Rasi Electrodes Ltd Directors Report

Dear Shareholder,

Your Directors have pleasure in presenting the 30^th Annual Report of your Company together with the Audited Financial Statements for the year ended 31st March 2024.

FINANCIAL RESULTS

The Financial Performance of your Company for the year ended 31^st March 2024 is summarized below :

	Year Ended 31.03.2024	Year Ended 31.03.2023
	Rs.in Lakhs	Rs.in Lakhs
Net sales	8382.74	8752.50
Other Income	104.73	141.72
Total(A)	8487.47	8894.22
Total Expenditure	7974.78	8363.40
Profit before interest & depreciation	512.69	530.82
Interest & financial charges	18.42	45.59
Depreciation & amortization expense	78.44	68.17
Profit before tax	415.83	417.06
Tax expense	95.43	116.46
Net profit / loss for the period	320.39	300.60
Other Comprehensive Income (net of tax)	-3.81	-1.63
Total Comprehensive Income for the period	316.59	298.97
Surplus brought forward	1494.68	1195.71
Balance carried to Balance sheet	1811.26	1494.68

DIVIDEND AND TRANSFER TO RESERVES

Your Board of Directors have not recommended any dividend for the year ended 31^st March 2024 (previous year dividend declared Rs.nil), keeping in view the requirements of the Company for enhanced working capital for the regular business.

Your Directors have not transferred any amount to the any Reserves out of the profits made during the year.

MANAGEMENT DISCUSSION AND ANALYSIS

A. Industry structure and developments

Your Company is a Small Scale industries registered under MSME category. Your Company is having manufacturing plants for the manufacture of Arc Welding Electrodes and Copper Coated Mild Steel (CCMS) Wire used for the purpose of welding by the Engineering and Fabrication industries. Your Company also trades in the entire range of welding products and accessories required by diverse industries in the heavy engineering and capital goods sector. Your Company trades by importing rutile, MIG-MAG Machine, Flux Core Wire and Flux on a regular basis. The demand for Company’s products depends upon the robustness of demand in the engineering and capital goods industries in the Country.

B. Financial Performance In Relation to Operational Performance

During the year ended 31^st March 2024 the overall turnover of the Company was Rs.8382.74 lakhs as against Rs 8752.50 lakhs achieved during the last year resulting marginal decrease in Turnover to the extent of 4.22% compared to 28.00% increase in turnover during the previous year. The production of welding electrodes was 1921.047 MTs as against 2060.256 MTs achieved during the previous year. The production of CCMS Wire during the year ended 31^st March 2024 was 4277.059 MTs as against 4134.343 MTs during the previous year. The production of Wire rod to the extent of 2339.601 MTs was also done during the year (previous year 2371.415 MTs).

During the year ended 31^st March 2024 the profit before tax was Rs 415.83 lakhs (previous year Rs 417.06 lakhs) and after making a provision for tax amounting to Rs 95.43 lakhs (previous year Rs 116.46 lakhs) (including provision for deferred tax), the profit after tax was Rs 320.39 lakhs (previous year Rs 300.60 lakhs). The Profit after tax has decreased by 6.58% during the year ended 31^st March 2024 when compared to 46.86% year on year increase during the previous year. The Financial Statements of the Company has been prepared in accordance with the requirements of Companies (Indian Accounting Standards) Rules, 2015.

During the the Financial year 2023-24, the operations of the Company was stable. The overall turnover of the Company decreased by 4.22%. The decrease in turnover was due to substantial correction in the basic rawmaterial i.e. steel rods due to macro economic factors. The rawmaterial component in the totl cost of production constitutes about 95% and hence, the turnover has the tendency to increase or reduce as per varying in steel prices. The Company was successful in maintaining and protecting its net margin and as a result the commensurate reduction in Profit After Tax amounting to 6.58% is not in tandem with reduction in turnover. Considering these metrics, the performance of the Company should be considered as satisfactory.

The certificate issued by TUV India certifying the QMS during the year and it certified as conforming to Quality Management System (QMS) Standard ISO 9001 for its manufacturing facility at Redhills, Chennai, remains valid. The Research Designs & Standards Organisation (RDSO) has also approved the Company’s products and this approval by RDSO has enabled the Company to supply its products to Indian Railways and ICF during the year. The Company has also obtained BIS Trade Mark for CCMS Wire. All these approvals makes the products of the Company eligible for participation in tenders from the respective manufacturing industries; be it in PSUs or Private sector thus widening the market reach for the Company’s bouquet of products in the welding electrodes segment.

As regards the business relating to Trading in Groceries, Staples and other similar branded products, the Company is yet to scale up the business to commercial significance. The Company has not made any turnover with regard to this business during the year ended 31st March 2024.

C. Segmentwise performance

Your company operates in the single segment i.e., manufacture and marketing of welding electrodes and as such the discussion of segment-wise performance is not applicable.

D. Risks & Concerns

Your Company is using base metals as its main raw materials which is subjected to wild price fluctuations and availability. This imparts uncertainty in margin realization on an uniform basis commensurate to increase in turnover. Besides, the Company has to lift its materials upon payment of full consideration as advance payment which also results in increased working capital requirements.

E. Opportunities and Threats

The demand for the products of your Company during the year 2023-24 remained fairly robust even though prices are showing declining trend which reflects the contraction of demand in the engineering goods manufacturing sector in the economy.

The industrial development scenario in the State of Tamilnadu is quite impressive. The geo-strategic developments that are taking place resulting in shift in production base of a variety of engineering and fabrication products to our regions considered favourable development for the Company and the Company is fully geared to take advantage of the developments.

Your Company is well positioned with adequate competencies in all core skills to ride the emerging threats and opportunities and convert them for the commercial benefit of your Company.

F. Prospects and Outlook

In line with the industry trends, your Company’s production preference has shifted towards producing more of CCMS Wire products and restricting production of Arc Welding Electrodes which is reflected the productions numbers outlined above. Your Company has adequate capacity of CCMS welding wire products to cater to the changed market requirements. The Company has not increased its installed capacity during the year.

Your Company was able to nurture and maintain its brand image and preference amoung industrial users and is constantly striving to aggressively promoting the same for gaining unconventionalmarket share.

G. Internal control systems

Your company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from un-authorised use or disposition.

H. Human resources and industrial relations

Your Company has well qualified and experienced technical, financial and administrative staff to cater to its business requirements. The relations with the employees of the company remained cordial throughout the year.

I. Significant changes in Key Financial Ratios

The Key Financial Ratios applicable to the operations of the Company and changes thereon along with the explanation is furnished Note 23 annexed to the Financial Statements.

Disclosure of Accounting Treatment

The Company has not made any alternative treatment which is in variance with the Indian Accounting Standard. The treatment of various financial items vis-a-vis the prescribed accounting standard is disclosed Note 1, 23-25, 26, annexed to Financial Statements which is self explanatory.

CREDIT RATING

The Company has been rated by ICRA for the outstanding for debt instruments / facilities. The ratings accorded by ICRA valid as on 31^st March 2024 are as follows:

Instrument	Rated Amount (Rs. Crore)	Ratings
Fund Based Limits - Cash Credit	10	[ICRA]BB+;(Stable)
Fund Based and Non-fund Based Limits - Interchageable : Bank Guarantee	(2)	[ICRA]BB+;(Stable)
Working Capital Demand Load	(7)	[ICRA]A4+
Letter of credit	(3)	[ICRA]A4+

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company does not have any subsidiary, joint venture or associate companies.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that :

i. in the preparation of the annual accounts for the year ended March 31,2024, 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;

ii. the Directors have selected such accounting policies and applied them consistently and made judgements 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 March 31, 2024 and of the profit of the Company for the year ended on that date;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the 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 are operating effectively; and

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

CORPORATE GOVERNANCE

Your Company has complied with all the material requirements of Corporate Governance prescribed under Securities & Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015. A report on Corpo-rate Governance as required under regulation 34(3) read along with Schedule V of the said regulation is annexed and it forms part of this report.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Related Party Transactions which was considered material as per the policy adopted by the Company and for which the Company has already obtained the members approval at the previous AGM is disclosed in the Form AOC2 annexed to this report. Other than this, the Company had not entered into any contract, arrangement or transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board was put up on the website of the Company at www.rasielectrodes.com and it is also furnished in the Corporate Governance Report.

Your Directors also draw attention of the members to Note 26.4 to the financial statement which sets out related party disclosures.

RISK MANAGEMENT

Your Company has adequate risk management infrastructure in place capable of addressing risks faced by the company both internal and external. Your Company is not required to constitute a separate Risk Management Committee.

INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, no reportable material weakness have surfaced with regard to those internal controls in place.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board of Directors of the Company is duly constituted as per the requirements of section 149 of the Companies Act, 2013, and SEBI (LODR) Regulations, 2015.

The Independent Directors Mr Hitesh M Dharamshi and Mr Ajay Goyal have been re-appointed by the shareholders for a 2^nd Term of 5 years from 1.4.2019 to 31.3.2024 by passing a special resolution at their 24^th AGM held on 26.09.2018. Upon completion of their 2^nd Term of Office as Independent Directors, they have vacated office on 31^st March 2024. Your Board of Directors commend their immense contribution in enriching the Board deliberations by their knowledge, advice and guidance for the progress of the Company during their long tenure on the Board of the Company.

The shareholders have, at their 25^th AGM held on 26^th September 2019, appointed Mrs.AASHIKA KUMARI, [Din: 08455410], as an Independent Director and she shall be holding such office for an initial period of five years up to 29^th May 2024. The Shareholders have, vide the special resolution passed by Postal Ballot and Electronic Voting on 11^th May 2024, re-appointed Mrs Aashika Kumari as an Independent Director for the 2^nd Term to hold office from 30^th May 2024 to 29^th May 2029.

There were no other changes during the year in the overall composition of the Board of Directors of the Company.

Your Non-Independent Director Mrs PAYAL JAIN, retires by rotation at the ensuing Annual General meeting and being eligible is offering herself for re-appointment.

The Company has in place all the KMPs required to be appointed u/s 203 of the Companies Act, 2013.

Mr B Popatlal Kothari is the Managing Director & Chief Executive Officer of the Company appointed by shareholders for a period of three years from 13^th February 2021 to 12^th February 2024. The Board of Directors have at their meeting held on 13th February 2024, re-appointed Mr B Popatlal Kothari as the Managing Director and Chief Executive Officer, for a further period of three years from 13th February 2024 to 12th February 2027.The re-appointment of Mr B Popatlal Kothari as Managing Director & Chief Executive Officer and the remuneration payable to him was approved by the members vide special resolution passed through Postal Ballot and Electronic Voting on 11th May 2024.

Mr Kashyap Kothari is the Chief Financial Officer and Mrs Jagruti J Jain is the Company Secretary.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

A familiarisation program was conducted on 12^th February 2024 for the Independent Directors wherein the roles, rights, responsibilities of the Independent Directors, the business model of the company and the industry related developments was apprised and presented to them. All the Directors attended the Familiarisation programme. The details of the familiarization program conducted for Independent Directors has also been uploaded at the website of the Company at www.rasielectrodes.com ,

The Company has formulated Policy for selection of Directors and determining Directors independence, Remuneration Policy for Directors, Key Managerial Personnel and other employees which has been put up on the website of the Company at www.rasielectrodes.com.

EMPLOYEES STOCK OPTION SCHEME

The Company has not formulated any Employees Stock Option scheme.

AUDITORS & AUDITORS REPORT

Statutory Audit

The report of the Statutory Auditors M/s POONAM ANKIT & ASSOCIATES., Chartered Accountants, Chennai, is annexed to this report.

The Auditors have issued an un-modified opinion on the Financial Statements audited by them for the financial year ended 31^st March 2024.

Secretarial Audit

The Board has appointed Mr Gopikrishnan Madanagopal, Practicing Company Secretary, to conduct Secretarial Audit (SA) for the financial year 2023-24. The Secretarial Audit Report for the financial year ended March 31,2024 is annexed to this report. The Secretarial Auditor has issued an un-modified opinion in his report for the year ended 31st March 2024.

Cost Audit

The provisions of section 148 of the Companies Act, 2013, is not applicable to the Company since the Company is not carrying on any activities specified under Table A or Table B of the Companies (Cost Record & Audit) Rules, 2014.

Internal Audit

Mr G Mahavirchand Kochar, Independent Practicing Chartered Accountant is the Internal Auditor of the Company as required under section 138 of the Companies Act, 2013. The Internal Auditor reports to the Audit Committee and the periodical reports submitted by him are reviewed by the Audit Committee and the Board. No adverse findings were reported by the Internal Auditor during the year.

DISCLOSURES

Corporate Social Responsibility (CSR)

Your Company is not falling within the financial criteria laid down under section 135(1) of the Companies Act, 2013, and as such is not under obligation constitute Corporate Social Responsibility committee and undertake CSR activities.

Audit committee

The Audit Committee comprises of two Independent Director and one Non-Independent Director and as such the composition requirements prescribed under section 177 of the Companies Act, 2013 and the SEBI (LODR) Regulations is satisfied. All the recommendations made by the Audit Committee during the year have been accepted by the Board.

Vigil Mechanism

The Company has put in place a vigil mechanism in order to facilitate Directors and Employees to report on genuine concerns. The Whistle Blower policy adopted by the Company and the Vigil Mechanism as a part of the said policy has been put up on the website of the Company at www.rasielectrodes.com.

Meetings of Board

During the year SIX meetings of the Board of Directors were held. The dates on which the Board meetings were held and the attendance of the Directors therein is furnished in the Corporate Governance Report.

Particulars of Loans given, Investments made, Guarantees given and securities provided.

The Company has duly complied with the requirements of Companies Act, 2013, with respect to loans given and investments made during the financial year.

The particulars of Loans given, investments made and the purpose for which the loan given is proposed to be utilized by the recipient is furnished in Note:26.5 to the financial statements.

The Company has not given any guarantees and has not provided any security during the year.

Conservation of energy, technology absorption, foreign exchange earnings and outgo.

As required under the Provisions of Sec. 134(3)(m) of the Companies Act 2013, information relating to Conservation of energy, technology absorption, and foreign exchange earnings and outgo is annexed to this report.

Extract of Annual Return

The Annual Return as on 31^st March 2024 in the prescribed E-Form MGT7 is available at the following weblink : http://cmsbox.rasielectrodes.com/pdffiles/DRAFT%20ANNUALRETURN%20AS%20ON%2031ST%20MARCH2024.pdf

Particulars of Employees and related disclosures

In terms of the requirements of Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Directors wish to state that none of the employees are drawing remuneration in excess of the limits set out in the said rules.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed to this report.

Employees Stock Option Scheme

The Company has not formulated any Employees Stock Option scheme.

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has in place Anti Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The Company has not received any complaints under the said Act during the year.

General

Your Directors do not have anything to report or disclose on the following items since there were no transaction relating to them during the year:

i. No deposits were accepted attracting the provisions of section 73 - 76 of the Companies Act, 2013.

ii. The Company has not issued any equity shares during the year with differential rights as to dividend, voting or otherwise.

iii. The Company has not issued any shares (including sweat equity shares) to any of its employees during the year.

iv. The Company does not have any subsidiary, Joint venture or associate companies and as such the Managing Director /

Wholetime Directors receiving any remuneration from such companies does not arise.

v. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company’s operations in future.

vi. There were no material changes and commitments affecting the financial position of the company which have occurred between 31^st March 2024 and the date of this report.

vii. The Board has reviewed the system in place to monitor compliance with all the applicable laws relating to Companies domain of operation and it has not come across any material non-compliance with such laws during the year.

viii. The Company has not made any application and there are no proceedings pending under the Insolvency and Bankruptcy Code, 2016, during the year or as at the end of the year.

ix. The Company has not done any valuation or availed any one time settlement of loans from Banks or Financial Institutions during the year.

ACKNOWLEDGEMENT

Your Directors take this opportunity to thank the various Governmental authorities, the Company’s Bankers M/s. Bank of Baroda (formerly Dena Bank), and Citi Bank.N.A., the customers, and Suppliers. Your Directors also wish to place on record the dedicated Services rendered by the employees of the Company at all levels.

By Order of the Board,

For & on behalf of the Board of Directors

B RANJIT KUMAR KOTHARI

CHAIRMAN DIN: 01560805

CHENNAI

DATED : 30^th MAY 2024