S H Kelkar & Company Ltd Directors Report.

Dear Shareholders,

Your Directors take pleasure in presenting their 62nd 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 March 31, 2018.


( in Crores)
Standalone Consolidated
Particulars 2017-18 2016-17 Growth % 2017-18 2016-17 Growth %
Revenue from operations (excl excise duty/GST) 680.79 614.46 10.80 1019.27 975.04 4.53
Other operating income 1.40 0.89 57.30 5.84 5.47 6.76
EBITDA before royalty expense and exceptional items 136.01 130.41 4.29 183.82 177.38 3.63
Royalty Expense 19.16 18.02 6.26 - - -
Finance Costs 3.16 2.40 31.67 3.97 5.16 (23.06)
Depreciation 10.53 6.81 54.63 23.84 19.44 22.63
Profit before Tax (PBT) before exceptional items 103.16 103.18 (0.02) 156.01 152.78 2.11
Profit before Tax (PBT) after exceptional items 103.16 103.18 (0.02) 143.16 152.78 (6.30)
Taxation 34.20 28.87 18.46 50.58 47.97 5.46
Profit after Tax (PAT) 68.96 74.31 (7.20) 92.58 104.82 (11.68)
Share of profit of equity investment in JV - - - 1.61 - 100.00
Total Profit after Tax (PAT) 68.96 74.31 (7.20) 94.19 104.82 (10.14)

Business Review:

We unveil the tastes and scents that suit you best, and that you love most. We bring them to you every day, everywhere in every way. Stirring emotions, awakening memories, enhancing your senses, expanding your taste and scent experiences, enriching your world, we bring you a myriad of solutions to enjoy the essence and express yourself. We are Keva (consolidated SHK) - a leading creator of _avours and fragrances that are used in the food, beverage, personal care or household product industries. Kevas _avour and fragrance compounds combine a number of ingredients to produce proprietary formulae created by its _avorists and perfumers. Utilizing capabilities in consumer insight, research and product development and creative expertise, Keva partners with its customers to provide innovative and differentiated product offerings that drive consumer preference. Keva believes that this collaborative approach will generate market share gains for its customers.

Keva is committed to winning in emerging markets and believes that significant future growth potential for the _avours and fragrances industry, and for its business, exists in the emerging markets.

The year 2017-18 ended on a healthy note backed by strong performance in the second half of the year. Despite the high level of raw material supply disruptions across the globe, your Company reached a major milestone in its journey by crossing 1,000 crore of revenues in 2017-18. The Companys inventory management strategy enabled it to sustain margins and maintain market share across customers.

On consolidated basis, the overall revenue of Keva recorded a growth of 4.5% vis a vis last year. Operating EBITDA after adjusting one-o_ expenses stood at 188.8 crore in 2017-18 as against 177.4 crore in 2016-17, up 3.6%. The total domestic business recorded a growth of 7.3% while the international business had a subdued performance with a decline of 1.02%. The segmentation of fragrances business to _avours business altered from 87% in 2017 to 89% in 2018. The domestic and international business ratio stood at 68:32 as against 67:33 in 2016-17.

Fragrance Division reported a robust performance during the FY 2017-18 with an operating profit of 140 crore - higher by 13% over previous year. With a healthy growth in its existing markets, the Fragrance Division reported year on year growth of 8% in the domestic markets, while overseas market grew by 3%.

Flavours Division reported a subdued performance in FY 2017-18. While domestic revenues were lower by 1%, overseas segment was lower by 18%. Volatile raw material prices and pricing pressure impacted the performance in the domestic market. In addition, geo-political and economic scenario, especially in the Middle East resulted in subdued overseas performance. Operating profit of Flavours Division was at 21 crore with margins at 18.7%.

The Company incurred a one-o_ expense of 12.9 crore during the year on account of operational reorganization of PFW Aroma Ingredients BV in the Netherlands. EBITDA margin and Net Profit margin, excluding this one-o_ expense, stood at 18% and 10% respectively despite investments made for future growth of about 5 Crore as well as sharp increase in raw material prices. The consolidated ROCE was 20%.

On a standalone basis, the Company achieved a topline growth of 11% due to growth in domestic fragrance business despite the headwinds faced by the business due to GST implementation. On standalone basis the Company has achieved Net Profit of 69 Crore.


A detailed analysis of your Companys performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.


The Company believes that profitability must go hand in hand with a sense of responsibility towards all stakeholders. The Company endeavours towards creating long-term value for all its stakeholders while focusing on the core principles of accountability, transparency, integrity, social responsibility and regulatory compliances. A strong foundation in terms of an eminent, accomplished and a diverse Board providing mentorship and oversight, an effective leadership team setting the tone at the top, competent professionals across the organisation to implement and execute the governance goals, best systems, well defined process and modern technology, have made good governance a way of life.

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company confirming of corporate governance requirements as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "Listing Regulations") form an integral part of this Annual Report.


A detailed information on the initiatives of the Company as enunciated in the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 is provided in the Business Responsibility Report, a copy of which will be available on the Companys website www.keva.co.in. For Business Responsibility Report as stipulated under Regulation 34 of the Listing Regulations, kindly refer to Business Responsibility Report section which forms part of this Annual Report.


Your Directors are pleased to recommend a final dividend of 1.75 per equity share of face value of 10/- each to be appropriated from the profits of the Company for the financial year 2017-18, subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM").

The list of unpaid dividend declared upto the financial year 2016-17 is available on Companys website www.keva.co.in. Shareholders are requested to check the said list and if any dividend due to them remains unpaid in the said list, can approach the Company for release of their unpaid dividend.


As on March 31, 2018, the Company had subsidiaries in India, United Kingdom, Netherlands, Singapore, Italy and Indonesia as mentioned hereunder: Keva Fragrances Pvt. Ltd.

Keva Flavours Pvt. Ltd. Saiba Industries Pvt. Ltd.

Rasiklal Hemani Agencies Pvt. Ltd. Keva Chemicals Pvt. Ltd.

Creative Flavours & Fragrances S.p.A., Italy Keva UK Ltd., United Kingdom Keva Fragrance Industries Pte. Ltd., Singapore

V N Creative Chemicals Pvt. Ltd. (step-down subsidiary) Tanishka Fragrance Encapsulation Technologies LLP (step-down subsidiary) PFW Aroma Ingredients B.V., Netherlands (step-down subsidiary) PT SHKKEVA Indonesia (Indonesia) (step-down subsidiary)

A statement containing the salient features of the financial statement of our subsidiaries in the prescribed format AOC-1 is appended as Annexure A to this Report.

Financial and operational performance of the subsidiaries is given hereunder:

Keva Fragrances Private Limited:

Keva Fragrances Private Limited (formerly K V Arochem Private Limited) is involved in the business of manufacture and exports of fragrances, _avours and aroma ingredients. The company registered a total revenue of 316.11 Crores in financial year 2017-18 as against 291.05 Crores in financial year 2016-17 and loss of 14.98 Crores in financial year 2017-18 as against loss of 18.40 Crores in financial year 2016-17.

Keva Flavours Private Limited:

Keva Flavours Private Limited develops _avours that underpin food and beverage brands in India. The company registered a total revenue of 65.17 crores in financial year 2017-18 as against 75.13 crores and a loss of 1.43 crores as against a profit of 6.06 crores in financial year 2016-17.

Saiba Industries Private Limited:

Natural Essential oils & Natural Extracts have become a USP via Aromatherapeutic additive. Saiba Industries Private Limited is involved in the business of manufacture and sale of plant extracts. During the year under review, the company registered an operating revenue of 5.07 Crores in the financial year 2017-18 as against 4.99 Crores in financial year 2016-17 and profit after tax of 1.57 Crores in the financial year 2017-18 as against 0.97 Crores in financial year 2016-17.

Rasiklal Hemani Agencies Pvt. Ltd.:

Rasiklal Hemani Agencies Pvt. Ltd. was acquired by the Company on April 02, 2016 to strengthen our base in the northern region and reach closer to the customers. During the year under review, the company registered an operating revenue of 5.14 Crores in the financial year 2017-18 as against 7.21 Crores in financial year 2016-17 and profit after tax of 4.23 Crores in the financial year 2017-18 as against 5.34 Crores in financial year 2016-17.

PFW Aroma Ingredients B.V.:

PFW Aroma Ingredients B.V. is involved in the business of manufacture and sale of aroma ingredients. During the year under review, the company registered an operating revenue of 174.50 Crores as against 151.17 Crores during the previous year and loss of 13.20 Crores as against loss of 0.45 Crores during the previous year.

Keva UK Limited:

Keva UK Limited is authorised by its constitutional documents to manage the investment of our Company in the Netherlands - PFW Aroma Ingredients B.V. The company did not carry any business during the year. During the year under review, the company registered no revenue as against 0.58 Crores during the previous year and loss after tax of 0.27 Crores as against profit after tax of 0.50 Crores during the previous year.

Keva Fragrance Industries Pte. Ltd.:

Keva Fragrance Industries Pte. Ltd. is involved in the business of providing sales and marketing assistance to us in South East Asia. In order to spearhead our market access and growth plans of South East Asia, we have formed this Company through which our operating subsidiary has been created in Indonesia. During the year under review, the company registered a revenue of 36.05 Crores as against 3.45 Crores during the previous year and a profit of

1.04 Crores as against a loss of 0.52 Crores during the previous year.

PT SHKKeva Indonesia:

PT SHKKeva Indonesia is involved in the business of trading and distribution of perfumery compounds. During the year under review, the company registered an operating revenue of 6.47 Crores as against 11.44 Crores during the previous year and profit of 0.22 Crores as against loss of 0.45 Crores during the previous year.

Keva Chemicals Private Limited:

Keva Chemicals Private Limited is involved in the business of aroma ingredients etc. During the year under review, the company has not earned any income from operations as no business activity was undertaken by the Company. The Net Loss incurred by the company during the financial year ended March 31, 2018 amounted to 0.42 crores.

VN Creative Chemicals Private Limited:

VN Creative Chemicals Private Limited was acquired for setting up of India Tonalid manufacturing facility at Mahad. During the year under review, the company has not earned any income from operations as no business activity was undertaken by the company. The net loss incurred by the company during the financial year ended March 31, 2018 amounted to 0.58 crores.

Tanishka Fragrance Encapsulation Technologies LLP:

Company acquired Tanishka Fragrance Encapsulation Technologies LLP on April 24, 2017. During the year under review, no business activity was undertaken by the LLP.


The consolidated financial statements of your Company for the financial year 2017-18, are prepared in compliance with applicable provisions of the Companies Act, 2013, 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 companies, as approved by their respective Board of Directors. The Financial Statements as stated above are also available on the website of the Company at www. keva.co.in.


Over the years, your Company has developed extensive and successful experience performing acquisitions and is working towards integrating the acquisitions and exploiting the many commercial and operational synergies they provide, in order to achieve maximum benefit of continued improvement to profit margins and competitive capabilities.

Fragrance delivery via encapsulation is a win-win platform because it provides a great opportunity across all categories. Accordingly, on April 24, 2017, the Company, through Keva Chemicals Pvt. Ltd. ("KCPL"), step-down subsidiary of the Company, has acquired Fragrance Encapsulation Technology from Tanishka Fragrance Encapsulation Technologies LLP ("TFET LLP"). As a part of the transaction, KCPL has also contributed to the capital of TFET LLP on the said date and thus, has become a majority capital contributing partner in TFET LLP. The unique technology has enhanced Kevas technological infrastructure and would enable the Company to offer differentiated fragrance products especially in fabric care which is a fast-growing area in which Kevas unique capabilities would give it a solid competitive edge.

The Company, through its subsidiary Keva Fragrances Pvt. Ltd., has acquired VN Creative Chemicals Pvt. Ltd. ("VNCC") on September 29, 2017. VNCC is into the business of aromatic chemicals and owns a manufacturing facility in Mahad, Maharashtra. The investment would enable the Company to consolidate/ combine production activities for attaining maximal operational efficiency and thus, would contribute to building up Kevas competitiveness and improve its profits and margins.

The Company has entered into an agreement to acquire Creative Flavours and Fragrances S.p.A. ("CFF") alongwith its subsidiaries on January 15, 2018. Incorporated in year 2000, CFF has presence throughout Europe and enjoys a leading position in the Italian market. It has a state-of-the-art manufacturing facility and R&D lab in Milan. The acquisition coupled with the recent launch of _ne fragrances studio in Amsterdam is in line with Kevas growth strategy to strengthen its product portfolio and build a business with truly international profile. It is an important milestone in Kevas global growth journey.

The Company through its subsidiary Keva Fragrance Industries Pte. Ltd., has entered into an agreement to acquire 90% stake in Anhui Ruibang Aroma Co. Ltd. on May 25, 2018. Headquartered in Fuyang, Anhui is a leading aroma ingredient Company in China. The acquisition will give Keva access to alternate tonalid manufacturing facility, thereby ensuring no supply disruptions to customers. It will also enable Keva consolidate its market position for tonalid.

The acquisitions are expected to provide better opportunities to leverage in the future.


There has been no change in the capital structure during the year under review. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.


Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.


Particulars of loans given, investments made, guarantees given and securities provided as covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.


Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure B to this Report.


In the forthcoming AGM, Mrs. Prabha Vaze will retire by rotation and will be considered for re-appointment because of her eligibility. Mr. Nitin Potdar and Mr. Amit Dixit stepped down as Independent Director and Non-Executive Director respectively with effect from February 28, 2018 and May 25, 2018. Mr. Deepak Raj Bindra and Mr. Shrikant Oka were appointed as Additional Non-Executive Director and Additional Independent Director respectively, at the Board Meeting held on May 25, 2018, with effect from May 25, 2018. As per the provisions of Section 160 of the Companies Act, 2013, your Company has received a notice from a member specifying their intention to propose the appointment of Mr. Deepak Raj Bindra and Mr. Shrikant Oka as Directors in the forthcoming AGM.

Appropriate resolutions for the appointment of the Directors are being placed for your approval at the ensuing AGM. Your Directors recommend the appointment of the aforesaid Directors by the Members at the ensuing AGM.

Neither the Managing Director nor the Whole-time Director of the Company receives 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 Companies Act, 2013. The Independent Directors have been familiarised with the Company, their roles, rights and responsibilities in the Company etc. The details of the Familiarization Programme 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 Companies Act, 2013. This has been noted by the Board of Directors.


During the year, 7 (seven) Board Meetings were convened and held on 12.05.2017, 10.08.2017, 12.09.2017, 13.11.2017, 07.12.2017

(adjourned to 13.12.2017), 16.01.2018 and 28.02.2018. 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 Companies Act, 2013 and Listing Regulations.


The Independent Directors of the Company meet without the presence of the Managing Director or Executive Director or other Non-Independent 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 February 28, 2018.


The Company has constituted various Board level committees in accordance with the requirements of Companies Act, 2013. The Board has the following committees as under:

Audit Committee

Nomination & Remuneration Committee Corporate Social Responsibility Committee Stakeholders Relationship 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.


Pursuant to the provisions of the Companies Act, 2013 read with Rules issued thereunder and the Corporate Governance requirements as prescribed by Listing Regulations, the Board has carried out an annual evaluation of its own performance and that of its Committees and individual Directors.

TheperformanceoftheBoardandindividualDirectorswasevaluated 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.


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 and provide necessary report to the Board for further evaluation of the Board; c) to recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

The guiding principles of the policy are to ensure that:

The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

Relationship of remuneration to performance is clear and meets appropriate performance benchmarks and

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.

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 Companys 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.

It is hereby afirmed that the remuneration paid is as per the Nomination and Remuneration Policy of the Company.


During the year under review, Mr. Tapas Majumdar ceased to be Executive Vice President and CFO of the Company. He was relieved from his role on May 31, 2017. Mr. Ratul Bhaduri was appointed as Executive Vice President and CFO with effect from November 15, 2017. The Key Managerial Personnel in the Company as per Section 2(51) and 203 of the Companies Act, 2013 as on March 31, 2018 are as follows: Mr. Ramesh Vaze - Managing Director Mr. Kedar Vaze - Whole Time Director and Chief Executive Officer and Mr. Ratul Bhaduri - Executive Vice President and Chief Financial Officer Mrs. Deepti Chandratre - Company Secretary & DGM – Legal


In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that: a) In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating 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 or loss 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 this 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 system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.


Your Companys Auditors, B S R & Co. LLP [holding Registration No. 101248W/W-100022 with the Institute of Chartered Accountants of India (ICAI)] were appointed as the Statutory Auditors at the AGM of the Company held on September 18, 2014 for a term of five consecutive years. The Statutory Auditors have confirmed their eligibility to the effect that their appointment is within the prescribed limits under the Companies Act, 2013 and that they are not disqualified for appointment.

The Auditors Report on the Annual Accounts of the Company forms part of the Annual Report and when read with notes on financial statements, is self- explanatory, and hence, does not call for any further comments under Section 134 of the Companies Act, 2013. The Auditors Report does not contain any qualification, reservation or adverse remark.


In terms of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, M/s. Kishore Bhatia & Associates, Cost Accountants, have been appointed as the Cost Auditors of the company for financial year 2018-19.


Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. Mehta & Mehta, Practising Company Secretaries, as its Secretarial Auditor to undertake the secretarial audit for the financial year 2017-18. The Secretarial Audit Report for the financial year ended March 31, 2018 is annexed herewith as Annexure C to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.


Your Company believes that internal control is a prerequisite of the principle of governance. The Company has a well-established internal control framework, which is designed to continuously assess the adequacy, effectiveness and efficiency of financial and operational controls. The management is committed to ensure an effective internal control environment, commensurate with the size and complexity of the business, which provides an assurance on compliance with internal policies, applicable laws, regulations and protection of resources and assets. Robust and continuous internal monitoring mechanisms ensure timely identification of risks and issues. The management, Statutory and Internal Auditors undertake rigorous testing of the control environment of the Company to identify areas, where business process controls are ine_ective or may need enhancement.

A summary of the Internal Audit Reports containing significant findings by the Internal Auditor alongwith follow-up actions thereafter is placed before the Audit Committee periodically for review. The Audit Committee reviews the comprehensiveness and effectiveness of the report and provides valuable suggestions and observations from time to time.


The Company has developed an integrated Enterprise Risk Management Framework to identify, monitor, mitigate and report key risks that impact its ability to meet the strategic objectives. There is an overarching Risk Management Policy in place that was reviewed and approved by the Board. The Board is responsible for the overall process of risk management in the organisation.

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 alongwith timely reminders for compliances. This tool enables compliances to be made and tracked by factories and offices of your Company across the country.


The Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. Accordingly, your Company has implemented Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the Listing Regulations through the Whistle Blower Policy and Fraud Risk Management Policy. The policies provides for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

The policies may be accessed on the website of the Company at www.keva.co.in. During the year under review, no protected disclosure from any Whistle Blower was received by the designated officer.


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 Companys operations in future.


At Keva, we are committed to provide a healthy work environment that is free of discrimination and unlawful harassment and that enables employees to work without fear of prejudice, gender bias and sexual harassment. The Company has always endeavoured for providing a better and safe environment free of sexual harassment at all its work places. Keeping with this commitment, the Company has adopted a policy on Prevention of Sexual Harassment at Workplace and constituted Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Policy is gender neutral. All employees (permanent, contractual, temporary, trainees) are covered under this Policy.

During the year, no complaints with allegations of sexual harassment were reported.


The Members, on November 01, 2017, through Postal Ballot exercise (results of which were declared on November 03, 2017), had approved the SH Kelkar Stock Appreciation Rights Scheme, 2017 (‘STAR), for the welfare of its employees and those of its subsidiaries. Each STAR is represented by one equity share of the Company. The eligible employees are entitled to receive in cash the excess of the maturity price over the grant price in respect of such STARs subject to fulfillment of certain conditions and applicability of income tax. The STAR Scheme involves secondary market acquisition of the equity shares of your Company by an Independent Trust set up by the Company for the implementation of the STAR Scheme. Your Company lends monies to the Trust for making secondary acquisition of equity shares, subject to statutory ceilings. The Trust has purchased 10,26,403 equity shares of the Company as on March 31, 2018 representing 0.71% of paid up capital of the Company, however, no STARs were allotted during the year 2017-18.

The disclosures in compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, and Section 62 1(b) read with Rule 12(9) of the Companies (Share Capital & Debentures) Rules, 2014 are set out in Annexure D.


Your Company believes in inclusive growth to facilitate creation of a value-based and empowered society through continuous and purposeful engagement with society around.

Towards this end, your Company adopted a comprehensive CSR Policy that defines the framework for your Companys CSR Programme. The CSR Policy may be accessed on the Companys website at the link: www.keva.co.in.

The Company has focuses on areas like environmental sustainability, conservation of energy, child education and empowerment, equipping and upgradation of educational infrastructure set up with an aim to provide improved and advanced education system, support visually challenged people through perfumery trainings and employability and rural development. It also partners in relief operations in rural areas in case of natural calamity or disaster.

The Company also undertakes other need based initiatives in compliance with Schedule VII to the Companies Act, 2013. During the year, the Company has spent 1.79 Crore on CSR activities.

The Annual Report on CSR activities is annexed herewith marked as Annexure E.


The Company continued its efforts to improve energy usage efficiency and increase contributions from renewable sources of energy. Some of the measures adopted across the Company for energy conservation are as under:

Commissioned solar power generation units at Mulund and Vashivali Units.

Replacement of conventional Gang Operated Device with Indoor Circuit Breaker at Vashivali Unit which has helped in minimizing power failures in rainy season thereby reducing usage of diesel generators.

Installation of automatic power factor controller panel at Mulund Unit

Successful commissioning of ‘PNG fuel in canteens instead of LPG.

Extension of condensate and _ush recovery system to MPP Plant in Vapi Unit which has resulted in saving of 51.8 KL of fuel achieved resulting in cost savings of 16 lacs for the year.

Replacement of high capacity motors in e_uent treatment plant at Vapi Unit with lower rating motors which has resulted in reduction in power consumption annually by 30,000 kW equivalent to cost saving of 2.2 lacs for the year.

Replacement of high cost heat transfer media (Thermic _uid) with low cost heating media (Steam) for Plant#8 at Vapi Unit which has potential of saving upto 14 lacs per annum.

Consolidation of equipments under two sheds as per the optimized process flow and minimum internal logistics requirement which has resulted in improved process efficiencies and minimum material movement.

Installation of Energy Efficient LED lights in place of conventional lights

Introduction of auto on-o_ system of exhaust fan in lift rooms.

The capital expenditure on energy conservation during the year under review was not substantial.


The Company is strongly devoted not only to environmental conservation programmes but also maintains balance between economic concerns, environmental and social issues faced by business. A business must not grow at the expense of mankind but must serve humankind at large. Your Directors are pleased to inform that your Company has become first zero liquid discharge company in Patalganga Rasayani Industrial Area in Raigad.

The Company is equally committed to provide a safe and healthy working environment for its employees and associates to ensure a high degree of safety norms. The Company continuously strives to perform beyond compliance. There is an increased focus on areas like training and awareness, safety observations, audits etc. to drive a positive safety culture. The Company places emphasis on safety processes, behavioural safety and strive to create a positive safety culture towards achieving the ultimate goal of ‘zero injury.

EHS initiatives taken by Keva are as under:

Installation of Reverse Osmosis Plant and Multi Effect Evaporator

Installation of foodie machines at Mulund and Vashivali Units which convert waste food into manure. This machine has a capacity to process 75 kgs of waste per day and convert to a feed of 7.5 kgs as manure.

Participation of employees in Environment, Health & Safety trainings organised by NSC viz. Statutory Requirements, Fire Prevention & Protection, Safety at ‘Working at Height, Electrical Safety, Behaviour based Safety, Disaster Management etc.

Participation in "Safety Officers Meet" jointly organised by Directorate of Industrial Safety & Heath and NSC.

Participation in On site and O_ site mock drills organized by Directorate of Industrial Safety & Heath and Mutual Aids Response Group

Organization of Mock safety drills within the Company

Implementation of online incident reporting system at Mulund Unit

Celebration of National Safety Week, Fire Service Week, World Environment Day

Imparting training in first aid, road safety, fire safety, ergonomics, use of PPEs, safe handling of chemicals, contract labour safety, SCBA training etc


When it comes to winning future business, it is imperative to stay on customers core lists. We are achieving this by investing in our R&D capabilities, developing consumer insights, and expanding our understanding of regulatory requirements. Keva fosters excellence through innovation supported by strong R&D capabilities. To keep pace with the changing market demand, the Creative Centres of your Company are proactively engaged in development of innovative products and technologies. In line with this prelude, your Companys Creative Centres at Amsterdam, Jakarta, Milan and Mumbai are continuously striving for innovative creations through research activities. Your Company continued to invest in creating additional lab infrastructure, advanced analytical instruments and recruitment of high calibre perfumers and _avourists to boost in-house research and build new capability platforms. Additionally, your Company has a strong Intellectual Property Rights support team, which enables it to patent its innovations globally and in developing unique products.

You will be glad to know that during the year, your Company has established world-class Creative Centre in Amsterdam equipped with the state-of-the-art infrastructure required for research and new product development. Expenditure on R & D and creative development during the year under review was 29.56 Crores on standalone basis and 40.45 Crores on consolidated basis.

Leveraging innovation and our talented workforce to advantage, we continuously strive to surpass the expectations of consumers, as we journey towards our goal of being one of the most admired world class F&F companies.


Talent and culture are the key focus areas for Keva to achieve its business aspirations. The HR functions strategy is focused on creating a future-ready workplace, strengthening the organization culture, building people and business capability by nurturing careers to its people.

Keva recognizes the challenge in attracting and retaining talent from a niche industry like ours. Identifying right talent that brings in entrepreneurial zest and have the ability to continuously challenge the status quo with a differentiating attitude is what Keva looks for as the organization gears up to execute its 5 year Strategic plan.

In its second year, LeAP (Leadership Advancement Program) – Kevas Global Talent Management Program, aims to develop its internal talent pool through a focused, customized and guided intervention. Mentoring by Senior Leadership Team for employees hired through Lateral Hiring program from ISB enables them to understand the culture and the industry for better familiarization with the organization. Kevas People Capability Development Plan (PCDP) designed for each function and created with people managers aims at providing customized learning intervention for holistic development. LEAD (Leveraging E-learning for Accelerated Development) - our e- learning platform - provides world class learning solution in all locations across the globe.

Keva Star - Kevas Global Employee Recognition Program, applauds the stellar performances that have made a direct impact on the organization. Half yearly Town Halls provide an open and transparent channel of communication with the CEO and the business and strategy of the organization.

We also recognize that certain personal issues or concerns may sometime interfere with employee health and wellbeing for which they may need counselling services from professional counsellors. ‘Ear2Hear is an Employee Assistance Program (EAP) which extends consultation on personal issues - professionally and confidentially. Professional counsellors assist the employees in developing the necessary coping skills that ensures that they maintain an emotional balance. This helps them to take important decisions, tackle problems and explore new avenues for change and growth.

Disclosures with respect to the remuneration of Directors, Key Managerial Personnel and employees as required under section 197 of the Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure F to this Report. Details of employee remuneration as required under provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also forms part of this Report. However, as per the provisions of Section 136 of the Companies Act, 2013, the report and accounts are being sent to the Members and others entitled thereto, excluding the said information 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.


Proactive and employee centric practices, focus on transparent communication and a firm belief that employees are the most valuable assets of the Company are the conrnerstone of your Companys employee relations approach. On industrial relations, Keva continued to share a cordial relationship with the Labour Unions in all the plant locations. The Board acknowledges the contribution of the workers and the employees towards meeting the objectives of the Company.


Your Company has developed a framework to harness the opportunities presented by prevalence of new-age digital technologies and transform to become a digitally savvy company.

Keva has implemented ISO 27001 Security Management Systems (ISMS) standard for IT Infrastructure Services, certified by NAQ_a reputed UK based body. This provides an independent third party validation of an organizations Security Management Systems.

The existing infrastructure of the Company includes a robust centralised ERP system based on SAP capable of covering business functions across finance, inventory management, procurement and logistics. The Company has also deployed Qlikview which provides a wide array of data analysis facilities.

CUPID - a homegrown ERP application for a Customer Project Integrated Development Process - provides a state of the art solution for project management. CUPID provides a single platform for managing customer projects right from the moment sales person enters the customers project until the time samples are delivered to the sales person for customer submission. Governance Risk & Compliance (GRC) tool and BMango–Brief management tool for _avours were implemented during the year. BMango is a customer project management application for _avours and is an acronym for Brief MANagement on the Go which signifies ease of managing customer projects with this application.

Success Factors - cloud based online system – is single HR platform through which employees across the globe have an easy access to HR related information - policies, newsletters, news _ash, team information, Performance Development Process, Learning and Development, and other HR processes on real time basis.

The IT infrastructure has enabled the Company to streamline operations, resulting in centralized processing of data and timely information sharing.


The details forming part of the extract of the Annual Return in Form MGT- 9 in accordance with Section 92(3) of the Companies Act, 2013 read with the Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure G to this Report.


During the year under review, the Company won multiple awards and recognitions, both international and national. Some of the significant awards include:

Your Company has been ranked 26th ‘Dream Company to Work For by the World HRD Congress in February 2017. Your Companys unit at Vahivali has successfully implemented Environment Management System programme and has been certified with ISO 14001:2015 by NQA (certification body). Kevas cross functional employees from Vashivali Plant have been certified as internal auditors for EMS ISO 14001:2015 by NQA.

Your Companys subsidiary Keva Fragrances Pvt. Ltd. was granted HALAL certification in Indonesia.

Your Companys subsidiary Keva Fragrances Pvt. Ltd. was adjudged second in the category for outstanding export performance for financial year 2016-17 by CHEMEXCIL (Basic Chemicals, Cosmetics & Dyes Export Promotion Council) – a body set up by the Ministry of Commerce & Industry to promote exports from India.

Vapi Unit is now a member of SEDEX- Supplier Ethical Data Exchange. SMETA- SEDEX Member Ethical Trade Audits is a standard used for Ethical Trade Audits to help businesses improve ethical performance of their supply chain.

Mr. Kedar Vaze – Director & CEO was one of the 16 Inspiring Entrepreneurs felicitated at the EY Entrepreneur of the Year 2017 held on February 15, 2018. A leader with disruptive ideas, incredible innovation, resilient leadership and sustained focus on growth of business /organisation along with community development, Mr. Kedar Vaze has successfully created a path breaking transformation for Keva.


Statements in the Annual Report, including those which relate to Management Discussion and Analysis, describing the Companys 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.


Your Directors would like to express their sincere appreciation of the positive co-operation received from the Government Authorities, Financial Institutions and the Bankers. The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers and staff of the Company resulting in the successful performance of the Company during the year. The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

For and on behalf of the Board of Directors of
CIN: L74999MH1955PLC009593
Ramesh Vaze
Managing Director
DIN: 00509751
Kedar Vaze
Director & Chief Executive Officer
DIN: 00511325
May 25, 2018