Your Directors take pleasure in presenting their 66th Annual Report on thebusiness and operations of S H Kelkar And Company Limited (SHK / the Company) and auditedfinancial statements for the financial year ended 31 March 2022.
In compliance with the applicable provisions of Companies Act 2013 (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force and theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulation 2015 this report covers the financial performance and other developmentsduring the financial year 2021-22 and upto the date of the Board Meeting held on 25 May2022 to approve this report in respect of SHK on a standalone basis as well as SHK on aconsolidated basis comprising of SHK its subsidiaries and joint venture. Consolidated SHKhas been referred to as "Keva" in this report.
FINANCIAL HIGHLIGHTS & BUSINESS REVIEW Financial Highlights:
(Rs in Cr)
|Particulars ||Standalone ||Consolidated |
| ||2021-22 ||2020-21 ||Growth % ||2021-22 ||2020-21 ||Growth % |
|Sales ||802.26 ||756.13 ||6 ||1559.60 ||1315.12 ||19 |
|Other operating income ||4.63 ||4.88 ||(5) ||4.59 ||6.83 ||33 |
|EBITDA ||97.69 ||133.68 ||(27) ||232.14 ||259.34 ||(10) |
|Royalty Expense ||17.41 ||15.72 ||11 ||- ||0.29 ||(100) |
|Finance Costs ||3.91 ||6.28 ||(38) ||16.18 ||17.07 ||(5) |
|Depreciation ||27.68 ||27.63 ||- ||71.77 ||61.51 ||17 |
|Profit before Tax (PBT) before exceptional items ||66.10 ||99.77 ||(34) ||144.19 ||180.76 ||(20) |
|Share of profit in equity accounted investee ||- ||- ||- ||0.03 ||0.24 ||(88) |
|Profit before Tax (PBT) after exceptional items ||66.10 ||99.77 ||(34) ||132.26 ||193.50 ||32 |
|Taxation ||23.61 ||20.06 ||18 ||-17.16 ||49.53 ||135 |
|Profit after Tax (PAT) ||42.49 ||79.71 ||(47) ||149.42 ||143.97 ||4 |
The Directors are pleased to inform that Keva delivered a steady business performancein FY 2021-22. On a consolidated basis the total revenues from operations during FY2021-22 grew by 19% on a year-on-year basis i.e. from Rs 1315.12 crore during theprevious year to Rs 1559.6 crore in FY 2021-22. In FY 2021-22 on account of performanceof Creative Flavours and Fragrances SpA on a like-for-like basis revenues grew by 9%year-on-year. On the profitability front Keva's prudent inventory management in additionto better product mix enabled it to maintain margins at a healthy level despite the globalsupply chain and raw material inflation issues particularly in the second half of thefiscal. Keva's gross margins during the year stood at 41% and EBITDA margins were at 15%.EBITDA was lower by 10%
In the last eight quarters Keva has consistently delivered steady gross margins withinthe range of 39% to 44%. This indicates the financial efficiency and stability of Keva'sbusiness model. Profit after tax (PAT) during the year stood at Rs 149.42 crore.
Excluding exceptional gain and loss in FY 2021-22 and FY 202021 respectively PAT inFY 2021-22 stood at Rs 161.34 crore as against Rs 131.47 crore in the previous yearhigher by 23% year- on-year. During the year the Company's debt increased owning to theacquisitions done by the Company pursuant to which the debt equity ratio stood at 0.5X.
On a standalone basis the Company achieved a topline growth of 6%. EBITDA stood at Rs97.69 Cr and the net profit was Rs 42.49 Cr.
The fragrance division delivered an improved performance with fragrance businessreporting a healthy growth of 17.97% in revenues. The Company saw improved wins fromexisting and new large and mid-sized FMCG customers in the domestic markets. In additionnormalisation in demand across domestic and international markets assisted growth. Higheroperating leverage resulted in improved profitability.
The flavours division reported a stable performance during the year with an improvementof 14.4% on like-to-like basis in revenues. The division witnessed steady offtake indomestic and international markets. Margins during the year remained at healthy levels.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report forms an integral part of this report andgives details of the overall industry structure economic developments performance andstate of affairs of your Company's business in India and abroad risk management systemsand other material developments during the year under review.
Your Company is committed to benchmarking itself with global standards of CorporateGovernance. It has put in place an effective Corporate Governance system which ensuresthat provisions of the Act and Listing Regulations are duly complied with not only inform but also in substance.
A Report on Corporate Governance along with a Certificate from the Statutory Auditorsof the Company confirming corporate governance requirements as stipulated under theListing Regulations form an integral part of this Annual Report.
BUSINESS RESPONSIBILITY REPORT
Your Company strives to create value for all stakeholders whilst growing responsiblyand sustainably. A detailed information on the initiatives of the Company as enunciated inthe 'National Voluntary Guidelines on Social Environmental and Economic Responsibilitiesof Business 2011 is provided in the Business Responsibility Report a copy of which willbe available on the Company's website www.keva.co.in. For Business Responsibility Reportas stipulated under Regulation 34 of the Listing Regulations kindly refer to BusinessResponsibility Report section which forms part of this Annual Report.
Your Directors are pleased to recommend a final dividend of 7.5% i.e. Rs 0.75/- perequity share on 138420801 fully paid-up equity shares of face value of '10/- each forthe financial year 2021-22.
The list of unpaid dividend declared upto the financial year 2020-21 is available onCompany's website www.keva.co.in. Shareholders are requested to check the said list and ifany dividend due to them remains unpaid in the said list can approach the Company forrelease of their unpaid dividend.
TRANSFER TO GENERAL RESERVE AND CAPITAL REDEMPTION RESERVE
During the year under review no amount has been transferred to General Reserve of theCompany. Company transferred an amount of Rs 2.90 crore to Capital Redemption Reserve onBuyback.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
During the year under review there was no unpaid/unclaimed dividend that was requiredto be transferred to the Investor Education and Protection Fund (IEPF) Authority of theCentral Government of India.
CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of your Company for the financial year 2021-22are prepared in compliance with applicable provisions of the Companies Act 2013Accounting Standards and as prescribed by Securities and Exchange Board of India (SEBI)under Listing Regulations. The consolidated financial statements have been prepared on thebasis of audited financial statements of the Company and its subsidiary / joint venturecompanies as approved by their respective Board of Directors.
SUBSIDIARIES AND JOINT VENTURES
As on 31 March 2022 the Company had subsidiaries and joint ventures in India UnitedKingdom the Netherlands Italy Singapore China and Indonesia as mentioned hereunder:
Keva Fragrances Pvt. Ltd.
Keva Flavours Pvt. Ltd.
Keva Ventures Pvt. Ltd.
Creative Flavours & Fragrances S.p.A Italy (step-down subsidiary)
CFF Labs Srl Italy (step-down subsidiary)
CFF Commerciale Srl Italy (step-down subsidiary)
Keva UK Ltd. United Kingdom
Keva Europe BV the Netherlands
Keva Fragrance Industries Pte. Ltd. Singapore
V N Creative Chemicals Pvt. Ltd. (step-down subsidiary)
NuTaste Food and Drink Labs Pvt. Ltd. (step-down subsidiary)
Amikeva Pvt. Ltd. (step-down subsidiary)
PFW Aroma Ingredients B.V. the Netherlands (step-down subsidiary)
PT SHKKEVA Indonesia Indonesia (step-down subsidiary)
Anhui Ruibang Aroma Company Ltd China (step-down subsidiary)
Keva Italy Srl Italy (step-down subsidiary)
Nova Fragranze Srl Italy (step-down subsidiary)
Provier Beheer BV Netherlands (step-down subsidiary)
Holland Aromatics BV Netherlands (subsidiary of step- down subsidiary)
Purandar Fine Chemicals Pvt. Ltd. (Joint Venture)
A statement containing the salient features of the financial statements of thesubsidiaries in the prescribed format AOC- 1 is appended as Annexure A to this Report. Thefinancial statements of the subsidiaries are available on the website of the Company viz.www.keva.co.in.
The following key developments took place with regards to Subsidiaries and JointVentures of the Company:
Keva Fragrances Private Limited Keva Flavours Private Limited and CreativeFalvours and Fragrances SpA are the material subsidiaries of the Company in terms ofListing Regulations.
Keva Italy Srl ('Keva Italy') and Creative Flavours and Fragrances SpA ('CFF')subsidiaries of the Company entered into an agreement on 07 April 2021 for acquisition of70% equity stake of Nova Fragranze Srl Italy ('Nova'). Pursuant to the said agreementKeva Italy acquired 28% and CFF acquired 42%. In due course CFF also acquired KevaItaly's 28% stake in Nova. As on date CFF holds the entire 70% of Nova and thereforeNova is a wholly owned subsidiary of CFF.
The Company through Keva Chemicals Pvt. Ltd. step- down subsidiary of theCompany had acquired Fragrance Encapsulation Technology from Tanishka FragranceEncapsulation Technologies LLP ("TFET LLP") in April 2017. During the year underreview TFET LLP's name has been struck off from the Register of LLPs and this the saidLLP stands dissloved from 01 November 2021.
During the year under review Company incorporated a new company - Keva VenturesPrivate Limited (wholly owned subsidiary of S H Kelkar and Company Limited) to ventureinto new product line in F&F basis. Keva Ventures Private Limited acquired AmikevaPrivate Limited in February 2022 to venture into celebrity fine fragrance businessdevelopment.
Keva Flavours Private Limited acquired 100% equity stake of NuTaste Food andDrink Labs Private Limited ('NuTaste') in January 2022.
During the year Keva Europe BV - wholly owned subsidiary acquired 62% ofProvier Beheer BV holding company of Holland Aromatics BV - a leading fragrance Companyin Netherlands.
ACQUISITIONS Nova Fragranze Srl:
As the Members are aware Keva Italy S.r.l. ("Keva Italy") Italy andCreative Flavours & Fragrances S.p.A. ("CFF") Italy subsidiaries of theCompany had entered into an agreement for acquisition of 70% equity stake of NovaFragranze S.r.l. ("Nova") Italy on April 07 2021. Purusant to the saidagreement Keva Italy and CFF have acquired 28% and 42% equity stake of Nova during theyear. Nova is an Italy-based company specialized in the fragrance development andmarketing with focus on premium customers in hair care/beauty care segments.
This value-accretive and synergistic acquisition is in-sync with Keva's growth strategyto expand its addressable market in Italy and Europe expand its product offerings anddiversify into newer high-margin product segments. This acquisition will furtherstrengthen Keva's business capabilities and enhance its position in the global fragranceindustry.
Holland Aromatics B.V.:
During the year the Company through Keva Europe B.V. wholly owned subsidiary hasacquired 62% stake in Holland Aromatics B.V. a leading fragrance company in theNetherlands. Holland Aromatics B.V. has presence in Europe Middle East and Asia. Theacquisition was done by acquiring 62% stake of Provier Beheer B.V. holding company ofHolland Aromatics B.V. domiciled in the Netherlands. The remaining stake of 38% would beacquired in two tranches in a span of two years consideration for which would be linkedto the performance of Holland Aromatics B.V.
Keva's entry into Europe through acquisition of Creative Flavours & Fragrancs SpA(Italy) in 2018 coupled with establishment of Creative Development Centre in Amsterdam hasenabled Keva broaden its consumer understanding and geographical reach in a highlypenetrated European fragrance market. The acquisition of Holland Aromatics B.V is in linewith Keva's aspiration to be a global company thereby expanding its geographical presenceto cater to upcoming Northern Europe requirement.
NuTaste Food and Drink Labs Private Limited:
During the year the Company through its wholly owned subsidiary Keva FlavoursPrivate Limited has acquired 100% equity stake in NuTaste Food and Drink Labs PrivateLimited India ("NuTaste"). Incorporated in year 2006 as a subsidiary of FuerstDay Lawson Ltd. UK NuTaste has presence throughout India. NuTaste is in the business ofpremium grade ingredients and products to the fast growing food and beverage companieswith focus on taste and nutrition natural ingredients and extracts nutraceuticals etc.
The acquisition accelerates the momentum of Keva's flavour business. It will enableKeva to expand further into the high- potential flavour categories such as syrups saucesseasonings fruit preps and other such premium grade products. The acquisition furtherbrings on-board a solid and reputed customer base across the fast-growing FMCG & QSRspace. Overall the combined capabilities of NuTaste and Keva will add scale providecross-selling opportunities and accelerate growth going forward.
Amikeva Private Limited:
During the year the Company's wholly owned subsidiary Keva Ventures Private Limitedacquired 100% equity stake in Amikeva Private Limited ('Amikeva') formed to foray intodevelopment and marketing of fine fragrances basis emerging trends in European markets andcurate new product profile for consumer delight.
Amikeva has been formed by the promoter group of the Company in July 2021 with a sharecapital of Rs 2 lakhs to venture into fine fragrance business in line with Keva'sstrategy.
During the year under review the Company through tender offer route has bought back2900000 fully paid-up equity shares of Rs 10/- each of the Company at a price of Rs210/- per equity share representing 9.64% and 6.65% of the fully paid-up equity sharecapital and free reserves as per the audited standalone and consolidated financialstatements of the Company for the financial year ended 31 March 2022. The Company has notissued shares with differential voting rights nor granted stock options nor sweat equityduring the year
Your Company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014 during theyear.
PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIES PROVIDED
Particulars of loans given investments made guarantees given and securities providedas covered under the provisions of Section 186 of the Companies Act 2013 are given in thenotes to the Financial Statements.
CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All related party transactions are placed before the Audit Committee for its approval.During the year under review the Audit Committee approved transactions through theomnibus mode in accordance with the provisions of the Act and Listing Regulations.Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexure Bto this Report.
In terms of applicable provisions of the Act and the Articles of Association of theCompany Mr. Ramesh Vaze will retire by rotation in the forthcoming Annual General Meetingand will be considered for re-appointment because of his eligibility. Brief resume andother details of Mr. Ramesh Vaze who is proposed to be re-appointed as a Director of yourCompany have been furnished in the explanatory statement to the notice of the ensuingAnnual General Meeting.
Mr. Jairaj Purandare ceased to be an Independent Director of the Company with effectfrom 19 February 2022 pursuant to completion of his tenure as per the provisions of theAct and relevant provisions of the Listing Regulations. Mr. Amit Dalmia stepped down asNon - Executive Director of the Company on 17 May 2022 on account of his otherprofessional commitments. The Board places on record its appreciation for the guidance andsupport provided by Mr. Jairaj Purandare and Mr. Amit Dalmia during their tenure with theCompany.
Mr. Deepak Raj Bindra and Mr. Vasant Gujarathi were appointed as Independent Directorsof the Company for a term of five years from 15 December 2021 and 20 February 2022. Mr.Mark Elliott was re-appointed as an Independent Director for second term of three yearsfrom 15 December 2021. The aforementioned appointment/re-appointments of the IndependentDirectors were approved by the members of the Company through Special Resolution passed on04 December 2021 by way of Postal Ballot.
Ms. Neela Bhattacherjee has been appointed as an Additional Independent Director at theBoard Meeting held on 25 May 2022 with effect from 25 May 2022. As per the provisions ofSection 160 of the Companies Act your Company has received a notice from a memberspecifying their intention to propose the appointment of Ms. Neela Bhattacherjee asDirector in the forthcoming AGM.
The Whole-time Director does not receive any remuneration or commission from any of itssubsidiaries. None of the Directors of the Company has been disqualified to be a Directorof the Company on account of non-compliance with any of the provisions of the CompaniesAct 2013. The Independent Directors have been familiarised with the Company their rolesrights and responsibilities in the Company etc. The details of the FamiliarizationProgramme are available on the website of the Company www.keva.co.in. All the IndependentDirectors have given their declaration of independence as required under Section 149(6) ofthe Companies Act 2013. This has been noted by the Board of Directors. In the opinion ofthe Board Independent Directors fulfil the conditions specified in the Act Rules madethereunder and Listing Regulations and are independent of the management.
During the year 7 (seven) Board Meetings were convened and held on 27.05.202106.08.2021 24.08.2021 29.10.2021 14.12.2021 07.02.2022 and 24.03.2022. The particularsof attendance of the Directors at the said meetings are detailed in the CorporateGovernance Report of the Company which forms a part of this Report. The intervening gapbetween the Meetings was within the period prescribed under the Companies Act 2013 andListing Regulations.
MEETING OF INDEPENDENT DIRECTORS
The Independent Directors of the Company meet without the presence of the ManagingDirector or Executive Director or other Non-Independent Directors. These meetings areconducted in an informal and flexible manner to enable the Independent Directors todiscuss matters pertaining to inter alia review of performance of Non-IndependentDirectors and the Board as a whole assess the quality quantity and timeliness of flow ofinformation between the Company Management and the Board that is necessary for the Boardto effectively and reasonably perform its duties. One such meeting was held during theyear on 24 March 2022.
COMMITTEES OF THE BOARD
The Company has constituted various Board level committees in accordance with therequirements of Companies Act 2013. The Board has the following committees as under:
Nomination & Remuneration Committee
Corporate Social Responsibility Committee
Stakeholders' Relationship Committee
Risk Management Committee
Details of the above Committees alongwith composition and meetings held during the yearunder review are provided in the Corporate Governance Report forming part of this Report.
ANNUAL EVALUATION OF BOARD'S PERFORMANCE
Pursuant to the provisions of the Companies Act 2013 read with Rules issued thereunderand the Corporate Governance requirements as prescribed by Listing Regulations the Boardhas carried out an annual evaluation of its own performance and that of its Committees andindividual Directors.
The performance of the Board and individual Directors was evaluated by the Boardseeking inputs from all the Directors. The performance of the Committees was evaluated bythe Board seeking inputs from the Committee Members. The Nomination and RemunerationCommittee reviewed the performance of the individual Directors. A separate meeting ofIndependent Directors was held to review the performance of Non-Independent Directorsperformance of the Board as a whole and performance of the Executive Directors of theCompany. This was followed by a Board Meeting that discussed the performance of the Boardits Committees and individual Directors.
The criteria for performance evaluation of the Board included aspects like Boardcomposition and structure effectiveness of Board processes information and functioningetc. The criteria for performance evaluation of Committees of the Board included aspectslike composition of Committees effectiveness of Committee meetings etc. The criteria forperformance evaluation of the individual Directors included aspects on contribution to theBoard and Committee meetings like preparedness on the issues to be discussed meaningfuland constructive contribution and inputs in meetings etc.
NOMINATION AND REMUNERATION POLICY
The broad objectives of the Nomination and Remuneration Policy are i) to guide theBoard in relation to appointment and removal of Directors Key Managerial Personnel andSenior Management; ii) to evaluate the performance of the members of the Board and providenecessary report to the Board for further evaluation of the Board; c) to recommend to theBoard on Remuneration payable to the Directors Key Managerial Personnel and SeniorManagement.
The guiding principles of the policy are to ensure that:
The level and composition of remuneration is reasonable and sufficient toattract retain and motivate Directors KMP and senior management of the quality requiredto run the Company successfully
Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and
Remuneration to Directors Key Managerial Personnel and Senior Managementinvolves a balance between fixed and incentive pay reflecting short and long termperformance objectives appropriate to the working of the Company and its goals.
In accordance with the Nomination and Remuneration Policy the Nomination andRemuneration Committee formulates the criteria for appointment as a Director KeyManagerial Personnel and Senior Management identifies persons who are qualified to beDirectors and nominates candidates for Directorships subject to the approval of Boardevaluates the performance of the individual directors recommends to the Boardremuneration to Managing Director / Whole-time Directors ensures that the remuneration toKey Managerial Personnel Senior Management and other employees is based on Company'soverall philosophy and guidelines and is based on industry standards linked toperformance of the self and the Company and is a balance of fixed pay and variable pay andrecommends to the Board sitting fees/commission to the Non-Executive Directors.
The remuneration has been paid as per the Nomination and Remuneration Policy of theCompany. The policy may be accessed on the website of the Company at www.keva.co.in.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel in the Company as per Section 2(51) and 203 of theCompanies Act 2013 as on 31 March 2022 are as follows:
Mr. Kedar Vaze - Whole Time Director and Group Chief Executive Officer
Mr. Rohit Saraogi - Executive Vice President and Group Chief Financial Officer
Ms. Deepti Chandratre - Company Secretary & GM - Legal
Ms. Deepti Chandratre ceased to be Company Secretary & GM - Legal of the Company on30 April 2022. Consequent upon her cessation Mr. Rohit Saraogi has been redesignated asEVP Group Chief Financial Officer and Company Secretary of the Company with effect from 25May 2022.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134 (5) of the Companies Act 2013 the directors would like tostate that:
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed alongwith proper explanation relating to the material departures (if any);
b) The directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that were reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the year under review;
c) The directors have taken proper and sufficient care 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) The directors have prepared the annual accounts on a going concern basis;
e) The directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and are operatingeffectively; and
f) The directors have devised proper system to ensure compliance with the provisions ofall applicable laws and that such systems are adequate and operating effectively.
Your Company's Auditors Deloitte Haskins & Sells LLP [holding Registration No.117366W/W-100018 with the Institute of Chartered Accountants of India (ICAI)] wereappointed as the Statutory Auditors at the 65th Annual General Meeting of theCompany held on 10 August 2021 for a term of five years until the conclusion of 70thAnnual General Meeting to be held in 2026.
The Auditors' Report on the financial statements of the Company forms part of theAnnual Report. The same is unqualified and when read with notes on financial statementsis selfexplanatory and hence does not call for any further comments under Section 134 ofthe Companies Act 2013.
In terms of Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 M/s. Kishore Bhatia & Associates CostAccountants have been appointed as the Cost Auditors of the company for financial year2022-23. In accordance with the provisions of Section 148 of the Act read with Companies(Audit & Auditors) Rules 2014 your Company is required to maintain cost records andaccordingly such accounts and records are maintained by the Company. Further since theremuneration payable to the Cost Auditors is required to be ratified by the shareholdersthe Board recommends the same for approval by members at the ensuing annual generalmeeting.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 M/s. Mehta &Mehta Practising Company Secretaries were appointed to conduct Secretarial Audit of yourCompany during FY 2021-22.
The Secretarial Audit Report for the financial year ended 31 March 2022 is unqualifiedand annexed herewith as Annexure C to this Report.
INTERNAL CONTROL SYSTEMS
Your Company has a robust and well embedded system of internal controls that iscommensurate with the nature of business and size and complexity of its operations.Comprehensive policies guidelines and procedures are laid down for all businessprocesses. The internal control system has been designed to ensure that financial andother records are reliable for preparing financial and other statements and formaintaining accountability of assets.
The internal audit plan is dynamic and aligned to the business objectives of theCompany and is reviewed by the Audit Committee at regular intervals. Further the AuditCommittee also monitors the status of management actions emanating from internal auditreviews.
Management of risk has always been an integral part of the Company's strategy andstraddles its planning execution and reporting processes and systems. Your Companycontinues to focus on a system-based approach to business risk management.
Keva has a well-defined risk management framework in place and a robust organizationalstructure for managing and reporting risks. There is a Risk Management Policy in placethat is reviewed by the Risk Management Committee from time to time. The major risksidentified by the businesses and functions are systematically addressed through mitigatingactions on a continuing basis.
Your Company continues to monitor legal and compliance functions through workflow basedcompliance software tool 'LRMS'. LRMS helps to assist in creating an internal legal riskmanagement monitoring system to assess monitor mitigate and manage legal risks and isequipped with a tracking system alongwith timely reminders for compliances. This toolenables compliances to be made and tracked by factories and offices of your Company acrossthe country.
To create enduring value for all stakeholders and ensure the highest level of honestyintegrity and ethical behaviour in all its operations the Vigil Mechanism as envisaged inthe Companies Act 2013 the Rules prescribed thereunder and the SEBI Listing Regulationshas been implemented by the Company through the Whistle Blower Policy. The Policy providesfor adequate safeguards against victimisation of persons who use such mechanism and makeprovision for direct access to the Chairman of the Audit Committee.
The Whistle Blower Policy may be accessed on the website of the Company atwww.keva.co.in. During the year under review no protected disclosure from any WhistleBlower was received by the designated officer.
GOING CONCERN STATUS
During the year under review no significant or material orders were passed by theRegulators or Courts or Tribunals which may impact the going concern status and Company'soperations in future.
DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has in place a gender neutral policy on prevention of sexual harassment atworkplace and framework for employees to report sexual harassment cases at workplace andits process ensures complete anonymity and confidentiality of information. An InternalComplaints Committee (ICC) has been constituted in line with the provisions of the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and therules thereunder. On an ongoing basis Keva's employees and managers are oriented oncreating a safe and conducive work culture. During the year no complaints withallegations of sexual harassment were reported.
STOCK APPRECIATION RIGHTS SCHEME
In terms of SEBI (Share Based Employee) Benefits Regulations 2014 as amended fromtime to time the Nomination and Remuneration Committee of the Board inter aliaadministers and monitors the SH Kelkar Stock Appreciation Rights Scheme 2017 of yourCompany.
Your Company had lent Rs 75 Crore to SH Kelkar Employee Benefit Trust("Trust") for making secondary acquisition of equity shares subject tostatutory ceilings. During the year 60661 equity shares that had been tendered by theTrust for buy-back had been bought back by the Company. As on 31 March 2022 Trust held3245768 equity shares representing 2.34% of the paid-up share capital of the Company.
The disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations2014 and Section 62 1(b) read with Rule 12(9) of the Companies (Share Capital &Debentures) Rules 2014 are set out in Annexure D.
CORPORATE SOCIAL RESPONSIBILITY
Your Company's overarching aspiration to create significant and sustainable societalvalue inspired by a vision to subserve a larger national purpose and abide by the strongvalue of trusteeship is manifest in its Corporate Social Responsibility (CSR) initiativesthat embrace the disadvantaged sections of society especially in rural India. YourCompany has adopted a comprehensive CSR Policy that defines the framework for yourCompany's CSR Programme. The CSR Policy may be accessed on the Company's website at thelink: www.keva.co.in.
The Company focuses on areas like environmental sustainability conservation of energychild education and empowerment equipping and upgradation of educational infrastructureset-up with an aim to provide improved and advanced education system support visuallychallenged people through perfumery trainings and employability and rural development. Italso partners in relief operations in case of natural calamity or disaster.
During the year the Company has spent Rs 1.24 Crore on CSR activities. The AnnualReport on CSR activities is annexed herewith marked as Annexure E.
CONSERVATION OF ENERGY
Your Company has always considered energy and natural resource conservation as a focusarea. The Company's operations involve low energy consumption. The manufacturingfacilities of the Company are equipped with hi-tech energy monitoring and conservationsystems to monitor usage minimize wastage and increase overall efficiency at every stageof power consumption. The Company advocates energy efficiency in the course of productionand thereby reduces its carbon footprint.
Some of the measures adopted across the Company for energy conservation are as under:
Installation of Energy Efficient LED lights in place of conventional lights
Installation of solar power generation units at Mulund and Vashivali Units
Use of light sensors for street lights
Motion sensor for wash room passage
Installation of Solar day light reflector for better illumination on the shopfloor
Use of solid fuel boiler at plants plant to reduce energy consumption andthereby benefiting low running costs
Use of gravity flow in place of using water transferring pump for blendingpressured water supply toilet flush water tanks and WTP tank feed water
The capital expenditure on energy conservation during the year under review was notsubstantial.
ENVIRONMENT HEALTH AND SAFETY
An essential part of being a responsible company and employer is the health and safetyof our employees and the protection of the environment in which we operate.
Keva's ingredients and extraction facility at Vapi has been certified with ISO 9001ISO 14001 and ISO 45001. Facility at Mahad too has ISO certification for QualityEnvironment Management System and the OHSAS (Safety) Management System.
Various EHS initiatives taken by Keva are as under:
Installation of synchronization panel for use of solar energy during powerfailure
Replacement of diesel forklifts replaced by battery operated forklifts.
Use of STP-treated water for gardening
Reuse of RO permeate and WTP backwash water for cooling tower feed water
Repairing of weak / damaged fire hydrant line to arrest all leak points
Installation of foodie machines at Mulund and Vashivali Units which convertwaste food into manure.
Installation of Reverse Osmosis Plant and Multi Effect Evaporator
Participation of employees in Environment Health & Safety trainingsorganised by National Safety Council.
Celebration of Road Safety Week National Safety Week Fire Service Week WorldEnvironment Day
Annual Health Check-up was organized for the employees
Your Company is sensitive about the health and safety of its employees and has beenachieving continuous improvement in safety performance through a combination of systemsand processes as well as co-operation and support of all employees.
The Company took measures like daily disinfection of units thermal screening duringentry and exit provision of hand sanitizers at workplace tie-up with hospitalsauthorized to treat the COVID-19 patients distribution of masks sanitisers immunityboosters to employees across Keva's facilities to ensure health and safety of itsemployees in light of COVID- 19 pandemic.
Innovation has become one of the most important pillars of Keva. Keva has been puttinginnovation and technology to work to make its growth journey more meaningful. Keva'sCreative Centres at Amsterdam Jakarta Mumbai Singapore and Milan (CFF) are continuouslystriving for innovative creations through research activities. Keva has also established aFood Innovation Centre in Mumbai.
Your Company's Innovation and R&D functions work hand in hand for adopting bestpractices in innovation of the products and continue to focus on development of superiorproduct innovations renovation of the current portfolio for superior product experiencebuilding analytical excellence and regulatory compliance for the portfolio.
Expenditure on R & D and creative development during the year under review was Rs27.70 Crores on standalone basis and Rs 39.10 Crores on consolidated basis.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The foreign exchange earned in terms of actual inflows during the financial year2021-22 was Rs 26.99 Crores as against Rs 17.26 Crores in financial year 2020-21 on astandalone basis. The foreign exchange outgo in terms of actual outflows during thefinancial year 2021-22 was Rs 110.39 Crores as against Rs 83.32 Crores in financial year2020-21 on a standalone basis.
The foreign exchange earned in terms of actual inflows during the financial year2021-22 was Rs 686.10 Crores as against Rs 598.65 Crores in financial year 2020-21 on aconsolidated basis. The foreign exchange outgo in terms of actual outflows during thefinancial year 2021-22 was Rs 682.46 Crores as against Rs 555.51 Crores in financial year2020-21 on a consolidated basis.
At Keva we are focused on building an organization which continuously innovatesnurtures and develops talent and HR processes to deliver on the short term and long termbusiness strategy. Our strength lies within the diverse cultures backgrounds skills andexperience of our global team.
Keva maintains a collaborative inclusive non-discriminative and safe work culture andprovides equal opportunities to all employees. Keva's employees worked relentlessly duringthe pandemic to ensure that the business kept on going despite the challenges being facedas a result of the pandemic. Keva has developed a blended approach for learning anddevelopment that caters not only to each stage of an employee life-cycle but is alsospecific to the requirements of a specific function business and role demand.
Disclosures with respect to the remuneration of Directors Key Managerial Personnel andemployees as required under section 197 of the Companies Act 2013 read with Rule 5 (1) ofthe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenin Annexure F to this Report. Details of employee remuneration as required underprovisions of section 197 of the Companies Act 2013 read with Rule 5(2) & 5(3) ofCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 also formpart of this Report. However as per the provisions of Section 136 of the Companies Act2013 the report and accounts are being sent to the Members and others entitled theretoexcluding the said information. If any Member is interested in obtaining a copy thereofsuch Member may write to the Company Secretary in this regard.
The Company maintained healthy cordial and harmonious industrial relations at alllevels during the year. The Board acknowledges the contribution of the workers and theemployees towards meeting the objectives of the Company.
The Company's robust IT infrastructure includes a Centralised ERP system based on SAPcovering business functions across finance inventory management procurement andlogistics; Qlikview for data analysis; Cupid and BMango - customer project managementapplications DarwinBox - an HR platform through which employees across the globe have aneasy access to HR related information viz. policies newsletters news flash teaminformation Performance Development Process Learning and Development and other HRprocesses on real time basis; Cloud CRM to empower the sales team to manage customerengagements for overseeing sales projects on real time basis.
In accordance with the requirements of Section 92(3) of the Companies Act 2013 theannual return of the Company in respect of FY 2021-22 has been hosted on the website ofthe Company on weblinkhttps://www.keva.co.in/investors- categories/fy-2021-2022-2
There has been no change in the nature of business of the Company during the FinancialYear 2021-22.
During the Financial Year 2021-22 there were no significant and material orders passedby the regulators or Courts or Tribunals which can adversely impact the going concernstatus of the Company and its operations in future.
There have been no instances of frauds reported by the auditors under Section 143(12)of the Companies Act 2013 and the Rules framed thereunder either to the Company or tothe Central Government.
There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the period from 31 March 2022 and the date of thisDirectors' Report.
The Company is fully compliant with the applicable Secretarial Standards (SS) issued byInstitute of Company Secretaries of India viz. SS-1 & SS-2 on Meetings of the Board ofDirectors and General Meetings respectively.
There is no application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 during the year under review.
There was no instance of one time settlement of loan obtained from the Banks orFinancial Institutions.
Statements in the Annual Report including those which relate to Management Discussionand Analysis describing the Company's objectives projections estimates andexpectations may constitute 'forward looking statements' within the meaning of applicablelaws and regulations. Although the expectations are based on reasonable assumptions theactual results might differ.
Your directors place on record their appreciation of the continued support extendedduring the year by the Company's customers employees business associates suppliersbankers investors and government authorities. Your Directors would also like to thank alltheir shareholders for their continued faith in the company and its future.
| ||For and on behalf of the Board of Directors of S H KELKAR AND COMPANY LIMITED || CIN: L74999MH1955PLC009593 |
|Mumbai ||Ramesh Vaze Director & Chairman of the Board ||Kedar Vaze Director & Group Chief Executive Officer |
|25 May 2022 ||DIN: 00509751 ||DIN:00511325 |