Your Directors are pleased to present the 136th Annual Report together withthe Audited Financial Statements of your Company for the year ended 31st March2017.
| || ||(Amount in Rupees) |
|Particulars ||Year Ended 31.03.2017 ||Year Ended 31.03.2016 |
|Total Turnover ||38211310 ||53724881 |
|Profit before Depreciation Interest and Tax ||4305135 ||6720532 |
|Finance cost ||116358 ||385737 |
|Depreciation and Amortization expenses ||2550688 ||3299751 |
|Profit before tax ||1638089 ||3035044 |
|Tax expenses ||(41171) ||(96841) |
|Profit for the year ||1679260 ||3131885 |
OVERALL PERFORMANCE AND OUTLOOK
During the year under review the Sales and Other Income decreased by 29% from Rs.53724881/-to Rs. 38211310/-. The profit aftertax has decreased from Rs. 3131855/-to Rs. 1679260/-. The profit before tax has decreased from Rs.3035044/- toRs.1638089/-.
The Company is exploring various options to improve performance in the coming year.
Reserves of the Company were Rs. 156060094/- as on 31st March 2017.During the year under review the Company has not transferred any amount to the GeneralReserves.
With a view to conserve resources your Directors have not recommended any dividend forthe financial year 2016-17. During previous year the Company paid dividend @5% i.e. Rs.0.50/- per equity share of face value of Rs.10/-each.
The extracts of Annual Return pursuant to the provisions of Section 92(3) of theCompanies Act 2013 read with Rule 12 of the Companies (Management and Administration)Rules 2014 in the prescribed Form MGT-9 is annexed herewith as Annexure "A".
NUMBER OF MEETINGS OF THE BOARD
During the year under review four Board Meetings and four Audit Committee Meetingswere convened and held. A calendar of Meetings is prepared and circulated in advance toyour Directors. The intervening gap between the two Meetings was within the periodprescribed under the Companies Act 2013. In addition the Independent Directors had ameeting during the year under review.
DIRECTORS RESPONS?ILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the Companies Act 2013 withrespect to the Directors' Responsibility Statement your Directors based on theirknowledge and belief and the information and explanations obtained confirm that:
(a) in the preparation of the annual accounts for the year ended 31st March2017 the applicable accounting standards have been followed along with proper explanationrelating to material departures;
(b) such accounting policies selected and applied consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company for the financial year ended 31st March 2017 and ofthe profit and loss of your Company for that period;
(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(d) annual accounts for the financial year ended 31st March 2017 have beenprepared on a going concern basis;
(e) internal financial controls had been laid down and followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; and
(f) proper systems had been devised to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to section 134(3)(d) of the Act your Company confirm having receivednecessary declarations from all the Independent Directors under section 149(7) of theCompanies Act 2013 declaring that they meet the criteria of independence laid down underSection 149(6) of the Companies Act 2013 and Regulation 16(b) of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
NOMINATION AND REMUNERATION POLICY
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Key Managerial Personnel andSenior Management Personnel and their remuneration. The Nomination and Remuneration policyis annexed herewith as Annexure "B" to this report.
The tenure of appointment of M/s. Kalyaniwalla & Mistry Chartered Accountants iscompleting at the forthcoming Annual General Meeting. The Board on the recommendation ofAudit Committee proposes to appoint M/s. M L Bhuwania and Co. LLP Chartered Accountants(Firm Registration No. 101484W/W100197) as Statutory Auditors of your Company for a termof 5 years commencing from the conclusion of 136th Annual General Meeting tillthe conclusion of 141st Annual General Meeting subject to ratification byMembers at every Annual General Meeting. As required under the provisions of Section 139and Section 141 of the Companies Act 2013 your Company has received written certificatefrom the Statutory Auditors proposed to be appointed to the effect that theirappointment if made would be in conformity with the limits specified in the saidSection.
The Report received from M/s. Kalyaniwalla & Mistry Chartered Accountants for thefinancial year 2016-17 does not contain any qualifications reservations or adverseremarks.
A proposal seeking appointment of M/s. M L Bhuwania and Co. LLP CharteredAccountants as the Statutory Auditors of your Company is provided as a part of the Noticeconvening the ensuing Annual General Meeting.
M/s. Suresh Surana & Associates LLP were the Internal Auditors of your Company forthe financial year 2016-17. Based on the recommendation of the Audit Committee of yourCompany the Board of Directors of your Company has re-appointed M/s. Suresh Surana &Associates LLP as the Internal Auditors of your Company for the financial year 2017-18.
Pursuant to the provisions of Section 204 of the Companies Act 2013 the Board ofDirectors of your Company have re- appointed M/s. Ragini Chokshi & Co. a firm ofCompany Secretaries in Practice to undertake the Secretarial Audit of your Company for thefinancial year 2017-18. The Secretarial Audit Report for the financial year 2016-17 formspart of this Annual Report and is appended as Annexure "C" to the Board'sreport. The Secretarial Audit Report does not contain any qualifications reservations oradverse remarks.
All the assets of your Company including Buildings Equipment etc. have beenadequately insured.
Your Company's shares are tradable compulsorily in electronic form and your Company hasestablished connectivity with both the depositories i.e. National Securities DepositoryLimited (NSDL) and Central Depository Services (India) Limited (CDSL).
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel (KMP) of your Company are Mrs. Shalini D. PiramalManaging Director Mr. Sunil Kumar Gupta Chief Financial Officer and Mr. Kunal ChhatwaniCompany Secretary. There is no change in KMP during the year under review.
Pursuant to section 134(3) of the Act read and in terms of Regulation 17(10) of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 your Company hasset up a policy for the performance evaluation of all Directors which is available on thewebsite of your Company.
The Board of Directors has put in place a process to formally evaluate theeffectiveness of the Board its Committees along with performance evaluation of eachDirector to be carried out on an annual basis. Accordingly the annual performanceevaluation of the Board its Committees and each Director was carried out during thefinancial year 2016-17.
Performance of each of your Directors is evaluated based on several factors by theentire Board excluding the Director being evaluated. Your Company has also set upPerformance Evaluation Policy for its Independent Directors and Executive Directorsinter-alia which include independent view on Key appointments and strategy formulationsafeguard of stakeholders interest raising concerns if any to the Board update ofskills and knowledge strategic planning for finance and business related operationalperformance level of the Company qualification and leadership skills. The Board ofDirectors of your Company discusses and analyses its own performance on an annual basistogether with suggestion for improvements thereon based on the performance objectives setfor the Board as a whole. The Board approved the evaluation results. Your Company hasformulated a separate Evaluation Policy for its Board members which is available on thewebsite of your Company.
None of the independent directors are due for re-appointment.
TRAINING OF INDEPENDENT DIRECTORS AND FAMILIARISATION PROGRAMME
The Board members are provided with necessary documents/brochures reports and internalpolicies to enable them to familiarise with your Company's procedures and practices.Periodic presentations are made at the Board Meetings and the Board Committee Meetings onbusiness and performance updates of your Company global business environment businessstrategy and risks involved.
Every new Independent Director of the Board attends an orientation program tofamiliarize the new inductees with the strategy operations and functions of your Company.The Executive Directors/Senior Management Personnel make presentations to the inducteesabout your Company's strategy operations products markets finance human resourcestechnology quality facilities and risk management.
Further at the time of appointment of an Independent Director your Company issues aformal letter of appointment outlining his/her role function duties and responsibilitiesas a Director. The format of letter of appointment is available on the website of yourCompany. Your Company has set up a separate Familiarisation program for newly appointedIndependent Directors and the same is available on the website of your Company.
CODE OF BUSINESS CONDUCT AND ETHICS FOR DIRECTORS/ MANAGEMENT PERSONNEL
The Code of Business Conduct and Ethics for Directors/Management Personnel (theCode')as adopted by the Board is a comprehensive Code applicable to Directors and SeniorManagement Personnel of your Company. The Code while laying down in detail the standardsof business conduct and ethics also deals with governance aspects. A copy of the Code hasbeen uploaded on your Company's website www. kempnco.com. The Code has been circulated toDirectors and Management Personnel and its compliance is affirmed by them regularly on anannual basis.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIESACT 2013
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the year under review and hence the said provision is notapplicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has established a Policy for determining related party transactions. TheAudit Committee oversees the related party transactions. Related Party Transaction Policyof the Company has been displayed on the Company's website at the link - www.kempnco.com
All contracts or arrangements entered into by the Company with Related Parties havebeen done at arm's length and are in the ordinary course of business.
Pursuant to Section 134 of the Companies Act 2013 read with Rule 8(2) of the Companies(Accounts) Rules 2014 the particulars of such transactions are provided in Form AOC-2which is annexed herewith as Annexure "D" to this report. Related Partydisclosures as per AS-18 have been provided in Note No. 26 of Financial Statements.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no adverse material changes or commitments occurred after 31stMarch 2017 which may affect the financial position of the Company or may requiredisclosure.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As the Company is not engaged in any manufacturing activity there are no particularsto be disclosed under Section 134(3)(m) of the Companies Act 2013 read with Rule 8 of theCompanies (Accounts) Rules 2014 as regards conservation of energy or technologyabsorption. Further during the year under review the Company has neither earned norspent any foreign exchange.
The Company has a risk management framework comprising risk governance structure anddefined risk management process. The risk governance structure of the Company is a formalorganization structure with defined roles and responsibilities for risk management. Theprocesses and practices of risk management of the Company encompass risk identificationclassification and evaluation.
DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS
Mr. M.K. Arora Director of your Company retires by rotation and being eligible offershimself for re-appointment.
NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO SUBSIDIARIESJOINT VENTURE ORASSOCIATE COMPANIES DURING THE YEAR
Your Company does not have any subsidiary. During the year under review nocompanies have become/ceased to be subsidiaries joint venture or associate companies ofthe Company.
During the year under review your Company has not invited or accepted any deposits.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and your Company's operations in future.
INTERNAL FINANCIAL CONTROL
Your Company has put in place adequate internal financial controls with reference tothe financial statements. The Board has adopted the policies and procedures for ensuringthe orderly and efficient conduct of its business including adherence to the Company'spolicies the safeguarding of its assets prevention and detection of frauds and errorsaccuracy and completeness of the accounting records and timely preparation of reliablefinancial disclosures. During the year such controls were tested and no reportablematerial weaknesses in design or operation were observed.
Your Company has established a Vigil Mechanism Policy for your Directors employees andstakeholders to safeguard against victimization of persons who use vigil mechanism andreport genuine concerns. The Audit Committee oversees the vigil mechanism complaints. TheVigil Mechanism Policy of the Company has been displayed on the Company's website -www.kempnco.com
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
In terms of provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition & Redressal) Act 2013 your Company has formulated a Policy to preventSexual Harassment of Women at workplace and constituted Internal Complaints Committees(ICC). During the year no cases alleging sexual harassment of Women at workplace has beenreceived by ICC.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND
Any unclaimed or unpaid Dividend relating to the financial year 2009-10 is due forremittance on 23rd August 2017 to the Investor Education and Protection Fundestablished by the Central Government.
The paid-up Equity Share Capital of the Company as on 31st March 2017 stoodat Rs. 10802000/-. During the year under review the Company has not issued shares withdifferential voting rights nor has granted any stock options or sweat equity. As on 31stMarch 2017 none of the Directors of the Company holds instruments convertible intoequity shares of the Company.
The Audit Committee comprises of Mrs. Shalini D. Piramal Mr. Ranjan Sanghi and Mr.Shekhar Shah. All the recommendations made by the Audit Committee were deliberated andaccepted by the Board. Mr. Ranjan Sanghi Chairman of the Audit Committee was present atthe 135th Annual General Meeting of the Company held on 20thSeptember 2016 to answer the shareholders queries.
PARTICULARS OF EMPLOYEES
Your Company has no employee whose remuneration details are required to be provided asper the provisions of Section 197(12) of the Companies Act 2013 (the Act) read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
During the year under review no stock options have been granted by your Company.
REMUNERATION RATIO OF THE DIRECTORS/KEY MANAGERIAL PERSONNEL (KMP)/EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of yourCompany is furnished hereunder:
|Sr. No ||Name ||Designation ||Remuneration paid for the Financial Year 2016-17 |
|1 ||Mrs. Shalini D. Piramal ||Managing Director ||Rs. 2461800/- |
|2 ||Mr. Sunil Kumar Gupta ||Chief Financial Officer ||Rs. 2956574/- |
|3. ||Mr. Kunal Chhatwani ||Company Secretary ||Rs. 800334/- |
1. Your Directors' Remuneration (including commission and variable pay) to the medianremuneration of the employees of your Company for the year 2016-17 was as under:
|Director's Name ||Ratio of remuneration of each Director to the median employees1 remuneration |
|Mrs. Shalini D. Piramal ||3.7X |
2. The Percentage increase in remuneration of Managing Director Chief FinancialOfficer and Company Secretary were as under:
|Name ||Designation ||Increase |
|Mrs. Shalini D. Piramal ||Managing Director ||0% |
|Mr. Sunil Kumar Gupta ||Chief Financial Officer ||6% |
|Mr. Kunal Chhatwani ||Company Secretary ||18% |
The percentage increase in the median remuneration of employees for the financial year2016-17 is around 13%. The percentage increase in the median remuneration is calculatedfor comparable employees and does not include employees who were not eligible.
3. The number of permanent employees on the rolls of the Company - 7
4. The Percentage increase in salaries of the managerial personnel at 50thpercentile is 5%. The Percentage increase in salaries of the non-managerial personnel at50th percentile is 3%. The increase/decrease in remuneration is not solelybased on the Company's performance but also includes various other factors like individualperformance experience skill sets academic background industry trends economicsituation and future growth prospects etc. besides the Company performance. There are noexceptional circumstances for increase in the managerial remuneration.
5. The remuneration paid to the Directors is as per the Remuneration Policy of theCompany.
Industrial relations remained cordial throughout the year under review.
Your Directors wish to place on record their appreciation for the dedicated services ofthe employees of your Company at all levels.
|By Order of the Board of Directors || |
|SHAILINI D. PIRAMAL ||RANJAN SANGHI |
|Managing Director ||Director |
|(DIN No.01365328) ||(DIN No. 00275842) |
|Place: Mumbai || |
|Dated: 30th May 2017 || |