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KRBL

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Directors Report Year End : Mar '18    Mar 16

To

The Members,

KRBL Limited 5190, Lahori Gate,

Delhi - 110 006

The Directors are delighted to present their Annual Report on Company’s Business Operations along with the Standalone and Consolidated Audited Financial Statements for the Year ended March 31, 2018.

1. RESULTS OF OUR OPERATIONS

Your Company’s financial performance for the year under review has been encouraging. Key aspects of Consolidated and Standalone Financial Performance of KRBL Limited for the current financial year 2017-18 along with the previous financial year 2016-17 are tabulated below:

(Rs. in Lacs, except as stated)

Particulars

Consolidated

Standalone

Year Ended March 31, 2018

Year Ended March 31, 2017

Year Ended March 31, 2018

Year Ended March 31, 2017

Revenue from Operations

3,24,652.05

3,14,764.81

3,24,644.32

3,14,648.48

Other Income

1,753.97

1,028.04

4,006.96

607.00

Total Income

3,26,406.02

3,15,792.86

3,28,651.28

3,15,255.48

Operating Expenditure

2,47,202.62

2,50,411.07

2,46,725.13

2,49,710.42

Earnings before Interest, Tax, Depreciation and

79,203.39

65,381.77

81,926.15

65,545.06

Amortization (EBITDA)

Depreciation and Amortization Expenses

6,777.67

6,141.99

6,768.28

6,134.94

Finance Costs

6,924.35

5,483.99

6,922.72

5,481.79

Profit before Exceptional Items and Tax

65,501.38

53,755.80

68,235.15

53,928.32

Exceptional Items

-

-

-

-

Profit before Tax (PBT)

65,501.38

53,755.80

68,235.15

53,928.32

Tax expense:

Current Year

20,232.96

11,576.89

20,232.65

11,576.67

Deferred Tax Credit

1,824.19

2,239.27

1,824.19

2,239.27

Profit After Tax (PAT)

43,444.23

39,939.64

46,178.31

40,112.38

Other Comprehensive Income

16.84

(83.91)

16.84

(83.91)

Total Comprehensive Income for the year

43,461.07

39,855.73

46,195.15

40,028.47

Balance as per the last Financial Statements

1,45,683.98

1,10,804.63

1,43,942.51

1,08,890.42

Appropriations

i) Transfer from Radha Raj Ispat Private Limited

-

1,026.17

-

1,026.17

Pursuant to amalgamation into KRBL Limited

ii) Final Dividend including Tax on Dividend

5,426.30

-

5,426.30

-

iii) Transfer to General reserve

6,000.00

6,000.00

6,000.00

6,000.00

iv) Prior Period Items

-

2.55

-

2.55

Retained Earnings

1,77,718.75

1,45,683.98

1,78,711.36

1,43,942.51

Earning per equity share (Face Value of Rs.1 each)

i) Basic (In Rs.)

18.46

16.97

19.62

17.04

ii) Diluted (In Rs.)

18.46

16.97

19.62

17.04

2. FINANCIAL REVIEW

Pushed by strong shift in consumer preference towards branded basmati rice in the domestic market and export market, KRBL reported excellent numbers during the year 2017-18. The Company performed extremely well and the highlights of the performance on consolidated basis are as under:

- Company’s Revenue from Operations increased by 3% to Rs.3,246.52 Crores (P.Y. Rs.3,147.65 Crores).

- Company is able to maintain its strong Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and the same is increased by 21% to Rs.792.03 Crores (P.Y. Rs.653.82 Crores).

- Company’s Profit before Tax increased by 22% to Rs.655.01 Crores (P.Y. Rs.537.56 Crores) and Profit after Tax (PAT) increased by 9% to Rs.434.44 Crores (P.Y. Rs.399.40 Crores).

- Company’s Return on Capital Employed (ROCE) stands at 21%.

- Net Worth of the Company increased by 20% to Rs.2,287.90 Crores (P.Y. Rs.1,907.32 Crores).

- Market Capitalization increased by 6% to Rs.10,234 Crores (P.Y. Rs.9,699 Crores).

- 5 years Net Sales growth at CAGR of 9% and EBITDA growth at CAGR of 21%

- Earning per Equity Share increased to Rs.18.46 (P.Y. Rs.16.97).

- Dividend payable by the Company on the Profits earned in FY 2017-18 is 230% (i.e. Rs.2.30) per equity share of face value of Rs.1 each as compared to 210% (i.e. Rs.2.10) per equity share of face value of Rs.1 each as paid in the previous year.

3. DIVIDEND

Based on Company’s performance in the current year, the Board of Directors of the Company in their meeting held on May 10, 2018, has recommended a final dividend @ 230% i.e. Rs.2.30 per equity share of face value of Rs.1/- each for the year ended March 31, 2018. The same shall be paid subject to the approval of shareholders in the ensuing Annual General Meeting of the Company. The Dividend proposed is in accordance with the dividend distribution policy of the company and the details of Dividend proposed by the Company for the financial year 2017-18 as compared to year 2016-17 are as below:

Particulars of Dividend

Total Dividend Declared (Excluding Dividend Distribution Tax)

March 31, 2018

March 31, 2017

Final Dividend on 23,53,89,892 Equity shares of Rs.1 each @ Rs.2.30 per equity share.

54,13,96,752

-

Final Dividend on 23,53,89,892 Equity shares of Rs.1 each @ Rs.2.10 per equity share.

-

49,43,18,773

4. NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the financial year ended March 31, 2018, no entity became or ceased to be the subsidiary, joint venture or associate of the Company.

5. TRANSFER TO RESERVES

In view of the robust financial strength of the Company, a sum of Rs.60 Crores has been transferred to General Reserves out of the amount available for appropriations and an amount of Rs.1,787.11 Crores has been carried over to the Balance Sheet.

6. SHARE CAPITAL

The Paid up equity share capital of the Company as on March 31, 2018 was Rs.23.54 Crores. There has been no change in the Equity Share Capital of the Company during the year. The Company has no other type of securities except equity shares forming part of paid up capital.

7. TRANSFER OF UNCLAIMED DIVIDEND/ SHARES TO INVESTOR EDUCATION & PROTECTION FUND

Pursuant to the provisions of Section 124 read with Section 125 of the Companies Act, 2013, (previously Section 205 C of the Companies Act, 1956), your Company during the year 2017-18 has transferred a total amount aggregating to Rs.280,725 to the Investor Education and Protection Fund. This amount was lying unclaimed/ unpaid with the Company for a period of seven years after Declaration of Dividend for the Final financial year 2009-10.

Pursuant to the provisions of Section 124(6) of the Companies Act, 2013 read with Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, (as amended from time to time) (IEPF Rules) the Company has transferred 41,042 equity shares which belongs to total 45 Shareholders whose dividend was not been paid or claimed for seven consecutive years or more to the demat account of IEPF Authority i.e. INVESTOR EDUCATION AND PROTECTION FUND AUTHORITY MINISTRY OF CORPORATE AFFAIRS, bearing DP ID IN300708 and Client ID 10656671, being maintained with NSDL. Before transferring the above mentioned shares the Company has sent out individual communication to the concerned Shareholders whose shares were liable to be transferred to IEPF Authorities to take immediate action in the matter. Also, as required under the IEPF Rules, the Company has also published a Notice in the newspapers informing the Members who have not claimed their shares for a period of 7 years to claim the same from the Company.

8. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial statement relates and till the date of this Report.

9. CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of the Company during the financial year 2017-18.

10. SEGMENT REPORTING

A separate reportable segment forms part of Notes to the Financial Statements.

11. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS

Your Company has two subsidiaries viz., KRBL DMCC, Dubai, UAE and K B Exports Private Limited, India. There are no associate companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). Further there has been no material change in the nature of business of the subsidiaries during the financial year 2017-18.

The Consolidated Financial Statements of your Company for the financial year 2017-18 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued thereunder, applicable Indian Accounting Standards (Ind As) and the provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as the “SEBI Listing Regulations”). The consolidated financial statements have been prepared by consolidating audited financial statements of your Company and its subsidiaries, as approved by the respective Board of Directors. Further, pursuant to the proviso of sub section (3) of section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 a separate statement containing the salient features of the financial statements of Subsidiaries of the Company in the prescribed form AOC-1 is given in the Consolidated Financial Statements, forming part of this Annual report.

Consolidated Turnover grew by 3% to Rs.3,246.52 Crores as compared to Rs.3,147.65 Crores in the same period previous year. Consolidated Net Profit after Tax grew by 9% to Rs.434.44 Crores as compared to Rs.399.40 Crores in the previous year.

The financial statements of the subsidiary companies and related information are available for inspection by the members at the Registered Office of your Company during business hours on all days except Sunday and holiday upto the date of the Annual General Meeting (‘AGM’) as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office / Corporate Office of your Company. The financial statements including the consolidated financial statements, financial statements of subsidiaries and all other documents shall also be available on Company’s website www.krblrice.com in downloadable format.

12. QUALITY AND ACCOLADES

Your Company continues to win awards year-after-year, thus reiterating its credible market position. Details of the award won have been given in the ‘Management Discussion & Analysis Report’ forming part of this Annual Report.

13. BOARD OF DIRECTORS

As on March 31, 2018, your Company’s Board has a strength of 10 (Ten) Directors including 1 (One) Woman Director. The Chairman of the Board is an Executive Director. The composition of the Board is as below:

Category

Number of Directors

% to Total Number of Directors

Executive Directors (Including

5

50

Woman Director)

Independent Non-Executive

5

50

Directors

The detailed section on ‘Board of Directors’ is given in the ‘Report on Corporate Governance’ forming part of this Annual Report.

Mr. Alok Sabharwal was appointed as an additional director in the Board Meeting held on September 8, 2016 whose tenure was expired on September 26, 2017 i.e. at the Date of AGM of the company. The Members of the Company at the 24th Annual General Meeting held on September 26, 2017 had regularized the appointment of Mr. Alok Sabharwal as an Independent Non-Executive Director for period of 5 years w.e.f August 11, 2016 and also Ms. Priyanka Mittal as a Whole Time Director for period of 5 years w.e.f September 26, 2017.

Pursuant to the provisions of Section 149(13) of the Companies Act, 2013 and Articles of Association of the Company all directors except Independent Directors are liable to retire by rotation. The Independent Directors of your Company will hold office for 5 (Five) consecutive years from the date of 21st Annual General Meeting held on September 9, 2014, (except Mr. Alok Sabharwal who will hold office for 5 (Five) consecutive years w.e.f. August 11, 2016). No Independent Directors are liable to retire by rotation. However, they can resign from directorship any time before their respective tenure.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Arun Kumar Gupta and Mr. Anoop Kumar Gupta both Joint Managing Directors, retiring by rotation at the ensuing Annual General Meeting, are eligible and offer themeselves for re-appointment. This shall not constitute a break in the office of Mr. Arun Kumar Gupta and Mr. Anoop Kumar Gupta as the Joint Managing Directors respectively in the Company.

The brief resume of the Directors being re-appointed, the nature of their expertise in specific functional areas, names of companies in which they have held Directorships, Committee Memberships/ Chairmanships, their shareholding, etc. are furnished in the explanatory statement to the notice of the ensuing Annual General Meeting and also forming part of corporate Governance Report.

The Board recommends their re-appointment at the ensuing Annual General Meeting.

14. AUDIT COMMITTEE

As on March 31, 2018, the Audit Committee of KRBL Limited comprises of following 4 (four) Members, all are Independent Non-Executive Directors:

Name

Designation

Category

Mr. Devendra Kumar

Chairman

Non-Executive &

Agarwal

Independent

Mr. Ashwani Dua

Member

Non-Executive &

Independent

Mr. Vinod Ahuja

Member

Non-Executive &

Independent

Mr. Shyam Arora

Member

Non-Executive &

Independent

All the recommendation made by the Audit Committee was accepted by the Board of Directrs. The Powers and role of the Audit Committee are included in Corporate Governance forming part of this Annual Report.

15. KEY MANAGERIAL PERSONNELS

The Key Managerial Personnels (KMPs) of the Company in accordance with the provisions of Sections 2(51) and Section 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) for the time being in force) are as follows:

S. No.

Name of KMPs

Designation

1.

Mr. Anil Kumar Mittal

Chairman & Managing Director

2.

Mr. Arun Kumar Gupta

Joint Managing Director

3.

Mr. Anoop Kumar Gupta

Joint Managing Director

4.

Mr. Ashok Chand

Whole Time Director

5.

Ms. Priyanka Mittal

Whole Time Director

6.

Mr. Rakesh Mehrotra

Chief Financial Officer

7.

Mr. Raman Sapra

Company Secretary

During the year there was no change (appointment or cessation) in the office of any KMP.

16. POLICY ON REMUNERATION OF DIRECTORS, KMPs, SENIOR MANAGEMENT PERSONNEL AND OTHER EMPLOYEES

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy of KRBL Limited formulated in accordance with Section 134(3) (e) and Section 178(3) of the Companies Act, 2013 read with Regulation 19 of SEBI Listing Regulations (including any statutory modification(s) or re-enactment(s) for the time being in force). The salient aspects covered in the Nomination and Remuneration Policy have been outlined below:

i) To identify the persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board of directors their appointment and removal.

ii) To formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy relating to the remuneration of Directors, key managerial personnel and other employees of KRBL Limited.

iii) To formulate the criteria for evaluation of Independent Director and the Board.

iv) To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board and to determining whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors.

v) To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.

vi) To provide to Key Managerial Personnel and Senior Management reward linked directly to their effort, performance, dedication and achievement relating to the Company’s operations.

vii) To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

viii) To develop a succession plan for the Board and to regularly review the plan.

ix) To assist the Board in fulfilling responsibilities.

x) To implement and monitor policies and processes regarding principles of corporate governance.

The Nomination and Remuneration policy of KRBL Limited is available on the website of the company at the weblink www.krblrice.com/policy-guidelines/ nomination-renumeration-policy.pdf

17. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2017-18, 5 (Five) Board meetings were held. For details thereof kindly refer to the section ‘Board Meeting and Procedures - Details of Board Meetings held and attended by the directors during the financial year 2017-18, in the Corporate Governance Report forming part of this Annual Report.

18. PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

As the ultimate responsibility for sound governance and prudential management of a company lies with its Board, it is imperative that the Board remains continually energized, proactive and effective.

The Board evaluated the effectiveness of its functioning and its Committees and of individual directors by seeking their inputs on various aspects of Board/Committee Governance.

The aspects covered in the evaluation included the contribution to and monitoring of corporate governance practices, participation in the long-term strategic planning and the fulfillment of Directors’ obligations and fiduciary responsibilities, including but not limited to, active participation at the Board and Committee meetings.

The Companies Act, 2013 not only mandates board and director evaluation, but also requires the evaluation to be formal, regular and transparent. Subsequently, SEBI Listing Regulations has also contained the provisions regarding requirement of performance evaluation of independent directors by the entire board of directors.

In accordance with the framework as recommended by the Nomination and Remuneration Committee and approved by the Board of Directors, the Board of Directors of the Company in their Meeting held on January 24, 2018, had carried out the performance evaluation process.

The Independent Directors of the Company met separately without the presence of Non-Independent Directors and inter-alia reviewed the performance of the members of management, Non-Independent Directors, Board as a whole performance of the Chairman of the Company and the Committees after taking into consideration the views of Executive and Non-Executive Directors.

In compliance with the provisions of SEBI Listing Regulations, the Board of Directors has also carried out evaluation of every Independent Director’s performance during the year. Board members had submitted to Nomination and Remuneration Committee, their response on a scale from 5 (Excellent) to 1 (Performance Needs Improvement) for evaluating the entire Board, respective Committees of which they are members and of their peer Board members, including Chairman of the Board.

The Nomination and Remuneration Committee has also carried out evaluation of every Director’s performance.

The Directors expressed their satisfaction with the evaluation process.

It was further acknowledged that every individual Member and Committee of the Board contributed its best in the overall growth to the organization.

19. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the provisions under Section 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, the Directors confirm:

i) that in the preparation of the Annual Accounts for the year ended March 31, 2018, the applicable Indian Accounting standards (Ind AS) have been followed and that there are no material departures;

ii) that appropriate accounting policies have been selected and applied consistently and judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs as at March 31, 2018 and of the profit of the Company for the Financial year ended March 31, 2018;

iii) that proper and sufficient care has been taken 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) that the annual accounts for the year ended March 31, 2018 have been prepared on a going concern basis;

v) that they had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

vi) that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

20. DECLARATION BY INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT, IF ANY

All Independent Directors have submitted their disclosures to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with SEBI Listing Regulations so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and SEBI Listing Regulations.

21. OPERATIONS, PERFORMANCE AND FUTURE OUTLOOK OF THE COMPANY

A detailed review of operations and performance and future outlook of the Company is given separately under the head ‘Management Discussion & Analysis’ pursuant to Regulation 34 read with Part B of Schedule V of SEBI Listing Regulations, and the same is annexed and forms part of this Annual Report.

22. ENERGY CONSERVATION, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Pursuant to provisions of Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 the details of activities in the nature of Energy Conservation, Research and Development, Technology Absorption and Foreign Exchange Earnings and Outgo is attached as ‘Annexure 1’ which forms part of this report.

23. PARTICULARS OF REMUNERATION OF DIRECTORS AND KMPs

A statement containing the details of the Remuneration of Directors and KMPs as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended by Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016. is attached as ‘Annexure 2’ which forms part of this Report.

24. EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014 an extract of the Annual Return in Form MGT-9 is attached as ‘Annexure 3’ which forms part of this Report.

25. AUDITORS AND AUDITORS’ REPORT

I) STATUTORY AUDITORS

M/s. S S A Y & Co., Chartered Accountants, (Firm Regn. No. 012493N) having their office at 2nd Floor, Plot No. 3, Local Shopping Complex, B Block Market, Vivek Vihar, Phase-1, New Delhi-110 095 are the Statutory Auditors of the Company.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 and rules framed thereunder, the Company in its 24th Annual General Meeting held on September 26, 2017, had appointed M/s. Vinod Sanjeev Bindal & Co., Chartered Accountants presently known as M/s. S S A Y & Co., Chartered Accountants, (Name changed w.e.f October 24, 2017) as Statutory Auditors of the company to hold office from conclusion of 24th Annual General Meeting till the conclusion of 29th Annual General Meeting of the Company to be held in the year 2022.

The Notes on financial statement referred to in the Auditors’ Report are self-explanatory and do not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of Companies Act, 2013 read with rules framed thereunder, either to the Company or to the Central Government.

II) COST AUDITORS

As per Section 148 of the Companies Act, 2013 read with notification issued by Ministry of Corporate Affairs regarding the Cost Audit of Power Generation segment, the Company is required to have the audit of its cost records conducted by a Cost Accountant in Practice. In this connection, the Audit Committee of KRBL Limited has recommended to the Board of Directors and the Board of Directors has approved the re-appointment of M/s. HMVN & Associates, Cost Accountants, having their office at, 1011, Pearls Best Heights-II, C-09, Netaji Subhash Place, Pitampura, Delhi-110034, as Cost Auditors of the Company to conduct the Cost Audit for the financial year 2018-19.

As required under the provisions of Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditors for the financial year 2018-19 forms part to the Notice convening the Annual General Meeting of the Company.

Further the Cost Audit Report for the financial year 2016-17 was filed with Ministry of Corporate Affairs.

III) SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s DMK Associates, Company Secretaries, having their office at, 31/36 Basement, Old Rajender Nagar, Delhi-110060, to undertake the Secretarial Audit functions of the Company.

The Secretarial Audit Report submitted by M/s DMK Associates in the prescribed form MR- 3 is attached as ‘Annexure 4’ which forms part of this Report.

As per the observations given by the Secretarial Auditors, the explanation to the same has been given to them which forms part of the Secretarial Audit Report. Further the justification for unspent CSR amount is also being given in ‘Annexure 5’ under Annual Report on CSR Activities which forms part of this Report.

26. CORPORATE GOVERNANCE

At KRBL Limited, it is our firm belief that the quintessence of Good Corporate Governance lies in the phrase ‘Your Company. It is ‘Your Company’ because it belongs to you - the stakeholders. The Chairman and Directors are ‘Your’ fiduciaries and trustees.

Your Company has evolved and followed the corporate governance guidelines and best practices sincerely to not just boost long-term shareholder value, but to also respect minority rights. We consider it our inherent responsibility to disclose timely and accurate information regarding our financials and performance, as well as the leadership and governance of the Company.

Your Company is devoted to benchmarking itself with global standards for providing Good Corporate Governance. The Companies Act, 2013 and SEBI Listing Regulations have strengthened the governance regime in the country. Your Company is in compliance with the governance requirements provided under the new law and listing regulations.

The Board has also evolved and implemented a Code of Conduct based on the principles of Good Corporate Governance and best management practices being followed globally. The Code is available on the Company’s website at the web link: www.krblrice.com/policy-guidelines/code_ of_business_conduct_ethics.pdf. A separate section titled ‘Report on Corporate Governance’ has been included in this Annual Report along with Secretarial Auditors Certificate on Corporate Governance.

The Company has also adopted the below mentioned policies and codes in line with new governance requirements:

- Policy on Preservation of Documents and Archival.

- Nomination and Remuneration Policy.

- Vigil Mechanism (Whistle Blower Policy).

- Corporate Social Responsibility Policy.

- Dividend Distribution Policy.

- Policy for Determination of Materiality.

- Policy on Related Party Transactions.

- Policy for Determining Material Subsidiaries.

- Board Diversity Policy.

- Code of Fair Disclosure.

- Code of Conduct to Regulate, Monitor and Report Trading by Insiders.

- Code of Business Conduct and Ethics for The Board of Directors, Senior Management Personnel and Other Employees.

All the above mentioned policies are available on the Company’s website www.krblrice.com under the head Investors Relations.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

KRBL Limited believes sustained growth of business lies on triple bottom line that is growth of people around our operation, protection of environment where we operate and profit from our business. We understand wellbeing of the community around our business which helps in growth of business and hence we value people around our operational locations and promote inclusive growth.

We endeavour to serve the society and achieve excellence. We continue to remain focused on improving the quality of life and engaging communities through ensuring environment sustainability, promoting healthcare, promoting education and many more activities.

Pursuant to Section 135 of the Companies Act, 2013, and the relevant rules, the Company is having in place the Corporate Social Responsibility (CSR) Committee under the chairmanship of Mr. Anil Kumar Mittal, Chairman and Managing Director. The other members of the Committee are Mr. Anoop Kumar Gupta, Joint Managing Director, Ms. Priyanka Mittal, Whole Time Director and Mr. Ashwani Dua, Independent Non-Executive Director.

The Company’s policy on CSR envisages expenditure in areas falling within the purview of Schedule VII of the Companies Act, 2013. The detailed CSR policy is available on the company’s website at the weblink: http://www. krblrice.com/policy-guidelines/policy-corporate-social-responsibility.pdf

During the year Company was involved in various CSR activities. The Annual Report on CSR activities is attached as ‘Annexure 5’ which forms part of this report.

28. BUSINESS RESPONSIBILITY REPORT (BRR)

Fulfillment of environmental, social and governance responsibilities is part of KRBL’s business culture. KRBL is fortunate to be among the top 500 listed entities and finds itself within the ambit of SEBI’s Listing Regulations, which mandate the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for the top 500 listed entities based on market capitalization. In compliance, the BRR disclosures are integrated into the Annual report and aimed at describing KRBL’s initiatives in discharging responsibilities from an environmental, social and governance perspective. The BRR is attached as ‘Annexure 6’ which forms part of this report.

29. INTERNAL FINANCIAL CONTROL SYSTEM

According to Section 134(5)(e) of the Companies Act, 2013, the term Internal Financial Control (IFC) means the policies and procedures adopted by the company for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly.

Your Company has appointed M/s. S S Kothari Mehta & Co., Chartered Accountants, having their office at Plot No. 68, Okhla Industrial Area, Phase-III, New Delhi-110020, as the Internal Auditors of the Company w.e.f. April 1, 2017, to focus on internal audit function which includes strengthening the standard operating procedure and accounting manual of the company.

Independence of the audit and compliance is ensured by direct reporting of Internal Audit Team to the Audit Committee of the Board.

30. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Companies Act, 2013 re-emphasizes the need for an effective Internal Financial Control system in the Company. The system should be designed and operated effectively. Rule 8(5)(viii) of Companies (Accounts) Rules, 2014 requires the information regarding adequacy of Internal Financial Controls with reference to the financial statements to be disclosed in the Boards report.

To ensure effective Internal Financial Controls the Company has laid down the following measures:

- All operations are executed through Standard Operating Procedures (SOPs) in all functional activities for which key manuals have been put in place. The manuals are updated and validated periodically.

- The Company’s books of accounts are maintained in SAP and transactions are executed through SAP (ERP) setups to ensure correctness/effectiveness of all transactions, integrity and reliability of reporting.

- The Company has a comprehensive risk management framework.

- The Company has in place a well-defined Vigil Mechanism (Whistle Blower Policy).

- Compliance of secretarial functions is ensured by way of secretarial audit.

- Compliance relating to cost records of the company is ensured by way of cost audit.

- Compliance relating to internal control system of the company is ensured by way of internal audit.

31. RISK MANAGEMENT

A key factor in determining a company’s capacity to create sustainable value is the risks that the company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a company’s operating environment and they emerge on a regular basis. The Company’s Risk Management processes focuses on ensuring that these risks are identified on a timely basis and addressed.

The company has laid down a risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out to identify, evaluate, manage and monitor non-business risks.

32. RATINGS

The Company received various ratings, which are as follows:

- ICRA: In December 2017, “ICRA” has reviewed and reaffirmed [ICRA] AA Stable (pronounced as ICRA double A Stable) rating for Fund Based Working Capital Limits and Term Loans Limits and [ICRA] A1 (pronounced as ICRA A One Plus) for Non-Fund Based Facilities of KRBL Limited.

- ICRA: In December 2017, “ICRA” has also reviewed and reaffirmed [ICRA] A1 (pronounced as ICRA A One Plus) rating for Commercial Paper (CP) programme of KRBL Limited.

- CARE: In December 2017, “CARE” has given the [CARE] A1 (pronounced as CARE A one plus) rating for Commercial Paper (CP) of KRBL Limited.

- DUN & BRADSTREET: In February 2018, Dun & Bradstreet has given a Top Business Rating of “5A1” to KRBL Limited considering the VIP Report dated February 26, 2018 in which “5A” stands for Company having a Tangible Net Worth of more than Rs.64,59,49,999 and further “1” in the above rating indicates a “Strong” overall status of the Company.

33. DISCLOSURE ON DEPOSITS UNDER CHAPTER V

The Company has neither accepted nor renewed any deposits during the Financial Year 2017-18 in terms of Chapter V of the Companies Act, 2013. Further, the Company is not having any Unpaid or Unclaimed Deposits at the end of the Financial Year.

34. PERSONNEL

During the year under review, no employees, whether employed for the whole or part of the year, was drawing remuneration exceeding the limits as laid down u/s Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended by Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016.

The particulars regarding the remuneration of directors and KMPs as per Section 197 of the Companies Act, 2013, (“the Act”) read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is also being given in “Annexure 2” forms part of the Directors’ Report. However, as per the provisions of Section 136 of the Act, the report and accounts are being sent to the Members and others entitled thereto, excluding the information on employees’ remuneration particulars as required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, which is available for inspection by the members at the Registered Office/ Corporate Office of the Company during business hours on working days of the company upto the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member in this regard may write to the Company Secretary at the Registered Office/ Corporate Office of your Company.

35. PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company is committed to provide a protective environment at workplace for all its women employees. To ensure that every woman employee is treated with dignity and respect and as mandated under “The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013” the Company has in place a formal policy for prevention of sexual harassment at work place and the Company has also Constituted the Internal Complaint Committee in compliance with the requirement of the Act. The policy is available on company’s website at the weblink: www.krblrice.com/ policy-guidelines/SEXUAL%20HARASSMENT%20POLICY. pdf

The Company has not received any Complaints on Sexual Harassment during the year. The Internal Complaints Committees of the Company has also submitted its Annual Report on Sexual Harassment to Mr. Anoop Kumar Gupta, Joint Managing Director, and also to Concerned District officer where the Committee locates declaring that no Complaints were received during the year.

36. DEPOSITORY SYSTEMS

Company’s shares are compulsorily tradable in electronic form. As on March 31, 2018, almost 99.89% of the Company’s Paid-up Equity Share Capital representing 235,126,978 Equity Shares are in dematerialized form with both the depositories.

Your Company has established connectivity with both depositories - National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In view of the numerous advantages offered by the depository system, members holding Shares in physical mode are requested to avail of the dematerialization facility with either of the depositories.

Your Company has appointed M/s. Alankit Assignments Limited, a Category-I SEBI registered R&T Agent as its Registrar and Share Transfer Agent across physical and electronic alternative.

37. CHANGE IN CAPITAL STRUCTURE AND LISTING OF SHARES

During the year under review there was no Change in Capital Structure and Listing of Shares.

The Company’s shares are listed and actively traded on the below mentioned Stock Exchanges:-

I. National Stock Exchange of India Limited (NSE)

“Exchange Plaza” C-1, Block G,

Bandra-Kurla Complex,

Bandra (East), Mumbai - 400 051

II. BSE Limited (BSE)

Phiroze Jeejeebhoy Towers,

25th Floor, Dalal Street,

Mumbai - 400 001

38. PARTICULARS OF LOAN(S), GUARANTEE(S) OR INVESTMENT(S) UNDER SECTION 186 OF THE COMPANIES ACT, 2013

During the financial year ended March 31, 2018, the Company has neither made any investment(s) nor given any loan(s) or guarantee(s) or provided any security.

39. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188(1) OF THE COMPANIES ACT, 2013

During the financial year 2017-18, your Company has entered into transactions with related parties as defined under Section 2(76) of the Companies Act, 2013, read with Companies (Specification of Definitions Details) Rules, 2014, all of which were in the ordinary course of business and on arm’s length basis and in accordance with the provisions of the Companies Act, 2013, read with the Rules issued thereunder and the SEBI Listing Regulations. Further, there were no transactions with related parties which qualify as material transactions under the SEBI Listing Regulations.

The Audit Committee of KRBL Limited has considered, approved and recommended to Board for Omnibus Approval and criteria for omnibus approval for entering into transactions with related parties for the financial year 2017-18, which was further approved by the Board. The transactions entered pursuant to the omnibus approval so granted and statement giving details of all transactions with related parties are placed before the Audit Committee for their review on a periodic basis.

The details of the related party transactions as per Indian Accounting Standard Ind AS 24 are set out in Note 30.04 to the Standalone Financial Statements forming part of this report. Further Form No. AOC-2 is attached as ‘Annexure 7’ which forms part of this report.

The Company has also adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company’s website at the weblink: www.krblrice.com/policy-guidelines/policy-related-party.pdf

40. DISCLOSURE ON VIGIL MECHANISM (WHISTLE BLOWER POLICY)

Pursuant to Regulation 22 of SEBI Listing Regulations, your Company has established a mechanism called ‘Vigil Mechanism (Whistle Blower Policy)’ for directors and employees to report to the appropriate authorities of unethical behaviour, actual or suspected, fraud or violation of the Company’s code of conduct or ethics policy and provides safeguards against victimization of employees who avail the mechanism. The policy permits all the directors and employees to report their concerns directly to the Chairman of the Audit Committee of the Company.

‘The Vigil Mechanism (Whistle Blower Policy)’ as approved by the Board, is uploaded on the Company’s website at the weblink http://www.krblrice.com/policy-guidelines/vigilmechanism-whistle-blower-policy.pdf

41. ENVIRONMENT, HEALTH AND SAFETY

Company is continue to focus on employee well-being, developing safe and efficient products, minimizing environmental impact of our operations and products and minimizing the impact of our operations on society. Company is conducting its operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

For safety and protection of employees, the company has formulated and implemented a policy on preservation of sexual harassment at the workplace with a mechanism of lodging complaints.

42. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERNS STATUS AND COMPANY’S OPERATIONS IN FUTURE

The Company has not received any significant or material orders passed by any Regulatory Authority, Court or Tribunal which shall impact the going concern status and Company’s operations in future.

43. INDUSTRIAL RELATIONS

The Company has maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the Industry. It has taken various steps to improve productivity across organization.

Your Company continued to receive co-operation and unstinted support from the distributors, retailers, stockists, suppliers and others associated with the Company as its trading partners. The Directors wish to place on record their appreciation for the same and your Company will continue in its endeavor to build and nurture strong links with trade, based on mutuality, respect and co-operation with each other and consistent with consumer interest.

44. SECRETARIAL STANDARDS

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings, respectively, have been duly followed by the Company.

45. CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING

KRBL Limited has duly adopted Code of Conduct to Regulate, Monitor and Report Trading by Insider. The said Code is available on the website of the Company at the web link http://www.krblrice.com/policy-guidelines/ code_of_conduct_insider_trading.pdf

45. APPRECIATION

It is our strong belief that caring for our business constituents has ensured our success in the past and will do so in future. The Board acknowledges with gratitude the co-operation and assistance provided to your company by its bankers, Financial institutions, and government as well as Non-Government agencies. The Board wishes to place on record its appreciation to the contribution made by employees of the company during the year under review. The Company has achieved impressive growth through the competence, hard work, solidarity, cooperation and support of employees at all levels. Your Directors gives their sincere gratitude to the customers, clients, vendors and other business associates for their continued support in the Company’s growth.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.

for and on behalf of the Board of Directors

Sd/-

Anil Kumar Mittal

Place: Noida, Uttar Pradesh Chairman & Managing Director

Date: July 24, 2018 DIN: 00030100

Source : Dion Global Solutions Limited
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