Royal Arc Electrodes Ltd Directors Report

To,

The Members,

Your directors are pleased to present the 30th Annual Report on the business and operations of Royal Arc Electrodes Limited (hereinafter referred to as the "Company") along with the audited financial statements for the financial year ended March 31, 2026.

1) FINANCIAL SUMMARY:

The Companys financial performance for the financial year ended March 31, 2026 are summarized below:

(Amount in Lakhs)

Particulars	For the Financial year Ended 31-Mar-26	For the Financial year Ended 31-Mar-25
Revenue From Operations	11,606.00	10,176.79
Other income	194.35	57.69
Total Income	11,800.35	10,234.48
Operating Expenses	10,438.55	8,980.97
Profit / (Loss) Before exceptional and extraordinary items and tax	1,361.80	1,253.51
Provision for tax	1,361.80	1,253.51
Profit after tax	1,004.54	900.56
Earnings per equity share
(1) Basic	9.05	9.49
(2) Diluted	9.05	9.49

2) RESULT HIGHLIGHTS:

In accordance with the provisions of the Act, and SEBI Listing Regulations, the financial statements of the Company have been prepared in compliance with the Indian Accounting Standards ("Ind AS") prescribed under the Act, read with Companies (Accounts) Rules, 2014, as amended.

During the financial year 2025-2026 your Company has generated revenue from operations of Rs. 11,800.35 Lakhs (including other income) as compared with the corresponding figure of previous Financial year of Rs. 10,234.48 Lakhs and earns net profit after tax Rs. 1,004.54 Lakhs as compared with the corresponding figure of previous financial year of Rs. 900.56 Lakhs. The total revenue is increased by Rs. 1,566 Lakhs as compared to last year as well as net profit after tax is also increased by Rs. 103.98 Lakhs as compared to last year.

3) DIVIDEND:

The Company paid Interim Dividend of Rs. 0.50/- per equity share of Rs. 10/- each of the Company for the F.Y. 2025-26.

The Board of Directors further in its meeting held on Tuesday, May 19, 2026 has recommended to the shareholders a final dividend of Rs. 0.50/- per equity share for the financial year 2025-26. The final dividend, if declared as above, would entail a total outflow of approx. Rs. 55,50,100/-. The dividend payment is subject to approval of members at the ensuing 30th Annual General Meeting.

4) TRANSFER TO RESERVE:

The Board of Directors proposed to transfer rest of the amount after paying dividend to the reserves.

5 BRIEF DESCRIPTION OF THE COMPANY AFFIARS:

Incorporated in 1996, our Company is engaged in the business of manufacturing of welding electrodes, flux cored wires, MIG/TIG wires. The Company is capable of manufacturing both standardized as well as customized products. Further, our Company is also engaged in the business of trading of ancillary/incidental products like abrasive wheels, welding flux, saw wire, saw flux, and special TIG/MIG. We supply our products to domestic customers and export customers. Your Company is committed to steady and sustainable growth and maintain the growth momentum.

Your Company is committed to steady and sustainable growth and maintain the growth momentum.

6 CHANGE IN NATURE OF BUSINESS:

During the year, your Company has not changed its business or object and continues to be in the same line of business as per main object of the Company.

7 THE REGISTERED OFFICE:

The registered office of the company is situated at 72 B, Bombay Talkies Compound, Malad West, Mumbai 400064, Maharashtra, India.

8 DEMATERIALIZATION OF SHARES:

All the Equity Shares of the Company are in dematerialized form with either of the depositories viz. NSDL and CDSL. The ISIN No. allotted is INE0E0401019.

9 SHARE CAPITAL:

During the year under review, the authorized and paid-up share capital of the Company are as follows:

AUTHORIZED CAPITAL:

The Authorised Capital of the Company is Rs. 18,00,00,000/- divided into 1,80,00,000 Equity Shares of 10/- (Rupees Ten Only) each. During the Financial year, the Company has not increased the authorized Share capital of the Company.

ISSUED, SUBSCRIBED & PAID-UP CAPITAL:

As on March 31, 2026, the issued, subscribed and paid up share capital of the Company stood at Rs. 11,10,02,000/- comprising of 1,11,00,200 Equity Shares of Rs. 10/- each.

The Company has not issued shares with differential voting rights nor has issued any Sweat Equity. As on March 31, 2026, none of the Directors of the Company hold any convertible instruments of the Company.

10 CORPORATE GOVERNANCE:

The Company is listed on NSE Emerge SME Platform. Hence the Corporate Governance requirements as stipulated under the SEBI (Listing Obligation and Disclosure Requirements), 2015 are not applicable to the company except few.

As per the Guideline and direction of the SEBI & Stock Exchange accordingly the company has been adhering to the directions and guideline, as required and if applicable.

Our Company stands committed to good Corporate Governance practices based on the principles such as accountability, transparency in dealings with our stakeholders, emphasis on communication and transparent reporting. We have complied with the requirements of the applicable regulations, in respect of corporate governance including constitution of the Board and Committees thereof.

The Corporate Governance framework is based on an effective Independent Board, the Boards Supervisory role from the executive management team and constitution of the Board Committees, as required under law. The Board functions either as a full board or through the various committees constituted to oversee specific operational areas. The Board of Royal Arc Electrodes Limited consists of Six Directors with a fair representation of Executive, Non-Executive and Independent Directors. As per SEBI (LODR) Regulations, the Company has three Independent Directors.

1) COMPANYS PHILOSOPHY ON THE CODE OF GOVERNANCE:

Corporate Governance is a set of systems and practices to ensure that the affairs of the Company is being managed in a way which ensures accountability, transparency and fairness in all its transactions in widest sense and meet up its stakeholders aspirations and societal expectations. The Company has always endeavoured to implement the Corporate Governance process in the most democratic form as maximization of shareholders wealth is cornerstone of our Company. For the Company the advent of the SEBI (LODR) Regulations 2015 has paved way for sharing with the stakeholders, the corporate governance practices, which are deeply rooted in the corporate culture of the Company. Our Company has been committed in adopting and adhering to global recognized standards of corporate conduct towards its employees, clients and the society at large. The management team of our Company exerts the strict adherence to corporate governance practices in order to cover the entire spectrum of governance activities and benchmark its practices with the prevailing guidelines of Corporate Governance.

12) NUMBER OF BOARD MEETING HELD:

During the year under review 6 (Six) meeting of the Board of Director were held as under:

1. 28.05.2025

2. 05.09.2025

3. 29.09.2025

4. 10.11.2025

5. 21.01.2026

6. 11.03.2026

The details of attendance of Director with respect to above meeting are as follows:

Sr. No	Name of the Director	DIN	No. of Board Meetings Entitled Attend	No. of Board Meetings Attended	Attendance at Annual General Meeting
1.	Mr. Bipin Shantilal Sanghvi	00462839	6	6	Yes
2.	Mr. Hardik Bipin Sanghvi	00617415	6	6	Yes
3.	Mr. Swagat Bipin Sanghvi	01695341	6	6	Yes
4.	Mr. Kunal Kamlesh Turakhia	10455417	6	6	Yes
5.	Mrs. Jayna B Mehta	10455416	6	6	Yes
6.	Mr. Rahul Rajan Vattamparambil	10455717	6	6	Yes

13) DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Details regarding our Board of Director as on 31st March, 2026 are set forth in below table:

Name of Director/KMP	Designation	DIN	Date of Appointment
Mr. Bipin Shantilal Sanghvi	Chairman and Managing Director	00462839	15/01/1996
Mr. Hardik Bipin Sanghvi	Whole Time Director & Chief Financial Officer	00617415	01/12/2012 Appointed as Chief Financial Officer (CFO) w.e.f. 16/01/2024
Mr. Swagat Bipin Sanghvi	Whole Time Director	01695341	16/08/2010
Mrs. Jayna B Mehta	Non-Executive & Independent	10455417	16/01/2024
Mr. Rahul Rajan Vattamparambil	Non-Executive & Independent	10455416	16/01/2024
Mr. Kunal Kamlesh Turakhia	Non-Executive & Independent	10455717	16/01/2024

1. On 15.04.2026, Mrs. Mansi Maulik Bagadiya resigned as Company Secretary and Compliance Officer.

2. Mr. Krunal Shah, was appointed as Company Secretary and Compliance Officer w.e.f. 19.05.2026.

14) BOARD COMMITTEES:

Your Company has in place the Committee(s) as mandated under the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There are currently Three committees of the Board, namely:

1. Audit Committee.

2. Nomination & Remuneration Committee.

3. Stakeholders Relationship Committee.

The details of the committees along with their composition are discussed below:

Audit Committee:

Your Company has constituted Audit Committee as per section 177 of the Companies Act, 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; the terms of reference of Audit Committee are broadly in accordance with the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013.

The Audit Committee comprises of the following Members as on 31st March, 2026.

Name of Director	Nature of Directorship	Designation in Committee
Mrs. Jayna B Mehta	Non-Executive Independent Director	Chairperson
Mr. Hardik Bipin Sanghvi	Executive Director	Member
Mr. Kunal Kamlesh Turakhia	Non-Executive Independent Director	Member

During the year under review 02 (Two) meeting of the Audit Committee were held as under:

SN	Date(s) of Meeting	Name of the Members Present
		Mrs. Jayna B Mehta	Mr. Hardik Bipin Sanghvi	Mr. Kunal Kamlesh Turakhia
1	28.05.2025	Present	Present	Present
2	10.11.2025	Present	Present	Present

Nomination and Remuneration Committee:

Your Company has constituted a Nomination and Remuneration Committee in accordance with the section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Nomination and Remuneration Committee comprises of the following Members as on 31st March, 2026.

Name of Director	Nature of Directorship	Designation in Committee
Mrs. Jayna B Mehta	Non-Executive Independent Director	Chairperson
Mr. Kunal Kamlesh Turakhia	Non-Executive Independent Director	Member
Mr. Rahul Rajan Vattamparambil	Non-Executive Independent Director	Member

During the year under review 01 (One) meeting of the Nomination and Remuneration Committee were held as under:

SN	Date(s) of Meeting	Name of the Members Present
		Mrs. Jayna B Mehta	Mr. Kunal Kamlesh Turakhia	Mr. Rahul Rajan Vattamparambil
1	29.09.2025	Present	Present	Present

Stakeholders Relationship Committee:

Your Company has constituted a Stakeholders Relationship Committee in accordance with the section 178 (5) of the Companies Act, 2013 and Regulation 20 of the SEBI (Listing Obligations and Disclosure Requirements Regulations, 2015, to redress complaints of the shareholders.

The Stakeholders Relationship Committee comprises the following Members as on 31st March, 2026:

Name of Director	Nature of Directorship	Designation in Committee
Mr. Kunal Kamlesh Turakhia	Non-Executive Independent Director	Chairman
Mr. Hardik Bipin Sanghvi	Executive Director	Member
Mr. Swagat Bipin Sanghvi	Executive Director	Member

During the year under review 04 (Four) meeting of the Stakeholders Relationship Committee were held as under:

SN	Date(s) of Meeting	Name of the Members Present
		Mr. Kunal Kamlesh Turakhia	Mr. Hardik Bipin Sanghvi	Mr. Swagat Bipin Sanghvi
1	28.05.2025	Present	Present	Present
2	29.09.2025	Present	Present	Present
3	10.11.2025	Present	Present	Present
4	11.03.2026	Present	Present	Present

15) GENERAL MEETING(s):

Following General Meeting was held during the period under review:

Type of Meeting	Date	Venue
Annual General Meeting	29.09.2025	72 B, Bombay Talkies Compound, S.V.Road, Malad West, Mumbai – 400064

16) DISCLOSURE BY DIRECTORS:

The Directors on the Board have submitted notice of interest under Section 184(1) i.e. in Form MBP 1, intimation under Section 164(2) i.e. in Form DIR 8, List of relatives and declaration as to compliance with the Code of Conduct of the Company.

17) SECRETERIAL STANDARD RELATING TO THE MEETINGS:

The Company has complied with the applicable Secretarial Standards (SS) i.e. SS 1 (on Meeting of Board of directors) and SS-2 (on General Meeting) during the financial year 2025-2026.

18) PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTOR:

Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria for the Board, its Committees and Directors.

The Boards functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on aspects such as attendance and contribution at Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings.

The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole.

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.

19) DECLARATION BY THE INDEPENDENT DIRECTOR:

Pursuant to Section 149(7) of the Act, the Company has received declarations from all Independent Directors, confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management.

The Independent Directors have also confirmed that they have complied with the Companys Code of Conduct and that they are registered on the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs. The Directors have further confirmed that they are not debarred or disqualified from holding the office of director under any order of MCA, SEBI or other regulator. The Board of Directors of the Company have taken on record the aforesaid declaration and confirmation submitted by the Independent Directors.

20) SEPARATE MEETING OF INDEPENDENT DIRECTORS:

Independent Directors of the Company held their Separate meeting under Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Schedule IV of Companies Act, 2013 on Wednesday, 11th March, 2026 at Registered office of the Company to evaluate their performance.

21) NOMINATION AND REMUNERATION POLICY:

Nomination and Remuneration Policy in the Company is designed to create a high-performance culture. It enables the Company to attract motivated and retained manpower in competitive market, and to harmonize the aspirations of human resources consistent with the goals of the Company. The Company pays remuneration by way of salary, benefits, perquisites and allowances to its Executive Directors and Key Managerial Personnel. The Nomination and Remuneration Policy of the Company is posted on the website of the Company.

22) DETAILS OF KEY MANAGERIAL PERSONNEL:

In terms of Section 203 of the Companies Act, 2013, Mr. Bipin Shantilal Sanghvi is Managing Director, Mr. Hardik Bipin Sanghvi is Chief Financial Officer, Mrs. Mansi Maulik Bagadiya was a Company Secretary & Compliance Officer of the Company till 15.04.2026 and Mr. Krunal Shah, is a Company Secretary and Compliance Officer w.e.f. 19.05.2026.

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

The Details Loan, Guarantee and Investment covered under the provision of section 186 of the Act, read with Companies (Meeting of Board and its Power) Rule 2014 as on 31st March, 2026 are given in Notes to the Financial Statement forming part of this Annual Report and are complied.

24) AUDITORS:

a) Statutory Auditor:

M/s. J.H. Gandhi & CO., Chartered Accountant, Mumbai, (Firm Registration No.: 0116513W), appointed as Statutory Auditor of the Company for a term of 5 (five) consecutive years from the conclusion of 29th AGM till the conclusion of the 34th AGM, i.e. FY 2025-2026 to 2029-2030.

There are no qualifications, reservations or adverse remarks or disclaimers made by the auditors in their report on the financial statements of the Company for the Financial Year ended March 31, 2026. The notes on the Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any comments or explanations.

b) Internal Auditor:

Pursuant to the provisions of Section 138 of Companies Act, 2013 read with Rule 13 of the Companies (Accounts) Rules, 2014 and other applicable provisions if any of the Companies Act, 2013, M/s. Ketan N Shah & Co, Chartered Accountants were reappointed as Internal Auditors of Company for the three financial years from 2026-2027 to 2028-2029.

c) Cost Auditors:

The Company is required to make and maintain cost record pursuant to Section 148 of the Companies Act, 2013.

In terms of the provisions of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Board of Directors of your Company on the recommendation of the Audit Committee appointed C. B. Modh & Co. (FRN - 101474) Cost Accountants, as the Cost Auditors, to conduct the Cost Audit of your Company for the Financial Year ended March 31, 2026. The Cost Auditors submitted their report for Financial Year 2025-2026 within the timeframe prescribed under the Companies Act, 2013 and rules made thereunder and the report does not contain any qualification, reservation, disclaimer or adverse remark.

The Board, on the recommendation of Audit Committee has appointed C. B. Modh & Co. (FRN - 101474) Cost Accountants, as the Cost Auditors of the Company for Financial Year 2026-2027 at a remuneration of Rs. 68,500 plus applicable taxes and reimbursement of travel and out of pocket expenses. The Company has received consent from C. B. Modh & Co. (FRN - 101474) Cost Accountants, as the Cost Auditors, to act as the Cost Auditor of your Company for Financial Year 2026-2027, along with the certificate confirming their eligibility. In accordance with the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors has to be ratified by the shareholders, the Board recommends the same for approval by shareholders at the ensuing Annual General Meeting.

d) Secretarial Audit and Secretarial Audit Report:

In terms of the provision of the Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed Mrs. Riddhi Shah, Company Secretary in Practice

(COP 17035 & PR No. 2037/2022), as the Secretarial Auditor for conducting the Secretarial Audit of your Company for the Financial Year ended March 31, 2026 & till FY 2029-2030. The report of the Secretarial Auditor is annexed to this report as "Annexure A". The contents of the Secretarial Audit Report are self-explanatory and do not contain any qualification, reservation or adverse remark.

Mrs. Riddhi Shah, has tendered her resignation as a Secretarial Auditor with effect from 19.05.2026.

The Board of Directors on the recommendation of Audit Committee, appointed CS Dipti Gohil, (Membership No. ACS 14736 & COP No. 11029) Practicing Company Secretary as a Secretarial Auditor of the Company for the period of 5 consecutive years commencing from the financial year 2026-27 until the conclusion of the annual general meeting to be held for financial year 2030-31 subject to approval of shareholders in this Annual General Meeting in reference to Regulation 24A of the SEBI (LODR).

25) DETAILS IN RESPECT OF FRAUD REPORTED BY AUDITORS:

Pursuant to provisions of Section 143 (12) of the Companies Act, 2013, the Statutory Auditors have not reported any incident of fraud to the Board during the financial year under review.

26) UTILIZATION OF FUND RAISED FROM INITIAL PUBLIC OFFERING:

During the FY 2024-2025, the Company had raised money by way of Initial Public Offering by issuing 18,00,000 equity shares of Rs. 10 each at a premium of Rs. 110 per share. The money as raised have been applied for the purposes for which those are raised till March 31, 2026 as follows:

SN Object	Modified Object, if any	Original Allocation (Rs.)	Modified allocation, if any	Funds Utilised (Rs.)	Amount of Deviation /Variation for the quarter according to applicable object	Remarks if any
1. Funding towards the expansion of our manufacturing facility situated at Village Zaroli, Umbergaon Valsad, Gujarat, Bharat.	N.A.	4,88,66,000	N.A.	4,88,66,000	Nil	N.A.
2. Funding the working capital requirements of our Company	N.A.	14,00,00,000	N.A.	14,00,00,000	Nil	N.A.
3. General corporate purposes	N.A.	2,71,34,000	N.A.	2,58,51,715	Nil	N.A.
Total	N.A.	21,60,00,000	N.A.	21,47,17,715	N.A.

27) DEPOSITS:

The Company has not accepted any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

28) SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There are no significant and material orders passed by any Regulators, Courts or Tribunals during the financial year that would impact the going concern status of the Company or its future operations continue in the normal course of business.

29) EXTRACT OF ANNUAL RETURN:

The Extract of Annual Return in Form MGT-9 pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is furnished in "Annexure B".

30) SUBSIDIARIES OF THE COMPANY:

During the year under review, the Company does not have any subsidiary Company.

31) ASSOCIATES AND JOINT VENTURE OF THE COMPANY:

During the year under review, the Company does not have any Associate or Joint Venture.

32) TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND:

There is no money lying to unpaid/unclaimed dividend account pertaining to any of the previous years with the Company. As such the Company is not required to transfer such amount to the Investor Education and Protection Fund established by the Central Government in pursuant to the provisions of Sections 124 and 125 of the Act, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016. Further, the provisions related to the shares in respect of which dividend has not been paid/claimed for the consecutive period of seven (7) years or more which are required to be transferred to the demat account of the IEPF Authority, are not applicable to the Company.

33) DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Companies Act, 2013, Directors of your Company hereby state and confirm that:

a) In the preparation of the Annual Accounts for the year ended 31st March, 2026, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

b) they 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 the same period;

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) they have prepared the Annual Accounts on a going concern basis;

e) they have laid down internal financial controls in the Company that are adequate and were operating effectively.

f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and these are adequate and are operating effectively.

34) PARTICULARS OF CONTRACTOR ARRANGEMENT WITH THE RELATED PARTY:

In accordance with the provisions of Section 188(1) of the Companies Act, 2013 there are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Accordingly, no transactions are being reported in Form AOC-2, in terms of Section 134 of the Act read with rule 8 of the Companies (Accounts) Rules, 2014 and hence does not form part of this report.

However, the disclosure of the related parties is provided in the notes to accompanying financial statements of the Company for the FY ended 31st March, 2026 in accordance with the Accounting Standards.

35) PARTICULARS OF EMPLOYEES UNDER SECTION 197(12) AND RULE 5 OF COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

The information in accordance with the provisions of section 197(12) of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as "Annexure C" to this Report.

36) CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company is committed to playing an active role in transforming communities by creating long-term value for all stakeholders and improving their socioeconomic well-being. We believe in fostering business growth in a socially and environmentally responsible manner.

During the financial year under review 2025-2026 the provision of section 135 of the Companies Act, 2013 regarding CSR is applicable to the company.

In line with the provisions of Section 135 of the Companies Act, 2013, and the rules framed thereunder, the Company has a comprehensive CSR Policy. The said policy is available on the Companys website at www.royalarc.in. The Obligation of CSR Committee is not applicable to the Company, the Board of Directors have been actively engaged in fulfilling the Companys social and environmental obligations.

Our CSR policy, duly approved by the Board of Directors, outlines our commitment to operating in an economically, socially, and environmentally sustainable manner. We are dedicated to implementing projects that align with the national development agenda and the focus areas specified under Schedule VII of the Companies Act, 2013.

Accordingly, the Companys prescribed CSR expenditure for the year was Rs. 21,59,440/- and the Board is pleased to report that the Company has spent Rs. 21,59,440/- on various CSR activities during the year, which is in compliance with the prescribed CSR obligation. The details of the projects and programs undertaken, along with the expenditure incurred, are provided in the "Annexure D".

37) MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

In terms of Regulation 34 and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a review of the performance of the Company for the year under review Management Discussion and Analysis Report is presented in a separate section which is annexed to this Report as Annexure "E".

38) INTERNAL FINANCIAL CONTROL SYSTEMS AND ITS ADEQUACY:

Your Company has in place adequate internal control systems commensurate with the size of its operations. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. Based on the framework of internal financial controls and compliance systems established and maintained by the Company, the work performed by the internal auditors and the reviews performed by management and the Audit Committee, the Board is of the opinion that the Companys internal financial controls were adequate and effective during the Financial Year 2025-2026.

39) 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

 

(i) the efforts made towards technology absorption	The Company has not imported any technology during the year.
(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)
(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 - Rs. 389.04 Lakhs towards value of exports.

The Foreign Exchange outgo during the year in terms of actual outflows

2. Total Foreign Exchange outgo - Rs. 25.29 Lakhs.

40) RISK MANAGEMENT POLICY:

Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. The Company has laid down a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework. The major risks have been identified by the Company and its mitigation process/measures have been formulated in the areas such as business, project execution, event, financial, human, environment and statutory compliance.

The Company has been addressing various risks impacting the Company. Risk Management is integral to your Companys strategy and for the achievement of our long-term goals. Our success as an organization depends on our ability to identify and leverage the opportunities while managing the risks.

During the financial year under review 2025-2026, the Company has constituted Risk Management Policy, which is uploaded on the website of the Company i.e. www.royalarc.in.

41) DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

There is neither an application made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the financial year 2025-2026.

42) DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE:

There were no significant material orders passed by the Regulators or Courts or Tribunal which would impact the going concern status of the Company and its future operation.

43) VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by Board of Directors of the Company in compliance with the provisions of Section 177(10) of the Act.

44) SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

To foster a positive workplace environment free from harassment of any nature we have framed Prevention of Sexual Harassment Policy through which we address complaints of sexual harassment at all workplaces of the Company. Our policy assures discretion and guarantees non-retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land where we operate.

Number of sexual harassment complaints received - Nil

Number of sexual harassment complaints Disposed-off during the year - Nil

Number of sexual harassment cases pending for a period exceeding ninety days - Nil

45) INTERNAL FINANCIAL CONTROLS:

The Company has laid proper and adequate systems of internal financial control commensurate with the size of its business and nature of its operations with regard to the following:

i. Systems have been laid to ensure that all transactions are executed in accordance with managements general and specific authorization.

ii. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for aspects and the timely preparation of reliable financial information.

iii. Access to assets is permitted only in accordance with managements general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

iv. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to any differences, if any.

v. Proper systems are in place for the prevention and detection of frauds and errors and for ensuring adherence to the Companys policies.

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 weaknesses in the design or operation were observed.

46) CODE OF CONDUCT

Pursuant to the provisions of Regulations 8 & 9 of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Board of Directors has formulated, implemented and has in place a comprehensive "Code of Fair Disclosure of Unpublished Price Sensitive Information" & "Code of Conduct for Prevention of the Insider Trading" for regulating, monitoring and reporting the trading by Designated persons of the Company which exemplifies the spirit of good ethics and governance and is applicable to the Designated personnel of the Company which includes Promoters, Promoter Group, Key Managerial Personnels, Directors, Senior Management and such other employees of the Company and others in fiduciary relationships and as may be approved by the Board of Directors, from time to time, based on the fact of having access to unpublished price sensitive information. The referred Code(s) lays down guidelines advising the Designated Personnel on procedures to be followed and disclosures to be made while dealing with the securities of the Company.

Further, the Board Members and Senior Management Personnel have affirmed compliance with the code of conduct. A declaration with regards to compliance with the Code of Conduct for the Financial Year 2025-2026 has been received by the Company from the Managing Director.

47) LISTING:

The Equity Shares of the Company are listed on SME Platform of National Stock Exchange Emerge Platform ("NSE Emerge"). The Company has made payment of Annual Listing Fees and other compliance fees.

48) ADHERENCE TO STATUTORY COMPLIANCES

During the Financial Year under review, the Company diligently adhered to all the relevant statutory compliances of the Act, Listing Regulations, Secretarial Standards issued by ICSI, and other laws, provisions, and Acts that are applicable to the Company. This unwavering commitment to compliance ensures that the Company operates within the legal framework, maintaining transparency and accountability in its operations. By upholding these standards, the Company strives to build trust among its stakeholders while fostering a culture of responsible corporate governance.

49) ONE TIME SETTLEMENT WITH BANKS:

There has been no one-time settlement done during the year.

50) COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961:

The Company affirms that it is in full compliance with the provisions of the Maternity Benefit Act, 1961, as amended from time to time. The Company is committed to fostering a supportive and inclusive work environment, and ensures that all relevant policies and practices are regularly reviewed and aligned with the applicable statutory requirements.

51) WEBSITE DISCLOSURE:

The Company maintains an updated website at www.royalarc.in, which serves as a comprehensive resource for stakeholders, including shareholders, investors, and the general public. The website contains important information about the Companys operations, corporate governance policies, financial reports, statutory filings, and other relevant details.

52) ACKNOWLEDGEMENT:

The Board would like to express their sincere gratitude and appreciation to all employees at every level of the company top, middle, and lower whose dedication and hard work have been instrumental in driving our companys continuous growth and increasing shareholder value.

The Board wishes to express its grateful appreciation for the assistance and cooperation received from Vendors, Customers, Consultants, Banks, Financial Institutions, Central and State Government bodies, Dealers, and other Business Associates. The Board deeply acknowledges the trust and confidence placed by the Consumers of the Company and, above all, the Shareholders.

For Royal Arc Electrodes Limited

Place: Mumbai

Date: 19th May, 2026

Mr. Bipin Sanghvi

Managing Director

DIN: 00462839

Mr. Hardik Sanghvi

Whole Time Director

DIN 00617415