Kerala Ayurveda Ltd

The Company's financial performance during the year 2023-24 along with previous year figures is summarized below. Kerala Ayurveda Limited: (In Lakhs)

The Company does not propose to transfer any amount to its Reserves for the year under review.

During the Financial Year under review, the operational results ended with Rs- 27.12 Lakhs as against Rs- 289.07 Lakhs during the previous year. The Net revenue of the company stands at Rs.- 7314.12 Lakhs as against Rs-6329.88 Lakhs during the previous year, showing an increase of 15.54%. The consolidated net revenue including its subsidiaries for the current year is Rs- 10785.60 Lakhs against Rs-9341.33 Lakhs during the previous year. There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements related and the date of this report except as mentioned in the Financials.

Your company has seven subsidiaries including one step down subsidiary as on 31^st March, 2024 and the details are as under:

*CMS Katra Holdings LLC holds 100% shareholding in CMS Katra Nursing LLC; hence CMS Katra Nursing LLC is a step-down subsidiary of your company. The Company has acquired 51% stake in the equity share capital of OM VEDIC HERITAGE CENTRE PTE. LTD. on 7^th August 2024 at a consideration of SGD 280,000 (equivalent to INR 17,763,200) as per the executed Share Purchase Agreement and Shareholders' Agreement.

Indian Subsidiary

During the year under review, M/s. Ayurvedagram Heritage Wellness Centre Private Limited. has achieved a turnover of Rs.1169.20 Lakhs as against Rs. 904.30 Lakhs in the previous financial year. Accordingly, the EBITDA of the company is Rs. 480.16 Lakhs against Rs. 288.25 Lakhs in the previous year. Overseas Subsidiaries The combined turnover of overseas subsidiaries is Rs.2508.05 Lakhs as compared to Rs. 2246.34 Lakhs in the previous year. The performance of each of the subsidiaries of the Company is mentioned below: a) Ayurvedic Academy Inc The turnover of Ayurveda Academy Inc during the financial year 2023-24 is Rs. 1933.00 Lakhs as compared Rs. 1815.84 Lakhs in the previous year. The loss of the subsidiary after taxes was Rs. 0.39 Lakhs as compared to loss of Rs. 33.73 Lakhs in the previous year. b) Suveda Inc. (formerly known as Nutraveda Inc.) The turnover of Suveda Inc. during the financial year 2023-24 is Rs.575.04 Lakhs as compared to Rs. 430.50 Lakhs in the previous year. The subsidiary incurred a loss of Rs. 146.91 Lakhs as compared to a loss of Rs. 199.85 Lakhs in the previous year. c) Ayu Natural Medicine Clinic, PS, USA

The turnover of Ayu Natural Medicine Clinic, P S, USA is nil during the financial year 2023-24 and in the previous year. The subsidiary has not earned any profit in the financial year 2023-24 and in the previous year. d) CMS Katra Holdings LLC, USA The turnover of CMS Katra Holdings LLC, USA is nil during the financial year 2023-24 and in the previous year. The subsidiary has not earned any profit in the financial year 2023-24 and in the previous year. e) CMS Katra Nursing LLC, USA The turnover of CMS Katra Holdings LLC, USA is nil during the financial year 2023-24 and in the previous year. The subsidiary has not earned any profit in the financial year 2023-24 and in the previous year. f) Nutraveda Pte Ltd The turnover of Nutraveda Pte Ltd is nil during the financial year 2023-24 and in the previous year. The subsidiary has not earned any profit in the financial year 2023-24 and in the previous year

As per Rule 8 of Companies (Accounts) Amendments Rules, 2016, a report on the highlights of performance of subsidiaries, associates and joint venture companies and their contributions to the overall performance of the company during the period under report is attached as Annexure-1. Any member intending to have a copy of the Balance sheet and other financial statement of these Companies shall be made available on the website of the Company https://www.keralaayurveda.biz/investor-relationships under the “Investor” Tab. It shall also be kept for inspection during business hours by any shareholder in the registered office of the Company and the respective offices of its subsidiary companies.

During the Financial year ended 31st March, 2024, no entity has become or ceased to be a subsidiary, joint venture or associate of the Company.

The Board of Director's of your company, after considering holistically the relevant circumstances and keeping in view the company's growth prospects, has decided that it would be prudent not to recommend any Dividend for the year under review.

The company does not propose transferring any amount to reserves during the period. At the end of the year, the other equity of the company is Rs….. Lakhs as against Rs…….. Lakhs of the previous year. During the year the company had a surplus of Rs…… Lakhs.

There is no change in the nature of business of the Company during the financial year ended 31st March, 2024.

10. DIRECTORS & KEY MANAGERIAL PERSONS:

Appointment / Reappointment / Resignation of Directors/Retirement of Directors

Resignation of Directors

None of the Directors resigned during the FY 2023-24. Retirement by rotation

Mr. Anand Subramanian (DIN: 00064083) Director will retire by rotation at the ensuing Annual General Meeting of the company and being eligible has offered himself for re-appointment. A brief resume of the aforesaid Director and other information have been detailed in the notice convening the Annual General Meeting of the Company. An appropriate resolution for his re-appointment is being placed for approval of the members at the ensuing Annual General Meeting.

Appointment/Reappointment of Directors

The Board at its meeting held on 14^th August, 2024, on the basis of the recommendation of the Nomination and Remuneration Committee had approved continuation of appointment of Mr. Ramesh Vangal (DIN: 00064018) as Non-Executive and Non-Independent Director of the Company. The members in the ensuing Annual General Meeting approved the appointment of Mr. Ramesh Vangal.

Mr. Harish Kuttan Menon (DIN: 00585260) completed his first term of 5 consecutive years on June 29, 2024. The Board, on the recommendation of the Nomination and Remuneration Committee and considering his expertise and experience in the varied fields and on the basis of performance evaluation report, had approved the reappointment of Mr. Harish Kuttan Menon as an Independent Director via resolution by circulation for a term of 3 years with effect from June 30, 2024 to June 29, 2027. The members of the company approved the said re-appointment in the ensuing Annual General Meeting by way of a special resolution.

11. NUMBER OF MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEE

CONDUCTED DURING THE YEAR UNDER REVIEW:

An annual calendar of Board and Committee Meetings planned during the year were prepared and circulated in advance to the Directors. During the year Nine Board Meetings, Seven Audit Committee Meetings, Three Nomination Remuneration Committee meetings and Fourteen Stakeholders Relationship Committee meetings were convened and held. The details of meeting & attendance are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and the SEBI (LODR) Regulations, 2015 and pursuant to the relaxations provided.

During the financial year 2023-24, the Board of Directors of the Company met on the following dates-

Further, separate meeting of Independent Directors of the Company was held on 14^th February, 2024 where the prescribed items enumerated under Schedule IV to the Companies Act, 2013 and clause 25(4) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 were discussed.

12. DECLARATION BY INDEPENDENT DIRECTOR(S)

The independent directors of your Company have given a declaration to the Company under Section 149 (7) of the Companies Act, 2013 and Rule 6 of Companies (Appointment and Qualification of Directors) Rules 2014 that, they meet the criteria of independence as provided in Sub Section including SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). The independent directors have affirmed compliance with the Code of Conduct. The Independent Directors also affirmed compliance under Section 150 of the Companies Act, 2013 including any amendments/ notifications issued from time to time. In the opinion of the Board of Directors of the Company, Independent Directors of your Company holds highest standards of integrity and are highly qualified, recognized and respected individually in their respective fields. The composition of Independent Directors is the optimum mix of expertise (including financial expertise), leadership and professionalism.

13.FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

Periodic presentations are made at the Board and Committee meetings on business and performance updates of the Company and business strategy. The Company has carried out various programmes to familiarize Independent Directors with the Company, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters. Details of the familiarization programme for Independent Directors are explained in the Corporate Governance Report.

14. DETAILS OF EMPLOYEES AND RELATED DISCLOSURES PURSUANT TO SECTION

197(12) OF THE COMPANIES ACT, 2013

The statement containing information as required under the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) and 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report as Annexure 2.

15.A STATEMENT INDICATING THE MANNER IN WHICH F ORMAL ANNUAL

EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFROMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS:

Pursuant to the provisions of The Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the working of its committees. The manner the evaluation has been carried out has been explained in the Corporate Governance Report.

16.NOMINATION AND REMUNERATION POLICY OF DIRECTORS, KEY MANAGERIAL

PERSONNEL AND OTHER EMPLOYEES

As required under Section 178(1) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has approved a policy on directors' appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided u/s 178(3). The broad parameters covered under the Policy are - Company Philosophy, Guiding Principles, Nomination of Directors, Remuneration of Directors, Nomination and Remuneration of the Key Managerial Personnel and Senior

Management and the Remuneration of other employees and other related matters. The Company's Policy furnished as Annexure 3 forms part of this Report. The policy is also uploaded on the website of the Company at https://www.keralaayurveda.biz/investor-relationships under ‘Investor Section'

17.PARTICULARS OF AUDITORS:

M/s. Maharaj Rajan & Mathew (Firm Registration No. 01932S), Chartered Accountants, were appointed as the Statutory Auditors of the Company at the AGM held on 24th September, 2019 for a term of five consecutive years from the conclusion of the 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting.

The Report given by the Statutory Auditors on the standalone financial statements of the Company and the consolidated financial statements of the Company for the Financial year ended March 31, 2024 forms part of this Annual Report.

There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and /or Board under Section 143(12) of the Act and Rules framed there under.

Due to completion of tenure of existing Statutory Auditors and based on the recommendation of the Audit Committee, the Board of Directors in their Meeting held on August 14, 2024 had appointed M/s. G. Joseph & Associates, Chartered Accountants (Registration No. _006310), as the Statutory Auditors of the Company with effect from the conclusion of 32^nd Annual General Meeting till the conclusion of 37^th Annual General Meeting, subject to the approval of members. The resolution for their appointment has been mentioned in the Notice convening the 32^nd Annual General Meeting.

M/s. SVJS & Associates, a firm of practicing Company Secretaries (“Secretarial Auditors”), carried out the secretarial audit of compliance with the Act and the rules made there under, the Listing Regulations and other applicable regulations as prescribed by SEBI, Foreign Exchange Management Act, 1999 and other laws specifically applicable to the Company. The Secretarial Audit Report in Form MR-3 for the financial year under review is attached to this Report as Annexure 4. The Secretarial Audit Report is given in

Annexure- I, forming part of this report. The Secretarial Auditors' Report have the following observations.

The Secretarial Audit Report of Ayurvedagram Heritage Wellness Centre Private Limited, the material subsidiary of the Company is annexed to its Annual Report. These reports are uploaded on the website of the Company at https://www.keralaayurveda.biz/investor-relationships under ‘Investor Section'

According to Companies (Cost Records and Audit) Rules, 2014, your Company is required to get the Cost Audit done for the financial year 2023-24 and the Company has maintained cost records for the financial year 2023-24.

18. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism/Whistle Blower Policy for directors and employees to report genuine concerns has been established. The Vigil Mechanism / Whistle Blower Policy has been uploaded on the website of the Company at https://www.keralaayurveda.biz/investor-relationships under ‘Investor Section'. The Policy is an extension of the Code of Conduct for Directors & Senior Management Personnel and covers any unethical and improper actions or malpractices and events which have taken place/suspected to take place.

As per the policy all Protected Disclosures should be addressed to the Vigilance Officer / Company Secretary or to the Chairman of the Audit Committee in exceptional cases.

19. RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. Major elements of risk/threats for Ayurveda Industry are regulatory concerns, consumer perceptions and competition. These are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. The Board of Directors has adopted a risk management policy for the company outlining the parameters of identification, assessment, monitoring and mitigation of various risks which is available on the website of the c ompany at https://www.keralaayurveda.biz/investor-relationships under ‘Investor Section'

20. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

OR COURTS OR TRIBUNALS:

Kerala Ayurveda Limited ("the Company") has received a notice dated July 8, 2024, from Mr. Ouma Shankar Ochit of Nexia Baker and Arenson, Mauritius, who has been appointed as the Liquidator of Katra Holdings Limited (KHL), Mauritius ("the Notice").The Board of Directors held an emergency meeting on July 9, 2024, to discuss this development.. A plaint bearing OS No.255 of 2024 (“Suit”) was filed by Mr. Ramesh Vangal and heard before the Hon'ble Munsiff Court at Aluva, Ernakulam, on July 12, 2024, seeking injunctive reliefs against the Notice.

21. CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility provisions of the Companies Act, 2013 are not applicable to the company and the same is being done as a part of the corporate ethos of the Company. However, your company always had a deep sense of responsibility towards the community and has conducted bone care camps, diabetes camps and BMD Camps.

22. DEPOSITS:

In terms of the provisions of Section 73 of the Companies Act, 2013, the company has not accepted any deposits from the public during the financial year under review and there are no outstanding fixed deposits from the public as on 31^st March 2024.

23. CORPORATE GOVERNANCE:

Your company has complied with corporate governance norms as stipulated by SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed report on Corporate Governance in line with requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure <<>>. A certificate from Statutory Auditors confirming the compliance of Corporate Governance is also attached to this report.

24. AUDIT COMMITTEE

The details pertaining to composition and meetings of the Audit Committee are included in the report on corporate Governance.

25. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of the operations, performance and future outlook of your company and its businesses is given in the Management Discussion and Analysis Report, which forms part of this report attached as Annexure.

26. EXTRACT OF ANNUAL RETURN

As required under Section 92(3) of the Companies Act, 2013, an extract of Annual Return is uploaded on the website of the Company at https://www.keralaayurveda.biz/investor-relationships.

27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of loans and Investments and guarantees covered under the provisions of Section 186 of the Act are given in the Notes to the Financial Statements forming a part of Annual Report. Current borrowings of the company are compliant with Section 180(1)(c) of the Companies Act, 2013

28. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of contracts or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 including certain arm's length transactions under that proviso attached as Annexure 6 in Form AOC-2 forms an integral part of this report. All related party transactions are presented to the Audit

Committee and the Board. Omnibus approval is obtained before the commencement of the new financial year, for the transactions which are repetitive in nature and for the transactions which are not foreseen. In line with the requirements of the applicable laws, the Company has formulated a policy on related party transactions which is uploaded on the website of the Company at :https://www.keralaayurveda.biz/investor-relationships.

29. DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) of the Companies Act, 2013, in relation to Financial statements of the company, the Board of Directors state that: In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures. The directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent 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 and loss of the company for that period. The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities. The directors have prepared the annual accounts on a going concern basis. The directors, had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively, and

a. The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

30. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE

(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. As required under law, an Internal Compliance Committee has been constituted for reporting and conducting inquiry into the complaints made by the victim on the harassment at the workplace. The Internal Committees shall consist of the following members to be nominated by the employer, namely: a Presiding Officer who shall be a woman employed at a senior level at workplace from amongst the employees.

Provided that in case a senior level woman employee is not available, the Presiding Officer shall be nominated from other offices or administrative units of the workplace referred to in subsection (1).

Provided further that in case the other offices or administrative units of the workplace do not have a senior level woman employee, the Presiding Officer shall be nominated from any other workplace of the same employer or other department or organisation;

not less than two Members from amongst employees preferably committed to the cause of women or who have had experience in social work or have legal knowledge;

one member from amongst non-governmental organisations or associations committed to the cause of women or a person familiar with the issues relating to sexual harassment: Provided that at least one-half of the total Members so nominated shall be women

During the year under review, there were no complaints received by the ICC. Further to build awareness in this area, the Company has been conducting necessary trainings in the organization on a continuous basis at all the levels of employee.

31. CONSERVATION OF ENERGY, T ECHNOLOGY ABSORPTION AND F OREIGN

EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgoes required under Section134(3)(m) of the Companies Act, 2013 read with Rule8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure 7 that forms part of this Report.

32. HUMAN RESOURCES

Your Company treats its “human resources” as one of its most important assets. Your Company continuously invests in attraction, retention, and development of talent on an ongoing basis. A number of programs that provide focused people's attention are currently underway. Your Company's thrust is on the promotion of talent internally through job rotation and job enlargement.

33. RESEARCH AND DEVELOPMENT

The Research & Development centre of KAL is recognized R&D Lab by DSIR, Ministry of Science and Technology, Govt. of India. This recognition was obtained in 1999 and it was renewed till 2025.

34. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying in unpaid or unclaimed dividends for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF) under Section 124 and Section 125(2) of the Companies Act, 2013.

35. DISCLOSURE WITH RESPECT T O DEMAT SUSPENSE ACCOUNT/UNCLAIMED

SUSPENSE ACCOUNT

There are no shares in the DEMAT suspense account/unclaimed suspense account.

36. LISTING WITH STOCK EXCHANGES

The equity shares of the company are listed on Bombay Stock Exchange and the Company confirms that it has paid the Annual Listing Fees for the year 2023-24 to BSE Limited.

37. COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors state that the applicable Secretarial Standards i.e., SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to “Meetings of the Board of Directors and General Meetings” respectively have been duly complied with.

38. INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the financial year, neither any application nor any proceeding is initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

39. SETTLEMENTS WITH BANKS OR FINANCIAL INSTITUTIONS:

During the year under review, no settlements were made by the Company with any Banks or Financial Institutions.

40. THE 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 ALONG WITH THE REASONS THEREOF.

During the FY 2023-24, there were no Insolvency Proceedings initiated against the Company and hence there were no instances of one-time settlement with banks or financial institutions.

41. DETAILS OF PENALTIES/ PUNISHMENT/ COMMITMENTS AFFECTING THE FINANCIAL

POSITION OF THE COMPANY BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE DIRECTORS' REPORT

There were no penalties/punishment/commitments affecting the financial position of the Company between the end of the financial year and the date of this report.

42. DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING ON THE COMPANY

There were no agreements binding on the company between the end of the financial year and the date of this report.

ACKNOWLEDGMENTS

The Board places on record its appreciation for the continued patronage, support and cooperation extended by its shareholders, customers, bankers, consultants, business associates, all Government and statutory agencies with whose help, cooperation, and hard work the Company was able to achieve the results. Your directors would further like to record appreciation to the efforts of all the employees for their valuable contribution to the Company.

Annexure-1 FORM AOC-1

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014) Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures. PART “A”: Subsidiaries (Information in respect of each subsidiary to be presented with amounts in Lakhs.)

Name of Subsidiaries which are yet to commence operations: Nutraveda Pte Ltd Name of subsidiaries which have been liquidated or sold during the year: NIL.

ANNEXURE 2

The ratio of the remuneration of each director to the median employee's remuneration and other details in terms of sub- section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.

Note: The Particulars of top ten employees in terms of remuneration drawn as required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 shall be provided to the shareholders on request. During FY 2023-24, no employee was in receipt of remuneration of more than rupees One Crore and Two lakhs in aggregate. No employee who was employed for part of the year was in receipt of remuneration of more than Rupees Eight Lakhs and Fifty Thousand Per month. No employee employed throughout the financial year or part thereof, was in receipt of remuneration which in the aggregate is in excess of that drawn by the whole-time director and does not hold by himself or along with his spouse and dependent children, not less than two percent of the equity shares of the company as per Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules,2016.

ANNEXURE 3

NOMINATION AND REMUNERATION POLICY OF KERALA AYURVEDA LIMITED

PREAMBLE

Section 178 of the Companies Act, 2013 and the provisions of the Chapter IV, Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, require the Nomination and Remuneration Committee of the Board of Directors of every listed entity, to: A. Devise a policy on Board diversity; B. Identify persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the Board their appointment and removal; C. Formulate the c riteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration of the directors, key managerial personnel and other employees; D. Formulate the criteria for evaluation of Independent Directors and the Board and carry out evaluation of every director's performance; E. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report. Accordingly, in adherence to the above said requirements the Nomination and Remuneration Committee of the Board of Directors of Kerala Ayurveda Limited (KAL) herein below recommends to the Board of Directors for its adoption the Nomination and Remuneration Policy for the directors, key managerial personnel and other employees of the Company as set out below.

A. POLICY ON BOARD DIVERSITY

A.1.Purpose of this Policy:

This Policy on Board Diversity sets out the Company's approach to ensuring adequate diversity in its Board of Directors (the “Board”) and is devised in consultation with the Nomination and Remuneration Committee (the “Committee”) of the Board. A.2.Scope of Application: The aforesaid Policy applies to the Board of Kerala Ayurveda Limited (the “Company”). A.3.Policy Statement: The Company believes that a diverse Board will enhance the quality of the decisions made by the Board by utilizing the different skills, qualification, professional experience, knowledge etc. of the members of the Board, necessary for achieving sustainable and balanced development.

For appointments of persons to office of directors and deciding composition of the Board, the Nomination and Remuneration Committee (NRC Committee) and the Board shall also have due regard to this policy on Board diversity. All Board appointments are made on merit, in the context of the skills, experience, independence, knowledge and integrity which the Board as a whole requires to be effective. The Board of directors of the Company shall have an optimum combination of executive and non-executive directors. At a minimum, the Board of the Company shall consist of at least one woman Director. Selection of candidates will be based on a range of diversity perspectives, including but not limited to age, educational background, professional experience, skills, knowledge and length of service. The ultimate decision will be based on merit and contribution that the selected candidates will bring to the Board, having due regard for the benefits of diversity on the Board. The Board's composition (including gender, age, length of service) will be disclosed in the Corporate Governance Report annually.

B. APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR MANAGEMENT B.1.Appointment Criteria and qualifications:

B.3.Removal:

Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable Act, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing, removal of a Director, KMP or Senior Management subject to the provisions and compliance of the said Act, rules and regulations. B.3.Retierment: The Director, KMP and Senior Management shall retire as per the applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP, Senior Management in the same position / remuneration or otherwise even after attaining the retirement age, for the benefit of the Company.

C. REMUNERATION OF THE DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER

EMPLOYEES REMUNERATION POLICY

C.1.General:

The remuneration / compensation / commission etc. to Managerial Person, KMP and Senior Management Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the prior/post approval of the shareholders of the Company and Central Government, wherever required.

The remuneration and commission to be paid to Managerial Person shall be as per the statutory provisions of the Companies Act, 2013, and the rules made there under for the time being in force. Increments to the existing remuneration / compensation structure may be recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Managerial Person. Where any insurance is taken by the Company on behalf of its Managerial Person, KMP and any other employees for indemnifying them against any liability, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel.

C.2.REMUNERATION TO MANAGERIAL PERSON, KMP AND SENIOR MANGEMENT:

Senior Management: “senior management” shall mean personnel of the company who are members of its core management team excluding Board of Directors. Normally, this would comprise all members of management one level below the executive directors, including all functional heads.

C.3.REMUNERATION TO NON-EXECUTIVE/INDEPENDENT DIRECTOR

Apart from the Directors, KMP's and senior Management, the remuneration for rest of the employee is determined on the basis of the role and position of the individual employee, including professional experience, responsibility, job complexities and local market conditions. Decisions on annual increment shall be made based on the annual appraisal carries out by HODs of various departments.

D. EVALUATION OF INDEPENDENT DIRECTORS AND THE BOARD

The Independent Directors shall be evaluated on the basis of the following criteria i.e. whether they: a) act objectively and constructively while exercising their duties; b) objectively evaluate Board's performance, rendering independent, unbiased opinion c) exercise their responsibilities in a bona fide manner in the interest of the company; d) strive to Attend and participate in the Meetings. e) devote sufficient time and attention to their professional obligations for informed and balanced decision making; f) refrain from any action that would lead to loss of his independence and inform the Board immediately when they lose their independence, g) assist the company in implementing the best corporate governance practices. h) moderate and arbitrate in the interest of the company as a whole, in situations of conflict between management and shareholder's interest. i) abide by Company's Memorandum and Articles of Association, company's policies and procedures including code of conduct, insider trading guidelines etc. Apart from the above criterion below-mentioned indicative list of factors may be evaluated as a part of this exercise: j) Participation and contribution, k) Commitment (including guidance provided to senior management outside of Board / Committee meetings), l) Effective deployment of knowledge and expertise, m) Effective management of relationship with stakeholders, n) Integrity and maintenance of confidentiality, o) Independence of behavior and judgment, and Impact and influence. Also, once a year, the Board will conduct a self-evaluation. It is the responsibility of the Chairman of the Board to organise the evaluation process and act on its outcome.

The Executive Directors and Non- independent directors shall be evaluated on the basis of criteria given to them by the board from time to time and their performance will also be reviewed by Independent directors of the Company in their meeting as per Schedule IV of the Companies Act, 2013.

Form No. MR-3

SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31.03.2024

[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To

The Members

KERALA AYURVEDA LIMITED VII/415, Nedumbaserry, Athani P.O, Aluva, Ernakulam- 683585, Kerala

We, SVJS & Associates, Company Secretaries, have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by KERALA AYURVEDA LIMITED [CIN: L24233KL1992PLC006592] (hereinafter called “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 our verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of Secretarial Audit, the explanations and clarifications given to us and the representations made by the Management and considering the relaxations granted by the Ministry of Corporate Affairs and Securities and Exchange Board of India warranted due to the spread of the COVID-19 pandemic, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31.03.2024 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.

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31.03.2024 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 thereunder; (iii) The Depositories Act, 1996 and the Regulations and Bye-Laws framed thereunder;

(iv) 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.; (v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992:- (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; (c) Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (d) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018 (e) 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; (f) The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 to the extent applicable; (g) The Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018 to the extent applicable.

(vi) As informed to us, the following other laws are specifically applicable to the Company:

5. Kerala Spirituous Preparations (Control) Rules, 1969 We have also examined compliance with the applicable clauses of the following: (i) Secretarial Standards 1 and 2 issued by The Institute of Company Secretaries of India; (ii) The Listing Agreement entered into by the Company with BSE Limited.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards etc. mentioned above subject to the following observations:

We further report that:

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 period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions of the board were unanimous and the same was captured and recorded as part of the minutes.

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

We further report that during the audit period there were no instances of:

i. Public/Right/ debentures/sweat equity; ii. Redemption / buy-back of securities; iii. Major decisions taken by the members in pursuance to section 180 of the Companies Act, 2013 iv. Merger / amalgamation / reconstruction; v. Foreign technical collaborations.

At the Extra Ordinary General Meeting held on 07.06.2023 the Company has passed a resolution for adoption of new Articles of Association. A resolution was also proposed to offer, issue and allot equity shares of the company to investors on preferential basis. The said resolution was withdrawn by the company. Due to prevailing market conditions and further discussions with its proposed investor, it was proposed to review the requirement of additional capital in near future, amend and enhance the proposition.

At the Annual General Meeting held on 27.09.2023, the following resolutions were passed, among others:

To renew the related party agreement with Ayurvedagram Heritage Wellness Centre Private Limited for sale of medicines upto Rs.500 lakhs during the period 01.04.2023 to 31.03.2024. To take control over the business segment Nutraveda from Katraphytochem (India) Pvt Ltd. and to enhance the limit of Related party transactions with Katraphytochem (India) Pvt. ltd. as a yearly limit up to Rs. 5 crores for purchase of raw material and up to Rs. 5 crores for sale of products, for FY 23-24. To consider and approve the issuance of equity shares (5,55,000 equity shares of face value of Rs. 10/- for an issue price or Rs. 125.21 (including a premium of Rs. 115.21/- per equity share) for an amount upto Rs. 6,94,91,550/-) on preferential basis to Katra Phytochem (lndia) Pvt Ltd, promoter group by partially adjusting the existing unsecured loan of the company. To approve Related Party Transactions with Katra Phytochem (lndia) Private Limited to sell the land held in the name of the company at a value of Rs. 8,14,00,000/- (Rupees Eight Crore Fourteen Lakhs Only) and consequent adjustment to the loan amount of Rs. 8,14,00,000/-. Approval to sell/transfer or otherwise dispose of the land situated at SY No.7/2 at Naganayakanakote, Anugondanahalli Hobli, Hoskote Taluk, Bangalore having an area of 2.85 acres held in the name of the company towards using the sale proceeds to settle partially the loan extended by Katra Phytochem (India) Private Limited.

At the Extra Ordinary General Meeting held on 20.12.2023, the following resolutions were passed:

To increase the authorized share capital of the company from Rs.12 Crores to Rs.15 Crores and consequent amendment to the Memorandum of Association of the company. To offer, issue and allot upto 949172 equity shares for cash at a price of Rs.230/-(including a premium of Rs.220/- per equity share) of the company to investors on preferential basis. To approve Kerala Ayurveda Employee Restricted Stock Unit Plan, 2023 (“ESOP 2023”) of the company for issuance to the employees of company.

This report is to be read with Annexure A of even date and the same forms an integral part of this report.

FORM No. MR-3 SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31^st MARCH 2024

To,

The Board of Directors,

Ayurvedagram Heritage Wellness Centre Private Limited CIN: U74140KA2003PTC031511 Regd. Office: Hemmandanahalli, Samethanalli Post, Whitefield, Bangalore-560067, Karnataka.

We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by AYURVEDAGRAM HERITAGE WELLNESS CENTRE PRIVATE LIMITED (hereinafter called 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 our verification of the Company's books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31^st 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:

We have examined the books, papers, minute books, forms and returns filed, and other records maintained by the Company for the financial year ended on 31^st March 2024 according to the provisions of:

i. The Companies Act, 2013 (‘the Act') and the Rules made thereunder and the relevant provisions of the Act; ii. The Securities Contracts (Regulation) Act, 1956 (‘SCRA') and the Rules made thereunder: To the extent applicable to an Unlisted Company which is material subsidiary of a Listed Company; iii. The Depositories Act, 1996 and the Regulations and Byelaws framed thereunder: -

To the extent applicable to an Unlisted Company which is material subsidiary of a Listed Company; iv. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment (FDI), Overseas Direct Investment and External Commercial Borrowings: - Not applicable as the Company as the Company does not have any FDI; v. The Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'): - To the extent applicable to an Unlisted Company which is material subsidiary of a Listed Company. vi. We further report that having regard to the compliance system prevailing in the Company, we have not reviewed the other laws specifically applicable to the Company.

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI) (ii) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015; - To the extent applicable to an Unlisted Company which is material subsidiary of a Listed Company.

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc, mentioned above except to the extent as mentioned below:

a) Non-compliance of Secretarial Standards: During the period under review, the notes to agenda for board meetings were not sent to Directors. Additionally, the draft and signed minutes of these meetings were not circulated to the board members as required under Secretarial Standards. b) Maintenance of books of accounts and audit trail as per Rule 3 of the Companies (Accounts) Rules, 2014: According to Rule 3 of the Companies (Accounts) Rules, 2014, the books of account and other relevant documents maintained in electronic form must be accessible in India at all times. Additionally, the Company must use accounting software which has a feature of recording audit trail for every transaction. However, during the period under review, the Company has not used the accounting software with this audit trail feature.

We further report that:

The Board of Directors of the Company was duly constituted during the year under review. The changes in the composition of the Board of Directors that took place during the period under review carried out in compliance with the provisions of the Act.

During the period under review, decisions were carried through unanimously and no dissenting views have been recorded.

We further report that based on review of compliance mechanism established by the Company, we are of the opinion that the management has adequate systems and processes commensurate with its size and operations, to monitor and ensure compliance with all applicable laws, rules, regulations and guidelines; and

As informed, the Company has responded to notices for demands, claims, penalties etc. levied by various statutory / regulatory authorities and initiated actions for corrective measures, wherever necessary.

There are no other specific events/actions in pursuance of the above referred laws, rules, regulations guidelines etc., having a major bearing on the Company's Affairs.

ANNEXURE 6 FORM NO. AOC -2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Amendments Rules, 2016. Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arm's length transaction under third proviso thereto.