Equity Analysis

The Board of Directors is delighted to present the 43^rd Annual Report on the business and operations of Pakka Limited ("the Company") along with the summary of standalone and consolidated financial statements for the year ended March 31, 2024.

In compliance with the applicable provisions of the Companies Act, 2013, ("the Act"). the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), this Directors' Report is prepared based on the standalone and consolidated financial statements of the Company for the year under review and also present the key highlights of performance of subsidiaries, joint ventures, and associate companies and their contribution to the overall performance of the Company for the year under review.

1. Financial Results:

Key highlights of consolidated and standalone financial performance for the year ended March 31, 2024, are summarized as under: (h In Lakhs)

Key highlights of consolidated and standalone financial performance for the year ended March 31, 2024, are summarized as under: (h In Lakhs)

2. PERFORMANCE REVIEW

2.1 CONSOLIDATED

The Operative Revenue stood at H40,474.29 lakhs in FY24 compared to H40,830.82 lakhs in FY23 on a consolidated basis. Operative Revenue decreased by 0.87% in comparison to the last financial year. The Consolidated Profit after tax in FY24 was at H4,340.30 lakhs compared to H4,607.60 lakhs in FY23. The consolidated profit after tax decreased by 5.80%.

2.2 STANDALONE

The Operative Revenue stood at H40,474.29 lakhs in FY24 compared to H40,830.82 lakhs in FY23 on a standalone basis. Operative Revenue decreased by 0.87% in comparison to the last financial year. The Standalone Profit after tax in FY23 was at H4,866.93 lakhs compared to H5,146.24 lakhs in FY23. The standalone profit after tax decreased by 5.43%.

2.3 PRODUCTION AND SALES

Your Company has reported following production and sales:

2.4 ANNUAL PERFORMANCE

Details of your Company's annual performance is published on the Company's website and presented during the Investors Conference Call. The same can be accessed under the Investors Meet tab in the Investor Section of the website of the Company: www.pakka.com.

3. DIVIDEND

The Board of Directors in its meeting held on 30^th May, 2024 has decided to retain funds for major capacity expansion both domestically and internationally, hence decided not to recommend any Dividend.

4. TRANSFER TO RESERVES

As per Standalone financials, the net movement in the reserves of the Company for FY24 and FY23 is as follows:- (h in Lakhs)

5. SUBSIDIARIES/JOINT VENTURES/ASSOCIATES

We, along with our subsidiaries, provide manufacturing, consulting, technology, outsourcing and marketing services. We had 3 wholly owned subsidiaries i.e., Pakka Inc, an USA-based Company, Pakka Pte Ltd, a Singapore based subsidiary company and Pakka Impact Limited, an India based subsidiary company.

The Company earlier had 97.50% holding in Pakka Impact Limited. Pakka Impact Limited become wholly owned subsidiary by the resolution passed by the Board of Directors on 21^st October, 2023 by acquiring the balance 50,000 equity shares i.e. 2.50% of total share capital of Pakka Impact Limited. The financial transactions of the said subsidiaries during the year are included in the Consolidated Financial Statements of the Company.

6. CONSOLIDATED FINANCIAL STATEMENTS

According to Section 129(3) of the Act, the consolidated financial statements of the Company and its subsidiaries, joint ventures, and associates are prepared in accordance with the relevant Indian Accounting Standard specified under the Act, and the rules thereunder form part of this Annual Report. A statement containing the salient features of the financial statements of the Company's subsidiaries, joint ventures, and associates in Form No. AOC-1 forming part of this Directors' Report.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements along with other relevant documents, in respect of subsidiaries, are available on the Company's website and can be assessed at https://www.pakka. com/investors. The details of the business of subsidiaries, associates, and joint ventures during FY2024 are given on the website of the Company.

The policy for determining material subsidiaries of the Company has been provided in the following link under tab of Policy of Investor Section on the website of the Company www.pakka.com.

7. SHARE CAPITAL

The authorized share capital of the Company was H6,005 lakhs divided into 5605 lakhs equity shares of H10 each and 4 lakhs preference share capital of H100 each as on 31^st March, 2024.

The paid up Equity Share Capital of the Company as on 31^st March, 2024 was H3916.81 lakhs. The paid-up share capital further increased to H3941.98 lakhs on 27^th June, 2024 on allotment of 2,51,700 Equity Shares of Face Value of

H10/- each of Pakka to 101 Team Members under 'Yash Team Stock Option Plan, 2021'. The paid-up Equity Share Capital of the Company is H3941.98 lakhs on 10^th August, 2024 i.e. the date of Directors' Report.

The Company has not issued shares with differential voting rights, employee stock options and sweat equity shares during the year under review.

The Company has paid Listing Fees for the financial year 2023-24 and 2024-25 to BSE Limited and National Stock Exchange of India Limited, where its equity shares are listed.

8. YASH TEAM STOCK OPTION PLAN - 2021 (TSOP) DISCLOSURE

Your Company has approved Yash Team Stock Option Plan - 2019 (ESOP) in the Board Meeting in the year 2019 i.e., 'Yash Team Stock Option Plan - 2019' and approved by the members of the Company in the 39^th Annual General Meeting held on September 20, 2019 and further modification approved in the 40^th Annual General Meeting held on 31^st October, 2020, which was not implemented.

The Members of the Company in the Extra Ordinary General Meeting held on 6^th May, 2022 approved the new scheme 'Yash Team Stock Option Plan - 2021' ('TSOP'/'Plan'), in supersession of earlier Special Resolution passed by the Members of the Company as aforesaid and authorised the Board (including Compensation Committee) to create, offer, issue, reissue, grant, transfer and allot from time to time, and in one or more tranches, such number of Team (Employee) Stock Options (hereinafter referred to as “Options”), under the YASH TEAM STOCK OPTION PLAN - 2021 ('New TSOP') and to issue fresh options, reissue options that may lapse/ get cancelled/ surrendered in future under the New TSOP, in complete supersession of any earlier team member (employee) stock option plan of the Company and to issue and allot such number of Equity Shares of the Company H10 (Rupees ten only) each not exceeding 20,00,000 (Twenty Lakhs) Equity Shares, representing in the aggregate 5.68 % (approx.) of the issued, paid-up and subscribed share capital of the Company (as on April 01, 2022) at such price or prices, and on such terms and conditions, as may be determined by the Board in accordance with the provisions of New TSOP and in due compliance with the SBEB Regulations and other applicable laws, rules and regulations, to or to the benefit of the eligible team members i.e. employees/ directors of the Company (i.e. Eligible Beneficiaries as defined in the 'New TSOP')

Thereafter, the Nomination and Remuneration Committee (Compensation Committee) of the Board of Directors of the Company (“NRC”) in its meeting held on July 7, 2022 has granted 14,16,600 stock options of the Company to 361 number of the eligible Team members in terms of TSOP at an exercise price of H82.21 (Rupees Eighty-Two and Twenty-One paisa Only) per Share.

Thereafter the Nomination and Remuneration Committee (Compensation Committee) of the Board of Directors of the Company C'NRC”) in its meeting held on 2^nd September 2023 has allotted 10,89,600 equity shares and on 27^th June, 2024 has allotted 2,51,700 equity shares under 'Yash Team Stock Option Plan - 2021'.

The disclosure relating to ESOPs required to be made under the provisions of the Companies Act, 2013 and the rules made thereunder and the Securities and Exchange Board of India (Share Based Employee Benefit and Sweat Equity) Regulations, 2021 ("SBEB Regulations”) is provided on the website of the Company www.pakka.com under Investor Section.

A certificate obtained from the Secretarial Auditors, confirming that the TSOP (ESOP) Schemes of the Company are in compliance with the SBEB Regulations and that the Company has complied with the provisions of the Companies Act, 2013 and the SBEB Regulations is also provided in ‘Annexure - B' forming part of this Directors' Report.

9. HUMAN RESOURCE DEVELOPMENT

Our Team Members are our most important assets. We are committed to hiring and retaining the best talent and being among the industry's leading employers. For this, we focus on promoting a collaborative, transparent and participative organization culture, and rewarding merit and sustained high performance. Our human resources management focuses on allowing our Team Members to develop their skills, grow in their career and navigate their next.

10. CREDIT RATING

The Company has given a mandate to Care Ratings Ltd. to rate its long-term and short-term debts. The Care Ratings Ltd. has issued its credit rating letter on 7^th March, 2024 as details below:

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

There have been no material changes or commitments that have affected the financial position of the Company that between the close of FY 2024 and the date of this report.

12. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COM PANY'S OPERATIONS IN FUTURE

During the year under review, there were no significant and material orders passed by the Regulators / Courts that would impact the going concern status of the Company and its future operations.

13. SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND PAKKA IMPACT LIMITED

In line with the clutter-free business philosophy, the Board of Directors in its meeting held on 27^th March, 2024 has considered and instructed to prepare a scheme of Merger of Pakka Impact Limited (CIN: U74110UP2014PLC062982), a wholly owned subsidiary company into Pakka Limited (CIN: L24231UP1981PLC005294) in terms of the provisions of Section 230-232 of the Companies Act, 2013 and place it before the Audit Committee and Board for their approval. The Board has also considered other related matters with regard to the appointment of Merchant Bankers, Registered Valuers, Lawyers etc.

14. 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.

15. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has comprehensive internal control mechanism and also has in place adequate policies and procedures for the governance of orderly and efficient conduct of its business, including adherence to the Company's

policies, safeguarding its assets, prevention, and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures. The Company's internal control systems are commensurate with the nature of its business, and the size and complexity of its operations and such internal financial controls concerning the Financial Statements are adequate.

Your Company has appointed Thornton Bharat LLP as Internal Auditor of the Company. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen them. The Company has a robust Management Information System, which is an integral part of the control mechanism.

The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken. Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Audit function reports to the Chairman of the Audit Committee.

16. CORPORATE GOVERNANCE

Pursuant to Regulation 34 read with Schedule V of the Listing Regulations, a separate section on the Corporate Governance Report, forms an integral part of the Integrated Annual Report. A certificate from the Practicing Company Secretary confirming compliance with corporate governance norms, as stipulated under the Listing Regulations, is annexed to the Corporate Governance Report.

17. VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company's vigil mechanism allows the directors and employees to report their concerns about unethical behaviour, actual or suspected fraud, or violation of the code of conduct /business ethics as well as to report any instance of leak of Unpublished Price Sensitive Information. The vigil mechanism provides for adequate safeguards against victimization of the Director(s) and employee(s) who avail of this mechanism. No person has been denied access to the Chairman of the Audit Committee.

The Whistle-Blower Policy of the Company can be accessed on the Company's website under Policy tab at the link: https://www.pakka.com/investors.

18. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has adopted zero tolerance for sexual harassment at the workplace and has formulated a policy on prevention, prohibition, and redressal of sexual harassment at the workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. Awareness programs were conducted at various locations of the Company https://www.pakka.com/investors.

The Company has complied with provisions relating to the constitution of Internal Committee (IC) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company have setup ICs to redress complaints on sexual harassment.

During the year under review, no complaint relating to sexual harassment is received and no compliant is pending.

19. RISK MANAGEMENT

Risk management is embedded in your Company's operating framework. Your Company believes that managing risks helps in maximizing returns. The Company's approach to addressing business risks is comprehensive and includes periodic review of such risks and a framework for mitigating controls and reporting mechanism of such risks. The risk management framework is reviewed periodically by the Board and the Audit Committee.

20. SECRETARIAL STANDARDS:

Section 118 of the Act mandates compliance with the Secretarial Standards on board meetings and general meetings issued by The Institute of Company Secretaries of India. During the year under review, the Company has complied with all the applicable Secretarial Standards.

21. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of loans, guarantees, and investments covered under the provisions of Section 186 of the Act have been disclosed in the financial statements.

22. RELATED PARTY TRANSACTION

The Company has a well-defined process of identification of related parties and transactions with related parties, its approval and review process. The Policy on Related Party Transactions as formulated by the Audit Committee and the Board is hosted on the Company's website and can be assessed at under Policy tab at www.pakka.com/investors. As required under Regulation 23 of the Listing Regulations, the Audit Committee has defined the material modification and has been included in the said Policy.

All contracts, arrangements and transactions entered by the Company with related parties during FY 2024 (including any material modification thereof), were in the ordinary course of business and on an arm's length basis and were carried out with prior approval of the Audit Committee. All related party transactions that were approved by the Audit Committee were periodically reported to the Audit Committee. Prior approval of the Audit Committee was obtained periodically for the transactions which were planned and/or repetitive in nature and omnibus approvals were also taken as per the policy laid down for unforeseen transactions.

None of the contracts, arrangements and transactions with related parties, required approval of the Board/ Shareholders under Section 188(1) of the Act and Regulation 23(4) of the Listing Regulations.

None of the transactions with related parties falls under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3) (h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 does not apply to the Company for the FY 2024 and hence the same is not provided. The details of the transactions with related parties during FY 2024 are provided in the accompanying financial statements.

23. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is a strong believer in the Pakka Group philosophy of giving back to the community and acknowledging the role played by communities in the growth of our business. The Company stands for 'For Better Living' which embeds actions towards For Better Communities, For Better Sourcing and For Better Planet.

CSR activities, projects, and programs undertaken by the Company are in accordance with Section 135 of the Act and the rules made thereunder. Such CSR activities exclude activities undertaken in pursuance of its normal course

of business. During the year under review, the CSR initiatives of the Company focused on women education. Such CSR projects undertaken by the Company contribute to Sustainable Development Goals (SDGs).

The Board of Directors of the Company has adopted a Corporate Social Responsibility (CSR) Policy as available under Policy tab of Investors Section on the website www.pakka.com of the Company on the recommendation of CSR Committee and this policy has been amended from time to time to ensure its continued relevance and to align it with the amendments to applicable provisions of law. The Company undertakes CSR activities in accordance with the said Policy.

The Company undertakes majority of CSR through Pakka Foundation (Previously known as K. K. Charitable Foundation). Pakka Foundation works along with the Board and the CSR committee in order to identify and implement CSR initiatives of the Company. Key CSR initiatives of the Company focus on Women Education, Child Development, Water Conservation, Healthcare and Sanitation. During the year under review, the Company has spent H101.57/- Lakhs for its CSR activities during the financial 2023-24.

The disclosures required to be given under section 135 of the Companies Act, 2013 read with Rule 8(1) of the Companies (Corporate Social Responsibility Policy) Rules, 2014 are given in ‘Annexure - C' forming part of this Directors' Report.

The Chief Financial Officer of the Company has certified that CSR funds disbursed for the projects have been utilized for the purposes and in the manner as approved by the Board.

24. BOARD OF DIRECTORS:

The Board of the Company is comprised of eminent persons with proven competence and integrity. Besides the experience, strong financial acumen, strategic astuteness, and leadership qualities, they have a significant degree of commitment towards the Company and devote adequate time to the meetings and preparation.

In terms of the requirement of the Listing Regulations, the Board has identified core skills, expertise, and competencies of the Directors in the context of the Company's businesses for effective functioning. The list of key skills, expertise and core competencies of the Board of Directors is detailed in the Corporate Governance Report.

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

Criteria for determining qualification, positive attributes and independence of a director is given in the NRC Policy, which can be accessed on Company's website under Policy tab at https://www.pakka.com/investors.

25. BOARD GOVERNANCE

The Nomination and Remuneration Committee (“NRC”) of the Board is entrusted with the responsibility for developing competency requirements for the Board, based on the industry and strategy of the Company. The Board composition analysis reflects an in-depth understanding of the Company, including its strategies, environment, operations, financial condition, and compliance requirements.

26. CHANGES IN DIRECTORS

Appointment / Re-appointment of Directors during FY 2023-24

The Members of the Company at 43^rd Annual General Meeting held on 29^th September, 2023, approved the re-appointment of Mr. Jagdeep Hira (DIN - 07639849) as Managing Director of the Company with effect from 21^st July, 2023 for a period of 5 years.

Further at the 43^rd Annual General Meeting of the Company held on 29^th September, 2023, the Members approved the re-appointment of Mrs. Kimberly Ann McArthur (DIN: 05206436) who retired by rotation and being eligible for appointment has been reappointed as Non-Executive Director of the Company.

Mr. Shubham Ashok Tibrewal (DIN: 10274024) was appointed as an Additional Director (Independent) in the Board Meeting held on 12^th August, 2023 and regularized as an Independent Director in the Annual General Meeting held on 29^th September, 2023.

Mr. Rahul Krantikumar Dharmadhikary (DIN: 02116207) was appointed as an Additional Director (Independent) in the Board Meeting held on 5^th September, 2023 and regularized as an Independent Director in the Annual General Meeting held on 29^th September, 2023.

Further, Mr. Gautam Ghosh (DIN: 10371300) was appointed as an Additional Director (Executive Director) of the Company in the Board Meeting held on 24^th

November, 2023 and regularized as a Director (Executive & Non-Independent) of the Company in the Extra-Ordinary General Meeting held on 22^nd February, 2024.

Re-appointment of Directors retiring by rotation

In terms of the provisions of the Companies Act, 2013 and the Company's Articles of Association, Mr. Jagdeep Hira (DIN: 07639849), Managing Director and Mrs. Manjula Jhunjhunwala (DIN: 00192901), Non-Independent Director (Promoter) of the Company, retires by rotation is eligible for re-appointment. Members' approval is being sought at the ensuing AGM for their re-appointment.

The profile along with other details of Mr. Jagdeep Hira and Mrs. Manjula Jhunjhunwala are provided in the annexure to the Notice of the Annual General Meeting.

Pecuniary relationship or transactions with the Company

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission, and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/ Committee(s) of the Company.

Independent Directors

Mr. Pradeep Vasant Dhobale, Mr. Basant Kumar Khaitan, Mr. Alok Ranjan, Mr. Rahul Krantikumar Dharmadhikary, Mr. Shubham Ashok Tibrewal and Mrs. Anna Kay Warrington are Independent Directors on the Board.

All the Independent Directors of the Company have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1) (b) of the Listing Regulations and they continue to comply with the Code of Conduct laid down under Schedule IV of the Act. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation that exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Directors have further confirmed that they are not debarred from holding the office of the director under any SEBI order or any other such authority.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board

is satisfied with the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors on the Board. Further, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have included their names in the data bank of Independent Directors and complied with the requirements of passing proficiency test, as applicable.

27. DECALARATION OF INDEPENDENCE

The Company has received Declarations of Independence as stipulated under section 149(7) of the Companies Act, 2013 and Regulation 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from Independent Directors confirming that he/she is not disqualified from being appointed/re- appointed/ continue as an Independent Director as per the criteria laid down in section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The same are also displayed on the website of the Company www.pakka.com under Investor Section.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Companies Act, 2013.The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs (IICA). In terms of section 150 of the Companies Act, 2013 read with Rule 6(4) of the Companies (Appointment and Qualification of Directors) Rules, 2014, all Independent Directors are exempted from undertaking the online proficiency self-assessment test conducted by IICA.

28. KEY MANAGERIAL PERSONNEL

As on 31^st March, 2024, the following are Key Managerial Personnel ("KMPs”) of the Company as per Sections 2(51) and 203 of the Act:

a) Mr. Jagdeep Hira, Managing Director,

b) Mr. Gautam Ghosh, Executive Director & Occupier,

c) Mrs. Neetika Suryawanshi, Chief Financial Officer,

d) Mr. Sachin Kumar Srivastava, Company Secretary & Legal Head,

Mr. Gautam Ghosh (DIN: 10371300) was appointed as an Additional Director (Executive Director) of the Company in the Board Meeting held

on 24^th November, 2023 and regularized as a Director (Executive & NonIndependent) of the Company in the Extra-Ordinary General Meeting held on 22^nd February, 2024.

29. BOARD AND COMMITTEES OF THE BOARD

Board Meetings

The Board meets at regular intervals to discuss and decide on the Company's/ business policy and strategy apart from other Board business. The Board exhibits strong operational oversight with regular presentations in quarterly meetings. The Board/Committee meetings are pre-scheduled, and a tentative annual calendar of the Board and Committee meetings is circulated to the Directors well in advance to help them plan their schedule and ensure meaningful participation in the meetings. Only in case of special and urgent business, if the need arises, the Board's or Committee's approval is taken by passing resolutions through circulation or by calling the Board / Committee meetings at a shorter notice, in accordance with the applicable law.

The agenda for the Board and Committee meetings includes detailed notes on the items to be discussed to enable the Directors to make an informed decision.

The Board of Directors held 8 (eight) meetings during FY 2023-24, details thereof have been provided in the Corporate Governance Report. The intervening gap between the meetings was not more than 120 days as required under the Act and the Listing Regulations.

Committees of the Board

As required under the Act and the Listing Regulations, the Company has constituted the following statutory committees:

? Audit Committee

? Nomination and Remuneration Committee

? Corporate Social Responsibility Committee

? Stakeholders Relationship Committee

Details of all the Committees such as terms of reference, composition, and meetings held during the year under review are disclosed in the Corporate Governance Report, a part of this Annual Report.

In addition to the above, the Board has formed a Banking & Finance Committee to review specific financial & business operational matters and other items that the Board may decide to delegate.

The Board, from time to time, based on necessity, has delegated certain operational power to committees of directors formed for specific purposes like investment, matters relating to Banking etc.

30. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Board of Directors carried out an annual evaluation of its own performance, Board Committees, and Individual Directors in accordance with the Act, Listing Regulations, and Governance Guidelines. The Nomination and Remuneration Committee led an internal evaluation process to assess the performance of the Board, its committees, and individual directors.

The performance of Individual Directors was reviewed by the Board and the NRC, with criteria such as preparedness, constructive contributions, and input in meetings. Non-I ndependent Directors, the Board as a whole, and the Chairman of the Company were evaluated at a separate meeting of Independent Directors. The evaluation results were discussed at the Board meeting, where an action plan was agreed upon.

The Company also acted on feedback received from the previous year's evaluation process. For more details on the Board Evaluation Process, please refer the “Board Evaluation” section of the Corporate Governance Report.

31. POLICY ON BOARD DIVERSITY AND DIRECTOR ATTRIBUTES AND REMUNERATION POLICY FOR SENIOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In terms of the provisions of Section 178(3) of the Act and Regulation 19 read with Part D of Schedule II to the Listing Regulations, the Nomination and Remuneration Committee is responsible for determining qualification, positive attributes and independence of a Director. The Nomination and Remuneration Committee is also responsible for recommending to the Board, a policy relating to the remuneration of the Directors, KMP and other employees.

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way of sitting fees and commission), Key

Managerial Personnel, Senior Management and other employees. The policy also provides the criteria for determining qualifications, positive attributes and Independence of Director and criteria for appointment of Key Managerial Personnel / Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors while making selection of the candidates. The above policy has been posted on the website of the Company under Policy Tab of Investor Section at www.pakka.com.

32. CODE OF CONDUCT

The Company has adopted a Code of Conduct for its employees including the Managing Director. In addition, the Company has adopted a Code of Conduct for its Non-Executive Directors which includes the Code of Conduct for Independent Directors which suitably incorporates the duties of Independent Directors as laid down in the Act. The same can be accessed in Policy Tab of Investor Section at www.pakka.com. All Senior Management personnel have affirmed compliance with the Code of Conduct of the Company. The Managing Director has also confirmed and certified the same. The certification is enclosed as ‘Annexure - I' at the end of the Report on Corporate Governance.

33. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the Listing Regulations, a separate section on Management Discussion and Analysis Report which also covers the consolidated operations reflecting the global nature of our business forms an integral part of the Integrated Annual Report.

34. DIRECTORS' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, and secretarial auditors including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by the management and the relevant Board Committees including the Audit Committee, the Board is of the opinion that the Company's internal financial controls were adequate and operating effectively during the FY2024.

Pursuant to Section 134 (5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that for the financial year ended 31^st March, 2024:

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

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

iii. They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

iv. They have prepared the annual accounts on a 'going concern basis':

v. They have laid down internal financial controls for the Company which are adequate and are operating effectively;

vi. They have devised a proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and are operating effectively.

35. AUDITORS

35.1 STATUTORY AUDITORS AND AUDITORS' REPORT

Based on the recommendation of the Audit Committee and the Board of Directors, Members of the Company at the 42^nd Annual General Meeting held on 30^th October, 2022, appointed CNK & Associates LLP, Chartered Accountants (ICAI Firm Registration Number 101961W/W-100036) as the Statutory Auditors for the second term of 5 (five) years commencing from the conclusion of the 42^nd Annual General Meeting until the conclusion of the 47^th Annual General Meeting to be held in the year 2027. The Members also approved the remuneration payable to CNK & Associates LLP and authorized the Board to finalize the terms and conditions of re- appointment, including remuneration of the Statutory Auditor for the remaining period, based on the recommendation of the Audit Committee.

The Statutory Auditors' Report does not contain any qualifications, reservations, adverse remarks or disclaimers.

Statutory Auditors of the Company have not reported any fraud as specified under Section 143(12) of the Act, in the year under review.

35.2SEC RETARIAL AUDITORS AND AUDITORS' REPORT

According to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Amit Gupta, Company Secretary in Practice (FCS No. F5478, Certificate of Practice No. 4682), to carry out the Secretarial Audit of the Company.

The Report of the Secretarial Auditor for FY 2023-24 is attached herewith as Annexure D forming part of this Directors' Report. There are no qualifications, observations or adverse remarks or disclaimers in the said report.

The Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimers.

35.3INTERNAL AUDITORS

The Board of Directors of the Company in its meeting held on 29^th April, 2023 has appointed Mahajan & Aibra, Chartered Accountants, Mumbai of the Company as Internal Auditor of the Company for conducting the Internal Audit for the financial year ended 31^st March, 2024.

The Board of Directors in its meeting held on 30^th May, 2024 has appointed Grant Thornton Bharat LLP as Internal Auditor of the Company for the financial year ending on 31^st March, 2025.

35.4COST AUDITORS

As per the requirements of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, your Company is not required to appoint cost auditors and maintain cost records.

36. REPORTING OF FRAUDS

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 Act and Rules framed thereunder.

37. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on the conservation of energy, technology absorption, and foreign exchange earnings and outgo according to Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure E attached to this report.

38. EXTRACT OF ANNUAL RETURN

Pursuant to Section 134(3)(a) of the Act, the Annual Return of the Company prepared as per Section 92(3) of the Act for the financial year ended 31^st March, 2024, is available on the Company's website and can be accessed under Annual Return Tab at https://www.pakka.com/investors. In terms of Rules 11 and 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return shall be filed with the Registrar of Companies, with prescribed timelines.

39. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is as follows:

i. The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Company Secretary during the financial year 2023-24, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2023-24 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

*The remuneration are not compareble due to resigned/ worked for part of the financial year only.

i. The median remuneration of employees of the Company during the FY24 was H5,12,761/- in comparison to H4,52,921/- during the FY23.

ii. In the financial year, there was an increase of 13.21% in the median remuneration of employees;

v. There were 508 permanent employees on the rolls of the Company during the FY24 In comparison to 464 permanent employees on the rolls of the Company during FY23.

v. Average percentage increase made in the salaries of employees other than the managerial personnel in FY24 was 25.77 % whereas the increase in the managerial remuneration for the same financial year was 40.16%. The figures for managerial remuneration are not comparable to last year due to appointment/changes made in managerial person during the said period.

vi. The key parameters for the variable component of remuneration availed by the directors are considered by the Board of Directors based on the recommendations of the Human Resources, Schedule V of the Companies Act, 2013, Nomination and Remuneration Committee as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees; and

vii. It is hereby affirmed that the remuneration paid is as per the as per the Schedule V of the Companies Act, 2013, Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

viii. Except Mr. Jagdeep Hira, Managing Director of the Company, no other employee was employed throughout the financial year at an aggregate salary of H1,02,00,000/- per annum.

ix. Except, Mr. Jagdeep Hira, Managing Director, no other employee was employed for a part of the financial year at an aggregate salary of H8,50,000/- per month.

xi. No employee of the Company receives remuneration for part of the financial year more than the amount drawn by the Managing Director. No one was employed throughout the financial year or part thereof receiving remuneration more than the amount drawn by the Managing Director.

40. COMPANIES WHICH CEASED TO BE HOLDING, SUBSIDIARY OR ASSOCIATE COMPANY

During the year under review, no company ceased to be holding, subsidiary or associate company of the Company.

41. INVESTOR EDUCATION AND PROTECTION FUND

During the year, the Company was not required to transfer any amount and shares to Investor Education and Protection Fund (“IEPF”).

42. INDUSTRIAL RELATIONS

During the year under review, industrial relations remained harmonious at all our offices and establishments.

43. CAUTIONARY STATEMENT

Statements in this Directors' Report and Management Discussion and Analysis Report describing the Company's objectives, projections, estimates,

expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company's operations include raw material availability and its prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factor.

44. ACKNOWLEDGEMENTS

The Directors wish to convey their deep appreciation to all the employees, customers, vendors, investors, and consultants/advisors of the Company for their sincere and dedicated services as well as their collective contribution to the Company's performance.

The Directors thank the Government of India, Governments of various States in India, Governments of various Countries, and concerned Government departments for their co-operation.

The Directors appreciate and value the contribution made by every member, employee, and their family of the Pakka Group.