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Kovilpatti Lakshmi Roller Flour Mills Ltd.

BSE: 507598 Sector: Agri and agri inputs
NSE: KLRF ISIN Code: INE014E01015
BSE 00:00 | 18 Jul 54.00 -1.00
(-1.82%)
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NSE 05:30 | 01 Jan Kovilpatti Lakshmi Roller Flour Mills Ltd
OPEN 54.10
PREVIOUS CLOSE 55.00
VOLUME 107
52-Week high 138.00
52-Week low 52.10
P/E 18.95
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 54.10
CLOSE 55.00
VOLUME 107
52-Week high 138.00
52-Week low 52.10
P/E 18.95
Mkt Cap.(Rs cr) 30
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kovilpatti Lakshmi Roller Flour Mills Ltd. (KLRF) - Director Report

Company director report

Dear Shareholders

The Directors present their Fifty Fifth Annual Report together with the auditedstatement of accounts for the year ended 31st March 2017.

(Rs. in Lakhs)
FINANCIAL RESULTS 31.3.2017 31.3.2016
Total Turnover (Net) 21830.29 20690.17
Profit before financial charges and depreciation 1349.66 1810.78
Less: Financial charges 585.20 637.20
Profit before depreciation 764.46 1173.58
Less : Depreciation 263.24 251.56
Profit before tax 501.22 922.02
Add/ Less Provision for tax - Current 181.89 187.99
- MAT credit entitlement (44.56) 44.56
- Deferred tax liabilities 4.84 190.87
Net Profit after tax carried to balance sheet 359.05 587.72

REVIEW OF BUSINESS OPERATIONS

During the year ended 31st March 2017 the Company has recorded a totalturnover of ' 21830 lakhs as against ' 20690 lakhs achieved during the previous year. TheProfit before Interest Depreciation Taxes and Amortization (PBIDTA) amounted to ' 1350lakhs as against ' 1811 lakhs in the previous year. The profit after tax amounted to '359.05 lakhs as against ' 587.72 lakhs in the previous year.

There was no change in the nature of business of the Company during the financial yearended 31st March 2017.

The performance of each business segment of the Company has been comprehensivelydiscussed in the Management Discussion and Analysis Report (forming part of thisDirectors' Report)

FINANCE

Your Company continued to avail need based working capital facilities from Canara Bankand HDFC Bank Limited

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate governance and Management Discussion & Analysis Report which form anintegral part of this Report are annexed to this report. The Company has complied with theconditions relating to Corporate Governance as stipulated in terms of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. The Certificate from thestatutory auditor relating to the above is annexed.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March 2017 was ' 50206440/-.During the year under review the Company has not made any fresh issue of any shares.

TRANSFER TO RESERVES

The Company has not transferred any amount to its General Reserves. However an amountof ' 359.05 lakhs is carried forward in the Profit & Loss Account.

DIVIDEND

Your directors are pleased to recommend a dividend of ' 1/- per share (10%) of facevalue of ' 10/- each for the financial year ended 31st March 2017. The dividendsubject to the approval of the members at the 55th Annual General Meetingconvened on 15th September 2017 will be paid on or before 13thOctober 2017 to those members whose names appears in the Register of Members at theclosure of business hours as on 8th September 2017.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

There is no amount required to be transferred to Investor Education and Protection Fundin accordance with the provisions of the Companies Act 2013 and rules made thereunder.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and administration) Rules 2014is furnished in Annexure-B and is attached to this Report.

BOARD AND COMMITTEE MEETINGS

Details of the composition of the Board and its Committees namely Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee CSR Committeeand of the Meetings held and attendance of the Directors at such Meetings are provided inthe Corporate Governance Report which forms a part of this Report.

DIRECTORS! RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that;

a) In the preparation of the annual accounts the applicable accounting standards havebeen followed.

b) The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the year under review.

c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.

d) The Directors have prepared the annual accounts for the financial year ended 31stMarch 2017 on a going concern basis.

e) 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) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

DECLARATION OF INDEPENDENT DIRECTORS

All the Independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 read withSchedules and Rules issued thereunder and Regulation 25 of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.

REMUNERATION POLICY

The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirRemuneration. The Remuneration Policy is furnished in the Company's website at www.klrf.inabstract of which is furnished as "Annexure - D" and forms part of this report.

STATUTORY AUDITORS

Mr.P.Marimuthu Chartered Accountants the existing Statutory Auditor of the Companywill be completing his term as Statutory Auditors on conclusion of 55th AnnualGeneral Meeting convened on 15th September 2017. The Board place on recordtheir appreciation for services rendered by Mr.P.Marimuthu Chartered Accountant asStatutory Auditor of the Company. The Company is required to rotate the Statutory Auditorson completion of their term as per provisions of the Companies Act 2013. Accordingly interms of provisions of the Companies Act 2013 and the Companies (Audit and Auditors)Rules 2014 the Audit Committee has recommended and the Board of Directors have proposedthe appointment of M/s.Arun & Co. (having Firm Registration Number 014464S)

Chartered Accountant as Statutory Auditors of the Company for a period of fiveconsecutive years from the conclusion of 55th1 Annual General Meeting till theconclusion of 60th Annual General Meeting subject to ratification of the appointment bythe Members at every AGM if so required under the Act. held after this AGM for approvalof the Members.

M/s Haribhakti & Co LLP Chartered Accountants branch auditors for the engineeringdivision of the Company will retire at the forthcoming annual general meeting and areeligible for re-appointment.

COST AUDITOR

The Board of Directors at its meeting held on 31st May 2017 based on therecommendation of the audit committee appointed Mr.P.Mohankumar Cost Accountant as CostAuditor to audit the cost accounts of the Company for the financial year 2017 - 2018.

As required under the provisions of Section 148 of the Companies Act 2013 necessaryresolutions seeking member's ratification for the remuneration payable to Mr.P.Mohankumaris included in the Notice convening the Fifty Fifth Annual General Meeting.

Cost audit report for the year ended 31st March 2017 will be filed on orbefore the due date.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.D. Selvaraj FCS Proprietor of MDS & Associates Company Secretary inPractice Coimbatore to conduct the Secretarial Audit of the Company. The SecretarialAudit Report is annexed herewith as "Annexure-A"

COMMENTS ON AUDITORS REPORT

There are no qualifications reservations or adverse remarks or disclaimers made by theAuditors/ Secretarial Auditor in their/ his report. There were no instances of fraudsidentified or reported by the Statutory Auditors during the course of their audit pursuantto Section 143(12) of the Companies Act 2013.

PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS U/S 186

There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the period under review. Details of investments made in theprior years are given in the notes 9 of the financial statement.

RELATED PARTY TRANSACTIONS

All transactions entered into during the financial year 31st March 2017with related parties as defined under the Companies Act and SEBI (Listing Obligations andDisclosures

Requirements) Regulations 2015 were in the ordinary course of business and on an arm'slength basis. During the year the Company had not entered into any transaction referredto in Section 188 of the Companies Act with related parties which could be consideredmaterial under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015. Accordingly the disclosure of related party transactions as required under Section134(3) of the Companies Act in Form AOC-2 is not applicable. Attention of members is drawnto the disclosures of transactions with related parties set out in Other Notes on Accounts22 (16) forming part of the financial statements.

The Company has developed a policy on related party transactions for identification andmonitoring of transactions. The policy on related party transactions as approved by theBoard is uploaded and can be accessed at company's website www.klrf.in

MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY

No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Directors' Report.

RISK MANAGEMENT

The Company has a structured risk management policy. The risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.

CORPORATE SOCIAL RESPONSIBILITY

The Board had formed a Corporate Social Responsibility Committee comprising ofMr.Suresh Jagannathan Mr.Sudarsan Varadaraj Mr.K.Gnanasekaran and Mr.R. Kannan.

The composition and terms of reference of the CSR Committee are provided in theCorporate Governance Report forming part of this Annual Report. The Company has alsoformulated a CSR Policy which is available on the website of the Company viz. www.klrf.in

The disclosure as per Rule 8 of the Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed as Annexure -E and forms an integral part of this Annual Report

BOARD EVALUATION

The Board has made a formal annual evaluation of its own performance Committees of theBoard Independent Directors and Individual Directors of the Company.

The Board's performance was evaluated based on criteria like structure governancedynamics and functioning and review of operations financials internal controls etc.

The performance of the Independent Directors as well as Individual Directors wereevaluated based on the evaluation criteria laid down under the Nomination and RemunerationPolicy and Code of Conduct as laid down by the Board.

The Committees of the Board were evaluated based on the terms of reference specified bythe Board to the said Committee effectiveness of Committee meetings quality ofrelationship of the Committee and the management etc. The Board of Directors weresatisfied with the evaluation process which ensured that the performance of the Board itsCommittees Independent Directors and Individual Directors adhered to their applicablecriteria.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr.S. Govindan Non-executive Independent Director of the Company retired on 31stMarch 2017 as per the terms of his appointment as Independent Director. Your Directorswish to place on record their sincere appreciation for the valuable contribution made byMr. S. Govindan during his tenure as Director of the Company.

Mr.R. Kannan Executive Director is liable to retire by rotation at the ensuing annualgeneral meeting and being eligible offers himself for re-appointment. The Board recommendshis re-appointment.

Mr. Rajagopal Gopinath was appointed as an additional director at the board meetingheld on 25th January 2017 and pursuant to provisions of section 161 of theAct he holds office till the date of ensuing annual general meeting and is eligible forappointment. A resolution in this behalf is set out at the notice of the annual generalmeeting for his appointment as an Independent Director of the company for a term of fiveyears for member's approval.

A brief resume details of expertise and other Directorships/ Committee membershipsheld by the above Directors form part of the Notice convening the 55th AGM of theCompany.

KEY MANAGERIAL PERSONNEL

Key Managerial Personnel of the Company as required pursuant to Section 203 of theCompanies Act 2013 are Mr.Suresh Jagannathan Managing Director Mr.R. Kannan ExecutiveDirector and Chief Financial Officer and Mr.S. Piramuthu Company Secretary.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company comprises three membersnamely Mr.Sudarsan Varadaraj Mr.K.Gnanasekaran and Mr. Rajagopal Gopinath all of thembeing Independent Directors. Mr.Sudarsan Varadaraj an Independent Director is theChairperson of the Audit Committee.

The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.

The details of the number of meetings held and attendance of Directors at such meetingsare provided in the Corporate Governance Report which forms part of the Annual Report

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO

A. CONSERVATION OF ENERGY

(i) The steps taken or impact on conservation of energy

Company ensures that the manufacturing operations are conducted in the manner wherebyoptimum utilization and maximum possible savings of energy is achieved.

(ii) The steps taken by the Company for utilizing alternate source of energy

The Company has installed 7.00 M.W. wind energy for captive consumption.

(iii) The capital investment on energy conservation equipments.

As the impact of measures taken for conservation and optimum utilization of energy arenot quantitative its impact on cost cannot be stated accurately.

B. TECHNOLOGY ABSORPTION

i) Company's products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required.

ii) EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

No specific expenditure of recurring or capital nature is involved in research anddevelopment directly.

C. FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review your Company has earned foreign exchange of ' 13.39 lakhsand out flow of ' 41.20 lakhs.

SUBSIDIARY COMPANIES

The company does not have any subsidiary associate company or joint venture.

FIXED DEPOSITS

Your company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. Hence thereare no unclaimed or unpaid deposits as on 31st March 2017.

DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014

The requisite details relating to ratio of remuneration percentage increase inremuneration etc. as stipulated under section 197(12) and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed as"Annexure-C" to this Report.

DISCLOSURE UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not apply to the Company as there were no employeeswho are in receipt of remuneration in the aggregate at the rate of not less than '10200000/- if employed throughout the year or ' 850000/- per month if employed forpart of the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil mechanism for directors and employees to reporttheir genuine concerns details of which have been given in the Corporate GovernanceReport forming part of this Annual Report.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records. The Internal AuditReports were reviewed by the Audit Committee. Further the Audit Committee annuallyreviews the effectiveness of the Company's internal control system. The Directors andManagement confirm that the Internal Financial Controls (IFC) are adequate and effectivewith respect to the operations of the Company.

A report of Auditor's pursuant to Section 143(3)(i) of the Companies Act 2013certifying the adequacy of Internal Financial Controls is annexed with the Auditor'sreport.

LISTING

Equity shares of the Company continued to be listed on BSE Limited.

ORDERS BY REGULATORS COURTS OR TRIBUNALS

No significant and/or material orders were passed by any regulator or court or tribunalimpacting the going concern status and the Company's operations in future.

DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy. The Company has not received anysexual harassment complaint during the year 2016 - 2017.

ACKNOWLEDGEMENTS

Your directors acknowledge with gratitude the co-operation and assistance from itsbankers. Your Directors would like to thank all Shareholders Customers and Employees inappreciation of their continued support.

May the Almighty Goddess Lakshmi continue to shower HER choicest blessings and continueto grant us prosperity in the years to come.

By Order of the Board

Sudarsan Varadaraj Suresh Jagannathan
Place : Coimbatore Director Managing Director
Date : 31.05.2017 DIN :00133533 DIN : 00011326