KRBL Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2021

1. "PROPERTY, PLANT AND EQUIPMENT" OF RS.86862 LAKH INCLUDES "RIGHT OF USE OF ASSET" OF RS.6469 LAKH.



2. "CURRENT LIABILITIES-TRADE PAYABLES" OF RS.21936 LAKH CONSISTING OF FOLLOWING TWO COMPONENTS:



- TOTAL OUTSTANDING DUE TO MICRO ENTERPRIES AND SMALL ENTERPRISES : RS. 698 LAKH

- TOTAL OUTANDING DUES OF CREDITORS OTHER THAN MICRO ENTERPRISES AND SMALL ENTERPRISES:

RS. 21238 LAKH


1. Net of movement in capital work-in-progress and capital advances.

2 The above cash flow statement has been prepared under the 'indirect method' as set out in Ind AS 7, "Statement of cash flows'.

3. The above standalone financial results of KRM. Limited (“the Company”) have been reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on 29 June 2021 and have been audited by the statutory auditors of the Company.

4. The financial results have been prepared in accordance with the Indian Accounting Standards find AS1) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, specified in Section 133 of the Companies Act, 20t3.

5. During the year ended 31 March 2019, the Company had received demand notices under section 153A/143(3) of the Income-tax Act, 1961, with respect to assessment years 2010-11 to 2016-17, amounting to Rs. 75,744 lacs and interest thereon Rs. 51,176 lacs, which were contested by the management at CIT (Appeals), New Delhi. During the year ended 31 March 2020, CIT (Appeals) had granted partial relief on certain matters in favor of the Company, vide order dated 11 March 2020, and correspondingly, income tax demand had been reduced by Rs. 69,612 lacs and interest thereon by Rs. 47,424 Lacs.
The Company had filed further appeals before I-Hon’ble Income-tax Appellate Tribunal (ITAT), New Delhi on 18 June 2020 for remaining matters sustained by CIT (Appeals) in respect of income tax demand of Rs. 6,132 lacs and interest thereupon of Rs. 3,752 lacs. The Company had already paid Rs. 21,900 lacs, under protest.
The Income-tax department has also filed appeals in Hon'ble Income Tax Appellant Tribunal, New Delhi in respect of the matters allowed by CIT (Appeals) for appeals filed by the Company. However, a copy of appeal had not been received by the company, in respect of said filing by the department.
The management, based on legal assessment, is confident that it has a favourable case and the remaining demand shall also be deleted at the ITAT level.
Further, the Company has received penalty orders under section 271(1) (c)/ 271AAH (1) for AY 2010-11 to 2016-17 on the matters sustained by CIT (Appeals) of amounting to Rs.11, 896 lacs. The company had filed appeals before CIT (Appeals) in respect of such penalty orders on 24th Match, 2021.
However, Hon'ble Income Tax Appellant Tribunal vide its order dated 12th March, 2021 has granted interim relief till 12 May 2021, which has been extended till 16th July, 2021 to the Company against recovery of such demand.
The auditors of the Company have invited attention to the aforementioned issue in their audit report for the quarter and year ended 31 March 2021.

6. A portion of land parcels and building thereupon, situated at Dhuri, Punjab was attached by the Enforcement Directorate ("ED") vide its order dated 3 July 2019, to the extent of value of Rs. 1,532 lacs in connection with a money laundering investigation.

The Company filed an appeal against the aforementioned order with Appellate Tribunal, PM LA, New Delhi, ("Appellate Tribunal") who vide its order dated 17 January 2020, had restored the possession of the attached land on interim basis in favour of the Company. However, aforesaid attachment would continue till the conclusion of the matter.
Against the order of the Appellate Tribunal, ED had filed an appeal before the Hon’ble High Court of Delhi, which is pending for hearing.
The Company filed an application before the Hon'ble High Court of Delhi for restoration of possession of the land in favour of the Company in accordance with the order dated 17 January 2020 passed by the Appellate Tribunal. The High Court vide its order dated 23 October 2020 has allowed the Company to take physical possession of the said land parcels and building thereupon for specified purpose against the deposit of Rs. 1,113 lacs, (deposited on 5 November 2020), as an interim relief until conclusion of the aforesaid matter, without prejudice to the rights and contentions of the parties to
be decided in the appeal. The management based upon the legal assessments, is confident that it has a favourable case and the said attachment shall be vacated.

The auditors of the Company have invited attention to the aforementioned issue in their audit report for the quarter and year ended 31 March 2021.

7. The Company’s Joint Managing Director, Mr. Anoop Kumar Gupta laid been detained and released on bail by the Enforcement Directorate (‘ED') with regard to the investigation under the Prevention of Money Laundering Act, 2002, for alleged involvement in AgustaWestland case, pursuant to the order of Special Judge, Rouse Avenue Courts dated 30 January 2021 and dated 05 April 2021, respectively.

ED vide their criminal complaint dated 30 March 2021, has made certain allegations against the Company, KRBL DMCC (a subsidiary of KRBL Limited) and Mr. Anoop Kumar Gupta. As per criminal complaint filed it is alleged that M/s Rawasi Al Khaleej General Trading LLC (‘RAKGT') has received proceeds of crime of USD 24.62 million in AgustaWestland ease during the period 2008-2010 which in turn has been transferred to KRBL Limited through KRBL DMCC. Basis the affidavit filed by Balsharaf Group (one of the Customer of the Company) in the Hon'ble High Court of Delhi in the said matter, the amount of USD 24.62 million has been received by Balsharaf Group from RAKGT. Pursuant to this, ED laid attached 1,43,33,221 shares of Balsharaf Group held in KRBL Limited

The management of the Company has taken an opinion from an independent legal counsel and on the basis of the same is of the view that since the investigation is still ongoing no adverse opinion can be drawn.
The Board of Directors of the Company have appointed an independent professional firm to review the aforesaid allegations, by undertaking steps as necessary, in order to assess impact of aforesaid matter, if any, on the standalone financial statements and control environment of the Company. Pending the ongoing investigation on the above matter, no adjustment has been made in the standalone financial statements of the
Company. 'The management of the Company is confident that the above stated matter will be resolved soon.

The auditors of the Company have qualified to the aforementioned issue in their audit report for the quarter and period ended 31 March 2021.

8. The Indian Parliament has approved the Code on Social Security, 2020 which is expected to impact the contributions by the Company towards Provident Fund and Gratuity. The effective date from which the changes arc applicable is yet to be notified and the final rules arc yet to be framed. The Company will carry out an evaluation of the impact and record the same in the financial statements in the period in which the
Code becomes effective and the related rules are published.

9. The outbreak of Coronavirus (Covid-19) has severally impacted business globally including India. Since the nature of business performed by the Company falls under the essential category, the Company continued to operate its manufacturing facilities and distribute its products in accordance with the prescribed guidelines. Though there have been some operational difficulties due to lock down imposed in various regions, the
impact on overall operations have not been significant. Further, the management of the Company has also assessed the impact of the situation on the capital, profitability, liquidity positions etc. giving due consideration to the internal and external factors, and based on its assessment, the pandemic doesn’t have any material impact on the standalone financial statements of the Company. Further, on account of continued spread of COVID-19 in the country, the Company has made timely and requisite changes in business model during the year. 'The Company is continuously monitoring the situation arising on account of COVID-19 and will make appropriate action required, if any.

10. The Board of Directors of the Company in their meeting held on 29 June 2021 have recommended a final dividend of Rs. 3.50 (350%) per paid up equity share of Re. 1/- each, aggregating to Rs. 8239 Lacs for the financial year ended 31 March 2021, subject to approval of shareholders in the ensuing Annual General Meeting of the Company.

11. Amounts for the quarters ended 31 March 2021 and 31 March 2020 are the balancing amounts between audited amounts for the full financial year and the published year to date amounts upto third quarter of the respective financial year, which were subjected to limited review.

12. The figures for the corresponding previous periods/year have been regrouped/reclassified, wherever necessary, to make them comparable.

Anil Kumar Mittal
Chairman & Managing Director