The Board of Directors have pleasure to submit the report and audited financialstatements of the Company for the year ended 31st December 2020.
FINANCIAL RESULTS AND DIVIDEND Financial Results (Standalone):
| || ||Rs Million |
| ||Year ended December 31 2020 ||Year ended December 31 2019 |
|Revenue from operations and Other Income ||12404.14 ||13180.39 |
|Profit before tax ||1549.34 ||1375.81 |
|Income tax expense || || |
|Current ||612.17 ||337.72 |
|Deferred tax ||(36.21) ||59.84 |
|Total tax expense ||575.96 ||397.56 |
|Profit for the year ||973.38 ||978.25 |
|Other comprehensive income ||(37.74) ||(52.56) |
|Total comprehensive income ||935.64 ||925.69 |
|Appropriations: || || |
|Opening balance of retained earnings ||6370.53 ||5695.94 |
|Profit for the year ||973.38 ||978.25 |
|Dividend paid (including tax thereon) ||(278.46) ||(251.10) |
|Other comprehensive income recognised directly in retained earnings ||(37.74) ||(52.56) |
|Total retained earnings ||7027.71 ||6370.53 |
|EPS ||27.96 ||28.10 |
The Company does not propose to transfer any amount to its Reserves for the year underreview.
The Board of Directors propose a dividend of Rs8.5 per share of Rs 10 each (85 %).
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 at:www.ksbindia.co.in GENERAL REVIEW
The Financial year 2020 posed several challenges on account of adverse situations ofCOVID-19 pandemic. With the government of India announcing nation-wide lockdown towardsthe end of the first quarter of 2020 to contain the spread COVID-19 pandemic the countrywitnessed complete shutdown of business and social activities. The Company's plants acrosslocations were shut during the lockdown. The plants resumed the operations post-lockdownfollowing the government protocols. The extensive focus on the development andimplementation of workplace response plans to address COVID-19-related health and safetyrisks at each site ensured that our people felt safe and were informed about the necessarypreventive measures.
Despite such multi-pronged challenges the Company could achieve relatively goodperformance during the year 2020. The Company could achieve higher profitability ascompared to previous year due to reduction in fixed costs and overheads in the face ofpandemic situations and due to excellent steps taken by management for cost cuttingmeasures and to improve the performance of the Company in such situations by reducingoverdue payments and execution of orders and improving productivity.
Export increased by Rs 94 Million from Rs 2245 Million last year to Rs 2339 Million.
The Company continues with its efforts to maintain growth even during thecontinuedpandemic situation and related challenges.
ICRA Limited has reaffirmed the Long Term rating (Fund based) [ICRA] AA+ (stable) andShort Term Rating [ICRA] A1+ assigned for the Line of Credit of the Company. Thisreaffirms the high reputation and the trust Company has earned for its sound financialmanagement and its ability to meet financial obligations. Below Credit Ratings areobtained during past 3 years:
|Year ||Amount (Rs in Million) ||Rating |
|2020 ||25000.00 ||Long Term AA+ Short Term A1+ |
|2019 ||25000.00 ||Long Term AA+ Short Term A1+ |
|2018 ||12000.00 ||Long Term AA+ Short Term A1+ |
The Company does not have any debt instruments fixed deposit program or any scheme formobilization of funds and accordingly it has not obtained any credit ratings during thefinancial year for these purposes.
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 Rs 541963 being unclaimed dividends up to the year 31stDecember 2013 were transferred to the Investor Education and Protection Fund establishedby the Central 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 Investor's Education and Protection Fund (IEPF).Accordingly during the year Company has transferred 3180 equity shares to the IEPFincluding the outstanding Bonus shares. The details of equity shares transferred areavailable on the Company's 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 2020.
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 2020 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 electronically upon request by any member of theCompany interested in 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 Annexed to this reportas Annexure V.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES Contracts or arrangementswith related parties referred to under Section 188 of the Act entered into during thefinancial year were on an arm's length basis. No material contracts or arrangements withrelated parties were entered into during the year under review. Accordingly notransactions are being reported in form AOC- 2 in terms of section 134 of the Act.
DISCLOSURE UNDER REGULATION 34(3) OF SEBI LISTING REGULATIONS 2015 There are no loansand advances in the nature of loans to subsidiary/ associate/ firms/ Companies in whichDirectors 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 nosignificant or material order passed during the year by any regulators courts ortribunals impacting the going concern status of the Company or its future operations.
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 one complaint with allegations of sexualharassment was received by the Company and the same is under investigation. DIRECTORS ANDKEY MANAGERIAL PERSONNEL
Dr. Stephan Bross retires by rotation and is eligible for reappointment.
At the 59th Annual General Meeting of the Company held on 8th May 2019 theshareholders have approved re-appointment of Independent Director Mr. V.K. Viswanathan fora period of five consecutive years effective from 16th January 2020.
The Board of Directors on recommendation of the Nomination and Remuneration Committeeand Audit Committee appointed Mr. Mahesh Bhave as GM-Finance and Company Secretary andKey Managerial Personnel of the Company effective from 16th January 2020.
The Board of Directors on recommendation of the Nomination and Remuneration Committeehas proposed re-appointment of Mr. Rajeev Jain as Managing Director and Key ManagerialPersonnel of the Company for a term of 5 years effective from 1st July 2021. The Boardrecommends this re-appointment for approval of the shareholders.
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. BOARD MEETINGS
During the year ended 31st December 2020 four meetings of the Board were held. POLICYON 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. The detailed policy is available onthe Company's 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
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 haveselected such accounting policies and applied them 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 at the end of the financial year and of the profit or loss ofthe Company for that period; (c) proper and sufficient care has been taken for themaintenance of adequate accounting records in accordance with the provisions of this Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother 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 compliancewith the provisions of all applicable laws were in place and that such systems wereadequate 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 Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 will be available electronically for inspection by members upto Thursday 29th April2021 being the date of the 61st AGM. Any member interested in obtaining such informationmay write to the Company Secretary and the same will be furnished electronically on suchrequest.
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.
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.
The Auditors' Report for the financial year 2020 does not contain any qualificationreservation adverse remark or disclaimer except the updated comment about the incident offraud as reported by the Company in previous Annual Report 2019.
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 2021 at a remuneration as mentioned in theNotice convening the 61st Annual General Meeting and the same is recommended for yourconsideration and ratification. The Cost Audit Report for financial year 2019 which wasdue to be filed with the Ministry of Corporate Affairs before 29th June 2020 was filedon 25th May 2020 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 2020 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 except theself explanatory comments. During the year due to technical glitches faced on theMinistry of Corporate Affairs (MCA) Portal the Company could not upload andpay for the said eForm MGT-14. The form pertained to intimation of prescribed mattersunder Section 179 of the Act. The Company attempted several times for uploading andpayment of the Form but each time technical issues were faced on the MCA portal. Due tosuch technical reasons and lockdown conditions the form remained un-uploaded for more than300 days. The Company with the approval of Board of Directors is in the process ofinitiating to file for condonation of delay and make the compliance good.
During the year 2020 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 VIII. 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 IX.
The Board of Directors are grateful to Canadian Kay Pump Ltd. the main shareholderand to KSB SE & Co. KGaA Germany the Company's collaborators for their valuableassistance and support. They wish to record their appreciation for the co-operation andsupport of the Company's shareholders bankers and all employees including the workersstaff and management and all others concerned with the Company's business.
| ||On behalf of the Board of Directors |
| ||GAURAV SWARUP |
| ||Chairman |
|Mumbai 25th February 2021 || |