Mar 31, 2015
To the Members,
The Board of Directors (''Board'') is pleased to present the Twelfth Annual Report of your Company, Kaya Limited, for the year ended March 31, 2015 (''the year under review'', ''the year'' or ''FY15'').
In line with the requirements of the Companies Act, 2013, this report covers the financial results and other developments during April 1, 2014 to March 31, 2015 in respect of Kaya Limited (''Kaya'') and Kaya Consolidated comprising Kaya and its subsidiaries. The consolidated entity has been referred to as ''Kaya Group'' or ''Your Group'' in this report.
FINANCIAL RESULTS - AN OVERVIEW
Consolidated Summary Financials for the Group Year ended March 31,
Revenue from Operations 332.27 290.27
Operating EBIDTA 32.74 11.73
Profit before Tax and Exceptional Items 36.58 5.56
Exceptional Items - Income / (expense) (net) (4.80) 23.13
Profit after Tax 31.78 37.41
Kaya limited - Financials Year ended March 31,
Revenue from Operations 174.08 153.42
Profit before Tax 15.47 39.51
Less: Provision for Tax for the current year (0.02) 5.55
Profit after Tax for the current year 15.49 33.96
Add : Surplus brought forward (70.79) (104.75)
Add : Transfer from Marico Kaya Enterprises Limited pursuant to the 0.06 -
Scheme of Arrangement.
Profit available for Appropriation (55.24) (70.79)
Surplus carried forward (55.24) (70.79)
REVIEW OF OPERATIONS
During FY15 Kaya Limited posted revenue from operations of INR 332.3 Crores, a growth of 14% over the previous year. The business delivered an operating margin of 6% and reported Profit before Tax and exception of INR 36.6 Crores (11% of Net Revenue) as compared to Rs. 5.6 Crores (2% of Net Revenue) over last year. The company has substantially improved its performance on both the Revenue and Profit s.
The Directors have recommended no dividend for the year ended 31st March, 2015.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis forming a part of this Annual Report, inter alia, covers the following:
- Industry structure and development
- Opportunities and Threats
- Segment-wise performance
- Risks and Concerns
- Internal control systems and their adequacy
- Discussion on financial and operational performance
- Material Developments in Human Resources/ Industrial Relations front, including number of people employed.
CORPORATE SOCIAL RESPONSIBILTY ("CSR")
The statutory provisions in respect of CSR as provided under Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014, as on March 31, 2015 are not applicable to the Company.
The Company did not accept any public deposits during the year 2014-15.
SCHEME OF ARRANGEMENT
The Hon''ble High Court of Judicature at Bombay vide its order dated April 18, 2015 had approved the Scheme of Arrangement ("the Scheme") between Marico Kaya Enterprises Limited ("MaKE") and Kaya Limited ("the Company") and their respective Shareholders and Creditors. A copy of the Court order was fled with the Offce of Registrar of Companies, Mumbai, Maharashtra on May 13, 2015 and accordingly the Scheme came into effect from May 13, 2015. In accordance with the Scheme, the entire business and whole of the undertaking of MaKE, was transferred to Kaya so as to become the properties and assets of Kaya with effect from the appointed date viz. April 1, 2014 pursuant to Sections 391 to 394 read with sections 100 to 103 of the Companies Act ,1956 and section 52 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 1956 and Companies Act, 2013. Upon the Scheme being made effective, the Company allotted 1,28,97,100 fully paid up equity shares of face value of INR 10/- each on June 1, 2015 to the entitled shareholders of MaKE in the prescribed share exchange ratio of 1:1, i.e. 1 (One) Equity Share of the face value of INR 10/- each of Kaya, credited as fully paid-up, shall be issued and allotted for every 1 (One) Equity Share of the face value of INR 10/- each held in MaKE as on the record date i.e. May 27, 2015.
LISTING OF EQUITY SECURITIES
The Company has made an application to Securities Exchange Board of India ("SEBI") through the National Stock Exchange of India Limited and BSE Limited vide its letter dated June 12, 2015 for relaxation from the strict enforcement of the requirement of Rule 19 (2) (b) of the Securities Contract Regulation (Rules), 1957 (SCRR)forthe purpose of listing of its equity securities. The application was made in accordance with SEBI Circular No. CIR/CFD/DIL/5/2013dated February 4, 2013 read with circular No. CIR/CFD/DIL/8/2013 dated May 21, 2013. As on date this Directors Report, the Company awaits the fnal listing approval from the National Stock Exchange of India Limited and BSE Limited for commencement of trading of equity shares of the Company.
SUBSIDIARIES OF KAYA LIMITED
The below mentioned companies are the subsidiaries of Kaya as on date of this Report:
1. KME Holdings Pte. Ltd
2. Kaya Middle East DMCC (w.e.f. May 9, 2015)
3. Kaya Middle East FZE
4. DIPL (Singapore) Pte. Ltd
During the year under review, there are no companies which have become subsidiaries or ceased to be subsidiaries of the Company.
Pursuant to first proviso to sub-section (3) of Section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014 and other applicable provisions, if any, a statement covering the salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is annexed to this report as Annexure I.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements forming part of this Annual Report.
RELATED PARTY TRANSACTIONS
All transactions with the related parties entered into during the financial year 2014-15 were at arm''s length and in the ordinary course of business and in accordance with the provisions of Companies Act, 2013 and the Rules made thereunder. Accordingly, no disclosure is made in respect of the Related Party Transactions in the prescribed Form AOC-2 in terms of Section 134 of the Companies Act, 2013.
All transactions with related parties are placed before the Audit Committee for approval. An omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. In case of transactions which are unforeseen and in respect of which complete details are not available, the Audit Committee grants an omnibus approval to enter into such unforeseen transactions provided the transaction value does notexceed Rs. 1 Crore (per transaction in a financial year). The Audit Committee reviews all transactions entered into pursuant to the omnibus approval(s) so granted on a quarterly basis.
The Board approved Policy on Related Party Transactions is uploaded on the website of the Company.
DIRECTOR''S RESPONSIBILITY STATEMENT
To the best of their knowledge and information and based on the information and explanations provided to them by the Company, your Directors make the following statement in terms of Section 134(3)(c) of the Companies Act, 2013 ("the Act"):
that in the preparation of the annual financial statements for the year ended March 31, 2015, the applicable accounting standards have been followed and there are no material departures from the same;
that the Directors have selected such accounting policies and applied them consistently 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 your Company as at March 31, 2015 and of the Profit and loss of your Company for the said period;
that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
that the annual accounts have been prepared on a ''going concern'' basis;
that proper internal financial controls to be followed by the Company were laid down and such internal financial controls are adequate and were operating effectively;
that proper systems to ensure compliance with the provisions of all applicable laws were devised and that such systems were adequate and operating effectively.
A separate section on Corporate Governance is annexed to this Annual Report.
Mr. Harsh Mariwala continues to be the Chairman & Managing Director of the Company. During the year under review, the Members at the last Annual General Meeting of the Company held on September 19, 2014 approved the appointment of Ms. Ameera Shah as Independent Director.
Mr. Nikhil Khattau and Mr. B. S. Nagesh have been appointed on the Board of the Company as Additional Directors with effect from March 30, 2015. Mr. Irfan Mustafa was appointed as an Additional Director on the Board with effect from April 28, 2015.
Your Board of Directors recommends the appointment of Mr. Nikhil Khattau, Mr. B. S. Nagesh and Mr. Irfan Mustafa as Independent Directors of the Company for a term of 5 years each.
The Company has received declarations from the Independent Directors affrming that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and also the Clause 49 of the Listing Agreement.
Dr. Ravindra Mariwala and Mr. Rishabh Mariwala have resigned from the Board of Directors of the Company with effect from April 28, 2015.
Director Retiring by Rotation
As per Section 152 and other applicable provisions of the Companies Act, 2013, Mr. Rajen Mariwala being liable to retire by rotation at the ensuing Annual General Meeting of the Company has offered his contention for re-appointment.
MEETINGS OF THE BOARD OF DIRECTORS IN THE FINANCIAL YEAR 2014-2015
The Board of Directors of the Company ("the Board'''') met 14 times during the year to deliberate on various matters. Details of the meetings held are laid down in the Corporate Governance Report forming part of this Annual Report.
KEY MANAGERIAL PERSONNEL ("KMP''s")
There has been no change in the following Key Managerial Personnel of the Company during the year under review:
- Mr. Harsh Mariwala continues to be the Chairman and Managing Director;
- Mr. Dharmendar Jain is the Chief Financial Offcer of the Company;
- Mr. Subramanian S. is the Chief Executive Offcer, Kaya Business - India
Ms. Almas Badar was appointed as the Company Secretary of the Company with effect from June 19, 2014.
POLICY ON NOMINATION AND REMUNERATION
Your Board has formulated a Policy on appointment, removal and remuneration of Directors, Key Managerial Personnel and performance evaluation of Independent Directors and the Board. Salient features of the Policy are stated in the Corporate Governance Report forming part of this Annual Report.
The Nomination and Remuneration Policy provides for Board Evaluation. The Company has adopted the criteria and framework for Board evaluation and the same shall be implemented by the Board while evaluating their performance.
REMUNERATION OF DIRECTORS AND KMP''S FOR THE YEAR 2014-2015
The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as Annexure II.
DISCLOSURE RELATING TO REMUNERATION
The statement containing particulars of remuneration of employees as required under Section 197(12) of the Companies Act, 2013 read with rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given in an annexure to the Annual Report. In terms of Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to the Members excluding the aforesaid annexure. However, this annexure shall be made available on the website of the Company 21 days prior to the date of meeting of forthcoming Annual General Meeting. This information is also available for inspection by the members at the Registered Offce of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. Any member desirous of obtaining a copy of the said annexure may write to the Company Secretary of your Company.
COMPOSITION OF THE AUDIT AND RISK MANAGEMENT COMMITTEE
The composition of the Committee is stated in the Corporate Governance Report forming part of this Annual Report.
The Committee assists the Board in implementation of risk management policy of the Company and in reviewing the risk management plan. The detailed terms of reference of the Committee is set out in the Corporate Governance Report.
INTERNAL FINANCIAL CONTROLS
The Company practices adequate internal controls with reference to financial statements which are also monitored by the internal auditors. The Company is following all the relevant Accounting Standards for appropriately maintaining the books of accounts. The Internal control systems are designed to guarantee dependability of financial reporting, compliance with policies, procedures, applicable laws and regulations, safeguarding of assets and profcient use of resources.
We have embodied the mechanism in the Code of Conduct of the Company for employees to report concerns about unethical behaviour, actual or suspected fraud or violation of our Code of Conduct. This mechanism also provides for adequate safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases and no personnel have been denied access to the Audit Committee. The Board and its Audit Committee are informed periodically on the cases reported, if any and the status of resolution of such cases.
PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE
As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder, your company has constituted an Internal Committee and the during the year under review, the Committee received two complaints on sexual harassment and the same were disposed of in accordance with the applicable laws.
EMPLOYEES'' STOCK OPTION SCHEME
The Company had formulated and implemented "Kaya Employee Stock Option Scheme 2014 Â KSI" and "Kaya Employee Stock Option Scheme 2014 Â KME" for grant of options to employees of the Company and its subsidiaries respectively. The Schemes are envisaged to reward those employees of the Company and its subsidiaries who contribute significantly to the Company''s Profit ability and shareholders'' value as well as encourage improvement in performance and retention of talent. The Company has successfully passed the requisite resolutions to introduce these schemes and also to sanction the revision in number of options granted and exercise price due to the merger of Marico Kaya Enterprises Limited with the Company.
The details of the Employee Stock Options form part of this report in Annexure III.
The Members at the Eleventh Annual General Meeting had approved the appointment of M/s. Price Waterhouse, Chartered Accountants as Statutory Auditors of the Company for a period of 1 year to hold office from the conclusion of the Eleventh Annual General Meeting until the conclusion of the Twelfth Annual General Meeting. M/s. Price Waterhouse, Chartered Accountants have given their consent and confirmed their eligibility to act as the Auditors of the Company for FY 15-16. Your Board recommends their appointment for a period of 1 year to hold office from the conclusion of the twelfth Annual General Meeting until the conclusion of the thirteenth Annual General Meeting of the Company.
M/s. Ernst & Young LLP, a Chartered Accountant Firm, has been associated with your Company as its internal auditor partnering your Company in the area of risk management and internal control systems.
The Auditors'' Report does not contain any qualification, reservation or adverse remark or disclaimer by M/s. Price Waterhouse, Chartered Accountants.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO
Conservation of energy
The information of Conservation of Energy as required under Section 134(3) (m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 is not applicable to the business segment in which your Company operates.
No technology has been developed and/or imported by way of foreign collaboration.
Foreign exchange earnings and Outgo
The details of Foreign Exchange Earnings and Outgo for the year under review are as follows:
2013 - 2014 2014 - 2015
Foreign exchange earnings and Outgo (Rs. in Crores) (Rs. in Crores)
1. The Foreign Exchange earned in terms of actual inflows during the year. 5.04 4.97
2. The Foreign Exchange outgo during the year in terms of actual outflows. 9.33 18.91
EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of the Section 92 of the Companies Act, 2013 (''''the Act'''') read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return of the Company for the financial year ended 31st March, 2015 is given in Annexure IV to this report.
The Board takes this opportunity to thank all its employees for their dedicated service and frm commitment to the goals of the Company. The Board also wishes to place on record its sincere appreciation for the wholehearted support received from shareholders, bankers and all other business associates. We look forward to continued support of all these partners in progress.
On behalf of the Board of Directors
Place: Mumbai Harsh Mariwala
Date: August 3, 2015 Chairman & Managing Director