Kohinoor Foods Ltd.
|BSE: 512559||Sector: Agri and agri inputs|
|NSE: KOHINOOR||ISIN Code: INE080B01012|
|BSE 00:00 | 03 May||Kohinoor Foods Ltd|
|NSE 05:30 | 01 Jan||Kohinoor Foods Ltd|
|BSE: 512559||Sector: Agri and agri inputs|
|NSE: KOHINOOR||ISIN Code: INE080B01012|
|BSE 00:00 | 03 May||Kohinoor Foods Ltd|
|NSE 05:30 | 01 Jan||Kohinoor Foods Ltd|
The following report should be read in conjunction with the auditedfinancial statements and notes for the year ended March 31 2020 and the audited financialstatements and notes for the year ended March 312019. This report contains forwardlooking statements which may be identified by their use of words like 'plans' 'expects''will' 'anticipates' 'believes' 'intends' 'projects' 'estimates' or other words ofsimilar meaning. All statements that address expectations or projections about the futureincluding but not limited to statements about the Company's strategy for growth marketposition expenditures and financial results are forward looking statements. Forwardlooking statements are based on certain assumptions and expectations of future events. TheCompany cannot guarantee that these assumptions and expectations are accurate or will berealized. The Company's actual results performance or achievements could thus differmaterially from those projected in any such forward looking statements. The Companyassumes no responsibility to publicly amend modify or revise any forward lookingstatements on the basis of any subsequent developments information or events.
Synonymous with the fine taste of India in its absolute authentic formthe sole objective of Kohinoor Foods Limited since its inception has been to make theworld experience the true Indian flavor. The Company offers an extensive range that catersto consumers' need in all parts of the world - a wide variety of Basmati Rice Ready toEat Curries & Meals Readymade Gravies Cooking Pastes Chutney's Spices andSeasonings to Frozen Breads Snacks & Paneer (Indian Cottage Cheese) healthy grainsedible oils. Today the most powerful brand of the Company "Kohinoor" is ahousehold name in the countries like UK USA UAE Canada Australia Middle EastSingapore Japan Mauritius & other European countries. As of now the brand'Kohinoor' is known worldwide.
Your Directors have pleasure in presenting the 31st Annual Report andthe Audited Annual Accounts of the Company for the Financial Year ended 31st March 2020.
The financial highlights for the year ending 31st March 2020 areasunder:
The Board's Report has been prepared based on the stand alone financialstatements of the Company.
During the Year your company focused on the restructuring of thecompany operations due to various constraint faced due to financial crisis variousmeasures have been taken for reduction of the cost of operation. Despite of the factorsfaced by the company during the year your company remain committed to providing worldclass quality product to its consumer focused in improving operational efficienciesacross its functions and enhancing its reach to the global consumers.
For the financial year under review 2019-20 the contribution made byRice to the Company's business is INR 116.56 million as against INR 3802.80 million inprevious year while the Food Business stood at INR 198.48 million as against INR 193.91million in the last financial year.
The year saw an increase of 2.36% in food business in domestic sales invalue terms in comparison to last year sales. Export market was down due to politicalinstability in countries such as Iraq & Syria including the current pandemic Covid-19and the financial constraint faced by the company.
The existence of Corona Virus was confirmed in the early 2020 andsince then the virus has spread across the world necessitating the World HealthOrganization (WHO) to declare it a global pandemic. This pandemic has caused disruption tocompany businesses and its economic activity across the world.
The accounts of the Company have been declared NPA in 2018 by the banksand a petition was filed before the Hon'ble NCLT Chandigarh by the lead Bankers. As perRBI guidelines the option of moratorium and other benefits could not be availed by theCompany being declared as NPAby Banks.
The Company is in process to have its OTS proposal considered with
the bank. However the same was not accepted on few grounds. Meanwhileas perthe Direction of the Government Company's Lead Bank Oriental Bank of CommerceMerged with PNB and the Company has already placed its request to reconsider its improvedOTS Proposal with consortium Bank. Your company is placing its extreme effort in havingits proposal accepted and implemented in orderto restart its business and will soonimprove its operations.
The pandemic and nationwide lockdown has impacted the industriesacross the country and the world. This had impact on the operating performance of Q4FY20of the Company due to the following factors:
1. The Company and its factories is located at the hot spot city.
2. The Company offshore subsidiaries (in U.S. and U.K.) were underlockdown due to Global pandemic Covid 19.
3. The movement of staff was restricted due to intrastate movement.
With the Covid-19 pandemic and Government announcing lockdown measuresall our places of business including manufacturing plants corporate office OverseasSubsidiaries and warehouses were shutdown. Sales have impacted in the march and theQ1FY2020-21. However our factory could start its operation in the June 2020. With thelockdown in the later part of March 2020 and loss of production sales for the month ofMarch to May was significantly impacted. This had an overall impact on the Q4FY20 andQ1FY21 performance of the company. Though there was no production and sales during theperiod of lockdown the Company had to bear the fixed overheads additional cost towardsprecaution and prevention related to health and safety of the employees attendingplant/offices. The company is trying to get some relief/discounts for some paymentsoutstanding and is in process of negotiation with its customers. The company is facingdifficulties in receipt of payment from its customers in the current scenario which hasimpacted the liquidity position of the Company. However During the year the companythrough its constant effort has managed to reach its global consumers through its whollyowned subsidiary Indo European Foods Limited.
The company is strictly following guidelines provided by Government foroperating the manufacturing facilities. A SOP was prepared for start of operations andprecautions related to Health and safety of employees attending plants / office. Work fromhome has been generally encouraged wherever feasible. The company's manufacturingfacilities were restored during the June 2020 with limited manpower as per approvalsreceived for the respective locations.
Basis the Ministry of Home Affairs Order (40-3/2020- DM-I(A)) datedApril 152020 & April 162020 and various State Government orders and after carefullystudying the provisions thereof in this regard offices were opened in a graded mannerwith effect from June 12020 in Green and Orange zones with minimum staff.
On opening of the offices in the Green and Orange zones it has beenensured that adequate safety measures as prescribed by various government circulars /advisories (which include social distancing wearing of face cover / masks and regularsanitization) were put in place.
Further offices have been opened ensuring minimum attendance asspecified by respective state authorities. Appropriate guidelines have been issued to theemployees in this context.
Following measures are taken at all the plants since re-opening andsmooth functioning:
- Enhanced IT security and increased capacity of IT systems.Preparations were made to ensure that IT systems were in place much before the start oflockdown.
- Postponed all meetings/events of large gatherings and issued advisoryfor travel (both personal and business)
- Circulated precautionary Dos & Don'ts on personal hygiene
- All the employees were given training on the safe practices such associal distancing usage of masks personal hygiene etc.
- All employees are temperature screened and provided masks whileentering the premises. Provided hand wash stations at entrance. Disinfection of all thevehicles entering the premises.
- Disinfection of all touch points frequently and the premises betweenthe shifts.
- Seating at workstations re-organized to ensure social distancing.
- Social distancing maintained in production lines office areas andcanteen.
- Mandated all staff to install Arogya Setu App.
- Self-declaration Obtained from all employees Subsidiaries/JointVenture
Indo European Foods Limited (IEFL) was incorporated in year 2000 inUnited Kingdom (UK) as a wholly owned subsidiary of Kohinoor Foods Limited (KFL) Indiato caterthe markets of UKand Europe.
IEFL Sales show marginal decreases from last year i.e GBP 20.28 Millionin comparison of last year GBP 21.80 Million. Due to improved margins and effective costcontrol. IEFL earned a total profit of GBP 0.65 Million in comparison of last year loss ofGBP 1.06 Million. This operation continues to focus on profitable growth both
in Rice and processed food range of products.
IEFL has created a wide network of distribution for our Rice &Processed food items in UK market.
IEFL in recenttimes has focused more on Kohinoor processed foodproducts. Kohinoor cooking sauces and ready meals are currently listed and placed withprestigious multiple retail chains like -Tesco Asda Sainsburys Aldi& Bookers etc.
IEFL marketing team is also focused in improved sales the 'Kohinoor'processed foods having re-launched the sauces & RTE lines in fresh packaging &refurbished recipes.
Kohinoor Foods USA Inc. was incorporated in year 2000 in the state ofNew Jersey USA as a wholly owned subsidiary of Kohinoor Foods Limited (KFL) India tocater to the markets of US & Canada. The brand 'Kohinoor1 is well known inUSA for its quality rice and food items.
However during the current year this company did not carry any businessas their was no export sales for KFL India to US & Canada.
During the year 2019-20 in processed & packaged food products thecompany did the business of around INR198 million as against INR194 million in theprevious year. The food factory has continued its operation effectively inspite ofliquidity probleme which improved our production & revenues from Food Business.
UK Australia USA Canada are major markets for our range processed& packaged food products
Overview - Ready to Eat Industry
The ready-to-eat market in India is expected to expand at a compoundannual growth rate (CAGR) of ~16.24% (based on value) during the 2019-2024 period togenerate a revenue of INR ~68.47 billion by 2024. Revenue in the Ready-to-Eat Mealssegment amounts to US$ 38886m in 2020. The market is expected to grow annually by 5.9%(CAGR 2020-2025). In global comparison most revenue is generated in China (US$142264m in2020). In relation to total population figures per person revenues of US$28.18 aregenerated in 2020. The average per capita consumption stands at 8.7 kg in 2020.Anticipated growth in the market can be attributed to rising urbanization increasingdisposable income of middle-class population and changing taste preferences of Indianconsumers. Ready meals took off in India following the hectic lifestyle of the youngworking population. The even more convenient ready-to-eat products rose in popularitysince they can be consumed without cooking seemingly suited for
busy millennial. Moreover growing demand for quick food and presenceof freshness and high nutritional value in these foods is further aiding growth of Indiaready-to-eat food market. Demand for ready-to-eat food products is recording high growthin metros where a lot of working people don't get enough time to cook proper meals.Additionally longer shelf life and easy availability of ready-to-eat food products isfurther pushing their demand across the country. The most popular ready-to-eat itemsinclude preparations of paneer chana masala rajma masala pavbhaji etc. Rise in demandfor ready-to-eat food products has created the interest among many companies to enter thisspace which is likely to contribute to the growth of the market in the coming years.Furthermore innovation in products offerings sustainable packaging and preference ofsingle serving frozen products aggressive marketing & promotional strategies wouldsteer growth in the marketduring forecast period.
Convenience food is a concept that has been prevalent and popular inthe western countries for a long time now. Globally the demand for ready-to-eat (RTE)food products has been increasing over the last few years on account of busier lifestyleof consumers and their rising income levels. Similar factors are fuelling the growth inthe packaged food sector in India.
The Indian cooking styles have undergone considerable changes over thepast few years owing to the advent of modern technology and several other changes such asurbanization increasing working population increase in female work population and therise of nuclearfamilies. People have been increasingly shifting to ready- to-eat fooditems in order to save the time involved in preparing meals.
With the growing media awareness literacy rates and standard ofliving people have grown more responsive towards the health and hygiene standardsassociated with food products. There has been a shift witnessed in the customers focusfrom price to quality in the recent years particularly in the urban and a few semi-urbanareas. Consumers have been drifting from openly or loosely sold food products to theconsumption of hygienically packaged fortified RTE foods.
A recent survey done by Assocham (Associated Chamber of Commerce andIndustry of India) says about 79 percent of Indian households today prefer to have instantfood due to time constraints. With two working parents and families becoming nuclearpeople prefer authentic nutritious store bought options ratherthan spending hours in thekitchen afterwork. In recent years the focus of the ready-to-eat market has graduallyshifted from just homemakers or students to young professionals and families.
It is found that 76 percent of parents in big cities mostly bothworking with children under the age of five are serving easy-to-
make meals in some form or the other at least 10-12 times every month!No wonder that the RTE market continues to expand at a brisk pace. The market for spreadssauces and dips is now close to US$ 2 billion and growing at 22 percent CAGR. The RTEmeals market is currently valued at INR 23 crore. It grew at a compounded annual growthrate of 3-5 percent in the last five years. According to data research company Nielsenthe breakfast mixes market is growing at 17 percent and is currently pegged at Rs 275crore.
However as fancy as the various breakfast cereals available in themarket might be we crave the satisfaction that only a traditional dish can give. Andhence the traditional brands are coming up with options that are suitable for the Indianpalate. The traditional brands have forayed into items such as bhel bar pot upma pohawhich can be had on the go anytime anywhere. To fulfil the demand of this large sectionof consumers one will find a lot of new RTE brands in the market.
Unlike the giant brands though the new entrants are trying to create aniche category for themselves be it breakfast cereals canned frozen foods spreadschutneys and so on. Companies are looking to attract consumers within areas like oliveoil spreads and ready meals by offering promotions new product developments health andnutritional benefits and attractive packaging.
The Indian consumer behavior has been influenced by exposure to othercultures primarily in the West through travels and popular literature. The ready-to- eatmarket is somewhat saturated in the West hence developing countries like India areattracting the majority of big players in the promise of a high growth opportunity. Thebooming food sector multiple food outlets the popularity of international brands anddistinctive distribution channels adopted by players are expected to help the market growat a continuous pace.
Consumers are increasingly realizing that majorly RTE foods are loadedwith preservatives for a longer shelf life. Increasing health awareness particularly inthe young generation is hindering the growth of this market. Still a large Indianpopulation is price sensitive and therefore the price factor of RTE food makes themaffordable only to select economic classes of the society. Hence it becomes all the moreessential for new players in this field to marry convenience with health benefits toensure convenience food does not mean compromising on quality. The key is to provide RTEfood options focused on Indian taste for everyday consumption which are is not harmful inthe long run.
This is the challenge taken up specifically by food tech start-ups whowant to be considered as serious players and are getting into the game after years ofR&D. With state of the art technology in packaging and processing to ensure the endproduct is not just a
world class product that can eventually be on the shelves in countriesacross the globe but a product that is a strong contender in being a game changer.
The Indian food and grocery market is the world's sixth largest withretail contributing 70 percent of the sales. The Indian food processing industry accountsfor 32 percent of the country's total food market one of the largest industries in Indiaand is ranked fifth in terms of production consumption export and expected growth. It isbelieved that the Food Processing industry will be a US$ 25 billion market in India by2020. Out of which the serviceable metro market is expected to be close to almost US$ 20billion. The past couple of years have seen a tremendous growth of this segment due tohigh consumer acceptance for convenience food nationwide.
Convenience food is a concept that has been prevalent and popular inthe western countries for a long time now. Globally the demand for ready-to-eat (RTE)food products has been increasing over the last few years on account of busier lifestyleof consumers and their rising income levels. Similar factors are fuelling the growth inthe packaged food sector in India.
Increased employment opportunities have increased migration of peoplefrom tier 1 and tier 2 cities to metropolitans which is an important driver for RTE foodproducts in the country. Nuclear families and bachelors residing in metros for study oremployment purpose are among the major consumers of RTE food products in India. The numberof working women is particularly on the rise which is again driving the demand. All thesefactors are creating significant awareness about ready meals among consumers. Growth inretail chains and outlets is also adding to the product awareness among consumers in thecountry's supermarkets convenience stores and hypermarkets which are emerging as thekey points-of-sale for offering a wide range RTE food products.
Basmati rice considered the finest variety of rice is grown only oncea year in the Indo-Gangetic plain. It is a kharif crop sowed in May-June and harvested inOctober-November. Basmati rice can only be cultivated in India and Pakistan which makesthem the sole supplier of basmati in the world. India accounts for over 70% of the world'sbasmati rice production Rice is one of the most crucial food crops in the world and astaple diet for nearly half the global population. Over 90% of the global rice output andconsumption is centered in Asia wherein the world's largest rice producers China andIndia are also the world's largest rice consumers. High domestic consumption andrestrictive trade policies of several countries for rice have restricted internationaltrade of rice to only 67% of the production. Food security objectives and the need toprovide income support to domestic producers are the main
reasons cited by countries to restrict rice imports. Among the severalvarieties of rice basmati rice is considered the most superior in terms of productcharacteristics and therefore the most premium. The Indian rice industry consists of bothbasmati rice and non-basmati rice; however this note covers only the basmati rice industryin India.
India is among the top five rice-producing nations which include ChinaIndonesia Bangladesh and Vietnam in the list. India produces above 23% of overall globalrice production. Indian rice market is primarily dominated by unorganized sector becauseof the presence of several local players and the easy availability of rice through smallretail stores which are also called as Kirana stores. The rice production is projected toregister a CAGR of 2.7% during the forecast period 2020-2025.
The organized industry has started making a mark in the last couple ofyears as the targeting Tier 1 and 2 cities where the urbanization have increased. Thereport consists of a various segment of the rice market in India like basmati packed andfurther segmented into its types. There is a complete trade analysis with current markettrends. This will help with a market share of top-performing companies present in thecompetition.
India's rice production as well as the consumption has increased overthe years and also there is an involvement of many top companies which have evolved theorganized rice industry. Along with the production India is also the top rice exportingnation that nearly exports 25% of global rice export. Overall India's rice export isdominated by basmati rice as India being the highest producer of basmati rice globally.Iran and Saudi Arabia are the largest importer of basmati rice from India and contributethe highest value share in India's overall basmati rice export.
Indian domestic rice market has grown at the CAGR of above 4% from inthe last five years. Domestically in India's rice market non- basmati rice holds the moresignificant portion as compare to basmati rice as the production of basmati rice islimited to only several states but is considered in the premium segment of rice. Theunorganized dominated market is now shifting towards an organized market which is growingnearly at a CAGR of 12% consumer awareness and increasing urbanization are playing anessential role in developing the packed rice market in India. Packed rice market in Indiais highly dominated by basmati rice and with the new health rice segments like brown riceand organic rice whose demand have increased in recent years.
During the last two decades evolved varieties of basmati rice havebeen adopted by the industry especially PUSA1121 which has led to a significantimprovement in yield and hence the overall production of basmati rice in the country.Moreover this variety has
significantly replaced the traditional varieties of basmati rice. TodayPUSA 1121 accounts for most of basmati rice production and exports. Apart from PUSA 1121a new variety PUSA 1509 has been approved which has better yield low input requirementsand better disease resistance; however its acceptance by the industry is yet to beestablished.
The global basmati rice market is being aided by the rising exportdemand for rice globally. Basmati rice accounts for 2.1 % of the total rice production.In 2019 the global production of rice reached almost 497.76 million metric tons.
The Asia Pacific is the leading producer of rice globally. The regionaccounts for almost 90% of the global production. China is the leading rice producerfollowed by India. However basmati rice specifically is primarily grown in India andPakistan. India is the largest producer of basmati rice accounting for over 70% of itsoutput in the global basmati rice market. In 2018 its production attained almost 5.03million tons. The country is also the leading exporter of basmati rice. The country'sexport of the basmati variety of the paddy crop to reach a peak at INR 30000 crore inFY2019. The strengthening exports is a combined result of an increasing demand from Iranand the rise in prices that have been taking place over the last three years. HaryanaPunjab Himachal Pradesh Uttarakhand Uttar Pradesh Jammu and Kashmir and Delhi are themajor basmati rice producing states in India. In Pakistan the Punjab province is thelargest producer of the paddy crop.
The Middle East and Africa is a significant consumer of basmati ricewhich accounts for 37.5% of their total consumption of the paddy crop. GCC countries arethe major importers of the basmati variety of the paddy crop. The steady increase inimports from Saudi Arabia and Iran is driving the rise of Indian exports of basmati rice.Iran was followed by Saudi Arabia and the United Arab Emirates as the other significantimporting countries of the basmati variety from India. Algeria Somalia and Kenya are themajor importing countries in Africa. Europe and the US are also significant consumers ofthe basmati variety.
The global basmati rice market is being aided by the superior qualitytaste and aroma of the product which are driving the consumer preference for theproduct. The basmati variety forms an integral part of the Middle Eastern cooking. It isused to cook lavish dishes which contain layers of rice meats and dried fruits. It alsoforms a part of the staple diet of many cultures thus further aiding the industrygrowth. The increasing export demand from the Middle Eastern countries is also propellingthe global basmati rice market forward. The US and Europe too are significant importingcountries.
The rising population is also acting as a catalyst for the growth ofthe global basmati rice market. The increasing disposable income in the major consumingnations is driving the market growth. The rising disposable income is leading to increasedconsumption of premium products and thus is providing further impetus for the globalbasmati rice market growth as basmati rice is perceived as a premium variety. With theincreasing health consciousness among the consumers the basmati variety is beingincreasingly preferred due to being rich in nutritional value and having a lower fatcontent.
The current scenario is expected to continue in the near term andexporters are likely to continue facing financial stress in the near term. Weak salesgrowth and decline in profitability along with inventory losses are expected to be thekey trends in the financials (to be reported) of basmati rice players in 2019-20. This isexpected to further weaken the leverage profile of industry players. Any improvement inthe situation is likely only from the next basmati paddy harvest season that is thesecond half of 2020-21. In the meantime supply of basmati paddy is expected to witnesssome moderation as farmers are likely to shift away from basmati given thenon-remunerative prices in the last two crop cycles. Moreover demand is also expected towitness some improvement going forward.
Risks & Concerns
The Banks have classified the Company's Accounts as Non PerformingAsset and served Notice under section 13(2) of The Securitization and Reconstruction ofFinancial Assets and Enforcement of Security Interest Act 2002 in the month of July 2018to March 2019 and in the month of February 2020 to September 2020. The Company has repliedto said notices and negotiating with different workable options.
The Banks have filed petition against Company before Hon'ble NCLT BenchChandigarh the company is contesting the matter and the petition is yet to be admitted.
The Company has received an ex parte interim order from Debt RecoveryTribunal-Ill Delhi dated 25/06/2020 restraining the company from transferring/ alienatingor otherwise dealing with or disposing off or encumbering or creating any third partyinterest with respect of the hypothecated assets/immovable properties of the Company untilfurther orders. The company is contesting the matter against the ex parte interim order.
The observations of the Auditor with regard to the managementassessment of the company's ability to continue as going concern in view of the liquidityproblems/decrease in business. The management of the company believes that it can continueas going
concern based on the Resolution plan and after of one time settlementsubmitted to the Banks by company and the interest shown by prospective investors in thecompany.
Macro-economic factors like recession subdued demand and politicaluncertainty may affect the business of the Company and the industry at large as well. TheCompany is aware that uncertainties in business offer opportunities as well as downsiderisks and thus has identified and put in place mitigation tools for the same. Some keyriskareas are:
In a country like India where more than 60 per cent of the area undercultivation is not irrigated farm production is highly vulnerable to fluctuations inrainfall. Beside production risk Indian farmers also face high market risk. Farm harvestprices in the country show high inter and intra year volatility. Price variation is quitepronounced in the regions and commodities where price support mechanism is not operative.Further adequate availability of key raw materials at the right prices is crucial for theCompany. Being a generic natural product with low yield concentrated in a small region ofthe World production of Basmati depends on the vagaries of nature. Therefore anydisruption in the supply due to a natural or other calamity or violent changes in the coststructure could adversely affect the Company's ability to reach its consumers with theright value proposition. However we are ready with plans that might help us at suchtimes. However the Company's long term relationship with farmers built on trust ensuresconstant supply and thus over the years it has not faced any procurement problems. Alsoadequacy of irrigation facilities in the Basmati producing regions mitigates theseuncertainties.
High working capital requirement: Basmati rice requires to beaged for9-12 months before selling leading to huge working capital requirements. This results inlow ROCE for the industry. Combating this risk efficient working capital managementsystem has been set in place by the Company and cash flow is monitored on daily basis.
Intense competition from unorganized sector: Another characteristic ofthis industry is the presence of unorganized sector offering basmati in loose unbrandedform which intensifies competition. The Company is moving towards branded products and hasinvested significantly in building a strong brand which helps in differentiating theirproduct.
Your Directors do not recommend any dividend forthe financial year2019-20.
Re-Appointment / Resignation of Directors
In accordance with the provisions of the Companies Act 2013 Mr.SatnamArora (holding DIN -00010667) Director of the Company retires by rotation at theensuing Annual General Meeting and being eligible offers himself for reappointment. YourDirectors recommend this resolution for approval of the members.
The Re-Appointment and Remunerations of Mr. Jugal Kishore Arora (DIN00010704) Mr. SatnamArora (DIN 00010667) and Mr. Gurnam Arora (DIN - 00010731) had beenapproved by the Shareholders in the 28th Annual General Meeting of the Company held on25th September 2017 for the period of three years subject to the approval of the CentralGovernment. Further the Company had obtained approval from the Central Government in thisregard. Now the Company wants to renew the appointment and remuneration payable to theseManagerial Personnel on the same term and condition as approved by the shareholder intheir Annual General Meeting held on 25th September 2017 for further period of threeyears starting from 1st October 2020 in the forthcoming Annual General Meeting subjectto the overall limit as approved by the Central Government.
Your Directors recommend this resolution for approval of the members.
The Board of Directors of the Company at its meeting held on February13 2020 has appointed Mrs. Mani Chandra Bhandari (DIN 00387585) Mr. Sunil Sharma (DIN08699033) and Mr. Yash Pal Mahajan (DIN 08699040) as an Additional Director who shall holdoffice of the Company till the date of the ensuing Annual General meeting.
The Company has received consent in writing to act as directorsin FormDIR 2 and intimation in Form DIR 8 pursuant to Rule 8 ofthe Companies (Appointment andQualifications of Directors) Rules 2014 to the effect that they are not disqualifiedunder sub section (2) of section 164 ofthe Companies Act 2013. The Board considers thathis association would be of immense benefit to the Company and it is desirable to availthe services as Independent Directors. Accordingly the Board recommends the resolutionNos. 34 & 5 in relation to appointment of Mr. Sunil Sharma (DIN 08699033) Mr. YashPal Mahajan (DIN 08699040)AND Mrs. Mani Chandra Bhandari (DIN 00387585) as IndependentDirectors for the approval by the shareholders ofthe Company.
During the year the Company has received resignation of Mr. S.C. GuptaIndependent Director and Ms. Madhu Vij Independent Director of the Company from Board andCommittees of Kohinoor Foods Limited w.e.f. 28th May 2019 and 11th June 2019
respectively. The Board has accepted the resignation and necessary formhas been filed with Registrar of Companies NCT of Delhi and Haryana.
Appointment / Resignation of Company Secretary
During the year Mr. Ankit Sharma was appointed by the Board ofDirectors as Company Secretary and Manager (Legal) of the Company w.e.f. 13th June 2019.This is to further inform that earlier Mr. Ankit Sharma was designated as AssistantManager Secretarial and Legal of the Company and was handling the Secretarial and Legalfunction of the Company since 17th April 2017. Mr. Ankit Sharma Company Secretary andManager (Legal) (Ex-CS) ofthe Company has voluntarily resigned from the position ofCompany Secretary of Kohinoor Foods Limited effective from 10th July 2019 and necessaryform has been filed in this regard.
During the year Mr. Deepak Kumar Kaushal has been appointed by theBoard of Directors as Company Secretary and Manager (Legal) ofthe Company w.e.f. 14thAugust 2019.
Subsidiary Joint Ventures and Associate Companies
Kohinoor Foods Limited enjoys its global presence and has well managedto build a premium brand name for its quality in Rice Branding and Ready to Eat Food andwith a view of expansion and diversification; it has created subsidiary companies forfacilitating these operations in various countries.
A statement containing the performance and highlights of FinancialStatements of subsidiary associate and joint venture companies is provided in FormAOC-1attached to the Financial Statements forms part of this Report and hence not repeated herefor the sake of brevity.
In accordance with section 129(3) ofthe Companies Act 2013 we haveprepared consolidated financial statements of the Company and all its subsidiaries whichform part of the Annual Report. The Financial Statements have been prepared on thehistorical cost convention on going concern basis and on accruals basis unless otherwisestated. The name of companies which have become or ceased to be subsidiary or jointventure or associate companies if any have been mentioned in the notes to the accounts.The financial statements of Kohinoor Foods Limited ("Holding Company of KFL")together with its subsidiaries (hereinafter collectively referred to as "Group")are consolidated to form Consolidated Financial Statements (CFS). Consolidated FinancialStatements consolidate the financial statements of KFL and its Wholly Owned Subsidiaries.
The parent company has not received audited financial statement fromits Joint venture Company Rich Rice Raisers LLC. The Management considers that the parentcompany is not in position to exercise control over this entitiy. Hence the results ofJoint Venture Company have not been considered in the Consolidated Financial Statements.Rich Rice Raisers LLC in which KFL hold 25% shareholding has closed its operation.
KFL was holding 20% share in Al Dhara Kohinoor LLC and Al DharaKohinoor Industries LLC. Al-Dahra Kohinoor LLC has exercised the call option which KFLhas accepted. Upon completion of the formalities the shareholding of the parent company inboth of these associates has been reduced to NIL and they are not considered as AssociatesCompanies for the Current Year.
In accordance with Section 136 of the Companies Act 2013 the auditedfinancial statement including the consolidated financial statements and relatedinformation of the Company and audited accounts of each of its subsidiaries are availableon our website www.kohinoorfoods.in/investor. These documents will also be available forinspection during business hours at our Registered Office.
Further these Financial Statements have been prepared in accordancewith the Indian Accounting Standards (hereinafter referred to as the 'Ind AS') as notifiedby Ministry of Corporate Affairs pursuant to section 133 of the Companies Act 2013 readwith Rule 3 of the Companies (Indian Accounting Standards) Rules 2015 and Companies(Indian Accounting Standards) Amendment Rules 2016. These financial statements for theyear ended March 31 2020 are prepared under Ind AS. For all periods up to and includingthe year ended March 31 2017 the financial statements were prepared in accordance withthe accounting standards notified under the section 133 of the Companies Act 2013 readtogether with paragraph 7 of the Companies (Accounts) Rules 2014 (hereinafter referred toas 'Previous GAAP') used for its statutory reporting requirement in India immediatelybefore adopting Ind AS.
Furtherthe Policy for determining material subsidiaries as approved bythe Board may be accessed on the Company's website at the link:www.kohinoorfoods.in/investor
The details of business operations / performance of major subsidiariesare as below:
Indo European Foods Limited
Indo European Foods Limited ("IEFL") a wholly owned foreignsubsidiary company which was incorporated and domiciled in the
U.K. and is the manufacture and marketing if specialist rice productscooking sauces ready meals and savoury snacks having its registered office at KohinoorHouse Langer Road Felix stowe Suffolk IP112BW.
Total Turnover of IEFL during FY'20 was 20289026 and profitaftertaxwas653122.
Internal Control System
The Company has in place adequate internal control systems thatfacilitates the accurate and timely compilation of financial statements and managementreports ensures regulatory and statutory compliance and safeguards investor interest byensuring the highest level of governance. The control system ensures that all assets aresafeguarded and protected and that the transactions are authorized recorded and reportedcorrectly.
A CEO and CFO Certificate provided by Jt. Managing Director and CFOincluded in the Corporate Governance Report confirms the existence of effective internalcontrol systems and procedures in the Company Internal audit function evaluates theadequacy of and compliance with policies plans regulatory and statutory requirements.The Internal Auditors directly report to the Board's Audit Committee thus ensuring theindependence of the process. It also evaluates and suggests improvement in effectivenessof risk management controls and governance process. The Audit committee and Boardprovides necessary oversight and directions to the Internal audit function andperiodically reviews the findings and ensures corrective measures are taken. In theopinion of the management and the internal auditors there exists adequate safeguardagainst fraud and negligence within the Company.
Our Offices as well as the manufacturing facilities endorse the highesthealth safety security and environmental standards.
Internal Financial Controls
The Company has in place well defined and adequate Internal FinancialControls which are tested from time to time for necessary improvement if any required.
Listing at Stock Exchange
The Equity Shares of the Company are listed with BSE Limited andNational Stock Exchange of India Ltd. The annual listing fee for the Financial Year2020-21 has been paid by the Company.
Your Company has taken adequate steps to ensure compliance
with the provisions of Corporate Governance as stipulated by the StockExchanges. Pursuant to SEBI (LODR) Regulation 2015 a report on the CorporateGovernance Certificate regarding Compliance Secretarial Audit Report and Jt. ManagingDirector (CEO) and CFO certification along with the Auditors Certificate has been madepart of the Annual Report.
At the twenty-nine AGM held on September 28 2018 the Members approvedappointment of M/s. Rajender Kumar Singal & Associates LLP Chartered Accountants(Firm Registration No. 016379N) as Statutory Auditors of the Company to hold office foraperiod of five years from the conclusion of twenty ninth AGM till the conclusion of thefifth AGM to be held in the year 2023 subject to ratification of their appointment byMembers at every AGM if so required undertheAct.
The requirement to place the matter relating to appointment of auditorsfor ratification by Members at every AGM has been done away by the Companies (Amendment)Act 2017 with effect from May 7 2018. Accordingly no resolution is being proposed forratification of appointment of statutory auditors at the ensuing AGM.
The Company has received the Auditors Report duly signed by M/sRajender Kumar Singal& Associates LLP Chartered Accountants New Delhi and took noteon the same. Further as mentioned in the Auditors Report attention is drawn (Emphasis ofMatters) to notes to the Financial Statements the same has not been reproduced for thesake of brevity as the remarks given by the Auditors are self-explanatory however theBoard has discussed the same in details as had been provided in the notes to the FinancialStatements.
The Cost Auditor M/s Cheena and Associates appointed as CostAccountants of the Company for the year 2019-20 and has completed the audit of the costrecord of the Company. The Cost Audit Report does not contain any qualificationreservation or adverse remark.
The Board pursuant to the provisions of Section 148 and all otherapplicable provisions of the Companies Act 2013 and Companies (Audit and Auditors) Rules2014 (including any
statutory modification(s) or re-enactment thereof for the time beingin force) has approved the appointment of M/s Cheena& Associates Cost AccountantFirm to conduct the audit of the cost records of the Company for the financial year endingon March 31 2020 and remuneration to be paid subject to rectification by shareholders.
The terms of M/s Vinod Aggarwal and Associates Company SecretariesNew Delhi who was appointed as the Secretarial Auditor of the Company for the FinancialYear 2019-20 expired on 31st March 2020. The Board of Directors pursuant to the Provisionof Section 204 of the Companies Act 2013 has appointed M/s. MANK and Associates CompanySecretary Firm (having FCS No. 10248 and CP No. 19684) to conduct Secretarial Audit ofthe Company forthe Financial Year2020-2021.
Secretarial Audit Report
The Secretarial Auditor M/s Vinod Aggarwal and Associates CompanySecretaries appointed for the year 2019-20 and has completed the secretarial audit of theCompany. The Secretarial Audit Report as received from the Practicing Company Secretary isannexed to the Annual Report as Form No.-MR-3. As per the Secretarial Audit Report theCompany has complied with all the applicable acts laws rules and regulations and doesnot contain any qualification reservation or adverse remark.
The terms of M/s SPMG & Co. Chartered Accountants New Delhi whowas appointed as Internal Auditor of the Company for the Financial Year 2019-20 expired on31st March 2020. M/s. NNA & Co. was appointed as Internal Auditor for the FinancialYear 2020-21.
Your Directors on the recommendation of the Audit Committee haveapproved theirappointment in the Board Meeting dated 28th August 2020 forthe financialyear2020-21.
During the year under review the Company has not accepted any depositunder Chapter V of the Companies Act 2013.
Share Capital of the Company
The Company has allotted 5814000 share warrants at a
premium of Rs. 66/- per share to the promoters on preferential basis on04th October 2018 out of these 1830000 share warrants have been converted into equityshares on 04th October 2018. After allotment the Company has filed application forlisting of 1830000 equity shares to the Stock Exchanges (NSE & BSE). However BSE hasclosed the application and approval from NSE is yet to be received. The paid up ShareCapital of the Company is amounting to Rs. 370715300/- comprising of37071530 equityshares of Rs. 101- each.
For the remaining 3984000 Convertible Warrants into Equity Sharesthe company has neither received any request for conversion of Share warrants into EquityShares nor have received any balance sums payable on such conversion option beingexercised by any of the Share Warrant holder within 18 months of issue of such warrants.Therefore as per SEBI (ICDR) Regulations 2009 the consideration therefore paid by suchWarrant Holders at the time of issuance of share warrants stand forfeited.
The Board is headed by an executive Chairman. As on 31 st March 2020the Board of Directors consisted of Seven Directors including Chairman Joint ManagingDirectors Woman Director Independent Director and others.
Six (6) Board Meetings were held during the year 2019-20 i.e. on 29thMay 201913th June 201914th August 2019 (adjourned on 16th August 2019) 04thSeptember 201914th November 2019 and 13th February 2020 and the gap between twomeetings did not exceed 120 days.
Audit Committee Meetings
During the year under review the Audit Committee met Two (2) timesi.e. on 29th May 2019 and 13th February 2020 and the maximum time gap between any twoconsecutive meetings exceeds 120 Days. The minutes of the meetings of the Audit Committeeare noted by the Board. During the year under review the composition of the AuditCommittee was not complete for two consecutive quarters in accordance with the provisionsof the Act due to resignation of Mr. S. C. Gupta on 28th May 2019 and Ms. Madhu Vij on11th June 2019 however the Audit Committee
has been reconstituted on 13th February 2020.
Nomination and Remuneration Committee
During the year under review the Nomination and Remuneration Committeemet One (1) times i.e. on 13th February 2020. The minutes of the meetings of theNomination and Remuneration Committee are noted by the Board. During the year underreview the composition of the Nomination and Remuneration Committee was not complete fortwo consecutive quarters in accordance with the provisions of the Act due to resignationof Mr. S. C. Gupta on 28th May 2019 and Ms. Madhu Vij on 11th June 2019 however theNomination and Remuneration Committee has been reconstituted on 13th February 2020.
On the recommendation of the Nomination and Remuneration Committee theBoard has formulated Remuneration Policy for appointment of Directors Key ManagerialPersonnel Senior Management and their remuneration.
The Remuneration Policy of the Company forms part of this Report andmay be accessed on the Company's website on the link www.kohinoorfoods.in/investor.
Whistle Blower Policy/Vigil mechanism
The Company has established a vigil mechanism for Directors andEmployees to report their concerns about unethical behavior actual or suspected fraud orviolation of the Company's code of conduct or ethics policy or any other grievances thedetails of which are given in the Corporate Governance Report. The Whistle Blower Policymay be accessed on the Company's website on the link www.kohinoorfoods.in/investor.
Particulars of Loan Given Investment made Guarantees given andSecurities Provided
Particulars of loans given investments made guarantees and securitiesprovided under section 186 of the Companies Act 2013 are provided in the notes ofstandalone Financials statement and well within the limit approved by the Shareholders ofthe company.
Present status of litigations
The Board of Trustee of the port of Mumbai has filed a money suit
for recovery of Rs. 9.64 Cr. towards alleged outstanding demurragecharges against which the Company has filed its counter claim of Rs. 10.88 Cr. towards thefinancial losses interest on the investment refund of the license fees refund of thedemurrage charges compensation and damages etc. The matter is still pending.
An appeal before the Sales Tax Commissioner - Appeals New Delhi islying pending in respect of Sales Tax Demand of Rs. 12200000/- on sale of REP Licensesmade in earlier years.
An appeal is lying pending before the Dy. Excise & TaxationCommissioner-Appeal Punjab against the Order received from Excise and Taxation Deptt.Punjab in respect of Year 2009-10 and 2010-11 demanding a sum of Rs.45041414/- towardsthe cess imposed by the State Govt on exports.
The company has challenged the validity of imposition of cess on exportin its appeal as the same is not permissible under article 286 of the Constitution ofIndia. Further demand has been raised for Rs. 541073/- after completing the Sales Taxassessment for AY 2011 -12 against which appeal has been filed.
An appeal before the Customs Excise & Service Tax AppellateTribunal New Delhi has dismissed the the order of Commissioner of Central Excise(Appeals) Delhi -III in respect of additional excise duty of Rs. 4290580/- demanded bythe Excise department in connection of dispute over classification of goods - food productproduced at Bahalgarh Factory- as per the Central Tariff Act. The Hon'ble CETSTAT vide itsorder dated 28/05/2019 has dismissed the aforesaid demand accordingly entire predepositof Rs 19.07L (Approx.) has become due to the company.
During the financial year 2016-17 the company has received an orderfrom Hon'ble Central Excise and Service Tax Appellate Tribunal New Delh (CETSTAT) againstthe order passed by Commissioner of Service Tax (Adjudication) New Delhi demanding aservice tax of Rs.25925214/-. The Hon'ble CETSTAT vide its order dated 16/02/2017 hasgranted major relief of Rs.25012963/-against the aforesaid demand.
The Company has received Notices from the Banks under section 13(2) ofThe Securitization and Reconstruction of Financial Assets and Enforcement of SecurityInterest Act 2002 in the month of July 2018 to May 2019 and in the month of February
2020 to September 2020. The Company has replied/in process to reply thenotices received from the Bank within 60 days from the date of notices. The Oriental Bankof Commerce and Punjab National Bank have served notice of Wilful Defaulter. TheCompany/Directors have replied to the said notices. The Company has also approached Bankswith suitable resolution plan fortheir consideration.
The Company has received Ex-parte Interim Order dated 25.06.2020 fromDebt Recovery Tribunal-Ill Delhi restraining the Company from transferring/ alienating orotherwise dealing with ordisposing off or encumbering or creating any third partyinterest with respect of the hypothecated assets/immovable properties of the Company untilfurther orders. Further the Company has received summon under sub-section (4) of Section19 of the Act read with sub-rule (2A) of rule 5 of the Debt Recovery Tribunal (Procedure)Rules 1993 in the aforesaid matter of ICICI Bank Limited V. Kohinoor Foods Limited andORS to file written statement and to appear before Registrar on 26/09/2020. The Company isin process of filing suitable reply of the aforesaid summon/notices with the respectiveHon'ble court/ authorizes / offices in due course.
The Jt. Managing Director Mr. Satnam Arora of the Company hasreceived a summon/notice from the Directorate of Enforcement Central Regional OfficeGovernment of India New Delhi to appear before them along with various documentpertaining to export of pulses during the period Jan 2006 to Dec 2007. TheDirector/authorized representative of the company is in process to appear and submitrelevant documents before the authorities/ offices /department in due course.
The Company has submitted an offer of One Time Settlement (OTS) to theBanks. The Banks have not accepted the proposal of the Company stating "thesettlement proposal has been declined by competent authority and hence the same has beendisposed off.". Further the Company has requested to the Bank to reconsider thesettlement proposal along with the elaborated One Time Settlement proposal (OTS). OnCompany request to the Banks to relook into the One Time Settlement (OTS) proposal of theCompany the Company has submitted the improved One Time Settlement (OTS) proposal with theBanks which is at present in consideration.
The Company has received Legal Notice from the Punjab National BankHong Kong in regard to outstanding indebtedness due payable within 14 days from the dateof the letter. The Company has replied the Bank within the stipulated time and submittedits OTS proposal and has deposited the up front amount of USD 7000/- towards One TimeSettlement (OTS) Proposal and requested to process the Company OTS Proposal and forwardthe same to their Board/Head Office for approval which is at present in consideration.
The Company has received Arbitration Awards by the Hon'ble ArbitralTribunal comprising of the sole arbitrator Mr. S G Shah Former Judge High Court ofAhmedabad for its debtors and the Company has not received any amount from the partieson due date as per Award. The company is in process of taking suitable action in regard torecovery of amount as per Award.
The Lead Bankers Oriental Bank of Commerce (Now Punjab National Bank)has filed petition under Section 7 of Insolvency and Bankruptcy Code 2016 before theHonbl'e court of NCLT Chandigarh Bench which is not yet admitted.
M/s. Norton Rose Fulbright LLP. has filed petition under Section 9 ofInsolvency and Bankruptcy Code 2016 before the Honbl'e court of NCLT Chandigarh Benchwhich is not yet admitted.
M/s. Uma Polymers Limited has filed petition under Section 9 ofInsolvency and Bankruptcy Code 2016 before the Honbl'e court of NCLT Chandigarh Benchwhich is not yet admitted.
M/s. International Cargo Terminal and Infrastructure Pvt. Ltd. hasfiled petition under Section 9 of Insolvency and Bankruptcy Code 2016 before the Honbl'ecourt of NCLT Chandigarh Bench which is not yet admitted.
M/s. International Cargo Terminal and Rail Infrastructure Pvt. Ltd. hasfiled petition under Section 9 of Insolvency and Bankruptcy Code 2016 before the Honbl'ecourt of NCLT Chandigarh Bench which is not yet admitted.
M/s. JPS Plastics Pvt. Ltd. has filed petition under Section 9 ofInsolvency and Bankruptcy Code 2016 before the Honbl'e court of NCLT Chandigarh Benchwhich is not yet admitted.
All other litigations are mentioned in the note on Contingent Liabilityin the Balance Sheet for the financial year 2018-19.
Contract and Arrangements with Related Parties
In terms of Section 188 of the Act read with rules framed thereunderand Regulation 23 of the Listing Regulations your Company has in place Related PartyTransactions Policy for dealing with related party transactions. The policy may beaccessed under the Corporate Governance section on thewebsite of the Companyat:http://kohinoorfoods.in/pdf/Policy- on-Related-Party-Transactions.pdf. All the relatedparty transactions that were entered and executed during the year under review were onarm's length basis and in the ordinary course of business and within permissible frameworkof Section 188 of the Act and Rules made thereunder read with Regulation 23 of ListingRegulations. There were no materially significant related party transactions made by theCompany during the year that would have required the approval of the shareholders. Thedetails of the transactions with the related parties are provided in the accompanyingfinancial statements. There were no related party transaction made during the year thatare required to be disclosed in the FormAOC-2.
Conservation of Energy Research and Development TechnologyAbsorption Foreign Exchange Earning and Outgo
The particulars as prescribed in sub-section (3) of Section 134 of theCompanies Act 2013 read with Companies (Accounts) Rules 2014 are enclosed asAnnexure Bto this Report.
Particulars of Employees and Related Disclosure
In terms of the provisions of Section 197(12) of the Companies Act2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 a statement showing the names and other particulars ofthe employees drawing remuneration in excess of the limits set out in the said rules aregiven as under:
i) There are no Employee employed throughout the year and in receiptof remuneration of Rs. 10200000/- or more per annum.
ii) There are no Employee employed part of the year and in receipt ofremuneration of Rs. 850000/- or more per month during any part of the year.
Disclosures pertaining to remuneration and other details as requiredunder Section 197(12) of the Companies Act 2013 read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are set out in theannexure-D to this report.
Having regard to the provisions of Section 136(1) read with itsrelevant proviso of the Companies Act 2013 the Board's Report is being sent to themembers without some annexures. The said annexures are available for inspection at theRegistered/ Corporate Office of the Company during working hours and any member interestedin obtaining such annexures may write to the Company Secretary and the same will befurnished free of cost.
Extract of Annual Return
In accordance with Section 134(3)(a) of the Companies Act 2013 theextract of the annual return in Form No. MGT - 9 is enclosed as Annexure C to this Report.
Management's Discussion and Analysis Report
Pursuant to Regulation 34 of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) a Management Discussionand Analysis Report and a Report on Corporate Governance is attached in a separate sectionforming part of the Annual Report.
ACertificate from the Statutory Auditors of the Company regarding theCompliance by the Company of the conditions stipulated in Regulations Part C of Schedule Vof the Listing Regulations is also attached with this report.
A declaration by the Managing Director pursuant to Regulations Part Cof Schedule V of the Listing Regulations stating that all the Board Members and SeniorManagement Personnel of the Company have affirmed compliance with the Code of Conductduring the financial year ended 31st March 2020 is also attached with this report.
Directors' Responsibility Statement
Pursuant to section 134(5) of The Companies Act 2013 the Directorsconfirm that:
a) in the preparation of the annual accounts for the year ended
31st March 2020 the applicable accounting standards read withrequirements set out under Schedule III to the Act had been followed and there are nomaterial departures from the same;
b) 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 as at 31st March 2020and of the profit and loss of the Company for the year ended on that date;
c) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
d) the Directors had prepared the annual accounts on a 'goingconcern'basis;
e) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively; and
f) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
Awards & Recognitions
Since its inception the Company has been earning awards andrecognition like consumer validated Super Brand Award (thrice in series) Reader's DigestMost Trusted Brand award (4 times in a row) Power Brand Award Guinness Book of WorldRecord (for making World's Largest Biryani) National award for Export Excellence BrandEquity Award & manyAPEDAawards.
Corporate Social Responsibility
As per provisions under Section 135 of the Companies Act 2013 allcompanies having net worth of Rs. 500 crores or more or turnover of Rs.1000 crores ormore or a net profit of Rs. 5 crores or more during any financial year are required toconstitute a Corporate Social Responsibility (CSR) Committee of Board of Directorscomprising three or more directors at least one of whom
should be an Independent Director and such Company shall spend 2% ofthe average net profits of the Company made during the three immediately precedingfinancial years.
Accordingly a detailed CSR Policy was framed by the Company with theapprovals of the CSR Committee and Board. The Policy inter alia covers the following:
Modalities of execution of projects/programmes
Implementation through CSR Cell
Monitoring assessmentof projects/programmes
CSR Policy gives an overview of the projects or programmes which areproposed to be undertaken by the Company in the coming years.
The composition of the CSR Committee
A Committee of the directors titled 'Corporate Social ResponsibilityCommittee' was constituted by the Board with the following members:
1. Mr. VijayBurman (Chairman)
3. Mr. GurnamArora
4. Mr. Satish Chand Gupta (Resigned w.e.f. 28th May 2019)
As the Average net Profit/(Loss) of the Company for last threefinancial years prior to 2019-20 comes to average net loss and therefore the Company isnot statutorily required to spent amount as prescribed for CSR expenditure.
Kohinoor also envisions to improve lives in communities we live aroundprotect workplace rights respect people support missions that help people have a betterlife provide good jobs world class quality products and a healthy environment to all ofus around.
At Workplace Kohinoor Foods maintain high standards for fair anddignified treatment of all the people who work for our Company. For all of its employeesit is not just a place to work but like another home and everybody in it like a bigfamily closely bonded with each other.
Kohinoor Foods also believes that a Company is as good as the peoplewho work for it - their combined talents; skills knowledge experience and passion make acompany what it is.
Hence Company's continuous goal is to inspire and motivate its peopleto hone their talents increase their knowledge & skills and achieve extraordinaryresults at their workplace. In this endeavor we have offered subsidized meals to ouremployees at a very nominal cost.
Adherence to global human rights standards No minor labour Fair tradepractices complete Medical facilities for its people Safe & sound workingenvironment are the things that Kohinoor Foods take utmost care about.
The CSR Policy may be accessed on the Company's website at the link:www.kohinoorfoods.in/investor
Disclosure under Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company has zero tolerance towards sexual harassment at theworkplace. The Company has in place a Sexual Harassment Policy in compliance with therequirements of the Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. The Company always endeavors to create and provide an environmentthat is free from discrimination and harassment including sexual harassment. The SexualHarassment Committee has been set up to redress complaints received regarding sexualharassment.
The Directors further state that during the year under review therewere no cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
Declaration by Independent Directors
The Company has received necessary declarations from all the
Independent Directors confirming that they meet the criteria ofindependence as prescribed under Section 149(6) of the Companies Act 2013 and SEBI(Listing Obligations and Disclosure Requirements) Regulation 2015.
In accordance with the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 it is mandatory that the Board shall monitor and reviewthe Board Evaluation Framework. The Companies Act 2013 states that a formal annualevaluation needs to be made by the Board of its own performance and that of its committeesand individual Directors. Schedule IV of the Companies Act 2013 and Regulation 17 (10) ofSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 states that theperformance evaluation of Independent Directors shall be done by the entire Board ofDirectors excluding the director being evaluated.
The Board and the Nomination and Remuneration Committee reviewed theperformance of the individual Directors on the basis of the criteria and framework adoptedby the Board. In addition the performance of Board as a whole and committees wereevaluated by the Board after seeking inputs from all the Directors on the basis of variouscriteria.
In a separate meeting of Independent Directors performance ofNon-Independent Directors performance of Board as a whole and performance of the Chairmanwas evaluated taking into account the views of the Executive Directors and Non-ExecutiveDirectors. The evaluation process has been explained in the Corporate Governance Reportsection of the Annual Report.
Training of Independent Directors
The Company Secretary of the Company conducted a detailed trainingprogramme to provide/update the changes in the SEBI (LODR) Regulation 2015/CompaniesAct 2013 and other relevant act to the Independent Directors.
Further the Company issues a formal letter of appointment toIndependent Directors outlining their roles responsibilities functions and duties as anIndependent Director. The format of the letter of appointment is available on theCompany's website at the link: www.kohinoorfoods.in/investor
Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transactions on
these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividendvoting or otherwise.
3. Issue of shares (including sweat equity shares) to employee of theCompany under any scheme.
4. Issue of Employees Stock Option to employee of the Company under anyscheme.
5. Neitherthe Managing Director northe Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries.
6. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture except as disclosed in theAnnual Report.
1. Business Responsibility Report as per Regulation 34 (2)(f) of SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 describing theinitiatives taken by them from an environmental social and governance perspective is notapplicable to the Company for the financial year 20182019 as per the SEBI CircularSEBI/LAD-NRO/GN/2015- 16/27 dated 22nd December 2015 and Frequently Asked Questionsissued by SEBI on SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015dated 29th January 2016.
Your Directors would like to express their appreciation for theassistance and co-operation received from the Banks Government Authorities CustomersVendors and Members during the year under review. Your Directors acknowledge withgratitude the commitment and dedication of the employees at all levels that hascontributed to the growth and success of the Company.
For and on Behalf of the Board