The Board of Directors has pleasure in presenting the 28th Annual Report and AuditedStatement of Accounts for the year ended 31st March 2016 together with the IndependentAuditors Report..
1. FINANCIAL RESULTS : (Rs. in Lakhs)
|Particulars ||For the year ended March 31 2016 ||For the year ended March 31 2015 |
|Sales & Service ||11120.09 ||10548.02 |
|Less: Expenditure ||10823.38 ||10190.26 |
|Profit before Interest and Depreciation ||296.71 ||357.76 |
|Less: Interest ||151.05 ||158.95 |
|Less: Depreciation ||116.26 ||98.10 |
|Profit Before Taxation ||29.41 ||100.70 |
|Less: Provision for Taxation ||7.61 ||16.23 |
|Profit After Taxation ||21.80 ||84.47 |
2. STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK:
The Company continued to perform under certain challenges and hurdles. Although overallrevenue marginally increased cheaper raw materials including grains were damaged due tounseasonal rain. Higher depreciation as per the requirements of the Companies Act 2013was provided for. This led to reduction in the profit as compared to the
The Company has undertaken expansion program which is expected to be completed by thisyear end and other avenues of business are being explored.
Low demand because of poor monsoon in the last
2 years affected the Sales and Revenue.
The Company continued to operate with an optimum mix of different resources. Businesswith General Mills continued during the year under review. Timely refurbishing ofmachineries and new technology continued. Emergence of competition in the recent past is acause of concern to your Company.
3. MANAGEMENT DISCUSSION AND ANALYSIS:
a. Industry outlook and developments The food processing industry in India is a sunrisesector that has gained prominence in recent years. Availability of raw materials changinglifestyles and relaxation in policies has given a considerable push to the industrysgrowth. This sector is among the few that serves as a vital link between the agricultureand industrial segments of the economy. A thrust to the food processing sector impliessignificant development of the agriculture sector and ensures value addition to it.
b. Business Overview: The Company has achieved a turnover of Rs. 11120.09 Lakhs(previous year Rs. 10548.02 Lakhs) for the financial year ended 31.03.2016 with a netprofit of Rs. 21.80 Lakhs (previous year Rs. 84.47 Lakhs).
c. Opportunities: The Company is looking at Product mix addition in new products.
d. There is no risk expected during this year.
e. Outlook: The Company will strive for Better Values.
f. Internal Control System: The Company has effective control system commensurate withits operations. The Company has internal audit system through outside agency withqualified Chartered Accountant carries out the audit based on a planned program. Theaudit also reviews the adequacy and effectiveness of the internal control system and thefollow up action taken pursuant to audit observation. g. Human Resource Development:
The Company conducts regular training programs both internally and externally forEmployees at all levels to improve the skills and overall development. Employeesrelations at all the levels continue to remain cordial.
4. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There were no material events reported subsequent to the date of financial statements.
5. CHANGE IN THE NATURE OF BUSINESS:
There were no changes in the nature of business during the year under review asprescribed in Rule 8(ii) of the Companies (Accounts) Rules 2014.
In view of the depleted profitability the Directors do not recommend any dividend.
The Board has not proposed to carry any amount to its reserves.
8. SHARE CAPITAL:
The paid up Equity Share capital as on 31st March
2016 was Rs.300.29 Lakhs. During the year under review the Company has not issuedshares with differential voting rights nor granted Stock Options nor Sweat Equity.
9. CORPORATE SOCIAL RESPONSIBILITY:
Since the Company does not meet the criteria for the applicability of Section 135 ofthe Companies Act read with the Companies (Accounts) Rules 2015 this clause is notapplicable.
10. RISK MANAGEMENT:
The Company has formulated a Risk Management Policy and a mechanism to inform the Boardabout risk assessment and mitigation procedures. Also undertakes periodical review toensure that executive management controls risks by means of a properly designed framework.
The details of Committee and its terms of reference are set out in the CorporateGovernance Report forming part of the Boards Report.
11. VIGIL MECHANISM / WHISTLE BLOWER POLICY:
The Company has a Whistle Blower Policy for vigil mechanism pursuant to the provisionsof Sections 177(9) and (10) of the Companies Act 2013 and as per Regulation 4(2)(d)(iv)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which isavailable on the website of the Company athttp://www.sunilagro.in/sunil-agro-foods-whistle-blower-policy and there were no casesreported during last year.
12. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES/ JV:
The Company does not have any Subsidiary Joint Venture or Associate Company.
13. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mrs. Pinky Jain Non-Executive Director retires by rotation at theforthcoming Annual General Meeting and is eligible for reappointment.
Based on the recommendations of the Nomination and Remuneration Committee Mr. PramodKumar S was re-appointed as Executive Director of the Company during the year. Thisappointment along with Mr. B. Shantilal as Managing Director may be considered by theShareholders at the ensuing Annual General Meeting.
The Company is yet to appoint Company Secretary and efforts are on towards thisdirection.
14. BOARD MEETINGS:
The Meetings of the Board are held at regular intervals with a time gap of not morethan 120 days between two consecutive Meetings. During the period under review Four (4)Board Meetings were held on 30th May 2015 3rd August 2015 7th November 2015 and 12thFebruary 2016. The Agenda of the Meeting is circulated to the Directors in advance.Minutes of the Meetings of the Board of Directors are circulated amongst the Members ofthe Board for their perusal. The details of other Committee Meetings during the year2015-16 are given in the Corporate Governance Report
15 . CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:
A separate Report on Corporate Governance in terms of Regulation 34 of the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred as "Listing regulations") along with a Certificatefrom a Practising Company Secretary regarding compliance to the Conditions stipulatedunder Chapter IV of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed as Annexure - I.
16. ANNUAL BOARD EVALUATION:
Pursuant to the provisions of the Companies Act 2013 and Listing Regulations theBoard has undertaken an annual performance evaluation of its own performance itsCommittees and the Directors individually. The manner of evaluation has beenexplained in the Corporate Governance Report.
Further the Independent Directors at their exclusive meeting held during the yearreviewed the performance of the Board its Chairman and Non-Executive Directors and otheritems as stipulated under the Listing Regulations.
17. DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:
(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year and ofthe profit and loss of the company for that period;
(c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets 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 thecompany and that such internal financial controls are adequate and were operatingeffectively.
(f) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively..
18. INTERNAL FINANCIAL CONTROL:
The Company has an Internal Control System commensurate with the size scale andcomplexity of its operations.
19. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:
The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he / she meets the criteria ofIndependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. (Annexure II).
20. EXTRACT OF ANNUAL RETURN:
As required pursuant to Section 92(3) of the Companies Act 2013 and Rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual return inMGT-9 is annexed as Annexure III as a part of this Annual Report.
Your Company has not invited/accepted/renewed any deposits from the public as definedprovisions of Companies Act 2013 and accordingly there were no deposits which were duefor repayment on or before 31st March 2016.
22. RELATED PARTY TRANSACTIONS:
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 for the Financial Year 2015-16 in the prescribedformat AOC 2 is enclosed as Annexure IV as a part of this Annual Report.
23. MATERIAL CHANGES & COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANYBETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT:
There are no material changes and commitments between the end of the Financial Periodand the Date of the Report which affect the financial position of the Company:
24. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN OR SECURITY PROVIDEDBY THE COMPANY:
The Company has duly complied with the provision of Section 186 of the Companies Act2013 and it has taken:
|Secured Loans: ||Rs. 21977787/- |
|Unsecured Loans: ||Rs. 9617376/- |
|Current/Non-Current Investments: ||Rs. 5107577/- |
|Guarantees: ||Nil |
Securities Extended: Secured by certain immovable properties of the Companyhypothecation by way of first charge on companys stock book debts and machineryand vehicles.
The Auditors Messrs MSSV & Co. Chartered Accountants Bangalore were appointedStatutory Auditors of the Company for a term of 3 years to hold office from theconclusion of 27th Annual General Meeting held on 15th September 2015 until theconclusion of 29th Annual General Meeting subject to ratification of their appointment atevery subsequent Annual General Meeting.
26. SECRETARIAL AUDIT:
Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Vijayakrishna KT Bangalore Practising Company Secretary to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed asAnnexure V to this Report.
in the capital market is the reason for valuing the investments at cost. In view of theadequate reserves and surplus available in the books of the Company the Board has decidedthat no provisions are required.
28. PARTICULARS OF EMPLOYEES:
The information required pursuant to Section 197 read with Rule 5(1) and (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014Details/Disclosures of
Explanations by the Board on the comments of Secretarial Auditor:
|Auditor Qualifications made by Secretarial ||Explanations by the Board |
|1. Section 203 of the Companies Act 2013 is not complied with as the Company being listed company has not appointed whole time qualified Company Secretary. ||The Company has infused efforts to recruit qualified Company Secretary; however no suitable candidate could be identified. |
|2. Compliance on Secretarial Standards needs to be strengthened. ||The Company has noted and has taken care to adhere with Secretarial Standards SS-1 and SS-2 issued by the Institute of Company Secretaries of India. |
|3 Certain policies and information are pending to be uploaded in the official website of the Company. ||The Company has adopted all the required Policies and the Company will take due care to comply with this in future. |
|4 Certain returns/registers are required to be maintained under the General Laws like Karnataka Shops & Commercial Establishments Act Factories Act and other HR related Acts and Environmental Acts. ||The Company will ensure to comply with the same in future. |
|5 Certain web links were not made available in the Annual Report of previous year. ||The Company has adopted all the required Policies and the Company will take due care to comply with this in future. Further the Company has provided details of the same in the current year Annual Report. |
27. EXPLANATION BY BOARD ON THE COMMENTS BY AUDITORS:
As per Accounting Policy number 2.8 the Company has valued the investment at cost. Ason March 31 2016 there is a fall in the value of investments to the extent of Rs.28.10Lakhs. The Company has created provision for fall in the value of investment only to theextent of Rs.0.92 Lakhs in the earlier years. The impact of non-provision for the fall inthe value of investment is:
Profit is overstated to the extent of Rs.27.18 Lakhs and investment are overstated tothe same extent.
Boards Response: The temporary nature of fluctuations Ratio of Remuneration toeach Director to the median employees remuneration is annexed as Annexure VIto this report.
Further the statement showing details in respect of employees of the Company are givenin the Annexure VI forming part of the Report.
29. LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the year 2016-2017 toBSE Limited where the Companys Shares are listed.
30. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNALS IMPACTING GOINGCONCERN STATUS OF COMPANY:
No order was passed by any court or regulator or tribunal during the period underreview which impacts going concern status of the Company.
31. COMPOSITION OF AUDIT COMMITTEE NOMINATION AND REMUNERATION COMMITTEE &STAKEHOLDERS RELATIONSHIP COMMITTEE:
Following are the composition of various Committees:
i) Composition of Audit Committee:
|1. Mr. AVS Murthy ||Chairman |
|2. Mr. Shailesh Siroya ||Member |
|3. Mr. Pramodkumar S ||Member |
ii) Composition of Nomination and Remuneration Committee:
|1. Mr. AVS Murthy ||Chairman |
|2. Mr. Shailesh Siroya ||Member |
|2. Ms. Pinky Jain ||Member |
iii) Composition of Stakeholders Relationship Committee:
|1. Mr. AVS Murthy ||Chairman |
|2. Mr. Shailesh Siroya ||Member |
|2. Ms. Pinky Jain ||Member |
33. CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE OUTGO:
(A) Conservation of Energy:
1. Energy Conservation measures taken:
The Company has a system to monitor consumption of energy and all efforts forconservation of energy wherever possible are made and have installed Solar Energy lightsin the plant. Energy electric Tubes have been installed to save energy. The Company hasalso installed energy efficient meters controlling waste of power.
2. Additional investments and proposal being
implemented for reduction and consumption of energy and the impact of the same in thecost of production of goods.
3. Energy Audit done
Investment was made in machinery designed for low energy consumption and such machinerywas in operation in the period under review.
(B) Technology Absorption:
The Company is committed to maintaining its standard and high quality of its productionand is constantly engaged in efforts to confer to the guaranteed customer satisfaction.
(C) Foreign Exchange Earnings and Outgo:
The Company expended Rs. 5101200/- in foreign exchange during the year under reviewand the Companys earnings in foreign currency is nil during the year under review.
33. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.
The following is a summary of sexual harassment complaints received and disposed-offduring the year 2015-16.
No of complaints received: NIL No of complaints disposed: NIL
The Directors place on record their appreciation for valuable contribution made byemployees at all levels active support and encouragement received from Government ofIndia Government of Karnataka Companys Bankers Customers Principals BusinessAssociates and other Acquaintances.
Your Directors recognize the continued support extended by all the Shareholders andgratefully acknowledge with a firm belief that the support and trust will continue in thefuture also.
By order of the board
For SUNIL AGRO FOODS LIMITED
|Place : Bangalore ||SHANTILAL BANSILAL ||PRAMOD KUMAR S |
|Date : 01.08.2016 ||Managing Director ||Executive Director |
| ||DIN: 00719808 ||DIN: 00719828 |