BOARD'S REPORT

Dear Members,

The Board of Directors are pleased to present 43^rd Annual Report together with the Audited Accounts of the Company for the financial year
ended on 31^st March, 2023.

OPERATIONS AND PROSPECTSFinancial Results (Standalone and Consolidated)

PERFORMANCE AND PROJECTIONS

The performance for the 2022-23 was remarkably better, all
business and market segments, both domestic and export,
witnessed a healthy recovery and better revenue and profitability
as the economic activities and market conditions were continuously
on the growth trajectory.

In the fiscal year, the Company achieved remarkable growth,
with consolidated sales revenue reaching Rs. 11,388 Million, a
substantial increase from Rs. 8,316 Million in the previous year. This
represents a robust growth rate of 36.9%, although slightly lower
than the growth rate of 46.6% recorded in the previous year, which
was under normal economic conditions following the subsiding of
the Covid-19 pandemic situation. The revenue growth of 36.9% in
comparison to a normal previous year is a significant achievement
for the Company, setting a new benchmark for performance.

Profit before tax also experienced substantial growth, rising from
Rs. 522.9 Million to Rs. 1,076.0 Million, reflecting a remarkable
increase of 105.8% compared to the previous year. On a
standalone basis, sales revenue from manufacturing operations

improved by 62.8%, amounting to Rs. 3,636.1 Million, compared
to Rs. 2,233.7 Million in the previous year. It is important to note
that the revenue for the year was exceptionally increased by a one¬
time revenue of Rs. 390 Million from the sale of trademarks 'Ethos'
and 'Summit', as well as an income and gain of Rs. 107 Million from
the sale of equity shares of Ethos Limited during its IPO.

The Company also reported a significant revenue growth of 40.5%
over the previous year, even when excluding the aforementioned
abnormal and exceptional one time revenues. This operational
revenue growth is a record for the Company and demonstrates
decent performance in comparison to industry parameters.

In terms of profitability, the Company recorded a profit before tax
of Rs. 892.4 Million (operational profit before tax of Rs. 585.40
Million), a substantial increase compared to the profit before tax
of Rs. 274 Million in the previous year. This represents an overall
growth rate of 225.7% (operational growth of 113.60%) over the
previous year. Furthermore, the Company achieved a net profit
after tax of Rs. 692.3 Million, a significant improvement from
Rs. 212.9 Million in the previous year.

To keep the momentum going, the Company's overarching strategy
centres around two key objectives: firstly, to enhance the export of
watch components and secondly, to expedite the growth of the
precision engineering business by capturing both existing and new
customers, particularly within the selected market segments. The
Company plans to accomplish this through intensified marketing
efforts, utilising both digital and physical channels, to effectively
reach and engage with the target audience. Additionally,
the Company is committed to continually improving internal
efficiencies by reducing turnaround time and incorporating
new capabilities. With this strategic focus, the Company aims to
establish a streamlined and competitive operational framework.

Manufacturing Business Segments

The watch components represent the primary source of revenue
for the manufacturing business segment of the Company. In 2022,
the Swiss watch market, which serves as the primary destination
for the Company's exports, registered a growth rate of 11.4%
compared to the previous year. Significantly, it achieved a record¬
breaking export figure of 24.8 Billion Swiss francs, the highest
ever recorded. Further, the wristwatches represented over 95%
of the export value and generated 23.7 Billion francs, witnessing
a growth of 11.6% over 2021. The number of items rose to 15.8
Million, registering an increase of 50,000 units than the previous
year, with a growth of 0.3%. Volume growth was split between
the remarkable increase in other material category ( 32.3%) and
the steady decline in steel watches (-7.8%) and those made from
other metals (-18.4%). Quartz watches supported the growth in
volume, with an increase of 3,85,000 units, registering a growth
of 4.1% compared to 2021. Conversely, mechanical watches fell
by 3,35,000 items (-5.3%), but grew in value by 11.5%. With
regard to price segments, the majority of price ranges witnessed
an increase, except for the 200-500 francs range (export price).
While the latter fell by 24%, its value represented less than 3% of
the export turnover, and only accounted for one growth point in
the overall result. Simultaneously, watches priced at less than 200
francs achieved 5.9% growth in value. The trend was comparable,
with a 4.8% surge, for watches priced between 500 and 3,000
francs. In contrast, watches priced above 3,000 francs experienced
a remarkable growth of 15.6%. Alongside, the domestic watch
market remained robust compared to the previous year. All major
domestic customers reported significantly improved performance
and the demand continued to demonstrate strong momentum.
The management's primary focus throughout the year was to
prioritise the fulfilment of customers' requirements by enhancing
the productivity, capacity and capability of the units.

Further to this, the revenue (net sales) of the Company from the
watch components business improved by 38.1% compared to the

previous year's growth. Sales in the domestic market improved by
15.3% during the year, while exports sales of watch components
improved by 48.60% compared to a growth of 42.0% in the
previous year. The growth in exports revenue was also supported
partially by the favourable currency movement in the Swiss franc
and rupee conversion. The growth trend of the watch component
business clearly indicates that the Company is gaining market
share in India and abroad with its consistent track record of high
quality, innovative product range, speed of response and the
strong customer relationship.

Another significant segment of revenue for the Company is derived
from the precision stamping and tooling business. In the current
year, the revenue for this segment experienced a remarkable
improvement of 51.9%, surpassing the growth rate of 34.0%
achieved in the previous year. The revenue from domestic market
improved by 10%, while the revenue from exports improved by
95% (previous year growth rate 106.7%). The increase in exports
during the year, on an already higher base of the previous year,
clearly indicates the strong demand and improvement of market
share in overseas segments.

During the year, direct exports showed continuous improvement,
driven by the addition of new customers and an increase in
business with existing customers. The share of exports within this
business segment increased significantly from 49% in 2021-22 to
63% during the year. Additionally, the Company is also cautiously
reducing its presence in the low margin and lower capability
business segments in the domestic market to boost domestic
revenue generation. It strives to gradually move up the value
chain into preferred segments and customers by re-aligning the
capability and capacity of the manufacturing unit.

The revenue from the ornamental packaging business of the
Company improved by 29.3% compared to the previous year.

Prospects

For the current year, the revenue from the watch components
business is expected to improve by 12-15% compared to 2022¬
23. Additionally, the precision engineering business is expected to
achieve a revenue growth of over 25% by expanding its customer
base and entering new segments and markets.

The Company currently maintains a strong order position and is
expected to sustain its robust performance throughout the year,
assuming that the market situation remains stable and the global
impact of events such as the Russia-Ukraine war, geopolitical
changes, and concerns regarding the re-emergence of Covid-19
pandemic remain limited. Further, the Company believes that the
China-plus-one strategy of the major players is likely to continue,
thus offering it the opportunity to enhance its market share in the
coming quarters.

Furthermore, the Swiss watch market continues to exhibit
moderate growth. The trend of declining volumes in low-priced
watches, which was observed in the past few years, has been
halted. The Company anticipates the market to stabilise at
these levels with marginal improvement. Meanwhile, the higher
price segments of watches continue to experience growth and
demonstrate stronger performance, thus driving the momentum.
The Company strives to maintain its focus on enhancing revenue
by structured marketing efforts including stronger digital presence
to showcase new products and features. The Company's key
operational goals revolve around achieving manufacturing
excellence, with a strong emphasis on world-class delivery
compliance, quality, and turnaround time (TAT).

The Company has established its reputation as a quality supplier
with the ability to meet sophisticated customer needs. By focussing
on the vital levers of operational performance, augmenting
key technical capabilities and showcasing its strength at leading
international trade exhibitions, supported by its aggressive digital
marketing endeavours, the Company is confident in attracting new
customers, sustaining growth, and achieving improved returns.

Retail Business Segment

During 2022-23, the Company's strategic expansion efforts resulted
in the successful opening of six new stores, bringing its total store
count to 54. On an individual basis, its revenue from operations
and other income demonstrated an impressive growth rate of
36.05%, reaching Rs. 80,373.04 Lacs. Similarly, on a consolidated
basis, the Company achieved a growth rate of 36.1%, totaling Rs.
80,309.41 Lacs.

Recognising the increasing significance of online sales and
consumer demand, the Company effectively leveraged its digital
capabilities to cater to its customers. Significantly, 31% of its billings
were generated through online channels, highlighting the growing
comfort among customers to purchase luxury watches online. As
a key player in the luxury and premium segments, Ethos is well-
positioned to capitalise on this evolving trend. Notably, the luxury
and high luxury watch segments provide higher profit margins,
contributing strongly to the Company's overall profitability.

The Company's exceptional performance in 2022-23, driven by its
strategic initiatives and adeptness in the digital realm, places it in
a favourable position for sustained growth and continued success.

Estima AG

During 2022-23, the Company accomplished significant growth,
achieving a revenue of CHF 3,017 K, which reflects a 18% increase
compared to the previous 12-month period ending in March
2022, where revenue amounted to CHF 2,556 K. However, the
Company experienced a rise in operating loss after tax, escalating
from CHF 759 K to CHF 1,809 K. This increase can be attributed to
the substantial surge in person-hours costs due to the Company's

expansion plans, as well as the absence of Government support for
person-hours engagement in the post Covid-19 normalised market
environment.

Nonetheless, the Company remains steadfast in its commitment to
enhancing the team's capabilities and increasing the unit's capacity
to cater to high-end brands. The management considers the
losses incurred during the year as exceptional. Encouragingly, the
Company has secured a favourable order position and has made
progress with esteemed high-end customers for new features. The
Company anticipates a swift and strong recovery, driven by market
demands, the confidence shown by reputable customers, and the
successful implementation of the management's initiatives. These
initiatives include acquiring selective machinery and equipment
to enhance product quality and incorporate complex features,
recruiting competent team members for key roles, and leveraging
technical support and guidance from the parent company.
Collectively, these factors contribute to an optimistic outlook for
the Company's recovery.

The Company's strategy and action plan is on the right track to
revive operations, drive growth, and foster development. There
is a confident outlook that the upcoming quarters will witness
healthy revenue growth and improved profitability.

Pylania AG

The Company experienced a substantial improvement in revenue
due to its diverse business, with figures rising from CHF 2,668 K to
CHF 4,519 K, marking an impressive growth rate of 69% compared
to the previous year. In terms of operating profit, the Company
achieved CHF 510 K, displaying a remarkable growth rate of 85%
when compared to the profit of CHF 276 K recorded in the 2021¬
22 period. Additionally, during the year, the Company extended
additional loans, including subordinate loans, totaling CHF 675 K
to Estima AG.

The management of Pylania remains committed to exploring
opportunities that will enhance revenue and expand the scale of
the business, simultaneously, working closely to monitoring costs
to improve financial position and bolster liquidity. Furthermore,
the Company continued to provide valuable consultancy and
managerial advisory services to its customers.

Satva Jewellery and Design Limited

During the year under review, Hon'ble National Company Law
Tribunal, Chandigarh Bench vide its order dated 23^rd November,
2022 approved the Scheme of Amalgamation of 'Satva Jewellery
and Design Limited' (SJDL), a wholly owned subsidiary Company
with 'KDDL Limited' (KDDL), holding Company. Upon filing the
said order by the Company with the Registrar of Companies and
compliance of other conditions of the Scheme, the same has been
effective on 1^st December, 2022 and has been given effect from

the Appointed Date i.e 1^st April 2019. Accordingly, SJDL stands
dissolved without winding up.

CHANGE IN SUBSIDIARIES

(a) Kamla International Holdings SA (KIH): KIH, a wholly owned
subsidiary of the Company has acquired 3,000 equity shares
(15%) of Pylania, SA (a subsidiary of KDDL Limited) from
its existing shareholder, which resulted in increase of KIH
equity shareholding from 47.5% to 62.5%. Consequently,
Pylania SA has become 100% subsidiary of the Company
(directly and indirectly through its wholly owned subsidiary,
Kamla International Holdings SA). By virtue of the present
acquisition, the holding of the Company in Estima AG has
increased from 95.50% to 100%.

(b) Kamla Tesio Dials Limited (KTDL): 'Kamla International
Holdings SA', 100% subsidiary of the Company has acquired
3,00,000 (30%) equity shares of Rs. 10 each of 'Kamla
Tesio Dials Limited' (KTDL), a subsidiary of the Company.
Consequently, KTDL has become wholly owned subsidiary of
the Company.

DIVIDEND

The Board of Directors has recommended a dividend of Rs. 2
(Rs. Two only) per equity share of Rs. 10/- (Rs. Ten) each fully paid-
up of the Company for the financial year ended on 31^st March, 2023.
Dividend is subject to approval of members at the ensuing Annual
General Meeting and shall be subject to deduction of income tax
at source. The book closure date for the payment of Final Dividend
will be 23^rd September, 2023. The dividend recommended is in
accordance with the Company's Dividend Distribution Policy.

The Dividend Distribution Policy of the Company is available on
the Company's website and can be accessed at: https://www.
kddl.com/wp-content/uploads/PDF/Dividend%20Distribution%20
Policy.pdf

Apart from above, the Board of Directors of the Company, at its
meeting held on 9^th March, 2023, declared Interim Dividend of
Rs. 2 (Rs. Two only) per equity share of Rs. 10/- (Rs. Ten) for each
fully paid-up of the Company. It was paid within the prescribed
timeline.

TRANSFER TO RESERVES

Your Board does not propose to transfer any amount to general
reserve for the period under review.

BUYBACK OF SHARES

The Board of Directors at its meeting held on 18^th January,
2023, approved the proposal of buyback of fully paid-up equity
shares having a face value of Rs. 10/- (Rs. Ten only) each of the

Company at a price not exceeding Rs. 1200/- (Rs. One Thousand
Two Hundred only) per equity share ('Maximum Buyback Price')
and for an aggregate amount not exceeding Rs. 2,100 Lacs (Rs.
Twenty One Hundred Lacs only). ('Maximum Buyback Size'), from
the shareholders of the Company (other than the promoters, the
promoters group and persons in control of the Company) payable
in cash via 'Open Market' route through the Stock Exchange
mechanism in accordance with the provisions of the Securities
and Exchange Board of lndia (Buy-Back of Securities) Regulations,
2018 (as amended) ('Buyback Regulations') and the Companies
Act, 2013 and the rules made thereunder.

The buyback commenced on 25^th January, 2023 and the Company
bought back 1,99,947 equity shares at an average price of Rs.
1,050.28 (Rs. One Thousand and Fifty and Paisa Twenty Eight)
per equity share and deployed an amount of Rs. 20,99,99,526.30
(Rs. Twenty Crores Ninety Nine Lacs Ninety Nine Thousand Five
Hundred Twenty Six and Paise Thirty only) utilising 99.999774%
of the maximum buyback size (excluding transaction costs). The
Buyback Committee of the Company, at its meeting held on 9^th
February, 2023 approved the closure of the buyback with effect
from closing of trading hours on 9^th February, 2023, i.e. before the
expiration of six months from the commencement date.

CHANGE IN CAPITAL STRUCTURE(a) Authorised Share Capital

Consequent to the merger of 'Satva Jewellery and Design
Limited' (SJDL), a wholly owned subsidiary company with
holding Company i.e 'KDDL Limited' (KDDL), authorised
share capital of SJDL amounting to Rs. 3,00,00,000/- (Rs.
three Crores only) divided into 30,00,000 (Thirty Lacs only).
Equity shares of Rs. 10/- each (Rs. Ten only) was merged with
the authorised share capital of KDDL, resulting into increase
of authorised share capital of KDDL from Rs. 25,00,00,000/-
(Rs. twenty five Crores only) divided into 2,50,00,000 (Two
Crores fifty Lacs only) Equity Shares of Rs.10/- each (Rs. Ten
only) to Rs. 28,00,00,000/- (Rs. twenty eight Crores only)
divided into 2,80,00,000 (Two Crores eighty Lacs only) Equity
Shares of Rs.10/- each (Rs. Ten only).

(b) Subscribed and Paid-up Share Capital

Pursuant to buyback of 1,99,947 equity shares of Rs. 10
each, subscribed and paid-up capital of the Company stands
reduced from Rs. 12,73,70,640/-consisting of 1,27,37,064
equity shares of Rs. 10 each to Rs. 12,53,71,170/- consisting
of 1,25,37,117 equity shares of Rs. 10 each. Further, the
Company has not issued shares with differential voting rights.

DEPOSITS

The details of deposits covered under Chapter V of the Companies Act, 2013 ("the act") is given hereunder:

1. Deposits Accepted/ renewed during the year : Rs. 25,45,87,000

2. Deposits outstanding at the end of the year : Rs. 36,43,48,000

3. Deposits remained unpaid or unclaimed as at the end of the year : NIL

4. Whether there has been any default in repayment of deposits or payment of interest thereon during the : NIL

year and if so, number of such cases and the total amount involved

5. The details of deposits which are not in compliance with the requirements of Chapter : NIL

CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the provisions of the Act, Regulation 33 of
the Listing Regulations and applicable Accounting Standards, the
Audited Consolidated Financial Statements (CFS) of the Company
and all the subsidiaries, form a part of this Annual Report for
the financial year 2022-23. In accordance with Section 136 of
the Act, the Audited Financial Statements, including the CFS and
related information of the Company and the separate financial
statements of each of the subsidiary companies, are available on
the Company's website at www.kddl.com

Pursuant to Section 129(3) of the Act, a statement containing
salient features of the Financial Statements of each of the
subsidiaries, associates and JV Companies in the prescribed Form
AOC-1 as Annexure I forms part of the Annual Report.

MATERIAL CHANGES AND COMMITMENTS AFFECTING
FINANCIAL POSITION BETWEEN END OF THE FINANCIAL
YEAR AND DATE OF REPORT

There have been no material changes and commitments for
the likely impact affecting financial position between end of the
financial year and the date of the report. Also, there has been no
change in the nature of business of the Company.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the
regulators or courts or tribunals impacting the going concern
status and Company's operations in future.

PARTICULARS OF LOAN, GUARANTEES AND INVESTMENTS
UNDER SECTION 186

The details of loans, guarantees and investments covered under
the provisions of Section 186 of the Act, are given in the respective
notes to the standalone financial statements of the Company.

RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved
by the Audit Committee and were in accordance with the Policy on

dealing with and materiality of related party transactions and the
related party framework formulated and adopted by the Company.
All contracts/arrangements/transactions entered into by the
Company during the year under review with related parties were
in the ordinary course of business and on arm's length basis in
terms of provisions of the Act. There are no material significant
related party transactions made by the Company with Promoters,
Directors, Key Managerial Personnel or other designated persons
and their relatives which may have a potential conflict with the
interest of the Company at large.

The details of the related party transactions as per Indian
Accounting Standards (IND AS) - 24 are set out in Notes to the
standalone financial statements of the Company. Disclosures of
related party transactions in terms of Regulation 23 of the Listing
Regulations submitted to Stock Exchanges for the half year on a
consolidated basis, in the specified format -are available on the
website of the Company at www.kddl.com.

Form AOC-2 pursuant to Section 134(3)(h) of the Act read with
Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out in
Annexure II to this Report.

BOARD DIVERSITY

The Company recognises and embraces the importance of a
diverse Board in its success. We believe that a truly diverse Board
will leverage differences in thought, perspective, regional and
industry experience, cultural and geographical background, age,
ethnicity, race, gender, knowledge and skills including expertise
in financial, global business, leadership, technology, mergers &
acquisitions, Board service, strategy, sales, marketing and other
domains, which will ensure that KDDL retains its competitive
advantage. The Board Diversity Policy adopted by the Board forms
an integral part of the Nomination & Remuneration Policy and is
available on our website, at https://www.kddl.com/wp-content/
uploads/PDF/Nomination%20&%20Remuneration.pdf

DIRECTORS AND KEY MANAGERIAL PERSONNEL(i) Appointment/Re-appointment of Independent Directors:

The shareholders of the Company at their 42^nd AGM held

on 27^th September, 2022 confirmed the appointment/re-
appointment of the following Directors by way of a Special
Resolution :

(a) Mr. Sanjiv Sachar (DIN: 02013812): Re-appointment of
Mr. Sachar as an Independent Director of the Company
not liable to retire by rotation, for a period of 5 (five)
consecutive years w.e.f 7^th March, 2022 to 6^th March,
2027."

(b) Mr. Nagarajan Subramanian (DIN: 02406548):

Appointment of Mr. Subramanian as an Independent
Director of the Company not liable to retire by rotation,
for a period of 4 (four) consecutive years commencing
w.e.f 28^th July, 2022 to 27^th July, 2026.

(c) Mrs. Neelima Tripathi (DIN: 07588695): Appointment
of Mrs. Tripathi as an Independent Director of the
Company not liable to retire by rotation, for a period of
5 (five) consecutive years commencing w.e.f 28^th July,
2022 to 27^th July, 2027.

(ii) Re-appointment of Mr. Jai Vardhan Saboo (DIN: 00025499) as
Non-Executive Director who retired by rotation at 42^nd Annual
General Meeting and offered himself for reappointment.

(iii) Pursuant to the recommendations of Nomination and
Remuneration Committee and Audit Committee at its
meeting held on 28^th March, 2023, the Board of Directors
of the Company at its meeting held on 28^th March, 2023
subject to the approval of the Shareholders, re-appointed
Mr. Yashovardhan Saboo as Chairman & Managing Director
of the Company for a period of 3 (three) years w.e.f 1^st
April, 2023 upto 31^st March, 2026. The Company has sought
approval from the Shareholders for the said re-appointment
and remuneration of Mr. Saboo by way of Special Resolution
though Postal Ballot Notice separately.

(iv) In accordance with the provisions of Companies Act,
2013, Mr. Sanjeev Kumar Masown (DIN: 03542390) retires
by rotation at the ensuing Annual General Meeting and
being eligible, offers himself for reappointment. Necessary
resolution for the re-appointment of Mr. Masown forms part
of the Notice convening 43¹'¹ Annual General Meeting (AGM).
The Board recommends his re-appointment for the approval
of the members. Details, such as brief resumes, nature of
expertise in specific functional areas, names of companies
in which the above-named directors hold directorships,
committee memberships/ chairpersonships, shareholding in
your Company, etc. are furnished in the Notice of AGM.

(v) The Board of Directors at its meeting held on 12^th August,
2023 appointed Mrs. Anuradha Saboo (DIN : 01812641) as
an Additional Director (Non-Executive) of the Company w.e.f.

12^th August, 2023 who shall hold office upto the date of
ensuing Annual General Meeting of the Company. A separate
resolution seeking approval from the Shareholders, for her
appointment as Non -Executive Director, liable to retire by
rotation has been incorporated in the Notice convening next
Annual General Meeting.

The list of key skills, expertise and core competencies of the
Board of Directors, is provided in the Report on Corporate
Governance forming part of this report.

In the opinion of the Board, all the directors, as well as the
directors proposed to be re-appointed, possess the requisite
qualifications, experience and expertise and hold high
standards of integrity.

During the year under review, the Non-Executive Directors
(NEDs) of the Company had no pecuniary relationship or
transactions with the Company, other than sitting fees
received by them for attending the meetings of the Board of
Directors and Committee thereof and/or interest on deposits
and dividen payment, if any.

Key Managerial Personnel

Mr. Yashovardhan Saboo, Chairman & Managing Director, Mr.
Sanjeev Kumar Masown - Whole time Director cum Chief
Financial Officer and Mr. Brahm Prakash Kumar Company
Secretary, are the Key Managerial Personnel of the Company.
During the year under review, there were no changes to the
Key Managerial Personnel of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 of the Act (including any statutory
modification(s) and/or re-enactment(s) thereof for the time being
in force), the Directors of the Company state that:—

(i) in the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper
explanation relating to material departures;

(ii) the directors had 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 and loss of the
Company for that period;

(iii) the directors had 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;

(iv) the directors had prepared the annual accounts on a going
concern basis; and

(v) 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.

(vi) 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.

DECLARATION FROM DIRECTORS

The Company has, inter alia, received the following declarations
from all the Independent Directors confirming that:

• they meet the criteria of independence as prescribed under
the provisions of the Act, read with the Schedule and Rules
issued thereunder, and the Listing Regulations. There has
been no change in the circumstances affecting their status as
Independent Directors of the Company;

• they have complied with the Code for Independent Directors
prescribed under Schedule IV to the Act; and

• they have registered themselves with the Independent
Director's Database maintained by the Indian Institute of
Corporate Affairs.

None of the Directors of the Company are disqualified for being
appointed as Directors as specified under Section 164(2) of the
Act read with Rule 14(1) of the Companies (Appointment and
Qualification of Directors) Rules, 2014.

BOARD MEETINGS

During the year under review, 9 (nine) meetings of the Board of
Directors were held. The details of the meetings of the Board of
Directors of the Company held and attended by the Directors
during the financial year 2022-23 are given in the Corporate
Governance Report which forms part of this Annual Report.

The maximum interval between any two meetings did not exceed
120 days, as prescribed by the Act and the Listing Regulations.

BOARD COMMITTEES

As on 31^st March, 2023, the Board has 5 (five) Committees: Audit
Committee, Nomination and Remuneration Committee, Corporate
Social Responsibility Committee, Risk Management Committee
and Stakeholders Relationship Committee.

During the year, all recommendations of the Committees of the
Board which were mandatorily required have been accepted by
the Board. A detailed note on the composition of the Board and
its Committees, including its terms of reference is provided in
the Corporate Governance Report. The composition and terms

of reference of all the Committees of the Board of Directors of
the Company are in line with the provisions of the Act and the
Listing Regulations. Details of the committees, along with their
composition, charters and meetings held during the year, are
provided in the 'Corporate Governance Report', forms a part of
this Report.

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013, Listing
Regulations and in accordance with the manner of evaluation, the
Board carried out an annual performance evaluation of its own
performance, board committees and of the directors individually
(including Independent Directors). A separate meeting of the
Independent Directors was convened during the financial year
under review, which, inter alia, reviewed the performance of the
Board as a whole, the non-independent directors and the Chairman
of the Company after taking into account the views of Executive
and Non-executive Directors, assessed the quality, quantity and
timeliness of flow of information between the Management and
the Board of Directors that is necessary for the Board of Directors
to effectively and reasonably perform their duties and expressed
satisfaction over the same.

NOMINATION AND REMUNERATION POLICY

The Company has in place a policy for remuneration, nomination,
selection and appointment of Directors, KMPs and Senior
Management, approved by the Board of Directors. The Policy
broadly lays down the guiding principles, criteria and the basis
for payment of remuneration to the Executive and Non-Executive
Directors, KMPs and Senior Management. The criteria for the
selection of candidates for the above positions cover various
factors and attributes, which are considered by the Nomination
& Remuneration Committee and the Board of Directors while
selecting candidates. The policy details are explained in Corporate
Governance Report which forms part of the Annual Report. The
policy can also be accessed at https://www.kddl.com/wp-content/
uploads/PDF/KDDL_Remuneration_Policies.pdf

FAMILIARISATION PROGRAMME FOR INDEPENDENT
DIRECTORS

All Independent Directors are familiarised with the operations and
functioning of the Company at the time of their appointment and
on an ongoing basis. The details of the training and familiarisation
programme are posted on the website of the Company and can
be accessed at https://www.kddl.com/familiarisation-programme/

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's CSR initiatives and activities towards supporting
projects in the areas environmental sustainability, eradicating
hunger, poverty and malnutrition, promoting education, enhancing
vocational skills and promoting healthcare including preventive
healthcare.

The details of CSR Committee are given in Corporate Governance
Report, which forms a part of this report. The Company's CSR Policy
is available on our website, at https://www.kddl.com/wp-content/
uploads/PDF/KDDL_CSR_Policy.pdf. The Company's CSR Policy
statement and annual report on the CSR activities undertaken
during the financial year ended 31^st March, 2023, in accordance
with Section 135 of the Act and the Companies (Corporate Social
Responsibility Policy) Rules, 2014 ""CSR Rule"") is set out in
Annexure III to this Report.

ESTABLISHMENT OF VIGIL / WHISTLEBLOWER MECHANISM

The Company has established a robust Vigil Mechanism and a
Whistleblower policy in accordance with the provisions of the Act
and the Listing Regulations to deal with instances of fraud and
mismanagement, if any. It also aims to safeguard the confidentiality
and interest of such employees / other persons dealing with the
Company against victimisation who avail the mechanism and
allows direct access to the Chairperson of the Audit Committee
or Managing Director of the Company. During the year, no person
was denied access to the Audit Committee. The Whistleblower
Policy is available on our website, at https://www.kddl.com/wp-
content/uploads/PDF/Whisle%20Blower%20Policy.pdf

RISK MANAGEMENT

Risk management is integral to the Company's strategy and for the
achievement of the long-term goals. Our success as an organisation
depends on our ability to identify and leverage the opportunities
while managing the risks.

During the financial year, the Board of the Directors has
constituted a Risk Management Committee in compliance with the
regulation 21 of the Listing Regulations. The Committee has been

entrusted by the Board with the responsibility of reviewing the risk
management process in the Company and other responsibilities as
per Listing Regulations.

The Board of Directors of the Company on the recommendations of
the Risk Management Committee has updated Risk Management
Policy for the Company including identification therein of elements
of risk, if any, which in the opinion of the Board may threaten the
existence of the Company and which articulates the Company's
approach to address the uncertainties in its endeavour to achieve
its stated and implicit objectives. For more details, please refer 'Risk,
Threats and Concerns' section of the Management Discussion and
Analysis Report, a part of this Report. The Risk Management Policy
is available on our website, at https://www.kddl.com/wp-content/
uploads/PDF/policies/RCM-19-12-2022.pdf

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company is committed to providing a safe and conducive
work environment to all of its employees and associates. In
accordance with the requirements of the Sexual Harassment of
Women at Workplace (Prevention, Prohibition & Redressal) Act,
2013 ("POSH Act") and Rules made thereunder, 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 programmes are conducted throughout the year
to create sensitivity towards ensuring respectable workplace.
During the year under review, the Company has not received
any complaint related to sexual harassment and accordingly, no
complaint was pending as on 31^st March, 2023.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34 of the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a Business Responsibility and Sustainability
Report of the Company is attached as Annexure - IV forming part
of this report.

CORPORATE GOVERNANCE

Our corporate governance practices are a reflection of our value
system encompassing our culture, policies, and relationships
with our stakeholders. Integrity and transparency are key to
our corporate governance practices to ensure that we gain
and retain the trust of our stakeholders at all times. Corporate
governance is about maximising shareholder value legally,
ethically and sustainably. At KDDL, the Board exercises its fiduciary
responsibilities in the widest sense of the term. Our disclosures
seek to attain the best practices in international corporate
governance. We also endeavor to enhance long-term shareholder
value and respect minority rights in all our business decisions.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as prescribed under sub-section (3) (m) of Section
134 of the Act read with Rule 8 of the Companies (Accounts) Rules,
2014 are furnished in Annexure-IV to the Board's Report.

PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as
required under Section 197(12) of the Act, read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are annexed to this report as Annexure V.

In terms of the provisions of Section 197(12) of the Act read
with Rules 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, a statement
showing the names and other particulars of employees is attached
to this report as Annexure VI.

AUDITORS AND AUDITORS' REPORT
Statutory Auditors

S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration
No 301003E/E300005) were appointed as Statutory Auditor of the
Company at 39^th Annual General Meeting (AGM) for a term of five
years to hold office from the conclusion of the 39^th Annual General
Meeting of the Company till the conclusion of the 44^th Annual
General Meeting of the Company.

The report of the Statutory Auditors forms part of Annual Financial
Statements 2022-23 (Standalone and Consolidated). The said
report does not contain any qualification, reservation or adverse
remark. Information referred to in the Auditors' Reports are self¬
explanatory and do not call for any further comments.

Cost Auditor

During the year, the Company maintained cost records of its EIGEN
unit, pertaining to electricals or electronic products and tools in

accordance with the provisions of Section 148 of the act, read
with the Companies (Cost Records and Audits) Rules, 2014. M/s
Khushwinder Kumar & Co., Cost Accountants (FRN.: 100123) the
Cost Auditor of the Company conducted the audit of cost records
of Company's EIGEN unit for financial year commencing from 1^st
April, 2022 to 31^st March, 2023.

The Board of Directors of the Company, on the recommendations
of the Audit Committee has reappointed M/s Khushwinder Kumar
& Co. Cost Accountants (FRN: 100123) as the Cost Auditor of the
committee to conduct the audit of cost records of Company's EIGEN
unit for the financial year 2023-24. As required under the Act read
with the Companies (Cost Records and Audit) Rules, 2014, the
remuneration payable to Cost Auditors must be placed before the
Members at a general meeting for ratification. Hence, a resolution
for the same forms part of the notice of the ensuing AGM.

Secretarial Auditor

The Secretarial Audit Report for the financial year 2022-23 given
by M/s A. Arora & Co., Practicing Company Secretaries (C.P. No.:
993) is attached herewith as Annexure VII. There has been no
qualification, reservation, adverse remark or disclaimer given by
the Secretarial Auditors in their Report. Information referred to in
the Secretarial Auditors' Report are self-explanatory and do not
call for any further comments.

In terms of the provisions of Section 204 of the Act read with
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Board has appointed M/s A. Arora
& Co., Practicing Company Secretaries (C.P. No.: 993), as the
Secretarial Auditor for conducting Secretarial Audit of the Company
for the financial year 2023-24.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Auditors did not report any
matter under Section 143(12) of the Act, therefore, no detail is
required to be disclosed under Section 134(3)(ca) of the Act.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act,
the Annual Return as on 31^st March, 2023 is available on the
website of the Company at https://www.kddl.com .

CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED
UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016
(IBC)

There are no proceedings, initiated by any Financial Creditor or
Operational Creditor or by the Company, under the Insolvency and
Bankruptcy Code, 2016 as amended, before National Company
Law Tribunal or other courts during the year 2022-2023.

INTERNAL FINANCIAL CONTROLS (IFC) AND THEIR ADEQUACY

The Company maintains adequate internal control systems,
policies and procedures for ensuring orderly and efficient conduct
of the business, including adherence to the Company's policies,
safeguard of its assets, prevention and detection of frauds and
errors, accuracy and completeness of the accounting records
and timely preparation of reliable financial disclosures in all areas
of its operations. The services of internal and external auditors
are sought from time to time as well as in-house expertise and
resources. The Company believes that it has sound internal control
systems commensurate with the nature and size of its business.
The Company continuously upgrades these systems in line with
best-in-class practices.

These reports and deviations are regularly discussed internally and
actions are taken, whenever necessary. The Audit Committee of

the Board periodically reviews the adequacy of the internal control
systems.

LISTING OF SHARES

The shares of the Company are listed on BSE Limited and National
Stock Exchange of India Limited and the listing fee for the year
2023-24 has been duly paid.

ACKNOWLEDGEMENTS

The Board of Directors place on record sincere gratitude and
appreciation for all the employees of the Company. Our consistent
growth was made possible by their hard work, solidarity,
cooperation, and dedication during the year. The Board conveys its
appreciation for its customers, shareholders, suppliers as well as
vendors, bankers, business associates, regulatory and government
authorities for their continued support.

For and on behalf of the Board of Directors

Date :- 12^th August, 2023 Yashovardhan Saboo

Place :- Chandigarh Chairman and Managing Director

DIN: 00012158