KDDL Ltd Directors Report

Dear Members,

Your directors present this 44^th Annual Report together with the Audited Accounts of the Company for the financial year ended 31^st March 2024.

OPERATIONS AND PROSPECTS

Financial Results (Standalone and Consolidated)

The summary of operating results for the year 2023-24 and previous 2 years is given below:

	Amount in Rs millions
Particulars	Standalone			Consolidated
	2023-24	2022-23	2021-22	2023-24	2022-23	2021-22
Income- Operational	3,599.2	3..139.1	2,233.7	14,197.7	11,387.6	8,315.8
Income- Investment	1,937.7	497.0
Total Income	5.537.0	3,636.1	2,233.7	14,197.7	11,387.6	8.315.8
Profit before interest, depreciation and exceptional item	2,767.2	1,104.6	466.5	2,766.4	1,804.6	1,224.8
Less: Finance Cost	88.5	85.1	75.4	262.2	239.6	247.7
Gross Pro-fit	2,678.7	1,019.5	391.1	2,504.2	1,565.0	977.1
Less: Depreciation and amortisation	138.6	127.1	117.1	649.3	493.9	453.8
Profit before Share of Profit of an associate	2,540.1	892.4	274.0	1,854.9	1,071.1	523.2
Share of Profit of an associate				7.4	5.0	(0.4)
Profit B efore tax	2,540.1	8924	274.0	1,862.3	1,076.0	522.9
Less: Tax Expense	339.6	200.1	61.1	487.8	306.2	150.9
Net Profit i (Loss) for the Year	2,200.5	692.3	212.9	1,374.5	769.8	372.0
Other Comprehensive Income / (Loss) (OCI)	(9.0)	(1.6)	1.0	(14.1)	(4.8)	7.1
Total Comprehensive Income / (Loss) for the period	2,191.5	690.7	213.9	1,360.4	765.0	379.1

PERFORMANCE AND PROJECTIONS

The performance for the financial year 2023-24 was strong and better compared to the previous year. All business and market segments witnessed healthy growth as the economic activities and market conditions were continuously on the growth trajectory. All business units of the company reported better revenue and profitability during the year.

During the year, the Company achieved consolidated sales revenue of Rs. 14198 Million against Rs. 11388 Million in the previous year, registering a very robust growth of 24.7%.

Profit before tax during the year increased from Rs. 1076.0 Million to Rs. 1862.3 Million, registering a growth of 73.1% over the previous year.

Sales revenue from manufacturing operations on a standalone basis improved by 14.7% to Rs. 3599.2 Million from Rs. 3139.1 Million in the previous year. This growth is on a higher revenue base of last year wherein the operational revenue grew by 40.5%. The overall revenue on a standalone basis, which included dividend income of Rs. 720.7 Million and Profit from the sale of investments of Rs. 1217.0 Million, was Rs. 5537 Million during the

year, compared to the previous years revenue of 3636.1 Million (including Profit from the sale of investments of Rs. 107 Million and one-time revenue of Rs. 390 Million from the sale of trademark "Ethos" and "Summit"). During the year the company purchased 24370 equity shares of Ethos Ltd (a subsidiary company) for the value of Rs. 397.87 lacs and sold 4,90,000 equity shares for a total consideration of Rs. 12,244.90 lacs.

The growth in operational revenue is a record for the company and an indication of a very strong performance compared to the normal industry parameters.

During the year, the company had made impairment allowance of Rs. 195.75 Million due to a permanent diminution in the investment in its overseas subsidiaries.

The company reported profit before tax of Rs. 2,540.1 Million (Operational profit before tax of Rs. 798.12 Million) compared with the profit before tax of Rs. 892.4 Million (Operational profit before tax of Rs. 585.4 Million) registering an overall growth of 184.6% (operational growth of 36.3%) over the previous year.

The company earned net profit after tax of Rs. 2,200.5 Million against Rs. 692.3 Million in the previous year.

Manufacturing Business Segments

The largest revenue of the manufacturing business segment is from watch components accounting for around 68% of the revenue of the company. During 2023, the Swiss watch market, the principal destination for our exports, witnessed a growth of 7.6% over 2022, and recorded the ever-highest exports of 26.7 Billion Swiss francs. Growth in the first half of the year was 11.8% before slowing down to 3.6% in the second six months of the calendar year.

The total number of units exported in 2023 reached 16.9 Million, up 7.2% vs 2022 (10.6m quartz and 6.3 m mechanical watches). However, the total number has declined by a cumulative -35% since 2008 recession (26.1m then) and-43% since the most recent peak (29.8 m units in 2011 in total of which 24 m quartz and 6m mechanical watches) over the past decade or so, the number of quartz watches has essentially halved, while the number of mechanical watches is more or less stable. Since 2008, in value terms the market is modestly up by 3% CAGR due a mix effect : exports of higher prices watches have continued to grow led by brands such as Rolex, Patek Philippe and Audemars Piguet while entry level / mid-range Swiss watches have contracted.

2024 looks calmer for both exports and the number of people employed in the sector, Subcontractors and suppliers particularly are expecting a less positive outlook for this year. Although the sluggish economic situation has only appeared to have a partial impact on the luxury goods market, it is nonetheless affecting consumer confidence at all levels and several brands have already indicated that they intend to be cautious in their forecasts. In addition, the particularly high level of the Swiss franc will affect results, particularly in the entry-level and mid-range segments. The domestic watch market was also strong in the first half of the financial year but remained sluggish during the second half. There are also trends of customers and brands sourcing higher assembled watches from China /Hongkong and sourcing of components from China have also increased and the earlier trend of preferring domestic sourcing and China plus one strategy seems to be weakening in watch industry.

The primary focus of the management during the year was to ensure that the customers requirements were fulfilled by enhancing the productivity and capacity and capability of the units. The revenue (net sales) of the company from the watch components business improved by 10.8% compared to the previous years growth of 38.1%. Sales in the domestic market declined by 7.3% compared to a growth of 15.3% in the previous year, while exports sales of watch components improved by 17.3% compared to a growth of 48.6% in the previous year. The growth in exports revenue was also supported partially by the favorable

currency movement in the Swiss franc and rupee conversion. The growth trend of the watch component business clearly indicates that the company is gaining market share in India and abroad with its consistent track record of high quality, innovative product range, speed of response and the strong customer relationship. The other major segment of revenue is from the precision stamping and tooling business, wherein the company revenue improved by 26.4% over the previous year compared to a growth of 51.9% recorded in the previous year. The revenue from domestic market improved by 8.3% while the revenue from exports improved by 37.0% (Previous year growth rate 95.0%). The increase in exports during the year, on an already higher base of the previous year, clearly indicates the strong demand and improvement of market share in overseas segments. Direct exports continue to improve during the year as many new customers were inducted and the growth in business with existing customers. The share of exports in this business segment improved from 63% in 2022-23 to 69% during the year. Domestic market segments are also witnessing growth but at a modest pace and the company is also cautiously reducing its presence in the low margin and lower capability business segments and gradually moving up the value chain into preferred segments and customers by re-aligning the capability and capacity of the manufacturing unit.

The revenue from the ornamental packaging business of the company improved by 18.1%.

Prospects

The exports order position is modest and likely to remain sluggish during the year for the watch component business with the assumption that market and geo-political environment in major economies and markets remain uncertain and the market situation will be challenging.

We do expect an improvement in the domestic watch market, and it will provide us with the opportunity to enhance our market share in the coming quarters.

We will maintain our focus on enhancing revenue by structured marketing efforts including a stronger digital presence to show case new products and features. Manufacturing excellence with the goals of world class delivery compliance, quality and turnaround time (TAT) will remain our key operational goals.

During the year, the company will enhance its revenue in the watch components business as the watch bracelet business will commence commercial production. In addition, the enhanced capacity of ornamental packaging business will provide additional revenue from this business segment.

The revenue of the Precision Engineering business of the Company is expected to grow very strongly by as we continue to expand our customer base and reach in new segments and markets. Your company has established its reputation as a quality supplier with the ability to meet sophisticated customer needs. By focusing on the vital levers of operational performance while adding key technical capabilities and show-casing our capabilities at leading international trade exhibitions and with aggressive digital marketing, we are confident of adding new customers and continue growth and improved returns.

Retail Business Segment

Ethos Limited has experienced an exceptional financial year in 2023-24, showcasing impressive growth in both revenue and profitability. On a standalone basis, Companys revenue from operations and other income surged by 26.92%, reaching Rs. 1,02,009 Lacs. The Company achieved a remarkable net profit of Rs. 8,129.21 Lacs, compared to Rs. 5,979.60 Lacs in the previous fiscal year, reflecting a substantial increase in profitability. On a consolidated basis, Companys revenue grew by 27.33%, totalling Rs. 1,02,260.89 Lacs. The consolidated net profit for FY 2023-24 was Rs. 8,329.46 Lacs, up from Rs. 6,029.82 Lacs the previous year, indicating strong financial health and operational efficiency. The Company has effectively capitalised on its digital capabilities to meet evolving consumer preferences and drive sales growth. Looking ahead, Ethos Limited is committed to continuing its investment in digital innovation, brand-building and marketing to maintain and enhance customer engagement. Overall, Ethos Limiteds remarkable performance in FY 2023-24, driven by its strategic initiatives and digital prowess, positions it well for sustained growth and success.

Pylania SA

During the fiscal year 2023-24, Pylania SA maintained its multiple business revenue streams, encompassing partial manufacturing of watch components, trading of watch components and accessories, as well as consultancy and advisory services.

There was a substantial revenue reduction during the year and revenue declined from CHF 4,519 K to CHF 2,333 K, marking a reduction of 43% compared to the previous year, mainly due to a major decline in the business of trading of watch components by the important Swiss customers. The operating profit of Pylania SA also declined from CHF 510 K recorded in the previous year to CHF 261 K during the year.

The management of Pylania SA remains committed to exploring opportunities that will enhance revenue and expand the scale of the business. Simultaneously, they are closely monitoring costs to improve its financial position and bolster liquidity.

During the year, Pylania has shifted its operations from Grandval, Canton Bern to Grenchan, Canton Solothurn and disposed of the real estate.

During the year, Pylania SA contributed additional capital of CHF 276 K to Estima AG and extended additional loans, including subordinate loans, totaling CHF 454 K to Estima AG.

Estima AG

During the fiscal year 2023-24, Estima AG achieved a revenue of CHF 4,133 K. This represents a growth of 37% compared to the previous 12-month period ending in March 2023, which recorded a revenue of CHF 3,017 K. The operating loss was also reduced drastically from CHF 1,809 K to CHF 553 K. This decrease in loss is majorly due to an increase in revenue, better productivity, controlled and restricted overheads.

Estima AG experienced an improvement in its gross margin from 51% in previous year to 59% during the year, due to favorable product mix and better efficiencies. The other administrative and manpower costs were also controlled as company worked on improving the efficiencies and restricted costs.

Despite the increase in revenue and controlled costs, Estima AG operations continue to be under losses and company remains dedicated on further enhancing the teams capabilities and the units capacity to cater to high-end brands by incorporating additional features and improving quality levels and service standards requirements for the new customers. The management remains confident that as the Swiss market conditions improves, the order position will become healthy, and company will be able to increase the revenue and become profitable by adding new products and features in its product range.

Estima AGs strategy and action plan to revive itself, drive growth, and foster development is delayed due to tough market conditions and challenging environment, but the initiatives are in the right direction and management is confident that the forthcoming years will witness substantial revenue growth and improved profitability. During the year, the equity of company was increased from CHF 80 K to CHF 1,000 K and the shareholders of the company contributed additional capital in the ratio of its equity holding.

Kamla International Holdings SA (KIH)

KIH is a wholly owned subsidiary of KDDL, operating as a special- purpose vehicle for strategic investments in the overseas market. KIH primarily owns 62.5% equity capital of Pylania and 70% equity capital of Estima AG.

KIH provided an additional loan amounting to CHF 220 K to Estima AG during the year. KIH contributed CHF 144 K as equity to Estima.

Kamla Tesio Dials Limited (KTDL)

Kamla Tesio Dials Limited (KTDL) is a 100% subsidiary of KDDL Limited and is primarily engaged in the manufacture of watch dials through job contracts for the parent company. During the year, KTDL reported revenue and profitability of Rs. 141 Lacs and Rs. Lacs respectively. In the previous year, it had reported revenue of Rs. 131 Lacs and profit before tax of Rs. 9 Lacs.

Mahen Distribution Limited

Mahen Distribution Limited (MDL) is a wholly owned subsidiary of KDDL Limited, primarily offers workforce recruitment, engagement, employment, staffing, and managerial services. In the fiscal year 2023-24, the Company generated revenues amounting to Rs. 348 Lacs compared to a revenue of Rs. 278 Lacs in the previous year. During the year company reported profit before tax of Rs. 67 lacs compared to a pre-tax loss of Rs. 20 Lacs in previous year.

In addition, during the year, MDL has sold 614608 equity shares of Ethos Limited for a total consideration of Rs. 118 Crores, resulting in a gain of Rs. 117 Crores. MDL distributed an interim dividend of Rs. 72 Crore to its shareholders.

MDL has also invested Rs. 948 Lacs in Silvercity Brands AG, as 50% payment for the 19,00,000 equity shares of CHF 1 each at a premium of CHF 0.05 and acquired 31.7% holding of Silvercity Brands AG.

Silvercity Brands AG (SCB)

Silvercity Brands AG became a subsidiary of KDDL Limited during the year and company and made an investment of Rs. 741 Lacs, as 50% payment for acquiring 15,00,000 equity shares of CHF 1 each at a premium of CHF 0.05.

KDDL holds directly 25% of the SCB equity capital and 66.7% thru other subsidiaries Ethos Ltd (35%) and Mahen Distribution Ltd (31.7%).

CHANGE IN SUBSIDIARIES:

(a) Silvercity Brands AG: The Company has acquired 15,00,000 partly paid up equity shares of CHF 1 each and Mahen Distribution Limited, a wholly owned subsidiary of the Company has acquired 19,00,000 party paid up equity shares of CHF 1 each of SILVERCITY BRANDS AG. Consequently, Silvercity Brands AG has become subsidiary of the Company with 91.70% shareholding (directly and indirectly through its wholly owned subsidiary, Mahen Distribution Limited and material subsidiary, Ethos Limited).

(b) Kamla Tesio Dials Limited (KTDL): KDDL Limited has acquired 3,00,000 (30%) equity shares of Rs. 10 each of "Kamla Tesio

Dials Limited" (KTDL), subsidiary of the Company from "Kamla International Holdings SA", 100% subsidiary of the Company. Pursuant to this acquisition, KDDL Limited now directly holds 99.99% equity shareholding in KTDL, subsidiary of the Company.

DIVIDEND

The Board of Directors at its meeting held on 18^th January, 2024 had declared Interim Dividend of Rs. 58 (Rupees Fifty Eight) per equity share (i.e. 580%) of face value of Rs. 10/- each for the financial year 2023-24. The above dividend was paid to the shareholders who were on the register of the members as on 26^th January, 2024 being the record date fixed for this purpose.

The Board of Directors has also recommended a dividend of Rs. 4 (Rupees Four only) per equity share of Rs. 10/- (Ten rupees) each fully paid-up of the Company for the financial year 31^st March 2024. Dividend is subject to approval of members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source. The record date for the payment of Final Dividend will be Tuesday, 27^th August, 2024. The dividend recommended is in accordance with the Companys Dividend Distribution Policy.

The Dividend Distribution Policy of the Company is available on the Companys website and can be accessed at https://www.kddl.com/ wp-content/uploads/PDF/Dividend%20Distribution%20Policy.pdf

TRANSFER TO RESERVES

Your Board do not propose to transfer any amount to general reserve for the period under review.

BUY BACK OF SHARES

The Board of Directors at its meeting held on 9^th July 2024 approved the proposal of Buyback of fully paid-up equity shares up to 2,37,837 (Two Lacs Thirty Seven Thousand Eight Hundred Thirty Seven) fully paid-up equity shares of the Company, each having a face value of Rs. 10/- (Rupees ten only) ("Equity Shares"), subject to approval of the shareholders by means of a Special Resolution through postal ballot, representing up to 1.90% of the total number of equity shares in the paid-up equity share capital of the Company, at a price of Rs 3,700 (Rupees Thirty Seven Hundred only) per Equity Share ("Buyback Price") payable in cash for an aggregate amount not exceeding Rs 88,00,00,000 (Rs. Eighty Eight Crores only) ("Buyback Size") being 22.35 % and 12.06% of the aggregate of the fully paid-up equity share capital and free reserves as per the latest audited standalone and consolidated financial statements of the Company as at 31^st March 2024 respectively.

SHARE CAPITAL

During the financial year 2023-24, there was no change in the authorised, issued, subscribed, and paid-up share capital of the Company. Further, the Company has not issued shares with differential voting rights.

DEPOSITS

The details of deposits covered under Chapter V of the Companies Act, 2013 ("the act") is given hereunder:

1. Deposits Accepted/ renewed during the year	: Rs 19,40,74,000
2. Deposits outstanding at the end of the year	: Rs. 35,21,02,000
3. Deposits remained unpaid or unclaimed as at the end of the year	: NIL
4. Whether there has been any default in repayment of deposits or payment of interest thereon during the year and if so, number of such cases and the total amount involved	: NIL
5. The details of deposits which are not in compliance with the requirements of Chapter	: NIL

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Act, Regulation 33 of the Listing Regulations and applicable Accounting Standards, the Audited Consolidated Financial Statements (CFS) of the Company and all the subsidiaries, form a part of this Annual Report for the financial year 2023-24. In accordance with Section 136 of the Act, the Audited Financial Statements, including the CFS and related information of the Company and the separate financial statements of each of the subsidiary companies, are available on the Companys website at www.kddl.com

Pursuant to Section 129(3) of the Act, a statement containing salient features of the Financial Statements of each of the subsidiaries, associates and JV Companies in the prescribed Form AOC-1 as Annexure I forms part of the Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN END OF THE FINANCIAL YEAR AND DATE OF REPORT

There have been no material changes and commitments for the likely impact affecting financial position between end of the financial year and the date of the report. Also, there has been no change in the nature of business of the Company.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS UNDER SECTION 186

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Act, are given in the respective notes to the standalone financial statements of the Company.

RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by the Audit Committee and were in accordance with the Policy on dealing with and materiality of related party transactions and the related party framework formulated and adopted by the Company. All contracts/arrangements/transactions entered into by the Company during the year under review with related parties were in the ordinary course of business and on arms length basis in terms of provisions of the Act. There are no material significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons and their relatives which may have a potential conflict with the interest of the Company at large.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Notes to the standalone financial statements of the Company. Disclosures of related party transactions in terms of Regulation 23 of the Listing Regulations submitted to Stock Exchanges for the half year on a consolidated basis, in the specified format -are available on the website of the Company at www.kddl.com.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in Annexure II to this Report.

BOARD DIVERSITY

The Company recognises and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, regional and industry experience, cultural and geographical background, age, ethnicity, race, gender, knowledge and skills including expertise in financial, global business, leadership, technology, mergers & acquisitions, Board service, strategy, sales, marketing and other domains, which will ensure that KDDL retains its competitive advantage. The Board Diversity Policy adopted by the Board forms

an integral part of the Nomination & Remuneration Policy and is available on our website, at https://www.kddl.com/wp-content/ uploads/PDF/Nomination%20&%20Remuneration.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL

(i) Appointment/Re-appointment of Non-Executive Directors:

The shareholders of the Company at their 43^rd AGM held on 29^th September, 2023 confirmed the appointment/re- appointment of the following Directors :

(a) Mrs. Anuradha Saboo (DIN: 01812641): Appointment of Mrs. Anuradha Saboo as Non-Executive Director, liable to retire by rotation.

(b) Reappointment of Mr. Sanjeev Kumar Masown (DIN: 03542390) who retired by rotation at 43^rd Annual General Meeting and offered himself for reappointment

(ii) Pursuant to the recommendations of Nomination and Remuneration Committee and Audit Committee, the Board of Directors of the Company at its meeting held on 14^th May 2024 subject to the approval of the Shareholders, reappointed Mr. Sanjeev Kumar Masown as Whole time Director for a period of 3 (three) years w.e.f 31^st May 2024 to 30^th May 2027. The Company has sought approval from the Shareholders for the said re-appointment and remuneration of Mr. Masown by way of Special Resolution though Postal Ballot Notice separately.

(iii) In accordance with the provisions of Companies Act, 2013, Mr. Jai Vardhan Saboo (DIN: 00025499) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. Necessary resolution for the re-appointment of Mr. Jai Vardhan Saboo forms part of the Notice convening 44^th Annual General Meeting (AGM). The Board recommends his re-appointment for the approval of the members. Details, such as brief resumes, nature of expertise in specific functional areas, names of companies in which the above-named directors hold directorships, committee memberships/ chairpersonships, shareholding in your Company, etc. are furnished in the Notice of AGM.

In the opinion of the Board, all the directors, as well as the directors proposed to be re-appointed, possess the requisite qualifications, experience and expertise and hold high standards of integrity.

During the year under review, the Non-Executive Directors (NEDs) of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees received by them for attending the meetings of the Board of Directors and Committee thereof and/or interest on deposits and dividend payment, if any.

(iv) Mr. Anil Khanna and Mrs. Ranjana Agarwal, Independent Directors of the Company ceased to be Directors w.e.f 6^th August, 2024, upon completion of their second term of 5 (Five) consecutive years.

Key Managerial Personnel

Mr. Yashovardhan Saboo, Chairman & Managing Director, Mr. Sanjeev Kumar Masown - Whole time Director cum Chief Financial Officer and Mr. Brahm Prakash Kumar Company Secretary, are the Key Managerial Personnel of the Company. During the year under review, there were no changes to the Key Managerial Personnel of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:—

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

(ii) 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 profit and loss of the company for that period;

(iii) the directors had 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;

(iv) the directors had prepared the annual accounts on a going concern basis; and

(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.

DECLARATION FROM DIRECTORS

The Company has, inter alia, received the following declarations from all the Independent Directors confirming that:

• they meet the criteria of independence as prescribed under the provisions of the Act, read with the Schedule and Rules issued thereunder, and the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company;

• they have complied with the Code for Independent Directors prescribed under Schedule IV to the Act; and

• they have registered themselves with the Independent Directors Database maintained by the Indian Institute of Corporate Affairs.

None of the Directors of the Company are disqualified for being appointed as Directors as specified under Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.

BOARD MEETINGS

During the year under review, 7 (seven) meetings of the Board of Directors were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act and the Listing Regulations.

BOARD COMMITTEES

As on 31^st March 2024, the Board has 5 (five) Committees: Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee and Stakeholders Relationship Committee.

During the year, all recommendations of the Committees of the Board which were mandatorily required have been accepted by the Board. The composition and terms of reference of all the Committees of the Board of Directors of the Company is in line with the provisions of the Act and the Listing Regulations.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013, Listing Regulations and in accordance with the manner of evaluation, the Board carried out an annual performance evaluation of its own performance, board committees and of the directors individually (including Independent Directors). A separate meeting of the Independent Directors was convened during the financial year under review, which, inter alia, reviewed the performance of the Board as a whole, the non-independent directors and the Chairman of the Company after taking into account the views of Executive and Non-executive Directors, assessed the quality, quantity and timeliness of flow of information between the Management and the Board of Directors that is necessary for the Board of Directors to effectively and reasonably perform their duties and expressed satisfaction over the same.

NOMINATION AND REMUNERATION POLICY

The Company has in place a policy for remuneration, nomination, selection and appointment of Directors, KMPs and Senior Management, approved by the Board of Directors. The Policy broadly lays down the guiding principles, criteria and the basis for payment of remuneration to the Executive and Non-Executive Directors (by way of sitting fees and commission), KMPs and Senior Management. The criteria for the selection of candidates for the above positions cover various factors and attributes, which are considered by the Nomination & Remuneration Committee and the Board of Directors while selecting candidates. The policy details are explained in Corporate Governance Report which forms part of the Annual Report. The policy can also be accessed at https:// www.kddl.com/wp-content/uploads/PDF/KDDL_Remuneration_ Policies.pdf

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

All Independent Directors are familiarised with the operations and functioning of the Company at the time of their appointment and on an ongoing basis. The details of the training and familiarisation program are posted on the website of the Company and can be accessed at https://www.kddl.com/familiarisation-programme.

CREDIT RATING

During the year under review, ICRA Limited has upgraded credit rating of the Company as per below details:

Instrument	Rating Action
Fund based facilities	[ICRA]A+ (Stable) ; upgraded from [ICRA]A (Stable)
Non-Fund based facilities	[ICRA]A1+ ; upgraded from [ICRA]A1
Fixed Deposits	[ICRA]A+ ; upgraded from [ICRA]A

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Companys CSR initiatives and activities towards supporting projects in the areas environmental sustainability, eradicating hunger, poverty and malnutrition, promoting education, enhancing vocational skills and promoting healthcare including preventive healthcare.

The Companys CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31^st March 2024, in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") is set out in Annexure III to this Report. The Companys CSR Policy is available on our website, at https://www.kddl.com/wp-content/uploads/PDF/ KDDL_CSR_Policy.pdf.

VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and is in line with the best governance practices. The Company has a robust vigil mechanism through its Whistle Blower Policy approved and adopted by the Board of Directors of the Company in compliance with the provisions of Section 177(10) of the Act and Regulation 22 of the Listing Regulations.

The Policy also provides adequate protection to all its stakeholders who report unethical practices and irregularities. Any incidents that are reported are investigated and suitable action is taken in line with the Companys Whistle Blower Policy. No person is denied access to the Audit Committee.

The Whistleblower Policy is available on our website, at https:// www.kddl.com/wp-content/uploads/PDF/Whisle%20Blower%20 Policy.pdf

RISK MANAGEMENT

The Company recognises that risk is an integral and inevitable part of business and it is fully committed to managing the risks proactively and efficiently. Our success as an organisation depends on our ability to identify and leverage the opportunities while managing the risks. The Company has a disciplined process for continuously assessing risks, in the internal and external environment along with minimising the impact of risks. The Company incorporates the risk mitigation steps in its strategy and operating plans.

The objective of the Risk Management process in the Company is to enable value creation in an uncertain environment, promote good governance, address stakeholder expectations proactively, and improve organisational resilience and sustainable growth.

The Company has in place a Risk Management Policy which articulates the approach to address the uncertainties in its endeavour to achieve its stated and implicit objectives. The Risk Management Committee of the Company has been entrusted by the Board with the responsibility of reviewing the risk management process in the Company and to ensure that all short-term and longterm implications of key strategic and business risks are identified and addressed by the management.

The Company regularly identifies uncertainties and after assessing them, devises short term and long-term actions to mitigate any risk which could materially impact the Companys long-term plans. Mitigation plans for significant risks are well integrated with business plans and are reviewed on a regular basis by the senior leadership.

The Risk Management Policy is available on our website at https:// www.kddl.com/wp-content/uploads/PDF/policies/RCM-19-12- 2022.pdf.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

As per the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 ("the Prevention of Sexual Harassment Act"), the Company has formulated a Policy on Prevention of Sexual Harassment at Workplace for prevention, prohibition and redressal of sexual harassment at workplace and an Internal Complaints Committee has also been set up to redress any such complaints received.

The Company is committed to providing a safe and conducive work environment to all of its employees and associates. The Company periodically conducts sessions for employees across the organisation to build awareness about the Policy and the provisions of the Prevention of Sexual Harassment Act. During the year under review, the Company has not received any complaint related to sexual harassment and accordingly, no complaint was pending as on 31^st March 2024.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34(2)(f) of the Listing Regulations, the Business Responsibility and Sustainability Report ("BRSR") on the environmental, social, and governance disclosures, including BRSR Core consisting of Key Performance Indicators as stipulated under the Listing Regulations is attached as Annexure - IV forming part of this report.

CORPORATE GOVERNANCE REPORT

Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximisang shareholder value legally, ethically and sustainably. At KDDL, the Board exercises its fiduciary responsibilities in the widest sense of the term. Our disclosures seek to attain the best practices in international corporate governance. We also endeavor to enhance long-term shareholder value and respect minority rights in all our business decisions.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on the conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is set out in Annexure-V to the Boards Report.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31^st March, 2023 is available on the website of the Company at https://www.kddl.com .

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed to this report as Annexure VI-A. 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 employees is attached to this report as Annexure VI- B.

AUDITORS AND AUDITORS REPORT Statutory Auditor

S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No 301003E/E300005) were appointed as Statutory Auditor of the Company at 39^th Annual General Meeting (AGM) for a term of five years to hold office from the conclusion of the 39^th Annual General Meeting of the Company till the conclusion of the 44^th AGM of the Company.

Since, the tenure of Statutory Auditor will come an end on the conclusion of 44^th AGM, the Board of Directors pursuant to the recommendations of Audit Committee at its meeting held on 14^th August 2024 has recommended the appointment, subject to the approval of Shareholder of the Company, of M/s Walker Chandiok & Co. LLP, Chartered Accountants (ICAI Firm registration no. 001076N/N500013), as Statutory Auditors of the Company for a term of five years to hold office from the conclusion of the 44^th Annual General Meeting of the Company till the conclusion of the 49^th Annual General Meeting of the Company. The Company is seeking approval of the Shareholders of the Company in ensuing Annual General Meeting and for this purpose, relevant resolution forms part of the Notice convening 44^th Annual General Meeting. The report of the Statutory Auditor forms part of Annual Financial Statements 2023-24 (Standalone and Consolidated). The said report does not contain any qualification, reservation or adverse remark. Information referred to in the Auditors Reports are selfexplanatory and do not call for any further comments.

Cost Auditor

During the year, the Company maintained cost records of its EIGEN unit, pertaining to electricals or electronic products and tools in accordance with the provisions of Section 148 of the act, read with the Companies (Cost Records and Audits) Rules, 2014. M/s

Khushwinder Kumar & Co., Cost Accountants (FRN.: 100123) the Cost Auditor of the Company conducted the audit of cost records of Companys EIGEN unit for financial year commencing from 1^st April 2023 to 31^st March, 2024.

The Board of Directors of the Company, on the recommendations of the Audit Committee has reappointed M/s Khushwinder Kumar & Co. Cost Accountants (FRN: 100123) as the Cost Auditor of the committee to conduct the audit of cost records of Companys EIGEN unit for the financial year 2024-25. As required under the Act read with the Companies (Cost Records and Audit) Rules, 2014, the remuneration payable to Cost Auditors must be placed before the Members at a general meeting for ratification. Hence, a resolution for the same forms part of the notice of the ensuing AGM.

Secretarial Auditor

The Secretarial Audit Report for the financial year 2023-24 given by M/s A. Arora & Co., Practicing Company Secretaries (C.P. No.: 993) is attached herewith as Annexure VII. There has been no qualification, reservation, adverse remark or disclaimer given by the Secretarial Auditors in their Report. Information referred to in the Secretarial Auditors Report are self-explanatory and do not call for any further comments.

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s A. Arora & Co., Practicing Company Secretaries (C.P. No.: 993), as the Secretarial Auditor for conducting Secretarial Audit of the Company for the financial year 2024-25.

REPORTING OF FRAUDS BY AUDITORS

None of the Auditors of the Company has identified and reported any fraud as specified under the second proviso of Section 143(12) of the Act.

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC)

There are no proceedings, initiated by any Financial Creditor or Operational Creditor or by the Company, under the Insolvency and Bankruptcy Code, 2016 as amended, before National Company Law Tribunal or other courts during the year 2023-2024.

INTERNAL FINANCIAL CONTROLS (IFC) AND THEIR ADEQUACY

The Company maintains adequate internal control systems, policies and procedures for ensuring orderly and efficient conduct of the business, including adherence to the Companys policies, safeguard of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures in all areas of its operations. The services of internal and external auditors are sought from time to time as well as in-house expertise and resources. The Company believes that it has sound internal control systems commensurate with the nature and size of its business. The Company continuously upgrades these systems in line with best-in-class practices.

These reports and deviations are regularly discussed with the Management Committee members and actions are taken, whenever necessary. The Audit Committee of the Board periodically reviews the adequacy of the internal control systems.

LISTING OF SHARES

The shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited and the listing fee for the year 2024-25 has been duly paid.

PERSONNEL

Your directors place on record, their appreciation for the significant contribution made by all the employees, whose competence, hard work, and co-operation, has enabled the Company to perform well.

TRADE RELATIONS

The Board wishes to place on record its appreciation for the support and co-operation that the Company received from its suppliers, and other associates. The Company has always looked upon them as partners in its progress and has happily shared with them rewards of growth. It will be Companys endeavor to build and nurture strong links based on mutuality, respect and cooperation with each other and consistent with customer interest.

ACKNOWLEDGEMENTS

Your directors take this opportunity to thank all the investors, clients, vendors, banks, regulatory and government authorities, for their continued support.

	For and on behalf of the Board of Directors
	Yashovardhan Saboo
Date :- th August 2024	Chairman and Managing Director
Place :- Gurugram	DIN : 00012158