Kinetic Engineering Ltd Directors Report

DIRECTORS REPORT - 2023-2024

To The Members,

Your Director are pleased to present the 53^rd (Fifty Third) Annual Report of Kinetic Engineering Limited (KEL) along with the Audited Financial Statements (Standalone as well as Consolidated) for the financial year ended 31^st March, 2024. This Boards Report is prepared based on the standalone financial statements of the Company and presents the key highlights of performance of subsidiary and their contribution to the overall performance of the Company during the year under review.

1. FINANCIAL SUMMARY AND HIGHLIGHTS

		(INR in Lakhs)
Particulars	31st March, 2024	31st March, 2023
Total Revenue	15,183.45	13,750.93
Profit/(Loss) before Interest, Depreciation, Tax and Other Amortizations ("EBIDTA")	1,708.88	1,599.38
Less : Depreciation and Amortization Expenses	642.09	647.62
Finance Cost	545.28	638.69
Tax Expenses - Net	-	-
Profit/(Loss) for the year	521.51	313.07
Other Comprehensive Income	(4.22)	(5.98)
Total comprehensive income/(loss) for the year	517.29	307.09

During the financial year, your Company has achieved net profit of Rs. 521.51 lakhs, a 66.58% jump over the previous years profit. It also achieved revenue growth of 10.42% at Rs. 151.83 cr., compared to last years revenue of Rs. 137.50 cr.

Your company continues to pursue its strategy of adding new strategic customers & programs and exports led growth while investing in cost saving initiatives and improved profitability.

2. AMOUNT, IF ANY, WHICH THE BOARD PROPOSES TO CARRY TO ANY RESERVES

Your Directors do not propose to transfer any amounts to the general reserves of the Company, instead have recommended to retain the entire profits for the financial year ended 31^st March, 2024 in the profit and loss account.

3. DIVIDEND

Considering the future business expansion & growth of the Company Board does not recommend any dividend for the Financial Year 2023-24. Your Companys policy on Dividend Distribution is available at www.kineticindia.com/policies under Investor Relations Section.

4. STATE OF THE COMPANYS AFFAIRS

The performance of businesses is detailed out in the Management Discussion and Analysis Report, which forms part of the Annual Report.

5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT

There were no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

6. CHANGE IN THE NATURE OF BUSINESS

The Company has not changed its nature of business during the financial year ended 31^st March, 2024.

7. CAPITAL AND DEBT STRUCTURE Authorized share capital

There was no change in authorized share capital of the Company. During the year, the company has reclassified Authorised Share Capital subsequently alter the Memorandum of Association. The Authorized share capital of the Company at year end Rs. 1,95,90,82,530/- comprises of Equity and Preference shares.

Subscribed and Paid-up share capital

Issued, subscribed and paid-up share capital of the Company at the year end is Rs. 42,75,67,260/- comprises of Equity and Preference shares.

During the year the Board, Issue and allotted 22,85,000 Equity Shares of Rs. 10/- each at an issue price of Rs. 120/- per share including a premium of Rs. 110/- per share aggregating to Rs. 27,42,00,000/- and 80,000 8.00% Optionally Convertible Cumulative Preference Shares (OCCPS) at Rs. 120/- per share aggregating to Rs. 96,00,000/- on Preferential Basis to the Promoters of the company.

8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the Section 124 applicable provisions of the Companies Act, 2013, read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all the unpaid or unclaimed dividends are required to be transferred to the IEPF established by the Central Government, upon completion of seven (7) years. Further, according to the Investor Education & Protection Fund ("IEPF") Rules, the shares in respect of which dividend has not been paid or claimed by the Shareholders for seven (7) consecutive years or more shall also be transferred to the demat account created by the IEPF

Authority. Your Company does not have any unpaid or unclaimed dividend which is required to be transferred to the IEPF as on the date of this Report.

9. MANAGEMENT

Directors and Key Managerial Personnel

As on 31^st March 2024, our Board comprised of Ten members, headed by a Non- Executive Chairman, One Executive Director and Eight Non-Executive Directors, where in Six are Independent Directors. Two out of Ten members are women directors. The composition of Board is in accordance with the requirements of Listing Regulations 2015 & Companies Act, 2013.

Changes in Directors and Key Managerial Personnel during year

Mr. Dattatray Parvati Navale and Mr. Achal Shirish Kotecha appointed as an Independent Director w.e.f. 11^th August, 2023. Mr. Shirish Ratanlal Kotecha & Mr. Ramesh Jankiram Kabra has completed their second and final term as an Independent Director in Company and consequently ceased to be a Director of the Company w.e.f. closing hours of 31^st March, 2024.

Further Mr. Rohit Prakash Bafana has completed his term as an Independent Director in Company and consequently ceased to be a Director of the Company with effect from 13^th February, 2024. The board has appointed him as an Independent Director w.e.f. 30^th May, 2024 and subsequently members approved his appointment through postal ballot dated 30^th June, 2024.

In the last AGM held on 29^th September, 2023 shareholders approved the reappointment of Mr. Arun Hastimal Firodia as a Non-Executive Director. Further Mrs. Jayashree Arun Firodia, Director of the Company, who attains 81 years of age and retires by rotation, being eligible, offers herself for re-appointment at the ensuing Annual General Meeting.

During the year under review, there is no change occurred in the Key Managerial Personnel of the Company. Declaration given by Independent Directors

The independent directors have submitted a declaration of independence, stating that they meet the criteria of independence as provided under section 149(6) of the Companies Act, as amended, and regulation 16 of the SEBI Listing Regulations.

The independent directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors. The Board took on record the declaration and confirmation submitted by the independent directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the requirements of regulation 25 of the SEBI Listing Regulations.

Lead Independent Director

Mr. Jinendra Hirachand Munot acts as the "Lead Independent Director" and co-ordinates with the company senior management on behalf of the other independent directors for various information flow and advising on improvement areas, among others.

Familiarization Program for Independent Directors

The Company has in place a familiarization program for its Independent Directors. The objective of the program is to familiarize Independent Directors on our Board with the business of the Company, industry in which the Company operates, business model, challenges etc. through various programs which includes interaction with subject matter experts within the Company, meetings with our functional leads etc. on regular basis.

Statement regarding Opinion of the Board with regard to Integrity, Expertise and Experience (Including the Proficiency) of the Independent Directors appointed during the Year

Mr. Dattatray Parvati Navale and Mr. Achal Shirish Kotecha are the independent Directors of the Company appointed during the year. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of Independent Directors on the Board.

Board Meetings

The Board met Five (5) times during the financial year 2023-24 viz. 30-May-23, 11-Jul-23, 11-Aug-23, 09-Nov- 23 and 13-Feb-24.

Audit Committee

All the Committee members are Non-Executive Independent Directors. All the Members of the Committee possess sufficient accounting and financial management knowledge. The Company Secretary of the Company is the Secretary of the Committees also. The recommendations of the Audit Committee during the year were accepted by the Board.

Nomination & Remuneration Committee

All the Committee members are Non-Executive Independent Directors. The Company Secretary of the Company is the Secretary of the Committees also. The recommendations of the Committee on the director remuneration during the year were accepted by the Board.

Board Diversity and Policy on Directors Appointment and Remuneration

Your Company have always strived for relevant diversity in the Board representing a healthy mix of gender & experience. The policy on Nomination and Remuneration and Board Diversity adopted by the Board sets out the criteria for determining qualifications, positive attributes and independence while evaluating a person for appointment / reappointment as a Director or as KMP, with no discrimination on the grounds of gender, race or ethnicity, nationality or country of origin.

The detailed Nomination & Remuneration Policy is annexed as Annexure-IV and forms part of this Report and is also available on the website of the www.kineticindia.com/policies under Investor Relations Section.

Stakeholders Relationship Committee

The Committee assists the Board and the Company in maintaining healthy relationships with all stakeholders. All the Committee members are Non-Executive Independent Directors. The Company Secretary of the Company is the Secretary of the Committees also.

Risk Management Committee

The Company was not covered under the regulation 21 of the Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015. Hence its not required to form Risk Management Committee.

Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 2015, Independent Directors at their discussion, without the participation of the Non-Independent Directors and Management, evaluated the Boards performance, Performance of the Chairman and other Non-Independent Directors.

The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and Independent Directors (without participation of the relevant Director).

The criteria for performance evaluation have been detailed in the Corporate Governance Report which forms part of the Annual Report.

Directors Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the representations received from the Operating Management, and after due enquiry, confirm that:

(a) In the preparation of the annual accounts for the Financial Year ended 31^st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) The Directors had in consultation with Statutory Auditors, selected 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 as at 31^st March, 2024;

(c) The Directors have 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 irregularities;

(d) The Directors have prepared the annual accounts on a going concern basis;

(e) The Directors have laid down adequate Internal Financial Controls to be followed by the Company and such Internal Financial Controls were operating effectively during the Financial Year ended 31^st March, 2024;

(f) 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 throughout the Financial Year ended 31^st March, 2024.

10. INTERNAL FINANCIAL CONTROLS

The Company has adequate internal control system commensurate with its size and nature of business for ensuring efficiency of operations, adherence to management policies and protection of companys assets. The Companys Audit Committee periodically reviews the internal control systems and compliance with Companys policies, procedures and laws.

11. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As of 31^st March, 2024, your Company have one subsidiary company i.e. Kinetic Watts and Volts Limited. The statement under Section 129(3) of the Companies Act, 2013 in respect of the subsidiaries in Form AOC-1 is attached as Annexure III. The Consolidated Accounts of your Company duly audited by the Statutory Auditors are presented as part of this Report. Apart from this subsidiary Company does not have any other subsidiary, associate or a joint venture company.

12. DEPOSITS

During the year under review, your Company had not accepted any deposits within the meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in Note 4 & 5 of Notes to the Financial Statements.

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, your Company has undertaken Related Party Transaction which are executed in the ordinary course of business and at arms length basis. As required under the Listing Regulations, 2015, Related party transactions are placed before the Audit Committee for approval. At the beginning of the financial year, prior approval of the Audit Committee is obtained on an omnibus basis for continual transactions. The corresponding actual transactions then become a subject of review by the Committee at subsequent meetings.

There has been no materially significant Related Party Transactions during the year under review, having potential conflict with the interest of the Company. Necessary disclosures required under the Accounting Standard (AS) have been made in the Notes to the Financial Statements for the year ended 31^st March, 2024.

Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014), the statement containing details of the related party transaction at the arms length in the form AOC-2, has been attached to this report as Annexure-II.

Pursuant to Regulation 23(9) of the Listing Regulations, the Company has filed the half yearly reports on related party transactions with the stock exchanges on which the shares of the Company are listed.

The policy on Related Party Transactions as approved by the Board is available on the Companys website at www.kineticindia.com/policies under Investor Relations Section.

15. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is not having a net worth of Rs. 500 Crores or more or its turnover does not exceed Rs. 1000 Crores or more or its net profit does not exceed Rs. 5 Crores or more and hence, it is not required to frame a CSR policy or spend amount on CSR as per the provisions of Section 135 of Companies Act, 2013.

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

The information pertaining to conservation of energy, technology absorption, 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 furnished as Annexure I to this Report.

17. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY

The Management has put in place adequate and effective system and man power for the purpose of risk management. To identify the risk associated with the Company well in advance and implement appropriate mechanism to mitigate the risk is an essence of business. The management and every employee of the Company is committed to observe the risk management techniques.

18. MATERIAL ORDERS OF JUDICIAL BODIES /REGULATORS

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

19. AUDITORS Statutory Auditor

The Board has approved the appointment of M/s Pawan Jain & Associates (FRN: 0107867W) Chartered Accountants, Pune to hold office for five years until the conclusion of Annual General Meeting to be held in the calendar year 2027 in accordance with the provisions of Section 139 of the Companies Act, 2013.

Auditors Report

There are no qualifications, reservations or adverse remarks made by M/s Pawan Jain & Associates, Statutory Auditors, in their report for the financial year ended 31^st March, 2024.

Pursuant to the provisions of Section 143(12) of the Companies Act, 2013, the statutory auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Secretarial Audit - FY 2023-24

Mr. Dinesh Birla, proprietor of Dinesh Birla and Associates, Practicing Company Secretaries was appointed by the Board to conduct the audit of the Companys Secretarial Records in respect of the financial year 2023-24. The Board has taken corrective action for remarks mentioned in Secretarial Audit report appears as in Annexure - VI.

Pursuant to the provisions of Section 143(12) of the Companies Act, 2013, the secretarial auditors have not reported any incident of fraud to the Audit Committee during the year under review.

Secretarial Auditor - FY 2024-25

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Dinesh Birla, Practicing Company Secretary (Certificate of Practice No.: 13029) to undertake the Secretarial Audit of the Company for the financial year 2024-25.

Cost Records and Cost Audit

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

20. COMPLIANCE WITH SECRETARIAL STANDARD

The Company generally complies with all the applicable Secretarial Standards issued by the Council of the Institute of Company Secretaries of India.

21. CORPORATE INSOLVENCY RESOLUTION PROCESS

Neither any application was made, nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016, against the Company.

During the year the Company has not made any application under the Insolvency and Bankruptcy Code, 2016 and no proceeding is pending under the Code.

22. EXTRACT OF ANNUAL RETURN:

Pursuant to the provisions of Section 134(3) (a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft of the Annual Return of the Company for the financial year 31^st March, 2024 is uploaded on the website of the Company and can be accessed at www.kineticindia.com under Investor Relations Section.

23. ONE TIME SETTLEMENT AND VALUATION

During the year the Company has not made any one-time Settlement and Valuation.

24. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has in place, the requisite Internal Committee as envisaged in the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No complaints on the issues covered by the above Act were received, during the year. During the year Company conducted multiple training session and programs for stakeholders on the prevention of sexual harassment at work place.

POSH Policy of the Company is available on the Companys website at www.kineticindia.com/policies under Investor Relations Section.

25. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the year no companies come or ceased to be its subsidiaries, joint ventures or associate companies.

26. REMUNERATION OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:

The information required under Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-V and forms part of this Report.

27. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

Your Company has established a Vigil Mechanism/ Whistle Blower Policy to enable stakeholders (including Directors and employees) to report unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct. The Policy provides adequate safeguards against victimization of Director(s)/employee(s) and direct access to the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if any reported under this Policy will be appropriately and expeditiously investigated by the Chairman.

Your Company hereby affirms that no Director/Employee have been denied access to the Chairman of the Audit Committee and that no complaints were received during the year. The Policy can be accessed from the companys website at www.kineticindia.com/policies under Investor Relations Section.

28. OTHER DISCLOSURES

Consolidated Financial Statements: The Consolidated financial statements of the Company and its subsidiaries for FY 2023-24 are prepared in compliance with the applicable provisions of the Companies Act, 2013 and as stipulated under Regulation 33 of the Listing Regulations as well as in accordance with the Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated financial statements together with the Independent Auditors Report thereon forms part of this Annual Report.

Internal Audit: The Company has the Internal Audit department which provides an appropriate level of assurance on the design and effectiveness of internal controls, its compliance with operating systems and policies of the Company at all locations. Based on the internal audit report, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective measures thereon are presented to the Audit Committee.

Credit Rating of Securities: CRISIL Ratings has assigned its CRISIL BB+/Stable rating to the bank facilities of Kinetic Engineering Limited (KEL).

Total Bank Loan Facilities Rated	Rs.25 Crore
Long Term Rating	CRISIL BB+/Stable (Assigned)

Industrial Relations: During the year under review, the industrial relations remained cordial.

Accounting treatment in preparation of financial statements: The financial statements of the Company have been prepared in accordance with Indian Accounting Standard ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 read with Section 133 of the Companies Act, 2013.

Listing Fees: Your Company has paid requisite annual listing fees to BSE Limited (BSE) where its securities are listed.

Return on Equity: Return on Equity of the Company for last three years -

Year	% of ROE (Standalone Basis)
2023-24	11.76
2022-23	15.10
2021-22	13.31

Details of revision of financial statement or the Report: There was no revision in the Financial Statements.

Director Knowledge Session: During the year under the review Company conducted session on topic likes future economic outlook in automobile industry, legal & regulatory updates, skill & knowledge improvements etc. Majority directors attained these sessions.

29. ADDITIONAL DISCLOSURES UNDER LISTING REGULATIONS

Statement of deviation or variation: There was no deviation or variation in connection with certain terms of preferential issue, OCCPS, etc.

Management Discussion and Analysis Report: Management Discussion and Analysis as required under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is provided separately in the Annual Report.

Corporate Governance Report: Your Directors are pleased to report that your Company strives to ensure that best corporate governance practices are identified, adopted and consistently followed. Your Company believes that good governance is the basis for sustainable growth of the business and for enhancement of stakeholders value. Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate Section titled Report on Corporate Governance has been included in this Integrated Annual Report and the certificate of M/s. Pawan Jain & Associates., Chartered Accountants, Pune the Statutory Auditors of the Company certifying compliance with the conditions of Corporate Governance as stipulated under relevant Regulations of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is obtained and annexed with the report on Corporate Governance.

Suspension of Trading: The Companys securities were not suspended for trading during the year.

30. ACKNOWLEDGEMENT

The Directors express their sincere thanks to Central & State Governments, Financial Institutions, banks who have extended their support in form of Credit Facilities, suppliers and stakeholders for the support extended to the Company and also wish to place on record their appreciation of the dedicated services rendered by the employees of the Company.

On behalf of the Board of Directors

For Kinetic Engineering Limited

S/d

Arun Hastimal Firodia

Chairman

(DIN: 00057324)

Date: 14^th August, 2024

Place: Pune