Kirloskar Electric Company Ltd Directors Report.

Dear SharehoCders,

The Directors present the 75th Annual Report of Kirloskar Electric Company Limited (hereinafter referred as "the Company" or "KECL") along with the audited financial statement for the financial year ended March 31,2022. The consolidated performances of the Company and its subsidiaries have been referred to wherever required.

Review of performance and state of Companys affairs:

During the year under report, your Company achieved a total turnover of Rs 44,239/- Lakhs (previous year Rs 28,119/- Lakhs). The operations have resulted in profit of Rs 3,325/- Lakhs (previous year profit was Rs 2,114/-Lakhs).

The financial summary and highlights are as follows:

(Rs in lakhs)

PARTICULARS Standalone Consolidated
2021-22 2020-21 2021-22 2020-21
Revenue from operations 33,467 27,758 33,467 27,758
Other income (Net) 10,772 361 11,902 770
Total Revenue 44,239 28,119 45,369 28,528
Total Expense 38,423 38,906 38,630 33,339
Profit before Exceptional items 5,816 (10,787) 6,739 (4,811)
Exceptional Items - - - -
Profit / (Loss) before tax 5,816 (10,787) 6,739 (4,811)
Tax Expense - - - -
Profit / (Loss) after tax 5,816 (10,787) 6,739 (4,811)
Total other comprehensive income (2,491) 12,901 (2,491) 12,901
Total comprehensive income for the period 3,325 2,114 4,248 8,090

Note: The above figures are extracted from the audited standalone and consolidated financial statements as per Indian Accounting Standards (Ind AS).

COVID-19:

The pandemic continued to be a global challenge, creating disruption across the country. During the first quarter of FY 2021-22, the delta variant had stern impact, as this variant turned out to be more tedious among other variants. The Government had imposed stringent norms and guidelines to curb the spread of Covid variant across the Country.

The third wave i.e., omicron variant seemed to spread much faster than the delta variant, however its impact was placid. None of the factories were shut down during the period under review due to Covid and were operational throughout the year. Multiple response measures have been implemented to ensure our sites are COVID-19 safe working environments. There has been extensive engagement with labour unions and several steps and welfare measures have been taken to ensure safety and well-being of employees. The Company, being responsible and resilient observed all the government advisories/guidelines from time to time thoroughly and in good faith.

At the same time, given the overall uncertainty in business conditions, raw material prices are exhibiting increased volatility. They would need to be critically monitored to cushion the impact on profitability. Standing by its core commitment, the Company is navigating through these unprecedented times by building stronger and deeper relationships with customers and its vendors.

Dividend:

In view of the accumulated losses, the Board of Directors of your Company has not recommended any Dividend for the year under review.

Transfer to Reserves:

In view of the accumulated losses, the Board of Directors of your Company has not transferred any amount to the Reserves for the year under review.

Change in the nature of business:

There was no change in nature of the business of the Company during the financial year ended on March 31,2022.

Share Capital:

As on March 31,2022, the paid up share capital of your Company stood at Rs 66,41,40,710/- divided into 6,64,14,071 Equity Shares of Rs 10/- each.

Disclosure under section 43(a)(ii) of the Companies Act, 2013:

The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

Disclosure under section 54(1)(d) of the Companies Act, 2013:

The Company has not issued any sweat equity shares during the financial year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

Disclosure under section 55(2) & 77 of the Companies Act, 2013:

The Company has not redeemed any shares / debentures during the financial year under review and hence no information as per provisions of Section 55(2) & 77 of the Act read with the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

Disclosure under section 62(1)(b) of the Companies Act, 2013:

The Company has not issued any equity shares under Employees Stock Option Scheme during the financial year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 has been furnished.

Disclosure under section 67(3) of the Companies Act, 2013:

During the financial year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 and hence no information has been furnished.

Transfer to Investor Education and Protection Fund:

As required under the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), during the financial year 2021-22, matured deposits for the financial year 2014-15 amounting to Rs 6,50,000/- (Rupees Six Lakh and Fifty Thousand Only), were transferred to the Investor Education and Protection Fund ("IEPF").

Subsidiaries, associate companies & joint ventures:

The Company has four wholly owned subsidiaries, one step-down subsidiary, one associate Company and one Joint venture.

The Consolidated Financial Statements of the Company and its Subsidiary are prepared in accordance with the applicable accounting standards, issued by the Institute of Chartered Accountants of India, and forms part of this Annual Report.

Neither the Executive Chairman and nor whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries, associate Company.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the reports on the performance and financial position of each of the subsidiary and associate companies have been provided in Form AOC-1 appended to this report.

Fixed deposits:

SL. No. Particulars (Rs in Lakhs)
1. Accepted / renewed during the year Nil
2. Remained unpaid or unclaimed at the end of the year. 32.10*
3. 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:-
• Atthe beginning of the year
• Maximum during the year
• Atthe end of the year N/A
4. Details of deposits which are not in compliance with the requirements of Chapter V of the Act; Nil

*These are deposits which are matured but are unclaimed during the year under review. The Company has taken all possible efforts to contact the FDR Holders by sending them reminders.

The Company also has Rs 42,34,732/- in form of liquid assets as required under Section 73 of the Companies Act, 2013 read with rule 13 of the Companies (Acceptance of Deposits) Amendment Rules, 2018.

Directors and Key Managerial Personnel:

Your Company has a well-diversified Board comprising of Directors having skills, competencies and expertise in various areas to ensure effective corporate governance of the Company.

As on March 31,2022, the Board comprised of 10 (ten) Directors, out of which 6 (Six) were Non-Executive Independent Directors, 2 (two) Non Executive Non Independent Director, 1 (one) among them is a woman Director and 2 (two) Executive Directors.

In accordance with the provisions of section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mrs. Meena Kirloskar (DIN: 00286774), a Non-executive Director being longest in the office, shall retire by rotation and being eligible, has offered herself for re-appointment. The resolution seeking members approval for her appointment forms part of the AGM Notice.

Mr. Ravi Ghai (DIN: 08715119) resigned from the post of Nominee Director with effect from February 09, 2022. The Board has appointed him as Additional Director (Non-Executive) of the Company at its meeting held on July 12, 2022 who shall hold office upto the date of ensuing Annual General Meeting of the Company. The members approval is sought towards appointment of Mr. Ravi Ghai as Non-Executive Independent Director of the Company. Detailed resolutions seeking members approval for his appointment forms part of the AGM Notice.

The Board has appointed Mr. Anand B Hunnur as Additional Director of the Company at its meeting held on July 12, 2022 who shall hold office upto the date of ensuing Annual General Meeting of the Company. Subject to the approval of members, Mr. Anand B Hunnur shall be appointed as Managing Director of the company for a term of three (03) years, w.e.f July 12, 2022.

The Key Managerial Personnel (KMP) of the Company as on March 31, 2022 were Mr. Vijay Kirloskar, Executive Director, Mr. Sanjeev Kumar Shivappa, Director (Finance) & Chief Financial Officer and Executive Director and Ms. K S Swapna Latha, Sr. General Manager (Legal) & Company Secretary.

Ms. K S Swapna Latha, Sr. General Manager (Legal) & Company Secretary has resigned from the position and the Board of Directors has accepted her resignation with effect from April 20, 2022. Subsequently, Mr. Mahabaleshwar Bhat has been appointed as General Manager (Corporate Affairs) & Company Secretary of the company w.e.f July 12, 2022.

During the year under review, the Non-Executive Directors (NEDs) of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them, if applicable, for the purpose of attending Board/ Committee meetings of the Company.

Independent Director proposed to be appointed:

The Board of directors considers that on account of vast knowledge and experience of Mr. Ravi Ghai (DIN: 08715119), his appointment as Non-Executive Independent Director of the Company will be in the best interest of the Company.

Declaration by Independent Directors

In terms of the provisions of Section 149(7) of the Companies Act, 2013, the company has received declarations from all the independent directors stating that they continue to meet the criteria of independence as provided under the provisions of Section 149 (6) of the Companies Act, 2013 read with the Rules made thereunder and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In terms of regulation 25(8) of the Listing Regulations, they have confirmed that they are not aware of any circumstances or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties. Based upon the declarations received from the Independent Directors, the Board of Directors have confirmed that they meet the criteria of independence as mentioned under Regulation 16(1)(b) of the Listing Regulations and that they are independent of the management.

All Independent Directors have affirmed compliance to the code of conduct for independent directors as prescribed in Schedule IV of the Companies Act, 2013 and the Code of Conduct for Directors and senior management personnel formulated by the Company.

All independent directors have registered their names in the Independent Directors Databank. In the opinion of the Board, the independent directors so appointed / re-appointed possess the requisite expertise, experience and proficiency and are of integrity.

Evaluation of Directors, Committees and the Board:

The evaluation process has been explained in the Corporate Governance Report which forms part of the annual report.

Number of meetings of the Board of Directors and its Committees:

The Board of directors met six (06) times during the year under review which was held through Video Conference mode / other audio visual means.

The maximum interval between any two meetings was within the maximum allowed gap pursuant to the Companies Act, 2013 and SEBI Listing Regulations read with the Circulars issued by MCA and SEBI with respect to increase in the gap and extension for holding meetings due to COVID-19 pandemic.

The Board meetings were held on June 29, 2021, August 11,2021, September 21,2021, November 10, 2021, February 09, 2022 and March 11,2022.

The composition and the details of the meetings of the Board and its Committee held during the year are contained in the Corporate Governance Report which forms part of the annual report.

Nomination and Remuneration Policy:

The Nomination and Remuneration Committee is responsible for recommending to the Board, a policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees. The Nomination and Remuneration Policy has been appended to this report as Annexure - I and is also available on the website of the Company at https://kirloskarelectric.com/investors/investors- information/policies.html.

Risk Management Policy:

Your Company has devised and implemented a comprehensive Risk Management Policy which provides for identification, assessment and control of risks that the company would face in the normal course of business and mitigation measures associated with them. The Management identifies and controls risks through a properly defined framework in terms of the aforesaid policy.

The Risk management policy has been appended to this report as Annexure-II.

Managerial remuneration:

The information required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is disclosed in the Annexure - A.

Particulars of employees:

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with rules 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement showing disclosures pertaining to remuneration and also the names and other particulars of the employees drawing remuneration in excess of limits set out in the said rules are provided in the Annexure - A to the Boards Report which forms part of the annual report.

Annual Return:

According to the provisions of Section 134(3)(a), a copy of Annual Return i.e., Form MGT-7 for the year ended March 31,2021 has been placed on the Companys website: https://kirloskarelectric.com/investors/investors-information/financial.html

Directors Responsibility Statement:

We, the Directors of your Company, confirm, to the best of our knowledge and ability that:-

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

(b) we have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit / loss of the Company for that period;

(c) we have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) we have prepared the annual accounts on a going concern basis;

(e) we have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

(f) we have devised proper systems to ensure compliance with the provisions of all applicable laws to the Company and that such systems were adequate and operating effectively.

Particulars of loans, guarantee, investments and securities:

There were no loans and advances, guarantees, investments made or security given to any Body Corporate by the Company during the financial year 2021-22.

Particulars of loans, advances, investments as required under the listing regulations:

The details of related party disclosures with respect to loans, advances, investment at the year end and maximum outstanding amount thereof during the year as required (under part A of Schedule V of the Listing Regulations) have been provided in the notes to the financial statement of Company.

Your directors draw attention of the members to note no. 17 & 36(12) of the standalone financial statements which sets out the details of loan and advance, guarantee or investment.

Particulars of contracts or arrangements with related parties:

The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arms length transactions under third proviso thereto are disclosed in Form No. AOC -2 appended hereto.

All related party transactions that were entered into during the financial year were on an arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015 and the provisions of Section 188 of the Companies Act, 2013 are not attracted.

There were no materially significant Related Party Transactions made by the Company during the year that would have required Shareholder approval as per provision of Companies Act 2013 read with applicable rules and Regulation 23 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015. All related party transactions are placed before the Audit Committee for approval. Prior Omnibus approval of the Audit Committee is obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted along with a statement giving details of all related party transactions is placed before the Audit Committee from time to time.

The Policy on Related Party Transaction is available on the Companys website (URL: https://www.kirloskarelectric.com/images/pdf /investor/policies/Policy-on-related-party-transactions.pdf

Your directors draw attention of the members to note no. 36(12) to the standalone financials statement which sets out the related party disclosures.

Corporate Social Responsibility:

In terms of section 135 of the Companies Act, 2013, the Company has a duly constituted CSR Committee and CSR Policy of the Company wherein the Company is required to spend two percent of the average net profits of the Company for the three immediately preceding financial years. Since none of the Criterias for the applicability of CSR spending are attracted for the Company, there is no obligation for the Company to spend CSR amount for the FY 21-22.

The policy can be accessed at the following URL: https://www.kirloskarelectric.com/investors/investors-information/policies.html

The salient Features of the policy as well as the details with respect to the Committee and the meetings are contained in the Corporate Governance Report which forms part of the annual report.

A responsibility statement of the CSR Committee that the implementation and monitoring of CSR policy is in compliance with CSR objectives and policy of the Company:

The CSR Committee hereby confirms that the implementation and monitoring of CSR policy has been carried out with all reasonable care and diligence and the same is in compliance with the CSR objectives and the policy of the Company. However as explained above the CSR provisions are not applicable to the Company for the FY 21-22 as per the requirements mentioned in the Companies Act, 2013.

Conservation of energy, technology absorption, Research & development and foreign exchange earnings and outgo:

The relevant data pertaining to conservation of energy, technology absorption and other details are given in the Annexure - III, which forms part of this report.

Material Changes affecting the Company:

There have been no material changes and commitments affecting the financial positions of the Company between the end of the financial year and date of this report. There has been no change in the nature of business of the Company.

Significant and material orders passed by the Regulators or Courts:

There were no significant and material orders passed against the Company by the regulators or courts or tribunals during financial year 2021-22 impacting the going concern status and Companys operations in future.

Vigil mechanism for Directors and Employees:

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal procedural course to the directors and employees to report their concerns about any poor or unacceptable practices or any event of misconduct or violation of Companys code of conduct. The purpose of this policy is to provide a framework to secure whistle blowing incidents and to protect the employees who are willing to raise concerns about serious irregularities within the Company. The policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy of Vigil Mechanism is available on the Companys website at https://kirloskarelectric.com/investors/investors-information/policies.html

Statutory audit:

M/s. K N Prabhashankar & Co., (Formerly known as Ashok Kumar, Prabhashankar & Co.,) chartered accountants, (Firm Registration no. AAD-7041) were re-appointed as auditors of the Company to hold office from the conclusion of the 72nd Annual General Meeting until the conclusion of the 77th Annual General Meeting of the Company .

Pursuant to Section 141 of the Act, the Auditors have represented that they are not disqualified and continue to be eligible to act as the Auditor of the Company.

Auditors Report:

The standalone and the consolidated financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act.

The Auditors Report is enclosed with the financial statements in this Report. The Statutory Auditors were present in the last AGM.

ranch audit:

M/s. Sundar and Associates (AF no. 1172), Chartered Accountants, Malaysia, were reappointed as the auditors for conducting audit of sales office at Kuala Lumpur and to hold the office from the conclusion of 74th Annual General Meeting until the conclusion of 75th Annual General Meeting of the Company. Based on the recommendation of the Audit Committee, the Board of Directors of the Company has proposed to appoint, M/s. Sundar and Associates (AF no. 1172), Chartered Accountants, Malaysia, as auditors for conducting audit of sales office at Kuala Lumpur and to hold the office from the conclusion of 75th Annual General Meeting until the conclusion of 76th Annual General Meeting of the Company subject to the approval of the members of the Company.

Internal audit:

The Company has appointed B K Ramadhyani & Co. LLP, Chartered Accountants (LLP Registration no. AAD-7041), Bengaluru as its internal auditors for 2021-22.

Cost audit:

M/s. Rao, Murthy and Associates, Cost Accountants (Firm Registration no. 000065), were appointed as cost auditors of the Company for the financial year ended March 31,2022. The Board of Directors of your Company has fixed Rs 450,000/- (Rupees Four Lakhs Fifty Thousand only) as audit fees, which requires ratification by the members of the Company in terms of the applicable provisions of the Companies Act, 2013. Accordingly, a resolution seeking members approval has been set forth in the notice of the 75th Annual General Meeting of the Company.

Disclosure under section 148(1) of the Companies Act, 2013:

During the period under review, the Company has conducted the audit of cost records and maintained the cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013.

Secretarial Audit:

M/s. S P Ghali & Co., Company Secretaries, Belgaum were appointed as secretarial auditors of the Company to conduct secretarial audit for the financial year 2021-22 in terms of the provisions of Section 204 of the Companies Act, 2013. The audit report is enclosed as Form MR - 3.

Explanations or comments on auditors qualifications / adverse remarks / emphasis on matters:

a. The subsidiaries are taking active steps to repay the dues of the Company, from collection of book debts assigned and from disposal of immovable properties transferred apart from debts transferred as referred in the auditors qualification. The Board of directors is confident of realisation of entire amounts due from the Subsidiaries as we are sure of realizing much more amount from the sale of immovable properties.

b. The Company is in the process of completing the review and reconciliation of receivables / book debts and in our opinion any further provision required will not have material impact on the financial results of the Company and we are confident of realizing the book debts

The detailed Companys explanation thereto has been given in the relevant notes to accounts.

Secretarial Standards:

During the financial year 2021-22, the Company has complied with provisions of applicable Secretarial standards issued by the Institute of Company Secretaries of India.

Reporting of Fraud by Auditors:

During the year, under section 143(12) of the Companies Act 2013, neither the Internal Auditors, Statutory Auditors nor Secretarial Auditors have reported to the Audit Committee or the Board of the Company any material fraud by its officers or employees therefore no details are required to be disclosed under Section 134(3) (ca) of the Companies Act, 2013.

Management Discussion and Analysis:

The Management Discussion and Analysis Report ("MDAR") for the year under review, as prescribed under Part B of Schedule V read with Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") is appended hereto as Annexure - IV and forms part of this report.

Details in respect of adequacy of internal financial controls with reference to the financial statement:

The Company has a robust system of internal financial control, which is in operation. The internal financial controls have been documented, digitized and embedded in the day to day affairs of the business process of the Company. The effectiveness of the internal financial controls are obtained through management reviews at regular intervals, assessments, monitoring by the functional experts as well as auditing of the internal control systems by the internal auditors during the course of their audits. We believe that these systems provide better assurance that our internal financial control systems are well designed and are operating effectively.

Corporate Governance:

Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India ("SEBI").

Your Companys corporate governance report for the financial year 2021-22 is appended to this annual report. A certificate on the status of compliance on corporate governance is also appended and forms part of this annual report.

Prevention of Sexual Harassment at Workplace:

Your Company has zero tolerance policy in case of sexual harassment at workplace and committed to provide a healthy environment to each and every employee of the Company. The Company has in place Policy on prevention of sexual harassment. In terms of section 22 of the Sexual Harassment of Women at workplace (Prevention Prohibition and Redressal) Act, 2013 read with Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Rules, 2013, we report as follows for the year ended on March 31,2022:

Sl. No Particulars Status
1 No of complaints received in the year Nil
2 No of complaints disposed off in the year Nil
3 Cases pending for more than 90 days Nil
4 No of workshops and awareness programme(s) conducted in the year 4
5 Nature of action by employer or District office, if any Nil

Participation and voting at 75Ih AGM:

Pursuant to Circular nos. 14/2020, 17/2020, 20/2020 & 02/2021 dated April 08, 2020, April 13, 2020, May 05, 2020, January 13, 2021 & May 05, 2022 respectively issued by Ministry of Corporate Affairs and Circular SEBI/HO/CFD/CMDI/CIR/P/2020/79 dated May 12, 2020 issued by SEBI, the 75th AGM of the Company will be held VC/OAVM. Electronic copy of the Annual Report for the year ended

March 31,2022 and Notice of the AGM are being sent to all the members electronically whose email IDs are registered with the Company / Depository Participants(s) for communication purposes. A copy of the notice of the AGM and annual report are also available for download from the website of the Company at www.kirloskarelectric.com.

Disclosure with respect to compliance to Securities Exchange Board of India (Listing Obligations and Disclosure Requirement) 2015, as amended from time to time:

The details with respect to Compliance with the SEBI (LODR Regulations) during the year are contained in the Corporate Governance Report which forms part of the annual report.

Acknowledgements:

The Board of Directors takes the opportunity to express its sincere appreciation for the continued support and confidence received from the Companys bankers, customers, suppliers, depositors and the shareholders.

The Company considers its employees as its most valuable asset. Employees at all levels have put in their best to the services of the Company and the Board puts on record the sincere appreciation of their dedication and loyalty.

For and on behalf of the Board of Directors,
Kirloskar Electric Company Limited
Vijay R Kirloskar
Place: Bengaluru Executive Chairman
Date: 12.07.2022 DIN: 00031253