Permanent Magnets Ltd

To,

The Members,

PERMANENT MAGNETS LIMITED

Your Board of Director's have pleasure in presenting the 63rd Annual Report on the operational and business performance of the Company together with the Audited (Standalone and Consolidated) Financial Statements for the Financial Year ended March 31, 2024.

FINANCIAL HIGHLIGHTS:

The Company's Financial Performance for the Financial Year ended March 31, 2024 is summarized below:

(Rs in Crores)

1. COMPANY'S PERFORMANCE:

The Highlights of the Company's performance (Standalone) for the year ended March 31, 2024 are as under:

• During the year under review the Company achieved turnover of Rs. 201.47 Crores as against turnover of Rs. 182.74 Crores achieved during the previous year, which is a increase of 10%.

The Profit after Tax (PAT) for the financial year 2023-24 is Rs. 22.74 Crores against Rs. 29.75 Crores in the year 2022-23.

The Highlights of the Company's performance (Consolidated) for the year ended March 31, 2024 are as under:

• During the year under review the Company achieved turnover of Rs. 201.48 Crores.

The Profit after Tax (PAT) for the financial year 2023-24 is Rs. 19.16 Crores.

2. DIVIDEND:

Your Directors have recommend a final dividend of Rs. 1.80/- (Rupee one & eighty paisa only) per share (viz 18%) per equity share of the face value of Rs. 10/- (Rupees Ten only) each for the financial year ended March 31, 2024. The dividend payout is subject to the approval of the members at the ensuing Annual General Meeting. The Dividend will be paid to members whose names appear in the register of members as on record date.

In view of the changes made under the Income-tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the members. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source.

3. CHANGE IN THE NATURE OF THE BUSINESS:

There were no changes in the nature of business during the year under review as prescribed in Rule 8 of the Companies (Accounts) Rules, 2014.

4. TRANSFER TO RESERVE:

The Board of Directors of the Company has not recommended transfer of any amount to the General Reserve for the Financial Year ended March 31, 2024.

5. DEPOSITS:

During the year the Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

6. LISTING:

The shares of the Company are listed on “BSE Limited” at Mumbai. The Company has paid the applicable listing fees to the Stock Exchange till date.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

As on March 31, 2024, the Company has 6 directors with combination of Executive & Non-Executive Directors including one women director.

a. Retirement by Rotation and subsequent Re-appointment:

Mukul Taparia, Non-Executive Director being the longest in the office among the directors liable to retire by rotation, retires from the Board this year and being eligible, has offered himself for re–appointment. The Boards of Directors recommends his re-appointment at Item No. 3 of the Notice Calling 63rd Annual General Meeting for consideration of the members.

b. Appointment of Non-Executive Independent Director:

On the recommendation of Nomination and Remuneration Committee the Board has considered and seek approval from members of the Company as following:

Appointment of Nirmal Kumar Jain (DIN: 00019442) as an Non-Executive, Independent Director of the Company, not liable to retire by rotation for a period of Five (5) consecutive years commencing from August 09, 2024, subject to approval of members of the Company through Special Resolution.

In this regard the Board of Directors of the Company had approved the Notice of AGM dated May 16, 2024, for seeking the approval of Members of the Company by way of Special Resolution for appointment of Nirmal Kumar Jain (DIN: 00019442) as an Independent Director of the Company.

c. Continuation of Directorship of Girish Desai (DIN: 01056763) who will attain age of Seventy Five (75) years on January 21, 2025:

Currently, Girish Desai (DIN: 01056763), holds the position of Non-Executive Director within our Company. He is anticipated to reach the age of seventy-five (75) years on January 21,

2025. Under the provisions of Regulation 17(1A) of the SEBI Listing Regulations, the passing of a Special Resolution becomes necessary for the continuation of his directorship after attaining this age milestone. Deliberating on this matter, the Board of Directors convened on May 16, 2024, and arrived at a unanimous decision to recommend the continuation of Girish Desai (DIN: 01056763), directorships, toacknowledging the significant the growth and progress of the Company.

d. Key Managerial Personnel:

The Key Managerial Personnel of the Company as on March 31, 2024 are:

8. DIRECTORS RESPONSIBILITY STATEMENT:

Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm: I. that in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

II. that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the

Company as at March31,2024and profitof the the

Company for the year ended on that date;

III. that proper and sufficient care has been taken 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;

IV. that the annual financial statements have been prepared on a going concern basis;

V. that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

VI. that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

9. CORPORATE GOVERNANCE:

In terms of Regulation 34 of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, a separate section on corporate governance along with a certificate from the auditor's confirming compliance is annexed and forms part of the Annual Report.

Statutory auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made there under, M/s. Jayesh Sangharajka & Co. LLP Chartered Accountants (Firm Registration No. 104184W/W100075) was appointed as Statutory Auditor of the Company in the 61st Annual General Meeting till the conclusion of the 66th Annual General Meeting of the Company. M/s. Jayesh Sangharajka & Co. LLP Chartered Accountants (Firm Registration

No. 104184W/W100075) have confirmed their eligibility and qualification required under Section 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules issued thereunder (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

M/s. Jayesh Sangharajka & Co. LLP and have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India as required under the Listing Regulations.

Auditors' Report

The Auditor's Report for the year ended March 31, 2024 on the financial statements of the Company is a part of this Annual Report. The notes on Financial Statements referred in the Annual Report are self-explanatory and do not call for any further comments. The Auditor's Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

The Secretarial Audit for the year 2023-24 was undertaken by M/s. Arun Dash & Associates, practicing Company Secretary and the Secretarial Auditor of the Company. The Secretarial Audit Report for the financial year ended March 31, 2024 under the Act, read with Rules made thereunder and Regulation 24A of the Listing Regulations of the Company are annexed herewith as "Annexure A".

The observations made in the Secretarial Audit Report are self-explanatory.

Internal Auditors:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014, during the year under review the Internal Audit of the functions and activities of the Company was undertaken by the Internal Auditors of the Company on quarterly basis by G S Nayak & Co., Chartered Accountants the Internal Auditors of the Company. There were no adverse remarks or qualification on accounts of the Company from the Internal Auditors. Internal Audit report is reviewed by the audit committee from time to time.

11. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company has one wholly owned subsidiary as on March 31, 2024. There are no Associate and Joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”).

Quantum Magnetics Private Limited – Wholly Owned Subsidiary Company (Date of Incorporation: May 31, 2023)

The consolidated financial statements of the Company & its subsidiary which form part of Annual Report have been prepared in accordance with Section 129(3) of the Companies Act, 2013. Further, a statement containing the salient features of the

Financial Statement of Subsidiary Company in the prescribed format AOC-1 is annexed herewith as "Annexure B" to this Report. The statement also provides the details of performance and financial position of the Subsidiary Company.

Your Company owns 100% stake in Quantum Magnetics Private Limited. The Company is currently operating at a small scale as it initiates its business.

12. EXPLANATION ON AUDITOR'S COMMENT:

The Board have to state as under with reference to the Auditor's certain remarks as contained in the annexure to the Auditor's Report:

With reference to para IX of the "Annexure A" to the Auditor's Report, the Central Excise Loan interest has remained unpaid as the matter is pending for the cause of implementing agency claiming compound interest on an interest free excise loan under a scheme of incentives. Matter with relevant agencies and Government of India is being taken up and will be sorted out in due course of time. No material liability is expected in this regard.

13. MANAGEMENT DISCUSSION AND ANALYSIS:

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this Report as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

14. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 (12) read with Rule 5 (1) & (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company is herewith annexed as "Annexure C".

15. SIGNIFICANT AND MATERIAL ORDER PASSED BY THE REGULATORS OR COURTS:

Hon'ble Bombay High Court has given interim stay order against the winding up order passed (against the Company) dated April 15, 2015. This was a lawsuit filed by M/s. Savino

Del Bene Freight Forwarders (India) Private Limited. Company has deposited Rs. 0.19 Crores including interest as per direction of Hon'ble Bombay High Court. The Appeal shall be added to the appropriate board for hearing. But the same is not yet listed on the Board of High Court.

16. RELATED PARTY TRANSACTIONS:

Related party transactions entered during the financial year under review are disclosed in Note No. 9 of Notes to Accounts of the Company for the financial year ended March 31, 2024.

These transactions entered were at an arm's length basis and in the ordinary course of business. There were no material significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules, 2014 are given in "Annexure D" in Form AOC-2 which is part of this report.

The Company in terms of Regulation 23 of the Listing Regulations shall submit on the date of declaration of its standalone and consolidated financial results for the half year, disclosures of related party transactions on a consolidated basis, in the format specified in the relevant accounting standards to the stock exchange.

The Policy on the Related Party Transactions as approved by the Board is uploaded on the website of the Company at www.pmlindia.com .

17. CORPORATE SOCIAL RESPONSIBILITY:

As part of the Corporate Social Responsibility initiative the Company has spent an amount of Rs. 0.58 Crores towards the various CSR activities during the financial year 2023-24.

A report on CSR Activities as required under Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014 is enclosed herewith as “Annexure E”.

The Company has adopted Corporate Social Responsibility Policy in line with Schedule-VII of Companies Act, 2013. The CSR Policy is disclosed on the website of the Company www. pmlindia.com .

18. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by the Board of Directors of the Company in compliance with the provisions of Section 177(9) of the Act and Regulation 22 of the Listing Regulations. Your Company's Whistleblower Policy encourages Directors and employees to bring to your Company's attention, instances of illegal or unethical conduct, actual or suspected incidents of fraud, actions that affect the financial integrity of your Company, or actual or suspected instances of leak of unpublished price sensitive information that could adversely impact your Company's operations, business performance and/ or reputation. The Policy requires your Company to investigate such incidents, when reported, in an impartial manner and take appropriate action to ensure that the requisite standards of professional and ethical conduct are always upheld.

The Whistle Blower Policy has been uploaded on the website of the Company under investors tab at www.pmlindia.com .

19. CONSERVATION OF ENERGY, TECHNOLOGY DEVELOPMENT AND ABSORPTION:

The Conservation of Energy, R & D activity in the Company is mainly carried out by the key line manufacturing and technical personnel in alliance with the key technical sales personnel and outsourced consultants.

“Annexure F” attached hereto which provides the information required to be disclosed on the efforts made on Conservation of Energy, Technology Development and Absorption as per Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

20. FOREIGN EXCHANGE EARNING AND OUTGO:

Please refer to paragraph No. 15 of Notes to accounts for the foreign exchange outgo and earnings of the Company which is required to be disclosed under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

21. PARTICULARS OF LOANS GIVEN, GUARANTEES AND INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED:

The particulars of loans, guarantees and investments as per Section 186 of the Act by the Company, have been disclosed in the financial statements.

22. DECLARATION FROM INDEPENDENT DIRECTORS:

The Company has inter alia, received the following declarations from all the Independent Directors confirming that:

1. They meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedule and Rules issued thereunder, and the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company;

2. They have complied with the Code for Independent Directors prescribed under Schedule IV to the Act; and

3. They have registered themselves with the Independent Director's Database maintained by the Indian Institute of Corporate Affairs.

None of the Directors of the Company are disqualified for being appointed as Directors as specified in Section 164(2) of the Act and Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

23. BOARD MEETINGS:

During the year under review Four Board Meetings were convened and held on May 17, 2023, August 11, 2023, November 07, 2023 and February 13, 2024.

24. COMMITTEE MEETINGS:

The Board has the following Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Corporate Social Responsibility Committee.

A detailed disclosure on the Board, its committees, its composition and brief terms of reference, number of board and committee meetings held, and attendance of the directors at each meeting is provided in the Report on Corporate Governance which forms part of the Annual Report.

25. ANTI SEXUAL HARASSMENT POLICY:

In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (“POSH Act”) along with the Rules made thereunder, the Company has in place a policy which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace. All employees (permanent, contractual, temporary and trainees) are covered under the said policy. During the financial year under review, the Company has not received any complaint of Sexual Harassment of Women at Workplace.

The Company has constituted Internal Committee(s) (“ICs”) to redress and resolve any complaints arising under the POSH Act.

26. ANNUAL RETURN:

The Annual Return of the Company as on March 31, 2024 in Form MGT - 7 is in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, and is available on the website of the Company in investor tab at www.pmlindia.com .

27. ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company has adequate Internal Financial Control

System over financial reporting which ensures that all transactions are authorised, recorded and reported correctly in a timely manner. The Company's Internal Financial Control over financial reporting provides reasonable assurance over the integrity of financial statements of the Company.

Functional heads are responsible for ensuring compliance with all laws and regulations and also with the policies and procedures laid down by the management. System based reports and automated accounting for various areas in financial statements have contributed to better accuracy and faster financial reporting.

The Company tracks all amendments to Accounting Standards, the Act and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same.

All resultant changes to the policy and impact on financials are disclosed after due validation with the statutory auditors and the Audit Committee.

28. SHARE CAPITAL:

The paid up Equity Share Capital as on March 31, 2024 was Rs. 8.60 Crores.There was no change in the share Capital during the year under review. Authorized Capital of the Company is Rs. 16 Crores.

29. BOARD EVALUATION:

In terms of the provisions of Section 134(3)(p) of the Companies Act, 2013 and Regulation 17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, individual Directors as well as the evaluation of the working of its Board Committees. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Directors being evaluated. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 05, 2017.

30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to Section 124 and Section 125 of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, transfer and Refund) Rules, 2016 (‘the Rule'), all the unpaid and unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after the completion of Seven Years. Further according to the Rules, the shares on which dividend has not been paid or claimed by the Shareholder for seven consecutive years or more shall also be transferred to demat account of the IEPF Authority.

Company has not completed seven years since its last dividend declaration or payment, it means that the threshold for transferring funds to the IEPF has not been met. In such cases, the Company would not be eligible to transfer funds to the IEPF until it fulfills this requirement.

31. REPORTING OF FRAUDS:

During the year under review, neither the Statutory Auditor nor the Secretarial Auditor has reported to the Audit Committee under Section 143(12) of the Companies Act, 2013, any instances of the fraud committed by the

Company, its officers and employees, the details of which would need to be mentioned in the Board Report.

32. MATERIAL CHANGES AND COMMITMENTS:

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this report.

33. STATEMENT OF MANAGEMENT RESPONSIBILITY FOR CONSOLIDATED FINANCIAL STATEMENTS:

The Holding Company's Board of Directors are responsible for the preparation and presentation of these Consolidated Financial Statements in terms of the requirements of the Act that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated statement of changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgment's and estimates that are reasonable and prudent; and the design,implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Consolidated Financial Statements by the Directors of the Holding Company, as aforesaid.

34. APPRECIATION:

Your directors would like to record their appreciation for the enormous personal efforts as well as the collective contribution of all the employees to the Company's performance. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government and regulatory authorities, stock exchanges, customers, vendors during the year under review.