Sunil Agro Foods Limited
Your Board of Directors has pleasure in presenting the Thirty Second (32"rt)Annual Report together with the Audited Financial Statements for the financial year ended31s' March 2020 together with the IndependentAuditor's Report.
1. FINANCIAL RESULTS: .
(Rs. in Lakhs)
|Particulars ||For the year ended March 312020 ||For the year ended March 31 2019 |
|Total Income ||14055.91 ||13646.22 |
|Less: Expenditure ||13554.07 ||13168.26 |
|Profit before Interest and Depreciation ||501.84 ||477.96 |
|Less: Interest ||276.08 ||231.89 |
|Less: Depreciation ||147.32 ||161.68 |
|Profit Before Taxation ||78.45 ||84.39 |
|Less: Provision for Taxation ||32.31 ||37.15 |
|Profit After Taxation ||46.14 ||47.24 |
|Less: Other Comprehensive Income || || |
|Items that will not be reclassified to profit or loss ||4.82 ||1.75 |
|Items that will be reclassified to profit or loss ||0 ||0 |
|Total Comprehensive Income ||41.32 ||45.49 |
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 Company's expansion program completed inprevious year increased the production capacity with inclusion of additional balancingequipments although the Company will take some time to stabilize the total
production in the upcoming months. During the year under review your Company enteredinto a contract for manufacturing and selling Pillsbury atta to General Mills which wasstopped in the month of December 2019. Your Company has shown significant growth andregistered higher turnover in manufacturing segment; however there was no turnover fromtrading segment during the year. Further this has resulted a decrease in the profits ofthe Company.
The Shareholders may note that there is increase in the revenues from Sales andServices to Rs. 14055.91 Lakhs in the current year as compared to Rs. 13646.22 Lakhs inthe previous year due to reasons as mentioned above. Profit has decreased to Rs. 85.28Lakhs in the current year compared to Rs. 88.52 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. CORPORATE GOVERNANCE:
Pursuant to the provisions of Regulation 15(2) of SEBI (LODR) Regulations 2015Compliance with Corporate Governance provisions as specified in the Regulations 17 to 27and clauses (b) to (i) of Regulation 46(2) and Para C D and E of Schedule V shall notapply to listed entities having Paid-up Equity Share Capital not exceeding Rs.10 Croresand Net Worth not exceeding Rs. 25 Crores as on the last date of previousfinancial year.
The Company being falling under the specified limits of the above Regulationrequirement of giving Corporate Governance Report in Annual Report as per the Para C ofthe Schedule V is exempted to the Company and hence not required to be prepared.
4. LOCKDOWN-COVID 19:
It is quite unfortunate and sad that Corona Virus has caused significant healthconcerns across the Globe and resulted in multiple deaths. Social distancing being theonly and the first compulsory remedy entire World was forced to observe Lockdown. Thanksto early initiatives taken India declared Lockdown from 24th
March 2020. As your Company comes under the purview of essential services your Companyhad dispensed operations for a period of one week post which the operations werecommenced with 50% work force on each shift (i.e. on double shift basis) resulting at60%-70% production capacity. Therefore there has been no adverse impact on your businessdue to this pandemic.
Disclosure of material impact of COVID- 19 pandemic with reference to NotificationSEBI/HO/CFD/CMD1 /CIR/P/2020/84 dated 20th May 2020 under Regulation 30 of SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 was made to the Stock Exchange.
5. MANAGEMENT DISCUSSION AND ANALYSIS:
a. Industry outlook and developments:
The food processing industry is one of the largest industries in India in terms ofproduction consumption and exports. In India the food sector has emerged as ahigh-growth and high-profit sector due to its immense potential for value additionparticularly within the food processing industry. The Government of India has beeninstrumental in the growth and development of the food processing industry. The Governmentthrough the Ministry of Food Processing Industries (MoFPI) is making all efforts toencourage investments in the business. This sector is among the few that serves as a vitallink between the agriculture and industrial segments of the economy. A thrust to the foodprocessing sector implies significant development of the agriculture sector and ensuresvalue addition to it.
b. Business Overview:
The Company has achieved a turnover of Rs. 13926.82 Lakhs (previous year Rs. 13493.86Lakhs) for the financial year ended 31.03.2020 with a net profit of Rs. 46.14 Lakhs(previous year Rs. 47.24 Lakhs).
c. Opportunities: As stated earlier your Company has completed its expansion whichresulted in increase in production and is looking to commission Silos for blending andbulk supply of whole wheat flour.
d. No risk is expected during this year.
e. Outlook: The Company will strive for Bette rValues.
f. Internal Control System:
The Company has an effective control system to commensurate with its operations. TheCompany has internal audit system through outside agency with qualified CharteredAccountant carries out the audit based on a planned program. The audit also reviews theadequacy and effectiveness of the internal control system and the follow up action takenpursuanttoauditobservation.
g. Human Resource Development:
The Company conducts regular training programs both internally and externally forEmployees at all levels to improve the skills and overall development. Employees'relations at all the levels continue to remain cordial.
6. MATERIAL CHANGES AND COMMITMENTS:
There were no material changes and commitments which occurred affecting the financialposition of the Company between 31st March 2020 and the date on which thisreport has been signed.
7. CHANGE IN THE NATURE OF BUSINESS:
There were no changes in the nature of business during the year under review asprescribed in Rule 8(ii) of the Companies (Accounts) Rules 2014.
8. EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:
There are no material changes after 31s1 March 2020 till the signing ofthis Report.
Due to certain uncertain environment and prevailing conditions in order to preservefunds within the Company your Directors decided that no Dividend shall be declared forthe Financial year2019-20.
The Board has not proposed to transfer any amount to its reserves.
11. SHARE CAPITAL:
The paid up Equity Share Capital as on 31s1 March 2020 was Rs. 300.29Lakhs. During the financial year under review the Company has not issued shares withdifferential voting rights nor granted Stock Options nor Sweat Equity.
12. CAPITAL INVESTMENTS:
Capital Investments during the Financial year 2019-20 was at Rs. 383.70 Lakhs (Net ofcapital work-in-progress and capital advances).
13. 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.
14. RISK MANAGEMENT:
The Company has formulated a Risk Management Policy and a mechanism to inform the Boardabout risk assessment and mitigation procedures. The Company also undertakes periodicalreview to ensure that executive management controls risks by means of a properly designedframework.
15. 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 (ListingObligations and Disclosure Requirements) Regulations 2015 which is available on websiteof the Company at http://sunilaqro.in/wp- content/uploads/2019/08/whistle-blower-policv.pdf and there were no cases reported during last year.
16. INFORMATION ABOUT THE FINANCIAL PERFORMANCE / FINANCIAL POSITION OF THESUBSIDIARIES / ASSOCIATES/ JV:
The Company does not have any Subsidiary Joint Venture or Associate Company.
17. DIRECTORS AND KEY MANAGERIAL PERSONNEL:
In terms of the provisions of the Companies Act 2013 and the Articles of Associationof the Company Mr. Pramod Kumar Shantilal (holding DIN: 00719828) Whole Time Directordesignated as Chief Executive Officer and Director retires by rotation at the forthcomingAnnual General Meeting and is eligible for re appointment. Mrs. Garima Garg resigned fromthe Office of Company Secretary and Compliance Officer with effect from 9th August2019 due to personal reasons.
Further based on the recommendations of the Nomination and Remuneration Committee theBoard appointed Ms. Shruthi Murali Kumar as the Company Secretary and Compliance Officer(KMP) of the Company with effect from 241h January 2020.
Mr. Akshat Jain was appointed as an Additional Director and Whole-time Director of theCompany w.e.f 1st June 2019 by the Board of Directors based on therecommendation of Nomination and Remuneration Committee. The said appointment was approvedat the last AGM held on 19th September 2019.
18. 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 and the maximum time gap between 2 (two) meetings did not exceedone hundred and twenty days. The details of the Board Meetings were held on 29h May2019 9h August 2019 14h November 2019 and 24lhJanuary 2020.
Details of the attendance at Board Meetings and at the AGM held during the year are asfollows:
| || |
Board Meetings details
|Attendance at Last |
|Name of the Director ||Held ||Attended ||AGM on 19.09.2019 |
|Mr. B Shantilal ||4 ||4 ||Yes |
|Mr. Pramod Kumar S ||4 ||4 ||Yes |
|Mr. AVS Murthy ||4 ||4 ||Yes |
|Mrs. Pinky Jain ||4 ||4 ||Yes |
|Mr. Akshat Jain* ||4 ||2 ||Yes |
*Mr. Akshat Jain was appointed as an Additional Director and Whole-time Director of theCompany w.e.f 1s1 June 2019.
19. BOARD COMMITTEES:
I. AUDIT COMMITTEE
During the year under review 4 (four) meetings were held on 29th May 20199th August 2019 141h November 2019 and 24h January2020.
|Name of the Member ||Nature of Membership ||No. of Meetings held ||Attendance |
|Mr. AVS Murthy ||Chairman ||4 ||4 |
|Mrs. Sarika Bhandari ||Member ||4 ||3 |
|Mr. Pramod Kumar S ||Member ||4 ||4 |
II. NOMINATION AND REMUNERATION COMMITTEE
During the year under review 3 meetings were held on 29th May 2019 9 thAugust 2019 and 24th January 2020.
|Name of the Member ||Nature of Membership ||No. of meetings held ||Attendance |
|Mrs. Sarika Bhandari ||Chairman ||3 ||2 |
|Mrs. Pinky Jain ||Member ||3 ||3 |
|Mr. AVS Murthy ||Member ||3 ||3 |
III. STAKEHOLDERS' RELATIONSHIP COMMITTEE
During the year under review one meeting was held on 9th August 2019
|Name of the Member ||Nature of Membership ||No. of meetings held ||Attendance |
|Mr. AVS Murthy ||Chairman ||1 ||1 |
|Mr. Sarika Bhandari ||Member ||1 ||1 |
|Mrs. Pinky Jain ||Member ||1 ||1 |
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 / she meets the criteria ofIndependence laid down in Section 149(6) of the Companies Act 2013 and Regulation 25 ofthe SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 (SEBI (LODR)Regulations 2015) as Annexurel.
All the Independent Directors have also confirmed under Regulation 16(b) of SEBI (LODR)Regulations 2015 that they are not Non-Independent Director of another Company on theBoard of which any Non-Independent Director of the listed entity is an IndependentDirector.
21. 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) the directors had 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 and loss of the company for that period
(c) the directors had taken proper and
sufficient care for the maintenance of adequate accounting records in accordance withthe provisions of this Act for safeguarding the assets of the company and for preventingand detecting fraud and other irregularities;
(d) the directors had prepared the annual accounts on a going 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 with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
22. INTERNAL FINANCIALCONTROL:
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.
23. 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.
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 31s1 March 2020.
25. INDUSTRIAL RELATIONS:
The industrial relations of the Company have been cordial.
26. AMOUNT TRANSFERRED TO RESERVES:
During the financial year the Company has not transferred any amount to the Reserves.
27. RELATED PARTYTRANSACTIONS:
The particulars of contracts or arrangements with related parties referred to inSection 188(1) of the Companies Act 2013 for the Financial Year 2019-20 in the prescribedformat AOC 2 is enclosed as Annexure - III as a part of this Annual Report.
28. PARTICULARS OF LOANS GIVEN INVESTMENTS MADE GUARANTEES
GIVEN OR SECURITY PROVIDED BY THE COMPANY:
The details of loans guarantees and investments under Section 186 of the CompaniesAct 2013 read with the Companies (Meetings of Board and its Powers) Rules 2014 are asfollows:
Current/Non-Current Investments: Rs. 655885/-
The Company has neither given any loan nor issued any guarantees in accordance withSection 186 of the Companies Act 2013 read with the Rules issued there under.
29. DISCLOSURE RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDPARTICULARS OF EMPLOYEES:
There are no Directors/Employees who were in receipt of the remuneration as prescribedunder Section 197 of the Companies Act 2013 read with Companies (Appointment andRemuneration) of Managerial Personnel Rules 2014 during the year under review and henceannexure required under the said Section is not attached.
The Company's policy relating to appointment of directors payment of managerialremuneration directors' qualifications positive attributes independence of directorsand other related matters as provided under Section 178(3) of the Companies Act 2013 isplaced on the website of the Company at
30. MEETING OF INDEPENDENT DIRECTORS:
The Independent Directors of the Company had met on 2 4111 January 2020during the year to review the performance of Non-Independent Directors and the Board as awhole to review the performance of the Chairman of the Company and Non-ExecutiveDirectors and other items as stipulated under the Listing Regulations. The IndependentDirectors have also declared their independence.
31. ANNUAL EVALUATION OF THE PERFORMANCE OF THE BOARD ITS COMMITTEES AND OF INDIVIDUALDIRECTORS:
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees and individual Directors pursuant to the provisions of the CompaniesAct 2013.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors based on criteria such as Board structure and composition formation anddelegation of responsibilities to Committees Board processes and their effectivenessdegree of effective communication with the stakeholders.
The performance of the Board Committees was evaluated by the Board after seeking inputsfrom the Committee members based on criteria such as Committee composition structureeffectiveness of Committee Meetings.
Independent Directors of the Company provided their views on performance ofNon-Independent Directors and the Board as a whole considering the views of ExecutiveDirectors and NonExecutive Directors.
Your Board has evaluated the Independent Directors and confirms that all IndependentDirectors fulfilled the independence criteria as specified in SEBI Listing Regulations andtheir independence from the management.
Messrs GRV & PK Chartered Accountants Bangalore (Firm Registration No. 008099S)were appointed in the Annual General Meeting held on 21st September 2017 fora consecutive term of five years from the conclusion of 29h Annual GeneralMeeting till the Conclusion of 34h Annual General Meeting.
Remuneration Details (2019-20):
(Amount in Rupees)
|Statutory Audit ||268635/- |
|Taxation Audit Fee ||50000/- |
|Limited Review Fee ||45000/- |
|Total ||363635/- |
Qualifications in the Audit Report:
The Company has not made provisions for Bad debt of Rs 9756685/- in case of onedebtor Maiyas Beverage and Foods Private Limited which was referred to NCLT under IndianBankruptcy Code and NCLT has passed the order on 10th May 2019. As per NCLT order only15.14% amount is payable to all the Sundry Creditors of Maiyas Beverage and Foods PrivateLimited. Company's total outstanding against Maiyas Beverage and Foods Private Limited atthe time of referral to NCLT stood Rs.11497390/-. Due to this Company's profit andSundry debtors are overstated by Rs.9756685/.
It is understood that certain creditors of Maiyas Beverages and Foods Private Limitedhave preferred appeals against the Order dated 101h May 2019 of the NationalCompany Law Tribunal Bangalore Bench before the National Company Law Appellate TribunalNew Delhi which have been admitted. Since the aforesaid Order has not been implementedthe Company has deemed it fit not to make any provisions.
33. 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 Bangalore Practising Company Secretary to undertakethe Secretarial Audit of the Company. The Report of the Secretarial Auditor is annexed as Annexure- IV to this Report.
34. RECEIPT OF ANY COMMISSION BY MD / WTD FROM A COMPANY OR FOR RECEIPT OF COMMISSION /REMUNERATION FROM ITS HOLDING OR SUBSIDIARY
No Director has received any commission from your Company or from Holding or SubsidiaryCompany.
35. 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.
36. LISTING WITH STOCK EXCHANGES:
The Company confirms that it has paid the Annual Listing Fees for the Financial year2019-2020 to BSE Limited where the Company's Shares are listed.
37. 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.
38. 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. TheCompany has also installed energy efficient meters controlling waste of power.
2. Additional investments and proposal being implemented for reduction and consumptionof 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's earnings in foreign currency is nil during the year under review.However there had been expenses amounting to Rs. 784493/-.
39. 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 2019-20:
No of complaints received: NIL No of complaints disposed: NIL No. of complaintspending: NIL
40. INVESTORS EDUCATION AND PROTECTION FUND:
Pursuant to the applicable provisions of the Companies Act 2013 read with the IEPFAuthority (Accounting Audit Transfer and Refund) Rules 2016 (the IEPFRules) all unpaid or unclaimed Dividends are required to be transferred by theCompany to the IEPF established by the Government of India after the completion of sevenyears. Further according to the Rules the Shares on which Dividend has not been paid orclaimed by the Shareholders for seven consecutive years or more shall also be transferredto the Demat account of the IEPF Authority.
During the year under review there were unclaimed amounts amounting to Rs. 47688.50/-required to be transferred to IEPF account.
41. REPORTING OF FRAUD:
The Auditors of the Company have not reported any fraud as specified under Section143(12) of the Companies Act 2013. Further no case of Fraud has been reported to theManagement from any other sources.
42. COMPLIANCE WITH THE APPLICABLE SECRETARIALSTANDARDS:
The Company has complied with Secretarial Standards issued by the Institute of CompanySecretaries of India on Board Meetings and Annual General Meetings.
43. MAINTENANCE OF COST RECORDS:
Maintenance of Cost Records as specified by the Central Government under Sub-Section(1) of Section 148 of the Companies Act 2013 is not applicable to the Company.
44. CODE OF CONDUCT:
The Board of Directors has already adopted the Code of Ethics and Business Conduct forthe Directors and Senior Management personnel. This code is a comprehensive codeapplicable to all Directors Executive as well as Non - executive and members of theSenior Management. The Code has been circulated to all the members of the Board and SeniorManagement Personnel and compliance of the same has been affirmed by them. A declarationgiven by the Managing Director is attached as Annexure-VI of the Board ofDirector's Report.
The Company has adopted a Code of Conduct for Prevention of Insider Trading with a viewto regulate trading in securities by the Directors and designated employees of theCompany.
The Directors place on record their appreciation for valuable contribution made byemployees at all levels active support and encouragement received from the 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 on behalf of the Board of Directors
|Shantilal Bansilal ||Pramod Kumar S |
|Managing Director ||Chief Executive Officer |
|DIN:00719808 ||& Director |
|No.10 Kamal Nivas ||DIN:00719828 |
|Srikantaiah Layout ||No.10 Kamal Nivas |
|Crescent Cross Road ||Srikantaiah Layout |
|Bengaluru - 560 001 ||Crescent Cross Road |
| ||Bengaluru - 560 001 |
|Place : Bengaluru || |
|Date : 22nd June 2020 || |