sita shree food products ltd Directors report
BOARD’S REPORT
To,
The Members,
Sita Shree Food Products Limited Indore
Your Board of Directors has immense pleasure in presenting the 22ndAnnual Report of your Company along with the Audited Financial Statements for the Financial Year ended on 31st March, 2018. Further, in compliance with the Companies Act, 2013 the Company has made requisite disclosures in this Board’s Report with the objective of accountability and transparency in its operations to make you aware about its performance and future perspective of the Company.
1.1 FINANCIAL RESULTS AND STATE OF COMPANY’S AFFAIR AND CHANGE IN THE NATURE OF BUSINESS:
The Board’s Report is prepared based on the financial statements of the company for the year ended March 31, 2018 is summarized below:
| (Rs. In Lacs) | ||
| Particulars | 2018 | 2017 |
| Income from operation | (385.87) | 14827.48 |
| Profit/loss before providing Depreciation and Interest | (1070.41) | (14549.06) |
| Less: Depreciation | 571.55 | 567.93 |
| Interest | 2418.19 | 2540.95 |
| Profit/loss Before Exceptional & Extraordinary Items | (4060.15) | (17657.94) |
| Less: Exceptional Items | - | - |
| Profit/loss Before Taxation | (4060.15) | (17657.94) |
| Less: Provision for Current Taxation | - | - |
| Deferred Tax Liability | (803.19) | (1026.17) |
| Profit /Loss after Taxation | (3256.96) | (16631.77) |
The Company had started its journey in capital market segment in 2008 by an IPO and listed its securities at National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The company has diversified its business in due course of time and started its Soya Re nery (Solvent Extraction Plant). All the products, different segments, including performance and business environment thereof have been covered in detail in the Management Discussion and Analysis Report separately which is annexed as ANNEXURE III with this report and shall form part of the Board’s report.
1.2 WORKING PERFORMANCE REVIEW:
Due to huge losses and liabilities the income goes negative during the financial year from Rs. 14827.48Lacs to Rs.(385.87)Lacs and resulting in net loss of Rs. 3256.96 Lacs against the loss of Rs. 16631.77 Lacsin the previous year. Company is having loss of Rs. 4060.15 Lacs before the tax. Financial position of the Company is suffering from heavy losses and acute shortage of working capital fund. Credit facilities with Banks and NBFCs are classified as NPA. No production activities during the year and both the plants of the Company are remain idle during maximum days in the year. Networth of the Company is fully eroded during the year due to losses. Notice u/s 13 (2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 dated 02.07.2018, has been issued by the State Bank of India, due to failed to repay the dues/outstanding liabilities. Turnover of the company is negative during the year due to sales return ofRs. 9.33 crore.Your Directors are trying hard to control the situation with dedicated efforts of the management and with improving ability to source raw materials required from multiple sources in a timely and cost effective manner.
The Company is engaged in the business of wheat, soya and pulses products manufacturing and by products of agro commodities in local as well as international market. In manufacturing activity of our division turnover is Rs. (4.86)Lakhs as compare to Rs.65.60 Crores of previous year similarly for soya division sales of manufacturing activity is Rs.(4.17)Crores as compare to Rs. 71.31Crores of previous year. In Grading & Processing activity of our division turnover is Rs .Nil as compare to Rs.7.53 Crores of previous year. Further, the detailed performance covered in the Management Discussion and Analysis Report separately which is annexed as ANNEXURE IIIwith this report and shall form part of the Board’s report.
1.3 CHANGES IN NATURE OF BUSINESS
There is no change in the nature of business of the Company during the financial year 2017-18.
1.4 SHARE CAPITAL:
The paid up equity capital as on March 31, 2018 was Rs. 608,341,740/-.
1.5 REVISION IN FINANCIAL STATEMENTS
In terms of section 131 of the Companies Act, 2013, the Financial Statements and Board’s Report are in compliance with the provisions of section 129 or section 134 of the act and that no revision has been made during any of the three preceding financial years.
2. RESERVES:
No amount has been proposed by the Board to carry to any reserves.
3. DIVIDEND:
The Company being in loss this year and in view of requirements of regular funds for operations, your directors is unable to recommend any dividend for the Financial Year ended on March 31, 2018.
4. DEPOSITS:
The Company has neither accepted nor invited any deposit from the public and hence directives issued by Reserve Bank of India and the provisions of Chapter V (Acceptance of deposits by Companies) of the Companies Act, 2013 and rules framed there under are not applicable for the year.
However company is having unsecured loan of Rs.3,49,47,332/-as on 31.03.2018from Directors of the company for which proper declaration has been furnished by them as requiredunder Rule 2(viii) of the Companies (Acceptance of Deposits) Rules, 2014 during the period under review.
5. MATERIAL CHANGES AND COMMITMENTS AFTER THE END OF FINANCIAL YEAR UPTO THE DATE OF THIS REPORT:
Notice u/s 13 (2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 dated 02.07.2018, has been received from State Bank of India, due to failed to repay the dues/outstanding liabilities. Therefore, the SBI led consortium, through its leader State Bank of India issued notice to discharge in full liabilities within 60 days from the date of the notice and also liable to pay future interest at the contractual rate on the amount due together with incidental expenses costs, charges, etc.
M/s M.P. Turakhia& Associates, Cost Accountants in whole time Practice has been appointed as Cost Auditor to conduct audit of the Cost Accounts maintained by the Company relating to "Edible Oil (Soya) & Soya Lecithin Powder/Liquid" for the Financial Year 2017-18 on August 14th, 2018as recommended by the Audit Committee and subject to the approval/ ratification by the members.
M/s P.S. Tripathi & Associates, Company Secretaries has been appointed as Secretarial Auditor to conduct the audit of Secretarial and related documents of the Company and give the Secretarial Audit Report as per provisions of section 204 of the Companies Act, 2013 and rules made thereunder.
Except than the matters stated above no material changes and commitments affecting the financial position of the company which have occurred between the end of the financial year of the company to which the financial statements relate and the date of this report.
6. HIGHLIGHTS OF PERFORMANCE OF ASSOCIATE COMPANIES AND THEIR CONTRIBUTION TO OVERALL PERFORMANCE OF THE COMPANY:
As per the Companies Act, 2013 and as on date the company is neither having any Subsidiary Company u/s 2(87)nor any Associate Company u/s 2(6) and hence, do not call for any disclosure under this head.
7. EXTRACT OF THE ANNUAL RETURN:
In compliance with section 92(3), section 134 (3) (a) and rule 11 of the Companies (Management and Administration) Rules, 2014 the extract of the annual return in Form No. MGT 9 which is annexed as ANNEXURE Iwiththis report and shall form part of the Board’s report.
8. BOARD AND COMMITTEE MEETINGS:
During the years under review various meetings of the Board of Directors and Committees was held for various purposes which are in compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into by the Company with Stock Exchange(s). Further the details of the various meetings of the Board and Committees are mentioned in the Report on Corporate Governance which is annexed as ANNEXUREIVwith this report and shall form part of the Board’s report.
9. DIRECTORS’ RESPONSIBILITY STATEMENT:
Pursuant to Section 134 (5) of the Companies Act, 2013, the Directors, based on representation received from the operating management and after due enquiry, confirm in respect of the audited financial accounts for the year ended March 31st, 2018:
a) That in preparation of the annual accounts, the applicable accounting standards had been followed and that there were no material departures;
b) That the Directors had, in consultation with the Statutory Auditors, selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the year ended March 31st, 2018 and the profit and loss Account of the Company for that period;
c) That the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) That the Directors had prepared the annual accounts on a going concern basis;
e) That the directors have laid down internal financial controls to be followed by the company and such internal financial controls are adequate and were operating effectively; and
f) That the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.
10.1 CHANGES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:
During the year under report Mr. Dinesh Agrawal, Chairman cum Director of the Company would retire by rotation at the forthcoming Annual General Meeting of the Company. Proposals for their re-appointment have been included in the Notice of Annual General Meeting for your approval.
During the year under review Mr. Ganesh Prasad Sharma, Independent Director of the Company has resigned w.e.f. 30.05.2017 due to his pre-occupancies; the Board places its appreciation for the services rendered by him during his tenure.
During the year under review Mr. MannalalSethi, Non-Executive Director of the Company has resigned w.e.f. 30.05.2017 due to his pre-occupancies; the Board places its appreciation for the services rendered by him during his tenure.
During the year under review Mr. Sunil Kumar Garg, Independent Director of the Company has resigned w.e.f. 15.02.2018due to his pre-occupancies; the Board places its appreciation for the services rendered by him during his tenure.
Ms. Vipenjeet Kaur Banger, Company Secretary and Compliance Officer of the Company have been resigned from her post due to herpre-occupancies. The Board thereby accepted herresignationw.e.f. 12.03.2018 and places on record its appreciation for the services provided by her during hertenure as the Company Secretary of the Company.
All the intimations pertaining to the appointments and resignations made during the year has been given to Stock Exchange (s) where the shares of the Company are listed and also the relevant records are duly updated with the Registrar of Companies, Gwalior (M.P.), wherever required.
10.2 DISCLOSURE OF DECLARATION FOR DISQUALIFICATIONS BY DIRECTORS:
As per the declaration received in Form ‘DIR-8’ pursuant to section 164(2) of the Companies Act, 2013 and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014, none of the Directors of the Company is disqualified from being appointment as Directors.
11.1 APPOINTMENT/RE-APPOINTMENT OF INDEPENDENT DIRECTORS:
All the Independent Directors are well appointed in the Board of the Company in compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 entered into by the Company with Stock Exchange(s). Further that all independent directors shall hold office for a term up to ve consecutive years on the Board of a Company, but shall be eligible for reappointment for next ve years on passing of a special resolution by the Company and disclosure of such appointment in the Board’s report.
11.2 DISCLOSURE OF DECLARATION FOR INDEPENDENCE BY INDEPENDENT DIRECTORS:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence under sub-section (6) of section 149of the Companies Act, 2013.
11.3 FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS:
The Directors had been introduced to all the Board members and the senior management personnel such as Chief Financial Officer, Company Secretary and Various Department heads individually to know their roles in the organization and to understand the information which they may seek from them while performing their duties as a
Director. And meeting had also been arranged for Independent Directors with aforesaid officials to better understand the business and operation of the Company. As part of continuous updating and familiarization with the Company, every Independent Director had been taken for visits to the factory or manufacturing units and other branch of the company where officials of various departments apprise them of the operational and sustainability aspects of the plants to enable them to have full understanding on the activities of the Company and initiatives taken on safety, quality etc. The Company may also circulate news and articles related to the industry from time to time and may provide specific regulatory updates.The company has also organized Familiarization Programme for Independent directors. The details of such programmes for Independent Directors are posted on the website of the company and can be accessed at http://sitashri.com/docs/policies/familiarization_prog_det.pdf
11.4 SEPARATE MEETING OF INDEPENDENT DIRECTORS:
As mandated by Clause VII of Schedule IV of the Companies Act, 2013, a separate meeting of Independent Directors was held on31st of March, 2018.
11.5 EVALUATION BY INDEPENDENT DIRECTORS:
The Independent Directors in their meeting has reviewed the performance of Non-Independent directors and Board as a whole including reviewing the performance of the Chairperson of the company taken into account the views of Executive Directors and Non-Executive Directors. The said policy including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been laid down under Nomination, Remuneration and Evaluation Policy given in the Report on Corporate Governance which is annexed as ANNEXURE IV with this report and shall form part of the Board’s report.
12. POLICIES:
We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value system. The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Companies Act, 2013 has mandated the formulation officertain policies for all listed companies. All our corporate governance polices are available on our website (http://sitashri.com/index.php/shareholder-desk/policies).The policies are reviewed periodically by the board and updated on need and new compliance requirement.
| Name of the Policy | Brief Description | Web Link |
| Nomination Remuneration and Evaluation Policy | This policy formulates the criteria for determining qualifications, positive attributes, independence of the Directors and recommends to the Board a Policy, relating to the remuneration for the Directors, Key Managerial Personnel and other employees | http://sitashri.com/docs/policie s/nomination.pdf |
| Policy for determining materiality of event | The policy applies for disclosures of material events affecting company and its associates. | http://sitashri.com/docs/policie s/policy_determining_materiali ty_events.pdf |
| Corporate Social Responsibility Policy | The policy outlines the Company’s strategy to bring about a positive impact on society through programs relating to hunger, poverty, education,healthcare environment and lowering its resource footprint. | http://sitashri.com/docs/policie s/csr_policy.pdf |
| Policy on document preservation | The policy outlines that the Company intends to safeguard significant documents and preserve them to ensure durability of documents including documents in electronic form. | http://sitashri.com/docs/policie s/document_preservation.pdf. |
| Related Party Transactions Policy | The policy regulates all transactions between the Company and its related parties. | http://sitashri.com/docs/policie s/related_party.pdf http://sitashri.com/docs/policie s/whistle_blower.pdf |
| Whistle Blower and Vigil Mechanism Policy | The policy outlines the whistleblower mechanism for directors and employees to report concerns about unethical behavior, actual or suspected fraud or violation of the Company’s code of conduct and ethics. | http://sitashri.com/docs/policie s/policy_on_prevention.pdf http://sitashri.com/docs/policie s/risk_management.pdf |
| Policy on prevention of sexual harassment at workplace | The policy that the Company provides an equal employment opportunity and is committed to creating a healthy working environment that enables employees to work without fear of prejudice, gender bias and sexual harassment. | http://sitashri.com/docs/policie s/policy_determining_material _subsidiary.pdf. |
| Risk Management Policy | The policy that builds a strong risk management culture to better understand a risk pro le and to better manage the uncertainties. | http://sitashri.com/docs/policie s/risk_management.pdf |
| Policy for determining Material Subsidiary | The Policy is framed to determine material subsidiary. | http://sitashri.com/docs/policie s/policy_determining_material _subsidiary.pdf. |
13. NOMINATION AND REMUNERATION COMMITTEE AND STAKEHOLDERS RELATIONSHIP
COMMITTEE:
The Board of Directors of your Company hadre-constituted the Nomination and Remuneration Committee and Stakeholders Relationship Committee with the requisite terms of reference as required under Section 178 of the Companies Act, 2013 and other applicable provisions thereof;
The constitutions of the said committees are as under:
Nomination and Remuneration Committee
| Name | Designation |
| Mr. Sunil Kumar Garg | Chairman |
| Mr. Ganesh Prasad Sharma | Member |
| Mr. Mannalal Sethi | Member |
| Mr. Ankit Magare3 | Member |
| Mr. Lucky Mevati | Chariman |
| Mrs. Archana Shukla | Member |
1Resigned from the Board and Chairmanship w.e.f. 15.02.2018 2Resigned from the Board w.e.f. 30.05.2017 3Appointed as director and committee member w.e.f. 20.05.2017 4 Appointed chairman w.e.f 15.02.2018 5 Appointed committee member w.e.f. 15.02.2018
Stakeholders Relationship Committee
| Name | Designation |
| Mr. Sunil Kumar Garg | Chairman |
| Mr. Ganesh Prasad Sharma | Member |
| Mr. Mannalal Sethi | Member |
| Mr. Ankit Magare | Member |
| Mr. Lucky Mevati | Chariman |
| Mrs. Archana Shukla | Member |
1Resigned from the Board and Chairmanship w.e.f. 15.02.2018 2Resigned from the Board w.e.f. 30.05.2017 3Appointed as director and committee member w.e.f. 20.05.2017 4 Appointed chairman w.e.f 15.02.2018 5Appointed committee member w.e.f. 15.02.2018
14. DISCLOSURE IN TERMS OF NOMINATION AND REMUNERATION POLICY:
The Board of Directors of your Company had constituted the Nomination and Remuneration Committee with the requisite terms of reference as required under section 178 of the Companies Act, 2013. The said Committee framed, adopted and recommended the "Nomination, Remuneration & Evaluation Policy" and the said policy has been approved by the Board. The Details of the Nomination and Remuneration Committee and the said Policy given in the Report on Corporate Governance which is annexed as ANNEXURE IV with this report and shall form part of the Board’s report and at the and at the website of the company www.sitashri.com.
15.1 AUDITORS:
(i) Statutory Auditors:
As M/s Dilip K Neema& Associates, Chartered Accountants, has resigned from the office of Statutory Auditor of the Company on 16.05.2018, due to preoccupation and unavoidable circumstances. Therefore, pursuant to provisions of Section 139 of the Act and the Rules made thereunder, M/s Vinay Gandhi & Associates, Chartered Accountants (FRN: 014442C), has been recommended by audit committee and appointed by the Board on 24.05.2018 to ll the casual vacancy caused by resignation of M/s Dilip K Neema& Associates and to do the audit for the Financial Year 2017-18 which was subject to the approval of shareholders.
Further, on being eligible the audit committee of the Company has proposed, the Board has recommended the appointment of M/s Vinay Gandhi & Associates, Chartered Accountants (FRN: 014442C), as the Statutory Auditor of the Company to conduct Statutory Audit for a period of 5 (Five) consecutive years and to hold the office from the conclusion of this Annual General Meeting till the conclusion of Annual General Meeting for the financial year 2022-2023. Proposal for their appointment have been included in the Notice of Annual General Meeting for your approval.
(ii) Cost Auditors:
M/s. M. P. Turakhia& Associates, Cost Accountants were appointed as Cost Auditors for auditing the cost records of your Company for the financial year 2017-18 by the Board of Directors on a consolidated remuneration of Rs. 40,000/- only, the remuneration was recommended by the Audit Committee of the Company. Further, the remuneration proposed to be paid to them requires ratification of the shareholders of the Company and in views of the same the proposal for the ratification of appointment and remuneration have been included in the Notice of Annual General Meeting for your approval.
(iii) Secretarial Auditor:
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 has appointed Mr. Pratik Tripathi partner of M/s. P. S. Tripathi& Associates, a rm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company
(iv) Internal Auditor:
The Company has appointed M/s RGS Verma& Company, Chartered Accountants, as the internal auditor of the Company w.e.f. 14.12.2016as per section 138 of the Companies Act, 2013 and rules made there under to take charge of the Internal Audit function, but due to their preoccupation they have resigned during the year. The Company has not appointed Internal Auditor during the year.
15.2 AUDITOR’S REPORT/ SECRETARIAL AUDIT REPORT:
The Statutory Auditors of the Company, M/s Vinay Gandhi& Associates, Chartered Accountants, have submitted the Auditor’s Report which has observation on Standalone Financial Statements for the period ended March 31, 2018.
MANAGEMENT ‘S EXPLANATION TO THE AUDITOR’S QUALIFICATION S/ OBSERVATIONS:-
1) Auditors’ Qualification in the Standalone Auditor’s Report
(i) The company is not regular in depositing undisputed & disputed statutory dues including Provident Fund Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities and we have been noticed that there are following arrears of outstanding statutory dues as at the last day of the financial year under Audit for a period of more than six months from the date they became payable as on 31.03.2018.
| S.NO. | STATUTORY LIABILITIES | AMOUNT |
| 1 | INTEREST ON TAX | 694077 |
| 2 | PF PAYABLE | 245512 |
| 3 | PROFESSIONAL TAX EMPLOYEE | 145400 |
| 4 | DIVERSION TAX | 383370 |
| 5 | SERVICE TAX PAYABLE | 37195 |
| 6 | TDS | 1960847 |
| 7 | WORK CONTRACT TAX | 600 |
Explanation:
Company is facing acute financial dif culties to meet its obligation at all fronts including statutory dues. Board is trying hard to pay the aforesaid liabilities as early as possible.
2) Auditors’ Qualification in the Standalone Auditor’s Report
According to the information and explanations given to us, the Company has defaulted in repayment of term loan installment as well as interest on various credit facilities obtained by the company from banks and other financial institution. Banks& loan accounts of the company have been classified as NPA by Banks. The Company doesn’t have any borrowing by way of debentures from government.
Explanation:
Company is facing acute financial dif culties and due shortage of working capital and non-receipt of permission from bank regarding holding of operation in account, Company is not able to run the plants of the Company. Directors are regularly in touch with the Banker to nd out the solution and start the production again.
3) Auditors’ Qualification in the Standalone Auditor’s Report
Entire Net worth of the company has been eroded and the company suffers heavy losses. The accumulated losses is Rs.168,18,80,075/- as compared to Equity capital of company Rs. 27,83,41,740/-.
Explanation:
Net worth is eroded Company due to losses of the Company.
Further no fraud has been reported by the auditors under sub section(12) of section 143 of the Companies act, 2013.
As required under section 204 (1) of the Companies Act, 2013 the Company has obtained a secretarial audit report which is annexed as ANNEXURE VII with this report and shall form part of the Board’s report. Further, certain observations made in the report, which are mentioned below alongwith explanations thereto:
Secretarial Auditors’ Qualification in Secretarial Audit Report
Point No. 2(a):-
Company has not led Financial Statement and Annual Return of the company for F.Y. 2015-16 and 2016-17.
Explanation:-
We are trying to ratify this non compliance as soon as possible.
Point No. 2(b):-
Filing of E-Forms w.r.t. allotment and change in Authorized Share Capital in F.Y. 2015-16, F.Y.2016-17 and Payment of stamp duty yet to be done
Explanation:-
The Company is under process to le the related forms and related payments and it will be done at the earliest.
Point No. 2(c):-
B.S.E. and N.S. E. Listing fee is pending for the financial year 2017-18& 2018-19.
Explanation:-
We have done part payment of listing fee for the financial year 2017-18 and we will pay rest part payment of listing fee and payment of financial year 2018-19 as soon as possible.
Point No. 2(d):-
During the year company has not appointed Chief Executive officer/Managing Director in the Board of the Company.
Explanation:-
Management shall strive for appointment of Chief Executive officer/ Managing Director as soon as possible.
Point No. 2(e):-
Company has delay in lling of quarterly compliances to B.S.E. and N.S.E. of quarter ended March 2018and the penalty has been charged by the exchanges which is yet to be paid:-
Penalty imposed by N.S.E.:-
| Clause No. | Quarter | Due date | Submission date | No. of days non compliance | Fine Amount |
| Clause 31 | 31.03.2018 | 23.04.2018 | 03.05.2018 | 10 | Rs. 10000/- |
Explanation:-
Company has yet to paid penalty fordelay in lling of quarterly compliances toN.S.E. due to financial crisis and we will take care in future.
Point No. 2(f):-
There are some instances where newspaper publication regarding Notice of Board Meeting /submission of unaudited financial result has been delayed.
Explanation:-
We will take care in future.
Point No. 2(g):-
The Company has not led Form CRA -4 regarding cost audit report for the financial year 2017-18 to the ROC.
Explanation:-
We are trying to ratify this noncompliance as soon as possible.
Point No. 2(h):-
The Company has not led Form MGT -14 regarding approval of Annual financial statement for the financial year 2017-18 to the ROC.
Explanation:-
We are trying to ratify this noncompliance as soon as possible.
Point No. 2(i):-
The Company has notcomplied section 139 of the Companies Act, 2018 regarding appointment of Statutory Auditor in case of casual vacancy of in the office of the auditor and failed to convened general meeting within three months of the recommendation of the Board.
Explanation:-
The same has been ratified in this annual general meeting and included in the resolutions above for the members approval. We will take care in future.
Point No. 2(j):-
The Company has delayed in reporting to exchange regarding Notice received u/s 13 (2) of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 dated 02.07.2018, has been received from State Bank of India, due to failed to repay the dues/outstanding liabilities.
Explanation:-
We will take care in future
Point No. 2(k):-
The Company has not appointed Internal Auditor as per section 138 of the Companies Act, 2013 during the year 2017-18.
Explanation:-
Management shall strive for appointment of Internal Auditor as soon as possible.
Point No. 2(l):-
The whole time Company Secretary of the Company has been resigned w.e.f. 12.03.2018, no new appointment has been made by the Company till date.
Explanation:-
Management shall strive for appointment of Company Secretary as soon as possible.
Point No. 2(m):-
Members of the Audit Committee are not adequately qualified as per Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Explanation:-
In the opinion of the Board, Audit Committee members have adequate knowledge.
Point No. 2(n):-
The Company has failed to spend two percent of the average netp ro t oft he lastt hree financial years or any part thereof which required to be spent under CSR activities asper section 135 of CompaniesAct, 2013 for the financial year 2015-16.
Explanation:-
Due to the continuous requirements of funds for the business operations of the Company and due to increased interest burden, the Company couldn’t spend the amount which was required to be spent.
Point No. 5 (a):-
F.Y. 2015-16 audit period the company has issued and allotted Preference Shares on preferential basis due to stipulation of Banker by conversion of unsecured loan but lling of related forms with ROC is yet to be done.
Explanation:-
We are trying to ratify this noncompliance as soon as possible.
Point No. 5 (d):-
Company has defaulted in payment of statutory dues relating to direct and indirect taxes.
Explanation:-
Company is facing acute financial dif culties to meet its obligation at all fronts including statutory dues.
Board is trying hard to pay the aforesaid liabilities as early as possible.
Point No. 5 (e):-
Show Cause Notice has been issue for violation under section 137 read with section 129 and 92 of the Companies Act, 2013 for the financial year 2015-16 and 2016-17.
Explanation:-
Due to continues financial crisis Company has not led annual return and financial statement to the ROC as per section 129 and 92 of the Companies Act, 2013 for the financial year 2015-16 and 2016-17. We are trying to ratify this noncompliance as soon as possible
Point No. 5 (f):-
Prosecution has been initiated against the company and its director for non ling of Cost Audit Report within the time prescribed under sub-section (6) of section 148 of the Companies Act, 2013 for the financial year 2014-15.
Explanation:-
The form has been led dated 31.08.2016 with additional fee and explanation has also sent to ROC. Further, we regret for delay caused in ling Cost Audit Report and the same will be taken care of.
16. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS U/S 186:
The company has not given any loans or guarantees covered under the provisions of section 186 of the Companies Act, 2013.
The details of the investments held by company are given in the notes to the financial statements.
17. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIESU/S 188:
The related party transactions are entered into based on considerations of various business exigencies, such as synergy in operations, sectoral specialization and the Company’s long-term strategy for sectoral investments, optimization of market share, profitability, liquidity and capital resources of its group companies.
All transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm’s length basis. However, Company has not entered into any contract or arrangement during the year. During the year, the Company has entered into transactions with related parties which were material in accordance with Clause 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and with the policy of the Company on Related Party Transactions. Attention of members is drawn to the disclosure of transactions with related parties have been reported in sub notes attached to the accounts which are forming part of this Annual Report. Further, details of transactions entered as per section 188 of the Companies Act, 2013, are mentioned in ANNEXURE II which forms part of this report. The company has adopted a Policy on Related Party Transaction which is available on the website of the Company and can be accessed at http://sitashri.com/docs/policies/related_party.pdf.
18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO:
(A) Conservation of energy-
(i) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.
(ii) No specific investment has been made in reduction in energy consumption.
(iii) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.
(B) Technology absorption-
(i) Companys products are manufactured mostly by using indigenous technology and no outside technology is being used for manufacturing activities other than mentioned in (iii) below;
(ii) The company has no specific research & development expenditure during the year;
(iii) Imported Technology
(C) Foreign exchange earnings and Outgo-
| S. No. PARTICULAR | 2017-18 (Rs. in Lacs) | 2016-17 (Rs. in Lacs) |
| 1 Foreign Exchange Earning (CIF Value of goods Export) | 32.94 | 1309.55 |
| 2 Foreign Exchange Out Go | 0 | 906.54 |
19. BUSINESS RISK MANAGEMENT:
The Board of Directors of the Company state that risk associated in the ordinary course of business is duly taken care by the board while taking business decisions. However, the constitution of Risk Management Committee is not applicable to the company, butcompany has framed the policy for Risk Management and uploaded the same onwebsite of the company, athttp://sitashri.com/docs/policies/risk_management.pdf.
20. CORPORATE SOCIAL RESPONSIBILITY (CSR):
In terms of section 135 and Schedule VII of the Companies Act, 2013, the Board of Directors of your Company has constituted a CSR Committee. The Committee comprises of three (3) directors out of which1 (one)isIndependent Director. The full particulars of CSR Committee and CSR Policy developed by the CSR Committee which is approved by the Board is given in the Report on Corporate Governance and Annual Report on CSR Activities which is annexed as ANNEXURE V and ANNEXURE IX with this report and shall form part of the Board’s report. Additionally, the CSR Policy has been uploaded on the website of the Company and can be accessed athttp://sitashri.com/docs/policies/csr_policy.pdf.
| Corporate Social Responsibility Committee | |
| Name | Designation |
| Mr. Dinesh Agrawal | Chairman |
| 1 | |
| Mr. Mannalal Sethi | Member |
| 2 | |
| Mr. Sunil Kumar Garg | Member |
| 3 | |
| Mr. Lucky Mevati | Member |
| 4 | |
| Mrs. Archana Shukla | Member |
1 Resigned w.e.f. 30.05.2017
2 Resigned from the Board w.e.f 15.02.2018
3 Appointed as Member w.e.f. 20.05.2017
4Appointed as Member w.e.f. 15.02.2018
Further, the Annual Report on CSR Activities is annexed herewith as Annexure VIII.
21. FORMAL ANNUAL EVALUATION:
Pursuant to section 134 (3) (p) of Companies act 2013 and rule 8(4) of Companies (Accounts) Rules, 2014 and clause 17(10) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of its Committees as per the criteria laid down in the Nomination, Remuneration and Evaluation policy. The said policy including above said criteria for the evaluation of the Board, individual directors including independent directors and the committee of the board has been given in the Report on Corporate Governance which is annexed as ANNEXURE IV with this report and shall form part of the Board’s report.
22. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:
During the year under review no significant and material order was passed by the Regulators or Courts, which may affect the going concern status of the company.
23. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Company has a proper internal control system, which provides adequate safeguards and effective monitoring of the transactions and ensures that all assets are safeguarded and protected against loss from unauthorized use or disposition.
Moreover, the audit committee of the Company comprising of all independent directors regularly reviews the audit plans, adequacy of internal control as well as compliance of accounting standards.
Also the CFO has the responsibility for establishing and maintaining internal controls for financial reporting and that they also have the overall responsibility to evaluate the effectiveness of internal control systems of the company pertaining to financial reporting and they have to disclose to the auditors and the Audit Committee, de ciencies in the design or operation of such internal controls, if any, of which they are aware and the steps they have taken or propose to take to rectify the de ciencies.
24. AUDIT COMMITTEE:
The Audit Committee comprises of Three (3) directors all of whom are Independent Directors.
| Name | Designation |
| Mr. Ganesh Prasad Sharma | Member |
| Mr.Mannalal Sethi | Member |
| Mr. Sunil Kumar Garg | Chairman |
| Mr. Lucky Mevati | Chairman |
| Mr. AnkitMagare | Member |
| Mrs. Archana Shukla | Member |
1 Resigned from the boardw.e.f. 30.05.2017
2 Appointed w.e.f 14.12.2016 and Resignedw.e.f. 30.05.2017
3 Resigend from the Board the effect from 15.02.2018
4 Appointed as Chairmanw.e.f.15.02.2018
5 Appointed as member w.e.f.15.02.2018
The Board has considered all recommendations of the Audit Committee as and when provided during the year under review and hence, do not call for any disclosure under Section 177(8) of the Companies Act, 2013.
25. DISCLOSURE IN TERMS OF VIGIL MECHANISM:
The Company believes in the conduct of its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behavior. The Company is committed to develop a culture in which every employee feels free to raise concerns about any poor or unacceptable practice and misconduct. In order to maintain the standards the company has adopted and lays down this Whistle Blower Policy to provide a framework to promote responsible and secure whistle blowing.
The Board of Directors of your Company has adopted the Vigil Mechanism and Whistle Blower Policy in compliance of Companies Act, 2013 and Clause 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Details of the Policy is given in the Report on Corporate Governance which is annexed as ANNEXURE IV with this report and shall form part of the Board’s report and the said policy has already been uploaded on the website of the company and it can be accessed athttp://sitashri.com/docs/policies/whistle_blower.pdf.
26. COMMISSION RECEIVED BY DIRECTORS FROM HOLDING AND SUBSIDIARY:
During the year under review neither theManaging Director nor Whole time Director is in receipt of commission from the company and also has not received any remuneration or commission from any holding or subsidiary company of company u/s 197(14).
27. MANAGERIAL REMUNERATION:
Disclosures Pursuant to Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
1. The ratio of the remuneration of each director to the median remuneration of the employees of the company for the financial year;
| S. No. | Name | Designation | CTC | Median Employee Salary | Ratio |
| 1. | Dinesh Agrawal | Chairman and CFO | - | - | - |
| 2. | Ganesh Prasad Sharma | Independent Director | - | - | - |
| 3. | Sunil Garg | Independent Director | - | - | - |
| 4. | Lucky Mevati | Independent Director | - | - | - |
| 5. | Ankit Magare | Independent Director | - | - | - |
| 6. | Archana Shukla | Non-Executive Director | - | - | - |
1Resigned w.e.f. 30.05.2017
2Resigned w.e.f. 15.02.2018
3Appointed as director w.e.f. 20.05.2017
2. The percentage increase in remuneration of each director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year;
| S. No. | Name | Designation | Remuneration paid in FY 2016-17 | Remuneration paid in FY 2017-18 | Change | Percentage (%) |
| 1. | Dinesh Agrawal | Chairman and CFO | - | - | - | - |
| 2. | Ashish Goyal | Managing Director | 900000 | - | 900000 | 100 |
| 3. | Anoop Goyal | Whole-time Director and CFO | 900000 | - | 900000 | 100 |
| 4. | Ganesh Prasad Sharma | Independent Director | - | - | - | - |
| 5. | Mannalal Sethi | Non-Executive Director | - | - | - | - |
| 6. | Sunil Garg | Independent Director | ||||
| 7. | Lucky Mevati | Independent Director | - | - | - | - |
| 8. | Ankit Magare | Independent Director | - | - | - | - |
| 9. | ArchanaShukla | Non-Executive Director | - | - | - | - |
| 10. | Chitrangda | |||||
| Vishwakarma | Company Secretary | 96605 | - | - | - | |
| 11. | Vipenjeet Kaur Banger | Company Secretary | 76500 | 145532 | - | - |
1Salary given for 3 months i.e. April, May & June 2016 and Mr. AshishGoyal resigned w.e.f. 14.12.2016 & Mr. AnoopGoyal resigned w.e.f. 17.09.2016
2Salary given for 6 months w.e.f. date of appointment i.e. 01.10.2015 and Resigned w.e.f 17.05.2016 3Salary given upto16.11.2016 i.e. date of resignation 4Salary given w.e.f. date of appointment i.e. 14.12.2016 upto 12.03.2018
The company is having net loss during the current financial year i.e. 2017-18.The remuneration of the KMPs are duly reviewed on annual basis keeping in mind the tenure, the past performance and current performance.
3. The percentage decrease in the median remuneration of employees in the financial year was85.46%;
4. The number of permanent employees on the rolls of company as on 31.03.2018was
5. 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;
| Remuneration paid to employees excluding managerial personnel for the 2016-17 | Remuneration paid to employees excluding managerial personnel for the 2017-18 | % Change in remuneration paid to employees excluding managerial personnel | Remuneration paid to managerial personnel for the FY 2016-17 | Remuneration paid to managerial personnel for the FY 2017-18 | % Change in remuneration paid to managerial personnel |
| 7362066 | 1048869 | -85.75% | 1973105 | 145532 | -92.62% |
Further there are no exceptional circumstances for increase in the managerial remuneration.
6. During the year under review no variable component of remuneration availed by Directors of the Company;
7. It is hereby afirmed that the remuneration paid by the Company to its Directors, KMP’s and Employees during the year under review is as per the Nomination, Remuneration & Evaluation Policy of the company.
28. EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS:
The company has not issued any shares with differential voting rights and accordingly the provisions ofSection 43 read with Rule 4(4) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.
29. DETAILS OF SWEAT EQUITY SHARES:
The company has not issued any sweat equity sharesand accordingly the provisions of Section 54 read with Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.
30. DETAILS OF EMPLOYEES STOCK OPTION SCHEME:
The company has not granted stock options and accordingly the provisions of Section 62(1)(b) read with Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 of the Companies Act, 2013 and rules framed there under are not applicable for the year.
31. DISCLOSURE OF VOTING RIGHTS NOT EXCERCISED:
The company has not made any provision of money for the purchase of, or subscription for, shares in the company or its holding company, if the purchase of, or the subscription for, the shares by trustees is for the shares to be held by or for the Benefit of the employees of the company and accordingly the provisions of Chapter IV (Share Capital and Debentures) of the Companies Act, 2013 and rules framed there under are not applicable for the year.
32. EMPLOYEES:
Employee’s relation continued to be cordial throughout the year. Your Directors wish to place on record their sincere appreciation for the excellent spirit with which the entire team of the Company worked at factory and office premises and achieved commendable progress.
During the year under review, none of the employee has received remuneration of Rs. Eight Lakh and Fifty Thousand per month or Rs. One Crore TwoLacs per year or 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 pursuant to Section 197 (12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence, do not call for any further details referred to in Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
33. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORT:
Report on Corporate Governance and Management Discussion and Analysis Report, in terms of Clause 34read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed as ANNEXUREIVandANNEXURE III respectively with this report and shall form part of the Board’s report.
A certificate from the Auditors confirming compliance with the conditions of Corporate Governance is also annexed as
ANNEXURE VI.
34. PAYMENT OF LISTING FEES:
Annual listing fee for the year 2017-18 and 2018-19 has been pendingby the Company to BSE and NSE.
35. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:
The Board of Directors of the Company has approved and adopted the "Policy on Prevention of Sexual Harassment at Workplace" to provide equal employment opportunity and is committed to provide a work environment that ensures every woman employee is treated with dignity and respect and afforded equitable treatment. The Company has formed an Internal Complaints Committee where employees can register their complaints against sexual harassment. This is supported by the Sexual Harassment Policy which ensures a free and fair enquiry process with clear timelines.
36. PAYMENT OF DEPOSITORY FEES:
Annual Custody/Issuer fee for the year 2018-19 has not been paid by the Company to NSDL and CDSL.
37. DEMAT STATUS:
The company’s shares are presently held in both electronic and physical modes.
38. DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:
Subsidiary Company:
The Company neither has any Subsidiary Company as on date of this report as de ned u/s 2(87) of the Companies Act, 2013 nor any company became or ceased to be its Subsidiary Company during the year under review.
Associate Company:
The Company neither has any Associate Company as on date of this reportas de ned u/s 2(6) of the Companies Act, 2013nor any company became or ceased to be its Subsidiary Company during the year under review.
Joint Ventures:
The Company neither has any Joint Ventures as on date of this report nor any company became or ceased to be in Joint Venture during the year under review.
39. TRANSFER TO INVESTORS EDUCATION & PROTECTION FUND:
As per the provisions of section 125 of the Companies Act, 2013 and as per rule 3 of the Investor Education & Protection fund (awareness and protection of investors) Rules, 2001,the Company has transferred the amount of Rs. 6000.00/- lying in the Refund Account for the year 2008-09 after expiry of Seven (7) years from the date of transfer to the said A/c.
40. CODE OF FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION AND CODE OF CONDUCT UNDER SEBI (PROHIBITION OF INSIDER TRADING) REGULATIONS, 2015
Pursuant to Regulation 8 of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 the Board of Directors has formulated and adopted the "Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information" (Code of Fair Disclosure) of the Company.
The Board has also formulated and adopted "Code of Conduct for Prohibition of Insider trading" (Code of Conduct) of the Company as prescribed under Regulation 9 of the said Regulations.
41. ACKNOWLEDGEMENTS:
Your Directors wish to place on record their appreciation for and gratitude to the Union Bank of India,State Bank of India, Canara Bank, Andhra Bank, Axis Bank for their valuable support and co-operation.
Your directors also wish to place on record their appreciation of the wholehearted and continued support extended by the shareholders, investors, employees and workers of the company which had always been a source of strength for the Company.
| For and on behalf of the Board of Directors of | |
| Sita Shree Food Products Limited |
| Sd/- | Sd/- | |
| Dinesh Agrawal | Lucky Mevati | |
| Indore | Chairman Cum Director | Director |
| Date: 28.08.2018 | DIN: 00348853 | DIN:07793340 |
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ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.