S H Kelkar & Company Ltd Directors Report

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S H Kelkar & Company Ltd Share Price directors Report

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. Kevas 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, Companys 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 Companys 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.

Companys 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. Companys 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 arms 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 Companys 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 BOARDS 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 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.

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 Companys 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 Auditors 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 Companys 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 Companys 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, Kevas 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 Companys 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 Companys CSR Programme. The CSR Policy can be accessed on the Companys 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 Companys 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.

Kevas 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 employees 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. Kevas 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 Companys 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 Companys 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 Boards 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 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.

ACKNOWLEDGEMENTS

Your directors place on record their appreciation of the continued support extended during the year by the Companys 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.

For and on behalf of the Board of Directors of
S H KELKAR AND COMPANY LIMITED
CIN: L74999MH1955PLC009593
Place: Mumbai Ramesh Vaze Kedar Vaze
Date: 30 May 2023 Director & Chairman of Board Director & Group Chief Executive Officer
DIN: 00509751 DIN: 00511325

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