Your Directors are pleased to present the 137th Annual Report togetherwith the Audited Annual Accounts of your Company for the year ended 31st March 2018
|FINANCIAL RESULTS || || |
| || || |
( Rs in thousand)
|Particulars || |
Year Ended 31.03.2018
Year Ended 31.03.2017
|Revenue from operations || |
|Profit before Depreciation Interest and Tax || |
|Finance cost || |
|Depreciation and Amortization expenses || |
|Profit before tax || |
|Tax expenses: || || |
|1. Deferred tax || |
|2. Excess provision for tax relating to prior year || |
|Profit for the year || |
OVERALL PERFORMANCE AND OUTLOOK
During the year under review the Sales and Other Income declined by4.89% from Rs 53312 thousand to Rs 50701 thousand. The profit before tax has decreasedfrom Rs 17013 thousand to Rs 12991 thousand. However the profit after tax has increasedfromRs 14106 thousand to Rs 18177 thousand due to reversal of deferred tax providedearlier as per new accounting standards IndAS.
The Company is exploring various options to improve performance in thecoming year.
RESERVES & DIVIDEND
During the year under review as well as the previous year the Companyhas not transferred any amount to the General Reserves. As on 31st March 2018Reserves and Surplus of the Company were at Rs 1239 Thousands. Your Directors are pleasedto recommend for your consideration a dividend of Re. 1/- (Rupee One only) per equityshare of Rs 10/- each for the financial year 2017-18. Your Company had not declared anydividend for the financial year 2016-17.
The extracts of Annual Return pursuant to the provisions of Section92(3) of the Companies Act 2013 read with Rule 12 of the Companies (Management andAdministration) Rules 2014 in the prescribed Form MGT-9 is annexed herewith as Annexure"A".
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards i.e. SS-1 andSS-2 relating to Meetings of the Board of Directors' and General Meetings'respectively have been duly followed by the Company.
NUMBER OF MEETINGS OF THE BOARD
During the year under review four Board Meetings and four AuditCommittee Meetings were convened and held. A calendar of Meetings is prepared andcirculated in advance to your Directors. The intervening gap between the two Meetings waswithin the period prescribed under the Companies Act 2013. In addition the IndependentDirectors had a meeting during the year under review.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the CompaniesAct 2013 with respect to the Directors' Responsibility Statement your
Directors based on their knowledge and belief and the information andexplanations obtained confirm
(a) in the preparation of the annual accounts for the year ended 31stMarch 2018 the applicable accounting standards have been followed along with properexplanation relating to material departures; (b) such accounting policies selected andapplied consistently and made judgments and estimates that are reasonable and prudent soas to give a true and fair view of the state of affairs of the Company for the financialyear ended 31 st March 2018 and of the profit and loss of your Company for that period;
(c) proper and sufficient care has been taken for the maintenance ofadequate accounting records in accordance with the provisions of the
Companies Act 2013 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; (d) annual accounts for thefinancial year ended 31 st March 2018 have been prepared on a going concern basis;
(e) internal financial controls had been laid down and followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and (f) proper systems had been devised to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
DECLARATION OF INDEPENDENT DIRECTORS
Pursuant to section 134(3)(d) of the Act your Company confirm havingreceived necessary declarations from all the Independent Directors under section 149(7) ofthe Companies Act 2013 declaring that they meet the criteria of independence laid downunder Section 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 RemunerationCommittee framed a policy for selection and appointment of Directors Key ManagerialPersonnel and Senior Management Personnel and their remuneration. The policy formulatesthe criteria for determining qualifications competencies positive attributes andindependence for the appointment of a Director (executive/non-executive) and also thecriteria for determining the remuneration of the Directors KMP and other employees.Nomination and Remuneration Policy of the Company has been displayed on the Company'swebsite i.e. www.kempnco.com.
AUDITORS Statutory Auditors
At the 136th Annual General Meeting held on 4th August 2017 M/s. M LBhuwania and Co. LLP Chartered Accountants (Firm Registration
No. 101484W/W100197) were appointed as Statutory Auditors of theCompany to hold office for a term of 5 years commencing from the conclusion of 136thAnnual General Meeting till the conclusion of 141st Annual General Meeting subject toratification of appointment by the
Members of the Company in each Annual General Meeting.
The Companies (Amendment) Act 2017 published in the Gazette of Indiaon January 3 2018 amended few sections of the Companies
Act 2013 including omission of first proviso to Section 139(1) of theCompanies Act 2013 which provided for ratification of
Statutory Auditors by Members at every Annual General Meeting. Theamendment to said section is already effective from May 7 2018.
In view of the above the Board of Directors of the Company haveproposed partial modification of previous resolution of the Members passed at the 136thAnnual General Meeting of the Company on appointment of Statutory Auditors and recommendto continue appointment of M/s. M L Bhuwania and Co. LLP Chartered Accountants (FirmRegistration No. 101484W/W100197) Statutory Auditors of the Company for a period of fiveyears commencing from the conclusion of 136th Annual General Meeting till the conclusionof 141st Annual General Meeting of the Company without seeking any further ratificationof their appointment from Members at this Annual General Meeting and ensuing Annual
General Meetings till the tenure of the Statutory Auditors.
The Notes on financial statements referred to in the Auditors Reportare self explanatory and do not call for any further comments. The Auditors Report doesnot contain any qualification reservation or adverse remark.
Pursuant to the provisions of Section 204 of the Companies Act 2013the Board of Directors of your Company have re- appointed M/s. Ragini
Chokshi & Co. a firm of Company Secretaries in Practice toundertake the Secretarial Audit of your Company for the financial year 2018-19. TheSecretarial Audit Report for the financial year 2017-18 forms part of this Annual Reportand is appended asAnnexure "B" to the Board's report. The SecretarialAudit Report does not contain any qualifications reservations or adverse remarks.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of your Company are Mrs. Shalini D.Piramal Managing Director; Mr. Sunil Kumar Gupta Chief Financial
Officer and Mr. Kunal Chhatwani Company Secretary. There is no changein Key Managerial Personnel during the year under review.
Pursuant to section 134(3) of the Act read and in terms of Regulation17(10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015your Company has set up a policy for the performance evaluation of all Directors which isavailable on the website of your Company.
The Board of Directors has put in place a process to formally evaluatethe effectiveness 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 2017-18.
Performance of each of your Directors is evaluated based on severalfactors by the entire Board excluding the Director being evaluated. Your Company has alsoset up Performance 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 of skills and knowledge strategic planning for financeand business related operational performance level of the Company qualification andleadership skills. The Board of Directors of your Company discusses and analyses its ownperformance on an annual basis together with suggestion for improvements thereon based onthe performance objectives set for the Board as a whole. The Board approved the evaluationresults. Your Company has formulated a separate Evaluation Policy for its Board memberswhich is available on the website 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/brochuresreports and internal policies to enable them to familiarise with your Company's proceduresand practices. Periodic presentations are made at the Board Meetings and the BoardCommittee Meetings on business and performance updates of your Company global businessenvironment business strategy and risks involved. The details of programmes forfamiliarisation for Independent Directors are on the website of the Company i.e.www.kempnco.com.
Every new Independent Director of the Board attends an orientationprogram to familiarize the new inductees with the strategy and functions of your Company.The Executive Directors / Senior Management Personnel make presentations to the inducteesabout your Company's strategy products markets finance human resources technologyquality facilities and risk management.
Further at the time of appointment of an Independent Director yourCompany issues a formal letter of appointment outlining his/her role function duties andresponsibilities as a Director.
CODE OF BUSINESS CONDUCT AND ETHICS FOR DIRECTORS/ MANAGEMENT PERSONNEL
The Code of Business Conduct and Ethics for Directors/ManagementPersonnel (the Code') as adopted by the Board is a comprehensive Code applicableto Directors and Senior Management Personnel of your Company. The Code while laying downin detail the standards of business conduct and ethics also deals with governanceaspects. A copy of the Code has been uploaded on your Company's website www. kempnco.com.The Code has been circulated to Directors and Management Personnel and its compliance isaffirmed by them regularly on an annual basis.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186OF THE COMPANIES ACT 2013
There were no loans guarantees or investments made by the Companyunder Section 186 of the Companies Act 2013 during the year under review and hence thesaid provision is not applicable.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Your Company has established a Policy for determining related partytransactions. The Audit Committee oversees the related party transactions. Related PartyTransaction Policy of 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 withRelated Parties have been 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 providedin Form AOC-2 which is annexed herewith as Annexure "C" to this report.Related Party disclosures as per IndAS have been provided in Note No. 41 of the FinancialStatements.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY
There are no adverse material changes or commitments occurred after31st March 2018 which may affect the financial position of the Company or may requiredisclosure.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
As the Company is not engaged in any manufacturing activity there areno particulars to be disclosed under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 as regards conservation of energy ortechnology absorption. Further during the year under review the Company has neitherearned nor spent any foreign exchange.
The Company has a risk management framework comprising risk governancestructure and defined risk management process. The risk governance structure of theCompany is a formal organization structure with defined roles and responsibilities forrisk management. The processes and practices of risk management of the Company encompassrisk identification classification and evaluation
DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS
Mr. Shekhar Shah has resigned from the Directorship of the Company videresignation letter dated 4th June 2018.
Mr. Satyen Dalal was appointed as an Additional Director(Non-Executive Independent Director) of the Company with effect from 22nd June2018.
Mrs. Shalini D. Piramal Managing Director of your Company retires byrotation and being eligible offers herself for re-appointment.
NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIESJOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR
Your Company does not have any subsidiary. During the year underreview no companies have become/ceased to be subsidiaries joint venture or associatecompanies of the Company.
During the year under review your Company has not invited or acceptedany deposits.
SIGNIFICANT AND MATERIAL ORDERS
There are no significant and material orders passed by the regulatorsor courts or tribunals impacting the going concern
Company's operations in future.
INTERNAL FINANCIAL CONTROL
Your Company has put in place adequate internal financial controls withreference to the financial statements. The Board has adopted the policies and proceduresfor ensuring the orderly and efficient conduct of its business including adherence to theCompany's policies the safeguarding of its assets prevention and detection of frauds anderrors accuracy and completeness of the accounting records and timely preparation ofreliable financial disclosures. During the year such controls were tested and noreportable material weaknesses in design or operation were observed.
Your Company has established a Vigil Mechanism Policy for yourDirectors employees and stakeholders to safeguard against victimization of persons whouse vigil mechanism and report genuine concerns. The Audit Committee oversees the vigilmechanism complaints. The Vigil Mechanism Policy of the Company has been displayed on theCompany's website i.e. www.kempnco.com
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
In terms of provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition & Redressal) Act 2013 your Company has formulated a Policyto prevent Sexual Harassment of Women at workplace and constituted Internal ComplaintsCommittees (ICC). During the year no cases alleging sexual harassment of Women atworkplace has been received by ICC.
The paid-up Equity Share Capital of the Company as on 31st March 2018stood at Rs 10802 thousand. During the year under review the Company has not issuedshares with differential voting rights nor has granted any stock options or sweat equity.As on 31st March 2018 none of the Directors of the Company holds instruments convertibleinto equity shares of the Company.
The Audit Committee comprises of Mr. Ranjan Sanghi Mrs. Shalini D.Piramal Mr. Shekhar Shah* and Mr. Satyen Dalal**. All the recommendations made by theAudit Committee were deliberated and accepted by the Board. Mr. Ranjan Sanghi Chairman ofthe Audit Committee was present at the 136th Annual General Meeting of the Company heldon 4th August 2017 to answer the shareholders queries.
*Mr. Shekhar Shah has resigned from the Directorship of your Companyvide resignation letter dated 4th June 2018.
**Mr. Satyen Dalal was appointed as an Additional Director(Non-Executive Independent Director) and Member of Audit Committee of the Company witheffect from 22nd June 2018.
PARTICULARS OF EMPLOYEES
Your Company has no employee whose remuneration details are required tobe provided as per the provisions of Section 197(12) of the Companies Act 2013 (the Act)read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014. During the year under review no stock options have been granted by yourCompany.
REMUNERATION RATIO OF THE DIRECTORS / KEY MANAGERIAL PERSONNEL (KMP) /EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5 ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of your Company is furnished hereunder: (Rs in thousand)
|Name ||Designation || |
Remuneration paid for the Financial Year (2017-18)
| || || |
|1. Mrs. Shalini D. Piramal ||Managing Director || |
|2. Mr. Sunil Kumar Gupta ||Chief Financial Officer || |
|3. Mr. Kunal Chhatwani ||Company Secretary || |
1. Your Directors' Remuneration (including commission and variable pay)to the median remuneration of the employees of your Company for the year 2017-18 was asunder:
|Director's Name || |
Ratio of remuneration of each Director to the median employees' remuneration
| || |
|Mrs. Shalini D. Piramal || |
2. The Percentage increase in remuneration of Managing Director ChiefFinancial Officer and Company Secretary were as under:
|Name ||Designation || |
|Mrs. Shalini D. Piramal ||Managing Director || |
|Mr. Sunil Kumar Gupta ||Chief Financial Officer || |
|Mr. Kunal Chhatwani ||Company Secretary || |
The percentage increase in the median remuneration of employees for thefinancial year 2017 18 is around 17%. The percentage increase in the median remunerationis calculated for comparable employees and does not include employees who were noteligible.
3. The number of permanent employees on the rolls of the Company - 7
4. The Percentage increase in salaries of the managerial personnel at50th percentile is 7%. The Percentage increase in salaries of the non-managerial personnelat 50th percentile is 1.78%. The increase/decrease in remuneration is not solely based onthe 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 RemunerationPolicy of the Company.
Industrial relations remained cordial throughout the year under review.
Your Directors wish to place on record their appreciation for thededicated services of the employees of your Company at all levels.
By Order of the Board of Directors
| ||SHALINI D. PIRAMAL ||RANJAN SANGHI |
|Place: Mumbai ||Managing Director ||Director |
|Date: 9th August 2018 ||(DIN01365328) ||(DIN00275842) |