As on: May 28, 2022 01:26 AM
The following report should be read in conjunction with the audited financial statements and notes for the year ended March 31, 2021 and the audited financial statements and notes for the year ended March 31,2020. This report contains forward looking statements, which may be identified by their use of words like 'plans', 'expects', 'will', 'anticipates', 'believes', 'intends', 'projects', 'estimates' or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the Company's strategy for growth, market position, expenditures, and financial results, are forward looking statements. Forward looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realized. The Company's actual results, performance or achievements could thus differ materially from those projected in any such forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.
Company - In General
Synonymous with the fine taste of India in its absolute authentic form, the sole objective of Kohinoor Foods Limited, since its inception, has been to make the world experience the true Indian flavor. The Company offers an extensive range that caters to consumers' need in all parts of the world - a wide variety of Basmati Rice, Ready to Eat Curries & Meals, Readymade Gravies, Cooking Pastes, Chutney's, Spices and Seasonings to Frozen Breads, Snacks & Paneer (Indian Cottage Cheese), healthy grains, edible oils. Today, the most powerful brand of the Company "Kohinoor" is a household name in the countries like USA, UAE, Canada, Australia, Middle East, Singapore, Japan, Mauritius & other European countries. As of now, the brand 'Kohinoor' is known worldwide.
Your Directors have pleasure in presenting the 32nd Annual Report and the Audited Annual Accounts of the Company for the Financial Year ended 31st March, 2021.
Financial Overview
The financial highlights for the year ending 31st March, 2021 are as under:
(Rs. In Million)
The Board's Report has been prepared based on the stand alone financial statements of the Company.
Operations
During the Year, your company focused on the restructuring of the company operations due to various constraint faced due to financial crisis, various measures have been taken for reduction of the cost of operation. Despite of the factors faced by the company during the year you company remain committed to providing world class quality product to its consumer, focused in improving operational efficiencies across its functions and enhancing its reach to the global consumers.
For the financial year under review 2020-21, the contribution made by Rice to the Company's business is INR 73.33 million as against INR 116.56 million in previous year while as the Food Business stood at INR 304.84 million as against INR 198.48 million in the last financial year.
The year saw an increase of 153.58% in food business in sales in value terms in comparison to last year sales. Sales market was down due to instability in country such as current pandemic Covid-19 / lock down and the financial constraint faced by the Company.
Impact of Covid-19 Pandemic
Details of the impact of Covid-19, have been provided in the notes to financial statements forming part of this report.
Subsidiaries / Joint Venture
U.K. Operations
Indo European Foods Limited (IEFL) was incorporated in year 2000 in United Kingdom (UK), as a wholly owned subsidiary of Kohinoor Foods Limited (KFL), India, to cater the markets of UK and Europe.
IEFL Sales show marginal increase from last year i.e GBP 23.26 Million in comparison of last year GBP 20.28 Million. Overall, the effect on UK Food sector was a positive one on the eat-in at home demand. IEFL earned a total profit of GBP 2.38 Million in comparison of last year profit of GBP 0.65 Million.
The Company had obtained approval from its members vide postal ballot meeting held on 10.01.2021 and the Board in its meeting held on 30.03.2021 approved a strategic disinvestment in its Wholly Owned foreign Subsidiary, M/s Indo European Foods Limited (UK), situated outside India to M/s. Herba Foods S.L.U.
USA Operations
Kohinoor Foods USA Inc. was incorporated in year 2000 in the state of New Jersey, USA, as a wholly owned subsidiary of Kohinoor Foods Limited (KFL), India, to cater to the markets of US & Canada. The brand 'Kohinoor' is well known in USA for its quality rice and food items.
However during the current year this company did not carry any business as their as no export sales for KFL India to US & Cananda.
Food Business
During the year 2020-21, in processed & packaged food products the company did the business of around INR 304 million as against INR 198 million in the previous year. The food factory has continued its operation effectively in spite of the liquidity problem which improved our production & revenues from food business.
UK, Australia, USA, Canada are major markets for our range processed & packaged food products.
Overview - Ready to Eat Industry
Convenience food is a concept that has been prevalent and popular in the western countries for a long time now. Globally, the demand for ready-to-eat (RTE) food products has been increasing over the last few years on account of busier lifestyle of consumers and their rising income levels. Similar factors are fuelling the growth in the packaged food sector in India.
Owing to the influence of globalization, the food behaviors of Indians have been changing due to busy lifestyles of the millennial, spike in family income and the concept of nuclear families gaining ground have contributed to the Indian ready-to-eat (RTE) food segment rising significantly in current years. The Covid-19 pandemic and the ensuing work-life changes have also provided a boost to this segment. The processed food market in India is expected to grow substantially on the back of government initiatives such as planned infrastructure worth US$ 1 trillion and Pradhan Mantri Kisan Sampada Yojna. The food processing industry employs about 1.77 million people. The sector allows 100% FDI under the automatic route. India exported key processed food products such as pulses, processed vegetables, processed fruits and juices, groundnuts, guar gum, cereal preparations, milled products, alcoholic beverages and oil meals. The 'India Ready-To-Cook Market Outlook, 2021' indicates that the market for the RTE segment has grown at a CAGR of 15-20 per cent in the last five years., A recent survey by Assocham shows that about 79 per cent of Indian households today prefer to have instant food due to time constraints. Anticipated growth in the market can be attributed to rising urbanization, increasing disposable income of middle-class population and changing taste preferences of Indian consumers. Ready meals took off in India following the hectic lifestyle of the young working population. The even more convenient ready-to-eat products rose in popularity since they can be consumed without cooking, seemingly suited for busy millennial.
The Indian cooking styles have undergone considerable changes over the past few years owing to the advent of modern technology and several other changes such as urbanization, increasing working population, increase in female work population and the rise of nuclear families. People have been increasingly shifting to ready-to-eat food items in order to save the time involved in preparing meals.
With the growing media awareness, literacy rates and standard of living, people have grown more responsive towards the health and hygiene standards associated with food products. There has been a shift witnessed in the customers focus from price to quality in the recent years, particularly in the urban and a few semi-urban areas. Consumers have been drifting from openly or loosely sold food products to the consumption of hygienically packaged fortified RTE foods.
Moreover, growing demand for quick food and presence of freshness and high nutritional value in these foods is further aiding growth of India ready-to-eat food market. Demand for ready-to-eat food products is recording high growth in metros where a lot of working people don't get enough time to cook proper meals. Additionally, longer shelf life and easy availability of ready-to-eat food products is further pushing their demand across the country. The most popular ready-to-eat items include preparations of paneer, chana masala, rajma masala, pav bhaji, etc. Rise in demand for ready-to-eat food products has created the interest among many companies to enter this space which is likely to contribute to the growth of the market in the coming years. Furthermore, innovation in products offerings, sustainable packaging, and preference of single serving frozen products, aggressive marketing & promotional strategies would steer growth in the market during forecast period.
With two working parents and families becoming nuclear, people prefer authentic, nutritious store bought options rather than spending hours in the kitchen after work. In recent years, the focus of the ready- to-eat market has gradually shifted from just homemakers or students to young professionals and families.
However, as fancy as the various breakfast cereals available in the market might be, we crave the satisfaction that only a traditional dish can give. And hence the traditional brands are coming up with options that are suitable for the Indian palate. The traditional brands have forayed into items such as bhel bar, pot upma, poha which can be had on the go, anytime, anywhere. To fulfil the demand of this large section of consumers, one will find a lot of new RTE brands in the market.
Unlike the giant brands though, the new entrants are trying to create a niche category for themselves, be it breakfast cereals, canned, frozen foods, spreads, chutneys, and so on. Companies are looking to attract consumers within areas like olive oil, spreads and ready meals by offering promotions, new product developments, health and nutritional benefits and attractive packaging.
Consumers are increasingly realizing that majorly RTE foods are loaded with preservatives for a longer shelf life. Increasing health awareness, particularly in the young generation, is hindering the growth of this market. Still a large Indian population is price sensitive and therefore the price factor of RTE food makes them affordable only to select economic classes of the society. Hence it becomes all the more essential for new players in this field to marry convenience with health benefits to ensure convenience food does not mean compromising on quality. The key is to provide RTE food options focused on Indian taste for everyday consumption, which are is not harmful in the long run.
The Indian consumer behavior has been influenced by exposure to other cultures primarily in the West through travels, and popular literature. The ready-to- eat market is somewhat saturated in the West, hence developing countries like India are attracting the majority of big players in the promise of a high growth opportunity. The booming food sector, multiple food outlets, the popularity of international brands and distinctive distribution channels adopted by players are expected to help the market grow at a continuous pace.
This is the challenge taken up specifically by food tech start-ups who want to be considered as serious players and are getting into the game after years of R&D. With state of the art technology in packaging and processing to ensure the end product is not just a world class product that can eventually be on the shelves in countries across the globe but a product that is a strong contender in being a game changer.
Increased employment opportunities have increased migration of people from tier 1 and tier 2 cities to metropolitans, which is an important driver for RTE food products in the country. Nuclear families and bachelors residing in metros for study or employment purpose are among the major consumers of RTE food products in India. The number of working women is particularly on the rise, which is again driving the demand. All these factors are creating significant awareness about ready meals among consumers. Growth in retail chains and outlets is also adding to the product awareness among consumers in the country's, supermarkets, convenience stores and hypermarkets, which are emerging as the key points-of-sale for offering a wide range RTE food products.
Basmati Rice
India has the distinction of being the second-largest producer of rice in the world. However, consecutively for the last 2 years India has been the largest net exporter of rice, putting behind in the race, traditionally considered 'rice bowls' of the world viz. Thailand and Vietnam.
Called the King of rice 'Basmati' considered the finest in all rice varieties, is grown only in the North Indian States, in the foothills of the majestic Himalayas called 'the Indo-Gangetic plains. Basmati crop is sowed in May-June and harvested in October-November, a cycle of about 110 to 120 days. Basmati rice has a GI Tag, which means basmati grown only in this part of world ie Punjab, Haryana of India and Punjab of Pakistan can only be labeled as 'BASMATI'.
India grows both basmati as well as non basmati rice varieties, all rice grown in India is classified as 'LONG GRAINS', as unlike Vietnam, Cambodia & China who also grow short and round grains, Indian soil does not sustain shorter grain rice varieties. Most of rice production I the world is in this part of the globe ie South East Asia ; the major consumption too is in either Arab world ie Middle East or in the Far Eastern countries viz. China, Indonesia, Malaysia & Thailand, Philippines etc.
Over the last 4 decades, since India started exporting Basmati rice, first to the Arab World, followed by Europe, North America and now also to Iran, the volumes have quadrupled; in the last 10 years the exports of basmati have increased from 2.5 to 4.10 million metric tons. Due to GI Tag, world's dependence on India is enviable and is not expected to go down any time soon.
Risks & Concerns
The Banks have classified the Company's Accounts as Non Performing Asset and served Notice under section 13(2) of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in the month of July 2018 to March 2019 and in the month of February 2020 to September 2020. The Company has replied to said notices and negotiating with different workable options.
The Banks have filed petition against Company before Hon'ble NCLT Bench Chandigarh, the company is contesting the matter and the petition is yet to be admitted.
The Company has received an ex parte interim order from Debt Recovery Tribunal-III, Delhi dated 25/06/2020 restraining the company from transferring/ alienating or otherwise dealing with, or disposing off or encumbering or creating any third party interest with respect of the hypothecated assets/immovable properties of the Company until further orders. The company is contesting the matter against the ex parte interim order.
The observations of the Auditor with regard to the management assessment of the company's ability to continue as going concern in view of the liquidity problems/decrease in business. The management of the company believes that it can continue as a going concern, based on the Resolution plan and after of one time settlement submitted to the Banks by company and the interest shown by prospective investors in the company.
Macro-economic factors like recession, subdued demand and political uncertainty may affect the business of the Company and the industry at large as well. The Company is aware that uncertainties in business offer opportunities as well as downside risks and thus has identified and put in place mitigation tools for the same. Some key risk areas are:
Procurement risk
In a country like India, where more than 60 per cent of the area under cultivation is not irrigated, farm production is highly vulnerable to fluctuations in rainfall. Beside production risk, Indian farmers also face high market risk. Farm harvest prices in the country show high inter and intra year volatility. Price variation is quite pronounced in the regions and commodities where price support mechanism is not operative. Further adequate availability of key raw materials at the right prices is crucial for the Company. Being a generic natural product with low yield concentrated in a small region of the World, production of Basmati depends on the vagaries of nature. Therefore, any disruption in the supply due to a natural or other calamity or violent changes in the cost structure could adversely affect the Company's ability to reach its consumers with the right value proposition. However, we are ready with plans that might help us at such times. However, the Company's long term relationship with farmers built on trust ensures constant supply and thus over the years it has not faced any procurement problems. Also, adequacy of irrigation facilities in the Basmati producing regions mitigates these uncertainties.
High working capital requirement:
Basmati rice requires to beaged for 9-12 months before selling, leading to huge working capital requirements. This results in low ROCE for the industry.
Combating this risk, efficient working capital management system has been set in place by the Company and cash flow is monitored on daily basis.
Intense competition from unorganized sector: Another characteristic of this industry is the presence of unorganized sector offering basmati in loose unbranded form which intensifies competition. The Company is moving towards branded products and has invested significantly in building a strong brand which helps in differentiating their product.
Dividend
Your Directors do not recommend any dividend for the financial year 2020-21.
Re-Appointment / Resignation of Directors
In accordance with the provisions of the Companies Act, 2013, Mr. Jugal Kishore Arora (holding DIN - 00010704), Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. Your Directors recommend this resolution for approval of the members.
Further the Mr. Vijay Burman, Independent Directors, ceased to be director of the company due to sudden demise on 10.06.2021 and the necessary intimation is submitted to the exchange and form has been filed in this regard.
Subsidiary, Joint Ventures and Associate Companies
Kohinoor Foods Limited enjoys its global presence and has well managed to build a premium brand name for its quality in Rice Branding and Ready to Eat Food and with a view of expansion and diversification; it has created subsidiary companies for facilitating these operations in various countries.
A statement containing the performance and highlights of Financial Statements of subsidiary, associate and joint venture companies is provided in Form AOC-1 attached to the Financial Statements forms part of this Report and hence not repeated here for the sake of brevity.
In accordance with section 129(3) of the Companies Act, 2013, we have prepared consolidated financial statements of the Company and all its subsidiaries, which form part of the Annual Report. The Financial Statements have been prepared on the historical cost convention on going concern basis and on accruals basis unless otherwise stated. The name of companies which have become or ceased to be subsidiary or joint venture or associate companies, if any, have been mentioned in the notes to the accounts. The financial statements of Kohinoor Foods Limited ("Holding Company of KFL") together with its subsidiaries (hereinafter collectively referred to as "Group") are consolidated to form Consolidated Financial Statements (CFS). Consolidated Financial Statements consolidate the financial statements of KFL and its Wholly Owned Subsidiaries.
The parent company has not received audited financial statement from its Joint venture Company, Rich Rice Raisers LLC. The Management considers that the parent company is not in position to exercise control over this entity. Hence the results of Joint Venture Company have not been considered in the Consolidated Financial Statements. Rich Rice Raisers LLC, in which, KFL hold 25% shareholding, has closed its operation.
KFL was holding 20% share in Al Dhara Kohinoor LLC and Al Dhara Kohinoor Industries LLC. Al-Dahra Kohinoor LLC has exercised the call option, which KFL has accepted. Upon completion of the formalities the shareholding of the parent company in both of these associates has been reduced to NIL and they are not considered as Associates Companies.
In accordance with Section 136 of the Companies Act, 2013, the audited financial statement, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on our website www.kohinoorfoods.in/investor. These documents will also be available for inspection during business hours at our Registered Office.
Further these Financial Statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the 'Ind AS') as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. These financial statements for the year ended March 31, 2021 are prepared under Ind AS. For all periods up to and including the year ended March 31, 2017, the financial statements were prepared in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as 'Previous GAAP') used for its statutory reporting requirement in India immediately before adopting Ind AS.
Further the Policy for determining material subsidiaries as approved by the Board may be accessed on the Company's website at the link: www.kohinoor foods.in/investor The details of business operations / performance of major subsidiaries are as below:
Indo European Foods Limited
Indo European Foods Limited ("IEFL") a wholly owned foreign subsidiary company which was incorporated and domiciled in the U.K. and is the manufacture and marketing if specialist rice products, cooking, sauces, ready meals and savoury snacks having its registered office at Kohinoor House, Langer Road, Felixstowe, Suffolk, IP112BW. Total Turnover of IEFL during FY'21, was 23,263,542 and profit after tax was 20,289,026.
Internal Control System
The Company has in place adequate internal control systems that facilitates the accurate and timely compilation of financial statements and management reports, ensures regulatory and statutory compliance, and safeguards investor interest by ensuring the highest level of governance. The control system ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly.
A CEO and CFO Certificate provided by Jt. Managing Director and CFO, included in the Corporate Governance Report confirms the existence of effective internal control systems and procedures in the Company Internal audit function evaluates the adequacy of, and compliance with policies, plans, regulatory and statutory requirements. The Internal Auditors directly report to the Board's Audit Committee, thus ensuring the independence of the process. It also evaluates and suggests improvement in effectiveness of risk management, controls and governance process. The Audit committee and Board provides necessary oversight and directions to the Internal audit function and periodically reviews the findings and ensures corrective measures are taken. In the opinion of the management and the internal auditors, there exists adequate safeguard against fraud and negligence within the Company.
Our Offices as well as the manufacturing facilities endorse the highest health, safety, security and environmental standards.
Internal Financial Controls
The Company has in place well defined and adequate Internal Financial Controls which are tested from time to time for necessary improvement, if any required.
Listing at Stock Exchange
The Equity Shares of the Company are listed with BSE Limited and National Stock Exchange of India Ltd (currently suspended - due to penal reasons - your Company have already applied for revocation of suspension of Trading of Securities of the Company and hopeful to get the trading approval soon from the Stock exchanges). The annual listing fee for the Financial Year 2021-22 has been paid by the Company.
Corporate Governance
Your Company has taken adequate steps to ensure compliance with the provisions of Corporate Governance as stipulated by the Stock Exchanges. Pursuant to SEBI (LODR), Regulation, 2015, a report on the Corporate Governance, Certificate regarding Compliance, Secretarial Audit Report and Jt. Managing Director (CEO) and CFO certification along with the Auditors Certificate has been made part of the Annual Report.
Auditors
M/s. Rajender Kumar Singal & Associates LLP, Chartered Accountants (Firm Registration No. 016379N), who were re- appointed as the Statutory Auditors of the Company for a period of five years from the conclusion of Twenty Ninth Annual General Meeting held on 28th September, 2018 until the conclusion of the fifth Annual General Meeting to be held in the year 2023, have resigned as the Statutory Auditors of the Company w.e.f. August 12, 2021 due to commercial reasons. The Board, at its meeting held on August 12, 2021, on the recommendation of the Audit Committee, accepted the resignation tendered by the Statutory Auditors.
Further, the Audit Committee and the Board, at their respective meetings held in August 12, 2021 placed on record their appreciation to M/s. Rajender Kumar Singal & Associates LLP, Chartered Accountants (Firm Registration No. 016379N) for their contribution to the Company with their audit processes and standards of auditing.
Appointment of M/s. N C Raj & Associates
Pursuant to the provision of Section 139 of the Companies Act, 2013, the Company was required to fill the casual vacancy caused by the resignation of M/s. Rajender Kumar Singal & Associates LLP, Chartered Accountants (Firm Registration No. 016379N) as Statutory Auditors of the Company. Accordingly, the Shareholders of the Company in its 1st Extra-Ordinary General Meeting for Financial Year 2021-22 held on November 10, 2021, on there commendation of the Board of Directors and Audit Committee, have approved the appointment of M/s. N C Raj & Associates, Chartered
Accountant (FRN: 002249N) as Statutory Auditors of the Company to fill the casual vacancy caused due to the resignation M/s. Rajender Kumar Singal & Associates LLP, as Statutory Auditors of the Company, till the conclusion of ensuing 32nd Annual General Meeting of the Company to be held in the Year 2021 and that they shall be eligible for re-appointment in the upcoming 32nd Annual General Meeting of the Company to be held in the year 2021, and that they shall conduct the Statutory Audit for the period ended 31st March, 2022, on such remuneration as may be fixed by the Board of Directors in consultation with them.
This is to further note that to appoint M/s. N C Raj & Associates, Chartered Accountant (FRN: 002249N), Statutory Auditors of the Company, to holds office from the conclusion of ensuing Annual General Meeting to the conclusion of Fifth Annual General Meeting to be held till the year 2026. The Board of Directors has received their consent and they have confirmed their eligibility to the effect that their re-appointment, if made, would be within the prescribed limits and they are not disqualified for re-appointment.
The Board pursuant to the provisions of Section 139, 142 and other applicable provisions of the Companies Act, 2013 and on the recommendation of the Audit Committee has considered the appointment of M/s. N C Raj & Associates, Chartered Accountant (FRN: 002249N), as Statutory Auditors of the Company to hold office from the conclusion of ensuing Annual General Meeting till the conclusion of Fifth Annual General Meeting to be held in the year 2026. The Board of Directors accordingly recommends their reappointment as Statutory Auditors.
Auditors Report
The Company has received the Auditors Report duly signed by M/s Rajender Kumar Singal & Associates LLP, Chartered Accountants, New Delhi, and took note on the same. Further as mentioned in the Auditors Report, attention is drawn (Emphasis of Matters) to notes to the Financial Statements, the same has not been reproduced for the sake of brevity as the remarks given by the Auditors are self- explanatory, however the Board has discussed the same in details as had been provided in the notes to the Financial Statements.
Cost Auditors
The Cost Auditor M/s Cheena and Associates appointed as Cost Accountants of the Company for the year 2020-21 and has completed the audit of the cost record of the Company. The Cost Audit Report does not contain any qualification, reservation or adverse remark.
The Board pursuant to the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force), has approved the appointment of M/s Cheena & Associates, Cost Accountant Firm to conduct the audit of the cost records of the Company for the financial year ending on March 31, 2021 and remuneration to be paid subject to rectification by shareholders.
Secretarial Audit
The Board of Directors pursuant to the Provision of Section 204 of the Companies Act, 2013, has appointed M/s. MANK and Associates, Company Secretary Firm, (having FCS No. 10248 and CP No. 19684) to conduct Secretarial Audit of the Company for the Financial Year 2021-2022.
Secretarial Audit Report
The Secretarial Auditor M/s MANK and Associates, Company Secretaries, appointed for the year 2020-21 and has completed the secretarial audit of the Company. The Secretarial Audit Report as received from the Practicing Company Secretary is annexed to the Annual Report as Form No.-MR-3. As per the Secretarial Audit Report the Company has complied with all the applicable acts, laws, rules and regulations and does not contain any qualification, reservation or adverse remark.
Internal Auditor
The terms of M/s. N N A & Co, Chartered Accountants, New Delhi, who was appointed as Internal Auditor of the Company for the Financial Year 2020-21 expired on 31st March, 2021.
Your Directors on the recommendation of the Audit Committee have approved their appointment in the Board Meeting dated 20th July, 2021, for the financial year 2021-22.
Deposits
During the year under review, the Company has not accepted any deposit under Chapter V of the Companies Act, 2013.
Share Capital of the Company
The Company has allotted 58,14,000 share warrants at a premium of Rs. 66/- per share to the promoters on preferential basis on 04th October, 2018, out of these, 18,30,000 share warrants have been converted into equity shares on 04th October, 2018. After allotment, the Company has filed application for listing of 18,30,000 equity shares to the Stock Exchanges (NSE & BSE). The final listing approval of further issue under Preferential Issue of 18,30,000 equity shares was granted by Exchanges on October 18, 2021 and the above equity shares of the Company are listed on the
Exchanges from October 18, 2021 as per the details given below.
* The above Equity Shares shall be admitted to dealings once the suspension on equity shares of the Company is revoked
Forfeiture
During the year under review, for the remaining 39,84,000 Convertible Warrants into Equity Shares, the company has neither received any request for conversion of Share warrants into Equity Shares, nor have received any balance sums payable on such conversion option being exercised by any of the Share Warrant holder within 18 month of issue of such warrants. Therefore as per SEBI (ICDR) Regulations, 2009, the consideration therefore paid by such Warrant Holders at the time of issuance of share warrants stand forfeited.
Board Meetings
The Board is headed by an executive Chairman. As on 31st March 2021, the Board of Directors consisted of Seven Directors, including Chairman, Joint Managing Directors, Woman Director, Independent Director and others.
Six (6) Board Meetings were held during the year 2020-21, i.e. on 28th August, 2020, 28th September, 2020, 12th November, 2020, 07th December, 2020, 12th February, 2021 and 30th March, 2021 and the gap between two meetings did exceed 120 days as per relaxation granted under the Ministry of Corporate Affairs (MCA) vide its General Circular No. 11/2020 dated 24th March, 2020.
Audit Committee Meetings
During the year under review, the Audit Committee met Two (4) times i.e. on 28th August, 2020, 28th September, 2020, 12th November, 2020 and 12th February, 2021 and the gap between two meetings did exceed 120 days as per relaxation granted under the Ministry of Corporate Affairs (MCA) vide its General Circular No. 11/2020 dated 24th March, 2020.
The minutes of the meetings of the Audit Committee are noted by the Board.
Nomination and Remuneration Committee
During the year under review, the Nomination and Remuneration Committee met One (1) times i.e. on 28th August, 2020. The minutes of the meetings of the Nomination and Remuneration Committee are noted by the Board.
Remuneration Policy
On the recommendation of the Nomination and Remuneration Committee, the Board has formulated Remuneration Policy for appointment of Directors, Key Managerial Personnel, Senior Management and their remuneration.
The Remuneration Policy of the Company forms part of this Report and may be accessed on the Company's website on the link : www.kohinoorfoods.in/investor.
Whistle Blower Policy/Vigil mechanism
The Company has established a vigil mechanism for Directors and Employees to report their concerns about unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy or any other grievances, the details of which are given in the Corporate Governance Report. The Whistle Blower Policy may be accessed on the Company's website on the link www.kohinoorfoods.in/investor.
Particulars of Loan Given, Investment made, Guarantees given and Securities Provided
Particulars of loans given, investments made, guarantees and securities provided under section 186 of the Companies Act, 2013 are provided in the notes of standalone Financials statement and well within the limit approved by the Shareholders of the company.
Present status of litigations
The Board of Trustee of the port of Mumbai has filed a money suit for recovery of Rs. 9.64 Cr. towards alleged outstanding demurrage charges against which the Company has filed its counter claim of Rs. 10.88 Cr. towards the financial losses, interest on the investment, refund of the license fees, refund of the demurrage charges, compensation and damages etc. The matter is still pending.
The litigation status of the Company for the year ended on March, 2021.
1. List of tax cases pending as on 31/03/2021
(Rs. In Lacs)
2. All other litigations are mentioned under the Contingent note of the Balance Sheet for the financial year 2021-22.
The Company has received Notices from the Banks under section 13(2) of The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, in the month of July, 2018 to May, 2019 and in the month of February 2020 to September 2020. The Company has replied/in process to reply the notices received from the Bank within 60 days from the date of notices. The Oriental Bank of Commerce and Punjab National Bank have served notice of Wilful Defaulter. The Company/Directors have replied to the said notices. The Company has also approached Banks with suitable resolution plan for their consideration.
The Company has received Ex parte Interim Order dated 25.06.2020 from Debt Recovery Tribunal-III, Delhi restraining the Company from transferring/ alienating or otherwise dealing with, or disposing off or encumbering or creating any third party interest with respect of the hypothecated assets/immovable properties of the Company until further orders. Further the Company has received summon under sub-section (4) of Section 19 of the Act, read with sub-rule (2A) of rule 5 of the Debt Recovery Tribunal (Procedure) Rules, 1993 in the aforesaid matter of ICICI Bank Limited V. Kohinoor Foods Limited and ORS to file written statement and to appear before Registrar on 26/09/2020. The Company is contesting the matter and filed its reply to IA and also filed reply to OA before DRT-III, Delhi vide IA No. 926/2020 and OA No. 276/2020, wherein the DRT has provided the next date of hearing on 20.11.2021.
The Jt. Managing Director, Mr. Satnam Arora of the Company, has received a summon/notice from the Directorate of Enforcement, Central Regional Office, Government of India, New Delhi, to appear before them along with various document. The Director/authorized representative of the company is in process to appear and submit relevant documents before the authorities/ offices / department in due course.
The Company has submitted its improved One Time Settlement (OTS) proposal with the Consortium Banks and the same is sanctioned by the Lead Bank and was presented at their respective consortium meeting. The Company is awaiting the sanction from the Consortium Banks.
The Company has received Legal Notice from the Punjab National Bank, Hong Kong in regard to outstanding indebtedness payable within 14 days from the date of the letter. The Company has replied the Bank within the stipulated time and submitted its OTS proposal and has deposited the upfront amount USD 89,433.4/- towards One Time Settlement (OTS) Proposal and requested to process the Company OTS Proposal and forward the same to their Board/Head Office for approval, which is at present in consideration.
The Company has received an Arbitration Award by the Hon'ble Arbitral Tribunal comprising of the sole arbitrator Mr. S G Shah Former Judge, High Court of Ahmedabad for its debtors the company has not received any amount, from the parties, on due date as Award. The Company has filed an execution petition of the award before the High Court, New Delhi in regard to recovery of the amount as per Award.
The Lead Bankers, Oriental Bank of Commerce (Now Punjab National Bank) has filed petition under Section 7 of Insolvency and Bankruptcy Code, 2016, before the Honbl'e court of NCLT, Chandigarh Bench, which is not yet admitted.
M/s. Norton Rose Fulbright LLP. has filed petition under Section 9 of Insolvency and Bankruptcy Code, 2016, before the Honbl'e court of NCLT, Chandigarh Bench. The case is closed/disposed
M/s. Uma Polymers Limited has filed petition under Section 9 of Insolvency and Bankruptcy Code, 2016, before the Honbl'e court of NCLT, Chandigarh Bench, which is not yet admitted.
M/s. International Cargo Terminal and Infrastructure Pvt. Ltd. has filed petition under Section 9 of Insolvency and Bankruptcy Code, 2016, before the Honbl'e court of NCLT, Chandigarh Bench, which is not yet admitted.
M/s. International Cargo Terminal and Rail Infrastructure Pvt. Ltd. has filed petition under Section 9 of Insolvency and Bankruptcy Code, 2016, before the Honbl'e court of NCLT, Chandigarh Bench, which is not yet admitted.
M/s. JPS Plastics Pvt. Ltd. has filed petition under Section 9 of Insolvency and Bankruptcy Code, 2016, before the Honbl'e court of NCLT, Chandigarh Bench, which is not yet admitted.
All other litigations are mentioned in the note on Contingent Liability in the Balance Sheet for the financial year 2019-20.
Contract and Arrangements with Related Parties
In terms of Section 188 of the Act read with rules framed there under and Regulation 23 of the Listing Regulations, your Company has in place Related Party Transactions Policy for dealing with related party transactions. The policy may be accessed under the Corporate Governance section on the website of the Company at: http://kohinoorfoods.in/pdf/Policy-on- Related-Party-Transactions. pdf. All the related party transactions that were entered and executed during the year under review were on arm's length basis and in the ordinary course of business and within permissible framework of Section 188 of the Act and Rules made there under read with Regulation 23 of Listing Regulations. There were no materially significant related party transactions made by the Company during the year that would have required the approval of the shareholders. The details of the transactions with the related parties are provided in the accompanying financial statements. There were no related party transaction made during the year that are required to be disclosed in the Form AOC-2.
Conservation of Energy, Research and Development, Technology Absorption, Foreign Exchange Earning and Outgo
The particulars as prescribed in sub-section (3) of Section 134 of the Companies Act, 2013, read with Companies (Accounts) Rules, 2014 are enclosed as Annexure B to this Report.
Particulars of Employees and Related Disclosure
In terms of the provisions of 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, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules are given as under:
i) There are no Employee, employed throughout the year and in receipt of remuneration of Rs. 1,02,00,000/- or more per annum.
ii) There are no Employee, employed part of the year and in receipt of remuneration of Rs. 8,50,000/- or more per month during any part of the year.
Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are set out in the annexure-D to this report.
Having regard to the provisions of Section 136(1) read with its relevant proviso of the Companies Act, 2013, the Board's Report is being sent to the members without some annexures. The said annexures are available for inspection at the Registered/ Corporate Office of the Company during working hours and any member interested in obtaining such annexures may write to the Company Secretary and the same will be furnished free of cost.
Extract of Annual Return
In accordance with Section 134(3)(a) of the Companies Act, 2013, the extract of the annual return in Form No. MGT - 9 is enclosed as Annexure C to this Report.
Management's Discussion and Analysis Report
Pursuant to Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), a Management Discussion and Analysis Report and a Report on Corporate Governance is attached in a separate section forming part of the Annual Report.
A Certificate from the Statutory Auditors of the Company regarding the Compliance by the Company of the conditions stipulated in Regulations Part C of Schedule V of the Listing Regulations is also attached with this report.
A declaration by the Managing Director pursuant to Regulations Part C of Schedule V of the Listing Regulations stating that all the
Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct, during the financial year ended 31st March, 2021, is also attached with this report.
Directors' Responsibility Statement
Pursuant to section 134(5) of The Companies Act, 2013, the Directors confirm that:
a) in the preparation of the annual accounts for the year ended 31st March, 2021, the applicable accounting standards read with requirements set out under Schedule III to the Act, had been followed and there are no material departures from the same;
b) the Directors had 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 as at 31st March, 2021 and of the profit and loss of the Company for the year ended on that date;
c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the Directors had prepared the annual accounts on a 'going concern' basis;
e) 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; and
f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
Awards & Recognitions
Since its inception, the Company has been earning awards and recognition like consumer validated Super Brand Award (thrice in series), Reader's Digest Most Trusted Brand award (4 times in a row), Power Brand Award, Guinness Book of World Record (for making World's Largest Biryani), National award for Export Excellence, Brand Equity Award & many APEDA awards.
Corporate Social Responsibility
As per provisions under Section 135 of the Companies Act, 2013, all companies having net worth of Rs. 500 crores or more, or turnover of Rs.1,000 crores or more or a net profit of Rs. 5 crores or more during any financial year are required to constitute a Corporate Social Responsibility (CSR) Committee of Board of Directors comprising three or more directors, at least one of whom should be an Independent Director and such Company shall spend 2% of the average net profits of the Company made during the three immediately preceding financial years.
Accordingly a detailed CSR Policy was framed by the Company with the approvals of the CSR Committee and Board. The Policy, inter alia, covers the following:
• Philosophy
• Scope
• List of CSR activities
• Modalities of execution of projects/programmes
• Implementation through CSR Cell
• Monitoring assessment of projects/programmes
CSR Policy gives an overview of the projects or programmes which are proposed to be undertaken by the Company in the coming years.
The composition of the CSR Committee
A Committee of the directors, titled 'Corporate Social Responsibility Committee', was constituted by the Board with the following members:
1. Mrs. Mani Chandra Bhandari (Chairperson)
2. Mr. Satnam Arora
3. Mr. Gurnam Arora
4. Mr. Vijay Burman (cessationdue to sudden demise on 10.06.2021)
As the Average net Profit/(Loss) of the Company for last three financial years prior to 2020-21 comes to average net loss and therefore the Company is not statutorily required to spent amount as prescribed for CSR expenditure. Kohinoor also envisions to improve lives in communities we live around, protect workplace rights, respect people, support missions that help people have a better life, provide good jobs, world class quality products and a healthy environment to all of us around.
At Workplace, Kohinoor Foods maintain high standards for fair and dignified treatment of all the people who work for our Company. For all of its employees, it is not just a place to work, but like another home and everybody in it like a big family, closely bonded with each other.
Kohinoor Foods also believes that a Company is as good as the people who work for it - their combined talents; skills, knowledge, experience and passion make a company what it is.
Hence, Company's continuous goal is to inspire and motivate its people to hone their talents, increase their knowledge & skills and achieve extraordinary results at their workplace. In this endeavor we have offered subsidized meals to our employees at a very nominal cost.
Adherence to global human rights standards, No minor labour, Fair trade practices, complete Medical facilities for its people, Safe & sound working environment are the things that Kohinoor Foods take utmost care about.
The CSR Policy may be accessed on the Company's website at the link: www.kohinoorfoods.in/investor
Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company has zero tolerance towards sexual harassment at the workplace. The Company has in place a Sexual Harassment Policy in compliance with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Sexual Harassment Committee has been set up to redress complaints received regarding sexual harassment.
The Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Declaration by Independent Directors
The Company has received necessary declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements), Regulation, 2015.
Board Evaluation
In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it is mandatory that the Board shall monitor and review the Board Evaluation Framework. The Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. Schedule IV of the
Companies Act, 2013 and Regulation 17 (10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated.
The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria and framework adopted by the Board. In addition, the performance of Board as a whole and committees were evaluated by the Board after seeking inputs from all the Directors on the basis of various criteria.
In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of Board as a whole and performance of the Chairman was evaluated, taking into account the views of the Executive Directors and Non-Executive Directors. The evaluation process has been explained in the Corporate Governance Report section of the Annual Report.
Training of Independent Directors
The Company Secretary of the Company conducted a detailed training programme to provide/update the changes in the SEBI (LODR), Regulation, 2015/Companies Act, 2013 and other relevant act to the Independent Directors.
Further, the Company issues a formal letter of appointment to Independent Directors outlining their roles, responsibilities, functions and duties as an Independent Director. The format of the letter of appointment is available on the Company's website at the link: www.kohinoorfoods.in/investor
General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
1. Details relating to deposits covered under Chapter V of the Act.
2. Issue of equity shares with differential rights as to dividend, voting or otherwise.
3. Issue of shares (including sweat equity shares) to employee of the Company under any scheme.
4. Issue of Employees Stock Option to employee of the Company under any scheme.
5. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.
6. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future except as disclosed in the Annual Report.
7. Business Responsibility Report as per Regulation 34 (2)(f) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, describing the initiatives taken by them from an environmental, social and governance perspective is not applicable to the Company, for the financial year 2020- 2011 as per the SEBI Circular SEBI/LAD-NRO/GN/2015- 16/27 dated 22nd December, 2015 and Frequently Asked Questions issued by SEBI on SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 dated 29th January, 2016.
Acknowledgment
Your Directors would like to express their appreciation for the assistance and co-operation received from the Banks, Government Authorities, Customers, Vendors and Members during the year under review. Your Directors acknowledge with gratitude, the commitment and dedication of the employees at all levels that has contributed to the growth and success of the Company.