Governance

GOVERNANCE STRUCTURE AND COMPOSITION

KBL is governed by a dynamic Board of Directors, the highest governing body, responsible for providing strategic direction, ensuring accountability and overseeing management. The Chairman and Managing Director (CMD) is responsible for day-to-day management and reports to the Board and its committees, as applicable, in accordance with the Company’s governance framework, with the Joint Managing Director (JMD) reporting to him. Other key managerial personnel and senior management report to the CMD and JMD.

The Board is supported by various committees, including the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee, each with clearly-defined terms of reference.

The Audit Committee oversees financial reporting, internal controls and audit matters; the Nomination and Remuneration Committee oversees Board composition and compensation of directors and senior management; the Risk Management Committee oversees enterprise-level risks; the CSR Committee oversees social initiatives; and the Stakeholders Relationship Committee monitors the redressal of investors’ grievances.

Detailed terms of reference of these committees are provided on page 199-204 in this report.

NOMINATION AND SELECTION OF THE HIGHEST GOVERNANCE BODY

The Company follows a structured and transparent process for the nomination and selection of members of the Board of Directors. The process is overseen by the Nomination and Remuneration Committee of the Board. The Committee recommends the candidates based on evaluation of statutory requirements, independence and balancing diversity in skill, gender and experience, to the Board. The objective is to ensure an appropriately balanced, skilled and independent Board capable of providing effective oversight of management and the Company’s operations. The appointment of directors as made by the Board are subject to the approval of shareholders.

CHAIR OF HIGHEST GOVERNING BODY

Mr. Sanjay Kirloskar, Chairman, is also the Managing Director (CMD) of the Company. He holds a bachelor’s degree in mechanical engineering from the Illinois Institute of Technology in Chicago, USA. He has been associated with the Company since 1983 and has over 42 years of rich and varied industrial experience with expertise in other functional areas like strategy, executive management and international business operations.

He reports to the Board of Directors. The Board of Directors consist of 70% independent directors. The Company adopts the highest levels of transparency in its dealings, including the transactions with the CMD. Such transactions are overseen by the Audit Committee of the Board independently and decisions are taken without any involvement of the management.

ROLE OF THE HIGHEST GOVERNANCE BODY IN IMPACT OVERSIGHT

The Board of Directors oversees the management of the Company’s economic, environmental and social impacts. The Board regularly reviews Corporate Social Responsibility (CSR) initiatives, statutory compliances and investor grievances.

DELEGATING RESPONSIBILITY FOR IMPACT MANAGEMENT

The Board of Directors of the Company delegates responsibility for managing the Company’s economic, environmental and social impacts to management through a clearly-defined governance structure. Oversight is exercised through Board-level committees, such as the Audit Committee, Risk Management Committee, Corporate Social Responsibility Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee, each acting within its respective mandate. Day-to-day responsibility for managing impacts is entrusted to the Managing Director and Joint Managing Director, supported by senior management and functional heads. The management reports periodically to the Board and its committees on material impacts, performance, risks, compliance status and mitigation measures, enabling the Board to monitor effectiveness, provide guidance and ensure alignment with the Company’s strategy and stakeholder expectations.

CONFLICTS OF INTEREST

The Board has established a structured framework to prevent, identify, disclose and mitigate conflicts of interest at the Board level. The Directors are required to make initial and periodic disclosures of interest, including disclosure of any actual or potential conflicts, in accordance with applicable laws, the Company’s Code of Conduct and internal governance policies. These disclosures are placed before the Board and relevant committees for noting and review.

To ensure independence of judgement, directors with a disclosed or perceived conflict of interest are required to abstain from discussions and decision-making on the concerned matters. Related-party transactions and other matters involving potential conflicts are subject to enhanced scrutiny and approval processes, including review by the Audit Committee and, where applicable, the shareholders. In addition, annual declarations of independence are obtained from independent directors and the Board periodically reviews compliance with conflict of interest requirements to ensure that decisions are taken in the best interests of the Company and its stakeholders.

COMMUNICATION OF CRITICAL CONCERNS

KBL has established formal mechanisms to ensure that critical concerns are promptly identified, escalated and communicated to the Board of Directors, the highest governance body. Critical concerns are communicated through periodic Board and committee meetings, management reports, internal and external audit reports, risk and compliance updates, whistle blower reports and regulatory or legal correspondence, as applicable. Matters of an urgent nature may also be escalated to the Chairpersons of the relevant committees between meetings.

COLLECTIVE KNOWLEDGE OF THE HIGHEST GOVERNANCE BODY

The Company advances the collective sustainability-related knowledge of the Board through periodic presentations, familiarisation programmes, expert briefings, strategy and risk reviews, CSR oversight and management interactions.

EVALUATION OF THE PERFORMANCE OF THE HIGHEST GOVERNANCE BODY

The Board’s performance, including its oversight of economic, environmental and social impacts, is annually evaluated through an online platform where Directors submit their feedback, with outcomes reviewed and improvement actions monitored by the Board.

REMUNERATION POLICIES

The Board determines the remuneration of Directors and Senior Management based on the recommendations of the Nomination and Remuneration Committee (NRC), within the limits prescribed under the Companies Act, applicable rules and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

The Company has established a comprehensive Remuneration Policy for Directors, Key Managerial Personnel (KMP) and Senior Management. The policy aims to ensure a transparent and structured approach to determining remuneration, thereby strengthening stakeholder confidence and supporting the creation of long-term value. It also seeks to maintain an appropriate balance between fixed and performance-linked components to attract, retain and motivate high-performing talent for critical roles, enabling sustained business growth. Any revisions in remuneration for KMP and Senior Management are carried out in accordance with the provisions of this policy.