The Directors present their Fifty Sixth Annual Report together with the auditedstatement of accounts for the year ended 31st March 2018.
(Rs. in Lakhs)
|FINANCIAL RESULTS ||31.3.2018 ||31.3.2017 |
|Total Income ||21998.18 ||22756.40 |
|Profit before finance cost and depreciation ||1129.00 ||1380.44 |
|Less: Financial charges ||718.00 ||571.12 |
|Profit before depreciation ||411.00 ||809.32 |
|Less : Depreciation ||307.62 ||258.15 |
|Profit before tax ||103.38 ||551.17 |
|Incom tax expense - Current ||102.00 ||195.88 |
|- Deferred tax charge / (credit) ||(156.61) ||(22.05) |
|Profit for the year from continuing operations ||157.99 ||377.34 |
|Profit/ (loss) from discontinued operations before tax expense ||- ||(42.28) |
|Tax charge/ (credit) from discontinued operations ||- ||(13.98) |
|Profit / (loss) from discontinued operations ||- ||(28.30) |
|Profit for the year ||157.99 ||349.04 |
|Other comprehensive income net of tax ||(12.64) ||(3.80) |
|Total comprehensive income for the year ||145.35 ||345.24 |
CHANGE OF NAME
The Company has changed its name from "KLRF Limited" to "KovilpattiLakshmi Roller Flour Mills Limited" vide fresh certificate of incorporation dated 11thApril 2018 .
REVIEW OF BUSINESS OPERATIONS
During the year ended 31st March 2018 the Company has recorded a totalturnover of Rs. 21971 lakhs as against Rs. 22730 lakhs achieved during the previousyear. The profit after tax amounted to Rs. 158 lakhs as against Rs. 349 lakhs in theprevious year. The Profit before Interest Depreciation Taxes and Amortization (EBIDTA)amounted to Rs. 1129 lakhs as against Rs. 1380 lakhs in the previous year.
There was no change in the nature of business of the Company during the financial yearended 31st March 2018.
The performance of each business segment of the Company has been comprehensivelydiscussed in the Management Discussion and Analysis Report (forming part of thisDirectors' Report)
Your Company continued to avail need based working capital facilities from Canara Bankand HDFC Bank Ltd. We have been sanctioned a term loan for modernisation of theengineering division by HDFC Bank Ltd.
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 paid up Equity Share Capital as on 31st March 2018 was Rs.55414760/-. During the year under review the Company has issued and allotted 520832equity shares of Rs. 10/- each at Rs. 96/- per share to Promoters of the company onpreferential basis.
TRANSFER TO RESERVES
The Company has not transferred any amount to its General Reserves. However an amountof Rs. 157.99 lakhs is carried forward in the Profit & Loss Account.
Your directors are unable to recommend a dividend on the paid-up equity share capitalof the company for the year ended 31st March 2018.
TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
There is no amount required to be transferred to Investor Education and Protection Fundin accordance with the provisions of the Companies Act 2013 and rules made thereunder.
EXTRACT OF ANNUAL RETURN
The extracts of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and administration) Rules 2014is furnished in "Annexure-B" and is attached to this Report.
BOARD AND COMMITTEE MEETINGS
Details of the composition of the Board and its Committees namely Audit CommitteeNomination and Remuneration Committee Stakeholders Relationship Committee CSR Committeeand of the Meetings held and attendance of the Directors at such Meetings are provided inthe Corporate Governance Report which forms a part of this Report
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134(3)(c) of the Companies Act 2013 withrespect to Directors' Responsibility Statement it is hereby confirmed that;
a) In the preparation of the annual accounts the applicable accounting standards havebeen followed.
b) The Directors have selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for the year under review.
c) The Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities.
d) The Directors have prepared the annual accounts for the financial year ended 31stMarch 2018 on a going concern basis.
e) The Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
f) The Directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.
DECLARATION OF INDEPENDENT DIRECTORS
All the Independent directors have given declarations that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 read withSchedules and Rules issued thereunder and Regulation 25 of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.
The Board has on the recommendation of the Nomination and Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirRemuneration. The Remuneration Policy is furnished in the Company's website at www.klrf.inand abstract of which is furnished as "Annexure - D" and forms part of thisreport.
M/s.Arun & Co (Firm Registration Number 014464S) Chartered Accountant StatutoryAuditor of the Company were appointed for a period of five consecutive years from theconclusion of 55th Annual General Meeting till the conclusion of 60th AnnualGeneral Meeting subject to ratification of their appointment by the Members at every AGMif so required under the Act. In accordance with the Companies Amendment Act2017enforced on 7th May 2018 by the Ministry of Corporate Affairs theappointment of Statutory Auditors is not required to be ratified at every Annual GeneralMeeting.
M/s VKS Ayier & Co Chartered Accountants was appointed by the Board as branchauditors for the engineering division of the Company
The Board of Directors at its meeting held on 25th May 2018 based on therecommendation of the audit committee appointed Mr.P.Mohankumar Cost Accountant as CostAuditor to audit the cost accounts of the Company for the financial year 2018 - 2019.
As required under the provisions of Section 148 of the Companies Act 2013 necessaryresolutions seeking member's ratification for the remuneration payable to Mr.P.Mohankumaris included in the Notice convening the Fifty Sixth Annual General Meeting.
Cost audit report for the year ended 31st March 2018 will be filed on orbefore the due date.
The Company is in compliance with the applicable Secretarial Standards on Meetings ofthe Board of Directors (SS - 1) and General Meetings (SS - 2) issued by The Institute ofCompany Secretaries of India.
Pursuant to provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr.M.D.Selvaraj FCS Proprietor of MDS & Associates Company SecretariesCoimbatore to conduct the Secretarial Audit of the Company. The Secretarial Audit Reportis annexed herewith as "Annexure-A"
COMMENTS ON AUDITORS REPORT
There are no qualifications reservations or adverse remarks or disclaimers made by theAuditors/ Secretarial Auditor in their/ his report. There were no instances of fraudsidentified or reported by the Statutory auditors during the course of their audit pursuantto Section 143(12) of the Companies Act 2013.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS U/S 186
There were no loans guarantees or investments made by the Company under Section 186 ofthe Companies Act 2013 during the period under review. Details of investments made in theprior years are given in the notes 5 of the financial statement.
RELATED PARTY TRANSACTIONS
All transactions entered into during the financial year 31st March 2018with 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 had not entered intoany transaction referred to in Section 188 of the Companies Act with related partieswhich could be considered material under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. Accordingly the disclosure of related party transactionsas required under Section 134(3) of the Companies Act in Form AOC-2 is not applicable.Attention of members is drawn to the disclosures of transactions with related parties setout in Other Notes on Accounts 44 forming part of the financial statements.
The Company has developed a policy on related party transactions for identification andmonitoring of transactions. The policy on related party transactions as approved by theBoard is uploaded and can be accessed at company's website www.klrf.in
MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THECOMPANY
No material changes and commitments affecting the financial position of the Companyhave occurred between the end of the financial year to which the financial statementsrelate and the date of this Directors' Report.
The Company has a structured risk management policy. The risk management process isdesigned to safeguard the organisation from various risks through adequate and timelyactions. It is designed to anticipate evaluate and mitigate risks in order to minimizeits impact on the business. The potential risks are inventorised and integrated with themanagement process such that they receive the necessary consideration during decisionmaking.
CORPORATE SOCIAL RESPONSIBILITY
The Board had formed a Corporate Social Responsibility Committee comprising ofMr.Suresh Jagannathan Mr.Sudarsan Varadaraj Mr.K.Gnanasekaran and Mr.R.Kannan.
The composition and terms of reference of the CSR Committee are provided in theCorporate Governance Report forming part of this Annual Report. The Company has alsoformulated a CSR Policy which is available on the website of the Company viz. www.klrf.in
The disclosure as per Rule 8 of the Companies (Corporate Social Responsibility Policy)Rules 2014 is annexed as Annexure -E and forms an integral part of this Annual Report
The Board has made a formal annual evaluation of its own performance Committees of theBoard Independent Directors and Individual Directors of the Company.
The Board's performance was evaluated based on criteria like structure governancedynamics and functioning and review of operations financials internal controls etc.
The performance of the Independent Directors as well as Individual Directors wereevaluated based on the evaluation criteria laid down under the Nomination and RemunerationPolicy and Code of Conduct as laid down by the Board.
The Committees of the Board were evaluated based on the terms of reference specified bythe Board to the said Committee effectiveness of Committee meetings quality ofrelationship of the Committee and the management etc. The Board of Directors weresatisfied with the evaluation process which ensured that the performance of the Board itsCommittees Independent Directors and Individual Directors adhered to their applicablecriteria.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr.V.N.Jayaprakasam Non-Executive Non-Independent Director of the Company has resigneddue to his advanced age on 25th January 2018 . Your Directors wish to place onrecord their sincere appreciation for the valuable contribution made byMr.V.N.Jayaprakasam during his tenure as Director of the Company.
Mr. R.Kannan Executive Director of the Company has resigned his whole timedirectorship on 25th May 2018 and continues as a Non Executive Non IndependentDirector of the Company.
Mr.R.Kannan Director is liable to retire by rotation at the ensuing annual generalmeeting and being eligible offers himself for re-appointment. The Board recommends hisreappointment.
A brief resume details of expertise and other Directorships/ Committee membershipsheld by the above Director form part of the Notice convening the 56th AGM ofthe Company.
The Board of Directors has appointed Mr.K.R.Badrinarayanan as Chief Financial Officerwith effect from 1st Feruary 2018 and Mr.R.Kannan Executive Director hasresigned as Chief Financial Officer effective from 31st January 2018.
KEY MANAGERIAL PERSONNEL
Key Managerial Personnel of the Company as required pursuant to Section 203 of theCompanies Act 2013 are
|Mr.Suresh Jagannathan ||Managing Director |
|Mr.R.Kannan ||Executive Director |
|Mr.K.R.Badrinarayanan ||Chief Financial Officer |
|Mr.S.Piramuthu ||Company Secretary |
Mr.R.Kannan ceased to be a Key Managerial Personnel of the Company with effect from 25thMay 2018.
The Audit Committee of the Board of Directors of the Company comprises three membersnamely Mr.Sudarsan Varadaraj Mr.K.Gnanasekaran and Mr.Rajagopal Gopinath all of thembeing Independent Directors. Mr.Sudarsan Varadaraj an Independent Director is theChairperson of the Audit Committee.
The Board accepted the recommendations of the Audit Committee whenever made by theCommittee during the year.
The details of the number of meetings held and attendance of Directors at such meetingsare provided in the Corporate Governance Report which forms part of the Annual Report
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
A. CONSERVATION OF ENERGY
(i) The steps taken or impact on conservation of energy
Company ensures that the manufacturing operations are conducted in the manner wherebyoptimum utilization and maximum possible savings of energy is achieved
(ii) The steps taken by the Company for utilizing alternate source of energy
The Company has installed 7.00 M.W. wind energy for captive consumption.
(iii) The capital investment on energy conservation equipments.
As the impact of measures taken for conservation and optimum utilization of energy arenot quantitative its impact on cost cannot be stated accurately.
B. TECHNOLOGY ABSORPTION
i) Company's products are manufactured by using in-house know how and no outsidetechnology is being used for manufacturing activities. Therefore no technology absorptionis required.
ii) EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT
No specific expenditure of recurring or capital nature is involved in research anddevelopment directly.
C. FOREIGN EXCHANGE EARNINGS AND OUT GO
During the year under review your Company has earned foreign exchange of
Rs. 20.55 lakhs and out flow of Rs. 23.54 lakhs.
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 2018.
DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT ANDREMUNERATION OF MANAGERIAL PERSONNEL) RULES 2014
The requisite details relating to ratio of remuneration percentage increase inremuneration etc. as stipulated under section 197(12) and Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are annexed asAnnexure-C to this Report.
DISCLOSURE UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIALPERSONNEL) RULES 2014
The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 does not apply to the Company as there were no employeeswho are in receipt of remuneration in the aggregate at the rate of not less than Rs.10200000/- 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 for directors and employees to reporttheir genuine concerns details of which have been given in the Corporate GovernanceReport forming part of this Annual Report.
ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has implemented and evaluated the Internal Financial Controls which providea reasonable assurance in respect of providing financial and operational informationcomplying with applicable statutes and policies safeguarding of assets prevention anddetection of frauds accuracy and completeness of accounting records. The Internal AuditReports were reviewed by the Audit Committee. Further the Audit Committee annuallyreviews the effectiveness of the Company's internal control system. The Directors andManagement confirm that the Internal Financial Controls (IFC) are adequate and effectivewith respect to the operations of the Company. A report of Auditor's pursuant to 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.
DISCLOSURE AS REQUIRED UNDER SECTION 22 OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary and trainees) are covered under this policy. The Company has not received anysexual harassment complaint during the year 2017 - 2018.
Your directors acknowledge with gratitude the co-operation and assistance from itsbankers. Your Directors would like to thank all Shareholders Customers and Employees inappreciation of their continued support.
May the Almighty Goddess Lakshmi continue to shower HER choicest blessings and continueto grant us prosperity in the years to come.
| ||By Order of the Board || |
| ||Sudarsan Varadaraj ||Suresh Jagannathan |
|Place : Coimbatore ||Director ||Managing Director |
|Date : May 25 2018 ||DIN : 00133533 ||DIN : 00011326 |