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KDDL Ltd.

BSE: 532054 Sector: Others
NSE: KDDL ISIN Code: INE291D01011
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OPEN 336.00
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VOLUME 2750
52-Week high 436.00
52-Week low 116.55
P/E 131.47
Mkt Cap.(Rs cr) 446
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

KDDL Ltd. (KDDL) - Director Report

Company director report

Dear Members

Your Directors present this 40 Annual Report together with the Audited Accounts of theCompany for the financial year ended 31 March 2020.

OPERATIONS AND PROSPECTS

Financial Results (Standalone and Consolidated)

The summary of operang results for the year 2019-20 is given below:

Amount in Rs. millions

Particulars

Standalone

Consolidated

2019-20 2018-19 2019-20 2018-19
Total Income 1858.6 1798.6 6583.5 6279.7
Pro t before interest depreciaon and exceponal it em 346.7 357.1 820.3 677.8
Less: Finance Cost 88.5 56.5 285.3 142.3
Gross Pro t 258.2 300.6 535.0 535.5
Less: Depreciaon and amorsa on 119.3 77.6 480.6 131.3
Pro t before Share of Pro t / (Loss) of an associate and joint venture 138.8 223.0 54.4 404.2
Share of Pro t / (Loss) of an associate and joint venture - - -3.3 0.0
Pro t Before tax 138.8 223.0 51.1 404.2
Less: Tax Expense 47.6 65.5 70.7 152.4
Net Pro t / (Loss) for the Year 91.2 157.5 -19.7 251.7
Other Comprehensive Income / (Loss) (OCI) -4.9 -4.1 8.3 -8.4
Total Comprehensive Income / (Loss) for the period 86.3 153.3 -11.4 243.4

PERFORMANCE AND PROJECTIONS

During the year the Company achieved consolidated total income of Rs. 6584 millionagainst Rs. 6280 million in the previous year registering a healthy growth of 4.8%against the growth of 23.9% achieved in previous year. Pro t before tax reduced from Rs.404.2 million to Rs. 51.1 million.

Total income from manufacturing operaons on standalone basis grew by 3.3% to Rs. 1858.6million from Rs. 1798.6 million in the previous year. The Company earned net profit a ertax of Rs. 91.2 million against Rs. 157.5 million in the previous year.

Manufacturing Business Segments

The main revenue of the manufacturing business segment is from watch components. TheSwiss watch market the principal desna on for our exports witnessed a growth of 2.4% in2019 compared to a growth of 6.3% in the previous year. The domesc watch market alsoshowed modest growth. The revenue of the Company from watch components was almost stagnantcompared to previous year and declined by 1%; this being accounted for by the slowdown inthe Swiss market where our company revenue declined by 4%. On the other hand domescrevenue of watch component business improved by 4%.

The other major segment of revenue is from the precision engineering business whereinthe Company registered a growth of 12% over the previous year compared to a growth of 14%in previous year. The revenue growth from domesc market was 17%. The revenue from exportsimproved marginally by 1%. The direct exports revenue declined compared to previous yearas some of the direct export customers are now considered as domesc revenue. The revenuefrom new exports customers and accounts have started owing from sectiond half of the year.Unfortunately in Quarter-4 of the financial year the revenues of the business wereimpacted due to sudden lock down announced by Government of India in March-2020.

The revenue from ornamental packaging business of the Company witnessed a growth of 20%on top of the growth of 48% recorded in previous year. During the year we also commencedexporng packaging boxes to countries in the Middle East.

The dismal global economic scenario due to the impact of COVID-19 pandemic will lead todeclining revenues for some period a er which gradual recoveries are expected. First halfof the financial year 2020-21 will witness maximum impact of slow down while the sectiondhalf is expected to be er. The prevailing scenario will also create new opportunies forthe company as some of the weak players will surely exit the market. The inia v es underAtam Nirbhar Bharat needs to be carefully watched and necessary steps are being taken topromote further growth and development of the company.

We connue to move up the value chain in the watch component manufacture. We areimplementing mulple inia v es to enhance capabilies t o manufacture more complex productsand improve producvity . During the year we have added the capacity for manufacture ofhigh-quality watches indexes / appliques at Bangalore watch hands factory. In 2020-21 ourmajor focus is on reducing costs and overheads in line with the expected decline inrevenue. In addion our focus is on enhancing revenue by structured markeng effortsincluding stronger digital presence to show case new products and features. We connue tofocus on manufacturing excellence with the goals of world class delivery compliancequality and turnaround me (TAT). For the current year the revenue from the watchcomponents business is expected to decline 10~15% as major markets and countries areunder lock down due to COVID-19 and the focus of all economies is on minimizing the impactand providing necessary smulus for market recovery. Revenue of the Precision engineeringbusiness of the Company is expected to be around the exisng levels with marginal growth aswe connue to expand our customer base and reach in new segments and markets. Your companyhas established its reputaon as a quality supplier with the ability to meet sophisc atedcustomer needs. By focusing on the vital levers of operaonal performance while adding keytechnical capabilies and show-casing our capabilies at leading internaonal trade exhibionsand with aggressive digital markeng we are con dent of adding new customers and connuegrowth and improved returns in the subsequent periods.

Ethos Limited

FY 19-20 has been a year of ups and downs for the Company. The year started on asubdued note with weak consumer senmen ts due to the slowdown in macro-economic situaon inIndia. The first half of the year witnessed at sales. In the next quarter the Companyshowed an impressive performance on the back of the fesv e period buoyancy. The revenuesof the Company grew by a healthy 21% quarter on quarter with a growth of more than 8% on asame store basis.

In this period the Company connued its expansion drive by launching 9 stores in thefirst nine months of the year and closing one store. Parcularly noteworthy amongst thesenew launches are its agship stores in Hyderabad and Kolkata. These stores will be in manyways ground-breaking for luxury retail in India in terms of the size splendour and useof state of the art technology.

The Company also focused on its o ine store experience at exisng stores and invested inthe renovaons at its major stores. The impact on sales on these renovated stores wasevident from the improved sales performance at these stores. The Company plans to investfurther at other stores for upgrading the look and feel of its stores.

Further the Company connued to build complimentary verc als for watch retailingbusiness. The Company invested in a er-sales watch service offering backed by a strongtechnician and watch expert team. In addion it steadily increased its pre-owned watchesbusiness.

The momentum observed in the third quarter of the year connued in the last quarter ofFY 19-20 before the impact of the Covid-19 began to be felt in the sectiond half of thequarter. Revenues connued to grow in this period albeit at a slower pace recording agrowth of 5.8% over the period 1 January 2020 to 15 March 2020 over the same period in theprevious year. However as the Government started taking serious measures to contain theCovid-19 situaon culminang in a naon wide lockdown all stores of the Company shutoperaons for the la er part of March 2020 resulng in no revenues. The overall impact ofthis was that the revenues showed a de-growth of 12% in this quarter.

As the pandemic connues to spread in India the Company is not able to gauge withcertainty the impact on demand in the medium term to long term. While the customer senment will be hit in the near term the Company is opmis c that recovery will be quick whennormalcy returns. The opmism is based on similar experience in demand shocks due to aseries of decisions taken by the government with the intenon to curb black money decisionssuch as the requirement of PAN card for transacon above Rs. 2 lakhs TCS requirements andnally the prohibion of cash transacons above Rs. 2 lakhs. While the severity of theseshocks was not as much as that of the current COVID-19 situaon they had a large impact onthe sales of the company. However within 1.5 years of these demand shocks the Companywitnessed a bounce back in the luxury watch market and we had some the highest growth andpro table years in FY 17-18 and FY 18-19. The Company expects the return to normalcy in orsoon a er the fourth quarter of the FY 20-21.

Estima AG

In January 2019 the Company acquired Esma AG a renowned Swiss watch handsmanufacturing company in Grenchen Switzerland. The underlying strategy is to protect andenhance our market share among Swiss customers who prefer to purchase Swiss made productsto meet the new SWISS ORIGIN regulaons that came intoe ect from 1 January 2017.

2019 was the first year of operaons post-acquision. During the year Company investedin the Watch hands manufacturing facility and upgraded the set up by acquiring latestmachines and equipment. We renovated the building and infrastructure to present a worldclass setup to potenal customers. Key managerial posions in the Company were also changedin line with the business requirements. Company has also added the facility to supplywatch dials in addion to watch hands thus expanding the potenal of ESTIMA.

During 2019 Company reported revenue of CHF 1503 K and the net loss for the year wasCHF 1332 K. This acquision ts into the strategy of KDDL to expand its footprint in Swissmanufacturing and we are in a good posion to turn it around by replicang its strengths andcapabilies from Indian operaons and extending the exisng strong customer relaonship. TheSwiss Origin regulaons will be the catalyst for the revival and growth of this businessunit.

Pylania AG

The Company's Swiss subsidiary Pylania SA in Switzerland connued to improve its protability from all

operaonal areas. Its financial performance was as per expectaon.

Satva Jewellery and Design Ltd

During the financial year there was no change in business operaons or the status ofthe Company.

The Hon'ble Naonal Company Law Tribunal (NCLT) Chandigarh Bench had passed an orderdated 15 October

2019 direcng both the Companies that the scheme should be considered as per theprocedure laid down in Section 232 of the Companies Act 2013 (the Act). Accordingly theBoard of Directors of the Company at its nd meeng held on 3 December 2019 and 26 May2020 respecv ely approved to le a new scheme of amalgamaon under section 232 together withother applicable provisions of the Act and the proposed appointed date has been changedfrom April 01 2017 to April 01 2019.

Satva's board and shareholders have already approved the merger of this Company withparent Company to bring synergy in the operaons and to uliz e its resources for creangvalue for shareholders. Presently merger activities and procedures are in progress.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of the Company have been prepared in accordancewith Section 129(3) of the act and applicable accounng standards. As per the provisions ofSection 136 of the act the audited financial statements for the financial year ended 31March 2020 in respect of each subsidiary are also available on the website of the Companyi.e www.kddl.com. A copy of the said audited accounts shall be provided to shareholdersupon request. A separate statement containing salient features of the financial statementsin prescribed format AOC- 1 is annexed as Annexure I to this report. The statement alsoprovides the details of performance and financial posions of each of the subsidiarycompany.

DIVIDEND

The Board of Directors at its meeng held on 2 March 2020 had declared Interim Dividendof Rs. 2 per equity share (i.e. 20%) of face value of Rs. 10/- each amounng to Rs.28089644 (including dividend distribuon tax) for the financial year 2019-20. The abovedividend was paid to the shareholders who were on the register of members as on 11 March2020 being the record date fixed for this purpose. The Board did not recommend naldividend.

TRANSFER TO RESERVES

The Company has not transferred any amount to the Reserves for the year ended 31 March2020.

CHANGE IN CAPITAL STRUCTURE

During the year under review there was no change in the authorized share capital ofthe Company.

The Company allo ed 5250 and 11250 Equity Shares of Rs. 10 each on 6 November 2019and 14 February 2020 respecv ely to the eligible employees under "KDDL EmployeeStock Opon Plan -2011" upon receipt of exercise price of 5250 and 11250 vestedstock opons respecv ely. Consequent to the said allotment the paid up equity sharecapital of the Company stands increased from Rs. 116336080/- consisng of 11633608equity shares of Rs. 10 each to Rs. 116501080 consisng of 11650108 Equity Shares ofRs. 10 each. Further the Company has not issued shares with differenal vong rights.

MATERIAL CHANGES & COMMITMENTS

In pursuance to Section 134(3)(l) of the act there have been no material changes andcommitments a ecng the financial posion of the Company between the end of the financialyear and date of this report. There has been no change in the nature of business of theCompany.

PARTICULARS OF LOAN GUARANTEES AND INVESTMENTS UNDER SECTION 186

The details of Loans Guarantees and Securies and Investments covered under Section186 of the act are given in financial statements of the Company.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The parcular s of contracts or arrangements with related pares referred to in Section188(1) of act for the financial year 2019-20 in the prescribed Form AOC 2 has beenenclosed with the report as Annexure II.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year the following changes occurred in the composion of the Board ofDirectors:

(i) Mrs. Ranjana Agarwal (DIN: 03340032) Independent Director of the Company wasreappointed by the shareholders of the Company for sectiond term of ve consecuv e yearscommencing from 6 August 2019 upto 5 August 2024.

(ii) Mr. Anil Khanna (DIN: 00012232) Independent Director of the Company wasreappointed by the shareholders of the Company for sectiond term of ve consecu ve yearscommencing from 6 August 2019 upto 5 August 2024.

(iii) Mr. Torsten Buchwald (DIN- 08269386) Independent Director of the Company ceasedto be Director of the Company on 2 November 2019 on expiraon of his term of appointment.

(iv) Mr. Jagesh Kumar Khaitan (DIN: 00026264) Non-Executive Director of the Companytendered resignaon from the directorship of the Company w.e.f. 7 November 2019.

(v) The Board of Directors subject to the approval of shareholders in ensuing generalmeeng reappointed Mr. Yashovardhan Saboo (DIN: 00012158) as Chairman & ManagingDirector w.e.f 1 April 2020 for a period

of three years. The resolu on seeking approval of the shareholders for thereappointment of Mr. Yashovardhan Saboo as Chairman & Managing Director has been setout in the noce convening 40 Annual General Meeng.

Also in accordance with the provisions of the Act and the Arcles of Associaon of theCompany Mr. Vishal Sander Sood (01780814) Nominee Director is liable to rer e by rotaonat the ensuing Annual General Meeng and being eligible has offered himself for re-appointment. The board is of view that all Independent Directors on the board possessintegrity necessary experse and experience for performing their funcons diligently.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have given declaraon that they meet thecriteria of independence as provided under Section 149 (6) of the act and the regulaon16(1) (b) of the SEBI (Lisng Obligaons and Disclosure Requirements) Regulaons 2015 (lisng regulaons). There has been no change in the circumstances a ecng their status asindependent director.

EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-9 for the Financial Year 2019-20 is enclosedwith this report as

Annexure III.

BOARD AND COMMITTEE MEETINGS

The details of number of meetings of the Board and Committees held during the financialyear 2019-20 forms part of the Report on Corporate Governance in terms of Regulaon 34(3)of the lisng regulaons read with schedule V thereof.

BOARD'S COMMITTEES

The Board of Directors of the Company has constut ed the following Committees :

a) Audit Committee

b) Nominaon & Remuneraon Committee

c) Corporate Social Responsibility (CSR) Committee

d) Stakeholders Relaonship Committee

The Committees composion charters and meetings held during the year and a endancethereat are given in the Report of Corporate Governance forming part of this AnnualReport.

DIRECTORS RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)c ) read with 134(5) of the act theBoard con rm and report that:

(a) in the preparaon of the annual accounts the applicable accounng standards had beenfollowed along with proper explanaon relang to material departures;

(b) the directors had selected such accounng policies and applied them consistently andmade judgments and esma tes that are reasonable and prudent so as to give a true and fairview of the state of a airs of the company at the end of the financial year and of theprofit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounng records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for prevenng and detecng fraud and otherirregularies;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operang e ecv ely.

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operang e ecv ely.

CREDIT RATING

ICRA Limited has rea rmed credit rang of the Company as per below details :

Instruments Rating Action
Fund based Cash Credit and Term Loans [ICRA] BBB+ (Stable)
Non-fund based Bank Guarantee Le er of Credit and Buyer's Credit [ICRA] A2
Fund based Working Capital [ICRA] A2
Fixed Deposits MA- (Stable)

MATERIAL ORDERS

In pursuance to Rule 8 (5) (vii) of the Companies (Accounts) Rules 2014 nosignificant or material orders were passed by the Regulators or Courts or Tribunals impacng the going concern status and Company's opera ons in future.

BOARD EVALUATION

The Board carried out performance evaluaon of its own performance its committees andindividual Directors including Independent Directors pursuant to the provisions of the actand lisng regulaons and expressed its sas facon. For this purpose a structured procedurewas adopted a er taking into consideraon the various aspects of the Board's funconing composion of the Board and its various Committees performance of specific dues obligaonsand corporate governance.

In a separate meeng of Independent Directors performance of non-independent Directorsthe Board of Directors as a whole and Chairperson of the Company was evaluated takinginto account the views of Executive Directors and non-execuv e Directors.

NOMINATION & REMUNERATION COMMITTEE POLICY

The Board of Directors has framed a policy which lays down a framework in relaon toremuneraon of Directors Key Managerial Personnel and Senior Management Personnel of theCompany. This policy also lays down criteria for selecon and appointment of Board Members.The detail of this policy is explained in the Report on Corporate Governance which formspart of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

As required under Section 135 of the Companies Act 2013 the Board of Directors hadconstut ed a Corporate Social Responsibility (CSR) Committee the terms of reference ofwhich are provided in Corporate Governance Report. The Company has also formulated a CSRpolicy which is available on www.kddl.com/wp-content/uploads/PDF/KDDLtiCSRtiPolicy.pdf.The Company has spent two (2%) percent of the average net profits of the Company madeduring the three preceding financial years towards CSR activities directly and indirectlythrough KDDL Ethos Foundaon. An annual report on CSR activities as required under theCompanies (Corporate Social Responsibility Policy) Rules 2014 has been appended asannexure IV and forms part of this report.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy and has established the necessary vigilmechanism for Directors and employees in con rmaon with the provisions of section 177(9)of the act and regulaon 22 of the lisng regulaons to report concerns about unethicalbehavior. The policy is available on the Company's website at the link:www.kddl.com/wp-content/uploads/PDF/Whisle%20Blower%20Policy.pdf .

During the year no whistle blower event was reported and mechanism is funconing well.It is a rmed that no person has been denied access to the Audit Committee.

PARTICULARS OF EMPLOYEES

The parcular s required pursuant to Section 197(12) of the Companies Act 2013 andunder rule 5(2) of the Companies (Appointment and Remuneraon of Managerial Personnel)Rules 2014 have been given in annexure V(a) and V(b) of this report.

STATUTORY AUDITORS

The Shareholders of the Company at 39 Annual General Meeng appointed S.R. Batliboi& Co. LLP Chartered Accountants (Firm Registraon No 301003E/E300005) as StatutoryAuditors of the Company for a term of ve years to hold officefrom the conclusion of the39 Annual General Meeng of the Company ll the conclusion of the 44 Annual General Meeng.

The requirement to place the ma er relang to appointment of Auditors for ra c aon bymembers at every AGM has been done away by the Companies (Amendment) Act 2017 with effectfrom 7 May 2018. Accordingly no resoluon is being proposed for ra c aon of appointmentof Statutory Auditors at the ensuring AGM and a note in this regard has been included inthe noce of this AGM.

The Statutory Auditors of the Company have submi ed Auditors' Report on the financialstatements (standalone and consolidated) of the Company for the financial year ended 31March 2020. The report doesn't contain any reservaon quali caon or adverse remark.Informaon referred in the Auditors' Report are self-explanatory and do not call for anyfurther comments.

SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the act and rules made there under theBoard had appointed M/s A. Arora & Co. Praccing Company Secretaries (C.P. No.: 993)to undertake the Secretarial Audit of the Company for financial year 2019-20. TheSecretarial Audit Report in prescribed format MR-3 given by aforesaid Secretarial Auditorsis annexed to this Board Report as Annexure VI and forms an integral part.

The report submi ed by Secretarial Auditor doesn't contain any reservaon quali caon oradverse remark.

Informaon referred in the Auditors' Report are self-explanatory and do not call for anyfurther comments.

The Board of Directors on the recommendaons of the Audit Committee has reappointedM/s A. Arora & Co. (C.P. No. : 993) as Secretarial Auditor of the Company to carry outthe secretarial audit for the financial year 2020-21.

COST AUDITOR

During the year the Company has maintained cost records of its EIGEN unit pertainingto electricals or electronic products and tools in accordance with the provisions ofSection 148 of the act read with the Companies (Cost Records and Audits) Rules 2014. M/sKhushwinder Kumar & Co. Cost Accountants (FRN.: 100123) the Cost Auditor of theCompany conducted the audit of cost records of Company's EIGEN unit for financial yearcommencing from 1 April 2019 to 31 March 2020.

The Board of Directors of the Company on the recommendaons of the Audit Committee hasreappointed M/s Khushwinder Kumar & Co. Cost Accountants (FRN: 100123) as the CostAuditor of the committee to conduct the audit of cost records of its EIGEN unit for thefinancial year 2020-21. The payment of remuneraons to Cost Auditor requires the approval/ra c aon of the members of the Company and necessary resoluons in the regard have beenincorporated in the noce convening 40 AGM of the Company.

REPORTING OF FRAUDS BY AUDITORS

During the year under review auditors have not reported any instance of fraud commi edagainst the Company by its o cers or employees to the Audit Committee or Board underSection 143(12) of the act the details of which need to be disclosed in the Board'sReport.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In accordance with the applicable provisions of the act read with the Investor Educaonand Protecon Fund Authority (Accounng Audit Transfer and Refund) Rules 2016 allunpaid or unclaimed are required to be transferred by the Company to the IEFP establishedby the Central Government a er the compleon of seven years. Further the shares on whichdividend has not been paid or claimed by the shareholders for seven consecuv e years ormore shall also be transferred to the demat account of the IEPF Authority.

Accordingly during the year under review the Company transferred the unclaimed andunpaid dividend amounng to Rs. 420592/- to IEPF. Also 62911 equity shares on whichdivided were unclaimed for seven consecuv e years were transferred as per the requirementsof IEPF rules.

RISK MANAGEMENT POLICY

The risk management framework de nes the risk management approach of the Company andincludes periodic review of such risks and also documentaon mig ang controls and reporngmechanism of such risks.

The details of risks have been given in Management Discussion and Analysis Report.

DEPOSITS

The details of deposits covered under Chapter V of the Companies Act 2013 is givenhereunder:

1. Deposits Accepted/ renewed during the year : Rs. 96174000*
2. Deposits outstanding at the end of the year : Rs. 179430000*
3. Deposits remained unpaid or unclaimed as at the end of the year : Rs. 5035000*
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 : NIL

* Deposits from Directors and corporate have been excluded

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THEFINANCIAL STATEMENTS

A strong internal control culture is an important focus and thrust area in the Company.The Company has comprehensive internal systems controls and policies for all the majorprocesses to ensure the reliability of financial reporng mely feedback on achievement ofoperaonal and strategic goals compliance with policies procedures laws and regulaonssafeguarding of assets and economical and efficient use of resources.

The formalized systems of control facilitate e ecv e compliance as per Lisng Regulaons.The Company also has well documented Standard Operang Procedures (SOPs) for variousprocesses which are periodically reviewed for changes warranted due to business needs.

The Internal Auditors of the Company connuously monitor the e cacy of internalcontrols/ compliance with SOPs with the objecv e of providing to the Audit Committee andthe Board of Directors an independent objecv e and reasonable assurance on the adequacyand e ecv eness of the organizaon's risk management control and governance processes.

The scope and authority of the Internal Audit activity are well defined in the InternalAudit scope and guidelines approved by the Audit Committee. Internal Auditors develop arisk based annual audit plan with inputs from major stake holders and the major focusareas as per previous audit reports.

All significant audit observaons are reviewed periodically and follow-up acons thereonare reported to the Audit Committee. The Audit Committee also meet the Company's StatutoryAuditors and Internal Auditors to ascertain their views on the financial statementsincluding the financial reporng system compliance to accounng policies and proceduresthe adequacy and e ecv eness of the internal controls and systems followed by the company.

The top and senior management of the Company also assesses opportunies for improvementin business processes systems and controls provides recommendaons designed to add valueto the organizaon and follows up on the implementaon of correcv e acons and improvementsin business processes.

The senior management of the Company meets periodically to assess the performance ofthe each business segment and key funcons of the Company and areas for improvement ofperformance / controls are iden ed and reviewed on connuous basis.

DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

During the year eligible employees of the Company have exercised 16500 stock opons atan exercise price of Rs. 120 per stock opon upon vesng. The ESOP scheme is in compliancewith SEBI (Share Based Employee Benefits) Regulaons 2014. The details are available onthe Company's website: www.kddl.com

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

The informaon required under section 134(3)(m) of the Companies Act 2013 read withrule 3 of the Companies (Accounts) Rules 2014 relang to "Conservaon of EnergyTechnology Absorpon and Foreign Exchange Earnings and Outgo" is given in the AnnexureVII forming an integral part of this Report.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITION& REDRESSAL) ACT 2013

Your Company is fully commi ed to uphold and maintain the dignity of women working inthe Company. Pursuant to the provisions of Section 21 of the Sexual Harassment of Women atthe Workplace (Prevenon Prohibion Redressal) Act 2013 the Company formulated an An-Sexual Harassment policy. All employees (permanent contractual temporary and trainees) arecovered under this policy. An Internal Complaints Committee (ICC) was set up which isresponsible for redressal of complaints related to sexual harassment at the workplace.During the year under review the Company has not received any complaint pertaining tosexual harassment and hence no complaint is outstanding as on 31 March 2020.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed Report on Management Discussion and Analysis pursuant to the lisngregulaon is annexed to this report as Annexure VIII.

CORPORATE GOVERNANCE REPORT

A Report on Corporate Governance Report pursuant to SEBI (LODR) Regulaons 2015 isannexed to this report as Annexure IX

CASH FLOW STATEMENT

In accordance with the provisions of regulaon 34(2) of the lis ng r egulaons the CashFlow St atement for the year ended on 31 March 2020 forms an integral part of theFinancial Statements.

LISTING OF SHARES

Your Company's shares are listed at BSE Limited and Naonal Stock Exchange of IndiaLimited and the lisng fees for the year 2019-20 has been duly paid.

PERSONNEL

Your Directors place on record their appreciaon for the significant contribuon made byall the employees who through their competence hard work solidarity and co-operaonhave enabled the Company to perform be er.

TRADE RELATIONS

The Board wishes to place on record its appreciaon for the support and co-operaon thatthe Company received from its suppliers distributors retailers and other associates. TheCompany has always looked upon them as partners in its progress and has happily sharedwith them rewards of growth. It will be Company's endeavor to build and nurture stronglinks based on mutuality respect and co-operaon with each other and consistent withcustomer interest.

ACKNOWLEDGEMENTS

Your Directors take this opportunity to thank all the investors clients vendorsbanks regulatory and government authories for their connued support.

Form No. MGT-9

EXTRACT OF ANNUAL RETURN

as on the financial year ended on 31 March 2020

[Pursuant to section 92(3) of the Companies Act 2013 and rule 12(1) of the

Companies (Management and Administraon) Rules 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN :- L33302HP1981PLC008123

ii) Registraon Da te :- 8 January 1981

iii) Name of the Company :- KDDL Limited

iv) Category / Sub-Category of the Company : - Public Company(Limited by Shares)

v) Address of the Registered officeand contact details :- Plot no. 3 Sector IIIParwanoo 173 220 (Himachal Pradesh) Telephone no.: 0172-2548223/24 Fax no.: 0172-2548302

vi) Whether listed company :- Yes

vii) Name Address and Contact details of Registrar and Transfer Agent if any:-

KFin Technologies Private Limited Selenium Tower B Plot 31-32 FinancialDistrict Nanakramguda Gachibowli Hyderabad 500 032 Phone No: 040-67161517 Website:www.k ntech.com

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

All the business activities c ontribung 10% or mor e of the total turnover of thecompany shall be stated:-

1 Watch Dials & watch hands 26521 71.41
2. Components & Press tools 26101 & 225933 23.83

 

Name and address of the Company CIN/GLN Holding/Subsidiar y/Associate % of shares held Applicable section
1 Mahen Distribuon Limit ed U93000CH2009PLC031625 Subsidiary Company 98.72% 2(87)(ii)
2 Ethos Limited U52300HP2007PLC030800 Subsidiary Company 75.56% 2(87)(ii)
3 Pylania SA -- Subsidiary Company 85% 2(87)(ii)
4 Kamla Internaonal Holding S A -- Subsidiary Company 100% 2(87)(ii)
5 Satva Jewellery and Design Limited U36911CH2004PLC027767 Subsidiary Company 100% (2)(87)(ii)
6 Kamla Tesio Dials Limited U33309CH1996PLC018732 Associate Company 30% (2)(6)
7 Esma A G - Subsidiary Company 95.50% 2(87)(ii)
8 Cognion Digit al LLP AAL-2438 Subsidiary Company 73.55% 2(87)(ii)

IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

i) Category-wise Share Holding

NO. OF SHARES HELD AT THE BEGINNING OF THE YEAR 31/03/2019

NO. OF SHARES HELD AT THE END OF THE YEAR 31/03/2020

CATE GORY CODE CATEGORY OF SHAREHOLDER DEMAT PHYSICAL TOTAL % OF TOTAL SHARES DEMAT PHYSICAL TOTAL % OF TOTAL SHARES
(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX) (X)
(A) PROMOTER AND PROMOTER
GROUP
(1) INDIAN
(a) Individual /HUF Central Government/State 4892866 0 4892866 42.06 4908624 0 4908624 42.13
(b) Government(s) 0 0 0 0.00 0 0 0 0.00
(c) Bodies Corporate 32406 0 32406 0.28 29206 0 29206 0.25
(d) Financial Instuons / Bank s 0 0 0 0.00 0 0 0 0.00
(e) Others 0 0 0 0.00 0 0 0 0.00
Sub-Total A(1) : 4925272 0 4925272 42.34 4937830 0 4937830 42.38
(2) FOREIGN
(a) Individuals (NRIs/Foreign Individuals) 0 0 0 0.00 0 0 0 0.00
(b) Bodies Corporate 324150 0 324150 2.79 324150 0 324150 2.78
(c) Instuons 0 0 0 0.00 0 0 0 0.00
(d) Quali ed Foreign Investor 0 0 0 0.00 0 0 0 0.00
(e) Others 0 0 0 0.00 0 0 0 0.00
Sub-Total A(2) : 324150 0 324150 2.79 324150 0 324150 2.78
Total A=A(1)+A(2) 5249422 5249422 45.12 5261980 0 5261980 45.17
(B) PUBLIC SHAREHOLDING
(1) INSTITUTIONS
(a) Mutual Funds 0 2900 2900 0.02 0 0 0 0
(b) Alternate Investment Funds 303903 0 303903 2.61 347270 0 347270 2.98
(c) Financial Instuons /Bank s Central Government / State 0 50 50 0.01 66 50 116 0.00
(d) Government(s) 0 0 0 0.00 0 0 0 0.00
(e) Venture Capital Funds 0 0 0 0.00 0 0 0 0.00
(f) Insurance Companies 0 0 0 0.00 0 0 0 0.00
(g) Foreign por olio Investors Foreign Venture Capital 3064798 0 3064798 26.34 3101694 0 3101694 26.62
(h) Investors 0 0 0 0.00 0 0 0 0.00
( i ) Quali ed Foreign Investor 0 0 0 0.00 0 0 0 0.00
(j) Others 0 0 0 0.00 0 0 0 0.00
Sub-Total B(1) : 3368701 2950 3371651 28.98 3449030 50 3449080 29.61
(2) NON-INSTITUTIONS
(a) Bodies Corporate 299708 36668 336376 2.89 262933 35251 298184 2.56
(b) Individuals
(i) Individuals holding nominal share capital upto Rs.2 lakhs 1536338 255236 1791574 13.13 1465432 190912 1656344 14.22
(ii) Individuals holding nominal share capital in excess of Rs.2 lakhs 769649 0 769649 6.62 800109 0 800109 6.87
(c) Others
CLEARING MEMBERS 5537 0 5537 0.05 5331 0 5331 0.05
IEPF 0 0 0 0.00 58261 0 58261 0.50
NBFC 2500 0 2500 0.02 0 0 0 0.00
NON RESIDENT INDIANS 80504 50 80554 0.69 92887 0 92887 0.80
NRI NON-REPATRIATION 26345 0 26345 0.23 27932 0 27932 0.24
(d) Quali ed Foreign Investor 0 0 0 0.00 0 0 0 0
Sub-Total B(2) : 2720581 291954 3012535 25.90 2712885 226163 2939048 25.23
Total B=B(1)+B(2) : 6089282 294904 6384186 54.88 6161915 226213 6388128 54.83
Total (A+B) : 11338704 294904 11633608 100.00 11423895 226213 11650108 100.00
(C)Shares held by custodians against which 0 0 0 0 0 0 0 0
Depository Receipts have been issued 0 0 0 0 0 0 0 0
(1)Promoter and Promoter Group 0 0 0 0 0 0 0 0
(2) Public 0 0 0 0 0 0 0 0
GRAND TOTAL (A+B+C) : 11338704 294904 11633608 100.00 11423895 226213 11650108 100.00

ii) Shareholding of Promoters

Shareholder's Name

Shareholding at the beginning of the year

Shareholding at the end of the year

No. of shares % of total shares of the Company % of shares pledged/ encumbered to total shares No. of shares % of total shares of the Company % of shares pledged/en cumbered to total shares
1 R.K. Saboo (HUF) 69820 0.60 69820 0.60
2 R.K. Saboo (HUF) 30800 0.26 30800 0.26
3 Yashovardhan Saboo (HUF) 48752 0.42 48752 0.42
4 R.K. Saboo 1848340 15.89 1733672 14.88
5 Yashovardhan Saboo 1508513 12.97 23.86 1290039 11.07 27.91
6 Usha Devi Saboo 451180 3.88 451180 3.87
7 Anuradha Saboo 436857 3.76 436857 3.75
8 Pranav Shankar Saboo 331951 2.85 680851 5.84
9 Satvika Saboo 135728 1.17 135728 1.17
10 Asha Devi Saboo 30925 0.27 30925 0.27
11 Vardhan Properes & Investment Limited 9001 0.08 9951 0.09
12 Dream Digital Technology Limited 23405 0.20 19255 0.17
13 Swades Capital LLC 324150 2.79 324150 2.78
Total 5249422 45.12 5261980 45.17

iii) Change in Promoters' Shareholding (please specify if there is no change)

Shareholder Name

Shareholding at the beginning

Cumulative Shareholding during the year

No. of Shares

% of share capital

No. of Shares % of share capital
1 R.K. Saboo (HUF)
At the beginning of the year 69820 0.60 69820 0.60
Increase/Decrease No Change
At the end of the year 69820 0.60 69820 0.60
2 R.K. Saboo (HUF)
At the beginning of the year 30800 0.26 30800 0.26
Increase/Decrease No Change
At the end of the year 30800 0.26 30800 0.26
3 Yashovardhan Saboo (HUF)
At the beginning of the year 48752 0.42 48752 0.42
Increase/Decrease No Change
At the end of the year 48752 0.42 48752 0.42
4 R.K. Saboo
At the beginning of the year 1848340 15.89 1848340 15.89
Increase/Decrease 06/09/2019 (116300) 1.00 1733672 14.88
14/03/2020 1632 0.01
At the end of the year 1733672 14.88 1733672 14.88
5 Yashovardhan Saboo
At the beginning of the year 1508513 12.97 1508513 12.97
Increase/Decrease 06/09/2019 (232600) 2.00 1290039 11.07
12/03/2020 to 18/03/2020 14126 0.12
At the end of the year 1290039 11.07 1290039 11.07
6 Usha Devi Saboo
At the beginning of the year 451180 3.88 451180 3.88
Increase/Decrease No Change
At the end of the year 451180 3.88 451180 3.88
7 Anuradha Saboo
At the beginning of the year 436857 3.76 436857 3.76
Increase/Decrease No Change
At the end of the year 436857 3.75 436857 3.75
8 Pranav Shankar Saboo
At the beginning of the year 331951 2.85 331951 2.85
Increase/Decrease
06/09/2019 348900 3.00 680851 5.85
At the end of the year 680851 5.84 680851 5.84
9 Satvika Saboo
At the beginning of the year 135728 1.17 135728 1.17
Increase/Decrease No Change
At the end of the year 135728 1.17 135728 1.17
10 Asha Devi Saboo
At the beginning of the year 30925 0.27 30925 0.27
Increase/Decrease No Change
At the end of the year 30925 0.27 30925 0.27
11 Vardhan Properes & Investment Limited
At the beginning of the year 9001 0.08 9001 0.08
Increase/Decrease 11/03/2020 950 0.00 9951 0.08
At the end of the year 9951 0.09 9951 0.09
12 Dream Digital Technology Limited
At the beginning of the year 23405 0.20 23405 0.20
Increase/Decrease 19/08/2019 (1000)
20/08/2019 (2150) 0.03 19255 0.17
24/06/2019 (1)
28/06/2019 (999)
At the end of the year 19255 0.17 19255 0.17
13 Swades Capital LLC
At the beginning of the year 324150 2.79 324150 2.78
Increase/Decrease No Change
At the end of the year 324150 2.78 324150 2.78

iv) Shareholding Pattern of top ten Shareholders (other than Directors Promoters andHolders of GDRs and ADRs):

Shareholding at the beginning of the Year

Cumulative Shareholding during the Year

Sr. no Name of the Share Holder No of Shares % of total shares of the company Date Increase/Decrease in share holding Reason No of Shares % of total shares of the company
1 SAIF INDIA V FII HOLDINGS LIMITED 1008400 8.67 31/03/2019 1008400 8.66
31/03/2020 1008400 8.66
2 SAIF PARTNERS INDIA V LIMITED 754716 6.49 31/03/2019 754716 6.49
31/03/2020 754716 6.48
3 ASHA MUKUL AGRAWAL 425000 3.65 31/03/2019 425000 3.65
31/03/2020 425000 3.65
4 KITARA INDIA MICRO CAP GROWTH 351950 3.03 31/03/2019 351950 3.03
FUND 26/04/2019 - 1500 Sale 350450 3.01
31/03/2020 350450 3.01
5 JUPITER INDIA FUND 315164 2.71 31/03/2019 315164 2.71
16/08/2019 -9657 Sale 324821 2.79
23/08/2019 -5612 Sale 330433 2.84
06/09/2019 -1193 Sale 331626 2.85
13/09/2019 -7974

Sale

339600 2.92

27/09/2019

-589

Sale

340189 2.92

11/10/2019

-4360

Sale

344549 2.96
-3425 347974 2.99

18/10/2019

Sale

347974 2.99

31/03/2020

6 PARTNER REINSURANCE EUROPE SE- 308559 2.65 31/03/2019 308559 2.65
ALCHEMY CAPITAL 31/03/2020 308559 2.65
7 ALCHEMY LEADERS OF TOMORROW 268050 2.30 31/03/2019 268050 2.30
21/06/2019 -1950 Sale 270000 2.32
12/07/2019 -1457 Sale 271457 2.33
16/08/2019 -16543 Sale 288000 2.48
08/11/2019 -1250 Sale 289250 2.49
07/02/2020 -1260 Sale 290510 2.50
31/03/2020 290510 2.49
8 UNIVERSAL GOLDEN FUND 175120 1.51 31/03/2019 175120 1.51
31/03/2020 175120 1.50
9 NALINI NAROTAM SEKHSARIA 97000 0.83 31/03/2019 97000 0.83
31/03/2020 97000 0.83
10 JUPITER SOUTH ASIA INV. CO. LTD- SO 78298 0.67 31/03/2019 78298 0.67
16/08/2019 1417 Buy 79715 0.69
23/08/2019 824 Buy 80539 0.69
06/09/2019 175 Buy 80714 0.69
13/09/2019 1170 Buy 81884 0.70
31/03/2020 81884 0.70

(v) Shareholding of Directors and Key Managerial Personnel:

For each of the Directors and Key Managerial Personnel Shareholding

Cumulative shareholding during the year

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company
At the beginning of the year
A Mr. Yashovardhan Saboo (Individually and through HUF) 1557265 13.39 1557265 13.39
B Mr. Anil Khanna 2100 0.01 2100 0.01
C Mr. Jagesh Khaitan* 466 0.00 466 0.00
D Mr. Sanjeev Kumar Masown 1956 0.01 1956 0.01
E Mr. Sanjiv Sachar 1400 0.01 1400 0.01

Date wise Increase/Decrease in Promoter shareholding during the year specifying thereasons for increase/decrease (e.g. allotment/transfer/bonus/sweat equity etc.): Mr.Yashovardhan Saboo purchased 14126 Equity Shares of Rs. 10 each from 12 March 2019 to 18March 2019 through market. He also transferred 232600 Equity Shares of Rs. 10 Lakhsthrough (Inter-se-Transfer) to his son on 6 September 2019.

Mr. Sanjeev Kumar Masown Got 3000 Shares upon exercise of 3000 Stock opons on 6November 2019. He also purchased 181 shares from market.

*ceased to be Director w.e.f. 7 November 2019

At the end of the year
A Mr. Yashovardhan Saboo (Individually and through HUF) 1338791 11.49 1338791 11.49
B Mr. Anil Khanna 2100 0.01 2100 0.01
C Mr. Sanjeev Kumar Masown 5137 0.04 5137 0.04
D Mr. Sanjiv Sachar 1400 0.01 1400 0.01

V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding/accrued but not due forpayment

Particulars Secured Loans Deposits Total Indebtedness
Indebtedness as at the beginningof the Financial Year 1.4.2019
1 Principal Amount 411604709 156986000 568590709
2 Interest Due but not paid - - -
3 Interest accrued but not due

1731489

15365889 17097378
Total of (1+2+3) 413336198 172351889 585688087
Change in indebtedness during the financial year
Addion 283102000 134243000 417345000
Reducon 110454116 57823000 168277116
Net Change 172647884 76420000 249067884
Indebtedness as at the end of the Financial Year 31.3.2020
1 Principal Amount 584252593 233406000 817658593
2 Interest Due but not paid - - -
3 Interest accrued but not due 3442753 17469653 20912406
Total of (1+2+3) 587695346 250875653 838570999

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Remuneration to Managing Director Whole-time Directors and/or Manager:

(Amt. in Rs.)

Name of MD/WTD/Manager

Sl. No. Particulars of the Remuneration Mr. Yashovardhan Saboo Mr. Sanjeev Kumar Masown Total Amount in Rs.
Gross Salary
1. Salary as per provisions contained in
(a) section 17(1) of the Income-tax Act 1961 13712000 9046675 22758675
(b) Value of perquisites u/s (17(2) of Income Tax Act 1961 4064085 201485 4265570
(c) Profits in lieu of salary under section 17(3) Income-tax of the Income Tax Act 1961
2 Stock Opon 655800 655800
3 Sweat Equity
4 Commission
(a) as % of pro t
(b) Others specify
5 Others please specify
Total (A) 17776085 9903960 27680045
Overall Ceilings As per Act As per Act As per Act

B. Remuneration to Other Directors:

(Amt. in Rs.)

Sl. No. Particulars of the Remuneration

Name of Directors

Total Amount
Mr. J.V.Saboo Mr. Sanjiv Sachar Mr. Anil Khanna Mr. Jagesh Khaitan Mrs. Ranjana Agarwal Mr. Praveen Gupta Mr. Torsten Buchwald
1 Independent Directors Fees for a ending board/committee meetings 350000 490000 520000 480000 60000 1900000
Commission
Others please specify
Total (1) 350000 490000 520000 480000 60000 1900000
2 Other Non Executive Directors Fees for a ending board/committee meetings 120000 240000 360000
Commission -
Others please specify -
Total (2) 120000 240000 - - - 360000
Total (B) = 1 + 2 120000 350000 490000 240000 520000 480000 60000 2260000
Total Managerial 120000 350000 490000 240000 520000 480000 60000 2260000
Remuneration

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

(Amt. in Rs.)

Sl. No. Particulars of the Remuneration

Key Managerial Personnel

Company Secretary WTD-CUM-CFO Total
1 Gross Salary 2196362 9640675 11243037
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act 1961
(b) Value of perquisites u/s 17(2) Income Tax Act 1961 15000 201485 216485
(c) Profits in lieu of salary under section17(3) Income-tax Act 1961 Nil Nil Nil
2 Stock Opon

Nil

655800

655800
3 Sweat Equity

Nil

Nil Nil
4 Commission Nil Nil Nil
a) as % of pro t Nil Nil Nil
b) Others specify Nil Nil Nil
5 Others please specify Nil Nil Nil
Total 2211362 9903960 12115322

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: (NOT APPLICABLE)

Type Section of the Companies Act Brief Description Details of penalty/punishment/ compounding fees imposed Authority {RD/NCLT/ Court} Appeal made if any (give details
A. COMPANY
Penalty --NIL--
Punishment
Compounding
B. DIRECTORS
Penalty --nil--
Punishment
Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty --nil--
Punishment
Compounding

.