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Sunil Agro Foods Ltd.

BSE: 530953 Sector: Agri and agri inputs
NSE: N.A. ISIN Code: INE224D01012
BSE 00:00 | 22 Mar 24.05 -0.55
(-2.24%)
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NSE 05:30 | 01 Jan Sunil Agro Foods Ltd
OPEN 24.05
PREVIOUS CLOSE 24.60
VOLUME 605
52-Week high 73.00
52-Week low 23.05
P/E 16.82
Mkt Cap.(Rs cr) 7
Buy Price 24.45
Buy Qty 13.00
Sell Price 24.40
Sell Qty 22.00
OPEN 24.05
CLOSE 24.60
VOLUME 605
52-Week high 73.00
52-Week low 23.05
P/E 16.82
Mkt Cap.(Rs cr) 7
Buy Price 24.45
Buy Qty 13.00
Sell Price 24.40
Sell Qty 22.00

Sunil Agro Foods Ltd. (SUNILAGROFOODS) - Director Report

Company director report

The Board of Directors has pleasure in presenting the Thirtieth (30th) Annual Reporttogether with the Audited Financial Statements for the financial year ended 31st March2018.

1. FINANCIAL RESULTS : (Rs. in Lakhs)
Particulars For the year ended March 31 2018 For the year ended March 31 2017
Total Income 14305.00 13365.94
Less: Expenditure 13838.93 12879.03
Profit before Interest and Depreciation 466.07 486.91
Less: Interest 263.39 241.05
Less: Depreciation 112.32 128.96
Profit Before Taxation 90.36 116.90
Less: Provision for Taxation 23.94 33.27
Profit After Taxation 66.42 83.63
Less: Other Comprehensive Income
Items that will not be reclassified to profit or loss 1.84 0.23
Items that will be reclassified to profit or loss 0.25 21.52
Total Comprehensive Income 64.33 61.88

2. STATE OF COMPANY'S AFFAIRS AND

FUTURE OUTLOOK:

Your Company continued to perform well during the year under report under certainchallenges and hurdles. Overall business improved satisfactorily with better resourceoptimization and more effective controls. The expansion program undertaken by your Companywas completed in the month of June 2018. Expansion and modernization program undertakenby the Company took around 20 to 25 days to install various imported machines whichincreased the production capacity from 180 metric tonnes to 280 metric tonnes per day. TheCompany will reap the benefits of the expansion program in the coming years. During theyear under review your Company has faced lot of challenges due to change in ImportPolicy higher Minimum Support Price huge procurement of wheat by the Government agencieswhich resulted in shortage of wheat in the market. Further huge fluctuations in themarket resulted in decrease in profit of the Company. The Shareholders may note theincrease in the the total Income to Rs.14305.00 Lakhs in the current year as compared toRs.13365.94 Lakhs in the previous year. Profit has decreased to Rs. 90.36 Lakhs in thecurrent year compared to Rs. 116.90 Lakhs in the previous year.

Your Company has been facing competition from other players in the same space. Immenseexperience of the operating team at the factory helped the Company to achieve betterperformance. Rationalization of various inputs expenditures and other resource allocationhas been continuously followed.

3. MANAGEMENT DISCUSSION AND ANALYSIS:

a. Industry outlook and developments: The food processing industry is one of thelargest industries in India in terms of production consumption and exports. In India thefood sector has emerged as a high-growth and high-profit sector due to its immensepotential for value addition particularly within the food processing industry. TheGovernment of India has been instrumental in the growth and development of the foodprocessing industry. The Government through the Ministry of Food Processing Industries(MoFPI) is making all efforts to encourage investments in the business. This sector isamong the few that serves as a vital link between the agriculture and industrial segmentsof the economy. A thrust to the food processing sector implies significant development ofthe agriculture sector and ensures value addition to it.

b. Business Overview: The Company has achieved a turnover of Rs. 14213.07 Lakhs(previous year Rs. 13270.03 Lakhs) for the financial year ended 31.03.2018 with a netprofit of Rs. 64.33 Lakhs (previous year Rs. 61.88 Lakhs).

c. Opportunities: As stated earlier your Company has installed new machineries whichwill result in increase in production and is looking at Product mix addition in newproducts.

d. No risk is expected during this year.

e. Outlook: The Company will strive for Better Values.

f. Internal Control System: The Company has effective control system commensurate withits operations. The Company has internal audit system through outside agency withqualified Chartered Accountant carries out the audit based on a planned program. Theaudit also reviews the adequacy and effectiveness of the internal control system and thefollow up action taken pursuant to audit observation. g. Human Resource Development: TheCompany conducts regular training programs both internally and externally for Employees atall levels to improve the skills and overall development. Employees' relations at all thelevels continue to remain cordial.

4. MATERIAL CHANGES AND COMMITMENTS:

There were no material changes and commitments which occurred affecting the financialposition of the Company between 31st March 2018 and the date on which this report hasbeen signed.

5. CHANGE IN THE NATURE OF BUSINESS: There were no changes in the nature ofbusiness during the year under review as prescribed in Rule 8(ii) of the Companies(Accounts) Rules 2014.

6. DIVIDEND:

Your Directors are pleased to recommend dividend of Re. 0.50 per Equity Share of theface value Rs 10/- (5%) which is provided for in the accounts absorbing a sum of Rs.1501450/- subject to the approval of Shareholders in the ensuing Annual General Meeting.

7. RESERVES:

The Board has not proposed to transfer any amount to its reserves.

8. SHARE CAPITAL:

The paid up Equity Share Capital as on 31st March 2018 was Rs. 300.29 Lakhs. Duringthe financial year under review the Company has not issued shares with differentialvoting rights nor granted Stock Options nor Sweat Equity.

9. CAPITAL INVESTMENTS

Capital Investments during the financial year 2017-18 was at Rs. 295.27 Lakhs (Net ofcapital work-in-progress and capital advances).

10. CORPORATE SOCIAL RESPONSIBILITY:

Since the Company does not meet the criteria for the applicability of Section 135 ofthe Companies Act read with the Companies (Accounts) Rules 2015 this clause is notapplicable.

11. RISK MANAGEMENT:

The Company has formulated a Risk Management Policy and a mechanism to inform the Boardabout risk assessment and mitigation procedures. Also undertakes periodical review toensure that executive management controls risks by means of a properly designed framework.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy for vigil mechanism pursuant to the provisionsof Sections 177(9) and (10) of the Companies Act 2013 and as per Regulation 4(2)(d)(iv)of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 which isavailable on website of the Company athttp://www.sunilagro.in/sunil-agro-foods-whistle-blower-policy and there were no casesreported during last year.

13. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES/ JV:

The Company does not have any Subsidiary Joint Venture or Associate Company.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL:

In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. B. Shantilal (holding DIN: 00719808) Managing Director retires byrotation at the forthcoming Annual General Meeting and is eligible for re-appointment.

The Board appointed Ms. Garima Garg as Company Secretary and Compliance Officer (KMP)of the Company with effect from 24th January 2018. Mr. AVS Murthy was appointed as anIndependent Director of the Company for a period of 5 years for a term up to 31st March2019 in the 26th Annual General Meeting held on 10th September 2014. In terms of Section149(10) of the Companies Act 2013 the Board in its Meeting held on 30th July 2018 onthe recommendation of the Nomination and Remuneration Committee (NRC) has decided tore-appoint Mr. AVS Murthy as an Independent Director for second term for a period of 5years subject to the approval of Shareholders and the same has been included as one ofthe agenda items in the Notice convening the Annual General Meeting. Brief resume of Mr.AVS Murthy being re-appointed is attached to the Notice of the Annual General Meeting.

Further on the recommendation of NRC the Board at its meeting held on 30th July 2018subject to the approval of Shareholders at the ensuing Annual General Meeting reappointedMr. Pramod Kumar S as Whole-Time Director designated as CEO and Director for afurther period of three (3) years with effect from 1st November 2018 to 31st October2021.

15. BOARD MEETINGS:

The Meetings of the Board are held at regular intervals with a time gap of not morethan 120 days between two consecutive Meetings. During the period under review Four (4)Board Meetings were held on 27th May 2017 28th July 2017 28th October 2017 and 24thJanuary 2018. The Agenda of the Meeting is circulated to the Directors in advance.Minutes of the Meetings of the Board of Directors are circulated amongst the Members ofthe Board for their perusal. The details of other Committee Meetings during the financialyear 2017-18 are given in the Corporate Governance Report.

16. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

A separate Report on Corporate Governance in terms of Regulation 34 of the Securitiesand Exchange Board of India (listing Obligations and Disclosure Requirements) Regulations2015 (hereinafter referred as "Listing regulations") along with a Certificatefrom a Practising Company Secretary regarding compliance to the Conditions stipulatedunder Chapter IV of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 is annexed as Annexure - I.

17. ANNUAL BOARD EVALUATION:

Pursuant to the provisions of the Companies Act established an annual performanceevaluation of its own performance its Committee's and the Directors individually. Themanner of evaluation has been explained in the Corporate Governance Report.

Further the Independent Directors at their exclusive meeting held during the yearreviewed the performance of the Board its Chairman and Non-Executive Directors and otheritems as stipulated under the Listing Regulations.

18. DIRECTORS' RESPONSIBILITY STATEMENT:

In pursuance of Section 134 (5) of the Companies Act 2013 the Directors herebyconfirm that:

(a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures; (b) thedirectors had selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of affairs of the company at the end of the financial year and of the profitand loss of the company for that period; (c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisionsof this Act for safeguarding the assets of the company and for preventing and detectingfraud and other irregularities; (d) the directors had prepared the annual accounts on agoing concern basis;

(e) the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and (f) the directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.

19. INTERNAL FINANCIAL CONTROL:

The Company continued to maintain high standards of internal control designed toprovide adequate assurance on the efficiency of operations and security of its assets. Theadequacy and effectiveness of the internal control across various activities as well ascompliance with laid-down systems and policies are comprehensively and frequentlymonitored by your Company's management at all levels of the organization. The AuditCommittee which meets at-least four times a year actively reviews internal controlsystems as well as financial disclosures with adequate participation inputs from theStatutory Internal and Corporate Secretarial Auditors.

20. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has received necessary declaration from each Independent Director underSection 149(7) of the Companies Act 2013 that he meets the criteria of Independence laiddown in Section 149(6) of the Companies Act 2013 and Regulation 25 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.

21. EXTRACT OF ANNUAL RETURN:

As required pursuant to Section 92(3) of the Companies Act 2013 and rule 12(1) of theCompanies (Management and Administration) Rules 2014 an extract of Annual return inMGT-9 is annexed as Annexure – II as a part of this Annual Report.

22. DEPOSITS:

Your Company has not invited/accepted/renewed any deposits from the public as definedunder the provisions of Companies Act 2013 and accordingly there were no deposits whichwere due for repayment on or before 31st March 2018.

23. RELATED PARTY TRANSACTIONS:

The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 for the Financial Year 2017-18 in the prescribedformat AOC 2 is enclosed as Annexure – III as a part of this Annual Report. .

24. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES GIVEN OR SECURITY PROVIDEDBY THE COMPANY:

The Company has duly complied with the provisions of Section 186 of the Companies Act2013 and it has taken:

Secured Loans: Rs. 8935055/-
Unsecured Loans: Rs. 31513831/-
Current/Non-Current Investments: Rs. 671350/-
Guarantees: Nil

Securities Extended: Secured by the certain immovable properties of the Companyhypothecation by way of first charge on company's stock book debts plant and machineryvehicles and term loan repayable within 3 years in equal monthly installments.

25. AUDITORS:

Messrs GRV & PK Chartered Accountants Bengaluru (Firm Registration No. 008099S)were appointed in the Annual General Meeting held on 21st September 2017 for aconsecutive term of five years from the conclusion of 29th Annual General Meeting till theConclusion of 34th Annual General Meeting.

There are no qualifications or observations or other remarks made by the StatutoryAuditors in their report.

26. SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 the Companyhas appointed Mr. Vijayakrishna KT Bengaluru Practising Company Secretary to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed asAnnexure – IV to this Report.

27. PARTICULARS OF EMPLOYEES:

The information required pursuant to Section 197 read with Rule 5(1) and (2) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014Details/Disclosures of Ratio of Remuneration to each Director to the median employee'sremuneration is annexed as Annexure – V to this report.

Further the statement showing details in respect of employees of the Company are givenin the Annexure – V forming part of the Report.

28. LISTING WITH STOCK EXCHANGES:

The Company confirms that it has paid the Annual Listing Fees for the financial year2018-2019 to BSE Limited where the Company's Shares are listed.

29. MATERIAL ORDER PASSED BY ANY COURT OR REGULATOR OR TRIBUNALS IMPACTING GOINGCONCERN STATUS OF COMPANY:

No order was passed by any court or regulator or tribunal during the year under reviewwhich impacts going concern status of the Company.

30. COMPOSITION OF AUDIT COMMITTEE NOMINATION AND REMUNERATION COMMITTEE &STAKEHOLDERS RELATIONSHIP COMMITTEE

Following are the composition of various Committees:

i) Composition of Audit Committee:

1. Mr. AVS Murthy - Chairman
2. Mr. Shailesh Siroya - Member
3. Mr. Pramod Kumar S - Member

ii) Composition of Nomination and Remuneration Committee:

1. Mr. AVS Murthy - Chairman
2. Mr. Shailesh Siroya - Member
2. Ms. Pinky Jain - Member

iii) Composition of Stakeholders' Relationship Committee:

1. Mr. AVS Murthy - Chairman
2. Mr. Shailesh Siroya - Member
2. Ms. Pinky Jain - Member

31. CONSERVATION OF ENERGY RESEARCH & DEVELOPMENT TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE OUTGO: (A) Conservation of Energy:

1. Energy Conservation measures taken:

The Company has a system to monitor consumption of energy and all efforts forconservation of energy wherever possible are made and have installed Solar Energy lightsin the plant. Energy efficient electric Tubes have been installed to save energy.

The Company has also installed energy efficient meters controlling waste of power.

2. Additional investments and proposal being implemented for reduction andconsumption of energy and the impact of the same in the cost of production of goods.

3. Energy Audit done

Investment was made in machinery designed for low energy consumption and such machinerywas in operation in the period under review.

(B) Technology Absorption:

The Company is committed to maintaining its standard and high quality of its productionand is constantly engaged in efforts to confer to the guaranteed customer satisfaction.

(C) Foreign Exchange Earnings and Outgo:

The Company expended Rs. 2163149/- in foreign exchange during the year under reviewand the Company's earnings in foreign currency is nil during the year under review.

32. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at the Workplace (Prevention Prohibition &Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed-offduring the financial year 2017-18:

No of complaints received: NIL No of complaints disposed: NIL

33. ACKNOWLEDGEMENTS:

The Directors place on record their appreciation for valuable contribution made byemployees at all levels active support and encouragement received from Government ofIndia Government of Karnataka Company's Bankers Customers Principals BusinessAssociates and other Acquaintances.

Your Directors recognize the continued support extended by all the Shareholders andgratefully acknowledge with a firm belief that the support and trust will continue in thefuture also.

For and Behalf of the Board of Directors
Place : Bengaluru SHANTILAL BANSILAL PRAMOD KUMAR S
Date : 30.07.2018 Managing Director Executive Director
DIN: 00719808 DIN: 00719828
No. 10 Kamal Nivas No. 10 Kamal Nivas
Srikantaiah Layout Srikantaiah Layout
Crescent Cross Road Crescent Cross Road
Bengaluru – 560 001 Bengaluru – 560 001

ANNEXURE - III

FORM NO. AOC-2

Form for disclosure of particulars of contracts/arrangements entered into by theCompany with related parties referred to in sub-Section (1) of Section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto.

(Pursuant to clause (h) of sub-Section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014))

1. Details of contracts or arrangements or transactions not at arm's length basis:

NIL

2. Details of material contracts or arrangement or transactions at arm's length basis:

Name of the party and nature of relationship Markasia Foods Private Limited Brindavan Roller Flour Mills Private Limited
Nature of contracts/arrangements/ transactions Sale of goods and providing of Services Receipt of Rent Purchase and Sale of Goods and Services
Duration of the contracts/ arrangements/transactions Ongoing - based on periodical requirements Ongoing - based on periodical requirements
Salient terms of the contracts or arrangements or transactions including the Value: Value: For 2017-18 - Rs. 6482243/- Estimated Value: Value: For 2017-18 - Rs. 35839022/- Estimated Value:
For 2018-19 - Rs. 20000000/- For 2018-19 - Rs. 60000000/-
Date(s) of approval by the Board: 23.05.2018 23.05.2018
Amount paid as advances - -

 

For and on behalf of the Board of Directors
Place: Bengaluru Shantilal Bansilal Pramod Kumar S
Date: 30.07.2018 Managing Director Executive Director
DIN: 00719808 DIN: 00719828
No.10 Kamal Nivas No.10 Kamal Nivas
Srikantaiah Layout Srikantaiah Layout
Crescent Cross Road Crescent Cross Road
Bengaluru – 560 001 Bengaluru – 560 001

ANNEXURE - V

THE RATIO OF REMUNERATION OF EACH DIRECTOR

(i) The ratio of the remuneration of each Director to the median remuneration of the Employees of the Company for the Financial Year; Managing Director – 127 : Executive Director – 249 : Median Remuneration of Employees - 6.80
(ii) The percentage increase in remuneration of each Director Chief Financial Officer Chief Executive Officer Company Secretary or Manager if any in the Financial Year; Mrs. Gayithri Shankarappa Chief Financial Officer - 10%
(iii) The percentage increase in the median remuneration of employees in the Financial Year; 5.36%
(iv) The number of permanent employees on the rolls of Company; As on 31.03.2018 - 97 members
(v) The explanation on the relationship between average increase in remuneration and company performance; Increase in remuneration is based on the industrial standard & experience of each employees.
(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company; Remuneration paid to Key Managerial person is based on remuneration policy of the Company.
(vii) Variations in the market capitalisation of the Company price earnings ratio as at the closing date of the current Financial Year and previous Financial Year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last Public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the Company as at the close of the current Financial Year and previous Financial Year; There is no material variation in the share price.
(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration; This is as per the Company's increment guidelines.
(ix) Comparison of the each remuneration of the Key Managerial Personnel against the performance of the Company This is as per the Company's increment guidelines.
(x) The key parameters for any variable component of remuneration availed by the Directors; Not Applicable
(xi) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year; Not Applicable
(xii) Affirmation that the remuneration is as per the remuneration policy of the Company. Yes

STATEMENT SHOWING DETAILS OF EMPLOYEES OF THE COMPANY:

(i) Designation of the employee;
(ii) remuneration received;
(iii) nature of employment whether contractual or otherwise;
(iv) qualifications and experience of the employee;
(v) date of commencement of employment;
(vi) the age of such employee;
(vii) the last employment held by such employee before joining the company;
(viii) the percentage of equity shares held by the employee in
the company within the meaning of clause (iii) of sub-rule
(2) above; and
(ix) whether any such employee is a relative of any director or manager of the company and if so name of such director or manager: Not Applicable
The Top ten employees if employed throughout the financial year was in receipt of remuneration for that year which in the aggregate was not less than One Crore and Two lakhs rupees;
The Top ten employees if employed for a part of the financial year was in receipt of remuneration for any part of that year at a rate which in the aggregate was not less than Eight Lakhs and Fifty Thousand rupees per month; The employee if employed throughout the financial year or part thereof was in receipt of remuneration in that year which in the aggregate or as the case may be at a rate which in the aggregate is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or along with his spouse and dependent children not less than two percent of the equity shares of the Company.

 

For and on behalf of Board of Directors
Place: Bengaluru Shantilal Bansilal Pramod Kumar S
Date: 30.07.2018 Managing Director Executive Director
DIN: 00719808 DIN: 00719828
No.10 Kamal Nivas No.10 Kamal Nivas
Srikantaiah Layout Srikantaiah Layout
Crescent Cross Road Crescent Cross Road
Bengaluru – 560 001 Bengaluru – 560 001