You are here » Home » Companies » Company Overview » Sukhjit Starch & Chemicals Ltd

Sukhjit Starch & Chemicals Ltd.

BSE: 524542 Sector: Others
NSE: N.A. ISIN Code: INE450E01011
BSE 16:01 | 20 Mar 515.80 -0.90






NSE 05:30 | 01 Jan Sukhjit Starch & Chemicals Ltd
OPEN 517.00
VOLUME 12400
52-Week high 570.00
52-Week low 389.50
P/E 11.23
Mkt Cap.(Rs cr) 381
Buy Price 515.80
Buy Qty 34.00
Sell Price 525.00
Sell Qty 337.00
OPEN 517.00
CLOSE 516.70
VOLUME 12400
52-Week high 570.00
52-Week low 389.50
P/E 11.23
Mkt Cap.(Rs cr) 381
Buy Price 515.80
Buy Qty 34.00
Sell Price 525.00
Sell Qty 337.00

Sukhjit Starch & Chemicals Ltd. (SUKHJITSTARCH) - Director Report

Company director report

Dear Share Holders :

Your Directors are pleased to present before you the 74th Annual Report and the AuditedStatement of Accounts for the year ended 31st March 2018 :-

1. FINANCIAL RESULTS 2017-18 2016-17
( in Crores) ( in Crores)
Sales & Other income 713.25 685.40
Earning before Interest tax and Depreciation 68.43 52.72
-- Less Interest 17.54 12.80
-- Depreciation 14.72 11.79
Profit before tax 36.18 28.14
-- Provision for taxes (including Deferred Tax) 13.15 9.15
Profit After Tax 23.02 18.98
Surplus brought forward from previous year 17.55 8.56
Surplus available for appropriation 21.13 17.55
Dividend (including Corporate Tax) 5.77 4.44
Transfer to General Reserves 15.00 10.00
Surplus carried forward 21.13 17.55

Indian Accounting Standards 2015:

The financial statements of the Company as well as the Consolidated financialstatements upto the year ended 31st March 2017 had been prepared & presentedaccording to Accounting Standards notified under The Companies (Accounting Standards)Rules 2006 as amended. The annexed financial statements comply with the Indian AccountingStandards (Ind AS) notified under the section 133 of the Companies Act 2013/ Companies(Indian Accounting Standards) Rules 2015 and other relevant provisions of the Act asamended. These financial statements are the first statements of the Company under the IndAS and provide the necessary details concerning the transition from previous GAAP to IndAS.


The Sales and other income of the Company have increased from 685 crores to 713 crores.However sales of F.Y. 2016-17 included Excise Duty of 31.41 crores against 7.61 Croes inthe sales of current year as the sales after 1st July have been taken net of GST. Thus forthe purpose of comparison sales (net of excise duty/ GST) & other income haveincreased to 705.64 crores from 654 crores previous year. The Earnings before interesttax and Depreciation stood at 68.43 Crores ( 52.72 crores) showing an increase of about30% during the year under reference which after interest of 17.54 crores ( 12.80 crores)and Depreciation of 14.72 crores ( 11.79 crores) resulted in the Net Profit before tax at36.18 crores ( 28.14 crores) with an increase of over 28%.


With the prediction of normal monsoons during the running year it is expected that theproduction of agriculture produce will improve the availability of basic raw material atan optimum cost with positive impact on the profitability of the Company. Good productionof the agricultural produce will also ensure continuous supply of raw material at allplant locations of the Company. The Company is expected to show reasonable growth in itsoperations in the running year due to optimum utilization of its increased capacities atH.P and W.B Units.


The Company is setting up a new unit as an Anchor unit in the Mega Food Park in thename and style of M/s Sukhjit Corn Products at Rehana Jattan Teh. Phagwara Punjab withmaize grind capacity of 600 TPD. The unit will entail a Capex of around 150 crores and isexpected to be commissioned and commence operations in the 3rd quarter of the F.Y.2019-20.


As per SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015Management's discussion and analysis report is annexed herewith marked as 'Annexure A' andforms a part of this report.


Your company is fully committed to the philosophy of transparency and believes inconducting its business with due compliance of all the applicable laws rules andregulations.In compliance with the requirements of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 the Company has duly implemented the system ofCorporate Governance. The report on Corporate Governance is annexed herewith marked as'Annexure B' to this report.


The Directors are pleased to recommend a dividend of 65% (i.e. 6.50/- per Equity shareof 10/- each) during the financial year ended 31st March 2018 against dividend @ 50%(i.e. 5/- per Equity share of 10/- each) paid in 2016-17.


The Company has transferred 15 crores (PY 10 crores) to the general reserve.


Pursuant to Section 134 (3c) of the Companies Act 2013 the Directors state that:

(a) in the preparation of the Annual Accounts for the financial year ended 31st March2018 the applicable Indian Accounting Standards have been followed and there are nomaterial departures; (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 at the end of thefinancial year and of the profit of the company for the year so ended; (c) they have takenproper and sufficient care for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; (d) they haveprepared the Annual Accounts for the financial Year ended 31st March 2018 on a 'goingconcern' basis;

(e) they have laid down internal financial controls to be followed by the company andthat such internal financial controls are adequate and are operating effectively; and (f)they have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.


All the deposits have been accepted/ renewed / repaid as per the provisions of the Act.The company had no unclaimed / unpaid deposits on 31/03/2018.


(a) The Vijoy Steel & General Mills Company Ltd. Phagwara: The Company hasincurred operational loss for the year under reference due to lower productivity. Itexpects to improve upon its performance during the running year.

(b) Scott Industries Ltd. Phagwara: The Company has shut down its operations. Most ofits assets have been already disposed off and efforts are on to realize the dues from itsold customers.

(c) Sukhjit Mega Food Park & Infra Ltd. Phagwara: The Unit is going on at site asper the schedule and the Company has already spent over 25 crores on the Project. A sum of15 crores has been received as the 1st Installment of subsidy from Ministry of FoodProcessing Industries (MoPFI) Government of India and expect to get another 15 crores(2nd Installment) within this Year. The total Project costs is around 125 crores and theProject is expected to be commissioned in the 3rd quarter of the F.Y. 2019-20.

There has been no material change in the nature of business of the Subsidiaries.

As required under the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 Consolidated Financial Statements of the Company and its subsidiariesare attached which have been prepared in accordance with the relevant Indian AccountingStandard(s) as prescribed under the Companies Act 2013.

In pursuance to the general circular issued by the Ministry of Corporate Affairs theBalance Sheet Profit & Loss Account and other documents of the subsidiary companiesare not being attached with the Balance Sheet of the Company. A statement containing therequisite financial details of the company's subsidiaries for the financial year ended31st March 2018 is annexed to the consolidated results in the Annual Report. The annualaccounts of these subsidiaries and the related detailed information will be made availableto any shareholder of the Company who may be interested in seeking such information andare also available for inspection by any shareholder of the Company at the registeredoffice of the Company. The Company shall furnish a copy of details of annual accounts ofsubsidiaries to any shareholder on demand.


Disputed Liabilities not provided as expense in the accounts comprise of 32.34Crores.The amount mainly includes 28.93 Crores as disputed Central Excise Duty (excludingpenalty and interest) demand raised by the Central Excise Department since 01/04/1997alleging the sale of Maize Starch as that of Modified Starch. Since the matter issubjudice the Department has continuously been issuing the show cause notices against thedifferential duty. However pertinent to mention that the product has been repeatedly gottested by the Department from its Central Revenue Laboratory where it has been clearlyheld to be Maize Starch. So the demand is totally baseless and without any substance. Thecompany has been manufacturing Maize Starch by following the standard Wet Milling Processfor the last many decades and the product is sold and accepted by the market as MaizeStarch so the company does not foresee any liability to crystallize on this account.Other items related to a demand of 1.18 crores raised on sale made through the consignmentagents of the Company which is pending before the Assistant Commissioner and 2.22 Croreswrongly levied for R&C measures by A.P. Northern Power Distribution Company Ltd.Nizamabad against exemption enjoyed by the unit the matter is pending before the Hon'bleHigh Court of Andhra Pradesh and balance on account of other Misc. service tax demands dueto difference of opinion.


In terms of the provisions of section 197 (12) of The Companies Act 2013 read withRules 5(2) and 5(3) of the Companies (Appointment and remuneration of ManagerialPersonnel) Rules 2014 the names and other particulars of Directors/ KMP are set out inthe 'Annexure C' to the Directors' Report.

However in view of the provisions of Section 197(12) of the Act read with Rules 5(2)and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules2014 the details of the employees who are in receipt of remuneration over 60.00 Lacs p.a.if employed throughout the year or 5.00 Lacs p.m. if employed for a part of the yearduring 2017-18 are given below :

(A) Persons employed through out the year and were in receipt of remunerationaggregating not less than 60.00 Lacs for the year:

Sr. No. Name Age Designation Gross Remuneration ( Lacs)
1 Shri I.K. Sardana 72 Managing Director 124.38
2 Shri K.K. Sardana 70 Jt. Managing Director 113.34
Qualification Experience Date of Joining Last Employment/ Designation Held
B.A. 52 02.08.1967 The Sukhjit Starch & Chemicals Ltd. Phagwara Sales Manager
B.A. 47 18.01.1972 The Sukhjit Starch & Chemicals Ltd. Phagwara G.M. (Commercial)

(B) Persons employed for a part of the year and were in receipt of remuneration at arate not less than 500000/- per month


Note : The Remuneration shown above includes salaries allowances commissioncontribution to provident fund and perquisites valued in accordance with the income taxrules.


(a) In accordance with the provisions of the Act Smt. Ravi Chowdhry retires byrotation and being eligible the Board recommends her reappointment.

(b) The Company has received declarations from all the Independent Directors of thecompany confirming that they meet the criteria of independence and comply with all therequirements in pursuance to subsection (6) of Section 149 of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 so as to qualifythemselves to be appointed as independent directors under the provisions of the Act andrules thereunder.

(c) Based on evaluation criteria laid down under the Nomination and Remuneration Policyof the Company framed in accordance with the provisions of section 178 of the CompaniesAct 2013 the Nomination & Remuneration Committee rates the performance of the boardand its committees which inter-alia includes evaluation of leadership abilitiescontribution to corporate objectives & plans regular monitoring effective decisionmaking ability attendance and contribution at Board and Committee meetings etc. Thecommittee has in place a suitable policy for the appointment & remuneration of theDirectors/ KMPs.


Internal financial control systems of your company ensure the reliability of financialreporting timely feedback on the achievement of operational or strategic goals andcompliance with all the applicable laws & regulations. The 'Internal & External'Auditors of the Company also measure the effectiveness of internal controls throughperiodical checks and ensure that company has an effective internal control system dulycommensurate with its size and nature of business. The management reviews the systemsperiodically to systematically improve business processes in regard to their effectivenessand efficiency.


Pursuant to Section 177 of the Companies Act 2013 & rules made there under andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company hasestablished a vigil mechanism which also incorporates a Whistle Blower Policy forDirectors and employees of the Company to report genuine concerns of unethical behavior orviolation of code of conduct by way of direct access to the Chairman of the AuditCommittee. There are adequate safeguards against victimization of employees/ directors whoexpress their concerns. Whistle Blower Policy of the Company stands placed on theCompany's website at the link: http://


The Board has constituted Audit Committee of the Company with Sh.V.P.Kapahi as Chairmanand Shri S. K. Anand Shri K.K. Sardana and Shri S.C. Jindal as its members. All therecommendations made by the Audit Committee were accepted by the Board.


The Board has constituted an Internal Committee for redressal of grievance / complaint(if any) under ''Sexual Harassment of Woman at workplace (Prevention Prohibition andRedressal) Act 2013.'' The committee has not received any complaint during the year underreference.


The report on Corporate Social Responsibility activities conducted during the financialyear 2017-18 is annexed herewith marked as 'Annexure D' to this report.


The Company has not entered into any material transaction with its PromotersDirectorsKey Managerial Personnel or their Relatives which could have potential conflictwith the interest of the Company. The salaries/ remuneration of the directors and KMPshave been fixed after due consideration by the Nomination and Remuneration Committee /Board / Shareholders as per applicable provisions of the Act. However the transactionswith subsidiary Companies are incurred after due appraisal and approval at Director'slevel / Audit Committee which are in the ordinary course of business and are at arm'slength price in terms of IND AS-24 and given as per Point No. 6 of the Notes to Accountsforming part of the Annual Report. Policy on related party transactions of the companystands placed on the Company's website at the link:


The Board of Directors held seven meetings during the year under reference and detailsthereof appear in report on Corporate Governance of the Annual report.


Particulars of loans given and Investments made are provided in the standalonefinancial statements. The Company has given/provided some Guarantees / Securities to theGovt. / other Departments in the ordinary course of business. A corporate guarantee for 40crores to Yes Bank Ltd. for the Term Loan for setting up the Mega Food Park by its whollyowned subsidiary M/s Sukhjit Mega Food Park & Infra Ltd. and there is no third partyGuarantee / security given / provided by the Company.


Extract of the Annual Return of the Company is annexed herewith as 'Annexure E' to thisreport.


The necessary detail is annexed herewith as 'Annexure F' to this report.


Statutory Auditors :

M/s VSAP & Associates Chartered Accountants the retiring Auditors of the Companyhave confirmed their eligibility to be re-appointed as Statutory Auditors of the Companyat the ensuing Annual General Meeting. The Board of Directors recommend the re-appointmentof M/s VSAP & Associates Chartered Accountants as auditors of the Company to holdoffice from the conclusion of this Annual General Meeting till the conclusion of the nextAnnual General Meeting.

The Auditors' report does not have any qualification reservation adverse remark ordisclaimer made by the statutory auditors.

Cost Auditors :

The Board of Directors recommends subject to the approval of the Central Governmentthe re-appointment of M/s Khushwinder Kumar & Associates Cost Accountants as CostAuditors of the Company for the financial year 2018-19. The Cost Audit Report for thefinancial year ended 31st March 2018 is due to be filed with the Ministry of Corporateaffairs on or before the September 2018 and the cost audit report for the financial yearended 31/03/2017 was duly filled on 29/09/2017.

Secretarial Auditors :

The Board has appointed M/s Dinesh Gupta & Co. Practicing Company Secretary toconduct Secretarial Audit for the financial year 2017-18. The Secretarial Audit report forthe financial year ended March 31 2018 is annexed herewith marked as 'Annexure G' to thisreport.The Board of Directors have re-appointed M/s Dinesh Gupta & Co. PracticingCompany Secretaries as Secretarial Auditors for the financial year 2018-19.

The Secretarial Audit report does not contain any qualification reservation or adverseremark.


Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the bankers govt. authorities customers members and otherbusiness associates. They place on record their deep sense of appreciation for thecommitted services of the executives staff and workers of the Company for its success.

Yours truly
For and on behalf of the Board
Dated : 30th May 2018