Dear Share Holders :
Your Directors are pleased to present before you the 79th Annual Report and
the Audited Statement of Accounts for the year ended 31st March, 2023 :-
1. FINANCIAL RESULTS
(Rs.in lacs)
|
F.Y. 2022-23 |
F.Y. 2021-22 |
| Sales & Other income |
1436.97 |
1158.40 |
| Earning before Interest, Tax and Depreciation |
144.70 |
153.03 |
| -- Interest |
25.33 |
20.88 |
| -- Depreciation |
26.63 |
24.74 |
| Profit before tax |
92.74 |
107.41 |
| -- Current Tax |
18.30 |
25.00 |
| -- Deferred Tax |
4.30 |
2.60 |
| -- Taxes related to previous years |
-- |
2.52 |
| Profit After Tax |
70.14 |
77.29 |
| Surplus brought forward from previous year |
16.88 |
28.78 |
| Transfer to General Reserves |
50.00 |
70.00 |
| Final Dividend |
-- |
4.43 |
| Interim Dividend |
12.50 |
14.76 |
| Surplus carried forward |
24.52 |
16.88 |
2. PERFORMANCE
-- The Company has achieved highest ever sales of Rs435.25 crores (PY Rs 1157.19
crores) registering a growth of 24% during FY 2022-23.
-- The EBITA (Earnings before Interest, Tax and Depreciation) stood at Rs 145 Crores
v/s Rs 151 crores during the previous year.
-- After a charge of interest of Rs 25.33 crores (Rs 20.88 crores), depreciation of Rs
26.63 crores (Rs 24.74 crores) and tax of Rs 22.60 crores (Rs 30.12 crores), the Net
Profit after tax came at Rs 70.14 crores (Rs 77.29 crores) for the year.
The EBITA and profit margins were adversely affected, across the Industry, due to
higher raw material prices & increased energy cost, mainly owing to the geo political
situation / global disturbance during the year ended 31st March, 2023.
3. DIVIDEND
The Company had declared and paid an interim dividend of H 8/- per Equity Share of face
value Rs 10/- each (i.e. 80%) in the month of December, 2022. The Board has considered the
said interim dividend of
Rs 8 per equity share as the final dividend for the financial year 2022-23 (against Rs
10/- per equity share during FY 2021-22) in order to conserve resouces for future
expansions in the operations of the Company. The Dividend Distribution Policy, in terms of
Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ('SEBI Listing Regulations') is available on
the Company's website on https://www. sukhjitgroup.com/dividend-distribution-policy
4. TRANSFER TO RESERVES
After payment of the interim dividend of Rs 12.50 crores in December, 2022, the Company
was left with Rs 74.52 crores surplus out of which Rs 50 crores have been transferred to
the general reserves (PY Rs 70 crores) and Rs 24.52 crores have been carried forward in
the retained earnings account.
5. SHARE CAPITAL
The paid up share capital of the Company stood at Rs 15.62 crores as on 31.03.2023.
There was no issue of fresh shares by way of public issue, bonus issue, right or
preferential issue during the financial year 2022-23.
6. CAPEX & WORKING CAPITAL POSITION
The total Non Current Assets (including capital work-in progress) of the Company
appeared at Rs 512.53 crores as on 31.03.2023 against Rs 507.31 crores as on 31.03.2022
after providing depreciation of Rs 26.63 crores during the year (Rs 24.74 crores).
The Company has made a Capital expenditure (on addition of fixed assets) of Rs 34.77
crores during the year on account of balancing / upgrading of its manufacturing
facilities. The Board of Directors has approved Capital expenditure of Rs 37 crores for
the financial year 2023-24, which will be used for upgrading / modernizing some key
equipments of the units to ramp up the capacities at the existing locations. The proposed
Cap-ex will be met out of the internal accruals of the company.
The Current Assets of the Company appeared at Rs 392.30 crores on 31.03.2023 as
compared to Rs 275.38 crores on 31.03.2022 including Inventories at Rs 167.67 crores
against Rs 96.05 crores in the previous year due to higher holding of the basic raw
material, which is seasonally available.
The company has long term Bank Borrowings of about 30 crores (payable in a period of
two years after the end of the running financial year), net of the current maturity of the
term loans of Rs 20.09 crores payable till 31.03.2024. The internal accruals of the
company will be enough to take care of this repayment & strengthen the working capital
of the company. However, company has liquid investments of Rs 77.52 crores against Rs
65.90 crores last year as an additional cushion to the liquidity of the company.
The management believes that the Company has sufficient liquid resources at hand to
meet up any additional working capital requirements / other business exigencies.
7. MANAGEMENT DISCUSSION AND ANALYSIS
As per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,
Management Discussion and Analysis report is annexed herewith marked as 'Annexure A' and
forms a part of this report.
8. CORPORATE GOVERNANCE
Your company is fully committed to the philosophy of transparency and believes in
conducting its business scrupulously with due compliance of all the applicable laws, rules
and regulations. In pursuance to the requirements of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended to date, the report on the
Corporate Governance is annexed to this report marked as 'Annexure B'.
9. DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to Section 134 (3c) of the Companies Act, 2013, the Directors state that: (a)
in the preparation of the Annual Accounts for the financial year ended 31st
March, 2023, the applicable Indian Accounting Standards have been followed and there are
no material departures; (b) appropriate accounting policies have been selected and applied
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 of the company for the year so ended; (c) proper and
sufficient care has been taken 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) the
Annual Accounts for the year ended 31.03.2023, have been prepared on a 'going concern'
basis; (e) the internal financial controls have been laid down to be followed by the
company and that such internal financial controls are adequate and are operating
effectively; and (f) proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems are adequate and operating
effectively.
10. SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS
The Vijoy Steel & General Mills Company Ltd., Phagwara: The Company held 96.17% of
shares in the capital of The Vijoy Steel & the General Mills Co. Ltd. The Company
continued providing necessary engineering support to the manufacturing operations of the
Company.
Scott Industries Ltd., Phagwara: The Company held 99.97% of shares in the capital of
the Scott Industries Ltd. The Company has shut down its operations. Most of its assets
have already been disposed of and efforts are on to realize the old dues from its
customers and wind up the Company.
Sukhjit Mega Food Park & Infra Ltd., Phagwara:
The Company held 100% of shares in the capital of its material subsidiary Sukhjit Mega
Food Park & Infra Ltd. The Company had operationalised its project of the Mega Food
Park in the state of Punjab in FY2020-21 creating a State of Art Technology Infrastructure
for setting up food processing units in the Mega Food Park. A good part of its assets have
been leased out and operationalised. However, the expected Investments in the Mega Food
Park got delayed owing to the outbreak of Covid as the prospective investors, instead of
investing in new projects, remained occupied for a long time, in protecting their existing
businesses. The Company is however, cash positive during the year and expects to improve
its revenues in the coming years.
There has been no material change in the nature of business of the Subsidiaries. As
required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, as amended to date, the Consolidated Financial Statements of the Company and its
subsidiaries are attached, which have been prepared in accordance with the relevant Indian
Accounting Standard(s) as prescribed under the Companies Act, 2013.
In pursuance to the general circular issued by the Ministry of Corporate Affairs, the
Balance Sheet, Profit & Loss Account and other documents of the subsidiary companies
are not being annexed to the Balance Sheet of the Company. A statement containing the
requisite financial details of the company's subsidiaries for the financial year ended 31st
March, 2023 is annexed to the consolidated results forming part of the Annual Report.
InaccordancewithSection136(1)oftheAct,theaudited financial statements including the
consolidated financial statements and related information of the Company and the separate
financial statements of each of the subsidiary companies, are available on the Company's
website at https://www.sukhjitgroup.com. The annual accounts of these subsidiaries and the
related detailed information will be made available on demand, to any shareholder of the
Company who may be interested in seeking such information. Copies of the above documents
are also available for inspection by any shareholder of the Company at the registered
office of the Company during business hours.
11. PARTICULARS OF REMUNERATION TO DIRECTORS AND DISCLOSURES
In terms of the provisions of section 197 (12) of the Companies Act, 2013 read with
Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the names and other particulars of Directors/ KMPs/ Employees are
set out in the 'Annexure C' to the Directors' Report.
12. DIRECTORS
(a) Smt. Manjoo Sardana (DIN: 08533106), Non Executive Chairperson of the Company, is
retiring by rotation and being eligible, offers herself for reappointment. Board
recommends her reappointment as the Non Executive Chairperson of the Company.
(b) The existing tenure of Sh. Tarsem Singh Lally, a Non Executive Independent Director
of the Company (DIN : 00381009) is expiring on 12/08/2023. Sh. Tarsem Singh Lally is an
Engineering Graduate and an experienced entrepreneur with sound business background. He
has lifelong commercial/ technical experience of over 48 years in various fields to his
credit. His continuance as a member of the Board will enrich the board deliberations and
strengthen its composition. The Board of Directors has recommended his re-appointment for
a further period of 3 years i.e. w.e.f 13/08/2023 upto 12/08/2026, subject to the approval
of shareholder's in the ensuing Annual General Meeting.
(c) The Board has re-appointed Sh. M.G. Sharma (DIN: 00398326) as Executive Director
(Fin.) & CFO of the Company in its meeting held on 27.05.2023 (subject to approval of
the members in the ensuing General Meeting) as his existing term expired on 31.05.2023.
Sh. M.G. Sharma has been associated with the company for over four decades and has been
involved in policy formulation and various other activities like project / product
planning & development. He is also actively involved in key areas like procurement of
raw materials, marketing of finished products and other commercial activities besides
heading the finance functions of the Company. The Board, therefore, in the overall
interest of the company, recommended his re-appointment as Executive Director (Fin) &
CFO for a further period of 3 years i.e. with effect from 1st June, 2023 to 31st
May, 2026.
(d) The Company has received declarations from all the Independent Directors of the
Company confirming that they meet the criteria of independence and comply with all the
requirements in pursuance to subsection (6) of Section 149 of the Companies Act, 2013 and
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, so as to qualify
themselves to be appointed / continue as Independent Directors under the provisions of the
Act and rules thereunder.
(e) Based on evaluation criteria laid down under the Nomination and Remuneration Policy
of the Company, framed in accordance with the provisions of section 178 of the Companies
Act,
2013, the Nomination & Remuneration Committee rates the performance of the
individual directors and also the Board as a whole, which, inter-alia, include : -
evaluation of leadership abilities - contribution to corporate objectives & plans -
regular monitoring of performance - effective decision making ability - attendance /
contribution at Board and Committee meetings etc.
The Company has in place a suitable Policy for the Appointment & Remuneration of
the Directors/ KMPs. The Company has devised the Board's Performance Evaluation criteria
for evaluation of Board's / Committees' / Directors' performance. The performance of the
Committees was evaluated by the Board on the basis of the criteria such as the composition
of committees and effectiveness of committee meetings etc.
The Independent Directors in their Separate Meeting reviewed the performance of Non-
Independent Directors, the composition & performance of the Board of Directors as a
whole, frequency of Board meetings etc. The Independent Directors also reviewed the
performance & participation of the Chairperson of the Company. Such proceedings were
placed on record and discussed in the Board Meeting following the meeting of the
Independent Directors. The Board of Directors expressed their satisfaction over the
evaluation process.
13. MEETINGS OF THE BOARD
Eight (8) meetings of the Board of Directors were convened and held during the
financial year 2022-23. The maximum intervening gap between the meetings was within the
period prescribed under the provisions of Section 173 of the Act and Listing Regulations.
The further details of Board/Committee Meetings including composition and attendance are
set out in the 'Annexure B' the Corporate Governance Report, forming part of this Report.
14. AUDIT COMMITTEE
The powers, role and terms of reference of the Audit Committee cover the areas as
contemplated under Section 177 of the Companies Act, 2013 ('the Act') and Regulation 18 of
the SEBI (LODR) Regulations, 2015, as applicable, besides other matters as referred by the
Board of Directors from time to time.
The primary objectives of the audit committee inter alia include : - to monitor and
provide an effective supervision of the Management's financial reporting process, - to
ensure accurate and timely disclosures with highest levels of transparency, integrity and
quality of financial reporting, - to oversee the financial reporting process by the
Management, the internal auditors and the independent auditors, - to take all possible
measures to ensure the objectivity and independence of the independent auditors.
The Committee mandatorily reviews information such as internal audit reports related to
internal control weakness, management discussion & analysis and operational results,
statement of significant related party transactions and such other matters as prescribed.
During the year under reference, the Audit Committee of the Company consisted of Sh.
Ranbir Singh Seehra as the Chairman, Sh. Vikas Uppal, Sh. Saravjit Singh Hothi and Sh.
M.G. Sharma as its members. All recommendations made by the Audit Committee during the
year were accepted by the Board.
15. INTERNAL FINANCIAL CONTROLS
Internal financial control systems of your company provide for proper authorisation of
the transactions, timely recording & reporting in the desired manner to ensure the
reliability of financial reporting, timely feedback on the achievement of operational or
strategic goals and compliance with all the applicable laws & regulations. The
Internal & External Auditors of the Company also measure the effectiveness of internal
controls through periodical checks and ensure that company has an effective internal
control system duly commensurate with its size and nature of business. The management
reviews the systems periodically to systematically improve business processes in regard to
their effectiveness and efficiency.
16. VIGIL MECHANISM
Pursuant to Section 177 of the Companies Act, 2013 & rules made thereunder and the
SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has
established a vigil mechanism, which also incorporates a Whistle
Blower Policy, for Directors and employees of the Company to report genuine concerns of
unethical behavior or violation of code of conduct by way of direct access to the Chairman
of the Audit Committee. There are adequate safeguards against victimization of employees/
directors who express their concerns. The Whistle Blower Policy of the Company stands
placed on the Company's website at the link: https://www.
sukhjitgroup.com/whistle-blower-policy
17. RISK MANAGEMENT POLICY
The company recognizes that the risk management and internal control are the key
elements for sustainable working of an organization and good corporate governance. It has
formulated the Risk Management Policy which describes the manner in which the company
identifies, assesses, monitors and manages risks. The details of the policy are available
at company's website at https://www.sukhjitgroup.com/ risk-management-policy
18. GENERAL DISCLOSURE
(i) All the deposits have been accepted / renewed / repaid as per the provisions of the
Companies Act. The company had no unclaimed / unpaid deposits on 31/03/2023.
(ii) Unsecured Loans as on 31/03/2023 include H 0.55 crores (P.Y. H 0.52 crores)
received from directors, which have been made out of their own funds and not from the
funds acquired by them by borrowing or accepting loans or deposits from others, as per the
declarations received from the concerned directors.
(iii) The Company has duly complied with Secretarial Standards issued by the Institute
of Company Secretaries of India on Meetings of the Board of Directors, Committee Meetings
and the General Meetings.
(iv) No shares have been issued during the year under reference with differential
rights as to dividend, voting or otherwise.
(v) There is no significant and material order passed by any Regulator, Court, Tribunal
which may impact the going concern status of the Company and Company's operations in
future.
(vi) There are no material changes or commitments affecting the financial position of
the Company which occurred between the end of the financial year to the date of this
report.
(vii) There is no Corporate Insolvency Resolution Process initiated under the
Insolvency and Bankruptcy Code, 2016 against the Company or any of its subsidiaries.
(viii) There is no change in the nature of company's business during the year under
review.
(ix) There was no instance of fraud during the year under reference which required the
Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12)
of Act and Rules made there under.
(x) The Board has constituted an Internal Committee for redressal of grievance(s) /
complaint(s) (if any) under the provisions of the ''Sexual Harassment of Woman at
Workplace (Prevention, Prohibition and Redressal) Act, 2013''. The committee has not
received any complaint during the year under reference.
(xi) In view of the relaxation granted by MCA /SEBI amid Covid-19 pandemic and as per
the Green Initiative taken by MCA, the Company is serving its shareholders all
communications / documents including Annual Reports, Notices, Circulars etc. through
electronic mode. The shareholders who have not registered / updated their Email IDs with
the Company / RTA are, once again, requested to kindly register /update the same with the
Company / RTA in case of physical shares and with their Depository Participants in respect
of shares held in Demat form.
(xii) There has been no default in repayment of deposits or payment of interest thereon
during the year.
(xiii) There was no instance during the year where the recommendations of any committee
were not accepted by the Board.
(xiv) The requirement to disclose the details of difference between the amount of the
valuation done at the time of onetime settlement and the valuation done while taking loan
from the Banks or Financial Institutions along with the reasons thereof, is not
applicable.
19. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The report on Corporate Social Responsibility activities carried out during the
financial year 2022-23 is annexed herewith marked as 'Annexure D' to this report.
20. INSIDER TRADING PREVENTION CODE
Pursuant to the provisions of the Securities and Exchange Board of India (Prohibition
of Insider Trading) Regulations, 2015 and amendments thereto, the Company has adopted an
Internal Code of Conduct for Regulating, Monitoring and Reporting of Trades by the
Designated Persons. The Code is to prevent Insider
Trading by the Directors and other Designated Persons who are considered to have access
to the Unpublished Price Sensitive Information relating to the Company.
21. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
The Company has not entered into any material transaction with its Directors, Key
Managerial Personnel or their Relatives which could have potential conflict with the
interest of the Company. The salaries/ remuneration of the directors and KMPs have been
fixed after due consideration and approval by the Nomination and Remuneration Committee /
Board / Shareholders as per applicable provisions of the Act. The transactions with the
subsidiary companies mainly include the supply of some key infrastructural facilities and
utilities by Sukhjit Mega Food Park and Infra Ltd., which is a wholly owned subsidiary of
the Company. However, the transactions with subsidiary Companies are incurred after due
appraisal, approval(s) at appropriate levels and omnibus approval by the Audit Committee /
Board, which are in the ordinary course of business and are at an arm's length price. In
terms of IND AS-24, the details of such transactions are duly presented in the Notes to
Accounts forming part of the Annual Report. Policy on related party transactions of the
company appears on the Company's website at the link:
https://www.sukhjitgroup.com/policy-on-dealing-with-related-party-transactions
22. PARTICULARS OF LOANS GIVEN, INVESTMENTS MADE, GUARANTEES GIVEN AND SECURITIES
PROVIDED
Particulars of loans given and Investments made by the Company are provided in the
standalone financial statements. The Company has given/provided some Guarantees /
Securities to the Govt. / other Departments in the ordinary course of business. The
company has also provided Corporate guarantee(s) for H 40 crores to the Yes Bank Ltd.
against the Term Loan for setting up the Mega Food Park by its wholly owned subsidiary M/s
Sukhjit Mega Food Park & Infra Ltd. The outstanding balance of term loan appeared at H
18 crores due to the Yes Bank Ltd. as on 31.03.2023. There is no any other Guarantee /
third party Guarantee / security given / provided by the Company.
23. EXTRACT OF ANNUAL RETURN
Extract of the Annual Return of the Company is annexed herewith as 'Annexure E' to this
report. A copy of the same has also been placed on Company's website at the link :
https://www.sukhjitgroup.com/ annual-return
24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND
OUTGO
The necessary details are annexed herewith as 'Annexure F' to this report.
25. TRANSFER TO INVESTOR EDUCATION & PROTECTION FUND (IEPF)
Pursuant to the applicable provisions of the Companies Act, 2013 read with the Investor
Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules,
2016 (IEPF Rules), the company has transferred during FY 2022-23 : (a) Rs 10,68,045/- as
unpaid / unclaimed dividend for FY2014-15 to the Investor Education and Protection Fund
(IEPF).
(b) Rs 10,92,495/- as unpaid / unclaimed interim dividend for FY 2015-16 to the
Investor Education and Protection Fund (IEPF).
(c) 8592 shares to the demat account of the IEPF Authority on which dividend has not
been paid / claimed by the shareholders for 7 (seven) consecutive years or more.
26. AUDITORS AND AUDITORS' REPORT
Statutory Auditors :
M/s Y K Sud & Co., Chartered Accountants (FRN 000047N), the retiring Auditors of
the Company have confirmed their eligibility to be re-appointed as Statutory Auditors of
the Company at the ensuing Annual General Meeting. The Board of Directors recommend the
re-appointment of M/s Y K Sud & Co., Chartered Accountants as auditors of the Company
to hold office from the conclusion of this Annual General Meeting till the conclusion of
the next Annual General Meeting. The Company has paid a sum of •7.08 lacs (incl. GST)
to M/s Y K Sud & Co., Chartered Accountants as audit fees during the Financial Year
ended 31st March, 2023.
The Auditors' report for the financial year ended 31/03/2023 does not have any
qualification, reservation, adverse remark or disclaimer by the statutory auditors.
Cost Auditors :
The Board of Directors recommends the re-appointment of M/s Khushwinder Kumar &
Associates, Cost Accountants, as Cost Auditors of the Company for the financial year
2023-24, subject to the approval of the Central Government. The Cost Audit Report for the
financial year ended 31st March, 2023 is due to be filed with the Ministry of
Corporate affairs on or before the 30th September, 2023 and the cost audit
report for the financial year ended 31/03/2022 was duly filed within the due dates.
Secretarial Auditors :
The Board has re-appointed M/s Dinesh Gupta & Co., Practicing Company Secretaries,
as Secretarial Auditors for the financial year 2023-24.
The Secretarial Audit Report for the financial year ended 31st March, 2023,
in relation to compliance of all applicable SEBI Regulations/circulars/ guidelines issued
thereunder, pursuant to requirement of Regulation 24A of Listing Regulations along with
the Secretarial Audit Report of the material subsidiary company is set out in 'Annexure H'
to this report. The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
27. ACKNOWLEDGEMENT
Your Directors hereby acknowledge the dedication, loyalty, hard work, solidarity and
committed services of the executives, staff & workers of the Company. They would also
like to place on record their appreciation for the continued co-operation and support
received by the Company during the year from bankers, financial institutions, government
authorities, business associates, shareholders, vendors, customers and other stakeholders
and for the confidence reposed in the Company and its management and look forward to their
continued support.
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