Dear Shareholders,
Your Directors take pleasure in presenting their 67th Annual Report on
the business and operations of S H Kelkar and Company Limited (SHK / the Company) and
Audited Financial Statements for the financial year ended 31 March 2023.
In compliance with the applicable provisions of the Companies Act, 2013
(the Act) (including any statutory modification(s) or re- enactment(s) thereof, for the
time being in force and the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulation, 2015 (the Listing Regulations), this report
covers the financial performance and other developments during the financial year 2022-23
and upto the date of the Board Meeting held on 30 May 2023 to approve this report in
respect of SHK on a standalone basis as well as on a consolidated basis comprising of SHK
and its subsidiaries. Consolidated SHK has been referred to as "Keva" in this
report.
FINANCIAL HIGHLIGHTS & BUSINESS REVIEW
(` in crores)
Financial Highlights: |
|
|
|
|
|
(` in crores) |
Particulars |
|
Standalone |
|
|
Consolidated |
|
|
2022-23 |
2021-22 |
Growth % |
2022-23 |
2021-22 |
Growth % |
Sales |
868.30 |
802.26 |
8.23 |
1676.90 |
1559.60 |
7.52 |
Other operating income |
11.37 |
4.63 |
145.57 |
9.62 |
4.59 |
109.59 |
EBITDA |
139.05 |
97.69 |
42.34 |
229.13 |
232.14 |
(1.30) |
Royalty Expense |
18.70 |
17.41 |
7.38 |
- |
- |
- |
Finance Costs |
4.95 |
3.91 |
26.60 |
23.89 |
16.18 |
47.65 |
Depreciation |
27.32 |
27.68 |
(1.30) |
80.45 |
71.77 |
12.09 |
Profit before Tax (PBT) before exceptional items |
106.78 |
66.10 |
61.54 |
124.79 |
144.19 |
(13.45) |
Share of profit in equity accounted investee |
- |
- |
- |
(0.16) |
0.03 |
(633.33) |
Profit before Tax (PBT) after exceptional items |
76.59 |
66.10 |
61.54 |
104.36 |
132.26 |
(21.09) |
Taxation |
24.42 |
23.61 |
3.43 |
41.41 |
(17.16) |
(341.32) |
Profit after Tax (PAT) |
52.17 |
42.49 |
22.21 |
62.95 |
149.42 |
(57.87) |
Business Review:
The Directors are pleased to inform that Keva delivered a steady
business performance in FY 2022-23 inspite of challenging business environment. On a
consolidated basis, the total revenues from operations during FY 2022-23 grew by 7.82% on
a year-on-year basis i.e. from ` 1,564.19 crore during the previous year to ` 1,686.52
crore in FY 2022-23. In FY 2022-23, growth was led by India fragrance and flavour business
largely led by acquisitions. Europe core business was fiat at constant currency with
slowdown in H1 FY 2022-23 due to impact of Ukraine-Russia war impacting demand.
Keva's gross margins during the year stood at 40.1% and EBITDA margins were at
13.58%. The group generated a cash profit of ` 177 crore during the year. Profit after tax
(PAT) during the year stood at ` 62.95 crore. Excluding exceptional gain and loss in FY
2022-23 and FY 2021-22, respectively, PAT in FY 2022-23 stood at ` 83.2 crore as
against ` 161.4 crore in the previous year, lower by 48% year-on-year due to one-time tax
benefit of ` 64.5 crore. During the year, Company's debt reduced to ` 476 crore from
` 509 crore with a debt equity ratio at 0.43X.
On a standalone basis, the Company achieved a topline growth of 8.23%.
EBITDA stood at `139.05 crore and the net profit was ` 52.17 crore.
The core fragrance division (excluding global ingredients) delivered an
improved performance in India registering a growth of 9.2% while overall fragrance
business had 5.4% growth in revenues. The Company saw improved wins from existing and new
large and mid-sized FMCG customers in the domestic markets.
The flavours division reported a strong performance on the back of
acquisition and India Business, while rest of world was fiat with an overall growth of
51.9%.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed Management Discussion and Analysis Report forms an integral
part of this report and gives details of the Overall industry structure, Economic
developments, Segment-wise overview of business performance, Financial overview, Outlook,
Human Resources, Risks & Opportunities, Internal control systems and their adequacy.
CORPORATE GOVERNANCE
Your Company is committed to benchmarking itself with global standards
of Corporate Governance. It has put in place an effective Corporate Governance system
which ensures that provisions of the Act and Listing Regulations are duly complied with,
not only in form but also in substance.
A Report on Corporate Governance along with a Certificate from the
Statutory Auditors of the Company confirming corporate governance requirements as
stipulated under the Listing Regulations forms an integral part of this Annual Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
Regulation 34 of the Listing Regulations mandates for the top 1000
listed companies to submit Business Responsibility and Sustainability Report with effect
from financial year 2022-23. For Business Responsibility and Sustainability Report as
stipulated under Regulation 34 of the Listing Regulations, kindly refer to Business
Responsibility and Sustainability Report section which forms part of this Annual Report.
DIVIDEND
Your Directors are pleased to recommend a final dividend of 20%
i.e. ` 2/- per equity share on 13,84,20,801 fully paid-up equity shares of face value of
`10/- each for the financial year 2022-23. The dividend pay-out is in accordance with the
Company's Dividend Distribution Policy.
The list of unpaid/unclaimed dividend, for the dividend declared upto
FY 2021-22, is available on the website of the Company viz., www.keva.co.in. Shareholders
are requested to check the said list and if any dividend due to them remains
unpaid/unclaimed in the said list, can approach the Company for release of their
unpaid/unclaimed dividend.
TRANSFER TO GENERAL RESERVE
During the year under review, no amount has been transferred to General
Reserve of the Company.
TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO INVESTOR EDUCATION AND
PROTECTION FUND
The details relating to unclaimed dividend and unclaimed shares forms
part of the Corporate Governance Report forming part of this Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Consolidated Financial Statements of your Company for the Financial
Year 2022-23, are prepared in compliance with applicable provisions of the Act, Accounting
Standards and as prescribed by Securities and Exchange Board of India (SEBI) under Listing
Regulations. The Consolidated Financial Statements have been prepared on the basis of
Audited Financial Statements of the Company and its subsidiary, as approved by their
respective Board of Directors.
SUBSIDIARIES
As on 31 March 2023, the Company had subsidiaries in India, the United
Kingdom, 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 SpA (step-down subsidiary) Keva UK
Ltd (step-down subsidiary) Keva Europe BV
Keva Fragrance Industries Pte. Ltd.
NuTaste Food and Drink Labs Pvt. Ltd. (step-down subsidiary) Amikeva
Pvt. Ltd. (step-down subsidiary) PT SHKKEVA Indonesia (step-down subsidiary) Anhui Ruibang
Aroma Company Ltd (step-down subsidiary) Keva Italy Srl (step-down subsidiary) Provier
Beheer BV (step-down subsidiary) Holland Aromatics BV (subsidiary of step-down subsidiary)
The following key developments took place with regard to Subsidiaries
and Joint Venture of the Company:
Keva Fragrances Private Limited, Keva Flavours Private Limited, Keva
Fragrance Industries Pte. Ltd., Singapore and Creative Flavours and Fragrances SpA, Italy
are the material subsidiaries of the Company in terms of the Listing Regulations.
Company's entire stake held in Keva UK Ltd was sold during the
year to Keva Europe BV - wholly owned subsidiary of the Company, at a consideration of GBP
44,15,488, arrived basis valuation report. Post-acquisition by Keva Europe BV,
there was also a reduction in capital of Keva UK Ltd. Company made an additional
investment of Euro 49,99,998.06 in its wholly owned subsidiary, Keva Europe BV by
subscribing to 24,15,458 Equity Shares of nominal value of Euro 1 each at Euro 2.07 per
share.
During the year, Creative Flavours and Fragrances SpA (CFF')
subsidiary of the Company acquired balance 30% stake in Nova Fragranze Srl,
(Nova'). Pursuant to such acquisition, Nova became wholly owned subsidiary of
CFF. Post this acquisition, all three wholly owned subsidiaries of CFF i.e. CFF Labs Srl,
CFF Commerciale Srl and Nova Fragranze Srl were merged with CFF during the month of March
2023. Keva Europe BV - wholly owned subsidiary has further acquired 19% equity stake of
Provier Beheer BV, Holding Company of Holland Aromatics BV - a leading fragrance Company
in the Netherlands thereby increasing the total stake of Keva Europe BV from existing 62%
to 81%.
Keva Europe BV, during the year, acquired 100% stake of PFW Aroma
Ingredients BV from Keva UK Ltd. Post this acquisition, PFW Aroma Ingredients BV also got
merged with Keva Europe BV for operational convenience. The effective date of merger is 01
April 2022. Company's wholly owned subsidiary, Keva Fragrances Private Limited, sold
its entire stake i.e. 50% stake held in Purandar Fine Chemicals Private Limited. As on 31
March 2023, Purandar Fine Chemicals Private Limited ceases to be a joint venture of Keva
Fragrances Private Limited.
National Company Law Tribunal, Mumbai on 18 May 2023 passed an order
for approval of merger of VN Creative Chemicals Private Limited with Keva Fragrances
Private Limited. The appointed date of merger is 01 April 2022 and effective date is 30
May 2023.
In compliance with IND-AS-110, your Company has prepared its
Consolidated Financial Statements, which forms part of this Annual Report. Pursuant to the
provisions of Section 129(3) of the Act, a separate statement containing the salient
features of the subsidiary companies in the prescribed Form AOC - 1 forms part of the
Consolidated Financial Statements and is annexed to this Report as Annexure A. The Audited
Financial Statements of the subsidiary companies will be available to any Member seeking
such information at any point of time. The Financial Statements of the Company along with
the Audited Financial Statements of the subsidiaries will be available at the website of
the Company, www.keva.co.in, and kept open for inspection at the registered office of the
Company.
SHARE CAPITAL
During the year under review, the authorized share capital of the
Company was ` 1,71,25,00,000 divided into 15,93,14,500 Equity shares of ` 10 each and
1,19,35,500 preference shares of ` 10 each and paid-up share capital was 13,84,20,801
fully paid-up equity shares of face value of `10/- each. There was no change in the share
capital during the year. The Company has not issued shares with differential voting rights
and has not granted stock options or sweat equity during the year.
PUBLIC DEPOSITS
During the year under review, your Company has not accepted any
deposits within the meaning of Section 73 of the Act, read with Companies (Acceptance of
Deposits) Rules, 2014.
PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND
SECURITIES PROVIDED
Particulars of loans given, investments made, guarantees given
andsecuritiesprovidedascoveredundertheprovisionsofSection 186 of the Act are given in the
notes to the Financial Statements. The Company has granted loans, provided guarantee and
made investment in its wholly owned subsidiary(ies) and other body corporates for their
business purpose.
RELATED PARTY TRANSACTIONS
All related party transactions entered into by the Company during the
financial year were conducted at an arm's length basis. No material contracts or
arrangements with related parties were entered into during the year under review.
Accordingly, disclosure of Related Party Transactions as required under Section 134(3)(h)
of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 in Form AOC-2 is not
applicable.
During the year, the Audit Committee had granted an omnibus approval
for transactions, which were repetitive in nature for one financial year. The Audit
Committee on a quarterly basis reviewed all such omnibus approvals. All related party
transactions were placed at the meetings of Audit Committee and of the Board of Directors
for the necessary review and approval. In case of transactions which are unforeseen, the
Audit Committee grants an approval to enter into such unforeseen transactions provided
that the transaction value does not exceed the limit of `1 crore per transaction in a
Financial Year. The Company has developed and adopted relevant SOPs for the purpose of
monitoring and controlling such transactions. Your Company's policy for transactions
with the related party which was reviewed by the Audit Committee and approved by the
Board, can be accessed at www.keva.co.in. Details of Related Party Transactions are set
out in Notes to the Standalone Financial Statements.
DIRECTORS
Mrs. Prabha Vaze (DIN: 00509817), Non-Executive Non-Independent
Director, retires by rotation at the 67th Annual General Meeting and being eligible has
offered herself for reappointment. Based on the recommendation of Nomination and
Remuneration Committee, the Board has recommended for approval of Members, re-appointment
of Mrs. Prabha Vaze as Non-Executive Non-Independent Director at the ensuing AGM. Brief
Profile and other information in this regard forms part of AGM Notice.
Members at the 66th AGM of the Company approved reappointment of Mr.
Ramesh Vaze (DIN: 00509751) as Non-
Executive Director. Further, Members approved the appointment of Ms.
Neela Bhattacherjee (DIN: 01912483) as Non-Executive Independent Director of the Company
for a term of 5 (five) years effective 25 May 2022. Ms. Neela Bhattacherjee is the person
of integrity and has the relevant expertise and experience.
Mr. Amit Dalmia (DIN: 05313886) stepped down as Non-Executive Director
of the Company with effect from closure of business hours of 17 May 2022 on account of his
other professional commitments. Mr. Dalip Sehgal (DIN: 00217255) ceased to be a
Non-Executive Independent Director of the Company with effect from the closure of business
hours of 08 December 2022 and Ms. Sangeeta Singh (DIN: 06920906) ceased to be a
Non-Executive Independent Director of the Company with effect from closure of business
hours of 18 February 2023 on account of completion of their second term to serve as an
Independent Director of the Company. The Board places on record its appreciation for the
guidance and support provided by Mr. Amit Dalmia, Mr. Dalip Sehgal and Ms. Sangeeta Singh
during their association with the Company.
The Members of the Company through Postal Ballot approved
re-appointment of Mr. Shrikant Oka as an Independent Director of the Company for the
second consecutive term of 5 (five) years commencing from 25 May 2023.
The Whole-time Director does not receive any remuneration or commission
from any of its subsidiaries. None of the Directors of the Company has been disqualified
to be a Director of the Company on account of non-compliance with any of the provisions of
the Act. The Independent Directors have been familiarised with the Company, their roles,
rights and responsibilities in the Company. The details of Familiarization Programmes are
available on the website of the Company www.keva.co.in. All the Independent Directors have
given their Declaration of Independence as required under Section 149(6) of the Act and
Regulation 25(8) of the Listing Regulations. This has been noted by the Board of
Directors. In the opinion of the Board, Independent Directors fulfil the conditions
specified in the Act, Rules made thereunder and the Listing Regulations and are
independent of the management.
BOARD MEETINGS
During the year, 7 (seven) Board Meetings were convened and held on
12.04.2022, 25.05.2022, 09.08.2022, 14.10.2022, 21.10.2022, 02.02.2023 and 27.03.2023. The
particulars of attendance of the Directors at the said meetings are detailed in the
Corporate Governance Report of the Company, which forms a part of this Report. The
intervening gap between the Meetings was within the period prescribed under the Act and
the Listing Regulations.
MEETING OF INDEPENDENT DIRECTORS
The Independent Directors of the Company meet without the presence of
Executive Director or other Non-Independent
Directors' Report
Directors. These meetings are conducted in an informal and flexible
manner to enable the Independent Directors to discuss matters pertaining to, inter alia,
review of performance of Non-Independent Directors and the Board as a whole, assess the
quality, quantity and timeliness of flow of information between the Company Management and
the Board that is necessary for the Board to effectively and reasonably perform its
duties. One such meeting was held during the year on 27 March 2023.
COMMITTEES OF THE BOARD
The Company has constituted various Board level committees in
accordance with the requirements of the Act and the Listing Regulations. The Board has the
following committees: Audit Committee 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 year under 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 Act read with Rules issued thereunder
and the Corporate Governance requirements as prescribed under the Listing Regulations, the
Board has carried out an annual evaluation of its own performance and that of its
Committees and Individual Directors.
The performance of the Board and Individual Directors was evaluated by
the Board seeking inputs from all the Directors. The performance of the Committees was
evaluated by the Board seeking inputs from the Committee Members. The Nomination and
Remuneration Committee reviewed the performance of the Individual Directors. A separate
meeting of Independent Directors was held to review the performance of Non-Independent
Directors, performance of the Board as a whole and performance of the Executive Directors
of the Company. This was followed by a Board Meeting that discussed the performance of the
Board, its Committees and Individual Directors.
The criteria for performance evaluation of the Board included aspects
like Board composition and structure, effectiveness of Board processes, information and
functioning etc. The criteria for performance evaluation of Committees of the Board
included aspects like composition of Committees, effectiveness of Committee meetings etc.
The criteria for performance evaluation of the Individual Directors included aspects on
contribution to the Board and Committee meetings like preparedness on the issues to be
discussed, meaningful and constructive contribution and inputs in meetings etc.
NOMINATION AND REMUNERATION POLICY
The broad objectives of the Nomination and Remuneration Policy are i)
to guide the Board in relation to appointment and removal of Directors, Key Managerial
Personnel and Senior Management; ii) to evaluate the performance of the members of the
Board; iii) to recommend to the Board on remuneration payable to the Directors, Key
Managerial Personnel and Senior Management.
The guiding principles of the Nomination and Remuneration Policy are to
ensure that: The level and composition of remuneration is reasonable and sufficient to
attract, retain and motivate Directors, Key Managerial Personnel and Senior Management of
the quality required to run the Company successfully; Relationship of remuneration to
performance is clear and meets appropriate performance benchmarks; Remuneration to
Directors, Key Managerial Personnel and Senior Management involves a balance between fixed
and incentive pay reflecting short and long term performance objectives appropriate to the
working of the Company and its goals; and Remuneration may be subject to revision from
time to time in line with company performance.
In accordance with the Nomination and Remuneration Policy, the
Nomination and Remuneration Committee formulates the criteria for appointment as a
Director, Key Managerial Personnel and Senior Management, identifies persons who are
qualified to be Directors and nominates candidates for Directorships subject to the
approval of Board, evaluates the performance of the Individual Directors, recommends to
the Board, remuneration to Managing Director / Whole-time Directors, ensures that the
remuneration to Key Managerial Personnel, Senior Management and other employees is based
on Company's overall philosophy and guidelines and is based on industry standards,
linked to performance of the self and the Company and is a balance of fixed pay and
variable pay and recommends to the Board, sitting fees/commission to the Non-Executive
Directors.
The remuneration has been paid as per the Nomination and Remuneration
Policy of the Company. The Nomination and Remuneration Policy is available on the website
of the Company at https://keva.co.in/investor-updates/#92-178-policies.
KEY MANAGERIAL PERSONNEL
The Key Managerial Personnel of the Company as per Section 2(51) and
Section 203 of the Act as on 31 March 2023 are as follows: Mr. Kedar Vaze
Whole-time Director and Group Chief Executive Officer
Mr. Rohit Saraogi EVP Group Chief Financial Officer and Company
Secretary
Ms. Deepti Chandratre, Company Secretary & GM Legal resigned
with effect from the closure of business hours of 30 April 2022. Consequent upon her
resignation, Mr. Rohit Saraogi, Executive Vice President and Group Chief Financial Officer
of the Company was appointed as the Company Secretary and Compliance Officer of the
Company with effect from 25 May 2022.
DIRECTORS' RESPONSIBILITY STATEMENT
In terms of Section 134(5) of the Act the Directors of the Company
state that:
a) In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to the material
departures, if any;
b) The Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that were reasonable and prudent so as
to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit of the Company for the year under review;
c) The Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets 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 the Company and that such internal financial controls are adequate and are
operating effectively; and
f) The Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems are adequate and operating
effectively.
STATUTORY AUDITORS
Your Company's Auditors, Deloitte Haskins & Sells LLP [holding
Registration No. 117366W/W-100018 with the Institute of Chartered Accountants of India
(ICAI)] were appointed as the Statutory Auditors at the 65th Annual General Meeting of the
Company held on 10 August 2021 for a term of five years until the conclusion of 70th
Annual General Meeting to be held in 2026.
The Auditor's Report on the Financial Statements of the Company
for the Financial Year ended 31 March 2023, is self-explanatory and does not contain any
qualifications, reservations, adverse remarks, or disclaimers that require any
clarification or explanation. The Auditors' Report on the Financial Statements of the
Company forms part of the Annual Report.
COST AUDITORS
During the year under review, in accordance with Section 148(1) of the
Act, the Company has maintained the accounts and cost records, as specified by the Central
Government. Such accounts and cost records are subject to audit by M/s. Kishore Bhatia
& Associates, Cost Auditors of the Company for the Financial Year 2022-23.
The Board at its meeting held on 30 May 2023, based on the
recommendation of the Audit Committee, appointed M/s Kishore Bhatia & Associates (Firm
Registration 00294) as the Cost Auditors of the Company to conduct Cost Audit of cost
records of the Company for the FY 2023-24. A remuneration of `2,20,000/- (Rupees Two Lakhs
Twenty Thousand) plus applicable taxes and out-of-pocket expenses has been approved
subject to rati_cation of remuneration by Members at ensuing AGM.
SECRETARIAL AUDITORS
Pursuant to the provisions of Section 204 of the Act read with the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with
Regulation 24A of the Listing Regulations, the Board of Directors of the Company had
appointed M/s. Mehta & Mehta, Practicing Company Secretaries, to conduct Secretarial
Audit of your Company for the Financial Year 2022-23.
The Secretarial Audit Report in the prescribed Form MR-3 issued by M/s.
Mehta & Mehta, for the Financial Year 2022-23 annexed to this Report (Annexure B) is
self-explanatory and contains a qualification with regard to the gap between 2
consecutive meetings of Risk Management Committee, exceeding 180 days. The Board of
Directors have taken note of the Secretarial Audit Report, and the adherence to the
Compliances will be ensured.
Further, pursuant to Regulation 24A of the Listing Regulations, the
Secretarial Audit of the Unlisted Indian Material Subsidiaries of the Company identified
in terms of Regulation 16(1)(c) of the Listing Regulations viz. Keva Fragrances Private
Limited and Keva Flavours Private Limited was conducted by M/s. Mehta & Mehta,
Practising Company Secretaries, and M/s. Ferrao MSR and Associates, Practicing Company
Secretaries, respectively.
The Secretarial Audit Report of the afore-mentioned Unlisted Indian
Material Subsidiaries issued by the respective Secretarial Auditors does not contain any
qualifications, reservations, adverse remarks, or disclaimers that require any
clarification or explanation. The Secretarial Audit Report of such Unlisted Indian
Material Subsidiaries shall be made available to any Member on request.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Company has a robust and well embedded system of internal controls
that is commensurate with the nature of business and size and complexity of its
operations. Comprehensive policies, guidelines and procedures are laid down for all
business processes. The internal control system has been designed to ensure that financial
and other records are reliable for preparing financial and other statements and for
maintaining accountability of assets. The Company has robust ERP and other IT Systems
which are an integral part of internal control framework.
The internal audit plan is dynamic and aligned to the business
objectives of the Company and is reviewed by the Audit Committee at regular intervals.
Further, the Audit Committee also monitors the status of management actions emanating from
internal audit reviews.
RISK MANAGEMENT
Management of risk has always been an integral part of the
Company's strategy and straddles its planning, execution and reporting processes and
systems. Your Company continues to focus on a system-based approach to business risk
management.
Keva has a well-defined risk management framework in place and a
robust organizational structure for managing and reporting risks. Your Company has
constituted a Risk Management Committee (RMC) to frame, implement and monitor the risk
management framework for the Company. Your Company has also formulated a Risk Management
Policy to identify risks and mitigate their adverse impact on business and is reviewed by
the RMC from time to time. The major risks identified by the businesses and functions are
systematically addressed through risk mitigation actions on a continuing basis.
Your Company continues to monitor legal and compliance functions
through workflow based compliance software tool LRMS'. LRMS helps to assist in
creating an internal legal risk management monitoring system to assess, monitor, mitigate
and manage legal risks and is equipped with a tracking system along with timely reminders
for compliances. This tool enables compliances to be made and tracked by factories and
offices of your Company across the country.
The business risks and its mitigation has been reported in detail in
the Management Discussion and Analysis Section forming part of this Annual Report.
VIGIL MECHANISM
To create enduring value for all stakeholders and ensure the highest
level of honesty, integrity and ethical behaviour in all its operations, the Company has
implemented Vigil Mechanism in the form of Whistle Blower Policy for Directors and
Employees to report their genuine concerns about misconduct and actual / potential
violations, if any, to the Whistle Officer of the Company.
Pursuant to Section 177 of the Act read with the Rules prescribed
thereunder and Regulation 22 of the Listing Regulations, the Whistle Blower Policy
provides for adequate safeguards against victimisation of persons who use the Vigil
Mechanism and provides for direct access to the Chairman of the Audit Committee.
The Whistle Blower Policy can be accessed on the website of the Company
at https://keva.co.in/investor-updates/#92-178-policies. During the year under review, no
protected disclosure from any Whistle Blower was received by the Whistle Officer.
GOING CONCERN STATUS
During the year under review, no significant or material orders were
passed by the Regulators or Courts or Tribunals which may impact the going concern status
and Company's operations in future.
DISCLOSURE ON SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company has in place, a gender neutral policy on prevention of
sexual harassment at the workplace and a framework for employees to report sexual
harassment cases at the workplace, and its process ensures complete anonymity and
confidentiality of information. An Internal Complaints Committee (ICC) has been
constituted in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder. On an ongoing
basis, Keva's employees and managers are oriented on creating a safe and conducive
work culture. During the year under review, no complaints with allegations of sexual
harassment were reported.
STOCK APPRECIATION RIGHTS SCHEME
In terms of SEBI (Share based Employee) Benefits Regulations, 2021, as
amended from time to time, the Nomination and Remuneration Committee of the Board, inter
alia, administers and monitors the SH Kelkar Stock Appreciation Rights Scheme, 2017 (STAR
Scheme) of your Company.
As on 31 March 2023, Trust held 32,45,768 equity shares of the Company.
Further, given that the fall in price of the shares has rendered the STAR Scheme
unattractive currently, the Company has during the year, not granted SARs to any of its
employees. The Company is in discussion with the designated committee for the STAR Scheme
- Nomination and Remuneration Committee of the Company for variation of the terms of the
STAR Scheme. Through evaluation, Company during the year would be proposing to the
Committee for Variation of the terms of the STAR Scheme which would be in line with SEBI
(Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
The disclosures in compliance with SEBI (Share Based Employee Benefits)
Regulations, 2021 are set out in Annexure C.
CORPORATE SOCIAL RESPONSIBILITY
Your Company's overarching aspiration to create significant and
sustainable societal value, inspired by a vision to sub-serve a larger national purpose
and abide by the strong value of trusteeship, is manifested in its Corporate Social
Responsibility (CSR) initiatives that embrace the disadvantaged sections of society, on a
wider extent in rural India. Your Company has adopted a comprehensive CSR Policy that
defines the framework for your Company's CSR Programme. The CSR Policy can be
accessed on the Company's website at the link: https://keva.co.in/investor-updates/#92-178-policies.
The Company focuses on areas like environmental sustainability,
conservation of energy, child education and empowerment, rural development, equipping and
upgradation of educational infrastructure with the aim of providing an improved and
advanced education system, supporting visually challenged people through perfumery
trainings and employability. It also partners in relief operations in case of a natural
calamity or disaster.
During the year, the Company has spent `1.36 Crore on CSR activities.
The Annual Report on CSR activities is annexed as Annexure D to this report.
CONSERVATION OF ENERGY
Your Company has always considered energy and natural resource
conservation as a focus area. The Company's operations involve low energy
consumption. The manufacturing facilities of the Company are equipped with hi-tech energy
monitoring and conservation systems to monitor usage, minimize wastage and increase
overall efficiency at every stage of power consumption. The Company advocates energy
efficiency in the course of production, and 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 shop floor Use of solid fuel boiler
in plant to reduce energy consumption and thereby benefiting low running costs Use of
gravity flow in place of using water transferring pump for blending, pressured water
supply, toilet _ush water tanks and WTP tank feed water Upgradation of briquette fired
boiler to cater full steam requirement
Recycling of condensate water in distillation & reaction vessels at
chemical plant Raney Nickel and distillation residue are sent for safe disposal at waste
handling site thereby reducing incineration cost Eliminating use of furnace oil at the
site, thereby resulting reduction in carbon emissions
The capital expenditure on energy conservation during the year under
review forms part of the Financials and are mentioned in Business Responsibility and
Sustainability Report forming part of Annual Report.
ENVIRONMENT, HEALTH AND SAFETY
An essential part of being a responsible Company and employer is the
health and safety of 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 9001, ISO 14001 and ISO 45001. Our facilities also have ISO
certification for Quality, Environment 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
power failure 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 convert waste food
into manure. Installation of Reverse Osmosis Plant and Multi Effect Evaporator
Participation of employees in Environment, Health & Safety trainings organised by
National Safety Council Celebration of Road Safety Week, National Safety Week, Fire
Service Week, World Environment Day Annual Health Check-ups are organized for the
employees Our Vashivali unit has achieved National Safety Council 2022 Group B
'Certificate of Appreciation' in the Manufacturing Sector Hazardous waste glass wool,
syringes with needles are safely disposed to authorised agency Imparted 656 man hours of
safety training to the workforce across our units
Sustainability assessment
Installation of an alkali scrubber to scrub the fugitive acidic vapour
generated during Efluent neutralization Using of MEE steam condensate in cooling tower
thereby saving 4 KLD of fresh water consumption per day Half yearly medical check-up for
employees to identify occupational illness cases at preliminary stage and to ensure job
allocation as per the employee's fitness
Your Company is sensitive about the health and safety of its employees
and has been achieving continuous improvement in safety performance through a combination
of systems and processes as well as co-operation and support of all employees.
INNOVATION
Innovation has become one of the most important pillars of Keva. Keva
has been putting innovation and technology to work to make its growth journey more
meaningful. Keva's Creative Centres at Amsterdam, Jakarta, Mumbai, Singapore and
Milan (CFF) are continuously striving for innovative creations through research
activities. Keva also has established a Food Innovation Centre in Mumbai. Your
Company's Innovation and R&D functions work hand in hand for adopting best
practices in innovation of the products and continue to focus on development of superior
product innovations, renovation of the current portfolio for superior product experience,
building analytical excellence and regulatory compliance for the portfolio. Expenditure on
R&D and creative development during the year under review was ` 27.70 Crores on
standalone basis and ` 39.10 Crores on consolidated basis.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The foreign exchange earned in terms of actual inflows during the
financial year 2022-23 was ` 79.45 Crores as against ` 26.99 Crores in financial year
2021-22 on a standalone basis. The foreign exchange outgo in terms of actual outflows
during the financial year 2022-23 was ` 183.50 Crores as against ` 110.39 Crores in
financial year 2021-22 on a standalone basis.
The foreign exchange earned in terms of actual inflows during the
financial year 2022-23 was ` 406.40 Crores as against ` 686.10 Crores in financial year
2021-22 on a consolidated basis. The foreign exchange outgo in terms of actual outflows
during the financial year 2022-23 was ` 413.48 Crores as against ` 682.46 Crores in
financial year 2021-22 on a consolidated basis.
HUMAN RESOURCES
At Keva, we are focused on building an organization which continuously
innovates, nurtures and develops talent and HR processes to deliver on the short term and
long term business strategy. Our strength lies within the diverse cultures, backgrounds,
skills, and experience of our global team.
Keva maintains a collaborative, inclusive, non-discriminative and safe
work culture and provides equal opportunities to all employees. Keva has developed a
blended approach for learning and development that caters not only to each stage of an
employee life-cycle but is also specific to the requirements of a specific function,
business and role demand.
Disclosures with respect to the remuneration of Directors, Key
Managerial Personnel and employees as required under Section 197 of the Act read with Rule
5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
are given in Annexure E to this Report. Details of employee remuneration as required under
provisions of Section 197 of the Act read with Rule 5(2) & 5(3) of Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 also form part of this
Report. However, as per the provisions of Section 136 of the Act the report and the
Audited Standalone and Consolidated Financial Statements along with the Auditors' Report
thereon are being sent to the Members and others entitled thereto, excluding the said
information. If any Member is interested in obtaining a copy thereof, such Member may
write to the Company Secretary in this regard.
INDUSTRIAL RELATIONS
The Company maintained healthy, cordial and harmonious industrial
relations at all levels during the year. The Board acknowledges the contribution of the
workers and the employees towards meeting the objectives of the Company.
INFORMATION TECHNOLOGY
The Company's robust IT infrastructure includes a Centralized ERP
system based on SAP covering business functions across sales, procurement, finance,
inventory management, and logistics; Advanced data analytics and real time data insights
through business intelligence tool QLIK SENSE; Cupid 2.0 and BMango advanced
customer project management applications to digitalize complete product development
lifecycle; DarwinBox an HR platform through which employees across the globe have an
easy access to HR related information viz. policies, newsletters, news _ash, team
information, Performance Development Process, Learning and Development and other HR
processes on real time basis; Cloud CRM to empower the sales team to manage customer
engagements, leads and for overseeing sales projects on real time basis; GOFRUGAL - Point
of sales application with POS billing for retail stores which helps speedy check out for
customers.
ANNUAL RETURN
In accordance with the requirements of Section 92(3) of the Act, the
annual return of the Company in respect of FY 2022-23 has been hosted on the
website of the Company at https://keva.co.in/investor-updates/#92-209-fy-2022-2023.
CONFIRMATIONS
There has been no change in the nature of business and capital of the
Company during the Financial Year 2022-23.
There have been no instances of frauds reported by the Auditors under
Section 143(12) of the Act and the Rules framed thereunder, either to the Company or to
the Central Government.
There have been no material changes and commitments affecting the
financial position of the Company, which have occurred between the period from 31 March
2023 and the date of this Board's Report.
The Company is fully compliant with the applicable Secretarial
Standards (SS) issued by Institute of Company Secretaries of India viz. SS-1 & SS-2 on
Meetings of the Board of Directors and General Meetings respectively.
There is no application made or any proceeding pending under the
Insolvency and Bankruptcy Code, 2016 during the year under review.
There was no instance of one time settlement of loan obtained from the
Banks or Financial Institutions.
CAUTIONARY STATEMENT
Statements in the Annual Report, including those which relate to
Management Discussion and Analysis, describing the Company's objectives, projections,
estimates and expectations, may constitute forward looking statements' within
the meaning of applicable laws and regulations. Although the expectations are based on
reasonable assumptions, the actual results might differ.
ACKNOWLEDGEMENTS
Your directors place on record their appreciation of the continued
support extended during the year by the Company's customers, employees, business
associates, suppliers, bankers, investors and government authorities. Your Directors would
also like to thank all their shareholders for their continued faith in the Company and its
future.
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For and on behalf of the Board of Directors of |
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S H KELKAR AND COMPANY LIMITED |
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CIN: L74999MH1955PLC009593 |
Place: Mumbai |
Ramesh Vaze |
Kedar Vaze |
Date: 30 May 2023 |
Director & Chairman of Board |
Director & Group Chief Executive Officer |
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DIN: 00509751 |
DIN: 00511325 |
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