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Lakshmi Energy & Foods Ltd.

BSE: 519570 Sector: Agri and agri inputs
BSE 00:00 | 03 Jun Lakshmi Energy & Foods Ltd
NSE 05:30 | 01 Jan Lakshmi Energy & Foods Ltd
OPEN 2.50
52-Week high 2.75
52-Week low 0.00
Mkt Cap.(Rs cr) 20
Buy Price 2.50
Buy Qty 24.00
Sell Price 2.70
Sell Qty 295.00
OPEN 2.50
CLOSE 2.70
52-Week high 2.75
52-Week low 0.00
Mkt Cap.(Rs cr) 20
Buy Price 2.50
Buy Qty 24.00
Sell Price 2.70
Sell Qty 295.00

Lakshmi Energy & Foods Ltd. (LAKSHMIEFL) - Director Report

Company director report

Dear Members

The Board of your Company is immensely delighted in presenting its 27thReport. The Report is being presented along with the Audited Financial Statements for theFinancial Year ended March 312018.

Financial Results

(Rs. In Millions)




Year ended 31.03.2018 Year ended 31.03.2017 Year ended 31.03.2018 Year ended 31.03.2017
1. Revenue from operations 6099.51 10214.39 6102.31 10226.50
2. Other Income 1.67 1.91 1.67 1.94
3. Total Revenue 6101.18 10216.30 6103.98 10228.44
4. Expenditure
a. Cost of Raw Material Consumed 326.59 2101.49 326.58 2618.32
b. Purchase of Stock in trade 5376.53 8180.13 5379.07 8223.20
c. (-) Inc. / (+) Dec. In stock 3048.25 (1467.35) 3048.24 (2015.96)
d. Employees benefit expenses 70.00 49.17 70.30 51.81
e. Finance Cost 8.26 249.86 8.26 249.86
f. Depreciation 96.67 136.64 98.35 138.53
g. Other Expenditure 106.48 68.30 107.28 72.37
Total Expenses 9032.79 9318.25 9038.10 9338.13
5. Profit/(Loss) from ordinary activities PBT before exceptional Items (2931.61) 898.05 (2934.12) 890.31
6. Exceptional items (Interest transferred to FITL/WCTL payable in the next eight years as approved by IEC under RBI guidelines) -- (924.53) -- (924.53)
7. Profit/(Loss) from ordinary activities before tax PBT (2931.61) (26.48) (2934.12) (34.22)
8. Tax Expenses
-Current Tax - -
-Deferred Tax (4.35) (15.35) (5.37) (44.09)
-MAT credit entitlement
9. Profit after Tax (PAT) (2927.26) (11.12) (2928.75) 9.87
10 Other comprehensive income 5717.91 - 5717.91 --
11 Total comprehensive income( after tax) 2790.65 (11.12) 2789.16 9.87
12. Earnings per share
Basics (Rs.) (41.03) (0.16) (41.05) 0.14
Diluted (Rs.) (39.76) (0.15) (39.78) 0.14

Financial & Performance Review

The company is in the business of agri based products such as riceprocessing food processing and green power generation based on agri-waste mainly ricehusk which is one of the Company's by-products. The Company is primarily engaged in thehandling storage and transportation of food grains. In the process the prime motive isto preserve and store the food grains. Warehousing infrastructure transportation andpacking plays key role in the process and profitability as it also earns tax benefitsunder the tax laws.

Your Company's USP is excellent quality strategic procurementmarketing and brand. Your Company's presence is all pervasive starting from grass rootlevel of farmers mandi yards through representatives procurement transportationwarehousing paddy processing generating other by-products like rice bran oil de-oiledcakes and using husk for power plant.

During the year ended 31st March 2018 your Company recorded Sales ofRs. 6099.51 million as compared to Rs.10214.97 million during the year ended 3lst March20l7 showing decline of 40.28% over the last year. Loss before tax is Rs.2931.61 millionduring the year under review as compared to Profit of Rs.898.05 millions in the previousyear ended 31st March 2017. Consequently there is a Loss after tax of Rs.2927.26 millionsfor the year ended 3lst March 2018 as against Loss of Rs.11.12 millions during theprevious year.

During the year ended 31st March 2018 Revaluation of Fixed Assetsforming Plant & Machinery Land and Buildings was conducted on 25 Feb. 2018 by anIndependent Valuer GATS India Ltd. The assets has revalued and as a result of which thecarrying cost of assets increased by 8119.03 millions and depreciation readjustment invaluation has been to the tune of 2401.11 millions resulting to net revaluation of Rs5717.92 millions which has been considered as comprehensive income during the year and hasbeen made part of the Equity. The carrying amount of each revalued class of propertyplant and equipment has been recognised and the asset has been carried under the costmodel. Revaluation surplus shall not be utilised for distribution of Dividend or issue ofBonus shares.

The company is effectively taking steps to curtail the expenses andincreasing the efficiency on all fronts. Sharp decline in the financial performance is dueto failure of banks in the implementation of restructuring scheme approved in 2015.Accounts of company were restructured in March 2015 by Joint Lenders Forum (JLF)consisting of PNB Syndicate Bank ICICI Bank and AXIS Bank as per RBI guidelines andfurther vetted by Independent Evaluation Committee (IEC) of RBI. While company fulfilledits part of obligations the JLF failed to release the working capital as per approvedrestructuring scheme due to which operations of the company has affected adversely. TheCompany has taken legal recourse against the banks on account of their default and likelyto file a claim for the losses incurred by the company and its stakeholders.

Note on Banks

1. As regards bank balances it is submitted that that debts of companywere restructured as per Reserve Bank of India guidelines by Joint Lender Forum (JLF) ledby Punjab National Bank with effect from 01-10-2014 when the accounts of the company wereStandard. Restructuring was done on the Techno Economic Viability (TEV) Study conducted byinternationally renowned M/s Dun & Bradstreet. This restructuring package was laterapproved by Independent Evaluation Committee (IEC) of experts members of RBI. The JLFapproved the restructuring package. As per approved restructuring package JLF banks wereunder obligation to disburse assessed working capital as per TEV report to enable thecompany to make the desired procurement and utilize its production capacity and achievethe profitability in line with the scheme. However the company performed its part ofobligation as per Restructuring Package but members banks did not sanction/disburse theworking capital limits as per approved PBF as per restructuring scheme. On account of thisthe company could not make the desired procurement which has adversely affected theproduction capacity utilization and profitability of the company. The company completedits part of obligation up to Sep/Oct 2016 but banks did not implement their part. As aresult bank accounts of the company were categorized as sub-standard in January 2017.

2. Realizing the mistake of JLF banks in implementation ofrestructuring approved in March 2015 the JLF again decided to restructure the accountsunder S4A scheme of RBI in its meeting held on 2l.06.20l7 . Again TEV study was done byN/s PNB Investment Services Ltd ( l00% subsidiary of PNB the lead bank) which was engagedby JLF. PNBISL while finding out the reasons for sub standard status of accounts ofcompany gave its findings that non release of approved working capital as per TEV reportof D & B by the JLF is reasons for sub standard classification. The TEV report ofPNBISL further stated that the company performed its part of obligations up to Sep 20l6.PNBISL finally concluded that company is eligible for S4A scheme. However S4A scheme couldnot be taken forward due to RBI Circular dated 12th February 2018.

3. In view of the above the restructuring package approved on thebasis of TEV report of D & B failed due to failure of banks and bank balancesoutstanding as per company books have been taken into considerations as the entire amountoutstanding is under dispute.

4. The company has state of the art biomass based power plant which theGovernment of India is encouraging to check the pollution. Hon'ble Supreme Court and Govt.of India has also issued directives from time to time to stop burning of biomass to stopthe pollution and using the same as biomass fuel for biomass based power plants/ PowerPlant of the company supplies electricity to the lacs of families in number of villages.The company has entered into long term Agreement with PSPCL for supply of electricity till2029 which is further extendable. We may here emphasize that Agreement with PSPCL is verytough specially in respect of biomass based power plant. With the wrong actions of thebanks our power plant is also not working to its full capacity. There is no T/L or WC onthis power plant.

5. Due to closure of plant of the company there are huge losses tothousands of farmers commission agents transporter workers and shareholders associatedwith the company. There is a great loss in terms of revenue to the government whichotherwise company would have paid had the company performed its full capacity.

6. The company has initiated legal proceedings in the Hon'ble DelhiHigh Court against the banks for non-compliance of RBI guidelines by banks. RBI is also aparty in this legal case and the matter is sub judice. The company is also in the processof filing another case for an amount of Rs.2000 crore (approx) against the banks inrespect of loss incurred by the bank on account of failure restructuring scheme by JLF.

A detailed discussion on the business performance and future outlookhas been given in ‘Management Discussion and Analysis' (MDA).

Consolidated financial statements

Further pursuant to Ind AS-110 issued by the Institute of CharteredAccountants of India Consolidated Financial Statements presented in this Annual Reportinclude financial information of the subsidiary companies i.e Punjab Greenfield ResourcesLimited M/s Lakshmi Green Power Limited and M/s Green Energy and Foods Pte. LtdSingapore.

Change in nature of Business

During the year under review there was no change in the nature ofBusiness. No major expansion/modernisation has been undertaken during the year.

Performance of Subsidiaries

The following may be read in conjunction with the ConsolidatedFinancial Statements prepared in accordance with Ind AS-110. Shareholders desirous ofobtaining the report and accounts of your Company's subsidiaries may obtain the same uponrequest. Further the report and accounts of the subsidiary companies will also beavailable on Company's website in a downloadable format.

Punjab Greenfield Resources Limited a wholly owned subsidiary Companypresently acts as a sales and marketing arm of LEAF and has been engaged in buying thefinished rice varieties from LEAF warehousing them and distributing them in various partsof the country using its network of brokers dealers and distributors.

M/s Lakshmi Green Power Limited is wholly owned subsidiary of yourcompany. On being operational this company shall significantly contribute to generatepower.

M/s Green Energy and Foods Pte. Ltd Singapore is subsidiary company.Being not operational since long it is being liquidated.

There is no associate Company and joint venture of the Company.

Material Subsidiaries - The Board of Directors of the Company inits meeting approved the policy for determining Material Subsidiaries. At present theCompany does not have any Material Subsidiary. The Policy on Material Subsidiary has beenposted on the website of the Company at the following link: Policyonmaterialsubsidiaries.pdf

The statement containing the salient feature of the financial statementof a Company's subsidiaries as per first proviso to sub-section (3) of section 129 in FormAOC-1 is attached as Annexure-1 and forms part of Annual Report.

Transfer to Reserves

The Company has not transferred any amount to the General Reservesduring the year under review.


Taking into account loss incurred by the Company Board of directors ofthe Company do not recommend any dividend for the year ended 31st March 2018.

Directors and KMP

In accordance with the provisions of Section 152 of the Act read withthe Articles of Association of the Company Mrs. Vijay Laxmi Sood will retire by rotationat the AGM and being eligible offers herself for re-appointment. Your Board hasrecommended her re-appointment. Brief resume/details of the Director who is to bere-appointed as mentioned above have been furnished in the Notice of the ensuing AnnualGeneral Meeting.

During the financial year Mr. Balbir Singh Uppal was re-appointed asthe Managing Director of the company to hold office for a term of 3 years w.e.f.01.09.2017. Further Mr. Janak Raj Uppal served his resignation from the office of JointManaging Director of the company w.e.f. 27.03.2018 and continued to be associated as aNon-Executive Director of the company w.e.f. 27.03.2018

The detailed section on ‘Board of Directors' is given in theseparate section titled ‘Corporate Governance Report' forming part of this AnnualReport.

Declaration of Independence

The Board has received declarations from all the Independent Directorsof the Company confirming that they meet with the criteria of independence as prescribedunder sub-section (6) of Section 149 of the Companies Act 2013 and regulation 16(b) ofSecurities & Exchange Board of India (Listing Obligations and Disclosure Requirement)Regulations 2015. In the opinion of the Board they fulfil the conditions specified in theAct and the Rules made thereunder and are Independent of the management.

Number of Board Meetings

During the year ended 31st March 2018 five meetings of the Board wereheld on 30-05-2017 12-08-2017 23-09-2017 14-11-2017 and 14-02-2018.

Mechanism for evaluation of board committees and individual directors

Pursuant to the provisions of the Companies Act 2013 and regulation17(10) of SEBI (LODR) regulations 2015 a structured procedure was adopted after takinginto consideration the various aspects of the Board's functioning composition of theBoard and its various Committees execution and performance of specific dutiesobligations and governance.

The performance evaluation of the Independent Directors was completedin time. The performance evaluation of the Chairman and the Non-Independent Directors wascarried out by the Independent Directors. The Board of Directors expresses itssatisfaction with the evaluation process.

The Nomination and Remuneration ("NR") Committee has laiddown proper criteria and procedure to evaluate and scrutinize performance of theChairperson each (including Executive Non-Executive and Independent directors) of theBoard as a whole and its Committee.

The criteria include different aspects covered under AdministrativeStrategic Operational and Compliance headings.

As per laid down procedure the Independent Directors held a separatemeeting to review the performance of the Chairperson of the Company after taking intoaccount the views of Executive and Non Executive Directors. The substantial andcontinuing contribution of the Chairperson in the growth of the Company has been highlycommended. The Independent Directors also reviewed performance of every Executive and NonExecutive Director of the Board. The performance evaluation of each Independent Directorwas done by the entire Board (except the Independent Directors being evaluated).

The performance of each committee has been evaluated by its members andfound to be highly satisfactory.

On the basis of this exercise the NR Committee and the Board afterrecognising the important contribution being made by each Independent Directors havedecided that all Independent Directors should continue to be on the Board.

Familiarisation programme for Independent Directors

During FY 2017-18 the Board including all Independent Directors wereexplained about their roles rights and responsibilities in the Company through detailedpresentations as per the Companies Act 2013 and SEBI (Listing Obligations And DisclosureRequirements) Regulations 2015.

The Board including all Independent Directors was provided withrelevant documents reports and internal policies to enable them to familiarise with theCompany's procedures and practices from time to time besides regular briefing by themembers of the Senior Leadership Team.

The Familiarisation programme for Independent Directors is posted onthe website and can beviewed at the following link-

Remuneration Policy

Your Company has set up a Nomination and Remuneration (‘NR')Committee pursuant to Section 178 of the Act which has formulated a policy for Directors'Appointment and remuneration for Directors KMP and other employees. They have alsodeveloped the criteria for determining qualifications positive attributes andindependence of a Director including making payments to Non-Executive Directors.

NR Committee takes into consideration the best remuneration practicesbeing followed in the industry while fixing appropriate remuneration packages. Further thecompensation package for Directors Key Managerial Personnel Senior Management and otheremployees are designed based on the following set of principles:

• Aligning key executive and Board remuneration with the long terminterests of the Company and its shareholders;

• Minimise complexity and ensure transparency;

• Link to long term strategy as well as annual businessperformance of the Company;

• Promotes a culture of meritocracy and is linked to keyperformance and business drivers; and

• Reflective of line expertise market competitiveness so as toattract the best talent.

Your directors affirm that the remuneration paid to employees KMP andDirectors is as per the Remuneration Policy of the Company. The Remuneration Policy of theCompany is posted on the website and can be viewed at the following Link

Directors' Responsibility Statement

Your Directors make the following statement in terms of Section134(3)(c) & (5) of the Act which is to the best of their knowledge and belief andaccording to the information and explanations obtained by them:

1. that in the preparation of the annual accounts for the FinancialYear ended March 312018 the applicable accounting standards have been followed alongwith proper explanation relating to material departures;

2. that appropriate accounting policies have been selected and appliedconsistently and judgments and estimates that are reasonable and prudent have been made soas to give a true and fair view of the State of Affairs as at March 312018 and of theProfit/Loss of your Company for the Financial Year ended March 312018;

3. that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of your Company and for preventing and detecting fraud and otherirregularities;

4. that the annual accounts for the Financial Year ended March 312018have been prepared on a going concern basis;

5. that the Directors have laid down Internal Financial Controls whichwere followed by the Company and that such Internal Financial Controls are adequate andwere operating effectively; and

6. that the Directors have devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems are adequate andoperating effectively.

Management Discussions and Analysis Report

Management Discussions and Analysis Report as required pursuant toSchedule V of Securities & Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015 is annexed and forms part of this Report.

Frauds reported by statutory auditors

During the financial year under review the statutory auditors have notreported any frauds under sub section (12) of Section 143 of the Companies Act 2013 otherthan those which were reportable to the Central Government.

Amounts due to micro small and medium enterprises

Based on the information available with the company regarding thestatus of the suppliers under the MSME there are no dues outstanding to Micro and smallEnterprises as at 31st March 2018.

Corporate Governance

The Company has complied with the Corporate Governance requirements asstipulated in Securities & Exchange Board of India (Listing Obligations and DisclosureRequirement) Regulations 2015.A separate section on Corporate Governance along with acertificate from the Auditors of the Company confirming the compliance is annexed andforms part of this Report.

The Board has also evolved and adopted a Code of Conduct based on theprinciples of Good Corporate Governance and best management practices being followedglobally. The Code is available on the website of the Company www.

Transfer to Investor Education & Protection Fund

During the year under review unpaid/unclaimed dividend ofRs.438775/- in respect of 2008-09 (Final Dividend) was transferred to "InvestorEducation and Protection Fund" (IEPF) established by the Central Government in May2017.

Hereunder are the details of Dividends paid by the Company and theirrespective due dates of transfer of unpaid or unclaimed dividends to IEPF:

Dividend for the year Date of Declaration of Dividend Due date for transfer to IEPF
2009-10 (Final Dividend) 26/03/2011 01/05/2018*
2010-11 (Final Dividend) 28/03/2012 03/05/2019
2011-12 (Final Dividend) 28/03/2013 03/05/2020
2012-14 (Interim Dividend) 03/05/2013 08/06/2020

*Already transferred to Investor Education and Protection Fund (IEPF).

Material Changes and commitments

Save as mentioned elsewhere in this Report no material changes andcommitments affecting the financial position of the Company have occurred between the endof the financial year of the Company - 31st March 2018 and the date of this Report.

Changes in Capital Structure

The company has allotted 3660000 equity shares of Rs.2/- on14-11-2017 on conversion of 3660000 warrants of Series-2 to M/s Ganeshay OverseasIndustries Limited (Promoters' Group entity).

Except the above matter there has not been any change in capitalstructure. Authorised Capital of the Company is Rs.200000000 and paid up capital wasRs.147260000/- as on 31-03-2018.

Particulars of loans guarantees and investments u/s 186

The details of the investments made by the Company are in Note No.6 ofthe audited financial statements. The Company has not made any loans to any persons withinthe meaning of Section 186 and has also not given any guarantees within the meaning ofthat section.

Related Party Transactions

During FY 2017-18 all contracts/arrangements/transactions entered intoby your Company with related parties under Section 188(1) of the Act were in the ordinarycourse of business and on an arm's length basis. During FY 2017-18 your Company hasentered into certain transactions with related parties which could be considered‘material' as per Regulation 23 of the Securities Exchange Board of India (ListingObligations & Disclosure Requirements) Regulations 2015 and these transactions arereported in form AOC-2 as Annexure-5.

Further during FY 2017-18 there were no materially significantrelated party transactions made by your Company with the Promoters Directors KeyManagerial Personnel or other designated persons which might have potential conflict withthe interest of the Company at large.

All related party transactions are placed before the Audit Committeefor its approval. There was no matter requiring approval of the Board. During the yearunder review the Audit Committee has approved transactions through the Omnibus mode inaccordance with the provisions of the Act and Listing Regulations. Related partytransactions were disclosed to the Board on regular basis as per IND AS 24. Details ofrelated party transactions as per IND AS 24 may be referred to in Note 32- Point no.14 ofthe Standalone Financial Statements.

The policy on Related Party Transactions is available on the Company'swebsite at and can be viewedat the following link: .pdf

None of the Directors has any pecuniary relationships or transactionsvis-a-vis the Company except the remuneration received by respective directors.

Risk Management System

Your Company follows a comprehensive system of Risk Management and hasadopted a procedure for risk assessment and its minimisation. It ensures that all therisks are timely defined and mitigated in accordance with the Risk Management Processincluding identification of elements of risk which might threaten the existence of theCompany. Your Company constituted a Risk Management Committee which intensely monitors theRisk Management Process in the Company and the same is periodically reviewed by the Board.

Vigil Mechanism/ Whistle Blower Policy

Your Company has in place a well formulated Vigil Mechanism/ WhistleBlower Policy to deal with instance of fraud and mismanagement if any. The policy enablesthe employees Directors and other stakeholders to raise their concern. There was noincident when the access to the Audit Committee was denied to any employees with respectto vigil mechanism. The policy is posted on the website of the Company at at the following link:

Corporate Social Responsibility (CSR)

In accordance with the requirements of Section 135 of Companies Act2013 your Company has a Corporate Social Responsibility (CSR) Committee which comprisesfollowing directors as on 31st March 2018:

1. Mr. Balbir Singh Uppal CMD - Chairman
2. Mr. Nirdosh Bali Independent director - Member
3. Mr.V.K. Mishra Independent director - Member

Your Company has also formulated a Corporate Social ResponsibilityPolicy (CSR Policy) which is available on the website of the Company at under the section InvestorInformation.

The Committee manages and overviews the CSR projects of your Company.The CSR initiatives of the Company are identified in consultation with the managementsocial experts community and other stakeholders. The implementation strategy is plannedin a way so as to give sustainable and scalable solutions. The identified focus areas forthe Company are: i) Eradicating hunger poverty and malnutrition promoting preventivehealth care and sanitation and making available safe drinking water: ii) Promotingeducation including special education and employment enhancing vocation skills especiallyamong children women elderly and the differently abled and livelihood enhancementprojects; iii) Promoting gender equality empowering women setting up homes and hostelsfor women and orphans; setting up old age homes day care centres and such otherfacilities for senior citizens and measures for reducing inequalities faced by sociallyand economically backward groups; iv) Ensuring environmental sustainability ecologicalbalance protection of flora and fauna animal welfare agroforestry conservation ofnatural resources and maintaining quality of soil air and water; v) Protection ofnational heritage art and culture including restoration of buildings and sites ofhistorical importance and works of art; setting up public libraries; promotion anddevelopment of traditional arts and handicrafts; vi) Measures for the benefit of armedforces veterans war widows and their dependents; vii) Training to promote rural sportsnationally recognised sports paralympic sports and Olympic sports; viii) Contribution tothe Prime Minister's National Relief Fund or any other fund set up by the CentralGovernment for socio-economic development and relief and welfare of the Scheduled Castesthe Scheduled Tribes other backward classes minorities and women; ix) Contributions orfunds provided to technology incubators located within academic institutions which areapproved by the Central Government; x) Rural development

projects; xi) Such other activities as may be recognized by theCommittee/ Board or as may be required/ permissible under prevailing law(s).

The Company has actively supported various initiatives in the areas ofproviding housing and promoting education to children from needy and poor families overthe years. The Annual Report on Corporate Social Responsibility Activities is annexedherewith as Annexure-2 and forms an integral part of this report.

Audit Committee

The Audit Committee of the Company comprises of the followingNon-Executive and Independent Directors:

1. Mr. Nirdosh Bali - Chairperson

2. Mr. VK.Mishra - Member

3. Mr. Amarjit Singh - Member

The details about Audit Committee and its terms of reference etc. havebeen given in Corporate Governance Report. During the Year under review there was no suchrecommendation of the Audit Committee which was not accepted by the Board.

Auditors and Auditors' Report

i. Statutory Auditors and Auditors' Report

During the year under review M/s. SMPS & Co. CharteredAccountants resigned as Statutory Auditors due to their pre-occupations resulting into acasual vacancy in the office of Statutory Auditors of the company. In the ExtraordinaryGeneral Meeting (EGM) held on 8th October 2018 M/s. K. Singh & Associates CharteredAccountants (Firm Regn no. 012458N) were appointed as the Statutory Auditors of theCompany to fill the casual vacancy caused by the resignation of M/s. SMPS & Co.Chartered Accountants and they hold the office of the Statutory Auditors from the date ofEGM until the conclusion of the ensuing Annual General Meeting (AGM).

In the forthcoming AGM M/s K.Singh & Associates CharteredAccountants are proposed to be re-appointed as Statutory Auditors of the Company to holdoffice from the conclusion of 27th AGM till the conclusion of 31st AGM of the Company inthe Calendar year 2023.

M/s. K. Singh & Associates Chartered Accountants have conveyedtheir consent to be appointed as the Statutory Auditors of the Company along with aconfirmation that their appointment if made by the members would be within the limitsprescribed under the Companies Act 2013. The Board recommends their appointment.

The observations of Auditors in their Report read with the relevantnotes to accounts are self explanatory and therefore do not require further explanationpursuant to Section 134(3)(f)(i) except for the following:

a. Outstanding amount of trade receivables: The amounts receivable areunder litigations and recoveries depend upon the outcome of court cases.

ii. Cost Auditors

M/s Anil Sharma & Co. Cost Accountants Chandigarh were appointedas the Cost Auditors of the Company for FY 2017-18 to audit the cost accounts of theCompany. They have been re-appointed as Cost Auditors for FY 2018-19. The company hasmaintained cost records as prescribed under the Companies Act.

iii. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act 2013and rules made thereof your Company has appointed M/s. Anil Negi & Company. CompanySecretaries Chandigarh to undertake the Secretarial Audit

of the Company. The Secretarial Audit Report for the Financial Yearended March 312018 is annexed herewith as Annexure-3.The

In respect of the remarks made by the Secretarial Auditor in his reportfor the financial year 2017-18 the following submissions are made by the management:

1. In respect of the matter regarding seeking approval of CentralGovernment for the re-appointment of Mr. Balbir Singh Uppal as the Managing Director ofthe company the requirement of obtaining such approval was subsequently exempted underthe Companies (Amendment) Act 2017. Hence no application was filed.

2. Regarding the filing of Form MGT-10 it may be noted that thecompany had duly filed the requisite information and intimation with the Stock Exchangesregarding the change in the shareholding. However by the time the company came to knowabout the lapse in filing of return with the MCA Portal the relevant Section 93 wasomitted from the Companies Act 2013 and the requirement for filing the said return wasdone away with.

Internal Financial Controls and their Adequacy

The Company has a proper and adequate system of internal controls. Thisensures that all assets are safeguarded and protected against loss from unauthorized useor disposition and those transactions are authorised recorded and reported correctly. Anextensive programme of internal audits and management reviews supplements the process ofinternal control. Properly documented policies guidelines and procedures are laid downfor this purpose. The internal control system has been designed to ensure that thefinancial and other records are reliable for preparing financial and other statements andfor maintaining accountability of assets. The Company has in place adequate internalfinancial controls with reference to financial statements. During the year such controlswere tested and no reportable material weakness in the design or operation was observed.

Insider Trading Code

In compliance with the SEBI regulations on prevention of insidertrading the Company had instituted a comprehensive Code of Conduct for regulatingmonitoring and reporting of trading by Insiders. The said Code laid down guidelines whichadvised them on procedures to be followed and disclosures to be made while dealing withshares of the Company and cautioned them on consequences of non-compliances.

Further the Company has put in place a Code of practices andprocedures of fair disclosures of unpublished price sensitive information. Both theaforesaid Codes are in lines with the Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015.

Compliance to Secretarial Standards

The company has duly complied with the applicable Secretarial Standardsduring the financial year 2017-18.

Deposits from Public

The Company has not accepted any deposits from public during the yearand as such no amount on account of principal or interest on public deposits wasoutstanding as on the date of balance sheet.

Cash Flow Statement

In conformity with the provisions of Clause 34(2) of SEBI (LODR)Regulations 2015 the Cash Flow Statement for the year ended on 31st March 2018 forms anintegral part of the Financial Statements.

Stock Exchange Listing

The shares of the Company are presently listed on the following StockExchanges:

1. National Stock Exchange of India Limited;

2. BSE Limited;

The company has filed applications for listing of 3660000 equityshares of Rs.2/- each allotted on 14-11-2017; however listing is pending on NSE and BSE.


As on March 312018 the total numbers of employees on the records ofthe Company were 187. Directors place on record their appreciation for the significantcontribution made by all employees who through their competence dedication hard workco-operation and support have enabled the Company to cross new milestones on a continualbasis.

Particulars of remuneration of Directors and KMP's

The statement containing particulars of employees as required underSection 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is provided in a separate Annexure-4 forming part ofthis Report.

Annual Return

Annual return referred to in section 92 will be placed on the websiteof the company at Announcement.html

Conservation of Energy Technology Absorption Foreign ExchangeEarnings and Outgo.

Information required under Section 134(3)(m) of the Act read withrules made thereof is given hereunder.

(A) Conservation of Energy:

(i) The steps taken or impact on conservation of energy

In pursuit of continuous improvement towards energy conservation andcompliance with environmental regulations many initiatives have been underway such as:

a. The maintenance of the Boiler and Turbine generator is carried outregularly with optimum care with the help of the technical professionals and modernequipments.

b. Most of the traditional lights are being converted into CFL/EFL.

c. Installation of variable frequency drives on high pressure boilerfeed water pumps ID fans FD fans and fuel feeders.

d. Installation of soft starter at grading point.

e. AC drive on cooling fans.

f. Capacitator panel for enhancing power factor.

g. Interlocking of motor operation to reduce the idle running hours ofthe motor in terms of power saving and safety.

h. Schedule cleaning of condenser in power plant and heat exchanger ofvarious units like alternator & oil coolers is being carried out to increase the heattransfer.

i. An O2 analyzer is used for monitoring and controlling flue gas ofthe boiler.

j. Use of ETP treated water for horticulture.

k. Use of condensate steam/water in boiler for power generation.

l. Air compressor with latest technology is installed to reduce powerconsumption at low load mode.

m. Additional air dryers provided in compressor air system to avoidzero moisture to Sortex machines.

Compressor air pipe lines are changed with Aluminum pipes to maintainthe quality of air entering Sortex machines.

n. Captive husk based co-generation of power reducing consumption frommain grid utilization.

o. Usage of other biomass fuel like rice/paddy straw wheat straw inoptimum ratio based on availability so that utilizing all the available fuels to run theplant and getting max plant load factor (PLF).

p. Development of greenery all over the plant.

The above energy conservation measures would result in reduction inenergy consumption and effectively saving in drawal of power from the State Grid upto 5 to10%.

(ii) The steps taken by the Company for utilizing alternate sources ofenergy :- The Company is contemplating to install solar power plant.

(iii) The capital investment on energy conservation equipments:-

Further energy conservation is planned through replacement of andmodification of inefficient equipments and by providing automatic controls to reduce idlerunning of equipments.

(B) Technology Absorption:

(i) the efforts made towards technology absorption and;

(ii) the benefits derived like product improvement cost reductionproduct development or import substitution;

The Company is taking caring of latest developments and advancements intechnology and all steps are being taken to adopt the same. The Process equipmentsinstalled in the plant are of from world class manufacturers with latest technology likeSatake -Japan Schmidt Seager - Germany Shin Nippon Machinery Co. Ltd Japan Toyo DenkiPower systems Thermax Sullair - USABB Schneider AREVA Forbes Marshal etc. TheCompany's technical team is in process of exploring the opportunities & updating newtechnology for sophisticated equipments with latest technology.

(iii) Technology imported (imported during the last three yearsreckoned from the beginning of the financial year)- None

(a) the details of technology imported;N.A

(b) the year of import; N.A

(c) whether the technology been fully absorbed:Yes

(d) if not fully absorbed areas where absorption has not taken placeand the reasons thereof; N.A

(iv) the expenditure incurred on Research and Development: The Companyis yet to carry out R & D on product genes cultivation which could be predominantlyback end process.

(C) Foreign Exchange Earnings and Outgo:

Export Activities/Initiatives to Increase Exports/Development of NewExport Markets / Export Plans


During the year under review there was no export of rice (previousyear- nil).


• Focus on existing international market for business growth

• Explore the possibility of export to other internationalmarkets.

During the year under review the earning on account of foreignexchange was Nil (Previous year- Nil) and the outgo in foreign exchange was Rs. 4.91million (Previous year - Rs. 3.79 million).

Statutory Disclosures

1. The Company has not accepted any deposit from the public fallingwithin the ambit of Section 73 of the Act and rules made thereof.

2. There is no issue of equity shares with differential rights as todividend voting or otherwise.

3. There is no issue of shares (including sweat equity shares) toemployees of the Company under any scheme.

4. Neither the Managing Director(s) nor the Whole-time Director(s) ofthe Company receive any remuneration or commission from any of its subsidiaries.

5. No significant or material orders were passed by the Regulators orCourts or Tribunals which impact the going concern status and Company's operations infuture.

6. The Company has in place a Prevention of Sexual Harassment policy inline with the requirements of the Sexual Harassment of Women at the Workplace (PreventionProhibition and Redressal) Act 2013. An Internal Complaints Committee has been set up toredress complaints received regarding sexual harassment.All employees (permanentcontractual temporary trainees) are covered under this policy. During the year 2017-18no complaints were received by the Company related to sexual harassment.


Directors wish to convey their sincere appreciation for theco-operation and excellent assistance the Company has received from central/stategovernment(s) and various ministries departments of the central/state government(s)dealers and valued business associates without which it would not have been possible toachieve all round progress and growth of the Company. The Board also places on record itsappreciation to shareholders for their continued trust and support. The Board also placeson record its appreciation for the continuous patronage of the customers of the Company.

For and on Behalf of the Board


Balbir Singh Uppal Chairman and Managing Director DIN:00064718

Place: Khamanon

Date: 31-10-2018