Krypton Industries Ltd Directors Report

Dear shareholders,

Your Directors present the 34^th Annual Report together with the audited accounts of your company for the year ended 31^st March 2024.

1. FINANCIAL RESULTS

During the year under review, the company achieved an aggregate income of Rs. 4169.18 Lakhs. The highlights of the Standlone financial results are as under:

	Amount in (Rupees in 000)
	Current Year 2023-2024	Previous Year 2022-2023
Revenue from Operation	4,13,736.56	3,23,686.41
Other Income	3,180.86	3,995.93
Gross Total Income	4,16,917.42	3,27,682.34
Profit before Interest, Depreciation & Tax	52,731.30	41,778.95
Interest	16,171.47	14,567.53
Depreciation	15,443.10	16,533.38
Profit before Exceptional Items & Extraordinary items and Tax	21,116.73	10,678.04
Exceptional Items	-	-
Profit before Tax and after Exceptional Items & Extraordinary Items	21,116.73	10,678.04
Current Tax	7,300.00	-
Deferred Tax	(1456.87)	(511.68)
Profit after Tax	15,273.60	11,189.72
Other Comprehensive Income, net of tax	(314.90)	208.65
Total Comprehensive Income	14,958.70	11,398.37
Balance in P&L A/c brought Forward	1,08,185.36	99,780.66
Balance Available for Appropriation	1,23,458.96	108,185.36
Proposed Dividend	-	-
Tax on Proposed Dividend	-	-
Transfer to General Reserve	-	-
Balance carried to Balance Sheet	1,64,593.55	1,08,185.36

Consolidated Financial Statement :-

As required under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) and in accordance with the Indian Accounting Standard (Ind-AS) 110, Consolidated Financial Statements (CFS) of the Company form part of the Annual Report and are reflected in the consolidated financial statements of the Company. These statements have been prepared on the basis of audited financial statements received from the subsidiary as approved by their respective Boards.

1. OVERVIEW AND REVIEW OF OPERATION

A review on division wise performance of the company is furnished below: -

Tyre Division

The total income of the Tyre division for the year 2023-24 amounted to Rs.773.81 lakhs compared to Rs. 705.68 lakhs in the previous year. The unit reported Loss during the year amounted to Rs. 151.93 lakhs as compared to previous year loss of Rs. 165.04 lakhs.

Due to continued adverse shipping conditions both in terms of lead time & costs exports & imports became expensive which leads to higher input costs and uncompetitive exports. Raw materials prices have grown more than 70% from pre-covid levels which we could not pass entirely to our customers which has affected our bottom line. We are very hopeful that this situation will improve in current financial year.

Sadhurhat division

The unit is engaged in manufacturing MCP Tubeless Tires & Rehab Care Products for domestic market. The unit reported an income for the year 2023-24 amounted to Rs. 1,398.45 lakhs as compared to the previous year Rs. 1,117.73 Lakhs and the unit reported the Profit before tax for the year 2023-24 of Rs. 174.40 lakhs compared with previous year of Rs. 177.06 lakhs.

This unit has further increased its profit margin from last year. Also, we have increased our topline impressively. We further believe that we can grow higher than industry average. We are very confident for coming years as there are certain bicycle companies & other mobility companies which are showing interest in our product as we can offer our unique product with no competitors in India. We hope to see very positive outcome in coming years.

Wheel division

The total income of this unit for the year 2023-24 amounted to Rs. 1355.22 lakhs compared to Rs. 796.07 lakhs in the previous year. The unit reported the profit before tax for the year 2023-24 amounted to Rs. 390.31 lakhs compared with previous year of Rs. 147.90 lakhs.

Plastic division

The total income of this unit for the year 2023-24 amounted to Rs. 303.09 lakhs compared to Rs. 235.76 lakhs. The unit reported the profit before tax for the year 2023-24 amounted to Rs. 390.31 lakhs compared with previous year of Rs. 34.74 lakhs.

Footwear division

The total income of the footwear division for the year 2023-24 amounted to Rs. 221.70 lakhs compared to Rs. 32.23 lakhs in the previous year. The unit reported loss of Rs. (60.50) lakhs during the year compared to loss of Rs. (137.29) lakhs in the previous year.

Engineering division

The total income of this unit for the year 2023-24 amounted to Rs. 2,005.58 lakhs compared to Rs. 1,110.34 lakhs in the previous year.

The unit reported loss during the year amounted to Rs. 265.93 lakhs compared to loss of Rs. 27.90 lakhs.

Despite many challenges we had very good growth in topline from last year. We have increased our topline impressively but losses were flat due to further increase in raw material prices abruptly and we could not pass on the increased prices to customers due to cheaper imports and reluctance of customers to buy in high prices. We are very hopeful to deliver growth of 15% CAGR for next 3 years. As per current government policies, they are pushing hard in this segment with focus on "Divyang" for sustained living.

The Indian Rehab Care Equipment Market has accepted the Brand "iCare" which was very encouraging for our company but we need to push on sale further to strengthen our brand value.

Company has always taken a long-term view of this business and the company is also in process to come with more similar products for the disabled persons in the coming year. And the company is also expecting very high demand due to weaker rupee and stronger USD & Chinese Yuan due to which we will be very competitive not only in India but all around the world.

Exporting wheelchairs to the U.S. and other global markets presents a significant opportunity for companies to reach a broad customer base. By focusing on this market, manufacturers can tap into a well-established distribution network and benefit from the U.S.s advanced healthcare infrastructure. Additionally, exporting to the U.S. allows companies to leverage its extensive consumer market, potentially leading to increased sales volumes and expanded brand recognition on a global scale.

2. DIVIDEND

Company are pleased to recommend a final dividend of 1 per equity share of face value of Rs. 10/- each for the financial year ended 31st March 2024, subject to the approval of members. The final dividen, if declared by the members at the ensuring 34th Annual General Meeting will be paid within 30 days from the conclusion of 34th AGM subject to deduction of tax at source as applicable to the members whose names appear on the Companys register of members and in respect of the shares held in dematerialised mode to the memberse whose names are furnished by the National Scurities Depository Limited and Central Depository Services Limited as beneficial owners as on that date.

3. CHANGES IN PAID UP SHARE CAPITAL

There has been no change in the Paid-up Share capital of the company during the year.

4. SUBSIDIARIES, JOINT VENTURES OR ASSOCIATES

Company had incorporated a Wholly Owned Subsidiary in the name and style of, Krypton Europe S.R.O., a limited liability Company in the Nadraznl 48,514,01, Jilemnice, Czech Republic on 06th November, 2019. The purpose of setting up this entity is to establish a marketing and trading outfit to explore European markets for Rehab Care products.

The Companys Subsidiary namely TCB Industries Private Limited, a wholly owned subsidiary, registered in West Bengal (CIN:U32509WB20323PTC263170). The Company is engaged in trading of Wheel Chair and other Hospital Equipments.

In accordance with Section 129(3) of the Companies Act, 2013, the consolidated financial statements of the company have been prepared, which forms part of this Annual Report. Further, the report on the performance and financial position of the subsidiary in the prescribed form AOC-1 is annexed as Annexure III to this report.

5. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required Listing agreement with Stock Exchange: -

A. Industry Structure & Developments: -

Krypton Industries Limited (KIL) had tremendous year and increased its topline as well as bottom line at same time. Despite higher input costs and very difficult market conditions due to our efforts in reductions of costs and increased efficiency we overcome this difficult time effectively.

Companys primary focus is expansion in Indian Markets as well as Exports for all its product line which includes MCP tubeless tires and hospital/disabled support equipment business. Company is also focusing on high end products like hospital beds/ power wheelchairs for disabled persons and to increase its product portfolio. Also, company is aggressively betting for government tenders for Wheelchairs & other support equipment.

We are currently focusing of Rehab care business which has tremendous growth outlook as this industry is in very nascent stage in India. Also, our government are pushing very hard to improve the health care infrastructure in India which we can contribute in very positive way.

B. Outlook and opportunities

Your Company has identified the following opportunities and future building business areas:

The companys major focus is on MCP tubeless tires in bicycle industry and rehab care business which has very promising in future. Primarily, the PU tire for Bicycle, rehab care products and tyres for industrial application will be our main focus this year and years to come for the domestic as well as international market.

With Rehab care / disabled support equipment business, the company is now considered as one of major domestic brand in India with brand name "ICARE" for rehab care products & we have also launched affordable new model of wheelchair in the Brand Name "UDAAN" which was accepted in highly competitive market, with our current product portfolio & brand recognition in market the future looks very promising. With government focus on "Divyang" section of society, huge demand from both government sector as well as from market will come in future. We have been also accredited with certain quality certification which will help company to participate tenders from Defense, NGOs, Hospitals & other government organizations. Company is also continuously making efforts to increase its product portfolio to stay competitive from imports and other emerging players in the segments.

C. Outlook on threats, risk and concern

1. Business Risks:

Companys major product portfolio is MCP tubeless Tires & castor wheels for industrial applications. It faces major competition from rubber tires which is cheaper than our products in same industry. Also, rubber prices are much stable than polyurethane. Also, our bicycle tire is new entrant in our portfolio which is still in growing stage and has a huge potential but at the same time its a completely new product for the market and acceptance will take some time to establish. Our positive side is that life & quality of our product is much more superior than rubber tyres.

In rehab care / Hospital furniture business our company is facing biggest competition from cheap & low-quality Chinese products. Also, further increase in prices in steel & other raw material items will hurt our bottom line in future. Also passing on additional cost is very difficult in this industry. But we are seeing the peak of this commodity cycle and hopefully it will cool down in near future.

Company is normally import Raw Materials and export finished goods during its course of business which exposes it to exchange fluctuation risks and international crude & petrochemicals prices affects the raw material prices.

2. Financial Risks:

Majority of raw material are imported, so any major fluctuation in US$ can affect the performance of the company. Company is trying to leverage this risk by sourcing more from local vendors. Although foreign exchange risks somewhat balanced by exports and company is regularly covering such risk.

The interest cost started rising again and RBI started increasing interest rates. Company is exploring the other means to reduce interest cost.

3. Legal & Statutory Risks

Company is complying regularly with all the regulatory requirements with respect to manufacturing, taxations, statutory requirements, company law, SEBI etc., with new laws coming in, this exercise will need more inputs which company is working towards.

4. Political Risks

Any major change in local, national or international can affect the business but as, at the moment, company does not have any business with government entities, the risk is minimal. Although company is trying to secure government business at the moment, this can impact positively as well as negatively in a small percentage of growth of the company.

D. Internal Control System and their adequacy:

Your Company believes that Internal Control is a required principle of governance that freedom of management should be exercised within a framework of appropriate checks and balances. Your Company remains committed to ensuring an effective internal control environment that provides assurance on the efficiency of operations and security of assets.

The company has an Audit Committee, the details of which have been provided in the Corporate Governance Report. Internal auditor performs their duty and audit committee reviews internal auditor reports and other reports and provides suggestions for improvement /takes corrective actions. The committee also meets the Companys

Statutory Auditors to ascertain, interalia, their views on the Adequacy of Internal Control Systems in the company and keeps Board of Directors informed from time to time.

E. Financial Performance

Over all financial Performance of the company is satisfactory in current market scenario, we are cautiously improving in costing point of view which will further add to our margins. Our company will surely improve out topline and bottom line this year and in the years to come.

F. Human Resource Developments:

During the fiscal 2023-24 company has more than 156 persons on its payroll. Apart from this company has generated indirect employment to more than 160 persons in nearby locations. Company is working on to restructure the total organization to help its growth with further recruitment in the top and middle management level at different positions.

6. SHARE CAPITAL

The paid-up equity share capital as at March 31, 2024 is Rs.14.69 Crores, divided into 1,46,97,130 equity shares of face value Rs. 10 each. During the year under review, the Company has not issued any equity shares with differential rights or sweat equity shares or under any employee stock option.

7. DEPOSITS

During the year under review, the Company has neither invited nor accepted any fixed deposits from the public within the meaning of section 73 of the Companies Act, 2013 and the rules made there under.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of the loans given, Investments made, Guarantees or Securities provided during the year have been disclosed under the Note no. 5,6,14 & 43 to the financial statement. However, the company has complied with the provision of sec 186 of the companies Act, 2013.

9. PARTICULARS OF THE CONTRACTS OR ARRANGEMENTS WITH THE RELATED PARTIES

All transactions/ contracts/arrangements entered with the Related Parties during the financial year were in the Ordinary course of business and on arms length basis and without any conflict of interest. Moreover, the company has not entered into any transaction of material nature with the promoters, directors, management, subsidiaries or any significant related party during the financial year that may have potential conflict with the interests of the company at large.

Since all the related party transactions entered into by the Company were in the ordinary course of the Business and on an arms length basis. Thus, no transaction is being reported in Form AOC-2.

The details of the transactions/ contracts /arrangements held with the related parties have been disclosed in the Notes to the financial statements. A framed Policy on Related Party

Transactions duly adopted by the Board is available on the Companys website www.kryptongroup.com.

10. MATERIAL CHANGES AND COMMITMENTS

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and date of this report.

11. KEY FINANCIAL RATIOS

There were significant changes in certain key financial ratios of the Company that have changed more than 25% over previous year. Kindly refer Note 56 of the attached standalone financial report of the Company.

12. AUDITORS

Statutory Auditors & their Report

M/s P. K. Luharuka & Co., Chartered Accountants (Firm Registration no. 322020E), was appointed as Statutory Auditors of the Company at the Annual General Meeting on September 27, 2022 for a term of 5 years to hold office till the conclusion of the 35th Annual General Meeting. The Company has received consent of the Auditors for continuation of office for the current year.

The Board of Directors, on the recommendation of the Audit Committee, have recommended the members for re-appointment of M/s P. K. Luharuka & Co., Chartered Accountants (Firm Registration no. 322020E) as the statutory auditors for the second term of three consecutive years from the conclusion of the 32nd annual general meeting until the conclusion of the 37th annual general meeting.

The observations made by the Statutory Auditors in their report for the financial year ended 31st March 2024 read with the explanatory notes therein are self-explanatory and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Companies Act, 2013. The Auditors Report does not contain any qualification, reservation or adverse remark.

Secretarial Audit Report

Pursuant to section 204 of the Companies Act, 2013, the Board has appointed Sanjay Kumar Vyas, Practicing Company Secretary to undertake the audit of Secretarial and other related records of the company. The Secretarial Audit Report issued by Sanjay Kumar Vyas in Form MR-3 for the financial year ended 31st March, 2024, is also annexed herewith in Annexure-V. Your directors wish to clarify the observations made by the Auditors regarding the cases being shown as pending in the Bank shall Courts which were actually being resolved during the past years itself and for which a letter is being sent to the Registrar for removal of such cases from the pending list.

Cost Audit & Records

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014 the Company is only required to maintain its cost records in respect of the products being manufactured by the company. The Cost records are duly maintained by the company as required.

5. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGES EARNINGS AND OUT GO:

The information as required under clause (m) sub section (3) of section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rule, 2014 is annexed herewith in Annexure- I.

6. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in Form MGT-7 is available at the companys website www.kryptongroup.com

7. DETAILS OF SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL IMPACTING GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

There were no significant & material orders passed by the regulators or courts or tribunal which would impact the going concern status and future operations of the company.

8. LISTING AT STOCK EXCHANGES

The equity shares of the company are listed on the stock exchanges at CSE and BSE. The annual Listing fees for BSE have been paid for the financial year 2023-24.

9. CORPORATE GOVERNANCE

A separate section on corporate governance together with a certificate from the Auditors of the company regarding full compliance with the provisions of SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 with the stock exchanges forms a part of the Report under Annexure- IV.

10. MEETINGS

During the year under review, 7 Board Meetings and four Audit Committee Meetings were convened and held, the dates and attendance in by each Directors are given in the Corporate Governance Report. The maximum time gaps between the Meetings were within the period as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

The details of constitution of the Board and its Committee are given in the Corporate Governance Report.

11. SECRETARIAL STANDARDS

The Company has complied with Secretarial standards issued by the Institute of Company Secretaries of India.

12. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr. Digvijay Singh Bardia (DIN: 10220855), has been appointed as Whole Time Director of the company w.e.f 06.07.2023.

Mr. Tilok Chand Bachhawat (DIN: 00580356), has been resigned from the position of NonExecutive Non-Independent director with effect from 14.08.2023.

None of the Directors of the company are disqualified for being appointed as Directors as specified under section 164 of the Companies Act, 2013 and the rules made thereunder.

DECLARATION BY INDEPENDENT DIRECTOR:

The Company has duly received the declaration from all the Independent Directors as laid under section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015. The declaration was placed and noted by the Board at its meeting held on 30th May, 2024. There has been change in the circumstances affecting their status as independent directors of the Company. Furthermore, they affirmed compliance with the code of conduct for independent directors as prescribed in Schedule IV of the Act.

13. REMUNERATION POLICY

The Board, on recommendation of the Nomination & Remuneration Committee has framed a policy for selection and appointment of Directors, Senior Management and their remuneration which includes criteria for performance evaluation of non-executive and executive directors. A detailed Policy is also available on the website of the Company, www.kryptongroup.com.

14. RISK MANAGEMENT POLICY

In accordance with the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, the Board of Directors of the Company is responsible for framing, implementing and monitoring the Risk management plans of the Company. The Company has also framed a Risk Management Policy defining the roles and responsibilities of the Committee and the same has been approved by the Board of Directors of the Company.

The Risk Management Policy is available on the website of the company, www.kryptongroup.com.

15. VIGIL MECHANISM/WHISTLE BLOWER POLICY

In accordance with the provision of the Companies Act, 2013 read with the Rules made therein and SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015, every listed company shall establish a Vigil Mechanism for the directors and employees to report their genuine concerns and grievances. A framed Vigil Mechanism is available on the companys website, www.kryptongroup.com.

The Audit Committee is entrusted with the responsibility to oversee the Vigil Mechanism.

16. BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the performance evaluation of the Board as a whole, Chairman and the Non-Independent Directors was carried out by the Independent Directors. This exercise was carried out in accordance with the Remuneration Policy framed by the Company within the framework of applicable laws.

The Board carried out an annual evaluation of its own performance, as well as the evaluation of the working of its committees and individual Directors, including Chairman of the Board. The performance evaluation of all the Directors was carried out by the Nomination and Remuneration Committee. While evaluating the performance and effectiveness of the Board, various aspects of the Boards functioning such as adequacy of the composition and quality of the Board, time devoted by the Board to Companys long-term strategic issues, quality and transparency of Board discussions, execution and performance of specific duties, obligations and governance were taken into consideration.

17. DIRECTORS RESPONSIBILITY STATEMENT

As required under Section 134(3)(c) of the Companies Act, 2013, your Directors hereby states:

• That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any;

• That the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are responsible and prudent so as to give true and fair view of the state of affairs of the company at the end of the financial year and of the profit of your company for that period.

• That 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 your company and for preventing and detecting fraud and other irregularities.; and

• That the directors have prepared the annual accounts on a going concern basis and

• That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively, and

• That the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

18. PARTICULARS OF EMPLOYEES

The disclosure required under section 197 of the Companies Act, 2013 read with the Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith in Annexure- II.

Your directors state that during the year under review, there were no cases filed pursuant to the sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

19. ISO 9001-2015, ISO 138455, IS 7454

Your company operates in ISO 9000 quality assurance system as per the ISO 9001-2015 standards. The Audit was duly carried out during the year 2023-24. The new standards are mainly customer oriented and they will help our Company to get much better controls to improve with best customer satisfaction standards.

The company has been granted the license by Bureau of Indian Standards (BIS) to use Standard Mark i.e. IS 7454 in respect of Rehabilitation equipment- Wheelchairs Folding and Adult size according to which we will manufacture highest quality of wheelchairs as per the specification.

20. APPRECIATION

Your directors take this opportunity to record their appreciation for the continued and sustained support and co-operation extended to the Company by the Government of India, State Governments, Financial Institutions and Banks, Dealers and Customers, Suppliers, Transporters, Employees, Shareholders and all other Stakeholders.

Cautionary Note:

Certain statements made in the Directors Report and "Management Discussion & Analysis Report" which seek to describe the companys objectives, projections, estimates, expectation or predictions etc may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual result may differ from such expectations, projections, etc., whether express or implied. Several factors could make significant difference to the Companys operations. These include climatic conditions and economic conditions affecting demand and supply, government regulations and taxation, natural calamities, etc. which the company doesnt have any direct control.

Registered Office: Falta Special Economic Zone	By Order of the Board
Sector-1, Plot-31&32, Falta	For Krypton Industries Limited
24-Parganas (S), Pin-743504
West Bengal
CIN : L25199WB1990PLC048791

 

Date: 30.05.2024	Sd/-	Sd/-
	Jay Singh Bardia	Pradeep Kr. Singh
	Managing Director	Director
	(DIN : 00467932)	(DIN : 00386800)