Your Directors feel pleasure to present the 40^th ANNUAL REPORT together with the Audited Financial Statements for the Financial Year 2023-24 ended on 31^st March, 2024.

1. FINANCIAL RESULTS:

(' in lakh)

There are no material changes and commitment affecting the financial position of the Company which have occurred between 1^st April, 2024 and date of this report.

2. DIVIDEND:

The Board of Directors is pleased to recommend for your approval a final dividend of Re. 1/- per equity share on the face value of Rs.10/- each for the year ended 31^st March, 2024 (previous year Re. 1/- per equity share). The total final dividend amounts to Rs. 48,88,300/- You are requested to approve the same. The final dividend, if declared, shall be payable subject to deduction of tax at source, as applicable.

3. REVIEW OF OPERATIONS:

The revenue from operations during the year under review was Rs. 17555.83 Lakhs as compared to Rs. 16433.48 Lakhs during 2022-23.

The Operating Profit (Before Interest and Depreciation) was Rs. 1135.55 Lakh during the year under review compared to Rs. 944.85 Lakh during 2022-23. The Profit before Tax for the year under review was Rs. 414.67 Lakh against Rs 459.23 Lakh during 2022-23. The Net Profit of the Company stood at Rs. 302.50 Lakh compared to Rs. 347.26 Lakh for the year 2022-23.

The Company has made export at FOB value of Rs. 6991.57 Lakhs during the year under review compared to Rs. 5576.90 Lakhs during 2022-23. The management is of the firm opinion that during the current year, the export market will improve and in turn, the exports of the Company will increase to a greater extent.

4. RECOGNITION AS EXPORT HOUSE:

The Director General of Foreign Trade, on the basis of Export performance of the Company, has accorded / recognised the Company as Two Star Export House.

5. FINANCE:

The Company is enjoying Financial Assistance in the form of term loans and working capital facilities from State Bank of India.

6. LISTING:

The Equity Shares of the Company are listed on BSE Limited. The Company is regular in payment of Annual Listing Fees. The Company has paid Listing fees up to the year 2024-25.

7. SHARE CAPITAL:

The paid-up Share Capital of the Company as on 31^st March, 2024 was Rs. 488.83 Lakhs. As on 31^st March, 2024, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity and none of the Directors of the Company hold any convertible instruments.

8. RESERVES:

Your Company does not propose to transfer any amount to general reserve.

9. DIRECTORS & KMP:

9.1 One of your Directors viz. Mr. Ashok Chhajer (DIN: 00280185) retires by rotation in terms of the Articles of Association of the Company. However, being eligible offers himself for reappointment.

9.2 The Board, based on the recommendations of the Nomination and Remuneration Committee, has appointed Ms. Anal R. Desai (DIN: 02636329) as Independent Director (Non Executive) of the Company for a term of 5 consecutive years w.e.f. 1^st September, 2024, subject to the approval of the members/shareholders of the Company.

9.3 Brief profile of the Directors being appointed /re-appointed as required under Regulation 36(3) of Listing Regulations, 2015 and Secretarial Standard on General Meetings are provided in the Notice for the forthcoming AGM of the Company.

9.4 The Shareholders in their 39^th Annual General Meeting held on 16^th September, 2023 has Reappointed Mr. Ashok Chhajer (DIN: 00280185) as Managing Director for a period of 3 years with effect from 1^st October, 2023.

9.5 The Board of Directors duly met 6 times during the financial year under review.

9.6 The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 (the Act) that they meet with the criteria of their independence laid down in Section 149(6) of the Act. The Independent Director shall enroll his / her name in the Databank, being maintained by Indian Institute of Corporate Affairs to qualify as an Independent Director. The enrollment of Independent Directors has been completed and they have furnished the declaration affirming their compliance to the Board with the provisions contained under sub rule 1 & 2 of Rule 6 of Companies (Appointment & Qualification of Directors) Rules.

9.7 In terms of provisions of Section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment & Qualification of Directors) Amendment Rules, 2019 the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs, Manesar (‘IICA').

9.8 Formal Annual Evaluation:

The Nomination and Remuneration Committee adopted a formal mechanism for evaluating the performance of the Board of Directors as well as that of its Committees and individual Directors, including Chairman of the Board, Key Managerial Personnel/ Senior Management etc. The exercise was carried out through an evaluation process covering aspects such as composition of the Board, experience, competencies, governance issues etc.

9.9 DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134 of the Companies Act, 2013, it is hereby confirmed:

(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at 31^st March, 2024 being end of the financial year 2023-24 and of the profit of the Company for the year;

(iii) that the Directors had taken proper and sufficient care for 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;

(iv) that the Directors had prepared the annual accounts on a going concern basis.

(v) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

9.10 With respect to the loans advanced by the Directors to the Company, the Company has received necessary declarations from Directors that the said loan is not given out of funds acquired by them by borrowing or accepting loans or deposits from others.

10. INTERNAL FINANCIAL CONTROL AND ITS ADEQUACY:

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures.

11. MANAGERIAL REMUNERATION:

REMUNERATION OF DIRECTORS:

The Board of Directors has framed a Remuneration Policy that assures the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors, Key Managerial Personnel and Senior Management to enhance the quality required to run the Company successfully. All the Board Members and Senior Management personnel have affirmed time to time implementation of the said Remuneration policy.

The Nomination and Remuneration Policy are available on the Company's website-www.guiaratcraft.com.

12. KEY MANAGERIAL PERSONNEL:

% INCREASE IN REMUNERATION OF DIRECTORS & KMP:

13. PERSONNEL AND H. R. D.:

13.1 INDUSTRIAL RELATIONS:

The industrial relations continued to remain cordial and peaceful and your Company continued to give ever increasing importance to training at all levels and other aspects of H. R. D.

The Number of permanent Employees of the Company are One Seventy Eight. The relationship between average increase in remuneration and Company's performance is as per the appropriate performance benchmarks and reflects short and long term performance objectives appropriate to the working of the Company and its goals.

13.2 PARTICULARS OF EMPLOYEES:

There is no Employee drawing remuneration requiring disclosure under Rule 5(2) of Companies Appointment & Remuneration of Managerial personnel) Rules, 2014.

14. RELATED PARTY TRANSACTION AND DETAILS OF LOANS, GUARANTEES, INVESTMENT & SECURITIES PROVIDED:

Details of Related Party Transactions and Details of Loans, Guarantees and Investments covered under the provisions of Section 188 and 186 of the Companies Act, 2013 respectively are given in the notes to the Financial Statements attached to the Directors' Report.

All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. During the year, the Company had not entered into any transactions with related parties which could be considered as material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at www.guiaratcraft.com.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information required under Section 134(3)(m) of the Companies Act, 2013 and rule 8(3) of Companies (Accounts) Rules, 2014, relating to the conservation of Energy and Technology Absorption forms part of this report and is given by way of Annexure - A.

16. CORPORATE GOVERNANCE AND MDA:

As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Report on Corporate Governance and Management Discussion and Analysis (MDA) and a certificate regarding compliance with the conditions of Corporate Governance are appended to the Annual Report as Annexure - B.

17. SECRETARIAL AUDIT REPORT:

Your Company has obtained Secretarial Audit Report as required under Section 204(1) of the Companies Act, 2013 from M/s. Nishant Pandya & Associates, Company Secretaries, Ahmedabad. The said Report is attached with this Report as Annexure - D.

The remarks of auditors and notes on accounts are self explanatory.

18. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Board of Directors has constituted a Corporate Social Responsibility (“CSR”) Committee in terms of the provisions of Section 135 of the Companies Act, 2013 consisting of three Directors viz. Mr. Ashok Chhajer, as Chairman of the Committee, Mr. Rishab Chhajer and Mr. Kashyap R. Mehta, as members of the Committee.

Corporate Social Responsibility Committee has formulated and recommended to the Board, a Corporate Social Responsibility Policy (CSR Policy) in accordance with the provisions of Section 135 of Companies Act, 2013 and Schedule VII thereto indicating the activities which can be undertaken by the Company. This Policy has been approved by the Board. The CSR Policy is available on the Company's website at www.gujaratcraft.com.

Some of the core areas identified by the Committee are Education, Health, Environment, women empowerment, Animal Welfare, Hunger etc.

In respect of ongoing projects, the Company had transferred unspent Corporate Social Responsibility (CSR) amount of Rs. 12.00 lakh as at the end of the previous financial year 2022-23, to a special account on 03/04/2023 within a period of thirty days from the end of the financial year 2022-23 in compliance with the provisions of sub-section (6) of Section 135 of the Act.

During the financial year 2023-24, the Company spent Rs.10 lakh towards the ongoing project.

As per Rule 8(1) of Companies (Corporate Social Responsibility Policy) Rules, 2014 the Annual Report on CSR Activities has been attached herewith as Annexure - E.

19. WEB ADDRESS OF ANNUAL RETURN:

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the draft Annual Return as on 31^st March, 2024 is available on the website of the Company and can be accessed at www.gujaratcraft.com.

20. AUDIT COMMITTEE/ NOMINATION AND REMUNERATION COMMITTEE/ STAKEHOLDERS’ RELATIONSHIP COMMITTEE:

The details of various committees as on the date of this report and their functions are part of Corporate Governance Report.

Further, the Board of Directors in their meeting held on 22^nd July, 2024 has:

- Reconstituted the Audit Committee of the Company w.e.f. 1^st September, 2024 comprising of Ms. Anal R. Desai@, Mr. Hitendra Chopra & Mr. Rishab Chhajer as members.

- Reconstituted the Nomination & Remuneration Committee of the Company w.e.f. 1^st September, 2024 comprising of Ms. Anal R. Desai@, Mr. Hitendra Chopra & Ms. Swati Pipara as members.

- Reconstituted the Stakeholders Relationship Committee of the Company w.e.f. 1^st September, 2024 comprising of Ms. Anal R. Desai@, Mr. Rishab Chhajer & Mr. Ashok Chhajer as members.

@Appointed as Independent Director of Company w.e.f 1^st September, 2024.

21. DEMATERIALISATION OF EQUITY SHARES:

Shareholders have an option to dematerialise their shares with either of the depositories viz. NSDL & CDSL. ISIN for Equity Shares of the Company is: INE372D01019.

22. INSIDER TRADING POLICY:

As required under the Insider Trading Policy Regulations of SEBI, your Directors have framed and approved Insider Trading Policy for the Company i.e. ‘Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information' and ‘Code of Conduct for Regulating Monitoring and Reporting of Trading by Designated Persons/Insiders'. The Policy is available on the company's website.

23. GENERAL:

23.1. STATUTORY AUDITORS:

At the 38^th Annual General Meeting held on 21^st September, 2022, M/s. Kantilal Patel & Co., Chartered Accountants, Ahmedabad was appointed as Statutory Auditors of the Company to hold office for the period of 5 years i.e. for the financial years 2022-23 to 2026-27.

The Auditors' Report for fiscal 2024 does not contain any qualification, reservation or adverse remarks. The Report is enclosed with the financial statements in this Annual Report.

23.2 INSURANCE:

The movable and immovable properties of the Company including Plant and Machinery and stocks wherever necessary and to the extent required have been adequately insured against the risks of fire, riot, strike, malicious damage etc.

23.3 FIXED DEPOSITS:

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

23.4 RISKS MANAGEMENT POLICY:

The Company has a risk management policy, which from time to time, is reviewed by the Audit Committee of Directors as well as by the Board of Directors. The Policy is reviewed quarterly by assessing the threats and opportunities that will impact the objectives set for the Company as a whole. The Policy is designed to provide the categorization of risk into threat and its cause, impact, treatment and control measures. As part of the Risk Management policy, the relevant parameters for protection of environment, safety of operations and health of people at work are monitored regularly with reference to statutory regulations and guidelines defined by the Company.

23.5 SUBSIDIARIES/ ASSOCIATES/ JVS:

The Company does not have any Subsidiary/ Associate Company / JV.

23.6 CODE OF CONDUCT:

The Board of Directors has laid down a Code of Conduct applicable to the Board of Directors and Senior Management. All the Board Members and Senior Management personnel have affirmed compliance with the code of conduct.

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

There has been no significant and material orders passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

23.8 ENVIRONMENT AND SAFETY:

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

23.9 DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy, in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, the Company did not receive any complaint.

23.10 INSTANCES OF FRAUD, IF ANY REPORTED BY THE AUDITORS:

There have been no instances of fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

23.11 SECRETARIAL STANDARDS:

The Company complies with the Secretarial Standards, issued by the Institute of Company Secretaries of India, which are mandatorily applicable to the Company.

23.12 DETAILS OF PROCEEDINGS UNDER IBC & OTS, IF ANY:

There is no proceeding pending under the Insolvency and Bankruptcy Code, 2016. Further, there was no instance of one time settlement with any Bank or Financial Institution.

24. AGREEMENTS EFFECTING THE CONTROL OF THE COMPANY:

No agreements have been entered / executed by the parties as mentioned under clause 5A of paragraph A of Part A of Schedule III of SEBI (Listing Obligation and Disclosures Requirements) Regulations, 2015 which, either directly or indirectly effect / impact the Management or Control of the Company or impose any restriction or create any liability upon the Company.

25. DISCLOSURE OF ACCOUNTING TREATMENT:

In the preparation of the financial statements, the Company has followed the Accounting Standards referred to in Section 133 of the Companies Act, 2013. The significant accounting policies which are consistently applied are set out in the Notes to the Financial Statements.

26. ACKNOWLEDGMENT:

Your Directors express their sincere gratitude for the assistance and co operation extended by Financial Institutions, Banks, Government Authorities, Shareholders, Suppliers and Customers.

Your Directors also wish to place on record their appreciation of the contribution made by the employees at their levels towards achievements of the Company's goals.

Registered Office For and on behalf of the Board,

Plot No. 431, Santej Vadsar Road,

Village: Santej, Taluka: Kalol

CIN : L25111GJ1984PLC007130 Ashok Chhajer

Dist: Gandhinagar - 382721 Chairman & Managing Director

Date :22^nd July, 2024 DIN: 00280185