Your Directors are pleased to present the 138th Annual Report together with the AuditedFinancial Statements and Auditor's Report for the financial year ended 31st March 2019.
| || ||(Rs. In Thousands) |
|Particulars ||Year Ended 31.03.2019 ||Year Ended 31.03.2018 |
|Revenue from operations ||32570 ||31147 |
|Profit before Depreciation Interest and Tax ||3685 ||15547 |
|Finance cost ||- ||- |
|Depreciation and Amortization expenses ||2496 ||2556 |
|Profit before tax ||1189 ||12991 |
|Tax expenses: || || |
|1. Deferred Tax ||(3982) ||(5181) |
|2. Excess provision for tax relating to prior year ||(1) ||(5) |
|Profit for the year ||5172 ||18177 |
OVERALL PERFORMANCE AND OUTLOOK
During the financial year ended 31st March 2019 revenue from operations was Rs.32570 thousand as against Rs. 31147 thousand during previous year registering aincrease of 4.56%. Profit before tax was at Rs. 1189 thousand as against Rs. 12991thousand in the previous year.
Profit after tax for the year under review was at Rs. 5172 thousand against Rs. 18177thousand in the previous year. The Company is exploring various options to improveperformance in the coming year.
RESERVES & DIVIDEND
During the year under review as well as the previous year the Company has nottransferred any amount to the General Reserves. As on 31st March 2019 Reserves andSurplus of the Company were at Rs. 1749873 thousand. An amount of Rs. 5172 thousand isproposed to be retained as surplus in the statement of Profit & Loss.
Your Directors are pleased to recommend for your consideration a dividend of Rs.0.50/- (Fifty paisa only) per equity share of Rs. 10/- each for the financial year2018-19 (previous year Rs. 1/- per equity share 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"and copy of Annual Return is available on the Company's website at www.kempnco.com.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Directors state that applicable Secretarial Standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors' and General Meetings' respectively havebeen duly followed by the Company.
NUMBER OF MEETINGS OF THE BOARD
During the financial year ended 31st March 2019 5(five) Board Meetings and 4(four)Audit Committee 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 Companies Act 2013 withrespect to the Directors' Responsibility Statement based on their knowledge and beliefand the information and explanations obtained your Directors confirm that:
a) in the preparation of the annual accounts for the year ended 31st March 2019 theapplicable accounting standards have been followed along with proper explanation relatingto 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 2019 and of the profitand loss of your Company for that period;
c) proper and sufficient care has been taken for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act 2013 for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d) annual accounts for the financial year ended 31st March 2019 have been prepared ona 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 Companies Act 2013 ("the Act") yourCompany confirm having received necessary declarations from all the Independent Directorsunder section 149(7) of the Companies Act 2013 declaring that they meet the criteria ofindependence laid down under Section 149(6) of the Companies Act 2013 and Regulation16(b) of the SEBI (Listing Obligations 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 policy formulates the criteria fordetermining qualifications competencies positive attributes and independence for theappointment of a Director (Executive/Non-Executive) and also the criteria for determiningthe 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
In the Annual General Meeting (AGM) held on 4th August 2017 M/s. M L Bhuwania andCo. LLP Chartered Accountants (Firm Registration
No. 101484W/W100197) have been appointed as Statutory Auditors of the Company for aperiod of 5 (five) years commencing from the conclusion of 136th AGM till the conclusionof 141 ratification st AGM subject to of appointment by the members of the Company atevery AGM. Pursuant to the amendment of first proviso to Section 139(1) of the CompaniesAct 2013 the requirement for ratification of appointment of Statutory Auditors bymembers at every AGM has been removed. In view of the same at 137th AGM of the Companymembers of the
Company have partially modified the previous resolution passed at the 136th AGM for theappointment of Statutory Auditors and approved their appointment till the balance tenureof their appointment i.e. up to 141st AGM of the Company without seeking ratification oftheir appointment. 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.
None of the Auditors of the Company have reported any fraud as specified under thesecond proviso of Section 143(12) of the Companies Act 2013 including any statutorymodification(s) or re-enactment(s) thereof for the time being in force.
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. Company Secretaries in Practice to undertake the Secretarial Auditof your Company for the financial year 2019-20. The Secretarial Audit Report for thefinancial year 2018-19 in the prescribed Form MR-3 forms part of this Annual Report and isappended as Annexure "B" to the Board's report. The Secretarial AuditReport does not contain any qualifications reservations or adverse remarks.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of your Company are Mrs. Shalini D. Piramal ManagingDirector; Mr. Sunil Kumar Gupta Chief Financial
Officer and Mr. Kunal Chhatwani Company Secretary. There is no change in KeyManagerial Personnel during the year under review.
Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Requirements) Regulations 2015 the Board has carried out an annualevaluation of the performance of the Board its Committees and of individual Directors.Performance evaluation has been carried out as per the Nomination & RemunerationPolicy of the Company.
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. The details of programmes for familiarisation for IndependentDirectors are on the website of the Company i.e. www.kempnco.com.
Every new independent director of the Board attends an orientation program tofamiliarize the new inductees with the strategy and functions of your Company. TheExecutive 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 your Company alsoissues 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/Management Personnel (theCode') as adopted by the Board is a comprehensive Code applicable to Directors andSenior Management Personnel of your Company. The Code while laying down in detail thestandards of business conduct and ethics also deals with governance aspects. A copy of theCode has been uploaded on your Company's website www. kempnco.com.
The Code has been circulated to Directors and Management Personnel and its complianceis affirmed by them regularly on an annual basis.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THECOMPANIES ACT 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 - www.kempnco.com.
All contracts or arrangements entered into by the Company during the financial yearwith Related Parties have been done at arm's length and are in the ordinary course ofbusiness.
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 "C" to this report. Related Partydisclosures as per IndAS have been provided in Note No. 41 of the Financial Statements.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There are no adverse material changes or commitments occurred after 31st March 2019which may affect the financial position of the Company or may require disclosure.
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.
Members through Postal Ballot on 25th March 2019 approved the continuation ofDirectorship of Mr. M. K. Arora (DIN: 00031777) till ensuing Annual General Meeting andalso approved the continuation of Mr. Ranjan Sanghi (DIN: 00275842) till his original termup to 25th September 2019 and further approved re-appointment of Mr. Ranjan Sanghi asNon-Executive Independent Director of the Company for a period of 5 (five) years w.e.f.26th September 2019 to 25th September 2024
Retirement by rotation
Mr. M.K. Arora Non Executive Director (DIN: 00031777) of your Company retiresby rotation and being eligible offers himself for reappointment. As per requirement ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirement)(Amendment) Regulations 2018 the Special Resolution is placed at Item No. 4 of theNotice for Members approval.
NAME OF THE COMPANIES WHICH HAVE BECOME/CEASED TO BE SUBSIDIARIES JOINT 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 i.e.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.
The paid-up Equity Share Capital of the Company as on 31st March 2019 stood at 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 31st March 2019 none of the Directors of the Company holds instrumentsconvertible into equity shares of the Company.
The Audit Committee comprises of Mr. Ranjan Sanghi Mrs. Shalini D. Piramal and Mr.Satyen Dalal. All the recommendations made by the Audit Committee were deliberated andaccepted by the Board.
Mr. Ranjan Sanghi Chairman of the Audit Committee was present at the 137th AnnualGeneral Meeting of the Company held on 28th September 2018 to answer the shareholdersqueries.
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 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 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect of yourCompany is furnished hereunder:
| || ||(Rs. In Thousands) |
|Name ||Designation ||Remuneration paid for the Financial Year 2018-19 |
|1 Mrs. Shalini D. Piramal ||Managing Director ||3333.30 |
|2 Mr. Sunil Kumar Gupta ||Chief Financial Officer ||3653.64 |
|3. Mr. Kunal Chhatwani ||Company Secretary ||1273.99 |
1. Your Directors' Remuneration (including commission and variable pay) to the medianremuneration of the employees of your Company for the year 2018-19 was as under:
|Director's Name ||Ratio of remuneration of each Director to the median employees' remuneration |
|Mrs. Shalini D. Piramal ||5.5x |
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 ||49% |
|Mr. Sunil Kumar Gupta ||Chief Financial Officer ||9% |
|Mr. Kunal Chhatwani ||Company Secretary ||18% |
3. The percentage increase in the median remuneration of employees for the financialyear 2018 19 is around 26%. The percentage increase in the median remuneration iscalculated for comparable employees and does not include employees who were not eligible.
4. The number of permanent employees on the rolls of the Company-7
5. The Percentage increase in salaries of the managerial personnel at 50th percentileis 23%. The Percentage increase in salaries of the non-managerial personnel at 50thpercentile is 0.79%. The increase/decrease in remuneration is not solely based on theCompany's performance but also includes various other factors like individual performanceexperience skill sets academic background industry trends economic situation andfuture growth prospects etc. besides the Company performance. There are no exceptionalcircumstances for increase in the managerial remuneration.
6. 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 |
| ||SHALINI D. PIRAMAL ||RANJAN SANGHI |
|Place: Mumbai ||Managing Director ||Director |
|Date: 13th August 2019 ||(DIN: 0136532) ||(DIN: 00275842) |