Kokuyo Camlin Ltd

To,

The Shareholders of Kokuyo Camlin Limited

Your Directors have pleasure in presenting the 77^th Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended 31^st March, 2024.

FINANCIAL RESULTS:

(' In Lakhs)

OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE:

During the year, the Company reported gross sale/ income of Rs.86452.89/- Lakhs as compared to Rs.82579.32 Lakhs for the previous year. The Company reported a profit after tax for FY 2023-24 of Rs.4383.20 Lakhs in comparison with a profit after tax of Rs.2444.73 Lakhs for FY 2022-23, higher by 79.29%.

DIVIDEND:

The Board of Directors of your Company is pleased to recommend the payment of dividend on equity shares at the rate of 50% viz. Rs.0.50 per equity share of Rs.1/- each, subject to the approval by the Shareholders at the ensuing Annual General meeting and the payment is subject to deduction of tax at source as may be applicable. The Board has recommended a dividend based on the parameters laid down in the Dividend Distribution Policy. The Dividend Distribution policy is available on the website of the Company at https://www.kokuyocamlin.com/policies.

The dividend would result in cash outflow of Rs. 5,01,51,903/-. This payment represents a dividend payout ratio of 11.44%.

TRANSFER TO RESERVE:

The Board does not propose to transfer any amount to general reserve and has decided to retain the entire amount of profit for the financial year 2023-24 in the profit and loss account.

MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis forms an integral part of this report and is presented separately. It gives details of the overall industry structure, economic developments, performance and state of affairs of your Company's operations and their adequacy, risk management systems and other material developments during the financial year 2023-2024.

SHARE CAPITAL:

During the year under review, there was no change in the share capital structure and the paid-up capital of the Company as on 31^st March, 2024 was Rs.1003.04 Lakhs.

CONSOLIDATED FINANCIALS STATEMENTS:

The Company does not have any subsidiary, associate or joint venture and hence, the Company is not required to prepare Consolidated Financial Statements.

SUBSIDIARIES:

At present, the Company does not have any subsidiary. No new subsidiary was incorporated or acquired by the Company during the year under review. Since the Company does not have any subsidiary, associate or joint venture, Form AOC-1 pursuant to the provisions of Section 129(3) of Companies Act, 2013 (the Act) is not applicable to your Company.

DEPOSITS:

The Company has not accepted any deposits from the public during the year under review. No amount on account of principal or interest on deposits from the public was outstanding as on 31^st March, 2024.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There have been no material changes or commitments that have affected the financial position of the Company subsequent to the close of FY 2023-24 till the date of this report. There is no change in the nature of the business of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not granted any Loans, Guarantees or Investments during the financial year ended 31^st March, 2024.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure - A".

RELATED PARTY TRANSACTIONS:

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their review/ approval on a quarterly basis. All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Act in form AOC-2 is not applicable to your Company.

The details of the transactions with related parties are provided in the accompanying financial statements. The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website at https://www.kokuyocamlin.com/policies.

CORPORATE GOVERNANCE REPORT:

Corporate Governance is all about ethical conduct, integrity and accountability. Good Corporate Governance involves a commitment of the Company to run the business in a legal, ethical and transparent manner and runs from the top and permeates throughout the Organisation. It is a key element improving the economic efficiency of Organisation. As per Listing Regulations, a separate section on Corporate Governance forms part of this report. A Certificate from M/s. JHR & Associates, Practicing Company Secretaries confirming compliance of Corporate Governance forms part of this Report. Certificate of the Managing Director, confirming the correctness of the financial statements, compliance with the Company's Code of Conduct and the Audit Committee in terms of Regulation 17 of the Listing Regulations is attached in the Corporate Governance report and forms part of this report.

Retirement by Rotation

In terms of the provisions of the Act, Mr. Masaharu Inoue, NonExecutive Director of the Company, retires by rotation at the ensuing Annual General meeting and, being eligible, offers himself for re-appointment. You are requested to appoint him. The profile of Mr. Masaharu Inoue seeking re-appointment forms part of the Notice.

Appointment / Re-appointment of Directors

During the year under review, Mr. Masaharu Inoue was appointed as an Additional Director in the capacity of NonExecutive Director by the Board of Directors with effect from 12^th May, 2023. The said appointment was also approved by the Members of the Company by passing an ordinary resolution at the 76^th Annual General Meeting held on 28^th July, 2023.

The Board of Directors at its meeting held on 25^th January, 2024 had:

a) approved the appointment of Ms. Naho Shigeta as an Additional Director in the capacity of Non-Executive Independent Director effective from 1^st February, 2024 for a period of five consecutive years up to 31^st January, 2029.

b) approved the appointment of Mr. Takeo Iguchi as an Additional Director in the capacity of Director in wholetime employment designated as ‘Executive Director' for the period of 3 (three) years effective from 1^st February, 2024 up to 31^st January, 2027.

c) approved the re-appointment of Mr. Shriram S. Dandekar as ‘Vice-Chairman & Executive Director' for a further period commencing 1^st February, 2024 to 31^st March, 2025.

Further, the Board of Directors at its meeting held on 8^th February, 2024 had:

a) approved the appointment of Mr. Nilesh Modi as an Additional Director in the capacity of NonExecutive Independent Director for five consecutive years commencing on 8^th February, 2024 up to 7^th February, 2029.

b) approved the appointment of Mr. Naganath Subramanian Iyer as an Additional Director in the capacity of NonExecutive Independent Director for five consecutive years commencing on 8^th February, 2024 up to 7^th February, 2029.

c) approved the appointment of Mr. Tomoya Okada as an Additional Director in the capacity of NonExecutive Independent Director for five consecutive years commencing on 8^th February, 2024 up to 7^th February, 2029.

d) approved the appointment of Mr. Satish Veerappa as an Additional Director in the capacity of the Managing Director with effect from 1^st April, 2024 for a period of three years.

The aforesaid appointments as approved by the Board of Directors on 25^th January, 2024 and 8^th February, 2024 respectively were also approved by the Members of the Company by passing special resolutions through postal ballot on 28^th March, 2024.

Cessation

During the year, Mr. koji Higashiguchi, Non-Executive Director, resigned with effect from close of business hours on 12^th May, 2023. The Board of Directors appreciated the contribution made by Mr. Higashiguchi.

Further, Mr. Shishir B. Desai and Mr. Sriram Venkataraman, retired from the position of the Independent Directors of the Company on completion of their respective second term of office as an Independent Director of the Company effecting from the close the business hours on 31^st March, 2024 and ceased to be the Independent Directors of the Company thereafter. The Board placed on record its sincere appreciation for the valuable services rendered by them during their tenure with the Company.

Key Managerial Personnel

During the year under review, Ms. Hinal Chheda, resigned from the position of the ‘Company Secretary & Compliance Officer' with effect from close of business hours on 12^th May, 2023. The Board of Directors at its meeting held on 12^th May, 2023, appointed Mr. Vipul Bhoy as Compliance Officer with effect from 13^th May, 2023 and further at the meeting held on 28^th July, 2023, appointed him as the ‘Company Secretary & Compliance Officer' of the Company with effect from 1^st August, 2023.

During the year, Mr. Chetan R. Badal, Chief Financial Officer of the Company passed away on 16^th January, 2024. He played a crucial role in the Company. The Company acknowledges his valuable contribution during his association with the Company.

Further, Mr. Satish Veerappa, ‘Manager' designated as ‘Chief Executive Officer was appointed as the ‘Managing Director' of the Company with effect from 1^st April, 2024 by the Board of Directors at its meeting held on 8^th February, 2024 and by the Members of the Company by passing a special resolution through postal ballot on 28^th March, 2024.

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with rules framed thereunder:

1. Mr. Satish Veerappa - Manager designated as Chief Executive Officer (up to 31^st March, 2024) and Managing Director (w.e.f. 1^st April, 2024)

2. Mr. Chetan R. Badal - Chief Financial Officer (up to 16^th January, 2024)

3. Ms. Hinal Chheda - Company Secretary & Compliance Officer (up to 12^th May, 2023)

4. Mr. Vipul Bhoy - Company Secretary & Compliance Officer (w.e.f. 1^st August, 2023)

The disclosure required under Section 197(12) of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure - B" forming an integral part of this report.

MEETINGS OF BOARD:

During the financial year 2023-2024, six Board meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act.

COMMITTEES OF THE BOARD:

As on 31^st March, 2024, the Board had five committees: Audit committee, Corporate Social Responsibility committee, Remuneration and Nomination committee, Stakeholders Relationship committee and Risk Management Committee. During the year, all recommendations made by the committees were approved by the Board. A detailed note on the composition of the Board and its committees is provided in the Corporate Governance Report.

FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:

In compliance with the requirements of Listing Regulations, the Company has put in place a familiarisation programme for the Independent Directors to familiarise them with their role, rights and responsibilities as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarisation program are explained in the Corporate Governance Report.

The same is also available on the website of the Company and can be accessed by web link https://www.kokuyocamlin. com/policies.

PERFORMANCE EVALUATION OF THE BOARD:

Pursuant to applicable provisions of the Act and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, its Committees, individual Directors including Independent Directors and Chairman of the Board.

Feedback from Directors was sought by way of structured questionnaire covering various aspects of the Board's functioning viz. Board composition, Board procedure, strategy, flow of information etc. and performance of Directors including but not limited to knowledge, skills, contribution to the discussions, Independence etc. The result of the evaluation was presented by the Chairman to the Board and the Board has agreed on the action plan for further improvement in functioning of the Board.

Further, the Independent Directors met separately without the presence of Non-Independent Directors and the members of management and discussed the performance evaluation of the Non-Independent Directors and the Board as a whole.

DECLARATION OF INDEPENDENCE:

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the applicable provisions of the Act as well as Listing Regulations. In the opinion of the Board, all the Independent Directors possess the integrity, expertise and experience including the proficiency required to be Independent Directors of the Company.

The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA).

REMUNERATION POLICY:

The Board has, on the recommendation of the Remuneration and Nomination Committee framed a policy for selection, appointment, and remuneration of Directors and KMPs. The Remuneration Policy is stated in the Corporate Governance Report and is also available on the website of the Company at https://www.kokuyocamlin.com/policies.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement under section 134(3)(c) of the Act, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them, hereby confirm that:

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

b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31^st March, 2024 and of the profit of the Company for the year ended on that date.

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) 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

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

CORPORATE SOCIAL RESPONSIBILITY:

Pursuant to Section 135(1) of the Act, the Company has constituted the Corporate Social Responsibility (CSR) Committee. The Composition of the CSR Committee is disclosed separately in the Corporate Governance report forming part of this Annual Report. The Company has in place, the CSR policy which outlines Company's philosophy towards Company's CSR program implementation. The CSR policy is available on the Company's website https://www.kokuyocamlin.com/policies. Pursuant to Section 135(5) of the Act and in accordance with the CSR policy, the Company has spent 2% of the average net profits of the Company during the three immediately preceding financial years. An annual report on CSR containing details as required under rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as "Annexure - C" and forms part of this report.

AUDITORS & AUDITORS REPORT: STATUTORY AUDITORS:

Pursuant to the provisions of Section 139(2) of the Act read with Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No.101248W/ W100022) were appointed as the Statutory Auditors of the Company for a second term of five consecutive years to hold office from the conclusion of 75^th Annual General meeting held on 29^th June, 2022 till the conclusion of 80^th Annual General meeting of the Company.

AUDITORS REPORT:

The observation of the Auditors in their report read with relevant notes to the accounts are self-explanatory and therefore do not require further explanations. The Auditors Report to the Members on the financial statements of the Company for the year ended 31^st March, 2024 does not contain any qualifications, reservations or adverse remarks.

There have been no instances of fraud by the Company or on the Company except an event of misappropriation of funds in the financial transaction with vendors in terms of wrongful gratification and unethical procurement by an employee of the Company which has been reported by the auditors under Section 143(12) of the Act. The Company has terminated the services of an employee. The Company does not expect any material financial impact.

SECRETARIAL AUDIT:

M/s. JHR & Associates, a firm of Company Secretaries, were appointed as Secretarial Auditor for the financial year 202324 pursuant to Section 204 of the Act. The Secretarial Audit Report submitted by them in the prescribed form MR-3 is attached as "Annexure - D" and forms part of this report.

There are no qualifications or observations or adverse remarks or disclaimer of the Secretarial Auditors in the Secretarial Audit/Compliance Report issued by them for the financial year 2023-24.

RECONCILIATION OF SHARE CAPITAL AUDIT:

As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Act re-emphasises the need for an effective Internal Financial Control System (IFC) in the Company, which should be adequate and shall operate effectively. To ensure effective Internal Financial Controls, the Company has its own process driven framework for the year ended 31^st March, 2024.

The Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations, wherein controls are in place and operating effectively and no material weakness exists. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and / or improved controls wherever the effect of such gaps would have a material effect on the Company's operation.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

The Company was not required to transfer any amount to the Investor Education and Protection Fund established by the Central Government (IEPF) during the financial year 2023-24 except the dividend declared for the financial year 2022-23 on the shares already transferred to IEPF.

TRANSFER OF SHARES TO IEPF:

The Company has not transferred any shares to IEPF during the financial year 2023-24. Details of shares transferred prior to the financial year 2023-24 have been uploaded on the website of IEPF as well as the Company.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:

The Company is an equal opportunity employer and consciously strives to build a work culture that promotes the dignity of all employees. As required under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the workplace. All women, permanent, temporary or contractual including those of service providers are covered under the policy. An Internal Committee comprising management staff has been set up at office and factory locations to redress complaints relating to sexual harassment. The Committee also includes an outside woman representative from an NGO. There was one case reported and resolved during the financial year 2023-24.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations.

CODE OF ETHICS AND VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

The Company has adopted a code of ethics and business conduct which lays down principles and standards that should govern the actions of the Company and employees. The Company has a vigil mechanism called "Whistle Blower Policy" with a view to provide a mechanism for employees of the Company to raise concerns of any violations of any legal or regulatory requirement, incorrect or misrepresentation of any financial statements and reports etc. The Company is committed to adhering to the highest standard of ethical, moral and legal conduct of business operations.

The Company has taken steps to establish Vigil Mechanism for Directors and Employees of the Company. The details of the Policy are posted on the website of the Company at https://www.kokuyocamlin.com/policies

PREVENTION OF INSIDER TRADING:

The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, Senior Management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under review, there has been due compliance with the said code of conduct for prevention of insider trading based on the SEBI (Prohibition of Insider Trading) Regulations, 2015.

INSURANCE:

The Company's plant, property, equipments and stocks are adequately insured against major risks. The Company also has appropriate liability insurance covers particularly for product liability. The Company has also taken Directors' and Officers' Liability Policy to provide coverage against the liabilities arising on them.

RISK MANAGEMENT

The Company operates in a dynamic business scenario that gives rise to external and internal risk factors. It has in place an integrated risk management approach called the ERM framework for risk identification, assessment and reporting.

Your Company has constituted a Risk Management committee of the Board with delegated responsibilities in relation to risk management processes within the Company. The said committee is responsible for formulating a detailed risk management policy and its implementation, putting in place a system for monitoring and evaluation of associated risks etc. As required by the Risk Management policy, the Company initiates risk identification and control testing exercise to provide briefing and reporting to the Board through Risk Management Committee.

The Risk Management policy is implemented by various department heads who take the risk ownership and monitor the risks on a periodical basis. The ERM Framework enables achievement of strategic objectives by identifying, analysing, assessing, mitigating, monitoring and governing any risk or potential threat to these company objectives. Systematic and proactive identification of risks and mitigation thereof enables effective and quick decision making and boosts the performance of the organisation. The ERM framework acts as a decision enabler which not only seeks to minimise the impact of risks but also enables effective resource allocation based on risk ranking and risk appetite. Strategic decisions are being taken after careful consideration of risks based on secondary risks and residual risks.

There are no risks which in the opinion of the Board threaten the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis Report which forms part of this Annual Report.

DISCLOSURE ON CONFIRMATION ON THE SECRETARIAL STANDARDS:

Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India have been duly complied with.

EXTRACT OF ANNUAL RETURN:

Pursuant to Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, a copy of the annual return is placed on the website of the Company and can be accessed at www.kokuyocamlin.com/policies.

PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197(12) of Act read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members through electronic mode on the website of the Company at https://www.kokuyocamlin.com/camel/.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT (BRSR)

Pursuant to regulation 34(2)(f) and other applicable provisions of the Listing Regulations, separate section on the Business Responsibility & Sustainability Report forms part of this report. Your Company is not falling under top 1000 listed entities based on the market capitalisation as on 31^st March, 2024.

ACKNOWLEDGEMENT:

Your Directors express their gratitude to the members, bankers, customers, financial institutions and other business constituents for their continued faith, assistance and support extended to the Company. Your Directors also sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels, thereby contributing largely to the growth and success of the Company. Your Directors also wish to place on record their appreciation for the support and guidance provided by its parent Company Kokuyo Co., Ltd. Japan.

Dilip D. Dandekar

Chairman & Non-Executive Director

Place : Mumbai

Dated : 15^th May, 2024