DIRECTOR'S REPORT TO THE MEMBERS The Members, Your Directors have pleasure in presenting their 24thAnnual Report together with the Audited accounts of the Company for the Financial Year ended March 31, 2015. Operational Review The revenue increased to Rs. 266253 Lakhs against Rs. 247267 Lakhs in the previous year. Profit before taxation was Rs. 3242 Lakhs against Rs. 3127 Lakhs in the previous year. After providing for the taxation, the profit stood at Rs. 2503 Lakhs against Rs. 2406 Lakhs in the previous year. Company is making out all effort to ensure that the products developed are in tune with the needs of the consumers and initiated several steps to mark its presence in the premium markets, reducing the marketing lag and improve the Company's products, some of the current initiative that are expected to help the Company to be a cost effective to enable it to meet the challenges of competitive markets in the future. Oil Division During the year Soya Seeds processed stood at 103640 MT. Your company sustained to be one of leading player in the Edible Oil sector. The Capacity Utilization of the solvent extraction plant has been constantly higher than Industry average. The Soya oil produced stood at 17689 MT and the De-oiled cake produced stood at 90169 MT. The Company is also producing Rice Bran oil. Refinery Division Production of Refined oil stood at 13765 MT during the year under review. Rice Division Production of Rice stood at 35312 MT during the year. Dividend Yours directors have decided not to recommend any dividend on the Equity shares of the company for the financial year 2014-15 for further expansion plans. Reserves The Board has recommended transferring of Rs. 200,00,000 to the General Reserves and an amount of Rs. 27,57,49,000 out of the current year profit, is transferred to Profit and loss Account. Share Capital The authorized and paid up equity share capital of the Company for the year ended March 31, 2015 is the same in comparison with the previous year ended March 31, 2014. The Company has not issued any equity shares with differential voting rights nor granted stock options nor sweat equity. Branding, Awards and Recognition Your Company won many accolades; Our Company is registered as ISO 14001:2004 for Environmental Management System as certified by Care Certification Private Limited. Our Company is also registered as ISO 22000:2005 for food Safety Management with HACCP as certified by Care Certification Private Limited. SAOL is also awarded with Certification of compliance for good Manufacturing Practice (GMP) System as per the norms laid down by World Health Organization and certified by UK Certification & Inspection Ltd. SAOL is also awarded with Certification of Halal Products Authentication for feisty hygiene condition adhering to food Safety & Quality control with modern infrastructure. Our company has been upgraded from the status of "Star Export House" to the "Trading House" granted by Director General of Foreign Trade, in accordance with the provisions of the foreign Trade policy, 2009-14. Ranked by "Plimsoll Global Analysis, United Kingdom" as the 426th largest Company in the Consumer Food Manufacturers industry amongst the top 500 Food Manufacturers and also listed as a top performer at 363rd most profitable food manufacturing company. Your Company has been ranked by "Manappuram Finance Limited" India Top 500 Companies 2014. Our Company has been awarded with 2nd Outstanding Achievements Awards, 2014 for Excellence in Outstanding Achiever for Export Category Large Enterprise by Federation of Madhya Pradesh Chambers of Commerce & Industry, Bhopal in the year 2014. Directors and Key Managerial Personnel Directors The Company has 16 (Sixteen) directors comprising of 8 (Eight) Independent Directors, 4 (Four) Non-Executive Directors including Chairman, 4 (Four) Whole-Time Directors. Smt. Geeta Devi Agrawal and Mr. Rajul Agrawal, retire by rotation at the forthcoming Annual General Meeting and being eligible, offers themselves for reappointment. The detail of the Directors being eligible to be reappointed is set out in the notice forming part of the Annual General Meeting. Mr. K.L. Jain, Mr. Arun Kumar Pandey, Mr. Anil Kumar Vishwakarma, Mr. Hans Kumar Verma, Mr. Hari Krishan Agrawal, Mr. Surendra Kumar Jain, Mr. Santosh Kumar Tiwari and Mr. Shyam Babu Agrawal were appointed as an Independent Directors in the last Annual General meeting for term of 5 years. All independent directors have given declaration that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement. Key Managerial Personnel In accordance to the provisions of the Companies Act, 2013, Mr. Anil Agrawal, Whole-Time Director, Mrs. Archna Nagrani, Chief Financial Officer and Ms. Priyanka Shrivastava, Company Secretary were designated as Key Managerial Personnel of the Company. Particulars of Employees The Company has not paid any remuneration attracting the provisions of sub rule (2) of Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Meetings A calendar of Meetings is prepared and circulated in advance to the Directors. During the year twelve Board Meetings and four Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report. Committees of the Board During the year, in accordance with the Companies Act, 2013, the board re-constituted some of its Committees. The details of all the Committees of the Board along with their charters, composition and meetings held during the year, are provided in the Corporate Governance Report which forms part of this Annual Report. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report. Managerial Remuneration: The Company has not paid any Managerial Remuneration for the financial year 2014-15 to any of its Whole-Time Directors and Non-Executive Director. The details of remuneration are provided in the Corporate Governance Report, which forms part of the Annual Report. Details of Subsidiary/Joint Ventures/Associate Companies Your Company has the following subsidiaries: Sanwaria Singapore Pte. Limited(Singapore); Sanwaria Energy Limited During the year, there has been no business activity by Sanwaria Singapore Pte. Limited (Singapore), foreign subsidiary of the Company. The Director Report and the Statement of Accounts together with the Auditor Report are hereby annexed. In accordance with the Accounting Standard AS-21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company in this Annual Report include the financial information of its subsidiary. Further, the Annual Accounts and related documents of the subsidiary company shall be kept open for inspection at the Registered & Corporate Office of the Company. The Company will also make available copy thereof upon specific request by any Member of the Company interested in obtaining the same. The statement relating to Subsidiary Company is provided in Annexure II. Auditors The Auditors, M/s Sunil Saraf & Associates, Chartered Accountants, Indore retire at the ensuing Annual General Meeting and, being eligible, offer themselves for reappointment. Auditors' Report. The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments. Disclosure about Cost Audit In view of the same and in terms of the provisions of Section 148 and all other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s. Yogesh Chourasia & Associates, Cost Accountants have been appointed as Cost Auditors to conduct the audit of cost records of your company for the financial year 2015-16. The remuneration proposed to be paid to them requires ratification of the shareholders of the Company. In view of this, your ratification for payment of remuneration to Cost Auditors is being sought at the ensuing AGM. Your Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period. Secretarial Audit Report In terms of Section 204 of the Act and Rules made there under, M/ s. P.K. Rai & Associates, Practicing Company Secretary have been appointed as Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure III to this report. The report is self-explanatory and do not call for any further comments. Internal Audit & Controls& Their Adequacy The Company internal control systems are audited by Agrawal and Dhoot. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Their scope of work includes review of processes for safeguarding the assets of the Company, review of operational efficiency, effectiveness of systems and processes, and assessing the internal control strengths in all areas. During the year, the Company continued to implement their suggestions and recommendations to improve the control environment. Internal Auditors findings are discussed with the process owners and suitable corrective actions are taken as per the directions of Audit Committee on an ongoing basis to improve the efficiency in operations. Vigil Mechanism/ Whistle Blower Policy In pursuant to the provisions of section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for directors and employees to report genuine concerns has been established. The Vigil Mechanism Policy has been uploaded on the website of the Company at www.sanwariaagro.com under investors/Vigil Mechanism Policy link. Prevention of Insider Trading The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code. All Board Directors and the designated employees have confirmed compliance with the Code. Risk management policy Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Clause 49 of the listing Agreement, the company has constituted a risk management committee. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Board report. At present the company has not identified any element of risk which may threaten the existence of the company. Extract of annual return The details forming part of the extracts of the Annual Return in MGT-9 is annexed herewith as "Annexure IV". Significant and material order There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future. Deposits Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. Particulars of loans, guarantees or investments The Company has not given any loans, guarantees or investments covered under the provisions of Section 186 of the Companies Act, 2013. Particulars of contracts or arrangements with related parties: All the related party transactions that were entered into during the financial year were on arm's length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the Company with the Promoters, Key Management Personnel or other designated persons which may have potential conflict with the interest of the Company at large. The details of the Related Party transactions are provided in Annexure I. Corporate Governance Certificate The Compliance certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in Clause 49 of the Listing agreement shall be annexed with the report. Management Discussion and Analysis Report The Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges forms part of this Annual Report. Obligation of Company under the Sexual Harassment of Women At Workplace (Prevention, Prohibition And Redressal) Act, 2013 In order to prevent sexual harassment of women at work place, a new act The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act, every company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee. The Company has adopted a policy for prevention of Sexual Harassment of Women at workplace and has set up Committee for implementation of said policy. During the year, the Company has not received any complaint of harassment. Conservation of energy, technology absorption and foreign exchange earnings and outgo The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows: A. CONSERVATION OF ENERGY: The Company has taken the following measures towards the conservation of energy. i.) Use of energy efficient CFL and LED lamps in all plants. ii) Recycling the Vacuum Pump cooling water. iii) Usage of Natural Gas replacing Light Diesel Oil in Boiler. iv) Online monitoring of Boiler Efficiency. v.) Recirculation of cooling tower water. vi) Installation of higher efficiency DG sets for uninterrupted power supply. vii) The Company has installed variable frequency drive. The Company has made efforts to conserve and optimize the use of energy. viii) Utilization of UPS and high voltage control stabilizers. Benefits of above measures i.) Cost reduction due to decline in overall energy consumption. ii) Improved productivity by 2%, through online monitoring of Boiler Efficiency. iii) Sustained un-interrupted power supply facilitated in achieving production lean time. iv) Curtailed wastage at each production stage. v.) Enhanced operating margin through cost reduction. vi) Overall contributed towards environment and restrained wastage of water and food commodity used as raw material in production. vii) Company has been able to achieve the least possible consumption of energy in comparison to the industry average. TECHNOLOGY ABSORPTION, RESEARCH AND DEVELOPMENT: 1. Specific areas in which Technology absorption and R&D carried out by the company: 2. Developing new products and product improvements. 3. Standardization of raw material, production methods and finished goods quality. 4. Up gradation of plants for the improvement in quality of oil. 5. Reduction of emission of pollutants from Chimney by installing pollution control equipments. 6. Manufacturing of Jar for Captive Consumption for packaging of Soy Refined Oil and RBD Palm oil and Rice Bran Oil. Benefits Derived as a result of above: Product improvement Increased Productivity Improved Quality Cost Saving Reduced Steam Consumption Safe Working Condition Healthy environment Manufacturing and Packaging Quality Enhanced The quality of company's products has improved and thereby enjoying significant position in the industry. 3. Future plan of action: The Company is taking step for R & D in the existing area and also in new product, mainly focus on the cost effectiveness, eco friendly product, and meet the requirement of consumer. Efforts are being made to further improve the quality of products and their range. (c) Foreign exchange earnings and Outgo The Company has continued to maintain focus and avail of export opportunities based on economics considerations. Corporate Social Responsibility (CSR) The Company has constituted CSR Committee and has framed CSR Policy. The policy is available on the website of the Company www.sanwariagro.com. The Company has not spend on CSR activity for the financial year 2014-15 but it will commence its expenditure on CSR from 2015-16 as it is still searching for an eligible NGO working in the direction of Company's CSR Policy so that the benefits of such an initiative can reach to the downtrodden people. Industrial Relations Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement. During the year under review, your Company enjoyed cordial and healthy relationship with workers and employees at all levels. Directors' Responsibility Statement The Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall state that — (a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; (b) the directors had 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; (c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; (d) The directors had prepared the annual accounts on a going concern basis; and (e) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. Listing With Stock Exchanges: The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company's Shares are listed. Acknowledgements Your Directors take this opportunity to place on record their gratitude and thank the Financial Institutions, Bankers, Government Authorities, Customers, Vendors, Shareholders and Employees for their valuable guidance, support and continued assistance, cooperation to the Company. The Directors also commend the continuing commitment and dedication of the employees at all levels. The Board of Directors also look forward to their continued support in future For and on behalf of the Board of Directors Sd/- Geeta Devi Agrawal Chairman DIN: 06582600 Place: Bhopal Date: August 14, 2015 |