Patels Airtemp (India) Ltd Directors Report.

To,

The Members,

PATELS AIRTEMP (INDIA) LTD. Ahmedabad.

Your Directors have pleasure in presenting herewith the 27th Annual Report together with the Audited Financial Statements for the year ended on 31st March, 2019.

FINANCIAL RESULTS

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Particulars

Year ended on 31-03-2019

Year ended on 31-03-2018

Revenue from Operations

15094.89

15938.44

Other Income

79.27

42.85

Total Income

15174.16

15981.29

Less: Depreciation & Amortisation Expenses

259.85

259.4

Finance Cost

502.68

485.89

Other Expenses

13359.85

13971.07

Total Expenses

14122.38

14716.36

Profit before Tax

1051.78

1264.93

Less :Tax Expenses

320.13

403.78

Net Profit for the year

731.65

861.15

Total Comprehensive Income for the year

728.51

847.56

Balance brought forward from previous year

6065.28

5370.28

Profit available for Appropriation

6796.93

6231.43

Less: Remeasurement benefit of defined

Benefit plans (Net of Tax)

3.14

13.59

Less: Proposed Dividend

126.76

126.76

Less: Tax on Dividend

25.8

25.8

Less: Transfer to General Reserve

Surplus carried forward to Balance Sheet

6641.23

6065.28

Earning Per Share of Rs. 10/- each (Rs.)

14.43

16.98

STATE OF COMPANYS AFFAIRS

The Company has earned total revenue from operations of Rs. 150.95 crores during the year ended on 31st March, 2019 as against Rs. 159.38 crores earned during the previous year ended on 31st March, 2018. The Company has also earned other income of Rs. 79.27 lakhs during the year under review as against Rs. 42.85 lakhs earned during the previous year.

Out of the revenue from operations of Rs. 150.95 crores earned by the Company during the year under review, Rs. 147.28 crores represents sale of products (Domestic & Export), Rs. 1.34 crores represents sale of services (Processing Charges) and Rs. 2.33 crores represents other operating revenues.

The Company has incurred total expenses of Rs. 141.22 crores during the year ended on 31st March, 2019 as compared to Rs. 147.16 crores incurred during the previous year ended on 31st March, 2018. The Company has earned the Profit before Tax of Rs. 10.52 crores during the year ended on 31st March, 2019 as compared to Rs. 12.65 crores earned during the previous year ended on 31st March, 2018.

The Company has earned Net Profit of Rs. 7.32 crores for the year ended on 31st March, 2019 after making Provision for Tax Expenses of Rs. 3.20 crores and other adjustments, as compared to Net Profit of Rs. 8.61 crores earned by the Company during the previous year ended on 31st March, 2018. After adding the Surplus in the Statement of Profit & Loss of Rs. 60.65 crores brought forward from the previous year to the profit of Rs. 7.32 crores earned by the Company during the year under review, the total amount of Rs. 67.97 crores is available for appropriation.

The Audited Financial Statements of the Company and all other documents required to be attached thereto is put on the Companys website.

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 is having confirmed orders of about Rs. 436 Crores on hand as on 1st August, 2019. 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.

CHANGE IN SHARE CAPITAL

There is no change in the Share Capital of the Company during the year under review. During the year under review, the Company has not issued any shares.

DIVIDEND

The Directors have recommended dividend of Rs. 2.50 per share (@ 25 %) on 50,70,240 Equity Shares of Rs. 10/- each of the Company for the Financial Year ended on 31st March, 2019 (2018-2019), as compared to Dividend of Rs. 2.50 per share (@ 25 %) declared for the previous Financial Year ended on 31st March, 2018. This will absorb Rs. 126.76 lakhs. The corporate dividend tax payable by the Company on the said dividend will be Rs. 25.80 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.

TRANSFER TO RESERVE

The Company has not transferred any amount to the General Reserve for the year ended on 31st March, 2019 and the total amount of Rs. 66.41 crores is proposed to be retained as the Surplus in the Statement of Profit and Loss.

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.

EXTRACT OF ANNUAL RETURN

Extract of Annual Return of the Company as required under Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, in the prescribed Form MGT-9, is annexed herewith as Annexure - A, to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

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

The Companys products have ASME (American Society of Mechanical Engineers-USA) “U”/ “U2”/ “S” and “N & NPT” Stamp authorization. The Company is also a member of HTRI (Heat Transfer Research, Inc, U.S.A.) for updating Heat Transfer Technology.

Earlier, ASME accredited N & NPT authorization to the Company, a Global Qualification to manufacture Heat Exchangers & Pressure Vessels for Nuclear Power Plant. The Company is the 3rd Company in India with “N-NPT” authorization to manufacture above equipments which has put the Company in elite League of Critical Nuclear Power Plant Equipments.

Due to “U”/ “U2”/ “S” and “N & NPT” Stamp authorization, it is expected to improve the Quality of the products/equipments of the Company and to achieve higher growth and profitability of the Company in future.

The Company is having ISO 9001-2015 certification from TUV-SUD.

FINANCE

UNDER CONSORTIUM ARRANGEMENT WITH BANK OF BARODA & AXIS BANK

The Company is availing Working Capital facilities aggregating to Rs.112.00 Crores under consortium arrangement with Bank of Baroda and Axis Bank. The Company has made regular repayment of Loan & interest and there is no any overdue payment to the said Banks.

The Company is also availing Bill Discounting facility to the extent of Rs. 7,00,00,000/- from HDFC Bank Ltd.

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, 2019 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 Directors and their relatives, while reviewing working capital facilities to the Company vide its Letter No. NAVRAN/2018/05/92, dated 12th March, 2018, which are exempted deposits under Rule 2(1)(c)(xiii) of Companies (Acceptance of Deposits) Rules, 2014.

Details of deposits accepted and repaid by the Company including interest to the Directors & their Relatives during the financial year 2018-2019 are mentioned in Note No. 30 (Related Party information) of the Notes to the Financial Statements attached with this Annual Report.

TRANSFER OF UNCLAIMED DIVIDEND TO IEPF

In terms of the provisions of Investor Education and Protection Fund Rules, 2001 (IEPF), during the year under review, the Company has transferred the amount of unclaimed/unpaid Dividend of Rs. 2,04,778/-for the financial year 2010-2011 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 and unclaimed amounts lying with the Company as on 29th September, 2018 (date of the previous Annual General Meeting) on the Companys website: http://www.patelsairtemp.com.

TRANSFER OF SHARES TO IEPF DEMAT AUTHORITY ACCOUNT

Adhering to the various requirements set out in the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended, the Company has, during financial year 2018-19, transferred to the IEPF Authority 4,688 shares in respect of which dividend had remained unpaid or unclaimed for seven consecutive years or more. Details of shares transferred to the IEPF Authority are available on the website of the Company. 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.

SUBSIDIARY, ASSOCIATE OR JOINT VENTURE COMPANY

The Company does not have any subsidiary, joint venture or associate companies within the meaning of Section 2(6) and 2(87) of the Companies Act, 2013. As such, a report in the prescribed Form AOC-1 as per first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 and Rules made thereunder is not required to be attached and a Policy for determining material subsidiaries is not required to be framed by the Company.

CONSOLIDATED FINANCIAL STATEMENTS

:none>Since the Company does not have any subsidiary, joint venture or associate companies as mentioned above, Consolidated Financial Statements are not required to be prepared and attached with the financial statement of the Company pursuant to the requirements of Section 129 read with Schedule III of the Companies Act, 2013 and Rules made thereunder and Listing Regulations and applicable Accounting Standards.

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 on 31st March, 2019 is attached herewith as a part of this Annual Report viz Annexure - C. A certificate from Statutory Auditors of the Company regarding compliance of the aforesaid provisions of Corporate Governance is obtained by the Company and annexed to the Corporate Governance Report. The Auditors Certificate for the financial year 2018-2019 does not contain any qualification, reservation or adverse remark in respect of 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 31st March, 2019, 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 31st March, 2019 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 31st March, 2019 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 LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

Particulars of loans given, investments made, guarantees given and securities provided by the Company under Section 186 of the Companies Act, 2013 are not provided, as during the year under review, the Company has not given any loan nor made any investment nor given any guarantee nor provided any security to any person.

RELATED PARTY TRANSACTIONS

Information on transaction with related party 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.

Transaction with related parties pursuant to the provisions of Listing Regulations and erstwhile Listing Agreement are disclosed in Note No. 30 of the Notes to the Financial Statements for the year ended on 31st March, 2019, in the Annual Report as required by the Accounting Standard (AS) 18/Ind AS issued by ICAI.

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.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Companys website viz. www.patelsairtemp.com.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval. However, the Company had 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 Listing Regulations and as such no approval of the Shareholders require.

During the year under review, the Company has amended policy on Materiality of Related Party Transactions and dealing with 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

The Board of Directors express their deep condolences on the sad demise of Mr. Prakash N. Patel (DIN : 00249210) on 15th February, 2019, who was Managing Director of the Company and was also one of the Promoter of the Company. The Board appreciated and noted the valuable services rendered by Mr. Prakash N. Patel during his tenure as a Managing Director of the Company.

The Board of Directors also express their deep condolences on the sad demise of Mr. Ramanbhai R. Patel (DIN : 05224867) on 12th June, 2019, who was an Independent Director of the Company. The Board appreciated and noted the valuable services rendered by Mr. Ramanbhai R. Patel during his tenure as an Independent Director of the Company.

Pursuant to the provisions of the Companies Act, 2013 and Rules made thereunder and Articles of Association, Mr. Sanjiv N. Patel (DIN: 02794095), Managing Director of the Company, shall retire by rotation as a Director of the Company at this Annual General Meeting, and being eligible, offer 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. Sanjiv N. Patel as a Director of the Company. The brief resume/details relating to Mr. Sanjiv N. Patel who is to be re-appointed are furnished in the Notes to the Notice of the Annual General Meeting.

Mr. Hareshkumar I. Shah (DIN : 00216585) and Mr. Vinodkumar C. Desai (DIN : 02813402), who were appointed as Independent Directors of the Company, holds office up to 29th August, 2019 (“first term” in terms of Sections 149(10) of the Companies Act, 2013). The Company has received notices under Section 160 of the Companies Act, 2013 from a shareholder of the Company proposing the reappointment of Mr. Hareshkumar I. Shah and Mr. Vinodkumar C. Desai for the Office of Director of the Company in the category of Independent Directors for a second term of 5 (five) years from 30th August, 2019 up to 29th August, 2024. A brief profile of Mr. Hareshkumar I. Shah and Mr. Vinodkumar C. Desai is given in the notice convening the 27th AGM, for the reference of the Shareholders. The Board taking into account the recommendation of the Nomination and Remuneration Committee and on the basis of performance evaluation of Independent Directors, has recommended the re-appointment of Mr. Hareshkumar I. Shah and Mr. Vinodkumar C. Desai as Independent Directors of the Company, for the aforesaid term.

Mr. Narendra G. Patel (DIN: 00023205) has been re-appointed as Whole-time Director of the Company for a further period of 3 years w.e.f. 2nd August, 2019 with payment of remuneration of Rs. 3,00,000/- per month with perquisites and allowances, subject to the approval of the Shareholders at this Annual General Meeting, for which, necessary resolution has been incorporated in the Notice of the Meeting seeking Members approval for the same.

Pursuant to the provisions of Section 149 and 152 of the Companies Act, 2013 and Rules made thereunder and on the recommendation of the Nomination and Remuneration Committee, the Company proposes to appoint Mr. Shivang P. Patel (DIN: 08136652), who was appointed as Additional Director on the Board of the Company w.e.f. 1st June, 2019 and hold the office up to the date of this Annual General Meeting and being eligible, has offered himself to be appointed as a Director, as Director of the Company (Non-independent Director), liable to retire by rotation. The Company has received requisite notice in writing from a Member proposing his candidature for appointment as a Director of the Company. Mr. Shivang P. Patel has also been appointed as Whole-time Director of the Company for period of 3 years w.e.f. 1st June, 2019 up to 31st May, 2022 with payment of remuneration of Rs. 3,00,000/- per month with perquisites and allowances. Necessary resolutions have been incorporated in the Notice of the Meeting seeking Members approval for the same.

In accordance with the recently notified changes in the Listing Regulations, the Company shall ensure that the appointment of any Non-Executive Director who has attained or will attain the age of 75 years is approved by the Members by way of a Special Resolution. In this regard, Mr. Hareshkumar I. Shah (DIN : 00216585) shall continue the directorship as Non-executive Independent Director who shall attain the age of 75 years during his tenure as an Independent Director of the Company upto 29th August, 2024. The Board of Directors therefore recommends the Special Resolution for approval of the members.

Mr. Rajendrakumar C. Patel (DIN : 06532676) was appointed as Additional Director in the category of Independent Director of the Company with effect from 10th August, 2019 by the Board of Directors at their meeting held on 10th August, 2019. A resolution seeking shareholders approval for his appointment as a Director and also as an Independent Director of the Company forms part of the Notice. In accordance with the recently notified changes in the Listing Regulations, the Company shall ensure that the appointment of any Non-Executive Director who has attained or will attain the age of 75 years is approved by the Members by way of a Special Resolution. In this regard, Mr. Rajendrakumar C. Patel shall continue the directorship as Non-executive Independent Director who shall attain the age of 75 years during his tenure as an Independent Director of the Company upto 9th August, 2024. The Board of Directors therefore recommends the Special Resolution for approval of the members.

COMMITTEES OF DIRECTORS

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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 by the Board of Directors under various provisions of Companies Act, 2013 and Rules made thereunder and Listing Regulations, Meetings & Attendance, terms of reference and other details are provided 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. www.patelsairtemp.com.

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 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 www.patelsairtemp.com.

In a separate meeting of independent Directors, 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. www.patelsairtemp.com.

NUMBER OF BOARD MEETINGS

During the financial year 2018-2019, 5 (Five) Board Meetings were held on 26-4-2018, 26-5-2018, 10-8-2018, 13-11-2018 & 11/2/2019. The gap between two Board Meetings did not exceed 120 days as prescribed in the Companies Act, 2013 and Regulation 17 of the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015. 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 Meeting whenever required. The Company has complied with Secretarial Standards 1 (SS-1) related to Board Meeting 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 the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015, at present, the Company is not required to constitute Risk Management Committee of the Directors of the Company.

CORPORATE SOCIAL RESPONSIBILITY

In terms of provisions of Section 135 of the Companies Act, 2013 and Rules made thereunder, a Committee of the Directors of the Company has been constituted as Corporate Social Responsibility (CSR) Committee. CSR Committee has formulated a policy on the Corporate Social Responsibility measures to be undertaken by the Company as specified in Schedule VII to the Companies Act, 2013. The Corporate Social Responsibility Policy is available on the Companys web-site viz. www.patelsairtemp.com.

The Company has duly spent the required amount during the financial year ended on 31st March, 2019 towards CSR activities. The Annual Report on CSR activities including Responsibility Statement of the CSR Committee in terms of Section 135 of the Companies Act, 2013 and the Rules framed thereunder is annexed herewith marked as Annexure - F.

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. Shah & Shah Associates, Chartered Accountants, Ahmedabad, having Firm Registration No. 113742W were appointed as Statutory Auditors of your Company at the 25th Annual General Meeting held on 19th September, 2017, for a term of five consecutive years. In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, 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 the Statutory Auditors.

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.

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 had appointed Mr. Punit Lath, Practicing Company Secretary, Ahmedabad (Regn. No. 11139) as the Secretarial Auditor to conduct Secretarial Audit of the records of the Company for the financial year 2018-2019 and to submit his report to the Company. The Secretarial Audit Report for the financial year ended March 31, 2019 is annexed herewith marked as Annexure – G to this Report.

The Board at its meeting held on 11th February, 2019, has reappointed Mr. Punit Lath (Regn. No. 11139), as Secretarial Auditor, for conducting Secretarial Audit of the Company for the financial year 2019-2020. The Company has received his written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder.

The Secretarial Audit Report for the financial year 2018-2019 does not contain any qualification, reservation or adverse remark. During the year under review, the Secretarial Auditor 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.

COMPLIANCE CERTIFICATE

The Company has also received Secretarial Compliance Report for the year ended 31st March, 2019 pursuant to SEBI Circular No. CIR/CFD/CMD/1/27/2019, dated 8th February, 2019 from Mr. Punit Lath, (Regn. No. 11139) 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 Contract (Regulations) 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 22nd May, 2019, has on the recommendation of the Audit Committee, appointed M/s. Rajendra Patel & Associates, Cost Accountant, Ahmedabad (Firm Registration No. FRN101163 and Membership No. 29021) to conduct the audit of the cost accounting records of the Company for the financial year 2019-2020 on a remuneration of Rs. 80,000/- 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 31st March, 2018 has been duly filed in XBRL mode. The cost audit report for financial year ended March 31, 2019 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 as amended from time to time.

LISTING REGULATIONS

Pursuant to the provisions of 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 2019-2020.

PARTICULARS OF EMPLOYEES

The Disclosure 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.

A statement showing the names of top 10 employees in terms of remuneration drawn as per Rule 5(2) 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 employees under Section 197(12) read with Rule 5 (2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is not provided with as, during the financial year under review, no employee of the Company including Whole-time Directors and Managing Directors were in receipt of remuneration in excess of the limits set out in the said rules.

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 Directors of the Company, as he may desire. No employee of the Company is denied access to the Audit Committee. The vigil mechanism/whisle blower policy is also available on the web-site of the Company viz. www.patelsairtemp.com.

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 this policy. No complaints pertaining to sexual harassment were received by the Company during the financial year 2018-2019.

GENERAL

During the year under review, there was no change in the nature of business of the Company and there is no material change and/or commitments, affecting the financial position of the Company, during the period from 31st March, 2019 till the date of this report.

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.

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.

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

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.

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By order of the Board of Directors

NARAYANBHAI G. PATEL

Chairman & Whole-time Director

Date : 10th August, 2019

Place : Rakanpur, Dist. Gandhinagar