Bimetal Bearings Ltd Management Discussions

Industry Structure and Development:

The Auto Ancillary segment of the industry has established itself with global level of technology and capabilities. The opportunity to be a global supplier for components has also been possible on account of the enhancement of our capabilities. The demand for products continues to grow not only on the domestic market but also in the global market. The Industry is also today aggregating product assemblies for OEMs. Many sub-assembly manufacturers supply finished units to OEMs. Products like bushing have become more for supply into Tier 1 suppliers than to the OEMs directly. This is both an advantage and disadvantage. The big advantage is that many of the recognized Tier 1 suppliers are engaged in global business which gives the company an opportunity to engage with them. On the negative side there is business risks associated with such opportunities. The emission standards in India have been aligned with global standards and we see an opportunity in these markets which has started to explore the supply base from India. Your company is fully prepared to cater to the demand as per the current global standards whether it be with materials, coatings or processes which are required by the norms existing in the country. This has also provided for Global sourcing offices being set up in India to take advantage of the capabilities amongst the supply base for components from India. This has provided opportunities for your company to be a part of the supply chain exporting parts to plants outside the country. While the quality, delivery and price have to be competitive, the important requirement of Global warranty also needs to be studied in the background of Warranty clauses which are provided by the OEMs.

Opportunities & Threats:

The increase in new generation of vehicles which have to conform to stringent emission norms call for manufacture of bearings with matching characteristics. Your Company is positioned to meet these challenges. The pre-positioning of the availability of materials and coatings has resulted in increased engagement on new platforms in various segments developed by our OEMs in the country. Your Company commenced supplies to OEM customers as per the new emission norms from the last year. Electric motive power in relation to replacement of IC engines has gained traction both in the two wheelers, three wheeler and passenger car segment. The growth achieved continues to be constrained by infrastructure availability for charging points and in remote areas. Inter-city travel in EVs has gained an acceptance with customers. However, the growth in sales of ICE in relation to the EV is significant. The development of new ICE and hybrid platforms also has been positive and hence there is an opportunity to continue investment in the area of our core products albeit cautiously. The Government continues to be supportive of the EV Industry with many schemes to support their requirements. The Government also made significant announcement in the increased use of blends in fuel to reduce dependence on oil imports and prices. Time frames for this have been detailed by the Government in relation to the blends. The current fuel additives have reached a level of 20% of ethanol in petroleum products. Multi-fuel opportunities are also being explored by the OEMs and your Company is positioned with necessary technology to cater to the blended gasoline / multi-fuel options being suggested for use by the Government. Your Company is actively monitoring the developments with vehicle manufacturers. The new powder facility has been in operation for the last two years. The development of customers in the sintering, brazing, filter and printing industries has progressed aggressively and we should see a positive outcome during the next year with most customers having conveyed their positive intent to use our powders.

The company proposes to engage itself in the EV business with manufacture and supply of battery pack power systems. The manufacturing facility is under installation and the company has commenced to discuss with potential customers for supply to them commercially. The company is actively conducting trials for the packs which are assembled in the company along with addition of BMS. Initial orders have been received from customers for Battery packs and BMS.

Segment-wise / Product-wise performance:

The segment-wise products consist of Original Equipment, After Market and Exports. The Company has a strong share of business in the OE Segment and has been upgrading its capabilities to staying technologically relevant in each of the segments. Continuous effort to further enhance the capabilities in this area has been in operation. In the After Market and Export Segments, the Company supplies parts to several applications. The Company constantly endeavours to upgrade technology, reduce costs and provide integrated solutions. The products manufactured consist of Bearings, Bushings, Thrust Washers, Strips and Alloy Powder. The development of lead free high strength materials has further opened the markets with customers who are intent on Indigenous solutions for their requirements.

Outlook:

The increase in the demand for the Companys products used in segments like Heavy Vehicles, Tractors, Powders & Strips are expected to offer good opportunities for the Company coupled with the cost control measures undertaken. A major activity which has been undertaken was to consolidate the operations of all core products into the Hosur plant last year. The economies scale should provide better cost control at one location. The outlook for the year is expected to be better than the previous year. Export markets for powders are also being pursued to enhance the turnover as well improve the reach of products globally.

Risks and concerns:

The Company has constituted a Risk Management Committee and it takes care of the external and internal risks associated with the operations of the Company. The Board of Directors oversees the Risk Management process including risk identification, impact assessment, effective implementation of the mitigation plans and risk reporting.

Internal Financial Control System:

The internal financial controls followed by the Company are considered adequate and operating effectively. The internal audit of the Company is entrusted to M/s.Gopalaiyer & Subramanian, Chartered Accountants.

Financial Performance:

The prudent management of working capital, treasury operations backed by planned capital expenditure have supported better performance in the current year. Human Resources and Industrial Relations:

During the year under review, the industrial relations in the Company were cordial. The average number of employees of the Company was 327 during the year.

SECRETARIAL AUDIT REPORT

(Pursuant to Section 204(1) of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for the Financial Year ended 31st March 2026

The Members, Bimetal Bearings Limited Huzur Gardens, Sembiam, Chennai - 600 011.

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Bimetal Bearings Limited (CIN.L29130TN1961PLC004466) (hereinafter called "the Company"). Secretarial Audit was conducted for the financial year ended on 31st March, 2026 in a manner that provided us a reasonable basis for evaluating the corporate conduct / statutory compliances and expressing our opinion thereon.

On the basis of the above and on our verification of documents, books, papers, minutes, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of the Audit, we hereby report that in our opinion, the Company has, during the period covered under the Audit as aforesaid, complied with the statutory provisions listed hereunder except that the company is yet to transfer those shares which are becoming due to be transferred to the Demat account of the Investor Education and Protection Fund Authority and to file necessary e-forms for the same. The Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

We have examined the books, papers, minutes book, forms and returns filed and other records maintained by the Company for the financial year ended 31st March, 2026 according to the provisions of:

i) The Companies Act, 2013 and the Rules made thereunder.

ii) The Securities Contracts (Regulation) Act, 1956 and the Rules made thereunder.

iii) The Depositories Act, 1996 and the Regulations and Bye-Laws framed there under

The following Regulations and Guidelines prescribed under Securities and Exchange Board of India Act, 1992 :-

a. The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

b. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

c. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

d. The Securities and Exchange Board of India (Registrar to an Issue and Share Transfer Agents) Regulations, 1993.

On the basis of the information and explanation provided, the Company had no transaction during the period under Audit requiring the compliance of applicable provisions of Act / Regulations / Directions as mentioned above in respect of:

a) The Foreign Exchange Management Act, 1999 and the Rules and Regulations made there under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings.

b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009.

c) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

d) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009.

e) The Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998.

f) Considering the nature of business of the Company, we are of the opinion that no specific law, regulations, directions or orders are applicable specifically to the Company.

We have also examined the compliance with applicable clauses of the following:

i) Listing Agreement entered into with Stock Exchanges.

ii) Secretarial Standards under Section 118 of the Companies Act, 2013

During the year under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.

We further report that

The Board of Directors of the Company is duly constituted with the proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The change made to the composition of the Board of Directors was duly carried out during the period covered under the Audit.

Adequate notice and detailed notes on Agenda were given to all Directors at least seven days in advance to schedule the Board Meetings. There exists a system for seeking and obtaining further information and clarifications on the agenda items before the Meeting and for meaningful participation at the Meeting.

Majority decision is carried through and recorded as part of the minutes. No dissenting views were found in the minutes.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations, and guidelines.

We further report that during the period covered under the Audit, one independent director was re-appointed for the second term and except that the Company has not made any specific actions having a major bearing on the companys affairs in pursuance of the above referred laws, rules, regulations, guidelines, referred to above.