De Neers Tools Ltd

Tothe Members,

Your Directors have the pleasure in presenting the 3^rd Annual Report of your company along with the Audited Financial Statements for the Financial Year ended on March 31 2024. Further, in compliance with the Companies Act, 2013 the company has made all requisite disclosures in the Board Report with the objective of accountability and transparency in its operations and to make you aware about its performance and future perspective.

SUMMARY OF FINANCIAL PERFORMANCE

The Company's financial performance, for the period ended 31^st March 2024, is summarized below:

REVIEW OF OPERATIONS AND STATEMENT OF COMPANY'S AFFAIRS

The Company has been engaged in the business of wholesale trading and import-export of all kinds ofhardware tools.

The revenue from operations stands atRs. 109.79 Crores as against Rs. 95.05 Crores during the last year and the Net profit stands at Rs. 8.65 Crores during the financial year ended 31^st March 2024 as against Rs. 6.93 Crores, which is an increase of 24.83% from the lastyear's profit.

TRANSFER TO GENERAL RESERVES

The Company has earned a good amount of profit during the year and the management has decided to transfer, after all appropriations and adjustments, Rs. 8.65 Crores to the Surplus.

RECOMMENDATION OF DIVIDEND

Keeping in view of the growth prospects of the company, the Board has not recommended any dividend for the equity shares for the said year. However, as per the terms of issuance and as statutorily required under the provisions of the Act, the company has already made provisions of Rs. 20,000 for payment towards dividends to preference shareholders.

CHANGES IN THE NATURE OF BUSINESS

During the year under review there was no change in the nature of the business of the company.

MATERIAL CHANGES AND COMMITMENTS

There were no material changes and commitments, affecting the financial position of the Company which has occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The company has aligned its current systems of internal financial control with the requirement of the Companies Act, 2013. The Internal Control - Integrated Framework (the 2013 framework) is intended to increase the transparency and account ability in an organization's process of designing and implementing a system of internal control. The framework requires a company to identify and analyze risks and manage appropriate responses. The company has successfully laid down the frame work and ensured its effectiveness.

The company's internal controls are commensurate with its size and the nature of its operations. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. The company has a well-defined delegation of power with authority limits for approving contracts as well as expenditure. Processes for formulating and reviewing annual and long-term business plans have been laid down. It has continued its efforts to align all its processes and controls with best practices.

Gautam Sehgal & Co., the statutory auditors of the company have audited the financial statements included in this report and have issued an attestation report on the company's internal control over financial reporting (as defined in section 143 of the Companies Act, 2013).

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors and the reviews performed by management and 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 2023-2024.

PUBLIC DEPOSITS

During the year under review, the company has not accepted any deposit under Section 73 of the Companies Act, 2013 read with Companies (Acceptance ofDeposits) Rules, 2014.

LISTING INFORMATION AND STATEMENT PURSUANT TO LISTING AGREEMENT

The Equity Shares of the Company are continued to be listed with NSE EMERGE Platform and in dematerialized form. The Annual Listing fee for the year 2024-25 has been paid.

AUDITORS

Statutory Auditor

Pursuant to the provisions of Section 139 of the Companies Act, 2013, and the rules framed thereunder, M/s. Gautam Sehgal & Co., Chartered Accountants (Firm Reg. No. 015736N), were appointed as the first statutory Auditors of the Company by the Board of Directors in its board meeting held on 20^th August, 2021, till the conclusion of first AGM, since its incorporation at such remuneration as may be mutually agreed.

Further, the Company approved the appointment of M/s. Gautam Sehgal & Co., Chartered Accountants (Firm Reg. No. 015736N), Statutory Auditors, in the first AGM, for period of five financial year, i.e. from the conclusion of the 01^st (First) Annual General Meeting (AGM) till the conclusion of 06^th (Sixth) AGM to be held in the financial year 2027.

Thereafter, there has been no change in the Auditors during the period under review.

Auditor's Report

The Auditor's Report for financial year ended 31^st March 2024, does not contain any qualification, reservation or adverse remarks. All observations made in the Independent Auditors' Report and notes forming part of the Financial Statements are self-explanatory and do not call for any further comments and also, there is no incident of fraud requiring reporting by the auditors under section 143(12) of the Companies Act, 2013 during the year under review.

The Auditor's report is enclosed with the financial statements in this Director's Report.

Secretarial Auditor

The Company had appointed Ms. Prachi Agarwal (CP No. 25579) as the Secretarial Auditor of the Company for the Financial Year 2023-24 as per the provisions of Section 204 of the Companies Act,

2013, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014. The report of the auditor is marked as Annexure-6 of this annual report.

Internal Auditor

The company had appointed M/s. SSAG & Associates, Chartered Accountants (FRN: 016060N), as the Internal Auditors of the Company for the financial year 2023-24.

MAINTENANCE OF COST RECORDS

The Directors state that the overall turnover of the company does not exceed the limit prescribed for maintenance of Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013, accordingly such accounts and records are not made and maintained by the Company.

SHARE CAPITAL

Authorized Capital

During the year under review, the authorized capital is INR 30,00,00,000/- divided into 1,00,00,000 Equity Shares ofINR 10/- each; and 20,00,000 0.01% Preference shares ofINR 100/- each.

Paid-up Capital

As on 31^st March 2024 the company's Paid-up capital stood as follows:

EXTRACT OF THE ANNUAL RETURN

Pursuant to Section 92(3) of the Companies Act, 2013, read with Section 134(3)(a) and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return is available on the website of the Company at www.deneerstools.com.

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

The particulars as prescribed under sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with Rule 8(3) of Companies (Accounts) Rules, 2014, are annexed herewith at "Annexure-1".

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED.

During the year there has been no significant or material orders passed or ordered.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Directors:

The Board of the Company was duly constituted in accordance with the provisions of the Companies Act, 2013 and applicable SEBI Regulations. The company has the following composition of Directors on its Board:

Mrs. Shilpy Aggarwal (DIN: 08058135) retires by rotation and being eligible, offers herself for reappointment. A resolution seeking shareholders' approval for her re-appointment along with other required details forms part of the Notice.

Chief Financial Officer

During the year under review, there was no change in the CFO and Mr. Kanav Gupta, Whole-Time Director, continued to act as the ChiefFinancial Officer (CFO) ofthe company w.e.f. 28^th July, 2021.

Company Secretary & Compliance Officer

During the year under review, Ms. Nisha Shaw tendered her resignation from the position of Company Secretary & Compliance Officer of the Company w.e.f. 16^th May 2023, which was duly taken on record by the Board. The board appointed Ms. Bhagyashree Periwal, as the Company Secretary & Compliance Officer w.e.f. 17^th May 2023.

DECLARATION BY THE INDEPENDENT DIRECTOR

Every Independent Director, at the first meeting of the Board in which he/ she participates as a Director and thereafter at the first meeting of the Board in every financial year, gives a declaration that he / she meets the criteria of independence as provided under the law and that he / she is not

aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact his / her ability to discharge his / her duties with an objective independent judgement and without any external influence.

In the opinion of the Board, the Independent Directors fulfil the conditions specified in the Act and are independent of the management

PERFORMANCE EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act.

The performance of the board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and non-executive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the entire Board, excluding the independent director being evaluated.

NUMBER OF MEETINGS OF THE BOARD

During the year the Board of Directors duly met Nineteen times on 24^th April 2023; 5^th May 2023; 8^th May 2023, 10th May 2023, 16th May 2023, 29th May 2023, 17th j_ui_y 2023, 17th August 2023; 25th August 2023, 04^th September 2023; 16^th October 2023; 4^th November 2023, 8^th November 2023; 18^th November 2023, 25^th November 2023, 08^th December 2023; 12^th February 2024, 13^th March 2024 and 30^th March 2024.

In respect of which notices were given and the proceedings were recorded and signed. The intervening gap between any two meetings did not exceed one hundred and twenty days.

COMMITTEES OF THE BOARD AND THEIR MEETINGS

During the reporting period the company has following Board Committees details of which are as follows:

(i) Audit Committee:

Extract of terms of reference:

The Committee is constituted in line with the provisions of Section 177 of the Act.

a) Oversight of financial reporting process.

bj Reviewing with the management, the annual financial statements and auditors' report there on before submission to the Board for approval, cj Evaluation of internal financial controls and risk management systems.

dj Recommendation for appointment, remuneration and terms of appointment of auditors of the Company.

Category & Composition:

The committee was duly constituted on 06^th June, 2022:

Meetings:

During the Financial Year under review, five meetings of committee were held on 8^th May 2023, 29^th May 2023,17^th August 2023, 08^th November 2023 and 12^th February 2024.

(ii) Nomination and Remuneration Committee (NRC):

Extract of terms of reference:

The Committee is constituted in line with the provisions of Section 178 of the Act.

a) Recommend to the Board the setup and composition of the Board and its Committees.

b) Recommend to the Board the appointment/re-appointment of Directors and Key Managerial Personnel(s).

c) Support the Board and Independent Directors in evaluation of the performance of the Board, its Committees and individual Directors.

d) Recommend to the Board the Remuneration Policy for Directors, executive team or Key Managerial Personnel as well as the rest of employees.

e) Oversee familiarization programs for Directors.

Category & Composition:

The committee was duly constituted on 06^th June, 2022:

Meetings:

During the Financial Year under review, four meeting of committee was held on 16^th May 2023,17^th August 2023, 4^th December 2023 and 18^th March 2024.

(iii) Stakeholders' Relationship Committee("SRC")

Extract of terms of reference:

The Committee is constituted in line with the provisions of Section 178 of the Act.

a) Consider and resolve the grievances of security holders.

b) Consider and approve issue of share certificates, transfer and transmission of securities, etc. Category & Composition:

The committee was duly constituted on 06 June, 2022:

Meetings:

During the Financial Year under review, one meeting of committee was held on 18^th March 2024.

CORPORATE GOVERNANCE

Your Company provides utmost importance to best Governance Practices and is designated to act in the best interest of its Stakeholders. Better Governance practice enables the company to introduce more effective internal controls suitable to the changing nature of business operations, improve performance and also provide an opportunity to increase Stakeholders' understanding of the key activities and policies of the organisation.

Pursuant to Regulation 15(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company is not required to mandatorily comply with the provisions of certain regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 being a company listed on the SME platform. Since your Company is listed on the SME platform of National Stock Exchange of India Limited, it is not required to file the Corporate Governance Report to the Stock Exchange and hence, it has not provided the Corporate Governance Report as part of this Annual Report.

MEETING OF INDEPENDENT DIRECTORS

Schedule IV of the Companies Act, 2013 and the Rules thereunder mandate that the independent directors of the Company shall hold at least one meeting in a financial year, without the attendance of non-independent directors and members of the Management.

During the year, the independent directors met once on 20.03.2024. At the meeting, the independent directors discussed, among other matters, the performance of the Company and risks faced by it, the flow of information to the Board, competition, strategy, leadership strengths and weaknesses, governance, compliance, Board movements, succession planning, human resources matters and the performance of the executive members of the Board, and the Chairperson.

The Board is satisfied with the integrity, expertise and experience (including the proficiency) of the independent directors and their contributions towards the enhancement of operations of the Company.

During the year under review, the Independent Directors met on March 20,2024 inter alia, to:

a. Review the performance of the Non- Independent Directors and the Board of Directors as a whole.

b. Review the performance of the Chairperson of the Company, taking into the account of the views of the Executive and Non- Executive Directors.

c. Assess the quality, content and timeliness of flow of information between the management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

All the Independent Directors were present in the meeting.

RISK MANAGEMENT

The Company has put in place the Risk Management System("RMS") as a part of its transformation agenda. RMS incorporates an integrated framework for managing risks and internal controls. The internal financial controls have been documented, embedded and digitised in the business processes. Internal controls are regularly tested for design, implementation and operating effectiveness. RMS is enabled through extensive use of technology to support the risk management processes, ensure the ongoing effectiveness of internal controls in processes, compliance with applicable laws and regulations.

The Compliance Function ensures compliance activities related to the Financial, Operational and People Management Systems of the various group entities. This includes various statutes such as industrial and labour laws, taxation laws, corporate and securities laws, health, safety and environmental laws, etc. The ongoing effectiveness of compliance management activities is reviewed independently by the Group Audit Function.

The combination of independent governance, assurance and oversight structures, combined with automated risk management, controls and compliance monitoring, ensures robustness and integrity of financial reporting, management of internal controls and ensures compliance with statutory laws, regulations and company's policies. These provide the foundations that enable optimal use and protection of assets, facilitate the accurate and timely compilation of financial statements and management reports.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

Pursuant to Section 177(9) and (10) of the Companies Act, 2013, the Company has formulated Whistle Blower Policy for vigil mechanism of Directors and employees. The mechanism provides for adequate safeguards against victimization of employees and Directors who use such mechanism and makes provision for direct access to the chairman of the Audit Committee in exceptional cases. The company believes in honesty, integrity, ethics, transparency and good conduct in its professional environment and provides such kind of environment to its employees and directors and always encourages its team to follow such standards in their activities. The directors, employees and other team members are free to report on the issues which require genuine concern. Audit Committee of the Board of directors has the responsibility to review the functioning of vigil mechanism and the same has been performed by the committee periodically.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

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

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

c) They 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) 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 such internal financial controls are adequate and operating effectively;

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

DETAILS OF SUBSIDIARY/JOINT VENTURE/ ASSOCIATE COMPANIES

During the year under review the Company does not have any Subsidiary/ Joint Venture/Associate Companies. However, the Board in its board meeting held on 13^th March 2024, approved the incorporation/establishment of a wholly owned subsidiary in Dubai, United Arab Emirates. The process of establishment is under process and the company doesn't have complete comprehensive details. Hence the requirement to provide details in form AOC-1 doesn't arise.

PARTICULARS OF LOANS, GUARANTEE OR INVESTMENTS

During the year under review the company has not given any loan, investment made, guarantees given and security provided under section 186 of the Companies Act, 2013. However, relevant disclosures, if any, are provided in the notes to financial statement.

HUMAN RESOURCES

The Management has a healthy relationship with the officers and the Employees.

INVESTOR GRIEVANCES REDRESSAL STATUS

During the Financial Year 2023-24, there were no complaints or queries received from the shareholders of the Company.

INVESTOR EDUCATION AND PROTECTION FUND

During the year under review the provisions relating to transfer of funds to Investor education and protection fund does not apply to the Company.

DISQUALIFICATIONS OF DIRECTORS

During the financial year 2023-2024 under review the Company has received Form DIR-8 from all Directors as required under the provisions of Section 164(2) of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014 that none of the Directors of your Company is disqualified to hold office as per provision of Section 164(2) of the Companies Act, 2013 and debarred from holding the office of a Director pursuant to any order of the SEBI or any such authority in terms of SEBI letter dated 14th June, 2018 and NSE circular dated 20th June 2018 on the subject "Enforcement of SEBI orders regarding appointment of Directors by Listed Companies".

The Directors of the Company have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis report has been separately furnished in the Annual Report and forms a part of the Annual Report is annexed as Annexure-2.

PARTICULARS OF EMPLOYEES AND REMUNERATION

In terms of the provisions of Sectionl97(12) of the Act read with Rules5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said Rules. Annexure-3.

SEXUAL HARRASEMENT

In accordance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition& Redressal) Act, 2013 ("POSH Act") along with the Rules made there under, the

Company has in place a policy which mandates no tolerance against any conduct amounting to sexual harassment of women at workplace.

The Company has constituted Internal Committee(s) ("ICs") to redress and resolve any complaints arising under the POSH Act. Training / awareness programs are conducted throughout the year to create sensitivity towards ensuring respectable workplace.

The Company is committed to provide a work environment which ensures that every employee is treated with dignity, respect and afforded equal treatment. No complaint was reported during the year under review.

DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS

During the year, no such settlement was taking place.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Related party transactions entered during the financial year under review are disclosed in the Financial Statements of the Company for the financial year ended March 31, 2024 as required under Accounting Standard-18. These transactions entered were at an arm's length basis and in the ordinary course of business. There were no materially significant related party transactions with the Company's Promoters, Directors, Management or their relatives, which could have had a potential conflict with the interests of the Company. Form AOC-2, containing the details of contracts and arrangements with related parties is enclosed herewith as Annexure-4 as per applicable provisions of the Companies Act, 2013.

CORPORATE SOCIAL RESPONSIBILITY

The company had carried out the CSR activities as mandated by the law. The CSR initiatives undertaken during the financial year 2023- 24 and the Annual Report on CSR activities as required by the Companies (Corporate Social Responsibility Policy) Rules, 2014, are set out in Annexure-5 to this Report. Since the amount required to be spend during the year was less than Rs. 50 Lakhs, the responsibilities of the CSR committee were discharged by the Board.

SECRETARIAL STANDARDS

Your Company complies with the Secretarial Standard on Meetings of Directors (SS-1) and Secretarial Standard on General Meetings (SS-2) whenever it has applicable. Your Company will comply with the other Secretarial Standards issued by the Institute of Company Secretaries oflndia (ICSI)as and when they are made mandatory.

CODE OF CONDUCT

The Company has in place a comprehensive Code of Conduct and Our Code (the Codes) applicable to the Directors and employees. The Codes give guidance and support needed for ethical conduct of business and compliance of law.

The Codes reflect the core values of the Company viz. Customer Value, Ownership Mindset, Respect, Integrity, One Tearn and Excellence. A copy of the Code of Conduct and Our Code are available on the

website of the Company at www.deneerstools.com.The Codes have been circulated to the Directors and Senior Management Personnel and its compliance is affirmed by them annually.

DETAILS OF APPLICATION / ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

Neither any application was made nor any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the financial year.

POLICY FOR PRESERVATION OF DOCUMENTS

Pursuant to the Regulation 9 of SEBI (LODR), 2015 the Company has maintained the policy of preservation of documents to keep the documents preserve as per Regulation 9(a) & 9(b) of SEBI (LODR), 2015 and the same has been uploaded on the website of the Company on www.deneerstools.com.

ACKNOWLEDGEMENT

The Board of Directors wish to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government and regulatory authorities, stock exchanges, customers, vendors, members, debenture holders and debenture trustee during the year under review. And to you, our shareholders, we are deeply grateful for the confidence and faith that you have always placed on us.