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Kovilpatti Lakshmi Roller Flour Mills Directors Report, KLRF Reports by Directors
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Kovilpatti Lakshmi Roller Flour Mills

BSE: 507598|NSE: KLRF|ISIN: INE014E01015|SECTOR: Food Processing
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Directors Report Year End : Mar '16    Mar 15

Dear Shareholders,

The Directors present their Fifty Fourth Annual Report together with the audited statement of accounts for the year ended 31st March, 2016.

(Rs. in Lakhs)

FINANCIAL RESULTS

31.3.2016

31.3.2015

Total Turnover (Net)

20690.17

21723.91

Profit before financial charges and depreciation

1810.78

1267.21

Less : Financial charges

637.20

799.23

Profit before depreciation

1173.58

467.98

Less : Depreciation

251.56

307.06

Profit before tax

922.02

160.92

Add / Less Provision for tax - Current

187.99

32.20

- MAT credit entitlement

(44.56)

--

- Deferred tax assets (-) / liabilities

190.87

(44.60)

Net Profit /after tax carried to balance sheet

587.72

173.32

REVIEW OF BUSINESS OPERATIONS

During the year ended 31st March 2016, the Company has recorded a total turnover of Rs. 20690 lakhs as against Rs. 21724 lakhs achieved during the previous year. The profit after tax amounted to Rs. 588 lakhs as against Rs. 173 lakhs in the previous year. The Profit before Interest, Depreciation, Taxes and Amortization (PBIDTA) amounted to Rs. 1811 lakhs as against Rs. 1267 lakhs in the previous year.

There was no change in the nature of business of the Company during the financial year ended 31st March 2016.

The performance of each business segment of the Company has been comprehensively discussed in the Management Discussion and Analysis Report (forming part of this Directors'' Report)

FINANCE

Your Company continued to avail need based working capital facilities from Canara Bank and HDFC Bank Limited

CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate governance and Management Discussion & Analysis Report, which form an integral part of this Report are annexed to this report. The Company has complied with the conditions relating to Corporate Governance as stipulated in terms of SEBI (Listing , Obligations and Disclosure Requirements) Regulations, 2015. The Certificate from the statutory auditor relating to the above is annexed.

SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2016 was Rs. 5,02,06,440/-. During the year under review, the Company has not made any fresh issue of any shares.

TRANSFER TO RESERVES

The Company has not transferred any amount to its General Reserves. However, an amount of Rs. 587.72 lakhs is carried forward in the Profit & Loss Account.

DIVIDEND

Your directors are unable to recommend any dividend for the year ended 31st March, 2016.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Company has transferred unpaid dividend amounts within the statutory period to the IEPF. During the financial year 2015-16, unclaimed dividend of Rs. 1,99,292/- relating to the financial year 2007 - 08 was transferred to the IEPF.

EXTRACT OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 is furnished in Annexure and is attached to this Report.

MEETINGS

Details of the composition of the Board and its Committees namely Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and of the Meetings held and attendance of the Directors at such Meetings, are provided in the 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 with respect to Directors'' Responsibility Statement, it is hereby confirmed that;

i. In the preparation of the annual accounts, the applicable accounting standards have been followed.

ii. The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year under review.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors have prepared the annual accounts for the financial year ended 31st March, 2016 on a going concern basis.

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

vi. The Directors had devised proper systems to ensure compliance with the provisions of all 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 of independence as laid down under section 149(6) of the Companies Act, 2013.

REMUNERATION POLICY

The Board has, on the recommendation of the Nomination and Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their Remuneration. The Remuneration Policy is furnished in the Company''s website at www.klrf.in abstract of which is furnished as Annexure - D and forms part of this report.

AUDITORS

Sri. P. Marimuthu, Auditor of the Company will retire at the forthcoming annual general meeting and is eligible for re-appointment.

M/s Haribhakti & Co LLP, Chartered Accountants, branch auditors for the engineering division of the Company will retire at the forthcoming annual general meeting and are eligible for re-appointment.

COST AUDITOR

The Board of Directors at its meeting held on 30th May, 2016, based on the recommendation of the audit committee appointed Sri.M.Kannan, Cost Accountant as Cost Auditor for conducting the Cost Audit for the financial year 2016 - 2017.

As required under the provisions of Section 148 of the Companies Act, 2013, necessary resolutions seeking member''s ratification for the remuneration payable to Sri.M.Kannan is included in the Notice convening the Fifty Fourth Annual General Meeting.

Cost audit report for the year ended 31st March 2015 has been filed before the time limit prescribed under the Act.

SECRETARIAL AUDIT

Pursuant to provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Company has appointed Sri.M.D.Selvaraj, FCS, Proprietor of MDS & Associates, Company Secretaries, Coimbatore to conduct the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure-A

COMMENTS ON AUDITORS REPORT

There are no qualifications, reservations or adverse remarks or disclaimers made by the Auditors/ Secretarial Auditor in their/ his report. There were no instances of frauds identified or reported by the Statutory auditors during 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 of the Companies Act, 2013 during the period under review and hence the said provision is not applicable. Details of investments made in the prior years are given in the notes 9 of the financial statement.

RELATED PARTY TRANSACTIONS

All transactions entered into during the financial year 31st March, 2016 with related parties as defined under the Companies Act and SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015 were in the ordinary course of business and on an arm''s length basis. During the year, the Company had not entered into any transaction referred to in Section 188 of the Companies Act, with related parties which could be considered material under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the disclosure of related party transactions as 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 set out in Other Notes on Accounts 22 (16) forming part of the financial statements.

The Company has developed a policy on related party transactions for identification and monitoring of transactions. The policy on related party transactions as approved by the Board, is uploaded and can be accessed at company''s website www.klrf.in

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year to which the financial statements relate and the date of this Directors'' Report.

RISK MANAGEMENT ''

The Company has a structured risk management policy. The risk management process is designed to safeguard the organization from various risks through adequate and timely actions. It is designed to anticipate, evaluate and mitigate risks in order to minimize its impact on the business. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

CORPORATE SOCIAL RESPONSIBILITY

In compliance with the provisions of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted the Corporate Social Responsibility Committee at their Board Meeting held on 30th May, 2016. The Committee comprises of Sri.Suresh Jagananthan, Sri.Sudarsan Varadaraj, Sri.K.Gnanasekaran and Sri. R. Kannan as it members.

The Company has however not required to incur any expenditure on the CSR initiatives during the year under review as the average net profits of the preceding three financial years of the Company was negative.

BOARD EVALUATION

The Board has made a formal annual evaluation of its own performance, Committees of the Board, Independent Directors and Individual Directors of the Company.

The Board''s performance was evaluated based on criteria like structure, governance, dynamics and functioning and review of operations, financials, internal controls etc.,

The performance of the Independent Directors as well as Individual Directors were evaluated based on the evaluation criteria laid down under the Nomination and Remuneration Policy and Code of Conduct as laid down by the Board.

The Committees of the Board were evaluated based on the terms of reference specified by the Board to the said Committee. The Board of Directors were satisfied with the evaluation process which ensured that the performance of the Board, its Committees, Independent Directors and Individual Directors adhered to their applicable criteria.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The shareholders at the Annual General Meeting held on 16th September, 2015 appointed Mrs. Kalyani Balasubramanian as an Independent Director of the Company for a term of five years.

The shareholders at the Annual General Meeting held on 16th September, 2015 re-appointed Sri.Suresh Jagannathan as Managing Director for a period of five years from 12th March, 2016.

Sri.V.N.Jayaprakasam, Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board y recommends his re-appointment. /

KEY MANAGERIAL PERSONNEL

Key Managerial Personnel of the Company as required pursuant to Section 2 (51) of the Companies Act, 2013 are Sri. Suresh Jagannathan, Managing Director, Sri.R.Kannan, Executive Director and Chief Financial Officer and Sri.S.Piramuthu, Company Secretary

AUDIT COMMITTEE

The Audit Committee of the Board of Directors of the Company, comprises three members namely Sri.Sudarsan Varadaraj, Sri.K.Gnanasekaran and Sri.S.Govindan, all of them being Independent Directors. Sri.Sudarsan Varadaraj, an Independent Director, is the Chairperson of the Audit Committee.

The Board accepted the recommendations of the Audit Committee whenever made by the Committee during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

CONSERVATION OF ENERGY

(i) The steps taken or impact on conservation of energy

Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

(ii) The steps taken by the Company for utilizing alternate source of energy

No specific investment has been made in reduction in energy consumption

(iii) The capital investment on energy conservation equipments.

As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

TECHNOLOGY ABSORPTION

Company''s products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore no technology absorption is required.

EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

No specific expenditure of recurring or capital nature is involved in research and development directly.

FOREIGN EXCHANGE EARNINGS AND OUT GO

During the year under review, your Company has earned foreign exchange of Rs. 12.63 lakhs and out flow of Rs. 351.69 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 the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Hence there are no unclaimed or unpaid deposits as on 31st March, 2016.

DISCLOSURE UNDER SECTION 197(12) AND RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The requisite details relating to ratio of remuneration, percentage increase in remuneration etc. as stipulated under section 197(12) and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed as Annexure-C to this Report.

DISCLOSURE UNDER RULE 5(2) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in the aggregate at the rate of not less than Rs. 60,00,000/- if employed throughout the year or Rs. 5,00,000/- per month if employed for part of the year.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

Your Company has established a vigil mechanism for directors and employees to report their genuine concerns, details of which have been given in the Corporate Governance Report 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 provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes and policies, safeguarding of assets, prevention and detection of frauds, accuracy and completeness of accounting records. The Internal Audit Reports were reviewed by the Audit Committee. Further, the Audit Committee annually reviews the effectiveness of the Company''s internal control system. The Directors and Management confirm that the Internal Financial Controls (IFC) are adequate with respect to the operations of the Company. A report of Auditor''s pursuant to Section 143(3)(i) of the Companies Act, 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditor''s report.

LISTING

Equity shares of the Company continued to be listed on BSE Limited. During the financial year 2015 - 2016, your Company has entered into a new Listing Agreement with BSE Limited, in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ORDERS BY REGULATORS, COURTS OR TRIBUNALS

No significant and/or material orders were passed by any regulator or court or tribunal impacting 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 requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary and trainees) are covered under this policy. The Company has not received any sexual harassment complaint during the year 2015 - 2016.

ACKNOWLEDGEMENTS

Your directors acknowledge with gratitude, the co-operation and assistance from its bankers.

Your Directors would like to thank all Shareholders, Customers and Employees in appreciation of their continued support.

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

By Order of the Board

Sudarsan Varadaraj Suresh Jagannathan

Place : Coimbatore Director Managing Director

Date : 30.05.2016 DIN : 00133533 DIN : 00011326

Source : Dion Global Solutions Limited
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