DIRECTORS' REPORT - 2023-2024
To The Members,
Your Director are pleased to present the 53rd (Fifty Third) Annual Report of
Kinetic Engineering Limited (KEL) along with the Audited Financial Statements (Standalone
as well as Consolidated) for the financial year ended 31st March, 2024. This
Board's Report is prepared based on the standalone financial statements of the Company and
presents the key highlights of performance of subsidiary and their contribution to the
overall performance of the Company during the year under review.
1. FINANCIAL SUMMARY AND HIGHLIGHTS
|
|
(INR in Lakhs) |
| Particulars |
31st March, 2024 |
31st March, 2023 |
| Total Revenue |
15,183.45 |
13,750.93 |
| Profit/(Loss) before Interest, Depreciation, Tax and Other Amortizations
("EBIDTA") |
1,708.88 |
1,599.38 |
| Less : Depreciation and Amortization Expenses |
642.09 |
647.62 |
| Finance Cost |
545.28 |
638.69 |
| Tax Expenses - Net |
- |
- |
| Profit/(Loss) for the year |
521.51 |
313.07 |
| Other Comprehensive Income |
(4.22) |
(5.98) |
| Total comprehensive income/(loss) for the year |
517.29 |
307.09 |
During the financial year, your Company has achieved net profit of Rs. 521.51 lakhs, a
66.58% jump over the previous year's profit. It also achieved revenue growth of 10.42% at
Rs. 151.83 cr., compared to last year's revenue of Rs. 137.50 cr.
Your company continues to pursue its strategy of adding new strategic customers &
programs and exports led growth while investing in cost saving initiatives and improved
profitability.
2. AMOUNT, IF ANY, WHICH THE BOARD PROPOSES TO CARRY TO ANY RESERVES
Your Directors do not propose to transfer any amounts to the general reserves of the
Company, instead have recommended to retain the entire profits for the financial year
ended 31st March, 2024 in the profit and loss account.
3. DIVIDEND
Considering the future business expansion & growth of the Company Board does not
recommend any dividend for the Financial Year 2023-24. Your Company's policy on Dividend
Distribution is available at www.kineticindia.com/policies under Investor Relations
Section.
4. STATE OF THE COMPANY'S AFFAIRS
The performance of businesses is detailed out in the Management Discussion and Analysis
Report, which forms part of the Annual Report.
5. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE
COMPANY, HAVING OCCURRED SINCE THE END OF THE YEAR AND TILL THE DATE OF THE REPORT
There were no material changes and commitments affecting the financial position of the
Company between the end of the financial year and the date of this report.
6. CHANGE IN THE NATURE OF BUSINESS
The Company has not changed its nature of business during the financial year ended 31st
March, 2024.
7. CAPITAL AND DEBT STRUCTURE Authorized share capital
There was no change in authorized share capital of the Company. During the year, the
company has reclassified Authorised Share Capital subsequently alter the Memorandum of
Association. The Authorized share capital of the Company at year end Rs. 1,95,90,82,530/-
comprises of Equity and Preference shares.
Subscribed and Paid-up share capital
Issued, subscribed and paid-up share capital of the Company at the year end is Rs.
42,75,67,260/- comprises of Equity and Preference shares.
During the year the Board, Issue and allotted 22,85,000 Equity Shares of Rs. 10/- each
at an issue price of Rs. 120/- per share including a premium of Rs. 110/- per share
aggregating to Rs. 27,42,00,000/- and 80,000 8.00% Optionally Convertible Cumulative
Preference Shares (OCCPS) at Rs. 120/- per share aggregating to Rs. 96,00,000/- on
Preferential Basis to the Promoters of the company.
8. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the Section 124 applicable provisions of the Companies Act, 2013, read with
the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and
Refund) Rules, 2016 ("IEPF Rules"), all the unpaid or unclaimed dividends are
required to be transferred to the IEPF established by the Central Government, upon
completion of seven (7) years. Further, according to the Investor Education &
Protection Fund ("IEPF") Rules, the shares in respect of which dividend has not
been paid or claimed by the Shareholders for seven (7) consecutive years or more shall
also be transferred to the demat account created by the IEPF
Authority. Your Company does not have any unpaid or unclaimed dividend which is
required to be transferred to the IEPF as on the date of this Report.
9. MANAGEMENT
Directors and Key Managerial Personnel
As on 31st March 2024, our Board comprised of Ten members, headed by a Non-
Executive Chairman, One Executive Director and Eight Non-Executive Directors, where in Six
are Independent Directors. Two out of Ten members are women directors. The composition of
Board is in accordance with the requirements of Listing Regulations 2015 & Companies
Act, 2013.
Changes in Directors and Key Managerial Personnel during year
Mr. Dattatray Parvati Navale and Mr. Achal Shirish Kotecha appointed as an Independent
Director w.e.f. 11th August, 2023. Mr. Shirish Ratanlal Kotecha & Mr.
Ramesh Jankiram Kabra has completed their second and final term as an Independent Director
in Company and consequently ceased to be a Director of the Company w.e.f. closing hours of
31st March, 2024.
Further Mr. Rohit Prakash Bafana has completed his term as an Independent Director in
Company and consequently ceased to be a Director of the Company with effect from 13th
February, 2024. The board has appointed him as an Independent Director w.e.f. 30th
May, 2024 and subsequently members approved his appointment through postal ballot dated 30th
June, 2024.
In the last AGM held on 29th September, 2023 shareholders approved the
reappointment of Mr. Arun Hastimal Firodia as a Non-Executive Director. Further Mrs.
Jayashree Arun Firodia, Director of the Company, who attains 81 years' of age and retires
by rotation, being eligible, offers herself for re-appointment at the ensuing Annual
General Meeting.
During the year under review, there is no change occurred in the Key Managerial
Personnel of the Company. Declaration given by Independent Directors
The independent directors have submitted a declaration of independence, stating that
they meet the criteria of independence as provided under section 149(6) of the Companies
Act, as amended, and regulation 16 of the SEBI Listing Regulations.
The independent directors have also confirmed compliance with the provisions of rule 6
of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended,
relating to inclusion of their name in the databank of independent directors. The Board
took on record the declaration and confirmation submitted by the independent directors
regarding them meeting the prescribed criteria of independence, after undertaking due
assessment of the veracity of the same in terms of the requirements of regulation 25 of
the SEBI Listing Regulations.
Lead Independent Director
Mr. Jinendra Hirachand Munot acts as the "Lead Independent Director" and
co-ordinates with the company senior management on behalf of the other independent
directors for various information flow and advising on improvement areas, among others.
Familiarization Program for Independent Directors
The Company has in place a familiarization program for its Independent Directors. The
objective of the program is to familiarize Independent Directors on our Board with the
business of the Company, industry in which the Company operates, business model,
challenges etc. through various programs which includes interaction with subject matter
experts within the Company, meetings with our functional leads etc. on regular basis.
Statement regarding Opinion of the Board with regard to Integrity, Expertise and
Experience (Including the Proficiency) of the Independent Directors appointed during the
Year
Mr. Dattatray Parvati Navale and Mr. Achal Shirish Kotecha are the independent
Directors of the Company appointed during the year. In the opinion of the Board, there has
been no change in the circumstances which may affect their status as Independent Directors
of the Company and the Board is satisfied of the integrity, expertise and experience
(including proficiency in terms of Section 150(1) of the Act and applicable rules
thereunder) of Independent Directors on the Board.
Board Meetings
The Board met Five (5) times during the financial year 2023-24 viz. 30-May-23,
11-Jul-23, 11-Aug-23, 09-Nov- 23 and 13-Feb-24.
Audit Committee
All the Committee members are Non-Executive Independent Directors. All the Members of
the Committee possess sufficient accounting and financial management knowledge. The
Company Secretary of the Company is the Secretary of the Committees also. The
recommendations of the Audit Committee during the year were accepted by the Board.
Nomination & Remuneration Committee
All the Committee members are Non-Executive Independent Directors. The Company
Secretary of the Company is the Secretary of the Committees also. The recommendations of
the Committee on the director remuneration during the year were accepted by the Board.
Board Diversity and Policy on Director's Appointment and Remuneration
Your Company have always strived for relevant diversity in the Board representing a
healthy mix of gender & experience. The policy on 'Nomination and Remuneration' and
'Board Diversity' adopted by the Board sets out the criteria for determining
qualifications, positive attributes and independence while evaluating a person for
appointment / reappointment as a Director or as KMP, with no discrimination on the grounds
of gender, race or ethnicity, nationality or country of origin.
The detailed Nomination & Remuneration Policy is annexed as Annexure-IV and
forms part of this Report and is also available on the website of the
www.kineticindia.com/policies under Investor Relations Section.
Stakeholders Relationship Committee
The Committee assists the Board and the Company in maintaining healthy relationships
with all stakeholders. All the Committee members are Non-Executive Independent Directors.
The Company Secretary of the Company is the Secretary of the Committees also.
Risk Management Committee
The Company was not covered under the regulation 21 of the Securities & Exchange
Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015.
Hence it's not required to form Risk Management Committee.
Formal Annual Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, 2015,
Independent Directors at their discussion, without the participation of the
Non-Independent Directors and Management, evaluated the Boards' performance, Performance
of the Chairman and other Non-Independent Directors.
The Board subsequently evaluated its own performance, the working of its Committees
(Audit, Nomination and Remuneration and Stakeholders Relationship Committee) and
Independent Directors (without participation of the relevant Director).
The criteria for performance evaluation have been detailed in the Corporate Governance
Report which forms part of the Annual Report.
Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, your Directors, based on the
representations received from the Operating Management, and after due enquiry, confirm
that:
(a) In the preparation of the annual accounts for the Financial Year ended 31st
March, 2024, the applicable accounting standards have been followed along with proper
explanation relating to material departures;
(b) The Directors had in consultation with Statutory Auditors, selected 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 as at 31st March, 2024;
(c) The Directors have 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
irregularities;
(d) The Directors have prepared the annual accounts on a going concern basis;
(e) The Directors have laid down adequate Internal Financial Controls to be followed by
the Company and such Internal Financial Controls were operating effectively during the
Financial Year ended 31st March, 2024;
(f) 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
throughout the Financial Year ended 31st March, 2024.
10. INTERNAL FINANCIAL CONTROLS
The Company has adequate internal control system commensurate with its size and nature
of business for ensuring efficiency of operations, adherence to management policies and
protection of company's assets. The Company's Audit Committee periodically reviews the
internal control systems and compliance with Company's policies, procedures and laws.
11. DISCLOSURES RELATING TO SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES
As of 31st March, 2024, your Company have one subsidiary company i.e.
Kinetic Watts and Volts Limited. The statement under Section 129(3) of the Companies Act,
2013 in respect of the subsidiaries in Form AOC-1 is attached as Annexure III. The
Consolidated Accounts of your Company duly audited by the Statutory Auditors are presented
as part of this Report. Apart from this subsidiary Company does not have any other
subsidiary, associate or a joint venture company.
12. DEPOSITS
During the year under review, your Company had not accepted any deposits within the
meaning of provisions of Chapter V - Acceptance of Deposits by Companies of the Companies
Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.
13. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES
ACT, 2013
Details of Loans, Guarantees and Investments covered under the provisions of Section
186 of the Companies Act, 2013 are given in Note 4 & 5 of Notes to the Financial
Statements.
14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the year under review, your Company has undertaken Related Party Transaction
which are executed in the ordinary course of business and at arm's length basis. As
required under the Listing Regulations, 2015, Related party transactions are placed before
the Audit Committee for approval. At the beginning of the financial year, prior approval
of the Audit Committee is obtained on an omnibus basis for continual transactions. The
corresponding actual transactions then become a subject of review by the Committee at
subsequent meetings.
There has been no materially significant Related Party Transactions during the year
under review, having potential conflict with the interest of the Company. Necessary
disclosures required under the Accounting Standard (AS) have been made in the Notes to the
Financial Statements for the year ended 31st March, 2024.
Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of
the Companies (Accounts) Rules, 2014), the statement containing details of the related
party transaction at the arm's length in the form AOC-2, has been attached to this report
as Annexure-II.
Pursuant to Regulation 23(9) of the Listing Regulations, the Company has filed the half
yearly reports on related party transactions with the stock exchanges on which the shares
of the Company are listed.
The policy on Related Party Transactions as approved by the Board is available on the
Company's website at www.kineticindia.com/policies under Investor Relations Section.
15. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company is not having a net worth of Rs. 500 Crores or more or its turnover does
not exceed Rs. 1000 Crores or more or its net profit does not exceed Rs. 5 Crores or more
and hence, it is not required to frame a CSR policy or spend amount on CSR as per the
provisions of Section 135 of Companies Act, 2013.
16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
The information pertaining to conservation of energy, technology absorption, foreign
exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013
read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished as Annexure I to
this Report.
17. DEVELOPMENT AND IMPLEMENTATION OF A RISK MANAGEMENT POLICY
The Management has put in place adequate and effective system and man power for the
purpose of risk management. To identify the risk associated with the Company well in
advance and implement appropriate mechanism to mitigate the risk is an essence of
business. The management and every employee of the Company is committed to observe the
risk management techniques.
18. MATERIAL ORDERS OF JUDICIAL BODIES /REGULATORS
There are no significant and material orders passed by the Regulators or Courts or
Tribunals which would impact the going concern status of the Company.
19. AUDITORS Statutory Auditor
The Board has approved the appointment of M/s Pawan Jain & Associates (FRN:
0107867W) Chartered Accountants, Pune to hold office for five years until the conclusion
of Annual General Meeting to be held in the calendar year 2027 in accordance with the
provisions of Section 139 of the Companies Act, 2013.
Auditors' Report
There are no qualifications, reservations or adverse remarks made by M/s Pawan Jain
& Associates, Statutory Auditors, in their report for the financial year ended 31st
March, 2024.
Pursuant to the provisions of Section 143(12) of the Companies Act, 2013, the statutory
auditors have not reported any incident of fraud to the Audit Committee during the year
under review.
Secretarial Audit - FY 2023-24
Mr. Dinesh Birla, proprietor of Dinesh Birla and Associates, Practicing Company
Secretaries was appointed by the Board to conduct the audit of the Company's Secretarial
Records in respect of the financial year 2023-24. The Board has taken corrective action
for remarks mentioned in Secretarial Audit report appears as in Annexure - VI.
Pursuant to the provisions of Section 143(12) of the Companies Act, 2013, the
secretarial auditors have not reported any incident of fraud to the Audit Committee during
the year under review.
Secretarial Auditor - FY 2024-25
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed Mr. Dinesh Birla, Practicing Company Secretary (Certificate of Practice No.:
13029) to undertake the Secretarial Audit of the Company for the financial year 2024-25.
Cost Records and Cost Audit
Maintenance of cost records and requirement of cost audit as prescribed under the
provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the
business activities carried out by the Company.
20. COMPLIANCE WITH SECRETARIAL STANDARD
The Company generally complies with all the applicable Secretarial Standards issued by
the Council of the Institute of Company Secretaries of India.
21. CORPORATE INSOLVENCY RESOLUTION PROCESS
Neither any application was made, nor any proceeding is pending under the Insolvency
and Bankruptcy Code, 2016, against the Company.
During the year the Company has not made any application under the Insolvency and
Bankruptcy Code, 2016 and no proceeding is pending under the Code.
22. EXTRACT OF ANNUAL RETURN:
Pursuant to the provisions of Section 134(3) (a) and Section 92(3) of the Act read with
Rule 12 of the Companies (Management and Administration) Rules, 2014, the draft of the
Annual Return of the Company for the financial year 31st March, 2024 is
uploaded on the website of the Company and can be accessed at www.kineticindia.com under
Investor Relations Section.
23. ONE TIME SETTLEMENT AND VALUATION
During the year the Company has not made any one-time Settlement and Valuation.
24. DISCLOSURES PERTAINING TO THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The Company has in place, the requisite Internal Committee as envisaged in the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. No
complaints on the issues covered by the above Act were received, during the year. During
the year Company conducted multiple training session and programs for stakeholders on the
prevention of sexual harassment at work place.
POSH Policy of the Company is available on the Company's website at
www.kineticindia.com/policies under Investor Relations Section.
25. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT
VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR
During the year no companies come or ceased to be its subsidiaries, joint ventures or
associate companies.
26. REMUNERATION OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) / EMPLOYEES:
The information required under Section 197 read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure-V
and forms part of this Report.
27. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM
Your Company has established a Vigil Mechanism/ Whistle Blower Policy to enable
stakeholders (including Directors and employees) to report unethical behaviour, actual or
suspected fraud or violation of the Company's Code of Conduct. The Policy provides
adequate safeguards against victimization of Director(s)/employee(s) and direct access to
the Chairman of the Audit Committee in exceptional cases. The Protected Disclosures, if
any reported under this Policy will be appropriately and expeditiously investigated by the
Chairman.
Your Company hereby affirms that no Director/Employee have been denied access to the
Chairman of the Audit Committee and that no complaints were received during the year. The
Policy can be accessed from the company's website at www.kineticindia.com/policies under
Investor Relations Section.
28. OTHER DISCLOSURES
Consolidated Financial Statements: The Consolidated financial statements of the
Company and its subsidiaries for FY 2023-24 are prepared in compliance with the applicable
provisions of the Companies Act, 2013 and as stipulated under Regulation 33 of the Listing
Regulations as well as in accordance with the Indian Accounting Standards notified under
the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated
financial statements together with the Independent Auditor's Report thereon forms part of
this Annual Report.
Internal Audit: The Company has the Internal Audit department which provides an
appropriate level of assurance on the design and effectiveness of internal controls, its
compliance with operating systems and policies of the Company at all locations. Based on
the internal audit report, process owners undertake corrective actions in their respective
areas and thereby strengthen the controls. Significant audit observations and corrective
measures thereon are presented to the Audit Committee.
Credit Rating of Securities: CRISIL Ratings has assigned its 'CRISIL BB+/Stable'
rating to the bank facilities of Kinetic Engineering Limited (KEL).
| Total Bank Loan Facilities Rated |
Rs.25 Crore |
| Long Term Rating |
CRISIL BB+/Stable (Assigned) |
Industrial Relations: During the year under review, the industrial relations
remained cordial.
Accounting treatment in preparation of financial statements: The financial
statements of the Company have been prepared in accordance with Indian Accounting Standard
("Ind AS") notified under the Companies (Indian Accounting Standards) Rules,
2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 read with Section
133 of the Companies Act, 2013.
Listing Fees: Your Company has paid requisite annual listing fees to BSE Limited
(BSE) where its securities are listed.
Return on Equity: Return on Equity of the Company for last three years -
| Year |
% of ROE (Standalone Basis) |
| 2023-24 |
11.76 |
| 2022-23 |
15.10 |
| 2021-22 |
13.31 |
Details of revision of financial statement or the Report: There was no revision in
the Financial Statements.
Director Knowledge Session: During the year under the review Company conducted
session on topic likes future economic outlook in automobile industry, legal &
regulatory updates, skill & knowledge improvements etc. Majority directors attained
these sessions.
29. ADDITIONAL DISCLOSURES UNDER LISTING REGULATIONS
Statement of deviation or variation: There was no deviation or variation in
connection with certain terms of preferential issue, OCCPS, etc.
Management Discussion and Analysis Report: Management Discussion and Analysis as
required under Schedule V of the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations") is provided separately in the Annual Report.
Corporate Governance Report: Your Directors are pleased to report that your Company
strives to ensure that best corporate governance practices are identified, adopted and
consistently followed. Your Company believes that good governance is the basis for
sustainable growth of the business and for enhancement of stakeholder's value. Pursuant to
Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
a separate Section titled Report on Corporate Governance has been included in this
Integrated Annual Report and the certificate of M/s. Pawan Jain & Associates.,
Chartered Accountants, Pune the Statutory Auditors of the Company certifying compliance
with the conditions of Corporate Governance as stipulated under relevant Regulations of
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is obtained and
annexed with the report on Corporate Governance.
Suspension of Trading: The Company's securities were not suspended for trading
during the year.
30. ACKNOWLEDGEMENT
The Directors' express their sincere thanks to Central & State Governments,
Financial Institutions, banks who have extended their support in form of Credit
Facilities, suppliers and stakeholders for the support extended to the Company and also
wish to place on record their appreciation of the dedicated services rendered by the
employees of the Company.
On behalf of the Board of Directors
For Kinetic Engineering Limited
S/d
Arun Hastimal Firodia
Chairman
(DIN: 00057324)
Date: 14th August, 2024
Place: Pune
|