Dear Members,
The Board of Directors are pleased to present 43rd Annual Report together
with the Audited Accounts of the Company for the financial year ended on 31st
March, 2023.
OPERATIONS AND PROSPECTS
Financial Results (Standalone and Consolidated)
The summary of operating results for the years 2022-23 and the previous 2 years is
given below:
Particulars |
Operations* |
Standalone |
Consolidated |
|
2022-23 |
2022-23 |
2021-22 |
2020-21 |
2022-23 |
2021-22 |
2020-21 |
Total Income |
3,139.1 |
3,636.1 |
2,233.7 |
1,494.1 |
11,387.6 |
8,315.8 |
5,672.4 |
Profit Before Interest, Depreciation and Exceptional Item |
797.6 |
1,104.6 |
466.5 |
263.7 |
1,804.6 |
1,224.8 |
833.8 |
Less: Finance Cost |
85.1 |
85.1 |
75.4 |
92.7 |
239.6 |
247.7 |
268.3 |
Gross Profit |
712.5 |
1,019.5 |
391.1 |
171.1 |
1,565.0 |
977.1 |
565.4 |
Less: Depreciation and amortisation |
127.1 |
127.1 |
117.1 |
119.5 |
493.9 |
453.8 |
460.4 |
Profit Before Share of Profit of an Associate |
585.4 |
892.4 |
274.0 |
51.5 |
1,071.1 |
523.2 |
105.0 |
Share of Profit of an Associate |
|
|
|
|
5.0 |
(0.4) |
1.1 |
Profit Before tax |
585.4 |
892.4 |
274.0 |
51.5 |
1,076.0 |
522.9 |
106.1 |
Less: Tax Expense |
|
200.1 |
61.1 |
17.6 |
306.2 |
150.9 |
36.5 |
Net Profit / (Loss) for the Year |
|
692.3 |
212.9 |
33.9 |
769.8 |
372.0 |
69.7 |
Other Comprehensive Income (OCI) / (Loss) |
|
(1.6) |
1.0 |
1.9 |
(4.8) |
7.1 |
-1.8 |
Total Comprehensive Income / (Loss) for the Period |
|
690.7 |
213.9 |
35.8 |
765.0 |
379.1 |
67.8 |
* Excluding non-operational Income/(Expenses)
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 mproved 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
onetime 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 recordbreaking 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 revious 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 202223. 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 202122 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 23rd 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 1st December, 2022 and has been given effect from the Appointed
Date i.e 1st 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 31st 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 23rd 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 9th
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 18th 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 25th 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 9th February,
2023 approved the closure of the buyback with effect from closing of trading hours on 9th
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 : year and if so, number of such cases and the total amount
involved |
NIL |
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 42nd AGM held
on 27th 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 7th March, 2022 to 6th 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 28th
July, 2022 to 27th 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 28th July, 2022 to 27th
July, 2027.
(ii) Re-appointment of Mr. Jai Vardhan Saboo (DIN: 00025499) as Non-Executive
Director who retired by rotation at 42nd 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 28th March, 2023, the Board of Directors
of the Company at its meeting held on 28th 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 1st April, 2023
upto 31st 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 12th August, 2023
appointed Mrs. Anuradha Saboo (DIN : 01812641) as an Additional Director (Non-Executive)
of the Company w.e.f.
12th 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 31st 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/
CREDIT RATING
During the year under review, ICRA Limited has upgraded credit rating of the Company as
per below details:
Instrument |
Rating Action |
Long Term: Cash Credit Facilities, Term Loan and Unallocated
Limits |
[ICRA]A (Stable); upgraded from [ICRA]A- |
Short Term: Non-fund based Facilities |
[ICRA]A1; upgraded from [ICRA]A2+ |
Fixed Deposits |
[ICRA]A; upgraded from [ICRA]A- |
Total |
|
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 31st 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 31st 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 39th
Annual General Meeting (AGM) for a term of five years to hold office from the conclusion
of the 39th Annual General Meeting of the Company till the conclusion of the 44th
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
selfexplanatory 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 1st April, 2022 to 31st
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 31st 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.
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For and on behalf of the Board of Directors |
Date :- 12th August, 2023 |
Yashovardhan Saboo |
Place :- Chandigarh |
Chairman and Managing Director |
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DIN: 00012158 |
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