aia engineering ltd Directors report

The Members,

AIA Engineering Limited

Ahmedabad

Your Directors take pleasure in submitting the 33^rd Annual Report and the Audited Annual Accounts of the Company for the year ended 31 March, 2023.

1. FINANCIAL HIGHLIGHTS

(Rs. in Lakhs)

Particulars	Standalone		Consolidated
	Year ended 31 March, 2023	Year ended 31 March, 2022	Year ended 31 March, 2023	Year ended 31 March, 2022
Revenue from Operations	3,97,430.88	3,02,949.05	4,83,802.48	3,51,446.75
Other Operating Income	7,045.47	5,207.98	7,074.39	5,207.98
Total Revenue from Operations	4,04,476.35	3,08,157.03	4,90,876.87	3,56,654.73
Other Income	32,273.96	26,968.81	23,453.94	15,629.01
Total Income	4,36,750.31	3,35,125.84	5,14,330.81	3,72,283.74
Profit before Finance Cost, Depreciation & Amortisation and Tax Expenses	1,37,669.05	84,591.86	1,47,518.02	87,723.52
Finance Cost	1,845.36	363.24	2,010.39	385.04
Depreciation & Amortisation	9,115.33	8,983.90	9,304.01	9,211.63
Profit Before Tax	1,26,708.36	75,244.72	1,36,203.62	78,126.85
(i) Provision for Taxation (Current)	29,319.93	16,657.86	30,412.63	16,886.01
(ii) Deferred Tax	505.87	136.33	140.96	(720.96)
Total Tax (i+ii)	29,825.80	16,794.19	30,553.59	16,165.05
Profit After Tax	96,882.56	58,450.53	1,05,650.03	61,961.80
Non-Controlling Interest	-	-	57.14	(6.29)
Net Profit after Non-Controlling Interest	96,882.56	58,450.53	1,05,592.89	61,968.09
Other Comprehensive Income/(Loss)(Net of Tax) (After Minority Interest)	(581.34)	84.66	(3,487.78)	(2,423.57)
Total Comprehensive Income after Non-Controlling Interest	96,301.22	58,535.19	1,02,105.11	59,544.52

Standalone Operating Results:

During the year under review, the Revenue from Operations of the Company is Rs.4,04,476.35 Lakhs as compared to Rs.3,08,157.03 Lakhs in the previous Financial Year. Exports Turnover registered in the same period is Rs.2,75,384.06 Lakhs as against the Export Turnover of Rs.2,35,241.37 Lakhs in the previous Financial Year.

During the year under review, Company has earned a Profit Before Tax (PBT) of Rs.1,26,708.36 Lakhs and Profit After Tax (PAT) of Rs.96,882.56 Lakhs as compared to PBT of Rs.75,244.72 Lakhs and PAT of Rs.58,450.53 Lakhs respectively in the previous Financial Year.

Consolidated Operating Results:

During the year under review, on a Consolidated basis, your Company (together with its Subsidiaries) has earned Revenue from Operations of Rs.4,90,876.87 Lakhs as compared to Rs.3,56,654.73 Lakhs in the previous Financial Year. Correspondingly, the Consolidated Profit After Tax (PAT) registered during the year under review is Rs.1,05,592.89 Lakhs (After Minority Interest) as compared to PAT (After Minority Interest) of Rs.61,968.09 Lakhs in the previous Financial Year.

2. DIVIDEND:

The Board of Directors is pleased to recommend a Dividend of Rs.16/- (800%) per Equity Share of the face value of Rs.2/- each amounting to Rs.15,091.26 Lakhs for the Financial Year 2022-23.

The Dividend, if declared/approved by the Shareholders at the ensuing Annual General Meeting, will be paid to those Shareholders, whose names stand registered in the Register of Members as on 12 September, 2023. In respect of shares held in dematerialised form, it will be paid to the members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners.

3. SHARE CAPITAL:

The paid up Equity Share Capital of the Company as on 31 March, 2023 is Rs.1,886.41 Lakhs. During the year under review, the Company has neither issued shares with differential voting rights nor granted stock option or sweat equity.

4. FINANCE:

Cash and cash equivalents as at 31 March, 2023 were Rs.30,747.67 Lakhs. The Company continues to focus on judicious management of its Working Capital, Receivables, Inventories, while other Working Capital parameters were kept under strict check through continuous monitoring.

Capital Expenditure Outlay:

During the year under review, the Company has incurred Capex of Rs.19,478.41 Lakhs (including work-inprogress).

Deposits:

During the year under review, the Company has neither accepted nor renewed any deposits within the meaning of Section 73 of the Companies Act, 2013.

Particulars of Loans, Guarantees or Investments:

During the year under review, Company has provided secured Inter Corporate Deposit of Rs.125.00 Crores to SAL Steel Limted. The Company has not provided any Guarantee covered under the provisions of Section 186 of the Companies Act, 2013. The details of Investments made by the Company are given in the Notes to the Financial Statements.

Internal Financial Control and Audit:

The Company has in place adequate Internal Financial Controls (IFC) with reference to the Financial Statements. The Statutory Auditors of the Company have audited such controls with reference to the Financial Reporting and their Audit Report is annexed as Annexure B to the Independent Auditors Rs.Report under the Standalone Financial Statements and the Consolidated Financial Statements which forms part of the Integrated Annual Report.

The Board reviews the effectiveness of controls documented as part of IFC Framework and take necessary corrective actions wherever weaknesses are identified as a result of such review. This review covers entity level controls, process level controls, fraud risk controls and information technology environment. Based on this evaluation, no significant events had come to notice during the year that have materially affected or are reasonably likely to materiality affect our IFC. The management has also come to a conclusion that the IFC and other financial reporting was effective during the year and is adequate considering the business operations of the Company.

Related Party Transactions:

All the Related Party Transactions entered during the financial year were on an Arms Length basis and were in the Ordinary Course of Business. There are no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel (KMP) which may have a potential conflict with the interest of the Company at large.

Prior Omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted were placed before the Audit Committee and the Board of Directors for their approval on quarterly basis. The details of Related Party Transactions entered by the Company are disclosed in Form AOC-2 - as per Annexure "A".

The Policy on Related Party Transactions as approved by the Board of Directors is uploaded on the website of the Company viz. https://aiaengineering.com/wp-content/ uploads/2023/06/Policy-Related-Party-Transaction. pdf.

Credit Rating:

CRISIL has reaffirmed both the Long Term and Short Term rating of the Company as CRISIL AA+/Stable and CRISIL A1+ respectively.

Dun & Bradstreet Information India Private Limited (D&B) has evaluated the Company during September, 2022 and reassigned a Dun Bradstreet Rating of 5A I, which indicates that overall status of the Company is "Strong”.

5. HUMAN RESOURCES:

Human capital is the backbone of any organisation, and it is no different for our company. We understand and acknowledge that the success and growth of our organisation depend on the proper utilisation of the skills and capabilities of our human resources. Therefore, we believe in creating an environment that fosters active employee participation and encourages the team to share their ideas and thoughts.

We also recognise that managing and maintaining our human asset is as important as any other asset. That is why we are always looking for the most updated tools and techniques for human resource management. We collaborate with the best agencies and consultants in this field, who help us in getting the best talent as well as in designing our approach towards employee development.

Continuous improvement and skill enhancement have always been integral to our companys philosophy. We consistently encourage our team to pursue professional development opportunities. Whether it is technical training, managerial training, or behavioral training, we organise regular workshops and programmes to provide a well-rounded learning experience. With a view to give this more impetus, we have created a dedicated training and development cell which continuously organises various types of training across the organisation at all levels. Our focus on continuous learning has enabled us to achieve significant skill enhancements in our team members over a period of time.

Health and safety of our employees has always been of paramount importance. Mental health is as important as physical health, and hence, for the overall well-being of our team members, we regularly organise yoga and meditation sessions conducted by experts in the field. We also believe in managing the employee lifecycle in a very scientific manner. Right from the on- boarding process to induction to training, further skill development, offering career roadmaps and succession planning - all of this is very meticulously designed and structured. Our appraisal system is also entirely based on the assessment of performance and potential of the individual and hence is highly objective and result oriented.

We continuously seek to improve our HR practices and work with the best global consultants and agencies for talent acquisition, creating organisation structure, and for other HR activities. While maintaining the basic fabric and deep-rooted philosophy of the organisation, we have continuously embraced new innovative ways to bring in more efficiency and effectiveness in the system. We have a great blend of youth and experience in our talent pool which is well equipped to facilitate and accelerate our growth trajectory.

6. MATERIAL CHANGES, TRANSACTIONS AND COMMITMENTS:

There are no material changes and commitments, affecting the financial position of the Company which have occurred between the close of Financial Year on March 31, 2023 to which the Financial Statements relates and the date of this Report.

7. BUSINESS PROSPECTS:

Companys prospects are linked to activity in basic industries of Mining, Cement and Thermal Power generation.

Companys focus is to provide comprehensive solutions which are aimed at not only reducing the cost of consumable wear parts which are used in the process of grinding and crushing in the above industries through reduced wear rates but also to focus on reducing the overall cost of ownership in the hands of the customer by increasing the grinding efficiency, increasing the throughputs and reducing other operating expenses by customising tailor made solutions to suit the requirement of a given customer.

In Cement Industry, since the entire Cement Industry has largely converted into High Chrome Mill Internals use, Companys growth is linked mainly to the overall growth of the Industry and also to gaining higher market share. Further, the cost of consumable wear parts in Cement Industry is in the region of around 1% to 2% of the total cement production cost and the size of the industry is also relatively smaller at around 3 Lakhs MT (around 1.80 Lakhs MT ex-China). Ex-China (where the grinding media requirements are largely serviced by local Chinese players who are operating on different business dynamics) the Company today enjoys around 35% market share having presence in more than 125 countries. In India, Company continues to enjoy a dominant market share of over 95% consistently since it became an independent entity. Company continues to enjoy a dominant position in this industry and is confident of maintaining this position going forward.

Major growth driver for Company continues to be the huge conversion opportunity available in the Mining Industry space. As elaborated under the Industry Section of Management Discussion and Analysis, the addressable market opportunity is around 2 - 2.5 million tons for the three ores on which the Company is focused upon viz. Gold, Copper and Iron Ore. The level of penetration of High Chrome Grinding Media is limited in the range of 20%-25%, which offers a significant opportunity for growth through conversion of the Mines from Forged Grinding Media to High Chrome Grinding Media.

Further, in addition to Grinding Media as the main product supplied to the Mining Industry, Company is also very bullish on the prospects for growth in the Mill Liner Segment where the Company is manufacturing and supplying Metal Liners based on unique patented Mill Liner design licensed by the Company, which helps the Company in offering multiple advantages including improved throughputs and reduced power costs.

Company is addressing the mining opportunity of conversion through a combination of solutions based on the requirement of a mining customer. This includes cost savings through lower wear rates and lower consumptions owing to the High Chrome advantage; Down process related benefits in the form of reduction in the cost of other expensive reagents/improvement of recoveries by use of High Chrome Grinding Media; and lastly unique Mill Lining solutions having the effect of increasing the throughput and reduction in the power cost. Company is also offering unique Mill Liners to the mining market and widening its wallet share and value addition with customers. Companys dedicated greenfield Mining Liner plant has been commissioned in Quarter 2 of F.Y. 2022-23 is helping the Company in taking incremental market share in this segment, as well as offer higher cross selling opportunities for Grinding Media.

While the Company was fully geared to address the huge opportunity available for growth in Mining Segment, the progress was stifled during F.Y. 2020-21 and also for a large part of the F.Y. 2021-22 predominantly owing to the fact that our sales and business development teams could not travel due to Covid related restrictions and further there were also multiple headwinds in the form of highly volatile and continuously increasing shipping rates and supply chain challenges. However, in spite of all these challenges the Company was in a position to maintain its supplies to all its key customers and also show a respectable growth in F.Y. 2021-22 considering the fact that there was in fact a volume de-growth in

F.Y. 2021-22 due to loss of sales in Canada and South Africa due to anti-dumping/trade barriers imposed in these geographies, which were compensated by new business conversions.

However, in F.Y. 2022-23 with normalcy having returned in major relevant markets, Company has once again resumed the process of new customer acquisitions, resulting into an increase in the sales volumes in F.Y. 2022-23. Further, the Company is quite confident to deliver an incremental volume growth of at least 25,000 tons to 30,000 tons year over year, which would be largely coming from the Mining Segment.

Going forward, Company continues to build on its competencies to offer material value addition to its customers in form of increase in throughput, increase in yield of Gold and Copper Ores and reduction in operating costs in terms of wear costs, power costs and reagent consumption. This value addition is offered by continuous and direct engagement with operations personnel at plants in different countries and ensuring that a custom designed solution is offered to meet their specific objectives and engage with them on a continuous improvement journey to measure and ensure the benefits accrue over the lifetime of our solution.

A continued volatility in the prices of major raw materials viz. Scrap and Ferro Chromium is now becoming a rule rather than exception. Thus, in F.Y. 2022-23 at least for first half the Ferro Chromium prices continued to rise whereas in the third quarter there was a dip while again in the fourth quarter the prices started rising. However, the Company has demonstrated its ability of passing over this increase cost of raw materials consistently year over year over a lag of anywhere between 3 and 6 months. Again in the past we have also demonstrated our ability to pass over the increase in the freight rates. This also demonstrates the resilience of our business model.

The Company is extremely confident of the long term prospects of sustained growth through new customer acquisitions in the Mining Segment. Further, while the Company continues to face competition from one dominant global player in High Chrome Segment and also a few more players in the Mill Lining Segment, it believes that it has certain distinct competitive advantages given its unique product offerings coupled with highly efficient plants in India, duly supported by a strong global sales force and support infrastructure in the form of Companys global offices and warehouse infrastructure and continued developmental efforts aimed at making its solutions very potent - all these factors are giving the Company the confidence that it should emerge as a dominant supplier of Mill Internals in the Mining space as well.

Company continues to maintain its position of dominance as a supplier of large castings to the Thermal Power Plant Industry in India. Although this is relatively a smaller business, it is still an important business for it and the Company is also confident of maintaining a dominant position in this industry which is largely confined to the domestic market only.

8. FUTURE EXPANSION:

The Companys current capacity stands at 4,40,000 MT Per Annum, after considering the implementation of the recently commissioned Greenfield facility at Kerala GIDC near Ahmedabad to manufacture 50,000 MT of Mill Linings.

The Company is also in the process of implementing the second phase of Grinding Media Greenfield expansion project with a capacity of 80,000 MT at Kerala GIDC near Ahmedabad and expected to come in production by December 2024, at an estimated Capex of Rs.250 Crores.

The Company has a plant cluster in Odhav in Ahmedabad primarily for production of parts other than grinding media. For this cluster, Company has now undertaken a one-time upgradation project which will include some capacity de-bottlenecking and restructuring, creation of warehouse space, pattern storage facilities and related infrastructure investment at an estimated cost of Rs.200 Crores. While the project will continue in phases over next 2 years but will see capacity addition of 20,000 MT of castings by December 2024.

The Company further plans to invest in Renewable Energy Projects (including Solar and Wind) by investing Rs.60.00 Crores in the F.Y. 2023-24.

The Company plans to fund all the above Capex from its internal cash accruals.

9. SUBSIDIARY COMPANIES/ASSOCIATE COMPANY:

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a Statement containing salient features of Financial Statement of Subsidiary Companies in Form AOC 1 is given as Annexure "B”.

The Company will make available the Annual Accounts of the Subsidiary Companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The Annual Accounts of the Subsidiary Companies will also be kept open for inspection at the Registered Office of the Company. The Consolidated Financial Statements presented by the Company include financial results of its Subsidiary Companies.

The separate Audited Financial statements in respect of each of the Subsidiary Companies are also available on the website of your Company at https://aiaengineering. com/investor/.

During the year under review, Company has acquired 26% of Paid-up Equity Share Capital i.e. 24,478 Equity Shares of Rs.10 each of Clean Max Meridius Private Limited under Captive Power Purchase Policy and because of that the later became an Associate Company of the Company with effect from 21 December, 2022.

10. INSURANCE:

The Company has taken adequate insurance coverage of all its Assets and Inventories against various types of risks viz. fire, floods, earthquake, cyclone, etc.

11. INDUSTRIAL RELATIONS (IR):

The Company continues to maintain harmonious industrial relations. Company periodically reviews its HR policies and procedures to aid and improve the living standards of its employees, and to keep them motivated and involved with the larger interests of the organisation. The Company has systems and procedures in place to hear and resolve employees Rs.grievances in a timely manner, and provides avenues to its employees for their all-round development on professional and personal levels. All these measures aid employee satisfaction and involvement, resulting in good Industrial Relations.

12. CORPORATE GOVERNANCE:

In line with the Companys commitment to good Corporate Governance Practices, your Company has complied with all the mandatory provisions of Corporate Governance as prescribed in Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("SEBI LODR Regulations”).

A separate Report on Corporate Governance and Practicing Company Secretarys Report thereon is included as a part of the Annual Report.

13. MANAGEMENT DISCUSSION AND ANALYSIS (MDA):

MDA covering details of Operations, International Markets, Research and Development, Opportunities and Threats etc. for the year under review is given as a separate Statement, which forms part of this Annual Report.

14. RISK MANAGEMENT:

In compliance with the provisions of Regulation 21 of SEBI LODR Regulations, the Board of Directors has constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards Report.

The Company has a robust Risk Management framework to identify, evaluate business risks and opportunities. Corporate Risk Evaluation and Management is an ongoing process within the Organisation. The Company has a well-defined Risk Management framework to identify, monitor and minimising/mitigating risks.

The Risk Management framework has been developed and approved by the senior management in accordance with the business strategy.

The key elements of the framework include:

• Risk Structure;

• Risk Portfolio;

• Risk Measuring & Monitoring and

• Risk Optimising.

The implementation of the framework is supported through criteria for Risk assessment, Risk forms & MIS.

15. POLICES:

(a) Vigil Mechanism / Whistle Blower Policy:

The Company has adopted a Vigil Mechanism/ Whistle Blower Policy through which the Company encourages employees to bring to the attention of Senior Management including Audit and Risk Management Committee, any unethical behavior and improper practice and wrongful conduct taking place in the Company. The brief details of such vigil mechanism forms part of the Corporate Governance Report.

(b) Policy on protection of Women against Sexual Harassment at Workplace:

In line with the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, the Company has adopted a policy for the same. The brief details of the said policy form part of the Corporate Governance Report of this Annual Report. The Company has not received any complaint during the F.Y. 2022-23 in this regard.

(c) Code of Conduct to Regulate, Monitor and Report Trading by Insiders:

In Compliance with the SEBI (Prohibition of Insider Trading) Regulations 2015, the Company has revised Model Code of Conduct of Insider Trading Regulations from time to time. The Company adopted the Code of Conduct to regulate, monitor and report trading by Designated Person(s) in order to protect the Investors Interest. The details of the said Code of Conduct forms part of the Corporate Governance Report.

(d) Policy for Business Responsibility and Sustainability Report:

In pursuance of Regulation 34 of SEBI LODR Regulations, top 1000 companies based on market capitalisation (calculated as on March 31 of every financial year) are required to prepare and enclose with its Annual Report, a Business Responsibility and Sustainability Report describing the initiatives taken by them from an environmental, social and governance perspectives. A separate report on Business Responsibility and Sustainability Report is annexed herewith as Annexure "C”.

(e) Dividend Distribution Policy:

The Board of Directors had approved the Dividend Distribution Policy in line with SEBI LODR Regulations. The Policy is hosted on website of the Company at https://aiaengineering.com/wp- content/uploads/2023/06/Dividend-Distribution- Policy.pdf.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

(a) Board of Directors and KMP :

The Board of Directors of the Company is led by the Independent - Non Executive Chairman and comprises eight other Directors as on 31 March, 2023, including one Managing Director, one

Whole-Time Director, four Independent Directors (including one Woman Independent Director) and two Non-Executive Directors (other than Independent Directors).

All the Independent Directors of the Company have furnished declarations that they meet the criteria of Independence as prescribed under the Companies Act, 2013 and SEBI LODR Regulations.

Considering the integrity, expertise and experience (including the proficiency), the Board of Directors recommends the reappointment of Mr. Yashwant M. Patel (DIN: 02103312), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offered himself for reappointment.

As required under SEBI LODR Regulations amended from time to time, the information on the particulars of the Director proposed for reappointment has been given in the Notice of the Annual General Meeting.

(b) Meetings:

During the year under review, Four Board Meetings and Five Audit Committee Meetings were convened and held. The detail of composition of

Audit Committee is as under-

Mr. Sanjay S. Majmudar, Chairman

Mr. Rajendra S. Shah, Member

Mr. Bhadresh K. Shah, Member

Mr. Rajan R. Harivallabhdas, Member

All recommendations made by the Audit

Committee during the year were accepted by the

Board.

The details of Composition of all the Committees and dates of the meetings are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and SEBI LODR Regulations.

(c) Committees of the Board of Directors:

In compliance with the requirement of applicable laws and as part of the best governance practice, the Company has following Committees of the Board as on 31 March, 2023.

(i) Audit Committee

(ii) Stakeholders Relationship Committee

(iii) Nomination and Remuneration Committee

(iv) Corporate Social Responsibility Committee

(v) Risk Management Committee

The details with respect to the aforesaid Committees are given in the Corporate Governance Report.

(d) Board Evaluation:

Pursuant to the provisions of the Companies Act,

Boards Report

2013 and SEBI LODR Regulations, the Board has carried out an Annual Performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

(e) Familiarisation Programme for Independent Directors:

The Independent Directors have been updated with their roles, rights and responsibilities in the Company by specifying them in their Appointment Letter alongwith necessary documents, reports and internal policies to enable them to familiarise with the Companys procedures and practices. The Company has through presentations at regular intervals, familiarised and updated the Independent Directors with the strategy, operations and functions of the Company and Engineering Industry as a whole. The details of such familiarisation programmes for Independent Directors is posted on the website of the Company and can be accessed at https://aiaengineering. com/wp-content/uploads/2023/05/Independent- Director-Familiarization-Program-2022-23.pdf .

(f) Nomination and Remuneration Policy:

The Board has on the recommendation of the Nomination & Remuneration Committee framed a Policy for selection and appointment of Directors, Senior Management Personnel and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report which is a Part of the Boards Report. The detailed Policy is placed on the website of the Company at https://aiaengineering.com/wp-content/

uploads/2023/06/Nomination-Remuneration- Policy.pdf.

(g) Directors Rs.Responsibility Statement:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Clause (c) of Sub-Section (3) of Section 134 of the Companies Act, 2013, which states that—

i. in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii. 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 at the end of the financial year and

of the profit of the Company for that period;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the Annual Accounts on a going concern basis;

v. the Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

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

17. AUDITORS:

Statutory Auditors:

BSR & Co. LLP Chartered Accountants (Firm Registration 101248W/W-100022) were re-appointed as Statutory Auditors of the Company for a period of five years from the conclusion of 32^nd Annual General Meeting till the conclusion of 37^th Annual General Meeting.

In accordance with the Companies Amendment Act, 2017, enforced on 07 May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The Report given by the Auditors on the Financial Statements of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Internal Auditors:

The Board of Directors at the recommendations of the Audit Committee appointed Talati & Talati LLP Chartered Accountants as Internal Auditors of the Company and ADCS & Associates, Chartered Accountants as Internal Auditors for its Nagpur Unit for the Financial Year 2023-24.

Cost Auditors:

The Cost Auditors has filed with Ministry of Corporate Affairs the Cost Audit Report for the Financial Year ended 31 March, 2022 on 24 August, 2022.

The Board of Directors on the recommendation of the Audit Committee has re-appointed Kiran J. Mehta & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to conduct the audit of the cost accounting records of the Company for the Financial Year 202324. As required under the Companies Act, 2013, the

remuneration payable to the Cost Auditors is required to be placed before the members of the Company for their ratification at the ensuing Annual General Meeting. Accordingly, a resolution seeking members ratification to the remuneration payable to Kiran J. Mehta & Co., Cost Accountants, Ahmedabad is included in the Notice convening the 33^rd Annual General Meeting.

Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed, Mr. Tushar M. Vora, Practicing Company Secretary (FCS-3459, C.P No. 1745), Ahmedabad to conduct a Secretarial Audit of the Companys Secretarial and related records for the year ended 31 March, 2023.

The Report on the Secretarial Audit for the year ended 31 March, 2023 is annexed herewith as Annexure "D” to this Boards Report. There were no qualification/ observations in the report.

18. PARTICULARS OF ENERGY CONSERVATION,

TECHNOLOGY ABSORPTION AND FOREIGN

EXCHANGE EARNINGS AND OUTGO:

The additional information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, stipulated under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith to this report.

19. CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company prepared in accordance with relevant Indian Accounting Standards (Ind AS) viz. Ind AS-27, Ind AS-28 and Ind AS-110 issued by the Ministry of Corporate Affairs, form part of this Annual Report.

20. ANNUAL RETURN:

In accordance with the provisions of Section 92(3) of the Act, Annual Return of the Company as on 31 March, 2023 is hosted on website of the Company at https://aiaenaineerina.com/wp-content/uploads/2023/08/ Annual-Return.pdf.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR):

As per the provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, the amount required to be spent on CSR activities during the year

under review, is Rs.1,289.32 Lakhs and the Company has spent Rs.1,289.32 Lakhs during the Financial Year ended 31 March, 2023. The requisite details of CSR activities carried by the Company pursuant to Section 135 of the Companies Act, 2013 is annexed as Annexure "E".

The composition and other details of the CSR Committee is included in the Corporate Governance Report which form part of the Boards Report.

22. PARTICULAURS OF EMPLOYEES:

The information required pursuant to Section 197 of Companies Act, 2013 read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as Annexure "F". The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is not applicable as there was no employee falling under the criteria specified in aforesaid Rule 5(2) and 5(3).

23. ENVIRONMENT, HEALTH AND SAFETY:

Sustainability vision of Company is to create long-term value for all its stakeholders. Company has an ambition to create a zero-harm culture. It protects the safety and health of its workforce. Companys approach to Environment, Health and Safety is set out in standard policy guidelines, operating procedures and systems which are regularly reviewed and assured.

Wherever feasible, the Company is committed to conserve resources and to take advantage of opportunities for recycling. The holistic approach of the Company is applied to all environmental management including climate, renewable energy, water, waste management and biodiversity. Internally, the Company uses use the best available technology for occupational safety and environmental protection when making new investment in manufacturing facilities. Company contributes to the social and economic development of communities. Company recognizes its responsibility to respect human rights.

Manufacturing division of the Company have instituted internationally accepted Quality Management Systems based on ISO 9001: 2015. Grinding Media Foundries located at Moraiya and Kerala GIDC, Ahmedabad are certified with ISO 14001: 2015 Environmental Management System and ISO 45001: 2018 Occupational Health and Safety (OH&S) management system.

Vision of your Company is to create shared value for all stakeholders. Priority of the Company is to maintain its commitment to operational excellence, social responsibility and environmental stewardship.

24. SECRETARIAL STANDARDS:

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

25. ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the Companys customers, vendors, bankers, auditors, investors and Government bodies during the year under review. Your Directors place on record their appreciation of the contributions made by employees at all levels. Your Companys consistent growth was made possible by their hard work, solidarity, co-operation and support.

Place: Ahmedabad Date: 25 May, 2023

For and on behalf of the Board,

RAJENDRA S. SHAH

Chairman (DIN: 00061922)