Keva Chemicals Pvt. Ltd. (step-down subsidiary)A separate statement containing the salient features of all subsidiaries of your Company which includes capital, reserves, total assets, total liabilities, details of investment, turnover etc. forms part of this report in compliance with the General Circular No. 2/ 2011 dated 8th February, 2011 issued by Ministry of Corporate Affairs granting a general exemption from the provisions of Section 212(8) of the Companies Act, 1956. The annual accounts and financial statements of the subsidiary companies and related detailed information shall be made available to members on request and are open for inspection at the Registered Office of your Company.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (CSR) is not a new concept in India. The focus of the organisations is shifting from making profits to meeting societal challenges.
In June 2014, your Board has constituted Corporate Social Responsibility Committee (CSR Committee) as a Board Committee in accordance with the requirements of Section 135, Schedule VII of the Companies Act and the CSR Rules, 2014 that have come into effect from 1st April, 2014. The CSR Committee comprises of Mr. Ramesh Vaze as Chairman and Mr. Kedar Vaze and Mrs. Prabha Vaze as other members. Mr. Indrajit Chatterjee, Head Human Resources would also be a permanent invitee to the Committee and Ms. Deepti Chandratre, Company Secretary & Manager - Legal would be the Secretary to the Committee. The said Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company, monitoring the implementation of the framework of the CSR Policy, recommending to Board the amount to be spent on CSR activities and ensuring that the implementation of the projects and programmes is in compliance with the objectives of the Corporate Social Responsibility Policy of the Company.
As part of its CSR initiatives, the Company continued to provide support to educational institutions. The Company has recruited physically challenged employees and shall continue to undertake more activities and initiatives to improve the quality of life and society at large.
DIRECTORS
None of the Directors of your Company is liable to retire by rotation. 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, 1956 or Companies Act, 2013, as applicable.
Mr. Deepak Raj Bindra has been appointed as an additional Director effective 06 March, 2014 pursuant to Section 260 of the Companies Act, 1956, read with Articles of Association of the Company, and holds office upto the date of this Annual General Meeting of the Company but is eligible for appointment. By qualification, Mr. Bindra is B.Com and FCA (Institute of Chartered Accountants in England & Wales). His vast experience includes setting up of large green-field projects, turn-around of businesses, heading profit centres responsible for FMCGs and consumer durables. He also helped SMEs in the UK both as a Business consultant and Director to bring about change management and turn around business.
The Board of Directors of your Company at its Meeting held on 22 August 2014 appointed Mr. Nitin Potdar as an Additional Independent Director, respectively, on the Board of Directors of your Company. In terms of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, the Independent Directors can hold office for a term of up to five (5) consecutive years on the Board of Directors of your Company and are not liable to retire by rotation. Accordingly, it is proposed to appoint Mr. Nitin Potdar as Independent Director of your Company for 5 (five) consecutive years from 22 August 2014.
The Board of Directors at its the aforementioned meeting also considered the proposal on appointment of Deepak Raj Bindra, Additional Director as Director at ensuing Annual General Meeting and determined that Mr. Bindra is a fit and proper person to be appointed as a Director on the Board of the Company.
In terms of Section 160 of the Companies Act, 2013, the Company has received a notice signifying the intention to propose the candidature of Mr. Deepak Raj Bindra and Mr. Nitin Potdar for the office of Director and Independent Director respectively. Your Directors recommend appointment of Mr. Bindra as Director and Mr. Nitin Potdar as an Independent Director.
EXECUTIVE COMMITTEE
The day-to-day management of the Company is vested with an Executive Committee, which is subjected to the overall superintendence and control of the Board. The Committee is broadly responsible for implementing the overall business strategy approved by the Board, identifying areas of further value creation, new initiatives for enhancing business competitiveness and implementing the business plans as approved by the Board of Directors. The Executive Committee is headed by the Chief Executive Officer and has Functional / Business Heads as its members.
DIRECTORS RESPONSIBILITY STATEMENT
As required under Section 217 (2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby states and confirms that:
In preparation of Annual Accounts for the financial year, applicable Accounting Standards as issued by Institute of Chartered Accountants of India and the requirements of the Companies Act, 1956 to the extent applicable to us have been followed along with the proper explanations relating to material departures;
It has selected the accounting policies described in the notes to accounts, which have been consistently applied, except where otherwise stated 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 as at March 31, 2014 and of the profit or loss of the Company for that year;
It has taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and
The Annual Accounts have been prepared on going concern basis and on accrual basis.
CONSERVATION OF ENERGY
Conservation of energy is a need of the day. Your Company believes in the conservation of energy to meet the future demands. The thrust of your Companys strategy is to save energy through application of various efficiency measures. Though the Companys operations involve low energy consumption, the Company has always been conscious of the need for conservation of energy and has been sensitive in making progress towards this end. During the year, the efforts of your Company maneuvered to innovation and improvement so as to further reduce 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 following key initiatives have been undertaken by your Company towards conservation of energy:
Replacing 20% conventional lights (CFL) at Vashivali Unit with new Energy Efficient Lights (LED) which led to savings of Rs 22,000/- per month.
While designing the Multi purpose plant (MPP), less power consuming screw compressors were selected for the chilling plant instead of traditional reciprocating compressor.
The cooling tower for Multi-Purpose Plant at Vapi was installed at the terrace of the four storied building to make use of the gravitational force for circulation of water which reduced power consumption.
In the steam headers, inverted bucket type steam traps were used instead of traditional TD steam traps. The IB traps save more steam than TD traps.
Old Diesel Generators were replaced with new ones for fuel economy.
Steam ejectors were replaced with low power consuming vacuum pumps in the process plants
Distillation column with structured packing was installed Multi-Purpose Plant at Vapi, which improved distillation efficiency and reduced steam consumption.
In-house training on Waste Management
Plantation of trees at all manufacturing facilities;
Reduction of energy consumption via behavioural modification of facility occupants i.e. turning off lights, personal computers and other electronic equipments, when not in use;
Use of advanced technology at manufacturing plants;
Timely maintenance and up-gradation of machinery & equipments
Awareness programs towards optimum utilization of natural resources
Future plan of action:
Installation of Condensate Recovery System to reduce fuel cost
Conversion of boiler fuel from Furnace Oil to PNG (Piped Natural Gas)
Condensation of steam in the steam line is directly proportional to the length and diameter of the steam pipes. The entire steam piping for non MPP manufacturing facility will be re-routed to reduce its length.
The packing of distillation columns will be replaced with structured packing to improve efficiency.
To make available the resources for future generation is the ultimate responsibility of today's generation. Hence, your Company continues to lay emphasis on conservation of energy, power and other energy resources. The Company is confident that such measures for conservation of energy will ultimately reduce the cost of production by reducing maintenance cost and efficient use of resources.
TECHNOLOGY ABSORPTION
In todays world, perpetually evolving technologies and increasing competition define the global market space. In order to maintain its position of leadership, the Company has continuously and successfully developed innovative methods for absorbing, adapting and effectively deploying new technologies. For effective treatment of effluent, multiple effect evaporation system was established in Vapi Unit. The MEE technology helped the said unit treat effluent in appropriate manner
RESEARCH AND DEVELOPMENT
Strive to foster the product pallet of quality F&F ingredients to support the company requirement for growth is the vision of the Companys Research & Development (R&D) efforts. Creative and innovative research and development (R&D) programmes are the bedrock for the Companys continued commercial success.
Your Company has built up strong R & D centres, having qualified staff working continuously for betterment of product and services. Our R&D team continuously does market research as well as customer survey to understand the needs and requirements of the consumers.
1. Specific areas in which R&D was carried out by the Company:
During the year under review, the R&D team has:
Set-up a new Plant Support Lab in Vapi.
Introduced high-yielding production processes
Developed an array of new products
Improved and standardized processes established at Vapi Unit.
2. Benefits derived as a result of the above:
Existing lab and plant processes were improved with respect to raw material and utility consumption, batch cycle time and waste reduction.
Other benefits derived as a result of Research and Development are as under:
Gaining competitive advantage in the global consumer marketplace.
Broadening of global product range by offering an array of quality products
Increased productivity and product quality
Enhanced reproducibility of production processes by standardized SOPs and use of state of the art production equipment
Strict adherence to Management of change as part of the culture of multinationals.
Minimization of environmental hazard
Cost saving
3. Future plan of action:
Increase/broaden the specialty product range
Design and develop new aroma chemicals based on in-house developed synthetic routes
Usage of green raw materials
Strive for improved production efficiency of existing product portfolio.
Waste reduction and improvement of environmental parameters such as energy and water consumption.
Introduction of HACCP manufacturing standards and SEDEX registration.
Guarantee conformity to HALAL and KOSHER standard in parallel to expand R&D-focus on attractive flavor chemicals.
4. Expenditure on R & D :
| Rs. (in Crores) |
a) Capital | 1.08 |
b) Recurring | 12.28 |
c) Total | 13.36 |
d) Total R & D Expenditure as percentage of total turnover | 3.36% |
The Company would need to invest further to upgrade its R&D facilities and it is planned to spend approx. 0.5% of its turnover on capital expenditure during the coming years.
FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars of Foreign Exchange Earnings and Outgo during the year are as set out hereunder:
Particulars | For the year ended March 31, 2014 | For the year ended March 31, 2013 |
Foreign Exchange Earnings | 11.03 | 5.96 |
Foreign Exchange Outgo | 116.97 | 77.53 |
| | |
PUBLIC DEPOSITS
Your Company has not accepted any fixed deposits within the meaning of Section 58A of the Companies Act, 1956 and as such, no amount of principal or interest was outstanding as on the Balance Sheet date.
INSURANCE
All the insurable interests of your Company including inventories, buildings, plant and machinery are adequately insured.
PARTICULARS OF EMPLOYEES
The information required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder is provided in Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Directors Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining copy of the same may write to the Company Secretary.
AUDITORS
The term of office of B S R & Co, as Statutory Auditors of the Company will expire with the conclusion of forthcoming Annual General Meeting of the Company. M/s. B S R & Co have been Statutory Auditors of your Company since financial year 2010-11.
The Board of Directors of the Company has, subject to approval of the Members, decided to make a change in the Statutory Auditors. A special notice has, accordingly, been received from a Member of the Company, proposing a resolution at the forthcoming Annual General Meeting for appointment of B S R & Co. LLP, holding Registration No. 101248W with the Institute of Chartered Accountants of India (ICAI), as Statutory Auditors of the Company in place of the B S R & Co, being the retiring Auditor, to hold office from the conclusion of the ensuing Annual General Meeting until the conclusion of sixth Annual General Meeting to be held after the ensuing Annual General Meeting, subject to ratification at every Annual General Meeting. The Company has received certificate under Rule 4 of the Companies (Audit and Auditors) Rules, 2014 from B S R & Co. LLP. A resolution proposing appointment of B S R & Co. LLP as the Statutory Auditors of the Company pursuant to Section 139 of the Companies Act, 2013 forms part of the Notice.
B S R & Co have maintained the highest level of governance, rigour and quality in their audit. The Board places on record its sincere appreciation for the services rendered by B S R & Co as the Statutory Auditors of the Company.
AUDITORS REPORT
The Auditors Report on the Annual Accounts of the Company forms part of the Annual Report and is self- explanatory.
COST AUDITOR
Your Company had appointed Mr. Kishore Bhatia, Cost Accountants, as the Cost Auditor of your Company for the financial year 2013-14 to conduct the audit of the cost records of your Company.
The Board has approved the appointment and remuneration of Mr. Kishore Bhatia, Cost Auditor, to conduct the Cost Accounts of the Company, as directed by the Central Government vide its Order No. 52/26/CAB-2010 dated November 06, 2012 in respect products being manufactured by the Company and covered under the said Order for the financial year ending March 31, 2015. In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the shareholders are requested to ratify the remuneration payable to the Cost Auditor at the ensuing Annual General Meeting of the Company.
The Cost Audit report for the financial year 2012-13 was filed within the due date. The due date for submission of the Cost Audit Report for the year 2013-14 is within 180 days from 31st March, 2014.
COMPLIANCE
The Company is committed to the highest ethical standards in business conduct and to compliance with laws and regulations as well as with Company policies, practices and procedures. This includes all your Companys relations with customers, suppliers, shareholders, employees, competitors, government agencies and the communities in which the Company operates. The focus of compliance activities is on quality, environmental protection, health, work safety, product safety, risk and value management and combating corruption.
Your Company continued to focus on the key areas and projects within the legal and compliance functions, which include transiting to a workflow based compliance software tool SCM. This tool enables compliances to be made and tracked by factories and offices of your Company across the country.
WHISTLE BLOWER POLICY
During the year under review, the Company has adopted a Whistle Blower Policy to provide appropriate avenues to the employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business principles of the Company. The Company has provided dedicated e-mail addresses for reporting such concerns. Alternatively, employees can also send written communications to the Company. The employees are encouraged to raise any of their concerns by way of whistle blowing by conducting workshops at various units from time to time. The Company Secretary is the designated officer for effective implementation of the policy and dealing with the complaints registered under the policy. The Whistle Blower Policy is available on the website of the Company www.kelkargroup.com.
HUMAN RESOURCES
Your Companys Human Resources are an integral part of our growth story and institution building process. In the year 2013-14, the Company focused on driving HR excellence through transformational intervention! Your Company is seeing gradual and steady emergence of growth aligned with performance culture that is making it more agile, process driven and innovative. With competency framework embedded in the organization, the Company has rolled out a wide range of initiatives designed to harness the talents, viewpoints and experience of its employees to build a winning culture - a culture that is anchored by your organisations values.
Some of the key HR initiatives and highlights are as under:
Attracting talent:
To attract quality talent pool, Campus Hiring initiative involved lateral hiring from ISB - Hyderabad and Technical Trainees from Vaze College. During the year, focus was on attracting better, diversified and quality talent.
Building High Performance Culture:
Performance Management as a process has strong linkage with business and is pivotal to organizational success. In year 2013-14, your Company focused on driving performance as a culture to achieve higher employee performance and enhanced productivity. Mid-Year Performance Dialogue (MYPD) process was introduced to bring quality focus on development through constructive feedback and coaching.
Capability Building:
In order to build a learning organization, the key focus during the year was to bring about Behavioural and Functional Capability building at all levels of management through Learn to Win, monthly calendarized event. Our learning interventions have been aligned to Kelkar Group Behavioural Competency Framework (KGBCF).
Leadership Development:
To build the leadership thinking and capability which are essential to fuel an organisations growth aspirations, strategic mind set and build market insight, your Company has launched Leaders Talk series. Roll out of Development Centre for Senior & Middle Management was yet another initiative to build the capability of employees by helping them identify their areas of strength and development followed by creation of IDP.
Engagement:
Engaged employees helped the Company meet its business goals and make the organisation a great place to work. Your Company gathered feedback of employees about their perceptions of the workplace environment and then benchmark against the best in class standards. The survey findings will enable the Company to better appreciate its strengths and identify focus areas for improvement and create intervention plans to see tangible results along our growth phase journey. Kalacrity - Cross Functional Employee Engagement Team has been formed to create excitement and engagement through fun and engaging events. Through an engagement calendar your Company creates positive work culture and high impact on employee connect.
INDUSTRIAL RELATIONSOn the Industrial Relations front, we continue to share a cordial relationship with the Unions and acknowledge the contribution of the Unions and the Employees towards meeting the objectives of the Company.
INFORMATION TECHNOLOGY
Information Technology and Business are becoming inextricably interwoven. Nobody can meaningfully talk about one without talking about the other. Indeed, the growing influence of Information Technology as an enabler of business in todays time has made use of Information Technology indispensible. Information Technology, having made inroads into major industries, has left no aspect of our business and life untouched. Your Company firmly believes that an organization needs to have a Digital Nervous System for sustaining the cut-throat competition and for acheiving the Numero Uno status in any sector of economy.
In due recognition of the key role played by Information Technology in revolutionizing the world, your Company is in the process of re-engineering its processes by leveraging Information Technology for building, sustaining and expanding its competitive edge. Accordingly, your Company had selected SAP (System, Applications & Products in Data processing) as its group ERP. SAP ERP is an integrated software solution that incorporates the key business functions of the organization and was fully implemented during the year under review. ENVIRONMENT, HEALTH AND SAFETY
Environment, Health and Safety (EHS) is one of the primary focus areas for your Company. Your Companys EHS policy is to consider compliance to statutory EHS requirements as the minimum performance standard and is committed to go beyond and adopt stricter standards wherever appropriate.
Your Company believes that clean surrounding and healthy environment adds to the efficiency of workmen. It is the responsibility of the Company to maintain the ecological balance for sustainable development. Your Company aims towards maintaining the harmony and rhythm of the eco-system. Various activities such as training programmes to educate, train and motivate employees to conduct their activities in an environmentally responsible manner were organized. The Company celebrated World Environment Day this year by carrying out extensive tree plantation in and around its units and by organizing an in-house Training on Waste Management for its workmen and employees.
The Company continued to focus on its safety practices, steadfast in its belief that all injuries are preventable. The Company organizes a free medical check-up for its workmen and employees every year. The Company has tie-ups with hospitals in vicinity to attend to medical emergencies of the staff and workers alike.
The Company celebrated National Safety week in March 2014 by organising various activities such as Safety Slogan, Safety Poster and Safety Suggestion Competition alongwith the training program on basic fire safety for employees. Various training sessions such as Lab Safety, Chemical Classification & Hazard Control, Basic Fire Safety with Emergency Preparedness, etc. were organized during the safety week. Fire Fighting Training Programme was organised on the occasion of Fire Service Day which was followed by mock-drills across various units of the Company.
AWARDS AND RECOGNITION
Your Company has proved its credibility by outshining amongst its global competitors time and again. You Company stands proud as another feather was added to its cap when Marico Limited organized Samyut, a Suppliers meet for suppliers of Non Agricultural Products at Goa on 15 May 2014. During the meet's award function, your Company was awarded for Best Performance in Quality amongst the other international fragrance companies present during the meet. With this award, your Company has been appreciated for its consistency in quality & timely delivery of products time and again.
ACKNOWLEDGEMENTS
Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees have enabled the Company to remain as industry leaders.
The Board places on record its appreciation for the support and co-operation your Company has been receiving from its suppliers, business partners and others associated with the Company as its trading partners. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Companys endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests.
The Directors also take this opportunity to thank all investors, clients, vendors, banks, government and regulatory authorities for their continued support.
For and on behalf of the Board of Directors of
S. H. KELKAR & CO. PVT. LTD.
RAMESH VAZE KEDAR VAZE MANAGING DIRECTOR DIRECTORPlace: Mumbai
Date: 22 August 2014