Spectrum Electrical Industries Ltd

Directors' Report and its Annexure

To,

The Members,

Spectrum Electrical Industries Limited (CIN: L28100MH2008PLC185764)

Gat No. 139/1 and 139/2, Umala,

Jalgaon, Maharashtra - 425003, India.

The Directors of your Company are pleased to present their 16^th Annual Report on the business and operations of the Company along with the Audited Annual Financial Statements and the Auditors' Report thereon for the financial year ended on 31^st March, 2024.

I. FINANCIAL HIGHLIGHTS:

2. DIVIDEND:

The Board has declared and paid interim dividend at the rate of Rs.l/- (Rupee One Only) Per fully paid-up Equity Share amounting to Rs.1,51,19,840/- during the financial year 2023-24.

Statement of Unpaid/Unclaimed Interim Dividend for the year 2023-24 -

Authorized Capital: The authorized share capital of the Company is Rs.17,50,00,000/- consisting of 1,75,00,000 equity shares of Rs. 10/- each.

During the reporting period, the company has issued 1,76,250 equity shares by way of Preferential Issue and 3,10,500 Equity Shares by way of Qualified Institutional Placement issue, according to this, paid up capital of the Company has increased from 1,51,19,840 to 1,56,06,590.

Issued, Subscribed and Paid-up Capital: During the year under review, the Issued, Subscribed and Paid-up Share Capital of the Company is Rs.15,60,65,900/- consisting of 1,56,06,590 equity shares of Rs. 10/- each.

DEPOSITORY SYSTEM:

All the 1,56,06,590 Equity Shares of the Company are in dematerialized form as on 31^st March, 2024.

4. TRANSFER TO RESERVES:

The Company proposes to transfer a sum of Rs.19,45,56,151.45/- to General Reserve during the financial year ended on 31^st March, 2024.

5. MEETINGS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES:

During the financial year 2023-24, 07 (Seven) Meetings (15/05/2023, 01/07/2023, 05/09/2023, 02/11/2023,19/12/2023, 25/01/2024 & H/02/2024) of the Board of Directors of the Company was held. The intervening gap between two meetings was within the period prescribed by the Companies Act, 2013.

6. COMMITTEE:

i. Audit Committee:

Pursuant to provisions of the Section 177 of the Companies Act, 2013 and regulation 18 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has constituted an Audit Committee ("Audit Committee").

Date of Meetings - 14/05/2023, 05/09/2023, 01/11/2023/ and 25/02/2024.

ii. Nomination and Remuneration Committee:

Pursuant to the provisions of the Section 178 of the Companies Act, 2013 and also to comply with Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has constituted Nomination and Remuneration Committee ("Nomination and Remuneration Committee"). Date of Meeting - 18/06/2023

iii. Corporate Social Responsibility Committee:

Pursuant to the provisions of the Section 135 of the Companies Act, 2013 and also to comply with Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has constituted Corporate Social Responsibility Committee ("CSR Committee"). Date of Meetings - 02/07/2023 and 03/03/2024

4. Stakeholders Relationship Committee:

Pursuant to the provisions of the Section 178 of the Companies Act, 2013 and Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has constituted a Stakeholders Relationship Committee ("Stakeholders Relationship Committee"). Date of Meeting: 07/01/2024

5. Operational Committee:

Pursuant to Section 179 of the Companies Act, 2013, the Company has constituted Operational Committee of the Directors and Key Managerial for approving day to day business operations necessary in the ordinary course of business.

6. THE SUMMARY OF OPERATION IS AS UNDER:

During the reporting year under review, your Company has achieved total revenue from operations of Rs 32,226.27/- Lakhs as compared to Rs. 25,337.63/- Lakhs in the previous financial year. After providing for taxes and other adjustments, Profit after tax is Rs. 1,945.56/- Lakhs as compared to Rs. 842.07/- Lakhs during the previous financial year.

7. MATERIAL CHANGES:

There are no material changes in business of the Company.

8. LOANS, GUARANTEES AND INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

During the period under review, the Company has given unsecured loan to its Wholly Owned Subsidiary Company "Spectrum Electrical Technologies Private Limited (Formerly known as Spectrum Electrical Life Solutions Private Limited)" for carrying its business operations and day to day activities. The provisions of the section 186 of the Companies Act, 2013, are not applicable to such transactions held between holding company and its wholly owned subsidiary company.

9. ANNUAL RETURN:

The Annual Return in form MGT-7 as required under Section 92 of the Companies Act, 2013 for the financial year ended on 31^st March, 2024 shall be published on company's website i. e. "www.spectrum-india.com".

10. CHANGE IN NATURE OF BUSINESS, IF ANY:

During the reporting year, there is no change in the nature of business of the Company.

11. VIGIL MECHANISM:

Pursuant to Section 177 of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its

Powers) Rules, 2014 and Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Vigil Mechanism and Whistle-Blower Policy is prepared and adopted by Board of Directors of the Company.

12. RELATED PARTY TRANSACTIONS:

All related party transactions that were entered into during the Financial Year ended on 31^st March, 2024 were on an arm's length basis and were in the ordinary course of business. Therefore, the provisions of Section 188 of the Companies Act, 2013 were not attracted. Further, there are no materially significant related party transactions during the year under review made by the Company with promoters, Directors, Key Managerial Personnel, or other designated persons which may have a potential conflict with the interest of the Company at large. Disclosure in Form AOC-2 is attached herewith as Annexure - II which forms part of this report.

13. DEPOSITS FROM PUBLIC:

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

14. DETAILS OF SUBSIDIARY, JOINT VENTURE, OR ASSOCIATE COMPANIES:

Your Company does not have any joint ventures or associate Companies as defined under Companies Act, 2013. Details of Subsidiary Companies disclosed in Form AOC-1 is attached herewith as Annexure - I which forms part of this report.

15. AUDITOR:

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the rules framed thereunder and Listing Regulations of Securities and Exchange Board of India Act, 1992 as amended from time to time or any other law for the time being in force (including any statutory modification or amendment or re-enactment thereof for the time being in force), M/s. SHARPAARTH & CO LLP, (Formerly known as M/s. SHARPAARTH & CO.) Chartered Accountants, Jalgaon (FRN-132748W/W100823), who were appointed as Statutory Auditors of the Company in the Annual General Meeting of the Company held on 30/09/2019 to hold office for a period of 5 years i. e. from financial year 2019-20 to 2023-24 i. e. till the conclusion of ensuing Annual General Meeting.

The Board further informs that the company has obtained the consent and eligibility letter from., M/s. SHARPAARTH & CO LLP, (Formerly known as M/s. SHARPAARTH & CO.) Chartered Accountants, Jalgaon (FRN-132748W/W100823), to act as statutory auditor of the company for the further period of five years from 2024-25 to 2028-29. Considering this, your directors recommend appointment of M/s. SHARPAARTH & CO LLP, (Formerly known as M/s. SHARPAARTH & CO.) Chartered Accountants, Jalgaon (FRN-132748W/W100823), as statutory auditors for a further period of five years.

16. AUDITORS REPORT:

The Auditors Report on the Audited Financial Statements (standalone and Consolidated) of the Company for the year ended on 31^st March, 2024 does not contain any qualification, reservation or adverse remark so need not require any explanation or comment.

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, Ms. Yuti Nagarkar, Company Secretary (Membership No. F9317 and C.P. No. 10802) having office at: Plot No. 181, Padmaja Apartment, Near Jain Mandir, Laxmi Nagar Nagpur - 440022 has been appointed as the Secretarial Auditor of the Company to conduct the Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report forms part of Annual Report and it is annexed as Annexure-lll.

The Secretarial Audit Report for the Financial Year ended on 31st March, 2024 issued by Secretarial Auditor, do not contain any qualification, reservation or adverse remark so need not require any explanation or comment.

Internal Auditor:

As per requirements of Section 138(l) of the Companies Act, 2013 read with rule 13 of the Companies (Accounts) Rules, 2014, the Board of Directors of the Company had appointed M/s. SONAWANE MOR AND COMPANY, Chartered Accountants (FRN: FRN:145576W) Office No. D-13, 2nd Floor, Above Bakers Point, Golani Market, Jalgaon 425001, Maharashtra, India as an Internal Auditor of the Company for the year 2023-24.

17. DIRECTOR'S RESPONSIBILITY STATEMENT:

Pursuant to clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Directors confirm that: -

i. in the preparation of the annual accounts for the financial year 2023-24, the applicable accounting standards have been followed and there are no material departures;

ii. the Directors had 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 the financial year;

iii. the Directors had taken proper and sufficient care to the best of their knowledge and ability for the maintenance of adequate accounting records in accordance with the provisions of the Act. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors had prepared the annual accounts on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating properly; and

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

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING & OUTGO:

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 in Annexure- IV and is annexed to this report.

19. INDEPENDENT DIRECTOR DATABANK REGISTRATION:

Pursuant to a notification dated October 22, 2019 issued by the Ministry of Corporate Affairs, all directors have completed the registration with the Independent Directors Databank. Requisite disclosures have been received from the directors in this regard. Your Company has received annual declarations from all the Independent Directors of the Company confirming that they have already registered their names with the data bank maintained by the Indian Institute of Corporate Affairs ["MCA"] as prescribed by the Ministry of Corporate Affairs under the relevant rules.

Further, the respective independent directors have ensured that they will take self - assessment test applicable to them in due course of time.

20. RISK MANAGEMENT:

Risks are events, situations or circumstances which may lead to negative consequences on the Company's businesses. The Risk management process is designed to safeguard the organisation from various risks through adequate and timely actions. It is designed to anticipate, evaluate, and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

The Company has laid down a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework.

The major risks have been identified by the Company and its mitigation process/measures have been formulated in the areas such as business, project execution, event, financial, human, environment, and statutory compliance.

21. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS:

The Company maintains a system of Internal Control including suitable monitoring procedures. The Internal Control System is supplemented by an exhaustive programme of internal audits and said audits are then reviewed by Audit Committee from time to time.

The Board of Directors of the Company have adopted various policies such as Related Party Transactions Policy, Whistle Blower Policy, Policy to determine the Materiality of Event, Documents Preservation Policy, Corporate Social Responsibility Policy, Nomination and Remuneration Policy, Code of Conduct and such other procedures for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

Pursuant to Section 152 and other applicable provisions of the Act, and the Articles of Association of your Company, one-third of the Directors (other than Independent Directors) as are liable to retire by rotation, shall retire every year and, if eligible, offer themselves for re-appointment at every AGM. Consequently, Mr. Devendra Sudhakar Rane (DIN: 06415078), retires by rotation and being eligible, offers himself for re-appointment in accordance with provisions of the Act.

23. DECLARATION FROM INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and rules made thereunder and relevant regulation of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

24. 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.

25. PARTICULARS OF EMPLOYEE:

The information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed Annexure-V.

26. CORPORATE SOCIAL RESPONSIBILITY:

The Report on CSR activities for the financial year 2023-24 is enclosed as Annexure-VI.

27. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

During the reporting period, no funds required to be transferred to Investor Education and Protection Fund (lEPF).

28. HUMAN RESOURCE DEVELOPMENT:

Human resources are the most valued assets of the Company. They work individually and collectively contributing to the achievement of the objectives of the business. The relation between the employees and the Company remained cordial throughout the year. Our Company believes in hiring new talents and encourages them to grow both at personal and professional levels through regular skill and personal development training. The Company encourages a conducive work environment and aligns personal goals with Company's growth vision for a win-win situation. The employees are given ample recognition to keep them motivated byway of conducting various recreational activities and reward and recognition programmes.

29. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE:

The Company has always believed in providing a safe and harassment free workplace for every individual working in the Company premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company has in place robust policy on prevention, prohibition and redressal of complaints relating to sexual harassment at workplace which is applicable to the company as per the provisions of Sexual Harassment of Women at Workplace (Prevention, prohibition, and Redressal) Act, 2013.

The company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, prohibition, and Redressal) Act, 2013.

30. CODE OF CONDUCT:

According to Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Code of Conduct of the Company has been approved and adopted by the Board of Directors of the Company. All Board members and senior management personnel have affirmed the compliance with the code. A declaration to this effect, duly signed by the Managing Director, forms part of this Report.

31. CODE FOR PREVENTION OF INSIDER TRADING:

As per SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has adopted a Code of Conduct for Prevention of Insider Trading & Code of Corporate Disclosure Practices. All the Directors, employees and third parties such as auditors, consultants etc. who could have access to the unpublished price sensitive information of the Company are governed by this code. The trading window is closed during the time of declaration of results and occurrence of any material events as per the code. Mr. Rahul Lavane, Company Secretary and Compliance Officer of the Company is responsible for setting forth procedures and implementation of the code for trading in the Company's securities.

32. POLICY FOR PRESERVATION OF DOCUMENTS:

In accordance with the above Regulation 9 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Policy for preservation of documents (The Policy) has been framed and adopted by the Board of Directors of the Company in their Board Meeting to aid the employees in handling the Documents efficiently. This Policy not only covers the various aspects on preservation of the Documents, but also the safe disposal/destruction of the Documents.

33. MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis forms part of this Annual report is annexed with Annexure - VII.

34. FRESH EQUITY AND WARRANTS ISSUE PROCEED UTILIZATION:

The details of fresh issue proceeds utilization are annexed as Annexure - VIII

35. CORPORATE GOVERNANCE:

The Company being listed on the SME Platform of National Stock Exchange Limited is exempted from provisions of Corporate Governance as per Regulation 15 of the SEBI (LODR) Regulations, 2015. Hence no Corporate Governance Report is required to be disclosed with Annual Report. It is pertinent to mention that the Company follows majority of the provisions of the corporate governance voluntarily.

36. DISCLOSURE FOR FRAUDS AGAINST THE COMPANY:

In terms of the provisions of section 134 (3) (ca) of the Companies Act, 2013, there were no frauds committed against the Company and persons who are reportable under section 141 (12) by the Auditors to the Central Government. Also, there were no non-reportable frauds during the year 2023-24.

37. UNSECURED LOAN:

Pursuant to Rule 2(c)(viii) of Companies (Acceptance of Deposits) Rule 2014 the company has accepted unsecured loan form Directors the details of which are given below:

38. PERFORMANCE EVALUATION OF THE BOARD:

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder, the Board has carried the evaluation of its own performance, performance of Individual Directors, Board Committees, including the Chairman of the Board on the basis of attendance, contribution and various criteria as recommended by the Nomination and Remuneration Committee of the Company. The evaluation of the working of the Board, its committee, experience and expertise, performance of specific duties and obligations etc. The Directors expressed their satisfaction with the evaluation process and outcome.

The performance of each of the non-independent directors was also evaluated by the independent directors at the separate meeting held by the Independent Directors of the Company.

39. COMPLIANCE WITH APPPLICABLE SECRETARIAL STANDARDS:

During Financial Year 2023-24, the Company has complied with the relevant appliable provisions of Secretarial Standards issued by the Institute of Company Secretaries of India.

Credit Rating:

The Company has obtained the credit rating on Long Term Bank Loan facility and short term Bank Loan, from India Ratings and Research, a Fitch Group Company which is as under:

i. Rating non-fund-based WC Limit - IND A4+

ii. Rating on fund-based WC Limit: IND BB+/stable/lND A4+

iii. Rating on Long Term Loans: IND BB+/Stable Disclosure of Pending Cases/lnstances of Non- Compliance:

There were no non-compliances by the Company and no instances of penalties and strictures imposed on the Company by the Stock Exchanges or SEBI or any other statutory authority on any matter related to the capital market during the last years.

Means of Communication:

In accordance with Regulation 46 of the SEBI Listing Regulations, the company has maintained a functional website at www.spectrum-india.com containing information about the Company viz., details of its business, financial information, shareholding pattern, details of the policies approved by the Company, contact information of the designated officials of the Company who are responsible for assisting and handling investor grievances etc. The contents of the said website are updated from time to time.

Further, the Company disseminates to the Stock Exchanges (i.e. NSE), wherein its equity shares are listed, all mandatory information and price sensitive/such other information, which in its opinion, are material and/or have a bearing on its performance/operations and issues press releases, wherever necessary, for the information of the public at large.

41. ACKNOWLEDGEMENT:

The Directors wish to place on record appreciation and gratitude for all the co-operation extended by various Government Agencies/Departments, Bankers, Consultants, Business Associates, and Shareholders, Vendors, Customers etc. The Directors also record appreciation for the dedicated services rendered by all the Executives, Staff & Workers of the Company at all levels, for their valuable contribution in the working of the Company.