Kerala Ayurveda Ltd Directors Report

6. COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES DURING THE YEAR

During the Financial year ended 31^st March 2025, no entity has become or ceased to be a subsidiary, joint venture or associate of the Company.

7. DIVIDEND

The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the company?s growth prospects, has decided that it would be prudent not to recommend any Dividend for the year under review.

8. RESERVES

The company does not propose transferring any amount to reserves during the period. At the end of the year, the other equity of the company is Rs. 1309.47 Lakhs as against Rs. 2074.30 Lakhs of the previous year. During the year the company had a deficit of Rs. 1377.98 Lakhs.

9. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of the Company during the financial year ended 31st March, 2025.

10. DIRECTORS & KEY MANAGERIAL PERSONS:

Appointment / Reappointment / Resignation of Directors/Retirement of Directors Appointment/Reappointment of Directors

1. The Board of Directors have appointed Mr. Samir Dhawan as an Additional Director designated as Non-Executive Independent Director of the Company for a period of five years by passing a Circular resolutionw.e.f. 4^th October 2024 till 03^rd October 2029. The same was subsequently approved by the members in its EGM dated 3^rd January 2025.

2. The Board of Directors have appointed Mr. Kshiti Ranjan Das as an Additional Director designated as Non-Executive Independent Director of the Company for a period of 5 years w.e.f. 4^th October 2024 till 03^rd October 2029. The same was subsequently approved by the members in its EGM dated 3^rd January 2025.

3. The Board of Directors have appointed Mr. Jayarajan Kodikannath as an Additional Director designated as Non Executive Director of the Company w.e.f. 04^th October 2024. The same was subsequently approved by the members in its EGM dated 3^rd January 2025.

4. The Board of Directors have appointed Mr. Utkarsh Singh (DIN: 09244896) as an Additional Director designated as Non-Executive Director of the Company w.e.f. 19^th March 2025. The same was subsequently approved by the members in its EGM dated 18^th June 2025.

* The Board of Directors have appointed Mr. Saif Khan (DIN: 10780306) as an Additional Director designated as Non Executive Director of the Company w.e.f 30^th June 2025. The same was subsequently approved by the members through Postal Ballot dated2 2^nd August 2025.

Resignation of Directors

Mr. Harish Kuttan Menon (DIN: 00585260) completed his first term of 5 consecutive years on June 29, 2024. The Board, on the recommendation of the Nomination and Remuneration Committee and considering his expertise and experience in the varied fields and on the basis of performance evaluation report, had approved the re-appointment of Mr. Harish Kuttan Menon as an Independent Director via resolution by circulation for a term of 3 years with effect from June 30, 2024, to June 29, 2027. The members of the company approved the said re-appointment in the ensuing Annual General Meeting by way of a special resolution.

However, Mr. Harish resigned as an Independent Director of the Company with effect from closure of business hours on 1^st October 2024, due to personal exigencies.

Retirement by Cessation of Tenure

1. Mr. Gokul Patnaik (DIN: 00027915) retired from office on completion of his tenure as a Nen Executive Director of the Company w.e.f. the close of business hours on 23^rd September 2024.

2. Mr. Subramaniam Krishnamurthy (DIN: 00140414) retired from the office on completion of his first term as an Independent Director of the Company w.e.f. the close of business hours on 23rd September, 2024.

Retirement by rotation

Mr. Kodikannath Jayarajan (DIN: 10798470) Director will retire by rotation at the ensuing Annual General Meeting of the company and being eligible has offered himself for re-appointment.

A brief resume of the aforesaid Director and other information have been detailed in the notice convening the Annual General Meeting of the Company. An appropriate resolution for his reappointment is being placed for approval of the members at the ensuing Annual General Meeting.

11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEE CONDUCTED DURING THE YEAR UNDER REVIEW:

An annual calendar of Board and Committee Meetings planned during the year were prepared and circulated in advance to the Directors. During the year Seven* Board Meetings, Four Audit Committee Meetings, Two Nomination Remuneration Committee meetings and Five Stakeholders

Relationship Committee meetings were convened and held. The details of meeting & attendance are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 and pursuant to the relaxations provided.

During the financial year 2024-25, the Board of Directors of the Company met on the following dates-

Further, separate meeting of Independent Directors of the Company was held on February 28, 2025 where the prescribed items enumerated under Schedule IV to the Companies Act, 2013 and clause 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were discussed.

12. DECLARATION BY INDEPENDENT DIRECTOR(S)

The independent directors of your Company have given a declaration to the Company under Section 149 (7) of the Companies Act, 2013 and Rule 6 of Companies (Appointment and Qualification of Directors) Rules 2014 that, they meet the criteria of independence as provided in Sub Section including SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The independent directors have affirmed compliance with the Code of Conduct. The Independent Directors also affirmed compliance under Section 150 of the Companies Act, 2013 including any amendments/ notifications issued from time to time.

In the opinion of the Board of Directors of the Company, Independent Directors of your Company holds highest standards of integrity and are highly qualified, recognized and respected individually in their respective fields. The composition of Independent Directors is the optimum mix of expertise (including financial expertise), leadership and professionalism.

13. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

Periodic presentations are made at the Board and Committee meetings on business and performance updates of the Company and business strategy. The Company has carried out various programmes to familiarize Independent Directors with the Company, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters.

Details of the familiarization programme for Independent Directors are explained in the Corporate Governance Report.

14. DETAILS OF EMPLOYEES AND RELATED DISCLOSURES PURSUANT TO SECTION 197(121 OF THE COMPANIES ACT. 2013

The statement containing information as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as Annexure 2.

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

Pursuant to the provisions of The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the working of its committees. The manner the evaluation has been carried out has been explained in the Corporate Governance Report.

16. NOMINATION AND REMUNERATION POLICY OF DIRECTORS. KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

17. DISCLOSURE ON MANAGING DIRECTOR AND KEY MANAGERIAL PERSONNELS RECEIVING REMUNERATION AND COMMISSION FROM

HOLDING COMPANY OR SUBSIDIARY COMPANY:

The Managing Director and Key Managerial Personnels (KMPs) of the Company have not received remuneration and commission from any of its subsidiary companies.

18. PARTICULARS OF AUDITORS;

1. Statutory Auditors

M/s. G. Joseph & Associates, Chartered Accountants (Registration No. 006310), was appointed by the members in its 32^nd Annual General Meeting, as the Statutory Auditors of the Company for a term of 5 consecutive years with effect from the conclusion of 32^nd Annual General Meeting till the conclusion of 37^th Annual General Meeting

Accordingly, the statutory Auditors have conducted the Audit, and issued their report on the standalone and consolidated financial statements of the Company for the financial year ended March 31, 2025 containing the following observations:

The said Audit Report forms part of this Annual Report.

2. Secretarial Auditors

M/s. SVJS & Associates, a firm of practicing Company Secretaries ("Secretarial Auditors"), carried out the secretarial audit of compliance with the Act and the rules made there under, the Listing Regulations and other applicable regulations as prescribed by SEBI, Foreign Exchange Management Act, 1999 and other laws specifically applicable to the Company.

The Secretarial Audit Report in Form MR-3 for the financial year ended 31^st March 2025 is attached to this Report as Annexure- 4. The Secretarial Auditors Report have the following observations:

The Secretarial Audit Report of Ayurvedagram Heritage Wellness Centre Private Limited, the material subsidiary of the Company is annexed to its Annual Report.

3. Internal Audit and Internal Financial Controls with reference to the financial statements

The Company had appointed Mr. Biju George, Chartered Accountant, as the Internal Auditor for the financial year 2024-25. However, Mr. Biju George tendered his resignation from the position with effect from 2nd January 2025, citing personal reasons. Subsequently, the Board of Directors, at its meeting held on 14th February 2025, appointed Mr. Alphonse Scaria (Firm Registration No.: 0179118S) as the Internal Auditor to conduct the Internal Audit for the remaining quarter ending 31st March 2025.

The Companys internal control systems commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors. Significant audit observations and follow-up actions thereon are reported to the Audit Committee.

4. Cost Auditors

In accordance with the provisions of the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records and have a Cost Audit conducted for the financial year 2024-25. The Company has duly maintained the prescribed cost records for the said financial year, and M/s. SLR & Associates, Cost Accountants, have carried out the Cost Audit for FY 2024-25.

Further, M/s. SLR & Associates, Cost Accountants, have been re appointed as the Cost Auditors of the Company to conduct the audit of cost records for the financial year 2025-26. In terms of the applicable provisions of the Companies Act, 2013, a resolution seeking members ratification for the remuneration payable to the Cost Auditors forms part of the Notice convening the 33rd Annual General Meeting.

19. VIGIL MECHANISM / WHISTLE BLOWER POLICY;

The Policy is an extension of the Code of Conduct for Directors & Senior Management Personnel and covers any unethical and improper actions or malpractices and events which have taken place/suspected to take place.

As per the policy all Protected Disclosures should be addressed to the Vigilance Officer / Company Secretary or to the Chairman of the Audit Committee in exceptional cases.

20. RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Major elements of risk/threats for Ayurveda Industry are regulatory concerns, consumer perceptions and competition. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company.

21. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

Kerala Ayurveda Limited ("the Company") has received a notice dated July 8, 2024, from Mr. Ouma Shankar Ochit of Nexia Baker and Arenson, Mauritius, who has been appointed as the Liquidator of Katra Holdings Limited (KHL), Mauritius ("the Notice"). The Board of Directors held an emergency meeting on July 9, 2024, to discuss this development. A plaint bearing OS No.255 of 2024 ( Suit) was filed by Mr. Ramesh Vangal and heard before the Hon?ble Munsiff Court at Aluva, Emakulam, on July 12, 2024, seeking injunctive reliefs against the Notice.

Further, the aforesaid liquidation proceedings has been terminated against Katra Holdings Ltd. (Promoter of the Company) vide the order no. SC/COM/MOT/OOOl27/2025 passed by the Supreme Court of Mauritius (Commercial/Bankruptcy Division) dated 7^th May 2025.

22. CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility provisions of the Companies Act, 2013 are not applicable to the company and the same is being done as a part of thecorporate ethos of the Company. However, your company always had a deep sense of responsibility towards the community and has conducted bone care camps, diabetes camps and BMD Camps.

23. DEPOSITS:

In terms of the provisions of Section 73 of the Companies Act, 2013, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the public as on 31^st March 2025.

24. DETAILS OF AMOUNT RECEIVED FROM A DIRECTOR OF THE COMPANY OR A RELATIVE OF THE DIRECTOR

During the year under review, the Company has not received any amount from any Director or relative of the Director pursuant to Rule 2 (l)(c)(viiii) of the Companies (Acceptance of Deposits) Rules, 2014.

25. CORPORATE GOVERNANCE:

Your company has complied with corporate governance norms as stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed report on Corporate Governance in line with requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure 5. A certificate from Statutory Auditors confirming the compliance of Corporate Governance is also attached to this report.

26. AUDIT COMMITTEE

The details pertaining to composition and meetings of the Audit Committee are included in the report on corporate Governance.

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of the operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis Report, which forms part of this report attached as Annexure 6.

28. EXTRACT OF ANNUAL RETURN

29. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of loans and Investments and guarantees covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements no. 9 and 10 forming a part of Annual Report.

However, the said loans and Investments and guarantees does not exceed 60% of its paidup-share capital, free reserves or Securities Premium account or 100% of its free reserves and Securities Premium account.

30. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 including certain arms length transactions under that proviso attached as Annexure 7 in Form AOC-2 forms an integral part of this report. All related party transactions are presented to the Audit Committee and the Board. Omnibus approval is obtained before the commencement of the new financial year, for the transactions which are repetitive in nature and for the transactions which are not foreseen.

Further, during the year, related party transactions with M/s. Ayurvedagram Heritage Wellness Centre Private Limited, Material Subsidiary of the Company, which exceeded the materiality threshold limit and ratified by the shareholders dated 18^th June 2025.

31. EMPLOYEE STOCK OPTIONS PLANS fESOPL

The Company has in place Kerala Ayurveda Employee Restricted Stock Unit Plan, 2023" ( "ESOP 2023")which was approved by the Board of Directors in its meeting dated 24th November 2023 and subsequently approved by the shareholders by passing a Special Resolution on 20^th December 2023.

Further the pool size of the Plan was increased from 6,66,640 (Six Lakhs Sixty-Six Thousand Six Hundred Forty) options to 12,03,245 (Twelve lakhs three thousand two hundred and forty-five) options, representing 10% of the paid-up equity share capital of the Company by passing the Special Resolution in EGM dated 18^th June 2025. Further the Company has applied for in principle approval.

The Nomination and Remuneration Committee of the Company at its meeting held on 29^th May,2024 has approved grant of 6,66,640 Stock Options.

The Company has received a certificate from M/s. SVJS & Associates, Secretarial Auditors of the Company, stating that the Kerala Ayurveda Employee Restricted Stock Unit Plan, 2023, has been implemented in accordance with the SEBI SBEB Regulations. The said certificate will be made available to the shareholders, if requested during the 33^rd AGM of the Company.

32. DIRECTORS* RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) of the Companies Act, 2013, in relation to Financial statements of the company, the Board of Directors state that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent 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.

c. The directors have 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 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, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively, and

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

33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL1 ACT. 2013

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. As required under law, an Internal Compliance Committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassment at the workplace.

The Internal Committees shall consist of the following members to be nominated by the employer, namely:-

(a) a Presiding Officer who shall be a woman employed at a senior level at workplace from amongst the employees.

Provided that in case a senior level woman employee is not available, the Presiding Officer shall be nominated from other offices or administrative units of the workplace referred to in sub-section (1).

Provided further that in case the other offices or administrative units of the workplace do not have a senior level woman employee, the Presiding Officer shall be nominated from any other workplace of the same employer or other department or organisation;

(b) not less than two Members from amongst employees preferably committed to the cause of women or who have had experience in social work or have legal knowledge;

(c) one member from amongst non-governmental organisations or associations committed to the cause of women or a person familiar with the issues relating to sexual harassment: Provided that at least one-half of the total Members so nominated shall be women

Further to build awareness in this area, the Company has been conducting necessary trainings in the organization on a continuous basis at all the levels of employee.

The statement showing number of Sexual harassment compliant received during the year are as follows:

34. COMPLIANCE WITH MATERNITY BENEFITS ACT, 1961

The Company is in compliance with the applicable provisions of Maternity Benefits Act, 1961.

35. NUMBER OF EMPLOYEES AS ON THE CLOSURE OF FINANCIAL YEAR: Number of Employees as on 31.03.2025:

1. Female: 256

2. Male: 377

3. Transgender: 0

36. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGOES

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgoes required under Sectionl34 (3)(m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 8 that forms part of this Report.

37. HUMAN RESOURCES

Your Company treats its human resources as one of its most important assets. Your Company continuously invests in attraction, retention, and development of talent on an ongoing basis. A number of programs that provide focused people?s attention are currently underway. Your Companys thrust is on the promotion of talent internally through job rotation and job enlargement.

38. RESEARCH AND DEVELOPMENT

The Research & Development centre of KAL is recognized R&D Lab by DSIR, Ministry of Science and Technology, Govt, of India. This recognition was obtained in 1999 and it was renewed till 2025.

39. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying in unpaid or unclaimed dividends for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF) under Section 124 and Section 125(2) of the Companies Act, 2013.

40. DISCLOSURE WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/UNCLAIMED SUSPENSE ACCOUNT

There are no shares in the DEMAT suspense account/unclaimed suspense account.

41. LISTING WITH STOCK EXCHANGES

The equity shares of the company are listed on Bombay Stock Exchange and the Company confirms that it has paid the Annual Listing Fees for the year 2024-25 to BSE Limited.

42. COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors state that the applicable Secretarial Standards i.e., SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to "Meetings of the Board of Directors and General Meetings" respectively have been duly complied with.

43. INSOLVENCY AND BANKRUPTCY CODE. 2016:

During the financial year, neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

44. SETTLEMENTS WITH BANKS OR FINANCIAL INSTITUTIONS:

During the year under review, no settlements were made by the Company with any Banks or Financial Institutions.

45. THE DETAILS OF DIFFERENCE BETWEEN THE AMOUNT OF THE VALUATION DONE AT THE TTME OF ONE-TIME SETTLEMENT AND THE VALUATION DONE WHTLE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF.

During the FY 2024-25, there were no Insolvency Proceedings initiated against the Company and hence there were no instances of one-time settlement with banks or financial institutions.

46. DETAILS OF PENALTIES/ PUNISHMENT/ COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE DIRECTOR?S REPORT

There were no penahies/punishment/commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

There were no agreements binding on the company between the end of the financial year and the date of this report.

48. ACKNOWLEDGMENTS

The Board places on record its appreciation for the continued patronage, support and co operation extended by its shareholders, customers, bankers, consultants, business associates, all Government and statutory agencies with whose help, cooperation, and hard work the Company was able to achieve the results. Your directors would further like to record appreciation to the efforts of all the employees for their valuable contribution to the Company.