Dear Shareholders,

Your Directors have the pleasure in presenting their 03rd Annual Report on the business and operations of the Company and the Audited Financial Statements for the financial year ended March 31, 2024

1. Performance Highlights (Standalone)

Your Company has performed during the reporting period as follows: 7 in Lakhs except earning per share

Performance Highlights (consolidated)

Your Company has performed during the reporting period as follows: 7 in Lakhs except earning per share

2. Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profits for the Financial Year 2023-24 in the Profit and Loss Account.

3. Changes to the Capital Structure during the year under review

The paid-up equity shares capital of the Company as of 31st March 2024 consists of 1,66,00,000 equity shares of Rs. 10 each. The company has not made any allotment of shares during the year under review.

4. Dividend

The Company has given a dividend of Rs. 1.00/- per share during the period under review as final dividend for FY 2022 - 2023. Further Company has recommended a final dividend for year 2023 - 2024 which is subject to approval by shareholders in the ensuing annual general meeting.

Transfer of unclaimed dividend to Investor Education and Protection Fund:

There is no amount which is required to be transferred to the Investor Education and Protection Fund as per the provisions of Section 125(2) of the Act.

5. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo:

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of the conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review.

Your company has taken steps to conserve energy. Steps have been taken to identify the areas of excessive energy consumption. Checks have been made to strengthen these areas and timely preventive maintenance has also been carried out to conserve energy.

Conservation of energy:

The Company has introduced various measures to reduce energy consumption and install the latest technologies. Total energy consumption during the year

Foreign Exchange Earnings and Outgo:

6. Subsidiaries, Joint Ventures, and Associates

The Company has subsidiaries or joint ventures or associates during the year under review, further Annexure - A is attached with report for further details.

7. Significant Events After Balance Sheet Date

There are no other significant events after the Balance Sheet date which require any disclosure.

8. Change in the nature of business

There has been no change in the Company's business nature in the period under review.

9. Material and Significant Orders Passed by Regulators & Courts

No significant or material orders have been passed by any Regulators or Courts or Tribunals which could impact the going concern status of the Company and/or its future operations.

10. Internal Financial Control Systems

The Company has aligned its current system of Internal Financial Controls with the requirements of the Companies Act, 2013. Internal Control Systems are intended to increase transparency and accountability in an organization's process of designing and implementing a system of internal control. The framework requires a Company to identify and analyze risks and manage appropriate responses. The Company has successfully laid down the framework and ensured its effectiveness. The Company's internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance about recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization, and ensuring compliance with corporate policies.

Your management assessed the effectiveness of the Company's internal controls over financial reporting as of March 31, 2024. The assessment involved a management review, internal audit, and statutory audit. During the year under review, the internal audit was conducted based on the risk-based internal audit plan approved by the Audit Committee. Significant audit observations and follow-up actions thereon were reported to the Audit Committee. Under Section 143 of the Act.

11. Public Deposits

Your Company has not invited or accepted any deposits from the public/members and there are no outstanding deposits as on March 31, 2024.

12. Auditors, Auditors' Qualifications, Reservations, Adverse Remarks in the Auditors' Report

Pursuant to the recommendation of the Audit Committee, the Board of Directors and Members of the Company, at their respective meetings held and had approved the appointment of M/s. DIPAK P. SHAH & Co., Chartered Accountants as the Statutory Auditors of the Company for a term of 5 (five) consecutive years ("First Term") commencing from the Financial Year 2021 - 2022.

The Statutory Auditors Report does contain qualification or adverse remark, clarification or explanation of the Board & remark as follows.

Remark:

SKP Bearing industries Limited has a total unpaid dividend of Rs. 49648/- for FY 21-22 & 22-23 due to the lack of those particular shareholders information and technical issue The company put all the efforts to pay that dividend in time but even after all efforts made, lack of information remain same, and the company has not transferred that amount to Unpaid Dividend account as per relevant section of Companies act 2013.

Board's Comment:

As per the information received by the Company's banker (HDFC Bank), if the dividend remains unpaid due to any error or omission of information of shareholders or their bank details, the dividend account of the respective F.Y. with the Bank will automatically convert by the bank into the Unpaid Dividend Account within the stipulated time, the same information was received to the company after the remark of the auditor at time of half yearly result dated 31.03.2024. According to this the board here clarify that the Company has not violated any provisions under the Companies Act 2013 regarding Unpaid Dividend account.

Internal Auditor:

Pursuant to the provisions of Section 138 of the Act and the Companies (Accounts) Rules, 2014, and based on the recommendation of the Audit Committee, your Directors have appointed Paresh Parekh & Co. Chartered Accountants, as the Internal Auditor of the Company for

the Financial Year 2024-25. A.J. PANCHAL & Associates Chartered Accountants has resigned from the post of Internal Auditor.

13. Corporate Social Responsibility

The CSR activities by the Company were undertaken through SHRI FOUNDATION, which is committed towards undertaking CSR activities. The composition of the CSR Committee of the Company, in accordance with Section 135 of the Act is not applicable to the Company.

A detailed report on CSR activities in line with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time, is attached as Annexure B to this report.

14. Annual Return

Under Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as of March 31, 2024, is available on the Company's website www.skpbearings.com

15. Declaration given by Independent Directors

Pursuant to sub-section (7) of Section 149 of the Act, the Company has received declarations from all the Independent Directors on Board that they meet the criteria of independence laid down in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations, and that there was no change.

16. Annual Board Evaluation

The Nomination, Remuneration and Compensation Committee ("NRC Committee") and the Board have adopted a methodology for carrying out the performance evaluation of the Board, Committees, Independent Directors and Non- Independent Directors of the Company, which includes the criteria, manner and process for carrying out the performance evaluation exercise. Criteria in this respect includes; the Board composition and structure, effectiveness of board processes, information and functioning, contribution of the individual director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc. Evaluation of the Performances of the Board, its Committees, every Director and Chairman, for the financial year 2023-24 has been completed as per the adopted methodology which included review, discussions, providing feedback and discussions on the feedback received from the individual directors.

17. Details of Directors and Key Managerial Personnel Appointed/Resigned during the year

There were change in Directors and Key Managerial Personnel Appointed/Resigned during the year are as follows:

• At the 02^nd Annual General Meeting of the Company held on August 25, 2023, Re-appointment of Mr. Shrinand Kamlakar Palshikar (DIN: 08992832) as the Executive Director of the Company, along with the overall maximum remuneration payable to him

18. Number of Meetings of the Board of Directors

During the year under review, 8 (Eight) Board Meetings were held, and the gap between the two Board Meetings was well within the limit as prescribed by the Companies Act, 2013. In respect of the meetings, proper notice was given and the proceedings were recorded and a signed Minutes Book was maintained for the purpose.

19. Vigil Mechanism/Whistle Blower Policy for Directors and Employees

The Company has established a Vigil Mechanism, which includes a Whistle Blower Policy, for its Directors and Employees, to provide a framework to facilitate responsible and secure reporting of concerns of unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct & Ethics. The details of establishment of Vigil Mechanism/ Whistle Blower policy are posted on the website of the Company and the web link to the same is https://www.skpbearings.com/pdf/ corporate-policies/Vigil_Mechanism_Whistler_Blower_ Policy.pdf

20. Audit Committee

Audit Committee of the Board is duly constituted in accordance with the provisions of Section 177 (8) of the Act read with Rule 6 of the Companies (Meetings of the Board and its Powers) Rules, 2014 and Regulation 18 of the Listing Regulations. The details of its composition & meetings held during the Financial Year 2023- 2024 etc. below. All recommendations made by the Audit Committee were accepted by the Board during the Financial Year 2023-24. During the year under review, there are 3 audit committee meetings held.

The Audit Committee comprises of 3 members, 2 of whom are independent directors:

21. Nomination and Remuneration Policies

The Board of Directors has formulated a Policy that lays down a framework for selection and appointment of Directors and Senior Management and for determining qualifications, positive attributes, and independence of Directors.

The Board has also formulated a Policy relating to the remuneration of Directors, members of Senior Management, and Key Managerial Personnel which is posted on the Companies website at: https://www.skpbearings.com/pdf/corporate- policies/Nomination_and_Remuneration_Policy.pdf

22. Particulars of Loans, Guarantees or Investments

The particulars of loans, guarantees and investments if any as per Section 186 of the Act by the Company, have been disclosed in the financial statements.

23. Related Party Transactions

During the reporting period, the Company has entered into contract/ arrangement/transaction with related parties which were [on arm's length basis or which could be considered material in accordance with the policy of the Company on materiality of related party transactions. Accordingly, the disclosure of Related Party Transactions as required under Section 134 (3) (h) of the Companies Act, 2013 in Form AOC 2 is annexed hereto as Annexure C.

a. Remuneration to Directors and Key Managerial Personnel

Details of the remuneration approved by the NRC Committee as well as the Board of Directors for Executive Directors for the Financial Year 2023-24:

b. Employee Particulars

People are our most valuable asset and your Company places the engagement, development and retention of talent as its highest priority, to enable the achievement of the organizational vision, further there are no employees who have remuneration in excess of the remuneration stated in Section 197 of the Companies Act, 2013.

25. Reporting of Fraud

The Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Companies Act, 2013.

26. Secretarial Audit Report

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Rules made thereunder, the Company has appointed Mr. JAY A. GOHIL, Practicing Company Secretary as the Secretarial Auditor of the Company. The Secretarial Audit Report is annexed to the Board's Report and forms an integral part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark except The Board and management after consent and duly review of audit committee considered the accounts for a period beginning from 01.04.2023 to ending on 31.03.2024 in an audit committee meeting.

27. Risk Management Policy

The Company has a robust Risk Management framework to identify measure and mitigate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objective and enhance the Company's competitive advantage. This risk framework thus helps in managing market, credit and operations risks and quantifies exposure and potential impact at a Company level.

28. Director's Responsibility Statement

Your Directors state that:

a. in the preparation of the annual financial statements for the year ended March 31, 2024, the applicable accounting standards have been followed with no 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 as at March 31, 2024 and of the profit of the Company for the period ended on that date;

c. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the Directors have prepared the annual financial statements on a going concern basis;

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

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

29. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace

The Company has a policy against sexual harassment at the workplace and has constituted an Internal Complaints Committee and has complied with the provisions in this respect as are applicable under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013. There was no complaint received from any employee during the year, nor is any complaint pending or outstanding for redressal as on March 31, 2024. The Company conducts awareness programs at regular intervals and provides necessary updates/guidance.

30. Cost Audit

The Company is not required to appoint a cost auditor to conduct the cost audit in respect of the products manufactured by the Company as per the provisions of Section 148 of the Companies Act, 2013 for the period under review.

31. Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI)

Your Company complies with the mandatory Secretarial Standards issued by the ICSI.

32. Others

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the period under review:

1. Details relating to issue of equity shares including sweat equity shares and shares with differential rights as to dividend, voting or otherwise, since there was no such issue of shares.

2. None of the Directors of the Company received any remuneration or commission from any of its subsidiaries.

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

4. Your Directors further state that during the period under review, there were no cases filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

33. Acknowledgements

Your Directors take this opportunity to thank the Company's customers, shareholders, vendors and bankers for their support and look forward to their continued support in the future. Your Directors also place on record their appreciation for the excellent contribution made by all employees who are committed to strong work ethics, excellence in performance and commendable teamwork and have thrived in a challenging environment.