KLRF adheres to minimum corporate governance standards
CRISIL’s fundamental grading methodology includes a broad assessment of corporate governance and management quality, apart from other key factors such as industry and business prospects, and financial performance. CRISIL Equities also analysed the company’s shareholding structure, board composition, typical board processes, disclosure standards and related-party transactions. Any qualifications by regulators or auditors also serve as useful inputs while assessing corporate governance.
Board composition and processes meet minimum standards KLRF’s board comprises seven directors, four of whom are independent. In addition to Mr Suresh Jagannathan (MD) and his mother Mrs J. Chandrakanthi (Vice Chairman), the rest of the board comprises qualified professionals who have also been associated with the company for a long time.
The minimum corporate governance standards are reflected in the board’s constitution and by the presence of audit and other committees, which support the board processes. Based on balance sheet disclosures, attendance record of independent directors and their level of engagement in company affairs, it appears that corporate governance meets the minimum standards.
Group company in flour milling business creates conflict of interest Cape Flour Mills Pvt Ltd is a 100% promoter-owned company in Nagercoil, Kanyakumari engaged in flour milling. Its revenues are approximately half of that of KLRF’s flour milling division. Cape is currently utilising the “Kuthuvillaku” trademark under licence from KLRF for wheat flour and operates in different geography.