Equity Analysis

2. Subsidiary and Joint Venture details with consolidated financial statement

Your Company has one 100% wholly owned subsidiary, Avant-Garde Infosystems Inc., in the USA, and Two Joint Ventures (KERNEX TCAS JV& VRRC-KERNEX-CE-RVR-JV). There were no associate companies as of 31stMarch 2024. There has been no change in the business activities of the subsidiary and the Joint Ventures during the year under review.

In accordance with Section 129(3) of the Companies Act, 2013, the Company has prepared consolidated financial statements, including the financials of the Company, the subsidiary, and the Joint Venture, in the same form and manner as its own, in compliance with the Accounting Standards and the listing regulations of the stock exchanges. These consolidated financial statements are formingpart of the Annual Report and will be laid before the Annual General Meeting.

A report containing detailed information about the subsidiary is annexed to this report as Annexure A.

Companies which have become or ceased to be subsidiaries, associates and joint ventures

During the period under review, no company has become or ceased to be a subsidiary, associate, or joint venture of the Company.

3. Amount, if any, which the Board proposes to carry to any reserves

The Directors of the Company have not proposed to transfer any amount to reserves for the year under review.

4. Dividends

Due to the absence of distributable profits, the Directors of the Company have not declared any dividend for the financial year.

5. State of Company's Affairs

Your Company recorded a turnover of Rs.2,131.49 Lakhs for the financial year 2023-24. The Company has reported a loss before tax of Rs.2,049.21 Lakhs, compared to a loss of Rs.1,938.07 Lakhs in the previous financial year.

South Central Railways

The South Central Railway (SCR) project is now in its final stages, representing a significant milestone in its overall completion. Kernex Microsystems, the company tasked with executing this project, has been working diligently to ensure that every aspect meets the stringent standards set by the railway authorities. This progress highlights Kernex Microsystems' commitment to delivering high-quality results, reinforcing its reputation in the railway infrastructure sector. The project's nearing completion underscores the collaborative efforts and technical expertise involved, promising to enhance the region's railway network upon its conclusion.

The Independent Safety Assessment (ISA) is currently in its final stage, with the report anticipated to be released shortly. This assessment is a crucial step in ensuring that all safety standards and regulations are thoroughly met before the project's completion. The forthcoming report will provide important insights and validations, helping to confirm the project's readiness and compliance with the required safety protocols.

NCR A,B & ICF Projets :

Kernex Microsystems and KEC International have formed a consortium and successfully secured two significant contracts with a combined value of approximately Rs.536 crores. These orders pertain to the North Central Railway section, covering a total distance of 1,500 kilometers. This collaboration marks a substantial achievement for both companies, highlighting their capabilities in the railway infrastructure sector.

Project 1 NCR A (Section between ChipyanaBuzurg (Excl) Kanpur (Excl) in the North Central Railway)

The first milestone of the project was completed successfully. The Drone & RSSI Survey data, manual survey data, Station layouts were submitted. The construction of towers & buildings related to Milestone 2 was complete. The laying of RFID tags, Station commissioning & loco installations & commissioning for Milestone 2 is in progress

The procurement of materials for three Milestones was complete and the orders were placed for the final milestone

Agreements with Electronic Interface OEM's was finalized and successfully executed for the Milestone 1. Work in progress for other milestones

The phase wise ISA activity was initiated

Project 2 NCR A (Section between Kanpur (Incl) DDU (Excl) in the North Central Railway)

The first milestone of the project was completed successfully. The Drone & RSSI Survey data, manual survey data, Station layouts were submitted. The construction of towers & buildings related to Milestone 2 was complete. The laying of RFID tags, Station commissioning & loco installations & commissioning for Milestone 2 is in progress

The procurement of material for three Milestones was complete and the orders were placed for the final milestone

Agreements with Electronic Interface OEM's was finalized and successfully executed for the Milestone 1. Work in progress for other milestones

The phase wise ISA activity was initiated

Project 3 ICF(Integral Coach Factory, Chennai)

The project plan & material planning for the delivery of 39 no's were prepared and submitted

The drawings were approved by the ICF

Material procurement is complete and all the units (39 no's) were delivered

Procurement of material for the enhanced qty of 12 no's is in progress

Project Overview:

Total Gates Supplied: 136

Total Gates Installed and Commissioned: 124

Final Handover Status: In Progress

Material Supply and Adjustments:

100% Material Supply Completed.

The project was mutually agreed to be shortened from 136 Lx gates to 124 Lx gates.

2 Lx gates were repaired and rebuilt.

Remaining material related to the 10 Lx gates that were not installed is currently being handed over to ENR. So far, 102 wheel sensors have been handed over.

Warranty Maintenance:

Warranty maintenance for three groups (totaling 102 Lx gates) has been completed.

Warranty maintenance for the fourth group (22 Lx gates) has also been completed.

Final Handover (FHO):

FHO of Lx sites is ongoing.

FHO has been completed for 47 out of 85 Lx sites that are currently operational.

ENR has dismantled and removed 39 Lx sites out of the 124 Lx gates that were commissioned.

Remaining Deliverables:

100 Booms are to be delivered to ENR for use as spares.

SRI LANKA RAILWAYS

Kernex Microsystems faced significant challenges in executing its order from Sri Lanka Railways during the 2021-22 periods. The order involved the supply, installation, testing, commissioning, and maintenance of 200 Bell and Light Level Crossing Protection Systems, a critical project aimed at enhancing railway safety in Sri Lanka. However, due to a combination of unforeseen circumstances, the execution of this order was delayed.

Kernex Microsystems has been closely monitoring and evaluating the ongoing conditions surrounding its involvement in a specific project. Over time, the company identified a significant "country risk," which typically encompasses economic, political, and social risks associated with operating in that particular country. These risks have the potential to undermine the stability, profitability, and long-term viability of the project, prompting Kernex to reconsider its continued involvement.

Kernex determined that the potential benefits of continuing the project were outweighed by the potential for adverse outcomes, leading to the decision to withdraw.

Rather than abruptly withdrawing from the project, which could have led to financial losses, reputational damage, or legal disputes, Kernex opted for a more strategic approach. The company sought to disengage through a "conciliated dialogue with SLR". This method involved engaging in discussions with SLR to reach a mutual agreement on the terms of the exit.

The decision to pursue a conciliated dialogue was rooted in Kernex's desire to maintain a professional and cooperative relationship with SLR. By approaching SLR for a mutual agreement, Kernex's strategic approach to exiting the project was successful, as SLR accepted the terms of the mutual agreement. Importantly, the exit was achieved without any financial implications for Kernex. Kernex Microsystems' strategic decision to exit the project due to significant country risks was a prudent move that prioritized the company's long-term stability and financial health. By engaging in a conciliated dialogue with SLR and reaching a mutual agreement, Kernex successfully navigated the complexities of the situation without incurring financial losses. This approach not only safeguarded Kernex's interests but also preserved its relationship with SLR, potentially opening doors for future opportunities.

6. Change in Nature of business

Your Company primarily operates in the business of manufacturing safety systems for railways. During the period under review, there has been no change in the business activities of the Company.

7. Material changes and commitments, if any, affecting the financial position of the company, having occurred since the end of the Year and till the date of the Report

There have been no material changes or commitments affecting the financial position of your Company that occurred between the end of the financial year to which the financial statements relate and the date of this Report.

8. Details of revision of financial statement or the Report

During the period under review, there was no revision of the financial statement or the Report.

9. Share Capital

As Members are aware, the Company obtained approval to issue 13,00,000 convertible warrants on a preferential basis to non-promoters at a price of Rs.403/- per warrant. These warrants were convertible into an equivalent number of equity shares of Rs.10/- each. Accordingly, the Company issued and allotted 13,00,000 warrants on 20th October 2023, which were subsequently converted into equity shares. As a result of this conversion, the issued, subscribed, and paid-up capital of the Company increased from Rs.15,45,94,220/- to Rs.16,75,94,220/-.

During the period under review, the Company did not issue any equity shares with differential rights.

During the period under review, the Company did not issue any sweat equity shares.

Details of Employee Stock Options

During the period under review, the Company did not issue any stock options to its employees. However, the Board of Directors has approved a scheme related to the Employee Stock Options Scheme (ESOS). After closure of the financial year 2023-24, the Company obtained approval from the shareholders. The company is yet to make application with the stock exchanges.

10. Transfer of unclaimed dividend

There is no unclaimed dividend requiring transfer to the Investor Education and Protection Fund (IEPF).

11. Directors and Key Managerial Personnel

During the year under review, Members are aware that Mr. Sunny Sharma resigned as the Chief Financial Officer of the Company on 20th October 2023. Subsequently, Mr. Srikanth P was appointed as the Chief Financial Officer of the Company on 25th October 2023.

During the year under review, the Company made key appointments to its senior management team:

1. Chief Technology Officer (CTO): Mr. B. Vishnu Varma was appointed as the Chief Technology Officer (CTO) of the Company, effective from 15th May 2023. In his role as CTO, Mr. Vishnu Varma is responsible for overseeing the Company's technological development, innovation, and strategic IT initiatives.

2. Chief Operating Officer (COO): Mr. E.B. Rao was appointed as the Chief Operating Officer (COO) of the Company, effective from 5th September 2023. As COO, Mr. Rao will be in charge of managing the day-to-day operations of the Company, ensuring operational efficiency, and implementing the strategic business objectives set by the Board.

These appointments are part of the Company's ef forts to strengthen its leadership team and drive strategic goals forward.

Further, at its meeting held on 13th August 2023, and as recommended by the Nomination and Remuneration Committee, the Board re-appointed Mr. M.B. Narayana Raju and Mr. M. Sitarama Raju as Whole-Time Directors for a further period of three years, effective from 2nd September 2023. This reappointment was subsequently approved by the shareholders at the Thirty-First Annual General Meeting held on 30th September 2023.

Further, in accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Narender Kumar and Dr. Anji Raju Manthena, Directors of the Company, retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-appointment.

Furthermore, Mr. Adabala Seshagiri Rao and Mr. Ayyagari Viswanadha Sarma appointed as an Additional Directors under Independent category of the company on 6th September 2024. The necessary resolutions for appointing them as Directors are set out in the notice convening 32nd Annual General Meeting.

Further also, the nomination and remuneration committee and board of Directors had recommended to the members for the appointment of Mr. Pasupuleti Dinakara Rao as an Independent Director.

The brief profiles of the Directors who are to be appointed or re-appointed and necessary resolutions have been included in the notice convening the Annual General Meeting (AGM)..

12. Declaration by Independent Directors

All the Independent Directors have submitted their disclosures to the Board confirming that they fulfill the requirements stipulated in Section 149(6) of the Companies Act, 2013, to qualify as Independent Directors under the provisions of the Companies Act, 2013, and the rules framed there under. In accordance with Section 150 of the Act, read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, the Independent Directors of the Company have enrolled their names in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs. Additionally, these Directors have successfully completed the test conducted by the Indian Institute of Corporate Affairs.

13. Meetings

During the year, nine meetings of the Board of Directors were held, as detailed in the attached Report on Corporate Governance. The intervening gap between any two meetings was within the prescribed period as stipulated by the applicable regulations.

The number and dates of meetings held by the Board and its Committees, the attendance of Directors, and details of remuneration paid to them are provided separately in the Corporate Governance Report, in accordance with Section 134(3)(b) of the Companies Act, 2013.

None of the Directors are disqualified under Section 164(2) of the Companies Act, 2013. A certificate confirming non-disqualification of Directors, as required under Regulation 34 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is annexed to this Annual Report.

14. Committees of the Board

The Board of Directors has the following Committees: a. Audit Committee b. Nomination and Remuneration Committee c. Stakeholders' Relationship Committee d. Risk Management Committee e. Corporate Social Responsibility Committee

Details of these Committees, including their composition, number of meetings held, and attendance at the meetings, are provided in the Corporate Governance section of this Report.

15. Nomination and Remuneration Policy of Directors, Key Managerial Personnel and other Employees

In accordance with Section 178(1) of the Companies Act, 2013, the Board, on the recommendation of the Nomination and Remuneration Committee, has approved the criteria and policy for the selection and appointment of Directors, Key Managerial Personnel (KMPs), and their remuneration. The Remuneration Policy is detailed in the Report on Corporate Governance.

16. Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board has conducted an annual performance evaluation of its own members, including the Chairman of the Board, individual Directors, as well as the Audit Committee, Nomination and Remuneration Committee, and other Committees. The evaluation was based on various factors such as attendance, contribution, independence of judgment, and preparedness for meetings.

17. Particulars Relating to Remuneration of Directors/Key Managerial Personnel and Employees.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided separately and annexed as Annexure B to this Report.

In accordance with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company does not have any employees who were employed throughout the financial year and received remuneration of Rs.1.02 Crores or more, nor does it have employees employed for part of the year who received Rs.8.50 Lakhs or more per month.

Furthermore, the Company does not have any employee who, during the financial year under review, received remuneration which, in aggregate or at a rate in excess of that drawn by the Managing Director or Whole-Time Director, and holds, either individually or along with his spouse and dependent children, not less than 2% of the equity shares of the Company.

Remuneration received by Managing/Whole time Director from holding or subsidiary company

The Whole-Time Directors have not received any remuneration from the subsidiary company. Details regarding this are provided in the Report on Corporate Governance.

18. Directors' Responsibility Statement

The Directors, to the best of their knowledge and belief, hereby state and confirm that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed, with proper explanations provided for material departures.

b) The Directors have selected appropriate accounting policies and applied them consistently. They have made reasonable and prudent judgments and estimates to provide a true and fair view of the Company's financial position at the end of the financial year and the loss incurred during that period.

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

d) The annual accounts have been prepared on a going concern basis.

e) Internal financial controls have been established and are adequate, and such controls are operating effectively.

f) Proper systems have been devised to ensure compliance with all applicable laws, and these systems are adequate and operating effectively.

19. Internal Financial Controls

The Company has established policies and procedures to ensure the orderly and efficient conduct of its business. These measures include adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The adequacy of internal controls is reviewed by an independent Audit Committee of the Board.

20. Auditors

Statutory Auditors

In terms of Section 139, 141 and 142 of the Companies Act, 2013 ("the Act"), and the Companies (Audit and Auditors) Rules, 2014 made thereunder, members of the Company have re-appointed M/s. P R S V

& Co LLP, Chartered Accountants (FRN: S200016) as Statutory Auditors of the Company to hold office for a period of 5years from conclusion of the 30th Annual General Meeting of the Company.

M/s. P R S V & Co LLP, Chartered Accountants, Hyderabad, have confirmed that they are eligible to conduct and within the prescribed limits under Section 141 of the Companies Act, 2013.

The financial statements have been audited by M/s. P R S V & Co LLP, Chartered Accountants, the Statutory Auditors of the Company. The following qualifications/comments have been made by the Auditors:-

Comments/Qualificationsreported by the Auditor.

(a) The Company has a 100% subsidiary namely Avant Garde International Inc in USA which is presently supporting the business of the company by identifying the sources, negotiating for and procuring electronic components from outside India. The subsidiary in the past, was involved in the trading of goods.

As per the latest unaudited financials of the subsidiary available as on 31-03-2024, the net worth of the subsidiary has eroded substantially to an extent of USD 1.917 million against an investment of USD 1.821 million, the equivalent Indian Rupees being 1450.81 lakhs per prevailing exchange rate. As a result the carrying amount of the investment by the Company in the equity of subsidiary at Rs. 1275.97 lakhs (at Cost) (Note 4) stands impaired fully. Ind AS 36, requires the company to provide for impairment in the value of investments which are accounted at Cost by providing for the amount of impairment in the Profit & Loss Account.

(b) The Company besides making an investment of Rs. 8 lakhs in TCAS JV a joint venture partnership formed to execute a railway safety project, in which the Company has 80% share in the profits and losses; has further exposure by way of long term advances of Rs. 489.70 lakhs and a trade receivable of Rs. 97.54 lakhs (ECL provided of Rs. 8.53 lakhs). The TCAS JV has accumulated losses Rs. 216. 23 lakhs as on 31-03-2024 and the share of Company in these losses works to Rs. 172.99 lakhs. In our view, the company is required to make a provision for impairment loss towards its investment, loan and trade receivables to the tune of Rs. 164.46 lakhs to account for the share of accumulated losses in the Joint venture in its stand-alone financial statements.

Since the Company has not impaired the, the advance granted to joint venture and trade receivable to an extent of Rs 164.46 lakhs in its books, the Loss for the year and other Comprehensive Income are understated by the said amount. The Other Equity in the balance sheet is overstated by Rs. 164.46 lakhs. Our conclusion on the statement is qualified in respect of the above matters.

Reply to the Comments made in the Statutory Auditors' Report

a) The management of the Company believes that the 100% subsidiary, Avant-Garde Infosystems Inc. (AGI), being a cost center, contributes to procurement efficiency and, therefore, its impairment cannot be assessed independently of the parent company. According to IND AS-36, impairment can be evaluated by comparing the carrying amount of the net assets with the market capitalization of the company. In this context, the Company's market capitalization is significantly higher than the carrying amount of its net assets, indicating that no impairment is required.

b) Regarding the losses incurred in the TCAS Joint Venture, the management is confident that these losses are temporary. The ongoing projects within the Joint Venture are expected to eventually result in a net profit.

In accordance with Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. D. S. Rao, Practicing Company Secretary, to conduct the Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report is annexed as Annexure C to this report.

Reply to the Comments made in the Secretarial Auditors' Report

1. In accordance with SEBI Circular No. Cir/ISD/3/2011, the entire shareholding of Promoters/Persons Acting in Concert (PACs) has not been dematerialized. Consequently, the stock exchanges have placed the trading of the Company's shares under the trade-to-trade category.

The Company is actively pursuing compliance with SEBI Circular No. Cir/ISD/3/2011 by working towards the dematerialization of the entire shareholding of Promoters/Persons Acting in Concert (PACs). However, despite ongoing efforts, the Company has been unable to fulfill this condition due to a lack of response from the promoters regarding the dematerialization process.

As a result, the stock exchanges have continued to place the trading of the Company's shares under the trade-to-trade category until the required dematerialization is completed.

The Company is also working towards re-classifying certain promoters to the public category. This initiative is based on representations received from these promoters, who have requested to be reclassified. The Company is in the process of evaluating these requests and will undertake the necessary steps to effect this reclassification in accordance with regulatory guidelines and requirements.

2. As per U.S. regulations, an audit is not mandatory for Avant-Garde Infosystems Inc. Consequently, an Auditor's Report was not initially prepared for the subsidiary's financial statements. However, we acknowledge that, under FEMA guidelines, the Auditor's Report must be submitted along with the Annual Performance Report (APR). To ensure compliance with FEMA provisions, we have initiated the process of obtaining the required Auditor's Report from the auditors of Avant-Garde Infosystems Inc. We are closely coordinating with the auditors to facilitate a timely submission of the report.

3. The delay in the submission of financials occurred due to pending account reconciliations with vendors.

INTERNAL AUDITORS:

On the recommendation of the Audit Committee, the Board of Directors appointed M/s. Thirupathi and Associates, Chartered Accountants, Hyderabad, as the Internal Auditors of the Company. The Internal Auditors submit their reports on a quarterly basis.

21. Deposits

During the year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014. As such, no amount on account of principal or interest on deposits from the public was outstanding as of the Balance Sheet date.

Additionally, the Company has availed an amount of Rs.428.50 Lakhs from, Whole-Time Directors as un-secured loans, and Rs.725.00 lakhs as Inter Corporate Deposits, during the period 2023-24. These amounts were exempted from the definition of deposits. The outstanding balances exempt from the definition of deposits, including Inter-Corporate Deposits (ICDs) and Secured and Unsecured loans, as on 31st March 2024, amount to Rs.2,424.30 Lakhs

22. Particulars of Loans, Guarantees and Investments.

The details of Loans, Guarantees, and Investments covered under the provisions of Section 186 of the Companies Act, 2013, are provided in the notes forming part of the financial statements.

23. Related Party Transactions

During the financial year 2023-24, all related party transactions conducted by the Company were on an arm's length basis and in the ordinary course of business. Accordingly, the provisions of Section 188 of the Companies Act, 2013 are not applicable. There were no materially significant related party transactions involving Promoters, Directors, Key Managerial Personnel, or other designated persons during the year. Details of related party transactions under Section 188 of the Companies Act, 2013 are provided in Form AOC 2, annexed as Annexure-D to this report.

24. Corporate Social Responsibility (CSR)

During the financial year 2023-24, the provisions of Section 135 of the Companies Act, 2013 were not applicable to the Company. However, the Company has established a Corporate Social Responsibility (CSR) Policy and constituted a CSR Committee in accordance with Section 135 of the Companies Act, 2013. The details of the CSR Policy and Committee are available on the Company's website at www.kernex.in.

25. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo:

As required under Section 134(3)(m) of the Companies Act, 2013 and Rule 8(3) of the Companies (Accounts) Rules, 2014, the information related to conservation of energy, technology absorption, and foreign exchange earnings and outgo is provided and annexed as Annexure E to this report.

26. Risk Management

Your Company has established a comprehensive risk management framework to identify, assess, monitor, and mitigate various risks to its key business objectives. The major risks identified by the business and functional units are systematically addressed through ongoing mitigating actions. These risk management activities are discussed regularly at the meetings of the Audit Committee and the Board.

The Company has implemented robust internal control systems and processes to optimize risk mitigation measures. These systems are reviewed by the Audit Committee and approved by the Board. The executive management receives periodic guidance from the Board to enhance risk mitigation strategies and take timely action as needed.

27. Vigil Mechanism

In compliance with Section 177(9) of the Companies Act, 2013, your Company has established a Whistle Blower Policy/Vigil Mechanism to facilitate the reporting of illegal or unethical behavior. Employees are encouraged to report violations of applicable laws, regulations, and the Company's Code of Conduct. The Audit Committee oversees and reviews reports received through this mechanism. Employees have the option to report directly to the Chairman of the Audit Committee. Throughout the year under review, no employee was denied access to the Audit Committee. The Directors and senior management are committed to maintaining the confidentiality of the reporting process and ensuring that whistleblowers are protected from any form of discrimination.

28. Regulatory / Court Orders

No significant or material orders were passed by regulators, courts, or tribunals that would impact the going concern status of the Company or its future operations. However, it is noted that the stock exchanges imposed penalties for the non-submission of financial results for the quarters ended 31st December 2023 and 31st March 2024.

29. Compliance with Secretarial Standards

The Company is adhering to the applicable Secretarial Standards as prescribed under the Companies Act, 2013.

30. Corporate Insolvency Resolution process initiated under the Insolvency and Bankruptcy Code, 2016 (IBC)

During the period under review, no Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) was initiated against the Company.

31. Failure to implement any Corporate Action

There were no instances of Corporate Insolvency Resolution Process (CIRP) initiated against the Company during the period under review.

32. Annual Return

The Annual Return of the Company as of 31 March 2024 is available on the Company's website and can be accessed at www.kernex.in.

33. Disclosure under the sexual harassment of women at workplace (prevention, prohibition and redressal) Act, 2013

Your Company has implemented a Policy for the Prevention of Sexual Harassment of Women at the Workplace, in accordance with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been established to address and resolve any complaints related to sexual harassment. During the period under review, the Company has not received any complaints in this regard.

34. Familiarization Programs for Independent Directors

The Company undertakes a comprehensive familiarization program for all Independent Directors, ensuring they are well-acquainted with their roles, rights, and responsibilities within the Company. This program includes detailed briefings on various aspects such as the nature of the industry, risk management, board evaluation processes, financial controls, management, board effectiveness, and strategic direction.

Directors are thoroughly informed about the regulatory compliances required under the Companies Act, SEBI (LODR) Regulations, 2015, and other relevant regulations, with their affirmation obtained for the same. To provide a deeper understanding of the Company's operations, Directors are given insights into the functioning of various divisions and departments, the Company's market share, the markets it operates in, as well as governance and internal control processes.

The Whole-Time Directors engage in personal discussions with Independent Directors from time to time, further enhancing their understanding of the Company's business and the regulatory framework in which it operates. These initiatives are designed to equip Independent Directors with the knowledge and context needed to effectively fulfill their roles, contributing to informed decision-making and robust governance within the Company.

35. Other General Disclosures

a. Consolidated Financial Statements

The Company is presenting Consolidated Financial Statements in addition to the Standalone Financial Statements for the financial year ended 31st March 2024. This inclusion aligns with the applicable accounting standards and regulatory requirements, providing a comprehensive view of the financial performance of the Company, its subsidiary, and its joint venture. The consolidated statements offer shareholders a broader perspective on the overall financial health and operational results of the entire group.

b. Timely Holding of the Annual General Meeting

The Company has adhered to the statutory requirements by holding its Annual General Meeting (AGM) for the financial year 2023-24 within the prescribed time frame. There was no delay in convening the AGM, demonstrating the Company's commitment to compliance with regulatory obligations and its efforts to maintain transparency and timely communication with its shareholders.

Cost Records Maintenance

As per the provisions of the Companies Act, 2013, the Company is not required to maintain cost records for the financial year 2023-24.

36. Statement of deviation or variation

During the year, the Company successfully raised funds from the public through private placement and preferential issue basis. The funds were raised in accordance with the provisions of the Companies Act,

2013 and SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018.

All proceeds from these issuances were utilized strictly for the purposes outlined in the Notice and Private Placement Offer Letter that was circulated to the Allottees prior to the issuance. The Company has ensured that the funds were deployed in line with the objectives stated, maintaining full compliance with regulatory requirements and commitment to transparency with its stakeholders. The utilization of funds has been closely monitored and reviewed by the Board of Directors to ensure adherence to the planned objectives.

37. Management Discussion & Analysis (MDA)

The Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is presented in a separate section forming part of this Annual Report. This report provides a detailed analysis of the Company's performance, industry trends, opportunities, risks, and outlook for the future. The Management's Discussion and Analysis Report is annexed as Annexure-F to this report for the shareholders' reference.

38. Corporate Governance Report

Your Company is committed to adhering to corporate governance requirements and maintaining the highest standards of integrity and transparency. In line with this commitment, the report on Corporate Governance, as stipulated under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, is provided separately in this Annual Report. The detailed Corporate Governance Report outlines the Company's governance structure, board composition, committee functions, and other governance practices, and is annexed as Annexure-G to this report.

Additionally, the requisite certificate from the Practicing Company Secretary, confirming compliance with the conditions of corporate governance as prescribed under the SEBI (LODR) Regulations, is attached to this report. This certificate serves as an affirmation of the Company's adherence to the prescribed governance norms

39. Suspension of Trading

The shares of the Company are listed and actively traded on both BSE Limited ("BSE") and the National Stock Exchange of India ("NSE"). During the period under review, there has been no suspension of trading of the Company's securities on either of these stock exchanges.

40. Acknowledgements:

Your Directors would like to express their sincere appreciation for the valuable guidance, assistance, and cooperation received from the Indian Railways, South Central Railways, NCR (A) and NCR (B), RDSO, Egyptian Railways, Sri Lanka Railways, State Bank of India, HDFC Bank, Government authorities, and our esteemed members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commendable and dedicated contribution of all employees, whose hard work and commitment have been integral to the Company's success.