You are here » Home » Companies » Company Overview » Sayaji Industries Ltd

Sayaji Industries Ltd.

BSE: 540728 Sector: Others
NSE: N.A. ISIN Code: INE327G01032
BSE 00:00 | 22 Jan 128.20 -6.70






NSE 05:30 | 01 Jan Sayaji Industries Ltd
OPEN 128.20
52-Week high 152.25
52-Week low 81.10
P/E 72.02
Mkt Cap.(Rs cr) 81
Buy Price 136.25
Buy Qty 26.00
Sell Price 134.90
Sell Qty 5.00
OPEN 128.20
CLOSE 134.90
52-Week high 152.25
52-Week low 81.10
P/E 72.02
Mkt Cap.(Rs cr) 81
Buy Price 136.25
Buy Qty 26.00
Sell Price 134.90
Sell Qty 5.00

Sayaji Industries Ltd. (SAYAJIINDUSTR) - Director Report

Company director report



Your directors have pleasure in presenting the 78th annual report together with auditedstatements of accounts of the company for the financial year ended 31st March 2019.





2018-19 2017-18 2018-19 2017-18
Total income 62612.93 59022.51 64886.55 59694.12
Operating profit before interest depreciation and taxation 3264.72 2997.39 3425.46 3190.94
Gross profit 2117.87 1817.98 2201.80 1944.40
Profit before exceptional item&tax 1181.58 1000.70 1206.22 1104.77
Exceptional item



Profit after exceptional item but before tax 3297.88 1000.70 3322.52 1104.77
Tax expenses 777.85 388.32 792.72 371.24
Items that will not be reclassified to profit or loss (net of tax) (19.37) (69.45) (19.37) (69.78)
Profitaftertax 2500.66 542.93 2510.43 663.75



Your directors are pleased to report that during the year under review the totalincome of your company increased by 6% to Rs.62612.93 lakhs as against Rs.59022.51 lakhsin the previous year. There has been an increase in the maize grinding activity of thecompany. During the year under review there has been increase in the price of maize whichis the major input for the company and cost of some other inputs has gone up. The companycould however pass major portion of this increased cost of inputs to its customersdespite of adverse market conditions. The company also continued its efforts to cut thecosts at all levels and to further improve its technical parameters and its product mix toconcentrate more on high value products like dextrose anhydrous dextrose and sorbitol. Asa result of these efforts your company has been able to more or less maintain itsprofitability during the year under review.The operating profit of the company isRs.3264.72 lakhs as against Rs.2997.39 lakhs in the previous year. The gross profit of thecompany stands at. Rs.2117.87 lakhs as against Rs. 1817.98 lakhs in the previous year.Theprofit before tax of the company increased to Rs. 1181.58 lakhs as against Rs. 1000.70lakhs in the previous year. During the year under review the company sold 1200000equity shares of Rs. 10/- each held by it in Sethness Roquette India Limited (Formerlyknown as Sayaji Sethness Limited) to its J V Partners Sethness Products Company of USA atthe price of

USD 3.20 Million and profit on the sale of the said shares is shown as the exceptionitem in the statement of profit and loss. After giving effect to this the net profitafter tax increased to Rs. 2500.66 lakhs as against Rs. 542.93 lakhs in thepreviousyear.

The company has continued its efforts to strengthen industrial safety measures withinthe factory premises and is constantly arranging programs/ workshops to make the employeesaware of the safety requirements to prevent the accidents/ breakdowns/fi re etc. due tohuman errors.

The long term contract entered into by the company with Yashwant Sahakari GlucoseKarkhana Limited (YSGK) for purchase of certain products manufactured by YSGK at mutuallyagreed price was terminated due to dispute and differences between the parties. As per theterms of the termination agreement YSGK agreed to pay a sum of Rs.250.00 Lakhs in fulland final settlement. The company - has received Rs.100.00 Lakhs from YSGK till 31stMarch 2019 out of the said amount. For the balance outstanding amount of Rs.150.00 Lakhs(included in advances to suppliers) YSGK has issued post dated cheques to the company.Themanagement of the company is confident of realization of the amount of Rs.150.00 Lakhs andthe said amount is therefore considered as good.


The company has recorded a total income of Rs.64886.55 lakhs as against Rs.59694.12lakhs in the previous year. The

Gross Profit of the Company stands at Rs.2201.80 lakhs as against. Rs.1944.40 lakhs inthe previous year. During the year under review the profit before exceptional item andtax of the company stood at Rs.1206.22 lakhs as against Rs.1104.77 lakhs in the previousyear and after considering the profit on sale of equity shares held by the company inSethness Roquette India Ltd. (Formerly Sayaji Sethness Ltd.)the net profitaftertax wasRs.2510.43 lakhsasagainst Rs.663.75 lakhs in the previousyear.


During the year under review the company sub-divided its equity shares from existingone equity share of Rs. 10/- each into two equity shares of Rs.5/-each. Post sub-divisionpaid-up capital of the company is Rs.31600000/- comprising of 6320000 equity sharesof Rs.5/-each.


Your directors are pleased to recommend a dividend of Rs.2/- per equity share of theface value of Rs.5/- each (previous year Rs.3.75/- per equity share of the face value ofRs.10/- each) for the financial year ended 31 st March 2019 which if approved by themembers will be paid to those members whose names appear on the register of members ofthe company on 9th August2019.

The total outflow on account of dividend will be Rs.152.39 lakhs i ncl uding dividendtax of Rs. 25.99 lakhs.


There has been a substantial increase in the price of maize in recent times and therehas also been an issue of availability of the same. However your directors are hopefulthat this situation will improve with availability of maize from Bihar and goodmonsoonespecially in the maize growing areas.

The company has gradually increased its grinding activity and is in the process offurther increasing its grinding capacity with installation of new equipmentde-bottlenecking automation of the existing production processes and improvement ineffluent treatment facilities. The company has set up a high tech fully automated mostmodern and sophisticated dextrose monohydrate plant during the year under review.Thecompany has also introduced automation in sorbitol and HMCS plant which were operatedmanually in the past. As a result of this production of the value added products likedextrose sorbitol anhydrous dextrose has increased and the quality has also furtherimproved. This drive of automation replacement of old equipment and modernization isexpected to continue in future which in turn will increase the production of value addedproducts with improved quality and your directors are hopeful that this may positivelyimprove the top line and bottom lineofyourcompany.



During the year under review the company had sold its investment of 1200000 equityshares of Rs.10/- each in Sethness Roquette India Limited (Formerly known as SayajiSethness Limited) to its joint venture partner Sethness Products Company USA for USD3200000 and the profit on the sale of such investment is shown in the statement of profitand lossofthecompany.


The company has received in past no.ofawardsforits products use of boiler andcertifications in recognition of the company's systems. The most recent certificationsreceived by the company are OHSAS 18001:2007 certification in recognition of company'shealth and safety management system ISO 9001:2015 in recognition of company's qualitymanagement system and ISO 14001:2015 in recognition of company's environmentalmanagementsystem.


The company had availed the benefits of technical expertise from M/sTate&LyleBelgium and SIGMA MudhendislikMakine Sanayi Ve Ticaret Auaturk Mahallesi Girne CadTurkey in the past. This has enabled it to further improve the technical parameters of theproduction processes and also improve the quality of its products.


Your directors report that the export turnover of the company during the year underreview is Rs. 11111.31 lakhs as against Rs.10659.60 lakhs which shows improvement of 4.24%during the year under review. The company intends to continue with its long term exportoriented marketing policy by penetrating more in its existing international market andexploring new avenues for its high value products.


Your directors are pleased to inform you that there has been an increase in theturnover of your company due to extensive and effective efforts of the company's soleselling agents M/s LG & DoctorAssociates Private Limited.Thecompanyalsocontinues toreceive better price realization for its products as compared to its competitors. It ishearteni ng to note that due to efforts on the part of the sole selling agents despite ofincrease in the revenue from operations of the company total receivables at the end ofthe year remained in control and average credit period has reduced duringtheyear underreview.

The directors place on record its appreciation for the persistent untiring efforts ofthe sole selling agents to find new markets pursue with the customers for additionalorders and to ensure timely collection of dues.


Deposits aggregating Rs.34.05 lakhs due for repayment on or

before 31 st March 2019 were not claimed by the depositors on that date. As on thedate of this report from the aforesaid amount deposits aggregating Rs.18.39 lakhs havebeen claimed/paid.

Your company has accepted the deposits aggregating to Rs.1954.30 lakhs during the yearunder review after com plying with the provisions of the Companies Act 2013 and Companies(Acceptance of Deposits) Rules 2014. There has been no default in repayment of depositsor payment of interest thereon during the year under reviewand there are no deposits whichare not in compliance with the requirements of Chapter VoftheCompanies Act2013.

Your directors appreciate the support which the company has received from the publicand shareholders to its fixed deposit scheme.


All the properties and insurable interests of the company including buildings plantand machinery stocks loss of profit and standing charges etc. are adequately insured.


During the year under review the company installed a new biogas engine of the capacityof 1870 KVA replacing the old gas engine which utilizes biogas captured while treatingthe effluents which are generated from the manufacturing processes of the company. Thishas resulted into generation of more power at a reduced of power cost. Utilization ofbiogas for generation of electricity reduces emission of the green house gases intoenvironment and thus supports green environment.


After the end of financial year under review your company has entered into a jointventure agreement with SOCIETE DEVELOPPEMENT PRODUITS AFRIQUE - SDPA FRANCE the holdingcompany of Alland and Robert for manufacturing of Gum Arabic/ Gum Acacia Gum Ghatti andGum blends. The joint venture is a 50:50 venture wherein the company and SOCIETEDEVELOPPEMENT PRODUITS AFRIQUE - SDPA FRANCE will invest Rs.3.50 Crores each in SayajiIngritech LLP which is presently a subsidiary of the company. Apart from this there areno other material changes and commitments affecting the financial position of the companywhich has occurred between the end of the financial year under review of the company towhich the financial statements relate and the dateofthis board report.


A special resolution has been proposed for the approval of the members forreappointment of Mr. Varun P. Mehta as the executive director of the company for theperiod from 1st April 2019 to 31st March 2024 and for approving his remuneration for theperiod of three years from 1 st April 2019 to 31 st March 2022. A special resolution hasalso been proposed for revision in the payment of remuneration to Mr. Vishal P. Mehta asthe executive director of the company for the period from 1 st June 2019 to 31st March2021. The details of such reappointment and remuneration of Mr. Varun Mehta and that ofincrease in remuneration of Mr. Vishal Mehta are given in the explanatory statement of thenotice of the 78th annual general meeting.

Mrs. Sujata P. Mehta retires by rotation at the forthcoming annual general meeting andbeing eligible offers herself for reappointment.

CA Mahendra N. Shah non-executive independent director passed away on 27th July 2018.He was appointed as a director of the company in August 1983 and was a senior charteredaccountant with extensive knowledge and experience in legal finance and compliancerelated matters. Your directors place on record their appreciation for the servicesrendered by him during his tenure as a director of the company.

It is proposed to appoint Mr. Premal Mehta and Mr. Jaysheel Hazaratas independentdirectors for the period of five years for a term upto 2nd November 2023. It is alsoproposed to reappoint CA. Chirag M. Shah Dr. Gaurang K. Dalai and Dr. JanakD. Desai asthe independent directors of the company for second term of five consecutive years till 31st March 2024. The details of such directors who are proposed to be appointed asindependent directors are mentioned in the explanatory statement annexed to the notice ofthe 78th annual general meeting.

Mr. Priyam B. Mehta is the chairman and managing director of the company si neeNovember 1982. He is assisted by Mr. Varun P. Mehta who is the executive director of thecompany since January 2010 and Mr. Vishal P. Mehta who is also the executive director ofthe company since July 2011. The appointment of the said whole time directors and theirremuneration are recommended by the nomination and remuneration committee keeping in mindtheir contribution to the growth of the company the financial position of the companyprevailing industry norms provisions of the Companies Act 2013 and as approved by theboard of directors and members of the company from time to time.

The independent directors of the company are highly qualified and stalwarts in theirrespective filed with wide and varied experience. They actively participate in thediscussions at the board meeting and their suggestions have helped the company to grow ata rapid pace. The independent directors are paid sitting fees for attending the board andcommittee meetings.The nomination and remuneration committee has in place their criteriafor determination of qualifications positive attributes and independence of thedirectors which they have considered for the appointment of the new independent directorsand reappointment of independent directors for the second term of consecutive five years.

Pursuant to the provisions of Companies Act 2013 and SEBI (LODR) Regulations 2015the board has carried out an evaluation of its own performance the performance ofdirectors individually as well as the evaluation of working of its audit committeenomination and remuneration committee stakeholders relationship committee and corporatesocial responsibility committee.The manner in which the evaluation has been carried outhas been explained in the corporate governance report.

The manner in which the remuneration is paid to the directors executive directors andsenior level executives of the company has also been explained in the corporate governancereport.

During the year under review six board meetings one independent directors meeting andfour audit committee meetings were convened and held the details of which are given in thecorporate governance report.The intervening gap between the meetings was within the periodprescribed under theCompanies Act2013.


Pursuant to the provisions of Section 134 (5) of the Companies Act2013yourdirectorswould like to state that:

(i)in the preparation of the annual accounts the applicable accounting standards havebeen followed;

(ii)the directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year as on31st March 2019 and of the profit of the company for that period;

(iii) the directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the company and for preventing and detecting fraud andother irregularities;

(iv) the directors have prepared the annual accounts on a "going concern"basis;

(v) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively;and

(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.


The extract of annual return in form no. MGT-9 as provided under Section 92 (3) of theCompanies Act 2013 read with Rule 12 of the Companies (Management & Administration)Rules 2014 is annexed hereto as Annexure-1 and forms the part of this report.

Further the disclosure in the board report under Rule 5 of Companies (Appointment& Remuneration) Rules 2014 is also annexed hereto as Annexure-2 and forms the part ofthis report.


The details of loans guarantees or investments under Section 186 of the Companies Act2013 at the beginning of the year given/made during the year and at the end of thefinancial year under review is as given below:

Particulars of Loans/ Guarantees/ Investments As at 1/4/2018 Given/ Made during the financial year As at 31/3/2019
Investment in 12.00000 equity shares of Sethness Roquette Rs.12000000/- (Rs. 12000000/-) Nil as stake has been sold
India Ltd.(Formerly Sayaji Sethness Ltd.) to the joint venture partner Sethness Products Company USA.
Investment in 2500 equity shares of Rapicut Carbide Ltd. at cost Rs.5000/- Nil Rs.5000/-
Investment in 2360 equity shares of Punjab National Bank at cost Rs.184000/- Nil Rs. 184000/-
Investment in 159329 units of Rs.10/- each of Principal Asset Allocation Fund at cost Rs.1593290/- (Rs.1563290/-) Nil
Investment in Sayaji Corn Products Ltd. Rs.500000/- Nil Rs.500000/-
Investment in Sayaji Seeds LLP Rs.18000000/- Rs.6000000/- Rs.24000000/-
Investment in Sayaji Ingritech LLP) Rs.20899956/- Nil Rs.20899956/-
Corporate Guarantee given to Punjab National Bank for financial assistance to N B Commercial Enterprises Ltd. Rs.175000000/- (Rs.175000000/-) Nil. Limits transferred to Kotak Mahindra Bank Ltd.
Corporate Guarantee given to Kotak Mahindra Bank for financial assistance to N B Commercial Enterprises Ltd Rs.250000000/- Rs.250000000/-
Corporate guarantee given to Kotak Mahindra Bank for financial assistance to Sayaji Ingritech LLP Rs.82500000/- Nil Rs. 82500000/-
Corporate guarantee given to Kotak Mahindra Bank for financial assistance to Sayaji Seeds LLP Rs.60000000/- Rs.30000000/- Rs.90000000/-


All related party transactions that were entered into during the financial year were atarm's length basis and were in the ordinary course of business.The company had not enteredinto any transactions with related parties which could be considered material in terms ofSection 188 of the Companies Act 2013. Accordingly the disclosure of related partytransactions as required under Section 134(3)(h) of the Companies Act 2013 in Form AOC-2is not applicable..


The company has three subsidiaries i.e. Sayaji Corn Products Ltd. Sayaji Ingritech LLPand Sayaji Seeds LLP. Pursuant to Section 129(3) of the Companies Act 2013 a statement inForm AOC 1 containing the salient features of the financial statements of each of thesubsidiaries is attached to the annual report.


The board of directors has approved a code of conduct which is applicable to themembers of the board and all executives one level below the board. The company believes inzero tolerance against bribery corruption and unethical dealings/ behaviour of any formand the board has laid down the directives to counter such acts. The code of conduct hasbeen posted on company's web site

The code lays down the standard procedure of business conduct which is expected to befollowed by the directors and executives one level below the board in their businessdealings and in particular on matters relating to integrity in the work place in businesspractice and in dealing with stakeholders.

All the board members and executives one level below the board have confirmedcompliance with the code.


The statement on development and implementation of risk management policy is givenunder the management discussion and analysis report which is attached with this annualreport.


Details in respect of adequacy of internal finance control with reference to thefinancial statements are stated in management discussion and analysis report which formsthe part of this report.