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Baba Agro Food Ltd.

BSE: 535007 Sector: Agri and agri inputs
NSE: BABAFOOD ISIN Code: INE672X01010
BSE 05:30 | 01 Jan Baba Agro Food Ltd
NSE 05:30 | 01 Jan Baba Agro Food Ltd

Baba Agro Food Ltd. (BABAFOOD) - Director Report

Company director report

To

The Members

Baba Agro Food Limited

(Formerly known as Sri Krishna Metcom Limited)

Dear Members

Your directors are pleased to present before you the 12th Annual Report ofthe Company along with the audited financial statement for the year ended on 31stMarch 2020.

1. Financial Result

The financial performance of the Company for the Financial Year ended on 31stMarch 2020 and for the previous Financial Year ended on 31st March 2019 isgiven below: Rs. In Lacs

Particulars 2019-20 2018-19
Gross Revenue 54300.13 46041.75
Profit Before Interest & Depreciation 3962.59 2438.86
Depreciation 638.82 291.02
Profit before tax 2748.84 1974.05
Tax Expenses 770.2 544.72
Profit After Tax 1978.64 1429.33
Provision for Proposed Dividend including Tax - -
Profit for the year carried to Reserve & Surplus 1978.64 1429.32
Earnings Per Share 14.95 10.80

2. Operations:

For the financial year 2019-2020 your Company recorded net revenue of Rs. 5430.01million as against 4604.17 million in the previous year and thereby recorded growth of17.94% in the net sales. The key growth driver during the year was mainly due toutilization of enhanced of capacity at Ranchi unit as well as brining up new unit atAurangabad Bihar which results into increase in production and increase in the sale ofpremium segment products. Your company continues its vision to be leaders in the NonBasmati Rice.

For the financial year 2019-2020 the Company achieved Profit before tax of Rs. 274.88million as against Rs. 197.41 million for previous financial year. The major driver forthe increase in profit is due to utilization of enhanced capacity as well as increments ofcapacity by establishing new unit at Bihar increase in sale of Premium products andbroadening the market base. We concentrated in premium product marketing as well asbroadening the market base as well also launching the premium segment products with higherprofitability.

3. Change in the Nature of Business if any:

There were no changes in the nature of business of the Company during the year underreview.

4. Annual Return:

The extract of Annual Return pursuant to the provisions of Section 92 of the CompaniesAct 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014in Form No. MGT-9 is enclosed herewith as Annexure I.

5. Board Meetings and Attendance:

The Directors of the Company met at regular intervals with the gap between two meetingsnot exceeding 120 days to take a view of the Company s policies and strategies apart fromthe Board matters. The notices of the Board meetings are given well in advance to all theDirectors of the Company. Additional meetings were held depending upon the requirements ofthe Company.

During the year under review the Board of Directors met 10 (Ten) times and Board.Meetings were held as on the following dates:

Sl. No. Date of the Board Meeting
1 25.05.2019
2 17.06.2019
3 20.08.2019
4 15.10.2019
5 14.11.2019
6 17.12.2019
7 24.12.2019
8 31.12.2019
9 14.01.2020
10 17.03.2020

Attendance of the Directors:

Sl. No. Name of the Director No. of Board Meeting
Held Attended
1 Mr. Gyan Prakash Sahu 10 10
2 Mr. Yogesh Kumar Sahu 10 10
3 Mr. Jeevan Prasad 2 2
4 Mr. Rajesh Agrawal 10 10
5 Mrs. Binita Sahu 7 7
6 Mr. Manish Kumar Mantri 10 8
7 Mrs. Rakhi Sahu 1 1
8 Mr. Manish Kumar Sahu 5 5
9 Mrs.Sasmita Mohantay 6 0
10 Mr. Pankaj Harlalka 5 4
11 Mr. Manoj Kumar Chaudhary 5 4

6. Director s Responsibility Statement:

In accordance with the provisions of Section 134 (3) (c) and Section 134(5) of theCompanies Act 2013 to the best of their knowledge and belief the Board of Directorshereby submit that:

a) In the preparation of the Annual accounts for the year ended on March 31 2020the applicable accounting standards have been followed and there are no material departurefrom the same;

b) The directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company for the Financial Yearended on March 31 2020;

c) The directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

d) The directors had prepared the Annual accounts on a going concern basis; Thedirectors had laid down internal financial controls to be followed by the Company and thatsuch internal financial controls are adequate and are operating effectively and e) Thedirectors had devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

7. Comment on Auditor s Report

There were no qualifications reservations adverse remarks or disclaimer made by theauditors in their report for the financial year ended on March 31 2020.

8. Particulars of Loans Guarantees of Investments made under the provisions ofSection 186 of the Companies Act 2013

The details of loans investment guarantees and securities covered under theprovisions of Section 186 of the Companies Act 2013 are provided in the financialstatement.

9. Particulars of Contracts or arrangement made with Related Parties

During the year under review contracts or arrangements entered into with the relatedparty as defined under Section 2(76) of the Companies Act were in ordinary course ofbusiness and at arm s length basis. Details of the transactions pursuant to Compliance of

Section 134(3) (h) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts)Rules 2014 are enclosed herewith as Annexure II. During the year the Company hasnot entered into any materially significant related party transactions which may havepotential conflict with the interest of the Company at large. Suitable disclosures asrequired are provided in AS-18 which is forming the part of the notes to financialstatement.

10. Internal Financial Control Systems and their Adequacy

The Company has its internal financial control system commensurate with operations ofthe Company. The management regularly monitors the safeguarding of its assets preventionand detection of frauds and errors and the accuracy and completeness of the accountingrecords including timely preparation of reliable financial information. The head ofInternal Audit together with External audit Consults and reviews the effectiveness andefficiency of these systems and procedures to ensure that all assets are protected againstloss and that the financial and operational information is accurate and complete in allrespects.

11. Reserves

The Company has Closing Balance of Rs. 6875.90 Lacs as Reserve and Surplus as on31.03.2020. The Closing Balance of Reserve and Surplus is bifurcated as follows:

Sl. No. Particulars Amount (Rs. In Lacs)
1 Opening Balance 1950.48
2 Profit for the year 1978.64
3 Share Premium 2777.40
4 Capital Reserve 169.38
Total 6875.90

12. Corporate Social Responsibility

During The Financial Year 19-20 Company was liable to Spend Rs.18 66460towards CSR and Company successfully spend the same in various social activities as perthe CSR Policy of the Company. For the FY 2020-2021 Company is liable to spendRs.3063102 towards CSR and Company is planning accordingly to spend the same.

13. Transfer to the Investor Education and Protection Fund

During the year under review the provisions of Section 125(2) of the Companies Act2013 do not apply as there was no dividend declared and paid in last seven years so theCompany was not required to transfer any amount to the Investor Education and ProtectionFund (IEPF) established by Central Government pursuant to the provision of Section 125(e)of the Companies Act 2013 as there is no amount unclaimed for a period of 7 years fromthe date it became due for repayment.

14. Conversion of Energy Technology Absorption Foreign Exchange Earnings and outgo.

The information pertaining to conservation of Energy Technology Absorption ForeignExchange Earnings and outgo as required under Section 134(3) (m) of the Companies Act2013 read with Rule 8 (3) of the Companies (Accounts) Rules 2014.

A. Conservation Energy: i. The steps taken or impact on conservation of energy:

The Company lays great emphasis on savings in the cost of energy consumption.Therefore achieving reduction in per unit consumption of energy is an ongoing exercise inthe company. The Company ensures optimal use of energy with minimum extent of wastage asfar as possible. The day to day consumption is monitored in an effort to save energy.

ii. The steps taken by the Company for utilizing alternate source of energy:

The Company is exploring an alternate source of energy for internal generation of powerfor captive consumption.

iii. The capital investment on energy conservation equipment:

Company has not made any capital investment on energy conservation equipment.

iv. Technology Absorption:

The Company is always in pursuit of finding the ways and means to improve the qualityand reduce the cost of its products. The company has not imported any technology duringthe year nor has separate independent research and development activity and hence as suchno material amount of expenditure was incurred on technology and research and developmentactivity.

B. Foreign Exchange Earnings and outgo:

During the Financial year under review the foreign exchange earnings is Nil and outgois US $ 57800; GBP 160000 and EURO 981000 towards import of assets.

15. Statement concerning development and implementation of Risk Management Policy ofthe

Company

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks towards the key business objectives of the Company. Major risks identified by thebusiness and functions are systematically addressed through mitigating actions on acontinuing basis.

16. Directors and Key Managerial Personnel:

There has been following changes in the Board of Directors and Key Managerial Personnelduring the period under review.

Name of Director/KMP Designation change Effective Date
Mr. Jevan Prasad Independent Director Resignation 19/08/2019
Mrs. Binita Sahu Non Executive Director Resignation 17/12/2019
Mrs. Rakhi Sahu Non Executive Director Appointment 17/03/2020
Mr. Manish Kumar Sahu Managing Director Appointment 17/12/2019
Mrs. Sasmita Mohantay Independent Director Appointment 20/08/2019
Mrs. Sasmita Mohantay Independent Director Resignation 10/03/2020
Mr. Pankaj Harlalka Independent Director Appointment 17/12/2019
Mr. Manoj Kumar Chaudhary Independent Director Appointment 17/12/2019
Ms. Kumari Deepshikha Company Secretary Resignation 14/01/2020
Ms. Swati Company Secretary Appointment 14/01/2020

* Mr. Jeevan Prasad resigned from 19/08/2019

** Ms Swati appointed as Company sectary wef 14/01/2020 by Board of Directors afterresignation of Ms. Kumari Deepshikha on same date.

17. Declaration of Independent Directors

The independent directors of the Company Mr. Pankaj Harlalka and Mr. Manoj KumarChoudhary have confirmed to the Board that they meet the criteria of independence asspecified under Section 149(6) of the Companies Act 2013 and they qualify to be theIndependent Directors. They have also confirmed that they meet the requirements ofIndependent Director as mentioned under Regulation 16(1) (b) SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015. The confirmations were noted by the Board.

18. Formal Annual Evaluation Process by Board:

Pursuant to the provisions of the Companies Act 2013 and Rules made there under theBoard has carried the evaluation of its own performance performance of IndividualDirectors Board Committees including the Chairman of the Board on the basis ofattendance contribution and various criteria as recommended by the Nomination andRemuneration Committee of the Company. The evaluation of the working of the Board itscommittees experience and expertise performance of specific duties and obligations etcwere carried out. The Directors expressed their satisfaction with the evaluation processand outcome. The performance of each of the non-independent directors (including theChairman) was also evaluated by the Independent Directors at separate meeting held ofIndependent Directors of the Company.

19. Corporate Governance

Since the Company s securities are listed on EMERGE SME Platform of NSE by virtue of

Regulation 15 of SEBI (Listing Obligations & Disclosure Requirements) Regulations2015 the compliance with the Corporate Governance provisions as specified in Regulations17 to 27 and clauses (b) to (i) of sub-regulation (2) of Regulation 46 and para C D and Eof Schedule V are not applicable to the Company. Hence Corporate Governance does not formpart of this Board s Report.

20. Subsidiaries Joint Ventures and Associate Companies

The Company does not have any Subsidiary Joint Venture or Associate Company.

21. Deposits

As per Section 73 of the Companies Act 2013 the Company has neither accepted norreviewed any deposits during the financial year.

22. Statutory Auditors

Members of the Company in 10th Annual General Meeting of the Company held on28.09.2018 appointed M/s Agrawal Shukla & Co Chartered Accountants as the statutoryauditor of the Company for the tenure of five years starting from the conclusion of 10thAnnual General Meeting till the conclusion of 15th Annual General Meetingsubject to annual ratification by members. Hence Board hereby proposes for ratificationof appointment of M/s Agrawal Shukla & Co Chartered Accountants as the statutoryauditor of the Company.

23. Secretarial Auditor

The Board appointed M/S Birendra Banka & Associates Company Secretaries to conductSecretarial Audit for the Financial Year 2020-21. The Secretarial Audit Report for theFinancial Year ended 31st March 2021 is enclosed herewith as Annexure III to thisReport. The Secretarial Audit Report does not contain any qualification reservationadverse remark or disclaimer.

24. Disclosures

A. Meetings of Audit Committee

During the year under review there was appointment of Mr. Manoj Kumar Choudhary andResignation of Mr. Sasmita Mohanty. Meeting of Audit Committee was held on 25th May 2019and 11th November 2019 and attendance records of the members of the Committeeare as follows:

Name Status No. of the Committee Meeting entitled No. of the Committee Meeting attended
Mr. Manish Kumar Mantri Independent Director Chairman 2 3
Mr. Manoj Kumar Choudhary Independent Director Member 0 0
Mr. Gyan Prakash Sahu Wholetime Director Member 2 3

B. Meetings of Nomination & Remuneration Committee

During the year under review there was appointment of Mr. Pankaj Harlalka and Mr.Manoj Kumar Choudhary and Resignation of Mrs. Sasmita Mohanty and Mrs. Binita Sahu in thecommittee. Meeting of Nomination and Remuneration Committee was held on 20th August 2019and on 14th December 2019. The attendance records of the members of theCommittee are as follows:

Name Status No. of the Committee Meeting entitled No. of the Committee Meeting attended
Mr. Manish Kumar Mantri Independent Director Chairman 2 2
Mr. Jeevan Prasad Independent Director Member 1 1
Mrs. Binita Sahu Non-Executive Non-Independent Director Member 2 2
Mr. Pankaj Harlalka Member 0 0
Mr. Manoj Kumar Choudhary Member 0 0

C. Composition of Stakeholder s Relationship Committee

During the year under review there was appointment of Mr. Pankaj Harlalka and Mr.Yogesh Kumar Sahu in Place Of Mr. Jeevan Prasad and Mrs. Binita Sahu in the Committee.Meeting of Nomination and Remuneration Committee was held on 30th June 2019 and2nd October 2019 and the attendance records of the members of the Committee areas follows:

Name Status Committee Meeting No. of the entitled Committee Meeting No. of the attended
Mr. Jeevan Prasad Independent Director Chairman 1 1
Mrs. Binita Sahu Non-Executive Non-Independent Director Member 2 2
Mr. Rajesh Agrawal Executive Director Member 2 2

D. Corporate Social Responsibility Committee

During the year under review there was appointment of Mr.Manish Kumar Mantri in PlaceOf Mrs. Sasmita Mohanty in the Committee. Meeting of CSR Committee was held on 28thAugust2019 21st December2019 and 1st March 2020 and theattendance records of the members of the Committee are as follows:

Name Status No. of the Committee Meeting entitled No. of the Committee Meeting attended
Mr. Rajesh Agrawal Executive Director Chairman 3 3
Mr.Manish Kumar Mantri Independent Director Member 0 0
Mr. Yogesh Kumar Sahu Non- Executive Director Member 3 3

25. Details of significant and material orders passed by the Regulators or Courts orTribunals

There were no significant and material orders issued against the Company by anyRegulating authority or court or tribunal that could affect the going concern status and

Company s operation in future.

26. Share Capital

A. Provision of money by company for purchase of its own shares by employees or bytrustees for the benefits of employees

The Company has not made any provision of money for purchase of its own shares byemployees or by trustees for the benefit of employees as per Rule 16(4) of Companies(Share Capital and Debentures) Rules 2014.

B. Issue of Sweat Equity Shares

The Company has not issued any sweat equity share during the financial year inaccordance with the provisions of Section 54 of Companies Act 2013 read with Rule

8(13) of the Companies ("Share Capital and Debentures) Rules 2014.

C. Issue of Equity Shares with Differential Rights

The Company has not issued any equity shares with differential voting rights during thefinancial year as per Rule 4(4) of Companies (Share Capital and Debentures) Rules 2014.

D. Issue of Employee Stock Option

The Company has not issued any employee stock option during the financial year as perRule 12(9) of Companies (Share Capital and Debentures) Rules 2014.

E. Initial Public Offer

During the year under review there was no Public Offer of Equity Shares.

F. Preferential Issue

During the year under review the company alloted 1097000 (Ten Lakh Ninety SevenThousand Only) Redeemable Preference Shares of face value of Rs.10/- each at a price ofRs. 73/- per share (including a share premium of Rs. 63/- per share) on a privateplacement basis to persons as mentioned in Offer Letter on 17th December2019.And on 24th December2019 alloted 2883000(Twenty Eight lakh Eighty ThreeThousand Only) Redeemable Preference Shares of face value of Rs.10 each at a price of Rs.73/- per share (including a share premium of Rs. 63/- per share) on a private placementbasis to persons as mentioned in Offer Letter.

27. Managerial Remuneration

Disclosures of the ratio of the remuneration of each director to the median employee sremuneration and other details as required pursuant to Section 197(12) of the CompaniesAct 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended from time to time are enclosed as

Annexure IV.

The details of remuneration paid to the Directors including the Managing Director ofthe Company are given in Form MGT-9 forming part of the Directors Report.

28. Management Discussion and Analysis Report

Management Discussion & Analysis report for the year under review as stipulateunder Regulation 34(2) (e) of the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 is enclosed as Annexure V heretoand forms part of this Report.

29. Disclosure under Sexual Harassment of Women at Workplace (Prevention Prohibition&

Redressal) Act 2013

The Company has always been committed to provide a safe and conductive work environmentto its employees. Your Director further state that during the year under review there wereno cases filed pursuant to the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.

32. Acknowledgements

Your directors would like to place on record their appreciation for the support to theCompany received from the Employees at all levels. Our growth was made possible by theirhard work solidarity cooperation and support. We would also like to thank our BankersAssociates and all other clients and well-wishers.

FOR AND ON BEHALF OF THE BOARD
BABA AGRO FOOD LIMITED

(Formerly known as Sri Krishna Metcom Limited)

Sd/-
Place: Ranchi Yogesh Kumar Sahu
Date: Aug 25 2020 Chairman