Karma Energy Ltd Directors Report

DIRECTORS REPORT

TO THE MEMBERS OF KARMA ENERGY LIMITED

The Directors are pleased to present this Eighteenth Annual Report and the Audited Statement of Accounts for the year ended March 31, 2025.

1 . FINANCIAL RESULTS

(Rs. in lakh)

Particulars	2024-2025	2023-2024
Total Income	1144.04	1330.89
Profit / (Loss) Before Depreciation but including exceptional	345.79	291.45
items
Less : Depreciation	189.37	294.42
Profit / (Loss) Before Tax	156.42	(2.97)
Less : Income Tax including Prior Years	69.11	72.82
Less : Deferred Tax	(68.65)	(88.20)
Profit / (Loss) After Tax	155.96	12.41
Other Comprehensive Income Net of Tax	(2.27)	(15.49)
Total Comprehensive Income for the year	153.69	(3.08)

In accordance with Section 136 of the Companies Act, 2013 read with Rule 10 of The Companies (Accounts) Rules, 2014, a company may forward statement of accounts containing the salient features in the prescribed form and simultaneously ensure that copies of the financial statements along with Auditors Report, Directors Report and other documents that is required to be attached of annexed with the financial statements are made available for inspection at the registered office of the company, during working hours for a minimum period of 21 days prior to the meeting of the shareholders. Accordingly Accounts complete set of financial statements has been made available on the website of the company www.karmaenergy.com.

2 . DIVIDEND AND RESERVES

Your Directors have not recommended dividend (previous year Rs. NIL per share) for financial year 2024-25 on account of the need to conserve the resources as the payments from the utilities though witnessed steady release during FY 2024-25 from past experience many a times turn to be erratic in all the states where the company is selling power to state utilities and regulatory changes are adversely affecting the revenues.

No amounts have been transferred to Reserves during the year.

3. SHARE CAPITAL

The Paid- Up Equity Capital of the Company as on 31.03.2025 is Rs.11,56,99,180/-. The company has not issued any new equity shares during the year.

4. FIXED DEPOSITS

Your Company has not accepted any Fixed Deposits within the meaning of Section 73 of the Companies Act, 2013.

5. PERFORMANCE

During the year the Total Income of the Company was Rs. 11.44.04 Lakh as compared to Rs. 1330.89 Lakh in the previous year. The turnover was much less at Rs.8.70 Cr in 2024-25 as against Rs.12.35 Cr in FY 2023-24.

The reasons for low turnover were AP wind farm operations stood closed since 01.11.2023, huge fire at two locations in Aranmanaikadu, Theni in January 2024

& August 2024 one of the best performing sites and above all lack of wind availability by over 24.58% contributed to low turnover. However Other Income mainly comprising off Recovery of debts of 2012-13 written off from TANGEDCO pursuant to a favourable order from TNERC, Interest thereto, Profit from partial sale of AP wind farm, Profit on sale of investments resulted in PBT of Rs. 156.42 Lakh in FY 2024-25 as against loss of Rs.2.97 Lakh in FY 2023-24 and corresponding PAT of Rs. 155.96 Lakh and Rs. 12.41 Lakh respectively.

The improved realization of generation dues has made the Company debt free.

There has been no change in the business of the company during the year as compared to the previous year

6. SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES

Your company has no subsidiaries / Associates / Joint ventures.

7. DIRECTORS AND KEY MANAGEMENT PERSONNEL

The Board of Directors on the recommendation of the Nomination and Remuneration Committee, had appointed Shri Hitesh V. Siraj as additional director of the Company w.e.f. 25^th October 2024. The appointment and confirmation as Director was approved by the Shareholders by way of Postal Ballot.

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company the Director Shri. Dharmendra G. Siraj retires by rotation and, being eligible has offered himself for re-appointment.

The Company had pursuant to Section 149(10) read with Section 152 of the Companies Act, 2013 has two independent directors viz. Shri B S Shetty and Smt. Smita V Davda who were / are appointed for a term of five consecutive years at the relevant Annual General Meetings.

The Board of Directors had six board meetings during financial year 2024-25.

Mr. T V Subramanian is the Chief Financial Officer and Company Secretary appointed by the Board of Directors.

8. COMMITTEES

The Audit Committee members are –
Mr. Balady Shekar Shetty – Independent Director	- Chairman
Mr. Neelkamal V. Siraj – Non-Independent Director	- Member
Smt. Smita V Davda – Independent Director	- Member
The Nomination and Remuneration Committee members are:
Mr. Balady Shekar Shetty - Independent Director	- Chairman
Mr. D G Siraj– Non Independent Director	- Member
Smt. Smita V Davda– Independent Director	- Member
The Stakeholders Relationship Committee members are -
Mr. D G Siraj– Non Independent Director	- Chairman
Smt. Smita V Davda– Independent Director	- Member
Mr. Chetan D Mehra- Non Independent Director	- Member
The Corporate Social Responsibility Committee members are -
Mr. B S Shetty – Independent Director	- Chairman
Mr. D. G Siraj – Non-Independent Director	- Member
Mr. Chetan D Mehra- Non Independent Director	- Member

8a. The Board of Directors had accepted all the recommendations of the Audit Committee during the Financial Year.

9. STATEMENT INDICATING THE MANNER IN WHICH FORMAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

In accordance with the provisions of the Act and the Listing Regulations, the Company has conducted the Annual Performance Evaluation process, evaluating the performance of the Board, the Committees of Board and the individual directors including Chairman. The Board of Directors has evaluated the performance of Independent Directors during the year 2024-25 and expressed their satisfaction with the evaluation process. Independent Directors, in their separate meeting reviewed the performance of the Non-Independent Directors and the Board as a whole and also reviewed the performance of the Chairman after taking into account the views of all the Directors. The outcome of this performance evaluation was placed before the meetings of the Nomination and Remuneration Committee and Independent Directors for the consideration of the members. The committee expressed overall satisfaction on the performance of the Independent Directors, Non-Independent Directors, Chairman and the Board as a whole.

10. FAMILIARISATION PROGRAMME ARRANGED FOR INDEPENDENT DIRECTORS

The company as required under Schedule IV of the Companies Act, 2013 and Listing

Regulations has made arrangement to facilitate the independent directors to familiarize with the operations of the company, their roles, rights, responsibilities as Directors of the company considering the nature of the industry in which the company operates, business model of the company, etc. The above aspect can be accessed by web link http://www.karmaenergy.co/fid.html The Company during Board Meetings itself updates all the Directors including Independent Directors on every aspect of the operations of the Company.

11. EXTRACT OF ANNUAL RETURN AS PER SECTION 92(3) OF COMPANIES ACT, 2013

An extract of Annual Return pursuant to section 92(3) of the Companies Act, 2013 have been uploaded on the website of the Company and can be accessed by web link http://www.karmaenergy.co/ar.html

12. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) of the Companies Act, 2013, your Directors confirm:

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 judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period ;

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

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

v) that 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 ;

13. STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER

SECTION 149(7) OF THE COMPANIES ACT, 2013

The Board confirms the receipt of statement of declaration from independent directors u/s.149(7) of the Companies Act, 2013 on the matters of criteria of independent Director u/s. 149(6) of the Act. Further Independent Directors have complied with code for independent Directors prescribed in Schedule IV to the Act.

14. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

The company has constituted a Nomination and Remuneration Committee with the responsibilities of formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration for the directors, Key Managerial Personnel and other employees ; Formulating criteria for evaluation of independent directors and the Board ; Devising policy on Board diversity ; Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down and recommend to the Board their appointment and removal. The Company amends it policies based on developments in the regulatory forum and also to strengthen its corporate governance compliances.

Appointment and Remuneration to Managing Director is subject to approval by members in General Meeting and shall be in accordance with Schedule V of Companies Act, 2013 and ceiling as per Section 197 of the Act. Appointment of Independent Directors to satisfy conditions u/s.149 (6) of the Companies Act, 2013.

The Independent Directors shall be governed by Code of Conduct detailed in Schedule IV of the Companies Act, 2013.

The personnel selected as Board Member or Key Management Personnel or other senior personnel of the company is based on their requisite qualifications, skills, experience and knowledge in the relevant fields.

Remuneration policy of the Company includes fixation of remuneration and annual increments based on performance, knowledge, position, target achievement, companys business plans, market environment and the remuneration is segregated into monthly fixed payments, annual payments, contribution to social and retirement benefits, reimbursement of expenses incurred for discharge of official duties, annual bonus, welfare schemes like insurance on health for self and family, accident benefits, tying up with agencies for managing retirement benefits like gratuity, pension schemes, etc.

The remuneration policy as above is also available in the website of the company –http://www.karmaenergy.co/nnrp.html

15. PARTICULARS OF THE EMPLOYEES AND INFORMATION CALLED FOR UNDER

SECTION 197 OF THE COMPANIES ACT, 2013 AND THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits, top 10 employees in terms of remuneration drawn and other Disclosures pertaining to remuneration are set out in the said rules are provided in the

Having regard to the provisions of the proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company.

The said information can be made available to any member interested in obtaining such information on request in writing to the Company Secretary.

16. DISCLOSURE OF PARTICULARS

Pursuant to Section 134(3) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 the Report on the matters of Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo are as follows:

As the Company is in the field of Wind Farm development and not manufacturing, the relevant provisions relating to conservation of technology absorption are not applicable. However as the Company is in the field of wind farm development and promoting green energy, it is directly contributing to reducing dependency on fossil fuel and thus conserving the fossil fuel.

The earnings and outgo in foreign exchange was NIL during the year.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S.186 OF THE

COMPANIES ACT, 2013

As the Company is in the business of Wind Power Generation an infrastructure activity as per Schedule VI of the Companies Act, 2013, provisions of Section 186 is not applicable.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013

The transactions with the Related Parties are at arms length basis and these transactions are not of material in nature as per Section 188 of the Companies Act, 2013 read with Rule 15 of the Companies (Meeting of Board and its Powers) Rules, 2014. The related party transactions are placed before the Audit Committee as also the Board for approval.

19. POLICY ON RELATED PARTY TRANSACTIONS

The Company has framed a policy on related party transactions and the same has been hosted on its website http://www.karmaenergy.co/rptp.html

The policy includes the specific transactions requiring prior approval of the Audit Committee, the Board of Directors, Special Resolution by members at General Meeting, determining the materiality of the transaction with the related party both under Companies Act and Listing Regulations, and also the procedures to be followed in complying with the statutory provisions in respect of related party transaction, if any.

20. STATEMENT INDICATING DEVELOPMENT AND IMPLEMENTATION OF RISK

MANAGEMENT POLICY FOR THE COMPANY

The Company has framed its Risk Management Policy detailing the identification of elements of risks, monitoring and mitigation of the risks. The company has laid down detailed process in planning, decision making, organizing and controlling.

The Risk Management Policy has been hosted on the companys website http://www.karmaenergy.co/rmp.html

21. CORPORATE SOCIAL RESPONSIBILITY OF THE COMPANY

The Board has constituted a Corporate Social Responsibility ("CSR") Committee in terms of the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014. The statutory requirement of complying with Corporate Social Responsibility (CSR) of the Companies Act, 2013 became applicable to the company during F.Y. 2023-24 pursuant to Net Profits in the immediately previous financial year F.Y.2022-23 being more than Rs.5 Cr. However on account of Profits for FY 2023-24 being less than the thresh hold limits, CSR not applicable in FY 2024-25.

CSR policy is formulated which is uploaded on the website of the Company: http:// http://www. https://www.karmaenergy.co/corporate-records-policy.html

22. ESTABLISHMENT OF VIGIL MECHANISM

The company has in place a vigil mechanism pursuant to which a Whistle Blower Policy is also in vogue. The whistle blower policy covering all employees and directors of the company is hosted on the companys website http://www.karmaenergy.co/wbp.html

23. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL

POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT

There are no material changes or commitments affecting the financial position of the company which have occurred between the end of the financial year and the date of this Report.

24. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE

No significant or material orders have been passed by the regulators or courts or tribunals impacting the going concern status and companys operations in future.

25. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL CONTROLS WITH RESPECT TO

THE FINANCIAL STATEMENTS

The company has an internal control system commensurate with the size, scale and nature of its operation.

The internal controls ensure that all its assets are properly safeguarded and protected against loss from unauthorized use or disposal, all transactions are authorized, recorded and reported correctly. The company has also an internal audit system for periodical audit of the internal control systems of the company.

26. ISSUE OF NEW EQUITY SHARES DURING THE YEAR

The company has not issued any new equity shares during the year.

27. AUDITORS

In the Fifiteenth Annual General Meeting (AGM) of the company held on July 28, 2022 Messrs. Batliboi & Purohit, Chartered Accountants was re-appointed as Statutory Auditors of the Company for a period of five years to hold office from the conclusion of the Fifteenth AGM until the conclusion of the Twentieth AGM of the company ie of 2027. The Auditors have given a certificate that they are not disqualified and are eligible to be continued as Statutory Auditors of the Company and accordingly the Board has recommended their reappointment for financial year FY 2025-26 subject to their eligibility of continuing as Auditor obtained at the beginning of every financial year.

28. SECRETARIAL AUDIT

Pursuant to requirement of section 204 of the Companies Act, 2013, the company had appointed Shri Martinho Ferraro – Practicing Company Secretary (COP 5676) as Secretarial Auditor for financial year 2024-25 and whose report of 27.05.2025 is attached as Annexure-VI. There are no adverse observations made by the Auditor.

Further the Board at its meeting held on May 27, 2025, based on recommendation of the Audit Committee, has approved the appointment of Martinho Ferrao & Associates, Practicing Company Secretaries, a peer reviewed firm (Membership No. 6221) as Secretarial Auditors of the Company for a term of five consecutive years commencing from FY 2025-26 till FY 2029- 30, subject to approval of the Members at the ensuing AGM.

29 . AUDITORS REPORT

The observations of the Auditors in their report, read with notes annexed to the accounts, are self-explanatory.

30. REPORTING OF FRAUDS

There was no instance of frauds during the year under review, which required the Statutory Auditors to report there on.

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31. COST RECORDS AND AUDIT THEREOF

Maintenance of Cost records pursuant to Companies (Cost Records and Audit) Rules, 2014 as amended from time to time is not applicable to the Company for this Financial year 2024-25.

32. TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

As the Company had not declared dividend for FY 2016-17, any transfer of unclaimed dividend to IEPF as required u/s.124 of the Companies Act, 2013 does not arise.

33. CREDIT RATING

The Company has nil borrowings from Banks / Financial Institutions, hence the rating exercise is no more applicable.

34. CORPORATE GOVERNANCE

Your Company has complied with Corporate Governance requirements as per prescribed under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance forms part of this report as Annexure-I. A certificate from the Statutory Auditors of the Company confirming compliance of the Corporate Governance is appended to the Report on Corporate Governance.

35. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under the Listing Agreement with the Stock Exchanges is attached to this Report as Annexure-III.

36. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

(PREVENTION, PROHIBITION AND 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 the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year no complaints have been received.

37. DISCLOSURE ON COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors confirm that the Secretarial Standards issued by the Institute of Companies Secretaries of India have been complied with.

38 . ACKNOWLEDGEMENT

Your Directors express their grateful appreciation for the assistance and co-operation received from Government Authorities, Bankers, Lending Institutions, Suppliers and Customers during the year under review.

Your Directors place on record their appreciation for the committed services of the executives and staff of the Company.