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Sukhjit Starch & Chemicals Ltd.

BSE: 524542 Sector: Others
NSE: N.A. ISIN Code: INE450E01011
BSE 00:00 | 19 May 434.80 -22.35






NSE 05:30 | 01 Jan Sukhjit Starch & Chemicals Ltd
OPEN 440.05
52-Week high 617.00
52-Week low 218.05
P/E 10.44
Mkt Cap.(Rs cr) 679
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 440.05
CLOSE 457.15
52-Week high 617.00
52-Week low 218.05
P/E 10.44
Mkt Cap.(Rs cr) 679
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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

Company director report

Dear Share Holders :

Your Directors are pleased to present before you the 77th Annual Report and the AuditedStatement of Accounts for the year ended 31st March 2021

1. FINANCIAL RESULTS 2020-21 2019-20
(Rs in Crores) (Rs in Crores)
Sales & Other income 702.78 805.24
Earning before Interest tax and Depreciation 68.56 64.55
- Less Interest 20.58 18.16
- Depreciation 17.72 13.35
Profit before tax 30.26 33.04
- Provision for taxes 6.25 8.93
- Deferred Tax/(Deferred Tax written back) 1.40 (9.40)
Profit After Tax 22.61 33.51
Surplus brought forward from previous year 34.12 25.61
Transfer to General Reserves 25.00 25.00
Dividend for the F.Y. 2019-20 2.95 -
Surplus carried forward 28.78 34.12


The National lockdown in March 2020 and imposition of Curfew in some states due tooutbreak of Covid-19 Pandemic which being a necessary step to contain the spread posedserious challenges to the Trade & Industry putting supply chains out of order acrossthe Country. It caused serious disruption to the operations of the Company in some stateswhere intensity of the pandemic was severe and resulted in temporary shutdown of the unitsin those states. However Company ensured that there was no lay off or retrenchment of itsworkmen and all out efforts were made to secure and protect the workmen & theirfamilies from the pandemic. Overall operations of the Company were badly bruised duringthe 1st two quarters of the year. However things improved in the 3rd quarter with normalworking getting restored in the 4th quarter at all our units located in different states.The Sales & Other Income of the Company which was merely Rs 287.26 Cr. in the 1 sthalf of the year got improved to Rs 415.52 Cr. in the 2nd half with annual turnover at Rs702.78 Cr. against Rs 805.24 Cr. during the previous year.

The Earnings Before Interest Tax and depreciation is Rs 68.56 Cr. (Rs 64.53 Cr.) whichafter interest of Rs 20.58 Cr. (Rs 18.16 Cr.) and depreciation of Rs 17.72 Cr. (Rs 13.35Cr.) resulted in a net profit before tax of Rs 30.26 Cr. (Rs 33.04 Cr.). The higher chargeof Interest & Depreciation is owing to the capitalisation and operationalization ofthe newly setup maize processing facility of the Company in the state of Punjab. The netprofit after tax has come down from Rs 33.51 Cr. to Rs 22.61 Cr. this year. This is due tothe write back of the deferred tax liability of Rs 9.02 Cr. during FY 2019-20 on itsre-measurement pursuant to the Taxation (Amendment) Ordinance 2019 issued by Ministry ofLaw and Justice on 20th September 2019 effective from 1st April 2019. However theoverall EBITA % has improved significantly during the year i.e. by about 1.75%.


Re-emergence of the 2nd wave of Covid in April 21 has led to some restricted lockdownin some States where our units are located impacting our operations in the month of May21. Going forward we feel that the second wave is likely to subside by June 21 & thethird wave may not hit our country with that severity due to vaccination and otherpreventive measures being undertaken by the Government. With the prediction of normalmonsoons during the running year it is expected that high production of agricultureproduce will improve the availability of basic raw material at an optimum cost. This willalso ensure continuous supply of raw material at an optimum cost at all plant locations ofthe Company. The Company is trying to optimize the capacity utilization at the existingunits. The turnover of the Company is likely to grow by over 30% owing to the full yearoperations of the Company's new unit at Rehana Jattan Phagwara which was commissioned andoperationalized in Nov 20.


The Directors are pleased to recommend a dividend of 30% (i.e. Rs 3/- per Equity Shareof Rs10/- each) during the financial year ended 31st March 2021 against dividend 20%(i.e. Rs. 2/- per equity share of Rs 10/- each) paid in 2019-20. The outflow on account ofthe dividend will be Rs 4.43 Cr (P.Y. Rs 2.95 Cr.). The payment of final dividend issubject to the approval of the shareholders at the ensuing Annual General Meeting (AGM) ofthe Company.


The Credit Analysis & Research Limited (CARE) owing to the adverse impact ofCOVID-19 on the operations of the Company (although temporary) has reviewed and accordedthe rating CARE A for the long term borrowings of the Company and CARE A1 for the shortterm borrowing of the Company.

The Current Assets of the Company stood at Rs 221.31 crores as compared to Rs 254.25crores on 31.03.2020 including Inventories at Rs 100.85 crores on 31.03.2021 against Rs152.10 crores in the previous year. The Non Current Assets have increased to Rs 484.96Crores (Net) on 31.03.2021 against Rs 454.66 crores on 31.03.2020 due to the additionalcap-ex for the new maize processing facility in the state of Punjab. There is no majorcap-ex planned for the running year. So the Internal Accruals of the Company are set tostrengthen the working capital position of the Company during FY22.

The Management believes that the Company has enough liquid resources at hand to meetany additional working capital requirements.


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 as amended to date the report on theCorporate Governance is annexed to this report marked as 'Annexure B'.


There is no change in the Equity Share Capital during the F.Y. 2020-21.


The Company has transferred Rs 25 crores (PY Rs 25 crores) to the general reserves.


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 March2021 the applicable Indian Accounting Standards have been followed and there are nomaterial departures;

(b) appropriate accounting policies have been selected and applied consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of the financial year and of theprofit of the company for the year so ended;

(c) proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(d) the Annual Accounts for the year ended 31.03.2021 have been prepared on a 'goingconcern' basis;

(e) the internal financial controls have been laid down to be followed by the companyand that such internal financial controls are adequate and are operating effectively; and

(f) proper systems have been devised to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.


The Vijoy Steel & General Mills Company Ltd. Phagwara : The Company held 96.17% ofshares in the capital of The Vijoy Steel & the General Mills Co. Ltd. It continues toprovide engineering support to the manufacturing operations of the Company.However itsoperations have also been badly hit due to Covid during the year under reference.

Scott Industries Ltd. Phagwara : The Company held 99.97% of shares in the capital ofthe Scott Industries Ltd. The Company has shut down its operations. Most of its assetshave been already disposed off and efforts are on to realize the dues from its oldcustomers.

Sukhjit Mega Food Park & Infra Ltd. Phagwara : The Company held 100% of shares inthe capital of its material subsidiary Sukhjit Mega Food Park & Infra Ltd. The Companyhas operationalised its project of the Mega Food Park in the state of Punjab during theyear under reference. The Company has created a State of Art Technology Infrastructure forsetting up food processing units in the Mega Food Park. However most of the potentialinvestors deferred their fresh investments due to adverse effect of Pandemic on theirexisting business. The Company is expected to show up good performance during the runningyear after good part of its assets get leased out and operationalized.

There has been no material change in the nature of business of the Subsidiaries. Asrequired under the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 as amended to date the Consolidated Financial Statements of the Company and itssubsidiaries are attached which have been prepared in accordance with the relevant IndianAccounting Standard(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 annexed with the Balance Sheet of the Company. A statement containing therequisite financial details of the company's subsidiaries for the financial year ended31st March 2021 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 during business hours. The Company shall place the annual accountsof subsidiaries on its website and shall provide the requisite information to anyshareholder on demand.


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 there was no employee who is in receipt of remuneration over Rs1.02 crores p.a. ifemployed throughout the year or Rs 8.5 lacs p.m. if employed for a part of the year during2020-21.


(a) Ms. Ruby Agrawal one of the Independent Directors of the company has expressed herinability to continue as a Director of the Company due to her personal reasons and hasresigned from the Directorship of the Company on 21.05.2021. The Board accepted the saidresignation in their meeting held on May 312021 .The Board placed on record her richcontribution as a board member or as a member of the committees during her associationwith the Company as an Independent Director.

(b) Smt. Manjoo Sardana a Non-Executive Director of the Company is retiring byrotation and being eligible offers herself for reappointment. Board recommends herreappointment as the Non-Executive Director of the Company.

(c) The Board considered the re-appointment of Sh. M.G. Sharma (DIN: 00398326) asExecutive Director (Fin) & CFO of the Company with effect from 1st August 2021 to31st May 2023.

Sh. M.G. Sharma has been associated with the Company from the last about four decadesand heading finance and commercial functions of the company with due compliance ofstatutory Acts of the company from time to time. Fie is also actively involved in keyareas like policy formulation product planning & development finance procurement ofraw materials marketing of finished products and other commercial & administrativeactivities of the company.

The Board therefore in the overall interest of the company recommends hisre-appointment as Executive Director (Fin) & CFO with effect from 1st August 2021 to31st May 2023.

(d) The Board co-opted Sh. Saravjit Singh Hothi (DIN:09182046) the former Air ViceMarshal at Indian Air Force as an Independent Additional Director of the Company till theconclusion of the ensuing Annual General Meeting.

Sh. Saravjit Singh Hothi had an excellent career during his coveted service spanningabout 30 years with Indian Air Force. Fie has to his credit excellent administrative& Managerial skills in commanding/ managing men & materials. Fie has beendecorated twice by The President of India with prestigious medals like Vayu Sena Medal andVashishth Sewa Medal.

Presently he is proprietor of MSP Jalandhar and associated with "The KnowledgeAcademy" (a UK based organisation) which provides training to the CorporateProfessionals. Sh. Saravjit Singh Hothi has also done a course on 'Independent DirectorsStudies for Senior Officers of Armed Forces'.

Board recommends his appointment as an Independent Director of the Company and feelthat his induction would further enrich the functioning of the Board of Directors.

(e) 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 sub section (6) of Section 149 of the Companies Act 2013 andSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 so as to qualifythemselves to be appointed /continue as Independent Directors under the provisions of theAct and rules thereunder.

(f) 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 theindividual directors and also the Board as a whole which inter-alia include:

- evaluation of leadership abilities

- contribution to corporate objectives & plans

- regular monitoring of performance

- effective decision making ability

- attendance/ contribution at Board and Committee meetings etc.

The Company has in place a suitable Policy for the Appointment & Remuneration ofthe Directors/ KMPs. The Company has devised the Board's Performance Evaluation criteriafor evaluation of Board's/ Committee's/ Director's performance. The performance of theCommittees was evaluated by the Board on the basis of the criteria such as the compositionof committees and effectiveness of committee meetings etc.

The Independent Directors in their Separate Meeting and in the Meeting of theNomination & Remuneration Committee of the Company both held on 29th January 2021reviewed the performance of Non- Independent Directors the Board as a whole and also theChairperson of the Company. The same was placed on record and discussed in the BoardMeeting following the meeting of the Independent Directors. The Board of Directorsexpressed their satisfaction with the evaluation process.

The Board of Directors held four meetings during the year under reference and detailsthereof appear in report on Corporate Governance as per Annexure B of the Annual report.


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 & ExternalAuditors 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:


The company recognizes that the risk management and internal control are the keyelements for sustainable working of an organization and good corporate governance. It hasformulated the Risk Management Policy which describes the manner in which the companyidentifies assesses monitors and manages risks. The details of the policy are availableat company's website.


The powers role and terms of reference of the Audit Committee cover the areas ascontemplated under Section 177 of the Companies Act 2013 (the Act') and Regulation 18 ofSEBI (LODR) Regulations 2015 as applicable besides other matters as referred by theBoard of Directors from time to time. The primary objective of the audit committee is tomonitor and provide an effective supervision of the Management's financial reportingprocess to ensure accurate and timely disclosures with highest levels of transparencyintegrity and quality of financial reporting. The committee oversees the financialreporting process by the Management the internal auditors and the independent auditors.All possible measures are taken by the committee to ensure the objectivity andindependence of the independent auditors.

The Committee mandatorily reviews information such as internal audit reports related tointernal control weakness management discussion & analysis and operational resultsstatement of significant related party transactions and such other matters as prescribed.

During the year under reference the Audit Committee of the Company consisted of Sh.Ranbir Singh Seehra as Chairman and Sh. Vikas Uppal Smt. Ruby Agarwal and Sh. M.G. Sharmaas its members. All recommendations made by the Audit Committee during the year wereaccepted by the Board.


(i) All the deposits have been accepted/ renewed / repaid as per the provisions of theCompanies Act. The company had no unclaimed / unpaid deposits on 31/03/2021.

(ii) Unsecured Loans as on 31/03/2021 include Rs 6.30 crores (P.Y. Rs 5.77 crores)received from directors have been made out of their own funds and not from the fundsacquired by them by borrowing or accepting loans or deposits from others as per thedeclarations received from the concerned directors.

(iii) The Company has duly complied with Secretarial Standards issued by the Instituteof Company Secretaries of India on Meetings of the Board of Directors and the GeneralMeetings.

(iv) No shares have been issued during the year under reference with differentialrights as to dividend voting or otherwise.

(v) There is no significant and material order passed by any regulator court tribunalwhich may impact the going concern status of the Company and Company's operations infuture.

(vi) There is no change in the nature of company's business during the year underreview.

(vii) There was no instance of fraud during the year under reference which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of Act and Rules made there under.

(viii) The Board has constituted an Internal Committee for redressal of grievance(s) /complaint(s) (if any) under the provisions of the "Sexual Harassment of Woman atWorkplace (Prevention Prohibition and Redressal) Act 2013". The committee has notreceived any complaint during the year under reference.

(ix) In view of the relaxation granted by MCA /SEBI amid Covid-19 pandemic and as perthe Green Initiative taken by MCA the Company is serving its shareholders allcommunications / documents including Annual Reports Notices Circulars etc. throughelectronic mode. The shareholders who have not registered / updated their Email IDs withthe Company / RTA are once again requested to kindly register /update the same with theCompany / RTA in case of physical shares and with their Depository Participants in respectof shares held in Demat form.

(x) There has been no default in repayment of deposits or payment of interest thereonduring the year.

(xi) There was no instance during the year where the recommendations of any committeewere not accepted by the Board.


The report on Corporate Social Responsibility activities carried out during thefinancial year 2020-21 is annexed herewith marked as 'Annexure D' to this report.


Pursuant to the provisions of the Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations 2015 and amendments thereto the Company has adopted anInternal Code of Conduct for Regulating Monitoring and Reporting of Trades by theDesignated Persons. The Code is to prevent Insider Trading by the Directors and otherDesignated Persons who are expected to have access to the Unpublished Price SensitiveInformation relating to the Company.


The Company has not entered into any material transaction with its Directors KeyManagerial Personnel or their Relatives which could have potential conflict with theinterest of the Company. The salaries/ remuneration of the directors and KMPs have beenfixed after due consideration by the Nomination and Remuneration Committee / Board /Shareholders as per applicable provisions of the Act. However the transactions withsubsidiary Companies are incurred after due appraisal approval(s) at appropriate levelsand omnibus approval by the Audit Committee / Board which are in the ordinary course ofbusiness and are at arm's length price. In terms of IND AS-24 the details of suchtransactions are duly presented as per Point No. 7 of the Notes to Accounts forming partof the Annual Report. Policy on related party transactions of the company appears on theCompany's website at the link:


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. The company has providedCorporate guarantee(s) for Rs 40 crores to the Yes Bank Ltd. and Rs 20 crores to the CitiBank N.A. against the Term Loans for setting up the Mega Food Park by its wholly ownedsubsidiary M/s Sukhjit Mega Food Park & Infra Ltd. The balance under these term loansappeared at Rs 34 Cr. due to the Yes Bank Ltd. & Rs 7 Cr. to the Citi Bank N.A. as on31.03.2021 and there is no third party Guarantee / security given / provided by theCompany.


Extract of the Annual Return of the Company is annexed herewith as 'Annexure E' to thisreport. A copy of the same has also been placed on Company's website at the link :


The necessary details are annexed herewith as 'Annexure F' to this report.


Pursuant to the applicable provisions of the Companies Act 2013 read with the InvestorEducation and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules2016 (IEPF Rules) the company has transferred during FY 2020-21 :

(a) Rs 995825/- as unpaid/undaimed dividend for FY 2012-13 to the Investor Educationand Protection Fund (IEPF).

(b) 42129 shares to the demat account of the IEPF Authority on which dividend has notbeen paid / claimed by the shareholders for 7 (seven) consecutive years or more.

26. AUDITORS AND AUDITORS' 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 Companyand will continue till the conclusion of the next Annual General Meeting (as per theiroriginal appointment for a period of 5 years approved in the Annual General Meeting heldon 27th July 2017). The Company has paid a sum of Rs 5.90 lacs (ind. GST) to M/s VSAP& Associates Chartered Accountants as audit fees during the Financial Year ended 31stMarch 2021.

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

Cost Auditors :

The Board of Directors recommends the re-appointment of M/s Khushwinder Kumar &Associates Cost Accountants as Cost Auditors of the Company for the financial year2021-22 subject to the approval of the Central Government. The Cost Audit Report for thefinancial year ended 31st March 2021 is due to be filed with the Ministry of Corporateaffairs on or before the September 2021 and the cost audit report for the financial yearended 31/03/2020 was duly filed within the dates extended by MCA as a Covid relaxation.

Secretarial Auditors:

M/s Dinesh Gupta & Co. Practicing Company Secretaries have conducted SecretarialAudit for the financial year 2020-21. The Secretarial Audit Report for the financial yearended March 31 2021 forms a part of the Anuual Report as per 'Annexure G'. The Board hasre-appointed M/s Dinesh Gupta & Co. Practicing Company Secretaries as SecretarialAuditors for the financial year 2021-22. The Secretarial Audit report does not contain anyqualification reservation or adverse remark.


Your Directors would like to express their sincere thanks 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.Further the management truly admires & recognizes the dedication regularity and hardwork of the employees during the challenging times amid Covid-19 pandemic.

The Directors regret the loss of life due to Covid-19 pandemic and feel grateful toevery front line person who risked their life and safety to fight this pandemic.

Yours truly.

For and on behalf of the Board

Sd/- Sd/-
Chairperson Managing Director
Dated : 31st May 2021