You are here » Home » Companies » Company Overview » Kerala Ayurveda Ltd

Kerala Ayurveda Ltd.

BSE: 530163 Sector: Health care
NSE: N.A. ISIN Code: INE817B01025
BSE LIVE 15:40 | 22 Sep 72.60 -1.30
(-1.76%)
OPEN

71.15

HIGH

73.80

LOW

71.15

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 71.15
PREVIOUS CLOSE 73.90
VOLUME 10150
52-Week high 122.80
52-Week low 56.00
P/E 40.11
Mkt Cap.(Rs cr) 77
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 71.15
CLOSE 73.90
VOLUME 10150
52-Week high 122.80
52-Week low 56.00
P/E 40.11
Mkt Cap.(Rs cr) 77
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kerala Ayurveda Ltd. (KERALAAYURVEDA) - Director Report

Company director report

To

The Members

Your Directors have pleasure in presenting the 24th Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended 31st March 2016.

FINANCIAL RESULTS

The Company's financial performance during the year 2015-16 as compared to the previousyear 2014-15 is summarized below:

Rs. in Lakhs

Standalone

Consol dated

Particulars 2015-16 2014-15 2015-16 2014-15
Product Revenues 2757.67 2399.72 2869.97 2427.22
Service Revenues & Other Income 774.20 670.68 1999.38 1720.96
Gross Income 3531.87 3070.40 4869.35 4148.18
Less: VAT & Excise Duty 267.47 241.71 267.47 241.71
Net Income from Sales/Services 3264.40 2832.37 4601.88 3906.47
Profit before Interest Depreciation & Tax (EBITDA) 416.38 329.54 763.64 607.71
Profit/Loss before extraordinary items 249.92 157.44 410.83 317.43
Extraordinary Items
Profit Before Tax 249.92 157.44 410.83 317.43
Net Profit/{Loss) after Tax 172.6 110.58 273.68 251.50
Minority Interest in Profit ... 3.56 15.94
Net Consolidated Profit/(Loss] 172.60 110.58 270.12 235.56
Loss brought forward from previous year (869.09) (906.36) (3056.34) (3291.90)
Loss Carried to the Balance Sheet (696.49) (869.09) (2884.96) (3056.34)

REVIEW OF OPERATIONS

During the Financial Year under review the operational results ended with a Profitbefore Extraordinary items at Rs. 250 Lakhs as against Rs. 157 lakhs in the previous year.The Net revenue of the company stands at Rs. 3264 Lakhs as against Rs. 2832 Lakhs in theprevious Financial Year reporting an 15% growth. The consolidated net revenue includingits subsidiaries for the year is Rs. 4602 Lakhs against Rs. 3906 Lakhs during previousyear report an 18% growth.

During the Financial Year under review your company was able to improve the marketshare in Kerala and made a big progress outside Kerala.

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

Your company has seven subsidiaries including one step down subsidiary as on 31stMarch 2016 and the details are as under:

SL Name Location % of holding
1 Ayurvedagram Herit age W ellness Cent re Pvt . Lt d. India 74%
2 Ayurvedic Academ y Inc. USA 100%
3 Nut raveda Inc. USA 100%
4 Ayu Nat ural M edicine Clinic P.S. USA 100%
5 CM S Kat ra Ho ldings LLC USA 81.67%
6 CM S Kat ra Nursing LLC USA 100%*
7 Nut raveda Pt e Lt d. Singapo re 100%

* CMS Katra Holdings LLC holds 51% shareholding in CMS Katra Nursing LLC and NutravedaInc. holds the balance 49% shareholding; hence it is a fully owned step down subsidiary ofyour company.

PERFORMANCE OF SUBSIDIARIES Indian Subsidiary

During the year under review M/s. Ayurvedagram Heritage Wellness Centre Pvt. Ltd. hasachieved a turnover of Rs. 721 Lakhs against a turnover of Rs. 571 Lakhs in the previousfinancial year clocking a sound growth of 26%. The Net EBITDA of the company is Rs.241Lakhs against Rs. 179 Lakhs in the previous year.

Overseas Subsidiaries

The combined turnover of overseas subsidiaries was Rs. 681 Lakhs as compared to Rs. 530Lakhs in the previous year. Kerala Ayurveda Academy is currently offering certifiedcourses in the state of Washington and California and also offers a distant learningcourse across USA.

CONSOLIDATED FINANCIAL STATEMENTS

As per Rule 8 of Companies (Accounts) Amendments Rules 2016 a report on thehighlights of performance of subsidiaries associates and joint venture companies andtheir contributions to the overall performance of the company during the period underreport is attached as Annexure 1. Any member intented to have a copy of Balancesheet and other financial statement of these Companies may write to Company Secretary. Itshall also be kept for inspection during business hours by any shareholder in theregistered office of the Company and the respective offices of its subsidiary companies.

It shall also be made available on the website of the Company www.keralaayurveda.biz/investor-relationship under the "Investors" Tab.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES DURING THE YEAR

During the financial year ended 31st March 2016 no entity became or ceased to be thesubsidiary joint venture or associate of the Company.

DIVIDEND

In view of the accumulated losses of the past your Directors are not in a position torecommend any dividend for the current year.

RESERVES

During the year the total reserves and surplus of the company has improved to Rs. 512Lakhs from Rs. 339 Lakhs. During the year company earned a net surplus of Rs. 173 Lakhs.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Companyoccurred between the end of the financial year to which this financial statements relatedand the date of this report.

CHANGE IN THE NATURE OF BUSINESS IF ANY

There was no change in the nature of business of the Company during the financial yearended 31st March 2016.

BOARD OF DIRECTORS

Appointment / Reappointment / Resignation of Directors

Pursuant to the provisions of Section 152 of the Companies Act 2013 and in terms ofArticles of Association of the Company Ms. Katarzyna Zimpel (DIN 00264084) Director ofthe company retires by rotation at ensuing Annual General Meeting and being eligibleoffer herself for re-appointment. The Board of Directors recommends her re-appointment.Mr. M S Seetharaman (DIN 07109974) Additional Director has resigned with effect from 13thAugust 2015. Mr. A. T. Jacob (DIN 01663815) Director has resigned with effect from 28thMay 2016. Mr. Kshiti Ranjan Das (DIN 07212449) was appointed as an AdditionalIndependent Director on 6th November 2015. He offers himself as Non Executive IndependentDirector in this Annual General Meeting. Mr. Gokul Patnaik (DIN 00027915) was appointed asan Additional Non Independent Director with effect from 28th May 2016. He offers himselfas Non Executive Non independent Director in this Annual General Meeting.

Ms. Anusha Rajeswaran Company Secretary has resigned w.e.f.30th June 2015 and Ms.Itti Bhargava has joined as Company Secretary on 13th August 2015. Due to some personalreasons Ms. Itti Bhargava Company Secretary has resigned w.e.f. 11th June 2016.

None of the directors are disqualified u/s 164(2) of the Companies Act 2013.

MEETINGS OF THE BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in advance to the Directors. Duringthe year five Board Meetings and four

Audit Committee Meetings were convened and held. The details of which are given in theCorporate Governance Report. The intervening gap between the Meetings was within theperiod prescribed under the Companies Act 2013 and the listing agreement with the BombayStock Exchange. During the financial year 2015-16 the Board of Directors of the Companymet 5 (five) times on 29th May 2015 13th August 2015 29th September 2015 6thNovember 2015 and 4th February 2016.

Further a separate Meeting of the Independent Directors of the Company was also heldon 23rd December 2015 whereat the prescribed items enumerated under Schedule IV to theCompanies Act 2013 and clause 25(4) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 were discussed.

DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE- APPOINTMENT

Mr.Ronald George Pearce (DIN 00260166) Mr. M C Mohan (DIN 00633439) Mr. SKrishnamurthy (DIN 00140414) Mr.Kshiti Ranjan Das (DIN 07212449) are IndependentDirectors on the Board of the company.

All the Independent Directors have submitted their disclosures to the Board that theyfulfill all the requirements as stipulated in Section 149(6) of the Companies Act 2013 soas to qualify themselves to be appointed as Independent Directors under Section 149 (6) ofthe Companies Act 2013 and the Rules made thereunder.

DETAILS PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013

Details pursuant to section 197(12) of the Companies Act 2013 read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 form part of thisReport and are annexed herewith as Annexure 2.

FORMAL ANNUAL EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualperformance evaluation of its own performance the directors individually as well as theevaluation of the working of its Audit Nomination & Remuneration Committees. Themanner in which the evaluation has been carried out has been explained in the CorporateGovernance Report.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS KEY MANAGERIAL PERSONNEL AND OTHEREMPLOYEES

In adherence of Section 178(1) of the Companies Act 2013 the Board of Directors ofthe Company approved a policy on directors' appointment and remuneration includingcriteria for determining qualifications positive attributes independence of a directorand other matters provided u/s 178(3) based on the recommendations of the Nomination andRemuneration Committee.

The broad parameters covered under the Policy are - Company Philosophy GuidingPrinciples Nomination of Directors Remuneration of Directors Nomination andRemuneration of the Key Managerial Personnel (other than Managing/ Whole-Time Directors)Key-Executives and Senior Management and the Remuneration of other employees. TheCompany's Policy relating to appointment of Directors payment of Managerial remunerationDirectors' qualifications positive attributes independence of Directors and otherrelated matters as provided under Section 178(3) of the Companies Act 2013 is furnishedin Annexure 3 and forms part of this Report.

AUDITORS:

1.Statutory Auditors

M/s. Biju George & Co Chartered Accountants Vellaringattu Towers Thodupuzha 685584 were appointed as Statutory Auditors of the company upto the conclusion of AnnualGeneral Meeting in 2019 subject to ratification at every Annual General Meeting. Companyhas received a letter pursuant to Section 139 of the Companies Act 2013 from M/s. BijuGeorge & Co. Chartered Accountants Vellaringattu Towers Thodupuzha 685 584confirming consent and their eligibility for acting as Statutory Auditors of the Companyif the appointment is ratified at the ensuing Annual General Meeting. The Board alsorecommends their appointment as Statutory Auditors for the ensuing financial year.

Statutory Auditors' Report

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditorsremarks in their report are self explanatory and do not call for any further comments.

2. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act 2013 read withcorresponding Rules framed there under M/s. SVJS & Associates were re-appointed asthe Secretarial Auditors of the Company to carry out the secretarial audit for the yearending 31st March 2016.

Secretarial Audit Report

A Secretarial Audit Report issued by the Secretarial Auditor in Form No. MR-3 isannexed with this Report as Annexure

4.The said report is self-explanatory and does not call for any comments. TheSecretarial Auditors' Report does not contain any qualification reservation or adverseremark other than Disclosures related requirements in Director’s Report in theFinancial year 2014-15 which have been complied with in Financial year 2015-16.

3. Internal Audit & Controls

The Company appointed Mr. Mathew Joseph Chartered Accountant as its Internal Auditor.During the year the Company continued to implement their suggestions and recommendationsto improve the control environment. Their scope of work includes review of processes forsafeguarding the assets of the Company review of operational efficiency effectiveness ofsystems and processes and assessing the internal control strengths in all areas. InternalAuditors findings are discussed with the process owners and suitable corrective actionstaken as per the directions of Audit Committee on an ongoing basis to improve efficiencyin operations.

4. Cost Auditors

In terms of the Cost Audit Order dated 31st December 2014 notified by the Ministry ofCorporate Affairs which exempted certain industries from the purview of Cost Audit yourCompany is not required to get the cost audit done for financial year 2015-16.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act 2013a Vigil Mechanism / Whistle Blower Policy for directors and employees to report genuineconcerns has been established. The Vigil Mechanism / Whistle Blower Policy has beenuploaded on the website of the Company at www.keralaayurveda.biz under"Investors" Section.

The Policy is an extension of the Code of Conduct for Directors & Senior ManagementPersonnel and covers any unethical and improper or malpractices and events which havetaken place/ suspected to take place:

As per the policy all Protected Disclosures should be addressed to the VigilanceOfficer of the Company or to the Chairman of the Audit Committee in exceptional cases.

RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.

The Board of Directors has adopted a risk management policy for the company outliningthe parameters of identification assessment monitoring and mitigation of various risks.

INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested and certified byStatutory as well as Internal Auditors. Significant audit observations and follow upactions thereon are reported to the Audit Committee.

NSIC CRISIL RATING

Kerala Ayurveda Ltd has been awarded NSIC-CRISIL rating of SE 2A which is valid upto24th March 2017.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS ORTRIBUNALS

There was no significant and material order passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.

CORPORATE SOCIAL RESPONSIBILITY

Your company always had a deep sense of responsibility towards the community. Companyconducted medical camps and free medical checkups at various places. Diabetic Awarenesscampaigns were held to create awareness. Special Orientation training session conducted onYoga Day to the public. Corporate Social Responsibility provisions of the Companies Act2013 are not applicable to the company.

DEPOSITS

In terms of the provisions of Section 73 of the Companies Act 2013 the company hasnot accepted any deposits from the public during the financial year under review and thereare no outstanding fixed deposits from the pubic as on 31st March 2016.

CORPORATE GOVERNANCE

Your company has complied with corporate governance norms as stipulated by SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015. A detailed report onCorporate Governance in line with requirements of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 is attached to thisreport. A certificate from statutory auditors confirming the compliance of CorporateGovernance is also attached to this report.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company comprises 4 (Four)Members namely Mr. S . Krishnamurthy Chairman Mr.M.C. Mohan Mr.Kshiti Ranjan Das andMs.Katarzyna Zimpel are the members of Audit Committee.

Majority of them being Independent Directors except Ms.Katarzyna Zimpel who is aNon-Independent Non-Executive Director. The Board accepted the recommendations of theAudit Committee whenever made by the Committee during the year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations performance and future outlook of your company and itsbusinesses is given in the Management Discussion and Analysis which forms part of thisreport.

EXTRACT OF ANNUAL RETURN

As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual Return in FormMGT 9 as a part of this Annual Report as Annexure 5 is annexed.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS UNDER SECTION 186

The Company has provided following loans and guarantees and made following investmentspursuant to Section 186 of the Companies Act 2013:

Name of the entity Relation Amt in Rupees Lakhs Particulars of loans guarantees and investments Purpose for which the loan guarantee and investment are proposed to be utilised
Nutraveda Inc. USA 100% subsidiary 1159.80 Interest free Working Capital Loan given by KAL to subsidiary To meet the working capital requirement
Ayurvedic Academy Inc. USA 100% subsidiary 1162.26 Interest free Working Capital Loan given by KAL to subsidiary To meet the working capital requirement
CMS-Katra Holdings LLC USA 81.67% subsidiary 828.67 Interest free Working Capital Loan given by KAL to subsidiary To meet the working capital requirement
Nutraveda PTE Ltd Singapore 100% subsidiary 0.44 Interest free Working Capital Loan given by KAL to subsidiary To meet the working capital requirement

Current borrowings of the company are within the limits of Sec. 180(1) (c) of theCompanies Act 2013

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

The particulars of every contract or arrangements entered into by the Company withrelated parties referred to in subsection (1) of Section 188 of the Companies Act 2013including certain arm's length transactions under third proviso is attached as Annexure6 in Form AOC-2 that forms an integral part of this report.

DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) ofSection 134 of the Companies Act 2013 shall state that—

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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;

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

(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE

Company has adopted a policy for prevention of Sexual Harassment of Women at workplaceas per the provisions of Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013 and has set up Committee for implementation of said policy.During the year Company has not received any complaint of harassment.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information pertaining to conservation of energy technology absorption foreignexchange earnings and outgo as required under Section 134(3) (m) of the Companies Act2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is furnished in Annexure7 and forms part of this Report

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most importantassets. Your Company continuously invests in attraction retention and development oftalent on an ongoing basis. A number of programs that provide focused people attention arecurrently underway. Your Company thrust is on the promotion of talent internally throughjob rotation and job enlargement.

RESEARCH AND DEVELOPMENT

The Research and Development (R&D) Center of KAL is well-equipped and is engaged invarious Research activities spanning across all areas of Ayurvedic Research. During thisyear Ghritham conversion into Soft Gelatin Capsules and Kashayam into Kashayam Tabletswere carried out successfully and are actively engaged in extending the range of existingproducts.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of sevenyears. Therefore there were no funds which were required to be transferred to InvestorEducation and Protection Fund (IEPF).

LISTING WITH STOCK EXCHANGES:

The equity shares of the company are listed on Bombay Stock Exchange and the Companyconfirms that it has paid the Annual Listing Fees for the year 2016-2017 to BSE.

ACKNOWLEDGEMETS

The Board places on record its appreciation for the continued patronage supportco-operation extended to the Company by its shareholder customers bankers and all theGovernment and statutory agencies with whose help cooperation and hard work the Companyis able to achieve the results. Your directors would further like to record appreciationto the efforts of every employees for their valuable contribution to the Company.

By order of the Board of Directors
For Kerala Ayurveda Limited
Sd/-
Ramesh Vangal
Place: Bengaluru Chairman
Date :9th August 2016 (DIN 00064018)