To the Members
CONTINENTAL SEEDS AND CHEMICAL LIMITED
The Directors of the Company have pleasure in presenting the 36thAnnual Report and Audited Statement of Accounts for the financial year ended 31stMarch 2020.
1. FINANCIAL HIGHLIGHTS
Financial results of your Company for the year ended 31st March 2020are summarized below.
|PARTICULARS ||2019-20 ||2018-19 |
|Sales and Services ||879150623 ||821002458 |
|Other Income ||2163765 ||1299724 |
|Total Revenue ||881314388 ||822302182 |
|Total Expenditure ||873659888 ||813478729 |
|Profit before Tax ||8606688 ||8572895 |
|Less: Tax Expenses Current Tax ||2163385 ||3619124 |
|MAT credit utilized ||- ||- |
|Net current tax ||- ||3619124 |
|Earlier year Tax adjustment ||- ||405385 |
|Deferred Tax Assets ||38779.46 ||101280 |
|Profit/Loss After Tax ||6482082 ||4649667 |
|Add: Balance B/F from Previous year ||23867813 ||19495335 |
|Less: Issue of Bonus shares ||14091230 ||- |
|Other adjustments ||- ||(277189) |
|Balance Profit/(Loss) C/F to the next year ||16258665 ||23867813 |
The Board of Directors do not recommend any dividend on Equity ShareCapital for the year under review with a view to conserve resources and to plough back theprofits for the Financial Year ended 31st March 2020 and to strengthen the net workingcapital.
3. SHARE CAPITAL
During the financial year 2019-2020 our company has issued 4001123bonus shares to the shareholders in the proportion of One (1) equity shares for every 1.5(One and Half) equity shares held by them. This brought up the paid up capital of thecompany to 100028080 (Ten Crore twenty Eight Thousand and
Eighty) Equity Shares. There was also increase in Authorise capital ofthe company from Rs. 65000000/- (Rupees Six Crores Fifty Lacs Only) divided into6500000 (Sixty Five Lacs Only) equity shares of Rs. 10/- (Rupees Ten only) each to Rs.120000000/- (Rupees Twelve Crores Only) divided into 12000000 (One Crore Twenty LacsOnly) equity shares of Rs. 10/- (Rupees Ten only) each.
4. MANAGEMENT DISCUSSIONS & ANALYSIS (MDA)
The operating income during the financial year ended 31st March 2020stood at Rs. 8606688 as against the total operating income of Rs. 8572895/- in theprevious financial year ended 31st March 2019. During the Year the Company has earned anet profit of 6482082/- as compared to the net profit of Rs. 4649667/- in the previousyear.
Industry Overview for the Company
Agriculture is the primary source of livelihood for about 58 per centof India's population. Agri exports from India is likely to reach US$ 60 billion by2022. In FY20 (till January 2020) agriculture exports were US$ 28.93 billion. Also thegrowth in GVA in agriculture and allied sectors stood at 4 per cent in FY20. Further indiais expected to achieve the ambitious goal of doubling farm income by 2020 this is allpossible due to increased investment in agricultural infrastructure such as irrigationfacilities warehousing and cold storage.
During 2019-20 crop year food grain production was estimated to reacha record 295.67 million tonnes (MT). In 2020-21 Government of India is targeting foodgrain production of 298 MT. Production of horticulture crops in India was estimated at arecord 320.48 million metric tonnes (MMT) in FY20 as per second advance estimates. Alsothe investment worth Rs 8500 crore (US$ 1.19 billion) have been announced in India forethanol production which is a very good sign for our industry.
The Government envisioning to up the size of the nations macro-economyto USD 5 trillion by 2024 treats agriculture sector as integral to this strategy and thefulcrum of such a transformation. Specifically with regards to the country'sagricultural economy the Government's aim of improving the welfare of the farmerspredicated upon doubling farmers' income by 2022 is moving in the right direction insynch with the principle of harmonizing the interests of the different stakeholders. Theparticular demands of the consumers for wholesome nutrition and of the ecology shall becontinued to be optimally blended as the nation moves towards achieving higher incomesand sustainability from the agricultural enterprise.
India along with others on the planet has been facing the adverseimpacts of climate change particularly with reference to deviations in rainfall andtemperature. Notwithstanding this the production growth of various agriculturalcommodities indicates increasing resilience of the country's farmers and farming.
This is evidenced by foodgrains output of 285 million tonnes in 2017-18as against 265 million tonnes in the year 2014-15. As per the 4th Advance Estimates theyear 2018-19 is expected to close with similar output and the government is targeting anoutput of 291 million tonnes for the year 2019-20. During 2018-19 while kharif output sawa rise over the previous year the rabi season output saw some dip. This was due to lowsoil moisture content following less than normal south-west monsoons in different parts ofthe country. Rabi 2019-20 can be expected to see a bountiful output thanks to more thannormal rainfall from the south-west monsoon which has yielded a happy situation of goodwater reservoir storage and high soil moisture content.
The overall output of agriculture inclusive of foodgrains oilseedsfruits & vegetables commercial crops dairy and other animal products as also fishcan be expected to be satisfactory for the year 2019-20. Monsoon patterns continue to bean important factor for India's agriculture. However the comforting factor is thatthe year 2020 will benefit from recharged aquifers and higher soil moisture linked to thehealthy rainfall 2019. Thus one can expect a good kharif harvest in 2020.
Since the last couple of years the growth of agriculture is beingperceived with greater reference to farmers' income and not production per se. Inthis context the status of prices that farmer receives and the agri-logistics thatconveys all the produce from the farm-gate to the markets is more critical. The recentprices for foodgrains pulses oilseeds and dairy products have been demonstrating somemarket buoyancy which is farmer-favoring. The importance of agricultural exports inexpanding the scope for marketing efficiency in favour of the farmers cannot be brushedaside. It is with this view that government for the first time came to adopt acomprehensive agriculture export policy in the year 2018. This is being taken forward withvarious initiatives including promoting large number of commodity clusters.Clusteralisation will facilitate global market integration by putting in place bothbackward and forward linkages. The year 2020 will certainly see large number of suchclusters take off the ground. This buttressed by government's focus on promoting10000 farmer producer organizations (FPOs) by 2022 will come to see visible action on theground. The states have begun to adopt the Model Contract Farming & Services Act 2018and Tamil Nadu is the first one to have done so. Many states should be coming onboard in2020 to set a positive context for marketing efficiency and price risk negotiation.
Simultaneously rising trade sectarianism by major powers to carve outtheir respective zones of influence and compromise of WTO (world trade organization)status by United States - the dominant member warrants that India looks more closely toits domestic market in the year 2020. It will therefore need to accelerate the pace ofmarket transformation towards a new architecture that aims to transfer higher real pricesto the farmers on their produce. The targeted on boarding of 400 more APLMCs/APMCs witheNAM and establishing inter-operability with ReMS platform of Karnataka will see thestrengthening of the One-nation One-market' environment. The year 2020 willalso see creation of the first lot of GrAMs progress on e-warehouse receipt system andgreater flow of institutional credit on the platform of kisan credit cards (KCCs). TheMinistries of Agriculture and Animal Husbandry & Fisheries are targeting to cover allthe eligible farmers including those practising animal husbandry and fisheries with KCCs.
The year 2020 in a way marks the mid-point of the targeted timeschedule for doubling farmers' income (2016 to 2022). Various recommendations of theInter-Ministerial Committee on Doubling Farmers' Income (DFI) are underimplementation. In the year 2019 the NITI Aayog constituted a Committee of ChiefMinisters to suggest ways for speedy transformation of India's agriculture. ThisCommittee's Report is due in 2020 which can be expected to pave the way forunhindered implementation of various DFI recommendation including reforms. These encompassa new market architecture contract farming & services easing of land leaseliberalized control orders under Essential Commodities Act and so on. This will sequelinto a transformed enterprise oriented and market-led agricultural value system.
In addition to growth of agriculture production and farmer'sincome the focus can be expected to shift towards correcting today's regional andcommodity imbalances. In this context more visible action can be foretold in respect ofrainfed areas and low water duty crops like millets pulses and oilseeds in the year 2020.Revision of water-shed guidelines alongwith emphasis on spring-sheds in the himalayanstates will help the communities to adopt climate resilient technologies and negotiateclimate change risks. This is being led by the government's special arm for rainfedareas of the country namely National Rainfed Area Authority (NRAA). In the year 2020NRAA should also be working more closely with the states to
drouglit proof already identified 151 vulnerable districts in thecountry. It is well advised to sharpen water budgeting as a core concept that gels wellwith the nation's Jal Shakti Mission. This Mission aims to conserve water and use thescarce resource more efficiently.
Several initiatives have been taken by the Government over the lastabout 6 years which include the soil heath card (SHC) the pradhan mantri fasal bimayojana (PMFBY) paramparagat krishi vikas yojana (PKVY) PM-AASHA PM-KISAN and so on. Onecan foresee a widening of these initiatives and even higher acceptance by all stakeholdersincluding farmers in 2020.
In leading up to realization of USD 5 trillion economy the Governmenthas just shared its National Infrastructure Pipeline. This pipeline amounts to Rs. 102lakh crores of gross capital formation that includes various components of agriculturalinvestments In' and For' agricultural economy as recommended bythe DFI Committee. The year 2020 will see the commencement of such investments and lay thefoundation for a decadal future growth.
5. CHANGE IN REGISTERED OFFICE WITHIN STATE:
During the year there was no change in the Registered Office of theCompany.
6. DETAILS OF SUBSIDIARIES JOINT VENTURE OR ASSOCIATES The Company hasno Subsidiaries Joint Venture or Associates.
During the financial year 2019-20 your Company has not accepted anydeposit within the meaning of Sections 73 and 74 the Companies Act 2013 read togetherwith the Companies (Acceptance of Deposits) Rules 2014.
8. AUDIT COMMITTEE:
The Audit Committee comprises of Mr. Sachin Rastogi Director of theCompany Mr. Gopal Krishan Sharma & Mr. Prashant Rastogi Independent Directors of theCompany. All the recommendations made by the Audit Committee were accepted by the Board.The Committee duly met five times during the year and was attended by all the CommitteeMembers. The details of Audit Committee have been outlined in the Corporate GovernanceReport which forms part of this Report.
9. NOMINATION & REMUNERATION POLICY AND PARTICULARS OF EMPLOYEES
The Nomination and remuneration Committee comprises of Mr. SachinRastogi Director of the Company Mr. Gopal Krishan Sharma & Mr. Prashant RastogiIndependent Directors of the Company. The Committee duly met two times during the year andwas attended by all the Committee Members. The salient features covered in theRemuneration Policy have been outlined in the Corporate Governance Report which forms partof this Report.
10. DIRECTOR'S & KEY MANAGERIAL PERSONNEL
Pursuant to Section 152 of the Companies Act 2013 Mr. Sachin RastogiDirector of the Company retires by rotation at ensuing Annual General Meeting and beingeligible offers himself for reappointment.
Change in Directors and Key Managerial Personnel
There were no changes in composition of Directors or Key ManagerialPersonnel during the financial year 2019-2020 as follows:
11. DECLARATION BY AN INDEPENDENT DIRECTOR(S) AND RE-APPOINTMENT IFANY
The Company has received necessary declarations from Mr. Gopal KrishanSharma and Mr. Prashant Rastogi Independent Directors of the Company under section149(7) of the Companies Act 2013 that they meet the criteria of Independence laid down insection 149(6) of the Companies Act 2013 and regulation 25 of SEBI (Listing Obligationsand Disclosure Requirements) Regulation 2015.
12. EVALUATION OF BOARD PERFORMANCE
In terms of the provisions of the Companies Act 2013 read with Rulesissued there under and LODR the Board of Director on recommendation of Nominations &Remuneration Committee have evaluated the effectiveness of the Board/Director(s) forfinancial year 2019-20.
13. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
The information required under Section 197 of the Companies Act 2013read with Rule 5(2) & (3) of the Companies (Appointment & Remuneration ofManagerial Personnel) Rules 2014 requiring the names of top ten employees in terms ofremuneration drawn and the name of every employee who if employed throughout thefinancial year was in receipt of remuneration for that year which in the aggregate wasnot less than one crore and Twenty lakh rupees is set out in Annexure I to this Report andis available on the website of the Company.
The details about the employees are marked as Annexure-I.
14. NUMBER OF MEETINGS OF THE BOARD
The board met 10 times during the year. The Board meetings details ofthe Company are set out in the Corporate Governance Report which forms part of thisReport. The Maximum interval between any two meetings did not exceed 120 days asprescribed in the Companies Act 2013.
15. SECRETARIAL STANDARDS
The company complies with all the applicable mandatory secretarialstandards issued by the Institute of Company Secretaries of India.
16. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the requirements under Section 134(3)(c) of the CompaniesAct 2013 the Directors confirm that:
(a) in the preparation of the annual accounts for the financial yearended 31st March 2019 the applicable accounting standards and Schedule III ofthe Companies Act 2013 have been followed and there are no material departures from thesame;
(b) the Directors have selected such accounting policies and appliedthem consistently and made judgments and estimates that are reasonable and prudent so asto give a true and fair view of the
state of affairs of the Company as at 31st March 2019 andof the profit of the Company for the financial year ended 31st March 2019;
(c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(d) the Directors have prepared the annual accounts on a goingconcern' basis;
(e) the Directors have laid down proper internal financial controls tobe followed by the Company and that such internal financial controls are adequate and areoperating effectively; and
(f) The Directors have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
17. AUDITORS AND AUDITORS' REPORT Auditor
M/s PMAS & Associates LLP Chartered Accountants having FirmRegistration No. 024726N is appointed as the Statutory Auditors of the Company to holdoffice from the conclusion of 33rd Annual General Meeting till the conclusionof the 38th Annual General Meeting of the Company i.e from the Financial year 01/04/2017to 31/03/2022 who have given their eligibility certificates u/s 141 of the Companies Act2013. The committee took note that the Companies Act 2013 has exempted the requirementsof ratification of appointment of auditors on an annual basis at the AGM.
Re-appointment of M/s AMGK & Associates Chartered Accountant asan Internal Auditors of the Company for the year ended 31st March 2020 to review variousoperation of the company.
18. RELATED PARTY TRANSACTIONS
The details of the related party transactions as required underAccounting Standard - 18 are set out in Note 2.10 to the financial statements forming partof this Annual Report. The particulars of every contract or arrangements entered into bythe company with related parties referred to in sub-section (1) of section 188 of theCompanies Act 2013 including certain on arm length transactions under third provisothereto are annexed in form AOC-2 under Annexure II. The Policy on materiality of relatedparty transactions and dealing with related party transactions as approved by the Boardmay be accessed on the Company's website.
19. SECRETARIAL AUDIT REPORT
Pursuant to the provisions of section 204 of the Companies Act 2013 andRules made there under the Company has appointed M/s Laur & Associate CompanySecretaries to undertake the Secretarial Audit of the Company. The Company has annexed tothis Board Report as Annexure III a Secretarial Audit Report given by the SecretarialAuditor
20. EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in FormMGT - 9 in accordance with Section 92(3) of the Companies Act 2013 read with the Rule 12of Companies (Management and Administration) Rules 2014 are set out herewith as Annexure- IV to this Report.
21. LOANS GUARANTEES AND INVESTMENTS
The details of loans guarantees and investments under Section 186 ofthe Companies Act 2013 read with the Companies (Meetings of Board and its Powers) Rules2014 are as follows:
The company has provided continuing corporate guarantee in violation ofprovisions of section 185 & 186 to a related partnership firm to the true of Rs. 21.00crore
Details of loan and advances guarantee and investments has been givenin the Note no. 13 & 16 of balance sheet note to accounts.
22. VIGIL MECHANISM
The Board of Directors of the Company have formulated a Whistle BlowerPolicy which is in compliance with the provisions of Section 177(10) of the Companies Act2013 and Listing Obligations and Disclosure Requirements (LODR) Regulations 2015. TheCompany through this policy envisages to encourage the Directors and Employees of theCompany to report to the appropriate authorities any unethical behaviour improperillegal or questionable acts deeds actual or suspected frauds or violation of theCompany's Code of Conduct for Directors and Senior Management Personnel. The Policyon Vigil Mechanism / Whistle blower policy may be accessed on the Company's website.
23. RISK MANAGEMENT POLICY
Risk Management policy is formulated in compliance with Regulation 21of the SEBI (listing obligation and disclosure requirement) regulation 2015 and section134 (3) (n) of the companies act 2013 which requires the company to lay down procedurefor risk assessment and risk minimization. The board of directors Audit committee and thesenior management of the company should periodically review the policy and monitor itsimplementation to ensure the optimization of business performance to promote theconfidence amongst stake holders in the process plan and meet strategic objectives andevaluate tackle and resolve various risks associated with the company. The business ofthe company is exposed to various risks arising out of internal and external factors i.e.industry competition input geography financial regulatory other operationalinformation technology related other risks.
24. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
The information on conservation of energy technology absorption andforeign exchange earnings and outgo as stipulated under Section 134 of the Companies Act2013 read with the Companies (Accounts) Rules 2014 is as under:
Part A and Part B relating to conservation of energy and technologyabsorption are not applicable to the Company as your Company is not a manufacturingcompany.
FOREIGN EXCHANGE EARNINGS AND OUTGO:
|Total foreign exchange earnings and outgo ||2019-20 ||2018-19 |
|FOB Value of Exports ||Nil ||Nil |
|CIF Value of Imports ||Nil ||Nil |
|Expenditure in foreign currency ||Nil ||Nil |
25. SIGNIFICANT/MATERIAL ORDERS PASSED BY THE REGULATORS
There are no significant/material orders passed by any of theRegulators or Courts or Tribunals impacting the going concern status of your Company andits operations in future.
26. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN ATWORKPLACE (PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
In order to prevent sexual harassment of women at work place a new actThe Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013 has been notified on 9th December 2013. Under the said Act every company is requiredto set up an Internal Complaints Committee to look into complaints relating to sexualharassment at work place of any women employee.
Company has adopted a policy for prevention of Sexual Harassment ofWomen at workplace and has set up Committee for implementation of said policy. During theyear Company has not received any complaint of harassment.
27. DEMATERIALIZATION OF SHARES
Trading in the Equity Shares of the Company is only permitted in thedematerialized form as per the Securities and Exchange Board of India (SEBI) circulardated May 29 2000.
The Company has established connectivity with both the Depositoriesviz. National Security Depository Ltd. (NSDL) as well as Central Depository Services(India) Ltd. (CDSL) to facilitate the demat trading. As on 31st March 2020100% of the Company's Share Capital is in dematerialized form.
The Company's shares are regularly traded on Emerge-the SME GrowthPlatform of National Stock Exchange at Delhi.
28. CORPORATE GOVERNANCE
Pursuant to Regulation 27 of the LODR the Corporate Governance reporttogether with a certificate issued from Laur & Associates Company Secretaries on itscompliance is made part of the Annual Report.
29. CAUTIONARY STATEMENT
Statement in the management's discussions and analysis describingthe Company's projections estimates expectations or predictions may beforward looking statements' within the meaning of applicable securities lawsand regulations. Actual results could differ materially from those expressed or implied.Important factors that would make a difference to the Company's operations includedemand-supply
conditions changes in government regulations tax regimes and economicdevelopments within the country and abroad and such other factors.
The Directors of the Company are grateful to all the stakeholdersincluding the customers bankers suppliers and employees of the Company for theirco-operation and assistance.
By order of the Board
For Continental Seeds and Chemicals Limited