Pokarna Ltd

Dear Members,

Your directors take pleasure in presenting their 33rd Annual Report together with the annual audited consolidated and standalone financial statements for the financial year ended 31st March 2024.

H In Lakhs

During the reporting period, our granite division faced significant challenges, leading to a downturn in overall performance. The revenue from our granite division primarily comes from exporting granite blocks to China and processed granite to the United States. However, both markets have been adversely affected by evolving economic conditions. In China, a major consumer of our granite blocks, the combination of rising inflation, increasing interest rates, and weakening consumer confidence led to a noticeable slowdown in demand for granite blocks. This decline in demand significantly reduced our export volumes and, consequently, a reduction in revenue from this segment. Furthermore, geopolitical tensions and trade policies have also played a role in disrupting the market dynamics, adding to the challenges we face in selling to Chinese buyers. Similarly, the US market has been affected by economic headwinds such as inflation and rising interest rates, which have dampened consumer confidence and suppressed demand for our processed granite products. The construction sector, a significant driver of granite demand, has slowed down due to these economic pressures. Additionally, the US market has been dealing with supply chain disruptions and increased competition from alternative materials, further impacting our sales. Adding to these economic challenges, a state government has introduced measures such as increased taxes and fees, which have placed additional financial burdens on our operations. These regulatory changes have strained our operational costs and profitability, making it even more challenging to maintain efficiency and competitiveness. We are focused on optimizing our operations and exploring new opportunities to ensure the long-term sustainability and growth of our company.

In line with our strategic review, we have discontinued the operations of our apparel division. This decision, endorsed by the Board, aims to reduce losses and strengthen the company's overall financial position. We are taking and will continue to take necessary actions to wind down these operations systematically.

The Company believes that Pokarna Engineered Stone Limited ("PESL"), a wholly owned subsidiary, leverages its advanced technology to offer significant competitive advantages. PESL's capability to produce a diverse range of products, featuring an extensive selection of designs, finishes, and slab sizes, uniquely positions it in the market. Despite the economic challenges in the U.S. impacting the quartz industry, PESL's performance reflects the positive outcomes of our strategic actions to enhance operations. PESL is investing approximately US$ 10 million to commercialize two cutting-edge technologies from BRETON S.p.A of Italy: the KREOS and CHROMIA lines. The KREOS line includes a next-generation mixture extrusion and distribution system designed to produce full-body, ultra-thin, and aesthetically unique slabs, catering to evolving customer preferences. The CHROMIA line utilizes high-definition digital printing technology to decorate quartz slabs with precise, intricate patterns and vibrant colors, significantly enhancing their aesthetic appeal and customizability. These advancements are expected to strengthen PESL's market position and attract a broader customer base. Both the KREOS and CHROMIA lines are scheduled for commercialization in FY25. We are optimistic that FY25 will be a promising year for PESL, driven by its broad and innovative quartz offerings, combined with a steadfast commitment to quality and service. As PESL navigates current market dynamics, our strategy remains focused on enhancing innovation, developing our brand, and expanding our geographical reach. This approach will ensure that PESL continues to meet market demands and capitalize on new opportunities, reinforcing its position as a leader in the engineered stone industry.

The Directors are pleased to recommend a dividend of H 0.60 per equity share for the financial year ended 31st March 2024. The dividend is subject to the approval of the Members at the Annual General Meeting ("AGM") scheduled on 30th September 2024. The Register of Members and Share Transfer Books will remain closed from 24th September 2024 to 30th September 2024 (both days inclusive) for the purpose of payment of the dividend for the financial year ended 31st March 2024 and the AGM.

In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)

Regulations, 2015, as amended, your Company has adopted a Dividend Distribution Policy formulated by the Board specifying the financial parameters, factors, and circumstances to be considered in determining the distribution of dividends to shareholders and/or retaining profits earned by the Company. The policy aims to protect the interests of investors by ensuring transparency. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended, is available on the Company's website - www.pokarna.com.

No amount is proposed for transfer to the general reserve.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and the reviews performed by the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year under review. Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

b) that they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations 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 at the end of financial year and of the profit of the Company for that period;

c) they have taken proper and sufficient care to the best of their knowledge and ability, 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 other irregularities;

d) they have prepared the annual accounts on a going concern basis;

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

f) a proper system has been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

As of March 31, 2024, your Company had two subsidiaries, one of which is a wholly owned subsidiary, and the other is a non-profit organization. The consolidated financial statements presented by the Company include the financial information of Pokarna Engineered Stone Limited ("PESL"), the wholly owned subsidiary. There has been no material change in the nature of PESL's business. In compliance with Section 129(3) of the Companies Act, 2013, a separate statement containing the salient features of the financial statements of the subsidiary in prescribed Form AOC-1 is attached to the Company's financial statements. The audited accounts of PESL will be available on the Company's website - www.pokarna.com.

During the financial year under review, PESL registered total income of H 66,030.40 lakhs, compared to H 67,836.78 lakhs in the previous year, registering a decrease of 2.66%. EBITDA for the year was H 22,247.52 lakhs, compared to H 17,080.81 lakhs in the previous year. The total comprehensive income for the year ended March 31, 2024, increased to H 10,060.26 lakhs, showing an increase of 48%.

Pokarna Engineered Stone Limited ("PESL") was selected by the U.S. Department of Commerce ("USDOC") as a "mandatory respondent" for the second administrative review of the Antidumping duty ("ADD") Order on the imports of quartz surface products from India. As a result, PESL's ADD assessment rate for the second review period continues to be 0%, and the ADD cash deposit rate also remains 0% effective from November 20, 2023. The third administrative ADD review is ongoing, and according to the preliminary results announced by the USDOC, PESL's ADD assessment rate for the third review period continues to be 0%. Regarding the Countervailing Duty (CVD) review, no parties have requested a second or third review, thus the CVD duty of 2.34% determined during the investigation period remains the final CVD assessment rate for the entries of the second and third review periods. There is no impact on the financials of the Company from these duties.

During recent times, the quartz surfaces industry has seen increased acknowledgment of the health hazards associated with respirable crystalline silica exposure for fabricators. Individuals engaged in certain processes such as fabricating and finishing quartz countertops are deemed at risk. In response to this concern, several international regulatory bodies have taken proactive steps by issuing safety alerts and implementing new regulations to safeguard the well-being of workers in this sector. PESL has comprehensive safety protocols in place at our factories, including the use of high-tech cutting equipment that uses water to suppress dust, thereby preventing airborne silica particles. This measure is considered one of the best practices to mitigate dust exposure during the cutting and fabrication of quartz slabs. Additionally, PESL's employee training program focuses on safe handling practices, machinery maintenance, and air quality management in workspaces. PESL also subject its employees to regular health screenings to ensure early detection and management of any potential health issues. Furthermore, PESL is proactively working on developing alternative formulations for its products to reduce the crystalline silica content. By prioritizing these measures, PESL aims to ensure a safe and healthy working environment for all its employees and remain compliant with evolving industry regulations.

The Company does not have any associate or joint venture companies. Furthermore, the Company's policy on determining material subsidiaries, as approved by the Board, is available on the Company's website - www.pokarna.com.

The Directors reaffirm their commitment to good corporate governance practices. During the year under review, the Company complied with the provisions relating to corporate governance as outlined under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"). A detailed report on corporate governance, as required under the Listing Regulations, is provided in a separate section and forms part of the Annual Report.

The certificate on compliance with the conditions of corporate governance of the Listing Regulations is given in the Annexure to this Report. In terms of the Listing Regulations, the certificate, as prescribed in Part B of Schedule II of the said Regulations, has been obtained from Mr. Gautam Chand Jain, Chairman & Managing Director, and Mr. M. Vishwanatha Reddy, Chief Financial Officer, for the financial year 2023-24 with regard to the financial statements and other matters. This certificate forms part of the report on Corporate Governance.

The Management's Discussion & Analysis Report for the year under review is presented in a separate section forming part of the Annual Report.

The Business Responsibility and Sustainability Report (BRSR) of your Company for the financial year 2023-24 forms part of this Annual Report, as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has a Policy on Corporate Social Responsibility, which is posted on the Company's website – www.pokarna.com. The Annual Report on CSR activities, in terms of the requirements of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed as Annexure-I and forms part of this Report. However, during the year under review, the provisions of Corporate Social Responsibility were not applicable to the Company pursuant to Section 135(1) of the Companies Act, 2013.

Your Company is managed and controlled by a Board comprising an optimum blend of Executive and Non-Executive Directors. As of 31st March 2024, the Board of Directors consists of eight (8) Directors, including the Chairman & Managing Director, Managing Director, Executive Director, and five (5) Non-Executive Directors, four (4) of whom are Independent Directors. The composition of the Board is in conformity with Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) and the relevant provisions of the Companies Act, 2013.

Based on the recommendations of the Nomination and Remuneration Committee, the Board, effective from 1st April, 2024, has appointed Mr. Prasanth Nandigala (DIN: 01740471), Mr. Agnihotra Dakshina Murty Chavali (DIN: 00374673), and Mrs. Paulomi Dhawan (DIN: 01574580) as Additional Directors (Non-Executive, Independent) of the Company for an initial term of 3 years. The members of the Company approved the said appointments by way of a special resolution passed on 25th July 2024 through a postal ballot conducted by remote e-voting.

In accordance with the provisions of Section 152 of the Companies Act, 2013, and the Articles of Association of the Company, Mr. Rahul Jain (DIN:00576447), Managing Director of the Company, retires by rotation at this Annual General Meeting and, being eligible, has offered himself for re-appointment. Brief details of Mr. Rahul Jain (DIN:00576447), Managing Director are provided in the notice of the Annual General Meeting.

Mr. Meka Yugandhar (DIN: 00012265), Mr. Vinayak Rao Juvvadi (DIN: 00229415) and Mr. Mahender Chand (DIN: 00008449) will cease to be Independent Directors of the Company upon the completion of their second term at the close of business hours on 31st March, 2024. The Board of Directors places on record their sincere appreciation for the contributions made by Mr. Meka Yugandhar, Mr. Vinayak Rao Juvvadi and Mr. Mahender Chand during their tenure on the Board of the Company.

Ms. Disha Jindal resigned as Company Secretary of the Company with effect from 8th May,2024, and Ms. Pratima Khandu Gulankar (Membership No: A66794) was appointed as Company Secretary with effect from 1st August,2024.

Except as stated above, there were no other changes in the Directors and Key Managerial Personnel during the year under review since the last report. Detailed information on the directors is provided in the Corporate Governance Report, which forms part of this Annual Report.

The Company has received declarations from all independent directors, in accordance with section 149(7) of the Act and regulation 25 of the Listing Regulations, 2015. These declarations confirm that the directors meet the independence criteria outlined in section 149(6) of the Act, as well as regulations 16 and 25 of the Listing Regulations, 2015. Additionally, the independent directors have affirmed their compliance with section 150 of the Act and rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014, which includes the inclusion of their names in the independent directors' databank maintained by the Indian Institute of Corporate Affairs.

The Board of Directors has reviewed and recorded these declarations and confirmations from the independent directors, following a thorough assessment in accordance with regulation 25 of the Listing Regulations, 2015. The Board believes that the independent directors meet all specified conditions under the Act and corresponding Rules, in addition to adhering to the code for independent directors as set out in Schedule IV to the Act.

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.

Mr. Gautam Chand Jain, Chairman & Managing Director, Mr. Rahul Jain, Managing Director, Mr. M. Vishwanatha Reddy, Chief Financial

Officer, and Ms. Pratima Khandu Gulankar, Company Secretary, are the Key Managerial Personnel (KMP) within the meaning of Section 2(51) read with Section 203(1) of the Act.

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an evaluation of its own performance, Committees, and performance of individual Directors. The performance of the Board, Committees, and individual directors was evaluated by seeking inputs from all Directors. The performance of the individual Directors, including Independent Directors, and the role of the Board/Committees were also discussed at the Board Meeting. Details regarding the formal annual evaluation process conducted by the Board, assessing its own performance as well as that of its committees, the chairman, and individual directors, are provided in the Corporate Governance Report, which is part of this Annual Report.

In light of the recent appointments and the completion of directorship tenures, the Board has approved the reconstitution of various committees, effective from 1st April, 2024. Details regarding the composition, terms of reference, and meetings held during the financial year 2023-24 for each committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

The Nomination and Remuneration Policy of the Company can be accessed at https://www.pokarna.com/investors/.

Risk management is integral to our Company's strategy and the achievement of our long-term goals. The Risk Management Committee, appointed by the Board, is responsible for reviewing the Company's risk management process and ensuring that risks are managed within acceptable limits. The Company has established a Risk Management policy to mitigate both internal and external risks.

We have implemented Business Risk Assessment procedures that facilitate self-assessment of business risks, operating controls, and compliance with Corporate Policies. The Company actively manages, monitors, and reports on the principal risks and uncertainties that could impact our ability to achieve objectives. This ongoing process tracks the evaluation of risks and the implementation of mitigating action plans.

According to the Board, there are no risks that threaten the existence of the Company. However, certain risks that may pose challenges are detailed in the Management Discussion and Analysis section of this Annual Report.

All related party transactions (RPTs) conducted by the Company during the year under review were on an arm's length basis and in the ordinary course of business. These transactions did not trigger the provisions of Section 188 of the Act and were not considered material RPTs under Regulation 23 of the SEBI Listing Regulations. All RPTs for FY2024 received approval from the audit committee. Details of these transactions were submitted to the audit committee on a quarterly basis for review and noting. Additionally, related party transaction disclosures are filed with the stock exchanges on a half-yearly basis.

There were no material transactions with related parties during the period under review that could have led to a potential conflict of interest for the Company. The policy on Related Party Transactions, approved by the Board of Directors, is available on the Company's website - www.pokarna.com. For further details, please refer to Note No. 33 of the Standalone Financial Statements.

The Company has established a robust and comprehensive internal control system to safeguard its assets against unauthorized use, disposition, or loss. This system ensures that all transactions are duly approved, accurately recorded, and correctly reported. It is designed to maintain accurate financial and other records for the preparation of financial information and to uphold accountability for assets and liabilities. The control system is further reinforced by rigorous internal audits, guidelines, and procedures.

The Company's internal financial control system includes an in-house Internal Audit Division, supplemented by internal audit checks from M. Murali Jaganmohan, Chartered Accountant, the Internal Auditor. The internal audit system encompasses quarterly inventory verification, monthly account reviews, and quarterly evaluations of critical business processes. Additionally, the Internal Auditors conduct concurrent audits of the majority of high-value transactions.

Based on the information provided, the Directors have not identified any material breakdown in the functioning of these controls, procedures, or systems during the year under review. There have been no significant changes in the Company's internal financial controls during the year that have materially affected or are reasonably likely to materially affect these controls.

It is important to note that there are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the potential for human error and the possibility of circumvention or overriding of the controls and procedures. Therefore, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their objectives. Furthermore, in designing and evaluating the Company's disclosure controls and procedures, management has applied its judgment in assessing the cost-benefit relationship of possible controls and procedures.

The Members at the 31st Annual General Meeting of the Company appointed M/s. Daga & Co, Chartered Accountant, as the Statutory Auditor of the Company for a term of five (5) consecutive years, from the conclusion of the 31st Annual General Meeting till the conclusion of the 36th Annual General Meeting.

Pursuant to the provisions of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended, notifications/circulars issued by the Ministry of Corporate Affairs from time to time, the Company is not falling under the limits of cost audit requirements. However, the Company maintains the cost records as per the provisions of the Companies Act, 2013.

During the year, Secretarial Audit was carried out by K V C Reddy

& Associates, Company secretaries, (Formerly Mr. K.V. Chalama Reddy, Practicing Company Secretary) the Secretarial Auditor of the Company for the financial year 2023-24. The detailed report on the Secretarial Audit is appended as Annexure II to this Report. The Secretarial Audit Report does not contain any qualifications, reservations, observations, or adverse remarks.

The Auditor's Report does not contain any qualifications, reservations, or adverse remarks.

Your Company has established a robust Vigil Mechanism for reporting concerns through the Whistleblower Policy of the Company. Adequate safeguards are provided against victimization to those who avail of the mechanism, and access to the Chairman of the Audit Committee in exceptional cases is provided to them. Details of the Vigil Mechanism are also provided in the Corporate Governance Report, and the Whistleblower Policy has been uploaded on the Company's website – www.pokarna.com.

The Board of Directors of your Company met six (6) times during the year to deliberate on various matters. The meetings were held on 25th May 2023, 9th August 2023, 8th November 2023, 6th February 2024, 17th February 2024, and 23rd March 2024. Further details on the Board of Directors are provided in the Corporate Governance Report forming part of this Annual Report.

During the period under review, the Company has neither provided any loans nor made investments under the provisions of Section 186 of the Companies Act, 2013.

Information relating to the conservation of energy, technology absorption, and foreign exchange earnings and outgo, as stipulated under Section 134(3)(m) of the Act read with the Companies (Accounts) Rules, 2014, is given in Annexure-III to this Report.

The Annual Return of the Company as on 31st March 2024 in Form MGT-7, in accordance with Section 92(3) of the Act read with the Companies (Management and Administration) Rules, 2014, is available on the Company's website – www.pokarna.com.

There have been no material changes and commitments 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 this Report.

During the financial year 2023-24, there were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in the future. No material changes and commitments which could affect the Company's financial position have occurred between the end of the Formal Annual Evaluation

Pursuant to the provisions of the Companies Act, 2013, and Listing Regulations, the Board has carried out an evaluation of its own performance, Committees, and the performance of individual Directors. Inputs were sought from all Directors, and the performance of individual Directors, including Independent Directors, and the roles of the Board/Committees were discussed at the Board Meeting.

The disclosure 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 provided in Annexure IV to this Report.

In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy for the prevention of sexual harassment at the workplace, which includes a mechanism for lodging complaints. During the year under review, no complaints were reported to the Committee.

Information regarding the transfer of unclaimed dividend amounts and shares to the Investor Education and Protection Fund (IEPF) is included in the General Shareholder Information section of this Annual Report. Ms. Pratima Khandu Gulankar, the Company Secretary, also serves as the Nodal Officer for the Company. This appointment is in accordance with rule 7(2A) of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer, and Refund) Rules, 2016. Further details can be found on the Company's website - www.pokarna.com.

During the financial year 2023-24, your Company has adhered to the relevant provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India pertaining to Board Meetings and General Meetings.

There were no instances of fraud reported during the year under review that required the Statutory Auditors to report under Section 143(12) of the Act and the rules made thereunder.

The Company's paid-up Equity Share Capital stands at H 620.08 Lakhs as of 31st March 2024. During the year, the Company has not issued any shares or shares with differential voting rights or convertible securities. Additionally, the Company does not have any scheme for the issuance of shares, including sweat equity, to the employees or Directors of the Company.

There has been no change in the nature of the Company's business. However, it is important to note that the Board has approved the closure of the Apparel Division of the Company, effective from the close of business hours on 31st March 2024.

During the year under review, the Company has not accepted or renewed any amount falling within the purview of the provisions of Section 73 of the Companies Act, 2013 (the Act) read with the Companies (Acceptance of Deposits) Rules, 2014. Hence, the requirement for furnishing details of deposits that are not in compliance with Chapter V of the Act is not applicable.

No application has been made under the Insolvency and Bankruptcy Code; therefore, there is no requirement to disclose details of any applications made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year, nor their status at the end of the financial year. Additionally, there is no requirement to disclose details of any differences between the valuation amount at the time of a one-time settlement and the valuation done when obtaining a loan from Banks or Financial Institutions, along with the reasons for such differences.

The financial statements for the year ending 31 March 2024 have been presented in accordance with Division II of Schedule III to the Act.

The attached financial statements are in full compliance with Indian Accounting Standards (Ind AS) as notified under section 133 of the

Act, the Companies (Indian Accounting Standards) Rules, 2015, and other relevant provisions of the Act.

Mr. Gautam Chand Jain, Chairman & Managing Director has not been drawing any remuneration from the Company. Details of his remuneration from subsidiary company are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

The Company's equity shares were not suspended from trading during the year under review due to corporate actions or any other reasons.

There were no revisions to the financial statements and Directors' Report during the year under review.

Specific details required under section 134 of the Act and the Rules made thereunder, applicable to the Company, have been provided in this Report where applicable.

There were no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016

The Company views its human resources as vital to achieving its objectives. Therefore, the Company places great emphasis on attracting and retaining high-quality employees. By empowering its workforce, the Company fosters a work environment that encourages employees to reach higher performance levels. The steadfast dedication of the employees is integral to driving the Company's vision forward. The Company deeply values and appreciates the commitment and enthusiasm of its employees.

The Ministry of Corporate Affairs (MCA) has launched a green initiative in corporate governance by promoting paperless compliance and permitting the electronic delivery of annual reports and documents to shareholders, subject to certain conditions. The Company continues to send the annual report and other communications via electronic mode to members with registered email addresses. For those who have not registered their email addresses, physical copies are sent through the permitted mode. We encourage shareholders to opt for receiving their annual reports electronically, as this contributes to cost savings and reduces the use of natural resources.

The Directors wish to express their deep appreciation to employees at all levels for their hard work, dedication, and commitment. Our employees have been crucial in successfully navigating the challenges faced this year. The Board also extends its gratitude to customers, shareholders, suppliers, vendors, bankers, business associates, and regulatory and government authorities for their continued support.

1. Brief outline on CSR Policy of the Company:

Our philosophy has always been that we are an integral part of the society within which we do business. This belief and idea has played a significant role in shaping our vision towards the communities we co-exist with. Healthcare & sanitation, Education and Environment are our thrust areas for undertaking CSR projects.

2. Composition of CSR Committee:

The CSR committee of the Board is responsible for overseeing the execution of the Company's CSR Policy. The CSR committee comprises Four independent directors, the Managing Director and the Executive Director as at the end of financial year 2024.

3. Web links where composition of CSR committee, CSR Policy and CSR projects approved by the board are disclosed on the website of the company:

The composition of the CSR committee is available on our website, at https://www.pokarna.com/wp-content/uploads/2021/07/ Composition_of_Board_committees.pdf

The Committee, with the approval of the Board, has adopted the CSR Policy as required under Section 135 of the Companies Act, 2013. The CSR Policy of the Company is available on our website, at https://www.pokarna.com/wp-content/uploads/2021/07/CSR_Policy.pdf

As mentioned in the Board Report, the provisions of CSR is not applicable to the company, so the company has not uploaded CSR annual action plan on the website.

4. Details of impact assessment of CSR projects carried out in pursuance of sub-rule (3) of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, if applicable:

Not Applicable for the financial year under review.

5. Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amount required for set off for the financial year, if any : Nil

6. Average net profit of the Company for last three financial years: Nil

7. (a) Two percent of average net profit of the company as per section 135(5): Nil

(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years: Nil (c) Amount required to be set off for the financial year, if any: Nil (d) Total CSR obligation for the financial year (7a+7b-7c). Nil

8. (a) CSR amount spent or unspent for the financial year: Not Applicable

(d) Amount spent in Administrative Overheads: Nil (e) Amount spent on Impact Assessment, if applicable: Nil (f ) Total amount spent for the financial year (8b+8c+8d+8e): Nil (g) Excess amount for set off, if any:

9. (a) Details of Unspent CSR amount for the preceding three financial years:

(a) Date of creation or acquisition of the capital asset(s): Not Applicable.

(b) Amount of CSR spent for creation or acquisition of capital asset: Not Applicable.

(c) Details of the entity or public authority or beneficiary under whose name such capital asset is registered, their address etc Not Applicable.

(d) Provide details of the capital asset(s) created or acquired (including complete address and location of the capital asset): Not Applicable.

Not Applicable.

FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2024

(Pursuant to Section 204 (1) of the Companies Act, 2013 and the Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)

To,

The Members,

Hyderabad.

1. I have conducted Secretarial Audit pursuant to Section 204 of the Companies Act 2013, on the compliance of applicable Statutory Provisions and the adherence to good corporate practices by Pokarna Limited (herein after called as "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

2. Based on our verification of the books, papers, minutes books, forms, returns filed and other records maintained by the Company and also the information and according to the examinations carried out by us and explanations furnished and representations made to us by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, I hereby report that in our opinion, the Company has during the audit period covering the Financial Year ended on 31st March, 2024 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

3. I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2024 ("Audit Period") according to the provisions of:

i. The Companies Act, 2013 (the Act) and the rules made there-under; ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA') and the rules made there-under; iii. The Depositories Act, 1996 and the Regulations and Bye-laws framed there-under;

iv. The Foreign Exchange Management Act, 1999 and the rules and regulations made there-under to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

v. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'): a. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: b. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 and amended Regulations 2018;

c. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 : Not applicable during the audit period.

d. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 : Not applicable during the audit period.

e. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2019 : Not applicable during the audit period.

f. The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 ; regarding the Companies Act and dealing with client;

g. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009;Not applicable during the audit period.

h. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018; Not applicable during the audit period;

i. Securities and Exchange Board of India (Issue and Listing of Non-Convertible and redeemable Preference Shares) Regulations, 2013 ; Not applicable during the period under review and

j. The Securities and Exchange Board of India (Listing Obligations Disclosure Requirements) Regulations, 2015.

vi. The Company is into business of mining of granite, processing and sale of granite slabs and manufacture and sale of readymade garments / apparels. Accordingly, the following Major Industry Specific Acts and Rules are applicable to the Company, in the view of the Management:

a. The Mines Act, 1952 and Rules made there under; b. The Mines & Minerals (Development & Regulation) Act, 1957; c. The Granite Conservation and Development Rules, 1999; d. The Andhra Pradesh Minor Mineral Concession Rules, 1966; and e. The Explosive Act 1884 and Explosive Rules 2008. vii. I, have also examined compliance with the applicable clauses of the following: a. The Listing Agreement entered into by the Company with stock exchange (BSE & NSE).

b. Secretarial Standards issued by The Institute of Company Secretaries of India in respect of Board and General meetings of the Company,

4. I, further report that:

a. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-executive Directors and independent directors . The changes in the composition of the Board of Directors that took place during the year under review were carried out in compliance with the provisions of the Act.

b. Adequate Notice is given to all the Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least 7 days in advance. There is adequate system for seeking and obtaining further information and clarifications on the agenda items before the meeting and meaningful participation at the meeting. Majority decision is carried through andthere were no instances of dissenting members in the Board of Directors.

5. I further report that there exist adequate systems and processes in the Company that commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

6. I further report that the above mentioned Company being a listed entity and this report is also issued pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended and circular No. CIR/CFD/CMD1/27/ 2019 dated 8th February, 2019 issued by Securities and Exchange Board of India.

7. I further report that as per the information and explanation provided by the Management, the Company has Material Unlisted Subsidiary namely POKARNA ENGINEERED STONE LIMITED incorporated in India pursuant to Regulation 16(c) and 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 during the period under review.

8. I, further report that during the audit period, there were no specific events/actions having a major bearing on the company's affairs in pursuance of the above referred laws, regulations, guidelines, standards, etc. referred above

To,

The Members

Hyderabad

My report of even date is to be read along with this letter.

1. Maintenance of secretarial records is the responsibility of the management of the company. My responsibility is to express an opinion on these secretarial records based on our audit.

2. I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the processes and practices, I followed provide reasonable basis for our opinion.

3. I have not verified the correctness and appropriateness of financial records and Books of Accounts of the company.

4. Where ever required, I have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our examination was limited to the verification of procedures on test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.

(Pursuant to Section 204 (1) of the Companies Act, 2013 and the Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014)

To

The Members,

Pokarna Engineered Stone Limited Hyderabad

I have conducted Secretarial Audit pursuant to Section 204 of the Companies Act 2013, on the compliance of applicable Statutory Provisions and the adherence to good corporate practices by M/s. Pokarna Engineered Stone Limited ( U17219TG2001PLC036015) (hereinafter called as "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on my verification of the books, papers, minutes books, forms, returns filed and other records maintained by the Company and also the information and according to the examinations carried out by me and explanations furnished and representations made to me by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, I hereby report that in my opinion, the Company has during the Audit Period covering the Financial Year ended on 31st March, 2024 complied with the Statutory Provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter.

I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended 31st March, 2024 ("Audit Period") according to the provisions of:

1. The Companies Act, 2013 (the Act) and the rules made thereunder;

2. The Depositories Act, 1996 and regulations made thereunder: not applicable during the audit period.

3. Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings : Not Applicable during the audit period.

4. The Securities Contracts (Regulation) Act, 1956 and rules made thereunder: not applicable, being an unlisted Company

5. The Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'): not applicable, being an unlisted Company.

6. Secretarial Standards issued by The Institute of Company Secretaries of India in respect of Board and General meetings of the Company

7. The Company is into business of manufacture and sale of Natural Quartz Surfaces, in the view of the management, the following industry specific act and rule are applicable to the company, in the view of the management:

a. Special Economic Zone Act, 2005 and Special Economic Zone Rules, 2006. (to the extent applicable).

During the period under review, the Company has complied with the provisions of the applicable Acts, Rules, Regulations, and Guidelines etc., as mentioned above.

I further report that:

a. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-executive Directors and independent directors. There were no changes made in the composition of the Board of Directors during the year under review

b. Adequate Notice is given to all the Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least 7 days in advance. There is adequate system for seeking and obtaining further information and clarifications on the agenda items before the meeting and meaningful participation at the meeting. Majority decision is carried through and there were no instances of dissenting members in the Board of Directors.

I further report that there exist adequate systems and processes in the Company that commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

I further report that during the audit period, there were no specific events / actions having a major bearing on the company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.

The Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this initiative. The energy conservation efforts in the Company are being pursued on a continuous basis. Close monitoring of energy conservation is maintained to minimize wastage and facilitate optimum utilization of energy. Regular maintenance and repairs of all the equipment's and machineries are carried out to ensure optimum efficiency. The other energy conservation measures taken are:

plants are equipped with high energy efficiency motors and variable frequency drives. continuous monitoring of power factor. training and awareness programmes for employees were conducted for reducing energy waste.

Use of roof mounted self-driven ventilator in plant thereby enabling substantial saving in electrical energy. Roof mounted self-driven ventilators work on wind assisted ventilation.

Use of sky lights in the plants to reduce need for lighting during daytime.

During the current financial year, the Company has not incurred any capital expenditure on the energy conservation equipment.

Our Technical team visits international markets to understand and explore the possibility of using such latest technology in production and processing of our products. Benefits derived as a result of the above efforts are in the areas of process simplification, cost reduction and quality improvement.

The Company has not imported any technology during the last three years. Hence, the particulars with respect to efforts made towards technology absorption and benefits derived etc. are not applicable to the Company.

The Company during the year under review has not carried out any activity which can be construed as Research & Development and as of now there is no specific plan for engaging into such activities. As such, there is no expenditure to report.

During the year under review, the total standalone foreign exchange earnings was H1993.92 Lakhs and expenditure was H 41.74 Lakhs.

(i) The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2023-24, are as under:

** Ms.Disha Jindal was appointed as Company Secretary w.e.f. 02.05.2023.

Note: Independent Directors were paid sitting fees for attending the sittings.

(ii) The median remuneration of employees of the Company during the financial year was H 2.64 Lakhs. (iii) In the financial year, there was an increase of 76 % in the median remuneration of employees. (iv) There were 198 permanent employees on the rolls of Company as on 31st March 2024.

(v) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

(vi) The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report. Further, the report and the accounts are being sent to the members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection at the Registered Office of the Company. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary of the Company at companysecretary@pokarna.com.