The Shareholders of Kokuyo Camlin Limited
Your Directors have pleasure in presenting the 71st Annual Report on the business andoperations of the Company together with the Audited Financial Statements for the financialyear ended 31st March 2018.
FINANCIAL RESULTS (STANDALONE):
| || ||(Rs. In Lakhs) |
|PARTICULARS ||2017- 2018 ||2016- 2017 |
|Gross Sales/Income from Business Operations ||70153.17 ||68780.28 |
|Less: Discount on Sales ||6525.42 ||2619.72 |
|Add: Other Operating Income ||222.28 ||154.90 |
|Net sales ||63850.03 ||66315.46 |
|Other Income ||288.22 ||306.82 |
|Total Income ||64138.25 ||66622.28 |
|Profit Before Interest and Depreciation ||4101.57 ||2607.52 |
|Less: Interest ||960.57 ||1174.61 |
|Less: Depreciation ||1650.51 ||1207.66 |
|Profit Before Tax ||1490.49 ||225.25 |
|Less: Provision for Tax || || |
|- Current ||255.91 ||- |
|- Deferred ||252.41 ||76.35 |
|- Prior Years (Net) ||- ||(0.62) |
|Net Profit after Tax ||982.17 ||149.52 |
|Balance carried to Balance Sheet ||982.17 ||149.52 |
|Earnings per share (Basic) ||0.98 ||0.15 |
|Earnings per share (Diluted) ||0.98 ||0.15 |
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE:
The Company has adopted Indian Accounting Standards (Ind AS) with effect from 1stApril 2017 pursuant to the notification of Companies (Indian Accounting Standard) Rules2015 issued by the Ministry of Corporate Affairs. Previous years' figures have beenrestated and audited by the Statutory Auditors of the Company namely M/s. BSR & Co.LLP Chartered Accountants (Firm Registration No. 101248W/W-100022).
During the year the Company reported gross sale of Rs. 70153.17 lakhs ascompared to Rs. 68780.28 lakhs for the last year representing a growth of 2.00 % over thecorresponding period of the previous year. The profit before tax was higher at R1490.49lakhs against Rs. 225.25 lakhs for the corresponding period of the previous year.
The year under review continued to be a challenging year which took a hit on the growthrates. Disruption caused by implementation of GST did impact the Company especially in thefirst quarter inspite of this the Company could achieve higher profits mainly on accountof focus on high margin products control on overheads and rate negotiation withsuppliers. Your Company will continue to strengthen its performance in the coming yearswith focus on optimum levels of inventory operating efficiencies and cost saving acrossthe organisation.
Given the growth requirements of the business your Directors do not recommend anydividend on equity shares for the financial year 2017-2018.
TRANSFER TO RESERVE:
During the year under review the Company has not transferred any amount towardsGeneral Reserve and retained the entire amount of profits in the Profit and Loss Account.
The Management Discussion and Analysis forms an integral part of this report and ispresented separately. It gives details of the overall industry structure economicdevelopments performance and state of affairs of your Company's operations and theiradequacy risk management systems and other material developments during the financialyear 2017-18.
During the year under review there was no change in the share capital structure andthe paid up capital of the Company as on 31st March 2018 was Rs. 1003.04 lakhs.
CONSOLIDATED FINANCIALS STATEMENTS:
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015("Listing Regulations") the consolidated financial statements have beenprepared by the Company in accordance with the applicable Accounting Standards. Theaudited consolidated financial statements together with Auditors' Report form part of theAnnual Report. Pursuant to Section 136 of the Companies Act 2013 the financialstatements of the Subsidiary Associate and Joint Venture Companies are kept forinspection by the shareholders at the Registered Office of the Company. The Company shallprovide free of cost the copy of the financial statements of its Subsidiary Associateand Joint Venture Companies to the shareholders upon their request. The statements arealso available on the website of the Company www. kokuyocamlin.com under the InvestorRelations section.
At present the Company does not have any material subsidiary. No new subsidiary wasincorporated or acquired by the Company during the year under review.
M/s. Camlin International Limited wholly owned subsidiary of Kokuyo Camlin Limited wasnot engaged in any business operations for over 10 years. Hence it has made anapplication on 30th March 2018 to the Registrar of Companies for striking off the Companyby removal of name from the Register of Companies. The final approval from the Registrarof Companies is awaited.
Pursuant to the provisions of Section 129(3) of Companies Act 2013 a statementcontaining salient features of the financial statements of Subsidiary/Associate Company inForm AOC-1 is attached to the financial statements of the Company.
In accordance with the section 136 of the Companies Act 2013 the Audited FinancialStatements and related information of the Company and Audited Accounts of its Subsidiaryare available on the website www. kokuyocamlin.com .
During the year under review your Company has not accepted any deposits. There are nounclaimed deposits as on date.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
There have been no Material changes and Commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statement relate (i.e. 31st March 2018) and the date of the report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not granted any Loans Guarantees or Investments during the financialyear ended 31st March 2018.
RELATED PARTY TRANSACTIONS:
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their review/approval on a quarterly basis.
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors andKey Managerial Personnel which may have a potential conflict with the interest of theCompany at large. Accordingly the disclosure of Related Party Transactions as requiredunder Section 134 (3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable toyour Company.
The details of transaction with related parties are provided in the accompanyingfinancial statements. The policy on Related Party Transactions as approved by the Board isuploaded on the Company's website.
CORPORATE GOVERNANCE REPORT:
Corporate Governance is all about ethical conduct integrity and accountability. GoodCorporate Governance involves a commitment of the Company to run the business in a legalethical and transparent manner and runs from the top and permeates throughout theorganization. It is a key element improving the economic efficiency of Organization.
As per Listing Regulations a separate section on Corporate Governance forms part ofthis report. A Certificate from JHR & Associates Secretarial Auditors confirmingcompliance of Corporate Governance forms part of this Report.
Certificate of the CEO/CFO confirming the correctness of the financial statementscompliance with the Company's Code of Conduct and the Audit Committee in terms ofRegulation 17 of the Listing Regulations is attached in the Corporate Governance reportand forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In terms of the provisions of the Companies Act 2013 Mr. Takuya Morikawa and Mr.Takeo Iguchi Directors of the Company retire by rotation at the ensuing Annual GeneralMeeting and being eligible offer themselves for re-appointment you are requested toappoint them.
The Board of Directors at its meeting held on 25th January 2018 approved there-appointment of Mr. Dilip D Dandekar as 'Chairman & Executive Director' and Mr.Shriram S. Dandekar as Vice-Chairman & Executive Director' whose term expiredon 31st January 2018 for the further period of one (1) year with effect from 1stFebruary 2018. The requisite resolutions for their appointment is being proposed in thenotice of the ensuing Annual General Meeting for the approval of the members.
Pursuant to provisions of Section 161 of the Companies Act 2013 and in terms ofListing Regulations the Board of Directors at its meeting held on 9th May 2018appointed Mr. Kazuo Kubo as an Additional Non- Executive Director of the Company. Therequisite resolution for his appointment as a Non- Executive Director whose term isliable to retire by rotation is being proposed in the notice of the ensuing Annual GeneralMeeting for the approval of the members.
The profile of Directors seeking appointment/ reappointment forms a part of CorporateGovernance Report.
The Company has re-appointed Mr. Nobuchika Doi as 'Managing Director' designated as"Chief Executive Officer & Executive Director" Mr. Takeo Iguchi as'Executive Director' for the period of three (3) years with effect from 1st November2017. Further Ms. Nandini Chopra has been appointed as an Independent Director of theCompany for a period of five (5) years with effect from 3rd August 2017. The aforesaidappointments were approved by the members by passing ordinary resolutions through postalballot dated 28th December 2017.
During the financial year 2017-18 Ms. Aparna Piramal Raje Independent Director andMs. Junko Saito Non-Executive Director resigned with effect from 24th July 2017 and 26thFebruary 2018 respectively. The Board has placed on record its appreciation for thecontribution made by Ms. Aparna Piramal Raje and Ms. Junko Saito during their tenure ofoffice.
The Board of Directors in its meeting held on 9th May 2018 appointed Mr. SatishVeerappa as Key Managerial Person designated as Chief Executive Officer and redesignatedMr. Nobuchika Doi as Managing Director of the Company with effect from 9th May 2018.
None of the Directors are disqualified from being appointed as Directors as specifiedin section 164 of Companies Act 2013.
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Act read with the Rules framedthereunder.
1. Mr. Nobuchika Doi Managing Director
2. Mr. Chetan Badal - Chief Financial Officer
3. Mr. Ravindra Damle Vice President (Corporate) & Company Secretary
4. Mr. Satish Veerappa Chief Executive Officer (with effect from 9th May 2018)
The Disclosure required under Section 197(12) of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014is annexed as "Annexure C" forms an integral part of this report.
MEETINGS OF BOARD:
During the financial year 2017-18 five Board Meetings were held the details of whichare given in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
In compliance with the requirements of Listing Regulations the Company has put inplace a familiarization program for the Independent Directors to familiarize them withtheir role rights and responsibilities as Directors the working of the Company natureof the industry in which the Company operates business model etc. The details of thefamiliarization programme are explained in the Corporate Governance Report. The same isalso available on the website of the company and can be accessed by web linkhttps://www.kokuyocamlin.com/ company-policies
PERFORMANCE EVALUATION OF THE DIRECTORS:
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations the Board has carried out an annual evaluation of its own performance itsCommittees and individual Directors.
Further the Independent Directors had met separately without the presence ofNon-Independent Directors and the members of management and discussed the performanceevaluation of the Board Members as stipulated under the Listing Regulations.
DECLARATION OF INDEPENDENCE:
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of theCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16(1) (b) of Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force).
The Board has on the recommendation of the Remuneration and Nomination Committeeframed a policy for selection appointment and remuneration of Directors and KMPs. TheRemuneration Policy is stated in the Corporate Governance Report.
DIRECTORS RESPONISBILITY STATEMENT:
Pursuant to the requirement under section 134(3) (c) of the Companies Act 2013 yourDirectors to the best of their knowledge and belief and according to the information andexplanations obtained by them hereby confirm:
a) That in the preparation of the annual accounts for the financial year ended 31stMarch 2018 the applicable accounting standards had been followed along with properexplanation relating to material departures;
b) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31st March 2018 and of the profit of the Company for the year endedon that date.
c) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d) That the Directors had prepared the annual accounts on a going concern basis; and
e) That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
AUDITORS & AUDITORS REPORT:
Pursuant to the provisions of Section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 M/s. B S R & Co. LLP CharteredAccountants (Firm Registration No. 101248W/ W100022) were appointed as the StatutoryAuditors of the Company for a term of five years to hold office from the conclusion of70th Annual General Meeting held on 28th June 2017 till the conclusion of 75th AnnualGeneral Meeting of the Company. They have confirmed that they are not disqualified fromcontinuing as the Auditors of the Company.
The observation of the Auditors in their report read with relevant notes to theaccounts are self-explanatory and therefore do not require further explanations.
The Auditors Report to the memebrs on the Standalone and Consolidated FinancialStatements of the Company for the the year ended 31st March 2018 does not contain anyqualifications reservations or adverse remarks.
M/s. JHR & Associates a firm of Company Secretaries were appointed as SecretarialAuditor for the financial year 2017-18 pursuant to Section 204 of the Companies Act 2013.The Secretarial Audit Report submitted by them in the prescribed form MR-3 is attached as"Annexure E" and forms part of this report.
There are no qualifications or observations or adverse remarks or disclaimer of theSecretarial Auditors in the Report issued by them for the financial year 2017-18.
RECONCILIATION OF SHARE CAPITAL AUDIT:
As directed by the Securities and Exchange Board of India (SEBI) Reconciliation ofShare Capital Audit has been carried out at the specified period by a Practicing CompanySecretary.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Companies Act 2013 re-emphasizes the need for an effective Internal FinancialControl System (IFC) in the Company which should be adequate and shall operateeffectively. To ensure effective Internal Financial Controls the Company has its ownprocess driven framework for the year ended 31st March 2018.
The Board is of the opinion that the Company has sound IFC commensurate with the natureand size of its business operations; wherein controls are in place and operatingeffectively and no material weaknesses exist. The Company has a process in place tocontinuously monitor the existing controls and identify gaps if any and implement newand /or improved controls wherever the effect of such gaps would have a material effect onthe Company's operation.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
The Company had transferred a sum of Rs. 4.98 Lakhs during the financial year to theInvestor Education and Protection Fund established by the Central Government (IEPF). Thesaid amount represents Unclaimed Dividend for the year 2009-2010 with the Company for aperiod of 7 years from their respective due dates of payment.
TRANSFER OF SHARES TO IEPF
As required under Section 124 of the Companies Act 2013 540599 Equity shares inrespect of which dividend has not been claimed by the members for Seven (7) consecutiveyears have been transferred by the Company to IEPF during the financial year 2017-18.Details of shares transferred have been uploaded on the website of IEPF as well as theCompany.
Pursuant to the provisions of Section 124(6) of the Companies Act 2013 read with Rule6(3) of the Investor Education and Protection Fund Authority (Accounting Audit Transferand Refund) Rules 2016 as amended on 28th February 2017 as IEPF amended Rules 2017 theCompany is in the process of transfer of shares either in physical mode or in Demat modeto IEPF authority whose dividend is unclaimed for the financial year 2010-11 for theperiod of seven years. The Company has already communicated individually to the concernedshareholders whose shares are liable to be transferred to IEPF account.
SEXUAL HARRSEMENT OF WOMEN AT WORKPLACE:
The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and Rules framed there under the Company has implemented a policy on preventionprohibition and redressal of sexual harassment at the workplace. All women permanenttemporary or contractual including those of service providers are covered under thepolicy. An Internal Sexual Harassment Committee comprising management staff has been setup at office and factory locations which includes three women to redress complaintsrelating to sexual harassment. The Committee also includes an outside woman representativefrom an NGO. During the year under review no case was reported under the said policy.
SIGNIFICANT AND MATERIAL ORDRES PASSED BY THE REGULATORS OR COURTS:
There are no significant or material orders passed by any regulator tribunal or courtthat would impact the going concern status of the Company and its future operations
CORPORATE SOCIAL RESPONISIBILITY:
In terms of Section 135 of the Companies At 2013 read with Companies (Corporate SocialResponsibility) Rules 2014 as amended and in accordance with the CSR Policy the Companyhas spent above 2% of the average net profits of the Company during the three immediatelypreceding financial years. The details are provided in the Annual Report on CSR activitieshas been appended as "Annexure D" which forms an integral part of thisreport.
Key Initiatives which the Company engaged are:-
Educate the Girl Child
Your Company got associated with K.C. Mahindra Foundation Trust A/c - Nanhi Kali one ofthe largest community programs imparting education to under privileged girls across India.This partnership provided support to girl children through academic material and socialbacking by identifying critical centers of education through Nanhi kali project.
Swachh Bharat Kosh
Your Company also contributed to the Swach Bharat Kosh set-up by the Central Governmentfor promotion of sanitation through donation to the above said fund.
Vanavasi Kalyan Ashram (VKA)
Your Company has contributed to Vanavasi Kalyan Ashram (VKA) a social organisationhaving presence in all states of India. It has been working for welfare of tribalpopulation of India since last 60 years.
In addition to the above the Company has been implementing other social activitieswhich has not been considered for arriving at the spends as per the CSR rules.
CODE OF ETHICS AND VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
The Company has adopted code of ethics and business conduct which lays down principlesand standards that should govern the actions of the Company and employees. The Company hasa vigil mechanism called "Whistle Blower Policy" with a view to provide amechanism for employees of the Company to raise concerns of any violations of any legal orregulatory requirement incorrect or misrepresentation of any financial statements andreports etc. The Company is committed to adhere to the highest standard of ethical moraland legal conduct of business operations.
The Company has taken steps to establish Vigil Mechanism for Directors and Employees ofthe Company. The details of the Policy are posted on the website of the Company atwww.kokuyocamlin.com.
PREVENTION OF INSIDER TRADING:
The Company has also adopted a code of conduct for prevention of insider trading. Allthe Directors senior management employees and other employees who have access to theunpublished price sensitive information of the Company are governed by this code. Duringthe year under report there has been due compliance with the said code of conduct forprevention of insider trading based on the SEBI (Prohibition of Insider Trading)Regulations 2015.
The Company's plant property equipment's and stocks are adequately insured againstmajor risks. The Company also has appropriate liability insurance covers particularly forproduct liability. The Company has also taken Directors' and Officers' Liability Policy toprovide coverage against the liabilities arising on them.
The Company recognizes that risk is an integral part of any business activity. TheCompany is aware of the risks associated with the business and has well defined process inplace to ensure appropriate identification and treatment of risk. This will facilitate notonly risk assessment and timely rectification but also help in minimization of riskassociated with any strategic operational financial and compliance risk across allbusiness operations. There are no risks which in the opinion of the board threatens theexistence of the company. However some of the risks which may pose challenges are set outin the Management Discussion and Analysis which forms part of this Annual Report.
DISCLOSURE ON CONFIRMATION ON THE SECRETARIAL STANDARDS
Your Directors confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been duly complied with.
GREEN INTIATIVE IN CORPORATE GOVERNANCE:
In support of the green initiative of the Ministry of Corporate Affairs the Companyhas also decided to send the annual report through email to those shareholders who haveregistered their email id with the depository participant /Company's registrar and sharetransfer agent in case a shareholder wishes to receive a printed copy he/she may pleasesend a request to the Company which will send the annual report to the shareholder.
The Company is providing the voting facility to all members to enable them to casttheir votes electronically on all resolutions set forth in the Notice. This is pursuant tosection 108 of the Companies Act 2013 and Rule 20 of the Companies (Management andAdministration) Rules 2014. The instructions for e-voting are provided in the Notice.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure A".
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT- 9 is annexedherewith as "Annexure - B".
PARTICULARS OF 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 employeesof the Company will be provided upon request. In terms of Section 136 of the Act theReport and Accounts are being sent to the Members and others entitled thereto excludingthe information on employees' particulars which is available for inspection by the Membersat the Registered Office of the Company during business hours on working days of theCompany up to the date of the ensuing Annual General Meeting. If any Member is interestedin obtaining a copy thereof such Member may write to the Company Secretary in thisregard.
Your Directors express their gratitude to the members bankers customers financialinstitutions and other business constituents for their continued faith assistance andsupport extended to the Company. Your Directors also sincerely appreciate the high degreeof professionalism commitment and dedication displayed by employees at all levels therebycontributing largely to the growth and success of the Company.
Your Directors also wish to place on record their appreciation for the support andguidance provided by its parent Company Kokuyo Co. Ltd. Japan.
| ||For and on behalf of the Board |
| ||DILIP DANDEKAR |
| ||Chairman & Executive Director |
|Place: Mumbai || |
|Date: 9th May 2018 || |