UFM Industries Ltd.
|BSE: 531610||Sector: Agri and agri inputs|
|NSE: N.A.||ISIN Code: INE832E01010|
|BSE 05:30 | 01 Jan||UFM Industries Ltd|
|NSE 05:30 | 01 Jan||UFM Industries Ltd|
|BSE: 531610||Sector: Agri and agri inputs|
|NSE: N.A.||ISIN Code: INE832E01010|
|BSE 05:30 | 01 Jan||UFM Industries Ltd|
|NSE 05:30 | 01 Jan||UFM Industries Ltd|
Your Directors have pleasure in presenting the 35thAnnual Report of theCompany together with the Audited Balance Sheet as at 31st March 2021 and the Statementof Profit & Loss for the year ended on that date.
The highlights of the financial performance of the Company for the financial year ended31st March 2021 as compared to the previous financial year are as underpin Lakhs)
INDIAN ECONOMY AND INDUSTRY AT A GLANCE
The year 2020 threw at the world a bedlam of novel COVID-19 virus threatening all thatwas taken for granted -mobility safety and a normal life itself. This in turn posedthe most formidable economic challenge to India and to the world in a century. Bereft of acure or a vaccine public health policy became central to tackling this all-pervasivecrisis. The imperative of flattening the disease curve was entwined with the livelihoodcost of an imminent recession which emanated from the restrictions in economic activitiesfrom the lockdown required to contain the pandemic. This inherent trade-off led to thepolicy dilemma of "lives versus livelihoods."
Governments and central banks across the world deployed a range of policy tools tosupport their economies such as lowering key policy rates quantitative easing measuresloan guarantees cash transfers and fiscal stimulus measures. India recognized thedisruptive impact of the pandemic and charted its own unique path amidst dismalprojections by several international institutions of the spread in the country given itshuge population high population density and an overburdened health infrastructure.
The year 2020 witnessed unrivalled turmoil with the novel COVID-19 virus and theresultant pandemic emerging as the biggest threat to economic growth in a century. TheWorld Health Organization (WHO) declared COVID-19 a 'Public Health Emergency ofInternational Concern' (PHEIC) on 30th January 2020 and advised that all countries shouldbe prepared for containment including active surveillance early detection isolation andcase management contact tracing and prevention of onward spread. The exponential rise inthe number of daily cases compelled the WHO to title this outbreak a pandemic on 11thMarch 2020 - within a period of three months of its emergence. The contagion is stillspreading with over 10 crore confirmed cases around the globe and over 2 lakh deaths. Theensuing shock has been extremely unconventional in terms of its size and uncertainty withits impact dependent on unpredictable factors like intensity of lockdowns extent ofsupply chain and financial market disruptions alongside societal response to theassociated public health measures. The pandemic has been unique in its wide-rangingeffects on almost every section of the economy and the society.
The Indian food industry is poised for huge growth increasing its contribution toworld food trade every year due to its immense potential for value addition particularlywithin the food processing industry. The Indian food and grocery market is the world'ssixth largest with retail contributing 70 per cent of the sales.
OPERATIONS AND PERFORMANCE REVIEW
During the year under review your Company manufactured 38109.20 MT of flour (AttaMaida Suji Bran and Wheat) as against 33181.94 MT in previous Financial Year.Similarly your Company has been able to achieve sales volume of 37444.69 MT of flour(Atta Maida Suji Bran) as against 32910.19 MT in previous Financial Year.
PRODUCTION AND COST DEVELOPMENTS
During the year under review your company has been pursing with bulk consumers likebiscuit noodles and bakery segments to make contract agreements. However we are hopefulof positive result in the next financial year. This will enable us to ramp up production.Logistics is becoming a major cost factor and we have to constantly change our strategy tominimize this cost.
In the coming years India is expected to achieve the ambitious goal of doubling farmincome by 2022. Increased investment activities such as irrigation facilities warehousingand cold storage in agricultural infrastructure are likely to generate better momentum.Furthermore the growing use of genetically modified crops will likely improve the yieldfor Indian farmers.
Going forward the adoption of food safety and quality assurance mechanisms such asTotal Quality Management (TQM) including ISO 9000 ISO 22000 Hazard Analysis and CriticalControl Points (HACCP) Good Manufacturing Practices (GMP) and Good Hygienic Practices(GHP) by the food processing industry will offer several benefits
The paid up Equity Capital as on March 31 2021 was Rs. 59326000/-. During the yearunder review the Company has neither issued any shares with differential voting rightsnor granted stock options or sweat equity shares.
EXTRACT OF ANNUAL RETURN
In terms of requirement of section 134 (3) (a) of the Companies Act 2013 the extractof the Annual return in form MGT-9 is annexed herewith and marked Annexure-1.
MEETINGS OF THE BOARD
The Board meets at regular intervals to discuss and decide on the policies andstrategies with respect to the business of the Company apart from normal business. TheBoard generally meets at least once in every quarter to review the Quarterly results.Additional meetings are held as and when necessary.
All the meetings are scheduled well in advance and notices are sent to all theDirectors at their address registered with the Company. The agenda of the meeting arebacked by necessary supporting information and documents to enable the Board to takeinformed decisions. Agenda also includes minutes of the meetings of all the BoardCommittees for the information of the Board. Additional agenda items in the form of"Other Business" are included with the permission of the Chairman. Draftsminutes of the proceedings of the Board/Committee Meetings are circulated in advance andcomments if any received from the Directors are incorporated in the minutes inconsultation with the Chairman. The Board periodically reviews compliance reports of alllaws applicable to the Company. Information about major events/items is placed before theBoard and approval of the Board is taken on all such matters wherever such approval isrequired. Senior executives of the Company are invited as and when required to provideadditional inputs or clarifications required on agenda items being discussed in the BoardMeeting.
During the year four (4) Board Meetings of the Company were convened and held on 29thApril
2020 30th July 2020 15th September 2020 21stDecember 2020 29th January 2021 and 13th February 2021. Theintervening gap between the Meetings was within the period prescribed under the CompaniesAct 2013.
The Attendance at the Board Meetings during the financial year 2020-2021 and at theprevious Annual General Meeting is as under:
MEETINGS OF INDEPENDENT DIRECTORS
During the year under review meeting of Independent Directors was held on 13thFebruary 2021 wherein the performance of the Non-Independent Directors and the Board as awhole was reviewed. The Independent Directors at their meeting also inter alia assessedthe quality quantity and timeliness of flow of information between the Company managementand the Board of Directors of the Company.
COMMITTEES OF THE BOARD
Currently the Board has three Committees: Audit Committee Nomination and RemunerationCommittee and Stakeholders Relationship Committee. The terms of reference of theseCommittees are determined by the Board and subject to be reviewed from time to time.Meetings of each of these Committees are convened by the respective Chairman of theCommittee who also informs the Board about the summary of discussions held in theCommittee Meetings.
a. Audit Committee
The Audit Committee met 4 (four) times during the Financial year 2020-2021 The AuditCommittee's composition meets the requirements of Section 177 of the Companies Act 2013and SEBI Regulations. The Members of the Audit Committee possess financial/ accountingexpertise/ exposure. The meetings were held on 30th July 2020 15thSeptember 2020 29th January 2021 and 13th February 2021. All themembers of the Committee attended the meeting.
The Audit Committee comprises of the following members:
Audit Committee meetings are attended by the Chief Finance Officer of the Company andRepresentatives of Statutory Auditors. The Company Secretary acts as the Secretary of theAudit Committee.
There has been no instance where the Board has not accepted the recommendations of theAudit Committee and Nomination and Remuneration Committee.
b. Nomination and Remuneration Committee
The Nomination and Remuneration Committee determines on behalf of the Board andshareholders as per agreed terms of reference the Company's policy on specificremuneration packages for Executive Directors Key Managerial Personnel and otheremployees. The Chairman of the Committee is an Independent Director and the Members of theCommittee are Non - Executive Directors.
The Nomination and Remuneration Committee met on 30th July 2020 during thefinancial year 2020-21. All the members of the Committee attended the meeting.
The composition of the Nomination and Remuneration Committee as at 31st March 2021 isas under:
c. Stakeholders' Relationship Committee
In compliance with the provisions of Section 178 of the Companies Act 2013 and theSEBI Regulations the Board has constituted "Stakeholders' RelationshipCommittee".
The Committee's responsibility is to oversee Share Transfers and addressing to andredressal of shareholders' grievances etc. The Committee also evaluates performance andservice standards of the Registrar and Share Transfer Agents of the Company.
During the Financial Year 2020-21 no meeting of Stakeholders Relationship Committeewas held. The Composition of the Stakeholders Relationship Committee is given below:
WHISTLE BLOWER POLICY/ VIGIL MECHANISM
The Company has formed a Whistle Blower Policy/ Vigil Mechanism as required underSection 177 of the Companies Act 2013 and SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015. A Vigil (Whistle Blower) mechanism provides a channel tothe employees and Directors to report to the management concerns about unethical behavioractual or suspected fraud or violation of the Codes of conduct or policy. The mechanismprovides for adequate safeguards against victimization of employees and Directors to availof the mechanism and also provide for direct access to the Chairman of the Audit Committeein exceptional cases. The said policy may be referred to at the Company's website at theweb link:http://ufmindl.weebly.com/uploads/8/7/1/1/8711000/whistle blower policy.pdf
POLICY ON APPOINTMENT AND REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDSENIOR MANAGEMENT EMPLOYEES
The Board has framed a Remuneration Policy for selection appointment and remunerationof Directors Key Managerial Personnel and Senior Management Employees. The remunerationpolicy aims to enable the company to attract retain and motivate highly qualified membersfor the Board and at other executive levels. The remuneration policy seeks to enable theCompany to provide a well-balanced and performance-related compensation package takinginto account shareholders' interests industry standards and relevant Indian corporateregulations. The details on the same are given in the Corporate Governance Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to requirement of Section 134 (3) (c) read with section 134 (5) of theCompanies Act 2013 the Directors hereby confirm and state that:
In the preparation of Annual Accounts the applicable Accounting Standards havebeen followed along with the proper explanation relating to material departures if any.
The Directors have selected such accounting policies and have applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company as at 31st March 2021and of the profit of the Company for the year under review.
The Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities.
The Directors have prepared the annual accounts ongoing concern basis.
The Directors have devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.
The Directors have laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
DECLARATION BY INDEPENDENT DIRECTORS
All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013. Mr. DeepakLadia and Mr. Poonam Chand Deedwania are Independent Directors on the Board of yourCompany. In the opinion of the Board and as confirmed by these Directors they fulfil theconditions specified in section 149 of the Act and the Rules made thereunder about theirstatus as Independent Director of the Company.
FAMILIARIZATION PROGRAMME UNDER TAKEN FOR INDEPENDENT DIRECTORS
In order to enable the Independent Directors to perform their duties optimally theBoard has devised a familiarization programme for the Independent Directors to familiarisethem with the Company their roles rights responsibilities in the Company nature of theindustry in which the Company operates business model of the Company etc. They areperiodically updated about the development which takes place in the Company. TheIndependent Directors have been issued Letter of Appointment setting out in detail theterms of appointment duties responsibilities and commitments etc. The familiarizationprogram is available on the Company's website under the weblink:http://ufmindl.weebly.com/uploads/8/7/1/1/8711000/familiarization programme.pdf
AUDITORS & AUDITORS' REPORT
M/s. P. A. Agarwal & Co. Chartered Accountants (Firm Registration no. 327316E)Statutory Auditors of the Company have been appointed by the members at the Thirty FirstAnnual General Meeting and shall hold office for a period of 5 years from the date of suchmeeting held on 26 th September 2017.
The notes to the accounts referred to in the Auditors' Report are self-explanatory andtherefore do not call for any further comments.
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Ms. Sushma Jain a Company Secretary in Practice to undertake the SecretarialAudit of the Company for the F.Y.-2020-2021. The Secretarial Audit Report is annexedherewith marked Annexure-2. The report is self-explanatory and do not call for anyfurther comments.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
During the year under review your company has not given any loan or guarantee to anyperson falling under ambit of Section 186 of the Companies Act 2013.
Details of Investments covered under the provisions of Section 186 of the CompaniesAct 2013 are given in the notes to the Financial Statements.
RELATED PARTY TRANSACTIONS
All related party transactions are entered on arm's length basis in the ordinarycourse of business and are in compliance with the applicable provisions of the CompaniesAct 2013. There are no materially significant related party transactions made by theCompany with Promoters Directors Key Managerial Personnel or other designated personswhich may have a potential conflict with the interest of the Company at large.Accordingly no transactions are being reported in Form AOC-2 in terms of Section 134 ofthe Act read with Rule 8 of the Companies (Accounts) Rules 2014. However the details ofthe transactions with the Related Party are provided in the Company's financial statementsin accordance with the Accounting Standards.
All Related Party Transactions are presented to the Audit Committee and the Board.Omnibus approval has been obtained for the transactions which are foreseen and repetitivein nature. A statement of all related party transactions is presented before the AuditCommittee on a quarterly basis specifying the nature value and terms and conditions ofthe transactions.
A policy on 'Related Party Transactions' has been devised by the Company which may bereferred to at the Company's website at the web linkhttp://ufmindl.weebly.com/uploads/8/7/1/1/8711000/related party policy.pdf
During the year under review no amount was transferred to reserves.
In order to conserve resources for future operations your Directors do not recommendany dividend for the Financial Year 2020-21.
ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo as stipulated in section 134 (3) (m) of the Act and rules framed thereunder is mentioned below:
(A) Steps taken toward Conservation of energy:
Improvement is seen in power factor.
Study has been undertaken for installation of VFD (Variable Frequency Drive)with high capacity motors. We shall take up once we are satisfied with the result.
Study for installation of solar PV module is also under discussion.
(B) Steps taken toward Technical Absorption:
Lab has been enhanced and training session conducted to ramp up testing offinished product and hygiene in production area.
(C) Foreign Exchange Earnings and Outgo
During the period under review there was no Foreign Exchange Earnings and Outgo.
Pursuant to the provisions of the Companies Act 2013 and the Listing Regulations theBoard has carried out the annual evaluation of its own performance its Committees andDirectors individually. A structured questionnaire was prepared after circulating thedraft forms covering various aspects of the Board's functioning such as adequacy of thecomposition of the Board and its Committees Board culture execution and performance ofspecific duties obligations and governance.
A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.
The performance evaluation of the Independent Directors was completed. The performanceevaluation of the Chairman and the Non-Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.
The Directors expressed their satisfaction over the evaluation process and resultsthereof. DIRECTORS AND KEY MANAGERIAL PERSONNEL
In accordance with the provisions of Companies Act 2013 and in terms of the Memorandumand Articles of Association of the Company Mr. Avishek Jain will retire by rotation andbeing eligible offers herself for re-appointment. In view of his considerable experienceyour Directors recommend his re-appointment as Director of the company.
There has not been any appointment/ retirement/ resignation of Key Managerial Personnelduring the financial year ended 31st March 2021.
HOLDING SUBSIDIARY ASSOCIATE AND JOINT VENTURE
The Company does not have any Holding Subsidiary Associate and Joint Venture.
During the year under report the Company has not accepted any deposits from public orfrom any of the Directors of the Company or their relatives falling under ambit of Section73 of the Companies Act 2013.
CHANGES IMPACTING GOING CONCERN STATUS AND COMPANY'S OPERATIONS
During the year under review there have been no material orders passed by theRegulators/Courts impacting materially the going concern status or future operations ofthe Company.
There were no material changes and commitments affecting the financial position of theCompany during the period under review.
ADEQUACY OF INTERNAL FINANCIAL CONTROL
Internal Control Systems are designed to ensure the reliability of financial and otherrecord and accountability of executive action to the management's authorization. TheStatutory Auditors have evaluated the system of internal controls of the Company and havereported that the same are adequate and commensurate with the size of the Company andnature of its business.
The internal control systems are reviewed by the top Management and by the AuditCommittee of the Board and proper follow up action ensured wherever required.
INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company has in place adequate internal financial controls commensurate with thesize scale and complexity of its operations. During the year such controls were testedand no reportable material weakness in the design or operations were observed.
MANAGERIAL REMUNERATION AND PARTICULARS OF EMPLOYEES
The information required under Section 197 (12) read with Rule 5(1) of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 along with a statementcontaining particulars of employees as required under Section 197 of Companies Act 2013read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed herewith and marked Annexure- 3 and forms part ofthis report.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
The Company has adopted a 'Policy on Prevention of Sexual Harassment' as per the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013("Sexual Harassment Act"). We affirm that adequate access has been provided toany complainants who wish to register a complaint under the policy. No complaint wasreceived during the year.
NON-APPLICABILITY OF CORPORATE GOVERNANCE PROVISIONS OF SEBI (LISTING OBLIGATIONS ANDDISCLOSURE REQUIREMENTS) REGULATIONS 2015:
Pursuant to the provisions of Regulation 15(2) of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 compliance with the provisions 17 to 27 andclauses (b) to (i) of sub-regulation 46 and Para C D and E of Schedule V of the CorporateGovernance are not applicable to the Companies having paid up equity share capital notexceeding Rs. 10 Crore and Net Worth not exceeding Rs. 25 Crore as on the last day ofprevious financial year or on the Companies listed on SME Exchange.
In view of above as per the latest Audited Financial Statements of the Company as atMarch 31 2021 the paid-up Equity Share Capital and the Net Worth of the Company does notexceed the respective threshold limit of Rs. 10 Crore and Rs. 25 Crore as aforesaid;hence compliance with the aforementioned provisions of the Corporate Governance are notapplicable to the Company
CODE OF CONDUCT
In pursuance of the SEBI Regulations the Board has approved the 'Code of Conduct forBoard of Directors and Senior Management' and same has been posted on the Company'swebsite www.ufmindl.weebly.com. The Directors and Senior Management personnel haveaffirmed compliance with the provisions of above Code of Conduct. The declaration by theManaging Director to this effect is also attached to this Report.
CHIEF EXECUTIVE OFFICER (CEO) /CHIEF FINANCIAL OFFICER (CFO) CERTIFICATION
As required under Regulation 17(8) of the Listing Obligations and DisclosuresRequirements formulated by Securities and Exchange Board of India (SEBI) the CEO/CFOcertification has been submitted to the Board and a copy thereof is contained in thisAnnual Report.
HUMAN RESOURCE DEVELOPMENT & INDUSTRIAL RELATIONS
The Company recognizes the need for continuous growth and development of its employeesin order to provide greater job satisfaction and also to equip them to meet growingorganizational challenges.
During the year under review there has not been any material change in humanresources industrial relations and number of people employed.
GREEN INITIATIVES IN CORPORATE GOVERNANCE
Ministry of Corporate Affairs has permitted Companies to send copies of Annual reportNotices etc. electronically to the email IDs of shareholders. Your Company has arrangedto send the soft copies of these documents to the registered email IDs of theshareholders wherever applicable. In case any shareholder would like to receive physicalcopies of these documents the same shall be forwarded upon receipt of written request inthis respect.
Statements in this report describing the Company's objectives expectations orpredictions may be forward looking within the meaning of applicable securities laws andregulations. Actual results may differ materially from those expressed in the statement.Important factors that could influence the Company's operations include global anddomestic demand and supply conditions affecting selling prices of finished goods inputavailability and prices changes in Government regulations tax laws economicdevelopments within the country and other incidental factors. The Company assumes noresponsibility to publicly amend modify or revise any forward-looking statements on thebasis of any subsequent developments events or information.
Your Directors take this opportunity to express their deep sense of gratitude to theBanks Central and State Governments and their departments and the Local AuthoritiesCustomers Vendors Business partners/ associates and Stock Exchanges for their continuedguidance and support.
Your Directors would also like to place on record their sincere appreciation for thecommitment dedication and hard work put in by every member of the Company and recognizetheir contribution towards Company's achievements. Your Directors express their gratitudeto the shareholders of the Company for reposing their confidence and trust in theManagement of the Company.
For and on behalf of the Board of Directors