Dear Share Holders :
Your Directors are pleased to present before you the 75th Annual Report and the AuditedStatement of Accounts for the year ended 31st March 2019 :-
|1. FINANCIAL RESULTS ||2018-19 ||2017-18 |
| ||(##Rs##. in Crores) ||(##Rs##. in Crores) |
|Sales & Other income ||743.15 ||713.25 |
|Earning before Interest tax and Depreciation ||95.00 ||68.43 |
|- Less Interest ||16.28 ||17.54 |
|-- Depreciation ||12.74 ||14.72 |
|Profit before tax ||65.98 ||36.17 |
|-- Provision for taxes (including Deferred Tax) ||24.30 ||13.15 |
|Profit After Tax ||41.68 ||23.02 |
|Surplus brought forward from previous year ||21.39 ||17.81 |
|Dividend for the F.Y. 17-18 (F.Y. 16-17) ||5.78 ||4.44 |
|(including Dividend Distribution Tax) || || |
|Interim Dividend for F.Y. 18-19 ||6.67 ||-- |
|(including Dividend Distribution Tax) || || |
|Transfer to General Reserves ||25.00 ||15.00 |
|Surplus carried forward ||25.62 ||21.39 |
The Company has shown excellent performance during the financial year ended 31st March2019. The Sales and other income of the Company have increased from ##Rs##. 713 crores to##Rs##. 743 crores. The Earnings before Interest Tax and Depreciation stood at ##Rs##.95.00 Crores (##Rs##. 68.43 crores) showing an increase of about 39% during the year underreference which after interest of ##Rs##. 16.28 crores (##Rs##. 17.54 crores) anddepreciation of ##Rs##. 12.74 crores (##Rs##. 14.72 crores) resulted in a Net Profitbefore tax of ##Rs##. 65.98 crores (##Rs##. 36.18 crores) with a jump of over 82 %. TheNet Profit after tax has also shown an excellent increase of around 81 % and came at##Rs##. 41.68 crore against ##Rs##. 23.02 crore in the immediate previous financial year.
3. FUTURE PROSPECTUS
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. Good production of the agricultural produce will also ensure continuoussupply of raw material at all plant locations of the Company. The Company is expected toshow reasonable growth in its operations in the running year due to optimum utilization ofcapacities of the existing units and commencement of Production by its new unit coming upin the state of Punjab and expected to get commissioned in the 3rd Quarter of the runningyear.
4. CAPEX & CREDIT RATING
The Credit Analysis & Research Limited (CARE) has maintained the rating CARE A+ forthe long term borrowings of the Company and CARE A1 for the short term borrowing of theCompany. Fixed Asset (Net) stood at ##Rs##. 321.55 crores against ##Rs##.266.30 croresprevious year. Current Assets at ##Rs##. 158.03 crores as compared to ##Rs##.148.20 croreson 31.03.2018 with Inventories level at ##Rs##. 53.24 crores on 31.03.2019 against ##Rs##.92.10 crores in previous year.
The Management believes that the Company has enough liquid resources at hand to meetany additional working capital requirements and funds for the ongoing expansion projects.
5. MANAGEMENT DISCUSSION AND ANALYSIS
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.
6. CORPORATE GOVERNANCE
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 Company has dulyimplemented the system of Corporate Governance. The report on the Corporate Governance isannexed to this report marked as 'Annexure B'.
7. SHARE CAPITAL
The paid up Equity Share Capital of the Company as at March 31 2019 stood at ##Rs##.14.76 crore. During the year under reference the Company has issued Bonus shares of facevalue of ##Rs##. 10/- each (fully paid up) in the ratio of 1:1 to the existingshareholders by capitalizing the share premium account /free reserves of the company.
2018-19 being the 75th year of company's excellent existence in the industry Board hasdeclared and paid an Interim Dividend @75% (i.e. ##Rs##. 7.5/- per share of ##Rs##. 10/-each) to the shareholders of the Company in February 2019. The Board considered the sameas the dividend for the financial year 2018-19.
9. TRANSFER TO RESERVES
The Company has transferred ##Rs##. 25 crores (PY ##Rs##. 15 crores) to the generalreserve.
10. DIRECTORS' RESPONSIBILITY STATEMENT
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 March2019 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 31.03.2019 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.
11. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
(a) The Vijoy Steel & General Mills Company Ltd. Phagwara: The Company held 96.17%of shares in the capital of the Vijoy Steel & the General Mills Co. Ltd. The Companycontinuoues providing good engineering support to the manufacturing operations of theCompany.
(b) Scott Industries Ltd. Phagwara: The Company held 99.97% of shares in the capitalof the 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.
(c) Sukhjit Mega Food Park & Infra Ltd. Phagwara: The Company held 100% of sharesin the capital of its subsidiary Sukhjit Mega Food Park & Infra Ltd. The work is goingon as per the schedule and the Company has already spent over ##Rs##. 70 crores on theProject. The Project 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 as amended to date The Consolidated Financial Statements of theCompany and its subsidiaries are attached which have been prepared in accordance with therelevant Indian Accounting 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 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 2019 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.
12. PARTICULARS OF REMUNERATION TO DIRECTORS AND DISCLOSURES
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 ##Rs##. 1.02crores p.a. if employed throughout the year or ##Rs##. 8.5 lacs p.m. if employed for apart of the year during 2018-19 are given below :
(A) Persons employed through out the year and were in receipt of remunerationaggregating not less than ##Rs##. 1.02 Lacs for the year:
|Sr. No. ||Name ||Age ||Designation ||Gross Remuneration (##Rs##. Lacs) |
|1 ||Shri I.K. Sardana ||73 ||Managing Director ||147.38 |
|2 ||Shri K.K. Sardana ||71 ||Jt. Managing Director ||131.41 |
|Qualification ||Experience ||Date of Joining ||Last Employment/ Designation Held |
|B.A. ||53 ||02.08.1967 ||The Sukhjit Starch & Chemicals Ltd. Phagwara Sales Manager |
|B.A. ||48 ||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 ##Rs##. 850000/- per month
- NIL -
1. The Remuneration shown above includes salaries allowances commission contributionto provident fund and perquisites valued in accordance with the income tax rules.
2. Pursuant to the provisions of the section 197 (14) of the Companies Act 2013 thereis no holding Company and Sh. I.K. Sardana & Sh. K.K. Sardana have not received anyremuneration in form of commission allowances and sitting fees from any of itssubsidiaries.
(a) Sh. I.K. Sardana our worthy Managing Director left for heavenly abode on30-04-2019. The Company acknowledge with gratitude the services provided by Sh. I.K.Sardana during his long association with the Company spanning over five decades and about42 years as the Managing Director of the Company. The Company has grown significantly withnew projects & expansions under his able stewardship. The Board of DirectorsManagement and staff expressed their deep sense of sorrow and grief at losing the epitomeof ethics and the custodian of great human values.
(b) Sh. S.C. Jindal Sh. S.K. Anand Smt. Ravi Chowdhry Sh. V.K. Sardana and Sh.Naresh Sardana all being over 75 years of age ceased to be the Directors of the Companyw.e.f 1st April 2019 pursuant to the provisions of the SEBI (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2018 (notified on 9th May 2018).Consequently the above directors have also ceased to be members of the various committeesof the Board accordingly.
(c) The Board have co-opted Sh. Ranbir Singh Seehra (DIN: 01575708) as an AdditionalIndependent Director on 01.04.2019. He will hold the office till the Annual GeneralMeeting and Board has recommended his appointment as an Independent Non-Executive Directorof the Company. He is having long experience of over three decades in the manufacturingadministration management and commercial activities. He is presently working as ChiefExecutive Officer of M/s GNA Axles ltd. which he has steered to higher growth trajectoryin the last couple of years.
(d) Smt. Ruby Agrawal (DIN: 08417902) has been co-opted as Additional Independent WomanDirector of the Company on 10.04.2019. The Board has recommended her appointment asIndependent Woman NonExecutive Director of the Company in the ensuing Annual GeneralMeeting. She is an MBA from renowned University and is presently working as SeniorManaging Partner of a growing I.T. Company at Udaipur. She has rich experience in thebusiness administration. Her induction of the Board she will further strengthen thecomposition of the Board.
(e) A Notice has been received from shareholders u/s 160 of the Companies Act 2013proposing the appointment of Smt. Manjoo Sardana to the office of Director of the Company.Accordingly a resolution for her appointment has been proposed to be passed by theshareholders in ensuing Annual General Meeting. Mrs. Manjoo Sardana is a Science Graduateand an experienced entrepreneur with sound business background. She is involved inphilanthropic activities in the field of education and healthcare etc. She brings with herdiverse experience and skills.
(f) 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.
(g) 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.
The performance evaluation of the Non-Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process
The Board of Directors held eight meetings during the year under reference and detailsthereof appear in report on Corporate Governance of the Annual report.
14. INTERNAL FINANCIAL CONTROLS
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.
15. VIGIL MECHANISM
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:// sukhjitgroup.com/whistle_blower_policy.html.
16. AUDIT COMMITTEE
The powers role and terms of reference of the Audit Committee covers the areas ascontemplated under Section 177 of the Companies Act 2013 ('the Act') and Regulation 18 ofListing Regulations as applicable besides other terms as referred by the Board ofDirectors. The primary objective of the audit committee is to monitor and provide aneffective supervision of the Management's financial reporting process to ensure accurateand timely disclosures with highest levels of transparency integrity and quality offinancial reporting. The committee oversees the work carried out in financial reportingprocess by the Management the internal auditors and the independent auditors. Allpossible measures are taken by the committee to ensure the objectivity and independence ofthe independent auditors.
The Committee mandatorily reviews information such as internal audit reports related tointernal control weakness management discussion & analysis and result of operationsstatement 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.V.P. Kapahi as Chairman and Shri S. K. Anand Shri K.K. Sardana and Shri S.C. Jindal asits members. All the recommendations made by the Audit Committee were accepted by theBoard.
17. GENERAL DISCLOSURE
(i) All the deposits have been accepted/ renewed / repaid as per the provisions of theCompanies Act. The company had no unclaimed / unpaid deposits on 31/03/2019. UnsecuredLoans as on 31/03/2019 include ##Rs##. 3.30 crores (P.Y. ##Rs##. 3.35 crores) receivedfrom directors which have not been given out of funds acquired by them by borrowing oraccepting loans or deposits from others as per the declarations received from theconcerned directors.
(ii) No shares have been issued with differential rights as to dividend voting orotherwise.
(iii) There is no significant and material order passed by any regulator courttribunal which may impact the going concern status of the Company and Company's operationsin future.
(iv) There is no change in the nature of company's business during the year underreview.
(v) 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 thereunder.
(vi) The Board has constituted an Internal Committee for redressal of grievance /complaint (if any) under ''Sexual Harassment of Woman at workplace (PreventionProhibition and Redressal) Act 2013.'' The committee has not received any complaintduring the year under reference.
18. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The report on Corporate Social Responsibility activities conducted during the financialyear 2018-19 is annexed herewith marked as 'Annexure D' to this report.
19. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
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. 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 an appropriatelevels which are in the ordinary course of business and are at arm's length price interms of IND AS-24 and given as per Point No. 6 of the Notes to Accounts forming part ofthe Annual Report. Policy on related party transactions of the company appears on theCompany's website at the link: http://sukhjitgroup.com/ Policy_dealing.html.
20. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN AND SECURITIESPROVIDED
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##Rs##. 40 crores to Yes Bank Ltd. has been given against the Term Loan for setting up theMega Food Park by its wholly owned subsidiary M/s Sukhjit Mega Food Park & Infra Ltd.and there is no third party Guarantee / security given / provided by the Company.
21. EXTRACT OF ANNUAL RETURN
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 linkhttp://sukhjitgroup.com/extract of annual return.html.
22. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS ANDOUTGO
The necessary detail is annexed herewith as 'Annexure F' to this report.
23. 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 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 remarkdisclaimer made 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 year2019-20 subject to the approval of the Central Government. The Cost Audit Report for thefinancial year ended 31st March 2019 is due to be filed with the Ministry of Corporateaffairs on or before the September 2019 and the cost audit report for the financial yearended 31/03/2018 was duly filled on 28/09/2018.
Secretarial Auditors :
The Board has appointed M/s Dinesh Gupta & Co. Practicing Company Secretaries toconduct Secretarial Audit for the financial year 2018-19. The Secretarial Audit report forthe financial year ended March 31 2019 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 2019-20. TheSecretarial 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.
For and on behalf of the Board
|Sd/- ||Sd/- |
|V.P. KAPAHI ||K.K. SARDANA |
|Chairman ||Managing Director |
Dated : 25th May 2019