Khadim India Ltd

The Directors are pleased to present the 43^rd Annual Report on the business and operations of Khadim India Limited ("the Company") together with the Audited Financial Statements for the financial year ended March 31, 2024.

Financial Highlights

The Financial Highlights are set out below:

In Rs million

Dividend

Considering the inadequacy of profits during the financial year ended March 31, 2024, the Board of Directors of the Company has not proposed any dividend on equity shares.

General Reserve

No amount has been transferred to the General Reserve for the financial year ended March 31, 2024.

Operations and State of Company's Affairs

On a standalone basis, the revenue generated from operations for the financial year 2023-24 stood at ' 6,149.04 million, which was lower by 6.87% compared to the previous financial year 2022-23. The profit after tax for the year is Rs 63.16 million in comparison to profit after tax of ' 175.07 million for the previous financial year.

The details of Company's affairs have been included in the Management Discussion and Analysis Report, forming part of this report.

Internal Controls

The details in regard to Internal Financial Controls and its adequacy are included in the Management Discussion & Analysis Report, which is a part of this Report.

Employee Stock Option Plan

There has been no material change in the Employee Stock Option Plan 2017 ("ESOP 2017") during the year under report. Disclosures with respect to ESOP 2017 as required under relevant Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are available in the Notes to the Financial Statements.

Approval of the members by way of a Special Resolution had been obtained on May 07, 2021 (vide Postal Ballot Notice dated March 25, 2021) for formulation and implementation of Khadim Employee Stock Option Plan 2021 ("ESOP 2021"). However, no options have been granted post approval.

The certificate from M/s. BKG & Company, Company Secretaries (Firm Registration No. S2004WB868500), Secretarial Auditor of the Company, with respect to the implementation of the Company's ESOP 2017 and ESOP 2021 would be available for inspection by the shareholders during the ensuing Annual General Meeting. A copy of the same will also be available for inspection at the registered office of the Company.

Fully Convertible Equity Share Warrants

In accordance with the provisions of Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (SEBI ICDR Regulations), the Board of Directors of the Company in its meeting held on November 24, 2023 had approved the issuance of 4,08,768 Fully Convertible Equity Share Warrants ('Warrants') [i.e., one fully paid up Equity Share upon conversion of every one Warrant held] of the face value of ' 10/- (Rupees Ten Only) each of the Company, at an exercise price of ' 365/- (including a premium of ' 355/-), aggregating upto ' 149.20 million for cash, on preferential basis to the persons belonging to Promoter / Promoter Group and Non - Promoter category.

Upon receipt of approval by the shareholders of the Company vide Extra-Ordinary General Meeting held on December 23, 2023 and on receipt of in-principle approvals from the Stock Exchanges, such Warrants were allotted on February 02, 2024 post receipt of an aggregate consideration of ' 37.30 million from the said allottees, towards minimum 25% of the total consideration of the Warrants.

Subsequently, on receipt of balance 75% of the total consideration of the Warrants, the Board of Directors of the Company had allotted 1,64,384 Equity Shares on March 22, 2024 pursuant to conversion of equivalent number of Warrants allotted to one of the Promoters of the Company on preferential basis, as aforesaid, out of total 4,08,768 Warrants.

There was no deviation or variation in the utilisation of proceeds raised through issuance of Warrants on preferential basis, by the Company as on the date of this Report.

Share Capital

The Authorized Share Capital of your Company is ' 60,00,00,000/- divided into 6,00,00,000 Equity Shares of face value of ' 10/- each.

The Issued, Subscribed and Paid-up Share Capital of your Company is ' 18,13,39,980/- divided into 1,81,33,998 Equity Shares of face value of ' 10/- each.

Changes in Share Capital, if any

Consequent to allotment of 1,64,384 Equity Shares on March 22, 2024 pursuant to conversion of equal number of Warrants allotted to one of the Promoters of the Company on preferential basis as aforesaid, the Issued, Subscribed and Paid-up Share Capital of the Company increased from ' 17,96,96,140/- divided into 1,79,69,614 Equity Shares of face value of ' 10/- each to ' 18,13,39,980/- divided into 1,81,33,998 Equity Shares of face value of ' 10/- each.

The Equity Shares so allotted rank pari-passu with the existing fully paid-up Equity Shares of the Company including dividend and voting rights, etc.

Except as stated herein, there was no other change in the share capital of the Company as on the date of this Report.

Change(s) in the nature of the business

There has been no change(s) of business of the Company or in the nature of business carried on by the Company during the financial year under review.

Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of the report

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date on which this Report has been signed.

Significant and material orders passed by the regulators / courts / tribunals impacting the going concern status and the Company's operations in future

During the year under review, no significant and material orders have been passed by the regulators / courts / tribunals that may impact the going concern status and the operations of the Company in future.

Scheme of Arrangement

A Scheme of Arrangement between Khadim lndia Limited (the "Company" or "Demerged Company") and KSR Footwear Limited ("Resulting Company" or "KFL") and their respective shareholders and creditor under Sections 230 to 232 read with other applicable provisions of the Companies Act, 2013 ('Scheme"), was approved by the Board of Directors of the Company and KFL at their respective meetings held on September 29, 2023. The Scheme, inter alia, provides for the demerger, transfer and vesting of the Demerged Undertaking (as defined in the Scheme) of the Company into the Resulting Company, on a going concern basis.

In consideration, KFL, to issue its equity shares to the equity shareholders of the Company, in the ratio of 1 (One) equity share of KFL of the face value of ' 10/- each fully paid-up for every 1 (One) equity share of the face value of ' 10/- each fully paid-up held in the Company as on the record date.

Further, upon the Scheme becoming effective, the equity shares held by the Company in KFL shall be reduced and cancelled and the shareholders of the Company are and will upon demerger, be the ultimate economic beneficial owners of KFL in the same proportion as they hold shares in the Company. Accordingly, the shares of KFL would also be listed on the stock exchanges i.e., BSE Limited and National Stock Exchange of India Limited, where the shares of Khadim India Limited are presently listed.

While the Stock Exchanges have given their respective No Objections on April 30, 2024, the Scheme is subject to other requisite approvals including approval of the National Company Law Tribunal, Kolkata Bench.

Corporate Insolvency Resolution Process initiated under the Insolvency and Bankruptcy Code, 2016

During the year under review, no Corporate Insolvency Resolution application was made or proceeding was initiated by / against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, no application or proceeding by / against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on March 31, 2024.

Subsidiaries, Joint Ventures and Associate Companies

The Company has a Wholly-owned subsidiary in Bangladesh in the name of Khadim Shoe Bangladesh Limited.

Further, during the year under review, the Company has incorporated a company as its Wholly-owned Subsidiary company namely, KSR Footwear Limited, on August 22, 2023, solely for the purpose of Demerger of its distribution business, as stated above.

There are no other associate or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013.

Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of financial statements of the Company's subsidiary in Form No. AOC-1 is attached to the financial statements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiary companies, are available on the website of the Company www.khadims.com at the link https://www.khadims.com/subsidiary-financial-khadim.

Deposits

The Company has not accepted any deposit from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 and as such, no unclaimed / unpaid matured deposits or interest thereon was due as on March 31, 2024.

Corporate Social Responsibility

In accordance with the provisions of Section 135 of the Companies Act, 2013, your Company has duly constituted a CSR Committee and the Company's policy on CSR is available on the Company's website www.khadims.com.

Pursuant to the provisions of Section 135 of the Companies Act, 2013 read with Schedule VII thereof and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company did not fall under the purview of undertaking CSR activities during the financial year 2023-24, as the average net profit of the three immediately preceding financial years was negative.

The Annual Report on CSR for the financial year ended March 31, 2024 along with the composition of CSR Committee is marked as Annexure - I and forms part of this Report.

Risk Management

The Company's Risk Management Policy recognizes that risk is an integral part of any business and the Company is committed to manage the risk in a proactive and efficient manner.

Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism / Whistle Blower policy and it has established adequate vigil mechanism for its employees and directors to report concern about unethical practice. No person has been denied access to the Chairman of the Audit Committee. The latest Vigil Mechanism / Whistle Blower Policy is available at https://www.khadims.com/policv-on-vigil-mechanism/.

Directors and Key Managerial Personnel

Your Company's Board is duly constituted in compliance with the requirement of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations").

The Independent Directors have confirmed that they meet with the criteria of independence as required under sub section 7 of Section 149 of the Companies Act, 2013 and Regulation 25(8) of the Listing Regulations.

The Board is also of the opinion that Independent Directors meet with the criteria of independence under sub section 6 of Section 149 of the Act and Regulation 16(1)(b) of the Listing Regulations.

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

All the Independent Directors have registered themselves / renewed their registration pursuant to the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019.

The Board confirms that the Independent Directors also meet the criteria of integrity, expertise and experience (including the proficiency) in terms of Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.

Following re-appointment of Directors had been made during the year:

i. Pursuant to Section 152(6) of the Companies Act, 2013, Mr. Ritoban Roy Burman (DIN: 08020765), Non - Executive Non-Independent Director, retired by rotation and re-appointed at the AGM held on September 21, 2023.

ii. The Members of the Company at the AGM held on September 21, 2023 has also approved the re-appointment of Mr. Siddhartha Roy Burman (DIN: 00043715) as "Chairman & Managing Director" of the Company for a further period of 3 (Three) consecutive years, commencing from April 01, 2024 till March 31, 2027.

Mr. Siddhartha Roy Burman (DIN: 00043715), Chairman & Managing Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, offered himself for re-appointment. Your Directors recommend his re-appointment at the ensuing Annual General Meeting.

The brief profile of Mr. Siddhartha Roy Burman and other relevant information under Regulation 36 of the Listing Regulations and Secretarial Standard on General Meetings with respect to Director seeking re-appointment would be provided in the Notice convening Annual General Meeting.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2024 are:

a) Mr. Siddhartha Roy Burman, Chairman & Managing Director;

b) Mr. Rittick Roy Burman, Whole-time Director;

c) Mr. Indrajit Chaudhuri, Chief Financial Officer; and

d) Mr. Abhijit Dan, Company Secretary & Head-Legal.

Familiarisation Programme for Independent Directors

The Company has put in place an Induction and Familiarisation Programme for Independent Directors of the Company. The details of such Familiarization Programme are mentioned in the Report on Corporate Governance, which forms part of this Annual Report and the same is available at the link https://www.khadims.com/ familiarization-programme-independent-director/.

Separate Meeting of Independent Directors

In terms of requirements of Schedule IV of the Companies Act, 2013 and the Listing Regulations, the meetings of Independent Directors were separately held on September 29, 2023; November 10, 2023 and March 29, 2024 during the year under report.

Company's Policy on Appointment and Remuneration of Directors

The Company has been following a policy namely "Nomination and Remuneration Policy" with respect to appointment and remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management Personnel. The appointment of Directors, KMP and Senior Management Personnel is subject to the recommendation of the Nomination and Remuneration Committee (NRC).

Based on the recommendation of the NRC, the remuneration of Executive Director comprises of Basic Salary, Perquisites, Allowances and Commission in accordance with the provisions of the Companies Act, 2013. The remuneration of Non-Executive Directors comprises of sitting fees and commission in accordance with the provisions of Companies Act, 2013.

Nomination and Remuneration Policy

The Nomination and Remuneration Policy of the Company is in conformity with the requirement of Section 178(3) of the Companies Act, 2013 and the Listing Regulations. The objectives and key features of this Policy are:

1. Formulate the criteria for determining qualifications, competencies, positive attributes and independence of the Directors, Key Managerial Personnel (KMP) and Senior Management Personnel and recommend to the Board, a policy relating to the remuneration of Directors, Key Managerial Personnel and other employees.

1A. For every appointment of an Independent Director, the Committee shall evaluate the balance of skills, knowledge and experience on the Board and on the basis of such evaluation, prepare a description of the role and capabilities required of an Independent Director. The person recommended to the Board for appointment as an Independent Director shall have the capabilities identified in such description. For the purpose of identifying suitable candidates, the Committee may:

a. Use the services of an external agencies, if required;

b. Consider candidates from a wide range of backgrounds, having due regard to diversity; and

c. Consider the time commitments of the candidates.

2. Devising a policy on Board diversity;

3. Identifying persons who are qualified to become Directors and persons who may be appointed in Key Managerial and Senior Management;

4. Directors' induction and continued updation as and when required of their roles, responsibilities and liabilities;

5. Formulation of criteria for performance evaluation of the Board, its Committees and Directors including Independent Directors / Non-Executive Directors;

6. Aligning the remuneration of Executive Directors, Key Managerial Personnel and Senior Management Personnel with the Company's financial position, industrial trends, remuneration paid by peer companies etc.; and

7. Recommend to the Board all the remuneration in whatever form, payable to the Senior Management.

The guiding principles of the Policy are:

• The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

• Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

• 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.

The aforesaid Nomination and Remuneration Policy has been uploaded on the website of your Company www.khadims.com and is available at the link https://www.khadims.com/policy-on-nomination-remuneration- committee/.

Meetings of the Board

During the year, 7 (Seven) meetings of the Board were held. The details of meetings of the Board held during the financial year 2023-24 have been provided in the Corporate Governance Report which forms part of the Report.

Audit Committee

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report which is a part of this Report.

Extract of Annual Return

In accordance with Section 92(3) and 134(3)(a) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, the Annual Return as on March 31, 2024 is available on the Company's website www.khadims.com at https://www.khadims.com/mgt-9.

Particulars of contracts and arrangement with Related Parties

All transactions entered by the Company with Related Parties during the financial year 2023-24 as defined under Section 2(76) of the Companies Act, 2013 read with the Companies (Specification of Definitions Details) Rules, 2014 were held in the Ordinary Course of Business and at Arm's Length pricing basis. There were no materially significant transactions with Related Parties during the financial year 2023-24, which were in conflict with the interest of the Company. Suitable disclosures as required under Ind AS-24 have been made in the Notes to the financial statements.

Accordingly, the disclosure in Form AOC-2, pursuant to section 134(3)(h) of the Companies Act, 2013, read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is not required. The policy on Related Party Transactions can be accessed on the website of the Company www.khadims.com.

Secretarial Standards

The Company has devised adequate systems to ensure compliance with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and such systems are operating effectively.

Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013 ("the Act"), your Directors to the best of their knowledge and ability confirm that:

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

b) the Directors had selected such accounting policies and applied them consistently and made judgements 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 March 31, 2024 and of the Profit of the Company for the year ended on that date;

c) the Directors had 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;

d) the Directors had prepared the annual accounts on a going concern basis;

e) proper internal financial controls are followed by the Company and that such financial controls are adequate and are operating effectively; and

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 during the financial year ended March 31, 2024.

Reporting of Fraud by Auditors

During the year under review, the Statutory Auditors, Secretarial Auditors and Cost Auditors have not reported, any incident of fraud committed in your Company by its Officers or Employees, to the Audit Committee and / or to the Board under Section 143(12) of the Companies Act, 2013 details of which needs to be mentioned in this Report.

Auditors

M/s. Ray & Ray, Chartered Accountants (Firm Registration No.: 301072E) was appointed by the Members of the Company at the 40^th Annual General Meeting as Statutory Auditors of the Company for a term of 5 (Five) consecutive years commencing from the conclusion of the Annual General Meeting held on September 28, 2021 till the conclusion of the 45th Annual General Meeting to be held in the financial year 2026-27.

The Auditors' Report on the Annual Accounts of the Company forms part of the Annual Report of the Company. The Auditors' Report does not contain any qualification, reservation or adverse remark or disclaimer.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with relevant Rules made thereunder, the Company had re- appointed M/s. BKG & Company, Company Secretaries, represented by its Partner, Mr. Binod Kumar Gupta (ACS No. 12965, C. P. No. 3242), to conduct the Secretarial Audit for the financial year 2024-25.

The Secretarial Audit Report for the financial year ended March 31, 2024 is annexed herewith and marked as Annexure - II to this report.

The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Cost Auditors

Although the Company is not covered under the purview of compulsory cost audit as per the Companies Act, 2013, your Company would avail the services of the Cost Auditor for the financial year 2024-25.

Disclosure as required under Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014

The disclosure as per Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014, as amended, is not applicable to the Company.

Particulars of Loans, Investments and Guarantees

During the financial year 2023-24, the Company has not made any investment, has not given any loans, has not provided any guarantees, has not provided any security in connection with any loan, has not acquired securities by way of subscription, purchase or otherwise, in excess of the thresholds provided in Section 186 of the Companies Act, 2013.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 are given in Annexure-III, forming part of this Report.

Managerial Remuneration, Particulars of Employees and related disclosure

Details of remuneration as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure-IV and V respectively.

Disclosures under the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

Your Company firmly believes in providing a safe, supportive and harassment free workplace for each and every individual working for the Company through various interventions and practices and has zero tolerance for sexual harassment at workplace. It is the continuous endeavour of the management of the Company to create and provide an environment to all its employees that is free from discrimination and harassment including sexual harassment. The Company has adopted a policy on Prevention of Sexual Harassment at Workplace. An Internal Complaint Committee (ICC) with requisite number of representatives is in place to redress complaints relating to sexual harassment, if any. The Policy is gender neutral. All employees (permanent, contractual, temporary and trainees) are covered under this Policy.

The Policy under the Sexual Harassment of Women at workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules framed there under is available on the website of the Company at www.khadims.com.

No complaints relating to the sexual harassment had been received during the year under report.

Annual Performance Evaluation of the Directors

In terms of the provisions of the Companies Act, 2013 read with Rules issued there under and the Listing Regulations, based on the criteria such as number of Board and Committee meetings attended during the year, contributions to the decision making and relevant expertise to the Board etc., the Board of Directors has carried out the annual performance evaluation of the entire Board, Committees and all the Directors based on the criteria laid down by the Nomination and Remuneration Committee.

In a separate meeting of Independent Directors, performance of Non-Independent Directors, the Chairman of the Company and the Board as a whole was evaluated.

Corporate Governance

A Report on Corporate Governance along with a Certificate from the Statutory Auditors confirming of corporate governance requirements as stipulated under Listing Regulations is enclosed as Annexure - VI and forms part of this Report. The said report also contains a certificate from a Practising Company Secretary confirming that none of the Board of Directors of the Company has been debarred or disqualified from being appointed or continuing as a Director of the Company as prescribed under Listing Regulations.

Management Discussion and Analysis Report

Management Discussion and Analysis Report for the financial year under review, as stipulated under Regulation 34 of the Listing Regulations is presented in a separate section forming a part of this Report.

Cautionary Statement

Statements in the Annual Report, including those which relate to Management Discussion and Analysis, describing the Company's objectives, projections, estimates and expectations, may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Although the expectations are based on reasonable assumptions, the actual results might differ.

Acknowledgement

Your Directors are thankful for all the guidance, support and assistance received from the financial institution, banks, merchant bankers, legal consultants, registrar, government authorities, customers and vendors during the year under review and look forward for the long-term future with confidence, optimisms and full of opportunities.

Your Directors also acknowledge the continued cooperation received from all the esteemed investors and shareholders and the confidence reposed by them.

Your Directors place on record their deep sense of appreciation for the continuous hard work, dedication, contribution and commitment by executives, staffs and workers at all levels of the Company.