Kokuyo Camlin Ltd Directors Report.
The Shareholders of Kokuyo Camlin Limited
Your Directors have pleasure in presenting the 72nd Annual Report on the business and operations of the Company together with the Audited Financial Statements for the financial year ended 31st March, 2019.
FINANCIAL RESULTS (STANDALONE):
(R In Lakhs)
|Gross Sales/Income from Business||77949.87||70375.45|
|Less: Discount on Sales||9072.67||6534.65|
|Profit Before Interest and Depreciation||5211.09||4101.57|
|Profit Before Tax||2274.14||1490.49|
|Less: Provision for Tax|
|- Prior Years (Net)||2.15||-|
|Net Profit after Tax||1520.34||982.17|
|Balance carried to Balance Sheet||1520.34||982.17|
|Earnings per share (Basic)||1.52||0.98|
|Earnings per share (Diluted)||1.52||0.98|
OVERVIEW OF COMPANYS FINANCIAL PERFORMANCE:
During the year the Company reported on standalone basis gross sale/ income of R 77949.87 Lakhs as compared to R 70375.45 Lakhs for the last year representing a growth of 10.76% over the corresponding period of the previous year. The profit before tax was higher at R 2274.14 Lakhs against R 1490.49 Lakhs for the corresponding period of the previous year.
Given the growth requirements of the business, your Directors do not recommend any dividend on equity shares for the financial year 2018-2019.
TRANSFER TO RESERVE:
During the year under review, the Company has not transferred any amount towards General Reserve and retained the entire amount of profits in the Profit and Loss Account.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis forms an integral part of this report and is presented separately. It gives details of the overall industry structure, economic developments, performance and state of affairs of your Companys operations and their adequacy, risk management systems and other material developments during the financial year 2018-19.
During the year under review, there was no change in the share capital structure and the paid-up capital of the Company as on 31st March, 2019 was R 1003.04 Lakhs.
CONSOLIDATED FINANCIALS STATEMENTS:
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the consolidated financial statements have been prepared by the Company in accordance with the applicable Accounting Standards. The audited consolidated financial statements together with Auditors Report form part of the Annual Report. Pursuant to Section 136 of the Companies Act, 2013, the financial statements of the Subsidiary, Associate and Joint Venture Companies are kept for inspection by the shareholders at the Registered Office of the Company. The Company shall provide free of cost, the copy of the financial statements of its Subsidiary, Associate and Joint Venture Companies to the shareholders upon their request. The statements are also available on the website of the Company www.kokuyocamlin.com under the Investor Relations section.
At present, the Company does not have any subsidiary. No new subsidiary was incorporated or acquired by the Company during the year under review.
As mentioned in our Report for the previous year 2017-2018, M/s. Camlin International Limited, wholly owned subsidiary of Kokuyo Camlin Limited had made an application on 30th March, 2018 to the Registrar of Companies for striking off the Company by removal of name from the Register of Companies. The Registrar of Companies, Ministry of Corporate Affairs, vide its Notice in Form STK-7 dated 5 December, 2018 has struck off the name of the Company Camlin International Limited from the Register of Companies. Thus, Camlin International Limited has been dissolved and thereby ceased to be the wholly owned subsidiary of our Company.
Further, during the year the Company has transferred 2,74,050 equity shares held in its Associate Company M/s. Colart Camlin Canvas Pvt. Ltd. ("Colart") whereby the stake held by the Company in Colart has fallen below 20% and thus, Colart is no longer the Associate Company of our Company.
Pursuant to the provisions of Section 129(3) of Companies Act, 2013, a statement containing salient features of the financial statements of Subsidiary/Associate Company in Form AOC-1 is attached to the financial statements of the Company.
In accordance with the section 136 of the Companies Act, 2013, the Audited Financial Statements and related information of the Company are available on the website HREF="http://www.kokuyocamlin.com/">www.kokuyocamlin.com .
During the year under review, your Company has not accepted any deposits. There are no unclaimed deposits as on date.
MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY:
There have been no Material changes and Commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company, to which the financial statement relate (i.e. 31st March, 2019) and the date of the report. There has been no change in the nature of business of the Company.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The Company has not granted any Loans, Guarantees or Investments during the financial year ended 31st March, 2019.
RELATED PARTY TRANSACTIONS:
All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their review/approval on a quarterly basis.
All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, and Key Managerial Personnel which may have a potential conflict with the interest of the Company at large. Accordingly, the disclosure of Related Party Transactions as required under Section 134 (3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable to your Company.
The details of transaction with related parties are provided in the accompanying financial statements. The policy on Related Party Transactions as amended and as approved by the Board is uploaded on the Companys website at hhtps://www. kokuyocamlin.com/company-policies.html
Ms Aditi D. Dighe, daughter of Mr Dilip D. Dandekar, Chairman & Executive Director of the Company, is an employee of the Company presently receiving monthly remuneration not exceeding two and a half Lakhs rupees. She is entitled to an annual increment as given to other regular employees of the Company and her remuneration after such increment would exceed the prescribed limit of R 30.00 Lakhs per annum (i.e. R 2.50 Lakhs per month) The Board of Directors on the recommendation of Remuneration and Nomination Committee at their meeting held on 8th May, 2019 has revised the monthly remuneration effective from 1 April, 2019 of Ms Aditi D. Dighe exceeding the limit of R 2.50 Lakhs per month subject to approval of members in the ensuing General Meeting by way of passing an Ordinary resolution. The details of remuneration payable to Ms Aditi Dighe is given in the Explanatory Statement forming part of the Notice.
CORPORATE GOVERNANCE REPORT:
Corporate Governance is all about ethical conduct, integrity and accountability. Good Corporate Governance involves a commitment of the Company to run the business in a legal, ethical and transparent manner and runs from the top and permeates throughout the organisation. It is a key element improving the economic efficiency of Organisation.
As per Listing Regulations, a separate section on Corporate Governance forms part of this report. A Certificate from M/s. JHR & Associates, Secretarial Auditors confirming compliance of Corporate Governance forms part of this Report.
Certificate of the CEO/CFO, confirming the correctness of the financial statements, compliance with the Companys Code of Conduct and the Audit Committee in terms of Regulation 17 of the Listing Regulations is attached in the Corporate Governance report and forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In terms of the provisions of the Companies Act, 201 3, Mr Nobuchika Doi and Mr Takeo Iguchi, Directors of the Company, retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment, you are requested to appoint them.
During the year, the Company had appointed Mr Satish Veerappa as a Key Managerial Person (KMP) designated as Chief Executive Officer effective from 9th May, 2018. The Board of Directors at its meeting held on 26th October, 2018 appointed Mr Satish Veerappa as Manager designated as Chief Executive Officer (CEO) of the Company for the period of 3 years effective from 1st November, 2018 to 31st October, 2021. In lieu of his appointment as Manager, the Board of Directors re-designated Mr Nobuchika Doi from Managing Director to Executive Director for the remaining period of his tenure of two (2) years effective from 1st November, 2018 to 31st October, 2020.
Further, the Board of Directors at its meeting held on 24th January, 2019 approved the re-appointment of Mr Dilip D. Dandekar as Chairman & Executive Director and Mr Shriram S. Dandekar as Vice-Chairman & Executive Director, whose term expired on 31st January 2019, for the further period of one (1) year with effect from 1st February, 2019. In the said meeting, the Board also approved the re-appointment of the Independent Directors namely, Mr Ramanathan Sriram, Mr Shishir B. Desai, Mr Hisamaro Garugu, Mr Devendra Kumar Arora and Mr Sriram Venkataraman, whose term was expiring on 31st March, 2019, for the second term of five consecutive years effective from 1st April, 2019 to 31st March, 2024.
All the aforesaid appointments of Manager and Directors and redesignation of Mr Nobuchika Doi were approved by the members by passing special resolutions through Postal Ballot on 20th March, 2019.
The profile of Directors seeking re- appointment forms integral part of the Notice.
None of the Directors are disqualified from being appointed as Directors as specified in section 164 of Companies Act, 2013.
The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder.
1. Mr Chetan Badal - Chief Financial Officer
2. Mr Ravindra Damle - Vice President (Corporate) & Company Secretary
3. Mr Satish Veerappa - Manager designated as Chief Executive Officer (with effect from 1 November, 2018)
The Disclosure required under Section 197(12) of the Companies Act, 201 3, read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is annexed as "Annexure - C" forming an integral part of this report.
MEETINGS OF BOARD:
During the financial year 2018-19 four Board Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
In compliance with the requirements of Listing Regulations, the Company has put in place a familiarisation program for the Independent Directors to familiarise them with their role, rights and responsibilities as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarisation programme are explained in the Corporate Governance Report. The same is also available on the website of the company and can be accessed by web link HREF="https://www.kokuyocamlin.com/company-policies">https://www.kokuyocamlin.com/company-policies .
PERFORMANCE EVALUATION OF THE DIRECTORS:
Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board has carried out an annual evaluation of its own performance, its Committees and individual Directors.
Further, the Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed the performance evaluation of the Board Members as stipulated under the Listing Regulations.
DECLARATION OF INDEPENDENCE:
Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of the Companies Act, 2013 read with the Schedules and Rules issued thereunder as well as Regulation 16(1) (b) of Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force)
The Board has, on the recommendation of the Remuneration and Nomination Committee framed a policy for selection, appointment and remuneration of Directors and KMPs. During the year under review, the Company has revised the Remuneration and Nomination Policy in accordance with the amendments to Section 178 of the Companies Act, 2013 and the Listing Regulations. The Remuneration Policy is stated in the Corporate Governance Report and is also available on the website of the Company at HREF="https://www.kokuyocamlin.com/company-policies.html">https://www.kokuyocamlin.com/company-policies.html .
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 134(3) (c) of the Companies Act, 2013, your Directors to the best of their knowledge and belief and according to the information and explanations obtained by them, hereby confirm:
a) That in the preparation of the annual accounts for the financial year ended 31st March, 2019, the applicable accounting standards had been followed along with proper explanation relating to material departures;
b) That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are 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 ended 31st March, 2019 and of the Profit of the Company for the year ended on that date.
c) That the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
d) That the Directors had prepared the annual accounts on a going concern basis; and
e) That the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.
f) That the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
AUDITORS & AUDITORS REPORT: STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, M/s. B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/ W100022) were appointed as the Statutory Auditors of the Company for a term of five years, to hold office from the conclusion of 70th Annual General Meeting held on 28 June, 2017 till the conclusion of 75th Annual General Meeting of the Company. They have confirmed that they are not disqualified from continuing as the Auditors of the Company.
The observation of the Auditors in their report read with relevant notes to the accounts are self-explanatory and therefore do not require further explanations.
The Auditors Report to the members on the Standalone and Consolidated Financial Statements of the Company for the year ended 31st March, 2019 does not contain any qualifications, reservations or adverse remarks.
There have been no instances of fraud reported by the Statutory Auditors under Section 1 43 (1 2) of the Companies Act, 201 3 and the Rules framed thereunder either to the Company or to the Central Government.
M/s. JHR & Associates a firm of Company Secretaries were appointed as Secretarial Auditor for the financial year 201819 pursuant to Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them in the prescribed form MR-3 is attached as "Annexure - E" and forms part of this report.
There are no qualifications or observations or adverse remarks or disclaimer of the Secretarial Auditors in the Secretarial Audit/ Compliance Report issued by them for the financial year 2018-19.
RECONCILIATION OF SHARE CAPITAL AUDIT:
As directed by the Securities and Exchange Board of India (SEBI), Reconciliation of Share Capital Audit has been carried out at the specified period, by a Practicing Company Secretary.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Companies Act, 2013 re-emphasises the need for an effective Internal Financial Control System (IFC) in the Company which should be adequate and shall operate effectively. To ensure effective Internal Financial Controls the Company has its own process driven framework for the year ended 31st March, 2019.
The Board is of the opinion that the Company has sound IFC commensurate with the nature and size of its business operations; wherein controls are in place and operating effectively and no material weaknesses exist. The Company has a process in place to continuously monitor the existing controls and identify gaps, if any, and implement new and /or improved controls wherever the effect of such gaps would have a material effect on the Companys operation.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
The Company had transferred a sum of R 2.54 Lakhs during the financial year to the Investor Education and Protection Fund established by the Central Government (IEPF). The said amount represents Unclaimed Dividend for the year 2010-2011 with the Company for a period of 7 years from their respective due dates of payment.
TRANSFER OF SHARES TO IEPF
As required under Section 124 of the Companies Act, 2013, 1,96,995 Equity shares, in respect of which dividend has not been claimed by the members for Seven (7) consecutive years have been transferred by the Company to IEPF during the financial year 2018-19. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented a policy on prevention, prohibition and redressal of sexual harassment at the workplace. All women, permanent, temporary or contractual including those of service providers are covered under the policy. An Internal Sexual Harassment Committee comprising management staff has been set up at office and factory locations, which includes three women to redress complaints relating to sexual harassment. The Committee also includes an outside woman representative from an NGO. During the year under review no case was reported under the said policy.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant or material orders passed by any regulator, tribunal or court that would impact the going concern status of the Company and its future operations
CORPORATE SOCIAL RESPONSIBILITY:
In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules 2014 as amended and in accordance with the CSR Policy the Company has spent above 2% of the average net profits of the Company during the three immediately preceding financial years. The details are provided in the Annual Report on CSR activities has been appended as "Annexure - D" which forms an integral part of this report. The CSR Policy of the Company is also available on the website of the Company HREF="https://www.kokuyocamlin.com/pdf/">https://www.kokuyocamlin.com/pdf/ CSR-Policy.pdf
Key Initiatives which the Company engaged are:-
Educate the Girl Child
Your Company got associated with K.C. Mahindra Foundation Trust A/c - Nanhi Kali one of the largest community programs imparting education to under privileged girls across India. This partnership provided support to girl children through academic material and social backing by identifying critical centers of education through Nanhi kali project.
Swachh Bharat Kosh
Your Company also contributed to the Swach Bharat Kosh set-up by the Central Government for promotion of sanitation through donation to the above said fund
Setting up a Mini Science Center
Your Company has contributed for setting up a Mini Science Center at three Zilla Parishad Schools near our factory located at Patalganga.
In addition to the above the Company has been implementing other social activities which has not been considered for arriving at the spends as per the CSR rules.
CODE OF ETHICS AND VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
The Company has adopted code of ethics and business conduct which lays down principles and standards that should govern the actions of the Company and employees. The Company has a vigil mechanism called "Whistle Blower Policy" with a view to provide a mechanism for employees of the Company to raise concerns of any violations of any legal or regulatory requirement, incorrect or misrepresentation of any financial statements and reports etc. The Company is committed to adhere to the highest standard of ethical, moral and legal conduct of business operations.
The Company has taken steps to establish Vigil Mechanism for Directors and Employees of the Company. The details of the Policy are posted on the website of the Company at www. kokuyocamlin.com. During the year under review, the policy was suitably amended to include reporting of instances relating to leak of Unpublished Price Sensitive Information.
PREVENTION OF INSIDER TRADING:
The Company has also adopted a code of conduct for prevention of insider trading. All the Directors, senior management employees and other employees who have access to the unpublished price sensitive information of the Company are governed by this code. During the year under report, there has been due compliance with the said code of conduct for prevention of insider trading based on the SEBI (Prohibition of Insider Trading) Regulations 2015. The Board of Directors has adopted the amended Code of Conduct pursuant to the SEBI (Prohibition of Insider Trading) (Amendment) Regulations, 2018 which is effective from 1st April, 2019.
The Companys plant, property, equipments and stocks are adequately insured against major risks. The Company also has appropriate liability insurance covers particularly for product liability. The Company has also taken Directors and Officers Liability Policy to provide coverage against the liabilities arising on them.
We operate in a dynamic business scenario that gives rise to external and internal risk factors. We have designed an integrated risk management approach called the ERM framework for risk identification, assessment and reporting. To identify key risks to our business model, during the course of the year we have conducted a risk management exercise that assisted the senior management in identification of key risks and selection of most suited risk management strategies to manage principal risks effectively. The Board has approved the Enterprise Risk Management Policy as part of the ERM framework that covers key business functions, processes and units. As required by the ERM Policy the company initiates risk identification and control testing exercise to provide briefing and reporting to the Board. The ERM policy is implemented through the Risk Management Committee and various department heads who take the risk ownership and monitor the risks on a periodical basis.
The ERM Framework will enable achievement of strategic objectives by identifying, analysing, assessing, mitigating, monitoring and governing any risk or potential threat to these company objectives.
Systematic and proactive identification of risks and mitigation thereof will enable effective and quick decision making and will boost the performance of the organisation. The ERM framework will act as a decision enabler which not only seeks to minimise the impact of risks but also enable effective resource allocation based on risk ranking and risk appetite. Strategic decisions will be taken after careful consideration of risks based on secondary risks and residual risks.
There are no risks which in the opinion of the Board threatens the existence of the Company. However, some of the risks which may pose challenges are set out in the Management Discussion and Analysis Report which forms part of this Annual Report.
DISCLOSURE ON CONFIRMATION ON THE SECRETARIAL STANDARDS:
Your Directors confirm that the Secretarial Standards issued by the Institute of Company Secretaries of India have been duly complied with.
GREEN INTIATIVE IN CORPORATE GOVERNANCE:
In support of the green initiative of the Ministry of Corporate Affairs, the Company has also decided to send the annual report through email to those shareholders who have registered their email id with the depository participant /Companys registrar and share transfer agent, in case a shareholder wishes to receive a printed copy he/she may please send a request to the Company which will send the annual report to the shareholder.
The Company is providing e voting facility to all members to enable them to cast their votes electronically on all resolutions set forth in the Notice. This is pursuant to section 108 of the Companies
Act, 2013 and Rule 20 of the Companies (Management and Administration) Rules, 2014. The instructions for e-voting are provided in the Notice.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as "Annexure - A".
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT- 9 is placed on the website of the Company at www. kokuyocamlin.com under the Investor Relations Section and is set out as "Annexure - B" to the report.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of Companies Act, 2013 the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.
Your Directors express their gratitude to the members, bankers, customers, financial institutions and other business constituents for their continued faith, assistance and support extended to the Company. Your Directors also sincerely appreciate the high degree of professionalism, commitment and dedication displayed by employees at all levels thereby contributing largely to the growth and success of the Company.
Your Directors also wish to place on record their appreciation for the support and guidance provided by its parent Company Kokuyo Co., Ltd. Japan.
|For & on behalf of the Board|
|Place : Mumbai||Dilip D. Dandekar|
|Dated: 8th May, 2019||Chairman & Executive Director|