The Shareholders of Kokuyo Camlin Limited
Your Directors have pleasure in presenting the 72nd Annual Report on the business andoperations of the Company together with the Audited Financial Statements for the financialyear ended 31st March 2019.
FINANCIAL RESULTS (STANDALONE):
(R In Lakhs)
|Particulars ||2018-2019 ||2017-2018 |
|Gross Sales/Income from Business ||77949.87 ||70375.45 |
|Less: Discount on Sales ||9072.67 ||6534.65 |
|Net sales ||68877.20 ||63840.80 |
|Other Income ||76.70 ||284.99 |
|Total Income ||68953.90 ||64125.79 |
|Profit Before Interest and Depreciation ||5211.09 ||4101.57 |
|Less: Interest ||1149.76 ||960.57 |
|Less: Depreciation ||1787.19 ||1650.51 |
|Profit Before Tax ||2274.14 ||1490.49 |
|Less: Provision for Tax || || |
|- Current ||476.03 ||255.91 |
|- Deferred ||275.62 ||252.41 |
|- Prior Years (Net) ||2.15 ||- |
|Net Profit after Tax ||1520.34 ||982.17 |
|Balance carried to Balance Sheet ||1520.34 ||982.17 |
|Earnings per share (Basic) ||1.52 ||0.98 |
|Earnings per share (Diluted) ||1.52 ||0.98 |
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE:
During the year the Company reported on standalone basis gross sale/ income of R77949.87 Lakhs as compared to R 70375.45 Lakhs for the last year representing a growth of10.76% over the corresponding period of the previous year. The profit before tax washigher at R 2274.14 Lakhs against R 1490.49 Lakhs for the corresponding period of theprevious year.
Given the growth requirements of the business your Directors do not recommend anydividend on equity shares for the financial year 2018-2019.
TRANSFER TO RESERVE:
During the year under review the Company has not transferred any amount towardsGeneral Reserve and retained the entire amount of profits in the Profit and Loss Account.
MANAGEMENT DISCUSSION AND ANALYSIS:
The Management Discussion and Analysis forms an integral part of this report and ispresented separately. It gives details of the overall industry structure economicdevelopments performance and state of affairs of your Company's operations and theiradequacy risk management systems and other material developments during the financialyear 2018-19.
During the year under review there was no change in the share capital structure andthe paid-up capital of the Company as on 31st March 2019 was R 1003.04 Lakhs.
CONSOLIDATED FINANCIALS STATEMENTS:
As per SEBI (Listing Obligations & Disclosure Requirements) Regulations 2015("Listing Regulations") the consolidated financial statements have beenprepared by the Company in accordance with the applicable Accounting Standards. Theaudited consolidated financial statements together with Auditors' Report form part of theAnnual Report. Pursuant to Section 136 of the Companies Act 2013 the financialstatements of the Subsidiary Associate and Joint Venture Companies are kept forinspection by the shareholders at the Registered Office of the Company. The Company shallprovide free of cost the copy of the financial statements of its Subsidiary Associateand Joint Venture Companies to the shareholders upon their request. The statements arealso available on the website of the Company www.kokuyocamlin.com under the InvestorRelations section.
At present the Company does not have any subsidiary. No new subsidiary wasincorporated or acquired by the Company during the year under review.
As mentioned in our Report for the previous year 2017-2018 M/s. Camlin InternationalLimited wholly owned subsidiary of Kokuyo Camlin Limited had made an application on 30thMarch 2018 to the Registrar of Companies for striking off the Company by removal of namefrom the Register of Companies. The Registrar of Companies Ministry of Corporate Affairsvide its Notice in Form STK-7 dated 5 December 2018 has struck off the name of theCompany Camlin International Limited from the Register of Companies. Thus CamlinInternational Limited has been dissolved and thereby ceased to be the wholly ownedsubsidiary of our Company.
Further during the year the Company has transferred 274050 equity shares held in itsAssociate Company M/s. Colart Camlin Canvas Pvt. Ltd. ("Colart") whereby thestake held by the Company in Colart has fallen below 20% and thus Colart is no longer theAssociate Company of our Company.
Pursuant to the provisions of Section 129(3) of Companies Act 2013 a statementcontaining salient features of the financial statements of Subsidiary/Associate Company inForm AOC-1 is attached to the financial statements of the Company.
In accordance with the section 136 of the Companies Act 2013 the Audited FinancialStatements and related information of the Company are available on the websiteHREF="http://www.kokuyocamlin.com/">www.kokuyocamlin.com .
During the year under review your Company has not accepted any deposits. There are nounclaimed deposits as on date.
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY:
There have been no Material changes and Commitments affecting the financial position ofthe Company which have occurred between the end of the financial year of the Company towhich the financial statement relate (i.e. 31st March 2019) and the date of the report.There has been no change in the nature of business of the Company.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:
The Company has not granted any Loans Guarantees or Investments during the financialyear ended 31st March 2019.
RELATED PARTY TRANSACTIONS:
All Related Party Transactions are placed before the Audit Committee as also the Boardfor approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are of a foreseen and repetitive nature. The transactions entered intopursuant to the omnibus approval so granted are audited and a statement giving details ofall related party transactions is placed before the Audit Committee and the Board ofDirectors for their review/approval on a quarterly basis.
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of business. There are no materiallysignificant related party transactions made by the Company with Promoters Directors andKey Managerial Personnel which may have a potential conflict with the interest of theCompany at large. Accordingly the disclosure of Related Party Transactions as requiredunder Section 134 (3) (h) of the Companies Act 2013 in Form AOC-2 is not applicable toyour Company.
The details of transaction with related parties are provided in the accompanyingfinancial statements. The policy on Related Party Transactions as amended and as approvedby the Board is uploaded on the Company's website at hhtps://www.kokuyocamlin.com/company-policies.html
Ms Aditi D. Dighe daughter of Mr Dilip D. Dandekar Chairman & Executive Directorof the Company is an employee of the Company presently receiving monthly remuneration notexceeding two and a half Lakhs rupees. She is entitled to an annual increment as given toother regular employees of the Company and her remuneration after such increment wouldexceed the prescribed limit of R 30.00 Lakhs per annum (i.e. R 2.50 Lakhs per month) TheBoard of Directors on the recommendation of Remuneration and Nomination Committee at theirmeeting held on 8th May 2019 has revised the monthly remuneration effective from 1 April2019 of Ms Aditi D. Dighe exceeding the limit of R 2.50 Lakhs per month subject toapproval of members in the ensuing General Meeting by way of passing an Ordinaryresolution. The details of remuneration payable to Ms Aditi Dighe is given in theExplanatory Statement forming part of the Notice.
CORPORATE GOVERNANCE REPORT:
Corporate Governance is all about ethical conduct integrity and accountability. GoodCorporate Governance involves a commitment of the Company to run the business in a legalethical and transparent manner and runs from the top and permeates throughout theorganisation. It is a key element improving the economic efficiency of Organisation.
As per Listing Regulations a separate section on Corporate Governance forms part ofthis report. A Certificate from M/s. JHR & Associates Secretarial Auditors confirmingcompliance of Corporate Governance forms part of this Report.
Certificate of the CEO/CFO confirming the correctness of the financial statementscompliance with the Company's Code of Conduct and the Audit Committee in terms ofRegulation 17 of the Listing Regulations is attached in the Corporate Governance reportand forms part of this report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In terms of the provisions of the Companies Act 201 3 Mr Nobuchika Doi and Mr TakeoIguchi Directors of the Company retire by rotation at the ensuing Annual General Meetingand being eligible offer themselves for re-appointment you are requested to appointthem.
During the year the Company had appointed Mr Satish Veerappa as a Key ManagerialPerson (KMP) designated as 'Chief Executive Officer' effective from 9th May 2018. TheBoard of Directors at its meeting held on 26th October 2018 appointed Mr Satish Veerappaas Manager designated as Chief Executive Officer (CEO) of the Company for the period of 3years effective from 1st November 2018 to 31st October 2021. In lieu of his appointmentas Manager the Board of Directors re-designated Mr Nobuchika Doi from 'Managing Director'to 'Executive Director' for the remaining period of his tenure of two (2) years effectivefrom 1st November 2018 to 31st October 2020.
Further the Board of Directors at its meeting held on 24th January 2019 approved there-appointment of Mr Dilip D. Dandekar as 'Chairman & Executive Director' and MrShriram S. Dandekar as 'Vice-Chairman & Executive Director' whose term expired on31st January 2019 for the further period of one (1) year with effect from 1st February2019. In the said meeting the Board also approved the re-appointment of the IndependentDirectors namely Mr Ramanathan Sriram Mr Shishir B. Desai Mr Hisamaro Garugu MrDevendra Kumar Arora and Mr Sriram Venkataraman whose term was expiring on 31st March2019 for the second term of five consecutive years effective from 1st April 2019 to 31stMarch 2024.
All the aforesaid appointments of Manager and Directors and redesignation of MrNobuchika Doi were approved by the members by passing special resolutions through PostalBallot on 20th March 2019.
The profile of Directors seeking re- appointment forms integral part of the Notice.
None of the Directors are disqualified from being appointed as Directors as specifiedin section 164 of Companies Act 2013.
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Act read with the Rules framedthereunder.
1. Mr Chetan Badal - Chief Financial Officer
2. Mr Ravindra Damle - Vice President (Corporate) & Company Secretary
3. Mr Satish Veerappa - Manager designated as Chief Executive Officer (with effect from1 November 2018)
The Disclosure required under Section 197(12) of the Companies Act 201 3 read withRule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014 is annexed as "Annexure -C" forming an integral part of this report.
MEETINGS OF BOARD:
During the financial year 2018-19 four Board Meetings were held the details of whichare given in the Corporate Governance Report. The intervening gap between the Meetings waswithin the period prescribed under the Companies Act 2013.
FAMILIARISATION PROGRAMME FOR THE INDEPENDENT DIRECTORS:
In compliance with the requirements of Listing Regulations the Company has put inplace a familiarisation program for the Independent Directors to familiarise them withtheir role rights and responsibilities as Directors the working of the Company natureof the industry in which the Company operates business model etc. The details of thefamiliarisation programme are explained in the Corporate Governance Report. The same isalso available on the website of the company and can be accessed by web linkHREF="https://www.kokuyocamlin.com/company-policies">https://www.kokuyocamlin.com/company-policies.
PERFORMANCE EVALUATION OF THE DIRECTORS:
Pursuant to applicable provisions of the Companies Act 2013 and the ListingRegulations the Board has carried out an annual evaluation of its own performance itsCommittees and individual Directors.
Further the Independent Directors had met separately without the presence ofNon-Independent Directors and the members of management and discussed the performanceevaluation of the Board Members as stipulated under the Listing Regulations.
DECLARATION OF INDEPENDENCE:
Your Company has received declarations from all the Independent Directors confirmingthat they meet the criteria of independence as prescribed under the provisions of theCompanies Act 2013 read with the Schedules and Rules issued thereunder as well asRegulation 16(1) (b) of Listing Regulations (including any statutory modification(s) orre-enactment(s) for the time being in force)
The Board has on the recommendation of the Remuneration and Nomination Committeeframed a policy for selection appointment and remuneration of Directors and KMPs. Duringthe year under review the Company has revised the Remuneration and Nomination Policy inaccordance with the amendments to Section 178 of the Companies Act 2013 and the ListingRegulations. The Remuneration Policy is stated in the Corporate Governance Report and isalso available on the website of the Company atHREF="https://www.kokuyocamlin.com/company-policies.html">https://www.kokuyocamlin.com/company-policies.html.
DIRECTORS RESPONSIBILITY STATEMENT:
Pursuant to the requirement under section 134(3) (c) of the Companies Act 2013 yourDirectors to the best of their knowledge and belief and according to the information andexplanations obtained by them hereby confirm:
a) That in the preparation of the annual accounts for the financial year ended 31stMarch 2019 the applicable accounting standards had been followed along with properexplanation relating to material departures;
b) That the Directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year ended 31st March 2019 and of the Profit of the Company for the year endedon that date.
c) That the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the company and for preventing and detecting fraud and other irregularities;
d) That the Directors had prepared the annual accounts on a going concern basis; and
e) That the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) That the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
AUDITORS & AUDITORS REPORT: STATUTORY AUDITORS:
Pursuant to the provisions of Section 139 of the Companies Act 2013 read withCompanies (Audit and Auditors) Rules 2014 M/s. B S R & Co. LLP CharteredAccountants (Firm Registration No. 101248W/ W100022) were appointed as the StatutoryAuditors of the Company for a term of five years to hold office from the conclusion of70th Annual General Meeting held on 28 June 2017 till the conclusion of 75th AnnualGeneral Meeting of the Company. They have confirmed that they are not disqualified fromcontinuing as the Auditors of the Company.
The observation of the Auditors in their report read with relevant notes to theaccounts are self-explanatory and therefore do not require further explanations.
The Auditors Report to the members on the Standalone and Consolidated FinancialStatements of the Company for the year ended 31st March 2019 does not contain anyqualifications reservations or adverse remarks.
There have been no instances of fraud reported by the Statutory Auditors under Section1 43 (1 2) of the Companies Act 201 3 and the Rules framed thereunder either to theCompany or to the Central Government.
M/s. JHR & Associates a firm of Company Secretaries were appointed as SecretarialAuditor for the financial year 201819 pursuant to Section 204 of the Companies Act 2013.The Secretarial Audit Report submitted by them in the prescribed form MR-3 is attached as"Annexure - E" and forms part of this report.
There are no qualifications or observations or adverse remarks or disclaimer of theSecretarial Auditors in the Secretarial Audit/ Compliance Report issued by them for thefinancial year 2018-19.
RECONCILIATION OF SHARE CAPITAL AUDIT:
As directed by the Securities and Exchange Board of India (SEBI) Reconciliation ofShare Capital Audit has been carried out at the specified period by a Practicing CompanySecretary.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:
The Companies Act 2013 re-emphasises the need for an effective Internal FinancialControl System (IFC) in the Company which should be adequate and shall operateeffectively. To ensure effective Internal Financial Controls the Company has its ownprocess driven framework for the year ended 31st March 2019.
The Board is of the opinion that the Company has sound IFC commensurate with the natureand size of its business operations; wherein controls are in place and operatingeffectively and no material weaknesses exist. The Company has a process in place tocontinuously monitor the existing controls and identify gaps if any and implement newand /or improved controls wherever the effect of such gaps would have a material effect onthe Company's operation.
INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
The Company had transferred a sum of R 2.54 Lakhs during the financial year to theInvestor Education and Protection Fund established by the Central Government (IEPF). Thesaid amount represents Unclaimed Dividend for the year 2010-2011 with the Company for aperiod of 7 years from their respective due dates of payment.
TRANSFER OF SHARES TO IEPF
As required under Section 124 of the Companies Act 2013 196995 Equity shares inrespect of which dividend has not been claimed by the members for Seven (7) consecutiveyears have been transferred by the Company to IEPF during the financial year 2018-19.Details of shares transferred have been uploaded on the website of IEPF as well as theCompany.
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE:
The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013and Rules framed there under the Company has implemented a policy on preventionprohibition and redressal of sexual harassment at the workplace. All women permanenttemporary or contractual including those of service providers are covered under thepolicy. An Internal Sexual Harassment Committee comprising management staff has been setup at office and factory locations which includes three women to redress complaintsrelating to sexual harassment. The Committee also includes an outside woman representativefrom an NGO. During the year under review no case was reported under the said policy.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
There are no significant or material orders passed by any regulator tribunal or courtthat would impact the going concern status of the Company and its future operations
CORPORATE SOCIAL RESPONSIBILITY:
In terms of Section 135 of the Companies Act 2013 read with Companies (CorporateSocial Responsibility) Rules 2014 as amended and in accordance with the CSR Policy theCompany has spent above 2% of the average net profits of the Company during the threeimmediately preceding financial years. The details are provided in the Annual Report onCSR activities has been appended as "Annexure - D" which forms an integral partof this report. The CSR Policy of the Company is also available on the website of theCompanyHREF="https://www.kokuyocamlin.com/pdf/">https://www.kokuyocamlin.com/pdf/CSR-Policy.pdf
Key Initiatives which the Company engaged are:-
Educate the Girl Child
Your Company got associated with K.C. Mahindra Foundation Trust A/c - Nanhi Kali one ofthe largest community programs imparting education to under privileged girls across India.This partnership provided support to girl children through academic material and socialbacking by identifying critical centers of education through Nanhi kali project.
Swachh Bharat Kosh
Your Company also contributed to the Swach Bharat Kosh set-up by the Central Governmentfor promotion of sanitation through donation to the above said fund
Setting up a Mini Science Center
Your Company has contributed for setting up a Mini Science Center at three ZillaParishad Schools near our factory located at Patalganga.
In addition to the above the Company has been implementing other social activitieswhich has not been considered for arriving at the spends as per the CSR rules.
CODE OF ETHICS AND VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
The Company has adopted code of ethics and business conduct which lays down principlesand standards that should govern the actions of the Company and employees. The Company hasa vigil mechanism called "Whistle Blower Policy" with a view to provide amechanism for employees of the Company to raise concerns of any violations of any legal orregulatory requirement incorrect or misrepresentation of any financial statements andreports etc. The Company is committed to adhere to the highest standard of ethical moraland legal conduct of business operations.
The Company has taken steps to establish Vigil Mechanism for Directors and Employees ofthe Company. The details of the Policy are posted on the website of the Company at www.kokuyocamlin.com. During the year under review the policy was suitably amended to includereporting of instances relating to leak of Unpublished Price Sensitive Information.
PREVENTION OF INSIDER TRADING:
The Company has also adopted a code of conduct for prevention of insider trading. Allthe Directors senior management employees and other employees who have access to theunpublished price sensitive information of the Company are governed by this code. Duringthe year under report there has been due compliance with the said code of conduct forprevention of insider trading based on the SEBI (Prohibition of Insider Trading)Regulations 2015. The Board of Directors has adopted the amended Code of Conduct pursuantto the SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018 which iseffective from 1st April 2019.
The Company's plant property equipment's and stocks are adequately insured againstmajor risks. The Company also has appropriate liability insurance covers particularly forproduct liability. The Company has also taken Directors' and Officers' Liability Policy toprovide coverage against the liabilities arising on them.
We operate in a dynamic business scenario that gives rise to external and internal riskfactors. We have designed an integrated risk management approach called the ERM frameworkfor risk identification assessment and reporting. To identify key risks to our businessmodel during the course of the year we have conducted a risk management exercise thatassisted the senior management in identification of key risks and selection of most suitedrisk management strategies to manage principal risks effectively. The Board has approvedthe Enterprise Risk Management Policy as part of the ERM framework that covers keybusiness functions processes and units. As required by the ERM Policy the companyinitiates risk identification and control testing exercise to provide briefing andreporting to the Board. The ERM policy is implemented through the Risk ManagementCommittee and various department heads who take the risk ownership and monitor the riskson a periodical basis.
The ERM Framework will enable achievement of strategic objectives by identifyinganalysing assessing mitigating monitoring and governing any risk or potential threat tothese company objectives.
Systematic and proactive identification of risks and mitigation thereof will enableeffective and quick decision making and will boost the performance of the organisation.The ERM framework will act as a decision enabler which not only seeks to minimise theimpact of risks but also enable effective resource allocation based on risk ranking andrisk appetite. Strategic decisions will be taken after careful consideration of risksbased on secondary risks and residual risks.
There are no risks which in the opinion of the Board threatens the existence of theCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis Report which forms part of this Annual Report.
DISCLOSURE ON CONFIRMATION ON THE SECRETARIAL STANDARDS:
Your Directors confirm that the Secretarial Standards issued by the Institute ofCompany Secretaries of India have been duly complied with.
GREEN INTIATIVE IN CORPORATE GOVERNANCE:
In support of the green initiative of the Ministry of Corporate Affairs the Companyhas also decided to send the annual report through email to those shareholders who haveregistered their email id with the depository participant /Company's registrar and sharetransfer agent in case a shareholder wishes to receive a printed copy he/she may pleasesend a request to the Company which will send the annual report to the shareholder.
The Company is providing e voting facility to all members to enable them to cast theirvotes electronically on all resolutions set forth in the Notice. This is pursuant tosection 108 of the Companies
Act 2013 and Rule 20 of the Companies (Management and Administration) Rules 2014. Theinstructions for e-voting are provided in the Notice.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3) (m) of the Companies Act 2013 readwith Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as "Annexure- A".
EXTRACT OF ANNUAL RETURN:
The details forming part of the extract of the Annual Return in form MGT- 9 is placedon the website of the Company at www. kokuyocamlin.com under the Investor RelationsSection and is set out as "Annexure - B" to the report.
PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 of Companies Act 2013 read with Rule5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 inrespect of employees of the Company will be provided upon request. In terms of Section136 of Companies Act 2013 the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the Members at the Registered Office of the Company duringbusiness hours on working days of the Company up to the date of the ensuing Annual GeneralMeeting. If any Member is interested in obtaining a copy thereof such Member may write tothe Company Secretary in this regard.
Your Directors express their gratitude to the members bankers customers financialinstitutions and other business constituents for their continued faith assistance andsupport extended to the Company. Your Directors also sincerely appreciate the high degreeof professionalism commitment and dedication displayed by employees at all levels therebycontributing largely to the growth and success of the Company.
Your Directors also wish to place on record their appreciation for the support andguidance provided by its parent Company Kokuyo Co. Ltd. Japan.
| ||For & on behalf of the Board |
|Place : Mumbai ||Dilip D. Dandekar |
|Dated: 8th May 2019 ||Chairman & Executive Director |