Digidrive Distributors Ltd

Dear Members,

The Board of Directors of the Company ("the Board") have the pleasure of presenting the Second Annual Report on the business and operations of the Company together with Audited Financial Statements for the financial year ended March 31, 2024 ('the year').

FINANCIAL RESULTS

Pursuant to the provisions of the Companies Act, 2013 (‘the Act') and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time (‘Listing Regulations'), the Company has prepared its standalone and consolidated financial statements for the Financial Year ended March 31, 2024, details of which are summarised below:

(Rs. in Lakhs)

Highlights of the Company's financial performance for the year ended March 31, 2024 are as under:

Standalone

During the year under review, total income was Rs. 3914.06 Lakhs as against Rs. 3517.20 Lakhs for the previous year. Profit before tax was Rs. 600.12 Lakhs and Profit after tax (PAT) was at Rs. 434.22 Lakhs. Total Comprehensive Income for the year after all other adjustments was Rs. 8995.49 Lakhs. Retained earnings as on March 31, 2024 was 1,053.48 Lakhs (March 31, 2023 570.62 Lakhs).

Consolidated

Total consolidated income was Rs. 5501.48 lakhs as against Rs. 5035.92 Lakhs for the previous year. Profit before tax was Rs. 567.61 lakhs and Profit after tax (PAT) was at Rs. 405.47 Lakhs Total Comprehensive Income for the year after all other adjustments was Rs. 8977.42 Lakhs.

The operational performance, including major developments have been further discussed in detail in the Management Discussion and Analysis section.

SCHEME OF ARRANGEMENT BETWEEN SAREGAMA INDIA LIMITED AND DIGIDRIVE DISTRIBUTORS LIMITED

Consequent to the approval of the De-Merger Scheme by National Company Law Tribunal (NCLT) and filing of the NCLT order with the Registrar of Companies, Kolkata, the shareholders of the Demerged Company had received equity shares in the ratio of 1

(One) fully paid-up equity shares of INR 10 (Rupees Ten) each of the Company for every 5 (Five) equity shares of INR 1/- (Indian Rupees One only) each held in the Demerged Company, pursuant to the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, in the manner envisaged under the said Scheme.

Subsequently the shares were listed in NSE and BSE and the Company obtained the Trading approvals from both the Stock Exchanges on January 10, 2024.

DIVIDEND

During the year under review, no Dividend was declared by the Company in order to conserve resources.

However, the Dividend Distribution Policy as approved by the Board is available at the Company's website and can be accessed at https://www.digidrivelimited.com/resources/pdf/investor/new/ dividend_distribution_policy_digidrive_limited.PDF

No amount was transferred to the general reserves during the Financial Year ended March 31, 2024.

MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis for the year under review is presented in a separate section forming part of this Report as Annexure 'A'.

SUBSIDIARY

As on March 31, 2024, the Company has only one Subsidiary Company i.e. Open Media Network Private Limited (OMNPL).

Details of operations of the Company's subsidiary are set out in Management Discussion and Analysis, which forms part of the Annual Report. Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statement of the subsidiary company in Form No. AOC-1 is given in the Annual Report. In accordance with the provisions of Section 136 of the Act and the amendments thereto, read with the Listing Regulations, the audited financial statements of the subsidiary company are available on the Company's website and can be accessed at https:// www.digidrivelimited.com/resources/pdf/investor/new/OPEN_ MEDIA_NETWORK_PRIVATE_LIMITED.PDF

The Company has formulated a Policy for determining Material Subsidiaries. The Policy is available on the Company's website and can be accessed at: https://www.digidrivelimited.com/ resources/pdf/investor/new/Policy_for_Determination_of_ Material_Subsidiary.pdf

Open Media Network Private Limited is a material subsidiary of the Company as per Regulation 16 (1) (c) of the Listing Regulations. Further with reference to Regulations 24 of Listing Regulations the Secretarial Audit Report issued by Messrs. M R & Associates, Practicing Company Secretaries of material Subsidiary Company is attached as annexure herewith and forms an integral part of the Annual Report.

Further, the company did not have any Joint venture or Associate Company as on March 31, 2024.

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Act, Indian Accounting Standards and the Listing Regulations, the Consolidated Financial Statements of the Company for the Financial Year 2023-24, duly audited by Company's Statutory Auditors, Messrs. Vidya & Co., Chartered Accountants, forming a part of the Annual Report and shall be laid before the members in the ensuing AGM of the Company as required under the Act.

The audited financial statements including the consolidated financial statements of the Company and all other documents required to be attached thereto, are available on the Company's website and can be accessed at https://www.digidrivelimited.com/ resources/pdf/investor/new/Annual_Report_2022-23.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Act read with the Articles of Association of the Company, Mr. Gopal Rathi (DIN: 00553066) will retire by rotation at the ensuing AGM and being eligible, offer himself for re-appointment. The Board on the recommendation of Nomination and Remuneration Committee, has recommended the said re-appointment.

Further, during the year under review, following changes in Directorship and Key Managerial Personnel have taken place:

i. Appointment of Directors

In accordance with the Companies Act, 2013 and the Listing Regulations, 2015 ("SEBI Listing Regulations") following changes were taken place in the Board of Directors: -

1. Ms. Iram Hassan (DIN: 10183873) was appointed as an Additional Director and Independent Woman Director of the Company for a period of five consecutive years commencing from July 18, 2023 to July 17, 2028.

2. Mr. Santanu Bhattacharya (DIN: 01794958) was appointed as an Additional Director in the category of as an Independent Director of the Company for a period of five consecutive years commencing from July 18, 2023 to July 17, 2028.

3. Mr. Kiran Bhaskar Bandekar (DIN: 10245133) was appointed as an additional Director as well as the Managing Director of the Company w.e.f July 18, 2023.

4. Mr. Vinod Kumar (DIN: 01800577) was appointed as an Additional Director of the Company and an Independent Director of the Company w.e.f July 26, 2023.

Subsequently the shareholders at their Annual General Meeting held on July 26, 2023 approved the appointment of the above Directors.

ii. Resignation of Directors

Mr. Sunil Kumar Sanganeria (DIN: 03568648) (Non- Executive Director) has resigned from the Company with effect from August 10, 2023.

iii. Appointment of Key Managerial Personnel

The Board of Directors in its Board Meeting held on July 18, 2023 had appointed and designated the following persons as Key Managerial Personnel of the Company:

1. Mr. Asish Kumar Ray as the Chief Financial Officer of the Company w.e.f July 18, 2023.

2. Ms. Kriti Jain as the Company Secretary and Compliance officer of the Company w.e.f July 18,2023.

The list of key skills, expertise and core competencies of the Board is provided in the Report on Corporate Governance forming part of this report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees and commission, as applicable, received by them.

The meeting of the Board of Directors were held during the financial year 2023-2024 on April 28, 2023, May 15, 2023, June 15, 2023, July 15, 2023, July 18, 2023, July 26, 2023, November 06, 2023, December 27, 2023 and February 13, 2024.

INDEPENDENT DIRECTORS' MEETING

The Independent Directors of your Company have met on February 13, 2024 without the attendance of Non-Independent Directors and members of the management. The Independent Directors reviewed the performance of Non-Independent Directors, the Committees of the Board and the Board as a whole along with the performance of the Chairman of the Company and assessed the quality, quantity and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards, i.e., SS-1 and SS-2 issued by the Institute of Company Secretaries of India and notified by the Ministry of Corporate Affairs, Government of India, relating to Meetings of the Board of Directors and General Meetings respectively.

BOARD DIVERSITY

The Company recognises the importance of a diverse Board in its success and believe that a truly diverse Board will leverage differences in thought, perspective, industry experience, knowledge and skills including expertise in financial, global business, leadership, technology and other domains, will ensure that Company retains its competitive advantage.

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule II to the Listing Regulations, the Nomination and Remuneration Committee (‘NRC') is responsible for determining qualifications, positive attributes and independence of a Director.

Additional details on Board diversity are available in the Corporate Governance that forms part of this Report.

BOARD EVALUATION

In order to ensure that the Board and Committees of the Board are functioning effectively and to comply with statutory requirements, the annual performance evaluation of all the Directors, Committees of the Board, Chairman of the Board and the Board as a whole, was conducted during the year. The evaluation was carried out based on the criteria and framework approved by the NRC. A detailed disclosure on the parameters and the process of Board evaluation as well as the outcome has been provided in the Report on Corporate Governance.

COMMITTEES OF THE BOARD

Committees of the Board constituted under the Provisions of the Companies Act, 2013 and SEBI Listing Regulations, 2015 focus on certain specific areas and make informed decisions in line with the delegated authority.

The following statutory Committees constituted by the Board according to their respective roles and defined scope:

Audit Committee

Nomination and Remuneration Committee

Stakeholders' Relationship Committee

Risk Management Committee

Details of the composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance.

EQUITY SHARE CAPITAL a) The Authorised share capital of the Company was increased from the existing Rs. 1,00,000/- (Rupees One Lakh Only) divided into 10,000 (Ten Thousand) equity shares having a face value of Rs. 10/- (Rupees Ten Only) each to Rs. 40,00,00,000/- (Rupees Forty Crore Only) divided into 4,00,00,000 (Four Crore) equity shares having a face value of Rs. 10/- (Rupees Ten Only) each.

b) During the year under review, and with the approval of the members at the Extra-Ordinary General Meeting held on July 3, 2023, the paid-up Share Capital has undergone consolidation from 1,00,000 (One Lakh Only) equity shares of Re. 1/- (Rupee One Only) each fully-paid into 10,000 (Ten Thousand) equity shares of Rs. 10/- (Rupees Ten Only) each fully paid-up.

Further, pursuant to the issue and allotment of shares consequent to the effectiveness scheme of arrangement, the Equity Share Capital of the Company stood at Rs.3856.19 lakh divided into 3,85,61,898 Equity Shares of Rs. 10/- and since then there has been no change in the Equity Share Capital as on March 31, 2024.

The Equity Shares of the Company have been listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE) on January 10, 2024. The Company has paid the requisite listing fees to the Stock Exchanges up to the Financial Year 2023-24.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors hereby state and confirm that:

i) in the preparation of the accounts for the financial year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation relating to the material departures, if any;

ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv) the Directors have prepared the annual accounts on a going concern basis;

v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

CORPORATE GOVERNANCE

The Company is committed to focus on enhancing standards of Corporate Governance by long term value creation and protecting stakeholders' interests by applying proper care, skill and diligence to business decisions and constant adherence to the requirement of Listing Regulations, the Act and other applicable statutes.

In compliance with Regulation 34 read with Schedule V of the Listing Regulations, a Report on Corporate Governance for the year under review, is presented in a separate section as a part of this Report as Annexure 'B' along with Additional Shareholder Information as Annexure 'C'.

A certificate from the Practicing Company Secretaries of the Company confirming compliance with the conditions of Corporate Governance, as stipulated under the Listing Regulations, is annexed to this report.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS

No significant and materials orders were passed by the regulators or courts or tribunals impacting the going concern status and your Company's operations in future.

INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, there was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016.

CHANGE IN THE NATURE OF THE BUSINESS

Pursuant to the Scheme of Arrangement between Saregama India Limited ("Demerged Company") and Digidrive Distributors Limited ("Company/Resulting Company"), and their respective shareholders and creditors ("Scheme"), under Sections 230 to 232 and other relevant provisions of the Companies Act, 2013 ("Act"), and as approved by the Hon'ble National Company Law Tribunal, Kolkata Bench on June 22, 2023, the Demerged Company had on the ongoing basis transferred its entire E-commerce Distribution Business to the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

During the year under review, CSR was not applicable to the Company pursuant to Section 135 of the Companies Act, 2013.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

In terms of Regulation 34 (2) (f) of Listing Regulations, BRSR Reporting is not applicable to the Company.

RELATED PARTY TRANSACTIONS

All contracts or arrangements entered into by the Company with its related parties during the year under review were in accordance with the provisions of the Act and the Listing Regulations. All such contracts or arrangements were entered into in the ordinary course of business and at arm's length basis and approved by the Audit Committee. No material contracts or arrangements with related parties were entered into during the year under review. Disclosure of Related Party Transactions as required in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in Form AOC -2 is not applicable for this year.

The Policy Statement on Materiality and dealing with Related Party Transactions is available on the Company's website and can be accessed at https://www.digidrivelimited.com/resources/ pdf/investor/new/POLICY_STATEMENT_ON_MATERIALITY_OF_ RELATED_PARTY_TRANSACTIONS.pdf

Members may please refer to Notes 23 of the Standalone Financial Statements for requisite disclosure in respect of related parties and transactions entered with them during the year under review.

RISK MANAGEMENT

The Company has a structured Risk Management Framework, designed to identify, assess and mitigate risks appropriately. The Risk Management Committee has been entrusted with the responsibility to assist the Board in a) overseeing the Company's risk management framework; and b) ensuring that all material Strategic and Commercial including Cybersecurity, Safety and Operations, Compliance, Control and Financial risks have been identified and assessed and ensuring that all adequate risk mitigations are in place, to address these risks. The Audit Committee has additional oversight in the area of financial risks and controls. Further, details are included in the separate section forming part of this Report.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

The Company has zero tolerance towards sexual harassment at the workplace. In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 ("POSH Act") and Rules made thereunder, the Company has adopted a policy. The Company has constituted an Internal Complaints Committee(s) (ICC) to redress and resolve any complaints arising under the POSH Act. Training / awareness programs are conducted throughout the year to create sensitivity towards ensuring respectable workplace.

Details of complaints received/disposed, if any, during the Financial Year 2023-24 are provided in the Report on Corporate Governance.

INTERNAL FINANCIAL CONTROL (IFC) AND ITS ADEQUACY

The Company has in place adequate internal financial controls for ensuring orderly and efficient conduct of the business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial disclosures. The IFC are adequate and operating effectively. Effectiveness of IFC is ensured through management reviews, controlled self-assessment and independent testing by the Internal Audit Department of the Company.

The Company believes that these systems provide reasonable assurance that the Company's internal financial controls are adequate and are operating effectively as intended.

AUDITORS AND AUDITORS' REPORT

1. Statutory Auditors

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, Messrs. Vidya & Co., Chartered Accountants, (ICAI Firm Registration No. 308022E) are the Statutory Auditors of the Company for a term of five consecutive years, from the First Annual General Meeting till the Sixth Annual General Meeting to be held in the year 2028.

The Auditors' Report annexed to the financial statements for the year under review does not contain any qualifications, reservations or adverse remarks. The Notes on financial statements referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

During the year under review, the Auditors have not reported any instance of fraud as referred to in Section 134(3) (ca) of the Act.

2. Secretarial Auditors

The Board of Directors of the Company have approved and appointed in their Meeting held on July 18, 2023, Messrs. M R and Associates, Practicing Company Secretaries as Secretarial Auditor, to undertake Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report pursuant to Section 204 of the Act, is attached in the Annexure 'D' forming part of this Report.

Pursuant to Regulation 24A of the Listing Regulations, the Secretarial Audit Reports of material unlisted subsidiary of the Company namely Open Media Network Private Limited for the Financial Year 2023-24 are also attached and are forming part of the Annual Report as Annexures ‘E'. The Secretarial Audit Report of the Company and its material unlisted subsidiary do not contain any qualifications, reservations or adverse remarks.

3. Internal Auditor

The Board of Directors of the Company have approved the appointment of its Messrs. MRB & Associates, Chartered Accountant as Internal Auditor on July 26, 2023, to undertake Internal Audit of the Company for the financial year 2023-24.

4. Cost Auditors

The Company is not required to maintain cost records as prescribed by Central Government under Section 148(1)(d) of the Companies Act, 2013.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company promotes safe, ethical and compliant conduct of all its business activities The Company has a Vigil Mechanism and Whistle-blower policy in accordance with Section 177 of the Act and Regulation 22 of Listing Regulations to bring Company's attention to instances of illegal or unethical conduct, actual or suspected incidents of fraud, actions that affect the financial integrity of the Company.

The said policy has been uploaded on the Company's website and can be accessed at https://www.digidrivelimited.com/resources/ pdf/investor/new/Whistle_Blower_Policy.pdf. The said policy provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of the Company through the Company Secretary for redressal. No person had been denied access to the Chairman of the Audit Committee and there was no such reporting during the financial year 2023-24.

INSIDER TRADING

The Company's ‘Insider Trading Prohibition Code' which is in line with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, lays down the guidelines and procedures to be followed and disclosures to be made by the Insiders, while dealing in Company's securities.

In view of the aforesaid Regulations and SEBI Circular, the Company also has in place a Structured Digital Database wherein details of persons with whom Unpublished Price Sensitive Information is shared on need-to-know basis and for legitimate business purposes is maintained with time stamping and audit trails to ensure non-tampering of the data base.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

There was no loan or guarantees made by the Company under Section 186 of the Companies Act, 2013 during the year under review.

DEPOSITS FROM PUBLIC

Your Company during the year under review, has not accepted any deposit from the public and as such no amount of principal or interest was outstanding as on the date of the Balance Sheet.

CONSERVATION OF ENERGY, RESEARCH & DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The Company is engaged in retail sale business majorly in digital marketplace and accordingly, it does not have scope to conserve a substantial amount of energy.

The information related to conservation of energy, research and development, technology absorption and foreign exchange earnings and outgo as required under section 134(m) of the COmpanies Act, 2013 read with Companies (Accounts) Rules 2014,as given in Annexure -'F'.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAS OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY AND TO THE DATE OF THE REPORT:

No material changes and commitments affecting the position of the company took place during the end of the Financial Year of the Company and to the date of the report.

ANNUAL RETURN

Pursuant to Section 92 of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available on the website of the Company and can be accessed at https://www.digidrivelimited.com/resources/pdf/investor/new/ Annual_Return_FY_2023-2024.pdf.

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 is annexed to the Report as ‘Annexure - G'.

None of the employees of the Company are in receipt of remuneration exceeding the limit prescribed under rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended so statement pursuant to Section 197(12) of the Companies Act 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended is not required.

GENERAL

Your directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

a) The Company has not issued any shares with differential voting rights as per the Companies Act, 2013.

b) The Company has not issued any sweat equity shares under the Companies Act, 2013.

c) There were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014.

d) During the year under review, there was no instance of one-time settlement with any bank or financial institution necessitating disclosure or reporting in respect of difference in valuation done by the Company.

ACKNOWLEDGEMENT

Your Directors wishes to place on record its deep sense of appreciation for the committed and dedicated services by the Company's employees at all levels, co-operation received from the shareholders, business partners, financial institutions, banks, consumers and vendors during the year under review.

Your Directors are also grateful for your continued encouragement and support.