Your Directors are pleased to present before you the Twenty Eighth Annual Report andthe Audited Accounts of the company for the year ended March 31 2020.
PERFORMANCE OF THE COMPANY
Your company's financial results are summarized hereunder:
(Amount in Rs. Lacs)
| ||Consolidated ||Standalone |
|Particulars ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Income || || || || |
|From Operations ||48963.36 ||49961.83 ||9285.25 ||11329.5 |
|Other ||79.00 ||86.07 ||50.00 ||27.78 |
|Total ||49042.37 ||50047.90 ||9335.24 ||11357.28 |
|Profit || || || || |
|Profit Before Interest Depreciation and Taxation ||2171.89 ||2522.66 ||720.29 ||916.33 |
|Less: Interest ||757.71 ||816.47 ||236.81 ||281.45 |
|Depreciation ||243.90 ||238.08 ||100.32 ||97.77 |
|Profit Before Exceptional item & Tax ||1170.28 ||1468.11 ||383.16 ||537.11 |
|Less: Item of Exceptional Nature ||- ||379.83 ||- ||379.83 |
|Profit Before Tax ||1170.28 ||1088.28 ||383.16 ||157.28 |
|Less: Provision for Tax ||238.28 ||409.14 ||70.18 ||152.25 |
|(Including Deferred Tax and MAT Credit Entitlement) || || || || |
|Profit After Tax ||932.00 ||679.15 ||312.97 ||5.03 |
REVIEW OF OPERATIONS
Fertilizer business maintained a stable growth despite facing tough environmentalconditions during the first half of the year. Business focused on backward integration ofits plant operations infrastructure strengthening capability building andcustomercentricity initiatives to sustain its growth track.
Your Company's Revenue from Operations for the year was Rs.9285.25 as againstRs.11330 Lacs in last year. The profit before interest depreciation and tax stood atRs.720.29 as against Rs.916.33 in the previous financial year. The profit before tax forthe year was Rs.383.16 Lacs whereas it was Rs.157.28 Lacs in the previous financial year.
However Profit after tax grew to Rs.312.97 Lacs from Rs.5.03 Lacs in previousfinancial year. The EPS of your company for the financial year ended March 31 2020 wasRs.3.13 per share as compared to Rs.0.05 per share in previous year.
The companys consolidated revenue from Operations stood at Rs.48963.36 Lacs ascompared to previous year's Rs. 49961.83 Lacs and Net Profit Before Tax was Rs.1170.28Lacs for the year under review as against the previous year's consolidated Net ProfitBefore Tax of Rs.1088.28.
The Board of Directors of your company after considering holistically the relevantcircumstances and keeping in view the company's dividend distribution policy has decidedthat it would be prudent not to recommend any Dividend for the year under review.
CONSOLIDATED FINANCIAL RESULTS :
Consolidated Financial Statements incorporating the operations of the Company and itssubsidiaries is appended.
As required under the provisions of the Act a statement showing the salient featuresof the financial statements of the subsidiaries is enclosed as an Annexure A to thisReport.
However the Accounts of the Subsidiary Companies and the related information will bemade available to the Members of Shiva Global Agro Industries Limited and its SubsidiaryCompanies on request and will also be kept for inspection at the Registered Office of theCompany.
SUBSIDIARY COMPANIES :
i) Shiva-Parvati Poultry Feed Private Limited
The Company (a 51% subsidiary) achieved a total turnover of Rs.14581.01 Lacs andearned Rs.145.45 Lacs of Profits After Tax.
ii) Ghatprabha Fertilizers Private Limited
The Company (a 61.53% subsidiary) achieved a total turnover of Rs.5017.25 Lacs andearned Rs.70.45 Lacs of Profits After Tax.
iii) Shrinivasa Agro Foods Private Limited
The Company (a 51.01% subsidiary) achieved a total turnover of Rs.20655.84 Lacs andearned Rs.403.12 Lacs of Profits After Tax.
BUSINESS ENVIRONMENT :
During the year the country witnessed an above normal South West and North Eastmonsoon resulting in improved crop sowing. Your Company's key markets of Maharashtra
& Telangana received above-normal rainfall which increased reservoir levels andcanal irrigation. During the year the Kaleshwaram project on Godavari river wasinaugurated which has resulted in assured irrigation in the northern districts ofTelangana. Agriculture in Maharashtra & Telangana continued to perform well thanks tothe active engagement by the State Governments increased irrigation and income supportschemes for the farmers.
The Government of India has been focusing on agriculture as one of its priority sectorand has announced 16-point measures during Budget 2020-21 to revive the agriculture sectorin line with the Government's target to double farmer's income. These measures include anincrease in agriculture credit improving the situation in water-stressed districts focuson zero budget farming & balanced use of Fertilizers.
Direct Income Support Schemes introduced by various State and the Central Governmenthelped in improving the cash availability with farmers at the time of sowing. On theDirect Benefit Transfer (DBT) relating to Fertilizers the Government is expanding itsscope. During the year pilot testing was conducted through linking of PoS machines withsoil health cards to promote balanced nutrition. "The Pesticide Management Bill2020" was introduced in the Parliament during the year. The Bill seeks to regulatethe highly fragmented agrochemical market in India and ensure the availability ofpesticides with minimum risks. This Bill when passed will replace the Insecticide Act1968. With the higher reservoir levels and the prediction of a normal South West monsoonby the Indian Meteorological Department (IMD) Indian agriculture is expected to witness agood Kharif season during the coming year.
At the end of the year the business environment was severely impacted by COVID-19. Thepandemic which originated in December 2019 at Wuhan in China spread across the globeimpacting trade and mobility. Several nations including India have adopted a completelockdown of their economy in line with the recommendation of the World Health Organization(WHO) to contain the spread of the pandemic and gear up their medical infrastructure.
The government has been very prompt in addressing the issues faced by the industry dueto COVID 19. In India the agricultural sector has remained relatively insular duringCOVID-19. The Government has classified agriculture and related industries under essentialcommodities to ensure food security and provide livelihood opportunities to the ruralworkforce. Though the manufacture and transport of essential commodities like Fertilizerand Agrochemicals were exempted under the guidelines issued by the Ministry of HomeAffairs the Agri inputs industry faced challenges in the initial period affected by thelabour shortage employee mobility and strict administrative checks impacting the rawmaterial handling production and distribution. However the situation is fast normalizingand the industry is now geared up to increase its production with support from the Centreand the State Governments.
The Government has announced three major reforms in the area of agri output marketingas the aftermath of COVID-19 which is expected to result in improved price discovery forthe farm produce. These reforms include increased participation of private playersreforming the Agriculture Produce Market Committee (APMC) and promoting contract farming.With faster adoption of superior products smarter delivery mechanism digital and agritechnology penetration Indian agriculture is gearing up for a second green revolution inthe years to come.
RESPOSNE TO COVID-19 :
Your Company stands in support with the Central Government State Governments and localgoverning bodies and remains committed to the farming community in these challengingtimes. Company's relief and rehabilitation interventions include the distribution ofmasks hand sanitizers hand wash soap and other daily essentials to its employees &in around its area of operations. Your Company has been educating the farmers on theaspects of health hygiene and safety through its retail and dealer network.
The Company is operating its plants after meeting all the standards laid down by thedistrict administration on safety and social distancing to ensure the availability of agriinputs for the upcoming Kharif season. The majority of the retail centers and the dealerchannel have been operating to meet the agri input demands of the farmers.
RISK MANAGEMENT POLICY
The Company has constituted a Risk Management Committee. Details of constitution of theCommittee and its terms of reference are set out in the Report on Corporate Governance.The Company has formulated a Risk Management Policy under which various risks associatedwith the business operations are identified and the mitigation process are being taken up.
INTERNAL FINANCIAL CONTROL SYSTEMS
The Company has adequate Internal Financial Controls commensurate with the naturesize and complexity of the businesses and operations. These are routinely tested andcertified by Statutory as well as Internal Auditors. Significant audit observations andthe follow up action are reported to the Audit Committee.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of business. There were no materialsignificant related party transactions made by the Company with the Promoters DirectorsKey Managerial Personnel or the Senior Management which may have a potential conflict withthe interest of the Company at large.
All related party transactions were placed before the Audit Committee / Board forapproval. Prior approval of the Audit Committee was obtained for the transactions whichare foreseen and are in repetitive in nature. The related party transactions entered intoare reviewed by an independent audit firm to confirm that they were in the ordinary courseof business and at arm's length basis. The Company has formulated a policy for RelatedParty Transactions which has been approved by the Board and is placed on the website ofthe Company.
None of the Directors had any pecuniary relationship or transactions with the Companyexcept the payments made to them in the form of remuneration sitting fee and commission.
M/s Aditya Falor & Associates Chartered Accountants were appointed as Auditors ofthe Company for a period of five years from the conclusion of the Annual General Meetingheld on September 29 2016. As required under the provisions of Section 139 of the Act aresolution for the yearly ratification of their appointment is being placed before theshareholders for their approval.
The Auditor's Report given by M/s Aditya Falor & Associates Statutory Auditor'son the financial statements of the Company for the year ended March 31 2020 is part ofthe Annual Report. The Auditor's Report does not contain any qualification reservation oradverse remark. During the year under review the Auditors have not reported any matterunder Section 143(12) of the Act therefore no detail is required to be disclosed underSection 134(3)(ca) of the Act.
Pursuant to Section 148 of the Act read with The Companies (Cost Records and Audit)Rules 2014 as amended the cost records of the Company are required to be audited. Basedon the recommendations of the Audit Committee your Board has appointed the followingpracticing Cost Accountants Mr. Jayant B. Galande to audit the cost records of theCompany for the year 2020-21.
The Cost Audit Report for the year 2018-19 has been filed with Ministry of CorporateAffairs within the prescribed time limit as per the Act.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board had appointed Mr. Pawan Kasatof M/s. PHK & Associates Practicing Company Secretaries to undertake the secretarialaudit of the Company for the financial year 2019-20.
The report of the Secretarial Auditor is enclosed as Annexure B and forms part of thisreport. The Secretarial Audit Report does not contain any qualification reservation oradverse remark.
PARTICULARS OF LOANS GUARANTEES AND
Details of loans and guarantees given and investments made under Section 186 of the Actare given in the Notes to the Financial Statements.
PUBLIC FIXED DEPOSIT
Your Company is eligible to accept deposit from public pursuant to Section 73 of theCompanies Act 2013 ("the Act") and the Companies (Acceptance of Deposits)Rules 2014 ("the Rules"). Pursuant to the Special Resolution passed by themembers at the Annual General Meeting (AGM) of the Company held on September 30 2014 theBoard of Directors of the Company approved the Fixed Deposit Scheme for acceptance ofdeposits from Members in accordance with the requirements of the Act and the Rules.
The Company has accepted deposits of Rs.13.55 Lacs during the year under review andtotal Rs.98.70 Lacs were outstanding as on March 31 2020. There were no defaults inrespect of repayment of any deposits or payment of interest thereon during the year underreview.
The Company has not accepted any deposits which are not in compliance with therequirements of the Act. The Company has no overdue deposits as at the end of the yearunder review.
In accordance with Section 152 of the Companies Act 2013 Mr.Arun Toshniwal isretiring at the ensuing Annual General Meeting and being eligible offer himself forre-appointment.
In accordance with the provisions of Section 134 of the Act and Regulation 17 of theListing Regulations the Board has carried out evaluation of its own performance theperformance of Committees of the Board namely Audit Committee Stakeholders RelationshipCommittee and Nomination and Remuneration Committee and also the Directors individually.The manner in which the evaluation was carried out and the process adopted has beenmentioned in the Corporate Governance Report.
NUMBER OF BOARD MEETINGS
A calendar of meetings is prepared and circulated in advance to the Directors. Duringthe year 2019-20 Four Board Meetings were held the details of which are given in theReport on Corporate Governance.
The Audit Committee comprises of Mr. Deepak S. Maliwal Chairman Mr. Divakar Shettyand Mrs. Sandhya Maheshwari. All the recommendations made by the Audit Committee wereaccepted by the Board.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
On their appointment Independent Directors are familiarized about the Company'soperations and businesses. Interaction with the Business Heads and key executives of theCompany is also facilitated. Detailed presentations on the business of each of theDivision are also made to the Directors. Direct meetings with the Chairman and theManaging Director are further facilitated for the new appointee to familiarize him herabout the Company/its businesses and the group practices.
The role rights duties and responsibilities of Independent Directors have beenincorporated in the Letters of Appointment issued to them. The amendments / updates instatutory provisions are informed from time to time. The details of familiarisationprogramme as above are also disclosed on the Company's website.
DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134 (3) (c) and 134(5) of the Companies Act 2013the Board of Directors of Shiva Global Agro Industries Limited make the followingstatements to the best of their knowledge and belief and according to the information andexplanations obtained by them :
a) That in the preparation of the annual financial statements for the year ended March31 2020 the applicable accounting standards have been followed and there have been nomaterial departures therefrom;
b) That the accounting policies mentioned in Notes forming part of the FinancialsStatements have been selected and applied consistently and judgments and estimates havebeen made that are reasonable and prudent so as to give a true and fair view of the stateof affairs of the Company as at March 31 2020 and of the profits of the Company for theyear ended on that date;
c) That proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
d) That the annual financial statements have been prepared on a going concern basis;
e) That proper internal financial controls have been laid down to be followed by theCompany and such internal financial controls are adequate and operating effectively;
f) That the proper systems are in place to ensure compliance with the provisions of allapplicable laws and such systems are adequate and operating effectively.
KEY MANAGERIAL PERSONNEL
Mr. Omprakash Gilda Managing Director Mr. Umesh Bang Chief Financial Officer andMrs. Rashmi Agrawal Company Secretary are the Key Managerial Personnel (KMP) of theCompany.
PARTICULARS OF EMPLOYEES
A table containing the particulars in accordance with the provisions of Section 197(12)of the Act read with Rule 5(1) & (2) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014 is appended as Annexure C to this Report.
The Company has no Employees whose salary exceeds the limits prescribed under Rule 5(2)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.
The Board has on the recommendation of the Nomination & Remuneration Committeeframed a policy for selection and appointment of Directors Senior Management and theirremuneration. Salient features of the Remuneration Policy are set out in the Report onCorporate Governance.
PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE POLICY
The Company has in place a Prevention of Sexual Harassment Policy in line with therequirements of the Sexual Harassment of Women at Work place (Prevention Prohibition andRedressal) Act 2013 (Act). An Internal Compliance Committee (ICC) has been set up toredress complaints received regarding sexual harassment. All employees are covered underthis Policy. During the year 2019-20 there were no complaints received by the ICC.
EXTRACT OF THE ANNUAL RETURN
In accordance with Section 134(3)(a) of the Act an extract of the Annual Return in theprescribed format is appended as Annexure D to this Report.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company believes in the conduct of the affairs of its constituents in a fair andtransparent manner by adopting the highest standards of professionalism honestyintegrity and ethical conduct. The Company has a Whistle Blower Policy which provides theemployees customers vendors and directors an avenue to raise concerns on ethical andmoral standards and legal provisions in conduct of the business operations of the Company.The Whistle Blower Policy is also placed on the website of the Company atwww.shivaagro.org.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO
The particulars as prescribed under Sub-section (3)(m) of Section 134 of the Act readwith Rule 3 of the Companies (Accounts) Rules 2014 are detailed below.
A) CONSERVATION OF ENERGY :
The company has taken various measures for its energy conservation as detailed below;
Small Group Activity teams have been constituted to constantly look at theenergy conservation other improvement schemes which have resulted in considerable energysavings.
Energy efficient Lighting LED Lighting replaced compact fluorescentlamps fluorescent tube lights in Administrative Building & Storage Godowns.
Replacement of old motors and pumps with high efficient pumps and motors.
Measures for Reduction in power consumption undertaken with installation of newenergy efficient motors and gear box.
B) TECHNOLOGY ABSORPTION:
Company has fully absorbed the technology to manufacturing Single SuperPhosphate (SSP) with an installed capacity of 400 TPD.
The plant has been operated at its full efficiency level.
Enhanced flexibility in use of raw materials.
C) FOREIGN EXCHANGE EARNINGS AND OUTGO:
The Foreign Exchange outgo on account of purchase of raw materials is Rs.1311.48(Previous year Rs.1828.93 Lacs)
SAFETY HEALTH AND ENVIRONMENT (SHE) :
Company's focus on Safety Health and Environment continued during the year underreview across all locations with all manufacturing plants maintaining high safetystandards. Your Company maintained high standards of environmental performances with allfacilities operating well within norms. The overall safety environment continued toimprove during the year under review. To improve Environmental Management reportingadvanced emission monitoring equipment were installed and maintained at the sites.
The Company is committed to maintain high standards of Corporate Governance. Asstipulated under the requirements of the Listing Agreement with Stock Exchanges a reporton Corporate Governance duly audited is appended as Annexure E for information of theMembers. The requisite certificate from the Auditors of the Company confirming compliancewith the conditions of Corporate Governance is attached to the Report on CorporateGovernance.
MANAGEMENT DISCUSSION AND ANALYSIS
A report on Management Discussion and Analysis which forms part of this Annual Reportinter-alia deal with the operations as also current and future outlook of the company isfurnished separately.
MATERIAL SUBSIDIARY POLICY
The Company has adopted a policy for determining material subsidiary in line with therequirements of the Listing Regulations. The Policy on Material Subsidiary is available onthe website of the Company.
COMPLIANCE OF SECRETARIAL STANDARDS
The Company has complied with the Secretarial Standards issued by The Institute ofCompany Secretaries of India and approved by the Central Government.
The Directors acknowledge and would like to place on record the commitment anddedication on the part of the employees of your Company for their continued efforts inachieving good results in an adverse situation.
The Directors also wish to acknowledge and record their appreciation of the continuedsupport and assistance received by the Company from Union Bank of India and other Banksfinancial institutions as well as from various Government bodies both at the Centre andthe State.
|For and on behalf of the Board of Directors || |
|Place : Nanded ||Omprakash K. Gilda |
|Dated : July 03 2020 ||Managing Director |