To the Members of
Kalyan Jewellers India Limited
Your Directors take pleasure in submitting the 13th AnnualReport of the business and operations of your Company and the audited financial statementsfor the financial year ended March 31 2021.
|Financial Results || || || ||(Rs. in million) |
|Particulars ||Standalone ||Consolidated |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Total Income ||73783.77 ||79441.22 ||86186.74 ||101810.16 |
|Total Expenses ||71908.92 ||77087.96 ||85793.17 ||99601.29 |
|Profit before tax ||1874.85 ||2353.26 ||393.57 ||2208.87 |
|Tax expense ||492.53 ||789.75 ||454.30 ||786.12 |
|Profit for the year ||1382.32 ||1563.51 ||(60.73) ||1422.75 |
Standalone Financial Results
During the Financial Year (FY) 2020-21 the Company has achieved atotal income of Rs.73783.77 million as compared to Rs.79441.22 million in FY2019-20. Theprofit before tax for FY2020-21 stood at Rs.1874.85 million compared to Rs.2353.26million achieved in FY2019-20. The profit after tax stood at Rs.1382.32 million forFY2020-21 as compared to Rs.1563.51 million for the previous year.
Consolidated Financial Results:
The Company's consolidated total income for FY2020- 21 wasRs.86186.74 million as compared to Rs.101810.16 million for the previous year.
Change in the Nature of Business If any
There was no change in the nature of business of the Company during theyear under review
The Directors wish to invest the profits back into the Company forfurther growth and expansion and therefore did not recommend any Equity dividend for theFY2020-21. Pursuant to Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("the Listing Regulations") the DividendDistribution Policy duly approved by the Board is available on the website of the Companyand can be accessed at www.kalvaniewellers.net.
Transfer to General Reserve
No amount has been transferred to the General Reserve for the financialyear 2020-21.
Transfer of Unclaimed Dividend to the IEPF
In accordance with the provisions of Sections 124 and 125 of the Actand Investor Education and Protection Fund (Accounting Audit Transfer and Refund) Rules2016 ("IEPF Rules") dividends of a company which remain unpaid or unclaimed fora period of seven years from the date of transfer to the Unpaid Dividend Account shall betransferred by the Company to the Investor Education and Protection Fund("IEPF"). In terms of the foregoing provisions of the Act there is no dividendwhich remains outstanding or remain to be paid & require to be transferred to the IEPFby the Company during the year ended March 31 2021.
During the year under review your Company successfully completed itsInitial Public Offer (IPO') of 135057470 equity shares at Rs.87/- (includinga share premium of Rs.77) per equity share of Rs.10 each. Employees were offered theequity shares at a discount of Rs.8 per equity share at an offer price of Rs.79 per shareon 229885 equity shares. IPO included fresh issue of 91954022 Equity Shares of Rs.10each for raising funds for the Company to the tune of Rs.7998.16 million and an offer forsale of 43103448 Equity Shares of face value of Rs.10 each of the Company. The shares ofthe Company listed at both BSE & NSE w.e.f March 26 2021.
The authorised capital of the Company increased from 04005 million toRs.20005 million on August 17 2020.
Subsequent to the completion of the IPO the paid up equity sharecapital of the Company increased from Rs.9380.99 million to 00300.53 million. TheCompany's equity shares were listed on Bombay Stock Exchange Limited (BSE) andNational Stock Exchange of India Limited (NSE) on March 26 2021. Further the Company hadconverted 119047619 number of Compulsory Convertible Preference Shares into 98857435number of equity shares on March 4 2021.
Management Discussion & Analysis Report
Pursuant to Regulation 34(2) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 a ManagementDiscussion and Analysis Report is given in Annexure -1
Pursuant to Regulation 34(3) of Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR)Regulations 2015) a report on Corporate Governance along with a Certificate from theStatutory Auditor towards compliance of the provisions of Corporate Governance forms anintegral part of this Annual Report and are given in Annexure - 2 and Annexure - 3respectively.
The Chief Executive Officer and the Chief Financial Officer havecertified to the Board with regard to financial statements and other matters as requiredunder Regulation 17(8) read with Schedule II to the SEBI (LODR) Regulations 2015.
Corporate Social Responsibility (CSR)
In compliance with Section 135 of the Act the Company has undertakenCSR activities projects and programmes as provided in the CSR policy of the Company andas identified under Schedule VII of the Act and excluding activities undertaken inpursuance of its normal course of business. In addition to the projects specified as CSRactivities under Section 135 of Act the Company has also carried out several othersustainability/responsible business initiatives and projects. The Company has spent theentire 2% of the net profits earmarked for CSR projects during the FY2020-21. TheCorporate Social Responsibility Policy (CSR Policy) of the Company is available on thewebsite of the Company at www.kalyaniewellers.net. The Annual Report on CSR activities ofthe Company during the financial year 2020-21 as required to be given under Section 135 ofthe Companies Act 2013 and Rule 8 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 has been provided in an Annexure - 4 to this Report
Material Changes and Commitments Affecting Financial Position of theCompany
During the year ended March 31 2021 the Company had made an InitialPublic Offering (IPO) of 135057470 equity shares at Rs.87/- (including a share premiumof Rs.77) per equity share of Rs.10 each comprising of a fresh issue of 91954022 equityshares and an offer for sale (OFS) of 43103448 equity shares by selling shareholders.Pursuant to Regulation 32 (1) there was no deviation/ variation in the utilisation ofproceeds as mentioned in the objects stated in the Prospectus dated March 19 2021 inrespect of the Initial Public Offering of the Company.
No other material changes and commitments have occurred between end ofthe financial year of the Company to which the financial statements relate and the date ofthis report which may affect the financial position of the Company.
The Board of Directors at its meeting held on August 20 2020 hadconstituted the Risk Management Committee. The details about the composition of RiskManagement Committee and number of meetings held are given in the Corporate GovernanceReport. Further Pursuant to Section 134(3)(n) of the Companies Act 2013 and Regulation17(9) of SEBI (LODR) Regulations 2015 the Company has formulated and adopted a RiskManagement Policy.
The Company has in place a mechanism to identify assess monitor andmitigate various risks to key business objectives. Major risks identified by thebusinesses and functions are systematically addressed through mitigating actions on acontinuing basis. Our internal control encompasses various managements systems structuresof organisation standard and code of conduct which all put together help in managing therisks associated with the Company. In order to ensure the internal controls systems aremeeting the required standards it is reviewed at periodical intervals. If any weaknessesare identified in the process of review the same are addressed to strengthen the internalcontrols which are also revised at frequent intervals.
There are no risks which in the opinion of the Board threaten theexistence of the Company. However some of the risks which may pose challenges are set outin the Management Discussion and Analysis which forms part of this Annual Report.
Vigil Mechanism/Whistle-Blower Policy for Directors and Employees:
The Company has formulated a comprehensive Whistle-Blower Policy inline with the provisions of Section 177(9) and Section 177(10) of the Companies Act 2013with a will to enable the stakeholders including Directors individual employees tofreely communicate their concerns about illegal or unethical practices and to reportgenuine concerns to the Audit Committee of the Company. The mechanism provides adequatesafeguards against victimisation of Directors or employees who avail of the mechanism. TheVigil Mechanism has been placed in the website of the Company at www.kalvaniewellers.net.
Disclosures as per the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013
Your Company has adopted a policy against sexual harassment in linewith the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and the rules framed thereunder. The Company has constitutedInternal Complaints Committee for redressal of complaints on sexual harassment. During theyear the Company had not received any complaint on sexual harassment and no complaint waspending as on March 31 2021
Details of Application Made or any Proceeding Pending Under theInsolvency and Bankruptcy Code 2016 (31 of 2016) During The Financial Year
There is no application made or any proceeding pending under theInsolvency and Bankruptcy Code 2016 (31 of 2016) during the financial year 2020-21.
Significant and Material Orders
There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern status and Company's operations infuture.
During the year under review ICRA Limited a credit rating agencyregistered with SEBI had reaffirmed the loan term facilities as A-/Stable and A2+ forlong-term/ short-term fund based loans.
Pursuant to Section 92(3) read with Section 134(3) (a) of the Act theAnnual Return as on March 31 2021 is available on the Company's website onwww.kalyaniewellers.net
Related Party Transactions
All related party transactions which were entered during the FinancialYear were in the ordinary course of business and on an arm's length basis. There wereno materially significant related party transactions entered by the Company with thePromoters Directors Key Managerial Personnel or other persons which may have a potentialconflict with the interests of the Company.
The details of the transactions with related parties during the year2020-21 are provided in the accompanying financial statements. The details of transactionswith Related Parties as required under Section 134(3)(h) of the Act read with Rule 8(2) ofthe Companies (Accounts) Rules 2014 are given in Annexure - 5 in Form AOC - 2 and formspart of this Report the Company has also adopted Policy on Materiality and dealing withRelated Party Transactions and the same has been placed on the website of the Company atwww.kalvaniewellers.net.
Particulars of Loans Guarantees and Investments
Details of loans guarantees and investments covered under theprovisions of Section 186 of the Act are given in the notes to the financial statements.
Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo
a) Conservation of Energy
In its endeavours towards conservation of energy your Company ensuresoptimal use of energy avoid wastages and endeavors to conserve energy as far as possible.
b) Technology Absorption
Your Company has not carried out any research and developmentactivities during the year.
c) Foreign Exchange Earnings and Outgo
During the year your Company's foreign exchange earnings wereRs.152.93 million and foreign exchange outgo was Rs.57.94 million.
Subsidiaries/ Joint Venture/ Associate Company
The Company had the following subsidiaries as on March 31 2021.
|SI. No. Name of the Subsidiary/ Associate/ Joint Venture ||Relationship |
|1 Enovate Lifestyles Private Limited ||Direct Subsidiary |
|2 Kalyan Jewellers FZE UAE ||Direct Subsidiary |
|3 Kalyan Jewelers INC. USA ||Direct Subsidiary |
|4 Kalyan Jewellers LLC UAE ||Subsidiary |
|5 Kenouz Al Sharq Gold Ind. LLC UAE ||Subsidiary |
|6 Kalyan Jewellers LLC Oman; ||Subsidiary |
|7 Kalyan Jewellers For Golden Jewellery Company W.L.L. Kuwait ||Subsidiary |
|8 Kalyan Jewellers LLC Qatar ||Subsidiary |
|9 Kalyan Jewellers Bahrain W.L.L Bahrain. ||Subsidiary |
Pursuant to Section 129 (3) of the Companies Act 2013 read with Rule 5of the Companies (Accounts) Rules 2014 a statement containing salient features of thefinancial statements of the Company's Subsidiaries and Associate Company in Form No.AOC-1 is attached to this report as Annexure - 5A.
Further pursuant to the provisions of Section 136 of the Act thefinancial statements of the Company consolidated financial statements along with relevantdocuments and separate audited financial statements in respect of subsidiaries areavailable on the Company's website on www.kalyaniewellers.net.
The Policy fordetermining Material Subsidiariesadopted by your Boardin conformity with Regulation 16 of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") can be accessed on the Company's website atwww.kalyaniewellers.net
During the year under review Ten Board meeting were held details ofwhich are provided in the Corporate Governance Report.
Directors and Key Managerial Personnel
The Board of Directors of the Company comprises of ten directors ofwhich three are Executive and seven are Non-Executive Directors including fiveindependent directors one Non-Executive Director and one Nominee Director. Thecomposition of the Board of Directors is in compliance with the provisions of Section 149of the Companies Act 2013.
The list of directors of the Company are provided below:
|SI. No. Name of the Director ||Designation |
|1 T. S. Kalyanaraman ||Chairman & Managing Director |
|2 T. K. Seetharam ||Whole-time Director |
|3 T. K. Ramesh ||Whole-time Director |
|4 Anish Saraf ||Non-Executive Nominee Director |
|5 M. Ramaswamy ||Independent Director |
|6 A. D. M. Chavali ||Independent Director |
|7 Kishori Udeshi ||Independent Director |
|8 T. S Anantharaman ||Independent Director |
|9 Anil S. Nair ||Independent Director |
|10 Salil Nair ||Non-Executive Director |
During the year Mr. Anil Nair and Mr. Salil Nair were appointed asIndependent Director and Non-Executive Director respectively for a period of 5 yearsw.e.f. May 29 2020. Also Mr. A. D. M. Chavali and Mr. M. Ramaswamy were re-appointed asIndependent Directors for a further term of 5 years and 2 years respectively with effectfrom February 11 2021. Mr. Sanjay Raghuraman Chief Operating Officer of the Company wasdesignated as Chief Executive Officer w.e.f. July 1 2020. Mr. V. Swaminathan ChiefFinancial Officer and Mr. Jishnu R. G. Company Secretary continue to be the KeyManagerial Personnel of the Company.
The Company has received declarations of independence in accordancewith the provisions of the Act as well as the LODR Regulations from all the IndependentDirectors. Further all the Independent Directors have confirmed that they are incompliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification ofDirectors) Rules 2014 with respect to registration with the data bank of IndependentDirectors maintained by the Indian Institute of Corporate Affairs.
Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) ofthe Listing Regulations Mr. MR Thiagarajan Practising Company Secretary Coimbatore hascertified that none of the Directors on the Board of the Company has been debarred ordisqualified from being appointed or continuing as Directors of companies by theSecurities and Exchange Board of India/Ministry of Corporate Affairs or any such statutoryauthority and the certificate forms part of this Annual Report and is given as Annexure6.A.
Meeting of Independent Directors
In terms of requirements under Schedule IV of the Companies Act 2013and Regulation 25 (3) of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 a separate meeting of the Independent Directors was held on March 242021.
The Independent Directors at the meeting inter alia reviewed thefollowing:
Performance of Non-Independent Directors and Board as a whole
Performance of the Chairman of the Company taking into accountthe views of Executive Directors and Non-Executive Directors.
Assessed the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform their duties.
Adequacy of Internal Controls and Compliance with Laws
The Company has in place adequate internal financial controls withreference to financial statements. During the year under review such controls were testedand no reportable material weakness in the design or operation were observed.
During the year under review the Company has not accepted any depositfrom public within the meaning of Section 73 of the Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014. The Company has no unclaimed/unpaidmatured deposit or interest due thereon.
The Company has complied with the applicable provisions of SecretarialStandards 1 and 2 issued by the Institute of Company Secretaries of India and notified byMinistry of Corporate Affairs.
Audit Committee and other Board Committees
The details pertaining to the composition of the Audit Committee andits role and details of other committees of the Company are included in the CorporateGovernance Report which is a part of this Annual Report.
Details in Respect of Frauds Reported by Auditors Under Directors (12)of Section 143 other than those which are Reportable to the Central Government
The Statutory Auditors of the Company have not reported any fraud asspecified under the second proviso of Section 143(12) of the Act (including any statutorymodification^) or re-enactment(s) for the time being in force).
Employee Stock Option Schemes
The Company had implemented an employee stock option plan namelyKalyan Jewellers India Limited- Employee Stock Option Plan 2020' and anemployee stock purchase scheme namely Kalyan Jewellers India Limited-Employee StockPurchase Scheme 2020' vide members' special resolution dated 20.08.2020 prior toits initial public offer with the objectives to motivate the key work force seeking theircontribution to the corporate growth to create an employee ownership culture to attractnew talents and to retain them for ensuring sustained growth. Your Company has neithergranted any employee stock option nor issued any Share under this schemes till date. Interms of Regulation 12(1) of the Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulations 2014 ("SEBI SBEB Regulations") any fresh grantof Options or issue of Shares can be made only if the Employee Benefit Schemes are incompliance with the SEBI SBEB Regulations and are ratified by the members of the Company.Accordingly the Employee Benefit Schemes will be placed before the members forratification at the 13th Annual General Meeting of the Company.
Performance Evaluation of Board and Its Committees
Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 and as per Guidance Note onBoard Evaluation issued by SEBI on January 5 2017 the Board has carried out annualperformance evaluation of its own performance the Directors individually as well asevaluation of the working of its Committees.
The Company has on the recommendation of the Nomination &Remuneration Committee framed and adopted a Nomination and Remuneration Policy in termsof the Section 178 of the Act. The policy inter alia lays down the principles relatingto appointment cessation remuneration and evaluation of directors key managerialpersonnel and senior management personnel of the Company. The Nomination &Remuneration Policy of the Company is available on the website of the Company atwww.kalvaniewellers.net
Non-Executive Directors' Compensation and Disclosures
None of the Independent Directors have any pecuniary relationship ortransactions with the Company which in the Judgement of the Board may affect theindependence of the Directors
Auditors Statutory Auditors
The shareholders of the Company at the 11th Annual GeneralMeeting (AGM) held on September 30 2019 have appointed M/s. Deloitte Haskins & SellsLLP Chartered Accountants (Firm Registration No 117366W / W-100018) 7thFloor Times Square Door No. 62 A. T. T. Colony Road Coimbatore - 641 018 as thestatutory auditors of the Company to hold office from the conclusion of 11thAGM till the conclusion of the 16th AGM of the Company.
The Board of Directors pursuant to the provisions of Section 204 ofthe Companies Act 2013 appointed of Mr. M. R. Thiagarajan Company Secretary inPractice as the Secretarial Auditor of the Company to carry out the Secretarial Auditfor the Financial Year 2020- 21. Secretarial Audit Report issued by the SecretarialAuditor in Form No. MR -3 forms part of this Report and is annexed herewith as Annexure -6.
Your Company is not required to maintain cost records as specifiedunder Section 148 of the Act and not required to appoint Cost Auditors.
Auditor's Report and Secretarial Auditor's Report
There are no disqualifications reservations adverse remarks ordisclaimers in the auditor's report and secretarial auditor's report.
M/s. Balaram & Nandakumar Chartered Accountants Thrissur performsthe duties of Internal Auditors of the Company and their report is reviewed by the AuditCommittee quarterly.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Act the Board of Directors to thebest of its knowledge and ability confirm that:
i. in the preparation of the annual accounts the applicable accountingstandards have been followed and there are no material departures;
ii. they have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period;
iii. they have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe 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 to be followed bythe Company and that such internal financial controls are adequate and are operatingeffectively;
vi. they have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company the work performed by the internalstatutory and secretarial auditors and external consultants including the audit ofinternal financial controls over financial reporting by the statutory auditors and thereviews performed by management and the relevant board committees including the auditcommittee the Board is of the opinion that the Company's internal financial controlswere adequate and effective during FY2021.
Particulars of Employees and Related Disclosures
As prescribed under Section 197(12) of the Companies Act 2013("Act") and Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 the details are given in Annexure - 7.
A statement containing particulars of employees as required underSection 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is provided as a separate annexureforming part of this Report. In terms of Section 136 of the Act the Annual Report andfinancial statements are being sent to the shareholders excluding the aforesaid annexure.The said annexure is available for inspection at the registered office of the Companyduring business hours and will be made available to any shareholder on request.
Declaration Regarding Compliance by Board Members and Senior ManagementPersonnel with The Company's Code of Conduct
The Code of Conduct of the Company aims at ensuring consistentstandards of conduct and ethical business practices across the Company. This Code isreviewed on an annual basis and the latest Code is available on the website of the Companyat www.kal van jewellers net.
Code of Practices and Procedures For Fair Disclosure of UnpublishedPrice Sensitive Information
The Board has formulated Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information ("Fair Disclosure Code")for fair disclosure of events and occurrences that could impact price discovery in themarket for the Company's securities and to maintain the uniformity transparency andfairness in dealings with all stakeholders and ensure adherence to applicable laws andregulations. The copy of the same is available on the website of the Company atwww.kalvaniewellers.net.
Prevention of Insider Trading
The Board has formulated code of conduct for regulating monitoring andreporting of trading of shares by Insiders. This code lays down guidelines procedures tobe followed and disclosures to be made by the insiders while dealing with shares of theCompany and cautioning them on consequences of non-compliances. The copy of the same isavailable on the website of the Company at www.kalvaniewellers.net.
Your Directors wish to place on record their appreciation of thesupport which the Company has received from its promoters shareholders lenders businessassociates vendors customers media and the employees of the Company.