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You can view full text of the latest Director's Report for the company.

BSE: 539450ISIN: INE500L01026INDUSTRY: Personal Care

BSE   ` 205.25   Open: 205.00   Today's Range 203.95
212.45
+0.95 (+ 0.46 %) Prev Close: 204.30 52 Week Range 86.30
226.35
Year End :2022-03 

Your Directors take pleasure in presenting their 66th 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 2022.

In compliance with the applicable provisions of Companies Act, 2013 (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, this report covers the financial performance and other developments during the financial year 2021-22 and upto the date of the Board Meeting held on 25 May 2022 to approve this report in respect of SHK on a standalone basis as well as SHK on a consolidated basis comprising of SHK, its subsidiaries and joint venture. Consolidated SHK has been referred to as "Keva" in this report.

FINANCIAL HIGHLIGHTS & BUSINESS REVIEW Financial Highlights:

(' in Cr)

Particulars

Standalone

Consolidated

2021-22

2020-21

Growth %]

2021-22

2020-21

Growth %

Sales

802.26

756.13

6

1559.60

1315.12

19

Other operating income

4.63

4.88

(5)

4.59

6.83

33

EBITDA

97.69

133.68

(27)

232.14

259.34

(10)

Royalty Expense

17.41

15.72

11

-

0.29

(100)

Finance Costs

3.91

6.28

(38)

16.18

17.07

(5)

Depreciation

27.68

27.63

-

71.77

61.51

17

Profit before Tax (PBT) before exceptional items

66.10

99.77

(34)

144.19

180.76

(20)

Share of profit in equity accounted investee

-

-

-

0.03

0.24

(88)

Profit before Tax (PBT) after exceptional items

66.10

99.77

(34)

132.26

193.50

32

Taxation

23.61

20.06

18

-17.16

49.53

135

Profit after Tax (PAT)

42.49

79.71

(47)

149.42

143.97

4

Business Review:

The Directors are pleased to inform that Keva delivered a steady business performance in FY 2021-22. On a consolidated basis, the total revenues from operations during FY 2021-22 grew by 19% on a year-on-year basis i.e. from ' 1,315.12 crore during the previous year to ' 1,559.6 crore in FY 2021-22. In FY 2021-22, on account of performance of Creative Flavours and Fragrances SpA, on a like-for-like basis, revenues grew by 9% year-on-year. On the profitability front, Keva's prudent inventory management in addition to better product mix enabled it to maintain margins at a healthy level despite the global supply chain and raw material inflation issues, particularly in the second half of the fiscal. Keva's gross margins during the year stood at 41% and EBITDA margins were at 15%. EBITDA was lower by 10%

In the last eight quarters, Keva has consistently delivered steady gross margins within the range of 39% to 44%. This indicates the financial efficiency and stability of Keva's business model. Profit after tax (PAT) during the year stood at ' 149.42 crore.

Excluding exceptional gain and loss in FY 2021-22 and FY 202021, respectively, PAT in FY 2021-22 stood at ' 161.34 crore as against ' 131.47 crore in the previous year, higher by 23% year-on-year. During the year, the Company's debt increased owning to the acquisitions done by the Company pursuant to which the debt equity ratio stood at 0.5X.

On a standalone basis, the Company achieved a topline growth of 6%. EBITDA stood at ' 97.69 Cr and the net profit was ' 42.49 Cr.

The fragrance division delivered an improved performance with fragrance business reporting a healthy growth of 17.97% in revenues. The Company saw improved wins from existing and new large and mid-sized FMCG customers in the domestic markets. In addition, normalisation in demand across domestic and international markets assisted growth. Higher operating leverage resulted in improved profitability.

The flavours division reported a stable performance during the year with an improvement of 14.4% on like-to-like basis in

revenues. The division witnessed steady offtake in domestic and international markets. Margins during the year remained at healthy levels.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company's business in India and abroad, risk management systems and other material developments during the year under review.

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 form an integral part of this Annual Report.

BUSINESS RESPONSIBILITY REPORT

Your Company strives to create value for all stakeholders whilst growing responsibly and sustainably. A detailed information on the initiatives of the Company as enunciated in the 'National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 is provided in the Business Responsibility Report, a copy of which will be available on the Company's website www.keva.co.in. For Business Responsibility Report as stipulated under Regulation 34 of the Listing Regulations, kindly refer to Business Responsibility Report section which forms part of this Annual Report.

DIVIDEND

Your Directors are pleased to recommend a final dividend of 7.5% i.e. ' 0.75/- per equity share on 13,84,20,801 fully paid-up equity shares of face value of '10/- each for the financial year 2021-22.

The list of unpaid dividend declared upto the financial year 2020-21 is available on Company's website www.keva.co.in. Shareholders are requested to check the said list and if any dividend due to them remains unpaid in the said list, can approach the Company for release of their unpaid dividend.

TRANSFER TO GENERAL RESERVE AND CAPITAL REDEMPTION RESERVE

During the year under review, no amount has been transferred to General Reserve of the Company. Company transferred an amount of ' 2.90 crore to Capital Redemption Reserve on Buyback.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

During the year under review, there was no unpaid/unclaimed dividend that was required to be transferred to the Investor Education and Protection Fund (IEPF) Authority of the Central Government of India.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements of your Company for the financial year 2021-22, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounting Standards and as prescribed by Securities and Exchange Board of India (SEBI) under Listing Regulations. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company and its subsidiary / joint venture companies, as approved by their respective Board of Directors.

SUBSIDIARIES AND JOINT VENTURES

As on 31 March 2022, the Company had subsidiaries and joint ventures in India, 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 S.p.A, Italy

(step-down subsidiary)

CFF Labs Srl, , Italy (step-down subsidiary)

CFF Commerciale Srl, Italy (step-down subsidiary)

Keva UK Ltd., United Kingdom

Keva Europe BV, the Netherlands

Keva Fragrance Industries Pte. Ltd., Singapore

V N Creative Chemicals Pvt. Ltd. (step-down subsidiary)

NuTaste Food and Drink Labs Pvt. Ltd. (step-down subsidiary)

Amikeva Pvt. Ltd. (step-down subsidiary)

PFW Aroma Ingredients B.V., the Netherlands (step-down subsidiary)

PT SHKKEVA Indonesia, Indonesia (step-down subsidiary)

Anhui Ruibang Aroma Company Ltd, China (step-down subsidiary)

Keva Italy Srl, Italy (step-down subsidiary)

Nova Fragranze Srl, Italy (step-down subsidiary)

Provier Beheer BV, Netherlands (step-down subsidiary)

Holland Aromatics BV, Netherlands (subsidiary of step-down subsidiary)

Purandar Fine Chemicals Pvt. Ltd. (Joint Venture)

April 07, 2021. Purusant to the said agreement, Keva Italy and CFF have acquired 28% and 42% equity stake of Nova during the year. Nova is an Italy-based company specialized in the fragrance development and marketing with focus on premium customers in hair care/beauty care segments.

This value-accretive and synergistic acquisition is in-sync with Keva's growth strategy to expand its addressable market in Italy and Europe, expand its product offerings and diversify into newer high-margin product segments. This acquisition will further strengthen Keva's business capabilities and enhance its position in the global fragrance industry.

Holland Aromatics B.V.:

During the year, the Company, through Keva Europe B.V., wholly owned subsidiary, has acquired 62% stake in Holland Aromatics B.V., a leading fragrance company in the Netherlands. Holland Aromatics B.V. has presence in Europe, Middle East and Asia. The acquisition was done by acquiring 62% stake of Provier Beheer B.V., holding company of Holland Aromatics B.V. domiciled in the Netherlands. The remaining stake of 38% would be acquired in two tranches in a span of two years, consideration for which would be linked to the performance of Holland Aromatics B.V.

Keva's entry into Europe through acquisition of Creative Flavours & Fragrancs SpA (Italy) in 2018 coupled with establishment of Creative Development Centre in Amsterdam has enabled Keva broaden its consumer understanding and geographical reach in a highly penetrated European fragrance market. The acquisition of Holland Aromatics B.V is in line with Keva's aspiration to be a global company thereby expanding its geographical presence to cater to upcoming Northern Europe requirement.

NuTaste Food and Drink Labs Private Limited:

During the year, the Company, through its wholly owned subsidiary, Keva Flavours Private Limited, has acquired 100% equity stake in NuTaste Food and Drink Labs Private Limited, India ("NuTaste"). Incorporated in year 2006 as a subsidiary of Fuerst Day Lawson Ltd. UK, NuTaste has presence throughout India. NuTaste is in the business of premium grade ingredients and products to the fast growing food and beverage companies with focus on taste and nutrition, natural ingredients and extracts, nutraceuticals etc.

The acquisition accelerates the momentum of Keva's flavour business. It will enable Keva to expand further into the high-potential flavour categories such as syrups, sauces, seasonings, fruit preps and other such premium grade products. The acquisition further brings on-board a solid and reputed customer base across the fast-growing FMCG & QSR space. Overall, the combined capabilities of NuTaste and Keva will add scale, provide cross-selling opportunities, and accelerate growth, going forward.

A statement containing the salient features of the financial statements of the subsidiaries in the prescribed format AOC-1 is appended as Annexure A to this Report. The financial statements of the subsidiaries are available on the website of the Company viz. www.keva.co.in.

The following key developments took place with regards to Subsidiaries and Joint Ventures of the Company:

Keva Fragrances Private Limited, Keva Flavours Private Limited and Creative Falvours and Fragrances SpA are the material subsidiaries of the Company in terms of Listing Regulations.

Keva Italy Srl ('Keva Italy') and Creative Flavours and Fragrances SpA ('CFF') subsidiaries of the Company, entered into an agreement on 07 April 2021 for acquisition of 70% equity stake of Nova Fragranze Srl, Italy ('Nova'). Pursuant to the said agreement, Keva Italy acquired 28% and CFF acquired 42%. In due course, CFF also acquired Keva Italy's 28% stake in Nova. As on date, CFF holds the entire 70% of Nova and therefore, Nova is a wholly owned subsidiary of CFF.

The Company, through Keva Chemicals Pvt. Ltd., step-down subsidiary of the Company, had acquired Fragrance Encapsulation Technology from Tanishka Fragrance Encapsulation Technologies LLP ("TFET LLP") in April 2017. During the year under review, TFET LLP's name has been struck off from the Register of LLPs and this, the said LLP stands dissloved from 01 November 2021.

During the year under review, Company incorporated a new company - Keva Ventures Private Limited (wholly owned subsidiary of S H Kelkar and Company Limited) to venture into new product line in F&F basis. Keva Ventures Private Limited acquired Amikeva Private Limited in February 2022 to venture into celebrity fine fragrance business development.

Keva Flavours Private Limited acquired 100% equity stake of NuTaste Food and Drink Labs Private Limited ('NuTaste') in January 2022.

During the year, Keva Europe BV - wholly owned subsidiary acquired 62% of Provier Beheer BV, holding company of Holland Aromatics BV - a leading fragrance Company in Netherlands.

ACQUISITIONS

Nova Fragranze Srl:

As the Members are aware, Keva Italy S.r.l. ("Keva Italy"), Italy and Creative Flavours & Fragrances S.p.A. ("CFF"), Italy, subsidiaries of the Company had entered into an agreement for acquisition of 70% equity stake of Nova Fragranze S.r.l. ("Nova"), Italy on

Amikeva Private Limited:

During the year, the Company's wholly owned subsidiary, Keva Ventures Private Limited, acquired 100% equity stake in Amikeva Private Limited ('Amikeva') formed to foray into development and marketing of fine fragrances basis emerging trends in European markets and curate new product profile for consumer delight.

Amikeva has been formed by the promoter group of the Company in July 2021 with a share capital of ' 2 lakhs to venture into fine fragrance business in line with Keva's strategy.

SHARE CAPITAL

During the year under review, the Company through tender offer route has bought back 29,00,000 fully paid-up equity shares of ' 10/- each of the Company at a price of ' 210/- per equity share representing 9.64% and 6.65% of the fully paid-up equity share capital and free reserves as per the audited standalone and consolidated financial statements of the Company for the financial year ended 31 March 2022. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity during the year

PUBLIC DEPOSITS

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

PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES PROVIDED

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

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions are placed before the Audit Committee for its approval. During the year under review, the Audit Committee approved transactions through the omnibus mode in accordance with the provisions of the Act and Listing Regulations. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure B to this Report.

DIRECTORS

In terms of applicable provisions of the Act and the Articles of Association of the Company, Mr. Ramesh Vaze will retire by rotation in the forthcoming Annual General Meeting and will be considered for re-appointment because of his eligibility. Brief resume and other details of Mr. Ramesh Vaze, who is proposed to be re-appointed as a Director of your Company, have been

furnished in the explanatory statement to the notice of the ensuing Annual General Meeting.

Mr. Jairaj Purandare ceased to be an Independent Director of the Company with effect from 19 February 2022 pursuant to completion of his tenure as per the provisions of the Act and relevant provisions of the Listing Regulations. Mr. Amit Dalmia stepped down as Non - Executive Director of the Company on 17 May 2022 on account of his other professional commitments. The Board places on record its appreciation for the guidance and support provided by Mr. Jairaj Purandare and Mr. Amit Dalmia during their tenure with the Company.

Mr. Deepak Raj Bindra and Mr. Vasant Gujarathi were appointed as Independent Directors of the Company for a term of five years from 15 December 2021 and 20 February 2022. Mr. Mark Elliott was re-appointed as an Independent Director for second term of three years from 15 December 2021. The aforementioned appointment/re-appointments of the Independent Directors were approved by the members of the Company through Special Resolution passed on 04 December 2021 by way of Postal Ballot.

Ms. Neela Bhattacherjee has been appointed as an Additional Independent Director at the Board Meeting held on 25 May 2022, with effect from 25 May 2022. As per the provisions of Section 160 of the Companies Act, your Company has received a notice from a member specifying their intention to propose the appointment of Ms. Neela Bhattacherjee as Director in the forthcoming AGM.

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 Companies Act, 2013. The Independent Directors have been familiarised with the Company, their roles, rights and responsibilities in the Company etc. The details of the Familiarization Programme are available on the website of the Company www.keva.co.in. All the Independent Directors have given their declaration of independence as required under Section 149(6) of the Companies Act, 2013. This has been noted by the Board of Directors. In the opinion of the Board, Independent Directors fulfil the conditions specified in the Act, Rules made thereunder and Listing Regulations and are independent of the management.

BOARD MEETINGS

During the year, 7 (seven) Board Meetings were convened and held on 27.05.2021, 06.08.2021, 24.08.2021, 29.10.2021, 14.12.2021, 07.02.2022 and 24.03.2022. The particulars of attendance of the Directors at the said meetings are detailed in the Corporate Governance Report of the Company, which forms

a part of this Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and Listing Regulations.

MEETING OF INDEPENDENT DIRECTORS

The Independent Directors of the Company meet without the presence of the Managing Director or Executive Director or other Non-Independent Directors. These meetings are conducted in an informal and flexible manner to enable the Independent Directors to discuss matters pertaining to, inter alia, review of performance of Non-Independent Directors and the Board as a whole, assess the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform its duties. One such meeting was held during the year on 24 March 2022.

COMMITTEES OF THE BOARD

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

Audit Committee

Nomination & Remuneration Committee Corporate Social Responsibility Committee Stakeholders' Relationship Committee 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 BOARD'S PERFORMANCE

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

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

The guiding principles of the policy are to ensure that:

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

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

Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working of the Company and its goals.

In accordance with the Nomination and Remuneration Policy, the Nomination and Remuneration Committee formulates the criteria for appointment as a Director, Key Managerial Personnel and Senior Management, identifies persons who are qualified to be Directors and nominates candidates for Directorships subject to the approval of Board, evaluates the performance of the individual directors, recommends to the Board, remuneration to Managing Director / Whole-time Directors, ensures that the remuneration to Key Managerial Personnel, Senior Management and other employees is based on Company's 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 policy may be accessed on the website of the Company at www.keva.co.in.

KEY MANAGERIAL PERSONNEL

The Key Managerial Personnel in the Company as per Section 2(51) and 203 of the Companies Act, 2013 as on 31 March 2022 are as follows:

Mr. Kedar Vaze - Whole Time Director and Group Chief Executive Officer

Mr. Rohit Saraogi - Executive Vice President and Group Chief Financial Officer

Ms. Deepti Chandratre - Company Secretary & GM - Legal

Ms. Deepti Chandratre ceased to be Company Secretary & GM - Legal of the Company on 30 April 2022. Consequent upon her cessation, Mr. Rohit Saraogi has been redesignated as EVP Group Chief Financial Officer and Company Secretary of the Company with effect from 25 May 2022.

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134 (5) of the Companies Act, 2013, the directors would like to state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed alongwith proper explanation relating 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The directors have prepared the annual accounts on a going concern basis;

e) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) The directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

STATUTORY AUDITORS

Your Company's 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 forms part of the Annual Report. The same is unqualified and when read with notes on financial statements, is selfexplanatory, and hence, does not call for any further comments under Section 134 of the Companies Act, 2013.

COST AUDITORS

In terms of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, M/s. Kishore Bhatia & Associates, Cost Accountants, have been appointed as the Cost Auditors of the company for financial year 2022-23. In accordance with the provisions of Section 148 of the Act read with Companies (Audit & Auditors) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained by the Company. Further, since the remuneration payable to the Cost Auditors is required to be ratified by the shareholders, the Board recommends the same for approval by members at the ensuing annual general meeting.

SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s. Mehta & Mehta, Practising Company Secretaries, were appointed to conduct Secretarial Audit of your Company during FY 2021-22.

The Secretarial Audit Report for the financial year ended 31 March 2022 is unqualified and annexed herewith as Annexure C to this Report.

INTERNAL CONTROL SYSTEMS

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 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 Company's 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. There is a Risk Management Policy in place that is reviewed by the Risk Management Committee from time to time. The major risks identified by the businesses and functions are systematically addressed through mitigating 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 alongwith timely reminders for compliances. This tool enables compliances to be made and tracked by factories and offices of your Company across the country.

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 Vigil Mechanism as envisaged in the Companies Act, 2013, the Rules prescribed thereunder and the SEBI Listing Regulations has been implemented by the Company through the Whistle Blower Policy. The Policy provides for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

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

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 Company's 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 workplace and framework for employees to report sexual harassment cases at 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, Keva's employees and managers are oriented on creating a safe and conducive work culture. During the year, no complaints with allegations of sexual harassment were reported.

STOCK APPRECIATION RIGHTS SCHEME

In terms of SEBI (Share Based Employee) Benefits Regulations, 2014, 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 of your Company.

Your Company had lent ' 75 Crore to SH Kelkar Employee Benefit Trust ("Trust") for making secondary acquisition of equity shares, subject to statutory ceilings. During the year, 60,661 equity shares that had been tendered by the Trust for buy-back, had been bought back by the Company. As on 31 March 2022, Trust held 32,45,768 equity shares representing 2.34% of the paid-up share capital of the Company.

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

CORPORATE SOCIAL RESPONSIBILITY

Your Company's overarching aspiration to create significant and sustainable societal value, inspired by a vision to subserve a larger national purpose and abide by the strong value of trusteeship, is manifest in its Corporate Social Responsibility (CSR) initiatives that embrace the disadvantaged sections of society, especially in rural India. Your Company has adopted a comprehensive CSR Policy that defines the framework for your Company's CSR Programme. The CSR Policy may be accessed on the Company's website at the link: www.keva.co.in.

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

During the year, the Company has spent ' 1.24 Crore on CSR activities. The Annual Report on CSR activities is annexed herewith marked as Annexure E.

CONSERVATION OF ENERGY

Your Company has always considered energy and natural resource conservation as a focus area. The Company's 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 at plants 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 flush water tanks and WTP tank feed water

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

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.

Keva's ingredients and extraction facility at Vapi has been certified with ISO 9001, ISO 14001 and ISO 45001. Facility at Mahad too has 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-up was organized for the employees

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.

The Company took measures like daily disinfection of units, thermal screening during entry and exit, provision of hand sanitizers at workplace, tie-up with hospitals authorized to treat the COVID-19 patients, distribution of masks, sanitisers, immunity boosters to employees across Keva's facilities to ensure health and safety of its employees in light of COVID-19 pandemic.

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. Keva's Creative Centres at Amsterdam, Jakarta, Mumbai, Singapore and Milan (CFF) are continuously striving for innovative creations through research activities. Keva has also established a Food Innovation Centre in Mumbai.

Your Company's 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.

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 Company's objectives, projections, estimates and expectations, may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Although the


FOREIGN EXCHANGE EARNINGS AND OUTGO

The foreign exchange earned in terms of actual inflows during the financial year 2021-22 was ' 26.99 Crores as against ' 17.26 Crores in financial year 2020-21 on a standalone basis. The foreign exchange outgo in terms of actual outflows during the financial year 2021-22 was ' 110.39 Crores as against ' 83.32 Crores in financial year 2020-21 on a standalone basis.

The foreign exchange earned in terms of actual inflows during the financial year 2021-22 was ' 686.10 Crores as against ' 598.65 Crores in financial year 2020-21 on a consolidated basis. The foreign exchange outgo in terms of actual outflows during the financial year 2021-22 was ' 682.46 Crores as against ' 555.51 Crores in financial year 2020-21 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's employees worked relentlessly during the pandemic to ensure that the business kept on going despite the challenges being faced as a result of the pandemic. 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 Companies Act, 2013 read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure F to this Report. Details of employee remuneration as required under provisions of section 197 of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 also form part of this Report. However, as per the provisions of Section 136 of the Companies Act, 2013, the report and accounts are being sent to the Members and others entitled thereto, excluding the said information. 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 Company's robust IT infrastructure includes a Centralised ERP system based on SAP covering business functions across finance, inventory management, procurement and logistics; Qlikview for data analysis; Cupid and BMango - customer project management applications, DarwinBox - an HR platform through which employees across the globe have an easy access to HR related information viz. policies, newsletters, news flash, 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 for overseeing sales projects on real time basis.

ANNUAL RETURN

In accordance with the requirements of Section 92(3) of the Companies Act, 2013, the annual return of the Company in respect of FY 2021-22 has been hosted on the website of the Company on weblinkhttps://www.keva.co.in/investors-categories/fy-2021-2022-2

CONFIRMATIONS

There has been no change in the nature of business of the Company during the Financial Year 2021-22.

During the Financial Year 2021-22, there were no significant and material orders passed by the regulators or Courts or Tribunals which can adversely impact the going concern status of the Company and its operations in future.

There have been no instances of frauds reported by the auditors under Section 143(12) of the Companies Act, 2013 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 2022 and the date of this Directors' 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.

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 Company's 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.