) and General Meetings (SS-2).

Pursuant to requirement of Section 134(3)(c) and 134(5) of the Companies Act 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that a) In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departure from those standards; b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; c) The Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) The Directors have prepared the annual accounts on a going concern basis; e) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and f) The Directors had devised proper system to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively;

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit.

The Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [Listing Regulations] so as to qualify themselves as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules of the Listing Regulations. Further, they have also declared that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

Based on the confirmation / disclosures received from the Directors and on evaluation of the relationships disclosed, the following Non-Executive Directors were Independent during the year 2024-25: Sri. K Gnanasekaran, Dr. R Nandini, Dr. Jairam Varadaraj, Sri. G D Rajkumar, Smt. Vijayalakshmi Narendra, Sri. V Arjunprakash, Sri. Sudarsan Varadaraj and Sri. Rangaswamy Narayanan.

Pursuant to Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors have submitted necessary declaration of compliance with Rule 6(1) and Rule 6(2) of the said Rules. They have confirmed that their names have been included in the data bank of the Indian Institute of Corporate Affairs.

The Board of Directors have evaluated the Independent Directors appointed/ re-appointed during the year 2024- 25 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

The Board has, on the recommendation of the Nomination and Remuneration Committee, framed a policy on nomination, appointment and remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and employees of the Company including criteria for determining qualifications, positive attributes, independence of a Director and other matters pursuant to the provisions of Section 178 of the Companies Act, 2013 and in terms of Regulation 19(4) of the Listing Regulations. The detailed Remuneration Policy can be accessed on the Company's website at the link https://www.magnacast.com/uploads/NRC_27032025.pdf.

The Company has no loans, guarantees or investments made by the Company under Section 186 of the Companies Act, 2013 during the year under review. However, the investments made during the earlier years are provided under the notes to Balance Sheet appearing elsewhere in this Annual Report.

All the transactions of the Company entered into with its related parties as defined under the Companies Act, 2013 and Regulation 23 of the Listing Regulations (as amended) during the financial year 2024-25 were in the ordinary course of business and on an arm's length basis.

Pursuant to Regulation 23 of the Listing Regulations, the Company had obtained the approval of the Shareholders to enter into material related party transactions with one of its related parties. For the Financial Year 2025-26, approval of Shareholders is being sought to enter into material related party transactions with its Related Party.

The particulars of material related party transactions which are at arms' length basis is provided in Form AOC-2 and the same is annexed to the Boards Report as Annexure -B.

The Policy on Related Party Transactions is made available at the Company's website and the same can be accessed through the link at https://www.magnacast.com/uploads/RPTPOLICY_04022025.pdf.

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 year ended 31st March, 2025 relate and the date of the report.

The information pertaining to conservation of energy, technology absorption, Foreign Exchange Earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished as Annexure C and is attached to this report.

The Company continues to focus attention on the risk areas identified and in case of any adverse situation, suitable mitigation steps are taken. The Company has adopted a comprehensive and integrated risk appraisal, mitigation and management process. The risk mitigation measures and procedures of the Company are placed before the Audit Committee/ Board periodically for review and improvement. The Company does not have any Risk Management Policy as the elements of risk threatening the Company's existence are very minimal.

The Board had formed a Corporate Social Responsibility (CSR) Committee comprising of Sri. J Vijayakumar, Sri. G D Rajkumar and Sri. N Krishnasamaraj. The CSR Committee of the Company deals with allocation of funds, activities, identification of programs, approval, implementation, monitoring and reporting mechanisms under the policy.

The brief outline of the CSR Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are furnished separately vide Annexure - D to this Report. The policy relating to CSR has been displayed on the Company's website and can be accessed at https://www.magnacast.com/uploads/invsubpdf/csr-policy-tzos608aa07b65155.pdf .

Pursuant to the provisions of the Companies Act, 2013, the Board of Directors evaluated the annual performance of the members of the Board and its Committees vis-a-vis the nature of business of the Company, its performance during the year and the contribution of each of the Directors based on the criteria laid down by the Nomination and Remuneration Committee.

The Independent Directors has also convened a separate meeting for this purpose on 26th March, 2025 and inter-alia, reviewed the performance of the Non- Independent Directors and the Board as a whole and assessed the quality, quantity and timeliness of flow of information between the Company and the Board.

Changes in Directors and Key Managerial Personnel:

Pursuant to the recommendation of the Nomination and Remuneration Committee and the Board of Directors at their meeting held on 29th May 2024, Sri. V Arjunprakash (DIN: 00835823) was appointed as Independent Directors of the Company for the first term of five (5) consecutive years with effect from 16th August 2024 by the Members at the 34th Annual General Meeting held on 16th August 2024.

Further, upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors at their meeting held on 19th August 2024, appointed Sri. Sudarsan Varadaraj (DIN: 00133533) and Sri. Rangaswamy Narayanan (DIN: 01939280) as the Additional Directors in the capacity of Independent Directors of the Company.

Consequently, their appointment as Non-Executive Independent Directors of the Company to hold office for a first term of five (5) consecutive years with effect from 19th August 2024 were approved by the Shareholders through Postal Ballot on 25th September 2024.

During the year under review, the following Non-Executive Independent Directors completed their second term of years and retired from the Board of the Company effective 18th August 2024: i. Sri. K Gnanasekaran (DIN: 00133645) ii. Dr. R Nandini (DIN: 00002223) iii. Dr. Jairam Varadaraj (DIN: 00003361)

The Board places on record its sincere appreciation for the invaluable guidance and counsel rendered by the above Directors during their period of office.

Sri. J Vijayakumar (DIN:00002530) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Your Directors recommend his re-appointment.

The Board of Directors, upon the recommendation and approval of the Nomination and Remuneration Committee and Audit Committee of the company at their respective meetings held on 30th May 2025, have recommended the appointment of Sri. Ajeya Vel Narayanaswamy (DIN:07553660) as a Whole Time-Director, designated as Executive Director Marketing of the Company to hold office for a period of 5 years with effect from 4th September 2025 on the terms and conditions as set out in the Notice convening the Annual General Meeting. Necessary resolution in this regard has been included in the Agenda of the Notice for the approval of the Members.

Apart from the above, there were no other changes in the Directors and Key Managerial Personnel of the Company.

The Key Managerial Personnel of the Company as required pursuant to Section 2(51) and 203 of the Companies Act, 2013 as on 31st March, 2025 are:

The Company does not have any Subsidiaries, Joint ventures or Associate Companies.

Since the Company has not accepted any deposit covered under Chapter V of the Companies Act, 2013, there are no deposits remaining unclaimed or unpaid as on 31st March 2025 and accordingly, the question of default in repayment of deposits or payment of interest thereon during the year does not arise.

There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operation in future.

The Company has an adequate Internal Control System, commensurate with the size, scale and complexity of its operations. The Audit Committee of the Board periodically reviews the Internal Financial Control Systems and their adequacy and recommends corrective action as and when necessary to ensure that an effective internal control mechanism is in place.

The Directors confirm that the Internal Financial Control (IFC) systems are adequate with respect to the operations of the Company. The report of Auditors pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Control is annexed with the Auditors Report.

M/s. VKS Aiyer & Co., (Firm Registration No. 000066S), Chartered Accountants, Coimbatore, were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 31st Annual General Meeting held on 23rd September 2021 for a period of 5 consecutive years till the conclusion of the 36th Annual General Meeting to be held in the year 2026.

The Company has received a certificate from M/s. VKS Aiyer & Co., Chartered Accountants, Coimbatore, confirming that they are not disqualified from continuing as statutory auditors of the company

In terms of Section 204 of the Act and Rules made thereunder, M/s. MDS & Associates LLP, Company Secretaries, Coimbatore (LLPIN: ABZ 8060) were appointed as Secretarial Auditors of the Company to carry out the Secretarial Audit for FY 2024-25. The report of the Secretarial Auditors for the financial year 2024-25 is annexed as Annexure- E to this Report.

Pursuant to the Regulation 24A of the Listing Regulations read with Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and subject to the approval of Shareholders in the ensuing Annual General Meeting, the Board of Directors of the Company have recommended the appointment of M/s. MDS & Associates LLP, Company Secretaries, Coimbatore as Secretarial Auditors of the Company for a first term of 5 (five) consecutive financial years commencing from the financial year 2025-26. M/s. MDS & Associates LLP have consented and confirmed their eligibility for appointment as Secretarial Auditors of the Company. The necessary resolution for their appointment has been included in the Agenda of the Annual General Meeting Notice for the approval of the Members.

The Board of Directors, on the recommendation of the Audit Committee, has appointed M/s. SBK & Associates, Cost Accountants, Chennai as the Cost Auditors of the Company for the financial year 2025-26. Pursuant to Section 148 of the Companies Act, 2013 read with Rule 14 of the Companies (Accounts) Rules, 2014, the remuneration payable for the year 2025-26 to the Cost Auditors of the Company is subject to ratification by the Shareholders at the ensuing Annual General Meeting. The Board recommends their remuneration for members' ratification. The Cost Audit Report for the financial year 2024-25 will be filed with the Central Government within the period stipulated under the Companies Act, 2013.

The maintenance of cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, is applicable to the Company and accordingly the cost accounts and records are made and maintained as mandated by the Central Government.

There are no qualifications, reservations or adverse remarks or disclaimers made by M/s. VKS Aiyer & Co, Statutory Auditors and M/s. MDS & Associates LLP, Secretarial Auditors in their respective audit reports.

No applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

The relationship between the management and the employees at all levels during the year under review has been cordial and productive.

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee has been set up to define the policy and redress complaints received. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed of during the year 2024-25: i. Number of complaints received - Nil ii. Number of complaints disposed of – NA iii. Number of complaints pending – Nil

Statement pursuant to Section 134 of the Companies Act, 2013 and Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure - F to this report.

During the year, the Company had no employee who was employed throughout the FY or part thereof and was in receipt of remuneration, which in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company

Pursuant to Regulation 34(3) of the Listing Regulations, a report on Corporate Governance along with a Certificate from the Company Secretary in Practice confirming the compliance of the provisions of Corporate Governance and the Management Discussion and Analysis Report forms an integral part of this Annual Report and are given in Annexure - G respectively.

The Audit Committee of the Board of Directors has been duly constituted in accordance with the provisions of Section 177 of the Companies Act, 2013 and Regulation 18 of Listing Regulations. Details relating to the composition, meetings and functions of the Committee are set out in the Corporate Governance Report forming part of this Annual Report. The Board has accepted the Audit Committee recommendations during the year whenever required and hence no disclosure is required under Section 177(8) of the Companies Act, 2013 with respect to rejection of any recommendations of Audit Committee by the Board.

As required under Regulation 33 (2) (a) of the Listing Regulations, the Managing Director and the Chief Financial Officer of the Company have furnished necessary certificate to the Board on the Financial Statements presented, which is annexed as Annexure - H to this report.

The Company has provided for adequate safeguards to deal with instances of fraud and mismanagement and to report concerns about unethical behavior or any violation of the Company's Code of Conduct. During the year under review, there were no complaints received under this mechanism. The policy can be accessed on the Company's website at https://www.magnacast.com/uploads/WBP_08112024.pdf.

Equity shares of the Company continue to be listed on BSE Limited.

The Board of Directors places on record its sincere appreciation for the continued support, cooperation, and confidence reposed by the shareholders, customers, suppliers, bankers (M/s. Union Bank of India and M/s. Axis Bank), various Government Agencies and other stakeholders. The Directors also wish to express their gratitude to the employees at all levels for their dedicated efforts, commitment, and contribution towards the growth and success of the Company during the year under review.

As we continue to navigate the ever-evolving business landscape, we remain committed to transparency, excellence, and delivering value. May the blessings of Almighty illuminate our path, fortify our endeavors, and propel our Company toward greater heights.