The Board of Directors have pleasure to submit the report and audited financialstatements of the Company for the year ended 31st December 2017.
FINANCIAL RESULTS AND DIVIDEND
The Company had adopted Indian Accounting Standards ("Ind AS") with effectfrom 1st January 2017. Accordingly the Financial Statements for the year ended 31stDecember 2017 of the Company and its subsidiary are prepared with comparative data incompliance with Ind AS.
Financial Results (Standalone):
| || |
| ||Year ended December 2017 ||Year ended December 2016 |
|Revenue from || || |
|Operations & Other Income ||10009.41 ||9052.45 |
|Profit before taxation ||1046.69 ||989.64 |
|Income tax expense Current ||404.74 ||343.22 |
|Deferred tax (Credit) ||(35.10) ||(7.00) |
|Total tax expense ||369.64 ||336.22 |
|Profit for the year ||677.05 ||653.42 |
|Other Comprehensive income ||22.68 ||(36.51) |
|Total comprehensive income ||699.73 ||616.91 |
|Appropriations: || || |
|Opening balance of retained earnings ||4719.36 ||4332.86 |
|Profit for the year ||677.05 ||653.42 |
|Dividend Paid (including tax thereon) ||(230.41) ||(230.41) |
|Other comprehensive income recognised directly in retained earnings ||22.68 ||(36.51) |
|Total retained earnings ||5188.68 ||4719.36 |
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 Rs.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 Company's website atwww.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 2017. Hence situation of heavy pressure on margins continued in the year.
Export increased by Rs.228 Million from Rs.1133 Million last year to Rs.1361 Million.
Commercial production of the new plant facility at MIDC Shirwal ("EPD")Maharashtra has commenced during the year under review.
The Company continues with its efforts to maintain growth even during the economicdownturn and face new challenges.
Unclaimed Bonus Shares:
Total 20304 bonus shares held by 144 shareholders were unclaimed in the end of year2016. During the year 1 shareholder had approached/ claimed for bonus shares. The totalnumber of shares outstanding at the end of the year 2017 is 20074 held by 143shareholders.
Change of name of the company:
It is proposed to change the name of the Company from KSB PUMPS LIMITED to KSB LIMITED.Since the Company has business in the area of pumps valves and service relatedactivities the present name of the Company however seems to be restricting the businessof the Company to pumps alone. As part of corporate rebranding and in order to furtherstrengthen the image of the Company with the goodwill and reputation of the brand"KSB" it is proposed to change the name of the Company subject to necessaryapprovals of the authorities. A resolution seeking approval for the same forms part of theNotice convening the 58th Annual General Meeting and the same is recommended for yourconsideration and approval.
Shifting of registered office:
It is proposed to shift the registered office of the Company from the city of Mumbai toPune within the same state of Maharashtra subject to necessary approvals to deliverbetter services to shareholders exercise better administrative control and otheroperational convenience. A resolution seeking approval for the same forms part of theNotice convening the 58th Annual General Meeting and the same is recommended for yourconsideration and approval.
The Company has no unclaimed deposits.
Transfer to Investor Education & Protection Fund ("IEPF"):
During the year in accordance with section 125 of the Companies Act 2013 ("theAct") an amount of Rs.272523 being unclaimed dividends up to the year 31st December2010 were transferred to the Investor Education and Protection Fund established by theCentral Government.
In accordance with the provisions of IEPF Rules 2016 the Company during the year hascommunicated individually to the concerned shareholders whose shares are liable to betransferred to IEPF Authority for taking appropriate actions. However for transfer ofsuch shares to IEPF Authority the Company has been facing technical problems. The Companyalong with its Registrar and Transfer Agents is taking necessary steps to resolve theproblem thereby transferring shares to IEPF.
Subsidiary & Associate:
The Company has 1 subsidiary viz. Pofran Sales and Agency Limited and 1 associateviz. KSB MIL Controls Limited (previously MIL Controls Limited) as on 31st December 2017.
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 theCompany's subsidiary and associate is annexed to this Report in prescribed form AOC-1 asAnnexure I.
The audited financial statements of Pofran Sales and Agency Limited for the year ended31st March 2017 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.
ABRIDGED ANNUAL REPORT
In terms of the provision of the Companies Act 2013 Rules thereunder and SEBI ListingRegulations 2015 the Board of Directors has decided to circulate the Abridged AnnualReport containing salient features of the balance sheet and statement of profit and lossand other documents to the shareholders for the financial year 2017 under the relevantlaws.
Members who desire to obtain the full version of the Annual Report may write to theCompany Secretary at the registered office. Full version of the Annual Report is alsoavailable on the Company's website at www.ksbindia.co.in
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
REPORT ON CORPORATE GOVERNANCE
Annexed to this Report alongwith certificate thereon as Annexure III.
BUSINESS RESPONSIBILITY REPORT Annexed to this report as Annexure IV.
EXTRACT OF ANNUAL RETURN Annexed to this report as Annexure V.
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 arm's length basis. No materialcontracts or arrangements with related parties were entered into during the year underreview. Accordingly no transactions are being reported in form AOC-2 in terms of section134 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 behaviour of 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.
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 in place a policy for Prevention Prohibition and Redressal of SexualHarassment at Workplace in line with the requirements of the Sexual Harassment of women atWorkplace (Prevention Prohibition and Redressal) Act 2013 and Rules framed thereunderand Internal Complaints Committee has also been set up to redress complaints receivedregarding sexual harassment. During the year no complaint with allegations of sexualharassment was received by the Company.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. G. Swarup and Dr. Stephan Bross Directors retire by rotation and are eligible forreappointment.
Dr. Matthias Schmitz on recommendation of the Nomination and Remuneration Committeewas appointed by the Board as Additional Director effective from 25th July 2017 and heshall hold office upto the date of ensuing Annual General Meeting. The Company hasreceived a notice in writing from a member proposing his candidature for appointment ofDirector under Section 160 of the Companies Act 2013.
Mr. W. Stegmuller retired from services and hence resigned from the Board effectivefrom close of the business hours on 31st May 2017. The Board expresses its sincereappreciation for the valuable services provided by him during his tenure as a Director.
Ms. Sulajja Firodia Motwani resigned from the Board effective from close of businesshours on 22nd February 2018. The Board expresses its sincere appreciation for thevaluable services provided by her during her tenure as a Director.
The Board of Directors on recommendation of the Nomination and Remuneration Committeeand Audit Committee appointed Mr. Milind Khadilkar as Chief Financial Officer of theCompany effective from 6th June 2017.
Mr. Verghese Oommen Chief Financial Officer retired on 31st May 2017. The Boardexpresses its sincere appreciation for the valuable services provided by him during histenure as Chief Financial Officer.
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.
During the year ended 31st December 2017 five meetings of the Board were held.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The policy on Director's appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and othermatters forms part of report on Corporate Governance.
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. Share Transfer Committee
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 VI.
The information regarding employee remuneration as required pursuant to Rule 5(2) andRule 5(3) of the (Appointment and Remuneration of Managerial Personnel) Rules 2014 isavailable for inspection by members at the registered office of the Company between 2.00p.m. and 4.00 p.m. on any working day (Monday to Friday) upto the date of the 58th AnnualGeneral Meeting. Any member interested in obtaining such information may write to theCompany 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.
A certificate from Statutory Auditors has been received to the effect that theirappointment as Statutory Auditors of the Company if ratified at ensuing Annual GeneralMeeting would be according to the terms and conditions prescribed under Section 139 ofthe Act and Rules thereunder.
A resolution seeking ratification of their appointment forms part of the Noticeconvening the 58th Annual General Meeting and the same is recommended for yourconsideration and approval.
The Auditors' Report for the financial year 2017 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 2017.
Pursuant to provisions of Section 148 of the Act and Rules thereunder the Board on therecommendation 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 2018 at a remuneration as mentioned in theNotice convening the 58th Annual General Meeting and the same is recommended for yourconsideration and ratification. The Cost Audit Report for financial year 2016 which wasdue to be filed with the Ministry of Corporate Affairs on 29th June 2017 was filed on25th May 2017 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 2017 issued by Secretarial Auditors M/s Nilesh Shah andAssociates Company Secretaries Mumbai is annexed to this report as Annexure VII and itdoes not contain any qualification reservation adverse remark or disclaimer.
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 VIII.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
The composition of the CSR Committee CSR Policy and other required details are givenin the Annual Report on CSR Activities annexed to this Report as AnnexureIX.
The Board of Directors are grateful to Canadian Kay Pump Ltd. the main shareholderand to KSB SE (previously KSB AG) Germany the Company's collaborators for theirvaluable assistance and support. They wish to record their appreciation for theco-operation and support of the Company's shareholders bankers and other lendinginstitutions all employees including the workers staff and middle management and allothers concerned with the Company's business.
On behalf of the Board of Directors
| ||G. SWARUP |
| ||Chairman |
|Pune 22nd February 2018 || |
ANNEXURE VIII TO BOARD'S REPORT
A. CONSERVATION OF ENERGY
In continuous endeavor to conserve energy the Company has taken steps to introduceVariable Frequency Drive for pump testing. This will enable the tuning of powerrequirement as per need in the testing area. Company's new plant at Shirwal is equippedwith LED light fittings thereby optimizing energy usage.
B. TECHNOLOGY ABSORPTION
1. Performance and Product Improvements
The Company has taken efforts to optimize various hydraulics of Submersible range. Thishas led to the Company having maximum number of Energy Saving 5 and 4 star labelledproducts which is the highest in the pump industry.
2. Research and Development
We have strengthened our Submersible range by developing stainless steel sheet metalpump and complete stainless steel motor for Solar market. The Green Energy - Solar shallcontinue to be our focus area.
3. Benefits of Research and Development
The new range for Energy Sector is developed thus making us the very first Indian pumpCompany to indigenize this specialized technology.
4. Future Plans
To strengthen our product range for Building Services and Sewage segments to meet thedeveloping needs of these sectors.
5. Expenditure on Research and Development
The recurring expenditure during the year amounted to Rs.3.79 Million (previous yearRs.2.93 Million) and it is 0.04 % (previous year 0.04%) of the total turnover. There is nocapital expenditure during the year under review and previous year.
6. Technology Absorption Adaptation and Innovation
The indigenously developed new series for Energy sector has been successfullyintroduced. Also new End Suction Series are launched for meeting increasing needs ofBuilding Services and Industry segments.
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Exports during the year were Rs.1361 Million. Total foreign exchange earned during theyear was Rs.1405 Million. Export orders outstanding for execution are Rs.434 Million.Total foreign exchange used during the year was Rs.881 Million.
| ||On behalf of the Board of Directors |
| ||G. Swarup |
|Pune 22nd February 2018 ||Chairman |