KRBL

Mr. Anil Kumar Chaudhary resigned as an Independent Director effective September 8, 2025, citing concerns focused on Board processes rather than financial or legal compliance. The company expressed shock at his resignation and the nature of his observations, stating that no such issues were raised previously. In response, KRBL has committed to appointing an independent, reputed third-party firm, potentially a Big Four or similar legal firm, to conduct a thorough review of the observations within 30 days. The Board committees will then deliberate on this report and submit recommendations.

KRBL reported a write-off of approximately INR 58 crores in FY25 related to export receivables from financial year 2023 shipments to an African customer. This stemmed from a contract to sell 23,000 metric tons of non-Basmati rice for about INR 79 crores. After an initial payment of INR 17 crores, the remaining INR 62 crores became due by August 2023. Despite receiving an additional INR 6 crores across FY24-25, the balance of INR 58 crores was written off in FY25 due to the counterparty being untraceable. The company had made an expected credit loss provision of INR 18 crores in FY24, with the remainder in FY25, and is now finalizing a recovery plan including arbitration.

Over the past three years, including the current year, KRBL has spent approximately INR 40 crores on Corporate Social Responsibility (CSR) initiatives. As of the call date, the company has an unspent CSR balance of INR 37 crores, which includes the current year's obligation. Management stated that CSR spendings adhere to applicable rules and regulations, with an annual operating plan approved and funds utilized in a phased manner for ongoing projects, ensuring careful evaluation and proper due diligence for implementing agencies.

The company discussed a proposal to change its Memorandum of Association's object clause to include land monetization and real estate projects. This move is intended to unlock shareholder value and utilize available funds more competently. While one director recorded dissent, the resolution was approved by a majority in the audit committee and the board. This proposal is now slated for shareholder approval at the upcoming meeting, with detailed plans to be disclosed in due course^⏳.

Currently, KRBL's board comprises three Independent Directors and four members related to the promoter family. Management confirmed they are actively seeking a replacement for the resigned Independent Director and aim to fill this gap within three months. Regarding compensation, the company stated that variable pay and annual increments for its eight persons holding office or place of profit (four Executive Directors and four key vertical heads) are recommended by the NRC and approved by the Board, adhering to shareholder-approved limits and considering performance, industry benchmarking, and responsibility.

The resignation of the Independent Director, effective September 8, 2025, was reported to the stock exchanges on September 13, 2025, leading to questions about the delay. Management explained that they were in 'shock' and 'puzzled for 3-4 days' upon receiving the letter, which they described as unexpectedly 'hostile'. This emotional reaction was cited as the reason for the delay in reporting the matter, which they believe was within statutory timelines.