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Sukhjit Starch & Chemicals Ltd.

BSE: 524542 Sector: Others
NSE: N.A. ISIN Code: INE450E01011
BSE 00:00 | 16 Jul 467.15 -12.90






NSE 05:30 | 01 Jan Sukhjit Starch & Chemicals Ltd
OPEN 463.30
52-Week high 577.50
52-Week low 294.00
P/E 14.97
Mkt Cap.(Rs cr) 345
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 463.30
CLOSE 480.05
52-Week high 577.50
52-Week low 294.00
P/E 14.97
Mkt Cap.(Rs cr) 345
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 73rd Annual Report and the AuditedStatement of Accounts for the year ended 31st March 2017 :-

1. FINANCIAL RESULTS 2016-17 2015-16
(Rs. in Crores) (Rs. in Crores)
Sales & Other income 655.40 568.43
Earning before Interest tax and Depreciation 52.91 63.07
Less :-
-- Interest 13.37 15.28
-- Depreciation 11.77 12.11
-- Provision for taxes (including Deferred Tax) 9.15 12.63
Profit After Tax 18.62 23.05
Surplus brought forward from previous year 7.81 9.21
Surplus available for appropriation 26.43 32.26
Dividend (including Corporate Tax) 4.44 4.44
Transfer to General Reserves 10.00 20.00
Surplus carried forward 11.99 7.81


The Sales and other income of the Company have increased fromRs. 568 Crores toRs. 655Crores showing an increase of 15% y-o-y. The profitability has however not increased inline with the sales due to higher cost of basic raw material i.e. Maize being anagriculture produce the availability of which remained a concern throughout the year dueto consecutive draughts in the country. The Company has however controlled otherexpenditure in an effective way. The Earnings before interest tax and Depreciation stoodatRs. 52.91 Crores (^63.07 Crores) which after interest of ^13.37 Crores (^15.28 Crores)and Depreciation of ^11.77 Crores (^ 12.11 Crores) resulted in Net Profit before tax atRs.27.77 Crores (Rs. 35.68 Crores).


With the prediction of normal monsoons during the running year it is expected that theproduction of agriculture produce will improve resulting in availability of basic rawmaterial at an optimum cost with positive impact on the profitability of the Company. Goodproduction of the agricultural produce will also ensure continuous supply of raw materialat all plant locations of the Company. The turnover of the Company is set to grow furtherdue to optimum utilization of increased capacities at Malda and Gurplah plants.

The introduction of GST from 1st July 2017 should also bode well for the trade andindustry enabling your Company to further expand its outreach.



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 with the Stock Exchange the Company has dulyimplemented the system of Corporate Governance. The report on Corporate Governance isannexed herewith marked as 'Annexure B' to this report.


The Directors are pleased to recommend a dividend of 50% (i.e.Rs. 5/- per Equity shareofRs. 10/- each) during the financial year ended 31st March 2017 against interim dividend@ 50% paid in 2015-16.


The Company has transferredRs. 10 crores (PYRs. 20 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 March2017 the applicable Accounting Standards have been followed alongwith proper explanationsrelating to material departures;

(b) the Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the company for the year so ended;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors have prepared the Annual Accounts for the financial Year ended 31stMarch 2017 on a 'going concern' basis;

(e) the directors have laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and are operatingeffectively; and

(f) the directors have devised proper systems to ensure compliance with the provisionsof all applicable 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 31/03/2017.


(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.

1 A

(c) Sukhjit Mega Food Park & Infra Ltd. Phagwara : The Mega Food Park has obtainedall the necessary approvals/consents from the Central as well as State Government and theonsite work is expected to start within a month's time. The commissioning of the projectwill be as per the guidelines laid down by the Ministry of Food Processing IndustriesGovt. of India.

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 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 2017 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 ofRs. 28.62Crores. The amount mainly includesRs. 25.98 Crores as disputed Central Excise Duty(excluding penalty and interest) demand raised by the Central Excise Department since01/04/1997 alleging the sale of Maize Starch as that of Modified Starch. Since the matteris subjudice the Department has continuously been issuing the show cause notices againstthe differential duty. However pertinent to mention that the product has been repeatedlygot tested 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 1.31 crores raised on sale made through the consignmentagents of the Company which is pending before the Assisstant CommissionerRs. 1.25 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 2013read 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 the detail of the employees who are in receipt of remuneration overRs. 60.00Lacs p.a. if employed throughout the year orRs. 5.00 Lacs p.m. if employed for a part ofthe year during 2016-17 given below :-

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

Name Age Designation Gross Remuneration (Rs. Lacs)
Shri I.K. Sardana 71 Managing Director 117.26
Shri K.K. Sardana 69 Jt. Managing Director 106.20


Qualification Experience Date of Joining Last Employment/ Designation Held
B.A. 51 02.08.1967 The Sukhjit Starch & Chemicals Ltd. Phagwara Sales Manager
B.A. 46 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 thanRs. 500000/- per month

- NIL -

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 Shri Naresh Sardana retires byrotation and being eligible the Board recommends their reappointment.

(b) The Board also recommends the re-appointment of Sh. S. C. Jindal Sh. S. K. Anandand Sh. V. P. Kapahi as Independent Directors of the company for a further period of 3years.

(c) The Company has received declarations from all the Independent Directors of thecompany confirming that they meet the criteria of independence as prescribed in subsection(6) of Section 149 of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 with Stock Exchange.

(d) 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 & ExternalAuditors of the Company also measures the effectiveness of internal controls throughperiodical checks and ensure that company has an effective internal control systemdulycommensurate 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 to report genuine concerns and also its commitment to opencommunication & the best practices of Corporate Governance.Whistle Blower Policy ofthe Company stands placed on the Company's website at the link:


The Board has constituted Audit Committee of the Company with Sh. V.P. Kapahi asChairman and Shri S.K. Anand Shri K.K. Sardana and Shri S.C. Jindal as its members. Allthe recommendations 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. However no complaint has been received during the year.


The report on Corporate Social Responsibility activities conducted during the financialyear 2016-17 is annexed herewith marked as 'Annexure D' to this report.


The Company has not entered into any material transaction with its PromotersDirectors Key Managerial Personnel or their Relatives which could have potential conflictwith the interest of the Company. Their salaries/ remuneration have been fixed after dueconsideration by the Nomination and Remuneration Committee / Board / Shareholders as perapplicable provisions of the Act. However the transactions with subsidiary Companies areincurred after due appraisal and approval at Director's level / Audit Committee which arein the ordinary course of business and are at per arm's length price in terms of AS-18and given as per Point No. 6 of the Notes to Accounts forming part of the Annual Report.Policy on related party transactions of the company stands placed on the Company's websiteat the link:


The Board of Directors held six 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 statement. The Company has given /provided some Guarantees/ Securities to theGovt. / other Departments in the ordinary course of business. However there is no thirdparty Guarantee/ 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.

24. AUDITORS AND AUDITORS' REPORT Statutory Auditors :

M/s VSAP & Associates Chartered Accountants (FRN 018705N) have been appointed asAuditors of the company by the Board (subject to the approval of shareholders in theensuing AGM) in place of the retiring auditors M/s Y.K. Sud & company CharteredAccountants to hold office from the conclusion of this Annual General Meeting till theconclusion of the 78th Annual General Meeting (subject to ratification of theirappointment at every AGM if so required under the Act) at such remuneration as may bemutually agreed between the Board and the Auditors.

The Auditors' report given by M/s. Y. K. Sud& Company Chartered Accountants doesnot have any qualification reservation or adverse remark.

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 2017-18. The Cost Audit Report for thefinancialyear ended 31st March 2017 is due to be filed with the Ministry of Corporateaffairs on or before the September 2017 and the cost audit report for the financial yearended 31/03/2016 was duly filled on29/09/2016.

Secretarial Auditors :

The Board has appointed M/s Dinesh Gupta & Co. Practicing Company Secretary toconduct Secretarial Audit for the financial year 2016-17. The Secretarial Audit report forthe financial year ended March 31 2017 is annexed herewithmarked as 'Annexure G' to thisreport.The Board of Directors have re-appointed M/s Dinesh Gupta & Co. PracticingCompany Secretaries as Secretarial Auditorsfor the financial year 2017-18.

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 authorities customers members and other businessassociates. They place on record their deep sense of appreciation for the committedservices of the executives staff and workers of the Company for its success.

Yours truly

For and on behalf of the Board Sd/-



Dated : 24th May 2017