patels airtemp india ltd Directors report

To,

The Members,

PATELS AIRTEMP (INDIA) LTD.

Ahmedabad.

Your Directors have pleasure in presenting herewith the 31^st Annual Report 2022-23 together with the Audited Standalone & Consolidated Financial Statements of the Company for the year ended 31^st March, 2023.

FINANCIAL RESULTS (STANDALONE)

( in lakhs except EPS)

Particulars	Year ended 31-03-2023	Year ended 31-03-2022
Revenue from Operations	28147.85	30321.97
Other Income	132.56	112.47
Total Income	28280.41	30434.44
Less: Depreciation & Amortisation Expenses	410.83	361.55
Finance Cost	1204.84	901.51
Other Expenses	25128.94	27487.95
Total Expenses	26744.61	28751.01
Profit before Tax	1535.80	1683.43
Less :Tax Expenses	416.99	443.30
Net Profit for the year	1118.81	1240.12
Total Comprehensive Income for the year	1112.50	1240.33
Balance brought forward from previous year	9726.64	8613.06
Other Comprehensive Income (Net of Tax)	(6.31)	0.21
Profit available for Appropriation	10839.14	9853.39
Less: Dividend	141.97	126.76
Less: Tax on Dividend	--	--
Less Transfer to General Reserve	--	--
Surplus carried forward to Balance Sheet	10697.17	9726.63
Earnings Per Share of 10/- each ( )	21.44	24.46

STATE OF COMPANYS AFFAIRS (STANDALONE)

The Company has earned total revenue from operations of 28147.85 Lakhs during the year ended on 31^st March, 2023 as against 30321.97 Lakhs earned during the previous year ended on 31^st March, 2022. The Company has also earned other income of 132.56 Lakhs during the year under review as against 112.47 Lakhs earned during the previous year.

Out of the total revenue from operations of 28147.85 Lakhs earned by the Company during the year under review, 27784.36 Lakhs represents sale of products (Domestic & Export), 163.60 Lakhs represents sale of Services (Processing Charges) and 199.90 Lakhs represents other operating revenue including export incentives.

The Company has incurred total expenses of 26744.61 Lakhs during the year ended on 31^st March, 2023 as compared to 28751.01 Lakhs incurred during the previous year ended on 31^st March, 2022.

The Company has earned the Profit before Tax of 1535.80 Lakhs during the year ended on 31^st March, 2023 as compared to 1683.43 Lakhs earned during the previous year ended on 31^st March, 2022.

The Company has earned Net Profit of 1118.81 Lakhs for the year ended on 31^st March, 2023 after making Provision for Tax Expenses of 416.99 Lakhs and other adjustments, as compared to Net Profit of 1240.12 Lakhs earned by the Company during the previous year ended on 31^st March, 2022.

After adding the Surplus in the Statement of Profit & Loss of 9726.64 Lakhs brought forward from the previous year to the profit of 1118.81 Lakhs earned by the Company during the year under review and after adjusting the amount of 6.31 Lakhs towards Items of Other Comprehensive Income for the year (Net of Tax) and Dividend of 141.97 Lakhs, the total amount of 10697.18 Lakhs is available for appropriation. The Audited Standalone Financial Statements of the Company and all other documents required to be attached thereto have been included in the Annual Report 2022-23, which has been put on the Companys website https://www.patelsairtemp.com/investors/annual-reports/.

MATERIAL EVENTS DURING THE YEAR PREFERENTIAL ISSUE AND CHANGE IN SHARE CAPITAL

During the financial year 2022-23, 4,00,000 Equity Shares of face value of 10/- each of the Company for cash at a premium of 222/- per share aggregating to 9,28,00,000/- (Rupees Nine Crores Twenty Eight Lakhs Only) (Distinctive Nos. from 5070241 to 5470240), issued and allotted to the Promoters and Promoter Group of the Company on 16^th November, 2022 under Preferential basis as per provisions of the Companies Act, 2013 and Rules made thereunder and SEBI (ICDR) Regulations, 2015 upon conversion of their unsecured loan advanced to the Company as stipulated by Bank of Baroda (the Banker) into Equity Shares as approved by the Shareholders at the Extraordinary General Meeting (EGM) held on 8^th October, 2022, due to which, the Share Capital of the Company has been increased from 50,70,240 Equity Shares of 10/- each to 54,70,240 Equity Shares of 10/- each due to issue and allotment of 4,00,000 Equity Shares.

The Company has received listing and trading approval from BSE Ltd. vide its letter No. LOD/PREF/TP/ CP/13646/2022-23, dated 1^st December, 2022 for trading of 4,00,000 Equity Shares of 10/- each effective from 2^nd December, 2022.

The Equity Shares issued on preferential basis will be subject to lock-in as provided in Regulation 167(1) of the SEBI ICDR Regulations i.e. for a period of 18 months from the date of trading approval. As such, 4,00,000 Equity Shares of face value of 10/- each of the Company for cash at a premium of 222/- per share aggregating to 9,28,00,000/- (Distinctive Nos. from 5070241 to 5470240) allotted to the Promoters and Promoter Group under Preferential Issue upon conversion of their unsecured loan into Equity Shares, have been locked in up to 30^th June, 2024.

However, the Honble National Company Law Tribunal (NCTL), Ahmedabad Bench has issued the Order dated 6^th October, 2022 against the Interlocutory Application (IA) No. IA/68(AHM)2022 read with Company Petition (CP) No. 58/(AHM)2018 filed by one Mr. Bhavesh D. Narumalani (Applicant) vs. Therm Flow Engineers Private Limited (Respondent) with regards to approval of the Shareholders received at the Extraordinary General Meeting ("EGM") of the members of the company held on 8^th October, 2022 for the above referred Preferential Issue that in case of any resolution passed in this meeting which is ultimately affecting the rights of the Applicant, it is subject to outcome of the said referred Interlocutory Application and Company Petition. However, the Company has so far not received any directives from the Honble NCLT/ High Court in the above matter as on the date of this Report.

Pursuant to Regulation 32(7A) of SEBI Listing Regulations, 2015 as amended read with SEBI circular no. CIR/ CFD /CMD1/162/2019 dated 24^th December, 2019, the Statement of Deviation / Variation in utilisation of funds raised by the Company under Preferential Issue as above from the objects stated in the explanatory statement to the notice for the general meeting was not applicable to the Company as it was conversion of unsecured loan of Promoters and Promoter Group into Equity Shares. The Company submitted to BSE Ltd., the stock exchange, Statement of deviation(s) or variation(s) along with the quarterly financial results.

RE-CLASSIFICATION OF PROMOTER / PROMOTER GROUP TO PUBLIC SHAREHOLDER CATEGORY

Mrs. Rashmika Narendra Patel holding 3,07,326 Equity Shares (6.06% of share capital) of the Company, have been re-classified from Promoter category to Public Shareholder category duly approved by BSE Limited vide its letter no. LIST/COMP/YG/30/2022-23 dated May 25,2022.

Mr. Kanaiyalal Gagandas Narumalani holding 3,750 Equity Shares (0.07% of share capital) of the Company, have been re-classified from Promoter Group category to Public Shareholder category duly approved by BSE Limited vide its letter no. LIST/COMP/YG/29/2022-23 dated May 25,2022.

DIVIDEND

The Directors have recommended dividend of 3.00 per share (@ 30 %) on 54,70,240 Equity Shares of 10/- each of the Company (share capital increased from 50,70,240 Equity Shares of 10/- each to 54,70,240 Equity Shares of 10/- each due to issue and allotment of 4,00,000 Equity Shares on Preferential basis as above) out of the profits of the Company for the Financial Year ended 31^st March, 2023 (2022-23), as compared to Dividend of 2.80 per share (@ 28 %) declared on 50,70,240 Equity Shares of 10/- each for the previous Financial Year ended 31^st March, 2022. This will absorb 164.11 lakhs.

A resolution to that effect has been placed for the approval of the members at this Annual General Meeting of the Company and that the same, when declared, shall be paid to the Members.

Pursuant to Finance Act, 2020, dividend income will be taxable in the hands of the shareholders w.e.f. 1^st April 2020 and the Company is required to deduct tax at source ("TDS") from dividend paid to the Members at prescribed rates, subject to the provisions of Income Tax Act, 1961. In this regard, the details regarding TDS have been mailed to the shareholders and have also been included in the Notice of AGM included in this Annual Report.

TRANSFER TO RESERVE

In view of above, the Company has not transferred any amount to the General Reserve for the year ended on 31^st March, 2023 and retain the entire amount of profits in the Profit & Loss Account.

EXPANSION UNDER NEW GREENFIELD PROJECT (DUDHAI UNIT)

In respect of new Greenfield project set up by the Company in the year 2019-20 at Dudhai, Taluka. Kadi, Dist. Mehsana, Gujarat (Dudhai Unit), the Company has constructed total four bays/shades with total covered area of 11,016 Sq. Mtrs., with total capital outlay of around 24.00 crores.

With this, the Company has created additional infrastructure required for the purpose of taking care of a part of the production process and primarily removed the space constraints and the company is in a position to carry out the assembly operations in a cost effective and efficient manner.

WHOLLY-OWNED SUBSIDIARY (WOS/FOREIGN ENTITY) (OVERSEAS SUBSIDIARY)

Members are aware that during the year 2019-20, Patels Airtemp (USA) Inc. became Wholly Owned Subsidiary (WOS/Foreign Entity) of the Company on 13^th January, 2020 by acquiring 100% Shares of Patels Airtemp (USA) Inc.

During the year under review, there are no significant transactions and arrangements entered into by the said Wholly Owned Subsidiary of the Company. Audit Committee and Board of Directors of the Company review quarterly unaudited financial results / statements of the said Wholly Owned Subsidiary. The Company monitors performance of its Wholly Owned Subsidiary, inter alia, by the Minutes of Board Meetings and General Meeting of the said Wholly Owned Subsidiary placed before the Companys Board.

As on March 31, 2023, the Company did not have any material unlisted subsidiary as defined in Regulation 16(1)(c) of SEBI Listing Regulations. Accordingly, the requirement of appointment of Independent Director of the Company on the Board of Directors of the material unlisted subsidiary companies as per Regulation 24 of SEBI Listing Regulations does not apply.

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is put up on the Companys website and can be accessed at https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/policy-on-material-subsidiaries.pdf.

The Company has already filed an Annual Performance Report (APR) in Form ODI Part II with the Reserve Bank of India for the year ended 31^st December, 2022 for its Overseas Direct Investment (ODI) in its Wholly Owned Subsidiary (WOS) Patels Airtemp (USA) Inc. The Company has also filed an Annual Return on Foreign Liabilities and Assets (FLA) for the year 2022-23 (as on 31^st March, 2023) with Reserve Bank of India.

CONSOLIDATED FINANCIAL STATEMENTS

Pursuant to the requirements of Section 129(3) read with Schedule III of the Companies Act, 2013 and Rules made thereunder and as stipulated by Regulation 33 of SEBI Listing Regulations and applicable Indian Accounting Standards, the Consolidated Financial Statements of the Company and its Wholly Owned Subsidiary (WOS/Foreign Entity) namely Patels Airtemp (USA) Inc. for the year ended 31^st March, 2023 have been attached with the Financial Statements of the Company. The Audited Consolidated Financial Statements together with Auditors Report form part of the Annual Report. The Consolidated Financial Statements comprise of Audited Financial Statements of the Company and management certified / Unaudited Financial Statements of Patels Airtemp (USA) Inc.

In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the SEBI Listing Regulations, the Audited Consolidated Financial Statements of the Company and all other documents required to be attached thereto have been included in the Annual Report 2022-23, which has been put on the Companys website https://www.patelsairtemp.com/investors/annual-reports/.

The Financial Statements of the Wholly Owned Subsidiary (WOS/Foreign Entity) for the year ended 31^st December, 2022, as required, are also put up on the Companys website and can be accessed at https://www.patelsairtemp.com/investors/subsidiary-company-accounts/. These documents will also be available for inspection on all working days, except Saturdays, during business hours, at the Companys Registered Office/Factory (Works) at Rakanpur, Dist. Gandhinagar.

A statement containing the salient features of the financial statements of the Companys Wholly-Owned Subsidiary (WOS/Foreign Entity) for the year ended 31^st March, 2023 in the prescribed Form AOC-1 as per first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rule 5 of the Companies (Accounts) Rules, 2014 is attached herewith as per Annexure - A and forms an integral part of this Report.

FUTURE PROSPECTS

As you aware that the Company is in engineering industry and is engaged in manufacturing/fabricating tailor made machines and therefore, the order book position of such type of company can play pivotal role in the growth of the Company. Your Directors are pleased to state that continuing the past trend; the Company has confirmed orders of about 490 Crores on hand as on 1^st August, 2023. Thus, your Directors are quite bullish on repeating similar performance in future. Your Directors are cautious and making untiring efforts so as not to compromise on growth, quality, and profitability of the Company.

MATERIAL CHANGES AND COMMITMENTS

In terms of Section 134(3)(l) of the Companies Act, 2013, no material changes or commitments affecting the financial position of the Company have occurred between the end of the financial year and the date of this Report. There has been no change in the nature of business of the Company.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

The Company has not received any significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

ANNUAL RETURN

Annual Return of the Company as on 31^st March, 2023 as required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 in the prescribed Form MGT-7 is put up on the Companys website and can be accessed at https://www.patelsairtemp.com/investors/annual-return/.

MANAGEMENT DISCUSSION AND ANALYSIS (MDA)

In terms of provisions of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report has been enclosed herewith as per Annexure – B and forming part of the Directors Report.

RECOGNITION OR AWARDS

Along with development of product design and product manufacturing application, the Company in its tenure of 50+ years continuously upgraded quality and product system by acquiring worlds most recognized system like ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ASME (U2, U, S-Stamps). The Company is having Quality Management System as per ISO 9001-2015 certification from TUV-SUD and recently received Certificate for Environment Management System as per ISO 14001:2015 and Occupational Health and Safety (OH&S) Management System as per ISO 45001:2018 from TUV-NORD.

The Companys products have ASME (American Society of Mechanical Engineers-USA) "U", "U2" and "S" Stamp authorization. The Company is also having "NB" and "R" Stamp. The Company is also a member of HTRI (Heat Transfer Research, Inc, U.S.A.) for updating Heat Transfer Technology.

Due to "U"/ "U2"/ "S" Stamp authorization, it is expected to improve the Quality of the products/equipment of the Company and to achieve higher growth and profitability of the Company in future.

The Company has also licensed software of ANSYS, CREO, PVelite, Nozzle Pro and TEKLA for product development.

FINANCE

During the year 2022-23, the total working capital facilities, including additional Working Capital Term Loan (AWCTL) under BGECL scheme and under Emergency Credit Line Guarantee Scheme (ECLGS), availed by the Company from Bank of Baroda and Axis Bank Ltd. under consortium arrangement has been increased from 194.17 Crores to 249.17 Crores (increased from 140.92 crores to 180.92 crores from Bank of Baroda and from 53.25 crores to 68.25 crores from Axis Bank Ltd.). The Company has duly executed security documents such as Hypothecation, Mortgage and other documents in favour of Bank of Baroda and Axis Bank Ltd. for availing such enhanced / reviewed Working Capital facilities aggregating to 249.17 Crores and also filed forms regarding charges with ROC under MCA portal.

The Company is also availing Bill Discounting facility from Citibank NA.

The Company is also availing overdraft facility against fixed deposit with various branches of Bank of Baroda. The Company also availed temporary excess/overdrawing facility in Cash Credit (CC) limit to the extent of 1.00 Crore as a temporary overdraft for a period of 15 days on urgent basis from Bank of Baroda.

ACCEPTANCE OF DEPOSITS

During the year under review, the Company has not accepted any deposits from the Public and Members of the Company and therefore not required to comply with the requirement under the Companies Act, 2013 and the Rules made thereunder. As such, no amount of principal or interest was outstanding to the Public and Members of the Company as on March 31, 2023 and the Company is not required to furnish information in respect of outstanding deposits under Non-banking, Non-financial Companies (Reserve Bank) Directions, 1966 and Companies (Accounts) Rules, 2014.

During the year under review, the Company has accepted deposits from the Directors of the Company which are exempted deposits under Rule 2(1)(c)(viii) of Companies (Acceptance of Deposits) Rules, 2014, subject to compliance of the provisions of the Companies Act, 2013 and the Rules made thereunder. During the year under review, the Relatives of the Directors also brought in unsecured loan/deposits by way of contribution to bring additional long term funds as a part of conditions imposed by Bank of Baroda on the Promoters and their relatives, while reviewing working capital facilities to the Company vide its Letter No. AR/SMEBR/2021-22/July, 94 dated 7^th August, 2021, which are exempted deposits under Rule 2(1)(c) (xiii) of Companies (Acceptance of Deposits) Rules, 2014.

During the financial year 2022-23, part of unsecured loan/deposit to the extent of 9.28 Crores of the Directors/Promoters and their relatives lying with the Company were converted into 4,00,000 Equity Shares of face value of 10/- each of the Company for cash at a premium of 222/- per share, issued and allotted to the said Directors/Promoters and their relatives on 16^th November, 2022 under Preferential basis as per provisions of the Companies Act, 2013 and the Rules made thereunder and SEBI (ICDR) Regulations, 2015 and duly approved by the Shareholders at the Extraordinary General Meeting (EGM) held on 8^th October, 2022.

Details of exempted deposits accepted and repaid by the Company including interest to the Directors & their Relatives during the financial year 2022-23 are mentioned in Note No. 33 (Relate Party information) of the Notes to the Standalone Financial Statements attached with this Annual Report.

The Company has duly filed the required Form DPT-3 during the year under review regarding exempted deposits under MCA portal.

TRANSFER OF UNCLAIMED DIVIDEND TO IEPF

In terms of the provisions of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF), as amended, during the year under review, the Company has transferred the amount of unclaimed/unpaid Dividend of 1,99,588.40/- for the financial year 2014-15 to IEPF established by the Central Government under Section 124 & 125 of the Companies Act, 2013 and Rules made thereunder. Pursuant to provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid / unclaimed amounts lying with the Company as on 27^th September, 2022 (date of the previous Annual General Meeting) on the Companys website: https://www.patelsairtemp.com/investors/ unclaimed-dividend/.

TRANSFER OF SHARES TO IEPF DEMAT AUTHORITY ACCOUNT

Pursuant to the provisions of Section 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has, during financial year 2022-23, transferred to the IEPF Authority 3,091 Equity Shares of the face value of 10/- each belonging to 35 Shareholders in respect of which dividend had remained unpaid or unclaimed for seven consecutive years or more from 2014-15 to 2020-21. Details of shares transferred to the IEPF Authority are available on the website of the Company https://www.patelsairtemp.com/investors/ iepf-shares-transfer/.

The said details have also been uploaded on the website of the IEPF Authority and the same can be accessed through the link: www.iepf.gov.in. In accordance with the said IEPF Rules and its amendments, the Company had sent notices to all the Shareholders whose shares were due to be transferred to the IEPF Authority and simultaneously published newspaper advertisement. The voting rights on the shares transferred to IEPF Authority shall remain frozen till the rightful owner claims the shares.

Members may note that the dividend and shares transferred to the IEPF can be claimed back by the concerned shareholders from the IEPF Authority after complying with the procedure prescribed under the Rules. The Company has duly appointed Company Secretary of the Company as Nodal Officer for the purposes of verification of claims and coordination with Investor Education and Protection Fund Authority.

The Company has duly filed all the required IEPF Forms with the authorities.

CORPORATE GOVERNANCE

Being a Listed Company, the Company has taken necessary measures to comply with the provisions of Listing Regulations regarding Corporate Governance as amended from time to time. A separate report on Corporate Governance for the year ended 31^st March, 2023 is attached herewith as a part of this Annual Report viz Annexure - C. A certificate from Practicing Company Secretary regarding compliance of the aforesaid provisions of Corporate Governance is obtained by the Company and annexed to the Corporate Governance Report. The Certificate on Corporate Governance issued by Practicing Company Secretary for the financial year 2022-23 does not contain any qualification, reservation or adverse remark in respect of Corporate Governance Report.

The Company has furnished to BSE Ltd., where the Shares of the Company are listed, Corporate Governance Compliance Report for the Quarter/Half-year/Whole year during the financial year 2022-23 in the format as specified by SEBI from time to time as placed before the Board as per various provisions of SEBI Listing Regulations. The said Corporate Governance Compliance Report have also been uploaded on the website of the Company https://www.patelsairtemp.com/investors/corporate-governance-report/.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the confirmation and explanations obtained by them, your Directors make the following statement in terms of Section 134(3)(C) and 134(5) of the Companies Act, 2013 and confirm that: (a) in the preparation of the annual accounts for the year ended 31^st March, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same; (b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2023 and of the profit of the Company for the year ended on that date; (c) the Directors have taken proper and sufficient care 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; (d) the Directors have prepared the annual accounts for the year ended on 31^st March, 2023 on a going concern basis; (e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and (f) 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.

PARTICULARS OF LOAN GIVEN AND INVESTMENT MADE

During the year under review, the Company has not provided any loan or guarantee or security to any person nor made any investment.

Particulars of earlier loan given and investment made by the Company in its Wholly Owned Subsidiary (WOS), namely, Patels Airtemp (USA) Inc. are provided in the Standalone Financial Statements of the Company (Please refer Note No. 4, 5 and 40 to the Standalone Financial Statements).

RELATED PARTY TRANSACTIONS (RPTs)

Information on transactions with related parties referred to under sub-section (1) of Section 188 of the Companies Act, 2013 in the prescribed Form AOC-2 is attached herewith viz Annexure - D and forming part of the Directors Report pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014.

Pursuant to the provisions of SEBI Listing Regulations, details of related party transactions entered into by the Company, in terms of Ind AS-24 have been disclosed in Note No. 33 of the Notes to the Standalone Financial Statements for the year ended 31^st March, 2023, forming part of this Report.

However, there are no materially significant related party transactions made/entered into by the Company with its related parties including promoters, directors or the management etc. that may have potential conflict with the interests of the Company at large.

"Policy on Materiality of Related Party Transactions and Dealing with Related Party Transactions" related to entering into Related Party Transactions by the Company with Related Parties is uploaded on the Companys website viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/policy-on-materiality-of-related-party-transaction-and-dealing-with-related-party-transactions.pdf.

SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations, 2021 pertaining to Related Party, Related Party Transactions, Prior Approvals and Disclosures effective from April 01, 2022 and other earlier amendments, except for a few provisions which are effective from April 01, 2023, have introduced substantial changes in the RPT framework. In view of the said amendments, policy on materiality of related party transactions and dealing with related party transactions of the Company (Policy on RPTs) was modified / revised / updated in line of the above amendments which is effective from 12^th November, 2022.

All Related Party Transactions are placed before the Audit Committee for its approval (by Independent Directors only from 1^st January, 2022 as per amendment in SEBI Listing Regulations) as also to the Board for approval including Omnibus approval for the transactions for one financial year, which are repetitive in nature and also for the transactions, which are not foreseen (subject to financial limit). However, the Company has not entered into any contract/ arrangement / transaction with related parties which could be considered material in accordance with the provisions of Section 188 of the Companies Act, 2013 and the Rules made thereunder and SEBI Listing Regulations and as such no approval of the Shareholders require. The Company has duly filed with BSE Ltd. half-yearly statement of Related Party Transactions ended on 31^st March, 2022 and 30^th September, 2022 in accordance with applicable Indian Accounting Standards on a consolidated basis in the format as specified by SEBI from time to time pursuant to Regulation 23(9) of SEBI Listing Regulations and uploaded the said details on website of the Company viz. https://www. patelsairtemp.com/investors/disclosures-of-related-party-transactions/.

SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors and ‘General Meetings, respectively, have been duly followed by the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder and Articles of Association, Mr. Shivang P. Patel (DIN: 08136652), Whole-time Director of the Company, shall retire by rotation as Director of the Company at this Annual General Meeting, and being eligible, offers himself for re-appointment, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends re-appointment of Mr. Shivang P. Patel (DIN: 08136652) as Director of the Company. The brief resume/details relating to the said Director, who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

Mr. Narayanbhai G. Patel (DIN: 00023107) has been re-appointed as Whole-time Director of the Company designated as "Chairman & Whole-time Director" for a further period of 3 years with effect from 20^th May, 2023 to 19^th May, 2026 upon the terms and conditions including Salary of 4,00,000/- per month plus perquisites and allowances ("remuneration") for the said period of 3 years as recommended and approved by Nomination & Remuneration Committee and Board of Directors, subject however to the approval of the Shareholders in this Annual General Meeting by passing Special Resolution, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends reappointment of Mr. Narayanbhai G. Patel as Whole-time Director of the Company. The brief resume/details of Mr. Narayanbhai G. Patel, who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

Mr. Sanjivkumar N. Patel (DIN:02794095) has been re-appointed as Managing Director of the Company for a further period of 3 years with effect from 20^th May, 2023 to 19^th May, 2026 upon the terms and conditions including Salary of 4,00,000/- per month plus perquisites and allowances ("remuneration") for the said period of 3 years as recommended and approved by Nomination & Remuneration Committee and Board of Directors, subject however to the approval of the Shareholders in this Annual General Meeting by passing Special Resolution, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends re-appointment of Mr. Sanjivkumar N. Patel as Managing Director of the Company. The brief resume/details of Mr. Sanjivkumar N. Patel, who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

The second term of Mr. Himanshu N. Rawal (DIN: 06631728) as Independent Director of the Company, shall be completed on the date of this Annual General Meeting and he will cease to be an Independent Director of the Company with effect from the date of this meeting. Consequently. Mr. Himanshu N. Rawal will also cease to be a Member of Audit Committee (AC), Nomination & Remuneration Committee (NRC), Stakeholders Relationship Committee (SRC) and Corporate Social Responsibility (CSR) Committee of the Board w.e.f. the date of this meeting. The Board places on record their appreciation for the assistance and guidance provided by Mr. Himanshu N. Rawal during his tenure as an Independent Director of the Company and also as a Member of AC, NRC, SRC & CSR Committees of the Board.

Since the second term of Mr. Himanshu N. Rawal (DIN: 06631728) as Independent Director of the Company shall be completed on the date of this Meeting as referred to above, the Board of Directors at their meeting held on 12^th August, 2023 appointed Mr. Naimishbhai B. Patel (DIN: 02813295) as Additional Director on the Board of the Company w.e.f. 12^th August, 2023 based on the recommendation of Nomination and Remuneration Committee (NRC) and based on the skills, experience and knowledge. The Company has received notice under Section 160 of the Companies Act, 2013 from a member proposing the appointment of Naimishbhai B. Patel as a Director of the Company. Further, based on the recommendations of NRC, the Board, in accordance with the provisions of Section 149 read with Schedule IV to the Act and Regulation 16 of the SEBI Listing Regulations, appointed Mr. Naimishbhai B. Patel (DIN: 02813295) as Independent Director of the Company, not liable to retire by rotation, for a first term of 5 years from 12^th August, 2023 up to 11^th August, 2028, subject to approval of the Members by passing Special Resolution, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends appointment of Naimishbhai B. Patel as an Independent Director of the Company. The brief resume/profile of Naimishbhai B. Patel, who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

COMMITTEES OF DIRECTORS

The Board of Directors has the following Committees:

1. Audit Committee (AC)

2. Nomination and Remuneration Committee (NRC)

3. Stakeholders Relationship Committee (SRC)

4. Corporate Social Responsibility Committee (CSR)

The details of various Committees of Directors constituted/re-constituted by the Board of Directors as above under various provisions of Companies Act, 2013 and Rules made thereunder and SEBI Listing Regulations, Meetings & Attendance, terms of reference and other details are provided in the Corporate Governance Report annexed with the Directors Report.

The change in composition of various Committees as on the date of this report has been mentioned in the Corporate Governance Report annexed with the Directors Report.

The composition of various Committees and their terms of references may be accessed on the Companys website viz. https://www.patelsairtemp.com/investors/composition-of-committees-of-board-of-directors/.

BOARD EVALUATION

The Board has carried out an evaluation of its own performance and that of its Committees and Directors and also Chairperson in terms of Section 134(3)(p) of the Companies Act, 2013 and Rules made thereunder and SEBI Listing Regulations. The Board has approved a policy (NRC Policy) for criteria of determining qualifications, selection, appointment and remuneration of Directors, KMP and Senior Management and the same has been uploaded on the Companys web-site https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/nomination-and-remuneration-policy.pdf.

In a separate meeting of independent Directors held on 30^th March, 2023, performance of non-independent directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of executive directors and non-executive directors and assessed the quality, quantity and timeliness of flow of information between the company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Policy on appointment and remuneration of Directors, KMP and other employees and other matters as required under Section 178(3) of the Companies Act, 2013 is available on the web-site of the Company viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/nomination-and-remuneration-policy. pdf.

NUMBER OF BOARD MEETINGS

During the financial year 2022-23, 8 (Eight) Board Meetings of the Company were held on 4^th May, 2022, 28^th May, 2022, 13^th August, 2022, 10^th September, 2022, 12^th November, 2022, 16^th November, 2022, 12^th December, 2022 and 11^th February, 2023.

For the Board Meetings held as above, the gap between two Board Meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and Regulation 17 of SEBI Listing Regulations. The Board Meetings were generally held at the Factory (Works) of the Company situated at Rakanpur, Dist. Gandhinagar, Gujarat. The particulars of number of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report. Agenda of the meetings were prepared and all necessary papers were circulated to Members of the Board in advance. Necessary disclosures were made by the Directors in the Board and Committee Meetings whenever required. The Company has complied with Secretarial Standards 1 (SS-1) related to Board and Committee Meetings of the Company.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 134(3)(m) of the Companies Act, 2013 read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, details relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are given in the Annexure – E attached herewith and forming part of the Directors Report.

RISK MANAGEMENT

Business risk evaluation and management, covering the business operations of the Company, is an ongoing process within the Company and the management reviewed frequently risk assessment and to minimize them. The ultimate goal of risk management is the preservation of physical and human assets of the organization for successful continuation of its operations. Pursuant to the provisions of Regulation 21 of SEBI Listing Regulations, at present, the Company is not required to constitute Risk Management Committee of the Directors of the Company.

CORPORATE SOCIAL RESPONSIBILITY

The details regarding Corporate Social Responsibility of the Company are given in the Corporate Governance Report, which forms part of this Report.

The salient features of the Policy forms part of the Annual Report on CSR activities annexed to the Boards Report. The Annual Report on CSR activities and expenditure, as required under Sections 134 and 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and Rule 9 of the Companies (Accounts) Rules, 2014, is annexed herewith marked as Annexure - F. The Company continues its endeavour to improve the lives of people and provide opportunities for their holistic development through its different initiatives in the areas of (i) promotion of health care, including preventive health care, sanitation and disaster management (ii) promoting rural development, (iii) promoting education, Social Development/Services, Environment, etc., contribution to Educational Trust & Skill Development Program, employment enhancing vocation skills among children, woman, elderly and differently abled persons, and Education related activities for bright & poor students, (iv) eradicating hunger, poverty and malnutrition (v) purchase of Oxygen cylinders for COVID-19 patients, (vi) promoting sports related activities such as Rural Sports, National Sports, Paralympics Sports and Olympic Sports.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation were observed. The Companys internal control system is commensurate with its size, scale and complexities of its operations.

STATUTORY AUDITORS & AUDIT REPORT

M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad (Firm Registration No. 107525W) were appointed as Statutory Auditors of your Company at the 30^th Annual General Meeting of the Company held on 27^th September, 2022, for a first term of five consecutive years from the conclusion of the said 30^th Annual General Meeting of the Company till the conclusion of the 35^th Annual General Meeting to be held in the year 2027 in place of retiring Statutory Auditors M/s. Shah & Shah Associates, Chartered Accountants, Ahmedabad (Firm Registration No. 113742W).

In accordance with the Companies Amendment Act, 2017, enforced on 7^th May, 2018 by the Ministry of Corporate Affairs (MCA), the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting. Accordingly, no resolution has been proposed for ratification of appointment of Auditors of the Company.

No fraud has been reported by the Auditors under Section 143(12) of the Companies Act, 2013 requiring disclosure in the Boards Report, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

The Notes on _ financial statement referred to in the Auditors Report are self-explanatory and do not call for any further comments. The Auditors Report does not contain any qualification, reservation, adverse remark or disclaimer.

During the Financial Year 2022-23, the Company has paid total fees of 4,38,000 including statutory audit fees, certification fees, and fees for other services to M/s. Parikh & Majmudar, Chartered Accountants, Ahmedabad, the Statutory Auditors of the Company.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

Section 204 of the Companies Act, 2013 and Rules made thereunder inter alia requires every Listed Company to annex with its Board Report a Secretarial Audit Report given by a Company Secretary in Practice in the prescribed form. The Board appointed Mr. Punit Lath, Practicing Company Secretary, Ahmedabad (COP No. 11139 & Membership No. 26238) as the Secretarial Auditor to conduct Secretarial Audit of the records of the Company for the financial year 2022-23 and to submit his report to the Company. The Secretarial Audit Report for the financial year ended March 31, 2023 is annexed herewith marked as Annexure – G to this Report.

The Secretarial Audit Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark. During the year under review, the Secretarial Auditors had not reported any matter under Section 143(12) of the Act, therefore no detail is required to be disclosed under Section 134(3)(ca) of the Act.

The Board at its meeting held on 11^th February, 2023, has re-appointed Mr. Punit Lath as Secretarial Auditor, for conducting Secretarial Audit of the Company for the financial year 2023-24. The Company has received his written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder.

COMPLIANCE CERTIFICATE

The Company has also received Secretarial Compliance Report for the year ended 31^st March, 2023 from Mr. Punit Lath (COP No. 11139 & Membership No. 26238), Practicing Company Secretary and duly filed with BSE Ltd., in respect of compliance with the provisions of : (a) the Securities and Exchange Board of India Act, 1992 ("SEBI Act") and the Regulations, circulars, guidelines issued thereunder; and (b) the Securities Contracts (Regulation) Act, 1956 ("SCRA"), rules made there under and the Regulations, circulars, guidelines issued there under by the Securities and Exchange Board of India ("SEBI").

COST AUDIT

Pursuant to Section 148(2) of the Companies Act, 2013 read with the Companies (Cost Records and Audit), Amendment Rules 2014, your Company is required to get its cost accounting records audited by a Cost Auditor.

Accordingly, the Board at its meeting held on 27^th May, 2023, has on the recommendation of the Audit Committee, appointed M/s. Rajendra Patel & Associates, Cost Accountant, Ahmedabad (Firm Registration No. FRN101163) to conduct the audit of the cost accounting records of the Company for FY 2023-24 on a remuneration of 70,000/- plus taxes as applicable and reimbursement of actual travel and out of pocket expenses. The remuneration is subject to the ratification of the Members in terms of Section 148 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014 and is accordingly placed for your ratification. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder and confirmed that their appointment is within the limits of the Section 139 of the Companies Act, 2013. They have also certified that they are free from any disqualifications specified under Section 141 of the Companies Act, 2013.

The Cost Audit Report for the Financial Year ended 31^st March, 2022 has been duly filed in XBRL mode. The cost audit report of the Company for financial year ended March 31, 2023 will be filed with Central Government on or before the due date as prescribed under Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014.

INTERNAL AUDIT

Pursuant to the provisions of Regulation 18 read with Part C of Schedule II of SEBI Listing Regulations, the Audit Committee reviews quarterly the Report of internal audit received from Internal Auditor of the Company relating to internal control weakness, if any, as mentioned in the Internal Audit Report.

LISTING FEES

Pursuant to the provisions of SEBI Listing Regulations, the Company declares that the Equity Shares of the Company are listed on the BSE Limited (BSE). The Company confirms that it has paid Annual Listing Fees to BSE up to the Financial Year 2023-24.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The Disclosures relating to remuneration and other details required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, is annexed as Annexure - H and forms an integral part of this Report. The Statement of particulars of top ten employees as required under Section 197(12) of the Act read with the Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 (as amended from time to time), in terms of remuneration drawn and other particulars of the employees as set out in the said Rules forms part of this report. Further, the Annual Report is being sent to the shareholders excluding the aforesaid statement. In terms of Section 136(1) of the Companies Act, 2013, the said statement is open for inspection by the shareholders. Any shareholder, who is interested in obtaining these details, may also write to the Company Secretary to email id at share@patelsairtemp.com.

None of the employees of the Company including Managing Director and Whole-time Directors of the Company are in receipt of remuneration in excess of limit as provided in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended from time to time), as such the statement of particulars of employees is not annexed with this report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has a Vigil mechanism and Whistle blower policy under which the employees are free to report any act of serious misconduct or wrongful activity being occurred or suspected to occur within the organization, to his immediate HOD or the HR Head or directly to the concern Whole-time Directors or Managing Director of the Company, as he may desire. No employee of the Company is denied access to the Audit Committee. The vigil mechanism/whistle blower policy is also available on the web-site of the Company viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/whistel-blower-cum-vigil-mechanism-policy.pdf. During the year under review, the Company has not received any whistle blower complaint.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance towards sexual harassment at the workplace. The Company has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. All employees (permanent, contractual, temporary, trainees) are covered under the said Policy.

All employees (permanent, contractual, temporary, trainees) are covered under this policy. No complaints pertaining to sexual harassment were received during the financial year 2022-23.

Policy on Prevention, Prohibition and Punishment of Sexual Harassment is also available on the web-site of the Company viz. https://www.patelsairtemp.com/pdf/policies-and-code-of-conduct/sexual-harassment-policy.pdf.

GENERAL

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these matters during the year under review: O The Company does not provide any loan or other financial arrangement to its employees or Directors or Key Managerial Personnel for purchase of its own shares and hence, the disclosure under Section 67(3)(c) of the Companies Act, 2013 does not require.

O The disclosure in terms of Rule 4 of Companies (Share Capital and Debenture) Rules, 2014 is not provided, as the Company does not have any equity shares with differential voting rights.

O No fraud has been reported by the Auditors to the Audit Committee or the Board.

O The Company has not issued any shares under any scheme including Employees Stock Options Schemes or Sweat Equity Shares to employees of the Company.

O Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from its subsidiary.

O There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. O There was no instance of onetime settlement with any Bank or Financial Institution.

ACKNOWLEDGEMENT

The Directors place on record the appreciation and gratitude for the co-operation and assistance extended by various departments of the Union Government, State Government, Bankers and Financial Institutions. The Directors also place on record their appreciation of dedicated and sincere services of the employees of the Company at all levels.

The Company will make every effort to meet the aspirations of its Shareholders and wish to sincerely thank them for their whole hearted co-operation and support at all times.

	By order of the Board of Directors
	Sanjivkumar N. Patel	Shivang P. Patel
Date : 12th August, 2023	Managing Director	Whole-time Director
Place : Rakanpur, Dist. Gandhinagar	(DIN: 02794095)	(DIN: 08136652)