Menon Bearings Ltd

To,

The Members,

Your directors feel great pleasure in presenting the 33^rd Annual Report of your Company along with the Audited Financial Statements for the financial year ended 31^st March, 2024.

The Company is engaged in the business of manufacturing of "Auto Components". During the financial year under review, the Company has registered a turnover of Rs. 20,991.77 Lakh (previous year Rs. 21,986.34 Lakh) and Profit After Tax of Rs. 2,568.84 Lakh (previous year Rs. 3,272.06 Lakh).

During the financial year under review, the Company has registered a consolidated turnover of Rs. 21,442.27 Lakh (previous year Rs. 21,986.35 Lakh) and consolidated Net Profit of Rs. 2,435.50 Lakh (previous year Rs. 3,260.18 Lakh).

The Company's overall performance during the financial year under review was satisfactory. Based on the performance, the Company declared interim dividend @ Rs. 2.25 per Equity Share (previous year Rs. 2.00 per Equity Share), being 225% of the paid-up Equity Share Capital of the Company for the financial year ended 31^st March, 2024. Considering current market scenario and to conserve resources, your directors are not recommending any further dividend for the financial year ended 31^st March, 2024 and the interim dividend already paid may be taken as final dividend for the financial year under review.

During the financial year under review, there was no change in the paid-up share capital of the Company. As on 31^st March, 2024, the paid up share capital of the Company was Rs. 5,60,40,000/- divided into 5,60,40,000 Equity Shares of Re. 1/- each.

There was no change in the nature of business activities of the Company during the financial year under review.

The Company proposed to undertake following business activities in two separate entities and incorporated two wholly owned subsidiaries of the Company for that purposes:

1. Menon Alkop Limited - manufacturing of aluminum die castings of all kinds for its application in various domestic, commercial and industrial uses. The Company, after taking necessary approval from its shareholders through Postal Ballot process, result of which was declared on 28^th April, 2024, transferred its Aluminum Division to Menon Alkop Limited, the Wholly Owned Subsidiary Company on Slump Sale basis.

2. Menon Bearings New Ventures Limited - to engage in the business of auto dealerships, charging technologies, emerging EV services, cold chain, highway side amenities, real estate development and in the area of new opportunities in service sector to house non engineering business.

During the financial year under review, a sum of Rs. 75.00 Lakh (previous year Rs. 75.00 Lakh) was transferred to the General Reserve.

The Company incorporated two wholly owned subsidiary companies namely Menon Alkop Limited on 23^rd January, 2024 and Menon Bearings New Ventures Limited on 7^th February, 2024 registered with the Registrar of Companies, Pune, Maharashtra. Besides these two wholly owned subsidiaries, the Company has another wholly owned subsidiary company viz. Menon Brakes Limited (formerly known as Menon Brakes Private Limited). Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("Act"), a statement containing salient features of the financial statements of wholly owned subsidiary companies in Form AOC - 1 is annexed as Annexure - I and forms part of this Report.

During the financial year under review, the Company had no joint venture / associate company.

Pursuant to the provisions of Sections 129 and 133 of the Act read with the Companies (Accounts) Rules, 2014 and as required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has prepared Consolidated Audited Financial Statements consolidating financial statements of its wholly owned subsidiaries namely "Menon Brakes Limited" (formerly "Menon Brakes Private Limited"), "Menon Alkop Limited" and "Menon Bearings New Ventures Limited" with its financial statements in accordance with the applicable provisions of Indian Accounting Standards ("Ind-AS").

The Consolidated Audited Financial Statements along with the Independent Auditors' Report thereon are annexed and form part of this Report and the summarized consolidated financial position is provided in financial highlights stated hereinabove.

During the financial year under review, the Company has not accepted or renewed any deposits from public within the meaning of Sections 73 and 76 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

ANNUAL RETURN:

As required under Section 92(3) read with Section 134(3)(a) of the Act, the copy of Annual Return as on 31^st March, 2024 will be placed on the website of the Company and can be accessed at https://menonbearings.in/investor-relations/investorinformation.

In accordance with the provisions of Section 152 of the Act read with the Companies (Management and Administration) Rules, 2014 and Articles of Association of the Company, Mr. Arun Aradhye (DIN:03052587), Whole Time Director & CFO of the Company, retires by rotation at the ensuing 33^rd Annual General Meeting ("AGM") and being eligible, has offered himself for re-appointment and your Board recommends his reappointment.

No new director was appointed on the Board of Directors of the Company during the financial year under review.

The members of the Company, in their 32^nd Annual General Meeting held on 27^th July, 2023 re-appointed the following directors:

1. Mr. Arun Aradhye (DIN: 03052587) as Whole Time Director of the Company for a further period of 5 (five) years effective from 31^st January, 2024.

2. Dr. Santosh Prabhu (DIN: 00506595) as an Independent Director (Non - Executive) of the Company for the second term of 5 (five) consecutive years effective from 24^th October, 2023.

During the year under report, no director of the Company has been ceased from his/her office.

The Company has received the necessary declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under Section 149(6) of the Act and Regulation 16(1)(b) and Regulation 25(8) of the Listing Regulations that they are not aware of any circumstance or situation, which exist 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. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company's Code of Conduct.

Further, the Independent Directors have also submitted their declaration in compliance with the provisions of Rule 6(3) of the Companies (Appointment and Qualifications of Directors) Rules, 2014, which mandated the inclusion of the name of an Independent Director in the data bank of Indian Institute of Corporate Affairs.

None of the directors of your Company is disqualified under the provisions of Section 164(2) of the Act. Your directors have made necessary disclosures, as required under various provisions of the Act and the Listing Regulations and in the opinion of the Board, all the Independent Directors are persons of integrity and possess relevant expertise and experience and are independent of the management.

As per Regulation 17(1)(c) of the Listing Regulations, the Company is required to appoint minimum 6 (six) directors including one woman director on its Board, and half of them should be independent directors.

At present, in compliance with the aforesaid provisions, your Company has six directors consisting of three Independent Directors including a woman director and three Executive Directors.

The Board has devised a policy pursuant to the applicable provisions of the Act and the Listing Regulations for performance evaluation of the Chairman, Board as a whole and individual directors (including Independent Directors) and Committees, which includes criteria for performance evaluation of Non-Executive Directors and Executive Directors.

The Board has devised questionnaire to evaluate the performance of Board as a whole, Board Committees and individual directors and Chairperson. The Chairman of respective Board Committees shared the report on evaluation with the Board. The performance of each Committee was evaluated by the Board, based on report on evaluation received from respective Board Committees. The reports on performance evaluation of the individual directors were reviewed by the Board.

The evaluation framework for assessing the performance of directors comprises of the following key areas:

i. Attendance at Board and Committee Meetings;

ii. Quality of contribution to the deliberations;

iii. Strategic perspectives or inputs regarding future growth of the Company and its performance; and

iv. Providing perspectives and feedback going beyond information provided by the management.

In a separate meeting of Independent Directors, taking into account the views of Executive Directors and Non Executive Directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated.

The details of Key Managerial Personnel of the Company are as follows:

The Board meets at regular intervals to discuss and decide on Company / business policies and strategy apart from other Board business. A tentative annual calendar of the Board and Committee meetings is informed to the directors in advance to facilitate them to plan their schedule accordingly and to ensure meaningful participation in the meetings. However, in case of special or urgent business need, the Board's approval is taken by passing resolutions through circulation, as permitted by law, which are noted in the subsequent meeting of the Board of Directors.

The notice of meetings of the Board of Directors and Committees are given well in advance to all the directors of the Company. Usually, meetings of the Board are held in Kolhapur, Maharashtra. The agenda of the Board / Committee meetings are circulated at least 7 days before the date of the meeting. The agenda for the Board and Committee meetings include detailed notes on the items to be discussed at the meeting to enable the directors to make informed decisions.

During the financial year under review, the Board of Directors met 6 (Six) times, the details of which are given in the report on Corporate Governance, forming part of this report. The intervening gap between two consecutive meetings was within the period prescribed under the Act and the Listing Regulations.

Your directors to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3) read with Section 134(5) of the Act state that:

a. 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. they 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 31^st March, 2024 and of the profit of the Company for that period;

c. they 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. they have prepared the annual accounts on a going concern basis;

e. they 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. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

In accordance with the provisions of the Act and the Listing Regulations, the Company has constituted four committees of the Board, namely:

1. Audit Committee;

2. Stakeholders' Relationship Committee;

3. Nomination and Remuneration Committee; and

4. Corporate Social Responsibility Committee.

Details of the said Committees along with their charter, composition and meetings held during the financial year under review are provided in the report on Corporate Governance, forming part of this report. .

The Audit Committee is duly constituted as per the provisions of Section 177 of the Act and Regulation 18 of the Listing Regulations.

As on 31^s * March, 2024, the Audit Committee comprised of 4 (four) members viz., Mr. M. L. Shinde, Mr. R. D. Dixit, Mrs. Kailash A. Nevagi, and Dr. Santosh Prabhu. Mr. M. L. Shinde is the Chairman of the Audit Committee and the Company Secretary and Compliance Officer of the Company acts as the Secretary to the Audit Committee.

The Audit Committee of the Company reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters. It also supervises the Company's internal control and financial reporting process and vigil mechanism.

All the recommendations made by the Audit Committee during the year under report, were accepted by the Board of Directors of the Company.

The Company has adopted Vigil Mechanism / Whistle Blower Policy as per the provisions of Section 177 of the Act and Regulation 22 of the Listing Regulations to deal with instances of fraud and mismanagement. It also provides adequate safeguards against victimization of directors or employees or any other person who avail the mechanism and it provides for direct access to the Chairman of the Audit Committee in exceptional cases.

The details of the Vigil Mechanism are provided in the report on Corporate Governance and also posted on the website of the Company at https://static1 squarespace.com/static/54df3692e4b0d9caed7742ae/t/5d008ce9be4f020001580c21/15603 17231963/Whistle+Blower+Policy.pdf

We affirm that during the financial year under review, no employee or director was denied access to the Chairman of the Audit Committee.

The information, as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in Annexure - II, forming part of this report.

The statement containing particulars of employees, as required under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in this report as Annexure - III, forming part of this report.

Pursuant to the provisions of Section 178 of the Act and Regulation 19 of the Listing Regulations and on recommendation of the Nomination and Remuneration Committee, the Board of Directors has adopted a policy for selection and appointment of directors, senior management and their remuneration. The Remuneration Policy has been placed on the website of the Company and is available at https://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/56f8c9c4a3360c3a90bf041e/1459145236512/Policv+on+criteria+for+appointment+%26+remuneration+of+directors%2C+KMPs+%26+Senior+ Management+personnel.pdf

As per the provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the members of the Company at their 31^st AGM held on 22^nd September, 2022 appointed M/s. A R N A & Associates, Chartered Accountants, Kolhapur (FRN: 122293W) as the Statutory Auditors of the Company for a term of 5 (five) consecutive years, and accordingly they shall hold office as such till the conclusion of 36^th Annual General Meeting of the Company to be held for the financial year ending 31^st March, 2027.

M/s. A R N A & Associates, Chartered Accountants, have furnished a certificate of their eligibility under Section 141 of the Act and the Companies (Audit and Auditors) Rules, 2014, confirming that they are eligible for continuance as Statutory Auditors of the Company.

The Statutory Auditors' reports on the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended 31^st March, 2024 forms part of this Report.

The Statutory Auditors' Reports on the Audited Standalone and Consolidated Financial Statements for the financial year ended 31^st March, 2024 do not contain any qualifications, reservations or adverse remarks or disclaimer. Further, they have not reported any fraud as specified under the second proviso to Section 143(12) of the Act.

As per the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit ) Rules, 2014, the Board of Directors of the Company re-appointed M/s. C. S. Adawadkar & Co., Cost Accountants, Pune (FRN: 100401) as Cost Auditors of the Company to conduct audit of cost records pertaining to manufacturing of Aluminum products, Bi-metallic products and tractors and other motor vehicles (including automotive components) for the financial year 2024-25, at a remuneration of Rs. 1,25,000/- (Rupees One Lakh Twenty Five Thousand only) plus taxes, as applicable and out of pocket expenses on actual basis, subject to ratification of remuneration by the members of the Company in their general meeting. A resolution seeking ratification of the remuneration payable to the said Cost Auditors for the financial year 2024-25 by the members is being provided in the Notice of the ensuing 33^rd AGM of the Company.

The Cost accounts and records as required to be maintained under Section 148 (1) of the Act are duly made and maintained by the Company.

Pursuant to the provisions of Section 204(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s. M Baldeva Associates, Company Secretaries, Mumbai to undertake Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report for the financial year 2023-24 is annexed as Annexure - IV and forms part of this Annual Report.

With respect to remarks in the said Secretarial Audit Report, your directors would like to state as follows:

(a) Delay in filing of Form DPT-3 for the financial year ended 31^st March 2023 with the Registrar of Companies - the delay in filing of said form was inadvertent; and

(b) Non filing of Form MR 1 for re-appointment of Mr. R. D. Dixit with the Registrar of Companies - due to technical problem on MCA V3 portal, said form could not be filed.

Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, the Board of Directors, based on the recommendation of the Audit Committee, re-appointed Mr. Abhay Golwalkar, Chartered Accountant, Kolhapur as Internal Auditor of the Company for the financial year 202425. Internal Auditor submits his report to the Audit Committee on quarterly basis.

Based on the report of Internal Auditor, the management undertakes corrective actions in their respective areas and thereby strengthens the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.

The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of assets, prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures.

The Audit Committee evaluates the efficiency and adequacy of financial control system in the Company, its compliance with operating systems, accounting procedures at all locations of the Company and strives to maintain the highest standard in Internal Financial Control.

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitoring of both business and non-business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

Pursuant to the provisions of Regulation 34(3) read with Schedule V of the Listing Regulations, the following have been made part of the Annual Report and are annexed to this report:

• Management Discussion and Analysis Report;

• Report on Corporate Governance;

• Declaration on compliance with Code of Conduct;

• Certificate from Practicing Company Secretary that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of companies; and 0 Auditors' certificate regarding compliance of conditions of Corporate Governance.

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Company has constituted Corporate Social Responsibility (CSR) Committee and has framed policy on Corporate Social Responsibility. 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 - V and forms part of this report.

All contracts / arrangements / transactions entered by the Company during the financial year under review with related parties were in the ordinary course of business on arm's length basis and are reported in the Notes to Accounts for the financial year ended 31^st March, 2024.

The details of material related party transactions as referred to in Section 188(1) of the Act in the prescribed Form AOC-2 under the Companies (Accounts) Rules, 2014 are given in Annexure - VI and forms part of this report.

In accordance with the provisions of Regulation 23 of the Listing Regulations, the Company has formulated the Related Party Transaction Policy and the same is uploaded on the Company's website at https://static1.squarespace.com/static/54df3692e4b0d9caed7742ae/t/6242e43417456f38e4a7f9b8/164855 0976746/Related+Partv+Transactions+Policv.pdf.

The Company has entered into a Business Transfer Agreement (BTA) with Menon Alkop Limited, the wholly owned subsidiary of the Company for the sale and transfer of its 'Aluminium Division' on Slump Sale basis w.e.f. 1^st April, 2024 for an overall consideration of Rs. 20 Crores, as approved by the shareholders of the Company by special resolution passed under Section 180(1)(a) of the Companies Act, 2013, through Postal Ballot Process, result of which declared on 28^th April 2024.

No other material changes or commitments affecting the financial position of the Company occurred between end of the financial year to which the financial statements relate and the date of this report.

The details of loans, guarantees or investments made by the Company as required under Section 186 of the Act are given under Notes to Accounts for the financial year ended 31^st March, 2024 and forms part of this report.

There was no significant or material order passed by any regulator or court or tribunal, which impacts the going concern status of the Company or will have bearing on company's operations in future.

Pursuant to the provisions of Section 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, which remained unpaid/unclaimed for seven years or more. Further, according to the said Rules, the shares on which dividend remained unpaid or unclaimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Accordingly, during the financial year under review, the Company transferred 29,520 Equity Shares to the demat account of the IEPF Authority for which dividends remained unpaid/unclaimed for seven consecutive years or more.

In terms of the provisions of Section 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the financial year under review, an amount of Rs. 1,471,380/- which remained unpaid and unclaimed dividend for the financial year 2015-16, was transferred to the IEPF account.

Further, the unpaid and unclaimed dividend amount lying with the Company for the financial year 2016-17 is due to transfer to the IEPF. The complete details of the same are available on the Company's website viz. https://menonbearings.in/investor-relations/investorinformation.

The Board has appointed Mr. Arun Aradhye, Whole-Time Director and Chief Financial Officer of the Company as the Nodal Officer to ensure compliance with the IEPF Rules.

The Company has constituted an Internal Committee as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year under review, no complaint was filed before the said Committee. No complaint was pending at the beginning or at the end of the financial year under review.

Pursuant to the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, details regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo are given in Annexure - VII and forms part of this report.

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and your directors confirm compliance of the same during the financial year under review.

During the financial year under review, no application was made or proceeding initiated against the Company under the Insolvency and Bankruptcy Code, 2016 nor any such proceeding was pending at the end of the financial year under review.

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence the Company was not required to carry out valuation of its assets for the said purpose.

Your directors wish to place on record their gratitude for the continued co-operation and patronage extended by the esteemed customers both in OEM and Replacement Market segments. The directors would also like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance extended during the financial year under report by our bankers, customers, suppliers and Government agencies. The Board of Directors wishes to express its appreciation for the valuable contribution made by the employees at all levels during the financial year under review.