To
The Members of Ethos Limited
Your Directors have pleasure in submitting the 16th
(Sixteenth) Annual Report of the Company together with the Audited Financial
Statements of Accounts for the financial year ended on March 31, 2023.
1. Financial Results
The Company's financial performance for the year under review, along
with previous year's figures are given hereunder: -
(Rs. in lakhs)
Particulars |
Standalone |
Consolidated |
|
March 31,2023 |
March 31,2022 |
March 31,2023 |
March 31,2022 |
Revenue from operations and other Income |
80,373.04 |
59,076.24 |
80,309.41 |
59,006.20 |
Total expenditure |
(67,530.20) |
(51,149.91) |
(67,412.29) |
(51,037.87) |
Earnings before finance cost, tax, depreciation, and
amortization (EBITDA) |
12,842.84 |
7,926.33 |
12,897.12 |
7,968.33 |
Finance costs |
(1,413.67) |
(1,664.56) |
(1,416.06) |
(1,667.28) |
Depreciation |
(3,452.57) |
(3,141.18) |
(3,463.09) |
(3,150.86) |
Profit before share of joint venture and tax |
7,976.60 |
3,120.59 |
8,017.97 |
3,150.19 |
Share of Profit of joint venture (net of income tax) |
|
|
49.68 |
2.40 |
Profit before tax |
7,976.60 |
3,120.59 |
8,067.65 |
3,152.59 |
Tax expenses |
(1,997.00) |
(784.29) |
(2,037.83) |
(813.79) |
Profit for the year |
5,979.60 |
2,336.30 |
6,029.82 |
2,338.80 |
Other comprehensive income/(loss) |
(16.91) |
1.34 |
(17.62) |
1.24 |
Total comprehensive income for the year |
5,962.69 |
2,337.64 |
6,012.20 |
2,340.04 |
2. Review of Business Operations and Future prospects
The FY 23 has been an excellent year for your Company. Your Company has
witnessed a strong growth in revenue as well as profitability.
During the year, the Company has opened 6 (Six) new stores and closed 2
(Two) under-performing stores. The total count of stores increased to 54 (Fifty four) from
50 (Fifty). Your Company has ventured into 3 (Three) new cities (Indore, Bhopal and
Siliguri); Your Company is now present in 20 (Twenty) cities compared to 17 (Seventeen)
cities previous year.
On standalone basis, the revenue from operations and other income for
FY 23 grew by 36.05% to Rs. 80,373.04 lakhs, and on consolidated basis grew by 36.1% to
Rs. 80,309.41 lakhs.
On standalone basis, the net profit after tax (PAT) for financial year
2022-23 stood at Rs. 5,979.60 lakhs as compared to Rs. 2,336.30 lakhs in the previous
year, thereby recording a strong growth by three folds. Net profit after tax (PAT) on
consolidated basis for financial year 2022-23 amounted to Rs. 6029.82 lakhs as compared to
Rs. 2,338.80 lakhs in the previous year.
The Company leveraged its digital capabilities to strengthen its
response to consumer demand. The Company is cognisant of the fact that digital led sales
going forward is going to play a crucial role as many customers have now become
comfortable to buy luxury watches online. Many customers start their journey digitally to
look for watch and research more about the same. The Company will continue to innovate and
spend on marketing through digital mediums to keep the overall engagement high. Ethos,
being predominantly a luxury and premium focused player, will continue to benefit from the
rise of digital platforms.
Luxury and high luxury watch segments also earn better margins,
allowing your Company to have better profitability.
Exclusive Brands: Exclusive brands continue to play a pivotal role
in the consumer strategy of the Company. Company's growth is galvanized by its portfolio
of 40 brands, which are exclusively available at Ethos. During FY 23, exclusive brands
contributed 27.4% for the toplines and 37.9% to the gross margin of the Company.
Certified Pre-Owned Business: Certified pre-owned watches is a
great growth pillar for the watch industry globally. The pre-owned watch sector does not
cannibalize the new watch business. On the contrary it adds to the overall industry size
by promoting multiple ownership of watches and adding a whole sector of first-time luxury
enthusiasts. Globally, it is already 33% of the new watch business and according to
industry experts it will become half the size of the new watch industry by 2026.
In India, your Company has the first mover advantage on this
fast-growing sector and having the highest market share considering the only ones with a
Pan India Presence to source watches. With a "state of the art" service centre
which the Company recently opened, it restores each watch and provides a 2 years warranty
on each watch. Company's new website https:// www.secondmovement.com already has over 1.3
million visitors. Company has trained 17 (seventeen) watch technicians over the last 12
(twelve) months and are in a position to grow this business steadily.
During FY 23, your Company's pre-owned business has reported total
sales of Rs. 5,041 lakhs against Rs.3,141 lakh in FY 22. The Company grew by 61% in
Billing against the previous year. Over
the next two years your Company will expand the footprint along with
the website to few major cities in India to continue driving strong growth in the
pre-owned business.
Loyalty Program: Company's loyalty program, Club ECHO, is a
customer relationship management initiative, which provides benefits to repeat customers
based on their cumulative purchasing over time. The database generated via Club ECHO gives
the Company access to important buying trends, which further enables the Company to design
appropriate communication strategies, leading to greater satisfaction and commitment. As
on March 31, 2023, the Company had over 3,00,000 registered members in Club ECHO.
3. Dividend
In order to conserve profits of the current year for the several growth
initiatives that the Company is pursuing, the Board of Directors do not propose dividend
for current financial year.
As required under Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirement) Regulations, 2015, the Company has formulated Dividend
Distribution Policy and the same has been uploaded on the website of the Company and can
be accessed at https://www.ethoswatches.com/investors-information
4. Share Capital
During the year under review, there was no change in the authorised
share capital of the Company.
During the year under review, there was an allotment of 4.271.070
equity shares of Rs.10 each at a securities premium of Rs. 868 per share under the Initial
Public Offering (IPO) of the Company at the IPO Committee meeting held on May 26, 2022.
The paid-up share capital of the Company as on date of this report is
Rs. 2,334.92 lakhs (Rupees Twenty three crores thirty four lakh ninety two thousand three
hundred and thirty only) divided into 23,349,233 equity shares of Rs. 10 each.
5. Initial Public Offer and Listing of Shares on Stock Exchanges
During the year, the Company completed Initial Public Offering (IPO) of
45,81,500 equity shares comprising a fresh issue of 42.71.070 equity shares and an offer
for sale of 3,10,430 equity shares by respective applicants in various categories for the
face value of Rs.10 each at securities premium of Rs.868 per share. Pursuant to the IPO,
the equity shares of the Company are listed on BSE Limited (BSE) and National Stock
Exchange of India Limited (NSE) with effect from May 30, 2022.
6. Directors and Key Managerial Personnel
(a) Directors:-
During the year under review, following changes took place in the
composition of the Board of Directors of the Company -
Pursuant to the recommendations of Nomination and Remuneration
Committee and Audit Committee in its meetings held on November 3, 2022, the Board of
Directors (at its meeting held on November 3, 2022) recommended re-appointment of Mr.
Yashovardhan Saboo (DIN - 00012158) as the Chairman and Managing Director of the Company
with effect from December 1, 2022 for a term of 1 (one) year, that is, up to November 30,
2023 without remuneration as his earlier term of re-appointment was expiring on November
30, 2022. The said re-appointment was approved by the members by way of an ordinary
resolution passed through Postal Ballot dated March 5, 2023. However, the members of
Nomination and Remuneration Committee and Audit Committee at their meetings held on March
28, 2023 recommended that the current term of re-appointment of Mr. Yashovardhan Saboo, as
approved by the members through Postal Ballot on March 5, 2023, be superseded. The Board,
thereafter, at its meeting held on March 28, 2023 recommended supersession of the Ordinary
Resolution passed by members through Postal Ballot on May 19, 2023 by re-appointing Mr.
Yashovardhan Saboo as Chairman and Managing Director for a term of 3 (three) years with
effect from April 1, 2023 upto March 31, 2026 along with the payment of remuneration.
Mrs. Munisha Gandhi (DIN - 09684474), who was appointed as an
Additional Director, was regularised as a Non - Independent and Non- Executive (Woman)
Director, by way of an Ordinary Resolution passed by the members of the Company through
Postal Ballot on March 5, 2023.
Mr. Charu Sharma (DIN - 02276310), who was appointed as an Additional
Director, was regularised as an Independent Director of the Company with effect from
November 3, 2022 for a term of 5 (five) consecutive years commencing from November 3,
2022, not liable to retire by rotation, by way of a Special Resolution passed by the
members of the Company through Postal Ballot on March 5, 2023.
Mr. Patrik Paul Hoffmann (DIN - 09208027) was regularised as an
Independent Director of the Company with effect from September 27, 2022, not liable to
retire by rotation, by way of a Special Resolution passed by the members of the Company
through Postal Ballot on March 5, 2023.
Based on the recommendation of Nomination and Remuneration Committee,
performance evaluation was carried out and subject to the approval of the Shareholders of
the Company, the Board of Directors approved the reappointments of Mr. Dilpreet Singh (DIN
- 03042448 and Mr. Mohaimin Altaf (DIN - 08080751) as Independent Directors of the Company
for a second term of 5 (five) years. However, Mr. Mohaimin Altaf (DIN - 08080751) vide his
letter dated August 5, 2023 has conveyed to the Board his unwillingness to be re-appointed
as an Independent Director of the Company for the second term. As such, the Board
recommends the re-appointment of Mr. Dilpreet Singh (DIN - 03042448) for the approval of
the members and Mr. Mohaimin Altaf (DIN - 08080751) shall cease to be the Director of the
Company from the date of conclusion of the 16th (Sixteenth) Annual General
Meeting of the Company.
In accordance with the provisions of Companies Act, 2013, Mr.
Chitranjan Agarwal (DIN - 00095715) retires by rotation at the ensuing Annual General
Meeting and being eligible, offers himself for reappointment. The Board recommends his
re-appointment for the approval of the members.
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of independence prescribed
under the Companies Act 2023 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. In terms of Section 150 of the Act read with Rule 6 of
the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended,
Independent Directors of the Company have registered their names in the data bank of
Independent Directors maintained with the Indian Institute of Corporate Affairs.
The list of key skills, expertise and core competencies of the Board of
Directors, is provided in the Report on Corporate Governance forming part of this report.
Details, such as brief resumes, nature of expertise in specific functional areas, names of
companies in which the above-named directors hold directorships, committee memberships /
chairpersonships, shareholding in your Company, etc. are furnished as a separate annexure
in the Notice of the 16th (Sixteenth) Annual General Meeting (AGM).
Necessary resolutions for re-appointment of the aforesaid directors
forms part of the Notice convening the 16th (Sixteenth) AGM.
The details on Directors' re-appointments / appointments and
remuneration including criteria for determining qualifications and positive attributes,
forms part of the Notice convening the 16th (Sixteenth) AGM.
In the opinion of the Board, all the directors, as well as the
directors proposed to be appointed / re-appointed, possess the requisite qualifications,
experience and expertise and hold high standards of integrity. All of the Independent
Directors are exempt from the requirement of passing the proficiency test.
None of the Director has received any remuneration or commission from
any of the Company's subsidiaries or joint ventures. 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 and agreed commission, received by
them.
(b) Key Managerial Personnel:
During the year under review, there were no changes in the Key
Managerial Personnel of the Company.
The Policy on Remuneration, Insider Trading, Familiarization Programme
For Independent Directors and Diversity of Board of Director as approved by the Board is
available on the Company's website and can be accessed at
https://www.ethoswatches.com/investors-information.
7. Material changes and commitments, if any, affecting the financial
position of the Company occurred between the end of the financial year to which this
financial statements relate and the date of the report
There are no material changes and commitments affecting the financial
position of the Company occurred between the end of the financial year to which these
financial statements relate on the date of this report.
The Policy on Determination of Materiality of events or information as
approved by the Board is available on the Company's website and can be accessed at
https://www. ethoswatches.com/investors-information.
8. Details of significant and material orders passed by the regulators,
courts and tribunals
There were no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and the Company's operations in
future.
9. Business Responsibility and Sustainability Report
Pursuant to Regulation 34 of the Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business
Responsibility and Sustainability Report of the Company is attached as Annexure - I forming
part of this report.
10. Management Discussion and Analysis Report
Pursuant to Regulation 34 read with Schedule V of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015, a Management Discussion and Analysis as per Annexure - II, which includes
detailed review of operations, performance and future outlook of the Company, is annexed
hereto and forming part of this report.
11. Corporate Social Responsibility
The Company is committed to discharge its social responsibility as a
good corporate citizen. In terms of the provisions of Section 135 of the Act, read with
Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of
your Company has constituted a Corporate Social Responsibility Committee ("CSR
Committee"). The composition and terms of reference of the CSR Committee is provided
in the Corporate Governance Report, which forms part of this Annual Report. The Annual
Report on CSR activities required under the Companies (Corporate Social Responsibility
Policy) Rules, 2014 is set out as Annexure - III forming part of this report.
The aforesaid CSR Policy has also been uploaded on the Company's
website and may be accessed at https://www.ethoswnt.ches.com/invest.ors-informnt.ion
12. Particulars of loans, guarantees or investments made under section
186 of the Companies Act, 2013
There were no loans or guarantees given by the Company under Section
186 of the Companies Act, 2013 during the year under review.
However, Company had acquired 100% stake of Silvercity Brands AG, a
Swiss stock corporation situated at Grenchen, Switzerland. Consequently, Silvercity Brands
AG has become the wholly owned subsidiary body corporate of the Company with effect from
March 31,2023.
Also, the Company has made an application of investment of CHF 125,000
for subscribing to the shares of Haute-Rive Watches SA, a Swiss stock corporation situated
at Corcelles, Switzerland.
13. Related Party Transactions
During the year under review, related party transactions entered into
by the Company with related parties as defined under the Act and Securities and Exchange
Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 were
reviewed / approved by the Audit Committee and were entered into in the ordinary course of
business and on an arm's length basis. There were no materially significant transactions
entered into with the related parties that may have potential conflict with the interests
of the Company at large.
Further, all the RPTs are placed before the Audit Committee for the
review and approval and prior Omnibus Approval was obtained for RPT which were repetitive
in nature. Thus, disclosure in Form AOC-2 is not required.
All transactions with related parties are in accordance with the policy
on related party transactions formulated by the Company.
Accordingly, Form No. AOC-2, prescribed under the provisions of Section
134(3)(h) of the Act and Rule 8 of the Companies (Accounts) Rules, 2014, for disclosure of
details of related party transactions, which are "not at arm's length basis" and
also which are "material and at arm's length basis", is not provided as an
annexure to this Report.
During the year, the Company amended the Policy on Dealing with Related
Parties in view of the amendments issued by SEBI and to simplify the process of
transaction approval sought from the Audit Committee. The Policy on Materiality of Related
Party Transactions and on dealing with Related Party Transactions as approved by the Board
is available on the Company's website and can be accessed at https://www.ethoswatches.com/
investors-information.
14. Statutory Auditors and Auditor's report
As per the requirement of section 139(2) of the Companies Act, 2013,
M/s. S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No.
301003E/E300005), were appointed as the Statutory Auditors of the Company for a term of
five consecutive years at the twelfth Annual General Meeting of the Company held on
September 2, 2019. The Statutory Auditors have confirmed they are not disqualified from
continuing as Auditors of the Company.
The Board has examined the Auditors' Report to the accounts and
clarifications, wherever necessary, have been included in the notes to the accounts.
Further, the Auditors Report does not contain any qualifications, adverse or disclaimer
remarks. No fraud has been reported by the Auditors to the Audit Committee or the Board.
15. Secretarial audit and Auditor's report
Pursuant to the provisions of Section 204 of the Companies Act, 2013
and rules made there under, the Company has appointed CS Vishal Arora, Practicing Company
Secretary (FCS no. 4566 and CP no. 3645), to undertake the Secretarial Audit of the
Company.
Secretarial audit of secretarial and related records of the Company was
conducted by the aforesaid auditor and a copy of the secretarial audit report is annexed
and forms an integral part of this report as Annexure - IV. The above Secretarial
audit report does not contain any qualifications, reservations or adverse or disclaimer
remarks.
16. Report on Corporate Governance
The Corporate Governance Report of the Company for the year under
review, is attached as Annexure - V forming part of this report.
Certificate from CS Jaspreet Singh Dhawan, a Practicing Company
Secretary regarding the compliance with the conditions of the Corporate Governance as
stipulated under the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 is annexed to the Corporate Governance Report
and forms and integral part of this Report.
17. Extract of Annual Return
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on March 31, 2023 is available on the website of the Company at
ht.t.ps://www.et.hoswnt.ches.com/ investors-information .
18. Meetings of the Board and the Committees
During the financial year under review, 9 (nine) meetings of the Board
of Directors were held. The details of dates of the above meetings including the
attendance of the Directors are given in the Corporate Governance Report which forms part
of this Annual Report.
19. Director's Responsibility Statement
In accordance with the provisions of Section 134 (3)(c) and 134(5) of
the Companies Act, 2013, the Board, to the best of its ability confirms that:
a) in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to material departures;
b) the directors had 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 and loss of the Company for that period;
c) the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of this Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
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 the Company and that such internal financial controls are adequate and were
operating effectively.
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.
20. Details of Subsidiaries, Joint Ventures and Associate Companies
During the year under review, the particulars of Subsidiary and
Associate Companies are as under:-
Cognition Digital LLP (Cognition') - Cognition is a wholly owned
subsidiary body corporate of the Company and is engaged in the business of developing and
implementing information technologies (IT) and conduct IT based businesses including
retail and distribution of consumer and other goods. During the year under review, it has
reported revenue from operations amounting to Rs. 422.06 lakh and its net profit stood at
Rs. 73.39 lakh.
Silvercity Brands AG (Silvercity') - Silvercity is a wholly
owned subsidiary body corporate of the Company and is engaged in the business of
acquisition and sale, holding and management of Intellectual property rights and license
rights, especially in the watch industry and related areas; buying and selling, marketing
and development of watches, related products and others luxury goods; it also provides
services in these areas.
Pasadena Retail Private Limited (Pasadena') - Pasadena is a
joint venture of the Company and is engaged in the business of retail of watches. During
the year under review, it has reported revenue from operations amounting to Rs. 1,069.17
lakh and its net profit stood at Rs. 99.35 lakh.
In terms of the provisions of Regulation 24(1) of the Listing
Regulations, appointment of the Independent Director of the Company on the Board of
material subsidiaries was not applicable to M/s. Cognition Digital LLP.
During the year under review, the Board has reviewed the affairs of
subsidiary body corporate and joint venture company. The Consolidated Financial Statement
of the Company are prepared in accordance with the Companies Act, 2013 read with rules
made thereunder and applicable IND AS along with the relevant documents and Auditors'
Report thereon forms part of this Annual Report.
In accordance with the provisions of Section 136(1) of the Companies
Act, 2013 read with rules made thereunder, the Annual Report of the Company containing
therein the audited standalone and consolidated financial statement and the audited
financial statements of subsidiary body corporate and joint venture Company have been
placed on the website of the Company. The audited financial statements in respect of
subsidiary body corporate and joint venture Company shall also be kept open for inspection
at the Registered Office/Corporate Office of the Company during working hours for a period
of 21 days before the date of ensuing AGM. The aforesaid documents are also available to
Members interested in obtaining the same upon a request made to the Company.
A separate statement containing salient features of the financial
statements of the Company's subsidiary/associate in prescribed format in Form AOC - 1
is annexed as Annexure - VI to this report.
The Policy on Determining Material Subsidiaries as approved by the
Board is available on the Company's website and can be accessed at
https://www.ethoswatches.com/ investors-information.
21. Deposits from Shareholders
The following details of deposits, covered under Chapter V of the
Companies Act, 2013 is given hereunder:-
(Rs. in lakhs)
Deposits existing as on April 1, 2022 |
2,451.96 |
Deposits accepted during the year (from April 1, 2022 to
March 31, 2023) |
63.50 |
Deposits renewed during the year (from April 1, 2022 to March
31, 2023) |
158.98 |
Deposits paid/pre-matured during the year (from April 1, 2022
to March 31,2023) |
1,993.50 |
Deposits outstanding at the end of year i.e. at March 31,
2023 |
680.94 |
Deposits that have matured but not claimed as at the end of
the year i.e. at March 31, 2023 |
Nil |
Deposits that have matured and claimed but not paid as at the
end of the year i.e. at March 31,2023 |
Nil |
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 |
No |
The details of deposits which are not in compliance with the
requirements of Chapter |
Nil |
Note: The above details of deposits excludes deposits from Directors.
22. Vigil Mechanism/Whistle Blower
The Company has formulated and implemented Ethos Limited - Vigil
Mechanism/Whistle Blower Policy' to provide a formal mechanism to the Directors and
employees to report their concerns about unethical behaviour, actual or suspected fraud or
violation of the Company's Code of Conduct or Ethics Policy. The same is hosted on
the website of the Company at the link
https://www.ethoswatches.com/investors-information.The Policy provides for adequate
safeguards against victimisation of employees who avail of the mechanism and also provide
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.
During the year under review, the status of the concerns or complaints
reported stands as follows:
No. of concerns or complaints outstanding as at April 1, 2022 |
: Nil |
No. of concerns or complaints received during the year |
: Nil |
No. of concerns or complaints resolved during the year |
: Nil |
No. of concerns or complaints outstanding as at March 31,
2023 |
: Nil |
23. Performance Evaluation of the Board
In order to ensure that the Board and Board Committees are functioning
effectively and to comply with the statutory requirements, the annual performance
evaluation of the Board, Board Committees and Individual directors was conducted during
the year. The evaluation was carried out based on the criterion and framework approved by
the Nomination and Remuneration Committee. A detailed disclosure on the parameters and the
process of Board evaluation as well as the outcome has been provided in the Report on
Corporate Governance.
At a separate meeting of Independent Directors, the performances of
Non-Independent Directors, the Board as a whole and the Chairman were evaluated,
considering the views of Executive Directors and Non-Executive Directors.
24. Policy on Director's Appointment and Remuneration
The Company's policy on Directors' appointment and
remuneration and other matters provided in Section 178(3) of the Act, has been disclosed
in the Corporate Governance Report which forms part of this Annual Report.
The details of remuneration to Non-Executive Directors, is given in
Corporate Governance Report forming part of this Annual Report.
25. Risk Management
The Company has formed a Risk Management Committee to frame, implement
and monitor the risk management plan for the Company. The Committee is responsible for
monitoring and reviewing the risk management plan and ensuring its effectiveness. The
Audit Committee has additional oversight in the area of financial risks and controls. Any
major risks identified by the businesses and functions are systematically addressed
through mitigating actions on a continuing basis.
The Policy on Risk Management as approved by the Board is available on
the Company's website and can be accessed at
https://www.ethoswatches.com/investors-information.
26. Internal Financial Controls (IFC) and their Adequacy
The Company maintains adequate internal control systems, policies and
procedures for ensuring orderly and efficient conduct of the business, including adherence
to the Company's policies, safeguard of its assets, prevention and detection of
frauds and errors, accuracy and completeness of the accounting records and timely
preparation of reliable financial disclosures in all areas of its operations. The services
of internal and external auditors are sought from time to time as well as in-house
expertise and resources. The Company believes that it has sound internal control systems
commensurate with the nature and size of its business. The Company continuously upgrades
these systems in line with best-in-class practices.
These reports and deviations are regularly discussed with the
Management and actions are taken, whenever necessary. The Audit Committee of the Board
periodically reviews the adequacy of the internal control systems.
27. Employee Stock Option Plan
There is no employee stock option plan subsisting or continuing as on
date.
28. Particulars of Employees
The information pertaining to the remuneration and other details as
required under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided
in Annexure - VII which forms part of this Report.
In terms of the provisions Section 197(12) of the Companies Act, 2013,
read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, a statement showing the names and other particulars of employees
drawing remuneration in excess of the limits as set out in the said rules are provided in
this Annual Report.
In terms of the proviso to Section 136(1) of the Act, the Annual Report
is being sent to the Members of the Company excluding the aforesaid information. The said
information is available for inspection by the Members at the Registered Office/Corporate
Office of the Company during business hours on working days and Members interested in
obtaining such information may write to the Company Secretary and the same will be
furnished on request. Such details are also available on the Company's website at
https://www.ethoswatches.com/invest.ors-informat.ion.
29. 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 in Annexure - VIII and is forming part of this report.
30. Cost Records
Neither maintenance of cost records nor audit of cost records as
required under Section 148 of the Act read with relevant rules made thereunder is
applicable to the Company.
31. Committees of the Board
The various Committees of the Board focus on certain specific areas and
make informed decisions in line with the delegated authority.
The following statutory Committees are constituted by the Board
according to their respective roles and defined scope:
a) Audit Committee,
b) Nomination and Remuneration Committee,
c) Stakeholders Relationship Committee,
d) Corporate Social Responsibility Committee and
e) Risk Management Committee
Details of the composition, terms of reference and number of meetings
held for respective committees are given in the Report on Corporate Governance.
The Company has adopted Code of Conduct for its Directors and senior
management personnel and the same can be accessed using the following
https://www.ethoswatches.com/ investors-information.
All Directors and senior management personnel have affirmed compliance
with the Code of Conduct and Ethics for Directors and Senior Management.
32. Disclosure under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
The Company is committed to providing a safe and conducive work
environment to all its employees and associates. The Company has a Policy on Prevention of
Sexual Harassment at Workplace in line with the requirements of The Sexual Harassment of
Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013 covering all
employees, consultants, trainees, volunteers, third parties and/or visitors at all
business units or functions of the Company and its subsidiaries and/or its affiliated or
group companies are also covered by the said policy. Adequate workshops and awareness
programmes against sexual harassment are conducted across the organisation. The Company
has set up an Internal Complaints Committee for the aforesaid purpose and during the year,
there was no complaint received by the Company.
The Policy on Prevention of Sexual Harassment as approved by the Board
is available on the Company's website and can be accessed at
https://www.et.hoswotches.com/invest.ors-informotion.
33. Receipt of any commission/remuneration by Managing Director of
Company from its Holding or Subsidiary Company
KDDL Limited is the listed Holding Company of the Company. Mr.
Yashovardhan Saboo is the Chairman and Managing Director of KDDL Limited as well as the
Chairman and Managing Director of your Company. He receives managerial remuneration in
KDDL Limited in compliance with the provisions of section 197 read with rules made
thereunder of the Companies Act, 2013. Except for payment of sitting fees for attending
the Board and Committee meetings of the Company, he is not entitled to any remuneration
upto March 31, 2023. However, the Board of Directors of the Company, vide its meeting held
on March 28, 2023, approved re-appointment of Mr. Yashovardhan Saboo for a further term of
3 years commencing from April 1, 2023 upto March 31, 2026 along with payment of
remuneration, by way of Special Resolution passed through Postal Ballot on May 19, 2023.
Further, no subsidiary Company of the Company has paid any commission/remuneration to the
Directors of the Company for the FY 23.
34. Corporate Insolvency Resolution Process initiated Under the
Insolvency and Bankruptcy Code, 2016 (IBC)
There are no proceedings, initiated by any Financial Creditor or
Operational Creditor or by the Company, under the Insolvency and Bankruptcy Code, 2016 as
amended, before National Company Law Tribunal or other courts during the FY 23.
35. Green Initiatives
Pursuant to the relevant circulars issued by Ministry of Corporate
Affairs, Government of India (MCA) and Securities & Exchange Board of India and in
view of the prevailing situation of the pandemic, owing to the difficulties involved in
dispatching of the physical copies of the Notice of the 16th (Sixteenth) AGM
and the Annual Report of the Company for the FY 23, the said documents are being sent only
by email to the shareholders.
The Company supports the Green Initiative' undertaken by the MCA,
enabling electronic delivery of documents including Annual Report etc. to shareholders at
their e-mail address already registered with the Depository Participants ("DPs")
and Registrar and Transfer Agents ("RTA"). Additionally, the Company conducts
various meetings by means of electronic mode in order to ensure the reduction of its
carbon footprint.
36. Acknowledgements
Your Directors would like to thank and place on record their sincere
thanks and appreciation for the sustained support and co-operation extended by its
Members, Bankers, business associates, consultants, and various Government Authorities
during the year under review. Your Directors would also like to place on record its
sincere appreciation for the efforts put in by employees whose efforts, hard work and
dedication has enabled the Company to achieve all recognitions during the year.
By order of the Board of Directors of Ethos Limited |
|
|
Yashovardhan Saboo |
Date : August 5, 2023 |
Chairman and Managing Director |
Place: Chandigarh |
DIN-00012158 |