Dear Members,

The Board of Directors is pleased to present the 28^th Annual Report on the business and operations of the company along with Company's Audited Financial Statements for the financial year ended March 31, 2023.

The Financial Summary:

- (Rs. In Lacs)

•Consolidated Financial Performance

During the year, your Company has registered sales and other income ^ 97,093.62 Lacs as compared to ^ 1,18,467.65 Lacs of previous year. Company was able to register a domestic sale of ^ 71,080.32 Lacs and export sale of ^ 23,254.06 Lacs in the current year. Your Company has profit for the year of ^ 2855.42 Lacs in comparison to ^ 6659.83 Lacs in previous year.

•Standalone Financial Performance

During the year under review, the company has achieved Standalone total revenue from operation of ^ 93,026.57 Lacs as compared to ^ 1,13,469.09 Lacs of previous year. Your Company has profit for the year of ^ 2411.22 Lacs in comparison to ^ 5531.18 Lacs in previous year.

As at 31^st March, 2023, the Authorized share capital of the Company is ^ 40,00,00,000. There is no change in the authorized share capital of the company.

As at 31^st March, 2023, the paid up Equity Share Capital of the Company was ^ 18,38,01,560/- consisting of 1,83,80,156 equity shares of ^ 10/- each. The Company has not allotted any shares during the year.

Based on the Company's performance, the Board of directors has recommended a dividend of 20% i.e. ^ 2/- per equity share of ^ 10/- each for the financial year ended March 31, 2023 which if approved at the forthcoming Annual General Meeting (“AGM”), will be paid to all those equity shareholders of the Company whose names appear in the Register of Members and whose names appear as beneficial owners as per the beneficiary list furnished for the purpose by National Securities Depository Limited and Central Depository Services (India) Limited. The total dividend pay-out will amount to approx. ^ 3.68 Crore.

The dividend recommended is in line with the dividend distribution policy of the Company and the policy is available on the website of the Company at https://www.shaktipumps.com.

The Company has not transferred any amount to the General Reserves for the year March 31, 2023 and all profits have been transfer to surplus fund of the Company.

Interest coverage ratio has dropped because of accounting impact of I nd AS 116.

There were significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in all the key financial ratios except Debtors turnover, Current ratio.

Return on Net worth (RONW) is a measure of profitability of a Company expressed in percentage. It is calculated by dividing total comprehensive income for the year by average capital employed during the year.

Return on Capital Employed (ROCE) is a financial ratio that measures a Company's profitability and the efficiency with which its capital is used. In other words, the ratio measures how well a Company is generating profits from its capital. It is calculated by dividing profit before exceptional items and tax by average capital employed during the year.

Earnings Per Share (EPS) is the portion of a Company's profit allocated to each share. It serves as an indicator of a Company's profitability. It is calculated by dividing Profit for the year by Weighted average number of shares outstanding during the year.

The above ratio is used to quantify a Company's effectiveness in collecting its receivables or money owed by customers. The ratio shows how well a Company uses and manages the credit it extends to customers and how quickly that short-term debt is collected or is paid. It is calculated by dividing turnover by average trade receivables.

Inventory Turnover is the number of times a Company sells and replaces its inventory during a period. It is calculated by dividing turnover by average inventory.

The Interest Coverage Ratio measures how many times a Company can cover its current interest payment with its available earnings. It is calculated by dividing PBIT by finance cost.

The Current Ratio is a liquidity ratio that measures a Company's ability to pay short-term obligations or those due within one year. It is calculated by dividing the current assets by current liabilities.

The ratio is used to evaluate a Company's financial leverage. It is a measure of the degree to which a Company is financing its operations through debt versus wholly owned funds. It is calculated by dividing a Company's total liabilities by its shareholder's equity.

Operating Profit Margin is profitability or performance ratio used to calculate the percentage of profit a Company produces from its operations. It is calculated by dividing the EBIT by turnover.

The net profit margin is equal to how much net income or profit is generated as a percentage of revenue. It is calculated by dividing the profit for the year by turnover.

As on March 31, 2023, our Company has 6 Subsidiaries (out of which 5 are wholly owned subsidiaries).

Following are the Subsidiaries of the company: -

1. Shakti Pumps USA, LLC

2. Shakti Pumps FZE, UAE

3. Shakti Pumps (Shanghai) Limited-China

4. Shakti Pumps (Bangladesh) Limited

5. Shakti Energy Solutions Private Limited

6. Shakti EV Mobility Private Limited (formerly known as Shakti Green Industries Private Limited)

There has been no material change in the nature of the Business of the Company and its Subsidiaries.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 (Act), a statement containing salient features of financial statements of Subsidiaries Companies in Form AOC-1 is attached as Annexure - I and forms part of Director Report.

The Consolidated Financial Statement of the Companies is prepared as per the Accounting IND-AS. Consolidated Financial Statement of the Company with its Subsidiaries have also been included as part of this Annual Report.

The Management Discussion and Analysis as required in terms of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is annexed to this Report.

The Company is committed to maintain the highest standards of corporate governance which has been fundamental to the business of our Company since its inception.

A separate report on Corporate Governance is provided together with a Certificate from the Secretarial Auditor of the Company regarding compliance of conditions of Corporate Governance. A Certificate of the MD and CFO of the Company, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed.

There have been no material changes and commitments which affect the financial position of the Company that have occurred between the end of the financial year to which the financial statements relate and the date of this report.

The Company has not accepted any deposit within the meaning of Sections 73 and 74 of the Companies Act, 2013 read together with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year 20222023.

The Company's Shares are listed as follows:-

The Company has made all the compliances of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 including payment of annual listing fees to the stock exchanges for the year 2023-2024.

Pursuant to the provisions of the Companies Act, 2013, the Company has framed its Corporate Social Responsibility (CSR) policy for the development of programs and projects for the benefit of weaker sections of the Society and the same has been approved by CSR Committee and the Board of Directors of the Company.

CSR policy has been uploaded on the Company's website at www.shaktipumps.com.

Pursuant to requirements under section 135 and rules made there under a Report on CSR activities and initiatives taken during the year in prescribed format is given in Annexure II which is annexed hereto and forms part of Director Report.

Pursuant to Section 134 of the Act, the Board of Directors confirms that: -

a) In the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and there are no material departures from the same;

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 and of the profits of the Company for that period;

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

d) The Directors have prepared the Annual Accounts on a ‘going concern' basis;

e) The Directors have laid down internal financial controls for the Company and such internal financial controls are adequate and are 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.

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the rules there under as amended from time to time, forms part of this report Annexure III.

There are no instances of employees who was in receipt of remuneration in excess of the limit prescribed in provisions of Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the rules made there under.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return of the Company in Form MGT-7 for FY 2022-23, is available on the Company's website at www.shaktipumps.com.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The Company has a consistent, structured and defined continuous process for identifying, assessing, deciding on responses to and reporting on critical ‘risks that matter'. The Risk Management framework of the Company essentially comprises of two elements i.e. the process to identify, prioritise and manage risks adopting the value-based driver tree approach and risk

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mitigation action plan. The Risk Management framework applies to all business units, functions, geographies and departments within the Company. It compliments and does not replace other existing programs, such as those relating to emission, quality and compliance matters. Composition, frequency and quorum of meetings of the Risk Management Committee constituted by the Board is in compliance with Regulation 21 of the Listing Regulations. Roles, responsibilities and functions of the Committee have been defined by the Board. Terms of reference of the Committee, details of meetings held and attendance thereat are mentioned in the Corporate Governance Report, which forms part of this Report.

The Company has a robust Internal Financial Control framework which is according to Section 134(5)(e) of the Companies Act, 2013. The Company's internal control systems are commensurate with the nature of its business, the size and complexity of its operations and such IFCs with reference to the Financial Statements are adequate. The Company has implemented robust processes to ensure that all IFCs are effectively working.

The Details of loans, guarantees or investments covered under the provision of Section 186 of the Companies Act, 2013 are given in the Note No. 5 to the Financial Statement.

All related party transactions which were entered during the Financial Year were in the ordinary course of business and on an arm's length basis. There were no materially significant related party transactions entered by the Company with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interests of the Company.

A statement of all related party transactions is presented before the Audit Committee on quarterly basis, specifying the nature and value of transactions. Since all the related party transactions entered during the financial year were on an arm's length basis and in the ordinary course of business, no details are required to be provided in Form AOC-2 as prescribed under Section 134(3) (h) of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.

In line with the requirements of the Companies Act, 2013 and SEBI Listing Regulation 2015, the Board has approved a Policy on Related Party Transactions which is also available on Company's website at www.shaktipumps.com.

As on March 31, 2023, the Company has six Directors comprising of three Executive Directors and three NonExecutive Directors out of which all are the Independent Directors. There is one independent women director. Detailed composition about the Board is disclosed in Corporate Governance Report. All Directors have submitted relevant declarations / disclosures as required under Act and Listing Regulations.

of the Company, retires by rotation at the ensuing Annual General Meeting pursuant to the provisions of Section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors), Rules 2014 and the Articles of Association of your Company and being eligible, has offered himself for re-appointment as the Director.

The Board of Directors has at their meeting held on 11th August, 2023, based on recommendation of Nomination and Remuneration Committee has approved the following:

1. Re-designation & Re-appointment of Mr. Dinesh Patidar (DIN: 00549552) from Managing Director to Chairman cum Whole Time Director of the Company for the period of 3 Years (subject to the approval of shareholders).

2. Re-designation & Re-appointment of Mr. Ramesh Patidar (DIN: 00931437) from Whole Time Director to Managing Director of the Company for the period of 3 Years (subject to the approval of shareholders).

In terms of Section 2(51) and Section 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Key Managerial Personnel of the Company are:

a) Mr. Ramesh Patidar:- Managing Director (DIN: 00931437) w.e.f. August 11, 2023

b) Mr. Dinesh Patidar:-Whole time Director (DIN: 00549552) w.e.f. August 11, 2023

c) Mr. Sunil Patidar: - Whole time Director (DIN: 02561763)

d) Mr. Dinesh Patel:- Chief Financial Officer

e) Mr. Ravi Patidar:- Company Secretary & Compliance Officer

Four meetings of the Board of Directors were held during the year. For details of the meetings held and the attendance of the Directors please refer to the Corporate Governance Report which forms part of this annual report.

The Company's policy is designed to attract, motivate and retain manpower in a competitive and international market. The policy reflects the Company's objectives for good corporate governance as well as sustained long-term value creation for shareholders. The Remuneration Policy applies to the Company's senior management including its Key Managerial Person and Board of Directors. The Nomination and Remuneration Policy for the members of Board and Executive Management is available on the Company's website:- www.shaktipumps.com.

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provisions of the Act and the Listing Regulations. In accordance with the provisions of Schedule IV of the Companies Act 2013, a Separate Meeting of the Independent Directors was held on January 20, 2023, without the attendance of Non-Independent Directors and Members of the Management. The Committee has reviewed the performance and effectiveness of the Board in this meeting as a whole for the Financial Year 2022-2023.

The Company has in place a Policy on prevention of Sexual Harassment in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 and has constituted the Internal Complaints Committee to redress complaints received regarding sexual harassment. During the year, no complaint was received by the Company.

• Statutory Auditors and their reports

In accordance with the provisions of Section 139 of the Companies Act, 2013 and the Rules made there under, M/s PGS & Associates. Chartered Accountants, Mumbai (Firm Registration No.:

122384W) was appointed as the Statutory Auditors of the Company at the 26th Annual General Meeting held on 29th September, 2021 for the term of three years beginning from financial year 2021-22 up the financial year 2023-24.

M/s PGS & Associates have audited the Standalone and Consolidated financial statement of the company for the financial year ended March 31, 2023. The Statutory Auditor's report provided by the M/s PGS & Associates does not contain any qualifications, reservations, adverse remarks or disclaimers which would be required to be dealt with in the Board's Report.

• Secretarial Auditor and their reports

In line with the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Regulation 24A of the Listing Regulations and other applicable provisions, if any, the Board has appointed Mr. Manish Maheshwari (FCS 5174) Practicing Company Secretary to carry out the Secretarial Audit of the Company for the financial year 202223.

The Secretarial Audit Report is annexed herewith Annexure IV to this Report. This report is unqualified and self-explanatory and does not call for any further comments/explanations. The Secretarial Audit Report of material unlisted subsidiary company

i.e. Shakti Energy Solutions Private Limited of the company is also annexed along with Annexure IV.

• Cost Auditor and their reports

As per the requirement of Central Government and pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company is required to appoint Cost Auditor for the audit of Cost Records of the Company.

The Board of Directors on the recommendation of Audit Committee, approved the appointment and remuneration payable to M/s. M.P. Turakhia & Associates, Cost Accountant as the Cost Auditors of the Company to audit the cost records for the financial year 2023-24. As per the statutory requirement, the requisite resolution for seeking members' approval for the remuneration payable to the Cost Auditor forms part of the Notice of the ensuing Annual General Meeting.

The information on conservation of energy, technology

absorption and foreign exchange earnings and outgo as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is set out herewith as Annexure V to this Report.

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government as required under Section 118(10) of the Companies Act, 2013.

The details of significant order passed by the Securities Exchange Board of India is mentioned in the Corporate Governance Report.

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of the SEBI Listing Regulations, 2015, a Vigil Mechanism/Whistle Blower Policy for dealing with unethical behavior actual or suspected fraud or violation of the Companies Code of Conducts or ethics policy. The same is uploaded on the website of the Company i.e. https://www.shaktipumps. com/policies programmes/vigil mechanism policy.php

The Directors wish to convey their gratitude and appreciation to all the employees of the Company for their tremendous personal efforts as well as collective dedication, their hard work and contribution to the Company's performance.

The Directors would also like to thank the members, customers, dealers, suppliers, bankers, Government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.