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Kovilpatti Lakshmi Roller Flour Mills Ltd.

BSE: 507598 Sector: Agri and agri inputs
NSE: KLRF ISIN Code: INE014E01015
BSE 00:00 | 14 Jun 66.10 1.45
(2.24%)
OPEN

67.00

HIGH

67.55

LOW

63.10

NSE 05:30 | 01 Jan Kovilpatti Lakshmi Roller Flour Mills Ltd
OPEN 67.00
PREVIOUS CLOSE 64.65
VOLUME 2820
52-Week high 70.95
52-Week low 30.40
P/E 8.14
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 67.00
CLOSE 64.65
VOLUME 2820
52-Week high 70.95
52-Week low 30.40
P/E 8.14
Mkt Cap.(Rs cr) 37
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

Dear Shareholders

The Directors present their Fifty Eighth Annual Report together with the auditedstatement of accounts for the year ended 31st March 2020.

FINANCIAL RESULTS 31.3.2020 31.3.2019
Total Income 23247.34 23236.41
Profit before finance cost and depreciation 1453.80 807.78
Less: Financial charges 592.12 624.20
Profit before depreciation 861.68 183.58
Less: Depreciation 345.97 378.96
Profit/ (Loss) before tax 515.71 (195.38)
Add/Less:Income tax expense-Current 86.10 -
-Deferred tax charge / (credit) 4.53 (50.21)
Profit / (Loss) for the year from operations 425.08 (145.17)
Other comprehensive Income net of tax (10.94) 1.25
Total comprehensive income for the year 414.14 (143.92)

REVIEW OF BUSINESS OPERATIONS

During the year ended 31 st March 2020 the Company has recorded a total income of Rs23247 lakhs as against Rs 23236 lakhs achieved during the previous year. The profitafter tax amounted to Rs 425 lakhs as against loss of Rs 145 lakhs in the previous year.The Profit before Interest Depreciation Taxes and Amortization (EBIDTA) amounted to Rs1454 lakhs as against Rs 808 lakhs in the previous year.

There was no change in the nature of business of the Company during the financial yearended 31st March 2020.

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

IMPACT OF THE COVID-19 PANDEMIC ON THE BUSINESS

In order to contain the spread of the novel Corona Virus Disease ('COVID-19') and inline with the nationwide lockdown and other directives announced by the Central and theState Governments the manufacturing and administrative operations of the engineeringdivision of the Company was closed from 25th March 2020 and the manufacturing andadministrative operations of the food division was partially operational during thelockdown period in compliance with all health safety and quality measures. The closure ofmanufacturing operations have adversely affected the operations of the Company but howeverthe same does not affect the Company's ability to meet its debt and other financialcommitments.

The Company has obtained requisite permissions from the local authorities and resumedthe operations of the engineering division from 16th June 2020 onwards in a phasedmanner. The Company have implemented all necessary standard operating procedures includingphysical distancing sanitization fumigation and other health and safety norms /guidelines / directives issued by the Central and State Governments from time to time inthe factories administrative & registered office spaces to minimize the health riskand to ensure the wellbeing of its employees and to ensure the smooth functioning of theoperations.

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.

FINANCE

Your Company continued to avail need based working capital facilities from Canara Bankand 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.

SHARE CAPITAL

The paid-up equity share capital as on 31st March 2020 was Rs 55414760/-. Duringthe year under review the Company has not made any fresh issue of shares.

TRANSFER TO RESERVES

During the year under review the Company has not transferred any amount to its GeneralReserves. However the net profit of Rs 414 lakhs has been carried forward in the Profit& Loss Account.

DIVIDEND

In order to conserve reserves your Directors do not recommend any dividend on thepaid-up equity share capital of the company for the year ended 31st March 2020.

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.

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 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 Rs RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 134(3) (c) of the Companies Act 2013 withrespect to Directors Rs 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 2020 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 that they meet the criteria ofindependence as laid down under section 149(6) of the Companies Act 2013 read withSchedules and Rules issued thereunder and Regulation 25 of SEBI (Listing Obligation andDisclosure Requirements) Regulations 2015.

REMUNERATION POLICY

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

AUDITORS

M/s.Arun & Co (Firm Registration Number 014464S) Chartered Accountants wereappointed as the Statutory Auditors of the Company for a period of five consecutive yearsfrom the conclusion of 55th Annual General Meeting held on 15th September 2017 till theconclusion of 60th Annual General Meeting subject to ratification of their appointment bythe Members at every AGM if so required under the Act. In accordance with the CompaniesAmendment Act 2017 enforced on 7th May 2018 by the Ministry of Corporate Affairs theappointment of Statutory Auditors is not required to be ratified at every Annual GeneralMeeting. Hence no resolution for ratification of appointment of statutory auditors isincluded in the Notice convening the 58th 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 Annual General Meeting and being eligible it has been proposedto re-appoint them as the branch auditors for the engineering division of the Company tohold such office from the conclusion of the ensuing Annual General Meeting till theconclusion of the next Annual General Meeting in accordance with the provisions of theCompanies Act 2013 and necessary resolution has been included in the Notice convening theensuing fifty eighth Annual General Meeting. Your Directors recommend theirre-appointment.

COST AUDITOR

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 26th June 2020 based on the recommendation of the audit committeeappointed M/s PMohankumar & Co. Cost Accountants as Cost Auditor to audit the costaccounts of the Company for the financial year 2020-21.

As required under the provisions of Section 148 of the Companies Act 2013 necessaryresolution seeking members Rs ratification for the remuneration payable to M/s PMohankumar & Co. Cost Accountants is included in the Notice convening the FiftyEighth Annual General Meeting. The cost audit report for the year ended 31st March 2020will be filed with the Central Government within the due date.

SECRETARIAL AUDITOR

Pursuant to provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. M.D.Selvaraj FCS Proprietor of MDS & Associates Company SecretariesCoimbatore to conduct the Secretarial Audit of the Company. The Secretarial Audit Reportfor the financial year ended 31st March 2020 is annexed herewith as"Annexure-A"

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 Section143 (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 Section186 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 2020 with relatedparties as defined under the Companies Act 2013 and SEBI (Listing Obligations andDisclosures Requirements) Regulations and 2015 were in the ordinary course of businessand on an arm's length basis. During the year the Company has not entered into anytransaction referred to in Section 188 of the Companies Act with related parties whichcould 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

Due to the outbreak of COVID 19 pandemic and based on the directives of the Central /State Governments the operations of the engineering division of the Company was suspendedon 25th March 2020 and resumed on 16th June 2020 in a phased manner with minimalworkforce by following requisite precautions/ guidelines. The operations of the fooddivision were partially operational during the lockdown period in compliance with allhealth safety and quality measures. This has impacted the turnover and profitability ofthe Company.

RISK MANAGEMENT

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

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Companies Act 2013 the Board hasconstituted a Corporate Social Responsibility Committee comprising of Mr.SureshJagannathan Mr. Sudarsan Varadaraj Mr. K.Gnanasekaran and Mr. R.Kannan as its members.

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

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

BOARD EVALUATION

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.

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. R.Kannan (DIN : 00951451 )Non-Executive Director of the Company retire byrotation at the ensuing annual general meeting and being eligible he has offered himselffor re-appointment. The Board recommends his re-appointment.

Mrs. Kalyani Jagannathan (DIN:02371318) has been re-appointed as the IndependentDirector of the Company for the second term of 5 consecutive years with effect from 16thSeptember 2020 with the approval of the members by means of a special resolution passedthrough postal ballot voting process.

KEY MANAGERIAL PERSONNEL

Mr. Suresh Jagannathan (DIN: 00011326) has been re-appointed as the Managing Directorof the Company for a further period of 3 years with effect from 12th March 2021 with theapproval of the members of the company through postal ballot voting process.

Further Mr. K. R. Badrinarayanan has resigned as the Chief Financial Officer (CFO) ofthe company with effect from the closure of business hours of 29th February 2020.

Based on the recommendation of the Nomination and Remuneration Committee the Board ofDirectors has appointed Mr. J. Kanna as the Chief Financial Officer of the company witheffect from 1st March 2020.

Other than the above there is no change in the composition of the Board of Directorsand the Key Managerial Personnel of the company.

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company comprises of four membersnamely Mr.Sudarsan Varadaraj Mr.K.Gnanasekaran Mrs.Kalyani Jagannathan and Mr.AshwinChandran all of them being Independent Directors except Mr.Sudarsan Varadaraj.Mr.K.Gnanasekaran an Independent Director is the Chairman of the Audit Committee.

The Board had accepted all the recommendations of the Audit Committee whenever made bythe said Committee during the year.

The details of the number of meetings held and the attendance of Directors at suchmeetings are provided in the Corporate Governance Report which forms part of theDirectors Rs 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 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 OUTGO

During the year under review your Company has earned foreign exchange of Rs 97.48lakhs and incurred an outflow of Rs 33.16 lakhs.

SUBSIDIARY COMPANIES

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

FIXED DEPOSITS

Your company has not accepted any deposits within the meaning of Section 73 of theCompanies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014. Hence thereare no unclaimed or unpaid deposits as on 31st March 2020.

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-C to this Report.

DISCLOSURE UNDER RULE5(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) Rules2014 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 for employees to report their genuineconcerns details of which have been given in the Corporate Governance Report forming partof this Directors Rs 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 toSection143(3)(i) of the Companies Act 2013 certifying the adequacy of Internal FinancialControls is annexed with the Auditor's report.

LISTING

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

ORDERS BY REGULATORS COURTS OR TRIBUNALS

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

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION PROHIBITIONAND 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) Act2013. An Internal complaints Committee (ICC) has been setup to redress thecomplaints received regarding sexual harassment of women at workplace. All employees(permanent contractual temporary and trainees) are covered under this policy. TheCompany has not received any complaint under the said Act during the year 2019-20.

ACKNOWLEDGEMENTS '

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

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

By Order of the Board

K.Gnanasekaran Suresh Jagannathan
Place : Coimbatore Director Managing Director
Date : 12th August 2020 DIN : 00133645 DIN : 00011326

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