Royal Arc Electrodes Ltd Directors Report

To,

The Members,

ROYAL ARC ELECTRODES LIMITED

72 B, Bombay Talkies Compound,

S.V. Road Malad West Mumbai City Maharashtra - 400064

Your Directors have pleasure in presenting the Annual Report, together with the audited financial statements for the financial year ended on 31^st March, 2023.

1) FINANCIAL RESULTS:

The following are the financial results of the Company for the year ended on 31^st March, 2022.

Amount in Thousands

Particulars	Year ended on 31st March, 2023	Year ended on 31st March, 2022
Sales & Other Income	9,80,347.41	6,48,222.19
Less: Expenses	-8,23,505.73	-5,91,847.15
Profit (Loss) Before Depreciation& Finance	1,56,841.68	56,375.04
Costs
Less: Finance Costs	-6083.57	-9,753.04
Profit / (Loss) Before Depreciation & Tax	1,50,758.11	46,622
Less: Depreciation	-18520.69	-17,839.68
Add: Prior Period Items
Profit / (Loss) before Tax	1,32,237.42	28,782.32
Less: Income Tax	36,966.31	8,509.47
Deferred Tax	1,686.48	939.31
Short Provision of IT of Earlier Year
Profit / Loss for the period	96,957.59	21,212.16

2) PERFORMANCE OVERVIEW:

The Company is carrying its activities in manufacturing of Welding Electrodes, C02 wire, Tig wire, Flux core wire and Grinding Wheels. The total sales and other income of the Company were Rs. 9,80,347.41/- Thousands during the period under review as compared to Rs. 6,48,222.19/- Thousands of the previous financial year 2021-22.The net profit of the Company for the year increased to Rs. 96,957.59/- Thousands as compared to that of Rs. 21,212.16/- Thousands during the previous financial year. Your Company is committed to steady and sustainable growth of the Company and in spite of changes in tax structures and certain migrations due to change in policies by the current government your Company has strived to maintain the growth momentum.

3) DIVIDEND:

Your directors have not recommended any dividend during the year with a view to conserve the resources of the Company for various expansion plans.

4) DEPOSITS:

During the year under report, your Company has not accepted any fixed deposits from the public which attract the provisions of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules,2014.

5) TRANSFER TO RESERVE:

No amount is proposed to be transferred to General Reserve Account of the Company.

6) DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to section 134(3)(c) of the Companies Act, 2013, the Directors confirms that:

a. In the preparation of the annual accounts for the year end at that date, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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 at the end of the financial year and of the profit and loss of the company for that period;

c. 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;

d. the Directors have prepared the annual accounts on a going concern basis; and

e. 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.

7) CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNING/OUTGO:

(A) Conservation of energy

(i) the steps taken or impact on conservation of energy	The Company continues efforts with regard to energy conservation and management through improved manufacturing technologies and rationalization.
(ii) the steps taken by the company for utilizing alternate sources of energy
(iii) the capital investment on energy conservation equipments
(B) Technology absorption
(i) the efforts made towards technology absorption
(ii) the benefits derived like product improvement, cost reduction, product development or import substitution
(iii) in case of imported technology (imported during the last three years reckoned from the beginning of the financial year)	The Company has not imported any technology during the year.
(a) the details of technology imported;
(b) the year of import;
(c) whether the technology been fully absorbed;
(d) if not fully absorbed, areas where absorption has not taken place, and the reasons thereof; and
(iv) the expenditure incurred on Research and Development
(C) Foreign exchange earnings and Outgo
The Foreign Exchange earned in terms of actual inflows during the year and	1. Total Foreign Exchange Earnings (Value of Exports) Rs. 1,71,236.44 /- Thousands
The Foreign Exchange outgo during the year in terms of actual outflows	2. Total Foreign Exchange outgo (Value of Import) Rs. 28,750.62/- Thousands

8) INFORMATION OF EMPLOYEES:

No Employee was drawing salary in excess of limit prescribed under Section 134 read with Rule 5(2) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, during the year or part of the year under review.

9) NUMBER OF MEETINGS OF BOARD:

During the Financial Year under review, the Board of Directors duly met Eleven (11) times on 13th April, 2022, 12th May, 2022, 21st July, 2022, 3rd August, 2022, 3rd September, 2022, 5th November, 2022, 21st November, 2022, 9th January, 2023, 20th January, 2023, 23rd January, 2023 and 13th March, 2023 to transact various agendas from time to time.

The Board of Directors confirms the compliance of the requirements of the Secretarial Standard issued by Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs. Intimation of the Board Meeting and committee meeting are given well in advance and communicated to all the Directors. The notices of all the Board

Meetings were sent in advance to all the Directors. The Prescribed quorum was present for all the Meetings.

10) SIGNIFICANT MATERIAL ORDER PASSED BY THE REGULATIONS:

There were no significant material orders passed by the regulators or courts or Tribunals impacting the going concern status of the Company and its operations in future.

11) BOARD OF DIRECTORS AND KEY MAGERIAL PERSONNEL:

Mr. Bipin Sanghvi (DIN: 00462839) was appointed as Managing Director of the Company for a period of 3 (Three) years commencing from 1^st April, 2021 to 31^st March, 2024, at a maximum remuneration of up to Rs. 7,00,000/- per month. Mr. Swagat Sanghvi was appointed as Whole Time Director of the Company for a period of 3 (Three) years commencing from 1^st April, 2021 to 31^st March, 2024, at a maximum remuneration of up to Rs. 7,00,000/- per month. Mr. Hardik Sanghvi (DIN: 00617415) as Whole Time Director of the Company for a period of 3 (Three) years commencing from 1^st April, 2021 to 31^st March, 2024, at a maximum remuneration of up to Rs. 7,00,000/- per month. Further, during the year under review, the said limit of remuneration for all the 3 directors was increased from Rs. 7,00,000/- per month to Rs, 12,50,000/- per month or lump sum amount in any case shall not exceed Rs. 1,50,00,000/- during any financial year i.e. from 2022-23 till the date of end of their term i.e. on 31st March, 2024 and resolution effecting the same was passed in the Extra Ordinary General Meeting of the Company held on 15th February, 2023.

The office of Mr. Swagat Sanghvi (DIN: 01695341) shall be liable to retire by rotation at the ensuing Annual General Meeting, and being eligible offers himself for reappointment. The Board of Directors recommends their reappointment at the ensuing Annual General Meeting.

The Company is not required to appoint Company Secretary, Chief Financial Officer or Chief Executive Officer as per the requirement of the provisions of Section 203 of the Companies Act, 2013.

12) EXTRACT OF ANNUAL RETURN:

Pursuant to Companies (Amendment) Act, 2017 the Companies are not required to attach Extract of Annual Return in Form MGT-9, however, if the Company is maintaining any website then in such case the Company is required to place copy of Annual Return on the website of the Company and web link of the same shall required to be given in Directors Report pursuant to provisions of Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014. In our case the Company is not having any official web site and hence requirement of placing Annual Return on the web site of the Company is not applicable.

13) MATERIAL CHANGES AND COMMITMENTS:

During the year there were no material changes and commitments affecting the financial position of the Company which have occurred between the end of financial year of the Company to which the financial statements relate and the date of the Board of Directors report.

14) AUDITORS AND AUDITORS REPORT:

M/s. BAGADIYA & JAIN., Chartered Accountant, Ahmedabad, {Firm Registration No.: 128719W),were appointed as statutory auditors of the Company in the Annual General Meeting of the Company held on 31st December 2020 to hold the office as a statutory auditors for a period of five (5) years from the conclusion of that i.e. 24th Annual General Meeting till the conclusion of 29th Annual General Meeting of the Company to be held in 2025 at remuneration as may be decided by the board in consultation with statutory auditors, subject to ratification by the members at the every subsequent Annual General Meeting. However, pursuant to the Ministry of Corporate Affairs (MCA) notification, no ratification of appointment of statutory auditors at every Annual General Meeting is required. Accordingly, the Company is not required to pass any resolution pertaining of the appointment of Statutory Auditors in any further Annual General Meeting.

15) AUDITORS QUALIFICATON:

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The explanation to the Audit Qualification in emphasis of matter is below:

cl Emphasis of Matter: During the period under revieiv, the company has granted loans to Directors in contravention of the provisions of Section 185 of the Act, and the maximum amount outstanding thereof is Rs. 4,74,63,102/-. At the year end the loans were repaid.

Reply to Auditors Observation:

The management feels that it is essential to justify the nature of transaction. The two groups viz., Sanghavi Family and Shetty Familv who were promoters have entered into Memorandum of Understanding (MOU) where in Shetty Family has agreed and voluntary with the consent of all other co-promoters and relatives of Shetty Family decided to quit the Company and all the business affairs. As a part of such MOU clauses, one of the clauses has a provision to clear the amount to outgoing promoters/shareholders and consequently to square of all such amount to Shetty Family the Loans have been taken by both the Family to settle the business transactions and to handover the peaceful possession and ownership to Sanghavi Family. The amount was infact required to be paid by Sanghavi Family to Shetty Family to acquire such ownership and therefore the Sanghavi Family had taken loans from company and paid off to Shetty Family in the ordinary course of business to repay the validation arrived at to outgoing promoters. The management is aware about such transaction and is committed to square off the same promptly in the books of the company.

The Board has duly reviewed the Statutory Auditors Report on the Accounts. The observations comments and notes of Auditor are self explanatory and do not call for any further explanation/clarification.

16) DETAILS REGARDING SUBSIDIARY/ASSOCIATES/JOINT VENTURE COMPANIES:

During the year, it has been reviewed that, there has been no Company which became or ceased to be Companys Subsidiary, Joint Ventures or Associate Companies and hence Form AOC-1 is not applicable to the Company.

17) PERFORMACE AND FINANCIAL POSITION OF ASSOCIATE, JOINT VENTURE OR SUBSIDIARY COMPANIES:

The Company does not have any Associate or Joint Venture or Subsidiary Companies; hence disclosure requirement with respect to performance and financial position of such Associate or Joint Venture or Subsidiary Company is not applicable during the year under review.

18) REASONS FOR REVISION OF FINANCIAL STATEMENT OR REPORT:

During the year, the financial statements or report was not revised. Hence disclosure requirement is not applicable.

19) INDEPENDENT DIRECTOR:

Our Company is not covered under class of Company as prescribed under Section 149(3) of the Companies Act, 2013 read with Rule 4 of Companies (Appointment and Qualification of Directors) Rules, 2014, hence, no disclosures required under sections 134(3)(d), Section 149(6) and 149(10) of the Companies Act, 2013.

20) DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Company is well equipped with adequate internal financial controls. The Company has a continuous monitoring mechanism which enables the organization to maintain the same standards of the control systems and help them in managing defaults, if any, on timely basis because of strong reporting mechanisms followed by the Company.

21) FORMAL EVALUATION BY BOARD OF ITS OWN PERFORMANCE:

Being an unlisted Company or having a paid up capital of less than Rs. 25 Crores, the Statement in respect of Formal Evaluation by the Board of its own performance and that of its committees and individual directors are not applicable to the Company.

22) ISSUE OF EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS / SWEAT EQUITY SHARES / EMPLOYEE STOCK OPTION SCHEME^

During the year under review, the Company has not issued any equity shares with differential voting rights or sweat equity shares or employee stock option scheme. Hence disclosure regarding the same is not required to be given.

23) VIGIL MECHANISM:

As the Company is neither listed Company nor falling under criteria laiddown under rule 7 of Companies (Meetings of Board and its Powers) Rules, 2014, hence the vigil mechanism is not applicable to the Company during the financial year under review.

24) DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

There was no case reported under the Act during the financial year under review.

25) CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company is not covered under class of Companies as specified under Section 135 of the Companies Act, 2013, hence, reporting requirement pertaining to CSR Committee and CSR is not applicable to our Company during the year under review under section Sec 134(3)(o) read with Rule 9 of Companies (Accounts) Rules, 2014 and Section 135 of the Companies Act, 2013.

26) ANALYSIS OF REMUNERATION:

The Company is not listed on any recognized stock exchange; hence disclosure regarding the ratio of the remuneration of each Director to the median employees remuneration and other details are not applicable to the Company.

27) POLICY ON DIRECTORS APPOINTMENT & REMUNERATION:

Requirement of Nomination and Remuneration Committee is not applicable to the Company; however, the Companys remuneration policy is directed towards rewarding performance based on review of achievements periodically. The remuneration policy is in consonance with the existing industry practice.

28) RISK MANAGEMENT POLICY:

As per the applicable requirements of the Companies Act, 2013 a risk management policy/plan of the Company is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk lelated issues. In today s challenging and competitive environment, strategies for mitigating inherent risks in accomplishing the growth plans of the Company are imperative. The common risks inter alia are: Regulations, competition, Business risk, Technology obsolescence, Investments, retention of talent and expansion of facilities. Business risk, inter-alia, further includes financial risk, political risk, fidelity risk, legal risk. As a matter of policy, these risks are assessed and steps as appropriate are taken to mitigate the same.

29) CORPORATE GOVERNANCE:

Our Company is unlisted entity; hence the requirement of Corporate Governance is not applicable to our Company during the financial year under review,

30) RECONCILIATION OF SHARE CAPITAL AUDIT:

As per Rule 9A sub-section (4), Every unlisted public company shall facilitate dematerialisation of all its existing securities by making necessary application to a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 and shall secure International security Identification Number (ISIN)for each type of security and shall inform all its existing security holders about such facility.

Being a Public unlisted Company, Your Company has appointed Maashitla Securities Private Limited as your RTA to facilitate dematerialisation of all its existing securities by making necessary application to a depository.

Your Company has also filed form PAS-6 with all the details such as ISIN, details of capital, Details of changes in share capital half-yearly with the ROC during the period under review. And as per their report dated 15th May, 2023, total physical share is Nil, shares held in DEMAT mode- NSDL are 1819900 and in DEMAT mode - CDSL are 100 as on 31^st March 2023.

Your company is continuously complying with all the norms and makes timely payment of fees (admission as well as annual) to the depository and registrar and share transfer agent as in accordance with the agreement executed between the parties.

31) PARTICULARS OF LOANS, INVESTMENTS OR GUARANTEES UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

No Loans, Investments or Guarantees made by the Company pursuant to provisions of section 186 of the Companies Act, 2013, during the year under review. Further, loans granted to the parties have been mentioned in the notes to the financial statements forming part of the Annual Report.

32) RELATED PARTY TRANSACTION:

All the related party transactions entered by the Company were on arms-length base, in ordinary course of business and non-material in nature; hence disclosure required in Form AOC-2 is not applicable to our Company for the financial year under review.

33) ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation of the co-operation and assistance received from the shareholders, financial institutions, bankers and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment by all officers and staff for their continued support during the year.

For M/s. Royal arc Electrodes Limited
Mri Swagat Sanghvi	Mr. Hardik Sanghvi
Whole Time Director	Whole Time Director
DIN: 01695341	DIN: 00617415
Place: Mumbai
Date: 4th September, 2023