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Agro Tech Foods Ltd.

BSE: 500215 Sector: Industrials
NSE: ATFL ISIN Code: INE209A01019
BSE 00:00 | 11 Aug 774.10 -22.50






NSE 00:00 | 11 Aug 775.15 -25.10






OPEN 797.00
52-Week high 1126.20
52-Week low 742.90
P/E 109.96
Mkt Cap.(Rs cr) 1,886
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 797.00
CLOSE 796.60
52-Week high 1126.20
52-Week low 742.90
P/E 109.96
Mkt Cap.(Rs cr) 1,886
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Agro Tech Foods Ltd. (ATFL) - Director Report

Company director report

Your Directors hereby present their Annual Report together with the audited accountsof the Company for the financial year ended March 31 2022.


1.1 Results

Your Company's performance for the year ended March 31 2022 is as follows:

Particulars 2021-22 2020-21
Net Sales 9148.25 8913.31
Other Income* 38.26 22.59
Total Income 9186.51 8935.90
Operating Expenses 8625.79 8318.59
PBDIT 560.72 617.31
Depreciation 203.71 180.04
Interest 24.24 17.74
Profit before Tax & exceptional item 332.77 419.53
Exceptional item 20.11 -
Profit Before Tax (PBT) 352.88 419.53
Taxes 92.07 116.51
Profit After Tax (PAT) 260.81 303.02
Other Comprehensive income # 0.27 7.66
Total Comprehensive income 261.08 310.68

*Includes other operating revenue

# Net of taxes

The Strategic Foods business of ATFL continued to show strong volume driven RevenueGrowth of 15% closing the year with over Rs 400 crore of Net Sales though marginsweakened due to significant commodity price increases. The improved competitiveness of thePremium Edible Oils business as a result of price corrections in FY'21 meant that theCompany was able to arrest a multi-year decline in Oils Gross Margin. And lastly yourCompany further reduced the revenue exposure to commodity fluctuations with thefranchising of the Crystal brand effective November 2021.

1.2 Key Indicators

FY'22 Gross Margin was lower than PY by Rs10 Crore with a Rs13 Crore decrease in FoodsGM partly offset by a Rs3 crore increase in Edible Oils GM.

With a 15 year Revenue CAGR in the Foods business of 19% Your Company is clearly ontrack to be amongst India's Best Performing Most Respected Food Companies. A diverseportfolio of products in 5 fast growing Food categories and superior value propositionscombined with a moderate A&P model means that strong growth is clearly sustainabledriven by powerful inhouse manufacturing capabilities best in class distribution networkand a robust flow of innovation.


Given the continued strong cash flow of the Company relative to the limited ongoingCapital Expenditure of the Company your Directors are pleased to recommend a Dividend ofRs 3/- per equity share of the face value of Rs 10/- each for the year ended March 312022 subject to the approval of the shareholders at the Annual General Meeting to be heldon June 29 2022.


Particulars 2021-22 2020-21
a) At the beginning of the year 3407.13 3167.39
b) Add: Profit for the year 260.81 303.02
c) Add: Other Comprehensive
Income (net of tax) 0.27 7.66
d) Less: Dividends* 71.43 70.94
e) At the end of the year 3596.78 3407.13

* Dividend given to Agro Tech ESOP Trust excluded of

Rs 1.68 mm (Previous year Rs 2.16 mm).

Pursuant to Regulation 43A of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (hereinafter referred to as ‘Listing Regulations')the Company adopted a Dividend Distribution Policy vide its Board meeting held on 22ndJuly 2021 in terms of the requirements of the Listing Regulations. The Policy isavailable on the Company's website at https:/ /


The Directors confirm that :

(a) in the preparation of the annual accounts the applicable accounting standards havebeen followed along with proper explanation relating to material departures; (b) they haveselected such accounting policies and applied them consistently and made judgments andestimates that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company at the end of the financial year and of the profit and loss ofthe Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the company and for preventing and detecting fraud and otherirregularities; (d) they have prepared the annual accounts on a going concern basis; (e)they have laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and were operating effectively; and (f) theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.

4. COVID- 19/Ukraine War

FY'22 was the second year of Covid-19 and Your Company continued to navigate thepandemic in a manner that supported the safety of employees while undertaking the tasksrequired to support the Company's strategic growth objectives. When required activities ofvulnerable groups were restricted at the Factories and Field Sales and market workingcurtailed in the field to minimize risk to employees. Both the Corporate Office atGurugram and the Registered Office at Secunderabad have been largely closed and employeesencouraged to Work from Home. The last 2 years have seen significant supply chainchallenges which the Company has successfully navigated to ensure continued strong growthin the Foods business. The war in Ukraine starting February 2022 has further escalateduncertainties in the supply chain. However your Company is confident that it will be ableto navigate these new challenges and remain on track to join the ranks of India's BestPerforming Most Respected Food Companies with an increasingly diversified portfoliodesigned to mitigate risks and ensure a consistent and strong performance.


In terms of the Listing Regulations a report on Corporate Governance along withAuditors' Report on its compliance is annexed forming part of the Annual Report.

Additionally this contains compliance report signed by the CEO of the Company inconnection with compliance with the Code of Conduct and also CEO/CFO Certification asrequired by SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

In line with the requirements of Companies Act 2013 your Company has constituted theBoard Committees and has in place all the statutory Committees required under the law.

Details of Board Committees along with their terms of reference composition andmeetings of the Board and Board Committees held during the year are provided in theCorporate Governance Report.



Based on feedback from members on the Annual Report and Accounts this report includesMD&A as appropriate so that duplication and overlap between the Directors' Report anda separate MD&A is avoided and the entire material is provided in a composite andcomprehensive document.


Continued and increasing involvement by consumers with Packaged Foods means that theFood Industry is likely to demonstrate strong growth in the coming years. Key to securinga profitable slice of this pie will however be broad based manufacturing capabilities witha steady flow of innovation both of which will remain a focus for Your Company.

FY'22 continued to see significant disruption of the traditional trade by investmentsin the ecommerce space providing as well an opportunity for newer and smaller players inthe Food industry. With the gradual lifting of restrictions and reduced fear we aresteadily seeing a more normal behavior and increased stability at a channel level with theright balance between traditional trade brick and mortar stores and the online space. Thepowerful distribution network that Your Company has built with a retail coverage of440000 stores will remain a significant moat to support our product portfolio in thecategories of choice.


The continued growth of the Indian Foods market represents an enormous opportunity fora steady growth in Revenues and Profits for Your Company. The Company's powerful Foodsportfolio allows representation today in 5 fast growing categories –Ready to CookSnacks Ready to Eat Snacks Spreads Breakfast Cereals and Chocolates. Your Directorsbelieve that these categories are sufficient to power the Company into one of thestrongest Food Companies in India.

The primary threat to your Company's P&L has been the significant contribution ofthe Edible Oils business. Over time however this has been significantly reduced and inFY'22 the Foods business contributed to 44% of Sales and 56% of Gross Margin.


Your Company has registered a consistent growth of 19% (CAGR) in the Foods businessover the last 15 years through selective entry into fast growing categories. With acontinued focus on consumer acquisition through a strong Value for Money proposition yourCompany is able to deliver significantly superior products to competition at verycompetitive prices. This has enabled the Company to significantly expand the productportfolio including the launches in FY'22 of Ready to Cook Pasta & Noodle Kits andPeanut Centre Chocolates.

In FY'22 the Ready to Cook category successfully crossed the Rs250 crore mark inRevenues. Increased competitive activity hindered the growth of the Spreads category butall other categories registered strong growth with necessary actions being taken on theSpreads business.

The Company was successfully able to leverage in FY'22 the high-quality DistributionNetwork in place with a coverage of 440000 stores to enhance the distribution of itsportfolio. Media spends however saw some moderation to help manage the significantcommodity inflation the Company experienced during the year.

Your Company purchased land adjacent to two of its existing facilities during the year– at Kothur in Telangana and at Dhaka in Bangladesh. The land parcels will enable theCompany to increase the storage capabilities for Raw Materials/expand Production Space andthereby improve efficiencies in the supply chain and support Growth.


10.1Ready to Cook Snacks:

Revenues from the Ready to Cook Snacks business increased by 17% in FY'22 driven by a14% Volume growth with enhanced Pricing on the premium ranges of Popcorn and Sweet Corn.The Company also introduced a range of Mini Meal Kits including Pasta and Noodles withPrepared Sauces. These have been very well received in the market and the Company willleverage the considerable expertise built in the development of the Popcorn category toexpand the Meal Kits category.

10.2Ready to Eat Snacks:

Revenues from the RTE Snacks business were higher than PY by 20% driven largely byVolume Growth in the RTE Popcorn category where the Company saw reduced competitiveintensity. With 100% of low cashring SKU's of RTE Snacks now being shipped directly fromthe factories the focus is now on ensuring the right combination of Full Truck LoadProduct Mix with Distance from the Plants. FY'23 will also see the addition of ExtrudedPanned products which will further help to improve the P&L of this category.

10.3Spreads & Dips:

Revenues from the Spreads business decreased by 2% as a consequence of low volumegrowth in Peanut

Butter and price reductions in select SKU's to bring back Volume Growth and gain thebenefits of Operating Leverage at the Company's plant at Jhagadia. The results of theactions are already visible in Modern Trade and E-Commerce where pricing realignment takeless time to be implemented. In Traditional Trade as well competitive presence isbeginning to wane and the Company expects to deliver the strong growth in FY'23.

10.4Breakfast Cereals:

Post the disruption caused by the 2nd Wave of Covid-19 the Company saw steady QOQgrowth in this category as it seeks to build a profitable presence in the Rs 3500 croreBreakfast Cereals category. Focus is on distribution expansion and trial generation of theCompany's products which offer exceptional quality with outstanding value.


The Company saw continued strong growth in the Coconut Duo Chocolate product driven bythe Rs. 10 offering. FY'23 also saw the commencement of testing of a Peanut Duo Variantwhich has also been extremely well received. Focus is now on increasing capacity withdoubling of capacity planned in Q1 FY'23 and then doubling again in Q3 FY'23. TheCompany expects the category to be a sizeable and profitable contributor to the totalFoods business going forward.

10.6Premium Edible Oils/Staples:

The Company's new price premiums have been well accepted which is visible in the VolumePerformance of FY'22. Work is now underway to assess how to use this Category tocontribute not only in financial terms to the P&L but as well in operational terms inthe development of the Foods business.

10.7Mass Edible Oils/Staples:

The Company further reduced the exposure to revenue fluctuations due to this categorywith the franchising of Crystal effective November 2021. Going forward the Company willfurther evaluate options in this business.


Innovation remains the driver of growth for your Company and we continue to makeinvestments which ensure that we deliver to consumers products which address unmetconsumer needs.


A Statement giving details of conservation of energy technology absorption and foreignexchange earnings and outgo in accordance with Rule 8(3) of the Companies (Accounts)Rules 2014 is attached as Annexure A and forms part of this report.


Engaged Employees are critical to the success of your Company. In FY'22 your Companysuccessfully achieved an Engagement Score of 78%. The continuing strong momentum in theCompany driven by solid Foods growth and Innovation has helped to achieve this level.

Your Company will continue to ensure that we have a highly engaged and productiveorganization to deliver against our vision of being amongst "India's Best PerformingMost Respected Food Companies"


The details of significant changes in the key financial ratios are as follows:

Particulars 2021-22 2020-21 %Variance
(i) Debtors Turnover Ratio 15.73 15.95 (1.4%)
(ii) Interest Coverage Ratio 15.56 24.64 (36.9%)
(iii) Current Ratio 1.96 2.34 (16.3%)
(iv) Inventory Turnover Ratio 4.52 6.22 (27.3%)


The Return on Net worth as compared to the immediately previous financial year is asfollows:

Particulars 2021-22 2020-21
(i) Return on Net Worth 5.67% 6.98%


The information required under Section 197(12) of the Companies Act 2013 read withRule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel)Amendment Rules 2016 thereunder in respect of the top ten employees in terms ofremuneration drawn and employees who were in receipt of remuneration aggregating Rs1.02crores or more or were employed for part of the year and were in receipt of remunerationaggregating Rs8.50 lakhs per month or more during the financial year ending March 31 2022is provided in the Annexure B forming part of this Report.


Loans guarantees and investments covered under Section 186 of the Companies Act 2013form part of the notes to the financial statements provided in this Annual Report.


All contracts or arrangements or transactions entered into by the Company during thefinancial year with related parties were in the ordinary course of business and on anarm's length basis. During the year the Company had not entered into any contract orarrangement or transaction with related parties which could be considered material inaccordance with the policy of the Company on materiality of related party transactionsCompanies Act 2013 and Listing Regulations. Form AOC-2 containing the note on theaforesaid related party transactions is enclosed as Annexure C and forms part ofthis Report.

The Policy on materiality of related party transactions and dealing with related partytransactions as approved by the Board may be accessed on the Company's website.: c o d e - o f - c o n d u c t / p o l i c y _ d e a l i n g_related_party_transactions.pdf The related party disclosures including detail oftransaction with Promoter group form part of the financial statements provided in thisAnnual Report.


The Company vide special resolution in the Annual General Meeting of the Company heldon July 25 2012 had approved "Agro Tech Employee Stock Option Plan"("Plan"). The Plan was further modified vide special resolution in the AnnualGeneral Meeting held on July 24 2015 to align it with the provisions of SEBI (Share BasedEmployee Benefits) Regulations 2014 ("SEBI Regulations"). The Plan is furtheramended and approved by the Nomination and Remuneration Committee in its meeting held onApril 28 2022 to the extent to align it with the mandatory provisions of SEBI (ShareBased Employee Benefits and Sweat Equity) Regulations 2021 ("SEBI Regulations")and other applicable provisions for the time being in force. The Plan is administered byAgro Tech ESOP Trust ("Trust") under the supervision of the Nomination andRemuneration Committee of the Board of Directors of the Company ("Committee").The Plan is in compliance with the provisions of SEBI Regulations. Further details of thePlan are available on the website of the Company at


Spend on the Company's Corporate Social Responsibility Program "Poshan" hadto be curtailed due to closure of Anganwadi centers as a consequence of Covid-19.

For FY21-22 the total amount required to be spent under CSR during the year was Rs9445000/- which is 2% of average net profits of the Company during the three immediatelypreceding financial years as required under section 135 of the Companies Act 2013 andrelevant rules thereunder. The Company has transferred the required CSR amount ofRs9445000/-to the Prime Minister's National Relief Fund in the month of March 2022. Theunspent CSR amount of

Rs 9584450/- for FY20-21 was also transferred by the Company to Prime Minister'sNational Relief Fund in the month of September 2021.

As per Companies Act 2013 as amended by Companies (Amendment) Act 2017 allCompanies having net worth of Rs 500 crore or more or turnover of Rs 1000 crore or moreor a net profit of Rs 5 crore or more during the immediately preceding financial year willbe required to constitute a CSR Committee of the Board of Directors comprising three ormore directors at least one of whom will be an Independent Director. Aligning with theguidelines the Company has constituted a CSR Committee comprising of Lt. Gen. D.B.Singhas Chairman Mr. Sanjaya Kulkarni Mr. Narendra Ambwani Mr. Arun Bewoor Ms. VeenaGidwani and Mr. James Patrick Kinnerk as its Members. The Committee is responsible forformulating and monitoring the CSR Policy of the Company. The CSR Policy of the Companyas approved by the Board of Directors is available on the Company's Website: ATFL%20CSR%20POLICY.pdf The Annual Report onCSR activities is annexed here with as Annexure D and forms part of this Report.


The Company has formulated and adopted a revised Risk Management Policy which has beenapproved and adopted by the Board at the Board Meeting held on October 21 2021 pursuantto SEBI (LODR) (Second Amendment) Regulations 2021 which requires top one thousandlisted Companies (based on market capitalization of every financial year) to formulate anddisclose a Risk Management Policy. The testing in accordance with the laid down policy isbeing carried out periodically. The Senior Management has been having regular Meetings forreassessing the risk environment and necessary steps are being taken to effectivelymitigate the identified risks. A Risk Management Committee also has been constituted witha Committee of the Directors and senior management to address issues which may threatenthe existence of the company.


The Vigil mechanism under Whistle Blower Policy has been approved by the Board ofDirectors on October 17 2014. This Whistle Blower Policy of the Company providesopportunities to employees to access in good faith to the Management concerns (incertain cases to the Audit Committee) in case they observe unethical or improper practices(not necessarily a violation of law) in the Company and to secure those employees fromunfair termination and unfair prejudicial employment practices. The policy has also beenuploaded on the website of the Company :


Your Company continues to focus on the use of technology and automation to driveproductivity to work efficiently with our Customers & Suppliers while making availableto our Employees robust information to ensure best in class analysis of the business andidentification of opportunities to improve shareholder return.


24.1 Internal Controls

The Company has a robust system of internal controls commensurate with the size andnature of its operations to ensure orderly and efficient conduct of business. Thesecontrols ensure safeguarding of assets prevention and detection of fraud and erroraccuracy and completeness of accounting records timely preparation of reliable financialinformation and adherence to the Company's policies procedures and statutory obligations.

Your Company has established standard operating procedures for smooth and efficientoperations in addition to ensuring internal controls. Your Company has also documented:

• A comprehensive Code of Conduct for the Board Members and employees of yourCompany

• An Employee Handbook

• Whistle Blower Policy defined to provide channel of communication without fear

• Comprehensive frame work for Risk Management and

• CEO/CFO Certification for Financial Reporting Controls to the Board The Companyhas appointed M/s. Grant Thornton Bharat LLP as Internal Auditors to ensure adequacy ofinternal control systems and make recommendations there to. Audit reports are circulatedto management which takes prompt action as necessary.

The Audit Committee of the Board meets periodically to review the performance asreported by Auditors. The Internal and External Auditors also attend the meetings andconvey their views on the adequacy of internal control systems as well as financialdisclosures. The Audit Committee also issues directives and/or recommendations forenhancement in scope and coverage of specific areas wherever felt necessary.

24.2. Cautionary Statement

Statements in this Directors' Report and Management Discussion and Analysis describingthe Company's objectives projections estimates and expectations may constitute"forward looking statements" within the meaning of applicable laws andregulations. Actual results may differ materially from those either expressed or implied.

24.3 Outlook

With a Foods Turnover in excess of Rs 400 crore and a proven 15 year CAGR of 19% yourCompany is clearly well positioned to be a major player in the Foods industry in India.This proposition is further strengthened by a strong portfolio and a powerful retaildistribution network which will ensure that with a relentless pursuit of Revenue andMargin goals on the Foods business your Company will become a significant player in theIndian Foods Industry and join the ranks of India's Best Performing Most Respected FoodCompanies.


In accordance with the provisions of Article 143 of the Articles of Association of theCompany in so far as it is not inconsistent with the relevant provisions of the CompaniesAct 2013 Mr. James Patrick Kinnerk retires by rotation and being eligible offershimself for re-appointment. A brief profile of Mr. James Patrick Kinnerk is given in thenotice of the 35th Annual General Meeting.

During the year Ms. Denise Lynn Hansen had resigned as Director of the Company. TheDirectors placed on record their appreciation of the valuable services rendered and wisecounsel given by Ms. Denise Lynn Hansen during her tenure of Office as Director. Mr. PedroLabayen de Inza is being appointed as an Additional Director of the Company pursuant tothe provisions of Section 161(1) of the Companies Act 2013 and Article 130 of theArticles of Association of the Company.

He holds office up to the date of the ensuing Annual General Meeting. Notice togetherwith the deposit as required under Section 160 of the Companies Act 2013 has beenreceived from a Member proposing the appointment of Mr. Pedro Labayen de Inza as Directorof the Company at the Annual General Meeting. The Nomination and remuneration committeehas recommended the appointment of Mr. Pedro Labayen de Inza as a Director of the Company.

A brief profile of Mr. Pedro Labayen de Inza is given in the notice of the 35th AnnualGeneral Meeting. All the Independent Directors of the Company have also given aconfirmation to the Company as provided under Section 149(6) of the Companies Act 2013and Regulation 25(8) of SEBI (LODR) Regulations 2015 that: a. they are persons ofintegrity and possess relevant expertise and experience; b. i. they are or were not apromoter of the Company or its holding subsidiary or associate Company or member of thepromoter group of the company; ii. they are not related to promoters or other directors inthe Company its holding subsidiary or associate Company; c. they do not have or had anypecuniary transaction or relationship other than remuneration as such director or havingtransaction not exceeding ten percent of their total income or such amount as may beprescribed with the company its holding subsidiary or associate Company or theirpromoters or directors during the three immediately preceding financial years or duringthe current financial year; d. none of their relatives-(i) is holding any security of orinterest in the company its holding subsidiary or associate company during the threeimmediately preceding financial years or during the current financial year: Provided thatthe relative may hold security or interest in the company of face value not exceeding Rsfifty lakh or two per cent of the paid-up capital of the company its holding subsidiaryor associate company or such higher sum as may be prescribed; (ii) is indebted to thecompany its holding subsidiary or associate company or their promoters or directors inexcess of such amount as may be prescribed during the three immediately precedingfinancial years or during the current financial year; (iii) has given a guarantee orprovided any security in connection with the indebtedness of any third person to thecompany its holding subsidiary or associate company or their promoters or directors ofsuch holding company for such amount as may be prescribed during the three immediatelypreceding financial years or during the current financial year; or (iv) has or had anyother pecuniary transaction or relationship with the company its holding subsidiary orassociate company or their promoters or directors amounting to two percent or more ofits gross turnover or total income or fifty lakh rupees or such higher amount as mayprescribed from time to time whichever is lower singly or in combination with thetransactions referred to in sub-clause(i) (ii) or (iii) during the three immediatelypreceding financial years or during the current financial year. e. neither they nor any oftheir relatives–(i) hold or has held the position of a key managerial personnel or isor has been employee of the Company or its holding subsidiary or associate Company in anyof the three financial years immediately preceding the financial year in which they wereproposed to be appointed; (ii) is or has been an employee or proprietor or a partner inany of the three financial years immediately preceding the financial year in which theywere proposed to be appointed of—(A) a firm of auditors or company secretaries inpractice or cost auditors of the Company or its holding subsidiary or associate Company;or (B) any legal or a consulting firm that has or had any transaction with the Companyits holding subsidiary or associate Company amounting to ten percent or more of the grossturnover of such firm; (iii) held together with any relatives two percent or more of thetotal voting power of the Company; or (iv) is a Chief Executive or director by whatevername called of any non-profit organization that receives twenty-five per cent or more ofits receipts from the Company any of its promoters directors or its holding subsidiaryor associate Company or that holds two percent or more of the total voting power of theCompany; (v) is a material supplier service provider or customer or a lessor or lessee ofthe Company; f. they are not a non-independent director of any other company on the boardof which any non-independent director of the Company is an independent director. g. theyare not aware of any circumstance or situation which exist or may be reasonablyanticipated that could impair or impact their ability to discharge their duties with anobjective independent judgment and without any external influence. h. they possessappropriate skills experience and knowledge in one or more fields of finance lawmanagement sales marketing administration research corporate governance technicaloperations or other disciplines related to the company's business. i. they have compliedwith the requirement of sub-rule (1) and sub-rule (2) of Rule 6 of Companies (Appointmentand Qualification of Directors) Rules 2014 with regard to inclusion of their names and/orrenewal thereof in the Independent Directors data bank maintained with Indian Instituteof Corporate Affairs (IICA).

None of the independent Directors will retire at the ensuing Annual General Meeting.


The Board of Directors met 4 times during the period April to March in the year2021-2022 on the following dates:

1. April 29 2021
2. July 22 2021
3. October 21 2021
4. January 20 2022


The Company's Audit Committee presently comprises of five Directors all arenon-executive and Independent Directors. This is in compliance with Companies Act 2013and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015. Lt.Gen.D. B. Singh an Independent Director is the Chairman of the Committee while Mr. SanjayaKulkarni Mr. Narendra Ambwani Mr. Arun Bewoor and Ms. Veena Gidwani are its Members. TheCharter of the Committee is in line with the requirements of Section177 of the CompaniesAct 2013 and the relevant clauses of the Listing Regulations.


The performance of the Company's Key Managerial Personnel Whole time Director andEmployees is measured on the progress being made on the strategic vision of the Companyand Profitability. Progress against the strategic vision of the Company is measured bycontinued improvement in Gross Margin and share of the Foods business in the total NetSales of the Company. Profitability is measured using Profit After Tax as a singlemeasure.

The details as required under Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is being provided as an Annexure B to thisReport.


The Company has formulated a Remuneration Policy in line with the requirements of theCompanies Act 2013. The performance evaluation of independent directors is done by theentire Board of Directors (excluding the director being evaluated). On the basis of thereport of performance evaluation it shall be determined whether to extend or continue theterm of appointment of the independent directors. The annual evaluation of the Board isdone at three levels as (i) Board as a whole; (ii) Committees of the Board and (iii)Individual Directors and Chairperson.

A detailed Questionnaire is circulated to all individual directors. The Directors areevaluated on the basis of the following performance evaluation criteria namely knowledgeand competency fulfillment of functions ability to function as a team initiativeavailability and attendance commitment contribution and Integrity. The Additionalcriteria for Independent directors are independence independent views and judgment. Theremuneration/commission to Non-Executive and Independent Directors shall be fixed as perthe provisions contained under Companies Act 2013. The Non-Executive Independent Directormay receive remuneration by way of fees for attending each meeting of Board or Committeethereof provided that the amount of such fees shall not exceed Rs100000/-

(Rs One lakh only) per meeting of the Board or Committee or such amount as may beprescribed by the Central Government from time to time.

For Independent Women Directors the sitting fee paid is not less than the sitting feepayable to other directors.

Commission may be paid within the monetary ceiling limit approved by shareholderssubject to the limit not exceeding 1% of the profits of the Company computed as per theapplicable provisions of the Act. An Independent Director shall not be entitled to anystock options of the Company.

Copy of the Nomination and Remuneration policy is annexed here with as Annexure Eand forms part of this Report and is also uploaded on the website of the Company: o n d u c t / N o m i n a t i o n % 2 0 a n d %20Remuneration%20Policy.pdf


Every new Independent Director of the Board attends an orientation. To familiarize thenew inductees with the strategy operations business and functions of your Company theSenior Management make presentations to the inductees about the Company's strategyoperations and products. The Company also encourages and supports its Directors to updatethemselves with the rapidly changing regulatory environment. Also at the time ofappointment of independent directors the Company issues a formal letter of appointmentdescribing their roles functions duties and responsibilities as a Director. During theyear the Company has sponsored independent Directors for attending an online orientationprogramme conducted by National Institute of Securities Markets (NISM) on role of theBoard regulatory perspective on role & responsibilities of Directors etc. Moredetails about familiarization Programme are uploaded on Company's website: other-information/familiarisation_programme_independent_directors.pdf


M/s Deloitte Haskins & Sells LLP Chartered Accountants were appointed as theStatutory Auditors of the Company by the shareholders' at the 32nd Annual General Meetingheld on July 17 2019 to hold office from the conclusion of the 32nd Annual GeneralMeeting till the conclusion of the 37th Annual General Meeting.

The Report given by the Auditors M/s Deloitte Haskins & Sells LLP CharteredAccountants on the financial statements of the Company for financial year 2021- 22 is partof the Annual Report. There has been no qualification reservation or adverse remark ordisclaimer in their Report. During the year under review the Auditors had not reportedany matter under Section 143(12) of the Companies Act 2013 and hence no detail isrequired to be disclosed under Section 134(3)(ca) of the Companies Act 2013.


The Company is required to maintain the cost records as specified by the CentralGovernment under Section 148(1) of the Companies Act 2013 and accordingly such accountsand records are made and maintained by the Company. An Audit of the Cost Accountsmaintained by the Company is also conducted by a Cost Auditor appointed by the Boardsubject to the approval of Shareholders.


M/s. Tumuluru & Company Company Secretaries Firm has been appointed to conduct theSecretarial Audit of the Company as required under the provisions of Section 204 of theCompanies Act 2013 and Rule 9 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 and Regulation 24A of the SEBI (LODR) Regulations 2015and also to provide the Secretarial Compliance Report for the financial year 2021-22. Copyof the Secretarial Audit Report in Form MR-3 is given as an Annexure F to thisDirector's Report. The Secretarial Audit Report does not contain any qualification oradverse remarks.


Your subsidiary Sundrop Foods India Private Limited has continued to perform the roleof aiding the Company's expansion of distribution and display of your Company's products.At the end of FY'22 the number of sales staff on the rolls of the Company were 379.

Your Company's wholly owned subsidiary Agro Tech Foods (Bangladesh) Pvt. Ltd continuesto scale up production as we expand our business in a neighboring emerging market withstrong growth potential. Your Company will also be working towards leveraging yourCompany's wholly-owned subsidiary Sundrop Foods Lanka (Private) Limited at an opportunetime basis the economic developments in that market. During the year the Board ofDirectors reviewed the affairs of the subsidiary Companies. The Company has published theaudited consolidated financial statements for the financial year 2021-22 and the sameforms part of this Annual Report. This Annual Report does not contain the financialstatements of our subsidiaries. The statements highlighting the summary of the financialperformance of the subsidiaries in the prescribed format is annexed as Annexure Gto this Report. The audited financial statements and related information of subsidiariesare available for inspection electronically and will be provided to any shareholder ondemand. The separate audited financial statements in respect of each subsidiary Company isalso available on the website of your Company.


A copy of the Annual Return as provided under Section 92(3) of the Companies Act 2013and Rule12 of the Companies (Management & Administration) Rules 2014 prepared as onMarch 31 2022 shall be placed on the website of the Company and the same is available inthe Company's website: https://


SEBI (LODR) (Fifth Amendment) Regulations 2019 notified on December 26 2019 mandatedinclusion of Business Responsibility Report (BRR) as part of the Annual Report for top1000 listed entities based on market capitalization. In compliance with the Regulationthe BRR for FY 2021-22 is provided as part of this Annual Report.


Your Directors state that no disclosures or reporting are being made in respect of thefollowing items as there were no applicable transactions or events on these items duringthe year under review: a. Details relating to deposits covered under Chapter V of the Act.b. Issue of equity shares with differential rights as to dividend voting or otherwise. c.Issue of shares (including sweat equity shares) to employees of the Company under anyscheme save and except under the ESOP scheme referred to in this Report. d. The ManagingDirector of the Company does not receive any remuneration or commission from any of itssubsidiaries. e. No significant or material orders were passed by the Regulators or Courtsor Tribunals which impact the going concern status and Company's operations in future. f.The Company has complied with the provisions relating to constitution of InternalComplaints Committee and no cases reported or filed during the year pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. g.During the year your Company has not accepted any public deposits under Chapter V ofCompanies Act 2013. h. Pursuant to Section 124 and Section 125 of the Companies Act 2013read with IEPFA (Accounting Audit Transfer and Refund) Rules 2016 and any amendmentthereof as may be applicable an amount of Rs446238/-which remained unpaid / unclaimeddividends pertaining to FY13-14 was transferred to Investor Education and Protection Fundon September 14 2021. i. During the year the Company has transferred 8434 unclaimedshares to IEPF account on October 11 2021. The detailed list of unclaimed sharestransferred to IEPF Authority is available in the Company's website j.Pursuant to Section 124 and Section 125 of the Companies Act 2013 read with IEPFA(Accounting Audit Transfer and Refund) Rules 2016 and any amendment thereof as may beapplicable an amount of Rs 467946/- (as on March 31 2022) of unpaid/unclaimed dividendspertaining to FY 14-15 will be transferred to Investor Education and Protection Fundwithin the prescribed timelines.

K. Except as disclosed elsewhere in the Report there have been no material changes andcommitments made between the end of the financial year of the Company and the date of thisReport. There has been no change in the nature of business of the Company during the year.l. No application was made during the year and no proceeding is pending under theInsolvency and Bankruptcy Code 2016 (31 of 2016) as at the end of the financial year. m.No instance of the valuation was required for one time settlement and no valuation wasdone while taking the loan from the Banks or Financial Institutions.


The Board places on record their appreciation for the contribution of its customersemployees distributors co-packers suppliers and all other stakeholders towardsperformance of the Company during the year under review.

On Behalf of the Board
Sachin Gopal Lt. Gen. D.B. Singh
Managing Director & CEO Director
DIN 07439079 DIN 00239637
Place : Gurugram
Date : April 28 2022