KPT Industries Ltd

To,

The Members,

Your Directors have pleasure in presenting the 48th Annual Report together with the Audited Accounts of the Company for the year ended 31st March, 2024.

Rs.In Lakhs

2. OPERATIONS AND FUTURE PROSPECTS:

In the financial year 2023-24, the orders for E-vehicles which were pursued and expected by your Company, could not be materialised. Yet, as seen above, your Company was able to push the sales in the Power Tools and Blowers sectors to compensate and still maintain the top line, vis-a-vis last year. Despite the drop in the sale of E-vehicles, the profit before tax improved from Rs.1199.77 lakhs last year to Rs.1634.28 lakhs, this year, which is a jump of 36.22%. This was achieved by a judicious mix of products, particularly in the Power Tools segment.

We are confident that, we shall continue to produce better results in year 2024-25, as well.

3. DIRECTORS & KEY MANAGERIAL PERSONNEL:

The Board comprises of 8 Directors out of which four are Independent Directors, two Executive Directors, one Non-Independent Director and one Non-Executive Woman Director.

• Pursuant to provisions of Section 203 of the Companies Act, 2013, Mr. Prakash Kulkarni, Executive Chairman, Mr. Dilip Kulkarni, Managing Director - Chief Financial Officer (CFO) and Ms. Aishwarya Toraskar, Company Secretary, are the Key Managerial Persons of the Company.

• Mr. Dilip Kulkarni resigned from the office of Chief Financial Officer w.e.f 31st March, 2024 and Mr. Suhas Kharote has been appointed as Chief Financial Officer by the Board of Directors in their meeting held on 01-04-2024, pursuant to Section 203 of the Companies Act, 2013 w.e.f 01-04-2024.

• The Independent Directors Mr. Darius Shroff, Mr. Shishir Shirgaokar and Mr. Sanjay Kirloskar have completed their two consecutive terms of five years each i.e. from 01-04-2014 to 31-03-2019 and from 01-04-2019 to 31-03-2024 and have ceased to hold office as an Independent Director w.e.f 31-03-2024.

• Pursuant to Section 149, 150 and 152 read with Schedule IV and any other applicable provisions, if any, of the Companies Act, 2013 and the rules made thereunder, applicable regulations of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 Mr. Sanjay Buch, Mr. Niraj Shirgaokar and Ms. Rama Kirloskar have been appointed as an Additional Director of the Company in the capacity of an Independent Director not liable to retire by rotation and to hold office for a term of 3 (three) consecutive years w.e.f 01-04-2024 to 31-03-2027. The appointment is subject to Members approval, through a Postal Ballot mechanism.

Declarations of Independence from Independent Directors

Company has received necessary declaration from, each independent director under Section 149(7) of the Companies Act, 2013, that he / she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

The Board noted the dedication of Independent Directors to the Board, with regards to their integrity, expertise and experience including their proficiency.

Directors Retiring by Rotation

Mr. Dilip Kulkarni, Managing Director (DIN: 00184727), retires by rotation as per the provisions of Companies Act, 2013, and is eligible to be reappointed as a Director of the Company in the forthcoming Annual General Meeting. The Board recommends his appointment.

Mrs.Prabha Kulkarni, Director (DIN: 00053598), retires by rotation as per the provisions of Companies Act, 2013, and is eligible to be reappointed as a Director of the Company in the forthcoming Annual General Meeting. The Board recommends her appointment.

4. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of their knowledge and belief and according to the information and explanation provided to them, your Directors, pursuant to Section 134(5) of the Companies Act, 2013, 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, 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;

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 were devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively;

f) 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.

5. MEETINGS:

During the year Four (4) Board Meetings, Four (4) Audit Committee Meetings, Three (3) Nomination and Remuneration Committee Meetings, Two (2) Corporate Social Responsibility Committee Meetings and Seventeen (17) Stakeholder Relationship Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.The dates and related information is given in Corporate Governance Report, annexed to this Report at ANNEXURE-IV.

6. ANNUAL EVALUATION OF PERFORMANCE OF BOARD AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

During the year under review, the Board has initiated formal evaluation process for its own performance and of its own committees and individual directors, pursuant to Section 134 (3) (p) of the Companies Act, 2013 and Rule 8 (4) of the Companies (Accounts) Rules, 2014. Details of the evaluation mechanism are provided in the Corporate Governance Report. A meeting of Independent Directors was held on 19th March, 2024 for evaluation of Board performance.

7. NOMINATION AND REMUNERATION POLICY:

The Company has framed Nomination and Remuneration Committee to decide appointment and remuneration of Directors, Independent Directors and Key Management Personnel.

a) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required.

b) Remuneration is linked to performance.

c) Ensuring that remuneration to directors, Key Managerial Personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals.

d) The criteria for determining qualifications, positive attributes and independence of a Director.

The Nomination and Remuneration Policy of the Company is available on www.kpt.co.in pursuant to provisions of Section 178(4) of the Companies Act, 2013.

8. STATUTORY AUDIT REPORT:

With respect to Statutory Auditor's Report 2023-24, there are no qualifications, adverse remarks or disclaimers made by the statutory auditors on the financial statements of the company. The Company continues to have robust internal control system in place.

9. SECRETARIAL AUDIT REPORT:

With respect to Secretarial Auditor's Report 2023-24 Secretarial Auditors have mentioned his qualifications / observations, to which appropriate management responses have been given. The Company continues to have robust internal control system in place.

1) The term of office of independent directors ended on March 31, 2024. According to the provisions of the Regulation 17(1E) of the SEBI (LODR) Regulations, 2015, the Company did not fill the resulting vacancy before the expiration of the term of office. However, the Company has appointed three independent directors at the Board Meeting held on April 01,2024.

The Listed entity did fill the vacancy created by expiration of term of three independent directors, by appointing fresh three independent directors at the Board Meeting held on April 01, 2024.

2) The listed entity has issued Duplicate Share Certificates on November 28, 2023, and December 19, 2023. However, intimations of the same have not been made to the Stock Exchange pursuant to the provisions of Regulation 39(3) of the SEBI (LODR) Regulations, 2015.

Considering the fact that Compliance Officer was on a maternity leave, the intimation to Stock Exchange pursuant to the provisions of Regulation 39(3) of the SEBI (LODR) Regulations, 2015, was left to be communicated inadvertently and there is no malafied intention.

3) The Company had received the Show Cause Notice under Section 148 of the Companies Act, 2013 from the Cost Audit Branch of the Ministry of Corporate Affairs dated December 29, 2023, regarding applicability of Cost Audit for the financial years 201819 and 2019-20. The same was not intimated to the stock exchange pursuant to sub-clause 20 Para A of Schedule III read with Regulation 30 of the SEBI (LODR) Regulations, 2015.

Considering the fact that Compliance Officer was on a maternity leave, the intimation to Stock Exchange pursuant to sub-clause 20 of Para A of Schedule III read with Regulation 30 of SEBI (LODR) Regulations, 2015, was left to be communicated inadvertently and there is no malafied intention. Subsequently, the listed entity did reply to the show cause notice, vide letter dated January 23, 2024 addressing "The Deputy Director Cost Audit Branch, Ministry of Corporate Affairs, New Delhi", within prescribed time

Secretarial Audit Report in form MR-3 as per Section 204 (1) of the Companies Act, 2013, read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached herewith as ANNEXURE-I, to this report.

Secretarial Compliance Report as per Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, for the financial year ended on 31st March, 2024, is attached herewith as ANNEXURE-II, to this report.

10. DIVIDEND:

As a gesture to acknowledge the strength of the Company, your Directors are pleased to recommend a payment of dividend at the rate of 50% i.e. Rs. 2.50 per share of Rs. 5.00 each, for the year ended on 3151 March, 2024.

11. CHANGE IN NATURE OF BUSINESS:

During the year under review, there were no changes in nature of business of the Company.

12. TRANSFER TO RESERVES:

During the year under review, the Company has not transferred any amount to its reserves.

13. CHANGES IN CAPITAL OF THE COMPANY:

There are no changes in the capital of the Company.

14. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY: Not Applicable.

15. DEPOSITS:

The Company has not accepted deposits during the financial year.

16. EXTRACT OF ANNUAL RETURN:

The Annual Return of the Company is available on www.kpt.co.in pursuant to provisions of Sections 92(3) and 134(3) of the Companies Act, 2013.

17. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

During the year under review, the Company has not advanced any loans/ given guarantees / provided securities or made any investments.

18. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Related party transactions that were entered during the financial year, were on an arm's length basis and were in ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Transactions with related parties entered by the Company in the normal course of business are periodically placed before the Audit Committee for its omnibus approval and the particulars of contracts entered during the year as per Form AOC-2 is enclosed as ANNEXURE-III to this Report.

19. RELATED PARTY DISCLOSURE AS PER SCHEDULE V [Regulation 34(3)]:

Disclosures of transactions of the listed entity with any person or entity belonging to the promoter / promoter group which hold(s) 10% or more shareholding in the listed entity, in the format prescribed in the relevant accounting standards for annual results. N.A.

A) CONSERVATION OF ENERGY

This industry does not fall under Schedule prescribed under Rule (2). Efforts are made to keep the consumption of Power and Fuel to a minimum level. KPT Industries Ltd., also generates clean power by use of wind power.

I) Specific areas in which R&D carried out:

• Enhancing life of electric motors,

• Reducing maintenance cost of products,

• Development of new products / designs / procedures / methods / materials / machines / tools in existing products / processes in related manufacturing areas / Improving the electrical characteristics of the motors.

II) Benefits derived as a result of above R&D:

- Improved performance/longer service life of product,

- Complete safety,

- Cost reduction,

- Enhancement of quality and service to the customers.

III) Future plan of action:

Company plans to continue development activities on the above lines,

IV) Expenditure on R&D:

Expenditure of revenue nature incurred on R&D is charged under the respective heads, Capital expenditure on acquisition of assets for R&D, if any, is depreciated as Plant & Machinery.

TECHNOLOGY ABSORPTION, ADAPTATION & INNOVATION

The Company has not imported any technology during the last thirteen years. There is a continuous flow of information between the Company and the key suppliers from abroad. The Company's key managers also visit various markets and are exposed to latest products and technologies. Interaction with Suppliers of key components, on a regular basis, keeps the Company abreast with the latest development in product technology, manufacturing process and methods, quality assurance, marketing and management systems. We have, over the years, built requisite infrastructure and technically competent manpower to translate and adopt the latest technical know-how into improved products for our customers.

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

21. THREATS & CONCERNS:

The leading brands always come up with new products. We keep on studying this and commensurate actions are taken.

22. SAFETY, HEALTH & ENVIRONMENT:

Our Company continues to pursue its environmental friendly approach towards industrial growth. Company takes significant measures, commensurate with the size of the Company, to ensure safety of the plant and workers, good health of the employees and sustainable environment.

23. TECHNICAL INNOVATION:

No significant products development, other than improving old ones, was made during the year.

24. CORPORATE GOVERNANACE CERTIFICATE:

Our Company has been following good Corporate Governance since its inception. The shares of our Company are listed on BSE Ltd., (Bombay Stock Exchange). We are regularly and timely complying with the requirements as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has paid the Annual Listing Fees for the Financial Year 2023-24. As required by the SEBI Guidelines, a Corporate Governance Report is annexed as ANNEXURE-IV.

25. VIGIL MECHANISM:

The Company has established a Vigil Mechanism for Directors and employees to report their genuine concerns and to provide adequate safeguards against victimization of persons who use such mechanism. Company has maintained Vigil Mechanism/Whistle Blower Policy and the same is also placed on our website www.kpt.co.in.

26. RISK MANAGEMENT POLICY:

The Board of Directors of Company is continuously monitoring various risk attached to business. On regular basis, Board and senior managers identify the risk elements. Board and senior managers, on the basis of past experience, ensure management of risk and take necessary steps to mitigate the risks.

In the opinion of the Board there are no risk elements which may threaten the existence of the Company, except general market risks, risk due to effect of changes in government policies, competition risks and risk due to natural calamities.

27. SUBSIDIARY COMPANIES, JOINT VENTURE OR ASSOCIATE COMPANIES:

Company does not have any Joint Venture, Subsidiary or Associate Companies.

28. IMPACT OF ANY REGULATION OR COURT ORDERS:

There are no material orders passed by the Regulation or Courts impacting on the Company's business.

29. STATEMENT OF COMPLIANCE OF PROVISIONS OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. No such cases were reported during the Financial Year 2023-24.

30. EMPLOYEES' REMUNERATION:

Details of the remuneration as required under Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached as ANNEXURE-V to this Report.

31. INTERNAL FINANCIAL CONTROL SYSTEM AND THEIR ADEQUACY:

The Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The scope of the Internal Audit is decided by the Audit Committee and the Board. To maintain its objectivity and independence, the Board has appointed an Internal Auditor, which reports to the Audit Committee of the Board on a periodic basis.

The Internal Auditor monitors and evaluates the efficacy and adequacy of Internal control Systems in the Company, its compliance with operating systems, accounting procedures and policies for various functions of the Company. Based on the report of Internal Auditor, management undertakes corrective action wherever required and thereby strengthens the control further.

The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

32. MAINTENANCE OF COST RECORDS:

Maintenance of cost records is required by the Company under section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are made and maintained.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulation 34 (2) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailed Management discussion & Analysis Report, is attached as ANNEXURE-VI to this Report.

34. CORPORATE SOCIAL RESPONSIBILITY:

The provisions of Corporate Social Responsibility are applicable from F.Y. 2022-23 and accordingly Company is required to spend at least 2% of its average net profits for the immediate past 3 financial years.

The brief outline of the Corporate Social Responsibility (CSR) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the financial year 2023-2024 year in the format prescribed in the Companies (CSR Policy) Rules, 2014 is attached as ANNEXURE-VII to this Report.

35. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year: Not Applicable.

36. The details of difference between amounts of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof: Not Applicable.

37. FRAUD REPORTING {Section 134(3) (Companies Act, 2013)}:

There was no fraud reported by the Auditors under Section 143(12) of the Companies Act, 2013.

38. COMPLIANCE OF SECRETARIAL STANDARDS:

Your Company has complied with the applicable Secretarial Standards during the FY 2023-24.

39. INVESTOR EDUCATION AND PROTECTION FUND:

The Company has transferred the unclaimed dividends declared up to the financial year 2015 to the Investor Education and Protection Fund of the Central Government.

40. Designated Person U/s 89 of the Companies Act, 2013 "Declaration in Respect of Beneficial Interest in any Share:

The Company Secretary is appointed as "Designated Person" U/s 89 of the Companies Act, 2013, and pursuant to Notification dated 27th October, 2023 amending the Companies (Management and Administration) Rules, 2014 for furnishing, and extending cooperation for providing, information to the Registrar or any other authorized officer with respect to beneficial interest in shares of the Company.

41. ACKNOWLEDGEMENTS:

The Board of Directors would like to thank their customers, vendors, dealers and business associates for their continued support during the year.

As other mandatory disclosures under the provisions of applicable statutes are not applicable to your Company, the same has been not disclosed in the report.

The Board of Directors sincerely appreciates and thanks its esteemed Shareholders for their continued support and confidence reposed in the Company.

Your Directors also wish to place on record their appreciation of the contribution made by employees at all levels, during the year.