undefined share price Directors report


Dear Members,

Your Directors are pleased to present to you the 19th Annual Report on the business and operations of the Company along with the Audited Financial Statements (Standalone and Consolidated) for the Financial Year ended 31st March, 2023 ("FY").

1. FINANCIAL PERFORMANCE

Highlights of the Companys financial performance for the year ended 31 st March, 2023 are as under:

a) Standalone Financial Results

(Amount in Lakhs)

Particulars Financial Year ended 31st March, 2023 Financial Year ended 31st March, 2022
Revenue from Operations 24915.20 13,369.97
Other Income 40.81 56.45
Total Income 24,956.00 13,426.42
Less: Depreciation (208.56) (156.88)
Other Financial Expenses (23,371.6) (12,758.20)
Profit before exceptional items and tax 1,375.84 511.35
Exceptional Items - 5.06
Profit before tax 1,375.84 506.30
Tax Expenses 318.67 139.93
Profit after tax for the year 1057.17 366.37
Other Comprehensive Income 2.35 0.75
Net Profit for the year 1059.53 367.12
Transfer to General Reserve - -
Interim Dividend 0.20 0.20
EPS (Basic) 1.00 1.97
EPS (Diluted) 1.07 2.00

Note: The face value of the Company calculated considering the sub-division held on 3rd February, 2023.

b) Consolidated Financial Results

Particulars Financial Year ended 31st March, 2023 Financial Year ended 31st March, 2022
Revenue from Operations 27848.09 14,367.41
Profit after tax 1,106.51 405.77

c) Overview of Company Performance

In the midst of trade flow disruptions and economic instability, there was ongoing volatility in the global markets. Despite challenges, your company has continued to grow steadily and produce positive financial results.

Inflationary pressures caused consumer demand to decline, especially in rural markets, and increased consumer preference for goods at lower price points.

By focusing on the strategic pillars of cost-efficiency initiatives, innovation, brand development, and distribution in order to maintain growth and profitability, your company navigating these unprecedented challenges. To counteract the effects of rising commodity prices, prudent price increases were also put into practice.

2. SHARE CAPITAL

a) Authorised Share Capital:

At the beginning of the financial year, the Authorized Share Capital of the Company was Rs. 220000000 (Rupees Twenty Two Crores) divided into 2,20,00,000 (Two Crores Twenty Lakh) equity shares of face value of Rs. 10/- (Rupees Ten Only) each.

Thereafter in order to ensure smooth flexibility for Shareholders, the Company did sub-divide the equity shares of the Company such that equity shares of face value of Rs. 10/- were sub-divided into 5 (five) equity shares having face value Rs. 2/- each fully paid-up ranking pari-passu with each other in all respects with effect from 3rd February, 2023.

As on 31st March, 2023, the Authorized share capital of the Company post stock split stood at Rs. 22,00,00,000/-(Rupees Twenty Two Crores only) divided into 11,0000000 (Eleven Crores) equity shares of face value of Rs. 2/- (Rupees Two Only) each.

b) Paid-up Share Capital:

At the beginning of the financial year, the paid-up equity share capital of the Company was Rs. 18,66,54,290 (Rupees Eighteen Crore Sixty Six Lakhs Fifty Four Thousand Two Hundred Ninety only) divided into 1,86,65,429 (One Crore Eighty Six Lakhs Sixty Five Thousand Four Hundred and Twenty Nine) equity shares of Rs. 10/- (Rupees Ten only) each.

The Company vide Extra-ordinary General Meeting held on 1st October, 2023 had issue, and allotted 2600000 equity shares of Rs. 10/- each on preferential basis to other than promoter and promoter group. Accordingly, the paid up capital was changed from Rs. 18,66,54,290 (Rupees Eighteen Crore Sixty Six Lakhs Fifty Four Thousand Two Hundred Ninety) divided into 1,86,65,429 (One Crore Eighty Six Lakhs Sixty Five Thousand Four Hundred and Twenty Nine) equity shares of Rs. 10/- (Rupees Ten only) each to Rs. 21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) divided into 21265429 (Two Crore Twelve Lakhs Sixty Five Thousand Four Hundred Twenty Nine) equity shares of Rs. 10/- (Rupees Ten only) each.

Thereafter, with effect from 3rd February, 2023, the shares of the Company were sub-divided such that equity shares of face value of Rs. 10/- were sub-divided into 5 (five) equity shares having face value Rs. 2/- each fully paid-up ranking pari-passu with each other in all respects with effects, resulting in change in the paid-up equity share capital from Rs. 21,26,54,290 (Rupees Twenty One Crore Twenty Six Lakh Fifty Four Thousand Two Hundred Ninety) to 106327145 (Ten Crore Sixty Three Lakh Twenty Seven Thousand One Hundred Forty Five) equity shares, each of Rs. 2/- (Rupees Two only) each.

3. DETAILS OF PREFERENTIAL ISSUE

During the financial ended 31 st March, 2023, the Company vide its Extra-Ordinary General Meeting dated 1st October, 2022 had issued and allotted 2600000 equity shares on preferential basis to other than Promoters and Promoter Group in accordance with Sections 23(1)(b), 42 and 62(1)(c) of the Companies Act, 2013 and the Companies (Prospectus and Allotment of Securities) Rules, 2014, the Companies (Share Capital and Debentures) Rules, 2014 and read with the SEBI (ICDR) Regulations and the SEBI (LODR) Regulations, 2015.

The aforesaid equity shares are duly listed and traded on National Stock Exchange India Limited vide Listing and trading Approval dated 28th November, 2022.

4. DETAILS OF EMPLOYEES STOCK OPTION PLAN

The Company had initially obtained the shareholders approval for implementation of Employee Stock Option Plan ("ESOP 2022") vide Extra-ordinary General Meeting held on 4th March, 2022. Thereafter, with a view of engagement and formation of Subsidiaries of the Company, the management has recommended the ESOP Plan for the employees of subsidiary Company as well.

Therefore, the Company decided to amend its ESOP scheme and obtained fresh/amended approval from the shareholders in compliance with SEBI (Share Based Employees Benefits) Regulations, 2021 vide Postal Ballot dated 13th January, 2023.

Consequently, the Company had filed the application for in-principle approval from National Stock Exchange ("NSE") for listing up to a maximum 5,00,000 equity shares of Rs. 2/- each. The NSE had granted the in-principle approval vide its letter dated 18th May, 2023.

Currently, the Company had granted the ESOP options to its eligible employees and is in the process of implementing the said ESOP scheme by following the applicable provisions of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

5. DIVIDEND

During the year under review, the Board of Directors of the Company had, declared an interim dividend of Re. 0.20 per equity share of the face value of Re. 10/- each vide its Board Meeting dated The interim dividend was paid to the shareholders on 20th February, 2023.

Further, the Board of Directors have proposed to recommend Final dividend of 0.2 paise per Equity Share of Face Value of 1 /- (Rupees One Only)] for the Financial Year ended 31st March, 2023 subject to the approval of members at the ensuing Annual General Meeting upon deduction of TDS.

In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company had, accordingly, made the payment of the interim dividend after deduction of tax at source, at the rates as prescribed and the final dividend shall also be dealt accordingly.

Further, pursuant to the applicable provisions of the Companies Act, 2013, read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after completion of seven years.

Further, according to the IEPF Rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

However, the Company had declared Dividend for the first time in the Financial Year 2021-2022 and seven years have not elapsed from the date of declaration and payment of dividend the requirement of transfer of unpaid dividend and the shares on which dividend has not been paid or claimed, to Investor Education and Protection Fund (IEPF) is not applicable to the Company.

Note:- The change in face value of equity shares of the Company is due to the stock split conducted by the Company i.e. face value of Rs. 10/- each sub-divided into face value of Rs. 2/- each with effect from 3rd February, 2023 and the stock split No. 2 held with effect from 28th July, 2023 which resulted in change of face value from Rs. 2/- each subdivided into Rs. 1/- each.

6. DETAILS OF SUB-DIVISION OR STOCK SPLIT OF SHARES OF THE COMPANY

During the financial year under review, the board of Directors of the Company vide its Meeting dated 7th December, 2022 upon approval of the shareholders of the Company vide Postal Ballot results of which was declared on 13th January, 2023 had approved the sub-division/stock split of shares of the Company such that equity shares of face value of Rs. 10/- were sub-divided into 5 (five) equity shares having face value Rs. 2/- each fully paid-up ranking pari-passu with each other in all respects with effect from 3rd February, 2023.

Thereafter, the Authorized share Capital of the Company had been sub-divided into Rs. 220000000 (Rupees Twenty Two Crores), which is divided into 11,00,00,000 (Eleven Crores) equity shares with a face value of Rs. 2/- (Rupees Two Only) from Rs. 22,00,00,000 (Rupees Twenty Two Crores) divided into 2,20,00,000 (Two Crores Twenty Lakh) equity shares with a Face Value of Rs. 10/- (Rupees Ten Only) each with effect from 3rd February, 2023.

Further, the issued, subscribed, and paid-up equity share capital had also changed to Rs. 21,26,54,290 divided into 106327145 equity shares, each of Rs. 2/- each from Rs. 21,26,54,290 divided into 21265429 equity shares of Rs. 10/- (Rupees Ten only) each.

7. CHANGE IN THE NATURE OF BUSINESS

For sustained growth in the future, Company wants to rely on the main business (es) of Company. There is no change in the nature of the business of the Company during the year.

8. TRANSFER TO RESERVE

The Company does not propose to transfer amounts to the general reserve.

9. DEPOSITS

The Company has not accepted any deposits covered under Chapter V of the Companies Act, 2013 during the financial year 2022-23.

10. DETAILS OF SUBSIDIARY/JOINT VENTURE/ASSOCIATE COMPANIES

As on 31st March, 2023, the Company has 3 (three) subsidiaries, the details of which are as mentioned below.

There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries.

I. Rebreathe Medical Devices India Private Limited ("RMDIPL"):

A Private Limited Company vide CIN: U33119DL2021PTC383180 incorporated on 5th July, 2021. The Holding Company has 95% shareholding in the Subsidiary.

II. Techbec Industries Limited ("TIL")

A Public Limited Company vide CIN: U31900DL2022PLC404516 incorporated on 13th September, 2022. The holding Company has 63.5% shareholding in the Subsidiary Company.

III. Techbec Global Solutions Private Limited ("TGSPL")

A Private Limited Company vide CIN: U31900DL2022PTC407268 incorporated on 23rd November, 2022. The holding Company has 63.5% shareholding in the Subsidiary Company.

Note:- The Company had entered into share purchase agreement on 28th July, 2023 for transfer of shares held by Company in the Techbec Global Solutions Private Limited. With effect from completion of the Agreement TGSPL ceased to be the subsidiary Company.

IV. Techbec Green Energy Private Limited ("TGEPL")

After the close of financial year and with effect from 27 th July, 2023 a wholly-owned subsidiary Company vide CIN: U27201DL2023PTC417728 was incorporated.

The annual accounts of the subsidiaries shall also be kept for inspection by any shareholder in the Registered Office of the Company and the respective offices of its Subsidiary Companies.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect subsidiaries, are available on the Companys website at www.servotech.in at Investors Tab.

11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, 10 (Ten) meetings of the Board of Directors were held. For details of the meetings of the Board, please refer to the Corporate Governance Report, which forms part of this Report.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on 31st March, 2023 the Board comprised of 6 (six) Directors, 3 (three) Executive Directors and 3 (three) Independent Directors. Out of the total 6 (six) directors, 1 (one) is woman director.

1. The Board of the Company upon the recommendation of the Nomination and Remuneration Committee, in its meeting held on 9th August, 2022 had appointed the following: I. Mr. Sampat Rai (DIN: 07710412), as Additional Director designated as Non-Executive Independent Director of the Company for period of three (3) Consecutive years w.e.f. 9th August, 2022 and his appointment was regularized by Shareholders in the Annual General Meeting held on 30th September, 2022. II. Mr. Jorg Gaebler (DIN: 09699666) as Additional Director designated as Non-Executive and Non-Independent Director of the Company for period of one (1) year w.e.f. 9th August, 2022 and his appointment was regularized by Shareholders in the Annual General Meeting held on 30th September, 2022. However Mr. Gaebler resigned from the Directorship on 11th October, 2022 due to personal reasons.

2. Mr. Nimesh Malhotra (DIN: 07104660) Whole-time Director of the Company has resigned w.e.f. 26th September, 2022.

3. Mr. Rajesh Mohan Rai (DIN: 09050751), initially appointed as Non-executive Independent Director was re-designated to Whole-time Director w.e.f. 15th December, 2022.

4. However, after the close of Financial Year, Mr. Sahiel Khurana (DIN: 02340950) Non-executive Independent Director of the Company resigned w.e.f. 19th May, 2023 and

5. Mr. Meenakshisundaram Kolandaivel (DIN: 09854605) was appointed as Non-executive Independent Director of the Company w.e.f 25th June, 2023.

During the year under review, other than were no above, there were no changes in the Board of Directors and Key Managerial Personnel of the Company.

13. DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors have submitted their disclosures to the Board that they fulfil all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, so as to qualify themselves continue to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules thereof. In the opinion of the Board, they fulfil the condition for appointment/re-appointment as Independent Directors on the Board. Further, in the opinion of the Board, the Independent Directors also possess the relevant attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5) (iii) (iiia) of the Companies (Accounts) Rules, 2014.

14. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) In the preparation of annual accounts for the financial year ended 31st March, 2023, the applicable accounting standards have been followed and there are no 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 as at 31st March, 2023 and of the profit of the Company for that period;

c) They have taken proper and sufficient care for their 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;

d) They have prepared the annual accounts on a going concern basis;

e) They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and

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

15. AUDITORS AND AUDITORS REPORT

i. STATUTORY AUDITORS

In accordance with the provisions of section 139 of the Companies Act, 2013, M/s. Rohit KC Jain and Co., Chartered Accountants (Firm Registration No. 020422N), were appointed as the Statutory Auditors for a period of 5 (five) years commencing from conclusion of the 18th AGM till the conclusion of the 23rd AGM. M/s. Rohit KC Jain and Co., Chartered Accountants is a leading professional services firm engaged in the field of audit, taxation, risk transaction advisory services.

M/s. Rohit KC Jain and Co., Chartered Accountants have consented to the said appointment, and confirmed that their appointment, would be within the limits mentioned under Section 141(3)(g) of the Companies Act, 2013 and the Companies (Audit and Auditors)

Rules, 2014. Further, they have confirmed that hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI).

The Audit Committee and the Board of Directors recommended the appointment of M/s. Rohit KC Jain and Co., Chartered Accountants, as Statutory Auditors of the company from the conclusion of the 18th AGM till the conclusion of the 23rd AGM.

In accordance with the provisions of the Companies (Amendment) Act, 2017, the requirement related to annual ratification of appointment of statutory auditors by the members has been omitted. Hence, the resolution for ratification of appointment of M/s. Rohit KC Jain and Co., Chartered Accountants as the statutory auditor, whose appointment was approved by the members in the 18th AGM for a term of five consecutive years i.e. till the conclusion of the 23rd AGM, has not been put for motion as an ordinary business in the 19th AGM.

The Auditors Report for financial year 2022-2023 on the financial statements forms part of this Annual Report. The Auditors have also furnished a declaration confirming their independence as well as their arms length relationship with the Company as well as declaring that they have not taken up any prohibited non-audit assignments for the Company. The Audit Committee reviews the independence of the Auditors and the effectiveness of the Audit process.

Auditors Report and the Notes on financial statements 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 or adverse remark.

ii. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors in its meeting held on 9th August, 2022 have appointed R & D Company Secretaries as Secretarial Auditor of the Company to conduct the Secretarial Audit of the Company for the financial year 2022-223.

The Secretarial Audit Report in prescribed Form MR-3 for the financial year ended 31 st March, 2023 is appended as Annexure-1 to this Report. Further in response to the observation received in the secretarial audit report we confirm that the Forms MGT-14 have been duly filed with the requisite late fees.

We further confirm that the delay whatsoever has been due to the technical challenges in the MCA portal faced by the Company while filling the said forms.

The Board of Directors further in its meeting dated 21st July, 2023 re-appointed R & D Company Secretaries to conduct the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Auditor have provided their consent inter alia contains their eligibility to give effect to their appointment.

iii. COST AUDITOR

As per Section 148 of the Act read with Companies (Cost Records and Audit) Rules 2014, M/s NN Sharma & Associates, Cost Accountants (Firm Registration No. 101702) as the Cost Auditors, have been re-appointed as Cost Auditors for the financial year 2023-24 to conduct cost audit of the accounts maintained by the Company in respect of the various products prescribed under the applicable Cost Audit Rules. The remuneration of Cost Auditors has been approved by the Board of Directors on the recommendation of Audit Committee.

The requisite resolution for ratification of remuneration of Cost Auditors by members of the Company has been set out in the Notice of ensuing AGM. The Cost Auditors have certified that their appointment is within the limits of Section 141(3)(g) of the Act and that they are not disqualified from appointment within the meaning of the said Act.

The Cost Audit Report for the financial year 2022-23, issued by M/s NN Sharma & Associates, Cost Accountants, in respect of the various products prescribed under Cost Audit Rules.

There were no observations (including any qualification, reservation, adverse remark or disclaimer) of the Cost Auditors in the Report issued by them for the financial year 2022-23 which call for any explanation from the Board of Directors.

16. DISCLOSURE ON COST RECORDS

Pursuant to provisions of Section 134 of the Act read with Rule 8(5) of the Companies (Accounts) Rules, 2014 it is confirmed that maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Act, is required by the Company and accordingly such accounts and records are made and maintained.

17. REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditors have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in Directors Report.

18. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report, highlighting the performance and prospects of the Companys business, forms integral part of the Annual Report.

19. CORPORATE GOVERNANCE

A good corporate governance system is something your company is devoted to. The needed Certificate from Secretarial Auditors regarding compliance with the requirements of corporate governance, as prescribed, and the Corporate Governance Report, as stipulated by the SEBI Listing Regulations, are an integral element of this Annual Report.

Your Company has developed and implemented a Code of Business Conduct for all Board members and senior management staff at the Company (Code of Conduct), who have all attested to compliance with the Code in accordance with the corporate governance standards as per the SEBI Listing Regulations. The aforementioned Code of Conduct can be seen on the Companys website at https://www. servotech.in/img/investor/Code-of-Conduct.pdf.

20. FORMAL ANNUAL EVALUATION

Pursuant to applicable provisions of the Act and the Listing Regulations, the Board, in consultation with the Nomination and Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company, its Committees and individual directors, including Independent Directors and the chairmen of the Board. The framework is monitored, reviewed and updated by the Board, in consultation with the Nomination and Remuneration Committee, based on need and new Compliance requirements.

The Board evaluation exercise for financial year 2022-23 was carried out by way of internal assessments done based on a combination of detailed questionnaires and verbal discussions.

I. Performance evaluation of the Board and Committees

The performance of the Board was evaluated by the Board Members after considering inputs from all the Directors primarily on:

i) Board composition and quality with emphasis on its size, skill, experience and knowledge of members;

ii) Periodic review of Companys management and internal control system for appropriateness and relevance;

iii) Board process and procedure with emphasis on the frequency of meetings, attendance thereof, flow of information;

iv) Oversight of Financial Reporting process including Internal Controls and Audit Functions;

v) Engagement in Corporate Governance, ethics and compliance with the Companys code of conduct.

The Board evaluated the performance of the Committees on the following parameters:

i) Appropriateness of size and composition;

ii) Clarity of mandate and well-defined agenda;

iii) Reporting to the Board on the Committees activities;

iv) Availability of appropriate internal and external support or resources to the Committees.

II. Performance Evaluation of Individual Directors

The performance evaluation of the Individual Directors were carried out by the Board and other Individual Directors, considering aspects such as:

i) Sufficient knowledge of Company strategy and objective;

ii) Understand their role as Director, as distinct from management;

iii) Adequate and productive use of knowledge and experience of the Independent Directors for the functioning of Board;

iv) Efforts for professional development to enable better fulfilment of their responsibilities;

v) Ask questions/critique proposals with confidence;

vi) Open and effective participation in Board discussions;

vii) Keep stakeholder interest as the touchstone in endorsing decisions.

III. Performance Evaluation of Chairman

i) Display of effective leadership qualities and skill;

ii) Implementationofobservations/recommendations of Board Members;

iii) Effective and timely resolution of grievances of Board Members;

iv) Ability to bring convergence in case of divergent views and conflict of interest situation tabled

Board Meetings;

IV. Evaluation Outcome

The evaluation revealed that the timely sharing of information with the Board, the drafting of agenda notes and their content, as well as the drafting of the minutes, were all deemed to be satisfactory. The way the business issues of the company were handled satisfied every Board Member.

21. COMMITTEES OF THE BOARD OF DIRECTORS

Your Company has following Committees of Board of Directors:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders Relationship Committee;

4. Corporate Social Responsibility Committee; and

5. Committee of Board of Directors

The role and composition of these Committees, including the number of meetings held during the period under review and the related attendance, are provided under Corporate Governance Report which forms part of the Annual Report.

22. MATERIAL CHANGES

The material changes made as on the date of this report are as mentioned hereinbelow:

i. A wholly-owned subsidiary of the Company under name and style as Techbec Green Energy Private Limited ("TGEPL") vide CIN: U27201DL2023PTC417728 was incorporated on 27th July, 2023.

ii. The Company had entered into a share purchase Agreement on Friday, 28th July 2023 with M/s Tamrag Green Solutions (India) Private Limited to sell and transfer the entire equity shares held by the Company in Techbec Global Solutions Private Limited (a subsidiary). Pursuant to the completion and transfer of shares, Techbec Global Solutions Private Limited ceased to be the subsidiary of the Company.

iii. The share price of the Company has appreciated significantly since the stock split held on 3 rd February, 2023 and with a view to encourage wider participation and to make it more affordable, the Company did second Stock Split with effect from 28th July, 2023. The Company has sub-divided the Authorized Capital into Rs. 220000000 (Rupees Twenty Two Crores), divided into 22,00,00,000 (Twenty Crores) equity shares with a face value of Rs. 1/- (Rupees One Only) from Rs 220000000 (Rupees Twenty Two Crores), divided into 11,00,00,000 (Eleven Crores) equity shares with a face value of Rs. 2/- (Rupees Two Only).

Further the issued, subscribed, and paid-up equity share capital has changed to Rs. 21,26,54,290 divided into 212654290 equity shares, each of Rs. 1/- (Rupees One each) each from Rs. 21,26,54,290 divided into 106327145 equity shares of Rs. 2/- (Rupees Two only) each subsequent to the stock split.

23. RELATED PARTY TRANSACTIONS

All transactions entered into with Related Parties as defined under Section 2(76) of the Companies Act, 2013 and Regulation 23 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, ("Listing Regulations"), during the Financial Year under review were in the ordinary course of business and at an arms length pricing basis and do not attract the provisions of Section 188 of the Companies Act, 2013. There were no transactions with related parties in the Financial Year which were in conflict with the interest of the Company and requiring compliance of the provisions of Regulation 23 of the Listing Regulations.

Suitable disclosure as required by the Indian Accounting Standards (Ind AS 24) are mentioned in the Notes which forms integral part of the Financial Statements.

The Company has formulated a policy on the materiality of Related Party Transactions and dealing with Related Party Transactions which has been uploaded on the website of the Company and can be accessed at https://www.servotech. in/img/investor/Related-Party-Transaction-policy.pdf.

The particulars of related party transactions in prescribed Form AOC-2 are attached as "Annexure-2".

Pursuant to Regulation 23(9) of the Listing Regulations, your Company has filed half yearly report on Related Party Transactions with the stock exchanges.

24. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has adequate internal financial control procedures commensurate with its size and nature of business.

The Company has appointed Internal Auditors who periodically audit the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements.

The Audit Committee of the Board of Directors approves the annual internal audit plan and periodically reviews the progress of audits as per approved audit plans along with critical internal audit findings presented by internal auditors, status of implementation of audit recommendations, if any, and adequacy of internal controls.

The detailed statement about adequacy of Internal Financial Controls is given in Point No. 11 of the Management Discussion and Analysis Report, which forms an integral part of this Annual Report.

25. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company and its future operations.

26. CORPORATE SOCIAL RESPONSIBILITY

The Company does not fall in any of the criteria of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and hence, the Company is not required to comply with the same.

However, a Committee has been constituted to guide the Company in undertaking CSR activities in a focused and structured manner and review CSR Policy from time to time. The Companys CSR policy is placed on the Companys website at weblink: https://www.servotech.in/investors/ corporate-governance/policies

27. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO AND RESEARCH & DEVELOPMENT

In accordance with the requirements of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014, a statement showing particulars with respect to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is annexed hereto as Annexure-3 and forms part of this report.

28. VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy and has established the necessary vigil mechanism for its employees and Directors to report concerns about any unethical and improper activity. No person has been denied access to the Chairman of the Audit Committee. The Whistle Blower policy is uploaded on the website of the Company at https://www. servotech.in/img/investor/Whistle-Blower-Policy.pdf.

The Audit Committee monitors and reviews the investigations of the whistle blower complaints. During the year under review, no complaints were received under Whistle Blower Policy

29. EXTRACT OF ANNUAL RETURN

The Annual Return of the Company as on 31st March, 2023 is available on the website of the Company and can be accessed at https://www.servotech.in/blog/wp-content/ uploads/2023/09/Annual-Return-MGT-7.pdf

30. SECRETARIAL STANDARDS

The Company complies with all applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

31. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act, are given in the notes to the Financial Statements.

32. PARTICULARS OF EMPLOYEES

The details required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of Directors, KMPs and other employees of the Company, are given in Annexure-4 of this Boards Report.

During the year ended 31st March, 2023, the Company did not have any employee, who is in receipt of remuneration of Rs. 8,50,000/- per month or Rs. 1,02,00,000 per annum and hence the Company is not required to provide information under Sub rule 2 and 3 of Rule 5 of the companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

However, in terms of first provision of section 136(1) of the Act, the Annual Report and Accounts are being sent to the members and others entitled thereto, excluding the aforesaid information. The said information is available for inspection by the members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary at email id investor.relations@servotechindia.com.

33. NOMINATION AND REMUENRATION POLICY

The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall:

i) formulate the criteria for Board membership, including the appropriate mix of Executive & Non-Executive Directors and Board Diversity;

ii) approve and recommend compensation packages and policies for Directors, Key Managerial Personnel and Senior Management Personnel;

iii) lay down the effective manner of performance evaluation of the Board, its Committees and the Directors; and

iv) such other matters as provided under section 178 of the Act and under the provisions of Listing Regulations. The salient features of the Nomination and Remuneration Policy of the Company are outlined in the Corporate Governance Report which forms part of this Annual Report. The Policy is available on the website of the Company at: https://www.servotech.in/img/investor/Nomination-and-Remuneration-policy.pdf.

34. RISK MANAGEMENT POLICY

Your Company has in place comprehensive risk assessment and mitigation framework, which is reviewed by the Board periodically. The Committee of Board of Directors has formulated a well-defined Policy for Risk Management to identify, assess and frame a response to threats and mitigate the various risks to our business that affects the achievement of our objectives. More details on the Policy are given on Companys website which can be accessed through following link: https://www. servotech.in/img/investor/Risk-Management-Policy.pdf

35. DISCLOSURE UNDER SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

As per the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and rules made thereunder, your Company has constituted Internal Complaints Committees (ICs) at all relevant locations across India to consider and resolve the complaints related to sexual harassment. The ICs includes external members with relevant experience. The ICs, presided by senior women conduct the investigations and make decisions at the respective locations. The ICs also work extensively on creating awareness on relevance of sexual harassment issues, including while working remotely. During the year under review, there were no complaints pertaining to sexual harassment.

All new employees go through a detailed personal orientation on anti-sexual harassment policy adopted by the Company.

36. FRAUD REPORTING

There was no fraud reported during the Financial Year ended 31st March, 2023.

37. LISTING OF EQUITY SHARES

The equity shares of your Company are listed on National Stock Exchange of India Limited ("NSE") Main Board. The Annual Listing Fees for the year 2022-23 has been duly paid to the NSE.

38. DEPOSITORY SYSTEM

The Members are requested to note that as on 31st March, 2023, 99% of the Companys total paid-up share capital representing 10,62,45,095 shares are in dematerialized form. In view of the numerous advantages offered by the Depository System as well as to avoid frauds, members holding shares in physical mode are advised to avail of the facility of dematerialization from National Securities Depository Limited ("NSDL") and Central Depository Services (India) Limited ("CDSL").

39. HEALTH, SAFETY AND ENVIRONMENT

Your Company has complied with all the applicable Health & Safety Standards, Environment Laws and Labor laws and has been taking all necessary measures to protect the environment and provide workers a safe work environment. Your Company is committed towards improvement in Health & Safety as well as Environmental performance by providing a Safe & healthy work environment to all its employees and co-workers.

40. HUMAN RESOURCE AND INDUSTRIAL RELATIONS

At Servotech, employees are its prime assets and a vital key to its success. The company is committed to creating a professional culture to nurture and enable people to grow in their careers alongside Companys success. The company constantly strives to strengthen its manpower in alignment with the business needs and continue to engage them through various initiatives in the realm of learning & development opportunities, reward & recognition, employee engagement activities and career growth.

41. ACKNOWLEDGMENTS

Your Directors would like to thank all the stakeholders viz. consumers, shareholders, dealers, suppliers, business partners, bankers, employees and all other business associates for the continuous support given by them to the Company and its Management.

FOR AND ON BEHALF OF BOARD OF DIRECTORS

RAMAN BHATIA SARIKA BHATIA
DATE: 28.08.2023 MANAGING DIRECTOR WHOLE-TIME DIRECTOR
PLACE: New Delhi DIN- 00153827 DIN- 00155602