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Kaynes Technology India Ltd

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BSE Code : 543664 | NSE Symbol : KAYNES | ISIN : INE918Z01012 | Industry : Consumer Durables |


Directors Reports

To

The Members,

KAYNES TECHNOLOGY INDIA LIMITED

Your Directors take pleasure in presenting the Sixteenth (16th) Annual Report of your Company, along with the Audited Financial Statements and Auditor's Report for the Financial Year ended 31 March, 2024.

1. FINANCIAL SUMMARY OR HIGHLIGHTS:

(All amounts are in ' Mn, except per equity share data)

Particulars Standalone Consolidated
Year ended 31 March, 2024 Year ended 31 March, 2023 Year ended 31 March, 2024 Year ended 31 March, 2023
Revenue from Operations 12,739.39 10,865.57 18,046.19 11,261.14
Other Income 641.93 116.98 559.16 113.98
Total Income 13,381.32 10,982.55 18,605.35 11,375.12
Total Expenses excluding Depreciation 11,560.91 9,560.64 16,038.25 9,927.32
Depreciation and Amortisation Expenses 214.41 176.74 251.41 187.41
Profit/(Loss) before exceptional Items and tax 1,606.00 1,245.17 2,315.69 1,260.39
Exceptional Items - - - -
Profit/(Loss)before Tax 1,606.00 1,245.17 2,315.69 1,260.39
Provision for Tax 340.00 302.11 458.39 311.14
Deferred Tax charge/(credit) 5.02 (4.55) 24.41 (2.71)
Profit/(Loss) for the year 1,260.98 947.61 1,832.89 951.96
Other Comprehensive Income net of tax 3.00 2.08 5.62 2.96
Total Comprehensive Income/(Expense) for the year 1,263.98 949.69 1,838.51 954.92
(Less) Share of Profit / (loss) of minority interest - - 2.72 1.75
Total Comprehensive Income/(Expense) for the year, Net of Tax - - 1,835.79 953.17
Earnings per Share-Basic in ' 21.10 19.79 30.63 19.84
Earnings per Share-Diluted in ' 20.83 19.55 30.24 19.61

2. STATE OF COMPANY'S AFFAIRS AND BUSINESS PROSPECTS

Revenue summary

Your Board is pleased to report significantly enhanced levels of business and profitability during the year under Report. This was made possible due to concentrated efforts in various spheres from Business Development to Supply Chain to Operations and all the enabling functions.

Your Company achieved a total revenue of ' 13,381.32 Mn during the Financial Year ended 31 March, 2024 as against ' 10,982.55 Mn in the previous Financial Year. Your Company has earned a net profit (after depreciation and tax) of ' 1,263.98 Mn in the current year as against ' 949.69 Mn in the previous year.

Basic EPS for the FY 2023-24 is ' 21.10 as against' 19.79 in FY 2022-23.

Profitability summary

• EBITDA growth over 0.33x and margins improved by 224.21 bps with strong operational performance.

• PAT growth over 0.93x and margins improved by 117.71 bps with improvement in debt matrix and better fixed asset turnover ratio.

3. CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of business of the

Company during the year ended 31 March, 2024.

4. DIVIDEND

Your Company has in place the Dividend Distribution Policy for the purpose of declaration and payment of Dividend in accordance with the provision of the Companies Act, 2013 (the "Act") and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations").

The Dividend Distribution Policy is available on the website of the Company at https://www.kaynestechnology.co.in/doc/ Codes-and-Policies/Kaynes%o20Technology_Dividend%o20distribution%o20policy.pdf under Investors section.

The Board does not recommend any dividend for the Financial Year 2023-24.

5. AMOUNTS TRANSFERRED TO RESERVES

The Company has not proposed to transfer any amount to the general reserve for the year ended 31 March, 2024.

6. ANNUAL RETURN

Pursuant to Sections 92(3) and 134(3)(a) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return i.e., Form MGT-7 of the Company for the FY 2023-24 is available on the website of the Company at https://www.kaynestechnology.co.in/doc/Regulation-46-of-sebi-lodr-regulation/Annual%20Return_2023-24.pdf

7. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):

Your Company has an appropriate mix of Executive, Non-Executive and Independent Directors to maintain the independence of the Board and separate its functions of governance and management. The composition of the Board of Directors, Key Managerial Personnel and changes in the composition of the Board of Directors and Key Managerial Personnel as on 31 March, 2024 is exhibited below:

Sl. No. Name (Messrs) Designation Date of appointment
1. Savitha Ramesh Executive Chairperson & Whole Time Director 28 March, 2008
2. Ramesh Kunhikannan Managing Director 28 March, 2008
3. Jairam P Sampath Whole Time Director & Chief Financial Officer 10 March, 2018
4. S G Murali Independent Director 21 February, 2022
5. Anup Kumar Bhat Independent Director 12 January, 2022
6. Alexander Koshy Independent Director 21 February, 2022
7. Heinz Franz Moitzi* Independent Director 16 June, 2023
8. Poornima Ranganath Independent Director 31 March, 2022
9. Rajesh Sharma Chief Executive Officer 20 December, 2021
10. S M Adithya Jain Company Secretary & Compliance Officer 15 September, 2023

*Mr. Heinz Franz Moitzi was appointed on the Board as an Independent Director during the FY 2023-24.

Appointment and Re-appointment:

The following Appointments and Re-appointments were made during the financial year till the date of the report:

• Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 16 May, 2023, appointed Mr. Heinz Franz Moitzi (DIN: 00323506) as an Additional Director in the category of Independent Director of the Company, with effect from the date on which inclusion / registration of his name in the Independent Directors Data Bank under the Ministry of Corporate Affairs ("MCA") portal and accordingly Mr. Heinz Franz Moitzi has registered himself on the Independent Directors Data Bank on 16 June, 2023. Further, the Members of the Company have approved his appointment as an Independent Director of the Company for a period of 5 years till 15 June, 2028 by way of a Special Resolution at the 15th Annual General Meeting held on 15 September, 2023.

• Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 31 July, 2023 approved the re-appointment of Mr. Ramesh Kunhikannan (DIN: 02063167) as Managing Director, for a further period of 5 years with effect from 01 April, 2024 to 31 March, 2029. The Members of the Company have approved his appointment by way of a Special Resolution at the 15th Annual General Meeting held on 15 September, 2023.

• Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors of the Company at its meeting held on 31 July, 2023 approved the re-appointment of Mrs. Savitha Ramesh (DIN: 01756684) as Executive Chairperson & Whole Time Director, for a further period of 5 years with effect from 01 April, 2024 to 31 March, 2029. The Members of the Company have approved her appointment by way of a Special Resolution at the 15th Annual General Meeting held on 15 September, 2023.

• In terms of the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Jairam P Sampath (DIN : 08064368), Whole-time Director, retires at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The details of Mr. Jairam P Sampath are provided in the Notice of the Annual General Meeting. The Board of Directors recommends his re-appointment.

Resignation:

• Mr. Vivekanandah Ramaswamy, resigned from the office of Independent Director of the Company with effect from close of business hours of the Company on 01 November, 2023, due to alternative professional engagement that is in conflict with the plans of the Company to foray into new business segment. The Board places on record its appreciation for the contributions made by him to the progress of the Company during his tenure as Director of the Company.

None of the Directors are disqualified from being appointed as such under the provision of Section 164 of the Companies Act, 2013.

Your Board consists of 8 (Eight) Members, which include 3 (Three) Executive Directors, 5 (Five) Independent Directors including 1 (One) Woman Independent Director as on the date of this Report. The Board periodically evaluates the need for change in its composition and size.

The Independent Directors, Mr. S G Murali, Mr. Anup Kumar Bhat, Mr. Alexander Koshy, Mr. Heinz Franz Moitzi and Mrs. Poornima Ranganath have maintained highest standards of integrity in their dealings with the Company. They also possess the requisite expertise and experience (including Proficiency) necessary for acting as Independent Directors of the Company. Annual Declarations received from the Independent Directors for the FY 2023-24 contain affirmations regarding registrations in the data bank.

The Company has 5 (Five) Key Managerial Persons (KMPs) including Executive Directors, Mrs. Savitha Ramesh, Executive Chairperson and Whole-time Director, Mr. Ramesh Kunhikannan, Managing Director, Mr. Mr. Jairam P Sampath, Whole-time Director and Chief Financial Officer, Mr. Rajesh Sharma, Chief Executive Officer and Mr. S M Adithya Jain, Company Secretary & Compliance Officer as on the date of this Report.

Changes in Key Managerial Personnel:

Mr. Ramachandran Kunnath resigned as Company Secretary & Compliance Officer of the Company w.e.f closing of business hours on 15 July, 2023. The Board has placed on record its deep appreciation of the contribution made by Mr. Ramachandran Kunnath during his tenure as Company Secretary & Compliance Officer of the Company.

Based on the recommendation of Nomination & Remuneration Committee, the Board at its Meeting held on 31 July, 2023 appointed Mr. S M Adithya Jain as Company Secretary & Compliance Officer w.e.f. 15 September, 2023.

List of Senior Management

Definition of Senior Management as per SEBI (Listing Obligations and Disclosure Requirement) 2015

"Senior Management" to include the officers and personnel of the listed entity who are members of its core management team, excluding the Board of Directors, and all the members of the management one level below the Chief Executive Officer or Managing Director or Whole Time Director or Manager (including Chief Executive Officer and Manager, in case they are not part of the Board of Directors). The new definition also covers all the functional heads, by whatever name called and the Company Secretary and the Chief Financial Officer.

List of Senior Management

SL No Name Designation
1. Jairam P Sampath Whole-Time Director and Chief Financial Officer
2. Rajesh Sharma Chief Executive Officer
3. Sajan Anandaraman Head - Commercial and Corporate Affairs
4. Premita Govind Head - Human Resources
5. Govind S Menokee Head - Information Technology
6. Col. Sharath Kumar Bhat Senior Vice President - International Business
7. Col. Dilip Nambiar Senior Vice President - Operations
8. R Balasubramanian Deputy CFO
9. G Sriram* Vice President - Operations
10. Vishwanathan K Senior Vice President - Supply Chain Management
11. Gaurav Mehta Senior Vice President - Business Development
12. Abdul Nazar Senior Vice President - Business Development (Automotive)
13 S M Adithya Jain Company Secretary and Compliance Officer

* Mr. G Sriram resigned from the office of Vice President with effect from closing of business hours on 26 March, 2024.

Declaration by Independent Directors:

Declarations under Section 149(7) of the Companies Act, 2013 have been received from all the Independent Directors of the Company confirming that they meet the criteria of independence as provided in Sub-Section 6 of Section 149 of the said Act and as per the Listing Regulations.

The Board has evaluated the Independent Directors and confirms that Mr. S G Murali, Mr. Anup Kumar Bhat, Mr. Heinz Franz Moitzi, Mr. Alexander Koshy and Mrs. Poornima Ranganath have fulfilled the independence criteria as specified in the Listing Regulations and their independence from the management.

Details on terms of appointment of Independent Directors and the familiarisation program have been displayed on website of the Company at https:// www.kaynestechnology.co.in/doc/Codes-and- Policies/Kaynes%20Technology Familiarization%20 programme.pdf.

8. BOARD MEETINGS

The Board of Directors of the Company met 9 times during the year under review. The details of these Board Meetings are provided in the Report on Corporate Governance section forming part of the Annual Report. The necessary quorum was present for all the meetings.

The maximum gap between any two meetings was within the stipulated time period as prescribed under the Companies Act, 2013 and the Listing Regulations. The details of the Meetings of the Board and its Committees are exhibited in the Corporate Governance Report which forms an integral part of the Annual Report.

Separate meeting of the Independent Directors

In terms of requirements under Schedule IV of the Act and Regulation 25(3) of the Listing Regulations, one separate meeting of the Independent Directors was held during FY24. Further details are mentioned in the Corporate Governance report.

9. COMMITTEES OF THE BOARD:

During the FY 2023-24, your Board has 7 Committees viz., Audit Committee, Nomination & Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders' Relationship Committee, Risk Management Committee, Borrowings & Investment Committee and Fund-Raising Committee. Further, the Fund-Raising Committee was dissolved on 27 March, 2024. The composition of the Committees, Roles and Responsibilities and Meetings held, as per the applicable provisions of the Act, Rules and the Listing Regulations are given separately in Corporate Governance Report which forms an integral part of the Annual Report.

10. CORPORATE GOVERNANCE:

Your Company has been following and adhering to the best Corporate Governance practices to ensure value system of integrity, fairness, transparency, accountability and adoption of the highest standards of business ethics will reap benefits to all the stakeholders. The Corporate Governance Report in terms of Regulation 34 of the Listing Regulations has been disclosed separately and forms part of the Annual Report.

The Compliance Certificate issued by Mrs. Kalaivani S, Practising Company Secretary, on compliance with conditions of Corporate Governance as stipulated in the Listing Regulations and Corporate Governance Report is annexed to this report as Annexure - 1.

11. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A):

The Management Discussion and Analysis Report as required under Schedule V of the Listing Regulations, which forms part of the Annual Report.

12. PERFORMANCE EVALUATION OF THE BOARD AND BOARD DIVERSITY:

The performance evaluation of the Board and its Committees is applicable to the Company from FY 2023-24 pursuant to listing of the shares of the Company on the Stock Exchanges.

Your Board has in place a formal mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairperson of the Board. The evaluation was carried out through a structured questionnaire covering various aspects of the functioning of Board and its Committees. The detailed process in which annual evaluation of the performance of the Board and its Committees, Chairperson and individual Directors including Independent Directors is disclosed in the Corporate Governance Report which forms an integral part of the Annual Report.

Further, the Independent Directors, at their exclusive Meeting held on 01 December, 2024 reviewed the performance of the Board, its Chairperson and NonIndependent Directors and other items as stipulated under the Listing Regulations.

A diverse Board enables efficient functioning through its access to Broad perspectives and diverse thought processes underpinned by a range of scientific, industrial and management expertise, gender, knowledge and geographical origins. The Board recognises the importance of diverse composition and has adopted a Board Diversity Policy, which sets out the approach to diversity. The Board diversity policy of the Company is available on the website of the Company at https://www.kaynestechnoloay.co.in/doc/Codes-and-Policies/Kaynes%20TechnoloayBoard%20diversity%20policy.pdf

13. DIRECTORS' RESPONSIBILITY STATEMENT:

To the best of Board's knowledge and belief and according to the information and explanations obtained by the Board of Directors, Your Directors make the following statements in terms of Sections 134(3)(c) & 134(5) of the Companies Act, 2013:

a) In the preparation of the annual accounts for FY 2023-24, the applicable Indian Accounting Standards (Ind AS) 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 as on 31 March, 2024 and of the Profit and Loss 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 the Companies Act, 2013 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 have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively.

f) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operatina effectively.

14. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION:

Your Company has adopted Nomination & Remuneration Policy for the purpose of Directors' appointment and remuneration including criteria for determining qualifications, positive attributes and independence of a Director, in accordance with Section 178(3) of the Companies Act, 2013 and the rules made thereunder. The copy of said Policy is available on the website of the Company at https://www. kaynestechnoloay.co.in/doc/Codes-and-Policies/ Kaynes%20Technology NRC%20policy.pdf.

15. DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION) RULES, 2014:

Disclosures required under Section 197 of the Companies Act, 2013 read with rule 5 of the Companies (Appointment & Remuneration) Rules, 2014 have been annexed as Annexure-2.

Particulars of Employees' Remuneration, as required under Section 197(12) of the Companies Act, 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report. Considering the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report, excluding the said information, is being sent to the shareholders of the Company and others entitled thereto. The information is available for inspection at the registered office of the Company during working hours up to the date of the ensuing AGM. Any shareholder interested in obtaining such information may write to the Company at kaynestechcs@kaynestechnology.net in this regard

16. LOANS, GUARANTEES AND INVESTMENTS:

Particulars of Loans granted, Guarantees given and Investments made by the Company pursuant to Section 186 of the Companies Act, 2013 and the rules made thereunder are provided in financial statements which forms a part of the Annual Report.

17. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

All contracts/arrangements/transactions entered by the Company during FY 2023-24 with its related parties were in the ordinary course of business and on arm's length basis. All Related Party Transactions (RPTs) were placed before the Audit Committee for its approval.

During FY 2023-24, your Company had not entered into any materially significant transaction which requires the approval of Shareholders under Regulation 23 of the Listing Regulations or Section 188 of the Act. The disclosures on Related Party Transactions under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 is enclosed to this report as Annexure-3. The details of Related Party Transactions are also furnished in Notes to Financial Statements (both Standalone and Consolidated), as per the applicable Accounting Standards.

The Policy on RPTs as approved by the Board is available on the Company's website at https://www.kaynestechnology.co.in/doc/Codes-and- Policies/Kaynes%20Technology RPT%20policy.pdf

18. SHARE CAPITAL:

1. Changes In Share Capital:

A. Capital Structure as on 31 March, 2024:

Particulars Authorised Share Capital in ' Issued, Subscribed, Paid-up capital in '
Number of Equity shares 70,000,000 63,918,073
Nominal amount per Equity Share 10 10
Total amount of Equity Shares 700,000,000 639,180,730
Number of Preference Shares 2,000,000
Nominal value per Preference Share 10 10
Total amount of Preference Shares 20,000,000
Total 720,000,000 639,180,730

During the year under review, the Paid-up Share Capital of the Company was increased from ' 581,424,960/- to ' 639,180,730/-. The Company issued and allotted 5,775,577 Equity Shares of '10/- each pursuant to Qualified institutions placement.

The allocation of 5,775,577 Equity Shares at an issue price of ' 2,424 (per Equity Share (including a premium of ' 2,414 per Equity Share), which takes into account a discount of 1.06% (i.e., ' 25.96 per Equity Share) to the floor price of ' 2,449.96 per Equity Share, determined as per the formula prescribed under Regulation 176(1) of the SEBI ICDR Regulations for the Equity Shares to be allotted to the eligible qualified institutional buyers ("QIBs") in the Issue.

The Company has taken necessary approvals from the Board, Shareholders and the Stock Exchanges for the aforesaid issue of Equity Shares.

B. Details of Buy Back of Securities:

The Company has not bought back any of its securities during the year under review.

C. Details of issue of Sweat Equity Shares:

The Company has not issued any Sweat Equity Shares during the year under review.

D. Details of issue of Bonus Shares:

No Bonus Shares were issued during the year under review.

E. Details of Issue of Equity Shares with Differential Rights:

The Company has not issued any Equity Shares with differential rights during the year under review.

F. Disclosure in respect of voting rights not ex ercised directly by the employees in respect of shares to which the scheme relates:

There are no such cases arisen during the year under review.

19. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Your Company being one of top 1000 listed entities based on Market Capitalisation, is required to include Business Responsibility and Sustainability Report in the Annual Report describing the initiatives taken by the Company from environmental, social and governance perspective. The Business Responsibility and Sustainability Report which is part of the Annual Report.

20. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), the amount in Unpaid Dividend Account, the application money received for allotment of any securities and due for refund, principal amount of matured deposits and debentures and interest accrued thereon, redemption amount of preference shares, etc. remaining unclaimed and unpaid for a period of 7 (Seven) years from the date it became due for payment by the Company shall be transferred to the Investor Education and Protection Fund established by the Central Government. In addition to that, the Shares on which Dividend has not been paid or claimed by the Shareholders for 7 (Seven) consecutive years or more shall be transferred by the Company to IEPF, pursuant to Section 124(6) of the Act and the rules made thereunder.

During the FY 2023-24, there were no amounts which were required to be transferred to the IEPF by the Company.

21. EMPLOYEE STOCK OPTION SCHEME:

Your Company has an Employee Stock Option Scheme under 'KAYNES ESOP SCHEME 2022', which is administered by the Nomination & Remuneration Committee for the benefit of employees.

The Compliance Certificate from the Secretarial Auditor of the Company stating that the Kaynes ESOP Scheme 2022 has been implemented in accordance with SEBI (Share Based Employees Benefits and Sweat Equity) Regulations, 2021 is annexed to this report. The disclosures as required under SEBI (Share Based Employees Benefits and Sweat Equity) Regulations, 2021 forms part of this report.

Pursuant to Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014, the applicable disclosures as on 31 March, 2024 are as follows:

Details of ESOP

(i) Description of the existing ESOP Plan is summarized below:

Sl. No. Particulars KAYNES ESOP SCHEME 2022
1. Date of Shareholder's Approval 12 January, 2022
2. Date of last Modification 14 October, 2022
3. Total number of Options approved 9,23,160
4. Exercise Price Per option ' 138/-
5. Pricing Policy ' 138/-
6. Vesting period 4 years
7. Exercise Period Within 2 years from the date of vesting
8. Variation in terms of Options during FY 2023-24 None

(ii) Movement of options during the FY 2023-24 is as follows:

Sl. No. Particulars ESOP Plan 2022
1. Number of Options outstanding at the beginning of the FY 2023-24 (01 April, 2023) 861,241
2. Number of Options granted during the FY 2023-24 (including re-grant of surrendered options) Nil
3. Number of Options forfeited/lapsed during the FY 2023-24 49,626
4. Number of Options vested during the FY 2023-24 -
5. Number of Options exercised during the FY 2023-24 -
6. Number of shares arising as a result of exercise of options -
7. Money realized by exercise of options (Rs) -
8. Number of options outstanding at the end of the FY 2023-24 (31 March, 2024) 811,615
9. No. of options exercisable as of 31 March, 2024 -

(iii) Employee wise details of options granted during the FY 2024 is as follows:

Sl. No. Particulars Number of Options Granted (including Re-Issue) Exercise Price per Option (in ')

1 Key Managerial Personnel (MD, CEO, CFO, CS) Jairam P. Sampath (WTD & CFO)

Nil Nil
Rajesh Sharma (CEO) Nil Nil
S M Adithya Jain (CS) Nil Nil
2 Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during that year Nil Nil
3 Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Nil Nil

22. DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

A. Conservation of Energy:

The Company continues to accord priority to energy conservation. The Company's 'energy saving' team is committed to minimise the energy consumption and is implementing several energy saving projects. Consistent efforts are being made for identifying potential areas for energy saving.

B. Technology absorption:

The Company continues to use the latest technologies for improving the productivity and quality of its services and products. The Company's operations require significant import of technology.

C. Foreign Exchange Earnings and Outgo:

Total Foreign Exchange Used (Cash basis) As on 31 March, 2024: ' 6,783.00 Mn
Total Foreign Exchange Earned (Accrual Basis) As on 31 March, 2024: ' 1,178.75 Mn

23. A STATEMENT ON THE DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY:

In today's economic environment, Risk Management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. Your Company ensures that all the risks are timely defined and mitigated in accordance with the Risk Management Process.

24. CORPORATE SOCIAL RESPONSIBILITY(CSR):

In line with Section 135 read with Schedule VII of the Companies Act, 2013, the Board has constituted a Corporate Social Responsibility (CSR) Committee and adopted a CSR Policy. The annual report on CSR activities for the Financial Year ended 31 March, 2024 is attached hereto and is marked as Annexure - 4.

25. INTERNAL FINANCIAL CONTROL:

Your Company has an Internal Financial Control System, commensurate with the size, scale and complexity of its operations. Internal Controls in the Company have been designed to further the interest of all its stakeholders by providing an environment which is facilitative to conduct its operations and to take care of, inter alia, financial and operational risks with emphasis on integrity and ethics as a part of work culture.

The scope and authority of the Internal Audit (IA) is defined by the Audit Committee. The Internal Auditors monitor and evaluate the efficacy and adequacy of internal financial control system in the Company and its compliance with accounting procedures, financial reporting and policies at all locations of the Company.

Based on the report of internal audit, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Any significant audit observations and corrective actions thereon are presented to the Audit Committee and the Board. No major internal control weakness was identified during the year. The Company also has a well-functioning Whistle Blower Policy in place.

Your Company has laid down set of standards, process and structures which enables to implement internal financial control across the organisation and ensure that the same are adequate and operating effectively.

26. PROHIBITION OF INSIDER TRADING:

In compliance with SEBI (Prohibition of Insider Trading) Regulation 2015, the Company has adopted a 'Code of Conduct for Prevention of Insider Trading'.

The said Code is available on the Company's website at https://www.kaynestechnology.co.in/doc/Codes- "and-Policies/Kaynes%20Technology Code%20of%20 -conduct%20for%20prevention%20of%20insider%20 ~trading.pdf.

27. VIGILANCE MECHANISM/WHISTLE BLOWER POLICY:

Pursuant to Section 177 of the Companies Act, 2013, the Company has established a Whistle Blower Policy for Directors and employees to report any unethical conduct, misuse of unpublished price sensitive information, actual or suspected fraud or violation of Company's Code of Conduct.

The detailed Policy is available on the website of the Company at https://www.kaynestechnology. co.in/doc/Codes-and-Policies/Project%20catalyst Policy%20on%20prevention%20of%20sexual%20 harrasment%20at%20workplace.pdf.

28. DISCLOSURE RELATING TO REMUNERATION OF EMPLOYEES AS REQUIRED UNDER THE PROVISIONS OF SECTION 197 READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 ARE AS FOLLOWS:

A. Employees who were employed throughout the year and were in receipt of remuneration in aggregate of not less than '1,02,00,000/- for 12 Months:

Sl. No. Name Designation Qualification Age (years) Experience (years) Date of com- mencement of employment Remuneration Received (' in Mn) Last employment Employer Name
PostHeld
1 Ramesh Kunhikannan Managing Director Bachelor's degree in Electrical Engineering 60 36 28 March, 2008 18.0 NA NA
2 Savitha Ramesh Chairperson & Whole Time Director Bachelor's degree in Commerce 52 28 28 March, 2008 18.0 NA NA

B. Employees who were employed for part of the year and were in receipt of remuneration in aggregate of not less than ' 850,000/-per month.

Sl. No. Name Designation Qualification Age (years) Experience (years) Date of commencement of employment Remuneration Received (' in Mn) Las employ Employer Name t ment Post Held
NIL

C. Remuneration received by Managing Director /Whole Time Director from Holding or Subsidiary Company:

During the year under review, Managing Director /Whole Time Director have not received any Remuneration or Commission from Subsidiaries of the Company. Further, the Company is not subsidiary to any other Company.

D. Affirmation that the payment of remuneration is as per the Remuneration Policy of the Company:

Your Board hereby affirms that the payment of remuneration is as per the Remuneration Policy of the Company.

29. HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES AND JOINT VENTURES:

Sl. No. Name of Company SUBSIDIARY / ASSOCIATE Holding percentage
1. Kemsys Technologies Private Limited Subsidiary 100.00%
2. Kaynes Electronics Manufacturing private Limited Subsidiary 100.00%
3. Kaynes Embedded Systems Private Limited Subsidiary 60.00%
4. Kaynes Technology Europe GmbH Subsidiary 60.00%
5. Kaynes International Design & Manufacturing Private Limited Subsidiary 95.21%
6. Kaynes Semicon Private Limited Subsidiary 100.00%
7. Kaynes Circuits India Private Limited Subsidiary 100.00%
8. Kaynes Mechatronics Private Limited Subsidiary 100.00%
9. Digicom Electronics INC Subsidiary 100.00%
10. ESSNKAY Electronics LLC Subsidiary 100.00%

Statement relating to Subsidiary Companies in Form AOC-1 is part of this report as Annexure - 5.

30. AUDITORS AND AUDITOR'S REPORT:

A. Statutory Auditors

In terms of the requirement of the Companies Act, 2013, Messrs K P Rao & Co, Chartered Accountants, having the Institute of Chartered Accountants of India, Firm Registration No.003135S, were appointed as Statutory Auditors of the Company for a term of five (5) years, to hold office from the conclusion of 13th Annual General Meeting until the conclusion of Eighteenth (18th) Annual General Meeting. Ratification of Auditors in every General Meeting is not required as first proviso to Section 139 has been deleted pursuant to notification dated 07 May, 2018.

The Auditors' Report read together with Annexure referred to in the Auditors' Report for the Financial Year ended 31 March, 2024 do not contain any qualification, reservation, adverse remark or disclaimers. The Auditor's Report is enclosed with the Financial Statements and forms part of the Annual Report.

During the year under review, the Statutory Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section134(3) (ca) of the Act.

B. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Company at its meeting held on 16 May, 2023 had appointed Mrs. Kalaivani S, Practising Company Secretary (CP No.: 22158), to undertake the Secretarial Audit of the Company for the Financial Year 2023-24.

The Secretarial Audit Report is annexed herewith as Annexure-6.

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

C. Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act, 2013, Messrs Brahmayya & Co., Chartered Accountants, Bengaluru, Firm Registration No. 000515S, were appointed as the Internal Auditors of the Company to undertake the Internal Audit of the Company for the Financial Year 2023-24.

During the year under review, the Internal Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section134(3) (ca) of the Act.

D. Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014, the Board of Directors of your Company at its meeting held on 16 May, 2023 had appointed Messrs GA and Associates, Cost Accountants, Mysuru (Firm Registration Number: 000409) as the Cost Auditors of the Company to undertake the Cost Audit of the Company for the Financial Year 2023-24.

31. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has in place the Policy on Prevention of Sexual Harassment at Workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Policy is available on the website of the Company at https://www.kaynestechnology. co.in/doc/Codes-and-Policies/Project%20catalyst Policy%20on%20prevention%20of%20sexual%20 harrasment%20at%20workplace.pdf.

An Internal Complaints Committee has been setup to redress complaints received regarding sexual harassment.

The following is the summary of sexual harassment complaints received and disposed off during the year: No. of complaints received in Financial Year 2023-24: NIL

No. of complaints disposed off during the Financial Year 2023-24: NIL

No. of complaints pending as on end of the Financial Year 2023-24: NIL

32. SECRETARIAL STANDARDS:

During the Financial Year 2023-24, your Company has complied with the all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

33. EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:

There are no material subsequent events after the balance sheet date upto the date of adoption of these financial statements which may have significant impact on these financial statement.

34. MATERIAL CHANGES & COMMITMENTS:

There are 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 to and the date of this report.

35. OTHER DISCLOSURES:

Disclosures Board's Comment
Deposits The Company has not accepted any public deposits within the meaning of Section 73 and under Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposit) Rules, 2014 during FY 2023-24. Hence, the disclosures as required under Rule 8(5)(v) of the Companies (Accounts) Rule, 2014 are not applicable.
Debentures The Company has not issued any debentures during FY 2023-24.
Insolvency and Bankruptcy Code, 2016 During FY 2023-24, no application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.
One-Time Settlement with the banks and financial institutions During FY 2023-24, your Company has not entered into any One-Time Settlement with the Banks and Financial Institutions.
Cost Audit In terms of the Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost accounting records and get them audited every year from Cost Auditor and accordingly such accounts and records are made and maintained by your Company. The Board of Directors appointed Messrs GA & Associates, Cost Accountants (FIRM REG. No. 000409) as Cost Auditors to audit the cost accounts of your Company for the Financial Year 2023-24. The Cost Audit Report for the FY 2023-24 will be filed with the Ministry of Corporate Affairs within the due date.
Disclosures Board's Comment
Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operation in future During FY 2023-24, no significant or material orders were passed by any of the Regulators or Courts or Tribunals which impact the going concern status and Company's operation in future.
Statement of Deviation(s) or Variation(s) During FY 2022-23, your Company has raised ' 5,300 Mn from Initial Public Offer (IPO). Your Board hereby confirms that there were no deviation(s) or variation(s) in the utilisation of proceeds from the objects stated in the offer document or explanatory statement to the notice for the general meeting, as applicable.
Statement of Deviation(s) or Variation(s) During FY 2023-24, your Company has raised ' 14,000 Mn from Qualified Institutions Placement (QIP). Your Board hereby confirms that there were no deviation(s) or variation(s) in the utilisation of proceeds from the objects stated in the offer document or explanatory statement to the notice for the general meeting, as applicable.

36. ACKNOWLEDGEMENTS:

The Board of Directors wishes to place on record its appreciation of the co-operation extended by all the Stakeholders and State Governments, Financial Institutions & Banks, employees, investors and customers.

For and on behalf of the Board of Directors KAYNES TECHNOLOGY INDIA LIMITED
Savitha Ramesh Ramesh Kunhikannan
Date: 16 May, 2024 (Executive Chairperson & WTD) (Managing Director)
Place: Mysuru DIN: 01756684 DIN: 02063167