Yuken India Ltd

To

The Members of

Your Directors have pleasure in presenting their 48^th Annual Report of the Company together with the Audited Financial Statements for the year ended 31^st March, 2024.

1. FINANCIAL RESULTS:

The Company's financial performance for the year under review along with previous year's figures are given hereunder:

Financial Highlights: H In Lakhs

On Consolidated basis, the Company has registered net income of H42,762.71 lakhs as compared to H37,503.56 lakhs of previous year. The growth is around 14.02 % as compared to the previous year.

On Standalone basis, the Company has registered a net income of H37,097.78 lakhs as compared to H31,995.67 lakhs of previous year. The growth is around 15.94 % as compared to the previous year.

2. DIVIDEND:

Your Directors recommend payment of a dividend of 15% (Fifteen percent) i.e. H1.50 (One rupee fifty paise only) per equity share of H10/- each for the year ended 31^st March, 2024, subject to the approval of the members at the ensuing Annual General Meeting. The dividend pay-out is in accordance with the Company's Dividend Distribution Policy. The Dividend Distribution Policy is available at Company's website: https://www.yukenindia.com/corporate-governance-and-code-of-conduct/

3. ANNUAL RETURN:

In accordance with the Companies Act, 2013, the Annual Return in the prescribed format is available at Company's website at http://www.yukenindia.com/report-result/

4. BOARD MEETINGS HELD DURING THE YEAR:

During the year, 7 (Seven) meetings of the Board of Directors and one meeting of Independent Directors were held. The details of the meetings and the details of attendance of Directors in the meetings are furnished in the Corporate Governance Report.

5. COMPLIANCE ON CRITERIA OF INDEPENDENCE BY THE INDEPENDENT DIRECTORS:

All Independent Directors of the Company have given declarations to the Company under Section 149 (7) of the Companies Act, 2013 that, they meet the criteria of independence as provided in Sub-Section 6 of Section 149 of the Act and also under the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Board is of the opinion that, the Independent Directors of the Company possess requisite qualifications, experience and expertise in the field of manufacturing, finance, auditing, tax, economic, legal and Regulatory matters, Strategic thinking/ planning, decision making, leadership, knowledge about the Company's business and protect interest of all stakeholders. In compliance with the Rule 6(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors have registered themselves with the Indian Institute of Corporate Affairs.

6. REMUNERATION POLICY OF THE COMPANY:

The Remuneration Policy of the Company for appointment and remuneration of the Directors, Key Managerial Personnel and Senior Management of the Company along with other related matters have been provided in the Corporate Governance Report. As and when need arises for appointment of Director, the Nomination and Remuneration Committee (NRC) of the Company will determine the criteria based on the specific requirements. NRC while recommending candidature to the Board, will take into consideration the qualification, attributes, experience and Independence of the Candidate. Director(s) appointment and remuneration will be as per NRC Policy of the Company.

A Statement of Disclosure of Remuneration pursuant to Section 197 of the Act. Read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is forming part of this report.

7. ANNUAL EVALUATION OF BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

The Board of Directors have carried out an annual evaluation of its own performance, its Committees and Directors pursuant to the requirements of the Act and the Listing Regulations. Further, the Independent Directors, at their exclusive meeting held during the year, reviewed the performance of the Board, its Chairman and Non- Executive Directors and other items as stipulated under the Listing Regulations.

8. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:

There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations. All orders received by the Company during the year are routine in nature which have no significant/material impact.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the year under review, your Company has not granted any loan within the meaning of Section 186 of the Companies Act, 2013.

During the year under review, your Company has not made any investments within the meaning of Section 186 of the Companies Act, 2013.

During the year under review, the Company has granted the Corporate Guarantees to its Subsidiary Companies and existing Guarantees are renewed. The details of Guarantees granted and outstanding balances of Corporate Guarantees as on 31^st March, 2024 are as under.

The above loans, guarantees and investments are within the limits prescribed under Section 186 of the Companies Act, 2013.

During the year under review, the Company has not transferred any money towards General Reserve and it is not mandatorily required.

As required under Section 124 of the Companies Act 2013 read with the investor Education and protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and subsequent amendments thereof ("the Rules"), the unclaimed dividend amount aggregating to H80,781/- lying with the Company for a period of 7 (Seven) years pertaining to the financial year ended on 31^st March, 2016 was transferred during the financial year 2023-24 to the Investor Education and Protection Fund ("IEPF") established by the Central Government.

As required under Section 124 of the Companies Act 2013 read with the investor Education and protection Fund Authority

(Accounting, Audit, Transfer and Refund) Rules, 2016 and subsequent amendments thereof ("the Rules"), 2,111 equity shares of H10/- each, in respect of which dividend has not been claimed by the members for 7 (Seven) consecutive years or more, have been transferred by the Company to Investor Education and Protection Fund Authority (IEPF) during the financial year 2023-24. Details of shares transferred have been uploaded on the website of IEPF as well as Company.

In accordance with the general circular issued by the Ministry of Corporate Affairs, Government of India, the Balance Sheet, the Statement of Profit & Loss and other documents of the Subsidiary Companies are not being attached to the Balance Sheet of the Company. The consolidated financial statements presented by the Company includes financial results of its Subsidiary and Associate Companies.

The Annual Accounts of the Subsidiary Companies are available on the website of the Company at http://www.yukenindia. com/report-result/

The details of financial performance of Subsidiaries and Associate Companies are furnished as under:

Statement containing salient features of financial statements of subsidiaries and associate Companies in Form AOC-1 is enclosed herewith as ‘Annexure-1' forming part of this report.

The Board of Directors has adopted a policy on Related Party Transactions. The objective is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. All contracts or arrangements with related parties, entered into or modified during the financial year were at arm's length basis and in the ordinary course of the Company's business.

Transactions with related parties, as per requirements of Indian Accounting Standard 24 are disclosed in the Note No. 45 of the Notes forming part of the financial statements in the Annual Report.

Your Company's Policy on Related Party Transactions, as adopted by your Board, can be accessed on the Company's website. https://www.yukenindia.com/corporate-governance-and-code-of-conduct/ Particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such contracts or arrangements in Form AOC-2 is enclosed herewith as ‘Annexure-2', forming part of this report.

There is no material changes and commitments, affecting the financial performance of the Company occurred between the end of the financial year of the Company to which the Financial Statements relate and the date of this Report.

Pursuant to provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014. The details are as under:

Replaced conventional light fixtures with energy efficient LED light fixtures in the plant.

In order to conserve water, the waterless Urinals have been installed in all restrooms of the main plant.

Power factor was maintained at 0.99 by identifying and replacing faulty capacitors, increasing the frequency of periodical/preventive maintenance of capacitor banks.

Installation of Servo Stabilizer in Shop floor and certain office lighting reduced maintenance cost and saving in energy.

Reduction in total energy footprint through various capital projects ranging from installation of energy efficient pumps, solar street lights in walking area and factory areas, etc.

Replacement of old age screw compressor having low working efficiency with new air compressor.

For natural lighting, transparent sheet has been installed in all the plants to reduce energy consumption.

To reduce the temperature inside the shop floor, various types of plants has been planted vertically on the walls.

The factory has installed 22 waterless urinals resulting in saving up to 22 lakh liters of water per year.

Grey water from the Canteen, Toilets across the factory is treated through the STP and this treated water is used for gardening purposes across the factory.

Initiation of rainwater harvesting projects - Roof water is collected in a 50 Lakh liters tank and used for gardening.

Solar street lights installed at 10 poles aids in power saving, around 25 to 40 watts for each light.

Roof top solar panels and heaters are set-up at canteen and washing areas in the plant.

Photo sensors and movement sensors are installed at multiple locations in the factory thereby reducing power consumption.

1. Foreign Exchange Earnings and Outgo: a. Foreign Exchange Earnings: H in lakhs

H in lakh

2. Research and Development (R&D):

The Company continues to invest in R&D activities towards development of new products and applications, improvement in operating efficiencies and reduction in manufacturing costs.

The Company has developed certain pumps, valves etc., which are energy efficient and as per the customer requirements. The core idea of the Company's investments in R&D is to initiate product upgradations and to develop new products that would give an edge over competitors.

i. Upgradation and modification of chip compacting machine which was originally designed by Yuken Kogyo Co. Ltd., Japan.

ii. Several concepts of energy saving hydraulic power units have been designed to suit customer requirements.

iii. Development of high pressure valves and pumps for steel industries.

iv. In keeping with the Company's focus on energy saving, sustainable technology and in line with the Company's strength in manufacture of vane pumps, a new line of variable volume of vane pumps, PVV Series is being introduced. Currently most of these pumps are used in the country are imported. Yuken India Limited made a small beginning many years ago with RV Series of Pumps. However, PVV Series is an upgrade both in performance and the capacities of the pumps. We hope PVV Series becomes the variable volume Vane pumps of choice in the industry.

v. The Company has developed innovative Hydraulic Clamping mechanism that can be used on any CNC vertical machining center for tool clamping. Currently, the industry uses pneumatically operated clamping devices which are known to be very inefficient.

Special products developed to meet specific requirements of customers which enable your Company to develop niche markets for growth.

Development of additional range of products.

Strong focus on employee involvement to eliminate wastage in operations through focused initiatives.

•Focus on process improvements to enable the Company to penetrate into the export market.

There is a continuous increase in R&D expenditure as the scope of activities carried out keeps on increasing.

3. Technology Absorption, Adaptation and Innovation:

Special models of energy saving pumps and valves have been designed to meet specific needs of customers and these have enabled us to extend our customer base to include a wider range of industries.

Indigenization is a continuous ongoing effort, the Company is focusing on Make in India concept and Atmanirbhar Bharat Abhiyan introduced by Government of India.

Dependency on imports is minimized / import substitution.

Reduction of material cost.

Improvement in Quality and product performance characteristics.

Ability to innovate and produce new products.

Establishing as manufacturing hub to supply globally.

Technology absorption is under progress.

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

There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2013 as on 31^st March, 2024.

Not Applicable.

During the year under review, your Company did not accept any deposit within the meaning of the provisions of Chapter V – Acceptance of Deposits by Companies read with the Companies (Acceptance of Deposits) Rules, 2014.

Pursuant to the Ministry of Corporate Affairs notification amending the Companies (Acceptance of Deposits) Rules, 2014, the Company has filed with the Registrar of Companies the requisite returns for outstanding receipt of money/loan by the Company, which are not considered as deposits.

The Board of Directors comprises of a combination of Executive/Non-Executive Directors and Independent Directors who are professionals in their respective fields and bring in a wide range of skills, experience and expertise. The composition of Board is as under;

were appointed or have resigned/retired during the year are as under: a. Mr. Parabrahman Tadimalla (DIN: 01392252) was appointed as an Additional Director on 14^th September, 2023 and redesignated as Independent Director on 11^th December, 2023. b. Mr. K Chandrashekhar Sharma (DIN: 09505130) was appointed as an Additional Director on 14^th September, 2023 and re-designated as Independent Director on 11^th December, 2023.

Pursuant to provisions of Section 203 of the Companies Act, 2013, following persons are Key Managerial Personnel as on 31^st March, 2024:

*Mr. Vignesh P had resigned from the position of Company secretary & Compliance officer and was relieved from services by closing hours of 13^th January, 2024.

**Mr. Suchithra R was appointed as Company Secretary & Compliance officer with effect from 06^th December 2023.

The details on Internal Control Systems and their adequacy are provided in the Management's Discussion and Analysis which forms part of this Report.

As per the Market Capitalization as on 31^st March, 2024, Risk Management Committee provisions are not applicable to Company as Company does not fall under the Top 1000 companies based on Market Capitalization.

However, in compliance with the provisions of Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Risk Management Committee has been constituted by the Board along with Risk Management Policy. Composition of the Committee and other details are provided in Corporate Governance Report.

Risks are identified by the respective departmental heads. Each Strategic Business Unit (SBU) & Corporate will carry out the Risk Assessment for each identified risk, as applicable to them and will document the results for each risk in the Risk Register. Action will be taken based on the possible impact of the identified risk. The Company has mitigated some of the risks as mentioned below. a. Measures taken by IT department of the Company to mitigate risk relating to security of data and systems of the Company. b. Security measures in the manufacturing units of the Company to prevent accidents. c. Installation of CC TV cameras and siren at factory for safety of the employees. d. Measures taken by the Company to mitigate foreign exchange transaction risks. e. Action being taken to take care of welfare of the employees and other stakeholders.

The Company has a Policy on Corporate Social Responsibility and has constituted a CSR Committee as required under the Act, for implementing the various CSR activities. Composition of the Committee and other details are provided in Corporate Governance Report. Education, Health Care, Protection of Indian Art and Culture, Animal Welfare, Rural Development, disaster management including relief etc., are the focal areas under the CSR Policy.

The Company has implemented various CSR projects directly and/ or through implementing partners and the projects undertaken by the Company are in accordance with Schedule VII of the Act. The Company has spent an amount of H17.06 lakhs for identified CSR activities during the financial year ending 31^st March, 2024. A detailed Report on CSR is enclosed as ‘Annexure-3' forming part of this report.

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3) and 134 (5) of the Act, that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) 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 as at the end of the financial year and of the profit and loss of the Company for that period;

(c) The Directors had 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) The Directors had prepared the annual accounts on a going concern basis;

(e) The Directors had laid down internal financial controls to be followed by the Company as applicable to listed companies and such internal financial controls are adequate and were operating effectively; and

(f ) The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

The Company complies with all the applicable mandatory secretarial standards issued by Institute of Company Secretaries of India.

As on 31^st March, 2024, the Board had 5 (Five) committees: a) The Audit Committee b) The Corporate Social Responsibility Committee c) The Nomination and Remuneration Committee d) Stakeholder's Relationship Committee and e) Risk Management Committee.

A majority of the committees consists entirely of independent directors. During the year, all recommendations made by the committees were approved by the Board. A detailed note on the composition of the Board and its committees are provided in the Corporate governance report, which forms part of this report.

The Company has a Vigil Mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company's Code of conduct. The mechanism provides for adequate safeguards against victimization of Director(s) and Employee(s) who avail of the mechanism.

The Company has published the Whistle Blower Policy in its website, a web link of which is as under: https://www.yukenindia.com/corporate-governance-and-code-of-conduct/

The Company has zero tolerance towards sexual harassment at the work place and has adopted a policy on prevention, prohibition and redressal of sexual harassment at work place in line with the provisions of the Sexual Harassment of women at work place (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder. As required under law, an internal Compliance Committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassments at the work place. During the year, no complaint of sexual harassment has been received.

During the year, there was no revision of the financial statements of the Company.

As part of the Familiarization Programme, Independent Directors of the Company have been made aware of the following information: a. Rules and regulations pertaining to their appointment as Independent Directors, b. Duties and responsibilities of the Independent Directors towards the Company and its stakeholders, c. Code of conduct to be followed by them and d. Company's policies and procedures.

a. Ratio of remuneration of each Director/KMP to the median employee's remuneration and the percentage increase/decrease in the remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year 2023-24:

*Remuneration from 1^st April 2023 to 13^th January 2024

**Remuneration from 06^th December 2023 to 31^st March 2024

1. The Net Profit after tax has increased by H737.49 lakhs (excluding other comprehensive income) as compared to the previous year and the remuneration of the Managing Director has increased by 17.87%. The remuneration is within the limit specified in Schedule V.

2. Remuneration paid /payable to Managing Director and Non-Executive Directors for the financial year 2023-24 is inclusive of Salary, Commission and Sitting Fees.

3. All Non-Executive and Independent Directors are eligible for Commission of 1% on the Net profit of the Company, The Net profit is calculated as per the provisions of Section 198 of the Companies Act, 2013.

4. The Members of Nomination and remuneration Committee and Board of Directors in its meeting held on 07^th June, 2021 have been approved to pay the one-time reward to Mr. K Gopalkrishna – Executive Director is H22 lakhs and Mr. H M Narasinga Rao - CFO & VP Finance is H20 lakhs.

This reward is not included in their remuneration as mentioned above.

b. The number of permanent employees on the rolls of the Company as on 31^st March, 2024 was 389 (previous year: 384).

c. Percentage of change in median remuneration of employees for the financial year is 2%.

d. Average percentage increase/decrease already made in the salaries of employees other than the key managerial personnel in the last financial year and its comparison with the percentage increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Percentage Increase of salaries of employees other than the key managerial personnel in the financial year: 7% as compared to previous year.

Percentage Increase in the key managerial remuneration in the financial year: 13% as compared to previous year. e. The key parameters for any variable component of remuneration availed by the Directors.

Commission payable to Directors has been calculated on the basis of net profits of the Company under the provisions of Section 197 of the Companies Act, 2013 and based on the Nomination and Remuneration Policy of the Company. The Directors (Non-executive) are eligible for the commission on the net profit of the Company for the financial year 2023-24.

f. The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: NIL

It is hereby affirmed that the remuneration paid to the Directors is as per the Nomination and Remuneration Policy of the Company.

g. Information as per Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

i. Employed throughout the financial year and were in receipt of remuneration for the year, in the aggregate of not less than H102 lakhs - NIL

ii. Employed for a part of the financial year and were in receipt of remuneration for any part of the year, at a rate which, in the aggregate, was not less than H8.50 lakhs per month - NIL

iii. Employed throughout the financial year or part thereof, was in receipt of remuneration in the year in excess of that drawn by the managing Director and holds by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the Company – NIL

The Board provides following disclosures pertaining to Companies (Share Capital and Debentures) Rules, 2014:

The Authorized share Capital of the Company is H15,00,00,000 consisting of 1,50,00,000 Equity Shares of H10/- each and paid up equity share capital of the Company is H13,00,00,000 consisting of 1,30,00,000 equity shares of H10/- each as on 31^st March, 2024.

During the year under review, the Company has issued 10,00,000 equity shares of face value H10 each at a premium of H619.00 each aggregating up to H6,290 lakhs to the Promoter i.e. Yuken Kogyo Company Limited on preferential allotment basis.

Pursuant to the provisions of Section 148 of the Companies Act, 2013, read with The Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Board of Directors, on the recommendation of the Audit Committee, have appointed M/s. Adarsh Sharma & Co, Cost Accountants, Bengaluru, as Cost Auditors for conducting Cost Audit for the financial year 2024-25. Your Directors proposed to ratify the remuneration payable to them for the financial year 2024-25 at the ensuing Annual General Meeting.

A resolution seeking Member's approval for remuneration payable to Cost Auditor forms part of the Notice of the Annual General Meeting of the Company and same is recommended for your consideration.

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, M/s. Walker Chandiok and Co., LLP, Chartered Accountants (Firm Registration No.001076N /N500013), were appointed as Statutory Auditors of the Company for a term of 5 years and to hold the office until the conclusion of the 51^st (Fifty first) Annual General Meeting to be held in the year 2027.

There are no qualifications in their report for the financial year ended 31^st March, 2024. Further, the Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act. The Auditor's Report is enclosed with the financial statements.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and Rules made there under, the Board of Directors has appointed M/s. Joseph & Chacko LLP, Practicing Company Secretaries to undertake the Secretarial Audit of the Company for FY 2023-24. The Secretarial Auditors Report for FY 2023-24 does not contain any qualifications. The Report of the Secretarial Audit is annexed herewith as ‘Annexure 4' forming part of this report.

The Board of Directors have re-appointed M/s. Joseph & Chacko LLP, Company Secretary in Practice to conduct the Secretarial Audit for FY 2024-25 also.

Your Company is committed to maintain high standards of Corporate Governance. A report on Corporate Governance along with a Certificate from the Statutory Auditors on compliance of Corporate Governance is attached as ‘Annexure -5' forming part of this report. The certificate does not contain any qualifications.

In terms of Regulation 34 (2) (f ) of SEBI (LODR) Regulations as amended with effect from 5^th May 2021, the requirement of furnishing business Responsibility Report shall apply to top one thousand listed entities based on market capitalization (calculated as on March 31 of every financial year). As we do not fall under the category of top one thousand listed entities as on 31^st March 2024, we are not required to prepare Business Responsibility and Sustainability Report. Hence the report is not prepared for the Financial year 2023-24.

The Management Discussion and Analysis (MDA) forms part of the Annual Report setting out an analysis of business including the industry scenario, performance, financial analysis and risk mitigation.

In accordance with the Accounting Standard Ind AS-110 on "Consolidated Financial Statements" read with Accounting Standard Ind AS-28 on "Accounting for Investments in Associates", the audited Consolidated Financial Statements are provided in the Annual Report.

This report contains forward-looking statements that involve risks and uncertainties. When used in this report, the words "anticipate", "believe", "estimate", "expect", "intend", "will" and other similar expressions as they relate to your Company and / or its business are intended to identify such forward-looking statements. Your Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performance or achievements could differ materially from those expressed or implied in such forward looking statements. This report should be read in conjunction with the financial statements included herein and notes thereto.

Your Directors place on record their sincere thanks to the Customers, bankers, business associates, consultants, Regulatory authorities, Stock Exchanges, various Government Authorities and all the stakeholders for their continued support extended to your Company's activities during the year. Your Directors also acknowledge their gratitude to the Shareholders of the Company, for their continuous support and confidence reposed on the Company. Your Directors wish to place on record their appreciation of the dedicated and untiring hard work put by the employees at all levels.