Your Directors are pleased to present the 55th Annual Report and the audited accountsfor the financial year ended 31st March 2019.
| ||Year ended 31.03.2019 ||Year ended 31.03.2018 |
| ||र in lakhs ||र in lakhs |
|Revenue from Operations ||120940.70 ||130417.33 |
|Earnings Before Taxes Finance Costs Depreciation and Amortization ||2098.36 ||11337.22 |
|Less : Finance Costs ||130.85 ||119.91 |
|Less : Depreciation and Amortisation expense ||334.16 ||352.27 |
|Profit Before Exceptional Item and Tax ||1633.35 ||10865.04 |
|Exceptional Item ||170.50 || |
|Profit Before Tax ||1462.85 ||10865.04 |
|Less : Tax Expense ||520.24 ||3902.33 |
|Profit After Tax ||942.61 ||6962.71 |
|Other Comprehensive Income (net of tax) ||(29.94) ||(88.40) |
|Total Comprehensive Income ||912.67 ||6874.31 |
|Opening balance in Retained Earnings ||5360.75 ||2141.87 |
|AMOUNT AVAILABLE FOR APPROPRIATION ||6273.42 ||9016.18 |
|Dividend distributed during the year - Final ||1920.00 ||960.00 |
|Dividend Distribution Tax on above ||394.66 ||195.43 |
|Transfer to General Reserve ||200.00 ||2500.00 |
|Closing Balance in Retained Earnings ||3758.76 ||5360.75 |
Your Directors recommend a dividend of 150 % (र 15.00 per share of र 10 each) for theyear ended 31st March 2019 out of the profits of the Company for the year ended 31stMarch 2019 absorbing a total amount of र 57866541 (including dividend distributiontax and cess thereon). The dividend of र 15 per equity share of र 10 each as recommendedby the Board of Directors of the Company at their meeting held on 30th May 2019 ifapproved at the ensuing annual general meeting will be paid to those shareholders whosenames appear in the Company's register of members as on 31st August 2019. In respect ofequity shares held in dematerialised form the dividend will be paid to those beneficialowners of the equity shares as at the end of business hours on 24th August 2019 as perthe details furnished by the depositories for this purpose."
The dividend payout for the year 2018-19 has been decided in accordance with theCompany's policy to pay sustainable dividend linked to long term growth objectives of theCompany to be met out of internal cash accruals.
Pursuant to Section 124 and 125 of Companies Act 2013 the Company has transferred theunpaid or unclaimed dividend up to and including for the financial year 2010-11 on duedate to the Investor Education and Protection Fund administered by the Central Government.
Pursuant to the provisions of Investor Education and Protection Fund (Uploading ofinformation regarding unpaid and unclaimed amounts lying with companies) Rules 2012 theCompany has uploaded the details of unpaid and unclaimed dividends lying with the Companyas on August 31 2018 (date of last Annual General Meeting) on the website of the Company(http://www.kselimited.com/investordetails.aspx) as also on the website of theMinistry of Corporate Affairs.
The dates of declaration of Dividend since 2011-12 and the corresponding dates whenunclaimed dividends are due to be transferred to the Central Government are given in thefollowing table:
|Financial Year ||Date of Declaration of Dividend ||Last date for claiming unpaid dividend ||Unclaimed amount as on 31st March 2019 ||Due date for Transfer to Investor Education and Protection Fund |
|2011-12 (Final Dividend) ||31 July 2012 ||30 July 2019 ||618618 ||30 August 2019 |
|2012-13 (Final Dividend) ||31 July 2013 ||30 July 2020 ||491970 ||30 August 2020 |
|2013-14 (Final Dividend) ||25 September 2014 ||24 September 2021 ||1262880 ||24 October 2021 |
|2014-15 (Interim Dividend) ||12 February 2015 ||11 February 2022 ||572600 ||14 March 2022 |
|2014-15 (Interim Dividend) ||25 March 2015 ||24 March 2022 ||1105240 ||24 April 2022 |
|2014-15 (Final Dividend) ||19 September 2015 ||18 September 2022 ||1013520 ||19 October 2022 |
|2015-16 (Final Dividend) ||31 August 2016 ||30 August 2023 ||1331700 ||30 September 2023 |
|2016-17 (Final Dividend) ||31 August 2017 ||30 August 2024 ||1896750 ||30 September 2024 |
|2017-18 (Final Dividend) ||31 August 2018 ||30 August 2025 ||2751360 ||30 September 2025 |
Transfer to Reserves
The Company proposes to transfer र 200 lakhs to the General Reserve out of amountavailable for appropriations and an amount of र 3758.76 lakhs is proposed to be retainedas Surplus.
Operating Results and Business Operations
During the year ended 31st March 2019 the Revenue from Operations declined by 7.27 %to र 1209 crores from र 1304 crores र 95 crores in absolute terms. In year 2017-18 we hadsold raw materials worth र 98.33 crores to third party manufacturers and bought back fromthem the finished products produced out of it and thus the Revenue for that year washigher to that extend. Further there is a slow-down in the sale of coconut oil in thelast quarter of year 2018-19 and the stock of oil has gone up by over 2100 tons in March2019 on a year to year basis the reasons thereto has been explained below. This alsowould have affected the turnover by around र 25.00 crores. Apart from the above twofactors the turnover of all the other products have improved compared to previous year.
The over-all profit after tax was र 9.13 crores in year 2018-19 compared to र 68.74crores in the previous year. While the year 2017-18 was the most favourable year in thehistory of the Company the year 2018-19 was just opposite to that. In year 2017-18 allthe factors controlling the margins of the Company was in favour of the Company for mostpart of the year. In that year the cost of ingredients for the animal feed has declinedconsiderably compared to earlier year and remained steady for the major part of theyear. The selling price of feed was reduced to ease the difficulty of the farmers butstill the feed division could generate र 66.64 crores as divisional profit in that year.However in year 2018-19 the situation went upside down from September 2018 onwards. Theprice of cattle feed ingredients started moving upward unchecked and in order to reducethe loss we tried to adjust the selling price of feed with absolute restriction as themilk price is kept stable for over two years by the Government. While the averageingredient cost of feed moved up by 20% we could increase the selling price of feed by10% only which hurt the margins heavily. However we ensured steady supply to the marketwithout any reduction in the volume and without loosing the market in the long terminterest of the Company. The sales volume of feed has gone up by 5% from 5.33 lakhs tonsin year 2017-18 to 5.60 lakhs tons in year 2018-19. For the above reasons and the measuresadopted by us we could curtail the loss in the feed division for the year 2018-19 at र1.91 crores as per segment results.
In the cake processing division the availability of local copra cake was limited asthe yield of coconut has been adversely affected in Kerala as well as in Tamil Nadu. Wehad mainly depended on the imported copra cake for our processing during the year 2018-19.Thus we could maintain the average price level of copra cake around र 23000 per ton. Theselling price of refined coconut oil had a steep fall from र 180/kg. level in the yearbeginning to र 116/kg. at the end of the year. In the month of December 2018 there waswide media coverage on the coconut oil market and on the adulterations going on in theindustry which had seriously affected the market. Followed with this there was strictcheck on the parameters of the coconut oil by the government officials which indirectlyaffected the coconut oil market including the genuine market. As a result the demand forour refined coconut oil has considerably reduced and stock of oil had gone up by over 2100tons than the normal level stocks. We were also forced to sell the refined oil and the rawoil at reduced rates.
Availability of cheaper oils like palm oil etc. had seriously affected the coconut oilmarket. Still the demand for the oil has not picked up. However we are sure that thecoconut oil market will regain its momentum soon.
While importing copra cake through Cochin Port due to certain conditions imposed bythe Customs as part of an investigation by Department of Revenue Intelligence 5517 tonsof copra cake imported between 23.10.2018 to 29.12.2018 could not be cleared immediatelyand was held up at port. Though after completing the investigation the cargo wasunconditionally released by the Customs the Company had to incur additional cost likecontainer detention charges and other incidental expenses in total amounting to Rs. 170.50lakhs (net of GST). Since the said additional costs are not of routine nature the same hasbeen considered as Exceptional Items and shown separately.
Along with the increase in the sales volume of animal feed the quantity of cakeprocessed in year 2018-19 also improved by 7.00 % from 96709 tons in the previous year to103502 tons in the year under report. Despite all the adversities discussed above thecake processing division reported a profit of र 15.79 crores for the year 2018 -19compared to a profit of र 38.84 crores in the previous year.
The volume of sales of ice cream also improved by 6.00 % to 1290 kl. in 2018-19compared to 1217 kl. in the previous year by effective marketing especially in thesouthern region of Kerala even though the margins on ice cream were under strain. Thesale of milk also marginally improved by 1.25 % at 4327 lakhs litres. The sustained marginin milk sales helped to generate a segment profit of Dairy division at र 63.34 lakhscompared to previous year profit of र 197.51 lakhs. We are taking all efforts to improvethe production and sale volume of milk and ice cream.
The heavy southwest monsoon in August 2018 had wreaked havoc in Kerala as water levelsrose in rivers and reservoirs and the shutters of all dams in Kerala were opened and manyparts of Kerala was under water for several days. Lakhs and lakhs of homes were submergedunder water for many days. Few lost their lives many lost their homes and belongings onthe aftermath of heavy rain and land-slides. Many farmers could not save their cattlewhile fleeing for safety. The hay grass and feed meant for cattle were submerged in waterand farmers found it difficult to maintain the cattle when water was rising everywhere toabove the neck level. The entire State rose to the occasion the Keralite joined togetherignoring religion caste creed and political affiliations to combat the flood and savethe precious life. Relief camps and relief works started immediately. The variousfunctionaries departments etc. of the Government worked hard to coordinate the reliefwork. On knowing the gravity of the situation the whole country joined in the Keralarecovery mission. All the Units of the Company in Kerala was safe and was fully functionalduring the flood except in Konikkara Unit where the ground floor was submerged by floodwherein the electrical panel and Generator set were installed and hence the plant had tobe temporarily shut down for a few days and as a result stock of finished goods worth र15.00 lakhs was lost in that Unit. In order to help the flood affected farmers we haddistributed cattle feed worth र 13.88 lakhs free of cost. In addition to extending helpsto the nearby relief camps we had also contributed a sum of र 25.00 lakhs to the KeralaChief Ministers Distress Relief Fund.
The feed ingredient prices are likely to be continued at higher levels for a few monthstill the next crop season. We are adjusting the selling price of feed to match with thehigher cost of ingredients to avoid heavy loss. However the profitability in the feeddivision will be under severe strain for a few months. The limelight is that we are havingsustained demand for our cattle feed and are hopeful of suitable correction of sellingprice in tune with ingredient prices.
We firmly believe that the sales volume of cattle feed will further improve in thecurrent financial year. One more feed plant is envisaged in Karnataka for meeting futuredemand and explore the Karnataka market. We expect to maintain our performance in Animalfeed division by optimising the feed formulation and making suitable adjustments in theselling prices to match the ingredient prices.
In the current year 2019-20 the availability of local copra cake is under strain. Theprice for local copra cake is under control as sufficient quantity of cake is availableby imports. To cover up our requirements of copra cake we are supplementing with importedcopra cake. The imported copra cake is at present available in sufficient quantity atreasonable price. As such we do not expect any shortage of supply of copra cake. Themarket price of coconut oil is around र 128/kg. at present which is expected to fallfurther. Entry of coconut oils mixed with spurious cheaper oils may destroy the market forgenuine coconut oil. As such the demand for refined coconut oil is very weak and we findit hard to sell the oil in stock. If the the demand for the oil continues at this levelthe profitability of the Cake Processing Division may be affected.
We are taking all steps to widen the market for ice cream and milk by appointing newdealers in untapped areas to improve the volume of sales and thereby utilise more of theunused production capacity. We expect to improve the volume of sale of ice cream and milkand thereby better the margins of Dairy division.
More information relating to the operations of the Company has been furnished in theManagement Discussion and Analysis Report attached to and forming part of this Report asprovided by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
Misappropriation of funds by an employee
Misappropriation of funds to the tune of र 39.67 lakhs by an employee has been foundout during the year ended 31st March 2019 by the Company and suitable remedial actionhas been taken to prevent occurrence of similar instances. A sum of र 5 lakhs has beencollected from that employee. Provision has been made for the balance amount in the booksthough the Company is hopeful of realising the balance amount.
Awards and Recognitions
The Company has won the SEA Award constituted by Solvent Extractors' Association ofIndia for highest processor of coconut oil cake for the year 2017-18. This Award is beingreceived by the Company for the past 28 years consecutively since the inception of theaward.
Number of meetings of the Board
Twelve meetings of the board were held during the year. For details of the meetings ofthe board please refer to the corporate governance report which forms part of thisreport.
Directors and Key Managerial Personnel
After the untimely death of Dr. K.C. Vijayaraghavan on 19th April 2018 in his placeDr. Pyarelal K.C. was appointed as a director in the annual general meeting of the Companyheld on 31-08-2018. Mr. T. R. Raghulal resigned as director effective from 30th May 2018and in his place Ms. Danesa Raghulal was appointed in the annual general meeting of theCompany held on 31-08-2018.
Dr. Jose Paul Thaliyath Mr. Joseph Xavier Mrs. Sathi A. Menon and Mr. Paul John wereappointed as Independent Directors of the Company and they hold that office for a fixedterm of five years up to 25.09.2019 and are not liable for retirement by rotation asprovided in Section 149 of the Companies Act 2013. In accordance with Section 149 (7) ofthe Companies Act 2013 the Company has received declarations from all the independentdirectors of the Company confirming that they meet the criteria of independence asprescribed under the Companies Act 2013 and as per SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.
In accordance with the provisions of the Companies Act 2013 read with the Rules issuedthereunder the Listing Regulations and the Articles of Association of the Company theIndependent Directors the Managing Director and Executive Director of the Company are notliable to retire by rotation.
Mr. A.P. George Managing Director Mr. M.P. Jackson Executive Director and Mr. R.Sankaranarayanan Chief Financial Officer and Company Secretary are the Key ManagerialPersonnel of your Company in accordance with the provisions of Sections 2(51) and 203 ofthe Companies Act 2013 read with Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014.
In the Board Meeting held on 14th November 2017 Mr. A.P. George who was ExecutiveDirector of the Company was elevated as Managing Director of the Company for theremaining period of his appointment upto 30th September 2018 subject to approval ofshareholders at general meeting. In the Board Meeting held on 30th May 2018 Mr. A.P.George was reappointed as Managing Director of the Company for a period of three yearsfrom 1st October 2018 as his then term of appointment was expiring on 30th September2018. Two special resolutions were moved in the annual general meeting held on 31stAugust 2018 for getting approval of the shareholders for the appointment andreappointment of Mr. A.P. George as mentioned above. The said special resolutions moved inthe Annual General Meeting held on 31st August 2018 could not be passed as the requisitemajority of votes in favour of the resolutions could not be obtained but votes cast infavour of the motion exceed the votes cast against the motion and there is simple majorityof votes in favour of the Resolution. Thereupon the Board of Directors of the Company intheir meeting held on 13th September 2018 had decided to apply for the approval of theCentral Government for the appointment of Mr. A.P. George as Managing Director of theCompany for the period from 14th November 2017 to 30th September 2018 and also for theperiod from 1st October 2018 to 30th September 2021 as provided under Section 196 ofthe Companies Act 2013.
In response to the request of the Board the Ministry of Corporate Affairs New Delhihas intimated to the Company that the applications of the Company are taken on record bythe Ministry and that the proposal would be examined for approval on receipt of a dulycertified copy of the members' resolution passed in favour of the proposal along with copyof notice and explanatory statement pursuant to Section 102 of the Companies Act 2013.Accordingly two Ordinary Resolutions will be moved in the ensuing annual general meetingfor the approval of the members for the appointment of Mr. A.P. George as ManagingDirector of the Company for the period from 14th November 2017 to 30th September 2018and from 1st October 2018 to 30th September 2021 on the same remuneration as originallydecided by the Board in the respective meetings held on 14th November 2017 and 30th May2018. The appointment / reappointment of Mr. A.P. George as Managing Director by the Boardof Directors and the remuneration paid to him in accordance to the said appointment/reappointment are subject to approval of the Central Government as mentioned above.
The first term of appointment of all the independent directors expires in September2019. The Board had decided to propose in the ensuing annual general meeting forreappointing Dr. Jose Paul Thaliyath Mr. Joseph Xavier and Mr. Paul John as IndependentDirectors of the Company for a further period of five years by passing special resolutionsby the Company in terms of Section 149 (10) of the Companies Act 2013.
Mrs. Sathi A. Menon had informed the Board that she do not wish to continue in theBoard as an Independent Director for a second term. The Company has received notice inwriting under Section 160 of the Companies Act 2013 from a member signifying theintention to propose Mr. Verghese CV for appointment as an Independent Director of theCompany. Mr. Verghese CV aged 66 is a practicing chartered accountant and the SeniorPartner in M/s. Cheeran Verghese & Co. Chartered Accountants Thrissur with wideknowledge in taxation and financial reporting.
In the opinion of the Board all the above four candidates fulfil the conditions fortheir reappointment/appointment as an Independent Directors as specified in the CompaniesAct 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015and they are independent of the management. The Board based on the performance evaluationand as per the recommendation of the Nomination and Remuneration Committee considersthat given their background and experience and contributions made by them during theirtenure their association with the Company would be beneficial to the Company and it isdesirable to avail their services as Independent Directors. Accordingly four resolutionsare proposed in the ensuing annual general meeting to re-appoint/appoint them asIndependent Directors of the Company.
In accordance with the provisions of the Companies Act 2013 and the Articles ofAssociation of the Company Mr. Paul Francis and Dr. Pyarelal K.C. will retire by rotationat the ensuing annual general meeting and being eligible offer themselves forre-appointment.
Policy on directors' appointment and remuneration and other details
Remuneration policy in the Company is designed to create a high performance culture. Itenables the Company to attract retain and motivate employees to achieve results. TheCompany pays remuneration by way of salary benefits perquisites and allowances to itsManaging Director and the Executive Director. The sitting fees payable to thenon-executive directors has been enhanced with effect from 1st February 2018 from र12000 to र 15000 per meeting of the Board and from र 7000 to र 10000 per meeting ofcommittees of the Board attended by them. The Nomination and Remuneration Policy for theMembers of Board and Executive Management can be accessed on the Company's website at thelink: http://kselimited.com under Investor Relations.
Evaluation of Board Committees and Individual Directors
The Company has devised a Policy for performance evaluation of Independent and otherdirectors Board as a whole and Committees thereof which include criteria for performanceevaluation of the executive and non-executive directors. The Policy for evaluation ofperformance of the Board of Directors can be accessed on the Company's website at thelink: http://kselimited.com under Investor Relations.
In terms of provisions of the Companies Act 2013 read with Rules issued thereunder andas per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Boardof Directors have evaluated the effectiveness of the Board during the financial year ended31st March 2019. The evaluation was based on questionnaire and feedback from all theDirectors on the Board as a whole Committees and self-evaluation. Directors who weredesignated held separate discussions with each of the Directors of the Company andobtained their feedback on overall Board effectiveness as well as each of the otherDirectors. The evaluation of the Directors was based on various aspects which inter aliaincluded the level of participation in the Board Meetings understanding of their rolesand responsibilities business of the Company along with the environment and effectivenessof their contribution.
A separate meeting of the independent directors was convened which reviewed theperformance of the Board (as a whole) the non-independent directors and the Chairman.
Internal financial control systems and their adequacy
Adequate internal financial controls are in place with reference to the financialstatements. Internal financial control systems of the Company have been designed toprovide reasonable assurance with regard to recording and providing reliable financial andoperational information complying with applicable Accounting Standards. Such controlswere tested annually and during the year no reportable material weakness in the design oroperation were observed. The details in respect of internal financial control and theiradequacy are included in the Management Discussion and Analysis which forms part of thisreport.
Your Company recognizes that risk is an integral part of business and is committed tomanaging the risks in a proactive and efficient manner. Your Company periodically assessesrisks in the internal and external environment along with the cost of treating risks andincorporates risk treatment plans in its strategy business and operational plans. TheBoard members are informed about the risk assessment and minimization procedures. TheBoard is responsible for framing implementing and monitoring the risk management plan forthe company. The Company manages monitors and reports on the principal risks anduncertainties that can impact its ability to achieve its strategic objectives. TheCompany's management systems organizational structures processes standards code ofconduct and behaviours together govern the business of the Company and manage associatedrisks.
There are no risks which in the opinion of the Board threaten the existence of yourCompany. However some of the risks which may pose challenges are set out in theManagement Discussion and Analysis which forms part of this Report.
Your Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting highest standards of professionalism honesty integrityand ethical behaviour. The Company is committed to developing a culture where it is safefor all employees to raise concerns about any poor or unacceptable practice and any eventof misconduct. Accordingly the Board of Directors have formulated a Whistle Blower Policywhich is in compliance with the provisions of Section 177 (10) of the Companies Act 2013and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. The policyprovides for a framework and process whereby concerns can be raised by its employeesagainst any kind of discrimination harassment victimization or any other unfair practicebeing adopted against them. More details on the vigil mechanism and the Whistle BlowerPolicy of your Company have been outlined in the Corporate Governance Report which formspart of this report. The "KSEL Whistle Blower Policy and Vigil Mechanism" can beaccessed on the Company's website at the link : http://kselimited.com/whistleblower.aspx.
Directors' Responsibility Statement
Pursuant to Section 134(3)(c) of the Companies Act 2013 the Directors confirm that:
(a) in the preparation of the annual accounts for the financial year ended 31st March2019 the applicable accounting standards and Schedule III of the Companies Act 2013have been followed and there are no material departures from the same;
(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of your Company as at 31st March 2019 and of the profitof the Company for the financial year ended 31st March 2019;
(c) proper and sufficient care has been taken 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 annual accounts have been prepared on a going concern' basis;
(e) proper internal financial controls laid down by the Directors were followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(f) proper systems to ensure compliance with the provisions of all applicable laws werein place and that such systems were adequate and operating effectively.
Corporate Governance Report Management Discussion and Analysis Report and Certificatefrom Auditors on Corporate Governance have been furnished separately and form part of thisreport. The disclosures made in these reports may be considered as compliance of variousdisclosures prescribed under the Companies Act 2013 and Rules made thereunder.
Corporate Social Responsibility
The Corporate Social Responsibility (CSR) Committee has been formed in conformity withSection 135 of the Companies Act 2013 read with the Companies (Corporate SocialResponsibility Policy) Rules 2014. The composition terms of reference and attendancedetails of the CSR Committee are incorporated in the Corporate Governance Report. TheAnnual Report on CSR activities for the year ended 31st March 2019 is given separately as"Annexure A" forming part of this Report.
Your Company is accepting deposits as per the provisions of Sections 73 and 76 of theCompanies Act 2013 read together with the Companies (Acceptance of Deposits) Rules 2014.The details relating to such deposits as provided under Rule 8 of the Companies (Accounts)Rules 2014 are provided in "Annexure B".
The Company is not accepting any other deposits which are not in compliance with therequirements of Chapter V of the Companies Act 2013.
Particulars of loans guarantees and Investments
The particulars of loans guarantees and investments have been disclosed in thefinancial statements.
Transactions with related parties
All contracts/arrangements/transactions entered by the Company during the financialyear with related parties were in the ordinary course of business and on an arm's lengthbasis. During the year the Company had not entered into anycontract/arrangement/transaction with related parties which could be considered materialin accordance with the policy of the Company on materiality of related party transactions.None of the transactions with related parties falls under the scope of Section 188(1) ofthe Act. Full disclosure of related party transactions as per Accounting Standard Ind AS24 issued by the Institute of Chartered Accountants of India is given under Note No. 34.13of Notes to the Annual Accounts.
The policy and procedures on related party transaction as approved by the Board may beaccessed on the Company's website at the link:http://kselimited.com/transactionpolicy.aspx. Information on transactions with relatedparties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 are given in "Annexure C" in Form AOC-2 and the sameforms part of this report.
Extract of annual return
As provided under Section 92(3) of the Act the extract of annual return is given in"Annexure D" in the prescribed Form MGT-9 which forms part of this report.
In accordance with the provisions of Section 139 of the Companies Act 2013 read withthe Companies (Audit and Auditors) Rules 2014 in the 53rd Annual General Meeting (AGM)held on 31st August 2017 M/s. S. S. AYYAR & Co. Chartered Accountants (ICAI FirmRegistration No. 050012S) were appointed as statutory auditors of the Company to holdoffice from the conclusion of the 53rd AGM until the conclusion of the 58th AGM to be heldin the year 2022. M/s. S. S. AYYAR & Co. (ICAI Firm Registration No. 050012S) hasconfirmed their eligibility and qualification required under Section 139 141 and otherapplicable provisions of the Companies Act 2013 and Rules made thereunder.
The Auditors' Report for the financial year 2018-19 on the financial statements of theCompany is part of this Annual Report. The Auditors have issued an unmodified opinion onthe Financial Statements for the financial year ended 31st March 2019. Unpaid dividendaccounts relating to financial years 2009-10 and 2010-11 were transferred after theexpiry of the statutory period to the Investor Education and Protection Fund (IEPF)whereby these balances were wiped off from the books of accounts. However the bank'sconfirmation of balance as on 31.03.2019 reveals balance of र 0.01 lakh and र 0.17 lakhsrespectively in these accounts. The company is of the view that these amounts would beunpaid dividend warrants credited back to the accounts by the bank pursuant to CircularSEBI/HO/MIRSD/DOP1/ CIR/P/2018/73 dated 20.04.2018. However pending details /confirmation from the bank the company has not recorded any accounting entry in respectthereof as on 31.03.2019. Steps are being taken to obtain details from the bank and totransfer the amounts to IEPF.
With the prior approval of Central Government M/s. A. R. Narayanan & Co. CostAccountants Ernakulam (Firm registration number 101421) have been appointed as CostAuditors for the financial year 2018-19 and they will be submitting their Cost AuditReport within the time limit stipulated. The Board of Directors of the Company on therecommendations made by the Audit Committee has appointed M/s. A. R. Narayanan & Co.Cost Accountants Ernakulam (firm registration number 101421) as the Cost Auditor of theCompany to conduct the audit of cost records for the financial year 2019-20. TheRemuneration proposed to be paid to the Cost Auditor subject to ratification byshareholders of the Company at the ensuing 55th Annual General Meeting has been fixed atर 200000 excluding taxes and out of pocket expenses. The Company has received consentfrom M/s. A. R. Narayanan & Co. Cost Accountants to act as the Cost Auditor forconducting audit of the cost records for the financial year 2019-20 along withcertificate confirming their independence and arm's length relationship.
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 your Companyhas appointed CS. Sathish V. Practicing Company Secretary to conduct the SecretarialAudit of your Company for the financial year ended 31st March 2019. The Secretarial AuditReport for the financial year ended 31st March 2019 is annexed herewith as "AnnexureE" to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
The Company is required to maintain cost records as specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013 for certain areas of itsoperations (Edible Oil and Power Generation) and accordingly accounts and records requiredto get true and fair view of the cost of production of products cost of sales margin andother information relating to products under reference are made and maintained by theCompany.
Disclosure as per Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013
The Company has zero tolerance for sexual harassment at workplace. The company hascomplied with the provisions relating to the constitution of Internal Complaints Committeeunder the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. During the financial year 2018-19 the Company has not received any complaintson sexual harassment and no complaints remain pending as of 31st March 2019.
Disclosure relating to Remuneration of Directors Key Managerial Personnel andparticulars of employees
The information required under Section 197 of the Companies Act 2013 and rules madethere-under in respect of employees of the Company is provided in "Annexure F"forming part of this report. None of the employees are in receipt of remuneration inexcess of the limits specified under clause (2) of Rule 5 of the Companies (Appointmentand Remuneration of Managerial Personnel) Rules 2014.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The particulars as prescribed under Rule 8(3) of the Companies (Accounts) Rules 2014are set out in "Annexure G" to this Report.
The Board has plans to purchase suitable industrial land near Mysore which ifmaterialised will likely to be used for production of cattle feed and thus cater to thenorthern districts of Kerala and also expand the market for our feed in Karnataka.
No disclosure is made in respect of the following items as there were no events duringthe year calling for reporting on these items:
1. There was no issue of equity shares with differential rights as to dividend votingor otherwise.
2. There was no issue of shares (including sweat equity shares and ESOP) to employeesof the Company under any scheme.
3. Your Company do not have any subsidiary associate joint venture company or holdingcompany and disclosures required in that respect were not dealt with.
4. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future.
5. No frauds have been reported by auditors to the Audit Committee or Board underSub-section (12) of Section 143 of the Companies Act 2013.
6. There are no material changes or commitments affecting the financial position of theCompany which have occurred between the end of the financial year under report and thedate of this report.
Your Directors wish to place on record their sincere appreciation for the assistanceand co-operation received from shareholders bankers especially ICICI Bank Registrarsand Share Transfer Agents customers distributors and suppliers. Board also acknowledgethe valuable committed services of the executives staff and workers of the Company.
| ||By Order of the Board |
| ||Sd/- |
|Irinjalakuda ||Dr. Jose Paul Thaliyath |
|May 30 2019 ||(DIN : 01773031) |
| ||Chairman |