The Directors present their Fifty Nineth Annual Report together with the auditedstatement of accounts for the year ended 31st March 2021.
(Rs in Lakhs)
|FINANCIAL RESULTS ||31.3.2021 ||31.3.2020 |
|Total Income ||22480.80 ||23247.34 |
|Profit before finance cost and depreciation ||1390.11 ||1453.80 |
|Less: Financial charges ||422.21 ||592.12 |
|Profit before depreciation ||967.90 ||861.68 |
|Less: Depreciation ||340.63 ||345.97 |
|Profit before tax ||627.27 ||515.71 |
|Add/Less:Income tax expense-Current ||202.00 ||86.10 |
|-Deferred tax charge / (credit) ||(24.62) ||4.53 |
|Profit for the year from operations ||449.89 ||425.08 |
|Other comprehensive Income net of tax ||9.92 ||(10.94) |
|Total comprehensive income for the year ||459.81 ||414.14 |
REVIEW OF BUSINESS OPERATIONS
During the year ended 31st March 2021 the Company has recorded a totalincome of Rs 22481 lakhs as against Rs 23247 lakhs achieved during the previous year.The profit after tax amounted to Rs 450 lakhs as against profit of Rs 425 lakhs in theprevious year. The Profit before Interest Depreciation Taxes and Amortization (EBIDTA)amounted to Rs 1390 lakhs as against Rs 1454 lakhs in the previous year.
There was no change in the nature of business of the Company during the financial yearended 31st March 2021.
The performance of each business segment of the Company has been comprehensivelydiscussed in the Management Discussion and Analysis Report (forming part of thisDirectors' Report).
IMPACT OF THE COVID-19 PANDEMIC ON THE BUSINESS
The operations of the Company were partially affected due to the lockdown and otherdirectives announced by the Central and State Governments to contain the spread of secondwave of Covid-19 pandemic. This will not affect the Company's ability to meet its debt andother financial commitments.
The Company have implemented all necessary standard operating procedures includingvaccination physical distancing sanitization fumigation and other health and safetynorms / guidelines/ directives issued by the Central and State Governments from time totime in the factoriesadministrative & registered office spaces to minimize thehealth risk and to ensure the well being of its employees and to ensure the smoothfunctioning of the operations.
The availability of labour coupled with uncertain and frequently changing situationsprevailing due to the COVID-19 pandemic and the unpredictable market conditions continueto pose challenges. However the management is confident to overcome the crisis and theoverall business operations are expected to improve.
Your Company continued to avail need based working capital facilities from HDFC BankLtd.
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.
The issued subscribed and paid-up equity share capital of the company as on 31stMarch 2021 is Rs 55414760/- divided into 5541476 equity shares of Rs 10/- each.During the year under review the Company has not made any fresh issue of shares orsecurities.
TRANSFER TO RESERVES
During the year under review the Company has not transferred any amount to its GeneralReserves. However the net profit of Rs 459.81 lakhs has been carried forward in theSurplus in Profit & Loss Account.
Your Directors has recommended a dividend of Rs 1.50/- per equity share of Rs 10/- eachfor the financial year ended 31st March 2021 subject to deduction of Tax atSource which if approved at the forthcoming Annual General Meeting will be paid to thoseequity shareholders whose names appear in the Register of Members as on 20thAugust 2021 in respect of shares held in physical form and in respect of shares held indematerialized form the dividend shall be paid on the basis of the beneficial ownershipas per the details furnished by the Depositories for this purpose at the end of businesshours on 20th August 2021
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.
However pursuant to Section 124(6) of the Companies Act 2013 read with theExplanation to Rule 6(1) of the Investor Education and Protection Fund Authority(Accounting Audit Transfer and Refund) Rules 2016 (inserted vide the Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Second AmendmentRules 2019 effective from 20.08.2019) the Company has transferred 59869 shares inrespect of which the dividend relating to the financial year(s) 1999-2000 to 2007-2008 hasalready been transferred to the Investor Education and Protection Fund to the designateddemat account of the Investor Education and Protection Fund Authority (IEPFA) inaccordance with the said provisions.
COPY OF ANNUAL RETURN
As per the requirements of Section 92(3) and rule 12(1) of the Companies (Managementand Administration) Rules 2014 the copy of annual return in the prescribed Form MGT-7 forFY 2020-21 is placed on the website of the company www.klrf.in.
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 Board / CommitteeMeetings are provided in the Corporate Governance Report under relevant heads which formsa part of this Report.
STATEMENT ON COMPLIANCE OF APPLICABLE SECRETARIAL STANDARDS
The Directors have devised proper systems to ensure compliance with the provisions ofall applicable Secretarial Standards and that such systems are adequate and operatingeffectively. The Company has duly complied with Secretarial Standards issued by theInstitute of Company Secretaries of India on the meeting of the Board of Directors (SS-1)and General Meetings (SS-2).
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 2021 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 provision ofall applicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS
All the Independent directors have given declarations to the effect that they meet thecriteria of independence as laid down under section 149(6) of the Companies Act 2013 readwith Schedules and Rules issued thereunder and Regulation 25 of SEBI (Listing Obligationand Disclosure Requirements) Regulations 2015 and that their name is included in the databank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules2014 (as amended).
STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY EXPERTISE ANDEXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THEYEAR
The Board of Directors have evaluated the Independent Directors during the year 2020-21and opined that the integrity expertise and experience (including proficiency) of theIndependent Directors is satisfactory.
The Board based on the recommendation of the Nomination and Remuneration Committeehas adopted a policy which inter alia provides the criteria for selection and appointmentof Directors Senior Management evaluation of the performance of the Directors / KeyManagerial Personnel / Senior Management and the remuneration payable to them. The salientfeatures of the said policy have been outlined in the Corporate Governance Report. TheRemuneration Policy is placed on the Company's website at www.klrf.in and the abstract ofwhich is furnished as "Annexure - C" and forms part of this report.
M/s.Arun & Co (Firm Registration Number 014464S) Chartered AccountantsTirunelveli were appointed as the Statutory Auditors of the Company for a period of fiveconsecutive years from the conclusion of 55th Annual General Meeting held on 15thSeptember 2017 till the conclusion of 60th Annual General Meeting subject toratification of their appointment by the Members at every AGM if so required under theAct. In accordance with the Companies Amendment Act 2017 enforced on 7th May2018 by the Ministry of Corporate Affairs the appointment of Statutory Auditors is notrequired to be ratified at every Annual General Meeting. Hence no resolution forratification of appointment of statutory auditors is included in the Notice convening the59th Annual General Meeting.
M/s VKS Aiyer & Co (Firm Registration No.000066S) Chartered Accountants BranchAuditors of the engineering division of the Company hold their office up to theconclusion of the ensuing 59th Annual General Meeting and being eligible ithas been proposed to re-appoint them as the Branch Auditors for the engineering divisionof the Company to hold such office from the conclusion of the ensuing 59thAnnual General Meeting till the conclusion of the next 60th Annual GeneralMeeting in accordance with the provisions of the Companies Act 2013 and necessaryresolution has been included in the Notice convening the ensuing fifty nineth AnnualGeneral Meeting. Your Directors recommend their re-appointment.
COST AUDITOR AND MAINTENANCE OF COST RECORDS
The Company has made and maintained cost records as prescribed by the CentralGovernment under Section 148 of the Companies Act 2013. The Board of Directors at itsmeeting held on 28th May 2021 based on the recommendation of the auditcommittee appointed M/s P. Mohankumar & Co. Cost Accountants as Cost Auditor to auditthe cost accounts of the Company for the financial year 2021-22.
As required under the provisions of Section 148 of the Companies Act 2013 necessaryresolution seeking members' ratification for the remuneration payable to M/s P. Mohankumar& Co. Cost Accountants is included in the Notice convening the Fifty Eighth AnnualGeneral Meeting. The cost audit report for the year ended 31st March 2021 willbe submitted with the Central Government within the due date.
Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hadappointed Mr. M.D. Selvaraj FCS Proprietor of MDS & Associates Company SecretariesCoimbatore to conduct the Secretarial Audit of the Company. The Secretarial Audit Reportfor the financial year ended 31st March 2021 is annexed herewith as"Annexure-A". The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
COMMENTS ON AUDITORS REPORT
There are no qualifications reservations or adverse remarks or disclaimers made by theStatutory Auditors/ Secretarial Auditor in their 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.
DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OF THECOMPANIES ACT 2013 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT
There were no instances of frauds identified or reported by the Statutory Auditorsduring the course of their audit pursuant to 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 under note 5 of the financial statements.
RELATED PARTY TRANSACTIONS
All transactions entered into during the financial year 31st March 2021with related parties as defined under the Companies Act 2013 and SEBI (ListingObligations and Disclosures Requirements) Regulations 2015 were in the ordinary course ofbusiness and on an arm's length basis. During the year the Company has not entered intoany transaction referred to in Section 188 of the Companies Act with related partieswhich could be considered material under the Companies Act 2013 and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Accordingly the disclosure ofrelated party transactions as required under Section 134(3) of the Companies Act in FormAOC-2 is not applicable. Attention of members is drawn to the disclosures of transactionswith related parties set out in Other Notes on Accounts 44 forming part of the financialstatements.
The Company has formulated a policy on related party transactions for identificationand monitoring of such transactions. The policy on related party transactions as approvedby the Board is available on the company's website www.klrf.in
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
There have been no material changes and commitments which affect the financialposition of the Company having occurred since the end of the year and till the date ofReport.
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
Pursuant to the provisions of Section 135 of the Companies Act 2013 the Board hasconstituted a Corporate Social Responsibility Committee ("CSR Committee")comprising of Mr.Suresh Jagannathan Chairman and Managing Director Mr. SudarsanVaradaraj Mr. K.Gnanasekaran Independent Directors and Mr. R.Kannan Non-ExecutiveDirector as its members.
The detailed composition and terms of reference of the CSR Committee are provided inthe Corporate Governance Report forming part of this Directors' Report. The Company hasalso formulated a CSR Policy which is available on the website of the Companyviz.www.klrf.in
The Annual Report as per Rule 8 of the Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is annexed as Annexure D and forms an integral part of thisReport.
The Board has made a formal annual evaluation of its own performance Committees of theBoard and every Individual Directors including the Independent 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. Further the Independent Directorsat their exclusive meeting held during the year has reviewed the performance of the Boardas a whole its Chairman and Non-Executive Non-Independent Directors and other items asstipulated under Schedule IV of the Companies Act 2013 and the Listing Regulations.
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
Based on the recommendation of the Nomination and Remuneration Committee Mrs. KalyaniJagannathan (DIN: 02371318) was re-appointed as Independent Director of the Company forthe second term of 5 consecutive years effective from 16th September 2020 to15th September 2025 with the approval of the members by means of passing aspecial resolution through postal ballot process on 6th August 2020.
Mr. Sudarsan Varadaraj (DIN: 00133533) had resigned as Non-Executive Non-IndependentDirector of the Company with effect from 18th November 2020 for the purpose ofhis appointment as an Independent Director of the Company. Being eligible for appointmentas an Independent Director as per the criteria laid down under Section 149(6) of theCompanies Act 2013 read with Regulation 16(1)(b) of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and based on the recommendation of theNomination and Remuneration Committee Mr. Sudarsan Varadaraj (DIN: 00133533) wasappointed as an Independent Director of the Company for the second term effective from 21stDecember 2020 to 17th September 2024 with the approval of the members bymeans of passing a special resolution through postal ballot process on 21stDecember 2020.
Mr. R.Kannan (DIN : 00951451)Non-Executive Director of the Company retires byrotation at the ensuing annual general meeting and being eligible he has offered himselffor re-appointment. The Board recommends his re-appointment.
KEY MANAGERIAL PERSONNEL
Based on the recommendation of the Nomination and Remuneration Committee Mr. SureshJagannathan (DIN: 00011326) Managing Director was designated as Chairman and ManagingDirector of the Company by the Board of Directors with effect from 18thNovember 2020. Further based on the recommendation of the Nomination and RemunerationCommittee and the approval of the Audit Committee the Board of Directors and the membersof the Company Mr. Suresh Jagannathan (DIN: 00011326) was re-appointed as the Chairmanand Managing Director for a further period of 3 years effective from 12thMarch 2021.
Based on the recommendation of the Nomination and Remuneration Committee and theapproval of the Audit Committee and the Board of Directors Mr. Sharath Jagannathan (DIN:07298941) was appointed as Director and designated as Whole-time Director of the Companyfor a period of 3 years with effect from 25th January 2021 with the approvalof the members by means of passing a special resolution through postal ballot process on21st December 2020.
Other than the above there is no change in the composition of the Board of Directorsand the Key Managerial Personnel of the company.
Mr. J. Kanna is the Chief Financial Officer and Mr. S. Piramuthu is the CompanySecretary and Compliance Officer of the Company.
Pursuant to Section 177 of the Companies Act 2013 and Regulation 18 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasconstituted an Audit Committee comprising of four members namely Mr.Sudarsan VaradarajMr.K.Gnanasekaran Mrs.Kalyani Jagannathan and Mr.Ashwin Chandran all of them beingIndependent Directors. Mr.K.Gnanasekaran an Independent Director is the Chairman of theAudit Committee.
The Board had accepted all the recommendations of the Audit Committee whenever made bythe said Committee during the year.
The details of composition of the Audit Committee the number of meetings held duringthe year under review and the attendance of Directors at such meetings are provided in theCorporate Governance Report which forms part of the Directors' 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 MW wind energy for captive consumption.
(iii) The capital investment on energy conservation equipment.
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 absorption is 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 OUTGO
During the year under review your Company has earned foreign exchange of Rs 182.56lakhs and no outflow of foreign exchange.
The company does not have any subsidiary associate company or joint venture.
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 2021.
Further the details of the unsecured loans accepted by the Company from its Directorshas been disclosed under the relevant notes to the financial statements.
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) Rules2014 are annexed asAnnexure-B 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 Rs10200000/- if employed throughout the year or Rs 850000/- per month if employed forpart of the year.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
Your Company has established a vigil mechanism and adopted a Whistle Blower Policy inaccordance with provisions of the Companies Act 2013 and Listing Regulations to providea formal mechanism to the employees to report their concerns about unethical behaviouractual or suspected fraud or violation of the Company's Code of Conduct. The WhistleBlower Policy provides for adequate safeguards against victimization of employees whoavail of the mechanism and also provides for direct access to the Chairman of the AuditCommittee. During the year under review no concerns were received by the Company. Thedetails of the said policy have been given in the Corporate Governance Report forming partof this Directors' Report and also it has been placed on the Company's website viz.www.klrf.in.
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 Section143(3)(i) of the Companies Act 2013 certifying the adequacy of Internal FinancialControls is annexed with the Auditor's report.
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.
DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY ANDBANKRUPTCY CODE 2016 DURING THE YEAR
No applications have been made and no proceedings are pending against the Company underthe Insolvency and Bankruptcy Code 2016 during the year under review.
DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIMESETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIALINSTITUTIONS ALONG WITH THE REASONS THEREOF
The disclosure under this clause is not applicable as the Company has not undertakenany one-time settlement with the banks or financial institutions during the year underreview.
DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has put in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at the Workplace (Prevention Prohibition& Redressal) Act 2013. An Internal complaints Committee (ICC) has been setup toredress the complaints received regarding sexual harassment of women at workplace. Allemployees (permanent contractual temporary and trainees) are covered under this policy.The Company has not received any complaint under the said Act during the year 2020-21.
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 ||Chairman and Managing Director |
|Date : 28th May 2021 ||DIN : 00133533 ||DIN : 00011326 |