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Sita Shree Food Products Ltd.

BSE: 532961 Sector: Agri and agri inputs
NSE: SITASHREE ISIN Code: INE686I01011
BSE 00:00 | 03 Feb Sita Shree Food Products Ltd
NSE 05:30 | 01 Jan Sita Shree Food Products Ltd
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Sell Qty 1300.00
OPEN 0.39
CLOSE 0.39
VOLUME 300
52-Week high 0.39
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 1
Buy Price 0.39
Buy Qty 4.00
Sell Price 0.39
Sell Qty 1300.00

Sita Shree Food Products Ltd. (SITASHREE) - Director Report

Company director report

BOARD’S REPORT

To

The Members

Sita Shree Food Products Limited Indore

Your Board of Directors has immense pleasure in presenting the 22ndAnnual Report ofyour Company along with the Audited Financial Statements for the Financial Year ended on31st March 2018. Further in compliance with the Companies Act 2013 the Company has maderequisite disclosures in this Board’s Report with the objective of accountability andtransparency in its operations to make you aware about its performance and futureperspective of the Company.

1.1 FINANCIAL RESULTS AND STATE OF COMPANY’S AFFAIR AND CHANGE IN THE NATURE OFBUSINESS:

The Board’s Report is prepared based on the financial statements of the companyfor the year ended March 31 2018 is summarized below:

(Rs. In Lacs)
Particulars 2018 2017
Income from operation (385.87) 14827.48
Profit/loss before providing Depreciation and Interest (1070.41) (14549.06)
Less: Depreciation 571.55 567.93
Interest 2418.19 2540.95
Profit/loss Before Exceptional & Extraordinary Items (4060.15) (17657.94)
Less: Exceptional Items - -
Profit/loss Before Taxation (4060.15) (17657.94)
Less: Provision for Current Taxation - -
Deferred Tax Liability (803.19) (1026.17)
Profit /Loss after Taxation (3256.96) (16631.77)

The Company had started its journey in capital market segment in 2008 by an IPO andlisted its securities at National Stock Exchange of India Limited and Bombay StockExchange Limited. The company has diversified its business in due course of time andstarted its Soya Re nery (Solvent Extraction Plant). All the products different segmentsincluding performance and business environment thereof have been covered in detail in theManagement Discussion and Analysis Report separately which is annexed as ANNEXURE III withthis report and shall form part of the Board’s report.

1.2 WORKING PERFORMANCE REVIEW:

Due to huge losses and liabilities the income goes negative during the financial yearfrom Rs. 14827.48Lacs to Rs.(385.87)Lacs and resulting in net loss of Rs. 3256.96 Lacsagainst the loss of Rs. 16631.77 Lacsin the previous year. Company is having loss of Rs.4060.15 Lacs before the tax. Financial position of the Company is suffering from heavylosses and acute shortage of working capital fund. Credit facilities with Banks and NBFCsare classified as NPA. No production activities during the year and both the plants of theCompany are remain idle during maximum days in the year. Networth of the Company is fullyeroded during the year due to losses. Notice u/s 13 (2) of Securitization andReconstruction of Financial Assets and Enforcement of Security Interest Act 2002 dated02.07.2018 has been issued by the State Bank of India due to failed to repay thedues/outstanding liabilities. Turnover of the company is negative during the year due tosales return ofRs. 9.33 crore.Your Directors are trying hard to control the situation withdedicated efforts of the management and with improving ability to source raw materialsrequired from multiple sources in a timely and cost effective manner.

The Company is engaged in the business of wheat soya and pulses products manufacturingand by products of agro commodities in local as well as international market. Inmanufacturing activity of our division turnover is Rs. (4.86)Lakhs as compare to Rs.65.60Crores of previous year similarly for soya division sales of manufacturing activity isRs.(4.17)Crores as compare to Rs. 71.31Crores of previous year. In Grading &Processing activity of our division turnover is Rs .Nil as compare to Rs.7.53 Crores ofprevious year. Further the detailed performance covered in the Management Discussion andAnalysis Report separately which is annexed as ANNEXURE IIIwith this report and shall formpart of the Board’s report.

1.3 CHANGES IN NATURE OF BUSINESS

There is no change in the nature of business of the Company during the financial year2017-18.

1.4 SHARE CAPITAL:

The paid up equity capital as on March 31 2018 was Rs. 608341740/-.

1.5 REVISION IN FINANCIAL STATEMENTS

In terms of section 131 of the Companies Act 2013 the Financial Statements andBoard’s Report are in compliance with the provisions of section 129 or section 134 ofthe act and that no revision has been made during any of the three preceding financialyears.

2. RESERVES:

No amount has been proposed by the Board to carry to any reserves.

3. DIVIDEND:

The Company being in loss this year and in view of requirements of regular funds foroperations your directors is unable to recommend any dividend for the Financial Yearended on March 31 2018.

4. DEPOSITS:

The Company has neither accepted nor invited any deposit from the public and hencedirectives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance ofdeposits by Companies) of the Companies Act 2013 and rules framed there under are notapplicable for the year.

However company is having unsecured loan of Rs.34947332/-as on 31.03.2018fromDirectors of the company for which proper declaration has been furnished by them asrequiredunder Rule 2(viii) of the Companies (Acceptance of Deposits) Rules 2014 duringthe period under review.

5. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR UPTO THEDATE OF THIS REPORT:

Notice u/s 13 (2) of Securitization and Reconstruction of Financial Assets andEnforcement of Security Interest Act 2002 dated 02.07.2018 has been received from StateBank of India due to failed to repay the dues/outstanding liabilities. Therefore the SBIled consortium through its leader State Bank of India issued notice to discharge in fullliabilities within 60 days from the date of the notice and also liable to pay futureinterest at the contractual rate on the amount due together with incidental expensescosts charges etc.

M/s M.P. Turakhia& Associates Cost Accountants in whole time Practice has beenappointed as Cost Auditor to conduct audit of the Cost Accounts maintained by the Companyrelating to "Edible Oil (Soya) & Soya Lecithin Powder/Liquid" for theFinancial Year 2017-18 on August 14th 2018as recommended by the Audit Committee andsubject to the approval/ ratification by the members.

M/s P.S. Tripathi & Associates Company Secretaries has been appointed asSecretarial Auditor to conduct the audit of Secretarial and related documents of theCompany and give the Secretarial Audit Report as per provisions of section 204 of theCompanies Act 2013 and rules made thereunder.

Except than the matters stated above no material changes and commitments affecting thefinancial position of the company which have occurred between the end of the financialyear of the company to which the financial statements relate and the date of this report.

6. HIGHLIGHTS OF PERFORMANCE OF ASSOCIATE COMPANIES AND THEIR CONTRIBUTION TOOVERALL PERFORMANCE OF THE COMPANY:

As per the Companies Act 2013 and as on date the company is neither having anySubsidiary Company u/s 2(87)nor any Associate Company u/s 2(6) and hence do not call forany disclosure under this head.

7. EXTRACT OF THE ANNUAL RETURN:

In compliance with section 92(3) section 134 (3) (a) and rule 11 of the Companies(Management and Administration) Rules 2014 the extract of the annual return in Form No.MGT 9 which is annexed as ANNEXURE Iwiththis report and shall form part of theBoard’s report.

8. BOARD AND COMMITTEE MEETINGS:

During the years under review various meetings of the Board of Directors and Committeeswas held for various purposes which are in compliance with the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 entered into bythe Company with Stock Exchange(s). Further the details of the various meetings of theBoard and Committees are mentioned in the Report on Corporate Governance which is annexedas ANNEXUREIVwith this report and shall form part of the Board’s report.

9. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to Section 134 (5) of the Companies Act 2013 the Directors based onrepresentation received from the operating management and after due enquiry confirm inrespect of the audited financial accounts for the year ended March 31st 2018:

a) That in preparation of the annual accounts the applicable accounting standards hadbeen followed and that there were no material departures;

b) That the Directors had in consultation with the Statutory Auditors selected suchaccounting policies and applied them consistently and made judgments and estimates thatare reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company for the year ended March 31st 2018 and the profit and loss Account of theCompany for that period;

c) That 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;

d) That the Directors had prepared the annual accounts on a going concern basis;

e) That the directors have laid down internal financial controls to be followed by thecompany and such internal financial controls are adequate and were operating effectively;and

f) That the directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and such systems were adequate and operatingeffectively.

10.1 CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

During the year under report Mr. Dinesh Agrawal Chairman cum Director of the Companywould retire by rotation at the forthcoming Annual General Meeting of the Company.Proposals for their re-appointment have been included in the Notice of Annual GeneralMeeting for your approval.

During the year under review Mr. Ganesh Prasad Sharma Independent Director of theCompany has resigned w.e.f. 30.05.2017 due to his pre-occupancies; the Board places itsappreciation for the services rendered by him during his tenure.

During the year under review Mr. MannalalSethi Non-Executive Director of the Companyhas resigned w.e.f. 30.05.2017 due to his pre-occupancies; the Board places itsappreciation for the services rendered by him during his tenure.

During the year under review Mr. Sunil Kumar Garg Independent Director of the Companyhas resigned w.e.f. 15.02.2018due to his pre-occupancies; the Board places itsappreciation for the services rendered by him during his tenure.

Ms. Vipenjeet Kaur Banger Company Secretary and Compliance Officer of the Company havebeen resigned from her post due to herpre-occupancies. The Board thereby acceptedherresignationw.e.f. 12.03.2018 and places on record its appreciation for the servicesprovided by her during hertenure as the Company Secretary of the Company.

All the intimations pertaining to the appointments and resignations made during theyear has been given to Stock Exchange (s) where the shares of the Company are listed andalso the relevant records are duly updated with the Registrar of Companies Gwalior(M.P.) wherever required.

10.2 DISCLOSURE OF DECLARATION FOR DISQUALIFICATIONS BY DIRECTORS:

As per the declaration received in Form ‘DIR-8’ pursuant to section 164(2) ofthe Companies Act 2013 and Rule 14(1) of Companies (Appointment and Qualification ofDirectors) Rules 2014 none of the Directors of the Company is disqualified from beingappointment as Directors.

11.1 APPOINTMENT/RE-APPOINTMENT OF INDEPENDENT DIRECTORS:

All the Independent Directors are well appointed in the Board of the Company incompliance with the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 entered into by the Company with Stock Exchange(s).Further that all independent directors shall hold office for a term up to ve consecutiveyears on the Board of a Company but shall be eligible for reappointment for next ve yearson passing of a special resolution by the Company and disclosure of such appointment inthe Board’s report.

11.2 DISCLOSURE OF DECLARATION FOR INDEPENDENCE BY INDEPENDENT DIRECTORS:

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence under sub-section (6) of section149of the Companies Act 2013.

11.3 FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Directors had been introduced to all the Board members and the senior managementpersonnel such as Chief Financial Officer Company Secretary and Various Department headsindividually to know their roles in the organization and to understand the informationwhich they may seek from them while performing their duties as a

Director. And meeting had also been arranged for Independent Directors with aforesaidofficials to better understand the business and operation of the Company. As part ofcontinuous updating and familiarization with the Company every Independent Director hadbeen taken for visits to the factory or manufacturing units and other branch of thecompany where officials of various departments apprise them of the operational andsustainability aspects of the plants to enable them to have full understanding on theactivities of the Company and initiatives taken on safety quality etc. The Company mayalso circulate news and articles related to the industry from time to time and may providespecific regulatory updates.The company has also organized Familiarization Programme forIndependent directors. The details of such programmes for Independent Directors are postedon the website of the company and can be accessed athttp://sitashri.com/docs/policies/familiarization_prog_det.pdf

11.4 SEPARATE MEETING OF INDEPENDENT DIRECTORS:

As mandated by Clause VII of Schedule IV of the Companies Act 2013 a separate meetingof Independent Directors was held on31st of March 2018.

11.5 EVALUATION BY INDEPENDENT DIRECTORS:

The Independent Directors in their meeting has reviewed the performance ofNon-Independent directors and Board as a whole including reviewing the performance of theChairperson of the company taken into account the views of Executive Directors andNon-Executive Directors. The said policy including above said criteria for the evaluationof the Board individual directors including independent directors and the committee ofthe board has been laid down under Nomination Remuneration and Evaluation Policy given inthe Report on Corporate Governance which is annexed as ANNEXURE IV with this report andshall form part of the Board’s report.

12. POLICIES:

We seek to promote and follow the highest level of ethical standards in all ourbusiness transactions guided by our value system. The SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 and Companies Act 2013 has mandated theformulation officertain policies for all listed companies. All our corporate governancepolices are available on our website(http://sitashri.com/index.php/shareholder-desk/policies).The policies are reviewedperiodically by the board and updated on need and new compliance requirement.

Name of the Policy Brief Description Web Link
Nomination Remuneration and Evaluation Policy This policy formulates the criteria for determining qualifications positive attributes independence of the Directors and recommends to the Board a Policy relating to the remuneration for the Directors Key Managerial Personnel and other employees http://sitashri.com/docs/policie s/nomination.pdf
Policy for determining materiality of event The policy applies for disclosures of material events affecting company and its associates. http://sitashri.com/docs/policie s/policy_determining_materiali ty_events.pdf
Corporate Social Responsibility Policy The policy outlines the Company’s strategy to bring about a positive impact on society through programs relating to hunger poverty educationhealthcare environment and lowering its resource footprint. http://sitashri.com/docs/policie s/csr_policy.pdf
Policy on document preservation The policy outlines that the Company intends to safeguard significant documents and preserve them to ensure durability of documents including documents in electronic form. http://sitashri.com/docs/policie s/document_preservation.pdf.
Related Party Transactions Policy The policy regulates all transactions between the Company and its related parties. http://sitashri.com/docs/policie s/related_party.pdf http://sitashri.com/docs/policie s/whistle_blower.pdf
Whistle Blower and Vigil Mechanism Policy The policy outlines the whistleblower mechanism for directors and employees to report concerns about unethical behavior actual or suspected fraud or violation of the Company’s code of conduct and ethics. http://sitashri.com/docs/policie s/policy_on_prevention.pdf http://sitashri.com/docs/policie s/risk_management.pdf
Policy on prevention of sexual harassment at workplace The policy that the Company provides an equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice gender bias and sexual harassment. http://sitashri.com/docs/policie s/policy_determining_material _subsidiary.pdf.
Risk Management Policy The policy that builds a strong risk management culture to better understand a risk pro le and to better manage the uncertainties. http://sitashri.com/docs/policie s/risk_management.pdf
Policy for determining Material Subsidiary The Policy is framed to determine material subsidiary. http://sitashri.com/docs/policie s/policy_determining_material _subsidiary.pdf.

13. NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP

COMMITTEE:

The Board of Directors of your Company hadre-constituted the Nomination andRemuneration Committee and Stakeholders Relationship Committee with the requisite terms ofreference as required under Section 178 of the Companies Act 2013 and other applicableprovisions thereof;

The constitutions of the said committees are as under:

Nomination and Remuneration Committee

Name Designation
Mr. Sunil Kumar Garg Chairman
Mr. Ganesh Prasad Sharma Member
Mr. Mannalal Sethi Member
Mr. Ankit Magare3 Member
Mr. Lucky Mevati Chariman
Mrs. Archana Shukla Member

1Resigned from the Board and Chairmanship w.e.f. 15.02.2018 2Resignedfrom the Board w.e.f. 30.05.2017 3Appointed as director and committee memberw.e.f. 20.05.2017 4 Appointed chairman w.e.f 15.02.2018 5 Appointedcommittee member w.e.f. 15.02.2018

Stakeholders Relationship Committee

Name Designation
Mr. Sunil Kumar Garg Chairman
Mr. Ganesh Prasad Sharma Member
Mr. Mannalal Sethi Member
Mr. Ankit Magare Member
Mr. Lucky Mevati Chariman
Mrs. Archana Shukla Member

1Resigned from the Board and Chairmanship w.e.f. 15.02.2018 2Resignedfrom the Board w.e.f. 30.05.2017 3Appointed as director and committee memberw.e.f. 20.05.2017 4 Appointed chairman w.e.f 15.02.2018 5Appointedcommittee member w.e.f. 15.02.2018

14. DISCLOSURE IN TERMS OF NOMINATION AND REMUNERATION POLICY:

The Board of Directors of your Company had constituted the Nomination and RemunerationCommittee with the requisite terms of reference as required under section 178 of theCompanies Act 2013. The said Committee framed adopted and recommended the"Nomination Remuneration & Evaluation Policy" and the said policy has beenapproved by the Board. The Details of the Nomination and Remuneration Committee and thesaid Policy given in the Report on Corporate Governance which is annexed as ANNEXURE IVwith this report and shall form part of the Board’s report and at the and at thewebsite of the company www.sitashri.com.

15.1 AUDITORS:

(i) Statutory Auditors:

As M/s Dilip K Neema& Associates Chartered Accountants has resigned from theoffice of Statutory Auditor of the Company on 16.05.2018 due to preoccupation andunavoidable circumstances. Therefore pursuant to provisions of Section 139 of the Act andthe Rules made thereunder M/s Vinay Gandhi & Associates Chartered Accountants (FRN:014442C) has been recommended by audit committee and appointed by the Board on 24.05.2018to ll the casual vacancy caused by resignation of M/s Dilip K Neema& Associates and todo the audit for the Financial Year 2017-18 which was subject to the approval ofshareholders.

Further on being eligible the audit committee of the Company has proposed the Boardhas recommended the appointment of M/s Vinay Gandhi & Associates CharteredAccountants (FRN: 014442C) as the Statutory Auditor of the Company to conduct StatutoryAudit for a period of 5 (Five) consecutive years and to hold the office from theconclusion of this Annual General Meeting till the conclusion of Annual General Meetingfor the financial year 2022-2023. Proposal for their appointment have been included in theNotice of Annual General Meeting for your approval.

(ii) Cost Auditors:

M/s. M. P. Turakhia& Associates Cost Accountants were appointed as Cost Auditorsfor auditing the cost records of your Company for the financial year 2017-18 by the Boardof Directors on a consolidated remuneration of Rs. 40000/- only the remuneration wasrecommended by the Audit Committee of the Company. Further the remuneration proposed tobe paid to them requires ratification of the shareholders of the Company and in views ofthe same the proposal for the ratification of appointment and remuneration have beenincluded in the Notice of Annual General Meeting for your approval.

(iii) Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Companies Act 2013 and The Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Mr. Pratik Tripathi partner of M/s. P. S. Tripathi& Associates a rm ofCompany Secretaries in Practice to undertake the Secretarial Audit of the Company

(iv) Internal Auditor:

The Company has appointed M/s RGS Verma& Company Chartered Accountants as theinternal auditor of the Company w.e.f. 14.12.2016as per section 138 of the Companies Act2013 and rules made there under to take charge of the Internal Audit function but due totheir preoccupation they have resigned during the year. The Company has not appointedInternal Auditor during the year.

15.2 AUDITOR’S REPORT/ SECRETARIAL AUDIT REPORT:

The Statutory Auditors of the Company M/s Vinay Gandhi& Associates CharteredAccountants have submitted the Auditor’s Report which has observation on StandaloneFinancial Statements for the period ended March 31 2018.

MANAGEMENT ‘S EXPLANATION TO THE AUDITOR’S QUALIFICATION S/ OBSERVATIONS:-

1) Auditors’ Qualification in the Standalone Auditor’s Report

(i) The company is not regular in depositing undisputed & disputed statutory duesincluding Provident Fund Employees State Insurance Income Tax Sales Tax Wealth TaxService Tax Duty of Customs Duty of Excise Value Added Tax Cess and any otherstatutory dues with the appropriate authorities and we have been noticed that there arefollowing arrears of outstanding statutory dues as at the last day of the financial yearunder Audit for a period of more than six months from the date they became payable as on31.03.2018.

S.NO. STATUTORY LIABILITIES AMOUNT
1 INTEREST ON TAX 694077
2 PF PAYABLE 245512
3 PROFESSIONAL TAX EMPLOYEE 145400
4 DIVERSION TAX 383370
5 SERVICE TAX PAYABLE 37195
6 TDS 1960847
7 WORK CONTRACT TAX 600

Explanation:

Company is facing acute financial dif culties to meet its obligation at all frontsincluding statutory dues. Board is trying hard to pay the aforesaid liabilities as earlyas possible.

2) Auditors’ Qualification in the Standalone Auditor’s Report

According to the information and explanations given to us the Company has defaulted inrepayment of term loan installment as well as interest on various credit facilitiesobtained by the company from banks and other financial institution. Banks& loanaccounts of the company have been classified as NPA by Banks. The Company doesn’thave any borrowing by way of debentures from government.

Explanation:

Company is facing acute financial dif culties and due shortage of working capital andnon-receipt of permission from bank regarding holding of operation in account Company isnot able to run the plants of the Company. Directors are regularly in touch with theBanker to nd out the solution and start the production again.

3) Auditors’ Qualification in the Standalone Auditor’s Report

Entire Net worth of the company has been eroded and the company suffers heavy losses.The accumulated losses is Rs.1681880075/- as compared to Equity capital of company Rs.278341740/-.

Explanation:

Net worth is eroded Company due to losses of the Company.

Further no fraud has been reported by the auditors under sub section(12) of section 143of the Companies act 2013.

As required under section 204 (1) of the Companies Act 2013 the Company has obtained asecretarial audit report which is annexed as ANNEXURE VII with this report and shall formpart of the Board’s report. Further certain observations made in the report whichare mentioned below alongwith explanations thereto:

Secretarial Auditors’ Qualification in Secretarial Audit Report

Point No. 2(a):-

Company has not led Financial Statement and Annual Return of the company for F.Y.2015-16 and 2016-17.

Explanation:-

We are trying to ratify this non compliance as soon as possible.

Point No. 2(b):-

Filing of E-Forms w.r.t. allotment and change in Authorized Share Capital in F.Y.2015-16 F.Y.2016-17 and Payment of stamp duty yet to be done

Explanation:-

The Company is under process to le the related forms and related payments and it willbe done at the earliest.

Point No. 2(c):-

B.S.E. and N.S. E. Listing fee is pending for the financial year 2017-18& 2018-19.

Explanation:-

We have done part payment of listing fee for the financial year 2017-18 and we will payrest part payment of listing fee and payment of financial year 2018-19 as soon aspossible.

Point No. 2(d):-

During the year company has not appointed Chief Executive officer/Managing Director inthe Board of the Company.

Explanation:-

Management shall strive for appointment of Chief Executive officer/ Managing Directoras soon as possible.

Point No. 2(e):-

Company has delay in lling of quarterly compliances to B.S.E. and N.S.E. of quarterended March 2018and the penalty has been charged by the exchanges which is yet to bepaid:-

Penalty imposed by N.S.E.:-

Clause No. Quarter Due date Submission date No. of days non compliance Fine Amount
Clause 31 31.03.2018 23.04.2018 03.05.2018 10 Rs. 10000/-

Explanation:-

Company has yet to paid penalty fordelay in lling of quarterly compliances toN.S.E. dueto financial crisis and we will take care in future.

Point No. 2(f):-

There are some instances where newspaper publication regarding Notice of Board Meeting/submission of unaudited financial result has been delayed.

Explanation:-

We will take care in future.

Point No. 2(g):-

The Company has not led Form CRA -4 regarding cost audit report for the financial year2017-18 to the ROC.

Explanation:-

We are trying to ratify this noncompliance as soon as possible.

Point No. 2(h):-

The Company has not led Form MGT -14 regarding approval of Annual financial statementfor the financial year 2017-18 to the ROC.

Explanation:-

We are trying to ratify this noncompliance as soon as possible.

Point No. 2(i):-

The Company has notcomplied section 139 of the Companies Act 2018 regardingappointment of Statutory Auditor in case of casual vacancy of in the office of the auditorand failed to convened general meeting within three months of the recommendation of theBoard.

Explanation:-

The same has been ratified in this annual general meeting and included in theresolutions above for the members approval. We will take care in future.

Point No. 2(j):-

The Company has delayed in reporting to exchange regarding Notice received u/s 13 (2)of Securitization and Reconstruction of Financial Assets and Enforcement of SecurityInterest Act 2002 dated 02.07.2018 has been received from State Bank of India due tofailed to repay the dues/outstanding liabilities.

Explanation:-

We will take care in future

Point No. 2(k):-

The Company has not appointed Internal Auditor as per section 138 of the Companies Act2013 during the year 2017-18.

Explanation:-

Management shall strive for appointment of Internal Auditor as soon as possible.

Point No. 2(l):-

The whole time Company Secretary of the Company has been resigned w.e.f. 12.03.2018 nonew appointment has been made by the Company till date.

Explanation:-

Management shall strive for appointment of Company Secretary as soon as possible.

Point No. 2(m):-

Members of the Audit Committee are not adequately qualified as per Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015.

Explanation:-

In the opinion of the Board Audit Committee members have adequate knowledge.

Point No. 2(n):-

The Company has failed to spend two percent of the average netp ro t oft he lastt hreefinancial years or any part thereof which required to be spent under CSR activities aspersection 135 of CompaniesAct 2013 for the financial year 2015-16.

Explanation:-

Due to the continuous requirements of funds for the business operations of the Companyand due to increased interest burden the Company couldn’t spend the amount which wasrequired to be spent.

Point No. 5 (a):-

F.Y. 2015-16 audit period the company has issued and allotted Preference Shares onpreferential basis due to stipulation of Banker by conversion of unsecured loan but llingof related forms with ROC is yet to be done.

Explanation:-

We are trying to ratify this noncompliance as soon as possible.

Point No. 5 (d):-

Company has defaulted in payment of statutory dues relating to direct and indirecttaxes.

Explanation:-

Company is facing acute financial dif culties to meet its obligation at all frontsincluding statutory dues.

Board is trying hard to pay the aforesaid liabilities as early as possible.

Point No. 5 (e):-

Show Cause Notice has been issue for violation under section 137 read with section 129and 92 of the Companies Act 2013 for the financial year 2015-16 and 2016-17.

Explanation:-

Due to continues financial crisis Company has not led annual return and financialstatement to the ROC as per section 129 and 92 of the Companies Act 2013 for thefinancial year 2015-16 and 2016-17. We are trying to ratify this noncompliance as soon aspossible

Point No. 5 (f):-

Prosecution has been initiated against the company and its director for non ling ofCost Audit Report within the time prescribed under sub-section (6) of section 148 of theCompanies Act 2013 for the financial year 2014-15.

Explanation:-

The form has been led dated 31.08.2016 with additional fee and explanation has alsosent to ROC. Further we regret for delay caused in ling Cost Audit Report and the samewill be taken care of.

16. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS U/S 186:

The company has not given any loans or guarantees covered under the provisions ofsection 186 of the Companies Act 2013.

The details of the investments held by company are given in the notes to the financialstatements.

17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIESU/S 188:

The related party transactions are entered into based on considerations of variousbusiness exigencies such as synergy in operations sectoral specialization and theCompany’s long-term strategy for sectoral investments optimization of market shareprofitability liquidity and capital resources of its group companies.

All transactions entered by the Company during the financial year with related partieswere in the ordinary course of business and on an arm’s length basis. HoweverCompany has not entered into any contract or arrangement during the year. During the yearthe Company has entered into transactions with related parties which were material inaccordance with Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 and with the policy of the Company on Related Party Transactions.Attention of members is drawn to the disclosure of transactions with related parties havebeen reported in sub notes attached to the accounts which are forming part of this AnnualReport. Further details of transactions entered as per section 188 of the Companies Act2013 are mentioned in ANNEXURE II which forms part of this report. The company hasadopted a Policy on Related Party Transaction which is available on the website of theCompany and can be accessed at http://sitashri.com/docs/policies/related_party.pdf.

18. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSANDOUTGO:

(A) Conservation of energy-

(i) Company ensures that the manufacturing operations are conducted in the mannerwhereby optimum utilization and maximum possible savings of energy is achieved.

(ii) No specific investment has been made in reduction in energy consumption.

(iii) As the impact of measures taken for conservation and optimum utilization ofenergy are not quantitative its impact on cost cannot be stated accurately.

(B) Technology absorption-

(i) Company's products are manufactured mostly by using indigenous technology and nooutside technology is being used for manufacturing activities other than mentioned in(iii) below;

(ii) The company has no specific research & development expenditure during theyear;

(iii) Imported Technology

(C) Foreign exchange earnings and Outgo-

S. No. PARTICULAR 2017-18 (Rs. in Lacs) 2016-17 (Rs. in Lacs)
1 Foreign Exchange Earning (CIF Value of goods Export) 32.94 1309.55
2 Foreign Exchange Out Go 0 906.54

19. BUSINESS RISK MANAGEMENT:

The Board of Directors of the Company state that risk associated in the ordinary courseof business is duly taken care by the board while taking business decisions. However theconstitution of Risk Management Committee is not applicable to the company butcompany hasframed the policy for Risk Management and uploaded the same onwebsite of the companyathttp://sitashri.com/docs/policies/risk_management.pdf.

20. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In terms of section 135 and Schedule VII of the Companies Act 2013 the Board ofDirectors of your Company has constituted a CSR Committee. The Committee comprises ofthree (3) directors out of which1 (one)isIndependent Director. The full particulars of CSRCommittee and CSR Policy developed by the CSR Committee which is approved by the Board isgiven in the Report on Corporate Governance and Annual Report on CSR Activities which isannexed as ANNEXURE V and ANNEXURE IX with this report and shall form part of theBoard’s report. Additionally the CSR Policy has been uploaded on the website of theCompany and can be accessed athttp://sitashri.com/docs/policies/csr_policy.pdf.

Corporate Social Responsibility Committee
Name Designation
Mr. Dinesh Agrawal Chairman
1
Mr. Mannalal Sethi Member
2
Mr. Sunil Kumar Garg Member
3
Mr. Lucky Mevati Member
4
Mrs. Archana Shukla Member

1 Resigned w.e.f. 30.05.2017

2 Resigned from the Board w.e.f 15.02.2018

3 Appointed as Member w.e.f. 20.05.2017

4Appointed as Member w.e.f. 15.02.2018

Further the Annual Report on CSR Activities is annexed herewith as Annexure VIII.

21. FORMAL ANNUAL EVALUATION:

Pursuant to section 134 (3) (p) of Companies act 2013 and rule 8(4) of Companies(Accounts) Rules 2014 and clause 17(10) of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has carried out an evaluation of its ownperformance the directors individually as well as the evaluation of its Committees as perthe criteria laid down in the Nomination Remuneration and Evaluation policy. The saidpolicy including above said criteria for the evaluation of the Board individual directorsincluding independent directors and the committee of the board has been given in theReport on Corporate Governance which is annexed as ANNEXURE IV with this report and shallform part of the Board’s report.

22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

During the year under review no significant and material order was passed by theRegulators or Courts which may affect the going concern status of the company.

23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a proper internal control system which provides adequate safeguardsand effective monitoring of the transactions and ensures that all assets are safeguardedand protected against loss from unauthorized use or disposition.

Moreover the audit committee of the Company comprising of all independent directorsregularly reviews the audit plans adequacy of internal control as well as compliance ofaccounting standards.

Also the CFO has the responsibility for establishing and maintaining internal controlsfor financial reporting and that they also have the overall responsibility to evaluate theeffectiveness of internal control systems of the company pertaining to financial reportingand they have to disclose to the auditors and the Audit Committee de ciencies in thedesign or operation of such internal controls if any of which they are aware and thesteps they have taken or propose to take to rectify the de ciencies.

24. AUDIT COMMITTEE:

The Audit Committee comprises of Three (3) directors all of whom are IndependentDirectors.

Name Designation
Mr. Ganesh Prasad Sharma Member
Mr.Mannalal Sethi Member
Mr. Sunil Kumar Garg Chairman
Mr. Lucky Mevati Chairman
Mr. AnkitMagare Member
Mrs. Archana Shukla Member

1 Resigned from the boardw.e.f. 30.05.2017

2 Appointed w.e.f 14.12.2016 and Resignedw.e.f. 30.05.2017

3 Resigend from the Board the effect from 15.02.2018

4 Appointed as Chairmanw.e.f.15.02.2018

5 Appointed as member w.e.f.15.02.2018

The Board has considered all recommendations of the Audit Committee as and whenprovided during the year under review and hence do not call for any disclosure underSection 177(8) of the Companies Act 2013.

25. DISCLOSURE IN TERMS OF VIGIL MECHANISM:

The Company believes in the conduct of its affairs in a fair and transparent manner byadopting highest standards of professionalism honesty integrity and ethical behavior.The Company is committed to develop a culture in which every employee feels free to raiseconcerns about any poor or unacceptable practice and misconduct. In order to maintain thestandards the company has adopted and lays down this Whistle Blower Policy to provide aframework to promote responsible and secure whistle blowing.

The Board of Directors of your Company has adopted the Vigil Mechanism and WhistleBlower Policy in compliance of Companies Act 2013 and Clause 22 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015. Details of the Policy is givenin the Report on Corporate Governance which is annexed as ANNEXURE IV with this report andshall form part of the Board’s report and the said policy has already been uploadedon the website of the company and it can be accessedathttp://sitashri.com/docs/policies/whistle_blower.pdf.

26. COMMISSION RECEIVED BY DIRECTORS FROM HOLDING AND SUBSIDIARY:

During the year under review neither theManaging Director nor Whole time Director is inreceipt of commission from the company and also has not received any remuneration orcommission from any holding or subsidiary company of company u/s 197(14).

27. MANAGERIAL REMUNERATION:

Disclosures Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

1. The ratio of the remuneration of each director to the median remuneration of theemployees of the company for the financial year;

S. No. Name Designation CTC Median Employee Salary Ratio
1. Dinesh Agrawal Chairman and CFO - - -
2. Ganesh Prasad Sharma Independent Director - - -
3. Sunil Garg Independent Director - - -
4. Lucky Mevati Independent Director - - -
5. Ankit Magare Independent Director - - -
6. Archana Shukla Non-Executive Director - - -

1Resigned w.e.f. 30.05.2017

2Resigned w.e.f. 15.02.2018

3Appointed as director w.e.f. 20.05.2017

2. The percentage increase in remuneration of each director Chief Financial OfficerChief Executive Officer Company Secretary or Manager if any in the financial year;

S. No. Name Designation Remuneration paid in FY 2016-17 Remuneration paid in FY 2017-18 Change Percentage (%)
1. Dinesh Agrawal Chairman and CFO - - - -
2. Ashish Goyal Managing Director 900000 - 900000 100
3. Anoop Goyal Whole-time Director and CFO 900000 - 900000 100
4. Ganesh Prasad Sharma Independent Director - - - -
5. Mannalal Sethi Non-Executive Director - - - -
6. Sunil Garg Independent Director
7. Lucky Mevati Independent Director - - - -
8. Ankit Magare Independent Director - - - -
9. ArchanaShukla Non-Executive Director - - - -
10. Chitrangda
Vishwakarma Company Secretary 96605 - - -
11. Vipenjeet Kaur Banger Company Secretary 76500 145532 - -

1Salary given for 3 months i.e. April May & June 2016 and Mr. AshishGoyalresigned w.e.f. 14.12.2016 & Mr. AnoopGoyal resigned w.e.f. 17.09.2016

2Salary given for 6 months w.e.f. date of appointment i.e. 01.10.2015 andResigned w.e.f 17.05.2016 3Salary given upto16.11.2016 i.e. date of resignation4Salary given w.e.f. date of appointment i.e. 14.12.2016 upto 12.03.2018

The company is having net loss during the current financial year i.e. 2017-18.Theremuneration of the KMP's are duly reviewed on annual basis keeping in mind the tenurethe past performance and current performance.

3. The percentage decrease in the median remuneration of employees in the financialyear was85.46%;

4. The number of permanent employees on the rolls of company as on 31.03.2018was

5. Average Percentile increase already made in the salaries of employees other than themanagerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof;

Remuneration paid to employees excluding managerial personnel for the 2016-17 Remuneration paid to employees excluding managerial personnel for the 2017-18 % Change in remuneration paid to employees excluding managerial personnel Remuneration paid to managerial personnel for the FY 2016-17 Remuneration paid to managerial personnel for the FY 2017-18 % Change in remuneration paid to managerial personnel
7362066 1048869 -85.75% 1973105 145532 -92.62%

Further there are no exceptional circumstances for increase in the managerialremuneration.

6. During the year under review no variable component of remuneration availed byDirectors of the Company;

7. It is hereby afirmed that the remuneration paid by the Company to its DirectorsKMP’s and Employees during the year under review is as per the NominationRemuneration & Evaluation Policy of the company.

28. EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS:

The company has not issued any shares with differential voting rights and accordinglythe provisions ofSection 43 read with Rule 4(4) of the Companies (Share Capital andDebentures) Rules 2014 of the Companies Act 2013 and rules framed there under are notapplicable for the year.

29. DETAILS OF SWEAT EQUITY SHARES:

The company has not issued any sweat equity sharesand accordingly the provisions ofSection 54 read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules2014 of the Companies Act 2013 and rules framed there under are not applicable for theyear.

30. DETAILS OF EMPLOYEES STOCK OPTION SCHEME:

The company has not granted stock options and accordingly the provisions of Section62(1)(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules 2014of the Companies Act 2013 and rules framed there under are not applicable for the year.

31. DISCLOSURE OF VOTING RIGHTS NOT EXCERCISED:

The company has not made any provision of money for the purchase of or subscriptionfor shares in the company or its holding company if the purchase of or the subscriptionfor the shares by trustees is for the shares to be held by or for the Benefit of theemployees of the company and accordingly the provisions of Chapter IV (Share Capital andDebentures) of the Companies Act 2013 and rules framed there under are not applicable forthe year.

32. EMPLOYEES:

Employee’s relation continued to be cordial throughout the year. Your Directorswish to place on record their sincere appreciation for the excellent spirit with which theentire team of the Company worked at factory and office premises and achieved commendableprogress.

During the year under review none of the employee has received remuneration of Rs.Eight Lakh and Fifty Thousand per month or Rs. One Crore TwoLacs per year or at a ratewhich in the aggregate is in excess of that drawn by the managing director or whole-timedirector or manager and holds by himself or along with his spouse and dependent childrennot less than two percent of the equity shares of the company pursuant to Section 197 (12)of the Companies Act 2013 read with Rule 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 and hence do not call for any furtherdetails referred to in Rule 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014.

33. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Report on Corporate Governance and Management Discussion and Analysis Report in termsof Clause 34read with Schedule V of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are annexed as ANNEXUREIVandANNEXURE III respectively withthis report and shall form part of the Board’s report.

A certificate from the Auditors confirming compliance with the conditions of CorporateGovernance is also annexed as

ANNEXURE VI.

34. PAYMENT OF LISTING FEES:

Annual listing fee for the year 2017-18 and 2018-19 has been pendingby the Company toBSE and NSE.

35. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013:

The Board of Directors of the Company has approved and adopted the "Policy onPrevention of Sexual Harassment at Workplace" to provide equal employment opportunityand is committed to provide a work environment that ensures every woman employee istreated with dignity and respect and afforded equitable treatment. The Company has formedan Internal Complaints Committee where employees can register their complaints againstsexual harassment. This is supported by the Sexual Harassment Policy which ensures a freeand fair enquiry process with clear timelines.

36. PAYMENT OF DEPOSITORY FEES:

Annual Custody/Issuer fee for the year 2018-19 has not been paid by the Company to NSDLand CDSL.

37. DEMAT STATUS:

The company’s shares are presently held in both electronic and physical modes.

38. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

Subsidiary Company:

The Company neither has any Subsidiary Company as on date of this report as de ned u/s2(87) of the Companies Act 2013 nor any company became or ceased to be its SubsidiaryCompany during the year under review.

Associate Company:

The Company neither has any Associate Company as on date of this reportas de ned u/s2(6) of the Companies Act 2013nor any company became or ceased to be its SubsidiaryCompany during the year under review.

Joint Ventures:

The Company neither has any Joint Ventures as on date of this report nor any companybecame or ceased to be in Joint Venture during the year under review.

39. TRANSFER TO INVESTORS EDUCATION & PROTECTION FUND:

As per the provisions of section 125 of the Companies Act 2013 and as per rule 3 ofthe Investor Education & Protection fund (awareness and protection of investors)Rules 2001the Company has transferred the amount of Rs. 6000.00/- lying in the RefundAccount for the year 2008-09 after expiry of Seven (7) years from the date of transfer tothe said A/c.

40. CODE OF FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION AND CODE OFCONDUCT UNDER SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS 2015

Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibition ofInsider Trading) Regulations 2015 the Board of Directors has formulated and adopted the"Code of Practices and Procedures for Fair Disclosure of Unpublished Price SensitiveInformation" (Code of Fair Disclosure) of the Company.

The Board has also formulated and adopted "Code of Conduct for Prohibition ofInsider trading" (Code of Conduct) of the Company as prescribed under Regulation 9 ofthe said Regulations.

41. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation for and gratitude to theUnion Bank of IndiaState Bank of India Canara Bank Andhra Bank Axis Bank for theirvaluable support and co-operation.

Your directors also wish to place on record their appreciation of the wholehearted andcontinued support extended by the shareholders investors employees and workers of thecompany which had always been a source of strength for the Company.

For and on behalf of the Board of Directors of
Sita Shree Food Products Limited

 

Sd/- Sd/-
Dinesh Agrawal Lucky Mevati
Indore Chairman Cum Director Director
Date: 28.08.2018 DIN: 00348853 DIN:07793340

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