Sarda Proteins Ltd Directors Report.

To

The Members,

Your directors are pleased to present the 27th Annual Report together with the audited annual financial statements along with Auditors Report thereon for the financial year ended March 31, 2018.

1. FINANCIAL HIGHLIGHTS

The Companys Financial Highlights for the Financial Year ended on March 31, 2018 is summarized below:

Amount in Rs.lakhs

Particulars F.Y. 2017-18 F.Y. 2016-17
SALES 563.19 610.61
Other Income 2.03 7.42
Expenses 600.92 635.71
Profit/(Loss) before (35.74) (17.68)
Depreciation and Extra
Ordinary Income
Depreciation 1.11 1.45
Extra Ordinary Income - -
Profit/(Loss) before Taxes (36.81) (19.14)
Provision for Taxes (3.73) (5.93)
Net Profit/(Loss) (33.08) (13.21)

2. FINANCIAL PERFORMANCE

The Company is engaged in distribution of edible oils. The net receipts from operations during the year under review were Rs. 563.19 Lakhs as against Rs. 610.61 Lakhs in the previous year, and expenditure incurred is Rs. 600.92 Lakhs as against Rs. 635.71 Lakhs in the previous year. The Loss after tax is Rs. 33.08 Lakhs as against loss of Rs. 13.21 Lakhs in the previous year. Due to adverse market scenario the company could not achieve the expected results, however your directors expects that the company will achieve new heights in the ensuing year.

3. DIVIDEND

Considering the losses incurred by the Company, your Directors regret their inability to recommend any dividend for the financial year 2017-18.

4. CAPITAL STRUCTURE

During the Financial Year 2017-18, there was no change in capital structure of the Company and paid up Share capital of the Company stands at Rs. 1,72,59,000/- (Rupees One Crore Seventy Two Lakhs Fifty Nine Thousand) and a balance of Rs.77,86,000.00 in Share Forfeiture Account on account of forfeiture of 15,57,200 Equity Shares in earlier years.

5. TRANSFER TO RESERVES

No amount is proposed to be transferred to the reserves of the Company for financial year 2017-18.

6. LOANS, GUARANTEES AND INVESTMENTS IN SECURITIES BY THE COMPANY

Particulars of Loans given and investment made by the company during the year are provided in Notes to the Financial Statements under note no. 9 and 10.

Further, the company has not given guarantee to any company, body corporate and person(s) during the year under review.

7. RELATED PARTY TRANSACTIONS

As per the requirement under Section 188 of the Companies Act, 2013 and Regulation 23(8) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, there were no materially significant related party transactions made by the Company.

Accordingly, the disclosure of Related Party Transactions as required under Section 134(3) (h) of the Companies Act, 2013, in Form AOC-2 is not applicable.

8. FIXED DEPOSITS

During the year under review, the Company has neither invited, nor accepted or renewed any fixed deposit within the meaning of Section 73 and 76 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

9. DETAILS OF SUBISIDIARY/ JOINT VENTURES/ ASSOCIATE COMPANIES AND THEIR PERFORMANCE

Your company has no Subsidiary/Joint Ventures/ Associate Companies.

10. LISTING OF SECURITIES

At present the Equity shares of the company are listed and traded with Scrip Code: 519242 at BSE Limited and the listing fee for the year 2018-19 has been duly paid. The company had applied for delisting to Calcutta Stock Exchange Association Limited on 02.09.2003 and has not paid any listing fees since then and neither received any communication from the said exchange in this matter.

11. NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the year under review, 4 (Four) Board Meetings were held on 27.05.2017, 10.08.2017, 11.11.2017 and 05.02.2018.

The frequency of board meetings and quorum at such meetings were in accordance with the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") and compliances of Secretarial Standards-1 on Meeting of the Board of Directors issued by ICSI. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the Listing Regulations.

12. DECLARATION OF INDEPENDENCE BY DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of Independence as prescribed under section 149(7) of the Companies Act, 2013 in respect of their position as an "Independent Director" of the Company.

13. DIRECTORS AND KEYMANAGERIALPERSONNEL

(A) DIRECTORS

Re-Appointment of Whole-Time Director Mr. Damodar Prasad Sarda

During the year under review, Mr. Damodar Prasad Sarda (DIN: 00763377), was re-appointed as Whole-Time-Director by the Board of Directors in their meeting held on 28th January, 2017 for a period of three (3) years w.e.f. 01 February, 2017 to 31st January, 2020, and subsequently his reappointment was approved by the shareholders in 26th AGM of the Company held on 16.09.2017.

Retirement of Director by rotation.

Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mrs. Krishna Devi Sarda (DIN:07100074), Non-executive Director of the Company, who was retired and being eligible, was re-appointed with the approval of members at the Annual General Meeting held on 16.09.2017.

Further, in accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Siddharth Sarda (DIN:07100074), Whole-Time-Director of the Company shall retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment.

(B) KEY MANAGERIAL PERSONNEL:

During the year under review, there was no change in the KMP. However, Mrs. Priya Gupta, Company Secretary cum Compliance Officer of the company has ceased to be associated with the company w.e.f. 30.06.2018.

Further, Mr. Varun Motwani was appointed as the Company Secretary cum Compliance Officer of the company w.e.f 04.07.2018 fulfilling the requirements of Section 203 of the Companies Act, 2013 and rules made there under and Regulation 6 of Listing Regulations.

14. AUDITORS AND AUDITORS REPORT

Statutory Auditors

M/s. Khetawat Agarwal & Co., Chartered Accountants (Firm Registration No. 003960C), Alwar were appointed as Statutory Auditors of the Company, for a term of five years from the conclusion of the 23rd AGM held on 30.09.2014 till the conclusion of 28th AGM to be held in the year 2019, subject to a yearly ratification of such appointment by shareholders at every AGM In accordance with the Companies Amendment Act, 2017, enforced on 7th May, 2018 by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every Annual General Meeting.

The Report given by the Auditors on the financial statement of the Company is part of this Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Secretarial Auditor

Pursuant to the provisions of section 204 of Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as ammended), every Listed Company is required to appoint Secretarial Auditor to carry out Secretarial Audit of the Company.

In consonance with the requirements of Section 204 of the Companies Act, 2013 and rules made there under, the Board of Directors had appointed M/s V. M. & Associates, Company Secretaries (FRN: P1984RJ039200) to conduct the secretarial audit of the Company for the financial year 2017-18.

A Secretarial Audit Report in Form MR-3 issued by M/s V. M. & Associates, Company Secretaries in Practice, in respect of the secretarial audit of the Company for the financial year ended March 31, 2018 is given in Annexure "I" to this Report and it carries the following qualifications:

During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. except non fulfillment of certain listing compliances as per the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Management Response:

Non-Compliance observed occurred inadvertently and will be taken due care in future and information referred in Auditors Report are self-explanatory and do not call for any further comments.

On the recommendation of the Audit Committee, The Board has reappointed M/s V. M. & Associates, Company Secretaries as Secretarial Auditor of the Company to carry out secretarial audit for the financial year 2018-19.

• Internal Auditor

Pursuant to the provision of Section 138 of Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, every Listed Company is required to appoint an Internal Auditor or a firm of Internal Auditors to carry out internal audit of the Company.

In consonance with the aforementioned, M/s Amit M Agarwal & Co., Chartered Accountants, Alwar (FRN:019025C) was appointed to conduct the Internal Audit of the Company for the financial year 2017-18.

The Board has re-appointed M/s Amit M Agarwal & Co., Chartered Accountants, Alwar as the Internal Auditor of the Company for the financial year 2018 -19.

15. CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board members and senior management personnel of the Company, which is available on the website of the company i.e. http://www.sardaproteins.com/contact. All the Board members and the senior management personnel have affirmed compliance with the Code of Conduct during the year ended on March 31, 2018.

RISK MANAGEMENT

The Company has developed and implemented a risk management policy which encompasses practices relating to identification, assessment monitoring and mitigation of various risks to key business objectives. The Risk management framework of the Company seeks to minimize adverse impact of risks on our key business objectives and enables the Company to leverage market opportunities effectively.

The Company has executed various contracts of materials/stock which are hedged at NCDEX. Your directors keep continuous watch on movements of the market as it involves risk of value of materials/stock.

16. VIGIL MECHANISM

The Board adopted and implemented the vigil mechanism/whistle-blower policy that adopts global best practices. We have established a vigil mechanism for Directors and employees to report concerns and unethical behavior, actual or suspected fraud or violation of our code of conduct and ethics. It also provides for adequate safeguards against the victimization of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in exceptional cases.

The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time. Further no personnel have been denied access to the audit committee as per the Listing Regulations.

The vigil mechanism policy has been uploaded on the website of the Company i.e. http://www.sardaproteins.com/files/documents/VIGIL-MECHANISM_Sarda.pdf. and also confirm that no whistle blower event was reported during the year and mechanism is functioning well.

17. AUDIT COMMITTEE

The committee comprises of 2 (two) Non-executive & Independent Directors and 1 (one) Whole Time Director as on March 31, 2018 and the details of the Committee members are set out below in the following table:

Name Of Member Category Capacity
Mr. Kailash Kumar Dhoot; Non-Executive & Independent Director Chairman & Member
DIN: 00168546
Mr. Sanwar Mal Pareek; Non-Executive & Independent Director Member
DIN: 07434553
Mr. Damodar Prasad Sarda; Whole Time Director Member
DIN: 00763377

TERMS OF REFERENCE OF AUDIT COMMITTEE:

The terms of reference of the Audit Committee inter alia include the following:

• the recommendation for appointment, remuneration and terms of appointment of auditors of the Company;

• review and monitor the auditors independence and performance, and effectiveness of audit process;

• examination of the financial statement and the auditors report

• approval or any subsequent modification of transactions of the Company with related parties;

• scrutiny of inter-corporate loans and investments;

• valuation of undertakings or assets of the Company, wherever it is necessary;

• evaluation of internal financial controls and risk management systems;

• monitoring the end use of funds raised through public offers and related matters.

18. NOMINATION AND REMUNERATION POLICY

This Nomination and Remuneration Policy (the "Policy") applies to the Board of Directors (the "Board"), Key Managerial Personnel (the "KMP") and the Senior Management Personnel of Sarda Proteins Limited (the "Company").

This Policy is in compliance with Section 178 of the Companies Act, 2013 read along with the applicable rules thereto and applicable Listing Regulations and includes formal evaluation framework of the Board. The companys Nomination & Remuneration policy which includes directors appointment and remuneration & criteria for determining qualifications, positive attributes, independence of Director is also available on the website of Company at http:// www.sardaproteins.com/files/documents/NOMINATION-AND-REMUNERATION-POLICY_Sarda.pdf.

19. FORMAL ANNUAL EVALUATION OF BOARD/ COMMITTEES/KMP/ INDIVIDUAL DIRECTORS

The evaluation / assessment of the Board and its Committee and KMPs of the Company are to be conducted on an annual basis to satisfy the requirements of the Companies Act, 2013 and Listing Regulations.

The evaluation/assessment was led by the Chairman of company and nomination and remuneration committee with specific focus on the performance and effective functioning of the Board. The Board evaluation framework has been designed in compliance with the requirements under the Companies Act, 2013 and the Listing Regulations, and in consonance with Guidance Note on Board Evaluation issued by SEBI recently.

Evaluation of the Board was based on criteria such as composition and role of the Board, Board communication and relationships, functioning of Board Committees, review of performance and compensation to Executive Directors, succession planning, strategic planning, etc. Evaluation of Directors was based on criteria such as participation and contribution in Board and Committee meetings, representations of shareholders interest and enhancing shareholders value, experience and expertise to provide feedback and guidance to top management on business strategy, governance and risk, understanding of the organizations strategy, risk and environment, etc.

The outcomes of the Board evaluation for financial year 2017-18 was discussed by the Board governance, Nomination and Remuneration committee and the board in their meeting. The Board has received consistent rating on its overall effectiveness and has been rated comparatively higher this year for composition of Directors and their skills, attributes and experience. The Board has also noted areas requiring more focus in the future.

20. INTERNAL FINANCIAL CONTROL SYSTEMS

The Company has put in place an adequate system of internal control commensurate with its size and nature of business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Audit Committee reviews adherence to internal control systems and internal audit reports.

21. CORPORATE GOVERNANCE REPORT

As per Regulation 15(2) of the Listing Regulation, the compliance with the Corporate Governance provisions shall not apply in respect of the following class of companies:

a. Listed Entity having paid up equity share capital not exceeding Rs.10 crore and Net Worth not exceeding Rs.25 crore, as on the last day of the previous financial year;

b. Listed Entity which has listed its specified securities on the SME Exchange.

Since, our Company falls in the ambit of aforesaid exemption (a); hence compliance with the provisions of Corporate Governance shall not apply to the Company and it also does not form part of the Annual Report. However, the Company has due corporate governance norms for the financial year 2017-18.

22. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace for every women working in its premises through various interventions and practices. The Company always endeavours to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

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

• Number of complaints received: NIL

• Number of complaints disposed off: NIL

23. MANAGEMENT DISCUSSION & ANALYSIS REPORT

Managements Discussion and Analysis Report for the year under review, as stipulated under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, forms part of the Annual Report for the Financial Year 2017-18, which is presented as under:

a) INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian economy is striving on a relatively strong path. However, there was a strong competition in edible oil market due to imports and lower taxation to new MSME units. The market was hit due to demonetization, which affected the sales for around two months.

Your Companys vision and business strategy remain strongly in sync with the proposed growth areas.

b) OUTLOOK ON OPPORTUNITIES

The company is mainly dealing in Edible oils and other Agro products viz. oil seed, cereals etc. The current year after initial good going, took a steep fall which is very rarely seen in the first quarter due to fall in sales for no body stocking the goods due to imposition of GST. Earlier performance of the company was also affected due to benefit of taxation to MSME But with the advent of Goods and Services Tax from 1st July 2017, there is going to be level playing field for all the players in the industry from the taxation point of view. The management now hopes this will help your company to regain market share in the edible oil market.

The Board of Directors is hopeful to deliver better results in the current financial year after the advent of Goods and Services Tax.

c) OUTLOOK ON THREATS, RISKS AND CONCERNS

Government policies, political situation and global speculative trends in the commodities company is dealing pose some risk to the operations of the Company.

Risk management techniques have been deployed at every level to ensure the competitiveness of the company without making itself vulnerable to the macro as well as micro risks. All the risks are dealt in the best possible manner safeguarding an efficient working environment throughout the organization culture. In event of unforeseen risks the company would rely on the experience and dedication of its board to tackle any issue that may affect its performance.

d) PRODUCT-WISE PERFORMANCE

The edible oil business continues to account substantial part of companys turnover. Your company mainly deals in mustard oil, refined oil and other edible products backed up with strong distribution network. The Market environment continues to be very competitive and the Company faces intense competition with regional players in edible oil segment.

Amount in Rs.lakhs

Revenue from product 2017-18 2016-17
Mustard Oil 4,44,30,968 1,94,75,785
Refined Oil 1,11,40,963 2,88,20,906
Husk Nil 10,68,582
Barley Cut and Thin Nil 5,26,092
Mustard Seed Nil 15,17,410
Wheat 5,63,775 50,62,700
Seasame Seed Nil 44,47,241

The overall revenue from its products has declined as compared to previous years however the Company is hopeful that there would be healthy market growth in the forthcoming years.

e) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has established its internal control system commensurate with the requirement of its size. In the company is well staffed with experienced and qualified personnel who will play an important role in implementing and monitoring the internal control environment and compliance with statutory requirements.

f) FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, total revenue for the financial year ended March 31, 2018 stood at Rs. 563.19 Lakhs as against Rs. 610.61 Lakhs for the financial year ended March 31, 2017 further the Loss after tax for the financial year ended March 31, 2018 stood at Rs. 33.08 Lakhs as against a loss of Rs. 13.21 Lakhs for the financial year ended March 31, 2017. The company has incurred expenses of Rs. 600.92 Lakhs as against Rs. 635.71 Lakhs in the previous year. The EPS for the financial year ended March 31, 2018 is Rs. (1.92) as compared to Rs. (0.77) for the previous year.

FINANCIAL PERFORMANCE FOR THE YEAR ENDED ON 31.03.2018

Particulars F.Y. 2017-18 F.Y. 2016-17
SALES 563.19 610.61
Other Income 2.03 7.42
Expenses 600.92 635.71
Profit/(Loss) before Depreciation and Extra Ordinary Income (35.74) (17.68)
Depreciation 1.11 1.45
Extra Ordinary Income - -
Profit/(Loss) before Taxes (36.81) (19.14)
Provision for Taxes (3.73) (5.93)
Net Profit/(Loss) (33.08) (13.21)

g) HUMAN RESOURCE MANAGEMENT

Human resources are a valuable asset for any organization. The company is giving emphasis to upgrade the skills of its human resources. This is in keeping with its policy of enhancing the individuals growth potential within the framework of corporate goals. Total number of employees as on March 31, 2018 stood at 7.

24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company continuously strives to conserve energy, adopt environment friendly practices and employ technology for more efficient operations.

The particulars relating to the energy conservation and technology absorption and foreign exchange earnings and outgo, as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are given in the Annexure "II" to this Report.

25. EXTRACT OF THE ANNUAL RETURN

Relevant extract of annual return in form no. MGT-9 as on the financial year ended on March 31, 2018 as required under Section 92(3) of the Companies Act, 2013 read with The Companies (Management and Administration) Rules 2014, is given in Annexure "III" to this Report.

26. EMPLOYEE REMUNERATION

(A) Disclosures pertaining to remuneration and other details as required under section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended) are annexed to this report as Annexure "IV".

(B) Disclosure of the names of top ten employees in terms of remuneration drawn is provided in Annexure "V" as per the requirement of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (as amended).

(C) Further, None of the employees of the company was in receipt of the remuneration exceeding the limits prescribed u/s 197 (12) read with rule 5, sub-rule 2 of The Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016 of the Companies Act, 2013 during the year under review.

27. MATERIAL CHANGES DURING THE FINANCIALYEAR UNDER REVIEW

There were no material changes occurred subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report which can affect the financial position of the company.

28. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to sub section 3 (c) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company hereby state and confirm that:

i. in the preparation of the annual accounts for the year ended March 31, 2018 the applicable accounting standards have been followed and there are no material departures from the same;

ii. the directors have 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 at the end of the financial year and of the profit and loss of the company for that period;

iii. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

iv. the directors have prepared the annual accounts on a going concern basis;

v. the directors have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and;

vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

29. FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTOR

The Independent Directors of the company are being familiarized with the business environment and overall operations of the Company through orientation session.

Further, at time of appointment of the Independent Director, the Company issues a formal letter of appointment outlining his / her role, function, duties and responsibilities which are made available at the website of the Company at www.sardaproteins.com.

30. ACKNOWLEDGEMENTS

Your Directors wish to take this opportunity to place on record their gratitude and sincere appreciation for the timely and valuable assistance and support received from Bankers, Share Transfer Agent, Auditors, Customers, Suppliers and Regulatory Authorities.

The Directors place on record their deep appreciation of the dedication of your Companys employees at all levels and look forward to their continued support in the future as well. Your Directors are thankful to the shareholders for their continued patronage.

For and on behalf of the Board of Directors
For Sarda Proteins Ltd.
Sd/- Sd/-
Damodar Prasad Sarda Siddharth Sarda
Whole-Time Director Whole-Time Director
DIN:00763377 DIN: 00763412
Date : July 04, 2018
Place: Alwar