To The Members, KRBL Limited 5190, Lahori Gate, Delhi - 110 006
The Directors are delighted to present their Report on Company’s Business Operations along with the Audited Statement of Accounts for the Financial Year ended March 31, 2016.
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 2015-16 along with the previous financial year 2014-15 are tabulated below:
(Rs,in Lacs, except as stated)
Year Ended March 31, 2016
Year Ended March 31, 2015
Year Ended March 31, 2016
Year Ended March 31, 2015
Revenue from Operations
Other Operating Income
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA)
Depreciation and Amortization Expenses
Profit before Exceptional Items and Tax
Exceptional Items - Foreign Exchange Fluctuation (Gain)/Loss
Profit before Tax (PBT)
Mat Credit Entitlement
Profit After Tax (PAT)
Balance as per the last Financial Statements
i) Interim Dividend
ii) Proposed Dividend-Final
iii) Transfer to General Reserve
iv) Transitional Adjustment on Account of Depreciation
Closing Balance of P&L A/c
EARNING PER EQUITY SHARE (Face Value of Rs,1 each)
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 2015-16. The Company performed extremely well and the highlights of the performance on consolidated basis are as under:
- Company’s Revenue from Operations increased by 7% to
Rs,3,374 Crores (PY. Rs,3,160 Crores).
- Company is able to maintain its strong Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) and the same is increased by 3% to Rs,543 Crores (PY. Rs,528 Crores).
- Company’s Profit before Tax increased by 9% to Rs,430 Crores (PY. Rs,394 Crores) and Profit after Tax (PAT) increased by 5% to Rs,337 Crores (PY. Rs,322 Crores).
- Company’s Return on Capital Employed (ROCE) stands at
- Net Worth of the Company increased by 23% to Rs,1,624 Crores (PY. Rs,1,325 Crores).
- Market Capitalization increased by 32% to Rs,5,193 Crores (PY. Rs,3,925 Crores).
- 3 years Net Sales growth CAGR of 17% and EBITDA growth CAGR of 21%.
- Earning per Equity Share increased to Rs,14.32 (PY. Rs,13.67).
- Dividend declared/paid by the Company on the Profits earned in FY 2015-16 is 190% as compared to 170% in the previous year.
Based on Companies, performance in the current year, the Board of Directors of the Company at their meeting held on March 10, 2016 has declared an interim dividend @ 190% that is Rs,1.90 per paid up equity share of Rs,1/- each for the financial year 2015-16 and the same was paid to Equity Shareholders on March 19, 2016. Details of Dividend paid by the Company in the year 2015-16 as compared to the year 2014-15 are as below:
(Amount in '''')
Particulars of Dividend
Total Dividend Outgo
March 31, 2016
March 31, 2015
Interim Dividend on 23,53,89,892 Equity shares of Rs,1 each @ Rs,1.90 per share
Final Dividend on 23,53,89,892 Equity shares of Rs,1 each @ Rs,1.70 per share
In view of the amended provision of section 115-O(1A)(i) of the Income Tax Act, 1961, no Corporate Dividend Tax has been deposited as the same has been set-off by Foreign Dividend received from its Subsidiary Company against declared dividend of KRBL Limited.
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, 2016, 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,1,233 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, 2016 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 TO INVESTOR EDUCATION & PROTECTION FUND
Pursuant to the provisions of Section 124 read with Section 125 of the Companies Act, 2013, previously Section 205C of the Companies Act, 1956, your Company has transferred Rs,1,98,610 during the year 2015-16 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 financial year ended 2007-08.
8. AMALGAMATION OF RADHA RAJ ISPAT PRIVATE LIMITED WITH KRBL LIMITED
The Scheme of Amalgamation between Radha Raj Ispat Private Limited (“Amalgamating Company”) and their respective shareholders and creditors with “KRBL Limited (“the Amalgamated Company”) was approved by the Hon’ble High Court of Delhi vide its order dated April 7, 2016 (Pronouncement Date). The formal order of Hon’ble High Court of Delhi was also issued on May 24,
2016 which was placed before the Board at their meeting held on dated May 26, 2016. The appointed date for the Scheme was April 1, 2015. The Scheme was effective from June 1, 2016, being the date of filing of the High Court order with the Registrar of Companies, NCT of Delhi & Haryana.
The Amalgamated Company has also issued and allotted Equity Shares to the Equity Shareholders of the Amalgamating Company in the proportion of their Equity Shareholding in the Amalgamating Company.
9. 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 statements relates and the date of this Report.
10. CHANGE IN THE NATURE OF BUSINESS, IF ANY
There is no change in the nature of business of the Company during the financial year ended March 31, 2016.
11. SEGMENT REPORTING
A separate reportable segment forms part of Notes to the Accounts.
12. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS
Your Company has two subsidiaries viz., KRBL DMCC, Dubai 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.
The Consolidated Financial Statements of your Company for the financial year 2015-16 are prepared in compliance with applicable provisions of the Companies Act, 2013 read with the Rules issued there under, applicable Accounting Standards 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 has been disclosed in the Consolidated Financial Statements, which forms part of this report.
Consolidated Turnover grew by 7% to Rs,3,374 Crores as compared to Rs,3,160 Crores in the same period previous year. Consolidated Net Profit after Tax grew by 5% to Rs,337 Crores as compared to Rs,322 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 Saturdays, Sundays and public holidays up to 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 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 a downloadable format.
13. BOARD OF DIRECTORS
As on March 31, 2016, your Company’s Board has a strength of 9 (Nine) Directors including 1 (One) Women Directors. The Chairman of the Board is an Executive Director. The composition of the Board is as below:
No. of Directors
% to Total No. of Directors
(Including Woman Director)
The detailed section on ‘Board of Directors ,is given in the separate section titled ‘Report on Corporate Governance forming part of this Annual Report.
During the year Dr. Narpinder Kumar Gupta, Independent Non Executive Director, has resigned from the office of Independent Non-Executive Director of the company. Further, no other Director or Key Managerial Personnel has been appointed or has retired or resigned during the year.
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 be retire by rotation. The Independent Directors of your Company hold office up to 31st March, 2019 and are not liable to retire by rotation.
In accordance with the provisions of Section 152 of the Companies Act, 2013 and Articles of Association of the Company, Mr. Anoop Kumar Gupta, Joint Managing Director and Mr. Ashok Chand, Whole Time Director, retiring by rotation at the ensuing Annual General Meeting, are eligible for re-appointment. This shall not constitute a break in the office of Mr. Anoop Kumar Gupta and Mr. Ashok Chand as the Joint Managing Director and whole Time Director respectively in the Company.
The brief resume of the Directors being reappointed, 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.
The Board recommends their re-appointment at the ensuing Annual General Meeting.
14. AUDIT COMMITTEE
As on March 31, 2016, the Audit Committee of KRBL Limited comprises of following 4 (four) Members, all are Independent Non Executive Directors:
Mr. Devendra Kumar Agarwal
Non-Executive & Independent
Mr. Ashwani Dua
Non-Executive & Independent
Mr. Shyam Arora
Non-Executive & Independent
Mr. Vinod Ahuja
Non-Executive & Independent
All the recommendation made by the Audit Committee were accepted by the Board of Directors. The Powers and role of the Audit Committee are included in Corporate Governance Report forming part of this Annual Report.
15. KEY MANAGERIAL PERSONNELS
The Key Managerial Personnel’s (KMPs) of the Company in accordance with the provisions of Section 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:
Name of KMPs
Mr. Anil Kumar Mittal
Chairman & Managing Director
Mr. Anoop Kumar Gupta
Joint Managing Director
Mr. Arun Kumar Gupta
Joint Managing Director
Mr. Ashok Chand
Whole Time Directors
Ms. Priyanka Mittal
Whole Time Directors
Mr. Rakesh Mehrotra
Chief Financial Officer
Mr. Raman Sapra
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 we blink
17. NUMBER OF MEETINGS OF THE BOARD
During the Financial Year 2015-16, 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 2015-16, 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. An important way to achieve this is through an objective stock taking by the Board of its own performance.
The Board evaluated the effectiveness of its functioning and that of the 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 directors 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 its Meeting held on February 2, 2016, authorized the Nomination and Remuneration Committee to carry out the performance evaluation process.
The Independent Directors of the Company met separately without the presence of Non-Independent Directors and the members of management and reviewed, inter-alia, the performance of Non Independent Directors and Board as a whole and the performance of the Chairman of the Company 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 contribute its best in the overall growth of 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, 2016, the applicable Accounting standards 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, 2016 and of the profit of the Company for the Financial year ended March 31, 2016;
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, 2016 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, 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 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 Annual Report.
23. PARTICULARS OF REMUNERATION OF DIRECTORS AND KMP’S
A statement containing the details of the Remuneration of Directors and KMP’s as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure 2Rs,which forms part of this Annual Report.
24. EXTRACT OF ANNUAL RETURN
Pursuant to the provisions of Section 92(3) of the Companies Act, 2013 read with Rule 12 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 Annual Report.
25. AUDITORS AND AUDITORS REPORT
i) STATUTORY AUDITORS
M/s. Vinod Kumar Bindal & Co., Chartered Accountants, having their office at Shiv Sushil Bhawan, D-219, Vivek Vihar Phase-1, New Delhi-110095, are the Statutory Auditors of the Company.
Pursuant to the resolution passed by the Members of the Company at the 21st Annual General Meeting (AGM) held on September 9, 2014, in respect of appointment of M/s. Vinod Kumar Bindal & Co., Chartered Accountants, as Statutory Auditors of the Company, to hold the office till the conclusion of the AGM to be held in the year 2017 and as required under the provisions of Companies Act, 2013, a resolution seeking members approval for the ratification and confirmation of the appointment of M/s. Vinod Kumar Bindal & Co., Chartered Accountants, as Statutory Auditors of the Company to hold office from the conclusion of this AGM till the conclusion of the 24th Annual General Meeting to be held in the year
2017 forms part of the Notice convening the Annual General Meeting of the Company.
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.
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 reappointment of M/s. HMVN & Associates, Cost Accountants, having their office at, 1011, Pearls Best Heights-II, C-9, Netaji Subhash Place, Pritampura, Delhi-110034, as Cost Auditors of the Company to conduct the Cost Audit Functions for the financial year 2016-17.
As required under the provisions of Companies Act, 2013, a resolution seeking members approval for the remuneration payable to the Cost Auditors forms part of the Notice convening the Annual General Meeting of the Company.
The Cost Audit Report for the financial year 2014-15 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 4Rs,which forms part of this Annual Report.
As per the observation as given by the Secretarial Auditors regarding the Non-Composition of Board, the explanation to the same has been given to the Secretarial Auditors which forms part of the Secretarial Audit Report and the detailed explanation is also being given in under the head Board of Directors under Size and Composition of Board in the Corporate Governance Report which forms part of this Annual Report.
As per the observation as given by the Secretarial Auditors regarding the CSR Amount not spent by the company, the explanation to the same has been given to the Secretarial Auditors which forms part of the Secretarial Audit Report and the detailed justification to the same is also being given in Annexure 5 under Annual Report on CSR Activities which forms part of the Directors 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 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 of KRBL Limited.
- Nomination and Remuneration Policy.
- Vigil Mechanism (Whistle Blower Policy).
- Corporate Social Responsibility Policy.
- Dividend 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 Investor Relations.
17. 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 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 and 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 we blink: www.krblrice.com/policy-guidelines/policy-corporate-social-reponsiblity.pdf.
During the year Company was involved in various CSR activities. The Annual Report on CSR activities is attached as Annexure 5Rs,which forms part of this report.
28. 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. Ernst & Young LLP (“EY”), Golf View Corporate Tower-B, Sector-42, Sector Road, Gurgaon-122002, Haryana, as the Internal Auditors of the Company w.e.f October 1, 2015, to focus on review of business processes and suggest improvements as applicable.
Independence of the audit and compliance is ensured by direct reporting of Internal Audit Team to the Audit Committee of the Board.
29. 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 Board''''s 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.
30. 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 and non-business risks.
31. ADOPTION OF NEW ARTICLES OF ASSOCIATION OF YOUR COMPANY
During the financial year 2015-16, the new Articles of Association of your Company were adopted with the prior approval of shareholders in accordance with the provisions of the Companies Act, 2013 read with the Rules there under.
The Company received various ratings, which are as follows:
- ICRA: In September 2015, “ICRA” has reviewed and reaffirmed [ICRA] AA- (pronounced as ICRA AA Minus) rating for Term Loan Facilities & Fund Based facilities and A1 (pronounced as ICRA A one plus) for Non Fund Based Facilities.
- ICRA: In May 2016, “ICRA” has also reviewed and reaffirmed [ICRA] A1 (pronounced as ICRA A one plus) rating for Commercial Paper (CP) programme for Rs,400 Crores.
33. DISCLOSURE ON DEPOSITS UNDER CHAPTER V
The Company has neither accepted nor renewed any deposits during the Financial Year 2015-16 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.
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 Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
Hence the details required under Section 197(12) are not required to be given.
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 across all its locations in Compliance with the requirement of the Act.
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
As the members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2016, almost 99.83% of the Company’s Paid-up Capital representing 23,49,90,406 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
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 (East), Mumbai — 400 051
II. BSE Limited (BSE)
Phiroze Jeejeebhoy Towers,
25th Floor, Dalal Street,
Mumbai — 400 001
During the year under review there is no Change in Capital Structure and Listing of Shares.
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, 2016, 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 2015-16, 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 there under and the SEBI Listing Regulations. Further, there were no transactions with related parties which qualify as material transactions under the SEBI Listing Regulations.
The details of the related party transactions as per Accounting Standard 18 are set out in Note 30.24 to the Standalone Financial Statements forming 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 we blink: 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 behavior, 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 we blink
41. 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.
42. INDUSTRIAL RELATIONS
The Company 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, stockiest, 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.
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 thanks 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
Anil Kumar Mittal
Place : Noida, Uttar Pradesh Chairman & Managing Director
Date : July 23, 2016 DIN-00030100