Mar 31, 2023
Your Directors take pleasure in presenting the 33rd Annual Report on the business and operations of the Company and the accounts for the financial year ended March 31,2023.
Financial Highlights
In compliance with the provisions of the Companies Act, 2013 ("Act"), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has prepared its financial statements as per Indian Accounting Standards ("IndAS") for the financial year 2022-23. The financial highlights of the Company''s operations are as follows:
(Rs. in Lakhs) |
||||
Particulars |
Standalone |
Consolidated |
||
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
Revenue from Operations |
3,91,459.99 |
2,83,999.61 |
6,93,579.19 |
5,42,737.17 |
Other Income |
3,682.45 |
2,358.76 |
4,302.14 |
2,320.91 |
Operating Profit before Finance Costs, Depreciation, Tax and Extraordinary items |
26,354.81 |
20,400.79 |
77,159.06 |
61,495.55 |
Less: Depreciation and amortisation expenses |
2,889.97 |
3,246.54 |
12,690.72 |
12,263.24 |
Less: Finance Cost |
2,396.79 |
2,278.55 |
8,210.03 |
6,872.62 |
Less: Other Expense |
57,916.90 |
37,842.95 |
1,29,798.44 |
92,701.00 |
Share of net profit/(loss) of associates and joint ventures accounted for using the equity method |
- |
- |
2,786.22 |
(485.17) |
Profit Before Tax |
21,068.05 |
14,875.70 |
56,258.31 |
42,359.69 |
Less: Tax Expense |
5,036.83 |
3,651.10 |
13,982.53 |
11,439.38 |
Profit After Tax |
16,031.22 |
11,224.60 |
42,275.78 |
30,920.31 |
Total Comprehensive income for the year |
15,666.24 |
11,037.56 |
45,893.31 |
29,063.53 |
Company''s Performance Overview:
During the financial year 2022-23, LT Foods on a consolidated basis recorded revenue from operations of Rs. 6,93,579.19 lacs 27.79% higher than Rs. 5,42,737.17 lacs in FY 2021-22. Profit before and after tax for the financial year 2022-23 was at Rs. 56,258.31 lacs and Rs. 42,275.78 lacs, respectively as compared to profit before and after tax of Rs. 42,359.69 lacs and Rs. 30,920.31 lacs, respectively for the financial year 2021-22, with an increase of 32.81% and 36.72% in profit before and after tax respectively.
On a standalone basis LT Foods recorded revenue from operations of Rs. 3,91,459.99 lacs 37.84% higher than Rs. 2,83,999.61 lacs in FY 2021-22. Profit before and after tax for the financial year 2022-23 was at Rs. 21,068.05 lacs and Rs. 16,031.22 lacs, respectively as compared to profit before and after tax of Rs. 14,875.70 lacs and Rs. 11,224.60 lacs, respectively for the financial year 2021-22, with an increase of 41.63% and 42.82% in profit before and after tax respectively.
For detailed analysis of the financial performance of the Company, please refer to the Management Discussion & Analysis Report, forming part of the Annual Report.
Highlights of performance of Subsidiaries, Associates, Joint Ventures and their contribution to the overall performance of the Company.
A statement providing details of performance and salient features of the financial statements of Subsidiary / Associate / Joint Venture companies, as per Section 129(3) of the Act, are provided in Annexure I.
The companies which have become and /or ceased to be Subsidiary/Associate of the Company during the financial year 2022-23 are also mentioned in Annexure I.
The financial statements of the subsidiaries, as required, are available on the Company''s website and can be accessed at http://www.ltgroup.in/index.html.
The Company has formulated a Policy for determining Material Subsidiaries. The Policy is available on the Company''s website and can be accessed at http://ltgroup. in/pdf/LT-Foods-Material-Subsidiary-Policy-2021.pdf.
DAAWAT Foods Limited (Subsidiary) and LT Foods Americas, Inc. (Fellow Subsidiary) are material subsidiaries of the Company, as per the Listing Regulations.
Further, the Annual Accounts and related documents of the subsidiary Companies shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company shall also make available copy thereof upon specific request by any member of the Company interested in obtaining the same. The Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiaries.
Share Capital
During the year, the Board of Directors in its meeting held on February 28, 2023, allotted 27,408,164 (Twenty Seven Million Four Hundred Eight Thousand One Hundred and Sixty Four) ("Equity Shares") at face Value of Re. 1/-per Equity Share and Securities Premium of Rs. 141.23/-(Rupees One Hundred and Forty One and Twenty Three Paise) per Equity Share aggregating Rs. 142.23/- (Rupees One Hundred and Forty Two and Twenty Three Paise) per Equity Share amounting to 7.89% (Seven point Eight Nine Percent) of the share capital of the Company on a fully diluted basis for an aggregate subscription amount of Rs. 3,898,263,165.72/- (Rupees Three Billion Eight Hundred and Ninety Eight Million Two Hundred and Sixty Three Thousand One Hundred Sixty Five and Seven Two Paise) equity shares to SALIC International Investment Company ("Salic") a limited liability company duly incorporated under the laws of the Kingdom of Saudi Arabia on Preferential basis. Shareholders, at the Extra Ordinary General Meeting held on December 07, 2022, approved the issuance of securities to SALIC. Post allotment, paid -up share capital of the Company has increased to Rs. 34,72,52,944/- of face value of Re. 1/- each.
Pursuant to the provisions of Regulation 32(4) of the Listing Regulations there are no deviations in the utilization of proceeds from the objects stated in the offer document pertaining to preferential allotment of shares to SALIC.
Reserves
During the financial year, there was no amount proposed to be transferred to the Reserves.
Dividend
The Board of Directors at their meeting held on July 28, 2023, have recommended payment of Rs. 0.50 (50%) per equity share of the face value of Re. 1 /- each as final
dividend for the financial year ended March 31,2023. The payment of final dividend is subject to the approval of the shareholders at the ensuing Annual General Meeting ("AGM") of the Company.
During the year under review, the Board of Directors of the Company at their meeting held on October 31,2022, declared an Interim dividend of Rs. 0.50 (50%) per equity share of the face value of Re. 1 each. The interim dividend was paid to the shareholders within the stipulated time period.
The total dividend amount for the financial year 2022-23, including the proposed final dividend, amounts to Rs. 1.00 (100%) per equity share of the face value of Re. 1 each.
In view of the changes made under the Income-Tax Act, 1961, by the Finance Act, 2020, dividends paid or distributed by the Company shall be taxable in the hands of the shareholders. The Company shall, accordingly, make the payment of the final dividend after deduction of tax at source, at the rates as prescribed.
Further, the Board of Directors at thir meeting held on July 28, 2023, declared an interim dividend of Rs. 0.50 (50%) per equity share of the face value of Re. 1 /- for the financial year 2023-24. The interim dividend shall be paid to the shareholders within the stipulated time period.
The dividend recommended by the Board is in accordance with the Dividend Policy of the Company. The Dividend Policy, in terms of Regulation 43A of the Listing Regulations is available on the Company''s website: http://www.ltgroup.in/pdf/Dividend-Policy Final.pdf.
Particulars of Loans, Guarantees or Investments
The particulars of loans given, investments made and guarantees provided by the Company, under Section 186 of the Companies Act, 2013, as at March 31, 2023, are furnished in Annexure - II and forms part of this Report.
Details relating to deposits covered under Chapter V of the Companies Act, 2013
The Company has not accepted any deposits from the public under Chapter V of the Act and, as such, no amount of principal or interest was outstanding as on the balance sheet date.
Directors and Key Managerial Personnel
In accordance with the provisions of Section 152 and other applicable provisions, if any, of the Act and the Articles of Association of the Company, Mr. Ashwani Kumar Arora, Managing Director & CEO of the Company, is liable to retire by rotation at the ensuing AGM and being eligible has offered himself for re-appointment.
A brief resume, nature of expertise, details of directorships held by Mr. Ashwani Kumar Arora in other companies, along with his shareholding in the Company, as stipulated under Secretarial Standard - 2, issued by Institute of Company Secretaries of India, and Regulation 36 of the Listing Regulations, is appended as an Annexure to the Notice of the ensuing AGM.
Your Company and the Board expresses their deep condolences on the untimely and sad demise of Mr. Anil Khandelwal (DIN: 03473632), Independent Director of the Company, on February 22, 2023. Mr. Anil Khandelwal was appointed as an Independent Director of the Company w.e.f. July 22, 2021, during his tenure, he played crucial leadership role which benefitted the Company immensely. Mr. Anil Khandelwal''s sudden and unexpected demise will be an irreparable loss to the Company and the Company convey deep sympathy, sorrow and condolences to his family.
The Board of Directors in its meeting dated February 28, 2023, approved the appointment of Mr. Alrumaih Sulaiman Abdulrahman S (DIN: 09091328) as a NonExecutive Non- Independent Director of the Company. Mr. Alrumaih holds a bachelor''s & Masters'' degree in Electrical Engineering from King Saud University, KSA. He has more than twenty years of diverse experience with a focus on Investments, Commercial & Business Development strategy. Throughout his career he was associated with Tamimi Group, as Chief Executive Officer, General Electric (GE) and Saudi Electric Company. Further, the Shareholders approved his appointed through postal ballot process on June 21,2023.
Further, on the recommendation of the Nomination and Remuneration Committee and the Board of Directors subject to the approval of the shareholders of the Company, Mr. Satish Chander Gupta, (DIN: 00025780) has been appointed as an Independent Director of the Company with effect from June 16, 2023. Mr. Satish Chander Gupta, has a degree of Masters in Commerce and has completed CAIIB from Indian Institute of Banking and Finance. He is having an experience of over 41 years in Banking Industry, is a retired Chairman and Managing Director from Punjab National Bank and had previously held positions of Chairman & Managing Director at Indian Overseas Bank, Chairman at ISMT Ltd. and Kamanwala Housing & Construction Ltd, to name a few. The approval of the shareholders shall be taken through Postal Ballot Process.
During the year under review, Mr. Ashwani Kumar Arora resigned from the position of Chief Financial Officer and Mr. Sachin Gupta has been appointed as Chief Financial Officer of the Company effective from May 30, 2022.
Declaration from Directors
None of the Directors of the Company are disqualified from being appointed as Directors, as specified in Section 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Declaration by Independent Director(s) and reappointment, if any
The Company has received declarations of Independence as stipulated under Section 149(7) of the Act from Independent Directors confirming that he/she is not disqualified from being appointed/ continuing as Independent Director as laid down in section 149(6) of the Act read with rules related thereto and Regulation 16(1) (b) of Listing Regulations. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act. The Independent Directors of the Company have registered themselves with the data bank maintained by Indian Institute of Corporate Affairs. They have also confirmed on the compliance of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.
Board Diversity
The Company recognizes and embraces the importance of a diverse Board in its success. We believe that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender, that will help the Company retain its competitive advantage.
Performance Evaluation
In pursuance of Section 178 of the Act read with Regulation 4(2), 17(10) and 19(4) read with Schedule II Part D of the Listing Regulations and Secretarial Standard-I, the Nomination and Remuneration Committee has framed the evaluation process and the performance evaluation of Independent Directors, Executive Directors and of the Board as a whole as well as working of its Committees has been carried out during the financial year 2022-23.
Performance Evaluation of Individual Directors & Chairman
The Independent Directors of the Company met separately on March 27, 2023 without the presence of Non-Independent Directors and inter-alia reviewed the performance of the Non-Independent Directors, Board as a whole, performance of the Chairman of the Company and the Committees after taking into consideration the views of Executive and Non-Executive Directors.
Performance evaluation of the Board and Committees
In compliance with the provisions of SEBI Listing Regulations, the Board of Directors have also carried out evaluation of every Independent Director''s performance during the year. The Board members had submitted to Nomination and Remuneration Committee, their
response on a scale from 5 to 1 (Excellent to Performance Needs Improvement) for evaluating the entire Board, Committees including Chairman of the Board.
It was further acknowledged that every individual Member and Committee of the Board has contributed best in the growth of the organization.
It was noted that the Board as a whole is functioning as a cohesive body which is well engaged with different perspectives. The Board has a right balance of discussion between strategic and operational issues. The Board members are from different backgrounds and are enriched by such diversity which brings about different deliberations in the Board and Committee Meetings. The Board is actively engaged on the key issue concerning strategy, talent, risk and governance. It was also noted that the Committees are functioning well and besides the Committee''s terms of reference as mandated by law, important issues are brought up and discussed in the Committees & the Board was thereafter updated on the same.
Familiarization Programme for Independent Directors
The members of the Board of the Company are provided with many opportunities to familiarise themselves with the Company, its management and operations. The Directors are provided with all the documents to enable them to have a better understanding of the Company, its operations and the industry in which it operates.
All the Independent Directors of the Company are made aware of their roles and responsibilities at the time of their appointment through a formal letter of appointment, which also stipulates the terms and conditions of their engagement. Directors are also informed of the various developments in the Company through presentations during the meetings.
Pursuant to Regulation 25(7) of the Listing Regulations, the Company imparted various familiarization programmes for its Directors which includes review of industry outlook, regulatory updates with respect to the Act, Listing Regulations, taxation and other matters by Auditors, Company Secretary and experts, internal control over financial reporting, Prevention of Insider Trading Regulations, framework for related party transactions. Pursuant to Regulation 46 of the Listing Regulations, the details required are available on the website of your Company at the following web link: http://www.ltgroup. in/business-and-investors.html#investor-updates
Directors'' Responsibility Statement
Pursuant to Section 134(3)(c) of the Act, the Directors to the best of their knowledge hereby state and confirm that:
1. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
2. 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 at the end of the financial year and of the profit and loss of the Company for that period;
3. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
4. The Directors had prepared the annual accounts on a going concern basis;
5. 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
6. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Particulars of Directors and Employees
The ratio of remuneration of each Director to the median employees'' remuneration as per Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is disclosed in Annexure III to this report. The statement containing particulars of remuneration of employees as required under Section 197(12) of the Act, read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is available on the Company''s website at http://www.ltgroup.in/index.html. Any Member desirous of obtaining a copy of the said annexure may access the aforesaid weblink or write to the Company Secretary at [email protected].
In compliance with the statutory requirements, the Company has formulated mandatory Committees viz. Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Risk Management Committee and Stakeholders'' Relationship Committee.
During the year under review, all the recommendations made by the Committees of the Board, including the Audit Committee, were accepted by the Board.
The Board of Directors met six (6) times during the financial year ended March 31, 2023, i.e. on May 30, 2022, July 29, 2022, October 31, 2022, November 11, 2022, January 31,2023 and February 28, 2023.
A detailed update on the Board, its composition, governance of committees including detailed charter, terms of reference of various Board Committees, number of Board and Committee meetings held during the financial year ended March 31, 2023 and attendance of the Directors at each meeting is provided in the Report on Corporate Governance, which forms part of the Annual Report.
Further, the Board of Directors at their meeting held on July 28, 2023, approved the closure of Governance Committee and Capital Raising Committee since these were incorporated for specific reasons and the Company do not anticipate the requirement of these committees in near future.
The Company has constituted the Audit Committee, in accordance with the provisions of Section 177 of the Act read with Regulation 18 of Listing Regulations. As on March 31, 2023 the Audit Committee comprises of Mr. Abhiram Seth, Mrs. Neeru Singh, Mrs. Ambika Sharma, Independent Directors and Mr. Alrumaih Sulaiman Abdulrahman S, being Non- Executive NonIndependent Director.
Company Secretary & Compliance Officer, Chief Financial Officer, Statutory and Internal Auditors are the permanent invitees to the Committee. Further details relating to the Audit Committee, including number of meetings held during the year, are provided in the Corporate Governance Report forming part of the Annual Report.
During the year under review, all recommendations made by the Audit Committee were accepted by the Board of Directors.
M/s MSKA & Associates, Chartered Accountants, (Firm Registration Number 105047W), were appointed as the Statutory Auditors of the Company, for a period of five years, at the 30th AGM of the Company to hold office till the conclusion of the 35th AGM.
The Auditors have issued an unmodified opinion on the financial statements of the Company for the financial year ended March 31,2023. The said Report of the Auditors is self-explanatory and therefore does not require further comments and explanations. The Auditors'' Report for the financial year ended March 31,2023 on the financial statements of the Company forms part of this Annual Report.
In terms of Section 204 of the Act and Rules made there under, M/s. D Dixit & Associates, Practicing Company Secretary has been appointed as Secretarial Auditors of the Company.
M/s. D Dixit & Associates, Company Secretaries, (Certificate of Practice No. 7871), appointed as the Secretarial Auditors, have carried out an audit of the secretarial records of the Company for the financial year 2022-23. The Secretarial Audit Report for the financial year ended March 31, 2023 under the Act, read with Rules made thereunder and Regulation 24A of the Listing Regulations, is set out in Annexure IV to this Directors Report.
Observations/ remarks specified in the said reports alongwith status of the said observations / remarks as on the date of this report are mentioned below:
During the Audit Period it was found that Two Designated employees of the Company has violated the code of conduct framed under SEBI (Prohibition of Insider Trading) Regulations, 2015 as they have conduct trading during closure of trading window as well as also done contra trade. Company has issued warning letters to those Designated Persons and have warned them to remain cautious going forward.
The requirement of maintaining half of the Board as Independent Director is not met as on March 31, 2023. However, the said requirement was complied by the Company during the quarter ended June 30, 2023.
Pursuant to requirement of Regulation 24A of the Listing Regulations, the Secretarial Audit Report of DAAWAT Foods Limited, material unlisted subsidiary, incorporated in India, of the Company, is annexed to this report as Annexure V to this Report
Pursuant to requirement of Regulation 24A of the Listing Regulations, the Secretarial Compliance Report for the financial year ended March 31, 2023, in relation to compliance of all applicable SEBI Regulations and circulars/guidelines issued thereunder, issued by M/s. D Dixit & Associates, Company Secretaries, has been filed with the stock exchanges within the prescribed time limit.
Pursuant to the provisions of section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board, on the recommendation of the Audit Committee, have appointed M/s. D Dixit & Associates, as the Secretarial Auditor for the financial year ending March 31,2024.
M/s. D Dixit & Associates, Company Secretaries, have provided a consent to the Company to act as the Secretarial Auditors for conducting the audit of the secretarial records for the financial year ending March 31, 2024, and have also confirmed that their appointment, if made, would be within the limits laid down by the Act
and Rules made thereunder and they are not disqualified for being appointed as Secretarial Auditors under the provisions of applicable laws. They have also confirmed that their firm is peer reviewed by The Institute of Company Secretaries of India.
Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act read with Rule 3 and Rule 4 of The Companies (Cost Records and Audit) Rules, 2014, are not applicable for the business activities carried out by the Company.
During the year under review, the Statutory Auditors and the Secretarial Auditors have confirmed that they have not come across any event indicating commitment of any fraud by the officers or employees of the Company and thus, no reporting under the provisions of section 142(12) of the Act and the Rules made thereunder was required.
In terms of compliance of Section 138 of the Act read with the Companies (Accounts) rules, 2014, the Board of Directors on the recommendation of Audit Committee approved the appointment of Grant Thornton, Bharat LLP as its Internal Auditors of the Company for reporting year 2023-24.
The Environment, Social and Governance ("ESG") components are factors that help ascertain both investment decisions and risk management with a lens of sustainability within the organization. The primary objective is to build a culture that encourages, promotes and achieves ethical business conduct which is more environmentally and socially conscientious, while adhering to prescribed/ applicable rules and regulations, and are more likely to sustainably succeed in the long run.
During the financial year 2022-23, the Company undertook a comprehensive materiality assessment exercise to gather insights on emerging ESG issues that may impact its business in the future. The objective was to assess the Company''s current status as an organization basis the worldwide tested parameters of ESG Key Performance Indicators and to lay down the road map for future actions to effectively contribute in achieving the global vision of considerably reducing carbon footprint.
The Company relentlessly strives to provide longterm sustainable value to all its stakeholders including customers, investors, suppliers, employees, government & regulatory bodies and communities. The Company has formulated an ESG Policy to monitor and regulate its ESG initiatives which has been uploaded on the website of the
Company and can be accessed at: http://www.ltgroup.in/ pdf/ESG-Policy.pdf.
During the financial year 2022-23, the Board renamed the Corporate Social Responsibility Committee as CSR & ESG Committee w.e.f May 30, 2022, to discharge its oversight responsibility on matters related to organization-wide ESG initiatives, priorities, and leading ESG practices. The CSR & ESG Committee reports to the Board and meets on regular intervals to review progress on the ESG initiatives undertaken by the Company.
Business Responsibility and Sustainability Report (BRSR)
In November 2018, the Ministry of Corporate Affairs ("MCA") constituted a Committee on Business Responsibility Reporting ("the Committee") to finalize business responsibility reporting formats for listed and unlisted companies, based on the framework of the National Guidelines on Responsible Business Conduct. Through its report, the Committee recommended that Business Responsibility Report be replaced with BRSR, where disclosures are based on ESG parameters, compelling organizations to holistically engage with stakeholders and go beyond regulatory compliances in terms of business measures and their reporting. The BRSR disclosures forms part of this Annual Report, which would follow the format detailed in the amendment to Regulation 34(2) (f) of Listing Regulations vide Gazette notification no. SEBI/LAD-NRO/GN/2021/22 dated May 05, 2021 and will form a part of this Annual Report.
The BRSR for the financial year 2022-23 is aligned with the nine principles of the National Guidelines on Responsible Business Conduct notified by the Ministry of Corporate Affairs, Government of India. We have further enhanced our existing strong reporting structure and mechanisms to ensure we capture reliable and accurate data for the requirements of BRSR disclosures.
Corporate Governance Certificate
Your Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements set out by the Securities and Exchange Board of India. The report on Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report.
Your Company has duly complied with the Corporate Governance requirements as set out under Chapter IV of the Listing Regulations. CS Debasis Dixit, Practicing Company Secretary, vide their certificate dated July 10, 2023, has confirmed that the Company is and has been compliant with the conditions stipulated in the Chapter IV of the Listing Regulations except that the Board composition of the Company, as on March 31,2023, did not met the criteria specified under Regulation 17(1) of the Listing Regulations. The said certificate is annexed
to the Corporate Governance Report forming part of this Annual Report. A Certificate of the CEO and CFO of the Company in terms of Listing Regulations, inter-alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed to the Corporate Governance Report.
Management Discussion and Analysis Report
Pursuant to Regulation 34 of the Listing Regulations, the Management Discussion and Analysis Report for the year under review is presented in a separate section forming part of this Annual Report.
Corporate Social Responsibility
In terms of the provisions of section 135 of the Act read with Companies (Corporate Social Responsibility Policy) Rules, 2014 and any amendment thereof, the Board of Directors of your Company has constituted a Corporate Social Responsibility ("CSR") Committee which has been renamed as CSR & ESG Committee w.e.f. May 30, 2022. The said Committee is chaired by Mrs. Neeru Singh, Independent Director. The other members of the Committee are Mr. Abhiram Seth, Independent Director, Mr. Vijay Kumar Arora, Managing Director and Mr. Ashwani Kumar Arora, Managing Director & CEO. Further, Mrs. Monika ChawlaJaggia, Company Secretary & Compliance Officer and Mr. Sachin Gupta, Chief Financial Officer are the permanent invitees to the Committee. Further details relating to the CSR & ESG Committee, including number of meetings held during the year, are provided in the Corporate Governance Report forming part of the Annual Report.
The CSR & ESG Committee confirms that the implementation and monitoring of the CSR Policy was done in compliance with the CSR objectives and Policy of the Company. The Company''s CSR Policy and annual report on the CSR activities undertaken during the financial year ended March 31,2023, in accordance with Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 ("CSR Rules") is set out in Annexure VI to this Report. The CSR Policy of the Company is available on its website viz. http://www. ltgroup.in/pdf/LT-Foods-CSR-Policy-2021.pdf.
Your Company is a caring corporate entity and lays significant emphasis on development of the communities around which it operates. During the year, on the recommendation of the CSR & ESG Committee and as approved by the Board, your Company has executed several projects in the areas of Trainings to the farmers with sustainable farming practices, water conservation, Education, Health Care, Girl Child Education, village adoption. As per section 135 of the Act, read with CSR
Rules, companies are required to spend minimum 2% of their average net profit for the last three financial years. Basis which the minimum requirement for the Company was Rs. 2.73 crores for the financial year 2022-23.
Risk management is embedded in Company''s operating framework. The Company believes that risk resilience is key to achieving higher growth. To this effect, there is a process in place to identify key risks across the functions and prioritise relevant action plans to mitigate these risks. To have a more robust process, the Company had constituted a Risk Management Committee to focus on risk management, including determination of the Company''s risk appetite, risk tolerance and regular risk assessments (risk identification, risk quantification and risk evaluation).
The Risk Management Framework is reviewed periodically by the Risk Management Committee, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. The objective of the Company''s Risk Management Policy is to have a well-defined approach to risk. The policy lays down broad guidelines for timely identification, assessment, and prioritisation of risks affecting the Company in the short term and in the foreseeable future. The policy suggests framing an appropriate response action for the key risks identified, so as to make sure that the risks are adequately addressed or mitigated. Details of the Committee including number of meetings held during the year, are provided in the Corporate Governance Report forming part of the Annual Report.
Details on risk management forms part of the Management Discussion and Analysis Report under the section ''Opportunities & Threats'', which forms part of this Annual Report.
The Company has in place a comprehensive Risk Management Policy which has been uploaded on the website of the Company and can be accessed at http:// ltgroup.in/pdf/LT-Foods%20-Risk-Management.pdf.
The Company has adequate Internal Financial Control System over financial reporting which ensures that all transactions are authorized, recorded, and reported correctly in a timely manner. The Company''s Internal Financial Control over financial reporting is designed to provide reliable financial information and to comply with applicable accounting standards.
The Company periodically tracks all amendments to Accounting Standards and makes changes to the underlying systems, processes and financial controls to ensure adherence to the same. All resultant changes to the policy and impact on financials, if any, are disclosed after due validation with the Statutory Auditors and the Audit Committee.
Your Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations. Such controls have been assessed during the year under review taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessments carried out by the management, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls was observed.
Obligation of Company under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The Company believes that every employee should have the opportunity to work in an environment free from any conduct which can be considered as sexual harassment.
The Company is committed to treating every employee with dignity and respect. The Company has formulated a policy on ''Prevention of Sexual Harassment at Workplace Policy'' as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 and Rules made thereunder. The policy is applicable to all the establishments of the Company located in India. The Company has constituted Internal Complaints Committees to ensure implementation and compliance with the provisions of the aforesaid Act and the Rules.
This Policy addresses the following major objectives:
⢠To define Sexual Harassment;
⢠To lay down the guidelines for reporting acts of Sexual Harassment at the workplace; and
⢠To provide the procedure for the resolution and redressal of complaints of Sexual Harassment.
The policy lays down a detailed procedure for making a complaint, initiating enquiry therein and satisfactory redressal of the complaint.
During the financial year 2022-23, no complaint was reported under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder and none was pending from the previous financial year.
Whistle Blower Policy / Vigil Mechanism
Company encourages an open and transparent system of working and dealing amongst its stakeholders. LT Foods has adopted a ''Whistle Blower Policy'' which encompasses a comprehensive framework of managing complaints of every stakeholder. It encourages its employees and various stakeholders to raise concerns about illegal / unethical behaviour observed in the Company, compromise / violation of Company''s Code of Conduct or legal or regulatory provisions, corruption, misuse of office, actual or suspected fraud and other malpractices detrimental to the interest of the Company without any fear of reprisal, discrimination, harassment or victimization of any kind.
The policy also covers reporting of instances of leakage/ suspected leakage of unpublished price sensitive information which are in violation to SEBI (Prohibition of Insider Trading) Regulations, 2015 and the Company''s Code of Conduct for Regulating, Monitoring and Reporting Trading by Designated Persons.
Complaints, if any, are received by the Ombudsman through a dedicated email ID or by way of letter addressed to the Ombudsman. In case the whistle blower wishes to raise a complaint directly to the members of the Audit Committee, and not through above mentioned normal channels, the complaint may be directly made to the Chairperson of the Audit Committee.
Details of whistle blower complaints received, if any, and the functioning of the whistle blower mechanism are reviewed periodically by the Audit Committee. No person has been denied access to the Chairperson of the Audit Committee. During the financial year 2022-23, no complaint was received under the Whistle Blower Policy of the Company. Details of whistle blower policy are available in the Corporate Governance Report that forms part of this Annual Report.
The Whistle Blower Policy is available on the website of the Company at the link http://ltgroup.in/pdf/Whistle-Blower%20Policy August%202021.pdf.
Nomination and Remuneration Policy
The Nomination and Remuneration Policy of the Company, inter alia, provides that the Nomination and Remuneration Committee shall:
⢠lay down the effective manner of performance evaluation of the Board, its Committees and the Directors
⢠formulate the criteria for Board membership, including the appropriate mix of Executive & NonExecutive Directors and Board Diversity;
⢠approve and recommend compensation packages and policies for Directors, Key Managerial Personnel and Senior Management Personnel; and
⢠such other matters as provided under section 178 of the Act and under the provisions of Listing Regulations.
The salient features of the Nomination and Remuneration Policy of the Company are outlined in the Corporate Governance Report which forms part of this Annual Report. The Policy is available on the website of the Company at: http://www.ltgroup.in/pdf/LT-Foods-
Remuneration-Policy.pdf.
Particulars of contracts or arrangements with Related Parties
All arrangements/ transactions entered into by the Company with its related parties during the financial year 2022-23 were in the ordinary course of business and on an arm''s length basis. During the year under review, the Company had taken shareholders'' approval for all the arrangement/ transaction with related parties which could be considered material in accordance with the Company''s Policy on Related Party Transactions, as amended, read with the Listing Regulations. As per the requirements of Indian Accounting Standards 24, details of all the transactions of the Company with its related parties have been disclosed in the financial statements forming part of this Annual Report.
A declaration in Form AOC-2, as required under sections 134(3)(h) read with 188(1) of the Act is enclosed as Annexure VII to this report. The Policy on the Related Party Transactions is available on the Company''s website at: http://www.ltgroup.in/pdf/LT-Food-Related-Party-
Transactions-2022.pdf.
A detailed note on the procedure adopted by the Company in dealing with contracts and arrangements with related parties is provided in the Report on Corporate Governance, which forms part of this Annual Report.
Compliance with the provisions of
Secretarial Standards
The mandatory Secretarial Standards issued by the Institute of Company Secretaries of India, have been duly complied with by the Company, during the year under review.
Conservation of Energy, Technology
Absorption and Foreign Exchange Earnings & Outgo
The details of energy conservation, technology absorption and foreign exchange earnings and outgo as required under section 134(3) of the Act read with Rule 8 of Companies (Accounts of Companies) Rules, 2014 is as follows:
We have strategized the implementation of plant automation using SCADA across our primary packing and processing facilities. This aims to uphold optimal efficiency and quality while minimizing the slightest possibility of manual errors.
We are actively engaged in executing multiple in-house projects aimed at enhancing efficiency. These projects encompass areas such as loading optimization, minimizing concealed wastage tied to manpower and materials, optimizing power consumption, introducing high-efficiency machinery along with IE4 motors, and maximizing the utilization of renewable energy sources.
We have incorporated Bar Codes as a pivotal tool and are striving to uphold seamless production planning and comprehensive traceability from the production process to invoicing. This initiative will enable us to monitor even the slightest discrepancies and ensure accurate scheduling and thorough traceability.
We embarked on our journey towards digitization a year ago and have now progressed to the second phase with the valuable assistance of our esteemed consultants in the field.
By harnessing green energy from a turbine that utilizes husk a by product for the Company, to generating an impressive capacity of 3.5 MW per hour, resulting in minimum utilisation of electricity.
Company with the help of solar panels have been able to generate solar energy of approx. 5,00,000 KWH on a yearly basis, resulting in energy conservation and reduction in green house gas emissions.
Company has installed a new rainwater harvesting well and constructed a pond within its plant premises, with an aim to significantly increase its capacity of rainwater harvesting and enhancing groundwater recharge capacity. Consequent to which water stress level will be reduced and will help in restoring the land with rain water.
Company has been working towards implementing advanced energy-efficient technologies by installing synchronization meters to effectively manage the power generated from DG (Diesel Generator), turbines, and solar sources. This has resulted in energy saving and productivity improvement in the operations of the Company.
During the year under review, Company has replaced Diesel Operated Fork Lift with Battery Operated fork lift which has impacted in reducing Fossil fuel consumption and air emission inside the plant premises, making it a healthier environment for the plant workforce.
Company has taken an initiative of building a mini forest in approx. 2 acers of land within the Company premises for creating a healthier environment within the factory premises and taking a step in contributing towards Company''s ESG Targets.
Foreign Exchange Earnings and Outgo:
During the year, the total foreign exchange spent was depicted below in Lakhs and the total foreign exchange earned were as follows:
Lakhs |
||
Particulars |
31-03-2023 |
31-03-2022 |
Value of imports on CIF basis |
||
Capital goods |
11.20 |
96.44 |
Stores and spares |
910.72 |
14.71 |
Rice |
106.99 |
- |
Packing Material |
- |
20.86 |
Other |
4.62 |
- |
Other Food Items |
- |
- |
Total |
1,033.54 |
132.00 |
Expenditure in foreign currency Legal & Professional |
102.66 |
16.79 |
Interest and other charges to bank |
53.96 |
281.38 |
Clearing & Forwarding Expense |
6,238.37 |
5,968.80 |
Advertisement |
78.27 |
- |
Sales promotion |
61.94 |
187.12 |
Commission on export sales |
124.08 |
284.92 |
Others |
17.71 |
107.31 |
Total |
6,676.99 |
6,846.32 |
Lakhs |
||
Particulars |
31-03-2023 |
31-03-2022 |
Earnings in foreign currency |
||
FOB value of exports |
1,52,053.80 |
1,18,787.69 |
Total |
1,52,053.80 |
1,18,787.69 |
Change in the nature of business
There is no change in the nature of the business operations of the Company, during the financial year ended March 31,2023.
Material changes and commitments, if any, affecting the financial position between the end of the financial year and the date of Report.
There are no material changes and commitments, affecting the financial position of the Company between the end of the financial year ended March 31, 2023 and the date of this Report. Except that a Step-Down wholly owned subsidiary company of LT Foods Limited in the name of "LT Foods UK Limited" has been incorporated on July 17, 2023 to expand and strengthen our presence in United Kingdom.
Investor Education and Protection Fund
In accordance with the applicable provisions of the Act read with Investor Education and Protection Fund (Accounting, Audit, Transfer, and Refund) Rules, 2016 ("IEPF Rules"), all unclaimed dividends are required to be transferred to the Investor Education and Protection Fund ("IEPF") after completion of seven consecutive years. Further, according to IEPF Rules, the shares on which dividend has not been claimed by the shareholders for seven consecutive years or more shall be transferred to the demat account of the Investor Education and Protection Fund Authority ("IEPF Authority"). After the transfer, the concerned shareholders can claim the said shares along with the dividend(s) by making an application to IEPF Authority in accordance with the procedure available on www.iepf.gov.in and on submission of such documents as prescribed under the IEPF Rules. On receipt of the application, the Company shall send an online verification report to the IEPF Authority after verifying all the necessary details which is duly certified by the Nodal Officer. All corporate benefits accruing on such shares including dividend shall be credited to IEPF.
During the year under review, unpaid or unclaimed dividend amounting to Rs. 2,42,315.50/- in respect of shares transferred earlier to IEPF Authority, was transferred by the Company to the IEPF, established by the Government of India.
The dividend declared for the financial year 2015-16, is due to be transferred to IEPF account during the financial year 2023-24.
The Company has been regularly sending communications to members whose dividends are lying unclaimed requesting them to claim their outstanding dividend amount by providing/updating their bank details with the RTA/Company/ Depository Participant, as the case may be so that their dividend amount do not remain unclaimed for seven consecutive years and thus attracting the provision of transferring the corresponding shares to IEPF Authority.
Further the amount of Dividend unclaimed/unpaid are lying in the respective unpaid / unclaimed dividend accounts and can be claimed by the respective shareholders by sending required documents to the Company''s Registrar and Share Transfer Agent (RTA) i.e. Big Share Services Private Limited, before the due date of transferring the same in IEPF account.
Annual Return
A copy of the Annual Return of the Company containing the particulars prescribed under section 134(3)(a) and 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, as amended, in Form MGT-7, as they stood on the close of the financial year i.e. March 31,2023 is uploaded on the website of the Company and can be accessed through the following link: http://ltgroup.in/investor-updates/ annual-return.html.
Details of significant and material orders passed by the regulators or courts
During the financial year 2022-23, no significantly material order was passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in the future.
Affirmations
To the best of our knowledge and the information available, no application against the Company was filed in any court in India under the Insolvency and Bankruptcy Code, 2016, nor any proceedings thereunder is pending as on March 31,2023.
During the year under review, there was no instance of onetime settlement with any bank or financial institution.
Acknowledgements
Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board places on record its appreciation for the support and co-operation your Company has been receiving from all its business partners - suppliers, distributors, retailers and others associated with it. Your Company looks upon them as partners in progress and share with them the rewards of growth.
Your Directors also express their sense of gratitude to all the shareholders, customers, vendors, banks and regulatory authorities, both at the Central and State level, and look forward to their continued support.
For and on behalf of Board of Directors of LT Foods Limited
Gurugram, Vijay Kumar Arora
July 28, 2023 Chairman and Managing Director
Mar 31, 2018
To,
The Members,
The Directors have pleasure in presenting their 28th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2018.
1. Financial Performance of the Company (Standalone)
(Rs. In Lakhs)
Particulars |
Financial Year |
Financial Year |
(2017-18) |
(2016-17) |
|
Gross Income |
215,665.84 |
207,606.04 |
Profit Before Interest and Depreciation |
15,697.02 |
17,741.71 |
Finance Charges |
8,529.51 |
10,660.02 |
Gross Profit |
39,967.55 |
39,723.47 |
Provision for Depreciation |
1,810.23 |
2,339.49 |
Net Profit Before Tax |
5,357.28 |
4,742.20 |
Net Profit After Tax |
4,195.54 |
2,989.89 |
Balance of Profit brought forward |
26,328.57 |
23,784.87 |
Balance available for appropriation |
29,917.82 |
26,328.57 |
Proposed Dividend on Equity Shares |
400.12 |
401.87 |
Tax on proposed Dividend |
81.45 |
81.42 |
Transfer to General Reserve |
Nil |
Nil |
Surplus carried to Balance Sheet |
29,917.82 |
26,328.57 |
2. Companyâs working during the year
On standalone basis, our total revenue stood at Rs. 2,157 Crores higher by 4% year-on-year. The gross profit stood at Rs. 400 Crores. Profit after tax stood at Rs. 42 Crores as compared to Rs. 30 Crores in financial year 2017, representing a growth of 40% year-on-year. This led to resultant EPS of Rs. 1.49 per share by 33%. EPS is based on fully diluted basis adjusted for the stock split from â10 per share to Rs. 1 per share.
Our total revenue stood at Rs. 3,650 Crores higher by 11% year-on-year driven by higher contribution of branded sales. The gross profit increased by 11% to Rs. 979 Crores. EBITDA came in at Rs. 414 Crores, an increase of 2% on year-on-year basis translating to EBITDA margin to 11.3% as compared to 12.3% in the last year.
Our profit before tax during the year increased by 12% to Rs. 218 Crores led by lower interest cost and depreciation. Profit after tax stood at Rs. 144 Crores as compared to Rs. 129 Crores in financial year 2017, representing a growth of 12%. This led to resultant improvement in EPS to Rs. 4.80 per share. EPS is based on fully diluted basis adjusted for stock split from Rs. 10 per share to â1 per share. Moving on geographical revenue and realization breakup branded India sales stood at Rs. 892 Crores up by 13% year-on-year while the average realization during the year increased to Rs. 51 per kg resulting in an increase of 18%. International branded sales came in at Rs. 1,238 Crores a growth of 23% while the average realization increased to Rs. 96 per kg higher by 5%.
One of the growth driver of our business is our organic business, which has also grown by 50% in Financial Year 2018.
The focus has been on strengthening the consumer business both in India and international market, which is depicted in the overall growth of our consumer business that is 21%.
Our branded business has grown by 18% in value terms on year-on-year basis in financial year 2017-18 that was primarily driven by an increase of 13% in India and 23% in International branded business respectively.
The contribution of branded business to overall rice business has increased from 64% to 69% in financial year 2017-2018 driven by consistent brand investments, strengthening the supply chain, adopting channel wise strategy to strengthen out footprint in all the channels, be it the general trade, modern trade or wholesale or online business.
Organic business contribution has increased from 7% to 10% on year-on-year basis and stands at Rs. 361 Crores. The Company has added a new product line, a new customer across Europe and USA for organic business.
Our credit rating has also been upgraded by CRISIL to A-/ Positive outlook from BBB / Positive outlook.
3. Change in the nature of business, if any-
During the current year, there has been no major change in the business.
4. Dividend
The Board of Directors has recommended 15% dividend for the financial year 2017-18 and decided to retain back the remaining earnings.
5. Reserves
Out of the amount available for appropriation, Companyâs Directors proposed to transfer â NIL amount to General Reserve and retain Rs. 29,917.82 Lakhs to Profit and Loss Account.
6. Share Capital
During the Financial year 2017-18, the Company has allotted 1,12,910 Equity Shares to employee of the company who was eligible for allotment under the Employee Stock Option Plan-2010.
Further, the Company has also made allotment of 53,100,000 Equity Shares through the Qualified Institutional Placement (QIP) at price of Rs. 75.20 per Equity Shares on 26th December 2017. Pursuant to the said allotment of Equity Shares, the paid up share capital of the company stands increased to Rs. 31,98,44,780/- comprising of 31,98,44,780 Equity Shares of Rs. 1 each.
7. Details of Directors and Key Managerial Personnel Appointed and Resigned during the year
There were no Director and Key Managerial Personnel has been appointed during the year how ever the details of the Director resigned during the year is as follows:-
S. |
Name of the Person |
Designation |
Appointment/Resignation |
Date of Appointment / |
No. |
Resignation |
|||
1. |
Adesh Kumar Gupta |
Independent Director |
Resignation |
26/05/2017 |
8. Particulars of Employees & Employee Remuneration
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, The information required is as follows.
Managerial Remuneration:
1. |
Ratio of remuneration of each director to median remuneration of employees |
|
Vijay Kumar Arora |
1:33 |
|
Ashwani Kumar Arora |
1:33 |
|
Surinder Kumar Arora |
1:26 |
|
2. |
Percentage increase in remuneration of each director and KMPs |
|
Vijay Kumar Arora |
Nil |
|
Surinder Kumar Arora |
Nil |
|
Ashwani Kumar Arora |
Nil |
|
Monika Chawla Jaggia |
70% |
|
3. |
Percentage increase in the median remuneration of employees |
10% |
4. |
Number of permanent employees |
896 |
5. |
Average percentile increase in salary of employees, other than managerial personnel, comparison with percentile increase in managerial remuneration and justification |
9% |
Managerial Increase |
5% |
|
Non Managerial Increase |
10% |
|
6. |
Affirmation that the remuneration is as per the remuneration policy of the Company |
Yes |
As per rule 5(3) of Companies (Appointment and Remuneration) Rules, 2014, the employees who draw salary exceeding the limits of â1.02 Crore is as follows:
Name |
Designation |
Remuneration (in crores) |
Nature of employment |
Qualification |
Experience |
Age |
Last employment |
% of shares held |
Vijay Kumar Arora |
Managing Director |
1.69 |
Permanent |
B.Sc. |
42 |
60 |
NA |
7.98 |
Surinder Kumar Arora |
Managing Director |
0.59 |
Permanent |
Under Graduate |
36 |
56 |
NA |
7.98 |
Ashwani Kumar Arora |
Managing Director |
0.98 |
Permanent |
B COM |
30 |
51 |
NA |
7.98 |
9. Board Meetings
During the Year, seven board Meetings were held, the dates on which these meeting were held are 25th May, 2017, 10th August 2017, 3rd October, 2017, 14th November, 2017, 26th December 2017, 08th February, 2018 and 30th March, 2018. The details of the same given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.
10. Performance Evaluation
In pursuance of Section 178 of the Companies Act, 2013 read with Regulation 4(2), 17(10) and 19(4) read with Schedule II Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 and Secretarial Standards-I, the Nomination and Remuneration Committee has framed the evaluation process and the performance evaluation of Independent Directors, Executive Directors and of Board as a whole as well as working of its Audit, Nomination & Remuneration and Compliance Committees has been carried out during the financial year 2017-18.
The Independent Directors of the Company met Separately on 08th February, 2018 without the presence of Non-Independent Directors and inter-alia reviewed the performance of the members of management, NonIndependent Directors, Board as a whole performance of the Chairman of the Company and the Committees after taking into consideration the views of Executive and NonExecutive Directors.
In compliance with the provisions of SEBI Listing Regulations, the Board of Directors has also carried out evaluation of every Independent Directorâs performance during the year. The Board members had submitted to Nomination and Remuneration Committee, their response on a scale from 5 to 1 (Excellent to Performance Needs Improvement) for evaluating the entire Board, respective Committees including Chairman of the Board.
The Nomination and Remuneration Committee has also carried out evaluation of every Directorâs performance.
The Directors had duly completed with the evaluation process.
It was further acknowledged that every individual Member and Committee of the Board has contributed best in the growth to the organization.
11. Statement of Declaration by an Independent Director(s) and re- appointment, if any
All the Independent directors have given their Independency declaration as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
12. Remuneration Policy
The Company has framed the Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules and Regulation 19 of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015. The remuneration policy of the Company is in compliance of Section 178 (4) of the Companies Act, 2013. The Remuneration policy can be referred to the weblink http:// www.ltgroup.in/pdf/LT-Foods-Remuneration-Policy.pdf
The salient features of Remuneration policy are as follows: -To formulate a criteria for determining qualifications, positive attributes and independence of a Director -To recommend to the Board, the appointment and removal of Senior Management
-To carry out evaluation of Directorâs performance and recommend to the Board appointment/ removal based on his/ her performance.
- To recommend to the Board on (i) policy relating to remuneration for Directors, Key Managerial Personnel and Senior Management and (ii) Executive Directorsâ remuneration and incentive
-To make recommendations to the Board concerning any matters relating to the continuation in office of any Director at any time including the suspension or termination of service of an Executive Director as an employee of the Company subject to the provision of the law and their service contract;
- Ensure that level and composition of remuneration is reasonable and sufficient, relationship of remuneration to performance is clear and meets appropriate performance benchmarks,
- To devise a policy on Board diversity
-To develop a succession plan for the Board with segregated succession readiness of the management council and executive.
13. Details of Subsidiary/Joint Ventures/Associate Companies
Pursuant to sub-section (3) of Section 129 of the Act, the statement containing salient features of the financial statement of Companyâs subsidiaries, associate or joint venture is given as Annexure-V [Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement]
During the year, the Company generated a revenue of Rs. 3,650 Crores at group level. Its subsidiaries played a major role in contirbuting to the overall revenue. LT Foods Americas (formerly known as Kusha Inc, the fellow subsidiary of the Company contributed approx 29% to the overall revenue. The organic arm NBFL, a wholly owned subsidiary contributed approx. 10% to the group revenue.
Further, the Annual Accounts and related documents of the subsidiary Company shall be kept open for inspection at the registered & Corporate Office of the Company. The Company shall also make available copy thereof upon specific request by any member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary.
Name of the Companies, which became or have ceased to became as Subsidiaries/Joint Ventures/Associates Companies during the year.
During the year, the Company acquired 100% stake of Deva Sing Sham Singh Export Private Limited which has become the wholly-owned subsidiary of the Company. Company also acquired 92% Stake of M/s Raghunath Agro Industries Private Limited from its another subsidiary namely Daawat Foods Limited.
14. Auditors
M/s. Walker Chandiok & Co. LLP, Chartered Accountants were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 18th September, 2015, for a term of five consecutive years. As per the provisions of Section 139 of the Companies Act, 2013, the appointment of Auditors is required to be ratified by Members at every Annual General Meeting.
However, in accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting
The Auditor has confirmed that they are not disqualified under any provisions of Section 141(3) of Companies Act, 2013 and also their engagement with the company is within the prescribed limits under section 141 (3)(g) of Companies Act, 2013
15. Auditorsâ Report
The Auditorsâ Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.
They have been no instances of fraud reported by the Statutory Auditors under Section-143(12) of the Companies Act, 2013 read with rules framed thereunder, either to the Company or to the Central Government.
16. Audit Committee
In pursuance of Section 177 of the Companies Act, 2013 read with regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted the Audit Committee and the details in respect of the composition of Audit Committee of the Company is given in Corporate Governance Report of the Company.
17. Secretarial Audit Report
In terms of Section 204 of the Act and Rules made there under, M/s. D Dixit & Associates, Practicing Company Secretary has been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure IV to this report. The point-wise comments are enumerated as follows.
Reply to the observations in the Secretarial Audit
1) Delay in Filing Forms
Due to the oversight, the Company has delayed in filing some of the forms in prescribed time frame of Companies Act, 2013 and applicable additional fees has already been paid to Ministry of Corporate Affairs.
2) CSR Spent
The Company has not spent the entire amount on CSR. In the coming years, it will spend the entire amount allocated for the year in compliance with Section-135 of the Companies Act, 2013.
3) Related Party Transactions exceeding the limits approved by Shareholders
The shareholders approved all the proposed material related party transactions in the AGM held on 19th September, 2017 however the actual transactions were in excess of those approved. The Board of Directors has already proposed to ratify the same in the AGM scheduled to be held on 24th September 2018.
4) Delay in filling of APR
The Company has already filed the necessary forms with RBI.
5) Gratuity Payment to Ex-employee
The Company has already paid gratuity to ex-employee
18. Internal Audit & Controls
In terms of compliance of Section 138 of the Companies Act, 2013 read with the Companies (Accounts) rules, 2014, the Company continues to engage Pro Advisory India LLP as its Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
19. Issue of employee stock options
The details of ESOP as per rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014 are as follows:
Particulars |
Option 1 |
Option 2 |
Approval |
6,483,290 |
2,012,090 |
Options granted |
6,483,290 |
2,012,090 |
Options vested |
6,483,290 |
2,012,090 |
Options exercised |
6,277,520 |
1,275,420 |
Total number of shares arising out of exercise of options |
6,277,520 |
1,275,420 |
Options forfeited/lapsed/cancelled |
205,770 |
736,670 |
Variations of terms of options |
NIL |
NIL |
Money realized by exercise of options |
- |
429,058 |
Total number of options in force |
- |
- |
Notes: -
1. Details of options granted during the fiscal 2012 to:
Particulars |
|
(a) |
Directors and key managerial personnel |
1. |
Som Nath Chopra 46,318 |
2. |
Monika Chawla Jaggia 18,177 |
(b) |
Any other employee who received a grant in any one year of options The following employees have received a grant in amounting to 5% or more of the options granted during the year (includes any one year of options amounting to 5% or more employees and group Company employees) of the options granted during the year 2011-12 - Mr. S.K. Salhotra - Mr. Som Nath Chopra - Mr. Dipol Dhole - Mr. Vijay Malik - Mr. Vivek Chandra - Mr. Vikram Patil - Mr. Kamal Poplai The following employees have received a grant in any one year of options amounting to 5% or more of the options granted during the year 2012-13 - Mr. Mukesh Aggarwal - Mr. Sandeep Lamba - Mr. Gerald Taylor - Mr. Mrinal Mathur |
(c) |
Identified employees who are granted options, during any one year equal None to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant |
20. Vigil Mechanism:
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy can be found on the following link www.ltgroup.in under investors/policy documents/Vigil Mechanism Policy on the website of the Company.
21. Risk Management Policy
LT has in place comprehensive risk assessment and minimization procedures, which are reviewed by the top management at regular intervals.
22. Extract of Annual Return:
Pursuant to the requirements of Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of the annual return in MGT 9 has been made a part of this Annual Report as ANNEXURE I. The annual return can also be found on the following link www.ltgroup.in under investors updates http://ltgroup.in/pdf/Annual%20Return-2018.pdf on the website of the Company
23. Material changes and commitments, if any, affecting the financial position of the company which have occurred during the period beginning with end year of the company to which the financial statements relate and the date of the report
There have been no material changes in the business, which may affect financial position of the Company.
24. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and companyâs 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 & Companyâs operations in future.
25. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.
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 orderly and efficient conduct of its business including adherence to the Companyâs policies, the safeguarding of its assets, 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 internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Companyâs internal financial control system also comprises due compliances with Companyâs policies and Standard Operating Procedures (SOPs) and audit and compliance by Internal Audit team, Pro Legal Advisory, India, LLP.
26. Deposits
The Company has neither accepted nor renewed any deposits falling under Chapter V of Companies Act, 2013.
27. Cost Record
The Central Government has not specified maintenance of cost record under section 148(1) of the Company Act, 2013 in respect of our Companyâs product.
28. Particulars of loans, guarantees or investments
The Company has not granted any loans falling within the preview of Section 186 of the Companies Act, 2013, however the details of Investments made and security or guarantee given are as follows:-
Details of Investments:-
S. No |
Date of Investment |
Details of Investee |
Amount -(In Lakhs) |
Purpose for which the proceeds from investment is proposed to be utilized by the recipient |
Date of Board resolution |
Date of special resolution |
Expected rate of return |
1 |
30.09.2017 |
Deva Singh Shyam Singh Exports Private Limited |
1.00 |
Business Purpose |
12.04.2017 |
N.A. |
N.A. |
2 |
15.05.2017 |
Daawat Kameda India Private Limited |
170.85 |
Business Purpose |
12.04.2017 |
N.A. |
N.A. |
3 |
31.03.2018 |
Raghunath Agro Industries Private Limited |
2,110.38 |
Business Purpose |
30.03.2018 |
N.A. |
N.A. |
Details of Guarantee / Security Provided:
Sl. No. |
Details of recipient |
Amount (In Lakhs) |
Purpose for which the security/guarantee is proposed to be utilized by the recipient |
1 |
Daawat Foods Limited |
25,031.40 |
Working capital loan |
2 |
Nature Bio Foods Limited |
9,782.25 |
-do- |
3 |
Raghunath Agro Industries Private Limited |
6,870.89 |
-do- |
4 |
LT Foods Europe BV |
7,365.24 |
Working capital loan & Against plant and machinery |
29. Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 are disclosed in Form No. AOC-2. With reference to Section 134(3) (h) of Companies Act, 2013 all contracts and arrangements with related parties under Section 188(1) entered by the Company during the financial year are in ordinary course of business and on arms length basis.
30. Corporate Governance Certificate
The report on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in a separate section forming part of this Annual Report.
A Certificate from the Practicing Company Secretary CS Debasis Dixit, regarding compliance of the conditions of corporate governance as stipulated in Regulation 27 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 is annexed to the report.
31. Management Discussion and Analysis
The Management Discussion and Analysis Report prepared in accordance with the Regulation 34(2)(e) of Listing Regulations forms part of this Annual Report for the year ended 31st March, 2018.
32. Obligation of Company under the sexual harassment of women at workplace (Prevention, prohibition and redressal) Act, 2013.
In order to prevent sexual harassment of women at work place a new Act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act, every Company is required to set up an Internal Complaints Committee to look into the complaints relating to sexual harassment at work place of any women employee.
The Company has adopted a policy for prevention of sexual harassment of Women at workplace and has set up Committee for implementation of said policy. During the year, Company has not received any complaint of harassment.
33. Conservation of energy, technology absorption and foreign exchange earnings and outgo
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:
Conservation of energy
The Company continued to place major emphasis on Conservation of Energy and the measures taken in previous year were continued. The efficiency of energy utilization is being monitored in every Quarter in order to achieve effective conservation of energy.
We at, LT has taken several initiatives towards this direction and have been working both towards energy conservation and new technology absorption.
Energy Conservation
- All plant lightning has been replaced with LED that are comparatively more energy efficient as the power consumption drops to approx. 60% in comparison to incandescent lamps. Moreover it also reduces the maintenance cost of lightning due to increased life span.
- Working towards deployment of alternate source of energy, LT has installed 500KW Solar plant under the OPEX model.
- Plant leakages have been plugged to control air and steam loss in the process which indirectly effects energy consumption.
Technology Absorption
- New state of art parboiling plant has been set up at Bahalgarh thereby adding to the overall plant capacity.
- Old inefficient color sorters were replaced with new technology sorters thereby reducing the overall rejection in final product.
- LT being the pioneer in Rice industry installed X-Ray before the final packing to reduce foreign matter in the final product. In the fiscal 2017-18, the number of X-Rays was increased by addition to other packing lines as well.
Technology Imported
- In a list of imported technologies. LT has high precision X-Rays and Color sorters in addition to high capacity milling and cleaning machines.
- To improve the customer base in consumer pack division, LT Foods has been continuously adding to its capacity by installation of new FFS machines.
Power & Fuel Consumption (Bahalgarh Plant)
(b) Technology, Absorption, Adaption and Innovation
Technology is changing day by day. Over the years, the Company has taken significant steps in adoption of new technologies thus improving overall efficiency of Plants. Similar steps were taken in the current year as well by replacing the lower capacity machines with the new higher capacity machines. Some such machines includes the color sorters which is one of the critical machines involved in the rice processing industry. Some of the old lower capacity color sorters were replaced with new upgraded and high capacity machines resulting in reduction of rejection percentage, improvement in final output and increasing overall throughout.
The Company has realized and agrees that the continuous improvement can be achieved only if the employees involved in the process directly or indirectly are highly trained on modern techniques and are aware of global standards. One such step taken by the Company in that direction is to start Manufacturing Excellence and Improvement Program. The key highlights of this improvement drive were - 5S, Maintenance Improvement Techniques, Reliability Matrix, MTTR & MTBF etc., which are highly beneficial and globally accepted programs for process improvement.
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange spent was Rs. 2,688.80 Lakhs and the total foreign exchange earned was Rs. 86,409.73 Lakhs.
34. Corporate Social Responsibility (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 related to CSR activities is detailed in (Annexure II).
35. Human Resources
The Company treats its âhuman resourcesâ as one of its most important assets.
The Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. The Companyâs thrust is on the promotion of talent internally through job rotation and job enlargement. The Company maintains healthy, cordial and harmonious industrial relation at all level. The enthusiasm of employee has enabled the company to maintain its leader position in the industry.
36. Directorsâ Responsibility Statement
Pursuant to Section-134(3)(C) of the Companies Act, 2013, based on the representations received from the operating management & after due inquiry, the Directors confirm that:-
(a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;
(c) The Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;
(d) The Directors have prepared the annual accounts on a going concern basis; and
(e) The Directors, have 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.
37. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 124 and 125 of the Companies Act, 2013, the dividend which remains unpaid/unclaimed for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. Accordingly, the company has transferred unclaimed dividend of â214,854/- for the financial year 2009-10 to Investor Education and Protection Fund and such unclaimed dividend cannot be claimed by the Investors from the Company. However Investors can claim the unpaid dividend from appropriate authority in accordance with the Investor Education and Protection Fund Authority (Accounting, audit, transfer and Refund) Rules, 2016
Further the amount of Dividend unclaimed/unpaid for the financial year 2010-11 to 2016-17 lies in the respective unpaid dividend account and can be claimed from Companyâs Register and Transfer Agent i.e. Big Share Services Private Limited, before the due date for transfer of the same in IEPF account.
Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company, as on 19th September 2017, with the Ministry of Corporate Affairs.
38. Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the year 2017-18 to NSE and BSE where the Companyâs Shares are listed.
39. Compliance with Secretarial Standards
The Company has duly followed the applicable Secretarial standards, SS-1 & SS-2 relating to Meeting of the Board of Directors and General Meeting respectively.
40. Acknowledgements
Your Director places on record their gratitude to all stakeholders for their assistance, cooperation and encouragement. The Directors also wishes to place on record their sincere thanks to all investors, vendors, and employees for their outstanding performance.
For and on behalf of the Board of Directors
Sd/-
Vijay Kumar Arora
Chairman & Managing Director
DIN:00012203
Place: Gurugram
Date: 13th August 2018
Mar 31, 2017
To,
The Members,
The Directors have pleasure in presenting their 27th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2017.
1. Financial Performance of the Company (Standalone)
(Rs, In lakhs)
Particulars |
2016-17 |
2015-16 |
Gross Income |
2,10,032.86 |
1,84,669.15 |
Profit Before Interest and Depreciation |
17104.01 |
16,394.16 |
Finance Charges |
10,041.34 |
9,074.66 |
Gross Profit |
42,150.30 |
46,086.79 |
Provision for Depreciation |
2,292.73 |
2,635.99 |
Net Profit Before Tax |
4,769.94 |
4,683.51 |
Net Profit After Tax |
3,013.80 |
3,038.30 |
Balance of Profit brought forward |
22,707.85 |
20,152.85 |
Balance available for appropriation |
25,721.65 |
23,191.15 |
Proposed Dividend on Equity Shares |
- |
401.88 |
Tax on proposed Dividend |
- |
81.42 |
Transfer to General Reserve |
Nil |
Nil |
Surplus carried to Balance Sheet |
25,721.65 |
22707.85 |
2. Company''s working during the year
During the year, the Company has achieved a topline of Rs, 3,32,210.96 lakhs as compared to Rs, 2,97,962.61 lakhs in the last year with a growth of 11.5% on consolidated basis. The Company has earned a profit of Rs, 19,468.88 lakhs in the previous year with a growth of 19% in comparison to financial year 2015-16. The Company has achieved revenue of Rs, 96,774.09 lakhs and earned PAT of Rs, 3,800.46 lakhs in March quarter on group level. As per AC Nielsen data'' we have gained over 20% market share in the branded basmati market in India. This has been possible because of our constant focus towards strengthening our consumer focus. Besides India, we are constantly working on strengthening our brands in overseas markets. We continue to enjoy leadership position in the US where our share continues to be around 40% under our strong brand Royal. The Company has taken concrete steps over the last few quarters by acquiring two brands - Gold Seal Indus Valley and Rozana from HUL in Middle East. Besides, the Company also acquired iconic brand 817 Elephant for European market. These initiatives have helped us increase our branded sales by ~25% compared to FY2016. The institutional sales to our strong customers have also seen a growth of 15%. Overall growth in volume stood at ~20% YoY basis. The volume growth in Indian market was 27% and in international market was 14%, which again reflects the increased confidence of consumers in our Company. The increased volumes have led to a healthy growth in Sales, EBITDA and PAT both in Q4FY17 and financial year ended 31st March 2017.
3. Change in the nature of business, if any-
During the current year, there has been no major change in the business.
4. Dividend
Your Board of Directors has recommended a dividend of Rs, 0.15/- (fifteen Paisa) per equity share of Re. 1/- each, out of the profits of the Company for the Financial Year ended 31st March, 2017 subject to share holder''s approval in the ensuing Annual General Meeting.
5. Reserves
Out of the amount available for appropriation, the Company''s Directors propose to transfer Rs, NIL /- to General Reserve and retain Rs, 25,721.65/- lakhs to Profit and Loss Account.
6. Share Capital
During the Financial year 2016-17, the Company has not allotted Equity Shares and also has not issued any Equity Shares with differential rights or any sweat equity shares. However the Company has split the face value of Equity Shares from Rs, 10 to Rs, 01/- each. Resultantly, the Company has 26,66,31,870 equity shares of Rs, 1/- each as at 31st March, 2017.
7. Details of Directors and Key Managerial Personnel Appointed and Resigned during the year
The following Directors and Key Managerial Personnel has been appointed and resigned during the year:-
S. Name of the Person No. |
Designation |
Appointment/ Resignation |
Date of Appointment / Resignation |
1. Som Nath Chopra |
Chief Financial Officer |
Resignation |
25/05/2016 |
2. Suparas Bhandari |
Independent Director |
Appointment |
21/09/2016 |
3. Gokul Patnaik |
Independent Director |
Appointment |
21/09/2016 |
4. Adesh Kumar Gupta |
Independent Director |
Appointment |
21/09/2016 |
5. Ashwani Kumar Arora |
Chief Financial Officer |
Appointment |
14/11/2016 |
8. Particulars of Employees & Employee Remuneration
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, the information required is as follows.
Managerial Remuneration:
1. |
Ratio of remuneration of each director to median remuneration of employees |
|
Vijay Kumar Arora |
1.51 |
|
Ashwani Kumar Arora |
NA |
|
Surinder Kumar Arora |
1.43 |
|
2. |
Percentage increase in remuneration of each director and KMPs |
% |
Vijay Kumar Arora |
17% |
|
Surinder Kumar Arora |
50% |
|
Ashwani Kumar Arora |
N.A. |
|
Som Nath Chopra |
N.A. |
|
Monika Chawla Jaggia |
31% |
|
3. |
Percentage increase in the median remuneration of employees |
5% |
4. |
Number of permanent employees |
1027 |
5. |
Average percentile increase in salary of employees, other than managerial personnel, comparison with percentile increase in managerial remuneration and justification |
|
Managerial Increase |
33% |
|
Non Managerial Increase |
5% |
|
6. |
Affirmation that the remuneration is as per the remuneration policy of the Company |
Yes |
As per rule 5(3) of Companies (Appointment and Remuneration) Rules, 2014, the employees who draw salary exceeding the limits of Rs,1.02 Crores is as follows:
Name |
Designation |
Remuneration (in Crores) |
Nature of employment |
Qualification |
Experience |
Age |
Last employment |
% of shares held |
VIJAY KUMAR ARORA |
MANAGING DIRECTOR |
1.41 |
Permanent |
B.Sc. |
41 |
59 |
NA |
7.98 |
SURINDER KUMAR ARORA |
MANAGING DIRECTOR |
1.16 |
Permanent |
Under Graduate |
35 |
55 |
NA |
7.98 |
Mr. Vijay Kumar Arora and Mr. Surinder Kumar Arora, both are Promoter Managing Directors of the Company. They are related to Mr. Ashwani Kumar Arora and holding more than 2% of equity shares of the Company.
9. Board Meetings
During the Year four Board Meetings were held, the dates on which these meeting were held are 27th May, 2016, 11th August 2016,14th November, 2016 and 09th February, 2017. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
10. Board Evaluation
In pursuance of Section 178 of the Companies Act, 2013 read with Regulation 4(2), 17(10) and 19(4) read with Schedule II Part D of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 and Secretarial Standards-I, the Nomination and Remuneration Committee has framed the evaluation process and the performance evaluation of Independent Directors, Executive Directors and Board as a whole as well as working of its Audit, Nomination & Remuneration and other Committees has been carried out during the financial year 2016-17.
11. Statement of Declaration by an Independent Director(s) and re- appointment, if any
All the Independent directors have given their Independency declaration as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
12. Remuneration Policy
The Company has framed Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and Regulation 19 of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 and remuneration policy of the Company in compliance of Section 178 (4) of the Companies Act, 2013. The Remuneration policy can be referred at weblink http://www. ltgroup.in/pdf/LT-Foods-Remuneration-Policy.pdf
13. Extract of Annual Return:
As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE I.
14. Corporate Social Responsibility (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 related to CSR activities is detailed in (Annexure II).
15. Auditors
The Auditors, M/s Walker Chandiok & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment and have confirmed that they are not disqualified under any provisions of Section 141(3) of the Companies Act, 2013 and have shown their willingness to accept the office of Statutory Auditors.
The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits u/s 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.
16. Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered into by the Company with related parties referred to in subsection (1) of Section 188 of the Companies Act, 2013 are disclosed in Form No. AOC-2 (Annexure III). With reference to Section 134(3) (h) of Companies Act, 2013 all contracts and arrangement with related parties under Sec 188(1) entered by the Company during the financial year were in ordinary course of business and on arms length basis.
17. Auditors'' Report
The Auditors'' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.
18. Details of Subsidiary/Joint Ventures/Associate Companies
Pursuant to sub-section (3) of Section 129 of the Act, the statement containing the salient feature of the financial statement of a Company''s subsidiary or subsidiaries, associate company or companies and joint venture or ventures is given as Annexure-IV [Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement.
The Company has entered into Joint Venture with Future Group and incorporated Genoa Rice Mills Private Limited on 27th May, 2015 to source and manufacture regional rice such as Sona Masoori which will help the Company to expand its product portfolio while leveraging its distribution network.
During the year, the Company generated revenue of Rs,3,322 Crores at Group Level. Its subsidiary plays an important role in contributing to the overall revenue. Kusha Inc the fellow Company contributed approx 28% to the overall revenue. Daawat Foods Limited 70% owned subsidiary of LT Foods contributed 22% to the total revenue .The organic arm NBFL, wholly owned subsidiary contributed approx 7% to the group revenue.
Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary.
Name of the Companies, which become or ceased as Subsidiaries/Joint Ventures/Associates Companies during the year.
During the year, the Company has incorporated a foreign subsidiary in United Kingdom (UK) namely LT Foods International Limited which was incorporated on 24.06.2016 for strengthening its presence in Europe. Further, the Company has set up a facility in Europe to service customers in International markets more effectively. The UK Company incorporated a subsidiary in Netherlands named as LT Foods Europe B.V. and set up a rice plant in Rotterdam.
Further in order to expand our product portfolio and backend knowhow, the Company has entered into Joint Venture with KAMEDA SEIKA Co. Limited, a leading manufacturing Company since 1946 in Japan and USA in the field of rice Based snacks. The said joint venture will manufacture rice based snacks.
The Company has also entered into Joint Venture with Future group to source, manufacture, market, sell and distribute regional rice such as sona masoori. This association will help us help expand our product portfolio leveraging our distribution network.
19. Audit Committee
In pursuance of Section 177 of the Companies Act, 2013 read with Regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted the Audit Committee and the details in pursuance of Section 177 (8) of the Companies Act, 2013 in respect of composition of Audit Committee of the Company is given in Corporate Governance Report of the Company.
20. Secretarial Audit Report
In terms of Section 204 of the Act and Rules made there under, M/s. D Dixit & Associates, Practicing Company Secretary have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure V to this report. The point-wise comments are enumerated as follows.
1. Delay in filing forms
Due to oversight, the Company failed to file some of the forms in prescribed time frame of Companies Act, 2013 and applicable fees has already been paid to Ministry of Corporate Affairs.
2. CSR Spent
The Company will spent the balance amount in the coming years.
3. Gratuity Payment to Ex- employees
The Company will pay the dues on time as per the Company''s policy.
4. Non filing of half yearly return as per Industrial disputes rule, 1957
The Company has filed the return after the observation.
5. Non filing of return under Payment of Bonus Act, 1965 The Company will file the return on priority basis.
21. Internal Audit & Controls
In terms of Compliance of Section 138 of the Companies Act, 2013 read with the Companies (Accounts) rules, 2014, the Company continues to engage Pro Advisory India LLP as its Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
22. Issue of employee stock options
The details of ESOP as per rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014
Particulars |
Option 1 |
Option 2 |
Approval |
648,329 |
201,209 |
Options granted |
648,329 |
201,209 |
Options vested |
20,577 |
34,656 |
Options exercised |
317,794 |
39,784 |
Total number of shares arising out of exercise of options |
317,794 |
39,784 |
Options forfeited/lapsed/cancelled |
128,677 |
70,533 |
Variations of terms of options |
NIL |
NIL |
Money realised by exercise of options |
12,076,172 |
1,511,792 |
Total number of options in force |
20,577 |
84,598 |
Notes: -
1. Details of options granted during the fiscal 2012 to:
Particulars |
||
(a) |
Directors and key managerial personnel |
|
1. |
Som Nath Chopra |
46,318 |
2. |
Monika Chawla Jaggia |
18,177 |
(b) |
Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year (includes employees and group Company employees) |
The following employees have received a grant in any one year of options amounting to 5% or more of the options granted during the year 2011-12 - Mr. S.K. Salhotra - Mr. Som Nath Chopra - Mr. Dipol Dhole - Mr. Vijay Malik - Mr. Vivek Chandra - Mr. Vikram Patil - Mr. Kamal Poplai The following employees have received a grant in any one year of options amounting to 5% or more of the options granted during the year 2012-13 - Mr. Mukesh Aggarwal - Mr. Sandeep Lamba - Mr. Gerald Taylor - Mr. Mrinal Mathur |
(c) |
Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant |
None |
23. Risk Management Policy
LT has in place comprehensive risk assessment and minimization procedures, which are reviewed by the top management. During the year, as per the requirements of Listing Agreement with the Stock Exchanges, the Company has renamed Audit Committee as Audit Committee / Risk Management Committee who plans risk management, reviews, monitors and identify the risk on regular basis.
24. 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 There has been no material change in the business, which may affect financial position of the Company. 25. Compliance to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirement), Regulations 2015 (Details of Suspense A/c) 01.04.2016 to 31.03.2017
S. No. |
Particulars |
No. of Shareholders |
No. of Shares1 |
i. |
Aggregate number of shareholders and the outstanding shares lying in Unclaimed Suspense Account at the beginning of the year |
7 |
64940 |
ii. |
Number of shareholders who approached for transfer of shares from Unclaimed Suspense Account during the year |
1 |
6040 |
iii. |
Number of shareholders to whom shares were transferred from Unclaimed Suspense Account during the year |
1 |
6040 |
iv. |
Aggregate number of shareholders and the outstanding shares lying in Unclaimed Suspense Account at the end of the year |
6 |
58900 |
26. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern 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 & Company''s operations in future.
27. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.
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 internal financial control system which ensures the all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures (SOPs) and audit and compliance by Internal Audit team, Pro Legal Advisory, India, LLP.
28. Deposits
The Company has neither accepted nor renewed any deposits falling under Chapter V of Companies Act, 2013.
29. Particulars of loans, guarantees or investments under section 186. Details of Investments:-
S. Date of No. Investment |
Details of Investee |
Amount (In lakhs) |
Purpose for which the proceeds from investment is proposed to be utilized by the recipient |
Date of Board resolution |
Date of special resolution |
Expected rate of return |
1 06.09.2016 |
LT Foods International Limited, UK |
54.15 |
Business Purpose |
31.05.2016* |
N.A. |
N.A. |
2 01.02.2017 |
Genoa Rice Mills Private Limited |
125.00 |
Business Purpose |
24.01.2017* |
N.A. |
N.A. |
TOTAL |
179.15 |
* Management Committee Meeting of Board of Directors Details of Loans:-
S. No. |
Date of making loan |
Details of Borrower |
Amount (In lakhs) |
Purpose for which the loan is to be utilized by the recipient |
Time period for which it is given |
Date of BR |
Date of SR (if reqd) |
Rate of Security Interest |
1 |
01.02.2017 |
Genoa Rice Mills Private Limited |
125.00 |
Working Capital Requirement |
3 Years |
24.01.2017* |
N.A |
12.50% -- |
*Management Committee meeting of Board of Directors Details of Guarantee / Security Provided:
Sl. No. |
Details of recipient |
Amount (In lakhs) |
Purpose for which the security/guarantee is proposed to be utilised by the recipient |
1 |
Daawat Foods Limited |
35883.68 |
Business purpose |
2 |
Nature Bio Foods Limited |
12035.00 |
-do- |
3 |
Raghunath Agro Industries Private Limited |
458.40 |
-do- |
4 |
LT Foods Europe B.V. |
5155.26 |
-do- |
30. Corporate Governance Certificate
The report on Corporate Governance as Stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report.
A Certificate from the Practicing Company Secretary CS Debasis Dixit, regarding compliance of conditions of corporate governance as stipulated in Regulation 27 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015 is annexed with the report.
31. Management Discussion and Analysis
The Management Discussion and Analysis Report prepared in accordance of Regulation 34(2)(e) of Listing Regulations forms part of this Annual Report for the year ended 31st March, 2017.
32. Obligation of Company under the sexual harassment of women at workplace (Prevention, prohibition and redressal) Act, 2013.
In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year, the Company has not received any complaint of harassment.
33. Conservation of energy, technology absorption and foreign exchange earnings and outgo
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:
Conservation of energy
The company continued to give major emphasis for Conservation of Energy, and the measures taken previous year were continued. The efficiency of Energy utilization is being monitored at every Quarter, in order to achieve effective Conservation of Energy. The significant energy conservation during the year were:
Installation of Solar Plant
Over the Years, Renewal energy sector in India has emerged as a significant player in the Grid connected power Generation Capacity. It has been realized that renewable energy has to play a much deeper role in achieving energy security in the years ahead and be an integral part of the energy planning Process. Working in this direction and contributing towards Renewal Energy generation, LT Foods has successfully installed Rooftop Solar Plants of 500 KW & 200 KW at its Bahalgarh & Kamaspur unit respectively.
Energy Savings through High Efficiency Motors:
High-efficiency motor is a term applied to an electric motors whose energy losses have been reduced to a minimum.
Energy efficiency improvements upto 5% are possible if Electrical motors are being replaced with High Efficiency Motors Such step has been taken and during Internal Audits few aged motors were identified which were resulting in overconsumption of Energy. Such motors are being replaced by High Efficiency 2 motors, which helped in reducing the Power consumption.
Lighting:
To conserve energy from Lighting, replacement of Convectional Lamps, Street Lighting Halogen, HPSV WITH LED Light Fixtures were undertaken at various stations during the year. As LEDs are extremely energy efficient and consume up to 60% less power than incandescent bulbs, this helped in reducing the Power consumption and decreasing the maintenance cost due to its long lifespan.
Plant Automation
PLC is an electronic device used in many industries to monitor and control Production Processes. LT Foods at its Bahalgarh unit has initated a step forward to completely automate its Milling Plant through PLC and SCADA. This will help in increasing the Production Efficiency as well as reduction in Power Cost due to optimal use of Resources.
Power Factor
The Company has continued to achieved Power Factor of 0.99 to ensure optimum utilization of Power.
Power & Fuel Consumption (Bahalgarh Plant)
(Rs, in lakhs)
PARTICULARS |
2016-17 |
2015-16 |
ELECTRICITY |
||
Through Purchases |
||
Units |
15,357,320 |
1,478,419 |
Total Amount (?) |
125,704,991 |
131,107,004 |
Rate/Unit(?) |
8.19 |
8.99 |
Through Diesel Generator |
||
Units generated |
515,993 |
388,901 |
TOTAL AMOUNT (?) |
85,824,285 |
5,118,150 |
Cost/Unit (?) |
16.63 |
13.61 |
Power & Fuel Consumption (Varpal Plant)
(Rs, in lakhs)
PARTICULARS |
2016-17 |
2015-16 |
ELECTRICITY |
||
Through Purchases |
||
Units |
4,272,220 |
4,451,984 |
Total Amount (?) |
30,718,756 |
33,478,920 |
Rate/Unit(?) |
7.19 |
7.52 |
Through Diesel Generator |
||
Units generated |
75,600 |
96,900 |
TOTAL AMOUNT (?) |
1,533,930 |
1,707,690 |
Cost/Unit (?) |
20.29 |
17.62 |
(b) Technology, Absorption, Adaption and Innovation
Technology is changing day by day. During the years the Company has taken significant steps in adoption of new technologies thus improving overall efficiency of Plants. Similar steps were taken in the current year as well by replacing the lower capacity machines with the New Higher capacity Machines. Some such machines includes the Color Sorters which is one of the critical machine involved in the Rice processing industry. Some of the old lower capacity color sorters were replaced with new upgraded and high capacity machines resulting in reduction of rejection percentage, improvement in final output and increasing overall throughput.
The Company has realised and agrees that the continuous improvement can be achieved only if the employees involved in the process directly or indirectly are highly trained on modern techniques and are aware of Global Standards. One such step taken by the Company in that direction is to start Manufacturing Excellence and Improvement Program. The key highlights of this improvement drive were - 5S, Maintenance Improvement Techniques, Reliability Matrix, MTTR & MTBF etc., which are highly beneficial and globally accepted programs for process improvement.
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange used was Rs, 1,689.98 lakhs and the total foreign exchange earned was Rs, 78,441.53 lakhs.
(Rs, in lakhs) |
||
Particulars |
March 31, 2017 |
March 31, 2016 |
Value of imports on CIF basis |
||
Capital goods |
88.38 |
516.46 |
Stores and spares |
63.50 |
25.74 |
Other Food Items |
513.17 |
- |
Other |
2.53 |
- |
Total |
667.58 |
542.20 |
Expenditure in foreign currency |
||
Legal fees |
54.48 |
18.14 |
Interest and other charges to bank |
44.81 |
136.76 |
Steamer freight |
831.71 |
1,312.44 |
Sales promotion |
292.86 |
41.57 |
Commission on export sales |
136.20 |
3,255.76 |
Others |
329.92 |
404.54 |
Total |
1689.98 |
5,169.21 |
Earnings in foreign currency |
||
FOB value of exports |
||
Rice |
78,441.53 |
76,977.49 |
Total |
78,441.53 |
76,977.49 |
34. Human Resources
Your Company treats its "human resources" as one of its most important assets.
Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. The Company maintains healthy, cordial and harmonious industrial relation at all levels. The enthusiasm amongst employees has enabled the Company to remain at a leadership position in the industry.
35. Directors'' Responsibility Statement
Pursuant to Section-134(3)(C) of the Companies Act, 2013, the Director''s based on the representations received from the operating management and after due inquiry confirm that:-
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(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 at the end of the financial year and of the profit and loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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; and
(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 were adequate and operating effectively.
36. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 205A and 205C of the Companies Act, 1956* read with 124 and 125 of the Companies Act, 2013, the dividend which remains unpaid/unclaimed for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. Accordingly, the Company has transferred unclaimed dividend for the financial year 200809 to Investor Education and Protection Fund and such unclaimed dividend cannot be claimed by the Investors from the Company. However Investors can claim the unpaid dividend from appropriate authority in accordance of the Investor Education and Protection Fund Authority (Accounting, audit, transfer and Refund) Rules, 2016
Further the amount of Dividend unclaimed/unpaid for the financial year 2009-10 to 2015-16 lies in the respective unpaid dividend account and can be claimed from Company''s Register and Share Transfer Agent i.e. Big Share Services Private Limited, before the due date for transfer of the same in IEPF account.
Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company, as on 21st September 2016, with the Ministry of Corporate Affairs.
During the year, the Company has transferred unpaid dividend of '' 5,176,15 to IEPF for dividend declared in 2008-09
37. Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the year 2016-17 to NSE and BSE where the Company''s Shares are listed.
38. Acknowledgements
Your Director place on record their gratitude to all stakeholder for their assistance, cooperation and encouragement. Your Director also wish to place on record their sincere thanks to all investor, vendor, employees for their outstanding performance.
For and on behalf of the Board of Directors
Sd/-
Vijay Kumar Arora
DIN:00012203
Chairman & Managing Director
Place: Gurugram
Date: 10/08/2017
Mar 31, 2016
To,
The Members,
The Directors have pleasure in presenting their 26th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2016.
1. Financial Performance of the Company (Standalone)
(Rs. In Lakhs)
Particulars |
2015-2016 |
2014-2015 |
Gross Income |
184,680.37 |
185,598.27 |
Profit Before Interest and Depreciation |
16,394.16 |
16,099.94 |
Finance Charges |
9,074.66 |
8,980.13 |
Gross Profit |
46,098.01 |
38,263.11 |
Provision for Depreciation |
2,635.99 |
2,851.55 |
Net Profit Before Tax |
4,683.51 |
4,268.26 |
Provision for Tax |
1,645.21 |
1,202.74 |
Net Profit After Tax |
3,038.30 |
3,065.52 |
Balance of Profit brought forward |
20,152.85 |
17,800.40 |
Balance available for appropriation |
23,191.14 |
20,865.92 |
Proposed Dividend on Equity Shares |
401.87 |
529.07 |
Tax on proposed Dividend |
81.42 |
105.78 |
Transfer to General Reserve |
Nil |
Nil |
Surplus carried to Balance Sheet |
22,707.85 |
20,152.85 |
2. Company''s working during the year
During the year, the LT group has witnessed a steady performance across all its business verticals. The consolidated gross sales during the year stood at Rs.2,973 crores as against Rs. 2,735 crores in FY15. The growth has been due to strong sales growth in the domestic sales volume.
The Company''s branded business is growing steadily and now contributes close to 53% of the total sales.
The branded rice business in India, which is largely contributed by the Company''s flagship brand Dawaat, has grown at a CAGR of approx. 20% over FY12 to FY16. Growing at a CAGR of 25% plus over FY12 to FY16, the Company''s US branded rice business has also witnessed a robust growth. The Company''s Organic business has been one of the fastest growing segments with a CAGR in excess of 55% over FY12 to FY16 and contributed Rs.223 crores in FY16. The institutional rice business has also being growing at a stable rate. During the year, the Company continued to invest in all its flagship brands to increase their market presence.
During the year, the Company acquired the Branded Rice business of Hindustan Unilever. The Brands acquired were "Gold Seal Indus Valley" and "Rozana" to strengthen our position in the Middle Eastern market. The acquisition will help us strengthen our existing presence in Saudi Arabia, UAE and Kuwait and also give us entry in the markets of Qatar, Oman and Bahrain. Apart from these markets, the brand also enjoys latent equity across India, North America, some of the European Union and Asian countries.
The Company has also incorporated a Company by the name of LT Foods International Limited in United Kingdom which shall be the wholly owned subsidiary of LT Foods Limited. The Company has acquired iconic brand 817 Elephant brand of rice through its UK subsidiary to further strengthen its presence in Canada, US and Dubai.
The gross revenue of the Company on standalone basis stood at Rs.1,821 crores against Rs.1,822 crores in FY15. The Profit Before Interest & Depreciation during the year stood at Rs.16,394 Lakhs, up by 47% Y-o-Y whereas the margin stood at 8.7% as against 8.3% in FY15.
The Net Profit before tax stood at Rs.4,683.51 Lakhs as against Rs.4,268.26 Lakhs in FY15.
3. Change in the nature of business, if any- During the current year, there has been no major change in the business.
4. Dividend
Your Board of Directors has recommended a dividend of Rs. 1.50 per equity share of face value of Rs. 10/- each for the year ended 31st March 2016 subject to share holder''s approval in the ensuing Annual General Meeting. The total payout including the dividend distribution tax amount to Rs. 481.37/- lakhs.
5. Reserves
Out of the amount available for appropriation, Company''s Directors propose to transfer Rs. NIL /- lakhs to General Reserve and retain Rs. 22,707.84/lakhs to Profit and Loss Account.
6. Share Capital
During the financial year, the Company has allotted 209,605 equity shares to the various employees of the Company who are eligible for allotment under the Employee Stock Option Plan-2010. Accordingly, issued, subscribed and paid up equity capital of the Company has increased from Rs.2,64,535,820 to Rs. 2,66,631,870/-. During the year, the Company has not issued any equity shares with differential right or any sweat equity shares.
7. Details of Directors and Key Managerial Personnel Appointed and Resigned during the year
The following Directors and Key Managerial Personnel has been appointed and resigned during the year:-
S. Name of the Person No. |
Designation |
Appointment/Resignation |
Date of Appointment / Resignation |
1 Gokul Patnaik |
Independent Director |
Appointment |
29/03/2016 |
2 Adesh Kumar Gupta |
Independent Director |
Appointment |
12/02/2016 |
3 Suparas Bhandari |
Independent Director |
Appointment |
12/02/2016 |
4 Renu Challu |
Independent Director |
Resignation |
01/10/2015 |
8. Particulars of Employees & Employee Remuneration
Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, The information required is as follows.
Managerial Remuneration:
1. Ratio of remuneration of each director to median remuneration of employees |
|
Vijay Kumar Arora |
1022415:21667 |
Ashwani Kumar Arora |
1950000:65001 |
Surinder Kumar Arora |
1000000:21667 |
2. Percentage increase in remuneration of each director and KMPs |
|
Vijay Kumar Arora |
NIL |
Surinder Kumar Arora |
NIL |
Ashwani Kumar Arora |
NIL |
Som Nath Chopra |
NIL |
Monika Chawla Jaggia |
NIL |
3. Percentage increase in the median remuneration of employees |
8% |
4. Number of permanent employees |
857 |
5. Average percentile increase in salary of employees, other than managerial personnel, comparison with percentile |
8% |
increase in managerial remuneration and justification |
|
Managerial Increase |
8% |
Non Managerial Increase |
8% |
6. Affirmation that the remuneration is as per the remuneration policy of the company |
Yes |
As per rule 5(3) of Companies (Appointment and Remuneration) Rules, 2014, the employees who draw salary exceeding the limits of Rs. 1.02 Crore is as follows:
Name |
Designation |
Remuneration (in lakhs) |
Nature of employment |
Qualification |
Experience |
Age |
Last employment |
% of shares held |
VIJAY KUMAR ARORA |
MANAGING DIRECTOR |
119.87 |
Permanent |
B.Sc. |
40 years of experience |
58 |
NA |
10.21 |
Mr. Vijay Kumar Arora is Promoter Director of the Company. He is related to Mr. Ashwani Kumar Arora and Mr. Surinder Kumar Arora. He is holding more than 2% of equity shares of the Company.
9. Board Meetings
During the financial year, four Board Meetings were held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.
10. Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Regulation 4(2) of the LODR, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration and Compliance Committees.
11. Statement of Declaration by an Independent Director(s) and re- appointment, if any
All the Independent directors have given their Independency declaration as provided in sub-section (6) of Section 149 of the Companies Act, 2013.
During the year, Mrs. Renu Challu has resigned from the post of Independent Director w.e.f 01st October, 2015 due to her other pre-occupations. Further Mr. Adesh Kumar Gupta and Mr. Suparas Bhandari joined the LT Foods Board on 12th February, 2016 as Additional Director and Mr. Gokul Patnaik has also joined the Company as additional Director with effect from 29th March 2016.
12. Remuneration Policy
The Company has framed Remuneration Policy in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and SEBI(LODR) Regulations, 2015
The Key highlights of the Policy are as follows:
a) To guide the Board in relation to the appointment and removal of Directors, Key Managerial Personnel and Senior Management.
b) To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation of the Board.
c) To recommend to the Board on Remuneration payable to the Directors, Key Managerial Personnel and Senior Management.
The objective of the Remuneration Policy is to attract and retain high caliber talent and assume that the policy is in consonance with the existing industry practice.
13. Details of Subsidiary/Joint Ventures/Associate Companies
Pursuant to sub-section (3) of Section 129 of the Act, the statement containing the salient feature of the financial statement of a Company''s subsidiary or subsidiaries, associate Company or companies and joint venture or ventures is given as Annexure-IV [Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement]
During the year, the Company generated revenue of 2980 crores at group level. Its subsidiaries played a major role in contributing to the overall revenue. Kusha Inc. the fellow subsidiary of the Company contributed approx. 29% to the overall revenue. Daawat Foods Limited a 70% owned subsidiary of LT Foods contributed nearly 26% to the total revenue. The organic arm NBFL, a wholly owned subsidiary contributed approx. 8% to the group revenue.
Further, the Annual Accounts and related documents of the subsidiary Company shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. Further, pursuant to Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary.
Name of the Companies which become or ceased as Subsidiaries/Joint Ventures/Associates Companies during the year.
During the year, Raghunath Agro Industries (RAI), the partnership firm in which the Company was partner has converted itself into Private Limited Company incorporated on 20th July 2015 in the name and style of M/s Raghunath Agro Industries Private Limited (RAIPL) and such Company has allotted equity shares in proportion to its shareholding in partnership firm and has become Company under same management. of the Company during the financial year 2015-16.
LT Infotech Private Limited, one of the subsidiary Company was sold out therefore its become ceased w.e.f. 30th June 2015.
14. Auditors
The Auditors, M/s Walker Chandiok & Co. LLP, Chartered Accountants, Statutory Auditors of the Company, hold office till the conclusion of the ensuing Annual General Meeting and are eligible for appointment and have confirmed that they are not disqualified under any provisions of Section 141(3) of the Companies Act, 2013 and have shown their willingness to accept the office of Statutory Auditors.
The Company has received a letter from them to the effect that their ratification of appointment, if made, would be within the prescribed limits u/s 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for re-appointment.
15. Auditors'' Report
The Auditors'' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.
16. Secretarial Audit Report
In terms of Section 204 of the Act and Rules made there under, M/s. D Dixit & Associates, Practicing Company Secretary have been appointed Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure V to this report. The point-wise comments are enumerated as follows.
i. Delay in Filling Forms
Due to the oversight, the Company failed to file some of the forms in prescribed time frame of Companies Act, 2013 and applicable additional fees has already been paid to Ministry of Corporate Affairs.
ii. CSR Spent
The Company will spent the balanced amount in financial year 2016-17.
iii. Stamp Duty on Issue of Shares
The Company will apply to the Revenue Department for payment of stamp duty.
iv. Details of Male employee in Register as per Equal Remuneration Rules, 1975.
The Company has already noted the discrepancies and will comply the requirements of rule 6 of Equal Remuneration Rules, 1976.
v. Gratuity Payment to Ex-employee
The Company will pay the dues soon as per the Company''s policy.
17. Internal Audit & Controls
The Company continues to engage Pro Advisory India LLP as its Internal Auditors. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, review of statutory compliances and assessing the internal control strengths in all areas. Internal Auditors findings are discussed with the process owners and suitable corrective actions taken as per the directions of Audit Committee on an ongoing basis to improve efficiency in operations.
18. Issue of employee stock options
The details of ESOP as per rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014
Particulars |
Option 1 |
Option 2 |
Approval |
648,329 |
201,209 |
Options granted |
648,329 |
201,209 |
Options vested |
20,577 |
34,656 |
Options exercised |
317,794 |
39,784 |
Total number of shares arising out of exercise of options |
317,794 |
39,784 |
Options forfeited/lapsed/cancelled |
128,677 |
70,533 |
Variations of terms of options |
NIL |
NIL |
Money realized by exercise of options |
12,076,172 |
1,511,792 |
Total number of options in force |
20,577 |
84,598 |
Notes: -
1. Details of options granted during the fiscal 2012 to:
Particulars |
|
(a) Directors and key managerial personnel |
|
1. Som Nath Chopra |
46,318 |
2. Monika Chawla Jaggia |
18,177 |
(b) Any other employee who received a grant in |
The following employees have received a grant in any one year of options amounting |
any one year of options amounting to 5% or more |
to 5% or more of the options granted during the year 2011-12 |
of the options granted during the year (includes |
-Mr. S.K. Salhotra |
employees and group Company employees) |
- Mr. Som Nath Chopra - Mr. Dipol Dhole - Mr. Vijay Malik - Mr. Vivek Chandra - Mr. Vikram Patil - Mr. Kamal Poplai The following employees have received a grant in any one year of options amounting to 5% or more of the options granted during the year 2012-13 - Mr. Mukesh Aggarwal - Mr. Sandeep Lamba - Mr. Gerald Taylor - Mr. Mrinal Mathur |
(c) Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant |
None |
19. Vigil Mechanism :
In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.ltoverseas. com/india/pdf/whistle-blower-policy.pdf.
20. Risk Management Policy
LT has in place comprehensive risk assessment and minimization procedures, which are reviewed by the top management. Risk Management is a very important part of the Company''s business. The Company has in place an integrated risk management system. It proactively identifies monitors and takes precautionary and mitigation measures in respect of various risks that threaten its operations and resources.
21. Extract of Annual Return:
As required pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as ANNEXURE I.
22. 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
There has been no material change in the business which may affect financial position of the Company.
23. Compliance to Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015 (Details of Suspense A/c) 01.04.2015 to 31.03.2016
S. No. |
Particulars |
No. of Shareholders |
No. of Shares |
i. |
Aggregate number of shareholders and the outstanding shares lying in Unclaimed Suspense Account at the beginning of the year |
7 |
6494 |
ii. |
Number of shareholders who approached for transfer of shares from Unclaimed Suspense Account during the year |
0 |
0 |
iii. |
Number of shareholders to whom shares were transferred from Unclaimed Suspense Account during the year |
0 |
0 |
iv. |
Aggregate number of shareholders and the outstanding shares lying in Unclaimed Suspense Account at the end of the year |
7 |
6494 |
The voting rights on the above stated shares shall remain frozen till the rightful owner of such shares claims the shares
24. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern 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 & Company''s operations in future.
25. Details in respect of adequacy of internal financial controls with reference to the Financial Statements.
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 internal financial control system which ensures the all assets are safeguarded and protected and that the transactions are authorized, recorded and reported correctly. The Company''s internal financial control system also comprises due compliances with Company''s policies and Standard Operating Procedures (SOPs) and audit and compliance by Internal Audit team, Pro Legal Advisory, India, LLP.
26. Deposits
The Company has neither accepted nor renewed any deposits falling under Chapter V of Companies Act, 2013.
27. Particulars of loans, guarantees or investments under section 186
a) Details of Loans:
S. Date of No. making loan |
Details of Amount Borrower |
Purpose for which the loan is to be utilized by the recipient |
Time period for which it is given |
Date of BR Date of SR (if reqd) |
Rate of Security Interest |
NIL |
b) Details of Investments:-
L T FOODS LTD. - Details of Investments during FY 2015-16
S. No |
Date of Investment |
Details of Investee |
Amount - Rs. |
Purpose for which the proceeds from investment is proposed to be utilized by the recipient |
Date of Board resolution |
Date of special resolution |
Expected rate of return |
(if required) |
|||||||
1 |
24/08/2015 |
Raghuvesh Infrastructure Private Limited |
150,000 |
Business Purpose |
12/02/2016 |
N.A. |
- |
2 |
20/07/2015 |
Raghunath Agro Industries Private Limited |
18,565,981 |
Business Purpose |
12/08/2015 |
N.A. |
- |
TOTAL |
18,715,981 |
c) Details of Guarantee / Security Provided:
Sl. No. |
Details of recipient |
Amount (In Lakhs) |
Purpose for which the security/guarantee is proposed to be utilized by the recipient |
1 |
Daawat Foods Limited |
37257.65 |
Business purpose |
2 |
Nature Bio Foods Limited |
10246.85 |
-do- |
28. Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 are disclosed in Form No. AOC-2 (refer Annexure III). With reference to Section 134(3) (h) of Companies Act, 2013, all contracts and arrangement with related parties under Sec 188(1) entered by the Company were in ordinary course of business and on arms length basis.
29. Corporate Governance Certificate
The Compliance Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in Regulation 27 of LODR 2015 is annexed with the report.
30. Management Discussion and Analysis
The Management Discussion and Analysis forms part of this Annual Report for the year ended 31st March, 2016.
31. Obligation of Company under the sexual harassment of women at workplace (Prevention, prohibition and redressal) Act, 2013
In order to prevent sexual harassment of women at work place a new act The Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act, every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee.
The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year, the Company has not received any complaint of harassment.
32. Conservation of energy, technology absorption and foreign exchange earnings and outgo
The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:
a) Environment and efficiency - The Company has never shifted its focus from energy conservation and the same remained its key priority. Better controls are planned for reduction in energy consumption. The key areas where the Company have worked and achieved positive results are listed below:
Energy Savings through High Efficiency Motors:
High-efficiency motor is a term applied to an electric motors whose energy losses have been reduced to a minimum. If electrical motors are replaced, the energy efficiency can be improved upto 5%, such motors have been replaced. During the Internal Audit, few aged motors were identified which were resulting in over-consumption of Energy. Such motors are being replaced by High Efficiency motors which helped in reducing the Power consumption.
Lightning:
To reduce energy consumption from Lightning, replacement of Conventional Lamps, Street Lightning Halogen, HPSV WITH LED Light Fixtures were undertaken at various stations during the Year. As LEDs are extremely energy efficient and consume up to 60% less power than incandescent bulbs, this helped in reducing the Power Consumption and decreasing the maintenance cost due to its long lifespan.
Compressed Air Line
The Company had achieved good results previously by replacing old compressed Air Line with the new Modular Pipeline. The idea was further extended to the remaining areas to optimize the use of Compressed Air.
Energy Saving through VFD
Installation of Variable Frequency Drives for various applications like Whiteners, Graders, Blower''s as a flow control strategy for energy conservation. Such installation has resulted in Power Saving by controlling the RPM of Motors.
Power Factor
The Company has continued achieved the Power Factor of .99 to ensure optimum utilization of Power.
Power & Fuel Consumption (Bahalgarh Plant)
PARTICULARS |
2015-16 |
2014-15 |
ELECTRICITY |
||
Through Purchases |
||
Units |
1,478,419 |
19,067,355 |
Total Amount (Rs.) |
131,107,004 |
150,111,338 |
Rate/Unit(Rs.) |
8.99 |
7.87 |
Through Diesel Generator |
||
Units generated |
388,901 |
574,418 |
TOTAL AMOUNT (Rs.) |
5,118,150 |
8,239,891 |
Cost/Unit (Rs.) |
13.61 |
14.34 |
Power & Fuel Consumption (Varpal Plant)
PARTICULARS |
2015-16 |
2014-15 |
ELECTRICITY |
||
Through Purchases |
||
Units |
4,451,984 |
3,547,368 |
Total Amount (Rs.) |
33,478,920 |
25,412,148 |
Rate/Unit(Rs.) |
7.52 |
7.16 |
Through Diesel Generator |
||
Units generated |
96900 |
186,700 |
TOTAL AMOUNT(Rs.) |
1,707,690 |
3,524,240 |
Cost/Unit(Rs.) |
17.62 |
18.88 |
b) Technology, Absorption, Adaption and Innovation
Technology is changing day by day. During the years the Company has taken significant steps in adoption of new technologies thus improving overall efficiency of Plants. Similar steps were taken in the current year as well by replacing the lower capacity machines with the New Higher capacity Machines. Some such machines includes the Color Sorters which is one of the critical machine involved in the Rice processing industry. Some of the old lower capacity color sorters were replaced with new upgraded and high capacity machines resulting in reduction of rejection percentage, improvement in final output and increasing overall throughput.
The Company has realized and agree that the continuous improvement can be achieved only if the employees involved in the process directly or indirectly are highly trained on modern techniques and are aware of Global Standards. One such step taken by the Company in that direction is to start Manufacturing Excellence and Improvement Program. The key highlights of this improvement drive were - 5S, Maintenance Improvement Techniques, Reliability Matrix, MTTR & MTBF etc. which are highly beneficial and globally accepted programs for process improvement.
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange used was Rs.5,169.21 lakhs and the total foreign exchange earned was Rs. 76,977.49 lakhs.
(Rs. In lakhs)
Particulars |
March 31, 2016 |
March 31, 2015 |
Value of imports on CIF basis |
||
Capital goods |
516.46 |
597.44 |
Stores and spares |
25.74 |
43.80 |
Other Food Items |
- |
446.97 |
Total |
542.20 |
1,088.21 |
Expenditure in foreign currency |
||
Legal fees |
18.14 |
47.81 |
Interest and other charges to bank |
136.76 |
169.79 |
Steamer freight |
1312.44 |
1,092.37 |
Sales promotion |
41.57 |
36.45 |
Commission on export sales |
3255.76 |
22.56 |
Others |
404.54 |
77.16 |
Total |
5,169.21 |
1,446.14 |
Earnings in foreign currency |
||
FOB value of exports |
76,977.49 |
75,587.39 |
Total |
76,977.49 |
75,587.39 |
33. Corporate Social Responsibility (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 related to CSR activities is detailed in (Annexure II).
34. Human Resources
Your Company treats its "human resources" as one of its most important assets.
Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. The Company maintains healthy, cordial and harmonious industrial relations at all level.
35. Directors'' Responsibility Statement
Pursuant to Section-134(3)(C) of the Companies Act, 2013, the Director''s based on the representations received from the operating management & after due inquiry confirm that:-
(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;
(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 at the end of the financial year and of the profit and loss of the Company for that period;
(c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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; and
(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 were adequate and operating effectively.
36. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 205A and Section 205C of the Companies Act, 1956, the dividend which remain unpaid/unclaimed for a period of seven years from the date of transfer to unpaid dividend account is required to be transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government. Accordingly, the amount of such dividend for the financial year 2008-09, remaining unclaimed for the period of seven years should be transferred to Investor Education and Protection Fund and cannot be claimed there from.
The amount of Dividend unclaimed/unpaid for the financial year 2008-09 to 2014-15 lies in the respective unpaid dividend account and can be claimed from Company''s Register and Transfer Agent i.e. Big Share Services Private Limited, before the due date for transfer of the same in IEPF account.
Pursuant to the provisions of the Investor Education Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 18th September 2015, with the Ministry of Corporate Affairs.
During the year, the Company has transferred unpaid dividend of Rs.256,562/-to Investor Education and Protection Fund for the dividend declared in the financial year 2007-08.
37. Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 to NSE and BSE where the Company''s Shares are listed.
38. Acknowledgements
Your Director place on record their gratitude to all stakeholder for their assistance, cooperation and encouragement. Your Director also wish to place on record their sincere thanks to all investor, vendor, employees for their outstanding performance.
For and on behalf of the Board of Directors
Sd/-
Vijay Kumar Arora
DIN: 00012203
Chairman & Managing Director
Place: Gurgaon
Date: Date: 11th August, 2016
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their 25th Annual Report on
the business and operations of the Company and the accounts for the
Financial Year ended March 31, 2015.
1. Financial Performance of the Company (Standalone)
(Rs. In Lacs)
Particulars 2014-2015 2013-14
Gross Income 185,598.22 181,085.33
Profit Before Interest and 16,099.89 15,040.02
Depreciation
Finance Charges 8,980.13 7,181.22
Gross Profit 7,119.76 7,858.80
Provision for Depreciation 2,851.55 2,193.77
Net Profit Before Tax 4,268.26 5,670.70
Provision for Tax 1,202.74 1,822.31
Net Profit After Tax 3,065.53 3,848.37
Balance of Profit brought 17,800.40 15,029.34
forward
Balance available for 20,865.93 18,877.71
appropriation
Proposed Dividend on Equity 529.07 5,91.88
Shares
Tax on proposed Dividend 105.78 1,00.59
Transfer to General Reserve Nil 3,84.84
Surplus carried to Balance 20,152.86 17,800.40
Sheet
2. Company''s working during the year
During the year the Company has witnessed a steady performance across
all its business verticals. The gross sales during the year stood at
Rs.2,780 crores as against Rs.2,493 crores in FY14. The growth has been
due to strong sales growth in the domestic sales volume.
The Company''s branded business is growing steadily and now contributes
close to 70% of the total sales.
The branded rice business in India, which is largely contributed by the
Company''s flagship brand Dawaat, has grown at a CAGR in excess of 20%
over FY11 to FY15. Growing at a CAGR of 25% plus over FY11 to FY15, the
Company''s US branded rice business has also witnessed a robust growth.
The Company''s Organic business has been one of the fastest growing
segments with a CAGR in excess of 70% over FY11 to FY15 and contributed
Rs.180 crores in FY15. The institutional rice business has also being
growing at a stable rate. During the year, the Company continued to
invest in all its flagship brands to increase their market presence.
During the year, the Company has established another state-of-the-art
Research & Development Center at its USA unit in Cypress, California.
During the year, the Company developed and delivering two
state-of-the-art grain silos to Madhya Pradesh Warehousing and
Logistics Corporation (one each at Bhopal and Indore). The project was
delivered within the prescribed time limits, enabling the Company to
qualify for full storage charges for a guaranteed period.
The gross revenue of the Company on standalone basis stood at Rs.1856
Crores against Rs.1811 Crores in FY14. The Profit Before Interest &
Depreciation during the year stood at Rs.160.99 crores, up by 7% Y-o-Y
whereas the margin stood at 8.7% as against 8.3% in FY14.
The Net Profit before tax stood at Rs.30.66 crores as against Rs.38.48
crores in FY14.
3. Change in the nature of business, if any-
During the current year there has been no major change in the business.
4. Dividend
Your Board of Directors has recommended a dividend of Rs.2 per equity
share of face value of Rs.10/- each for the year ended 31st March 2015
subject to shareholders approval in the ensuing Annual General Meeting.
The total payout including the dividend distribution tax amount to ''
634.85 /- lacs.
5. Reserves
Out of the amount available for appropriation, Company''s Directors
propose to transfer Rs.NIL /- lacs to General Reserve and retain
Rs.20,152.86/- lacs to Profit and Loss Account.
6. Share Capital
During the financial year, the Company has allotted 147,793 equity
shares to the various employees of the company who are eligible for
allotment under the Employee Stock Option Plan-2010. Accordingly,
issued, subscribed and paid up equity capital of the company has
increased from Rs.263056090 to Rs.264535820. During the year, the
company has not issued any equity shares with differential right or any
sweat equity shares.
7. Details of Directors and Key Managerial Personnel Appointed and
Resigned during the year
The following Directors and Key Managerial Personnel has been appointed
and resigned during the year:-
S. Name of Designation Appointment/ Date of
No. the Person Resignation Appointment
/Resignation
1 Mr. Independent Resigned 07/08/2014
Surender Director
Kumar
Tuteja
2 Mrs. Renu Independent Appointment 10/11/2014
Challu Director
3 Mr. Anil Chief Resigned 13/02/2015
Khandelwal Financial
Officer
4 Mr. Som Chief Appointment 13/02/2015
Nath Financial
Chopra Officer
8. Particulars of Employees & Employee Remuneration
Pursuant to the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, statement of particulars of employees is
annexed as Annexure IV.
The statement containing particulars of employee as required under
Section-197(12) of the Companies Act, 2013 read with Rule 5(2) of the
Companies(Appointment and Remuneration of Managerial Personnel) Rules,
2014 forms part of this report as AnnexureIV. None of the employees
listed in the said statement is a relative of any Director of the
Company. None of the employees hold(by himself/herself or along with
his/ her spouse and dependent children) more than 2% of the equity
shares of the Company.
The ratio of remuneration of each Director to the median employees''
remuneration and other details in terms of 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 forming part
of this report and enumerated under Remuneration Policy heading.
9. Board Meetings
During the financial year, four Board Meetings were held. The details
of which are given in the Corporate Governance Report. The intervening
gap between the Meetings was within the period prescribed under the
Companies Act, 2013.
10. Board Evaluation
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out an annual performance
evaluation of its own performance, the directors individually as well
as the evaluation of the working of its Audit, Nomination &
Remuneration and Compliance Committees.
11. Statement on Declaration by an Independent Director(s) and re-
appointment, if any
All the Independent directors have given their Independency declaration
as provided in sub-section (6) of Section 149 of the Companies Act,
2013.
During the year, Mr. SK Tuteja has resigned from the post of
Independent Director w.e.f 7th Aug, 2015 due to his other
pre-occupations. Mrs Renu Challu joined the LT Brand on 10th November,
2014 as Additional Director. The Company has received a notice writing,
from a member proposing her candidature for office of Director along
with a deposit of Rs. 1 lac.
12. Remuneration Policy
The Board has, on the recommendation of the Nomination & Remuneration
Committee is in process of framing a policy for selection and
appointment of Directors, Senior Management and their remuneration. The
brief Remuneration Policy is stated in the Corporate Governance Report.
Managerial Remuneration:
1. Ratio of remuneration of each
director to median remuneration of
employees
Vijay Kumar Arora 47.93
Ashwani Kumar Arora 0
Surinder Kumar Arora 31.17
2. Percentage increase in remuneration
of each director and KMPs
Vijay Kumar Arora 0
Surinder Kumar Arora 0
Ashwani Kumar Arora NA
Som Nath Chopra 0
Monika Chawla Jaggia 0
3. Percentage increase in the median 6%
remuneration of employees
4. Number of permanent employees 827
5. Relationship between average increase Depends upon the
in remuneration and of the company and profitability also the
company performance inflation of the economy
6. Comparison of remuneration of There is no increase in
KMPs against company Remuneration of KMPs
performance
7. Average percentile increase in salary
of employees, other than managerial
personnel,comparison with percentile
increase in managerial remuneration
and justification
Managerial Increase 6.40%
Non Managerial Increase 12.32
8. Variations in the market The market capitalization
price earning capitalization of the company, has
of the company ratio as at the increased to Rs. 26 162.6/
closing date of the current -Lakhs from Rs. 24 082.8/-
financial year and previous Lakhs as on 31st March
financial year and percentage 2014. The price earning
increase over decrease in the market ratio was 8.52 as on 31st
quotations of the shares of the March 2015 as compared
company in comparison to the rate at to 6 25 in 31st March 2014
which the company came out with the The market price of the
last public offer. company as on 31st March
2014 was Rs. 91.55/-
and Rs. 98.90/- as on 31st
March 2015. (Closing Price
of BSE)
9. Comparison of the each There is no increase in
remuneration of the KMPs Remuneration of KMPs
against company performance
10. The ratio of remuneration of the No such cases
highest paid directors to that of
employees who are not directors but
receive remuneration in excess
of the highest paid directors during
the year.
11. Affirmation that the remuneration The company is in the
is as per the remuneration process finalizing the
policy of the company Remuneration Policy of the
company
12. The key parameters for any No such variable component
variable component of remuneration of remuneration
availed by the directors. availed by the directors
13. Details of Subsidiary/Joint Ventures/Associate Companies
Pursuant to sub-section (3) of Section 129 of the Act, the statement
containing the salient feature of the financial statement of a
Company''s subsidiary or subsidiaries, associate company or companies
and joint venture or ventures is given as Annexure-V [Performance and
financial position of each of the subsidiaries, associates and joint
venture companies included in the consolidated financial statement]
Further, the Annual Accounts and related documents of the subsidiary
company shall be kept open for inspection at the Registered & Corporate
Office of the Company. The Company will also make available copy
thereof upon specific request by any Member of the Company interested
in obtaining the same. Further, pursuant to Accounting Standard AS-21
issued by the Institute of Chartered Accountants of India, Consolidated
Financial Statements presented by the Company in this Annual Report
include the financial information of its subsidiary.
Name of the Companies, which become or ceased as Subsidiaries/Joint
Ventures/Associates Companies during the year
S. Name and Address of the Company CIN/RegistrationNumber
No.
1. Raghuvesh Agri-Foods Private Limited U63000DL2014PTC267604
Unit N°:134, 01st Floor Rectangle-1,
Saket, District Centre, New Delhi-110017
2. Raghuvesh Warehousing Private Limited U63020DL2014PTC267603
Unit No:134, 01st Floor, Rectangle-1,
Saket, District Centre, New Delhi-110017
3. Nice International FZE 1115
Lob 20, Office 113, JAFZA, Dubai, UAE
S. Subsidiary/Joint Date of Incorporation/
No. Venture/ Associate Seizure
1. Associate 20th May, 2014
(Date of Incorporation)
2. Associate 20th May, 2014
(Date of Incorporation)
3. Fellow Subsidiary 22nd March, 2015
(Closure date)
14. Auditors
The Auditors, M/s Walker Chandiok & LLP., Chartered Accountants,
Statutory Auditors of the Company, hold office till the conclusion of
the ensuing Annual General Meeting and are eligible for re-appointment
and have confirmed that they are not disqualified under any provisions
of Section 141(3) of the Companies Act, 2013 and have shown their
willingness to accept the office of Statutory Auditors.
The Company has received a letter from them to the effect that their
re-appointment, if made, would be within the prescribed limits u/s
141(3)(g) of the Companies Act, 2013 and that they are not disqualified
for re-appointment.
15. Auditors'' Report
The Auditors'' Report does not contain any qualification. Notes to
Accounts and Auditors remarks in their report are self-explanatory and
do not call for any further comments.
16. Secretarial Audit Report
In terms of Section 204 of the Act and Rules made there under, M/s. D
Dixit & Associates, Practicing Company Secretary have been appointed
Secretarial Auditors of the Company. The report of the Secretarial
Auditors is enclosed as Annexure VI to this report. The point-wise
comments are enumerated as follows.
Reply to the observations in the Secretarial Audit
i. Delay in Filling Forms
Due to the oversight, the Company failed to file some of the forms in
prescribed time frame of Companies Act, 2013 and applicable additional
fees has already been paid to Ministry of Corporate Affairs.
ii. Related party transactions exceeding the limits approved by the
Shareholders
The Shareholders approved all the proposed material related party
transactions through postal ballot on 30th March 2015. However, the
actual transactions were in excess of those approved. The Board of
Directors already proposed to ratify the above in the AGM scheduled to
be held on 18th September 2015.
iii. Separate Meeting of Independent Directors of the Company
The requirement of conducting a separate meeting of Independent
Directors was introduced in the Companies Act, 2013. As the
availability of all independent directors in a separate day was not
possible in the financial year 2014-15, we failed to conduct the same.
However, we have already conducted a separate meeting of all our
Independent Directors on 27th May 2015.
iv. Date of AGM in e-Form 23 AC-XBRL
The Annual General Meeting of the Company for the financial year
2013-14 was duly held on 09th September 2014, however while preparation
and filling of 23AC-XBRL inadvertently AGM date was mentioned as 08th
September 2014. It was purely a clerical mistake.
v. CSR Spent
As we failed to identify a suitable projects for our CSR Activity, we
have not spent the remaining amount of our CSR Budget. Further, the
Company will spent the balanced amount in financial year 2015-16.
vi. Constitution of Audit Committee
One of our Independent Director Mr. Jagdish Chandra Sharma expired on
31st January 2014, member of Audit Committee and the Committee was left
with two members only out of which one was Nominee Director.
The Audit Committee was duly constituted with two Independent Directors
on 10th November 2014 with induction of Ms. Radha Singh.
vii. Stamp Duty on Issue of Shares
The Company will apply to the Revenue Department for payment of stamp
duty.
viii. Details of Male employee in Register as per Equal Remuneration
Rules, 1975.
The Company has already noted the discrepancies and will comply the
requirements of rule 6 of Equal Remuneration Rules, 1976.
ix. Gratuity Payment to Ex-employee
The Company will paid the due soon as per the Company''s policy.
x. Constitution of Board
One of our Independent Director Mr. Jagdish Chandra Sharma expired on
31st January 2014 and another Independent Director Mr. Surender Kumar
Tuteja resigned from the Board on 7th August 2015 due his
pre-occupation. We have appointed Mrs. Renu Challu as Independent
Director on our Board on 10th November 2014. The Company is also in
discussion with other independent professionals for the directorship in
the Company. The Company will appoint Independent Director at the
earliest in compliance with Clause 49 of the Listing Agreement.
xi. Adoption of Remuneration Policy
Asthe adoption of policywas introduced in the Companies Act, 2013, the
Company is in the process of adoption of policy as required u/s 178(3)
of the Companies Act, 2013.
17. Internal Audit & Controls
The Company continues to engage Pro Advisory India LLP as its Internal
Auditors. During the year, the Company continued to implement their
suggestions and recommendations to improve the control environment.
Their scope of work includes review of processes for safeguarding the
assets of the Company, review of operational efficiency, effectiveness
of systems and processes, and assessing the internal control strengths
in all areas. Internal Auditors findings are discussed with the process
owners and suitable corrective actions taken as per the directions of
Audit Committee on an ongoing basis to improve efficiency in
operations.
18. Issue of employee stock options
The details of ESOP as per rule 12 (9) of Companies (Share Capital and
Debentures) Rules, 2014.
Particulars Option 1 Option 2
Approval 648,329 201,209
Options granted 648,329 201,209
Options vested 196,312 135,618
Options exercised 142,059 5,914
Total number of shares arising 142,059 5,914
out of exercise of opitions:
Options forfeited/lapsed/ 128,677 53,763
cancelled
Variations of terms of options NIL NIL
Money realized by exercise of 5,398,242 224,732
options
Total number of options in force 196,312 135,618
Notes: -
1. Details of options granted during the fiscal 2012 to:
Particulars
(a) Directors and key
managerial personnel
1. Som Nath Chopra 46,318
2. Monika Chawla Jaggia 18,177
(b) Any other employee who The following employees
received a grant in any one have received a grant in
year of options amounting any one year of options
to 5% or more of the amounting to 5% or more
options granted during the of the options granted
year (includes employees during the year 2011-12
and group company Mr. S.K. Salhotra
employees) * Mr. Som Chopra
* Mr. Dipol Dhole
* Mr. Vijay Malik
* Mr. Vivek Chandra
* Mr. Vikram Patil
* Mr. Kamal Poplai
* Mr. Mukesh Aggarwal
The following employees
have received a
grant in any one year of
options amounting
to 5% or more of the
options granted during
the year 2012-13
* Mr. Mukesh Aggarwal
* Mr. Sandeep Lamba
* Mr. Gerald Taylor
* Mr. Mrinal Mathur
(c) Identified employees None
who are granted options,
during any one year equal
to exceeding 1% of the
issued capital (excluding
outstanding warrants
and conversions) of the
Company at the time of grant
19. Vigil Mechanism :
In pursuant to the provisions of Section 177(9) & (10) of the Companies
Act, 2013, a Vigil Mechanism for Directors and employees to report
genuine concerns has been established. The Vigil Mechanism Policy has
been uploaded on the website of the Company at www.ltgroup.in under
investors/policy documents/Vigil Mechanism Policy link.
20. Risk Management Policy
LT has in place comprehensive risk assessment and minimization
procedures, which are reviewed by the top management. During the year,
as per the requirements of Listing Agreement with the Stock Exchanges,
the Company has renamed Audit Committee as Audit Committee / Risk
Management Committee who plans risk management, reviews, monitors and
identify the risk on regular basis. Further, the Company is in the
process of appointing Chief Risk Officer for overall risk governance of
the Company.
21. Extract of Annual Return:
As required pursuant to Section 92(3) of the Companies Act, 2013 and
rule 12(1) of the Companies (Management and Administration) Rules,
2014, an extract of annual return in MGT 9 as a part of this Annual
Report as ANNEXURE I.
22. 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
There has been no material change in the business which may affect
financial position of the Company.
23. Compliance to Clause 5A of Listing Agreement (Details of Suspense
A/c) 01.04.2014 to 31.03.2015
S. Particulars No. of No. of
No. Shareholders Shares
i. Aggregate number of 7 6494
shareholders and the
outstanding shares lying
in Unclaimed Suspense
Account at the beginning
of the year
ii. Number of shareholders 0 0
who approached for
transfer of shares
from Unclaimed Suspense
Account during the year
iii. Number of shareholders 0 0
to whom shares were
transferred from
Unclaimed Suspense
Account during the year
iv. Aggregate number of 7 6494
shareholders and the
outstanding shares lying
in Unclaimed Suspense
Account at the end of the
year
The voting rights on the above stated shares shall remain frozen till
the rightful owner of such shares claims the shares
24. Details of significant and material orders passed by the
regulators or courts or tribunals impacting the going concern 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 & Company''s operations in future.
25. Details in respect of adequacy of internal financial controls with
reference to the Financial Statements.
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 internal financial control system which
ensures the all assets are safeguarded and protected and that the
transactions are authorized, recorded and reported correctly. The
Company''s internal financial control system also comprises due
compliances with Company''s policies and Standard Operating Procedures
(SOPs) and audit and compliance by internal Audit team, Pro Legal
Advisory, India, LLP.
26. Deposits
The Company has neither accepted nor renewed any deposits falling under
Chapter V of Companies Act, 2013.
27. Particulars of loans, guarantees or investments under section 186
a) Details of Loans:
S. No. Date of Details of Amount Purpose for Time Date of
making Borrower which the period BR
loan loan is to be for
utilized by which it
the recipient is given
S. No. Date of Rate of Security
SR (if Interest
reqd)
NIL
b) Details of Investments:-
L T FOODS LTD. - Details of Investments during FY 2014-15
S. Date of Details of Investee Amount - Rs. Purpose for which
No the proceeds
from investment
is proposed to be
utilized by the
recipient
1 18.06.2014 RAGHUVESH 10,000 INSTALLATION OF
WAREHOUSING PVT LTD SILOS AT BHOPAL
27.06.2014 RAGHUVESH 40,000 -do-
WAREHOUSING PVT LTD
11.07.2014 RAGHUVESH 800,000 -do-
WAREHOUSING PVT LTD
12.07.2014 RAGHUVESH 1,500,000 -do-
WAREHOUSING PVT LTD
19.07.2014 RAGHUVESH 6,600,000 -do-
WAREHOUSING PVT LTD
19.07.2014 RAGHUVESH 150,000 -do-
WAREHOUSING PVT LTD
02.09.2014 RAGHUVESH 6,900,000 -do-
WAREHOUSING PVT LTD
TOTAL 16,000,000
2 18.06.2014 RAGHUVESH AGRI 10,000 INSTALLATION OF
FOODS PVT LTD SILOS AT INDORE
27.06.2014 RAGHUVESH AGRI 40,000 -do-
FOODS PVT LTD
19.07.2014 RAGHUVESH AGRI 6,600,000 -do-
FOODS PVT LTD
26.08.2014 RAGHUVESH AGRI 2,675,000 -do-
FOODS PVT LTD
02.09.2014 RAGHUVESH AGRI 200,000 -do-
FOODS PVT LTD
30.09.2014 RAGHUVESH AGRI 6,090,849 -do-
FOODS PVT LTD
30.09.2014 RAGHUVESH AGRI 384,151 -do-
FOODS PVT LTD
TOTAL 16,000,000
S. Date of Date of Date of Expected
No Board special rate of
resolution resolution return
(if required)
1 18.06.2014 05.05.2014 N.A. 16%
27.06.2014
11.07.2014
12.07.2014
19.07.2014
19.07.2014
02.09.2014
2 18.06.2014 05.05.2014 N.A. 16%
27.06.2014
19.07.2014
26.08.2014
02.09.2014
30.09.2014
30.09.2014
c) Details of Guarantee / Security Provided:
Sl. Details of Amount Purpose for
No. recipient (In Lacs) which the security/
guarantee is
proposed to be
utilized by the
recipient
1 Daawat 31,283.68 Business purpose
Foods
Limited
2 Nature 13,240.00 -do-
Bio Foods
Limited
3 LT Overseas 3,125.00 -do-
North
America Inc.
4 LT Foods 3,750.00 -do-
Middle East
DMCC
28. Particulars of contracts or arrangements with related parties:
The particulars of every contract or arrangements entered into by the
Company with related parties referred to in sub-section (1) of Section
188 of the Companies Act, 2013 are disclosed in Form No. AOC-2. With
reference to Section 134(3) (h) of Companies Act, 2013 all contracts
and arrangement with related parties under Sec 188(1) entered by the
Company during the financial year were in ordinary course of business
also on arms length basis.
29. Corporate Governance Certificate
The Compliance certificate from the auditors regarding compliance of
conditions of corporate governance as stipulated in Clause 49 of the
Listing agreement shall be annexed with the report.
30. Management Discussion and Analysis
The Management Discussion and Analysis forms part of this Annual Report
for the year ended 31st March, 2015.
31. Obligation of Company under the sexual harassment of women at
workplace (Prevention, prohibition and redressal) Act, 2013
In order to prevent sexual harassment of women at work place a new act
The Sexual Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013 has been notified on 9th December, 2013. Under
the said Act every company is required to set up an Internal Complaints
Committee to look into complaints relating to sexual harassment at work
place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment of
Women at workplace and has set up Committee for implementation of said
policy. During the year Company has not received any complaint of
harassment.
32. Conservation of energy, technology absorption and foreign exchange
earnings and outgo
The details of conservation of energy, technology absorption, foreign
exchange earnings and outgo are as follows:
a) Environment and Efficiency
In these years of growth company has never shifted its focus from Energy
Conservation and it has remained one of the key priority areas. Better
controls are planned for reduction in Energy Consumption and even the
continuous steps are being taken to replace aged Equipments with new and
Modern technology to avoid overconsumption or loss of Energy. Few of the
key areas where company has worked and achieved Positive results are
listed below:-
Power Factor:-
Power Factor plays a pivotal role in Energy consumption. The company
has allocated dedicated resources to monitor and keep a check on Power
factor on daily basis. As a result of which company has successfully
maintained the Power factor within the range of 0.98 to 0.99.
Compressed Air Line:-
The Company had achieved good results previously by replacing old
compressed Air Line with the new Modular Pipeline. Hence to maintain
the legacy the idea was further extended to the remaining areas to
optimize the use of Compressed Air. Also on the basis of consumption
trend different time slots have been fixed in a day where the
requirement of compressed Air is fulfilled from a single operating
compressor, thereby resulting in Energy saving.
Replacement of Aged Motors:-
During internal audits few aged motors were identified which were
resulting In overconsumption of energy. The company decided to replace
those motors with High Efficiency 2 Motors which will help in reducing
the consumption of energy in those areas.
Interlocking of Machines:-
The company has decided to incorporate modern technology in certain
areas like Milling & De-Husking via Automation. This process will help
in eradicating the instances of idle running of machines and hence
reducing Power consumption in those areas.
LED Lights:-
LEDs are extremely energy efficient and consume up to 90% less power
than incandescent bulbs. Since LEDs use only a fraction of the energy
of an incandescent light bulb there is a dramatic decrease in power
costs. Also, money and energy is saved in maintenance and replacement
costs due to the long LED lifespan.
Power & Fuel Consumption (Bahalgarh Plant)
PARTICULARS 2014-15 2013-14
ELECTRICITY
Through Purchases
Units 19,067,355 18,957,610
Total Amount (Rs.) 150,111,338 143,355,134
Rate/Unit(Rs.) 7.87 7.56
Through Diesel Generator
Units generated 574,418 747,715
TOTAL AMOUNT (Rs.) 8,239,891 10,287,336
Cost/Unit (Rs.) 14.34 13.76
Power & Fuel Consumption (Varpal Plant)
PARTICULARS 2014-15 2013-14
ELECTRICITY
Through Purchases
Units 3,547,368 4,252,800
Total Amount (Rs.) 25,412,148 32,769,610
Rate/Unit(Rs.) 7.16 7.71
Through Diesel Generator
Units generated 186,700 140,800
TOTAL AMOUNT(Rs.) 3,524,240 2,614,711
Cost/Unit(Rs.) 18.88 18.57
(b) Technology ,Absorption,Adaption and Innovation
Technology is changing day by day. During the years the company has
taken significant steps in adoption of new technologies thus improving
overall efficiency of Plants. Similar steps were taken in the current
year as well by replacing the lower capacity machines with the New
Higher capacity Machines. Some such machines includes the Color Sorters
which is one of the critical machine involved in the Rice processing
industry. Some of the old lower capacity color sorters were replaced
with new upgraded and high capacity machines resulting in Reduction of
rejection percentage, improvement in Final output and increasing
overall throughput.
The company has realized and agree that the continuous improvement can
be achieved only if the employees involved in the process directly or
indirectly are highly trained on modern techniques and are aware of
Global Standards. One such step taken by the company in that direction
is to start Manufacturing Excellence and Improvement Program. The key
highlights of this improvement drive were - 5S, Maintenance improvement
Techniques, Reliability Matrix, MTTR & MTBF etc. which are highly
beneficial and globally accepted programs for process improvement.
(c) Foreign exchange earnings and Outgo
During the year, the total foreign exchange used was Rs. 1,446.14 lacs
and the total foreign exchange earned was Rs. 75,587.39 lacs.
(Rs. In lacs)
Particulars March 31,2015 March 31,2014
Value of imports on
CIF basis
Capital goods 597.44 112.83
Stores and spares 43.80 79.45
Other Food Items 446.97 -
Total 1,088.21 192.27
Expenditure in
foreign currency
Legal fees 47.81 32.88
Interest and other 169.79 -
charges to bank
Steamer freight 1,092.37 275.16
Sales promotion 36.45 33.56
Commission on 22.56 -
export sales
Others 77.16 263.10
Total 1,446.14 604.71
Earnings in
foreign currency
FOB value of
exports
Rice 75,585.88 82,739.58
Others 1.51 5.05
75,587.39 82,744.63
33. Corporate Social Responsibility (CSR)
The disclosures as per Rule 9 of Companies (Corporate Social
Responsibility Policy) Rules, 2014 related to CSR activities is
detailed in (Annexure II).
34. Human Resources,
Your Company treats its "human resources" as one of its most important
assets.
Your Company continuously invest in attraction, retention and
development of talent on an ongoing basis. A number of programs that
provide focused people attention are currently underway. Your Company
thrust is on the promotion of talent internally through job rotation
and job enlargement. The Company maintain healthy, cordial and
harmonious industrial relation at all level. The enthusiasm employee
have enabled the company to remain at leadership position in the
industry.
35. Directors'' Responsibility Statement
Pursuant to Section-134(3)(C) of the Companies Act, 2013, the
Director''s based on the representations received from the operating
management & after due inquiry confirm that:-
(a) In the preparation of the annual accounts, the applicable
accounting standards had been followed along with proper explanation
relating to material departures;
(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 at the end of the financial year and of the profit and
loss of the company for that period;
(c) The directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of this 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; and
(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 were
adequate and operating effectively.
36. Transfer of Amounts to Investor Education and Protection Fund
Pursuant to Section 205A and Section 205C of the Companies Act, 1956,
the dividend which remain unpaid/ unclaimed for a period of seven years
from the date of transfer to unpaid dividend account is required to be
transferred to the Investor Education and Protection Fund (IEPF)
established by the Central Government. Accordingly, the amount of such
dividend for the financial year 2007-08, remaining unclaimed for the
period of seven years should be transferred to Investor Education and
Protection Fund and cannot be claimed there from.
The amount of Dividend unclaimed/unpaid for the financial year 2008-09
to 2010-11 lies in the respective unpaid dividend account and can be
claimed from Company''s Register and Transfer Agent i.e. Big Share
Services Private Limited, before the due date for transfer of the same
in IEPF account.
Pursuant to the provisions of the Investor Education Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company, as on 09th
September 2014, with the Ministry of Corporate Affairs.
37. Listing with Stock Exchanges:
The Company confirms that it has paid the Annual Listing Fees for the
year 2015-2016 to NSE and BSE where the Company''s Shares are listed.
38. Acknowledgements
Your Director place on record their gratitude to all stakeholder for
there assistance, cooperation and encouragement. Your Director also
wish to place on record their sincere thanks to all investor, vendor,
employees for their outstanding performance.
For and on behalf of the Board of Directors
Sd/-
Vijay Kumar Arora
Place: Gurgaon Chairman & Managing Director
Date: 12.08.2015 DIN: 00012203
Mar 31, 2014
The Directors hereby present to you the 24th Annual Report of your
Company alongwith the Audited Statement of Accounts for the year ended
31st March 2014.
1.0 Financial Performance
Your Company''s continued focus on keep adding new products, markets and
point of sale held it in good stead in a difficult fiscal year 2013-14
that witnessed widespread economic slowdown worldwide. On consolidated
basis, the Company came within striking range of Rs. 2500 Crore mark in
recording a 12% growth in revenues that stood at Rs. 2,493 Crores.
Company''s focus on high margin branded business coupled with various
efficiency enhancement measures helped the Company post 18% growth in
EBITDA which reached Rs. 282 Crores for the year. Prudent management of
working capital led to a 3% reduction in the overall finance cost which
helped Company post a handsome 42% growth in its net profit which rose
to Rs. 85 Crores from Rs. 60 Crores in the previous year.
On standalone basis, the revenues grew by 9% to reach Rs. 1,811 Crores
whereas EBITDA grew by 0.34% to reach Rs. 150 Crores. Profit after tax
recorded a 13.8% growth to reach Rs. 38 Crores from Rs. 34 Crores recorded
in the previous year.
Consolidated Financial Highlights
(Rs. in Crores)
March March %
31, 2014 31,2013 Change
Income 2,493.0 2,230.0 12%
Expenses 2,361.7 2,147.5 10%
Material Consumed 1,678.7 1,194.6 41%
Purchase of traded goods 315.5 631.9 -50%
Changes in Inventories of (152.34) (169.7) -10%
Finished goods and traded
goods
Personnel Cost 63.9 49.0 29%
Other Expenses 305.1 285.3 7%
EBITDA 282.0 238.0 18%
Finance Cost 113.4 117.1 -3%
Depreciation & Amortization 37.4 38.8 -4%
Profit before prior period, 131.0 82.1 60%
exceptional items and tax
Prior period item/Exceptional (0.04) (0.7) -95%
items
Profit before tax 131.0 82.8 58%
Tax Expense 46.2 22.7 103%
Profit after tax 84.8 60.1 41%
2.0 Business Overview
Your Company continued to expand its market offerings and presence
through a slew of new initiatives and continued focus on building upon
its existing strengths. A key strategic initiative during the year was
adoption of a corporate tagline
''Tomorrow Starts Today''. The new tagline reflects Company''s clearer
vision of where it wants to go and also its urgency in terms of being
time efficient. In another major development, Company introduced
Amitabh Bachchan as the global brand ambassador of its flagship brand
''Daawat''. Company successfully completed the pilot launch of two new
range of products namely ''MyMy'' packaged snacks and ''Devaaya'' branded
staples. The response to both these initiatives have been very
encouraging and the Company intends to go- ahead with their full-scale
launch over coming quarters. The true potential of Company''s recent
focus on high-margin branded foods business coupled with these new
initiatives are likely start reflecting in its revenue and
profitability growth in a couple of years.
2.1 Branded Business
Company''s revenue from branded segment crossed Rs. 1700 Crore mark during
the year, contributing to 70% of the business. The Company entered 8
new countries and grew its export revenue from branded business by 71%.
''Daawat''retained its #2 position among basmati rice brands in India
while ''Royal''remained the largest selling basmati brand in the US
markets. Company''s new launches namely ''MyMy'' and ''Devaaya'' staples
coupled with aggressive promotion of ''Daawat'' with Amitabh Bachchan
helped the domestic branded business grow by 37%.
Company is marching forward with a definitive business strategy in
terms of products as well as markets for aggressive growth of its
branded business. All its mass and niche brands are well positioned to
scale accelerated growth over coming years.
2.2 Geographic performance
The Company is continuing to build upon its strong export base of North
America by deploying intense focus on relatively newer and not yet
explored geographies including the Middle East and Europe. Company''s
priority on high- margin branded business is leading to increased sales
of branded products in export segment too. Company recorded a 45%
volume growth and 71% revenue growth during the year. Branded exports
contribution to overall revenues grew to 41% in FY 14 from 35% in the
previous year. This was primarily driven by a handsome 97% volume
growth achieved in the Middle East region.
2.3 Dividend
Your Company''s Board of Directors has recommended a dividend of Rs.
2.25/- per equity share of face value of Rs. 10 each for the year ended
31st March, 2014, subject to shareholders'' approval in the ensuing
Annual General Meeting. The total payout including the dividend
distribution tax amounts to Rs. 692.83 Lacs.
In case of shares held in physical form, dividend shall be paid to
members whose names appear in the register of members as on 02
September, 2014 and for shares held in dematerialized form, the
dividend will be paid to those members whose names get furnished by
NSDL and CDSL as beneficial owners as on that date.
2.4 Unclaimed Dividend and Transfer to Investor Education and
Protection fund (IEPF)
Pursuant to Section 205A and Section 205C of the Companies Act, 1956,
the dividend which remains unpaid/ unclaimed for a period of seven
years from the date of transfer to unpaid dividend account is required
to be transferred to the Investor Education and Protection Fund (IEPF)
established by the Central Government. Accordingly, the amount of such
dividend for the financial year 2006-2007, remaining unclaimed for the
period of seven years should be transferred to Investor Protection Fund
and cannot be claimed therefrom.
The amount of dividend unclaimed /unpaid for the financial year
2007-2008 to 2010-2011 lies in the respective unpaid dividend account
and can be claimed from Company''s Registrar and Transfer Agent i.e
Bigshare Services Private Limited, before the due date for transfer of
the same in IEPF account.
Pursuant to provisions of Investor Education and Protection Fund
(Uploading of information regarding Unclaimed amount lying with
Companies) Rules 2012, the Company has uploaded the details of unpaid
and unclaimed amount lying with the Company as on 23rd September
2013(date of last AGM) on its website i.e www.ltgroup.in and also on
website of Ministry of Corporate Affairs.
2.5 Reserves
Out of the amount available for appropriation, Company''s Directors
propose to transfer Rs. 3.85 Crores to General Reserve and retain Rs. 178
Crores to Profit and Loss account.
3.0 Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956 with respect to directors'' responsibility statement, it is
hereby confirmed that:
- in the preparation of the annual accounts for the year ended March
31, 2014, the applicable accounting standards read with requirements
set out under Schedule VI to the Companies Act, 1956, have been
followed and there are no material departures from the same;
- the Directors have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company as at March 31, 2014 and of the profit of the Company for
the year ended on that date;
- the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
- the Directors have prepared the annual accounts of the Company on a
''going concern'' basis in the Section
4. Auditors and Auditor''s Report
M/s Walker Chandiok& Co, Chartered Accountants,Statutory Auditors of
the Company, hold office till the conclusion of the ensuing Annual
General Meeting and are eligible for re-appointment and have confirmed
that they are not disqualified under any provisions of Section 141(3)
of the Companies Act, 2013, and have shown their willingness to accept
the office of statutory Auditors.
The Company has received a letter from them to the effect that their
re-appointment, if made, would be within in the prescribed limits u/s
141(3)(g) of the Companies Act, 2013 and that they are not disqualified
for re-appointment.
a) Remuneration includes basic salary, allowances, taxable value of
perquisites etc. The term remuneration has the meaning assigned to it
in explanation to Section 198 of the Companies Act, 1956.
b) None of the employee is relative of any Director of the Company.
c) None of the employees neither draws remuneration in excess of that
drawn by the Managing director(s) or whole-time director and holds more
than 2% of the equity shares of the Company as on 31st March 2014.
6.0 Environment and Efficiency
6.1 Power Usage
The Company has always focused on optimum usage of resources and has
always laid a concerted stress on energy conservation for that matter.
In earlier years, the Company had been purchasing power from energy
exchange for limited slots approximately 8 hrs per day which was
resulting in savings between Rs. 3--5 Lacs per month. Later on, this was
shifted to a 24 hrs per day purchase which resulted in an increase in
savings monthly. This improvement resulted in a net saving of
approximately Rs. 2 Crores for FY14.
Per unit Cost was strictly monitored on daily basis root cause for
deviations were analyzed. Installation of sensors on was done on all
machines for automatic stoppage during no material situation. Through
such changes we were able to reduce the power consumption of polisher
plant from 5 units per quintal to 4.5 units per quintal which was a
major breakthrough. This reduction in units per quintal resulted in a
saving of approximately Rs. 30 Lacs for FY14.
Power & Fuel Consumption (Varpal Plant)
PARTICULARS Year Year
2013-14 2012-13
ELECTRICITY Through Purchases
UNITS 4,252,800 3,439,157
TOTAL AMOUNT(Rs.) 32,769,610 23,199,870
Rate/Unit(Rs.) 7.71 6.75
Through Diesel Generator
Units generated 140,800 308900
TOTAL AMOUNT(Rs.) 2,614,711 6,162,100
Cost/Unit(Rs.) 18.57 19.95
Power & Fuel Consumption (Bahalgarh Plant)
PARTICULARS Year Year
2013-14 2012-13
ELECTRICITY Through Purchases
UNITS 18,957,610 15,058,706
TOTAL AMOUNT(Rs.) 143,355,134 90,575,608
Rate/Unit(Rs.) 7.56 6.01
Through Diesel Generator
Units generated 747,715 2,397,238
TOTAL AMOUNT(Rs.) 10,287,336 29,150,414
Cost/Unit(Rs.) 13.76 12.16
6.2 Compressed Air Line Leakage
During the year a noticeable increase in overall power consumption of
Bahalgarh plant was observed. A team was developed whose role was to
figure out this unwanted consumption at different plant areas through
internal audits conducted at regular intervals. A strong monitoring and
inspection mechanism was developed at all stages of operation and few
major leakages were found which were left unnoticed. These leakages
resulted in excess power consumption. Such leakages were corrected and
an overall savings of approximately Rs. 20 Lacs was observed for FY14.
6.3 Head Rice Rejection
Following a policy of strict quality adherence, sound Grain monitoring
was made more robust and strict. Samples of rejected material stored in
jumbo bags and were sent to Lab for reanalysis. Savings noticed for FY
14 was approximately Rs. 9 Lacs.
6.4 Management of Port of Loading
Efficient management of port of loading for Export shipments was being
done. Savings due to this transformation of port of loading Mumbai v/s
Mundra/Pipavav was approximately 34 Lacs.
6.5 Weighment Charges
Savings in Weighment charges directly at ICD from Concor for FY 2013-14
was approximately 4 Lacs.
7.0 Foreign Exchange Earnings and Outgo
14.1 Activities relating to export, initiatives to increase exports,
developments of new exports for products and services and export plan.
The Company has continued to maintain focus and avail of export
opportunities based on economic considerations, during the year, the
Company has exports (FOB Value) worth Rs. 82744.63 Lacs.
7.1 Total Foreign exchange earned and used
Expenditure in Foreign Currency
(Rs. in lacs)
PARTICULARS March 31, March 31,
2014 2013
Value of imports on CIF basis
Capital goods 112.83 94.67
Packing materials - 7.42
Stores and spares 79.45 -
Other Food Items - 14.27
192.27 116.36
Expenditure in foreign currency
Legal fees 32.88 124.54
Interest and other charges to - 507.67
bank
Steamer freight 275.16 2,721.20
Sales promotion 33.56 72.57
Commission on export sales - 87.22
Others 263.10 504.47
Total 604.71 4,017.66
7.2 Income in Foreign Currency
FOB Value of Exports
(in lacs)
PARTICULARS March 31, March 31,
2014 2013
RICE 82,739.58 83,741.06
Others 5.05 6839.64
Total 82,744.63 90,580.70
8.0 Research and Development
LT Foods is pursuing an aggressive growth path, planning on
double-digit CAGRs year on year. The Company plans to be one of India''s
leading FOOD Companies with a rich basket of foods. 5 years hence, the
Company intends to have its brands in Staples and Value Added food
categories.
With the launch of the MyMy Brand of Healthy Snacks, your Company
entered an exciting arena of instant crisps and mixes. The Company
aspires to become a rage in the field and bring these snacks to the
peak of the snack food industry. The initial response to the products
has been good. Food distributors from Africa, Middle East, Australia
and North America praised these products at a recent Global Food Show.
Looking ahead, the Company is progressing steadily towards launching
new line of products specific to regional diversity of India. Using
Chefs with regional culinary expertise and Company''s Food
Technologists, LT Food has captured these delights into a format that
will make preparation easy at home. No fuss no mess, just a PERFECT
dish on the table. This new line of products will be launched this
year and the line will be kept exciting with the introduction of new
items from time to time.
Gurgaon-based R&D group of LTF is also working on products for our USA
Subsidiary. A faster development cycle coupled with speed to market is
the mantra. A new pilot processing facility will be added soon for the
group to work in and develop convenience food products. The Company
believes with the new added tools this group will keep the new product
pipeline full, so that are dream becomes a reality long before the 5
years deadline that the Company has set for itself.
9.0 Material Changes occured beetween the end of financial year and the
date of report
Fire accident at one of the Company''s subsidiary i.e. Daawat Foods
Limited works located at Plot No. 7, Satlapur Growth Centre, Phase-II,
Industrial Area, Mandideep, District Raisen, Madhya Pradesh on June 07,
2014 around 04.00 am.
The fire is controlled with the help of local fire agency but
significant stock of raw material i.e. Paddy got burnt into fire. The
production area of the plant is fully safe and no casualty has
happened.
9.1 Business Restructuring
The Company has formed two Special Purpose Vehicles on 20th May, 2014
named as Raghuvesh Agri Foods Private Limited and Raghuvesh Warehousing
Private Limited with 40%stake to build and construct silos for Madhya
Pradhesh government.
Corporate Governance Report
In adherence to the Clause 49 of the Listing Agreement with the Stock
Exchange, a separate report on Corporate Governance along with Auditors
certificate on its compliance is attached as Annexure and forms
integral part of this Report.
Future Strategy
Going forward, the Company plans to penetrate deeper into the global
markets and continue to strengthen its product basket by offering
diverse products. With growing brand patronage, LT Foods is looking to
bring in more and more varieties to its existing brand umbrella. The
Company has already introduced Atta, Suzi, Besan, Dalia, Poha, and
Maida under its Devaaya brand umbrella. It plans to add Sauces, Healthy
Bars and Rice Cakes etc., to its product offerings.
In its bid to expand internationally, the Company is also attentive to
any alliance or partnership opportunities coming its way. It is also
inclined towards inorganic ways of expansion. Internally, the Company
also looks forward to have a more efficient and optimum utilization of
its funds. In terms of trade, it plans to foray even deeper into the
Middle East, Far East and United Kingdom. On back of these initiatives
and plans coupled with its current growth momentum, LT Foods'' business
outlook remains positive over coming years.
Mar 31, 2013
The Directors are pleased to present the 23rd Annual Report of your
Company, together with the Audited Statement of Accounts for the
Financial year Ended 31st March 2013.
FINANCIAL PERFORMANCE (CONSOLIDATED)
The Company''s progress was manifest in the excellent numbers as per the
consolidated financial highlights for the year ended March, 31, 2013,
as under:-
$ in Crores
FISCAL FISCAL ChANGE
2013 2012
$ in Crores $ in Crores % change
Income 2229.58 1435.50 55.32
Expenses
material consumed 1,194.57 701.83 70.21
Purchase of traded goods 631.88 399.47 58.18
Changes in inventories of
Finished goods and traded (169.68) (68.83) 146.52
goods
Employee benefits 49.47 42.58 16.18
Other expenses 285.32 182.82 56.07
EBITDA 238.02 177.63 33.99
Finance cost 117.13 107.48 8.98
Depreciation & amortisation 38.84 33.96 14.37
Profit before prior period, 82.06 36.20 126.75
exceptional items and tax
Prior period item/Exceptional items (0.72) 36.21
Profit before tax 82.78 (.02 )
Tax expense 22.71 2.00
Profit after tax 60.07 (2.01)
The financial year 2012-13 proved to be a landmark year for the Company
which defied a contrarian economic environment to post exceptional
performance across all parameters. The Company reported impressive
numbers with the top line growing at 55 per cent over previous year to
cross $ 2,000 Crores mark. PBT and PAT also showed significant increase
over the previous year, thus underlining the financial robustness of
the Company.
The Company reported increased sales, driven by expansion into new
geographies, strengthening of distribution network, diversification
into new business and new product streams. Total revenue stood at $
2,229.58 Crores, up from $ 1,435.50 Crores from previous year.
Similarly, EBIDTA stood at $ 238 Crores compared to $ 178 Crores in the
previous year, representing an increase of 34 per cent.
On standalone basis, the Company''s revenues stood at $ 1667.48 Crores,
representing a growth of 66.77 per cent over the previous year.
Revenues from domestic sales stood at $ 713.55 Crores, an increase of
40.82 per cent, while revenue from export sales stood at $ 940.12
Crores, showing a significant increase over the previous fiscal - a
clear indicator of the Company''s sustainable growth charter.
The Company''s growth story was scripted by aggressive marketing
initiatives and a focused brand building drive. This judicious mix of
branding and marketing initiatives augmented the leadership strength of
its key Basmati Rice brands, thus adding to both its top and bottom
line growth. ''Daawat'' and ''Royal'', which continue to be the consumers''
first choice of branded Basmati Rice, contributed over 50 per cent of
the total revenue of the Company. The other key Basmati Rice brands,
such as ''Devaaya''
''Heritage'' and ''Rozana'', also strengthened the product basket, both in
the Indian and International markets. All these immensely popular
brands enabled the Company to be the first choice of consumers across
all price points and this played a vital role in adding to the top line
growth. Exports, too, improved as the Company continued to foray into
new geographies, even as well established markets of Middle East, USA
and UK posted excellent numbers. The Company, during the year, expanded
its presence in another 15 geographies across Africa and Far East
markets, opening new vistas of growth for the future.
DIVIDEND
your Directors have recommended a dividend of $ 2/- per equity share
for the year ended 31st March, 2013, amounting to $ 523.37 Lacs, on
which the Company paid tax of $ 88.95 Lacs. Dividend shall be paid to
members whose names appear in the register of members as on 18th
September, 2013; in respect of shares held in dematerialized form, it
will be paid to members whose name are furnished by NSDL and CDSL, as
beneficial owners as on that date.
UNCLAIMED DIVIDEND
Pursuant to provisions of Section 205A and Section 205C of The
Companies Act, 1956, the dividend which remains unpaid/unclaimed for a
period of seven years from the date of transfer to unpaid dividend
account is required to be transferred to the Investor Education and
Protection Fund (IEFP) established by Central Government.
The amount of dividend for the financial year 2005- 2006, remaining
unclaimed for the period of seven years, has been transferred to the
IEPF of Central Government and cannot be claimed therefrom. The amount
of dividend unclaimed/unpaid for the Financial years 2006-2007 to 2010
-2011 lies in the respective unpaid dividend accounts and can be
claimed from Bigshare Services, the Registrar and Share transfer agent
before the due date for transfer of the same.
The Company has already written to the shareholders informing them
about the due dates for transfer of unclaimed dividend to IEFP.
Attention of the stakeholders to this matter is again drawn through the
Annual Report. Shareholders are requested to contact the Registrar for
claiming the unclaimed dividend standing to the credit of their
account.
TRANSFER TO RESERVES
Out of the amount available for appropriation, your Directors propose
to transfer Rs 253.69 Lacs to General Reserve and retain Rs 2,516.50
Lacs to profit and loss account.
TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)
Pursuant to the provisions of Section 205A (5) and 205C of The
Companies Act, 1956, relevant amount which remained unpaid or unclaimed
for a period of seven years has been transferred by the Company to
IEPF.
Pursuant to provision of Investor Education and Protection Fund
(Uploading of information regarding unpaid and unclaimed amount lying
with Companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amount lying with the Company as on 19th
September, 2012 (Date of last AGM) on its website, www.ltgroup.in, and
also on the MCA website.
PARTICULARS REQUIRED UNDER SECTION 212 OF THE COMPANIES ACT, 1956.
A statement pursuant to section 212 of the Companies Act, 1956,
relating to subsidiary
companies, is attached to this Annual Report. In terms of general
exemption granted by the Ministry of Corporate Affairs vide its
circular No. 2/2011 dated 8th February, 2010, the audited accounts and
Report of Board of Directors and Auditors of the Company''s subsidiaries
have not been attached to this Annual Report. The Company has complied
with the requirements as prescribed under the said circular. The annual
accounts of the subsidiary companies and the related detailed
information are open for inspection by any shareholder, including the
shareholder of subsidiary company, at the registered office of the
Company and its subsidiary during the working hours on all working
days.
In accordance with the Accounting Standard, AS-21, issued by the
Institute of Chartered Accountants of India, Consolidated Financial
Statements presented by your Company include the financial information
of all its subsidiaries.
CORPORATE GOVERNANCE
The Company has been in compliance with all the conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement with
Stock Exchange, and a certificate from the Auditors to this effect is
made part of the Annual Report
The Board lays strong emphasis on transparency, accountability and
integrity. Its ''Governance Committee'' has been specifically assigned
the task of analysing the clause with respect to good governance
practice. Doing the right thing in the right way, and ensuring that the
right safeguards, checks and balances are in place, is a key component
of the Company''s Corporate Governance policy.
In terms of sub clause (v) of Clause 49 of Listing Agreement,
Certificate of CEO/CFO, inter alias, confirming the correctness of the
financial statements, adequacy of the internal control measures and
reporting of matters to the Audit Committee in terms of the said
clause, is also enclosed as a part of said Report.
COST AUDITOR
The Ministry of Corporate Affairs (MCA) has introduced The Companies
(Cost Audit Report) Rules, 2011 and, vide its notifications, has made
mandatory the appointment of Cost Auditor for certain Companies. The
same is applicable to the Company and, in accordance with provision of
law, Mr Vipul Bhardwaj, Practising Cost Accountant, had been appointed
to conduct cost audit for the financial year ending 31st March, 2012,
and the cost audit report for the said financial year shall be filed
with the Central Government within the prescribed time.
Mr Vipul Bhardwaj has been reappointed as Cost Auditor for the
financial year 2012-2013 in accordance with the provisions of the law.
AUDITORS
Walker Chandiok & Co, Chartered Accountants,, the Statutory Auditors of
the Company, retire at the ensuing Annual General Meeting and have
confirmed their eligibility and willingness to accept the office of
Statutory Auditors if reappointed. The Audit Committee and the Board
of Directors recommend their reappointment as statutory auditors for
the financial year 2013-2014 for shareholders'' approval.
Paragraph B (10) of schedule 18 in the notes on accounts referred to in
the Auditors Report are self- explanatory and therefore do not call for
any further comments.
DEPOSITS
During the year, the Company did not accept any deposits from the
public within the meaning of Section 58A of the Companies Act, 1956.
a. Employed throughout the year under review and were in receipt of
remuneration for the year which, in aggregate, was not less than
$ 6,000,000/- per annum
b. Employed for a part of the year under review and were in receipt of
remuneration for any part of the financial year at a rate, in
aggregate, not less than $ 5,00,000/- p. m.: NIL
Mr. Vijay Kumar Arora, Mr. Ashwani Kumar Arora and Mr. Surinder Kumar
Arora are relatives within the meaning of Section 6 of the Companies
Act, 1956.
*Mr Ashwani Kumar Arora was paid salary from overseas subsidiary Nice
International FZE.
PARTICULARS OF CONSERVATION OF ENERGy AND TECHNOLOGy ABSORPTION AND
FOREIGN ExCHANGE AND OUTGO
Information as required under Section 217(1) (e) of the Companies Act,
1956, read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988, is set out hereunder:
Conservation of energy
Sustainable growth requires greater focus on energy conservation, which
is a priority area for the Company. The Company''s continued efforts to
reduce and optimise the use of energy consumption have shown positive
results. Better controls are planned to achieve further reduction in
energy consumption. All the new manufacturing facilities of the Company
are equipped with hi-tech energy monitoring and conservation systems to
monitor usage.
The Company has undertaken various initiatives at its Amritsar plant
for energy conversation. These include:
- Installation of VFD drives to all motors above 40 HP capacity
- Soft starter graders attached with VFD
- 0.98 power factor maintained by all capacitors Installations of
street lights with timers
- Interlocking and automation of electric motors for ideal running of
motors
- Caution Alarms on steam and pressure headers to deliver best quality
steam
Technology Absorption, Adaptation and Innovation:
1 During the year, the Company made significant strides in improving
its overall infrastructure at its Rice milling unit by adding new Rice
Silos, in addition to the paddy Silos it already had in place. The
Company is also adding new packaging lines with new re-closable small
packs for the mainstream stores across the world.
2 The Company has gained the benefits derived as a result of the
abovementioned efforts, e.g. product development, product improvement,
cost reduction, automation, etc.
The said efforts also helped in satisfying consumer needs as well as
business requirements of introducing new and consistent products with
better quality. This will help the Company sustain the growth momentum
built over the years and successfully take it forward into the future.
Imported Technology
To keep its manufacturing systems and processes upgraded at all times,
the Company imports machinery for its various projects from time to
time.
QUALIFICATIONS IN AUDITORS REPORT
1 With regard to qualifications contained in the Auditors Report with
respect to excess remuneration paid by the Company to the Managing
Directors, we wish to inform that the same has been approved by Central
Government on 27th May, 2013.
2 With regard to qualifications for updating its records of fixed
assets, we hereby confirm that the Company is in the process of
updating its records for showing full particulars, including
quantitative details and situation of fixed assets.
DIRECTORS'' RESPONSIBILITy STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(a) In preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made 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 March 31, 2013, and of the profits 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 Companies Act, 1956, 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
EMPLOyEE STOCK OPTION SCHEME
Under the Employee Stock Option Scheme of the Company, as based on the
approval of members in the Annual General Meeting held on 30th
September, 2010, and in accordance with the disclosures in compliance
with Clause 12 of the Securities and Exchange Board of India (Employees
Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines,
1999, the same are set out in annexure to the Report.
During the period under review, the Company allotted 1,56, 253 Equity
shares of face value of Rs 10/- each, upon exercise of stock options by
eligible employees/Directors of the Company/subsidiaries under LT Foods
Employees Stock Option Plan 2010.
The Company hereby states that it shall conform to the accounting
policies as per the ESOP guidelines. It further specifies that the
valuation has been done on fair value.
FUTURE OUTLOOK
In line with its sustainable growth agenda, LT Foods is focused on
expanding and strengthening its brand, product and leadership
foundation. The thrust, going forward, shall be on multi-product and
multi- geography expansion, backed by aggressive marketing and
distribution campaigns and networks in both, the domestic and
International markets.
Leveraging its strong supply chain capabilities, as well as global
networks and collaborations, the Company shall continue to work on
developing its Agri food business across the value chain. It shall also
continue to expand its product basket with innovative offerings.
The focus on growing the Basmati Rice business shall remain. The
Company shall further expand its geographic footprints in this
business. While the Middle East will continue to be a key growth
driver, the recently added African market also offers a huge growth
potential, along with Australia and the Far Eastern region. Going
forward, LT Foods plans to further expand its products offerings by
launching its ''Ready-to-Eat'' snacks in all overseas markets.
The Agri-infrastructure business vertical also offers exciting growth
opportunity in view of the huge shortage of grain storage facilities,
and the Company is well positioned to capitalise on it.
CAUTIONARy STATEMENT
Statements in the Directors'' Report and Management Discussion and
Analysis describing the Company''s objectives, expectations or
predictions may be forward looking within the meaning of applicable
securities, law and regulations. The Company assumes no responsibility
to publicly amend, modify or revise forward looking statements, on the
basis of subsequent event or development. Actual results may differ
materially from those expressed in the statement. Important factors
that could influence the Company''s operations affecting selling price
of finished goods, input availability and price, changes in Government
regulations, tax laws, economic development within and outside the
country and other factors such as litigation and industria relations.
APPRECIATION
The Directors wish to place on record their appreciation to employees
at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the
Company to remain at the forefront of the industry despite increased
competition from several existing and new players.
TRADE RELATIONS
The Board desires to place its appreciation for the support and
co-operation that the Company received from suppliers, distributors and
others associated with the Company as its trading partners. The Company
has always looked upon them as partners in its progress and has happily
shared with them the rewards of growth. It will be the Company''s
endeavor to build and nurture strong links with trade, based on
mutuality, respect and co-operation with each other and consistent with
customer interest.
ACKNOWLEDGEMENT
The Directors take this opportunity to thank all investors, clients,
vendors, banks, regulatory and government authorities and stock
exchanges for their continued support. The directors also wish to place
on record their appreciation of the contribution made by the business
partners associated at all levels.
For and on behalf of the Board of Directors
IT Foods Ltd.
Vijay Kumar Arora
Chairman & Managing Director
Place: Gurgaon
Date: 13.08.2013
Mar 31, 2012
The Directors are pleased to present the 22nd Annual Report of your
Company together with the Audited Statement of Accounts for the
financial year ended March 31, 2012.
FINANCIAL PERFORMANCE (CONSOLIDATED)
The consolidated financial highlights of the Company for the year ended
March 31, 2012 are as under:-
(Rs in Crores)
Fiscal 2012
Rs in Crores % of revenue
Income 1,435.50 100%
Expenses - -
Material consumed 701.83 48.9%
Purchase of traded goods 399.47 27.8%
Changes in inventories of finished
goods and traded goods -68.83 -4.8%
Employee benefits 42.58 3.0%
Other expenses 183.22 12.8%
EBITDA 177.23 12.3%
Finance cost 107.48 7.5%
Depreciation & amortisation 33.96 2.4%
Profit before prior period, exceptional
items and tax 35.79 2.5%
Exceptional items & prior period items 35.81 -
Fiscal 2012
Rs in Crores % of revenue
Profit before tax -0.01 -
Tax expense 2.00 0.1%
Profit after tax -2.01 -0.1%
Fiscal 2011
Rs in % of % growth
Crores revenue
Income 1,265.61 100% 13.4%
Expenses 702.75 55.5% -0.1%
Material consumed 219.42 17.3% 82.1%
Changes in inventories of finished 20.20 1.6% -
good and traded goods
Employee benefits 35.26 2.8% 20.8%
Other expenses 168.88 13.3% 8.5%
EBITDA 119.10 9.4% 48.8%
Finance cost 58.74 4.6% 83.0%
Depreciation & amortisation 25.96 2.1% 30.8%
Profit before prior period, exceptional 34.40 2.7% 4.0%
items and tax
Exceptional items & prior period items 0.54 - -
Profit before tax 33.86 - -
Tax expense 8.66 0.7% -
Profit after tax 25.20 2.0% -
FINANCIAL REVIEW FOR THE YEAR
The financial year 2011-12 was unusual in certain ways. Though there
was an improvement in sales and EBITDA by 13.4% and 48.8% respectively
against the previous year, however, due to significant rupee
depreciation against the US Dollar, there was a significant drop in
profit before tax on account of increased finance cost and exchange
losses.
The Company recorded consolidated sales of Rs 1,435.51 Crores against
Rs 1,265.61 Crores in the previous year representing an increase of
13.4% against last year. This increase was primarily on account offs
geographical expansion, increased reach in the consumer market and
expansion in new business verticals. However, despite improved sales
and EBITDA margins, due to the sharp rupee depreciation against US
Dollar, there was an exceptional charge of Rs 35.62 Crores that
impacted the bottom-line.
On the standalone basis, the Company''s revenues grew by 19.47% to reach
Rs 999.85 Crores, from Rs 836.93 Crores in the preceding year. Revenues
from domestic sales stood at Rs 506.72 Crores, an increase by 19.49%,
while revenues from export sales stood at Rs 477.48 Crores recorded an
increase of 15.06%.
The Company''s export turnover spurted by 15% as compared to 6.3% in the
last year. With a plan to enhance the Company''s brand image across the
globe, the Company is stepping into new markets to launch and establish
its flagship brand, ''Daawat''
The Company has always believed in long-term growth and invested in
related business verticals to be ready to seize growth opportunities as
well maintaining sustainable growth in the domestic and international
market.
DIVIDEND
In view of losses incurred by the Company, no dividend has been
proposed for the year ended 31st March, 2012.
CULTURE ALIGNMENT
Propagation of Group Vision and Mission across the location/SBUs
* STRONG EMPLOYEE VALUE PROPOSITION
Increase access to talent and employee commitment
* TALENT MANAGEMENT
Leverage human capital to maximise our growth
PARTICULARS REQUIRED UNDER SECTION 212 OF THE COMPANIES ACT, 1956
A statement pursuant to Section 212 of the Companies Act, 1956,
relating to subsidiary Companies is attached to the Annual Report. In
terms of general exemption granted by the Ministry of Corporate Affairs
vide its Circular No. 2/2011 dated 8th February, 2011, the audited
accounts and Report of Board of Directors and Auditors of the Companies
subsidiaries have not been attached to this Annual Report. The Company
has complied with the requirements as prescribed under the said
circular. The annual accounts of the subsidiary company and the related
detailed information are open for inspection by any shareholder
including the shareholder of subsidiary company at the registered
office of the Company and its subsidiary during the working hours on
all working days.
In accordance with the Accounting Standard, AS-21 issued by the
Institute of Chartered Accountant of India, Consolidated Financial
Statements presented by the Company include the financial information
of all its subsidiaries.
CORPORATE GOVERNANCE
The Company has been in compliance with all the conditions of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement with
Stock Exchange and a certificate from the Auditors to this effect is
made part of the Annual Report.
Committed to the practice of good Corporate Governance, the Board lays
strong emphasis on transparency, accountability and integrity, with its
''Governance Committee'' specifically assigned the task of analysing the
clause with respect to good governance practice.
In terms of such sub clause (v) of Clause 49 of Listing Agreement,
Certificate of CEO/CFO, inter alia, confirming the correctness of the
financial statements, adequacy of the internal control measures and
reporting of matters to the Audit Committee in terms of the said
clause, is also enclosed as a part of said Report.
DIRECTORS
Mr. Jagdish Chandra Sharma and Mr. Ashwani Kumar Arora, Directors of
the Company, are retiring by rotation at the ensuing Annual General
Meeting and, being eligible, offer themselves for re-appointment. The
Company''s Directors recommend their re-appointment.
During the period under review, Mr. Ashwani Kumar Arora and Mr.
Surinder Kumar Arora were re-appointed as Joint Managing Directors
subject to approval of shareholders. The Directors recommend approval
of their re-appointment, the particulars of which are contained in the
Notice of the Annual General Meeting.
The brief resume of the said Directors, as required in terms of Clause
49 of the Listing Agreement with the stock exchanges, is provided in
the annexure to the notice of Annual General Meeting.
The details of the different Committees of the Board of Directors are
provided in the report on Corporate Governance annexed to the annual
report.
AUDITORS
M/s Walker, Chandiok & Company, Chartered Accountants, the Statutory
Auditors'' of the Company, retire at the ensuing Annual General Meeting
and have confirmed their eligibility and willingness to accept the
office of Statutory Auditors, if re-appointed the Audit Committee and
the Board of Directors recommend their re-appointment as statutory
auditors for the financial year 2012-2013 for shareholders'' approval.
Paragraph B (10) of schedule 18 in the notes on accounts referred to in
the Auditors'' Report are self-explanatory and therefore do not call for
any further comments.
DEPOSITS
During the year, the Company did not accept any deposits from the
public within the meaning of Section 58A of the Companies Act, 1956.
EMPLOYEES (DISCLOSURE UNDER SECTION 217(2A) OF THE COMPANIES ACT, 1956)
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of Employees) Rules, 1975:
Name Age (years) Designation Qualification
and Experience
Vijay Kumar Arora 53 Chairman and Graduate
Managing Director
Ashwani Kumar Arora 44 Joint Managing Graduate
Director
Surinder Kumar 49 Joint Managing Under Graduate
Arora Director
Vivek Chandra 55 CEO- Foods MBA
Name Gross Date of Particulars
Remuneration Commencement of last
of employment employment
Vijay Kumar Arora 78,00,000/- 29.09.2004 N.A
Ashwani Kumar Arora 59,56,400/- 22.06.2007 N.A
Surinder Kumar Arora 60,76,000/- 22.06.2007 N.A
Vivek Chandra 80,00,000/- 24.11.2010 Associated
Birtish Foods
a. Employed throughout the year under review and were in receipt of
remuneration for the year which, in aggregate were not less than Rs
60,00,000/- per annum
b. Employed for a part of the year under review and were in receipt of
remuneration for any part of the financial year at a rate in aggregate,
were not less than Rs 5,00,000/- p. m. : NIL
Mr. Vijay Kumar Arora, Mr. Ashwani Kumar Arora and Mr. Surinder Kumar
Arora are relatives within the meaning of Section 6 of the Companies
Act, 1956.
RESEARCH & DEVELOPMENT
In line with its growth objectives, the Company set out its Research
and Development priorities to develop new products that deliver health
and taste and, at the same time, provide ease of preparation, specially
for those who are new to the kitchen. The Company''s entire MYMY brand
of snacks food products were improved to deliver greater believability
of healthy snacking and were given a more attractive eye appeal.
A full line of value-added rice is ready to go to the market in the
coming year. These new products will add value to the Company''s base
rice and deliver excitement on the plate. Easy and quick preparation in
the kitchen is the basis for these new products.
R&D made a concerted effort, along with Plant QA Departments, to
increase product safety and quality awareness at all the manufacturing
facilities. Product safety will play greater importance in all the
markets and without which future sales will not be sustainable.
Food Research and Development continues to be focused on providing food
options with the combination of superior aroma and taste, with specific
enhancement in health and nutritional benefits to consumers. A series
of new and superior products are under development helped by the
Company''s formidable R&D in this domain. Overall, R&D continues to
occupy the centre stage in the scoping and conduct of business.
PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE AND OUTGO
Information as required under Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 are set out hereunder:
CONSERVATION OF ENERGY
Energy conservation is a priority area for the Company. The Company''s
continued efforts to reduce and optimise the use of energy consumption
have shown positive results. Better controls are planned to achieve
further reduction in energy consumption. All the new manufacturing
facilities of the Company are equipped with hi-tech energy monitoring
and conservation systems to monitor usage.
Power & Fuel Consumption (BHL Plant including Kamaspur)
Particulars 2011-12 2010-11
Electricity - -
Through Purchases - -
Units 12674360 11742820
Total Amount (Rs) 71,028,965 60,026,608
Rate/Unit (Rs) 5.60 5.11
Through Diesel Generator - -
Units generated 875741 1786579
Total Amount (Rs) 10,822,556 18,120,021
Cost/Unit (Rs) 12.36 10.14
Power & Fuel Consumption (Varpal Plant)
Particulars 2011-12 2010-11
Electricity - -
Through Purchases - -
Units 3589430 1833068
Total Amount (Rs) 21,000,347 11,479,760
Rate/Unit (Rs) 5.85 6.26
Through Gen Set - -
Units generated 72,400 34,800
Total Amount (Rs) 869,078 520,261
Cost/Unit (Rs) 12.00 14.95
TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:
1. During the year, the Company made strides in improving its overall
infrastructure at its rice milling unit by adding new rice silos, which
were in addition to the paddy silos it already had in place. The
Company is also adding new packaging lines with new re-closable small
packs for the mainstream stores across the world.
2. The Company has gained the benefits derived as a result of the above
said efforts, e.g. products development, product improvement, cost
reduction, automation, etc.
The said efforts also helped in satisfying consumer needs as well as
business requirements of introducing new and consistent products with
better quality.
IMPORTED TECHNOLOGY
The Company is importing machinery for the projects from time to time.
Details of Foreign Exchange Transactions
(Rs in lacs)
Standalone Amount
Important CIF Basis
Packing Material 7.44
Spare Parts & Consumables 14.08
Capital Goods 225.01
Total 246.53
Expense in Foreign Exchange 3108.15
Earning in Foreign Exchange 45779.70
DIRECTORS'' RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(a) in preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
(b) the Directors had selected such accounting policies and applied
them consistently and made judgements 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 March 31, 2012 and of the profits 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 Companies Act, 1956 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.
EMPLOYEES STOCK OPTION SCHEME
Under the Employee Stock Option Scheme of the Company as based on the
approval of members in the Annual General Meeting held on 30th
September, 2010 and in accordance with the disclosures in compliance
with clause 12 of the Securities and Exchange Board of India (Employees
Stock Option Scheme and Employees Stock Purchase Scheme) Guidelines,
1999, the same are set out in annexure to the Report.
The Company hereby states that it shall conform to the accounting
policies as per the ESOP guidelines. It further specifies that the
valuation has been done on fair value.
FUTURE OUTLOOK
A combination of positive developments and factors indicate a positive
outlook for the Company''s businesses, going forward. The most notable
among these is the Government''s move to allow basmati rice to be
exported without any minimum export price. This will help basmati rice
exporters by improving the price competitiveness of Indian firms in
overseas markets.
The development comes at a time when the Chinese Government has decided
to import basmati from India - a move that is expected to fetch higher
premium for Indian basmati. The growing foreign demand and China''s
interest in importing from India is expected to trigger competition in
the industry and the Company anticipates a huge surge in price
realisation as a result.
Overall, demand for Indian basmati has been fairly good in global
markets, particularly in Iran, Iraq, Saudi Arabia, Europe and the US,
despite unfavourable global economic conditions. With an estimated
annual production at 7.5 million tonnes, India has a 70% share in the
global basmati export market. Considering that basmati rice production
volumes remain almost stagnant and chances of inclusion of the
non-basmati variety of higher quality are minimal, the growing foreign
demand is expected to prove beneficial for exporters.
Going forward, the Company shall continue to focus on creating value
across the agri food chain through several initiatives, which include:
- Diversifying the business portfolio with value-additions to the
product range
- Geographical expansion
- Building the brand in existing and new markets
- Expanding business through the organic as well as the inorganic route
- Exploring newer synergistic businesses - Strengthening distribution
reach-Introducing healthy ready-to-eat snacks - Enriching the product
basket
The Company expects these focused initiatives to provide strong impetus
for long-term growth and value creation.
CAUTIONARY STATEMENT
Statement in the Management Discussion and Analysis describing the
Company''s objectives, expectations or predictions may be forward
looking within the meaning of applicable securities, law and
regulations. The Company assumes no responsibility to publicly amend,
modify or revise forward looking statements, on the basis of subsequent
event or development. Actual results may differ materially from those
expressed in the statement. Important factors that could influence the
Company''s operations affecting selling price of finished goods, input
availability and price, changes in Government regulations, tax laws,
economic development within and outside the country and other factors
such as litigation and industrial relations.
ACKNOWLEDGEMENT
The Directors wish to place on record their appreciation to employees
at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the
Company to remain at the forefront of the industry despite increased
competition from several existing and new players.
The Directors also take this opportunity to thank all investors,
clients, vendors, bankers, regulatory and Government authorities and
stock exchanges for their continued support. The Directors also wish
to place on record their appreciation of the contribution made by the
business partners associated at all levels.
For and on behalf of the Board of Directors
LT Foods Limited
Place: Gurgaon Vijay Kumar Arora
Date: 13.08.2012 Chairman & Managing Director
Mar 31, 2011
Dear Members,
The Directors are pleased to present the 21st Annual Report of your
Company together with the Audited Statement of Accounts for the
financial year ended 31 st March 2011 (FY 11).
FINANCIAL RESULTS
The Consolidated financial highlights of the Company for FYII are as
follows:
( Rs. in lacs)
Particulars FY 11 FY 10
Income 1,28,138.01 1,08,449.44
Gross Profit 25,758.18 26,007.24
Depreciation 2,595.81 2,374.41
Profit before Tax 3,440.36 4,170.45
Taxation 866.98 1,072.63
Net Profit for the Year 2,519.52 3,315.46
Proposed Dividend on Equity Shares 303.60 462.47
Tax on Proposed Dividend 49.25 76.81
Transfer to General Reserves 161.80 275.10
Dividend Tax for Earlier Years 0 0
Balance Carried Forward 1,760.96 1,868.78
Key Ratios
FY 11 FY 10
Earning Per Share {Rs.) 8.71 11.28
Dividend Per Share {Rs. ) 1.00 1.50
Return on Tangible Net Worth (%) 9.94% 13.90%
FINANCIAL REVIEW FORTHEYEAR
During the year under review, the Company achieved a consolidated
turnover of Rs.128,138.01 lacs and PBDIT of Rs.3,440.36 lacs, profit
after tax of Rs.2,275.61 lacs. Earning per share for the year stood at
Rs.8.71.
The Company continued to diversify its geographic balance of business
in domestic as well as export markets. Your Company has also been
exploring new business avenues in related agricultural domains.
The detailed analysis of the Company''s operations has been provided in
the Management Discussion Analysis Report, which forms a part of this
report.
DIVIDEND
The Board of Directors has recommended a final dividend of 10% for FY
11, subject to the approval of shareholders at the ensuing Annual
General Meeting. This will translate to a total dividend payout of Rs.
287.13 lacs including dividend distribution tax. Your Company''s
subsidiary, Daawat Foods Limited has also recommended a final dividend
of 7.50% for FY 11, translating to a total dividend payout of Rs.166.98
lacs including dividend distribution tax.
TRANSFERTO RESERVES
Out of the amount available for appropriation, your Directors propose
to transfer Rs.161.80 to General Reserves and retain Rs. 1,760.96 lacs
in the Profit and Loss account.
OVERVIEW
FY 11 marked a strong resurgence in volume and demand growth.
The Food Processing Industry in India has been growing steadily,
well-supported by various Government initiatives. The growth is also
aided by the social impact of country''s economic growth, technological
advancement in the agrarian and food processing sectors, increase in
farm output, etc. Indian consumers are fast evolving with increased
willingness to pay for branded and value added products.
The annual output of food market in India has been around US $155
billions over recent years and the same is expected to reach about $
344 billions by the year 2025 at an annual growth rate of around4.1%.
Country''s GDP growth, likely to remain in the range of 8-9% over medium
term, augurs well for this projected growth of food market in India.
BUSINESS
LT Foods has emerged as a leading food company with a robust brand
portfolio that includes vibrant brands like ''Daawat'',''Royal'' and''My My''.
A significant portion of about 70% of rice sales is done under
Company''s own brands. The Company continues to expand its distribution
network and diversify its brand of ferings.
It has successfully forayed into ready-to-eat snacks segment with the
launch of rice based roasted snacks under ''My My'' brand. Production
capability for snacks is being ramped up, in the light of growing
demand.
The Company is on course to realize its vision of transforming into a
value added agribusiness company. It is setting up a Bio-mass based
power plant in Mandideep, Bhopal with an idea to productively utilize
the rice husk generated during milling. The Company has recently
developed 50,000 MT of foodgrain storage capacity silos in Amritsar
under Public Private Partnership model with Pun grain.
The Company will continue to focus on channel initiatives, synergizing
all levers, including distribution, trade marketing, market activation
and advertising. It will continue to build the edge through wide and
deep reach, service quality and customer in sight. Your Directors
believe that sustainable investments by way of technology, innovations,
consumer communication and continued focuson market developments will
benefit the business in creating long term value for all the stake
holders.
DIVERSIFICATION AND EXPANSION
The Company continues to evaluate emerging opportunities in its
existing as well as other related sectors. LT Foods constantly seeks to
achieve higher level of expansion and diversification as a means to
strengthen its competitive advantage and enhance margins.
With a belief that growth avenues in agribusiness aren''t necessarily
confined to the activities within the agricultural fields, the company
is evaluating and enacting broader measures of agricultural capital
formation. It has embarked upon this through its wholly owned
subsidiary Raghuvesh Foods and Infrastructure Limited.
Your Company is venturing into clean power generation through Its step
down subsidiary, Raghuvesh Power Projects Limited.
Your Company has five manufacturing plants two in Haryana, one at
Mandideep, Madhya Pradesh and two in Punjab - in Varpal and in
Bhikiwind. The Varpal plant, set up in the previous year has been
operational during the year. The Company has also added a packaging
plant at Houston in USA during the year. The Company commandsa combined
milling capacity of 65 MT/hour.
PROSPECTS
The Indian food industry is poised to a healthy and steady growth. The
health, wellness, functional food and beverages market continue to grow
at CAGR of 33% in India. The major growth drivers for the industry
include the increasing spend on processed and convenience food, growing
food retailing, growth in food processing exports and government''s
support to the sector. The food retail business in India is growing at
annual rate of 30%. Food retailing formats of all kind are growing in
India - from neighbor hood stores to super markets to cash and carry
stores.
LT Foods is evaluating opportunities in the untapped arenas of the food
industry. The Company has embarked upon new products like Fast cooking
Brown Rice, Rice cakes, Rice chips. Your Company is also exploring
other segments in the food industry and line extensions. Riding on the
strength of our R&D, marketing and manufacturing process, the Company
is successfully catering to ever evolving and myriad needs of
consumers. Your Company''s success in marketing and distribution of the
commodity and staple market is encouraging us to explore opportunities
in other value added products. Your Company strives to emerge as an
integrated player with strong capabilities in food processing sector
coupled with equally strong backward and forward linkages. Your Company
is making pioneering investment in developing infrastructure facility.
The Company, with its vision of Customer delight through value added
agri business'' has marked a strong presence across the food value chain
and continues to demonstrate an intense passion for excellence and
constant innovation.
FINANCE
Courtesy the capital intensive nature of its business coupled with its
continuous expansion and diversification programmes, the Company
continues to need working capital and endeavors to procure finance at a
competitive rate. The Company has obtained loans from banks at
competitive rates. The Company has the policy to hedge funds for the
pending orders in hand.
DOMESTIC OPERATIONS
The Company continued to entice and engage consumers through its
product mix, innovative packaging, effective communication and
aggressive marketing. It took a 360 degree approach in expanding
distribution besides improving systems and processes. The Company
expanded its distribution network aggressively and placed its brands
pan over India with the help of vast and strong distribution network.
Daawat introduced'' Usage Based Segmentation'' by launching its specialty
range including Rice for Biryani, Pulav and Rice with traditional
aroma. Food Service segment, which contributes 15% to company''s volume,
has been consolidated with formation of separate verticals serviced by
dedicated teams. Addressing the need of Institutions, specific range
under Daawat Chef''s Secretz brand was launched during the year.
EXPORTS
Your Company''s export tumover grew by 6.3%duringtheyear. The Company is
strengthening its distribution in Middle East, especially in Iraq,
Kuwait, Yemen and Saudi Arabia. The launch of Daawat Extra Long Grain
has been well received in the export markets. The new vibrant packaging
that all the leading brands have adorned during the year has worked
well with the customers. In order to further strengthen its export
business, the Company aims to reduce fixed costs, improve, increase
business volumes, access new markets for existing as well as new
products and consolidate its international reputation.
QUALITY
At LT Foods/Quality in every grain'' has been our mantra for success for
long.
The Company remains committed to recognize the needs of customers and
respond with superior quality, service and responsiveness.
Your Company has made concerted efforts to upgrade the operating
systems to measure up to the International Standards and obtained
numerous accreditations on Food Quality and Safety systems.
Bahalgarh plant is certified for ISO 9001:2008, SQF (Safe Quality
Food), BRC: 2008, ISOI 4000:2004, OU (kosher) Organic division is
certified for ISO 22000:2005, NOP, NPOP and EEC837:2007.
Rice Plant at Bhopal also has ISO 22000:2005 certification while Food
plant in the same complex has recently acquired FSSC 22000:2010 - (Food
Safety System Standard - Inclusive of ISO 22000 & PAS 220)
certification. Food plant at Bhopal is the first plant to have been
certified for this standard in India.
All the Food Safety standards are based on HACCP and GMR
SUBSIDIARIES
The Company has nine Indian and five overseas subsidiary companies.
During the year under review, the Company has forayed into the business
of development of necessary infrastructure for the food industry
through its wholly owned subsidiary, Raghuvesh Foods and Infrastructure
Limited, which was incorporated during the year.
The Company is poised to venture in the power sector through a step
down subsidiary, Raghuvesh Power Projects Limited, which was
incorporated as a wholly owned subsidiary of Daawat Foods Limited.
During the year, the Company has also incorporated a foreign subsidiary
named as LT Foods USA LLC.
Daawat Foods Limited (DFL), the majority owned subsidiary of the
Company has introduced Snacks which is a blend of 15 ingredients
including instant/puffed rice/rice flakes flavored with mixture of
Salt, Sugar, Turmeric, Chilli Powder etc., in the market during the
year. The Company has introduced rice cakes/chips in the brand name
"My-My" (My Health My Taste) in FY 11. The products are roasted and not
fried with fat content as low as 7 per cent. Being rice based, they are
easy to digest.
DFL has set up its own Flour Line at Mandideep in order to support SDC
Foods India Ltd. in supplying Wheat Flour to Modern Retail stores like
Reliance Fresh, Big Bazar, Sab Ka Bazaretc.
Nature Bio-Foods Ltd (NBFL) has successfully completed its 5th running
Year of organic food business on 31 st March, 2011. Even as the
after-effects of Economic depression are weighing heavily on high
ticket organic products across the major organic markets, NBFL managed
a growth of 8% in its top line which reached Rs.203.80 million. Besides
Organic Rice - basmati and non-basmati, NBFL is consistently growing
its business in Organic Sesame and rice based value added products like
Rice Flour. It is keenly looking into the possibilities of exporting
organic pulses like Lentils, Chickpeas.
SDC Foods India Limited is also growing in key markets and is capturing
potential avenues in staples through its subsidiaries, Expo Services
Private Limited and Vedic Spices Private Limited.
LT International Limited, a subsidiary of the Company is engaged in
trading of various merchandise and the Company is exploring various
opportunities for growth.
Kushalnc, a fellow subsidiary of your Company and wholly owned
subsidiary of LTO NA, has since its acquisition, rapidly evolved from
being a distributor of rice to becoming a full-fledged "farm-to-fork"
enterprise with comprehensive traceability responsibility. The
company''s flagship brand, ROYAL, along with a myriad of product
offerings- Basmati and Jasmine rice, Couscous, Arborio rice, Grapeseed
oil, Dried Mangoesjea, Specialty Rices, etc. have driven substantial
growth during very challenging US economic times characterized by price
driven competition. Kusha''s diverse channel strategy balanced sales
performance among Clubs as well as Retail, Ethnic Markets, Food Service
and Private Label. By expanding its product portfolio and distribution
across mainstream and deeper into ethnic markets, Kusha is aggressively
pursuing new avenues. The introduction of jar packing in Retail, Ethnic
and Club stores along with the launch of its new brand extension -Royal
Chef''s Secret - are focussed efforts to expand Kusha''s market presence.
Nice International FZE Dubai, a fellow subsidiary of the Company and
wholly owned subsidiary of Sona Global Limited, caters to the market of
Middle East and Saudi countries which have a great potential for
parboiled rice.
CHANGE OF REGISTERED OFFICE
The Registered office of the Company has shifted from A-21, Green park,
Aurobindo Marg, New Delhi - 110016 to Unit No. 134, Rectangle - I,
Saket District Centre, New Delhi - 110017 w. e. f 1 st October, 2010 in
accordance with the provisions of law.
PARTICULARS REQUIRED UNDER SECTION 212 OF THE COMPANIES ACT, 1956.
As per section 212 of the Companies Act, 1956, the Company is required
to attach the Annual report of the subsidiaries to our Annual Report.
The Ministry of Corporate Affairs, Government of India vide its
circular No. 2/2011 dated 8th February, 2011 has provided an exemption
to companies from complying with Section 212, subject to the
fulfillment of the conditions prescribed in the said Circular. Claiming
the said exemption, your Company has obtained the consent of its Board
of Directors for not attaching the balance sheet of its subsidiary. The
Annual Accounts of the Subsidiary Company and the related detailed
information are open for inspection by any shareholder including the
shareholder of subsidiary company at the registered office of the
Company and its subsidiary during the working hours on all working
days.
Accordingly, the Annual report 2010-11 does not contain the financial
statement of our subsidiaries. A statement of summarized financials of
all subsidiaries of your Company, pursuant to Section 212(8) of the
Companies Act, 1956 forms part of this report. Any further information
in respect of the annual report and the financial statements of the
subsidiary companies of your Company will be made available to the
members on request. In accordance with the Accounting Standard, AS-21
issued by the Institute of Chartered Accountant of India, Consolidated
Financial Statements presented by your Company in clued the financial
information of all its subsidiaries.
CORPORATE GOVERNANCE
Your Company has been in compliance with all the conditions of
Corporate Governance as stipulated in Clause 49 of the Listing
Agreement with Stock Exchange and a certificate from the Auditors to
this effect is made part of the Annual Report.
In its practice of good Corporate Governance over the year, the Board
lays strong emphasis on transparency, accountability and integrity with
its ''Governance Committee'' to specifically analyze the clause with
respect to good governance practice.
In terms of such sub clause (v) of Clause 49 of Listing Agreement,
Certificate of CEO/CFO, inter alias, confirming the correctness of the
financial statements, adequacy of the internal control measures and
reporting of matters to the Audit Committee in terms of the said
clause, is also enclosed as a part of the said Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Annual Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange is presented as a separate section forming part of this Annual
Report.
DIRECTORS
Mrs. Radha Singh and Mr Surinder Kumar Arora, Directors of your Company
are retiring by rotation at the ensuing Annual General Meeting and
being eligible offer themselves for re-appointment. Your Directors
recommend their re-appointment.
During the period under review Mr. Alok Sinha, was appointed as an
Additional Director of the Company on 15.11.2010. He is an Independent
Director on the Board of the Company. The Company has received a Notice
from a Member under section 257 of the Companies Act, 1956, signifying
his intention to propose Mr. Alok Sinha for the office of Director.
Your Directors recommend approval of his appointment, the particulars
of which are contained in the Notice of the Annual General Meeting.
Mr. Ashok Kumar Arora, Joint Managing Director of your Company resigned
as Joint Managing Director and Director of the Company on 31.03.2011.
The Board of Directors places on record their sincerest appreciation
for the contribution made by Mr. Ashok Ku mar Arora as member of the
Board during his tenure.
The brief resume of the said directors as required in terms of Clause
49 of the Listing Agreement with the stock exchanges, is provided As an
annexure to the notice of Annual General Meeting.
The details of the different Committees of the Board of Directors are
provided in the report on Corporate Governance annexed to the annual
report.
AUDITORS
M/s Walker and Chandiok, International Accountants & Business Advisers,
the Statutory Auditors of the Company retire at the ensuing Annual
General Meeting and has confirmed their eligibility and willingness to
accept the office of Statutory Auditors if reappointed. The Audit
Committee and the Board of Directors recommend their reappointment as
statutory auditors for the financial year 2011-2012 for share holders
approval.
Paragraph B (10) of schedule 18 in the notes on accounts referred to in
the Auditors Report are self-explanatory and therefore do not call for
any further comments.
DEPOSITS
During the year, the Company did not accept any deposits from the
public within the meaning of Section 58A of the Companies Act, 1956.
HUMAN RESOURCE DEVELOPMENT
The Company engaged E&Y to build best practices in HR. Company''s HR
team had ensured companywide participation of employees in developing
and adopting the core values of the organization. These values are
Ownership, Business Ethics, Passion for Excellence, Innvoation and
Customer Centricity.
The Company plans to hire talent at top B-schools. It has initiated
special trainings to build the team of management students to come up
with new ideas and development methods so as to build a strong career
graph.
The IT and HR teams have jointly launched the intranet facility for
employees so as to facilitate staff to share the knowledge and discuss
within the team through the online facility. This helps in building a
culture of openness and transparency within the organisation. The site
also helps employees to track their personal records and leave records.
It also updates them on Company information and the new trainings. The
principle behind launch of this intranet facility was Open Door Policy
structure and a flexibility on people related matters.
HR team did organize several training activities and celebrations
during the year.
In 2010, LT Foods Limited was awarded for "BEST PLACETO WORK'' by
Haryana Government.
EMPLOYEES (Disclosure under section 217(2A) of the Companies Act, 1956)
Information as per Section 217(2A) of the Companies Act, 1956, read
with Companies (Particulars of employees) Rules, 1975
Name Age Designation Qualifica
-tion and Gross Date of
Commencement Partic
-ulars
of
(Years) Experience Remunera
-tion of
employment last
employ
-ment
VijayArora 53 Chairman and Graduate 78,09,360 29.09.2004 N.A.
Managing
Director (33 years)
Ashwani
Kumar Arora 44 Joint
Managing Graduate 60,09,360 22.06.2007 N.A.
Director (25 years)
Surinder
Kumar Arora 49 Joint
Managing Under
Graduate 69,06,360 22.06.2007 N.A.
Director (29 years)
Employed throughout the year under review and were in receipt of
remuneration for the year which, in aggregate was not less than Rs.
60,00,000/- per annum
a. Employed for a part of the year under review and were in receipt of
remuneration for any part of the financial year at a rate in aggregate,
were not less than Rs. 5,00,000/- p. m.:
Name Age Designation Qualifica
-tion and Gross Date of
Commencement Partic
-ulars
of
(Years) Experience Remunera
-tion of
employment last
employ
-ment
VivekChandra 54 CEO-Foods MBA 28,26,000 23.10.2010 Associa
-ted
British
(30 years) Foods
Mr. Vijay Arora, Mr. Ashwani Kumar Arora and Mr. Surinder Kumar Arora
are relatives within the meaning of Section 6 of the Companies Act,
1956.
RESEARCH & DEVELOPMENT
Innovate, Innovate, and Innovate....that''s the mantra to improve
current and future profits. Process and Product development activities
gave birth to mouth-watering rice based roasted snacks.
Development work was also completed on Fast Cook Brown Rice with 1-year
shelf life and a cook time of just 10 minutes. This product is
currently exported to USA markets, but will soon be launched in India.
Whole grain is Heart friendly product and with its Gl being lower than
the milled rice, it is better for diabetic consumers.
Several new products based on Puffed Extruded Pellets are being
developed for export markets. These products will cover needs for all
ages of consumers, i.e. from infants, to toddlers, to young children
and also adults. Flavor expertise is being developed for both sweet and
savoury snacks. Tropical fruit flavors along with masalas, spices and
herbs allow for many innovative snack flavors. Taste, health, and
convenience will remain our development platforms and more products
would be added in the product basket of Company very shortly.
PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE AND OUTGO
Information as required under Section 217(1 )(e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988are set out hereunder:
Conservation of energy
Energy conservation is a priority area for the Company. Company''s
continuous efforts has reduced and optimized the use of energy
consumption which has shown positive results. Better controls are
planned to achieve further reduction in energy consumption. All the new
manufacturing facilities of the Company are equipped with hi-tech
energy monitoring and conservation systems to monitor usage.
Power & Fuel Consumption (BHL Plant)
Particulars 2010-11 2009-10
Electricity Through Purchases
Units 10175220 11830668
Total Amount { Rs.) 51563135 50422932
Rate /Unit { Rs.) 5.07 4.26
Through Diesel Generator
Units generated 1786579 2094754
Total Amount { Rs.) 18121401 20176324
Cost /Unit { Rs.) 10.14 9.63
Power & Fuel Consumption (Varpal Plant)
Particulars 2010-11 2009-10
Electricity Through Purchases
Units Purchases 889420 1980059
Total Amount { Rs.) 5714660 11265294
Rate /Unit { Rs.) 6.43 5.69
Electricity Through Gen Set
Units Generated 34800 137000
Total Amount { Rs.) 520261 1301197
Cost /Unit { Rs.) 14.95 9.50
Technology absorption, adaptation and innovation:
1. During the year, we have made strides in improving our over all
infrastructure at the rice milling unit by adding new rice silos, this
is in addition to the paddy silos we have in place, we are adding new
packaging lines with new re-closable small packs for the main streams
to resacross the world.
2. Company has derived the benefits derived as a result of the above
said efforts, e.g. product development, product improvement,
cost reduction, automation etc.
The said efforts also helped in satisfying consumer needs as well as
business requirements of introducing new and consistent products with
better quality
Imported technology
The Company is importing machinery for the projects time to time.
Foreign exchanged used and earned
Details of Foreign Exchange Transactions
( Rs. In lacs)
Consolidated Amount Import on CIF Basis
Packing Material 13.88
Spare Parts & Consumables 42.00
Capital Goods 1532.15
Total 1588.03
Expense in Foreign Exchange
Legal Fee 2.86
Interests Other Charges to Banks 1081.56
Others 119.70
Total 1204.12
Earning in Foreign Exchange
FOB Value of Export
Rice 33517.06
Soyabean 7039.29
Total (40557.05)
DIRECTORS RESPOSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors
confirm that:
(a) In preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made 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 March 31,2011 and of the profits 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 Companies Act, 1956 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.
CORPORATE SOCIAL RESPONSIBILITY
The Company believes that an organization''s true worth lies beyond its
core business domains and is best reflected by the service it renders
to the community and the society.
Your Company has taken steps to leverage the economic multiplier
potential of the agri sector. It is engaged in leveraging technology to
help the farmers to produce better quality paddy, and thereby trying to
yield a transformational impact on Indian Rural economy. The Company
has pioneered in the field of sustainable agriculture through
Environment Friendly Sustainable Agriculture Production (Organic
Production). The Company has also undertaken various women empowerment
programmes, has provided economic assistance to the farming community,
has provided extension services to farmers by educating farming
communities in various sustainable farming technologies and has also
taken various measures for development of tribal farming community.
The Company is on the growth trajectory, and the growth to be
responsible, should go beyond numbers, to do good to the society,
create a better world. The Company is quite enthusiasticin creating
environment friendly zone wherever it operates.
EMPLOYEES STOCK OPTION SCHEME
With an aim of rewarding permanent employees of the Company and those
of our subsidiary companies, a scheme was formulated in accordance with
the ESOP Guidelines, 1999 to offer securities to the employees
(including employees of the subsidiary companies) under the "LT Foods
Employee Stock Option Plan - 2010" with approval of members in the
Annual General Meeting held on 30th September, 2010. The disclosure in
compliance with clause 12 of the Securities and exchange Board of India
(Employees Stock Option Scheme and Employees Stock Purchase Scheme)
Guidelines, 1999are set out in annexure to the Report.
APPRECIATION
Your Directors wish to place on record their appreciation to employees
at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the
Company to remain at the forefront of the industry despite increased
competition from several existing and new players.
TRADE RELATIONS
The Board desires to place its appreciation for the support and co-
operation that the Company received from suppliers, distributors and
other associated with the Company as its trading partners. The Company
has always looked upon them as partners in its progress and has happily
shared with them the rewards of growth. It will be Company''s endeavor
to build and nurture strong links with trade based on mutuality,
respect and co-operation with each other and consistent with customer
interest.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all investors, clients,
vendors, banks, regulatory and government authorities and stock
exchanges for their continued support. Your Directors also wish to
place on record the irappreciation of the Contribution made by our
business partners/ associated at all levels.
For and on behalf of the Board of Directors
LT Foods Limited
Place : Gurgaon Vijay Arora
Date : 11.08.2011 Chairman & Managing Director
Mar 31, 2010
The Directors are pleased to present the 20th Annual Report of your
Company together with the Audited Statement of Accounts for the
Financial Year ended on March 31, 2010.
FINANCIAL RESULTS
The performance highlights of the Company for the year ended on March
31, 2010 are as follows:
( Rs. in Lacs )
Particulars 2009-10 2008-09
Sales and Other Income 1,07,380.02 1,06,576.94
Profit before Tax 4,177.51 3,648.42
Tax on Profit 862.05 628.05
Profit after Tax 3,315.46 3,020.37
Dividend* 462.47 222.70
Tax on Proposed Dividend 76.81 57.35
Transfer to General Reserves 275.10 305.11
- Proposed, subject to the approval of shareholders in the ensuing
Annual General Meeting
2009-10 2008-09
Earning per Share (Rs.) 11.28 13.56
Dividend per Share (Rs.) 1.50 1.00
FINANCIAL REVIEW FOR THE YEAR
Coming on the back of the global meltdown and financial crisis of the
previous year, financial year 2009-10 proved to be a challenging year.
During the year under review, the Company achieved Sales Turnover of
Rs. 1,05,288.16 lacs and PBDIT of Rs 1,24,85.77 lacs. The CompanyÂs
Profit after Tax was Rs. 3,315.46 lacs and Earning per Share stood at
Rs. 11.28.
The details of the CompanyÂs operations have been provided separately
in the Management Discussion Analysis Report, which forms part of this
report.
Audited Consolidated Financial Statement for the year ended on March
31, 2010 also forms part of this report.
DIVIDEND
Your Company is pursuing sustainable growth through numerous expansions
& diversifications in the food sector, which requires the Company to
make qualitative investments on continuing basis. At the same time, it
is responsive to the dividend expectation of its shareholders. Your
Board of Directors, at their meeting held on May 26, 2010 have
recommended a final dividend of 15% (Rs 1.50 per Share of Rs. 10 each)
for the financial year 2009-10, which is subject to the approval of
shareholders at the ensuing Annual General Meeting. The dividend payout
by the Company, when approved, will total Rs.391.78 lacs including the
dividend distribution tax of Rs. 37.04 lacs and DFL also has recommended
a final dividend of 12.5% ( Rs. 1.25 per share of Rs. 10 each) for the year
2009-10. The dividend payout by DFL would be Rs. 279.21 lacs inclusive
of Dividend Tax.
TRANSFER TO RESERVES
Subsequently an amount of Rs.275.10 lacs is proposed to be transferred
to the General Reserves.
OVERVIEW
Agriculture together with the Food Processing Sector forms an important
constituent of the Indian Economy and holds key to the overall GDP
growth agenda of India. It assumes greater significance for its ability
to fillip the inclusive growth aspirations of a country with a billion
plus people, where it employs more than 50% of countryÂs workforce.
BUSINESS OVERVIEW
Amidst difficult macro-economic environment, your Company managed to
achieve a modest growth in the domestic market during the year. More
importantly, from a long term perspective, the Company stayed focused
on overcoming two key challenges of improving operational efficiency
and cost rationalisation. A slew of initiatives were rolled out during
the year to improve productivity through effective application of
technology towards improving the manufacturing process and leveraging
the sequential cost and quality advantages. The Company undertook
proactive initiatives to create an efficient and robust supply chain.
As a result, our supply chain got revamped and we achieved noteworthy
cost savings. Methodical approach to forecasting demand improved our
capability of procuring the requisite raw materials on time, which
brings its inherent cost advantages.
The CompanyÂs healthy growth over recent years shall be attributed to a
set of key factors like a focused business strategy, visionary
entrepreneurial leadership, best available advisors and consultants,
highly motivated and committed talent pool and best-in-class practices
across technology, processes and human capital management.
Our flagship brand, ÂDaawat has increased its presence across the
length and breadth of the Country. Numerous new channel partners were
enrolled and existing ones were made more efficient. The Company is
currently working on revamping its identity and introducing new
packaging for ts key brands.
The Company will continue to focus on channel initiatives, synergising
all levers, including distribution, trade marketing, market activation
and advertising. It will continue to sharpen its edge through service,
quality and customer insight.
CREDIT RATING
ICRA has reaffirmed the LBBB- (pronounced as triple B minus) rating to
0.5 billion term loans and Rs. 4.50 billion fund based facilities of
the Company. The outlook on the rating remains stable. ICRA has also
reaffirmed the "A3" (pronounced as A three) rating to Rs. 0.5 billion
non fund based facilities of the Company.
The above reaffirmations takes into account our experienced management,
proven track-record in basmati rice business and long standing
relationships with clients in domestic and export markets.
BUSINESS OUTLOOK
The GovernmentÂs continued thrust on Food Processing Sector and
development of its requisite infrastructure will continue propelling
the sector on healthy growth over long term. Your Company is geared up
to participate in the growth of this sector and leverage its pioneering
leadership towards greater value creation from the sector.
The Companys core strategy will be to strengthen current brands
through product design, delivery and introduction of new and
differentiated products. Its focus on understanding and responding to
consumers needs and expectations shall drive increased takeoff of its
products. CompanyÂs ensuing line of healthy snacks and other products
shall further strengthen its prospects, going forward.
Together with our subsidiary companies, we are embarking on new food
products like Fast Cooking Brown Rice, Rice Cakes, Rice Chips and
several rice based snacks. Aided by a series of such initiatives and
led by a farsighted and forward planning management team, the Company
will continue exploring and implementing value-creating steps to
enhance its market position. Your Company is also exploring other
segments in the food industry in addition to contemplating line
extensions in order to pursue sustainable growth.
During the year under review, the Company has bagged the ÂWheat Silos
Project on Build-Own-Operate (BOO) basis for a period of 30 years from
Punjab State Grains Procurement Corporation Limited of Government of
Punjab for storage and handling of 50,000 MT of wheat.
FINANCE
Being in a working capital intensive business, the Company avails large
working capital facilities from a consortium of banks. The Company has
successfully procured finance for its operations at competitive rates
on the strength of its excellent track record, and financial strength
and discipline. As a policy, the Company hedges forex risk for the
pending export orders in hand.
DOMESTIC OPERATIONS
As a part of our never ending endeavor to improve our systems and
processes, the Company decided to bring in CountryÂs leading business
process consultants to tread the path of success in domestic
operations. The systems and approach suggested by them has resulted in
improved operations and reduced cost of operations.
EXPORTS
As a fallout of recent slowdown, the business scenario in overseas
markets remained highly competitive and challenging during the year.
We opted to consolidate on the gains made in the earlier years and
relook at enhancing efficiency, reducing the cost of logistics,
exploring virgin markets and expanding our customer-base during the
year.
QUALITY
Quality has long been our effective differentiator in domestic as well
as overseas markets. We remain committed to respond to consumer needs
and expectations with products of highest quality.
RECOGNITIONS AND ACCREDITIONS
The biggest plant of the Company situated at Bahalgarh bears a true
testimony to our quality standards with ISO 14000 certification by SGS,
UK. During the year, it was recertified for International
Accreditations of SQF, BRC, OU (Orthodox Union) and EIA.
Quality Management System of CompanyÂs Bhopal plant is certified for
ÂPaddy receiving, processing, packing and dispatch of Rice in
accordance with the requirements of the international standard ISO
22000 -2005 by SGS, UK.
CAPITAL AND PREFERENTIAL ALLOTMENT OF SHARES
The authorized capital of the Company has been increased from Rs. 2,500
lacs to Rs. 3,000 lacs in order to meet its growth objectives during
the year.
Subsequent to the approval of shareholders, the Company introduced
private equity from India Agri Business Fund for funding expansion,
modernization and diversification. Equity was inducted by way of
preferential allotment of shares to the strategic investors in the
Extra Ordinary General Meeting held on October 26, 2009. A total of
38,48,485 equity shares were issued to India Agri Business Fund
Limited, Mauritius and Real Trust.
Indian Agri Business Fund is managed by Rabo Equity Advisors, an arm of
the Dutch based Rabo Bank, AAA rated bank which is also a key
contributor to the Fund.
POSTAL BALLOT FOR ALTERATON OF MEMORANDUM AND ARTICLES OF ASSOCIATION
During the year under review, the Company had sought approval of the
members vide postal ballot for alteration of the Memorandum and
Articles of Association of the Company.
In terms of Section 17 and 31 of the Companies Act, 1956 (the Act) and
in terms of Section 192A of the Act read with Clause 4(f) of the
Companies (Passing of the Resolution by Postal Ballot) Rules, 2001,
approval of the shareholders was obtained by means of a Postal Ballot
for alteration of clause 3 and 4 of the Main object of the Company to
include the provision that the activities of the Company will be in
compliance with applicable laws, and insertion of Article 125(c) in the
Articles of Association of the Company and the results were declared on
December 5, 2009.
Again, in terms of Section 31 of the Companies Act, 1956 (the Act) and
in terms of Section 192A of the Act read with Clause 4(f) of the
Companies (Passing of the Resolution by Postal Ballot) Rules, 2001,
approval of the shareholders was obtained by means of a Postal Ballot
for alteration of Articles of Association by insertion of Article 60A
with respect to right of minority shareholders and the results were
declared on January 15, 2010.
SUBSIDIARIES
Indian Subsidiaries
Daawat Foods Limited (DFL)
This value added arm of the Company was set up in Mandideep, Bhopal in
December 2007 for production of parboiled rice and other value added
rice products i.e Rice Cakes, Rice Chips, Rice Noodles etc.
During the year, DFL has procured Foreign Investment in the form of
Equity Capital from Indian Agri Business Funds of Mauritius. At
present, DFL is a majority owned subsidiary of your Company.
DFL has expanded its business operations and has set up a food plant
for manufacturing of rice based products during the year. The
commercial production will start in the financial year 2010-11. A grain
clearing plant was set up and commenced during the year. LT Agri
Services Private Limited, a wholly owned subsidiary of DFL, is engaged
in furthering the cause of DFL in the farming community. It helps
farmers with quality inputs including seeds and agricultural know-how.
In return, it helps DFL procure quality paddy from the farmers.
Nature Bio Foods Limited (NBFL)
As a dedicated subsidiary, Nature Bio Foods Limited is your CompanyÂs
answer to modern lifestyle and its fascination with the organically
grown products. It exports organically grown products including basmati
and non-basmati rice and other value-added products like brown rice
flour, sesame, brown flax seeds and cashew nuts. During the year under
review, it made direct exports to Germany, Holland, the USA, Australia
and New Zealand.
To maximize from the growing demand of organic products, it is
further diversifying its product bouquet. The domestic market too
has witnessed increasing off-take of the organic products in recent
times. The Company is poised to launch its organic brand ÂEcolife in
the domestic market soon.
Staple Distribution Company Limited (SDCL)
This modern retail subsidiary of the Company has posted a strong
sales growth of over 75% during the year. SDCL is grown to become
a Rs 5,000 lacs Company, with presence in key markets of India
including Mumbai, Pune, West Bengal, Tamil Nadu, Gujarat,
Madhya Pradesh, National Capital Region, Punjab and Haryana.
SDCL has launched its own label in two food categories namely
Wheat Flour & Basmati Rice, under the brand name of ÂSDC PureÂ
during the year. SDCL has also bagged a food supply chain
management assignment from Pungrain, a nodal agency of the
Government of Punjab. It has devised end-to-end sourcing and
supply chain solutions for distribution of fortified Atta for APL card
holders through Public Distribution Supply outlets in Punjab.
During the year, Company has incorporated a subsidiary ÂExpo
Services (P) Limited to strengthen its distribution network across
length and breadth of India.
LT International Limited
LT International Ltd, a subsidiary of the Company is engaged in
trading of varied merchandise. The Company is exploring various
opportunities for growth under this unit.
Overseas subsidiaries
LTO NA and Kusha Inc.,USA
Kusha Inc. is a fellow subsidiary of your Company and wholly owned
subsidiary of LTO N.A. It is currently number one Basmati Rice seller
in America with brand names Royal and Daawat. It also offers other
products including Jasmine Rice, Arborio Rice, Couscous, Grape
seed Oil, Tea and Dried Mangoes. KushaÂs core competency lies in
marketing and selling high quality Indian Basmati Rice and other
authentic imported grains.
The Company is expanding its brand footprint in more stores with
more items with a special focus to expand footprint of ÂRoyal in
more ethnic stores. The Company is exploring other food products
like sauces, pastes and chutneys.
Sona Global Limited & Nice International FZE, Dubai
Nice International FZE, Dubai is a fellow subsidiary of your Company
and wholly owned subsidiary of Sona Global Limited. These
Companies were incorporated in Middle East for setting up the
platform for selling rice and rice products. Middle East and the Saudi
countries have a great potential for parboiled rice.
PARTICULARS REQUIRED UNDER SECTION 212 OF THE
COMPANIES ACT, 1956.
Pursuant to the provisions of Section 212(8) of the Companies Act,
1956, the Company has been granted exemption by the Ministry of
Company Affairs, from attaching the individual accounts of the
each of the subsidiaries. The accounts of the subsidiary companies
and the related detailed information will be made available to any
shareholder seeking such information at any point of time. The
accounts of the subsidiary companies are also available for
inspection by any shareholder at the registered office of the
Company or at the registered office of the subsidiary.
In accordance with the Accounting Standards (AS-21) on
Consolidated Financial Statements, your Directors provide the
Audited Consolidated Financial Statements as a part of this Annual
Report.
In accordance with the conditions stipulated by the Ministry of
Company Affairs, while granting exemption from attaching the
individual accounts of each of the subsidiaries, a one page financial
summary for the subsidiaries is disclosed as a part of this Annual
Report.
The statement relating to subsidiaries pursuant to Section 212(1) (e)
of the Companies Act, 1956 is also attached as a part of this Annual
Report.
CORPORATE GOVERNANCE
Your Company has been complying with all the conditions of
Corporate Governance as stipulated in Clause 49 of the Listing
Agreement with Stock Exchanges. A certificate from the Auditors to
this effect forms part of this Report.
In its practice of Good Corporate Governance over the years, the
Board lays strong emphasis on transparency, accountability and
integrity. In the belief of strengthening the governance practices,
the Company has constituted a Committee of Directors known as
ÂGovernance CommitteeÂ.
In terms of such sub clause (v) of Clause 49 of Listing Agreement,
Certificate of CEO/CFO, inter alias, confirming the correctness of
the financial statements, adequacy of the internal control measures
and reporting of matters to the Audit Committee in terms of the
said clause, is also enclosed as a part of said Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under
review, as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchange is presented as a separate Section forming part
of this Report.
DIRECTORS
Mr. Jagdish Chandra Sharma and Mr. Pramod Bhagat, Directors of your
Company are retiring by rotation at the ensuing Annual General
Meeting and being eligible offer themselves for re-appointment. Your
Directors recommend their re-appointment.
During the period under review, Mr. Rajesh Kumar Srivastava was
appointed as Additional Director of the Company on November 09,
2009. He is a Nominee Director of the strategic investors India Agri
Business Fund Limited and Real Trust on the Board of the Company. The
Company has received a Notice from a Member under Section 257 of
the Companies Act, 1956, signifying his intention to propose
Mr. Srivastava for the office of Director. Your Directors recommend
approval of his appointment, the particulars of which are contained in
the Notice of the Annual General Meeting.
Further, Ms. Radha Singh was appointed as Additional Director of the
Company on January 29, 2010. She is an Independent Director on the
Board of the Company. The Company has received a Notice from a
Member under Section 257 of The Companies Act, 1956, signifying his
intention to propose Ms. Radha Singh for the office of Director. Your
Directors recommend approval of her appointment, the particulars of
which are contained in the Notice of the Annual General Meeting.
Mr. Ashok Arora has been appointed as Additional Director in the
meeting of the Board on May 26, 2010 and he has been further
appointed as Joint Managing Director of your Company by the Board of
Directors on May 26, 2010 for a period of five years, subject to approval
of the shareholders. He has been actively involved in the activities of the
Company and was independently taking care of operations of the
group in Punjab. Your Directors recommended his appointment, the
particulars of which are contained in the Notice of the Annual General
Meeting.
The brief resume of the said directors as required in terms of Clause 49 of
the Listing Agreement with the stock exchanges, is provided in the
report on Corporate Governance annexed to the Directors Report.
AUDITORS
TU & Co., Chartered Accountants, New Delhi  the Statutory Auditors
of the Company shall hold office till the conclusion of this ensuing
Annual General Meeting. The Board, in view of the increasing
international operations of your Company, opines to recommend the
appointment of an international accounting firm M/s Walker and
Chandiok, International Accountants & Business Advisors, as Statutory
Auditors of the Company for the Financial Year 2010-11, as
recommended by the Audit Committee. The Company has received a
special notice from a member pursuant to Section 225 of the
Companies Act, 1956, proposing appointment of M/s Walker and
Chandiok as Statutory Auditors to hold office from the conclusion of the
forthcoming Annual General Meeting till the conclusion of the
following Annual General Meeting of the Company. The Company has
received a certificate from the said Auditors under Section 224(1B) of the
Companies Act, 1956 to the effect that their appointment, if made,
would be within the prescribed limits as per the said Section. The
members are requested to consider their appointment as statutory
auditors for the financial year 2010-11, at a remuneration to be decided
by the Board of Directors.
Paragraph B (10) of schedule 18 in the notes on accounts referred to in
the Auditors Report are self-explanatory and therefore do not call for
any further comments.
DEPOSITS
During the year, the Company did not accept any deposits from
the public within the meaning of Section 58A of the Companies
Act, 1956.
b. There were no other employees who were in the CompanyÂs employment
for a part of the year under review and were in receipt of remuneration
for any part of the financial year at a rate in aggregate, were not
less than Rs. 2,00,000/- p. m.
Mr. Vijay Kumar Arora, Mr. Ashwani Kumar Arora and Mr. Surinder Arora
are relatives within the meaning of Section 6 of the Companies Act,
1956.
DIRECTORS RESPOSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(a) In preparation of the Annual Accounts, the applicable accounting
standards have been followed and that no material departures have been
made from the same;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2010 and of the profits of the Company
for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(d) the Directors have prepared the annual accounts on a going concern
basis.
CORPORATE SOCIAL RESPONSIBILITY
The foundation of your CompanyÂs business lay on co-creating value with
and for the farming community. The Company helps farmers to improve
yield from their farms by sharing quality seeds and know-how on best
farming practices.
With a view to further woman empowerment, the Company runs few
stitching training centers in villages surrounding its place of
operations. The Company also provides rice to various NGOs.
EMPLOYEES STOCK OPTION SCHEME
The Board recognizes the contributions of the permanent employees of
the Company and its subsidiary companies. With a view to solicit their
greater participation in the sustainable growth of the Company, the
Board has proposed that a Scheme be formulated in accordance with the
ESOP Guidelines, 1999 to offer securities to the employees (including
employees of the subsidiary companies) under the ÂLT Foods Employee
Stock Option Plan  2010Â. The Board has accordingly decided to seek
approval of the shareholders of the Company. The detailed information
for the scheme as per applicable provisions of law has been provided in
the notice to the Annual General Meeting.
APPRECIATION
Your Directors wish to place on record their appreciation to employees
at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the
Company to remain at the forefront of the industry despite increased
competition from several existing and new players.
TRADE RELATIONS
The Board desires to place its appreciation for the support and co-
operation that the Company received from suppliers, distributors and
others associated with the Company as its trading partners. The Company
has always looked upon them as partners in its progress and has happily
shared with them the rewards of growth. It will be CompanyÂs endeavor
to build and nurture strong links with the trade partners based on
mutuality, respect and co-operation with each other and consistent with
customer interest.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all investors, clients,
vendors, banks, regulatory and government authorities and stock
exchanges, for their continued support. Your Directors also wish to
place on record their appreciation of the Contribution made by our
business partners/associated at all levels.
For and on behalf of the Board of Directors
Ashwani Arora
Joint Managing Director
Place: Gurgaon
Date : 09.08.2010
Mar 31, 2009
The Directors have pleasure in presenting the 19* Annual Report of
your Company together with the Audited Statement of Accounts for the
financial year ended 31st March 2009.
FINANCIAL RESULTS
The summarized Financial Results for the year ended March 31, 2009 are
as follows:
(Rs. in Lakhs)
Particulars 2008-09 2007-08
Sales and other income 70212.66 57910.28
Profit Before Tax 1000.96 3161.05
Tax on profits (69.37) 338.86
Profit After Tax 1070.33 2822.19
Dividend 222.70 334.05
Tax on Proposed Dividend Nil 56.77
Transfer to General Reserves 107.03 181.38
Dividend Tax for Earlier years Nil 6.61
* Figures have re-grouped / re-arranged wherever necessary in the
curent year.
Key Ratios:
The underlying performance can be ascertained from the following key
ratios:
2008-09 2007-08
Earning Per Share ( Rs.) 4.81 12.67
Dividend Per Share (Rs.) 1.00 1.50
Return on Tangible Net Worth (%) 7.16 20.25
THE YEAR UNDER REVIEW
During the year under review, the Company achieved turnover of Rs.
69439.55 Lacs and PBDIT of Rs.7966.60 Lacs. The Companys Profit after
tax and is Rs.1070.33 Lacs and Earning per Share Rs.4.81. With a
Consolidated turnover of 1060.97 Crores, the LT Group has achieved
another milestone, which reflects the efforts of the Organization to
stride it to great heights.
The details of the Companys operations have been provided in the
Management Discussion Analysis Report, which forms a part of this
report.
Audited Consolidated Financial Statement for the year ended 31st March,
2009 also forms a part this report.
DIVIDEND
In order to strike a balance between the need to sustain strategic
investments for secure future and the annual expectation of
shareholders for growing income, your Board of Directors at the meeting
held on 30th June 2009, recommended a final dividend Re.l per share
(@10%) of Rs. 10/- each for the financial year 2008-09, subject to the
approval of shareholders at the ensuing Annual General Meeting
absorbing a sum of Rs. 2,22,69,929/- (exclusive of Dividend
distribution tax). Dividend distribution tax will be borne by the
Company.
TRANSFER TO RESERVE
An amount of Rs 107.03 Lakhs is proposed to be transferred to General
Reserve.
CHANGE OF NAME FROM "IT OVERSEAS LIMITED" TO "IT FOODS LIMITED"
Your Directors had proposed the change of name of your Company from LT
Overseas Limited to LT Foods Limited to match the vision of the
Company of becoming a Leading Global Food Company. Consequently,
approval of the shareholders was taken in the previous Annual General
Meeting for the same. An application was made to the Registrar of
Companies, NCT Delhi & Haryana seeking the change of name and the same
was accorded by the Registrar of Companies vide fresh Certificate of
Incorporation w.e.f. 25th September, 2008.
AWARDS & RECOGNITIONS
Your Company has been conferred with APEDA Export Award in this year
for the performance pertaining to year 2007-08.
Daawat Foods Limited, a wholly owned subsidiary of the Company has been
awarded Export Excellence award for its excellence in operations and
export by State of Madhya Pradesh in its first full year of operations.
OVERVEIW
India is the worlds second largest producer of food, and has the
potential to become the biggest with the food and agricultural sector.
The total food production is expected to double in the next ten years
and there is opportunity for large investment in food and food
processing technologies. Health food and health food supplement is
another rapidly rising segment in the Industry which is gaining vast
popularly. The food processing industry is presently growing at 14%
against 6-7% growth in 2003-04.
India is one of the major food producers but accounts for less than 1.5
% of International food trade, whereas the global processed food market
is estimated at US$3.2 trillion. This indicates a vast scope in the
industry.
BUSINESS
Overall this was a year of great challenges and a meltdown in the
economic market. Despite the recession in the global scenario, the
Company has achieved significant growth in Domestic as well as in
International market as the impact of the same was considerably less on
our Company, being in the food industry. The Company had made
investments in its subsidiaries in the preceding years, and as a
result of overall performance and contribution of the subsidiaries, and
in line with the goal, the LT Group has been able to reach the
milestone of a turnover of 1060.97 Crores. Through a well defined and
conscious strategy, the Company is able to expand its retail and
distribution network, domestically and well as internationally.
In the midst of economic crises globally, your Company will continue to
pursue the strategy to identify and exploit profitable growth
opportunities by increasing the consumer preferences, increase brand
relevance, improve availability, structurally build capability and
efficiencies to be cost competitive.
CORPORATE DEVELOPMENT
The year 2008-09 has been a year of corporate developments for our
group, where our different subsidiaries have become operational and
have been able to provide good return for the investments made in the
same, in the initial year of its operation. The Company has hired a
panel of technicians, profeesionals and consultants for different
areas, who are well experienced in their respective fields, and whose
services have helped the Company in optimum utilization of the
resources and prevention of loss and increase in profitability. The
Company with their innovative guidance has been able to leverage its
operations in different aspects.
The Company continues to make inroads into new segments/ markets,
exploring new territories and introducing new products in the market.
The Company has hired the services of experienced consultants, who are
assisting us in sales and distribution transformation, retail
excellence and supply chain refinement. In addition, they will also
help improve significantly the service levels and acute scientific
forecasting methodologies.
PROSPECTS
The Company always has a vision to be a global rice food Company. In
furtherance to its vision, the Company has been taking initiative to
improve domestic operations and increase the bandwith of the Company.
It is also taking considerable steps for strengthening its
international presence and leverage the existing strengths of the
business. It is continuously in the process of injecting latest
technology commensurate with its operations. The Company is also in the
process of increasing the product portfolio of the Company.
FINANCE
As a result of the nature of the activity of the Company, it is always
in need of working capital, and the Company has endeavored to procure
finance for the operations of the Company at a competitive rate. The
Company has obtained loans from a consortium of banks and has also
obtained loans from other banks at a competitive rates. Having
significant portion of exports, the Company has the policy to hedge
funds for the pending orders in hand.
DOMESTIC OPERATIONS
The year has been a challenging year for our economy as well as for the
Company. The market dynamics were very strongly dominated by world
economy changes. This year we achieved domestic revenue of Rs 370.65
Crores in value which was result of increase in overall volume as well
as increase in sale of consumer pack. For the year 2009-10 also, we
have taken a challenging target looking at the potential and growth
rate in the domestic market. We are undergoing various changes and
corrections to improve our performances and to increase our market
share. We have utilized the services of renowned consultants to revamp
our operations and make them more effective, geared to take the
challenges of this year. They are helping us both in penetrating
further in our present markets as well as capturing untapped markets by
identifying new opportunities. The plan this year is to catapult the
growth through increasing our effective penetration from present 450
towns to 653 towns through direct or indirect coverage. We are sure
that this will bring healthier and more profitable and sustainable
growth of the Organization.
Daawat is prominently placed in 23 states and is performing outstanding
with the pace of 70% growth in new states i.e. Bihar and Jharkhand,
wherein Daawat was launched last year only.
As per strategic move to improve, we have realigned modern retail
business with our subsidiary Company i.e. Staple Distribution Company
Limited, engaged in the distribution business. They are directly
focusing their resources & aligning their activities as per modern
retail needs.
EXPORTS
In consonance with its vision of becoming a Global Food Company and a
major exporter of rice, the Company has been continuously making all
efforts and harnessing all opportunities and has been able to develop a
strong global distribution network at International level.
The Export operations of the Company are currently spread in more than
60 countries, with several new markets opened in this financial year.
The Companys endeavor to capture new markets and export to these
markets have achieved major successes. We are currently leading the
pack in countries such as UAE, UK and US. The Company is continuously
making efforts to explore and capture, further the potential in the
export market. Various agreements with new channel partners have been
done in many new markets.
In the Middle East, African, European and the US markets, we have been
able to make steady progress with growth having surpassed previous
targets. Despite the slowdown in some economies and market hit with
recession, we continue to grow at a steady pace.
In the year 2008-09, the export revenues exceeding Rs. 323.74 Crores as
compared to revenue of Rs. 247.57 Crores in 2007-08. We are also
consolidating operations in the existing markets where we have a set up
by introducing some innovative promotion schemes to keep the customers
interest alive for brand Daawat. We will be expanding our product
portfolio with emphasis on total quality improvement thereby improving
our service delivery efficiencies. We have undertaken upon ourselves an
aggressive target in addition to our objective to enhance our customer
base across different markets.
During the year the Company has been awarded by APEDA for their
contribution in exports during the previous year.
UTILISATION OF PUBLIC ISSUE PROCEEDS
The funds raised by the Initial Public Offering of the company have
been fully utilized and a certificate towards the same has been
received from the Monitoring Agency.
GROUP ENTITIES
Indian Entities:
Daawat Foods Limited
The wholly owned subsidiary of LT Foods Limited was set up with state
of art technology, milling unit in Mandideep, Bhopal, for production of
parboiled rice. The total investment made in the subsidiary is of an
amount of Rs.13.5 Crores as on date. This was the first year of its
operation, in which it has set a benchmark of a turnover of more than
Rs.200 Crores, which is the relentless efforts of the ambitious and
dedicated workforce.
The status of the Company has been changed from.Private Limited Company
to Public Limited Company by deletion of the word private from its
name.
The Subsidiary has implemented ERP. It has embarked on the journey to
practice S-5 in the plant and has developed an automated environment,
which resulted in higher output and reduction in average cost with
emphasis on training the employees of the Company. The Company has a
dedicated research team and consultants, which has helped the Company
by helping the farmers and remunerating them for adoption of basmati
cultivation.
The Company has decided to add value added products in its portfolio
and work has been started on the "Food Plant", which shall be
operational in the second quarter of year 2009-10.
The Company has been awarded Export Excellence award for its
excellence in operations and exports by MP State Minister of Commerce
and Industry.
Nature Bio Foods Limited
The wholly owned subsidiary of the Company was incorporated to cater
the need of organic market. Nature Bio-Foods Ltd. is one of the
pioneers in the organic business in the Northern India dealing in
Contract Organic Farming, Processing and Marketing of Certified Organic
Products. Its activities involve production of foods as per national
and international organic standards right from the field production,
processing, packaging, storage till the shelves of the retailers. In
the whole process, no use of chemicals such as fertilizers, pesticides,
artificial growth promoters and chemical preservatives etc. are done.
This is produced by using natural manure, natural pest control measure
and all the eco-friendly measures which preserves the nature and its
ecology from the chemical pollution. The Company is making sincere
contribution towards reduction in chemical pollution in the soil, air,
and water and making the earth and ecology a better living place for
all the creatures living on the earth.
The demand for the product of the Company is from developed countries
around the world, and therefore the business is mostly concentrated on
exports. The domestic market is expected to grow in the coming years
and the Company is planning to launch a range of products in the
domestic market as well.
Nature Bio-Foods Ltd. is the first Company in India to be enlisted its
name in the Eco Social certified project of IBD, Brazil, which confirms
the commitment of the Company to the farming families including the
development of the women section. "FAIR FARMING FEDERATION (FFF)" - a
society is formed at a National Level to create farmers group at the
regional level for the adoption of sustainable organic farming and
boost up the qualityof their lives and maximizing the income by
selling the organic produce at a premium price to the Company.
Staple Distribution Company Limited
The Company was incorporated as a subsidiary to play and establish
itself as a backend player for Modern Retail. The Company has marked a
growth of 230% in this financial year and has grown from one branch
Company to three branch Company. It further aspires to open more
branches in different cities of India and capture the market potential
in staples and to cater to 80% of the Modern Retail Company directly
from its branches by the end of March, 2010.
The Company is also exploring the prospects of launching its own brand
and labels in various staple food category and focus on Modern Trade,
General Trade and alliances in the coming year. It is also working on
the opportunity for working with "aggregators", which shall be
Alternate Trade Channel for Company.
LT International Limited
LT International Limited, a subsidiary of the Company is engaged in
trading of varied merchandise. The Company is exploring various
opportunities for growth of the Company.
LT Agri Services Private Limited
During the period the Company has incorporated LT Agri Services Private
Limited as a Wholly Owned Subsidiary of Daawat Foods Limited. This
Company has been incorporated as a step further towards backward
integration, to help farmers grow high quality of paddy and to further
assist them in the agricultural activities, which shall further help
the Company to manufacture and upgrade the quality of rice production.
Overseas Entities:
LTONAandKushalnc.
Kusha Inc. is the largest distribution Company in US with the brand
name "ROYAL" and the said Company has been acquired in December by LTO
North America - a wholly owned subsidiary of LT Foods Limited. The
acquisition has increased our market share from 7% to 52% appx in US
branded segment.
Kusha Inc. continues to show growth in both volume and value during the
difficult economic times currently being felt by most businesses and
consumers in the United States. During the year, the volume of the
business grown by 13% with increased sales to Clubs, Supermarket,
Ethnic markets, Food Service and Private Label channels. Kusha has a
diversified offering of products which includes Basmati Rice, Jasmine
Rice, Arborio Rice, Couscous, Grapeseed Oil, Tea and Dried Mangoes.
Changes were made during the year to strengthen the Kusha sales team
with the addition of expert resources for both supermarket and ethnic
market channels.
Sona Global Limited & Nice International FZE
These Companies were incorporated as wholly owned subsidiaries for
trading of rice and rice products in the middle east market. Middle
east and the Saudi countries have a great potential for parboiled rice
and the Company has ventured to capture the potential. With the
establishment of the production unit for parboiled rice in Madhya
Pradesh, we have been able to increase our platform to reach the
customers and increase our market share and our presence in the middle
east countries. In the effort to leverage opportunities and to further
increase the market share in these regions the Company has restructured
its operation and its team there, which is in consonance with its
overall objective to become a major global player.
PARTICULARS REQUIRED UNDER SECTION 212 OF THE COMPANIES ACT, 1956.
Pursuant to the provisions of Section 212(8) of the Companies Act,
1956, the Company has been granted exemption by the Ministry of Company
Affairs, from attaching the individual accounts of the each of the
subsidiaries. The accounts of the Subsidiary Companies and the related
detailed information will be made available to any shareholder seeking
such information at any point of time. The accounts of the Subsidiary
Companies are also available for inspection by any shareholder at the
registered office of the Company or at the registered office of the
Subsidiary.
In accordance with the Accounting Standards (AS-21) on Consolidated
Financial Statements, your Directors provide the Audited Consolidated
Financial Statements as a part of this Annual Report.
In accordance with the conditions stipulated by the Ministry of Company
Affairs, while granting exemption from attaching the individual
accounts of each of the subsidiaries, a one page financial summary for
the subsidiaries is disclosed as a part of this Annual Report.
The statement relating to subsidiaries pursuant to Section 212(l)(e) of
the Companies Act, 1956 is also attached as a part of this Annual
Report.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of Good Corporate
Governance over the year. The Board of Directors support principles of
Corporate Governance. In addition to the basic governance issue, the
Board lays strong emphasis on transparency, accountability and
integrity.
Your Company has been in compliance with all the conditions of
Corporate Governance as stipulated in Clause 49 of the Listing
Agreement with Stock Exchanges and a certificate from the Auditors to
this effect is enclosing as a part of Corporate Governance Report.
In terms of such sub clause (v) of Clause 49 of Listing Agreement,
Certificate of CEO/CFO, inter alias, confirming the correctness of the
financial statements, adequacy of the internal control measures and
reporting of matters to the Audit Committee in terms of the said
clause, is also enclosed as a part of said Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges is presented as a separate section forming part of this
Annual Report.
DIRECTORS
Mr. Suparas Bhandari and Mr. Pramod Bhagat, Directors of your Company
are retiring by rotation at the ensuing Annual General Meeting and
being eligible offer themselves for re-appointment. Your
Directors*recommend their re-appointment.
During the period under review Mr. Satish Bal, ceased to be Director of
the Company consequent to his resignation. The Board of Directors
places on record their sincere appreciation for the contribution made
by Mr. Bal as member of the Board and the Audit Committee and
Remuneration Committee during his tenure.
Mr. Jagdish Chandra Sharma was appointed as Additional Director of the
Company w.e.f 22.10.2008. He is an Independent Director on the Board of
the Company. Your Directors recommend approval of his appointment, the
particulars of which are contained in the notice of the Annual General
Meeting.
The term of appointment of Mr. Vijay Kumar Arora as Managing Director
of your Company is due to expire on 28th September, 2009.
He has been actively involved in the activities of the Company, which
ultimately resulted in growth of the Company. Your Directors
recommended their reappointment for a further period of five years, the
particulars of which are contained in the notice of the Annual General
Meeting.
The brief resume of the said Directors as required in terms of Clause
49 of the Listing Agreement with the Stock Exchanges, is provided in
the report on Corporate Governance annexed to the annual report.
COMPOSITION OF THE AUDIT COMMITTEE OF THE BOARD
In pursuance with the provisions of Section 292A of the Companies Act,
1956, the composition of the Audit Committee of the Board is given here
in below:
Mr. Suparas Bhandari Chairman
Mr. Pramod Bhagat Member
Mr. Jagdish Chandra Sharma Member
During the period under review Mr. Satish Bal, ceased to be member of
the Audit Committee on his resignation from the Committee consequent to
resignation as Director of the Company.
Mr. Jagdish Chandra Sharma, was appointed as member of the Audit
Committee in place of Mr. Satish Bal.
The Audit Committee has been provided a terms of reference defining its
scope and responsibilities. The section on Corporate Governance
contains other details asTegards the functioning of the said Committee.
AUDITORS
TU & Co., Chartered Accountants, New Delhi shall hold office till the
conclusion of this ensuing Annual General Meeting and as recommended by
the Audit Committee, the Board recommends their reappointment as
Statutory Auditors of the Company for Financial Year 2009-10. The
Company has received a certificate from the said Auditors under Section
224(1B) of the Companies Act, 1956 to the effect that their,
appointment if made, would be within the prescribed limits as per the
said section. The members are requested to consider their
re-appointment as statutory auditors for the financial year 2009-10, at
a remuneration to be decided by the Board of Directors.
DEPOSITS
During the year, the Company did not accept any deposits from the
public within the meaning of Section 58A of the Companies Act, 1956.
EMPLOYEES (Disclosure under section 217(2A) of the Companies Act)
The Company has no Employees whose names and particulars are required
to disclose as per the provisions of Section 217(2A) of the Companies
Act,1956, read with Companies (Particulars of Employees) Rules,1975.
RESEARCH & DEVELOPMENT
The Company with its vision of becoming a Global Food Company has
consistently worked on Research and Development of new products with
focus on developing new and innovative products that cater to varied
customer segments with healthy food choices that offer both convenience
and taste. Internationally one or more of the most food brands are
positioning themselves in the three core strategies i.e.
health/wellness, taste and convenience and the Company is also working
in the same direction to add such value added rice products, apart from
the regular plain rice, as per want and desire of the customer and to
provide the value for money to its customers.
The R & D team has been further strengthened. Consistent with corporate
strategic plans of better growth and profits from the operations, a
think tank Company, was retained to assist the Company in brainstorming
new product ideas and to develop best product strategies and concepts.
After much detailed survey of the market place, needs and
opportunities, based on current consumer trends and lifestyle changes,
and consistent with our goal of delivering nutrition (healthy
products), convenience and taste, we narrowed our choice of 1st phase
products and emphasized on value added rice products.
The R & D team took the lead role in identifying technologies to use
and developing processes and products on the short list. Small-scale
trials were conducted at equipment manufacturers sites. Flavors were
developed in-house, working closely with experts at spice and flavor
companies. New kitchen located in the head quarter office and staffed
by an
experienced Food Technologist helped in quicker development of new
products due to easy access to Management, Marketing and Sales
associates.
To facilitate production of these new products, a new state-of-the-art
clean design Foods Building is nearing completion. The new plant is
located within the same campus as the Parboiling Plant that was
commissioned last year. Care is taken in the design and selection of
the process and machinery so that exacting standards of World Class
customers can be met. Flexibility and easy capacity expansion were key
design criteria after hygiene. Three separate lines will be installed
to produce these products. Commissioning of these lines will begin
mid-August 2009 and products will be in the markets during the third
quarter of 2009-10.
Work continues in the R&D to develop next generation of new products as
well as products for line extensions. We will have a full pipeline of
new products for the next several years. Each new product idea will be
analyzed to assure strategic fit as well as its economic viability.
Prototype product will be tested using mini consumer tests to obtain
valuable consumer insights. We want to develop new products that our
customers will want. By connecting with the end consumers, we are sure
we will have success in our innovative products that we take to the
market.The objectives here are to help company to meet market needs, to
address market opportunities, and to add value to increase
shareholders value.
PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE AND OUTGO
Information as required under Section 217(l)(e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 are set out hereunder:
Conservation of energy
Energy conservation is a priority area for the Company. Companys
continued efforts reduce and optimize the use of energy consumption
have shown positive results. Better controls are planned to achieve
further reduction in energy consumption. All the new manufacturing
facilities of the Company are equipped with hi-tech energy monitoring
and conservation systems to monitor usage.
Power & Fuel Consumption
Particulars 2008-09 2007-08
Electricity
Through Purchases
Units 10731881 9104040
Total Amount (Rs.) 46627900 40899875
Rate/Unit (Rs.) 4.34 4.49
Through Diesel Generator
Units generated 1079274 1020475
Total Amount (Rs.) 10698948 10141090
Cost /Unit (Rs.) 9.91 9.93
Technology absorption, adaptation and innovation
1. During the year, we have made strides in improving our overall
infrastructure at the rice milling unit by adding new rice silos, this
is in addition to the paddy silos we have in place, we are additionally
adding new packaging lines with new re-closable small packs for the
mainstream stores across the world.
2. Company has derived the benefits as a result of the above said
efforts, e.g. products development, product improvement, cost
reduction, etc.
The said efforts also helped in satisfying consumer needs as well as
business requirements of introducing new and consistent products with
better quality.
Imported technology
The Company is importing machinery for the projects time to time.
Foreign exchanged used and earned
(Rupees in Crores)
Particulars 2008-09 2007-08
Total Foreign Exchange used 15.69 20.26
Total Foreign Exchange earned 342.09 230.86
DIRECTORS RESPOSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors
confirm that:
(a)ln preparation of the Annual Accounts, the applicable Accounting
Standards have been followed and that no material departures have been
made 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 March 31, 2009 and of the profits 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 Companies Act, 1956 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.
CORPORATE SOCIAL RESPONSIBILITY
LT Foods has started a unique activity of meshing social commitment
into business vision. The Company is working at various places across
country on the same, focusing in MP (state in India) with farmers.
This activity involves educating and giving technical inputs to farmers
in agriculture and related advisory services. A well qualified,
professional and committed team is putting up demonstrations to farmers
on their various issues including good production processes, pest and
diseases management in variety of crop. This has contributed in many
fold increase of farm income in these areas - giving back to the
society in some form & helping in people progress.
The Company envisions to improve life of community we live around,
support missions that help people improve life, world class quality
product, value for their hard earned money and healthy environment.
LT Foods not only believes in pursuing leadership in its business
ventures but also promotes progress of people through common welfare.
LT has attached itself in CSR activities by attaching with NT to
promote innovative thoughts and ideas for well being of the environment
and public at large.
APPRECIATION
Your Directors wish to place on record their appreciation to employees
at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the
Company to remain at the forefront of the industry despite increased
competition from several existing and new players.
TRADE RELATIONS
The Board desires to place its appreciation for the support and
co-operation that the Company received from suppliers, distributors and
other associates with the Company as its partners. The Company has
always looked upon them as partners in its progress and has happily
shared with them the rewards of growth. It will be Companys endeavor
to build and nurture strong links with trade based on mutuality,
respect and co-operation with each other and consistent with customer
interest.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all investors, clients,
vendors, banks, regulatory and government authorities and stock
exchanges, for their continued support. Your Directors also wish to
place on record their appreciation of the Contribution made by our
business partners/associated at all levels.
For and on behalf of the Board of Directors
Place: Gurgaon Ashwani.Arora
Date : 30.06.2009 Joint Managing Director
Mar 31, 2008
The Directors have pleasure in presenting the 18th Annual Report of
your company together with the Audited Statement of Accounts for the
financial year ended 31st March 2008.
FINANCIAL RESULTS
The summarized Financial Results for the year ended March 31, 2008 are
as follows:
(Rs. in Lakhs)
Particulars 2007-08 2006-07
Sales and other income 57782.98 48584.19
Profit Before Tax 3161.05 2326.70
Tax on profits 338.86 267.27
Profit After Tax 2822.19 2059.43
Dividend 334.05 222.70
Tax on Proposed Dividend 56.77 31.23
Transfer to General Reserves 181.38 51.49
Dividend Tax for Earlier years 6.61 -
Key Ratios:
The underlying performance can be ascertained from the following key
ratios:
2007-08 2006-07
Earning Per Share ( Rs.) 12.67 12.52
Dividend Per Share (Rs.) 1.50 1.00
Return on Tangible Net Worth (%) 20.25 % 17.82 %
THE YEAR UNDER REVIEW
During the year under review, the Company achieved turnover of Rs.
57782.98 Lakhs and PBDIT of Rs. 3161.05 Lacs. The Companys Profit
after Tax and is Rs. 2822.19 Lakhs and Earning per Share Rs.12.67.
The details of the Companys operations have been provided in the
Management Discussion Analysis Report, which forms a part of this
report.
Audited Consolidated Financial Statement for the year ended 31st March,
2008 also forms a part of this report.
DIVIDEND
The Board of Directors at the meeting held on 23rd June 2008,
recommended a final dividend Rs. 1.50 per share ( 15%) of Rs. 10 each
for the financial year 2007-08, subject to the approval of shareholders
at the ensuing Annual General Meeting absorbing a sum of Rs 334.035
Lakhs (exclusive of distribution tax). Distribution Tax is being borne
by the Company.
TRANSFER TO RESERVES
An amount of Rs 181.38 Lakhs is proposed to be transferred to General
Reserves.
BUSINESS
Overall this was a exigent year for the industry as paddy prices
increased substantially but the company has achieved significant growth
in Domestic as well as in International market. In the operations ,
production capacity of the CompanyÂs main plant at Bahalgarh at GT Road
has been increased from 27 TPH hour to 33 TPH per hour in the last
quarter of this financial year. With this addition, the total capacity
of the Group increased to 50.50 mt per hour.
EXPORTS
In the International market, we have made major strides this year by
being the first rice company in Asia to acquire one of the largest
distribution Company in North America i.e. Kusha Inc., USA the
acquisition gives us a strong foothold in North America and increases
our share in the market to nearly 52% in USA making us one of the
largest basmati rice players in US market. In addition to this, entire
trading business of Kusha which was spread into several countries has
been added to our portfolio.
In the Middle East, also we have restructured and consolidated the
business to bring more stability in our operations thereby improving
our overall efficiency. New distribution channels have been opened up
in other parts of the world as well. Company has made breakthroughs
with Costco and other mainstream stores in the U.K.
We currently have the International certifications which give us that
edge to remain ahead of the pack in the International market, some of
these are HACCP, ISO,SQF,BRC, Organic & EIC. Implementation of
international quality standards provide customers the confidence and
trust in the integrity of our products.
In the year 2007-08, Company has achieved growth of 36% with revenue
touching Rs. 246.29 crores against the revenue of Rs. 180.78 crores in
2006-07. We have already started on a growth path where we have
undertaken upon ourselves an aggressive target of 400 Crores for the
year ahead with major growth in North America, Europe and Middle East.
The current year is also the year for consolidation and focusing on the
brands rather than on private label exports. This will provide
stability and higher profitability in export segment.
DOMESTIC OPERATIONS
In the Year 2007-08 , we have earned revenues of Rs. 329.29 crores in
comparison to revenues of Rs. 303.35 crores. Out of the total revenue
we have generated 38% from Institutional Sales, 55% from traditional
Retail and 7% from Modern Retail.
Company has presence in 32949 traditional retail outlets and 1884
Modern Retail Outlets out of 69610 and 2433 outlets respectively. We
have our presence in 23 States including 2 new states Bihar and
Jharkhand which have been added during the year including 245 cities
across the country.
We have a very good presence in West, North, Southern part of the
country and we have just picking up in Eastern India. To increase our
presence in Eastern India we launched our products in Bihar and
Jharkhand States in year 2007-08.
To provide better services to our esteem customers of Tamil Nadu state
we have started Sales Depot operation in Chennai during 2007-08.
To provide better and quick services to Modern Retail Companies, LTO
has created a team of four Key Accounts Mangers to handle different
Modern Retail Formats.
UTILISATION OF PUBLIC ISSUE PROCEEDS:
The funds raised by the Initial Public Offering of the company have
been utilized in the following manner
Particulars Projected
AMOUNT SCHEDULE
Expansion , Automation and
Modernisation at
Sonepat, Haryana
a.)Parboiled rice processing
and milling unit 70.20 APRIL 07 - SEP 07
b.)New milling line for
producing value added rice 41.01 JAN 06 - JULY 06
c.)Balancing and modernisation
of facilities 31.30 MAY 06 - SEPT 06
d.)Increasing storage facility
I) Silos grain storage 98.39 JUNE 06 - JUNE 07
ii) New white rice storage 21.09 JAN 07 - JUNE 07
iii) Open Bardana Shed 4.72 MARCH 06 - JULY 06
Setting up of Power turbine
at existing plant 50.52 JUNE 06 - JUNE 07
General Corporate purpose 177.00
Public issue expenses 35.18
Actual
AMOUNT SCHEDULE
79.63 COMPLETED
42.46 COMPLETED
29.45 COMPLETED
87.82 COMPLETED
22.99 COMPLETED
3.50 COMPLETED
10.62 PHASE-I
COMPLETED
177.00 COMPLETED
37.42 COMPLETED
SUBSIDIARIES
Indian subsidiaries
Daawat Foods (P) Limited
The wholly owned subsidiary of LT Overseas was set up with state of art
technology, milling unit in Mandideep, Bhopal, for production of
parboiled rice. Rice processed here will cater to the institutions and
requirement of Middle East market as well. Your company has made
investment of Rs. 23.50 crores in this subsidiary.
Nature Bio Foods Limited
The Company recognized that organic food is future of the world and in
the same direction, Company initiated steps few years back. For the
same, the wholly owned subsidiary of the company was incorporated to
cater the need of organic market which is approximately a market of 22
billion dollar world wide and growing with the pace of 10 %.
Staple Distribution Limited
Looking at the potential and boom in retail business, Staple
Distribution Company, a wholly owned subsidiary of the Company has been
incorporated during the year to play and establish itself as a backend
player for Modern Retail.
LT Infotech (P) Limited
During the year company has invested in LT Infotech (P) Limited which
is in to the business of telecommunication and which has entered in to
a joint venture with Cordia International. Cordia International is a
wholly owned subsidiary of Cordia Corp which is one of the leading
telecom company in USA .
LT International Limited
LT International Ltd, a subsidiary of the company is engaged in trading
of varied merchandise.
Overseas subsidiaries
Kusha Inc.
Kusha Inc. is the largest distribution company in U.S. with the brand
name "ROYAL" and the said company has been acquired in December 2007 by
LTO North America Inc. - a wholly owned subsidiary of LT Overseas
Limited. This acquisition has increased our market share from 7% to 52%
appx in U.S. market.
LT Overseas North America Inc.
LT Overseas North America Inc., a wholly owned subsidiary has been
formed in California, to capture market share as well as to strengthen
our presence in U.S.
Sona Global Limited & Nice International FZE
Middle east market has a potential and to capture market share and
strenghten our presence Sona Global Limited Dubai and its subsidiary
Nice International FZE, Dubai were formed and these are engaged in
trading of rice and rice products in the Middle East.
PARTICULARS REQUIRED UNDER SECTION 212 OF THE COMPANIES ACT, 1956.
Pursuant to the provisions of Section 212 (8) of the Companies Act,
1956, the Company has been granted exemption by the Ministry of Company
Affairs, from attaching the accounts the individual accounts of each of
the subsidiaries. The accounts of the subsidiary companies and the
related detailed information will be made available to any shareholder
seeking such information at any point of time. The accounts of the
subsidiary companies are also available for inspection by any
shareholder at the registered office of the company or at the
registered office of the subsidiary companies.
In accordance with the Accounting Standard (AS -21) on Consolidated
Financial Statements, your Directors provide the Audited Consolidated
Financial Statements as a part of this Annual Report.
In accordance with the conditions stipulated by the Ministry of Company
Affairs, while granting exemption from attaching the individual
accounts of each of the subsidiaries, a one page financial summary for
the subsidiaries is disclosed as a part of this Annual Report.
The statement relating to subsidiaries pursuant to Section 212(1) (e)
of the Companies Act, 1956 is also attached as a part of this Annual
Report.
CORPORATE GOVERNANCE
Your Company has been practicing the principles of good Corporate
Governance over the year. The Board of Directors supports principles of
Corporate Governance. In addition to the basic governance issues, the
Board lays strong emphasis on transparency, accountability and
integrity.
Your Company has been in compliance with all the conditions of
Corporate Governance as stipulated in Clause 49 of the Listing
Agreement with Stock Exchanges and a certificate from the Auditors to
this effect is enclosed as a part of Corporate Governance Report.
In terms of sub clause (v) of Clause 49 of Listing Agreement ,
Certificate of CEO/CFO, inter alias, confirming the correctness of the
financial statements, adequacy of the internal control measures and
reporting of matters to the Audit Committee in terms of the said
clause, is also enclosed as a part of said Report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges is presented as a separate section forming part of this
Annual Report.
NEW CORPORATE OFFICE
Looking at the growth of the organization and forthcoming projects,
your Board has decided to move its corporate office to a bigger area
i.e. Plot no 119, Sector 44, Gurgaon, Haryana. The new office has been
built to a single purpose of creating an inspiring work environment. A
unified corporate office will help to further integrate business
processes and leverage scale and synergies across the organization.
PROPOSAL OF NAME CHANGE FROM "LT OVERSEAS LIMITED TO "LT FOODS LIMITED"
The Board has proposed, subject to shareholders approval, the change of
the name of the Company from "LT Overseas Limited" to "LT Foods
Limited" to match with the vision of the company i.e "to be a Leading
Global Food Company".
While the explanatory statement appended to the Notice of Annual
General Meeting deals with the logic and rationale elaborately, it is
appropriate to reiterate that the Company believes that the proposed
name provides the optimum balance between maintaining the heritage of
the company and future benefits and synergies of global alignment with
the word "FOODS".
Most importantly, the proposed name retains "LT "as the first word in
its name to reflect the Companys continued commitment to consumers,
customers and employees.
The Board has appointed M/S TU & Co. as scrutinizer to conduct postal
ballot in the annual general meeting for Change of Object Clause" in
the Memorandum of Association so as to give effect to change of name of
the Company.
DIRECTORS
Mr. Pramod Bhagat and Mr. Satish Bal, Directors of the Company retire
by rotation at the ensuing Annual General Meeting and being eligible
offer themselves for re-appointment.
The brief resume of the said directors as required in terms of Clause
49 of the Listing Agreement with the stock exchanges, is provided in
the report on Corporate Governance as annexed to the annual report.
COMPOSITION OF THE AUDIT COMMITTEE OF THE BOARD
In pursuance with the provisions of Section 292A of the Companies Act,
1956, the composition of the audit committee of the Board is given here
in below:
Mr. Suparas Bhandari Chairman
Mr. Pramod Bhagat Member
Mr. Satish Bal Member
The Audit Committee has been provided a terms of reference defining its
scope and responsibilities. The section on Corporate Governance
contains other details as regards the functioning of the said
Committee.
AUDITORS
TU & Co., Chartered Accountants, New Delhi shall hold office till the
conclusion of the ensuing Annual General Meeting and have expressed
their willingness and eligibility to continue, if re-appointed. You are
requested to consider their re-appointment.
Paragraph B (10) of schedule 18 in the notes on accounts referred to in
the Auditors Report are self-explanatory and therefore do not call for
any further comments.
DEPOSITS
During the year, the Company did not accept any deposits from the
public within the meaning of Section 58A of the Companies Act, 1956.
EMPLOYEES ( Disclosure under Section 217(2A) of the Companies Act)
During the year 2007-08 , the company has paid remuneration of Rs. 2.25
lacs per month for a period of three months i.e January Â08 to March
Â08 to Mr. N.C.Gupta- Executive Vice President.
RESEARCH & DEVELOPMENT
The Company recognizes that Research and Development of new products
are imperative for the Company to consolidate, achieve and maintain
leadership position in industry. The R&D dept is focused on developing
new and innovative products that cater to varied customer segments.
LT Overseas Ltd. has for the past several years emphasized Research &
Development activities. R&D is considered both important and required
for the future growth strategy set for the Company. Though no new
products were launched in the market place this year, the stage is set
now to spring ahead with several new products over the next two years.
Research work can be divided into Product Development activities and
Process Development activities. Consistent with corporate strategic
plans, year 2007 was devoted for process development, to build and
startup a new parboiling plant in Mandideep. Process (MP) technology
selected for this new plant is based on a patent that was filled by the
Company in the year 2006. A bold change from traditional process was
implemented to advance product quality to a level insisted by our
customers in Saudi, Europe and North America.
Process development activities were carried out in a small-scale pilot
plant. All MP varieties were evaluated and prototype products produced
at the R&D pilot plant. Processes were fine tuned to obtain optimum
yields, and best performance on the plate. These efforts delivered
excellent results upon startup of the new line.
With the advent of the new Parboiling Plant, we now have starting raw
material for several new products. Consistent, odour free, robust
grains will be the feed material for several innovative convenience and
value added products. To hurry-up to the market of the new products,
R&D staffing is strengthened and a new kitchen was added at the
corporate office to quickly review and evaluate new products from the
R&D labs. Also, some business alliances are being negotiated to jointly
develop value added new rice products. The objectives here are to help
company to meet new market needs, to address market opportunities, and
to add value. Profitable growth is the desired outcome.
PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under Section 217(1) (e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors) Rules, 1988 are set out hereunder:
Conservation of energy
Energy conservation is a priority area for the Company. CompanyÂs
continued efforts to reduce and optimize the use of energy consumption
have shown positive results. Better controls are planned to achieve
further reduction in energy consumption. All the new manufacturing
facilities of the Company are equipped with hi- tech energy monitoring
and conservation systems to monitor usage.
Power & fuel Consumption
Particulars 2007-08 2006-07
Electricity
Through Purchases 9104040 8245325
Total Amount ( Rs.) 40899875 33957376
Rate /Unit (Rs) 4.40 4.12
Through Diesel Generator
Units generated 1020475 1263967
Total Amount ( Rs) 10141090 12172002
Cost /Unit(Rs.) 9.93 9.63
Technology absorption, adaptation and innovation:
1.During the year , we have made strides in improving our overall
infrastructure at the rice milling unit by adding new rice silos, this
is in addition to the paddy silos we have in place, we are additionally
adding new packaging lines with new re-closable small packs for the
mainstream stores across the world.
2.Company has derived the benefits derived as a result of the above
said efforts, e.g. product development, product improvement, cost
reduction etc.
The said efforts also helped in satisfying consumer needs as well as
business requirements of introducing new and consistent products with
better quality.
Imported technology
The Company is importing machinery for the projects time to time.
Foreign exchange used and earned
(Rupees in Lakhs)
Particulars 2007-08 2006-07
Total Foreign Exchange used 2026.29 2449.79
Total Foreign Exchange earned 23086.26 17064.55
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors
confirm that:
(a) In preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made 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 March 31, 2007 and of the profit 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 Companies Act, 1956 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.
CORPORATE SOCIAL RESPONSIBILITY
LT Overseas has stated a unique activity of meshing social commitment
into business vision. The Company is working at various places across
country on the same, focusing in MP (state in India) with farmers.
This activity involves educating & giving technical inputs to farmers
on agriculture and related advisory services. A well qualified,
professional & committed team is putting up demonstrations to farmers
on their various issues including good production processes, pest and
diseases management in variety of crop. This has contributed in many
fold increase of farm income in these areas - giving back to the
society in some form & helping in people progress.
LT Overseas not only believes in pursuing leadership in its business
ventures but also promote progress of people through common welfare.
APPRECIATION
Your Directors wish to place on record their appreciation to employees
at all levels for their hard work, dedication and commitment. The
enthusiasm and unstinting efforts of the employees have enabled the
company to remain at the forefront of the industry despite increased
competition from several existing and new players.
TRADE RELATIONS
The Board desires to place its appreciation for the support and
co-operation that the Company received from suppliers, distributors and
other associated with the Company as its trading partners. The Company
has always looked upon them as partners in its progress and has happily
shared with them the rewards of growth. It will be CompanyÂs endeavor
to build and nurture strong links with trade based on mutuality,
respect and co-operation with each other and consistent with consumer
interest.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank all investors, clients,
vendors, banks, regulatory and government authorities and stock
exchanges, for their continued support. Your Directors also wish to
place on record their appreciation of the Contribution made by our
business partners / associates at all levels.
For and on behalf of the Board of Directors
Place: New Delhi Surinder Arora
Date : 23rd June 2008 Joint Managing Director
Mar 31, 2007
Your Directors are pleased to present their seventeenth annual report
on the business and operations of the company together with the audited
accounts for the year ended March 31 2007
FINANCIAL RESULTS
Your companys performance during the financial year 2006-07 is
summarized below:
Rs.in lacs
2006-07 2005-06
Sales and other income 48543.70 40456.93
Profit before tax 2326.70 1200.78
Tax on profits 267.27 69.31
Profit after tax 2059.43 1131.47
Dividend 222.70 180.86
Tax on proposed dividend 31.23 25.37
Transfer to general reserves 51,49 125.00
Profit and Loss account balance carried forward 1754.01 800.24
Key Ratios
The underlying performance can be ascertained from the following key
ratios:
2006-07 2005-06
Earning per share (Rs.) 12.52 15.84
Dividend per share (Rs.) 1.00 Â 2.50
Return on net worth (%) 17.16% 18.57%
APPROPRIATIONS
Dividend
Your Directors recommend a final dividend of Rs. 1 per equity share
(10%) absorbing a sum of Rs 222.70 lacs (exclusive of distribution tax)
for the financial year 2006-2007 subject to the approval of the
shareholders at the ensuing Annual General Meeting.
Transfer to reserves:
An amount of Rs 51.49 lacs is proposed to be transferred to general
reserves. Unclaimed Dividend
An amount of Rs. 175940 out of the interim dividend declared during the
financial year 2005-06 is unpaid /unclaimed as on date. Shareholders
are requested to contact the Company to revalidate their dividend
cheques. Please note that Company is required to transfer any
unpaid/unclaimed dividend to investors protection fund in consonance
with the provisions of Companies Act, 1956, if they remian unpaid /
unclaimed for a period of seven years from the date of its declaration.
PERFORMANCE REVIEW
Company achieved surpassed sales turnover of Rs. 481 Crores and Profit
after tax Rs. 20.59 crores as against estimated sales turnover of Rs.
480 crores and profit after tax of 20 crores. During the year Company
increased its capacity from 20mt per hour existing as on 31st March
2006to27mt per hour as at 31st march 2007. Company recorded significant
increase in domestic sales by 36.5%. This could be made possible by
introducing branded rice for all the segments of population and
innovative packaging. Profit aftertax recorded tremendous increase of
84%. This increase mainly resulted due to increase in gross profit
margins, which increased by almost 4% viz -a-viz last year.
Rationalisation of paddy procurement policy and reduction in cost of
manufacturing operations resulted into higher gross profit margins. Due
to increase in profit margins EBITA margins also increased from 7.9% in
2005-06 to approximately 11% in 2006-07.
INCREASE IN SHARE CAPITAL
Bonus shares:
During the year your company capitalized Rs. 723.45 lacs out of its
reserves and made a bonus issue of one equity share for every equity
share held.
Initial Public offer:
The year 2006-07 saw a successful Initial Public offering of the
company resulting in the allotment of 7036543 equity shares of Rs. 10
each for cash at a premium of Rs.46 per equity share The issue was
oversubscribed 8.26 times and the equity shares were listed on the
Bombay Stock Exchange Limited and the National Stock Exchange Of India
Limited on December 18th 2006.Your Directors are glad to report that
the listing of the shares have enhanced the visibility of the company
and its brand value
UTILISATION OF PUBLIC ISSUE PROCEEDS
The funds raised by the Initial Public Offering of the company has been
utilized in the following manner:
Rs. in Lacs
Particulars Projected Actual
Amt Schedule Amt Schedule
Expansion,Automation and
Modernisation at Sonepat Haryana 70.2 April07-Sept 07 0 April07-Sept 07
a.)Parboiled rice processing and
milling unit 41.01 Jan 06-July 06 42.46 Completed
b.)New milling line for
producing value added rice 31.3 May 06-Sept06 29.45 Completed
c.)Balancing and modernisation
of facilities
d.increasing storage facility 98.39 June 06-June07 29.03 Partly
Completed
i)Silos grain storage 21.09 Jan 07-June 07 22.99 Completed
ii)New white rice storage 4.72 Mar 06-July 06 3.5 Completed
iii)Open Bardana Shed 50.52 June 06-June 07 10.62 1st Phase
Completed
Setting up of Power turbine
at existing 177 177 Completed
plant at Sonepat
General Corporate purpose 35.18 37.42 Completed
Public issue expenses 529.41 352.47 (*)
(*) Pending deployment in project, the balance of Rs.176.94 million has
been utilised towards
working capital.
SUBSIDIARY COMPANIES
Domestic subsidiaries :
Daawat Foods Private Ltd became a wholly owned subsidiary of the
company on March 2,2007 .The company is in the process of setting up of
a plant in Mandideep, Bhopal and will focus on manufacture of value
added rice.
Nature Bio Foods Limited, a wholly owned subsidiary of the company
continued to carry on the business of manufacture organic rice and
other agri products.
LT International Ltd, a subsidiary of the company is engaged in trading
of varied merchandise. Overseas subsidiaries:
Sona Global Limited Dubai and its subsidiary Nice International FZE,
Dubai are engaged in trading of rice and rice products in the Middle
East.
PARTICULARS REQUIRED UNDER SECTION 212 OF THE COMPANIES ACT, 1956.
Pursuant to the provisions of Section 212(8) of the Companies Act,
1956, the company has been granted exemption by the Ministry of Company
Affairs, from attaching accounts the individual accounts of each of the
subsidiaries. The accounts of the subsidiary companies and the related
detailed information will be made available to any shareholder seeking
such information at any point of time. The accounts of the subsidiary
companies are also available for inspection by any shareholder at the
registered office of the company or at the registered office of the
subsidiary companies.
In accordance with the Accounting Standard AS-21 on Consolidated
Financial Statements, your Directors provide the audited Consolidated
Financial Statements as a part of this Annual Report.
In accordance with the conditions stipulated by the Ministry of Company
Affairs, while granting exemption from attaching the individual
accounts of each of the subsidiaries, a one page financial summary for
the subsidiaries is disclosed as a part of this Annual Report
The statement relating to subsidiaries pursuant to Section 212(1) (e)
of the Companies Act, 1956 is also attached as a part of this Annual
Report.
CORPORATE GOVERNANCE
A separate section on Corporate Governance forming part of the
Directors report and the certificate from the Companys auditors
confirming compliance of Corporate Governance norms as stipulated in
Clause 49 of the Listing agreement with the Stock Exchanges is included
in this report.
MANAGEMENT DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review, as
stipulated under Clause 49 of the Listing agreement with the Stock
Exchanges is presented as a separate section forming part of this
Annual Report.
DIRECTORS
Mr. Suparas Bhandari and Mr. Satish Bal, Directors of the Company
retire by rotation at the ensuing Annual General Meeting and being
eligible offer themselves for re-appointment.
The brief resume of the said Directors as required in terms of Clause
49 of the Listing agreement with the stock exchanges, is provided in
the report on Corporate Governance as annexed to the annual report.
COMPOSITION OF THE AUDIT COMMITTEE OF THE BOARD
In pursuance with the provisions of Section 292Aofthe Companies Act,
1956,the composition of the audit committee of the Board is given here
in below:
Mr. Suparas Bhandari Chairman
Mr. Pramod Bhagat Member
Mr. Satish Bal Member
The audit committee has been provided terms of reference defining its
scope and responsibilities. The section on corporate governance
contains other details as regards the functioning of the said committee
AUDITORS
M/s. Tilak Chandna & Company, Chartered Accountants, New Delhi hold
office till the conclusion of the ensuing Annual General Meeting and
have expressed their willingness and eligibility to continue, if
re-appointed. You are requested to consider their re-appointment.
Paragraph B (10) of Schedule 18 in the notes on accounts referred to in
the auditors report are self- explanatory and therefore do not call for
any further comments.
DEPOSITS
During the year, the Company did not accept any deposits from the
public within the meaning of Section 58Aofthe Companies Act, 1956.
EMPLOYEES
The Company had no employee drawing remuneration in excess of limits
specified under Section 217(2A) of the Companies Act, 1956.
RESEARCH & DEVELOPMENT
The company recognizes that research and development of new products
are imperative for the company to consolidate, achieve and maintain
leadership position in industry. The R&D department is focused on
developing new and innovative products that cater to varied customer
segments.
Below is the brief on various R&D initiatives during the year and their
status:
Rice for Restaurants:
Delicacies like Biryani, Pulav and Fried Rice all have Basmati rice as
an essential ingredient. Restaurants cook basmati rice in large
quantities and serve as and when ordered. Traditional Basmati often
breaks into small pieces or gets mushy, soft and clumpy when held for
long period of time. To address the need of rice with more shelf life,
a new process with precise controls was developed in . a pilot plant
to ensure that each and every grain was evenly processed. Consistency
and uniformity differentiates this new product from other similar
products in the market. The product and process were unique and the
company has filed a patent application. The product has since been
launched under the brand name "Chefs Secertz".
Fast Cooking Brown Rice: Rice though a great energy food looses its
nutrients when bran is removed during milling. Bran is kept intact in
brown rice. As such the grain is more nutritious than white rice.
Specifically there are greater levels of protein, fat, minerals,
vitamins, and fiber. However because of the bran layer, brown rice can
go rancid quickly and also takes longer to cook. Both these
deficiencies have been removed by creating a new product using a
proprietary new technology. This product will have a shelf life of one
year and take 15-18 minutes to cook, the same as white Basmati rice.
Flavoured Rice: Value added flavoured rice products have been developed
working closely with a seasoning company from Canada. A leading
consumer research company was also retained to carry out qualitative
and quantitative research to fine tune marketing strategies and guage
market preferences. The company plans to launch five different
flavoured rice products under a new brand name shortly.
Rice for diabetics: Starchy (Carbohydrate) foods are not preferred as
diet of diabetics. However, different starch release sugars into blood
stream at different rates. This rate is measured as glecimic index or
Gl value. Foods classified Medium to Low Gl are permissible in diabetic
diet. Basmati rices Gl is lower than that of non-Basmati rice. This is
due to type of starch present in Basmati rice. Research is underway to
reduce rices Gl to a level where it would be classified as medium to
low Gl value.
Exploratory Research into Micro Nutrients in Rice: Research is being
carried out to classify micronutrients with special functional
properties present in the rice grain. This is similar to discovery of
flavanols in chocolate that has turned chocolate from a junk calories
snack to "good for you" food. Fermented rice, sprouted rice etc are
being examined to detect special health impacting properties of rice.
PARTICULARS OF CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION AND
FOREIGN EXCHANGE EARNINGS AND OUTGO
Information as required under Section 217(1 )(e) of the Companies Act,
1956 read with the Companies (Disclosure of particulars in the report
of the Board of Directors)Rules, 1988 are set out hereunder:
Conservation of energy:
Energy conservation is a priority area for the company. Companys
continued efforts to reduce and optimize the use of energy consumption
have shown positive results. Better controls are planned to achieve
further reduction in energy consumption. All the new manufacturing
facilities of the company are equipped with hi-tech energy monitoring
and conservation systems to monitor usage
Power & fuel Consumption
Particulars 2006-07 2005-06
Electricity
Through purchases
Purchased units 8245325 566984
Total Amount (Rs.) 33957376 23758328
Rate/unit (Rs.) 4.12 4.19
Through Diesel generator
Units generated 1263967 279248
Total amount ( Rs.) 40042475 8341137
Cost/Ltr. 31.68 29.87
Technology absorption, adaption and innovation
1. Efforts , in brief, made towards technology absorption, adaption
and innovation: i) Expansion of product range to meet the growing
market needs,
ii) Up gradation in existing products
2. Benefits derived as a result of the above said efforts , e.g
product development, product improvement, cost reduction etc:
The above efforts helped in satisfying consumer needs as well as
business requirements of introducing new products. Research initiatives
of the Company has been seperately dealt with elsewhere in the Report.
3. Imported technology
The company is importing machinery for the projects time to time.
Foreign exchange used and earned
Rupees in lacs
Particulars 2006-07 2005-06
Total Foreign Exchange used 2449.79 4204.99
Total Foreign Exchange earned 17064.55 17109.38
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to Section 217(2AA) of the Companies Act, 1956, the directors
confirm that:
(a) in preparation of the annual accounts, the applicable accounting
standards have been followed and that no material departures have been
made 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 March 31,2007 and of the profit 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 Companies Act, 1956 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 .
HUMAN CAPITAL
The Company values the importance of human capital and continued
emphasis has been placed on creating a working environment that
promotes innovation, enhances work satisfaction and facilitates
personal growth of its employees. The company has been continuously
scaling up its human capital to keep pace with continued growth and
future plans The company has also undertaken initiatives for promoting
HR policies that aim to attract and retain manpower and upgrade skills.
The manpower strength has grown considerably to around 350 employees
globally during the year under review.
ACKNOWLEDGEMENT
The Directors are thankful to the bankers and financial institutions
for their support to the company. The Board places on record its
appreciation of the continued support provided by its valued customers,
suppliers, vendors and partners.
The directors also acknowledge the hard work put in by the employees of
the company in carrying forward the companys vision and mission. The
enthusiasm and continued efforts of the employees have enabled the
company to establish itself as a leading player in the domestic and
global market.
The directors also express their gratitude to the shareholders for
their confidence in the company For and on behalf of the Board of
Directors
V.K.Arora
Chairman & Managing Director
Place: New Delhi
Date: 27th April, 2007
Mar 31, 2006
The Directors have great pleasure in presenting before you, their
sixteenth annual Report together with the audited accounts of the
Company for the year ended 31st March, 2006 along with the Report of
the Auditors thereon.
Financial Results
The working of your company for the year under review resulted in:
(Rupees in Lakhs)
Year Ended Year Ended
31.03.2006 31.03.2005
Gross Income 40456.93 36613.61
Profit before interest, depredation & taxation 3208.93 2681.11
Interest 1436.11 1393.26
Depreciation 572.05 642.72
Provision for taxation
a) Income Tax-current year 100.00 125.00
b) Fringe Benefit Tax-Current year 20.00 -
c) Deferred Tax Liability 44.42 22.73
d) Excess provision of earlier years written off (95.11) -
Net Profit 1131.47 497.39
Last year figures have been re-grouped by the Statutory Auditors.
Business
During the financial year 2005-06, due to Company made substantial
profits because of growth is turnover.
Audit Committee
Membership: In compliance with the requirements of Section 292A of the
Companies Act, 1956, audit committee was re constituted as in para
below;
1. Mr. Suparas Bhandari - Chairman
2. Mr. Satish Bal - Member
3. Mr. Pramod Bhagat - Member
Ms. Monika Chawla Jaggia who is the Company Secretary of the Company
acted as the secretary in the meetings of the Committee.
The Audit Committee takes care the implementation of the accounting
procedures & techniques, reviewing financial reporting systems and the
internal control systems in place. Meetings are scheduled well in
advance. The Committee reviews the report of Statutory Auditors with
their comments along with action taken reports of the Management. The
Committee also invites the senior executives to be present at the
meetings to ensure full participation by the concerned officials.
Fixed Deposits:
During the year, the company has not accepted any fixed deposits and
repayment, if any and there was no delay in re payment of the interest.
Dividend:
The Board of Directors declared Interim dividend of 25% on the paid up
equity capital and the same was paid to the shareholders accordingly
during the year and same.
Other Interests:
The Company has not only exported bulk and branded rice but also
exported other items like sugar, pulses, saffron, crude soya oil,
scrap, walnuts etc. In domestic market also company had done business
in the items other than rice Le wheat, pulses, packing material etc.
Brand Promotion:
The brand name DAAWAT has now got a special recognition not only in the
domestic market but also in the International market. The said brand is
being got registered in many countries.
On national level we have got registration of Heritage(Label), Surbhi
and of other new brands in our favour.
Quality Control & Other R & D Projects:
To sustain in this competitive world its important to supply consistent
product. The company had made continuous efforts to maintain the same
and achieved success also in the same. Our quality control division has
continuously monitored the quality as well as consistency of the
product.
The company believes in keeping itself abreast with the latest
technology and invented new products. R&D unit is working in this
direction and we arc expecting good results by the end of next
financial year.
Initial Public Offer
During the year company had decided to make Public offer and in this
direction steps have been taken. Company is planning to come in to IPO
in the last quarter of this year.
Board of Directors and Changes During The Year:
In accordance with the requirements of Section 256 of the Companies
Act, 1956 and the Articles of Association of your Company, Mr. Surinder
Arora, Director retired by rotation and being eligible, offers himself
for reappointment. Three independent directors have also been taken on
the Board.
Director's responsibility statement:
In accordance with the provisions of section 217(2AA) of the Companies
Act, 1956, your Directors state that:
a) In the preparation of annual accounts, applicable accounting
standards have been followed.
b) Accounting policies selected were applied consistently. Reasonable
and prudent judgements and estimates are made so as to give a true and
fair view of the, state of affairs of the Company as of 31st March 2004
and of the profit of the Company for the year ended on that date.
c) Proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities,
d) The annual accounts of the Company have been prepared on the basis
of a going concern.
Auditors:
The retiring auditors, M/S Tilak Chandna. and Co., Chartered
Accountants, being eligible, offer themselves for reappointment from
the conclusion of this annual general meeting till the conclusion of
next annual general meeting.
Computerisation and Technology Upgradation
During the year efforts to steering Company Information Technology
Capabilities and for operational excellence were continued.
Human Resource Development & Industrial Relations
The Company has always endeavoured to align its business objectives
with those of individual employees. The company is making continuous
investment in learning and development, competitive compensation and
maintaining conducive work environment.
Particulars of Employees:
Since there were no employees who were in receipt of remuneration of
Rs. 24,00,000/per annum or Rs.2,00,000/- per month or more, information
as per Section 217(2A) of the Companies Act, 1956, read with Companies
(Particulars of Employees) Rules, 1975 is not annexed.
Additional Information
The Additional information relating to the conversation of Energy,
Technology Absorption and Foreign Exchange and Outgo required under
Section 217(1)(e) of the Companies Act, 1956, read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988, are given below:
A. Research and Development (R&D):
Company had inOirred approximately 1% of total turnover as an
expenditure on R & D.
B. Conservation of Energy.
Electric Panels (Tricolite) are installed in each and every plant which
are designed on power saving technology.
During packing of pouches we fill Nitrozen Gas in every Pouchc & for
the saine process compressor is required which is installed there in
nitrozen plant but now we use the compressor which are installed with
Gen. sets so we can save Rs. 1500 per day.
All street Lights are automatic with on and off system
C. Technology Absorption
1. Efforts, in brief, made towards technology absorption, adaptation
and innovation.
The company has latest equipments for enhancing and maintaining the
quality of its products.
2. Benefits derived as a result of above efforts Growth in business.
3. The company has imported the following machineries during the year
to enhance the quality of its products and also to decrease cost of
production of its products:
Technology Technology from Year of Status of Technology
Country Import utilization
Paddy Cleaning Denmark 2001 Utilised & Absorbed
Paddy Drying Denmark 2001 Utilised & Absorbed
Silos USA 2002 Utilised & Absorbed
De Husking Japan 2002 Utilised & Absorbed
Polishing Japan 2000 Utilised & Absorbed
Color Sorting Japan 2001 Utilised & Absorbed
Parboiling In House 2002 Utilised & Absorbed
Paddy Steaming In House 2003 Utilised & Absorbed
D. Foreign Exchange Earnings and Outgo
During the year, your company earned the foreign exchange equivalent to
Rs. 1,71,09,3 8,483 from sale of its products.
The Foreign exchange spending for purchases is equivalent to
Rs.28,45,00,749.
Subsidiary Companies
The accounts of your subsidiary company viz. M/s.L.T. International
Ltd, and Sona Global Limited for the year ended 31.03.06 together with
statutory statements pursuant to section 212 of the Company Act 1956
are annexed.
Warm Appreciation:
The Directors thank the customers, vendors, business associates and
bankers for their support to the company.
The Directors also washes to place on record its appreciation for the
valuable contribution of the members of the company's staff at all
levels and look forward to their continued co-operation in meeting the
future challenges.
New Delhi By the Authority of Board
May 17, 2006 (Chairman & Managing Director)