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Simran Farms Ltd.

BSE: 519566 Sector: Others
NSE: N.A. ISIN Code: INE354D01017
BSE 10:01 | 28 Sep 108.05 -2.35
(-2.13%)
OPEN

108.20

HIGH

113.75

LOW

107.65

NSE 05:30 | 01 Jan Simran Farms Ltd
OPEN 108.20
PREVIOUS CLOSE 110.40
VOLUME 256
52-Week high 166.75
52-Week low 39.00
P/E 3.51
Mkt Cap.(Rs cr) 41
Buy Price 108.05
Buy Qty 122.00
Sell Price 111.95
Sell Qty 23.00
OPEN 108.20
CLOSE 110.40
VOLUME 256
52-Week high 166.75
52-Week low 39.00
P/E 3.51
Mkt Cap.(Rs cr) 41
Buy Price 108.05
Buy Qty 122.00
Sell Price 111.95
Sell Qty 23.00

Simran Farms Ltd. (SIMRANFARMS) - Director Report

Company director report

Dear Shareholders

Your Directors present their Report together with the audited financialstatements of your company for the year ended March 31 2020.

1. STATE OF AFFAIRS AND FINANCIAL PERFORMANCE:

1.1 FINANCIAL HIGHLIGHTS AND SUMMARY OF STANDALONE AND CONSOLIDATEDFINANCIAL STATEMENTS

The performance highlights and summarized financial results of theCompany are given below:

(Amount in Lakhs except EPS)

Particulars

Standalone Year Ended

Consolidated Year Ended

March 31 2020 March 31 2019 March 31 2020 March 31 2019
Total Income 28138.71 31996.70 28138.71 31978.81
Total Expenditure 31065.60 31385.55 31060.99 31354.83
Profit/Loss before exceptional & extraordinary items and tax (2926.89) 611.15 (2922.28) 623.98
Exceptional Items 0.00 2.65 0.00 10.81
Profit/Loss before tax (2926.89) 608.50 (2922.28) 613.17
Tax Expenses:
a) Current Tax 0.00 189.88 1.74 191.80
b) Deferred tax assets/(Liabilities) (772.58) 14.93 (773.26) 14.22
Profit/Loss after tax (2154.31) 403.69 (2150.76) 407.15
Less: Non Controlling Interest 0.00 0.00 0.61 0.60
Total (2154.31) 403.69 (2151.37) 406.56
Other comprehensive Income (Net of Tax) (15.75) (1.42) (15.75) (1.42)
Total Comprehensive Income (2170.06) 402.27 (2167.12) 405.14
Paid up Equity Share Capital 379.17 379.17 379.17 379.17
Earnings per share (Rs.10/- each) Basic & Diluted (in Rs.) (56.82) 10.65 (56.74) 10.72

The Company's performance during Financial Year 2019-20 on a standaloneand consolidated basis were as follows

A. On Standalone basis

During the year ended March 31 2020 the total income stood at Rs.281.39 crores against Rs. 319.97 crores in the previous year. The revenue of the Companydecreased by 12.06% as compared to previous year due to lower demand and lower realizationfrom sale of broilers since December 2019 (after a spike in Covid cases all over the world) as rumours circulated in social media linking poultry birds as possible vectors of theCOVID-19 virus. It further leads to the heavy demand drop and so the realizations andtherefore the poultry business had been severely suffering since the beginning of the year2020-2021.

The total expenditure during the year was Rs. 310.66 crores as comparedto Rs. 313.85 crores in previous year. The total expenditure as a percentage of revenuewas 110.40% as compared to 98.10% in the previous year. The increase is mainlyattributable to lower revenue base.

Further the Company incurred a loss of Rs. 21.54 crores as compared toprofit of Rs. 4.04 crores in last year. The Company incurred heavy net losses due to sharpdecline in demand realization & profitability in 2019-20 due to COVID-19 pandemic.

B. On Consolidated basis

During the year under review total income on consolidated basis wasRs. 281.39 crores in comparison to Rs. 319.79 crores in previous year. Further theCompany's incurred a loss of Rs. 21.50 crores as against profit of Rs. 4.07 crores inprevious year.

OPERATIONAL AND STATE OF AFFAIRS OF THE COMPANY

The Company is engaged in the business of integrated poultry andpoultry farming. The company is mainly focused on integration and consolidation of poultryactivities and has arranged large manufacturing set-up for production of poultry feed forself consumption. Company is an integrated company with expertise across the poultry valuechain and its management has vast experience in the poultry industry.

1.2 CHANGE IN NATURE OF BUSINESS

During the year there was no change in business activity of thecompany.

1.3 SHARE CAPITAL

The paid-up Equity Share Capital of the Company as at March 31 2020stood at Rs. 379.17 lakhs. During the year under review the Company has not issued anyshares with differential voting rights nor has granted any stock options or sweat equity.As on March 31 2020 none of the Directors of the Company holds instruments convertibleinto equity shares of the Company.

1.4 IMPACT ON BUSINESS OPERATIONS OF YOUR COMPANY ON ACCOUNT OFCOVID-19 PANDEMIC

The corona virus outbreak and the consequent lockdown have pushed thepoultry sector of the country into a severe crisis. The operations of the Company sufferedheavily owing to false information linking corona virus to the consumption of chicken andeggs and subsequently due to problems in the supply chain during the lockout period sinceearly January. Further the hotels and restaurants have still not opened. The Companyincurred and is still incurring large net losses due to sharp decline in demandrealization & profitability.

The demand of the poultry products had been heavily dropped since thearrival of Covid-19 in China and is still dropping at a fast pace. The shutdowns of thefood chain services including restaurants the institutional supplies marriages andtourism due to Covid-19 pandemic has also affected the market growth and demand. Furtherthe demand and supply are market driven elements and therefore we could not ascertain aswhen this situation will be stable.

The corona has caused more than just disruption in the market becauseit is not only caused disruption in the supply demand production or logistics but thebiggest disruption is on consumer behavior- the lifestyle the way of eating the attitudetowards spending the purchasing behavior the driver of making choices and so many otherthings are all set to get disrupted.

As far as present scenario is concerned this situation is absolutelyunpredictable and also believed that the best of the analysis will not be able tocomprehend how this situation is going to be enrolling in future

2. DIVIDEND

Due to losses in financial year 2019-20 your directors have notrecommended any dividend for the year under review.

AMOUNT/SHARES TRANSFERRED TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to applicable provisions of the Companies Act 2013 read withthe Investor Education and Protection Fund Authority (Accounting Audit Transfer andRefund) Rules 2016 (IEPF Rules) as amended all unpaid or unclaimed dividends arerequired to be transferred by the Company to the Investor Education

and Protection Fund (IEPF) established by the Central Government aftercompletion of seven years from the date of transfer to Unclaimed Dividend Account of theCompany. Hence during the Financial Year 2019-20 unpaid/unclaimed dividends of Rs.550814/- relating to financial year 2011-12 were transferred to the Investor Educationand Protection Fund.

Further according to the IEPF Rules the shares in respect of whichdividend has not been paid or claimed by the shareholders for seven consecutive years ormore shall also be required to be transferred to in the name of IEPF Authority.Accordingly during the financial year 2019-20 the Company has transferred 149488 equityshares to IEPF authority related to unclaimed dividend declared for financial year2011-12. Further there are no remaining unclaimed shares due for transfer in IEPF.

DETAILS OF NODAL OFFICER

The details of Nodal Officer appointed by the Company pursuant to theprovisions of IEPF Rules are available on the website of the company:

http://www.simranfarms.com/pdf/notices/details-of-nodal-officer.pdf

3. AMOUNT TRANSFERRED TO RESERVES

During the year under review no amount was transferred to GeneralReserve.

4. DEPOSITS

During the year under review the Company has not accepted any depositsfrom the public within the meaning of section 73 of the Companies Act 2013 read withCompanies (Acceptance of Deposits) Rules 2014 as amended from time to time.

UNSECURED LOAN FROM DIRECTORS

The Company has not received any unsecured loan from the directors ofthe Company during the financial year ended 31st March 2020. However theCompany has an outstanding amount of Rs.139.66 Lakhs at the end of the financial yearended 31st March 2020 received from the directors during the previous year.

5. EXTRACTS OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in FormMGT-9 as required under Section 92 of the Companies Act 2013 is annexed as ANNEXURE-Aand forms an integral part of this Report and is also available on the website of thecompany.

6. CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in enclosing the Consolidated FinancialStatements pursuant to the requirement of Section 129 of the Companies Act 2013 andRegulation 33 & Regulation 34 of the SEBI (Listing Obligations & DisclosureRequirements) Regulations 2015 (hereinafter referred as 'Listing Regulations') read withother applicable provisions and prepared in accordance with applicable IND AS forfinancial year ended March 31 2020. The Consolidated Financial Statements form part ofthis Annual Report.

A Report on the performance and financial position of the subsidiarycompany is included in the Consolidated Financial Statement and is also provided in FormAOC-1 (ANNEXURE-B) and forms part of this Annual Report.

7. NUMBER OF BOARD MEETINGS COMMITTEE MEETINGS AND AGM:

The details of the number of meetings of the Board and its Committeesheld during the Financial Year 201920 forms part of the Corporate Governance Report.Further Annual General Meeting of the Company for Financial year 2018-19 was held on 30thSeptember 2019.

8. DETAILS OF SUBSIDIARY JOINT VENTURE OR ASSOCIATE COMPANY

The Company has only one subsidiary company in the name of"Puregene Biotech Limited" as on March 31 2020. Financial of the subsidiary isdisclosed in the Consolidated Financial Statements which forms part of this AnnualReport. A separate statement containing salient features of the Financial Statement of theSubsidiary in accordance with Section 129(3) of the Companies Act 2013 and the rules madethere under in the prescribed Form AOC-1 are annexed to this Report as ANNEXURE-B andhence is not repeated here for sake of brevity. The Company does not have any jointventure or associate Company. There has been no material change in the nature of thebusiness of the subsidiary company.

In accordance with forth proviso to Section 136(1) of the CompaniesAct 2013 the Annual Report of your Company containing inter alia the audited standaloneand consolidated financial statements has been placed on the website of the Company atwww.simranfarms.com. Further audited financial statements together with relatedinformation and other reports of the subsidiary company have also been placed on thewebsite of the Company at www.simranfarms.com.

In terms of Section 136 of the Companies Act 2013 ('the Act')financial statement of the subsidiary company is not required to be sent to the members ofthe Company. The Company shall provide a copy of the annual accounts of its subsidiarycompany to the members of the Company on their request. The annual accounts of itssubsidiary company will also be kept open for inspection at the registered office of theCompany during business hours.

The Policy for determining material subsidiaries as approved by theBoard is uploaded on the Company's website and can be accessed at the Web-link:

http://www.simranfarms.com/pdf/policy/Policy%20on%20Material%20Subsidiary.pdf

9. PARTICULARS OF LOANS INVESTMENTS OR GUARANTEE BY COMPANY UNDERSECTION 186 OF THE COMPANIES ACT 2013

Your company has not given any loan or advances or given any guaranteeto any person. However your company has made investment pursuant to Section 186 of theCompanies Act 2013: (Amount in Lakhs)

Name of the company Nature of Transactions Investment made/Guarantee / Loans Provided Opening Balance as on 01/04/2019 Transactions made during the year Closing Balance as on 31/03/2020
Puregen Biotech Limited Non Current investment Investment Made 119.65 119.65
Simran hatcheries Private Limited Non Current investment Investment Made 11.89 11.89

The above stated investment are within the limits as specified undersection 186 of the Companies Act 2013 and the company is not required to take any furtherapproval of its members.

Further the Company has not given any loan and advances to subsidiarycompany. Therefore no information is reportable under Schedule-V of SEBI (ListingObligations & Disclosure Requirements) Regulations 2015.

10. PARTICULARS OF CONTRACT OR ARRANGMENT WITH RELATED PARTIES

All Related Party Transactions entered during the year were in OrdinaryCourse of the Business and at Arm's Length basis. No Material Related PartyTransactions i.e. transactions exceeding ten percent of the annual consolidated turnoveras per the last audited financial statements were entered during the year by yourCompany. Accordingly the disclosure of Related Party Transactions as required underSection 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable.

Further as a practice of good corporate governance all Related PartyTransactions are placed before the Audit Committee for review and approval. Prior approvalis obtained from the Audit Committee for Related

Party Transactions which are of repetitive nature and/or entered in theOrdinary Course of Business and are at Arm's Length. All Related Party Transactions aresubjected to independent review by an Audit Committee to establish compliance with therequirements of Related Party Transactions under the Companies Act 2013 and ListingRegulations.

In line with the requirements of the Companies Act 2013 and ListingRegulations the Policy on Related Party Transactions as approved by the Board is uploadedon the Company's website and can be accessed at the Web-link:

http://www.simranfarms.com/pdf/policy/related_party_transaction_policy.pdf

The Policy intends to ensure that proper reporting; approval anddisclosure processes are in place for all transactions between the Company and RelatedParties.

11. DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 of the Companies Act2013 and the Company's Articles of Association Mr. Kawaljeet Singh Bhatia (DIN: 00401827)retires by rotation at the forthcoming Annual General Meeting and being eligible offershimself for re-appointment. The Board recommends his reappointment for the considerationof the Members of the Company at the ensuing Annual General Meeting.

Further members in their 32nd Annual General Meeting heldon 30th September 2019 confirmed the continuation of directorship of Mr.Surendra Singh (DIN: 00645965) as Non Executive Independent Director of the Company onattainment of age of 75 years to the existing term of his office till 31stMarch 2024 in pursuance of Regulation 17(1A) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.

Further at 32nd Annual General Meeting held on 30thSeptember 2019 re- appointment of Mr. Harender Singh Bhatia (DIN: 00509426) and Mr.Kawaljeet Singh Bhatia (DIN: 00401827) as Managing Director and Whole-time Director of theCompany respectively for a term of three years w.e.f. 1st June 2019 till 31stMay 2022 was confirmed.

Further the following have been designated as the Key ManagerialPersonnel of the Company pursuant to Sections 2(51) and 203 of the Companies Act 2013read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014as amended from time to time:

1. Mr. Harender Singh Bhatia Managing Director

2. Mr. Kawaljeet Singh Bhatia Whole Time Director

3. Mr. Mahesh Patidar Chief Financial officer

4. CS Tanu Parmar Company Secretary and Compliance officer

Disqualifications of Directors:

During the year under review none of the director was disqualified forholding office as director as per the provisions of the Companies Act 2013.

12. DECLARATION BY INDEPENDENT DIRECTOR

The Company has received declaration of independence from all theIndependent Directors as required under Section 149(7) of the Companies Act 2013confirming that they meet the criteria of independence as provided in Section 149(6) ofthe Companies Act 2013 and Regulation 16(1)(b) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 ('the Listing Regulation').

13. MEETING OF INDEPENDENT DIRECTORS

The Independent Directors met once during the year under review. TheMeeting was conducted on 4th February 2020 in an informal manner without thepresence of the Chairman the Whole Time Director the Non-Executive Non-IndependentDirectors and the Chief Financial Officer.

14. FAMILIARIZATION PROGRAMME OF INDEPENDENT DIRECTORS

The details of familiarization programme for Independent Directors havebeen disclosed on the website of the Company at the link given here:

http://www.simranfarms.com/pdf/policy/familirization_programm_training_2019-20.pdf

15. COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various committees which have been constituted as apart of the good corporate governance practices and the same are in compliance with therequirements of the relevant provisions of applicable laws and statutes. Your Company hasan adequately qualified and experienced Audit Committee consisting of Mrs. Jasmeet KaurBhatia as Chairperson Dr. Surendra Singh and Mr. Surjit Singh Kohli as Members.

The recommendations of the Audit Committee were duly approved andaccepted by the Board during the year under review.

The other Committees of the Board are:

(i) Nomination and Remuneration Committee

(ii) Stakeholders' Relationship Committee

(iii) Corporate Social Responsibility Committee

The details with respect to the composition powers roles terms ofreference meetings held and attendance of the Directors at such Meetings of the relevantCommittees are given in detail in the Report on Corporate Governance of the Company whichforms part of this Annual Report.

16. STATEMENT INDICATING THE MANNER IN WHICH FORMAL ANNUAL EVALUATIONHAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE ITS DIRECTORS AND THAT OF ITSCOMMITTEES

Pursuant to the provisions of the Companies Act 2013 and SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 performance evaluation of theBoard its Committees' and the Independent Directors was carried out from time totime. The manner in which the evaluation is carried out has been explained in theCorporate Governance Report.

17. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act 2013 the board ofdirectors to the best of their knowledge and ability confirm that —

a) in the preparation of the annual accounts for the year ended March31 2020 the applicable accounting standards have been followed along with properexplanation relating to material departures if any;

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 March 31 2020and of the loss of the company for that year ended on that date;

c) that 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 annual accounts have been prepared on a going concern basis;

e) that the directors had laid down internal financial controls to befollowed by the company and that such internal financial controls are adequate and wereoperating effectively; and

f) that the directors had devised proper systems to ensure compliancewith the provisions of all applicable laws and that such systems were adequate andoperating effectively.

18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGEEARNINGS AND OUTGO

The particulars in respect of conservation of energy technologyabsorption and foreign exchange earnings and outgo as required under sub-section (3)(m)of Section 134 of the Companies Act 2013 read with Rule (8)(3) of the Companies(Accounts) Rules 2014 are given as under :

(A) Conservation of Energy

(i) The steps taken or impact on conservation of energy: The operationsof the Company do not involve substantial consumption of energy in comparison to cost ofproduction. Nevertheless the Company continues its efforts to conserve energy whereverpracticable by economizing on the use of power at the farms hatcheries and offices.

(ii) The steps taken by the company for utilizing alternate sources ofenergy: The Company has used

alternate source of energy whenever and to the extent possible.

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

(B) Technology Absorption

(i) The efforts made towards technology absorption: Not Applicable.

(ii) The benefits derived like product improvement cost reductionproduct development or import substitution: Not Applicable.

(iii) In case of imported technology (imported during the last threeyears reckoned from the beginning of the Financial Year): The Company has neitherpurchased within India nor imported any technology.

(iv) The expenditure incurred on Research and Development: The Companyhas not incurred any expenditure on Research and Development during the year under review.

(C) Foreign Exchange Earnings and Outgo C.Y. P.Y.
Foreign Exchange Earnings: NIL NIL
Foreign Exchange Outgo: NIL NIL

19. STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITHREFERENCE TO THE FINANCIAL STATEMENTS

The Company has an effective internal control and risk mitigationsystem which are constantly assessed and strengthened with new or revised standardoperating procedures. The company's internal control system is commensurate with its sizescale and complexities of its operations. The main thrust of internal audit is to test andreview controls appraisal of risks and business processes besides benchmarking controlswith best practices in the industry. The scope of internal audit includes review ofprocesses for safeguarding the assets of the Company review of operational efficiencyeffectiveness of systems and processes and assessing the internal control strengths in allareas.

Such controls have been assessed during the year under review takinginto consideration the essential components of internal controls stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by TheInstitute of Chartered Accountants of India.

The Audit Committee of the Board of Directors actively reviews theadequacy and effectiveness of the internal control systems and suggests improvements tostrengthen the same.

However your Company recognizes that Internal Financial Controlscannot provide absolute assurance of achieving financial operational and compliancereporting objectives because of its inherent limitations. Accordingly regular audits andreview processes ensure that such systems are reinforced on an ongoing basis.

20. NOMINATION AND REMUNERATION POLICY / DISCLOSURE RELATING TOREMUNERATION OF DIRECTORS / KEY MANAGERIAL PERSONNEL

In accordance with Section 178 and other applicable provisions if anyof the Companies Act 2013 read with the Rules issued there under and the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 the Board of Directorsformulated the Nomination and Remuneration Policy of your Company on the recommendationsof the Nomination and Remuneration Committee. The policy has been uploaded on theCompany's website at the web link:http://www.simranfarms.com/pdf/policy/nomination_renumeration.pdf.

Pursuant to Section 197(14) of the Companies Act 2013 neither theManaging Director nor Whole-time Director of the Company received any remuneration orcommission from the subsidiary company.

21. CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

In terms of the provisions of Section 135 of the Companies Act 2013read with Companies (Corporate Social Responsibility Policy) Rules 2014 a CorporateSocial Responsibility Committee was constituted by the Board of Directors of the Company.The Corporate Social Responsibility Committee had formulated and recommended to the Boarda Corporate Social Responsibility Policy (CSR Policy) which was subsequently adopted by itand is being implemented by the Company.

The CSR policy recommends to the Board the expenditure to be incurredon CSR activities to monitor the CSR policy of the Company from time to time and toinstitute a transparent monitoring mechanism for implementation of the CSR projects orprograms or activities undertaken by the Company.

The Company's CSR Policy lays out the vision objective andimplementation mechanism. The Company's CSR Policy is available on the Company'sweb-link:

http://www.simranfarms.com/pdf/policy/corporate_social_responsibility.pdf

The Company has focused on social cause and implementation of itsCorporate Social Responsibility and promoting education as per Schedule VII of theCompanies Act 2013.

During the financial year ended 31st March 2020; theCompany spent Rs. 9.00 lakhs on Corporate Social Responsibility (CSR) which is more than2% of average net profit of last three financial years. Detailed information report on theCSR policy and the CSR initiatives taken during financial year 2019-20 is given in ANNEXURE-C.

22. PARTICULARS OF EMPLOYEES

During the year under review none of the employee of the company isdrawing more than Rs.10200000/- per annum or Rs. 850000/- per month for the part ofthe year therefore Particulars of the Employees as required under Section 197 ofCompanies Act 2013 read with Rule 5(2) & Rule 5(3) of Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 as amended from time to time are notapplicable during the year under review.

The Disclosure required under Section 197(12) of the Companies Act2013 read with the Rule 5 of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended up to date is annexed as ANNEXURE-D and formsan integral part of this Report.

23. REPORT ON MANAGEMENT DISCUSSION AND ANALYSIS

A detailed analysis of the Company's performance is discussed in theManagement Discussion and Analysis Report which forms part of this Annual Report.

24. REPORT ON CORPORATE GOVERNANCE

As per Regulation 34(3) read with Part E of Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 a separate section on"Corporate Governance Practices" followed by the Company together with acertificate from the Statutory Auditors of the Company confirming compliance with theconditions of the Corporate Governance forms part of the Annual Report.

25. DISCLOSURE OF ESTABLISHMENT OF VIGIL MECHANISM/WHISTLE BLOWERPOLICY

As per the requirement of Section 177(9) & (10) of the CompaniesAct 2013 and Schedule V of SEBI (LODR) Regulations 2015 the Company has established a"Whistle Blower Policy" for directors and employees to enable the Directorsemployees and all stakeholders of the Company to report genuine concerns to provide foradequate safeguards against victimization of persons who use such mechanism and makeprovision for direct access to the Chairman of the Audit Committee.

The details of the "Whistle Blower Policy" have been uploadedon the Company's website and can be accessed at the web link:

http://www.simranfarms.com/pdf/policy/vigil_mechanism.pdf

26. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTSOR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There are no significant and/or material orders passed by theRegulators or Courts or Tribunals impacting the going concern status of the Company.

27. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act 2013 and Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 as amended from time totime the Company has appointed M/s. Ramesh Chandra Bagdi & Associates PracticingCompany Secretaries Indore (Certificate of Practice Number: 2871) to undertake theSecretarial Audit of the Company for the Financial Year 2019-20. The report of theSecretarial Auditor is enclosed as ANNEXURE-E and forms an integral part of thisReport.

Further the Secretarial Audit Report does not contain anyqualifications reservations or adverse remarks or disclaimer.

28. STATUTORY AUDITORS

M/s J.C. Baheti & Associates Chartered Accountants (FirmRegistration No. 03390C) were appointed as the Statutory Auditors of the Company in 30thAnnual General Meeting held on 28th September 2017 for a term of fiveconsecutive years. Pursuant to the Notification issued by the Ministry of CorporateAffairs on 7th May 2018 amending Section 139 of the Companies Act 2013 the mandatoryrequirement for ratification of appointment of Auditors by the Members at every AGM hasbeen omitted and hence your Company has not proposed ratification of appointment of M/s.J.C. Baheti & Associates Chartered Accountants at the forthcoming AGM.

EXPLANATION TO AUDITOR'S REMARKS

The Auditors in their report have referred to the notes forming part ofthe Accounts which are selfexplanatory and does not contain any qualification reservationor adverse remark or disclaimer and do not call for any further explanation/clarificationby the Board of Directors.

During the year under review the Statutory Auditors have not reportedany instances of frauds committed in the Company by its Officers or Employees to the AuditCommittee under Section 143(12) of the Companies Act 2013.

29. INTERNAL AUDITOR

The Company has appointed CS Tanu Parmar as Internal Auditor of theCompany and takes her suggestions and recommendations to improve and strengthen theinternal control systems. Her scope of work includes review of operational efficiencyeffectiveness of systems & processes compliances and assessing the internal controlstrengths in all areas.

The Audit Committee reviews adequacy and effectiveness of the Company'sinternal control environment and monitors the implementation of audit recommendationsincluding those relating to strengthening of the Company's risk management policiesand systems.

30. COST AUDIT

Your company does not falls within the provisions of Section 148 ofCompanies Act 2013 read with the Companies (Cost Records & Audit) Rules 2014 asamended from time to time therefore no such records are required to be maintained.

31. SECRETARIAL COMPLIANCE REPORT

Pursuant to SEBI vide its Circular No. CIR/CFD/CMD1/27/2019 dated 8thFebruary 2019 read with Regulation 24(A) of the SEBI (LODR) Regulation 2015 listedentities to obtain Annual Secretarial Compliance Report from a Practicing CompanySecretary for compliance of all applicable SEBI Regulations and circulars/guidelinesissued there under.

The Company has obtained the certificate from L N Joshi and Company (CPNo. 4216) Practicing Company Secretary for providing required Compliance Report for theyear ended 31st March 2020 and same has been filed with the BSE Ltd. in prescribed time.

32. CODE OF CONDUCT

The Company has laid down a code of conduct for all Board members andsenior management and independent directors of the Company. All the Board membersincluding independent directors and senior management personnel have affirmed compliancewith the code of conduct. Declaration on adherence to the code of conduct is forming partof the Corporate Governance Report.

The policy on Code of Conduct has been uploaded on the Company'swebsite at the web link http://www.simranfarms.com/pdf/policy/code_of_conduct.pdf.

33. STATEMENT INDICATING DEVELOPMENT & IMPLEMENTATION OF RISKMANAGEMENT

Your Company has a well-defined risk management framework in place. Therisk management framework works at various levels across the enterprise. The Board ofDirectors have developed & implemented Risk Management Policy for the Company whichprovides for identification assessment and control of risks which in the opinion of theBoard may threaten the existence of the Company. The Management identifies and controlsrisks through a properly defined framework in terms of the aforesaid policy.

34. MATERIAL CHANGES & COMMITMENTS IF ANY AFFECTING THE FINANCIALPOSITION OF THE COMPANY

The global disruption caused by COVID-19 combined with a totalnationwide lockdown has resulted in significant economic contraction in India. Due to thelockdown announced by the Government of India from 25th March 2020 entireoperations of the Company came to a halt. The recent Covid-19 lockdown has impacted thedomestic poultry industry severely. The industry incurred large net losses due to sharpdecline in demand realization & profitability.

The operating margins in the poultry industry had declined sharplyduring the 2020 financial year due to increased prices of key ingredients - maize andsoymeal - coupled with the inability to fully recover these price rises fromend-customers. The cost of maize and soymeal - the main ingredients of poultry feed -constitute about 70% of the variable costs (other than veterinary labour and energycosts) and for various reasons had seen a sharp increase. Also the institutionalsupplies marriages and tourism had yet been shut down due to Covid-19 pandemic whichforms a bigger part of generating revenue in the business. Therefore the profitabilityand coverage indicators of industry participants had weaken substantially. The Companyregistered operating losses due to high input cost and devalued realization.

Therefore all we can say is that the Covid-19 outbreak and theconsequent lockdown have pushed the poultry sector of the country into a crisis with hugelosses.

Apart from this there is no material changes and commitments affectingthe financial position of the company have occurred between the end of the financial yearto which the financial statements relate and the date of this Board's report

35. ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean andsafe operations. The Company's policy required conduct of operations in such a manner soas to ensure safety of all concerned compliances environmental regulations andpreservation of natural resources.

36. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013

The Company has in place an Anti Sexual Harassment Policy in line withthe requirements of Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013. An Internal Complaints Committee (ICC) has been set up to redressthe Complaint received regarding sexual harassment.

The Company has complied with provisions relating to the constitutionof Internal Complaints Committee under The Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013. All employees (permanent contractualtemporary trainees) are covered under this Policy. There was no case of sexual harassmentreported during the year under review.

The policy on Prevention of Sexual Harassment as approved by the Boardof directors has been uploaded on the website of the company at the web link:http://www.simranfarms.com/pdf/policy/sexual_harassment.pdf

37. LISTING WITH STOCK EXCHANGES

Company's shares are listed on BSE Limited. The company has paid annuallisting fee for Financial Year 2020-21.

38. COMPLIANCE OF SECRETARIAL STANDARD

The Directors state that applicable Secretarial Standards i.e. SS-1and SS-2 relating to 'Meetings of the Board of Directors' and 'General Meetings'respectively have been duly complied by the Company.

39. BUSINESS RESPONSIBILITY REPORT

Business responsibility reporting as required by Regulation 34(2) ofSEBI (LODR) Regulations 2015 with stock exchange is not applicable to your company forthe financial year ending 31stMarch 2020.

40. DEPOSITORY SYSTEM

Your Company's shares are tradable compulsorily in electronic form andyour Company has connectivity with both the Depositories i.e. National SecuritiesDepository Limited (NSDL) and Central Depository Services (India) Limited (CDSL). In viewof the numerous advantages offered by the Depository System members are requested toavail the facility of Dematerialization of the Company's shares on either of theDepositories mentioned as aforesaid. The Company has paid the Annual Custody Fee to boththe depositories for Financial Year 2020-21.

41. PREVENTION OF INSIDER TRADING

On December 31 2018 Securities and Exchange Board of India amendedthe Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations2015 prescribing various new requirements with effect from April 1 2019. In line withthe amendments the Company has adopted an amended Code of Conduct to regulate monitorand report trading by Designated Persons and their Immediate Relatives & ConnectedPersons under the Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 2015.

42. MD & CFO CERTIFICATION

The Managing Director & CFO of your Company have issued necessarycertificate pursuant to the provisions of Regulation 17(8) of the Listing Regulations andthe same forms part of this Annual Report.

43. INSURANCE

The Company's assets are adequately insured against the loss of fireand other risk as considered necessary by the Management from time to time.

44. ACKNOWLEDGEMENTS

The Board of Directors wish to place on record its sincere appreciationfor the support and co-operation received from all its stakeholders including customerspromoters shareholders bankers and suppliers various departments/agencies of State andCentral Government and business associates of the Company.

Your Board recognizes and appreciates the contribution made by allemployees at all levels that ensures sustained performance.

For and on behalf of the Board of Directors of

SIMRAN FARMS LIMITED

Date: 21st August 2020 Harender Singh Bhatia Kawaljeet Singh Bhatia
Place: Indore Managing Director Whole Time Director
DIN: 00509426 DIN:00401827

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