The Board of Directors have pleasure to submit the report and audited financialstatements of the Company for the year ended 31st December 2018.
FINANCIAL RESULTS AND DIVIDEND Financial Results (Separate):
| || ||INR Million |
| ||Year ended December 31 2018 ||Year ended December 31 2017 |
|Revenue from operations and Other Income ||11197.76 ||10008.14 |
|Profit before tax ||1116.73 ||1046.69 |
|Income tax expense || || |
|Current ||367.40 ||404.74 |
|Deferred tax (Credit) ||9.07 ||(35.10) |
|Total tax expense ||376.47 ||369.64 |
|Profit for the year ||740.26 ||677.05 |
|Other comprehensive income ||9.94 ||22.68 |
|Total comprehensive income ||750.20 ||699.73 |
|Appropriations: || || |
|Opening balance of retained earnings ||5188.68 ||4719.36 |
|Profit for the year ||740.26 ||677.05 |
|Dividend paid (including tax thereon) ||(242.94) ||(230.41) |
|Other comprehensive income recognised directly in retained earnings ||9.94 ||22.68 |
|Total retained earnings ||5695.94 ||5188.68 |
|EPS ||21.27 ||19.45 |
The Company does not propose to transfer any amount to its Reserves for the year underreview.
The Board of Directors propose a dividend of `6.00 per share of ` 10 each (60 %).
Dividend Distribution Policy of the Company as required under Securities and ExchangeBoard of India (Listing Obligations and Disclosure Requirements) Regulations 2015(Listing Regulations 2015) is available on the Companys website at:www.ksbindia.co.in
During the year under review the Company has earned higher profit before tax comparedto the previous year due to various cost reduction and efficiency improvement measurestaken during the year. The overall economic slowdown and delay in project executioncontinued in 2018. Hence situation of heavy pressure on margins continued in the year.
Export increased by `190 Million from `1361 Million last year to ` 1551 Million.
The Company has received orders of around ` 4130 Million from Nuclear PowerCorporation of India Limited (NPCIL) for supply of Primary Coolant Pumps andElectric Motor alongwith auxiliaries and accessories for their Gorakhpur Haryana AnuVidyut Pariyojana 1 and 2 project. The sales/ supply of products/ services for theseorders will be in a phased manner during the years 2022 and 2023.
The Company continues with its efforts to maintain growth even during the economicdownturn and new challenges.
Unclaimed Bonus Shares:
Total 20074 bonus shares held by 143 shareholders were unclaimed in the end of theyear 2017. During the year 3 shareholders had approached/claimed for bonus shares. Thetotal number of shares outstanding at the end of the year 2018 is 19394 held by 140shareholders.
Change of name of the Company:
The name of the Company stands changed from KSB PUMPS LIMITED to KSBLIMITED pursuant to fresh Certificate of Incorporation issued by the Registrar ofCompanies Mumbai effective from 9th July 2018.
Shifting of registered office:
The shareholders in its 58th Annual General Meeting held on 25th April 2018 hadapproved shifting of registered office of the Company from Mumbai to Pune through aspecial resolution. Subsequently the Board decided to defer the shifting of registeredoffice and to reconsider the same.
Alteration of Articles of Association:
The Company has proposed to adopt revised set of Articles of Association under theCompanies Act 2013 ("Act") to avail operational conveniences made availableunder the Act. A resolution seeking approval for the same forms part of the Noticeconvening the 59th Annual General Meeting and the same is recommended for yourconsideration and approval.
ICRA Limited has upgraded the Long Term rating (Fund based) from [ICRA] AA (stable) to[ICRA] AA+ (stable) for KSB Limited. The Short Term rating (Fund based and non-fund based)have been reaffirmed at [ICRA] A1+. This reaffirms the high reputation and the trustCompany has earned for its sound financial management and its ability to meet financialobligations.
The Company has not accepted any deposits.
Transfer to Investor Education and Protection Fund (IEPF):
During the year in accordance with section 125 of the Companies Act 2013 (theAct) an amount of ` 246852 being unclaimed dividends up to the year 31st December2011 were transferred to the Investor Education and Protection Fund established by theCentral Government.
Pursuant to the provisions of Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 (IEPF Rules) as amendedthe shares on which dividend remains unpaid / unclaimed for seven consecutive years ormore shall be transferred to the Investors Education and Protection Fund (IEPF).Accordingly during the year Company has transferred 20714 equity shares to the IEPF. Thedetails of equity shares transferred are available on the Companys website at:www.ksbindia.co.in
Subsidiary and Associate:
The Company has 1 subsidiary viz. Pofran Sales and Agency Limited and 1 associateviz. KSB MIL Controls Limited as on 31st December 2018.
In accordance with Section 129 (3) of the Act and Regulation 34 of Listing Regulations2015 the audited consolidated financial statements of the Company form part of the AnnualReport. A statement containing salient features of the financial statements of theCompanys subsidiary and associate is annexed to this Report in prescribed form AOC-1as Annexure I.
The audited financial statements of Pofran Sales and Agency Limited for the year ended31st March 2018 have been placed on the website of the Company viz. www.ksbindia.co.inand are available for inspection at the registered office of the Company. The Company willalso make available these documents upon request by any member of the Company interestedin obtaining the same.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Annexed to this report as Annexure II.
REPORT ON CORPORATE GOVERNANCE
Annexed to this Report alongwith certificate thereon as Annexure III. BUSINESSRESPONSIBILITY REPORT
Annexed to this report as Annexure IV.
EXTRACT OF ANNUAL RETURN
Extract of Annual Return in Form MGT-9 is available at the website of the Company at:www.ksbindia.co.in
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
Contracts or arrangements with related parties referred to under Section 188 of theAct entered into during the financial year were on an arms length basis. Nomaterial contracts or arrangements with related parties were entered into during the yearunder review. Accordingly no transactions are being reported in form AOC- 2 in terms ofsection 134 of the Act.
DISCLOSURE UNDER REGULATION 34(3) OF SEBI LISTING REGULATIONS 2015
There are no loans and advances in the nature of loans to subsidiary/ associate/ firms/Companies in which Directors are interested.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The Company has not granted any loans guarantees and investments covered under section186 of the Act during the year.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has established a vigil mechanism to provide avenues to the stakeholders tobring to the attention of the management the concerns about behaviours employees thatraise concerns including fraud by using the mechanism provided in the Whistle BlowerPolicy. The details of the said policy are included in the report on Corporate Governance.
The Company has laid down procedures and informed the Board members about the riskassessment and minimization procedures. These procedures are periodically reviewed toensure that executive management controls risk through means of a properly definedframework. The Risk Management Committee monitors the risks and their mitigation actions.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There is no significant or material order passed during the year by any regulatorscourts or tribunals impacting the going concern status of the Company or its futureoperations.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY
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 statements relate and the date of this report.
POLICY ON PREVENTION PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN ATWORKPLACE
The Company has complied with provisions relating to the constitution of InternalComplaints Committee under the Sexual Harassment of women at Workplace (PreventionProhibition and Redressal) Act 2013 and Rules framed thereunder to redress complaintsreceived regarding sexual harassment. The Company has in place a policy in line with therequirements of the said Act. During the year no complaint with allegations of sexualharassment was received by the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Dr. Matthias Schmitz retires by rotation and is eligible for reappointment.
Ms. Sharmila Barua Roychowdhury on recommendation of the Nomination and RemunerationCommittee was appointed by the Board as Additional Director / Independent Directoreffective from 30th September 2018 and she shall hold office upto the date of ensuingAnnual General Meeting. The Company has received a notice in writing from a memberproposing her candidature for appointment as Director under Section 160 of the CompaniesAct 2013.
Mr. A. R. Broacha Mr. D. N. Damania and Mr. Pradip Shah will be completing theirpresent term as Independent Directors of the Company on 30th September 2019. Mr. V. K.Viswanathan will be completing his present term as Independent Director of the Company on15th January 2020. On the recommendation of Nomination and Remuneration Committee theBoard in its meeting held on 27th February 2019 subject to the approval of shareholdersby special resolution has recommended re-appointment of Mr. D. N. Damania and Mr. PradipShah as Independent Directors of the Company for a further term of five years effectivefrom 1st October 2019 and Mr. V. K. Viswanathan for a further term of five yearseffective from 16th January 2020. Mr. A. R. Broacha has expressed his unwillingness topropose his candidature for re-appointment for second consecutive term as IndependentDirector of the Company.
Pursuant to Listing Regulations 2015 a person who has attained the age of seventyfive years can continue as Independent Director if approval of its Members is obtained byway of a special resolution. Mr. D. N. Damania and Mr. A. R. Broacha are above seventyfive years of age. Special resolutions seeking approval for continuation of theirDirectorships from 1st April 2019 on the existing terms of appointment form part of theNotice convening the 59th Annual General Meeting.
Ms. Divya Shriram on recommendation of the Nomination and Remuneration Committee wasappointed by the Board as Additional Director effective from 21st May 2018 to hold officeupto the date of ensuing Annual General Meeting. Ms. Divya Shriram resigned from the Boardeffective from close of business hours on 19th August 2018.
DECLARATIONS BY INDEPENDENT DIRECTORS
The Independent Directors have given a declaration to the Company that they meet thecriteria of independence as per Section 149(6) of the Act and Regulation 25 of the ListingRegulations 2015.
During the year ended 31st December 2018 five meetings of the Board were held.
POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION
The policy on Directors appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and othermatters forms part of report on Corporate Governance. The detailed policy is available onthe Companys website at: www.ksbindia.co.in EVALUATION OF BOARD OF DIRECTORS
The details of the annual evaluation of Board its Committees and individual Directorsare mentioned in the report on Corporate Governance.
The Company has five Committees of Board viz
1. Audit Committee
2. Stakeholders Relationship Committee
3. Nomination and Remuneration Committee
4. Corporate Social Responsibility Committee
5. Risk Management Committee
Pursuant to the requirement of Listing Regulations 2015 the Board constituted RiskManagement Committee of the Company effective from 31st October 2018.
The Board dissolved the Share Transfer Committee of the Company effective from 24thJuly 2018 and the roles and responsibilities of Share Transfer Committee have beentransfered to the Stakeholders Relationship Committee effective from 24th July2018. Details of all the Committees along with their composition terms of reference andmeetings held during the year are provided in report on Corporate Governance.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Act the Board of Directors report that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the Company at the end of the financial year and of the profitor loss of the Company for that period;
(c) proper and sufficient care has been taken 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) they have prepared the annual accounts on a going concern basis;
(e) proper internal financial controls are in place and that such internal financialcontrols are adequate and are operating effectively; and
(f) systems to ensure compliance with the provisions of all applicable laws were inplace and that such systems were adequate and operating effectively.
PARTICULARS OF EMPLOYEES AND RELATED INFORMATION
In terms of the provisions of Section 197(12) of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 a statementcontaining the disclosures pertaining to remuneration and other details as required underthe Act and the above Rules are provided in the Annual Report. The disclosures asspecified under Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed to this Report as Annexure V.
The information regarding employee remuneration as required pursuant to Rule 5(2) andRule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 is available for inspection by members at the registered office of the Companybetween 2.00 p.m. and 4.00 p.m. on any working day (Monday to Friday) upto the date ofthe 59th Annual General Meeting. Any member interested in obtaining such information maywrite to the Company Secretary and the same will be furnished on such request.
Pursuant to provisions of Section 139 of the Act and Rules thereunder M/s PriceWaterhouse Chartered Accountants LLP (Registration No. 012754N/ N500016) were appointed asStatutory Auditors of the Company for a term of five years to hold office from theconclusion of 57th Annual General Meeting until the conclusion of 62nd Annual GeneralMeeting subject to ratification of their appointment at every subsequent Annual GeneralMeeting.
However the Ministry of Corporate Affairs has vide notification dated 7th May 2018withdrawn the requirement of seeking Members ratification at every Annual GeneralMeeting on appointment of Statutory Auditor during their tenure of five years. Hence theresolution seeking ratification for their appointment is not being placed at this AnnualGeneral Meeting.
A certificate from Statutory Auditors has been received to the effect that theirappointment as Statutory Auditors of the Company continues to be according to the termsand conditions prescribed under Section 139 of the Act and Rules framed there under. TheAuditors Report for the financial year 2018 does not contain any qualificationreservation adverse remark or disclaimer.
The Statutory Auditors have not reported any incident of fraud to the Audit Committeeof the Company during the financial year 2018.
Maintenance of cost records as specified by the Central Government under sub-section(1) of section 148 of the Act 2013 is required by the Company and accordingly suchaccounts and records are prepared and maintained. Pursuant to Section 148 the Board onthe recommendation of the Audit Committee has re-appointed M/s Dhananjay V. Joshi andAssociates Cost Accountants Pune as Cost Auditors to carry out the audit of CostAccounts of the Company for the financial year 2019 at a remuneration as mentioned in theNotice convening the 59th Annual General Meeting and the same is recommended for yourconsideration and ratification. The Cost Audit Report for financial year 2017 which wasdue to be filed with the Ministry of Corporate Affairs before 29th June 2018 was filedon 17th May 2018 and it did not contain any qualification reservation adverse remark ordisclaimer.
Pursuant to provisions of Section 204 of the Act and Rules thereunder the SecretarialAudit Report for financial year 2018 issued by Secretarial Auditors M/s Nilesh Shah andAssociates Company Secretaries Mumbai is annexed to this report as Annexure VI and itdoes not contain any qualification reservation adverse remark or disclaimer.
During the year 2018 the Company has complied with applicable Secretarial Standardsissued by the Institute of the Company Secretaries of India.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required to be given under Section 134(3)(m) of the Act read with Rule8(3) of the Companies (Accounts) Rules 2014 is furnished in the annexure to this reportas Annexure VII. CORPORATE SOCIAL RESPONSIBILITY (CSR) The composition of the CSRCommittee CSR Policy and other required details are given in the Annual Report on CSRActivities annexed to this Report as Annexure VIII.
The Board of Directors are grateful to Canadian Kay Pump Ltd. the main shareholderand to KSB SE & Co. KGaA (formerly KSB Aktiengesellschaft) Germany theCompanys collaborators for their valuable assistance and support. They wish torecord their appreciation for the co-operation and support of the Companysshareholders bankers and all employees including the workers staff and management andall others concerned with the Companys business.
| ||On behalf of the Board of Directors |
| ||G. SWARUP |
| ||Chairman |
|Mumbai 27th February 2019 || |